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First Northwest Bancorp ReportsFourth Quarter2024 Financial Results

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First Northwest Bancorp (FNWB) reported a net loss of $2.8 million for Q4 2024, compared to a net loss of $2.0 million in Q3 2024 and $5.5 million in Q4 2023. The loss per share was $0.32 for Q4 2024. The company recorded adjusted pre-tax, pre-provision net revenue of $1.2 million in Q4 2024.

Key financial metrics include a quarterly cash dividend of $0.07 per share, a net interest margin of 2.73%, and an efficiency ratio of 92.2%. The company recorded a $3.8 million provision for credit losses on loans in Q4 2024, primarily due to charge-offs of six commercial business loans.

Notable developments include successful reduction of FHLB borrowings, improvement in liquidity position with loan-to-deposit ratio below 100%, and termination of FDIC compliance Consent Order. Investment securities increased 9.5% to $340.3 million, while net loans decreased 2.3% to $1.68 billion. Total deposits stood at $1.69 billion, representing a slight decrease from the previous quarter.

First Northwest Bancorp (FNWB) ha riportato una perdita netta di 2,8 milioni di dollari per il Q4 2024, rispetto a una perdita netta di 2,0 milioni di dollari nel Q3 2024 e di 5,5 milioni di dollari nel Q4 2023. La perdita per azione è stata di 0,32 dollari per il Q4 2024. L'azienda ha registrato un reddito netto rettificato ante imposte e accantonamenti di 1,2 milioni di dollari nel Q4 2024.

I principali indicatori finanziari includono un dividendo in contante trimestrale di 0,07 dollari per azione, un margine di interesse netto del 2,73% e un rapporto di efficienza del 92,2%. L'azienda ha registrato un'accantonamento per perdite su crediti di 3,8 milioni di dollari sui prestiti nel Q4 2024, principalmente a causa di cancellazioni di sei prestiti commerciali.

Sviluppi significativi includono la riduzione riuscita dei prestiti FHLB, il miglioramento della posizione di liquidità con un rapporto prestiti-depositi inferiore al 100% e la risoluzione dell'Ordine di Consenso di conformità della FDIC. I titoli d'investimento sono aumentati del 9,5%, attestandosi a 340,3 milioni di dollari, mentre i prestiti netti sono diminuiti del 2,3% a 1,68 miliardi di dollari. I depositi totali ammontano a 1,69 miliardi di dollari, rappresentando una leggera diminuzione rispetto al trimestre precedente.

First Northwest Bancorp (FNWB) reportó una pérdida neta de 2,8 millones de dólares para el Q4 2024, en comparación con una pérdida neta de 2,0 millones de dólares en el Q3 2024 y 5,5 millones de dólares en el Q4 2023. La pérdida por acción fue de 0,32 dólares para el Q4 2024. La compañía registró ingresos netos ajustados antes de impuestos y provisiones de 1,2 millones de dólares en el Q4 2024.

Los principales indicadores financieros incluyen un dividendo en efectivo trimestral de 0,07 dólares por acción, un margen de interés neto del 2,73%, y una relación de eficiencia del 92,2%. La empresa contabilizó una provisión de 3,8 millones de dólares para pérdidas crediticias en préstamos en el Q4 2024, principalmente debido a cancelaciones de seis préstamos comerciales.

Los desarrollos notables incluyen la exitosa reducción de los préstamos de FHLB, la mejora en la posición de liquidez con una relación préstamo-depósito por debajo del 100%, y la terminación de la Orden de Consentimiento de cumplimiento de la FDIC. Los valores de inversión aumentaron un 9,5% hasta alcanzar 340,3 millones de dólares, mientras que los préstamos netos disminuyeron un 2,3% a 1,68 mil millones de dólares. Los depósitos totales se situaron en 1,69 mil millones de dólares, lo que representa una ligera disminución respecto al trimestre anterior.

퍼스� 노스웨스� 뱅콥 (FNWB)� 2024� 4분기 순손실이 280� 달러� 보고했으�, 이는 2024� 3분기� 200� 달러 순손실과 2023� 4분기� 550� 달러 순손실에 비해 증가� 수치입니�. 2024� 4분기 주당 손실은 0.32달러였습니�. � 회사� 2024� 4분기 조정 세전 순수익이 120� 달러임을 기록했습니다.

주요 재무 지표에� 주당 분기 현금 배당� 0.07달러, 순이� 마진 2.73%, 효율� 비율 92.2%가 포함됩니�. � 회사� 2024� 4분기� 상업� 대� 6건의 대손상각으� 인해 대출에 대� 신용 손실 대� 380� 달러� 적립했습니다.

주목� 만한 발전으로� FHLB 차입금의 성공적인 감소, 100% 미만� 대�-예금 비율� 유동� 위치� 개선, FDIC 준� 동의서의 종료가 포함됩니�. 투자 증권은 9.5% 증가하여 3� 4천만 달러� 달했으며, � 대출은 2.3% 감소하여 16� 8천만 달러� 줄었습니�. � 예금은 16� 9천만 달러�, 이전 분기 대� 소폭 감소했습니다.

First Northwest Bancorp (FNWB) a déclaré une perte nette de 2,8 millions de dollars pour le 4ème trimestre 2024, par rapport à une perte nette de 2,0 millions de dollars pour le 3ème trimestre 2024 et de 5,5 millions de dollars pour le 4ème trimestre 2023. La perte par action était de 0,32 dollar pour le 4ème trimestre 2024. La société a enregistré des revenus nets ajustés avant impôts et provisions de 1,2 million de dollars pour le 4ème trimestre 2024.

Les principaux indicateurs financiers comprennent un dividende en espèces trimestriel de 0,07 dollar par action, une marge d'intérêt nette de 2,73 % et un ratio d'efficacité de 92,2 %. La société a enregistré une provision pour pertes de crédit sur prêts de 3,8 millions de dollars pour le 4ème trimestre 2024, principalement en raison d'annulations de six prêts commerciaux.

Les développements notables incluent une réduction réussie des emprunts auprès de la FHLB, une amélioration de la position de liquidité avec un ratio prêts-dépôts inférieur à 100 % et la résiliation de l'Ordonnance de consentement de conformité de la FDIC. Les titres d'investissement ont augmenté de 9,5 % pour atteindre 340,3 millions de dollars, tandis que les prêts nets ont diminué de 2,3 % pour atteindre 1,68 milliard de dollars. Les dépôts totaux se sont élevés à 1,69 milliard de dollars, représentant une légère diminution par rapport au trimestre précédent.

First Northwest Bancorp (FNWB) meldete für das 4. Quartal 2024 einen Nettoverlust von 2,8 Millionen Dollar, verglichen mit einem Nettoverlust von 2,0 Millionen Dollar im 3. Quartal 2024 und 5,5 Millionen Dollar im 4. Quartal 2023. Der Verlust pro Aktie betrug 0,32 Dollar im 4. Quartal 2024. Das Unternehmen verzeichnete im 4. Quartal 2024 einen bereinigten, vor Steuer- und Rückstellungsnettoeinnahmen von 1,2 Millionen Dollar.

Wichtige Finanzkennzahlen umfassen eine vierteljährliche Bardividende von 0,07 Dollar pro Aktie, eine Nettomargen von 2,73% und ein Effizienzverhältnis von 92,2%. Das Unternehmen bildete im 4. Quartal 2024 eine Rückstellung für Kreditverluste in Höhe von 3,8 Millionen Dollar auf Kredite, hauptsächlich aufgrund von Abschreibungen bei sechs gewerblichen Darlehen.

Bemerkenswerte Entwicklungen sind die erfolgreiche Reduzierung der FHLB-Kredite, die Verbesserung der Liquiditätslage mit einem Kreditzins- Verhältnis von unter 100% und die Beendigung der Einhaltungsregelungen der FDIC. Die Anlagewertpapiere stiegen um 9,5% auf 340,3 Millionen Dollar, während die Nettokredite um 2,3% auf 1,68 Milliarden Dollar sanken. Die Gesamteinlagen beliefen sich auf 1,69 Milliarden Dollar, was einen leichten Rückgang gegenüber dem vorherigen Quartal darstellt.

Positive
  • Adjusted pre-tax, pre-provision net revenue improved to $1.2 million in Q4 2024
  • Net interest margin increased to 2.73% from 2.70% in previous quarter
  • Termination of FDIC compliance Consent Order
  • Investment securities portfolio increased 9.5% to $340.3 million
Negative
  • Net loss of $2.8 million in Q4 2024, increased from $2.0 million loss in Q3
  • $3.8 million provision for credit losses due to commercial loan charge-offs
  • Nonperforming loans increased to $30.5 million
  • Net loans decreased 2.3% to $1.68 billion

Insights

First Northwest Bancorp's Q4 2024 results reveal a complex financial picture requiring careful analysis. The $2.8 million net loss represents a deterioration from Q3 but shows year-over-year improvement, suggesting a gradual stabilization despite ongoing challenges.

The credit quality metrics warrant particular attention:

  • The $30.5 million in nonperforming loans and declining ACLL coverage ratio (67%) indicate persistent asset quality pressures
  • Three large relationships account for 61% of classified loans, suggesting concentrated rather than systemic credit issues
  • The $3.8 million provision for credit losses, while significant, appears prudent given the charge-off activity

Management's strategic initiatives show promise:

  • Balance sheet restructuring through hedging and BOLI optimization demonstrates proactive risk management
  • Investment securities purchases at 6.7% yield should support earnings recovery
  • Improved liquidity position with loan-to-deposit ratio below 100%

Capital levels remain sound with a 12.4% CET1 ratio, providing a buffer for continued credit resolution. However, the efficiency ratio at 92.2% indicates room for operational improvement. The dividend maintenance at $0.07 per share suggests management's confidence in capital position despite near-term earnings pressure.

PORT ANGELES, Wash., Jan. 29, 2025 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB)("First Northwest" or the "Company") today reported a net lossof$2.8 million for the fourth quarter of 2024, compared to a net loss of$2.0 million for thethird 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 thethird 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 $49,000adjusted PPNR loss for the preceding quarter and adjusted PPNR of$327,000for the fourth quarter of 2023.

The Board of Directors of First Northwestdeclared a quarterly cash dividend of $0.07per 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 forFourth Quarter and Going Forward

Provision for credit losses:

  • The Company recorded a$3.8 million provision for credit losses on loansin 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 millionfor the preceding quarter and$1.2 millionfor the fourth quarter of 2023.
  • We believe the reserve on individually analyzed loans does not representa 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 thefourth quarter of 2024 totaled $47.1 million, carrying a weighted-average yield of6.7%at purchase and a weighted-average life of3.1 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)0.22-0.010.100.34-0.06
Return on average equity-6.92-4.91-5.470.98-14.05
Net interest margin (3)2.732.702.762.762.84
Efficiency ratio (4)92.2100.372.388.8150.8
Equity to total assets6.897.137.177.177.42
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)-6.99-4.96-5.530.99-14.20
Tangible book value per common share (2)$16.29$17.00$16.64$16.83$16.83
Capital ratios (First Fed): (5)
Tier 1 leverage9.4%9.4%9.4%9.7%9.9%
Common equity Tier 1 capital12.412.212.412.613.1
Total risk-based13.613.413.513.614.1


(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)

Adjusted PPNR for thefourth quarter of 2024increased$1.3 millionto $1.2 million, compared to an adjusted PPNRloss of$49,000for the preceding quarter, and increased$1.5 millionfrom an adjusted PPNR$327,000loss in thefourth quarter oneyear ago.

For the Quarter EndedFor 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 income1,3001,7797,3472,188(2,929)12,6144,020
Total revenue15,43715,79921,58216,11611,26668,93465,452
Total noninterest expense14,23315,84815,60914,30316,99059,99361,454
PPNR (1)1,204(49)5,9731,813(5,724)8,9413,998
Selected nonrecurring adjustments to PPNR
Less: Net gain on sale of premises and equipment7,9197,919
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 tothe 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 2024primarily 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 2024were partially offset by nonaccrual interest adjustments totaling $46,000. Interest and feeson loans increased year-over-yearas 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 to2.73% for the fourth quarter of 2024, from2.70% for the prior quarter, and decreased 11-basis points from2.84% forthe fourth quarter of 2023. The Company reported reduced rates and declining volumeof 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 marginfrom the same quarter one year ago is due to higher funding costs fordeposits 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 expensefor the fourth quarter of 2024decreased 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 millionto$20.5 million at December 31, 2024, from$22.0 million at September 30, 2024. The ACLL as a percentage of total loans was1.21% at December 31, 2024, a decreasefrom 1.27%at September 30, 2024, and an increase from1.05% one year earlier. The pooled loan reserve decreased $1.5million during thefourth quarter of 2024, primarily due to the decreases in multi-family, construction, and consumer loan balances combined with decreases resultingfrom lower loss factorsapplied to commercial business and commercial real estate loans, partially offset by higher loss factors applied to one-to-four familyand 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 to67% at December 31, 2024, from72% at September 30, 2024, and 94% at December 31, 2023. This ratio continuedto 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 millionat September 30, 2024, primarily due to charge-offs totaling$3.9million on six commercial business loans during thefourth quarter. An $11.4million construction loan relationship, which became a classified loanin the fourth quarter of 2022; an $8.1 million commercial construction loan relationship, which became classified in the second quarter of 2024; and a $6.2million 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 receiverand foreclosure actions, to liquidate the underlying collateral to satisfy thereal estate loans in two of thesethree collateral-dependentrelationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 15loans totaling $2.2million included in classified loans at December 31, 2024, and an additional eight loans totaling $2.8million included in thespecial 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 equity1
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 family4225
Commercial real estate2
Home equity10
Auto and other consumer52241984642
Commercial business36
Total recoveries90661984857
Net loan charge-offs(5,281)(450)(7,255)(791)(597)
Provision for credit losses3,7603,0778,6401,2391,162
Balance at end of period$20,449$21,970$19,343$17,958$17,510
Average total loans1,708,2321,718,4021,717,8301,678,6561,645,418
Annualized net charge-offs to average outstanding loans1.23%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-family708708
Commercial real estate5,5985,634142228
Construction and land19,54419,38219,29214,44014,986
Home equity55116118121123
Auto and other consumer7008947461,012786
Commercial business3,1412,7191,0031,941877
Total nonaccrual loans30,51530,37623,63119,48118,644
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)1.371.351.070.870.85
ACLL as a % of total loans1.211.271.141.051.05
ACLL as a % of nonaccrual loans67.0172.3381.8592.1893.92
Total past due loans to total loans1.981.921.451.910.94


(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 $5.8million during thefourth quarter of 2024.The estimated average life of the securities portfolio was approximately6.9 years at December 31, 2024,7.4 years at the prior quarter end and7.7 years at the end ofthe fourth quarter of 2023. The effective duration of the portfolio was approximately3.9 years at December 31, 2024, compared to3.9 years at the prior quarter end and4.8 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)12,87613,29611,782-3.29.3
Corporate issued asset-backed securities (ABS corporate)16,12216,3915,286-1.6205.0
Corporate issued debt securities (Corporate debt)54,49154,05851,4540.85.9
U.S. Small Business Administration securities (SBA)8,6669,317-7.0100.0
Mortgage-backed securities:
U.S. government agency issued mortgage-backed securities (MBS agency)98,69778,54963,24725.756.1
Non-agency issued mortgage-backed securities (MBS non-agency)71,61657,88676,09323.7-5.9
Total securities available for sale$340,344$310,860$295,6239.515.1


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 convertedinto fully amortizing loans during the quarter totaled$18.3million. Loan payoffs of $73.9million, regular payments of $35.3 million and charge-offs totaling $5.3 millionoutpaced new loan fundingtotaling$55.6millionand 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
AG˹ٷ Estate:
One-to-four family$395,315$395,792$378,432-0.1%4.5%
Multi-family332,596353,813333,094-6.0-0.1
Commercial real estate390,379376,008387,9833.80.6
Construction and land78,11095,709129,691-18.4-39.8
Total real estate loans1,196,4001,221,3221,229,200-2.0-2.7
Consumer:
Home equity79,05476,96069,4032.713.9
Auto and other consumer268,876281,198249,130-4.47.9
Total consumer loans347,930358,158318,533-2.99.2
Commercial business151,493155,327112,295-2.534.9
Total loans receivable1,695,8231,734,8071,660,028-2.22.2
Less:
Derivative basis adjustment188(1,579)111.9100.0
Allowance for credit losses on loans20,44921,97017,510-6.916.8
Total loans receivable, net$1,675,186$1,714,416$1,642,518-2.32.0


Total deposits decreased$23.6 million to$1.69 billion at December 31, 2024, compared to$1.71 billion at September 30, 2024, and increased $11.1 million, or 0.7%, compared to$1.68 billion one year ago. During thefourth quarter of 2024, total customer deposit balances decreased$2.8 million and brokered deposit balances decreased $20.8 million. Overall, the current rate environment continues to contributeto greater competition for deposits. As a result, the Bank continues offeringdeposit rate specials to attract new funds.

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$252,0831.4%1.7%
Interest-bearing demand deposits164,891167,202169,418-1.4-2.7
Money market accounts413,822433,307362,205-4.514.3
Savings accounts205,055212,763242,148-3.6-15.3
Certificates of deposit, customer464,928441,665443,4125.34.9
Certificates of deposit, brokered182,914203,705207,626-10.2-11.9
Total deposits$1,688,026$1,711,641$1,676,892-1.40.7


Total shareholders� equity decreased to$153.9 million at December 31, 2024, compared to$160.8 million three months earlier, due to adecrease in the after-tax fair market values of the available-for-saleinvestment securities portfolio of $4.5million, anet loss of $2.8 millionanddividends 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 ofCommon Equity Tier 1 and Total Risk-Based Capital Ratios at December 31, 2024, were12.4% and 13.6%, respectively.

First Northwest continuedto 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 repurchasedunder the Company's April 2024Stock Repurchase Plan ("Repurchase Plan") during the quarter endedDecember 31, 2024. There are846,123 shares thatremain available for repurchase under the Repurchase Plan.

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

2024 Best of Olympic PeninsulaIn 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.
Puget Sound Business Journal Midsize Corporate PhilanthropistsIn 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.
Best of the NorthwestIn 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 Alivefor the second year in a row.
2023 Best of Olympic PeninsulaIn 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 FourthQuarter2024 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 organizationsand 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 litigationand 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, andother 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 Companys 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 SECs 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 for2024 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Companys 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
[email protected]
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 banks55,63764,76963,99561,784103,324
Investment securities available for sale, at fair value340,344310,860306,714325,955295,623
Loans held for sale4723781,086988753
Loans receivable (net of allowance for credit losses on loans $20,449, $21,970, $19,343, $17,958, and $17,510)1,675,1861,714,4161,677,7641,692,7741,642,518
Federal Home Loan Bank (FHLB) stock, at cost14,43514,43513,08615,87613,664
Accrued interest receivable8,1598,9399,4668,9097,894
Premises held for sale, net6,75118,049
Premises and equipment, net10,12910,43610,71411,028
Servicing rights on sold loans, at fair value3,2813,5843,7403,8203,793
Bank-owned life insurance, net41,15041,42941,11334,68140,578
Equity and partnership investments13,22914,91215,08515,12114,794
Goodwill and other intangible assets, net1,0821,0831,0841,0851,086
Deferred tax asset, net13,73810,80212,21612,70413,001
Right-of-use ("ROU") asset, net17,00117,31517,6275,8416,047
Prepaid expenses and other assets21,35224,17523,08827,14120,828
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
Borrowings336,014334,994302,575371,455320,936
Accrued interest payable3,2952,1533,1432,8303,396
Lease liability, net17,53517,79918,0546,2276,428
Accrued expenses and other liabilities31,77025,62523,71729,98029,545
Advances from borrowers for taxes and insurance1,4842,4851,3042,3981,260
Total liabilities2,078,1242,094,6972,057,0812,079,5142,038,457
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 9,611,8769394949496
Additional paid-in capital93,35793,21893,98593,76395,784
Retained earnings97,198100,660103,322106,202107,349
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' equity153,882160,789158,881160,506163,340
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 OFOPERATIONS
(Dollars in thousands, except per share data) (Unaudited)
For the Quarter EndedFor 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 securities3,6583,7863,9493,6323,39315,02513,279
Interest on deposits in banks5505825716455812,3482,126
FHLB dividends2733023582822521,215880
Total interest income28,19728,20628,61127,32626,309112,340100,899
INTEREST EXPENSE
Deposits11,17510,96010,18010,1128,75842,42727,019
Borrowings2,8853,2264,1963,2863,35613,59312,448
Total interest expense14,06014,18614,37613,39812,11456,02039,467
Net interest income14,13714,02014,23513,92814,19556,32061,432
PROVISION FOR CREDIT LOSSES
Provision for credit losses on loans3,7603,0778,6401,2391,16216,7162,357
(Recapture of) provision for credit losses on unfunded commitments(105)5799(269)(10)(218)(1,034)
Provision for credit losses3,6553,1348,7399701,15216,4981,323
Net interest income after provision for credit losses10,48210,8865,49612,95813,04339,82260,109
NONINTEREST INCOME
Loan and deposit service fees1,0541,0591,0761,1021,0684,2914,341
Sold loan servicing fees and servicing rights mark-to-market(115)1074219276188676
Net gain on sale of loans52581505233312438
Net loss on sale of investment securities(2,117)(5,397)(2,117)(5,397)
Net gain on sale of premises and equipment7,9197,919
Increase in cash surrender value of bank-owned life insurance3283152932432601,179928
Income from death benefit on bank-owned life insurance, net1,5361,536
Other (loss) income(1,555)337(48)572831(694)3,034
Total noninterest income1,3001,7797,3472,188(2,929)12,6144,020
NONINTEREST EXPENSE
Compensation and benefits7,3678,5828,5888,1287,39732,66531,209
Data processing2,0652,0852,0081,9442,1078,1028,170
Occupancy and equipment1,5591,5531,7991,2401,2626,1514,858
Supplies, postage, and telephone2963603172933511,2661,433
Regulatory assessments and state taxes4605484575133761,9781,635
Advertising3624093773092351,4572,706
Professional fees8136986849101,1193,1053,738
FDIC insurance premium4915334733864181,8831,357
Other expense8201,0809065803,7253,3866,348
Total noninterest expense14,23315,84815,60914,30316,99059,99361,454
Loss before provision (benefit) for income taxes(2,451)(3,183)(2,766)843(6,876)(7,557)2,675
Provision (benefit) for income taxes359(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 DetailDecember 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 construction15,40729,10943,34145,77650,431
Nonresidential construction16,85717,5001,0153,3743,756
Land and development6,5275,9756,4037,1227,475
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 loans117,968126,129131,151128,072124,401
First Help auto loans14,28315,97117,4278,3264,516
Other auto loans1,6472,0642,6903,3134,158
Other consumer loans6,7477,43423,84523,59810,998
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 credit35,70137,68628,86241,01435,815
Unsecured lines of credit1,7171,5711,1331,001456
SBA loans7,0447,2197,1468,9449,115
Other commercial business loans70,80170,69670,80370,29157,407
Total commercial business loans$151,493$155,327$117,094$136,297$112,295


Loans by Collateral and Unfunded CommitmentsDecember 31,
2024
September 30,
2024
June 30,
2024
March 31,
2024
December 31,
2023
One-to-four family construction$44,468$51,607$49,440$70,100$60,211
All other construction and land34,29045,16658,34655,28669,484
One-to-four family first mortgage466,046469,053434,840436,543426,159
One-to-four family junior liens15,09014,70113,70612,60812,250
One-to-four family revolving open-end51,48148,45944,80345,53642,479
Commercial real estate, owner occupied:
Health care29,12929,40729,67829,94622,523
Office17,75617,90119,21517,95118,468
Warehouse14,94811,64514,61314,68314,758
Other78,17064,53556,29255,06361,304
Commercial real estate, non-owner occupied:
Office49,41749,77050,15853,09953,548
Retail49,59149,71750,10150,47851,384
Hospitality61,91962,28262,62866,98267,332
Other81,64082,57384,42893,04094,822
Multi-family residential333,419354,118350,382339,907333,428
Commercial business loans77,38186,90479,05590,78176,920
Commercial agriculture and fishing loans21,83315,36914,41110,2005,422
State and political subdivision obligations369404405405405
Consumer automobile loans133,789144,036151,121139,524132,877
Consumer loans secured by other assets131,429132,749129,293122,895108,542
Consumer loans unsecured3,6584,4115,2096,4157,712
Total loans$1,695,823$1,734,807$1,698,124$1,711,442$1,660,028
Unfunded commitments under lines of credit or existing loans$163,827$166,446$155,005$148,736$149,631



FIRST NORTHWEST BANCORP AND SUBSIDIARY
NET INTEREST MARGIN ANALYSIS
(Dollars in thousands) (Unaudited)
Three Months Ended December 31,
20242023
AverageInterestAverageInterest
BalanceEarned/Yield/BalanceEarned/Yield/
OutstandingPaidRateOutstandingPaidRate
(Dollars in thousands)
Interest-earning assets:
Loans receivable, net (1) (2)$1,688,239$23,7165.59%$1,628,718$22,0835.38%
Investment securities313,7593,6584.64297,0203,3934.53
FHLB dividends11,7622739.2312,5142527.99
Interest-earning deposits in banks45,3585504.8241,9745815.49
Total interest-earning assets (3)2,059,11828,1975.451,980,22626,3095.27
Noninterest-earning assets146,384147,429
Total average assets$2,205,502$2,127,655
Interest-bearing liabilities:
Interest-bearing demand deposits$162,954$2100.51$172,013$1970.45
Money market accounts442,4812,7732.49362,3661,3511.48
Savings accounts206,6057211.39247,7449631.54
Certificates of deposit, customer461,1364,9254.25424,7224,1973.92
Certificates of deposit, brokered192,0182,5465.27172,2142,0504.72
Total interest-bearing deposits (4)1,465,19411,1753.031,379,0598,7582.52
Advances236,5762,4914.19256,5602,9624.58
Subordinated debt39,5043943.9739,4253943.96
Total interest-bearing liabilities1,741,27414,0603.211,675,04412,1142.87
Noninterest-bearing deposits (4)256,715259,845
Other noninterest-bearing liabilities45,95336,795
Total average liabilities2,043,9421,971,684
Average equity161,560155,971
Total average liabilities and equity$2,205,502$2,127,655
Net interest income$14,137$14,195
Net interest rate spread2.242.40
Net earning assets$317,844$305,182
Net interest margin (5)2.732.84
Average interest-earning assets to average interest-bearing liabilities118.3%118.2%

(1) The average loans receivable, net balances include nonaccrual loans.
(2) Interest earned on loans receivable includesnet deferred fees (costs)of$103,000and($151,000)for the three months ended December 31, 2024 and 2023, respectively.
(3) Includes interest-earning deposits (cash) at other financial institutions.
(4) Cost of all deposits, including noninterest-bearing demand deposits, was2.58%and2.12%for the three months ended December 31, 2024 and 2023, 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 understandthe 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 EndedFor 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 losses3,6553,1348,7399701,15216,4981,323
Provision (benefit) for income taxes359(1,203)(547)447(1,354)(944)549
PPNR (1)1,204(49)5,9731,813(5,724)8,9414,158
Selected nonrecurring adjustments to PPNR
Less: Net gain on sale of premises and equipment7,9197,919
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 EndedFor 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 assets1,0821,0831,0841,0851,0861,0821,086
Disallowed non-mortgage loan servicing rights423489517489481423481
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 assets1,0821,0831,0841,0851,0861,0821,086
Disallowed non-mortgage loan servicing rights423489517489481423481
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 assets1,0831,0841,0851,0851,0861,0841,087
Average disallowed non-mortgage loan servicing rights489517489481608494670
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 outstanding9,353,3489,365,9799,453,2479,442,7969,611,8769,353,3489,611,876
GAAP Ratios:
Equity to total assets6.89%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.

FAQ

What was FNWB's net loss in Q4 2024?

First Northwest Bancorp reported a net loss of $2.8 million for Q4 2024, with a loss per share of $0.32.

How much was FNWB's provision for credit losses in Q4 2024?

FNWB recorded a $3.8 million provision for credit losses on loans in Q4 2024, primarily due to charge-offs of six commercial business loans.

What is FNWB's quarterly dividend payment for Q4 2024?

FNWB declared a quarterly cash dividend of $0.07 per common share, payable on February 28, 2025.

How did FNWB's investment securities perform in Q4 2024?

Investment securities increased $29.5 million or 9.5% to $340.3 million compared to the previous quarter.

What was FNWB's net interest margin in Q4 2024?

FNWB's net interest margin increased to 2.73% for Q4 2024, up from 2.70% in the previous quarter.
First Northwest

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72.64M
7.97M
20.83%
48.6%
0.14%
Banks - Regional
Savings Institutions, Not Federally Chartered
United States
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