Exploring FS Bancorp, Inc. (FSBW) Investor Profile: Who’s Buying and Why?

You're looking at FS Bancorp, Inc. (FSBW), a regional bank that just reported a Q3 2025 net income of $9.2 million, and you're wondering: who exactly is betting on this stock, and what's their play, especially as total assets crossed the $3 billion mark? Honestly, the story is in the institutional conviction; a significant chunk-around 63.30%-of the company is held by institutions, which is a powerful signal in the community banking space. For instance, you see major players like T. Rowe Price Investment Management, Inc. holding over 1 million shares, and BlackRock, Inc. controlling approximately 452,802 shares, meaning the smart money sees something compelling here, defintely more than just a local bank story. That heavy institutional presence, combined with the company's Q3 tangible book value per share growing to $36.02, suggests a deep-value approach where investors are focusing on capital strength and a consistent dividend of $0.28 per share, not just near-term earnings dips. The question is, are they buying for a potential acquisition premium, or for the long-term stability of a bank that's actively repurchasing its own stock, buying back 134,413 shares in the last quarter alone?

Who Invests in FS Bancorp, Inc. (FSBW) and Why?

You're looking at FS Bancorp, Inc. (FSBW) and trying to figure out who is buying this regional bank stock and what their playbook is. The direct takeaway is this: FSBW is overwhelmingly owned by large, value-focused institutions, not day traders, because it offers a rare combination of strong balance sheet metrics and a dependable dividend in a volatile sector.

Honestly, the ownership structure tells the whole story. As of mid-2025, institutional investors-the big money like mutual funds and pension funds-hold approximately 66.8% of the company's shares. This is a classic profile for a stable, smaller-cap bank. The general public, or retail investors, own about 15.9%, with the Employee Stock Ownership Plan (ESOP) accounting for another 6.29%. That's a lot of long-term capital.

Here's a quick look at the major players, based on recent 13F filings:

• T. Rowe Price Group, Inc.: Holds the largest stake at around 13.8%.
• BlackRock, Inc.: A major holder with about 5.93% ownership.
• The Vanguard Group, Inc.: Owns approximately 5.38%, mostly through index funds.

The Core Investment Motivations: Value and Income

Investors are drawn to FS Bancorp, Inc. for three clear reasons: its deep value proposition, its reliable income stream, and its measured growth in a tough operating environment. This isn't a high-flying tech stock; it's a solid balance sheet play.

The first draw is value. The stock is trading at a Price-to-Book (P/B) ratio of roughly 0.98, which means you are essentially buying the bank for slightly less than the value of its assets minus its liabilities. The trailing Price-to-Earnings (P/E) ratio is also low at about 9.72, making it look defintely undervalued compared to the broader market and even the financial sector average.

Second, income investors love the dividend. FS Bancorp, Inc. has declared its 51st consecutive quarterly cash dividend, and the annual dividend sits at $1.12 per share, translating to a dividend yield in the range of 2.87% to 3.36%. Plus, the company has been actively repurchasing shares, approving a new $5.0 million plan in 2025, which is another way to return capital to shareholders.

Finally, the bank is showing resilience and growth where it counts. In Q3 2025, total deposits increased to $2.69 billion, and the company reported a diluted Earnings Per Share (EPS) of $1.18, which beat analyst estimates. This steady growth underpins the long-term investment thesis. You can learn more about this focus on stability and community banking in their Mission Statement, Vision, & Core Values of FS Bancorp, Inc. (FSBW).

Strategies: Long-Term Holding and Value Investing

The primary strategies at play here are long-term holding and value investing. The institutional investors, particularly those running small-cap value funds, are not looking for a quick flip; they are looking for compounding returns over years.

Here's the quick math on why value investors dominate:

Short-term trading is less prevalent. While some hedge funds like Two Sigma Investments LP are involved, their presence is often passive or part of a quantitative strategy that hedges against other regional banks. The core strategy is simple: buy an undervalued bank with a strong local market position in Washington, a healthy balance sheet (total deposits are up to $2.69 billion), and a management team committed to returning cash via dividends and buybacks.

What this estimate hides is the risk of a regional bank. Still, the long-term holders are betting that the bank's solid regulatory capital ratios-Tier 1 leverage capital was 11.2% at June 30, 2025-will keep it insulated from the broader sector pressures.

Next Step: Review the Q4 2025 earnings guidance for any shifts in management's capital allocation strategy.

Institutional Ownership and Major Shareholders of FS Bancorp, Inc. (FSBW)

If you are looking at FS Bancorp, Inc. (FSBW), the immediate takeaway is that this is a bank stock largely controlled by professional money managers. About 63.88% of the company's stock is held by institutions, which is a strong signal of market trust and a belief in the long-term value of the underlying business model.

This high institutional ownership-totaling 6,319,725 shares as of the most recent reporting period-means that the stock's price movements and company strategy are defintely influenced by a relatively small group of large, sophisticated investors. This is not a stock driven by retail chatter; it's a game of institutional conviction.

Who Holds the Largest Stakes in FS Bancorp, Inc.?

The top institutional shareholders of FS Bancorp, Inc. are a mix of large index fund managers and active value-focused firms. The presence of both passive giants and active managers suggests a dual view: a necessary inclusion in small-cap indices and a deliberate choice by those seeking undervalued regional bank stocks. As of the 2025 fiscal year data, the top holders are clear:

• T. Rowe Price Group, Inc.: Holds the largest stake with approximately 13.80% of the company, equating to 1,025,482 shares as of June 29, 2025.
• The Vanguard Group, Inc.: A passive behemoth holding about 5.20% of the stock.
• BlackRock, Inc.: Another index-fund powerhouse, consistently a top holder.
• Dimensional Fund Advisors Lp: Known for its quantitative, factor-based investment approach.
• AllianceBernstein L.P.: A significant active manager with a reported 1.92% stake.

Here's the quick math: with the stock trading around $39.01 per share as of late October 2025, the total value of institutional long positions is roughly $203.125 million USD.

Recent Shifts in Institutional Ownership

The institutional picture isn't static; it's a constant tug-of-war between buyers and sellers. Overall, the trend in the most recent quarter shows a slight cooling of enthusiasm. Institutional shares (long) decreased by 0.27 million shares, representing a change of -4.04% quarter-over-quarter. Still, a few large players are making notable moves.

For example, in recent November 2025 filings, we saw some significant activity that tells a story of divergent strategies:

• BNP Paribas Financial Markets dramatically increased its position by +104.3%, signaling a strong bullish conviction on the near-term outlook.
• Bridgeway Capital Management LLC trimmed its stake by -5.5%, which suggests a small reduction in exposure, perhaps due to rebalancing or a slightly cautious outlook.
• A much smaller player, Russell Investments Group Ltd., saw a massive percentage increase of +1,852.8%, though this likely started from a minimal base.

This tells me that while the overall institutional ownership is high, there's no consensus on the near-term direction, which is typical for a regional bank stock in this environment. You can dig deeper into the company's financial journey and ownership structure here: FS Bancorp, Inc. (FSBW): History, Ownership, Mission, How It Works & Makes Money.

The Impact of Major Investors on FSBW's Strategy

These large institutional investors play a critical role; they act as a check on management and often push for capital allocation decisions that enhance shareholder value. When a company like FS Bancorp, Inc. has over 60% of its stock held by institutions, the board and executive team have to pay close attention to what the big money wants.

We saw a clear example of this focus in October 2025 when the company authorized an additional share repurchase program of up to $5.0 million. Share buybacks are a direct way to return capital to shareholders, boosting earnings per share (EPS) and demonstrating a commitment to value-a move that institutional investors defintely appreciate.

However, institutional sentiment is also tied to performance. The recent Q3 2025 earnings report showed a net income decline to $9.2 million from $10.3 million in the prior year, despite the bank beating analyst EPS estimates of $1.08 with an actual $1.18 per diluted share. This mixed financial result-stronger EPS but lower net income-creates the kind of uncertainty that leads to the divergent buying and selling we're seeing in the ownership data. The big investors are essentially betting on whether the bank can manage its net interest margins and loan growth in the face of a challenging economic backdrop.

Key Investors and Their Impact on FS Bancorp, Inc. (FSBW)

You're looking at FS Bancorp, Inc. (FSBW) and wondering who's pulling the strings, and honestly, the story is a classic regional bank tale: institutional money holds the reins. Over 63% of the company's stock is held by institutions, with individual insiders owning about 13.28%, meaning the big funds defintely drive the stock's daily momentum.

The core takeaway is that the largest investors are passive giants like T. Rowe Price and Vanguard, so their influence is less about activist demands and more about long-term capital stability and governance oversight. This structure keeps the focus on core banking performance and capital management, which is exactly what a regional bank needs to succeed.

The Institutional Giants: Who Owns the Largest Slice?

The top shareholders of FS Bancorp are a who's who of major asset managers, funds that generally take a long-term, passive stance. T. Rowe Price Investment Management, Inc. is the undisputed leader, holding a substantial chunk of the company. Their presence signals a vote of confidence in the bank's small-cap value proposition.

Here's the quick math on the top institutional holders as of mid-2025, which collectively own a significant portion of the float:

• T. Rowe Price Investment Management, Inc.: Holds 1,025,482 shares, representing about 13.61% of the outstanding stock.
• BlackRock, Inc.: A major index fund player, holding 452,802 shares, or approximately 5.88% ownership.
• Dimensional Fund Advisors LP: Holds 416,740 shares, equating to roughly 5.41% of the company.
• The Vanguard Group, Inc.: Another index fund titan, holding 399,876 shares, or about 5.19% ownership.

These firms are not activist investors (those that seek to dramatically change management or strategy), but their sheer size gives them immense power. They're looking for consistent performance and good capital stewardship, not a boardroom brawl.

Investor Influence: Stability Over Activism

Because the largest holders like BlackRock and Vanguard are often running index or broad-market funds, their influence is typically exerted through proxy voting on issues like executive compensation and board structure. They want to see a stable, well-governed bank. This focus aligns with the company's stated Mission Statement, Vision, & Core Values of FS Bancorp, Inc. (FSBW).

The market capitalization of FS Bancorp is around $292.54 million, putting it firmly in the small-cap regional bank category. This size means that even a modest change in position by a major fund can have a noticeable impact on the stock price. The best way management can influence these large, passive holders is through consistent execution, like managing their Net Interest Margin (NIM) effectively and returning capital to shareholders.

Recent Moves: Insider Selling and a Share Buyback

Recent activity in 2025 shows a mixed picture of insider sentiment coupled with a clear corporate action to boost shareholder value. This is a classic dynamic: management selling shares for personal reasons while the company buys them back to signal undervaluation.

In August 2025, insider selling was notable, with Joseph Adams, the CEO of the bank's subsidiary 1st Security Bank, selling a total of 37,500 shares across three transactions for a combined value of over $1.5 million. More recently, in November 2025, Director Marina Cofer-Wildsmith sold 3,824 shares for about $152,960 at a price of around $40 per share.

Still, the company is fighting back against any potential negative sentiment from insider selling with strong capital management moves. In October 2025, the Board authorized an additional $5 million share repurchase program. This is a direct, tangible action to support the stock price and enhance shareholder value, which is exactly what institutional investors want to see from a well-capitalized bank.

The small, recent purchase of 20 shares by EVP Kelli Nielsen in early November 2025 under an employee plan is a minor counterpoint, showing some internal buying, but the corporate buyback is the real signal.

Next Step: Portfolio Managers: Review the recent $5 million buyback authorization against the current trading volume to estimate its potential impact on price support over the next two quarters.

Market Impact and Investor Sentiment

The investor sentiment toward FS Bancorp, Inc. (FSBW) is best described as cautiously optimistic, landing squarely in the Moderate Buy category among the few analysts covering the stock. This is a classic community banking story where the fundamentals look decent, but the macro environment keeps a lid on excitement.

You're seeing a split signal right now. On one hand, the short interest-the percentage of shares sold short-has recently decreased by 6.09%, which defintely suggests that bearish investors are backing off and sentiment is improving. But, you have to look at the insider activity for a reality check. In the last three months, insiders sold over $1.04 million worth of stock, with zero insider purchases. That's a significant signal, telling you that the people who know the company best are taking money off the table, even as the company authorizes new share repurchases.

• Insider selling is a clear red flag.
• Short sellers are getting less bearish.

Recent Market Reactions: The Q3 2025 Mixed Signal

The market's response to FS Bancorp, Inc.'s recent news has been mixed, reflecting the nuanced financial picture. The stock was trading at approximately $39.86 as of mid-November 2025, which is a decline of about 5.0% since the start of the year. This is the reality of regional banking in a high-rate environment: growth is tough.

The third-quarter 2025 earnings report was a perfect example of this mixed bag. FS Bancorp, Inc. reported earnings per share (EPS) of $1.18, which comfortably beat the consensus estimate of $1.08. That's a win for efficiency. But, net income for the quarter was $9.2 million, down from $10.3 million in the same period last year. The market tends to focus on the net income decline, despite the EPS beat, which is why the stock price hasn't seen a massive breakout.

To counteract this, the Board authorized an additional $5.0 million share repurchase program in October 2025. This is a move to support the stock price and boost shareholder value, a common tactic when the price-to-book value (P/B) is attractive-FS Bancorp, Inc.'s P/B is currently below 1.0, at 0.98. You can see their long-term commitment to value in their Mission Statement, Vision, & Core Values of FS Bancorp, Inc. (FSBW).

Analyst Perspectives and Who's Buying

The institutional ownership of FS Bancorp, Inc. stands at a robust 63.88%, which is typical for a stable regional bank. These aren't retail traders chasing quick gains; these are long-term asset managers buying for stability and value. The analysts covering the stock have set a 12-month average price target of $41.00, suggesting a modest upside of about 5.43% from the current price, which aligns with the 'Moderate Buy' rating.

The 'who's buying' list is dominated by major asset managers and value-focused funds. They are buying for the stability of the balance sheet-total deposits hit $2.69 billion in Q3 2025, an increase of 10.7% year-over-year-and the attractive valuation metrics. Here's the quick math: a bank trading below book value ($40.43 per share in Q3 2025) with a consistent dividend is a value play, period.

The top institutional shareholders, as of the latest filings, are primarily passive and active funds looking for small-cap value exposure:

These large holders aren't looking for a double overnight. They are buying a bank with a trailing twelve-month P/E ratio of 9.52, which is significantly less expensive than the Finance sector average of about 21.29. They see a solid, undervalued regional bank that pays a dividend and is actively buying back stock. That's the core of the investment thesis here.