What changed in this filing

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Item 1. Business

2026-03-12 compared with 2025-03-13 · 299 added, 382 removed, 1013 unchanged (40% of the section changed)

First Northwest Bancorp, a Washington corporation, is a bank holding company and a financial holding company.

First Northwest is engaged in banking activities through its wholly owned subsidiary, First Fed Bank, as well as certain non-banking financial activities.

Non-financial investments include several limited partnership investments, including a 33% interest in The Meriwether Group, LLC ("MWG"), a boutique investment bank focusing on providing entrepreneurs with resources to help them succeed, including equity and debt raising services along with strategic positioning of business through the United States.

At December 31, 2024, the Company had total assets of $2.23 billion, net loans of $1.68 billion, total deposits of $1.69 billion, and total shareholders' equity of $153.9 million.

First Northwest, a Washington corporation, is a bank holding company and a financial holding company.

First Northwest is engaged in banking activities through its wholly owned subsidiary, First Fed, as well as certain non-banking financial activities.

Non-banking investments include several limited partnership investments.

The Company's business activities are generally focused on passive investment activities and oversight of the activities of First Fed.

The Company has entered into several partnerships to strategically invest in financial technology-related businesses, which may result in the development of additional investment opportunities.

Aside from these investments, the information set forth in this report, including consolidated financial statements and related data, relates primarily to First Fed.

First Northwest is subject to regulation by the Board of Governors of the Federal Reserve System ("Federal Reserve").

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First Fed is required to have certain reserves set by the Federal Reserve and is a member of the Federal Home Loan Bank of Des Moines ("FHLB"), which is one of the 11 regional banks in the Federal Home Loan Bank System ("FHLB System").

First Fed Bank is a community-oriented financial institution founded in 1923 in Port Angeles, Washington.

The Bank operates in 18 locations including twelve full-service branches and six business centers, including its headquarters, located in Clallam, Jefferson, King, Kitsap, Snohomish, and Whatcom counties.

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 business, and commercial customers.

Lending activities include loan originations generated through organic production and loan referrals as well as purchasing loans to augment our loan portfolios.

Internal production is focused on originations of first lien one-to-four family mortgage loans, commercial and multi-family real estate loans, residential and commercial construction and land loans, commercial business loans, SBA loans, and consumer loans, consisting primarily of home equity loans and lines of credit.

Over the last five years, we have significantly increased the origination of commercial real estate, multi-family real estate, construction, and commercial business loans.

Loans are also purchased from experienced third-party lenders with a current focus on manufactured home loans and high-end auto loans to increase our commercial business and consumer loan portfolios.

We offer traditional consumer and business deposit products, including transact ion accounts, savings and money market accounts and certificates of deposit ("CDs") for individuals and businesses.

First Fed is a community-oriented commercial bank founded in 1923 in Port Angeles, Washington.

The Bank operates in 17 locations including twelve full-service branches and five business centers, including its headquarters, located in Clallam, Jefferson, King, Kitsap, Snohomish, and Whatcom counties.

We offer a wide range of products and services focused on the lending, deposit and money movement needs of the communities we serve.

To diversify our portfolio and increase interest income, we increased our origination of commercial real estate, multi-family real estate, and commercial business loans.

We also increased our auto and consumer loans through purchased auto loan programs and purchased manufactured homes.

We continue to originate one-to-four family residential mortgage loans, primarily for sale into the secondary market to generate noninterest gain on sale and servicing fee revenue and manage interest rate risk or retain select loans in our portfolio to enhance interest income.

Home equity, residential construction and commercial construction loans are also originated primarily in Western Washington.

We offer traditional consumer and business deposit products, including transaction accounts, savings and money market accounts and certificates of deposit ("CDs" or "term certificates") for individuals, businesses and nonprofit organizations.

Deposits are our primary source of funding for our lending and investing activities.

First Fed has a limited partnership investment in Canapi Ventures SBIC Fund II, LP.

First Fed also has a limited partnership investment in Meriwether Group Capital Hero Fund LP ("Hero Fund") which was previously held by First Northwest.

First Fed has a limited partnership investment in the Canapi Ventures SBIC Fund II, LP.

First Fed also has a limited partnership investment in the Meriwether Group Capital Hero Fund LP ("Hero Fund") which was previously held by First Northwest.

The Hero Fund is a private commercial lender focused on lower-middle market businesses, primarily in the Pacific Northwest.

First Northwest's limited partnership investments include Canapi Ventures Fund, LP;

Subsequent to year end, the Bank signed a redemption agreement which sets forth the path to unwind its investment in the Hero Fund through capital distributions beginning in April 2026.

First Northwest's limited partnership investments include Canapi Ventures Fund, LP ("Canapi Ventures");

BankTech Ventures, LP;

and JAM FINTOP Blockchain, LP.

and JAM FINTOP Frontier Fund, LP.

These limited partnerships invest in fintech-related businesses with a focus on developing digital solutions applicable to the banking industry.

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MWGC holds a 0.01% general partner interest in the Hero Fund.

Subsequent to year end, the Company redeemed its interest in MWGC in full at par.

The executive office of the Company is located at 105 West 8th Street, Port Angeles, Washington 98362, and its telephone number is (360) 457-0461.

We operate through twelve full-service branch offices and six business centers located in Washington State.

We operate through twelve full-service branch offices and five business centers located in Washington State.

We have five branches in Clallam County, one in Jefferson County, one in King County, two in Kitsap County, and three in Whatcom County.

We have two business centers located in Clallam County, two in King County, one in Snohomish County, and one in Whatcom County.

All population and income data below is derived from the U.S.

Census Bureau website.

We have two business centers located in Clallam County, one in King County, one in Snohomish County, and one in Whatcom County.

The branch located in King County will be closing on April 30, 2026.

Clallam County has a population of approximately 77,958 and estimated median family income of $70,370.

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Bureau of Labor Statistics, the unemployment rate for King County was 4.9% at December 31, 2025, compared to 3.8% at December 31, 2024.

As a part of our business plan, we intend to extend our traditional and digital operations throughout the Puget Sound Region and beyond.

As a part of our business plan, we intend to extend our traditional and digital operations in the Puget Sound Region.

This region dominates the economy of the Pacific Northwest and is broadly defined as the area surrounding the Puget Sound that extends into the northwestern quadrant of the state of Washington.

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Other key metropolitan areas within the Puget Sound region include Bellingham (Whatcom County), Mount Vernon (Skagit County), Everett (Snohomish County), Tacoma (Pierce County) and Olympia (Thurston County).

Key employment sectors include aerospace, military, information technology, biotechnology, education, logistics, international trade, and tourism.

The region is well known for the long-term presence of The Boeing Company and Microsoft, two major industry leaders, and since the turn of the century, Amazon.

Key employment sectors in the Puget Sound region include aerospace, military, information technology, biotechnology, education, logistics, international trade, and tourism.

The region is well known for the long-term presence of Boeing and Microsoft, two major industry leaders, and since the turn of the century, Amazon.

The military presence includes a number of large installations serving the U.S.

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Washington's geographic proximity to the Pacific Rim along with multiple deep-water ports makes it a center for international trade, which contributes significantly to the regional economy.

The local ports make Washington the tenth largest exporting state in the nation.

The top five trading partners with Washington include China, Canada, Japan, Mexico and South Korea.

Tourism has also developed into a major industry, due to the scenic beauty, temperate climate, and incredible food and culture.

The local ports make Washington the ninth largest exporting state in the nation.

The top five trading partners with Washington include China, Canada, South Korea, Japan and Mexico.

Tourism is a major industry due to the scenic beauty, temperate climate, and incredible food and culture.

The maritime industry, supported by the trade and fishing industries, is also an important employment sector.

For a discussion regarding the competition in our primary market area, see "Competition."

Our Products and Services

Lending Activities

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The Bank also purchases automobile and manufactured home loans from known, experienced third-party originators.

The Bank utilizes interest rate swaps designated as fair value hedges to manage its exposure to rate fluctuations which results in a derivative basis adjustment included in net loans receivable.

Loan Portfolio Analysis

The following table represents information concerning the composition of our loan portfolio, excluding loans held for sale, by the type of loan at the dates indicated:

December 31, 2025

December 31, 2024

(dollars in thousands)

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The following table shows the composition of our loan portfolio, excluding loans held for sale, in dollar amounts and in percentages by fixed rates and adjustable rates at the dates indicated:

December 31, 2025

December 31, 2024

(dollars in thousands)

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These tables do not reflect the effects of unscheduled principal prepayments.

Within One Year (1)

After One Year Through Three Years

After Three Years Through Five Years

One Year or Less (1)

After One Year Through Five Years

After Five Years Through Fifteen Years

Beyond Fifteen Years

Weighted Average Rate

(dollars in thousands)

Weighted Average Rate

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Weighted Average Rate

(Dollars in thousands)

One-to-four family

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(1) Includes demand loans, loans having no stated maturity, and overdraft loans.

Predetermined Interest Rate

(dollars in thousands)

Fixed Interest Rate

Floating or Variable Rate

Loans above maturing after one year:

(Dollars in thousands)

One-to-four family

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Total loans maturing after one year

Geographic Distribution of our Loans

The following table shows at December 31, 2024, the geographic distribution of our loan portfolio in dollar amounts and percentages.

North Olympic Peninsula (1)

Puget Sound Region (2)

Other Washington

Total in Washington State

All Other States (3)

% of Total in Category

(Dollars in thousands)

Real estate loans:

One-to-four family

Commercial real estate

Construction and land

Total real estate loans

Consumer loans:

Auto and other consumer

Total consumer loans

Commercial business loans

Total loans receivable

(1) Includes Clallam and Jefferson counties.

(2) Includes Kitsap, Mason, Thurston, Pierce, King, Snohomish, Skagit, Whatcom, and Island counties.

(3) Includes loans located primarily in California, Florida, Texas, and Oregon.

One-to-Four Family Real Estate Lending.

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At December 31, 2025, $402.7 million, or 24.8%, and $288.5 million, or 17.7%, of our total loan portfolio was secured by commercial and multi-family real estate property, respectively.

At December 31, 2024, we have identified $116.1 million, or 16.0%, of our commercial and multi-family real estate portfolio as owner-occupied commercial real estate and $606.9 million, or 84.0%, is secured by income producing, or non-owner-occupied, commercial and multi-family real estate.

At December 31, 2025, we identified $115.1 million, or 16.7%, of our commercial and multi-family real estate portfolio as owner-occupied commercial real estate and $576.1 million, or 83.3%, is secured by income producing, or non-owner-occupied, commercial and multi-family real estate.

Over 97% of our commercial real estate and multi-family loans are secured by properties located in the state of Washington.

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Adjustable-rate multi-family residential and commercial real estate loans are generally priced to market indices with appropriate margins, which may include The Wall Street Journal prime rate, the U.S.

Constant Maturity Treasury Rate, or a similar term FHLB borrowing rate.

Constant Maturity Treasury Rate, Term Secured Overnight Financing Rate ("TSOFR"), or a similar term FHLB borrowing rate.

Adjustable-rate loans could have increased credit risk when interest rates rise.

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To mitigate this risk to both the borrower and First Fed, adjustable-rate loans may contain both periodic and lifetime interest rate caps, limiting the amount of payment changes.

During 2023, the Bank successfully migrated away from the London Interbank Offered Rate ("LIBOR") as an index for all new and existing loans.

Commercial loans previously tied to LIBOR converted to a similar termed Term Secured Overnight Financing Rate ("TSOFR") product with the recommended spread adjustment set by the Alternative Reference Rate Committee at that time.

Of the adjustable-rate commercial and multi-family real estate loans, 66.01% are subject to a floor rate and the weighted average floor rate on these loans was 3.66% at December 31, 2025.

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The minimum debt service coverage ratio is 1.25 for non-owner-occupied and 1.20 for owner-occupied properties.

We require independent appraisals or evaluations on all loans secured by commercial or multi-family real estate from our internal list of approved appraisers.

We require independent appraisals or evaluations at origination on all loans secured by commercial or multi-family real estate from our internal list of approved appraisers.

We review most commercial real estate and multi-family loan relationships annually to ensure the borrower continues to meet certain loan requirements as set forth in loan covenants, which may include an annual inspection of the property.

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All commercial loans risk rated special mention or worse with exposure of $100,000 or more are also subject to the full credit review.

Loans with less than three years remaining in term are exempt from the annual requirement.

Relationships with an aggregate credit exposure below $1.5 million are monitored for payment performance, changes in guarantor credit scores, and compliance with all other terms and conditions contained in the loan documents.

All individuals that guarantee $3.0 million or more in aggregate commercial debt of any type are subject to annual financial reviews.

Relationships with an aggregate credit exposure below $750,000 that have been paid as agreed for at least three years are exempt from the annual requirement, so long as the Borrower remains in compliance with all other terms and conditions noted in the loan documents.

While we cannot prevent loans from becoming delinquent, we believe our monitoring and formal review processes provide us with the opportunity to better identify problem loans in a timely manner and to work with the borrower prior to the loan becoming delinquent.

The following table provides information on multi-family and commercial real estate loans by type at the dates indicated:

December 31, 2025

December 31, 2024

(dollars in thousands)

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We generally target individual commercial and multi-family real estate loans between $1.0 million and $10.0 million to small and mid-size operators and investors in our market areas as well as other parts of Washington.

We may also make commercial and multi-family real estate loans in other states if we have a pre-existing relationship with the borrower.

Our three largest commercial and multi-family borrowing relationships, including current loan balances and unused commitments, at December 31, 2024 consisted of a $23.2 million relationship secured by construction and commercial real estate in King County, Washington;

a $20.0 million relationship secured by construction and multi-family real estate in Pierce and Snohomish Counties;

and a $19.4 million relationship secured by multi-family real estate in Pierce County.

We typically require a pre-existing relationship with the borrower in order to originate commercial and multi-family real estate loans for properties located in other states.

Our three largest commercial and multi-family borrowing relationships, including current loan balances and unused commitments, at December 31, 2025 consisted of a $19.8 million relationship secured by multi-family real estate in Pierce and Snohomish Counties, Washington;

a $19.1 million relationship secured by multi-family real estate in Pierce County, Washington;

and a $17.2 million relationship secured by construction and multi-family real estate in King County, Washington.

The construction loan balances are included in Construction and Land Lending below.

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Independent construction inspectors are used to evaluate the construction draw request relative to the progress.

Our construction administrator reviews all construction projects, inspection reports, and construction loan advance requests to ensure they are appropriate and in compliance with all loan conditions.

Our construction administrators review all construction projects, inspection reports, and construction loan advance requests to ensure they are appropriate and in compliance with all loan conditions.

Other risk management tools include title insurance, date down endorsements or periodic lien inspections prior to the payment of construction loan advances.

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At the dates indicated, the composition of our construction and land portfolio was as follows:

(In thousands)

(dollars in thousands)

December 31, 2025

December 31, 2024

One-to-four family residential

Multi-family residential

Commercial acquisition-renovation

Commercial real estate

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The following tables show our construction commitments by type and geographic concentration at the dates indicated:

December 31, 2024

(dollars in thousands)

Olympic Peninsula

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Other Washington

(In thousands)

December 31, 2025

Construction Commitment

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Amortized cost for land

December 31, 2023

(dollars in thousands)

Olympic Peninsula

1 unchanged sentence

Other Washington

(In thousands)

December 31, 2024

Construction Commitment

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Consumer Lending.

We offer consumer loans, including home equity loans, home equity lines of credit, auto loans and personal lines of credit.

We offer consumer loans, including home equity loans, home equity lines of credit and personal lines of credit.

At December 31, 2025, home equity loans and lines of credit totaled $85.1 million, or 5.2%, of the loan portfolio.

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We may or may not have private mortgage insurance coverage.

At December 31, 2024, auto loans totaled $133.9 million, of which $132.3 million were purchased and $453,000 were originated through indirect dealer programs described below;

the remaining $1.2 million were originated through our First Fed branches.

Auto loans have a maximum term of up to 180 months for purchased classic and collector vehicles, up to 96 months for indirect auto loans, and up to 84 months for all other auto loans, depending on the age and condition of the vehicle and strength of the borrower.

At December 31, 2025, auto loans totaled $146.7 million, of which $146.2 million were purchased.

The remaining $545,000 were originated through our First Fed branches.

Auto loans have a maximum term of up to 180 months for purchased classic or collector vehicles and up to 84 months for all other auto loans, depending on the age and condition of the vehicle and strength of the borrower.

Loan rates for auto lending, as well as all other consumer loans, are priced based on the specific loan type and the risks involved.

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We purchase auto loans through a relationship with Woodside Credit, LLC, a loan originator that operates in all 50 states, underwriting and funding loans for classic (25 years or older) and collector (premium price with limited production) vehicles.

At December 31, 2025, $137.7 million of Woodside auto loans was included in consumer loans.

These loans typically range from $10,000 to over $600,000 with terms that range from 84 to 180 months and generally require down payments of 10% to 20% of the cost of the vehicle.

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Historically, losses on these types of loans have been less than 2% and First Fed experienced a loss rate of 1.18% and 0.36%, respectively, for each of the years ended December 31, 2025 and 2024.

We also purchase auto loans through a partnership with First Help Financial, a loan originator that operates in selected states, underwriting and funding loans to "superior subprime" customers who have a demonstrated capacity to pay and have limited or no blemishes on their credit report, but have limited credit experience.

We have also purchased auto loans through a partnership with First Help Financial, a loan originator that operates in selected states, underwriting and funding loans to "superior subprime" customers who have a demonstrated capacity to pay and have limited or no blemishes on their credit report, but have limited credit experience.

At December 31, 2025, $8.5 million of First Help auto loans was included in consumer loans.

Loans in the First Help Auto Loan Purchase Program typically range from $10,000 to $75,000 with terms that range from 72 to 84 months.

We periodically receive loan pools with complete packages that we underwrite to determine whether to purchase or pass on the loans submitted.

The seller retains the servicing on these loans which includes the collection activities as well as the rehab and marketing related to the sale of any collateral that was repossessed or foreclosed upon.

Indirect auto loans were previously originated with auto dealerships located throughout our market areas through CRIF Lending Solutions, a third-party service provider that also facilitated a portion of the underwriting and origination of these loans based on our underwriting and pricing criteria.

We ended our relationship with that service provider in 2020, effectively eliminating new production.

We may, however, work directly with local auto dealerships in the future.

Indirect auto loan customers receive a fixed rate loan in an amount and at an interest rate that is based on review of their FICO credit score, age of the vehicle, and loan term.

Our underwriting and pricing criteria for indirect auto loans focuses primarily on the ability of the borrower to repay the loan rather than the value of the underlying collateral.

The loan term on indirect auto loans averages 70 months, which is comparable to national auto industry data.

We received loan pools with complete packages that we underwrote to determine whether to purchase or pass on the loans submitted.

The seller retains the servicing on these loans, including collection activities as well as the rehab and marketing related to the sale of any collateral that was repossessed or foreclosed upon.

We purchase manufactured home loans through a partnership with Triad Financial Services, a loan originator that underwrites and funds these loans.

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Loans are submitted on a weekly flow basis or as one-off pools.

All loans are considered “full doc” and complete packages are reviewed to determine if the loan will be purchased or not.

All loans are considered "full document" and complete packages are reviewed to determine if the loan will be purchased or not.

The collateral may include both real estate and personal property depending on whether or not the title to the subject property has been eliminated.

The collateral for these loans is generally personal property;

however, loans where the title to the manufactured home has been permanently attached to a land parcel also include real estate collateral.

The program has a credit enhancement in the form of a reserve account that can be used to protect the bank from charge offs and prepayments.

The reserve represented 5 .2% of related loan balances at year end;

however, it will vary depending on the pricing options selected during the acquisition of the loans .

First Fed had three loans placed into repossession inventory in 2024 and one in 2023 for a variety of reasons.

The reserve account, which is held in a limited-access controlled deposit account at First Fed, represented 5.4% of related loan balances at year end.

The funding of the reserve account will vary depending on the pricing options selected during the acquisition of the loans .

First Fed had five loans placed into repossession inventory in 2025 and three in 2024 for a variety of reasons.

The Bank was made whole through the credit enhancement reserve for all loans placed into repossession inventory.

In 2022, we began purchasing unsecured consumer loans through a partnership with Splash Financial who underwrites and funds these loans.

At December 31, 2024, $3.1 million of purchased unsecured loans was included in consumer loans.

These loans range from $1,000 to $35,000 with terms that range from 36 to 60 months .

Prior to September 2023, we purchased unsecured consumer loans through a partnership with Splash Financial who underwrote and funded these loans.

We received individual loan packages that we underwrote to determine whether to purchase or pass on.

The seller retains the servicing on these loans.

Of the $11.1 million in loans purchased between June 2022 and February 2023, First Fed has experienced losses totaling $4.7 million .

The seller retained the servicing on these loans.

At December 31, 2025, $1.2 million of purchased unsecured loans was included in consumer loans.

Loans purchased between June 2022 and March 2023 ranged from $1,000 to $35,000 with terms that ranged from 36 to 60 months .

Of the $11.1 million in loans purchased under the original program participation criteria, First Fed has experienced losses totaling $5.0 million.

The originator paid First Fed $950,000 as a partial reimbursement of program losses incurred during 2023.

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Th e seller retains the servicing on these loans.

A reserve account equal to approximately 3% of the unpaid balance serves as a credit enhancement to help protect against charge offs and prepaid loans.

A reserve account, which is held in a limited-access controlled deposit account at First Fed, equal to approximately 3% of the unpaid balance serves as a credit enhancement to help protect against charge offs and prepaid loans.

The loan originator has experienced a loss rate of 2.9% on the total portfolio of loans in this program.

First Fed has not experienced any losses on these loans to-date.

Indirect commercial business loans were referred to the Bank through Waterstation Management, LLC, a third-party broker that assists borrowers with completing and submitting an electronic commercial loan application to finance equipment.

At December 31, 2024, $5.0 million of these brokered loans were included in commercial business loans.

Indirect commercial business loan customers received a fixed rate loan up to 75% of the equipment cost based on a review of their FICO credit score, historical cash flows and overall financial strength.

Our underwriting and pricing criteria for this program focused primarily on the ability of the borrower to repay the loan rather than the value of the underlying collateral.

These loans ranged from $170,000 to $1.5 million with terms ranging from 96 to 132 months.

Of the $16.5 million loans originated by First Fed during 2021 and 2022, the Bank has experienced losses totaling $6.3 million.

We ceased making these loans in July 2022 and continue to pursue satisfactory repayment of these loans.

First Fed periodically provides funding to Northpointe Bank through participation in their Northpointe Bank Mortgage Purchase Program ("Northpointe MPP").

At December 31, 2025, a participation balance of $18.9 million was included in commercial business loans.

The Northpointe MPP provides short-term advances to well-qualified mortgage companies throughout the United States.

The Northpointe MPP provides short-term advances to well-qualified mortgage companies throughout the U.S.

These advances provide gap financing for the period between when a loan funds and when it is purchased by the end investor.

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Once the loan is purchased by the end investor, funds are sent directly to Northpointe Bank who, in turn, disburses it out to the partner banks on a pro rata basis.

Only prime, first lien residential mortgage products which are agency eligible (such as Fannie Mae, Freddie Mac, or the VA) are included in the program.

Only prime, first lien residential mortgage products which are agency eligible (such as Fannie Mae, Freddie Mac, or the Department of Veterans Affairs) are included in the program.

Northpointe Bank underwrites all the loans entering into the program to ensure conformity with program and investor requirements.

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The daily limit is periodically evaluated and adjusted to align with strategic goals.

Included in total commercial business loans is $4.0 million of loans originated by First Northwest.

These loans contain clauses which allow for a portion of the debt to be converted into securities, mezzanine debt or other non-standard terms.

Loan Origination and Underwriting.

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Through its current policy, the Board delegates lending authority to the Bank’s management and staff and to the Senior Loan Committee ("SLC").

Overdrafts and small business express loans require one signature.

Overdrafts require one signature.

The Chief Banking Officer ("CBO") and the Chief Operating Officer ("COO") have the authority to approve overdrafts up to $100,000;

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and certain other staff and management have authority to approve overdrafts ranging from $5,000 to $50,000.

Our small business express loans, which are commercial business loans of $100,000 or less, are approved by the CCO or designated personnel and management.

In addition, the CCO may approve Automated Clearing House and Remote Deposit Capture transactions in any amount and has the authority to approve most modifications and extensions of credit in any amount for terms of less than one year.

Mortgage loan underwriters have approval authority up to $667,000.

Mortgage loan underwriters have approval authority ranging from $250,000 for Junior Underwriters up to $850,000 for Senior Underwriters.

The Director of Mortgage and Consumer Credit has approval authority of $2.0 million, and the CCO has approval authority of $3.0 million.

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Commercial loan relationships over $10.0 million are approved by the SLC.

The Director of Mortgage and Consumer Credit has approval authority for consumer loans up to $1.0 million and certain named individuals have authority ranging from $150,000 to $500,000.

The Director of Mortgage and Consumer Credit has approval authority for consumer loans up to $1.0 million and certain roles have authority ranging from $150,000 to $500,000.

Additionally, we have assigned authority to approve indirect auto loans and wholesale partnerships meeting our underwriting and pricing criteria to our third-party service providers.

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Primary Collateral Type

(In thousands)

Commercial Construction

(dollars in thousands)

Multi-family Real Estate

Commercial Construction

Multi-family Real Estate

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We originate mortgage, consumer, multi-family and commercial real estate, and commercial business loans for our portfolio utilizing fixed- and adjustable-rate loan terms.

During the years ended December 31, 2024, 2023, and 2022, our total loan originations were $232.4 million, $221.9 million, and $548.3 million, respectively.

We also purchase whole and participation loans on a servicing retained or released basis.

During the years ended December 31, 2024, 2023, and 2022, we purchased $88.9 million, $83.1 million, and $96.1 million of loans, respectively.

During the years ended December 31, 2025 and 2024, our total loan originations were $213.1 million and $232.4 million, respectively.

We purchase whole and participation loans on a servicing retained or released basis.

During the years ended December 31, 2025 and 2024, we purchased $77.9 million and $88.9 million of loans, respectively.

During the last year, the majority of purchases consisted of auto loans purchased through our partnership with an originator specializing in classic and collector vehicles, manufactured home loans purchased through our partnership with an originator specializing in that type of lending, and unsecured commercial business loans to borrowers primarily in the healthcare industry.

A secondary source of purchased loans has been commercial real estate loans and participations, whereby we receive a portion of a loan originated by another lender who retains the servicing and customer relationship and may, depending on the terms of the agreement, retain a portion of the interest as a servicing fee.

Loan pools purchased prior to 2018 consisted mainly of loans exceeding conforming loan limits, or "jumbo loans," secured by single family residential properties located in the states of Washington and California.

Purchased loans, loan pools, and participations are underwritten by our credit administration department and approved by the appropriate loan committee(s) prior to purchase, according to our lending authority guidelines.

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Premiums and discounts are capitalized at the time of purchase and amortized over the remaining contractual life of the loan.

We had $20.4 million, $16.7 million, and $16.0 million of net premiums paid on purchased loans at December 31, 2024, 2023, and 2022.

We had $22.1 million and $20.4 million of net premiums paid on purchased loans at December 31, 2025 and 2024.

The Olympic Peninsula region, which includes a substantial concentration of our depositors, has experienced limited population growth, and the region's unemployment rate is higher than both the state and national unemployment rates.

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As part of that strategy, we may purchase loans with different credit and underwriting criteria than those we originate directly.

We sell residential first mortgage loans in the secondary market.

We also sell residential first mortgage loans in the secondary market.

The Bank has historically focused on originating fixed-rate residential mortgages, which we may sell to the secondary market to manage our interest rate risk and improve noninterest income.

During the years ended December 31, 2024, 2023, and 2022, we sold $22.5 million, $25.5 million, and $26.1 million of residential mortgage loans, respectively.

Our secondary market relationship for residential loans is with Freddie Mac and other select third-party investors, which provides us greater flexibility in choosing the best pricing, whether we are selling on a servicing retained or released basis.

At December 31, 2024, we were servicing $329.3 million of loans for others.

During the years ended December 31, 2025 and 2024, we sold $24.6 million and $22.5 million of residential mortgage loans, respectively.

Our secondary market relationship for residential loans is with Freddie Mac and other select third-party investors, which provides us with greater flexibility in choosing the best pricing, whether we are selling on a servicing retained or released basis.

At December 31, 2025, we were servicing $301.6 million of loans which we originated and subsequently sold the principal to others.

We earned servicing income on these loans of $705,000, and $736,000 for the years ended December 31, 2025 and 2024, respectively.

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The balance of loans serviced for others with life of the loan recourse provisions was $1.2 million at December 31, 2025.

There were no loans repurchased during the years ended December 31, 2024, 2023, or 2022.

There were no loans repurchased during the years ended December 31, 2025 and 2024.

We may solicit one or more financial institutions to take a portion of a commercial real estate loan to manage risk, concentrations, or to generate income through gain on sale or servicing fees.

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We typically retain an ownership interest in the loan as well as the loan servicing rights to maintain our dire ct relationship with the borrower and better manage our credit risk.

No commercial real estate loans were sold or participated during the year en ded December 31, 2024.

During the year ended December 31, 2023 , we sold $14.6 million in multi-family loan participations, retaining both the servicing and a portion of the loan balances .

In 2021, we expanded our relationship with the SBA to include additional products.

The SBA loans g enerally carry a government guarantee ranging from 75%-90% of the loan balance.

During the year en ded December 31, 2025, we sold one commercial business loan and one commercial construction loan.

We also participated out 58% of another construction loan, retaining the servicing.

No commercial real estate loans were sold or participated during the year ended December 31, 2024 .

We partner with the Small Business Administration ("SBA") to originate loans through their 7(a) and 504 programs.

SBA 7(a) loans g enerally carry a government guarantee ranging from 75%-90% of the loan balance.

The Bank's intent is to sell the guaranteed portion and hold the remaining unguaranteed portion of the note.

The Bank retains the servicing on these loans.

We sold $3.0 million, $852,000 and $5.7 million of SBA participations during the years ended December 31, 2024, 2023, and 2022 , respectively.

We originated SBA loans totaling $349,000 but did not participate out any of the balances during the year en ded December 31, 2025.

We originated SBA loans totaling $4.8 million and sold $3.0 million of SBA participations during the year ended December 31, 2024 .

Gains, losses and transfer fees on sales of one-to-four family and commercial real estate loans are recognized at the time of the sale.

Our net gain on sale of residential real estate, commercial real estate, and SBA loans was $112,000 and $312,000 for the years ended December 31, 2025 and 2024, respectively.

The following table shows our loan origination, sale and repayment activities for the periods indicated:

The following table shows total loans originated, purchased, sold, repaid and other changes for the periods indicated:

Year Ended December 31,

(In thousands)

(dollars in thousands)

Originations by type:

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One-to-four family

Commercial real estate

Commercial business

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Multi-family sold

Commercial real estate sold

Construction sold

Commercial business sold

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Net deferred fees or costs associated with loans that are prepaid or sold are recognized as income or expense at the time of prepayment or sale.

Net deferred loan fees included in net loans receivable on the balance sheet totaled $1.3 million, $1.9 million, and $2.8 million at December 31, 2024, 2023, and 2022, respectively.

Net deferred loan fees included in net loans receivable on the balance sheet totaled $551,000 and $1.3 million at December 31, 2025 and 2024, respectively.

In addition to deferred loan fees, we receive other fee income on loan commitments, late payments and miscellaneous services.

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Total Loans Delinquent 60 Days or More

(dollars in thousands)

Percent of Loan Category

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Percent of Loan Category

(Dollars in thousands)

Real estate loans:

One-to-four family

Commercial real estate

Construction and land

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Auto and other consumer

Total consumer loans

Commercial business loans

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Nonperforming assets include nonperforming loans, real estate owned, and other repossessed assets.

Also presented below are totals, regardless of accrual status, for modified loans to troubled borrowers ("MLTB") restructured during 2024 and 2023 and, for prior fiscal years, total troubled debt restructurings ("TDR").

Also presented below are totals, regardless of accrual status, for modified loans to troubled borrowers ("MLTB").

Nonperforming assets as a percentage of total assets were 1.1% and 1.4% at December 31, 2025 and 2024, respectively.

At each of the dates indicated in the following table, there were no loans delinquent more than 90 days that were accruing interest.

The decrease in nonperforming loans during 2025 was primarily due to payments received followed by the sale of the $8.1 million commercial construction project placed on nonaccrual status in 2024.

Other decreases from payment and charge-off activity were offset by loans that transitioned into nonaccrual status during 2025.

The increase in nonperforming loans during 2024 primarily resulted from an $8.1 million commercial construction project which the Bank believes does not represent significant exposure to loss based on a recent third-party appraisal.

The loan was placed on nonaccrual status and downgraded to a classified loan status, in line with applicable Bank policy.

During the fourth quarter of 2023, the Bank downgraded a commercial loan relationship which totaled $9.3 million involving several commercial real estate and business loans, a $3.6 million SBA loan which has a 75% program guarantee, and a $104,000 commercial business loan.

The following table summarizes our nonperforming assets at the dates indicated:

(dollars in thousands)

December 31, 2025

December 31, 2024

Nonaccrual loans:

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Total nonaccrual loans

MLTB (2024 and 2023) and TDR (2022) loans:

One-to-four family

Real estate owned:

Construction and land

Total nonperforming assets

Commercial real estate

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Total restructured loans

Nonaccrual and 90 days or more past due loans as a percentage of total loans

Nonperforming MLTB or TDR loans included in total nonaccrual loans and total restructured loans above

For the years ended December 31, 2024, 2023, and 2022, gross interest income which would have been recorded had the nonaccrual loans been current in accordance with their original terms amounted to $3.0 million, $710,000, and $699,000, respectively.

Nonaccrual loans as a percentage of total loans

Nonperforming MLTB loans included in total nonaccrual loans and total restructured loans above

For the years ended December 31, 2025 and 2024, gross interest income which would have been recorded had the nonaccrual loans been current in accordance with their original terms amounted to $4.3 million and $2 million, respectively.

The amount that was included in interest income on a cash basis on nonaccrual loans was $132,000 and $201,000 for the years ended December 31, 2025 and 2024, respectively.

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Other repossessed property, including automobiles, is also recorded at the lower of cost or fair market value less selling costs.

As of December 31, 2024, we had no repossessed real or personal property owned.

As of December 31, 2025, we had $1.4 million of repossessed real property owned and no personal property.

Restructured Loans.

According to United States Generally Accepted Accounting Principles ("GAAP"), we are required to account for certain loan modifications or restructurings as a MLTB.

According to U.S.

Generally Accepted Accounting Principles ("GAAP"), we are required to account for certain loan modifications or restructurings as a MLTB.

In general, the modification or restructuring of a debt is considered a MLTB if we, for economic or legal reasons related to a borrower’s financial difficulties, grant a concession to the borrower under more favorable terms and conditions than we would grant to an ordinary bank customer under the normal course of business.

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Adversely classified loans that are subsequently modified and placed in nonaccrual status are generally not returned to accrual status until a period of at least six months with consecutive satisfactory payment performance has occurred, and a return to accrual status is further supported by current financial information and analysis which demonstrates a particular borrower has the financial capacity to meet future debt service requirements.

At December 31, 2024, we had one loan with an aggregate amortized cost of $6.4 million that was identified as an MLTB loan restructured during the year ended December 31, 2024, which was performing in accordance with its revised payment terms and was accruing.

There was no reserve included in the allowance for credit losses on loans at December 31, 2024, for this individually evaluated MLTB loan.

At December 31, 2025, we had three loans with an aggregate amortized cost of $8.0 million that were identified as MLTB loans restructured during the year ended December 31, 2025 .

Only one of the three modified loans was performing in accordance with its revised terms and was accruing interest at year end.

No reserve was included in the allowance for credit losses on loans at December 31, 2025, for the two nonperforming, individually evaluated MLTB loans as the estimated value of the collateral fully covered the recorded loan balances.

Nonaccrual MLTB loans are classified as substandard while accruing MLTB loans may be classified at any level in our loan grading system depending upon verified repayment sources, collateral values and repayment history.

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We review, at least quarterly, the problem assets in our portfolio to determine whether any assets require reclassification.

Based on our review, as of December 31, 2024, 2023, and 2022, we had classified loans of $42.5 million, $35.1 million, and $16.9 million, respectively.

Based on our review, as of December 31, 2025 and 2024, we had classified loans of $35.3 million and $42.5 million, respectively.

We had no other classified assets at these dates.

In addition to the classified loans, we had $11.1 million, $14.7 million and $20.7 million of special mention loans at December 31, 2024, 2023, and 2022, respectively.

Over 61% of the classified loan balance at December 31, 2024, is comprised of the following relationships:

an $11.4 million construction loan relationship, which became a classified loan in the fourth quarter of 2022;

an $8.1 million commercial construction loan relationship, which became classified in the second quarter of 2024;

and a $6.2 million commercial loan relationship, which became classified in the fourth quarter of 2023.

The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in two of these three collateral-dependent relationships.

The Bank is also closely monitoring a group of commercial business loans that have similar collateral, with 15 loans totaling $2.2 million included in classified loans at December 31, 2024, and an additional eight loans totaling $2.8 million included in the special mention risk grading category.

The Bank continues to work with these borrowers to facilitate satisfactory repayment.

Over 77% of the classified loan balance at December 31, 2025, was comprised of the following relationships:

a $12.5 million commercial real estate loan relationship, which became classified in the fourth quarter of 2025;

a $6.3 million commercial real estate loan relationship, which became classified in the third quarter of 2024;

a $5.1 million construction loan relationship, which became a classified loan in the fourth quarter of 2022;

and a $3.4 million commercial real estate loan relationship, which became classified in the second quarter of 2025.

The Bank has exercised legal remedies, including the appointment of a third-party receiver and foreclosure actions, to liquidate the underlying collateral to satisfy the real estate loans in the third largest of these four collateral-dependent relationships.

In addition to the classified loans, we had $21.6 million and $11.1 million of special mention loans at December 31, 2025 and 2024, respectively.

Classified loans, consisting solely of substandard loans, were as follows at the dates indicated:

(In thousands)

(dollars in thousands)

December 31, 2025

December 31, 2024

Real estate loans:

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All Other States

(dollars in thousands)

% of Total in Category

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% of Total in Category

(Dollars in thousands)

Real estate loans:

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The following table summarizes the distribution of our allowance for credit losses on loans at the dates indicated.

Percent of loans in each category to total loans

December 31, 2025

December 31, 2024

(dollars in thousands)

Percent of loans in each category to total loans

(Dollars in thousands)

Balance at End of Period Applicable to:

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Total allowance

(1) Represents the allowance for loan losses by class under the incurred loss methodology.

The following table sets forth an analysis of our allowance for credit losses on loans:

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Allowance at beginning of period

Commercial real estate

Construction and land

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Net (charge-offs) recoveries

Impact of Day 1 CECL adoption

Provision for credit losses on loans

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Treasury obligations, securities of various federal agencies, certain certificates of deposit of insured banks and savings institutions, banker’s acceptances, repurchase agreements, federal funds, commercial paper, investment grade corporate debt, investment grade commercial and residential mortgage-related securities, and obligations of states and their political subdivisions.

Our Treasurer, under the direction of the CFO, has the responsibility for the management of our investment portfolio.

Our Chief Financial Officer has the responsibility for the management of our investment portfolio.

Various factors are considered when making investment decisions, including the marketability, maturity, duration, and tax consequences of the proposed investment.

The maturity structure of investments will be affected by various market conditions, including the current and anticipated slope of the yield curve, the level of interest rates, the trend of deposit inflows, and the anticipated demand for funds from deposit withdrawals and loan originations and purchases.

The general objective of our investment portfolio is to provide liquidity, generate earnings, and manage risk, including credit, reinvestment, liquidity and interest rate risks.

Total investment securities increased $44.7 million, or 15.1%, to $340.3 million at December 31, 2024, from $295.6 million at December 31, 2023, as a result of purchases and an improvement in the portfolio market value, partially offset by sales and principal payments.

The general objective of our investment portfolio is to provide liquidity, generate earnings, and manage risk.

These risks include credit, reinvestment, liquidity and interest rate risks.

Total investment securities decreased $70.0 million, or 20.6%, to $270.3 million at December 31, 2025, from $340.3 million at December 31, 2024, as a result of maturities and early redemptions totaling $65.8 million and $20.1 million of principal payments received.

These reductions were partially offset by an increase in the portfolio market value of $10.4 million, which was mainly driven by changes in long-term interest rates.

The issuers of mortgage-backed agency securities ("MBS") held in our portfolio, which include Fannie Mae, Freddie Mac, and Government National Mortgage Association ("Ginnie Mae"), and certain issuers of agency bonds held in our portfolio, which include FHLB and Fannie Mae, guarantee the timely principal and interest payments in the event of default.

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As a member of the FHLB, we had an average balance of $12.7 million in stock of the FHLB for the twelve months ended December 31, 2025.

We received $1.2 million, $880,000, and $502,000 in dividends from the FHLB during the years ended December 31, 2024, 2023, and 2022, respectively.

We received $1.2 million and $1.2 million in dividends from the FHLB during the years ended December 31, 2025 and 2024, respectively.

The table below sets forth information regarding the composition of our securities portfolio and other investments at the dates indicated.

At December 31, 2024, our securities portfolio contained securities issued by the United States Government and its agencies as well as securities issued by Capital Funding Mortgage Trust ("CFGMS") which had an aggregate book value in excess of 10% of our equity capital.

The book value and fair market value of CFGMS securities were $34.9 million and $34.8 million, respectively, at December 31, 2024, and are included in non-agency issued mortgage-backed securities below.

Amortized Cost

At December 31, 2025, our securities portfolio contained securities issued by the United States Government and its agencies which had an aggregate book value in excess of 10% of our equity capital.

December 31, 2025

December 31, 2024

(dollars in thousands)

Amortized Cost

(In thousands)

Securities available for sale:

Municipal bonds

Treasury notes

International agency issued bonds (Agency bonds)

government agency issued asset-backed securities (ABS agency)

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Maturity of Securities.

The composition and contractual maturities of our investment portfolio at December 31, 2024 and December 31, 2023, excluding FHLB stock, are indicated in the following table.

The composition and contractual maturities of our investment portfolio at December 31, 2025, excluding FHLB stock, are indicated in the following table.

The yields on municipal bonds have not been computed on a tax equivalent basis.

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Total Securities

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

(dollars in thousands)

Securities available for sale:

Municipal bonds

ABS corporate

Corporate debt

Mortgage-backed:

MBS non-agency

Total securities available for sale

December 31, 2023

1 year or less

Over 1 year to 5 years

Over 5 to 10 years

Over 10 years

Total Securities

Amortized Cost

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Weighted Average Yield

(Dollars in thousands)

Securities available for sale:

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The Company does not intend to sell the securities in an unrealized loss position and believes it is not likely it will 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 either December 31, 2024 or December 31, 2023.

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

Subsequent to year end, the Company became aware that its $2.0 million investment in subordinated debt may be approaching payment default.

The issuer has requested a loan modification in advance of the interest payment due on March 15, 2026.

If a modification agreement is not reached, there is a strong likelihood that the issuer will not be able to meet the scheduled interest payment due no later than March 25, 2026, including the 10-day grace period, which would place the subordinated debt in default.

Management is actively monitoring the situation.

Management is also assessing the likelihood and timing of recovery, including possible legal actions.

No adjustments have been made to the December 31, 2025, investment securities data provided above as this event occurred after the balance sheet date.

Deposit Activities and Other Sources of Funds

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We also maintain a relationship with IntraFi that allows the Bank to participate in their certificate of deposit account registry service ("CDARS"), which pools large deposits placed with CDARS by financial institution customers and distributes the balances across the network of participants.

The Bank also participates in IntraFi's Insured Cash Sweep ("ICS") program which pools and distributes transaction and savings account balances.

Deposit Activity.

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Ending balance

Net increase (decrease)

Percent increase (decrease)

Net (decrease) increase

Percent (decrease) increase

Types of Deposits.

The following table sets forth the dollar amount of deposits in the various types of deposits programs we offered at the dates indicated.

Percent of Total

December 31, 2025

December 31, 2024

(dollars in thousands)

Percent of Total

(Dollars in thousands)

Transactions and Savings Deposits:

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(1) Brokered certificates of deposit included in certificates

Deposit Flow .

The following table sets forth the balances of deposits in the various types of deposit programs offered by First Fed at the dates indicated.

Percent of Total

Increase/ (Decrease)

Percent of Total

Increase/ (Decrease)

Percent of Total

Increase/ (Decrease)

(Dollars in thousands)

Savings accounts

Transaction accounts

Money market accounts

Fixed-rate certificates which mature in the year ending:

Within 1 year

After 1 year but within 3 years

After 3 years but within 5 years

Deposit Maturities.

The following table sets forth the rate and maturity information of our time deposit certificates at December 31, 2025.

Percent of Total

(dollars in thousands)

Percent of Total

Certificate accounts maturing in quarter ending:

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December 31, 2028

Total certificates

Percent of total

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Depositors may qualify for coverage over the limit if they have funds in multiple ownership categories and all FDIC requirements are met.

The Company estimated that $390.5 million and $363.7 million, or 23.1% and 21.7%, of total deposit balances were uninsured at December 31, 2024 and 2023, respectively.

The following table indicates the amount of our certificates of deposit by time remaining until maturity as of December 31, 2024.

The uninsured amounts are estimates based on the methodologies and assumptions used for the Bank’s regulatory reporting requirements.

The Company has an estimated $371.3 million and $390.5 million, or 23.2% and 23.1%, of total deposit balances were uninsured at December 31, 2025 and 2024, respectively.

The following table sets forth the portion of our certificate accounts that were in excess of the FDIC insurance limit by time remaining until maturity as of December 31, 2025.

(dollars in thousands)

3 months or less

Over 3 to 6 Months

Over 6 to 12 Months

Over 3 through 6 months

Over 6 through 12 months

Over 12 months

(In thousands)

Certificates of deposit less than $250,000

Certificates of deposit of $250,000 or more

Total certificates

The Federal Reserve may require First Fed to maintain reserves on transaction accounts or non-personal time deposits.

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We use advances from the FHLB, including short-term overnight, short-term advances with initial maturities of less than one year, and longer-term advances maturing in one year or more, to meet ongoing liquidity needs and to mitigate interest rate risk.

As a member of the FHLB, we are required to own capital stock in the FHLB and are authorized to apply for advances on the security of that stock and certain pledged assets including mortgage loans and investment securities.

As a member of the FHLB, we are authorized to apply for advances based on the value of certain pledged real estate loans.

Advances are made under various terms pursuant to several different credit programs, each with its own interest rate and range of maturities.

Depending on the program, limitations on the amount of advances are based on the financial condition of the member institution and the adequacy of collateral pledged to secure the credit.

We maintain a committed credit facility with the FHLB, and at December 31, 2024, had pledged loan and security collateral to support a borrowing capacity of $558.0 million.

We maintain a committed credit facility with the FHLB, and at December 31, 2025, had pledged loan collateral to support a borrowing capacity of $525.1 million.

In addition, the Bank had outstanding letters of credit from the FHLB to secure public deposits and the Bellevue, Washington branch lease liability.

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At December 31, 2025, we had pledged securities with a carrying value of $18.0 million as collateral to support a borrowing capacity of $17.3 million.

No funds have been borrowed on this arrangement to date.

A borrowing test was performed in June 2025.

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 will reset quarterly to the three-month SOFR plus 300-basis points.

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

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 began a borrowing arrangement with NexBank for a revolving line of credit.

The agreement was modified in 2025 and the new terms allow a maximum extension of credit of $15.0 million.

Borrowings under the arrangement with NexBank 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 line of credit matures on November 16, 2026.

At December 31, 2025, the outstanding advance totaled $13.5 million, leaving a remaining borrowing capacity of $1.5 million.

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 December 31, 2025.

A borrowing test was performed in June 2025.

This credit facility is authorized for use through December 2027.

The following tables set forth information regarding our borrowings at the end of and during the periods indicated.

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FHLB long-term advances

FHLB short-term advances

FHLB overnight borrowings

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FHLB long-term advances

FHLB short-term advances

FHLB overnight borrowings

3 unchanged sentences

FHLB long-term advances

FHLB short-term advances

FHLB overnight borrowings

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FHLB long-term advances

FHLB short-term advances

FHLB overnight borrowings

4 unchanged sentences

FHLB long-term advances

FHLB short-term advances

FHLB overnight borrowings

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Subsidiary and Other Activities

In December 2019, the Company invested in Canapi Ventures Fund, LP ("Canapi Ventures") as a limited partner to strategically invest in fintech-related businesses.

In December 2019, the Company invested in Canapi Ventures as a limited partner to strategically invest in fintech-related businesses.

The Company is dedicated to the discovery of, and investment in, those fintech-related companies that we expect may also contribute to the evolution of digital solutions applicable to the banking industry.

This commitment to Canapi Ventures will be for up to ten years, with cash installments totaling up to $3.0 million to be paid into the partnership over a period not to exceed the first five years, beginning in 2020.

This commitment to Canapi Ventures will be for up to ten years, with cash commitments totaling up to $3.0 million to be paid into the partnership through March 2026.

As of December 31, 2025, $2.5 million had been contributed to this partnership.

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This entity meets the criteria for reporting under the equity method of accounting.

In April 2021, First Northwest extended $8.0 million to Quin Ventures, Inc.

("Quin Ventures") under a capital financing agreement and related promissory note.

In December 2022, Quin Ventures sold substantially all of its assets to Quil Ventures, Inc.

As part of the sale transaction, the Company received a 5% ownership stake in Quil valued at $225,000 and recorded a $1.5 million commitment receivable.

In June 2023, First Northwest determined that Quin Ventures was no longer a going concern.

The Company wrote off the remaining investment in Quin Ventures through retained earnings in accordance with applicable non-controlling interest accounting methods.

The balance of the noncontrolling interest in Quin Ventures balance was moved to retained earnings, with no change to total shareholders' equity as a result of the transaction.

In December 2023, the Company determined that QUIL was no longer a going concern and wrote off the related investment and commitment receivable.

The tax credit generated by the $2.2 million initial investment was utilized on the Company's 2021 federal income tax return.

The Bank plans to exercise the put option when it becomes available in 2026.

In September 2021, the Company invested in BankTech Ventures, LP ("BankTech") as a limited partner to strategically invest in fintech-related businesses.

The commitment to BankTech will be for up to ten years, with cash installments totaling up to $1.0 million to be paid into the partnership over a period not to exceed the first five years, beginning in 2021.

The commitment to BankTech will be for up to ten years, with cash installments totaling up to $1.0 million to be paid into the partnership through October 2026.

As of December 31, 2025 , $740,000 had been contributed to this partnership.

The recorded investment was $708,000 at December 31, 2025.

In December 2021, the Company invested in JAM FINTOP Blockchain, LP as a limited partner to strategically invest in fintech-related businesses.

This commitment will be for up to ten years, with cash installments totaling up to $1.0 million to be paid into the partnership over a period not to exceed the first five years, beginning in 2022.

In December 2021, the Company invested in JAM FINTOP Frontier Fund, LP as a limited partner to strategically invest in fintech-related businesses.

This commitment will be for up to ten years, with cash installments totaling up to $1.0 million to be paid into the partnership through April 2027.

As of December 31, 2025 , $555,000 had been contributed to this partnership.

The recorded investment was $515,000 at December 31, 2025.

In February 2022, the Bank invested in a Small Business Investment Company through Canapi Ventures.

This commitment will be for up to ten years with two possible one-year extensions, with cash installments totaling up to

$2.0 million to be paid into the company over the commitment period, beginning in 2022.

December 31, 2024

, $410,000 has been contributed to this fund.

The recorded investment was

December 31, 2024.

In February 2022, the Bank invested in a Small Business Investment Company through Canapi Ventures (SBIC Fund II).

This commitment will be for up to ten years with two possible one-year extensions, with cash installments totaling up to $2.0 million to be paid into the company over the commitment period, beginning in 2022.

As of December 31, 2025 , $925,000 has been contributed to this fund.

The recorded investment was $777,000 at December 31, 2025.

In April 2022, First Northwest invested $3.0 million in Meriwether Group Capital Hero Fund LP, a private commercial lender focused on lower-middle market businesses, primarily in the Pacific Northwest.

2 unchanged sentences

The recorded investment was $6.0 million at December 31, 2025.

Subsequent to year end, the Bank signed a redemption agreement which sets forth the path to unwind its investment in the Hero Fund through capital distributions beginning in April 2026.

Also in April 2022, First Northwest made an initial investment for a 5% interest in Meriwether Group Capital, LLC, which provides financial advice for borrowers and capital for the Hero Fund.

1 unchanged sentence

The recorded investment in MWGC was $150,000 at December 31, 2025.

In June 2022, First Northwest made an initial investment for a 5% interest in The Meriwether Group, LLC, a boutique investment bank focusing on providing entrepreneurs with resources to help them succeed, including equity and debt raising services along with strategic positioning of business throughout the United States.

Subsequent to year end, the Company redeemed its interest in MWGC at par.

In September 2022, the Company completed an additional purchase and holds a 33% interest in MWG valued at $2.8 million at December 31, 2025.

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Human Capital Resources

At December 31, 2024, we had 227 full-time equivalent employees.

A t that date, the average tenure of all our full-time employees was approximately 5.6 years while the average tenure of our executive officers was approximately 5.5 years .

None of our employees are represented by collective bargaining agreements.

We believe our employee relations to be excellent.

Our Board guides the implementation of our corporate mission, vision, and values as an important element of risk oversight because our people are integral to the success of our corporate strategy.

Our Board holds senior management accountable for embodying, maintaining, and communicating our culture to employees.

At December 31, 2025, we had 242 full-time equivalent team members.

A t that date, the average tenure of all our full-time team members was approximately 5.6 years while the average tenure of our executive officers was approximately 2.9 years .

Our team members are not represented by any collective bargaining group.

Our Board guides the implementation of our corporate mission, vision, and values as an important element of risk oversight.

Our Board holds senior management accountable for embodying, maintaining, and communicating our culture to team members.

In that regard, our corporate mission, vision, and values are designed to promote commitment to making the lives of all those around us better and to uphold that principle in everything we do.

That commitment has been a pillar in our approach to our employees and the communities we have proudly served for over 100 years.

That commitment has been a pillar in our approach to our team members and the communities we have proudly served for over 100 years.

Our culture is designed to adhere to the timeless values of optimism, respect, initiative, growth, and ownership.

In keeping with that culture, we strive to be a force for good in everyday life and expect our employees to treat each other and our customers with the highest level of care and respect, going out of their way to do the right thing.

In keeping with that culture, we strive to be a force for good in everyday life and expect our team members to treat each other and our customers with the highest level of care and respect, going out of their way to do the right thing.

We dedicate resources to promote a safe and inclusive workplace;

attract, develop, and retain a diverse group of talented employees;

attract, develop, and retain a diverse group of talented team members;

promote a culture of integrity, caring, and excellence;

and reward and recognize employees for both the results they deliver and, just as importantly, how they deliver them.

and reward and recognize team members for both the results they deliver and, just as importantly, how they deliver them.

We also seek to design fulfilling careers, with competitive compensation and benefits combined with a positive work-life balance.

We dedicate resources to fostering professional and personal growth with continuing education, on-the-job training, and development programs.

Our employees are the cornerstone of our success as an organization as they serve our customer base.

Our team members are the cornerstone of our success as an organization.

We are committed to attracting, retaining, and promoting highly qualified individuals from a wide array of backgrounds.

We believe employing a talented and inclusive workforce enhances our ability to serve our customers and our communities.

In late 2024, the Bank embarked on an endeavor to further evolve our culture to meet the needs of our changing workforce.

In 2025, we formed the First Fed Next Committee to act as a governing body for our cultural initiatives and to promote team member engagement.

We seek to better understand the financial needs of our prospective and current customers by promoting and fostering a workforce that reflects the communities we serve, along with providing relevant financial service products.

As we move forward, we will continue to grow our inclusion efforts in a manner consistent with our company vision:

to create well-being and prosperity for our employees, customers, and communities.

As we move forward, we will continue to grow in a manner consistent with our company vision:

to create well-being and prosperity for our team members, customers and communities.

Information About Our Executive Officers

The following is a description of the principal occupation and employment of the executive officers of the Company and the Bank as of December 31, 2025.

Deines , age 51, became President and Chief Executive Officer ("CEO") and Director of First Fed on August 1, 2019, and was elected President, CEO, and director of the Company on December 5, 2019.

With over 20 years of banking, he has experience in a variety of areas, including strategic planning and acquisitions, investor relations, financial reporting, and fintech, as well as operations, information technology, payments, internal controls and board governance.

Deines served as Executive Vice President and Chief Financial Officer ("CFO") of Liberty Bay Bank from November 2018 until May 2019.

Prior to that, he began work at Sound Community Bank as its CFO in February 2002 and was promoted to Executive Vice President in January 2005.

Deines also became Executive Vice President, CFO, and Corporate Secretary of Sound Financial Bancorp, Inc.

He held these roles at Sound Community Bank and SFBC until March 2018.

In 2000, he received his Washington Certified Public Accountant certificate, currently inactive, while working for O'Rourke, Sacher & Moulton, LLP.

Deines serves as a Director for the Washington Bankers Association ("WBA") and has been a conference speaker and instructor for the WBA.

He is actively involved with several non-profit organizations, including the Field Hall Arts and Events Center.

Geri Bullard , age 59, is Executive Vice President, Chief Financial Officer ("CFO") and Chief Operating Officer ("COO") of the Company and First Fed.

She has held the CFO position since March 2020 and the COO position since October 2023.

Bullard joined First Fed as Senior Vice President and Treasurer in January 2020.

Prior to joining First Fed, Ms.

Bullard served as Controller at Salal Credit Union, located in Seattle, from August 2018 to January 2020;

CFO of First Sound Bank, also in Seattle, from February 2017 to August 2018;

and Controller at Sound Community Bank from October 2015 to February 2017.

Bullard also served as a bank examiner for the State of Idaho.

Bullard holds a Bachelor of Science degree from Humboldt State University, is a graduate of the Pacific Coast Banking School at the University of Washington, and is a licensed CPA.

As previously disclosed in a Current Report on Form 8‑K filed on January 8, 2026, Geri Bullard resigned from her position as Chief Operating Officer, effective February 4, 2026.

Accordingly, she is not included in the executive officer information presented below.

Curt Queyrouze , age 64, is President and Chief Executive Officer ("CEO") of the Company and First Fed, a position he has held since September 2025.

Queyrouze is a seasoned community bank leader with more than 40 years of financial services experience, including expertise in strategic planning, credit, risk management, and financial technology.

Before joining First Northwest, Mr.

Queyrouze served as President, Community Bank and Corporate Credit at Coastal Community Bank in Everett, Washington.

from May 2022 to September 2025 Previously, he was President and Chief Executive Officer at TAB Bank in Ogden, Utah from January 2014 to May 2022.

His career includes leadership roles at a variety of institutions including PNC, Hancock Whitney, National Bank of Canada, and community banks.

He also served as Chief Operating Officer of a fintech company.

Queyrouze currently serves on the board of the Cocoon House, supporting youth homelessness intervention, and the University of Washington's Global Banking Program at the Foster School of Business.

He has also served on the board of directors of the Utah Bankers Association, The Youth Impact Center and the Utah AIDS Foundation and is active in many banking and fintech industry organizations.

Queyrouze holds a degree in Accounting from Louisiana State University.

Edelstein , age 56, is Executive Vice President and Chief Innovation Officer ("CIO"), a position he has held since March 2024.

Prior to becoming CIO, Mr.

Prior to becoming CIO, from November 2018 to March 2024, Mr.

Edelstein was the CEO of Level Technology, a financial technology company which provided financial services designed to empower very small businesses to thrive.

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Henderson , age 41, is Executive Vice President and Chief Credit Officer ("CCO") of First Fed, a position he has held since July 2024.

Prior to becoming CCO, he served as Deputy Chief Credit Officer beginning in August 2023.

He joined First Fed in August 2023 as the Deputy Chief Credit Officer.

Prior to joining First Fed, Mr.

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He holds a bachelor's degree from the University of Oregon and is a graduate of the American Bankers Association’s Stonier School of Banking at the University of Pennsylvania.

Christopher W.

Neros , age 55, is Executive Vice President and Chief Banking Officer ("CBO") of First Fed, a position he has held since June 2023.

Prior to becoming CBO, he served as Chief Lending Officer beginning in April 2022.

Neros has over 29 years of banking experience with experience in lending, commercial banking, and retail banking.

Prior to joining First Fed, he served as a lender, commercial banking leader and Executive at Peoples Bank from May 2006 to April 2022;

and as a lender and branch manager at First National Bank Alaska from August 1995 to March 2006.

He holds a Bachelor of Business Administration in Marketing from the University of Alaska Anchorage, a Master of Business Administration from Regis University, and is a graduate of the Pacific Coast Banking School at the University of Washington.

Christopher J.

Riffle , age 49, is Executive Vice President and Chief Strategy Officer ("CSO") of First Fed, an Officer of First Northwest, and General Counsel for the Company.

Riffle has held the CSO position since March 2024 and has served as General Counsel since September 2017.

He also served as Chief Digital Officer from January 2022 through March 2024 and COO from October 2018 through October 2023.

Prior to joining First Fed, Mr.

Riffle was a partner at the Platt Irwin Law Firm in Port Angeles, Washington, where he managed a civil legal practice representing clients in a variety of contexts.

Riffle was at Platt Irwin Law Firm from 2008 to 2017 and served as outside general counsel for First Fed starting in 2009.

How We Are Regulated

First Northwest Bancorp and First Fed are subject to federal, state, and local laws that may change from time to time.

This section provides a general overview of the federal and state regulatory framework applicable to First Northwest Bancorp and First Fed.

Henderson currently serves on the board of directors for Peninsula Behavioral Health and the Clallam County Economic Development Council, and is active with the Washington Bankers Association.

He has previously served various roles with governmental, private and non-profit agencies that focus on economic development, workforce development, education, conservation and at-risk youth services.

Mahaney , age 44, is Executive Vice President and Chief Legal Officer ("CLO") of First Fed and First Northwest, a position she has held since October 2025.

She has also served as the Company’s Corporate Secretary since June 2020.

Prior to becoming CLO, Ms.

Mahaney served as General Counsel from January 2022 to October 2025 and as Assistant General Counsel from January 2020 to June 2022.

Before joining First Fed, Ms.

Mahaney operated a private law practice where she provided legal counsel to municipalities, nonprofits, businesses, and individuals across a range of matters.

She holds a Juris Doctor degree from the Northwestern School of Law of Lewis & Clark College and a Master of Business Administration from the University of Washington.

Nomura , age 56, is Executive Vice President and Chief Financial Officer ("CFO") of the Company and First Fed, a position she has held since March 2025.

She joined First Fed in November 2024 as the Senior Director of Accounting and Finance.

Prior to joining First Fed, she served as CFO of the YWCA Seattle King Snohomish, located in Seattle, from May 2023 to November 2024, and CFO of Kosmos Management, in Seattle, from August 2016 to November 2022.

Nomura held other CFO positions prior to Kosmos Management at four financial institutions from May 2005 to January 2016.

She began her career in public accounting and served as an Auditor and Senior Audit Manager at Deloitte from January 1994 to September 2001.

Nomura currently is a board member and Treasurer of Learning Communities Foundation, which helps ensure educational success for children in the Puget Sound Region.

Nomura holds a Bachelor of Business Administration degree from Grand Valley State University and is a licensed CPA.

Available Information

The Company provides an Investor Relations link on its website (www.ourfirstfed.com) to the Securities and Exchange Commission’s ("SEC") website ( www.sec.gov ) for purposes of providing copies of its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and proxy statements and amendments thereto.

Other than an investor’s own internet access charges, these filings are available free of charge.

The information contained on the Company's website as referenced in this Form 10-K should not be considered as part of this report.

Regulation and Supervision

First Northwest and First Fed are subject to federal, state, and local laws that may change from time to time.

This section provides a general overview of the federal and state regulatory framework applicable to First Northwest and First Fed.

The descriptions of laws and regulations included herein do not purport to be complete and are qualified in their entirety by reference to the actual laws and regulations.

These statutes and regulations, as well as related policies, continue to be subject to change by Congress, state legislatures, and federal and state regulators.

Changes in statutes, regulations, or regulatory policies applicable to First Northwest Bancorp and First Fed (including their interpretation or implementation) cannot be predicted and could have a material effect on First Northwest Bancorp’s and First Fed’s business and operations.

Numerous changes to the statutes, regulations, and regulatory policies applicable to First Northwest Bancorp and First Fed have been made or proposed in recent years.

Changes in statutes, regulations, or regulatory policies applicable to First Northwest and First Fed (including their interpretation or implementation) cannot be predicted and could have a material effect on First Northwest’s and First Fed’s business and operations.

Numerous changes to the statutes, regulations, and regulatory policies applicable to First Northwest and First Fed have been made or proposed in recent years.

Any such legislation or regulatory changes in the future by the FDIC, DFI, Federal Reserve or the CFPB could adversely affect our operations and financial condition.

Regulation of First Fed Bank

Regulation of First Fed

First Fed, as a state-chartered commercial bank, is subject to applicable provisions of Washington law and to regulations and examinations of the DFI.

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During these state or federal regulatory examinations, the examiners may, among other things, require First Fed to provide for higher general or specific loan loss reserves, which can impact our capital and earnings.

This regulation of First Fed is intended for the protection of depositors and the deposit insurance fund ("DIF") of the FDIC and not for the purpose of protecting the shareholder(s) of First Fed or First Northwest Bancorp.

First Fed is required to maintain minimum levels of regulatory capital and is subject to some limitations on the payment of dividends to First Northwest Bancorp.

First Fed is required to maintain minimum levels of regulatory capital and is subject to some limitations on the payment of dividends to First Northwest.

See "– Capital Requirements" and "– Dividends."

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Insurance of Accounts and Regulation by the FDIC .

The DIF of the FDIC insures deposit accounts in First Fed up to $250,000 per separately insured depositor.

As insurer, the FDIC imposes deposit insurance premiums and is authorized to conduct examinations of, and to require reporting by, FDIC-insured institutions.

The DIF of the FDIC insures deposit accounts in First Fed up to $250,000 per separately insured depositor for each account ownership category for which the depositor qualifies.

As insurer, the FDIC imposes deposit insurance premiums.

The FDIC is also authorized to conduct examinations of, and to require reporting by, FDIC-insured institutions for which it is the primary federal regulator, and in certain other circumstances.

Our deposit insurance premiums for the year ended December 31, 2025, were $1.7 million.

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Assessment rates currently range from 2.5 to 32 basis points for small institutions.

The FDIC has authority to increase assessment rates and in October 2022 adopted a Final Rule, applicable to all insured depository institutions, increasing assessment rate schedules uniformly by two basis points beginning with the first quarterly assessment period of 2023.

The FDIC has authority to increase assessment rates and most recently exercised that authority for the first quarterly assessment period of 2023.

Increases to insurance assessments have an adverse effect on the operating expenses and results of operations of First Fed.

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Federal regulations require insured depository institutions and bank holding companies (including financial holding companies) to meet several minimum capital standards.

The minimum capital level requirements applicable to First Northwest Bancorp and First Fed are:

The minimum capital level requirements applicable to First Northwest and First Fed are:

(i) a common equity Tier 1 ("CET1") capital to risk-based assets ratio of 4.5%;

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In addition to the minimum capital ratios, the capital regulations require a banking organization to maintain a capital conservation buffer, designed to absorb losses during periods of economic stress, consisting of additional CET1 capital of more than 2.5% of risk-weighted assets above the required minimum risk-based capital ratios in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses.

As of December 31, 2024, First Northwest Bancorp and First Fed each met the minimum capital ratio requirements and exceeded the capital conservation buffer requirement.

For additional information regarding First Northwest Bancorp’s and First Fed’s required and actual capital levels at December 31, 2024, see Note 12 of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

As of December 31, 2025, First Northwest and First Fed each met the minimum capital ratio requirements and exceeded the capital conservation buffer requirement.

For additional information regarding First Northwest’s and First Fed’s required and actual capital levels at December 31, 2025, see Note 12 of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

Federal Home Loan Bank System.

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Federal law generally limits the activities and equity investments of FDIC insured, state-chartered banks to those that are permissible for national banks.

Dividends from First Fed, which are subject to regulation and limitation, constitute a major source of funds for dividends paid by First Northwest Bancorp to shareholders.

Dividends from First Fed, which are subject to regulation and limitation, constitute a major source of funds for dividends paid by First Northwest to shareholders.

As a general rule, regulatory authorities may prohibit banks and financial holding companies from paying dividends in a manner that would constitute an unsafe or unsound banking practice.

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First Fed received a "satisfactory" rating during its most recent CRA examination.

In October 2023, federal bank regulators released a final rule to revise their CRA regulations, which could impact the Bank’s rating if and when it becomes effective.

However, industry groups have challenged the final rule, and in March 2024, the District Court for the Northern District of Texas issued a preliminary injunction against enforcement of the final rule.

On October 24, 2023, the federal banking agencies issued a final rule revising their framework for evaluating banks’ records of community reinvestment under the CRA.

On July 16, 2025, these bank regulatory agencies issued a proposal to rescind the October 2023 final rule and reinstate the CRA framework that existed prior to the October 2023 final rule, which has remained in effect.

The Bank’s most recent performance evaluation was conducted using the CRA framework that existed prior to the October 2023 final rule.

Commercial Real Estate Ratios.

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Federal Reserve System.

The Federal Reserve Board has historically required that all depository institutions maintain reserves on transaction accounts or non-personal time deposits.

The Federal Reserve Board has historically required that all depository institutions maintain reserves on transaction accounts, primarily checking accounts.

These reserves may be in the form of cash or noninterest-bearing deposits with the regional Federal Reserve Bank.

Negotiable order of withdrawal (NOW) accounts and other types of accounts that permit payments or transfers to third parties fall within the definition of transaction accounts and are subject to the reserve requirements, as are any non-personal time deposits at a commercial bank.

In response to the COVID-19 pandemic, the Federal Reserve reduced the reserve requirement ratios to zero percent effective on March 26, 2020, to support lending to households and businesses.

The Federal Reserve reduced the reserve requirement ratios to zero percent effective on March 26, 2020, effectively eliminating the requirements.

The Federal Reserve took that action due to a change in its approach to monetary policy;

it has indicated that it has no plans to reimpose reserve requirements but could in the future if conditions warrant.

Anti-Money Laundering and Anti-Terrorism.

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The Patriot Act also includes provisions providing the government with power to investigate terrorism, including expanded government access to bank account records.

Regulators are directed to consider a bank holding company’s and a bank’s effectiveness in combating money laundering when reviewing and ruling on applications under the BHCA and the Bank Merger Act.

First Northwest Bancorp and First Fed have established comprehensive compliance programs designed to comply with the requirements of the BSA and Patriot Act.

Regulators are directed to consider a bank holding company’s and a bank’s effectiveness in combating money laundering when reviewing and ruling on applications under the Bank Holding Company Act of 1956, as amended ("BHCA") and the Bank Merger Act.

First Northwest and First Fed have established comprehensive compliance programs designed to comply with the requirements of the BSA and Patriot Act.

Consumer Protection Laws and Regulations.

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The CFPB assumed responsibility for the implementation of the federal financial consumer protection and fair lending laws and regulations and has authority to impose new requirements.

First Fed is subject to consumer protection regulations issued by the CFPB, but as a smaller financial institution, it is generally subject to supervision and enforcement by the FDIC and the DFI with respect to our compliance with consumer financial protection laws and CFPB regulations.

First Fed is subject to consumer protection regulations issued by the CFPB, but as a smaller financial institution, it is generally subject to supervision and enforcement by the FDIC with respect to our compliance with federal consumer financial protection laws and CFPB regulations.

First Fed is also subject to supervision and enforcement by the DFI with respect to applicable state consumer protection laws and regulations.

The CFPB has issued and continues to issue numerous regulations under which we may incur additional expense in connection with our ongoing compliance obligations.

Significant recent CFPB developments that may affect operations and compliance costs include:

Positions taken by the CFPB on fair lending, most recently expanding its supervisory approach to prevent discrimination by using the unfairness standard under the unfair, deceptive, or abuse acts or practices framework in the Dodd-Frank Act in addition to the historical reliance on regulatory requirements under the Equal Credit Opportunity Act (“ECOA”) and the Fair Housing Act (“FHA”);

The CFPB's Final Rule amending Regulation C, which implements the Home Mortgage Disclosure Act, requiring most lenders to report expanded information in order for the CFPB to more effectively monitor fair lending concerns and other information shortcomings identified by the CFPB;

Positions taken by the CFPB regarding the Electronic Fund Transfer Act and Federal Reserve Regulation E, which require companies to obtain consumer authorizations before automatically debiting a consumer’s account for pre-authorized electronic funds transfers;

Efforts focused on enforcing certain compliance obligations the CFPB has deemed a priority, such as automobile and student loan servicing, debt collection, collateral repossession, mortgage origination and servicing, remittances, and fair lending, among others;

Positions and focused efforts on enforcing compliance obligations related to deposit account fees, including overdraft, non-sufficient funds, and returned deposit fees.

There is continued uncertainty about the CFPB's priorities and how they will change under the current administration.

For example, in February 2025, the Acting Director of the CFPB instructed agency staff to pause most activity, including supervision and enforcement.

While it is presently unclear when and to what extent the CFPB will resume its activities, other governmental authorities, including state attorneys general or banking regulators, may seek to increase their regulation, supervision, and enforcement of providers of consumer financial products and services in response to changes at the CFPB.

Moreover, changes at the CFPB may lead to federal legislative efforts to alter the framework for consumer financial services regulation.

First Fed is subject to a broad array of federal and state consumer protection laws and regulations that govern almost every aspect of its business relationships with consumers.

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Failure to comply with these laws and regulations can subject First Fed to various penalties including, but not limited to, enforcement actions, injunctions, fines, civil liability, criminal penalties, punitive damages, and the loss of certain contractual rights.

First Fed has established a comprehensive compliance system to ensure consumer protection.

Regulation and Supervision of First Northwest Bancorp

First Northwest Bancorp is a bank holding company registered with the Federal Reserve and the sole shareholder of First Fed.

Bank holding companies are subject to comprehensive regulation by the Federal Reserve under the Bank Holding Company Act of 1956, as amended ("BHCA"), and the regulations promulgated thereunder.

This regulation and oversight is generally intended to ensure that First Northwest Bancorp limits its activities to those allowed by law and that it operates in a safe and sound manner without endangering the financial health of First Fed.

First Fed has established a comprehensive compliance system to promote compliance with applicable consumer protection laws and regulations.

Regulation and Supervision of First Northwest

First Northwest is a bank holding company registered with the Federal Reserve and the sole shareholder of First Fed.

Bank holding companies are subject to comprehensive regulation by the Federal Reserve under the BHCA, and the regulations promulgated thereunder.

This regulation and oversight is generally intended to ensure that First Northwest limits its activities to those allowed by law and that it operates in a safe and sound manner without endangering the financial health of First Fed.

During 2022, First Northwest elected to be treated as a financial holding company (a type of bank holding company), allowing the Company to engage in non-banking activities that are financial in nature or incidental to financial activities.

Under the BHCA, First Northwest Bancorp is supervised by the Federal Reserve.

As a bank holding company, First Northwest Bancorp is required to file semi-annual and annual reports with the Federal Reserve and any additional information required by the Federal Reserve and is subject to regular examinations by the Federal Reserve.

Under the BHCA, First Northwest is supervised by the Federal Reserve.

As a bank holding company, First Northwest is required to file semi-annual and annual reports with the Federal Reserve and any additional information required by the Federal Reserve and is subject to regular examinations by the Federal Reserve.

The Federal Reserve also has extensive enforcement authority over bank holding companies, including the ability to assess civil money penalties, to issue cease-and-desist or removal orders and to require that a bank holding company divest subsidiaries (including its bank subsidiaries).

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Source of Strength Doctrine.

Under the Dodd-Frank Act and Federal Reserve policy, a bank holding company should serve as a source of financial and managerial strength to its subsidiary banks, and the Federal Reserve may expect a bank holding company to use available resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity (including at times when a bank holding company may not be in a financial position to provide such resources or when it may not be in the bank holding company’s or its shareholders' best interests to do so) and to maintain the financial flexibility and capital raising capacity to obtain additional resources for assisting its subsidiary banks.

Under the Dodd-Frank Act and Federal Reserve policy, a bank holding company must serve as a source of financial and managerial strength to its subsidiary banks, and the Federal Reserve may expect a bank holding company to use available resources to provide adequate capital funds to its subsidiary banks during periods of financial stress or adversity (including at times when a bank holding company may not be in a financial position to provide such resources or when it may not be in the bank holding company’s or its shareholders' best interests to do so) and to maintain the financial flexibility and capital raising capacity to obtain additional resources for assisting its subsidiary banks.

Acquisitions.

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When applicable, the bank holding company capital adequacy and conservation buffer rules are the same as those imposed by the FDIC.

For additional information, see the section above entitled "- Regulation of First Fed Bank - Capital Regulation" and Note 12 of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

For additional information, see the section above entitled "- Regulation of First Fed - Capital Requirements" and Note 12 of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

Interstate Banking .

The Dodd-Frank Act eliminated certain interstate branching restrictions that were implemented as part of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ("Interstate Act").

The Federal Reserve may approve an application of a bank holding company to acquire control of, or acquire all or substantially all of the assets of, a bank located in a state other than the bank holding company's home state, without regard to whether the transaction is prohibited by the laws of any state.

The BHCA, as amended by the interstate banking provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 ("Interstate Act"), permits a bank holding company to acquire control of, or acquire all or substantially all of the assets of, a bank located in a state other than the bank holding company's home state, without regard to whether the transaction is prohibited by the laws of any state, subject to certain restrictions.

The Interstate Act also generally permits national- and state-chartered banks to branch interstate through acquisitions of banks in other states, subject to certain restrictions.

Interchange Fees.

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Notably, the Federal Reserve's rules set a maximum permissible interchange fee, among other requirements.

As of December 31, 2024, First Northwest Bancorp and First Fed qualified for the small issuer exemption from the Federal Reserve’s interchange fee cap, which applies to any debit card issuer that has total consolidated assets of less than $10 billion as of the end of the previous calendar year.

As of December 31, 2025, First Northwest and First Fed qualified for the small issuer exemption from the Federal Reserve’s interchange fee cap, which applies to any debit card issuer that has total consolidated assets of less than $10 billion as of the end of the previous calendar year.

In October 2023, the Federal Reserve requested comments on a proposed rule that would lower the interchange fee cap that applies to debit card issuers with $10 billion or more in assets and establish a regular process for updating the cap every other year going forward.

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Restrictions on Dividends .

First Northwest Bancorp's ability to declare and pay dividends is subject to the Federal Reserve limits and Washington law, and may also depend on its ability to receive dividends from First Fed, as discussed above.

First Northwest's ability to declare and pay dividends is subject to the Federal Reserve limits and Washington law, and may also depend on its ability to receive dividends from First Fed, as discussed above.

The Federal Reserve has issued a policy statement on the payment of cash dividends by bank holding companies.

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The Federal Reserve may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe or unsound practice or would violate any law, regulation or regulatory order, condition, or written agreement.

Under Washington corporate law, First Northwest Bancorp generally may not pay dividends if after that payment it would not be able to pay its liabilities as they become due in the usual course of business, or its total assets would be less than the sum of its total liabilities .

These various laws and regulatory policies may affect First Northwest Bancorp’s ability to pay dividends or otherwise engage in capital distributions.

Under Washington corporate law, First Northwest generally may not pay dividends if after that payment it would not be able to pay its liabilities as they become due in the usual course of business, or its total assets would be less than the sum of its total liabilities .

These various laws and regulatory policies may affect First Northwest’s ability to pay dividends or otherwise engage in capital distributions.

Recent and Proposed Legislation.

The economic and political environment of the past several years has led to a number of proposed legislative, governmental, and regulatory initiatives that may significantly impact the banking industry.

Other regulatory initiatives by federal and state agencies may also significantly impact First Northwest Bancorp's and First Fed’s business.

First Northwest Bancorp and First Fed cannot predict whether these or any other proposals will be enacted or the ultimate impact of any such initiatives on its operations, competitive situation, financial conditions, or results of operations.

Recent executive orders have the potential to alter the supervisory, regulatory, and enforcement frameworks and priorities of federal financial regulatory agencies such as the OCC, Federal Reserve, and FDIC, as well as decrease the stability of regulatory policy over time.

For example, a February 2025 executive order directs independent agencies, including the federal financial regulatory agencies (but excluding the monetary policy function of the Federal Reserve), to submit significant regulatory actions to the White House Office of Management and Budget (“OMB”) for its review.

Additionally, OMB is directed to provide "performance standards and management objectives" to the heads of independent agencies, and review and adjust their budgets.

These changes to the operation of independent agencies, if carried through, may cause financial regulatory policy to change more significantly across different presidential administrations than it has historically.

Additionally, as a result of these changes, it may take longer for the federal financial regulatory agencies to establish their supervisory and enforcement priorities and develop and adopt new rules and regulations.

Other regulatory initiatives by federal and state agencies may also significantly impact First Northwest's and First Fed’s business.

First Northwest and First Fed cannot predict whether these or any other proposals will be enacted or the ultimate impact of any such initiatives on its operations, competitive situation, financial conditions, or results of operations.

Effects of Federal Government Monetary Policy.

First Northwest Bancorp’s earnings and growth are affected not only by general economic conditions, but also by the fiscal and monetary policies of the federal government, particularly the Federal Reserve.

First Northwest’s earnings and growth are affected not only by general economic conditions, but also by the fiscal and monetary policies of the federal government, particularly the Federal Reserve.

The Federal Reserve implements national monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates.

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The Federal Reserve has reaffirmed that its strategy for monetary policy is focused on long-term goals and addressing continued concerns with inflation.

After increasing the federal funds rate by 425 basis points in 2022, the Federal Reserve continued the trend, albeit at a slower pace, for a total increase in 2023 of 100 basis points.

In September 2024, the Federal Reserve reversed the upward trend and began lowering the federal funds rate for a total decrease in 2024 of 100 basis points.

The Federal Reserve increased the federal funds rate by 100 basis points in 2023.

In September 2024, the Federal Reserve reversed the upward trend and began lowering the federal funds rate for a total decrease in 2024 of 100 basis points with an additional total decrease in 2025 of 75 basis points.

Changes in monetary policy, including changes in the federal funds rate, can affect net interest income and margin, overall profitability, and shareholders' equity.

The nature and impact of future changes in monetary policies and their impact on First Northwest Bancorp and First Fed cannot be predicted with certainty.

The nature and impact of future changes in monetary policies and their impact on First Northwest and First Fed cannot be predicted with certainty.

Cybersecurity .

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Federal Taxation

First Northwest Bancorp and First Fed are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below.

The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to First Northwest Bancorp or First Fed.

First Northwest and First Fed are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below.

First Fed is no longer subject to U.S.

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See Note 10 of the Notes to Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

First Northwest Bancorp will file a consolidated federal income tax return with First Fed.

Accordingly, any cash distributions made by First Northwest Bancorp to its shareholders would be considered taxable dividends and not as a non-taxable return of capital to shareholders for federal and state tax purposes.

Method of Accounting .

For federal income tax purposes, First Fed currently reports its income and expenses on the accrual method of accounting.

For federal income tax purposes, we currently report income and expenses on the accrual method of accounting.

Federal income tax returns are filed using a December 31 year end.

Corporate Dividends-Received Deduction .

First Northwest Bancorp may eliminate from its income dividends received from First Fed as a wholly owned subsidiary of First Northwest Bancorp if it elects to file a consolidated return with First Fed.

The corporate dividends-received deduction is 100%, or 65%, in the case of dividends received from corporations with which a corporate recipient does not file a consolidated tax return, depending on the level of stock ownership of the payor of the dividend.

Corporations that own less than 20% of the stock of a corporation distributing a dividend may deduct 50% of dividends received or accrued on their behalf.

Intercompany Dividends-Received Deduction .

First Northwest will file a consolidated federal income tax return with First Fed.

Accordingly, any dividends First Northwest receives from First Fed will not be included as income to First Northwest.

Washington Taxation

The Company and First Fed are subject to a business and occupation tax imposed under Washington law at the rate of 1.75% of gross receipts.

First Northwest and First Fed are subject to a business and occupation tax imposed under Washington law at the rate of 2.10% of gross receipts, as well as personal property and sales tax.

Interest received on loans secured by mortgages or deeds of trust on residential properties and certain investment securities are exempt from this tax.

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-K

Item 1. Business