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INVESTOR PRESENTATION September 2026 – Raymond James U.S. Bank and Banking on Tech Conference -FSBW Vision Statement “Build a truly great place to work and bank.”
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Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions. 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: potential adverse impacts to economic conditions in the Company’s local market areas, other markets 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, a potential recession or slowed economic growth; changes in the interest rate environment, including the past increases in the Federal Reserve benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures, changes in the interest rate environment, 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 our ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; legislative and regulatory changes, including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform critical processing functions for us; environmental, social and governance goals; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, 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 potential effects of the Company's proposed merger with Pacific West 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 factor 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; governmental approval of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; conditions to the closing of the merger may not be satisfied; the shareholders of Pacific West may fail to approve the consummation of the merger; the integration of the combined company, including the retention of key personnel, might not proceed as planned; and the combined company might not perform as well as expected. 2 Disclosure Statement The information included in this presentation is confidential and may not be reproduced or redistributed, passed on or divulged, directly or indirectly, to any other person. FS Bancorp, Inc. (the “Company”) reserves the right to request the return of this presentation at any time.
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Forward Looking Statements (continued) Any of the forward-looking statements that the Company makes in this presentation 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 specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements except as required by securities laws. These risks could cause the Company’s actual results for 2026 and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of the Company and could negatively affect its operating and stock performance. 3
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TotalAssets: $3.18 billion (at June 30, 2026) Headquartered: Mountlake Terrace,WA Branches: 32 Loan Production Offices: 16 ATM Locations: 25 Year Established: 1907 Quarterly Dividend: $0.29 FRANCHISE OVERVIEW 4 * Including headquarters and drive through banking in Aberdeen, WA. ** Predecessor to Anchor Bank, Aberdeen Federal Savings and Loan, established in 1907. * **
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54th consecutive quarterly dividend of $0.29 per share CULTURE & HISTORY Predecessor to Anchor Bank, founded in 1907 Converted to a stocksavings bank on July 9, 2012 1907 Employ smart, driven, and nice people Guiding Principles Emphasis on collaboration Best idea wins Jim Collins’ Good-to-Great Lessons Mission Live our Core Values and ‘WOW’ each other and our customers every day Vision Build a truly great place to work and bank Completed Anchor Bancorp acquisition on November 15, 2018 2012 2016 2017 Four-branch acquisition in Q1 2016 resulting in $186.0M in new relationship-baseddeposits 2018 Raised $27.6M in Capital ($25.7M net) w/secondary offering 5 Seven-branch acquisition in Q1 2023 resulting in $425.5M in deposits 2023 2026
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Whole-Bank Acquisition – November 2018 Asset Growth Profile 6 Source: Company Documents Note: Dollar amounts in millions Branch Acquisition – January 2016 Branch Acquisition – February 2023 Whole-Bank Merger closed August 19, 2026
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7 The Five Pillars of 1SB Consumer Lending Business Lending Home Lending Commercial Real Estate Lending Retail Branches and Commercial Cash Management
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Continued expansion of our commercial business lending programs Originations of residential mortgage loans which are primarily sold into the secondary market through our mortgage banking platform Remain focused on maintaining strong asset quality Emphasizing lower cost core deposits to reduce the costs of funding growth Offer a wide range of products and services to meet our customers’ banking needs Expand into new markets based on current product offerings LONG-TERM STRATEGIC PLAN 8
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MISSION AND PURPOSE (MAP) TEAM 9
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MAP TEAM cont. 10
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$520M* $350M* $243M $207M* $185M* $149M $123M $45M* $4.1B* $1.6B* $1.3B* $255M $206M* $133M $5.5B $3.2B $901M $318M Banks Headquartered in Snohomish County: December 31, 2008 Total Assets $9.4B *Denotes a financial institution no longer headquartered in Snohomish County Note: Dollar amount are for assets Source: FFIEC Central Data Repository’s Public Bank Data Distribution website & S&P Capital IQ $393M 11 Banks Headquartered in Snohomish County: June 30, 2026 Total Assets $10.3B
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Financial Highlights Net Income of $7.9 million Total assets of $3.2 billion Gross portfolio loans of $2.7 billion Q2 2026 Capital Diluted earnings per share of $1.04 Tangible book value per share growth of $1.23 to$41.84(1) Announced 54th consecutive quarterly cash dividend of $0.29 Credit Quality Ratios Nonperforming Assets (NPAs) as a percentage of total assets of 0.49% Allowance for credit losses on loansas a percentage of gross loans receivable, excluding loans held for saleof 1.17% Repurchased 87,000 shares at an average price of $41.81Capital Position SECOND QUARTER 2026HIGHLIGHTS (1) Non-GAAP financial measures. See appendix for reconciliation to book value per share (GAAP) Selected Performance Ratios ROAA of 1.00% ROAE of 9.94% Net Interest Margin of 4.30% Efficiency Ratio of 67.28% Q2 2026 12
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TRANSACTION OVERVIEW 13 Structure Pacific West Bancorp (“PWBK”) will merge into FS Bancorp, Inc. (“FSBW”) Pacific West Bank will merge into 1st Security Bank Consideration 430,176 shares of FSBW common stock and $16.8 million in cash 51% stock consideration / 49% cash consideration for PWBK shareholders Transaction Value(1) $34.6 million in aggregate consideration for PWBK Transaction Multiples(1) Price / Tangible Book Value: 95% Price / 2027E Earnings: 22.1x Price / 2027E Earnings + Fully Realized Cost Savings: 7.8x Ownership and Board Pro forma ownership of 94.6% for FSBW / 5.4% for PWBK No changes to FSBW Board of Directors Approvals Subject to PWBK shareholder approvals and customary regulatory approvals No financing contingencies to complete the transaction Timing Estimated Q3 2026, pending regulatory and shareholder approval (1) Based on FSBW closing stock price as of 2/25/2026
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Loan Portfolio Composition and Comparison Yield on Loans: 7.00% FSBW Yield on Loans: 5.97% PWBK Yield on Loans: 6.91% Pro Forma(1) Source: S&P Capital IQ Pro, bank -level data as of the quarter ended 12/31/2025 Note: All dollars in thousands (1) Excludes merger adjustments C&D 15% 1-4 Fam. 30% Multi. Fam. 10% NOO CRE 7% OO CRE 6% C&I 8% Farm & Ag. 0% Consumer 22% Other 2% C&D 5% 1-4 Fam. 9%Multi. Fam. 14% NOO CRE 31% OO CRE 20% C&I 13% Farm & Ag. 0% Consumer 7% Other 0% C&D 14% 1-4 Fam. 28% Multi. Fam. 10% NOO CRE 10% OO CRE 8% C&I 9% Farm & Ag. 0% Consumer 21% Other 1% 1 4 FSBW PWBK Pro Forma (1) Construction & Development 396,707$ 15% 14,428$ 5% 411,135$ 14% 1-4 Family 803,265$ 30% 24,511$ 9% 827,776$ 28% Multifamily 263,189$ 10% 38,496$ 14% 301,685$ 10% Non-Owner Occupied CRE 196,188$ 7% 86,566$ 31% 282,754$ 10% Owner-Occupied CRE 171,417$ 6% 54,984$ 20% 226,401$ 8% Commercial & Industrial 218,911$ 8% 36,228$ 13% 255,139$ 9% Farm & Ag. 9,068$ 0% 91$ 0% 9,159$ 0% Consumer 596,881$ 22% 20,417$ 7% 617,298$ 21% Other 43,239$ 2% 1,311$ 0% 44,550$ 1% Total Loans 2,698,865$ 100% 277,032$ 100% 2,975,897$ 100%
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Deposit Portfolio Composition and Comparison Cost of Deposits: 2.18% PWBK Cost of Deposits: 2.25% Pro Forma(1) Source: S&P Capital IQ Pro, bank -level data as of the quarter ended 12/31/2025 Note: All dollars in thousands (1) Excludes merger adjustments Cost of Deposits: 2.26% FSBW NIBD 25% NOW & IBD 12% MMDA 14% Savings 6% CDs < $100k 19% CDs > $100k 23% NIBD 23% NOW & IBD 51% MMDA 17% Savings 1% CDs < $100k 1% CDs > $100k 6% NIBD 25% NOW & IBD 17% MMDA 15% Savings 6% CDs < $100k 17% CDs > $100k 21% 15 FSBW PWBK Pro Forma (1) Noninterest-Bearing Demand 675,799$ 25% 78,712$ 23% 754,511$ 25% NOW & Interest-Bearing Demand 335,513$ 12% 173,532$ 51% 509,045$ 17% MMDA 385,636$ 14% 59,736$ 17% 445,372$ 15% Savings 164,040$ 6% 4,122$ 1% 168,162$ 6% CDs < $100k 512,808$ 19% 4,327$ 1% 517,135$ 17% CDs > $100k 617,588$ 23% 21,900$ 6% 639,488$ 21% Total Deposits 2,691,384$ 100% 342,329$ 100% 3,033,713$ 100% Non-CDs 1,560,988$ 58% 316,102$ 92% 1,877,090$ 62%
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FRANCHISE GROWTH (1) Non-GAAP financial measure (2) Includes loans held for sale 16 Total Assets ($B) Tangible Common Equity ($M) (1) Total Net Loans ($B) (2) Total Deposits ($B) Source: Company documents
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INCOME STATEMENT TRENDS Total Noninterest Expense ($M) Net Income ($M) Total Revenues ($M) 17
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SELECTED PERFORMANCE RATIO TRENDS EfficiencyRatio Net Interest Margin ROAA ROAE 18
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NONINTEREST INCOME Noninterest Income Composition(1)Noninterest Income ($M) (1) Quarter ended June 30, 2026 19
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NONINTEREST EXPENSE Noninterest Expense Composition(1)Noninterest Expense ($M) 20 (1) Quarter ended June 30, 2026 (2) Other = marketing and advertising, acquisition cost, amortization of core deposit intangible and recovery of servicing rights (2)
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Diluted Earnings Per Share Book Value PerShare BUILDING STOCKHOLDER VALUE 21
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SEGMENT REPORTING ANALYSIS 22 Net Interest Income Noninterest Income Noninterest Expense Net Income
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Historical NCOs / Avg. Loans DISCIPLINED CREDIT CULTURE 23 The Company employs Board and Committee oversight and reporting, with the Chief Risk Officer, Chief Compliance Officer, SVP and Director of Internal Audit, SVP reporting directly to the Audit Committee FSBW has a disciplined underwriting approach with generally standard LTV and DSC coverage requirements with firm concentration limits and designated focused lending channels Construction and Development (C&D) Weighted Average LTV = 64.7% (as of June 30, 2026) Commercial Real Estate (CRE) Weighted Average LTV= 56.4% (as of June 30, 2026) Loans greater than $10 million are reported to the Asset Quality Committee, while loans between $20 million and $35 million require approval from the Senior Loan Committee The legal lending limit is $76.6 million while the in-house limit is $35 million The CRE and C&D portfolios are stressed on a quarterly basis with a third-party review of the commercial portfolio conducted on an annual basis * * attributable to a single commercial construction loan charge-off
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ASSETS WITH SHORT-TERM REPRICING Assets repricing within three months or less as of June 30, 2026, were $826.2 million, or 26.0% of total assets 24 Assets Repricing – Three Months or less ($M)
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(1) Loans including loans held for sale (2) WH = Warehouse (3) Other consumer includes marine loans Total Gross Loans (excl. loans held for sale): $2.7B LOAN PORTFOLIO SUMMARY (2) Gross Loans and Loan Yield ($B) (1) Loan Composition at June 30, 2026 25 (3)
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Q2 2026 Dealer Production by State CONSUMER LENDING 2009 vs. Q2 2026 Portfolio Credit Quality Consumer Portfolio Characteristics 2009 Q2 2026 Primarily home improvement and marine, UCC-2 or title secured Offered on an indirect basis and largely automated (with underwriter verification) $573 million outstanding as of Q2 2026: $33 million in dealer originations $26 million, or 77%, with the top 10 dealers Average outstanding portfolio yield of 8.03%, down from 8.08% in Q1 2026 FICO Scores Q2 2026 Highlights 26
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C&I commitments: $729.6 million at June 30, 2026 COMMERCIAL BUSINESS LENDING Q2 2026 Commercial & Industrial (C&I) Q2 2026 Product Mix ($M) Source: Company documents 27 The $32.3 million of quarter over sequential quarter decrease in outstanding balances was attributed to decreases of $10.9 million in warehouse lending and $23.3 million in C&I loans and an increase of $1.9 million in CRE owner occupied Outstanding balances were $472.6 million at June 30, 2026, compared to $504.9 million at March 31, 2026 Year over Year Commercial & Industrial (C&I) Outstanding balances were $472.6 million at June 30, 2026, compared to $492.8 million at June 30, 2025 The $20.2 million of year over year decrease in outstanding balances is attributable to a decrease of $10.7 million in warehouse lending and $13.4 million in C&I loans and an increase of $3.9 million in CRE owner occupied
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CONSTRUCTION &DEVELOPMENT LENDING Q2 2026 Highlights Quarterly C&D Loans Outstanding ($M) Overall construction: $620.3million committed / $415.3 million outstanding 7.81% weighted average coupon rate Majority of speculative construction originations were in King County, with a focus on "in- city", infill lending to a select group of relationship customers Custom construction originations are widely disbursed throughout our footprint 28 Source: Company documents
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Home Lending Gain on Sale Revenue as a Percentage of Total Revenue Total Revenues ($M) 29
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Reserves/Gross Loans(2)Nonperforming Assets ($M)(1) & NPAs/ Assets (1) Nonperforming assets consists of nonperforming loans which include nonaccruing loans, foreclosed real estate and other repossessed assets (2) Excluding HFS loans ASSET QUALITY Charge-offs & Recoveries ($000’s) 30
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Total Deposits: $2.4 billion DEPOSIT COMPOSITION AND GROWTH (1) Includes noninterest-bearing checking, interest-bearing checking and escrow accounts related to mortgages serviced (1) Q2 2026 Product Mix Total Deposits ($B) and Cost of Deposits (%) 31
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FranchiseGrowth Dividends ShareholderValue Continued organic asset growth across our diverse group of lending channels Expand commercial business lending including construction lending inline with regulatory guidance for oversight on construction concentrations above 100% of total risk-based capital Continued investment in the Bank’s business lending platform and small business administrationlending Focus on core deposit generation to fund asset growth Regular dividend reflects a 27.9% payout ratio compared to diluted earnings per share in the second quarter 54th consecutive quarterly cash dividend of $0.29 per share Continued focus on increasing shareholder value through our business plan execution Tangible book value per share increased $1.23 to $41.84 at June 30, 2026 CAPITAL STRATEGY 32
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APPENDIX – NON-GAAP RECONCILIATION 33
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES – EQUITY This presentation contains the tangible book value per share, a non-GAAP financial measure. Tangible common stockholders’ equity is calculated by excluding intangible assets from stockholders’ equity. For this financial measure, the Company’s intangible assets are goodwill and core deposit intangible. Tangible book value per share is calculated by dividing tangible common shareholders’ equity by the number of common shares outstanding. The Company believes that this non-GAAP measure is consistent with the capital treatment utilized by the investment community, which excludes intangible assets from the calculation of risk-based capital ratios and presents this measure to facilitate comparison of the quality and composition of the Company's capital over time and in comparison to its competitors. 34 Non-GAAP Financial Measures ($ in 000's) June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025 June 30, 2025 Tangible Book Value Per Share: Stockholders' equity 318,960$ 313,852$ 307,694$ 300,511$ 297,203$ Goodwill and core deposit intangible, net (12,644) (13,366) (14,110) (14,876) (15,663) Tangible common stockholders' equity 306,316$ 300,486$ 293,584$ 285,635$ 281,540$ Common shares outstanding at end of period 7,320,801 7,398,571 7,404,548 7,432,359 7,515,480 Common stockholders' equity (book value) per share (GAAP) 43.57$ 42.42$ 41.55$ 40.43$ 39.55$ Tangible common stockholders' equity (tangible book value)* 41.84$ 40.61$ 39.65$ 38.43$ 37.46$ Tangible Common Equity Ratio: Total Assets 3,179,080$ 3,203,515$ 3,196,847$ 3,208,825$ 3,176,013$ Goodwill and core deposit intangible, net (12,644) (13,366) (14,110) (14,876) (15,663) Tangible assets 3,166,436$ 3,190,149$ 3,182,737$ 3,193,949$ 3,160,350$ Common Equity 318,960$ 313,852$ 307,694$ 300,511$ 297,203$ Common equity ratio (GAAP) 10.03% 9.80% 9.62% 9.37% 9.36% Tangible common equity ratio (non-GAAP) 9.67% 9.42% 9.22% 8.94% 8.91% *Per share (non-GAAP) Source: Press Release
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CONTACT INFORMATION Administrative Center 6920 220th Street Southwest Mountlake Terrace, Washington 98043 35 Matt Mullet mattm@fsbwa.com President & CEO (425) 697-8026 Kelli Nielsen kelli.nielsen@fsbwa.com Chief Retail Banking Officer, EVP (425) 275-4347 Sean McCormick seanm@fsbwa.com Chief Credit Administration Officer, EVP (425) 697-8080