FNWB 8-K/A
First Northwest Bancorp (FNWB)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class:
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Trading Symbol(s):
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Name of each exchange on which registered:
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The
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Item 2.02
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Results of Operations and Financial Condition
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Item 7.01
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Regulation FD Disclosure
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Item 9.01 Financial Statements and Exhibits
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(d) Exhibit.
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The following exhibits are furnished with this Form 8-K.
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Exhibit No.
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Description
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99.1
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| 99.2 | Updated Slide Presentation |
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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FIRST NORTHWEST BANCORP
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Date:
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May 12, 2025
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/s/Matthew P. Deines
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Matthew P. Deines
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President and Chief Executive Officer
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Exhibit 99.1
PORT ANGELES, Wash., May 12, 2025 (GLOBE NEWSWIRE)
UPDATING
First Northwest Bancorp Reports First Quarter 2025 Financial Results
First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company") announced an update of its press release issued on April 24, 2025, in light of the legal matter discussed in Part II, Item 1 of the Company's Form 10-Q for the quarter ended March 31, 2025 (the "Quarterly Report"). The updated release follows, and should be read together with the Quarterly Report, which provides additional information concerning the information set out in this press release.
The Company today reported a net loss of $9.0 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 loss per share were $1.03 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.
Key Points for First Quarter and Going Forward
Update on provision for credit losses:
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•
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The Company recorded a $7.8 million provision for credit losses on loans in the first quarter of 2025, primarily due to $7.7 million of charge-offs. The increase in charge-off activity was primarily related to underlying collateral deficiencies for two commercial real estate loans and a related commercial business loan totaling $6.2 million. The remaining charge-offs were related to three commercial business loans, one commercial construction loan and a small number of consumer loans due to uncertainty in the collectability of these 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. |
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•
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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. |
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. |
Other significant events:
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•
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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. | |
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•
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The Company recorded a $846,000 gain on extinguishment of debt related to repurchasing at a discount $5.0 million of subordinated debt 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. | |
| • | Noninterest expense included a $5.8 million legal reserve recorded in other expense during the current quarter, in connection with the legal matter discussed in Part II, Item 1 of the Quarterly Report. |
(1) See reconciliation of Non-GAAP Financial Measures later in this release.
Selected Quarterly Financial Ratios:
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As of or For the Quarter Ended |
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March 31, 2025 |
December 31, 2024 |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
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Performance ratios: (1) |
(Updated) | |||||||||||||||||||
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Return on average assets |
-1.69 | % | -0.51 | % | -0.36 | % | -0.40 | % | 0.07 | % | ||||||||||
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Adjusted PPNR return on average assets (2) |
0.27 | 0.26 | 0.17 | 0.10 | 0.22 | |||||||||||||||
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Return on average equity |
-23.42 | -6.92 | -4.91 | -5.47 | 0.98 | |||||||||||||||
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Net interest margin (3) |
2.76 | 2.73 | 2.70 | 2.76 | 2.76 | |||||||||||||||
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Efficiency ratio (4) |
113.5 | 92.2 | 100.3 | 72.3 | 88.8 | |||||||||||||||
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Equity to total assets |
6.75 | 6.89 | 7.13 | 7.17 | 7.17 | |||||||||||||||
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Book value per common share |
$ | 15.52 | $ | 16.45 | $ | 17.17 | $ | 16.81 | $ | 17.00 | ||||||||||
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Tangible performance ratios: (1) |
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Tangible common equity to tangible assets (2) |
6.68 | % | 6.83 | % | 7.06 | % | 7.10 | % | 7.10 | % | ||||||||||
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Return on average tangible common equity (2) |
-23.65 | -6.99 | -4.96 | -5.53 | 0.99 | |||||||||||||||
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Tangible book value per common share (2) |
$ | 15.36 | $ | 16.29 | $ | 17.00 | $ | 16.64 | $ | 16.83 | ||||||||||
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Capital ratios (First Fed): (5) |
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Tier 1 leverage |
9.0 | % | 9.4 | % | 9.4 | % | 9.4 | % | 9.7 | % | ||||||||||
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Common equity Tier 1 capital |
12.1 | 12.4 | 12.2 | 12.4 | 12.6 | |||||||||||||||
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Total risk-based |
13.4 | 13.6 | 13.4 | 13.5 | 13.6 | |||||||||||||||
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(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)
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For the Quarter Ended |
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(Dollars in thousands) |
March 31, 2025 |
December 31, 2024 |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
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(Updated) |
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Net interest income |
$ | 13,847 | $ | 14,137 | $ | 14,020 | $ | 14,235 | $ | 13,928 | ||||||||||
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Total noninterest income |
3,777 | 1,300 | 1,779 | 7,347 | 2,188 | |||||||||||||||
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Total revenue |
17,624 | 15,437 | 15,799 | 21,582 | 16,116 | |||||||||||||||
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Total noninterest expense |
20,000 | 14,233 | 15,848 | 15,609 | 14,303 | |||||||||||||||
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PPNR (1) |
(2,376 | ) | 1,204 | (49 | ) | 5,973 | 1,813 | |||||||||||||
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Less selected nonrecurring adjustments to PPNR: |
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BOLI death benefit |
1,059 | 1,536 | — | — | — | |||||||||||||||
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Gain on extinguishment of subordinated debt included in other income |
846 | — | — | — | — | |||||||||||||||
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Legal reserve |
(5,750 | ) | — | — | — | — | ||||||||||||||
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Equity investment repricing adjustment |
— | (1,762 | ) | — | — | 651 | ||||||||||||||
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One-time compensation payouts related to reduction in force |
— | — | (996 | ) | — | — | ||||||||||||||
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Net gain on sale of premises and equipment |
— | — | — | 7,919 | — | |||||||||||||||
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Sale leaseback taxes and assessments included in occupancy and equipment |
— | — | — | (359 | ) | — | ||||||||||||||
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Net gain on sale of investment securities |
— | — | — | (2,117 | ) | — | ||||||||||||||
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Adjusted PPNR (1) |
$ | 1,469 | $ | 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 and a $846,000 gain on extinguishment of debt during the current quarter. | |
| • | Noninterest expense included a $5.8 million legal reserve recorded in other expense during the current quarter, in connection with the legal matter discussed in Part II, Item 1 of the Quarterly Report. |
Allowance for Credit Losses on Loans ("ACLL") and Credit Quality
The allowance for credit losses on loans ("ACLL") increased $120,000 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 $7.7 million resulted in a provision expense of $7.8 million for the quarter ended March 31, 2025.
Nonperforming loans totaled $20.4 million at March 31, 2025, a decrease of $10.2 million, or 33.3%, from December 31, 2024. ACLL to nonperforming loans increased to 101% at March 31, 2025, from 67% at December 31, 2024, and 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 $10.9 million to $31.6 million at March 31, 2025, from $42.5 million at December 31, 2024, primarily due to charge-offs totaling $7.2 million and $3.9 million in principal payments received on two commercial construction loans during the first quarter. An $8.1 million construction loan relationship, which became a classified loan in the fourth quarter of 2022, and a $7.2 million commercial construction loan relationship, which became classified in the second quarter of 2024, account for 48% 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 these collateral-dependent relationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 16 loans totaling $1.6 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.
In the first quarter of 2025, the Bank recorded commercial real estate loan charge-offs totaling $5.6 million and commercial business loan charge-offs totaling $603,000 due to underlying collateral deficiencies. Additional commercial business loan charge-offs totaling $811,000 and commercial construction loan charge-offs totaling $374,000 were recorded as a result of uncertainty in the collectability of the underlying collateral in specific loan relationships. Charge-offs are based on individual loan evaluations and do not represent a universal decline in the collectability of all loans in these categories. Additional charged-off balances related to purchased unsecured consumer loans totaled $207,000 during the three months ended March 31, 2025.
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For the Quarter Ended |
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ACLL ($ in thousands) |
March 31, 2025 |
December 31, 2024 |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
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(Updated) |
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Balance at beginning of period |
$ | 20,449 | $ | 21,970 | $ | 19,343 | $ | 17,958 | $ | 17,510 | ||||||||||
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Charge-offs: |
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Construction and land |
(374 | ) | (411 | ) | — | (3,978 | ) | — | ||||||||||||
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Auto and other consumer |
(243 | ) | (364 | ) | (492 | ) | (832 | ) | (806 | ) | ||||||||||
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Commercial business |
(1,513 | ) | (4,596 | ) | (24 | ) | (2,643 | ) | (33 | ) | ||||||||||
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Total charge-offs |
(7,701 | ) | (5,371 | ) | (516 | ) | (7,453 | ) | (839 | ) | ||||||||||
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Recoveries: |
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One-to-four family |
— | — | 42 | — | 2 | |||||||||||||||
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Commercial real estate |
6 | 2 | — | — | — | |||||||||||||||
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Auto and other consumer |
43 | 52 | 24 | 198 | 46 | |||||||||||||||
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Commercial business |
2 | 36 | — | — | — | |||||||||||||||
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Total recoveries |
51 | 90 | 66 | 198 | 48 | |||||||||||||||
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Net loan charge-offs |
(7,650 | ) | (5,281 | ) | (450 | ) | (7,255 | ) | (791 | ) | ||||||||||
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Provision for credit losses |
7,770 | 3,760 | 3,077 | 8,640 | 1,239 | |||||||||||||||
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Balance at end of period |
$ | 20,569 | $ | 20,449 | $ | 21,970 | $ | 19,343 | $ | 17,958 | ||||||||||
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Average total loans |
1,662,164 | 1,708,232 | 1,718,402 | 1,717,830 | 1,678,656 | |||||||||||||||
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Annualized net charge-offs to average outstanding loans |
1.87 | % | 1.23 | % | 0.10 | % | 1.70 | % | 0.19 | % | ||||||||||
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Asset Quality ($ in thousands) |
March 31, 2025 |
December 31, 2024 |
September 30, 2024 |
June 30, 2024 |
March 31, 2024 |
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Nonaccrual loans: |
(Updated) | |||||||||||||||||||
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One-to-four family |
$ | 1,404 | $ | 1,477 | $ | 1,631 | $ | 1,750 | $ | 1,237 | ||||||||||
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Multi-family |
— | — | — | 708 | 708 | |||||||||||||||
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Commercial real estate |
4 | 5,598 | 5,634 | 14 | 22 | |||||||||||||||
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Construction and land |
15,280 | 19,544 | 19,382 | 19,292 | 14,440 | |||||||||||||||
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Home equity |
54 | 55 | 116 | 118 | 121 | |||||||||||||||
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Auto and other consumer |
710 | 700 | 894 | 746 | 1,012 | |||||||||||||||
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Commercial business |
2,903 | 3,141 | 2,719 | 1,003 | 1,941 | |||||||||||||||
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Total nonaccrual loans |
20,355 | 30,515 | 30,376 | 23,631 | 19,481 | |||||||||||||||
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Other real estate owned |
— | — | — | — | — | |||||||||||||||
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Total nonperforming assets |
$ | 20,355 | $ | 30,515 | $ | 30,376 | $ | 23,631 | $ | 19,481 | ||||||||||
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Nonaccrual loans as a % of total loans (1) |
1.23 | % | 1.80 | % | 1.75 | % | 1.39 | % | 1.14 | % | ||||||||||
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Nonperforming assets as a % of total assets (2) |
0.94 | 1.37 | 1.35 | 1.07 | 0.87 | |||||||||||||||
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ACLL as a % of total loans |
1.24 | 1.21 | 1.27 | 1.14 | 1.05 | |||||||||||||||
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ACLL as a % of nonaccrual loans |
101.05 | 67.01 | 72.33 | 81.85 | 92.18 | |||||||||||||||
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Total past due loans to total loans |
1.36 | 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 $2.4 million from regular repayment activity during the most recent quarter.
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Investment Securities ($ in thousands) |
March 31, 2025 | December 31, 2024 | March 31, 2024 | Three Month % Change | One Year % Change | |||||||||||||||
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Available for Sale at Fair Value |
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Municipal bonds |
$ | 78,295 | $ | 77,876 | $ | 87,004 | 0.5 | % | -10.0 | % | ||||||||||
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U.S. government agency issued asset-backed securities (ABS agency) |
12,643 | 12,876 | 14,822 | -1.8 | -14.7 | |||||||||||||||
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Corporate issued asset-backed securities (ABS corporate) |
15,671 | 16,122 | 13,929 | -2.8 | 12.5 | |||||||||||||||
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Corporate issued debt securities (Corporate debt) |
55,067 | 54,491 | 53,031 | 1.1 | 3.8 | |||||||||||||||
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U.S. Small Business Administration securities (SBA) |
8,061 | 8,666 | 7,911 | -7.0 | 1.9 | |||||||||||||||
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Mortgage-backed securities: |
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U.S. government agency issued mortgage-backed securities (MBS agency) |
96,642 | 98,697 | 83,271 | -2.1 | 16.1 | |||||||||||||||
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Non-agency issued mortgage-backed securities (MBS non-agency) |
49,054 | 71,616 | 65,987 | -31.5 | -25.7 | |||||||||||||||
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Total securities available for sale |
$ | 315,433 | $ | 340,344 | $ | 325,955 | -7.3 | -3.2 |
Net loans, excluding loans held for sale, decreased $37.6 million, or 2.2%, to $1.64 billion at March 31, 2025, from $1.68 billion at December 31, 2024, and decreased $55.2 million, or 3.3%, 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 $7.7 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 $36.2 million compared to the prior quarter.
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Loans ($ in thousands) |
March 31, 2025 | December 31, 2024 | March 31, 2024 | Three Month % Change | One Year % Change | |||||||||||||||
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Real Estate: |
(Updated) | |||||||||||||||||||
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One-to-four family |
$ | 394,428 | $ | 395,315 | $ | 383,905 | -0.2 | % | 2.7 | % | ||||||||||
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Multi-family |
338,147 | 332,596 | 339,538 | 1.7 | -0.4 | |||||||||||||||
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Commercial real estate |
387,312 | 390,379 | 385,130 | -0.8 | 0.6 | |||||||||||||||
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Construction and land |
64,877 | 78,110 | 125,347 | -16.9 | -48.2 | |||||||||||||||
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Total real estate loans |
1,184,764 | 1,196,400 | 1,233,920 | -1.0 | -4.0 | |||||||||||||||
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Consumer: |
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Home equity |
79,151 | 79,054 | 72,391 | 0.1 | 9.3 | |||||||||||||||
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Auto and other consumer |
273,878 | 268,876 | 268,834 | 1.9 | 1.9 | |||||||||||||||
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Total consumer loans |
353,029 | 347,930 | 341,225 | 1.5 | 3.5 | |||||||||||||||
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Commercial business |
119,783 | 151,493 | 136,297 | -20.9 | -12.1 | |||||||||||||||
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Total loans receivable |
1,657,576 | 1,695,823 | 1,711,442 | -2.3 | -3.1 | |||||||||||||||
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Less: |
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Derivative basis adjustment |
(566 | ) | 188 | 710 | -401.1 | -179.7 | ||||||||||||||
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Allowance for credit losses on loans |
20,569 | 20,449 | 17,958 | 0.6 | 14.5 | |||||||||||||||
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Total loans receivable, net |
$ | 1,637,573 | $ | 1,675,186 | $ | 1,692,774 | -2.2 | -3.3 | ||||||||||||
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 $45.0 million. Overall, the current rate environment continues to contribute to greater competition for deposits leading to higher rates paid on interest-bearing demand deposits and savings accounts during the current quarter. The deposit mix compared to March 31, 2024, also reflects a shift to higher demand and money market account balances with increased rates paid on those accounts while rates paid on certificate and savings accounts decreased.
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Deposits ($ in thousands) |
March 31, 2025 | December 31, 2024 | March 31, 2024 | Three Month % Change | One Year % Change | |||||||||||||||
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Noninterest-bearing demand deposits |
$ | 247,890 | $ | 256,416 | $ | 252,761 | -3.3 | % | -1.9 | % | ||||||||||
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Interest-bearing demand deposits |
169,912 | 164,891 | 170,729 | 3.0 | -0.5 | |||||||||||||||
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Money market accounts |
424,469 | 413,822 | 395,480 | 2.6 | 7.3 | |||||||||||||||
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Savings accounts |
235,188 | 205,055 | 236,550 | 14.7 | -0.6 | |||||||||||||||
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Certificates of deposit, customer |
450,663 | 464,928 | 418,904 | -3.1 | 7.6 | |||||||||||||||
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Certificates of deposit, brokered |
137,946 | 182,914 | 192,200 | -24.6 | -28.2 | |||||||||||||||
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Total deposits |
$ | 1,666,068 | $ | 1,688,026 | $ | 1,666,624 | -1.3 | 0.0 |
Total shareholders’ equity decreased to $146.5 million at March 31, 2025, compared to $153.9 million three months earlier, due to a net loss of $9.0 million, dividends declared of $656,000 and a decrease in the after-tax fair market values of derivatives of $425,000, partially offset by an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $2.4 million.
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 12.1% and 13.4%, 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 | ||||||||
 |
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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 May 12, 2025, Current Report on Form 8-K/A.
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
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 |
(Updated) | |||||||||||||||||||
|
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 $20,569, $20,449, $21,970, $19,343, and $17,958) |
1,637,573 | 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 ("BOLI"), 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 |
14,304 | 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 |
31,680 | 21,352 | 24,175 | 23,088 | 27,141 | |||||||||||||||
|
Total assets |
$ | 2,171,430 | $ | 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 |
29,767 | 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 |
2,024,938 | 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 |
87,506 | 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 |
146,492 | 153,882 | 160,789 | 158,881 | 160,506 | |||||||||||||||
|
Total liabilities and shareholders' equity |
$ | 2,171,430 | $ | 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 |
(Updated) | |||||||||||||||||||
|
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 |
7,770 | 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 |
7,785 | 3,655 | 3,134 | 8,739 | 970 | |||||||||||||||
|
Net interest income after provision for credit losses |
6,062 | 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 BOLI cash surrender value |
372 | 328 | 315 | 293 | 243 | |||||||||||||||
|
Income from BOLI death benefit, net |
1,059 | 1,536 | — | — | — | |||||||||||||||
|
Other income (loss) |
1,034 | (1,555 | ) | 337 | (48 | ) | 572 | |||||||||||||
|
Total noninterest income |
3,777 | 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 |
6,429 | 820 | 1,080 | 906 | 580 | |||||||||||||||
|
Total noninterest expense |
20,000 | 14,233 | 15,848 | 15,609 | 14,303 | |||||||||||||||
|
(Loss) income before (benefit) provision for income taxes |
(10,161 | ) | (2,451 | ) | (3,183 | ) | (2,766 | ) | 843 | |||||||||||
|
(Benefit) provision for income taxes |
(1,125 | ) | 359 | (1,203 | ) | (547 | ) | 447 | ||||||||||||
|
Net (loss) income |
$ | (9,036 | ) | $ | (2,810 | ) | $ | (1,980 | ) | $ | (2,219 | ) | $ | 396 | ||||||
|
Basic and diluted (loss) earnings per common share |
$ | (1.03 | ) | $ | (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 |
(Updated) | |||||||||||||||||||
|
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 |
70,878 | 70,801 | 70,696 | 70,803 | 70,291 | |||||||||||||||
|
Total commercial business loans |
$ | 119,783 | $ | 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 |
|||||||||||||||
| (Updated) | ||||||||||||||||||||
|
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 |
9,272 | 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 |
75,628 | 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 |
$ | 1,657,576 | $ | 1,695,823 | $ | 1,734,807 | $ | 1,698,124 | $ | 1,711,442 | ||||||||||
|
Unfunded commitments under lines of credit or existing loans |
$ | 175,100 | $ | 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 (Updated) |
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) |
$ | 1,641,937 | $ | 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) |
2,031,671 | 26,823 | 5.35 | 2,027,821 | 27,326 | 5.42 | ||||||||||||||||||
|
Noninterest-earning assets |
143,077 | 138,366 | ||||||||||||||||||||||
|
Total average assets |
$ | 2,174,748 | $ | 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 | 2,855 | 4.14 | 252,912 | 2,892 | 4.60 | ||||||||||||||||||
|
Subordinated debt |
38,370 | 384 | 4.06 | 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 |
47,296 | 40,563 | ||||||||||||||||||||||
|
Total average liabilities |
2,018,278 | 2,004,320 | ||||||||||||||||||||||
|
Average equity |
156,470 | 161,867 | ||||||||||||||||||||||
|
Total average liabilities and equity |
$ | 2,174,748 | $ | 2,166,187 | ||||||||||||||||||||
|
Net interest income |
$ | 13,847 | $ | 13,928 | ||||||||||||||||||||
|
Net interest rate spread |
2.30 | 2.28 | ||||||||||||||||||||||
|
Net earning assets |
$ | 304,258 | $ | 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 |
|||||||||||||||
|
(Updated) |
||||||||||||||||||||
|
Net (loss) income |
$ | (9,036 | ) | $ | (2,810 | ) | $ | (1,980 | ) | $ | (2,219 | ) | $ | 396 | ||||||
|
Plus: provision for credit losses |
7,785 | 3,655 | 3,134 | 8,739 | 970 | |||||||||||||||
|
(Benefit) provision for income taxes |
(1,125 | ) | 359 | (1,203 | ) | (547 | ) | 447 | ||||||||||||
|
PPNR (1) |
(2,376 | ) | 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 | — | — | — | — | |||||||||||||||
|
Legal reserve |
(5,750 | ) | — | — | — | — | ||||||||||||||
|
Equity investment repricing adjustment |
— | (1,762 | ) | — | — | 651 | ||||||||||||||
|
One-time compensation payouts related to reduction in force |
— | — | (996 | ) | — | — | ||||||||||||||
|
Net gain on sale of premises and equipment |
— | — | — | 7,919 | — | |||||||||||||||
|
Sale leaseback taxes and assessments included in occupancy and equipment |
— | — | — | (359 | ) | — | ||||||||||||||
|
Net gain on sale of investment securities |
— | — | — | (2,117 | ) | — | ||||||||||||||
|
Adjusted PPNR (1) |
$ | 1,469 | $ | 1,430 | $ | 947 | $ | 530 | $ | 1,162 | ||||||||||
|
Average total assets |
$ | 2,174,748 | $ | 2,205,502 | $ | 2,209,333 | $ | 2,219,370 | $ | 2,166,187 | ||||||||||
|
GAAP Ratio: |
||||||||||||||||||||
|
Return on average assets (GAAP) |
-1.69 | % | -0.51 | % | -0.36 | % | -0.40 | % | 0.07 | % | ||||||||||
|
Non-GAAP Ratios: |
||||||||||||||||||||
|
PPNR return on average assets (Non-GAAP) (1) |
-0.44 | % | 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 | |||||||||||||||
|
(Updated) |
||||||||||||||||||||
|
Total shareholders' equity |
$ | 146,492 | $ | 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 |
$ | 144,995 | $ | 152,377 | $ | 159,217 | $ | 157,280 | $ | 158,932 | ||||||||||
|
Total assets |
$ | 2,171,430 | $ | 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 |
$ | 2,169,933 | $ | 2,230,501 | $ | 2,253,914 | $ | 2,214,361 | $ | 2,238,446 | ||||||||||
|
Average shareholders' equity |
$ | 156,470 | $ | 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 |
$ | 154,965 | $ | 159,988 | $ | 158,878 | $ | 161,505 | $ | 160,301 | ||||||||||
|
Net (loss) income |
$ | (9,036 | ) | $ | (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 |
6.75 | % | 6.89 | % | 7.13 | % | 7.17 | % | 7.17 | % | ||||||||||
|
Return on average equity |
-23.42 | % | -6.92 | % | -4.91 | % | -5.47 | % | 0.98 | % | ||||||||||
|
Book value per common share |
$ | 15.52 | $ | 16.45 | $ | 17.17 | $ | 16.81 | $ | 17.00 | ||||||||||
|
Non-GAAP Ratios: |
||||||||||||||||||||
|
Tangible common equity to tangible assets (1) |
6.68 | % | 6.83 | % | 7.06 | % | 7.10 | % | 7.10 | % | ||||||||||
|
Return on average tangible common equity (1) |
-23.65 | % | -6.99 | % | -4.96 | % | -5.53 | % | 0.99 | % | ||||||||||
|
Tangible book value per common share (1) |
$ | 15.36 | $ | 16.29 | $ | 17.00 | $ | 16.64 | $ | 16.83 | ||||||||||
|
(1) |
We believe that the use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. |
Exhibit 99.2
