On July 23, 2024, FS Bancorp Inc (FSBW, Financial) released its 8-K filing for the second quarter of 2024, reporting a net income of $9.0 million, or $1.13 per diluted share. This performance exceeded the analyst estimate of $1.02 per share. The company also reported a 3.8% increase in its quarterly dividend and announced a share repurchase plan.
Company Overview
FS Bancorp Inc is the holding company of 1st Security Bank, a diversified lender with a focus on the origination of commercial real estate, one-to-four-family, and home equity loans, consumer loans, including a variety of indirect home improvement (fixture secured loans), and marine loans, and commercial business loans. The company operates through two segments: Commercial and Consumer Banking, and Home Lending.
Performance and Challenges
FS Bancorp Inc (FSBW, Financial) reported a net income of $9.0 million for Q2 2024, slightly down from $9.1 million in Q2 2023. For the six months ended June 30, 2024, net income was $17.4 million, compared to $17.3 million for the same period in 2023. The company faced challenges such as increased interest expenses on deposits and borrowings, which impacted net interest income.
Financial Achievements
Despite the challenges, FS Bancorp Inc (FSBW, Financial) achieved significant milestones. The company reported a 3.8% increase in its quarterly dividend to $0.27 per common share and expanded its share repurchase plan. These actions demonstrate the company's commitment to enhancing shareholder value.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Interest Income | $30.4 million | $31.6 million |
| Noninterest Income | $5.9 million | $4.8 million |
| Noninterest Expense | $23.9 million | $24.2 million |
| Net Income | $9.0 million | $9.1 million |
Balance Sheet and Cash Flow
Total assets decreased by $28.3 million to $2.94 billion at June 30, 2024, compared to March 31, 2024. Loans receivable, net increased by $41.8 million to $2.46 billion. The company reported a decrease in total cash and cash equivalents by $12.4 million. Total stockholders’ equity increased by $6.1 million to $284.0 million at June 30, 2024.
Key Metrics
FS Bancorp Inc (FSBW, Financial) reported a net interest margin (NIM) of 4.29% for Q2 2024, down from 4.66% in Q2 2023. The average total cost of funds increased to 2.38% from 1.48% in the same period last year. The allowance for credit losses on loans was $31.2 million, or 1.26% of gross loans receivable at June 30, 2024.
Commentary
“I am pleased with our financial results for the second quarter, and I am excited about Matthew D. Mullet's recent well-deserved promotion to Bank President,” stated Joe Adams, CEO. “Matthew will make a great president and we are both thankful to our Board of Directors for increasing our forty-sixth consecutive quarterly cash dividend by $0.01 to $0.27 per common share and expanding our share repurchase plan, demonstrating our continued commitment to enhancing shareholder value.”
Analysis
FS Bancorp Inc (FSBW, Financial) has demonstrated resilience in a challenging economic environment. The company's ability to exceed analyst estimates and increase shareholder returns through dividends and share repurchases is a positive indicator for value investors. However, the increase in interest expenses and the slight decline in net interest income are areas to monitor closely.
Overall, FS Bancorp Inc (FSBW, Financial) continues to show strong financial health and a commitment to shareholder value, making it a noteworthy consideration for investors in the banking sector.
Explore the complete 8-K earnings release (here) from FS Bancorp Inc for further details.
