MOUNTLAKE TERRACE, Wash., July 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ: FSBW) (the "Company"), the holding company for 1st Security Bank of Washington (the "Bank") today reported 2026 second quarter net income of $7.9 million, or $1.04 per diluted share, compared to $7.8 million, or $1.02 per diluted share, for the prior quarter, and $7.7 million, or $0.99 per diluted share, for the comparable quarter one year ago. For the six months ended June 30, 2026, net income was $15.8 million, or $2.07 per diluted share, compared to net income of $15.7 million, or $1.99 per diluted share, for the comparable six-month period in 2025.
"From the announcement of our proposed merger with Pacific West Bank in the first quarter of 2026, our teams have been diligently working toward a successful integration, while concurrently contributing to our financial success this quarter," stated Matthew Mullet, President and CEO of FS Bancorp, Inc. "We are also pleased to announce that our Board of Directors has approved our 54th consecutive quarterly cash dividend of $0.29 per common share, demonstrating our commitment to returning capital to long-term shareholders. The cash dividend will be paid on August 21, 2026, to shareholders of record as of August 7, 2026," concluded Mullet.
2026 Second Quarter Highlights
Net income totaled $7.9 million for the second quarter of 2026, compared to $7.8 million for the previous quarter, and $7.7 million for the comparable quarter one year ago;
Total deposits decreased $188.7 million, or 7.2%, to $2.45 billion at June 30, 2026, compared to $2.63 billion at March 31, 2026. This decrease was primarily due to a $201.1 million decrease in brokered deposits, with an offsetting increase of $12.1 million in retail deposits. Compared to June 30, 2025, total deposits decreased $104.5 million, or 4.1%. The cost of deposits decreased to 2.18% for the quarter ended June 30, 2026, from 2.24% for the quarter ended March 31, 2026, primarily due to the Company's funding strategy of shifting from higher cost brokered deposits to borrowings, while maintaining sufficient liquidity;
Loans receivable, net increased $4.9 million, to $2.63 billion at June 30, 2026, compared to $2.62 billion at March 31, 2026, and increased $46.7 million, from $2.58 billion at June 30, 2025. The year-over-year loan growth was primarily due to an increase of $88.9 million in the commercial real estate portfolio, partially offset by heightened payoff activity in the consumer loan portfolio which decreased $33.1 million during the same period;
Consumer loans were $573.2 million at June 30, 2026, a decrease of $10.3 million, or 1.8%, from $583.5 million in the previous quarter, and a decrease of $33.1 million, or 5.5%, from $606.3 million in the comparable quarter one year ago. During the three months ended June 30, 2026, consumer loan originations included 87.3% of indirect home improvement loans originated with a Fair Isaac Corporation ("FICO") score above 720;
The Commercial and Consumer Banking segment reported net income of $6.8 million for the second quarter of 2026, compared to $6.7 million for the prior quarter and $7.4 million for the second quarter of 2025. The Home Lending segment reported net income of $1.1 million for both the first and second quarters of 2026, compared to $352,000 for the second quarter of 2025;
Repurchased 87,000 shares of the Company's common stock for $3.6 million in the second quarter of 2026, at an average price of $41.81 per share;
Book value per share increased $1.15, or 2.7%, to $43.57 at June 30, 2026, compared to $42.42 at March 31, 2026, and increased $4.02, or 10.2%, from $39.55 at June 30, 2025. Tangible book value per share (non-GAAP financial measure) increased $1.23 to $41.84 at June 30, 2026, compared to $40.61 at March 31, 2026, and increased $4.38 from $37.46 at June 30, 2025. See, "Non-GAAP Financial Measures;" and
Regulatory capital ratios at the Bank were 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital at June 30, 2026, compared to 13.8% for total risk-based capital and 11.2% for Tier 1 leverage capital at March 31, 2026. The Bank remained well capitalized under applicable regulatory capital standards.
Segment Reporting
The Company operates through two reportable segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment also manages the Bank's investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.
The tables below provide a summary of segment reporting at or for the three and six months ended June 30, 2026 and 2025 (dollars in thousands):
At or For the Three Months Ended June 30, 2026 | |||||||||||||||
Condensed income statement: | Commercial and | Home Lending | Total | ||||||||||||
Net interest income (1) | $ | 29,662 | $ | 2,986 | $ | 32,648 | |||||||||
Provision for credit losses | (2,297 | ) | (344 | ) | (2,641 | ) | |||||||||
Noninterest income (2) | 2,740 | 3,410 | 6,150 | ||||||||||||
Noninterest expense (3) | (21,413 | ) | (4,691 | ) | (26,104 | ) | |||||||||
Income before provision for income taxes | 8,692 | 1,361 | 10,053 | ||||||||||||
Provision for income taxes | (1,899 | ) | (218 | ) | (2,117 | ) | |||||||||
Net income | $ | 6,793 | $ | 1,143 | $ | 7,936 | |||||||||
Total average assets for period ended | $ | 2,511,682 | $ | 668,842 | $ | 3,180,524 | |||||||||
Full-time employees ("FTEs") | 476 | 117 | 593 | ||||||||||||
At or For the Three Months Ended June 30, 2025 | |||||||||||||||
Condensed income statement: | Commercial and | Home Lending | Total | ||||||||||||
Net interest income (1) | $ | 29,179 | $ | 2,933 | $ | 32,112 | |||||||||
Provision for credit losses | (1,849 | ) | (172 | ) | (2,021 | ) | |||||||||
Noninterest income (2) | 2,298 | 2,872 | 5,170 | ||||||||||||
Noninterest expense (3) | (20,314 | ) | (5,188 | ) | (25,502 | ) | |||||||||
Income before provision for income taxes | 9,314 | 445 | 9,759 | ||||||||||||
Provision for income taxes | (1,938 | ) | (93 | ) | (2,031 | ) | |||||||||
Net income | $ | 7,376 | $ | 352 | $ | 7,728 | |||||||||
Total average assets for period ended | $ | 2,466,917 | $ | 649,443 | $ | 3,116,360 | |||||||||
FTEs | 452 | 115 | 567 | ||||||||||||
At or For the Six Months Ended June 30, 2026 | |||||||||||||||
Condensed income statement: | Commercial and | Home Lending | Total | ||||||||||||
Net interest income (1) | $ | 59,214 | $ | 5,979 | $ | 65,193 | |||||||||
Provision for credit losses | (4,842 | ) | (328 | ) | (5,170 | ) | |||||||||
Noninterest income (2) | 5,204 | 6,347 | 11,551 | ||||||||||||
Noninterest expense (3) | (42,275 | ) | (9,349 | ) | (51,624 | ) | |||||||||
Income before provision for income taxes | 17,301 | 2,649 | 19,950 | ||||||||||||
Provision for income taxes | (3,762 | ) | (422 | ) | (4,184 | ) | |||||||||
Net income | $ | 13,539 | $ | 2,227 | $ | 15,766 | |||||||||
Total average assets for period ended | $ | 2,527,284 | $ | 663,600 | $ | 3,190,884 | |||||||||
FTEs | 476 | 117 | 593 | ||||||||||||
At or For the Six Months Ended June 30, 2025 | |||||||||||||||
Condensed income statement: | Commercial and | Home Lending | Total | ||||||||||||
Net interest income (1) | $ | 57,585 | $ | 5,508 | $ | 63,093 | |||||||||
Provision for credit losses | (3,170 | ) | (443 | ) | (3,613 | ) | |||||||||
Noninterest income (2) | 4,543 | 5,753 | 10,296 | ||||||||||||
Noninterest expense (3) | (40,489 | ) | (10,067 | ) | (50,556 | ) | |||||||||
Income before provision for income taxes | 18,469 | 751 | 19,220 | ||||||||||||
Provision for income taxes | (3,314 | ) | (157 | ) | (3,471 | ) | |||||||||
Net income | $ | 15,155 | $ | 594 | $ | 15,749 | |||||||||
Total average assets for period ended | $ | 2,440,654 | $ | 634,013 | $ | 3,074,667 | |||||||||
FTEs | 452 | 115 | 567 |
________________________
(1) | Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets. | |
(2) | Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2026, the Company recorded a net increase of $45,000 and a net decrease of $56,000 in fair value, respectively, compared to a net increase of $3,000 and a net increase of $266,000 in fair value for the three and six months ended June 30, 2025, respectively. As of both June 30, 2026 and 2025, there were $13.2 million in residential mortgage loans recorded at fair value, which had previously been transferred from loans held for sale to loans held for investment. | |
(3) | Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2026 and 2025, the Home Lending segment included allocated overhead expenses of $1.7 million and $3.6 million, compared to $1.8 million and $3.7 million, respectively. | |
Asset Summary
The following table summarizes the composition of total assets and changes from the linked quarter and prior-year period.
ASSETS | | | | | | | | | | | | | | Linked Quarter | | | Prior Year | | ||||||||||
(Dollars in thousands) | | June 30, | | | March 31, | | | June 30, | | | Change | | | Quarter Change | | |||||||||||||
| | 2026 | | | 2026 | | | 2025 | | | $ | | | % | | | $ | | | % | | |||||||
Cash and due from banks | | $ | 12,835 | | | $ | 12,424 | | | $ | 15,168 | | | $ | 411 | | | | 3 | % | | $ | (2,333 | ) | | | (15 | )% |
Interest-bearing deposits at other financial institutions | | | 16,875 | | | | 26,278 | | | | 18,027 | | | | (9,403 | ) | | | (36 | ) | | | (1,152 | ) | | | (6 | ) |
Total cash and cash equivalents | | | 29,710 | | | | 38,702 | | | | 33,195 | | | | (8,992 | ) | | | (23 | ) | | | (3,485 | ) | | | (10 | ) |
Certificates of deposit at other financial institutions | | | — | | | | — | | | | 248 | | | | — | | | | — | | | NM | | | NM | | ||
Securities available-for-sale, at fair value | | | 269,460 | | | | 271,007 | | | | 302,692 | | | | (1,547 | ) | | | (1 | ) | | | (33,232 | ) | | | (11 | ) |
Securities held-to-maturity, net | | | 34,845 | | | | 33,267 | | | | 31,562 | | | | 1,578 | | | | 5 | | | | 3,283 | | | | 10 | |
Loans held for sale, at fair value | | | 30,548 | | | | 56,275 | | | | 53,630 | | | | (25,727 | ) | | | (46 | ) | | | (23,082 | ) | | | (43 | ) |
Loans receivable, net | | | 2,628,992 | | | | 2,624,091 | | | | 2,582,272 | | | | 4,901 | | | | — | | | | 46,720 | | | | 2 | |
Accrued interest receivable | | | 14,263 | | | | 15,333 | | | | 14,270 | | | | (1,070 | ) | | | (7 | ) | | | (7 | ) | | | — | |
Premises and equipment, net | | | 43,455 | | | | 43,612 | | | | 30,098 | | | | (157 | ) | | | — | | | | 13,357 | | | | 44 | |
Long-lived assets held for sale | | | 3,258 | | | | 3,258 | | | | — | | | | — | | | | — | | | | — | | | NM | | |
Operating lease right-of-use | | | 6,655 | | | | 5,472 | | | | 7,969 | | | | 1,183 | | | | 22 | | | | (1,314 | ) | | | (16 | ) |
Federal Home Loan Bank stock, at cost | | | 14,420 | | | | 8,701 | | | | 11,579 | | | | 5,719 | | | | 66 | | | | 2,841 | | | | 25 | |
Deferred tax asset, net | | | 6,441 | | | | 7,175 | | | | 7,782 | | | | (734 | ) | | | (10 | ) | | | (1,341 | ) | | | (17 | ) |
Bank owned life insurance ("BOLI"), net | | | 36,771 | | | | 36,508 | | | | 38,262 | | | | 263 | | | | 1 | | | | (1,491 | ) | | | (4 | ) |
MSRs, held at the lower of cost or fair value | | | 8,912 | | | | 8,676 | | | | 8,652 | | | | 236 | | | | 3 | | | | 260 | | | | 3 | |
Goodwill | | | 3,592 | | | | 3,592 | | | | 3,592 | | | | — | | | | — | | | | — | | | | — | |
Core deposit intangible, net | | | 9,052 | | | | 9,774 | | | | 12,071 | | | | (722 | ) | | | (7 | ) | | | (3,019 | ) | | | (25 | ) |
Other assets | | | 38,706 | | | | 38,072 | | | | 38,139 | | | | 634 | | | | 2 | | | | 567 | | | | 1 | |
TOTAL ASSETS | | $ | 3,179,080 | | | $ | 3,203,515 | | | $ | 3,176,013 | | | $ | (24,435 | ) | | | (1 | )% | | $ | 3,067 | | | | — | % |
LOAN PORTFOLIO | |||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||
COMMERCIAL REAL ESTATE | June 30, 2026 | March 31, 2026 | June 30, 2025 | Linked | Prior | ||||||||||||||||||||||||||||
("CRE") LOANS | Amount | Percent | Amount | Percent | Amount | Percent | Change | Change | |||||||||||||||||||||||||
CRE owner occupied | $ | 184,136 | 6.9 | % | $ | 182,260 | 6.9 | % | $ | 180,250 | 6.8 | % | $ | 1,876 | $ | 3,886 | |||||||||||||||||
CRE non-owner occupied | 188,258 | 7.1 | 182,568 | 6.9 | 171,979 | 6.6 | 5,690 | 16,279 | |||||||||||||||||||||||||
Commercial and speculative construction and development | 370,459 | 13.9 | 358,657 | 13.5 | 300,723 | 11.5 | 11,802 | 69,736 | |||||||||||||||||||||||||
Multi-family | 262,137 | 9.9 | 263,353 | 9.9 | 263,185 | 10.1 | (1,216 | ) | (1,048 | ) | |||||||||||||||||||||||
Total CRE loans | 1,004,990 | 37.8 | 986,838 | 37.2 | 916,137 | 35.0 | 18,152 | 88,853 | |||||||||||||||||||||||||
RESIDENTIAL REAL ESTATE LOANS | |||||||||||||||||||||||||||||||||
One-to-four-family (excludes HFS) | 660,518 | 24.8 | 630,996 | 23.8 | 639,881 | 24.4 | 29,522 | 20,637 | |||||||||||||||||||||||||
Home equity | 88,214 | 3.3 | 88,468 | 3.3 | 85,613 | 3.3 | (254 | ) | 2,601 | ||||||||||||||||||||||||
Residential custom construction | 44,765 | 1.7 | 44,134 | 1.7 | 54,024 | 2.1 | 631 | (9,259 | ) | ||||||||||||||||||||||||
Total residential real estate loans | 793,497 | 29.8 | 763,598 | 28.8 | 779,518 | 29.8 | 29,899 | 13,979 | |||||||||||||||||||||||||
CONSUMER LOANS | |||||||||||||||||||||||||||||||||
Indirect home improvement | 502,151 | 18.9 | 513,437 | 19.3 | 530,375 | 20.3 | (11,286 | ) | (28,224 | ) | |||||||||||||||||||||||
Marine | 66,941 | 2.5 | 67,126 | 2.5 | 72,765 | 2.8 | (185 | ) | (5,824 | ) | |||||||||||||||||||||||
Other consumer | 4,111 | 0.1 | 2,921 | 0.1 | 3,151 | 0.1 | 1,190 | 960 | |||||||||||||||||||||||||
Total consumer loans | 573,203 | 21.5 | 583,484 | 21.9 | 606,291 | 23.2 | (10,281 | ) | (33,088 | ) | |||||||||||||||||||||||
COMMERCIAL BUSINESS LOANS | |||||||||||||||||||||||||||||||||
Commercial and industrial ("C&I") | 281,181 | 10.6 | 304,470 | 11.5 | 294,563 | 11.3 | (23,289 | ) | (13,382 | ) | |||||||||||||||||||||||
Warehouse lending | 7,286 | 0.3 | 18,144 | 0.6 | 17,952 | 0.7 | (10,858 | ) | (10,666 | ) | |||||||||||||||||||||||
Total commercial business loans | 288,467 | 10.9 | 322,614 | 12.1 | 312,515 | 12.0 | (34,147 | ) | (24,048 | ) | |||||||||||||||||||||||
Total loans receivable, gross | 2,660,157 | 100.0 | % | 2,656,534 | 100.0 | % | 2,614,461 | 100.0 | % | 3,623 | 45,696 | ||||||||||||||||||||||
Allowance for credit losses ("ACL") on loans | (31,165 | ) | (32,443 | ) | (32,189 | ) | 1,278 | 1,024 | |||||||||||||||||||||||||
Total loans receivable, net | $ | 2,628,992 | $ | 2,624,091 | $ | 2,582,272 | $ | 4,901 | $ | 46,720 | |||||||||||||||||||||||
The following table includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:
| | | | | | | | | Current | |||||||||||||||||||||||||||||||
(Dollars in | | | | | | | | | | Weighted | ||||||||||||||||||||||||||||||
thousands) | For the Quarter Ended | | Average | |||||||||||||||||||||||||||||||||||||
CRE by type: | Sep 30, | Dec 31, | Mar 31, | Jun 30, | Sep 30, | Dec 31, | Mar 31, | Jun 30, | Total | Rate | ||||||||||||||||||||||||||||||
Apartment | $ | 6,957 | $ | 16,937 | $ | 7,345 | $ | 2,242 | $ | 4,101 | $ | 11,817 | $ | 15,901 | $ | 37,411 | $ | 102,711 | 5.85 | % | ||||||||||||||||||||
Industrial | 198 | — | 13,497 | 3,645 | 5,641 | 5,204 | 2,790 | 6,334 | 37,309 | 5.88 | % | |||||||||||||||||||||||||||||
Mixed use | — | 1,135 | 1,287 | — | — | 3,210 | 445 | — | 6,077 | 6.73 | % | |||||||||||||||||||||||||||||
Office | 538 | 12,580 | 2,767 | — | 7,318 | 3,622 | — | 3,090 | 29,915 | 5.75 | % | |||||||||||||||||||||||||||||
Other | 3,241 | 2,408 | — | 1,739 | 323 | 24 | 7 | 866 | 8,608 | 5.24 | % | |||||||||||||||||||||||||||||
Retail | — | 3,298 | 2,902 | 2,322 | 7,370 | — | — | 417 | 16,309 | 4.88 | % | |||||||||||||||||||||||||||||
Senior housing and assisted living | 2,092 | — | — | 1,336 | — | — | 3,022 | — | 6,450 | 6.88 | % | |||||||||||||||||||||||||||||
Total | $ | 13,026 | $ | 36,358 | $ | 27,798 | $ | 11,284 | $ | 24,753 | $ | 23,877 | $ | 22,165 | $ | 48,118 | $ | 207,379 | | |||||||||||||||||||||
The composition of CRE loans at the dates indicated were as follows:
(Dollars in thousands) | |||||||||||||||
CRE by Type: | June 30, 2026 | March 31, 2026 | June 30, 2025 | ||||||||||||
CRE non-owner occupied: | |||||||||||||||
Office | $ | 43,705 | $ | 43,532 | $ | 39,141 | |||||||||
Retail | 42,042 | 42,186 | 38,652 | ||||||||||||
Hospitality/restaurant | 24,499 | 24,673 | 26,489 | ||||||||||||
Industrial | 20,824 | 14,064 | 14,444 | ||||||||||||
Self-storage | 18,767 | 18,844 | 19,075 | ||||||||||||
Mixed use | 18,489 | 18,674 | 18,387 | ||||||||||||
Other | 9,189 | 9,249 | 3,670 | ||||||||||||
Senior housing/assisted living | 6,882 | 7,263 | 7,448 | ||||||||||||
Education/worship | 2,359 | 2,387 | 2,467 | ||||||||||||
Land | 1,502 | 1,696 | 2,206 | ||||||||||||
Total CRE non-owner occupied | 188,258 | 182,568 | 171,979 | ||||||||||||
CRE owner occupied: | |||||||||||||||
Industrial | 79,137 | 74,904 | 77,419 | ||||||||||||
Office | 31,862 | 35,100 | 40,156 | ||||||||||||
Retail | 27,433 | 27,443 | 19,470 | ||||||||||||
Other | 10,539 | 10,674 | 9,483 | ||||||||||||
Mixed use | 9,239 | 7,685 | 5,548 | ||||||||||||
Hospitality/restaurant | 7,622 | 8,125 | 7,230 | ||||||||||||
Automobile related | 6,745 | 6,792 | 7,215 | ||||||||||||
Car wash | 4,376 | 4,394 | 4,447 | ||||||||||||
Agriculture | 3,816 | 3,759 | 4,652 | ||||||||||||
Education/worship | 3,367 | 3,384 | 4,630 | ||||||||||||
Total CRE owner occupied | 184,136 | 182,260 | 180,250 | ||||||||||||
Total | $ | 372,394 | $ | 364,828 | $ | 352,229 |
The composition of construction loans at the dates indicated were as follows:
(Dollars in thousands) | June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||||||||||||||
Construction Types: | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||
Commercial construction – retail | $ | 8,447 | 2.0 | % | $ | 8,450 | 2.1 | % | $ | 8,447 | 2.4 | % | ||||||||||||
Commercial construction – office | 7,164 | 1.7 | 9,442 | 2.3 | 9,083 | 2.6 | ||||||||||||||||||
Commercial construction – self storage | 25,234 | 6.1 | 24,217 | 6.0 | 16,553 | 4.7 | ||||||||||||||||||
Commercial construction – hotel | 13,463 | 3.3 | 11,968 | 3.0 | 3,673 | 1.0 | ||||||||||||||||||
Multi-family | 46,186 | 11.1 | 44,343 | 11.0 | 23,119 | 6.5 | ||||||||||||||||||
Custom construction – single family residential and single family manufactured residential | 33,944 | 8.2 | 33,425 | 8.3 | 45,570 | 12.8 | ||||||||||||||||||
Custom construction – land, lot and acquisition and development | 10,821 | 2.6 | 10,708 | 2.7 | 8,454 | 2.4 | ||||||||||||||||||
Speculative residential construction – vertical | 225,992 | 54.4 | 216,204 | 53.7 | 200,375 | 56.5 | ||||||||||||||||||
Speculative residential construction – land, lot and acquisition and development | 43,973 | 10.6 | 44,034 | 10.9 | 39,473 | 11.1 | ||||||||||||||||||
Total | $ | 415,224 | 100.0 | % | $ | 402,791 | 100.0 | % | $ | 354,747 | 100.0 | % | ||||||||||||
Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows:
(Dollars in | Prior Year | |||||||||||||||||||||||||||||||||||||||
thousands) | For the Three Months Ended | Linked Quarter | Quarter | |||||||||||||||||||||||||||||||||||||
June 30, 2026 | March 31, 2026 | June 30, 2025 | $ | % | $ | % | ||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | Change | Change | Change | Change | |||||||||||||||||||||||||||||||
Purchase | $ | 163,100 | 79.2 | % | $ | 139,626 | 67.3 | % | $ | 170,854 | 85.7 | % | $ | 23,474 | 16.8 | $ | (7,754 | ) | (4.5 | )% | ||||||||||||||||||||
Refinance | 42,741 | 20.8 | 67,864 | 32.7 | 28,470 | 14.3 | (25,123 | ) | (37.0 | ) | 14,271 | 50.1 | % | |||||||||||||||||||||||||||
Total | $ | 205,841 | 100.0 | % | $ | 207,490 | 100.0 | % | $ | 199,324 | 100.0 | % | $ | (1,649 | ) | (0.8 | ) | $ | 6,517 | 3.3 | % | |||||||||||||||||||
(Dollars in thousands) | For the Six Months Ended June 30, | |||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||
Amount | Percent | Amount | Percent | $ Change | % Change | |||||||||||||||||||
Purchase | $ | 302,726 | 73.2 | % | $ | 290,737 | 84.3 | % | $ | 11,989 | 4.1 | % | ||||||||||||
Refinance | 110,605 | 26.8 | 53,983 | 15.7 | 56,622 | 104.9 | % | |||||||||||||||||
Total | $ | 413,331 | 100.0 | % | $ | 344,720 | 100.0 | % | $ | 68,611 | 19.9 | % | ||||||||||||
During the quarter ended June 30, 2026, the Company sold $156.1 million of one-to-four-family loans compared to $154.7 million during the previous quarter and $127.1 million during the same quarter one year ago. Gross margins on home loan sales decreased to 2.98% for the quarter ended June 30, 2026, compared to 3.03% in the previous quarter and decreased from 3.06% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.
Liabilities and Equity Summary
The following table summarizes the components and changes in deposits, borrowings, equity, and book value per common share at the dates indicated.
(Dollars in thousands) | Linked | Prior Year | |||||||||||||||||||||||||||||||
DEPOSITS | June 30, 2026 | March 31, 2026 | June 30, 2025 | Quarter | Quarter | ||||||||||||||||||||||||||||
Transactional deposits: | Amount | Percent | Amount | Percent | Amount | Percent | $ Change | $ Change | |||||||||||||||||||||||||
Noninterest-bearing checking | $ | 629,799 | 25.7 | % | $ | 634,787 | 24.1 | % | $ | 643,573 | 25.2 | % | $ | (4,988 | ) | $ | (13,774 | ) | |||||||||||||||
Interest-bearing checking | 209,721 | 8.6 | 185,793 | 7.0 | 181,240 | 7.1 | 23,928 | 28,481 | |||||||||||||||||||||||||
Escrow accounts related to mortgages serviced (1) | 12,057 | 0.5 | 18,904 | 0.7 | 10,496 | 0.4 | (6,847 | ) | 1,561 | ||||||||||||||||||||||||
Subtotal | 851,577 | 34.8 | 839,484 | 31.8 | 835,309 | 32.7 | 12,093 | 16,268 | |||||||||||||||||||||||||
Savings and money market: | |||||||||||||||||||||||||||||||||
Savings | 173,091 | 7.1 | 169,192 | 6.4 | 159,601 | 6.3 | 3,899 | 13,490 | |||||||||||||||||||||||||
Money market | 375,833 | 15.3 | 377,685 | 14.3 | 350,548 | 13.7 | (1,852 | ) | 25,285 | ||||||||||||||||||||||||
Subtotal | 548,924 | 22.4 | 546,877 | 20.7 | 510,149 | 20.0 | 2,047 | 38,775 | |||||||||||||||||||||||||
Certificates of deposit: | |||||||||||||||||||||||||||||||||
CDs | 922,022 | 37.6 | 923,801 | 35.0 | 896,892 | 35.1 | (1,779 | ) | 25,130 | ||||||||||||||||||||||||
Brokered Deposits | |||||||||||||||||||||||||||||||||
Non-maturity brokered deposits | 4,027 | 0.2 | 250 | — | 251 | — | 3,777 | 3,776 | |||||||||||||||||||||||||
Maturity brokered deposits | 122,332 | 5.0 | 327,164 | 12.5 | 310,774 | 12.2 | (204,832 | ) | (188,442 | ) | |||||||||||||||||||||||
Subtotal | 126,359 | 5.2 | 327,414 | 12.5 | 311,025 | 12.2 | (201,055 | ) | (184,666 | ) | |||||||||||||||||||||||
Total deposits | $ | 2,448,882 | 100.0 | % | $ | 2,637,576 | 100.0 | % | $ | 2,553,375 | 100.0 | % | $ | (188,694 | ) | $ | (104,493 | ) | |||||||||||||||
Borrowings (2) | $ | 324,500 | $ | 167,305 | $ | 234,305 | $ | 157,195 | $ | 90,195 | |||||||||||||||||||||||
Stockholders' equity | $ | 318,960 | $ | 313,852 | $ | 297,203 | $ | 5,108 | $ | 21,757 | |||||||||||||||||||||||
Book value per common share | $ | 43.57 | $ | 42.42 | $ | 39.55 | $ | 1.15 | $ | 4.02 | |||||||||||||||||||||||
_____________
(1) | Primarily noninterest-bearing accounts based on applicable state law. | |
(2) | Comprised of FHLB advances and Federal Reserve Bank borrowings. | |
Brokered deposits declined from the prior quarter, partially offset by increased borrowings, which offered a slightly lower cost of funds.
In the table above, the linked quarter increase in stockholders' equity at June 30, 2026, compared to March 31, 2026, was primarily due to net income of $7.9 million. Changes in the fair value of available‑for‑sale securities and interest rate swap cash flow hedges increased accumulated other comprehensive income ("AOCI") by $2.1 million, net of tax. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in stockholders' equity was partially offset by share repurchases of $3.6 million and cash dividends paid of $2.2 million.
The Bank is considered "well capitalized" under the capital requirement established by the Federal Deposit Insurance Corporation ("FDIC") and the Company exceeded all regulatory capital requirements. At June 30, 2026, capital ratios presented for the Bank and the Company were as follows:
At June 30, 2026 | ||||||
Bank | Company | |||||
Total risk-based capital (to risk-weighted assets) | 14.01 | % | 13.87 | % | ||
Tier 1 leverage capital (to average assets) | 11.43 | % | 10.05 | % | ||
CET 1 capital (to risk-weighted assets) | 12.84 | % | 11.29 | % | ||
Credit Quality
The following tables summarize changes in the ACL on loans for the periods indicated and the balances of nonperforming and classified loans at the dates indicated.
For the three months ended | Linked | Prior Year | |||||||||||||||||||||
ACL ON LOANS | June 30, | March 31, | June 30, | Quarter | Quarter | ||||||||||||||||||
(Dollars in thousands) | 2026 | 2026 | 2025 | $ Change | $ Change | ||||||||||||||||||
Beginning ACL balance | $ | 32,443 | $ | 31,937 | $ | 31,653 | $ | 506 | $ | 790 | |||||||||||||
Provision | 2,559 | 2,650 | 1,715 | (91 | ) | 844 | |||||||||||||||||
Charge-offs | |||||||||||||||||||||||
Indirect | (2,067 | ) | (2,450 | ) | (1,556 | ) | 383 | (511 | ) | ||||||||||||||
Marine | (7 | ) | (75 | ) | (43 | ) | 68 | 36 | |||||||||||||||
Other | (49 | ) | (95 | ) | (42 | ) | 46 | (7 | ) | ||||||||||||||
Commercial and speculative construction and development | (2,277 | ) | — | ... |