First Northwest Bancorp : Presentation-Mar 2025

Published: 2025-03-18 11:25:05 ET FNWB

Investor Presentation

2024 Fourth Quarter and Year End

March 2025

Established Community Bank in Puget Sound

Established Puget Sound Banking Markets

Market

Number

Deposits in

Deposit

% of

County

Market Share

Rank

Market ($M)

Franchise

Branches

(%)

Clallam

1,196

42.0%

69.7%

Jefferson

185

21.2%

10.8%

Emerging Puget Sound Banking Markets

County

Market

Rank

Number

Branches

Deposits in

Market ($M)

Deposit

Market Share

(%)

King

Kitsap

Whatcom

55 0.05%

3.2%

6.2%

10.0%

Positioning Efforts Expected to Benefit 2025

Fourth Quarter 2024 Results

Reported net interest margin of 2.73% an increase of 2 bps from last quarter

primarily driven by reductions in funding costs of certificate of deposits

Increased AFS investments by $29.5 million in the fourth quarter of 2024 -

strategic positioning of the balance sheet for 2025

Recorded $3.9 million in charge-offs related to six commercial business loans

Strong organic loan originations of $72.6 million in fourth quarter

Grew core deposit average balances by $35.4 million quarter over quarter,

average wholesale funding decreased $23.0 million

2024 Year End Financial Summary

PPNR*

Loans

Deposits

Capital

* Non-GAAP reconciliation provided on page 28

Fourth Quarter 2024 GAAP Results

Selected Financial Data

Q4 2024

Q3 2024

Q2 2024

Q1 2024

Q4 2023

Q3 2023

Q2 2023

Q1 2023

($ in thousands, except for per share data)

Net Interest Income

14,137

$ 14,020

$ 14,234

$ 13,929

$ 14,195

$ 14,950

$ 15,982

$ 16,305

Provision for Credit Losses

3,655

3,134

8,739

970

1,152

371

300

(500)

Total Noninterest Income

1,300

1,779

7,347

2,188

(2,930)

2,904

1,711

2,334

Total Revenue

15,437

15,800

21,581

16,117

11,265

17,854

17,693

18,640

Total Noninterest Expense

14,232

15,848

15,609

14,303

16,990

14,375

15,216

14,872

Income before Taxes

(2,450)

(3,183)

(2,767)

843

(6,876)

3,107

2,177

4,267

Net Income (Loss)

(2,810)

(1,980)

(2,220)

396

(5,522)

2,504

1,776

3,528

Earnings Per Share

(0.32)

(0.23)

(0.25)

0.04

(0.62)

0.28

0.20

0.39

Total Assets

2,232,006

2,255,486

2,215,962

2,240,020

2,201,797

2,153,545

2,162,878

2,172,094

Gross Loans Receivable (ex HFS)

1,695,635

1,736,386

1,697,107

1,710,731

1,660,028

1,634,978

1,638,161

1,579,463

Allowance for Credit Losses on Loans & Leases

(20,449)

(21,970)

(19,343)

(17,958)

(17,510)

(16,945)

(17,297)

(17,396)

All Other Assets

556,820

541,069

538,198

547,247

559,279

535,512

542,015

610,026

Total Liabilities

2,078,124

2,094,697

2,057,081

2,079,514

2,038,457

1,997,480

2,003,321

2,011,758

Total Deposits

1,688,026

1,711,641

1,708,289

1,666,624

1,676,892

1,657,762

1,653,122

1,594,208

Borrowings

336,014

334,994

302,575

371,455

320,936

300,416

303,397

379,377

Other Liabilities

54,084

48,061

46,218

41,435

40,630

39,302

46,802

38,172

Total Shareholders' Equity

153,882

160,789

158,881

160,506

163,340

156,065

159,557

160,336

Net Interest Margin

2.73%

2.71%

2.76%

2.84%

2.97%

3.25%

3.46%

PPNR ROAA *

0.22%

-0.01%

1.08%

0.34%

-1.07%

0.65%

0.48%

0.76%

Effective Tax Rate

-14.67%

37.79%

19.78%

53.00%

19.70%

19.42%

21.81%

19.33%

Noninterest Expense to Average Assets

2.57%

2.85%

2.83%

2.66%

3.17%

2.67%

2.88%

2.94%

* Non-GAAP reconciliation provided on page 28

Strong Capital and Liquidity Positions

Capital Levels

Liquidity Coverage

Minimum

Unencumbered Cash Unencumbered Securities

Wholesale Funding Capacity 2

1 - Bank ratios, based on FDIC call report filing

2 - Includes FRB, FHLB, LOC and wholesale funding capacities

Repricing Time Deposits Benefits Margin

Based on current maturities within the portfolio and assuming no further interest rate adjustments in the Fed Funds Rate, there are $580.0 million of time deposits repricing in next 12 months

Schedule of Maturing Certificate of Deposits

($ in thousands)

Customer Time Deposits

Maturity

Current

Quarter

Balance

Rate

Variance

Q1 25

185,770

4.32%

3.52%

-0.80%

Q2 25

120,340

4.35%

3.71%

-0.64%

Q3 25

84,081

4.34%

3.82%

-0.51%

Q4 25

36,416

3.70%

3.63%

-0.07%

Total Customer

426,608

4.28%

3.64%

-0.64%

Brokered Time Deposits

Maturity

Current

Quarter

Balance

Rate

Variance

25 1

97,460

4.94%

4.30%

-0.64%

32,500

5.20%

4.30%

-0.90%

21,149

3.75%

4.30%

0.55%

2,262

0.95%

4.30%

3.35%

Total Brokered

153,371

4.77%

4.30%

-0.47%

1 - Includes $52.5 million of callable deposits with a settlement date in January 2025; maturity dates were December 2026, 2027, and 2028

Credit Trends - Risk Ratings

Loans by Risk Rating

Q4 2024

Q3 2024

Q2 2024

Q1 2024

Q4 2023

($ in Thousands)

Balance

% of Total

Balance

% of Total

Balance

% of Total

Balance

% of Total

Balance

% of Total

Pass (Grades 1-3)

$1,574,647

92.35%

$1,594,156

91.89%

$1,582,848

93.21%

$1,594,284

93.15%

$1,549,910

93.37%

Watch (Grade 4)

67,543

4.48%

86,098

4.96%

65,445

3.85%

65,049

3.80%

60,245

3.63%

Special Mention (Grade 5)

11,090

0.65%

7,623

0.44%

10,053

0.59%

15,928

0.93%

14,739

0.89%

Substandard (Grade 6)

42,543

2.51%

46,927

2.71%

39,751

2.34%

36,181

2.11%

35,134

2.12%

Doubtful (Grade 7)

0.00%

Loss (Grade 8)

0.00%

Total Loans

$1,695,823

$1,734,807

$1,698,124

$1,711,442

$1,660,028

Non-performing Loans

$30,515

$30,376

$23,631

$19,481

$18,644

% of Total Loans

1.80%

1.75%

1.39%

1.14%

1.12%

Nonperforming loans totaled $30.5 million as of December 31, 2024, an increase of $139,000 from September 30, 2024.

The percentage of the allowance for credit losses on loans to nonperforming loans decreased to 67% as of December 31, 2024, from 72% as of September 30, 2024, and from 94% as of December 31, 2023. This ratio continued to decline as higher balances of real estate loans are included in nonperforming assets with no significant corresponding increase to the ACLL as these collateral dependent loans were considered adequately reserved for based on information available at each period end.

Disclaimer

First Northwest Bancorp published this content on March 18, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 18, 2025 at 15:24:06.846.