Mon, May 12, 8:20 PM (35 days ago)
### Summary of First Northwest Bancorp's Q1 2025 Financial Performance **Company Overview:** First Northwest Bancorp (FNWB) is a Washington-based bank holding company engaged in banking activities through its subsidiary, First Fed Bank. The company focuses on lending, deposit, and money movement services in Western Washington State. **Financial Health:** - **Total Assets:** $2.17 billion, a 2.7% decrease from Q4 2024. - **Cash and Cash Equivalents:** $70.3 million, a 2.9% decrease from Q4 2024. - **Investment Securities:** $315.4 million, a 7.3% decrease from Q4 2024. - **Loans Receivable:** $1.64 billion, a 2.2% decrease from Q4 2024. - **Deposits:** $1.67 billion, a 1.3% decrease from Q4 2024. - **Borrowings:** $260.0 million, a 10.3% decrease from Q4 2024. - **Shareholders' Equity:** $146.5 million, a 4.8% decrease from Q4 2024. **Performance Metrics:** - **Net Interest Income:** $13.8 million, a 0.4% decrease from Q4 2024. - **Provision for Credit Losses:** $7.8 million, a significant increase from $1.2 million in Q4 2024. - **Noninterest Income:** $3.8 million, a 72.6% increase from Q4 2024. - **Noninterest Expense:** $20.0 million, a 39.8% increase from Q4 2024. - **Net Loss:** $9.0 million, compared to a net income of $396,000 in Q4 2024. **Earnings Changes:** - **Net Interest Margin:** 2.76%, unchanged from Q4 2024. - **Return on Assets:** Negative due to the net loss. - **Return on Equity:** Negative due to the net loss. **Quarterly Performance Discussion:** - **Loan Portfolio:** Decreases in commercial business loans and construction loans were partially offset by increases in multi-family and auto loans. - **Deposit Portfolio:** Shifts in deposit mix from savings accounts to money market accounts and CDs. - **Credit Quality:** Increase in provision for credit losses due to underlying collateral deficiencies and qualitative factor adjustments. **Trends and Uncertainties:** - **Economic Conditions:** Mild deterioration in GDP and unemployment estimates. - **Interest Rates:** Impact on loan yields and deposit costs. - **Regulatory Environment:** Changes in Community Reinvestment Act (CRA) regulations. **Future Operations Impact:** - **Liquidity Management:** Focus on managing liquidity through deposit inflows, loan repayments, and borrowings. - **Capital Resources:** Maintaining regulatory capital requirements and managing share repurchases. - **Risk Management:** Monitoring credit risk and adjusting lending strategies. **Conclusion:** First Northwest Bancorp faced challenges in Q1 2025, including a significant increase in provision for credit losses and higher noninterest expenses. The company is focusing on managing liquidity, maintaining capital resources, and adjusting lending strategies to navigate the current economic environment.