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Note 12 - Regulatory Capital

3 Months Ended

Mar. 31, 2025

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE 12 – REGULATORY CAPITAL

The Bank is subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Under capital adequacy guidelines of the regulatory framework for prompt corrective action,, quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of Tier 1 total capital (as defined) and common equity Tier 1 (“CET 1”) capital to risk-weighted assets (as defined).

The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET 1 capital ratios as set forth in the table below to be categorized as “well capitalized”. At March 31, 2025, the Bank was categorized as “well capitalized” under applicable regulatory requirements. There are no conditions or events since that notification that management believes have changed the Bank’s category. Management believes, at March 31, 2025, that the Bank met all capital adequacy requirements.

The following tables compare the Bank’s actual capital amounts and ratios to their minimum regulatory capital requirements and well capitalized regulatory capital at the dates indicated:

																To be Well Capitalized
											For Capital					Under Prompt
						For Capital					Adequacy With					Corrective
	Actual					Adequacy Purposes					Capital Buffer					Action Provisions
Bank Only	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
At March 31, 2025
Total risk-based capital (to risk-weighted assets)	$	375,497		14.44	%	$	208,044		8.00	%	$	273,058		10.50	%	$	260,055		10.00	%
Tier 1 risk-based capital (to risk-weighted assets)	$	342,982		13.19	%	$	156,033		6.00	%	$	221,047		8.50	%	$	208,044		8.00	%
Tier 1 leverage capital (to average assets)	$	342,982		11.29	%	$	121,515		4.00	%	$	N/A		N/A		$	151,893		5.00	%
CET 1 capital (to risk-weighted assets)	$	342,982		13.19	%	$	117,025		4.50	%	$	182,038		7.00	%	$	169,036		6.50	%

At December 31, 2024
Total risk-based capital (to risk-weighted assets)	$	368,953		14.18	%	$	208,174		8.00	%	$	273,228		10.50	%	$	260,218		10.00	%
Tier 1 risk-based capital (to risk-weighted assets)	$	336,416		12.93	%	$	156,131		6.00	%	$	221,185		8.50	%	$	208,174		8.00	%
Tier 1 leverage capital (to average assets)	$	336,416		11.24	%	$	119,741		4.00	%	$	N/A		N/A		$	149,676		5.00	%
CET 1 capital (to risk-weighted assets)	$	336,416		12.93	%	$	117,098		4.50	%	$	182,152		7.00	%	$	169,141		6.50	%

In addition to the minimum CET 1, Tier 1, total capital and leverage ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET 1 capital greater than 2.5% of risk-weighted assets above the required minimum capital levels. Failure to maintain the required buffer could result in limitations on the Bank's ability to pay dividends, repurchase shares, and pay discretionary bonuses, based on specified percentages of eligible retained income. At March 31, 2025, the Bank’s capital exceeded the conservation buffer.

As a bank holding company registered with the Federal Reserve, the Company is subject to the capital adequacy requirements of the Federal Reserve. Bank holding companies with $3.0 billion or more in assets or more are subject to compliance with the Federal Reserve’s capital regulations, which are generally the same as the capital regulations applicable to the Bank. The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and the Federal Reserve expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. FS Bancorp is subject to regulatory capital guidelines for bank holding companies with $3.0 billion or more in assets at March 31, 2025, and has exceeded all regulatory capital requirements.

The following table presents the Company's regulatory capital ratios at the dates indicated:

	At March 31,	At December 31,
Company Only	2025	2024
Total risk-based capital (to risk-weighted assets)	14.68%	14.53%
Tier 1 risk-based capital (to risk-weighted assets)	11.51%	11.36%
Tier 1 leverage capital (to average assets)	9.85%	9.87%
CET 1 capital (to risk-weighted assets)	11.51%	11.36%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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