FNWB First Northwest Bancorp

Washington		001-36741		46-1259100
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

105 West 8th Street, Port Angeles, Washington	98362
(Address of principal executive offices)	(Zip Code)

Title of each class:		Trading Symbol(s):		Name of each exchange on which registered:
Common Stock, par value $0.01 per share		FNWB		The Nasdaq Stock Market LLC

Item 2.02

Results of Operations and Financial Condition

Item 7.01

Regulation FD Disclosure

Item 8.01

Other Events

Item 9.01 Financial Statements and Exhibits
(d) Exhibit.	The following exhibit is furnished with this Form 8-K.
Exhibit No.	Description
99.1	Press Release dated January 29, 2025
99.2	Slide Presentation
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

			FIRST NORTHWEST BANCORP
Date:	January 29, 2025		/s/Matthew P. Deines
			Matthew P. Deines
			President and Chief Executive Officer

Exhibit 99.1

 

PORT ANGELES, Wash., January 29, 2025 (GLOBE NEWSWIRE)

 

First Northwest Bancorp Reports Fourth Quarter 2024 Financial Results

 

First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company") today reported a net loss of $2.8 million for the fourth quarter of 2024, compared to a net loss of $2.0 million for the third quarter of 2024 and a net loss of $5.5 million for the fourth quarter of 2023. Basic and diluted loss per share were $0.32 for the fourth quarter of 2024, compared to basic and diluted loss per share of $0.23 for the third quarter of 2024 and basic and diluted loss per share of $0.62 for the fourth quarter of 2023.

 

In the fourth quarter of 2024, the Company recorded adjusted pre-tax, pre-provision net revenue ("PPNR")⁽¹⁾ of $1.2 million, compared to a $49,000 adjusted PPNR loss for the preceding quarter and adjusted PPNR of $327,000 for the fourth quarter of 2023.

 

The Board of Directors of First Northwest declared a quarterly cash dividend of $0.07 per common share, payable on February 28, 2025, to shareholders of record as of the close of business on February 14, 2025.

 

Quote from First Northwest President and CEO, Matthew P. Deines:

"Although financial results in 2024 were adversely impacted by elevated credit costs, we are optimistic for continued improvement in asset quality in early 2025. During the fourth quarter, our pre-provision net revenue ⁽¹⁾ grew to $1.2 million with modest margin improvement as we successfully reduced FHLB borrowings. As we look ahead to 2025, we are laser focused on growing core commercial and retail customer relationships while resolving problem assets, improving profitability and maintaining our strong capital position. Highlights for 2024 include the termination of our compliance Consent Order with the FDIC, reduction of core operating expenses and improvement in our liquidity position with the loan to deposit ratio below 100% at year-end. I’d like to thank all our employees for their efforts and contributions in 2024, and for making a positive impact in the communities we serve."

 

Key Points for Fourth Quarter and Going Forward

 

Provision for credit losses:

•		The Company recorded a $3.8 million provision for credit losses on loans in the fourth quarter of 2024, primarily due to charge-offs of six commercial business loans. This compares to loan credit loss provisions of $3.1 million for the preceding quarter and $1.2 million for the fourth quarter of 2023.
•		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. The provision for credit losses on loans had a significant negative impact on net income for the fourth quarter of 2024.

 

First Fed Bank's ("First Fed" or the "Bank") balance sheet restructure continues to have a positive impact:

•		The fair value hedge on loans, tied to the compounded overnight index swap using the secured overnight financing rate index, which was established in the first quarter of 2024, added $1.1 million to interest income for the year. The hedge successfully reduced the Bank's liability sensitivity, and lowered the overall interest rate risk profile. The hedge also enhanced earnings due to a favorable contract position during the 2024 interest rate environment. The Bank expects to maintain a positive carry on its derivative for up to an additional 25-basis points of rate cuts.
•		During 2024, bank-owned life insurance policies ("BOLI") were reinvested into higher yielding products. In the fourth quarter of 2024, a $8.5 million policy was surrendered and reinvested into a policy earning 6.01% and a $922,000 policy earning 1.64% was exchanged and reinvested into a policy earning 3.99%. Total policy conversions during 2024 increased the annual pre-tax net yield earned on the total BOLI portfolio by 74-basis points. The remaining surrender transaction is expected to be completed during the first quarter of 2025.
•		Investment security purchases during the fourth quarter of 2024 totaled $47.1 million, carrying a weighted-average yield of 6.7% at purchase and a weighted-average life of 3.1 years. The annualized interest income on these securities is anticipated to provide $2.6 million in revenue for 2025.

 

(1)  See reconciliation of Non-GAAP Financial Measures later in this release.

 

Selected Quarterly Financial Ratios:

		As of or For the Quarter Ended
		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Performance ratios: (1)
Return on average assets			-0.51	%			-0.36	%			-0.40	%			0.07	%			-1.03	%
Adjusted PPNR return on average assets (2)			0.22				-0.01				0.10				0.34				-0.06
Return on average equity			-6.92				-4.91				-5.47				0.98				-14.05
Net interest margin (3)			2.73				2.70				2.76				2.76				2.84
Efficiency ratio (4)			92.2				100.3				72.3				88.8				150.8
Equity to total assets			6.89				7.13				7.17				7.17				7.42
Book value per common share		$	16.45			$	17.17			$	16.81			$	17.00			$	16.99
Tangible performance ratios: (1)
Tangible common equity to tangible assets (2)			6.83	%			7.06	%			7.10	%			7.10	%			7.35	%
Return on average tangible common equity (2)			-6.99				-4.96				-5.53				0.99				-14.20
Tangible book value per common share (2)		$	16.29			$	17.00			$	16.64			$	16.83			$	16.83
Capital ratios (First Fed): (5)
Tier 1 leverage			9.4	%			9.4	%			9.4	%			9.7	%			9.9	%
Common equity Tier 1 capital			12.4				12.2				12.4				12.6				13.1
Total risk-based			13.6				13.4				13.5				13.6				14.1

 

(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⁾

 

		For the Quarter Ended																				For the Year Ended
(Dollars in thousands)		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Net interest income		$	14,137			$	14,020			$	14,235			$	13,928			$	14,195			$	56,320			$	61,432
Total noninterest income			1,300				1,779				7,347				2,188				(2,929	)			12,614				4,020
Total revenue			15,437				15,799				21,582				16,116				11,266				68,934				65,452
Total noninterest expense			14,233				15,848				15,609				14,303				16,990				59,993				61,454
PPNR (1)			1,204				(49	)			5,973				1,813				(5,724	)			8,941				3,998
Selected nonrecurring adjustments to PPNR
Less: 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	)			—				(5,397	)			(2,117	)			(5,397	)
Adjusted PPNR (1)		$	1,204			$	(49	)		$	530			$	1,813			$	(327	)		$	3,498			$	9,395

(1)  See reconciliation of Non-GAAP Financial Measures later in this release.

 

•

Total interest income was relatively unchanged at $28.2 million for the fourth quarter of 2024, compared to the previous quarter, and increased $1.9 million compared to $26.3 million in the fourth quarter of 2023. Interest income decreased in the fourth quarter of 2024 primarily due to a decrease in the income earned on the securities derivative combined with lower FHLB dividends and reduced interest income received on Company deposit accounts. Higher yields on performing loans during the fourth quarter of 2024 were partially offset by nonaccrual interest adjustments totaling $46,000. Interest and fees on loans increased year-over-year as the loan portfolio grew. Loan yields increased over the prior year due to higher rates on new originations as well as the repricing of variable and adjustable-rate loans.

 

 

•		The net interest margin increased to 2.73% for the fourth quarter of 2024, from 2.70% for the prior quarter, and decreased 11-basis points from 2.84% for the fourth quarter of 2023. The Company reported reduced rates and declining volume of borrowings during the quarter which lowered costs; however, these savings were partially offset by an increase in cost due to a higher volume of customer deposits. The decrease in net interest margin from the same quarter one year ago is due to higher funding costs for deposits and borrowed funds.
•		Noninterest income included a $1.8 million write down on an equity investment in an organization that is involved in a lawsuit, partially offset by a $1.5 million BOLI death benefit payment received due to the passing of an employee.
•		Noninterest expense for the fourth quarter of 2024 decreased mainly due to a $1.2 million reduction in compensation related to nonrecurring payouts in the previous quarter combined with a reduced incentive accrual and lower headcount in the fourth quarter of 2024. FDIC assessment, state taxes, advertising and other discretionary spending also decreased from the previous quarter.

 

Allowance for Credit Losses on Loans ("ACLL") and Credit Quality

 

The allowance for credit losses on loans ("ACLL") decreased $1.5 million to $20.5 million at December 31, 2024, from $22.0 million at September 30, 2024. The ACLL as a percentage of total loans was 1.21% at December 31, 2024, a decrease from 1.27% at September 30, 2024, and an increase from 1.05% one year earlier. The pooled loan reserve decreased $1.5 million during the fourth quarter of 2024, primarily due to the decreases in multi-family, construction, and consumer loan balances combined with decreases resulting from lower loss factors applied to commercial business and commercial real estate loans, partially offset by higher loss factors applied to one-to-four family and other consumer loans.

 

Nonperforming loans totaled $30.5 million at December 31, 2024, an increase of $139,000 from September 30, 2024. ACLL to nonperforming loans decreased to 67% at December 31, 2024, from 72% at September 30, 2024, and 94% at December 31, 2023. This ratio continued to decline as higher balances of real estate loans are included in nonperforming assets with no significant corresponding increase to the ACLL as these collateral dependent loans were considered adequately reserved for based on information available at each period end.

 

Classified loans decreased $4.4 million to $42.5 million at December 31, 2024, from $46.9 million at September 30, 2024, primarily due to charge-offs totaling $3.9 million on six commercial business loans during the fourth quarter. An $11.4 million construction loan relationship, which became a classified loan in the fourth quarter of 2022; an $8.1 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 61% of the classified loan balance at December 31, 2024. 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 15 loans totaling $2.2 million included in classified loans at December 31, 2024, and an additional eight loans totaling $2.8 million included in the special mention risk grading category.

 

 

 

		For the Quarter Ended
ACLL ($ in thousands)		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Balance at beginning of period		$	21,970			$	19,343			$	17,958			$	17,510			$	16,945
Charge-offs:
Construction and land			(411	)			—				(3,978	)			—				—
Home equity			—				—				—				—				1
Auto and other consumer			(364	)			(492	)			(832	)			(806	)			(655	)
Commercial business			(4,596	)			(24	)			(2,643	)			(33	)			—
Total charge-offs			(5,371	)			(516	)			(7,453	)			(839	)			(654	)
Recoveries:
One-to-four family			—				42				—				2				5
Commercial real estate			2				—				—				—				—
Home equity			—				—				—				—				10
Auto and other consumer			52				24				198				46				42
Commercial business			36				—				—				—				—
Total recoveries			90				66				198				48				57
Net loan charge-offs			(5,281	)			(450	)			(7,255	)			(791	)			(597	)
Provision for credit losses			3,760				3,077				8,640				1,239				1,162
Balance at end of period		$	20,449			$	21,970			$	19,343			$	17,958			$	17,510
Average total loans			1,708,232				1,718,402				1,717,830				1,678,656				1,645,418
Annualized net charge-offs to average outstanding loans			1.23	%			0.10	%			1.70	%			0.19	%			0.14	%

 

Asset Quality ($ in thousands)		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Nonaccrual loans:
One-to-four family		$	1,477			$	1,631			$	1,750			$	1,237			$	1,844
Multi-family			—				—				708				708				—
Commercial real estate			5,598				5,634				14				22				28
Construction and land			19,544				19,382				19,292				14,440				14,986
Home equity			55				116				118				121				123
Auto and other consumer			700				894				746				1,012				786
Commercial business			3,141				2,719				1,003				1,941				877
Total nonaccrual loans			30,515				30,376				23,631				19,481				18,644
Other real estate owned			—				—				—				—				—
Total nonperforming assets		$	30,515			$	30,376			$	23,631			$	19,481			$	18,644
Nonaccrual loans as a % of total loans (1)			1.80	%			1.75	%			1.39	%			1.14	%			1.12	%
Nonperforming assets as a % of total assets (2)			1.37				1.35				1.07				0.87				0.85
ACLL as a % of total loans			1.21				1.27				1.14				1.05				1.05
ACLL as a % of nonaccrual loans			67.01				72.33				81.85				92.18				93.92
Total past due loans to total loans			1.98				1.92				1.45				1.91				0.94

 

(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 increased $29.5 million, or 9.5%, to $340.3 million at December 31, 2024, compared to $310.9 million three months earlier, and increased $44.7 million compared to $295.6 million at December 31, 2023. The market value of the portfolio decreased $5.8 million during the fourth quarter of 2024. The estimated average life of the securities portfolio was approximately 6.9 years at December 31, 2024, 7.4 years at the prior quarter end and 7.7 years at the end of the fourth quarter of 2023. The effective duration of the portfolio was approximately 3.9 years at December 31, 2024, compared to 3.9 years at the prior quarter end and 4.8 years at the end of the fourth quarter of 2023. Investment purchases at the beginning of 2024 were primarily floating rate securities to take advantage of higher short-term rates above those offered on cash at that time and to reduce our liability sensitivity. Purchases in the fourth quarter were primarily fixed to rebalance our securities portfolio position for 2025.
 

Investment Securities ($ in thousands)			December 31, 2024				September 30, 2024				December 31, 2023				Three Month % Change				One Year % Change
Available for Sale at Fair Value
Municipal bonds		$	77,876			$	81,363			$	87,761				-4.3	%			-11.3	%
U.S. government agency issued asset-backed securities (ABS agency)			12,876				13,296				11,782				-3.2				9.3
Corporate issued asset-backed securities (ABS corporate)			16,122				16,391				5,286				-1.6				205.0
Corporate issued debt securities (Corporate debt)			54,491				54,058				51,454				0.8				5.9
U.S. Small Business Administration securities (SBA)			8,666				9,317				—				-7.0				100.0
Mortgage-backed securities:
U.S. government agency issued mortgage-backed securities (MBS agency)			98,697				78,549				63,247				25.7				56.1
Non-agency issued mortgage-backed securities (MBS non-agency)			71,616				57,886				76,093				23.7				-5.9
Total securities available for sale		$	340,344			$	310,860			$	295,623				9.5				15.1

 

Net loans, excluding loans held for sale, decreased $39.2 million, or 2.3%, to $1.68 billion at December 31, 2024, from $1.71 billion at September 30, 2024, and increased $32.7 million, or 2.0%, from $1.64 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $18.3 million. Loan payoffs of $73.9 million, regular payments of $35.3 million and charge-offs totaling $5.3 million outpaced new loan funding totaling $55.6 million and draws on existing loans totaling $19.7 million.

 

Loans ($ in thousands)			December 31, 2024				September 30, 2024				December 31, 2023				Three Month % Change				One Year % Change
Real Estate:
One-to-four family		$	395,315			$	395,792			$	378,432				-0.1	%			4.5	%
Multi-family			332,596				353,813				333,094				-6.0				-0.1
Commercial real estate			390,379				376,008				387,983				3.8				0.6
Construction and land			78,110				95,709				129,691				-18.4				-39.8
Total real estate loans			1,196,400				1,221,322				1,229,200				-2.0				-2.7
Consumer:
Home equity			79,054				76,960				69,403				2.7				13.9
Auto and other consumer			268,876				281,198				249,130				-4.4				7.9
Total consumer loans			347,930				358,158				318,533				-2.9				9.2
Commercial business			151,493				155,327				112,295				-2.5				34.9
Total loans receivable			1,695,823				1,734,807				1,660,028				-2.2				2.2
Less:
Derivative basis adjustment			188				(1,579	)			—				111.9				100.0
Allowance for credit losses on loans			20,449				21,970				17,510				-6.9				16.8
Total loans receivable, net		$	1,675,186			$	1,714,416			$	1,642,518				-2.3				2.0

 

Deposits ($ in thousands)			December 31, 2024				September 30, 2024				December 31, 2023				Three Month % Change				One Year % Change
Noninterest-bearing demand deposits		$	256,416			$	252,999			$	252,083				1.4	%			1.7	%
Interest-bearing demand deposits			164,891				167,202				169,418				-1.4				-2.7
Money market accounts			413,822				433,307				362,205				-4.5				14.3
Savings accounts			205,055				212,763				242,148				-3.6				-15.3
Certificates of deposit, customer			464,928				441,665				443,412				5.3				4.9
Certificates of deposit, brokered			182,914				203,705				207,626				-10.2				-11.9
Total deposits		$	1,688,026			$	1,711,641			$	1,676,892				-1.4				0.7

 

Total shareholders’ equity decreased to $153.9 million at December 31, 2024, compared to $160.8 million three months earlier, due to a decrease in the after-tax fair market values of the available-for-sale investment securities portfolio of $4.5 million, a net loss of $2.8 million and dividends declared of $656,000, partially offset by an increase in the after-tax fair market values of derivatives of $952,000.

 

Capital levels for both the Company and its operating bank, First Fed, remain in excess of applicable regulatory requirements and the Bank was categorized as "well-capitalized" at December 31, 2024. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at December 31, 2024, were 12.4% and 13.6%, respectively.

 

First Northwest continued to return capital to our shareholders through cash dividends during the fourth quarter of 2024. The Company paid cash dividends totaling $656,000 in the fourth quarter of 2024. No shares of common stock were repurchased under the Company's April 2024 Stock Repurchase Plan ("Repurchase Plan") during the quarter ended December 31, 2024. There are 846,123 shares that remain available for repurchase under the Repurchase Plan.

 

Awards/Recognition

The Company received several accolades as a leader in the community in the last year.

 

	In September 2024, the First Fed team was recognized in the 2024 Best of Olympic Peninsula surveys, winning Best Bank and Best Lender in Clallam County; Best Bank and Best Financial Advisor in the West End; and Best Lender in Jefferson County. First Fed was also a finalist for Best Bank, Best Customer Service, Best Employer and Best Financial Advisor in Jefferson County; Best Customer Service, Best Employer and Best Financial Advisor in Clallam County; and Best Customer Service and Best Employer in the West End.
	In May 2024, First Fed, along with the First Fed Community Foundation, were honored to be ranked second on the Puget Sound Business Journal Midsize Corporate Philanthropists list.
	In October 2023, the First Fed team was honored to bring home the Gold for Best Bank in the Best of the Northwest survey hosted by Bellingham Alive for the second year in a row.
	In September 2023, the First Fed team was recognized in the 2023 Best of Olympic Peninsula surveys as a finalist for Best Employer in Kitsap County and Best Bank and Best Financial Institution in Bainbridge.

 

We recommend reading this earnings release in conjunction with the Fourth Quarter 2024 Investor Presentation, located at http://investor.ourfirstfed.com/quarterly-reports and included as an exhibit to our January 29, 2025, Current Report on Form 8-K.

 

About the Company

First 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 16 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 Statements

Certain 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, 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; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q 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 2024 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 Officer

Geri Bullard, EVP, Chief Financial Officer and Chief Operating Officer

IRGroup@ourfirstfed.com

360-457-0461

 

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data) (Unaudited)

 

		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
ASSETS
Cash and due from banks		$	16,811			$	17,953			$	19,184			$	15,562			$	19,845
Interest-earning deposits in banks			55,637				64,769				63,995				61,784				103,324
Investment securities available for sale, at fair value			340,344				310,860				306,714				325,955				295,623
Loans held for sale			472				378				1,086				988				753
Loans receivable (net of allowance for credit losses on loans $20,449, $21,970, $19,343, $17,958, and $17,510)			1,675,186				1,714,416				1,677,764				1,692,774				1,642,518
Federal Home Loan Bank (FHLB) stock, at cost			14,435				14,435				13,086				15,876				13,664
Accrued interest receivable			8,159				8,939				9,466				8,909				7,894
Premises held for sale, net			—				—				—				6,751				18,049
Premises and equipment, net			10,129				10,436				10,714				11,028				—
Servicing rights on sold loans, at fair value			3,281				3,584				3,740				3,820				3,793
Bank-owned life insurance, net			41,150				41,429				41,113				34,681				40,578
Equity and partnership investments			13,229				14,912				15,085				15,121				14,794
Goodwill and other intangible assets, net			1,082				1,083				1,084				1,085				1,086
Deferred tax asset, net			13,738				10,802				12,216				12,704				13,001
Right-of-use ("ROU") asset, net			17,001				17,315				17,627				5,841				6,047
Prepaid expenses and other assets			21,352				24,175				23,088				27,141				20,828
Total assets		$	2,232,006			$	2,255,486			$	2,215,962			$	2,240,020			$	2,201,797
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits		$	1,688,026			$	1,711,641			$	1,708,288			$	1,666,624			$	1,676,892
Borrowings			336,014				334,994				302,575				371,455				320,936
Accrued interest payable			3,295				2,153				3,143				2,830				3,396
Lease liability, net			17,535				17,799				18,054				6,227				6,428
Accrued expenses and other liabilities			31,770				25,625				23,717				29,980				29,545
Advances from borrowers for taxes and insurance			1,484				2,485				1,304				2,398				1,260
Total liabilities			2,078,124				2,094,697				2,057,081				2,079,514				2,038,457
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: 9,353,348; 9,365,979; 9,453,247; 9,442,796; and 9,611,876			93				94				94				94				96
Additional paid-in capital			93,357				93,218				93,985				93,763				95,784
Retained earnings			97,198				100,660				103,322				106,202				107,349
Accumulated other comprehensive loss, net of tax			(30,172	)			(26,424	)			(31,597	)			(32,465	)			(32,636	)
Unearned employee stock ownership plan (ESOP) shares			(6,594	)			(6,759	)			(6,923	)			(7,088	)			(7,253	)
Total shareholders' equity			153,882				160,789				158,881				160,506				163,340
Total liabilities and shareholders' equity		$	2,232,006			$	2,255,486			$	2,215,962			$	2,240,020			$	2,201,797

 

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data) (Unaudited)

 

		For the Quarter Ended																				For the Year Ended
		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
INTEREST INCOME
Interest and fees on loans receivable		$	23,716			$	23,536			$	23,733			$	22,767			$	22,083			$	93,752			$	84,614
Interest on investment securities			3,658				3,786				3,949				3,632				3,393				15,025				13,279
Interest on deposits in banks			550				582				571				645				581				2,348				2,126
FHLB dividends			273				302				358				282				252				1,215				880
Total interest income			28,197				28,206				28,611				27,326				26,309				112,340				100,899
INTEREST EXPENSE
Deposits			11,175				10,960				10,180				10,112				8,758				42,427				27,019
Borrowings			2,885				3,226				4,196				3,286				3,356				13,593				12,448
Total interest expense			14,060				14,186				14,376				13,398				12,114				56,020				39,467
Net interest income			14,137				14,020				14,235				13,928				14,195				56,320				61,432
PROVISION FOR CREDIT LOSSES
Provision for credit losses on loans			3,760				3,077				8,640				1,239				1,162				16,716				2,357
(Recapture of) provision for credit losses on unfunded commitments			(105	)			57				99				(269	)			(10	)			(218	)			(1,034	)
Provision for credit losses			3,655				3,134				8,739				970				1,152				16,498				1,323
Net interest income after provision for credit losses			10,482				10,886				5,496				12,958				13,043				39,822				60,109
NONINTEREST INCOME
Loan and deposit service fees			1,054				1,059				1,076				1,102				1,068				4,291				4,341
Sold loan servicing fees and servicing rights mark-to-market			(115	)			10				74				219				276				188				676
Net gain on sale of loans			52				58				150				52				33				312				438
Net loss on sale of investment securities			—				—				(2,117	)			—				(5,397	)			(2,117	)			(5,397	)
Net gain on sale of premises and equipment			—				—				7,919				—				—				7,919				—
Increase in cash surrender value of bank-owned life insurance			328				315				293				243				260				1,179				928
Income from death benefit on bank-owned life insurance, net			1,536				—				—				—				—				1,536				—
Other (loss) income			(1,555	)			337				(48	)			572				831				(694	)			3,034
Total noninterest income			1,300				1,779				7,347				2,188				(2,929	)			12,614				4,020
NONINTEREST EXPENSE
Compensation and benefits			7,367				8,582				8,588				8,128				7,397				32,665				31,209
Data processing			2,065				2,085				2,008				1,944				2,107				8,102				8,170
Occupancy and equipment			1,559				1,553				1,799				1,240				1,262				6,151				4,858
Supplies, postage, and telephone			296				360				317				293				351				1,266				1,433
Regulatory assessments and state taxes			460				548				457				513				376				1,978				1,635
Advertising			362				409				377				309				235				1,457				2,706
Professional fees			813				698				684				910				1,119				3,105				3,738
FDIC insurance premium			491				533				473				386				418				1,883				1,357
Other expense			820				1,080				906				580				3,725				3,386				6,348
Total noninterest expense			14,233				15,848				15,609				14,303				16,990				59,993				61,454
Loss before provision (benefit) for income taxes			(2,451	)			(3,183	)			(2,766	)			843				(6,876	)			(7,557	)			2,675
Provision (benefit) for income taxes			359				(1,203	)			(547	)			447				(1,354	)			(944	)			549
Net (loss) income		$	(2,810	)		$	(1,980	)		$	(2,219	)		$	396			$	(5,522	)		$	(6,613	)		$	2,286
Basic and diluted (loss) earnings per common share		$	(0.32	)		$	(0.23	)		$	(0.25	)		$	0.04			$	(0.62	)		$	(0.75	)		$	0.26

 

FIRST NORTHWEST BANCORP AND SUBSIDIARY

ADDITIONAL INFORMATION

(Dollars in thousands) (Unaudited)

 

Selected Loan Detail		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023
Construction and land loans breakout
1-4 Family construction		$	39,319			$	43,125			$	56,514			$	69,075			$	68,029
Multifamily construction			15,407				29,109				43,341				45,776				50,431
Nonresidential construction			16,857				17,500				1,015				3,374				3,756
Land and development			6,527				5,975				6,403				7,122				7,475
Total construction and land loans		$	78,110			$	95,709			$	107,273			$	125,347			$	129,691
Auto and other consumer loans breakout
Triad Manufactured Home loans		$	128,231			$	129,600			$	110,510			$	105,525			$	105,057
Woodside auto loans			117,968				126,129				131,151				128,072				124,401
First Help auto loans			14,283				15,971				17,427				8,326				4,516
Other auto loans			1,647				2,064				2,690				3,313				4,158
Other consumer loans			6,747				7,434				23,845				23,598				10,998
Total auto and other consumer loans		$	268,876			$	281,198			$	285,623			$	268,834			$	249,130
Commercial business loans breakout
Northpointe Bank MPP		$	36,230			$	38,155			$	9,150			$	15,047			$	9,502
Secured lines of credit			35,701				37,686				28,862				41,014				35,815
Unsecured lines of credit			1,717				1,571				1,133				1,001				456
SBA loans			7,044				7,219				7,146				8,944				9,115
Other commercial business loans			70,801				70,696				70,803				70,291				57,407
Total commercial business loans		$	151,493			$	155,327			$	117,094			$	136,297			$	112,295

 

FIRST NORTHWEST BANCORP AND SUBSIDIARY

ADDITIONAL INFORMATION

(Dollars in thousands) (Unaudited)

 

Non-GAAP Financial Measures

This 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 Year Ended
(Dollars in thousands)		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Net (loss) income		$	(2,810	)		$	(1,980	)		$	(2,219	)		$	396			$	(5,522	)		$	(6,613	)		$	2,286
Plus: provision for credit losses			3,655				3,134				8,739				970				1,152				16,498				1,323
Provision (benefit) for income taxes			359				(1,203	)			(547	)			447				(1,354	)			(944	)			549
PPNR (1)			1,204				(49	)			5,973				1,813				(5,724	)			8,941				4,158
Selected nonrecurring adjustments to PPNR
Less: 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	)			—				(5,397	)			(2,117	)			(5,397	)
Adjusted PPNR (1)		$	1,204			$	(49	)		$	530			$	1,813			$	(327	)		$	3,498			$	9,555
Average total assets		$	2,205,502			$	2,209,333			$	2,219,370			$	2,166,187			$	2,127,655			$	2,200,138			$	2,109,200
Return on average assets (GAAP)			-0.51	%			-0.36	%			-0.40	%			0.07	%			-1.03	%			-0.30	%			0.11	%
Adjusted PPNR return on average assets (Non-GAAP) (1)			0.22	%			-0.01	%			0.10	%			0.34	%			-0.06	%			0.16	%			0.45	%

 

(1)  We believe these non-GAAP metrics are useful to evaluate the relative strength of the Company's performance.

 

 

FIRST NORTHWEST BANCORP AND SUBSIDIARY

ADDITIONAL INFORMATION

(Dollars in thousands) (Unaudited)

 

Calculations Based on Tangible Common Equity:

 

		For the Quarter Ended																				For the Year Ended
		December 31, 2024				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
		(Dollars in thousands, except per share data)
Total shareholders' equity		$	153,882			$	160,789			$	158,881			$	160,506			$	163,340			$	153,882			$	163,340
Less: Goodwill and other intangible assets			1,082				1,083				1,084				1,085				1,086				1,082				1,086
Disallowed non-mortgage loan servicing rights			423				489				517				489				481				423				481
Total tangible common equity		$	152,377			$	159,217			$	157,280			$	158,932			$	161,773			$	152,377			$	161,773
Total assets		$	2,232,006			$	2,255,486			$	2,215,962			$	2,240,020			$	2,201,797			$	2,232,006			$	2,201,797
Less: Goodwill and other intangible assets			1,082				1,083				1,084				1,085				1,086				1,082				1,086
Disallowed non-mortgage loan servicing rights			423				489				517				489				481				423				481
Total tangible assets		$	2,230,501			$	2,253,914			$	2,214,361			$	2,238,446			$	2,200,230			$	2,230,501			$	2,200,230
Average shareholders' equity		$	161,560			$	160,479			$	163,079			$	161,867			$	155,971			$	161,742			$	159,413
Less: Average goodwill and other intangible assets			1,083				1,084				1,085				1,085				1,086				1,084				1,087
Average disallowed non-mortgage loan servicing rights			489				517				489				481				608				494				670
Total average tangible common equity		$	159,988			$	158,878			$	161,505			$	160,301			$	154,277			$	160,164			$	157,656
Net (loss) income		$	(2,810	)		$	(1,980	)		$	(2,219	)		$	396			$	(5,522	)		$	(6,613	)		$	2,286
Common shares outstanding			9,353,348				9,365,979				9,453,247				9,442,796				9,611,876				9,353,348				9,611,876
GAAP Ratios:
Equity to total assets			6.89	%			7.13	%			7.17	%			7.17	%			7.42	%			6.89	%			7.42	%
Return on average equity			-6.92	%			-4.91	%			-5.47	%			0.98	%			-14.05	%			-4.09	%			1.43	%
Book value per common share		$	16.45			$	17.17			$	16.81			$	17.00			$	16.99			$	16.45			$	16.99
Non-GAAP Ratios:
Tangible common equity to tangible assets (1)			6.83	%			7.06	%			7.10	%			7.10	%			7.35	%			6.83	%			7.35	%
Return on average tangible common equity (1)			-6.99	%			-4.96	%			-5.53	%			0.99	%			-14.20	%			-4.13	%			1.45	%
Tangible book value per common share (1)		$	16.29			$	17.00			$	16.64			$	16.83			$	16.83			$	16.29			$	16.83

(1)

We believe these non-GAAP metrics provide an important measure with which to analyze and evaluate financial condition and capital strength. In addition, we believe that 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.

 

 Exhibit 99.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

v3.24.4

Document And Entity Information	Jan. 29, 2025
Document Information [Line Items]
Entity, Registrant Name	FIRST NORTHWEST BANCORP
Document, Type	8-K
Document, Period End Date	Jan. 29, 2025
Entity, Incorporation, State or Country Code	WA
Entity, File Number	001-36741
Entity, Tax Identification Number	46-1259100
Entity, Address, Address Line One	105 West 8th Street
Entity, Address, City or Town	Port Angeles
Entity, Address, State or Province	WA
Entity, Address, Postal Zip Code	98362
City Area Code	360
Local Phone Number	457-0461
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	FNWB
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0001556727

---