FSBW

FS Bancorp stock barely moved after its Q3 2026 earnings release, ticking up just 0.05% to US$44.35 and leaving short term traders shrugging. The headline result was a sharp drop in basic earnings per share to US$0.65, well below the roughly US$1 level the bank has posted in recent quarters. This points to a clear profit squeeze rather than a revenue shock. For long term holders the story is different. Trailing 12 month earnings per share of US$3.78 and a recent 19.7% net profit margin keep the multi year investment case very much in play even as this quarter pressures profitability. Love FS Bancorp's solid trailing earnings and healthy recent net margin but uneasy about a single quarter of pressure on profitability? Screen for banks with sturdier recent earnings trends and robust balance sheets using the list of solid balance sheet and fundamentals stocks (26 results). - Total Revenue (Q3 2026 vs. Q3 2025): US$36.742 million vs. US$36.975 million (broadly flat on a year earlier) - Net Income, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$4.926 million vs. US$9.001 million (clear year on year decline in profitability) - Basic EPS (Q3 2026 vs. Q3 2025): US$0.65 vs. US$1.20 (earnings per share roughly halved compared with the prior period) - Net Interest Margin or NIM (TTM to Q3 2026 vs. TTM to Q3 2025): 19.7% net profit margin vs. 22.5% net profit margin (compressed trailing profitability on a yearly view) Earnings can swing around quarter to quarter, but the cash flowing through FS Bancorp tells you far more about what investors might actually be paying for. Looking only at FS Bancorp's cash flows and how they are modeled into future streams, the stock could be a hefty 46% undervalued. FS Bancorp still offers support for a constructive long term story through its trailing earnings power. Twelve month EPS of US$3.78 and a 19.7% net profit margin show the underlying franchise has recently produced solid profits even as this quarter came in softer. Revenue in Q3 2026 was broadly in line with Q3 2025, which suggests the community banking model is holding its ground on activity, even if conversion of that revenue into profit has been pressured. The bearish narrative finds plenty of fuel in these numbers. Net income excluding extra items almost halved year on year while basic EPS dropped from US$1.20 to US$0.65. That is a material squeeze on earnings from what appears to be a fairly stable revenue base. The trailing net profit margin also moved lower compared with the prior twelve month period. With the share price barely reacting on the day, shorter term pressure on profitability looks real even if it is not yet triggering a sharp market repricing. After earnings this soft, the key question is whether FS Bancorp is just seeing a blip or revealing deeper structural issues. Review the independent risk analysis for FS Bancorp which shows 1 important warning sign FS Bancorp shows how earnings pressure does not always move a share price much on the day. The real opportunity is finding stocks that could be undervalued before the market corrects them. - Company 1 - 44% below our estimate - expand large format LED display projects as transportation upgrades and youth sports venues adopt bigger digital screens. - Company 2 - 31% below our estimate - secure critical positions in data movement, connectivity and security as digital infrastructure spending broadens beyond headline AI projects. - Company 3 - 43% below our estimate - scale newer storage and inverter offerings so higher margin equipment offsets utility scale solar project delays. Three companies from the same screener. Open the full list of 30 companies trading below our fair value estimates → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FSBW. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

MOUNTLAKE TERRACE, Wash., Oct. 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ: FSBW) (the "Company"), the holding company for 1st Security Bank of Washington (the "Bank") today reported 2026 third quarter net income of $4.9 million, or $0.63 per diluted share, compared to $7.9 million, or $1.04 per diluted share, for the prior quarter, and $9.2 million, or $1.18 per diluted share, for the comparable quarter one year ago. For the nine months ended September 30, 2026, net income was $20.7 million, or $2.62 per diluted share, compared to net income of $24.9 million, or $3.18 per diluted share, for the comparable nine-month period in 2025. "We are excited to work with the Pacific West Bank team members to further expand the deposit and loan opportunities in the greater Portland, Oregon and Vancouver, Washington markets, and we appreciate all of the hard work that went into the successful systems integration, effective October 5, 2026, through the collaboration of our newly combined teams," stated Matthew Mullet, President and CEO of FS Bancorp, Inc. "We are also pleased to announce that our Board of Directors has approved our 55th consecutive quarterly cash dividend of $0.29 per common share, demonstrating our commitment to returning capital to long-term shareholders. The cash dividend will be paid on November 20, 2026, to shareholders of record as of November 6, 2026," concluded Mullet. Recent Events At the close of business on August 19, 2026, the Company completed its acquisition of Pacific West Bancorp ("Pacific West") and its wholly-owned subsidiary, Pacific West Bank. Pacific West shareholders received 430,149 shares of FS Bancorp common stock and $16.9 million in cash, for a total consideration of approximately $35.3 million based on the closing price of FS Bancorp common stock on the acquisition date. The acquisition was accounted for using the acquisition method of accounting. Accordingly, the purchase price was allocated to the assets acquired, including identifiable intangible assets, and the liabilities assumed, based on their estimated fair values as of the acquisition date. These fair values represent management's best estimates based on information available and facts and circumstances in existence on the acquisition date and are subject to adjustment during a measurement period not to exceed one year from the acquisition date. The Company acquired assets with a fair value of $476.5 million, including loans of $256.5 million and a core deposit intangible of $5.3 million, and assumed liabilities of $439.5 million, including deposits of $435.6 million. In accordance with Accounting Standards Update ("ASU") 2025-08, which the Company early adopted effective January 1, 2026, the allowance for credit losses on acquired loans of $3.9 million was established at the acquisition date through a gross-up of the loans' amortized cost rather than through the provision for credit losses. Because the fair value of net assets acquired exceeded the consideration paid, the Company recognized a preliminary bargain purchase gain of $1.7 million in noninterest income, which is not taxable. The Company incurred $2.5 million in merger-related expenses during the quarter. 2026 Third Quarter Highlights - Net income totaled $4.9 million for the third quarter of 2026, compared to $7.9 million for the previous quarter, and $9.2 million for the comparable quarter one year ago; - Total deposits increased $418.3 million, or 17.1%, to $2.87 billion at September 30, 2026, compared to $2.45 billion at June 30, 2026, primarily reflecting the Pacific West Bancorp Acquisition ("Pacific West Acquisition") which had $442.8 million in deposits at September 30, 2026. Transactional deposits increased $377.6 million during the quarter, of which $351.6 million was attributable to the Pacific West Acquisition. Compared to September 30, 2025, total deposits increased $180.7 million, or 6.7%; - Loans receivable, net increased $379.1 million to $3.01 billion at September 30, 2026, from $2.63 billion at June 30, 2026, and increased $408.5 million from $2.60 billion at September 30, 2025. The increases from both prior periods reflected the Pacific West Acquisition, which included $252.7 million in loans that remained outstanding at September 30, 2026, and $131.7 million of loan growth during the third quarter; - The Commercial and Consumer Banking segment reported net income of $5.7 million for the third quarter of 2026, compared to $6.8 million for the prior quarter and $8.4 million for the third quarter of 2025. The Home Lending segment reported a net loss of $806,000 for the third quarter of 2026 due to rising interest rates, compared to net income of $1.1 million for the prior quarter, and $775,000 for the third quarter of 2025; - Repurchased 44,664 shares of the Company's common stock in the open market for $1.9 million in the third quarter of 2026, at an average price of $43.41 per share; - Book value per share decreased $0.52, or 1.2%, to $43.05 at September 30, 2026, compared to $43.57 at June 30, 2026, and increased $2.62, or 6.5%, from $40.43 at September 30, 2025. Tangible book value per share (non-GAAP financial measure) decreased $1.00 to $40.84 at September 30, 2026, compared to $41.84 at June 30, 2026, and increased $2.41 from $38.43 at September 30, 2025. See, "Non-GAAP Financial Measures;" - Regulatory capital ratios at the Bank were 12.6% for total risk-based capital and 11.2% for Tier 1 leverage capital at September 30, 2026, compared to 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital at June 30, 2026. The Bank remained well capitalized under applicable regulatory capital standards. Segment Reporting The Company operates through two reportable segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment also manages the Bank's investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment. The tables below provide a summary of segment reporting at or for the three and nine months ended September 30, 2026 and 2025 (dollars in thousands): | At or For the Three Months Ended September 30, 2026 Condensed income statement: | Commercial and Consumer Banking | | | Home Lending | | | Total Net interest income (1) | $ | 31,888 | | | | $ | 3,798 | | | | $ | 35,686 | Provision for credit losses | | (2,855 | ) | | | | (607 | ) | | | | (3,462 | ) Noninterest income (2) | | 4,776 | | | | | 1,400 | | | | | 6,176 | Noninterest expense (3) | | (26,703 | ) | | | | (5,611 | ) | | | | (32,314 | ) Income before provision for income taxes | | 7,106 | | | | | (1,020 | ) | | | | 6,086 | (Provision) benefit for income taxes | | (1,374 | ) | | | | 214 | | | | | (1,160 | ) Net income (loss) | $ | 5,732 | | | | $ | (806 | ) | | | $ | 4,926 | Total average assets for period ended | $ | 2,685,235 | | | | $ | 718,565 | | | | $ | 3,403,800 | Full-time employees ("FTEs") | | 513 | | | | | 113 | | | | | 626 | | | | | | | | | | | | | | | At or For the Three Months Ended September 30, 2025 | Condensed income statement: | Commercial and Consumer Banking | | | Home Lending | | | Total | Net interest income (1) | $ | 30,810 | | | $ | 2,880 | | | $ | 33,690 | Provision for credit losses | | (2,150 | ) | | | (159 | ) | | | (2,309 | ) Noninterest income (2) | | 2,079 | | | | 3,515 | | | | 5,594 | Noninterest expense (3) | | (20,134 | ) | | | (5,254 | ) | | | (25,388 | ) Income before provision for income taxes | | 10,605 | | | | 982 | | | | 11,587 | Provision for income taxes | | (2,203 | ) | | | (207 | ) | | | (2,410 | ) Net income | $ | 8,402 | | | $ | 775 | | | $ | 9,177 | Total average assets for period ended | $ | 2,523,410 | | | $ | 662,047 | | | $ | 3,185,457 | FTEs | | 460 | | | | 115 | | | | 575 | | | | | | | | | | | | | At or For the Nine Months Ended September 30, 2026 Condensed income statement: | Commercial and Consumer Banking | | | Home Lending | | | Total Net interest income (1) | $ | 91,102 | | | | $ | 9,777 | | | | $ | 100,879 | Provision for credit losses | | (7,697 | ) | | | | (935 | ) | | | | (8,632 | ) Noninterest income (2) | | 9,980 | | | | | 7,747 | | | | | 17,727 | Noninterest expense (3) | | (68,978 | ) | | | | (14,960 | ) | | | | (83,938 | ) Income before provision for income taxes | | 24,407 | | | | | 1,629 | | | | | 26,036 | Provision for income taxes | | (5,136 | ) | | | | (208 | ) | | | | (5,344 | ) Net income | $ | 19,271 | | | | $ | 1,421 | | | | $ | 20,692 | Total average assets for period ended | $ | 2,580,513 | | | | $ | 682,123 | | | | $ | 3,262,636 | FTEs | | 513 | | | | | 113 | | | | | 626 | | At or For the Nine Months Ended September 30, 2025 | Condensed income statement: | Commercial and Consumer Banking | | | Home Lending | | | Total | Net interest income (1) | $ | 88,397 | | | $ | 8,387 | | | $ | 96,784 | Provision for credit losses | | (5,320 | ) | | | (602 | ) | | | (5,922 | ) Noninterest income (2) | | 6,621 | | | | 9,269 | | | | 15,890 | Noninterest expense (3) | | (60,624 | ) | | | (15,321 | ) | | | (75,945 | ) Income before provision for income taxes | | 29,074 | | | | 1,733 | | | | 30,807 | Provision for income taxes | | (5,517 | ) | | | (364 | ) | | | (5,881 | ) Net income | $ | 23,557 | | | $ | 1,369 | | | $ | 24,926 | Total average assets for period ended | $ | 2,468,543 | | | $ | 643,460 | | | $ | 3,112,003 | FTEs | | 460 | | | | 115 | | | | 575 | ________________________ (1) | | Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets. (2) | | Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and nine months ended September 30, 2026, the Company recorded a net decrease of $742,000 and $799,000 in fair value, compared to a net increase of $203,000 and $469,000 in fair value for the three and nine months ended September 30, 2025, respectively. As of September 30, 2026 and 2025, there were $13.9 million and $12.8 million, respectively, in residential mortgage loans recorded at fair value, which had previously been transferred from loans held for sale to loans held for investment. (3) | | Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and nine months ended September 30, 2026 and 2025, the Home Lending segment included allocated overhead expenses of $1.9 million and $5.5 million, compared to $1.8 million and $5.5 million, respectively. | | Asset Summary The following table summarizes the composition of total assets, including the dollar and percentage changes from the linked quarter and prior-year period. ASSETS | | | ​ | | | | ​ | | | | ​ | | Linked Quarter | | | Prior Year | (Dollars in thousands) | September 30, | | | June 30, | | | September 30, | | | Change | | | Quarter Change | | 2026 | | | 2026 | | | 2025 | | | $ | | | % | | | $ | | | % | Cash and due from banks | $ | 29,022 | | | $ | 12,835 | | | $ | 12,391 | | | $ | 16,187 | | | | 126 | % | | $ | 16,631 | | | | 134 | % Interest-bearing deposits at other financial institutions | | 14,925 | | | | 16,875 | | | | 48,889 | | | | (1,950 | ) | | | (12 | ) | | | (33,964 | ) | | | (69 | ) Total cash and cash equivalents | | 43,947 | | | | 29,710 | | | | 61,280 | | | | 14,237 | | | | 48 | | | | (17,333 | ) | | | (28 | ) Securities available-for-sale, at fair value | | 342,185 | | | | 269,460 | | | | 311,695 | | | | 72,725 | | | | 27 | | | | 30,490 | | | | 10 | Securities held-to-maturity, net | | 37,734 | | | | 34,845 | | | | 31,386 | | | | 2,889 | | | | 8 | | | | 6,348 | | | | 20 | Loans held for sale, at fair value | | 22,820 | | | | 30,548 | | | | 38,579 | | | | (7,728 | ) | | | (25 | ) | | | (15,759 | ) | | | (41 | ) Loans receivable, net | | 3,008,129 | | | | 2,628,992 | | | | 2,599,601 | | | | 379,137 | | | | 14 | | | | 408,528 | | | | 16 | Accrued interest receivable | | 16,901 | | | | 14,263 | | | | 15,122 | | | | 2,638 | | | | 18 | | | | 1,779 | | | | 12 | Premises and equipment, net | | 49,148 | | | | 43,455 | | | | 32,444 | | | | 5,693 | | | | 13 | | | | 16,704 | | | | 51 | Long-lived assets held for sale | | 3,258 | | | | 3,258 | | | | — | | | | — | | | | — | | | | 3,258 | | | NM | Operating lease right-of-use | | 7,799 | | | | 6,655 | | | | 6,832 | | | | 1,144 | | | | 17 | | | | 967 | | | | 14 | Federal Home Loan Bank stock, at cost | | 13,073 | | | | 14,420 | | | | 7,975 | | | | (1,347 | ) | | | (9 | ) | | | 5,098 | | | | 64 | Deferred tax asset, net | | 9,469 | | | | 6,441 | | | | 6,767 | | | | 3,028 | | | | 47 | | | | 2,702 | | | | 40 | Bank owned life insurance ("BOLI"), net | | 41,857 | | | | 36,771 | | | | 38,531 | | | | 5,086 | | | | 14 | | | | 3,326 | | | | 9 | MSRs, held at the lower of cost or fair value | | 8,887 | | | | 8,912 | | | | 8,506 | | | | (25 | ) | | | — | | | | 381 | | | | 4 | Goodwill | | 3,592 | | | | 3,592 | | | | 3,592 | | | | — | | | | — | | | | — | | | | — | Core deposit intangible, net | | 13,525 | | | | 9,052 | | | | 11,284 | | | | 4,473 | | | | 49 | | | | 2,241 | | | | 20 | Other assets | | 54,327 | | | | 38,706 | | | | 35,231 | | | | 15,621 | | | | 40 | | | | 19,096 | | | | 54 | TOTAL ASSETS | $ | 3,676,651 | | | $ | 3,179,080 | | | $ | 3,208,825 | | | $ | 497,571 | | | | 16 | % | | $ | 467,826 | | | | 15 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | The following table summarizes the composition of the Company's loan portfolio by loan category as of September 30, 2026, compared to June 30, 2026 and September 30, 2025, including the dollar changes from the linked quarter and prior year period. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Prior LOAN PORTFOLIO | | | | | | | | | | | | | | | | | | | | | | | | | Linked | | | Year (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | Quarter | | | Quarter COMMERCIAL REAL ESTATE | September 30, 2026 | | | June 30, 2026 | | | September 30, 2025 | | | $ | | | $ ("CRE") LOANS | Amount | | | Percent | | | Amount | | | Percent | | | Amount | | | Percent | | | Change | | | Change CRE owner occupied | $ | 224,764 | | | | | 7.3 | % | | $ | 184,136 | | | | 6.9 | % | | $ | 170,714 | | | | 6.5 | % | | $ | 40,628 | | | | $ | 54,050 | CRE non-owner occupied | | 298,385 | | | | | 9.8 | | | | 188,258 | | | | 7.1 | | | | 172,713 | | | | 6.6 | | | | 110,127 | | | | | 125,672 | Commercial and speculative construction and development | | 393,005 | | | | | 12.9 | | | | 370,459 | | | | 13.9 | | | | 326,684 | | | | 12.4 | | | | 22,546 | | | | | 66,321 | Multi-family | | 297,955 | | | | | 9.8 | | | | 262,137 | | | | 9.9 | | | | 262,578 | | | | 10.0 | | | | 35,818 | | | | | 35,377 | Total CRE loans | | 1,214,109 | | | | | 39.8 | | | | 1,004,990 | | | | 37.8 | | | | 932,689 | | | | 35.5 | | | | 209,119 | | | | | 281,420 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RESIDENTIAL REAL ESTATE LOANS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | One-to-four-family (excludes HFS) | | 758,537 | | | | | 24.9 | | | | 660,518 | | | | 24.8 | | | | 629,712 | | | | 23.9 | | | | 98,019 | | | | | 128,825 | Home equity | | 93,020 | | | | | 3.1 | | | | 88,214 | | | | 3.3 | | | | 86,895 | | | | 3.3 | | | | 4,806 | | | | | 6,125 | Residential custom construction | | 56,677 | | | | | 1.9 | | | | 44,765 | | | | 1.7 | | | | 53,296 | | | | 2.0 | | | | 11,912 | | | | | 3,381 | Total residential real estate loans | | 908,234 | | | | | 29.9 | | | | 793,497 | | | | 29.8 | | | | 769,903 | | | | 29.2 | | | | 114,737 | | | | | 138,331 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | CONSUMER LOANS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Indirect home improvement | | 493,505 | | | | | 16.2 | | | | 502,151 | | | | 18.9 | | | | 527,597 | | | | 20.1 | | | | (8,646 | ) | | | | (34,092 | ) Marine | | 68,838 | | | | | 2.3 | | | | 66,941 | | | | 2.5 | | | | 70,220 | | | | 2.7 | | | | 1,897 | | | | | (1,382 | ) Other consumer | | 21,714 | | | | | 0.7 | | | | 4,111 | | | | 0.1 | | | | 2,962 | | | | 0.1 | | | | 17,603 | | | | | 18,752 | Total consumer loans | | 584,057 | | | | | 19.2 | | | | 573,203 | | | | 21.5 | | | | 600,779 | | | | 22.9 | | | | 10,854 | | | | | (16,722 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | COMMERCIAL BUSINESS LOANS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial and industrial ("C&I") | | 322,572 | | | | | 10.6 | | | | 281,181 | | | | 10.6 | | | | 311,173 | | | | 11.8 | | | | 41,391 | | | | | 11,399 | Warehouse lending | | 15,620 | | | | | 0.5 | | | | 7,286 | | | | 0.3 | | | | 15,113 | | | | 0.6 | | | | 8,334 | | | | | 507 | Total commercial business loans | | 338,192 | | | | | 11.1 | | | | 288,467 | | | | 10.9 | | | | 326,286 | | | | 12.4 | | | | 49,725 | | | | | 11,906 | Total loans receivable, gross | | 3,044,592 | | | | | 100.0 | % | | | 2,660,157 | | | | 100.0 | % | | | 2,629,657 | | | | 100.0 | % | | | 384,435 | | | | | 414,935 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses ("ACL") on loans | | (36,463 | ) | | | | | | | | (31,165 | ) | | | | | | | (30,056 | ) | | | | | | | (5,298 | ) | | | | (6,407 | ) Total loans receivable, net | $ | 3,008,129 | | | | | | | | $ | 2,628,992 | | | | | | | $ | 2,599,601 | | | | | | | $ | 379,137 | | | | $ | 408,528 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loan growth during the three months ended September 30, 2026, reflected the Pacific West Acquisition, which included $252.7 million in loans that remained outstanding at September 30, 2026, as well as $131.5 million of loan growth excluding the acquired loans. Excluding the impact of the acquisition, loan growth was primarily concentrated in non-owner occupied commercial real estate and one-to-four family residential loans, which increased $29.8 million and $76.6 million, respectively, from June 30, 2026. Growth in one-to-four family residential loans included the purchase of $36.7 million of adjustable-rate residential mortgage loans. The following table presents information on CRE loans scheduled to mature or reprice within the next two years, excluding loans that reprice automatically in connection with changes in the prime rate. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Current | (Dollars in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Weighted | thousands) | For the Quarter Ended | | | | | | | Average | CRE by type: | Dec 31, 2026 | | | Mar 31, 2027 | | | Jun 30, 2027 | | | Sep 30, 2027 | | | Dec 31, 2027 | | | Mar 31, 2028 | | | Jun 30, 2028 | | | Sep 30, 2028 | | | Total | | | Rate | Apartment | $ | 54,457 | | | $ | 10,183 | | | $ | 5,598 | | | $ | 7,892 | | | $ | 14,007 | | | $ | 16,719 | | | $ | 382 | | | $ | 3,874 | | | $ | 113,112 | | | | 5.74 | % Education/Worship | | — | | | | — | | | | — | | | | 2,345 | | | | — | | | | — | | | | — | | | | 5,822 | | | | 8,167 | | | | 5.82 | % Industrial | | 10,122 | | | | 6,038 | | | | 3,608 | | | | 6,277 | | | | 5,290 | | | | 3,155 | | | | 7,261 | | | | 7,588 | | | | 49,339 | | | | 5.33 | % Mixed use | | 768 | | | | 2,369 | | | | — | | | | 413 | | | | 3,192 | | | | 442 | | | | — | | | | 406 | | | | 7,590 | | | | 5.77 | % Office | | 21,251 | | | | 3,499 | | | | 4,282 | | | | 8,088 | | | | 3,585 | | | | 300 | | | | 3,924 | | | | 1,102 | | | | 46,031 | | | | 5.41 | % Other | | 2,681 | | | | 269 | | | | 1,713 | | | | 666 | | | | 24 | | | | — | | | | 853 | | | | 8,468 | | | | 14,674 | | | | 6.11 | % Retail | | 3,272 | | | | 3,737 | | | | 5,753 | | | | 7,326 | | | | — | | | | 14 | | | | 432 | | | | — | | | | 20,534 | | | | 4.73 | % Senior housing and assisted living | | — | | | | — | | | | 1,327 | | | | — | | | | — | | | | 3,002 | | | | — | | | | — | | | | 4,329 | | | | 6.83 | % Total | $ | 92,551 | | | $ | 26,095 | | | $ | 22,281 | | | $ | 33,007 | | | $ | 26,098 | | | $ | 23,632 | | | $ | 12,852 | | | $ | 27,260 | | | $ | 263,776 | | | | 5.57 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The composition of CRE loans at the dates indicated were as follows: (Dollars in thousands) | | | | | | | | CRE by Type: | September 30, 2026 | | | June 30, 2026 | | | September 30, 2025 | CRE non-owner occupied: | | | | | | | | Office | $63,682 | | | | $43,705 | | | $42,537 | Retail | | 56,375 | | | | 42,042 | | | | 36,827 | Hospitality/restaurant | | 51,126 | | | | 24,499 | | | | 25,798 | Industrial | | 44,576 | | | | 20,824 | | | | 14,352 | Mixed use | | 38,154 | | | | 18,489 | | | | 18,663 | Self-storage | | 21,089 | | | | 18,767 | | | | 19,001 | Senior housing/assisted living | | 10,818 | | | | 6,882 | | | | 7,390 | Other | | 10,220 | | | | 9,189 | | | | 3,632 | Education/worship | | 2,345 | | | | 2,359 | | | | 2,441 | Land | | — | | | | 1,502 | | | | 2,072 | Total CRE non-owner occupied | | 298,385 | | | | 188,258 | | | | 172,713 | CRE owner occupied: | | | | | | | | Industrial | | 93,186 | | | | 79,137 | | | | 77,059 | Office | | 44,588 | | | | 31,862 | | | | 31,981 | Retail | | 30,272 | | | | 27,433 | | | | 17,399 | Hospitality/restaurant | | 10,851 | | | | 7,622 | | | | 7,675 | Education/worship | | 10,727 | | | | 3,367 | | | | 5,516 | Other | | 10,654 | | | | 10,539 | | | | 10,521 | Mixed use | | 9,720 | | | | 9,239 | | | | 4,622 | Automobile related | | 6,697 | | | | 6,745 | | | | 7,164 | Car wash | | 4,359 | | | | 4,376 | | | | 4,430 | Agriculture | | 3,710 | | | | 3,816 | | | | 4,347 | Total CRE owner occupied | | 224,764 | | | | 184,136 | | | | 170,714 | Total | | $523,149 | | | | $372,394 | | | | $343,427 | | | | | | | | | | | | The composition of construction loans at the dates indicated were as follows: (Dollars in thousands) | September 30, 2026 | | | June 30, 2026 | | | September 30, 2025 | Construction Types: | Amount | | | Percent | | | Amount | | | Percent | | | Amount | | | Percent | Commercial construction – self storage | $ | 25,748 | | | | 5.7 | % | | $ | 25,234 | | | | 6.1 | % | | $ | 18,701 | | | | 4.9 | % Commercial construction – hotel | | 15,299 | | | | 3.4 | | | | 13,463 | | | | 3.3 | | | | 6,147 | | | | 1.6 | Commercial construction – retail | | 13,486 | | | | 3.0 | | | | 8,447 | | | | 2.0 | | | | 8,445 | | | | 2.2 | Commercial construction – office | | 7,164 | | | | 1.6 | | | | 7,164 | | | | 1.7 | | | | 9,250 | | | | 2.4 | Commercial construction – lots | | 2,945 | | | | 0.7 | | | | — | | | | — | | | | — | | | | — | Commercial construction – industrial | | 1,845 | | | | 0.4 | | | | — | | | | — | | | | — | | | | — | Commercial construction – auto service facility | | 1,465 | | | | 0.3 | | | | — | | | | — | | | | — | | | | — | Multi-family | | 52,127 | | | | 11.6 | | | | 46,186 | | | | 11.1 | | | | 29,751 | | | | 7.8 | Custom construction – single family residential and single family manufactured residential | | 43,921 | | | | 9.8 | | | | 33,944 | | | | 8.2 | | | | 44,299 | | | | 11.7 | Custom construction – land, lot and acquisition and development | | 12,766 | | | | 2.8 | | | | 10,821 | | | | 2.6 | | | | 8,998 | | | | 2.4 | Speculative residential construction – vertical | | 230,036 | | | | 51.2 | | | | 225,992 | | | | 54.4 | | | | 217,821 | | | | 57.3 | Speculative residential construction – land, lot and acquisition and development | | 42,890 | | | | 9.5 | | | | 43,973 | | | | 10.6 | | | | 36,668 | | | | 9.7 | Total | $ | 449,692 | | | | 100.0 | % | | $ | 415,224 | | | | 100.0 | % | | $ | 380,080 | | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | | Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows: (Dollars in | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Prior Year | thousands) | For the Three Months Ended | | | Linked Quarter | | | Quarter | | September 30, 2026 | | | June 30, 2026 | | | September 30, 2025 | | | $ | | | % | | | $ | | | % | | Amount | | | Percent | | | Amount | | | Percent | | | Amount | | | Percent | | | Change | | | Change | | | Change | | | Change | Purchase | $ | 179,810 | | | | 84.3 | % | | $ | 163,100 | | | | 79.2 | % | | $ | 155,920 | | | | 88.8 | % | | $ | 16,710 | | | | 10.2 | | | $ | 23,890 | | | | 15.3 | % Refinance | | 33,367 | | | | 15.7 | | | | 42,741 | | | | 20.8 | | | | 19,714 | | | | 11.2 | | | | (9,374 | ) | | | (21.9 | ) | | | 13,653 | | | | 69.3 | % Total | $ | 213,177 | | | | 100.0 | % | | $ | 205,841 | | | | 100.0 | % | | $ | 175,634 | | | | 100.0 | % | | $ | 7,336 | | | | 3.6 | | | $ | 37,543 | | | | 21.4 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Dollars in thousands) | For the Nine Months Ended September 30, | | | | | | | | | | 2026 | | | 2025 | | | | | | | | | | Amount | | | Percent | | | Amount | | | Percent | | | $ Change | | | % Change | Purchase | $ | 482,012 | | | | 76.8 | % | | $ | 446,631 | | | | 85.8 | % | | $ | 35,381 | | | | 7.9 | % Refinance | | 145,438 | | | | 23.2 | | | | 73,697 | | | | 14.2 | | | | 71,741 | | | | 97.3 | % Total | $ | 627,450 | | | | 100.0 | % | | $ | 520,328 | | | | 100.0 | % | | $ | 107,122 | | | | 20.6 | % | | | | | | | | | | | | | | | | | | | | | | | During the quarter ended September 30, 2026, the Company sold $122.9 million of one-to-four-family loans, compared to $156.1 million during the previous quarter and $156.4 million during the same quarter one year ago. Gross margins on home loan sales increased to 3.55% for the quarter ended September 30, 2026, compared to 2.98% in the previous quarter and increased from 3.14% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs. Liabilities and Equity Summary The following table summarizes the components and changes in deposits, borrowings, equity, and book value per common share at the dates indicated, including the dollar changes from the linked quarter and prior year period. (Dollars in thousands) | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | Linked | | | Prior Year | DEPOSITS | September 30, 2026 | | | June 30, 2026 | | | September 30, 2025 | | | Quarter | | | Quarter | Transactional deposits: | Amount | | | Percent | | | Amount | | | Percent | | | Amount | | | Percent | | | $ Change | | | $ Change | Noninterest-bearing checking | $ | 738,715 | | | | 25.9 | % | | $ | 629,799 | | | | 25.7 | % | | $ | 648,661 | | | | 24.2 | % | | $ | 108,916 | | | $ | 90,054 | Interest-bearing checking | | 293,069 | | | | 10.2 | | | | 209,721 | | | | 8.6 | | | | 199,527 | | | | 7.4 | | | | 83,348 | | | | 93,542 | Fintech partner deposits (1) | | 177,463 | | | | 6.2 | | | | — | | | | — | | | | — | | | | — | | | | 177,463 | | | | 177,463 | Escrow accounts related to mortgages serviced (2) | | 19,976 | | | | 0.7 | | | | 12,057 | | | | 0.5 | | | | 17,192 | | | | 0.6 | | | | 7,919 | | | | 2,784 | Subtotal | | 1,229,223 | | | | 43.0 | | | | 851,577 | | | | 34.8 | | | | 865,380 | | | | 32.2 | | | | 377,646 | | | | 363,843 | Savings and money market: | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ Savings | | 181,400 | | | | 6.3 | | | | 173,092 | | | | 7.1 | | | | 167,006 | | | | 6.2 | | | | 8,308 | | | | 14,394 | Money market | | 433,851 | | | | 15.1 | | | | 375,833 | | | | 15.3 | | | | 354,082 | | | | 13.2 | | | | 58,018 | | | | 79,769 | Subtotal | | 615,251 | | | | 21.4 | | | | 548,925 | | | | 22.4 | | | | 521,088 | | | | 19.4 | | | | 66,326 | | | | 94,163 | Certificates of deposit: | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ CDs | | 946,667 | | | | 33.0 | | | | 922,022 | | | | 37.6 | | | | 930,371 | | | | 34.6 | | | | 24,645 | | | | 16,296 | Brokered Deposits | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ | | | | ​ Non-maturity brokered deposits | | 1,003 | | | | — | | | | 4,027 | | | | 0.2 | | | | 251 | | | | — | | | | (3,024 | ) | | | 752 | Maturity brokered deposits | | 75,060 | | | | 2.6 | | | | 122,332 | | | | 5.0 | | | | 369,403 | | | | 13.8 | | | | (47,272 | ) | | | (294,343 | ) Subtotal | | 76,063 | | | | 2.6 | | | | 126,359 | | | | 5.2 | | | | 369,654 | | | | 13.8 | | | | (50,296 | ) | | | (293,591 | ) Total deposits | $ | 2,867,204 | | | | 100.0 | % | | $ | 2,448,883 | | | | 100.0 | % | | $ | 2,686,493 | | | | 100.0 | % | | $ | 418,321 | | | $ | 180,711 | Borrowings (3) | $ | 373,500 | | | | | ​ | | $ | 324,500 | | | | | ​ | | $ | 129,305 | | | | | ​ | | $ | 49,000 | | | $ | 244,195 | Stockholders' equity | $ | 333,206 | | | | | ​ | | $ | 318,960 | | | | | ​ | | $ | 300,511 | | | | | ​ | | $ | 14,246 | | | $ | 32,695 | Book value per common share | $ | 43.05 | | | | | ​ | | $ | 43.57 | | | | | ​ | | $ | 40.43 | | | | | ​ | | $ | (0.52 | ) | | $ | 2.62 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | _____________ (1) | | Fintech partner deposits are deposits associated with the Bank's Banking-as-a-Service relationships with financial technology companies. (2) | | Primarily noninterest-bearing accounts based on applicable state law. (3) | | Comprised of FHLB advances and Federal Reserve Bank borrowings. | | The Company acquired its fintech partner deposits through the acquisition of Pacific West Acquisition. Through these relationships, the Company provides deposit and related banking services to fintech partners and their end users. Brokered deposits declined from the prior quarter, partially offset by increased borrowings, which offered a slightly lower cost of funds. In the table above, the increase in stockholders' equity from June 30, 2026, to September 30, 2026, was primarily due to $18.4 million in common stock issued in the Pacific West Acquisition, and net income of $4.9 million. Changes in the fair value of available‑for‑sale securities and interest rate swap cash flow hedges decreased accumulated other comprehensive income ("AOCI") by $5.3 million, net of tax, reflecting changes in market interest rates during the quarter. The increase in stockholders' equity was partially offset by $1.9 million in open market share repurchases and $2.2 million in cash dividends paid. The Bank is considered "well capitalized" under the capital requirement established by the Federal Deposit Insurance Corporation ("FDIC") and the Company exceeded all regulatory capital requirements. At September 30, 2026, capital ratios presented for the Bank and the Company were as follows: | | At September 30, 2026 | | Bank | | Company Total risk-based capital (to risk-weighted assets) | | 12.61 | % | | 12.35 | % Tier 1 leverage capital (to average assets) | | 11.24 | % | | 9.89 | % CET 1 capital (to risk-weighted assets) | | 11.44 | % | | 10.07 | % | | | | | | Credit Quality The following tables summarize changes in the ACL on loans for the periods indicated and the balances of nonperforming and classified loans at the dates indicated. | For the three months ended | | | Linked | | | Prior Year ACL ON LOANS | Sep 30, | | | Jun 30, | | | Sep 30, | | | Quarter | | | Quarter (Dollars in thousands) | 2026 | | | 2026 | | | 2025 | | | $ Change | | | $ Change Beginning ACL balance | $ | 31,165 | | | | $ | 32,443 | | | | $ | 32,189 | | | | $ | (1,278 | ) | | | $ | (1,024 | ) Provision | | 2,953 | | | | | 2,559 | | | | | 1,851 | | | | | 394 | | | | | 1,102 | Merger day 1 ACL (1) | | 3,898 | | | | | — | | | | | — | | | | | 3,898 | | | | | 3,898 | Charge-offs | | | | | | | | | | | | | | | | | | Indirect | | (1,926 | ) | | | | (2,067 | ) | | | | (1,941 | ) | | | | 141 | | | | | 15 | Marine | | (186 | ) | | | | (7 | ) | | | | (55 | ) | | | | (179 | ) | | | | (131 | ) Other | | (22 | ) | | | | (49 | ) | | | | (49 | ) | | | | 27 | | | | | 27 | Commercial and speculative construction and development | | — | | | | | (2,277 | ) | | | | (2,299 | ) | | | | 2,277 | | | | | 2,299 | Commercial business | | (1 | ) | | | | (39 | ) | | | | — | | | | | 38 | | | | | (1 | ) Subtotal | | (2,135 | ) | | | | (4,439 | ) | | | | (4,344 | ) | | | | 2,304 | | | | | 2,209 | Recoveries | | | | | | | | | | | | | | | | | | Indirect | | 511 | | | | | 584 | | | | | 323 | | | | | (73 | ) | | | | 188 | Marine | | 17 | | | | | 3 | | | | | 16 | | | | | 14 | | | | | 1 | Other | | 4 | | | | | 15 | | | | | 12 | | | | | (11 | ) | | | | (8 | ) Commercial business | | 50 | | | | | — | | | | | 9 | | | | | 50 | | | | | 41 | Subtotal | | 582 | | | | | 602 | | | | | 360 | | | | | (20 | ) | | | | 222 | Ending ACL balance | $ | 36,463 | | | | $ | 31,165 | | | | $ | 30,056 | | | | $ | 5,298 | | | | $ | 6,407 | | | | | | | | | | | | | | | | | | | | | | | | (1) | | The Company early adopted ASU 2025-08. The guidance was applied prospectively to qualifying purchased seasoned loans acquired in connection with the Pacific West Acquisition. | | NONPERFORMING LOANS | | | | | | | | | Linked | | Prior Year (Dollars in thousands) | Sep 30, | | Jun 30, | | Sep 30, | | Quarter | | Quarter CRE LOANS | 2026 | | 2026 | | 2025 | | $ Change | | $ Change CRE owner occupied | $ | 3,542 | | $ | 614 | | $ | 2,047 | | $ | 2,928 | | | $ | 1,495 | CRE non-owner occupied | | 5,623 | | | — | | | — | | | 5,623 | | | | 5,623 | Commercial and speculative construction and development | | 7,824 | | | 7,164 | | | 9,150 | | | 660 | | | | (1,326 | ) Multi-family | | 130 | | | — | | | — | | | 130 | | | | 130 | Total CRE loans | | 17,119 | | | 7,778 | | | 11,197 | | | 9,341 | | | | 5,922 | | | | | | | | | | | | | | | RESIDENTIAL REAL ESTATE LOANS | | | | | | | | | | | | | | One-to-four-family (excludes HFS) | | 2,327 | | | 1,973 | | | 1,799 | | | 354 | | | | 528 | Home equity | | 520 | | | 472 | | | 317 | | | 48 | | | | 203 | Total residential real estate loans | | 2,847 | | | 2,445 | | | 2,116 | | | 402 | | | | 731 | | | | | | | | | | | | | | | CONSUMER LOANS | | | | | | | | | | | | | | Indirect home improvement | | 4,421 | | | 4,799 | | | 3,802 | | | (378 | ) | | | 619 | Marine | | 540 | | | 606 | | | 620 | | | (66 | ) | | | (80 | ) Other consumer | | 15 | | | 19 | | | 40 | | | (4 | ) | | | (25 | ) Total consumer loans | | 4,976 | | | 5,424 | | | 4,462 | | | (448 | ) | | | 514 | | | | | | | | | | | | | | | COMMERCIAL BUSINESS LOANS | | | | | | | | | | | | | | C&I | | 199 | | | — | | | 600 | | | 199 | | | | (401 | ) Total nonperforming loans | $ | 25,141 | | $ | 15,647 | | $ | 18,375 | | $ | 9,494 | | | $ | 6,766 | | | | | | | | | | | | | | | | | The increase in nonperforming loans at September 30, 2026, compared to June 30, 2026, was primarily driven by $8.6 million of nonaccrual loans acquired as part of the Pacific West Acquisition. The acquired loans were on nonaccrual status as of the acquisition date and booked at fair market value under acquisition accounting. CLASSIFIED LOANS | | | | | | | | | Linked | | Prior Year (Dollars in thousands) | Sep 30, | | Jun 30, | | Sep 30, | | Quarter | | Quarter CRE LOANS | 2026 | | 2026 | | 2025 | | $ Change | | $ Change CRE owner occupied | $ | 4,224 | | $ | 1,212 | | $ | 3,080 | | $ | 3,012 | | | $ | 1,144 | CRE non-owner occupied | | 9,952 | | | 3,024 | | | 2,435 | | | 6,928 | | | | 7,517 | Commercial and speculative construction and development | | 7,824 | | | 7,164 | | | 9,150 | | | 660 | | | | (1,326 | ) Multi-family | | 3,307 | | | — | | | — | | | 3,307 | | | | 3,307 | Total CRE loans | | 25,307 | | | 11,400 | | | 14,665 | | | 13,907 | | | | 10,642 | | | | | | | | | | | | | | | RESIDENTIAL REAL ESTATE LOANS | | | | | | | | | | | | | | One-to-four-family (excludes HFS) | | 4,140 | | | 3,794 | | | 3,646 | | | 346 | | | | 494 | Home equity | | 520 | | | 472 | | | 317 | | | 48 | | | | 203 | Total residential real estate loans | | 4,660 | | | 4,266 | | | 3,963 | | | 394 | | | | 697 | | | | | | | | | | | | | | | CONSUMER LOANS | | | | | | | | | | | | | | Indirect home improvement | | 4,421 | | | 4,799 | | | 3,802 | | | (378 | ) | | | 619 | Marine | | 540 | | | 606 | | | 620 | | | (66 | ) | | | (80 | ) Other consumer | | 15 | | | 19 | | | 40 | | | (4 | ) | | | (25 | ) Total consumer loans | | 4,976 | | | 5,424 | | | 4,462 | | | (448 | ) | | | 514 | | | | | | | | | | | | | | | COMMERCIAL BUSINESS LOANS | | | | | | | | | | | | | | C&I | | 3,469 | | | 3,889 | | | 3,963 | | | (420 | ) | | | (494 | ) Total classified loans | $ | 38,412 | | $ | 24,979 | | $ | 27,053 | | $ | 13,433 | | | $ | 11,359 | | | | | | | | | | | | | | | | | The increase in classified loans at September 30, 2026, compared to June 30, 2026, was primarily driven by $12.5 million of classified loans acquired as part of the Pacific West Acquisition. Operating Results Net interest income increased $2.0 million to $35.7 million for the three months ended September 30, 2026, from $33.7 million for the three months ended September 30, 2025. The increase was primarily a result of a $2.7 million increase in interest income on loans receivable, including interest income from loans acquired in the Pacific West Acquisition and the impact of net loan growth, partially offset by a $452,000 increase in total interest expense. The increase in total interest expense primarily reflected increases of $843,000 in interest expense on borrowings and $438,000 in interest expense on subordinated notes following their repricing at higher interest rates in 2026, partially offset by an $829,000 decrease in interest expense on deposits. The decrease in deposit interest expense reflected fluctuations in market interest rates and changes in the composition of deposits and borrowings, including the impact of balances acquired in the Pacific West Acquisition. For the nine months ended September 30, 2026, net interest income increased $4.1 million to $100.9 million, from $96.8 million for the nine months ended September 30, 2025, with a $6.0 million increase in total interest income, partially offset by a $1.9 million increase in total interest expense. The $6.0 million increase in total interest income was primarily due to an increase of $6.6 million in interest income on loans receivable, including fees, primarily attributable to loan growth and the Pacific West Acquisition. The $1.9 million increase in total interest expense was primarily due to a $1.1 million increase in interest expense on subordinated notes, as noted above, as well as a $576,000 increase in interest expense on borrowings, and a $214,000 increase in interest expense on deposits. Net interest margin ("NIM") (annualized) was 4.36% for the three months ended September 30, 2026, compared to 4.37% for the same period in the prior year and 4.30% for the three months ended June 30, 2026. The six basis point increase from the prior quarter was primarily attributable to lower funding costs, including lower rates on certificates of deposit as those deposits repriced and the addition of the slightly lower-cost funding base acquired in the Pacific West Acquisition, as well as improved yields on the Company's investment securities portfolio. Incremental interest accretion on loans acquired in the Pacific West Acquisition had an immaterial impact on NIM during the period. The average total cost of funds, including noninterest-bearing checking accounts, decreased nine basis points to 2.32% for the three months ended September 30, 2026, from 2.41% for the three months ended September 30, 2025. The decrease primarily reflected lower rates on certificates of deposit as those deposits repriced, as well as the addition of slightly lower-cost funding from the Pacific West Acquisition. The average cost of funds decreased two basis points to 2.37% for the nine months ended September 30, 2026, from 2.39% for the nine months ended September 30, 2025. For the three and nine months ended September 30, 2026, the provision for credit losses on loans was $3.0 million and $8.2 million, compared to $2.3 million and $5.9 million for the three and nine months ended September 30, 2025, respectively. The year-to-date increase in the provision primarily reflected an increase in net charge-offs of $649,000 and additional reserve activity related to a single nonperforming construction and development loan. During the three months ended September 30, 2026, net charge-offs decreased $2.4 million to $1.6 million, compared to $4.0 million for the three months ended September 30, 2025. The decrease was primarily attributable to a $2.3 million charge-off on a commercial construction loan relationship recognized during the three months ended September 30, 2025. During the nine months ended September 30, 2026, net charge-offs increased $649,000 to $7.5 million, compared to $6.9 million for the nine months ended September 30, 2025. The increase was primarily due to higher net charge-offs in the indirect home improvement portfolio. Total noninterest income increased $582,000 to $6.2 million for the three months ended September 30, 2026, from $5.6 million for the three months ended September 30, 2025. The increase was primarily due to the bargain purchase gain of $1.7 million from the Pacific West Acquisition, primarily offset by a decrease of $971,000 in gain on sale of loans, reflecting market interest rates putting pressure on home loan sales, and a decrease of $231,000 in other noninterest income. Total noninterest income remained relatively unchanged at $6.2 million for the three months ended September 30, 2026, compared to $6.2 million for the three months ended June 30, 2026, as the $1.7 million bargain purchase gain from the Pacific West Acquisition was largely offset by a $1.1 million decrease in gain on sale of loans, reflecting lower loan sale volume as higher mortgage rates reduced saleable production, and a $742,000 fair value decrease on first lien residential mortgage loans accounted for under the fair value option, primarily due to higher mortgage rates during the period. Total noninterest income increased $1.8 million to $17.7 million for the nine months ended September 30, 2026, from $15.9 million for the nine months ended September 30, 2025. This increase was mainly the result of a $1.7 million bargain purchase gain from the Pacific West Acquisition, and a $322,000 increase in gain on sale of loans. Total noninterest expense increased $6.9 million to $32.3 million for the three months ended September 30, 2026, compared to $25.4 million for the three months ended September 30, 2025. The $6.9 million increase was largely comprised of a $2.8 million increase in salaries and benefits, primarily reflecting an increase in full-time-equivalent employees resulting from the Pacific West Acquisition, as well as higher overall benefit costs, and $2.5 million in acquisition-related costs associated with the transaction, compared to no acquisition costs in the prior year. Total noninterest expense increased $6.2 million to $32.3 million for the three months ended September 30, 2026, from $26.1 million for the three months ended June 30, 2026. The increase primarily reflected a $2.0 million increase in acquisition-related costs, a $1.6 million increase in salaries and benefits expense relating to the increase in full-time-equivalent employees from the Pacific West Acquisition and higher overall benefit costs, a $1.9 million increase in operations expense, and a $426,000 increase in data processing expense. The increases in operations and data processing expenses reflected additional operating costs associated with the Pacific West Acquisition, while the increase in operations expense also reflected certain expense adjustments recognized in the prior quarter. Total noninterest expense increased $8.0 million to $83.9 million for the nine months ended September 30, 2026, from $75.9 million for the nine months ended September 30, 2025. This increase included a $4.6 million increase in salaries and benefits, a $3.2 million increase in acquisition costs, a $647,000 increase in occupancy, and a $573,000 increase in loan costs, partially offset by a $548,000 decrease in operations, primarily due to the same reasons mentioned above. Merger-related activity during the third quarter was primarily focused on transaction completion and integration planning associated with the Pacific West Acquisition, including legal and professional fees, change-in-control costs, investment banking fees, and initial system integration activities related to the planned fourth quarter 2026 core processing conversion. Acquisition-related expenses, as noted above, include these integration costs as well as costs incurred to complete and consolidate the operations of the two companies. Management anticipates that the majority of the remaining acquisition-related expenses, consisting primarily of system integration and core conversion costs, will be recognized during the fourth quarter of 2026. About FS Bancorp FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 32 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver, as well as various communities in Oregon. Forward-Looking Statements When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the "SEC"), other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "may," "believe," "will," "will likely result," "are expected to," "will continue," "anticipate," "is anticipated," "estimate," "project," "plans," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements, include, but are not limited to the following: adverse economic conditions in the Company's local market areas, other markets in which the Company has lending relationships, or other aspects of the Company's business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, recessionary pressures or slowing economic growth; credit risks of lending activities, including changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for credit losses; changes in interest rate levels and volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could adversely affect the Company's revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; inflationary pressures and related monetary and fiscal policy responses, and their impact on consumer and business behavior; geopolitical developments and international conflicts including but not limited to tensions or instability in Eastern Europe, the Middle East, South America, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets; global supply chains, commodity prices, or economic activity in specific industry sectors; the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; increased competitive pressures, including repricing and competitors' pricing initiatives, and their impact on the Company's market position, loan, and deposit products; adverse changes in the securities markets; the Company's ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company's ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including the Company's ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; environmental, social and governance matters; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events on our business; and other factors described in the Company's latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on the Company's website at www.fsbwa.com and on the SEC's website at www.sec.gov. Further, statements about the effects of the Company's acquisition of Pacific West, completed on August 19, 2026, on the Company's business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable, and in many cases, beyond the Company's control, including the following: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; the integration of the combined company, including the conversion of operating systems and the retention of key personnel and customers, might not proceed as planned or may be more difficult, time-consuming or costly than expected; merger-related and integration expenses may be greater than expected; preliminary estimates of the fair value of acquired assets and assumed liabilities may change during the measuring period, and acquired loans may experience higher credit losses than anticipated; and the combined company might not perform as well as expected. Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management's beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward‑looking statements, and undue reliance should not be placed on such statements. The Company does not undertake, and expressly disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) | | | | | | | | | | | | | Linked | | | Prior Year | Sepr 30, | | | Jun 30, | | | Sep 30, | | | Quarter | | | Quarter ASSETS | 2026 | | | 2026 | | | 2025 | | | % Change | | | % Change Cash and due from banks | $ | 29,022 | | | | $ | 12,835 | | | $ | 12,391 | | | | 126 | | | | | 134 | Interest-bearing deposits at other financial institutions | | 14,925 | | | | | 16,875 | | | | 48,889 | | | | (12 | ) | | | | (69 | ) Total cash and cash equivalents | | 43,947 | | | | | 29,710 | | | | 61,280 | | | | 48 | | | | | (28 | ) Securities available-for-sale, at fair value | | 342,185 | | | | | 269,460 | | | | 311,695 | | | | 27 | | | | | 10 | Securities held-to-maturity, net | | 37,734 | | | | | 34,845 | | | | 31,386 | | | | 8 | | | | | 20 | Loans held for sale, at fair value | | 22,820 | | | | | 30,548 | | | | 38,579 | | | | (25 | ) | | | | (41 | ) Loans receivable, net | | 3,008,129 | | | | | 2,628,992 | | | | 2,599,601 | | | | 14 | | | | | 16 | Accrued interest receivable | | 16,901 | | | | | 14,263 | | | | 15,122 | | | | 18 | | | | | 12 | Premises and equipment, net | | 49,148 | | | | | 43,455 | | | | 32,444 | | | | 13 | | | | | 51 | Long-lived assets held for sale | | 3,258 | | | | | 3,258 | | | | — | | | | — | | | | | 100 | Operating lease right-of-use | | 7,799 | | | | | 6,655 | | | | 6,832 | | | | 17 | | | | | 14 | Federal Home Loan Bank stock, at cost | | 13,073 | | | | | 14,420 | | | | 7,975 | | | | (9 | ) | | | | 64 | Deferred tax asset, net | | 9,469 | | | | | 6,441 | | | | 6,767 | | | | 47 | | | | | 40 | Bank owned life insurance ("BOLI"), net | | 41,857 | | | | | 36,771 | | | | 38,531 | | | | 14 | | | | | 9 | MSRs, held at the lower of cost or fair value | | 8,887 | | | | | 8,912 | | | | 8,506 | | | | — | | | | | 4 | Goodwill | | 3,592 | | | | | 3,592 | | | | 3,592 | | | | — | | | | | — | Core deposit intangible, net | | 13,525 | | | | | 9,052 | | | | 11,284 | | | | 49 | | | | | 20 | Other assets | | 54,327 | | | | | 38,706 | | | | 35,231 | | | | 40 | | | | | 54 | TOTAL ASSETS | $ | 3,676,651 | | | | $ | 3,179,080 | | | $ | 3,208,825 | | | | 16 | | | | | 15 | LIABILITIES | | | | | | | | | | | | | | | | | | Deposits: | | | | | | | | | | | | | | | | | | Noninterest-bearing accounts | $ | 758,691 | | | | $ | 641,856 | | | $ | 665,852 | | | | 18 | | | | | 14 | Interest-bearing accounts | | 2,108,513 | | | | | 1,807,026 | | | | 2,020,640 | | | | 17 | | | | | 4 | Total deposits | | 2,867,204 | | | | | 2,448,882 | | | | 2,686,492 | | | | 17 | | | | | 7 | Borrowings | | 373,500 | | | | | 324,500 | | | | 129,305 | | | | 15 | | | | | 189 | Subordinated notes: | | | | | | | | | | | | | | | | | | Principal amount | | 46,000 | | | | | 50,000 | | | | 50,000 | | | | (8 | ) | | | | (8 | ) Unamortized debt issuance costs | | (265 | ) | | | | (306 | ) | | | (356 | ) | | | (13 | ) | | | | (26 | ) Total subordinated notes less unamortized debt issuance costs | | 45,735 | | | | | 49,694 | | | | 49,644 | | | | (8 | ) | | | | (8 | ) Operating lease liability | | 7,899 | | | | | 6,753 | | | | 6,993 | | | | 17 | | | | | 13 | Other liabilities | | 49,107 | | | | | 30,291 | | | | 35,880 | | | | 62 | | | | | 37 | Total liabilities | | 3,343,445 | | | | | 2,860,120 | | | | 2,908,314 | | | | 17 | | | | | 15 | COMMITMENTS AND CONTINGENCIES | | | | | | | | | | | | | | | | | | STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding | | — | | | | | — | | | | — | | | | — | | | | | — | Common stock, $.01 par value; 45,000,000 shares authorized; 7,867,367 shares issued and outstanding at September 30, 2026, 7,423,772 at June 30, 2026, and 7,535,330 at September 30, 2025 | | 79 | | | | | 74 | | | | 75 | | | | 7 | | | | | 5 | Additional paid-in capital | | 57,702 | | | | | 40,886 | | | | 43,907 | | | | 41 | | | | | 31 | Retained earnings | | 294,408 | | | | | 291,635 | | | | 273,882 | | | | 1 | | | | | 7 | Accumulated other comprehensive loss, net of tax | | (18,983 | ) | | | | (13,635 | ) | | | (17,353 | ) | | | 39 | | | | | 9 | Total stockholders' equity | | 333,206 | | | | | 318,960 | | | | 300,511 | | | | 4 | | | | | 11 | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 3,676,651 | | | | $ | 3,179,080 | | | $ | 3,208,825 | | | | 16 | | | | | 15 | | | | | | | | | | | | | | | | | | | | | | FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) | Three Months Ended | | | Linked | | | Prior Year | Sep 30, | | | Jun 30, | | | Sep 30, | | | Quarter | | | Quarter INTEREST INCOME | 2026 | | | 2026 | | | 2025 | | | % Change | | | % Change Loans receivable, including fees | $ | 49,346 | | | | $ | 46,202 | | | $ | 46,664 | | | | | 7 | | | | | 6 | Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions | | 4,075 | | | | | 3,460 | | | | 4,309 | | | | | 18 | | | | | (5 | ) Total interest and dividend income | | 53,421 | | | | | 49,662 | | | | 50,973 | | | | | 8 | | | | | 5 | INTEREST EXPENSE | | | | | | | | | | | | | | | | | | Deposits | | 14,033 | | | | | 13,908 | | | | 14,862 | | | | | 1 | | | | | (6 | ) Borrowings | | 2,778 | | | | | 2,197 | | | | 1,935 | | | | | 26 | | | | | 44 | Subordinated notes | | 924 | | | | | 909 | | | | 486 | | | | | 2 | | | | | 90 | Total interest expense | | 17,735 | | | | | 17,014 | | | | 17,283 | | | | | 4 | | | | | 3 | NET INTEREST INCOME | | 35,686 | | | | | 32,648 | | | | 33,690 | | | | | 9 | | | | | 6 | PROVISION FOR CREDIT LOSSES | | 3,462 | | | | | 2,641 | | | | 2,309 | | | | | 31 | | | | | 50 | NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | 32,224 | | | | | 30,007 | | | | 31,381 | | | | | 7 | | | | | 3 | NONINTEREST INCOME | | | | | | | | | | | | | | | | | | Service charges and fee income | | 2,424 | | | | | 2,281 | | | | 2,326 | | | | | 6 | | | | | 4 | Bargain purchase gain | | 1,658 | | | | | — | | | | — | | | | | NM | | | | | NM | Gain on sale of loans | | 1,468 | | | | | 2,581 | | | | 2,439 | | | | | (43 | ) | | | | (40 | ) Gain on sale of investment securities, net | | 11 | | | | | — | | | | — | | | | | NM | | | | | NM | Earnings on cash surrender value of BOLI | | 286 | | | | | 263 | | | | 269 | | | | | 9 | | | | | 6 | Other noninterest income | | 329 | | | | | 1,025 | | | | 560 | | | | | (68 | ) | | | | (41 | ) Total noninterest income | | 6,176 | | | | | 6,150 | | | | 5,594 | | | | | — | | | | | 10 | NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | Salaries and benefits | | 17,178 | | | | | 15,570 | | | | 14,415 | | | | | 10 | | | | | 19 | Operations | | 4,616 | | | | | 2,699 | | | | 3,974 | | | | | 71 | | | | | 16 | Occupancy | | 2,073 | | | | | 1,938 | | | | 1,744 | | | | | 7 | | | | | 19 | Data processing | | 2,252 | | | | | 1,826 | | | | 1,784 | | | | | 23 | | | | | 26 | Loan costs | | 803 | | | | | 900 | | | | 746 | | | | | (11 | ) | | | | 8 | Professional and board fees | | 1,067 | | | | | 1,060 | | | | 1,093 | | | | | 1 | | | | | (2 | ) FDIC insurance | | 630 | | | | | 531 | | | | 592 | | | | | 19 | | | | | 6 | Marketing and advertising | | 449 | | | | | 445 | | | | 259 | | | | | 1 | | | | | 73 | Acquisition costs | | 2,463 | | | | | 417 | | | | — | | | | | 491 | | | | | NM | Amortization of core deposit intangible | | 788 | | | | | 722 | | | | 787 | | | | | 9 | | | | | — | Recovery of servicing rights | | (5 | ) | | | | (4 | ) | | | (6 | ) | | | | 25 | | | | | (17 | ) Total noninterest expense | | 32,314 | | | | | 26,104 | | | | 25,388 | | | | | 24 | | | | | 27 | INCOME BEFORE PROVISION FOR INCOME TAXES | | 6,086 | | | | | 10,053 | | | | 11,587 | | | | | (39 | ) | | | | (47 | ) PROVISION FOR INCOME TAXES | | 1,160 | | | | | 2,117 | | | | 2,410 | | | | | (45 | ) | | | | (52 | ) NET INCOME | $ | 4,926 | | | | $ | 7,936 | | | $ | 9,177 | | | | | (38 | ) | | | | (46 | ) Basic earnings per share | $ | 0.65 | | | | $ | 1.06 | | | $ | 1.20 | | | | | (39 | ) | | | | (46 | ) Diluted earnings per share | $ | 0.63 | | | | $ | 1.04 | | | $ | 1.18 | | | | | (39 | ) | | | | (47 | ) | | | | | | | | | | | | | | | | | | | | | | FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) | | | | | | | | | | | | | | | | | | Year | Nine Months Ended September 30, | | | Over Year INTEREST INCOME | 2026 | | | 2025 | | | % Change Loans receivable, including fees | $ | 141,560 | | | | $ | 135,004 | | | | 5 | Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions | | 10,856 | | | | | 11,459 | | | | (5 | ) Total interest and dividend income | | 152,416 | | | | | 146,463 | | | | 4 | INTEREST EXPENSE | | | | | | | | | | Deposits | | 42,654 | | | | | 42,440 | | | | 1 | Borrowings | | 6,359 | | | | | 5,783 | | | | 10 | Subordinated notes | | 2,524 | | | | | 1,456 | | | | 73 | Total interest expense | | 51,537 | | | | | 49,679 | | | | 4 | NET INTEREST INCOME | | 100,879 | | | | | 96,784 | | | | 4 | PROVISION FOR CREDIT LOSSES | | 8,632 | | | | | 5,922 | | | | 46 | NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | | 92,247 | | | | | 90,862 | | | | 2 | NONINTEREST INCOME | | | | | | | | | | Service charges and fee income | | 6,778 | | | | | 6,894 | | | | (2 | ) Bargain purchase gain | | 1,658 | | | | | — | | | | NM | Gain on sale of loans | | 6,433 | | | | | 6,111 | | | | 5 | Gain on sale of investment securities, net | | 11 | | | | | — | | | | NM | Earnings on cash surrender value of BOLI | | 808 | | | | | 773 | | | | 5 | Other noninterest income | | 2,039 | | | | | 2,112 | | | | (3 | ) Total noninterest income | | 17,727 | | | | | 15,890 | | | | 12 | NONINTEREST EXPENSE | | | | | | | | | | Salaries and benefits | | 47,602 | | | | | 43,037 | | | | 11 | Operations | | 10,695 | | | | | 11,243 | | | | (5 | ) Occupancy | | 5,887 | | | | | 5,240 | | | | 12 | Data processing | | 5,672 | | | | | 5,966 | | | | (5 | ) Loan costs | | 2,585 | | | | | 2,012 | | | | 28 | Professional and board fees | | 3,141 | | | | | 3,435 | | | | (9 | ) FDIC insurance | | 1,788 | | | | | 1,684 | | | | 6 | Marketing and advertising | | 1,203 | | | | | 879 | | | | 37 | Acquisition costs | | 3,175 | | | | | — | | | | NM | Amortization of core deposit intangible | | 2,254 | | | | | 2,426 | | | | (7 | ) (Recovery) impairment of MSRs | | (64 | ) | | | | 23 | | | | (378 | ) Total noninterest expense | | 83,938 | | | | | 75,945 | | | | 11 | INCOME BEFORE PROVISION FOR INCOME TAXES | | 26,036 | | | | | 30,807 | | | | (15 | ) PROVISION FOR INCOME TAXES | | 5,344 | | | | | 5,881 | | | | (9 | ) NET INCOME | $ | 20,692 | | | | $ | 24,926 | | | | (17 | ) Basic earnings per share | $ | 2.67 | | | | $ | 3.23 | | | | (17 | ) Diluted earnings per share | $ | 2.62 | | | | $ | 3.18 | | | | (18 | ) | | | | | | | | | | | | KEY FINANCIAL RATIOS AND DATA (Unaudited) | For the Three Months Ended | | September 30, | | | June 30, | | | September 30, | PERFORMANCE RATIOS: | 2026 | | | 2026 | | | 2025 | Return on assets (ratio of net income to average total assets) (1) | | 0.57 | % | | | 1.00 | % | | | 1.14 | % Return on equity (ratio of net income to average total stockholders' equity) (1) | | 5.85 | | | | 9.94 | | | | 11.97 | Yield on average interest-earning assets (1) | | 6.52 | | | | 6.54 | | | | 6.61 | Average total cost of funds (1) | | 2.32 | | | | 2.41 | | | | 2.41 | Interest rate spread information – average during period | | 4.20 | | | | 4.13 | | | | 4.20 | Net interest margin (1) | | 4.36 | | | | 4.30 | | | | 4.37 | Operating expense to average total assets (1) | | 3.77 | | | | 3.29 | | | | 3.16 | Average interest-earning assets to average interest-bearing liabilities | | 139.79 | | | | 139.32 | | | | 140.80 | Efficiency ratio (2) | | 77.19 | | | | 67.28 | | | | 64.63 | Common equity ratio (ratio of stockholders' equity to total assets) | | 9.06 | | | | 10.03 | | | | 9.37 | Tangible common equity ratio (3) | | 8.64 | | | | 9.67 | | | | 8.94 | | | | | | | | | | | | | For the Nine Months Ended | | September 30, | | | September 30, | PERFORMANCE RATIOS: | 2026 | | | 2025 | Return on assets (ratio of net income to average total assets) (1) | | 0.85 | % | | | 1.07 | % Return on equity (ratio of net income to average total stockholders' equity) (1) | | 8.55 | | | | 11.03 | Yield on average interest-earning assets (1) | | 6.53 | | | | 6.55 | Average total cost of funds (1) | | 2.37 | | | | 2.39 | Interest rate spread information – average during period | | 4.16 | | | | 4.16 | Net interest margin (1) | | 4.32 | | | | 4.33 | Operating expense to average total assets (1) | | 3.44 | | | | 3.26 | Average interest-earning assets to average interest-bearing liabilities | | 139.66 | | | | 141.54 | Efficiency ratio (2) | | 70.77 | | | | 67.40 | | | | | | | | | September 30, | | | June 30, | | | September 30, | ASSET QUALITY RATIOS AND DATA: | 2026 | | | 2026 | | | 2025 | Nonperforming assets to total assets at end of period (4) | | 0.68 | % | | | 0.49 | % | | | 0.57 | % Nonperforming loans to total gross loans (excluding loans HFS) (5) | | 0.83 | | | | 0.59 | | | | 0.70 | ACL – loans to nonperforming loans (5) | | 145.03 | | | | 199.15 | | | | 163.77 | ACL – loans to total gross loans (excluding loans HFS) | | 1.20 | | | | 1.17 | | | | 1.14 | | | | | | | | | | | | | At or For the Three Months Ended | | | Sep 30, | | | | Jun 30, | | | | Sep 30, | | PER COMMON SHARE DATA: | 2026 | | | | 2026 | | | | 2025 | | Basic earnings per share | $ | 0.65 | | | | $ | 1.06 | | | | $ | 1.20 | | Diluted earnings per share | $ | 0.63 | | | | $ | 1.04 | | | | $ | 1.18 | | Weighted average basic shares outstanding | | 7,524,107 | | | | | 7,340,326 | | | | | 7,488,139 | | Weighted average diluted shares outstanding | | 7,677,572 | | | | | 7,483,199 | | | | | 7,623,243 | | Common shares outstanding at end of period | | 7,739,797 | | (6) | | | 7,320,801 | | (7) | | | 7,432,359 | | (8) Book value per share using common shares outstanding | $ | 43.05 | | | | $ | 43.57 | | | | $ | 40.43 | | Tangible book value per share using common shares outstanding (9) | $ | 40.84 | | | | $ | 41.84 | | | | $ | 38.43 | | | | | | | | | | | | | | | | (1) | | Annualized. (2) | | Total noninterest expense as a percentage of net interest income and total noninterest income. (3) | | Represents a non-GAAP financial measure. For a reconciliation to the most comparable GAAP financial measure, see "Non-GAAP Financial Measures" below. (4) | | Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), foreclosed real estate and other repossessed assets. (5) | | Nonperforming loans consist of nonaccruing loans and accruing loans 90 days or more past due. (6) | | Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares. (7) | | Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. (8) | | Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares. (9) | | Tangible book value per share using outstanding common shares excludes intangible assets. This ratio represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" below. | | (Dollars in thousands) | For the Three Months Ended September 30, | | | For the Nine Months Ended September 30, | | | QTR Over QTR | | | YTD Over YTD Average Balances | 2026 | | | 2025 | | | 2026 | | | 2025 | | | $ Change | | | $ Change Assets | | | | | | | | | | | | | | | | | | | | | | Loans receivable, net (1) | $ | 2,864,219 | | | $ | 2,651,111 | | | $ | 2,754,304 | | | $ | 2,608,338 | | | $ | 213,108 | | | | $ | 145,966 | Investment securities - taxable | | 277,518 | | | | 285,111 | | | | 259,243 | | | | 267,657 | | | | (7,593 | ) | | | | (8,414 | ) Investment securities - nontaxable | | 76,796 | | | | 79,341 | | | | 77,462 | | | | 78,386 | | | | (2,545 | ) | | | | (924 | ) Interest-bearing deposits and certificates of deposit at other financial institutions | | 14,954 | | | | 34,857 | | | | 17,251 | | | | 23,575 | | | | (19,903 | ) | | | | (6,324 | ) FHLB stock, at cost | | 14,321 | | | | 10,082 | | | | 11,257 | | | | 10,262 | | | | 4,239 | | | | | 995 | Total interest-earning assets | | 3,247,808 | | | | 3,060,502 | | | | 3,119,517 | | | | 2,988,218 | | | | 187,306 | | | | | 131,299 | Noninterest-earning assets | | 155,992 | | | | 124,955 | | | | 143,119 | | | | 123,785 | | | | 31,037 | | | | | 19,334 | Total assets | $ | 3,403,800 | | | $ | 3,185,457 | | | $ | 3,262,636 | | | $ | 3,112,003 | | | $ | 218,343 | | | | $ | 150,633 | Liabilities | | | | | | | | | | | | | | | | | | | | | | Interest-bearing deposit accounts | $ | 1,992,076 | | | $ | 1,947,830 | | | $ | 1,970,700 | | | $ | 1,880,007 | | | $ | 44,246 | | | | $ | 90,693 | Borrowings | | 283,054 | | | | 176,234 | | | | 213,712 | | | | 181,633 | | | | 106,820 | | | | | 32,079 | Subordinated notes | | 48,230 | | | | 49,633 | | | | 49,188 | | | | 49,617 | | | | (1,403 | ) | | | | (429 | ) Total interest-bearing liabilities | | 2,323,360 | | | | 2,173,697 | | | | 2,233,600 | | | | 2,111,257 | | | | 149,663 | | | | | 122,343 | Noninterest-bearing deposit accounts | | 707,196 | | | | 668,908 | | | | 670,230 | | | | 663,536 | | | | 38,288 | | | | | 6,694 | Other noninterest-bearing liabilities | | 39,239 | | | | 38,746 | | | | 35,051 | | | | 35,081 | | | | 493 | | | | | (30 | ) Total liabilities | $ | 3,069,795 | | | $ | 2,881,351 | | | $ | 2,938,881 | | | $ | 2,809,874 | | | $ | 188,444 | | | | $ | 129,007 | | | | | | | | | | | | | | | | | | | | | | | | | ___________ (1) Includes loans HFS. Non-GAAP Financial Measures: In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP"), this earnings release presents non-GAAP financial measures that include tangible book value per share, and tangible common equity ratio. Management believes that providing the Company's tangible book value per share and tangible common equity ratio provides useful supplemental information regarding the Company's capital position and facilitates comparisons of the quality and composition of the Company's capital over time and with that of its peers. Where applicable, the Company has also presented comparable GAAP information. These non-GAAP financial measures have inherent limitations, may not be calculated in the same manner by other companies, and should not be considered in isolation or as a substitute for the Company's financial position, results of operations or other financial measures determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliation of the GAAP book value per share and common equity ratio to the non-GAAP tangible book value per share and tangible common equity ratio is presented below. (Dollars in thousands, except share and per share amounts) | September 30, | | June 30, | | September 30, | Tangible Book Value Per Share: | 2026 | | 2026 | | 2025 | Stockholders' equity (GAAP) | $ | 333,206 | | | $ | 318,960 | | | $ | 300,511 | | Less: goodwill and core deposit intangible, net | | (17,117 | ) | | | (12,644 | ) | | | (14,876 | ) | Tangible common stockholders' equity (non-GAAP) | $ | 316,089 | | | $ | 306,316 | | | $ | 285,635 | | | | | | | | | | | Common shares outstanding at end of period | | 7,739,797 | | (1) | | 7,320,801 | | (2) | | 7,432,359 | | (3) | | | | | | | | | Book value per share (GAAP) | $ | 43.05 | | | $ | 43.57 | | | $ | 40.43 | | Tangible book value per share (non-GAAP) | $ | 40.84 | | | $ | 41.84 | | | $ | 38.43 | | | | | | | | | | | Tangible Common Equity Ratio: | | | | | | | | | Total assets (GAAP) | $ | 3,676,651 | | | $ | 3,179,080 | | | $ | 3,208,825 | | Less: goodwill and core deposit intangible assets | | (17,117 | ) | | | (12,644 | ) | | | (14,876 | ) | Tangible assets (non-GAAP) | $ | 3,659,534 | | | $ | 3,166,436 | | | $ | 3,193,949 | | | | | | | | | | | Common equity ratio (GAAP) | | 9.06 | | % | | 10.03 | | % | | 9.37 | | % Tangible common equity ratio (non-GAAP) | | 8.64 | | | | 9.67 | | | | 8.94 | | | | | | | | | | | | | | _________________________ (1) | | Common shares were calculated using shares outstanding of 7,867,367 at September 30, 2026, less 127,570 unvested restricted stock shares. (2) | | Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares. (3) | | Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares. | | Contacts: Matthew D. Mullet, President and Chief Executive Officer Phillip D. Whittington, Chief Financial Officer (425) 771-5299 www.FSBWA.com

FS Bancorp (FSBW) came out with quarterly earnings of $0.63 per share, missing the Zacks Consensus Estimate of $1.11 per share. This compares to earnings of $1.18 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -43.24%. A quarter ago, it was expected that this bank holding company would post earnings of $1.13 per share when it actually produced earnings of $1.08, delivering a surprise of -4.42%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. FS Bancorp, which belongs to the Zacks Banks - West industry, posted revenues of $41.86 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 2.17%. This compares to year-ago revenues of $39.28 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. FS Bancorp shares have added about 8.9% since the beginning of the year versus the S&P 500's gain of 12.7%. While FS Bancorp has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for FS Bancorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.08 on $42.26 million in revenues for the coming quarter and $4.34 on $159.98 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Glacier Bancorp (GBCI), is yet to report results for the quarter ended September 2026. The results are expected to be released on October 22. This bank holding company is expected to post quarterly earnings of $0.79 per share in its upcoming report, which represents a year-over-year change of +27.4%. The consensus EPS estimate for the quarter has been revised 1.2% lower over the last 30 days to the current level. Glacier Bancorp's revenues are expected to be $327.98 million, up 25.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FS Bancorp, Inc. (FSBW) : Free Stock Analysis Report Glacier Bancorp, Inc. (GBCI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year increase in earnings on higher revenues when Plumas Bancorp (PLBC) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This company is expected to post quarterly earnings of $1.47 per share in its upcoming report, which represents a year-over-year change of +8.9%. Revenues are expected to be $29.03 million, up 5.9% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 4.11% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Plumas Bancorp, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.36%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Plumas Bancorp will beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Plumas Bancorp would post earnings of $1.37 per share when it actually produced earnings of $1.41, delivering a surprise of +2.92%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Plumas Bancorp doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. FS Bancorp (FSBW), another stock in the Zacks Banks - West industry, is expected to report earnings per share of $1.11 for the quarter ended September 2026. This estimate points to a year-over-year change of -5.9%. Revenues for the quarter are expected to be $41.06 million, up 4.5% from the year-ago quarter. The consensus EPS estimate for FS Bancorp has been revised 1.2% higher over the last 30 days to the current level. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -3.32%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that FS Bancorp will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Plumas Bancorp (PLBC) : Free Stock Analysis Report FS Bancorp, Inc. (FSBW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

FS Bancorp (FSBW) came out with quarterly earnings of $1.08 per share, missing the Zacks Consensus Estimate of $1.13 per share. This compares to earnings of $0.99 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -4.43%. A quarter ago, it was expected that this bank holding company would post earnings of $1.01 per share when it actually produced earnings of $1.02, delivering a surprise of +0.99%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. FS Bancorp, which belongs to the Zacks Banks - West industry, posted revenues of $38.8 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.51%. This compares to year-ago revenues of $37.28 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. FS Bancorp shares have added about 4.5% since the beginning of the year versus the S&P 500's gain of 8.7%. While FS Bancorp has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for FS Bancorp was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.24 on $41.65 million in revenues for the coming quarter and $4.64 on $161.5 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Avidbank Holdings Inc. (AVBH), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on July 23. This company is expected to post quarterly earnings of $0.83 per share in its upcoming report, which represents a year-over-year change of +10.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Avidbank Holdings Inc.'s revenues are expected to be $28.35 million, up 29.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FS Bancorp, Inc. (FSBW) : Free Stock Analysis Report Avidbank Holdings Inc. (AVBH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Hanmi Financial (HAFC) came out with quarterly earnings of $0.79 per share, beating the Zacks Consensus Estimate of $0.77 per share. This compares to earnings of $0.5 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.60%. A quarter ago, it was expected that this bank holding company would post earnings of $0.71 per share when it actually produced earnings of $0.75, delivering a surprise of +5.63%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Hanmi Financial, which belongs to the Zacks Banks - West industry, posted revenues of $72.21 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 2.49%. This compares to year-ago revenues of $65.21 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Hanmi Financial shares have added about 19.1% since the beginning of the year versus the S&P 500's gain of 8.7%. While Hanmi Financial has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Hanmi Financial was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.81 on $75.7 million in revenues for the coming quarter and $3.16 on $298.25 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - West is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, FS Bancorp (FSBW), is yet to report results for the quarter ended June 2026. This bank holding company is expected to post quarterly earnings of $1.13 per share in its upcoming report, which represents a year-over-year change of +14.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. FS Bancorp's revenues are expected to be $38.6 million, up 3.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hanmi Financial Corporation (HAFC) : Free Stock Analysis Report FS Bancorp, Inc. (FSBW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MOUNTLAKE TERRACE, Wash., July 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2026 second quarter net income of $7.9 million, or $1.04 per diluted share, compared to $7.8 million, or $1.02 per diluted share, for the prior quarter, and $7.7 million, or $0.99 per diluted share, for the comparable quarter one year ago. For the six months ended June 30, 2026, net income was $15.8 million, or $2.07 per diluted share, compared to net income of $15.7 million, or $1.99 per diluted share, for the comparable six-month period in 2025. “From the announcement of our proposed merger with Pacific West Bank in the first quarter of 2026, our teams have been diligently working toward a successful integration, while concurrently contributing to our financial success this quarter,” stated Matthew Mullet, President and CEO of FS Bancorp, Inc. “We are also pleased to announce that our Board of Directors has approved our 54th consecutive quarterly cash dividend of $0.29 per common share, demonstrating our commitment to returning capital to long-term shareholders. The cash dividend will be paid on August 21, 2026, to shareholders of record as of August 7, 2026,” concluded Mullet. 2026 Second Quarter Highlights Net income totaled $7.9 million for the second quarter of 2026, compared to $7.8 million for the previous quarter, and $7.7 million for the comparable quarter one year ago; Total deposits decreased $188.7 million, or 7.2%, to $2.45 billion at June 30, 2026, compared to $2.63 billion at March 31, 2026. This decrease was primarily due to a $201.1 million decrease in brokered deposits, with an offsetting increase of $12.1 million in retail deposits. Compared to June 30, 2025, total deposits decreased $104.5 million, or 4.1%. The cost of deposits decreased to 2.18% for the quarter ended June 30, 2026, from 2.24% for the quarter ended March 31, 2026, primarily due to the Company's funding strategy of shifting from higher cost brokered deposits to borrowings, while maintaining sufficient liquidity; Loans receivable, net increased $4.9 million, to $2.63 billion at June 30, 2026, compared to $2.62 billion at March 31, 2026, and increased $46.7 million, from $2.58 billion at June 30, 2025. The year-over-year loan growth was primarily due to an increase of $88.9 million in the commercial real estate portfolio, partially offset by heightened payoff activity in the consumer loan portfolio which decreased $33.1 million during the same period; Consumer loans were $573.2 million at June 30, 2026, a decrease of $10.3 million, or 1.8%, from $583.5 million in the previous quarter, and a decrease of $33.1 million, or 5.5%, from $606.3 million in the comparable quarter one year ago. During the three months ended June 30, 2026, consumer loan originations included 87.3% of indirect home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720; The Commercial and Consumer Banking segment reported net income of $6.8 million for the second quarter of 2026, compared to $6.7 million for the prior quarter and $7.4 million for the second quarter of 2025.  The Home Lending segment reported net income of $1.1 million for both the first and second quarters of 2026, compared to $352,000 for the second quarter of 2025; Repurchased 87,000 shares of the Company's common stock for $3.6 million in the second quarter of 2026, at an average price of $41.81 per share; Book value per share increased $1.15, or 2.7%, to $43.57 at June 30, 2026, compared to $42.42 at March 31, 2026, and increased $4.02, or 10.2%, from $39.55 at June 30, 2025. Tangible book value per share (non-GAAP financial measure) increased $1.23 to $41.84 at June 30, 2026, compared to $40.61 at March 31, 2026, and increased $4.38 from $37.46 at June 30, 2025. See, “Non-GAAP Financial Measures;” and Regulatory capital ratios at the Bank were 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital at June 30, 2026, compared to 13.8% for total risk-based capital and 11.2% for Tier 1 leverage capital at March 31, 2026. The Bank remained well capitalized under applicable regulatory capital standards. Segment Reporting The Company operates through two reportable segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment also manages the Bank's investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment. The tables below provide a summary of segment reporting at or for the three and six months ended June 30, 2026 and 2025 (dollars in thousands): ________________________ Asset Summary The following table summarizes the composition of total assets and changes from the linked quarter and prior-year period. The following table includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate: The composition of CRE loans at the dates indicated were as follows: The composition of construction loans at the dates indicated were as follows: Originations of one-to-four-family loans to purchase and refinance a home for the periods indicated were as follows: During the quarter ended June 30, 2026, the Company sold $156.1 million of one-to-four-family loans compared to $154.7 million during the previous quarter and $127.1 million during the same quarter one year ago. Gross margins on home loan sales decreased to 2.98% for the quarter ended June 30, 2026, compared to 3.03% in the previous quarter and decreased from 3.06% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs. Liabilities and Equity Summary The following table summarizes the components and changes in deposits, borrowings, equity, and book value per common share at the dates indicated. _____________ Brokered deposits declined from the prior quarter, partially offset by increased borrowings, which offered a slightly lower cost of funds. In the table above, the linked quarter increase in stockholders’ equity at June 30, 2026, compared to March 31, 2026, was primarily due to net income of $7.9 million. Changes in the fair value of available‑for‑sale securities and interest rate swap cash flow hedges increased accumulated other comprehensive income (“AOCI”) by $2.1 million, net of tax. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in stockholders’ equity was partially offset by share repurchases of $3.6 million and cash dividends paid of $2.2 million. The Bank is considered “well capitalized” under the capital requirement established by the Federal Deposit Insurance Corporation (“FDIC”) and the Company exceeded all regulatory capital requirements. At June 30, 2026, capital ratios presented for the Bank and the Company were as follows: Credit Quality The following tables summarize changes in the ACL on loans for the periods indicated and the balances of nonperforming and classified loans at the dates indicated. The decrease in nonperforming loans at June 30, 2026, compared to June 30, 2025, was primarily attributable to a $2.3 million charge-off on a commercial construction loan and a single payoff within the commercial real estate portfolio. The charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market. Operating Results Net interest income increased $536,000 to $32.6 million for the three months ended June 30, 2026, from $32.1 million for the three months ended June 30, 2025, primarily due to an increase in total interest income of $959,000, partially offset by an increase in total interest expense of $423,000. The $536,000 increase in net interest income was primarily due to an increase of $1.2 million in interest income on loans receivable, including fees, resulting from net loan growth. The $423,000 increase in total interest expense reflected a $612,000 increase in interest expense on borrowings resulting from higher average borrowing balances and a $423,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $612,000 decrease in interest expense on deposits. For the six months ended June 30, 2026, net interest income increased $2.1 million to $65.2 million, from $63.1 million for the six months ended June 30, 2025, with a $3.5 million increase in total interest income, partially offset by a $1.4 million increase in interest expense.  The $3.5 million increase in total interest income was primarily due to an increase of $3.9 million in interest income on loans receivable, including fees, resulting from net loan growth.  The $1.4 million increase in total interest expense was primarily due to a $1.0 million increase in interest expense on deposits, reflecting higher average deposit balances and funding costs during the period, and a $629,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $267,000 decrease in interest expense on borrowings. Net interest margin (“NIM”) (annualized) was unchanged at 4.30% for the three months ended June 30, 2026, compared to the same period in the prior year and decreased one basis point from 4.31% to 4.30% for the six months ended June 30, 2026, compared to the same period in 2025. Net interest margin remained relatively stable during both periods as modest increases in earning asset yields were largely offset by corresponding increases in funding costs. The average total cost of funds, including noninterest-bearing checking, increased two basis points to 2.41% for the three months ended June 30, 2026, from 2.39% for the three months ended June 30, 2025. This increase primarily reflected the repricing of the subordinated note together with changes in the Company's funding mix during the period, partially offset by lower rates on certificates of deposit as those deposits repriced. The average cost of funds increased two basis points to 2.40% for the six months ended June 30, 2026, from 2.38% for the six months ended June 30, 2025, primarily for the same reason noted above. For the three and six months ended June 30, 2026, the provision for credit losses on loans was $2.6 million and $5.2 million, compared to $2.0 million and $3.6 million for the three and six months ended June 30, 2025. The year-to-date provision for credit losses on loans reflects a $3.1 million increase in net charge-off activity, primarily due to a $2.3 million partial charge-off on a single commercial construction loan as well as increased charge-offs in the consumer loan portfolio. The commercial construction loan had been partially reserved for in prior periods. During the three months ended  June 30, 2026, total net charge-offs increased $2.7 million to $3.8 million, compared to $1.2 million for the three months ended June 30, 2025. The increase was primarily attributable to an additional charge-off on a commercial construction loan relationship that was previously partially charged off in 2024, as well as higher net charge-offs within the indirect home improvement portfolio. The additional charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market. Following the additional charge-off, management believes the remaining carrying value appropriately reflects current collateral values. Management expects final resolution of the relationship during the second half of 2026. The increase in indirect home improvement loan net charge-offs primarily reflects elevated delinquency levels within portions of the portfolio. During the six months ended June 30, 2026, net charge-offs increased $3.1 million to $6.0 million, compared to $2.9 million for the six months ended June 30, 2025. The increase was primarily due to higher net charge-offs within the indirect home improvement portfolio and the additional charge-off on the commercial construction loan relationship discussed above. Total noninterest income increased $980,000 to $6.2 million for the three months ended June 30, 2026, from $5.2 million for the three months ended June 30, 2025. The increase primarily reflected higher gain on sale of loans of $609,000 and a $404,000 increase in other noninterest income, partially offset by a $42,000 decrease in service charges and fee income. Total noninterest income increased $1.3 million to $11.6 million for the six months ended June 30, 2026, from $10.3 million for the six months ended June 30, 2025. This increase was the result of a $1.3 million increase in gain on sale of loans and a $158,000 increase in other noninterest income, partially offset by a $213,000 decrease in service charges and fee income. Total noninterest expense increased $602,000 to $26.1 million for the three months ended June 30, 2026, compared to $25.5 million for the three months ended June 30, 2025. The $602,000 increase was primarily attributable to a $1.5 million increase in salaries and benefits expense resulting from annual compensation adjustments implemented during the second quarter as part of the Company's annual focal review process, as well as higher benefit costs. In addition, the Company recorded $417,000 of acquisition-related costs associated with the previously announced merger with Pacific West Bancorp (“Pacific West”), which remains subject to customary closing conditions, including shareholder and regulatory approvals.  These increases were partially offset by a $1.1 million reduction in operations expense, primarily due to an approximately $800,000 decrease in the mortgage repurchase reserve. The reduction reflects the continued seasoning of loans originated during the high-volume production years of 2020 and 2021, which reduced expected future repurchase losses. Total noninterest expense increased $1.1 million to $51.6 million for the six months ended June 30, 2026, from $50.6 million for the six months ended June 30, 2025. This increase included a $1.8 million increase in salaries and benefits, a $712,000 increase in acquisition costs, and a $515,000 increase in loan costs, partially offset by a $1.2 million decrease in operations, primarily due to the same reason mentioned above. About FS Bancorp FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 27 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver. Forward-Looking Statements When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements, include, but are not limited to the following: adverse economic conditions in the Company’s local market areas, other markets in which the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, recessionary pressures or slowing economic growth; changes in interest rate levels and volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could adversely affect the Company's revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; inflationary pressures and related monetary and fiscal policy responses, and their impact on consumer and business behavior; geopolitical developments and international conflicts including but not limited to tensions or instability in Eastern Europe, the Middle East, South America, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors; the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; increased competitive pressures, including repricing and competitors' pricing initiatives, and their impact on the Company's market position, loan, and deposit products; adverse changes in the securities markets, the Company’s ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company’s ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including the Company's ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; vulnerabilities  in information systems or third-party service providers, including disruptions, breaches, or attacks; environmental, social and governance matters; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on the Company's website at www.fsbwa.com and on the SEC's website at www.sec.gov. Further, statements about the potential effects of the Company's proposed merger with Pacific West on the Company's business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factor and future developments which are uncertain, unpredictable, and in many cases, beyond the Company's control, including the following: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; governmental approval of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; conditions to the closing of the merger may not be satisfied; the shareholders of Pacific West may fail to approve the consummation of the merger; the integration of the combined company, including the retention of key personnel, might not proceed as planned; and the combined company might not perform as well as expected. Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management's beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward‑looking statements, and undue reliance should not be placed on such statements. The Company does not undertake, and expressly disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. KEY FINANCIAL RATIOS AND DATA (Unaudited) __________ ____________ (1) Includes loans HFS. Non-GAAP Financial Measures: In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States (“GAAP”), this earnings release presents non-GAAP financial measures that include tangible book value per share, and tangible common equity ratio. Management believes that providing the Company’s tangible book value per share and tangible common equity ratio is consistent with the capital treatment utilized by the investment community, which excludes intangible assets from the calculation of risk-based capital ratios and facilitates comparison of the quality and composition of the Company's capital over time and to its competitors. Where applicable, the Company has also presented comparable GAAP information. These non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited. They should not be considered in isolation or as a substitute for total stockholders' equity or operating results determined in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliation of the GAAP book value per share and common equity ratio and the non-GAAP tangible book value per share and tangible common equity ratio is presented below. _____________________________ Additional Information About the Merger and Where to Find It This press release does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval with respect to the proposed transaction with Pacific West.  No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. In connection with the proposed merger, a registration statement on Form S-4 has been filed with the SEC which includes a proxy statement of Pacific West and a prospectus of the Company, which will be distributed to the shareholders of Pacific West in connection with the vote of Pacific West's shareholders on the merger of Pacific West with and into the Company and the issuance of Company common stock in the proposed transaction.  INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT/PROSPECTUS CONTAINED THEREIN, AS WELL AS ANY AMENDMENTS THERETO, AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER AND RELATED MATTERS. Investors and security holders may obtain free copies of the registration statement on Form S-4, including the proxy statement/prospectus, contained therein, as well as any amendments thereto, and the definitive proxy statement/prospectus, and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov.  These documents may also be obtained free of charge by accessing the Company’s website at www.fsbwa.com under the tab “Investor Relations” and then under “SEC Filings.”  Alternatively, copies of these documents may be obtained free of charge by (1) writing to FS Bancorp, Inc at 6920 220th Street SW, Mountlake Terrace, Washington 98043, Attn: Investor Relations or (2) by calling (425) 771-5299. Participants in the Solicitation The Company, Pacific West and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific West in connection with the proposed transaction.  Information about the Company's directors and executive officers is included in the proxy statement for its 2026 annual meeting of the Company’s shareholders, which was filed with the SEC on April 6, 2026.  Information about Pacific West’s participants and additional information regarding the interests of these participants is included in the proxy statement/prospectus regarding the proposed transaction when it becomes available.  Free copies of this document may be obtained as described above. Contacts:Matthew D. Mullet,President and Chief Executive OfficerPhillip D. Whittington,Chief Financial Officer (425) 771-5299www.FSBWA.com