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First Northwest Bancorp (FNWB)

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16.39+0.37 (+2.31%)
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16.44 +0.05 (0.31%)
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Previous Close16.02
Open16.09
Bid15.50 x 800
Ask16.40 x 800
Day's Range15.91 - 16.39
52 Week Range8.77 - 17.85
Volume10,728
Avg. Volume22,440
Market Cap167.952M
Beta (5Y Monthly)0.99
PE Ratio (TTM)14.90
EPS (TTM)1.10
Earnings DateApr 27, 2021 - May 03, 2021
Forward Dividend & Yield0.24 (1.48%)
Ex-Dividend DateFeb 11, 2021
1y Target EstN/A
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  • GlobeNewswire

    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

    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