PORT ANGELES, Wash., Oct. 27, 2025 (GLOBE NEWSWIRE) --
First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company"), the holding company for First Fed Bank ("First Fed" or the "Bank"), today reported net income of $802,000 for the third quarter of 2025, compared to net income of $3.7 million for the second quarter of 2025 and a net loss of $2.0 million for the third quarter of 2024. Basic and diluted income per share were $0.09 for the third quarter of 2025, compared to basic and diluted income per share of $0.42 for the second quarter of 2025 and basic and diluted loss per share of $0.23 for the third quarter of 2024.
Management Outlook:
"With over a century of history behind First Fed, I'm committed to honoring that legacy by continuing to deliver long-term value for our shareholders and remaining a trusted partner in the communities we serve," said Curt Queyrouze, President and Chief Executive Officer of First Northwest and First Fed. "Guided by our Board and driven by a talented team, we are building a modern, forward-thinking financial institution. Our third quarter results demonstrate meaningful progress in positioning First Fed to meet the evolving needs of our customers. As we embrace a culture of customer obsession, we recognize that their success is our success. I'm excited to build on the strong foundation we've established and work to ensure First Northwest continues to be a catalyst for financial growth and wellness throughout our communities."
The Board of Directors of First Northwest elected not to declare a dividend for this quarter as part of a prudent approach to capital management. The Company remains committed to maintaining a strong balance sheet and will continue to evaluate future dividend decisions in light of the Company's long-term strategic objectives.
Key Points for the Third Quarter
Positive Trends:
| • | Net interest margin increased to 2.91% for the current quarter compared to 2.83% in the second quarter of 2025, as a result of a decrease in the rate paid on interest-bearing liabilities. | |
| • | Cost of total deposits dropped to 2.20% for the current quarter from 2.31% in the preceding quarter as higher-rate certificates of deposit ("CDs") matured and noninterest-bearing demand balances increased. | |
| • | First Fed risk-based capital ratios improved to 13.7% for the current quarter compared to 13.1% in the second quarter of 2025, and 13.4% for the third quarter of 2024. | |
| • | Advances decreased $84.5 million, or 27.3%, to $225.0 million at September 30, 2025 from $309.5 million at June 30, 2025, contributing to the improved net interest margin. | |
| • | Recorded a $620,000 recapture of provision for credit losses on loans in the third quarter of 2025, compared to a recapture of $296,000 for the preceding quarter and a provision for credit losses on loans of $3.1 million for the third quarter of 2024. |
Other significant events:
| • | During the third quarter of 2025, the Company experienced higher compensation expenses as a result of executive management changes. | |
| • | The Bank continues to vigorously defend itself in the legal proceedings disclosed in our last Quarterly Report on Form 10-Q, resulting in continued higher legal expenses. |
| Selected Quarterly Financial Ratios: | ||||||||||||||||||||||||||||
| As of or For the Quarter Ended | As of or For the Nine Months Ended September 30, | |||||||||||||||||||||||||||
| September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Performance ratios:(1) | ||||||||||||||||||||||||||||
| Return on average assets | 0.15 | % | 0.68 | % | -1.69 | % | -0.51 | % | -0.36 | % | -0.28 | % | -0.23 | % | ||||||||||||||
| Adjusted PPNR return on average assets(2) | 0.06 | 0.39 | 0.27 | 0.26 | 0.17 | 0.24 | 0.16 | |||||||||||||||||||||
| Return on average equity | 2.10 | 10.00 | -23.42 | -6.92 | -4.91 | -4.03 | -3.14 | |||||||||||||||||||||
| Net interest margin(3) | 2.91 | 2.83 | 2.76 | 2.73 | 2.70 | 2.83 | 2.74 | |||||||||||||||||||||
| Efficiency ratio(4) | 104.9 | 78.0 | 113.5 | 92.2 | 100.3 | 99.2 | 85.5 | |||||||||||||||||||||
| Equity to total assets | 7.32 | 6.82 | 6.75 | 6.89 | 7.13 | 7.32 | 7.13 | |||||||||||||||||||||
| Book value per common share | $ | 16.33 | $ | 15.85 | $ | 15.52 | $ | 16.45 | $ | 17.17 | $ | 16.33 | $ | 17.17 | ||||||||||||||
| Tangible performance ratios:(1) | ||||||||||||||||||||||||||||
| Tangible common equity to tangible assets(2) | 7.26 | % | 6.76 | % | 6.68 | % | 6.83 | % | 7.06 | % | 7.26 | % | 7.06 | % | ||||||||||||||
| Return on average tangible common equity(2) | 2.12 | 10.10 | -23.65 | -6.99 | -4.96 | -4.07 | -3.17 | |||||||||||||||||||||
| Tangible book value per common share(2) | $ | 16.18 | $ | 15.70 | $ | 15.36 | $ | 16.29 | $ | 17.00 | $ | 16.18 | $ | 17.00 | ||||||||||||||
| Capital ratios (First Fed):(5) | ||||||||||||||||||||||||||||
| Tier 1 leverage | 9.3 | % | 9.1 | % | 9.0 | % | 9.4 | % | 9.4 | % | 9.3 | % | 9.4 | % | ||||||||||||||
| Common equity Tier 1 | 12.7 | 12.0 | 12.1 | 12.4 | 12.2 | 12.7 | 12.2 | |||||||||||||||||||||
| Total risk-based | 13.7 | 13.1 | 13.4 | 13.6 | 13.4 | 13.7 | 13.4 | |||||||||||||||||||||
| (1 | ) | Performance ratios are annualized, where appropriate. |
| (2 | ) | See reconciliation of Non-GAAP Financial Measures later in this release. |
| (3 | ) | Net interest income divided by average interest-earning assets. |
| (4 | ) | Total noninterest expense as a percentage of net interest income and total other noninterest income. |
| (5 | ) | Current period capital ratios are preliminary and subject to finalization of the FDIC Call Report. |
Adjusted Pre-tax, Pre-Provision Net Revenue (1)
Adjusted PPNR for the third quarter of 2025 decreased $1.8 million to $340,000, compared to $2.1 million for the preceding quarter, and decreased $607,000 from $947,000 in the third quarter one year ago.
| For the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||||
| Net interest income (GAAP) | $ | 14,569 | $ | 14,193 | $ | 13,847 | $ | 14,137 | $ | 14,020 | $ | 42,609 | $ | 42,183 | ||||||||||||||
| Total noninterest income (GAAP) | 2,002 | 2,170 | 3,777 | 1,300 | 1,779 | 7,949 | 11,314 | |||||||||||||||||||||
| Total revenue (GAAP) | 16,571 | 16,363 | 17,624 | 15,437 | 15,799 | 50,558 | 53,497 | |||||||||||||||||||||
| Total noninterest expense (GAAP) | 17,390 | 12,765 | 20,000 | 14,233 | 15,848 | 50,155 | 45,760 | |||||||||||||||||||||
| PPNR (Non-GAAP)(1) | (819 | ) | 3,598 | (2,376 | ) | 1,204 | (49 | ) | 403 | 7,737 | ||||||||||||||||||
| Less selected nonrecurring adjustments to PPNR (Non-GAAP): | ||||||||||||||||||||||||||||
| Executive transition costs included in compensation and professional fees | (1,159 | ) | - | - | - | - | (1,159 | ) | - | |||||||||||||||||||
| Employee retention credit ("ERC") included in compensation | - | 2,640 | - | - | - | 2,640 | - | |||||||||||||||||||||
| ERC consulting expense included in professional fees | - | (528 | ) | - | - | - | (528 | ) | - | |||||||||||||||||||
| Costs associated with early termination of Bellevue Business Center lease included in other expense | - | (599 | ) | - | - | - | (599 | ) | - | |||||||||||||||||||
| Bank-owned life insurance ("BOLI") death benefit | - | - | 1,059 | 1,536 | - | 1,059 | - | |||||||||||||||||||||
| Gain on extinguishment of subordinated debt included in other income | - | - | 846 | - | - | 846 | - | |||||||||||||||||||||
| Legal reserve included in other expense | - | - | (5,750 | ) | - | - | (5,750 | ) | - | |||||||||||||||||||
| Equity investment repricing adjustment included in other income | - | - | - | (1,762 | ) | - | - | 651 | ||||||||||||||||||||
| One-time compensation payouts related to reduction in force | - | - | - | - | (996 | ) | - | (996 | ) | |||||||||||||||||||
| Net gain on sale of premises and equipment | - | - | - | - | - | - | 7,919 | |||||||||||||||||||||
| Sale leaseback taxes and assessments included in occupancy and equipment | - | - | - | - | - | - | (359 | ) | ||||||||||||||||||||
| Net gain on sale of investment securities | - | - | - | - | - | - | (2,117 | ) | ||||||||||||||||||||
| Adjusted PPNR (Non-GAAP)(1) | $ | 340 | $ | 2,085 | $ | 1,469 | $ | 1,430 | $ | 947 | $ | 3,894 | $ | 2,639 | ||||||||||||||
(1) See reconciliation of Non-GAAP Financial Measures later in this release.
| • | Total interest income decreased $221,000 to $26.9 million for the third quarter of 2025, compared to $27.1 million for the preceding quarter, and decreased $1.3 million compared to $28.2 million in the third quarter of 2024. Interest income decreased in the third quarter of 2025 primarily due to decreased average balances of interest-earning assets. Average real estate and commercial business loan balances decreased while average consumer loan balances increased over the preceding quarter. | |
| • | Total interest expense decreased $597,000 to $12.3 million for the third quarter of 2025, compared to $12.9 million for the preceding quarter, and decreased $1.8 million compared to $14.2 million in the third quarter of 2024. Interest expense decreased in the third quarter of 2025 primarily due to a reduced volumes of brokered CDs and decreases in interest paid on customer CDs, brokered CDs and demand deposits. These decreases were partially offset by increases in the average balances and interest paid on money market and savings accounts. Advances also had reduced volumes and a decrease in the rate paid during the current quarter. | |
| • | Net interest margin increased to 2.91% for the third quarter of 2025, from 2.83% for the preceding quarter and 2.70% for the third quarter of 2024, marking five consecutive quarters of improvement. | |
| • | Noninterest income decreased $168,000 to $2.0 million for the third quarter of 2025, from $2.2 million for the preceding quarter. A period-over-period decrease in the value of equity and fintech partnership investments was recorded for the current quarter. | |
| • | Noninterest expense increased $4.6 million to $17.4 million for the third quarter of 2025, compared to $12.8 million for the preceding quarter. The preceding quarter of 2025 included a nonrecurring ERC reduction to compensation and benefits totaling $2.6 million. Current quarter increases include nonrecurring costs related to the executive management transition of $1.1 million recorded in compensation and benefits and $105,000 for executive search fees recorded in professional fees. The $1.6 million increase in legal fees over the preceding quarter recorded in professional fees is due to the ongoing legal matters previously disclosed. |
Allowance for Credit Losses on Loans ("ACLL") and Credit Quality
The allowance for credit losses on loans ("ACLL") decreased $2.1 million to $16.2 million at September 30, 2025, from $18.4 million at June 30, 2025. The ACLL as a percentage of total loans was 1.00% at September 30, 2025, a decrease from 1.10% at June 30, 2025, and from 1.27% one year earlier. A $2.1 million decline in the overall pooled loan reserve, driven primarily by reduced loan balances combined with a decrease in the loss factor applied to one-to-four family loans, was partially offset by net loan charge-offs totaling $1.5 million, contributing to a recapture of provision expense of $620,000 for the quarter ended September 30, 2025.
Nonperforming loans decreased $7.0 million to $13.4 million at September 30, 2025, from $20.4 million at June 30, 2025. Current quarter activity included a $4.9 million decrease due to the sale of a commercial construction loan and charged-off balances totaling $1.6 million. ACLL to nonperforming loans increased to 121% at September 30, 2025, from 90% at June 30, 2025, and from 72% at September 30, 2024. This ratio has increased as nonperforming loan balances have decreased due to principal payments, sales and charge-offs.
Classified loans decreased $7.1 million to $23.9 million at September 30, 2025, from $30.9 million at June 30, 2025, primarily due to the sale of a $4.9 million commercial construction loan, payments received of $1.6 million and commercial loan net charge-offs totaling $1.9 million, partially offset by $1.8 million of consumer loan downgrades. Three collateral dependent loans totaling $16.1 million account for 68% of the classified loan balance at September 30, 2025. The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in the largest of these four collateral-dependent relationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 12 loans totaling $149,000 included in classified loans at September 30, 2025, and one additional loan totaling $210,000 included in the special mention risk grading category.
| For the Quarter Ended | ||||||||||||||||||||
| ACLL ($ in thousands) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | |||||||||||||||
| Balance at beginning of period | $ | 18,345 | $ | 20,569 | $ | 20,449 | $ | 21,970 | $ | 19,343 | ||||||||||
| Charge-offs: | ||||||||||||||||||||
| Commercial real estate | (656 | ) | (15 | ) | (5,571 | ) | - | - | ||||||||||||
| Construction and land | (483 | ) | - | (374 | ) | (411 | ) | - | ||||||||||||
| Auto and other consumer | (106 | ) | (273 | ) | (243 | ) | (364 | ) | (492 | ) | ||||||||||
| Commercial business | (1,005 | ) | (2,823 | ) | (1,513 | ) | (4,596 | ) | (24 | ) | ||||||||||
| Total charge-offs | (2,250 | ) | (3,111 | ) | (7,701 | ) | (5,371 | ) | (516 | ) | ||||||||||
| Recoveries: | ||||||||||||||||||||
| One-to-four family | - | - | - | - | 42 | |||||||||||||||
| Commercial real estate | 6 | 20 | 6 | 2 | - | |||||||||||||||
| Construction and land | - | 5 | - | - | - | |||||||||||||||
| Auto and other consumer | 47 | 74 | 43 | 52 | 24 | |||||||||||||||
| Commercial business | 675 | 1,084 | 2 | 36 | - | |||||||||||||||
| Total recoveries | 728 | 1,183 | 51 | 90 | 66 | |||||||||||||||
| Net loan charge-offs | (1,522 | ) | (1,928 | ) | (7,650 | ) | (5,281 | ) | (450 | ) | ||||||||||
| (Recapture of) provision for credit losses | (620 | ) | (296 | ) | 7,770 | 3,760 | 3,077 | |||||||||||||
| Balance at end of period | $ | 16,203 | $ | 18,345 | $ | 20,569 | $ | 20,449 | $ | 21,970 | ||||||||||
| Average total loans | $ | 1,650,340 | $ | 1,658,723 | $ | 1,662,164 | $ | 1,708,232 | $ | 1,718,402 | ||||||||||
| Annualized net charge-offs to average outstanding loans | 0.37 | % | 0.47 | % | 1.87 | % | 1.23 | % | 0.10 | % | ||||||||||
| Asset Quality ($ in thousands) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | |||||||||||||||
| Nonaccrual loans: | ||||||||||||||||||||
| One-to-four family | $ | 2,345 | $ | 2,274 | $ | 1,404 | $ | 1,477 | $ | 1,631 | ||||||||||
| Commercial real estate | 3,439 | 4,095 | 4 | 5,598 | 5,634 | |||||||||||||||
| Construction and land | 6,037 | 13,063 | 15,280 | 19,544 | 19,382 | |||||||||||||||
| Home equity | 9 | 10 | 54 | 55 | 116 | |||||||||||||||
| Auto and other consumer | 1,072 | 410 | 710 | 700 | 894 | |||||||||||||||
| Commercial business | 470 | 514 | 2,903 | 3,141 | 2,719 | |||||||||||||||
| Total nonaccrual loans | 13,372 | 20,366 | 20,355 | 30,515 | 30,376 | |||||||||||||||
| Other real estate owned | 1,377 | 1,297 | - | - | - | |||||||||||||||
| Total nonperforming assets | $ | 14,749 | $ | 21,663 | $ | 20,355 | $ | 30,515 | $ | 30,376 | ||||||||||
| Nonaccrual loans as a % of total loans (1) | 0.82 | % | 1.22 | % | 1.23 | % | 1.80 | % | 1.75 | % | ||||||||||
| Nonperforming assets as a % of total assets (2) | 0.70 | 0.99 | 0.94 | 1.37 | 1.35 | |||||||||||||||
| ACLL as a % of total loans | 1.00 | 1.10 | 1.24 | 1.21 | 1.27 | |||||||||||||||
| ACLL as a % of nonaccrual loans | 121.17 | 90.08 | 101.05 | 67.01 | 72.33 | |||||||||||||||
| Total past due loans to total loans | 0.88 | 1.17 | 1.36 | 1.98 | 1.92 | |||||||||||||||
| (1 | ) | Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. |
| (2 | ) | Nonperforming assets consists of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), real estate owned and repossessed assets. |
Financial Condition and Capital
Investment securities decreased $20.9 million, or 6.9%, to $282.6 million at September 30, 2025, compared to $303.5 million three months earlier, and decreased $28.3 million compared to $310.9 million at September 30, 2024. Maturities totaling $16.3 million and regular principal payments totaling $9.3 million were partially offset by a $4.8 million reduction of net unrealized losses during the third quarter of 2025. The estimated average life of the securities portfolio was approximately 6.9 years at September 30, 2025, 7.6 years at the preceding quarter end and 7.4 years at the end of the third quarter of 2024. The effective duration of the portfolio was approximately 4.8 years at September 30, 2025, compared to 4.9 years at the preceding quarter end and 3.9 years at the end of the third quarter of 2024.
| Investment Securities ($ in thousands) | September 30, 2025 | June 30, 2025 | September 30, 2024 | Three Month % Change | One Year % Change | |||||||||||||||
| Available for Sale at Fair Value | ||||||||||||||||||||
| Municipal bonds | $ | 79,621 | $ | 77,324 | $ | 81,363 | 3.0 | % | -2.1 | % | ||||||||||
| U.S. government agency issued asset-backed securities (ABS agency) | 12,169 | 12,298 | 13,296 | -1.0 | -8.5 | |||||||||||||||
| Corporate issued asset-backed securities (ABS corporate) | 9,881 | 13,105 | 16,391 | -24.6 | -39.7 | |||||||||||||||
| Corporate issued debt securities (Corporate debt) | 43,339 | 55,760 | 54,058 | -22.3 | -19.8 | |||||||||||||||
| U.S. Small Business Administration securities (SBA) | 6,977 | 7,504 | 9,317 | -7.0 | -25.1 | |||||||||||||||
| Mortgage-backed securities: | ||||||||||||||||||||
| U.S. government agency issued mortgage-backed securities (MBS agency) | 94,203 | 96,014 | 78,549 | -1.9 | 19.9 | |||||||||||||||
| Non-agency issued mortgage-backed securities (MBS non-agency) | 36,418 | 41,510 | 57,886 | -12.3 | -37.1 | |||||||||||||||
| Total securities available for sale | $ | 282,608 | $ | 303,515 | $ | 310,860 | -6.9 | -9.1 |
Net loans, excluding loans held for sale, decreased $39.4 million, or 2.4%, to $1.61 billion at September 30, 2025, from $1.65 billion at June 30, 2025, and decreased $106.6 million, or 6.2%, from $1.71 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $2.4 million. Loan payoffs of $73.7 million, regular payments of $32.5 million and charge-offs totaling $2.2 million outpaced new loan funding totaling $40.9 million and draws on existing loans totaling $25.3 million.
| Loans ($ in thousands) | September 30, 2025 | June 30, 2025 | September 30, 2024 | Three Month % Change | One Year % Change | |||||||||||||||
| Real Estate: | ||||||||||||||||||||
| One-to-four family | $ | 382,486 | $ | 387,459 | $ | 395,792 | -1.3 | % | -3.4 | % | ||||||||||
| Multi-family | 296,321 | 329,696 | 353,813 | -10.1 | -16.2 | |||||||||||||||
| Commercial real estate | 396,519 | 391,362 | 376,008 | 1.3 | 5.5 | |||||||||||||||
| Construction and land | 67,793 | 72,538 | 95,709 | -6.5 | -29.2 | |||||||||||||||
| Total real estate loans | 1,143,119 | 1,181,055 | 1,221,322 | -3.2 | -6.4 | |||||||||||||||
| Consumer: | ||||||||||||||||||||
| Home equity | 86,629 | 84,927 | 76,960 | 2.0 | 12.6 | |||||||||||||||
| Auto and other consumer | 280,224 | 280,877 | 281,198 | -0.2 | -0.3 | |||||||||||||||
| Total consumer loans | 366,853 | 365,804 | 358,158 | 0.3 | 2.4 | |||||||||||||||
| Commercial business | 113,160 | 117,843 | 155,327 | -4.0 | -27.1 | |||||||||||||||
| Total loans receivable | 1,623,132 | 1,664,702 | 1,734,807 | -2.5 | -6.4 | |||||||||||||||
| Less: | ||||||||||||||||||||
| Derivative basis adjustment | (896 | ) | (860 | ) | (1,579 | ) | -4.2 | 43.3 | ||||||||||||
| Allowance for credit losses on loans | 16,203 | 18,345 | 21,970 | -11.7 | -26.2 | |||||||||||||||
| Total loans receivable, net | $ | 1,607,825 | $ | 1,647,217 | $ | 1,714,416 | -2.4 | -6.2 |
Other decreases to total assets during the quarter included a $4.1 million reduction in the balance of FHLB stock required to be held. Other assets decreased during the current quarter primarily due to the return of $9.1 million for a BOLI policy surrendered in the first quarter of 2025.
Total deposits decreased $1.3 million to $1.65 billion at September 30, 2025, compared to $1.65 billion at June 30, 2025, and decreased $58.3 million compared to $1.71 billion one year prior. During the third quarter of 2025, total customer deposit balances increased $1.3 million and brokered deposit balances decreased $2.6 million. The customer deposit mix continues to shift towards increased average balances of money market, savings and noninterest-bearing demand accounts while interest-bearing demand deposit and CD account average balances decreased. The deposit mix compared to September 30, 2024, reflects a shift in average balances to money market and customer CD accounts while the average balance of brokered CDs decreased. The rates paid on all interest-bearing accounts decreased compared to the same quarter one year ago.
| Deposits ($ in thousands) | September 30, 2025 | June 30, 2025 | September 30, 2024 | Three Month % Change | One Year % Change | |||||||||||||||
| Noninterest-bearing demand deposits | $ | 255,366 | $ | 240,051 | $ | 252,999 | 6.4 | % | 0.9 | % | ||||||||||
| Interest-bearing demand deposits | 146,373 | 144,409 | 167,202 | 1.4 | -12.5 | |||||||||||||||
| Money market accounts | 475,614 | 484,787 | 433,307 | -1.9 | 9.8 | |||||||||||||||
| Savings accounts | 232,831 | 227,968 | 212,763 | 2.1 | 9.4 | |||||||||||||||
| Certificates of deposit, customer | 438,780 | 450,494 | 441,665 | -2.6 | -0.7 | |||||||||||||||
| Certificates of deposit, brokered | 104,363 | 106,927 | 203,705 | -2.4 | -48.8 | |||||||||||||||
| Total deposits | $ | 1,653,327 | $ | 1,654,636 | $ | 1,711,641 | -0.1 | -3.4 |
Total shareholders' equity increased to $154.5 million at September 30, 2025, compared to $149.7 million three months earlier, due to an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $3.7 million and net income of $802,000. No shares of common stock were repurchased under the Company's April 2024 Stock Repurchase Plan (the "Repurchase Plan") during the quarter ended September 30, 2025. There are 846,123 shares that remain available for repurchase under the Repurchase Plan.
Capital levels for both the Company and the Bank remain in excess of applicable regulatory requirements and the Bank was categorized as "well-capitalized" at September 30, 2025. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at September 30, 2025, were 12.7% and 13.7%, respectively.
| 2025 Awards/Recognition | |||||||||
| Sound Publishing: | |||||||||
| Forbes Best-in-State Banks | Best Bank in Clallam County | ||||||||
| Bellingham Best of the Northwest - Best Bank Silver | Best Lender in Clallam County and West End | ||||||||
 |  |  |  | ||||||
| 2024 Awards/Recognition | ||||||||
| Sound Publishing: | ||||||||
| Puget Sound Business Journal Top Corporate Philanthropists | Best of the Olympic Peninsula Awards | |||||||
| Bellingham Best of the Northwest - Silver | Best Lender in Clallam and Jefferson County | |||||||
| The Leader Readers Choice Award - Best Bank | Best Bank in Clallam County and West End | |||||||
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About the Company
First Northwest Bancorp (Nasdaq: FNWB) is a financial holding company engaged in investment activities including the business of its subsidiary, First Fed Bank. First Fed is a Pacific Northwest-based financial institution which has served its customers and communities since 1923. Currently First Fed has 17 locations in Washington state including 12 full-service branches. First Fed's business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. First Northwest has also strategically invested in partnerships focused on developing modern financial solutions and a boutique investment banking/accelerator firm. These investments underscore the Company's commitment to innovation and growth in the financial services sector. First Northwest Bancorp was incorporated in 2012 and completed its initial public offering in 2015 under the ticker symbol FNWB. The Company is headquartered in Port Angeles, Washington.
Forward-Looking Statements
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, projections of future performance and execution on certain strategies, perceived opportunities in the market, potential future credit experience, including our ability to collect, the outcome of litigation and statements regarding our mission and vision, and include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements often identified by words such as "believes," "expects," "anticipates," "estimates," or similar expressions. These forward-looking statements are based upon current management beliefs and expectations and may, therefore, involve risks and uncertainties, many of which are beyond our control. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety of factors including, but not limited to: increased competitive pressures; changes in the interest rate environment; the credit risks of lending activities; pressures on liquidity, including as a result of withdrawals of deposits or declines in the value of our investment portfolio; changes in general economic conditions and conditions within the securities markets, including potential recessionary and other unfavorable conditions and trends relating to housing markets, unemployment levels, interest rates and inflationary pressures, among other things; legislative, regulatory, and policy changes; legal proceedings, regulatory investigations and their resolutions; and other factors described in the Company's latest Annual Report on Form 10-K under the section entitled "Risk Factors," and other filings with the Securities and Exchange Commission ("SEC"),which are available on our website at www.ourfirstfed.com and on the SEC's website at www.sec.gov.
Any of the forward-looking statements that we make in this press release and in the other public statements we make may turn out to be incorrect because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed or implied in any forward-looking statements made by or on our behalf and the Company's operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim 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. These risks could cause our actual results for 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Company's operations and stock price performance.
For More Information Contact:
Curt Queyrouze, President and Chief Executive Officer
Phyllis Nomura, Chief Financial Officer and EVP
IRGroup@ourfirstfed.com
360-457-0461
| FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (Unaudited) | ||||||||||||||||||||
| September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 15,688 | $ | 18,487 | $ | 18,911 | $ | 16,811 | $ | 17,953 | ||||||||||
| Interest-earning deposits in banks | 63,482 | 69,376 | 51,412 | 55,637 | 64,769 | |||||||||||||||
| Investment securities available for sale, at fair value (amortized cost at each period end of $310,545, $336,206, $348,249, $376,265 and $341,011) | 282,608 | 303,515 | 315,433 | 340,344 | 310,860 | |||||||||||||||
| Loans held for sale | 2,154 | 1,557 | 2,940 | 472 | 378 | |||||||||||||||
| Loans receivable (net of allowance for credit losses on loans at each period end of $16,203, $18,345, $20,569, $20,449, and $21,970) | 1,607,825 | 1,647,217 | 1,637,573 | 1,675,186 | 1,714,416 | |||||||||||||||
| Federal Home Loan Bank (FHLB) stock, at cost | 10,856 | 14,906 | 13,106 | 14,435 | 14,435 | |||||||||||||||
| Accrued interest receivable | 8,160 | 8,305 | 8,319 | 8,159 | 8,939 | |||||||||||||||
| Premises and equipment, net | 8,788 | 8,999 | 9,870 | 10,129 | 10,436 | |||||||||||||||
| Servicing rights on sold loans, at fair value | 3,093 | 3,220 | 3,301 | 3,281 | 3,584 | |||||||||||||||
| Bank-owned life insurance ("BOLI"), net | 41,889 | 41,380 | 31,786 | 41,150 | 41,429 | |||||||||||||||
| Equity and partnership investments | 15,048 | 14,811 | 15,026 | 13,229 | 14,912 | |||||||||||||||
| Goodwill and other intangible assets, net | 1,080 | 1,081 | 1,082 | 1,082 | 1,083 | |||||||||||||||
| Deferred tax asset, net | 14,168 | 14,266 | 14,304 | 13,738 | 10,802 | |||||||||||||||
| Right-of-use ("ROU") asset, net | 15,494 | 15,772 | 16,687 | 17,001 | 17,315 | |||||||||||||||
| Prepaid expenses and other assets | 21,040 | 32,471 | 31,680 | 21,352 | 24,175 | |||||||||||||||
| Total assets | $ | 2,111,373 | $ | 2,195,363 | $ | 2,171,430 | $ | 2,232,006 | $ | 2,255,486 | ||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
| Deposits | $ | 1,653,327 | $ | 1,654,636 | $ | 1,666,068 | $ | 1,688,026 | $ | 1,711,641 | ||||||||||
| Borrowings | 259,625 | 344,108 | 307,091 | 336,014 | 334,994 | |||||||||||||||
| Accrued interest payable | 1,145 | 1,514 | 2,163 | 3,295 | 2,153 | |||||||||||||||
| Lease liability, net | 16,071 | 16,257 | 17,266 | 17,535 | 17,799 | |||||||||||||||
| Accrued expenses and other liabilities | 24,321 | 27,790 | 29,767 | 31,770 | 25,625 | |||||||||||||||
| Advances from borrowers for taxes and insurance | 2,356 | 1,325 | 2,583 | 1,484 | 2,485 | |||||||||||||||
| Total liabilities | 1,956,845 | 2,045,630 | 2,024,938 | 2,078,124 | 2,094,697 | |||||||||||||||
| Shareholders' Equity | ||||||||||||||||||||
| Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding | - | - | - | - | - | |||||||||||||||
| Common stock, $0.01 par value, 75,000,000 shares authorized; issued and outstanding at each period end: 9,462,150; 9,444,963; 9,440,618; 9,353,348; and 9,365,979 | 94 | 94 | 94 | 93 | 94 | |||||||||||||||
| Additional paid-in capital | 93,646 | 93,595 | 93,450 | 93,357 | 93,218 | |||||||||||||||
| Retained earnings | 91,317 | 90,506 | 87,506 | 97,198 | 100,660 | |||||||||||||||
| Accumulated other comprehensive loss, net of tax | (24,429 | ) | (28,198 | ) | (28,129 | ) | (30,172 | ) | (26,424 | ) | ||||||||||
| Unearned employee stock ownership plan (ESOP) shares | (6,100 | ) | (6,264 | ) | (6,429 | ) | (6,594 | ) | (6,759 | ) | ||||||||||
| Total shareholders' equity | 154,528 | 149,733 | 146,492 | 153,882 | 160,789 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 2,111,373 | $ | 2,195,363 | $ | 2,171,430 | $ | 2,232,006 | $ | 2,255,486 | ||||||||||
8
| FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited) | ||||||||||||||||||||||||||||
| For the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||||||
| Interest and fees on loans receivable | $ | 22,814 | $ | 22,814 | $ | 22,231 | $ | 23,716 | $ | 23,536 | $ | 67,859 | $ | 70,036 | ||||||||||||||
| Interest on investment securities | 3,244 | 3,466 | 3,803 | 3,658 | 3,786 | 10,513 | 11,367 | |||||||||||||||||||||
| Interest on deposits in banks | 570 | 520 | 482 | 550 | 582 | 1,572 | 1,798 | |||||||||||||||||||||
| FHLB dividends | 282 | 331 | 307 | 273 | 302 | 920 | 942 | |||||||||||||||||||||
| Total interest income | 26,910 | 27,131 | 26,823 | 28,197 | 28,206 | 80,864 | 84,143 | |||||||||||||||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||||||
| Deposits | 9,083 | 9,552 | 9,737 | 11,175 | 10,960 | 28,372 | 31,252 | |||||||||||||||||||||
| Borrowings | 3,258 | 3,386 | 3,239 | 2,885 | 3,226 | 9,883 | 10,708 | |||||||||||||||||||||
| Total interest expense | 12,341 | 12,938 | 12,976 | 14,060 | 14,186 | 38,255 | 41,960 | |||||||||||||||||||||
| Net interest income | 14,569 | 14,193 | 13,847 | 14,137 | 14,020 | 42,609 | 42,183 | |||||||||||||||||||||
| PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||||
| (Recapture of) provision for credit losses on loans | (620 | ) | (296 | ) | 7,770 | 3,760 | 3,077 | 6,854 | 12,956 | |||||||||||||||||||
| (Recapture of) provision for credit losses on unfunded commitments | (53 | ) | (64 | ) | 15 | (105 | ) | 57 | (102 | ) | (113 | ) | ||||||||||||||||
| (Recapture of) provision for credit losses | (673 | ) | (360 | ) | 7,785 | 3,655 | 3,134 | 6,752 | 12,843 | |||||||||||||||||||
| Net interest income after (recapture of) provision for credit losses | 15,242 | 14,553 | 6,062 | 10,482 | 10,886 | 35,857 | 29,340 | |||||||||||||||||||||
| NONINTEREST INCOME | ||||||||||||||||||||||||||||
| Loan and deposit service fees | 1,114 | 1,095 | 1,106 | 1,054 | 1,059 | 3,315 | 3,237 | |||||||||||||||||||||
| Sold loan servicing fees and servicing rights mark-to-market | 85 | 92 | 195 | (115 | ) | 10 | 372 | 303 | ||||||||||||||||||||
| Net (loss) gain on sale of loans | (39 | ) | 44 | 11 | 52 | 58 | 16 | 260 | ||||||||||||||||||||
| Increase in BOLI cash surrender value | 539 | 485 | 372 | 328 | 315 | 1,396 | 851 | |||||||||||||||||||||
| Income from BOLI death benefit, net | - | - | 1,059 | 1,536 | - | 1,059 | - | |||||||||||||||||||||
| Other income (loss) | 303 | 454 | 1,034 | (1,555 | ) | 337 | 1,791 | 861 | ||||||||||||||||||||
| Total noninterest income | 2,002 | 2,170 | 3,777 | 1,300 | 1,779 | 7,949 | 11,314 | |||||||||||||||||||||
| NONINTEREST EXPENSE | ||||||||||||||||||||||||||||
| Compensation and benefits | 8,353 | 4,698 | 7,715 | 7,367 | 8,582 | 20,766 | 25,298 | |||||||||||||||||||||
| Data processing | 1,941 | 1,926 | 2,011 | 2,065 | 2,085 | 5,878 | 6,037 | |||||||||||||||||||||
| Occupancy and equipment | 1,505 | 1,507 | 1,592 | 1,559 | 1,553 | 4,604 | 4,592 | |||||||||||||||||||||
| Supplies, postage, and telephone | 344 | 346 | 298 | 296 | 360 | 988 | 970 | |||||||||||||||||||||
| Regulatory assessments and state taxes | 558 | 501 | 479 | 460 | 548 | 1,538 | 1,518 | |||||||||||||||||||||
| Advertising | 282 | 299 | 265 | 362 | 409 | 846 | 1,095 | |||||||||||||||||||||
| Professional fees | 2,668 | 1,449 | 777 | 813 | 698 | 4,894 | 2,292 | |||||||||||||||||||||
| FDIC insurance premium | 411 | 463 | 434 | 491 | 533 | 1,308 | 1,392 | |||||||||||||||||||||
| Other expense | 1,328 | 1,576 | 6,429 | 820 | 1,080 | 9,333 | 2,566 | |||||||||||||||||||||
| Total noninterest expense | 17,390 | 12,765 | 20,000 | 14,233 | 15,848 | 50,155 | 45,760 | |||||||||||||||||||||
| (Loss) income before (benefit) provision for income taxes | (146 | ) | 3,958 | (10,161 | ) | (2,451 | ) | (3,183 | ) | (6,349 | ) | (5,106 | ) | |||||||||||||||
| (Benefit) provision for income taxes | (948 | ) | 297 | (1,125 | ) | 359 | (1,203 | ) | (1,776 | ) | (1,303 | ) | ||||||||||||||||
| Net income (loss) | $ | 802 | $ | 3,661 | $ | (9,036 | ) | $ | (2,810 | ) | $ | (1,980 | ) | $ | (4,573 | ) | $ | (3,803 | ) | |||||||||
| Basic and diluted earnings (loss) per common share | $ | 0.09 | $ | 0.42 | $ | (1.03 | ) | $ | (0.32 | ) | $ | (0.23 | ) | $ | (0.52 | ) | $ | (0.43 | ) | |||||||||
| FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited) | ||||||||||||||||||||
| Selected Loan Detail | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | |||||||||||||||
| Construction and land loans breakout | ||||||||||||||||||||
| 1-4 Family construction | $ | 29,961 | $ | 39,040 | $ | 42,371 | $ | 39,319 | $ | 43,125 | ||||||||||
| Multifamily construction | 15,660 | 14,728 | 9,223 | 15,407 | 29,109 | |||||||||||||||
| Nonresidential construction | 16,484 | 12,832 | 7,229 | 16,857 | 17,500 | |||||||||||||||
| Land and development | 5,688 | 5,938 | 6,054 | 6,527 | 5,975 | |||||||||||||||
| Total construction and land loans | $ | 67,793 | $ | 72,538 | $ | 64,877 | $ | 78,110 | $ | 95,709 | ||||||||||
| Auto and other consumer loans breakout | ||||||||||||||||||||
| Triad Manufactured Home loans | $ | 133,425 | $ | 135,537 | $ | 134,740 | $ | 128,231 | $ | 129,600 | ||||||||||
| Woodside auto loans | 131,800 | 127,828 | 118,972 | 117,968 | 126,129 | |||||||||||||||
| First Help auto loans | 9,561 | 11,221 | 13,012 | 14,283 | 15,971 | |||||||||||||||
| Other auto loans | 767 | 1,016 | 1,313 | 1,647 | 2,064 | |||||||||||||||
| Other consumer loans | 4,671 | 5,275 | 5,841 | 6,747 | 7,434 | |||||||||||||||
| Total auto and other consumer loans | $ | 280,224 | $ | 280,877 | $ | 273,878 | $ | 268,876 | $ | 281,198 | ||||||||||
| Commercial business loans breakout | ||||||||||||||||||||
| Northpointe Bank MPP | $ | - | $ | - | $ | - | $ | 36,230 | $ | 38,155 | ||||||||||
| Secured lines of credit | 43,081 | 41,043 | 39,986 | 35,701 | 37,686 | |||||||||||||||
| Unsecured lines of credit | 2,580 | 2,551 | 2,030 | 1,717 | 1,571 | |||||||||||||||
| SBA loans | 6,347 | 6,618 | 6,889 | 7,044 | 7,219 | |||||||||||||||
| Other commercial business loans | 61,152 | 67,631 | 70,878 | 70,801 | 70,696 | |||||||||||||||
| Total commercial business loans | $ | 113,160 | $ | 117,843 | $ | 119,783 | $ | 151,493 | $ | 155,327 | ||||||||||
| Loans by Collateral and Unfunded Commitments | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | |||||||||||||||
| One-to-four family construction | $ | 31,627 | $ | 40,509 | $ | 38,221 | $ | 44,468 | $ | 51,607 | ||||||||||
| All other construction and land | 36,161 | 36,129 | 30,947 | 34,290 | 45,166 | |||||||||||||||
| One-to-four family first mortgage | 415,670 | 420,847 | 428,081 | 466,046 | 469,053 | |||||||||||||||
| One-to-four family junior liens | 20,568 | 20,116 | 15,155 | 15,090 | 14,701 | |||||||||||||||
| One-to-four family revolving open-end | 58,486 | 57,502 | 51,832 | 51,481 | 48,459 | |||||||||||||||
| Commercial real estate, owner occupied: | ||||||||||||||||||||
| Health care | 28,794 | 29,091 | 29,386 | 29,129 | 29,407 | |||||||||||||||
| Office | 18,499 | 19,116 | 19,363 | 17,756 | 17,901 | |||||||||||||||
| Warehouse | 7,684 | 7,432 | 9,272 | 14,948 | 11,645 | |||||||||||||||
| Other | 73,562 | 74,364 | 74,915 | 78,170 | 64,535 | |||||||||||||||
| Commercial real estate, non-owner occupied: | ||||||||||||||||||||
| Office | 40,917 | 42,198 | 41,885 | 49,417 | 49,770 | |||||||||||||||
| Retail | 50,839 | 51,708 | 50,737 | 49,591 | 49,717 | |||||||||||||||
| Hospitality | 63,953 | 64,308 | 62,226 | 61,919 | 62,282 | |||||||||||||||
| Other | 106,991 | 93,505 | 93,549 | 81,640 | 82,573 | |||||||||||||||
| Multi-family residential | 297,379 | 330,784 | 339,217 | 333,419 | 354,118 | |||||||||||||||
| Commercial business loans | 68,062 | 73,403 | 75,628 | 77,381 | 86,904 | |||||||||||||||
| Commercial agriculture and fishing loans | 23,346 | 22,443 | 22,914 | 21,833 | 15,369 | |||||||||||||||
| State and political subdivision obligations | 369 | 369 | 369 | 369 | 404 | |||||||||||||||
| Consumer automobile loans | 142,064 | 139,992 | 133,209 | 133,789 | 144,036 | |||||||||||||||
| Consumer loans secured by other assets | 136,073 | 138,378 | 137,619 | 131,429 | 132,749 | |||||||||||||||
| Consumer loans unsecured | 2,088 | 2,508 | 3,051 | 3,658 | 4,411 | |||||||||||||||
| Total loans | $ | 1,623,132 | $ | 1,664,702 | $ | 1,657,576 | $ | 1,695,823 | $ | 1,734,807 | ||||||||||
| Unfunded commitments under lines of credit or existing loans | $ | 158,118 | $ | 166,589 | $ | 175,100 | $ | 163,827 | $ | 166,446 | ||||||||||
| FIRST NORTHWEST BANCORP AND SUBSIDIARY NET INTEREST MARGIN ANALYSIS (Dollars in thousands) (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended September 30, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| Average | Interest | Average | Interest | |||||||||||||||||||||
| Balance | Earned/ | Yield/ | Balance | Earned/ | Yield/ | |||||||||||||||||||
| Outstanding | Paid | Rate | Outstanding | Paid | Rate | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||
| Loans receivable, net (1) (2) | $ | 1,632,684 | $ | 22,814 | 5.54 | % | $ | 1,699,302 | $ | 23,536 | 5.51 | % | ||||||||||||
| Total investment securities | 293,723 | 3,244 | 4.38 | 307,623 | 3,786 | 4.90 | ||||||||||||||||||
| FHLB dividends | 12,810 | 282 | 8.73 | 12,697 | 302 | 9.46 | ||||||||||||||||||
| Interest-earning deposits in banks | 50,150 | 570 | 4.51 | 42,348 | 582 | 5.47 | ||||||||||||||||||
| Total interest-earning assets (3) | 1,989,367 | 26,910 | 5.37 | 2,061,970 | 28,206 | 5.44 | ||||||||||||||||||
| Noninterest-earning assets | 146,042 | 147,363 | ||||||||||||||||||||||
| Total average assets | $ | 2,135,409 | $ | 2,209,333 | ||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 141,469 | $ | 52 | 0.15 | $ | 166,846 | $ | 187 | 0.45 | ||||||||||||||
| Money market accounts | 464,265 | 2,832 | 2.42 | 431,346 | 2,875 | 2.65 | ||||||||||||||||||
| Savings accounts | 231,431 | 914 | 1.57 | 224,159 | 923 | 1.64 | ||||||||||||||||||
| Certificates of deposit, customer | 443,312 | 4,175 | 3.74 | 415,450 | 4,340 | 4.16 | ||||||||||||||||||
| Certificates of deposit, brokered | 103,959 | 1,110 | 4.24 | 215,016 | 2,635 | 4.88 | ||||||||||||||||||
| Total interest-bearing deposits (4) | 1,384,436 | 9,083 | 2.60 | 1,452,817 | 10,960 | 3.00 | ||||||||||||||||||
| Advances | 265,554 | 2,913 | 4.35 | 255,348 | 2,832 | 4.41 | ||||||||||||||||||
| Subordinated debt | 34,617 | 345 | 3.95 | 39,484 | 394 | 3.97 | ||||||||||||||||||
| Total interest-bearing liabilities | 1,684,607 | 12,341 | 2.91 | 1,747,649 | 14,186 | 3.23 | ||||||||||||||||||
| Noninterest-bearing deposits (4) | 251,448 | 252,911 | ||||||||||||||||||||||
| Other noninterest-bearing liabilities | 47,978 | 48,294 | ||||||||||||||||||||||
| Total average liabilities | 1,984,033 | 2,048,854 | ||||||||||||||||||||||
| Average equity | 151,376 | 160,479 | ||||||||||||||||||||||
| Total average liabilities and equity | $ | 2,135,409 | $ | 2,209,333 | ||||||||||||||||||||
| Net interest income | $ | 14,569 | $ | 14,020 | ||||||||||||||||||||
| Net interest rate spread | 2.46 | 2.21 | ||||||||||||||||||||||
| Net earning assets | $ | 304,760 | $ | 314,321 | ||||||||||||||||||||
| Net interest margin (5) | 2.91 | 2.70 | ||||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 118.1 | % | 118.0 | % | ||||||||||||||||||||
(1) The average loans receivable, net balances include nonaccrual loans.
(2) Interest earned on loans receivable includes net deferred (costs) fees of ($410,000) and $22,000 for the three months ended September 30, 2025 and 2024, respectively.
(3) Includes interest-earning deposits (cash) at other financial institutions.
(4) Cost of all deposits, including noninterest-bearing demand deposits, was 2.20% and 2.56% for the three months ended September 30, 2025 and 2024, respectively.
(5) Net interest income divided by average interest-earning assets.
FIRST NORTHWEST BANCORP AND SUBSIDIARY
ADDITIONAL INFORMATION
(Dollars in thousands) (Unaudited)
Non-GAAP Financial Measures
This press release contains financial measures that are not in conformity with generally accepted accounting principles in the United States of America ("GAAP"). Non-GAAP measures are presented where management believes the information will help investors understand the Company's results of operations or financial position and assess trends. Where non-GAAP financial measures are used, the comparable GAAP financial measure is also provided. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Reconciliations of the GAAP and non-GAAP measures are presented below.
Calculations Based on PPNR and Adjusted PPNR:
| For the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| (Dollars in thousands) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||||
| Net income (loss) (GAAP) | $ | 802 | $ | 3,661 | $ | (9,036 | ) | $ | (2,810 | ) | $ | (1,980 | ) | $ | (4,573 | ) | $ | (3,803 | ) | |||||||||
| Plus: (recapture of) provision for credit losses (GAAP) | (673 | ) | (360 | ) | 7,785 | 3,655 | 3,134 | 6,752 | 12,843 | |||||||||||||||||||
| (Benefit) provision for income taxes (GAAP) | (948 | ) | 297 | (1,125 | ) | 359 | (1,203 | ) | (1,776 | ) | (1,303 | ) | ||||||||||||||||
| PPNR (Non-GAAP) (1) | (819 | ) | 3,598 | (2,376 | ) | 1,204 | (49 | ) | 403 | 7,737 | ||||||||||||||||||
| Less selected nonrecurring adjustments to PPNR (Non-GAAP): | ||||||||||||||||||||||||||||
| Executive transition costs included in compensation and professional fees | (1,159 | ) | - | - | - | - | (1,159 | ) | - | |||||||||||||||||||
| Employee retention credit ("ERC") included in compensation | - | 2,640 | - | - | - | 2,640 | - | |||||||||||||||||||||
| ERC consulting expense included in professional fees | - | (528 | ) | - | - | - | (528 | ) | - | |||||||||||||||||||
| Costs associated with early termination of Bellevue Business Center lease included in other expense | - | (599 | ) | - | - | - | (599 | ) | - | |||||||||||||||||||
| Bank-owned life insurance ("BOLI") death benefit | - | - | 1,059 | 1,536 | - | 1,059 | - | |||||||||||||||||||||
| Gain on extinguishment of subordinated debt included in other income | - | - | 846 | - | - | 846 | - | |||||||||||||||||||||
| Legal reserve included in other expense | - | - | (5,750 | ) | - | - | (5,750 | ) | - | |||||||||||||||||||
| Equity investment repricing adjustment included in other income | - | - | - | (1,762 | ) | - | - | 651 | ||||||||||||||||||||
| One-time compensation payouts related to reduction in force | - | - | - | - | (996 | ) | - | (996 | ) | |||||||||||||||||||
| Net gain on sale of premises and equipment | - | - | - | - | - | - | 7,919 | |||||||||||||||||||||
| Sale leaseback taxes and assessments included in occupancy and equipment | - | - | - | - | - | - | (359 | ) | ||||||||||||||||||||
| Net gain on sale of investment securities | - | - | - | - | - | - | (2,117 | ) | ||||||||||||||||||||
| Adjusted PPNR (Non-GAAP) (1) | $ | 340 | $ | 2,085 | $ | 1,469 | $ | 1,430 | $ | 947 | $ | 3,894 | $ | 2,639 | ||||||||||||||
| Average total assets (GAAP) | $ | 2,135,409 | $ | 2,164,579 | $ | 2,174,748 | $ | 2,205,502 | $ | 2,209,333 | $ | 2,158,091 | $ | 2,198,337 | ||||||||||||||
| GAAP Ratio: | ||||||||||||||||||||||||||||
| Return on average assets (GAAP) | 0.15 | % | 0.68 | % | -1.69 | % | -0.51 | % | -0.36 | % | -0.28 | % | -0.23 | % | ||||||||||||||
| Non-GAAP Ratios: | ||||||||||||||||||||||||||||
| PPNR return on average assets (Non-GAAP) (1) | -0.15 | % | 0.67 | % | -0.44 | % | 0.22 | % | -0.01 | % | 0.02 | % | 0.47 | % | ||||||||||||||
| Adjusted PPNR return on average assets (Non-GAAP) (1) | 0.06 | % | 0.39 | % | 0.27 | % | 0.26 | % | 0.17 | % | 0.24 | % | 0.16 | % | ||||||||||||||
| (1) PPNR removes the provisions for credit loss and income tax from net income. This removes potentially volatile estimates, providing a comparative amount limited to income and expense recorded during the period. Adjusted PPNR further removes large nonrecurring transactions recorded during the period. We believe these metrics provide comparative amounts for a better review of recurring net revenue. |
| FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited) | ||||||||||||||||||||||||||||
| Calculations Based on Tangible Common Equity: | ||||||||||||||||||||||||||||
| For the Quarter Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
| (Dollars in thousands, except per share data) | September 30, 2025 | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | September 30, 2025 | September 30, 2024 | |||||||||||||||||||||
| Total shareholders' equity | $ | 154,528 | $ | 149,733 | $ | 146,492 | $ | 153,882 | $ | 160,789 | $ | 154,528 | $ | 160,789 | ||||||||||||||
| Less: Goodwill and other intangible assets | 1,080 | 1,081 | 1,082 | 1,082 | 1,083 | 1,080 | 1,083 | |||||||||||||||||||||
| Disallowed non-mortgage loan servicing rights | 317 | 372 | 415 | 423 | 489 | 317 | 489 | |||||||||||||||||||||
| Total tangible common equity | $ | 153,131 | $ | 148,280 | $ | 144,995 | $ | 152,377 | $ | 159,217 | $ | 153,131 | $ | 159,217 | ||||||||||||||
| Total assets | $ | 2,111,373 | $ | 2,195,363 | $ | 2,171,430 | $ | 2,232,006 | $ | 2,255,486 | $ | 2,111,373 | $ | 2,255,486 | ||||||||||||||
| Less: Goodwill and other intangible assets | 1,080 | 1,081 | 1,082 | 1,082 | 1,083 | 1,080 | 1,083 | |||||||||||||||||||||
| Disallowed non-mortgage loan servicing rights | 317 | 372 | 415 | 423 | 489 | 317 | 489 | |||||||||||||||||||||
| Total tangible assets | $ | 2,109,976 | $ | 2,193,910 | $ | 2,169,933 | $ | 2,230,501 | $ | 2,253,914 | $ | 2,109,976 | $ | 2,253,914 | ||||||||||||||
| Average shareholders' equity | $ | 151,376 | $ | 146,857 | $ | 156,470 | $ | 161,560 | $ | 160,479 | $ | 151,538 | $ | 161,803 | ||||||||||||||
| Less: Average goodwill and other intangible assets | 1,081 | 1,081 | 1,082 | 1,083 | 1,084 | 1,081 | 1,085 | |||||||||||||||||||||
| Average disallowed non-mortgage loan servicing rights | 371 | 415 | 423 | 489 | 517 | 403 | 496 | |||||||||||||||||||||
| Total average tangible common equity | $ | 149,924 | $ | 145,361 | $ | 154,965 | $ | 159,988 | $ | 158,878 | $ | 150,054 | $ | 160,222 | ||||||||||||||
| Net income (loss) | $ | 802 | $ | 3,661 | $ | (9,036 | ) | $ | (2,810 | ) | $ | (1,980 | ) | $ | (4,573 | ) | $ | (3,803 | ) | |||||||||
| Common shares outstanding | 9,462,150 | 9,444,963 | 9,440,618 | 9,353,348 | 9,365,979 | 9,462,150 | 9,365,979 | |||||||||||||||||||||
| GAAP Ratios: | ||||||||||||||||||||||||||||
| Equity to total assets | 7.32 | % | 6.82 | % | 6.75 | % | 6.89 | % | 7.13 | % | 7.32 | % | 7.13 | % | ||||||||||||||
| Return on average equity | 2.10 | % | 10.00 | % | -23.42 | % | -6.92 | % | -4.91 | % | -4.03 | % | -3.14 | % | ||||||||||||||
| Book value per common share | $ | 16.33 | $ | 15.85 | $ | 15.52 | $ | 16.45 | $ | 17.17 | $ | 16.33 | $ | 17.17 | ||||||||||||||
| Non-GAAP Ratios: | ||||||||||||||||||||||||||||
| Tangible common equity to tangible assets (1) | 7.26 | % | 6.76 | % | 6.68 | % | 6.83 | % | 7.06 | % | 7.26 | % | 7.06 | % | ||||||||||||||
| Return on average tangible common equity (1) | 2.12 | % | 10.10 | % | -23.65 | % | -6.99 | % | -4.96 | % | -4.07 | % | -3.17 | % | ||||||||||||||
| Tangible book value per common share (1) | $ | 16.18 | $ | 15.70 | $ | 15.36 | $ | 16.29 | $ | 17.00 | $ | 16.18 | $ | 17.00 | ||||||||||||||
| (1 | ) | We believe that the use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. |
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