# FS Bancorp, Inc. (FSBW)

Informational only - not investment advice.

CIK: 0001530249
SIC: 6036 Savings Institutions, Not Federally Chartered
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6036 Savings Institutions, Not Federally Chartered](/industry/6036/)
Latest 10-K filed: 2026-03-13
SEC page: https://www.sec.gov/edgar/browse/?CIK=1530249
Filing source: https://www.sec.gov/Archives/edgar/data/1530249/000143774926008243/fsbw20251231_10k.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-03-13 · accession 0001437749-26-008243 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001530249.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 197,246,000 USD | 2025 | verified |
| Net income | 33,346,000 USD | 2025 | verified |
| Assets | 3,196,847,000 USD | 2025 | verified |
| Free cash flow | 51,939,000 USD | 2025 | computed |
| Net margin | 16.91% | 2025 | computed |
| Revenue YoY | +6.71% | 2025 | computed |
| ROE | 10.84% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | FSBW | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 16.9% | 17.7% | 47 | 16 |
| Revenue growth | 6.7% | 8.5% | 27 | 16 |
| FCF margin | 26.3% | 23.0% | 69 | 14 |
| ROE | 10.8% | 7.3% | 73 | 16 |
| ROA | 1.0% | 1.0% | 67 | 16 |
| Liabilities / equity | 9.39 | 7.69 | 87 | 16 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6036 Savings Institutions, Not Federally Chartered, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 197246000 | USD | 2025 | 2026-03-13 |
| Net income | 33346000 | USD | 2025 | 2026-03-13 |
| Assets | 3196847000 | USD | 2025 | 2026-03-13 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001530249.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 38,020,000 | 46,181,000 | 62,326,000 | 89,625,000 | 88,837,000 | 96,374,000 | 118,694,000 | 167,192,000 | 184,837,000 | 197,246,000 |
| Net income | 10,499,000 | 14,085,000 | 24,347,000 | 22,717,000 | 39,264,000 | 37,412,000 | 29,649,000 | 36,053,000 | 35,024,000 | 33,346,000 |
| Diluted EPS | 3.51 | 4.28 | 6.29 | 5.01 | 4.49 | 4.37 | 3.70 | 4.56 | 4.36 | 4.29 |
| Operating cash flow | 3,588,000 | 15,084,000 | 21,437,000 | 9,177,000 | -32,317,000 | 109,009,000 | 184,898,000 | 77,669,000 | 50,823,000 | 72,313,000 |
| Capital expenditures | 3,595,000 | 1,016,000 | 3,796,000 | 2,463,000 | 1,379,000 | 1,984,000 | 1,551,000 | 1,671,000 | 1,635,000 | 20,374,000 |
| Dividends paid |  |  |  |  |  | 4,602,000 | 7,096,000 | 7,764,000 | 8,265,000 | 10,262,000 |
| Share buybacks | 4,903,000 | 275,000 | 251,000 | 4,800,000 | 9,802,000 | 13,961,000 | 15,628,000 | 223,000 | 2,508,000 | 15,423,000 |
| Assets | 827,926,000 | 981,783,000 | 1,621,644,000 | 1,713,056,000 | 2,113,241,000 | 2,286,391,000 | 2,632,900,000 | 2,972,669,000 | 3,029,177,000 | 3,196,847,000 |
| Liabilities | 746,893,000 | 859,781,000 | 1,441,606,000 | 1,512,814,000 | 1,883,234,000 | 2,038,884,000 | 2,401,203,000 | 2,708,181,000 | 2,733,410,000 | 2,889,153,000 |
| Stockholders' equity | 81,033,000 | 122,002,000 | 180,038,000 | 200,242,000 | 230,007,000 | 247,507,000 | 231,697,000 | 264,488,000 | 295,767,000 | 307,694,000 |
| Cash and cash equivalents | 36,456,000 | 18,915,000 | 32,779,000 | 45,778,000 | 91,576,000 | 26,491,000 | 41,437,000 | 65,691,000 | 31,635,000 | 28,219,000 |
| Free cash flow | -7,000 | 14,068,000 | 17,641,000 | 6,714,000 | -33,696,000 | 107,025,000 | 183,347,000 | 75,998,000 | 49,188,000 | 51,939,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | 27.61% | 30.50% | 39.06% | 25.35% | 44.20% | 38.82% | 24.98% | 21.56% | 18.95% | 16.91% |
| Return on equity | 12.96% | 11.54% | 13.52% | 11.34% | 17.07% | 15.12% | 12.80% | 13.63% | 11.84% | 10.84% |
| Return on assets | 1.27% | 1.43% | 1.50% | 1.33% | 1.86% | 1.64% | 1.13% | 1.21% | 1.16% | 1.04% |
| Liabilities / equity | 9.22 | 7.05 | 8.01 | 7.55 | 8.19 | 8.24 | 10.36 | 10.24 | 9.24 | 9.39 |

## As-reported value updates

No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks.


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-10. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001530249.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 1.08 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 1.04 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 1.16 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 43,270,000 | 8,953,000 | 1.13 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 44,443,000 | 9,772,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 44,880,000 | 8,397,000 | 1.06 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 45,940,000 | 8,959,000 | 1.13 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 47,043,000 | 10,286,000 | 1.29 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 46,974,000 | 7,382,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 46,788,000 | 8,021,000 | 1.01 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 48,703,000 | 7,728,000 | 0.99 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 50,973,000 | 9,177,000 | 1.18 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 50,783,000 | 8,420,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 49,333,000 | 7,830,000 | 1.02 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 49,662,000 | 7,936,000 | 1.04 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from FSBW's latest 10-K: [/company/FSBW/business/](/company/FSBW/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from FSBW's latest 10-K: [/company/FSBW/risk-factors/](/company/FSBW/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1530249/000143774926026740/fsbw20260630_10q.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-08-10
Report date: 2026-06-30

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward–Looking Statements

This report contains forward-looking statements, which can be identified by the use of words such as “believes,” “expects,” “anticipates,” “estimates,” “plans,” “intends,” “projects,” or similar expressions. Forward-looking statements include, but are not limited to:

[[GREPCENT_TABLE]]
[["\u25cf","statements regarding our goals, intentions, and expectations;"],["\u25cf","statements regarding our business plans, prospects, growth, and operating strategies;"],["\u25cf","statements regarding the quality of our loan and investment portfolios; and"],["\u25cf","estimates of our risks and future costs and benefits."]]
[[/GREPCENT_TABLE]]

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among other things, the following factors:

[[GREPCENT_TABLE]]
[["\u25cf","adverse impacts on economic conditions in our local markets or other markets where we have lending relationships; or to other aspects of the Company's business operations;"],["\u25cf","effects of employment levels, labor shortages, persistent inflation, recessionary pressures or slowed economic growth;"],["\u25cf","changes in interest rate levels and volatility, and the timing and pace of such changes, including actions by the Board of Governors of the Federal Reserve System (\u201cFederal Reserve\u201d), which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity;"],["\u25cf","the impact of inflation and related monetary and fiscal policy responses thereto, and their impact on consumer and business behavior;"],["\u25cf","geopolitical developments and international conflicts, or the imposition of new or increased tariffs and trade restrictions that may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors;"],["\u25cf","the effects of any government shutdown, debt ceiling standoff, or other fiscal policy uncertainty;"],["\u25cf","credit risks inherent in lending activities, including loan delinquencies, charge-offs, changes in our allowance for credit losses (\u201cACL\u201d), and provisions for credit losses;"],["\u25cf","secondary market conditions and our ability to originate loans for sale and sell loans in the secondary market;"],["\u25cf","fluctuations in loan demand, unsold homes, and land and in property values;"],["\u25cf","staffing fluctuations arising from product demand or corporate strategies;"],["\u25cf","use of estimates in determining the fair value of assets, which may prove incorrect;"],["\u25cf","increased competitive pressures among financial services companies;"],["\u25cf","our ability to execute our plans to grow our residential construction lending, our home lending operations, our warehouse lending, and the geographic expansion of our indirect home improvement lending;"],["\u25cf","our ability to attract and retain deposits;"],["\u25cf","our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire in the future into our operations, to realize related revenue synergies and cost savings within expected time frames, and the potential for goodwill impairments;"],["\u25cf","our ability to control operating costs and expenses;"],["\u25cf","expectations regarding key growth initiatives and strategic priorities;"],["\u25cf","retention of key members of our senior management team;"],["\u25cf","changes in consumer spending, borrowing, and savings habits;"],["\u25cf","our ability to successfully manage our growth;"],["\u25cf","bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment;"],["\u25cf","the ability to adapt to rapid technological changes, including advancements related to artificial intelligence (\u201cAI\u201d), the use of AI models in credit decisioning, customer service, and operations, including risks of model error, bias, regulatory scrutiny under fair lending laws, and third-party AI dependencies, digital banking platforms, and cybersecurity;"],["\u25cf","risk associated with the evolving regulatory and market environment for digital assets and cryptocurrency, including potential impacts on customer behavior, deposit flows, and our ability to offer or support related products or services;"],["\u25cf","legislation or regulatory changes including, but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws;"]]
[[/GREPCENT_TABLE]]

52

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[[GREPCENT_TABLE]]
[["\u25cf","our ability to pay dividends on our common stock;"],["\u25cf","quality and composition of our securities portfolio and the impact of adverse changes in the securities markets;"],["\u25cf","changes in accounting policies and practices adopted by the bank regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board (\u201cFASB\u201d);"],["\u25cf","costs and effects of litigation, including settlements and judgments;"],["\u25cf","vulnerabilities in our information systems or those of third-party service providers, including disruptions, breaches, or cyberattacks;"],["\u25cf","inability of key third-party vendors to perform their obligations to us;"],["\u25cf","effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest, and other external events;"],["\u25cf","the potential for new or increased tariffs, trade restrictions or geopolitical tensions that could affect economic activity or specific industry sectors;"],["\u25cf","environmental, social and governance goals and targets;"],["\u25cf","other economic, competitive, governmental, bank regulatory, consumer and technical factors affecting our operations, pricing, products and services; and"],["\u25cf","other risks described elsewhere in this Form 10\u2011Q and our other reports filed with or furnished to the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025 (the \u201c2025 Form 10-K\u201d)."]]
[[/GREPCENT_TABLE]]

Further, statements about the potential effects of the Company’s proposed merger with Pacific West Bancorp, headquartered in West Linn, Oregon (“Pacific West”) on the Company’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable, and in many cases, beyond the Company’s control, including the following:

[[GREPCENT_TABLE]]
[["\u25cf","the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all;"],["\u25cf","governmental approval of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger;"],["\u25cf","conditions to the closing of the merger may not be satisfied; the shareholders of Pacific West may fail to approve the consummation of the merger;"],["\u25cf","the integration of the combined company, including personnel changes/retention, might not proceed as planned; and"],["\u25cf","the combined company might not perform as well as expected."]]
[[/GREPCENT_TABLE]]

Any forward-looking statements in this Form 10‑Q and in other public statements may prove to be inaccurate because of incorrect assumptions, the factors described above, or other factors that we cannot foresee. Forward-looking statements are based on management’s beliefs and assumptions as of the time they are made. The Company undertakes no obligation to update or revise any forward-looking statement included in this report or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements in this report might not occur and you should not place undue reliance on any forward-looking statements.

Overview

1st Security Bank including the predecessor to Anchor Bank, one of its banking acquisitions, has been serving the Puget Sound area since 1907.  On July 9, 2012, the Bank converted from mutual to stock ownership, becoming the wholly owned subsidiary of FS Bancorp.

The Company is relationship-driven, delivering banking and financial services to families, businesses, and industry niches in suburban communities across the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area (also known as the Tri-Cities), and the communities of Goldendale, Vancouver, and White Salmon, Washington, as well as Manzanita, Newport, Ontario, Tillamook and Waldport, Oregon.

In addition to its community banking presence, the Company maintains a long-standing indirect consumer lending platform operating primarily throughout the Western United States. Through active community involvement and a broad array of products and services, the Company emphasizes long-term relationships with the families and businesses it serves, working alongside them to meet their evolving financial needs. 

53

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The Company's strategic focus involves diversifying revenues, expanding lending channels, and enhancing the banking franchise. Management is committed to building varied revenue streams while thoughtfully managing credit, interest rate, and concentration risks. This commitment is reflected in the following priorities:

[[GREPCENT_TABLE]]
[["\u25cf","Growing and diversifying the loan portfolio;"],["\u25cf","Maintaining strong asset quality;"],["\u25cf","Emphasizing lower cost core deposits to reduce funding costs and support loan growth;"],["\u25cf","Capturing customers\u2019 complete relationships through a broad array of products and services, leveraging community involvement, and selectively emphasizing offerings aligned with customers\u2019 banking needs; and"],["\u25cf","Expanding into new markets."]]
[[/GREPCENT_TABLE]]

As a diversified lender, the Company specializes in originating one-to-four-family residential loans, CRE mortgages, second mortgages, consumer loans, marine lending, and commercial business loans.

At June 30, 2026, the Company's loan portfolio consisted of the following major categories: CRE loans, residential real estate loans, consumer loans, and commercial business loans representing 37.8%, 29.8%, 21.5%, and 10.9% of the portfolio, respectively. 

Indirect home improvement loans to finance window, gutter, siding replacement, solar panels, spas, and other improvement renovations represent a large segment of the consumer loan portfolio. These loans are sourced through a contractor/dealer network of 27 active fixture dealerships located throughout Washington, Oregon, California, Idaho, Colorado, Nevada, Arizona, Minnesota, Texas, Utah, Massachusetts, Montana, and New Hampshire. During the three months ended June 30, 2026, the Company originated 1,221 indirect home improvement loans with an aggregate total of $28.9 million. Five contractor/dealers accounted for 72.9% of the dollar volume funded in this category, and three states – Washington, Oregon, and California – represented nearly three-quarters of total loan originations at 33.9%, 25.3%, and 14.6%, respectively.

The Company originates one-to-four-family residential mortgage loans through referrals from real estate agents, financial planners, builders, and existing customers, with retail banking customers also serving as an

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1530249/000143774926008243/fsbw20251231_10k.htm
Complete FY 2025 MD&A: /company/FSBW/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-03-13
Report date: 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reviews our consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the Consolidated Financial Statements and footnotes thereto that appear in Item 8. of this Form 10–K. The information contained in this section should be read in conjunction with these Consolidated Financial Statements and footnotes and the business and financial information provided in this Form 10–K.

Overview

1st Security Bank has been serving the Puget Sound area since 1907, which includes the period in which the predecessor to Anchor Bank, one of its banking acquisitions, was formed. On July 9, 2012, the Bank converted from mutual to stock ownership and became the wholly owned subsidiary of FS Bancorp.

The Company is relationship-driven, delivering banking and financial services to local families, local and regional businesses and industry niches in suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, as well as Goldendale, Vancouver, and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon. 

52

Table of Contents

The Company also maintains its long-standing indirect consumer lending platform which operates primarily throughout the Western United States. The Company emphasizes long-term relationships with families and businesses within the communities served, working with them to meet their financial needs. The Company is also actively involved in community activities and events within these market areas, which further strengthens its relationships within these markets.

The Company's strategic focus involves diversifying revenues, expanding lending channels, and enhancing the banking franchise. Management is committed to establishing varied revenue streams considering credit, interest rate, and concentration risks. The business plan includes:

[[GREPCENT_TABLE]]
[["","\u25cf","Growing and diversifying our loan portfolio;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Maintaining strong asset quality;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Emphasizing lower cost core deposits to reduce the costs of funding our loan growth;"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Capturing customers\u2019 complete relationships through a broad array of products and services, leveraging community involvement, and selectively emphasizing offerings aligned with customers\u2019 banking needs; and"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","\u25cf","Expanding into new markets."]]
[[/GREPCENT_TABLE]]

As a diversified lender, the Company specializes in originating one-to-four-family residential loans, CRE mortgages, second mortgages, consumer loans, marine lending, and commercial business loans. 

At December 31, 2025, the Company's loan portfolio consisted of the following major categories: CRE loans, residential real estate loans, consumer loans, and commercial business loans representing 36.5%, 28.6%, 22.5% and 12.4% of the portfolio, respectively. 

Indirect home improvement loans to finance window, gutter, siding replacement, solar panels, spas, and other improvement renovations are a large segment of the consumer loan portfolio. These indirect home improvement loans are dependent on the Company's contractor/dealer network of 33 currently active fixture dealerships located throughout Washington, Oregon, California, Idaho, Colorado, Nevada, Arizona, Minnesota, Texas, Utah, Massachusetts, Montana, and New Hampshire. During the year ended December 31, 2025, the Company originated 6,146 indirect home improvement loans with an aggregate total of $138.2 million. Five contractor/dealer accounted for 77.5% of the dollar volume funded in this category.  In addition, four states represented nearly three-quarters of the loan originations: Washington, Oregon, California, and Colorado with 37.0%, 19.0%, 12.9%, and 6.5% of total loan volume, respectively.

The Company originates one-to-four-family residential mortgage loans through referrals from real estate agents, financial planners, builders, and from existing customers. Retail banking customers are also an important source of the Company’s loan originations. The Company originated $716.6 million of one-to-four-family loans (which included loans held for sale, loans held for investment and fixed seconds) in addition to $22.9 million of loans brokered to other institutions through the home lending segment during the year ended December 31, 2025, of which $555.2 million were sold to investors. Of the loans sold to investors, $209.1 million were sold to the FNMA, FHLMC, FHLB, and GNMA with servicing rights retained for the purpose of further developing these customer relationships. 

For the year ended December 31, 2025, one-to-four-family loan originations and refinancing activity increased compared to the prior period as a result of changes in interest rates and economic conditions. Residential construction and development lending, while not as common as other loan origination options like one-to-four-family loans, continues to be an important element in our total loan portfolio, and we continue to take a disciplined approach by concentrating our efforts on loans to builders and developers in our market areas known to us. These short-term loans typically have a maturity period of six to 18 months, with disbursements not fully realized at origination, leading to a short-term reduction in net loans receivable.

The Company is affected by prevailing economic conditions, as well as government policies and regulations concerning, among other things, monetary and fiscal affairs. Deposit flows are influenced by a number of factors, including interest rates paid on time deposits, other investments, account maturities, and the overall level of personal income and savings. Lending activities are influenced by the demand for funds, the number and quality of lenders, and regional economic cycles. Sources of funds for lending activities include primarily deposits, including brokered deposits, borrowings, payments on loans, and income provided from operations.

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The Company’s earnings are primarily dependent upon net interest income, the difference between interest income and interest expense.  Interest income is a function of the balances of loans and investments outstanding during a given period and the yield earned on these loans and investments.  Interest expense is a function of the amount of deposits and borrowings outstanding during the same period and the interest rates paid on these deposits and borrowings. 

The Company's earnings are also affected by fee income from mortgage banking activities, the provision for (reversal of) credit losses, service charges and fees, gains from sales of assets, operating expenses and income taxes. 

Critical Accounting Estimates

We prepare our consolidated financial statements in accordance with GAAP. In doing so, we must make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical accounting estimates with the audit committee of our Board of Directors.  See “Note 1 – Basis of Presentation and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10–K for a summary of significant accounting policies and the effect on our financial statements.

Allowance for Credit Losses (“ACL”) on Loans. The ACL reflects Management’s evaluation of our loans and their estimated loss potential, as well as the risk inherent in various components of the portfolio. Significant judgment and assumptions are applied in estimating the ACL. These judgments, assumptions and estimates are susceptible to significant changes based on the current environment. Among the material estimates required to establish the allowance for credit losses are a reasonable and supportable forecast; a reasonable and supportable forecast period and the reversion period; value of collateral; strength of guarantors; the amount and timing of future cash flows for loans individually evaluated; and determination of the qualitative loss factors.

Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The ACL is maintained at a level sufficient to provide for expected credit losses over the life of the asset based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current portfolio. These factors include, among others, changes in the size and composition of the portfolio, delinquency rates, actual loss experience and current economic conditions.

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During 2025, the change in the allowance was primarily driven by loan portfolio growth, changes in delinquency rates, and changes in economic forecast assumptions utilized in the Company’s expected credit loss models. Key forecast variables impacting the estimate included projected unemployment rates, interest rates, and other macroeconomic factors. The Company also updated certain qualitative adjustment factors to reflect observed trends in credit performance and portfolio composition. While the overall modeling framework and methodology remained consistent with the prior year, updates to economic forecasts and qualitative factors resulted in changes to the estimated lifetime loss rates across several portfolio segments.

The ACL is sensitive to changes in economic forecasts and qualitative assumptions. Holding other assumptions constant, deterioration in economic conditions comparable to the Company’s adverse forecast scenario would result in an increase in the ACL, while improvement in forecast assumptions would reduce the allowance. Changes in qualitative factors related to portfolio concentrations, collateral values, or credit performance trends could also materially affect the ACL. 

Because current economic conditions and forecasts can change and future events make it inherently difficult to predict the anticipated amount of estimated credit losses on loans, management's determination of the appropriateness of the ACL, could change significantly. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may move independently of one another, such that improvement in one or certain factors may offset deterioration in others. Thus, as a result of the significant size of the loan portfolio, the numerous assumptions in the model, and the high degree of potential change in such assumptions, there is a high degree of sensitivity to the reported

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/FSBW/mda/fy2025/
All MD&A years: /company/FSBW/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/FSBW/mda/fy2024/): filed 2025-03-17; accession 0001437749-25-008049 (https://www.sec.gov/Archives/edgar/data/1530249/000143774925008049/fsbw20241231_10k.htm)
- [FY 2023 MD&A](/company/FSBW/mda/fy2023/): filed 2024-03-15; accession 0001437749-24-008140 (https://www.sec.gov/Archives/edgar/data/1530249/000143774924008140/fsbw20221231_10k.htm)
- [FY 2022 MD&A](/company/FSBW/mda/fy2022/): filed 2023-03-16; accession 0001558370-23-004037 (https://www.sec.gov/Archives/edgar/data/1530249/000155837023004037/fsbw-20221231x10k.htm)
- [FY 2021 MD&A](/company/FSBW/mda/fy2021/): filed 2022-03-16; accession 0001558370-22-003750 (https://www.sec.gov/Archives/edgar/data/1530249/000155837022003750/fsbw-20211231x10k.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 6036 Savings Institutions, Not Federally Chartered) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity

Macro-to-micro threads including this sector: [Interest rates & the Fed](/thread/interest-rates-fed/), [Money & trade](/thread/money-trade/), [Consumer & credit](/thread/consumer-credit/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/FSBW.md · JSON record: /company/FSBW.json · verified financials: /company/FSBW/financials.json / /company/FSBW/financials.csv · machine TOC for the whole site: /llms.txt