First Northwest Bancorp Reports First Quarter 2025 Improved Profitability

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First Northwest Bancorp (FNWB) reported improved financial results for Q1 2025, with net income of $1.5 million, compared to a net loss of $2.8 million in Q4 2024 and net income of $396,000 in Q1 2024. The company's earnings per share reached $0.17, up from -$0.32 in Q4 2024.

Key highlights include a $45.0 million decrease in brokered deposits while core customer deposits grew by $23.0 million. The company maintained a loan-to-deposit ratio of 99.9% and reduced borrowings by $28.9 million. Total cost of funds decreased to 2.67% from 2.80% in Q4 2024.

The company recorded a $1.6 million provision for credit losses due to $1.4 million in charge-offs. Notable gains included a $1.1 million BOLI death benefit, $846,000 from debt extinguishment, and $315,000 from loan conversion to equity investment. The Board declared a quarterly cash dividend of $0.07 per share, payable May 23, 2025.

Positive

Net income improved to $1.5 million from a $2.8 million loss in previous quarter
Core customer deposits grew by $23.0 million
Total cost of funds decreased to 2.67% from 2.80%
Nonperforming loans decreased 14% from previous quarter
Multiple gains recorded: $1.1M BOLI benefit, $846K debt extinguishment, $315K loan conversion

Negative

$1.4 million in loan charge-offs
$1.6 million provision for credit losses required
Net interest income decreased to $13.8 million from $14.1 million in previous quarter
Total interest income declined by $1.4 million to $26.8 million

News Market Reaction 1 Alert

+5.00% News Effect

On the day this news was published, FNWB gained 5.00%, reflecting a notable positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

04/24/2025 - 07:00 AM

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 Awards
Bellingham 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 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 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 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 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 Officer
Phyllis Nomura, EVP and Chief Financial Officer
IRGroup@ourfirstfed.com
360-457-0461

FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED 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 SUBSIDIARY CONSOLIDATED 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 SUBSIDIARY ADDITIONAL 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 SUBSIDIARY NET 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 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
(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 SUBSIDIARY ADDITIONAL 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

)

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

FAQ

What is First Northwest Bancorp's (FNWB) net income for Q1 2025?

FNWB reported net income of $1.5 million for Q1 2025, compared to a net loss of $2.8 million in Q4 2024.

How much is FNWB's quarterly dividend payment for Q1 2025?

FNWB declared a quarterly cash dividend of $0.07 per common share, payable on May 23, 2025.

What was FNWB's provision for credit losses in Q1 2025?

FNWB recorded a $1.6 million provision for credit losses, primarily due to $1.4 million in charge-offs related to commercial and consumer loans.

How did FNWB's deposit mix change in Q1 2025?

FNWB reduced brokered deposits by $45.0 million while growing core customer deposits by $23.0 million.

What was FNWB's earnings per share for Q1 2025?

FNWB reported basic and diluted earnings per share of $0.17 for Q1 2025.

First Northwest Bancorp Reports First Quarter 2025 Improved Profitability