FS Bancorp, Inc. Reports Second Quarter Net Income of $7.7 Million or $0.99 Per Diluted Share and Declares 50th Consecutive Quarterly Cash Dividend in Addition to a Special Dividend

MOUNTLAKE TERRACE, Wash., July 22, 2025 (GLOBE NEWSWIRE) -- FS Bancorp, Inc. (NASDAQ:FSBW) (the "Company"), the holding company for 1st Security Bank of Washington (the "Bank") today reported 2025 second quarter net income of $7.7 million, or $0.99 per diluted share, compared to $9.0 million, or $1.13 per diluted share, for the comparable quarter one year ago. For the six months ended June 30, 2025, net income was $15.7 million, or $1.99 per diluted share, compared to net income of $17.4 million, or $2.20 per diluted share, for the comparable six-month period in 2024.

"We are proud of the balance sheet growth this quarter driven by solid loan demand. Additionally, our share repurchase activity reflects our continued confidence and commitment to delivering long-term value to our shareholders," stated Phillip Whittington, CFO.

"We are pleased to announce that our Board of Directors has approved our 50th consecutive quarterly cash dividend of $0.28 per common share, demonstrating our continued commitment to delivering value to our shareholders. In recognition of this milestone, the Board also approved a special dividend of $0.22 per common share. Both dividends will be paid on August 21, 2025, to shareholders of record as of August 7, 2025," noted Matthew Mullet, President.

2025 Second Quarter Highlights

• Net income was $7.7 million for the second quarter of 2025, compared to $8.0 million for the previous quarter, and $9.0 million for the comparable quarter one year ago;
• Total deposits decreased $61.8 million, or 2.4%, to $2.55 billion at June 30, 2025, primarily due to a decrease of $59.1 million in brokered deposits, compared to $2.62 billion at March 31, 2025, and increased $170.6 million, or 7.2%, from $2.38 billion at June 30, 2024.  Noninterest-bearing deposits were $654.1 million at June 30, 2025, $676.7 million at March 31, 2025, and $623.3 million at June 30, 2024;
• Borrowings increased $165.5 million, or 240.5% to $234.3 million at June 30, 2025, compared to $68.8 million at March 31, 2025, and increased $52.4 million, or 28.8%, from $181.9 million at June 30, 2024;
• Loans receivable, net increased $81.2 million, or 3.2%, to $2.58 billion at June 30, 2025, compared to $2.50 billion at March 31, 2025, and increased $125.1 million, or 5.1%, from $2.46 billion at June 30, 2024;
• Consumer loans were $606.3 million at June 30, 2025, a decrease of $2.6 million, or 0.4%, from $608.9 million in the previous quarter, and a decrease of $35.4 million, or 5.5%, from $641.7 million in the comparable quarter one year ago. During the three months ended June 30, 2025, consumer loan originations included 82.5% of home improvement loans originated with a Fair Isaac Corporation ("FICO") score above 720;
• Repurchased 132,282 shares of the Company's common stock in the second quarter of 2025 at an average price of $38.92 per share with $725,000 remaining for future purchases under the existing share repurchase plan at June 30, 2025. In addition, as previously announced on July 9, 2025, the Board approved a new share repurchase plan authorizing the repurchase of up to $5.0 million in shares of the Company's outstanding common stock;
• Book value per share increased $0.43 to $39.55 at June 30, 2025, compared to $39.12 at March 31, 2025, and increased $2.40 from $37.15 at June 30, 2024.  Tangible book value per share (non-GAAP financial measure) increased $0.50 to $37.46 at June 30, 2025, compared to $36.96 at March 31, 2025, and increased $2.80 from $34.66 at June 30, 2024. See, "Non-GAAP Financial Measures;"
• Segment reporting in the second quarter of 2025 reflected net income of $7.4 million for the Commercial and Consumer Banking segment and $351,000 for the Home Lending segment, compared to net income of $7.8 million and $242,000 in the prior quarter, and net income of $8.0 million and $1.0 million in the second quarter of 2024, respectively; and
• Regulatory capital ratios at the Bank were 14.1% for total risk-based capital and 11.2% for Tier 1 leverage capital at June 30, 2025, compared to 14.4% for total risk-based capital and 11.3% for Tier 1 leverage capital at March 31, 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 six months ended June 30, 2025 and 2024 (dollars in thousands):

		At or For the Three Months Ended June 30, 2025
Condensed income statement:		Commercial and Consumer Banking				Home Lending				Total
Net interest income(1)		$	29,179			$	2,933			$	32,112
Provision for credit losses			(1,849	)			(172	)			(2,021	)
Noninterest income(2)			2,297				2,873				5,170
Noninterest expense(3)			(20,313	)			(5,189	)			(25,502	)
Income before provision for income taxes			9,314				445				9,759
Provision for income taxes			(1,937	)			(94	)			(2,031	)
Net income		$	7,377			$	351			$	7,728
Total average assets for period ended		$	2,466,917			$	649,443			$	3,116,360
Full-time employees ("FTEs")			452				115				567

		At or Three Months Ended June 30, 2024
Condensed income statement:		Commercial and Consumer Banking				Home Lending				Total
Net interest income(1)		$	28,051			$	2,350			$	30,401
(Provision) recovery for credit losses			(1,214	)			137				(1,077	)
Noninterest income(2)			2,269				3,599				5,868
Noninterest expense(3)			(19,043	)			(4,814	)			(23,857	)
Income before provision for income taxes			10,063				1,272				11,335
Provision for income taxes			(2,113	)			(263	)			(2,376	)
Net income		$	7,950			$	1,009			$	8,959
Total average assets for period ended		$	2,359,741			$	588,090			$	2,947,831
FTEs			450				121				571

		At or For the Six Months Ended June 30, 2025
Condensed income statement:		Commercial and Consumer Banking				Home Lending				Total
Net interest income(1)		$	57,586			$	5,507			$	63,093
Provision for credit losses			(3,170	)			(443	)			(3,613	)
Noninterest income(2)			4,542				5,754				10,296
Noninterest expense(3)			(40,489	)			(10,067	)			(50,556	)
Income before provision for income taxes			18,469				751				19,220
Provision for income taxes			(3,314	)			(157	)			(3,471	)
Net income		$	15,155			$	594			$	15,749
Total average assets for period ended		$	2,440,654			$	634,013			$	3,074,667
FTEs			452				115				567

		At or For the Six Months Ended June 30, 2024
Condensed income statement:		Commercial and Consumer Banking				Home Lending				Total
Net interest income(1)		$	56,137			$	4,610			$	60,747
Provision for credit losses			(2,465	)			(11	)			(2,476	)
Noninterest income(2)			4,662				6,317				10,979
Noninterest expense(3)			(38,051	)			(9,335	)			(47,386	)
Income before provision for income taxes			20,283				1,581				21,864
Provision for income taxes			(4,182	)			(326	)			(4,508	)
Net income		$	16,101			$	1,255			$	17,356
Total average assets for period ended		$	2,380,803			$	572,386			$	2,953,189
FTEs			450				121				571

__________________________

(1)		Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets.
(2)		Noninterest income includes activity from certain residential mortgage loans that were initially originated for sale and measured at fair value and subsequently transferred to loans held for investment. Gains and losses from changes in fair value for these loans are reported in earnings as a component of noninterest income. For the three and six months ended June 30, 2025, the Company recorded a net increase in fair value of $3,000 and $266,000, respectively, compared to a net increase in fair value of $184,000 and $186,000, respectively for the three and six months ended June 30, 2024. As of June 30, 2025 and 2024, there were $13.2 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 six months ended June 30, 2025 and 2024, the Home Lending segment included allocated overhead expenses of $1.8 million and $3.7 million, compared to $1.5 million and $3.0 million, 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)		June 30,				March 31,				June 30,				Change								Quarter Change
		2025				2025				2024				$				%				$				%
Cash and due from banks		$	15,168			$	18,657			$	20,005			$	(3,489	)			(19	)%		$	(4,837	)			(24	)%
Interest-bearing deposits at other financial institutions			18,027				44,084				13,006				(26,057	)			(59	)			5,021				39
Total cash and cash equivalents			33,195				62,741				33,011				(29,546	)			(47	)			184				1
Certificates of deposit at other financial institutions			248				1,234				12,707				(986	)			(80	)			(12,459	)			(98	)
Securities available-for-sale, at fair value			302,692				291,133				221,182				11,559				4				81,510				37
Securities held-to-maturity, net			31,562				10,434				8,455				21,128				202				23,107				273
Loans held for sale, at fair value			53,630				31,038				53,811				22,592				73				(181	)			—
Loans receivable, net			2,582,272				2,501,117				2,457,184				81,155				3				125,088				5
Accrued interest receivable			14,270				14,406				13,792				(136	)			(1	)			478				3
Premises and equipment, net			30,098				29,451				29,999				647				2				99				—
Operating lease right-of-use			7,969				4,979				5,784				2,990				60				2,185				38
Federal Home Loan Bank stock, at cost			11,579				5,256				10,322				6,323				120				1,257				12
Deferred tax asset, net			7,782				7,009				4,590				773				11				3,192				70
Bank owned life insurance ("BOLI"), net			38,262				38,778				38,201				(516	)			(1	)			61				—
MSRs, held at the lower of cost or fair value			8,652				8,926				9,352				(274	)			(3	)			(700	)			(7	)
Goodwill			3,592				3,592				3,592				—				—				—				—
Core deposit intangible, net			12,071				12,879				15,483				(808	)			(6	)			(3,412	)			(22	)
Other assets			38,139				43,105				23,912				(4,966	)			(12	)			14,227				59
TOTAL ASSETS		$	3,176,013			$	3,066,078			$	2,941,377			$	109,935				4	%		$	234,636				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		June 30, 2025								March 31, 2025								June 30, 2024								$				$
("CRE") LOANS		Amount				Percent				Amount				Percent				Amount				Percent				Change				Change
CRE owner occupied		$	180,250				6.8	%		$	164,911				6.5	%		$	177,723				7.1	%		$	15,339			$	2,527
CRE non-owner occupied			171,979				6.6				174,188				6.9				181,681				7.3				(2,209	)			(9,702	)
Commercial and speculative construction and development			300,723				11.5				288,978				11.4				220,793				8.9				11,745				79,930
Multi-family			263,185				10.1				244,940				9.7				239,675				9.6				18,245				23,510
Total CRE loans			916,137				35.0				873,017				34.5				819,872				32.9				43,120				96,265
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)			639,881				24.4				637,299				25.2				588,966				23.7				2,582				50,915
Home equity			85,613				3.3				73,846				2.9				73,749				3.0				11,767				11,864
Residential custom construction			54,024				2.1				48,810				1.9				53,416				2.1				5,214				608
Total residential real estate loans			779,518				29.8				759,955				30.0				716,131				28.8				19,563				63,387
CONSUMER LOANS
Indirect home improvement			530,375				20.3				532,038				21.0				563,621				22.6				(1,663	)			(33,246	)
Marine			72,765				2.8				73,737				2.9				74,627				3.0				(972	)			(1,862	)
Other consumer			3,151				0.1				3,118				0.1				3,440				0.1				33				(289	)
Total consumer loans			606,291				23.2				608,893				24.0				641,688				25.7				(2,602	)			(35,397	)
COMMERCIAL BUSINESS LOANS
Commercial and industrial ("C&I")			294,563				11.3				274,956				10.9				285,183				11.6				19,607				9,380
Warehouse lending			17,952				0.7				15,949				0.6				25,548				1.0				2,003				(7,596	)
Total commercial business loans			312,515				12.0				290,905				11.5				310,731				12.6				21,610				1,784
Total loans receivable, gross			2,614,461				100.0	%			2,532,770				100.0	%			2,488,422				100.0	%			81,691				126,039
Allowance for credit losses on loans			(32,189	)							(31,653	)							(31,238	)							(536	)			(951	)
Total loans receivable, net		$	2,582,272							$	2,501,117							$	2,457,184							$	81,155			$	125,088

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

(Dollars in thousands)		June 30, 2025				March 31, 2025				June 30, 2024
CRE by Type:		Amount				Amount				Amount
CRE non-owner occupied:
Office		$	39,141			$	39,406			$	41,380
Retail			38,652				35,520				37,507
Hospitality/restaurant			26,489				27,377				28,314
Self-storage			19,075				19,092				19,141
Mixed use			18,387				18,868				18,062
Industrial			14,444				15,033				17,163
Senior housing/assisted living			7,448				7,506				7,675
Other			3,670				6,579				6,847
Land			2,206				2,314				3,021
Education/worship			2,467				2,493				2,571
Total CRE non-owner occupied			171,979				174,188				181,681
CRE owner occupied:
Industrial			77,419				66,618				63,970
Office			40,156				40,447				41,978
Retail			19,470				20,535				20,885
Other			9,483				8,529				8,354
Hospitality/restaurant			7,230				7,306				10,800
Automobile related			7,215				7,266				8,200
Mixed use			5,548				5,579				5,680
Agriculture			4,652				3,990				3,639
Education/worship			4,630				4,641				4,610
Car wash			4,447				—				9,607
Total CRE owner occupied			180,250				164,911				177,723
Total		$	352,229			$	339,099			$	359,404

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

																													Current
(Dollars in																													Weighted
thousands)		For the Quarter Ended																											Average
CRE by type:		Sep 30, 2025			Dec 31, 2025			Mar 31, 2026			Jun 30, 2026			Sep 30, 2026			Dec 31, 2026			Mar 31, 2027			Jun 30, 2027			Total			Rate
Agriculture		$	716		$	314		$	178		$	265		$	287		$	—		$	—		$	—		$	1,760		6.28	%
Apartment			—			13,679			1,128			13,788			9,747			7,062			4,117			—			49,521		4.96	%
Hotel / hospitality			2,393			—			113			1,243			—			—			103			—			3,852		5.26	%
Industrial			—			10,002			976			586			1,578			—			13,412			263			26,817		5.12	%
Mixed use			241			—			7,101			—			—			379			—			—			7,721		8.14	%
Office			15,015			6,055			515			1,629			554			7,695			2,857			1,213			35,533		5.50	%
Other			1,921			240			884			—			—			1,485			—			3,515			8,045		4.80	%
Retail			1,020			—			421			3,448			—			3,399			3,027			2,801			14,116		4.26	%
Education/worship			1,314			—			—			—			2,467			—			—			—			3,781		5.18	%
Senior housing and assisted living			—			—			2,142			—			—			—			—			1,372			3,514		4.76	%
Total		$	22,620		$	30,290		$	13,458		$	20,959		$	14,633		$	20,020		$	23,516		$	9,164		$	154,660		5.22	%

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

(Dollars in thousands)		June 30, 2025								March 31, 2025								June 30, 2024
Construction Types:		Amount				Percent				Amount				Percent				Amount				Percent
Commercial construction – retail		$	8,447				2.4	%		$	8,157				2.4	%		$	8,698				3.2	%
Commercial construction – office			9,083				2.6				6,487				1.9				4,737				1.7
Commercial construction – self storage			16,553				4.7				16,012				4.7				10,000				3.6
Commercial construction – hotel			3,673				1.0				402				0.1				7,807				2.8
Multi-family			23,119				6.5				31,275				9.3				30,960				11.3
Custom construction – single family residential and single family manufactured residential			45,570				12.8				41,143				12.2				46,106				16.8
Custom construction – land, lot and acquisition and development			8,454				2.4				7,667				2.3				7,310				2.7
Speculative residential construction – vertical			200,375				56.5				186,042				55.1				131,294				47.9
Speculative residential construction – land, lot and acquisition and development			39,473				11.1				40,603				12.0				27,297				10.0
Total		$	354,747				100.0	%		$	337,788				100.0	%		$	274,209				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
		June 30, 2025						March 31, 2025						June 30, 2024						$			%		$				%
		Amount			Percent			Amount			Percent			Amount			Percent			Change			Change		Change				Change
Purchase		$	170,854		85.7	%		$	120,719		83.0	%		$	193,715		92.3	%		$	50,135		41.5		$	(22,861	)		(11.8	)%
Refinance			28,470		14.3				24,677		17.0				16,173		7.7				3,793		15.4			12,297			76.0	%
Total		$	199,324		100.0	%		$	145,396		100.0	%		$	209,888		100.0	%		$	53,928		37.1		$	(10,564	)		(5.0	)%

(Dollars in thousands)		For the Six Months Ended June 30,
		2025						2024
		Amount			Percent			Amount			Percent			$ Change				% Change
Purchase		$	290,737		84.3	%		$	329,292		90.5	%		$	(38,555	)		(11.7	)	%
Refinance			53,983		15.7				34,545		9.5				19,438			56.3		%
Total		$	344,720		100.0	%		$	363,837		100.0	%		$	(19,117	)		(5.3	)	%

During the quarter ended June 30, 2025, the Company sold $127.1 million of one-to-four-family loans compared to $91.9 million during the previous quarter and $164.5 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 factors, including the spring homebuying season. 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 decreased to 3.06% for the quarter ended June 30, 2025, compared to 3.26% 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		June 30, 2025								March 31, 2025								June 30, 2024								Quarter				Quarter
Transactional deposits:		Amount				Percent				Amount				Percent				Amount				Percent				$ Change				$ Change
Noninterest-bearing checking		$	643,573				25.2	%		$	659,417				25.2	%		$	613,137				25.7	%		$	(15,844	)		$	30,436
Interest-bearing checking:
Retail deposits			181,240				7.1				171,396				6.6				166,839				7.0				9,844				14,401
Brokered deposits			30,020				1.2				30,073				1.1				—				—				(53	)			30,020
Total interest-bearing checking			211,260				8.3				201,469				7.7				166,839				7.0				9,791				44,421
Escrow accounts related to mortgages serviced(1)			10,496				0.4				17,289				0.7				10,212				0.4				(6,793	)			284
Subtotal			865,329				33.9				878,175				33.6				790,188				33.1				(12,846	)			75,141
Savings and money market:
Savings			159,601				6.3				160,332				6.1				151,398				6.4				(731	)			8,203
Money market:
Retail deposits			350,548				13.6				343,098				13.1				339,946				14.2				7,450				10,602
Brokered deposits			251				0.1				251				—				4,049				0.2				—				(3,798	)
Total money market			350,799				13.7				343,349				13.1				343,995				14.4				7,450				6,804
Subtotal			510,400				20.0				503,681				19.2				495,393				20.8				6,719				15,007
Certificates of deposit:
Retail CDs			891,355				34.9				881,630				33.7				823,866				34.6				9,725				67,489
Nonretail CDs:
Online CDs			3,423				0.1				9,354				0.4				9,354				0.4				(5,931	)			(5,931	)
Public CDs			2,114				0.1				2,440				0.1				2,983				0.1				(326	)			(869	)
Brokered CDs			280,754				11.0				339,871				13.0				261,019				11.0				(59,117	)			19,735
Total nonretail CDs			286,291				11.2				351,665				13.5				273,356				11.5				(65,374	)			12,935
Subtotal			1,177,646				46.1				1,233,295				47.2				1,097,222				46.1				(55,649	)			80,424
Total deposits		$	2,553,375				100.0	%		$	2,615,151				100.0	%		$	2,382,803				100.0	%		$	(61,776	)		$	170,572
Borrowings(2)		$	234,305							$	68,805							$	181,895							$	165,500			$	52,410
Equity		$	297,203							$	298,840							$	284,026							$	(1,637	)		$	13,177
Book value per common share		$	39.55							$	39.12							$	37.15							$	0.43			$	2.40

__________________________

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

At June 30, 2025, the Bank had uninsured deposits of approximately $677.2 million, compared to approximately $679.4 million at March 31, 2025, and $586.6 million at June 30, 2024.  The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank's regulatory reporting requirements.

In reference to the table above, the linked quarter decrease in stockholders' equity at June 30, 2025, compared to March 31, 2025, was primarily due to share repurchases of $5.1 million, cash dividends paid of $2.1 million, and $525,000 in equity award compensation, partially offset by net income of $7.7 million. Stockholders' equity was also impacted by a decline in unrealized fair value on securities available for sale of $1.2 million, net of tax, and fair value and cash flow hedges of $1.6 million, net of tax, reflecting changes in market interest rates during the quarter, resulting in a $2.8 million decrease in accumulated other comprehensive loss, net of tax.

The Bank is considered "well capitalized" under the capital requirement established by the Federal Deposit Insurance Corporation ("FDIC") and the Company exceeded all regulatory capital requirements. At June 30, 2025, capital ratios presented for the Bank and the Company were as follows:

		At June 30, 2025
		Bank			Company
Total risk-based capital (to risk-weighted assets)		14.07	%		14.16	%
Tier 1 leverage capital (to average assets)		11.18	%		9.65	%
CET 1 capital (to risk-weighted assets)		12.82	%		11.07	%

Credit Quality

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

ACL ON LOANS		June 30,				March 31,				June 30,				Linked				Prior Year
(Dollars in thousands)		2025				2025				2024				Quarter				Quarter
		Amount				Amount				Amount				$ Change				$ Change
Beginning ACL balance		$	(31,653	)		$	(31,870	)		$	(31,479	)		$	217			$	(174	)
Provision			(1,715	)			(1,505	)			(1,001	)			(210	)			(714	)
Charge-offs
Indirect			1,555				1,579				825				(24	)			730
Marine			43				20				157				23				(114	)
Other			42				37				33				5				9
Commercial business			—				433				733				(433	)			(733	)
Subtotal			1,640				2,069				1,748				(429	)			(108	)
Recoveries
Indirect			(330	)			(340	)			(307	)			10				(23	)
Marine			(54	)			(3	)			(110	)			(51	)			56
Other			(7	)			(4	)			(4	)			(3	)			(3	)
Commercial business			(70	)			—				(85	)			(70	)			15
Subtotal			(461	)			(347	)			(506	)			(114	)			45
Ending ACL balance		$	(32,189	)		$	(31,653	)		$	(31,238	)		$	(536	)		$	(951	)

NONPERFORMING LOANS		June 30,			March 31,			June 30,			Linked				Prior Year
(Dollars in thousands)		2025			2025			2024			Quarter				Quarter
CRE LOANS		Amount			Amount			Amount			$ Change				$ Change
CRE		$	2,046		$	1,196		$	1,116		$	850			$	930
Commercial and speculative construction and development			9,083			6,487			4,737			2,596				4,346
Total CRE loans			11,129			7,683			5,853			3,446				5,276
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)			1,809			1,134			170			675				1,639
Home equity			251			252			156			(1	)			95
Total residential real estate loans			2,060			1,386			326			674				1,734
CONSUMER LOANS
Indirect home improvement			3,365			2,821			2,319			544				1,046
Marine			567			648			327			(81	)			240
Other consumer			13			1			6			12				7
Total consumer loans			3,945			3,470			2,652			475				1,293
COMMERCIAL BUSINESS LOANS
C&I			1,862			1,932			2,575			(70	)			(713	)
Total nonperforming loans		$	18,996		$	14,471		$	11,406		$	4,525			$	7,590

The increase in nonaccrual loans during the period was partly driven by a single commercial construction loan, which remains in active development. Ongoing construction disbursements on this loan contributed to a $2.6 million increase from the prior quarter and a $4.3 million increase compared to the same period last year. Increases in consumer loan delinquencies also contributed to the overall rise in nonaccrual loans between the periods. 

CRITICIZED LOANS		June 30,			March 31,			June 30,			Linked				Prior Year
(Dollars in thousands)		2025			2025			2024			Quarter				Quarter
CRE LOANS		Amount			Amount			Amount			$ Change				$ Change
CRE		$	2,046		$	2,040		$	3,926		$	6			$	(1,880	)
Commercial and speculative construction and development			9,083			6,487			4,737			2,596				4,346
Total CRE loans			11,129			8,527			8,663			2,602				2,466
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)			4,383			3,728			2,854			655				1,529
Home equity			251			252			156			(1	)			95
Total residential real estate loans			4,634			3,980			3,010			654				1,624
CONSUMER LOANS
Indirect home improvement			3,365			2,821			2,319			544				1,046
Marine			567			649			327			(82	)			240
Other consumer			13			1			6			12				7
Total consumer loans			3,945			3,471			2,652			474				1,293
COMMERCIAL BUSINESS LOANS
C&I			5,220			7,524			9,954			(2,304	)			(4,734	)
Total criticized loans		$	24,928		$	23,502		$	24,279		$	1,426			$	649

Operating Results

Net interest income increased $1.7 million to $32.1 million for the three months ended June 30, 2025, from $30.4 million for the three months ended June 30, 2024, primarily due to an increase in total interest income of $2.8 million, partially offset by an increase in interest expense of $1.1 million. The $2.8 million increase in total interest income was primarily due to an increase of $2.6 million in interest income on loans receivable, including fees, primarily as a result of net loan growth. The $1.1 million increase in total interest expense was primarily the result of higher average balances of deposits and borrowings to fund asset growth.

For the six months ended June 30, 2025, net interest income increased $2.3 million to $63.1 million, from $60.7 million for the six months ended June 30, 2024, with a $4.7 million increase in total interest income, partially offset by a $2.3 million increase in interest expense for the same reasons mentioned above. 

NIM (annualized) increased one basis point to 4.30% for the three months ended June 30, 2025, from 4.29% for the same period in the prior year and increased four basis points from 4.27% to 4.31% for the six months ended June 30, 2025. The change in NIM for the three and six months ended June 30, 2025, compared to the same period in 2024, reflects the increased yields on interest-earning assets, as a result of loan growth and repricing activity. The improvement also reflects a favorable shift in the asset mix and disciplined management of deposit and funding costs. 

The average total cost of funds, including noninterest-bearing checking, increased one basis point to 2.39% for the three months ended June 30, 2025, from 2.38% for the three months ended June 30, 2024. This increase was predominantly due to higher average balances in borrowings. The average cost of funds increased eight basis points to 2.38% for the six months ended June 30, 2025, from 2.30% for the six months ended June 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 six months ended June 30, 2025, the provision for credit losses on loans was $2.0 million and $3.6 million, compared to $1.1 million and $2.5 million for the three and six months ended June 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 June 30, 2025, net charge-offs decreased $63,000 to $1.2 million, compared to the same period the prior year. During the six months ended June 30, 2025, net charge-offs increased $184,000, to $2.9 million, compared to $2.7 million during the six months ended June 30, 2024. The increase was primarily due to a $1.2 million increase in net charge-offs on indirect home improvement loans, partially offset by a $693,000 decrease in net charge-offs on commercial business loans and a $271,000 decrease in net charge-offs on marine loans. Management attributes the increase in net charge-offs for the current six month period to continued volatile economic conditions.

Total noninterest income decreased $698,000 to $5.2 million for the three months ended June 30, 2025, from $5.9 million for the three months ended June 30, 2024. The decrease primarily reflects a $491,000 decrease in gain on sale of loans, primarily due to a decrease of loans available for sale, a $156,000 decrease in service charges and fee income and a $151,000 decrease in gain on sale of investment securities due to no sales activity in the current quarter compared to the same period last year. Total noninterest income decreased $683,000, to $10.3 million, for the six months ended June 30, 2025, from $11.0 million for the six months ended June 30, 2024. This decrease was primarily the result of a $629,000 decrease in gain on sale of loans, a $464,000 decrease in service charges and fee income, and a net decrease of $368,000 from no activity in gain on sales of MSRs and loss on sale of investment securities compared to an $8.2 million net gain on sale of MSRs, offset by the $7.8 million loss on sale of investment securities that occurred in the first half of 2024. These decreases in total noninterest income were partially offset by a $755,000 increase in other noninterest income as result of sales of nonmarketable equity securities at a $312,000 gain, bank owned life insurance proceeds of $195,000, and a $101,000 increase in brokered loans fees.

Total noninterest expense was $25.5 million for the three months ended June 30, 2025, compared to $23.9 million for the three months ended June 30, 2024.  The $1.6 million increase was primarily due to a $710,000 increase in salaries and benefits, primarily due to competitive wage adjustments, a $305,000 increase in operations expense, and a $267,000 increase in professional and board fees.  Total noninterest expense increased $3.2 million to $50.6 million for the six months ended June 30, 2025, compared to $47.4 million for the six months ended June 30, 2024. Increases during the six month period ended June 30, 2025, compared to the same period last year included $1.7 million in salaries and benefits, $742,000 in operations expense, and $531,000 in professional and board fees.

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
		June 30,				March 31,				June 30,				Quarter				Quarter
ASSETS		2025				2025				2024				% Change				% Change
Cash and due from banks		$	15,168			$	18,657			$	20,005				(19	)			(24	)
Interest-bearing deposits at other financial institutions			18,027				44,084				13,006				(59	)			39
Total cash and cash equivalents			33,195				62,741				33,011				(47	)			1
Certificates of deposit at other financial institutions			248				1,234				12,707				(80	)			(98	)
Securities available-for-sale, at fair value			302,692				291,133				221,182				4				37
Securities held-to-maturity, net			31,562				10,434				8,455				202				273
Loans held for sale, at fair value			53,630				31,038				53,811				73				—
Loans receivable, net			2,582,272				2,501,117				2,457,184				3				5
Accrued interest receivable			14,270				14,406				13,792				(1	)			3
Premises and equipment, net			30,098				29,451				29,999				2				—
Operating lease right-of-use			7,969				4,979				5,784				60				38
Federal Home Loan Bank stock, at cost			11,579				5,256				10,322				120				12
Deferred tax asset, net			7,782				7,009				4,590				11				70
Bank owned life insurance ("BOLI"), net			38,262				38,778				38,201				(1	)			—
MSRs, held at the lower of cost or fair value			8,652				8,926				9,352				(3	)			(7	)
Goodwill			3,592				3,592				3,592				—				—
Core deposit intangible, net			12,071				12,879				15,483				(6	)			(22	)
Other assets			38,139				43,105				23,912				(12	)			59
TOTAL ASSETS		$	3,176,013			$	3,066,078			$	2,941,377				4				8
LIABILITIES
Deposits:
Noninterest-bearing accounts		$	654,069			$	676,706			$	623,349				(3	)			5
Interest-bearing accounts			1,899,306				1,938,445				1,759,454				(2	)			8
Total deposits			2,553,375				2,615,151				2,382,803				(2	)			7
Borrowings			234,305				68,805				181,895				241				29
Subordinated notes:
Principal amount			50,000				50,000				50,000				—				—
Unamortized debt issuance costs			(373	)			(389	)			(439	)			(4	)			(15	)
Total subordinated notes less unamortized debt issuance costs			49,627				49,611				49,561				—				—
Operating lease liability			8,138				5,149				5,979				58				36
Other liabilities			33,365				28,522				37,113				17				(10	)
Total liabilities			2,878,810				2,767,238				2,657,351				4				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; 7,618,543 shares issued and outstanding at June 30, 2025, 7,742,907 at March 31, 2025, and 7,742,607 at June 30, 2024			76				77				77				(1	)			(1	)
Additional paid-in capital			48,418				52,806				55,834				(8	)			(13	)
Retained earnings			268,509				262,945				243,651				2				10
Accumulated other comprehensive loss, net of tax			(19,800	)			(16,988	)			(15,536	)			17				27
Total stockholders' equity			297,203				298,840				284,026				(1	)			5
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	3,176,013			$	3,066,078			$	2,941,377				4				8

FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited)
		Three Months Ended												Linked				Prior Year
		June 30,				March 31,				June 30,				Quarter				Quarter
INTEREST INCOME		2025				2025				2024				% Change				% Change
Loans receivable, including fees		$	45,038			$	43,303			$	42,406				4				6
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions			3,665				3,485				3,534				5				4
Total interest and dividend income			48,703				46,788				45,940				4				6
INTEREST EXPENSE
Deposits			14,520				13,058				13,252				11				10
Borrowings			1,585				2,263				1,801				(30	)			(12	)
Subordinated notes			486				485				486				—				—
Total interest expense			16,591				15,806				15,539				5				7
NET INTEREST INCOME			32,112				30,982				30,401				4				6
PROVISION FOR CREDIT LOSSES			2,021				1,592				1,077				27				88
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES			30,091				29,390				29,324				2				3
NONINTEREST INCOME
Service charges and fee income			2,323				2,244				2,479				4				(6	)
Gain on sale of loans			1,972				1,700				2,463				16				(20	)
Gain on sale of investment securities, net			—				—				151				NM				NM
Earnings on cash surrender value of BOLI			254				250				242				2				5
Other noninterest income			621				932				533				(33	)			17
Total noninterest income			5,170				5,126				5,868				1				(12	)
NONINTEREST EXPENSE
Salaries and benefits			14,088				14,533				13,378				(3	)			5
Operations			3,824				3,445				3,519				11				9
Occupancy			1,780				1,717				1,669				4				7
Data processing			2,137				2,045				2,058				4				4
Loan costs			719				548				653				31				10
Professional and board fees			1,155				1,186				888				(3	)			30
FDIC insurance			554				538				450				3				23
Marketing and advertising			398				221				377				80				6
Amortization of core deposit intangible			809				831				919				(3	)			(12	)
Impairment (recovery) of servicing rights			38				(9	)			(54	)			(522	)			(170	)
Total noninterest expense			25,502				25,055				23,857				2				7
INCOME BEFORE PROVISION FOR INCOME TAXES			9,759				9,461				11,335				3				(14	)
PROVISION FOR INCOME TAXES			2,031				1,440				2,376				41				(15	)
NET INCOME		$	7,728			$	8,021			$	8,959				(4	)			(14	)
Basic earnings per share		$	1.00			$	1.02			$	1.15				(2	)			(13	)
Diluted earnings per share		$	0.99			$	1.01			$	1.13				(2	)			(12	)

FS BANCORP, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited)
		Six Months Ended								Year
		June 30,				June 30,				Over Year
INTEREST INCOME		2025				2024				% Change
Loans receivable, including fees		$	88,340			$	83,403				6
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions			7,150				7,417				(4	)
Total interest and dividend income			95,490				90,820				5
INTEREST EXPENSE
Deposits			27,578				26,134				6
Borrowings			3,848				2,968				30
Subordinated note			971				971				—
Total interest expense			32,397				30,073				8
NET INTEREST INCOME			63,093				60,747				4
PROVISION FOR CREDIT LOSSES			3,613				2,476				46
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES			59,480				58,271				2
NONINTEREST INCOME
Service charges and fee income			4,567				5,031				(9	)
Gain on sale of loans			3,672				4,301				(15	)
Gain on sale of MSRs			—				8,215				NM
Loss on sale of investment securities, net			—				(7,847	)			NM
Earnings on cash surrender value of BOLI			505				482				5
Other noninterest income			1,552				797				95
Total noninterest income			10,296				10,979				(6	)
NONINTEREST EXPENSE
Salaries and benefits			28,621				26,935				6
Operations			7,269				6,527				11
Occupancy			3,496				3,374				4
Data processing			4,182				4,016				4
Loan costs			1,267				1,238				2
Professional and board fees			2,342				1,811				29
FDIC insurance			1,092				982				11
Marketing and advertising			619				604				2
Amortization of core deposit intangible			1,639				1,860				(12	)
Impairment of servicing rights			29				39				(26	)
Total noninterest expense			50,556				47,386				7
INCOME BEFORE PROVISION FOR INCOME TAXES			19,220				21,864				(12	)
PROVISION FOR INCOME TAXES			3,471				4,508				(23	)
NET INCOME		$	15,749			$	17,356				(9	)
Basic earnings per share		$	2.02			$	2.23				(9	)
Diluted earnings per share		$	1.99			$	2.20				(10	)

KEY FINANCIAL RATIOS AND DATA (Unaudited)

		At or For the Three Months Ended
		June 30,				March 31,				June 30,
PERFORMANCE RATIOS:		2025				2025				2024
Return on assets (ratio of net income to average total assets)(1)			0.99	%			1.07	%			1.22	%
Return on equity (ratio of net income to average total stockholders' equity)(1)			10.29				10.80				12.72
Yield on average interest-earning assets(1)			6.52				6.53				6.48
Average total cost of funds(1)			2.39				2.38				2.38
Interest rate spread information – average during period			4.13				4.15				4.10
Net interest margin(1)			4.30				4.32				4.29
Operating expense to average total assets(1)			3.28				3.35				3.26
Average interest-earning assets to average interest-bearing liabilities(1)			140.98				142.94				143.64
Efficiency ratio(2)			68.40				69.39				65.78
Common equity ratio (ratio of stockholders' equity to total assets)			9.36				9.75				9.66
Tangible common equity ratio(3)			8.91				9.26				9.07

		For the Six Months Ended
		June 30,				June 30,
PERFORMANCE RATIOS:		2025				2024
Return on assets (ratio of net income to average total assets)			1.03	%			1.18	%
Return on equity (ratio of net income to average total stockholders' equity)			10.55				12.51
Yield on average interest-earning assets			6.52				6.39
Average total cost of funds			2.38				2.30
Interest rate spread information – average during period			4.14				4.09
Net interest margin			4.31				4.27
Operating expense to average total assets			3.32				3.23
Average interest-earning assets to average interest-bearing liabilities			141.93				144.07
Efficiency ratio(2)			68.89				66.07

		June 30,				March 31,				June 30,
ASSET QUALITY RATIOS AND DATA:		2025				2025				2024
Nonperforming assets to total assets at end of period(4)			0.60	%			0.47	%			0.39	%
Nonperforming loans to total gross loans (excluding loans HFS)(5)			0.73				0.57				0.46
Allowance for credit losses – loans to nonperforming loans(5)			168.89				219.08				273.95
Allowance for credit losses – loans to total gross loans (excluding loans HFS)			1.23				1.25				1.26

		At or For the Three Months Ended
		June 30,					March 31,					June 30,
PER COMMON SHARE DATA:		2025					2025					2024
Basic earnings per share		$	1.00				$	1.02				$	1.15
Diluted earnings per share		$	0.99				$	1.01				$	1.13
Weighted average basic shares outstanding			7,580,576					7,695,320					7,688,246
Weighted average diluted shares outstanding			7,698,173					7,805,728					7,796,253
Common shares outstanding at end of period			7,515,480		(6)			7,639,844		(7)			7,644,463		(8)
Book value per share using common shares outstanding		$	39.55				$	39.12				$	37.15
Tangible book value per share using common shares outstanding(9)		$	37.46				$	36.96				$	34.66

__________________________

(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 7,618,543 at June 30, 2025, less 103,063 unvested restricted stock shares.
(7)		Common shares were calculated using shares outstanding of 7,742,907 at March 31, 2025, less 103,063 unvested restricted stock shares.
(8)		Common shares were calculated using shares outstanding of 7,742,607 at June 30, 2024, less 98,144 unvested restricted stock shares.
(9)		Tangible book value per share using outstanding common shares excludes intangible assets. This ratio represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" below.

(Dollars in thousands)		For the Three Months Ended June 30,								For the Six Months Ended June 30,								QTR Over QTR				YTD Over YTD
Average Balances		2025				2024				2025				2024				$ Change				$ Change
Assets
Loans receivable, net(1)		$	2,612,959			$	2,511,326			$	2,586,598			$	2,487,964			$	101,633			$	98,634
Securities available-for-sale, at amortized cost			332,705				283,422				321,622				307,417				49,283				14,205
Securities held-to-maturity			21,401				8,500				15,063				8,500				12,901				6,563
Interest-bearing deposits and certificates of deposit at other financial institutions			8,775				41,613				10,353				50,563				(32,838	)			(40,210	)
FHLB stock, at cost			19,502				7,040				17,840				4,607				12,462				13,233
Total interest-earning assets			2,995,342				2,851,901				2,951,476				2,859,051				143,441				92,425
Noninterest-earning assets			121,018				95,930				123,191				94,138				25,088				29,053
Total assets		$	3,116,360			$	2,947,831			$	3,074,667			$	2,953,189			$	168,529			$	121,478
Liabilities
Interest-bearing deposit accounts		$	1,924,586			$	1,794,966			$	1,845,534			$	1,813,865			$	129,620			$	31,669
Borrowings			150,492				140,964				184,377				121,057				9,528				63,320
Subordinated notes			49,617				49,550				49,608				49,542				67				66
Total interest-bearing liabilities			2,124,695				1,985,480				2,079,519				1,984,464				139,215				95,055
Noninterest-bearing deposit accounts			657,820				637,345				660,805				647,214				20,475				13,591
Other noninterest-bearing liabilities			32,700				41,785				33,218				42,516				(9,085	)			(9,298	)
Total liabilities		$	2,815,215			$	2,664,610			$	2,773,542			$	2,674,194			$	150,605			$	99,348

__________________________

(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)		June 30,				March 31,				June 30,
Tangible Book Value Per Share:		2025				2025				2024
Stockholders' equity (GAAP)		$	297,203			$	298,840			$	284,026
Less: goodwill and core deposit intangible, net			(15,663	)			(16,471	)			(19,075	)
Tangible common stockholders' equity (non-GAAP)		$	281,540			$	282,369			$	264,951
Common shares outstanding at end of period			7,515,480		(1)		7,639,844		(2)		7,644,463		(3)
Book value per share (GAAP)		$	39.55			$	39.12			$	37.15
Tangible book value per share (non-GAAP)		$	37.46			$	36.96			$	34.66
Tangible Common Equity Ratio:
Total assets (GAAP)		$	3,176,013			$	3,066,078			$	2,941,377
Less: goodwill and core deposit intangible assets			(15,663	)			(16,471	)			(19,075	)
Tangible assets (non-GAAP)		$	3,160,350			$	3,049,607			$	2,922,302
Common equity ratio (GAAP)			9.36		%		9.75		%		9.66		%
Tangible common equity ratio (non-GAAP)			8.91				9.26				9.07

_________________________

(1)		Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, less 103,063 unvested restricted stock shares.
(2)		Common shares were calculated using shares outstanding of 7,742,907 at March 31, 2025, less 103,063 unvested restricted stock shares.
(3)		Common shares were calculated using shares outstanding of 7,742,607 at June 30, 2024, less 98,144 unvested restricted stock shares.

Contacts:

Joseph C. Adams,

Chief Executive Officer

Matthew D. Mullet,

President

Phillip D. Whittington,

Chief Financial Officer

(425) 771-5299

www.FSBWA.com