FNWB First Northwest Bancorp

"The company returned to profitability in Q1 2024 following the first step of our balance sheet restructure in the fourth quarter of 2023," said Matthew P. Deines, President and CEO. "We continue to execute on this strategy as we added over $90 million in current market rate loans and securities over the course of the first quarter. We will continue this strategy in the second quarter as we prepare to execute on a sale-leaseback transaction for six of our branches located on the Olympic Peninsula. We anticipate this transaction will enable additional securities sales, furthering our goal of increasing our net interest margin and overall profitability. We were able to manage operating expenses well during the quarter and we maintain our disciplined approach to improving earnings per share and return on average equity.

"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 $39.9 million or 6.1%. Non-maturity deposits increased by $29.7 million or 2.9% over the past three months. Other than two previously identified criticized loans, we have not seen deterioration in our credit quality metrics during the quarter. Classified loans remain at 2.1% of total loans, consistent with levels at December 31, 2023. Both of these loan relationships have been evaluated for individual impairment as of March 31, 2024, and the total reserve for these relationships is zero, as the discounted collateral value on these loans appears to be sufficient to repay the principal balances in full.

"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 April 23, 2024, the Board of Directors approved a new stock buyback plan for up to 10% of the shares currently outstanding. Our capital position remains strong with all bank level regulatory ratios above the well-capitalized criteria."

The Board of Directors of First Northwest Bancorp declared a quarterly cash dividend of $0.07 per common share. The dividend will be payable on May 24, 2024, to shareholders of record as of the close of business on May 10, 2024.

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 $45.3 million of higher-yielding security investments.
	-  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 Sean Brennan, an experienced banker bringing additional industry insights, to the Board of Directors.
•	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 October 2020 Stock Repurchase Plan.
•	New share repurchase plan approved in April 2024 authorizing the repurchase of 10%, or 944,279, of authorized and outstanding shares.
•	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 $1.3 billion, or 78% of total deposits. Available liquidity to uninsured deposit coverage remains strong at 1.5x.
•	Classified loans remained flat compared to December 31, 2023, at 2.1% of total loans.
•	Expense management resulted in operating expenses of $14.3 million, a reduction of $600,000, or 4%, from the first quarter of 2023.

First Northwest Bancorp (Nasdaq: FNWB) ("First Northwest" or "Company") today reported net income of $396,000 for the first quarter of 2024, compared to a net loss of $5.5 million for the fourth quarter of 2023 and net income of $3.5 million for the first quarter of 2023. Basic and diluted income per share were $0.04 for the first quarter of 2024, compared to basic and diluted loss per share of $0.62 for the fourth quarter of 2023 and basic and diluted income per share of $0.39 for the first quarter of 2023. In the first quarter of 2024, the Company generated a return on average assets of 0.07%, a return on average equity of 0.98% and a return on average tangible common equity* of 0.99%. Income before provision for income taxes was $843,000 for the current quarter, compared to a loss of $6.9 million for the preceding quarter, an increase of $7.7 million, or 112.3%, and decreased $3.4 million compared to income of $4.3 million for the first quarter of 2023.

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 $45.3 million, carrying an estimated weighted-average yield of 6.3% with a weighted-average life of 5.6 years. The annualized interest income on these securities is anticipated to provide an additional $2.9 million to revenue.

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 $1.7 million of annualized interest income in 2024. The estimated impact will be reduced if the Federal Reserve implements rate cuts during the year.

The balance sheet restructure plan also includes the surrender of $22.5 million and exchange of $3.5 million of existing BOLI contracts to reinvest in higher yielding products, which is anticipated to add about $1 million to revenue each year. The first-year revenue increase will be partially offset by taxes on surrender values and charges on exchanged contracts. The first $6.1 million was surrendered during the first quarter with the remaining surrender transactions expected to complete by the end of the third quarter of 2024.

In addition to our new board member, Sean Brennan, First Fed added two new executive roles to foster a sharpened focus on digital and strategic initiatives and welcomes an additional Director of Commercial Banking. The Chief Innovation Officer, David Edelstein, will lead digital banking, technology, data, and fintech partnerships. Mr. Edelstein brings more than 25 years of leadership experience in financial services and technology. In addition, Chris Riffle was promoted to Chief Strategy Officer, and will focus on First Fed’s strategic initiatives with specific emphasis on planning and optimization of systems, teams, and processes. These new roles strengthen our commitment to deliver outstanding customer experiences by combining our trusted local presence with digital solutions. Charlie Guildner is expected to join the commercial banking team in the second quarter of 2024 to lead the North Cascades region and drive commercial business loan growth. Mr. Guildner has nearly 40 years of community banking experience, including having served President and CEO of North Cascades Bank.

Net Interest IncomeTotal 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 $6.4 million compared to $7.0 million in the first quarter a year ago. Current quarter interest expense was higher due to a 31 basis point increase in the cost of deposits to 2.43% for the quarter ended March 31, 2024, from 2.12% for the prior quarter. During the first quarter, customers continued to shift their deposits into higher paying products, resulting in a higher cost of deposits for the Bank. The increase over the first quarter of 2023 was the result of a 131 basis point increase in the cost of deposits from 1.12% in the first quarter one year ago, along with higher volumes and rates paid on certificates of deposit ("CDs"). A shift in the deposit mix from transaction and savings accounts to money market accounts and CDs also added to the higher cost of deposits compared to the first quarter of 2023. Higher costs of brokered CDs also contributed to additional deposit costs with a 195 basis point increase to 4.94% for the current quarter compared to 2.99% for the first quarter one year ago.

Net interest income before provision for credit losses for the first quarter of 2024 decreased $267,000, or 1.9%, to $13.9 million, compared to $14.2 million for the preceding quarter, and decreased $2.4 million, or 14.6%, from the first quarter one year ago.

The Company recorded a $970,000 provision for credit losses in the first quarter of 2024, primarily due to additional charge-offs from the Splash unsecured consumer loan program and an increase in commercial business loan balances. Decreases attributable to the loss factors applied to Woodside auto loans as well as construction loans at quarter end were offset by increases to the loss factors applied to one-to-four family loans, home equity lines of credit and home equity loans. The provision for credit losses on loans was partially offset by a provision recovery on unfunded commitments due to a decrease in volume at quarter end. This compares to a credit loss provision of $1.2 million for the preceding quarter and a $500,000 recapture of provision for the first quarter of 2023.

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 $157,000. The fair value hedge on loans established mid-quarter added $173,000 in interest income for the first quarter of 2024.

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 March 31, 2024, December 31, 2023 and March 31, 2023, respectively. Average interest-bearing deposit balances increased $43.0 million, or 3.1%, to $1.42 billion for the first quarter of 2024 compared to the fourth quarter of 2023 and increased $133.6 million, or 10.4%, compared to $1.29 billion for the first quarter of 2023.

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 IncomeNoninterest income increased to $2.2 million for the first quarter of 2024 compared to a loss of $2.9 million for the fourth quarter of 2023. During the fourth quarter of 2023, there was a $5.4 million loss on the sale of lower-yielding securities that have since been reinvested at higher yields. The decrease in some of the other income accounts is due to one-time entries recorded in the fourth quarter of 2023 for the gain on sale of Visa, Inc. Class B common stock of $470,000 and $200,000 of funds recouped on Splash loan charge-offs.

Noninterest income decreased 6.3% from $2.3 million in the same quarter one year ago, primarily due to lower servicing asset valuation and gain on sale of loans, partially offset by an unrealized gain on partnership investments. Saleable mortgage loan production and related gains continued to be impacted by higher market rates on mortgage loans compared to the prior year.

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 ExpenseNoninterest 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 $1.5 million for the Quil Ventures commitment receivable write-off, an accrual of $718,000 for a potential civil money penalty proposed by the FDIC and a write-off of investor accounting related items totaling $725,000. Current quarter decreases also included a reduction in consulting fees of $223,000, a reduction in software licensing fees of $158,000 and a $218,000 reduction in the accrual for a potential civil money penalty that were partially offset by increases in medical benefits of $142,000 and marketing expenses of $266,000.

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
FDIC insurance premium			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 SecuritiesInvestment securities increased $30.3 million, or 10.3%, to $326.0 million at March 31, 2024, compared to $295.6 million three months earlier, and decreased $3.1 million compared to $329.1 million at March 31, 2023. The market value of the portfolio decreased $749,000 during the first quarter of 2024 primarily due to widening spreads on the Bank's subordinate debt investments. At March 31, 2024, municipal bonds totaled $87.0 million and comprised the largest portion of the investment portfolio at 26.7%. Agency issued mortgage-backed securities ("MBS agency") were the second largest segment, totaling $83.3 million, or 25.5%, of the portfolio at quarter end. Included in MBS non-agency are $29.9 million of commercial mortgaged-backed securities ("CMBS"), of which 93.3% are in "A" tranches and the remaining 6.7% are in "B" tranches. Our largest exposure is to long-term care facilities, which comprises 65.3%, or $19.5 million, of our private label CMBS securities. All of the CMBS bonds have credit enhancements ranging from 29% to 99%, with a weighted-average credit enhancement of 56%, that further reduces the risk of loss on these investments.

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 March 31, 2024, compared to 4.75 years in the prior quarter and 5.08 years at the end of the first quarter of 2023. Our recent investments have primarily been floating rate securities to take advantage of higher short-term rates above those offered on cash and to reduce our liability sensitivity.

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
U.S. Treasury notes			—				—				2,377				2,364				2,390
International agency issued bonds (Agency bonds)			—				—				1,703				1,717				1,745
U.S. government agency issued asset-backed securities (ABS agency)			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
U.S. Small Business Administration securities (SBA)			7,911				—				—				—				—
Mortgage-backed securities:
U.S. government agency issued mortgage-backed securities (MBS agency)			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 CommitmentsNet loans, excluding loans held for sale, increased $50.3 million, or 3.1%, to $1.69 billion at March 31, 2024, from $1.64 billion at December 31, 2023, and increased $130.7 million, or 8.4%, from $1.56 billion one year ago.

Commercial business loans increased $24.0 million, primarily attributable to an increase in our Northpointe Bank Mortgage Purchase Program participation from $9.5 million last quarter to $15.0 million at the current quarter end, $8.7 million of new Bankers Healthcare group loans and organic originations partially offset by payments. Auto and other consumer loans increased $19.7 million during the current quarter with $13.4 million of new Woodside auto loan purchases and a pool purchase of Triad manufactured home loans totaling $5.1 million, partially offset by payments. Multi-family loans increased $6.4 million during the current quarter. The increase was primarily the result of $5.1 million of organic loan production and $3.7 million of construction loans converting into permanent amortizing loans, partially offset by scheduled payments. One-to-four family loans increased $5.5 million during the current quarter as a result of $10.4 million in residential construction loans that converted to permanent amortizing loans, partially offset by payments. Home equity loans increased $3.0 million over the previous quarter due to draws on new and existing commitments and $833,000 from organic home equity loan production.

Construction loans decreased $4.3 million during the quarter, with $14.5 million converting into fully amortizing loans, partially offset by draws on new and existing loans. New single-family residence construction loan commitments totaled $1.9 million in the first quarter, compared to $2.3 million in the preceding quarter. Commercial real estate loans decreased $2.9 million during the current quarter compared to the previous quarter due to a reclassification of $2.9 million to multi-family along with payoffs and scheduled payments exceeding originations.

The Company originated $5.0 million in residential mortgages during the first quarter of 2023 and sold $5.2 million, with an average gross margin on sale of mortgage loans of approximately 2.16%. This production compares to residential mortgage originations of $4.5 million in the preceding quarter with sales of $4.2 million, and an average gross margin of 2.01%. Single-family home inventory remains historically low and higher market rates on mortgage loans continue to limit saleable mortgage loan production.

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

DepositsTotal deposits decreased $10.3 million to $1.67 billion at March 31, 2024, compared to $1.68 billion at December 31, 2023, and increased $72.4 million, or 4.5%, compared to $1.59 billion one year ago. During first quarter of 2024, total retail deposit balances increased $5.2 million while brokered deposit balances decreased $15.4 million. Compared to the preceding quarter, there were balance increases in business money market accounts of $19.6 million, consumer money market accounts of $13.5 million, consumer demand accounts of $2.0 million, and business savings accounts of $379,000. These increases were offset by decreases in consumer CDs of $20.9 million, brokered CDs of $15.4 million, consumer savings accounts of $6.0 million, public fund CDs of $2.5 million, business CDs of $1.1 million and business demand accounts of $163,000, during the first quarter of 2024. Increases in demand and money market accounts were driven by customer behavior as they sought out higher rates offered as CD specials matured. Deposits originated through digital channels, which are included in the deposits described above, increased $15.3 million, or 23.3%, during the current quarter to $81.1 million at March 31, 2024. Overall, the current rate environment continues to contribute to greater competition for deposits with additional deposit rate specials offered to attract new funds.

The Company estimates that $372.4 million, or 22%, of total deposit balances were uninsured at March 31, 2024. Approximately $242.7 million, or 14%, of total deposits were uninsured business and consumer deposits with the remaining $129.7 million, or 8%, consisting of uninsured public funds at March 31, 2024. Uninsured public fund balances were fully collateralized. The Bank holds an FHLB letter of credit as part of our participation in the Washington Public Deposit Protection Commission program which covered $112.2 million of related deposit balances while the remaining $17.5 million was fully covered through pledged securities at March 31, 2024.

As of March 31, 2024, consumer deposits made up 59% of total deposits with an average balance of $24,000 per account, business deposits made up 21% of total deposits with an average balance of $49,000 per account, public fund deposits made up 8% of total deposits with an average balance of $1.5 million per account and the remaining 12% of account balances are brokered CDs. We have maintained the majority of our public fund relationships for over 10 years. Approximately 69% of our customer base is located in rural areas, with 19% in urban areas and the remaining 12% are brokered deposits as of March 31, 2024.

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 QualityNonperforming loans were $19.5 million at March 31, 2024, an increase of $837,000 from December 31, 2023, primarily attributable to two delinquent commercial business loans with an aggregate total of $1.1 million and a $708,000 multi-family loan placed on nonaccrual due to credit concerns, partially offset by a $544,000 payment received on the commercial construction loan previously placed on nonaccrual and a $591,000 single family residence loan that was paid off during the current quarter. The percentage of the allowance for credit losses on loans to nonperforming loans decreased to 92% at March 31, 2024, from 94% at December 31, 2023, and from 661% at March 31, 2023. Classified loans increased $1.1 million to $36.2 million at March 31, 2024, due to the downgrade of the three loans noted above during the first quarter. A $14.4 million construction loan relationship, which became a classified loan in the fourth quarter of 2022, and a $9.3 million commercial loan relationship which became classified in the fourth quarter of 2023, account for 66% of the classified loan balance at March 31, 2024. The Bank has exercised legal remedies, including the appointment of a third-party receivership and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in the two relationships.

The allowance for credit losses on loans as a percentage of total loans was 1.05% at March 31, 2024, and December 31, 2023, decreasing from 1.10% one year earlier. The current quarter decrease can be attributed to changes in the loan mix and an update to the loss factors applied.

$ 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

CapitalTotal shareholders’ equity decreased to $160.5 million at March 31, 2024, compared to $163.3 million three months earlier, due to a decrease in the fair market value of the available-for-sale investment securities portfolio, net of taxes, of $588,000, dividends declared of $671,000 and share repurchases totaling $3.0 million, partially offset by net income of $396,000 and a $730,000 increase in the after-tax fair market value of derivatives.

Book value per common share was $17.00 at March 31, 2024, compared to $16.99 at December 31, 2023, and $16.57 at March 31, 2023. Tangible book value per common share* was $16.83 at March 31, 2024, compared to $16.83 at December 31, 2023, and $16.38 at March 31, 2023.

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 March 31, 2024. Common Equity Tier 1 and Total Risk-Based Capital Ratios at March 31, 2024, were 12.6% and 13.6%, respectively.

		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 (First Fed Bank):
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 DividendFirst 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 October 2020 Stock Repurchase Plan ("Repurchase Plan") at an average price of $14.03 per share for a total of $3.0 million during the quarter ended March 31, 2024. All authorized shares under the Repurchase Plan have been repurchased. In addition, the Company paid cash dividends totaling $667,000 in the first quarter of 2024. 

* See reconciliation of Non-GAAP Financial Measures later in this release.

Awards/RecognitionThe Company received several accolades as a leader in the community in the last year.

	In October 2023, the First Fed team was honored to bring home the Gold for Best Bank in the Best of the Northwest survey hosted by Bellingham Alive for the second year in a row.
	In September 2023, the First Fed team was recognized in the 2023 Best of Olympic Peninsula surveys, winning Best Bank and Best Financial Advisor in Clallam County. First Fed was also a finalist for Best Bank in Jefferson County, Best Employer in Kitsap County and Best Bank and Best Financial Institution in Bainbridge.
	In June 2023, First Fed was named on the Puget Sound Business Journal’s Best Workplaces list. First Fed has been recognized as one the top 100 workplaces in Washington, as voted for two years in row by each company’s own employees.
	In May 2023, First Fed was recognized as a Top Corporate Citizen by the Puget Sound Business Journal. The Corporate Citizenship Awards honors local corporate philanthropists and companies making significant contributions in the region. The top 25 small, medium and large-sized companies were recognized in addition to nine other honorees last year. First Fed was ranked #1 in the medium-sized company category in 2023 and was ranked #3 in the same category in 2022.
	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 CompanyFirst Northwest Bancorp (Nasdaq: FNWB) is a financial holding company engaged in investment activities including the business of its subsidiary, First Fed Bank. First Fed is a Pacific Northwest-based financial institution which has served its customers and communities since 1923. Currently First Fed has 16 locations in Washington state including 12 full-service branches. First Fed’s business and operating strategy is focused on building sustainable earnings by delivering a full array of financial products and services for individuals, small businesses, non-profit organizations and commercial customers. In 2022, First Northwest made an investment in The Meriwether Group, LLC, a boutique investment banking and accelerator firm. Additionally, First Northwest focuses on strategic partnerships to provide modern financial services such as digital payments and marketplace lending. First Northwest Bancorp was incorporated in 2012 and completed its initial public offering in 2015 under the ticker symbol FNWB. The Company is headquartered in Port Angeles, Washington.

Forward-Looking StatementsCertain 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 Securities and Exchange Commission ("SEC"),which are available on our website at www.ourfirstfed.com and on the SEC’s website at www.sec.gov.

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:Matthew P. Deines, President and Chief Executive OfficerGeri Bullard, EVP, Chief Financial Officer and Chief Operating OfficerIRGroup@ourfirstfed.com360-457-0461

FIRST NORTHWEST BANCORP AND SUBSIDIARYCONSOLIDATED BALANCE SHEETS(Dollars in thousands, except share data) (Unaudited)
		March 31, 2024				December 31, 2023				March 31, 2023				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 $17,958, $17,510, and $17,396)			1,692,774				1,642,518				1,562,068				3.1				8.4
Federal Home Loan Bank (FHLB) stock, at cost			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
Goodwill and other intangible assets, net			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, $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 9,442,796 at March 31, 2024; issued and outstanding 9,611,876 at December 31, 2023; and issued and outstanding 9,674,055 at March 31, 2023			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 Quin Ventures, Inc.			—				—				(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 SUBSIDIARYCONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except per share data) (Unaudited)
		Quarter Ended
		March 31, 2024				December 31, 2023				March 31, 2023				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
FDIC insurance premium			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 Quin Ventures, Inc.			—				—				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 SUBSIDIARYSelected Financial Ratios and Other Data(Dollars in thousands, except per share data) (Unaudited)
		As of or For the Quarter Ended
		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
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 (First Fed Bank):
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 SUBSIDIARYADDITIONAL INFORMATION(Dollars in thousands) (Unaudited)
		March 31, 2024				December 31, 2023				March 31, 2023				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:

		March 31, 2024				December 31, 2023				March 31, 2023				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 SUBSIDIARYADDITIONAL INFORMATION(Dollars in thousands) (Unaudited)

Non-GAAP Financial MeasuresThis press release contains financial measures that are not in conformity with generally accepted accounting principles in the United States of America ("GAAP"). Non-GAAP measures are presented where management believes the information will help investors understand the Company’s results of operations or financial position and assess trends. Where non-GAAP financial measures are used, the comparable GAAP financial measure is also provided. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, and are not necessarily comparable to non-GAAP performance measures that may be presented by other companies. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons. Reconciliations of the GAAP and non-GAAP measures are presented below.

Calculation of Total Revenue:

		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
		(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:

		March 31, 2024				December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023
		(Dollars in thousands, except per share data)
Total shareholders' equity		$	160,506			$	163,340			$	156,065			$	159,557			$	160,336
Less: Goodwill and other intangible assets			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: Goodwill and other intangible assets			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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