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 September 30, 2025 or Commission File Number: 001-36741 FIRST NORTHWEST BANCORP | (Exact name of registrant as specified in its charter) | | | --- | --- | | Washington | 46-1259100 | | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. Number) | | 105 Wes ...

Financial Performance - Net income for Q3 2025 was $802,000, a decrease from $3.7 million in Q2 2025 and a net loss of $2.0 million in Q3 2024[2]. - Adjusted Pre-tax, Pre-Provision Net Revenue (PPNR) for Q3 2025 decreased to $340,000 from $2.1 million in Q2 2025[9]. - The net income for the quarter was $802,000, a significant decrease from $3,661,000 in the previous quarter, reflecting a decline of 78.0%[34]. - Basic earnings per share for the quarter was $0.09, down from $0.42 in the previous quarter, indicating a decrease of 78.6%[34]. - The return on average assets (GAAP) for the quarter was 0.15%, compared to -1.69% in the same quarter last year, showing improvement[41]. Interest and Loans - Net interest margin increased to 2.91% in Q3 2025, up from 2.83% in Q2 2025[6]. - Total interest income decreased by $221,000 to $26.9 million for Q3 2025, compared to $27.1 million in the previous quarter, and decreased by $1.3 million from $28.2 million in Q3 2024[14]. - Net interest income after provision for credit losses was $15,242,000 for the quarter, up from $14,553,000 in the previous quarter, indicating an increase of 4.7%[34]. - Total loans outstanding as of September 30, 2025, were $1,623,132 million, a decrease from $1,664,702 million in June 30, 2025, representing a decline of 2.5%[36]. - The cost of all deposits decreased to 2.20% for the three months ended September 30, 2025, down from 2.56% in the same period of 2024[39]. Asset and Equity Management - Total shareholders' equity increased to $154.5 million at September 30, 2025, from $149.7 million three months earlier, driven by a $3.7 million increase in the fair market values of investment securities and net income of $802,000[22]. - The company reported total assets of $2,111,373,000 as of September 30, 2025, down from $2,171,430,000 in the previous quarter[42]. - Tangible common equity to tangible assets ratio improved to 7.26% as of September 30, 2025, compared to 6.68% a year earlier[42]. - The book value per common share was $16.33 as of September 30, 2025, up from $15.52 a year earlier, indicating a growth of approximately 5.2%[42]. Credit Quality - The allowance for credit losses on loans decreased by $2.1 million to $16.2 million at September 30, 2025, representing 1.00% of total loans[11]. - Nonperforming loans decreased by $7.0 million to $13.4 million at September 30, 2025, from $20.4 million at June 30, 2025[12]. - The provision for credit losses on loans showed a recapture of $(620,000) for the quarter, compared to $(296,000) in the previous quarter, highlighting a positive trend in credit quality[34]. - The company experienced a provision for credit losses of $(673,000) in the latest quarter, compared to a provision of $7,785,000 in the same quarter last year, indicating improved credit quality[41]. Operational Efficiency - The efficiency ratio was reported at 104.9% for Q3 2025, indicating increased operational costs relative to income[7]. - Noninterest expense increased by $4.6 million to $17.4 million for Q3 2025, compared to $12.8 million in the previous quarter, driven by nonrecurring costs related to executive management transition[14]. - Total noninterest expense increased to $17,390,000 for the quarter, compared to $12,765,000 in the previous quarter, marking a rise of 36.5%[34]. Strategic Initiatives - The company is focused on building sustainable earnings by delivering a full array of financial products and services for various customer segments[27]. - The company has strategically invested in partnerships to develop modern financial solutions and a boutique investment banking firm, emphasizing its commitment to innovation and growth[27]. - First Northwest Bancorp was recognized as the Best Bank in Clallam County by Forbes and received multiple awards for corporate philanthropy and community service[25].

Core Insights - First Northwest Bancorp (FNWB) reported quarterly earnings of $0.09 per share, missing the Zacks Consensus Estimate of $0.18 per share, compared to a loss of $0.23 per share a year ago, indicating an earnings surprise of -50.00% [1] - The company posted revenues of $16.57 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 4.76%, and showing an increase from $15.8 million year-over-year [2] - The stock has underperformed, losing about 19.9% since the beginning of the year, while the S&P 500 gained 15.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $17.6 million, and for the current fiscal year, it is -$0.08 on revenues of $67.1 million [7] - The estimate revisions trend for First Northwest Bancorp was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Banks - West is currently in the top 17% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - First Northwest Bancorp reported a net income of $802,000 for Q3 2025, a decrease from $3.7 million in Q2 2025 and a net loss of $2.0 million in Q3 2024, indicating a challenging financial environment [1][2]. Financial Performance - Net income for Q3 2025 was $802,000, with basic and diluted earnings per share at $0.09, compared to $0.42 in Q2 2025 and a loss of $0.23 in Q3 2024 [1]. - Adjusted Pre-tax, Pre-Provision Net Revenue (PPNR) decreased to $340,000 in Q3 2025 from $2.1 million in Q2 2025 and $947,000 in Q3 2024 [8][10]. - Total revenue for Q3 2025 was $16.6 million, down from $17.6 million in Q2 2025 and $15.4 million in Q3 2024 [9]. Key Financial Ratios - Return on average assets was 0.15% for Q3 2025, down from 0.68% in Q2 2025 and a loss of 1.69% in Q3 2024 [4]. - Net interest margin improved to 2.91% in Q3 2025 from 2.83% in Q2 2025, marking five consecutive quarters of improvement [5][14]. - Efficiency ratio increased to 104.9% in Q3 2025 from 78.0% in Q2 2025, indicating rising operational costs [4]. Credit Quality - The allowance for credit losses on loans decreased to $16.2 million at September 30, 2025, from $18.4 million at June 30, 2025, reflecting improved credit quality [11]. - Nonperforming loans decreased to $13.4 million at September 30, 2025, from $20.4 million at June 30, 2025, indicating a positive trend in asset quality [12]. - The ratio of allowance for credit losses to nonperforming loans increased to 121% at September 30, 2025, from 90% at June 30, 2025 [12]. Capital Management - The Board of Directors did not declare a dividend for Q3 2025 as part of a prudent capital management strategy [2]. - Total shareholders' equity increased to $154.5 million at September 30, 2025, compared to $149.7 million at June 30, 2025, due to net income and fair market value increases [22]. - Common Equity Tier 1 and Total Risk-Based Capital Ratios were 12.7% and 13.7%, respectively, indicating strong capital levels [24]. Deposits and Loans - Total deposits decreased slightly to $1.65 billion at September 30, 2025, from $1.65 billion at June 30, 2025, and down from $1.71 billion a year earlier [22]. - Net loans decreased by $39.4 million, or 2.4%, to $1.61 billion at September 30, 2025, compared to $1.65 billion at June 30, 2025 [19][20].

Group 1: Company Performance - First Northwest Bancorp (FNWB) shares increased by 5% to close at $7.75, supported by strong trading volume, contrasting with a 4.2% loss over the past four weeks [1][2] - The company is projected to report quarterly earnings of $0.18 per share, reflecting a year-over-year increase of 178.3%, with revenues expected to reach $17.4 million, up 10.1% from the previous year [3] Group 2: Market Context - The Federal Reserve's initiation of an interest rate cut cycle, with indications of two additional cuts this year, has placed banking stocks in focus, potentially stabilizing banks' funding costs and improving lending scenarios [2] - The consensus EPS estimate for FNWB has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without trends in earnings estimate revisions [4] Group 3: Industry Comparison - First Northwest Bancorp is part of the Zacks Banks - West industry, where another company, Hanmi Financial (HAFC), saw a 1.2% increase to $25.11, but has returned -1.8% over the past month [4] - Hanmi Financial's consensus EPS estimate is $0.65, indicating a year-over-year change of 32.7%, with its Zacks Rank also at 3 (Hold) [5]

Core Insights - First Fed Bank has launched the Apiture Digital Banking Platform to enhance online and mobile banking for business customers, reflecting its commitment to digital solutions for businesses of all sizes [1][4] Group 1: New Digital Features - The upgraded platform includes advanced cash flow and forecasting tools, a unified view of accounts, and improved self-service and administrative controls for business account holders [2] - The platform aims to provide a seamless user experience across desktop and mobile devices [2] Group 2: Data Intelligence Implementation - First Fed has implemented Apiture's Data Intelligence solution to gain deeper insights into business customers' banking behaviors and preferences [3] - These insights will be used to create more strategic and customized financial solutions, enhancing customer engagement through a personalized digital experience [3] Group 3: Leadership Comments - David Edelstein, chief innovation officer at First Fed, emphasized the importance of modern digital tools in supporting small business and commercial customers while maintaining local relationships [4] - Chris Babcock, CEO of Apiture, expressed excitement about the partnership, highlighting its role in providing leading-edge solutions for financial institutions [4] Group 4: Company Background - First Fed Bank, a subsidiary of First Northwest Bancorp, has been serving Western Washington since 1923, operating 12 full-service branches and three business centers [4] - Apiture is a provider of digital banking solutions to banks and credit unions across the US, offering a flexible, API-first platform [4]

Core Insights - First Northwest Bancorp has appointed Curt Queyrouze as CEO, effective September 17, following the resignation of Matthew Deines amid legal issues related to a Ponzi scheme [2][3][10] - The bank is currently facing allegations of abetting a $200 million Ponzi scheme orchestrated by one of its borrowers, Water Station [7][12] - Queyrouze brings extensive experience, having previously served as president of Coastal Financial and CEO of TAB Bank [2][10] Company Background - First Northwest Bancorp is the holding company for First Fed Bank, with total assets of $2.2 billion [2] - The bank reported a $9 million loss for the quarter ending March 31, which included a legal reserve of $5.8 million in anticipation of a settlement [4] - The bank settled a lawsuit with Water Station investors for an amount between $2.87 million and $5.74 million, without admitting wrongdoing [3][4] Leadership Transition - Curt Queyrouze was selected after a comprehensive search process, praised for his performance and community dedication [5][10] - Geraldine Bullard, who served as interim CEO, will return to her role as executive vice president and COO [10] Legal and Regulatory Issues - First Northwest intends to dispute allegations made by 352 Capital, a hedge fund that filed a $106 million lawsuit against the bank [4] - The Ponzi scheme involved Water Station raising over $200 million from investors, with many promised machines allegedly not existing [12]

Core Insights - The article discusses the recent financial performance of a leading technology company, highlighting a significant increase in revenue and net income compared to the previous year [1] Financial Performance - The company reported a revenue of $50 billion, representing a 20% increase year-over-year [1] - Net income reached $10 billion, which is a 25% increase compared to the same period last year [1] - Earnings per share (EPS) rose to $5, up from $4 in the previous year, indicating strong profitability growth [1] Market Position - The company has strengthened its market position, capturing a larger share of the technology sector, now holding 15% of the market [1] - Increased demand for its products and services has contributed to its competitive advantage [1] Future Outlook - The company anticipates continued growth, projecting a revenue increase of 15% for the next fiscal year [1] - Investments in research and development are expected to drive innovation and further enhance product offerings [1]

Core Viewpoint - First Northwest Bancorp announces the appointment of Curt Queyrouze as the new CEO and President, effective September 17, 2025, aiming to enhance long-term shareholder value and modernize the financial institution [1][2][4]. Company Overview - First Northwest Bancorp is a financial holding company with its subsidiary, First Fed Bank, which has been operational since 1923 and currently has 17 locations in Washington state, including 12 full-service branches [7]. - The company focuses on sustainable earnings through a comprehensive range of financial products and services for individuals, small businesses, non-profits, and commercial customers [7]. - First Northwest has made strategic investments in partnerships aimed at developing modern financial solutions and a boutique investment banking/accelerator firm, reflecting its commitment to innovation and growth in the financial services sector [7]. Leadership Transition - Curt Queyrouze, with over 40 years of experience in financial services, will replace Matthew P. Deines, who left the company in July 2025 [3][5][6]. - Queyrouze's previous roles include President of Coastal Financial Corporation and CEO of TAB Bank, showcasing a diverse background in community and regional banking as well as fintech [5][6]. - The Board of Directors expressed confidence in Queyrouze's leadership capabilities, emphasizing his data-driven decision-making and dedication to community service [4].

Core Points - The First Fed Foundation is currently accepting grant applications for nonprofit, tribal, government, and school district organizations in specific counties and the city of Bellevue until September 1, 2025 [1] - The Foundation was established in 2015 with a $12 million donation from First Northwest Bancorp to ensure ongoing charitable contributions [2] - As of Spring 2025, the Foundation has awarded $7.6 million in grants to support low- to moderate-income and marginalized communities [3] Grant Timeline & Funding Priorities - The Foundation encourages applications that align with strategic community needs, with guidelines and resources available on their website [4] - Grants range from $5,000 to $25,000 for community support and from $25,000 to $100,000 for housing, homelessness, economic development, and broader community development [7] - Funding decisions will be made by the end of November 2025 [7] Community Commitment - First Fed Foundation continues a legacy of community support established by First Fed, a local bank operating since 1923, with 17 locations across several counties [5] - In 2022, First Fed and its foundation contributed over $1.3 million to nonprofits and encouraged employee volunteerism [6]