Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP | (Exact name of registrant as specified in its charter) | | | --- | --- | ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP | (Exact name of registrant as specified in its charter) | | | --- | --- | | Washington | 46-1259 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP | (Exact name of registrant as specified in its charter) | | | | --- | --- | --- | | Washington ...

Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) First Northwest Bancorp operates as a community-oriented financial institution in Western Washington, focusing on diverse lending activities and strategic fintech investments Key Financial Data as of December 31, 2019 | Metric | Amount (in millions) | | :--- | :--- | | Total Assets | $1,300 | | Net Loans | $878.4 | | Total Deposits | $1,000 | | Total Shareholders' Equity | $176.9 | - The company's lending activities are diverse, including one- to four-family mortgages, commercial and multi-family real estate, construction, commercial business, and consumer loans[19](index=19&type=chunk) - In 2019, the Company initiated a strategic partnership to invest up to **$3.0 million** in fintech-related businesses, signaling a focus on technological innovation[16](index=16&type=chunk)[165](index=165&type=chunk) [General Overview](index=6&type=section&id=General%20Overview) - First Northwest Bancorp is a Washington-based bank holding company for First Federal Savings and Loan Association of Port Angeles[15](index=15&type=chunk) - The company operates ten full-service branches and a lending center, serving Clallam, Jefferson, Kitsap, King, and Whatcom counties in Western Washington[18](index=18&type=chunk) [Market Area](index=6&type=section&id=Market%20Area) - The company primarily operates in Clallam, Jefferson, Kitsap, Whatcom, and King counties, with diverse local economies based on government, healthcare, tourism, technology, and military sectors[21](index=21&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The company plans to expand its operations throughout the Puget Sound Region, a major economic hub in the Pacific Northwest with key employment sectors in aerospace, technology, and international trade[28](index=28&type=chunk)[29](index=29&type=chunk) [Lending Activities](index=8&type=section&id=Lending%20Activities) Loan Portfolio Composition (December 31, 2019) | Loan Category | Amount (in millions) | Percent of Total | | :--- | :--- | :--- | | One- to four-family | $306.0 | 34.6% | | Commercial real estate | $255.7 | 28.9% | | Auto and other consumer | $112.1 | 12.7% | | Multi-family | $96.1 | 10.9% | | Commercial business | $41.6 | 4.7% | | Construction and land | $37.2 | 4.2% | | Home equity | $35.0 | 4.0% | | **Total Loans** | **$883.8** | **100.0%** | - As of December 31, 2019, **55.1%** of the total loan portfolio consisted of fixed-rate loans, while **44.9%** were adjustable-rate loans[33](index=33&type=chunk) - Total loan originations were **$199.8 million** in 2019, a decrease from **$253.4 million** in 2018, with loan purchases totaling **$68.0 million** in 2019, primarily consisting of auto loans[91](index=91&type=chunk)[92](index=92&type=chunk)[100](index=100&type=chunk) [Asset Quality](index=24&type=section&id=Asset%20Quality) Nonperforming Assets Trend | Metric | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total Nonperforming Assets | $1.95 million | $1.85 million | | Nonperforming Assets as % of Total Assets | 0.1% | 0.1% | | Nonaccruing Loans | $1.80 million | $1.72 million | - The allowance for loan losses was **$9.6 million**, or **1.1%** of total loans, at December 31, 2019, remaining stable compared to the prior year[122](index=122&type=chunk) - Troubled debt restructurings (TDRs) totaled **$3.5 million** as of December 31, 2019, with the vast majority performing in accordance with their modified terms[113](index=113&type=chunk) - Classified loans, consisting of substandard loans, increased to **$5.0 million** at year-end 2019 from **$3.4 million** at year-end 2018[116](index=116&type=chunk)[118](index=118&type=chunk) [Investment Activities](index=32&type=section&id=Investment%20Activities) - Total investment securities increased by **3.0%** to **$315.6 million** at December 31, 2019, with the portfolio's objective to provide liquidity, maintain earnings, and manage risk[136](index=136&type=chunk) - The portfolio is primarily composed of U.S. government agency issued mortgage-backed securities (**$159.7 million**), corporate issued asset-backed securities (**$41.7 million**), and municipal bonds (**$39.5 million**)[143](index=143&type=chunk) - During the fourth quarter of 2019, all held-to-maturity investments were reclassified as available-for-sale to provide greater flexibility in portfolio management[139](index=139&type=chunk) [Deposit Activities and Other Sources of Funds](index=36&type=section&id=Deposit%20Activities%20and%20Other%20Sources%20of%20Funds) Deposit Composition (December 31, 2019) | Deposit Type | Amount (in millions) | Percent of Total | | :--- | :--- | :--- | | Certificates of Deposit | $308.1 | 30.7% | | Money Market Accounts | $248.1 | 24.8% | | Savings Accounts | $169.0 | 16.9% | | Noninterest-bearing Transaction | $160.4 | 16.0% | | Interest-bearing Transaction | $116.1 | 11.6% | | **Total Deposits** | **$1,001.6** | **100.0%** | - Total deposits grew by **6.5%** to **$1.0 billion** in 2019, which included **$51.6 million** in brokered certificates of deposit[149](index=149&type=chunk)[152](index=152&type=chunk) - The company utilizes advances from the Federal Home Loan Bank (FHLB) for liquidity and interest rate risk management, with **$112.9 million** outstanding at year-end 2019 and a remaining borrowing capacity of **$243.2 million**[160](index=160&type=chunk)[161](index=161&type=chunk) [Regulation and Supervision](index=42&type=section&id=How%20We%20Are%20Regulated) - First Northwest Bancorp is regulated as a bank holding company by the Federal Reserve, and its subsidiary, First Federal, is a state-chartered savings bank regulated by the Washington State DFI and the FDIC[175](index=175&type=chunk)[177](index=177&type=chunk)[213](index=213&type=chunk) - The company and the bank are subject to minimum capital requirements, including a capital conservation buffer, and as of December 31, 2019, First Federal met the requirements to be categorized as "well capitalized"[191](index=191&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - Operations are subject to numerous federal and state laws, including the Community Reinvestment Act (CRA), Bank Secrecy Act (BSA), Dodd-Frank Act, and various consumer protection laws enforced by agencies like the CFPB[203](index=203&type=chunk)[209](index=209&type=chunk)[211](index=211&type=chunk)[231](index=231&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including increased credit concentration in commercial lending, rapid loan portfolio growth, interest rate fluctuations, intense competition, regulatory changes, and cybersecurity threats - Increased emphasis on commercial real estate lending, which reached **39.8%** of the total loan portfolio, exposes the company to higher credit risk compared to traditional residential lending[244](index=244&type=chunk)[245](index=245&type=chunk) - Rapid loan portfolio growth and geographic expansion into the Puget Sound region may increase credit risk, as these newer, less-seasoned loans have a limited performance history[248](index=248&type=chunk) - A significant concentration of credit exists, with the ten largest borrowing relationships totaling **$112.9 million**, or **12.8%** of total loans, increasing the risk of material loss from a single borrower's default[250](index=250&type=chunk) - The business is subject to interest rate risk, as changes in rates can affect net interest income, loan origination volumes, and the value of financial assets[280](index=280&type=chunk) - The company faces risks from its use of technology, including potential security breaches in its information systems and internet banking activities, which could result in liability and reputational damage[299](index=299&type=chunk)[301](index=301&type=chunk) [Item 2. Properties](index=61&type=section&id=Item%202.%20Properties) As of December 31, 2019, the company operated through ten branch offices and other administrative sites in Washington, with a net book value of **$12.2 million** for its properties - The company conducts business from ten branch offices and one loan production office in Washington state[306](index=306&type=chunk) - The net book value of the Company's properties was **$12.2 million** at December 31, 2019[306](index=306&type=chunk) [Item 3. Legal Proceedings](index=62&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine legal actions, none of which are expected to materially impact its financial condition or operations - There are no legal proceedings that are expected to have a material adverse effect on the company's financial position[309](index=309&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=62&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'FNWB,' and it actively engages in stock repurchase programs, including a new plan authorized in December 2019 - The company's common stock is listed on The Nasdaq Stock Market under the symbol "FNWB"[311](index=311&type=chunk) - A new stock repurchase plan was authorized on December 5, 2019, for up to **535,097 shares**, or approximately **5%** of outstanding shares at that time[313](index=313&type=chunk)[316](index=316&type=chunk) Stock Repurchases (Q4 2019) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2019 | 66,600 | $17.40 | | Nov 2019 | 33,400 | $17.26 | | Dec 2019 | 7,793 | $17.59 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details the company's strategy to diversify its loan portfolio and expand its market, highlighting **3.9% asset growth** to **$1.31 billion** and a **26.8% increase in net income** to **$9.0 million** in 2019, while maintaining strong capital [Business and Operating Strategy](index=64&type=section&id=Our%20Business%20and%20Operating%20Strategy) - The company's strategy includes expanding its geographic footprint, repositioning the loan portfolio towards higher-yielding commercial and auto loans, and enhancing infrastructure and technology[325](index=325&type=chunk)[326](index=326&type=chunk) - A key objective is to increase the portfolio of higher-yielding commercial loans, with commercial and multifamily real estate and commercial business loans growing to **44.5%** of total loans at year-end 2019 from **40.8%** a year prior[325](index=325&type=chunk)[327](index=327&type=chunk) - The company is focused on improving its online presence and exploring alternative lending opportunities, including a **$3.0 million** commitment to a fintech investment fund[328](index=328&type=chunk)[329](index=329&type=chunk) [Comparison of Financial Condition (2019 vs. 2018)](index=67&type=section&id=Comparison%20of%20Financial%20Condition%20at%20December%2031%2C%202019%20and%20December%2031%2C%202018) - Total assets increased by **$48.5 million** (**3.9%**) to **$1.31 billion**, driven by increases in cash, net loans, and investment securities[334](index=334&type=chunk) - Net loans receivable grew by **$14.5 million** (**1.6%**), with significant increases in auto loans (**+$24.7 million**) and commercial business loans (**+$22.7 million**), offset by a decrease in one- to four-family residential loans (**-$30.2 million**)[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk) - Total deposits increased by **$61.3 million** (**6.5%**) to **$1.0 billion**, while borrowings decreased by **$23.7 million** as the company utilized more brokered CDs for funding[348](index=348&type=chunk)[349](index=349&type=chunk) - Shareholders' equity rose by **$4.6 million** to **$176.9 million**, reflecting net income of **$9.0 million**, partially offset by **$7.8 million** in share repurchases[350](index=350&type=chunk) [Comparison of Results of Operations (2019 vs. 2018)](index=70&type=section&id=Comparison%20of%20Results%20of%20Operations%20for%20the%20Years%20Ended%20December%2031%2C%202019%20and%20December%2031%2C%202018) Key Operating Results | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Net Income | $9.0 million | $7.1 million | | Diluted EPS | $0.91 | $0.68 | | Net Interest Income | $37.9 million | $36.8 million | | Provision for Loan Losses | $0.7 million | $1.2 million | | Noninterest Income | $7.0 million | $5.9 million | | Noninterest Expense | $33.1 million | $32.9 million | - Net income increased by **26.8%** year-over-year, driven by higher net interest income and a **$0.5 million** increase in gain on sale of loans[351](index=351&type=chunk)[361](index=361&type=chunk)[363](index=363&type=chunk) - The net interest margin remained stable at **3.20%** for both 2019 and 2018, as the benefit from higher loan yields was offset by an increased cost of interest-bearing liabilities[353](index=353&type=chunk) [Asset and Liability Management and Market Risk](index=75&type=section&id=Asset%20and%20Liability%20Management%20and%20Market%20Risk) Interest Rate Sensitivity Analysis (as of Dec 31, 2019) | Change in Interest Rates (Basis Points) | Change in Economic Value of Equity (EVE) | Change in Net Interest Income (NII) over 1 Year | | :--- | :--- | :--- | | +300 | +0.1% | -15.5% | | +200 | +1.6% | -10.1% | | +100 | +1.8% | -4.9% | | -100 | -18.0% | -0.5% | - The company manages interest rate risk to minimize adverse effects of rate changes, with analysis showing net interest income projected to decrease in a rising rate environment, while the economic value of equity is projected to decrease significantly in a falling rate environment[371](index=371&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) [Capital Resources](index=78&type=section&id=Capital%20Resources) - Both the Company and the Bank exceeded all regulatory capital requirements as of December 31, 2019, and the Bank was considered "well capitalized" under FDIC guidelines[391](index=391&type=chunk) Bank Capital Ratios (as of Dec 31, 2019) | Ratio | Actual | Minimum to be Well-Capitalized | | :--- | :--- | :--- | | Common Equity Tier 1 (CET1) | 17.5% | 6.5% | | Tier 1 Risk-Based Capital | 17.5% | 8.0% | | Total Risk-Based Capital | 18.7% | 10.0% | | Tier 1 Leverage | 12.2% | 5.0% | [Item 8. Financial Statements and Supplementary Data](index=79&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2019 and 2018, along with the independent auditor's unqualified opinion on both the financial statements and internal control over financial reporting Consolidated Balance Sheet Highlights | (in thousands) | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$1,307,336** | **$1,258,758** | | Net Loans Receivable | $878,437 | $863,852 | | Total Investment Securities | $315,580 | $306,470 | | **Total Liabilities** | **$1,130,485** | **$1,086,494** | | Total Deposits | $1,001,645 | $940,260 | | Borrowings | $112,930 | $136,552 | | **Total Shareholders' Equity** | **$176,851** | **$172,264** | Consolidated Income Statement Highlights | (in thousands) | Year Ended Dec 31, 2019 | Year Ended Dec 31, 2018 | | :--- | :--- | :--- | | Net Interest Income | $37,865 | $36,792 | | Provision for Loan Losses | $669 | $1,174 | | Noninterest Income | $7,012 | $5,919 | | Noninterest Expense | $33,117 | $32,857 | | **Net Income** | **$9,014** | **$7,105** | [Item 9A. Controls and Procedures](index=135&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2019 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[685](index=685&type=chunk) - Management assessed the company's internal control over financial reporting as effective as of December 31, 2019, based on the COSO framework[688](index=688&type=chunk) - The independent registered public accounting firm, Moss Adams LLP, issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[689](index=689&type=chunk)[690](index=690&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=136&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, the audit committee, and corporate governance matters, including the code of ethics, is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information for this item is incorporated by reference from the company's Proxy Statement[695](index=695&type=chunk) [Item 11. Executive Compensation](index=136&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive and director compensation is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information for this item is incorporated by reference from the company's Proxy Statement[700](index=700&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=136&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership by certain beneficial owners and management, as well as details on equity compensation plans, is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information regarding security ownership is incorporated by reference from the company's Proxy Statement[701](index=701&type=chunk) - As of December 31, 2019, there were **1,324,150** securities available for future issuance under the 2015 Equity Incentive Plan[703](index=703&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=137&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding transactions with related persons and director independence is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information for this item is incorporated by reference from the company's Proxy Statement[704](index=704&type=chunk) [Item 14. Principal Accounting Fees and Services](index=137&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive Proxy Statement for the 2020 Annual Meeting of Shareholders - Information for this item is incorporated by reference from the company's Proxy Statement[705](index=705&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=137&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements included in Item 8 and provides a comprehensive list of exhibits filed with the report - This item lists the financial statements and exhibits filed with the Form 10-K[707](index=707&type=chunk)[710](index=710&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP (Exact name of registrant as specified in its charter) Washington 46-1259100 (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP (Exact name of registrant as specified in its charter) Washington 46-1259100 (State or other juri ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 001-36741 FIRST NORTHWEST BANCORP | (Exact name of registrant as specified in its charter) | | | --- | --- | | Washington | 46-125 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Commission File Number: 001-36741 FIRST NORTHWEST BANCORP | Washington | (Exact name of registrant as specified in its charter) 46-1259100 | | --- | --- | | (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer I.D. Number) | | 105 West 8th Street, Port Angeles, Washington | 98362 | | (Address of principal executive offices) | (Zip Code) | | Registrant's telephone number, including area code: | (360 ...