Company Leadership Transition - First Northwest Bancorp announced the resignation of Matthew P. Deines as President and CEO, effective July 12, 2025, with Geraldine L. Bullard appointed as Interim CEO starting July 13, 2025 [1][2] - The boards of directors expressed gratitude for Deines' six years of service and confidence in Bullard's ability to lead during the transition [2] - An executive search firm has been engaged to assist in finding a permanent replacement for the CEO position [2] Background of Geraldine Bullard - Geraldine Bullard has been with First Northwest since January 2020, serving as Executive Vice President and COO since October 2023, and previously as CFO from March 2020 to March 2025 [3] - Bullard has extensive experience in the banking sector, having held various financial leadership roles prior to joining First Fed [3] 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 18 locations in Washington state [4] - The company focuses on sustainable earnings through a comprehensive range of financial products and services for individuals, small businesses, and non-profit organizations [4] - First Northwest made an investment in The Meriwether Group, LLC in 2022 and emphasizes strategic partnerships for modern financial services [4]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201%20-%20Financial%20Statements%20%28Unaudited%29) Presents unaudited consolidated financial statements and notes, detailing financial position, operations, and cash flows [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) [Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Consolidated Balance Sheet Highlights (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----- | :---------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $2,171,430 | $2,232,006 | $(60,576) | (2.71)% | | Total Liabilities | $2,024,938 | $2,078,124 | $(53,186) | (2.56)% | | Total Shareholders' Equity | $146,492 | $153,882 | $(7,390) | (4.80)% | Consolidated Statements of Operations Highlights (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :----- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------- | | Total Interest Income | $26,823 | $27,326 | $(503) | (1.84)% | | Total Interest Expense | $12,976 | $13,398 | $(422) | (3.15)% | | Net Interest Income | $13,847 | $13,928 | $(81) | (0.58)% | | Provision for Credit Losses | $7,785 | $970 | $6,815 | 702.58% | | Total Noninterest Income | $3,777 | $2,188 | $1,589 | 72.62% | | Total Noninterest Expense | $20,000 | $14,303 | $5,697 | 39.83% | | Net (Loss) Income | $(9,036) | $396 | $(9,432) | (2381.82)% | | Basic and Diluted (Loss) Earnings per Common Share | $(1.03) | $0.04 | $(1.07) | (2675.00)% | Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :----- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net cash used by operating activities | $(21,743) | $(4,865) | $(16,878) | | Net cash provided (used) by investing activities | $69,297 | $(78,466) | $147,763 | | Net cash (used) provided by financing activities | $(49,679) | $37,508 | $(87,187) | | Net decrease in cash and cash equivalents | $(2,125) | $(45,823) | $43,698 | | Cash and cash equivalents at end of period | $70,323 | $77,346 | $(7,023) | [Note 1 - Basis of Presentation and Critical Accounting Policies](index=9&type=section&id=Note%201%20-%20Basis%20of%20Presentation%20and%20Critical%20Accounting%20Policies) [Note 2 - Securities](index=11&type=section&id=Note%202%20-%20Securities) [Note 3 - Loans Receivable](index=14&type=section&id=Note%203%20-%20Loans%20Receivable) [Note 4 - Allowance for Credit Losses on Loans](index=20&type=section&id=Note%204%20-%20Allowance%20for%20Credit%20Losses%20on%20Loans) [Note 5 - Deposits](index=21&type=section&id=Note%205%20-%20Deposits) [Note 6 - Borrowings](index=22&type=section&id=Note%206%20-%20Borrowings) [Note 7 - Income Tax](index=23&type=section&id=Note%207%20-%20Income%20Tax) [Note 8 - Earnings (Loss) per Common Share](index=25&type=section&id=Note%208%20-%20Earnings%20%28Loss%29%20per%20Common%20Share) [Note 9 - Employee Benefits](index=25&type=section&id=Note%209%20-%20Employee%20Benefits) [Note 10 - Stock-based Compensation](index=26&type=section&id=Note%2010%20-%20Stock-based%20Compensation) [Note 11 - Fair Value Measurements](index=27&type=section&id=Note%2011%20-%20Fair%20Value%20Measurements) [Note 12 - Change in Accumulated Other Comprehensive Income ("AOCI")](index=31&type=section&id=Note%2012%20-%20Change%20in%20Accumulated%20Other%20Comprehensive%20Income%20%28%22AOCI%22%29) [Note 13 - Derivatives and Hedging Activities](index=32&type=section&id=Note%2013%20-%20Derivatives%20and%20Hedging%20Activities) [Note 14 - Segment Reporting](index=34&type=section&id=Note%2014%20-%20Segment%20Reporting) [Note 15 - Contingencies](index=34&type=section&id=Note%2015%20-%20Contingencies) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202%20-%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and critical accounting policies, comparing results for recent periods - Total assets decreased by **$60.6 million** (**2.7%**) to **$2.17 billion** at **March 31, 2025**, from **$2.23 billion** at **December 31, 2024**[143](index=143&type=chunk) - Net loans decreased by **$37.6 million** (**2.2%**) to **$1.64 billion**, with commercial business loans decreasing **$31.7 million** and construction and land loans decreasing **$13.2 million**[147](index=147&type=chunk)[149](index=149&type=chunk) - Total liabilities decreased by **$53.2 million** to **$2.02 billion**, driven by a **$45.0 million** decrease in brokered deposits and a **$28.9 million** decrease in borrowings, partially offset by a **$23.0 million** increase in customer deposits[162](index=162&type=chunk)[163](index=163&type=chunk) - Total shareholders' equity decreased by **$7.4 million** to **$146.5 million**, mainly due to a **$9.0 million** net loss and a **$425,000** decrease in post-tax fair market value of derivatives[165](index=165&type=chunk) - The Company reported a net loss of **$(9.0) million** for **Q1 2025**, a significant decline from net income of **$396,000** in **Q1 2024**[166](index=166&type=chunk) - Net interest income decreased by **$81,000** (**0.6%**) to **$13.9 million**, as declines in loan and interest-earning deposit income slightly outpaced reduced deposit costs[167](index=167&type=chunk) - Provision for credit losses increased significantly to **$7.8 million** in **Q1 2025** from **$970,000** in **Q1 2024**, primarily due to net charge-offs totaling **$7.7 million**[174](index=174&type=chunk) - Noninterest income increased by **$1.6 million** (**72.6%**) to **$3.8 million**, driven by a **$1.1 million** BOLI death benefit and an **$846,000** gain on extinguishment of debt[175](index=175&type=chunk) - Noninterest expense increased by **$5.7 million** (**39.8%**) to **$20.0 million**, mainly due to a **$5.8 million** accrued legal reserve included in other expense[176](index=176&type=chunk) - An income tax benefit of **$1.1 million** was recorded in **Q1 2025**, compared to an expense of **$447,000** in **Q1 2024**[177](index=177&type=chunk) Regulatory Capital Ratios (March 31, 2025) | Capital Ratio | Actual Ratio | Minimum Requirement | Well-Capitalized Requirement | | :------------ | :----------- | :------------------ | :--------------------------- | | Tier 1 leverage capital | **9.0%** | **4.0%** | **5.0%** | | Common equity tier 1 | **12.1%** | **4.5%** | **6.5%** | | Tier 1 risk-based capital | **12.1%** | **6.0%** | **8.0%** | | Total risk-based capital | **13.4%** | **8.0%** | **10.0%** | [Forward-Looking Statements](index=35&type=section&id=Forward-Looking%20Statements) [General](index=36&type=section&id=General) [Recent Regulatory Developments](index=37&type=section&id=Recent%20Regulatory%20Developments) [Critical Accounting Policies](index=37&type=section&id=Critical%20Accounting%20Policies) [Comparison of Financial Condition at March 31, 2025 and December 31, 2024](index=37&type=section&id=Comparison%20of%20Financial%20Condition%20at%20March%2031%2C%202025%20and%20December%2031%2C%202024) [Comparison of Results of Operations for the Three Months Ended March 31, 2025 and 2024](index=42&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) [Average Balances, Interest and Average Yields/Cost](index=46&type=section&id=Average%20Balances%2C%20Interest%20and%20Average%20Yields%2FCost) [Rate/Volume Analysis](index=47&type=section&id=Rate%2FVolume%20Analysis) [Off-Balance Sheet Activities](index=47&type=section&id=Off-Balance%20Sheet%20Activities) [Contractual Obligations](index=48&type=section&id=Contractual%20Obligations) [Commitments and Off-Balance Sheet Arrangements](index=48&type=section&id=Commitments%20and%20Off-Balance%20Sheet%20Arrangements) [Liquidity Management](index=48&type=section&id=Liquidity%20Management) [Capital Resources](index=49&type=section&id=Capital%20Resources) [Effect of Inflation and Changing Prices](index=50&type=section&id=Effect%20of%20Inflation%20and%20Changing%20Prices) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203%20-%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes to market risk disclosures from the 2024 Form 10-K, indicating consistent risk management - No material changes in market risk disclosures from the **2024 Form 10-K**[199](index=199&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204%20-%20Controls%20and%20Procedures) Confirms effectiveness of disclosure controls and procedures, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were effective as of **March 31, 2025**[201](index=201&type=chunk) - There have been no material changes in the Company's internal control over financial reporting during the quarter ended **March 31, 2025**[202](index=202&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201%20-%20Legal%20Proceedings) Discloses ongoing legal proceedings, including a **$5.8 million** legal reserve for an adversary proceeding related to borrower bankruptcies - A **$5.8 million** legal reserve was established for an adversary proceeding related to borrower bankruptcies and newly raised claims of financial misconduct, included in other noninterest expense for **Q1 2025**[208](index=208&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A%20-%20Risk%20Factors) Reports no material changes to risk factors from the Company's 2024 Form 10-K - No material changes to risk factors from the Company's **2024 Form 10-K**[209](index=209&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%202%20-%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Reports common stock repurchases for tax obligations and confirms no repurchases under the April 2024 plan, with shares remaining - Common stock repurchases for tax obligations related to restricted stock awards totaled **7,279 shares** during the three months ended **March 31, 2025**[210](index=210&type=chunk) - As of **March 31, 2025**, **846,123 shares** remain available for future purchases under the **April 2024** stock repurchase plan, with no shares repurchased under this plan during the reported period[211](index=211&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203%20-%20Defaults%20Upon%20Senior%20Securities) States this item is not applicable, indicating no defaults upon senior securities - Not applicable[213](index=213&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204%20-%20Mine%20Safety%20Disclosures) States this item is not applicable, indicating no mine safety disclosures - Not applicable[214](index=214&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205%20-%20Other%20Information) Reports no director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No director or officer adopted or terminated a **Rule 10b5-1** or **non-Rule 10b5-1** trading arrangement during the fiscal quarter ended **March 31, 2025**[215](index=215&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206%20-%20Exhibits) Lists exhibits filed with Form 10-Q, including incentive plans, stock agreements, certifications, and XBRL data - Exhibits include **First Fed 2025 Executive Officer Incentive Plan**, **Amended Executive Change in Control Plan**, **Restricted Stock Unit Award Agreement**, **Section 302** and **906** certifications, and **iXBRL** financial data[216](index=216&type=chunk) SIGNATURES [Signatures](index=53&type=section&id=Signatures) Contains official signatures of the President, CEO, Director, and EVP & CFO, certifying the report - The report was signed by **Matthew P. Deines** (President, Chief Executive Officer and Director) and **Phyllis R. Nomura** (Executive Vice President and Chief Financial Officer) on **May 12, 2025**[220](index=220&type=chunk)

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].

Financial Performance - First Northwest Bancorp (FNWB) reported quarterly earnings of $0.17 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, and up from $0.04 per share a year ago, representing an earnings surprise of 41.67% [1] - The company posted revenues of $17.94 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 12.82%, compared to year-ago revenues of $16.12 million [2] - Over the last four quarters, FNWB has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - FNWB shares have remained flat since the beginning of the year, contrasting with the S&P 500's decline of -8.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.11 on revenues of $16.9 million, and $0.59 on revenues of $68.8 million for the current fiscal year [7] Industry Context - The Zacks Industry Rank indicates that the Banks - West industry is currently in the bottom 42% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

PORT ANGELES, Wash., April 24, 2025 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company") today reported net income of $1.5 million for the first quarter of 2025, compared to a net loss of $2.8 million for the fourth quarter of 2024 and net income of $396,000 for the first quarter of 2024. Basic and diluted income per share were $0.17 for the first quarter of 2025, compared to basic and diluted loss per share of $0.32 for the fourth quarter of 2024 and basic and dil ...

PORT ANGELES, Wash., April 24, 2025 (GLOBE NEWSWIRE) -- First Northwest Bancorp (NASDAQ:FNWB) ("First Northwest" or the "Company") today reported net income of $1.5 million for the first quarter of 2025, compared to a net loss of $2.8 million for the fourth quarter of 2024 and net income of $396,000 for the first quarter of 2024. Basic and diluted income per share were $0.17 for the first quarter of 2025, compared to basic and diluted loss per share of $0.32 for the fourth quarter of 2024 and basic and dilu ...

PORT ANGELES, Wash., April 24, 2025 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company") today reported net income of $1.5 million for the first quarter of 2025, compared to a net loss of $2.8 million for the fourth quarter of 2024 and net income of $396,000 for the first quarter of 2024. Basic and diluted income per share were $0.17 for the first quarter of 2025, compared to basic and diluted loss per share of $0.32 for the fourth quarter of 2024 and basic and dil ...

Core Insights - First Northwest Bancorp has promoted Phyllis Nomura to Executive Vice President and Chief Financial Officer of First Fed Bank, effective immediately [1][2] - Nomura has over 30 years of experience in accounting, finance, and audit, and was previously the Senior Director of Accounting at First Fed [2][4] - Geri Bullard will continue as Chief Operating Officer, focusing on enhancing profitability and efficiency within the bank [5] Company Background - First Northwest Bancorp is a financial holding company with its subsidiary, First Fed Bank, which has been serving customers since 1923 and operates 18 locations in Washington state [7] - The bank's strategy emphasizes sustainable earnings through a comprehensive range of financial products and services for various customer segments [7] - First Fed Bank has received multiple accolades, including recognition as a Best Workplace and top Corporate Philanthropist in 2023 and 2024 [8]

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]