FS Bancorp and Pacific West Bancorp Announce Merger

FS Bancorp and Pacific West Bancorp Ink Merger Deal Valued at $34.6 Million

FS Bancorp, Inc. (NASDAQ: FSBW) and Pacific West Bancorp (OTCPK: PWBK) have entered into a definitive agreement to merge, creating a combined entity with approximately $3.6 billion in assets. The all-stock and cash transaction values Pacific West at roughly $34.6 million.

The merger, expected to close in the third quarter of 2026, will see Pacific West merge into FS Bancorp. Pro forma for the transaction, the combined company is projected to hold $3.6 billion in assets, $3.0 billion in loans, and $3.0 billion in deposits, operating across 31 branch locations throughout the Pacific Northwest.

Pacific West, headquartered in West Linn, Oregon, currently manages $386 million in assets through its subsidiary, Pacific West Bank. The bank has established a strong presence in the Greater Portland metropolitan area, with four branches strategically located in Portland, Vancouver, West Linn, and Lake Oswego.

Matthew Mullet, President of FS Bancorp and CEO of 1st Security Bank of Washington, highlighted the strategic importance of the acquisition. “This partnership with Pacific West represents a compelling step forward in our continued expansion across the Pacific Northwest,” Mullet stated. “Pacific West has built a customer-focused commercial banking franchise with deep roots in the Portland-Vancouver metro area. Combining our organizations brings together complementary strengths that enhance our ability to serve our customers and communities.”

Echoing this sentiment, Jason Wessling, President and CEO of Pacific West, expressed enthusiasm for the union. “We are excited to join FS Bancorp, a company that shares our commitment to relationship banking and community engagement,” Wessling commented. “This merger provides Pacific West with access to broader capital resources, enhanced technology, and a wider suite of products and services that will benefit our customers, employees, and the communities we serve.”

Under the terms of the agreement, Pacific West shareholders will receive 430,176 shares of FS Bancorp common stock and $16.8 million in cash. Shareholders will have the option to elect either shares or cash, subject to proration outlined in the agreement. Based on FS Bancorp’s closing stock price of $41.26 on February 25, 2026, the total consideration for Pacific West amounts to approximately $34.6 million, or $12.52 per share. Post-merger, Pacific West shareholders are expected to own approximately 5.4% of FS Bancorp’s outstanding common stock.

The transaction is anticipated to be immediately accretive to FS Bancorp’s earnings per share, with a projected 7.4% accretion in 2027. Tangible book value is expected to experience a dilution of 2.2% at closing, with an estimated earnback period of 2.4 years.

Both FS Bancorp and Pacific West boards of directors have unanimously approved the merger. The deal’s completion is contingent upon customary closing conditions, including approval from Pacific West’s shareholders and regulatory authorities.

D.A. Davidson & Co. advised FS Bancorp on financial matters, with Breyer & Associates PC providing legal counsel. Raymond James & Associates, Inc. served as the financial advisor to Pacific West, and Buchalter APC acted as its legal counsel.

**About FS Bancorp, Inc.**
FS Bancorp, Inc., a Washington corporation, is the holding company for 1st Security Bank of Washington. The Bank offers a comprehensive suite of loan and deposit services, primarily targeting small and middle-market businesses and individuals across Washington and Oregon. Its operations encompass 27 bank branches, a headquarters office facilitating loan and deposit services, and loan production offices in various suburban locales within the greater Puget Sound area, the Tri-Cities region, and Vancouver, Washington.

**About Pacific West Bancorp**
Pacific West Bank, established in 2004 by local business leaders, is dedicated to providing tailored loan and deposit solutions through experienced banking professionals. The bank serves the greater Portland-Vancouver metropolitan area with strategically positioned offices in Downtown Portland, Lake Oswego, West Linn, and Vancouver, WA.

**Forward-Looking Statements**
This press release contains forward-looking statements concerning FS Bancorp, Pacific West, the proposed merger, and the combined company. These statements are subject to risks, uncertainties, and contingencies, many of which are beyond the control of the involved parties. Actual results may differ materially from those projected in these statements due to various factors, including but not limited to: the realization of expected cost savings and synergies, the successful obtaining of governmental and shareholder approvals, the smooth integration of the combined entity, and overall business performance. FS Bancorp and Pacific West do not undertake any obligation to revise or publicly release updates to these forward-looking statements.