FS Bancorp (FSBW) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $10.3 million ($1.29 per diluted share), up from $9.0 million ($1.13) in Q3 2023, driven by lower tax expense and higher noninterest income, partially offset by increased noninterest expense and provision for credit losses.

• Total assets reached $2.97 billion as of September 30, 2024, up 1.0% sequentially and 1.7% year-over-year, with shifts from securities and cash to loans and other assets.

• Deposit growth of $44.5 million (1.9%) in Q3 2024, driven by increases in noninterest-bearing checking and CDs.

• The company continues to focus on diversified lending, strong asset quality, and expanding its footprint in the Pacific Northwest and Western U.S.

• Forty-seventh consecutive quarterly cash dividend of $0.27 per share approved, payable November 21, 2024.

Financial highlights

• Net interest income for Q3 2024 was $31.2 million, up $610,000 year-over-year, as higher interest income outpaced increased interest expense.

• Net interest margin for Q3 2024 was 4.35%, up from 4.29% in the prior quarter and 4.34% a year ago.

• Provision for credit losses rose to $1.5 million in Q3 2024, reflecting higher net charge-offs, especially in indirect home improvement and marine loans.

• Noninterest income increased $1.0 million to $6.0 million, mainly from higher gains on loan sales and MSR transactions.

• Noninterest expense increased $2.2 million to $25.8 million, driven by higher salaries, professional fees, and nonrecurring consulting charges.

Outlook and guidance

• Management expects continued focus on core deposit growth, disciplined lending, and maintaining strong capital and liquidity positions.

• Strategic planning continues to prioritize deposit growth and operational efficiency.

• The company projects ongoing investment in home lending and expects to maintain quarterly dividends, subject to board discretion.