Matthew D. Mullet
About Matthew D. Mullet
Matthew D. Mullet is President, Chief Financial Officer, Treasurer, and Secretary of FS Bancorp and 1st Security Bank; he joined the Bank in July 2011 and became CFO in September 2011, and was promoted to President in July 2024. He is 46 years old and a cum laude graduate of the University of Washington, with prior roles at the Washington State Department of Financial Institutions (financial examiner), Golf Savings Bank (CFO), and Sterling Savings Bank (SVP, Home Loan Division) . Under his leadership, 2024 results included net income of $35.0 million (vs. $36.1 million in 2023), net interest margin of 4.30%, tangible book value per share growth of 13.8%, and common equity ratio rising to 9.76% alongside improved book value per share to $38.26; cumulative TSR since 2019 measured $145.99 and ROA was 1.18% in 2024 . He beneficially owns 169,232 shares (140,073 stock plus 29,159 options exercisable within 60 days), equating to 2.2% of shares outstanding as of March 21, 2025, aligning incentives with shareholders .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| WA Dept. of Financial Institutions (Division of Banks) | Financial Examiner | 2000–2004 | Regulatory grounding in bank supervision and credit analysis . |
| Golf Savings Bank | Various roles; appointed CFO | 2004–2007 (CFO from 2007; through merger) | Built finance function; transitioned through merger to Sterling Savings Bank . |
| Sterling Savings Bank | SVP, Home Loan Division | Post-merger until 2011 | Led home lending operations until resigning to join 1st Security Bank . |
| 1st Security Bank / FS Bancorp | CFO; later President & CFO | 2011–present (President since 07/2024) | Scaled diversified lending, capital and liquidity management, investor engagement . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Washington Bankers Association | Board member; Government Relations Committee | Current | Industry advocacy and regulatory engagement . |
| The IF Project | Financial literacy volunteer (Washington Corrections Center for Women) | Ongoing | Community financial education focus . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | 330,000 | 346,500 | 377,145 (paid) / base set at $425,000 after promotion; +22.66% vs 2023 |
| All other comp ($) | 20,321 | 26,811 | 29,372 |
Notes:
- 2024 base salary was increased to $425,000 due to promotion to President; paid salary shown in SCT reflects proration/timing .
Performance Compensation
| Component | Metric | Target | Actual | Payout mechanics | Vesting |
|---|---|---|---|---|---|
| Annual cash incentive (2024) | Company financial/strategic results; peer-relative performance | 50% of base ($212,500) | 87.5% of base ($371,000) | Committee uses holistic assessment across net income, NIM, asset quality, TBV, equity growth, and strategic achievements | Cash; no vesting. |
| Long-term RSUs (8/15/2024) | Equity alignment | Grant of 5,000 shares; $209,900 fair value | N/A | Time-based vesting; dividends on unvested restricted stock not paid per policy | 20% annually, first tranche 8/15/2025 . |
| Stock options (8/15/2024) | Price appreciation incentive | Grant of 10,000 options; $114,900 fair value; exercise price $41.98, exp. 8/15/2034 | N/A | Options only have value if stock exceeds strike; structured for longer-term value creation | 20% annually, first tranche 8/15/2025 . |
Performance context (2024 highlights used in payout determination):
- Net income $35.0m; NIM 4.30%; deposits ex-brokered +$105.2m (+5.0%); nonperforming assets 0.45%; book value per share $38.26 (+11.4% YoY); tangible book value per share $36.02 (+13.8% YoY); common equity ratio 9.76% (from 8.90%) .
Most important metrics linking pay and performance (SEC 402(v)):
- Net Income; Net Interest Margin; Efficiency Ratio; Return on Assets; Relative Total Shareholder Return .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 169,232 total (140,073 stock; 29,159 options exercisable within 60 days); 2.2% of shares outstanding . |
| Unvested RSUs (12/31/2024) | 13,930 shares; market value $571,966 (at $41.06) . |
| Options outstanding (12/31/2024) | Unexercisable: 10,000 (2024, $41.98); 9,600 (2023, $30.73); 8,100 (2022, $30.94); 6,000 (2021, $35.46); 3,090 (2020, $21.35); exercisable: 9,000 (2021) and 5,400 (2022) etc. per table . |
| Stock ownership guidelines | Executives must hold stock equal to 1x base salary; all NEOs in compliance as of 12/31/2024; must retain 50% of net after-tax shares until meeting guideline . |
| Hedging/pledging | Prohibited for directors/executives; no exceptions noted as of proxy date; margin and pledging discouraged; anti-hedging/pledging policy referenced; trading windows and preclearance required; Rule 10b5‑1 plans permitted . |
| 2024 insider exercises/vesting | Options exercised: 31,320 shares; value realized $555,343; RSUs vested: 4,560 shares; value realized $191,429 . |
Insider selling pressure considerations:
- Annual 20% vesting cycles (August 15 each year) create predictable liquidity windows; preclearance and blackout rules constrain discretionary sales; 10b5‑1 allowed for programmed selling; retention requirements mitigate near-term sell pressure .
Employment Terms
| Provision | Economics / terms |
|---|---|
| Change-of-control agreement (Mullet) | Lump-sum severance equal to 12 months current salary upon involuntary termination within 6 months before / 12 months after a CoC; for Mullet the amount shown is $425,000 . |
| Involuntary termination (non-CoC) | No separate severance agreement disclosed for Mullet outside CoC . |
| Equity acceleration | 2013 Plan: full acceleration upon actual CoC; 2018 Plan: double-trigger—if CoC occurs and involuntary separation within 365 days, vesting accelerates; if successor does not assume/replace with equivalent award, acceleration at CoC . |
| Potential payments (12/31/2024) | Death/Disability: equity awards $838,410; Change in Control: CoC cash $425,000 + equity awards $838,410 . |
| Clawback | Established 2012; updated 2023 to conform to Exchange Act §10D and Nasdaq Rule 5608; triggers include fraud, restatement, imprudent risk taking, Code of Ethics violations . |
| Trading policy | Insider trading policy specifies windows, preclearance, Section 16(b) awareness, and Rule 10b5‑1 plan requirements . |
Compensation Structure Analysis
| Year | Salary ($) | Bonus ($) | Stock awards ($) | Options ($) | All other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | 330,000 | 280,000 | 139,230 | 96,390 | 20,321 | 865,941 |
| 2023 | 346,500 | 303,500 | 122,920 | 91,440 | 26,811 | 891,171 |
| 2024 | 377,145 | 371,000 | 209,900 | 114,900 | 29,372 | 1,102,318 |
Observations:
- Mix shifted toward equity in 2024 with higher RSU/option grants post-promotion; cash bonus increased to 87.5% of base, reflecting 2024 execution amid rising rates and asset quality discipline .
- No tax gross-ups; no SERP; no option repricing; dividends not paid on unvested restricted stock; double-trigger for 2018 plan—shareholder-friendly constructs .
Equity Awards Detail (2024 Grants)
| Grant date | RSUs (#) | Options (#) | Exercise price ($) | Grant-date fair value ($) | Vesting |
|---|---|---|---|---|---|
| 8/15/2024 | 5,000 | 10,000 | 41.98 | 324,800 (sum RSU+option) | 20% annually; first tranche 8/15/2025 . |
Performance & Track Record
- Pay versus performance: Compensation actually paid to PEO and NEOs tracked Net Income and ROA; FS Bancorp cumulative TSR since 2019 reached $145.99; ROA 1.18% in 2024; non-PEO NEOs’ compensation actually paid averaged $1,415,125 in 2024 .
- 2024 operational highlights influencing incentives: Net income $35.0m; NIM 4.30%; nonperforming assets 0.45%; TBV/share +13.8%; shareholder equity +$31.3m to $295.8m; cash dividend increased to $1.06/share (6% YoY) .
- Capital and credit: Bank “well capitalized”; ACL on loans 1.26%; nonaccrual loans 0.54% of total; credit costs rose mostly in consumer segments; disciplined underwriting and stress testing noted .
Compensation Governance, Peer Group, Say‑on‑Pay
- Compensation Committee: Independent; members Mansfield (Chair), Cofer-Wildsmith, Leech, Zavaglia; uses independent consultant Pearl Meyer .
- Peer group: Alerus, Bank of Marin, BayCom, Camden National, CapStar, Coastal Financial, First Northwest, Five Star, HarborOne, Home Bancorp, HomeTrust, Independent Bank Corp., Mercantile, Meridian, Northrim, Sierra, Timberland, Waterstone .
- Say‑on‑pay: >95% approval at 2024 annual meeting; Board recommends annual frequency .
Equity Ownership & Alignment Table (snapshot)
| Ownership element | Amount |
|---|---|
| Shares owned (stock) | 140,073 |
| Options exercisable within 60 days | 29,159 |
| Total beneficial ownership | 169,232 |
| % of shares outstanding | 2.2% |
| Unvested RSUs (12/31/2024) | 13,930; value $571,966 |
| 2024 option exercises / value | 31,320; $555,343 |
| 2024 RSUs vested / value | 4,560; $191,429 |
| Hedging/pledging | Prohibited; no exceptions noted . |
| Ownership guideline compliance | In compliance as of 12/31/2024 . |
Employment Terms
| Scenario | Cash ($) | Equity acceleration ($) | Notes |
|---|---|---|---|
| Death/Disability | — | 838,410 | Plan acceleration under 2013/2018 plan terms . |
| Change in Control (double-trigger) | 425,000 (12 months salary) | 838,410 | Severance if involuntary termination within window; vesting acceleration per plan . |
Risk Indicators & Red Flags
- Hedging/pledging prohibited; trading governed by windows/preclearance and Rule 10b5‑1; Section 16 compliance affirmed (two late Form 3 filers noted, not Mullet) .
- No option repricing, no tax gross-ups, no SERP; clawback policy robust and updated per SEC/Nasdaq rules .
- Insider activity: 2024 option exercises and RSU vesting values realized; structured trading governance reduces short-swing and blackout risk .
Investment Implications
- Alignment: 2.2% beneficial ownership, retention requirements, and anti-hedging/pledging policies create credible alignment; annual RSU/option vesting supports long-term incentives .
- Selling pressure: Predictable August vesting tranches and sizable 2024 option exercises suggest periodic liquidity events; governance (windows/preclearance, 10b5‑1) mitigates discretionary timing risk .
- Pay-performance: 2024 bonus at 87.5% reflects delivery on net income, NIM, TBV/share growth, and equity ratio improvements; continued emphasis on ROA/TSR in pay-versus-performance disclosure is constructive for shareholders .
- Downside protection/retention: Double-trigger vesting and 12-month CoC severance for Mullet are moderate; absence of gross-ups and SERP lowers shareholder risk; clawback adds discipline .