What changed in FS Bancorp, Inc.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of FS Bancorp, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+435 added−468 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-17)
Top changes in FS Bancorp, Inc.'s 2025 10-K
435 paragraphs added · 468 removed · 327 edited across 3 sections
- Item 2. Properties+433 / −466 · 325 edited
- Item 1. Business+1 / −1 · 1 edited
- Item 7. Management's Discussion & Analysis+1 / −1 · 1 edited
Item 1. Business
Business — how the company describes what it does
1 edited+0 added−0 removed0 unchanged
Item 1. Business
Business — how the company describes what it does
1 edited+0 added−0 removed0 unchanged
2024 filing
2025 filing
Biggest changeBusiness: 3 General 3 Market Area 4 Lending Activities 4 Loan Originations, Servicing, Purchases and Sales 11 Asset Quality 14 Allowance for Credit Losses 15 Investment Activities 18 Deposit Activities and Other Sources of Funds 19 Subsidiary and Other Activities 19 Competition 19 Information about our Executive Officers 23 Human Capital 25 How We Are Regulated 26 Taxation 34
Biggest changeBusiness: 3 General 3 Market Area 4 Lending Activities 4 Loan Originations, Servicing, Purchases and Sales 4 Asset Quality 13 Allowance for Credit Losses 14 Investment Activities 17 Deposit Activities and Other Sources of Funds 18 Subsidiary and Other Activities 21 Competition 21 Information about our Executive Officers 22 Human Capital 24 How We Are Regulated 24 Taxation 33
Item 2. Properties
Properties — owned and leased real estate
325 edited+108 added−141 removed209 unchanged
Item 2. Properties
Properties — owned and leased real estate
325 edited+108 added−141 removed209 unchanged
2024 filing
2025 filing
Biggest changeDecember 31, 2024 Revolving Loans REAL ESTATE LOANS Term Loans by Year of Origination Revolving Converted Total CRE 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 13,023 $ 48,434 $ 84,077 $ 51,874 $ 43,652 $ 66,142 $ — $ 679 $ 307,881 Watch — 3,135 10,689 12,654 — 6,948 — — 33,426 Special mention — — — — — 394 — — 394 Substandard — — — — 1,625 1,991 — — 3,616 Total CRE 13,023 51,569 94,766 64,528 45,277 75,475 — 679 345,317 Construction and development Pass 167,942 87,012 30,200 29,851 — 380 10,336 — 325,721 Substandard — — 4,979 — — — — — 4,979 Total construction and development 167,942 87,012 35,179 29,851 — 380 10,336 — 330,700 Home equity Pass 6,501 2,379 326 1,538 5,930 1,631 56,430 151 74,886 Substandard — — — — — 14 247 — 261 Total home equity 6,501 2,379 326 1,538 5,930 1,645 56,677 151 75,147 One-to-four-family Pass 77,602 110,505 174,355 109,006 76,653 66,426 — — 614,547 Substandard — — 735 — — 2,040 — — 2,775 Total one-to-four-family 77,602 110,505 175,090 109,006 76,653 68,466 — — 617,322 Multi-family Pass 20,662 7,030 20,098 89,733 59,886 47,813 — — 245,222 Total multi-family 20,662 7,030 20,098 89,733 59,886 47,813 — — 245,222 Total real estate loans $ 285,730 $ 258,495 $ 325,459 $ 294,656 $ 187,746 $ 193,779 $ 67,013 $ 830 $ 1,613,708 December 31, 2024 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Revolving Converted Total Indirect home improvement 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 98,516 $ 130,254 $ 167,896 $ 74,577 $ 28,045 $ 40,981 $ — $ — $ 540,269 Substandard 99 403 712 100 106 257 — — 1,677 Total indirect home improvement 98,615 130,657 168,608 74,677 28,151 41,238 — — 541,946 Indirect home improvement gross charge-offs 381 1,477 1,627 677 568 523 — — 5,253 Marine Pass 13,322 11,386 20,449 8,521 10,958 10,006 — — 74,642 Substandard — — — — 106 183 — — 289 Total marine 13,322 11,386 20,449 8,521 11,064 10,189 — — 74,931 Marine gross charge-offs — 21 128 51 128 237 — — 565 Other consumer Pass 310 93 334 56 35 126 2,336 — 3,290 Substandard — — — 3 — — 11 — 14 Total other consumer 310 93 334 59 35 126 2,347 — 3,304 Other consumer gross charge-offs 1 33 6 — — 45 91 — 176 Total consumer loans $ 112,247 $ 142,136 $ 189,391 $ 83,257 $ 39,250 $ 51,553 $ 2,347 $ — $ 620,181 99 Table of Contents December 31, 2024 Revolving COMMERCIAL Loans BUSINESS LOANS Term Loans by Year of Origination Revolving Converted Total C&I 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 65,491 $ 20,084 $ 20,091 $ 16,468 $ 6,135 $ 8,791 $ 120,899 $ 602 $ 258,561 Watch — 4,987 — 722 1,799 — 4,183 — 11,691 Special mention — — — 543 — 556 6,375 — 7,474 Substandard — 2,373 — 2,243 1,255 1,296 2,121 — 9,288 Total C&I 65,491 27,444 20,091 19,976 9,189 10,643 133,578 602 287,014 C&I gross charge-offs — — — — — 380 761 — 1,141 Warehouse lending Pass — — — — — — 11,060 — 11,060 Special mention — — — — — — 1,858 — 1,858 Total warehouse lending — — — — — — 12,918 — 12,918 Total commercial business loans $ 65,491 $ 27,444 $ 20,091 $ 19,976 $ 9,189 $ 10,643 $ 146,496 $ 602 $ 299,932 TOTAL LOANS RECEIVABLE, GROSS Pass $ 463,369 $ 417,177 $ 517,826 $ 381,624 $ 231,294 $ 242,296 $ 201,061 $ 1,432 $ 2,456,079 Watch — 8,122 10,689 13,376 1,799 6,948 4,183 — 45,117 Special mention — — — 543 — 950 8,233 — 9,726 Substandard 99 2,776 6,426 2,346 3,092 5,781 2,379 — 22,899 Total loans receivable, gross $ 463,468 $ 428,075 $ 534,941 $ 397,889 $ 236,185 $ 255,975 $ 215,856 $ 1,432 $ 2,533,821 Total gross charge-offs $ 382 $ 1,531 $ 1,761 $ 728 $ 696 $ 1,185 $ 852 $ — $ 7,135 December 31, 2023 Revolving Loans REAL ESTATE LOANS Term Loans by Year of Origination Revolving Converted Total CRE 2023 2022 2021 2020 2019 Prior Loans to Term Loans Pass $ 48,551 $ 91,144 $ 61,689 $ 46,117 $ 27,957 $ 61,764 $ 499 $ — $ 337,721 Watch 3,201 5,446 12,894 — 453 2,226 45 — 24,265 Special mention — — — — 409 — — — 409 Substandard — — — 1,650 — 1,957 — 326 3,933 Total CRE 51,752 96,590 74,583 47,767 28,819 65,947 544 326 366,328 Construction and development Pass 120,155 106,168 46,989 15,219 — 540 9,284 — 298,355 Substandard — 4,699 — — — — — — 4,699 Total construction and development 120,155 110,867 46,989 15,219 — 540 9,284 — 303,054 Home equity Pass 4,583 398 1,584 6,525 11 2,137 54,077 — 69,315 Substandard — — — — — 36 137 — 173 Total home equity 4,583 398 1,584 6,525 11 2,173 54,214 — 69,488 Home equity gross charge-offs 10 10 One-to-four-family — Pass 103,165 175,412 122,406 80,815 30,595 52,008 — 472 564,873 Substandard — 866 — — — 2,003 — — 2,869 Total one-to-four-family 103,165 176,278 122,406 80,815 30,595 54,011 — 472 567,742 Multi-family Pass 7,106 20,404 91,047 42,511 37,990 24,711 — — 223,769 Total multi-family 7,106 20,404 91,047 42,511 37,990 24,711 — — 223,769 Total real estate loans $ 286,761 $ 404,537 $ 336,609 $ 192,837 $ 97,415 $ 147,382 $ 64,042 $ 798 $ 1,530,381 100 Table of Contents December 31, 2023 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Revolving Converted Total Indirect home improvement 2023 2022 2021 2020 2019 Prior Loans to Term Loans Pass $ 171,208 $ 212,661 $ 93,664 $ 36,032 $ 23,977 $ 30,492 $ 6 $ — $ 568,040 Substandard 212 663 448 141 258 141 — — 1,863 Total indirect home improvement 171,420 213,324 94,112 36,173 24,235 30,633 6 — 569,903 Indirect home improvement gross charge-offs 204 1,386 567 290 145 336 — — 2,928 Marine Pass 13,619 23,963 9,987 13,082 5,267 7,050 — — 72,968 Substandard — — 52 85 — 205 — — 342 Total marine 13,619 23,963 10,039 13,167 5,267 7,255 — — 73,310 Marine gross charge-offs — 47 93 — 7 256 — — 403 Other consumer Pass 309 559 175 69 3 159 2,258 — 3,532 Substandard — — — — — — 8 — 8 Total other consumer 309 559 175 69 3 159 2,266 — 3,540 Other consumer gross charge-offs — 2 12 — — — 120 — 134 Total consumer loans $ 185,348 $ 237,846 $ 104,326 $ 49,409 $ 29,505 $ 38,047 $ 2,272 $ — $ 646,753 December 31, 2023 Revolving COMMERCIAL Loans BUSINESS LOANS Term Loans by Year of Origination Revolving Converted Total C&I 2023 2022 2021 2020 2019 Prior Loans to Term Loans Pass $ 13,971 $ 32,334 $ 19,634 $ 11,537 $ 5,122 $ 9,707 $ 119,844 $ 145 $ 212,294 Watch 2,322 — 1,382 2,366 — 953 5,754 — 12,777 Special mention 143 — — — 498 253 1,345 — 2,239 Substandard 2,940 — 2,321 1,391 1,766 169 2,005 — 10,592 Doubtful — — — — — — 399 — 399 Total C&I 19,376 32,334 23,337 15,294 7,386 11,082 129,347 145 238,301 C&I gross charge-offs — — 1 — — — — — 1 Warehouse lending Pass — — — — — — 17,003 — 17,003 Watch — — — — — — 577 — 577 Total warehouse lending — — — — — — 17,580 — 17,580 Total commercial business loans $ 19,376 $ 32,334 $ 23,337 $ 15,294 $ 7,386 $ 11,082 $ 146,927 $ 145 $ 255,881 TOTAL LOANS RECEIVABLE, GROSS Pass $ 482,667 $ 663,043 $ 447,175 $ 251,907 $ 130,922 $ 188,568 $ 202,971 $ 617 $ 2,367,870 Watch 5,523 5,446 14,276 2,366 453 3,179 6,376 — 37,619 Special mention 143 — — — 907 253 1,345 — 2,648 Substandard 3,152 6,228 2,821 3,267 2,024 4,511 2,150 326 24,479 Doubtful — — — — — — 399 — 399 Total loans receivable, gross $ 491,485 $ 674,717 $ 464,272 $ 257,540 $ 134,306 $ 196,511 $ 213,241 $ 943 $ 2,433,015 Total gross charge-offs $ 204 $ 1,435 $ 673 $ 290 $ 152 $ 592 $ 130 $ — $ 3,476 101 Table of Contents The following table presents the amortized cost basis of loans on nonaccrual status at the dates indicated: December 31, 2024 December 31, 2023 Nonaccrual with Nonaccrual with Total Nonaccrual with Nonaccrual with Total REAL ESTATE LOANS No ACL ACL Nonaccrual No ACL ACL Nonaccrual CRE $ 2,771 $ — $ 2,771 $ 1,088 $ — $ 1,088 Construction and development — 4,979 4,979 — 4,699 4,699 Home equity 261 — 261 173 — 173 One-to-four-family 164 — 164 96 — 96 3,196 4,979 8,175 1,357 4,699 6,056 CONSUMER LOANS Indirect home improvement — 1,677 1,677 — 1,863 1,863 Marine — 289 289 — 342 342 Other consumer — 14 14 — 8 8 — 1,980 1,980 — 2,213 2,213 COMMERCIAL BUSINESS LOANS C&I 2,486 960 3,446 — 2,683 2,683 Total $ 5,682 $ 7,919 $ 13,601 $ 1,357 $ 9,595 $ 10,952 The Company recognized interest income on a cash basis for nonaccrual loans of $427,000, $579,000, and $506,000 during the years ended December 31, 2024, 2023 and 2022 , respectively.
Biggest changeDecember 31, 2025 Revolving Loans CRE LOANS Term Loans by Year of Origination Revolving Converted Total CRE owner occupied 2025 2024 2023 2022 2021 Prior Loans to Term Loans Pass $ 37,809 $ 4,148 $ 21,485 $ 35,169 $ 10,625 $ 34,840 $ — $ — $ 144,076 Watch 142 600 4,084 6,167 14,137 4,438 — — 29,568 Special mention — — — — — — — — — Substandard — — — — — 2,434 — — 2,434 Total CRE owner occupied 37,951 4,748 25,569 41,336 24,762 41,712 — — 176,078 CRE non-owner occupied Pass 9,467 8,362 15,734 49,708 34,888 51,951 — 475 170,585 Watch — — — — — — — — — Special mention — — — 1,354 — 2,113 — — 3,467 Substandard — — 3,061 — — — — — 3,061 Total CRE non-owner occupied 9,467 8,362 18,795 51,062 34,888 54,064 — 475 177,113 Commercial and speculative construction and development Pass 188,568 96,592 19,623 22,343 10,004 63 7,701 — 344,894 Substandard — — — 9,236 — — — — 9,236 Total commercial and speculative construction and development 188,568 96,592 19,623 31,579 10,004 63 7,701 — 354,130 Commercial and speculative construction and development gross charge-offs — — — 2,300 — — — — 2,300 Multi-family Pass 26,491 20,750 7,017 19,921 85,961 102,010 — — 262,150 Total multi-family 26,491 20,750 7,017 19,921 85,961 102,010 — — 262,150 Total CRE loans $ 262,477 $ 130,452 $ 71,004 $ 143,898 $ 155,615 $ 197,849 $ 7,701 $ 475 $ 969,471 Total CRE loans gross charge-offs $ — $ — $ — $ 2,300 $ — $ — $ — $ — $ 2,300 December 31, 2025 RESIDENTIAL Revolving REAL ESTATE LOANS Loans One-to-four-family Term Loans by Year of Origination Revolving Converted Total (excludes loans held for sale) 2025 2024 2023 2022 2021 Prior Loans to Term Loans Pass $ 93,883 $ 56,292 $ 102,074 $ 149,010 $ 97,732 $ 124,942 $ — $ 502 $ 624,435 Watch — — — 710 — — — — 710 Substandard — — 673 — — 2,943 — — 3,616 Total one-to-four-family 93,883 56,292 102,747 149,720 97,732 127,885 — 502 628,761 Home equity Pass 11,609 1,595 1,615 287 1,189 6,432 65,154 — 87,881 Substandard — — — — — 80 310 — 390 Total home equity 11,609 1,595 1,615 287 1,189 6,512 65,464 — 88,271 Residential custom construction Pass 31,650 8,097 1,230 1,352 — — — — 42,329 Total residential custom construction 31,650 8,097 1,230 1,352 — — — — 42,329 Total residential real estate loans $ 137,142 $ 65,984 $ 105,592 $ 151,359 $ 98,921 $ 134,397 $ 65,464 $ 502 $ 759,361 97 Table of Contents December 31, 2025 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Revolving Converted Total Indirect home improvement 2025 2024 2023 2022 2021 Prior Loans to Term Loans Pass $ 111,727 $ 67,451 $ 100,504 $ 131,844 $ 58,058 $ 52,002 $ — $ — $ 521,586 Substandard 434 792 1,011 1,124 323 572 — — 4,256 Total indirect home improvement 112,161 68,243 101,515 132,968 58,381 52,574 — — 525,842 Indirect home improvement gross charge-offs 261 1,763 1,647 2,025 884 753 — — 7,333 Marine Pass 7,619 10,210 9,647 17,126 7,366 15,693 — — 67,661 Substandard — — 5 111 94 244 — — 454 Total marine 7,619 10,210 9,652 17,237 7,460 15,937 — — 68,115 Marine gross charge-offs — 63 42 — 11 101 — — 217 Other consumer Pass 255 94 37 88 6 108 2,439 — 3,027 Substandard — — — 1 — — 1 — 2 Total other consumer 255 94 37 89 6 108 2,440 — 3,029 Other consumer gross charge-offs — 6 — — 2 56 117 — 181 Total consumer loans $ 120,035 $ 78,547 $ 111,204 $ 150,294 $ 65,847 $ 68,619 $ 2,440 $ — $ 596,986 Total consumer loans gross charge-offs $ 261 $ 1,832 $ 1,689 $ 2,025 $ 897 $ 910 $ 117 $ — $ 7,731 December 31, 2025 Revolving COMMERCIAL Loans BUSINESS LOANS Term Loans by Year of Origination Revolving Converted Total C&I 2025 2024 2023 2022 2021 Prior Loans to Term Loans Pass $ 48,052 $ 55,033 $ 18,762 $ 12,437 $ 12,048 $ 11,105 $ 123,306 $ 2,121 $ 282,864 Watch — — — — 1,017 — 6,303 16 7,336 Special mention — — 5,000 — — 1,391 648 — 7,039 Substandard 191 — 84 — 1,592 1,199 806 — 3,872 Total C&I 48,243 55,033 23,846 12,437 14,657 13,695 131,063 2,137 301,111 C&I gross charge-offs — — — — 433 — — — 433 Warehouse lending Pass — — — — — — 28,177 — 28,177 Special mention — — — — — — 3 — 3 Total warehouse lending — — — — — — 28,180 — 28,180 Total commercial business loans $ 48,243 $ 55,033 $ 23,846 $ 12,437 $ 14,657 $ 13,695 $ 159,243 $ 2,137 $ 329,291 Total commercial business loans gross charge-offs $ — $ — $ — $ — $ 433 $ — $ — $ — $ 433 TOTAL LOANS RECEIVABLE, GROSS Pass $ 567,130 $ 328,624 $ 297,728 $ 439,285 $ 317,877 $ 399,146 $ 226,777 $ 3,098 $ 2,579,665 Watch 142 600 4,084 6,877 15,154 4,438 6,303 16 37,614 Special mention — — 5,000 1,354 — 3,504 651 — 10,509 Substandard 625 792 4,834 10,472 2,009 7,472 1,117 — 27,321 Total loans receivable, gross $ 567,897 $ 330,016 $ 311,646 $ 457,988 $ 335,040 $ 414,560 $ 234,848 $ 3,114 $ 2,655,109 Total gross charge-offs $ 261 $ 1,832 $ 1,689 $ 4,325 $ 1,330 $ 910 $ 117 $ — $ 10,464 98 Table of Contents December 31, 2024 Revolving Loans CRE LOANS Term Loans by Year of Origination Revolving Converted Total CRE owner occupied 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 4,659 $ 31,943 $ 35,248 $ 15,653 $ 28,970 $ 22,926 $ — $ 679 $ 140,078 Watch — — 9,300 12,654 — 4,354 — — 26,308 Special mention — — — — — 394 — — 394 Substandard — — — — 1,625 1,991 — — 3,616 Total CRE owner occupied 4,659 31,943 44,548 28,307 30,595 29,665 — 679 170,396 CRE non-owner occupied Pass 8,364 16,491 48,829 36,221 14,682 43,216 — — 167,803 Watch — 3,135 1,389 — — 2,594 — — 7,118 Total CRE non-owner occupied 8,364 19,626 50,218 36,221 14,682 45,810 — — 174,921 Commercial and speculative construction and development Pass 129,201 77,241 28,810 29,851 — 380 10,336 — 275,819 Substandard — — 4,979 — — — — — 4,979 Total commercial and speculative construction and development 129,201 77,241 33,789 29,851 — 380 10,336 — 280,798 Multi-family Pass 20,662 7,030 20,098 89,733 59,886 47,813 — — 245,222 Total multi-family 20,662 7,030 20,098 89,733 59,886 47,813 — — 245,222 Total CRE loans $ 162,886 $ 135,840 $ 148,653 $ 184,112 $ 105,163 $ 123,668 $ 10,336 $ 679 $ 871,337 December 31, 2024 RESIDENTIAL Revolving REAL ESTATE LOANS Loans One-to-four-family Term Loans by Year of Origination Revolving Converted Total (excludes loans held for sale) 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 77,602 $ 110,505 $ 174,355 $ 109,006 $ 76,653 $ 66,426 $ — $ — $ 614,547 Substandard — — 735 — — 2,040 — — 2,775 Total one-to-four-family 77,602 110,505 175,090 109,006 76,653 68,466 — — 617,322 Home equity Pass 6,501 2,379 326 1,538 5,930 1,631 56,430 151 74,886 Substandard — — — — — 14 247 — 261 Total home equity 6,501 2,379 326 1,538 5,930 1,645 56,677 151 75,147 Residential custom construction Pass 38,741 9,771 1,390 — — — — — 49,902 Total residential custom construction 38,741 9,771 1,390 — — — — — 49,902 Total residential real estate loans $ 122,844 $ 122,655 $ 176,806 $ 110,544 $ 82,583 $ 70,111 $ 56,677 $ 151 $ 742,371 99 Table of Contents December 31, 2024 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Revolving Converted Total Indirect home improvement 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 98,516 $ 130,254 $ 167,896 $ 74,577 $ 28,045 $ 40,981 $ — $ — $ 540,269 Substandard 99 403 712 100 106 257 — — 1,677 Total indirect home improvement 98,615 130,657 168,608 74,677 28,151 41,238 — — 541,946 Indirect home improvement gross charge-offs 381 1,477 1,627 677 568 523 — — 5,253 Marine Pass 13,322 11,386 20,449 8,521 10,958 10,006 — — 74,642 Substandard — — — — 106 183 — — 289 Total marine 13,322 11,386 20,449 8,521 11,064 10,189 — — 74,931 Marine gross charge-offs — 21 128 51 128 237 — — 565 Other consumer Pass 310 93 334 56 35 126 2,336 — 3,290 Substandard — — — 3 — — 11 — 14 Total other consumer 310 93 334 59 35 126 2,347 — 3,304 Other consumer gross charge-offs 1 33 6 — — 45 91 — 176 Total consumer loans $ 112,247 $ 142,136 $ 189,391 $ 83,257 $ 39,250 $ 51,553 $ 2,347 $ — $ 620,181 Total consumer loans gross charge-offs $ 382 $ 1,531 $ 1,761 $ 728 $ 696 $ 805 $ 91 $ — $ 5,994 December 31, 2024 Revolving COMMERCIAL Loans BUSINESS LOANS Term Loans by Year of Origination Revolving Converted Total C&I 2024 2023 2022 2021 2020 Prior Loans to Term Loans Pass $ 65,491 $ 20,084 $ 20,091 $ 16,468 $ 6,135 $ 8,791 $ 120,899 $ 602 $ 258,561 Watch — 4,987 — 722 1,799 — 4,183 — 11,691 Special mention — — — 543 — 556 6,375 — 7,474 Substandard — 2,373 — 2,243 1,255 1,296 2,121 — 9,288 Total C&I 65,491 27,444 20,091 19,976 9,189 10,643 133,578 602 287,014 C&I gross charge-offs — — — — — 380 761 — 1,141 Warehouse lending Pass — — — — — — 11,060 — 11,060 Special mention — — — — — — 1,858 — 1,858 Total warehouse lending — — — — — — 12,918 — 12,918 Total commercial business loans $ 65,491 $ 27,444 $ 20,091 $ 19,976 $ 9,189 $ 10,643 $ 146,496 $ 602 $ 299,932 Total commercial business loans gross charge-offs $ — $ — $ — $ — $ — $ 380 $ 761 $ — $ 1,141 TOTAL LOANS RECEIVABLE, GROSS Pass $ 463,369 $ 417,177 $ 517,826 $ 381,624 $ 231,294 $ 242,296 $ 201,061 $ 1,432 $ 2,456,079 Watch — 8,122 10,689 13,376 1,799 6,948 4,183 — 45,117 Special mention — — — 543 — 950 8,233 — 9,726 Substandard 99 2,776 6,426 2,346 3,092 5,781 2,379 — 22,899 Total loans receivable, gross $ 463,468 $ 428,075 $ 534,941 $ 397,889 $ 236,185 $ 255,975 $ 215,856 $ 1,432 $ 2,533,821 Total gross charge-offs $ 382 $ 1,531 $ 1,761 $ 728 $ 696 $ 1,185 $ 852 $ — $ 7,135 100 Table of Contents The following table presents the amortized cost basis of loans on nonaccrual status at the dates indicated: December 31, 2025 December 31, 2024 Nonaccrual with Nonaccrual with Total Nonaccrual with Nonaccrual with Total CRE LOANS No ACL ACL Nonaccrual No ACL ACL Nonaccrual CRE owner occupied $ 2,049 $ — $ 2,049 $ 2,771 $ — $ 2,771 Commercial and speculative construction and development — 9,236 9,236 — 4,979 4,979 2,049 9,236 11,285 2,771 4,979 7,750 RESIDENTIAL REAL ESTATE LOANS One-to-four-family 1,778 — 1,778 164 — 164 Home equity 390 — 390 261 — 261 2,168 — 2,168 425 — 425 CONSUMER LOANS Indirect home improvement — 4,256 4,256 — 1,677 1,677 Marine — 454 454 — 289 289 Other consumer — 2 2 — 14 14 — 4,712 4,712 — 1,980 1,980 COMMERCIAL BUSINESS LOANS C&I 415 165 580 2,486 960 3,446 Total $ 4,632 $ 14,113 $ 18,745 $ 5,682 $ 7,919 $ 13,601 The Company recognized interest income on a cash basis for nonaccrual loans of $576,000, $427,000, and $579,000 during the years ended December 31, 2025, 2024 and 2023 , respectively.
Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
Substantially all the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
These indirect home improvement loans include replacement windows, siding, roofing, spas, and other home fixture installations, including solar related home improvement projects. Marine. Loans originated by the Company, secured by boats, to borrowers primarily located in the states where the Company originates consumer loans. Other Consumer.
These indirect home improvement loans include replacement windows, siding, roofing, spas, and other home fixture installations, including solar related home improvement projects. Marine. Loans originated by the Company, secured by boats, to borrowers primarily located in states where the Company originates consumer loans. Other Consumer.
If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan.
If the fair value of collateral is less than the amortized cost basis of the loan, the Company will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan.
Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Unvested share-based awards containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two -class method.
Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Unvested share-based awards containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two -class method.
Loans originated under the guidelines of the Federal Housing Administration (“FHA”), US Department of Veterans Affairs (“VA”), and United States Department of Agriculture (“USDA”) are generally sold servicing released or servicing retained to a correspondent bank or mortgage company. The Company has the option to sell loans on a servicing-released or servicing-retained basis to securitizers and correspondent lenders.
Loans originated under the guidelines of the Federal Housing Administration (“FHA”), US Department of Veterans Affairs (“VA”), and United States Department of Agriculture (“USDA”) are generally sold servicing released to a correspondent bank or mortgage company. The Company has the option to sell loans on a servicing-released or servicing-retained basis to securitizers and correspondent lenders.
The Company does not have any material intra-entity sales or transfers, aside from certain allocations of interest expense and loan servicing cost from the commercial and consumer banking segment to the home lending segment. 124 Table of Contents The Company uses various management accounting methodologies to assign certain income statement items to the responsible operating segment, including: ● a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets; ● a cost per loan serviced allocation based on the number of loans being serviced on the balance sheet and the number of loans serviced for third parties; ● an allocation based upon the approximate square footage utilized by the home lending segment in Company owned locations; ● an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on the number of full-time employees (“FTEs”) in each segment; and ● an allocation of the Company’s consolidated income taxes which are based on the effective tax rate applied to the segment’s pretax income or loss.
The Company does not have any material intra-entity sales or transfers, aside from certain allocations of interest expense and loan servicing cost from the commercial and consumer banking segment to the home lending segment. 122 Table of Contents The Company uses various management accounting methodologies to assign certain income statement items to the responsible operating segment, including: ● a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets; ● a cost per loan serviced allocation based on the number of loans being serviced on the balance sheet and the number of loans serviced for third parties; ● an allocation based upon the approximate square footage utilized by the home lending segment in Company owned locations; ● an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on the number of full-time employees (“FTEs”) in each segment; and ● an allocation of the Company’s consolidated income taxes which are based on the effective tax rate applied to the segment’s pretax income or loss.
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 significantly affected by prevailing economic conditions, as well as government policies and regulations concerning, among other things, monetary and fiscal affairs.
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.
Fixture secured loans for home improvement are originated by the Company through its network of home improvement contractors and dealers and are secured by the personal property installed in, on, or at the borrower’s real property, and may be perfected with a UCC‑2 financing statement filed in the county of the borrower’s residence.
Fixture secured loans for home improvement are originated by the Company through its network of home improvement contractors and dealers. These loans are secured by the personal property installed in, on, or at the borrower’s real property, and may be perfected with a UCC‑2 financing statement filed in the county of the borrower’s residence.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
In addition to deepening relationships with existing customers, the Company intends to broaden its customer base by leveraging the Company’s well-established community involvement. This strategy involves selectively emphasizing products and services tailored to meet the specific banking needs of new customers.
In addition to deepening relationships with existing customers, the Company intends to broaden its customer base by leveraging the Company’s well-established community involvement. The strategy involves selectively emphasizing products and services tailored to meet the specific banking needs of new customers.
The Company has entered into change of control agreements with its executives and key personnel. The change of control agreements, subject to certain requirements, generally remain in effect until canceled by either party upon at least 24 months prior written notice.
The Company has entered into change of control agreements with its executives and select key personnel. The change of control agreements, subject to certain requirements, generally remain in effect until canceled by either party upon at least 24 months prior written notice.
A description of the 10 risk grades is as follows: ● Grades 1 and 2 - These grades include loans to very high-quality borrowers with excellent or desirable business credit. ● Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk. ● Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk. ● Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term. ● Grade 7 - This grade is for “Other Assets Especially Mentioned (OAEM)” or “Special Mention” loans in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected. ● Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected. ● Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable. ● Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off.
A description of the 10 risk grades is as follows: ● Grades 1 and 2 - These grades include loans to very high-quality borrowers with excellent or desirable business credit. ● Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk. ● Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk. ● Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term. 95 Table of Contents ● Grade 7 - This grade is for “Other Assets Especially Mentioned (OAEM)” or “Special Mention” loans in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected. ● Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected. ● Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable. ● Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off.
A description of the Company’s business segments and the products and services that they provide is as follows: Commercial and Consumer Banking Segment The commercial and consumer banking segment provides diversified financial products and services to our commercial and consumer customers through Bank branches, online banking platforms, mobile banking apps, and telephone banking.
A description of the Company’s business segments and the products and services they provide is as follows: Commercial and Consumer Banking Segment The commercial and consumer banking segment provides diversified financial products and services to our commercial and consumer customers through Bank branches, online banking platforms, mobile banking apps, and telephone banking.
Business – How We Are Regulated – Regulation of 1st Security Bank – Dividends” and “Regulation and Supervision of FS Bancorp – Restrictions on Dividends and Stock Repurchases.” Our cash dividend policy is reviewed by management and the Board of Directors.
Business – How We Are Regulated – Regulation of 1st Security Bank – Dividends” and “Regulation and Supervision of FS Bancorp – Restrictions on Dividends and Stock Repurchases.” The cash dividend policy is reviewed by management and the Board of Directors.
Loans originated to non-depository financial institutions and secured by notes originated by the non-depository financial institution. The Company has two distinct warehouse lending divisions: commercial warehouse re-lending secured by notes on construction loans and mortgage warehouse re-lending secured by notes on one -to- four -family loans.
Loans originated to non-depository financial institutions and secured by notes originated by the non-depository financial institution. The Company has two distinct warehouse lending divisions: commercial warehouse re-lending secured by notes on construction loans and mortgage warehouse re-lending secured by notes related to one -to- four -family loans.
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of FS Bancorp, Inc. and subsidiary (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of FS Bancorp, Inc., and subsidiary (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).
The Company’s strategy is to provide innovative products and superior customer service to small businesses, industry and geographic niches, and individuals located in its primary market area.
The Company’s strategy is to provide innovative products and superior customer service to small businesses, industry and geographic niches, and individuals in its primary market area.
The analysis employs various market and actual experience-based assumptions and depicts a static shock. to net interest income through instantaneous and sustained shifts in the yield curve, with adjustments in 100 basis point increments, both up and down by 300 basis points. The results present a projected income statement with minimal exposure to immediate changes in interest rates.
The analysis employs various market and actual experience-based assumptions and depicts a static shock. to net interest income through instantaneous and sustained shifts in the yield curve, with adjustments in 100 basis point increments, both up and down by 300 basis points. The results present a projected income statement with moderate exposure to immediate changes in interest rates.
The ALCO reviews simulation results to determine whether exposure resulting from changes in market interest rates remains within established tolerance levels over a twelve-month horizon, and develops appropriate strategies to manage this exposure. The table illustrates the estimated change in net interest income over the next 12 months, starting from December 31, 2024.
The ALCO reviews simulation results to determine whether exposure resulting from changes in market interest rates remains within established tolerance levels over a twelve-month horizon and develops appropriate strategies to manage this exposure. The table illustrates the estimated change in net interest income over the next 12 months, starting from December 31, 2025.
The Bank was in compliance with the FHLB minimum investment requirement at December 31, 2024 and 2023 . Management evaluates FHLB stock for impairment annually. Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value.
The Bank was in compliance with the FHLB minimum investment requirement at December 31, 2025 and 2024 . Management evaluates FHLB stock for impairment annually. Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Also, in these tables, the effects of a variation in a particular assumption on the fair value of MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance; however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities.
Also, in this table, the effects of a variation in a particular assumption on the fair value of MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance; however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities.
Based on its capital levels at December 31, 2024, the Bank exceeded these requirements as of that date. Consistent with our goals to operate a sound and profitable organization, our policy is for the Bank to maintain a "well capitalized" status under the capital categories of the FDIC.
Based on its capital levels at December 31, 2025, the Bank exceeded these requirements as of that date. Consistent with our goals to operate a sound and profitable organization, our policy is for the Bank to maintain a well capitalized status under the capital categories of the FDIC.
NOTE 21 – BUSINESS SEGMENTS The Company’s reportable segments are determined by the Chief Financial Officer (“CFO”), who is the designated chief operating decision maker or CODM, based upon information provided about the Company's products and services offered, primarily distinguished between commercial and consumer banking and home lending.
NOTE 19 – BUSINESS SEGMENTS The Company’s reportable segments are determined by the Chief Financial Officer (“CFO”), who is the designated chief operating decision maker or CODM, based upon information provided about the Company's products and services offered, primarily distinguished between commercial and consumer banking and home lending.
Also presented is the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread at December 31, 2024. Income and all average balances are monthly average balances. Nonaccrual loans have been included in the table as loans carrying a zero yield.
Also presented is the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread at December 31, 2025. Income and all average balances are monthly average balances. Nonaccrual loans have been included in the table as loans carrying a zero yield.
Financial Statements and Supplementary Data” of this Form 10–K. 64 Table of Contents Comparison of Results of Operations for the Years Ended December 31, 2023 and 2022 See Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10–K for the year ended December 31, 2023 filed with the SEC.
Financial Statements and Supplementary Data” of this Form 10–K. 64 Table of Contents Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023 See Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10–K for the year ended December 31, 2024 filed with the SEC.
The Company’s derivative positions are presented with discussion in “Note 18 – Derivatives.” The Company also sells one -to- four -family loans to the FHLB of Des Moines that require a limited level of recourse if the loans default and exceed a certain loss exposure.
The Company’s derivative positions are presented with discussion in “Note 16 – Derivatives.” The Company also sells one -to- four -family loans to the FHLB of Des Moines that require a limited level of recourse if the loans default and exceed a certain loss exposure.
The Company offers a wide range of products and services that provide diversification of revenue sources and solidify the relationship with the Bank’s customers. The Company focuses on core retail and business deposits, including savings and checking accounts, that lead to long-term customer retention.
The Company offers a wide range of products and services that provide diversification of revenue sources and solidify the relationship with the Bank’s customers. The Company focuses on core retail and business deposits, including savings and checking accounts, to support long-term customer retention.
Legal Proceedings Because of the nature of our activities, the Company is subject to various pending and threatened legal actions, which arise in the ordinary course of business. From time to time, subordination liens may create litigation which requires us to defend our lien rights.
Legal Proceedings Because of the nature of our activities, the Company is subject to various pending and threatened legal actions which arise in the ordinary course of business. From time to time, subordination liens may create litigation which requires the Company to defend its lien rights.
Loans originated by the Company to consumers in our retail branch footprint, including automobiles, recreational vehicles, direct home improvement loans, loans on deposits, and other consumer loans, primarily consisting of personal lines of credit and credit cards. Commercial Business Loans C&I Lending .
Loans originated by the Company to consumers in our retail branch footprint, including automobiles, direct home improvement loans, loans on deposits, and other consumer loans, primarily consisting of personal lines of credit and credit cards. Commercial Business Loans C&I Lending .
The Company tests for hedging effectiveness on a quarterly basis. The accumulated other comprehensive income is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company has not recorded any hedge ineffectiveness since inception.
The Company tests for hedging effectiveness on a quarterly basis. The accumulated other comprehensive income is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company has not recorded any hedge ineffectiveness since the inception of the hedges.
Based on its evaluation, management determined that there was no impairment of FHLB stock for the years ended December 31, 2024, 2023 and 2022 . Loans Held for Sale – The Bank records all mortgage loans held for sale at fair value.
Based on its evaluation, management determined that there was no impairment of FHLB stock for the years ended December 31, 2025, 2024 and 2023 . Loans Held for Sale – The Bank records all mortgage loans held for sale at fair value.
The FHLB borrowings at December 31, 2024 and 2023 , consisted of a warehouse securities credit line (“securities line”), which allows advances with interest rates fixed at the time of borrowing and a warehouse federal funds (“Fed Funds”) advance, which allows daily advances at variable interest rates.
The FHLB borrowings at December 31, 2025 and 2024 , consisted of a warehouse securities credit line (“securities line”), which allows advances with interest rates fixed at the time of borrowing and a warehouse federal funds (“Fed Funds”) advance, which allows daily advances at variable interest rates.
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 our relationships within those markets. The Company's strategic focus involves diversifying revenues, expanding lending channels, and enhancing the banking franchise.
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.
All of the available-for-sale mortgage-backed securities and asset-backed securities in an unrealized loss position are issued or guaranteed by government-sponsored enterprises, and the available-for-sale corporate securities are all investment grade and monitored for rating or outlook changes.
All the municipal bond securities are investment grade. All of the available-for-sale mortgage-backed securities and asset-backed securities in an unrealized loss position are issued or guaranteed by government-sponsored enterprises, and the available-for-sale corporate securities are all investment grade and monitored for rating or outlook changes.
NOTE 10 – EMPLOYEE BENEFITS 401 (k) Plan The Company has a salary deferral 401 (k) Plan covering substantially all of its employees. Employees are eligible to participate in the 401 (k) plan at the date of hire if they are 18 years of age.
NOTE 8 – EMPLOYEE BENEFITS 401 (k) Plan The Company has a salary deferral 401 (k) Plan covering substantially all of its employees. Employees are eligible to participate in the 401 (k) plan at the date of hire if they are 18 years of age.
Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
The Company has recorded a holdback reserve of $2.0 million and $2.1 million to cover loss exposure related to these guarantees for one -to- four -family loans sold into the secondary market at December 31, 2024 and 2023 , respectively, which is included in “Other liabilities” on the Consolidated Balance Sheets.
The Company has recorded a holdback reserve of $1.8 million and $2.0 million to cover loss exposure related to these guarantees for one -to- four -family loans sold into the secondary market at December 31, 2025 and 2024 , respectively, which is included in “Other liabilities” on the Consolidated Balance Sheets.
These derivatives are not speculative and arise from a service provided to clients. 118 Table of Contents Cash Flow Hedges The Company has entered into interest rate swaps to reduce the exposure to variability in interest-related cash outflows attributable to changes in forecasted SOFR based brokered deposits. These derivative instruments are designated as cash flow hedges.
These derivatives are not speculative and arise from a service provided to clients. 116 Table of Contents Cash Flow Hedges The Company has entered into interest rate swaps to reduce its exposure to variability in interest-related cash outflows attributable to changes in forecasted SOFR based brokered deposits. These derivative instruments are designated as cash flow hedges.
Goodwill totaled $3.6 million at both December 31, 2024 , and December 31, 2023 , and represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in the Branch Purchase on February 24, 2023, and the purchase of four retail bank branches from Bank of America on January 22, 2016.
Goodwill totaled $3.6 million at both December 31, 2025 , and December 31, 2024 , and represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in the Branch Purchase on February 24, 2023 ( “Branch Acquisition”), and the purchase of four retail bank branches from Bank of America on January 22, 2016.
For additional information regarding regulatory capital compliance, see the discussion included in “Note 15 – Regulatory Capital” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10–K.
For additional information regarding regulatory capital compliance, see the discussion included in “Note 13 – Regulatory Capital” of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10–K.
At December 31, 2024 , the Company’s retail deposit branch network consisted of 27 branches in the Pacific Northwest. This segment is also responsible for the management of the investment portfolio and other assets of the Bank.
At December 31, 2025 , the Company’s retail deposit branch network consisted of 27 branches in the Pacific Northwest. This segment is also responsible for the management of the investment portfolio and other assets of the Bank.
Comprehensive Income (Loss) – Comprehensive income (loss) is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized holding gains and losses on securities available-for-sale, net of tax and unrealized holding gains (losses) on derivatives designated as hedges, net of tax recorded directly to equity.
Comprehensive Income (Loss) – Comprehensive income (loss) is comprised of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized holding gains and losses on securities available-for-sale, net of tax and unrealized holding gains (losses) on derivatives designated as cash flow hedges, net of tax recorded directly to equity.
Overview 1st Security Bank has been serving the Puget Sound area since 1907, which includes when 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.
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.
A small percentage of its loans are brokered to other lenders. On occasion, the Company may sell a portion of its MSR portfolio and may sell small pools of loans initially originated to be held in the loan portfolio.
A small percentage of its loans are brokered to other lenders. On occasion, the Company may sell a portion of its MSRs portfolio and may sell small pools of loans initially originated to be held in the loan portfolio.
We believe that our audits provide a reasonable basis for our opinions. 70 Table of Contents Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
The hedged item is the SOFR portion of the series of future adjustable-rate borrowings and deposits over the term of the interest rate swap. Accordingly, changes to the amount of interest payment cash flows for the hedged transactions attributable to a change in credit risk are excluded from management’s assessment of hedge effectiveness.
The hedged item is the SOFR portion of a series of future adjustable-rate borrowings and deposits over the term of the interest rate swap. Accordingly, changes in the amount of interest payment cash flows for the hedged transactions attributable to changes in the Company's own credit risk are excluded from management’s assessment of hedge effectiveness.
There was no goodwill impairment for the years ended December 31, 2024, 2023 and 2022 . Bank Owned Life Insurance – The Bank has purchased life insurance policies on certain key executives.
There was no goodwill impairment for the years ended December 31, 2025, 2024 and 2023 . Bank Owned Life Insurance – The Bank has purchased life insurance policies on certain key executives.
There are no conditions or events since that notification that management believes have changed the Bank’s category. Management believes, at December 31, 2024 , that the Bank met all capital adequacy requirements.
There are no conditions or events since that notification that management believes have changed the Bank’s category. Management believes, at December 31, 2025 , that the Bank met all capital adequacy requirements.
The remaining branch offices and the seven stand-alone loan production offices are leased facilities. The lease terms for our branch and loan production offices are not individually material. The Company’s leases have remaining lease terms of 3 months to 5.5 years, some of which include options to extend the leases for up to five years.
The remaining branch offices and the seven stand-alone loan production offices are leased facilities. The lease terms for our branch and loan production offices are not individually material. The Company’s leases have remaining lease terms of 3 months to 9.6 years, some of which include options to extend the leases for up to five years.
As of December 31, 2024 , management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.
As of December 31, 2025 , management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.
A further decline in national and local economic conditions, as a result of the effects of inflation, a recession or slowed economic growth, among other factors, could result in a material increase in the ACL on loans and may adversely affect the Company’s financial condition and result of operations.
A decline in national and local economic conditions, as a result of the effects of tariffs, inflation, or slowed economic growth, among other factors, could result in a material increase in the ACL on loans and may adversely affect the Company’s financial condition and result of operations.
Interest Rate Risk. The table presented below, as of December 31, 2024, is an analysis prepared for the Company by a third-party consultant.
Interest Rate Risk. The table presented below, as of December 31, 2025, is an analysis prepared for the Company by a third-party consultant.
We identified management’s risk-grade grouping of loans, and the qualitative and environmental adjustments, which are used in the calculation of the allowance for credit losses on loans, as a critical audit matter. The qualitative and environmental adjustments are used to estimate factors that are not captured in the modeled expected losses.
We identified management’s qualitative and environmental adjustments, which are used in the calculation of the allowance for credit losses on loans, as a critical audit matter. The qualitative and environmental adjustments are used to estimate factors that are not captured in the modeled expected losses.
Apartment term lending ( five or more units) to current banking customers and community reinvestment loans for low to moderate income individuals in the Company’s footprint. CRE Lending. Loans originated by the Company primarily secured by income-producing properties, including retail centers, warehouses, and office buildings located in our market areas. Construction and Development Lending .
Apartment term lending ( five or more units) to current banking customers and community reinvestment loans for low- to moderate-income borrowers in the Company’s footprint. CRE Lending. Loans originated by the Company primarily secured by income-producing properties, including retail centers, warehouses, and office buildings located in our market areas. Commercial and Speculative Construction and Development Lending .
Sources of funds for lending activities include primarily deposits, including brokered deposits, borrowings, payments on loans, and income provided from operations. The Company’s earnings are primarily dependent upon net interest income, the difference between interest income and interest expense.
Sources of funds for lending activities include primarily deposits, including brokered deposits, borrowings, payments on loans, and income provided from operations. 53 Table of Contents The Company’s earnings are primarily dependent upon net interest income, the difference between interest income and interest expense.
Segment assets are primarily allocated by loan origination channel. The home lending segment is limited to residential mortgage and home equity loans originated through the home lending platform. The home lending segment additionally includes related accrued interest receivable and the Company's MSR assets.
Segment assets are primarily allocated based on loan origination channel. The home lending segment is limited to residential mortgage and home equity loans originated through the home lending platform. The home lending segment additionally includes related accrued interest receivable and the Company's MSR assets.
Management actively addresses delinquent loans and nonperforming assets by pursuing aggressive collection efforts for consumer debts, marketing saleable foreclosed or repossessed properties, working on classified assets' resolutions and implementing loan charge-offs. In recent years, the Company focused on originating consumer loans for borrowers with higher credit scores, generally, over 720 while maintaining flexibility with its policy.
Management actively addresses delinquent loans and nonperforming assets by pursuing aggressive collection efforts for consumer debts, marketing saleable foreclosed or repossessed properties, resolving classified assets, and implementing loan charge-offs. In recent years, the Company focused on originating consumer loans for borrowers with higher credit scores, generally over 720, while maintaining flexibility in its lending policy.
We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly. 98 Table of Contents The following tables summarize risk rated loan balances and total current period gross charge-offs by category as of December 31, 2024 and 2023 .
We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly. 96 Table of Contents The following tables summarize risk rated loan balances and total current period gross charge-offs by category as of December 31, 2025 and 2024 .
This method uses the vesting term of an option along with the contractual term, setting the expected life at 5.5 years for one -year vesting, 5.75 years for two -year vesting, and 6.5 years for five -year vesting. The following table presents a summary of the Company’s stock option awards during the years indicated (shown as actual).
This method uses the vesting term of an option along with the contractual term, setting the expected life at 5.5 years for one -year vesting, 6.25 years for four -year vesting, and 6.5 years for five -year vesting. The following table presents a summary of the Company’s stock option awards during the years indicated (shown as actual).
The Company's earnings are also affected by fee income from mortgage banking activities, the provision for (recovery of) credit losses, service charges and fees, gains from sales of assets, operating expenses and income taxes. 54 Table of Contents Critical Accounting Estimates We prepare our consolidated financial statements in accordance with GAAP. In doing so, we must make estimates and assumptions.
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.
Services are currently provided to communities through the main office, 27 full-service bank branches and 13 loan production offices (seven of which are stand-alone), which are supported with 24/7 access to on-line banking and participation in a worldwide ATM network. The Company focuses on diversifying revenues, expanding lending channels, and growing the banking franchise.
Services are provided to communities through the main office, 27 full-service bank branches and 13 loan production offices (seven of which are stand-alone), supported by 24/7 access to online banking and participation in a worldwide ATM network. The Company focuses on diversifying revenues, expanding lending channels, and growing the banking franchise.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Based on the Company’s evaluation of these securities, no credit impairment was recorded for the years ended December 31, 2024, 2023 and 2022 . 91 Table of Contents The contractual maturities of securities available-for-sale and held-to-maturity at the dates indicated are listed below.
Based on the Company’s evaluation of these securities, no credit impairment was recorded for the years ended December 31, 2025, 2024 and 2023 . 88 Table of Contents The contractual maturities of securities available-for-sale and held-to-maturity at the dates indicated are listed below.
The Company’s commercial construction warehouse lines are secured by notes on construction loans and typically guaranteed by principals with experience in construction lending. Mortgage warehouse lending loans are funded through third -party residential mortgage bankers.
The Company’s commercial construction warehouse lines are secured by notes related to construction loans and typically guaranteed by principals with experience in construction lending. Mortgage warehouse lines are funded through third -party residential mortgage bankers.
Our future payment of dividends may depend, in part, upon receipt of dividends from the Bank, which are restricted by federal regulations. Management’s projections show an expectation that cash dividends will continue for the foreseeable future. Issuer Purchases of Equity Securities.
The future payment of dividends may depend, in part, upon receipt of dividends from the Bank, which are restricted by federal regulations. Management’s projections show an expectation that cash dividends will continue for the foreseeable future. 50 Table of Contents Issuer Purchases of Equity Securities.
(2) Includes net deferred fee recognition of $4.9 million, and $6.0 million for the years ended December 31, 2024 and 2023, respectively. (3) Shown at amortized cost. (4) Includes income from fair value hedges of $1.6 million, and $1.5 million for the years ended December 31, 2024 and 2023, respectively. Interest Expense .
(2) Includes net deferred fee recognition of $5.8 million, and $4.9 million for the years ended December 31, 2025 and 2024, respectively. (3) Shown at amortized cost. (4) Includes income from fair value hedges of $1.1 million, and $1.6 million for the years ended December 31, 2025 and 2024, respectively. Interest Expense .
The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET 1 capital ratios as set forth in the table below to be categorized as "well capitalized". At December 31, 2024 , the Bank was categorized as “well capitalized” under applicable regulatory requirements.
The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET 1 capital ratios as set forth in the table below to be categorized as “well capitalized”. At December 31, 2025 , the Bank was categorized as “well capitalized” under applicable regulatory requirements.
While these agreements are typically over-collateralized, GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related asset or liability for each counterparty.
While these agreements are typically over-collateralized, GAAP requires disclosures in these tables to limit the amount of such collateral to the amount of the related asset or liability for each counterparty.
C&I loans originated by the Company to local small- and mid-sized businesses in our market area are secured primarily by accounts receivable, inventory, or personal property, plant and equipment. Some C&I loans purchased by the Company are outside of the greater Puget Sound market area.
C&I loans originated by the Company to local small- and mid-sized businesses in our market area are secured primarily by accounts receivable, inventory, and personal property, plant and equipment. Some C&I loans purchased by the Company are outside of our market area.
The Bank entered into an Advances, Pledges and Security Agreement with the FHLB for which specific loans are pledged to secure these credit lines. At December 31, 2024 , loans of approximately $1.11 billion were pledged to the FHLB.
The Bank entered into an Advances, Pledges and Security Agreement with the FHLB for which specific loans are pledged to secure these credit lines. At December 31, 2025 , loans of approximately $1.08 billion were pledged to the FHLB.
For information regarding our operating leases and borrowings, see “Note 7 – Leases” and “Note 11 – Debt”, respectively, of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10–K.
For information regarding our operating leases and borrowings, see “Note 6 – Leases” and “Note 9 – Debt”, respectively, of the Notes to Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Form 10–K.
We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Federal income tax return and Oregon, Idaho, and Arizona state income tax returns, which are subject to examination by tax authorities for years 2021 and later. At December 31, 2024 and 2023 , the Company had no uncertain tax positions.
Federal income tax return and Oregon, Idaho, and Arizona state income tax returns, which are subject to examination by tax authorities for years 2022 and later. At December 31, 2025 and 2024 , the Company had no uncertain tax positions.
The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and the Federal Reserve expects the holding company’s subsidiary bank to be "well capitalized" under the prompt corrective action regulations.
The Federal Reserve has a policy requiring a bank holding company to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and the Federal Reserve expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
How We Addressed the Matter in Our Audit Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
AND SUBSIDIARY INDEX TO FINANCIAL STATEMENTS Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (Moss Adams LLP, Everett, Washington, PCAOB ID 659) 70 Consolidated Balance Sheets 72 Consolidated Statements of Income 73 Consolidated Statements of Comprehensive Income 74 Consolidated Statements of Changes in Stockholders’ Equity 75 Consolidated Statements of Cash Flows 77 Notes to Consolidated Financial Statements 79 69 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of FS Bancorp, Inc.
AND SUBSIDIARY INDEX TO FINANCIAL STATEMENTS Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (Baker Tilly US, LLP, Everett, Washington, (PCAOB ID 23) 70 Consolidated Balance Sheets 72 Consolidated Statements of Income 73 Consolidated Statements of Comprehensive Income 74 Consolidated Statements of Changes in Stockholders’ Equity 75 Consolidated Statements of Cash Flows 77 Notes to Consolidated Financial Statements 79 69 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of FS Bancorp, Inc.
Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, and income-producing commercial properties. Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers.
Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, and income-producing commercial properties. Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements represent potential future extensions of credit to existing customers.
Historical employment data is used to estimate the forfeiture rate. The historical volatility of the Company's stock price over a specified period of time is used for the expected volatility. The Company bases the risk-free interest rate on the comparable U.S. Treasury rate for the discount rate associated with the stock in effect on the date of the grant.
The historical volatility of the Company's stock price over a specified period of time is used for the expected volatility. The Company bases the risk-free interest rate on the comparable U.S. Treasury rate for the discount rate associated with the stock in effect on the date of the grant.
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Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
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Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
1 edited+0 added−0 removed0 unchanged
2024 filing
2025 filing
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations 53 Overview 53 Critical Accounting Policies and Estimates 55 Our Business and Operating Strategy and Goals 57 Comparison of Financial Condition at December 31, 2024 and December 31, 2023 57 Average Balances, Interest and Average Yields/Costs 60 Rate/Volume Analysis 61 Comparison of Results of Operations for the Years Ended December 31, 2024 and December 31, 2023 61 Asset and Liability Management and Market Risk 65 Recent Accounting Pronouncements 69
Biggest changeManagement’s Discussion and Analysis of Financial Condition and Results of Operations 52 Overview 52 Critical Accounting Policies and Estimates 54 Our Business and Operating Strategy and Goals 56 Comparison of Financial Condition at December 31, 2025 and December 31, 2024 56 Average Balances, Interest and Average Yields/Costs 60 Rate/Volume Analysis 61 Comparison of Results of Operations for the Years Ended December 31, 2025 and December 31, 2024 61 Asset and Liability Management and Market Risk 65 Recent Accounting Pronouncements 69