First Northwest Bancorp Announces Third Quarter 2025 Results
PORT ANGELES, Wash., Oct. 27, 2025 (GLOBE NEWSWIRE) --
First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or the "Company"), the holding company for First Fed Bank ("First Fed" or the "Bank"), today reported net income of $802,000 for the third quarter of 2025, compared to net income of $3.7 million for the second quarter of 2025 and a net loss of $2.0 million for the third quarter of 2024. Basic and diluted income per share were $0.09 for the third quarter of 2025, compared to basic and diluted income per share of $0.42 for the second quarter of 2025 and basic and diluted loss per share of $0.23 for the third quarter of 2024.
Management Outlook:
"With over a century of history behind First Fed, I'm committed to honoring that legacy by continuing to deliver long-term value for our shareholders and remaining a trusted partner in the communities we serve," said Curt Queyrouze, President and Chief Executive Officer of First Northwest and First Fed. "Guided by our Board and driven by a talented team, we are building a modern, forward-thinking financial institution. Our third quarter results demonstrate meaningful progress in positioning First Fed to meet the evolving needs of our customers. As we embrace a culture of customer obsession, we recognize that their success is our success. I'm excited to build on the strong foundation we've established and work to ensure First Northwest continues to be a catalyst for financial growth and wellness throughout our communities."
The Board of Directors of First Northwest elected not to declare a dividend for this quarter as part of a prudent approach to capital management. The Company remains committed to maintaining a strong balance sheet and will continue to evaluate future dividend decisions in light of the Company’s long-term strategic objectives.
Key Points for the Third Quarter
Positive Trends:
Other significant events:
Adjusted Pre-tax, Pre-Provision Net Revenue (1)
Adjusted PPNR for the third quarter of 2025 decreased $1.8 million to $340,000, compared to $2.1 million for the preceding quarter, and decreased $607,000 from $947,000 in the third quarter one year ago.
(1) See reconciliation of Non-GAAP Financial Measures later in this release.
Allowance for Credit Losses on Loans ("ACLL") and Credit Quality
The allowance for credit losses on loans ("ACLL") decreased $2.1 million to $16.2 million at September 30, 2025, from $18.4 million at June 30, 2025. The ACLL as a percentage of total loans was 1.00% at September 30, 2025, a decrease from 1.10% at June 30, 2025, and from 1.27% one year earlier. A $2.1 million decline in the overall pooled loan reserve, driven primarily by reduced loan balances combined with a decrease in the loss factor applied to one-to-four family loans, was partially offset by net loan charge-offs totaling $1.5 million, contributing to a recapture of provision expense of $620,000 for the quarter ended September 30, 2025.
Nonperforming loans decreased $7.0 million to $13.4 million at September 30, 2025, from $20.4 million at June 30, 2025. Current quarter activity included a $4.9 million decrease due to the sale of a commercial construction loan and charged-off balances totaling $1.6 million. ACLL to nonperforming loans increased to 121% at September 30, 2025, from 90% at June 30, 2025, and from 72% at September 30, 2024. This ratio has increased as nonperforming loan balances have decreased due to principal payments, sales and charge-offs.
Classified loans decreased $7.1 million to $23.9 million at September 30, 2025, from $30.9 million at June 30, 2025, primarily due to the sale of a $4.9 million commercial construction loan, payments received of $1.6 million and commercial loan net charge-offs totaling $1.9 million, partially offset by $1.8 million of consumer loan downgrades. Three collateral dependent loans totaling $16.1 million account for 68% of the classified loan balance at September 30, 2025. The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in the largest of these four collateral-dependent relationships. The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 12 loans totaling $149,000 included in classified loans at September 30, 2025, and one additional loan totaling $210,000 included in the special mention risk grading category.
Financial Condition and Capital
Investment securities decreased $20.9 million, or 6.9%, to $282.6 million at September 30, 2025, compared to $303.5 million three months earlier, and decreased $28.3 million compared to $310.9 million at September 30, 2024. Maturities totaling $16.3 million and regular principal payments totaling $9.3 million were partially offset by a $4.8 million reduction of net unrealized losses during the third quarter of 2025. The estimated average life of the securities portfolio was approximately 6.9 years at September 30, 2025, 7.6 years at the preceding quarter end and 7.4 years at the end of the third quarter of 2024. The effective duration of the portfolio was approximately 4.8 years at September 30, 2025, compared to 4.9 years at the preceding quarter end and 3.9 years at the end of the third quarter of 2024.
Net loans, excluding loans held for sale, decreased $39.4 million, or 2.4%, to $1.61 billion at September 30, 2025, from $1.65 billion at June 30, 2025, and decreased $106.6 million, or 6.2%, from $1.71 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $2.4 million. Loan payoffs of $73.7 million, regular payments of $32.5 million and charge-offs totaling $2.2 million outpaced new loan funding totaling $40.9 million and draws on existing loans totaling $25.3 million.
Other decreases to total assets during the quarter included a $4.1 million reduction in the balance of FHLB stock required to be held. Other assets decreased during the current quarter primarily due to the return of $9.1 million for a BOLI policy surrendered in the first quarter of 2025.
Total deposits decreased $1.3 million to $1.65 billion at September 30, 2025, compared to $1.65 billion at June 30, 2025, and decreased $58.3 million compared to $1.71 billion one year prior. During the third quarter of 2025, total customer deposit balances increased $1.3 million and brokered deposit balances decreased $2.6 million. The customer deposit mix continues to shift towards increased average balances of money market, savings and noninterest-bearing demand accounts while interest-bearing demand deposit and CD account average balances decreased. The deposit mix compared to September 30, 2024, reflects a shift in average balances to money market and customer CD accounts while the average balance of brokered CDs decreased. The rates paid on all interest-bearing accounts decreased compared to the same quarter one year ago.
Total shareholders’ equity increased to $154.5 million at September 30, 2025, compared to $149.7 million three months earlier, due to an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $3.7 million and net income of $802,000. No shares of common stock were repurchased under the Company's April 2024 Stock Repurchase Plan (the "Repurchase Plan") during the quarter ended September 30, 2025. There are 846,123 shares that remain available for repurchase under the Repurchase Plan.
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 September 30, 2025. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at September 30, 2025, were 12.7% and 13.7%, respectively.
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 17 locations in Washington state including 12 full-service branches. First Fed’s business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. First Northwest has also strategically invested in partnerships focused on developing modern financial solutions and a boutique investment banking/accelerator firm. These investments underscore the Company’s commitment to innovation and growth in the financial services sector. 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, unemployment levels, interest rates and inflationary pressures, among other things; legislative, regulatory, and policy changes; legal proceedings, regulatory investigations and their resolutions; and other factors described in the Company’s latest Annual Report on Form 10-K under the section entitled "Risk Factors," and other filings with the Securities and Exchange Commission ("SEC"),which are available on our website at www.ourfirstfed.com and on the SEC’s website at www.sec.gov.
Any of the forward-looking statements that we make in this press release and in the other public statements we make may turn out to be incorrect because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed or implied in any forward-looking statements made by or on our behalf and the Company's operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Company’s operations and stock price performance.
For More Information Contact:
Curt Queyrouze, President and Chief Executive Officer
Phyllis Nomura, Chief Financial Officer and EVP
IRGroup@ourfirstfed.com
360-457-0461
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(1) The average loans receivable, net balances include nonaccrual loans.
(2) Interest earned on loans receivable includes net deferred (costs) fees of ($410,000) and $22,000 for the three months ended September 30, 2025 and 2024, respectively.
(3) Includes interest-earning deposits (cash) at other financial institutions.
(4) Cost of all deposits, including noninterest-bearing demand deposits, was 2.20% and 2.56% for the three months ended September 30, 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:
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