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]

Financial Performance - First Northwest Bancorp reported a net loss of $2.2 million for Q2 2024, compared to a net income of $396,000 in Q1 2024 and $1.8 million in Q2 2023[6]. - Total revenue, net of interest expense, was $21.6 million in Q2 2024, up from $16.1 million in Q1 2024 and $17.7 million in Q2 2023[4]. - The company reported a net loss of $2,219 thousand for June 30, 2024, compared to a net income of $1,776 thousand for June 30, 2023[66]. - Net loss for the first half of 2024 was $(1,823), a decrease of 134.4% compared to the same period in 2023[59]. - Basic and diluted loss earnings per common share for Q2 2024 was $(0.25), a decline of 725.0% from Q1 2024[57]. Credit Losses and Provisions - The provision for credit losses increased to $8.7 million in Q2 2024, primarily due to loan charge-offs related to substandard lending relationships[5]. - The provision for credit losses was $8.7 million in Q2 2024, compared to $970,000 in Q1 2024 and $300,000 in Q2 2023, primarily due to charge-offs in commercial loans[14]. - Provision for credit losses on loans surged to $8,640 in Q2 2024, a dramatic increase of 597.3% from Q1 2024 and 2,780.0% year-over-year[57]. - The allowance for credit losses on loans increased to $19,300 thousand, representing 1.14% of total loans as of June 30, 2024, up from 1.05% in Q1 2024[39]. - Nonperforming loans rose to $23,631 thousand in Q2 2024, an increase of $4,150 thousand from Q1 2024, primarily due to credit concerns related to commercial construction loans[40]. Loans and Deposits - The company experienced a significant increase in non-real estate loans, which rose by 11%, approximately $41 million, year-to-date in 2024, while real estate loans remained flat[3]. - Total deposits grew by $41.7 million, or 2.5%, to $1.71 billion during the second quarter[5]. - Total net loans decreased by $15.0 million, or 0.9%, to $1.68 billion at June 30, 2024, compared to $1.69 billion at March 31, 2024, but increased by $56.9 million, or 3.5%, from $1.62 billion one year ago[29]. - Total deposits increased to $1,708,288 thousand in Q2 2024, up from $1,676,892 thousand in Q1 2024, representing a growth of 7.7% year-over-year[38]. - Consumer deposits accounted for 57% of total deposits, with an average balance of $23,000 per account[36]. Interest Income and Expenses - Total interest income for Q2 2024 was $28,611, an increase of 4.7% from Q1 2024 and 12.3% year-over-year[57]. - Total interest expense increased by $978,000 to $14.4 million in Q2 2024, up from $13.4 million in Q1 2024, and up $4.9 million from $9.5 million in Q2 2023[12]. - Total interest expense for Q2 2024 was $14,376, up 7.3% from Q1 2024 and 51.5% year-over-year[57]. - The cost of total deposits increased to 2.47% in Q2 2024, compared to 2.43% in Q1 2024, reflecting rising interest rates[38]. Noninterest Income and Expenses - Noninterest income surged to $7.4 million in Q2 2024, a 329.4% increase from $1.7 million in Q2 2023, driven by a sale-leaseback transaction[20]. - Noninterest income for Q2 2024 reached $7,347, a significant increase of 235.8% from Q1 2024 and 329.4% year-over-year[57]. - Noninterest expense totaled $15.6 million in Q2 2024, up from $14.3 million in Q1 2024 and $15.2 million in Q2 2023, mainly due to increased incentive compensation and a one-time tax assessment[22]. Shareholder Equity and Capital Ratios - Total shareholders' equity decreased to $158,900 thousand at June 30, 2024, compared to $160,500 thousand at March 31, 2024, due to a net loss of $2,200 thousand[43]. - Common Equity Tier 1 capital ratio was 12.4% as of June 30, 2024, remaining above regulatory requirements[43]. - Return on average equity for June 30, 2024, was -5.47%, compared to 4.41% for June 30, 2023[66]. - Book value per common share was $16.81, up from $16.56 a year earlier[62]. Operational Changes and Future Outlook - A reduction-in-force impacting 9% of the workforce was completed on July 24, 2024, expected to reduce compensation expenses by approximately $1.0 million per quarter starting in Q4 2024[5]. - The company anticipates potential risks including increased competitive pressures and changes in the interest rate environment affecting future performance[51]. - The Company authorized a new share repurchase plan for 944,279 shares in Q2 2024, alongside cash dividends totaling $670,000[44].