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First Northwest Bancorp Reports Second Quarter 2025 Improved Profitability

1. FNWB reports Q2 2025 net income of $3.7 million. 2. Adjusted Pre-Tax, Pre-Provision Net Revenue increased to $2.1 million. 3. Board delays dividend declaration to maintain capital management. 4. Loan recoveries lead to modest improvement in performance metrics. 5. Nonperforming loans remain stable amidst ongoing legal disputes.

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FAQ

Why Bullish?

The shift from substantial losses to net income indicates operational recovery, reflecting improved sentiment in FNWB's financial health. Historical correlations show similar rebounds in net income often result in upward stock adjustments.

How important is it?

The significant transition from losses to profits in FNWB’s quarterly results is likely to impact investor perceptions and stock price positively due to reduced financial uncertainty.

Why Short Term?

The immediate improvement in financials tends to drive short-term investor confidence; however, core challenges like legal matters persist. Historically, market reactions to earnings changes are most pronounced within a quarter.

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CFGTRMKSTT
PORT ANGELES, Wash., July 24, 2025 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company"), the holding company for First Fed Bank ("First Fed" or the "Bank"), today reported net income of $3.7 million for the second quarter of 2025, compared to a net loss of $9.0 million for the first quarter of 2025 and a net loss of $2.2 million for the second quarter of 2024. Basic and diluted income per share were $0.42 for the second quarter of 2025, compared to basic and diluted loss per share of $1.03 for the first quarter of 2025 and basic and diluted loss per share of $0.25 for the second quarter of 2024.  In the second quarter of 2025, the Company recorded Adjusted Pre-Tax, Pre-Provision Net Revenue ("PPNR")(1) of $2.1 million, compared to $1.5 million for the preceding quarter and $530,000 for the second quarter of 2024. The Board of Directors of First Northwest has elected not to declare a dividend for this quarter as part of a prudent approach to capital management. The Company remains committed to maintaining a strong balance sheet and will continue to evaluate future dividend decisions in light of the Company’s long-term strategic objectives. Quote from Cindy Finnie, First Northwest Board Chair:"As previously disclosed, the Board has begun a search process for the next full time Chief Executive Officer. We also continue to strongly dispute the allegations contained in the legal proceedings disclosed in our June 13, 2025, 8-K and intend to vigorously defend against them. Despite the volatility of the past few quarters, the Board remains focused on the strategic objectives of the Bank, building on the positive core trends from the past few quarters." Quote from Geraldine Bullard, First Northwest Interim CEO:"Our second quarter included continued modest improvement in several important performance measures, including seven basis points of net interest margin expansion and our fifth consecutive quarter of growing Adjusted PPNR. Commercial business loan recoveries totaling $1.1 million drove a modest provision release during the quarter. The Bank continues to show core customer growth, with loans growing 3% annualized compared to the preceding quarter and total deposits only down modestly despite a $31.0 million reduction in brokered time deposits during the quarter." Key Points for the Second Quarter Positive Trends: Return on average assets increased to 0.68% for the current quarter from -1.69% in the preceding quarter.Net interest margin increased to 2.83% for the current quarter compared to 2.76% in the first quarter of 2025, as a result of an increase in the yield on interest-earning assets and a decrease in the rate paid on interest-bearing liabilities.Efficiency ratio improved to 78.0% for the current quarter from 113.5% in the preceding quarter due to the recognition of a payroll tax credit in the current quarter while the preceding quarter included higher expenses related to the legal reserve recorded.Customer deposits increased $19.6 million to $1.55 billion at June 30, 2025 from $1.53 billion at March 31, 2025.Recorded a $296,000 recapture of provision for credit losses on loans in the second quarter of 2025, compared to provisions for credit losses on loans of $7.8 million for the preceding quarter and $8.7 million for the second quarter of 2024. Other significant events: In the second quarter of 2025, the statute of limitations expired on employee retention credit ("ERC") payments received for the first and second quarters of 2021. As a result, the Bank recorded $2.6 million as a reduction to compensation and benefits. A related contingent ERC consulting expense of $528,000 was recorded in professional fees, partially offsetting the credit. The Bank anticipates recording the remaining reserved ERC of $2.0 million in 2028.During the second quarter of 2025, the Bank consolidated the operations of its Bellevue and Fremont business centers into a new location, the Seattle business center. This consolidation resulted in a one-time increase to other expense of $599,000 for the early termination of the Bellevue business center lease and write-off of remaining leasehold improvements. No additional costs were incurred for closing the Fremont business center. The Bank estimates the consolidation will reduce annual rent expense by $130,000 going forward.The Company disclosed in its Current Report on Form 8-K filed on July 21, 2025, that a settlement agreement was reached in the previously disclosed legal matter discussed in Part II, Item 1 of the Company's Form 10-Q for the quarter ended March 31, 2025. The Bank continues to vigorously defend itself in the separate legal proceedings disclosed in the Company's Current Report on Form 8-K filed on June 13, 2025. (1)  See reconciliation of Non-GAAP Financial Measures later in this release. Selected Quarterly Financial Ratios:   As of or For the Quarter Ended  As of or For the Six Months Ended June 30,   June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024  2025  2024 Performance ratios: (1)                            Return on average assets  0.68%  -1.69%  -0.51%  -0.36%  -0.40%  -0.50%  -0.17%Adjusted PPNR return on average assets (2)  0.39   0.27   0.26   0.17   0.10   0.33   0.16 Return on average equity  10.00   -23.42   -6.92   -4.91   -5.47   -7.15   -2.26 Net interest margin (3)  2.83   2.76   2.73   2.70   2.76   2.80   2.76 Efficiency ratio (4)  78.0   113.5   92.2   100.3   72.3   96.40   79.35 Equity to total assets  6.82   6.75   6.89   7.13   7.17   6.82   7.17 Book value per common share $15.85  $15.52  $16.45  $17.17  $16.81  $15.85  $16.81 Tangible performance ratios: (1)                            Tangible common equity to tangible assets (2)  6.76%  6.68%  6.83%  7.06%  7.10%  6.76%  7.10%Return on average tangible common equity (2)  10.10   -23.65   -6.99   -4.96   -5.53   -7.22   -2.28 Tangible book value per common share (2) $15.70  $15.36  $16.29  $17.00  $16.64  $15.70  $16.64 Capital ratios (First Fed): (5)                            Tier 1 leverage  9.2%  9.0%  9.4%  9.4%  9.4%  9.2%  9.4%Common equity Tier 1  12.1   12.1   12.4   12.2   12.4   12.1   12.4 Total risk-based  13.1   13.4   13.6   13.4   13.5   13.1   13.5  (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 second quarter of 2025 increased $616,000 to $2.1 million, compared to $1.5 million for the preceding quarter, and increased $1.6 million from $530,000 in the second quarter one year ago.   For the Quarter Ended  For the Six Months Ended (Dollars in thousands) June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024  June 30, 2025  June 30, 2024 Net interest income (GAAP) $14,193  $13,847  $14,137  $14,020  $14,235  $28,040  $28,163 Total noninterest income (GAAP)  2,170   3,777   1,300   1,779   7,347   5,947   9,535 Total revenue (GAAP)  16,363   17,624   15,437   15,799   21,582   33,987   37,698 Total noninterest expense (GAAP)  12,765   20,000   14,233   15,848   15,609   32,765   29,912 PPNR (Non-GAAP) (1)  3,598   (2,376)  1,204   (49)  5,973   1,222   7,786 Less selected nonrecurring adjustments to PPNR (Non-GAAP):                            Employee retention credit ("ERC") included in compensation and benefits  2,640   —   —   —   —   2,640   — ERC consulting expense included in professional fees  (528)  —   —   —   —   (528)  — Costs associated with early termination of Bellevue Business Center lease included in other expense  (599)  —   —   —   —   (599)  — Bank-owned life insurance ("BOLI") death benefit  —   1,059   1,536   —   —   1,059   — Gain on extinguishment of subordinated debt included in other income  —   846   —   —   —   846   — Legal reserve  —   (5,750)  —   —   —   (5,750)  — 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   —   7,919 Sale leaseback taxes and assessments included in occupancy and equipment  —   —   —   —   (359)  —   (359)Net loss on sale of investment securities  —   —   —   —   (2,117)  —   (2,117)Adjusted PPNR (Non-GAAP) (1) $2,085  $1,469  $1,430  $947  $530  $3,554  $1,692  (1)  See reconciliation of Non-GAAP Financial Measures later in this release. Total interest income increased $308,000 to $27.1 million for the second quarter of 2025, compared to $26.8 million for the preceding quarter, and decreased $1.5 million compared to $28.6 million in the second quarter of 2024. Interest income increased in the second quarter of 2025 primarily due to an increase in the yields earned on loans receivable, partially offset by a decrease in both the yield earned and average volume of investment securities. Average real estate and commercial business loan balances decreased while average consumer loan balances increased over the preceding quarter.Total interest expense decreased $38,000 to $12.9 million for the second quarter of 2025, compared to $13.0 million for the preceding quarter, and decreased $1.4 million compared to $14.4 million in the second quarter of 2024. Interest expense decreased in the second quarter of 2025 primarily due to a reduced volume of brokered certificates of deposit ("CDs") and decreases in interest paid on customer CDs, brokered CDs and demand deposits. These decreases were partially offset by increases in the volume and interest paid on money market and savings accounts and an increase in the rate paid on advances during the current quarter.The net interest margin increased to 2.83% for the second quarter of 2025, from 2.76% for both the preceding quarter and the second quarter of 2024.Noninterest income decreased $1.6 million to $2.2 million for the second quarter of 2025, from $3.8 million for the preceding quarter. The first quarter of 2025 was higher due to nonrecurring income items including a $1.1 million BOLI death benefit payment received due to the passing of a former employee and a $846,000 gain on extinguishment of debt.Noninterest expense decreased $7.2 million to $12.8 million for the second quarter of 2025, compared to $20.0 million for the preceding quarter. Compensation and benefits was lower primarily due to the ERC recorded during the current quarter. Other expense for the preceding quarter included the previously disclosed $5.8 million legal reserve. Allowance for Credit Losses on Loans ("ACLL") and Credit Quality The allowance for credit losses on loans ("ACLL") decreased $2.2 million to $18.4 million at June 30, 2025, from $20.6 million at March 31, 2025. The ACLL as a percentage of total loans was 1.10% at June 30, 2025, a decrease from 1.24% at March 31, 2025, and from 1.14% one year earlier. A release of $2.6 million reserves on individually evaluated loans, partially offset by net loan charge-offs totaling $1.9 million and a small increase to the pooled loan reserve, resulted in a recapture of provision expense of $296,000 for the quarter ended June 30, 2025. Nonperforming loans totaled $20.4 million at both June 30, 2025 and March 31, 2025. Current quarter activity included an increase due to a $4.1 million commercial real estate loan transitioning into nonperforming status, large principal payments received totaling $3.6 million and charged-off balances totaling $1.3 million. ACLL to nonperforming loans decreased to 90% at June 30, 2025, from 101% at March 31, 2025, and increased from 82% at June 30, 2024. This ratio increased in the first quarter of 2025 with decreases in balances due to principal payments and charge-offs on loans with appropriate reserves. Classified loans decreased $663,000 to $30.9 million at June 30, 2025, from $31.6 million at March 31, 2025, primarily due to payments received of $3.2 million and commercial business loan net charge-offs totaling $1.5 million, partially offset by the downgrade of a $4.1 million commercial real estate loan that was adversely impacted by reduced cross-border traffic during the second quarter. Four collateral dependent loans totaling $23.8 million account for 77% of the classified loan balance at June 30, 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 the largest of these four collateral-dependent relationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 11 loans totaling $562,000 included in classified loans at June 30, 2025, and four additional loans totaling $686,000 included in the special mention risk grading category.   For the Quarter Ended ACLL ($ in thousands) June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024                      Balance at beginning of period $20,569  $20,449  $21,970  $19,343  $17,958 Charge-offs:                    Commercial real estate  (15)  (5,571)  —   —   — Construction and land  —   (374)  (411)  —   (3,978)Auto and other consumer  (273)  (243)  (364)  (492)  (832)Commercial business  (2,823)  (1,513)  (4,596)  (24)  (2,643)Total charge-offs  (3,111)  (7,701)  (5,371)  (516)  (7,453)Recoveries:                    One-to-four family  —   —   —   42   — Commercial real estate  20   6   2   —   — Construction and land  5   —   —   —   — Auto and other consumer  74   43   52   24   198 Commercial business  1,084   2   36   —   — Total recoveries  1,183   51   90   66   198 Net loan charge-offs  (1,928)  (7,650)  (5,281)  (450)  (7,255)(Recapture of) provision for credit losses  (296)  7,770   3,760   3,077   8,640 Balance at end of period $18,345  $20,569  $20,449  $21,970  $19,343                      Average total loans $1,658,723  $1,662,164  $1,708,232  $1,718,402  $1,717,830 Annualized net charge-offs to average outstanding loans  0.47%  1.87%  1.23%  0.10%  1.70% Asset Quality ($ in thousands) June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024 Nonaccrual loans:                    One-to-four family $2,274  $1,404  $1,477  $1,631  $1,750 Multi-family  —   —   —   —   708 Commercial real estate  4,095   4   5,598   5,634   14 Construction and land  13,063   15,280   19,544   19,382   19,292 Home equity  10   54   55   116   118 Auto and other consumer  410   710   700   894   746 Commercial business  514   2,903   3,141   2,719   1,003 Total nonaccrual loans  20,366   20,355   30,515   30,376   23,631 Other real estate owned  1,297   —   —   —   — Total nonperforming assets $21,663  $20,355  $30,515  $30,376  $23,631                      Nonaccrual loans as a % of total loans (1)  1.22%  1.23%  1.80%  1.75%  1.39%Nonperforming assets as a % of total assets (2)  0.99   0.94   1.37   1.35   1.07 ACLL as a % of total loans  1.10   1.24   1.21   1.27   1.14 ACLL as a % of nonaccrual loans  90.08   101.05   67.01   72.33   81.85 Total past due loans to total loans  1.17   1.36   1.98   1.92   1.45  (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 $11.9 million, or 3.8%, to $303.5 million at June 30, 2025, compared to $315.4 million three months earlier, and decreased $3.2 million compared to $306.7 million at June 30, 2024. Maturities totaling $11.8 million and regular principal payments totaling $5.7 million were partially offset by purchases totaling $5.5 million during the current quarter. Net unrealized losses were flat for the second quarter of 2025. The estimated average life of the securities portfolio was approximately 7.6 years at June 30, 2025, 6.9 years at the preceding quarter end and 7.8 years at the end of the second quarter of 2024. The effective duration of the portfolio was approximately 4.9 years at June 30, 2025, compared to 4.3 years at the preceding quarter end and 4.3 years at the end of the second quarter of 2024. Investment Securities ($ in thousands)  June 30, 2025   March 31, 2025   June 30, 2024   Three Month % Change   One Year % Change Available for Sale at Fair Value                    Municipal bonds $77,324  $78,295  $78,825   -1.2%  -1.9%U.S. government agency issued asset-backed securities (ABS agency)  12,298   12,643   13,982   -2.7   -12.0 Corporate issued asset-backed securities (ABS corporate)  13,105   15,671   16,483   -16.4   -20.5 Corporate issued debt securities (Corporate debt)  55,760   55,067   52,892   1.3   5.4 U.S. Small Business Administration securities (SBA)  7,504   8,061   9,772   -6.9   -23.2 Mortgage-backed securities:                    U.S. government agency issued mortgage-backed securities (MBS agency)  96,014   96,642   77,301   -0.6   24.2 Non-agency issued mortgage-backed securities (MBS non-agency)  41,510   49,054   57,459   -15.4   -27.8 Total securities available for sale $303,515  $315,433  $306,714   -3.8   -1.0  Net loans, excluding loans held for sale, increased $9.6 million, or 0.6%, to $1.65 billion at June 30, 2025, from $1.64 billion at March 31, 2025, and decreased $30.6 million, or 1.8%, from $1.68 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $6.0 million. New loan funding totaling $47.2 million and draws on existing loans totaling $23.9 million outpaced loan payoffs of $34.1 million, regular payments of $28.4 million and charge-offs totaling $2.4 million. Loans ($ in thousands)  June 30, 2025   March 31, 2025   June 30, 2024   Three Month % Change   One Year % Change Real Estate:                    One-to-four family $387,459  $394,428  $389,934   -1.8%  -0.6%Multi-family  329,696   338,147   350,076   -2.5   -5.8 Commercial real estate  391,362   387,312   375,511   1.0   4.2 Construction and land  72,538   64,877   107,273   11.8   -32.4 Total real estate loans  1,181,055   1,184,764   1,222,794   -0.3   -3.4 Consumer:                    Home equity  84,927   79,151   72,613   7.3   17.0 Auto and other consumer  280,877   273,878   285,623   2.6   -1.7 Total consumer loans  365,804   353,029   358,236   3.6   2.1 Commercial business  117,843   119,783   117,094   -1.6   0.6 Total loans receivable  1,664,702   1,657,576   1,698,124   0.4   -2.0 Less:                    Derivative basis adjustment  (860)  (566)  1,017   -51.9   -184.6 Allowance for credit losses on loans  18,345   20,569   19,343   -10.8   -5.2 Total loans receivable, net $1,647,217  $1,637,573  $1,677,764   0.6   -1.8  The Bank invested $9.1 million into a new bank-owned life insurance policy in the second quarter of 2025 to replace a policy surrendered in the preceding quarter. The Bank received the return of the surrendered funds early in the third quarter of 2025. Total deposits decreased $11.4 million to $1.65 billion at June 30, 2025, compared to $1.67 billion at March 31, 2025, and decreased $53.7 million compared to $1.71 billion one year prior. During the second quarter of 2025, total customer deposit balances increased $19.6 million and brokered deposit balances decreased $31.0 million. Overall, the current rate environment continues to contribute to competition for deposits leading to increased volumes and higher rates paid on money market and savings accounts during the current quarter. The deposit mix compared to June 30, 2024, also reflects a shift in volume to money market and customer CD accounts while the volume and rate paid on brokered CDs decreased. Deposits ($ in thousands)  June 30, 2025   March 31, 2025   June 30, 2024   Three Month % Change   One Year % Change Noninterest-bearing demand deposits $240,051  $247,890  $276,543   -3.2%  -13.2%Interest-bearing demand deposits  144,409   169,912   162,201   -15.0   -11.0 Money market accounts  484,787   424,469   423,047   14.2   14.6 Savings accounts  227,968   235,188   224,631   -3.1   1.5 Certificates of deposit, customer  450,494   450,663   398,161   0.0   13.1 Certificates of deposit, brokered  106,927   137,946   223,705   -22.5   -52.2 Total deposits $1,654,636  $1,666,068  $1,708,288   -0.7   -3.1  Total shareholders’ equity increased to $149.7 million at June 30, 2025, compared to $146.5 million three months earlier, due to net income of $3.7 million and an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $128,000, partially offset by dividends declared of $661,000 and a decrease in the after-tax fair market values of derivatives of $197,000. 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 June 30, 2025. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at June 30, 2025, were 12.1% and 13.1%, respectively. First Northwest continued to provide a return on capital to our shareholders through cash dividends during the second quarter of 2025. The Company paid cash dividends totaling $650,000 in the second 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 June 30, 2025. There are 846,123 shares that remain available for repurchase under the Repurchase Plan. 2025 Awards/RecognitionForbes Best-in-State Banks          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                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 17 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; legal proceedings regulatory investigations and their resolutions; 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:Geraldine Bullard, Interim Chief Executive Officer, Chief Operating Officer and EVPPhyllis Nomura, Chief Financial Officer and EVPIRGroup@ourfirstfed.com360-457-0461   FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share data) (Unaudited)     June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024 ASSETS                    Cash and due from banks $18,487  $18,911  $16,811  $17,953  $19,184 Interest-earning deposits in banks  69,376   51,412   55,637   64,769   63,995 Investment securities available for sale, at fair value (amortized cost at each period end of $336,206, $348,249, $376,265, $341,011 and $344,941)  303,515   315,433   340,344   310,860   306,714 Loans held for sale  1,557   2,940   472   378   1,086 Loans receivable (net of allowance for credit losses on loans at each period end of $18,345, $20,569, $20,449, $21,970, and $19,343)  1,647,217   1,637,573   1,675,186   1,714,416   1,677,764 Federal Home Loan Bank (FHLB) stock, at cost  14,906   13,106   14,435   14,435   13,086 Accrued interest receivable  8,305   8,319   8,159   8,939   9,466 Premises and equipment, net  8,999   9,870   10,129   10,436   10,714 Servicing rights on sold loans, at fair value  3,220   3,301   3,281   3,584   3,740 Bank-owned life insurance ("BOLI"), net  41,380   31,786   41,150   41,429   41,113 Equity and partnership investments  14,811   15,026   13,229   14,912   15,085 Goodwill and other intangible assets, net  1,081   1,082   1,082   1,083   1,084 Deferred tax asset, net  14,266   14,304   13,738   10,802   12,216 Right-of-use ("ROU") asset, net  15,772   16,687   17,001   17,315   17,627 Prepaid expenses and other assets  32,471   31,680   21,352   24,175   23,088 Total assets $2,195,363  $2,171,430  $2,232,006  $2,255,486  $2,215,962                      LIABILITIES AND SHAREHOLDERS' EQUITY                    Deposits $1,654,636  $1,666,068  $1,688,026  $1,711,641  $1,708,288 Borrowings  344,108   307,091   336,014   334,994   302,575 Accrued interest payable  1,514   2,163   3,295   2,153   3,143 Lease liability, net  16,257   17,266   17,535   17,799   18,054 Accrued expenses and other liabilities  27,790   29,767   31,770   25,625   23,717 Advances from borrowers for taxes and insurance  1,325   2,583   1,484   2,485   1,304 Total liabilities  2,045,630   2,024,938   2,078,124   2,094,697   2,057,081                      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: 9,444,963; 9,440,618; 9,353,348; 9,365,979; and 9,453,247  94   94   93   94   94 Additional paid-in capital  93,595   93,450   93,357   93,218   93,985 Retained earnings  90,506   87,506   97,198   100,660   103,322 Accumulated other comprehensive loss, net of tax  (28,198)  (28,129)  (30,172)  (26,424)  (31,597)Unearned employee stock ownership plan (ESOP) shares  (6,264)  (6,429)  (6,594)  (6,759)  (6,923)Total shareholders' equity  149,733   146,492   153,882   160,789   158,881 Total liabilities and shareholders' equity $2,195,363  $2,171,430  $2,232,006  $2,255,486  $2,215,962    FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share data) (Unaudited)     For the Quarter Ended  For the Six Months Ended   June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024  June 30, 2025  June 30, 2024 INTEREST INCOME                            Interest and fees on loans receivable $22,814  $22,231  $23,716  $23,536  $23,733  $45,045  $46,500 Interest on investment securities  3,466   3,803   3,658   3,786   3,949   7,269   7,581 Interest on deposits in banks  520   482   550   582   571   1,002   1,216 FHLB dividends  331   307   273   302   358   638   640 Total interest income  27,131   26,823   28,197   28,206   28,611   53,954   55,937 INTEREST EXPENSE                            Deposits  9,552   9,737   11,175   10,960   10,180   19,289   20,292 Borrowings  3,386   3,239   2,885   3,226   4,196   6,625   7,482 Total interest expense  12,938   12,976   14,060   14,186   14,376   25,914   27,774 Net interest income  14,193   13,847   14,137   14,020   14,235   28,040   28,163 PROVISION FOR CREDIT LOSSES                            (Recapture of) provision for credit losses on loans  (296)  7,770   3,760   3,077   8,640   7,474   9,879 (Recapture of) provision for credit losses on unfunded commitments  (64)  15   (105)  57   99   (49)  (170)(Recapture of) provision for credit losses  (360)  7,785   3,655   3,134   8,739   7,425   9,709 Net interest income after (recapture of) provision for credit losses  14,553   6,062   10,482   10,886   5,496   20,615   18,454 NONINTEREST INCOME                            Loan and deposit service fees  1,095   1,106   1,054   1,059   1,076   2,201   2,178 Sold loan servicing fees and servicing rights mark-to-market  92   195   (115)  10   74   287   293 Net gain on sale of loans  44   11   52   58   150   55   202 Net loss on sale of investment securities  —   —   —   —   (2,117)  —   (2,117)Net gain on sale of premises and equipment  —   —   —   —   7,919   —   7,919 Increase in BOLI cash surrender value  485   372   328   315   293   857   536 Income from BOLI death benefit, net  —   1,059   1,536   —   —   1,059   — Other income (loss)  454   1,034   (1,555)  337   (48)  1,488   524 Total noninterest income  2,170   3,777   1,300   1,779   7,347   5,947   9,535 NONINTEREST EXPENSE                            Compensation and benefits  4,698   7,715   7,367   8,582   8,588   12,413   16,716 Data processing  1,926   2,011   2,065   2,085   2,008   3,937   3,952 Occupancy and equipment  1,507   1,592   1,559   1,553   1,799   3,099   3,039 Supplies, postage, and telephone  346   298   296   360   317   644   610 Regulatory assessments and state taxes  501   479   460   548   457   980   970 Advertising  299   265   362   409   377   564   686 Professional fees  1,449   777   813   698   684   2,226   1,594 FDIC insurance premium  463   434   491   533   473   897   859 Other expense  1,576   6,429   820   1,080   906   8,005   1,486 Total noninterest expense  12,765   20,000   14,233   15,848   15,609   32,765   29,912 Income (loss) before provision (benefit) for income taxes  3,958   (10,161)  (2,451)  (3,183)  (2,766)  (6,203)  (1,923)Provision (benefit) for income taxes  297   (1,125)  359   (1,203)  (547)  (828)  (100)Net income (loss) $3,661  $(9,036) $(2,810) $(1,980) $(2,219) $(5,375) $(1,823)                             Basic and diluted earnings (loss) per common share $0.42  $(1.03) $(0.32) $(0.23) $(0.25) $(0.61) $(0.21)   FIRST NORTHWEST BANCORP AND SUBSIDIARYADDITIONAL INFORMATION(Dollars in thousands) (Unaudited)   Selected Loan Detail June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024 Construction and land loans breakout                    1-4 Family construction $39,040  $42,371  $39,319  $43,125  $56,514 Multifamily construction  14,728   9,223   15,407   29,109   43,341 Nonresidential construction  12,832   7,229   16,857   17,500   1,015 Land and development  5,938   6,054   6,527   5,975   6,403 Total construction and land loans $72,538  $64,877  $78,110  $95,709  $107,273                      Auto and other consumer loans breakout                    Triad Manufactured Home loans $135,537  $134,740  $128,231  $129,600  $110,510 Woodside auto loans  127,828   118,972   117,968   126,129   131,151 First Help auto loans  11,221   13,012   14,283   15,971   17,427 Other auto loans  1,016   1,313   1,647   2,064   2,690 Other consumer loans  5,275   5,841   6,747   7,434   23,845 Total auto and other consumer loans $280,877  $273,878  $268,876  $281,198  $285,623                      Commercial business loans breakout                    Northpointe Bank MPP $-  $-  $36,230  $38,155  $9,150 Secured lines of credit  41,043   39,986   35,701   37,686   28,862 Unsecured lines of credit  2,551   2,030   1,717   1,571   1,133 SBA loans  6,618   6,889   7,044   7,219   7,146 Other commercial business loans  67,631   70,878   70,801   70,696   70,803 Total commercial business loans $117,843  $119,783  $151,493  $155,327  $117,094  Loans by Collateral and Unfunded Commitments June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024                      One-to-four family construction $40,509  $38,221  $44,468  $51,607  $49,440 All other construction and land  36,129   30,947   34,290   45,166   58,346 One-to-four family first mortgage  420,847   428,081   466,046   469,053   434,840 One-to-four family junior liens  20,116   15,155   15,090   14,701   13,706 One-to-four family revolving open-end  57,502   51,832   51,481   48,459   44,803 Commercial real estate, owner occupied:                    Health care  29,091   29,386   29,129   29,407   29,678 Office  19,116   19,363   17,756   17,901   19,215 Warehouse  7,432   9,272   14,948   11,645   14,613 Other  74,364   74,915   78,170   64,535   56,292 Commercial real estate, non-owner occupied:                    Office  42,198   41,885   49,417   49,770   50,158 Retail  51,708   50,737   49,591   49,717   50,101 Hospitality  64,308   62,226   61,919   62,282   62,628 Other  93,505   93,549   81,640   82,573   84,428 Multi-family residential  330,784   339,217   333,419   354,118   350,382 Commercial business loans  73,403   75,628   77,381   86,904   79,055 Commercial agriculture and fishing loans  22,443   22,914   21,833   15,369   14,411 State and political subdivision obligations  369   369   369   404   405 Consumer automobile loans  139,992   133,209   133,789   144,036   151,121 Consumer loans secured by other assets  138,378   137,619   131,429   132,749   129,293 Consumer loans unsecured  2,508   3,051   3,658   4,411   5,209 Total loans $1,664,702  $1,657,576  $1,695,823  $1,734,807  $1,698,124                      Unfunded commitments under lines of credit or existing loans $166,589  $175,100  $163,827  $166,446  $155,005    FIRST NORTHWEST BANCORP AND SUBSIDIARYNET INTEREST MARGIN ANALYSIS(Dollars in thousands) (Unaudited)     Three Months Ended June 30,   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) $1,639,236  $22,814   5.58% $1,698,777  $23,733   5.62%Total investment securities  311,078   3,466   4.47   316,878   3,949   5.01 FHLB dividends  13,313   331   9.97   15,175   358   9.49 Interest-earning deposits in banks  46,807   520   4.46   41,450   571   5.54 Total interest-earning assets (3)  2,010,434   27,131   5.41   2,072,280   28,611   5.55 Noninterest-earning assets  154,145           147,090         Total average assets $2,164,579          $2,219,370         Interest-bearing liabilities:                        Interest-bearing demand deposits $164,475  $240   0.59  $165,212  $193   0.47 Money market accounts  444,135   2,660   2.40   405,393   2,420   2.40 Savings accounts  228,901   884   1.55   227,650   915   1.62 Certificates of deposit, customer  451,712   4,396   3.90   400,197   4,079   4.10 Certificates of deposit, brokered  124,383   1,372   4.42   209,566   2,573   4.94 Total interest-bearing deposits (4)  1,413,606   9,552   2.71   1,408,018   10,180   2.91 Advances  275,176   3,041   4.43   315,375   3,801   4.85 Subordinated debt  34,600   345   4.00   39,465   395   4.03 Total interest-bearing liabilities  1,723,382   12,938   3.01   1,762,858   14,376   3.28 Noninterest-bearing deposits (4)  243,655           251,442         Other noninterest-bearing liabilities  50,685           41,991         Total average liabilities  2,017,722           2,056,291         Average equity  146,857           163,079         Total average liabilities and equity $2,164,579          $2,219,370                                  Net interest income     $14,193          $14,235     Net interest rate spread          2.40           2.27 Net earning assets $287,052          $309,422         Net interest margin (5)          2.83           2.76 Average interest-earning assets to average interest-bearing liabilities  116.7%          117.6%         (1)The average loans receivable, net balances include nonaccrual loans.(2)Interest earned on loans receivable includes net deferred (costs) fees of ($148,000) and $34,000 for the three months ended June 30, 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 2.31% and 2.47% for the three months ended June 30, 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  For the Six Months Ended (Dollars in thousands) June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024  June 30, 2025  June 30, 2024                              Net income (loss) (GAAP) $3,661  $(9,036) $(2,810) $(1,980) $(2,219) $(5,375) $(1,823)Plus: (recapture of) provision for credit losses (GAAP)  (360)  7,785   3,655   3,134   8,739   7,425   9,709 Provision (benefit) for income taxes (GAAP)  297   (1,125)  359   (1,203)  (547)  (828)  (100)PPNR (Non-GAAP) (1)  3,598   (2,376)  1,204   (49)  5,973   1,222   7,786 Less selected nonrecurring adjustments to PPNR (Non-GAAP):                            Employee retention credit ("ERC") included in compensation and benefits  2,640   —   —   —   —   2,640   — ERC consulting expense included in professional fees  (528)  —   —   —   —   (528)  — Costs associated with early termination of Bellevue Business Center lease included in other expense  (599)  —   —   —   —   (599)  — Bank-owned life insurance ("BOLI") death benefit  —   1,059   1,536   —   —   1,059   — Gain on extinguishment of subordinated debt included in other income  —   846   —   —   —   846   — Legal reserve  —   (5,750)  —   —   —   (5,750)  — 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   —   7,919 Sale leaseback taxes and assessments included in occupancy and equipment  —   —   —   —   (359)  —   (359)Net loss on sale of investment securities  —   —   —   —   (2,117)  —   (2,117)Adjusted PPNR (Non-GAAP) (1) $2,085  $1,469  $1,430  $947  $530  $3,554  $1,692                              Average total assets (GAAP) $2,164,579  $2,174,748  $2,205,502  $2,209,333  $2,219,370  $2,169,621  $2,192,779 GAAP Ratio:                            Return on average assets (GAAP)  0.68%  -1.69%  -0.51%  -0.36%  -0.40%  -0.50%  -0.17%Non-GAAP Ratios:                            PPNR return on average assets (Non-GAAP) (1)  0.67%  -0.44%  0.22%  -0.01%  1.08%  0.11%  0.71%Adjusted PPNR return on average assets (Non-GAAP) (1)  0.39%  0.27%  0.26%  0.17%  0.10%  0.33%  0.16% (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  For the Six Months Ended (Dollars in thousands, except per share data) June 30, 2025  March 31, 2025  December 31, 2024  September 30, 2024  June 30, 2024  June 30, 2025  June 30, 2024                              Total shareholders' equity $149,733  $146,492  $153,882  $160,789  $158,881  $149,733  $158,881 Less: Goodwill and other intangible assets  1,081   1,082   1,082   1,083   1,084   1,081   1,084 Disallowed non-mortgage loan servicing rights  372   415   423   489   517   372   517 Total tangible common equity $148,280  $144,995  $152,377  $159,217  $157,280  $148,280  $157,280                              Total assets $2,195,363  $2,171,430  $2,232,006  $2,255,486  $2,215,962  $2,195,363  $2,215,962 Less: Goodwill and other intangible assets  1,081   1,082   1,082   1,083   1,084   1,081   1,084 Disallowed non-mortgage loan servicing rights  372   415   423   489   517   372   517 Total tangible assets $2,193,910  $2,169,933  $2,230,501  $2,253,914  $2,214,361  $2,193,910  $2,214,361                              Average shareholders' equity $146,857  $156,470  $161,560  $160,479  $163,079  $151,620  $162,473 Less: Average goodwill and other intangible assets  1,081   1,082   1,083   1,084   1,085   1,082   1,085 Average disallowed non-mortgage loan servicing rights  415   423   489   517   489   419   485 Total average tangible common equity $145,361  $154,965  $159,988  $158,878  $161,505  $150,119  $160,903                              Net income (loss) $3,661  $(9,036) $(2,810) $(1,980) $(2,219) $(5,375) $(1,823)Common shares outstanding  9,444,963   9,440,618   9,353,348   9,365,979   9,453,247   9,444,963   9,453,247 GAAP Ratios:                            Equity to total assets  6.82%  6.75%  6.89%  7.13%  7.17%  6.82%  7.17%Return on average equity  10.00%  -23.42%  -6.92%  -4.91%  -5.47%  -7.15%  -2.26%Book value per common share $15.85  $15.52  $16.45  $17.17  $16.81  $15.85  $16.81 Non-GAAP Ratios:                            Tangible common equity to tangible assets (1)  6.76%  6.68%  6.83%  7.06%  7.10%  6.76%  7.10%Return on average tangible common equity (1)  10.10%  -23.65%  -6.99%  -4.96%  -5.53%  -7.22%  -2.28%Tangible book value per common share (1) $15.70  $15.36  $16.29  $17.00  $16.64  $15.70  $16.64  (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/c85e4dc5-66aa-4a20-9353-c1b9da5ac869 https://www.globenewswire.com/NewsRoom/AttachmentNg/e8d326aa-0fde-4c3c-954f-bb809e7c276c https://www.globenewswire.com/NewsRoom/AttachmentNg/f24035e8-5a6e-4f39-a0db-93ca11dc39d5 https://www.globenewswire.com/NewsRoom/AttachmentNg/c29167d1-36df-44c1-9e51-889b5be4fb96 https://www.globenewswire.com/NewsRoom/AttachmentNg/ae6ceb7f-9f7a-4a77-b835-146a0638be30 https://www.globenewswire.com/NewsRoom/AttachmentNg/5ba4f507-769e-4e54-acdb-4aed9253c967 https://www.globenewswire.com/NewsRoom/AttachmentNg/66e51144-1d2d-4c3f-ae91-2192cc90a887

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