NasdaqCM:FSBW

Stock Analysis Report

Executive Summary

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches.

Rewards

Trading at 49.1% below its fair value

Earnings are forecast to grow 8.19% per year

Risk Analysis

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet and good value.

Share Price & News

How has FS Bancorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FSBW has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.2%

FSBW

-2.7%

US Mortgage

0.5%

US Market


1 Year Return

-1.6%

FSBW

5.1%

US Mortgage

20.3%

US Market

Return vs Industry: FSBW underperformed the US Mortgage industry which returned 5.1% over the past year.

Return vs Market: FSBW underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

FSBWIndustryMarket
7 Day0.2%-2.7%0.5%
30 Day-16.9%-2.2%2.0%
90 Day-11.5%-2.5%9.4%
1 Year-0.3%-1.6%7.5%5.1%22.8%20.3%
3 Year44.0%39.3%17.8%9.5%50.1%40.4%
5 Year186.2%169.9%57.3%40.1%73.1%54.1%

Price Volatility Vs. Market

How volatile is FS Bancorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is FS Bancorp undervalued compared to its fair value and its price relative to the market?

48.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FSBW ($51.53) is trading below our estimate of fair value ($101.31)

Significantly Below Fair Value: FSBW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FSBW is good value based on its PE Ratio (10x) compared to the Mortgage industry average (13.7x).

PE vs Market: FSBW is good value based on its PE Ratio (10x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: FSBW is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: FSBW is overvalued based on its PB Ratio (1.1x) compared to the US Mortgage industry average (1.1x).


Next Steps

Future Growth

How is FS Bancorp forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FSBW's forecast earnings growth (8.2% per year) is above the savings rate (1.7%).

Earnings vs Market: FSBW's earnings (8.2% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: FSBW's earnings are forecast to grow, but not significantly.

Revenue vs Market: FSBW's revenue (4.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: FSBW's revenue (4.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FSBW's Return on Equity is forecast to be low in 3 years time (10.9%).


Next Steps

Past Performance

How has FS Bancorp performed over the past 5 years?

30.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FSBW has high quality earnings.

Growing Profit Margin: FSBW's current net profit margins (25.1%) are lower than last year (34.7%).


Past Earnings Growth Analysis

Earnings Trend: FSBW's earnings have grown significantly by 30.5% per year over the past 5 years.

Accelerating Growth: FSBW's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FSBW had negative earnings growth (-6.7%) over the past year, making it difficult to compare to the Mortgage industry average (11.3%).


Return on Equity

High ROE: FSBW's Return on Equity (11.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is FS Bancorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: FSBW has a low level of unsold assets or inventory.

Debt Coverage by Assets: FSBW's debt is covered by short term assets (assets are 1.5x debt).


Financial Institutions Analysis

Asset Level: FSBW's level of assets compared to its equity is low.

Allowance for Bad Loans: FSBW has a sufficient allowance for bad loans.

Low Risk Liabilities: FSBW's liabilities are made up of primarily low risk sources of funding.

Loan Level: FSBW has an acceptable proportion of non-loan assets held.

Low Risk Deposits: FSBW's loans are broadly funded by customer deposits.

Level of Bad Loans: FSBW has an appropriate level of bad loans (0.22%)


Next Steps

Dividend

What is FS Bancorp's current dividend yield, its reliability and sustainability?

1.61%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: FSBW's dividend (1.63%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: FSBW's dividend (1.63%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, FSBW has been paying a dividend for less than 10 years.

Growing Dividend: FSBW's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12.7%), FSBW's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FSBW's dividends in 3 years are forecast to be thoroughly covered by earnings (14.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.4yrs

Average management tenure


CEO

Joe Adams (60yo)

8.4yrs

Tenure

US$1,622,639

Compensation

Mr. Joseph C. Adams, also known as Joe, has been the Chief Executive Officer of FS Bancorp, Inc. (Former Name: 1st Security Bancorp, Inc) since September 2011. Mr. Adams has been the Chief Executive Office ...


CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD1.62M) is above average for companies of similar size in the US market ($USD1.11M).

Compensation vs Earnings: Joe's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Joseph Adams
CEO & Director8.4yrsUS$1.62m0.82% $1.9m
Matthew Mullet
CFO, Treasurer & Secretary8.4yrsUS$1.02m0.96% $2.2m
Shana Allen
Senior VP of Technology & Ops and Chief Information Officer of 1St Security Bank of Washington0yrsno datano data
May-Ling Sowell
SVP & Compliance Officer0yrsno datano data
Deanne Goff
Senior VP of Retail Banking - 1st Security Bank of Washington0yrsno datano data
Robert Fuller
Chief Credit Officer6.4yrsno data0.29% $657.5k
Jill Coates
Senior VP of Home Lending Credit0yrsno datano data
Paul Taylor
Senior VP of Home Lending Operations0yrsno datano data
Kathrine Shairrick
Senior Vice President of Service & Operations - 1st Security Bank of Washington0yrsno datano data

8.4yrs

Average Tenure

59yo

Average Age

Experienced Management: FSBW's management team is seasoned and experienced (8.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joseph Adams
CEO & Director8.4yrsUS$1.62m0.82% $1.9m
Joseph Zavaglia
Independent Director8.4yrsUS$141.53k0.18% $412.5k
Ted Leech
Chairman of the Board8.4yrsUS$157.81k0.64% $1.4m
Margaret Piesik
Independent Director14.1yrsUS$147.00k0.19% $441.3k
Michael Mansfield
Independent Director12.1yrsUS$144.27k1.02% $2.3m
Mark Tueffers
Independent Director3.8yrsUS$141.05k0.32% $733.6k
Marina Cofer-Wildsmith
Independent Director8.1yrsUS$139.10k0.080% $182.4k

8.4yrs

Average Tenure

62yo

Average Age

Experienced Board: FSBW's board of directors are considered experienced (8.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FSBW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.7%.


Top Shareholders

Company Information

FS Bancorp, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FS Bancorp, Inc.
  • Ticker: FSBW
  • Exchange: NasdaqCM
  • Founded: 1936
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Market Cap: US$227.520m
  • Shares outstanding: 4.37m
  • Website: https://www.fsbwa.com

Number of Employees


Location

  • FS Bancorp, Inc.
  • 6920 220th Street SW
  • Mountlake Terrace
  • Washington
  • 98043
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FSBWNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDJul 2012

Biography

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, automobile, direct home improvement, loans on deposit, and recreational loans. As of December 31, 2018, it operated 21 full-service branches and 8 home loan production offices in various suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, Thurston, and Lewis counties; and 1 loan production office in the market area of the Tri-Cities. The company was founded in 1936 and is based in Mountlake Terrace, Washington. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 00:43
End of Day Share Price2020/02/20 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.