MOUNTLAKE TERRACE, Wash., Oct. 21, 2025 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ:FSBW) (the "Company"), the holding company for 1st Security Bank of Washington (the "Bank") today reported 2025 third quarter net income of $9.2 million, or $1.18 per diluted share, compared to $10.3 million, or $1.29 per diluted share, for the comparable quarter one year ago. For the nine months ended September 30, 2025, net income was $24.9 million, or $3.18 per diluted share, compared to net income of $27.6 million, or $3.45 per diluted share, for the comparable nine-month period in 2024.

"We continue to manage our strong net interest margins (NIM) with expanding yields on earning assets while maintaining a stable, well positioned mix of funding liabilities," stated Matthew Mullet, CEO and President of 1st Security Bank.

"Shareholder returns were balanced in the third quarter with share repurchases, a paid special dividend, and the payment of our 50^t^h quarterly dividend," stated Joe Adams, CEO of FS Bancorp, Inc. "We are also pleased to announce that our Board of Directors has approved our 51st consecutive quarterly cash dividend of $0.28 per common share, demonstrating our commitment to long-term shareholders. The cash dividend will be paid on November 20, 2025, to shareholders of record as of November 6, 2025," concluded Adams.

2025 Third Quarter Highlights

Net income was $9.2 million for the third quarter of 2025, compared to $7.7 million for the previous quarter, and $10.3 million for the comparable quarter one year ago;
Total deposits increased $133.1 million, or 5.2%, to $2.69 billion at September 30, 2025, compared to $2.55 billion at June 30, 2025, and increased $259.2 million, or 10.7%, from $2.43 billion at September 30, 2024, primarily due to an increase in brokered certificates of deposit ("CDs") and, to a lesser extent, other deposits. Noninterest-bearing deposits were $665.9 million at September 30, 2025, $654.1 million at June 30, 2025, and $657.8 million at September 30, 2024;
Borrowings decreased $105.0 million, or 44.8%, to $129.3 million at September 30, 2025, compared to $234.3 million at June 30, 2025, and decreased $34.5 million, or 21.1%, from $163.8 million at September 30, 2024;
Loans receivable, net increased $17.3 million, or 0.7%, to $2.60 billion at September 30, 2025, compared to $2.58 billion at June 30, 2025, and increased $135.9 million, or 5.5%, from $2.46 billion at September 30, 2024;
Consumer loans were $600.8 million at September 30, 2025, a decrease of $5.5 million, or 0.91%, from $606.3 million in the previous quarter, and a decrease of $31.6 million, or 5.0%, from $632.4 million in the comparable quarter one year ago. During the three months ended September 30, 2025, consumer loan originations included 83.3% of home improvement loans originated with a Fair Isaac Corporation ("FICO") score above 720;
Repurchased 134,413 shares of the Company's common stock in the third quarter of 2025 at an average price of $41.15 per share, with $826,000 remaining for future purchases under the existing share repurchase plan as of September 30, 2025;
Book value per share increased $0.88 to $40.43 at September 30, 2025, compared to $39.55 at June 30, 2025, and increased $2.98 from $37.45 at September 30, 2024. Tangible book value per share (non-GAAP financial measure) increased $0.97 to $38.43 at September 30, 2025, compared to $37.46 at June 30, 2025, and increased $3.33 from $35.10 at September 30, 2024. See, "Non-GAAP Financial Measures;"
Segment reporting in the third quarter of 2025 reflected net income of $8.4 million for the Commercial and Consumer Banking segment and $775,000 for the Home Lending segment, compared to net income of $7.4 million and $351,000 in the prior quarter, and net income of $9.3 million and $1.0 million in the third quarter of 2024, respectively; and
Regulatory capital ratios at the Bank were 13.8% for total risk-based capital and 11.0% for Tier 1 leverage capital at September 30, 2025, compared to 14.1% for total risk-based capital and 11.2% for Tier 1 leverage capital at June 30, 2025.

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, 2025 and 2024 (dollars in thousands):

	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
Full-time employees ("FTEs")		460			115			575

	At or For the Three Months Ended September 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income⁽¹⁾	$	28,612		$	2,632		$	31,244
Provision for credit losses		(1,331	)		(182	)		(1,513	)
Noninterest income⁽²⁾		2,257			3,710			5,967
Noninterest expense⁽³⁾		(20,199	)		(5,633	)		(25,832	)
Income before provision for income taxes		9,339			527			9,866
(Provision) benefit for income taxes		(71	)		491			420
Net income	$	9,268		$	1,018		$	10,286
Total average assets for period ended	$	2,347,854		$	612,935		$	2,960,789
FTEs		442			117			559

	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

	At or For the Nine Months Ended September 30, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	84,749		$	7,242		$	91,991
Provision for credit losses		(3,796	)		(193	)		(3,989	)
Noninterest income ⁽²⁾		6,919			10,027			16,946
Noninterest expense ⁽³⁾		(58,250	)		(14,968	)		(73,218	)
Income before provision for income taxes		29,622			2,108			31,730
(Provision) benefit for income taxes		(4,253	)		165			(4,088	)
Net income	$	25,369		$	2,273		$	27,642
Total average assets for period ended	$	2,369,740		$	586,001		$	2,955,741
FTEs		442			117			559

__________________________

(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, 2025, the Company recorded a net increase in fair value of $203,000 and $469,000, respectively, compared to a net increase in fair value of $262,000 and $448,000, respectively for the three and nine months ended September 30, 2024. As of September 30, 2025 and 2024, there were $12.8 million and $13.9 million, respectively, in residential mortgage loans recorded at fair value as they were previously 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, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.8 million and $5.5 million, compared to $1.8 million and $4.8 million for the same periods in 2024, respectively.

Asset Summary

The following table presents the components and changes in total assets as of the dates indicated.

ASSETS							Linked Quarter					Prior Year
(Dollars in thousands)	Sep 30,		Jun 30,		Sep 30,		Change					Quarter Change
	2025		2025		2024		$			%		$			%
Cash and due from banks	$	12,391	$	15,168	$	17,950	$	(2,777	)	(18	)%	$	(5,559	)	(31	)%
Interest-bearing deposits at other financial institutions		48,889		18,027		22,390		30,862		171			26,499		118
Total cash and cash equivalents		61,280		33,195		40,340		28,085		85			20,940		52
Certificates of deposit at other financial institutions		—		248		12,001		(248	)	NM			(12,001	)	NM
Securities available-for-sale, at fair value		311,695		302,692		228,199		9,003		3			83,496		37
Securities held-to-maturity, net		31,386		31,562		8,455		(176	)	(1	)		22,931		271
Loans held for sale, at fair value		38,579		53,630		49,373		(15,051	)	(28	)		(10,794	)	(22	)
Loans receivable, net		2,599,601		2,582,272		2,463,697		17,329		1			135,904		6
Accrued interest receivable		15,122		14,270		14,014		852		6			1,108		8
Premises and equipment, net		32,444		30,098		30,026		2,346		8			2,418		8
Operating lease right-of-use		6,832		7,969		5,365		(1,137	)	(14	)		1,467		27
Federal Home Loan Bank stock, at cost		7,975		11,579		9,504		(3,604	)	(31	)		(1,529	)	(16	)
Deferred tax asset, net		6,767		7,782		4,222		(1,015	)	(13	)		2,545		60
Bank owned life insurance ("BOLI"), net		38,531		38,262		38,453		269		1			78		—
MSRs, held at the lower of cost or fair value		8,506		8,652		8,739		(146	)	(2	)		(233	)	(3	)
Goodwill		3,592		3,592		3,592		—		—			—		—
Core deposit intangible, net		11,284		12,071		14,586		(787	)	(7	)		(3,302	)	(23	)
Other assets		35,231		38,139		39,642		(2,908	)	(8	)		(4,411	)	(11	)
TOTAL ASSETS	$	3,208,825	$	3,176,013	$	2,970,208	$	32,812		1	%	$	238,617		8	%

The increase in total assets reflects the Company's continued focus on balance sheet growth through loan origination and selective investment activity, funded by a combination of on-balance sheet liquidity and borrowings.

																						Prior
LOAN PORTFOLIO																			Linked			Year
(Dollars in thousands)																			Quarter			Quarter
COMMERCIAL REAL ESTATE	September 30, 2025						June 30, 2025						September 30, 2024						$			$
("CRE") LOANS	Amount			Percent			Amount			Percent			Amount			Percent			Change			Change
CRE owner occupied	$	170,714			6.5	%	$	180,250			6.8	%	$	176,661			7.1	%	$	(9,536	)	$	(5,947	)
CRE non-owner occupied		172,713			6.6			171,979			6.6			176,272			7.1			734			(3,559	)
Commercial and speculative construction and development		326,684			12.4			300,723			11.5			240,618			9.6			25,961			86,066
Multi-family		262,578			10.0			263,185			10.1			238,462			9.6			(607	)		24,116
Total CRE loans		932,689			35.5			916,137			35.0			832,013			33.4			16,552			100,676

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		629,712			23.9			639,881			24.4			591,666			23.7			(10,169	)		38,046
Home equity		86,895			3.3			85,613			3.3			75,063			3.0			1,282			11,832
Residential custom construction		53,296			2.0			54,024			2.1			51,748			2.1			(728	)		1,548
Total residential real estate loans		769,903			29.2			779,518			29.8			718,477			28.8			(9,615	)		51,426

CONSUMER LOANS
Indirect home improvement		527,597			20.1			530,375			20.3			552,226			22.1			(2,778	)		(24,629	)
Marine		70,220			2.7			72,765			2.8			76,845			3.1			(2,545	)		(6,625	)
Other consumer		2,962			0.1			3,151			0.1			3,346			0.1			(189	)		(384	)
Total consumer loans		600,779			22.9			606,291			23.2			632,417			25.3			(5,512	)		(31,638	)

COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")		311,173			11.8			294,563			11.3			296,773			11.9			16,610			14,400
Warehouse lending		15,113			0.6			17,952			0.7			15,249			0.6			(2,839	)		(136	)
Total commercial business loans		326,286			12.4			312,515			12.0			312,022			12.5			13,771			14,264
Total loans receivable, gross		2,629,657			100.0	%		2,614,461			100.0	%		2,494,929			100.0	%		15,196			134,728

Allowance for credit losses ("ACL") on loans		(30,056	)					(32,189	)					(31,232	)					2,133			1,176
Total loans receivable, net	$	2,599,601					$	2,582,272					$	2,463,697					$	17,329		$	135,904

Total loans increased to $2.63 billion during the third quarter of 2025, primarily as a result of growth in commercial and speculative construction and development loans and C&I loans. Commercial and speculative construction and development loans increased $26.0 million, let by speculative residential vertical projects, while C&I loans increased $16.6 million.

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

(Dollars in thousands)
CRE by Type:	Sep 30, 2025			Jun 30, 2025			Sep 30, 2024
CRE non-owner occupied:
Office		$	42,537		$	39,141		$	40,672
Retail			36,827			38,652			36,070
Hospitality/restaurant			25,798			26,489			27,743
Self-storage			19,001			19,075			19,130
Mixed use			18,663			18,387			17,882
Industrial			14,352			14,444			15,402
Senior housing/assisted living			7,390			7,448			7,621
Other			3,632			3,670			6,684
Land			2,072			2,206			2,523
Education/worship			2,441			2,467			2,545
Total CRE non-owner occupied			172,713			171,979			176,272
CRE owner occupied:
Industrial			77,059			77,419			63,577
Office			31,981			40,156			42,156
Retail			17,399			19,470			19,968
Hospitality/restaurant			7,675			7,230			10,528
Other			10,521			9,483			8,116
Car wash			4,430			4,447			9,575
Automobile related			7,164			7,215			8,874
Mixed use			4,622			5,548			5,648
Agriculture			4,347			4,652			3,610
Education/worship			5,516			4,630			4,609
Total CRE owner occupied			170,714			180,250			176,661
Total	$		343,427	$		352,229	$		352,933

The following table includes CRE loans repricing or maturing within the next two years, excluding loans that reprice simultaneously with changes to the prime rate:

																			Current
(Dollars in																			Weighted
thousands)	For the Quarter Ended																		Average
CRE by type:	Dec 31, 2025		Mar 31, 2026		Jun 30, 2026		Sep 30, 2026		Dec 31, 2026		Mar 31, 2027		Jun 30, 2027		Sep 30, 2027		Total		Rate
Agriculture	$	716	$	178	$	—	$	273	$	—	$	—	$	—	$	—	$	1,167	6.47	%
Apartment		1,421		968		13,706		9,738		16,186		27,814		18,052		4,153		92,038	5.81	%
Auto–related		—		204		—		—		—		—		—		—		204	5.75	%
Hotel / hospitality		—		111		1,224		—		—		102		—		—		1,437	5.08	%
Industrial		9,300		397		580		1,553		—		13,341		3,345		5,754		34,270	5.09	%
Mixed use		—		2,110		—		—		375		—		—		—		2,485	7.85	%
Office		791		511		1,616		550		7,640		2,835		—		7,568		21,511	4.75	%
Other		2,566		876		—		2,441		1,474		—		2,014		329		9,700	5.22	%
Retail		—		406		3,422		—		3,375		2,997		2,366		7,551		20,117	4.68	%
Senior housing and assisted living		—		2,128		—		—		—		—		1,363		—		3,491	4.76	%
Total	$	14,794	$	7,889	$	20,548	$	14,555	$	29,050	$	47,089	$	27,140	$	25,355	$	186,420

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

(Dollars in thousands)	September 30, 2025				June 30, 2025				September 30, 2024
Construction Types:	Amount		Percent		Amount		Percent		Amount		Percent
Commercial construction – retail	$	8,445	2.2	%	$	8,447	2.4	%	$	8,710	3.0	%
Commercial construction – office		9,150	2.4			9,083	2.6			4,737	1.6
Commercial construction – self storage		18,701	4.9			16,553	4.7			10,408	3.5
Commercial construction – hotel		6,147	1.6			3,673	1.0			7,807	2.7
Multi-family		29,751	7.8			23,119	6.5			30,931	10.6
Custom construction – single family residential and single family manufactured residential		44,299	11.7			45,570	12.8			43,528	14.9
Custom construction – land, lot and acquisition and development		8,998	2.4			8,454	2.4			8,220	2.8
Speculative residential construction – vertical		217,821	57.3			200,375	56.5			145,549	49.8
Speculative residential construction – land, lot and acquisition and development		36,668	9.6			39,473	11.1			32,476	11.1
Total	$	379,980	100.0	%	$	354,747	100.0	%	$	292,366	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
	Sep 30, 2025					Jun 30, 2025					Sep 30, 2024					$			%			$			%
	Amount		Percent			Amount		Percent			Amount		Percent			Change			Change			Change			Change
Purchase	$	155,910		88.8	%	$	170,854		85.7	%	$	168,088		85.7	%	$	(14,944	)		(8.7	)	$	(12,178	)		(7.2	)%
Refinance		19,714		11.2			28,470		14.3			28,001		14.3			(8,756	)		(30.8	)		(8,287	)		(29.6	)%
Total	$	175,624		100.0	%	$	199,324		100.0	%	$	196,089		100.0	%	$	(23,700	)		(11.9	)	$	(20,465	)		(10.4	)%

(Dollars in thousands)	For the Nine Months Ended Sep 30,
	2025				2024
	Amount		Percent		Amount		Percent		$ Change			%Change
Purchase	$	446,631	85.8	%	$	497,705	88.8	%	$	(51,074	)	(10.3	)%
Refinance		73,697	14.2			62,546	11.2			11,151		17.8	%
Total	$	520,328	100.0	%	$	560,251	100.0	%	$	(39,923	)	(7.1	)%

During the quarter ended September 30, 2025, the Company sold $156.4 million of one-to-four-family loans compared to $127.1 million during the previous quarter and $167.6 million during the same quarter one year ago. The increase in the volume of loans sold during the current quarter compared to the prior quarter was primarily due to seasonal homebuying factors. This increased demand for homes generally results in a higher volume of loan originations and, consequently, more loans available for sale. Gross margins on home loan sales increased to 3.14% for the quarter ended September 30, 2025, compared to 3.06% in the previous quarter and increased from 2.96% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.

Liabilities and Equity Summary

The following table summarizes the components and changes in deposits, borrowings, equity, and book value per common share at the dates indicated.

(Dollars in thousands)																Linked			Prior Year
DEPOSITS	Sep 30, 2025					Jun 30, 2025					Sep 30, 2024					Quarter			Quarter
Transactional deposits:	Amount		Percent			Amount		Percent			Amount		Percent			$ Change			$ Change
Noninterest-bearing checking	$	648,661		24.1	%	$	643,573		25.2	%	$	641,270		26.4	%	$	5,088		$	7,391
Interest-bearing checking:
Retail deposits		199,527		7.4			181,240		7.1			165,944		6.8			18,287			33,583
Brokered deposits		—		—			30,020		1.2			—		—			(30,020	)		—
Total interest-bearing checking		199,527		7.4			211,260		8.3			165,944		6.8			(11,733	)		33,583
Escrow accounts related to mortgages serviced⁽¹⁾		17,191		0.6			10,496		0.4			16,483		0.7			6,695			708
Subtotal		865,379		32.2			865,329		33.9			823,697		33.9			50			41,682
Savings and money market:
Savings		167,006		6.2			159,601		6.3			151,364		6.2			7,405			15,642
Money market:
Retail deposits		354,082		13.2			350,548		13.6			339,037		13.9			3,534			15,045
Brokered deposits		251		—			251		0.1			1,012		0.0			—			(761	)
Total money market		354,333		13.2			350,799		13.7			340,049		14.0			3,534			14,284
Subtotal		521,339		19.4			510,400		20.0			491,413		20.2			10,939			29,926
Certificates of deposit:
Retail CDs		924,925		34.4			891,355		34.9			849,302		35.0			33,570			75,623
Nonretail CDs:
Online CDs		3,423		0.1			3,423		0.1			9,354		0.4			—			(5,931	)
Public CDs		2,023		0.1			2,114		0.1			3,325		0.1			(91	)		(1,302	)
Brokered CDs		369,403		13.8			280,754		11.0			250,240		10.3			88,649			119,163
Total nonretail CDs		374,849		14.0			286,291		11.2			262,919		10.8			88,558			111,930
Subtotal		1,299,774		48.4			1,177,646		46.1			1,112,221		45.8			122,128			187,553
Total deposits	$	2,686,492		100.0	%	$	2,553,375		100.0	%	$	2,427,331		100.0	%	$	133,117		$	259,161
Borrowings⁽²⁾	$	129,305				$	234,305				$	163,806				$	(105,000	)	$	(34,501	)
Shareholders' equity	$	300,511				$	297,203				$	288,902				$	3,308		$	11,609
Book value per common share	$	40.43				$	39.55				$	37.45				$	0.88		$	2.98

_______________

(1) Primarily noninterest-bearing accounts based on applicable state law.

(2) Comprised of FHLB advances and Federal Reserve Bank borrowings.

At September 30, 2025, the Bank had uninsured deposits of approximately $694.4 million, compared to approximately $677.2 million at June 30, 2025, and $644.9 million at September 30, 2024. The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.

In the table above, the linked quarter increase in stockholders' equity at September 30, 2025, compared to June 30, 2025, was primarily due to net income of $9.2 million and unrealized gain in fair value on securities available for sale of $2.9 million, net of tax, partially offset by unrealized loss in fair value and cash flow hedges of $454,000, net of tax. These changes reduced accumulated other comprehensive loss reported in the prior quarter to income this quarter, contributing to the increase in stockholders' equity. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in shareholders' equity was partially offset by share repurchases of $5.5 million and cash dividends paid of $3.8 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 September 30, 2025, capital ratios presented for the Bank and the Company were as follows:

	At September 30, 2025
	Bank		Company
Total risk-based capital (to risk-weighted assets)	13.81	%	13.93	%
Tier 1 leverage capital (to average assets)	10.96	%	9.49	%
CET 1 capital (to risk-weighted assets)	12.64	%	10.95	%

Credit Quality

The following table summarizes the changes in the ACL on loans, nonperforming loans, and classified loans at the dates indicated.


										Linked			Prior Year
ACL ON LOANS	Sep 30,			Jun 30,			Sep 30,			Quarter			Quarter
(Dollars in thousands)	2025			2025			2024			$ Change			$ Change
Beginning ACL balance	$	32,189		$	31,653		$	31,238		$	536		$	951
Provision		1,851			1,715			1,591			136			260
Charge-offs
Indirect		(1,941	)		(1,555	)		(1,847	)		(386	)		(94	)
Marine		(55	)		(43	)		(91	)		(12	)		36
Other		(49	)		(42	)		(26	)		(7	)		(23	)
Commercial construction – office		(2,299	)		—			—			(2,299	)		(2,299	)
Commercial business		—			—			—			—			—
Subtotal		(4,344	)		(1,640	)		(1,964	)		(2,704	)		(2,380	)
Recoveries
Indirect		323			330			339			(7	)		(16	)
Marine		16			54			11			(38	)		5
Other		12			7			10			5			2
Commercial business		9			70			7			(61	)		2
Subtotal		360			461			367			(101	)		(7	)
Ending ACL balance	$	30,056		$	32,189		$	31,232		$	(2,133	)	$	(1,176	)

The commercial construction - office charge-off shown above reflects the expected loss for the project recognized during the three months ended September 30, 2025.


NONPERFORMING LOANS							Linked			Prior Year
(Dollars in thousands)	Sep 30,		June 30,		Sep 30,		Quarter			Quarter
CRE LOANS	2025		2025		2024		$ Change			$ Change
CRE	$	2,047	$	2,046	$	1,130	$	1		$	917
Commercial and speculative construction and development		9,150		9,083		4,737		67			4,413
Total CRE loans		11,197		11,129		5,867		68			5,330

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		1,799		1,809		166		(10	)		1,633
Home equity		317		251		156		66			161
Total residential real estate loans		2,116		2,060		322		56			1,794

CONSUMER LOANS
Indirect home improvement		3,802		3,365		1,770		437			2,032
Marine		620		567		233		53			387
Other consumer		40		13		5		27			35
Total consumer loans		4,462		3,945		2,008		517			2,454

COMMERCIAL BUSINESS LOANS
C&I		600		1,862		2,575		(1,262	)		(1,975	)
Total nonperforming loans	$	18,375	$	18,996	$	10,772	$	(621	)	$	7,603

The increase in nonaccrual loans year-over-year was partly driven by two commercial construction loans, which remain in active development. Disbursements on these loans, net of partial charge-offs of $2.3 million, contributed to a $4.4 million net increase in the nonaccrual balance of these loans compared to the same period last year. Increases in consumer loan and mortgage loan delinquencies also contributed to the overall rise in nonaccrual loans between the periods, partially offset by a $2.0 million decrease in C&I loans, primarily due to a partial charge-off and receipt of funds on a government guarantee for a single nonaccrual C&I loan.

CLASSIFIED LOANS							Linked			Prior Year
(Dollars in thousands)	Sep 30,		June 30,		Sep 30,		Quarter			Quarter
CRE LOANS	2025		2025		2024		$ Change			$ Change
CRE	$	5,515	$	2,046	$	3,603	$	3,469		$	1,912
Commercial and speculative construction and development		9,150		9,083		4,737		67			4,413
Total CRE loans		14,665		11,129		8,340		3,536			6,325

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		3,646		4,383		2,796		(737	)		850
Home equity		317		251		156		66			161
Total residential real estate loans		3,963		4,634		2,952		(671	)		1,011

CONSUMER LOANS
Indirect home improvement		3,802		3,365		1,770		437			2,032
Marine		620		567		232		53			388
Other consumer		40		13		5		27			35
Total consumer loans		4,462		3,945		2,007		517			2,455

COMMERCIAL BUSINESS LOANS
C&I		3,963		5,220		9,880		(1,257	)		(5,917	)
Total classified loans	$	27,053	$	24,928	$	23,179	$	2,125		$	3,874

Operating Results

Net interest income increased $2.4 million to $33.7 million for the three months ended September 30, 2025, from $31.2 million for the three months ended September 30, 2024, primarily due to an increase in total interest income of $3.9 million, partially offset by an increase in total interest expense of $1.5 million. The $3.9 million increase in total interest income was primarily due to an increase of $2.9 million in interest income on loans receivable, including fees, resulting from net loan growth and higher loan yields as a result of repricing and increased market rates. The $1.5 million increase in total interest expense was primarily the result of higher average deposit balances used to fund asset growth, partially offset by effective management of deposit and funding costs.

For the nine months ended September 30, 2025, net interest income increased $4.8 million to $96.8 million, from $92.0 million for the nine months ended September 30, 2024, with an $8.6 million increase in total interest income, partially offset by a $3.8 million increase in interest expense for the same reasons mentioned above.

NIM (annualized) increased two basis points to 4.37% for the three months ended September 30, 2025, from 4.35% for the same period in the prior year and increased three basis points from 4.30% to 4.33% for the nine months ended September 30, 2025. The change in NIM for the three and nine months ended September 30, 2025, compared to the same period in 2024, reflects the combined effects of higher yields on interest-earning assets, favorable shifts in asset mix, and continued control of funding costs.

The average total cost of funds, including noninterest-bearing checking, increased two basis points to 2.41% for the three months ended September 30, 2025, from 2.39% for the three months ended September 30, 2024. This increase was predominantly due to higher average balances in borrowings. The average cost of funds increased six basis points to 2.39% for the nine months ended September 30, 2025, from 2.33% for the nine months ended September 30, 2024, primarily for the same reason noted above as well as growth in the deposit mix from the prior year.

For the three and nine months ended September 30, 2025, the provision for credit losses on loans was $2.3 million and $5.9 million, compared to $1.5 million and $4.0 million for the three and nine months ended September 30, 2024, respectively. The provision for credit losses on loans reflects net loan growth and an increase in net charge-off activity.

During the three months ended September 30, 2025, net charge-offs increased $2.4 million to $4.0 million, compared to $1.6 million for the same prior last year. The increase was primarily due to a commercial construction loan's partial charge-off of $2.3 million. The partial charge-off was fully reserved for in previous periods, accordingly, there was no income statement impact resulting from increased provisions. During the nine months ended September 30, 2025, net charge-offs increased $2.6 million, to $6.9 million, compared to $4.3 million during the nine months ended September 30, 2024. The increase was primarily due to the $2.3 million partial charge-off discussed above, a $1.3 million increase in net charge-offs on indirect home improvement loans, partially offset by a $695,000 decrease in net charge-offs on commercial business loans and a $312,000 decrease in net charge-offs on marine loans. Management attributes the increase in net charge-offs for the current nine-month period to continued volatile economic conditions.

Total noninterest income decreased $373,000 to $5.6 million for the three months ended September 30, 2025, from $6.0 million for the three months ended September 30, 2024. The decrease primarily reflects a $156,000 decrease in service charges and fee income and a $141,000 decrease in gain on sale of MSRs as there were no MSR sales in the current quarter compared to the same period last year. Total noninterest income decreased $1.1 million to $15.9 million, for the nine months ended September 30, 2025, from $16.9 million for the nine months ended September 30, 2024. This decrease was primarily the result of a $713,000 decrease in gain on sale of loans, a $619,000 decrease in service charges and fee income, and a net decrease of $520,000 from no activity in gain on sales of MSRs and loss on sale of investment securities compared to an $8.4 million net gain on sale of MSRs, offset by the $7.8 million loss on sale of investment securities that occurred during the same period in 2024. These decreases were partially offset by a $757,000 increase in other noninterest income, primarily due to a $358,000 gain on sales of nonmarketable equity securities, $219,000 in bank owned life insurance proceeds, and a $152,000 increase in brokered loans fees.

Total noninterest expense was $25.4 million for the three months ended September 30, 2025, compared to $25.8 million for the three months ended September 30, 2024. The $444,000 decrease was primarily due to a $6,000 recovery in MSRs, compared to the prior year's $506,000 impairment, driven primarily by market rates, a $372,000 decrease in data processing, a $130,000 decrease in professional and board fees, a $118,000 decrease in marketing and advertising, and a $110,000 decrease in amortization of core deposit intangibles, partially offset by a $430,000 increase in salaries and benefits, primarily due to competitive wage adjustments, and a $147,000 increase in operations expense. Total noninterest expense increased $2.7 million to $75.9 million for the nine months ended September 30, 2025, compared to $73.2 million for the nine months ended September 30, 2024. Increases during the nine months ended September 30, 2025, compared to the same period last year included a $2.1 million in salaries and benefits, $889,000 in operations expense, and $401,000 in professional and board fees, partially offset by a $522,000 decrease in the impairment of MSRs, primarily for the same reasons discussed 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"), in press releases or 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 impacts to economic conditions in the Company's local market areas, other markets where 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 rates and the duration of such changes, including actions by the Federal Reserve, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and monetary and fiscal policy responses thereto 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, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy 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 our 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 our ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, 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 goals; 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 its website at www.fsbwa.com and on the SEC's website at www.sec.gov.

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 specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.


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

										Linked		Prior Year
	Sep 30,			Jun 30,			Sep 30,			Quarter		Quarter
ASSETS	2025			2025			2024			% Change		% Change
Cash and due from banks	$	12,391		$	15,168		$	17,950		(18	)	(31	)
Interest-bearing deposits at other financial institutions		48,889			18,027			22,390		171		118
Total cash and cash equivalents		61,280			33,195			40,340		85		52
Certificates of deposit at other financial institutions		—			248			12,001		(100	)	(100	)
Securities available-for-sale, at fair value		311,695			302,692			228,199		3		37
Securities held-to-maturity, net		31,386			31,562			8,455		(1	)	271
Loans held for sale, at fair value		38,579			53,630			49,373		(28	)	(22	)
Loans receivable, net		2,599,601			2,582,272			2,463,697		1		6
Accrued interest receivable		15,122			14,270			14,014		6		8
Premises and equipment, net		32,444			30,098			30,026		8		8
Operating lease right-of-use		6,832			7,969			5,365		(14	)	27
Federal Home Loan Bank stock, at cost		7,975			11,579			9,504		(31	)	(16	)
Deferred tax asset, net		6,767			7,782			4,222		(13	)	60
Bank owned life insurance ("BOLI"), net		38,531			38,262			38,453		1		—
MSRs, held at the lower of cost or fair value		8,506			8,652			8,739		(2	)	(3	)
Goodwill		3,592			3,592			3,592		—		—
Core deposit intangible, net		11,284			12,071			14,586		(7	)	(23	)
Other assets		35,231			38,139			39,642		(8	)	(11	)
TOTAL ASSETS	$	3,208,825		$	3,176,013		$	2,970,208		1		8
LIABILITIES
Deposits:
Noninterest-bearing accounts	$	665,852		$	654,069		$	657,753		2		1
Interest-bearing accounts		2,020,640			1,899,306			1,769,578		6		14
Total deposits		2,686,492			2,553,375			2,427,331		5		11
Borrowings		129,305			234,305			163,806		(45	)	(21	)
Subordinated notes:
Principal amount		50,000			50,000			50,000		—		—
Unamortized debt issuance costs		(356	)		(373	)		(423	)	(5	)	(16	)
Total subordinated notes less unamortized debt issuance costs		49,644			49,627			49,577		—		—
Operating lease liability		6,993			8,138			5,548		(14	)	26
Other liabilities		35,880			33,365			35,044		8		2
Total liabilities		2,908,314			2,878,810			2,681,306		1		8
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; 7,535,330 shares issued and outstanding at September 30, 2025, 7,618,543 at June 30, 2025, and 7,817,172 at September 30, 2024		75			76			78		(1	)	(4	)
Additional paid-in capital		43,907			48,418			55,264		(9	)	(21	)
Retained earnings		273,882			268,509			251,843		2		9
Accumulated other comprehensive loss, net of tax		(17,353	)		(19,800	)		(18,283	)	(12	)	(5	)
Total stockholders' equity		300,511			297,203			288,902		1		4
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,208,825		$	3,176,013		$	2,970,208		1		8


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	2025			2025		2024			% Change		% Change
Loans receivable, including fees	$	46,664		$	45,038	$	43,800		4		7
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		4,309			3,665		3,243		18		33
Total interest and dividend income		50,973			48,703		47,043		5		8
INTEREST EXPENSE
Deposits		14,862			14,520		13,486		2		10
Borrowings		1,935			1,585		1,828		22		6
Subordinated notes		486			486		485		—		—
Total interest expense		17,283			16,591		15,799		4		9
NET INTEREST INCOME		33,690			32,112		31,244		5		8
PROVISION FOR CREDIT LOSSES		2,309			2,021		1,513		14		53
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		31,381			30,091		29,731		4		6
NONINTEREST INCOME
Service charges and fee income		2,326			2,323		2,482		—		(6	)
Gain on sale of loans		2,439			1,972		2,523		24		(3	)
Gain on sale of MSRs		—			—		141		—		NM
Gain on sale of investment securities, net		—			—		11		NM		NM
Earnings on cash surrender value of BOLI		269			254		252		6		7
Other noninterest income		560			621		558		(10	)	—
Total noninterest income		5,594			5,170		5,967		8		(6	)
NONINTEREST EXPENSE
Salaries and benefits		14,415			14,088		13,985		2		3
Operations		3,974			3,824		3,827		4		4
Occupancy		1,744			1,780		1,662		(2	)	5
Data processing		1,784			2,137		2,156		(17	)	(17	)
Loan costs		746			719		666		4		12
Professional and board fees		1,093			1,155		1,223		(5	)	(11	)
FDIC insurance		592			554		533		7		11
Marketing and advertising		259			398		377		(35	)	(31	)
Amortization of core deposit intangible		787			809		897		(3	)	(12	)
(Recovery) impairment of servicing rights		(6	)		38		506		(116	)	(101	)
Total noninterest expense		25,388			25,502		25,832		—		(2	)
INCOME BEFORE PROVISION (BENEFIT) FOR INCOME TAXES		11,587			9,759		9,866		19		17
PROVISION (BENEFIT) FOR INCOME TAXES		2,410			2,031		(420	)	19		(674	)
NET INCOME	$	9,177		$	7,728	$	10,286		19		(11	)
Basic earnings per share	$	1.20		$	1.00	$	1.32		20		(9	)
Diluted earnings per share	$	1.18		$	0.99	$	1.29		19		(9	)


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

	Nine Months Ended					Year
	September 30,		September 30,			Over Year
INTEREST INCOME	2025		2024			% Change
Loans receivable, including fees	$	135,004	$	127,203			6
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		11,459		10,660			7
Total interest and dividend income		146,463		137,863			6
INTEREST EXPENSE
Deposits		42,440		39,620			7
Borrowings		5,783		4,796			21
Subordinated note		1,456		1,456			—
Total interest expense		49,679		45,872			8
NET INTEREST INCOME		96,784		91,991			5
PROVISION FOR CREDIT LOSSES		5,922		3,989			48
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		90,862		88,002			3
NONINTEREST INCOME
Service charges and fee income		6,894		7,513			(8	)
Gain on sale of loans		6,111		6,824			(10	)
Gain on sale of MSRs		—		8,356			NM
Loss on sale of investment securities, net		—		(7,836	)		NM
Earnings on cash surrender value of BOLI		773		734			5
Other noninterest income		2,112		1,355			56
Total noninterest income		15,890		16,946			(6	)
NONINTEREST EXPENSE
Salaries and benefits		43,037		40,920			5
Operations		11,243		10,354			9
Occupancy		5,240		5,036			4
Data processing		5,966		6,172			(3	)
Loan costs		2,012		1,904			6
Professional and board fees		3,435		3,034			13
FDIC insurance		1,684		1,515			11
Marketing and advertising		879		981			(10	)
Amortization of core deposit intangible		2,426		2,757			(12	)
Impairment of MSRs		23		545			(96	)
Total noninterest expense		75,945		73,218			4
INCOME BEFORE PROVISION FOR INCOME TAXES		30,807		31,730			(3	)
PROVISION FOR INCOME TAXES		5,881		4,088			44
NET INCOME	$	24,926	$	27,642			(10	)
Basic earnings per share	$	3.23	$	3.54			(9	)
Diluted earnings per share	$	3.18	$	3.45			(8	)

KEY FINANCIAL RATIOS AND DATA (Unaudited)
	At or For the Three Months Ended
	September 30,			June 30,			September 30,
PERFORMANCE RATIOS:	2025			2025			2024
Return on assets (ratio of net income to average total assets) ⁽¹⁾		1.14	%		0.99	%		1.38	%
Return on equity (ratio of net income to average total stockholders' equity)⁽¹⁾		11.97			10.29			14.08
Yield on average interest-earning assets ⁽¹⁾		6.61			6.52			6.56
Average total cost of funds ⁽¹⁾		2.41			2.39			2.39
Interest rate spread information – average during period		4.20			4.13			4.17
Net interest margin ⁽¹⁾		4.37			4.30			4.35
Operating expense to average total assets ⁽¹⁾		3.16			3.28			3.47
Average interest-earning assets to average interest-bearing liabilities ⁽¹⁾		140.80			140.98			144.28
Efficiency ratio ⁽²⁾		64.63			68.40			69.42
Common equity ratio (ratio of stockholders' equity to total assets)		9.37			9.36			9.73
Tangible common equity ratio ⁽³⁾		8.94			8.91			9.17

	For the Nine Months Ended
	September 30,			September 30,
PERFORMANCE RATIOS:	2025			2024
Return on assets (ratio of net income to average total assets)		1.07	%		1.25	%
Return on equity (ratio of net income to average total stockholders' equity)		11.03			13.05
Yield on average interest-earning assets		6.55			6.44
Average total cost of funds		2.39			2.33
Interest rate spread information – average during period		4.16			4.11
Net interest margin		4.33			4.30
Operating expense to average total assets		3.26			3.31
Average interest-earning assets to average interest-bearing liabilities		141.54			144.14
Efficiency ratio ⁽²⁾		67.40			67.21

	September 30,			June 30,			September 30,
ASSET QUALITY RATIOS AND DATA:	2025			2025			2024
Nonperforming assets to total assets at end of period ⁽⁴⁾		0.57	%		0.60	%		0.36	%
Nonperforming loans to total gross loans (excluding loans HFS) ⁽⁵⁾		0.70			0.73			0.43
ACL – loans to nonperforming loans⁽⁵⁾		163.77			168.89			290.07
ACL – loans to total gross loans (excluding loans HFS)		1.14			1.23			1.25

	At or For the Three Months Ended
	Sep 30,			Jun 30,			Sep 30,
PER COMMON SHARE DATA:	2025			2025			2024
Basic earnings per share	$	1.20		$	1.00		$	1.32
Diluted earnings per share	$	1.18		$	0.99		$	1.29
Weighted average basic shares outstanding		7,488,139			7,580,576			7,676,102
Weighted average diluted shares outstanding		7,623,243			7,698,173			7,854,389
Common shares outstanding at end of period		7,432,359	⁽⁶⁾		7,515,480	⁽⁷⁾		7,713,359	⁽⁸⁾
Book value per share using common shares outstanding	$	40.43		$	39.55		$	37.45
Tangible book value per share using common shares outstanding⁽⁹⁾	$	38.43		$	37.46		$	35.10

_______________

(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 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares.
(7)		Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, less 103,063 unvested restricted stock shares.
(8)		Common shares were calculated using shares outstanding of 7,817,172 at September 30, 2024, less 103,813 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	2025		2024		2025		2024		$ Change			$ Change
Assets
Loans receivable, net ⁽¹⁾	$	2,651,111	$	2,536,106	$	2,608,338	$	2,504,129	$	115,005		$	104,209
Investment securities - taxable		285,111		181,249		267,657		203,798		103,862			63,859
Investment securities - nontaxable		79,341		78,208		78,386		93,162		1,133			(14,776	)
Interest-bearing deposits and certificates of deposit at other financial institutions		34,857		48,546		23,575		49,887		(13,689	)		(26,312	)
FHLB stock, at cost		10,082		10,739		10,262		6,666		(657	)		3,596
Total interest-earning assets		3,060,502		2,854,848		2,988,218		2,857,642		205,654			130,576
Noninterest-earning assets		124,955		105,941		123,785		98,099		19,014			25,686
Total assets	$	3,185,457	$	2,960,789	$	3,112,003	$	2,955,741	$	224,668		$	156,262
Liabilities
Interest-bearing deposit accounts	$	1,947,830	$	1,737,793	$	1,880,007	$	1,788,324	$	210,037		$	91,683
Borrowings		176,234		191,279		181,633		144,635		(15,045	)		36,998
Subordinated notes		49,633		49,567		49,617		49,550		66			67
Total interest-bearing liabilities		2,173,697		1,978,639		2,111,257		1,982,509		195,058			128,748
Noninterest-bearing deposit accounts		668,908		650,582		663,536		648,345		18,326			15,191
Other noninterest-bearing liabilities		38,746		40,876		35,081		41,965		(2,130	)		(6,884	)
Total liabilities	$	2,881,351	$	2,670,097	$	2,809,874	$	2,672,819	$	211,254		$	137,055

_______________

(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.

(Dollars in thousands, except share and per share amounts)	September 30,				June 30,				September 30,
Tangible Book Value Per Share:	2025				2025				2024
Stockholders' equity (GAAP)	$	300,511			$	297,203			$	288,902
Less: goodwill and core deposit intangible, net		(14,876	)			(15,663	)			(18,178	)
Tangible common stockholders' equity (non-GAAP)	$	285,635			$	281,540			$	270,724

Common shares outstanding at end of period		7,432,359		⁽¹⁾		7,515,480		⁽²⁾		7,713,359		⁽³⁾

Book value per share (GAAP)	$	40.43			$	39.55			$	37.45
Tangible book value per share (non-GAAP)	$	38.43			$	37.46			$	35.10

Tangible Common Equity Ratio:
Total assets (GAAP)	$	3,208,825			$	3,176,013			$	2,970,208
Less: goodwill and core deposit intangible assets		(14,876	)			(15,663	)			(18,178	)
Tangible assets (non-GAAP)	$	3,193,949			$	3,160,350			$	2,952,030

Common equity ratio (GAAP)		9.37		%		9.36		%		9.73		%
Tangible common equity ratio (non-GAAP)		8.94				8.91				9.17

_______________

(1)		Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares.
(2)		Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, less 103,063 unvested restricted stock shares.
(3)		Common shares were calculated using shares outstanding of 7,817,172 at September 30, 2024, less 103,813 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, Inc. Reports Third Quarter Net Income of $9.2 Million or $1.18 Per Diluted Share and Declares 51st Consecutive Quarterly Cash Dividend