FNWB · First Northwest Bancorp

First Northwest Bancorp's Q1 2026 results show net income of just $6,000, a sharp drop from $382,000 in Q4 2025, driven by lower total interest income of $25.3 million (down $803,000 quarter-over-quarter due to reduced average interest-earning asset balances, including lower real estate loans and investment securities) and significantly reduced noninterest income of $2.0 million (down $1.7 million, primarily from absence of a one-time $1.7 million insurance reimbursement in the prior quarter related to legal matters). Noninterest expense edged down to $16.7 million from $16.9 million, aided by no repeat of prior branch closure costs but offset by higher data processing, compensation, and elevated legal fees from ongoing litigation including Socotra REIT and 3|5|2 Capital matters. Positively, net interest margin improved to 3.03% (from 3.00%), fueled by lower cost of total deposits at 2.04% (down from 2.12% as high-cost brokered CDs matured) despite higher FHLB advances. A $13,000 recapture of loan loss provision (vs. $466,000 expense prior quarter) reflected lower pooled reserves amid stable loan balances at $1.61 billion, with ACLL at 1.03% of loans. Balance sheet shifts included customer deposit growth to $1.54 billion (+1.6% QoQ), brokered deposit reduction to $64.1 million (-25.9%), and stable First Fed risk-based capital at 13.5%. CEO Curt Queyrouze highlighted disciplined transformation for efficiency and balance sheet repositioning, expecting profitability improvements in H2 2026 and stronger performance in 2027 onward, supported by core banking stability and liquidity strengthening.