First Northwest Bancorp (FNWB) Q3 2024 earnings summary

Executive summary

• Net loss of $2.0 million for Q3 2024, compared to net income of $2.5 million in Q3 2023, driven by higher credit loss provisions, lower net interest income, and increased noninterest expense.

• Net loss of $3.8 million for the nine months ended September 30, 2024, versus net income of $7.8 million for the same period in 2023.

• Total assets increased to $2.26 billion at September 30, 2024, up 2.4% from December 31, 2023.

• Shareholders' equity was $160.8 million at September 30, 2024.

• FDIC Consent Order was terminated, reflecting improved compliance and internal controls.

Financial highlights

• Net interest income for Q3 2024 was $14.0 million, down year-over-year; net interest margin declined to 2.70% from 2.97%.

• Total interest income rose 9.2% year-over-year to $28.2 million for Q3 2024.

• Total interest expense increased 30.3% to $14.2 million for Q3 2024.

• Provision for credit losses was $3.1 million in Q3 2024, up from $371,000 in Q3 2023.

• Noninterest expense rose to $15.8 million, driven by severance and higher benefit costs.

Outlook and guidance

• Management expects continued margin pressure due to elevated funding costs and deposit competition.

• Cost control initiatives, including a reduction in force, are expected to lower compensation expense by $820,000 per quarter starting Q4 2024.

• Focus remains on prudent credit risk management, relationship banking, and strategic loan growth.

• Further BOLI policy conversions and cost reductions are expected to benefit future quarters.