"We are making good progress on our small business lending program, operating accounts for small to medium sized businesses and an enhancement to our digital business banking platform. We are also focused on reducing our reliance on term deposits, both brokered and retail. Term deposits decreased during the quarter by
"We completed our 2020 stock buyback plan during the quarter and to date have repurchased over 25% of the shares issued in our 2015 initial public offering. On
The Board of Directors of
2024 FINANCIAL RESULTS | 1Q 24 | 4Q 23 | 1Q 23 | |||||||||
OPERATING RESULTS (in millions) | ||||||||||||
Net income (loss) | $ | 0.4 | $ | (5.5 | ) | $ | 3.5 | |||||
Pre-provision net interest income | 13.9 | 14.2 | 16.3 | |||||||||
Noninterest expense | 14.3 | 17.0 | 14.9 | |||||||||
Total revenue, net of interest expense * | 16.1 | 11.3 | 18.6 | |||||||||
PER SHARE DATA | ||||||||||||
Basic and diluted earnings (loss) | $ | 0.04 | $ | (0.62 | ) | $ | 0.39 | |||||
Book value | 17.00 | 16.99 | 16.57 | |||||||||
Tangible book value * | 16.83 | 16.83 | 16.38 | |||||||||
BALANCE SHEET (in millions) | ||||||||||||
Total assets | $ | 2,240 | $ | 2,202 | $ | 2,172 | ||||||
Total loans | 1,711 | 1,660 | 1,579 | |||||||||
Total deposits | 1,667 | 1,677 | 1,594 | |||||||||
Total shareholders' equity | 161 | 163 | 160 | |||||||||
ASSET QUALITY | ||||||||||||
Net charge-off ratio (1) | 0.19 | % | 0.14 | % | 0.25 | % | ||||||
Nonperforming assets to total assets | 0.87 | 0.85 | 0.12 | |||||||||
Allowance for credit losses on loans | ||||||||||||
to total loans | 1.05 | 1.05 | 1.10 | |||||||||
Nonaccrual loan coverage ratio | 92 | 94 | 661 | |||||||||
SELECTED RATIOS | ||||||||||||
Return on average assets (1) | 0.07 | % | -1.03 | % | 0.70 | % | ||||||
Return on average equity (1) | 0.98 | -14.05 | 8.98 | |||||||||
Return on average tangible equity (1) * | 0.99 | -14.20 | 9.08 | |||||||||
Net interest margin | 2.76 | 2.84 | 3.46 | |||||||||
Efficiency ratio | 88.75 | 150.81 | 79.78 | |||||||||
Bank common equity tier 1 (CETI) ratio | 12.56 | 13.12 | 13.34 | |||||||||
Bank total risk-based capital ratio | 13.57 | 14.11 | 14.35 |
(1) Performance ratios are annualized, where appropriate.
* See reconciliation of Non-GAAP Financial Measures later in this release.
2024 Highlights | |
• | First Fed Bank ("First Fed" or "Bank") continues to restructure the balance sheet to improve the yield on earning assets. |
- During the first quarter, First Fed purchased | |
- Executed a new loan hedge that added 3 basis points to the net interest margin in the first quarter. | |
- Initiated conversion of lower-yielding bank-owned life insurance ("BOLI") policies expected to be finalized in the third quarter. | |
- Improved earning assets yield by 15 basis points over the prior quarter to 5.42%. | |
• | Loans grew during the first quarter by $51.4 million, or 3.1%, to $1.71 billion, with a weighted-average yield on new loans of 8.2%. |
• | The Company added |
• | Hired seasoned professionals to lead digital innovation and commercial business lending. |
• | Repurchased 214,132 shares of Company stock during the quarter, which closed out the |
• | New share repurchase plan approved in |
• | Customer deposits increased 0.4% to $1.47 billion while reliance on brokered deposits decreased 7.4% during the first quarter. |
• | Estimated insured deposits totaled |
• | Classified loans remained flat compared to |
• | Expense management resulted in operating expenses of |
The Bank continued efforts to restructure the balance sheet to improve the earning asset yield, which started in the fourth quarter of 2023. Investment security purchases during the first quarter of 2024 totaled
Also in the first quarter of 2024, we established a fair value hedge on loans to manage ongoing interest rate risk by reducing liability sensitivity while also increasing interest income. It is a four-year fixed-for-floating contract. We estimate that if rates remain flat, this hedge will add
The balance sheet restructure plan also includes the surrender of
In addition to our new board member,
Net Interest Income
Total interest income increased $1.0 million to $27.3 million for the first quarter of 2024, compared to $26.3 million in the previous quarter, and increased $4.0 million compared to $23.3 million in the first quarter of 2023. Interest income increased in the current quarter due to higher yields on loans, investments and interest-earning deposits in banks and an increased volume of loans. Interest and fees on loans increased year-over-year as First Fed's loan portfolio grew as a result of draws on new and existing lines of credit, originations of multi-family and home equity loans, and auto and manufactured home loan purchases. Loan yields increased over the prior year due to higher rates on new originations as well as the repricing of variable rate loans tied to the Prime Rate or other indices.
Total interest expense increased $1.3 million to $13.4 million for the first quarter of 2024, compared to $12.1 million in the fourth quarter of 2023, and increased
Net interest income before provision for credit losses for the first quarter of 2024 decreased $267,000, or 1.9%, to
The Company recorded a
The net interest margin decreased to 2.76% for the first quarter of 2024, from 2.84% for the prior quarter, and decreased 70 basis points from 3.46% for the first quarter of 2023. Decreases from both the prior quarter and the same quarter one year ago are due to higher funding costs for deposits and borrowed funds. The weighted-average yield on new loan originations was 8.2%, which partially offset the increase in the cost of funds. Organic loan production was augmented with higher-yielding purchased loans through established third-party relationships. Interest income on the Bank's fair value hedging agreements on securities increased quarter-over-quarter by
The yield on average earning assets for the first quarter of 2024 increased 15 basis points to 5.42% compared to the fourth quarter of 2023 and increased 47 basis points from 4.95% for the first quarter of 2023. The first quarter increase is primarily attributable to higher loan rates at origination and increased yields on variable-rate loans. The year-over-year increase was primarily due to higher average loan balances augmented by increases in yields, which were positively impacted by the rising rate environment and overall improvements in the mix of interest-earning assets.
The cost of average interest-bearing liabilities increased 27 basis points to 3.14% for the first quarter of 2024, compared to 2.87% for the fourth quarter of 2023, and increased 133 basis points from 1.81% for the first quarter of 2023. Total cost of funds increased to 2.74% for the first quarter of 2024 from 2.48% in the prior quarter and increased from 1.53% for the first quarter of 2023.
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 volume of brokered CDs decreased to $192.2 million from the linked quarter. Brokered offerings were issued at nominally higher rates.
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 28.4%, 30.2% and 22.8% of retail deposits at
Selected Yields | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Loan yield | 5.51 | % | 5.38 | % | 5.31 | % | 5.38 | % | 5.16 | % | ||||||||||
Investment securities yield | 4.75 | 4.53 | 4.18 | 4.09 | 3.93 | |||||||||||||||
Cost of interest-bearing deposits | 2.86 | 2.52 | 2.22 | 1.87 | 1.37 | |||||||||||||||
Cost of total deposits | 2.43 | 2.12 | 1.85 | 1.54 | 1.12 | |||||||||||||||
Cost of borrowed funds | 4.52 | 4.50 | 4.45 | 4.36 | 3.92 | |||||||||||||||
Net interest spread | 2.28 | 2.40 | 2.54 | 2.84 | 3.14 | |||||||||||||||
Net interest margin | 2.76 | 2.84 | 2.97 | 3.25 | 3.46 | |||||||||||||||
Noninterest Income
Noninterest income increased to
Noninterest income decreased 6.3% from
Noninterest Income | ||||||||||||||||||||
$ in thousands | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Loan and deposit service fees | $ | 1,102 | $ | 1,068 | $ | 1,068 | 1,064 | $ | 1,141 | |||||||||||
Sold loan servicing fees and servicing rights mark-to-market | 219 | 276 | 98 | (191 | ) | 493 | ||||||||||||||
Net gain on sale of loans | 52 | 33 | 171 | 58 | 176 | |||||||||||||||
Net (loss) gain on sale of investment securities | — | (5,397 | ) | — | — | — | ||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 243 | 260 | 252 | 190 | 226 | |||||||||||||||
Other income | 572 | 831 | 1,315 | 590 | 298 | |||||||||||||||
Total noninterest income | $ | 2,188 | $ | (2,929 | ) | $ | 2,904 | $ | 1,711 | $ | 2,334 | |||||||||
Noninterest Expense
Noninterest expense totaled $14.3 million for the first quarter of 2024, compared to $17.0 million for the preceding quarter and $14.9 million for the first quarter a year ago. Other expense decreased this quarter due to the one-time entries recorded in the fourth quarter of 2023 of
The decrease in total noninterest expenses compared to the first quarter of 2023 is mainly due to lower advertising costs. The Company continues to focus on controlling compensation expense and reducing advertising and other discretionary spending while the net interest margin compression due to higher market rates and an inverted yield curve persists. We do not anticipate a recurrence of any of the one-time charges referred to previously.
Noninterest Expense | ||||||||||||||||||||
$ in thousands | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Compensation and benefits | $ | 8,128 | $ | 7,397 | $ | 7,795 | $ | 8,180 | $ | 7,837 | ||||||||||
Data processing | 1,944 | 2,107 | 1,945 | 2,080 | 2,038 | |||||||||||||||
Occupancy and equipment | 1,240 | 1,262 | 1,173 | 1,214 | 1,209 | |||||||||||||||
Supplies, postage, and telephone | 293 | 351 | 292 | 435 | 355 | |||||||||||||||
Regulatory assessments and state taxes | 513 | 376 | 446 | 424 | 389 | |||||||||||||||
Advertising | 309 | 235 | 501 | 929 | 1,041 | |||||||||||||||
Professional fees | 910 | 1,119 | 929 | 884 | 806 | |||||||||||||||
386 | 418 | 369 | 313 | 257 | ||||||||||||||||
Other expense | 580 | 3,725 | 926 | 758 | 939 | |||||||||||||||
Total noninterest expense | $ | 14,303 | $ | 16,990 | $ | 14,376 | $ | 15,217 | $ | 14,871 | ||||||||||
Efficiency ratio | 88.75 | % | 150.81 | % | 80.52 | % | 86.01 | % | 79.78 | % | ||||||||||
Investment securities increased
The estimated average life of the securities portfolio was approximately 7.78 years, compared to 7.69 years in the prior quarter and 8.08 years in the first quarter of 2023. The effective duration of the portfolio was approximately 4.41 years at
Investment Securities Available for Sale, at Fair Value | ||||||||||||||||||||
$ in thousands | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Municipal bonds | $ | 87,004 | $ | 87,761 | $ | 93,995 | $ | 100,503 | $ | 101,910 | ||||||||||
— | — | 2,377 | 2,364 | 2,390 | ||||||||||||||||
International agency issued bonds (Agency bonds) | — | — | 1,703 | 1,717 | 1,745 | |||||||||||||||
14,822 | 11,782 | — | — | — | ||||||||||||||||
Corporate issued asset-backed securities (ABS corporate) | 13,929 | 5,286 | — | — | — | |||||||||||||||
Corporate issued debt securities (Corporate debt): | ||||||||||||||||||||
Senior positions | 13,617 | 9,270 | 16,975 | 16,934 | 17,025 | |||||||||||||||
Subordinated bank notes | 39,414 | 42,184 | 37,360 | 36,740 | 38,092 | |||||||||||||||
7,911 | — | — | — | — | ||||||||||||||||
Mortgage-backed securities: | ||||||||||||||||||||
83,271 | 63,247 | 66,946 | 71,565 | 74,946 | ||||||||||||||||
Non-agency issued mortgage-backed securities (MBS non-agency) | 65,987 | 76,093 | 89,968 | 92,140 | 92,978 | |||||||||||||||
Total securities available for sale, at fair value | $ | 325,955 | $ | 295,623 | $ | 309,324 | $ | 321,963 | $ | 329,086 | ||||||||||
Loans and Unfunded Loan Commitments
Net loans, excluding loans held for sale, increased
Commercial business loans increased
Construction loans decreased
The Company originated $5.0 million in residential mortgages during the first quarter of 2023 and sold
Loans by Collateral and Unfunded Commitments | ||||||||||||||||||||
$ in thousands | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
One-to-four family construction | $ | 70,100 | $ | 60,211 | $ | 72,991 | $ | 74,787 | $ | 65,770 | ||||||||||
All other construction and land | 55,286 | 69,484 | 71,092 | 81,968 | 95,769 | |||||||||||||||
One-to-four family first mortgage | 436,543 | 426,159 | 409,207 | 428,879 | 394,595 | |||||||||||||||
One-to-four family junior liens | 12,608 | 12,250 | 12,859 | 11,956 | 9,140 | |||||||||||||||
One-to-four family revolving open-end | 45,536 | 42,479 | 38,413 | 33,658 | 30,473 | |||||||||||||||
Commercial real estate, owner occupied: | ||||||||||||||||||||
Health care | 29,946 | 22,523 | 22,677 | 23,157 | 23,311 | |||||||||||||||
Office | 17,951 | 18,468 | 18,599 | 18,797 | 22,246 | |||||||||||||||
Warehouse | 14,683 | 14,758 | 14,890 | 15,158 | 16,782 | |||||||||||||||
Other | 55,063 | 61,304 | 57,414 | 60,054 | 52,212 | |||||||||||||||
Commercial real estate, non-owner occupied: | ||||||||||||||||||||
Office | 53,099 | 53,548 | 53,879 | 54,926 | 58,711 | |||||||||||||||
Retail | 50,478 | 51,384 | 51,466 | 51,824 | 52,175 | |||||||||||||||
Hospitality | 66,982 | 67,332 | 61,339 | 53,416 | 45,978 | |||||||||||||||
Other | 93,040 | 94,822 | 96,083 | 90,870 | 93,207 | |||||||||||||||
Multi-family residential | 339,907 | 333,428 | 325,338 | 296,398 | 284,699 | |||||||||||||||
Commercial business loans | 90,781 | 76,920 | 75,068 | 80,079 | 80,825 | |||||||||||||||
Commercial agriculture and fishing loans | 10,200 | 5,422 | 4,437 | 7,844 | 1,829 | |||||||||||||||
State and political subdivision obligations | 405 | 405 | 439 | 439 | 439 | |||||||||||||||
Consumer automobile loans | 139,524 | 132,877 | 134,695 | 137,860 | 136,540 | |||||||||||||||
Consumer loans secured by other assets | 122,895 | 108,542 | 104,999 | 105,653 | 106,360 | |||||||||||||||
Consumer loans unsecured | 6,415 | 7,712 | 9,093 | 10,437 | 8,403 | |||||||||||||||
Total loans | $ | 1,711,442 | $ | 1,660,028 | $ | 1,634,978 | $ | 1,638,160 | $ | 1,579,464 | ||||||||||
Unfunded loan commitments | $ | 51,038 | $ | 149,631 | $ | 154,722 | $ | 168,668 | $ | 202,720 | ||||||||||
Deposits
Total deposits decreased
The Company estimates that
As of
Deposits | ||||||||||||||||||||
$ in thousands | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Noninterest-bearing demand deposits | $ | 252,761 | $ | 252,083 | $ | 269,800 | $ | 280,475 | $ | 292,119 | ||||||||||
Interest-bearing demand deposits | 170,729 | 169,418 | 182,361 | 179,029 | 189,187 | |||||||||||||||
Money market accounts | 395,480 | 362,205 | 372,706 | 374,269 | 402,760 | |||||||||||||||
Savings accounts | 236,550 | 242,148 | 253,182 | 260,279 | 242,117 | |||||||||||||||
Certificates of deposit, retail | 418,904 | 443,412 | 410,136 | 379,484 | 333,510 | |||||||||||||||
Total retail deposits | 1,474,424 | 1,469,266 | 1,488,185 | 1,473,536 | 1,459,693 | |||||||||||||||
Certificates of deposit, brokered | 192,200 | 207,626 | 169,577 | 179,586 | 134,515 | |||||||||||||||
Total deposits | $ | 1,666,624 | $ | 1,676,892 | $ | 1,657,762 | $ | 1,653,122 | $ | 1,594,208 | ||||||||||
Public fund and tribal deposits included in total deposits | $ | 134,120 | $ | 132,652 | $ | 128,627 | $ | 130,974 | $ | 119,969 | ||||||||||
Total loans to total deposits | 103 | % | 99 | % | 99 | % | 99 | % | 99 | % |
Deposit Mix | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Noninterest-bearing demand deposits | 15.2 | % | 15.0 | % | 16.3 | % | 17.0 | % | 18.3 | % | ||||||||||
Interest-bearing demand deposits | 10.2 | 10.1 | 11.0 | 10.8 | 11.9 | |||||||||||||||
Money market accounts | 23.7 | 21.6 | 22.5 | 22.6 | 25.3 | |||||||||||||||
Savings accounts | 14.2 | 14.4 | 15.3 | 15.7 | 15.2 | |||||||||||||||
Certificates of deposit, retail | 25.2 | 26.5 | 24.7 | 23.0 | 20.9 | |||||||||||||||
Certificates of deposit, brokered | 11.5 | 12.4 | 10.2 | 10.9 | 8.4 |
Cost of Deposits for the Quarter Ended | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Interest-bearing demand deposits | 0.45 | % | 0.45 | % | 0.46 | % | 0.45 | % | 0.42 | % | ||||||||||
Money market accounts | 2.08 | 1.48 | 1.22 | 0.99 | 0.73 | |||||||||||||||
Savings accounts | 1.63 | 1.54 | 1.42 | 1.22 | 0.70 | |||||||||||||||
Certificates of deposit, retail | 4.13 | 3.92 | 3.52 | 3.25 | 2.59 | |||||||||||||||
Certificates of deposit, brokered | 4.94 | 4.72 | 4.31 | 3.44 | 2.99 | |||||||||||||||
Cost of total deposits | 2.43 | 2.12 | 1.85 | 1.54 | 1.12 | |||||||||||||||
Asset Quality
Nonperforming loans were $19.5 million at
The allowance for credit losses on loans as a percentage of total loans was 1.05% at
$ in thousands | 1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | |||||||||||||||
Allowance for credit losses on loans to total loans | 1.05 | % | 1.05 | % | 1.04 | % | 1.06 | % | 1.10 | % | ||||||||||
Allowance for credit losses on loans to nonaccrual loans | 92 | 94 | 714 | 677 | 661 | |||||||||||||||
Nonaccrual loans to total loans | 1.14 | 1.12 | 0.15 | 0.16 | 0.17 | |||||||||||||||
Net charge-off ratio (annualized) | 0.19 | 0.14 | 0.30 | 0.10 | 0.25 | |||||||||||||||
Total nonaccrual loans | $ | 19,481 | $ | 18,644 | $ | 2,374 | $ | 2,554 | $ | 2,633 | ||||||||||
Reserve for unfunded commitments | $ | 548 | $ | 817 | $ | 828 | $ | 1,336 | $ | 1,336 | ||||||||||
Capital
Total shareholders’ equity decreased to
Book value per common share was $17.00 at
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
1Q 24 | 4Q 23 | 3Q 23 | 2Q 23 | 1Q 23 | ||||||||||||||||
Equity to total assets | 7.17 | % | 7.42 | % | 7.25 | % | 7.38 | % | 7.38 | % | ||||||||||
Tangible common equity to tangible assets * | 7.10 | 7.35 | 7.17 | 7.31 | 7.30 | |||||||||||||||
Capital ratios ( | ||||||||||||||||||||
Tier 1 leverage | 9.74 | 9.90 | 10.12 | 10.16 | 10.41 | |||||||||||||||
Common equity Tier 1 capital | 12.56 | 13.12 | 13.43 | 13.10 | 13.34 | |||||||||||||||
Tier 1 risk-based | 12.56 | 13.12 | 13.43 | 13.10 | 13.34 | |||||||||||||||
Total risk-based | 13.57 | 14.11 | 14.38 | 14.08 | 14.35 | |||||||||||||||
Share Repurchase Program and Cash Dividend
First Northwest continued to return capital to our shareholders through cash dividends and share repurchases during the first quarter of 2024. We repurchased 214,132 shares of common stock under the Company's
* 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 | |
In | |
In | |
In | |
First Fed has been rated a 5-star bank by Bauer Financial, a leading independent bank and credit union rating and research firm. This top rating indicates that First Fed is one of the strongest banks in the nation based on capital, loan quality and other detailed performance criteria. | |
About the Company
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
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:
IRGroup@ourfirstfed.com
360-457-0461
FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (Unaudited) | ||||||||||||||||||||
Three Month Change | One Year Change | |||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 15,562 | $ | 19,845 | $ | 17,844 | -21.6 | % | -12.8 | % | ||||||||||
Interest-earning deposits in banks | 61,784 | 103,324 | 122,773 | -40.2 | -49.7 | |||||||||||||||
Investment securities available for sale, at fair value | 325,955 | 295,623 | 329,086 | 10.3 | -1.0 | |||||||||||||||
Loans held for sale | 988 | 753 | — | 31.2 | 100.0 | |||||||||||||||
Loans receivable (net of allowance for credit losses on loans | 1,692,774 | 1,642,518 | 1,562,068 | 3.1 | 8.4 | |||||||||||||||
15,876 | 13,664 | 15,602 | 16.2 | 1.8 | ||||||||||||||||
Accrued interest receivable | 8,909 | 7,894 | 7,205 | 12.9 | 23.7 | |||||||||||||||
Premises and equipment, net | 11,028 | 18,049 | 18,252 | -38.9 | -39.6 | |||||||||||||||
Premises held for sale, net | 6,751 | — | — | 100.0 | 100.0 | |||||||||||||||
Servicing rights on sold loans, at fair value | 3,820 | 3,793 | 4,224 | 0.7 | -9.6 | |||||||||||||||
Bank-owned life insurance, net | 34,681 | 40,578 | 39,878 | -14.5 | -13.0 | |||||||||||||||
Equity and partnership investments | 15,121 | 14,794 | 14,392 | 2.2 | 5.1 | |||||||||||||||
1,085 | 1,086 | 1,088 | -0.1 | -0.3 | ||||||||||||||||
Deferred tax asset, net | 12,704 | 13,001 | 14,211 | -2.3 | -10.6 | |||||||||||||||
Prepaid expenses and other assets | 32,982 | 26,875 | 25,471 | 22.7 | 29.5 | |||||||||||||||
Total assets | $ | 2,240,020 | $ | 2,201,797 | $ | 2,172,094 | 1.7 | % | 3.1 | % | ||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||
Deposits | $ | 1,666,624 | $ | 1,676,892 | $ | 1,594,208 | -0.6 | % | 4.5 | % | ||||||||||
Borrowings | 371,455 | 320,936 | 379,377 | 15.7 | -2.1 | |||||||||||||||
Accrued interest payable | 2,830 | 3,396 | 508 | -16.7 | 457.1 | |||||||||||||||
Accrued expenses and other liabilities | 36,207 | 35,973 | 35,255 | 0.7 | 2.7 | |||||||||||||||
Advances from borrowers for taxes and insurance | 2,398 | 1,260 | 2,410 | 90.3 | -0.5 | |||||||||||||||
Total liabilities | 2,079,514 | 2,038,457 | 2,011,758 | 2.0 | 3.4 | |||||||||||||||
Shareholders' Equity | ||||||||||||||||||||
Preferred stock, | — | — | — | n/a | n/a | |||||||||||||||
Common stock, | 94 | 96 | 97 | -2.1 | -3.1 | |||||||||||||||
Additional paid-in capital | 93,763 | 95,784 | 95,333 | -2.1 | -1.6 | |||||||||||||||
Retained earnings | 106,202 | 107,349 | 114,139 | -1.1 | -7.0 | |||||||||||||||
Accumulated other comprehensive loss, net of tax | (32,465 | ) | (32,636 | ) | (38,108 | ) | 0.5 | 14.8 | ||||||||||||
Unearned employee stock ownership plan (ESOP) shares | (7,088 | ) | (7,253 | ) | (7,749 | ) | 2.3 | 8.5 | ||||||||||||
Total parent's shareholders' equity | 160,506 | 163,340 | 163,712 | -1.7 | -2.0 | |||||||||||||||
Noncontrolling interest in | — | — | (3,376 | ) | n/a | 100.0 | ||||||||||||||
Total shareholders' equity | 160,506 | 163,340 | 160,336 | -1.7 | 0.1 | |||||||||||||||
Total liabilities and shareholders' equity | $ | 2,240,020 | $ | 2,201,797 | $ | 2,172,094 | 1.7 | % | 3.1 | % |
FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited) | ||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||
Three Month Change | One Year Change | |||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Interest and fees on loans receivable | $ | 22,767 | $ | 22,083 | $ | 19,504 | 3.1 | % | 16.7 | % | ||||||||||
Interest on investment securities | 3,632 | 3,393 | 3,182 | 7.0 | 14.1 | |||||||||||||||
Interest on deposits in banks | 645 | 581 | 404 | 11.0 | 59.7 | |||||||||||||||
FHLB dividends | 282 | 252 | 192 | 11.9 | 46.9 | |||||||||||||||
Total interest income | 27,326 | 26,309 | 23,282 | 3.9 | 17.4 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Deposits | 10,112 | 8,758 | 4,353 | 15.5 | 132.3 | |||||||||||||||
Borrowings | 3,286 | 3,356 | 2,624 | -2.1 | 25.2 | |||||||||||||||
Total interest expense | 13,398 | 12,114 | 6,977 | 10.6 | 92.0 | |||||||||||||||
Net interest income | 13,928 | 14,195 | 16,305 | -1.9 | -14.6 | |||||||||||||||
PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||
Provision for (recapture of) credit losses on loans | 1,239 | 1,162 | (515 | ) | 6.6 | 340.6 | ||||||||||||||
(Recapture of) provision for credit losses on unfunded commitments | (269 | ) | (10 | ) | 15 | -2,590.0 | -1,893.3 | |||||||||||||
Provision for (recapture of) credit losses | 970 | 1,152 | (500 | ) | -15.8 | 294.0 | ||||||||||||||
Net interest income after provision for (recapture of) credit losses | 12,958 | 13,043 | 16,805 | -0.7 | -22.9 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Loan and deposit service fees | 1,102 | 1,068 | 1,141 | 3.2 | -3.4 | |||||||||||||||
Sold loan servicing fees and servicing rights mark-to-market | 219 | 276 | 493 | -20.7 | -55.6 | |||||||||||||||
Net gain on sale of loans | 52 | 33 | 176 | 57.6 | -70.5 | |||||||||||||||
Net (loss) gain on sale of investment securities | — | (5,397 | ) | — | 100.0 | n/a | ||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 243 | 260 | 226 | -6.5 | 7.5 | |||||||||||||||
Other income | 572 | 831 | 298 | -31.2 | 91.9 | |||||||||||||||
Total noninterest income | 2,188 | (2,929 | ) | 2,334 | 174.7 | -6.3 | ||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Compensation and benefits | 8,128 | 7,397 | 7,837 | 9.9 | 3.7 | |||||||||||||||
Data processing | 1,944 | 2,107 | 2,038 | -7.7 | -4.6 | |||||||||||||||
Occupancy and equipment | 1,240 | 1,262 | 1,209 | -1.7 | 2.6 | |||||||||||||||
Supplies, postage, and telephone | 293 | 351 | 355 | -16.5 | -17.5 | |||||||||||||||
Regulatory assessments and state taxes | 513 | 376 | 389 | 36.4 | 31.9 | |||||||||||||||
Advertising | 309 | 235 | 1,041 | 31.5 | -70.3 | |||||||||||||||
Professional fees | 910 | 1,119 | 806 | -18.7 | 12.9 | |||||||||||||||
386 | 418 | 257 | -7.7 | 50.2 | ||||||||||||||||
Other expense | 580 | 3,725 | 939 | -84.4 | -38.2 | |||||||||||||||
Total noninterest expense | 14,303 | 16,990 | 14,871 | -15.8 | -3.8 | |||||||||||||||
Income before provision (benefit) for income taxes | 843 | (6,876 | ) | 4,268 | 112.3 | -80.2 | ||||||||||||||
Provision (benefit) for income taxes | 447 | (1,354 | ) | 825 | 133.0 | -45.8 | ||||||||||||||
Net income (loss) | 396 | (5,522 | ) | 3,443 | 107.2 | -88.5 | ||||||||||||||
Net loss attributable to noncontrolling interest in | — | — | 85 | n/a | -100.0 | |||||||||||||||
Net income (loss) attributable to parent | $ | 396 | $ | (5,522 | ) | $ | 3,528 | 107.2 | % | -88.8 | % | |||||||||
Basic and diluted earnings (loss) per common share | $ | 0.04 | $ | (0.62 | ) | $ | 0.39 | 106.5 | % | -89.7 | % | |||||||||
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 | ||||||||||||||||||||
Performance ratios: (1) | ||||||||||||||||||||
Return on average assets | 0.07 | % | -1.03 | % | 0.46 | % | 0.34 | % | 0.70 | % | ||||||||||
Return on average equity | 0.98 | (14.05 | ) | 6.17 | 4.41 | 8.98 | ||||||||||||||
Average interest rate spread | 2.28 | 2.40 | 2.54 | 2.84 | 3.14 | |||||||||||||||
Net interest margin (2) | 2.76 | 2.84 | 2.97 | 3.25 | 3.46 | |||||||||||||||
Efficiency ratio (3) | 88.8 | 150.8 | 80.5 | 86.0 | 79.8 | |||||||||||||||
Equity to total assets | 7.17 | 7.42 | 7.25 | 7.38 | 7.38 | |||||||||||||||
Average interest-earning assets to average interest-bearing liabilities | 118.3 | 118.2 | 120.0 | 120.7 | 122.4 | |||||||||||||||
Book value per common share | $ | 17.00 | $ | 16.99 | $ | 16.20 | $ | 16.56 | $ | 16.57 | ||||||||||
Tangible performance ratios: (1) | ||||||||||||||||||||
Tangible common equity to tangible assets (4) | 7.10 | % | 7.35 | % | 7.17 | % | 7.31 | % | 7.30 | % | ||||||||||
Return on average tangible common equity (4) | 0.99 | (14.20 | ) | 6.23 | 4.47 | 9.08 | ||||||||||||||
Tangible book value per common share (4) | $ | 16.83 | $ | 16.83 | $ | 16.03 | $ | 16.39 | $ | 16.38 | ||||||||||
Asset quality ratios: | ||||||||||||||||||||
Nonperforming assets to total assets at end of period (5) | 0.87 | % | 0.85 | % | 0.11 | % | 0.12 | % | 0.12 | % | ||||||||||
Nonaccrual loans to total loans (6) | 1.14 | 1.12 | 0.15 | 0.16 | 0.17 | |||||||||||||||
Allowance for credit losses on loans to nonaccrual loans (6) | 92.18 | 93.92 | 713.77 | 677.25 | 660.69 | |||||||||||||||
Allowance for credit losses on loans to total loans | 1.05 | 1.05 | 1.04 | 1.06 | 1.10 | |||||||||||||||
Annualized net charge-offs to average outstanding loans | 0.19 | 0.14 | 0.30 | 0.10 | 0.25 | |||||||||||||||
Capital ratios ( | ||||||||||||||||||||
Tier 1 leverage | 9.7 | % | 9.9 | % | 10.1 | % | 10.2 | % | 10.4 | % | ||||||||||
Common equity Tier 1 capital | 12.6 | 13.1 | 13.4 | 13.1 | 13.3 | |||||||||||||||
Tier 1 risk-based | 12.6 | 13.1 | 13.4 | 13.1 | 13.3 | |||||||||||||||
Total risk-based | 13.6 | 14.1 | 14.4 | 14.1 | 14.4 | |||||||||||||||
Other Information: | ||||||||||||||||||||
Average total assets | $ | 2,166,187 | $ | 2,127,655 | $ | 2,139,734 | $ | 2,118,014 | $ | 2,050,210 | ||||||||||
Average total loans | 1,678,656 | 1,645,418 | 1,641,206 | 1,605,133 | 1,552,299 | |||||||||||||||
Average interest-earning assets | 2,027,821 | 1,980,226 | 1,994,251 | 1,975,384 | 1,909,271 | |||||||||||||||
Average noninterest-bearing deposits | 249,283 | 259,845 | 276,294 | 282,514 | 294,235 | |||||||||||||||
Average interest-bearing deposits | 1,422,116 | 1,379,059 | 1,377,734 | 1,333,943 | 1,288,429 | |||||||||||||||
Average interest-bearing liabilities | 1,714,474 | 1,675,044 | 1,661,996 | 1,636,188 | 1,559,983 | |||||||||||||||
Average equity | 161,867 | 155,971 | 160,994 | 161,387 | 159,319 | |||||||||||||||
Average common shares -- basic | 8,876,236 | 8,928,620 | 8,906,526 | 8,914,355 | 8,911,294 | |||||||||||||||
Average common shares -- diluted | 8,907,184 | 8,968,828 | 8,934,882 | 8,931,386 | 8,939,601 | |||||||||||||||
Tangible assets (4) | 2,238,446 | 2,200,230 | 2,151,849 | 2,161,235 | 2,170,202 | |||||||||||||||
Tangible common equity (4) | 158,932 | 161,773 | 154,369 | 157,914 | 158,444 |
(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) | ||||||||||||||||||||
Three Month Change | One Year Change | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Real Estate: | ||||||||||||||||||||
One-to-four family | $ | 383,905 | $ | 378,432 | $ | 354,522 | $ | 5,473 | $ | 29,383 | ||||||||||
Multi-family | 339,538 | 333,094 | 284,863 | 6,444 | 54,675 | |||||||||||||||
Commercial real estate | 385,130 | 387,983 | 373,013 | (2,853 | ) | 12,117 | ||||||||||||||
Construction and land | 125,347 | 129,691 | 161,662 | (4,344 | ) | (36,315 | ) | |||||||||||||
Total real estate loans | 1,233,920 | 1,229,200 | 1,174,060 | 4,720 | 59,860 | |||||||||||||||
Consumer: | ||||||||||||||||||||
Home equity | 72,391 | 69,403 | 54,116 | 2,988 | 18,275 | |||||||||||||||
Auto and other consumer | 268,834 | 249,130 | 251,302 | 19,704 | 17,532 | |||||||||||||||
Total consumer loans | 341,225 | 318,533 | 305,418 | 22,692 | 35,807 | |||||||||||||||
Commercial business | 136,297 | 112,295 | 99,986 | 24,002 | 36,311 | |||||||||||||||
Total loans receivable | 1,711,442 | 1,660,028 | 1,579,464 | 51,414 | 131,978 | |||||||||||||||
Less: | ||||||||||||||||||||
Derivative basis adjustment | 710 | 0 | 0 | 710 | 710 | |||||||||||||||
Allowance for credit losses on loans | 17,958 | 17,510 | 17,396 | 448 | 562 | |||||||||||||||
Total loans receivable, net | $ | 1,692,774 | $ | 1,642,518 | $ | 1,562,068 | $ | 50,256 | $ | 130,706 | ||||||||||
Selected loan detail:
Three Month Change | One Year Change | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Construction and land loans breakout | ||||||||||||||||||||
1-4 Family construction | $ | 69,075 | $ | 68,029 | $ | 87,269 | $ | 1,046 | $ | (18,194 | ) | |||||||||
Multifamily construction | 45,776 | 50,431 | 51,788 | (4,655 | ) | (6,012 | ) | |||||||||||||
Acquisition-renovation | — | — | 7,096 | — | (7,096 | ) | ||||||||||||||
Nonresidential construction | 3,374 | 3,756 | 6,909 | (382 | ) | (3,535 | ) | |||||||||||||
Land and development | 7,122 | 7,475 | 8,600 | (353 | ) | (1,478 | ) | |||||||||||||
Total construction and land loans | $ | 125,347 | $ | 129,691 | $ | 161,662 | $ | (4,344 | ) | $ | (36,315 | ) | ||||||||
Auto and other consumer loans breakout | ||||||||||||||||||||
Triad Manufactured Home loans | $ | 105,525 | $ | 93,591 | $ | 102,424 | $ | 11,934 | $ | 3,101 | ||||||||||
Woodside auto loans | 128,072 | 124,401 | 123,337 | 3,671 | 4,735 | |||||||||||||||
First Help auto loans | 8,326 | 4,516 | 6,281 | 3,810 | 2,045 | |||||||||||||||
Other auto loans | 3,313 | 4,158 | 7,350 | (845 | ) | (4,037 | ) | |||||||||||||
Other consumer loans | 23,598 | 22,464 | 11,910 | 1,134 | 11,688 | |||||||||||||||
Total auto and other consumer loans | $ | 268,834 | $ | 249,130 | $ | 251,302 | $ | 19,704 | $ | 17,532 | ||||||||||
Commercial business loans breakout | ||||||||||||||||||||
PPP loans | $ | 18 | $ | 32 | $ | 72 | $ | (14 | ) | $ | (54 | ) | ||||||||
Northpointe Bank MPP | 15,047 | 9,502 | — | 5,545 | 15,047 | |||||||||||||||
Secured lines of credit | 41,014 | 35,815 | 30,723 | 5,199 | 10,291 | |||||||||||||||
Unsecured lines of credit | 1,001 | 456 | 588 | 545 | 413 | |||||||||||||||
SBA loans | 8,944 | 9,115 | 8,805 | (171 | ) | 139 | ||||||||||||||
Other commercial business loans | 70,273 | 57,375 | 59,798 | 12,898 | 10,475 | |||||||||||||||
Total commercial business loans | $ | 136,297 | $ | 112,295 | $ | 99,986 | $ | 24,002 | $ | 36,311 |
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
Calculation of Total Revenue:
(Dollars in thousands) | ||||||||||||||||||||
Net interest income | $ | 13,928 | $ | 14,195 | $ | 14,950 | $ | 15,982 | $ | 16,305 | ||||||||||
Noninterest income | 2,188 | (2,929 | ) | 2,904 | 1,711 | 2,334 | ||||||||||||||
Total revenue, net of interest expense (1) | $ | 16,116 | $ | 11,266 | $ | 17,854 | $ | 17,693 | $ | 18,639 |
(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:
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Total shareholders' equity | $ | 160,506 | $ | 163,340 | $ | 156,065 | $ | 159,557 | $ | 160,336 | ||||||||||
Less: | 1,085 | 1,086 | 1,087 | 1,087 | 1,088 | |||||||||||||||
Disallowed non-mortgage loan servicing rights | 489 | 481 | 609 | 556 | 804 | |||||||||||||||
Total tangible common equity | $ | 158,932 | $ | 161,773 | $ | 154,369 | $ | 157,914 | $ | 158,444 | ||||||||||
Total assets | $ | 2,240,020 | $ | 2,201,797 | $ | 2,153,545 | $ | 2,162,878 | $ | 2,172,094 | ||||||||||
Less: | 1,085 | 1,086 | 1,087 | 1,087 | 1,088 | |||||||||||||||
Disallowed non-mortgage loan servicing rights | 489 | 481 | 609 | 556 | 804 | |||||||||||||||
Total tangible assets | $ | 2,238,446 | $ | 2,200,230 | $ | 2,151,849 | $ | 2,161,235 | $ | 2,170,202 | ||||||||||
Average shareholders' equity | $ | 161,867 | $ | 155,971 | $ | 160,994 | $ | 161,387 | $ | 159,319 | ||||||||||
Less: Average goodwill and other intangible assets | 1,085 | 1,086 | 1,087 | 1,088 | 1,089 | |||||||||||||||
Average disallowed non-mortgage loan servicing rights | 481 | 608 | 557 | 801 | 715 | |||||||||||||||
Total average tangible common equity | $ | 160,301 | $ | 154,277 | $ | 159,350 | $ | 159,498 | $ | 157,515 | ||||||||||
Tangible common equity to tangible assets (1) | 7.10 | % | 7.35 | % | 7.17 | % | 7.31 | % | 7.30 | % | ||||||||||
Net income (loss) | $ | 396 | $ | (5,522 | ) | $ | 2,504 | $ | 1,776 | $ | 3,528 | |||||||||
Return on average tangible common equity (1) | 0.99 | % | -14.20 | % | 6.23 | % | 4.47 | % | 9.08 | % | ||||||||||
Common shares outstanding | 9,442,796 | 9,611,876 | 9,630,735 | 9,633,496 | 9,674,055 | |||||||||||||||
Tangible book value per common share (1) | $ | 16.83 | $ | 16.83 | $ | 16.03 | $ | 16.39 | $ | 16.38 | ||||||||||
GAAP Ratios: | ||||||||||||||||||||
Equity to total assets | 7.17 | % | 7.42 | % | 7.25 | % | 7.38 | % | 7.38 | % | ||||||||||
Return on average equity | 0.98 | % | -14.05 | % | 6.17 | % | 4.41 | % | 8.98 | % | ||||||||||
Book value per common share | $ | 17.00 | $ | 16.99 | $ | 16.20 | $ | 16.56 | $ | 16.57 |
(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. |
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