Earnings release
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Exhibit 99.1 FS Bancorp, Inc. Reports Second Quarter Net Income of $7.9 Million or $1.04 Per Diluted Share and Declares 54th Consecutive Quarterly Cash Dividend MOUNTLAKE TERRACE, WA – July 21, 2026 – FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2026 second quarter net income of $7.9 million, or $1.04 per diluted share, compared to $7.8 million, or $1.02 per diluted share, for the prior quarter, and $7.7 million, or $0.99 per diluted share, for the comparable quarter one year ago. For the six months ended June 30, 2026, net income was $15.8 million, or $2.07 per diluted share, compared to net income of $15.7 million, or $1.99 per diluted share, for the comparable six-month period in 2025. “From the announcement of our proposed merger with Pacific West Bank in the first quarter of 2026, our teams have been diligently working toward a successful integration, while concurrently contributing to our financial success this quarter,” stated Matthew Mullet, President and CEO of FS Bancorp, Inc. “We are also pleased to announce that our Board of Directors has approved our 54th 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 August 21, 2026, to shareholders of record as of August 7, 2026,” concluded Mullet. 2026 Second Quarter Highlights ● Net income totaled $7.9 million for the second quarter of 2026, compared to $7.8 million for the previous quarter, and $7.7 million for the comparable quarter one year ago; ● Total deposits decreased $188.7 million, or 7.2%, to $2.45 billion at June 30, 2026, compared to $2.63 billion at March 31, 2026. This decrease was primarily due to a $201.1 million decrease in brokered deposits, with an offsetting increase of $12.1 million in retail deposits. Compared to June 30, 2025, total deposits decreased $104.5 million, or 4.1%. The cost of deposits decreased to 2.18% for the quarter ended June 30, 2026, from 2.24% for the quarter ended March 31, 2026, primarily due to the Company's funding strategy of shifting from higher cost brokered deposits to borrowings, while maintaining sufficient liquidity; ● Loans receivable, net increased $4.9 million, to $2.63 billion at June 30, 2026, compared to $2.62 billion at March 31, 2026, and increased $46.7 million, from $2.58 billion at June 30, 2025. The year-over-year loan growth was primarily due to an increase of $88.9 million in the commercial real estate portfolio, partially offset by heightened payoff activity in the consumer loan portfolio which decreased $33.1 million during the same period; ● Consumer loans were $573.2 million at June 30, 2026, a decrease of $10.3 million, or 1.8%, from $583.5 million in the previous quarter, and a decrease of $33.1 million, or 5.5%, from $606.3 million in the comparable quarter one year ago. During the three months ended June 30, 2026, consumer loan originations included 87.3% of indirect home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720; ● The Commercial and Consumer Banking segment reported net income of $6.8 million for the second quarter of 2026, compared to $6.7 million for the prior quarter and $7.4 million for the second quarter of 2025. The Home Lending segment reported net income of $1.1 million for both the first and second quarters of 2026, compared to $352,000 for the second quarter of 2025; ● Repurchased 87,000 shares of the Company's common stock for $3.6 million in the second quarter of 2026, at an average price of $41.81 per share;
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FS Bancorp Q2 Earnings July 21, 2026 Page 2 ● Book value per share increased $1.15, or 2.7%, to $43.57 at June 30, 2026, compared to $42.42 at March 31, 2026, and increased $4.02, or 10.2%, from $39.55 at June 30, 2025. Tangible book value per share (non-GAAP financial measure) increased $1.23 to $41.84 at June 30, 2026, compared to $40.61 at March 31, 2026, and increased $4.38 from $37.46 at June 30, 2025. See, “Non-GAAP Financial Measures;” and ● Regulatory capital ratios at the Bank were 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital at June 30, 2026, compared to 13.8% for total risk-based capital and 11.2% for Tier 1 leverage capital at March 31, 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 six months ended June 30, 2026 and 2025 (dollars in thousands): At or For the Three Months Ended June 30, 2026 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 29,662 $ 2,986 $ 32,648 Provision for credit losses (2,297) (344) (2,641) Noninterest income (2) 2,740 3,410 6,150 Noninterest expense (3) (21,413) (4,691) (26,104) Income before provision for income taxes 8,692 1,361 10,053 Provision for income taxes (1,899) (218) (2,117) Net income $ 6,793 $ 1,143 $ 7,936 Total average assets for period ended $ 2,511,682 $ 668,842 $ 3,180,524 Full-time employees ("FTEs") 476 117 593 At or For the Three Months Ended June 30, 2025 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 29,179 $ 2,933 $ 32,112 Provision for credit losses (1,849) (172) (2,021) Noninterest income (2) 2,298 2,872 5,170 Noninterest expense (3) (20,314) (5,188) (25,502) Income before provision for income taxes 9,314 445 9,759 Provision for income taxes (1,938) (93) (2,031) Net income $ 7,376 $ 352 $ 7,728 Total average assets for period ended $ 2,466,917 $ 649,443 $ 3,116,360 FTEs 452 115 567
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FS Bancorp Q2 Earnings July 21, 2026 Page 3 At or For the Six Months Ended June 30, 2026 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 59,214 $ 5,979 $ 65,193 Provision for credit losses (4,842) (328) (5,170) Noninterest income (2) 5,204 6,347 11,551 Noninterest expense (3) (42,275) (9,349) (51,624) Income before provision for income taxes 17,301 2,649 19,950 Provision for income taxes (3,762) (422) (4,184) Net income $ 13,539 $ 2,227 $ 15,766 Total average assets for period ended $ 2,527,284 $ 663,600 $ 3,190,884 FTEs 476 117 593 At or For the Six Months Ended June 30, 2025 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 57,585 $ 5,508 $ 63,093 Provision for credit losses (3,170) (443) (3,613) Noninterest income (2) 4,543 5,753 10,296 Noninterest expense (3) (40,489) (10,067) (50,556) Income before provision for income taxes 18,469 751 19,220 Provision for income taxes (3,314) (157) (3,471) Net income $ 15,155 $ 594 $ 15,749 Total average assets for period ended $ 2,440,654 $ 634,013 $ 3,074,667 FTEs 452 115 567 ________________________ (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 six months ended June 30, 2026, the Company recorded a net increase of $45,000 and a net decrease of $56,000 in fair value, respectively, compared to a net increase of $3,000 and a net increase of $266,000 in fair value for the three and six months ended June 30, 2025, respectively. As of both June 30, 2026 and 2025, there were $13.2 million 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 six months ended June 30, 2026 and 2025, the Home Lending segment included allocated overhead expenses of $1.7 million and $3.6 million, compared to $1.8 million and $3.7 million, respectively.
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FS Bancorp Q2 Earnings July 21, 2026 Page 4 Asset Summary The following table summarizes the composition of total assets and changes from the linked quarter and prior-year period. ASSETS Linked Quarter Prior Year (Dollars in thousands) June 30, March 31, June 30, Change Quarter Change 2026 2026 2025 $ % $ % Cash and due from banks $ 12,835 $ 12,424 $ 15,168 $ 411 3% $ (2,333) (15)% Interest-bearing deposits at other financial institutions 16,875 26,278 18,027 (9,403) (36) (1,152) (6) Total cash and cash equivalents 29,710 38,702 33,195 (8,992) (23) (3,485) (10) Certificates of deposit at other financial institutions — — 248 — — NM NM Securities available-for-sale, at fair value 269,460 271,007 302,692 (1,547) (1) (33,232) (11) Securities held-to-maturity, net 34,845 33,267 31,562 1,578 5 3,283 10 Loans held for sale, at fair value 30,548 56,275 53,630 (25,727) (46) (23,082) (43) Loans receivable, net 2,628,992 2,624,091 2,582,272 4,901 — 46,720 2 Accrued interest receivable 14,263 15,333 14,270 (1,070) (7) (7) — Premises and equipment, net 43,455 43,612 30,098 (157) — 13,357 44 Long-lived assets held for sale 3,258 3,258 — — — — NM Operating lease right-of-use 6,655 5,472 7,969 1,183 22 (1,314) (16) Federal Home Loan Bank stock, at cost 14,420 8,701 11,579 5,719 66 2,841 25 Deferred tax asset, net 6,441 7,175 7,782 (734) (10) (1,341) (17) Bank owned life insurance (“BOLI”), net 36,771 36,508 38,262 263 1 (1,491) (4) MSRs, held at the lower of cost or fair value 8,912 8,676 8,652 236 3 260 3 Goodwill 3,592 3,592 3,592 — — — — Core deposit intangible, net 9,052 9,774 12,071 (722) (7) (3,019) (25) Other assets 38,706 38,072 38,139 634 2 567 1 TOTAL ASSETS $3,179,080 $3,203,515 $3,176,013 $ (24,435) (1)% $ 3,067 —%
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FS Bancorp Q2 Earnings July 21, 2026 Page 5 Prior LOAN PORTFOLIO Linked Year (Dollars in thousands) Quarter Quarter COMMERCIAL REAL ESTATE June 30, 2026 March 31, 2026 June 30, 2025 $ $ ("CRE") LOANS Amount Percent Amount Percent Amount Percent Change Change CRE owner occupied $ 184,136 6.9% $ 182,260 6.9% $ 180,250 6.8% $ 1,876 $ 3,886 CRE non-owner occupied 188,258 7.1 182,568 6.9 171,979 6.6 5,690 16,279 Commercial and speculative construction and development 370,459 13.9 358,657 13.5 300,723 11.5 11,802 69,736 Multi-family 262,137 9.9 263,353 9.9 263,185 10.1 (1,216) (1,048) Total CRE loans 1,004,990 37.8 986,838 37.2 916,137 35.0 18,152 88,853 RESIDENTIAL REAL ESTATE LOANS One-to-four-family (excludes HFS) 660,518 24.8 630,996 23.8 639,881 24.4 29,522 20,637 Home equity 88,214 3.3 88,468 3.3 85,613 3.3 (254) 2,601 Residential custom construction 44,765 1.7 44,134 1.7 54,024 2.1 631 (9,259) Total residential real estate loans 793,497 29.8 763,598 28.8 779,518 29.8 29,899 13,979 CONSUMER LOANS Indirect home improvement 502,151 18.9 513,437 19.3 530,375 20.3 (11,286) (28,224) Marine 66,941 2.5 67,126 2.5 72,765 2.8 (185) (5,824) Other consumer 4,111 0.1 2,921 0.1 3,151 0.1 1,190 960 Total consumer loans 573,203 21.5 583,484 21.9 606,291 23.2 (10,281) (33,088) COMMERCIAL BUSINESS LOANS Commercial and industrial (“C&I”) 281,181 10.6 304,470 11.5 294,563 11.3 (23,289) (13,382) Warehouse lending 7,286 0.3 18,144 0.6 17,952 0.7 (10,858) (10,666) Total commercial business loans 288,467 10.9 322,614 12.1 312,515 12.0 (34,147) (24,048) Total loans receivable, gross 2,660,157 100.0% 2,656,534 100.0% 2,614,461 100.0% 3,623 45,696 Allowance for credit losses ("ACL") on loans (31,165) (32,443) (32,189) 1,278 1,024 Total loans receivable, net $2,628,992 $2,624,091 $2,582,272 $ 4,901 $ 46,720 The following table includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate: Current (Dollars in Weighted thousands) For the Quarter Ended Average CRE by type: Sep 30, 2026 Dec 31, 2026 Mar 31, 2027 Jun 30, 2027 Sep 30, 2027 Dec 31, 2027 Mar 31, 2028 Jun 30, 2028 Total Rate Apartment $ 6,957 $ 16,937 $ 7,345 $ 2,242 $ 4,101 $ 11,817 $ 15,901 $ 37,411 $102,711 5.85% Industrial 198 — 13,497 3,645 5,641 5,204 2,790 6,334 37,309 5.88% Mixed use — 1,135 1,287 — — 3,210 445 — 6,077 6.73% Office 538 12,580 2,767 — 7,318 3,622 — 3,090 29,915 5.75% Other 3,241 2,408 — 1,739 323 24 7 866 8,608 5.24% Retail — 3,298 2,902 2,322 7,370 — — 417 16,309 4.88% Senior housing and assisted living 2,092 — — 1,336 — — 3,022 — 6,450 6.88% Total $ 13,026 $ 36,358 $ 27,798 $ 11,284 $ 24,753 $ 23,877 $ 22,165 $ 48,118 $207,379
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FS Bancorp Q2 Earnings July 21, 2026 Page 6 The composition of CRE loans at the dates indicated were as follows: (Dollars in thousands) CRE by Type: June 30, 2026 March 31, 2026 June 30, 2025 CRE non-owner occupied: Office $43,705 $43,532 $39,141 Retail 42,042 42,186 38,652 Hospitality/restaurant 24,499 24,673 26,489 Industrial 20,824 14,064 14,444 Self-storage 18,767 18,844 19,075 Mixed use 18,489 18,674 18,387 Other 9,189 9,249 3,670 Senior housing/assisted living 6,882 7,263 7,448 Education/worship 2,359 2,387 2,467 Land 1,502 1,696 2,206 Total CRE non-owner occupied 188,258 182,568 171,979 CRE owner occupied: Industrial 79,137 74,904 77,419 Office 31,862 35,100 40,156 Retail 27,433 27,443 19,470 Other 10,539 10,674 9,483 Mixed use 9,239 7,685 5,548 Hospitality/restaurant 7,622 8,125 7,230 Automobile related 6,745 6,792 7,215 Car wash 4,376 4,394 4,447 Agriculture 3,816 3,759 4,652 Education/worship 3,367 3,384 4,630 Total CRE owner occupied 184,136 182,260 180,250 Total $ 372,394 $ 364,828 $ 352,229 The composition of construction loans at the dates indicated were as follows: (Dollars in thousands) June 30, 2026 March 31, 2026 June 30, 2025 Construction Types: Amount Percent Amount Percent Amount Percent Commercial construction – retail $ 8,447 2.0% $ 8,450 2.1% $ 8,447 2.4% Commercial construction – office 7,164 1.7 9,442 2.3 9,083 2.6 Commercial construction – self storage 25,234 6.1 24,217 6.0 16,553 4.7 Commercial construction – hotel 13,463 3.3 11,968 3.0 3,673 1.0 Multi-family 46,186 11.1 44,343 11.0 23,119 6.5 Custom construction – single family residential and single family manufactured residential 33,944 8.2 33,425 8.3 45,570 12.8 Custom construction – land, lot and acquisition and development 10,821 2.6 10,708 2.7 8,454 2.4 Speculative residential construction – vertical 225,992 54.4 216,204 53.7 200,375 56.5 Speculative residential construction – land, lot and acquisition and development 43,973 10.6 44,034 10.9 39,473 11.1 Total $ 415,224 100.0% $ 402,791 100.0% $ 354,747 100.0%
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FS Bancorp Q2 Earnings July 21, 2026 Page 7 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 June 30, 2026 March 31, 2026 June 30, 2025 $ % $ % Amount Percent Amount Percent Amount Percent Change Change Change Change Purchase $163,100 79.2% $139,626 67.3% $170,854 85.7% $ 23,474 16.8 $ (7,754) (4.5)% Refinance 42,741 20.8 67,864 32.7 28,470 14.3 (25,123) (37.0) 14,271 50.1% Total $205,841 100.0% $207,490 100.0% $199,324 100.0% $ (1,649) (0.8) $ 6,517 3.3% (Dollars in thousands) For the Six Months Ended June 30, 2026 2025 Amount Percent Amount Percent $ Change % Change Purchase $ 302,726 73.2% $ 290,737 84.3% $ 11,989 4.1% Refinance 110,605 26.8 53,983 15.7 56,622 104.9% Total $ 413,331 100.0% $ 344,720 100.0% $ 68,611 19.9% During the quarter ended June 30, 2026, the Company sold $156.1 million of one-to-four-family loans compared to $154.7 million during the previous quarter and $127.1 million during the same quarter one year ago. Gross margins on home loan sales decreased to 2.98% for the quarter ended June 30, 2026, compared to 3.03% in the previous quarter and decreased from 3.06% 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. (Dollars in thousands) Linked Prior Year DEPOSITS June 30, 2026 March 31, 2026 June 30, 2025 Quarter Quarter Transactional deposits: Amount Percent Amount Percent Amount Percent $ Change $ Change Noninterest-bearing checking $ 629,799 25.7% $ 634,787 24.1% $ 643,573 25.2% $ (4,988) $ (13,774) Interest-bearing checking 209,721 8.6 185,793 7.0 181,240 7.1 23,928 28,481 Escrow accounts related to mortgages serviced (1) 12,057 0.5 18,904 0.7 10,496 0.4 (6,847) 1,561 Subtotal 851,577 34.8 839,484 31.8 835,309 32.7 12,093 16,268 Savings and money market: Savings 173,091 7.1 169,192 6.4 159,601 6.3 3,899 13,490 Money market 375,833 15.3 377,685 14.3 350,548 13.7 (1,852) 25,285 Subtotal 548,924 22.4 546,877 20.7 510,149 20.0 2,047 38,775 Certificates of deposit: CDs 922,022 37.6 923,801 35.0 896,892 35.1 (1,779) 25,130 Brokered Deposits Non-maturity brokered deposits 4,027 0.2 250 — 251 — 3,777 3,776 Maturity brokered deposits 122,332 5.0 327,164 12.5 310,774 12.2 (204,832) (188,442) Subtotal 126,359 5.2 327,414 12.5 311,025 12.2 (201,055) (184,666) Total deposits $2,448,882 100.0% $2,637,576 100.0% $2,553,375 100.0% $(188,694) $ (104,493) Borrowings (2) $ 324,500 $ 167,305 $ 234,305 $ 157,195 $ 90,195 Stockholders' equity $ 318,960 $ 313,852 $ 297,203 $ 5,108 $ 21,757 Book value per common share $ 43.57 $ 42.42 $ 39.55 $ 1.15 $ 4.02 (1) Primarily noninterest-bearing accounts based on applicable state law. (2) Comprised of FHLB advances and Federal Reserve Bank borrowings.
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FS Bancorp Q2 Earnings July 21, 2026 Page 8 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 linked quarter increase in stockholders’ equity at June 30, 2026, compared to March 31, 2026, was primarily due to net income of $7.9 million. Changes in the fair value of available ‑ for ‑ sale securities and interest rate swap cash flow hedges increased accumulated other comprehensive income (“AOCI”) by $2.1 million, net of tax. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in stockholders’ equity was partially offset by share repurchases of $3.6 million and cash dividends paid of $2.2 million. 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 June 30, 2026, capital ratios presented for the Bank and the Company were as follows: At June 30, 2026 Bank Company Total risk-based capital (to risk-weighted assets) 14.01% 13.87% Tier 1 leverage capital (to average assets) 11.43% 10.05% CET 1 capital (to risk-weighted assets) 12.84% 11.29% 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 June 30, March 31, June 30, Quarter Quarter (Dollars in thousands) 2026 2026 2025 $ Change $ Change Beginning ACL balance $ 32,443 $ 31,937 $ 31,653 $ 506 $ 790 Provision 2,559 2,650 1,715 (91) 844 Charge-offs Indirect (2,067) (2,450) (1,556) 383 (511) Marine (7) (75) (43) 68 36 Other (49) (95) (42) 46 (7) Commercial and speculative construction and development (2,277) — — (2,277) (2,277) Commercial business (39) (230) — 191 (39) Subtotal (4,439) (2,850) (1,641) (1,589) (2,798) Recoveries Indirect 584 585 331 (1) 253 Marine 3 36 54 (33) (51) Other 15 7 7 8 8 Commercial business — 78 70 (78) (70) Subtotal 602 706 462 (104) 140 Ending ACL balance $ 31,165 $ 32,443 $ 32,189 $ (1,278) $ (1,024)
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FS Bancorp Q2 Earnings July 21, 2026 Page 9 NONPERFORMING LOANS Linked Prior Year (Dollars in thousands) June 30, March 31, June 30, Quarter Quarter CRE LOANS 2026 2026 2025 $ Change $ Change CRE $ 614 $ 1,081 $ 2,046 $ (467) $ (1,432) Commercial and speculative construction and development 7,164 9,442 9,083 (2,278) (1,919) Total CRE loans 7,778 10,523 11,129 (2,745) (3,351) RESIDENTIAL REAL ESTATE LOANS One-to-four-family (excludes HFS) 1,973 1,983 1,809 (10) 164 Home equity 472 475 251 (3) 221 Total residential real estate loans 2,445 2,458 2,060 (13) 385 CONSUMER LOANS Indirect home improvement 4,799 4,622 3,365 177 1,434 Marine 606 466 567 140 39 Other consumer 19 34 13 (15) 6 Total consumer loans 5,424 5,122 3,945 302 1,479 COMMERCIAL BUSINESS LOANS C&I — 165 1,862 (165) (1,862) Total nonperforming loans $ 15,647 $ 18,268 $ 18,996 $ (2,621) $ (3,349) The decrease in nonperforming loans at June 30, 2026, compared to June 30, 2025, was primarily attributable to a $2.3 million charge-off on a commercial construction loan and a single payoff within the commercial real estate portfolio. The charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market. CLASSIFIED LOANS Linked Prior Year (Dollars in thousands) June 30, March 31, June 30, Quarter Quarter CRE LOANS 2026 2026 2025 $ Change $ Change CRE $ 4,236 $ 4,122 $ 2,046 $ 114 $ 2,190 Commercial and speculative construction and development 7,164 9,442 9,083 (2,278) (1,919) Total CRE loans 11,400 13,564 11,129 (2,164) 271 RESIDENTIAL REAL ESTATE LOANS One-to-four-family (excludes HFS) 3,794 3,814 4,383 (20) (589) Home equity 472 475 251 (3) 221 Total residential real estate loans 4,266 4,289 4,634 (23) (368) CONSUMER LOANS Indirect home improvement 4,799 4,622 3,365 177 1,434 Marine 606 466 567 140 39 Other consumer 19 34 13 (15) 6 Total consumer loans 5,424 5,122 3,945 302 1,479 COMMERCIAL BUSINESS LOANS C&I 3,889 3,168 5,220 721 (1,331) Total classified loans $ 24,979 $ 26,143 $ 24,928 $ (1,164) $ 51
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FS Bancorp Q2 Earnings July 21, 2026 Page 10 Operating Results Net interest income increased $536,000 to $32.6 million for the three months ended June 30, 2026, from $32.1 million for the three months ended June 30, 2025, primarily due to an increase in total interest income of $959,000, partially offset by an increase in total interest expense of $423,000. The $536,000 increase in net interest income was primarily due to an increase of $1.2 million in interest income on loans receivable, including fees, resulting from net loan growth. The $423,000 increase in total interest expense reflected a $612,000 increase in interest expense on borrowings resulting from higher average borrowing balances and a $423,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $612,000 decrease in interest expense on deposits. For the six months ended June 30, 2026, net interest income increased $2.1 million to $65.2 million, from $63.1 million for the six months ended June 30, 2025, with a $3.5 million increase in total interest income, partially offset by a $1.4 million increase in interest expense. The $3.5 million increase in total interest income was primarily due to an increase of $3.9 million in interest income on loans receivable, including fees, resulting from net loan growth. The $1.4 million increase in total interest expense was primarily due to a $1.0 million increase in interest expense on deposits, reflecting higher average deposit balances and funding costs during the period, and a $629,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $267,000 decrease in interest expense on borrowings. Net interest margin (“NIM”) (annualized) was unchanged at 4.30% for the three months ended June 30, 2026, compared to the same period in the prior year and decreased one basis point from 4.31% to 4.30% for the six months ended June 30, 2026, compared to the same period in 2025. Net interest margin remained relatively stable during both periods as modest increases in earning asset yields were largely offset by corresponding increases in funding costs. The average total cost of funds, including noninterest-bearing checking, increased two basis points to 2.41% for the three months ended June 30, 2026, from 2.39% for the three months ended June 30, 2025. This increase primarily reflected the repricing of the subordinated note together with changes in the Company's funding mix during the period, partially offset by lower rates on certificates of deposit as those deposits repriced. The average cost of funds increased two basis points to 2.40% for the six months ended June 30, 2026, from 2.38% for the six months ended June 30, 2025, primarily for the same reason noted above. For the three and six months ended June 30, 2026, the provision for credit losses on loans was $2.6 million and $5.2 million, compared to $2.0 million and $3.6 million for the three and six months ended June 30, 2025. The year-to-date provision for credit losses on loans reflects a $3.1 million increase in net charge-off activity, primarily due to a $2.3 million partial charge- off on a single commercial construction loan as well as increased charge-offs in the consumer loan portfolio. The commercial construction loan had been partially reserved for in prior periods. During the three months ended June 30, 2026, total net charge-offs increased $2.7 million to $3.8 million, compared to $1.2 million for the three months ended June 30, 2025. The increase was primarily attributable to an additional charge-off on a commercial construction loan relationship that was previously partially charged off in 2024, as well as higher net charge-offs within the indirect home improvement portfolio. The additional charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market. Following the additional charge-off, management believes the remaining carrying value appropriately reflects current collateral values. Management expects final resolution of the relationship during the second half of 2026. The increase in indirect home improvement loan net charge-offs primarily reflects elevated delinquency levels within portions of the portfolio.
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FS Bancorp Q2 Earnings July 21, 2026 Page 11 During the six months ended June 30, 2026, net charge-offs increased $3.1 million to $6.0 million, compared to $2.9 million for the six months ended June 30, 2025. The increase was primarily due to higher net charge-offs within the indirect home improvement portfolio and the additional charge-off on the commercial construction loan relationship discussed above. Total noninterest income increased $980,000 to $6.2 million for the three months ended June 30, 2026, from $5.2 million for the three months ended June 30, 2025. The increase primarily reflected higher gain on sale of loans of $609,000 and a $404,000 increase in other noninterest income, partially offset by a $42,000 decrease in service charges and fee income. Total noninterest income increased $1.3 million to $11.6 million for the six months ended June 30, 2026, from $10.3 million for the six months ended June 30, 2025. This increase was the result of a $1.3 million increase in gain on sale of loans and a $158,000 increase in other noninterest income, partially offset by a $213,000 decrease in service charges and fee income. Total noninterest expense increased $602,000 to $26.1 million for the three months ended June 30, 2026, compared to $25.5 million for the three months ended June 30, 2025. The $602,000 increase was primarily attributable to a $1.5 million increase in salaries and benefits expense resulting from annual compensation adjustments implemented during the second quarter as part of the Company's annual focal review process, as well as higher benefit costs. In addition, the Company recorded $417,000 of acquisition-related costs associated with the previously announced merger with Pacific West Bancorp (“Pacific West”), which remains subject to customary closing conditions, including shareholder and regulatory approvals. These increases were partially offset by a $1.1 million reduction in operations expense, primarily due to an approximately $800,000 decrease in the mortgage repurchase reserve. The reduction reflects the continued seasoning of loans originated during the high-volume production years of 2020 and 2021, which reduced expected future repurchase losses. Total noninterest expense increased $1.1 million to $51.6 million for the six months ended June 30, 2026, from $50.6 million for the six months ended June 30, 2025. This increase included a $1.8 million increase in salaries and benefits, a $712,000 increase in acquisition costs, and a $515,000 increase in loan costs, partially offset by a $1.2 million decrease in operations, primarily due to the same reason mentioned above. 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 27 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. 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 “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “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.
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FS Bancorp Q2 Earnings July 21, 2026 Page 12 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; 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 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. 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.
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FS Bancorp Q2 Earnings July 21, 2026 Page 13 FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) Linked Prior Year June 30, March 31, June 30, Quarter Quarter ASSETS 2026 2026 2025 % Change % Change Cash and due from banks $ 12,835 $ 12,424 $ 15,168 3 (15) Interest-bearing deposits at other financial institutions 16,875 26,278 18,027 (36) (6) Total cash and cash equivalents 29,710 38,702 33,195 (23) (10)Certificates of deposit at other financial institutions — — 248 — NM Securities available-for-sale, at fair value 269,460 271,007 302,692 (1) (11)Securities held-to-maturity, net 34,845 33,267 31,562 5 10 Loans held for sale, at fair value 30,548 56,275 53,630 (46) (43)Loans receivable, net 2,628,992 2,624,091 2,582,272 — 2 Accrued interest receivable 14,263 15,333 14,270 (7) — Premises and equipment, net 43,455 43,612 30,098 — 44 Long-lived assets held for sale 3,258 3,258 — — NM Operating lease right-of-use 6,655 5,472 7,969 22 (16)Federal Home Loan Bank stock, at cost 14,420 8,701 11,579 66 25 Deferred tax asset, net 6,441 7,175 7,782 (10) (17)Bank owned life insurance (“BOLI”), net 36,771 36,508 38,262 1 (4)MSRs, held at the lower of cost or fair value 8,912 8,676 8,652 3 3 Goodwill 3,592 3,592 3,592 — — Core deposit intangible, net 9,052 9,774 12,071 (7) (25) Other assets 38,706 38,072 38,139 2 1 TOTAL ASSETS $ 3,179,080 $ 3,203,515 $ 3,176,013 (1) — LIABILITIES Deposits: Noninterest-bearing accounts $ 641,856 $ 653,691 $ 654,069 (2) (2) Interest-bearing accounts 1,807,026 1,983,885 1,899,306 (9) (5) Total deposits 2,448,882 2,637,576 2,553,375 (7) (4)Borrowings 324,500 167,305 234,305 94 38 Subordinated notes: Principal amount 50,000 50,000 50,000 — — Unamortized debt issuance costs (306) (322) (373) (5) (18)Total subordinated notes less unamortized debt issuancecosts 49,694 49,678 49,627 — — Operating lease liability 6,753 5,570 8,138 21 (17) Other liabilities 30,291 29,534 33,365 3 (9) Total liabilities 2,860,120 2,889,663 2,878,810 (1) (1)COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY Preferred stock, $.01 par value; 5,000,000 shares authorized; noneissued or outstanding — — — — — Common stock, $.01 par value; 45,000,000 shares authorized;7,423,772 shares issued and outstanding at June 30, 2026,7,501,542 at March 31, 2026, and 7,618,543 at June 30, 2025 74 75 76 (1) (3)Additional paid-in capital 40,886 43,668 48,418 (6) (16)Retained earnings 291,635 285,854 268,509 2 9 Accumulated other comprehensive loss, net of tax (13,635) (15,745) (19,800) (13) (31) Total stockholders’ equity 318,960 313,852 297,203 2 7 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,179,080 $ 3,203,515 $ 3,176,013 (1) —
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FS Bancorp Q2 Earnings July 21, 2026 Page 14 FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Linked Prior Year June 30, March 31, June 30, Quarter Quarter INTEREST INCOME 2026 2026 2025 % Change % Change Loans receivable, including fees $ 46,202 $ 46,012 $ 45,038 — 3 Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions 3,460 3,321 3,665 4 (6) Total interest and dividend income 49,662 49,333 48,703 1 2 INTEREST EXPENSE Deposits 13,908 14,713 14,520 (5) (4) Borrowings 2,197 1,384 1,585 59 39 Subordinated notes 909 691 486 32 87 Total interest expense 17,014 16,788 16,591 1 3 NET INTEREST INCOME 32,648 32,545 32,112 — 2 PROVISION FOR CREDIT LOSSES 2,641 2,529 2,021 4 31 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 30,007 30,016 30,091 — — NONINTEREST INCOME Service charges and fee income 2,281 2,073 2,323 10 (2) Gain on sale of loans 2,581 2,384 1,972 8 31 Earnings on cash surrender value of BOLI 263 259 254 2 4 Other noninterest income 1,025 685 621 50 65 Total noninterest income 6,150 5,401 5,170 14 19 NONINTEREST EXPENSE Salaries and benefits 15,570 14,854 14,088 5 11 Operations 2,699 3,380 3,824 (20) (29) Occupancy 1,938 1,876 1,780 3 9 Data processing 1,826 1,594 2,137 15 (15) Loan costs 900 882 719 2 25 Professional and board fees 1,060 1,014 1,155 5 (8) FDIC insurance 531 627 554 (15) (4) Marketing and advertising 445 309 398 44 12 Acquisition costs 417 295 — 41 100 Amortization of core deposit intangible 722 744 809 (3) (11) (Recovery) impairment of servicing rights (4) (55) 38 (93) (111) Total noninterest expense 26,104 25,520 25,502 2 2 INCOME BEFORE PROVISION FOR INCOME TAXES 10,053 9,897 9,759 2 3 PROVISION FOR INCOME TAXES 2,117 2,067 2,031 2 4 NET INCOME $ 7,936 $ 7,830 $ 7,728 1 3 Basic earnings per share $ 1.06 $ 1.04 $ 1.00 2 6 Diluted earnings per share $ 1.04 $ 1.02 $ 0.99 2 5
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FS Bancorp Q2 Earnings July 21, 2026 Page 15 FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Year Six Months Ended June 30, Over Year INTEREST INCOME 2026 2025 % Change Loans receivable, including fees $ 92,214 $ 88,340 4 Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions 6,781 7,150 (5) Total interest and dividend income 98,995 95,490 4 INTEREST EXPENSE Deposits 28,621 27,578 4 Borrowings 3,581 3,848 (7) Subordinated note 1,600 971 65 Total interest expense 33,802 32,397 4 NET INTEREST INCOME 65,193 63,093 3 PROVISION FOR CREDIT LOSSES 5,170 3,613 43 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 60,023 59,480 1 NONINTEREST INCOME Service charges and fee income 4,354 4,567 (5) Gain on sale of loans 4,965 3,672 35 Earnings on cash surrender value of BOLI 522 505 3 Other noninterest income 1,710 1,552 10 Total noninterest income 11,551 10,296 12 NONINTEREST EXPENSE Salaries and benefits 30,424 28,621 6 Operations 6,079 7,269 (16) Occupancy 3,814 3,496 9 Data processing 3,420 4,182 (18) Loan costs 1,782 1,267 41 Professional and board fees 2,074 2,342 (11) FDIC insurance 1,158 1,092 6 Marketing and advertising 754 619 22 Acquisition costs 712 — NM Amortization of core deposit intangible 1,466 1,639 (11) (Recovery) impairment of MSRs (59) 29 (303) Total noninterest expense 51,624 50,556 2 INCOME BEFORE PROVISION FOR INCOME TAXES 19,950 19,220 4 PROVISION FOR INCOME TAXES 4,184 3,471 21 NET INCOME $ 15,766 $ 15,749 — Basic earnings per share $ 2.11 $ 2.02 4 Diluted earnings per share $ 2.07 $ 1.99 4
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FS Bancorp Q2 Earnings July 21, 2026 Page 16 KEY FINANCIAL RATIOS AND DATA (Unaudited) For the Three Months Ended June 30, March 31, June 30, PERFORMANCE RATIOS: 2026 2026 2025 Return on assets (ratio of net income to average total assets) (1) 1.00% 0.99% 0.99% Return on equity (ratio of net income to average total stockholders' equity) (1) 9.94 10.03 10.29 Yield on average interest-earning assets (1) 6.54 6.53 6.52 Average total cost of funds (1) 2.41 2.39 2.39 Interest rate spread information – average during period 4.13 4.14 4.13 Net interest margin (1) 4.30 4.31 4.30 Operating expense to average total assets (1) 3.29 3.23 3.28 Average interest-earning assets to average interest-bearing liabilities (1) 139.32 139.86 140.98 Efficiency ratio (2) 67.28 67.25 68.40 Common equity ratio (ratio of stockholders' equity to total assets) 10.03 9.80 9.36 Tangible common equity ratio (3) 9.67 9.42 8.91 For the Six Months Ended June 30, June 30, PERFORMANCE RATIOS: 2026 2025 Return on assets (ratio of net income to average total assets) 1.00% 1.03% Return on equity (ratio of net income to average total stockholders' equity) 9.98 10.55 Yield on average interest-earning assets 6.54 6.52 Average total cost of funds 2.40 2.38 Interest rate spread information – average during period 4.14 4.14 Net interest margin 4.30 4.31 Operating expense to average total assets 3.26 3.32 Average interest-earning assets to average interest-bearing liabilities 139.59 141.93 Efficiency ratio (2) 67.27 68.89 June 30, March 31, June 30, ASSET QUALITY RATIOS AND DATA: 2026 2026 2025 Nonperforming assets to total assets at end of period (4) 0.49% 0.57% 0.60% Nonperforming loans to total gross loans (excluding loans HFS) (5) 0.59 0.69 0.73 ACL – loans to nonperforming loans (5) 199.15 177.67 168.89 ACL – loans to total gross loans (excluding loans HFS) 1.17 1.22 1.23
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FS Bancorp Q2 Earnings July 21, 2026 Page 17 At or For the Three Months Ended June 30, March 31, June 30, PER COMMON SHARE DATA: 2026 2026 2025 Basic earnings per share $ 1.06 $ 1.04 $ 1.00 Diluted earnings per share $ 1.04 $ 1.02 $ 0.99 Weighted average basic shares outstanding 7,340,326 7,402,375 7,580,576 Weighted average diluted shares outstanding 7,483,199 7,531,291 7,698,173 Common shares outstanding at end of period 7,320,801 (6) 7,398,571 (7) 7,515,480 (8) Book value per share using common shares outstanding $ 43.57 $ 42.42 $ 39.55 Tangible book value per share using common shares outstanding (9) $ 41.84 $ 40.61 $ 37.46 (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 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. (7) Common shares were calculated using shares outstanding of 7,501,542 at March 31, 2026, less 102,971 unvested restricted stock shares. (8) Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, less 103,063 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 June 30, For the Six Months Ended June 30, QTR Over QTR YTD Over YTD Average Balances 2026 2025 2026 2025 $ Change $ Change Assets Loans receivable, net (1) $ 2,695,907 $ 2,613,121 $ 2,698,436 $ 2,586,761 $ 82,786 $ 111,675 Investment securities - taxable 245,713 275,951 249,955 258,786 (30,238) (8,831) Investment securities - nontaxable 77,460 78,155 77,800 77,900 (695) (100) Interest-bearing deposits and certificates of deposit at other financial institutions 13,806 19,502 18,418 17,840 (5,696) 578 FHLB stock, at cost 11,323 8,775 9,699 10,353 2,548 (654) Total interest-earning assets 3,044,209 2,995,504 3,054,308 2,951,640 48,705 102,668 Noninterest-earning assets 136,315 120,856 136,576 123,027 15,459 13,549 Total assets $ 3,180,524 $ 3,116,360 $ 3,190,884 $ 3,074,667 $ 64,164 $ 116,217 Liabilities Interest-bearing deposit accounts $ 1,911,053 $ 1,924,586 $ 1,959,834 $ 1,845,534 $ (13,533) $ 114,300 Borrowings 224,176 150,492 178,467 184,377 73,684 (5,910) Subordinated notes 49,683 49,617 49,675 49,608 66 67 Total interest-bearing liabilities 2,184,912 2,124,695 2,187,976 2,079,519 60,217 108,457 Noninterest-bearing deposit accounts 644,215 657,820 651,440 660,805 (13,605) (9,365) Other noninterest-bearing liabilities 31,061 32,700 32,923 33,218 (1,639) (295) Total liabilities $ 2,860,188 $ 2,815,215 $ 2,872,339 $ 2,773,542 $ 44,973 $ 98,797 (1) Includes loans HFS.
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FS Bancorp Q2 Earnings July 21, 2026 Page 18 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 is consistent with the capital treatment utilized by the investment community, which excludes intangible assets from the calculation of risk-based capital ratios and facilitates comparison of the quality and composition of the Company's capital over time and to its competitors. Where applicable, the Company has also presented comparable GAAP information. These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results 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 and 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) June 30, March 31, June 30, Tangible Book Value Per Share: 2026 2026 2025 Stockholders' equity (GAAP) $ 318,960 $ 313,852 $ 297,203 Less: goodwill and core deposit intangible, net (12,644) (13,366) (15,663) Tangible common stockholders' equity (non-GAAP) $ 306,316 $ 300,486 $ 281,540 Common shares outstanding at end of period 7,320,801(1) 7,398,571(2) 7,515,480(3) Book value per share (GAAP) $ 43.57 $ 42.42 $ 39.55 Tangible book value per share (non-GAAP) $ 41.84 $ 40.61 $ 37.46 Tangible Common Equity Ratio: Total assets (GAAP) $ 3,179,080 $ 3,203,515 $ 3,176,013 Less: goodwill and core deposit intangible assets (12,644) (13,366) (15,663) Tangible assets (non-GAAP) $ 3,166,436 $ 3,190,149 $ 3,160,350 Common equity ratio (GAAP) 10.03% 9.80% 9.36% Tangible common equity ratio (non-GAAP) 9.67 9.42 8.91 _________________________ (1) Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. (2) Common shares were calculated using shares outstanding of 7,501,542 at March 31, 2026, less 102,971 unvested restricted stock shares. (3) Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, less 103,063 unvested restricted stock shares.
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FS Bancorp Q2 Earnings July 21, 2026 Page 19 Additional Information About the Merger and Where to Find It This press release does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval with respect to the proposed transaction with Pacific West. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. In connection with the proposed merger, a registration statement on Form S-4 has been filed with the SEC which includes a proxy statement of Pacific West and a prospectus of the Company, which will be distributed to the shareholders of Pacific West in connection with the vote of Pacific West's shareholders on the merger of Pacific West with and into the Company and the issuance of Company common stock in the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT/PROSPECTUS CONTAINED THEREIN, AS WELL AS ANY AMENDMENTS THERETO, AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER AND RELATED MATTERS. Investors and security holders may obtain free copies of the registration statement on Form S-4, including the proxy statement/prospectus, contained therein, as well as any amendments thereto, and the definitive proxy statement/prospectus, and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov. These documents may also be obtained free of charge by accessing the Company’s website at www.fsbwa.com under the tab “Investor Relations” and then under “SEC Filings.” Alternatively, copies of these documents may be obtained free of charge by (1) writing to FS Bancorp, Inc at 6920 220th Street SW, Mountlake Terrace, Washington 98043, Attn: Investor Relations or (2) by calling (425) 771-5299. Participants in the Solicitation The Company, Pacific West and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific West in connection with the proposed transaction. Information about the Company's directors and executive officers is included in the proxy statement for its 2026 annual meeting of the Company’s shareholders, which was filed with the SEC on April 6, 2026. Information about Pacific West’s participants and additional information regarding the interests of these participants is included in the proxy statement/prospectus regarding the proposed transaction when it becomes available. Free copies of this document may be obtained as described above. Contacts: Matthew D. Mullet, President and Chief Executive Officer Phillip D. Whittington, Chief Financial Officer (425) 771-5299 www.FSBWA.com