First Northwest Bancorp (FNWB) Q2 2025 earnings summary

Executive summary

• Net income of $3.7 million for Q2 2025 reversed prior losses, with EPS at $0.42, driven by lower provision for credit losses and reduced noninterest expense, despite a decline in noninterest income and higher tax provision.

• For the six months ended June 30, 2025, a net loss of $5.4 million was recorded, compared to net income of $1.8 million for the same period in 2024, mainly due to higher provision for credit losses and increased noninterest expense.

• Adjusted PPNR improved to $2.1 million, marking the fifth consecutive quarter of growth.

• Board did not declare a dividend for Q2 2025, citing prudent capital management.

• CEO search is ongoing; legal matters and management turnover continue to be actively managed.

Financial highlights

• Net interest margin improved to 2.83% in Q2 2025 from 2.76% in Q2 2024 and Q1 2025.

• Net interest income for Q2 2025 was $14.19 million, nearly flat year-over-year, as lower asset yields were offset by reduced funding costs.

• Provision for credit losses was a $360,000 recapture in Q2 2025, compared to an $8.7 million provision in Q2 2024; for the six months, provision was $7.5 million, down from $9.9 million year-over-year.

• Noninterest income fell 70.5% to $2.2 million in Q2 2025, mainly due to the absence of a prior-year $7.9 million gain on sale-leaseback and a $2.1 million loss on securities.

• Noninterest expense dropped 18.2% to $12.8 million in Q2 2025, aided by a $2.6 million employee retention credit and workforce reductions.

Outlook and guidance

• Management and board remain focused on controlling expenses, improving earnings, and managing credit risk amid economic uncertainty and competitive deposit markets.

• The company expects continued competition for deposits and is adjusting rates and products to retain and attract balances.

• Ongoing monitoring of economic conditions and credit quality is emphasized, with the allowance for credit losses considered adequate as of June 30, 2025.

• Future dividend decisions will be evaluated in light of long-term strategy.