Form 8-K
8-K — FS Bancorp, Inc.
Accession: 0001437749-26-023959
Filed: 2026-07-21
Period: 2026-07-21
CIK: 0001530249
SIC: 6036 (SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED)
Item: Results of Operations and Financial Condition
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — fsbw20260514_8k.htm (Primary)
EX-99.1 — EXHIBIT 99.1 (ex_963242.htm)
GRAPHIC (logo.jpg)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K — FORM 8-K
8-K (Primary)
Filename: fsbw20260514_8k.htm · Sequence: 1
fsbw20260514_8k.htm
false
0001530249
0001530249
2026-07-21
2026-07-21
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 2026
FS BANCORP, INC.
(Exact name of registrant as specified in its charter)
Washington
001-35589
45-4585178
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
6920 220th Street SW
Mountlake Terrace, Washington
98043
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (425) 771-5299
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share
FSBW
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On July 21, 2026, FS Bancorp, Inc. (the Company), the parent corporation of 1st Security Bank of Washington, issued its earnings release for the quarter ended June 30, 2026. A copy of the press release is furnished with this Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Item 8.01 Other Events
On July 21, 2026, the Company announced its Board of Directors declared a regular quarterly cash dividend on Company common stock of $0.29 per share, payable on August 21, 2026, to stockholders of record as of the close of business on August 7, 2026.
Item 9.01 Exhibits
(d)
Exhibits
99.1
Press release of FS Bancorp, Inc. dated July 21, 2026
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 21, 2026
FS BANCORP, INC.
/s/Phillip D. Whittington
Phillip D. Whittington
Chief Financial Officer
EX-99.1 — EXHIBIT 99.1
EX-99.1
Filename: ex_963242.htm · Sequence: 2
ex_963242.htm
Exhibit 99.1
FS Bancorp, Inc. Reports Second Quarter Net Income of $7.9 Million or $1.04 Per Diluted Share and Declares 54th Consecutive Quarterly Cash Dividend
MOUNTLAKE TERRACE, WA – July 21, 2026 – FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2026 second quarter net income of $7.9 million, or $1.04 per diluted share, compared to $7.8 million, or $1.02 per diluted share, for the prior quarter, and $7.7 million, or $0.99 per diluted share, for the comparable quarter one year ago. For the six months ended June 30, 2026, net income was $15.8 million, or $2.07 per diluted share, compared to net income of $15.7 million, or $1.99 per diluted share, for the comparable six-month period in 2025.
“From the announcement of our proposed merger with Pacific West Bank in the first quarter of 2026, our teams have been diligently working toward a successful integration, while concurrently contributing to our financial success this quarter,” stated Matthew Mullet, President and CEO of FS Bancorp, Inc. “We are also pleased to announce that our Board of Directors has approved our 54th consecutive quarterly cash dividend of $0.29 per common share, demonstrating our commitment to returning capital to long-term shareholders. The cash dividend will be paid on August 21, 2026, to shareholders of record as of August 7, 2026,” concluded Mullet.
2026 Second Quarter Highlights
●
Net income totaled $7.9 million for the second quarter of 2026, compared to $7.8 million for the previous quarter, and $7.7 million for the comparable quarter one year ago;
●
Total deposits decreased $188.7 million, or 7.2%, to $2.45 billion at June 30, 2026, compared to $2.63 billion at March 31, 2026. This decrease was primarily due to a $201.1 million decrease in brokered deposits, with an offsetting increase of $12.1 million in retail deposits. Compared to June 30, 2025, total deposits decreased $104.5 million, or 4.1%. The cost of deposits decreased to 2.18% for the quarter ended June 30, 2026, from 2.24% for the quarter ended March 31, 2026, primarily due to the Company's funding strategy of shifting from higher cost brokered deposits to borrowings, while maintaining sufficient liquidity;
●
Loans receivable, net increased $4.9 million, to $2.63 billion at June 30, 2026, compared to $2.62 billion at March 31, 2026, and increased $46.7 million, from $2.58 billion at June 30, 2025. The year-over-year loan growth was primarily due to an increase of $88.9 million in the commercial real estate portfolio, partially offset by heightened payoff activity in the consumer loan portfolio which decreased $33.1 million during the same period;
●
Consumer loans were $573.2 million at June 30, 2026, a decrease of $10.3 million, or 1.8%, from $583.5 million in the previous quarter, and a decrease of $33.1 million, or 5.5%, from $606.3 million in the comparable quarter one year ago. During the three months ended June 30, 2026, consumer loan originations included 87.3% of indirect home improvement loans originated with a Fair Isaac Corporation (“FICO”) score above 720;
●
The Commercial and Consumer Banking segment reported net income of $6.8 million for the second quarter of 2026, compared to $6.7 million for the prior quarter and $7.4 million for the second quarter of 2025. The Home Lending segment reported net income of $1.1 million for both the first and second quarters of 2026, compared to $352,000 for the second quarter of 2025;
●
Repurchased 87,000 shares of the Company's common stock for $3.6 million in the second quarter of 2026, at an average price of $41.81 per share;
FS Bancorp Q2 Earnings
July 21, 2026
Page 2
●
Book value per share increased $1.15, or 2.7%, to $43.57 at June 30, 2026, compared to $42.42 at March 31, 2026, and increased $4.02, or 10.2%, from $39.55 at June 30, 2025. Tangible book value per share (non-GAAP financial measure) increased $1.23 to $41.84 at June 30, 2026, compared to $40.61 at March 31, 2026, and increased $4.38 from $37.46 at June 30, 2025. See, “Non-GAAP Financial Measures;” and
●
Regulatory capital ratios at the Bank were 14.0% for total risk-based capital and 11.4% for Tier 1 leverage capital at June 30, 2026, compared to 13.8% for total risk-based capital and 11.2% for Tier 1 leverage capital at March 31, 2026. The Bank remained well capitalized under applicable regulatory capital standards.
Segment Reporting
The Company operates through two reportable segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and consumer customers. These products and services include deposit products; residential, consumer, business and commercial real estate lending and cash management services. This segment also manages the Bank's investment portfolio and other assets. The Home Lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment.
The tables below provide a summary of segment reporting at or for the three and six months ended June 30, 2026 and 2025 (dollars in thousands):
At or For the Three Months Ended June 30, 2026
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income
(1)
$ 29,662
$ 2,986
$ 32,648
Provision for credit losses
(2,297)
(344)
(2,641)
Noninterest income
(2)
2,740
3,410
6,150
Noninterest expense
(3)
(21,413)
(4,691)
(26,104)
Income before provision for income taxes
8,692
1,361
10,053
Provision for income taxes
(1,899)
(218)
(2,117)
Net income
$ 6,793
$ 1,143
$ 7,936
Total average assets for period ended
$ 2,511,682
$ 668,842
$ 3,180,524
Full-time employees ("FTEs")
476
117
593
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)
2,298
2,872
5,170
Noninterest expense (3)
(20,314 )
(5,188 )
(25,502 )
Income before provision for income taxes
9,314
445
9,759
Provision for income taxes
(1,938 )
(93 )
(2,031 )
Net income
$ 7,376
$ 352
$ 7,728
Total average assets for period ended
$ 2,466,917
$ 649,443
$ 3,116,360
FTEs
452
115
567
FS Bancorp Q2 Earnings
July 21, 2026
Page 3
At or For the Six Months Ended June 30, 2026
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income
(1)
$ 59,214
$ 5,979
$ 65,193
Provision for credit losses
(4,842)
(328)
(5,170)
Noninterest income
(2)
5,204
6,347
11,551
Noninterest expense
(3)
(42,275)
(9,349)
(51,624)
Income before provision for income taxes
17,301
2,649
19,950
Provision for income taxes
(3,762)
(422)
(4,184)
Net income
$ 13,539
$ 2,227
$ 15,766
Total average assets for period ended
$ 2,527,284
$ 663,600
$ 3,190,884
FTEs
476
117
593
At or For the Six Months Ended June 30, 2025
Condensed income statement:
Commercial and Consumer Banking
Home Lending
Total
Net interest income
(1)
$ 57,585
$ 5,508
$ 63,093
Provision for credit losses
(3,170 )
(443 )
(3,613 )
Noninterest income
(2)
4,543
5,753
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
________________________
(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, 2026, the Company recorded a net increase of $45,000 and a net decrease of $56,000 in fair value, respectively, compared to a net increase of $3,000 and a net increase of $266,000 in fair value for the three and six months ended June 30, 2025, respectively. As of both June 30, 2026 and 2025, there were $13.2 million in residential mortgage loans recorded at fair value, which had previously been transferred from loans held for sale to loans held for investment.
(3)
Noninterest expense includes allocated overhead expense from general corporate activities. Allocation is determined based on a combination of segment assets and FTEs. For the three and six months ended June 30, 2026 and 2025, the Home Lending segment included allocated overhead expenses of $1.7 million and $3.6 million, compared to $1.8 million and $3.7 million, respectively.
FS Bancorp Q2 Earnings
July 21, 2026
Page 4
Asset Summary
The following table summarizes the composition of total assets and changes from the linked quarter and prior-year period.
ASSETS
Linked Quarter
Prior Year
(Dollars in thousands)
June 30,
March 31,
June 30,
Change
Quarter Change
2026
2026
2025
$
%
$
%
Cash and due from banks
$
12,835
$
12,424
$
15,168
$
411
3
%
$
(2,333
)
(15
)%
Interest-bearing deposits at other financial institutions
16,875
26,278
18,027
(9,403
)
(36
)
(1,152
)
(6
)
Total cash and cash equivalents
29,710
38,702
33,195
(8,992
)
(23
)
(3,485
)
(10
)
Certificates of deposit at other financial institutions
—
—
248
—
—
NM
NM
Securities available-for-sale, at fair value
269,460
271,007
302,692
(1,547
)
(1
)
(33,232
)
(11
)
Securities held-to-maturity, net
34,845
33,267
31,562
1,578
5
3,283
10
Loans held for sale, at fair value
30,548
56,275
53,630
(25,727
)
(46
)
(23,082
)
(43
)
Loans receivable, net
2,628,992
2,624,091
2,582,272
4,901
—
46,720
2
Accrued interest receivable
14,263
15,333
14,270
(1,070
)
(7
)
(7
)
—
Premises and equipment, net
43,455
43,612
30,098
(157
)
—
13,357
44
Long-lived assets held for sale
3,258
3,258
—
—
—
—
NM
Operating lease right-of-use
6,655
5,472
7,969
1,183
22
(1,314
)
(16
)
Federal Home Loan Bank stock, at cost
14,420
8,701
11,579
5,719
66
2,841
25
Deferred tax asset, net
6,441
7,175
7,782
(734
)
(10
)
(1,341
)
(17
)
Bank owned life insurance (“BOLI”), net
36,771
36,508
38,262
263
1
(1,491
)
(4
)
MSRs, held at the lower of cost or fair value
8,912
8,676
8,652
236
3
260
3
Goodwill
3,592
3,592
3,592
—
—
—
—
Core deposit intangible, net
9,052
9,774
12,071
(722
)
(7
)
(3,019
)
(25
)
Other assets
38,706
38,072
38,139
634
2
567
1
TOTAL ASSETS
$
3,179,080
$
3,203,515
$
3,176,013
$
(24,435
)
(1
)%
$
3,067
—
%
FS Bancorp Q2 Earnings
July 21, 2026
Page 5
Prior
LOAN PORTFOLIO
Linked
Year
(Dollars in thousands)
Quarter
Quarter
COMMERCIAL REAL ESTATE
June 30, 2026
March 31, 2026
June 30, 2025
$
$
("CRE") LOANS
Amount
Percent
Amount
Percent
Amount
Percent
Change
Change
CRE owner occupied
$ 184,136
6.9 %
$ 182,260
6.9 %
$ 180,250
6.8 %
$ 1,876
$ 3,886
CRE non-owner occupied
188,258
7.1
182,568
6.9
171,979
6.6
5,690
16,279
Commercial and speculative construction and development
370,459
13.9
358,657
13.5
300,723
11.5
11,802
69,736
Multi-family
262,137
9.9
263,353
9.9
263,185
10.1
(1,216 )
(1,048 )
Total CRE loans
1,004,990
37.8
986,838
37.2
916,137
35.0
18,152
88,853
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)
660,518
24.8
630,996
23.8
639,881
24.4
29,522
20,637
Home equity
88,214
3.3
88,468
3.3
85,613
3.3
(254 )
2,601
Residential custom construction
44,765
1.7
44,134
1.7
54,024
2.1
631
(9,259 )
Total residential real estate loans
793,497
29.8
763,598
28.8
779,518
29.8
29,899
13,979
CONSUMER LOANS
Indirect home improvement
502,151
18.9
513,437
19.3
530,375
20.3
(11,286 )
(28,224 )
Marine
66,941
2.5
67,126
2.5
72,765
2.8
(185 )
(5,824 )
Other consumer
4,111
0.1
2,921
0.1
3,151
0.1
1,190
960
Total consumer loans
573,203
21.5
583,484
21.9
606,291
23.2
(10,281 )
(33,088 )
COMMERCIAL BUSINESS LOANS
Commercial and industrial (“C&I”)
281,181
10.6
304,470
11.5
294,563
11.3
(23,289 )
(13,382 )
Warehouse lending
7,286
0.3
18,144
0.6
17,952
0.7
(10,858 )
(10,666 )
Total commercial business loans
288,467
10.9
322,614
12.1
312,515
12.0
(34,147 )
(24,048 )
Total loans receivable, gross
2,660,157
100.0 %
2,656,534
100.0 %
2,614,461
100.0 %
3,623
45,696
Allowance for credit losses ("ACL") on loans
(31,165)
(32,443 )
(32,189 )
1,278
1,024
Total loans receivable, net
$ 2,628,992
$ 2,624,091
$ 2,582,272
$ 4,901
$ 46,720
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, 2026
Dec 31, 2026
Mar 31, 2027
Jun 30, 2027
Sep 30, 2027
Dec 31, 2027
Mar 31, 2028
Jun 30, 2028
Total
Rate
Apartment
$
6,957
$
16,937
$
7,345
$
2,242
$
4,101
$
11,817
$
15,901
$
37,411
$
102,711
5.85
%
Industrial
198
—
13,497
3,645
5,641
5,204
2,790
6,334
37,309
5.88
%
Mixed use
—
1,135
1,287
—
—
3,210
445
—
6,077
6.73
%
Office
538
12,580
2,767
—
7,318
3,622
—
3,090
29,915
5.75
%
Other
3,241
2,408
—
1,739
323
24
7
866
8,608
5.24
%
Retail
—
3,298
2,902
2,322
7,370
—
—
417
16,309
4.88
%
Senior housing and assisted living
2,092
—
—
1,336
—
—
3,022
—
6,450
6.88
%
Total
$
13,026
$
36,358
$
27,798
$
11,284
$
24,753
$
23,877
$
22,165
$
48,118
$
207,379
FS Bancorp Q2 Earnings
July 21, 2026
Page 6
The composition of CRE loans at the dates indicated were as follows:
(Dollars in thousands)
CRE by Type:
June 30, 2026
March 31, 2026
June 30, 2025
CRE non-owner occupied:
Office
$43,705
$43,532
$39,141
Retail
42,042
42,186
38,652
Hospitality/restaurant
24,499
24,673
26,489
Industrial
20,824
14,064
14,444
Self-storage
18,767
18,844
19,075
Mixed use
18,489
18,674
18,387
Other
9,189
9,249
3,670
Senior housing/assisted living
6,882
7,263
7,448
Education/worship
2,359
2,387
2,467
Land
1,502
1,696
2,206
Total CRE non-owner occupied
188,258
182,568
171,979
CRE owner occupied:
Industrial
79,137
74,904
77,419
Office
31,862
35,100
40,156
Retail
27,433
27,443
19,470
Other
10,539
10,674
9,483
Mixed use
9,239
7,685
5,548
Hospitality/restaurant
7,622
8,125
7,230
Automobile related
6,745
6,792
7,215
Car wash
4,376
4,394
4,447
Agriculture
3,816
3,759
4,652
Education/worship
3,367
3,384
4,630
Total CRE owner occupied
184,136
182,260
180,250
Total
$ 372,394
$ 364,828
$ 352,229
The composition of construction loans at the dates indicated were as follows:
(Dollars in thousands)
June 30, 2026
March 31, 2026
June 30, 2025
Construction Types:
Amount
Percent
Amount
Percent
Amount
Percent
Commercial construction – retail
$ 8,447
2.0 %
$ 8,450
2.1 %
$ 8,447
2.4 %
Commercial construction – office
7,164
1.7
9,442
2.3
9,083
2.6
Commercial construction – self storage
25,234
6.1
24,217
6.0
16,553
4.7
Commercial construction – hotel
13,463
3.3
11,968
3.0
3,673
1.0
Multi-family
46,186
11.1
44,343
11.0
23,119
6.5
Custom construction – single family residential and single family manufactured residential
33,944
8.2
33,425
8.3
45,570
12.8
Custom construction – land, lot and acquisition and development
10,821
2.6
10,708
2.7
8,454
2.4
Speculative residential construction – vertical
225,992
54.4
216,204
53.7
200,375
56.5
Speculative residential construction – land, lot and acquisition and development
43,973
10.6
44,034
10.9
39,473
11.1
Total
$ 415,224
100.0 %
$ 402,791
100.0 %
$ 354,747
100.0 %
FS Bancorp Q2 Earnings
July 21, 2026
Page 7
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, 2026
March 31, 2026
June 30, 2025
$
%
$
%
Amount
Percent
Amount
Percent
Amount
Percent
Change
Change
Change
Change
Purchase
$ 163,100
79.2 %
$ 139,626
67.3 %
$ 170,854
85.7 %
$ 23,474
16.8
$ (7,754 )
(4.5 )%
Refinance
42,741
20.8
67,864
32.7
28,470
14.3
(25,123 )
(37.0 )
14,271
50.1 %
Total
$ 205,841
100.0 %
$ 207,490
100.0 %
$ 199,324
100.0 %
$ (1,649 )
(0.8 )
$ 6,517
3.3 %
(Dollars in thousands)
For the Six Months Ended June 30,
2026
2025
Amount
Percent
Amount
Percent
$ Change
% Change
Purchase
$ 302,726
73.2 %
$ 290,737
84.3 %
$ 11,989
4.1 %
Refinance
110,605
26.8
53,983
15.7
56,622
104.9 %
Total
$ 413,331
100.0 %
$ 344,720
100.0 %
$ 68,611
19.9 %
During the quarter ended June 30, 2026, the Company sold $156.1 million of one-to-four-family loans compared to $154.7 million during the previous quarter and $127.1 million during the same quarter one year ago. Gross margins on home loan sales decreased to 2.98% for the quarter ended June 30, 2026, compared to 3.03% in the previous quarter and decreased from 3.06% in the same quarter one year ago. Gross margins are defined as the margin on loans sold (cash sales) without the impact of deferred costs.
Liabilities and Equity Summary
The following table summarizes the components and changes in deposits, borrowings, equity, and book value per common share at the dates indicated.
(Dollars in thousands)
Linked
Prior Year
DEPOSITS
June 30, 2026
March 31, 2026
June 30, 2025
Quarter
Quarter
Transactional deposits:
Amount
Percent
Amount
Percent
Amount
Percent
$ Change
$ Change
Noninterest-bearing checking
$ 629,799
25.7 %
$ 634,787
24.1 %
$ 643,573
25.2 %
$ (4,988 )
$ (13,774 )
Interest-bearing checking
209,721
8.6
185,793
7.0
181,240
7.1
23,928
28,481
Escrow accounts related to mortgages serviced
(1)
12,057
0.5
18,904
0.7
10,496
0.4
(6,847 )
1,561
Subtotal
851,577
34.8
839,484
31.8
835,309
32.7
12,093
16,268
Savings and money market:
Savings
173,091
7.1
169,192
6.4
159,601
6.3
3,899
13,490
Money market
375,833
15.3
377,685
14.3
350,548
13.7
(1,852 )
25,285
Subtotal
548,924
22.4
546,877
20.7
510,149
20.0
2,047
38,775
Certificates of deposit:
CDs
922,022
37.6
923,801
35.0
896,892
35.1
(1,779 )
25,130
Brokered Deposits
Non-maturity brokered deposits
4,027
0.2
250
—
251
—
3,777
3,776
Maturity brokered deposits
122,332
5.0
327,164
12.5
310,774
12.2
(204,832 )
(188,442)
Subtotal
126,359
5.2
327,414
12.5
311,025
12.2
(201,055 )
(184,666)
Total deposits
$ 2,448,882
100.0 %
$ 2,637,576
100.0 %
$ 2,553,375
100.0 %
$ (188,694 )
$ (104,493 )
Borrowings (2)
$ 324,500
$ 167,305
$ 234,305
$ 157,195
$ 90,195
Stockholders' equity
$ 318,960
$ 313,852
$ 297,203
$ 5,108
$ 21,757
Book value per common share
$ 43.57
$ 42.42
$ 39.55
$ 1.15
$ 4.02
(1)
Primarily noninterest-bearing accounts based on applicable state law.
(2)
Comprised of FHLB advances and Federal Reserve Bank borrowings.
FS Bancorp Q2 Earnings
July 21, 2026
Page 8
Brokered deposits declined from the prior quarter, partially offset by increased borrowings, which offered a slightly lower cost of funds.
In the table above, the linked quarter increase in stockholders’ equity at June 30, 2026, compared to March 31, 2026, was primarily due to net income of $7.9 million. Changes in the fair value of available‑for‑sale securities and interest rate swap cash flow hedges increased accumulated other comprehensive income (“AOCI”) by $2.1 million, net of tax. Gains and losses in fair value reflect changes in market interest rates during the periods. The increase in stockholders’ equity was partially offset by share repurchases of $3.6 million and cash dividends paid of $2.2 million.
The Bank is considered “well capitalized” under the capital requirement established by the Federal Deposit Insurance Corporation (“FDIC”) and the Company exceeded all regulatory capital requirements. At June 30, 2026, capital ratios presented for the Bank and the Company were as follows:
At June 30, 2026
Bank
Company
Total risk-based capital (to risk-weighted assets)
14.01%
13.87%
Tier 1 leverage capital (to average assets)
11.43%
10.05%
CET 1 capital (to risk-weighted assets)
12.84%
11.29%
Credit Quality
The following tables summarize changes in the ACL on loans for the periods indicated and the balances of nonperforming and classified loans at the dates indicated.
For the three months ended
Linked
Prior Year
ACL ON LOANS
June 30,
March 31,
June 30,
Quarter
Quarter
(Dollars in thousands)
2026
2026
2025
$ Change
$ Change
Beginning ACL balance
$ 32,443
$ 31,937
$ 31,653
$ 506
$ 790
Provision
2,559
2,650
1,715
(91)
844
Charge-offs
Indirect
(2,067)
(2,450 )
(1,556 )
383
(511)
Marine
(7)
(75 )
(43 )
68
36
Other
(49)
(95 )
(42 )
46
(7)
Commercial and speculative construction and development
(2,277)
—
—
(2,277)
(2,277)
Commercial business
(39)
(230 )
—
191
(39)
Subtotal
(4,439)
(2,850 )
(1,641 )
(1,589)
(2,798)
Recoveries
Indirect
584
585
331
(1)
253
Marine
3
36
54
(33)
(51 )
Other
15
7
7
8
8
Commercial business
—
78
70
(78)
(70)
Subtotal
602
706
462
(104)
140
Ending ACL balance
$ 31,165
$ 32,443
$ 32,189
$ (1,278 )
$ (1,024 )
FS Bancorp Q2 Earnings
July 21, 2026
Page 9
NONPERFORMING LOANS
Linked
Prior Year
(Dollars in thousands)
June 30,
March 31,
June 30,
Quarter
Quarter
CRE LOANS
2026
2026
2025
$ Change
$ Change
CRE
$ 614
$ 1,081
$ 2,046
$ (467)
$ (1,432)
Commercial and speculative construction and development
7,164
9,442
9,083
(2,278)
(1,919)
Total CRE loans
7,778
10,523
11,129
(2,745)
(3,351)
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)
1,973
1,983
1,809
(10)
164
Home equity
472
475
251
(3)
221
Total residential real estate loans
2,445
2,458
2,060
(13)
385
CONSUMER LOANS
Indirect home improvement
4,799
4,622
3,365
177
1,434
Marine
606
466
567
140
39
Other consumer
19
34
13
(15)
6
Total consumer loans
5,424
5,122
3,945
302
1,479
COMMERCIAL BUSINESS LOANS
C&I
—
165
1,862
(165)
(1,862)
Total nonperforming loans
$ 15,647
$ 18,268
$ 18,996
$ (2,621)
$ (3,349)
The decrease in nonperforming loans at June 30, 2026, compared to June 30, 2025, was primarily attributable to a $2.3 million charge-off on a commercial construction loan and a single payoff within the commercial real estate portfolio. The charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market.
CLASSIFIED LOANS
Linked
Prior Year
(Dollars in thousands)
June 30,
March 31,
June 30,
Quarter
Quarter
CRE LOANS
2026
2026
2025
$ Change
$ Change
CRE
$ 4,236
$ 4,122
$ 2,046
$ 114
$ 2,190
Commercial and speculative construction and development
7,164
9,442
9,083
(2,278)
(1,919)
Total CRE loans
11,400
13,564
11,129
(2,164)
271
RESIDENTIAL REAL ESTATE LOANS
One-to-four-family (excludes HFS)
3,794
3,814
4,383
(20)
(589)
Home equity
472
475
251
(3)
221
Total residential real estate loans
4,266
4,289
4,634
(23)
(368)
CONSUMER LOANS
Indirect home improvement
4,799
4,622
3,365
177
1,434
Marine
606
466
567
140
39
Other consumer
19
34
13
(15)
6
Total consumer loans
5,424
5,122
3,945
302
1,479
COMMERCIAL BUSINESS LOANS
C&I
3,889
3,168
5,220
721
(1,331)
Total classified loans
$ 24,979
$ 26,143
$ 24,928
$ (1,164)
$ 51
FS Bancorp Q2 Earnings
July 21, 2026
Page 10
Operating Results
Net interest income increased $536,000 to $32.6 million for the three months ended June 30, 2026, from $32.1 million for the three months ended June 30, 2025, primarily due to an increase in total interest income of $959,000, partially offset by an increase in total interest expense of $423,000. The $536,000 increase in net interest income was primarily due to an increase of $1.2 million in interest income on loans receivable, including fees, resulting from net loan growth. The $423,000 increase in total interest expense reflected a $612,000 increase in interest expense on borrowings resulting from higher average borrowing balances and a $423,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $612,000 decrease in interest expense on deposits.
For the six months ended June 30, 2026, net interest income increased $2.1 million to $65.2 million, from $63.1 million for the six months ended June 30, 2025, with a $3.5 million increase in total interest income, partially offset by a $1.4 million increase in interest expense. The $3.5 million increase in total interest income was primarily due to an increase of $3.9 million in interest income on loans receivable, including fees, resulting from net loan growth. The $1.4 million increase in total interest expense was primarily due to a $1.0 million increase in interest expense on deposits, reflecting higher average deposit balances and funding costs during the period, and a $629,000 increase in interest expense on the subordinated note following its repricing to a higher interest rate in 2026, partially offset by a $267,000 decrease in interest expense on borrowings.
Net interest margin (“NIM”) (annualized) was unchanged at 4.30% for the three months ended June 30, 2026, compared to the same period in the prior year and decreased one basis point from 4.31% to 4.30% for the six months ended June 30, 2026, compared to the same period in 2025. Net interest margin remained relatively stable during both periods as modest increases in earning asset yields were largely offset by corresponding increases in funding costs.
The average total cost of funds, including noninterest-bearing checking, increased two basis points to 2.41% for the three months ended June 30, 2026, from 2.39% for the three months ended June 30, 2025. This increase primarily reflected the repricing of the subordinated note together with changes in the Company's funding mix during the period, partially offset by lower rates on certificates of deposit as those deposits repriced. The average cost of funds increased two basis points to 2.40% for the six months ended June 30, 2026, from 2.38% for the six months ended June 30, 2025, primarily for the same reason noted above.
For the three and six months ended June 30, 2026, the provision for credit losses on loans was $2.6 million and $5.2 million, compared to $2.0 million and $3.6 million for the three and six months ended June 30, 2025. The year-to-date provision for credit losses on loans reflects a $3.1 million increase in net charge-off activity, primarily due to a $2.3 million partial charge-off on a single commercial construction loan as well as increased charge-offs in the consumer loan portfolio. The commercial construction loan had been partially reserved for in prior periods.
During the three months ended June 30, 2026, total net charge-offs increased $2.7 million to $3.8 million, compared to $1.2 million for the three months ended June 30, 2025. The increase was primarily attributable to an additional charge-off on a commercial construction loan relationship that was previously partially charged off in 2024, as well as higher net charge-offs within the indirect home improvement portfolio. The additional charge-off reflects leasing uncertainty and updated appraised values for the underlying property, as well as continued pressure on commercial real estate values in the surrounding market. Following the additional charge-off, management believes the remaining carrying value appropriately reflects current collateral values. Management expects final resolution of the relationship during the second half of 2026. The increase in indirect home improvement loan net charge-offs primarily reflects elevated delinquency levels within portions of the portfolio.
FS Bancorp Q2 Earnings
July 21, 2026
Page 11
During the six months ended June 30, 2026, net charge-offs increased $3.1 million to $6.0 million, compared to $2.9 million for the six months ended June 30, 2025. The increase was primarily due to higher net charge-offs within the indirect home improvement portfolio and the additional charge-off on the commercial construction loan relationship discussed above.
Total noninterest income increased $980,000 to $6.2 million for the three months ended June 30, 2026, from $5.2 million for the three months ended June 30, 2025. The increase primarily reflected higher gain on sale of loans of $609,000 and a $404,000 increase in other noninterest income, partially offset by a $42,000 decrease in service charges and fee income.
Total noninterest income increased $1.3 million to $11.6 million for the six months ended June 30, 2026, from $10.3 million for the six months ended June 30, 2025. This increase was the result of a $1.3 million increase in gain on sale of loans and a $158,000 increase in other noninterest income, partially offset by a $213,000 decrease in service charges and fee income.
Total noninterest expense increased $602,000 to $26.1 million for the three months ended June 30, 2026, compared to $25.5 million for the three months ended June 30, 2025. The $602,000 increase was primarily attributable to a $1.5 million increase in salaries and benefits expense resulting from annual compensation adjustments implemented during the second quarter as part of the Company's annual focal review process, as well as higher benefit costs. In addition, the Company recorded $417,000 of acquisition-related costs associated with the previously announced merger with Pacific West Bancorp (“Pacific West”), which remains subject to customary closing conditions, including shareholder and regulatory approvals. These increases were partially offset by a $1.1 million reduction in operations expense, primarily due to an approximately $800,000 decrease in the mortgage repurchase reserve. The reduction reflects the continued seasoning of loans originated during the high-volume production years of 2020 and 2021, which reduced expected future repurchase losses.
Total noninterest expense increased $1.1 million to $51.6 million for the six months ended June 30, 2026, from $50.6 million for the six months ended June 30, 2025. This increase included a $1.8 million increase in salaries and benefits, a $712,000 increase in acquisition costs, and a $515,000 increase in loan costs, partially offset by a $1.2 million decrease in operations, primarily due to the same reason mentioned above.
About FS Bancorp
FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a range of loan and deposit services primarily to small- and middle-market businesses and individuals in Washington and Oregon. It operates through 27 bank branches, one headquarters office that provides loans and deposit services, and loan production offices in various suburban communities in the greater Puget Sound area, the Kennewick-Pasco-Richland metropolitan area of Washington, also known as the Tri-Cities, and in Vancouver, Washington. Additionally, the Bank services home mortgage customers across the Northwest, focusing on markets in Washington State including the Puget Sound, Tri-Cities, and Vancouver.
Forward-Looking Statements
When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward‑looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially, from those currently expected or projected in these forward-looking statements.
FS Bancorp Q2 Earnings
July 21, 2026
Page 12
Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements, include, but are not limited to the following: adverse economic conditions in the Company’s local market areas, other markets in which the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels; labor shortages, the effects of inflation, recessionary pressures or slowing economic growth; changes in interest rate levels and volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could adversely affect the Company's revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; inflationary pressures and related monetary and fiscal policy responses, and their impact on consumer and business behavior; geopolitical developments and international conflicts including but not limited to tensions or instability in Eastern Europe, the Middle East, South America, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors; the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; increased competitive pressures, including repricing and competitors' pricing initiatives, and their impact on the Company's market position, loan, and deposit products; adverse changes in the securities markets, the Company’s ability to execute its plans to grow its residential construction lending, mortgage banking, and warehouse lending operations, and the geographic expansion of its indirect home improvement lending; challenges arising from expanding into new geographic markets, products, or services; secondary market conditions for loans and the Company’s ability to originate loans for sale and sell loans in the secondary market; volatility in the mortgage industry; fluctuations in deposits; liquidity issues, including the Company's ability to borrow funds or raise additional capital, if necessary; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; environmental, social and governance matters; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, domestic political unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed with or furnished to the SEC which are available on the Company's website at www.fsbwa.com and on the SEC's website at www.sec.gov.
Further, statements about the potential effects of the Company's proposed merger with Pacific West on the Company's business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factor and future developments which are uncertain, unpredictable, and in many cases, beyond the Company's control, including the following: the expected cost savings, synergies and other financial benefits from the merger might not be realized within the expected time frames or at all; governmental approval of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; conditions to the closing of the merger may not be satisfied; the shareholders of Pacific West may fail to approve the consummation of the merger; the integration of the combined company, including the retention of key personnel, might not proceed as planned; and the combined company might not perform as well as expected.
Any of the forward-looking statements that the Company makes in this press release and in the other public statements are based upon management's beliefs and assumptions at the time they are made and may turn out to be incorrect because of the inaccurate assumptions the Company might make, because of the factors illustrated above or because of other factors that cannot be foreseen by the Company. Therefore, these factors should be considered in evaluating the forward‑looking statements, and undue reliance should not be placed on such statements. The Company does not undertake, and expressly disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
FS Bancorp Q2 Earnings
July 21, 2026
Page 13
FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) (Unaudited)
Linked
Prior Year
June 30,
March 31,
June 30,
Quarter
Quarter
ASSETS
2026
2026
2025
% Change
% Change
Cash and due from banks
$ 12,835
$ 12,424
$ 15,168
3
(15 )
Interest-bearing deposits at other financial institutions
16,875
26,278
18,027
(36 )
(6 )
Total cash and cash equivalents
29,710
38,702
33,195
(23 )
(10 )
Certificates of deposit at other financial institutions
—
—
248
—
NM
Securities available-for-sale, at fair value
269,460
271,007
302,692
(1 )
(11 )
Securities held-to-maturity, net
34,845
33,267
31,562
5
10
Loans held for sale, at fair value
30,548
56,275
53,630
(46 )
(43 )
Loans receivable, net
2,628,992
2,624,091
2,582,272
—
2
Accrued interest receivable
14,263
15,333
14,270
(7 )
—
Premises and equipment, net
43,455
43,612
30,098
—
44
Long-lived assets held for sale
3,258
3,258
—
—
NM
Operating lease right-of-use
6,655
5,472
7,969
22
(16 )
Federal Home Loan Bank stock, at cost
14,420
8,701
11,579
66
25
Deferred tax asset, net
6,441
7,175
7,782
(10 )
(17 )
Bank owned life insurance (“BOLI”), net
36,771
36,508
38,262
1
(4 )
MSRs, held at the lower of cost or fair value
8,912
8,676
8,652
3
3
Goodwill
3,592
3,592
3,592
—
—
Core deposit intangible, net
9,052
9,774
12,071
(7 )
(25 )
Other assets
38,706
38,072
38,139
2
1
TOTAL ASSETS
$ 3,179,080
$ 3,203,515
$ 3,176,013
(1 )
—
LIABILITIES
Deposits:
Noninterest-bearing accounts
$ 641,856
$ 653,691
$ 654,069
(2 )
(2 )
Interest-bearing accounts
1,807,026
1,983,885
1,899,306
(9 )
(5 )
Total deposits
2,448,882
2,637,576
2,553,375
(7 )
(4 )
Borrowings
324,500
167,305
234,305
94
38
Subordinated notes:
Principal amount
50,000
50,000
50,000
—
—
Unamortized debt issuance costs
(306)
(322 )
(373 )
(5 )
(18 )
Total subordinated notes less unamortized debt issuance costs
49,694
49,678
49,627
—
—
Operating lease liability
6,753
5,570
8,138
21
(17 )
Other liabilities
30,291
29,534
33,365
3
(9 )
Total liabilities
2,860,120
2,889,663
2,878,810
(1 )
(1 )
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; 7,423,772 shares issued and outstanding at June 30, 2026, 7,501,542 at March 31, 2026, and 7,618,543 at June 30, 2025
74
75
76
(1 )
(3 )
Additional paid-in capital
40,886
43,668
48,418
(6 )
(16 )
Retained earnings
291,635
285,854
268,509
2
9
Accumulated other comprehensive loss, net of tax
(13,635)
(15,745 )
(19,800 )
(13 )
(31 )
Total stockholders’ equity
318,960
313,852
297,203
2
7
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 3,179,080
$ 3,203,515
$ 3,176,013
(1 )
—
FS Bancorp Q2 Earnings
July 21, 2026
Page 14
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
2026
2026
2025
% Change
% Change
Loans receivable, including fees
$ 46,202
$ 46,012
$ 45,038
—
3
Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions
3,460
3,321
3,665
4
(6 )
Total interest and dividend income
49,662
49,333
48,703
1
2
INTEREST EXPENSE
Deposits
13,908
14,713
14,520
(5 )
(4 )
Borrowings
2,197
1,384
1,585
59
39
Subordinated notes
909
691
486
32
87
Total interest expense
17,014
16,788
16,591
1
3
NET INTEREST INCOME
32,648
32,545
32,112
—
2
PROVISION FOR CREDIT LOSSES
2,641
2,529
2,021
4
31
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
30,007
30,016
30,091
—
—
NONINTEREST INCOME
Service charges and fee income
2,281
2,073
2,323
10
(2 )
Gain on sale of loans
2,581
2,384
1,972
8
31
Earnings on cash surrender value of BOLI
263
259
254
2
4
Other noninterest income
1,025
685
621
50
65
Total noninterest income
6,150
5,401
5,170
14
19
NONINTEREST EXPENSE
Salaries and benefits
15,570
14,854
14,088
5
11
Operations
2,699
3,380
3,824
(20 )
(29 )
Occupancy
1,938
1,876
1,780
3
9
Data processing
1,826
1,594
2,137
15
(15 )
Loan costs
900
882
719
2
25
Professional and board fees
1,060
1,014
1,155
5
(8 )
FDIC insurance
531
627
554
(15)
(4 )
Marketing and advertising
445
309
398
44
12
Acquisition costs
417
295
—
41
100
Amortization of core deposit intangible
722
744
809
(3 )
(11 )
(Recovery) impairment of servicing rights
(4)
(55 )
38
(93 )
(111 )
Total noninterest expense
26,104
25,520
25,502
2
2
INCOME BEFORE PROVISION FOR INCOME TAXES
10,053
9,897
9,759
2
3
PROVISION FOR INCOME TAXES
2,117
2,067
2,031
2
4
NET INCOME
$ 7,936
$ 7,830
$ 7,728
1
3
Basic earnings per share
$ 1.06
$ 1.04
$ 1.00
2
6
Diluted earnings per share
$ 1.04
$ 1.02
$ 0.99
2
5
FS Bancorp Q2 Earnings
July 21, 2026
Page 15
FS BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts) (Unaudited)
Year
Six Months Ended June 30,
Over Year
INTEREST INCOME
2026
2025
% Change
Loans receivable, including fees
$ 92,214
$ 88,340
4
Interest and dividends on investment securities, cash and cash equivalents, and interest-bearing deposits at other financial institutions
6,781
7,150
(5 )
Total interest and dividend income
98,995
95,490
4
INTEREST EXPENSE
Deposits
28,621
27,578
4
Borrowings
3,581
3,848
(7 )
Subordinated note
1,600
971
65
Total interest expense
33,802
32,397
4
NET INTEREST INCOME
65,193
63,093
3
PROVISION FOR CREDIT LOSSES
5,170
3,613
43
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES
60,023
59,480
1
NONINTEREST INCOME
Service charges and fee income
4,354
4,567
(5 )
Gain on sale of loans
4,965
3,672
35
Earnings on cash surrender value of BOLI
522
505
3
Other noninterest income
1,710
1,552
10
Total noninterest income
11,551
10,296
12
NONINTEREST EXPENSE
Salaries and benefits
30,424
28,621
6
Operations
6,079
7,269
(16 )
Occupancy
3,814
3,496
9
Data processing
3,420
4,182
(18 )
Loan costs
1,782
1,267
41
Professional and board fees
2,074
2,342
(11 )
FDIC insurance
1,158
1,092
6
Marketing and advertising
754
619
22
Acquisition costs
712
—
NM
Amortization of core deposit intangible
1,466
1,639
(11 )
(Recovery) impairment of MSRs
(59)
29
(303 )
Total noninterest expense
51,624
50,556
2
INCOME BEFORE PROVISION FOR INCOME TAXES
19,950
19,220
4
PROVISION FOR INCOME TAXES
4,184
3,471
21
NET INCOME
$ 15,766
$ 15,749
—
Basic earnings per share
$ 2.11
$ 2.02
4
Diluted earnings per share
$ 2.07
$ 1.99
4
FS Bancorp Q2 Earnings
July 21, 2026
Page 16
KEY FINANCIAL RATIOS AND DATA (Unaudited)
For the Three Months Ended
June 30,
March 31,
June 30,
PERFORMANCE RATIOS:
2026
2026
2025
Return on assets (ratio of net income to average total assets)
(1)
1.00
%
0.99
%
0.99
%
Return on equity (ratio of net income to average total stockholders' equity) (1)
9.94
10.03
10.29
Yield on average interest-earning assets
(1)
6.54
6.53
6.52
Average total cost of funds
(1)
2.41
2.39
2.39
Interest rate spread information – average during period
4.13
4.14
4.13
Net interest margin
(1)
4.30
4.31
4.30
Operating expense to average total assets
(1)
3.29
3.23
3.28
Average interest-earning assets to average interest-bearing liabilities
(1)
139.32
139.86
140.98
Efficiency ratio
(2)
67.28
67.25
68.40
Common equity ratio (ratio of stockholders' equity to total assets)
10.03
9.80
9.36
Tangible common equity ratio
(3)
9.67
9.42
8.91
For the Six Months Ended
June 30,
June 30,
PERFORMANCE RATIOS:
2026
2025
Return on assets (ratio of net income to average total assets)
1.00 %
1.03 %
Return on equity (ratio of net income to average total stockholders' equity)
9.98
10.55
Yield on average interest-earning assets
6.54
6.52
Average total cost of funds
2.40
2.38
Interest rate spread information – average during period
4.14
4.14
Net interest margin
4.30
4.31
Operating expense to average total assets
3.26
3.32
Average interest-earning assets to average interest-bearing liabilities
139.59
141.93
Efficiency ratio
(2)
67.27
68.89
June 30,
March 31,
June 30,
ASSET QUALITY RATIOS AND DATA:
2026
2026
2025
Nonperforming assets to total assets at end of period
(4)
0.49
%
0.57
%
0.60
%
Nonperforming loans to total gross loans (excluding loans HFS)
(5)
0.59
0.69
0.73
ACL – loans to nonperforming loans (5)
199.15
177.67
168.89
ACL – loans to total gross loans (excluding loans HFS)
1.17
1.22
1.23
FS Bancorp Q2 Earnings
July 21, 2026
Page 17
At or For the Three Months Ended
June 30,
March 31,
June 30,
PER COMMON SHARE DATA:
2026
2026
2025
Basic earnings per share
$ 1.06
$ 1.04
$ 1.00
Diluted earnings per share
$ 1.04
$ 1.02
$ 0.99
Weighted average basic shares outstanding
7,340,326
7,402,375
7,580,576
Weighted average diluted shares outstanding
7,483,199
7,531,291
7,698,173
Common shares outstanding at end of period
7,320,801
(6)
7,398,571
(7)
7,515,480
(8)
Book value per share using common shares outstanding
$ 43.57
$ 42.42
$ 39.55
Tangible book value per share using common shares outstanding (9)
$ 41.84
$ 40.61
$ 37.46
(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 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares.
(7)
Common shares were calculated using shares outstanding of 7,501,542 at March 31, 2026, less 102,971 unvested restricted stock shares.
(8)
Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, 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 June 30,
For the Six Months Ended June 30,
QTR Over QTR
YTD Over YTD
Average Balances
2026
2025
2026
2025
$ Change
$ Change
Assets
Loans receivable, net
(1)
$ 2,695,907
$ 2,613,121
$ 2,698,436
$ 2,586,761
$ 82,786
$ 111,675
Investment securities - taxable
245,713
275,951
249,955
258,786
(30,238 )
(8,831 )
Investment securities - nontaxable
77,460
78,155
77,800
77,900
(695 )
(100 )
Interest-bearing deposits and certificates of deposit at other financial institutions
13,806
19,502
18,418
17,840
(5,696 )
578
FHLB stock, at cost
11,323
8,775
9,699
10,353
2,548
(654 )
Total interest-earning assets
3,044,209
2,995,504
3,054,308
2,951,640
48,705
102,668
Noninterest-earning assets
136,315
120,856
136,576
123,027
15,459
13,549
Total assets
$ 3,180,524
$ 3,116,360
$ 3,190,884
$ 3,074,667
$ 64,164
$ 116,217
Liabilities
Interest-bearing deposit accounts
$ 1,911,053
$ 1,924,586
$ 1,959,834
$ 1,845,534
$ (13,533 )
$ 114,300
Borrowings
224,176
150,492
178,467
184,377
73,684
(5,910 )
Subordinated notes
49,683
49,617
49,675
49,608
66
67
Total interest-bearing liabilities
2,184,912
2,124,695
2,187,976
2,079,519
60,217
108,457
Noninterest-bearing deposit accounts
644,215
657,820
651,440
660,805
(13,605 )
(9,365 )
Other noninterest-bearing liabilities
31,061
32,700
32,923
33,218
(1,639 )
(295 )
Total liabilities
$ 2,860,188
$ 2,815,215
$ 2,872,339
$ 2,773,542
$ 44,973
$ 98,797
(1) Includes loans HFS.
FS Bancorp Q2 Earnings
July 21, 2026
Page 18
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:
2026
2026
2025
Stockholders' equity (GAAP)
$
318,960
$
313,852
$
297,203
Less: goodwill and core deposit intangible, net
(12,644)
(13,366)
(15,663)
Tangible common stockholders' equity (non-GAAP)
$
306,316
$
300,486
$
281,540
Common shares outstanding at end of period
7,320,801
(1)
7,398,571
(2)
7,515,480
(3)
Book value per share (GAAP)
$
43.57
$
42.42
$
39.55
Tangible book value per share (non-GAAP)
$
41.84
$
40.61
$
37.46
Tangible Common Equity Ratio:
Total assets (GAAP)
$
3,179,080
$
3,203,515
$
3,176,013
Less: goodwill and core deposit intangible assets
(12,644)
(13,366)
(15,663)
Tangible assets (non-GAAP)
$
3,166,436
$
3,190,149
$
3,160,350
Common equity ratio (GAAP)
10.03
%
9.80
%
9.36
%
Tangible common equity ratio (non-GAAP)
9.67
9.42
8.91
_________________________
(1)
Common shares were calculated using shares outstanding of 7,423,772 at June 30, 2026, less 102,971 unvested restricted stock shares.
(2)
Common shares were calculated using shares outstanding of 7,501,542 at March 31, 2026, less 102,971 unvested restricted stock shares.
(3)
Common shares were calculated using shares outstanding of 7,618,543 at June 30, 2025, less 103,063 unvested restricted stock shares.
FS Bancorp Q2 Earnings
July 21, 2026
Page 19
Additional Information About the Merger and Where to Find It
This press release does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval with respect to the proposed transaction with Pacific West. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
In connection with the proposed merger, a registration statement on Form S-4 has been filed with the SEC which includes a proxy statement of Pacific West and a prospectus of the Company, which will be distributed to the shareholders of Pacific West in connection with the vote of Pacific West's shareholders on the merger of Pacific West with and into the Company and the issuance of Company common stock in the proposed transaction. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT/PROSPECTUS CONTAINED THEREIN, AS WELL AS ANY AMENDMENTS THERETO, AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS, BECAUSE THESE DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER AND RELATED MATTERS.
Investors and security holders may obtain free copies of the registration statement on Form S-4, including the proxy statement/prospectus, contained therein, as well as any amendments thereto, and the definitive proxy statement/prospectus, and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov. These documents may also be obtained free of charge by accessing the Company’s website at www.fsbwa.com under the tab “Investor Relations” and then under “SEC Filings.” Alternatively, copies of these documents may be obtained free of charge by (1) writing to FS Bancorp, Inc at 6920 220th Street SW, Mountlake Terrace, Washington 98043, Attn: Investor Relations or (2) by calling (425) 771-5299.
Participants in the Solicitation
The Company, Pacific West and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific West in connection with the proposed transaction. Information about the Company's directors and executive officers is included in the proxy statement for its 2026 annual meeting of the Company’s shareholders, which was filed with the SEC on April 6, 2026. Information about Pacific West’s participants and additional information regarding the interests of these participants is included in the proxy statement/prospectus regarding the proposed transaction when it becomes available. Free copies of this document may be obtained as described above.
Contacts:
Matthew D. Mullet,
President and Chief Executive Officer
Phillip D. Whittington,
Chief Financial Officer
(425) 771-5299
www.FSBWA.com
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