FS Bancorp, Inc. Reports Third Quarter Net Income of $4.9 Million or $0.63 Per Diluted Share and Declares 55th Consecutive Quarterly Cash Dividend

MOUNTLAKE TERRACE, Wash., Oct. 21, 2026 (GLOBE NEWSWIRE) — FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2026 third quarter net income of $4.9 million, or $0.63 per diluted share, compared to $7.9 million, or $1.04 per diluted share, for the prior quarter, and $9.2 million, or $1.18 per diluted share, for the comparable quarter one year ago. For the nine months ended September 30, 2026, net income was $20.7 million, or $2.62 per diluted share, compared to net income of $24.9 million, or $3.18 per diluted share, for the comparable nine-month period in 2025.

“We are excited to work with the Pacific West Bank team members to further expand the deposit and loan opportunities in the greater Portland, Oregon and Vancouver, Washington markets, and we appreciate all of the hard work that went into the successful systems integration, effective October 5, 2026, through the collaboration of our newly combined teams,” stated Matthew Mullet, President and CEO of FS Bancorp, Inc. “We are also pleased to announce that our Board of Directors has approved our 55th consecutive quarterly cash dividend of $0.29 per common share, demonstrating our commitment to returning capital to long-term shareholders. The cash dividend will be paid on November 20, 2026, to shareholders of record as of November 6, 2026,” concluded Mullet.

Recent Events

At the close of business on August 19, 2026, the Company completed its acquisition of Pacific West Bancorp (“Pacific West”) and its wholly-owned subsidiary, Pacific West Bank. Pacific West shareholders received 430,149 shares of FS Bancorp common stock and $16.9 million in cash, for a total consideration of approximately $35.3 million based on the closing price of FS Bancorp common stock on the acquisition date.

The acquisition was accounted for using the acquisition method of accounting. Accordingly, the purchase price was allocated to the assets acquired, including identifiable intangible assets, and the liabilities assumed, based on their estimated fair values as of the acquisition date. These fair values represent management’s best estimates based on information available and facts and circumstances in existence on the acquisition date and are subject to adjustment during a measurement period not to exceed one year from the acquisition date.

The Company acquired assets with a fair value of $476.5 million, including loans of $256.5 million and a core deposit intangible of $5.3 million, and assumed liabilities of $439.5 million, including deposits of $435.6 million. In accordance with Accounting Standards Update (“ASU”) 2025-08, which the Company early adopted effective January 1, 2026, the allowance for credit losses on acquired loans of $3.9 million was established at the acquisition date through a gross-up of the loans’ amortized cost rather than through the provision for credit losses. Because the fair value of net assets acquired exceeded the consideration paid, the Company recognized a preliminary bargain purchase gain of $1.7 million in noninterest income, which is not taxable. The Company incurred $2.5 million in merger-related expenses during the quarter.

2026 Third Quarter Highlights

Net income totaled $4.9 million for the third quarter of 2026, compared to $7.9 million for the previous quarter, and $9.2 million for the comparable quarter one year ago;
Total deposits increased $418.3 million, or 17.1%, to $2.87 billion at September 30, 2026, compared to $2.45 billion at June 30, 2026, primarily reflecting the Pacific West Bancorp Acquisition (“Pacific West Acquisition”) which had $442.8 million in deposits at September 30, 2026. Transactional deposits increased $377.6 million during the quarter, of which $351.6 million was attributable to the Pacific West Acquisition. Compared to September 30, 2025, total deposits increased $180.7 million, or 6.7%;
Loans receivable, net increased $379.1 million to $3.01 billion at September 30, 2026, from $2.63 billion at June 30, 2026, and increased $408.5 million from $2.60 billion at September 30, 2025. The increases from both prior periods reflected the Pacific West Acquisition, which included $252.7 million in loans that remained outstanding at September 30, 2026, and $131.7 million of loan growth during the third quarter;
The Commercial and Consumer Banking segment reported net income of $5.7 million for the third quarter of 2026, compared to $6.8 million for the prior quarter and $8.4 million for the third quarter of 2025. The Home Lending segment reported a net loss of $806,000 for the third quarter of 2026 due to rising interest rates, compared to net income of $1.1 million for the prior quarter, and $775,000 for the third quarter of 2025;
Repurchased 44,664 shares of the Company’s common stock in the open market for $1.9 million in the third quarter of 2026, at an average price of $43.41 per share;
Book value per share decreased $0.52, or 1.2%, to $43.05 at September 30, 2026, compared to $43.57 at June 30, 2026, and increased $2.62, or 6.5%, from $40.43 at September 30, 2025. Tangible book value per share (non-GAAP financial measure) decreased $1.00 to $40.84 at September 30, 2026, compared to $41.84 at June 30, 2026, and increased $2.41 from $38.43 at September 30, 2025. See, “Non-GAAP Financial Measures;”
Regulatory capital ratios at the Bank were 12.6% for total risk-based capital and 11.2% for Tier 1 leverage capital at September 30, 2026, compared to 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital at June 30, 2026. The Bank remained well capitalized under applicable regulatory capital standards.

Segment Reporting

The Company operates through two reportable segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment also manages the Bank’s investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.

The tables below provide a summary of segment reporting at or for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands):

	At or For the Three Months Ended September 30, 2026
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	31,888		$	3,798		$	35,686
Provision for credit losses		(2,855	)		(607	)		(3,462	)
Noninterest income ⁽²⁾		4,776			1,400			6,176
Noninterest expense ⁽³⁾		(26,703	)		(5,611	)		(32,314	)
Income before provision for income taxes		7,106			(1,020	)		6,086
(Provision) benefit for income taxes		(1,374	)		214			(1,160	)
Net income (loss)	$	5,732		$	(806	)	$	4,926
Total average assets for period ended	$	2,685,235		$	718,565		$	3,403,800
Full-time employees (“FTEs”)		513			113			626

	At or For the Three Months Ended September 30, 2025
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income⁽¹⁾	$	30,810		$	2,880		$	33,690
Provision for credit losses		(2,150	)		(159	)		(2,309	)
Noninterest income⁽²⁾		2,079			3,515			5,594
Noninterest expense⁽³⁾		(20,134	)		(5,254	)		(25,388	)
Income before provision for income taxes		10,605			982			11,587
Provision for income taxes		(2,203	)		(207	)		(2,410	)
Net income	$	8,402		$	775		$	9,177
Total average assets for period ended	$	2,523,410		$	662,047		$	3,185,457
FTEs		460			115			575

	At or For the Nine Months Ended September 30, 2026
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	91,102		$	9,777		$	100,879
Provision for credit losses		(7,697	)		(935	)		(8,632	)
Noninterest income ⁽²⁾		9,980			7,747			17,727
Noninterest expense ⁽³⁾		(68,978	)		(14,960	)		(83,938	)
Income before provision for income taxes		24,407			1,629			26,036
Provision for income taxes		(5,136	)		(208	)		(5,344	)
Net income	$	19,271		$	1,421		$	20,692
Total average assets for period ended	$	2,580,513		$	682,123		$	3,262,636
FTEs		513			113			626

	At or For the Nine Months Ended September 30, 2025
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	88,397		$	8,387		$	96,784
Provision for credit losses		(5,320	)		(602	)		(5,922	)
Noninterest income ⁽²⁾		6,621			9,269			15,890
Noninterest expense ⁽³⁾		(60,624	)		(15,321	)		(75,945	)
Income before provision for income taxes		29,074			1,733			30,807
Provision for income taxes		(5,517	)		(364	)		(5,881	)
Net income	$	23,557		$	1,369		$	24,926
Total average assets for period ended	$	2,468,543		$	643,460		$	3,112,003
FTEs		460			115			575

________________________

(1)		Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.
(2)		Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and nine months ended September 30, 2026, the Company recorded a net decrease of $742,000 and $799,000 in fair value, compared to a net increase of $203,000 and $469,000 in fair value for the three and nine months ended September 30, 2025, respectively. As of September 30, 2026 and 2025, there were $13.9 million and $12.8 million, respectively, in residential mortgage loans recorded at fair value, which had previously been transferred from loans held for sale to loans held for investment.
(3)		Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and nine months ended September 30, 2026 and 2025, the Home Lending segment included allocated overhead expenses of $1.9 million and $5.5 million, compared to $1.8 million and $5.5 million, respectively.

Asset Summary

The following table summarizes the composition of total assets, including the dollar and percentage changes from the linked quarter and prior-year period.

ASSETS							Linked Quarter						Prior Year
(Dollars in thousands)	September 30,		June 30,		September 30,		Change						Quarter Change
	2026		2026		2025		$			%			$			%
Cash and due from banks	$	29,022	$	12,835	$	12,391	$	16,187			126	%	$	16,631			134	%
Interest-bearing deposits at other financial institutions		14,925		16,875		48,889		(1,950	)		(12	)		(33,964	)		(69	)
Total cash and cash equivalents		43,947		29,710		61,280		14,237			48			(17,333	)		(28	)
Securities available-for-sale, at fair value		342,185		269,460		311,695		72,725			27			30,490			10
Securities held-to-maturity, net		37,734		34,845		31,386		2,889			8			6,348			20
Loans held for sale, at fair value		22,820		30,548		38,579		(7,728	)		(25	)		(15,759	)		(41	)
Loans receivable, net		3,008,129		2,628,992		2,599,601		379,137			14			408,528			16
Accrued interest receivable		16,901		14,263		15,122		2,638			18			1,779			12
Premises and equipment, net		49,148		43,455		32,444		5,693			13			16,704			51
Long-lived assets held for sale		3,258		3,258		—		—			—			3,258		NM
Operating lease right-of-use		7,799		6,655		6,832		1,144			17			967			14
Federal Home Loan Bank stock, at cost		13,073		14,420		7,975		(1,347	)		(9	)		5,098			64
Deferred tax asset, net		9,469		6,441		6,767		3,028			47			2,702			40
Bank owned life insurance (“BOLI”), net		41,857		36,771		38,531		5,086			14			3,326			9
MSRs, held at the lower of cost or fair value		8,887		8,912		8,506		(25	)		—			381			4
Goodwill		3,592		3,592		3,592		—			—			—			—
Core deposit intangible, net		13,525		9,052		11,284		4,473			49			2,241			20
Other assets		54,327		38,706		35,231		15,621			40			19,096			54
TOTAL ASSETS	$	3,676,651	$	3,179,080	$	3,208,825	$	497,571			16	%	$	467,826			15	%

The following table summarizes the composition of the Company’s loan portfolio by loan category as of September 30, 2026, compared to June 30, 2026 and September 30, 2025, including the dollar changes from the linked quarter and prior year period.

																						Prior
LOAN PORTFOLIO																			Linked			Year
(Dollars in thousands)																			Quarter			Quarter
COMMERCIAL REAL ESTATE	September 30, 2026						June 30, 2026						September 30, 2025						$			$
(“CRE”) LOANS	Amount			Percent			Amount			Percent			Amount			Percent			Change			Change
CRE owner occupied	$	224,764			7.3	%	$	184,136			6.9	%	$	170,714			6.5	%	$	40,628		$	54,050
CRE non-owner occupied		298,385			9.8			188,258			7.1			172,713			6.6			110,127			125,672
Commercial and speculative construction and development		393,005			12.9			370,459			13.9			326,684			12.4			22,546			66,321
Multi-family		297,955			9.8			262,137			9.9			262,578			10.0			35,818			35,377
Total CRE loans		1,214,109			39.8			1,004,990			37.8			932,689			35.5			209,119			281,420

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		758,537			24.9			660,518			24.8			629,712			23.9			98,019			128,825
Home equity		93,020			3.1			88,214			3.3			86,895			3.3			4,806			6,125
Residential custom construction		56,677			1.9			44,765			1.7			53,296			2.0			11,912			3,381
Total residential real estate loans		908,234			29.9			793,497			29.8			769,903			29.2			114,737			138,331

CONSUMER LOANS
Indirect home improvement		493,505			16.2			502,151			18.9			527,597			20.1			(8,646	)		(34,092	)
Marine		68,838			2.3			66,941			2.5			70,220			2.7			1,897			(1,382	)
Other consumer		21,714			0.7			4,111			0.1			2,962			0.1			17,603			18,752
Total consumer loans		584,057			19.2			573,203			21.5			600,779			22.9			10,854			(16,722	)

COMMERCIAL BUSINESS LOANS
Commercial and industrial (“C&I”)		322,572			10.6			281,181			10.6			311,173			11.8			41,391			11,399
Warehouse lending		15,620			0.5			7,286			0.3			15,113			0.6			8,334			507
Total commercial business loans		338,192			11.1			288,467			10.9			326,286			12.4			49,725			11,906
Total loans receivable, gross		3,044,592			100.0	%		2,660,157			100.0	%		2,629,657			100.0	%		384,435			414,935

Allowance for credit losses (“ACL”) on loans		(36,463	)					(31,165	)					(30,056	)					(5,298	)		(6,407	)
Total loans receivable, net	$	3,008,129					$	2,628,992					$	2,599,601					$	379,137		$	408,528

Loan growth during the three months ended September 30, 2026, reflected the Pacific West Acquisition, which included $252.7 million in loans that remained outstanding at September 30, 2026, as well as $131.5 million of loan growth excluding the acquired loans. Excluding the impact of the acquisition, loan growth was primarily concentrated in non-owner occupied commercial real estate and one-to-four family residential loans, which increased $29.8 million and $76.6 million, respectively, from June 30, 2026. Growth in one-to-four family residential loans included the purchase of $36.7 million of adjustable-rate residential mortgage loans.

The following table presents information on CRE loans scheduled to mature or reprice within the next two years, excluding loans that reprice automatically in connection with changes in the prime rate.

																			Current
(Dollars in																			Weighted
thousands)	For the Quarter Ended																		Average
CRE by type:	Dec 31, 2026		Mar 31, 2027		Jun 30, 2027		Sep 30, 2027		Dec 31, 2027		Mar 31, 2028		Jun 30, 2028		Sep 30, 2028		Total		Rate
Apartment	$	54,457	$	10,183	$	5,598	$	7,892	$	14,007	$	16,719	$	382	$	3,874	$	113,112		5.74	%
Education/Worship		—		—		—		2,345		—		—		—		5,822		8,167		5.82	%
Industrial		10,122		6,038		3,608		6,277		5,290		3,155		7,261		7,588		49,339		5.33	%
Mixed use		768		2,369		—		413		3,192		442		—		406		7,590		5.77	%
Office		21,251		3,499		4,282		8,088		3,585		300		3,924		1,102		46,031		5.41	%
Other		2,681		269		1,713		666		24		—		853		8,468		14,674		6.11	%
Retail		3,272		3,737		5,753		7,326		—		14		432		—		20,534		4.73	%
Senior housing and assisted living		—		—		1,327		—		—		3,002		—		—		4,329		6.83	%
Total	$	92,551	$	26,095	$	22,281	$	33,007	$	26,098	$	23,632	$	12,852	$	27,260	$	263,776		5.57	%

The composition of CRE loans at the dates indicated were as follows:

(Dollars in thousands)
CRE by Type:	September 30, 2026		June 30, 2026		September 30, 2025
CRE non-owner occupied:
Office	$63,682			$43,705	$42,537
Retail		56,375		42,042		36,827
Hospitality/restaurant		51,126		24,499		25,798
Industrial		44,576		20,824		14,352
Mixed use		38,154		18,489		18,663
Self-storage		21,089		18,767		19,001
Senior housing/assisted living		10,818		6,882		7,390
Other		10,220		9,189		3,632
Education/worship		2,345		2,359		2,441
Land		—		1,502		2,072
Total CRE non-owner occupied		298,385		188,258		172,713
CRE owner occupied:
Industrial		93,186		79,137		77,059
Office		44,588		31,862		31,981
Retail		30,272		27,433		17,399
Hospitality/restaurant		10,851		7,622		7,675
Education/worship		10,727		3,367		5,516
Other		10,654		10,539		10,521
Mixed use		9,720		9,239		4,622
Automobile related		6,697		6,745		7,164
Car wash		4,359		4,376		4,430
Agriculture		3,710		3,816		4,347
Total CRE owner occupied		224,764		184,136		170,714
Total		$523,149		$372,394		$343,427

The composition of construction loans at the dates indicated were as follows:

(Dollars in thousands)	September 30, 2026					June 30, 2026					September 30, 2025
Construction Types:	Amount		Percent			Amount		Percent			Amount		Percent
Commercial construction – self storage	$	25,748		5.7	%	$	25,234		6.1	%	$	18,701		4.9	%
Commercial construction – hotel		15,299		3.4			13,463		3.3			6,147		1.6
Commercial construction – retail		13,486		3.0			8,447		2.0			8,445		2.2
Commercial construction – office		7,164		1.6			7,164		1.7			9,250		2.4
Commercial construction – lots		2,945		0.7			—		—			—		—
Commercial construction – industrial		1,845		0.4			—		—			—		—
Commercial construction – auto service facility		1,465		0.3			—		—			—		—
Multi-family		52,127		11.6			46,186		11.1			29,751		7.8
Custom construction – single family residential and single family manufactured residential		43,921		9.8			33,944		8.2			44,299		11.7
Custom construction – land, lot and acquisition and development		12,766		2.8			10,821		2.6			8,998		2.4
Speculative residential construction – vertical		230,036		51.2			225,992		54.4			217,821		57.3
Speculative residential construction – land, lot and acquisition and development		42,890		9.5			43,973		10.6			36,668		9.7
Total	$	449,692		100.0	%	$	415,224		100.0	%	$	380,080		100.0	%

Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows:

(Dollars in																						Prior Year
thousands)	For the Three Months Ended															Linked Quarter						Quarter
	September 30, 2026					June 30, 2026					September 30, 2025					$			%			$		%
	Amount		Percent			Amount		Percent			Amount		Percent			Change			Change			Change		Change
Purchase	$	179,810		84.3	%	$	163,100		79.2	%	$	155,920		88.8	%	$	16,710			10.2		$	23,890		15.3	%
Refinance		33,367		15.7			42,741		20.8			19,714		11.2			(9,374	)		(21.9	)		13,653		69.3	%
Total	$	213,177		100.0	%	$	205,841		100.0	%	$	175,634		100.0	%	$	7,336			3.6		$	37,543		21.4	%

(Dollars in thousands)	For the Nine Months Ended September 30,
	2026					2025
	Amount		Percent			Amount		Percent			$ Change		% Change
Purchase	$	482,012		76.8	%	$	446,631		85.8	%	$	35,381		7.9	%
Refinance		145,438		23.2			73,697		14.2			71,741		97.3	%
Total	$	627,450		100.0	%	$	520,328		100.0	%	$	107,122		20.6	%

During the quarter ended September 30, 2026, the Company sold $122.9 million of one-to-four-family loans, compared to $156.1 million during the previous quarter and $156.4 million during the same quarter one year ago. Gross margins on home loan sales increased to 3.55% for the quarter ended September 30, 2026, compared to 2.98% in the previous quarter and increased from 3.14% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.

Liabilities and Equity Summary

The following table summarizes the components and changes in deposits, borrowings, equity, and book value per common share at the dates indicated, including the dollar changes from the linked quarter and prior year period.

(Dollars in thousands)																Linked			Prior Year
DEPOSITS	September 30, 2026					June 30, 2026					September 30, 2025					Quarter			Quarter
Transactional deposits:	Amount		Percent			Amount		Percent			Amount		Percent			$ Change			$ Change
Noninterest-bearing checking	$	738,715		25.9	%	$	629,799		25.7	%	$	648,661		24.2	%	$	108,916		$	90,054
Interest-bearing checking		293,069		10.2			209,721		8.6			199,527		7.4			83,348			93,542
Fintech partner deposits ⁽¹⁾		177,463		6.2			—		—			—		—			177,463			177,463
Escrow accounts related to mortgages serviced ⁽²⁾		19,976		0.7			12,057		0.5			17,192		0.6			7,919			2,784
Subtotal		1,229,223		43.0			851,577		34.8			865,380		32.2			377,646			363,843
Savings and money market:
Savings		181,400		6.3			173,092		7.1			167,006		6.2			8,308			14,394
Money market		433,851		15.1			375,833		15.3			354,082		13.2			58,018			79,769
Subtotal		615,251		21.4			548,925		22.4			521,088		19.4			66,326			94,163
Certificates of deposit:
CDs		946,667		33.0			922,022		37.6			930,371		34.6			24,645			16,296
Brokered Deposits
Non-maturity brokered deposits		1,003		—			4,027		0.2			251		—			(3,024	)		752
Maturity brokered deposits		75,060		2.6			122,332		5.0			369,403		13.8			(47,272	)		(294,343	)
Subtotal		76,063		2.6			126,359		5.2			369,654		13.8			(50,296	)		(293,591	)
Total deposits	$	2,867,204		100.0	%	$	2,448,883		100.0	%	$	2,686,493		100.0	%	$	418,321		$	180,711
Borrowings⁽³⁾	$	373,500				$	324,500				$	129,305				$	49,000		$	244,195
Stockholders’ equity	$	333,206				$	318,960				$	300,511				$	14,246		$	32,695
Book value per common share	$	43.05				$	43.57				$	40.43				$	(0.52	)	$	2.62

_____________

(1)			Fintech partner deposits are deposits associated with the Bank’s Banking-as-a-Service relationships with financial technology companies.
(2)			Primarily noninterest-bearing accounts based on applicable state law.
(3)			Comprised of FHLB advances and Federal Reserve Bank borrowings.

The Company acquired its fintech partner deposits through the acquisition of Pacific West Acquisition. Through these relationships, the Company provides deposit and related banking services to fintech partners and their end users.

Brokered deposits declined from the prior quarter, partially offset by increased borrowings, which offered a slightly lower cost of funds.

In the table above, the increase in stockholders’ equity from June 30, 2026, to September 30, 2026, was primarily due to $18.4 million in common stock issued in the Pacific West Acquisition, and net income of $4.9 million. Changes in the fair value of available‑for‑sale securities and interest rate swap cash flow hedges decreased accumulated other comprehensive income (“AOCI”) by $5.3 million, net of tax, reflecting changes in market interest rates during the quarter. The increase in stockholders’ equity was partially offset by $1.9 million in open market share repurchases and $2.2 million in cash dividends paid.

The Bank is considered “well capitalized” under the capital requirement established by the Federal Deposit Insurance Corporation (“FDIC”) and the Company exceeded all regulatory capital requirements. At September 30, 2026, capital ratios presented for the Bank and the Company were as follows:

	At September 30, 2026
	Bank		Company
Total risk-based capital (to risk-weighted assets)	12.61	%	12.35	%
Tier 1 leverage capital (to average assets)	11.24	%	9.89	%
CET 1 capital (to risk-weighted assets)	11.44	%	10.07	%

Credit Quality

The following tables summarize changes in the ACL on loans for the periods indicated and the balances of nonperforming and classified loans at the dates indicated.

	For the three months ended									Linked			Prior Year
ACL ON LOANS	Sep 30,			Jun 30,			Sep 30,			Quarter			Quarter
(Dollars in thousands)	2026			2026			2025			$ Change			$ Change
Beginning ACL balance	$	31,165		$	32,443		$	32,189		$	(1,278	)	$	(1,024	)
Provision		2,953			2,559			1,851			394			1,102
Merger day 1 ACL⁽¹⁾		3,898			—			—			3,898			3,898
Charge-offs
Indirect		(1,926	)		(2,067	)		(1,941	)		141			15
Marine		(186	)		(7	)		(55	)		(179	)		(131	)
Other		(22	)		(49	)		(49	)		27			27
Commercial and speculative construction and development		—			(2,277	)		(2,299	)		2,277			2,299
Commercial business		(1	)		(39	)		—			38			(1	)
Subtotal		(2,135	)		(4,439	)		(4,344	)		2,304			2,209
Recoveries
Indirect		511			584			323			(73	)		188
Marine		17			3			16			14			1
Other		4			15			12			(11	)		(8	)
Commercial business		50			—			9			50			41
Subtotal		582			602			360			(20	)		222
Ending ACL balance	$	36,463		$	31,165		$	30,056		$	5,298		$	6,407

(1)			The Company early adopted ASU 2025-08. The guidance was applied prospectively to qualifying purchased seasoned loans acquired in connection with the Pacific West Acquisition.

NONPERFORMING LOANS							Linked			Prior Year
(Dollars in thousands)	Sep 30,		Jun 30,		Sep 30,		Quarter			Quarter
CRE LOANS	2026		2026		2025		$ Change			$ Change
CRE owner occupied	$	3,542	$	614	$	2,047	$	2,928		$	1,495
CRE non-owner occupied		5,623		—		—		5,623			5,623
Commercial and speculative construction and development		7,824		7,164		9,150		660			(1,326	)
Multi-family		130		—		—		130			130
Total CRE loans		17,119		7,778		11,197		9,341			5,922

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		2,327		1,973		1,799		354			528
Home equity		520		472		317		48			203
Total residential real estate loans		2,847		2,445		2,116		402			731

CONSUMER LOANS
Indirect home improvement		4,421		4,799		3,802		(378	)		619
Marine		540		606		620		(66	)		(80	)
Other consumer		15		19		40		(4	)		(25	)
Total consumer loans		4,976		5,424		4,462		(448	)		514

COMMERCIAL BUSINESS LOANS
C&I		199		—		600		199			(401	)
Total nonperforming loans	$	25,141	$	15,647	$	18,375	$	9,494		$	6,766

The increase in nonperforming loans at September 30, 2026, compared to June 30, 2026, was primarily driven by $8.6 million of nonaccrual loans acquired as part of the Pacific West Acquisition. The acquired loans were on nonaccrual status as of the acquisition date and booked at fair market value under acquisition accounting.

CLASSIFIED LOANS							Linked			Prior Year
(Dollars in thousands)	Sep 30,		Jun 30,		Sep 30,		Quarter			Quarter
CRE LOANS	2026		2026		2025		$ Change			$ Change
CRE owner occupied	$	4,224	$	1,212	$	3,080	$	3,012		$	1,144
CRE non-owner occupied		9,952		3,024		2,435		6,928			7,517
Commercial and speculative construction and development		7,824		7,164		9,150		660			(1,326	)
Multi-family		3,307		—		—		3,307			3,307
Total CRE loans		25,307		11,400		14,665		13,907			10,642

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		4,140		3,794		3,646		346			494
Home equity		520		472		317		48			203
Total residential real estate loans		4,660		4,266		3,963		394			697

CONSUMER LOANS
Indirect home improvement		4,421		4,799		3,802		(378	)		619
Marine		540		606		620		(66	)		(80	)
Other consumer		15		19		40		(4	)		(25	)
Total consumer loans		4,976		5,424		4,462		(448	)		514

COMMERCIAL BUSINESS LOANS
C&I		3,469		3,889		3,963		(420	)		(494	)
Total classified loans	$	38,412	$	24,979	$	27,053	$	13,433		$	11,359

The increase in classified loans at September 30, 2026, compared to June 30, 2026, was primarily driven by $12.5 million of classified loans acquired as part of the Pacific West Acquisition.

Operating Results

Net interest income increased $2.0 million to $35.7 million for the three months ended September 30, 2026, from $33.7 million for the three months ended September 30, 2025. The increase was primarily a result of a $2.7 million increase in interest income on loans receivable, including interest income from loans acquired in the Pacific West Acquisition and the impact of net loan growth, partially offset by a $452,000 increase in total interest expense. The increase in total interest expense primarily reflected increases of $843,000 in interest expense on borrowings and $438,000 in interest expense on subordinated notes following their repricing at higher interest rates in 2026, partially offset by an $829,000 decrease in interest expense on deposits. The decrease in deposit interest expense reflected fluctuations in market interest rates and changes in the composition of deposits and borrowings, including the impact of balances acquired in the Pacific West Acquisition.

For the nine months ended September 30, 2026, net interest income increased $4.1 million to $100.9 million, from $96.8 million for the nine months ended September 30, 2025, with a $6.0 million increase in total interest income, partially offset by a $1.9 million increase in total interest expense. The $6.0 million increase in total interest income was primarily due to an increase of $6.6 million in interest income on loans receivable, including fees, primarily attributable to loan growth and the Pacific West Acquisition. The $1.9 million increase in total interest expense was primarily due to a $1.1 million increase in interest expense on subordinated notes, as noted above, as well as a $576,000 increase in interest expense on borrowings, and a $214,000 increase in interest expense on deposits.

Net interest margin (“NIM”) (annualized) was 4.36% for the three months ended September 30, 2026, compared to 4.37% for the same period in the prior year and 4.30% for the three months ended June 30, 2026. The six basis point increase from the prior quarter was primarily attributable to lower funding costs, including lower rates on certificates of deposit as those deposits repriced and the addition of the slightly lower-cost funding base acquired in the Pacific West Acquisition, as well as improved yields on the Company’s investment securities portfolio. Incremental interest accretion on loans acquired in the Pacific West Acquisition had an immaterial impact on NIM during the period.

The average total cost of funds, including noninterest-bearing checking accounts, decreased nine basis points to 2.32% for the three months ended September 30, 2026, from 2.41% for the three months ended September 30, 2025. The decrease primarily reflected lower rates on certificates of deposit as those deposits repriced, as well as the addition of slightly lower-cost funding from the Pacific West Acquisition. The average cost of funds decreased two basis points to 2.37% for the nine months ended September 30, 2026, from 2.39% for the nine months ended September 30, 2025.

For the three and nine months ended September 30, 2026, the provision for credit losses on loans was $3.0 million and $8.2 million, compared to $2.3 million and $5.9 million for the three and nine months ended September 30, 2025, respectively. The year-to-date increase in the provision primarily reflected an increase in net charge-offs of $649,000 and additional reserve activity related to a single nonperforming construction and development loan.

During the three months ended September 30, 2026, net charge-offs decreased $2.4 million to $1.6 million, compared to $4.0 million for the three months ended September 30, 2025. The decrease was primarily attributable to a $2.3 million charge-off on a commercial construction loan relationship recognized during the three months ended September 30, 2025.

During the nine months ended September 30, 2026, net charge-offs increased $649,000 to $7.5 million, compared to $6.9 million for the nine months ended September 30, 2025. The increase was primarily due to higher net charge-offs in the indirect home improvement portfolio.

Total noninterest income increased $582,000 to $6.2 million for the three months ended September 30, 2026, from $5.6 million for the three months ended September 30, 2025. The increase was primarily due to the bargain purchase gain of $1.7 million from the Pacific West Acquisition, primarily offset by a decrease of $971,000 in gain on sale of loans, reflecting market interest rates putting pressure on home loan sales, and a decrease of $231,000 in other noninterest income.

Total noninterest income remained relatively unchanged at $6.2 million for the three months ended September 30, 2026, compared to $6.2 million for the three months ended June 30, 2026, as the $1.7 million bargain purchase gain from the Pacific West Acquisition was largely offset by a $1.1 million decrease in gain on sale of loans, reflecting lower loan sale volume as higher mortgage rates reduced saleable production, and a $742,000 fair value decrease on first lien residential mortgage loans accounted for under the fair value option, primarily due to higher mortgage rates during the period.

Total noninterest income increased $1.8 million to $17.7 million for the nine months ended September 30, 2026, from $15.9 million for the nine months ended September 30, 2025. This increase was mainly the result of a $1.7 million bargain purchase gain from the Pacific West Acquisition, and a $322,000 increase in gain on sale of loans.

Total noninterest expense increased $6.9 million to $32.3 million for the three months ended September 30, 2026, compared to $25.4 million for the three months ended September 30, 2025. The $6.9 million increase was largely comprised of a $2.8 million increase in salaries and benefits, primarily reflecting an increase in full-time-equivalent employees resulting from the Pacific West Acquisition, as well as higher overall benefit costs, and $2.5 million in acquisition-related costs associated with the transaction, compared to no acquisition costs in the prior year.

Total noninterest expense increased $6.2 million to $32.3 million for the three months ended September 30, 2026, from $26.1 million for the three months ended June 30, 2026. The increase primarily reflected a $2.0 million increase in acquisition-related costs, a $1.6 million increase in salaries and benefits expense relating to the increase in full-time-equivalent employees from the Pacific West Acquisition and higher overall benefit costs, a $1.9 million increase in operations expense, and a $426,000 increase in data processing expense. The increases in operations and data processing expenses reflected additional operating costs associated with the Pacific West Acquisition, while the increase in operations expense also reflected certain expense adjustments recognized in the prior quarter.

Total noninterest expense increased $8.0 million to $83.9 million for the nine months ended September 30, 2026, from $75.9 million for the nine months ended September 30, 2025. This increase included a $4.6 million increase in salaries and benefits, a $3.2 million increase in acquisition costs, a $647,000 increase in occupancy, and a $573,000 increase in loan costs, partially offset by a $548,000 decrease in operations, primarily due to the same reasons mentioned above.

Merger-related activity during the third quarter was primarily focused on transaction completion and integration planning associated with the Pacific West Acquisition, including legal and professional fees, change-in-control costs, investment banking fees, and initial system integration activities related to the planned fourth quarter 2026 core processing conversion. Acquisition-related expenses, as noted above, include these integration costs as well as costs incurred to complete and consolidate the operations of the two companies. Management anticipates that the majority of the remaining acquisition-related expenses, consisting primarily of system integration and core conversion costs, will be recognized during the fourth quarter of 2026.

About FS Bancorp

FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 32 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver, as well as various communities in Oregon.

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements.

Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements, include, but are not limited to the following: adverse economic conditions in the Company’s local market areas, other markets in which the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, recessionary pressures or slowing economic growth; credit risks of lending activities, including changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for credit losses; changes in interest rate levels and volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could adversely affect the Company’s revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; inflationary pressures and related monetary and fiscal policy responses, and their impact on consumer and business behavior; geopolitical developments and international conflicts including but not limited to tensions or instability in Eastern Europe, the Middle East, South America, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets; global supply chains, commodity prices, or economic activity in specific industry sectors; the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; increased competitive pressures, including repricing and competitors’ pricing initiatives, and their impact on the Company’s market position, loan, and deposit products; adverse changes in the securities markets; the Company’s ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company’s ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including the Company’s ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; environmental, social and governance matters; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on the Company’s website at www.fsbwa.com and on the SEC’s website at www.sec.gov.

Further, statements about the effects of the Company’s acquisition of Pacific West, completed on August 19, 2026, on the Company’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable, and in many cases, beyond the Company’s control, including the following: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; the integration of the combined company, including the conversion of operating systems and the retention of key personnel and customers, might not proceed as planned or may be more difficult, time-consuming or costly than expected; merger-related and integration expenses may be greater than expected; preliminary estimates of the fair value of acquired assets and assumed liabilities may change during the measuring period, and acquired loans may experience higher credit losses than anticipated; and the combined company might not perform as well as expected.

Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management’s beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward‑looking statements, and undue reliance should not be placed on such statements. The Company does not undertake, and expressly disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (Unaudited)

										Linked			Prior Year
	Sepr 30,			Jun 30,			Sep 30,			Quarter			Quarter
ASSETS	2026			2026			2025			% Change			% Change
Cash and due from banks	$	29,022		$	12,835		$	12,391			126			134
Interest-bearing deposits at other financial institutions		14,925			16,875			48,889			(12	)		(69	)
Total cash and cash equivalents		43,947			29,710			61,280			48			(28	)
Securities available-for-sale, at fair value		342,185			269,460			311,695			27			10
Securities held-to-maturity, net		37,734			34,845			31,386			8			20
Loans held for sale, at fair value		22,820			30,548			38,579			(25	)		(41	)
Loans receivable, net		3,008,129			2,628,992			2,599,601			14			16
Accrued interest receivable		16,901			14,263			15,122			18			12
Premises and equipment, net		49,148			43,455			32,444			13			51
Long-lived assets held for sale		3,258			3,258			—			—			100
Operating lease right-of-use		7,799			6,655			6,832			17			14
Federal Home Loan Bank stock, at cost		13,073			14,420			7,975			(9	)		64
Deferred tax asset, net		9,469			6,441			6,767			47			40
Bank owned life insurance (“BOLI”), net		41,857			36,771			38,531			14			9
MSRs, held at the lower of cost or fair value		8,887			8,912			8,506			—			4
Goodwill		3,592			3,592			3,592			—			—
Core deposit intangible, net		13,525			9,052			11,284			49			20
Other assets		54,327			38,706			35,231			40			54
TOTAL ASSETS	$	3,676,651		$	3,179,080		$	3,208,825			16			15
LIABILITIES
Deposits:
Noninterest-bearing accounts	$	758,691		$	641,856		$	665,852			18			14
Interest-bearing accounts		2,108,513			1,807,026			2,020,640			17			4
Total deposits		2,867,204			2,448,882			2,686,492			17			7
Borrowings		373,500			324,500			129,305			15			189
Subordinated notes:
Principal amount		46,000			50,000			50,000			(8	)		(8	)
Unamortized debt issuance costs		(265	)		(306	)		(356	)		(13	)		(26	)
Total subordinated notes less unamortized debt issuance costs		45,735			49,694			49,644			(8	)		(8	)
Operating lease liability		7,899			6,753			6,993			17			13
Other liabilities		49,107			30,291			35,880			62			37
Total liabilities		3,343,445			2,860,120			2,908,314			17			15
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding		—			—			—			—			—
Common stock, $.01 par value; 45,000,000 shares authorized; 7,867,367 shares issued and outstanding at September 30, 2026, 7,423,772 at June 30, 2026, and 7,535,330 at September 30, 2025		79			74			75			7			5
Additional paid-in capital		57,702			40,886			43,907			41			31
Retained earnings		294,408			291,635			273,882			1			7
Accumulated other comprehensive loss, net of tax		(18,983	)		(13,635	)		(17,353	)		39			9
Total stockholders’ equity		333,206			318,960			300,511			4			11
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,676,651		$	3,179,080		$	3,208,825			16			15

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts) (Unaudited)

	Three Months Ended									Linked			Prior Year
	Sep 30,			Jun 30,			Sep 30,			Quarter			Quarter
INTEREST INCOME	2026			2026			2025			% Change			% Change
Loans receivable, including fees	$	49,346		$	46,202		$	46,664			7			6
Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions		4,075			3,460			4,309			18			(5	)
Total interest and dividend income		53,421			49,662			50,973			8			5
INTEREST EXPENSE
Deposits		14,033			13,908			14,862			1			(6	)
Borrowings		2,778			2,197			1,935			26			44
Subordinated notes		924			909			486			2			90
Total interest expense		17,735			17,014			17,283			4			3
NET INTEREST INCOME		35,686			32,648			33,690			9			6
PROVISION FOR CREDIT LOSSES		3,462			2,641			2,309			31			50
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		32,224			30,007			31,381			7			3
NONINTEREST INCOME
Service charges and fee income		2,424			2,281			2,326			6			4
Bargain purchase gain		1,658			—			—			NM			NM
Gain on sale of loans		1,468			2,581			2,439			(43	)		(40	)
Gain on sale of investment securities, net		11			—			—			NM			NM
Earnings on cash surrender value of BOLI		286			263			269			9			6
Other noninterest income		329			1,025			560			(68	)		(41	)
Total noninterest income		6,176			6,150			5,594			—			10
NONINTEREST EXPENSE
Salaries and benefits		17,178			15,570			14,415			10			19
Operations		4,616			2,699			3,974			71			16
Occupancy		2,073			1,938			1,744			7			19
Data processing		2,252			1,826			1,784			23			26
Loan costs		803			900			746			(11	)		8
Professional and board fees		1,067			1,060			1,093			1			(2	)
FDIC insurance		630			531			592			19			6
Marketing and advertising		449			445			259			1			73
Acquisition costs		2,463			417			—			491			NM
Amortization of core deposit intangible		788			722			787			9			—
Recovery of servicing rights		(5	)		(4	)		(6	)		25			(17	)
Total noninterest expense		32,314			26,104			25,388			24			27
INCOME BEFORE PROVISION FOR INCOME TAXES		6,086			10,053			11,587			(39	)		(47	)
PROVISION FOR INCOME TAXES		1,160			2,117			2,410			(45	)		(52	)
NET INCOME	$	4,926		$	7,936		$	9,177			(38	)		(46	)
Basic earnings per share	$	0.65		$	1.06		$	1.20			(39	)		(46	)
Diluted earnings per share	$	0.63		$	1.04		$	1.18			(39	)		(47	)

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts) (Unaudited)

						Year
	Nine Months Ended September 30,					Over Year
INTEREST INCOME	2026			2025		% Change
Loans receivable, including fees	$	141,560		$	135,004		5
Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions		10,856			11,459		(5	)
Total interest and dividend income		152,416			146,463		4
INTEREST EXPENSE
Deposits		42,654			42,440		1
Borrowings		6,359			5,783		10
Subordinated notes		2,524			1,456		73
Total interest expense		51,537			49,679		4
NET INTEREST INCOME		100,879			96,784		4
PROVISION FOR CREDIT LOSSES		8,632			5,922		46
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		92,247			90,862		2
NONINTEREST INCOME
Service charges and fee income		6,778			6,894		(2	)
Bargain purchase gain		1,658			—		NM
Gain on sale of loans		6,433			6,111		5
Gain on sale of investment securities, net		11			—		NM
Earnings on cash surrender value of BOLI		808			773		5
Other noninterest income		2,039			2,112		(3	)
Total noninterest income		17,727			15,890		12
NONINTEREST EXPENSE
Salaries and benefits		47,602			43,037		11
Operations		10,695			11,243		(5	)
Occupancy		5,887			5,240		12
Data processing		5,672			5,966		(5	)
Loan costs		2,585			2,012		28
Professional and board fees		3,141			3,435		(9	)
FDIC insurance		1,788			1,684		6
Marketing and advertising		1,203			879		37
Acquisition costs		3,175			—		NM
Amortization of core deposit intangible		2,254			2,426		(7	)
(Recovery) impairment of MSRs		(64	)		23		(378	)
Total noninterest expense		83,938			75,945		11
INCOME BEFORE PROVISION FOR INCOME TAXES		26,036			30,807		(15	)
PROVISION FOR INCOME TAXES		5,344			5,881		(9	)
NET INCOME	$	20,692		$	24,926		(17	)
Basic earnings per share	$	2.67		$	3.23		(17	)
Diluted earnings per share	$	2.62		$	3.18		(18	)

KEY FINANCIAL RATIOS AND DATA (Unaudited)

	For the Three Months Ended
	September 30,			June 30,			September 30,
PERFORMANCE RATIOS:	2026			2026			2025
Return on assets (ratio of net income to average total assets) ⁽¹⁾		0.57	%		1.00	%		1.14	%
Return on equity (ratio of net income to average total stockholders’ equity)⁽¹⁾		5.85			9.94			11.97
Yield on average interest-earning assets ⁽¹⁾		6.52			6.54			6.61
Average total cost of funds ⁽¹⁾		2.32			2.41			2.41
Interest rate spread information – average during period		4.20			4.13			4.20
Net interest margin ⁽¹⁾		4.36			4.30			4.37
Operating expense to average total assets ⁽¹⁾		3.77			3.29			3.16
Average interest-earning assets to average interest-bearing liabilities		139.79			139.32			140.80
Efficiency ratio ⁽²⁾		77.19			67.28			64.63
Common equity ratio (ratio of stockholders’ equity to total assets)		9.06			10.03			9.37
Tangible common equity ratio ⁽³⁾		8.64			9.67			8.94

	For the Nine Months Ended
	September 30,			September 30,
PERFORMANCE RATIOS:	2026			2025
Return on assets (ratio of net income to average total assets) ⁽¹⁾		0.85	%		1.07	%
Return on equity (ratio of net income to average total stockholders’ equity) ⁽¹⁾		8.55			11.03
Yield on average interest-earning assets ⁽¹⁾		6.53			6.55
Average total cost of funds ⁽¹⁾		2.37			2.39
Interest rate spread information – average during period		4.16			4.16
Net interest margin ⁽¹⁾		4.32			4.33
Operating expense to average total assets ⁽¹⁾		3.44			3.26
Average interest-earning assets to average interest-bearing liabilities		139.66			141.54
Efficiency ratio ⁽²⁾		70.77			67.40

	September 30,			June 30,			September 30,
ASSET QUALITY RATIOS AND DATA:	2026			2026			2025
Nonperforming assets to total assets at end of period ⁽⁴⁾		0.68	%		0.49	%		0.57	%
Nonperforming loans to total gross loans (excluding loans HFS) ⁽⁵⁾		0.83			0.59			0.70
ACL – loans to nonperforming loans⁽⁵⁾		145.03			199.15			163.77
ACL – loans to total gross loans (excluding loans HFS)		1.20			1.17			1.14

	At or For the Three Months Ended
	Sep 30,			Jun 30,			Sep 30,
PER COMMON SHARE DATA:	2026			2026			2025
Basic earnings per share	$	0.65		$	1.06		$	1.20
Diluted earnings per share	$	0.63		$	1.04		$	1.18
Weighted average basic shares outstanding		7,524,107			7,340,326			7,488,139
Weighted average diluted shares outstanding		7,677,572			7,483,199			7,623,243
Common shares outstanding at end of period		7,739,797	⁽⁶⁾		7,320,801	⁽⁷⁾		7,432,359	⁽⁸⁾
Book value per share using common shares outstanding	$	43.05		$	43.57		$	40.43
Tangible book value per share using common shares outstanding⁽⁹⁾	$	40.84		$	41.84		$	38.43

(1)			Annualized.
(2)			Total noninterest expense as a percentage of net interest income and total noninterest income.
(3)			Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below.
(4)			Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets.
(5)			Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due.
(6)			Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares.
(7)			Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares.
(8)			Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares.
(9)			Tangible book value per share using outstanding common shares excludes intangible assets. This ratio represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” below.

(Dollars in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				QTR Over QTR			YTD Over YTD
Average Balances	2026		2025		2026		2025		$ Change			$ Change
Assets
Loans receivable, net ⁽¹⁾	$	2,864,219	$	2,651,111	$	2,754,304	$	2,608,338	$	213,108		$	145,966
Investment securities – taxable		277,518		285,111		259,243		267,657		(7,593	)		(8,414	)
Investment securities – nontaxable		76,796		79,341		77,462		78,386		(2,545	)		(924	)
Interest-bearing deposits and certificates of deposit at other financial institutions		14,954		34,857		17,251		23,575		(19,903	)		(6,324	)
FHLB stock, at cost		14,321		10,082		11,257		10,262		4,239			995
Total interest-earning assets		3,247,808		3,060,502		3,119,517		2,988,218		187,306			131,299
Noninterest-earning assets		155,992		124,955		143,119		123,785		31,037			19,334
Total assets	$	3,403,800	$	3,185,457	$	3,262,636	$	3,112,003	$	218,343		$	150,633
Liabilities
Interest-bearing deposit accounts	$	1,992,076	$	1,947,830	$	1,970,700	$	1,880,007	$	44,246		$	90,693
Borrowings		283,054		176,234		213,712		181,633		106,820			32,079
Subordinated notes		48,230		49,633		49,188		49,617		(1,403	)		(429	)
Total interest-bearing liabilities		2,323,360		2,173,697		2,233,600		2,111,257		149,663			122,343
Noninterest-bearing deposit accounts		707,196		668,908		670,230		663,536		38,288			6,694
Other noninterest-bearing liabilities		39,239		38,746		35,051		35,081		493			(30	)
Total liabilities	$	3,069,795	$	2,881,351	$	2,938,881	$	2,809,874	$	188,444		$	129,007

___________

(1) Includes loans HFS.

Non-GAAP Financial Measures:

In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States (“GAAP”), this earnings release presents non-GAAP financial measures that include tangible book value per share, and tangible common equity ratio. Management believes that providing the Company’s tangible book value per share and tangible common equity ratio provides useful supplemental information regarding the Company’s capital position and facilitates comparisons of the quality and composition of the Company’s capital over time and with that of its peers. Where applicable, the Company has also presented comparable GAAP information.

These non-GAAP financial measures have inherent limitations, may not be calculated in the same manner by other companies, and should not be considered in isolation or as a substitute for the Company’s financial position, results of operations or other financial measures determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

Reconciliation of the GAAP book value per share and common equity ratio to the non-GAAP tangible book value per share and tangible common equity ratio is presented below.

(Dollars in thousands, except share and per share amounts)	September 30,				June 30,				September 30,
Tangible Book Value Per Share:	2026				2026				2025
Stockholders’ equity (GAAP)	$	333,206			$	318,960			$	300,511
Less: goodwill and core deposit intangible, net		(17,117	)			(12,644	)			(14,876	)
Tangible common stockholders’ equity (non-GAAP)	$	316,089			$	306,316			$	285,635

Common shares outstanding at end of period		7,739,797		⁽¹⁾		7,320,801		⁽²⁾		7,432,359		⁽³⁾

Book value per share (GAAP)	$	43.05			$	43.57			$	40.43
Tangible book value per share (non-GAAP)	$	40.84			$	41.84			$	38.43

Tangible Common Equity Ratio:
Total assets (GAAP)	$	3,676,651			$	3,179,080			$	3,208,825
Less: goodwill and core deposit intangible assets		(17,117	)			(12,644	)			(14,876	)
Tangible assets (non-GAAP)	$	3,659,534			$	3,166,436			$	3,193,949

Common equity ratio (GAAP)		9.06		%		10.03		%		9.37		%
Tangible common equity ratio (non-GAAP)		8.64				9.67				8.94

_________________________

(1)			Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares.
(2)			Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares.
(3)			Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares.

Contacts:
Matthew D. Mullet,
President and Chief Executive Officer
Phillip D. Whittington,
Chief Financial Officer

(425) 771-5299
www.FSBWA.com