First Northwest Bancorp Reports Second Quarter 2025 Improved Profitability

Core Points - First Northwest Bancorp reported a net income of $3.7 million for Q2 2025, a significant recovery from a net loss of $9.0 million in Q1 2025 and a net loss of $2.2 million in Q2 2024 [1] - The Company recorded Adjusted Pre-Tax, Pre-Provision Net Revenue (PPNR) of $2.1 million in Q2 2025, up from $1.5 million in Q1 2025 and $530,000 in Q2 2024 [2][13] - The Board of Directors decided not to declare a dividend for this quarter, focusing on capital management and long-term strategic objectives [3] - The interim CEO highlighted modest improvements in performance measures, including a net interest margin expansion of seven basis points and a 3% annualized growth in loans compared to the previous quarter [5] Financial Performance - Return on average assets increased to 0.68% in Q2 2025 from -1.69% in Q1 2025 [10] - Net interest margin rose to 2.83% in Q2 2025, compared to 2.76% in Q1 2025 [10] - Efficiency ratio improved to 78.0% in Q2 2025 from 113.5% in Q1 2025, aided by a payroll tax credit [10] - Customer deposits increased by $19.6 million to $1.55 billion at June 30, 2025, from $1.53 billion at March 31, 2025 [10] Credit Quality - The allowance for credit losses on loans decreased to $18.4 million at June 30, 2025, from $20.6 million at March 31, 2025 [16] - Nonperforming loans remained stable at $20.4 million, with a decrease in the ACLL to nonperforming loans ratio to 90% from 101% in the previous quarter [17] - Total interest income increased to $27.1 million in Q2 2025, while total interest expense decreased to $12.9 million [18] Capital and Deposits - Total deposits decreased by $11.4 million to $1.65 billion at June 30, 2025, compared to $1.67 billion at March 31, 2025 [26] - Total shareholders' equity rose to $149.7 million at June 30, 2025, due to net income and changes in the fair market values of investment securities [27] - Capital ratios remain strong, with Common Equity Tier 1 and Total Risk-Based Capital Ratios at 12.1% and 13.1%, respectively [28]