{"success":true,"data":{"pressRelease":{"id":"176190","rtpr_id":"nGNX9ngrdG-20261021","ticker":"FSBW","exchange":"NASDAQ","all_tickers":["FSBW"],"title":"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 ","author":"Globe Newswire","published_at":"2026-10-21T20:30:03.165Z","article_body":"MOUNTLAKE TERRACE, Wash., Oct. 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc.\n(NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank\nof Washington (the “Bank”) today reported 2026 third quarter net income of\n$4.9 million, or $0.63 per diluted share, compared to $7.9 million, or $1.04\nper diluted share, for the prior quarter, and $9.2 million, or $1.18 per\ndiluted share, for the comparable quarter one year ago. For the nine months\nended September 30, 2026, net income was $20.7 million, or $2.62 per diluted\nshare, compared to net income of $24.9 million, or $3.18 per diluted share,\nfor the comparable nine-month period in 2025.\n\n“We are excited to work with the Pacific West Bank team members to further\nexpand the deposit and loan opportunities in the greater Portland, Oregon and\nVancouver, Washington markets, and we appreciate all of the hard work that\nwent into the successful systems integration, effective October 5, 2026,\nthrough the collaboration of our newly combined teams,” stated Matthew\nMullet, President and CEO of FS Bancorp, Inc. “We are also pleased to\nannounce that our Board of Directors has approved our 55th consecutive\nquarterly cash dividend of $0.29 per common share, demonstrating our\ncommitment to returning capital to long-term shareholders. The cash\ndividend will be paid on November 20, 2026, to shareholders of record as of\nNovember 6, 2026,” concluded Mullet.\n\nRecent Events\n\nAt the close of business on August 19, 2026, the Company completed its\nacquisition of Pacific West Bancorp (“Pacific West”) and its wholly-owned\nsubsidiary, Pacific West Bank. Pacific West shareholders received 430,149\nshares of FS Bancorp common stock and $16.9 million in cash, for a total\nconsideration of approximately $35.3 million based on the closing price of FS\nBancorp common stock on the acquisition date. \n\nThe acquisition was accounted for using the acquisition method of accounting.\n Accordingly, the purchase price was allocated to the assets acquired,\nincluding identifiable intangible assets, and the liabilities assumed, based\non their estimated fair values as of the acquisition date. These fair values\nrepresent management's best estimates based on information available and facts\nand circumstances in existence on the acquisition date and are subject to\nadjustment during a measurement period not to exceed one year from the\nacquisition date. \n\nThe Company acquired assets with a fair value of $476.5 million, including\nloans of $256.5 million and a core deposit intangible of $5.3 million, and\nassumed liabilities of $439.5 million, including deposits of $435.6 million.\n In accordance with Accounting Standards Update (“ASU”) 2025-08, which\nthe Company early adopted effective January 1, 2026, the allowance for credit\nlosses on acquired loans of $3.9 million was established at the acquisition\ndate through a gross-up of the loans' amortized cost rather than through the\nprovision for credit losses.  Because the fair value of net assets acquired\nexceeded the consideration paid, the Company recognized a preliminary bargain\npurchase gain of $1.7 million in noninterest income, which is not taxable. The\nCompany incurred $2.5 million in merger-related expenses during the quarter.\n\n2026 Third Quarter Highlights\n* Net income totaled $4.9 million for the third quarter of 2026, compared\nto $7.9 million for the previous quarter, and $9.2 million for the\ncomparable quarter one year ago;\n* Total deposits increased $418.3 million, or 17.1%, to $2.87 billion\nat September 30, 2026, compared to $2.45 billion at June 30, 2026, primarily\nreflecting the Pacific West Bancorp Acquisition (“Pacific West\nAcquisition”) which had $442.8 million in deposits at September 30, 2026.\nTransactional deposits increased $377.6 million during the quarter, of which\n$351.6 million was attributable to the Pacific West Acquisition. Compared to\nSeptember 30, 2025, total deposits increased $180.7 million, or 6.7%; \n* Loans receivable, net increased $379.1 million to $3.01 billion at September\n30, 2026, from $2.63 billion at June 30, 2026, and increased $408.5 million\nfrom $2.60 billion at September 30, 2025. The increases from both prior\nperiods reflected the Pacific West Acquisition, which included $252.7 million\nin loans that remained outstanding at September 30, 2026, and $131.7 million\nof loan growth during the third quarter;\n\n* The Commercial and Consumer Banking segment reported net income of $5.7\nmillion for the third quarter of 2026, compared to $6.8 million for the prior\nquarter and $8.4 million for the third quarter of 2025.  The Home Lending\nsegment reported a net loss of $806,000 for the third quarter of 2026 due to\nrising interest rates, compared to net income of $1.1 million for the prior\nquarter, and $775,000 for the third quarter of 2025;\n* Repurchased 44,664 shares of the Company's common stock in the open market\nfor $1.9 million in the third quarter of 2026, at an average price of\n$43.41 per share;\n* Book value per share decreased $0.52, or 1.2%, to $43.05 at September 30,\n2026, compared to $43.57 at June 30, 2026, and increased $2.62, or\n6.5%, from $40.43 at September 30, 2025. Tangible book value per share\n(non-GAAP financial measure) decreased $1.00 to $40.84 at September 30,\n2026, compared to $41.84 at June 30, 2026, and increased $2.41 from\n$38.43 at September 30, 2025. See, “Non-GAAP Financial Measures;” \n* Regulatory capital ratios at the Bank were 12.6% for total risk-based\ncapital and 11.2% for Tier 1 leverage capital at September 30, 2026, compared\nto 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital\nat June 30, 2026. The Bank remained well capitalized under applicable\nregulatory capital standards.\nSegment Reporting\n\nThe Company operates through two reportable segments: Commercial and Consumer\nBanking and Home Lending. The Commercial and Consumer Banking segment provides\ndiversified financial products and services to our commercial and consumer\ncustomers. These products and services include deposit products; residential,\nconsumer, business and commercial real estate lending and cash management\nservices. This segment also manages the Bank's investment portfolio and other\nassets. The Home Lending segment originates one-to-four-family residential\nmortgage loans primarily for sale in the secondary markets as well as loans\nheld for investment.\n\nThe tables below provide a summary of segment reporting at or for the three\nand nine months ended September 30, 2026 and 2025 (dollars in thousands):\n\n At or For the Three Months Ended September 30, 2026 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ((1)) $ 31,888 $ 3,798 $ 35,686 \n Provision for credit losses (2,855 ) (607 ) (3,462 ) \n Noninterest income ((2)) 4,776 1,400 6,176 \n Noninterest expense ((3)) (26,703 ) (5,611 ) (32,314 ) \n Income before provision for income taxes 7,106 (1,020 ) 6,086 \n (Provision) benefit for income taxes (1,374 ) 214 (1,160 ) \n Net income (loss) $ 5,732 $ (806 ) $ 4,926 \n Total average assets for period ended $ 2,685,235 $ 718,565 $ 3,403,800 \n Full-time employees (\"FTEs\") 513 113 626 \n \n\n\n\n At or For the Three Months Ended September 30, 2025 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ( (1)) $ 30,810 $ 2,880 $ 33,690 \n Provision for credit losses (2,150 ) (159 ) (2,309 ) \n Noninterest income ( (2)) 2,079 3,515 5,594 \n Noninterest expense ( (3)) (20,134 ) (5,254 ) (25,388 ) \n Income before provision for income taxes 10,605 982 11,587 \n Provision for income taxes (2,203 ) (207 ) (2,410 ) \n Net income $ 8,402 $ 775 $ 9,177 \n Total average assets for period ended $ 2,523,410 $ 662,047 $ 3,185,457 \n FTEs 460 115 575 \n \n\n\n\n At or For the Nine Months Ended September 30, 2026 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ((1)) $ 91,102 $ 9,777 $ 100,879 \n Provision for credit losses (7,697 ) (935 ) (8,632 ) \n Noninterest income ((2)) 9,980 7,747 17,727 \n Noninterest expense ((3)) (68,978 ) (14,960 ) (83,938 ) \n Income before provision for income taxes 24,407 1,629 26,036 \n Provision for income taxes (5,136 ) (208 ) (5,344 ) \n Net income $ 19,271 $ 1,421 $ 20,692 \n Total average assets for period ended $ 2,580,513 $ 682,123 $ 3,262,636 \n FTEs 513 113 626 \n\n\n\n At or For the Nine Months Ended September 30, 2025 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ((1)) $ 88,397 $ 8,387 $ 96,784 \n Provision for credit losses (5,320 ) (602 ) (5,922 ) \n Noninterest income ((2)) 6,621 9,269 15,890 \n Noninterest expense ((3)) (60,624 ) (15,321 ) (75,945 ) \n Income before provision for income taxes 29,074 1,733 30,807 \n Provision for income taxes (5,517 ) (364 ) (5,881 ) \n Net income $ 23,557 $ 1,369 $ 24,926 \n Total average assets for period ended $ 2,468,543 $ 643,460 $ 3,112,003 \n FTEs 460 115 575 \n\n________________________\n\n (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 \n 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 \n 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 \n segment assets. \n (2) Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently \n 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 \n 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 \n $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 \n 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. \n (3) Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For \n 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 \n $1.8 million and $5.5 million, respectively. \n \n\nAsset Summary\n\nThe following table summarizes the composition of total assets, including the\ndollar and percentage changes from the linked quarter and prior-year period.\n\n ASSETS Linked Quarter Prior Year \n (Dollars in thousands) September 30, June 30, September 30, Change Quarter Change \n 2026 2026 2025 $ % $ % \n Cash and due from banks $ 29,022 $ 12,835 $ 12,391 $ 16,187 126 % $ 16,631 134 % \n Interest-bearing deposits at other financial institutions 14,925 16,875 48,889 (1,950 ) (12 ) (33,964 ) (69 ) \n Total cash and cash equivalents 43,947 29,710 61,280 14,237 48 (17,333 ) (28 ) \n Securities available-for-sale, at fair value 342,185 269,460 311,695 72,725 27 30,490 10 \n Securities held-to-maturity, net 37,734 34,845 31,386 2,889 8 6,348 20 \n Loans held for sale, at fair value 22,820 30,548 38,579 (7,728 ) (25 ) (15,759 ) (41 ) \n Loans receivable, net 3,008,129 2,628,992 2,599,601 379,137 14 408,528 16 \n Accrued interest receivable 16,901 14,263 15,122 2,638 18 1,779 12 \n Premises and equipment, net 49,148 43,455 32,444 5,693 13 16,704 51 \n Long-lived assets held for sale 3,258 3,258 — — — 3,258 NM \n Operating lease right-of-use 7,799 6,655 6,832 1,144 17 967 14 \n Federal Home Loan Bank stock, at cost 13,073 14,420 7,975 (1,347 ) (9 ) 5,098 64 \n Deferred tax asset, net 9,469 6,441 6,767 3,028 47 2,702 40 \n Bank owned life insurance (“BOLI”), net 41,857 36,771 38,531 5,086 14 3,326 9 \n MSRs, held at the lower of cost or fair value 8,887 8,912 8,506 (25 ) — 381 4 \n Goodwill 3,592 3,592 3,592 — — — — \n Core deposit intangible, net 13,525 9,052 11,284 4,473 49 2,241 20 \n Other assets 54,327 38,706 35,231 15,621 40 19,096 54 \n TOTAL ASSETS $ 3,676,651 $ 3,179,080 $ 3,208,825 $ 497,571 16 % $ 467,826 15 % \n \n\nThe following table summarizes the composition of the Company's loan portfolio\nby loan category as of September 30, 2026, compared to June 30, 2026 and\nSeptember 30, 2025, including the dollar changes from the linked quarter and\nprior year period.       \n\n Prior \n LOAN PORTFOLIO Linked Year \n (Dollars in thousands) Quarter Quarter \n COMMERCIAL REAL ESTATE September 30, 2026 June 30, 2026 September 30, 2025 $ $ \n (\"CRE\") LOANS Amount Percent Amount Percent Amount Percent Change Change \n CRE owner occupied $ 224,764 7.3 % $ 184,136 6.9 % $ 170,714 6.5 % $ 40,628 $ 54,050 \n CRE non-owner occupied 298,385 9.8 188,258 7.1 172,713 6.6 110,127 125,672 \n Commercial and speculative construction and development 393,005 12.9 370,459 13.9 326,684 12.4 22,546 66,321 \n Multi-family 297,955 9.8 262,137 9.9 262,578 10.0 35,818 35,377 \n Total CRE loans 1,214,109 39.8 1,004,990 37.8 932,689 35.5 209,119 281,420 \n \n RESIDENTIAL REAL ESTATE LOANS \n One-to-four-family (excludes HFS) 758,537 24.9 660,518 24.8 629,712 23.9 98,019 128,825 \n Home equity 93,020 3.1 88,214 3.3 86,895 3.3 4,806 6,125 \n Residential custom construction 56,677 1.9 44,765 1.7 53,296 2.0 11,912 3,381 \n Total residential real estate loans 908,234 29.9 793,497 29.8 769,903 29.2 114,737 138,331 \n \n CONSUMER LOANS \n Indirect home improvement 493,505 16.2 502,151 18.9 527,597 20.1 (8,646 ) (34,092 ) \n Marine 68,838 2.3 66,941 2.5 70,220 2.7 1,897 (1,382 ) \n Other consumer 21,714 0.7 4,111 0.1 2,962 0.1 17,603 18,752 \n Total consumer loans 584,057 19.2 573,203 21.5 600,779 22.9 10,854 (16,722 ) \n \n COMMERCIAL BUSINESS LOANS \n Commercial and industrial (“C&I”) 322,572 10.6 281,181 10.6 311,173 11.8 41,391 11,399 \n Warehouse lending 15,620 0.5 7,286 0.3 15,113 0.6 8,334 507 \n Total commercial business loans 338,192 11.1 288,467 10.9 326,286 12.4 49,725 11,906 \n Total loans receivable, gross 3,044,592 100.0 % 2,660,157 100.0 % 2,629,657 100.0 % 384,435 414,935 \n \n Allowance for credit losses (\"ACL\") on loans (36,463 ) (31,165 ) (30,056 ) (5,298 ) (6,407 ) \n Total loans receivable, net $ 3,008,129 $ 2,628,992 $ 2,599,601 $ 379,137 $ 408,528 \n \n\nLoan growth during the three months ended September 30, 2026, reflected the\nPacific West Acquisition, which included $252.7 million in loans that remained\noutstanding at September 30, 2026, as well as $131.5 million of loan growth\nexcluding the acquired loans. Excluding the impact of the acquisition, loan\ngrowth was primarily concentrated in non-owner occupied commercial real estate\nand one-to-four family residential loans, which increased $29.8 million and\n$76.6 million, respectively, from June 30, 2026. Growth in one-to-four family\nresidential loans included the purchase of $36.7 million of adjustable-rate\nresidential mortgage loans. \n\nThe following table presents information on CRE loans scheduled to mature or\nreprice within the next two years, excluding loans that reprice automatically\nin connection with changes in the prime rate.\n\n Current \n (Dollars in Weighted \n thousands) For the Quarter Ended Average \n 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 \n Apartment $ 54,457 $ 10,183 $ 5,598 $ 7,892 $ 14,007 $ 16,719 $ 382 $ 3,874 $ 113,112 5.74 % \n Education/Worship — — — 2,345 — — — 5,822 8,167 5.82 % \n Industrial 10,122 6,038 3,608 6,277 5,290 3,155 7,261 7,588 49,339 5.33 % \n Mixed use 768 2,369 — 413 3,192 442 — 406 7,590 5.77 % \n Office 21,251 3,499 4,282 8,088 3,585 300 3,924 1,102 46,031 5.41 % \n Other 2,681 269 1,713 666 24 — 853 8,468 14,674 6.11 % \n Retail 3,272 3,737 5,753 7,326 — 14 432 — 20,534 4.73 % \n Senior housing and assisted living — — 1,327 — — 3,002 — — 4,329 6.83 % \n Total $ 92,551 $ 26,095 $ 22,281 $ 33,007 $ 26,098 $ 23,632 $ 12,852 $ 27,260 $ 263,776 5.57 % \n \n\nThe composition of CRE loans at the dates indicated were as follows:\n\n (Dollars in thousands) \n CRE by Type: September 30, 2026 June 30, 2026 September 30, 2025 \n CRE non-owner occupied: \n Office $63,682 $43,705 $42,537 \n Retail 56,375 42,042 36,827 \n Hospitality/restaurant 51,126 24,499 25,798 \n Industrial 44,576 20,824 14,352 \n Mixed use 38,154 18,489 18,663 \n Self-storage 21,089 18,767 19,001 \n Senior housing/assisted living 10,818 6,882 7,390 \n Other 10,220 9,189 3,632 \n Education/worship 2,345 2,359 2,441 \n Land — 1,502 2,072 \n Total CRE non-owner occupied 298,385 188,258 172,713 \n CRE owner occupied: \n Industrial 93,186 79,137 77,059 \n Office 44,588 31,862 31,981 \n Retail 30,272 27,433 17,399 \n Hospitality/restaurant 10,851 7,622 7,675 \n Education/worship 10,727 3,367 5,516 \n Other 10,654 10,539 10,521 \n Mixed use 9,720 9,239 4,622 \n Automobile related 6,697 6,745 7,164 \n Car wash 4,359 4,376 4,430 \n Agriculture 3,710 3,816 4,347 \n Total CRE owner occupied 224,764 184,136 170,714 \n Total $523,149 $372,394 $343,427 \n \n\nThe composition of construction loans at the dates indicated were as follows:\n\n (Dollars in thousands) September 30, 2026 June 30, 2026 September 30, 2025 \n Construction Types: Amount Percent Amount Percent Amount Percent \n Commercial construction – self storage $ 25,748 5.7 % $ 25,234 6.1 % $ 18,701 4.9 % \n Commercial construction – hotel 15,299 3.4 13,463 3.3 6,147 1.6 \n Commercial construction – retail 13,486 3.0 8,447 2.0 8,445 2.2 \n Commercial construction – office 7,164 1.6 7,164 1.7 9,250 2.4 \n Commercial construction – lots 2,945 0.7 — — — — \n Commercial construction – industrial 1,845 0.4 — — — — \n Commercial construction – auto service facility 1,465 0.3 — — — — \n Multi-family 52,127 11.6 46,186 11.1 29,751 7.8 \n Custom construction – single family residential and single family manufactured residential 43,921 9.8 33,944 8.2 44,299 11.7 \n Custom construction – land, lot and acquisition and development 12,766 2.8 10,821 2.6 8,998 2.4 \n Speculative residential construction – vertical 230,036 51.2 225,992 54.4 217,821 57.3 \n Speculative residential construction – land, lot and acquisition and development 42,890 9.5 43,973 10.6 36,668 9.7 \n Total $ 449,692 100.0 % $ 415,224 100.0 % $ 380,080 100.0 % \n \n\nOriginations of one-to-four-family loans to purchase and refinance a home for\nthe periods indicated were as follows:\n\n (Dollars in Prior Year \n thousands) For the Three Months Ended Linked Quarter Quarter \n September 30, 2026 June 30, 2026 September 30, 2025 $ % $ % \n Amount Percent Amount Percent Amount Percent Change Change Change Change \n Purchase $ 179,810 84.3 % $ 163,100 79.2 % $ 155,920 88.8 % $ 16,710 10.2 $ 23,890 15.3 % \n Refinance 33,367 15.7 42,741 20.8 19,714 11.2 (9,374 ) (21.9 ) 13,653 69.3 % \n Total $ 213,177 100.0 % $ 205,841 100.0 % $ 175,634 100.0 % $ 7,336 3.6 $ 37,543 21.4 % \n \n\n\n\n (Dollars in thousands) For the Nine Months Ended September 30, \n 2026 2025 \n Amount Percent Amount Percent $ Change % Change \n Purchase $ 482,012 76.8 % $ 446,631 85.8 % $ 35,381 7.9 % \n Refinance 145,438 23.2 73,697 14.2 71,741 97.3 % \n Total $ 627,450 100.0 % $ 520,328 100.0 % $ 107,122 20.6 % \n \n\nDuring the quarter ended September 30, 2026, the Company sold $122.9 million\nof one-to-four-family loans, compared to $156.1 million during the previous\nquarter and $156.4 million during the same quarter one year ago. Gross margins\non home loan sales increased to 3.55% for the quarter ended September 30,\n2026, compared to 2.98% in the previous quarter and increased from 3.14% in\nthe same quarter one year ago. Gross margins are defined as the margin on\nloans sold (cash sales) without the impact of deferred costs.\n\nLiabilities and Equity Summary\n\nThe following table summarizes the components and changes in deposits,\nborrowings, equity, and book value per common share at the dates indicated,\nincluding the dollar changes from the linked quarter and prior year period.\n\n (Dollars in thousands) Linked Prior Year \n DEPOSITS September 30, 2026 June 30, 2026 September 30, 2025 Quarter Quarter \n Transactional deposits: Amount Percent Amount Percent Amount Percent $ Change $ Change \n Noninterest-bearing checking $ 738,715 25.9 % $ 629,799 25.7 % $ 648,661 24.2 % $ 108,916 $ 90,054 \n Interest-bearing checking 293,069 10.2 209,721 8.6 199,527 7.4 83,348 93,542 \n Fintech partner deposits ((1)) 177,463 6.2 — — — — 177,463 177,463 \n Escrow accounts related to mortgages serviced ((2)) 19,976 0.7 12,057 0.5 17,192 0.6 7,919 2,784 \n Subtotal 1,229,223 43.0 851,577 34.8 865,380 32.2 377,646 363,843 \n Savings and money market: \n Savings 181,400 6.3 173,092 7.1 167,006 6.2 8,308 14,394 \n Money market 433,851 15.1 375,833 15.3 354,082 13.2 58,018 79,769 \n Subtotal 615,251 21.4 548,925 22.4 521,088 19.4 66,326 94,163 \n Certificates of deposit: \n CDs 946,667 33.0 922,022 37.6 930,371 34.6 24,645 16,296 \n Brokered Deposits \n Non-maturity brokered deposits 1,003 — 4,027 0.2 251 — (3,024 ) 752 \n Maturity brokered deposits 75,060 2.6 122,332 5.0 369,403 13.8 (47,272 ) (294,343 ) \n Subtotal 76,063 2.6 126,359 5.2 369,654 13.8 (50,296 ) (293,591 ) \n Total deposits $ 2,867,204 100.0 % $ 2,448,883 100.0 % $ 2,686,493 100.0 % $ 418,321 $ 180,711 \n Borrowings ( (3)) $ 373,500 $ 324,500 $ 129,305 $ 49,000 $ 244,195 \n Stockholders' equity $ 333,206 $ 318,960 $ 300,511 $ 14,246 $ 32,695 \n Book value per common share $ 43.05 $ 43.57 $ 40.43 $ (0.52 ) $ 2.62 \n \n\n\n\n_____________\n\n (1) Fintech partner deposits are deposits associated with the Bank’s Banking-as-a-Service relationships with financial technology companies. \n (2) Primarily noninterest-bearing accounts based on applicable state law. \n (3) Comprised of FHLB advances and Federal Reserve Bank borrowings. \n \n\nThe Company acquired its fintech partner deposits through the acquisition of\nPacific West Acquisition. Through these relationships, the Company provides\ndeposit and related banking services to fintech partners and their end\nusers. \n\nBrokered deposits declined from the prior quarter, partially offset by\nincreased borrowings, which offered a slightly lower cost of funds.\n\nIn the table above, the increase in stockholders’ equity from June 30, 2026,\nto September 30, 2026, was primarily due to $18.4 million in common stock\nissued in the Pacific West Acquisition, and net income of $4.9 million.\nChanges in the fair value of available‑for‑sale securities and interest\nrate swap cash flow hedges decreased accumulated other comprehensive income\n(“AOCI”) by $5.3 million, net of tax, reflecting changes in market\ninterest rates during the quarter. The increase in stockholders’ equity was\npartially offset by $1.9 million in open market share repurchases and $2.2\nmillion in cash dividends paid.\n\nThe Bank is considered “well capitalized” under the capital requirement\nestablished by the Federal Deposit Insurance Corporation (“FDIC”) and the\nCompany exceeded all regulatory capital requirements. At September 30, 2026,\ncapital ratios presented for the Bank and the Company were as follows:\n\n At September 30, 2026 \n Bank Company \n Total risk-based capital (to risk-weighted assets) 12.61 % 12.35 % \n Tier 1 leverage capital (to average assets) 11.24 % 9.89 % \n CET 1 capital (to risk-weighted assets) 11.44 % 10.07 % \n \n\nCredit Quality\n\nThe following tables summarize changes in the ACL on loans for the periods\nindicated and the balances of nonperforming and classified loans at the dates\nindicated.\n\n For the three months ended Linked Prior Year \n ACL ON LOANS Sep 30, Jun 30, Sep 30, Quarter Quarter \n (Dollars in thousands) 2026 2026 2025 $ Change $ Change \n Beginning ACL balance $ 31,165 $ 32,443 $ 32,189 $ (1,278 ) $ (1,024 ) \n Provision 2,953 2,559 1,851 394 1,102 \n Merger day 1 ACL ( (1)) 3,898 — — 3,898 3,898 \n Charge-offs \n Indirect (1,926 ) (2,067 ) (1,941 ) 141 15 \n Marine (186 ) (7 ) (55 ) (179 ) (131 ) \n Other (22 ) (49 ) (49 ) 27 27 \n Commercial and speculative construction and development — (2,277 ) (2,299 ) 2,277 2,299 \n Commercial business (1 ) (39 ) — 38 (1 ) \n Subtotal (2,135 ) (4,439 ) (4,344 ) 2,304 2,209 \n Recoveries \n Indirect 511 584 323 (73 ) 188 \n Marine 17 3 16 14 1 \n Other 4 15 12 (11 ) (8 ) \n Commercial business 50 — 9 50 41 \n Subtotal 582 602 360 (20 ) 222 \n Ending ACL balance $ 36,463 $ 31,165 $ 30,056 $ 5,298 $ 6,407 \n \n\n\n\n (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. \n \n\n\n\n NONPERFORMING LOANS Linked Prior Year \n (Dollars in thousands) Sep 30, Jun 30, Sep 30, Quarter Quarter \n CRE LOANS 2026 2026 2025 $ Change $ Change \n CRE owner occupied $ 3,542 $ 614 $ 2,047 $ 2,928 $ 1,495 \n CRE non-owner occupied 5,623 — — 5,623 5,623 \n Commercial and speculative construction and development 7,824 7,164 9,150 660 (1,326 ) \n Multi-family 130 — — 130 130 \n Total CRE loans 17,119 7,778 11,197 9,341 5,922 \n \n RESIDENTIAL REAL ESTATE LOANS \n One-to-four-family (excludes HFS) 2,327 1,973 1,799 354 528 \n Home equity 520 472 317 48 203 \n Total residential real estate loans 2,847 2,445 2,116 402 731 \n \n CONSUMER LOANS \n Indirect home improvement 4,421 4,799 3,802 (378 ) 619 \n Marine 540 606 620 (66 ) (80 ) \n Other consumer 15 19 40 (4 ) (25 ) \n Total consumer loans 4,976 5,424 4,462 (448 ) 514 \n \n COMMERCIAL BUSINESS LOANS \n C&I 199 — 600 199 (401 ) \n Total nonperforming loans $ 25,141 $ 15,647 $ 18,375 $ 9,494 $ 6,766 \n \n\nThe increase in nonperforming loans at September 30, 2026, compared\nto June 30, 2026, was primarily driven by $8.6 million of nonaccrual loans\nacquired as part of the Pacific West Acquisition. The acquired loans were on\nnonaccrual status as of the acquisition date and booked at fair market value\nunder acquisition accounting.\n\n CLASSIFIED LOANS Linked Prior Year \n (Dollars in thousands) Sep 30, Jun 30, Sep 30, Quarter Quarter \n CRE LOANS 2026 2026 2025 $ Change $ Change \n CRE owner occupied $ 4,224 $ 1,212 $ 3,080 $ 3,012 $ 1,144 \n CRE non-owner occupied 9,952 3,024 2,435 6,928 7,517 \n Commercial and speculative construction and development 7,824 7,164 9,150 660 (1,326 ) \n Multi-family 3,307 — — 3,307 3,307 \n Total CRE loans 25,307 11,400 14,665 13,907 10,642 \n \n RESIDENTIAL REAL ESTATE LOANS \n One-to-four-family (excludes HFS) 4,140 3,794 3,646 346 494 \n Home equity 520 472 317 48 203 \n Total residential real estate loans 4,660 4,266 3,963 394 697 \n \n CONSUMER LOANS \n Indirect home improvement 4,421 4,799 3,802 (378 ) 619 \n Marine 540 606 620 (66 ) (80 ) \n Other consumer 15 19 40 (4 ) (25 ) \n Total consumer loans 4,976 5,424 4,462 (448 ) 514 \n \n COMMERCIAL BUSINESS LOANS \n C&I 3,469 3,889 3,963 (420 ) (494 ) \n Total classified loans $ 38,412 $ 24,979 $ 27,053 $ 13,433 $ 11,359 \n \n\nThe increase in classified loans at September 30, 2026, compared to June 30,\n2026, was primarily driven by $12.5 million of classified loans acquired as\npart of the Pacific West Acquisition.\n\nOperating Results\n\nNet interest income increased $2.0 million to $35.7 million for the three\nmonths ended September 30, 2026, from $33.7 million for the three months\nended September 30, 2025.  The increase was primarily a result of a $2.7\nmillion increase in interest income on loans receivable, including interest\nincome from loans acquired in the Pacific West Acquisition and the impact of\nnet loan growth, partially offset by a $452,000 increase in total interest\nexpense.  The increase in total interest expense primarily reflected\nincreases of $843,000 in interest expense on borrowings and $438,000 in\ninterest expense on subordinated notes following their repricing at higher\ninterest rates in 2026, partially offset by an $829,000 decrease in interest\nexpense on deposits.  The decrease in deposit interest expense reflected\nfluctuations in market interest rates and changes in the composition of\ndeposits and borrowings, including the impact of balances acquired in the\nPacific West Acquisition.  \n\nFor the nine months ended September 30, 2026, net interest income increased\n$4.1 million to $100.9 million, from $96.8 million for the nine months\nended September 30, 2025, with a $6.0 million increase in total interest\nincome, partially offset by a $1.9 million increase in total interest expense.\n The $6.0 million increase in total interest income was primarily due to an\nincrease of $6.6 million in interest income on loans receivable, including\nfees, primarily attributable to loan growth and the Pacific West Acquisition.\nThe $1.9 million increase in total interest expense was primarily due to a\n$1.1 million increase in interest expense on subordinated notes, as noted\nabove, as well as a $576,000 increase in interest expense on borrowings, and a\n$214,000 increase in interest expense on deposits. \n\nNet interest margin (“NIM”) (annualized) was 4.36% for the three months\nended September 30, 2026, compared to 4.37% for the same period in the prior\nyear and 4.30% for the three months ended June 30, 2026. The six basis point\nincrease from the prior quarter was primarily attributable to lower funding\ncosts, including lower rates on certificates of deposit as those deposits\nrepriced and the addition of the slightly lower-cost funding base acquired in\nthe Pacific West Acquisition, as well as improved yields on the Company’s\ninvestment securities portfolio. Incremental interest accretion on loans\nacquired in the Pacific West Acquisition had an immaterial impact on NIM\nduring the period.\n\nThe average total cost of funds, including noninterest-bearing checking\naccounts, decreased nine basis points to 2.32% for the three months\nended September 30, 2026, from 2.41% for the three months ended September\n30, 2025. The decrease primarily reflected lower rates on certificates of\ndeposit as those deposits repriced, as well as the addition of slightly\nlower-cost funding from the Pacific West Acquisition. The average cost of\nfunds decreased two basis points to 2.37% for the nine months ended September\n30, 2026, from 2.39% for the nine months ended September 30, 2025.\n\nFor the three and nine months ended September 30, 2026, the provision for\ncredit losses on loans was $3.0 million and $8.2 million, compared to\n$2.3 million and $5.9 million for the three and nine months ended September\n30, 2025, respectively. The year-to-date increase in the provision primarily\nreflected an increase in net charge-offs of $649,000 and additional reserve\nactivity related to a single nonperforming construction and development loan.\n\nDuring the three months ended September 30, 2026, net charge-offs decreased\n$2.4 million to $1.6 million, compared to $4.0 million for the three months\nended September 30, 2025. The decrease was primarily attributable to a $2.3\nmillion charge-off on a commercial construction loan relationship recognized\nduring the three months ended September 30, 2025.\n\nDuring the nine months ended September 30, 2026, net charge-offs increased\n$649,000 to $7.5 million, compared to $6.9 million for the nine months\nended September 30, 2025. The increase was primarily due to higher net\ncharge-offs in the indirect home improvement portfolio.\n\nTotal noninterest income increased $582,000 to $6.2 million for the three\nmonths ended September 30, 2026, from $5.6 million for the three months ended\nSeptember 30, 2025. The increase was primarily due to the bargain purchase\ngain of $1.7 million from the Pacific West Acquisition, primarily offset by a\ndecrease of $971,000 in gain on sale of loans, reflecting market interest\nrates putting pressure on home loan sales, and a decrease of $231,000 in other\nnoninterest income. \n\nTotal noninterest income remained relatively unchanged at $6.2 million for the\nthree months ended September 30, 2026, compared to $6.2 million for the three\nmonths ended June 30, 2026, as the $1.7 million bargain purchase gain from\nthe Pacific West Acquisition was largely offset by a $1.1 million decrease in\ngain on sale of loans, reflecting lower loan sale volume as higher mortgage\nrates reduced saleable production, and a $742,000 fair value decrease on first\nlien residential mortgage loans accounted for under the fair value option,\nprimarily due to higher mortgage rates during the period.\n\nTotal noninterest income increased $1.8 million to $17.7 million for the nine\nmonths ended September 30, 2026, from $15.9 million for the nine months\nended September 30, 2025. This increase was mainly the result of a $1.7\nmillion bargain purchase gain from the Pacific West Acquisition, and a\n$322,000 increase in gain on sale of loans.\n\nTotal noninterest expense increased $6.9 million to $32.3 million for the\nthree months ended September 30, 2026, compared to $25.4 million for the\nthree months ended September 30, 2025. The $6.9 million increase was largely\ncomprised of a $2.8 million increase in salaries and benefits, primarily\nreflecting an increase in full-time-equivalent employees resulting from the\nPacific West Acquisition, as well as higher overall benefit costs, and $2.5\nmillion in acquisition-related costs associated with the transaction, compared\nto no acquisition costs in the prior year. \n\nTotal noninterest expense increased $6.2 million to $32.3 million for the\nthree months ended September 30, 2026, from $26.1 million for the three\nmonths ended June 30, 2026. The increase primarily reflected a $2.0 million\nincrease in acquisition-related costs, a $1.6 million increase in salaries and\nbenefits expense relating to the increase in full-time-equivalent employees\nfrom the Pacific West Acquisition and higher overall benefit costs, a $1.9\nmillion increase in operations expense, and a $426,000 increase in data\nprocessing expense. The increases in operations and data processing expenses\nreflected additional operating costs associated with the Pacific West\nAcquisition, while the increase in operations expense also reflected certain\nexpense adjustments recognized in the prior quarter.\n\nTotal noninterest expense increased $8.0 million to $83.9 million for the nine\nmonths ended September 30, 2026, from $75.9 million for the nine months\nended September 30, 2025. This increase included a $4.6 million increase in\nsalaries and benefits, a $3.2 million increase in acquisition costs, a\n$647,000 increase in occupancy, and a $573,000 increase in loan costs,\npartially offset by a $548,000 decrease in operations, primarily due to the\nsame reasons mentioned above.\n\nMerger-related activity during the third quarter was primarily focused on\ntransaction completion and integration planning associated with the Pacific\nWest Acquisition, including legal and professional fees, change-in-control\ncosts, investment banking fees, and initial system integration activities\nrelated to the planned fourth quarter 2026 core processing conversion.\n Acquisition-related expenses, as noted above, include these integration\ncosts as well as costs incurred to complete and consolidate the operations of\nthe two companies. Management anticipates that the majority of the remaining\nacquisition-related expenses, consisting primarily of system integration and\ncore conversion costs, will be recognized during the fourth quarter of 2026.\n\nAbout FS Bancorp\n\nFS Bancorp, Inc., a Washington corporation, is the holding company for 1st\nSecurity Bank of Washington. The Bank offers a range of loan and deposit\nservices primarily to small- and middle-market businesses and individuals in\nWashington and Oregon. It operates through 32 bank branches, one\nheadquarters office that provides loans and deposit services, and loan\nproduction offices in various suburban communities in the greater Puget Sound\narea, the Kennewick-Pasco-Richland metropolitan area of Washington, also known\nas the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank\nservices home mortgage customers across the Northwest, focusing on\nmarkets in Washington State including the Puget Sound, Tri-Cities, and\nVancouver, as well as various communities in Oregon.\n\nForward-Looking Statements\n\nWhen used in this press release and in other documents filed with or furnished\nto the Securities and Exchange Commission (the “SEC”), other public\nstockholder communications, or in oral statements made with the approval of an\nauthorized executive officer, the words or phrases “may,”  “believe,”\n“will,” “will likely result,” “are expected to,” “will\ncontinue,” “anticipate,”  “is anticipated,” “estimate,”\n“project,” “plans,” or similar expressions are intended to identify\n“forward-looking statements” within the meaning of the Private Securities\nLitigation Reform Act of 1995. Forward‑looking statements are not historical\nfacts but instead represent management's current expectations and forecasts\nregarding future events, many of which are inherently uncertain and outside of\nour control. Actual results may differ, possibly materially, from those\ncurrently expected or projected in these forward-looking statements.\n\nFactors that could cause the Company’s actual results to differ materially\nfrom those described in the forward-looking statements, include, but are not\nlimited to the following: adverse economic conditions in the Company’s local\nmarket areas, other markets in which the Company has lending relationships, or\nother aspects of the Company’s business operations or financial markets,\nincluding, without limitation, as a result of employment levels; labor\nshortages, the effects of inflation, recessionary pressures or slowing\neconomic growth; credit risks of lending activities, including changes in the\nlevel and direction of loan delinquencies and charge-offs and changes in\nestimates of the adequacy of the allowance for credit losses; changes in\ninterest rate levels and volatility, and the timing and pace of such changes,\nincluding actions by the Federal Reserve, which could adversely affect the\nCompany's revenues and expenses, the values of our assets and obligations, and\nthe availability and cost of capital and liquidity; inflationary pressures and\nrelated monetary and fiscal policy responses, and their impact on consumer and\nbusiness behavior; geopolitical developments and international conflicts\nincluding but not limited to tensions or instability in Eastern Europe, the\nMiddle East, South America, and Asia, or the imposition of new or increased\ntariffs and trade restrictions, which may disrupt financial markets; global\nsupply chains, commodity prices, or economic activity in specific industry\nsectors; the effects of a federal government shutdown, debt ceiling standoff,\nor other fiscal policy uncertainty; increased competitive pressures, including\nrepricing and competitors' pricing initiatives, and their impact on the\nCompany's market position, loan, and deposit products; adverse changes in the\nsecurities markets; the Company’s ability to execute its plans to grow its\nresidential construction lending, mortgage banking, and warehouse lending\noperations, and the geographic expansion of its indirect home improvement\nlending; challenges arising from expanding into new geographic markets,\nproducts, or services; secondary market conditions for loans and the\nCompany’s ability to originate loans for sale and sell loans in the\nsecondary market; volatility in the mortgage industry; fluctuations in\ndeposits; liquidity issues, including the Company's ability to borrow funds or\nraise additional capital, if necessary; the impact of bank failures or adverse\ndevelopments at other banks and related negative publicity about the banking\nindustry in general on investor and depositor sentiment; the ability to adapt\nto rapid technological changes, including advancements in artificial\nintelligence, digital banking platforms, and cybersecurity; legislation or\nregulatory changes, including but not limited to shifts in capital\nrequirements, banking regulation, tax laws, or consumer protection laws;\nvulnerabilities  in information systems or third-party service providers,\nincluding disruptions, breaches, or attacks; environmental, social and\ngovernance matters; the effects of climate change, severe weather events,\nnatural disasters, pandemics, epidemics and other public health crises, acts\nof war or terrorism, domestic political unrest and other external events on\nour business; and other factors described in the Company’s latest Annual\nReport on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed\nwith or furnished to the SEC which are available on the Company's website at\nwww.fsbwa.com and on the SEC's website at www.sec.gov.\n\nFurther, statements about the effects of the Company's acquisition of Pacific\nWest, completed on August 19, 2026, on the Company's business, financial\nresults, and condition may constitute forward-looking statements and are\nsubject to the risk that the actual effects may differ, possibly materially,\nfrom what is reflected in the forward-looking statements due to factors and\nfuture developments which are uncertain, unpredictable, and in many cases,\nbeyond the Company's control, including the following: the expected cost\nsavings, synergies and other financial benefits from the merger might not be\nrealized within the expected time frames or at all; the integration of the\ncombined company, including the conversion of operating systems and the\nretention of key personnel and customers, might not proceed as planned or may\nbe more difficult, time-consuming or costly than expected; merger-related and\nintegration expenses may be greater than expected; preliminary estimates of\nthe fair value of acquired assets and assumed liabilities may change during\nthe measuring period, and acquired loans may experience higher credit losses\nthan anticipated; and the combined company might not perform as well as\nexpected.\n\nAny of the forward-looking statements that the Company makes in this press\nrelease and in the other public statements are based upon management's beliefs\nand assumptions at the time they are made and may turn out to be incorrect\nbecause of the inaccurate assumptions the Company might make, because of the\nfactors illustrated above or because of other factors that cannot be foreseen\nby the Company. Therefore, these factors should be considered in evaluating\nthe forward‑looking statements, and undue reliance should not be placed on\nsuch statements. The Company does not undertake, and expressly disclaims any\nobligation, to update or revise any forward-looking statements, whether as a\nresult of new information, future events, or otherwise, except as required by\nlaw. \n\n FS BANCORP, INC. AND SUBSIDIARY \n CONSOLIDATED BALANCE SHEETS \n (Dollars in thousands) (Unaudited) \n \n Linked Prior Year \n Sepr 30, Jun 30, Sep 30, Quarter Quarter \n ASSETS 2026 2026 2025 % Change % Change \n Cash and due from banks $ 29,022 $ 12,835 $ 12,391 126 134 \n Interest-bearing deposits at other financial institutions 14,925 16,875 48,889 (12 ) (69 ) \n Total cash and cash equivalents 43,947 29,710 61,280 48 (28 ) \n Securities available-for-sale, at fair value 342,185 269,460 311,695 27 10 \n Securities held-to-maturity, net 37,734 34,845 31,386 8 20 \n Loans held for sale, at fair value 22,820 30,548 38,579 (25 ) (41 ) \n Loans receivable, net 3,008,129 2,628,992 2,599,601 14 16 \n Accrued interest receivable 16,901 14,263 15,122 18 12 \n Premises and equipment, net 49,148 43,455 32,444 13 51 \n Long-lived assets held for sale 3,258 3,258 — — 100 \n Operating lease right-of-use 7,799 6,655 6,832 17 14 \n Federal Home Loan Bank stock, at cost 13,073 14,420 7,975 (9 ) 64 \n Deferred tax asset, net 9,469 6,441 6,767 47 40 \n Bank owned life insurance (“BOLI”), net 41,857 36,771 38,531 14 9 \n MSRs, held at the lower of cost or fair value 8,887 8,912 8,506 — 4 \n Goodwill 3,592 3,592 3,592 — — \n Core deposit intangible, net 13,525 9,052 11,284 49 20 \n Other assets 54,327 38,706 35,231 40 54 \n TOTAL ASSETS $ 3,676,651 $ 3,179,080 $ 3,208,825 16 15 \n LIABILITIES \n Deposits: \n Noninterest-bearing accounts $ 758,691 $ 641,856 $ 665,852 18 14 \n Interest-bearing accounts 2,108,513 1,807,026 2,020,640 17 4 \n Total deposits 2,867,204 2,448,882 2,686,492 17 7 \n Borrowings 373,500 324,500 129,305 15 189 \n Subordinated notes: \n Principal amount 46,000 50,000 50,000 (8 ) (8 ) \n Unamortized debt issuance costs (265 ) (306 ) (356 ) (13 ) (26 ) \n Total subordinated notes less unamortized debt issuance costs 45,735 49,694 49,644 (8 ) (8 ) \n Operating lease liability 7,899 6,753 6,993 17 13 \n Other liabilities 49,107 30,291 35,880 62 37 \n Total liabilities 3,343,445 2,860,120 2,908,314 17 15 \n COMMITMENTS AND CONTINGENCIES \n STOCKHOLDERS’ EQUITY \n Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding — — — — — \n 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 \n Additional paid-in capital 57,702 40,886 43,907 41 31 \n Retained earnings 294,408 291,635 273,882 1 7 \n Accumulated other comprehensive loss, net of tax (18,983 ) (13,635 ) (17,353 ) 39 9 \n Total stockholders’ equity 333,206 318,960 300,511 4 11 \n TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,676,651 $ 3,179,080 $ 3,208,825 16 15 \n \n\n\n\n FS BANCORP, INC. AND SUBSIDIARY \n CONSOLIDATED STATEMENTS OF INCOME \n (Dollars in thousands, except per share amounts) (Unaudited) \n \n Three Months Ended Linked Prior Year \n Sep 30, Jun 30, Sep 30, Quarter Quarter \n INTEREST INCOME 2026 2026 2025 % Change % Change \n Loans receivable, including fees $ 49,346 $ 46,202 $ 46,664 7 6 \n 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 ) \n Total interest and dividend income 53,421 49,662 50,973 8 5 \n INTEREST EXPENSE \n Deposits 14,033 13,908 14,862 1 (6 ) \n Borrowings 2,778 2,197 1,935 26 44 \n Subordinated notes 924 909 486 2 90 \n Total interest expense 17,735 17,014 17,283 4 3 \n NET INTEREST INCOME 35,686 32,648 33,690 9 6 \n PROVISION FOR CREDIT LOSSES 3,462 2,641 2,309 31 50 \n NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 32,224 30,007 31,381 7 3 \n NONINTEREST INCOME \n Service charges and fee income 2,424 2,281 2,326 6 4 \n Bargain purchase gain 1,658 — — NM NM \n Gain on sale of loans 1,468 2,581 2,439 (43 ) (40 ) \n Gain on sale of investment securities, net 11 — — NM NM \n Earnings on cash surrender value of BOLI 286 263 269 9 6 \n Other noninterest income 329 1,025 560 (68 ) (41 ) \n Total noninterest income 6,176 6,150 5,594 — 10 \n NONINTEREST EXPENSE \n Salaries and benefits 17,178 15,570 14,415 10 19 \n Operations 4,616 2,699 3,974 71 16 \n Occupancy 2,073 1,938 1,744 7 19 \n Data processing 2,252 1,826 1,784 23 26 \n Loan costs 803 900 746 (11 ) 8 \n Professional and board fees 1,067 1,060 1,093 1 (2 ) \n FDIC insurance 630 531 592 19 6 \n Marketing and advertising 449 445 259 1 73 \n Acquisition costs 2,463 417 — 491 NM \n Amortization of core deposit intangible 788 722 787 9 — \n Recovery of servicing rights (5 ) (4 ) (6 ) 25 (17 ) \n Total noninterest expense 32,314 26,104 25,388 24 27 \n INCOME BEFORE PROVISION FOR INCOME TAXES 6,086 10,053 11,587 (39 ) (47 ) \n PROVISION FOR INCOME TAXES 1,160 2,117 2,410 (45 ) (52 ) \n NET INCOME $ 4,926 $ 7,936 $ 9,177 (38 ) (46 ) \n Basic earnings per share $ 0.65 $ 1.06 $ 1.20 (39 ) (46 ) \n Diluted earnings per share $ 0.63 $ 1.04 $ 1.18 (39 ) (47 ) \n \n\n\n\n FS BANCORP, INC. AND SUBSIDIARY \n CONSOLIDATED STATEMENTS OF INCOME \n (Dollars in thousands, except per share amounts) (Unaudited) \n \n Year \n Nine Months Ended September 30, Over Year \n INTEREST INCOME 2026 2025 % Change \n Loans receivable, including fees $ 141,560 $ 135,004 5 \n Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions 10,856 11,459 (5 ) \n Total interest and dividend income 152,416 146,463 4 \n INTEREST EXPENSE \n Deposits 42,654 42,440 1 \n Borrowings 6,359 5,783 10 \n Subordinated notes 2,524 1,456 73 \n Total interest expense 51,537 49,679 4 \n NET INTEREST INCOME 100,879 96,784 4 \n PROVISION FOR CREDIT LOSSES 8,632 5,922 46 \n NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 92,247 90,862 2 \n NONINTEREST INCOME \n Service charges and fee income 6,778 6,894 (2 ) \n Bargain purchase gain 1,658 — NM \n Gain on sale of loans 6,433 6,111 5 \n Gain on sale of investment securities, net 11 — NM \n Earnings on cash surrender value of BOLI 808 773 5 \n Other noninterest income 2,039 2,112 (3 ) \n Total noninterest income 17,727 15,890 12 \n NONINTEREST EXPENSE \n Salaries and benefits 47,602 43,037 11 \n Operations 10,695 11,243 (5 ) \n Occupancy 5,887 5,240 12 \n Data processing 5,672 5,966 (5 ) \n Loan costs 2,585 2,012 28 \n Professional and board fees 3,141 3,435 (9 ) \n FDIC insurance 1,788 1,684 6 \n Marketing and advertising 1,203 879 37 \n Acquisition costs 3,175 — NM \n Amortization of core deposit intangible 2,254 2,426 (7 ) \n (Recovery) impairment of MSRs (64 ) 23 (378 ) \n Total noninterest expense 83,938 75,945 11 \n INCOME BEFORE PROVISION FOR INCOME TAXES 26,036 30,807 (15 ) \n PROVISION FOR INCOME TAXES 5,344 5,881 (9 ) \n NET INCOME $ 20,692 $ 24,926 (17 ) \n Basic earnings per share $ 2.67 $ 3.23 (17 ) \n Diluted earnings per share $ 2.62 $ 3.18 (18 ) \n \n\nKEY FINANCIAL RATIOS AND DATA (Unaudited)\n\n For the Three Months Ended \n September 30, June 30, September 30, \n PERFORMANCE RATIOS: 2026 2026 2025 \n Return on assets (ratio of net income to average total assets) ((1)) 0.57 % 1.00 % 1.14 % \n Return on equity (ratio of net income to average total stockholders' equity) ( (1)) 5.85 9.94 11.97 \n Yield on average interest-earning assets ((1)) 6.52 6.54 6.61 \n Average total cost of funds ((1)) 2.32 2.41 2.41 \n Interest rate spread information – average during period 4.20 4.13 4.20 \n Net interest margin ((1)) 4.36 4.30 4.37 \n Operating expense to average total assets ((1)) 3.77 3.29 3.16 \n Average interest-earning assets to average interest-bearing liabilities 139.79 139.32 140.80 \n Efficiency ratio ((2)) 77.19 67.28 64.63 \n Common equity ratio (ratio of stockholders' equity to total assets) 9.06 10.03 9.37 \n Tangible common equity ratio ((3)) 8.64 9.67 8.94 \n \n\n\n\n For the Nine Months Ended \n September 30, September 30, \n PERFORMANCE RATIOS: 2026 2025 \n Return on assets (ratio of net income to average total assets) ((1)) 0.85 % 1.07 % \n Return on equity (ratio of net income to average total stockholders' equity) ((1)) 8.55 11.03 \n Yield on average interest-earning assets ((1)) 6.53 6.55 \n Average total cost of funds ((1)) 2.37 2.39 \n Interest rate spread information – average during period 4.16 4.16 \n Net interest margin ((1)) 4.32 4.33 \n Operating expense to average total assets ((1)) 3.44 3.26 \n Average interest-earning assets to average interest-bearing liabilities 139.66 141.54 \n Efficiency ratio ((2)) 70.77 67.40 \n \n\n\n\n September 30, June 30, September 30, \n ASSET QUALITY RATIOS AND DATA: 2026 2026 2025 \n Nonperforming assets to total assets at end of period ((4)) 0.68 % 0.49 % 0.57 % \n Nonperforming loans to total gross loans (excluding loans HFS) ((5)) 0.83 0.59 0.70 \n ACL – loans to nonperforming loans ( (5)) 145.03 199.15 163.77 \n ACL – loans to total gross loans (excluding loans HFS) 1.20 1.17 1.14 \n \n\n\n\n At or For the Three Months Ended \n Sep 30, Jun 30, Sep 30, \n PER COMMON SHARE DATA: 2026 2026 2025 \n Basic earnings per share $ 0.65 $ 1.06 $ 1.20 \n Diluted earnings per share $ 0.63 $ 1.04 $ 1.18 \n Weighted average basic shares outstanding 7,524,107 7,340,326 7,488,139 \n Weighted average diluted shares outstanding 7,677,572 7,483,199 7,623,243 \n Common shares outstanding at end of period 7,739,797 ((6)) 7,320,801 ((7)) 7,432,359 ((8)) \n Book value per share using common shares outstanding $ 43.05 $ 43.57 $ 40.43 \n Tangible book value per share using common shares outstanding ( (9)) $ 40.84 $ 41.84 $ 38.43 \n \n\n\n\n\n\n (1) Annualized. \n (2) Total noninterest expense as a percentage of net interest income and total noninterest income. \n (3) Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below. \n (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. \n (5) Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. \n (6) Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares. \n (7) Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. \n (8) Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares. \n (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. \n \n\n\n\n (Dollars in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30, QTR Over QTR YTD Over YTD \n Average Balances 2026 2025 2026 2025 $ Change $ Change \n Assets \n Loans receivable, net ((1)) $ 2,864,219 $ 2,651,111 $ 2,754,304 $ 2,608,338 $ 213,108 $ 145,966 \n Investment securities - taxable 277,518 285,111 259,243 267,657 (7,593 ) (8,414 ) \n Investment securities - nontaxable 76,796 79,341 77,462 78,386 (2,545 ) (924 ) \n Interest-bearing deposits and certificates of deposit at other financial institutions 14,954 34,857 17,251 23,575 (19,903 ) (6,324 ) \n FHLB stock, at cost 14,321 10,082 11,257 10,262 4,239 995 \n Total interest-earning assets 3,247,808 3,060,502 3,119,517 2,988,218 187,306 131,299 \n Noninterest-earning assets 155,992 124,955 143,119 123,785 31,037 19,334 \n Total assets $ 3,403,800 $ 3,185,457 $ 3,262,636 $ 3,112,003 $ 218,343 $ 150,633 \n Liabilities \n Interest-bearing deposit accounts $ 1,992,076 $ 1,947,830 $ 1,970,700 $ 1,880,007 $ 44,246 $ 90,693 \n Borrowings 283,054 176,234 213,712 181,633 106,820 32,079 \n Subordinated notes 48,230 49,633 49,188 49,617 (1,403 ) (429 ) \n Total interest-bearing liabilities 2,323,360 2,173,697 2,233,600 2,111,257 149,663 122,343 \n Noninterest-bearing deposit accounts 707,196 668,908 670,230 663,536 38,288 6,694 \n Other noninterest-bearing liabilities 39,239 38,746 35,051 35,081 493 (30 ) \n Total liabilities $ 3,069,795 $ 2,881,351 $ 2,938,881 $ 2,809,874 $ 188,444 $ 129,007 \n \n\n\n\n___________\n\n(1) Includes loans HFS.\n\nNon-GAAP Financial Measures:\n\nIn addition to financial results presented in accordance with generally\naccepted accounting principles utilized in the United States (“GAAP”),\nthis earnings release presents non-GAAP financial measures that include\ntangible book value per share, and tangible common equity ratio. Management\nbelieves that providing the Company’s tangible book value per share and\ntangible common equity ratio provides useful supplemental information\nregarding the Company’s capital position and facilitates comparisons of the\nquality and composition of the Company's capital over time and with that of\nits peers. Where applicable, the Company has also presented comparable GAAP\ninformation.\n\nThese non-GAAP financial measures have inherent limitations, may not be\ncalculated in the same manner by other companies, and should not be considered\nin isolation or as a substitute for the Company’s financial position,\nresults of operations or other financial measures determined in accordance\nwith GAAP. These non-GAAP measures may not be comparable to similarly titled\nmeasures reported by other companies.\n\nReconciliation of the GAAP book value per share and common equity ratio to the\nnon-GAAP tangible book value per share and tangible common equity ratio is\npresented below.\n\n (Dollars in thousands, except share and per share amounts) September 30, June 30, September 30, \n Tangible Book Value Per Share: 2026 2026 2025 \n Stockholders' equity (GAAP) $ 333,206 $ 318,960 $ 300,511 \n Less: goodwill and core deposit intangible, net (17,117 ) (12,644 ) (14,876 ) \n Tangible common stockholders' equity (non-GAAP) $ 316,089 $ 306,316 $ 285,635 \n \n Common shares outstanding at end of period 7,739,797 ((1)) 7,320,801 ((2)) 7,432,359 ((3)) \n \n Book value per share (GAAP) $ 43.05 $ 43.57 $ 40.43 \n Tangible book value per share (non-GAAP) $ 40.84 $ 41.84 $ 38.43 \n \n Tangible Common Equity Ratio: \n Total assets (GAAP) $ 3,676,651 $ 3,179,080 $ 3,208,825 \n Less: goodwill and core deposit intangible assets (17,117 ) (12,644 ) (14,876 ) \n Tangible assets (non-GAAP) $ 3,659,534 $ 3,166,436 $ 3,193,949 \n \n Common equity ratio (GAAP) 9.06 % 10.03 % 9.37 % \n Tangible common equity ratio (non-GAAP) 8.64 9.67 8.94 \n \n\n_________________________\n\n (1) Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares. \n (2) Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. \n (3) Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares. \n \n\nContacts:\nMatthew D. Mullet,\nPresident and Chief Executive Officer\nPhillip D. Whittington,\nChief Financial Officer\n\n(425) 771-5299\nwww.FSBWA.com\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/16e3476e-9995-4216-9cc5-e21b9cbded0c)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNX9ngrdG-20261021","title":"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 ","author":"Globe Newswire","ticker":"FSBW","created":"2026-10-21T20:30:03.165Z","tickers":["FSBW"],"exchange":"NASDAQ","article_body":"MOUNTLAKE TERRACE, Wash., Oct. 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc.\n(NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank\nof Washington (the “Bank”) today reported 2026 third quarter net income of\n$4.9 million, or $0.63 per diluted share, compared to $7.9 million, or $1.04\nper diluted share, for the prior quarter, and $9.2 million, or $1.18 per\ndiluted share, for the comparable quarter one year ago. For the nine months\nended September 30, 2026, net income was $20.7 million, or $2.62 per diluted\nshare, compared to net income of $24.9 million, or $3.18 per diluted share,\nfor the comparable nine-month period in 2025.\n\n“We are excited to work with the Pacific West Bank team members to further\nexpand the deposit and loan opportunities in the greater Portland, Oregon and\nVancouver, Washington markets, and we appreciate all of the hard work that\nwent into the successful systems integration, effective October 5, 2026,\nthrough the collaboration of our newly combined teams,” stated Matthew\nMullet, President and CEO of FS Bancorp, Inc. “We are also pleased to\nannounce that our Board of Directors has approved our 55th consecutive\nquarterly cash dividend of $0.29 per common share, demonstrating our\ncommitment to returning capital to long-term shareholders. The cash\ndividend will be paid on November 20, 2026, to shareholders of record as of\nNovember 6, 2026,” concluded Mullet.\n\nRecent Events\n\nAt the close of business on August 19, 2026, the Company completed its\nacquisition of Pacific West Bancorp (“Pacific West”) and its wholly-owned\nsubsidiary, Pacific West Bank. Pacific West shareholders received 430,149\nshares of FS Bancorp common stock and $16.9 million in cash, for a total\nconsideration of approximately $35.3 million based on the closing price of FS\nBancorp common stock on the acquisition date. \n\nThe acquisition was accounted for using the acquisition method of accounting.\n Accordingly, the purchase price was allocated to the assets acquired,\nincluding identifiable intangible assets, and the liabilities assumed, based\non their estimated fair values as of the acquisition date. These fair values\nrepresent management's best estimates based on information available and facts\nand circumstances in existence on the acquisition date and are subject to\nadjustment during a measurement period not to exceed one year from the\nacquisition date. \n\nThe Company acquired assets with a fair value of $476.5 million, including\nloans of $256.5 million and a core deposit intangible of $5.3 million, and\nassumed liabilities of $439.5 million, including deposits of $435.6 million.\n In accordance with Accounting Standards Update (“ASU”) 2025-08, which\nthe Company early adopted effective January 1, 2026, the allowance for credit\nlosses on acquired loans of $3.9 million was established at the acquisition\ndate through a gross-up of the loans' amortized cost rather than through the\nprovision for credit losses.  Because the fair value of net assets acquired\nexceeded the consideration paid, the Company recognized a preliminary bargain\npurchase gain of $1.7 million in noninterest income, which is not taxable. The\nCompany incurred $2.5 million in merger-related expenses during the quarter.\n\n2026 Third Quarter Highlights\n* Net income totaled $4.9 million for the third quarter of 2026, compared\nto $7.9 million for the previous quarter, and $9.2 million for the\ncomparable quarter one year ago;\n* Total deposits increased $418.3 million, or 17.1%, to $2.87 billion\nat September 30, 2026, compared to $2.45 billion at June 30, 2026, primarily\nreflecting the Pacific West Bancorp Acquisition (“Pacific West\nAcquisition”) which had $442.8 million in deposits at September 30, 2026.\nTransactional deposits increased $377.6 million during the quarter, of which\n$351.6 million was attributable to the Pacific West Acquisition. Compared to\nSeptember 30, 2025, total deposits increased $180.7 million, or 6.7%; \n* Loans receivable, net increased $379.1 million to $3.01 billion at September\n30, 2026, from $2.63 billion at June 30, 2026, and increased $408.5 million\nfrom $2.60 billion at September 30, 2025. The increases from both prior\nperiods reflected the Pacific West Acquisition, which included $252.7 million\nin loans that remained outstanding at September 30, 2026, and $131.7 million\nof loan growth during the third quarter;\n\n* The Commercial and Consumer Banking segment reported net income of $5.7\nmillion for the third quarter of 2026, compared to $6.8 million for the prior\nquarter and $8.4 million for the third quarter of 2025.  The Home Lending\nsegment reported a net loss of $806,000 for the third quarter of 2026 due to\nrising interest rates, compared to net income of $1.1 million for the prior\nquarter, and $775,000 for the third quarter of 2025;\n* Repurchased 44,664 shares of the Company's common stock in the open market\nfor $1.9 million in the third quarter of 2026, at an average price of\n$43.41 per share;\n* Book value per share decreased $0.52, or 1.2%, to $43.05 at September 30,\n2026, compared to $43.57 at June 30, 2026, and increased $2.62, or\n6.5%, from $40.43 at September 30, 2025. Tangible book value per share\n(non-GAAP financial measure) decreased $1.00 to $40.84 at September 30,\n2026, compared to $41.84 at June 30, 2026, and increased $2.41 from\n$38.43 at September 30, 2025. See, “Non-GAAP Financial Measures;” \n* Regulatory capital ratios at the Bank were 12.6% for total risk-based\ncapital and 11.2% for Tier 1 leverage capital at September 30, 2026, compared\nto 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital\nat June 30, 2026. The Bank remained well capitalized under applicable\nregulatory capital standards.\nSegment Reporting\n\nThe Company operates through two reportable segments: Commercial and Consumer\nBanking and Home Lending. The Commercial and Consumer Banking segment provides\ndiversified financial products and services to our commercial and consumer\ncustomers. These products and services include deposit products; residential,\nconsumer, business and commercial real estate lending and cash management\nservices. This segment also manages the Bank's investment portfolio and other\nassets. The Home Lending segment originates one-to-four-family residential\nmortgage loans primarily for sale in the secondary markets as well as loans\nheld for investment.\n\nThe tables below provide a summary of segment reporting at or for the three\nand nine months ended September 30, 2026 and 2025 (dollars in thousands):\n\n At or For the Three Months Ended September 30, 2026 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ((1)) $ 31,888 $ 3,798 $ 35,686 \n Provision for credit losses (2,855 ) (607 ) (3,462 ) \n Noninterest income ((2)) 4,776 1,400 6,176 \n Noninterest expense ((3)) (26,703 ) (5,611 ) (32,314 ) \n Income before provision for income taxes 7,106 (1,020 ) 6,086 \n (Provision) benefit for income taxes (1,374 ) 214 (1,160 ) \n Net income (loss) $ 5,732 $ (806 ) $ 4,926 \n Total average assets for period ended $ 2,685,235 $ 718,565 $ 3,403,800 \n Full-time employees (\"FTEs\") 513 113 626 \n \n\n\n\n At or For the Three Months Ended September 30, 2025 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ( (1)) $ 30,810 $ 2,880 $ 33,690 \n Provision for credit losses (2,150 ) (159 ) (2,309 ) \n Noninterest income ( (2)) 2,079 3,515 5,594 \n Noninterest expense ( (3)) (20,134 ) (5,254 ) (25,388 ) \n Income before provision for income taxes 10,605 982 11,587 \n Provision for income taxes (2,203 ) (207 ) (2,410 ) \n Net income $ 8,402 $ 775 $ 9,177 \n Total average assets for period ended $ 2,523,410 $ 662,047 $ 3,185,457 \n FTEs 460 115 575 \n \n\n\n\n At or For the Nine Months Ended September 30, 2026 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ((1)) $ 91,102 $ 9,777 $ 100,879 \n Provision for credit losses (7,697 ) (935 ) (8,632 ) \n Noninterest income ((2)) 9,980 7,747 17,727 \n Noninterest expense ((3)) (68,978 ) (14,960 ) (83,938 ) \n Income before provision for income taxes 24,407 1,629 26,036 \n Provision for income taxes (5,136 ) (208 ) (5,344 ) \n Net income $ 19,271 $ 1,421 $ 20,692 \n Total average assets for period ended $ 2,580,513 $ 682,123 $ 3,262,636 \n FTEs 513 113 626 \n\n\n\n At or For the Nine Months Ended September 30, 2025 \n Condensed income statement: Commercial and Consumer Banking Home Lending Total \n Net interest income ((1)) $ 88,397 $ 8,387 $ 96,784 \n Provision for credit losses (5,320 ) (602 ) (5,922 ) \n Noninterest income ((2)) 6,621 9,269 15,890 \n Noninterest expense ((3)) (60,624 ) (15,321 ) (75,945 ) \n Income before provision for income taxes 29,074 1,733 30,807 \n Provision for income taxes (5,517 ) (364 ) (5,881 ) \n Net income $ 23,557 $ 1,369 $ 24,926 \n Total average assets for period ended $ 2,468,543 $ 643,460 $ 3,112,003 \n FTEs 460 115 575 \n\n________________________\n\n (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 \n 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 \n 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 \n segment assets. \n (2) Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently \n 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 \n 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 \n $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 \n 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. \n (3) Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For \n 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 \n $1.8 million and $5.5 million, respectively. \n \n\nAsset Summary\n\nThe following table summarizes the composition of total assets, including the\ndollar and percentage changes from the linked quarter and prior-year period.\n\n ASSETS Linked Quarter Prior Year \n (Dollars in thousands) September 30, June 30, September 30, Change Quarter Change \n 2026 2026 2025 $ % $ % \n Cash and due from banks $ 29,022 $ 12,835 $ 12,391 $ 16,187 126 % $ 16,631 134 % \n Interest-bearing deposits at other financial institutions 14,925 16,875 48,889 (1,950 ) (12 ) (33,964 ) (69 ) \n Total cash and cash equivalents 43,947 29,710 61,280 14,237 48 (17,333 ) (28 ) \n Securities available-for-sale, at fair value 342,185 269,460 311,695 72,725 27 30,490 10 \n Securities held-to-maturity, net 37,734 34,845 31,386 2,889 8 6,348 20 \n Loans held for sale, at fair value 22,820 30,548 38,579 (7,728 ) (25 ) (15,759 ) (41 ) \n Loans receivable, net 3,008,129 2,628,992 2,599,601 379,137 14 408,528 16 \n Accrued interest receivable 16,901 14,263 15,122 2,638 18 1,779 12 \n Premises and equipment, net 49,148 43,455 32,444 5,693 13 16,704 51 \n Long-lived assets held for sale 3,258 3,258 — — — 3,258 NM \n Operating lease right-of-use 7,799 6,655 6,832 1,144 17 967 14 \n Federal Home Loan Bank stock, at cost 13,073 14,420 7,975 (1,347 ) (9 ) 5,098 64 \n Deferred tax asset, net 9,469 6,441 6,767 3,028 47 2,702 40 \n Bank owned life insurance (“BOLI”), net 41,857 36,771 38,531 5,086 14 3,326 9 \n MSRs, held at the lower of cost or fair value 8,887 8,912 8,506 (25 ) — 381 4 \n Goodwill 3,592 3,592 3,592 — — — — \n Core deposit intangible, net 13,525 9,052 11,284 4,473 49 2,241 20 \n Other assets 54,327 38,706 35,231 15,621 40 19,096 54 \n TOTAL ASSETS $ 3,676,651 $ 3,179,080 $ 3,208,825 $ 497,571 16 % $ 467,826 15 % \n \n\nThe following table summarizes the composition of the Company's loan portfolio\nby loan category as of September 30, 2026, compared to June 30, 2026 and\nSeptember 30, 2025, including the dollar changes from the linked quarter and\nprior year period.       \n\n Prior \n LOAN PORTFOLIO Linked Year \n (Dollars in thousands) Quarter Quarter \n COMMERCIAL REAL ESTATE September 30, 2026 June 30, 2026 September 30, 2025 $ $ \n (\"CRE\") LOANS Amount Percent Amount Percent Amount Percent Change Change \n CRE owner occupied $ 224,764 7.3 % $ 184,136 6.9 % $ 170,714 6.5 % $ 40,628 $ 54,050 \n CRE non-owner occupied 298,385 9.8 188,258 7.1 172,713 6.6 110,127 125,672 \n Commercial and speculative construction and development 393,005 12.9 370,459 13.9 326,684 12.4 22,546 66,321 \n Multi-family 297,955 9.8 262,137 9.9 262,578 10.0 35,818 35,377 \n Total CRE loans 1,214,109 39.8 1,004,990 37.8 932,689 35.5 209,119 281,420 \n \n RESIDENTIAL REAL ESTATE LOANS \n One-to-four-family (excludes HFS) 758,537 24.9 660,518 24.8 629,712 23.9 98,019 128,825 \n Home equity 93,020 3.1 88,214 3.3 86,895 3.3 4,806 6,125 \n Residential custom construction 56,677 1.9 44,765 1.7 53,296 2.0 11,912 3,381 \n Total residential real estate loans 908,234 29.9 793,497 29.8 769,903 29.2 114,737 138,331 \n \n CONSUMER LOANS \n Indirect home improvement 493,505 16.2 502,151 18.9 527,597 20.1 (8,646 ) (34,092 ) \n Marine 68,838 2.3 66,941 2.5 70,220 2.7 1,897 (1,382 ) \n Other consumer 21,714 0.7 4,111 0.1 2,962 0.1 17,603 18,752 \n Total consumer loans 584,057 19.2 573,203 21.5 600,779 22.9 10,854 (16,722 ) \n \n COMMERCIAL BUSINESS LOANS \n Commercial and industrial (“C&I”) 322,572 10.6 281,181 10.6 311,173 11.8 41,391 11,399 \n Warehouse lending 15,620 0.5 7,286 0.3 15,113 0.6 8,334 507 \n Total commercial business loans 338,192 11.1 288,467 10.9 326,286 12.4 49,725 11,906 \n Total loans receivable, gross 3,044,592 100.0 % 2,660,157 100.0 % 2,629,657 100.0 % 384,435 414,935 \n \n Allowance for credit losses (\"ACL\") on loans (36,463 ) (31,165 ) (30,056 ) (5,298 ) (6,407 ) \n Total loans receivable, net $ 3,008,129 $ 2,628,992 $ 2,599,601 $ 379,137 $ 408,528 \n \n\nLoan growth during the three months ended September 30, 2026, reflected the\nPacific West Acquisition, which included $252.7 million in loans that remained\noutstanding at September 30, 2026, as well as $131.5 million of loan growth\nexcluding the acquired loans. Excluding the impact of the acquisition, loan\ngrowth was primarily concentrated in non-owner occupied commercial real estate\nand one-to-four family residential loans, which increased $29.8 million and\n$76.6 million, respectively, from June 30, 2026. Growth in one-to-four family\nresidential loans included the purchase of $36.7 million of adjustable-rate\nresidential mortgage loans. \n\nThe following table presents information on CRE loans scheduled to mature or\nreprice within the next two years, excluding loans that reprice automatically\nin connection with changes in the prime rate.\n\n Current \n (Dollars in Weighted \n thousands) For the Quarter Ended Average \n 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 \n Apartment $ 54,457 $ 10,183 $ 5,598 $ 7,892 $ 14,007 $ 16,719 $ 382 $ 3,874 $ 113,112 5.74 % \n Education/Worship — — — 2,345 — — — 5,822 8,167 5.82 % \n Industrial 10,122 6,038 3,608 6,277 5,290 3,155 7,261 7,588 49,339 5.33 % \n Mixed use 768 2,369 — 413 3,192 442 — 406 7,590 5.77 % \n Office 21,251 3,499 4,282 8,088 3,585 300 3,924 1,102 46,031 5.41 % \n Other 2,681 269 1,713 666 24 — 853 8,468 14,674 6.11 % \n Retail 3,272 3,737 5,753 7,326 — 14 432 — 20,534 4.73 % \n Senior housing and assisted living — — 1,327 — — 3,002 — — 4,329 6.83 % \n Total $ 92,551 $ 26,095 $ 22,281 $ 33,007 $ 26,098 $ 23,632 $ 12,852 $ 27,260 $ 263,776 5.57 % \n \n\nThe composition of CRE loans at the dates indicated were as follows:\n\n (Dollars in thousands) \n CRE by Type: September 30, 2026 June 30, 2026 September 30, 2025 \n CRE non-owner occupied: \n Office $63,682 $43,705 $42,537 \n Retail 56,375 42,042 36,827 \n Hospitality/restaurant 51,126 24,499 25,798 \n Industrial 44,576 20,824 14,352 \n Mixed use 38,154 18,489 18,663 \n Self-storage 21,089 18,767 19,001 \n Senior housing/assisted living 10,818 6,882 7,390 \n Other 10,220 9,189 3,632 \n Education/worship 2,345 2,359 2,441 \n Land — 1,502 2,072 \n Total CRE non-owner occupied 298,385 188,258 172,713 \n CRE owner occupied: \n Industrial 93,186 79,137 77,059 \n Office 44,588 31,862 31,981 \n Retail 30,272 27,433 17,399 \n Hospitality/restaurant 10,851 7,622 7,675 \n Education/worship 10,727 3,367 5,516 \n Other 10,654 10,539 10,521 \n Mixed use 9,720 9,239 4,622 \n Automobile related 6,697 6,745 7,164 \n Car wash 4,359 4,376 4,430 \n Agriculture 3,710 3,816 4,347 \n Total CRE owner occupied 224,764 184,136 170,714 \n Total $523,149 $372,394 $343,427 \n \n\nThe composition of construction loans at the dates indicated were as follows:\n\n (Dollars in thousands) September 30, 2026 June 30, 2026 September 30, 2025 \n Construction Types: Amount Percent Amount Percent Amount Percent \n Commercial construction – self storage $ 25,748 5.7 % $ 25,234 6.1 % $ 18,701 4.9 % \n Commercial construction – hotel 15,299 3.4 13,463 3.3 6,147 1.6 \n Commercial construction – retail 13,486 3.0 8,447 2.0 8,445 2.2 \n Commercial construction – office 7,164 1.6 7,164 1.7 9,250 2.4 \n Commercial construction – lots 2,945 0.7 — — — — \n Commercial construction – industrial 1,845 0.4 — — — — \n Commercial construction – auto service facility 1,465 0.3 — — — — \n Multi-family 52,127 11.6 46,186 11.1 29,751 7.8 \n Custom construction – single family residential and single family manufactured residential 43,921 9.8 33,944 8.2 44,299 11.7 \n Custom construction – land, lot and acquisition and development 12,766 2.8 10,821 2.6 8,998 2.4 \n Speculative residential construction – vertical 230,036 51.2 225,992 54.4 217,821 57.3 \n Speculative residential construction – land, lot and acquisition and development 42,890 9.5 43,973 10.6 36,668 9.7 \n Total $ 449,692 100.0 % $ 415,224 100.0 % $ 380,080 100.0 % \n \n\nOriginations of one-to-four-family loans to purchase and refinance a home for\nthe periods indicated were as follows:\n\n (Dollars in Prior Year \n thousands) For the Three Months Ended Linked Quarter Quarter \n September 30, 2026 June 30, 2026 September 30, 2025 $ % $ % \n Amount Percent Amount Percent Amount Percent Change Change Change Change \n Purchase $ 179,810 84.3 % $ 163,100 79.2 % $ 155,920 88.8 % $ 16,710 10.2 $ 23,890 15.3 % \n Refinance 33,367 15.7 42,741 20.8 19,714 11.2 (9,374 ) (21.9 ) 13,653 69.3 % \n Total $ 213,177 100.0 % $ 205,841 100.0 % $ 175,634 100.0 % $ 7,336 3.6 $ 37,543 21.4 % \n \n\n\n\n (Dollars in thousands) For the Nine Months Ended September 30, \n 2026 2025 \n Amount Percent Amount Percent $ Change % Change \n Purchase $ 482,012 76.8 % $ 446,631 85.8 % $ 35,381 7.9 % \n Refinance 145,438 23.2 73,697 14.2 71,741 97.3 % \n Total $ 627,450 100.0 % $ 520,328 100.0 % $ 107,122 20.6 % \n \n\nDuring the quarter ended September 30, 2026, the Company sold $122.9 million\nof one-to-four-family loans, compared to $156.1 million during the previous\nquarter and $156.4 million during the same quarter one year ago. Gross margins\non home loan sales increased to 3.55% for the quarter ended September 30,\n2026, compared to 2.98% in the previous quarter and increased from 3.14% in\nthe same quarter one year ago. Gross margins are defined as the margin on\nloans sold (cash sales) without the impact of deferred costs.\n\nLiabilities and Equity Summary\n\nThe following table summarizes the components and changes in deposits,\nborrowings, equity, and book value per common share at the dates indicated,\nincluding the dollar changes from the linked quarter and prior year period.\n\n (Dollars in thousands) Linked Prior Year \n DEPOSITS September 30, 2026 June 30, 2026 September 30, 2025 Quarter Quarter \n Transactional deposits: Amount Percent Amount Percent Amount Percent $ Change $ Change \n Noninterest-bearing checking $ 738,715 25.9 % $ 629,799 25.7 % $ 648,661 24.2 % $ 108,916 $ 90,054 \n Interest-bearing checking 293,069 10.2 209,721 8.6 199,527 7.4 83,348 93,542 \n Fintech partner deposits ((1)) 177,463 6.2 — — — — 177,463 177,463 \n Escrow accounts related to mortgages serviced ((2)) 19,976 0.7 12,057 0.5 17,192 0.6 7,919 2,784 \n Subtotal 1,229,223 43.0 851,577 34.8 865,380 32.2 377,646 363,843 \n Savings and money market: \n Savings 181,400 6.3 173,092 7.1 167,006 6.2 8,308 14,394 \n Money market 433,851 15.1 375,833 15.3 354,082 13.2 58,018 79,769 \n Subtotal 615,251 21.4 548,925 22.4 521,088 19.4 66,326 94,163 \n Certificates of deposit: \n CDs 946,667 33.0 922,022 37.6 930,371 34.6 24,645 16,296 \n Brokered Deposits \n Non-maturity brokered deposits 1,003 — 4,027 0.2 251 — (3,024 ) 752 \n Maturity brokered deposits 75,060 2.6 122,332 5.0 369,403 13.8 (47,272 ) (294,343 ) \n Subtotal 76,063 2.6 126,359 5.2 369,654 13.8 (50,296 ) (293,591 ) \n Total deposits $ 2,867,204 100.0 % $ 2,448,883 100.0 % $ 2,686,493 100.0 % $ 418,321 $ 180,711 \n Borrowings ( (3)) $ 373,500 $ 324,500 $ 129,305 $ 49,000 $ 244,195 \n Stockholders' equity $ 333,206 $ 318,960 $ 300,511 $ 14,246 $ 32,695 \n Book value per common share $ 43.05 $ 43.57 $ 40.43 $ (0.52 ) $ 2.62 \n \n\n\n\n_____________\n\n (1) Fintech partner deposits are deposits associated with the Bank’s Banking-as-a-Service relationships with financial technology companies. \n (2) Primarily noninterest-bearing accounts based on applicable state law. \n (3) Comprised of FHLB advances and Federal Reserve Bank borrowings. \n \n\nThe Company acquired its fintech partner deposits through the acquisition of\nPacific West Acquisition. Through these relationships, the Company provides\ndeposit and related banking services to fintech partners and their end\nusers. \n\nBrokered deposits declined from the prior quarter, partially offset by\nincreased borrowings, which offered a slightly lower cost of funds.\n\nIn the table above, the increase in stockholders’ equity from June 30, 2026,\nto September 30, 2026, was primarily due to $18.4 million in common stock\nissued in the Pacific West Acquisition, and net income of $4.9 million.\nChanges in the fair value of available‑for‑sale securities and interest\nrate swap cash flow hedges decreased accumulated other comprehensive income\n(“AOCI”) by $5.3 million, net of tax, reflecting changes in market\ninterest rates during the quarter. The increase in stockholders’ equity was\npartially offset by $1.9 million in open market share repurchases and $2.2\nmillion in cash dividends paid.\n\nThe Bank is considered “well capitalized” under the capital requirement\nestablished by the Federal Deposit Insurance Corporation (“FDIC”) and the\nCompany exceeded all regulatory capital requirements. At September 30, 2026,\ncapital ratios presented for the Bank and the Company were as follows:\n\n At September 30, 2026 \n Bank Company \n Total risk-based capital (to risk-weighted assets) 12.61 % 12.35 % \n Tier 1 leverage capital (to average assets) 11.24 % 9.89 % \n CET 1 capital (to risk-weighted assets) 11.44 % 10.07 % \n \n\nCredit Quality\n\nThe following tables summarize changes in the ACL on loans for the periods\nindicated and the balances of nonperforming and classified loans at the dates\nindicated.\n\n For the three months ended Linked Prior Year \n ACL ON LOANS Sep 30, Jun 30, Sep 30, Quarter Quarter \n (Dollars in thousands) 2026 2026 2025 $ Change $ Change \n Beginning ACL balance $ 31,165 $ 32,443 $ 32,189 $ (1,278 ) $ (1,024 ) \n Provision 2,953 2,559 1,851 394 1,102 \n Merger day 1 ACL ( (1)) 3,898 — — 3,898 3,898 \n Charge-offs \n Indirect (1,926 ) (2,067 ) (1,941 ) 141 15 \n Marine (186 ) (7 ) (55 ) (179 ) (131 ) \n Other (22 ) (49 ) (49 ) 27 27 \n Commercial and speculative construction and development — (2,277 ) (2,299 ) 2,277 2,299 \n Commercial business (1 ) (39 ) — 38 (1 ) \n Subtotal (2,135 ) (4,439 ) (4,344 ) 2,304 2,209 \n Recoveries \n Indirect 511 584 323 (73 ) 188 \n Marine 17 3 16 14 1 \n Other 4 15 12 (11 ) (8 ) \n Commercial business 50 — 9 50 41 \n Subtotal 582 602 360 (20 ) 222 \n Ending ACL balance $ 36,463 $ 31,165 $ 30,056 $ 5,298 $ 6,407 \n \n\n\n\n (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. \n \n\n\n\n NONPERFORMING LOANS Linked Prior Year \n (Dollars in thousands) Sep 30, Jun 30, Sep 30, Quarter Quarter \n CRE LOANS 2026 2026 2025 $ Change $ Change \n CRE owner occupied $ 3,542 $ 614 $ 2,047 $ 2,928 $ 1,495 \n CRE non-owner occupied 5,623 — — 5,623 5,623 \n Commercial and speculative construction and development 7,824 7,164 9,150 660 (1,326 ) \n Multi-family 130 — — 130 130 \n Total CRE loans 17,119 7,778 11,197 9,341 5,922 \n \n RESIDENTIAL REAL ESTATE LOANS \n One-to-four-family (excludes HFS) 2,327 1,973 1,799 354 528 \n Home equity 520 472 317 48 203 \n Total residential real estate loans 2,847 2,445 2,116 402 731 \n \n CONSUMER LOANS \n Indirect home improvement 4,421 4,799 3,802 (378 ) 619 \n Marine 540 606 620 (66 ) (80 ) \n Other consumer 15 19 40 (4 ) (25 ) \n Total consumer loans 4,976 5,424 4,462 (448 ) 514 \n \n COMMERCIAL BUSINESS LOANS \n C&I 199 — 600 199 (401 ) \n Total nonperforming loans $ 25,141 $ 15,647 $ 18,375 $ 9,494 $ 6,766 \n \n\nThe increase in nonperforming loans at September 30, 2026, compared\nto June 30, 2026, was primarily driven by $8.6 million of nonaccrual loans\nacquired as part of the Pacific West Acquisition. The acquired loans were on\nnonaccrual status as of the acquisition date and booked at fair market value\nunder acquisition accounting.\n\n CLASSIFIED LOANS Linked Prior Year \n (Dollars in thousands) Sep 30, Jun 30, Sep 30, Quarter Quarter \n CRE LOANS 2026 2026 2025 $ Change $ Change \n CRE owner occupied $ 4,224 $ 1,212 $ 3,080 $ 3,012 $ 1,144 \n CRE non-owner occupied 9,952 3,024 2,435 6,928 7,517 \n Commercial and speculative construction and development 7,824 7,164 9,150 660 (1,326 ) \n Multi-family 3,307 — — 3,307 3,307 \n Total CRE loans 25,307 11,400 14,665 13,907 10,642 \n \n RESIDENTIAL REAL ESTATE LOANS \n One-to-four-family (excludes HFS) 4,140 3,794 3,646 346 494 \n Home equity 520 472 317 48 203 \n Total residential real estate loans 4,660 4,266 3,963 394 697 \n \n CONSUMER LOANS \n Indirect home improvement 4,421 4,799 3,802 (378 ) 619 \n Marine 540 606 620 (66 ) (80 ) \n Other consumer 15 19 40 (4 ) (25 ) \n Total consumer loans 4,976 5,424 4,462 (448 ) 514 \n \n COMMERCIAL BUSINESS LOANS \n C&I 3,469 3,889 3,963 (420 ) (494 ) \n Total classified loans $ 38,412 $ 24,979 $ 27,053 $ 13,433 $ 11,359 \n \n\nThe increase in classified loans at September 30, 2026, compared to June 30,\n2026, was primarily driven by $12.5 million of classified loans acquired as\npart of the Pacific West Acquisition.\n\nOperating Results\n\nNet interest income increased $2.0 million to $35.7 million for the three\nmonths ended September 30, 2026, from $33.7 million for the three months\nended September 30, 2025.  The increase was primarily a result of a $2.7\nmillion increase in interest income on loans receivable, including interest\nincome from loans acquired in the Pacific West Acquisition and the impact of\nnet loan growth, partially offset by a $452,000 increase in total interest\nexpense.  The increase in total interest expense primarily reflected\nincreases of $843,000 in interest expense on borrowings and $438,000 in\ninterest expense on subordinated notes following their repricing at higher\ninterest rates in 2026, partially offset by an $829,000 decrease in interest\nexpense on deposits.  The decrease in deposit interest expense reflected\nfluctuations in market interest rates and changes in the composition of\ndeposits and borrowings, including the impact of balances acquired in the\nPacific West Acquisition.  \n\nFor the nine months ended September 30, 2026, net interest income increased\n$4.1 million to $100.9 million, from $96.8 million for the nine months\nended September 30, 2025, with a $6.0 million increase in total interest\nincome, partially offset by a $1.9 million increase in total interest expense.\n The $6.0 million increase in total interest income was primarily due to an\nincrease of $6.6 million in interest income on loans receivable, including\nfees, primarily attributable to loan growth and the Pacific West Acquisition.\nThe $1.9 million increase in total interest expense was primarily due to a\n$1.1 million increase in interest expense on subordinated notes, as noted\nabove, as well as a $576,000 increase in interest expense on borrowings, and a\n$214,000 increase in interest expense on deposits. \n\nNet interest margin (“NIM”) (annualized) was 4.36% for the three months\nended September 30, 2026, compared to 4.37% for the same period in the prior\nyear and 4.30% for the three months ended June 30, 2026. The six basis point\nincrease from the prior quarter was primarily attributable to lower funding\ncosts, including lower rates on certificates of deposit as those deposits\nrepriced and the addition of the slightly lower-cost funding base acquired in\nthe Pacific West Acquisition, as well as improved yields on the Company’s\ninvestment securities portfolio. Incremental interest accretion on loans\nacquired in the Pacific West Acquisition had an immaterial impact on NIM\nduring the period.\n\nThe average total cost of funds, including noninterest-bearing checking\naccounts, decreased nine basis points to 2.32% for the three months\nended September 30, 2026, from 2.41% for the three months ended September\n30, 2025. The decrease primarily reflected lower rates on certificates of\ndeposit as those deposits repriced, as well as the addition of slightly\nlower-cost funding from the Pacific West Acquisition. The average cost of\nfunds decreased two basis points to 2.37% for the nine months ended September\n30, 2026, from 2.39% for the nine months ended September 30, 2025.\n\nFor the three and nine months ended September 30, 2026, the provision for\ncredit losses on loans was $3.0 million and $8.2 million, compared to\n$2.3 million and $5.9 million for the three and nine months ended September\n30, 2025, respectively. The year-to-date increase in the provision primarily\nreflected an increase in net charge-offs of $649,000 and additional reserve\nactivity related to a single nonperforming construction and development loan.\n\nDuring the three months ended September 30, 2026, net charge-offs decreased\n$2.4 million to $1.6 million, compared to $4.0 million for the three months\nended September 30, 2025. The decrease was primarily attributable to a $2.3\nmillion charge-off on a commercial construction loan relationship recognized\nduring the three months ended September 30, 2025.\n\nDuring the nine months ended September 30, 2026, net charge-offs increased\n$649,000 to $7.5 million, compared to $6.9 million for the nine months\nended September 30, 2025. The increase was primarily due to higher net\ncharge-offs in the indirect home improvement portfolio.\n\nTotal noninterest income increased $582,000 to $6.2 million for the three\nmonths ended September 30, 2026, from $5.6 million for the three months ended\nSeptember 30, 2025. The increase was primarily due to the bargain purchase\ngain of $1.7 million from the Pacific West Acquisition, primarily offset by a\ndecrease of $971,000 in gain on sale of loans, reflecting market interest\nrates putting pressure on home loan sales, and a decrease of $231,000 in other\nnoninterest income. \n\nTotal noninterest income remained relatively unchanged at $6.2 million for the\nthree months ended September 30, 2026, compared to $6.2 million for the three\nmonths ended June 30, 2026, as the $1.7 million bargain purchase gain from\nthe Pacific West Acquisition was largely offset by a $1.1 million decrease in\ngain on sale of loans, reflecting lower loan sale volume as higher mortgage\nrates reduced saleable production, and a $742,000 fair value decrease on first\nlien residential mortgage loans accounted for under the fair value option,\nprimarily due to higher mortgage rates during the period.\n\nTotal noninterest income increased $1.8 million to $17.7 million for the nine\nmonths ended September 30, 2026, from $15.9 million for the nine months\nended September 30, 2025. This increase was mainly the result of a $1.7\nmillion bargain purchase gain from the Pacific West Acquisition, and a\n$322,000 increase in gain on sale of loans.\n\nTotal noninterest expense increased $6.9 million to $32.3 million for the\nthree months ended September 30, 2026, compared to $25.4 million for the\nthree months ended September 30, 2025. The $6.9 million increase was largely\ncomprised of a $2.8 million increase in salaries and benefits, primarily\nreflecting an increase in full-time-equivalent employees resulting from the\nPacific West Acquisition, as well as higher overall benefit costs, and $2.5\nmillion in acquisition-related costs associated with the transaction, compared\nto no acquisition costs in the prior year. \n\nTotal noninterest expense increased $6.2 million to $32.3 million for the\nthree months ended September 30, 2026, from $26.1 million for the three\nmonths ended June 30, 2026. The increase primarily reflected a $2.0 million\nincrease in acquisition-related costs, a $1.6 million increase in salaries and\nbenefits expense relating to the increase in full-time-equivalent employees\nfrom the Pacific West Acquisition and higher overall benefit costs, a $1.9\nmillion increase in operations expense, and a $426,000 increase in data\nprocessing expense. The increases in operations and data processing expenses\nreflected additional operating costs associated with the Pacific West\nAcquisition, while the increase in operations expense also reflected certain\nexpense adjustments recognized in the prior quarter.\n\nTotal noninterest expense increased $8.0 million to $83.9 million for the nine\nmonths ended September 30, 2026, from $75.9 million for the nine months\nended September 30, 2025. This increase included a $4.6 million increase in\nsalaries and benefits, a $3.2 million increase in acquisition costs, a\n$647,000 increase in occupancy, and a $573,000 increase in loan costs,\npartially offset by a $548,000 decrease in operations, primarily due to the\nsame reasons mentioned above.\n\nMerger-related activity during the third quarter was primarily focused on\ntransaction completion and integration planning associated with the Pacific\nWest Acquisition, including legal and professional fees, change-in-control\ncosts, investment banking fees, and initial system integration activities\nrelated to the planned fourth quarter 2026 core processing conversion.\n Acquisition-related expenses, as noted above, include these integration\ncosts as well as costs incurred to complete and consolidate the operations of\nthe two companies. Management anticipates that the majority of the remaining\nacquisition-related expenses, consisting primarily of system integration and\ncore conversion costs, will be recognized during the fourth quarter of 2026.\n\nAbout FS Bancorp\n\nFS Bancorp, Inc., a Washington corporation, is the holding company for 1st\nSecurity Bank of Washington. The Bank offers a range of loan and deposit\nservices primarily to small- and middle-market businesses and individuals in\nWashington and Oregon. It operates through 32 bank branches, one\nheadquarters office that provides loans and deposit services, and loan\nproduction offices in various suburban communities in the greater Puget Sound\narea, the Kennewick-Pasco-Richland metropolitan area of Washington, also known\nas the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank\nservices home mortgage customers across the Northwest, focusing on\nmarkets in Washington State including the Puget Sound, Tri-Cities, and\nVancouver, as well as various communities in Oregon.\n\nForward-Looking Statements\n\nWhen used in this press release and in other documents filed with or furnished\nto the Securities and Exchange Commission (the “SEC”), other public\nstockholder communications, or in oral statements made with the approval of an\nauthorized executive officer, the words or phrases “may,”  “believe,”\n“will,” “will likely result,” “are expected to,” “will\ncontinue,” “anticipate,”  “is anticipated,” “estimate,”\n“project,” “plans,” or similar expressions are intended to identify\n“forward-looking statements” within the meaning of the Private Securities\nLitigation Reform Act of 1995. Forward‑looking statements are not historical\nfacts but instead represent management's current expectations and forecasts\nregarding future events, many of which are inherently uncertain and outside of\nour control. Actual results may differ, possibly materially, from those\ncurrently expected or projected in these forward-looking statements.\n\nFactors that could cause the Company’s actual results to differ materially\nfrom those described in the forward-looking statements, include, but are not\nlimited to the following: adverse economic conditions in the Company’s local\nmarket areas, other markets in which the Company has lending relationships, or\nother aspects of the Company’s business operations or financial markets,\nincluding, without limitation, as a result of employment levels; labor\nshortages, the effects of inflation, recessionary pressures or slowing\neconomic growth; credit risks of lending activities, including changes in the\nlevel and direction of loan delinquencies and charge-offs and changes in\nestimates of the adequacy of the allowance for credit losses; changes in\ninterest rate levels and volatility, and the timing and pace of such changes,\nincluding actions by the Federal Reserve, which could adversely affect the\nCompany's revenues and expenses, the values of our assets and obligations, and\nthe availability and cost of capital and liquidity; inflationary pressures and\nrelated monetary and fiscal policy responses, and their impact on consumer and\nbusiness behavior; geopolitical developments and international conflicts\nincluding but not limited to tensions or instability in Eastern Europe, the\nMiddle East, South America, and Asia, or the imposition of new or increased\ntariffs and trade restrictions, which may disrupt financial markets; global\nsupply chains, commodity prices, or economic activity in specific industry\nsectors; the effects of a federal government shutdown, debt ceiling standoff,\nor other fiscal policy uncertainty; increased competitive pressures, including\nrepricing and competitors' pricing initiatives, and their impact on the\nCompany's market position, loan, and deposit products; adverse changes in the\nsecurities markets; the Company’s ability to execute its plans to grow its\nresidential construction lending, mortgage banking, and warehouse lending\noperations, and the geographic expansion of its indirect home improvement\nlending; challenges arising from expanding into new geographic markets,\nproducts, or services; secondary market conditions for loans and the\nCompany’s ability to originate loans for sale and sell loans in the\nsecondary market; volatility in the mortgage industry; fluctuations in\ndeposits; liquidity issues, including the Company's ability to borrow funds or\nraise additional capital, if necessary; the impact of bank failures or adverse\ndevelopments at other banks and related negative publicity about the banking\nindustry in general on investor and depositor sentiment; the ability to adapt\nto rapid technological changes, including advancements in artificial\nintelligence, digital banking platforms, and cybersecurity; legislation or\nregulatory changes, including but not limited to shifts in capital\nrequirements, banking regulation, tax laws, or consumer protection laws;\nvulnerabilities  in information systems or third-party service providers,\nincluding disruptions, breaches, or attacks; environmental, social and\ngovernance matters; the effects of climate change, severe weather events,\nnatural disasters, pandemics, epidemics and other public health crises, acts\nof war or terrorism, domestic political unrest and other external events on\nour business; and other factors described in the Company’s latest Annual\nReport on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed\nwith or furnished to the SEC which are available on the Company's website at\nwww.fsbwa.com and on the SEC's website at www.sec.gov.\n\nFurther, statements about the effects of the Company's acquisition of Pacific\nWest, completed on August 19, 2026, on the Company's business, financial\nresults, and condition may constitute forward-looking statements and are\nsubject to the risk that the actual effects may differ, possibly materially,\nfrom what is reflected in the forward-looking statements due to factors and\nfuture developments which are uncertain, unpredictable, and in many cases,\nbeyond the Company's control, including the following: the expected cost\nsavings, synergies and other financial benefits from the merger might not be\nrealized within the expected time frames or at all; the integration of the\ncombined company, including the conversion of operating systems and the\nretention of key personnel and customers, might not proceed as planned or may\nbe more difficult, time-consuming or costly than expected; merger-related and\nintegration expenses may be greater than expected; preliminary estimates of\nthe fair value of acquired assets and assumed liabilities may change during\nthe measuring period, and acquired loans may experience higher credit losses\nthan anticipated; and the combined company might not perform as well as\nexpected.\n\nAny of the forward-looking statements that the Company makes in this press\nrelease and in the other public statements are based upon management's beliefs\nand assumptions at the time they are made and may turn out to be incorrect\nbecause of the inaccurate assumptions the Company might make, because of the\nfactors illustrated above or because of other factors that cannot be foreseen\nby the Company. Therefore, these factors should be considered in evaluating\nthe forward‑looking statements, and undue reliance should not be placed on\nsuch statements. The Company does not undertake, and expressly disclaims any\nobligation, to update or revise any forward-looking statements, whether as a\nresult of new information, future events, or otherwise, except as required by\nlaw. \n\n FS BANCORP, INC. AND SUBSIDIARY \n CONSOLIDATED BALANCE SHEETS \n (Dollars in thousands) (Unaudited) \n \n Linked Prior Year \n Sepr 30, Jun 30, Sep 30, Quarter Quarter \n ASSETS 2026 2026 2025 % Change % Change \n Cash and due from banks $ 29,022 $ 12,835 $ 12,391 126 134 \n Interest-bearing deposits at other financial institutions 14,925 16,875 48,889 (12 ) (69 ) \n Total cash and cash equivalents 43,947 29,710 61,280 48 (28 ) \n Securities available-for-sale, at fair value 342,185 269,460 311,695 27 10 \n Securities held-to-maturity, net 37,734 34,845 31,386 8 20 \n Loans held for sale, at fair value 22,820 30,548 38,579 (25 ) (41 ) \n Loans receivable, net 3,008,129 2,628,992 2,599,601 14 16 \n Accrued interest receivable 16,901 14,263 15,122 18 12 \n Premises and equipment, net 49,148 43,455 32,444 13 51 \n Long-lived assets held for sale 3,258 3,258 — — 100 \n Operating lease right-of-use 7,799 6,655 6,832 17 14 \n Federal Home Loan Bank stock, at cost 13,073 14,420 7,975 (9 ) 64 \n Deferred tax asset, net 9,469 6,441 6,767 47 40 \n Bank owned life insurance (“BOLI”), net 41,857 36,771 38,531 14 9 \n MSRs, held at the lower of cost or fair value 8,887 8,912 8,506 — 4 \n Goodwill 3,592 3,592 3,592 — — \n Core deposit intangible, net 13,525 9,052 11,284 49 20 \n Other assets 54,327 38,706 35,231 40 54 \n TOTAL ASSETS $ 3,676,651 $ 3,179,080 $ 3,208,825 16 15 \n LIABILITIES \n Deposits: \n Noninterest-bearing accounts $ 758,691 $ 641,856 $ 665,852 18 14 \n Interest-bearing accounts 2,108,513 1,807,026 2,020,640 17 4 \n Total deposits 2,867,204 2,448,882 2,686,492 17 7 \n Borrowings 373,500 324,500 129,305 15 189 \n Subordinated notes: \n Principal amount 46,000 50,000 50,000 (8 ) (8 ) \n Unamortized debt issuance costs (265 ) (306 ) (356 ) (13 ) (26 ) \n Total subordinated notes less unamortized debt issuance costs 45,735 49,694 49,644 (8 ) (8 ) \n Operating lease liability 7,899 6,753 6,993 17 13 \n Other liabilities 49,107 30,291 35,880 62 37 \n Total liabilities 3,343,445 2,860,120 2,908,314 17 15 \n COMMITMENTS AND CONTINGENCIES \n STOCKHOLDERS’ EQUITY \n Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding — — — — — \n 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 \n Additional paid-in capital 57,702 40,886 43,907 41 31 \n Retained earnings 294,408 291,635 273,882 1 7 \n Accumulated other comprehensive loss, net of tax (18,983 ) (13,635 ) (17,353 ) 39 9 \n Total stockholders’ equity 333,206 318,960 300,511 4 11 \n TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,676,651 $ 3,179,080 $ 3,208,825 16 15 \n \n\n\n\n FS BANCORP, INC. AND SUBSIDIARY \n CONSOLIDATED STATEMENTS OF INCOME \n (Dollars in thousands, except per share amounts) (Unaudited) \n \n Three Months Ended Linked Prior Year \n Sep 30, Jun 30, Sep 30, Quarter Quarter \n INTEREST INCOME 2026 2026 2025 % Change % Change \n Loans receivable, including fees $ 49,346 $ 46,202 $ 46,664 7 6 \n 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 ) \n Total interest and dividend income 53,421 49,662 50,973 8 5 \n INTEREST EXPENSE \n Deposits 14,033 13,908 14,862 1 (6 ) \n Borrowings 2,778 2,197 1,935 26 44 \n Subordinated notes 924 909 486 2 90 \n Total interest expense 17,735 17,014 17,283 4 3 \n NET INTEREST INCOME 35,686 32,648 33,690 9 6 \n PROVISION FOR CREDIT LOSSES 3,462 2,641 2,309 31 50 \n NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 32,224 30,007 31,381 7 3 \n NONINTEREST INCOME \n Service charges and fee income 2,424 2,281 2,326 6 4 \n Bargain purchase gain 1,658 — — NM NM \n Gain on sale of loans 1,468 2,581 2,439 (43 ) (40 ) \n Gain on sale of investment securities, net 11 — — NM NM \n Earnings on cash surrender value of BOLI 286 263 269 9 6 \n Other noninterest income 329 1,025 560 (68 ) (41 ) \n Total noninterest income 6,176 6,150 5,594 — 10 \n NONINTEREST EXPENSE \n Salaries and benefits 17,178 15,570 14,415 10 19 \n Operations 4,616 2,699 3,974 71 16 \n Occupancy 2,073 1,938 1,744 7 19 \n Data processing 2,252 1,826 1,784 23 26 \n Loan costs 803 900 746 (11 ) 8 \n Professional and board fees 1,067 1,060 1,093 1 (2 ) \n FDIC insurance 630 531 592 19 6 \n Marketing and advertising 449 445 259 1 73 \n Acquisition costs 2,463 417 — 491 NM \n Amortization of core deposit intangible 788 722 787 9 — \n Recovery of servicing rights (5 ) (4 ) (6 ) 25 (17 ) \n Total noninterest expense 32,314 26,104 25,388 24 27 \n INCOME BEFORE PROVISION FOR INCOME TAXES 6,086 10,053 11,587 (39 ) (47 ) \n PROVISION FOR INCOME TAXES 1,160 2,117 2,410 (45 ) (52 ) \n NET INCOME $ 4,926 $ 7,936 $ 9,177 (38 ) (46 ) \n Basic earnings per share $ 0.65 $ 1.06 $ 1.20 (39 ) (46 ) \n Diluted earnings per share $ 0.63 $ 1.04 $ 1.18 (39 ) (47 ) \n \n\n\n\n FS BANCORP, INC. AND SUBSIDIARY \n CONSOLIDATED STATEMENTS OF INCOME \n (Dollars in thousands, except per share amounts) (Unaudited) \n \n Year \n Nine Months Ended September 30, Over Year \n INTEREST INCOME 2026 2025 % Change \n Loans receivable, including fees $ 141,560 $ 135,004 5 \n Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions 10,856 11,459 (5 ) \n Total interest and dividend income 152,416 146,463 4 \n INTEREST EXPENSE \n Deposits 42,654 42,440 1 \n Borrowings 6,359 5,783 10 \n Subordinated notes 2,524 1,456 73 \n Total interest expense 51,537 49,679 4 \n NET INTEREST INCOME 100,879 96,784 4 \n PROVISION FOR CREDIT LOSSES 8,632 5,922 46 \n NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 92,247 90,862 2 \n NONINTEREST INCOME \n Service charges and fee income 6,778 6,894 (2 ) \n Bargain purchase gain 1,658 — NM \n Gain on sale of loans 6,433 6,111 5 \n Gain on sale of investment securities, net 11 — NM \n Earnings on cash surrender value of BOLI 808 773 5 \n Other noninterest income 2,039 2,112 (3 ) \n Total noninterest income 17,727 15,890 12 \n NONINTEREST EXPENSE \n Salaries and benefits 47,602 43,037 11 \n Operations 10,695 11,243 (5 ) \n Occupancy 5,887 5,240 12 \n Data processing 5,672 5,966 (5 ) \n Loan costs 2,585 2,012 28 \n Professional and board fees 3,141 3,435 (9 ) \n FDIC insurance 1,788 1,684 6 \n Marketing and advertising 1,203 879 37 \n Acquisition costs 3,175 — NM \n Amortization of core deposit intangible 2,254 2,426 (7 ) \n (Recovery) impairment of MSRs (64 ) 23 (378 ) \n Total noninterest expense 83,938 75,945 11 \n INCOME BEFORE PROVISION FOR INCOME TAXES 26,036 30,807 (15 ) \n PROVISION FOR INCOME TAXES 5,344 5,881 (9 ) \n NET INCOME $ 20,692 $ 24,926 (17 ) \n Basic earnings per share $ 2.67 $ 3.23 (17 ) \n Diluted earnings per share $ 2.62 $ 3.18 (18 ) \n \n\nKEY FINANCIAL RATIOS AND DATA (Unaudited)\n\n For the Three Months Ended \n September 30, June 30, September 30, \n PERFORMANCE RATIOS: 2026 2026 2025 \n Return on assets (ratio of net income to average total assets) ((1)) 0.57 % 1.00 % 1.14 % \n Return on equity (ratio of net income to average total stockholders' equity) ( (1)) 5.85 9.94 11.97 \n Yield on average interest-earning assets ((1)) 6.52 6.54 6.61 \n Average total cost of funds ((1)) 2.32 2.41 2.41 \n Interest rate spread information – average during period 4.20 4.13 4.20 \n Net interest margin ((1)) 4.36 4.30 4.37 \n Operating expense to average total assets ((1)) 3.77 3.29 3.16 \n Average interest-earning assets to average interest-bearing liabilities 139.79 139.32 140.80 \n Efficiency ratio ((2)) 77.19 67.28 64.63 \n Common equity ratio (ratio of stockholders' equity to total assets) 9.06 10.03 9.37 \n Tangible common equity ratio ((3)) 8.64 9.67 8.94 \n \n\n\n\n For the Nine Months Ended \n September 30, September 30, \n PERFORMANCE RATIOS: 2026 2025 \n Return on assets (ratio of net income to average total assets) ((1)) 0.85 % 1.07 % \n Return on equity (ratio of net income to average total stockholders' equity) ((1)) 8.55 11.03 \n Yield on average interest-earning assets ((1)) 6.53 6.55 \n Average total cost of funds ((1)) 2.37 2.39 \n Interest rate spread information – average during period 4.16 4.16 \n Net interest margin ((1)) 4.32 4.33 \n Operating expense to average total assets ((1)) 3.44 3.26 \n Average interest-earning assets to average interest-bearing liabilities 139.66 141.54 \n Efficiency ratio ((2)) 70.77 67.40 \n \n\n\n\n September 30, June 30, September 30, \n ASSET QUALITY RATIOS AND DATA: 2026 2026 2025 \n Nonperforming assets to total assets at end of period ((4)) 0.68 % 0.49 % 0.57 % \n Nonperforming loans to total gross loans (excluding loans HFS) ((5)) 0.83 0.59 0.70 \n ACL – loans to nonperforming loans ( (5)) 145.03 199.15 163.77 \n ACL – loans to total gross loans (excluding loans HFS) 1.20 1.17 1.14 \n \n\n\n\n At or For the Three Months Ended \n Sep 30, Jun 30, Sep 30, \n PER COMMON SHARE DATA: 2026 2026 2025 \n Basic earnings per share $ 0.65 $ 1.06 $ 1.20 \n Diluted earnings per share $ 0.63 $ 1.04 $ 1.18 \n Weighted average basic shares outstanding 7,524,107 7,340,326 7,488,139 \n Weighted average diluted shares outstanding 7,677,572 7,483,199 7,623,243 \n Common shares outstanding at end of period 7,739,797 ((6)) 7,320,801 ((7)) 7,432,359 ((8)) \n Book value per share using common shares outstanding $ 43.05 $ 43.57 $ 40.43 \n Tangible book value per share using common shares outstanding ( (9)) $ 40.84 $ 41.84 $ 38.43 \n \n\n\n\n\n\n (1) Annualized. \n (2) Total noninterest expense as a percentage of net interest income and total noninterest income. \n (3) Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see “Non-GAAP Financial Measures” below. \n (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. \n (5) Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. \n (6) Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares. \n (7) Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. \n (8) Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares. \n (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. \n \n\n\n\n (Dollars in thousands) For the Three Months Ended September 30, For the Nine Months Ended September 30, QTR Over QTR YTD Over YTD \n Average Balances 2026 2025 2026 2025 $ Change $ Change \n Assets \n Loans receivable, net ((1)) $ 2,864,219 $ 2,651,111 $ 2,754,304 $ 2,608,338 $ 213,108 $ 145,966 \n Investment securities - taxable 277,518 285,111 259,243 267,657 (7,593 ) (8,414 ) \n Investment securities - nontaxable 76,796 79,341 77,462 78,386 (2,545 ) (924 ) \n Interest-bearing deposits and certificates of deposit at other financial institutions 14,954 34,857 17,251 23,575 (19,903 ) (6,324 ) \n FHLB stock, at cost 14,321 10,082 11,257 10,262 4,239 995 \n Total interest-earning assets 3,247,808 3,060,502 3,119,517 2,988,218 187,306 131,299 \n Noninterest-earning assets 155,992 124,955 143,119 123,785 31,037 19,334 \n Total assets $ 3,403,800 $ 3,185,457 $ 3,262,636 $ 3,112,003 $ 218,343 $ 150,633 \n Liabilities \n Interest-bearing deposit accounts $ 1,992,076 $ 1,947,830 $ 1,970,700 $ 1,880,007 $ 44,246 $ 90,693 \n Borrowings 283,054 176,234 213,712 181,633 106,820 32,079 \n Subordinated notes 48,230 49,633 49,188 49,617 (1,403 ) (429 ) \n Total interest-bearing liabilities 2,323,360 2,173,697 2,233,600 2,111,257 149,663 122,343 \n Noninterest-bearing deposit accounts 707,196 668,908 670,230 663,536 38,288 6,694 \n Other noninterest-bearing liabilities 39,239 38,746 35,051 35,081 493 (30 ) \n Total liabilities $ 3,069,795 $ 2,881,351 $ 2,938,881 $ 2,809,874 $ 188,444 $ 129,007 \n \n\n\n\n___________\n\n(1) Includes loans HFS.\n\nNon-GAAP Financial Measures:\n\nIn addition to financial results presented in accordance with generally\naccepted accounting principles utilized in the United States (“GAAP”),\nthis earnings release presents non-GAAP financial measures that include\ntangible book value per share, and tangible common equity ratio. Management\nbelieves that providing the Company’s tangible book value per share and\ntangible common equity ratio provides useful supplemental information\nregarding the Company’s capital position and facilitates comparisons of the\nquality and composition of the Company's capital over time and with that of\nits peers. Where applicable, the Company has also presented comparable GAAP\ninformation.\n\nThese non-GAAP financial measures have inherent limitations, may not be\ncalculated in the same manner by other companies, and should not be considered\nin isolation or as a substitute for the Company’s financial position,\nresults of operations or other financial measures determined in accordance\nwith GAAP. These non-GAAP measures may not be comparable to similarly titled\nmeasures reported by other companies.\n\nReconciliation of the GAAP book value per share and common equity ratio to the\nnon-GAAP tangible book value per share and tangible common equity ratio is\npresented below.\n\n (Dollars in thousands, except share and per share amounts) September 30, June 30, September 30, \n Tangible Book Value Per Share: 2026 2026 2025 \n Stockholders' equity (GAAP) $ 333,206 $ 318,960 $ 300,511 \n Less: goodwill and core deposit intangible, net (17,117 ) (12,644 ) (14,876 ) \n Tangible common stockholders' equity (non-GAAP) $ 316,089 $ 306,316 $ 285,635 \n \n Common shares outstanding at end of period 7,739,797 ((1)) 7,320,801 ((2)) 7,432,359 ((3)) \n \n Book value per share (GAAP) $ 43.05 $ 43.57 $ 40.43 \n Tangible book value per share (non-GAAP) $ 40.84 $ 41.84 $ 38.43 \n \n Tangible Common Equity Ratio: \n Total assets (GAAP) $ 3,676,651 $ 3,179,080 $ 3,208,825 \n Less: goodwill and core deposit intangible assets (17,117 ) (12,644 ) (14,876 ) \n Tangible assets (non-GAAP) $ 3,659,534 $ 3,166,436 $ 3,193,949 \n \n Common equity ratio (GAAP) 9.06 % 10.03 % 9.37 % \n Tangible common equity ratio (non-GAAP) 8.64 9.67 8.94 \n \n\n_________________________\n\n (1) Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares. \n (2) Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. \n (3) Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares. \n \n\nContacts:\nMatthew D. Mullet,\nPresident and Chief Executive Officer\nPhillip D. Whittington,\nChief Financial Officer\n\n(425) 771-5299\nwww.FSBWA.com\n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/16e3476e-9995-4216-9cc5-e21b9cbded0c)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-10-21T20:30:03.319369956Z","server_sent_at_ms":1792614603319},"received_at":"2026-10-21T20:30:03.719Z","source_url":null},"analysis":{"id":"164179","press_release_id":"176190","analysis_json":{"industry":{"label":"Banks","sector":"Financials"},"redFlags":["Net income down 46% YoY and 38% QoQ with $2.5M more acquisition-related costs expected in Q4","Home Lending segment swung to a net loss of $806,000 due to rising interest rates","Nonperforming loans rose to $25.1M from $15.6M, including $8.6M of nonaccrual loans acquired from Pacific West","Classified loans up $13.4M to $38.4M","Fintech partner deposits of $177.5M added via acquisition — a new funding category for the bank","Net interest income includes $3.9M merger day-1 ACL gross-up treatment under early-adopted ASU 2025-08"],"eventType":"earnings","narrative":"FS Bancorp reported Q3 2026 net income of $4.9 million, or $0.63 per diluted share, down from $7.9 million ($1.04) in the prior quarter and $9.2 million ($1.18) a year ago, weighed down by $2.5 million of Pacific West acquisition costs and a Home Lending segment loss of $806,000.\n\nThe Pacific West acquisition, completed August 19, 2026 for roughly $35.3 million in stock and cash, added $476.5 million of assets including $256.5 million of loans and $435.6 million of deposits, and produced a $1.7 million non-taxable bargain purchase gain. Total deposits jumped 17.1% to $2.87 billion and net loans rose to $3.01 billion.\n\nNet interest margin improved six basis points sequentially to 4.36%, and management guided that most remaining acquisition costs will hit in Q4 2026.\n\nThe Board declared the 55th consecutive quarterly dividend of $0.29 per share, payable November 20, and the company also repurchased $1.9 million of stock in the quarter at an average $43.41 per share.","sentiment":"mixed","agentHooks":{"shouldPost":true,"suggestedAngle":"Acquisition costs crush Q3 earnings but the Pacific West deal drives double-digit balance sheet growth, a bargain purchase gain, and intact capital return — watch Q4 for residual integration expenses and credit migration from acquired loans."},"keyFigures":{"eps":0.63,"revenue":0,"guidance":"","customDimensions":{"nim":"4.36%","buyback_q3":"$1.9 million (44,664 shares at avg $43.41)","total_assets":"$3.68 billion","net_income_q3":4900000,"tier1_leverage":"11.2%","total_deposits":"$2.87 billion","deposit_growth_qoq":"$418.3 million (+17.1%)","dividend_per_share":"$0.29","acquisition_costs_q3":"$2.5 million","book_value_per_share":43.05,"eps_diluted_year_ago":1.18,"loans_receivable_net":"$3.01 billion","bargain_purchase_gain":"$1.7 million","net_income_nine_months":20700000,"net_income_prior_quarter":7900000,"total_risk_based_capital":"12.6%","acquisition_consideration":"$35.3 million","eps_diluted_prior_quarter":1.04,"net_income_year_ago_quarter":9200000,"net_income_nine_months_prior":24900000,"shares_issued_in_acquisition":430149,"tangible_book_value_per_share":40.84,"consecutive_quarterly_dividends":55}},"quotedText":"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","namedEntities":{"people":[{"name":"Matthew Mullet","role":"President and CEO"},{"name":"Phillip D. 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