First Northwest Bancorp (FNWB)

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About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Federal Savings and Loan Association of Port Angeles that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. It accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. The company also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. It operates through ten full-service branches and a lending center in Seattle. The company was founded in 1923 and is based in Port Angeles, Washington. Address: 105 West 8th Street, Port Angeles, WA, United States, 98362

First Northwest Bancorp News and around…

Latest news about First Northwest Bancorp (FNWB) common stock and company :

Oversold Conditions For First Northwest Bancorp (FNWB)
10 Sep, 2021 FinancialContent

Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100..

Benzinga's Top Ratings Upgrades, Downgrades For September 1, 2021
01 Sep, 2021 FinancialContent

Upgrades For Chatham Lodging Trust (NYSE:CLDT), Barclays upgraded the previous rating of Equal-Weight to Overweight. In ...

First Northwest Bancorp (NASDAQ:FNWB) Looks Interesting, And It's About To Pay A Dividend
07 Aug, 2021 Yahoo! Finance

First Northwest Bancorp ( NASDAQ:FNWB ) is about to trade ex-dividend in the next four days. The ex-dividend date...

First Northwest Bancorp (NASDAQ:FNWB) Has Announced A Dividend Of US$0.06
01 Aug, 2021 Yahoo! Finance

The board of First Northwest Bancorp ( NASDAQ:FNWB ) has announced that it will pay a dividend of US$0.06 per share on...

First Northwest Bancorp Earns $3.0 Million, or $0.32 Per Diluted Share, in Second Quarter 2021; Highlighted by Strong Deposit and Loan Growth; Declares Quarterly Cash Dividend of $0.06 Per Share
28 Jul, 2021 FinancialContent
First Northwest Bancorp Appoints Gabriel Galanda to its Board of Directors
28 Jul, 2021 FinancialContent
First Northwest Bancorp Completes Purchase of Bellevue Branch
26 Jul, 2021 FinancialContent
Top-Rated Stocks: First Northwest Bancorp Sees Composite Rating Climb To 96
28 Jun, 2021 FinancialContent

On Monday, First Northwest Bancorp got an upgrade for its IBD SmartSelect Composite Rating from 94 to 96.

Here's What First Northwest Bancorp's (NASDAQ:FNWB) Shareholder Ownership Structure Looks Like
25 Jun, 2021 Yahoo! Finance

If you want to know who really controls First Northwest Bancorp ( NASDAQ:FNWB ), then you'll have to look at the makeup...

Stocks With Rising Composite Ratings: First Northwest Bancorp
21 Jun, 2021 FinancialContent

First Northwest Bancorp saw an improvement in its IBD SmartSelect Composite Rating Monday, from 93 to 96.

First Northwest Bancorp Joins Rank Of Stocks With 95-Plus Composite Rating
17 Jun, 2021 FinancialContent

On Thursday, First Northwest Bancorp got an upgrade for its IBD SmartSelect Composite Rating from 93 to 96.

First Northwest Bancorp Earns $3.1 Million, or $0.34 Per Diluted Share, in First Quarter 2021; Highlighted by Net Interest Margin Expansion and Strong Asset Quality; Declares Quarterly Cash Dividend o
28 Apr, 2021 FinancialContent
First Northwest Bancorp Earns $3.1 Million, or $0.34 Per Diluted Share, in First Quarter 2021; Highlighted by Net Interest Margin Expansion and Strong Asset Quality; Declares Quarterly Cash Dividend of $0.06 Per Share
28 Apr, 2021 Yahoo! Finance

PORT ANGELES, Wash., April 28, 2021 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB) (“Company”), the holding company for First Federal Savings and Loan Association of Port Angeles (“Bank” or "First Fed"), today reported that net income increased 257.6% to $3.1 million, or $0.34 per diluted share, for the first quarter of 2021, compared to $873,000, or $0.09 per diluted share, for the first quarter a year ago, and decreased compared to net income of $3.8 million, or $0.41 per diluted share, for the fourth quarter of 2020. First quarter results reflected strong year-over-year revenue growth, core deposit growth and net interest margin expansion. The decrease from the prior period was primarily due to lower gains on sale of one-to-four family mortgages and available for sale investments, partially offset by increased net interest income and a lower provision for loan losses. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.06 per common share outstanding, payable on May 28, 2021 to shareholders of record as of the close of business on May 14, 2021. “First Northwest Bancorp’s first quarter operating results were highlighted by strong revenue generation fueled by solid net interest income and core deposit growth,” stated Matthew P. Deines, President and CEO. “Despite ongoing pressures on loan and investment yields, net interest income increased $4.1 million, or 43.3%, over the first quarter of 2020, boosted by growth in earning assets, $362,000 in Paycheck Protection Program (“PPP”) income and a significant decline in cost of funds. We continue to generate organic commercial and consumer activity as we support our communities through an emerging recovery.” “We are actively participating in the SBA’s current round of PPP funding that began in January 2021 and concludes at the end of May,” said Deines. “This round of SBA funding offers PPP loans for companies that did not receive a PPP loan in 2020, and also “second draw” loans targeted at hard-hit businesses that have already used their initial PPP proceeds. We funded $32.4 million in second round PPP loans during the first quarter of 2021.” First Quarter 2021 Highlights (at or for the quarter ended March 31, 2021) First quarter net income was $3.1 million, compared to $3.8 million in the preceding quarter and $873,000 in the year ago quarter.Diluted earnings per share was $0.34, compared to $0.41 per share in the preceding quarter and $0.09 per share in the first quarter a year ago.Provision for loan losses was $500,000 in the first quarter, compared to $930,000 in the fourth quarter of 2020 and $1.3 million in the first quarter of 2020.Loans receivable increased 1.3% to $1.16 billion at March 31, 2021, compared to $1.14 billion at December 31, 2020, and increased 28.6% compared to $899.2 million a year ago, primarily due to growth in commercial real estate and commercial business loans, including PPP loans.Deposits increased 7.6% during the quarter and increased 34.9% from one year prior, to $1.43 billion at March 31, 2021, due to successful organic and wholesale deposit-gathering strategies, including significant growth in noninterest-bearing deposits, which increased 76.8% in the last twelve months. Deposit balances benefitted from a second round of PPP and additional Federal stimulus payments during the quarter.The cost of deposits for the first quarter decreased to 0.27% from 0.33% for fourth quarter 2020 and 0.85% in the first quarter of 2020.Gain on sale of mortgage loans was $1.3 million for the first quarter compared to $2.3 million in the previous quarter and $383,000 in the first quarter of 2020, reflecting a modest slowdown in activity from the fourth quarter of 2020 and strong year-over-year quarterly mortgage originations, including refinance activity.During the first quarter, the Company repurchased 135,837 shares of common stock at an average price of $15.89 per share for a total of $2.2 million, leaving 872,030 shares remaining under the 2020 Stock Repurchase Plan approved in October 2020. Recent Developments On March 22, 2021 the Company announced that First Fed has entered into an agreement with Sterling Bank and Trust of Southfield, Michigan to purchase its Bellevue, Washington branch, subject to applicable regulatory approvals and other customary closing conditions. The agreement includes the purchase of approximately $77.7 million in deposits as of the announcement date. First Fed expects to close the transaction by the end of the second quarter of 2021. On April 16, 2021, the Company issued 29,719 shares of the Company’s common stock under the terms of an Amended and Restated Joint Venture Agreement dated April 15, 2021 (the “Joint Venture Agreement”) with the Bank, POM Peace of Mind, Inc. (“POM”), and Quin Ventures, Inc. (“Quin”). The shares were issued to POM and had a value of approximately $500,000. Under the Joint Venture Agreement, the Company and POM have established Quin to develop a digital financial wellness platform that will offer personal financial services to the general public. Under a related Marketing and Banking Services Agreement, Quin will promote the services offered through the digital financial wellness platform and the Bank will provide banking services to the customers who utilize the platform. The Marketing and Banking Services Agreement sets forth the terms governing the parties’ commercial and economic commitments and responsibilities, including the fees to be paid by the Bank to fund the costs of acquiring customers and the distribution of interchange fees. The Company has also committed to extend $15.0 million to Quin under a capital financing agreement and related promissory note. Balance Sheet Review Total assets increased $81.9 million, or 5.0%, to $1.74 billion at March 31, 2021, compared to $1.65 billion at December 31, 2020, and increased $339.4 million, or 24.3%, compared to $1.40 billion at March 31, 2020. Cash and cash equivalents increased by $34.1 million, or 52.4%, to $99.3 million as of March 31, 2021, compared to $65.2 million as of December 31, 2020, as the result of gross proceeds of $40.0 million from the issuance of subordinated debt as well an increase in deposits of $101.3 million offset by increases to investment securities and loans receivable. Investment securities increased $29.2 million to $393.5 million at March 31, 2021, compared to $364.3 million three months earlier, and increased $76.0 million compared to $317.5 million at March 31, 2020. At March 31, 2021, municipal bonds totaled $132.5 million and comprised the largest portion of the investment portfolio at 33.7%. The estimated average life of the total investment securities portfolio was 7.5 years, and the average repricing term was approximately 5.3 years. “We continue to utilize the investment portfolio as a means to generate additional interest income,” said Geri Bullard, EVP/Chief Financial Officer. “We began adding to the investment portfolio a year ago as credit spreads widened, to deploy excess cash and prudently manage the balance sheet.” Securities consisted of the following at the dates indicated: March 31,2021 December 31,2020 March 31,2020 ThreeMonthChange One YearChange (In thousands) Available for Sale at Fair Value Municipal bonds $132,492 $127,862 $52,254 $4,630 $80,238 U.S. government and agency issued bonds (Agency bonds) 1,913 — — 1,913 1,913 U.S. government agency issued asset-backed securities (ABS agency) 65,910 63,820 42,125 2,090 23,785 Corporate issued asset-backed securities (ABS corporate) 17,505 29,280 34,073 (11,775) (16,568)Corporate issued debt securities (Corporate debt) 43,890 35,510 9,439 8,380 34,451 U.S. Small Business Administration securities (SBA) 17,566 18,564 25,363 (998) (7,797)Mortgage-backed securities: U.S. government agency issued mortgage-backed securities (MBS agency) 74,016 62,683 145,139 11,333 (71,123)Corporate issued mortgage-backed securities (MBS corporate) 40,203 26,577 9,127 13,626 31,076 Total securities available for sale $393,495 $364,296 $317,520 $29,199 $75,975 Net loans, excluding loans held for sale, increased $14.5 million, or 1.3%, to $1.16 billion at March 31, 2021, from $1.14 billion at December 31, 2020, and increased $257.3 million, or 28.6%, from $899.2 million a year ago. “Our lending team did an excellent job growing the loan portfolio despite a competitive operating environment, with total loans increasing 28.6% over the last twelve months,” said Randy Riffle, EVP/Chief Lending Officer. “Additionally, new PPP loan production from the SBA’s latest round contributed meaningfully to loan production, with $32.4 million in new PPP loans funded during the first quarter.” Commercial business loans decreased $17.2 million during the quarter as the result of a decrease of $41.6 million in the Northpointe Mortgage Participation program offset by an increase of $24.7 in PPP loans. The Company originated $66.3 million in residential mortgages during the quarter and sold $37.0 million, with an average gross margin on sale of mortgage loans of approximately 2.85%. This production compares to residential mortgage originations of $95.7 million in the preceding quarter with sales of $59.3 million, with an average gross margin of 3.01%. “Mortgage banking activity exceeded the first quarter of 2020, bucking seasonal trends, especially for refinances of existing mortgages as interest rates remain historically low,” said Kelly Liske, Chief Banking Officer. Loans receivable consisted of the following at the dates indicated: March 31,2021 December 31,2020 March 31,2020 ThreeMonthChange One YearChange (In thousands) Real Estate: One to four family $295,831 $309,828 $302,688 $(13,997) $(6,857)Multi-family 162,487 162,467 88,794 20 73,693 Commercial real estate 296,826 296,574 260,321 252 36,505 Construction and land 157,316 123,627 48,565 33,689 108,751 Total real estate loans 912,460 892,496 700,368 19,964 212,092 Consumer: Home equity 33,713 33,103 35,260 610 (1,547)Auto and other consumer 139,134 128,233 114,194 10,901 24,940 Total consumer loans 172,847 161,336 149,454 11,511 23,393 Commercial business 83,033 100,201 55,853 (17,168) 27,180 Total loans 1,168,340 1,154,033 905,675 14,307 262,665 Less: Net deferred loan fees 4,983 4,346 433 637 4,550 Premium on purchased loans, net (7,347) (6,129) (4,742) (1,218) (2,605)Allowance for loan losses 14,265 13,847 10,830 418 3,435 Total loans receivable, net $1,156,439 $1,141,969 $899,154 $14,470 $257,285 The sectors most heavily impacted by the pandemic include hospitality; restaurant and food services; and lessors of commercial real estate to these businesses. The table below presents selected information on loans to these industries as of March 31, 2021. Industry% of TotalLoanPortfolio Loan Balance Numberof Loans AverageLoan-to-Value (In thousands) Hospitality4.4% $50,332 14 60.6%Restaurant and food services0.2 1,907 6 64.8 Lessors of commercial real estate to hospitality, restaurant, and retail establishments4.3 48,103 27 52.3 The table below presents selected information on loans that remained on COVID-19 deferrals at the periods indicated. % of TotalLoan Portfolio Deferred LoanBalance Numberof Loans (In thousands) June 30, 202012.9% $128,420 297 September 30, 202013.9 149,542 183 December 31, 20200.2 2,349 19 March 31, 20210.7 8,052 4 Total deposits increased $101.3 million, or 7.6%, to $1.43 billion at March 31, 2021, compared to $1.33 billion at December 31, 2020, and increased $370.9 million, or 34.9%, when compared to $1.06 billion a year ago. Savings accounts increased 12.3% compared to a year ago to $186.2 million at March 31, 2021, and represented 13.0% of total deposits; transaction accounts increased 62.8% compared to a year ago to $466.1 million at March 31, 2021, and represented 32.5% of total deposits; money market accounts increased 95.6% compared to a year ago to $495.3 million, and represented 34.5% of total deposits; and certificates of deposit decreased 19.9% compared to a year ago to $287.2 million at quarter-end, and represented 20.0% of total deposits. “Deposit balances remain at record levels as we experienced growth with existing customers and developed new deposit relationships,” said Bullard. “We strategically increased noninterest-bearing and other core deposits to manage overall funding costs. We lowered our total cost of funds over the quarter by shifting our deposit mix more toward non-maturity deposits.” Total cost of funds improved to 0.32% for the first quarter of 2021 compared to 0.38% for the fourth quarter of 2020. Deposits consisted of the following at the dates indicated: March 31,2021 December 31,2020 March 31,2020 ThreeMonthChange One YearChange (In thousands)Savings $186,173 $164,434 $165,747 $21,739 $20,426 Transaction accounts 466,143 431,171 286,283 34,972 179,860 Money market accounts 495,265 429,143 253,198 66,122 242,067 Certificates of deposit 287,226 308,769 358,677 (21,543) (71,451)Total deposits $1,434,807 $1,333,517 $1,063,905 $101,290 $370,902 On March 25, 2021, the Company completed its private placement of $40.0 million of 3.75% fixed-to-floating rate subordinated notes due 2031 (the “Notes”) to certain qualified institutional buyers and accredited investors. The Notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. The Company intends to use the net proceeds of the offering for general corporate purposes and provided $20.0 million to the Bank as Tier 1 capital. “We believe this capital will serve us well as we continue to grow the Company and enhance our footprint and product offerings,” said Deines. Total shareholders' equity was $182.1 million at March 31, 2021, compared to $186.4 million three months earlier, and $167.2 million a year earlier. The decrease in equity was driven by reduced other comprehensive income of $5.2 million due to a decrease in the unrealized gain on investments of $3.5 million and a $1.7 million adjustment reflecting the recognition of prior service cost related to First Fed’s transfer out of a multiemployer pension plan into a single employer plan. The decrease in equity compared to the prior quarter was also a result of stock buybacks during the first quarter of 2021. Book value per common share was $17.86 at March 31, 2021, compared to $18.20 at December 31, 2020 and $16.02 at March 31, 2020. Operating Results In the first quarter of 2021, the Company generated a return on average assets ("ROAA") of 0.76%, and a return on average equity ("ROAE") of 6.70%, compared to 0.97% and 8.32%, respectively, in the fourth quarter of 2020, and 0.27% and 1.94%, respectively, in the first quarter a year ago. Total interest income increased to $14.6 million for the first quarter of 2021, compared to $14.0 million in the previous quarter and $12.0 million in the first quarter of 2020. Interest and fees on loans increased due to loan growth compared to the prior quarter. Quarter over quarter, the yield on average loans receivable increased by 2 basis points. Total interest expense was $1.2 million for the first quarter of 2021, compared to $1.3 million in the fourth quarter of 2020, and $2.6 million in the first quarter a year ago. The decrease in interest expense was due to the decline in the cost of total deposits to 27 basis points from 34 basis points in the prior quarter and 85 basis points the first quarter one year ago. Net interest income, before provision for loan losses, increased 6.4% during the quarter to $13.5 million, compared to $12.7 million for the preceding quarter, and increased 43.3% compared to $9.4 million in the first quarter a year ago. “The first round of PPP expired on August 8, 2020, and as of March 31, 2021, we received from the SBA proceeds on forgiven loans totaling $16.6 million. Approximately $177,000 of the income recognized during the first quarter was related to deferred fees associated with PPP loan payoffs, compared to $182,000 of the income related to deferred fees associated with PPP loan payoffs in the prior quarter,” added Riffle. While asset quality improved during the last twelve months, additional loan growth and the anticipated impact of the COVID-19 pandemic on local businesses resulted in a $500,000 provision for loan losses during the first quarter of 2021. This compares to a provision for loan losses of $930,000 for the preceding quarter, and a provision for loan losses of $1.3 million for the first quarter of 2020. The net interest margin expanded 2 basis point to 3.48% for the first quarter of 2021, compared to 3.46% for the fourth quarter of 2020, and increased 37 basis points compared to 3.11% for the first quarter in 2020. “Despite a challenging interest rate environment, our earning asset mix enhancements as well as substantially reducing our cost of funds helped increase our net interest margin over the past twelve months,” said Bullard. The yield on earning assets decreased 3 basis points to 3.78% for the first quarter of 2021, compared to 3.81% for the fourth quarter of 2020, and decreased 19 basis points from 3.97% for the first quarter of 2020. The decrease was due to lower yields on the investment portfolio and loans, which was offset by higher average loan balances. The yield on the loan portfolio increased to 4.43% for the first quarter of 2021, from 4.41% for the fourth quarter of 2020, and decreased from 4.52% for the first quarter of 2020 due to a decline in the overall rate environment. The cost of interest-bearing liabilities decreased 7 basis points to 0.40% for the first quarter of 2021, compared to 0.47% for the fourth quarter of 2020, and decreased 71 basis points from 1.11% for the first quarter in 2020. Noninterest income decreased 41.7% to $2.7 million for the first quarter of 2021 from $4.6 million for the fourth quarter of 2020 and increased 16.7% compared to $2.3 million for the first quarter a year ago. The first quarter of 2021 included a $1.3 million gain on sale of loans compared to a $2.3 million gain on sale of loans in the preceding quarter and a $383,000 gain on sale of loans in the first quarter a year ago. Noninterest income growth during the fourth quarter of 2020 also included a $912,000 gain on sale of investment securities. Loan and deposit service fees, the second largest component of noninterest income, totaled $837,000 for the first quarter 2021, compared to $940,000 for the preceding quarter and $881,000 for the first quarter a year ago. Noninterest expense totaled $12.1 million for the first quarter of 2021, compared to $11.7 million for the preceding quarter and $9.4 million for the first quarter a year ago. The quarterly increase reflects higher compensation expense, including salaries, commissions and benefits. Also impacting operating expenses for the first quarter was the implementation of new technology enhancements for loan and deposit account applications through the use of digital and mobile banking products. Capital Ratios and Credit Quality 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 March 31, 2021. Common Equity Tier 1 and Total Risk-Based Capital Ratios at March 31, 2021, were 15.1 % and 16.3%, respectively. The Company distributed $20.0 million to the Bank as Tier 1 capital. Nonperforming loans decreased to $2.1 million at March 31, 2021, from $2.3 million at December 31, 2020. The percentage of the allowance for loan losses to nonperforming loans increased to 668.1%, at March 31, 2021, from 609.2% at December 31, 2020, and 622.4% at March 31, 2020. Classified loans increased $6.6 million during the current quarter to $14.1 million at March 31, 2021, due to one substandard commercial real estate loan. The allowance for loan losses as a percentage of total loans was 1.2% at March 31, 2021, which was unchanged compared to three months and one year earlier. About the Company First Northwest is a bank holding company that primarily engages in the business activity of its subsidiary, First Fed. First Fed is a community-oriented financial institution serving Clallam, Jefferson, Kitsap, Whatcom, and King counties in Washington, through its Seattle lending center and ten full-service branches. Our business and operating strategy is focused on building sustainable earnings through hiring experienced bankers, geographic expansion, diversifying our loan product mix, expanding our deposit product offerings that deliver value-added solutions, enhancing existing services and digital service delivery channels, and enhancing our infrastructure to support the changing needs and expectations of our customers. FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share data) (Unaudited) March 31,2021 December 31,2020 March 31,2020 ThreeMonthChange One YearChange Assets Cash and due from banks $15,827 $13,508 $15,531 17.2% 1.9%Interest-bearing deposits in banks 83,444 51,647 91,633 61.6 -8.9 Investment securities available for sale, at fair value 393,495 364,296 317,520 8.0 23.9 Loans held for sale 4,037 3,753 4,531 7.6 -10.9 Loans receivable (net of allowance for loan losses of $14,265, $13,847, and $10,830) 1,156,439 1,141,969 899,154 1.3 28.6 Federal Home Loan Bank (FHLB) stock, at cost 3,997 5,977 7,581 -33.1 -47.3 Accrued interest receivable 6,251 6,966 4,124 -10.3 51.6 Premises and equipment, net 14,795 14,785 14,231 0.1 4.0 Mortgage servicing rights, net 2,309 2,120 843 8.9 173.9 Bank-owned life insurance, net 38,596 38,353 30,355 0.6 27.1 Prepaid expenses and other assets 17,103 10,975 11,436 55.8 49.6 Total assets $1,736,293 $1,654,349 $1,396,939 5.0% 24.3% Liabilities and Shareholders' Equity Deposits $1,434,807 $1,333,517 $1,063,905 7.6% 34.9%FHLB advances 50,000 109,977 150,021 -54.5 -66.7 Subordinated debt 39,310 — — 100.0 100.0 Accrued interest payable 84 53 194 58.5 -56.7 Accrued expenses and other liabilities 27,994 23,303 15,225 20.1 83.9 Advances from borrowers for taxes and insurance 2,000 1,116 443 79.2 351.5 Total liabilities 1,554,195 1,467,966 1,229,788 5.9 26.4 Shareholders' Equity Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding — — — n/a n/a Common stock, $0.01 par value, authorized 75,000,000 shares; issued and outstanding 10,195,644 at March 31, 2021; issued and outstanding 10,247,185 at December 31, 2020; and issued and outstanding 10,432,963 at March 31, 2020 102 102 104 0.0 -1.9 Additional paid-in capital 96,499 97,412 99,479 -0.9 -3.0 Retained earnings 94,363 92,657 85,549 1.8 10.3 Accumulated other comprehensive income (loss), net of tax 199 5,442 (8,256) -96.3 102.4 Unearned employee stock ownership plan (ESOP) shares (9,065) (9,230) (9,725) 1.8 6.8 Total shareholders' equity 182,098 186,383 167,151 -2.3 8.9 Total liabilities and shareholders' equity $1,736,293 $1,654,349 $1,396,939 5.0% 24.3% FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOME(Dollars in thousands, except per share data) (Unaudited) Quarter Ended March 31,2021 December 31,2020 March 31,2020 ThreeMonthChange One YearChange INTEREST INCOME Interest and fees on loans receivable $12,541 $11,894 $9,836 5.4% 27.5%Interest on mortgage-backed and related securities 464 437 959 6.2 -51.6 Interest on investment securities 1,570 1,581 1,069 -0.7 46.9 Interest on deposits in banks 13 9 68 44.4 -80.9 FHLB dividends 45 56 47 -19.6 -4.3 Total interest income 14,633 13,977 11,979 4.7 22.2 INTEREST EXPENSE Deposits 934 1,079 2,138 -13.4 -56.3 FHLB advances 191 221 434 -13.6 -56.0 Subordinated debt 25 — — 100.0 100.0 Total interest expense 1,150 1,300 2,572 -11.5 -55.3 Net interest income 13,483 12,677 9,407 6.4 43.3 PROVISION FOR LOAN LOSSES 500 930 1,266 -46.2 -60.5 Net interest income after provision for loan losses 12,983 11,747 8,141 10.5 59.5 NONINTEREST INCOME Loan and deposit service fees 837 940 881 -11.0 -5.0 Mortgage servicing fees, net of amortization 30 146 15 -79.5 100.0 Net gain on sale of loans 1,337 2,324 383 -42.5 249.1 Net gain on sale of investment securities — 912 605 -100.0 -100.0 Increase in cash surrender value of bank-owned life insurance 244 249 328 -2.0 -25.6 Other income 256 67 106 282.1 141.5 Total noninterest income 2,704 4,638 2,318 -41.7 16.7 NONINTEREST EXPENSE Compensation and benefits 7,295 7,193 5,361 1.4 36.1 Data processing 739 691 690 6.9 7.1 Occupancy and equipment 1,623 1,663 1,351 -2.4 20.1 Supplies, postage, and telephone 242 236 211 2.5 14.7 Regulatory assessments and state taxes 261 271 174 -3.7 50.0 Advertising 445 572 272 -22.2 63.6 Professional fees 522 408 400 27.9 30.5 FDIC insurance premium 148 89 — 66.3 100.0 FHLB prepayment penalty — — 210 n/a -100.0 Other 819 596 713 37.4 14.9 Total noninterest expense 12,094 11,719 9,382 3.2 28.9 INCOME BEFORE PROVISION FOR INCOME TAXES 3,593 4,666 1,077 -23.0 233.6 PROVISION FOR INCOME TAXES 473 850 204 -44.4 131.9 NET INCOME $3,120 $3,816 $873 -18.2% 257.4% Basic and diluted earnings per common share $0.34 $0.41 $0.09 -17.1% 277.8% FIRST NORTHWEST BANCORP AND SUBSIDIARYSelected Financial Ratios and Other Data(Unaudited) As of or For the Quarter Ended March 31,2021 December 31,2020 September 30,2020 June 30,2020 March 31,2020Performance ratios: (1) Return on average assets 0.76% 0.97% 0.99% 0.56% 0.27%Return on average equity 6.70 8.32 8.22 4.60 1.94 Average interest rate spread 3.38 3.35 3.22 2.90 2.86 Net interest margin (2) 3.48 3.46 3.36 3.10 3.11 Efficiency ratio (3) 74.7 67.7 60.9 72.3 80.0 Average interest-earning assets to average interest-bearing liabilities 134.6 131.7 130.9 129.5 130.1 Book value per common share $17.86 $18.20 $17.65 $17.07 $16.02 Asset quality ratios: Nonperforming assets to total assets at end of period (4) 0.1% 0.1% 0.2% 0.2% 0.2%Nonperforming loans to total loans (5) 0.2 0.2 0.3 0.3 0.2 Allowance for loan losses to nonperforming loans (5) 668.1 609.2 419.9 360.8 622.4 Allowance for loan losses to total loans 1.2 1.2 1.2 1.2 1.2 Net charge-offs to average outstanding loans — — — — — Capital ratios (First Fed): Tier 1 leverage 11.2% 10.3% 10.5% 10.9% 11.8%Common equity Tier 1 capital 15.1 13.4 14.7 15.1 16.8 Tier 1 risk-based 15.1 13.4 14.7 15.1 16.8 Total risk-based 16.3 14.6 16.0 16.4 18.1 Other Information: Average total assets $1,645,806 $1,567,521 $1,488,723 $1,401,500 $1,287,529 Average total loans 1,144,230 1,089,505 1,009,210 938,646 876,135 Average interest-earning assets 1,549,316 1,466,103 1,401,090 1,305,437 1,208,314 Average noninterest-bearing deposits 283,204 245,024 218,615 196,698 159,214 Average interest-bearing deposits 1,092,114 1,032,608 1,009,041 936,968 849,196 Average interest-bearing liabilities 58,629 80,731 61,244 71,170 79,659 Average equity 186,171 183,424 178,887 172,009 179,614 Average shares - basic 9,094,354 9,214,965 9,257,252 9,373,253 9,624,727 Average shares - diluted 9,185,725 9,258,109 9,263,975 9,408,123 9,676,377 (1) Performance ratios are annualized, where appropriate.(2) Net interest income divided by average interest-earning assets.(3) Total noninterest expense as a percentage of net interest income and total other noninterest income.(4) 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.(5) Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. Contact:Matthew P. Deines, President and Chief Executive OfficerGeri Bullard, EVP and Chief Financial OfficerFirst Northwest Bancorp360-457-0461

First Northwest Bancorp Completes Private Placement of $40.0 Million of Subordinated Notes
25 Mar, 2021 FinancialContent
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23 Mar, 2021 Yahoo! Finance

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First Northwest Bancorp Announces Purchase of Bellevue, WA Branch
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KBRA Assigns Ratings to First Northwest Bancorp
16 Mar, 2021 FinancialContent

Kroll Bond Rating Agency (KBRA) assigns a senior unsecured debt rating of BBB, a subordinated debt rating of BBB-, and a short-term debt rating of K3 for Port Angeles, Washington-based First Northwest Bancorp (NASDAQ: FNWB) (“the company”). In addition, KBRA assigns deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2 for the subsidiary bank, First Federal Savings and Loan Association of Port Angeles. The Outlook for all long-term ratings is Stable.

First Northwest Bancorp Sees Composite Rating Improve To 96
12 Feb, 2021 FinancialContent

First Northwest Bancorp saw its IBD SmartSelect Composite Rating jump to 96 Friday, up from 94 the day before.

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First Northwest Bancorp Earns Record $3.8 Million, or $0.41 Per Diluted Share, in Fourth Quarter 2020 and a Record $10.3 Million, or $1.10 Per Diluted Share, for the Year; Results Highlight Net Intere
28 Jan, 2021 FinancialContent
First Northwest Bancorp Earns Record $3.8 Million, or $0.41 Per Diluted Share, in Fourth Quarter 2020 and a Record $10.3 Million, or $1.10 Per Diluted Share, for the Year; Results Highlight Net Interest Margin Expansion and Substantial Loan and Core Deposit Growth; Declares Quarterly Cash Dividend of $0.06 Per Share
28 Jan, 2021 Yahoo! Finance

PORT ANGELES, Wash., Jan. 28, 2021 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB) (“Company”), the holding company for First Federal Savings and Loan Association of Port Angeles (“Bank” or "First Federal"), today reported net income increased 72.0% to $3.8 million, or $0.41 per diluted share, for the fourth quarter of 2020, compared to $2.2 million, or $0.23 per diluted share, for the fourth quarter a year ago, an increase of 3.8% compared to $3.7 million, or $0.40 per diluted share, for the third quarter of 2020. Fourth quarter results reflected strong loan and deposit growth, net interest margin expansion and improved efficiency. For the year 2020, net income increased 14.7% to a record $10.3 million, or $1.10 per diluted share, compared to $9.0 million, or $0.91 per diluted share, for 2019. The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.06 per common share outstanding, payable on February 26, 2021 to shareholders of record as of the close of business on February 12, 2021. “First Northwest Bancorp produced record results for the fourth quarter and the year, with strong top line revenue growth, double digit loan and deposit growth and an improving net interest margin,” stated Matthew P. Deines, President and CEO. “Despite a difficult operating environment created by pandemic-related economic challenges, we made progress in several areas of the business, as we continued to support our customers, communities and employees.”The sectors most heavily impacted by the pandemic include hospitality; restaurant and food services; and lessors of commercial real estate to these businesses. At December 31, 2020, the Company’s exposure as a percentage of the total loan portfolio to these industries was 4.44%, 0.17%, and 4.41%, respectively. “We participated in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) beginning in April and ending in August, 2020, assisting approximately 515 customers who received $32.2 million in PPP funding, and we are participating in the SBA’s new round of PPP funding that began earlier this month,” said Deines. “This next round of SBA funding offers new PPP loans for companies that did not receive a PPP loan in 2020, and also "second draw" loans targeted at hard-hit businesses that have already used their initial PPP proceeds. Now more than ever, we are here for our customers and communities.” “We were also successful participating in the Federal Reserve’s Main Street Lending Program,” said Deines. “As of year-end, we assisted approximately 20 customers receive $115.1 million in loans under the program. We were among the top banks in Washington State in terms Main Street Loans funded in both dollars and count.”Under the Main Street Lending Program, the Federal Reserve purchased loans that the bank makes to small and mid-sized businesses, with the Federal Reserve purchasing 95% of each loan. The program, which became operational in early July, was designed to keep credit flowing to small and mid-sized businesses that were in good financial standing before the onset of the COVID-19 pandemic, but which came under extreme stress due to stay-at-home and business closure orders from state and local governments. “In addition to the SBA’s PPP and the Federal Reserve’s Main Street Lending Program, we implemented additional programs to support our customers experiencing financial hardship as a result of the pandemic. These assistances included payment forbearance agreements with some customers for periods of up to six months. We deferred payment on 357 loans totaling $177.6 million through December 31, 2020. As of December 31, 2020, the deferral period had ended and payments voluntarily resumed for approximately 94.7% of these loans, of which 93.8% have resumed normal payments. Only 2.2% requested a second deferral period,” added Deines. The table below presents selected information on loans that remained on COVID-19 deferrals at the periods indicated. % of TotalLoan Portfolio Deferred LoanBalance Numberof Loans (In thousands) June 30, 202012.9% $128,420 297September 30, 202013.9 149,542 183December 31, 20200.2 2,349 19 Fourth Quarter 2020 Highlights (at or for the quarter ended December 31, 2020) Fourth quarter net income increased to $3.8 million, compared to $3.7 million in the preceding quarter and $2.2 million in the year ago quarter.Diluted earnings per share was $0.41, up from $0.40 per share in the preceding quarter and $0.23 per share compared to the fourth quarter a year ago.Provision for loan losses was $930,000 in the fourth quarter, compared to $1.4 million in the third quarter of 2020 and $249,000 in the fourth quarter of 2019.Loans receivable increased 7.6% to $1.14 billion at December 31, 2020, compared to $1.06 billion at September 30, 2020, and increased 30.0% compared to $878.4 million a year ago, primarily due to growth in commercial real estate and commercial business loans, including PPP loans.Deposits increased 6.3% during the quarter and increased 33.1% from one year prior, to $1.33 billion at December 31, 2020, due to successful organic and wholesale deposit-gathering strategies, including significant growth in noninterest-bearing deposits, which increased 71.4 % in 2020.The cost of deposits for the fourth quarter decreased to 0.33% from 0.45% for third quarter 2020 and 0.77% in the fourth quarter of 2019.Gain on sale of mortgage loans was $2.3 million for the fourth quarter compared to $1.7 million in the previous quarter and $247,000 in the fourth quarter of 2019 reflecting strong quarterly mortgage originations, including refinance activity.During the fourth quarter, the Company repurchased 15,553 shares of common stock at an average price of $15.67 per share for a total of $244,000, leaving 1,007,867 shares remaining under the 2020 Stock Repurchase Plan approved in October 2020. Balance Sheet Review Total assets increased $89.7 million, or 5.7%, to $1.65 billion, at December 31, 2020, compared to $1.56 billion at September 30, 2020, and increased $347.0 million, or 26.5%, compared to $1.31 billion, at December 31, 2019.Investment securities decreased $4.8 million to $364.3 million, at December 31, 2020, compared to $369.1 million three months earlier and increased $48.7 million compared to $315.6 million, at December 31, 2019. At December 31, 2020, municipal bonds totaled $127.9 million and comprised the largest portion of the investment portfolio at 35.1%. The estimated average life of the total investment securities portfolio was 7.3 years, and the average repricing term was approximately 4.9 years.“We continue to utilize the investment portfolio for liquidity and interest income generation,” said Geri Bullard, EVP/Chief Financial Officer. “We began adding to the investment portfolio in the second quarter as deposits increased in the early stages of the pandemic and credit spreads widened, creating more desirable opportunities.”Securities consisted of the following at the dates indicated: December 31,2020 September 30,2020 December 31,2019 Three MonthChange One YearChange (In thousands) Available for Sale at Fair Value Municipal bonds $127,862 $97,143 $39,282 $30,719 $88,580 U.S. government agency issued asset-backed securities (ABS agency) 63,820 73,618 28,858 (9,798) 34,962 Corporate issued asset-backed securities (ABS corporate) 29,280 32,747 40,855 (3,467) (11,575)Corporate issued debt securities (Corporate debt) 35,510 33,230 9,643 2,280 25,867 U.S. Small Business Administration securities (SBA) 18,564 23,864 28,459 (5,300) (9,895)Mortgage-backed securities: U.S. government agency issued mortgage-backed securities (MBS agency) 62,683 92,402 160,167 (29,719) (97,484)Corporate issued mortgage-backed securities (MBS corporate) 26,577 16,107 8,316 10,470 18,261 Total securities available for sale $364,296 $369,111 $315,580 $(4,815) $48,716 Total loans, excluding loans held for sale, increased $81.2 million, or 7.6%, to $1.14 billion at December 31, 2020, from $1.06 billion at September 30, 2020, and increased $263.5 million, or 30.0%, from $878.4 million a year ago. “The collective efforts of our lending team during the year resulted in significant increases in balances, with total loans increasing 30.6% during the year, and total loans, excluding PPP loans increasing 28.0% during the year,” said Randy Riffle, EVP/Chief Lending Officer. “Additionally, PPP loans helped fuel loan production, with $32.2 million in total PPP loans funded in 2020. The first round of PPP expired on August 8, 2020 and as of year-end, we had submitted 171 forgiveness applications to the SBA totaling $13.5 million and received payment from the SBA for 114 borrowers. Approximately $182,000 of the income recognized during the fourth quarter was related to deferred fees associated with PPP loan payoffs.”The Company originated $95.7 million in residential mortgages during the quarter and sold $59.3 million, with an average gross margin on sale of mortgage loans of approximately 3.01%. This production compares to residential mortgage originations of $41.1 million in the preceding quarter with sales of $48.0 million. “The activity in the mortgage market continued to exceed historical volumes again during the fourth quarter of 2020, especially for refinances of existing mortgages as interest rates remain at historically low levels,” said Kelly Liske, Chief Banking Officer. Loans receivable consisted of the following at the dates indicated: December 31,2020 September 30,2020 December 31,2019 Three MonthChange One YearChange (In thousands) Real Estate: One to four family $309,828 $317,755 $306,014 $(7,927) $3,814 Multi-family 162,467 127,569 96,098 34,898 66,369 Commercial real estate 296,574 283,390 255,722 13,184 40,852 Construction and land 123,627 75,204 37,187 48,423 86,440 Total real estate loans 892,496 803,918 695,021 88,578 197,475 Consumer: Home equity 33,103 34,120 35,046 (1,017) (1,943)Auto and other consumer 128,233 111,782 112,119 16,451 16,114 Total consumer loans 161,336 145,902 147,165 15,434 14,171 Commercial business 100,201 123,036 41,571 (22,835) 58,630 Total loans 1,154,033 1,072,856 883,757 81,177 270,276 Less: Net deferred loan fees 4,346 2,628 206 1,718 4,140 Premium on purchased loans, net (6,129) (4,196) (4,514) (1,933) (1,615)Allowance for loan losses 13,847 13,007 9,628 840 4,219 Total loans receivable, net $1,141,969 $1,061,417 $878,437 $80,552 $263,532 The Company continues to monitor the sectors that have been most heavily impacted by the COVID-19 pandemic. The table below presents selected information on loans to these industries as of December 31, 2020. Industry% of TotalLoan Portfolio Loan Balance Numberof Loans Average Loan-to-Value (In thousands) Hospitality4.4% $49,181 15 61.4%Restaurant and food services0.2 1,915 6 64.9 Lessors of commercial real estate to hospitality, restaurant, and retail establishments4.4 48,894 27 51.02 Total deposits increased $79.1 million, or 6.3%, to $1.33 billion at December 31, 2020, compared to $1.25 billion at September 30, 2020 and increased $331.9 million, or 33.1%, when compared to $1.00 billion a year ago. Savings accounts decreased 2.7% compared to a year ago, to $164.4 million at December 31, 2020, and represented 12.3% of total deposits; transaction accounts increased 55.9% compared to a year ago to $431.2 million at December 31, 2020, and account for 32.3% of total deposits; money market accounts increased 73.0% compared to a year ago to $429.1 million, and represented 32.2% of total deposits, and certificates of deposit remained unchanged compared to a year ago at $308.8 million at year-end, and represent 23.2% of total deposits.“Deposit balances remain at record levels, as consumers continue to build cash reserves,” said Bullard. “We are strategically increasing non-interest bearing and other core deposits to manage overall funding costs and interest rate risk. We held $93.9 million, or 7.0% of total deposits, in brokered CDs included in our balance of certificates of deposit at December 31, 2020, and $92.6 million, or 7.4% of total deposits in brokered CDs at September 30, 2020. The weighted-average cost of brokered CDs improved to 0.36% for the fourth quarter of 2020, compared to 0.51% for the previous quarter. We were able to lower our total cost of funds over the quarter by shifting our deposit mix toward noninterest-bearing and other core deposits.” Total cost of funds improved to 0.38% for the fourth quarter of 2020 compared to 0.50% for the third quarter of 2020.Deposits consisted of the following at the dates indicated: December 31,2020 September 30,2020 December 31,2019 Three MonthChange One YearChange (In thousands) Savings $164,434 $171,905 $168,983 $(7,471) $(4,549)Transaction accounts 431,171 390,867 276,496 40,304 154,675 Money market accounts 429,143 398,144 248,086 30,999 181,057 Certificates of deposit 308,769 293,540 308,080 15,229 689 Total deposits $1,333,517 $1,254,456 $1,001,645 $79,061 $331,872 Total shareholders' equity increased to $186.4 million at December 31, 2020, compared to $180.7 million three months earlier, and $176.9 million a year earlier. The quarter-over-quarter increase in equity was due to earnings of $3.8 million and an increase to other comprehensive income based on the improvement in the market value of the investment portfolio of $2.3 million, partially offset by the cost of stock buybacks. Book value per common share increased to $18.20 at December 31, 2020, compared to $17.65 at September 30, 2020 and $16.48 at December 31, 2019. Operating Results In the fourth quarter of 2020, the Company generated a return on average assets ("ROAA") of 0.97%, and a return on average equity ("ROAE") of 8.32%, compared to 0.99% and 8.22%, respectively, in the third quarter of 2020, and 0.71% and 4.99%, respectively, in the fourth quarter a year ago.Total interest income increased to $14.0 million for the fourth quarter of 2020, compared to $13.4 million in the previous quarter and $11.8 million in the fourth quarter of 2019. Interest and fees on loans increased due to loan growth which offset a small decrease in investment interest income. Quarter over quarter, the yield on total investment securities decreased 8 basis points while the yield on average loans receivable decreased by 4 basis points. Total interest expense was $1.3 million for the fourth quarter of 2020, compared to $1.6 million in the third quarter of 2020, and $2.6 million in the fourth quarter a year ago. The decrease in interest expense was due to the decline in the cost of deposits to 42 basis points from 45 basis points in the prior quarter and from 105 basis points the fourth quarter one year ago.Net interest income, before provision for loan losses, increased 7.8% during the quarter to $12.7 million, compared to $11.8 million for the preceding quarter and increased 38.4% compared to $9.2 million in the fourth quarter a year ago. For the year 2020, net interest income, before the provision for loan losses, increased 16.1% to $44.0 million, compared to $37.9 million for the year 2019. Due to loan growth and the COVID-19 pandemic and the related impact to the business environment, the Company recorded a $930,000 provision for loan losses during the fourth quarter of 2020. This compares to a provision for loan losses of $1.4 million for the preceding quarter, and a provision for loan losses of $249,000 for the fourth quarter of 2019. For the full year 2020, the provision for loan losses was $5.0 million, compared to $669,000 for 2019. The net interest margin expanded 10 basis point to 3.46% for the fourth quarter of 2020, compared to 3.36% for the third quarter of 2020, and increased 32 basis points compared to 3.14% for the fourth quarter in 2019. “Our improved earning asset mix as well as our lower cost of funds had a positive impact on our net interest margin again this quarter,” said Bullard. For the year 2020, the net interest margin was 3.27% compared to 3.20% in 2019.The yield on earning assets decreased 1 basis point to 3.81% for the fourth quarter of 2020, compared to 3.82% for the third quarter of 2020, and decreased from 4.03% for the fourth quarter in 2019. The decrease was due to lower yields on the investment portfolio and loans, which was offset by higher average loan balances. The yield on the loan portfolio decreased to 4.41% for the fourth quarter 2020, from 4.45% for the third quarter 2020, and decreased from 4.50% for the fourth quarter of 2019. The cost of interest-bearing liabilities decreased 13 basis points to 0.47% for the fourth quarter of 2020 compared to 0.60% for the third quarter of 2020 and decreased 70 basis points from 1.17% for the fourth quarter in 2019. “Over the past year we have been actively working on changing the mix of our funding profile and lowering our cost of deposits. We anticipate moderate additional cost save improvements in our certificate of deposit portfolio,” said Bullard.Noninterest income decreased 3.0% to $4.6 million for the fourth quarter 2020 from $4.8 million for the third quarter 2020 and increased 91.4% compared to $2.4 million for the fourth quarter in 2019. Fourth quarter of 2020 included a $2.3 million gain on sale of loans compared to a $1.7 million gain on sale of loans in the preceding quarter and a $247,000 gain on sale of loans in the fourth quarter a year ago. Noninterest income growth during the fourth quarter of 2020 was driven by increased mortgage refinance activity, which resulted in strong loan sale activity, as well as a gain on sale of investment securities of $912,000. Loan and deposit service fees totaled $940,000 for the fourth quarter 2020, compared to $868,000 for the preceding quarter and $994,000 for the fourth quarter a year ago. For the year 2020, noninterest income more than doubled to $15.8 million, compared to $7.0 million in 2019, reflecting substantial increases in gain on sale of investment securities and gain on sale of loans. Noninterest income also increased due to the higher cash surrender value of bank owned life insurance (BOLI) due to increased investment in BOLI, as well as a restructure of the existing BOLI policies into superior products. Noninterest expense totaled $11.7 million for the fourth quarter of 2020, compared to $10.1 million for the preceding quarter and $8.6 million for the fourth quarter a year ago. The quarterly increase reflects higher compensation expense, including salaries, commissions and benefits. For the year 2020, noninterest expense increased to $41.5 million, compared to $33.1 million in 2019, due to higher salary and benefit expenses, including employee production-related commission payments, increased advertising spending and increases in operational expenses associated with overall asset growth. Capital Ratios and Credit Quality Capital levels for both the Company and its operating bank, First Federal, remain in excess of applicable regulatory requirements and the Bank was categorized as "well-capitalized" at December 31, 2020. Common Equity Tier 1 and Total Risk-Based Capital Ratios at December 31, 2020 were 13.4% and 14.6%, respectively.Nonperforming loans decreased to $2.3 million at December 31, 2020, from $3.1 million at September 30, 2020. The percentage of the allowance for loan losses to nonperforming loans increased to 609.2%, at December 31, 2020, from 419.9% at September 30, 2020, and 536.1% at December 31, 2019. Classified loans increased $3.5 million during the current quarter to $7.5 million at December 31, 2020, reflecting a downgrade in a commercial real estate relationship. The allowance for loan losses as a percentage of total loans was 1.2% at December 31, 2020, compared to 1.2% at September 30, 2020, and 1.1% at December 31, 2019. About the Company First Northwest is a bank holding company which primarily engages in the business activity of its subsidiary, First Federal. First Federal is a community-oriented financial institution serving Clallam, Jefferson, Kitsap, Whatcom, and King counties in Washington, through its Seattle lending center and ten full-service branches. Our business and operating strategy is focused on building sustainable earnings through hiring experienced bankers, geographic expansion, and diversifying our loan product mix, expanding our deposit product offerings that deliver value-added solutions, enhancing existing services and digital service delivery channels, and enhancing our infrastructure to support the changing needs and expectations of our customers. FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share data) (Unaudited) December 31,2020 September 30,2020 December 31,2019 ThreeMonthChange OneYearChange Assets Cash and due from banks $13,508 $16,776 $13,519 -19.5% -0.1%Interest-bearing deposits in banks 51,647 35,303 35,220 46.3 46.6 Investment securities available for sale, at fair value 364,296 369,111 315,580 -1.3 15.4 Loans held for sale 3,753 4,754 503 -21.1 646.1 Loans receivable (net of allowance for loan losses of $13,847, $13,007, and $9,628) 1,141,969 1,061,417 878,437 7.6 30.0 Federal Home Loan Bank (FHLB) stock, at cost 5,977 5,944 6,034 0.6 -0.9 Accrued interest receivable 6,966 7,367 3,931 -5.4 77.2 Premises and equipment, net 14,785 14,737 14,342 0.3 3.1 Mortgage servicing rights, net 2,120 1,545 871 37.2 143.4 Bank-owned life insurance, net 38,353 38,104 30,027 0.7 27.7 Prepaid expenses and other assets 10,975 9,612 8,872 14.2 23.7 Total assets $1,654,349 $1,564,670 $1,307,336 5.7% 26.5% Liabilities and Shareholders' Equity Deposits $1,333,517 $1,254,456 $1,001,645 6.3% 33.1%Borrowings 109,977 109,150 112,930 0.8 -2.6 Accrued interest payable 53 51 373 3.9 -85.8 Accrued expenses and other liabilities 23,303 18,359 14,392 26.9 61.9 Advances from borrowers for taxes and insurance 1,116 1,986 1,145 -43.8 -2.5 Total liabilities 1,467,966 1,384,002 1,130,485 6.1 29.9 Shareholders' Equity Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding — — — n/a n/a Common stock, $0.01 par value, authorized 75,000,000 shares; issued and outstanding 10,247,185 at December 31, 2020; issued and outstanding 10,234,204 at September 30, 2020; and issued and outstanding 10,731,639 at December 31, 2019 102 102 107 0.0 -4.7 Additional paid-in capital 97,412 97,229 102,017 0.2 -4.5 Retained earnings 92,657 89,546 86,156 3.5 7.5 Accumulated other comprehensive loss, net of tax 5,442 3,186 (1,539) 70.8 453.6 Unearned employee stock ownership plan (ESOP) shares (9,230) (9,395) (9,890) 1.8 6.7 Total shareholders' equity 186,383 180,668 176,851 3.2 5.4 Total liabilities and shareholders' equity $1,654,349 $1,564,670 $1,307,336 5.7% 26.5% FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOME(Dollars in thousands, except per share data) (Unaudited) Quarter Ended December 31,2020 September 30,2020 December 31,2019 ThreeMonthChange OneYearChange INTEREST INCOME Interest and fees on loans receivable $11,894 $11,097 $9,505 7.2% 25.1%Interest on mortgage-backed and related securities 437 565 1,070 -22.7 -59.2 Interest on investment securities 1,581 1,603 1,065 -1.4 48.5 Interest on deposits in banks 9 9 54 0.0 -83.3 FHLB dividends 56 97 64 -42.3 -12.5 Total interest income 13,977 13,371 11,758 4.5 18.9 INTEREST EXPENSE Deposits 1,079 1,405 2,171 -23.2 -50.3 Borrowings 221 205 427 7.8 -48.2 Total interest expense 1,300 1,610 2,598 -19.3 -50.0 Net interest income 12,677 11,761 9,160 7.8 38.4 PROVISION FOR LOAN LOSSES 930 1,350 249 -31.1 273.5 Net interest income after provision for loan losses 11,747 10,411 8,911 12.8 31.8 NONINTEREST INCOME Loan and deposit service fees 940 868 994 8.3 -5.4 Mortgage servicing fees, net of amortization 146 148 33 -1.4 342.4 Net gain on sale of loans 2,324 1,725 247 34.7 840.9 Net gain on sale of investment securities 912 969 779 -5.9 17.1 Increase in cash surrender value of bank-owned life insurance 249 622 273 -60.0 -8.8 Other income 67 449 97 -85.1 -30.9 Total noninterest income 4,638 4,781 2,423 -3.0 91.4 NONINTEREST EXPENSE Compensation and benefits 7,193 6,070 4,902 18.5 46.7 Data processing 691 640 645 8.0 7.1 Occupancy and equipment 1,663 1,367 1,233 21.7 34.9 Supplies, postage, and telephone 236 254 205 -7.1 15.1 Regulatory assessments and state taxes 271 262 210 3.4 29.0 Advertising 572 285 512 100.7 11.7 Professional fees 408 361 214 13.0 90.7 FDIC insurance premium 89 86 — 3.5 100.0 FHLB prepayment penalty — — — n/a n/a Other 596 756 700 -21.2 -14.9 Total noninterest expense 11,719 10,081 8,621 16.2 35.9 INCOME BEFORE PROVISION FOR INCOME TAXES 4,666 5,111 2,713 -8.7 72.0 PROVISION FOR INCOME TAXES 850 1,436 495 -40.8 71.7 NET INCOME $3,816 $3,675 $2,218 3.8% 72.0% Basic and diluted earnings per common share $0.41 $0.40 $0.23 2.5% 78.3% FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED STATEMENTS OF INCOME(Dollars in thousands, except per share data) (Unaudited) Year Ended December 31, Percent 2020 2019 Change INTEREST INCOME Interest and fees on loans receivable $43,063 $40,166 7.2%Interest on mortgage-backed and related securities 2,701 4,606 -41.4 Interest on investment securities 5,569 3,965 40.5 Interest on deposits in banks 94 244 -61.5 FHLB dividends 255 332 -23.2 Total interest income 51,682 49,313 4.8 INTEREST EXPENSE Deposits 6,663 8,304 -19.8 Borrowings 1,061 3,144 -66.3 Total interest expense 7,724 11,448 -32.5 Net interest income 43,958 37,865 16.1 PROVISION FOR LOAN LOSSES 5,046 669 654.3 Net interest income after provision for loan losses 38,912 37,196 4.6 NONINTEREST INCOME Loan and deposit service fees 3,454 3,893 -11.3 Mortgage servicing fees, net of amortization 137 176 -22.2 Net gain on sale of loans 6,433 1,077 497.3 Net gain on sale of investment securities 3,147 836 276.4 Increase in cash surrender value of bank-owned life insurance 1,826 708 157.9 Other income 849 322 163.7 Total noninterest income 15,846 7,012 126.0 NONINTEREST EXPENSE Compensation and benefits 24,590 18,999 29.4 Data processing 2,790 2,623 6.4 Occupancy and equipment 5,726 4,642 23.4 Supplies, postage, and telephone 985 883 11.6 Regulatory assessments and state taxes 930 783 18.8 Advertising 1,506 1,081 39.3 Professional fees 1,523 1,121 35.9 FDIC insurance premium 245 82 198.8 FHLB prepayment penalty 210 344 -39.0 Other 2,959 2,559 15.6 Total noninterest expense 41,464 33,117 25.2 INCOME BEFORE PROVISION FOR INCOME TAXES 13,294 11,091 19.9 PROVISION FOR INCOME TAXES 2,954 2,077 42.2 NET INCOME $10,340 $9,014 14.7% Basic earnings per common share $1.11 $0.92 20.7%Diluted earnings per common share $1.10 $0.91 20.9% FIRST NORTHWEST BANCORP AND SUBSIDIARYSelected Financial Ratios and Other Data(Unaudited) As of or For the Quarter Ended December 31,2020 September 30,2020 June 30,2020 March 31,2020 December 31,2019 Performance ratios: (1) Return on average assets 0.97% 0.99% 0.56% 0.27% 0.71%Return on average equity 8.32 8.22 4.60 1.94 4.99 Average interest rate spread 3.35 3.22 2.90 2.86 2.86 Net interest margin (2) 3.46 3.36 3.10 3.11 3.14 Efficiency ratio (3) 67.7 60.9 72.3 80.0 74.4 Average interest-earning assets to average interest-bearing liabilities 131.7 130.9 129.5 130.1 131.8 Book value per common share $18.20 $17.65 $17.07 $16.02 $16.48 Asset quality ratios: Nonperforming assets to total assets at end of period (4) 0.1% 0.2% 0.2% 0.2% 0.2%Nonperforming loans to total loans (5) 0.2 0.3 0.3 0.2 0.2 Allowance for loan losses to nonperforming loans (5) 609.2 419.9 360.8 622.4 536.1 Allowance for loan losses to total loans 1.2 1.2 1.2 1.2 1.1 Net charge-offs to average outstanding loans — — — — — Capital ratios (First Federal): Tier 1 leverage 10.3% 10.5% 10.9% 11.8% 12.2%Common equity Tier 1 capital 13.4 14.7 15.1 16.8 17.5 Tier 1 risk-based 13.4 14.7 15.1 16.8 17.5 Total risk-based 14.6 16.0 16.4 18.1 18.7 Other Information: Average total assets $1,567,521 $1,488,723 $1,401,500 $1,287,529 $1,242,780 Average interest-earning assets 1,466,103 1,401,090 1,305,437 1,208,314 1,167,805 Average total loans 1,089,505 1,009,210 938,646 876,135 849,741 Average equity 183,424 178,887 172,009 179,614 177,759 Average deposits 1,277,632 1,227,656 1,133,665 1,008,410 985,788 (1)Performance ratios are annualized, where appropriate.(2)Net interest income divided by average interest-earning assets.(3)Total noninterest expense as a percentage of net interest income and total other noninterest income.(4)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.(5)Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. FIRST NORTHWEST BANCORP AND SUBSIDIARYSelected Financial Ratios and Other Data(Unaudited) (continued) As of or For the Year Ended December 31, 2020 2019 Performance ratios: (1) Return on average assets 0.72% 0.72%Return on average equity 5.79 5.13 Average interest rate spread 3.09 2.91 Net interest margin (2) 3.27 3.20 Efficiency ratio (3) 69.3 73.8 Average interest-earning assets to average interest-bearing liabilities 130.6 129.8 Book value per common share $18.20 $16.48 Asset quality ratios: Nonperforming assets to total assets at end of period (4) 0.1% 0.2%Nonperforming loans to total loans (5) 0.2 0.2 Allowance for loan losses to nonperforming loans (5) 609.2 536.1 Allowance for loan losses to total loans 1.2 1.1 Net charge-offs to average outstanding loans 0.1 0.1 Capital ratios (First Federal): Tier 1 leverage 10.3% 12.2%Common equity Tier 1 capital 13.4 17.5 Tier 1 risk-based 13.4 17.5 Total risk-based 14.6 18.7 Other Information: Average total assets $1,436,895 $1,255,581 Average interest-earning assets 1,345,770 1,181,923 Average total loans 978,799 870,696 Average equity 178,498 175,578 Average deposits 1,162,323 957,557 (1)Performance ratios are annualized, where appropriate.(2)Net interest income divided by average interest-earning assets.(3)Total noninterest expense as a percentage of net interest income and total other noninterest income.(4)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.(5)Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. Contact:Matthew P. Deines, President and Chief Executive OfficerGeri Bullard, EVP and Chief Financial OfficerFirst Northwest Bancorp360-457-0461

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First Northwest Bancorp Earns $3.7 Million, or $0.40 Per Diluted Share, in Third Quarter 2020; Net Interest Margin Expansion and Improved Efficiency Ratio Generate Record Earnings; Announces Share Rep
28 Oct, 2020 FinancialContent
First Northwest Bancorp Earns $3.7 Million, or $0.40 Per Diluted Share, in Third Quarter 2020; Net Interest Margin Expansion and Improved Efficiency Ratio Generate Record Earnings; Announces Share Repurchase Plan for 10% of Outstanding Shares
28 Oct, 2020 Yahoo! Finance

PORT ANGELES, Wash., Oct. 28, 2020 (GLOBE NEWSWIRE) -- First Northwest Bancorp (Nasdaq: FNWB) (“Company”), the holding company for First Federal Savings and Loan Association of Port Angeles (“Bank” or "First Federal"), today reported an increase in net income of 86.0% to $3.7 million, or $0.40 per diluted share, for the third quarter of 2020, compared to net income of $2.0 million, or $0.21 per diluted share, for the second quarter of 2020, and an increase of 46.4% compared to $2.5 million, or $0.25 per diluted share, for the third quarter of 2019. Third quarter results reflected strong loan and deposit growth, net interest margin expansion and improved efficiency. For the first nine months of 2020, net income was $6.5 million, or $0.69 per diluted share, compared to $6.8 million, or $0.68 per diluted share, for the first nine months of 2019.  The Company also announced that its Board of Directors increased the regular quarterly cash dividend by 20% to $0.06 per common share outstanding, payable on November 27, 2020, to shareholders of record as of the close of business on November 13, 2020. The Board of Directors also approved a share repurchase plan of 10% of outstanding shares.“In a quarter of pandemic-related economic challenges, we delivered excellent results, as we continue to support customers, communities and our employees. Our third quarter financial performance demonstrates the strength of our franchise, with pre-tax, pre-provision for loan losses income increasing 121% over the third quarter a year ago, led by significant mortgage refinance activity and a meaningful reduction in deposit cost of funds,” stated Matthew P. Deines, President and CEO. “Additionally, asset quality at quarter end remained solid, with few delinquencies in the loan portfolio. However, we continued to build our reserves in response to the pandemic and the economic impact on our customers and communities.”The sectors most heavily impacted include hospitality; restaurant and food services; and lessors of commercial real estate to hospitality, restaurant, and retail establishments. At September 30, 2020, the Company’s exposure as a percentage of the total loan portfolio to these industries was 4.9%, 0.2%, and 4.6%, respectively.“Our participation in the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) helped serve the needs of our customers and our local communities,” Deines continued. “Our role as a community bank not only allowed us to assist approximately 515 customers and originate $32.2 million in loans, but also added new relationships with strong future growth opportunities. The Bank is now processing applications for PPP loan forgiveness for customers. We expect the timing of such forgiveness will positively impact fourth quarter 2020 operating results for us, as well as all participating financial institutions.“In addition to PPP lending, we implemented additional programs to support our customers experiencing financial hardship as a result of the pandemic. These assistances included payment forbearance agreements with some customers for periods of up to six months. We deferred payment on 346 loans totaling $175.0 million through September 30, 2020. As of October 26, 2020, the deferral period had ended or payments voluntarily resumed for approximately 79% of these loans, of which 99% have resumed normal payments, with only 2% requesting a second deferral period,” added Deines.The table below presents selected information on loans that remained on COVID-19 deferrals at the periods indicated. % of Total Loan Portfolio Deferred Loan Balance Number of Loans  (In thousands) June 30, 202012.9% $128,420 297 September 30, 202013.9   149,542 183 October 26, 20208.3   87,343 74          Third Quarter 2020 Highlights (at or for the quarter ended September 30, 2020) * Third quarter net income increased to $3.7 million, compared to $2.0 million in the preceding quarter and $2.5 million in the year ago quarter. * Diluted earnings per share was $0.40, up from $0.21 per share in the preceding quarter and $0.25 per share when compared to the third quarter a year ago. * Provision for loan losses was $1.4 million in the third quarter, compared to $1.5 million in the second quarter of 2020 and a recapture of loan losses of $170,000 in the third quarter of 2019. * Loans receivable increased 7.6% to $1.06 billion at September 30, 2020, compared to $986.4 million at June 30, 2020, and increased 26.2% compared to $841.4 million a year ago, primarily due to growth in real estate and commercial business loans, including PPP loans. * Deposits increased 7.2% during the quarter and increased 29.2% from one year prior, to $1.25 billion at September 30, 2020, due to successful organic and wholesale deposit-gathering strategies, including significant growth in noninterest-bearing deposits. * The cost of deposits for the third quarter decreased to 0.45% from 0.72% for second quarter 2020 and 0.85% in the third quarter of 2019. * Gain on sale of mortgage loans was $1.7 million for the third quarter compared to $2.0 million in the previous quarter and $655,000 in the third quarter of 2019 reflecting strong quarterly mortgage originations, including refinance activity. * During the third quarter, the Company repurchased 141,793 shares of common stock at an average price of $11.72 per share for a total of $1.7 million under the 2019 Stock Repurchase Plan approved in December 2019. The 2019 Stock Repurchase Plan was completed in September 2020. * The Board of Directors approved a new stock repurchase plan of up to 1,023,420 shares, or approximately 10% of shares outstanding, to commence in November 2020. Balance Sheet ReviewTotal assets increased $85.8 million, or 5.8%, to $1.56 billion, at September 30, 2020, compared to $1.48 billion at June 30, 2020, and increased $314.4 million, or 25.1%, compared to $1.25 billion, at September 30, 2019.Investment securities increased $4.8 million to $369.1 million, at September 30, 2020, and increased $117.9 million compared to $251.2 million, at September 30, 2019. At September 30, 2020, municipal bonds totaled $97.1 million and comprised the largest portion of the investment portfolio at 26.3%. The estimated average life of the total investment securities portfolio was 6.7 years, and the average repricing term was approximately 4.4 years.Securities consisted of the following at the dates indicated:  September 30, 2020  June 30, 2020  September 30, 2019  Three Month Change  One Year Change    (In thousands)  Available for Sale at Fair Value                     Municipal bonds $97,143  $107,610  $10,406  $(10,467) $86,737  U.S. government agency issued asset-backed securities (ABS agency)  73,618   60,819   25,266   12,799   48,352  Corporate issued asset-backed securities (ABS corporate)  32,747   39,804   37,096   (7,057)  (4,349) Corporate issued debt securities (Corporate debt)  33,230   22,428   9,636   10,802   23,594  U.S. Small Business Administration securities (SBA)  23,864   23,547   29,815   317   (5,951) Mortgage-backed securities:                     U.S. government agency issued mortgage-backed securities (MBS agency)  92,402   102,647   129,726   (10,245)  (37,324) Corporate issued mortgage-backed securities (MBS corporate)  16,107   7,418   9,251   8,689   6,856  Total securities available for sale $369,111  $364,273  $251,196  $4,838  $117,915                        Held to Maturity at Amortized Cost                     Municipal bonds $—  $—  $7,041  $—  $(7,041) SBA  —   —   138   —   (138) Mortgage-backed securities:                     MBS Agency  —   —   30,470   —   (30,470) Total securities held to maturity $—  $—  $37,649  $—  $(37,649)                       “The company is focused on growing the loan portfolio and supporting this growth with core deposits and other low-cost funding sources,” said Geri Bullard, EVP/Chief Financial Officer. “Additionally, we continue to manage the investment portfolio for liquidity and generation of interest income.”Total loans, excluding loans held for sale, increased $75.1 million, or 7.6%, to $1.06 billion at September 30, 2020, from $986.4 million at June 30, 2020, and increased $220.2 million, or 26.2%, from $841.1 million a year ago. “The collective efforts of our lending team during the quarter resulted in significant increases in loan balances,” said Randy Riffle, EVP/Chief Lending Officer. “Additionally, participation in the SBA’s Paycheck Protection, up until the end of the program on August 8, 2020, also helped fuel loan production with $1.5 million in new PPP loans this quarter.”The Company originated $41.1 million in residential mortgages during the quarter and sold $48.0 million, with an average gross margin on sale of mortgage loans of approximately 2.76%. This production compares to residential mortgage originations of $56.6 million in the preceding quarter with sales of $61.1 million. “The activity in the mortgage market continued to exceed historical volumes in the third quarter of 2020, especially for refinances of existing mortgages at incredibly low rates,” said Kelly Liske, Chief Banking Officer. Loans receivable consisted of the following at the dates indicated:  September 30, 2020  June 30, 2020  September 30, 2019  Three Month Change  One Year Change    (In thousands)  Real Estate:                     One to four family $317,755  $325,349  $302,337  $(7,594) $15,418  Multi-family  127,569   103,279   62,173   24,290   65,396  Commercial real estate  283,390   267,233   254,058   16,157   29,332  Construction and land  75,204   58,153   64,954   17,051   10,250  Total real estate loans  803,918   754,014   683,522   49,904   120,396                        Consumer:                     Home equity  34,120   33,696   36,898   424   (2,778) Auto and other consumer  111,782   109,214   111,312   2,568   470  Total consumer loans  145,902   142,910   148,210   2,992   (2,308)                       Commercial business  123,036   99,477   14,325   23,559   108,711                        Total loans  1,072,856   996,401   846,057   76,455   226,799  Less:                     Net deferred loan fees  2,628   1,842   117   786   2,511  Premium on purchased loans, net  (4,196)  (3,901)  (4,649)  (295)  453  Allowance for loan losses  13,007   12,109   9,443   898   3,564  Total loans receivable, net $1,061,417  $986,351  $841,146  $75,066  $220,271                        The Company continues to monitor the sectors that have been most heavily impacted by the COVID-19 pandemic. The table below presents selected information on loans to these industries as of September 30, 2020.Industry% of Total Loan Portfolio Loan Balance Number of Loans Average Loan-to-Value  (In thousands) Hospitality4.9% $48,855 15 61.3% Restaurant and food services0.2   2,026 6 61.8  Lessors of commercial real estate to hospitality, restaurant, and retail establishments4.6   46,527 26 53.3              Total deposits increased $84.1 million, or 7.2%, to $1.25 billion at September 30, 2020, compared to $1.17 billion at June 30, 2020 and increased $283.8 million, or 29.2%, when compared to $970.7 million a year ago. Savings accounts decreased 1.1% compared to a year ago, to $171.9 million at September 30, 2020, and represented 13.7% of total deposits; transaction accounts increased 42.3% compared to a year ago to $390.9 million at September 30, 2020, and account for 31.2% of total deposits; money market accounts increased 63.7% compared to a year ago to $398.1 million, and represented 31.7% of total deposits, and certificates of deposit increased 5.2% compared to a year ago to $293.5 million at quarter-end, and represent 23.4% of total deposits.“Deposits were up during the quarter due to higher transaction and money market account balances,” said Bullard. “We continue to strategically utilize brokered certificates of deposit ("brokered CDs") as an additional funding source to manage overall funding costs and interest rate risk. We held $92.6 million, or 7.4% of total deposits, in brokered CDs included in our balance of certificates of deposit at September 30, 2020, and $86.3, or 7.4% of total deposits in brokered CDs at June 30, 2020. The weighted-average cost of brokered CDs was 0.51% for the third quarter of 2020, compared to 1.12% for the previous quarter. We were able to lower our total cost of funds over the quarter by enhancing our deposit mix toward noninterest-bearing and other core deposits as well as reducing the cost and level of wholesale funding.” Total cost of funds improved to 0.50% for the third quarter of 2020 compared to 0.74% for the second quarter of 2020.Deposits consisted of the following at the dates indicated:  September 30, 2020  June 30, 2020  September 30, 2019  Three Month Change  One Year Change    (In thousands)  Savings $171,905  $175,749  $173,786  $(3,844) $(1,881) Transaction accounts  390,867   339,151   274,660   51,716   116,207  Money market accounts  398,144   330,261   243,189   67,883   154,955  Certificates of deposit  293,540   325,164   279,065   (31,624)  14,475  Total deposits $1,254,456  $1,170,325  $970,700  $84,131  $283,756                        Total shareholders' equity increased to $180.7 million at September 30, 2020, compared to $176.3 million three months earlier, and $177.3 million a year earlier. The quarter-over-quarter increase in equity was due to earnings of $3.7 million and an increase to other comprehensive income based on the improvement in the market value of the investment portfolio offset by the cost of stock buybacks. Book value per common share increased to $17.65 at September 30, 2020, compared to $17.07 at June 30, 2020 and $16.42 at September 30, 2019.Operating ResultsIn the third quarter of 2020, the Company generated a return on average assets ("ROAA") of 0.99%, and a return on average equity ("ROAE") of 8.22%, compared to 0.56% and 4.60%, respectively, in the second quarter of 2020, and 0.81% and 5.65%, respectively, in the third quarter a year ago.Total interest income increased to $13.4 million for the third quarter of 2020, compared to $12.4 million in the previous quarter and $12.3 million in the third quarter of 2019. The increases are due to an increase in interest and fees on loans given the loan growth which offset a small decrease in investment interest income. Quarter over quarter, the yield on investment securities decreased 7 basis points while the yield on average loans receivable decreased by 5 basis points. Total interest expense was $1.6 million for the third quarter of 2020, compared to $2.2 million in the second quarter of 2020, and $2.8 million in the third quarter a year ago. The decrease in interest expense was due to the decline in the cost of deposits to 45 basis points from 72 basis points in the prior quarter and from 85 basis points the quarter one year ago.Net interest income, before provision for loan losses, increased 16.3% during the quarter to $11.8 million, compared to $10.1 million for the preceding quarter and increased 24.7% compared to $9.4 million in the third quarter a year ago. For the first nine months of 2020, net interest income, before the provision for loan losses, increased 9.0% to $31.1 million, compared to $28.7 million for the first nine months of 2019. Due to the COVID-19 pandemic and the related impact to the business environment, the Company recorded a $1.4 million provision for loan losses during the third quarter of 2020. This compares to a provision for loan losses of $1.5 million for the preceding quarter, and a credit to the provision for loan losses of $170,000 for the third quarter of 2019. Year-to-date, the provision for loan losses was $4.1 million, compared to $420,000 for the nine-month period one year earlier.The net interest margin expanded 26 basis point to 3.36% for the third quarter of 2020, compared to 3.10% for the second quarter of 2020, and increased 13 basis points compared to 3.23% for the third quarter in 2019. “Our net interest margin expansion during the quarter is a result of our efforts to improve our earning asset mix by increasing the level of our commercial loans as well as reducing our cost of funds,” said Bullard. For the first nine months of 2020, the net interest margin was 3.20% compared to 3.23% in the first nine months of 2019 due to reduced yields on loans and investments.The yield on earning assets increased 3 basis points to 3.82% for the third quarter of 2020, compared to 3.79% for the second quarter of 2020, and decreased from 4.20% for the third quarter in 2019. The decrease was due to lower yields on the investment portfolio and average loans, which was offset by higher average loan balances. The yield on the loan portfolio increased to 4.45% for the third quarter 2020, from 4.40% for the second quarter 2020, and decreased from 4.68% for the third quarter of 2019. The cost of interest-bearing liabilities decreased 29 basis points to 0.60% for the third quarter of 2020 compared to 0.89% for the second quarter of 2020 and decreased 67 basis points from 1.27% for the third quarter in 2019. “We are actively working on changing the mix of our funding profile and lowering our cost of deposits. As market rates approach zero, we anticipate our non-maturity deposit cost of funds will stabilize, however we do expect a further decrease in the cost of our certificate of deposit portfolio,” said Bullard.Noninterest income increased 16.4% to $4.8 million for the third quarter 2020 from $4.1 million for the second quarter 2020 and increased 149.7% compared to $1.9 million for the third quarter in 2019. Third quarter of 2020 included a $1.7 million gain on sale of loans compared to a $2.0 million gain on sale of loans in the preceding quarter and a $655,000 gain on sale of loans in the third quarter a year ago. Noninterest income growth during the third quarter of 2020 was driven by increased mortgage refinance activity, which resulted in strong loan sale activity, as well as a gain on sale of investment securities of $969,000. Loan and deposit service fees totaled $868,000 for the third quarter 2020, compared to $765,000 for the preceding quarter and $999,000 for the third quarter a year ago. For the first nine months of 2020, noninterest income increased 144.2% to $11.2 million, compared to $4.6 million in the first nine months of 2019, reflecting increases in gain on sale of investment securities, gain on sale of loans. Noninterest income also increased due to an increase in the cash surrender value of bank owned life insurance (BOLI) as a result of increased investment in BOLI, as well as a restructure of the existing BOLI policies into superior products.Noninterest expense totaled $10.1 million for the third quarter of 2020, compared to $10.3 million for the preceding quarter and $8.4 million for the third quarter a year ago. The quarterly decrease is attributable to lower data processing expense and training expense which was partially offset by higher compensation expense, including salaries, commissions and benefits. For the first nine months of 2020, noninterest expense increased to $29.7 million, compared to $24.5 million in the first nine months of 2019, due to higher salary and benefit expenses, including employee commission payments, increased advertising spending and increases in operational expenses associated with overall asset growth.Capital Ratios and Credit QualityCapital levels for both the Company and its operating bank, First Federal, remain in excess of applicable regulatory requirements and the Bank was categorized as "well-capitalized" at September 30, 2020. Common Equity Tier 1 and Total Risk-Based Capital Ratios at September 30, 2020 were 14.3% and 15.5%, respectively.Nonperforming loans decreased to $3.1 million at September 30, 2020, from $3.4 million at June 30, 2020. The percentage of the allowance for loan losses to nonperforming loans increased to 419.9%, at September 30, 2020, from 360.8% at June 30, 2020, and 714.3% at September 30, 2019. Classified loans decreased $1.1 million during the current quarter to $4.0 million at September 30, 2020, reflecting improvement in commercial business loans. The allowance for loan losses as a percentage of total loans was 1.2% at September 30, 2020, compared to 1.2% at June 30, 2020, and 1.1% at September 30, 2019. The ratio, excluding PPP loans was 1.25%.About the CompanyFirst Northwest is a bank holding company which primarily engages in the business activity of its subsidiary, First Federal. First Federal is a community-oriented financial institution serving Clallam, Jefferson, Kitsap, Whatcom, and King counties in Washington, through its Seattle lending center and ten full-service branches. Our business and operating strategy is focused on building sustainable earnings through hiring experienced bankers, geographic expansion, and diversifying our loan product mix, expanding our deposit product offerings that deliver value-added solutions, enhancing existing services and digital service delivery channels, and enhancing our infrastructure to support the changing needs and expectations of our customers.Forward-Looking StatementsCertain 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, and statements regarding our mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. 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 or range of factors including, but not limited to: increased competitive pressures; changes in the interest rate environment; the credit risks of lending activities; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K 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 2020 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.FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (Unaudited)  September 30, 2020  June 30, 2020  September 30, 2019  Three Month Change One Year Change Assets                                       Cash and due from banks $16,776  $16,346  $15,659   2.6%  7.1% Interest-bearing deposits in banks  35,303   33,242   40,822   6.2   (13.5) Investment securities available for sale, at fair value  369,111   364,273   251,196   1.3   46.9  Investment securities held to maturity, at amortized cost  —   —   37,649   n/a   (100.0) Loans held for sale  4,754   3,111   2,055   52.8   131.3  Loans receivable (net of allowance for loan losses of $13,007, $12,109, and $9,443)  1,061,417   986,351   841,146   7.6   26.2  Federal Home Loan Bank (FHLB) stock, at cost  5,944   6,074   4,931   (2.1)  20.5  Accrued interest receivable  7,367   5,360   3,726   37.4   97.7  Premises and equipment, net  14,737   14,188   14,443   3.9   2.0  Mortgage servicing rights, net  1,545   1,098   926   40.7   66.8  Bank-owned life insurance, net  38,104   37,482   29,754   1.7   28.1  Prepaid expenses and other assets  9,612   11,334   8,003   (15.2)  20.1                        Total assets $1,564,670  $1,478,859  $1,250,310   5.8%  25.1%                       Liabilities and Shareholders' Equity                                       Deposits $1,254,456  $1,170,325  $970,700   7.2%  29.2% Borrowings  109,150   112,379   85,324   -(2.9)  27.9  Accrued interest payable  51   253   262   (79.8)  (80.5) Accrued expenses and other liabilities  18,359   18,184   14,838   1.0   23.7  Advances from borrowers for taxes and insurance  1,986   1,403   1,876   41.6   5.9                        Total liabilities  1,384,002   1,302,544   1,073,000   6.3   29.0                        Shareholders' Equity                   Preferred stock, $0.01 par value, authorized 5,000,000 shares, no shares issued or outstanding  —   —   —   n/a   n/a  Common stock, $0.01 par value, authorized 75,000,000 shares; issued and outstanding 10,234,204 at September 30, 2020; issued and outstanding 10,326,226 at June 30, 2020; and issued and outstanding 10,800,932 at September 30, 2019  102   103   108   (1.0)  (5.6) Additional paid-in capital  97,229   98,421   102,786   (1.2)  (5.4) Retained earnings  89,546   86,633   85,143   3.4   5.2  Accumulated other comprehensive loss, net of tax  3,186   717   (672)  344.4   574.1  Unearned employee stock ownership plan (ESOP) shares  (9,395)  (9,559)  (10,055)  1.7   6.6                        Total shareholders' equity  180,668   176,315   177,310   2.5   1.9                        Total liabilities and shareholders' equity $1,564,670  $1,478,859  $1,250,310   5.8%  25.1%                       FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited)  Quarter Ended           September 30, 2020  June 30, 2020  September 30, 2019  Three Month Change  One Year Change INTEREST INCOME                    Interest and fees on loans receivable $11,097  $10,236  $10,096   8.4%  9.9% Interest on mortgage-backed and related securities  565   740   1,087   (23.6)  (48.0) Interest on investment securities  1,603   1,316   921   21.8   74.0  Interest on deposits in banks  9   8   65   12.5   (86.2) FHLB dividends  97   55   92   76.4   5.4  Total interest income  13,371   12,355   12,261   8.2   9.1                       INTEREST EXPENSE                    Deposits  1,405   2,041   2,141   (31.2)  -(34.4) Borrowings  205   201   691   2.0   -(70.3) Total interest expense  1,610   2,242   2,832   (28.2)  -(43.1)                      Net interest income  11,761   10,113   9,429   16.3   24.7                       PROVISION FOR LOAN LOSSES  1,350   1,500   (170)  (10.0)  894.1                       Net interest income after provision for loan losses  10,411   8,613   9,599   20.9   8.5                        NONINTEREST INCOME                    Loan and deposit service fees  868   765   999   13.5   (13.1) Mortgage servicing fees, net of amortization  148   (172)  44   186.0   236.4  Net gain on sale of loans  1,725   2,001   655   (13.8)  163.4  Net gain on sale of investment securities  969   661   0   46.6   100.0  Increase in cash surrender value of bank-owned life insurance  622   627   147   (0.8)  323.1  Other income  449   227   70   97.8   541.4  Total noninterest income  4,781   4,109   1,915   16.4   149.7                        NONINTEREST EXPENSE                    Compensation and benefits  6,070   5,966   4,771   1.7   27.2  Data processing  640   769   680   (16.8)  (5.9) Occupancy and equipment  1,367   1,345   1,161   1.6   17.7  Supplies, postage, and telephone  254   284   208   (10.6)  22.1  Regulatory assessments and state taxes  262   223   209   17.5   25.4  Advertising  285   377   197   (24.4)  44.7  Professional fees  361   354   278   2.0   29.9  FDIC insurance premium  86   70   (72)  22.9   219.4  FHLB prepayment penalty  —   —   344   n/a   (100.0) Other  756   894   648   (15.4)  16.7  Total noninterest expense  10,081   10,282   8,424   (2.0)  19.7                        INCOME BEFORE PROVISION FOR INCOME TAXES  5,111   2,440   3,090   109.5   65.4                       PROVISION FOR INCOME TAXES  1,436   464   580   209.5   147.6                        NET INCOME $3,675  $1,976  $2,510   86.0%  46.4%                                            Basic and diluted earnings per common share $0.40  $0.21  $0.25   90.5%  60.0%                       FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited)  Nine Months Ended September 30,  Percent    2020  2019  Change  INTEREST INCOME             Interest and fees on loans receivable $31,169  $30,661   1.7% Interest on mortgage-backed and related securities  2,264   3,536   (36.0) Interest on investment securities  3,988   2,900   37.5  Interest on deposits in banks  85   190   (55.3) FHLB dividends  199   268   (25.7) Total interest income  37,705   37,555   0.4                INTEREST EXPENSE             Deposits  5,584   6,133   (9.0) Borrowings  840   2,717   (69.1) Total interest expense  6,424   8,850   (27.4)               Net interest income  31,281   28,705   9.0                PROVISION FOR LOAN LOSSES  4,116   420   880.0                Net interest income after provision for loan losses  27,165   28,285   (4.0)               NONINTEREST INCOME             Loan and deposit service fees  2,514   2,899   (13.3) Mortgage servicing fees, net of amortization  (9)  143   (106.3) Net gain on sale of loans  4,109   830   395.1  Net gain on sale of investment securities  2,235   57   3,821.1  Increase in cash surrender value of bank-owned life insurance  1,577   435   262.5  Other income  782   225   247.6  Total noninterest income  11,208   4,589   144.2                NONINTEREST EXPENSE             Compensation and benefits  17,397   14,097   23.4  Data processing  2,099   1,978   6.1  Occupancy and equipment  4,063   3,409   19.2  Supplies, postage, and telephone  749   678   10.5  Regulatory assessments and state taxes  659   573   15.0  Advertising  934   569   64.1  Professional fees  1,115   907   22.9  FDIC insurance premium  156   82   90.2  FHLB prepayment penalty  210   344   (39.0) Other  2,363   1,859   27.1  Total noninterest expense  29,745   24,496   21.4                INCOME BEFORE PROVISION FOR INCOME TAXES  8,628   8,378   3.0                PROVISION FOR INCOME TAXES  2,104   1,582   33.0                NET INCOME $6,524  $6,796   (4.0)%                             Basic and diluted earnings per common share $0.69  $0.68   1.5%               FIRST NORTHWEST BANCORP AND SUBSIDIARY Selected Financial Ratios and Other Data (Unaudited)  As of or For the Quarter Ended    September 30, 2020  June 30, 2020  March 31, 2020  December 31, 2019  September 30, 2019  Performance ratios: (1)                     Return on average assets  0.99%  0.56%  0.27%  0.71%  0.81% Return on average equity  8.22   4.60   1.94   4.99   5.65  Average interest rate spread  3.22   2.90   2.86   2.86   2.93  Net interest margin (2)  3.36   3.10   3.11   3.14   3.23  Efficiency ratio (3)  60.9   72.3   80.0   74.4   74.3  Average interest-earning assets to average interest-bearing liabilities  130.9   129.5   130.1   131.8   130.5  Book value per common share $17.65  $17.07  $16.02  $16.48  $16.42                        Asset quality ratios:                     Nonperforming assets to total assets at end of period (4)  0.2%  0.2%  0.2%  0.2%  0.1% Nonperforming loans to total loans (5)  0.3   0.3   0.2   0.2   0.2  Allowance for loan losses to nonperforming loans (5)  419.9   360.8   622.4   536.1   714.3                        Allowance for loan losses to total loans  1.2   1.2   1.2   1.1   1.1  Net charge-offs to average outstanding loans  —   —   —   —   —                        Capital ratios (First Federal):                     Tier 1 leverage 10.5%  10.9%  11.8%  12.2%  12.0% Common equity Tier 1 capital 14.3   15.1   16.8   17.5   18.0                       Tier 1 risk-based 14.3   15.1   16.8   17.5   18.0  Total risk-based 15.5   16.4   18.1   18.7   19.1                        Other Information:                     Average total assets $1,488,723  $1,401,500  $1,287,529  $1,242,780  $1,241,014  Average interest-earning assets  1,401,090   1,305,437   1,208,314   1,167,805   1,167,353  Average total loans  1,009,210   938,646   876,135   849,741   867,647  Average equity  178,887   172,009   179,614   177,759   177,671  Average deposits  1,227,656   1,133,665   1,008,410   985,788   957,736  (1)Performance ratios are annualized, where appropriate. (2)Net interest income divided by average interest-earning assets. (3)Total noninterest expense as a percentage of net interest income and total noninterest income. (4)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. (5)Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due.     FIRST NORTHWEST BANCORP AND SUBSIDIARY Selected Financial Ratios and Other Data (Unaudited) (continued)  As of or For the Nine Months Ended September 30,    2020  2019  Performance ratios: (1)         Return on average assets  0.62%  0.72% Return on average equity  4.92   5.18  Average interest rate spread  3.00   2.94  Net interest margin (2)  3.20   3.23  Efficiency ratio (3)  70.0   73.6  Average interest-earning assets to average interest-bearing liabilities  130.2   129.1  Book value per common share $17.65  $16.42            Asset quality ratios:         Nonperforming assets to total assets at end of period (4)  0.2%  0.1% Nonperforming loans to total loans (5)  0.3   0.2  Allowance for loan losses to nonperforming loans (5)  419.9   714.3  Allowance for loan losses to total loans  1.2   1.1  Net charge-offs to average outstanding loans  (0.1)  0.1            Capital ratios (First Federal):         Tier 1 leverage 10.5%  12.0% Common equity Tier 1 capital 14.3   18.0  Tier 1 risk-based 14.3   18.0  Total risk-based 15.5  19.1            Other Information:         Average total assets $1,393,036  $1,259,847  Average interest-earning assets  1,305,366   1,186,628  Average total loans  941,627   877,681  Average equity  176,844   174,852  Average deposits  1,123,606   948,146  (1)Performance ratios are annualized, where appropriate. (2)Net interest income divided by average interest-earning assets. (3)Total noninterest expense as a percentage of net interest income and total noninterest income. (4)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. (5)Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due.     Contact: Matthew P. Deines, President and Chief Executive Officer Geri Bullard, EVP and Chief Financial Officer First Northwest Bancorp 360-457-0461

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