☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or FIRST NORTHWEST BANCORP FORM 10-Q TABLE OF CONTENTS | (Exact name of registran ...

Financial Performance - First Northwest Bancorp reported net income of $1.5 million for Q1 2025, a significant improvement from a net loss of $2.8 million in Q4 2024 and net income of $396,000 in Q1 2024[1]. - Adjusted pre-tax, pre-provision net revenue (PPNR) for Q1 2025 was $1.5 million, up from $1.4 million in the previous quarter and $1.2 million in Q1 2024[2]. - Total revenue for Q1 2025 was $17.9 million, an increase from $15.4 million in the previous quarter[11]. - Net interest income after provision for credit losses increased to $12,279 thousand, compared to $10,482 thousand in the previous quarter, reflecting a 17.2% improvement[34]. - Net income for the quarter was $1,514 thousand, a recovery from a net loss of $2,810 thousand in the previous quarter[34]. - Basic and diluted earnings per share improved to $0.17, compared to a loss of $0.32 per share in the previous quarter[34]. - The return on average assets (GAAP) improved to 0.28% from -0.51% year-over-year[41]. Loan and Deposit Trends - Nonperforming loans decreased by $4.1 million, or 13.5%, to $26.4 million at March 31, 2025, compared to December 31, 2024[13]. - Total net loans decreased by $31.4 million, or 1.9%, to $1.64 billion at March 31, 2025, compared to $1.68 billion at December 31, 2024[19]. - Total deposits decreased by $22.0 million to $1.67 billion at March 31, 2025, compared to $1.69 billion at December 31, 2024[21]. - Commercial business loans decreased by $31.0 million, or 20.5%, compared to the previous quarter[20]. - Total loans outstanding as of March 31, 2025, were $1,663,849 thousand, a decrease from $1,695,823 thousand in the previous quarter[36]. Credit Quality and Allowance - The allowance for credit losses on loans increased to $20.6 million, representing 1.24% of total loans, up from 1.21% at the end of 2024[12]. - Provision for credit losses was $1.55 million for the quarter ended March 31, 2025, compared to $3.76 million for the previous quarter[19]. - Provision for credit losses on loans was $1,553 thousand, significantly lower than $3,760 thousand in the previous quarter, indicating improved credit quality[34]. - The provision for credit losses was $1,568 for the quarter, down from $3,655 in the previous quarter[41]. Expenses and Dividends - Total noninterest expense was relatively unchanged at $14.3 million for Q1 2025, consistent with the previous quarter and Q1 2024[15]. - Total noninterest expense remained stable at $14,249 thousand, slightly up from $14,233 thousand in the previous quarter[34]. - The company declared a quarterly cash dividend of $0.07 per common share, payable on May 23, 2025[2]. - First Northwest Bancorp paid cash dividends totaling $649,000 in Q1 2025, with no shares repurchased under the Stock Repurchase Plan[24]. Asset Management - Total assets as of March 31, 2025, were $2,176,430,000, a decrease from $2,232,006,000 as of December 31, 2024[32]. - Total liabilities were $2,019,388,000 as of March 31, 2025, compared to $2,078,124,000 as of December 31, 2024[32]. - Total shareholders' equity increased to $157.0 million at March 31, 2025, from $153.9 million three months earlier[21]. - Shareholders' equity increased to $157,042,000 as of March 31, 2025, from $153,882,000 as of December 31, 2024[32]. - The company maintained a book value per common share of $16.63, up from $16.45 in the previous quarter[42]. Strategic Initiatives - The company is evaluating the potential for future stock buybacks due to improved profitability[3]. - First Northwest Bancorp focuses on strategic partnerships to enhance modern financial services, including digital payments and marketplace lending[27]. - The company made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm in 2022[27]. - The company has 18 locations in Washington state, including 12 full-service branches[27]. - The company has 846,123 shares remaining available for repurchase under the Repurchase Plan[24]. Market and Economic Conditions - Forward-looking statements indicate potential risks including competitive pressures and changes in the interest rate environment[28]. - The effective duration of the investment securities portfolio was approximately 4.3 years at March 31, 2025[18]. - The market value of the investment securities portfolio increased by $3.1 million during the first quarter of 2025[18]. - Total interest income for the quarter ended March 31, 2025, was $26,823 thousand, a decrease of 4.2% from $28,197 thousand in the previous quarter[34]. - Total interest-earning assets increased to $2,031,741, with a yield of 5.35%, compared to $2,027,821 and a yield of 5.42% in 2024[38]. - The net interest margin remained stable at 2.76% for both periods[38].

First Northwest Bancorp (FNWB) came out with quarterly earnings of $0.17 per share, beating the Zacks Consensus Estimate of $0.12 per share. This compares to earnings of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 41.67%. A quarter ago, it was expected that this company would post earnings of $0.06 per share when it actually produced a loss of $0.32, delivering a surprise of -633.33%. Over the last four quarters, th ...

PORT ANGELES, Wash., March 27, 2025 (GLOBE NEWSWIRE) -- First Northwest Bancorp (NASDAQ: FNWB) and its subsidiary First Fed Bank (collectively the “Company”), today announced the promotion of Phyllis Nomura to Executive Vice President and Chief Financial Officer of First Fed. She will also serve as EVP/CFO and as Treasurer for First Northwest. Nomura joined First Fed as Senior Director of Accounting in November 2024. "We are excited to welcome Phyllis to our executive team. She was hired in 2024 as part of ...

Loan Portfolio and Performance - The commercial real estate and multi-family loans increased to $723.0 million, or 42.6% of the total loan portfolio, as of December 31, 2024, compared to $721.1 million, or 43.4% at December 31, 2023[256]. - The commercial loan portfolio rose to $874.5 million, or 51.6% of total loans, at December 31, 2024, up from $833.4 million, or 50.2% at December 31, 2023[261]. - Total consumer loans increased to $347.9 million, or 20.6% of total loans, at December 31, 2024, from $318.5 million, or 19.2% at December 31, 2023[261]. - The construction and land loans decreased by $51.6 million, or 39.8%, to $78.1 million, or 4.6% of the total loan portfolio at December 31, 2024[265]. - The aggregate amount of loans to the five largest borrowers was approximately $95.9 million, with the ten largest borrowing relationships totaling $165.7 million, or 9.8% of total loans, as of December 31, 2024[264]. - Unsecured loans to small businesses and professionals amounted to $21.1 million, while consumer loans purchased from Splash Financial were $7.3 million at December 31, 2024[259]. - Losses of $3.4 million have been experienced on the Splash Financial loans to date, with purchases of these loans suspended in August 2023[260]. - The company’s increased focus on commercial real estate lending has raised its risk profile, with potential adverse effects on future earnings due to larger charge-offs compared to consumer loans[257]. - As of December 31, 2024, the total loan portfolio included $474.4 million, or 28.0%, in one-to-four family mortgage loans and home equity loans secured by residential properties[269]. - Commercial business loans amounted to $151.5 million, representing 8.9% of total loans, with repayment often dependent on unpredictable cash flows[271]. - Nonperforming assets totaled $30.5 million, or 1.4% of total assets, which could adversely affect net income if delinquencies increase[275]. - The allowance for credit losses on loans may be insufficient, potentially leading to significant provisions that could materially decrease net income[273]. - Nonperforming loans rose by $11.9 million, or 63.7%, to $30.5 million at December 31, 2024, with the ratio of nonperforming loans to total loans increasing to 1.80% from 1.12%[347]. - The allowance for credit losses on loans increased by $2.9 million, or 16.8%, to $20.449 million at December 31, 2024, compared to $17.510 million at December 31, 2023[346]. Financial Performance and Income - Total assets increased by $30.2 million, or 1.4%, to $2.23 billion at December 31, 2024, from $2.2 billion at December 31, 2023[337]. - Net interest income decreased by $5.1 million, or 8.3%, to $56.3 million for the year ended December 31, 2024, as interest expense outpaced interest income[358]. - Interest income increased by $11.4 million, or 11.3%, to $112.3 million for the year ended December 31, 2024, primarily due to higher yields on loans receivable[361]. - Total interest expense rose by $16.6 million, or 41.9%, for the year ended December 31, 2024, driven by increased deposit and borrowing costs[364]. - The net interest margin decreased by 39 basis points to 2.74% for the year ended December 31, 2024, from 3.13% for the year ended December 31, 2023[359]. - Total provision for credit losses increased by $15.2 million to $16.5 million in 2024, compared to $1.3 million in 2023[365]. - Noninterest income surged to $12.6 million in 2024, up from $4.0 million in 2023, marking a 213.8% increase[366]. - Net interest income decreased to $56.3 million in 2024 from $61.4 million in 2023, a decline of 8.5%[371]. - The company recorded an income tax benefit of $944,000 in 2024, compared to an expense of $549,000 in 2023[368]. - The total average assets increased to $2.20 billion in 2024 from $2.11 billion in 2023[371]. - The company reported a comprehensive loss of $4,149 thousand in 2024, compared to a comprehensive income of $10,193 thousand in 2023[430]. - For the year ended December 31, 2024, the net loss before noncontrolling interest was $6.613 million, compared to a net income of $2.126 million in 2023[435]. Capital and Regulatory Compliance - As of December 31, 2024, First Northwest Bancorp's Tier I leverage capital was $208,836 thousand, representing a ratio of 9.4%, exceeding the minimum requirement of $88,930 thousand (4.0%) and the well-capitalized requirement of $111,163 thousand (5.0%) [399]. - The Common Equity Tier I (CET1) capital to risk-weighted assets ratio was 12.4% with an actual amount of $208,836 thousand, significantly above the minimum requirement of $75,515 thousand (4.5%) and the well-capitalized requirement of $109,077 thousand (6.5%) [399]. - Total risk-based capital to risk-weighted assets was 13.6% with an actual amount of $228,409 thousand, surpassing the minimum requirement of $134,248 thousand (8.0%) and the well-capitalized requirement of $167,810 thousand (10.0%) [399]. - The capital conservation buffer was fully implemented at 2.5% of risk-weighted assets as of December 31, 2024, ensuring compliance with regulatory requirements [395]. - The allowance for credit losses on loans (ACLL) was reported at $20.5 million as of December 31, 2024, reflecting management's estimates based on historical losses and economic forecasts [411]. - First Northwest Bancorp and its subsidiary, First Fed, maintained a "well-capitalized" status under FDIC regulatory capital guidelines as of December 31, 2024 [396]. - The company is subject to capital adequacy requirements imposed by the Federal Reserve and the FDIC, which are critical for maintaining operational flexibility [394]. - The company aims to avoid limitations on dividends, share repurchases, and discretionary bonuses by maintaining CET1 capital above required minimum levels [395]. Market and Economic Conditions - Economic downturns could lead to increased loan delinquencies, defaults, and foreclosures, significantly impairing the value of collateral[267]. - The Federal Reserve decreased the federal funds target rate starting September 2024, which may positively impact housing markets and refinancing activity[286]. - Interest rate fluctuations could adversely affect net interest income, especially if rates on deposits rise faster than those on loans[289]. - A sustained increase in market interest rates could adversely affect earnings due to higher costs of funds to retain deposits[290]. - The fair value of fixed-rate securities fluctuates inversely with changes in interest rates, potentially impacting shareholders' equity[291]. - The economic value of equity decreased by 44.1% with a 400 basis point increase in interest rates, amounting to a $99,521,000 change[381]. - Projected net interest income for 2024 is expected to increase by 4.4% with a 400 basis point increase in interest rates, amounting to $68,623,000[381]. - The impact of inflation on the company's operations is primarily reflected in increased operating costs and its effect on interest rates, which are crucial for financial institutions [400]. Operational and Strategic Initiatives - The company plans to continue both strategic and opportunistic growth, although it may face challenges in managing rapid growth effectively[263]. - The company aims to enhance noninterest income through SBA loan products and treasury management services, anticipating future revenue growth from these areas[328]. - The company has focused on expanding its deposit product offerings and enhancing its digital infrastructure to support growth[328]. - The company has implemented strategies to reposition its loan portfolio, increasing the origination of higher-yielding commercial loans[328]. - The company continues to monitor and resolve nonperforming loans proactively, employing independent firms to review its loan portfolio[328]. - The company has opened four new full-service branches and two business centers over the past seven years, with plans for further expansion[301]. - The company has commitments to invest in fintech-related businesses, including Canapi Ventures and other venture capital funds, to support growth in the fintech sector[328]. Shareholder and Stock Information - As of March 6, 2025, the company had 9,358,008 shares of common stock issued and outstanding, with approximately 477 shareholders of record[315]. - The company repurchased a total of 1,023,420 shares at an average cost of $14.07 per share as of December 31, 2024, under the stock repurchase plan authorized on October 28, 2020[316]. - As of December 31, 2024, 98,156 shares, or 10.4% of the shares authorized in the April 2024 stock repurchase plan, were purchased at an average cost of $10.23 per share, leaving 846,123 shares available for future purchases[319]. - Shareholders' equity decreased to $153,882 thousand in 2024 from $163,340 thousand in 2023, a decline of 5.75%[426]. - Cash dividends declared and paid remained consistent at $0.28 per share in both 2023 and 2024[433]. - The company repurchased common stock amounting to $4.057 million in 2024, up from $1.149 million in 2023[438].

Core Insights - First Northwest Bancorp and its subsidiary First Fed Bank appointed Johanna Bartee to their Board of Directors, enhancing their leadership with her extensive experience in banking, finance, and economic development [1][2][3] Company Overview - First Northwest Bancorp (NASDAQ: FNWB) is a financial holding company that operates through its subsidiary, First Fed Bank, which has been serving customers since 1923 and currently has 18 locations in Washington state, including 12 full-service branches [4] - The company focuses on building sustainable earnings by offering a full range of financial products and services to individuals, small businesses, non-profit organizations, and commercial customers [4] - First Northwest made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm, in 2022, and emphasizes strategic partnerships for modern financial services like digital payments and marketplace lending [4] Leadership and Community Engagement - Johanna Bartee, the new board member, is the Executive Director of JST Capital, a Native Community Development Financial Institution, and has a strong background in finance and community development [2][3] - Bartee's involvement in community initiatives includes serving as a Board Director for the Clallam County Opportunity Fund and being a member of the Port Angeles Waterfront District Board [3] - The appointment of Bartee reflects First Fed's commitment to enhancing its leadership with professionals focused on economic and social impact [3] Recognition and Awards - First Fed Bank was recognized as a Best Workplace and top Corporate Philanthropist by Puget Sound Business Journal in 2023 and 2024, and received awards for Best Bank and Best Lender in Clallam County [5]

Financial Performance - First Northwest Bancorp reported a net loss of $2.8 million for Q4 2024, compared to a net loss of $2.0 million in Q3 2024 and a net loss of $5.5 million in Q4 2023, with a basic and diluted loss per share of $0.32[2]. - The company reported a net income of $2,500 thousand for the fourth quarter of 2024, compared to $3,000 thousand in the previous quarter, indicating a decrease of 16.7%[35]. - The net loss for the quarter was $2,810,000, compared to a net income of $2,286,000 in the same quarter last year, marking a significant shift in profitability[36]. - Basic and diluted loss per common share was $(0.32) for the quarter, compared to earnings of $0.26 per share in the same quarter last year[36]. - Adjusted PPNR for the quarter was $1,204,000, while for the year ended December 31, 2024, it was $3,498,000, down from $9,555,000 in 2023[43]. Revenue and Expenses - Total revenue for Q4 2024 was $15.4 million, a decrease from $16.1 million in Q4 2023, while total noninterest expense decreased to $14.2 million[10]. - Total noninterest income for the quarter was $1,300,000, a decrease from $12,614,000 in the same quarter last year, reflecting a decline of 89.7%[36]. - Total noninterest expense for the quarter was $14,233,000, down from $16,990,000 in the same quarter last year, a reduction of 10.3%[36]. Credit Losses and Allowances - The provision for credit losses on loans was $3.8 million in Q4 2024, up from $3.1 million in Q3 2024 and $1.2 million in Q4 2023, primarily due to charge-offs of six commercial business loans[6]. - The provision for credit losses was $3.76 million for the quarter ended December 31, 2024, compared to $3.08 million in the previous quarter[18]. - The provision for credit losses for the quarter was $3,655,000, an increase from $970,000 in the same quarter last year[43]. Asset Quality and Loans - Nonperforming loans totaled $30.5 million at December 31, 2024, with the allowance for credit losses to nonperforming loans ratio decreasing to 67%[12]. - Total net loans decreased by $39.2 million, or 2.3%, to $1.68 billion at December 31, 2024, compared to $1.71 billion at September 30, 2024[18]. - Total loans amounted to $1,695,823 million as of December 31, 2024, a decrease from $1,734,807 million on September 30, 2024, representing a decline of 2.2%[38]. - Total construction and land loans decreased to $78,110 million as of December 31, 2024, from $95,709 million on September 30, 2024, representing a decline of 18.4%[38]. - Total commercial business loans decreased to $151,493 million as of December 31, 2024, down from $155,327 million on September 30, 2024, a decrease of 2.4%[38]. Deposits and Equity - Total deposits decreased by $23.6 million to $1.69 billion at December 31, 2024, compared to $1.71 billion at September 30, 2024, but increased by $11.1 million, or 0.7%, compared to $1.68 billion one year ago[19]. - Total shareholders' equity decreased to $153.9 million at December 31, 2024, compared to $160.8 million three months earlier[20]. - Shareholders' equity decreased to $153,882 thousand as of December 31, 2024, down from $160,789 thousand on September 30, 2024, representing a decline of 4.3%[34]. Interest Income and Expenses - Total interest income for the quarter ended December 31, 2024, was $28,197,000, compared to $26,309,000 for the same quarter last year, representing a year-over-year increase of 7.2%[36]. - Net interest income after provision for credit losses was $10,482,000 for the quarter ended December 31, 2024, down from $13,043,000 in the same quarter last year, a decrease of 19.6%[36]. - Interest expense on deposits increased to $11,175,000 for the quarter, up from $8,758,000 in the same quarter last year, an increase of 27.5%[36]. - The company reported a total interest expense of $14,060,000 for the quarter, compared to $12,114,000 in the same quarter last year, reflecting a year-over-year increase of 15.9%[36]. Strategic Focus and Future Plans - The company aims to improve asset quality and profitability while focusing on growing core commercial and retail customer relationships in 2025[4]. - The company plans to continue focusing on strategic partnerships to enhance its financial services offerings, including digital payments and marketplace lending[29]. - The company has been recognized for its community leadership, winning multiple awards including Best Bank and Best Lender in Clallam County[24].

Company Performance - First Northwest Bancorp (FNWB) reported a quarterly loss of $0.32 per share, significantly worse than the Zacks Consensus Estimate of $0.06, marking an earnings surprise of -633.33% [1] - The company posted revenues of $15.44 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 6.44%, compared to year-ago revenues of $11.27 million [2] - Over the last four quarters, FNWB has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Movement and Outlook - FNWB shares have increased by approximately 4.9% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $16.6 million, and for the current fiscal year, it is $0.75 on revenues of $71.8 million [7] Industry Context - The Zacks Industry Rank indicates that the Banks - West industry is currently in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Points - First Northwest Bancorp reported a net loss of $2.8 million for Q4 2024, an increase from a net loss of $2.0 million in Q3 2024 and a loss of $5.5 million in Q4 2023. The loss per share was $0.32 for Q4 2024 compared to $0.23 in Q3 2024 and $0.62 in Q4 2023 [1][2][3] - The adjusted pre-tax, pre-provision net revenue (PPNR) for Q4 2024 was $1.2 million, a significant improvement from a loss of $49,000 in Q3 2024 and a loss of $327,000 in Q4 2023 [2][11] - The company declared a quarterly cash dividend of $0.07 per common share, payable on February 28, 2025 [2] Financial Performance - The provision for credit losses on loans was $3.8 million in Q4 2024, up from $3.1 million in Q3 2024 and $1.2 million in Q4 2023. This provision negatively impacted net income [8][14] - Total interest income for Q4 2024 was $28.2 million, unchanged from the previous quarter but up from $26.3 million in Q4 2023. The net interest margin increased to 2.73% from 2.70% in Q3 2024 but decreased from 2.84% in Q4 2023 [18][21] - Noninterest expense decreased in Q4 2024, primarily due to a reduction in compensation and other discretionary spending [18] Asset Quality - Nonperforming loans totaled $30.5 million at the end of Q4 2024, a slight increase from $30.4 million at the end of Q3 2024. The allowance for credit losses on loans decreased to $20.5 million, representing 1.21% of total loans [15][24] - Classified loans decreased to $42.5 million, primarily due to charge-offs on commercial business loans [16] Capital and Liquidity - Total deposits decreased by $23.6 million to $1.69 billion at the end of Q4 2024, while total shareholders' equity decreased to $153.9 million [24][26] - The company maintained a strong capital position, with Common Equity Tier 1 and Total Risk-Based Capital Ratios at 12.4% and 13.6%, respectively [26] Strategic Focus - The company aims to improve asset quality and profitability while focusing on growing core commercial and retail customer relationships [3][27] - Investment securities increased by 9.5% to $340.3 million at the end of Q4 2024, with a strategy to rebalance the securities portfolio for 2025 [21][22]

Core Points - Craig Curtis has resigned from the Boards of Directors of First Fed Bank and First Northwest Bancorp, effective December 31, 2024, after serving for 10 years and 9 years respectively [2][9] - Curtis expressed gratitude for his tenure and acknowledged the bank's significant growth, emphasizing the importance of having qualified board members who can contribute meaningfully to the company [1][2] Company Overview - First Northwest Bancorp (NASDAQ: FNWB) is a financial holding company that operates First Fed Bank, which has been serving customers since 1923 and currently has 17 locations in Washington state [11] - The bank focuses on small business and community banking, offering a full range of financial products and services, and is engaged in strategic partnerships with fintech companies to enhance digital financial solutions [11] - First Fed Bank has received multiple awards in 2023, including recognition as a Best Workplace and top Corporate Philanthropist, as well as various "Best Bank" accolades from local publications [5]