First Northwest Bancorp Reports Modest Financial Improvement in Q1 2026

First Northwest Bancorp reported a modest increase in financial performance for the first quarter of 2026, with total assets rising to $2.13 billion, a 1.2% increase from $2.11 billion at the end of 2025. The company recorded a net income of $6,000, a significant recovery from a net loss of $9.0 million in the same period last year. This turnaround was attributed to a $7.7 million decrease in the provision for credit losses, a $3.3 million reduction in noninterest expenses, and a $593,000 increase in net interest income, despite a $1.8 million decline in noninterest income.

The bank's net interest income increased to $14.4 million, up from $13.9 million year-over-year, driven by reduced costs associated with deposits and borrowings. The net interest margin improved by 27 basis points to 3.03%. However, total interest income decreased by 5.6% to $25.3 million, primarily due to a decline in average earning assets and lower yields on interest-earning assets. Interest expense also fell by 16% to $10.9 million, reflecting a decrease in the average cost of interest-bearing liabilities.

In terms of operational metrics, First Northwest's total loans receivable, excluding loans held for sale, increased slightly to $1.63 billion, with notable growth in commercial business loans, which rose by 17.1% to $152.6 million. The allowance for credit losses on loans decreased to $16.8 million, representing 1.03% of total loans, down from 1.04% at the end of 2025. Nonperforming loans also saw a decrease, falling to $21.7 million, or 1.3% of total loans, compared to 1.4% at the end of the previous year.

Strategically, First Northwest continues to focus on diversifying its loan portfolio, with increased origination of commercial real estate and consumer loans. The bank has also made efforts to enhance its liquidity position, with cash and cash equivalents rising by 22.3% to $104.1 million. The company is actively managing its deposit base, which increased by $2.5 million to $1.60 billion, while also navigating competitive pressures in the banking sector.

Looking ahead, First Northwest remains cautiously optimistic about its financial outlook, emphasizing the importance of maintaining a diversified deposit base and managing interest rate risks. The company is committed to monitoring economic conditions and adjusting its strategies accordingly to ensure continued growth and stability in its operations.