Market Overview

First Northwest Bancorp Reports Results of Operations for the Quarter Ended June 30, 2018

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First Northwest Bancorp (NASDAQ:FNWB) ("Company"), the holding company
for First Federal Savings and Loan Association of Port Angeles ("Bank"),
announced its operating results for the quarter ended June 30, 2018. The
Company reported net income of $1.5 million for the quarter ended
June 30, 2018, or $0.15 per basic and diluted share. The current
quarter's net income increased $411,000 compared to net income of $1.1
million for the quarter ended June 30, 2017, mainly due to an increase
in net interest income and noninterest income, partially offset by
increases in the provision for loan losses and noninterest expense.

Larry Hueth, President and CEO, commented, "Net income was steady over
the prior quarter and improved over the same quarter one year ago. Net
interest income improved as we continued our efforts to transition the
balance sheet from lower margin investments and borrowings to higher
margin loans and deposits. Asset quality remained solid, and our new
branches continued to increase deposit market share, ultimately
improving their efficiency as a funding source. We will continue our
focus and effort to increase earnings and shareholder value through
balance sheet growth, expense control, and prudent capital management
strategies."

Quarter highlights (at or for the quarter ended June 30, 2018)

  • Net income was substantially unchanged at $1.5 million as compared to
    the quarter ended March 31, 2018;
  • Basic earnings per share remained at $0.15 and diluted earnings per
    share increased $0.01 to $0.15 as compared to $0.14 for the quarter
    ended March 31, 2018;
  • Investment securities decreased $9.1 million, primarily due to
    repayment and amortization activity;
  • Loans receivable increased $22.5 million, primarily due to growth in
    multi-family and auto loans;
  • Deposits increased $12.7 million mainly due to continued efforts to
    expand deposit relationships with competitive pricing and products;
  • Borrowing increased $3.3 million, primarily to support our liquidity
    needs during the quarter;
  • The Company repurchased 88,900 shares of common stock at an average
    price of $16.50 per share during the quarter under the 2017 Stock
    Repurchase Plan approved in September 2017.

Balance Sheet Review

During the quarter ended June 30, 2018, total assets increased $13.7
million to $1.2 billion, primarily within net loans receivable, funded
through deposit growth and an increase in borrowings as noted below.
Total assets increased $115.6 million from $1.1 billion at June 30,
2017, primarily due to growth in net loans receivable and, to a lesser
extent, investment securities.

Investment securities decreased $9.1 million during the quarter to
$296.8 million at June 30, 2018, and increased $16.3 million as compared
to $280.5 million at June 30, 2017. During the most recent quarter, we
purchased approximately $25.0 million of variable-rate investment
securities and sold the same amount of a combination of both variable
and fixed rate securities. Investment securities sales included $2.7
million of held to maturity investments that had substantially reached
maturity, allowing us to sell certain securities without tainting the
remaining held to maturity securities portfolio and avoid additional
negative market value adjustments through other comprehensive income. We
will continue to evaluate investment opportunities that would allow us
to prudently leverage capital and improve earnings while also continuing
to focus on growing our loan portfolio and improving our earning asset
mix over the long term.

U.S. government agency issued mortgage-backed securities ("MBS agency")
comprised the largest portion of our investment portfolio at 55.0%, and
totaled $163.2 million at June 30, 2018, a decrease during the quarter
of $12.2 million from $175.4 million at March 31, 2018. Other investment
securities were $120.2 million at June 30, 2018, an increase of $7.9
million from $112.3 million at March 31, 2018. Total investment
securities increased $16.3 million at June 30, 2018, as compared to
$280.5 million at June 30, 2017, which included a $46.8 million increase
in other investment securities and a $30.5 million decrease in
mortgage-backed securities. The year over year increase was the result
of new investment purchases partially offset by sales, prepayment
activity, and normal amortization. The estimated average life of the
total investment securities portfolio was 5.3 years at June 30, 2018,
5.1 years at March 31, 2018, and 4.7 years at June 30, 2017. The average
repricing term of our investment securities portfolio was approximately
4.0 years at both June 30, 2018 and March 31, 2018, and 4.1 years at
June 30, 2017, based on the interest rate environment at those times.

Total loans, excluding loans held for sale, increased $22.3 million to
$828.2 million at June 30, 2018, from $806.0 million at March 31, 2018.
Multi-family, other consumer, and commercial real estate loans increased
$20.1 million, $15.8 million, $11.7 million, respectively, while
construction and land and one- to four-family residential loans
decreased $18.8 million and $8.0 million, respectively. There were $71.3
million in undisbursed construction loan commitments at June 30, 2018,
as compared to $62.2 million at March 31, 2018, an increase of $9.1
million as we continued to originate loans for new construction projects
as completed projects converted to permanent financing. We continue to
grow the auto loan portfolio through our indirect lending and specialty
auto loan purchasing programs, adding $18.4 million of newly originated
auto loans during the quarter, which was the main contributor to the
increase in other consumer loans. Compared to June 30, 2017, total
loans, excluding loans held for sale, increased $94.2 million
attributable to increases in other consumer loans of $34.3 million,
commercial real estate loans of $30.2 million, multi-family loans of
$30.0 million, one- to four-family residential loans of $11.2 million,
and home equity loans of $3.2 million, partially offset by a decrease in
construction and land loans of $14.7 million.

Loans receivable consisted of the following at the dates indicated:

  June 30, 2018  

March 31, 2018

  June 30, 2017  

Three
Month
Change

 

One
Year
Change

(In thousands)
Real Estate:
One to four family $ 339,425 $ 347,453 $ 328,243 (2.3 )% 3.4 %
Multi-family 88,147 68,095 58,101 29.4 51.7
Commercial real estate 232,266 220,542 202,038 5.3 15.0
Construction and land 56,919   75,684   71,630   (24.8 ) (20.5 )
Total real estate loans 716,757 711,774 660,012 0.7 8.6
 
Consumer:
Home equity 39,085 38,538 35,869 1.4 9.0
Other consumer 55,315   39,478   21,043   40.1 162.9
Total consumer loans 94,400 78,016 56,912 21.0 65.9
 
Commercial business 17,072   16,163   17,073   5.6
 
Total loans 828,229 805,953 733,997 2.8 12.8
Less:
Net deferred loan fees (151 ) 501 904 (130.1 ) (116.7 )
Premium on purchased loans, net (2,241 ) (2,360 ) (2,216 ) (5.0 ) 1.1
Allowance for loan losses 9,282   8,984   8,523   3.3 8.9
Total loans receivable, net $ 821,339   $ 798,828   $ 726,786   2.8 % 13.0 %
 

During the quarter ended June 30, 2018, total liabilities increased
$14.2 million to $1.0 billion primarily the result of an increase in
deposits of $12.7 million to $893.3 million at June 30, 2018, from
$880.6 million at March 31, 2018, and an increase in borrowings of $3.3
million to $126.3 million at June 30, 2018, from $122.9 million at
March 31, 2018. Deposits increased as the result of an increase of $8.4
million in money market accounts, $6.2 million in certificates of
deposit and $713,000 in savings accounts, partially offset by a decrease
of $2.6 million in transaction accounts. The increase in borrowings was
mainly due to an increase in short-term FHLB advances during the quarter.

Total liabilities increased $120.3 million over the last year, mainly
attributable to growth in deposits of $69.6 million and an increase in
borrowings of $48.8 million. Deposit increases were primarily the result
of our continuing efforts to expand commercial and consumer deposit
relationships in our new Kitsap and Whatcom County, Washington
locations, as well as within our historic Clallam and Jefferson County,
Washington locations. We continue to rely on borrowings to fund loan
growth, investment securities portfolio activities, and general
operating cash flow needs.

Total shareholders' equity decreased $555,000 during the quarter to
$172.9 million at June 30, 2018, mainly the result of a $1.1 million
decrease in value of our available for sale securities portfolio
resulting in additional unrealized losses and decreases in additional
paid-in capital of $574,000 from the repurchase of shares of common
stock, partially offset by net income of $1.5 million.

Operating Results

Net income was $1.5 million for the both the quarter ended June 30, 2018
and March 31, 2018. Net income increased $411,000 as compared to the
quarter ended June 30, 2017, primarily due to a $529,000 increase in net
interest income after provision for loan losses coupled with an increase
of $206,000 in noninterest income, partially offset by a $359,000
increase in noninterest expense.

Net interest income after the provision for loan losses increased to
$8.8 million for the quarter ended June 30, 2018, from $8.7 million for
the preceding quarter due to an increase in interest income of $435,000,
partially offset by an increase in interest expense of $248,000 and an
increase in the provision for loan losses of $85,000. Net interest
income after the provision for loan losses increased $529,000 as
compared to $8.2 million for the quarter ended June 30, 2017, due to an
increase in net interest income of $639,000, partially offset by an
$110,000 increase in the provision for loan losses. The increase in the
provision for loan losses during the most recent quarter as compared to
the prior quarters ended March 31, 2018 and June 30, 2017, was primarily
due to an increase in the balance of total loans receivable. Total
interest income increased $435,000 to $11.3 million for the quarter
ended June 30, 2018, as compared to the previous quarter ended March 31,
2018, and increased $1.3 million as compared to the quarter ended
June 30, 2017, primarily due to an increase in the average balance of,
and an increase in interest and fees on, loans receivable.

Total interest expense increased $248,000 to $2.1 million for the
quarter ended June 30, 2018, as compared to the quarter ended March 31,
2018, and increased $707,000 as compared to the quarter ended June 30,
2017, due to increases in the average balances of, and interest rates
paid on, deposits and FHLB advances. We continue to compete to attract
and retain deposits and utilize short-term FHLB advances to fund our
operations and purchase additional interest-earning assets.

The net interest margin increased seven basis points to 3.22% for the
quarter ended June 30, 2018, compared to 3.15% for the prior quarter
ended March 31, 2018, and decreased 12 basis points from 3.34% for the
same period in 2017. The net interest margin was higher during the
quarter ended June 30, 2018, as compared to the previous quarter mainly
due to an increase in the average balance of loans receivable. The net
interest margin decreased from the same period in 2017 mainly due to an
increase in the cost of interest-bearing liabilities.

Noninterest income decreased $77,000 to $1.4 million for the quarter
ended June 30, 2018, as compared to the prior quarter ended March 31,
2018. The decrease was primarily due to decreases in the net gain on the
sale of investment securities of $109,000 and net gain on sale of loans
of $17,000, partially offset by increases in loan and deposit service
fees of $22,000, other income of $19,000, and mortgage servicing fees,
net of amortization of $8,000. Noninterest income increased $206,000, as
compared to $1.2 million for the same quarter in 2017, mainly the result
of increases in net gain on sale of loans of $106,000, other income of
$44,000, loan and deposit service fees of $27,000, mortgage servicing
fees, net of amortization of $26,000 and, net gain on sale of investment
securities of $13,000, partially offset by decrease in the in cash
surrender value of bank-owned life insurance of $10,000.

Noninterest expense increased $23,000 to $8.3 million for the quarter
ended June 30, 2018, compared to $8.3 million for the quarter ended
March 31, 2018, primarily due to increases in professional fees and data
processing of $136,000 and $49,000, respectively, partially offset by a
decrease in other expense of $142,000. Noninterest expense increased
$359,000 as compared to $7.9 million for the same quarter in 2017,
primarily due to increases in occupancy and equipment of $132,000,
professional fees of $95,000, advertising of $73,000, and data
processing $60,000 as we continue to grow our business and expand our
geographic footprint.

Capital Ratios and Credit Quality

The Company and the Bank continue to maintain capital levels in excess
of the applicable regulatory requirements and the Bank was categorized
as "well-capitalized" at June 30, 2018.

Nonperforming loans decreased $111,000 during the quarter ended June 30,
2018, to $2.1 million at June 30, 2018, from $2.2 million at March 31,
2018, mainly due to a decrease in nonperforming one- to four-family
residential loans of $89,000. Nonperforming loans to total loans was
0.3% at June 30, 2018, March 31, 2018, and June 30, 2017. The percentage
of the allowance for loan losses to nonperforming loans increased to
450.1% at June 30, 2018, from 413.4% at March 31, 2018, and 445.1% at
June 30, 2017. Classified loans decreased $6.2 million to $3.8 million
at June 30, 2018, from $10.0 million at March 31, 2018, reflecting
improved performance of a commercial construction loan and commercial
real estate loan that were removed from classified status during the
quarter. Nonperforming loans increased $537,000 from $3.3 million at
June 30, 2017. The allowance for loan losses as a percentage of total
loans was 1.1% at both June 30, 2018 and March 31, 2018. There was no
material change in the allowance for loan losses as a percentage of
total loans during the quarter due to continued overall strong asset
quality and minimal net loan charge-offs. Fluctuations in the balance of
nonperforming assets and other credit quality measures are expected as
we increase the balance of our loan portfolio.

About the Company

First Northwest Bancorp, a Washington corporation, is the bank holding
company for First Federal Savings and Loan Association of Port Angeles.
First Federal is a Washington-chartered, community-based savings bank,
primarily serving Western Washington State, with thirteen banking
locations, eight located within Clallam and Jefferson counties, two in
Kitsap County, two in Whatcom County, and a home lending center in King
County.

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. These forward-looking
statements are based upon current management expectations and may,
therefore, involve risks and uncertainties. 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 or range of factors including, but not limited to:
increased competitive pressures; changes in the interest rate
environment; the credit risks of lending activities; 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 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 2018 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.

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data) (Unaudited)

 
        Three   One
June 30, March 31, June 30, Month Year
Assets 2018 2018 2017 Change Change
 
Cash and due from banks $ 14,926 $ 13,209 $ 14,510 13.0 % 2.9 %
Interest-bearing deposits in banks 7,958 11,941 9,782 (33.4 ) (18.6 )
Investment securities available for sale, at fair value 252,371 258,218 228,593 (2.3 ) 10.4
Investment securities held to maturity, at amortized cost 44,423 47,709 51,872 (6.9 ) (14.4 )
Loans held for sale 1,562 100.0 100.0
Loans receivable (net of allowance for loan losses of $9,282, $8,984
and $8,523)
821,339 798,828 726,786 2.8 13.0
Federal Home Loan Bank (FHLB) stock, at cost 6,521 6,389 4,368 2.1 49.3
Accrued interest receivable 3,899 3,641 3,020 7.1 29.1
Premises and equipment, net 14,789 14,361 13,236 3.0 11.7
Mortgage servicing rights, net 1,101 1,104 986 (0.3 ) 11.7
Bank-owned life insurance, net 29,022 28,873 28,413 0.5 2.1
Prepaid expenses and other assets 5,335   5,312   6,110   0.4 (12.7 )
 
Total assets $ 1,203,246   $ 1,189,585   $ 1,087,676   1.1 % 10.6 %
 
Liabilities and Shareholders' Equity
 
Deposits $ 893,326 $ 880,622 $ 823,760 1.4 % 8.4 %
Borrowings 126,271 122,949 77,427 2.7 63.1
Accrued interest payable 374 210 208 78.1 79.8
Accrued expenses and other liabilities 9,335 10,172 7,417 (8.2 ) 25.9
Advances from borrowers for taxes and insurance 993   2,130   1,143   (53.4 ) (13.1 )
 
Total liabilities 1,030,299   1,016,083   909,955   1.4 13.2
 
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 11,483,494 at June 30, 2018; issued and outstanding
11,577,394 at March 31, 2018; and issued and outstanding 11,902,146
at June 30, 2017
115 116 119 (0.9 ) (3.4 )
Additional paid-in capital 108,780 109,354 112,058 (0.5 ) (2.9 )
Retained earnings 79,767 78,822 77,515 1.2 2.9
Accumulated other comprehensive loss, net of tax (4,836 ) (3,747 ) (434 ) (29.1 ) (1,014.3 )
Unearned employee stock ownership plan (ESOP) shares (10,879 ) (11,043 ) (11,537 ) 1.5 5.7
 
Total shareholders' equity 172,947   173,502   177,721   (0.3 ) (2.7 )
 
Total liabilities and shareholders' equity $ 1,203,246   $ 1,189,585   $ 1,087,676   1.1 % 10.6 %
 
FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data) (Unaudited)

 
  Quarter Ended   Three   One
June 30,   March 31,   June 30, Month Year
2018 2018 2017 Change Change
INTEREST INCOME
Interest and fees on loans receivable $ 8,952 $ 8,583 $ 7,883 4.3 % 13.6 %
Interest on mortgage-backed and related securities 1,237 1,297 1,285 (4.6 ) (3.7 )
Interest on investment securities 973 862 709 12.9 37.2
Interest on deposits in banks 41 45 24 (8.9 ) 70.8
FHLB dividends 78   59   34   32.2 129.4
Total interest income 11,281 10,846 9,935 4.0 13.5
 
INTEREST EXPENSE
Deposits 1,125 985 798 14.2 41.0
Borrowings 997   889   617   12.1 61.6
Total interest expense 2,122 1,874 1,415 13.2 50.0
 
Net interest income 9,159 8,972 8,520 2.1 7.5
 
PROVISION FOR LOAN LOSSES 395   310   285   27.4 38.6
 
Net interest income after provision for loan losses 8,764   8,662   8,235   1.2 6.4
 
NONINTEREST INCOME
Loan and deposit service fees 915 893 888 2.5 3.0
Mortgage servicing fees, net of amortization 70 62 44 12.9 59.1
Net gain on sale of loans 150 167 44 (10.2 ) 240.9
Net gain on sale of investment securities 13 122 (89.3 ) 100.0
Increase in cash surrender value of bank-owned life insurance 149 149 159 (6.3 )
Income from death benefit on bank-owned life insurance, net n/a n/a
Other income 108   89   64   21.3 68.8
Total noninterest income 1,405   1,482   1,199   (5.2 ) 17.2
 
NONINTEREST EXPENSE
Compensation and benefits 4,745 4,811 4,753 (1.4 ) (0.2 )
Real estate owned and repossessed assets expense, net 19 8 14 137.5 35.7
Data processing 677 628 617 7.8 9.7
Occupancy and equipment 1,127 1,102 995 2.3 13.3
Supplies, postage, and telephone 243 231 196 5.2 24.0
Regulatory assessments and state taxes 155 126 137 23.0 13.1
Advertising 290 324 217 (10.5 ) 33.6
Professional fees 458 322 363 42.2 26.2
FDIC insurance premium 79 76 70 3.9 12.9
Other 505   647   577   (21.9 ) (12.5 )
Total noninterest expense 8,298   8,275   7,939   0.3 4.5
 
INCOME BEFORE PROVISION FOR INCOME TAXES 1,871 1,869 1,495 0.1 25.2
 
PROVISION FOR INCOME TAXES 345   346   380   (0.3 ) (9.2 )
 
NET INCOME $ 1,526   $ 1,523   $ 1,115   0.2 % 36.9 %
 
 
Basic earnings per share $ 0.15 $ 0.15 $ 0.10 % 50.0 %
Diluted earnings per share 0.15 0.14 0.10 7.1 % 50.0
 
FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share data) (Unaudited)

 
  Six Months Ended June 30,   Percent
2018   2017 Change
INTEREST INCOME
Interest and fees on loans receivable $ 17,535 $ 15,362 14.1 %
Interest on mortgage-backed and related securities 2,534 2,583 (1.9 )
Interest on investment securities 1,835 1,289 42.4
Interest on deposits in banks 86 45 91.1
FHLB dividends 137   64   114.1
Total interest income 22,127 19,343 14.4
 
INTEREST EXPENSE
Deposits 2,110 1,516 39.2
Borrowings 1,886   1,202   56.9
Total interest expense 3,996 2,718 47.0
 
Net interest income 18,131 16,625 9.1
 
PROVISION FOR LOAN LOSSES 705   500   41.0
 
Net interest income after provision for loan losses 17,426   16,125   8.1
 
NONINTEREST INCOME
Loan and deposit service fees 1,808 1,709 5.8
Mortgage servicing fees, net of amortization 132 113 16.8
Net gain on sale of loans 317 328 (3.4 )
Net gain on sale of investment securities 135 100.0
Increase in cash surrender value of bank-owned life insurance 298 337 (11.6 )
Income from death benefit on bank-owned life insurance, net 768 (100.0 )
Other income 197   145   35.9
Total noninterest income 2,887   3,400   (15.1 )
 
NONINTEREST EXPENSE
Compensation and benefits 9,556 9,283 2.9
Real estate owned and repossessed assets (income) expenses, net 27 (36 ) 175.0
Data processing 1,305 1,214 7.5
Occupancy and equipment 2,229 1,980 12.6
Supplies, postage, and telephone 474 394 20.3
Regulatory assessments and state taxes 281 270 4.1
Advertising 614 396 55.1
Professional fees 780 734 6.3
FDIC insurance premium 155 124 25.0
Other 1,152   1,078   6.9
Total noninterest expense 16,573   15,437   7.4
 
INCOME BEFORE PROVISION FOR INCOME TAXES 3,740 4,088 (8.5 )
 
PROVISION FOR INCOME TAXES 691   809   (14.6 )
 
NET INCOME $ 3,049   $ 3,279   (7.0 )%
 
 
Basic and diluted earnings per share $ 0.29 $ 0.30 (3.3 )%
 
FIRST NORTHWEST BANCORP AND SUBSIDIARY

Selected Financial Ratios and Other Data

(Unaudited)

 
  As of or For the Quarter Ended
June 30,   March 31,   December 31,   September 30,   June 30,
2018   2018   2017   2017   2017  
Performance ratios: (1)
Return (loss) on average assets 0.51 % 0.51 % (0.04 )% 0.63 % 0.41 %
Return (loss) on average equity 3.51 3.47 (0.26 ) 3.96 2.49
Average interest rate spread 3.00 2.96 2.92 3.00 3.16
Net interest margin (2) 3.22 3.15 3.11 3.20 3.34
Efficiency ratio (3) 78.5 79.2 84.4 76.8 81.7
Average interest-earning assets to average interest-bearing
liabilities
128.4 129.2 131.8 132.3 132.7
Book value per common share $ 15.06 $ 14.99 $ 15.02 $ 15.03 $ 14.93
 
Asset quality ratios:
Nonperforming assets to total assets at end of period (4) 0.2 % 0.2 % 0.1 % 0.2 % 0.2 %
Nonperforming loans to total loans (5) 0.3 0.3 0.2 0.2 0.3
Allowance for loan losses to nonperforming loans (5) 450.1 413.4 570.7 479.8 445.1
Allowance for loan losses to total loans 1.1 1.1 1.1 1.2 1.2
Net charge-offs to average outstanding loans
 
Capital ratios (First Federal):
Tier 1 leverage 12.3 % 12.2 % 12.5 % 12.8 % 13.2 %
Common equity Tier 1 capital 19.4 18.4 18.0 18.8 19.2
Tier 1 risk-based 19.4 18.4 18.0 18.8 19.2
Total risk-based 20.6 19.6 19.1 20.0 20.4

_____________________

(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) 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.
(5) Nonperforming loans consists of nonaccruing loans and accruing loans
more than 90 days past due.
 
FIRST NORTHWEST BANCORP AND SUBSIDIARY

Selected Financial Ratios and Other Data

(Unaudited) (continued)

 
As of or For the Six Months Ended
June 30,
2018   2017  
Performance ratios: (1)
Return on average assets 0.51 % 0.61 %
Return on average equity 3.49 3.67
Average interest rate spread 2.99 3.08
Net interest margin (2) 3.19 3.26
Efficiency ratio (3) 78.9 77.1
Average interest-earning assets to average interest-bearing
liabilities
128.9 133.1
Book value per common share $ 15.06 $ 14.93
 
Asset quality ratios:
Nonperforming assets to total assets at end of period (4) 0.2 % 0.2 %
Nonperforming loans to total loans (5) 0.3 0.3
Allowance for loan losses to nonperforming loans (5) 450.1 445.1
Allowance for loan losses to total loans 1.1 1.2
Net charge-offs to average outstanding loans
 
Capital ratios (First Federal):
Tier 1 leverage 12.3 % 13.2 %
Common equity Tier 1 capital 19.4 19.2
Tier 1 risk-based 19.4 19.2

Total risk-based

20.6 20.4

________________

(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) 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.
(5) Nonperforming loans consists of nonaccruing loans and accruing loans
more than 90 days past due.

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