EL7.AI
StocksMedium•21 October 2026•
2 min read

FS Bancorp profit falls to $4.9 million on merger costs, home lending losses

Key Facts

1Third-quarter net income totaled $4.9 million, or $0.63 per diluted share.
2The company incurred $2.5 million in merger expenses during the quarter.
3The home lending segment posted a net loss of $806,000, which the company attributed to higher interest rates.
4The company approved a quarterly cash dividend of $0.29 per common share.

FS Bancorp's net income fell to $4.9 million in the third quarter of 2026, according to its October 21 statement, as it incurred merger expenses and losses in its home lending business. Diluted earnings per share were $0.63 for the period. The company reported second-quarter profit of $7.9 million, or $1.04 per diluted share, according to its filing with the U.S. Securities and Exchange Commission. Earnings were also below the third quarter of 2025, when they totaled $9.2 million, or $1.18 per diluted share. The home lending segment posted a net loss of $806,000 in the third quarter of 2026, which the company attributed to higher interest rates.

The results followed the completion of the acquisition of Pacific West Bancorp and its subsidiary bank at the close of business on August 19, 2026, according to FS Bancorp's statement. The acquisition consideration included 430,176 shares of the company's common stock, according to the transaction filing with the U.S. Securities and Exchange Commission. The consideration also included $16,832,742 in cash. The company incurred merger expenses of $2.5 million during the quarter, according to the earnings statement. It also recorded a preliminary non-taxable bargain purchase gain of $1.7 million, as the net assets acquired exceeded the consideration paid.

On the balance sheet, deposits rose to $2.87 billion at the end of the third quarter, according to the company's statement. FS Bancorp attributed the increase primarily to the Pacific West acquisition. Net loans rose to $3.01 billion at the end of the same period. The company said the acquisition and lending growth supported the increase in net loans. The net interest margin for the quarter was 4.36% on an annualized basis.

The board approved its 55th consecutive quarterly cash dividend, according to the earnings announcement. The company set the dividend at $0.29 per common share. It had announced on August 24, 2026, that the board had authorized a program to repurchase up to $5.0 million of its common stock, according to its filing with the U.S. Securities and Exchange Commission. The program runs for 12 months through August 24, 2027. The company said in the program announcement: "The repurchase program does not obligate the company to purchase any specific number of shares." The quarterly cash dividend will be payable to shareholders of record on November 6, 2026. Payment is scheduled for November 20, 2026.