What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-12 · 275 added, 181 removed, 1207 unchanged (27% of the section changed)

3 unchanged sentences

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

March 31, 2025

June 30, 2025

December 31, 2024

3 unchanged sentences

69,376 55,637

Investment securities available for sale, at fair value (amortized cost of $ 348,249 and $ 376,265 , respectively)

Investment securities available for sale, at fair value (amortized cost of $ 336,206 and $ 376,265 at June 30, 2025 and December 31, 2024, respectively)

303,515 340,344

Loans held for sale

Loans receivable (net of allowance for credit losses on loans of $ 20,569 and $ 20,449 , respectively)

Loans receivable (net of allowance for credit losses on loans of $ 18,345 and $ 20,449 at June 30, 2025 and December 31, 2024, respectively)

1,647,217 1,675,186

33 unchanged sentences

75,000,000 shares authorized;

9,440,618 and 9,353,348 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

9,444,963 and 9,353,348 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

15 unchanged sentences

Three Months Ended

Six Months Ended

INTEREST INCOME

Interest and fees on loans receivable

$ 22,231 $ 22,767

Interest on investment securities

2 unchanged sentences

Total interest income

26,823 27,326

INTEREST EXPENSE

Total interest expense

12,976 13,398

Net interest income

13,847 13,928

PROVISION FOR CREDIT LOSSES

Provision for credit losses on loans

Provision for (recapture of) credit losses on unfunded commitments

Provision for credit losses

Net interest income after provision for credit losses

(Recapture of) provision for credit losses on loans

(Recapture of) provision for credit losses on unfunded commitments

(Recapture of) provision for credit losses

Net interest income after (recapture of) provision for credit losses

NONINTEREST INCOME

2 unchanged sentences

Net gain on sale of loans

Net loss on sale of investment securities

Net gain on sale of premises and equipment

Increase in BOLI cash surrender value

Income from BOLI death benefit, net

Other income (loss)

Total noninterest income

9 unchanged sentences

Total noninterest expense

20,000 14,303

(Loss) income before (benefit) provision for income taxes

( 10,161 ) 843

(Benefit) provision for income taxes

( 1,125 ) 447

Net (loss) income

$ ( 9,036 ) $ 396

Basic and diluted (loss) earnings per common share

$ ( 1.03 ) $ 0.04

Income (loss) before provision (benefit) for income taxes

Provision (benefit) for income taxes

Net income (loss)

Basic and diluted earnings (loss) per common share

See selected notes to the consolidated financial statements.

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands) (Unaudited)

Three Months Ended

Net (loss) income

$ ( 9,036 ) $ 396

Other comprehensive (loss) income:

Six Months Ended

Net income (loss)

Other comprehensive income (loss):

Unrealized holding gains (losses) on investments available for sale arising during the period

3,105 ( 747 )

Amortization of unrecognized defined benefit ("DB") plan prior service cost

Reclassification adjustment for change in fair value of hedged items

Reclassification adjustment for net losses on sales of securities realized in income

Other comprehensive (loss) income, net of tax

Comprehensive income (loss)

See selected notes to the consolidated financial statements.

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Three Months Ended June 30, 2025 and 2024

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

Additional Paid-in

Unearned ESOP

Accumulated Other Comprehensive Loss,

Total Shareholders'

Balance at March 31, 2024

9,442,796 $ 94 $ 93,763 $ 106,202 $ ( 7,088 ) $ ( 32,465 ) $ 160,506

( 2,219 ) ( 2,219 )

Restricted stock award grants net of forfeitures

Restricted stock awards canceled

( 1,700 ) — ( 18 ) ( 18 )

Other comprehensive income, net of tax

Comprehensive (loss) income

Share-based compensation expense

ESOP shares committed to be released

( 17 ) 165 148

Cash dividends declared ($ 0.07 per share)

( 661 ) ( 661 )

Balance at June 30, 2024

9,453,247 $ 94 $ 93,985 $ 103,322 $ ( 6,923 ) $ ( 31,597 ) $ 158,881

Balance at March 31, 2025

9,440,618 $ 94 $ 93,450 $ 87,506 $ ( 6,429 ) $ ( 28,129 ) $ 146,492

Restricted stock award grants net of forfeitures

Restricted stock awards canceled

( 2,316 ) — ( 23 ) ( 23 )

Other comprehensive loss, net of tax

( 69 ) ( 69 )

Share-based compensation expense

ESOP shares committed to be released

( 43 ) 165 122

Cash dividends declared ($ 0.07 per share)

( 661 ) ( 661 )

Balance at June 30, 2025

9,444,963 $ 94 $ 93,595 $ 90,506 $ ( 6,264 ) $ ( 28,198 ) $ 149,733

See selected notes to the consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Three Months Ended March 31, 2025 and 2024

For the Six Months Ended June 30, 2025 and 2024

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

5 unchanged sentences

9,611,876 $ 96 $ 95,784 $ 107,349 $ ( 7,253 ) $ ( 32,636 ) $ 163,340

( 1,823 ) ( 1,823 )

Common stock repurchased

8 unchanged sentences

( 1,332 ) ( 1,332 )

Balance at March 31, 2024

Balance at June 30, 2024

9,453,247 $ 94 $ 93,985 $ 103,322 $ ( 6,923 ) $ ( 31,597 ) $ 158,881

2 unchanged sentences

( 5,375 ) ( 5,375 )

Common stock repurchased

Restricted stock award grants net of forfeitures

101,210 1 — 1

Restricted stock awards canceled

6 unchanged sentences

( 1,317 ) ( 1,317 )

Balance at March 31, 2025

Balance at June 30, 2025

9,444,963 $ 94 $ 93,595 $ 90,506 $ ( 6,264 ) $ ( 28,198 ) $ 149,733

3 unchanged sentences

(In thousands) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net (loss) income before noncontrolling interest

$ ( 9,036 ) $ 396

Net (loss) income

Adjustments to reconcile net income to net cash from operating activities:

3 unchanged sentences

Accretion of deferred loan fees and purchased premiums, net

( 446 ) ( 353 )

Amortization of debt issuance costs

1 unchanged sentence

Additions to servicing rights on sold loans, net

( 11 ) ( 10 )

Provision for credit losses on loans

Provision for (recapture of) credit losses on unfunded commitments

Recapture of provision for credit losses on unfunded commitments

Allocation of ESOP shares

1 unchanged sentence

Gain on sale of loans, net

( 11 ) ( 52 )

Loss on sale of securities available for sale, net

Gain on extinguishment of subordinated debt

Increase in BOLI cash surrender value, net

( 372 ) ( 243 )

Income from BOLI death benefit, net

Origination of loans held for sale

( 6,109 ) ( 5,421 )

Proceeds from sale of loans held for sale

1 unchanged sentence

Increase in accrued interest receivable

( 160 ) ( 1,015 )

Decrease in ROU asset

Decrease (increase) in ROU asset

Increase in prepaid expenses and other assets

( 11,675 ) ( 6,509 )

Decrease in accrued interest payable

( 1,132 ) ( 566 )

Decrease in lease liabilities

( 269 ) ( 201 )

(Decrease) increase in accrued expenses and other liabilities

( 3,100 ) 1,670

Net cash used by operating activities

( 21,743 ) ( 4,865 )

(Decrease) increase in lease liabilities

Decrease in accrued expenses and other liabilities

Net cash (used) provided by operating activities

Cash flows from investing activities:

1 unchanged sentence

Proceeds from maturities, calls, and principal repayments of securities available for sale

27,957 14,031

Redemption (purchase) of FHLB stock

1,329 ( 2,212 )

Proceeds from sales of securities available for sale

(Purchase) redemption of FHLB stock

Early surrender of BOLI policies

Purchase of BOLI policies

Proceeds from BOLI death benefit

Net decrease (increase) in loans receivable

30,289 ( 51,142 )

Purchase of premises and equipment, net of amortization

( 71 ) ( 113 )

Sale of premises and equipment, net of amortization

Capital contributions to equity and partnership investments

( 295 ) ( 50 )

Redemption of partnership investment

Capital disbursements received from equity and partnership investments

1 unchanged sentence

Net cash provided (used) by investing activities

69,297 ( 78,466 )

See selected notes to the consolidated financial statements.

2 unchanged sentences

(In thousands) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

Net decrease in deposits

Net (decrease) increase in deposits

Proceeds from long-term FHLB advances

Repayment of long-term FHLB advances

Net (decrease) increase in short-term FHLB advances

Net increase (decrease) in short-term FHLB advances

Redemption of subordinated debt, net

Net increase in line of credit

Net increase in advances from borrowers for taxes and insurance

Net increase (decrease) in line of credit

Net (decrease) increase in advances from borrowers for taxes and insurance

Payment of dividends

2 unchanged sentences

Net cash (used) provided by financing activities

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

2 unchanged sentences

Cash paid for interest on deposits and borrowings

Cash paid for income taxes

Supplemental disclosures of noncash investing activities:

Change in unrealized gain (loss) on securities available for sale

Change in unrealized gain on securities available for sale

Change in unrealized (loss) gain on fair value hedge

Amortization of unrecognized DB plan prior service cost

Loan principal transferred from held-for-investment to held-for-sale

Loan principal transferred to real estate owned and repossessed assets, net

Lease liabilities arising from obtaining right-of-use assets

Transfer of BOLI receivable to prepaid expenses and other assets due to death benefit accrued but not paid at period end

Transfer of BOLI receivable to prepaid expenses and other assets due to early surrender recorded but not paid at period end

Series A equity investment acquired upon conversion of commercial business loan

4 unchanged sentences

Organization and nature of business - First Northwest Bancorp, a Washington corporation ("First Northwest"), became the holding company of First Fed Bank ("First Fed" or the "Bank") on January 29, 2015, upon completion of the Bank's conversion from a mutual to stock form of organization (the "Conversion").

In connection with the Conversion, the Company issued an aggregate of 12,167,000 shares of common stock at an offering price of $ 10.00 per share for gross proceeds of $ 121.7 million.

An additional 933,360 shares of Company common stock and $ 400,000 in cash were contributed to the First Federal Community Foundation ("Foundation"), a charitable foundation that was established in connection with the Conversion, resulting in the issuance of a total of 13,100,360 shares.

In connection with the Conversion, the Company issued 12,167,000 shares of common stock at an offering price of $ 10.00 per share for gross proceeds of $ 121.7 million.

The Company received $ 117.6 million in net proceeds from the stock offering of which $ 58.4 million was contributed to the Bank upon Conversion.

6 unchanged sentences

Accordingly, the information set forth in this report, including the consolidated unaudited financial statements and related data, relates primarily to the Bank for balance sheet and income statement related disclosures.

The Bank is a community-oriented financial institution providing commercial and consumer banking services to individuals and businesses in western Washington State with offices in Clallam, Jefferson, Kitsap, King, and Whatcom counties.

These services include deposit and lending transactions that are supplemented with bor rowing and investing activities.

5 unchanged sentences

In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial statements in accordance with GAAP have been included.

Operating results for the three months ended March 31, 2025 , are not necessarily indicative of the results that may be expected for future periods.

Operating results for the three and six months ended June 30, 2025 , are not necessarily indicative of the results that may be expected for future periods.

In preparing the unaudited interim consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses.

26 unchanged sentences

Note 2 - Securities

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale at March 31, 2025 are summarized as follows:

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale at June 30, 2025 are summarized as follows:

Amortized Cost

44 unchanged sentences

$ 376,265 $ 238 $ ( 36,159 ) $ 340,344 $ —

There were no securities classified as held-to-maturity at March 31, 2025 and December 31, 2024 .

There was no allowance for credit losses on investment securities recorded at March 31, 2025 and December 31, 2024 , based on analysis performed by the Company.

Accrued interest receivable on available-for-sale debt securities totaled $ 2.2 million and $ 2.0 million as of March 31, 2025 and December 31, 2024 , respectively.

There were no securities classified as held-to-maturity at June 30, 2025 and December 31, 2024 .

There was no allowance for credit losses on investment securities recorded at June 30, 2025 and December 31, 2024 , based on analysis performed by the Company.

Accrued interest receivable on available-for-sale debt securities totaled $ 2.0 million and $ 2.0 million as of June 30, 2025 and December 31, 2024 , respectively.

Accrued interest receivable on securities is reported in accrued interest receivable on the Consolidated Balance Sheets and is excluded from the calculation of the allowance for credit losses on investment securities.

The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of March 31, 2025 :

Less Than Twelve Months

41 unchanged sentences

$ ( 653 ) $ 41,933 $ ( 35,506 ) $ 241,991 $ ( 36,159 ) $ 283,924

There were 9 available-for-sale securities with unrealized losses of less than one year, and 147 available-for-sale securities with an unrealized loss of more than one year at March 31, 2025 .

There were 9 available-for-sale securities with unrealized losses of less than one year, and 139 available-for-sale securities with an unrealized loss of more than one year at June 30, 2025 .

There were 22 available-for-sale securities with unrealized losses of less than one year, and 144 available-for-sale securities with an unrealized loss of more than one year at December 31, 2024 .

3 unchanged sentences

The Company believes that it is unlikely that we would be required to sell these investments prior to a market price recovery or maturity.

Based on the Company’s evaluation of these securities, no credit impairment was recorded at March 31, 2025 , or December 31, 2024 .

Based on the Company’s evaluation of these securities, no credit impairment was recorded at June 30, 2025 , or December 31, 2024 .

The amortized cost and estimated fair value of investment securities by contractual maturity are shown in the following tables at the dates indicated.

1 unchanged sentence

therefore, these securities are shown separately.

March 31, 2025

June 30, 2025

Available-for-Sale

56 unchanged sentences

These segments are further disaggregated into classes based on similar attributes and risk characteristics.

Loan amounts are presented at amortized cost which is comprised of the loan balance net of unearned loan fees in excess of unamortized costs and unamortized purchase premiums of $ 20.1 million as of March 31, 2025 and $ 19.1 million as of December 31, 2024 .

Loan amounts are presented at amortized cost which is comprised of the loan balance net of unearned loan fees in excess of unamortized costs and unamortized purchase premiums of $ 21.1 million as of June 30, 2025 and $ 19.1 million as of December 31, 2024 .

The amortized cost reflected in total loans receivable does not include accrued interest receivable.

Accrued interest receivable on loans was $ 6.1 million as of March 31, 2025 and $ 6.0 million as of December 31, 2024 , and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the calculation of the allowance for credit losses on loans.

Accrued interest receivable on loans was $ 6.3 million as of June 30, 2025 and $ 6.0 million as of December 31, 2024 , and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the calculation of the allowance for credit losses on loans.

The amortized cost of loans receivable, net of the allowance for credit losses on loans ("ACLL"), consisted of the following at the dates indicated:

March 31, 2025

June 30, 2025

December 31, 2024

27 unchanged sentences

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income.

The interest on these loans is accounted for on the cash basis or cost recovery method until qualifying for return to accrual.

The interest on these loans is accounted for on either the cash basis or cost recovery method until qualifying for return to accrual.

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

1 unchanged sentence

The following table presents the amortized cost of nonaccrual loans by class of loan at the dates indicated:

March 31, 2025

June 30, 2025

December 31, 2024

19 unchanged sentences

$ 1,156 $ 19,210 $ 20,366 $ 2,970 $ 27,545 $ 30,515

Interest income recognized on a cash basis on nonaccrual loans for the three months ended March 31, 2025 and 2024 , was $ 8,000 and $ 75,000 , respectively.

Interest income recognized on a cash basis on nonaccrual loans for the three months ended June 30, 2025 and 2024 , was $ 24,000 and $ 66,000 , respectively.

Interest income recognized on a cash basis on nonaccrual loans for the six months ended June 30, 2025 and 2024 , was $ 32,000 and $ 141,000 , respectively.

Past due loans.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due.

There were no loans past due 90 days or more and still accruing interest at March 31, 2025 and December 31, 2024 .

There were no loans past due 90 days or more and still accruing interest at June 30, 2025 and December 31, 2024 .

The following tables present the amortized cost of past due loans (including both accruing and nonaccruing loans) by segment and class as of the periods shown:

90 Days or More

March 31, 2025

June 30, 2025

Past Due Past Due Past Due Past Due Current Total Loans

51 unchanged sentences

Loans not otherwise classified are considered pass graded loans and are rated 1 - 3 in our risk rating system.

The following table presents the amortized cost of loans receivable by internally assigned risk grade and class of loans as of March 31, 2025 , as well as gross charge-off activity for the three months ended March 31, 2025 .

The following table presents the amortized cost of loans receivable by internally assigned risk grade and class of loans as of June 30, 2025 , as well as gross charge-off activity for the six months ended June 30, 2025 .

Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of most recent renewal or extension.

205 unchanged sentences

Changes in the ACLL for all other individually evaluated loans is based substantially on the Company’s evaluation of cash flows expected to be received from such loans.

As of March 31, 2025 , $ 26.0 million of loans were individually evaluated with $ 2.7 million of ACLL attributed to such loans.

At March 31, 2025 , four individually evaluated loans totaling $ 2.9 million were evaluated using a discounted cash flow approach and the remaining loans totaling $ 23.1 million were evaluated based on the underlying value of the collateral.

One $ 6.7 million commercial real estate loan was accruing interest at quarter end, while all other individually evaluated loans were on nonaccrual status at March 31, 2025 .

As of June 30, 2025 , $ 31.0 million of loans were individually evaluated with $ 79,000 of ACLL attributed to such loans.

At June 30, 2025 , two individually evaluated loans totaling $ 199,000 were evaluated using a discounted cash flow approach and the remaining loans totaling $ 30.8 million were evaluated based on the underlying value of the collateral.

One $ 6.7 million commercial real estate loan and one $ 5.3 million commercial construction loan were accruing interest at quarter end, while all other individually evaluated loans were on nonaccrual status at June 30, 2025 .

As of December 31, 2024 , $ 35.8 million of loans were individually evaluated with $ 2.5 million of ACLL attributed to such loans.

5 unchanged sentences

Collateral Type

March 31, 2025

June 30, 2025

Single Family Residence

Office Building

Business Assets

(In thousands)

5 unchanged sentences

4,934 8,120 5,279 — — — 18,333

Commercial business

52 — — — — 266 318

Total collateral dependent loans

20 unchanged sentences

principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension, or any combination of the foregoing.

The ACLL for a MLTB is measured on a collective basis, as with other loans in the loan portfolio, unless management determines that such loans no longer possess risk characteristics similar to others in the loan portfolio.

The ACLL for MLTBs is measured on a collective basis, as with other loans in the loan portfolio, unless management determines that such loans no longer possess risk characteristics similar to others in the loan portfolio.

In those instances, the ACLL for a MLTB is determined through individual evaluation.

There were no new MLTB during the three months ended March 31, 2025 .

There was one new MLTB during the six months ended June 30, 2025 .

The Bank agreed to modify the rate, extend the interest-only payment period and extend the term for a commercial construction loan which had a recorded investment of $ 5.5 million at the time of modification.

This commercial construction loan was in compliance with the modified terms at June 30, 2025 .

During the year ended December 31, 2024, there were two new MLTB.

2 unchanged sentences

The Bank also agreed to defer payments on a commercial real estate loan with a recorded investment of $ 6.4 million.

The commercial real estate loan was in compliance with the modified terms at both March 31, 2025 and December 31, 2024.

The commercial real estate loan was in compliance with the modified terms at both June 30, 2025 and December 31, 2024.

Other Real Estate Owned ("OREO").

At June 30, 2025 , and December 31, 2024 , the Company had $ 1.3 million and $ 0 , respectively, of OREO secured by residential real estate properties included in "prepaid expenses and other assets" on the Consolidated Balance Sheets.

Note 4 - Allowance for Credit Losses on Loans

The Company maintains an ACLL and an ACLUC in accordance with ASC 326:

The Company maintains an ACLL and an allowance for credit losses on unfunded commitments ("ACLUC") in accordance with ASC 326:

Financial Instruments - Credit Losses .

4 unchanged sentences

The Company has identified segments of loans with similar risk characteristics for which it then applies one of two loss methodologies.

The Company uses a DCF methodology for most of its segments to calculate the ACLL.

The Company uses a discounted cash flow ("DCF") methodology for most of its segments to calculate the ACLL.

For certain segments with smaller portfolios or where data is prohibitive to running a DCF calculation, management has elected to use a Remaining Life methodology.

4 unchanged sentences

The following tables detail activity in the allowance for credit losses on loans by class for the periods shown:

At or For the Three Months Ended March 31, 2025

At or For the Three Months Ended June 30, 2025

Beginning Balance

7 unchanged sentences

Commercial business

At or For the Three Months Ended March 31, 2024

At or For the Six Months Ended June 30, 2025

Beginning Balance

Provision for (Recapture

of) Credit Losses

Provision for (Recapture of) Credit Losses

Ending Balance

5 unchanged sentences

Commercial business

At or For the Three Months Ended June 30, 2024

Beginning Balance

Provision for (Recapture of) Credit Losses

Ending Balance

(In thousands)

One-to-four family

Commercial real estate

Construction and land

Auto and other consumer

Commercial business

At or For the Six Months Ended June 30, 2024

Beginning Balance

Provision for (Recapture of) Credit Losses

Ending Balance

(In thousands)

One-to-four family

Commercial real estate

Construction and land

Auto and other consumer

Commercial business

Allowance for Credit Losses on Unfunded Loan Commitments.

4 unchanged sentences

The allowance is recognized in accrued expenses and other liabilities on the Consolidated Balance Sheets and is adjusted as a provision, or recapture of provision, for credit losses on unfunded commitments on the Consolidated Statements of Operations.

The allowance for unfunded commitments was $ 614,000 and $ 599,000 at March 31, 2025 , and December 31, 2024 , respectively.

The allowance for unfunded commitments was $ 550,000 and $ 599,000 at June 30, 2025 , and December 31, 2024 , respectively.

The related provision (recapture) expense was ($ 64,000 ) and $ 99,000 for the three months ended June 30, 2025 and June 30, 2024 , respectively.

The related provision recapture was ($ 49,000 ) and ($ 170,000 ) for the six months ended June 30, 2025 and June 30, 2024 , respectively.

Note 5 - Deposits

Deposits and weighted-average interest rates at the dates indicated are as follows:

March 31, 2025

June 30, 2025

December 31, 2024

16 unchanged sentences

$ 1,654,636 2.26 $ 1,688,026 2.42

The aggregate amount of time deposits in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit, currently $250,000, at March 31, 2025 and December 31, 2024 , were $ 171.9 million and $ 174.4 million, respectively.

The aggregate amount of time deposits in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit, currently $250,000, at June 30, 2025 and December 31, 2024 , was $ 170.0 million and $ 174.4 million, respectively.

Maturities of certificates at the dates indicated are as follows:

March 31, 2025

June 30, 2025

December 31, 2024

10 unchanged sentences

$ 557,421 $ 647,842

At March 31, 2025 and December 31, 2024 , deposits included $ 109.8 million and $ 100.8 million, respectively, in public fund deposits.

The Bank had an outstanding letter of credit from the Federal Home Loan Bank of Des Moines ("FHLB") with a notional amount of $ 60.0 million at March 31, 2025 and December 31, 2024 , to collateralize public deposits.

At June 30, 2025 and December 31, 2024 , deposits included $ 120.9 million and $ 100.8 million, respectively, in public fund deposits.

The Bank had an outstanding letter of credit from the Federal Home Loan Bank of Des Moines ("FHLB") with a notional amount of $ 60.0 million at June 30, 2025 and December 31, 2024 , to collateralize public deposits.

This letter of credit exceeds the minimum collateral requirements established by the Washington Public Deposit Protection Commission.

Also included in deposits at March 31, 2025 and December 31, 2024 , were funds held by federally recognized tribes totaling $ 28.6 million and $ 20.1 million, respectively.

Investment securities with a carrying value of $ 23.6 million and $ 22.8 million were pledged as collateral for these deposits at March 31, 2025 and December 31, 2024 , respectively.

Also included in deposits at June 30, 2025 and December 31, 2024 , were funds held by federally recognized tribes totaling $ 35.5 million and $ 20.1 million, respectively.

Investment securities with a carrying value of $ 38.9 million and $ 22.8 million were pledged as collateral for these deposits at June 30, 2025 and December 31, 2024 , respectively.

These investment securities exceed the minimum collateral requirements established by the Bureau of Indian Affairs.

Interest on deposits by type for the periods shown was as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

Demand deposits

$ 240 $ 193 $ 500 $ 380

Money market accounts

2,660 2,420 5,005 4,369

Savings accounts

884 915 1,667 1,868

Certificates of deposit, customer

4,396 4,079 8,918 8,573

Certificates of deposit, brokered

1,372 2,573 3,199 5,102

Total interest expense on deposits

6 unchanged sentences

First Fed periodically uses fixed-rate advances maturing in less than one year as an alternative source of funds.

Available borrowing capacity was $ 217.6 million and $ 207.3 million at March 31, 2025 and December 31, 2024 , respectively.

All borrowings are secured by collateral consisting of single-family, home equity, commercial real estate, and multi-family loans receivable in the amounts of $ 894.1 million and $ 951.8 million at March 31, 2025 and December 31, 2024 , respectively.

The Bank had outstanding letters of credit from the FHLB with notional amounts of $ 60.0 million to collateralize public deposits and $ 772,000 to secure the Bellevue, Washington branch lease at March 31, 2025 .

Available borrowing capacity was $ 179.9 million and $ 207.3 million at June 30, 2025 and December 31, 2024 , respectively.

All borrowings are secured by collateral consisting of single-family, home equity, commercial real estate, and multi-family loans receivable in the amounts of $ 913.6 million and $ 951.8 million at June 30, 2025 and December 31, 2024 , respectively.

First Fed also has an established borrowing arrangement with the Federal Reserve Bank of San Francisco ("FRB") to utilize the discount window for short-term borrowing.

Available borrowing capacity was $ 17.9 million and $ 17.9 million at March 31, 2025 and December 31, 2024 , respectively.

An overnight test of the line of credit was performed at the end of June 2024.

Investment securities with a carrying value of $ 18.5 million and $ 18.6 million were pledged to the FRB at March 31, 2025 and December 31, 2024 , respectively.

Available borrowing capacity was $ 17.6 million and $ 17.9 million at June 30, 2025 and December 31, 2024 , respectively.

An overnight test of the line of credit was performed in June 2025.

Investment securities with a carrying value of $ 18.4 million and $ 18.6 million were pledged to the FRB at June 30, 2025 and December 31, 2024 , respectively.

On March 25, 2021, the Company completed a private placement of $ 40.0 million of 3.75 % fixed-to-floating rate subordinated notes due 2031 (the "Notes") to certain qualified institutional buyers and institutional accredited investors.

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Beginning in April 2026, the interest rate on the Notes will reset quarterly to the three -month Secured Overnight Financing Rate plus 300 -basis points.

In March 2025, the Company repurchased $ 5.0 million of the Notes at a discount, resulting in a reduction to the outstanding balance and recording a gain on extinguishment of debt in noninterest income.

In March 2025, the Company redeemed $ 5.0 million of the Notes at a discount, resulting in a reduction to the outstanding balance and a $ 905,000 gain on extinguishment of debt recorded in noninterest income.

On May 20, 2022, First Northwest consummated a borrowing arrangement with NexBank for a $ 20.0 million revolving line of credit.

Borrowings are secured by a blanket lien on First Northwest's personal property assets (with certain exclusions), including all the outstanding shares of First Fed, cash, loans receivable, and limited partnership investments.

The line of credit matures on May 17, 2025 .

The following table sets forth information regarding our borrowings at the end of and during the three months ended March 31, 2025 .

Available borrowing capacity was $ 10.5 million and $ 13.5 million at June 30, 2025 and December 31, 2024 , respectively.

The line of credit matures on November 17, 2025 .

In October 2023, Pacific Coast Bankers Bank ("PCBB") extended a $ 50.0 million unsecured Fed Funds Borrowing Facility to the Bank.

The Bank must maintain a minimum demand deposit account average balance of $ 250,000 with PCBB.

Availability of funds are not guaranteed and facility usage is generally limited to ten consecutive days.

Available borrowing capacity was $ 50.0 million at both June 30, 2025 and December 31, 2024 .

A borrowing test was performed in June 2025.

This credit facility is authorized for use through June 30, 2026.

The following table sets forth information regarding our borrowings at the end of and during the six months ended June 30, 2025 .

The table includes both long- and short-term borrowings.

1 unchanged sentence

FHLB Overnight Variable-Rate Advances

Line of Credit

NexBank Line of Credit

Subordinated Debt, net

11 unchanged sentences

3,163 2,356 377 729

The amounts by year of maturity and weighted-average interest rate of FHLB long-term, fixed-rate advances at March 31, 2025 are as follows:

The amounts by year of maturity and weighted-average interest rate of FHLB long-term, fixed-rate advances at June 30, 2025 are as follows:

Weighted- Average Interest Rate

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After two years through three years

After three years through four years

Total FHLB long-term advances

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FHLB Overnight Variable-Rate Advances

Line of Credit

NexBank Line of Credit

Subordinated Debt, net

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Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax assets and liabilities.

The effective tax rates were 11.1 % and 53.0 % for the three months ended March 31, 2025 and 2024 , respectively.

The effective tax rates were 13.3 % and 5.2 % for the six months ended June 30, 2025 and 2024 , respectively.

The effective tax rates differ from the statutory maximum federal tax rate for 2025 and 2024 of 21 %, largely due to the nontaxable earnings on BOLI and tax-exempt interest income earned on certain investment securities and loans.

The effective tax rates also include estimates for taxes and penalties on the early surrender of BOLI contracts which were recorded in both periods.

Estimates for taxes and penalties on the early surrender of BOLI contracts were recorded in both periods, further impacting the effective tax rate calculation.

The effective tax rate does not include a valuation allowance for the net deferred tax asset based on management’s evaluation of cumulative earnings inclusive of other comprehensive income and available tax planning strategies.

On July 4, 2025, President Trump signed H.R.

1, the "One Big Beautiful Bill Act," into law.

This legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the reinstatement of 100% bonus depreciation and more favorable rules for determining the limitation on business interest expense.

The Company is currently evaluating the impact on future periods.

Note 8 - Earnings (Loss) per Common Share

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The following table presents a reconciliation of the components used to compute basic and diluted earnings per share for the periods shown:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except share data)

Net (loss) income available to common shareholders

$ ( 9,036 ) $ 396

Net income (loss) available to common shareholders

Dividends and undistributed earnings allocated to participating securities

(Loss) earnings allocated to common shareholders

$ ( 9,036 ) $ 395

Earnings (loss) allocated to common shareholders

Weighted average common shares outstanding

9,380,951 9,542,514

Weighted average unvested restricted stock awards

( 112,987 ) ( 92,774 )

Weighted average unallocated ESOP shares

( 520,542 ) ( 573,504 )

Total basic weighted average common shares outstanding

8,747,422 8,876,236

Basic weighted average common shares outstanding

8,747,422 8,876,236

Dilutive restricted stock awards

Total diluted weighted average common shares outstanding

8,747,422 8,907,184

Basic (loss) earnings per common share

$ ( 1.03 ) $ 0.04

Diluted (loss) earnings per common share

$ ( 1.03 ) $ 0.04

Basic earnings (loss) per common share

Diluted earnings (loss) per common share

Potentially dilutive shares are excluded from the computation of EPS if their effect is anti-dilutive.

At March 31, 2025 and 2024 , antidilutive shares as calculated under the treasury stock method totaled 28,364 and 582 , respectively.

At June 30, 2025 and 2024 , antidilutive shares as calculated under the treasury stock method totaled 23,270 and 21,965 , respectively.

Note 9 - Employee Benefits

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The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Bank's discretionary contributions to the ESOP and earnings on the ESOP assets.

No principal and interest payments were made by the ESOP during the three months ended March 31, 2025 and 2024 .

Principal and interest payments of $ 835,000 and $ 837,000 were made by the ESOP during the six months ended June 30, 2025 and 2024 , respectively.

As shares are committed to be released from collateral, the Company reports compensation expense equal to the average daily market prices of the shares and the shares become outstanding for EPS computations.

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dividends on unallocated ESOP shares are recorded as a reduction of debt and accrued interest.

Compensation expense related to the ESOP for the three months ended March 31, 2025 and 2024 , was $ 140,000 and $ 197,000 , respectively.

Compensation expense related to the ESOP for the three months ended June 30, 2025 and 2024 , was $ 122,000 and $ 148,000 , respectively.

Compensation expense related to the ESOP for the six months ended June 30, 2025 and 2024 , was $ 262,000 and $ 345,000 , respectively.

Shares issued to the ESOP as of the dates indicated are as follows:

March 31, 2025

June 30, 2025

December 31, 2024

1 unchanged sentence

Allocated shares

492,208 492,208

Committed to be released shares

39,663 26,442

Unallocated shares

516,158 529,379

Total ESOP shares issued

1,048,029 1,048,029

Fair value of unallocated shares

$ 5,244 $ 5,400

Note 10 - Stock-based Compensation

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The maximum number of shares that may be utilized for awards under the 2020 EIP is 520,000 .

As of March 31, 2025 , there were 127,038 total shares available for grant under the 2020 EIP, all of which are available to be granted as restricted shares, performance shares, options or stock appreciation rights.

As of June 30, 2025 , there were 120,377 total shares available for grant under the 2020 EIP, all of which are available to be granted as restricted shares, performance shares, options or stock appreciation rights.

As a result of the approval of the 2020 EIP, the First Northwest Bancorp 2015 Equity Incentive Plan (the "2015 EIP") was frozen and no additional awards will be made.

As of March 31, 2025 , there were no shares available for grant under the 2015 EIP.

At this date, there are 2,500 shares granted under the 2015 EIP that are expected to vest subject to the 2015 EIP plan provisions.

There were 64,443 and 55,987 shares of restricted stock awarded, respectively, during the three months ended March 31, 2025 and 2024 .

As of June 30, 2025 , there were no shares available for grant under the 2015 EIP.

The final shares granted under the 2015 EIP vested in the second quarter of 2025.

There were 73,337 and 68,138 shares of restricted stock awarded, respectively, during the six months ended June 30, 2025 and 2024 .

Restricted share awards vest ratably over periods ranging from one to five years from the date of grant provided the eligible participant remains in service to the Company.

The Company recognizes compensation expense for the restricted stock awards based on the fair value of the shares at the grant date amortized over the vesting period.

In addition, there were 33,251 and 0 performance shares awarded, respectively, during the three months ended March 31, 2025 and 2024 .

In addition, there were 33,251 and no performance shares awarded, respectively, during the six months ended June 30, 2025 and 2024 .

Performance share awards vest in accordance with the terms outlined in each award agreement.

The Company recognizes compensation expense for the performance share awards based on the fair value of the shares at the grant date amortized over the performance period.

For the three months ended March 31, 2025 and 2024 , total compensation expense for the equity incentive plans was $ 194,000 and $ 264,000 , respectively.

Included in the compensation expense for the three months ended March 31, 2025 and 2024 , was directors' equity compensation of $ 56,000 and $ 54,000 , respectively.

The following table provides a summary of changes in non-vested restricted stock awards for the periods shown:

Three Months Ended March 31, 2025

For the three months ended June 30, 2025 and 2024 , total compensation expense for the equity incentive plans was $ 211,000 and $ 257,000 , respectively.

Included in the compensation expense for the three months ended June 30, 2025 and 2024 , was directors' equity compensation of $ 65,000 and $ 56,000 , respectively.

For the six months ended June 30, 2025 and 2024 , total compensation expense for the equity incentive plans was $ 405,000 and $ 521,000 , respectively.

Included in the compensation expense for the six months ended June 30, 2025 and 2024 , was directors' equity compensation of $ 121,000 and $ 110,000 , respectively.

The following tables provide a summary of changes in non-vested restricted stock awards for the periods shown:

Three Months Ended June 30, 2025

Weighted-Average Grant Date Fair Value

Non-vested at April 1, 2025

Non-vested at June 30, 2025

(1) A surrender of vested stock awards by a participant surrendering the number of shares valued at the current stock price at the vesting date to cover the participant's tax obligation on the vested shares.

The surrendered shares are canceled and are unavailable for reissue.

Six Months Ended June 30, 2025

Weighted-Average Grant Date Fair Value

Non-vested at January 1, 2025

Non-vested at March 31, 2025

Non-vested at June 30, 2025

The surrendered shares are canceled and are unavailable for reissue.

As of March 31, 2025 , there was $ 1.6 million of total unrecognized compensation cost related to non-vested shares granted as restricted stock awards.

As of June 30, 2025 , there was $ 1.4 million of total unrecognized compensation cost related to non-vested shares granted as restricted stock awards.

The cost is expected to be recognized over the remaining weighted-average vesting period of approximately 2.2 years.

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The following tables show the Company’s assets and liabilities measured at fair value on a recurring basis at the dates indicated:

March 31, 2025

June 30, 2025

Quoted Prices in Active Markets for Identical Assets or Liabilities

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The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at the dates indicated:

March 31, 2025

June 30, 2025

Fair Value (In thousands)

28 unchanged sentences

The following tables summarize the changes in Level 3 assets measured at fair value on a recurring basis, at the dates indicated:

As of or For the Three Months Ended March 31,

As of or For the Three Months Ended June 30,

As of or For the Six Months Ended June 30,

Sold loan servicing rights:

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(1) Represents changes due to collection/realization of expected cash flows and curtailments.

As of or For the Three Months Ended March 31,

As of or For the Three Months Ended June 30,

As of or For the Six Months Ended June 30,

Securities available for sale:

8 unchanged sentences

The following tables present the Company’s assets measured at fair value on a nonrecurring basis at the dates indicated:

March 31, 2025

June 30, 2025

(In thousands)

Individually evaluated collateral dependent loans

Other real estate owned

December 31, 2024

1 unchanged sentence

Individually evaluated collateral dependent loans

At March 31, 2025 and December 31, 2024 , there were no individually evaluated loans with discounts to appraisal disposition value or other unobservable inputs.

At June 30, 2025 and December 31, 2024 , there were no individually evaluated loans with discounts to appraisal disposition value or other unobservable inputs.

The following tables present the carrying value and estimated fair value of financial instruments at the dates indicated:

March 31, 2025

June 30, 2025

Fair Value Measurements Using:

44 unchanged sentences

Unrecognized DB Plan Prior Service Cost, Net of Amortization

Unrealized Losses on Fair Value of Hedged Items

Unrealized (Losses) Gains on Fair Value of Hedged Items

(In thousands)

Balance at December 31, 2023

Balance at March 31, 2024

Other comprehensive loss before reclassification

Amounts reclassified from accumulated other comprehensive income

Net other comprehensive (loss) income

Net other comprehensive income

Balance at June 30, 2024

Balance at March 31, 2025

Other comprehensive income before reclassification

Amounts reclassified from accumulated other comprehensive income

Net other comprehensive income (loss)

Balance at June 30, 2025

Balance at December 31, 2023

Other comprehensive loss before reclassification

Amounts reclassified from accumulated other comprehensive income

Net other comprehensive income

Balance at June 30, 2024

Balance at December 31, 2024

Other comprehensive income before reclassification

1 unchanged sentence

Net other comprehensive income (loss)

Balance at March 31, 2025

Balance at June 30, 2025

Note 13 - Derivatives and Hedging Activities

12 unchanged sentences

Line item in the Consolidated Balance Sheets where the hedged item is included:

March 31, 2025

June 30, 2025

Investment securities (1)

9 unchanged sentences

( 1 ) These amounts include the amortized cost basis of a closed portfolio of AFS securities used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period.

At March 31, 2025 and December 31, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 56.5 million and $ 56.7 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 760,000 and $ 220,000 , respectively;

At June 30, 2025 and December 31, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 56.4 million and $ 56.7 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 1.0 million and $ 220,000 , respectively;

and the amount of the designated hedged items was $ 50.0 million for both periods.

( 2 ) These amounts include the amortized cost basis of a closed portfolio of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period.

At March 31, 2025 and December 31, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 251.3 million and $ 258.1 million, respectively;

At June 30, 2025 and December 31, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 240.9 million and $ 258.1 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 861,000 and ($ 188,000 ), respectively;

6 unchanged sentences

(In thousands)

March 31, 2025

June 30, 2025

Fair value hedges:

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The following table summarizes the effect of fair value accounting on the Consolidated Statements of Operations for the periods shown:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

8 unchanged sentences

Recognized on derivatives designated as hedging instruments

230 ( 1,403 ) 761 ( 248 )

Interest rate swaps - loans

2 unchanged sentences

Recognized on derivatives designated as hedging instruments

Net (expense) income recognized on fair value hedges

279 ( 2,128 ) 1,036 ( 1,244 )

Net expense recognized on fair value hedges

$ ( 36 ) $ ( 741 ) $ ( 43 ) $ ( 380 )

Credit Risk-related Contingent Features

4 unchanged sentences

The Company has interest rate swap agreements with its derivative counterparties that contain provisions where if the Company either defaults or fails to maintain its status as a well or adequately capitalized institution, then the Company could be required to terminate the contract or post additional collateral.

At March 31, 2025 , the Company had derivatives in a net liability position related to these agreements.

The Company has minimum collateral posting thresholds with its derivative counterparties and has posted cash of $ 3.5 million at March 31, 2025 , to secure the related interest rate swap agreements as needed.

At June 30, 2025 , the Company had derivatives in a net liability position related to these agreements.

The Company has minimum collateral posting thresholds with its derivative counterparties and has posted cash of $ 3.5 million at June 30, 2025 , to secure the related interest rate swap agreements as needed.

In certain cases, the Company will have posted excess collateral compared to total exposure due to initial margin requirements or day-to-day rate volatility.

As of March 31, 2025 , the Company was in compliance with all credit risk-related contingent features.

As of June 30, 2025 , the Company was in compliance with all credit risk-related contingent features.

Given the considerations described above, the Company considers the impact of the risk of counterparty default to be immaterial.

3 unchanged sentences

The Company’s activities are considered to be a single industry segment for financial reporting purposes.

The chief operating decision maker ("CODM") is comprised of the chief financial officer and the chief executive officer.

The chief operating decision maker ("CODM") is comprised of the interim chief executive officer and the chief financial officer.

The accounting policies of the Bank are the same as those described in the summary of significant accounting policies in Note 1 of the Company's Annual Report on Form 10 -K for the year ended December 31, 2024 (" 2024 Form 10 -K").

9 unchanged sentences

For these claims, the Company establishes a liability for contingent losses when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated.

For claims determined to be reasonably possible but not probable of resulting in a loss, there may be a range of possible losses in excess of the established liability.

For additional information, see Legal Proceedings contained in Part II, Item 1 of this Form 10-Q.

For claims determined to be reasonably possible but not probable of resulting in a loss, a liability will not be reserved but the amount of loss or a range of possible losses may be disclosed if the amount can be reasonably estimated.

Water Station Management Litigation

As the Company previously disclosed, on August 27, 2024, involuntary bankruptcy proceedings were commenced against Creative Technologies, LLC, Water Station Management, LLC ("Water Station Management") and Refreshing USA, LLC (collectively the "OpCo Debtors"), certain of which were borrowers of the Bank.

In addition, on September 5, 2024, Ideal Property Investments LLC ("Ideal" and, together with the OpCo Debtors, the "Debtors"), also a borrower of the Bank, filed a voluntary petition for bankruptcy in the United States Bankruptcy Court for the Eastern District of Washington.

On November 8, 2024, Ideal commenced an adversary proceeding in such bankruptcy proceedings against the Bank, seeking to avoid certain transactions with the Bank under a theory of constructive fraudulent transfer or, in the alternative, to recharacterize them (the "Adversary Proceeding").

On July 17, 2025, the Bank, the OpCo Debtors, Ideal and the Joint Official Committee of Unsecured Creditors of the Debtors entered into a Settlement Agreement, Plan Support Agreement and Release (the "Settlement Agreement") to resolve the Adversary Proceeding and any other claims of the parties.

Pursuant to the Settlement Agreement, the Bank agreed, in exchange for, among other things, a release of all claims of the parties to the Settlement Agreement to (i) release certain liens against the property of the Debtors and (ii) make certain cash payments of not less than $ 2.87 million and not more than $ 5.74 million, with the amount within that range to be determined by the percentage of certain unsecured creditors of the OpCo Debtors that enter into a mutual release of all claims related to the Debtors with the Bank and the Company under the OpCo Debtors’ Chapter 11 plan of liquidation.

The deadline for creditors to enter into such releases is August 29, 2025.

A hearing to consider confirmation of the OpCo Debtors' Chapter 11 plan of liquidation is scheduled for September 8 and 9, 2025.

The Bank reserved $ 5.8 million for this matter in the first quarter of 2025 as a noninterest expense.

The Bank intends to pursue reimbursement from its insurance carriers.

On June 10, 2025, 3|5|2 Capital GP LLC, on behalf of 3|5|2 Capital ABS Master Fund LP (collectively, "3|5|2 Capital"), filed a complaint (the "Complaint") against First Fed, in the Superior Court of the State of Washington, arising from 3|5|2 Capital’s alleged investment in bonds of Water Station Management, along with certain affiliated entities, in the United States Bankruptcy Court for the Eastern District of Washington.

The Complaint alleges that Water Station Management and certain affiliated individuals and entities misappropriated over $ 100 million by using the proceeds from a bond offering to repay earlier investors and creditors, including the Bank, rather than for the disclosed purpose of expanding Water Station Management’s business.

The Complaint asserts claims against the Bank for aiding and abetting the alleged fraud, conspiracy to commit fraud, unjust enrichment, and constructive trust, and seeks various forms of relief, including not less than $ 106.9 million in compensatory damages plus interest, unspecified punitive damages, and attorney fees and costs.

The Company and the Bank strongly dispute the allegations contained in the Complaint, and intend to vigorously defend against the claims.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements