First Northwest Bancorp Announces Fourth Quarter 2025 Results

PORT ANGELES, Wash., Jan. 29, 2026 (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 $382,000 for the fourth quarter of 2025, compared to net income of $802,000 for the third quarter of 2025 and a net loss of $2.8 million for the fourth quarter of 2024. Basic and diluted income per share were $0.04 for the fourth quarter of 2025, compared to basic and diluted income per share of $0.09 for the third quarter of 2025 and basic and diluted loss per share of $0.32 for the fourth quarter of 2024.

Management Outlook:

"As we enter 2026, we are building on momentum that began in 2025," said Curt Queyrouze, President and Chief Executive Officer of First Northwest and First Fed. "Our focus is clear: to position First Fed as a high-performing bank by leveraging data to operate more efficiently, strengthening our core deposit base and generating high-quality, relationship-based loan growth. I am encouraged by the progress our team has made and believe we are well prepared for the year ahead. The First Fed team remains committed to serving our communities and delivering exceptional service."

Other Announcements:

First Fed will permanently close its Bellevue branch, located at 1100 Bellevue Way Northeast in Bellevue, Washington, on April 30, 2026. This decision reflects the Bank’s commitment to adapt to ongoing shifts in customer behavior toward digital banking services. "Customer preferences continue to evolve, and we are seeing that, for this location, the use of online and mobile banking services continues to become more prevalent than in-person visits," said Curt Queyrouze. "Closing this branch allows us to focus on streamlined delivery channels that are convenient, secure and bring innovative banking solutions to our markets." This closure is expected to reduce future annual operating expenses by approximately $900,000. First Fed purchased the Bellevue branch from Sterling Bank and Trust, FSB in July 2021. Bellevue branch customers will continue to have access to their accounts through the Bank's online and mobile platforms, ATM network and branches. First Fed remains committed to serving its communities and looks forward to continuing to provide exceptional banking experiences through multiple channels.

The Board of Directors of First Northwest did not declare a dividend for the current quarter. This decision reflects the Company's disciplined approach to capital management and its commitment to maintaining a strong balance sheet. The Board will continue to evaluate future dividend decisions in alignment with Company’s long-term strategic objectives.

Fourth Quarter Insights:

Other significant events:

Selected Quarterly Financial Ratios:

Adjusted Pre-tax, Pre-Provision Net Revenue (1)

Adjusted PPNR for the fourth quarter of 2025 increased $138,000 to $478,000, compared to $340,000 for the preceding quarter, and decreased $952,000 from $1.4 million in the fourth quarter one year ago.

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

The allowance for credit losses on loans ("ACLL") increased $784,000 to $17.0 million at December 31, 2025, from $16.2 million at September 30, 2025. The ACLL as a percentage of total loans was 1.04% at December 31, 2025, an increase from 1.00% at September 30, 2025, and a decrease from 1.21% one year earlier. A $466,000 provision expense for the quarter ended December 31, 2025, was the result of $318,000 in net recoveries, partially offset by a $636,000 increase in the overall pooled loan reserve, driven by increased loss factors applied to commercial real estate and commercial business loans, and increased reserves on individually analyzed loans totaling $151,000.

Nonperforming loans increased $9.2 million to $22.6 million at December 31, 2025, from $13.4 million at September 30, 2025. Current quarter activity included transition into nonaccrual status of a $6.3 million commercial real estate loan and four commercial business loans totaling $4.7 million. The recorded balances of the commercial business loans are fully supported by collateral and SBA guarantees. A $1.0 million charge-off on a commercial construction loan that was already on nonaccrual status partially offset the loans that transitioned into nonaccrual status during the quarter. ACLL to nonperforming loans decreased to 75% at December 31, 2025, from 121% at September 30, 2025, and increased from 67% at December 31, 2024. This ratio decreased primarily due to the higher balance of nonperforming loan balances compared to the preceding quarter.

Classified loans decreased $1.1 million to $22.8 million at December 31, 2025, from $23.9 million at September 30, 2025, primarily due to net recoveries on previously charged-off loans totaling $436,000 partially offset by downgrades of commercial business loans totaling $924,000 and other consumer loans totaling $429,000. Three collateral-dependent loans totaling $14.9 million account for 65% of the classified loan balance at December 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 the second largest of these collateral-dependent relationships.

Financial Condition and Capital

Investment securities decreased $12.3 million, or 4.4%, to $270.3 million at December 31, 2025, compared to $282.6 million three months earlier, and decreased $70.0 million compared to $340.3 million at December 31, 2024. Maturities totaling $8.8 million and regular principal payments totaling $5.9 million were partially offset by a $2.4 million reduction of net unrealized losses during the fourth quarter of 2025. The estimated average life of the securities portfolio was approximately 6.5 years at December 31, 2025, 6.9 years at the preceding quarter end and 6.9 years at the end of the fourth quarter of 2024. The effective duration of the portfolio was approximately 4.6 years at December 31, 2025, compared to 4.8 years at the preceding quarter end and 3.9 years at the end of the fourth quarter of 2024.

Net loans, excluding loans held for sale, increased $4.2 million, or 0.3%, to $1.6 billion at December 31, 2025, from $1.6 billion at September 30, 2025, and decreased $63.2 million, or 3.8%, from $1.7 billion one year prior. Construction loans that converted into fully amortizing loans during the quarter totaled $9.0 million. New loan funding totaling $102.6 million and draws on existing loans totaling $19.5 million outpaced loan payoffs of $78.1 million, regular payments of $36.8 million and charge-offs totaling $2.4 million.

Other changes to total assets during the quarter included a $2.2 million increase in the balance of FHLB stock required to be held. There was also a $1.7 million decrease in accrued interest receivable primarily due to interest payments received during the current quarter for maritime loans and investment securities.

Total deposits decreased $54.2 million to $1.6 billion at December 31, 2025, compared to $1.7 billion at September 30, 2025, and decreased $88.9 million compared to $1.7 billion one year prior. During the fourth quarter of 2025, total customer deposit balances decreased $36.4 million and brokered deposit balances decreased $17.9 million. The customer deposit mix shifted towards increased average savings account balances while average balances of all other customer accounts decreased. The rates paid on customer interest-bearing deposits decreased 10 basis points to 2.37% for the current quarter, compared to 2.47% for the third quarter of 2025. The deposit mix compared to December 31, 2024, reflects a shift in average balances of customer accounts to savings and money market accounts from demand deposit and CD accounts, with an overall $5.2 million increase to average customer balances. A $99.2 million decrease in the average balance of brokered CDs was the main driver for the year-over-year decrease in total deposits. Rates paid on interest-bearing deposit accounts decreased 53 basis points compared to the same quarter one year ago.

Total shareholders’ equity increased to $157.3 million at December 31, 2025, compared to $154.5 million three months earlier, due to an increase in the after-tax fair market values of the available-for-sale investment securities portfolio of $1.9 million and net income of $382,000. No shares of common stock were repurchased under the Company's April 2024 Stock Repurchase Plan (the "Repurchase Plan") during the quarter ended December 31, 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 December 31, 2025. Preliminary calculations of Common Equity Tier 1 and Total Risk-Based Capital Ratios at December 31, 2025, for the Bank were 12.5% and 13.6%, 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

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:

FIRST NORTHWEST BANCORP AND SUBSIDIARY

ADDITIONAL INFORMATION

(Dollars in thousands) (Unaudited)

Calculations Based on Tangible Common Equity:

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