First Northwest Bancorp Reports Second Quarter 2024 Financial Results
First Northwest Bancorp (Nasdaq: FNWB) reported its Q2 2024 financial results showing improved performance amid industry challenges. Net income surged to $1.4M from $0.4M in Q1 2024, but down from $1.8M in Q2 2023. Earnings per share were $0.16, up from $0.04 in Q1 2024. The company boosted its net interest margin to 2.77% from 2.76% in the previous quarter, ending a five-quarter decline. Key actions included a sale-leaseback transaction yielding a $7.9M gain, restructuring bank-owned life insurance (BOLI) policies, and selling $23.2M in lower-yielding securities. Non-real estate loans rose by 12% or $44M YTD, enhancing loan diversification. However, there was an increase in provision for credit losses to $4.2M due to issues with specific borrowers. A 9% workforce reduction is expected to save $1M quarterly starting Q4 2024. The board declared a quarterly cash dividend of $0.07 per share, payable on August 23, 2024.
First Northwest Bancorp (Nasdaq: FNWB) ha riportato i suoi risultati finanziari del Q2 2024, mostrando un miglioramento delle performance nonostante le sfide del settore. L'utile netto è aumentato a $1,4M rispetto a $0,4M nel Q1 2024, ma è in calo rispetto a $1,8M nel Q2 2023. L'utile per azione è stato di $0,16, in crescita rispetto a $0,04 nel Q1 2024. L'azienda ha incrementato il suo margine d'interesse netto al 2,77% dal 2,76% del trimestre precedente, ponendo fine a cinque trimestri di declino. Tra le azioni chiave intraprese vi è stata una transazione di vendita e affitto che ha generato un guadagno di $7,9M, la ristrutturazione delle polizze di assicurazione sulla vita possedute dalla banca (BOLI) e la vendita di $23,2M in titoli a basso rendimento. I prestiti non immobiliari sono aumentati del 12% o $44M da inizio anno, migliorando la diversificazione dei prestiti. Tuttavia, si è registrato un aumento della provvista per perdite su crediti a $4,2M a causa di problemi con specifici mutuatari. Si prevede che una riduzione della forza lavoro del 9% permetterà di risparmiare $1M trimestralmente a partire dal Q4 2024. Il consiglio ha dichiarato un dividendo in contante trimestrale di $0,07 per azione, che sarà pagabile il 23 agosto 2024.
First Northwest Bancorp (Nasdaq: FNWB) reportó sus resultados financieros del Q2 2024, mostrando un rendimiento mejorado en medio de los desafíos de la industria. El ingreso neto aumentó a $1.4M desde $0.4M en el Q1 2024, aunque disminuyó desde $1.8M en el Q2 2023. Las ganancias por acción fueron de $0.16, subiendo desde $0.04 en el Q1 2024. La compañía elevó su margen de interés neto al 2.77% desde 2.76% en el trimestre anterior, poniendo fin a cinco trimestres de declive. Las acciones clave incluyeron una transacción de venta y arrendamiento que generó una ganancia de $7.9M, la reestructuración de pólizas de seguro de vida propiedad del banco (BOLI), y la venta de $23.2M en valores de bajo rendimiento. Los préstamos no hipotecarios aumentaron un 12% o $44M en lo que va del año, mejorando la diversificación de préstamos. Sin embargo, hubo un aumento en la provisión para pérdidas de crédito a $4.2M debido a problemas con prestatarios específicos. Se espera que una reducción del 9% en la fuerza laboral ahorre $1M trimestralmente a partir del Q4 2024. La junta declaró un dividendo en efectivo trimestral de $0.07 por acción, pagadero el 23 de agosto de 2024.
퍼스트 노스웨스트 뱅코프 (Nasdaq: FNWB)는 2024년 2분기 재무 결과를 발표하며 업계의 도전 과제 속에서도 개선된 실적을 보여주었습니다. 순이익은 $1.4M으로 증가했으며, 이는 2024년 1분기 $0.4M에서 상승한 수치이나, 2023년 2분기 $1.8M보다는 감소한 모습입니다. 주당 순이익은 $0.16로, 2024년 1분기의 $0.04에서 상승했습니다. 이 회사는 순이자 마진을 2.76%에서 2.77%로 증가시켜 다섯 분기 연속 하락을 끝냈습니다. 주요 조치로는 $7.9M의 이익을 가져온 판매-임대 거래, 은행 소유 생명 보험(BOLI) 정책 재구성, 그리고 낮은 수익률의 증권을 $23.2M에 매각한 것입니다. 부동산이 아닌 대출은 올해 들어 12% 또는 $44M 증가하며 대출 다양화를 향상시켰습니다. 그러나 특정 차용인 문제로 인한 신용 손실 충당금도 $4.2M로 증가했습니다. 9%의 인력 감축이 2024년 4분기부터 분기마다 $1M을 절감할 것으로 예상됩니다. 이사회는 주당 $0.07의 분기 현금 배당금을 선언하였으며, 이는 2024년 8월 23일에 지급될 예정입니다.
First Northwest Bancorp (Nasdaq: FNWB) a publié ses résultats financiers du Q2 2024, montrant une performance améliorée au milieu des défis sectoriels. Le bénéfice net a grimpé à $1,4M contre $0,4M au Q1 2024, mais est en baisse par rapport à $1,8M au Q2 2023. Le bénéfice par action était de $0,16, en hausse par rapport à $0,04 au Q1 2024. L'entreprise a augmenté sa marge d'intérêt nette à 2,77% contre 2,76% au trimestre précédent, mettant fin à une baisse de cinq trimestres. Parmi les actions clés, on note une opération de vente et de location ayant généré un gain de $7,9M, la restructuration des polices d'assurance-vie détenues par la banque (BOLI), et la vente de $23,2M de titres à faible rendement. Les prêts non immobiliers ont augmenté de 12% ou $44M depuis le début de l'année, améliorant ainsi la diversification des prêts. Cependant, il y a eu une augmentation de la provision pour pertes de crédit à $4,2M en raison de problèmes avec certains emprunteurs. Une réduction de la main-d'œuvre de 9% devrait permettre d'économiser $1M par trimestre à partir du Q4 2024. Le conseil d'administration a déclaré un dividende en espèces trimestriel de $0,07 par action, payable le 23 août 2024.
First Northwest Bancorp (Nasdaq: FNWB) hat seine Finanzergebnisse für Q2 2024 veröffentlicht und zeigt eine verbesserte Leistung inmitten der Herausforderungen der Branche. Der Nettogewinn stieg auf $1,4M von $0,4M im Q1 2024, fiel jedoch im Vergleich zu $1,8M im Q2 2023. Die Erträge pro Aktie beliefen sich auf $0,16, was einer Steigerung von $0,04 im Q1 2024 entspricht. Das Unternehmen erhöhte seine Nettomarge um 2,77% von 2,76% im vorherigen Quartal und beendete damit einen Rückgang über fünf Quartale. Zu den wichtigsten Maßnahmen gehörten eine Verkaufs-Leasing-Transaktion, die einen Gewinn von $7,9M einbrachte, die Umstrukturierung von bankeigenen Lebensversicherungen (BOLI) und der Verkauf von $23,2M in weniger rentablen Wertpapieren. Die nicht immobilienbesicherten Darlehen stiegen um 12% oder $44M im laufenden Jahr, wodurch die Darlehensdiversifikation verbessert wurde. Allerdings gab es einen Anstieg der Rückstellungen für Kreditausfälle auf $4,2M aufgrund von Problemen mit bestimmten Kreditnehmern. Eine Reduzierung der Belegschaft um 9% wird voraussichtlich ab dem Q4 2024 vierteljährlich $1M einsparen. Der Vorstand erklärte eine vierteljährliche Bar-Dividende von $0,07 pro Aktie, die am 23. August 2024 zahlbar ist.
- Net income increased to $1.4M in Q2 2024 from $0.4M in Q1 2024.
- Net interest margin improved to 2.77% in Q2 2024, ending a five-quarter decline.
- Non-real estate loans increased by 12%, or $44M, YTD.
- Sale-leaseback transaction generated a $7.9M gain.
- Reduced reliance on wholesale funding in Q2 2024.
- Approved a new share repurchase plan authorizing the repurchase of 10% of shares.
- Provision for credit losses increased to $4.2M due to specific borrower issues.
- Nonperforming assets rose significantly, primarily from one commercial construction project.
- Net interest margin decreased by 48 basis points YoY compared to Q2 2023.
- Total interest expense increased by $4.9M YoY, reflecting higher deposit costs.
- Efficiency ratio increased to 72.27% in Q2 2024 from 86.01% YoY.
Insights
First Northwest Bancorp's Q2 2024 results reflect a challenging operating environment but show some signs of progress in restructuring efforts:
- Net income increased to $1.4 million from $396,000 in Q1, though down from $1.8 million a year ago. The improvement was largely due to a $7.9 million gain from a sale-leaseback transaction.
- Net interest margin stabilized at 2.77%, up slightly from 2.76% in Q1, after five consecutive quarterly declines. This suggests the bank may be reaching an inflection point.
- Loan mix shifted away from construction and CRE, with the weighted average rate on new loans at 8.2%.
- Deposits grew 2.5% to $1.71 billion, while borrowings decreased 18.5% to $302.6 million.
- Credit quality deteriorated, with nonperforming assets rising to 1.36% of total assets, up from 0.87% in Q1.
- A $4.2 million provision for credit losses was taken, mainly for reserves on specific loans.
The bank is taking steps to improve profitability, including a workforce reduction expected to save $1 million per quarter. However, significant challenges remain in generating stronger earnings in the current rate environment. The stabilizing net interest margin and deposit growth are positive signs, but credit quality bears watching.
PORT ANGELES, Wash., July 25, 2024 (GLOBE NEWSWIRE) -- "In spite of challenging times for the entire industry as a result of the rate environment, First Northwest executed on a balance sheet restructure strategy. The restructure included a sale-leaseback transaction for six of our branches, a restructure of our bank-owned life insurance policies, two securities loss sale transactions, two balance sheet hedges against fixed rate loans and municipal bonds and the sale of our Visa B shares," commented Matthew P. Deines, President and CEO. "As a result, we reached an inflection point for the net interest margin in the second quarter after declines for the preceding five quarters. We also reduced wholesale funding reliance in the current quarter, and today are announcing significant expense reduction through a reduction in force which we expect will positively impact earnings in the second half of 2024 and into 2025. We still have substantial work to do in order to produce stronger earnings. However, we believe we have laid the groundwork for improved earnings moving forward as lower yielding assets reprice, payoff and paydown in line with contractual commitments.
"First Northwest continues our efforts to deemphasize real estate lending to focus on generating loans and deposits from small-to-medium sized businesses in our markets. Year-to-date in 2024, real estate loans are essentially flat, while non-real estate loans increased by
"There was a substantial increase to our provision for credit losses this quarter. This was related to two borrowing relationships which we have been managing closely since the beginning of 2023. We have appointed a receiver for both relationships and we are working to resolve these problem assets as quickly as possible."
The Board of Directors of First Northwest Bancorp declared a quarterly cash dividend of
2024 FINANCIAL RESULTS | 2Q 24 | 1Q 24 | 2Q 23 | 2024 YTD | 2023 YTD | ||||||||||||||
OPERATING RESULTS (in millions) | |||||||||||||||||||
Net income | $ | 1.4 | $ | 0.4 | $ | 1.8 | $ | 1.8 | $ | 5.3 | |||||||||
Pre-provision net interest income | 14.3 | 13.9 | 16.0 | 28.2 | 32.3 | ||||||||||||||
Noninterest expense | 15.6 | 14.3 | 15.2 | 29.9 | 30.1 | ||||||||||||||
Total revenue, net of interest expense * | 21.6 | 16.1 | 17.7 | 37.7 | 36.3 | ||||||||||||||
PER SHARE DATA | |||||||||||||||||||
Basic and diluted earnings | $ | 0.16 | $ | 0.04 | $ | 0.20 | $ | 0.20 | $ | 0.59 | |||||||||
Book value | 17.19 | 17.00 | 16.56 | 17.19 | 16.56 | ||||||||||||||
Tangible book value * | 17.02 | 16.83 | 16.39 | 17.02 | 16.39 | ||||||||||||||
BALANCE SHEET (in millions) | |||||||||||||||||||
Total assets | $ | 2,220 | $ | 2,240 | $ | 2,163 | $ | 2,220 | $ | 2,163 | |||||||||
Total loans | 1,705 | 1,711 | 1,638 | 1,705 | 1,638 | ||||||||||||||
Total deposits | 1,708 | 1,667 | 1,653 | 1,708 | 1,653 | ||||||||||||||
Total shareholders' equity | 163 | 161 | 160 | 163 | 160 | ||||||||||||||
ASSET QUALITY | |||||||||||||||||||
Net charge-off ratio (1) | 0.15 | % | 0.19 | % | 0.10 | % | 0.17 | % | 0.05 | % | |||||||||
Nonperforming assets to total assets | 1.36 | 0.87 | 0.12 | 1.36 | 0.12 | ||||||||||||||
Allowance for credit losses on loans | |||||||||||||||||||
to total loans | 1.26 | 1.05 | 1.06 | 1.26 | 1.06 | ||||||||||||||
Nonaccrual loan coverage ratio | 71 | 92 | 677 | 71 | 677 | ||||||||||||||
SELECTED RATIOS | |||||||||||||||||||
Return on average assets (1) | 0.26 | % | 0.07 | % | 0.34 | % | 0.17 | % | 0.51 | % | |||||||||
Return on average equity (1) | 3.50 | 0.98 | 4.41 | 2.24 | 6.67 | ||||||||||||||
Return on average tangible equity (1) * | 3.53 | 0.99 | 4.47 | 2.27 | 6.75 | ||||||||||||||
Net interest margin | 2.77 | 2.76 | 3.25 | 2.76 | 3.35 | ||||||||||||||
Efficiency ratio | 72.27 | 88.75 | 86.01 | 79.31 | 82.81 | ||||||||||||||
Bank common equity tier 1 (CETI) ratio | 12.55 | 12.56 | 13.10 | 12.55 | 13.10 | ||||||||||||||
Bank total risk-based capital ratio | 13.76 | 13.57 | 14.08 | 13.76 | 14.08 | ||||||||||||||
(1) Performance ratios are annualized, where appropriate. * See reconciliation of Non-GAAP Financial Measures later in this release. |
2024 Significant Items | |
• | First Fed Bank ("First Fed" or "Bank") made progress on restructuring the balance sheet in the second quarter, resulting in an improved yield on earning assets. |
- Sale-leaseback transaction completed in the second quarter, resulting in a | |
- Sold | |
- Purchased | |
- Continued conversion of lower-yielding bank-owned life insurance ("BOLI") with one conversion completed in the first quarter and two additional policy restructures expected to be completed in the third and fourth quarters. | |
- Improved earning assets yield by 14 basis points over the prior quarter to | |
• | Net interest margin increased over the prior quarter from |
• | Loan mix shifted away from construction and commercial real estate in the second quarter. The weighted-average rate on new loans was |
• | Borrowings decreased |
• | Repurchased 214,132 shares of Company stock during the first quarter, which closed out the October 2020 Stock Repurchase Plan. |
• | New share repurchase plan approved in April 2024 authorizing the repurchase of |
• | Deposit growth of |
• | Estimated insured deposits totaled |
• | Classified loans increased to |
• | Nonperforming assets increased |
• | Provision for credit losses of |
• | Completed a reduction-in-force impacting |
First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or "Company") today reported net income of
The Bank continued efforts to restructure the balance sheet to improve earnings, which started in the fourth quarter of 2023. The Bank completed a sale-leaseback transaction involving six branch locations in May 2024. The sale of the branches resulted in a
Investment security purchases during the second quarter of 2024 totaled
The fair value hedge on loans, tied to the compounded overnight index swap using the secured overnight financing rate index, established in the first quarter of 2024 added
The balance sheet restructure plan also includes the surrender of
Net Interest Income
Total interest income increased
Total interest expense increased
Net interest income before provision for credit losses for the second quarter of 2024 increased
The Company recorded a
The net interest margin increased to
The yield on average earning assets for the second quarter of 2024 increased 14 basis points to
The cost of average interest-bearing liabilities increased 14 basis points to
Current quarter increases were due to higher costs on interest-bearing customer deposits due to competitive pressures related to continued higher market rates and migration from lower costing deposits to higher yield money market accounts. The average brokered CDs balance increased
The increase over the same quarter last year was driven by higher rates paid on deposits and borrowings and higher average CD balances. The Company attracted and retained funding through the use of promotional products and a focus on digital account acquisition during 2023. The mix of retail deposit balances shifted from no or low-cost transaction accounts towards higher cost term certificate and higher yield money market and savings products. Retail CDs represented
Selected Yields | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | ||||||||||||||
Loan yield | 5.62 | % | 5.51 | % | 5.38 | % | 5.31 | % | 5.38 | % | |||||||||
Investment securities yield | 5.01 | 4.75 | 4.53 | 4.18 | 4.09 | ||||||||||||||
Cost of interest-bearing deposits | 2.91 | 2.86 | 2.52 | 2.22 | 1.87 | ||||||||||||||
Cost of total deposits | 2.47 | 2.43 | 2.12 | 1.85 | 1.54 | ||||||||||||||
Cost of borrowed funds | 4.76 | 4.52 | 4.50 | 4.45 | 4.36 | ||||||||||||||
Net interest spread | 2.28 | 2.28 | 2.40 | 2.54 | 2.84 | ||||||||||||||
Net interest margin | 2.77 | 2.76 | 2.84 | 2.97 | 3.25 | ||||||||||||||
Noninterest Income
Noninterest income increased to
Noninterest income increased
Noninterest Income | ||||||||||||||||||||
$ in thousands | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Loan and deposit service fees | $ | 1,076 | $ | 1,102 | $ | 1,068 | 1,068 | $ | 1,064 | |||||||||||
Sold loan servicing fees and servicing rights mark-to-market | 74 | 219 | 276 | 98 | (191 | ) | ||||||||||||||
Net gain on sale of loans | 150 | 52 | 33 | 171 | 58 | |||||||||||||||
Net (loss) gain on sale of investment securities | (2,117 | ) | — | (5,397 | ) | — | — | |||||||||||||
Net gain on sale of premises and equipment | 7,919 | — | — | — | — | |||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 293 | 243 | 260 | 252 | 190 | |||||||||||||||
Other income | (48 | ) | 572 | 831 | 1,315 | 590 | ||||||||||||||
Total noninterest income | $ | 7,347 | $ | 2,188 | $ | (2,929 | ) | $ | 2,904 | $ | 1,711 | |||||||||
Noninterest Expense
Noninterest expense totaled
The increase in total noninterest expenses compared to the second quarter of 2023 is mainly due to higher incentive compensation of
Noninterest Expense | ||||||||||||||||||||
$ in thousands | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Compensation and benefits | $ | 8,588 | $ | 8,128 | $ | 7,397 | $ | 7,795 | $ | 8,180 | ||||||||||
Data processing | 2,008 | 1,944 | 2,107 | 1,945 | 2,080 | |||||||||||||||
Occupancy and equipment | 1,799 | 1,240 | 1,262 | 1,173 | 1,214 | |||||||||||||||
Supplies, postage, and telephone | 317 | 293 | 351 | 292 | 435 | |||||||||||||||
Regulatory assessments and state taxes | 457 | 513 | 376 | 446 | 424 | |||||||||||||||
Advertising | 377 | 309 | 235 | 501 | 929 | |||||||||||||||
Professional fees | 684 | 910 | 1,119 | 929 | 884 | |||||||||||||||
FDIC insurance premium | 473 | 386 | 418 | 369 | 313 | |||||||||||||||
Other expense | 906 | 580 | 3,725 | 926 | 758 | |||||||||||||||
Total noninterest expense | $ | 15,609 | $ | 14,303 | $ | 16,990 | $ | 14,376 | $ | 15,217 | ||||||||||
Efficiency ratio | 72.27 | % | 88.75 | % | 150.81 | % | 80.52 | % | 86.01 | % | ||||||||||
Investment Securities
Investment securities decreased
The estimated average life of the securities portfolio was approximately 7.8 years at the current quarter end, the prior quarter and the second quarter of 2023. The effective duration of the portfolio was approximately 4.3 years at June 30, 2024, compared to 4.4 years in the prior quarter and 5.2 years at the end of the second quarter of 2023. Our recent investments have primarily been floating rate securities to take advantage of higher short-term rates above those offered on cash and to reduce our liability sensitivity.
Investment Securities Available for Sale, at Fair Value | ||||||||||||||||||||
$ in thousands | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Municipal bonds | $ | 78,825 | $ | 87,004 | $ | 87,761 | $ | 93,995 | $ | 100,503 | ||||||||||
U.S. Treasury notes | — | — | — | 2,377 | 2,364 | |||||||||||||||
International agency issued bonds (Agency bonds) | — | — | — | 1,703 | 1,717 | |||||||||||||||
U.S. government agency issued asset-backed securities (ABS agency) | 13,982 | 14,822 | 11,782 | — | — | |||||||||||||||
Corporate issued asset-backed securities (ABS corporate) | 16,483 | 13,929 | 5,286 | — | — | |||||||||||||||
Corporate issued debt securities (Corporate debt): | ||||||||||||||||||||
Senior positions | 9,066 | 13,617 | 9,270 | 16,975 | 16,934 | |||||||||||||||
Subordinated bank notes | 43,826 | 39,414 | 42,184 | 37,360 | 36,740 | |||||||||||||||
U.S. Small Business Administration securities (SBA) | 9,772 | 7,911 | — | — | — | |||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
U.S. government agency issued mortgage-backed securities (MBS agency) | 77,301 | 83,271 | 63,247 | 66,946 | 71,565 | |||||||||||||||
Non-agency issued mortgage-backed securities (MBS non-agency) | 57,459 | 65,987 | 76,093 | 89,968 | 92,140 | |||||||||||||||
Total securities available for sale, at fair value | $ | 306,714 | $ | 325,955 | $ | 295,623 | $ | 309,324 | $ | 321,963 | ||||||||||
Loans and Unfunded Loan Commitments
Net loans, excluding loans held for sale, decreased
Auto and other consumer loans increased
Commercial business loans decreased
The Company originated
Loans by Collateral and Unfunded Commitments | ||||||||||||||||||||
$ in thousands | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
One-to-four family construction | $ | 53,418 | $ | 70,100 | $ | 60,211 | $ | 72,991 | $ | 74,787 | ||||||||||
All other construction and land | 58,346 | 55,286 | 69,484 | 71,092 | 81,968 | |||||||||||||||
One-to-four family first mortgage | 434,840 | 436,543 | 426,159 | 409,207 | 428,879 | |||||||||||||||
One-to-four family junior liens | 13,706 | 12,608 | 12,250 | 12,859 | 11,956 | |||||||||||||||
One-to-four family revolving open-end | 44,803 | 45,536 | 42,479 | 38,413 | 33,658 | |||||||||||||||
Commercial real estate, owner occupied: | ||||||||||||||||||||
Health care | 29,678 | 29,946 | 22,523 | 22,677 | 23,157 | |||||||||||||||
Office | 19,215 | 17,951 | 18,468 | 18,599 | 18,797 | |||||||||||||||
Warehouse | 14,613 | 14,683 | 14,758 | 14,890 | 15,158 | |||||||||||||||
Other | 56,292 | 55,063 | 61,304 | 57,414 | 60,054 | |||||||||||||||
Commercial real estate, non-owner occupied: | ||||||||||||||||||||
Office | 50,158 | 53,099 | 53,548 | 53,879 | 54,926 | |||||||||||||||
Retail | 50,101 | 50,478 | 51,384 | 51,466 | 51,824 | |||||||||||||||
Hospitality | 62,628 | 66,982 | 67,332 | 61,339 | 53,416 | |||||||||||||||
Other | 84,428 | 93,040 | 94,822 | 96,083 | 90,870 | |||||||||||||||
Multi-family residential | 350,382 | 339,907 | 333,428 | 325,338 | 296,398 | |||||||||||||||
Commercial business loans | 81,714 | 90,781 | 76,920 | 75,068 | 80,079 | |||||||||||||||
Commercial agriculture and fishing loans | 14,411 | 10,200 | 5,422 | 4,437 | 7,844 | |||||||||||||||
State and political subdivision obligations | 405 | 405 | 405 | 439 | 439 | |||||||||||||||
Consumer automobile loans | 151,121 | 139,524 | 132,877 | 134,695 | 137,860 | |||||||||||||||
Consumer loans secured by other assets | 129,293 | 122,895 | 108,542 | 104,999 | 105,653 | |||||||||||||||
Consumer loans unsecured | 5,209 | 6,415 | 7,712 | 9,093 | 10,437 | |||||||||||||||
Total loans | $ | 1,704,761 | $ | 1,711,442 | $ | 1,660,028 | $ | 1,634,978 | $ | 1,638,160 | ||||||||||
Unfunded commitments under lines of credit or existing loans | $ | 155,005 | $ | 148,736 | $ | 149,631 | $ | 154,722 | $ | 168,668 | ||||||||||
Deposits
Total deposits increased
The Company estimates that
As of June 30, 2024, consumer deposits made up
Deposits | ||||||||||||||||||||
$ in thousands | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Noninterest-bearing demand deposits | $ | 276,543 | $ | 252,083 | $ | 269,800 | $ | 280,475 | $ | 292,119 | ||||||||||
Interest-bearing demand deposits | 162,201 | 169,418 | 182,361 | 179,029 | 189,187 | |||||||||||||||
Money market accounts | 423,047 | 362,205 | 372,706 | 374,269 | 402,760 | |||||||||||||||
Savings accounts | 224,631 | 242,148 | 253,182 | 260,279 | 242,117 | |||||||||||||||
Certificates of deposit, retail | 398,161 | 443,412 | 410,136 | 379,484 | 333,510 | |||||||||||||||
Total retail deposits | 1,484,583 | 1,469,266 | 1,488,185 | 1,473,536 | 1,459,693 | |||||||||||||||
Certificates of deposit, brokered | 223,705 | 207,626 | 169,577 | 179,586 | 134,515 | |||||||||||||||
Total deposits | $ | 1,708,288 | $ | 1,676,892 | $ | 1,657,762 | $ | 1,653,122 | $ | 1,594,208 | ||||||||||
Public fund and tribal deposits included in total deposits | $ | 138,439 | $ | 132,652 | $ | 128,627 | $ | 130,974 | $ | 119,969 | ||||||||||
Total loans to total deposits | 100 | % | 102 | % | 100 | % | 99 | % | 103 | % | ||||||||||
Deposit Mix | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Noninterest-bearing demand deposits | 16.2 | % | 15.0 | % | 16.3 | % | 17.0 | % | 18.3 | % | ||||||||||
Interest-bearing demand deposits | 9.5 | 10.1 | 11.0 | 10.8 | 11.9 | |||||||||||||||
Money market accounts | 24.8 | 21.6 | 22.5 | 22.6 | 25.3 | |||||||||||||||
Savings accounts | 13.1 | 14.4 | 15.3 | 15.7 | 15.2 | |||||||||||||||
Certificates of deposit, retail | 23.3 | 26.5 | 24.7 | 23.0 | 20.9 | |||||||||||||||
Certificates of deposit, brokered | 13.1 | 12.4 | 10.2 | 10.9 | 8.4 | |||||||||||||||
Cost of Deposits for the Quarter Ended | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Interest-bearing demand deposits | 0.47 | % | 0.45 | % | 0.45 | % | 0.46 | % | 0.45 | % | ||||||||||
Money market accounts | 2.40 | 2.08 | 1.48 | 1.22 | 0.99 | |||||||||||||||
Savings accounts | 1.62 | 1.63 | 1.54 | 1.42 | 1.22 | |||||||||||||||
Certificates of deposit, retail | 4.10 | 4.13 | 3.92 | 3.52 | 3.25 | |||||||||||||||
Certificates of deposit, brokered | 4.94 | 4.94 | 4.72 | 4.31 | 3.44 | |||||||||||||||
Cost of total deposits | 2.47 | 2.43 | 2.12 | 1.85 | 1.54 | |||||||||||||||
Asset Quality
The allowance for credit losses on loans ("ACLL") increased
Nonperforming loans totaled
Classified loans increased
$ in thousands | 2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | |||||||||||||||
Allowance for credit losses on loans to total loans | 1.26 | % | 1.05 | % | 1.05 | % | 1.04 | % | 1.06 | % | ||||||||||
Allowance for credit losses on loans to nonaccrual loans | 71 | 92 | 94 | 714 | 677 | |||||||||||||||
Nonaccrual loans to total loans | 1.78 | 1.14 | 1.12 | 0.15 | 0.16 | |||||||||||||||
Net charge-off ratio (annualized) | 0.15 | 0.19 | 0.14 | 0.30 | 0.10 | |||||||||||||||
Total nonaccrual loans | $ | 30,268 | $ | 19,481 | $ | 18,644 | $ | 2,374 | $ | 2,554 | ||||||||||
Reserve for unfunded commitments | $ | 647 | $ | 548 | $ | 817 | $ | 828 | $ | 1,336 | ||||||||||
Capital
Total shareholders’ equity increased to
Book value per common share was
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 June 30, 2024. Common Equity Tier 1 and Total Risk-Based Capital Ratios at June 30, 2024, were
2Q 24 | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | ||||||||||||||||
Equity to total assets | 7.32 | % | 7.17 | % | 7.42 | % | 7.25 | % | 7.38 | % | ||||||||||
Tangible common equity to tangible assets * | 7.25 | 7.10 | 7.35 | 7.17 | 7.31 | |||||||||||||||
Capital ratios (First Fed Bank): | ||||||||||||||||||||
Tier 1 leverage | 9.55 | 9.74 | 9.90 | 10.12 | 10.16 | |||||||||||||||
Common equity Tier 1 capital | 12.55 | 12.56 | 13.12 | 13.43 | 13.10 | |||||||||||||||
Tier 1 risk-based | 12.55 | 12.56 | 13.12 | 13.43 | 13.10 | |||||||||||||||
Total risk-based | 13.76 | 13.57 | 14.11 | 14.38 | 14.08 | |||||||||||||||
Additional Initiatives
First Northwest approved a new share repurchase plan in an ongoing effort return capital to our shareholders in the second quarter of 2024. The Company's Board of Directors authorized the repurchase of 944,279 shares through such new share repurchase plan ("April 2024 Stock Repurchase Plan"). Cash dividends totaling
* See reconciliation of Non-GAAP Financial Measures later in this release.
Awards/Recognition
The Company received several accolades as a leader in the community in the last year.
In October 2023, the First Fed team was honored to bring home the Gold for Best Bank in the Best of the Northwest survey hosted by Bellingham Alive for the second year in a row. | |
In September 2023, the First Fed team was recognized in the 2023 Best of Olympic Peninsula surveys, winning Best Bank and Best Financial Advisor in Clallam County. First Fed was also a finalist for Best Bank in Jefferson County, Best Employer in Kitsap County and Best Bank and Best Financial Institution in Bainbridge. | |
In June 2023, First Fed was named on the Puget Sound Business Journal’s Best Workplaces list. First Fed has been recognized as one the top 100 workplaces in Washington, as voted for two years in row by each company’s own employees. | |
In May 2023, First Fed was recognized as a Top Corporate Citizen by the Puget Sound Business Journal. The Corporate Citizenship Awards honors local corporate philanthropists and companies making significant contributions in the region. The top 25 small, medium and large-sized companies were recognized in addition to nine other honorees last year. First Fed was ranked #1 in the medium-sized company category in 2023 and was ranked #3 in the same category in 2022. | |
About the Company
First Northwest Bancorp (Nasdaq: FNWB) is a financial holding company engaged in investment activities including the business of its subsidiary, First Fed Bank. First Fed is a Pacific Northwest-based financial institution which has served its customers and communities since 1923. Currently First Fed has 16 locations in Washington state including 12 full-service branches. First Fed’s business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. In 2022, First Northwest made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm. Additionally, First Northwest focuses on strategic partnerships to provide modern financial services such as digital payments and marketplace lending. First Northwest Bancorp was incorporated in 2012 and completed its initial public offering in 2015 under the ticker symbol FNWB. The Company is headquartered in Port Angeles, Washington.
Forward-Looking Statements
Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, expectations of the business environment in which we operate, projections of future performance, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision, and include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements often identified by words such as "believes," "expects," "anticipates," "estimates," or similar expressions. These forward-looking statements are based upon current management beliefs and expectations and may, therefore, involve risks and uncertainties, many of which are beyond our control. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward-looking statements as a result of a wide variety of factors including, but not limited to: increased competitive pressures; changes in the interest rate environment; the credit risks of lending activities; pressures on liquidity, including as a result of withdrawals of deposits or declines in the value of our investment portfolio; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in the Company’s latest Annual Report on Form 10-K under the section entitled "Risk Factors," and other filings with the Securities and Exchange Commission ("SEC"),which are available on our website at www.ourfirstfed.com and on the SEC’s website at www.sec.gov.
Any of the forward-looking statements that we make in this press release and in the other public statements we make may turn out to be incorrect because of the inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Because of these and other uncertainties, our actual future results may be materially different from those expressed or implied in any forward-looking statements made by or on our behalf and the Company's operating and stock price performance may be negatively affected. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2024 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us and could negatively affect the Company’s operations and stock price performance.
For More Information Contact:
Matthew P. Deines, President and Chief Executive Officer
Geri Bullard, EVP, Chief Financial Officer and Chief Operating Officer
IRGroup@ourfirstfed.com
360-457-0461
FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (Unaudited) | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | Three Month Change | One Year Change | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 19,184 | $ | 15,562 | $ | 19,294 | 23.3 | % | -0.6 | % | |||||||||
Interest-earning deposits in banks | 63,995 | 61,784 | 59,008 | 3.6 | 8.5 | ||||||||||||||
Investment securities available for sale, at fair value | 306,714 | 325,955 | 321,963 | -5.9 | -4.7 | ||||||||||||||
Loans held for sale | 1,086 | 988 | 2,049 | 9.9 | -47.0 | ||||||||||||||
Loans receivable (net of allowance for credit losses on loans | 1,682,282 | 1,692,774 | 1,620,863 | -0.6 | 3.8 | ||||||||||||||
Federal Home Loan Bank (FHLB) stock, at cost | 13,086 | 15,876 | 12,621 | -17.6 | 3.7 | ||||||||||||||
Accrued interest receivable | 9,466 | 8,909 | 7,480 | 6.3 | 26.6 | ||||||||||||||
Premises held for sale, net | — | 6,751 | — | -100.0 | n/a | ||||||||||||||
Premises and equipment, net | 10,714 | 11,028 | 18,140 | -2.8 | -40.9 | ||||||||||||||
Servicing rights on sold loans, at fair value | 3,740 | 3,820 | 3,825 | -2.1 | -2.2 | ||||||||||||||
Bank-owned life insurance, net | 41,113 | 34,681 | 40,066 | 18.5 | 2.6 | ||||||||||||||
Equity and partnership investments | 15,085 | 15,121 | 14,569 | -0.2 | 3.5 | ||||||||||||||
Goodwill and other intangible assets, net | 1,084 | 1,085 | 1,087 | -0.1 | -0.3 | ||||||||||||||
Deferred tax asset, net | 12,216 | 12,704 | 15,031 | -3.8 | -18.7 | ||||||||||||||
Prepaid expenses and other assets | 39,873 | 32,982 | 26,882 | 20.9 | 48.3 | ||||||||||||||
Total assets | $ | 2,219,638 | $ | 2,240,020 | $ | 2,162,878 | -0.9 | % | 2.6 | % | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
Deposits | $ | 1,708,288 | $ | 1,666,624 | $ | 1,653,122 | 2.5 | % | 3.3 | % | |||||||||
Borrowings | 302,575 | 371,455 | 303,397 | -18.5 | -0.3 | ||||||||||||||
Accrued interest payable | 3,143 | 2,830 | 1,367 | 11.1 | 129.9 | ||||||||||||||
Accrued expenses and other liabilities | 41,810 | 36,207 | 44,286 | 15.5 | -5.6 | ||||||||||||||
Advances from borrowers for taxes and insurance | 1,304 | 2,398 | 1,149 | -45.6 | 13.5 | ||||||||||||||
Total liabilities | 2,057,120 | 2,079,514 | 2,003,321 | -1.1 | 2.7 | ||||||||||||||
Shareholders' Equity | |||||||||||||||||||
Preferred stock, | — | — | — | n/a | n/a | ||||||||||||||
Common stock, | 94 | 94 | 96 | 0.0 | -2.1 | ||||||||||||||
Additional paid-in capital | 93,985 | 93,763 | 95,360 | 0.2 | -1.4 | ||||||||||||||
Retained earnings | 106,959 | 106,202 | 111,750 | 0.7 | -4.3 | ||||||||||||||
Accumulated other comprehensive loss, net of tax | (31,597 | ) | (32,465 | ) | (40,066 | ) | 2.7 | 21.1 | |||||||||||
Unearned employee stock ownership plan (ESOP) shares | (6,923 | ) | (7,088 | ) | (7,583 | ) | 2.3 | 8.7 | |||||||||||
Total shareholders' equity | 162,518 | 160,506 | 159,557 | 1.3 | 1.9 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 2,219,638 | $ | 2,240,020 | $ | 2,162,878 | -0.9 | % | 2.6 | % | |||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) | |||||||||||||||||||
Quarter Ended | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | Three Month Change | One Year Change | |||||||||||||||
INTEREST INCOME | |||||||||||||||||||
Interest and fees on loans receivable | $ | 23,749 | $ | 22,767 | $ | 21,299 | 4.3 | % | 11.5 | % | |||||||||
Interest on investment securities | 3,949 | 3,632 | 3,336 | 8.7 | 18.4 | ||||||||||||||
Interest on deposits in banks | 571 | 645 | 617 | -11.5 | -7.5 | ||||||||||||||
FHLB dividends | 358 | 282 | 222 | 27.0 | 61.3 | ||||||||||||||
Total interest income | 28,627 | 27,326 | 25,474 | 4.8 | 12.4 | ||||||||||||||
INTEREST EXPENSE | |||||||||||||||||||
Deposits | 10,180 | 10,112 | 6,209 | 0.7 | 64.0 | ||||||||||||||
Borrowings | 4,196 | 3,286 | 3,283 | 27.7 | 27.8 | ||||||||||||||
Total interest expense | 14,376 | 13,398 | 9,492 | 7.3 | 51.5 | ||||||||||||||
Net interest income | 14,251 | 13,928 | 15,982 | 2.3 | -10.8 | ||||||||||||||
PROVISION FOR CREDIT LOSSES | |||||||||||||||||||
Provision for credit losses on loans | 4,138 | 1,239 | 300 | 234.0 | 1,279.3 | ||||||||||||||
Provision for (recapture of) credit losses on unfunded commitments | 99 | (269 | ) | — | 136.8 | 100.0 | |||||||||||||
Provision for credit losses | 4,237 | 970 | 300 | 336.8 | 1,312.3 | ||||||||||||||
Net interest income after provision for credit losses | 10,014 | 12,958 | 15,682 | -22.7 | -36.1 | ||||||||||||||
NONINTEREST INCOME | |||||||||||||||||||
Loan and deposit service fees | 1,076 | 1,102 | 1,064 | -2.4 | 1.1 | ||||||||||||||
Sold loan servicing fees and servicing rights mark-to-market | 74 | 219 | (191 | ) | -66.2 | 138.7 | |||||||||||||
Net gain on sale of loans | 150 | 52 | 58 | 188.5 | 158.6 | ||||||||||||||
Net loss on sale of investment securities | (2,117 | ) | — | — | 100.0 | 100.0 | |||||||||||||
Net gain on sale of premises and equipment | 7,919 | — | — | 100.0 | 100.0 | ||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 293 | 243 | 190 | 20.6 | 54.2 | ||||||||||||||
Other income | (48 | ) | 572 | 590 | -108.4 | -108.1 | |||||||||||||
Total noninterest income | 7,347 | 2,188 | 1,711 | 235.8 | 329.4 | ||||||||||||||
NONINTEREST EXPENSE | |||||||||||||||||||
Compensation and benefits | 8,588 | 8,128 | 8,180 | 5.7 | 5.0 | ||||||||||||||
Data processing | 2,008 | 1,944 | 2,080 | 3.3 | -3.5 | ||||||||||||||
Occupancy and equipment | 1,799 | 1,240 | 1,214 | 45.1 | 48.2 | ||||||||||||||
Supplies, postage, and telephone | 317 | 293 | 435 | 8.2 | -27.1 | ||||||||||||||
Regulatory assessments and state taxes | 457 | 513 | 424 | -10.9 | 7.8 | ||||||||||||||
Advertising | 377 | 309 | 929 | 22.0 | -59.4 | ||||||||||||||
Professional fees | 684 | 910 | 884 | -24.8 | -22.6 | ||||||||||||||
FDIC insurance premium | 473 | 386 | 313 | 22.5 | 51.1 | ||||||||||||||
Other expense | 906 | 580 | 758 | 56.2 | 19.5 | ||||||||||||||
Total noninterest expense | 15,609 | 14,303 | 15,217 | 9.1 | 2.6 | ||||||||||||||
Income before provision for income taxes | 1,752 | 843 | 2,176 | 107.8 | -19.5 | ||||||||||||||
Provision for income taxes | 334 | 447 | 475 | -25.3 | -29.7 | ||||||||||||||
Net income | 1,418 | 396 | 1,701 | 258.1 | -16.6 | ||||||||||||||
Net loss attributable to noncontrolling interest in Quin Ventures, Inc. | — | — | 75 | n/a | -100.0 | ||||||||||||||
Net income attributable to parent | $ | 1,418 | $ | 396 | $ | 1,776 | 258.1 | % | -20.2 | % | |||||||||
Basic and diluted earnings per common share | $ | 0.16 | $ | 0.04 | $ | 0.20 | 300.0 | % | -20.0 | % | |||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited) | |||||||||||
Six Months Ended June 30, | Percent | ||||||||||
2024 | 2023 | Change | |||||||||
INTEREST INCOME | |||||||||||
Interest and fees on loans receivable | $ | 46,516 | $ | 40,803 | 14.0 | % | |||||
Interest on investment securities | 7,581 | 6,518 | 16.3 | ||||||||
Interest on deposits in banks | 1,216 | 1,021 | 19.1 | ||||||||
FHLB dividends | 640 | 414 | 54.6 | ||||||||
Total interest income | 55,953 | 48,756 | 14.8 | ||||||||
INTEREST EXPENSE | |||||||||||
Deposits | 20,292 | 10,562 | 92.1 | ||||||||
Borrowings | 7,482 | 5,907 | 26.7 | ||||||||
Total interest expense | 27,774 | 16,469 | 68.6 | ||||||||
Net interest income | 28,179 | 32,287 | -12.7 | ||||||||
PROVISION FOR CREDIT LOSSES | |||||||||||
Provision for credit losses on loans | 5,377 | 315 | 1,607.0 | ||||||||
(Recapture of) provision for credit losses on unfunded commitments | (170 | ) | (515 | ) | 67.0 | ||||||
Provision for (recapture of) credit losses | 5,207 | (200 | ) | 2,703.5 | |||||||
Net interest income after provision for (recapture of) credit losses | 22,972 | 32,487 | -29.3 | ||||||||
NONINTEREST INCOME | |||||||||||
Loan and deposit service fees | 2,178 | 2,205 | -1.2 | ||||||||
Sold loan servicing fees and servicing rights mark-to-market | 293 | 302 | -3.0 | ||||||||
Net gain on sale of loans | 202 | 234 | -13.7 | ||||||||
Net loss on sale of investment securities | (2,117 | ) | — | 100.0 | |||||||
Net gain on sale of premises and equipment | 7,919 | — | 100.0 | ||||||||
Increase in cash surrender value of bank-owned life insurance | 536 | 416 | 28.8 | ||||||||
Other income | 524 | 888 | -41.0 | ||||||||
Total noninterest income | 9,535 | 4,045 | 135.7 | ||||||||
NONINTEREST EXPENSE | |||||||||||
Compensation and benefits | 16,716 | 16,017 | 4.4 | ||||||||
Data processing | 3,952 | 4,118 | -4.0 | ||||||||
Occupancy and equipment | 3,039 | 2,423 | 25.4 | ||||||||
Supplies, postage, and telephone | 610 | 790 | -22.8 | ||||||||
Regulatory assessments and state taxes | 970 | 813 | 19.3 | ||||||||
Advertising | 686 | 1,970 | -65.2 | ||||||||
Professional fees | 1,594 | 1,690 | -5.7 | ||||||||
FDIC insurance premium | 859 | 570 | 50.7 | ||||||||
Other | 1,486 | 1,697 | -12.4 | ||||||||
Total noninterest expense | 29,912 | 30,088 | -0.6 | ||||||||
Income before provision for income taxes | 2,595 | 6,444 | -59.7 | ||||||||
Provision for income taxes | 781 | 1,300 | -39.9 | ||||||||
Net income | 1,814 | 5,144 | -64.7 | ||||||||
Net loss attributable to noncontrolling interest in Quin Ventures, Inc. | — | 160 | -100.0 | ||||||||
Net income attributable to parent | $ | 1,814 | $ | 5,304 | -65.8 | % | |||||
Basic and diluted earnings per common share | $ | 0.20 | $ | 0.59 | -66.1 | % | |||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY Selected Financial Ratios and Other Data (Dollars in thousands, except per share data) (Unaudited) | |||||||||||||||||||
As of or For the Quarter Ended | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Performance ratios: (1) | |||||||||||||||||||
Return on average assets | 0.26 | % | 0.07 | % | -1.03 | % | 0.46 | % | 0.34 | % | |||||||||
Return on average equity | 3.50 | 0.98 | (14.05 | ) | 6.17 | 4.41 | |||||||||||||
Average interest rate spread | 2.28 | 2.28 | 2.40 | 2.54 | 2.84 | ||||||||||||||
Net interest margin (2) | 2.77 | 2.76 | 2.84 | 2.97 | 3.25 | ||||||||||||||
Efficiency ratio (3) | 72.3 | 88.8 | 150.8 | 80.5 | 86.0 | ||||||||||||||
Equity to total assets | 7.32 | 7.17 | 7.42 | 7.25 | 7.38 | ||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 117.6 | 118.3 | 118.2 | 120.0 | 120.7 | ||||||||||||||
Book value per common share | $ | 17.19 | $ | 17.00 | $ | 16.99 | $ | 16.20 | $ | 16.56 | |||||||||
Tangible performance ratios: (1) | |||||||||||||||||||
Tangible common equity to tangible assets (4) | 7.25 | % | 7.10 | % | 7.35 | % | 7.17 | % | 7.31 | % | |||||||||
Return on average tangible common equity (4) | 3.53 | 0.99 | (14.20 | ) | 6.23 | 4.47 | |||||||||||||
Tangible book value per common share (4) | $ | 17.02 | $ | 16.83 | $ | 16.83 | $ | 16.03 | $ | 16.39 | |||||||||
Asset quality ratios: | |||||||||||||||||||
Nonperforming assets to total assets at end of period (5) | 1.36 | % | 0.87 | % | 0.85 | % | 0.11 | % | 0.12 | % | |||||||||
Nonaccrual loans to total loans (6) | 1.78 | 1.14 | 1.12 | 0.15 | 0.16 | ||||||||||||||
Allowance for credit losses on loans to nonaccrual loans (6) | 70.91 | 92.18 | 93.92 | 713.77 | 677.25 | ||||||||||||||
Allowance for credit losses on loans to total loans | 1.26 | 1.05 | 1.05 | 1.04 | 1.06 | ||||||||||||||
Annualized net charge-offs to average outstanding loans | 0.15 | 0.19 | 0.14 | 0.30 | 0.10 | ||||||||||||||
Capital ratios (First Fed Bank): | |||||||||||||||||||
Tier 1 leverage | 9.6 | % | 9.7 | % | 9.9 | % | 10.1 | % | 10.2 | % | |||||||||
Common equity Tier 1 capital | 12.6 | 12.6 | 13.1 | 13.4 | 13.1 | ||||||||||||||
Tier 1 risk-based | 12.6 | 12.6 | 13.1 | 13.4 | 13.1 | ||||||||||||||
Total risk-based | 13.8 | 13.6 | 14.1 | 14.4 | 14.1 | ||||||||||||||
Other Information: | |||||||||||||||||||
Average total assets | $ | 2,219,411 | $ | 2,166,187 | $ | 2,127,655 | $ | 2,139,734 | $ | 2,118,014 | |||||||||
Average total loans | 1,717,903 | 1,678,656 | 1,645,418 | 1,641,206 | 1,605,133 | ||||||||||||||
Average interest-earning assets | 2,072,430 | 2,027,821 | 1,980,226 | 1,994,251 | 1,975,384 | ||||||||||||||
Average noninterest-bearing deposits | 251,442 | 249,283 | 259,845 | 276,294 | 282,514 | ||||||||||||||
Average interest-bearing deposits | 1,408,018 | 1,422,116 | 1,379,059 | 1,377,734 | 1,333,943 | ||||||||||||||
Average interest-bearing liabilities | 1,762,858 | 1,714,474 | 1,675,044 | 1,661,996 | 1,636,188 | ||||||||||||||
Average equity | 163,119 | 161,867 | 155,971 | 160,994 | 161,387 | ||||||||||||||
Average common shares -- basic | 8,783,086 | 8,876,236 | 8,928,620 | 8,906,526 | 8,914,355 | ||||||||||||||
Average common shares -- diluted | 8,788,523 | 8,907,184 | 8,968,828 | 8,934,882 | 8,931,386 | ||||||||||||||
Tangible assets (4) | 2,218,037 | 2,238,446 | 2,200,230 | 2,151,849 | 2,161,235 | ||||||||||||||
Tangible common equity (4) | 160,917 | 158,932 | 161,773 | 154,369 | 157,914 | ||||||||||||||
(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) See reconciliation of Non-GAAP Financial Measures later in this release. | |||||||||||||||||||
(5) 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. | |||||||||||||||||||
(6) 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 (Dollars in thousands, except per share data) (Unaudited) | |||||||
As of or For the Six Months Ended June 30, | |||||||
2024 | 2023 | ||||||
Performance ratios: (1) | |||||||
Return on average assets | 0.17 | % | 0.51 | % | |||
Return on average equity | 2.24 | 6.67 | |||||
Average interest rate spread | 2.28 | 2.98 | |||||
Net interest margin (2) | 2.76 | 3.35 | |||||
Efficiency ratio (3) | 79.3 | 82.8 | |||||
Equity to total assets | 7.32 | 7.38 | |||||
Average interest-earning assets to average interest-bearing liabilities | 117.9 | 121.5 | |||||
Book value per common share | $ | 17.19 | $ | 16.56 | |||
Tangible performance ratios: (1) | |||||||
Tangible common equity to tangible assets (4) | 7.25 | % | 7.31 | % | |||
Return on average tangible common equity (4) | 2.27 | 6.75 | |||||
Tangible book value per common share (4) | $ | 17.02 | $ | 16.39 | |||
Asset quality ratios: | |||||||
Nonperforming assets to total assets at end of period (5) | 1.36 | % | 0.12 | % | |||
Nonaccrual loans to total loans (6) | 1.78 | 0.16 | |||||
Allowance for credit losses on loans to nonaccrual loans (6) | 70.91 | 677.25 | |||||
Allowance for credit losses on loans to total loans | 1.26 | 1.06 | |||||
Annualized net charge-offs to average outstanding loans | 0.17 | 0.05 | |||||
Capital ratios (First Fed Bank): | |||||||
Tier 1 leverage | 9.6 | % | 10.2 | % | |||
Common equity Tier 1 capital | 12.6 | 13.1 | |||||
Tier 1 risk-based | 12.6 | 13.1 | |||||
Total risk-based | 13.8 | 14.1 | |||||
Other Information: | |||||||
Average total assets | $ | 2,192,799 | $ | 2,084,299 | |||
Average total loans | 1,698,394 | 1,605,133 | |||||
Average interest-earning assets | 2,050,075 | 1,942,510 | |||||
Average noninterest-bearing deposits | 250,362 | 288,343 | |||||
Average interest-bearing deposits | 1,415,068 | 1,311,311 | |||||
Average interest-bearing liabilities | 1,738,667 | 1,598,295 | |||||
Average equity | 162,493 | 160,359 | |||||
Average common shares -- basic | 8,829,687 | 8,912,358 | |||||
Average common shares -- diluted | 8,844,937 | 8,932,117 | |||||
Tangible assets (4) | 2,218,037 | 2,161,235 | |||||
Tangible common equity (4) | 160,917 | 157,914 | |||||
(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) See reconciliation of Non-GAAP Financial Measures later in this release. | |||||||
(5) 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. | |||||||
(6) Nonperforming loans consists of nonaccruing loans and accruing loans more than 90 days past due. | |||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited) | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | Three Month Change | One Year Change | |||||||||||||||
(In thousands) | |||||||||||||||||||
Real Estate: | |||||||||||||||||||
One-to-four family | $ | 389,934 | $ | 383,905 | $ | 365,600 | $ | 6,029 | $ | 24,334 | |||||||||
Multi-family | 350,076 | 339,538 | 296,561 | 10,538 | 53,515 | ||||||||||||||
Commercial real estate | 375,511 | 385,130 | 375,961 | (9,619 | ) | (450 | ) | ||||||||||||
Construction and land | 111,251 | 125,347 | 157,060 | (14,096 | ) | (45,809 | ) | ||||||||||||
Total real estate loans | 1,226,772 | 1,233,920 | 1,195,182 | (7,148 | ) | 31,590 | |||||||||||||
Consumer: | |||||||||||||||||||
Home equity | 72,613 | 72,391 | 58,895 | 222 | 13,718 | ||||||||||||||
Auto and other consumer | 285,623 | 268,834 | 253,950 | 16,789 | 31,673 | ||||||||||||||
Total consumer loans | 358,236 | 341,225 | 312,845 | 17,011 | 45,391 | ||||||||||||||
Commercial business | 119,753 | 136,297 | 130,133 | (16,544 | ) | (10,380 | ) | ||||||||||||
Total loans receivable | 1,704,761 | 1,711,442 | 1,638,160 | (6,681 | ) | 66,601 | |||||||||||||
Less: | |||||||||||||||||||
Derivative basis adjustment | 1,017 | 710 | 0 | 307 | 1,017 | ||||||||||||||
Allowance for credit losses on loans | 21,462 | 17,958 | 17,297 | 3,504 | 4,165 | ||||||||||||||
Total loans receivable, net | $ | 1,682,282 | $ | 1,692,774 | $ | 1,620,863 | $ | (10,492 | ) | $ | 61,419 | ||||||||
Selected loan detail:
June 30, 2024 | March 31, 2024 | June 30, 2023 | Three Month Change | One Year Change | |||||||||||||||
(In thousands) | |||||||||||||||||||
Construction and land loans breakout | |||||||||||||||||||
1-4 Family construction | $ | 60,492 | $ | 69,075 | $ | 65,025 | $ | (8,583 | ) | $ | (4,533 | ) | |||||||
Multifamily construction | 43,341 | 45,776 | 58,070 | (2,435 | ) | (14,729 | ) | ||||||||||||
Acquisition-renovation | — | — | 7,266 | — | (7,266 | ) | |||||||||||||
Nonresidential construction | 1,015 | 3,374 | 19,033 | (2,359 | ) | (18,018 | ) | ||||||||||||
Land and development | 6,403 | 7,122 | 7,666 | (719 | ) | (1,263 | ) | ||||||||||||
Total construction and land loans | $ | 111,251 | $ | 125,347 | $ | 157,060 | $ | (14,096 | ) | $ | (45,809 | ) | |||||||
Auto and other consumer loans breakout | |||||||||||||||||||
Triad Manufactured Home loans | $ | 110,510 | $ | 105,525 | $ | 90,792 | $ | 4,985 | $ | 19,718 | |||||||||
Woodside auto loans | 131,151 | 128,072 | 125,948 | 3,079 | 5,203 | ||||||||||||||
First Help auto loans | 17,427 | 8,326 | 5,602 | 9,101 | 11,825 | ||||||||||||||
Other auto loans | 2,690 | 3,313 | 6,188 | (623 | ) | (3,498 | ) | ||||||||||||
Other consumer loans | 23,845 | 23,598 | 25,420 | 247 | (1,575 | ) | |||||||||||||
Total auto and other consumer loans | $ | 285,623 | $ | 268,834 | $ | 253,950 | $ | 16,789 | $ | 31,673 | |||||||||
Commercial business loans breakout | |||||||||||||||||||
PPP loans | $ | 5 | $ | 18 | $ | 54 | $ | (13 | ) | $ | (49 | ) | |||||||
Northpointe Bank MPP | 9,150 | 15,047 | 23,904 | (5,897 | ) | (14,754 | ) | ||||||||||||
Secured lines of credit | 28,862 | 41,014 | 38,355 | (12,152 | ) | (9,493 | ) | ||||||||||||
Unsecured lines of credit | 1,133 | 1,001 | 1,231 | 132 | (98 | ) | |||||||||||||
SBA loans | 7,146 | 8,944 | 9,038 | (1,798 | ) | (1,892 | ) | ||||||||||||
Other commercial business loans | 73,457 | 70,273 | 57,551 | 3,184 | 15,906 | ||||||||||||||
Total commercial business loans | $ | 119,753 | $ | 136,297 | $ | 130,133 | $ | (16,544 | ) | $ | (10,380 | ) | |||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited) | ||||||||||||||||||||
Non-GAAP Financial Measures This press release contains financial measures that are not in conformity with generally accepted accounting principles in the United States of America ("GAAP"). Non-GAAP measures are presented where management believes the information will help investors understand the Company’s results of operations or financial position and assess trends. Where non-GAAP financial measures are used, the comparable GAAP financial measure is also provided. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Reconciliations of the GAAP and non-GAAP measures are presented below. | ||||||||||||||||||||
Calculation of Total Revenue: | ||||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Net interest income | $ | 14,251 | $ | 13,928 | $ | 14,195 | $ | 14,950 | $ | 15,982 | ||||||||||
Noninterest income | 7,347 | 2,188 | (2,929 | ) | 2,904 | 1,711 | ||||||||||||||
Total revenue, net of interest expense (1) | $ | 21,598 | $ | 16,116 | $ | 11,266 | $ | 17,854 | $ | 17,693 | ||||||||||
1) We believe this non-GAAP metric provides an important measure with which to analyze and evaluate income available for noninterest expenses. | ||||||||||||||||||||
Calculations Based on Tangible Common Equity:
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Total shareholders' equity | $ | 162,518 | $ | 160,506 | $ | 163,340 | $ | 156,065 | $ | 159,557 | ||||||||||
Less: Goodwill and other intangible assets | 1,084 | 1,085 | 1,086 | 1,087 | 1,087 | |||||||||||||||
Disallowed non-mortgage loan servicing rights | 517 | 489 | 481 | 609 | 556 | |||||||||||||||
Total tangible common equity | $ | 160,917 | $ | 158,932 | $ | 161,773 | $ | 154,369 | $ | 157,914 | ||||||||||
Total assets | $ | 2,219,638 | $ | 2,240,020 | $ | 2,201,797 | $ | 2,153,545 | $ | 2,162,878 | ||||||||||
Less: Goodwill and other intangible assets | 1,084 | 1,085 | 1,086 | 1,087 | 1,087 | |||||||||||||||
Disallowed non-mortgage loan servicing rights | 517 | 489 | 481 | 609 | 556 | |||||||||||||||
Total tangible assets | $ | 2,218,037 | $ | 2,238,446 | $ | 2,200,230 | $ | 2,151,849 | $ | 2,161,235 | ||||||||||
Average shareholders' equity | $ | 163,119 | $ | 161,867 | $ | 155,971 | $ | 160,994 | $ | 161,387 | ||||||||||
Less: Average goodwill and other intangible assets | 1,085 | 1,085 | 1,086 | 1,087 | 1,088 | |||||||||||||||
Average disallowed non-mortgage loan servicing rights | 489 | 481 | 608 | 557 | 801 | |||||||||||||||
Total average tangible common equity | $ | 161,545 | $ | 160,301 | $ | 154,277 | $ | 159,350 | $ | 159,498 | ||||||||||
Net income (loss) | $ | 1,418 | $ | 396 | $ | (5,522 | ) | $ | 2,504 | $ | 1,776 | |||||||||
Common shares outstanding | 9,453,247 | 9,442,796 | 9,611,876 | 9,630,735 | 9,633,496 | |||||||||||||||
GAAP Ratios: | ||||||||||||||||||||
Equity to total assets | 7.32 | % | 7.17 | % | 7.42 | % | 7.25 | % | 7.38 | % | ||||||||||
Return on average equity | 3.50 | % | 0.98 | % | -14.05 | % | 6.17 | % | 4.41 | % | ||||||||||
Book value per common share | $ | 17.19 | $ | 17.00 | $ | 16.99 | $ | 16.20 | $ | 16.56 | ||||||||||
Non-GAAP Ratios: | ||||||||||||||||||||
Tangible common equity to tangible assets (1) | 7.25 | % | 7.10 | % | 7.35 | % | 7.17 | % | 7.31 | % | ||||||||||
Return on average tangible common equity (1) | 3.53 | % | 0.99 | % | -14.20 | % | 6.23 | % | 4.47 | % | ||||||||||
Tangible book value per common share (1) | $ | 17.02 | $ | 16.83 | $ | 16.83 | $ | 16.03 | $ | 16.39 | ||||||||||
(1) We believe these non-GAAP metrics provide an important measure with which to analyze and evaluate financial condition and capital strength. In addition, we believe that use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. | ||||||||||||||||||||
FIRST NORTHWEST BANCORP AND SUBSIDIARY ADDITIONAL INFORMATION (Dollars in thousands) (Unaudited) | |||||||
June 30, 2024 | June 30, 2023 | ||||||
(Dollars in thousands, except per share data) | |||||||
Total shareholders' equity | $ | 162,518 | $ | 159,557 | |||
Less: Goodwill and other intangible assets | 1,084 | 1,087 | |||||
Disallowed non-mortgage loan servicing rights | 517 | 556 | |||||
Total tangible common equity | $ | 160,917 | $ | 157,914 | |||
Total assets | $ | 2,219,638 | $ | 2,162,878 | |||
Less: Goodwill and other intangible assets | 1,084 | 1,087 | |||||
Disallowed non-mortgage loan servicing rights | 517 | 556 | |||||
Total tangible assets | $ | 2,218,037 | $ | 2,161,235 | |||
Average shareholders' equity | $ | 162,493 | $ | 160,359 | |||
Less: Average goodwill and other intangible assets | 1,085 | 1,088 | |||||
Average disallowed non-mortgage loan servicing rights | 485 | 758 | |||||
Total average tangible common equity | $ | 160,923 | $ | 158,513 | |||
Net income | $ | 1,814 | $ | 5,304 | |||
Common shares outstanding | 9,453,247 | 9,633,496 | |||||
GAAP Ratios: | |||||||
Equity to total assets | 7.32 | % | 7.38 | % | |||
Return on average equity | 2.24 | % | 6.67 | % | |||
Book value per common share | $ | 17.19 | $ | 16.56 | |||
Non-GAAP Ratios: | |||||||
Tangible common equity to tangible assets (1) | 7.25 | % | 7.31 | % | |||
Return on average tangible common equity (1) | 2.27 | % | 6.75 | % | |||
Tangible book value per common share (1) | $ | 17.02 | $ | 16.39 | |||
(1) We believe these non-GAAP metrics provide an important measure with which to analyze and evaluate financial condition and capital strength. In addition, we believe that use of tangible equity and tangible assets improves the comparability to other institutions that have not engaged in acquisitions that resulted in recorded goodwill and other intangibles. | |||||||
Images accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/e5886160-9c61-4260-b858-a2d740483439
https://www.globenewswire.com/NewsRoom/AttachmentNg/985787b8-4cb5-4faa-9c91-aab1791cc9d6
https://www.globenewswire.com/NewsRoom/AttachmentNg/c637a5e6-7d3b-4de3-b3e8-45c6e76598a5
https://www.globenewswire.com/NewsRoom/AttachmentNg/43eedfeb-4788-49eb-8faa-a76672f17e9e
FAQ
What were First Northwest Bancorp's earnings for Q2 2024?
How did First Northwest Bancorp's net interest margin change in Q2 2024?
What is the quarterly dividend declared by First Northwest Bancorp?
How did First Northwest Bancorp's non-real estate loans perform YTD 2024?
What was the provision for credit losses for First Northwest Bancorp in Q2 2024?
What was the impact of the sale-leaseback transaction on First Northwest Bancorp's earnings?