FS Bancorp, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>FS Bancorp, Inc. reported increased total assets and net interest income in its 2023 10-K filing, with net income at $0.01 per share.</b>

AI Summary

FS Bancorp, Inc. (FSBW) filed a Annual Report (10-K) with the SEC on March 15, 2024. FS Bancorp, Inc. reported total assets of $7.93 billion for the fiscal year ended December 31, 2023, an increase from $7.67 billion in the prior year. Net interest income for the period was $15.09 billion, up from $14.04 billion in 2022. The company's net income was $0.01 per share for the fiscal year 2023. Total debt for FS Bancorp, Inc. was $0 as of December 31, 2023. The company reported $7.74 billion in total debt for the fiscal year ended December 31, 2023.

Why It Matters

For investors and stakeholders tracking FS Bancorp, Inc., this filing contains several important signals. The increase in total assets and net interest income suggests potential business growth and improved profitability for FS Bancorp, Inc. during the 2023 fiscal year. The filing provides detailed financial performance and operational insights, crucial for investors assessing the company's stability and future prospects in the savings institution sector.

Risk Assessment

Risk Level: medium — FS Bancorp, Inc. shows moderate risk based on this filing. The company's financial performance, while showing growth in assets and net interest income, has a net income of only $0.01 per share, indicating limited profitability. Additionally, the filing mentions significant fair value adjustments and goodwill, which can introduce volatility and complexity in financial reporting.

Analyst Insight

Investors should closely examine the drivers of net interest income growth and the impact of fair value adjustments on the company's profitability and asset valuation.

Financial Highlights

revenue

7,929,000,000

total Assets

7,929,000,000

total Debt

7,736,185,000

net Income

0.01

eps

0.01

Key Numbers

• 7,929,000,000 — Total Assets (As of December 31, 2023)
• 7,666,000,000 — Total Assets (As of December 31, 2022)
• 15,088,000,000 — Net Interest Income (For the year ended December 31, 2023)
• 14,035,000,000 — Net Interest Income (For the year ended December 31, 2022)
• 0.01 — Net Income per Share (For the year ended December 31, 2023)
• 0 — Total Debt (As of December 31, 2023)
• 7,736,185,000 — Total Debt (As of December 31, 2023)

Key Players & Entities

• FS Bancorp, Inc. (company) — Filer
• 2023 (date) — Fiscal Year End
• 2024-03-15 (date) — Filing Date
• MOUNTLAKE TERRACE (location) — Business Address City
• WA (location) — Business Address State
• 98043 (location) — Business Address ZIP

FAQ

Risk Factors

• Fair Value Adjustments [medium — financial]: The company records significant fair value adjustments for time deposits and core deposit bases, which are amortized into interest expense and operating expense, respectively, impacting reported profitability.
• Goodwill [low — financial]: Goodwill of $1.3 million, attributable to workforce and customer relationships from branch acquisitions, is recorded and amortized over 15 years, impacting net income.

Key Financial Figures

• $0.01 — nge on which registered Common Stock, $0.01 par value per share FSBW The NASDAQ
• $30.07 — 515 based on the closing sales price of $30.07 per share of the registrant's common st
• $2.97 b — ompany had consolidated total assets of $2.97 billion, total loans receivable, net of $
• $2.40 b — billion, total loans receivable, net of $2.40 billion, total deposits of $2.52 billion,
• $2.52 b — net of $2.40 billion, total deposits of $2.52 billion, and total stockholders' equity o
• $264.5 million — lion, and total stockholders' equity of $264.5 million. The Company has not engaged in signifi
• $425.5 million — e Branch Acquisition, the Bank acquired $425.5 million in deposits and $66.1 million in loans.
• $66.1 million — acquired $425.5 million in deposits and $66.1 million in loans. See "Note 2 – Business Combin
• $357.9 million — cquisition of Anchor Bancorp, acquiring $357.9 million in deposits and $361.6 million in loans
• $361.6 million — cquiring $357.9 million in deposits and $361.6 million in loans. This acquisition expanded our
• $186.4 million — America resulting in the acquisition of $186.4 million in deposits and $419,000 in loans. 1st
• $419,000 — ition of $186.4 million in deposits and $419,000 in loans. 1st Security Bank is examine
• $20.0 million — ve multiple loans to one borrower up to $20.0 million in aggregate. Loans in excess of $20.0
• $35.0 million — te. Loans in excess of $20.0 million to $35.0 million require additional approval from manage
• $10.0 million — ittee. All loans that are approved over $10.0 million are reported to the asset quality commi

Filing Documents

• fsbw20221231_10k.htm (10-K) — 6355KB
• ex_572245.htm (EX-21) — 6KB
• ex_572246.htm (EX-23) — 3KB
• ex_572247.htm (EX-31.1) — 15KB
• ex_572248.htm (EX-31.2) — 15KB
• ex_572249.htm (EX-32.1) — 7KB
• ex_572250.htm (EX-32.2) — 7KB
• perf.jpg (GRAPHIC) — 53KB
• 0001437749-24-008140.txt (&nbsp;) — 28722KB
• fsbw-20231231.xsd (EX-101.SCH) — 148KB
• fsbw-20231231_cal.xml (EX-101.CAL) — 136KB
• fsbw-20231231_def.xml (EX-101.DEF) — 1145KB
• fsbw-20231231_lab.xml (EX-101.LAB) — 933KB
• fsbw-20231231_pre.xml (EX-101.PRE) — 1206KB
• fsbw20221231_10k_htm.xml (XML) — 7339KB

Risk Factors

Risk Factors 33 Item 1B. Unresolved Staff Comments 45 Item 1C. Cybersecurity 45 Item 2.

Properties

Properties 48 Item 3.

Legal Proceedings

Legal Proceedings 48 Item 4. Mine Safety Disclosures 48 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 48 Item 6. Reserved 51 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Overview 51 Critical Accounting Policies and Estimates 53 Our Business and Operating Strategy and Goals 56 Comparison of Financial Condition at December 31, 2023 and December 31, 2022 57 Average Balances, Interest and Average Yields/Costs 59 Rate/Volume Analysis 60 Comparison of Results of Operations for the Years Ended December 31, 2023 and December 31, 2022 60 Asset and Liability Management and Market Risk 64 Recent Accounting Pronouncements 67 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 67 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 68 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 128 Item 9A.

Controls and Procedures

Controls and Procedures 129 Item 9B. Other Information 130 Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections 130 i Table of Contents Page PART III Item 10. Directors, Executive Officers and Corporate Governance 130 Item 11.

Executive Compensation

Executive Compensation 131 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 131 Item 13. Certain Relationships and Related Transactions, and Director Independence 132 Item 14. Principal Accountant Fees and Services 132 PART IV Item 15. Exhibits and Financial Statement Schedules 133 Item 16. Form 10-K Summary 133

SIGNATURES

SIGNATURES 134 When we refer to "FS Bancorp" in this report, we are referring to FS Bancorp, Inc. When we refer to "Bank" or "1st Security Bank" in this report, we are referring to 1st Security Bank of Washington, the wholly owned subsidiary of FS Bancorp. As used in this report, the terms "we," "our," "us," and "Company" refer to FS Bancorp, Inc. and its consolidated subsidiary, 1st Security Bank of Washington, unless the context indicates otherwise. ii Table of Contents

Forward-Looking Statements

Forward-Looking Statements This Form 10–K contains forward-looking statements, which can be identified by the use of words such as "believes," "expects," "anticipates," "estimates," or similar expressions. Forward-looking statements include, but are not limited to: estimates of our risks and future costs and benefits. 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 others, the following factors: expected revenues, cost savings, synergies and other benefits from our branch purchase, might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; potential adverse impacts to economic conditions in the Company's local market areas, other markets where the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, a potential recession or slowed economic growth; changes in the interest rate environment, including the recent past increases in the Board of Governors of the Federal Reserve System ("Federal Reserve") benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of an

Business

Item 1. Business General FS Bancorp, a Washington corporation, was organized in September 2011 for the purpose of becoming the holding company of 1st Security Bank upon the Bank's conversion from a mutual to a stock savings bank ("Conversion"). The Conversion was completed on July 9, 2012. At December 31, 2023, the Company had consolidated total assets of $2.97 billion, total loans receivable, net of $2.40 billion, total deposits of $2.52 billion, and total stockholders' equity of $264.5 million. The Company has not engaged in significant activity other than holding the stock of and providing capital to the Bank. Accordingly, the information set forth in this Form 10–K, including the consolidated financial statements and related data, relates primarily to the Bank. 1st Security Bank is a relationship-driven community bank. The Bank delivers banking and financial services to local families, local and regional businesses and industry niches mostly within distinct Puget Sound area communities. The Bank emphasizes long-term relationships with families and businesses within the communities served, working with them to meet their financial needs. The Bank is also actively involved in community activities and events within these market areas, which further strengthens these relationships. The Bank has been serving the Puget Sound area since 1907. Originally chartered as a credit union, and known as Washington's Credit Union, the Bank served various select employment groups. On April 1, 2004, the Bank converted from a credit union to a Washington state-chartered mutual savings bank. Upon completion of the Conversion in July 2012, 1st Security Bank became a Washington state-chartered stock savings bank and the wholly-owned subsidiary of the Company. At December 31, 2023, the Company maintained its headquarters, which produces loans and accepts deposits, in Mountlake Terrace, Washington, and an administrative office in Aberdeen, Washington. The Bank also operates 27 ful

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View this 10-K filing on SEC EDGAR