FS Bancorp (FSBW) opened 2026 with Q1 revenue of US$35.4 million and basic EPS of US$1.06, backed by net income of US$7.8 million, setting a clear snapshot of its latest quarter. The company reported revenue of US$34.5 million and EPS of US$1.02 in Q1 2025 and US$35.4 million and EPS of US$1.06 in Q1 2026, while trailing 12 month EPS came in at US$4.37 on revenue of US$144.0 million, giving investors a fuller view of earnings power over the past year. With a reported trailing net margin of 22.6% and a Q1 2026 net interest margin of 4.31%, the focus now is on how consistently FS Bancorp can protect its profitability in the face of recent margin pressure.

See our full analysis for FS Bancorp.

With the headline numbers on the table, the next step is to see how these results line up against the widely followed narratives around FS Bancorp's growth potential, earnings quality, and risk profile.

Loan book holds above US$2.6b with steady interest margin

• Total loans sat at US$2.66b at Q1 2026, up from US$2.53b in Q1 2025, while the net interest margin was 4.31% versus 4.32% a year earlier.
• For readers taking a more bullish view, one focal point is that a 4.31% net interest margin in Q1 2026 and trailing 12 month net income of US$32.6 million sit alongside TTM revenue of US$144.0 million, which suggests the core lending engine is still producing solid income even though the five year earnings trend shows about a 3.4% annual decline.
  • Supporters who focus on traditional community banking often point to this level of margin and revenue as evidence that the basic lending model is intact despite softer multi year earnings.
  • The mix of US$2.66b in loans and a 22.6% trailing net margin gives bulls concrete figures to weigh against concerns about slower historical earnings growth.

Efficiency and credit costs take some shine off margins

• The cost to income ratio sat in the mid to high 60% range on a trailing 12 month basis at 66.81%, with quarterly readings between 64.63% and 69.39%, while non performing loans moved from US$13.6 million at Q4 2024 to US$18.3 million at Q1 2026.
• Bears argue that pressure on profitability is visible when earnings over the past five years have declined about 3.4% per year and the trailing net margin eased from 24.4% to 22.6%, and the credit data here feeds that concern.
  • The rise in non performing loans from US$13.6 million in Q4 2024 to US$18.3 million in Q1 2026, alongside a cost to income ratio around 67%, can be read as a headwind for cleaner profitability.
  • When trailing 12 month net income of US$32.6 million is viewed together with these ratios, critics see less room for earnings to absorb further credit or cost pressure without affecting returns.

P/E of 9.4x and 2.8% yield stand out against DCF fair value

• On the valuation side, a P/E of 9.4x sits below peer and industry averages of around 11.8x and 11.7x, the trailing dividend yield is 2.8%, and the current share price of US$41.40 compares with a DCF fair value of about US$85.05.
• For readers considering a more optimistic narrative, this combination of a lower than peer P/E, a 2.8% dividend yield and a share price shown roughly 51% below the DCF fair value reference is set against forecast annual revenue growth of about 12.2% and earnings growth of about 13.4%.
  • Supporters highlight that these growth forecasts, together with TTM EPS of US$4.37 and a 22.6% net margin, provide a quantitative basis for viewing the stock as inexpensive relative to its earnings profile.
  • At the same time, the five year earnings decline of roughly 3.4% per year and the margin slip from 24.4% to 22.6% give a clear checklist for readers to monitor when judging how justified any valuation gap really is.

For a more complete picture of how these numbers fit into valuation, growth and risks, it is worth seeing how other investors frame FS Bancorp’s story through community narratives and data driven tools, then comparing that with your own expectations for the business over time Curious how numbers become stories that shape markets? Explore Community Narratives.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on FS Bancorp's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Given the mixed signals on margins, costs, and valuation, it makes sense to look at the underlying data yourself and move quickly while views are still forming. To see what others are optimistic about and weigh those factors against your own assessment, check out the 4 key rewards.

See What Else Is Out There

FS Bancorp is wrestling with softer five year earnings, slightly lower net margins, a relatively high cost to income ratio, and rising non performing loans.

If you are concerned about that mix of margin pressure and credit risk, it is worth checking companies screened for steadier profiles using the 73 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.