FS Bancorp: deal to immediately accretive to FS Bancorp’s EPS

FS Bancorp: deal to immediately accretive to FS Bancorp’s EPS

FS Bancorp Announces Merger with Pacific West Bancorp, Projected to Boost Earnings Per Share

FS Bancorp, Inc. (NASDAQ: FSBW) has entered into a definitive merger agreement with Pacific West Bancorp (OTCPK: PWBK), a transaction valued at approximately $34.6 million. Under the terms, Pacific West will merge into FS Bancorp in a stock-and-cash deal, with shareholders of the latter receiving 430,176 shares of FS Bancorp common stock and $16.8 million in cash. Based on the closing price of FS Bancorp's stock on February 25, 2026 ($41.26 per share), the total consideration amounts to $12.52 per share for Pacific West, or 5.4% of FS Bancorp's outstanding shares post-merger.

The merger is expected to be immediately accretive to FS Bancorp's earnings per share (EPS), with projected 2027 EPS accretion of 7.4%. However, it will dilute FS Bancorp's tangible book value by 2.2% at closing, with an estimated earnback period of 2.4 years. Pro forma, the combined entity would hold $3.6 billion in assets, $3.0 billion in loans, and 31 branches across the Pacific Northwest.

Pacific West, with $386 million in assets as of December 31, 2025, operates four branches in the Portland-Vancouver metro area. Management from both companies highlighted strategic synergies, including expanded market reach and enhanced service offerings. FS Bancorp's President Matthew Mullet emphasized the merger's role in strengthening its commercial banking footprint, while Pacific West's CEO Jason Wessling noted access to broader capital and technology.

The transaction, subject to regulatory and shareholder approvals, is anticipated to close in Q3 2026. Both companies' boards have unanimously approved the deal.

While FS Bancorp's Q4 2025 earnings of $1.10 per share fell short of estimates ($1.13), its revenue of $40.01 million exceeded expectations, reflecting mixed performance ahead of the merger announcement. The projected EPS accretion aligns with management's focus on long-term growth, though actual results will depend on integration success and market conditions.

Investors are advised to review the SEC filings for detailed risk factors and merger terms.