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; andRegulatory 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, 2024Condensed income statement: Commercial and Consumer Banking Home Lending TotalNet 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 Weightedthousands) For the Quarter Ended AverageCRE 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 RateAgriculture $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 CompanyTotal 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 QuarterCRE LOANS Amount Amount Amount $ Change $ ChangeCRE $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 QuarterCRE LOANS Amount Amount Amount $ Change $ ChangeCRE $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 SUBSIDIARYCONSOLIDATED 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 SUBSIDIARYCONSOLIDATED 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 SUBSIDIARYCONSOLIDATED 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 __________________________ 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 OfficerMatthew D. Mullet,PresidentPhillip D. Whittington,Chief Financial Officer (425) 771-5299www.FSBWA.com

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

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