FS Bancorp, Inc. (NASDAQ: FSBW) and Pacific West Bancorp (OTCPK: PWBK) have entered into a definitive merger agreement valued at approximately $34.6 million. The deal will be financed with 430,176 shares of FS Bancorp common stock and $16,832,742 in cash, and will bring Pacific West’s $386.03 million in assets and four Portland‑area branches into FS Bancorp’s portfolio. The combined company will operate 31 branches across Washington and Oregon and will have total assets of roughly $3.6 billion, while continuing to trade under the FS Bancorp brand and integrating Pacific West Bank into the 1st Security Bank of Washington framework.
The transaction is projected to be accretive to earnings per share, with a 7.4% accretion expected in 2027. It will dilute tangible book value by about 2.2% at closing, with an earnback period of approximately 2.4 years. Pacific West shareholders will own roughly 5.4% of FS Bancorp’s outstanding common stock after the merger. The closing of the transaction is anticipated in the third quarter of 2026, subject to customary regulatory approvals and shareholder consent.
Strategically, the merger expands FS Bancorp’s presence in the Portland‑Vancouver metro area, complementing its existing operations in Washington and Oregon. Management expects the combined entity to benefit from a unified branch network, shared back‑office functions, and enhanced technology platforms, creating cost synergies and a broader suite of products for customers. The deal positions FS Bancorp to compete more effectively in a regional banking landscape that is increasingly consolidating.
FS Bancorp reported a net income of $33.3 million for 2025, down from $35.0 million in 2024, and missed fourth‑quarter 2025 earnings per share estimates with $1.10 versus $1.13. The company’s balance sheet as of December 31, 2025, shows total assets of $3.197 billion, net loans of $2.623 billion, and deposits of $133.682 million. FS Bancorp’s closing stock price on February 25, 2026, was $41.26.
Pacific West Bancorp’s financial health has been modest, with assets of $386.03 million and a decline in net income to common shareholders in 2023 and 2024. The holding company owns Pacific West Bank, which operates four branches in the Greater Portland area.
"This partnership with Pacific West represents a compelling step forward in our continued expansion across the Pacific Northwest. Pacific West has built a customer focused commercial banking franchise with deep roots in the Portland‑Vancouver metro area. Combining our organizations brings together complementary strengths that enhance our ability to serve our customers and communities," said Matthew Mullet, President of FS Bancorp and CEO of 1st Security Bank of Washington. "We are excited to join FS Bancorp, a company that shares our commitment to relationship banking and community engagement. This merger provides Pacific West with access to broader capital resources, enhanced technology, and a wider suite of products and services that will benefit our customers, employees and the communities we serve," added Jason Wessling, President and CEO of Pacific West.
The merger aligns with a broader trend of consolidation among U.S. regional banks, driven by expectations of a more favorable regulatory environment and the need to achieve scale to compete with larger institutions amid macro pressures. By combining their operations, FS Bancorp and Pacific West aim to strengthen their competitive position and deliver greater value to customers in the Pacific Northwest.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.