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FSBW is like a regional Bank of America, but focused on Washington state.

FSBW is like a community-focused Wells Fargo, serving families and businesses in the Puget Sound area.

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• Deposit Accounts: Offers various deposit instruments including checking, money market, savings accounts, and certificates of deposit.
• Residential Mortgage Loans: Provides first and second mortgages, and home equity loan products for one-to-four-family residences.
• Commercial Loans: Offers non-mortgage commercial business loans, commercial real estate loans, and construction and development loans.
• Consumer Loans: Provides personal lines of credit, credit cards, automobile, home improvement, loans on deposit, and recreational loans.

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• Jack Henry & Associates, Inc. (JKHY)
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Joseph C. Adams, Chief Executive Officer, FS Bancorp, Inc.

Joseph C. Adams has been the Chief Executive Officer of 1st Security Bank of Washington since July 2004 and of FS Bancorp, Inc. since its formation in September 2011. He will retire from his role as CEO of FS Bancorp in May 2026. Prior to these roles, he served as Chief Financial Officer for 1st Security Bank of Washington, which he joined in April 2003. Mr. Adams also held positions as a tax consultant for Deloitte, a lawyer for K&L Gates, and a lawyer and Director of Regulatory Affairs for Univar USA. He also served as Supervisory Committee Chairperson for Washington's Credit Union from 1993 to 1999, which was the bank's previous name.

Matthew D. Mullet, President, FS Bancorp, Inc. and Chief Executive Officer, 1st Security Bank of Washington

Matthew D. Mullet became President and CEO of 1st Security Bank of Washington on September 1, 2025, and continues to serve as President of FS Bancorp, Inc. He joined 1st Security Bank in July 2011 and served as its Chief Financial Officer from September 2011 until May 1, 2025. Mr. Mullet began his banking career in June 2000 as a financial examiner with the Washington State, Department of Financial Institutions, Division of Banks. He later accepted a position at Golf Savings Bank in 2004, where he was promoted to Chief Financial Officer in 2007. Following a merger, he served in a senior position at Sterling Savings Bank's Home Loan Division.

Phillip Whittington, Chief Financial Officer

Phillip Whittington was promoted to Chief Financial Officer of both FS Bancorp, Inc. and 1st Security Bank of Washington, effective May 1, 2025. He joined 1st Security Bank in January 2020 as the Bank's Controller. A licensed Certified Public Accountant, Mr. Whittington previously worked in public accounting at the firm of Elliott Davis, where he was promoted to manager during his five-year tenure.

Donn C. Costa, Executive Vice President, Home Lending

Donn C. Costa has over three decades of experience in mortgage lending and joined 1st Security Bank in 2011, overseeing home lending production. He previously held the position of Executive Vice President at Sterling Savings Bank after its merger with Golf Savings Bank in 2009. Prior to that merger, Mr. Costa was President of Golf Savings Bank and also served as Executive Vice President of Mortgage Lending, participating in the Asset and Liability, Personnel, and Lending Committees.

Erin M. Burr, Executive Vice President, Chief Risk Officer

Erin M. Burr joined 1st Security Bank in January 2009 and was promoted to Chief Risk Officer in April 2018. Before this, she served as the Community Reinvestment Act (CRA) Officer starting in January 2010 and Enterprise Risk Manager from May 2012. Ms. Burr began her career in 1999 as a financial examiner for the Washington State, Department of Financial Institutions, Division of Banks, and later joined Builders Capital Mortgage in Seattle as a senior underwriter in 2006.

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The key risks to FS Bancorp's business include challenges related to its recent merger, maintaining credit quality across its diverse loan portfolio, and exposure to fluctuations in interest rates and broader economic conditions.

1. Merger Integration Risk: FS Bancorp recently entered into an agreement to acquire Pacific West Bancorp. This acquisition introduces risks such as the potential failure to realize expected cost savings, synergies, and other financial benefits within anticipated timeframes, or at all. There are also risks associated with obtaining governmental approvals and the possibility of adverse regulatory conditions being imposed. Furthermore, the merger is projected to result in a 2.2% tangible book value dilution at closing with an estimated 2.4-year earnback period, which could negatively impact short-term shareholder value. Integration challenges between the two entities could hinder the combined company's operational effectiveness.

2. Credit Quality and Loan Risks: As a bank holding company with a substantial lending operation, FS Bancorp is exposed to credit risks across its various loan portfolios, including residential first mortgages, second mortgage/home equity loans, non-mortgage commercial business loans, commercial real estate loans, construction and development loans, and consumer loans. Recent reports indicate some pressure on credit quality, with net charge-offs rising, particularly within commercial construction and indirect home improvement portfolios. A material increase in nonperforming loans, especially in construction and development, or issues within its residential mortgage warehouse lending program, could materially and adversely affect its financial condition and results of operations.

3. Interest Rate Risk and Economic Factors: The profitability and financial condition of FS Bancorp, like other financial institutions, are significantly influenced by interest rate fluctuations and general economic trends. Persistent inflation, for example, can impact interest rates and the cost of capital. Changes in interest rates are a key risk factor affecting the repayment of loans, particularly within its residential mortgage warehouse lending program. The broader economic environment can lead to vulnerabilities and challenges in debt servicing for borrowers, which could, in turn, affect the bank's asset quality.

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The rise of digital-only banks (neobanks) and specialized financial technology (fintech) companies represents an emerging threat. These entities leverage technology to provide banking and financial services, often with lower operational overheads, enhanced digital user experiences, and competitive pricing, which can attract customers away from traditional branch-based community banks like FS Bancorp. This challenges FS Bancorp's established model for deposit acquisition, loan origination, and customer retention by offering a fundamentally different and often more convenient delivery mechanism for financial services.

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FS Bancorp (symbol: FSBW) operates primarily in the greater Puget Sound area and surrounding counties in Washington state, offering a range of banking and financial services.

Here are the addressable market sizes for their main products and services, based on available data for Washington State or the Puget Sound region:

• Deposits (checking accounts, money market deposit accounts, savings accounts, and certificates of deposit): The total deposits in Washington State amounted to approximately $211 billion in 2024. This figure represents the broader market for deposits across the entire state.
• One-to-four-family residential first mortgages: New home loans booked in Washington State totaled $36.5 billion in 2024. More specifically for the Seattle area (within a 16-mile radius), the total forward mortgage loan volume was approximately $100.63 billion between December 2024 and November 2025.
• Second mortgage/home equity loan products: Within a 16-mile radius of Seattle, the home equity loan volume was approximately $2.55 billion between December 2024 and November 2025.
• Non-mortgage commercial business loans: Small business loans in Washington State totaled $12.8 billion in 2024. For commercial loans specifically within a 16-mile radius of Seattle, the volume was approximately $9.41 billion between December 2024 and November 2025.
• Commercial real estate loans: While national commercial real estate mortgage borrowing and lending was estimated at $498 billion in 2024, specific data for Washington State's commercial real estate loan market size is not fully available in public search results. However, the Seattle area (within a 16-mile radius) recorded $9.41 billion in commercial loans, which would include commercial real estate, between December 2024 and November 2025.
• Construction and development loans: In the Seattle area (within a 16-mile radius), the volume for building or construction loans was approximately $7.57 billion between December 2024 and November 2025.
• Consumer loans (personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans): Specific addressable market sizes for all these individual consumer loan products within the Puget Sound region are not explicitly available in the provided search results.

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1. Growth in diversified loan portfolios, particularly commercial real estate, construction and development, and indirect home improvement loans. FS Bancorp continues to emphasize diversified lending across its commercial real estate, construction and development, and indirect home improvement portfolios, which are significant drivers of earnings capacity. As of December 31, 2025, the company's loans reached $2.66 billion, with a notable focus on these areas. Total loans receivable, gross, increased by $25.5 million in the fourth quarter of 2025, primarily due to a $27.4 million rise in commercial and speculative construction and development loans.
2. Strategic expansion through the merger with Pacific West Bancorp and organic growth in its branch network. A significant driver for future revenue growth is the announced merger with Pacific West Bancorp on February 25, 2026, which is expected to expand the company's market presence and customer base. Furthermore, FS Bancorp has already expanded its physical footprint, operating 27 full-service branches and 13 loan production offices concentrated in the Puget Sound and broader Pacific Northwest as of December 31, 2025, an increase from 21 full bank service branches and 10 home loan production offices as of December 31, 2021.
3. Sustained growth in customer deposits. Deposit growth provides a stable and lower-cost funding source for lending activities, directly supporting net interest income. The company reported strong deposit growth of 14.29% year over year, reaching $2.67 billion as of December 31, 2025.
4. Effective management and optimization of its Net Interest Margin (NIM). While the net interest margin can fluctuate, the company's ability to maintain or improve its NIM through prudent asset and liability management is crucial for maximizing interest income from its loan and investment portfolios. In Q1 2025, FS Bancorp reported a Net Interest Margin of 4.3%.

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Share Repurchases

• FS Bancorp's Board of Directors authorized a share repurchase program of up to $5.0 million in July 2024, active through July 31, 2025, with approximately $3 million remaining under a prior program as of March 31, 2024.
• An additional share repurchase program of up to $5.0 million was authorized in October 2025, valid until October 27, 2026.
• In July 2025, the Board authorized another $5 million share repurchase program until July 9, 2026, noting that approximately $400,000 remained from a previous plan as of April 4, 2025.

Share Issuance

• As of December 31, 2025, the company's stockholders' equity saw a positive impact due to the issuance of 30,942 shares of common stock.

Outbound Investments

• FS Bancorp, Inc. is acquiring Pacific West Bancorp in a stock-and-cash merger valued at approximately $34.6 million, with Pacific West shareholders receiving 430,176 FS Bancorp shares and $16,832,742 in cash.
• This merger is projected to be immediately accretive to FS Bancorp's earnings per share, with an estimated 7.4% EPS accretion in 2027, and is anticipated to close in the third quarter of 2026.

Capital Expenditures

• Capital expenditures were $1.38 million for the year ending December 31, 2025.
• In Q3 2025, FS Bancorp invested $3.0 million in capital expenditures.
• In Q4 2025, the company purchased a 122,000 sq ft building for $16.1 million, with expected capital expenditures for 2025 primarily focused on tenant and operational improvements at this new headquarters. These expenditures are expected to be largely offset by proceeds from the anticipated sale of the Bank's current headquarters.