First Northwest Bancorp Reports First Quarter 2025 Improved Profitability

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 diluted income per share of $0.04 for the first quarter of 2024. In the first quarter of 2025, the Company recorded adjusted pre-tax, pre-provision net revenue ("PPNR")(1) of $1.5 million, compared to $1.4 million for the preceding quarter and $1.2 million for the first quarter of 2024. The Board of Directors of First Northwest declared a quarterly cash dividend of $0.07 per common share, payable on May 23, 2025, to shareholders of record as of the close of business on May 9, 2025. Quote from First Northwest President and CEO, Matthew P. Deines:"We were pleased to see improved profitability in the first quarter of 2025, which helped grow capital levels and tangible book value. We saw improvement on our asset quality metrics, with nonperforming loans 14% lower than the prior quarter, and remain focused on continued asset quality improvement over the balance of 2025. Core commercial and consumer customer growth was positive during the first quarter, with lower net loans and deposits largely the result of a decrease in funding to one large wholesale relationship and reduced brokered deposit balances. We expect better core growth and asset quality trends, combined with ongoing expense discipline and modest margin improvement, will continue to improve profitability and capital in future quarters. With improved profitability, we are evaluating the potential for future stock buybacks." Key Points for First Quarter and Going Forward Positive Balance Sheet Trends: A favorable deposit mix shift included a $45.0 million decrease in brokered deposits while core customer deposits grew $23.0 million. The loan-to-deposit ratio was stable at 99.9% compared to 99.3% in the fourth quarter of 2024.The Company reduced borrowings by $28.9 million. The total cost of funds decreased to 2.67% compared to 2.80% in the fourth quarter of 2024. Update on provision for credit losses: The Company recorded a $1.6 million provision for credit losses on loans in the first quarter of 2025, primarily due to $1.4 million of charge-offs related to three commercial business loans, one commercial construction loan and a small number of consumer loans. This compares to loan credit loss provisions of $3.8 million for the preceding quarter and $1.2 million for the first quarter of 2024.We believe the reserve on individually analyzed loans does not represent a universal decline in the collectability of all loans in the portfolio. We continue to work on resolution plans for all troubled borrowers and expect further improvement in nonperforming loans over the course of 2025. Other significant events: First Fed Bank's ("First Fed" or the "Bank") balance sheet restructuring continued with the remaining bank-owned life insurance policy ("BOLI") surrender transaction recorded in the first quarter of 2025, with $266,000 of tax and penalties recorded in the provision for income tax. The surrendered policy value was reinvested in the second quarter of 2025. We expect to receive the return of the surrendered funds early in the third quarter of 2025.We sadly lost a former Bank employee in the first quarter of 2025, resulting in a $1.1 million BOLI death benefit gain.The Company recorded a $846,000 gain on extinguishment of debt related to repurchasing $5.0 million of subordinated debt at a discount during the first quarter of 2025. In addition to the current quarter gain, the future cost related to interest expense on the subordinated debt will be reduced.The Company also recognized a $315,000 gain on the conversion of a commercial business loan receivable into a Series A equity investment during the first quarter of 2025. (1) See reconciliation of Non-GAAP Financial Measures later in this release. Selected Quarterly Financial Ratios: As of or For the Quarter Ended March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Performance ratios: (1) Return on average assets 0.28% -0.51% -0.36% -0.40% 0.07%Adjusted PPNR return on average assets (2) 0.27 0.26 0.17 0.10 0.22 Return on average equity 3.92 -6.92 -4.91 -5.47 0.98 Net interest margin (3) 2.76 2.73 2.70 2.76 2.76 Efficiency ratio (4) 79.4 92.2 100.3 72.3 88.8 Equity to total assets 7.22 6.89 7.13 7.17 7.17 Book value per common share $16.63 $16.45 $17.17 $16.81 $17.00 Tangible performance ratios: (1) Tangible common equity to tangible assets (2) 7.15% 6.83% 7.06% 7.10% 7.10%Return on average tangible common equity (2) 3.96 -6.99 -4.96 -5.53 0.99 Tangible book value per common share (2) $16.48 $16.29 $17.00 $16.64 $16.83 Capital ratios (First Fed): (5) Tier 1 leverage 9.5% 9.4% 9.4% 9.4% 9.7%Common equity Tier 1 capital 12.7 12.4 12.2 12.4 12.6 Total risk-based 13.9 13.6 13.4 13.5 13.6 (1)Performance ratios are annualized, where appropriate.(2)See reconciliation of Non-GAAP Financial Measures later in this release.(3)Net interest income divided by average interest-earning assets.(4)Total noninterest expense as a percentage of net interest income and total other noninterest income.(5)Current period capital ratios are preliminary and subject to finalization of the FDIC Call Report. Adjusted Pre-tax, Pre-Provision Net Revenue (1) Adjusted PPNR for the first quarter of 2025 increased $40,000 to $1.5 million, compared to $1.4 million for the preceding quarter, and increased $308,000 from $1.2 million in the first quarter one year ago. For the Quarter Ended (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Net interest income $13,847 $14,137 $14,020 $14,235 $13,928 Total noninterest income 4,092 1,300 1,779 7,347 2,188 Total revenue 17,939 15,437 15,799 21,582 16,116 Total noninterest expense 14,249 14,233 15,848 15,609 14,303 PPNR (1) 3,690 1,204 (49) 5,973 1,813 Less selected nonrecurring adjustments to PPNR: BOLI death benefit 1,059 1,536 — — — Gain on extinguishment of subordinated debt included in other income 846 — — — — Gain on conversion of loan receivable into Series A equity investment 315 — — — — Equity investment repricing adjustment — (1,762) — — 651 One-time compensation payouts related to reduction in force — — (996) — — Net gain on sale of premises and equipment — — — 7,919 — Sale leaseback taxes and assessments included in occupancy and equipment — — — (359) — Net gain on sale of investment securities — — — (2,117) — Adjusted PPNR (1) $1,470 $1,430 $947 $530 $1,162 (1) See reconciliation of Non-GAAP Financial Measures later in this release. Total interest income decreased $1.4 million to $26.8 million for the first quarter of 2025, compared to $28.2 million for the previous quarter, and decreased $503,000 compared to $27.3 million in the first quarter of 2024. Interest income decreased in the first quarter of 2025 primarily due to a decrease in the income earned on loans receivable and reduced interest income received on Company deposit accounts as both yields earned and average volumes decreased. Average loan balances and related interest income were impacted by a significant decrease in the Northpointe Bank Mortgage Purchase Program ("Northpointe Bank MPP") of $24.7 million and $461,000, respectively. Variable-rate yields on loans and investments were impacted by the cumulative 100 basis points Federal Reserve rate cuts which occurred between September and December 2024.Total interest expense decreased $1.1 million to $13.0 million for the first quarter of 2025, compared to $14.1 million for the previous quarter, and decreased $422,000 compared to $13.4 million in the first quarter of 2024. Interest expense decreased in the first quarter of 2025 primarily due to decreases in interest paid on brokered certificates of deposit ("CDs"), money market accounts and customer CDs.The net interest margin increased to 2.76% for the first quarter of 2025, from 2.73% for the prior quarter, and was flat compared to the first quarter of 2024. The Company reported reduced rates and declining volumes of CDs and money market accounts during the first quarter of 2025 which lowered costs; however, these savings were partially offset by a decrease in interest earned on loans and an increase in cost due to higher average borrowings.Noninterest income included a $1.1 million BOLI death benefit payment received due to the passing of a former employee, a $846,000 gain on extinguishment of debt and a $315,000 gain on the conversion of a loan receivable into an equity investment during the current quarter.Noninterest expense was relatively unchanged at $14.3 million for the first quarter of 2025, compared to the previous quarter and the first quarter of 2024. Allowance for Credit Losses on Loans ("ACLL") and Credit Quality The allowance for credit losses on loans ("ACLL") increased $176,000 to $20.6 million at March 31, 2025, from $20.5 million at December 31, 2024. The ACLL as a percentage of total loans was 1.24% at March 31, 2025, an increase from 1.21% at December 31, 2024, and an increase from 1.05% one year earlier. The small increase to the pooled loan reserve combined with charge-offs totaling $1.4 million resulted in a provision expense of $1.6 million for the quarter ended March 31, 2025. Nonperforming loans totaled $26.4 million at March 31, 2025, a decrease of $4.1 million, or 13.5%, from December 31, 2024. ACLL to nonperforming loans increased to 78% at March 31, 2025, from 67% at December 31, 2024, and decreased from 92% at March 31, 2024. This ratio increased during the first quarter as principal payments and charge-offs decreased balances on loans that were already adequately reserved. Classified loans decreased $4.7 million to $37.9 million at March 31, 2025, from $42.5 million at December 31, 2024, primarily due to $3.9 million in principal payments received on two commercial construction loans and charge-offs totaling $825,000 on two commercial business loans and one commercial construction loan during the first quarter. An $8.1 million construction loan relationship, which became a classified loan in the fourth quarter of 2022; a $7.2 million commercial construction loan relationship, which became classified in the second quarter of 2024; and a $6.2 million commercial loan relationship, which became classified in the fourth quarter of 2023, account for 57% of the classified loan balance at March 31, 2025. The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in two of these three collateral-dependent relationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 16 loans totaling $1.7 million included in classified loans at March 31, 2025, and an additional seven loans totaling $2.4 million included in the special mention risk grading category. For the Quarter Ended ACLL ($ in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Balance at beginning of period $20,449 $21,970 $19,343 $17,958 $17,510 Charge-offs: Construction and land (374) (411) — (3,978) — Auto and other consumer (243) (364) (492) (832) (806)Commercial business (811) (4,596) (24) (2,643) (33)Total charge-offs (1,428) (5,371) (516) (7,453) (839)Recoveries: One-to-four family — — 42 — 2 Commercial real estate 6 2 — — — Auto and other consumer 43 52 24 198 46 Commercial business 2 36 — — — Total recoveries 51 90 66 198 48 Net loan charge-offs (1,377) (5,281) (450) (7,255) (791)Provision for credit losses 1,553 3,760 3,077 8,640 1,239 Balance at end of period $20,625 $20,449 $21,970 $19,343 $17,958 Average total loans 1,662,164 1,708,232 1,718,402 1,717,830 1,678,656 Annualized net charge-offs to average outstanding loans 0.34% 1.23% 0.10% 1.70% 0.19% Asset Quality ($ in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Nonaccrual loans: One-to-four family $1,404 $1,477 $1,631 $1,750 $1,237 Multi-family — — — 708 708 Commercial real estate 5,574 5,598 5,634 14 22 Construction and land 15,280 19,544 19,382 19,292 14,440 Home equity 54 55 116 118 121 Auto and other consumer 710 700 894 746 1,012 Commercial business 3,365 3,141 2,719 1,003 1,941 Total nonaccrual loans 26,387 30,515 30,376 23,631 19,481 Other real estate owned — — — — — Total nonperforming assets $26,387 $30,515 $30,376 $23,631 $19,481 Nonaccrual loans as a % of total loans (1) 1.59% 1.80% 1.75% 1.39% 1.14%Nonperforming assets as a % of total assets (2) 1.21 1.37 1.35 1.07 0.87 ACLL as a % of total loans 1.24 1.21 1.27 1.14 1.05 ACLL as a % of nonaccrual loans 78.16 67.01 72.33 81.85 92.18 Total past due loans to total loans 1.74 1.98 1.92 1.45 1.91 (1)Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due.(2)Nonperforming assets consists of nonperforming loans (which include nonaccruing loans and accruing loans more than 90 days past due), real estate owned and repossessed assets. Financial Condition and Capital Investment securities decreased $24.9 million, or 7.3%, to $315.4 million at March 31, 2025, compared to $340.3 million three months earlier, and decreased $10.5 million compared to $326.0 million at March 31, 2024. The market value of the portfolio increased $3.1 million during the first quarter of 2025. The estimated average life of the securities portfolio was approximately 6.9 years at March 31, 2025, 6.9 years at the prior quarter end and 7.8 years at the end of the first quarter of 2024. The effective duration of the portfolio was approximately 4.3 years at March 31, 2025, compared to 3.9 years at the prior quarter end and 4.4 years at the end of the first quarter of 2024. The MBS non-agency portfolio decreased $20.2 million due to early redemptions and maturities and $2.4 million from regular repayment activity during the most recent quarter. Investment Securities ($ in thousands) March 31, 2025 December 31, 2024 March 31, 2024 Three Month % Change One Year % Change Available for Sale at Fair Value Municipal bonds $78,295 $77,876 $87,004 0.5% -10.0%U.S. government agency issued asset-backed securities (ABS agency) 12,643 12,876 14,822 -1.8 -14.7 Corporate issued asset-backed securities (ABS corporate) 15,671 16,122 13,929 -2.8 12.5 Corporate issued debt securities (Corporate debt) 55,067 54,491 53,031 1.1 3.8 U.S. Small Business Administration securities (SBA) 8,061 8,666 7,911 -7.0 1.9 Mortgage-backed securities: U.S. government agency issued mortgage-backed securities (MBS agency) 96,642 98,697 83,271 -2.1 16.1 Non-agency issued mortgage-backed securities (MBS non-agency) 49,054 71,616 65,987 -31.5 -25.7 Total securities available for sale $315,433 $340,344 $325,955 -7.3 -3.2 Net loans, excluding loans held for sale, decreased $31.4 million, or 1.9%, to $1.64 billion at March 31, 2025, from $1.68 billion at December 31, 2024, and decreased $49.0 million, or 2.9%, from $1.69 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $13.3 million. Loan payoffs of $71.0 million, regular payments of $29.4 million and charge-offs totaling $1.4 million outpaced new loan funding totaling $45.3 million and draws on existing loans totaling $23.3 million. The large decrease in commercial business loans was due to the change in funding needs of the Northpointe Bank MPP, which dropped $36.2 million compared to the prior quarter. Loans ($ in thousands) March 31, 2025 December 31, 2024 March 31, 2024 Three Month % Change One Year % Change Real Estate: One-to-four family $394,428 $395,315 $383,905 -0.2% 2.7%Multi-family 338,147 332,596 339,538 1.7 -0.4 Commercial real estate 392,882 390,379 385,130 0.6 2.0 Construction and land 64,877 78,110 125,347 -16.9 -48.2 Total real estate loans 1,190,334 1,196,400 1,233,920 -0.5 -3.5 Consumer: Home equity 79,151 79,054 72,391 0.1 9.3 Auto and other consumer 273,878 268,876 268,834 1.9 1.9 Total consumer loans 353,029 347,930 341,225 1.5 3.5 Commercial business 120,486 151,493 136,297 -20.5 -11.6 Total loans receivable 1,663,849 1,695,823 1,711,442 -1.9 -2.8 Less: Derivative basis adjustment (566) 188 710 -401.1 -179.7 Allowance for credit losses on loans 20,625 20,449 17,958 0.9 14.9 Total loans receivable, net $1,643,790 $1,675,186 $1,692,774 -1.9 -2.9 Total deposits decreased $22.0 million to $1.67 billion at March 31, 2025, compared to $1.69 billion at December 31, 2024, and was relatively unchanged compared to one year prior. During the first quarter of 2025, total customer deposit balances increased $23.0 million and brokered deposit balances decreased $45.0 million. Overall, the current rate environment continues to contribute to greater competition for deposits leading to higher rates paid on interest-bearing demand deposits and savings accounts during the current quarter. The deposit mix compared to March 31, 2024, also reflects a shift to higher demand and money market account balances with increased rates paid on those accounts while rates paid on certificate and savings accounts decreased. Deposits ($ in thousands) March 31, 2025 December 31, 2024 March 31, 2024 Three Month % Change One Year % Change Noninterest-bearing demand deposits $247,890 $256,416 $252,761 -3.3% -1.9%Interest-bearing demand deposits 169,912 164,891 170,729 3.0 -0.5 Money market accounts 424,469 413,822 395,480 2.6 7.3 Savings accounts 235,188 205,055 236,550 14.7 -0.6 Certificates of deposit, customer 450,663 464,928 418,904 -3.1 7.6 Certificates of deposit, brokered 137,946 182,914 192,200 -24.6 -28.2 Total deposits $1,666,068 $1,688,026 $1,666,624 -1.3 0.0 Total shareholders’ equity increased to $157.0 million at March 31, 2025, compared to $153.9 million three months earlier, due to an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $2.4 million and net income of $1.5 million, partially offset by dividends declared of $656,000 and a decrease in the after-tax fair market values of derivatives of $425,000. Capital levels for both the Company and the Bank remain in excess of applicable regulatory requirements and the Bank was categorized as "well-capitalized" at March 31, 2025. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at March 31, 2025, were 12.7% and 13.9%, respectively. First Northwest continued to return capital to our shareholders through cash dividends during the first quarter of 2025. The Company paid cash dividends totaling $649,000 in the first quarter of 2025. No shares of common stock were repurchased under the Company's April 2024 Stock Repurchase Plan (the "Repurchase Plan") during the quarter ended March 31, 2025. There are 846,123 shares that remain available for repurchase under the Repurchase Plan. 2024 Awards/Recognition Sound Publishing:Puget Sound Business Journal Top Corporate Philanthropists Best of the Olympic Peninsula AwardsBellingham Best of the Northwest - Silver Best Lender in Clallam and Jefferson County The Leader Readers Choice Award - Best Bank Best Bank in Clallam County and West End We recommend reading this earnings release in conjunction with the First Quarter 2025 Investor Presentation, located at http://investor.ourfirstfed.com/quarterly-reports and included as an exhibit to our April 24, 2025, Current Report on Form 8-K. About the CompanyFirst Northwest Bancorp (Nasdaq: FNWB) is a financial holding company engaged in investment activities including the business of its subsidiary, First Fed Bank. First Fed is a Pacific Northwest-based financial institution which has served its customers and communities since 1923. Currently First Fed has 18 locations in Washington state including 12 full-service branches. First Fed’s business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. In 2022, First Northwest made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm. Additionally, First Northwest focuses on strategic partnerships to provide modern financial services such as digital payments and marketplace lending. First Northwest Bancorp was incorporated in 2012 and completed its initial public offering in 2015 under the ticker symbol FNWB. The Company is headquartered in Port Angeles, Washington. Forward-Looking StatementsCertain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, projections of future performance and execution on certain strategies, perceived opportunities in the market, potential future credit experience, including our ability to collect, the outcome of litigation and statements regarding our mission and vision, and include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements often identified by words such as "believes," "expects," "anticipates," "estimates," or similar expressions. These forward-looking statements are based upon current management beliefs and expectations and may, therefore, involve risks and uncertainties, many of which are beyond our control. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety of factors including, but not limited to: increased competitive pressures; changes in the interest rate environment; the credit risks of lending activities; pressures on liquidity, including as a result of withdrawals of deposits or declines in the value of our investment portfolio; changes in general economic conditions and conditions within the securities markets, including potential recessionary and other unfavorable conditions and trends relating to housing markets, costs of living, unemployment levels, interest rates, supply chain difficulties and inflationary pressures, among other things; legislative, regulatory, and policy changes; and other factors described in the Company’s latest Annual Report on Form 10-K under the section entitled "Risk Factors," and other filings with the Securities and Exchange Commission ("SEC"),which are available on our website at www.ourfirstfed.com and on the SEC’s website at www.sec.gov. Any of the forward-looking statements that we make in this press release and in the other public statements we make may turn out to be incorrect because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed or implied in any forward-looking statements made by or on our behalf and the Company's operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Company’s operations and stock price performance. For More Information Contact:Matthew P. Deines, President and Chief Executive OfficerPhyllis Nomura, EVP and Chief Financial OfficerIRGroup@ourfirstfed.com360-457-0461 FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share data) (Unaudited) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 ASSETS Cash and due from banks $18,911 $16,811 $17,953 $19,184 $15,562 Interest-earning deposits in banks 51,412 55,637 64,769 63,995 61,784 Investment securities available for sale, at fair value 315,433 340,344 310,860 306,714 325,955 Loans held for sale 2,940 472 378 1,086 988 Loans receivable (net of allowance for credit losses on loans $20,625, $20,449, $21,970, $19,343, and $17,958) 1,643,790 1,675,186 1,714,416 1,677,764 1,692,774 Federal Home Loan Bank (FHLB) stock, at cost 13,106 14,435 14,435 13,086 15,876 Accrued interest receivable 8,319 8,159 8,939 9,466 8,909 Premises held for sale, net — — — — 6,751 Premises and equipment, net 9,870 10,129 10,436 10,714 11,028 Servicing rights on sold loans, at fair value 3,301 3,281 3,584 3,740 3,820 Bank-owned life insurance, net 31,786 41,150 41,429 41,113 34,681 Equity and partnership investments 15,026 13,229 14,912 15,085 15,121 Goodwill and other intangible assets, net 1,082 1,082 1,083 1,084 1,085 Deferred tax asset, net 13,179 13,738 10,802 12,216 12,704 Right-of-use ("ROU") asset, net 16,687 17,001 17,315 17,627 5,841 Prepaid expenses and other assets 31,588 21,352 24,175 23,088 27,141 Total assets $2,176,430 $2,232,006 $2,255,486 $2,215,962 $2,240,020 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $1,666,068 $1,688,026 $1,711,641 $1,708,288 $1,666,624 Borrowings 307,091 336,014 334,994 302,575 371,455 Accrued interest payable 2,163 3,295 2,153 3,143 2,830 Lease liability, net 17,266 17,535 17,799 18,054 6,227 Accrued expenses and other liabilities 24,217 31,770 25,625 23,717 29,980 Advances from borrowers for taxes and insurance 2,583 1,484 2,485 1,304 2,398 Total liabilities 2,019,388 2,078,124 2,094,697 2,057,081 2,079,514 Shareholders' Equity Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding — — — — — Common stock, $0.01 par value, 75,000,000 shares authorized; issued and outstanding at each period end: 9,440,618; 9,353,348; 9,365,979; 9,453,247; and 9,442,796 94 93 94 94 94 Additional paid-in capital 93,450 93,357 93,218 93,985 93,763 Retained earnings 98,056 97,198 100,660 103,322 106,202 Accumulated other comprehensive loss, net of tax (28,129) (30,172) (26,424) (31,597) (32,465)Unearned employee stock ownership plan (ESOP) shares (6,429) (6,594) (6,759) (6,923) (7,088)Total shareholders' equity 157,042 153,882 160,789 158,881 160,506 Total liabilities and shareholders' equity $2,176,430 $2,232,006 $2,255,486 $2,215,962 $2,240,020 FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share data) (Unaudited) For the Quarter Ended March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 INTEREST INCOME Interest and fees on loans receivable $22,231 $23,716 $23,536 $23,733 $22,767 Interest on investment securities 3,803 3,658 3,786 3,949 3,632 Interest on deposits in banks 482 550 582 571 645 FHLB dividends 307 273 302 358 282 Total interest income 26,823 28,197 28,206 28,611 27,326 INTEREST EXPENSE Deposits 9,737 11,175 10,960 10,180 10,112 Borrowings 3,239 2,885 3,226 4,196 3,286 Total interest expense 12,976 14,060 14,186 14,376 13,398 Net interest income 13,847 14,137 14,020 14,235 13,928 PROVISION FOR CREDIT LOSSES Provision for credit losses on loans 1,553 3,760 3,077 8,640 1,239 Provision for (recapture of) credit losses on unfunded commitments 15 (105) 57 99 (269)Provision for credit losses 1,568 3,655 3,134 8,739 970 Net interest income after provision for credit losses 12,279 10,482 10,886 5,496 12,958 NONINTEREST INCOME Loan and deposit service fees 1,106 1,054 1,059 1,076 1,102 Sold loan servicing fees and servicing rights mark-to-market 195 (115) 10 74 219 Net gain on sale of loans 11 52 58 150 52 Net gain on sale of investment securities — — — (2,117) — Net gain on sale of premises and equipment — — — 7,919 — Increase in cash surrender value of bank-owned life insurance 372 328 315 293 243 Income from death benefit on bank-owned life insurance, net 1,059 1,536 — — — Other income (loss) 1,349 (1,555) 337 (48) 572 Total noninterest income 4,092 1,300 1,779 7,347 2,188 NONINTEREST EXPENSE Compensation and benefits 7,715 7,367 8,582 8,588 8,128 Data processing 2,011 2,065 2,085 2,008 1,944 Occupancy and equipment 1,592 1,559 1,553 1,799 1,240 Supplies, postage, and telephone 298 296 360 317 293 Regulatory assessments and state taxes 479 460 548 457 513 Advertising 265 362 409 377 309 Professional fees 777 813 698 684 910 FDIC insurance premium 434 491 533 473 386 Other expense 678 820 1,080 906 580 Total noninterest expense 14,249 14,233 15,848 15,609 14,303 Income (loss) before provision for income taxes 2,122 (2,451) (3,183) (2,766) 843 Provision for income taxes 608 359 (1,203) (547) 447 Net income (loss) $1,514 $(2,810) $(1,980) $(2,219) $396 Basic and diluted earnings (loss) per common share $0.17 $(0.32) $(0.23) $(0.25) $0.04 FIRST NORTHWEST BANCORP AND SUBSIDIARYADDITIONAL INFORMATION(Dollars in thousands) (Unaudited) Selected Loan Detail March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Construction and land loans breakout 1-4 Family construction $42,371 $39,319 $43,125 $56,514 $69,075 Multifamily construction 9,223 15,407 29,109 43,341 45,776 Nonresidential construction 7,229 16,857 17,500 1,015 3,374 Land and development 6,054 6,527 5,975 6,403 7,122 Total construction and land loans $64,877 $78,110 $95,709 $107,273 $125,347 Auto and other consumer loans breakout Triad Manufactured Home loans $134,740 $128,231 $129,600 $110,510 $119,309 Woodside auto loans 118,972 117,968 126,129 131,151 128,072 First Help auto loans 13,012 14,283 15,971 17,427 8,326 Other auto loans 1,313 1,647 2,064 2,690 3,313 Other consumer loans 5,841 6,747 7,434 23,845 9,814 Total auto and other consumer loans $273,878 $268,876 $281,198 $285,623 $268,834 Commercial business loans breakout Northpointe Bank MPP $- $36,230 $38,155 $9,150 $15,047 Secured lines of credit 39,986 35,701 37,686 28,862 41,014 Unsecured lines of credit 2,030 1,717 1,571 1,133 1,001 SBA loans 6,889 7,044 7,219 7,146 8,944 Other commercial business loans 71,581 70,801 70,696 70,803 70,291 Total commercial business loans $120,486 $151,493 $155,327 $117,094 $136,297 Loans by Collateral and Unfunded Commitments March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 One-to-four family construction $38,221 $44,468 $51,607 $49,440 $70,100 All other construction and land 30,947 34,290 45,166 58,346 55,286 One-to-four family first mortgage 428,081 466,046 469,053 434,840 436,543 One-to-four family junior liens 15,155 15,090 14,701 13,706 12,608 One-to-four family revolving open-end 51,832 51,481 48,459 44,803 45,536 Commercial real estate, owner occupied: Health care 29,386 29,129 29,407 29,678 29,946 Office 19,363 17,756 17,901 19,215 17,951 Warehouse 14,843 14,948 11,645 14,613 14,683 Other 74,915 78,170 64,535 56,292 55,063 Commercial real estate, non-owner occupied: Office 41,885 49,417 49,770 50,158 53,099 Retail 50,737 49,591 49,717 50,101 50,478 Hospitality 62,226 61,919 62,282 62,628 66,982 Other 93,549 81,640 82,573 84,428 93,040 Multi-family residential 339,217 333,419 354,118 350,382 339,907 Commercial business loans 76,330 77,381 86,904 79,055 90,781 Commercial agriculture and fishing loans 22,914 21,833 15,369 14,411 10,200 State and political subdivision obligations 369 369 404 405 405 Consumer automobile loans 133,209 133,789 144,036 151,121 139,524 Consumer loans secured by other assets 137,619 131,429 132,749 129,293 122,895 Consumer loans unsecured 3,051 3,658 4,411 5,209 6,415 Total loans $1,663,849 $1,695,823 $1,734,807 $1,698,124 $1,711,442 Unfunded commitments under lines of credit or existing loans $172,260 $163,827 $166,446 $155,005 $148,736 FIRST NORTHWEST BANCORP AND SUBSIDIARYNET INTEREST MARGIN ANALYSIS(Dollars in thousands) (Unaudited) Three Months Ended March 31, 2025 2024 Average Interest Average Interest Balance Earned/ Yield/ Balance Earned/ Yield/ Outstanding Paid Rate Outstanding Paid Rate (Dollars in thousands) Interest-earning assets: Loans receivable, net (1) (2) $1,642,007 $22,231 5.49% $1,661,420 $22,767 5.51%Investment securities 333,208 3,803 4.63 307,490 3,632 4.75 FHLB dividends 13,609 307 9.15 12,328 282 9.20 Interest-earning deposits in banks 42,917 482 4.55 46,583 645 5.57 Total interest-earning assets (3) 2,031,741 26,823 5.35 2,027,821 27,326 5.42 Noninterest-earning assets 143,033 138,366 Total average assets $2,174,774 $2,166,187 Interest-bearing liabilities: Interest-bearing demand deposits $168,414 $260 0.63 $165,379 $187 0.45 Money market accounts 414,425 2,345 2.29 377,505 1,949 2.08 Savings accounts 216,499 783 1.47 235,784 953 1.63 Certificates of deposit, customer 451,936 4,522 4.06 437,525 4,494 4.13 Certificates of deposit, brokered 158,269 1,827 4.68 205,923 2,529 4.94 Total interest-bearing deposits (4) 1,409,543 9,737 2.80 1,422,116 10,112 2.86 Advances 279,500 2,796 4.06 252,912 2,892 4.60 Subordinated debt 38,370 443 4.68 39,446 394 4.02 Total interest-bearing liabilities 1,727,413 12,976 3.05 1,714,474 13,398 3.14 Noninterest-bearing deposits (4) 243,569 249,283 Other noninterest-bearing liabilities 47,238 40,563 Total average liabilities 2,018,220 2,004,320 Average equity 156,554 161,867 Total average liabilities and equity $2,174,774 $2,166,187 Net interest income $13,847 $13,928 Net interest rate spread 2.30 2.28 Net earning assets $304,328 $313,347 Net interest margin (5) 2.76 2.76 Average interest-earning assets to average interest-bearing liabilities 117.6% 118.3% (1)The average loans receivable, net balances include nonaccrual loans.(2)Interest earned on loans receivable includes net deferred costs of ($338,000) and ($171,000) for the three months ended March 31, 2025 and 2024, respectively.(3)Includes interest-earning deposits (cash) at other financial institutions.(4)Cost of all deposits, including noninterest-bearing demand deposits, was 2.39% and 2.43% for the three months ended March 31, 2025 and 2024, respectively.(5)Net interest income divided by average interest-earning assets. FIRST NORTHWEST BANCORP AND SUBSIDIARYADDITIONAL INFORMATION(Dollars in thousands) (Unaudited) Non-GAAP Financial MeasuresThis press release contains financial measures that are not in conformity with generally accepted accounting principles in the United States of America ("GAAP"). Non-GAAP measures are presented where management believes the information will help investors understand the Company’s results of operations or financial position and assess trends. Where non-GAAP financial measures are used, the comparable GAAP financial measure is also provided. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Reconciliations of the GAAP and non-GAAP measures are presented below. Calculations Based on PPNR and Adjusted PPNR: For the Quarter Ended (Dollars in thousands) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Net income (loss) $1,514 $(2,810) $(1,980) $(2,219) $396 Plus: provision for credit losses 1,568 3,655 3,134 8,739 970 Provision for income taxes 608 359 (1,203) (547) 447 PPNR (1) 3,690 1,204 (49) 5,973 1,813 Less selected nonrecurring adjustments to PPNR: BOLI death benefit 1,059 1,536 — — — Gain on extinguishment of subordinated debt included in other income 846 — — — — Gain on conversion of loan receivable into Series A equity investment 315 — — — — Equity investment repricing adjustment — (1,762) — — 651 One-time compensation payouts related to reduction in force — — (996) — — Net gain on sale of premises and equipment — — — 7,919 — Sale leaseback taxes and assessments included in occupancy and equipment — — — (359) — Net gain on sale of investment securities — — — (2,117) — Adjusted PPNR (1) $1,470 $1,430 $947 $530 $1,162 Average total assets $2,174,774 $2,205,502 $2,209,333 $2,219,370 $2,166,187 Return on average assets (GAAP) 0.28% -0.51% -0.36% -0.40% 0.07%PPNR return on average assets (Non-GAAP) (1) 0.69% 0.22% -0.01% 1.08% 0.34%Adjusted PPNR return on average assets (Non-GAAP) (1) 0.27% 0.26% 0.17% 0.10% 0.22% (1)PPNR removes the provisions for credit loss and income tax from net income. This removes potentially volatile estimates, providing a comparative amount limited to income and expense recorded during the period. Adjusted PPNR further removes large nonrecurring transactions recorded during the period. We believe these metrics provide comparative amounts for a better review of recurring net revenue. FIRST NORTHWEST BANCORP AND SUBSIDIARYADDITIONAL INFORMATION(Dollars in thousands) (Unaudited) Calculations Based on Tangible Common Equity: For the Quarter Ended (Dollars in thousands, except per share data) March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Total shareholders' equity $157,042 $153,882 $160,789 $158,881 $160,506 Less: Goodwill and other intangible assets 1,082 1,082 1,083 1,084 1,085 Disallowed non-mortgage loan servicing rights 415 423 489 517 489 Total tangible common equity $155,545 $152,377 $159,217 $157,280 $158,932 Total assets $2,176,430 $2,232,006 $2,255,486 $2,215,962 $2,240,020 Less: Goodwill and other intangible assets 1,082 1,082 1,083 1,084 1,085 Disallowed non-mortgage loan servicing rights 415 423 489 517 489 Total tangible assets $2,174,933 $2,230,501 $2,253,914 $2,214,361 $2,238,446 Average shareholders' equity $156,554 $161,560 $160,479 $163,079 $161,867 Less: Average goodwill and other intangible assets 1,082 1,083 1,084 1,085 1,085 Average disallowed non-mortgage loan servicing rights 423 489 517 489 481 Total average tangible common equity $155,049 $159,988 $158,878 $161,505 $160,301 Net income (loss) $1,514 $(2,810) $(1,980) $(2,219) $396 Common shares outstanding 9,440,618 9,353,348 9,365,979 9,453,247 9,442,796 GAAP Ratios: Equity to total assets 7.22% 6.89% 7.13% 7.17% 7.17%Return on average equity 3.92% -6.92% -4.91% -5.47% 0.98%Book value per common share $16.63 $16.45 $17.17 $16.81 $17.00 Non-GAAP Ratios: Tangible common equity to tangible assets (1) 7.15% 6.83% 7.06% 7.10% 7.10%Return on average tangible common equity (1) 3.96% -6.99% -4.96% -5.53% 0.99%Tangible book value per common share (1) $16.48 $16.29 $17.00 $16.64 $16.83 (1)We believe that the use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. Photos accompanying this announcement are available at: https://www.globenewswire.com/NewsRoom/AttachmentNg/d5c93711-67c1-4664-a49c-37df22040147 https://www.globenewswire.com/NewsRoom/AttachmentNg/4a3584b1-1204-464b-8080-7fcc46d66470 https://www.globenewswire.com/NewsRoom/AttachmentNg/37ce187a-5662-457d-bd13-66e409ac2710 https://www.globenewswire.com/NewsRoom/AttachmentNg/4b958691-2f11-4ceb-a89a-ab88b1b1d702 https://www.globenewswire.com/NewsRoom/AttachmentNg/7207465f-e4fb-4f05-8218-e87558fb913c https://www.globenewswire.com/NewsRoom/AttachmentNg/1c8a4efe-4d1b-4b02-bdac-6fd686314c0b

First Northwest Bancorp Reports First Quarter 2025 Improved Profitability

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