FS Bancorp, Inc. Reports $8.4 Million of Net Income or $1.10 Per Diluted Share for the Fourth Quarter of 2025 and 3.6% Increase in Its Quarterly Dividend

MOUNTLAKE TERRACE, Wash., Jan. 21, 2026 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”), today reported net income of $8.4 million, or $1.10 per diluted share for the quarter ended December 31, 2025, compared to $7.4 million, or $0.92 per diluted share, for the comparable quarter one year ago. Net income for 2025 was $33.3 million, or $4.29 per diluted share, compared to $35.0 million, or $4.36 per diluted share, for 2024.

“The Company remains focused on growing both book value and tangible book value, which increased 8.6% and 10.1%, respectively, during 2025. Tangible book value per share (non-GAAP) was $39.65 at December 31, 2025, compared to $36.02 at December 31, 2024,” stated Matthew Mullet, CEO and President of 1st Security Bank.

“Our consistent operating performance and strong capital position continue to support meaningful returns to our shareholders,” stated Joe Adams, CEO of FS Bancorp, Inc. “We are also thankful to our Board of Directors for increasing our fifty-second consecutive quarterly cash dividend by $0.01 to $0.29 per common share. The quarterly dividend will be paid on February 19, 2026, to shareholders of record as of February 6, 2026,” concluded Adams.

2025 Fourth Quarter and Year End Highlights

Net income was $8.4 million for the fourth quarter of 2025, compared to $9.2 million in the previous quarter, and increased from $7.4 million for the comparable quarter one year ago;
Net interest margin (“NIM”) was 4.35% for the fourth quarter of 2025, compared to 4.37% in the previous quarter, and 4.31% for the comparable quarter one year ago;
Total deposits were $2.67 billion at December 31, 2025, compared to $2.69 billion at September 30, 2025, and increased by $334.2 million, or 14.3%, from $2.34 billion at December 31, 2024. Noninterest-bearing deposits totaled $658.1 million at December 31, 2025, compared to $665.9 million at September 30, 2025, and $638.2 million at December 31, 2024;
Loans receivable, net increased $23.6 million, or 0.9%, to $2.62 billion at December 31, 2025, compared to $2.60 billion at September 30, 2025, and increased $121.2 million, or 4.8%, from $2.50 billion at December 31, 2024;
Consumer loans, of which 88.1% are home improvement loans, decreased $3.8 million, or 0.6%, to $597.0 million at December 31, 2025, compared to $600.8 million in the previous quarter and decreased $23.2 million, or 3.7% from $620.2 million in the comparable quarter one year ago. During the three months ended December 31, 2025, 84.3% of consumer portfolio originations for home improvement loans had a Fair Isaac Corporation (“FICO”) score above 720;
Purchased a 122,000-square-foot building for $16.1 million and intends to sell the Bank's current administrative office as part of a broader effort to centralize headquarters by year-end 2026. Prior to the purchase, the Bank leased 22,000 square feet of the building;
Repurchased 46,947 shares of the Company's common stock in the fourth quarter of 2025 at an average price of $40.01 per share with $4.3 million remaining for future purchases under the existing share repurchase plan;
Book value per share increased $1.12 to $41.55 at December 31, 2025, compared to $40.43 at September 30, 2025, and increased $3.29 from $38.26 December 31, 2024. Tangible book value per share (non-GAAP financial measure) increased $1.22 to $39.65 at December 31, 2025, compared to $38.43 at September 30, 2025, and increased $3.63 from $36.02 at December 31, 2024. See, “Non-GAAP Financial Measures;”
Segment reporting in the fourth quarter of 2025, reflected net income of $7.8 million for the Commercial and Consumer Banking segment and $643,000 for the Home Lending segment, compared to $8.4 million and $775,000 in the prior quarter, and $7.4 million and net loss of $39,000 in the fourth quarter of 2024, respectively;
Regulatory capital ratios at the Bank were 14.0% for total risk-based capital and 11.0% for Tier 1 leverage capital at December 31, 2025, compared to 14.2% for total risk-based capital and 11.2% for Tier 1 leverage capital at December 31, 2024.
Recorded an additional $1.0 million in noninterest income related to death benefits received on bank owned life insurance policies for the fourth quarter of 2025; and
Recognized an additional $1.0 million in credit provision related to a single commercial construction relationship during the fourth quarter of 2025.

Segment Reporting

The Company reports two 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 portfolios and cash management services. This segment is also responsible for the management of the investment portfolio and other assets of the Bank. 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 months and years ended December 31, 2025 and 2024 (dollars in thousands):

	At or For the Three Months Ended December 31, 2025
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	30,737		$	2,885		$	33,622
(Provision for) recovery of credit losses		(3,681	)		57			(3,624	)
Noninterest income ⁽²⁾		3,386			3,001			6,387
Noninterest expense ⁽³⁾		(20,878	)		(5,195	)		(26,073	)
Income before provision for income taxes		9,564			748			10,312
Provision for income taxes		(1,787	)		(105	)		(1,892	)
Net income	$	7,777		$	643		$	8,420
Total average assets for period ended	$	2,552,509		$	649,443		$	3,201,952
Full-time employees ("FTEs")		462			118			580

	At or For the Three Months Ended December 31, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	28,555		$	2,559		$	31,114
(Provision for) recovery of credit losses		(1,597	)		75			(1,522	)
Noninterest income ⁽²⁾		2,308			2,302			4,610
Noninterest expense ⁽³⁾		(19,365	)		(4,986	)		(24,351	)
Income (loss) before provision for income taxes		9,901			(50	)		9,851
(Provision) benefit for income taxes		(2,480	)		11			(2,469	)
Net income (loss)	$	7,421		$	(39	)	$	7,382
Total average assets for period ended	$	2,383,885		$	606,826		$	2,990,711
FTEs		447			115			562

	At or For the Year Ended December 31, 2025
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	119,134		$	11,272		$	130,406
Provision for credit losses		(9,001	)		(545	)		(9,546	)
Noninterest income ⁽²⁾		10,007			12,270			22,277
Noninterest expense ⁽³⁾		(81,501	)		(20,516	)		(102,017	)
Income before provision for income taxes		38,639			2,481			41,120
Provision for income taxes		(7,305	)		(469	)		(7,774	)
Net income	$	31,334		$	2,012		$	33,346
Total average assets for period ended	$	2,487,033		$	647,642		$	3,134,675
FTEs		462			118			580

	At or For the Year Ended December 31, 2024
Condensed income statement:	Commercial and Consumer Banking			Home Lending			Total
Net interest income ⁽¹⁾	$	113,304		$	9,801		$	123,105
Provision for credit losses		(5,393	)		(118	)		(5,511	)
Noninterest income ⁽²⁾		9,227			12,329			21,556
Noninterest expense ⁽³⁾		(77,615	)		(19,954	)		(97,569	)
Income before provision for income taxes		39,523			2,058			41,581
(Provision) benefit for income taxes		(6,733	)		176			(6,557	)
Net income	$	32,790		$	2,234		$	35,024
Total average assets for period ended	$	2,373,295		$	591,236		$	2,964,531
FTEs		447			115			562

________________________

(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 months and year ended December 31, 2025, the Company recorded a net increase in fair value of $65,000 and $534,000, respectively, as compared to a net decrease in fair value of $396,000 and a net increase in fair value of $52,000 for the three months and year ended December 31, 2024, respectively. As of December 31, 2025 and 2024, there were $13.2 million and $12.7 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 months and years ended December 31, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.9 million and $7.4 million, compared to $1.8 million and $6.6 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)	Dec 31,		Sep 30,		Dec 31,		Change					Quarter Change
	2025		2025		2024		$			%		$			%
Cash and due from banks	$	13,504	$	12,391	$	19,280	$	1,113		9	%	$	(5,776	)	(30	)%
Interest-bearing deposits at other financial institutions		14,715		48,889		12,355		(34,174	)	(70	)		2,360		19
Total cash and cash equivalents		28,219		61,280		31,635		(33,061	)	(54	)		(3,416	)	(11	)
Certificates of deposit at other financial institutions		—		—		1,727		—		—			(1,727	)	NM
Securities available-for-sale, at fair value		288,667		311,695		281,175		(23,028	)	(7	)		7,492		3
Securities held-to-maturity, net		33,224		31,386		8,455		1,838		6			24,769		293
Loans held for sale, at fair value		43,705		38,579		27,835		5,126		13			15,870		57
Loans receivable, net		2,623,172		2,599,601		2,501,951		23,571		1			121,221		5
Accrued interest receivable		14,614		15,122		13,881		(508	)	(3	)		733		5
Premises and equipment, net		44,065		32,444		29,756		11,621		36			14,309		48
Long-lived assets held for sale		3,258		—		—		3,258		—			3,258		—
Operating lease right-of-use		5,789		6,832		5,378		(1,043	)	(15	)		411		8
Federal Home Loan Bank stock, at cost		7,971		7,975		15,621		(4	)	—			(7,650	)	(49	)
Deferred tax asset, net		6,993		6,767		7,059		226		3			(66	)	(1	)
Bank owned life insurance (“BOLI”), net		36,249		38,531		38,528		(2,282	)	(6	)		(2,279	)	(6	)
MSRs, held at the lower of cost or fair value		8,608		8,506		9,204		102		1			(596	)	(6	)
Goodwill		3,592		3,592		3,592		—		—			—		—
Core deposit intangible, net		10,518		11,284		13,710		(766	)	(7	)		(3,192	)	(23	)
Other assets		38,203		35,231		39,670		2,972		8			(1,467	)	(4	)
TOTAL ASSETS	$	3,196,847	$	3,208,825	$	3,029,177	$	(11,978	)	—	%	$	167,670		6	%

During the three months ended December 31, 2025, the Company purchased an office building for $16.1 million. The Company's existing headquarters building was reclassified from premises and equipment, net, to long-lived assets held for sale, at $3.3 million, representing the lower of its carrying value or fair value. No impairment was recorded upon transfer to the held for sale classification. The Company plans to centralize all corporate departments into the new office building by the end of 2026. The costs of the centralization, including potential renovations, furniture, and IT infrastructure, are expected to be funded from cash on hand, and are not anticipated to materially impact the Company's capital position.

LOAN PORTFOLIO																						Prior
(Dollars in thousands)																			Linked			Year
COMMERCIAL																			Quarter			Quarter
REAL ESTATE	December 31, 2025						September 30, 2025						December 31, 2024						$			$
("CRE") LOANS	Amount			Percent			Amount			Percent			Amount			Percent			Change			Change
CRE owner occupied	$	176,078			6.6	%	$	170,714			6.5	%	$	170,396			6.7	%	$	5,364		$	5,682
CRE non-owner occupied		177,113			6.7			172,713			6.6			174,921			6.9			4,400			2,192
Commercial and speculative construction and development		354,130			13.3			326,684			12.4			280,798			11.1			27,446			73,332
Multi-family		262,150			9.9			262,578			10.0			245,222			9.7			(428	)		16,928
Total CRE loans		969,471			36.5			932,689			35.5			871,337			34.4			36,782			98,134

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		628,761			23.7			629,712			23.9			617,322			24.4			(951	)		11,439
Home equity		88,271			3.3			86,895			3.3			75,147			3.0			1,376			13,124
Residential custom construction		42,329			1.6			53,296			2.0			49,902			2.0			(10,967	)		(7,573	)
Total residential real estate loans		759,361			28.6			769,903			29.2			742,371			29.4			(10,542	)		16,990

CONSUMER LOANS
Indirect home improvement		525,842			19.8			527,597			20.1			541,946			21.4			(1,755	)		(16,104	)
Marine		68,115			2.6			70,220			2.7			74,931			2.9			(2,105	)		(6,816	)
Other consumer		3,029			0.1			2,962			0.1			3,304			0.1			67			(275	)
Total consumer loans		596,986			22.5			600,779			22.9			620,181			24.4			(3,793	)		(23,195	)

COMMERCIAL BUSINESS LOANS
Commercial and industrial (“C&I”)		301,111			11.3			311,173			11.8			287,014			11.3			(10,062	)		14,097
Warehouse lending		28,180			1.1			15,113			0.6			12,918			0.5			13,067			15,262
Total commercial business loans		329,291			12.4			326,286			12.4			299,932			11.8			3,005			29,359
Total loans receivable, gross		2,655,109			100.0	%		2,629,657			100.0	%		2,533,821			100.0	%		25,452			121,288

Allowance for credit losses ("ACL") on loans		(31,937	)					(30,056	)					(31,870	)					(1,881	)		(67	)
Total loans receivable, net	$	2,623,172					$	2,599,601					$	2,501,951					$	23,571		$	121,221

Total loans receivable, gross increased $25.5 million to $2.66 billion during the fourth quarter of 2025, primarily as a result of a $27.4 million increase in commercial and speculative construction and development loans, led by speculative residential projects.

A breakdown of CRE loans, excluding multi-family and construction and development loans, at the dates indicated were as follows:

(Dollars in thousands)
CRE by Type:	December 31, 2025		September 30, 2025		December 31, 2024
CRE non-owner occupied:
Office	$	44,429	$	42,537	$	39,697
Retail		36,387		36,827		36,568
Hospitality/restaurant		24,848		25,798		27,562
Self-storage		18,924		19,001		19,111
Mixed use		18,903		18,663		17,721
Industrial		14,263		14,352		15,125
Senior housing/assisted living		7,329		7,390		7,565
Other		7,729		3,632		6,631
Land		1,887		2,072		2,421
Education/worship		2,414		2,441		2,520
Total CRE non-owner occupied		177,113		172,713		174,921
CRE owner occupied:
Industrial		75,347		77,059		67,064
Office		30,311		31,981		42,223
Retail		24,248		17,399		20,718
Hospitality/restaurant		7,583		7,675		10,396
Other		10,492		10,521		8,612
Car wash		4,412		4,430		—
Automobile related		7,111		7,164		7,325
Mixed use		7,831		4,622		5,616
Agriculture		4,136		4,347		3,834
Education/worship		4,607		5,516		4,608
Total CRE owner occupied		176,078		170,714		170,396
Total	$	353,191	$	343,427	$	345,317

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

(Dollars in																			Current
thousands)	For the Quarter Ended																		Weighted
	Mar 31,		Jun 30,		Sep 30,		Dec 31,		Mar 31,		Jun 30,		Sep 30,		Dec 31,				Average
CRE by type:	2026		2026		2026		2026		2027		2027		2027		2027		Total		Rate
Agriculture	$	805	$	—	$	266	$	—	$	—	$	—	$	—	$	—	$	1,071	6.20	%
Apartment		959		14,534		7,988		16,133		27,768		18,056		4,136		12,405		101,979	5.91
Auto–related		202		—		—		—		—		—		—		—		202	5.75
Hotel / hospitality		—		415		110		—		102		—		—		—		627	4.88
Industrial		394		577		1,532		—		13,266		3,312		5,717		5,261		30,059	5.72
Mixed use		2,107		—		—		374		—		—		—		3,246		5,727	6.88
Office		—		1,603		546		7,583		2,812		—		7,499		3,887		23,930	5.25
Other		476		1,205		2,414		2,333		—		1,991		328		—		8,747	5.35
Retail		218		3,394		—		3,349		2,966		2,352		7,457		—		19,736	4.67
Senior housing and assisted living		2,113		—		—		—		—		1,354		—		—		3,467	4.76	%
Total	$	7,274	$	21,728	$	12,856	$	29,772	$	46,914	$	27,065	$	25,137	$	24,799	$	195,545

A breakdown of construction and development loans at the dates indicated were as follows:

(Dollars in thousands)	December 31, 2025					September 30, 2025				December 31, 2024
CRE Construction Types:	Amount		Percent			Amount		Percent		Amount		Percent
Commercial construction – retail	$	8,452		2.1	%	$	8,445	2.2	%	$	8,079	2.4	%
Commercial construction – office		9,236		2.3			9,150	2.4			4,979	1.5
Commercial construction – self storage		22,437		5.7			18,701	4.9			13,480	4.1
Commercial construction – hotel		9,404		2.4			6,147	1.6			—	—
Multi-family		37,403		9.4			29,751	7.8			30,945	9.4
Custom construction – single family residential and single family manufactured residential		32,451		8.2			44,298	11.7			42,040	12.7
Custom construction – land, lot and acquisition and development		9,878		2.5			8,998	2.4			7,862	2.4
Speculative residential construction – land, lot and acquisition and development		42,000		10.6			36,668	9.6			42,934	13.0
Speculative residential construction – vertical		225,198		56.8			217,822	57.4			180,381	54.5
Total	$	396,459		100.0	%	$	379,980	100.0	%	$	330,700	100.0	%

Originations of one-to-four-family loans to purchase and to refinance a home for the periods indicated were as follows:

(Dollars in																					Prior Year
thousands)	For the Three Months Ended															Linked Quarter					Quarter
	December 31, 2025					September 30, 2025					December 31, 2024					$		%			$		%
	Amount		Percent			Amount		Percent			Amount		Percent			Change		Change			Change		Change
Purchase	$	158,992		72.6	%	$	155,910		88.8	%	$	129,232		83.2	%	$	3,082		2.0	%	$	29,760		23.0	%
Refinance		60,153		27.4			19,714		11.2			26,116		16.8			40,439		205.1			34,037		130.3
Total	$	219,145		100.0	%	$	175,624		100.0	%	$	155,348		100.0	%	$	43,521		24.8	%	$	63,797		41.1	%

(Dollars in thousands)	For the Year Ended December 31,
	2025				2024
	Amount		Percent		Amount		Percent		$ Change			% Change
Purchase	$	604,842	81.8	%	$	626,937	87.6	%	$	(22,095	)	(3.5	)	%
Refinance		134,150	18.2			88,662	12.4			45,488		51.3
Total	$	738,992	100.0	%	$	715,599	100.0	%	$	23,393		3.3		%

During the quarter ended December 31, 2025, the Company sold $180.1 million of one-to-four-family loans compared to $156.4 million during the previous quarter and $138.9 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 decreases in market rates between periods. Gross margins on home loan sales decreased to 3.08% for the quarter ended December 31, 2025, compared to 3.14% in both the previous quarter and 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, stockholders’ equity, and book value per common share at the dates indicated.

(Dollars in thousands)																Linked			Prior Year
DEPOSITS	December 31, 2025					September 30, 2025					December 31, 2024					Quarter			Quarter
Transactional deposits:	Amount		Percent			Amount		Percent			Amount		Percent			$ Change			$ Change
Noninterest-bearing checking	$	647,197		24.3	%	$	648,661		24.1	%	$	627,679		26.8	%	$	(1,464	)	$	19,518
Interest-bearing checking:
Retail deposits		195,275		7.3			199,527		7.4			176,561		7.5			(4,252	)		18,714
Brokered deposits		140,174		5.2			—		—			—		—			140,174			140,174
Total interest-bearing checking		335,449		12.5			199,527		7.4			176,561		7.5			135,922			158,888
Escrow accounts related to mortgages serviced ⁽¹⁾		10,926		0.4			17,191		0.6			10,479		0.4			(6,265	)		447
Subtotal		993,572		37.2			865,379		32.2			814,719		34.8			128,193			178,853
Savings and money market:
Savings		164,056		6.1			167,006		6.2			154,188		6.6			(2,950	)		9,868
Money market:
Retail deposits		365,322		13.6			354,082		13.2			341,336		14.6			11,240			23,986
Brokered deposits		20,296		0.8			251		—			279		—			20,045			20,017
Total money market		385,618		14.4			354,333		13.2			341,615		14.6			31,285			44,003
Subtotal		549,674		20.5			521,339		19.4			495,803		21.2			28,335			53,871
Certificates of deposit:
Retail CDs		921,669		34.5			924,925		34.4			874,024		37.4			(3,256	)		47,645
Nonretail CDs:
Online CDs		3,423		0.1			3,423		0.1			9,354		0.4			—			(5,931	)
Public CDs		3,234		0.1			2,023		0.1			2,394		0.1			1,211			840
Brokered CDs		202,070		7.6			369,403		13.8			143,124		6.1			(167,333	)		58,946
Total nonretail CDs		208,727		7.8			374,849		14.0			154,872		6.6			(166,122	)		53,855
Subtotal		1,130,396		42.3			1,299,774		48.4			1,028,896		44.0			(169,378	)		101,500
Total deposits	$	2,673,642		100.0	%	$	2,686,492		100.0	%	$	2,339,418		100.0	%	$	(12,850	)	$	334,224
Borrowings ⁽²⁾	$	129,305				$	129,305				$	307,806				$	—		$	(178,501	)
Stockholders' equity	$	307,694				$	300,511				$	295,767				$	7,183		$	11,927
Book value per common share	$	41.55				$	40.43				$	38.26				$	1.12		$	3.29

_______________________

(1)		Primarily noninterest-bearing accounts based on applicable state law.
(2)		Comprised of FHLB advances and Federal Reserve Bank borrowings.

At December 31, 2025, the Bank had uninsured deposits of approximately $718.1 million, compared to approximately $694.4 million in September 30, 2025, and approximately $652.7 million at December 31, 2024. The uninsured amounts are estimated 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 December 31, 2025, compared to September 30, 2025, was primarily due to net income of $8.4 million and unrealized gain in fair value on securities available for sale of $1.6 million, net of tax, partially offset by dividends paid of $2.1 million. Gains and losses in fair value reflect changes in market interest rates during the period.

The Bank is considered “well capitalized” under the minimum capital requirements established by the Federal Deposit Insurance Corporation (“FDIC”) and the Company exceeded all regulatory capital requirements. At December 31, 2025, capital ratios presented for the Bank and the Company were as follows:

	At December 31, 2025
	Bank		Company
Total risk-based capital (to risk-weighted assets)	13.96	%	14.25	%
Tier 1 leverage capital (to average assets)	10.96	%	9.66	%
CET 1 capital (to risk-weighted assets)	12.73	%	11.21	%

Credit Quality

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

	For the Quarter Ended									Linked			Prior Year
ACL ON LOANS	Dec 31,			Sep 30,			Dec 31,			Quarter			Quarter
(Dollars in thousands)	2025			2025			2024			$ Change			$ Change
Beginning ACL balance	$	30,056		$	32,189		$	31,232		$	(2,133	)	$	(1,176	)
Provision		3,882			1,851			1,621			2,031			2,261
Charge-offs
Indirect		(2,258	)		(1,941	)		(1,417	)		(317	)		(841	)
Marine		(99	)		(55	)		(86	)		(44	)		(13	)
Other consumer		(53	)		(49	)		(25	)		(4	)		(28	)
Commercial construction – office		—			(2,299	)		—			2,299			—
Subtotal		(2,410	)		(4,344	)		(1,528	)		1,934			(882	)
Recoveries
CRE		2			—			—			2			2
Indirect		403			323			387			80			16
Marine		1			16			8			(15	)		(7	)
Other		3			12			6			(9	)		(3	)
C&I		—			9			144			(9	)		(144	)
Subtotal		409			360			545			49			(136	)
Ending ACL balance	$	31,937		$	30,056		$	31,870		$	1,881		$	67

NONPERFORMING LOANS	For the Quarter Ended						Linked			Prior Year
(Dollars in thousands)	Dec 31,		Sep 30,		Dec 31,		Quarter			Quarter
CRE LOANS	2025		2025		2024		$ Change			$ Change
CRE	$	2,049	$	2,047	$	2,771	$	2		$	(722	)
Commercial and speculative construction and development		9,236		9,150		4,979		86			4,257
Total CRE loans		11,285		11,197		7,750		88			3,535

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		1,778		1,799		164		(21	)		1,614
Home equity		390		317		261		73			129
Total residential real estate loans		2,168		2,116		425		52			1,743

CONSUMER LOANS
Indirect home improvement		4,256		3,802		1,677		454			2,579
Marine		454		620		289		(166	)		165
Other consumer		2		40		14		(38	)		(12	)
Total consumer loans		4,712		4,462		1,980		250			2,732

COMMERCIAL BUSINESS LOANS
C&I		580		600		3,445		(20	)		(2,865	)
Total nonperforming loans	$	18,745	$	18,375	$	13,600	$	370		$	5,145

The increase in nonaccrual loans year-over-year was partly driven by one commercial construction relationship, which remains in active development. Disbursements on this relationship, net of partial charge-offs of $2.3 million, contributed to a $5.1 million net increase in the nonaccrual balance of these loans compared to the same period last year. These funds were provided for the completion of the projects in order to improve the probability of protecting the collateral value. Increases in consumer loans and mortgage loan delinquencies also contributed to the rise in nonaccrual loans between the periods.

CLASSIFIED LOANS	For the Quarter Ended						Linked			Prior Year
(Dollars in thousands)	Dec 31,		Sep 30,		Dec 31,		Quarter			Quarter
CRE LOANS	2025		2025		2024		$ Change			$ Change
CRE	$	5,496	$	5,515	$	3,615	$	(19	)	$	1,881
Commercial and speculative construction and development		9,236		9,150		4,979		86			4,257
Total CRE loans		14,732		14,665		8,594		67			6,138

RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)		3,616		3,646		2,776		(30	)		840
Home equity		390		317		261		73			129
Total residential real estate loans		4,006		3,963		3,037		43			969

CONSUMER LOANS
Indirect home improvement		4,256		3,802		1,677		454			2,579
Marine		454		620		289		(166	)		165
Other consumer		2		40		14		(38	)		(12	)
Total consumer loans		4,712		4,462		1,980		250			2,732

COMMERCIAL BUSINESS LOANS
C&I		3,872		3,963		9,288		(91	)		(5,416	)
Total classified loans	$	27,322	$	27,053	$	22,899	$	269		$	4,423

Operating Results

Net interest income increased $2.5 million to $33.6 million for the three months ended December 31, 2025, from $31.1 million for the three months ended December 31, 2024, primarily as a result of an increase in interest income on loans receivable, including fees, partially offset by an increase in interest expense. Total interest income for the three months ended December 31, 2025, increased $3.8 million compared to the same period last year, primarily due to an increase of $3.2 million in interest income on loans receivable, including fees. This growth was primarily attributable to new loan growth and variable rate loans repricing higher following increases in market interest rates. Total interest expense increased $1.3 million to $17.2 million for the three months ended December 31, 2025, compared to the same period last year, primarily as a result of growth in interest bearing deposits.

For the year ended December 31, 2025, net interest income increased $7.3 million to $130.4 million, from $123.1 million for the year ended December 31, 2024, as a $12.4 million increase in interest income was partially offset by a $5.1 million increase in interest expense.

NIM increased four basis points to 4.35% for the three months ended December 31, 2025, compared to 4.31% for the same period in the prior year. For the year ended December 31, 2025, NIM increased three basis points to 4.33% from 4.30% for the year ended December 31, 2024. The increases in NIM for the three months ended and year ended December 31, 2025, compared to the same periods in 2024, were due to higher net interest income as a result of an increase in average interest-earning assets, particularly due to growth in commercial and speculative construction and development loans.

The average total cost of funds, including noninterest-bearing checking, was 2.38% for both the fourth quarter of 2025, and the same quarter of 2024. The unchanged rate reflects a shift in deposit mix, with a higher relative mix of CDs, offset by favorable CD repricing throughout 2025. For the full year, the average cost of funds decreased four basis points to 2.39%, primarily due to growth in noninterest-bearing deposits and favorable deposit repricing on CDs and other interest-bearing deposits. Management remains focused on aligning deposit and liability durations with loan and asset durations where possible.

For the three months and year ended December 31, 2025, the provision for credit losses on loans was $3.9 million and $9.0 million, compared to $1.6 million and $5.6 million, for the three months and year ended December 31, 2024, respectively. The increase in provision for credit losses on loans reflects a specific credit provision of $1.0 million on a single commercial construction relationship for the three months ended December 31, 2025, and relatively higher consumer loan charge-offs and organic loan growth between the periods.

During the three months ended December 31, 2025, net charge-offs increased $1.0 million to $2.0 million, compared to $983,000 in the same period last year. The increase primarily reflected higher net charge-offs of $824,000 in indirect home improvement loans, $144,000 in commercial business loans and $33,000 in other loans. For the year ended December 31, 2025, net charge-offs increased $3.6 million to $8.9 million, compared to $5.3 million in 2024. The year-over-year increase was primarily due to a $2.3 million partial charge-off of a commercial construction loan reflecting the expected loss on the project, along with $2.1 million in increased net charge-offs in indirect home improvement loans. These increases were partially offset by decreases in charge-offs of C&I loans of $551,000 and marine loans of $292,000. Management attributes the increase in net charge-offs over the year primarily to economic volatility, as well as a single commercial construction charge-off driven by project-specific factors. Management recorded an additional $1.0 million in credit provision on the same project for the three months ended December 31, 2025.

Total noninterest income increased $1.8 million to $6.4 million, for the three months ended December 31, 2025, from $4.6 million for the three months ended December 31, 2024. The increase was primarily due to mortality proceeds on bank owned life insurance policies, which contributed $1.0 million, along with other miscellaneous noninterest income. Total noninterest income increased $721,000 to $22.3 million for the year ended December 31, 2025, from $21.6 million for the year ended December 31, 2024. This increase was primarily the result of a $2.4 million increase in other noninterest income, primarily due to the $1.2 million bank owned life insurance mortality income and a $473,000 increase from increases in fair value on retained loans, partially offset by a $900,000 decrease in service charges and fee income, a $277,000 decrease in gain on sale of loans, and a net decrease of $520,000 from no activity in gains on sale of MSRs and investment securities, compared to an $8.4 million net gain on sale of MSRs, partially offset by a $7.8 million loss on sale of investment securities in 2024.

Noninterest expense increased $1.7 million to $26.1 million for the three months ended December 31, 2025, from $24.4 million for the three months ended December 31, 2024. The increase in noninterest expense was primarily the result of a $614,000 change in the fair value of MSRs, from a $583,000 recovery in the prior year quarter to a $31,000 impairment, a $572,000 increase in salaries and benefits, primarily driven by increases in salaries and benefits, and a $505,000 increase in operations expense primarily due to increased Washington State business and occupation tax. Noninterest expense increased $4.4 million, to $102.0 million for the year ended December 31, 2025, from $97.6 million for the year ended December 31, 2024. This increase was primarily due to increases of $2.7 million in salaries and benefits and $1.4 million in operations expense, as well as the aforementioned change in the fair value and related impairment of MSRs between periods.

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 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 it's 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, 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 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 the Company's 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 expressly 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, except as required by law.

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts) (Unaudited)
										Linked		Prior Year
	Dec 31,			Sep 30,			Dec 31,			Quarter		Quarter
ASSETS	2025			2025			2024			% Change		% Change
	Unaudited			Unaudited			Unaudited
Cash and due from banks	$	13,504		$	12,391		$	19,280		9		(30	)
Interest-bearing deposits at other financial institutions		14,715			48,889			12,355		(70	)	19
Total cash and cash equivalents		28,219			61,280			31,635		(54	)	(11	)
Certificates of deposit at other financial institutions		—			—			1,727		—		NM
Securities available-for-sale, at fair value		288,667			311,695			281,175		(7	)	3
Securities held-to-maturity, net		33,224			31,386			8,455		6		293
Loans held for sale, at fair value		43,705			38,579			27,835		13		57
Loans receivable, net		2,623,172			2,599,601			2,501,951		1		5
Accrued interest receivable		14,614			15,122			13,881		(3	)	5
Premises and equipment, net		44,065			32,444			29,756		36		48
Long-lived assets held for sale		3,258			—			—		—		—
Operating lease right-of-use		5,789			6,832			5,378		(15	)	8
Federal Home Loan Bank stock, at cost		7,971			7,975			15,621		—		(49	)
Deferred tax asset, net		6,993			6,767			7,059		3		(1	)
Bank owned life insurance (“BOLI”), net		36,249			38,531			38,528		(6	)	(6	)
MSRs, held at the lower of cost or fair value		8,608			8,506			9,204		1		(6	)
Goodwill		3,592			3,592			3,592		—		—
Core deposit intangible, net		10,518			11,284			13,710		(7	)	(23	)
Other assets		38,203			35,231			39,670		8		(4	)
TOTAL ASSETS	$	3,196,847		$	3,208,825		$	3,029,177		—		6
LIABILITIES
Deposits:
Noninterest-bearing accounts	$	658,123		$	665,852		$	638,158		(1	)	3
Interest-bearing accounts		2,015,519			2,020,640			1,701,260		—		18
Total deposits		2,673,642			2,686,492			2,339,418		—		14
Borrowings		129,305			129,305			307,806		—		(58	)
Subordinated notes:
Principal amount		50,000			50,000			50,000		—		—
Unamortized debt issuance costs		(339	)		(356	)		(406	)	(5	)	(17	)
Total subordinated notes less unamortized debt issuance costs		49,661			49,644			49,594		—		—
Operating lease liability		5,889			6,993			5,556		(16	)	6
Other liabilities		30,656			35,880			31,036		(15	)	(1	)
Total liabilities		2,889,153			2,908,314			2,733,410		(1	)	6
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; 7,507,519 shares issued and outstanding at December 31, 2025, 7,535,330 at September 30, 2025, and 7,833,014 at December 31, 2024		75			75			78		—		(4	)
Additional paid-in capital		43,251			43,907			55,716		(1	)	(22	)
Retained earnings		280,197			273,882			257,113		2		9
Accumulated other comprehensive loss, net of tax		(15,829	)		(17,353	)		(17,140	)	(9	)	(8	)
Total stockholders’ equity		307,694			300,511			295,767		2		4
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,196,847		$	3,208,825		$	3,029,177		—		6

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

	Three Months Ended								Linked		Prior Year
	December 31,		September 30,			December 31,			Quarter		Quarter
INTEREST INCOME	2025		2025			2024			% Change		% Change
Loans receivable, including fees	$	46,876	$	46,664		$	43,654		—		7
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		3,906		4,309			3,320		(9	)	18
Total interest and dividend income		50,782		50,973			46,974		—		8
INTEREST EXPENSE
Deposits		15,228		14,862			13,543		2		12
Borrowings		1,446		1,935			1,831		(25	)	(21	)
Subordinated notes		486		486			486		—		—
Total interest expense		17,160		17,283			15,860		(1	)	8
NET INTEREST INCOME		33,622		33,690			31,114		—		8
PROVISION FOR CREDIT LOSSES		3,624		2,309			1,522		57		138
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		29,998		31,381			29,592		(4	)	1
NONINTEREST INCOME
Service charges and fee income		2,233		2,326			2,513		(4	)	(11	)
Gain on sale of loans		2,169		2,439			1,733		(11	)	25
Earnings on cash surrender value of BOLI		261		269			256		(3	)	2
Other noninterest income		1,724		560			108		208		1,496
Total noninterest income		6,387		5,594			4,610		14		39
NONINTEREST EXPENSE
Salaries and benefits		14,744		14,415			14,172		2		4
Operations		3,680		3,974			3,175		(7	)	16
Occupancy		1,889		1,744			1,821		8		4
Data processing		1,847		1,784			2,252		4		(18	)
Loan costs		905		746			781		21		16
Professional and board fees		1,213		1,093			1,038		11		17
FDIC insurance		626		592			490		6		28
Marketing and advertising		372		259			329		44		13
Amortization of core deposit intangible		766		787			876		(3	)	(13	)
Impairment (recovery) of servicing rights		31		(6	)		(583	)	(617	)	(105	)
Total noninterest expense		26,073		25,388			24,351		3		7
INCOME BEFORE PROVISION FOR INCOME TAXES		10,312		11,587			9,851		(11	)	5
PROVISION FOR INCOME TAXES		1,892		2,410			2,469		(21	)	(23	)
NET INCOME	$	8,420	$	9,177		$	7,382		(8	)	14
Basic earnings per share	$	1.12	$	1.20		$	0.94		(7	)	19
Diluted earnings per share	$	1.10	$	1.18		$	0.92		(7	)	20

FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts) (Unaudited)
						Year
	Year Ended December 31,					Over Year
INTEREST INCOME	2025		2024			% Change
Loans receivable, including fees	$	181,881	$	170,857		6
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions		15,365		13,980		10
Total interest and dividend income		197,246		184,837		7
INTEREST EXPENSE
Deposits		57,669		53,163		8
Borrowings		7,229		6,627		9
Subordinated note		1,942		1,942		—
Total interest expense		66,840		61,732		8
NET INTEREST INCOME		130,406		123,105		6
PROVISION FOR CREDIT LOSSES		9,546		5,511		73
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES		120,860		117,594		3
NONINTEREST INCOME
Service charges and fee income		9,126		10,026		(9	)
Gain on sale of loans		8,280		8,557		(3	)
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		1,035		990		5
Other noninterest income		3,836		1,463		162
Total noninterest income		22,277		21,556		3
NONINTEREST EXPENSE
Salaries and benefits		57,781		55,092		5
Operations		14,923		13,529		10
Occupancy		7,129		6,857		4
Data processing		7,812		8,424		(7	)
Loan costs		2,918		2,685		9
Professional and board fees		4,648		4,072		14
FDIC insurance		2,310		2,005		15
Marketing and advertising		1,250		1,310		(5	)
Amortization of core deposit intangible		3,192		3,633		(12	)
Impairment (recovery) of MSRs		54		(38	)	(242	)
Total noninterest expense		102,017		97,569		5
INCOME BEFORE PROVISION FOR INCOME TAXES		41,120		41,581		(1	)
PROVISION FOR INCOME TAXES		7,774		6,557		19
NET INCOME	$	33,346	$	35,024		(5	)
Basic earnings per share	$	4.35	$	4.48		(3	)
Diluted earnings per share	$	4.29	$	4.36		(2	)

KEY FINANCIAL RATIOS AND DATA (Unaudited)

	For the Three Months Ended
	December 31,		September 30,		December 31,
PERFORMANCE RATIOS:	2025		2025		2024
Return on assets (ratio of net income to average total assets) ⁽¹⁾	1.04	%	1.14	%	0.98	%
Return on equity (ratio of net income to average total stockholders' equity) ⁽¹⁾	10.78		11.97		9.88
Yield on average interest-earning assets ⁽¹⁾	6.56		6.61		6.51
Average total cost of funds ⁽¹⁾	2.38		2.41		2.38
Interest rate spread information – average during period	4.18		4.20		4.13
Net interest margin ⁽¹⁾	4.35		4.37		4.31
Operating expense to average total assets ⁽¹⁾	3.23		3.16		3.24
Average interest-earning assets to average interest-bearing liabilities ⁽¹⁾	140.03		140.80		143.27
Efficiency ratio ⁽²⁾	65.13		64.63		68.16
Common equity ratio (ratio of stockholders' equity to total assets)	9.62		9.37		9.76
Tangible common equity ratio ⁽³⁾	9.22		8.94		9.25

	For the Year Ended
	December 31,		December 31,
PERFORMANCE RATIOS:	2025		2024
Return on assets (ratio of net income to average total assets)	1.06	%	1.18	%
Return on equity (ratio of net income to average total stockholders' equity)	10.96		12.22
Yield on average interest-earning assets	6.56		6.46
Average total cost of funds	2.39		2.43
Interest rate spread information – average during period	4.16		4.03
Net interest margin	4.33		4.30
Operating expense to average total assets	3.25		3.29
Average interest-earning assets to average interest-bearing liabilities	141.15		143.92
Efficiency ratio ⁽²⁾	66.81		67.45

	December 31,		September 30,		December 31,
ASSET QUALITY RATIOS AND DATA:	2025		2025		2024
Nonperforming assets to total assets at end of period ⁽⁴⁾	0.59	%	0.57	%	0.45	%
Nonperforming loans to total gross loans (excluding loans HFS) ⁽⁵⁾	0.71		0.70		0.54
ACL – loans to nonperforming loans ⁽⁵⁾	170.59		163.77		234.55
ACL – loans to total gross loans (excluding loans HFS)	1.20		1.14		1.26

	At or For the Three Months Ended
	December 31,			September 30,			December 31,
PER COMMON SHARE DATA:	2025			2025			2024
Basic earnings per share	$	1.12		$	1.20		$	0.94
Diluted earnings per share	$	1.10		$	1.18		$	0.92
Weighted average basic shares outstanding		7,414,419			7,488,139			7,723,250
Weighted average diluted shares outstanding		7,529,471			7,623,243			7,897,099
Common shares outstanding at end of period		7,404,548	⁽⁶⁾		7,432,359	⁽⁷⁾		7,729,951	⁽⁸⁾
Book value per share using common shares outstanding	$	41.55		$	40.43		$	38.26
Tangible book value per share using common shares outstanding⁽⁹⁾	$	39.65		$	38.43		$	36.02

____________________________

(1)	Annualized.
(2)	Total noninterest expense as a percentage of net interest income and total noninterest income.
(3)	Tangible common equity ratio excludes intangible assets. This ratio represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” below.
(4)	Nonperforming assets consist of nonperforming loans (which include nonaccruing loans and accruing loans 90 days or more 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 7,507,519 at December 31, 2025, less 102,971 unvested restricted stock shares.
(7)	Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares.
(8)	Common shares were calculated using shares outstanding of 7,833,014 at December 31, 2024, less 103,063 unvested restricted stock shares.
(9)	Tangible book value per share using outstanding common shares excludes intangible assets. This ratio represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” below.

(Dollars in thousands)	For the Three Months Ended December 31,				For the Year Ended December 31,				QTR Over QTR			YTD Over YTD
Average Balances	2025		2024		2025		2024		$ Change			$ Change
Assets
Loans receivable, net ⁽¹⁾	$	2,677,230	$	2,533,664	$	2,625,703	$	2,511,553	$	143,566		$	114,150
Investment securities - taxable		275,947		196,058		269,747		201,852		79,889			67,895
Investment securities - nontaxable		78,835		77,925		78,499		89,332		910			(10,833	)
Interest-bearing deposits and certificates of deposit at other financial institutions		29,045		53,286		24,954		50,741		(24,241	)		(25,787	)
FHLB stock, at cost		7,984		10,300		9,687		7,579		(2,316	)		2,108
Total interest-earning assets		3,069,041		2,871,233		3,008,590		2,861,057		197,808			147,533
Noninterest-earning assets		132,903		119,478		126,083		103,474		13,425			22,609
Total assets	$	3,201,944	$	2,990,711	$	3,134,673	$	2,964,531	$	211,233		$	170,142
Liabilities
Interest-bearing deposit accounts	$	2,007,487	$	1,772,887	$	1,912,139	$	1,784,443	$	234,600		$	127,696
Borrowings		134,637		181,599		169,788		153,926		(46,962	)		15,862
Subordinated notes		49,650		49,584		49,625		49,559		66			66
Total interest-bearing liabilities		2,191,774		2,004,070		2,131,552		1,987,928		187,704			143,624
Noninterest-bearing deposit accounts		663,413		652,564		663,505		649,405		10,849			14,100
Other noninterest-bearing liabilities		36,723		36,722		35,494		40,648		1			(5,154	)
Total liabilities	$	2,891,910	$	2,693,356	$	2,830,551	$	2,677,981	$	198,554		$	152,570

____________________________

(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)	December 31,				September 30,				December 31,
Tangible Book Value Per Share:	2025				2025				2024
Stockholders' equity (GAAP)	$	307,694			$	300,511			$	295,767
Less: goodwill and core deposit intangible, net		(14,110	)			(14,876	)			(17,302	)
Tangible common stockholders' equity (non-GAAP)	$	293,584			$	285,635			$	278,465

Common shares outstanding at end of period		7,404,548	⁽¹⁾			7,432,359	⁽²⁾			7,729,951	⁽³⁾

Book value per share (GAAP)	$	41.55			$	40.43			$	38.26
Tangible book value per share (non-GAAP)	$	39.65			$	38.43			$	36.02

Tangible Common Equity Ratio:
Total assets (GAAP)	$	3,196,847			$	3,208,825			$	3,029,177
Less: goodwill and core deposit intangible assets		(14,110	)			(14,876	)			(17,302	)
Tangible assets (non-GAAP)	$	3,182,737			$	3,193,949			$	3,011,875

Common equity ratio (GAAP)		9.62		%		9.37		%		9.76		%
Tangible common equity ratio (non-GAAP)		9.22				8.94				9.25

_______________________

(1)	Common shares were calculated using shares outstanding of 7,507,519 at December 31, 2025, less 102,971 unvested restricted stock shares.
(2)	Common shares were calculated using shares outstanding of 7,535,330 at September 30, 2025, less 102,971 unvested restricted stock shares.
(3)	Common shares were calculated using shares outstanding of 7,833,014 at December 31, 2024, less 103,063 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

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