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]

Financial Performance - Net loss attributable to the parent was $(1,980) thousand for the three months ended September 30, 2024, compared to a net income of $2,504 thousand in the same period last year, reflecting a significant downturn[11]. - Comprehensive income for the three months ended September 30, 2024, was $3,193 thousand, compared to a comprehensive loss of $(3,280) thousand in the same period last year, indicating a turnaround in comprehensive performance[13]. - The company reported a basic and diluted loss per common share of $(0.23) for the three months ended September 30, 2024, compared to earnings of $0.28 per share in the same period of 2023[11]. - The company recorded a net loss of $3.8 million for the nine months ended September 30, 2024, compared to net income of $7.8 million for the same period in 2023[204]. Income and Expenses - Net interest income after provision for credit losses decreased to $10,886 thousand for the three months ended September 30, 2024, down from $14,579 thousand for the same period in 2023, representing a decline of about 25.5%[11]. - Total interest income rose to $28,206 thousand for the three months ended September 30, 2024, compared to $25,834 thousand in the prior year, marking an increase of approximately 9.0%[11]. - Noninterest income for the three months ended September 30, 2024, was $1,779 thousand, down from $2,904 thousand in the same period of 2023, a decrease of about 38.8%[11]. - Total noninterest expense increased to $15,848 thousand for the three months ended September 30, 2024, compared to $14,376 thousand in the prior year, representing an increase of approximately 10.3%[11]. Assets and Liabilities - Total assets increased to $2,255,486 thousand as of September 30, 2024, compared to $2,201,797 thousand at December 31, 2023, reflecting a growth of approximately 2.4%[7]. - Total liabilities increased to $2,094,697 thousand as of September 30, 2024, from $2,038,457 thousand at December 31, 2023, an increase of approximately 2.8%[7]. - The total shareholders' equity at September 30, 2024, was $160,789,000, a decrease from $163,340,000 at December 31, 2023[17]. Credit Losses and Loans - Provision for credit losses on loans increased significantly to $3,077 thousand for the three months ended September 30, 2024, compared to $880 thousand for the same period in 2023, indicating a rise of over 249.9%[11]. - The allowance for credit losses on loans rose to $21,970,000 as of September 30, 2024, up from $17,510,000 at the end of 2023[55]. - Nonaccrual loans totaled $30,376,000 as of September 30, 2024, with interest income recognized on a cash basis for the three months ended September 30, 2024, being $1,000[58]. - The total loans receivable increased to $1,734,807,000 as of September 30, 2024, compared to $1,660,028,000 as of December 31, 2023, reflecting a growth of approximately 4.5%[55]. Deposits and Borrowings - Total deposits increased to $1,711.6 million as of September 30, 2024, compared to $1,676.9 million at December 31, 2023, reflecting a growth of 2.07%[88]. - The weighted-average interest rate on total deposits rose to 2.68% in September 2024 from 2.34% in December 2023[88]. - The total outstanding balance of FHLB long-term advances was $160.0 million as of September 30, 2024, with a weighted-average interest rate of 3.63%[100]. Securities and Investments - The total investment securities as of September 30, 2024, were valued at $310,860,000, down from an amortized cost of $341,011,000[49]. - The company recorded gross realized losses of $2,117,000 from the sales of available-for-sale securities for the nine months ended September 30, 2024[51]. - The total gross unrealized losses for available-for-sale securities in a loss position as of September 30, 2024, was $30,209 thousand[45]. Compensation and Equity - The company reported total compensation expense for equity incentive plans was $781,000, a decrease of 29% from $1.1 million in the same period of 2023[116]. - The number of non-vested restricted stock awards increased to 114,075 shares as of September 30, 2024, from 108,143 shares at the beginning of the quarter[116]. - The company granted 81,181 shares of restricted stock during the nine months ended September 30, 2024, compared to 96,022 shares in the same period of 2023[118]. Tax and Regulatory Matters - The effective tax rates were 25.5% for the nine months ended September 30, 2024, compared to 19.9% for the same period in 2023[103]. - The company adopted ASU 2022-02 on January 1, 2023, which introduced new reporting requirements for modifications of loans to borrowers experiencing financial difficulty[73].

Core Viewpoint - First Northwest Bancorp (FNWB) is under investigation for potential violations of federal securities laws and unlawful business practices following the disclosure of significant financial discrepancies [1][2]. Financial Performance - On October 25, 2024, FNWB announced that its second quarter 2024 financial results should no longer be relied upon due to an additional $6.6 million in charge-offs and an increased provision for credit losses, totaling a restated provision of $8.7 million [2]. - A material weakness in the Company's internal control over financial reporting was identified as of June 30, 2024 [2]. Stock Market Reaction - Following the announcement of the financial issues, FNWB's stock price decreased by $0.23 per share, or 2.2%, closing at $10.13 per share on October 28, 2024 [3].

Financial Performance - First Northwest Bancorp (FNWB) reported a quarterly loss of $0.23 per share, significantly missing the Zacks Consensus Estimate of $0.05, and down from earnings of $0.28 per share a year ago, representing an earnings surprise of -560% [1] - The company posted revenues of $15.8 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 8.15%, and down from $17.85 million in the same quarter last year [2] - Over the last four quarters, FNWB has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - FNWB shares have declined approximately 36.5% since the beginning of the year, contrasting with the S&P 500's gain of 22.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $17.7 million, and for the current fiscal year, it is $0.46 on revenues of $66.8 million [7] Industry Outlook - The Zacks Industry Rank indicates that the Banks - West industry is currently in the bottom 39% of over 250 Zacks industries, suggesting potential challenges for FNWB's stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact FNWB's future performance [5]