What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-07 compared with 2025-11-06 · 245 added, 439 removed, 1179 unchanged (37% of the section changed)

3 unchanged sentences

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

September 30, 2025

March 31, 2026

December 31, 2025

3 unchanged sentences

87,588 69,587

Investment securities available for sale, at fair value (amortized cost of $ 310,545 and $ 376,265 at September 30, 2025 and December 31, 2024, respectively)

Investment securities available for sale, at fair value (amortized cost of $ 299,707 and $ 295,849 , respectively)

272,985 270,310

Loans held for sale

Loans receivable (net of allowance for credit losses on loans of $ 16,203 and $ 20,449 at September 30, 2025 and December 31, 2024, respectively)

Loans receivable (net of allowance for credit losses on loans of $ 16,823 and $ 16,987 , respectively)

1,612,979 1,612,028

33 unchanged sentences

75,000,000 shares authorized;

9,462,150 and 9,353,348 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

9,499,300 and 9,467,925 shares issued and outstanding, respectively

Additional paid-in capital

15 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

INTEREST INCOME

1 unchanged sentence

Interest on investment securities

Interest on deposits and other

Interest on deposits in banks and other

FHLB dividends

5 unchanged sentences

(Recapture of) provision for credit losses on loans

(Recapture of) provision for credit losses on unfunded commitments

(Recapture of) provision for credit losses

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

Provision for credit losses on unfunded commitments

Provision for credit losses

Net interest income after provision for credit losses

NONINTEREST INCOME

1 unchanged sentence

Sold loan servicing fees and servicing rights mark-to-market

Net (loss) gain on sale of loans

Net loss on sale of investment securities

Net gain on sale of premises and equipment

Net gain on sale of loans

Increase in BOLI cash surrender value

9 unchanged sentences

FDIC insurance premium

Legal settlement

Other expense

Total noninterest expense

Loss before (benefit) provision for income taxes

(Benefit) provision for income taxes

Loss before benefit from income taxes

Benefit from income taxes

Net income (loss)

2 unchanged sentences

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) (Unaudited)

Three Months Ended

Nine Months Ended

September 30,

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Dollars in thousands) (Unaudited)

Three Months Ended March 31,

Net income (loss)

Other comprehensive income:

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

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

Reclassification adjustment for change in fair value of hedged items

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

Other comprehensive income, net of tax

Comprehensive income

See selected notes to the consolidated financial statements.

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Three Months Ended September 30, 2025 and 2024

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

Additional Paid-in

Unearned ESOP

Accumulated Other Comprehensive Loss,

Total Shareholders'

Balance at June 30, 2024

$ 6 $ ( 9,036 )

( 1,980 ) ( 1,980 )

Common stock repurchased

( 98,156 ) — ( 991 ) ( 23 ) ( 1,014 )

Restricted stock award grants net of forfeitures

Restricted stock awards canceled

( 867 ) — ( 8 ) ( 8 )

Other comprehensive income, net of tax

Share-based compensation expense

ESOP shares committed to be released

( 28 ) 164 136

Cash dividends declared ($ 0.07 per share)

( 659 ) ( 659 )

Balance at September 30, 2024

Other comprehensive loss:

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

$ ( 1,183 ) $ 337 ( 846 ) $ 3,105 $ ( 666 ) 2,439

Balance at June 30, 2025

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

37 ( 8 ) 29 37 ( 8 ) 29

Restricted stock award grants net of forfeitures

Restricted stock awards canceled

Reclassification adjustment for change in fair value of hedged items

377 ( 82 ) 295 ( 541 ) 116 ( 425 )

Other comprehensive income, net of tax

Share-based compensation expense

ESOP shares committed to be released

Other comprehensive (loss) income, net of tax

$ ( 769 ) $ 247 ( 522 ) $ 2,601 $ ( 558 ) 2,043

Canceled dividends payable on forfeited unvested restricted stock awards

Balance at September 30, 2025

Comprehensive loss

$ ( 516 ) $ ( 6,993 )

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Nine Months Ended September 30, 2025 and 2024

For the Three Months Ended March 31, 2026 and 2025

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

6 unchanged sentences

( 9,036 ) ( 9,036 )

Common stock repurchased

( 312,288 ) ( 2 ) ( 3,160 ) ( 895 ) ( 4,057 )

Restricted stock award grants, net of forfeitures

7 unchanged sentences

( 656 ) ( 656 )

Balance at September 30, 2024

Balance at March 31, 2025

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

1 unchanged sentence

9,467,925 $ 95 $ 93,803 $ 91,699 $ ( 5,935 ) $ ( 22,398 ) $ 157,264

( 4,573 ) ( 4,573 )

Restricted stock award grants, net of forfeitures

120,023 2 — 2

Restricted stock awards canceled

( 1,862 ) — ( 17 ) ( 17 )

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

( 522 ) ( 522 )

Share-based compensation expense

1 unchanged sentence

( 38 ) 165 127

Cash dividends declared ($ 0.14 per share)

( 1,308 ) ( 1,308 )

Balance at September 30, 2025

Canceled dividends payable on forfeited unvested restricted stock awards

Balance at March 31, 2026

9,499,300 $ 95 $ 93,854 $ 91,707 $ ( 5,770 ) $ ( 22,920 ) $ 156,966

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Nine Months Ended September 30,

(Dollars in thousands) (Unaudited)

Three Months Ended March 31,

Cash flows from operating activities:

Net (loss) income

Net income (loss)

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

Depreciation and amortization

Amortization of core deposit intangible

Depreciation and amortization of fixed assets

Amortization and accretion of premiums and discounts on investments, net

1 unchanged sentence

Amortization of debt issuance costs

Amortization of ROU asset

Change in fair value of sold loan servicing rights

Additions to servicing rights on sold loans, net

Provision for credit losses on loans

Recapture of provision for credit losses on unfunded commitments

(Recapture of) provision for credit losses on loans

Provision for credit losses on unfunded commitments

Allocation of ESOP shares

1 unchanged sentence

Gain on sale of loans, net

Loss on sale of securities available for sale, net

Gain on extinguishment of subordinated debt

5 unchanged sentences

Increase in accrued interest receivable

Decrease (increase) in ROU asset

Increase in prepaid expenses and other assets

Decrease in accrued interest payable

(Decrease) increase in lease liabilities

Decrease in accrued expenses and other liabilities

Net cash (used) provided by operating activities

Decrease in lease liabilities

Increase (decrease) in accrued expenses and other liabilities

Net cash provided (used) by operating activities

Cash flows from investing activities:

1 unchanged sentence

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

Proceeds from sales of securities available for sale

Redemption (purchase) of FHLB stock

(Purchase) redemption of FHLB stock

Early surrender of BOLI policies

Purchase of BOLI policies

Proceeds from BOLI death benefit

Net decrease (increase) in loans receivable

Proceeds from the sale of premises and equipment

Capital contributions to equity and partnership investments

Purchase of loans

Decrease in loans receivable, net

Purchase of premises and equipment

Capital contributions to partnership investments

Redemption of partnership investment

Capital disbursements received from partnership investments

Capital contributions to low-income housing tax credit partnerships

Net cash provided (used) by investing activities

Net cash (used) provided by investing activities

See selected notes to the consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Nine Months Ended September 30,

(Dollars in thousands) (Unaudited)

Three Months Ended March 31,

Cash flows from financing activities:

Net (decrease) increase in deposits

Net increase (decrease) in deposits

Proceeds from long-term FHLB advances

Repayment of long-term FHLB advances

Net decrease in short-term FHLB advances

Net increase (decrease) in short-term FHLB advances

Redemption of subordinated debt, net

Net increase (decrease) in line of credit

Net increase in line of credit

Net increase in advances from borrowers for taxes and insurance

1 unchanged sentence

Restricted stock awards canceled

Repurchase of common stock

Net cash (used) provided by financing activities

Net cash provided (used) by financing activities

Net increase (decrease) in cash and cash equivalents

3 unchanged sentences

Cash paid for interest on deposits and borrowings

Cash paid for income taxes

Supplemental disclosures of noncash investing activities:

Change in unrealized gain on securities available for sale

Change in unrealized loss on fair value hedge

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

Change in unrealized gain (loss) on fair value hedge

Amortization of unrecognized DB plan prior service cost

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

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

Lease liabilities arising from obtaining right-of-use assets

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

Series A equity investment acquired upon conversion of commercial business loan

4 unchanged sentences

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

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

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

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

Pursuant to the Bank's Plan of Conversion (the "Plan") adopted by its Board of Directors, and as approved by its members, the Company established an employee stock ownership plan ("ESOP").

On December 18, 2015, the ESOP completed its open market purchases, with funds borrowed from the Company, of 8 % of the common stock issued in the Conversion for a total of 1,048,029 shares.

On October 31, 2021, the Bank converted from a State Savings Bank Charter to a State Commercial Bank Charter and was simultaneously renamed First Fed Bank from First Federal Savings and Loan Association of Port Angeles.

On August 5, 2022, First Northwest's election to be treated as a financial holding company became effective, allowing the Company to engage in activities that are financial in nature or incidental to financial activities.

First Northwest and the Bank are collectively referred to as the "Company."

First Northwest and the Bank are collectively referred to as the "Company." On August 5, 2022, First Northwest's election to be treated as a financial holding company became effective, allowing the Company to engage in non-banking activities that are financial in nature or incidental to financial activities.

First Northwest's business activities generally are limited to passive investment activities and oversight of its investment in First Fed.

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

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

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

Accordingly, the information set forth in this report, including the consolidated financial statements and related data, relates primarily to the Bank.

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

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

Basis of presentation - The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S.

4 unchanged sentences

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

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

Operating results for the three months ended March 31, 2026 , are not necessarily indicative of the results that may be expected for future periods.

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

4 unchanged sentences

Subsequent events - The Company has evaluated subsequent events for potential recognition and disclosure.

Material events are described in Note

Recently adopted accounting pronouncements

In March 2024, the FASB issued ASU 2024 - 01, Compensation—Stock Compensation (Topic 718 ):

Scope Application of Profits Interest and Similar Awards .

ASU 2024 - 01 added an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718 - 10 - 15 - 3 to determine whether a profits interest award should be accounted for in accordance with Topic 718.

Awards not meeting the criteria should be accounted for in accordance with Topic 710.

The illustrative example provides four fact patterns which are intended to reduce complexity in determining whether a profits interest award is subject to the guidance in Topic 718 and reduce existing diversity in practice.

In November 2024, the FASB issued ASU 2024 - 04, Debt—Debt with Conversion and Other Options (Subtopic 470 - 20 ):

Induced Conversions of Convertible Debt Instruments .

ASU 202404 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments do not change the accounting for conversions that include the issuance of all equity securities upon conversion.

ASU 2024 - 04 is effective for the Company for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.

7 unchanged sentences

The adoption of this ASU is not expected to have a material impact on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024 - 04, Debt—Debt with Conversion and Other Options (Subtopic 470 - 20 ):

Induced Conversions of Convertible Debt Instruments .

ASU 202404 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments do not change the accounting for conversions that include the issuance of all equity securities upon conversion.

ASU 2024 - 04 is effective for the Company for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.

The adoption of this ASU is not expected to have a material impact on the consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40 ):

Targeted Improvements to the Accounting for Internal-Use Software which clarifies the accounting for costs related to internal-use software.

The new guidance clarifies the threshold entities apply to begin capitalizing costs and removes all references to project stages in ASC Subtopic 350 - 40.

ASU 2025 - 06 is effective for the Company for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

The Company does not anticipate this ASU will have a material impact on its financial statements.

In November 2025, the FASB issued ASU 2025 - 08, Financial instruments – Credit Losses (Topic 326 ):

Purchased Loans , which amends the guidance in ASC 326 on the accounting for certain purchased loans.

Under the ASU, entities must account for acquired loans (excluding credit cards) that meet certain criteria at acquisition ("purchased seasoned loans") by recognizing them at their purchase price plus an allowance for expected credit losses (the "gross-up approach").

ASU 2025 - 08 also introduces an accounting policy election related to the subsequent measurement of expected credit losses for entities that use a method other than a discounted cash flow analysis to estimate credit losses on purchased seasoned loans.

If this accounting policy is elected, entities can use the amortized cost basis of the asset to subsequently measure their credit loss allowance.

ASU 2025 - 08 is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years.

Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance.

The Company is currently evaluating the impact of ASU 2025 - 08 on its consolidated financial statements.

Note 2 - Securities

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

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale at March 31, 2026 are summarized as follows:

(dollars in thousands)

Amortized Cost

3 unchanged sentences

Allowance for Credit Losses

(In thousands)

Available for Sale

17 unchanged sentences

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

(dollars in thousands)

Amortized Cost

3 unchanged sentences

Allowance for Credit Losses

(In thousands)

Available for Sale

13 unchanged sentences

$ 295,849 $ 682 $ ( 26,221 ) $ 270,310 $ —

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

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

Accrued interest receivable on available-for-sale debt securities totaled $ 1.9 million and $ 2.0 million as of September 30, 2025 and December 31, 2024 , respectively.

There were no securities classified as held-to-maturity at March 31, 2026 and December 31, 2025 .

The Bank signed a modification agreement on a $ 2.0 million investment in subordinated debt in March 2026 that deferred the March 2026 interest payment to June 2026.

There was no allowance for credit losses on investment securities recorded at March 31, 2026 and December 31, 2025 , including the modified subordinated debt, based on analysis performed by the Company.

Accrued interest receivable on available-for-sale debt securities totaled $ 1.8 million and $ 1.5 million as of March 31, 2026 and December 31, 2025 , respectively.

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

The following shows the unrealized gross losses and fair value of the investment portfolio by length of time that individual securities in each category have been in a continuous loss position as of September 30, 2025 :

Less Than Twelve Months

Twelve Months or Longer

(dollars in thousands)

Gross Unrealized Losses

1 unchanged sentence

Gross Unrealized Losses

(In thousands)

Available for Sale

16 unchanged sentences

Twelve Months or Longer

(dollars in thousands)

Gross Unrealized Losses

1 unchanged sentence

Gross Unrealized Losses

(In thousands)

Available for Sale

13 unchanged sentences

$ ( 44 ) $ 5,507 $ ( 26,177 ) $ 203,805 $ ( 26,221 ) $ 209,312

There were 12 available-for-sale securities with unrealized losses of less than one year, and 128 available-for-sale securities with an unrealized loss of more than one year at September 30, 2025 .

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

Management believes that the unrealized losses on our investment securities relate principally to the general change in interest rates, market liquidity and demand, and market volatility that has occurred since the initial purchase, and such unrecognized losses or gains will continue to vary with general interest rate level and market fluctuations in the future.

1 unchanged sentence

Certain investments in a loss position are guaranteed by government entities or government sponsored entities.

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

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

The Company does not intend, and it is unlikely that we would be required, to sell these investments prior to a market price recovery or maturity.

Based on the Company’s evaluation of these securities, no credit impairment was recorded at March 31, 2026 , or December 31, 2025 .

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

1 unchanged sentence

therefore, these securities are shown separately.

September 30, 2025

Available-for-Sale

March 31, 2026

December 31, 2025

(dollars in thousands)

Amortized Cost

Estimated Fair Value

(In thousands)

Mortgage-backed securities:

Due within one year

$ 1,985 $ 1,962

Due after one through five years

10,453 10,335

Due after five through ten years

Due after ten years

124,940 111,823

Total mortgage-backed securities

144,085 130,621

All other investment securities:

Due within one year

Due after one through five years

25,356 24,530

Due after five through ten years

46,417 42,678

Due after ten years

94,687 84,779

Total all other investment securities

166,460 151,987

Total investment securities

$ 310,545 $ 282,608

December 31, 2024

Available-for-Sale

Amortized Cost

Estimated Fair Value

(In thousands)

Available for Sale

Mortgage-backed securities:

4 unchanged sentences

Due after five through ten years

7,157 6,936 7,215 7,012

Due after ten years

4 unchanged sentences

Due within one year

1,000 971 1,000 959

Due after one through five years

13 unchanged sentences

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

Loan amounts are presented at amortized cost which is comprised of the loan balance net of unearned loan fees in excess of unamortized costs and unamortized purchase premiums of $ 21.3 million as of September 30, 2025 and $ 19.1 million as of December 31, 2024 .

Loan amounts are presented at amortized cost which is comprised of the loan balance net of unearned loan fees in excess of unamortized costs and unamortized purchase premiums of $ 22.1 million as of March 31, 2026 and $ 21.5 million as of December 31, 2025 .

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

Accrued interest receivable on loans was $ 6.2 million as of September 30, 2025 and $ 6.0 million as of December 31, 2024 , and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the calculation of the allowance for credit losses on loans.

Accrued interest receivable on loans was $ 5.3 million as of March 31, 2026 and $ 5.0 million as of December 31, 2025 , and was reported in accrued interest receivable on the consolidated balance sheets and is excluded from the calculation of the allowance for credit losses on loans.

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

September 30, 2025

(dollars in thousands)

March 31, 2026

December 31, 2025

(In thousands)

One-to-four family

17 unchanged sentences

Derivative basis adjustment

( 406 ) ( 903 )

Allowance for credit losses on loans

10 unchanged sentences

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

September 30, 2025

March 31, 2026

December 31, 2025

(dollars in thousands)

Nonaccrual Loans with ACLL

4 unchanged sentences

Total Nonaccrual Loans

(In thousands)

One-to-four family

11 unchanged sentences

$ 579 $ 21,120 $ 21,699 $ 484 $ 22,111 $ 22,595

Interest income recognized on a cash basis on nonaccrual loans for the three months ended September 30, 2025 and 2024 , was $ 14,000 and $ 1,000 , respectively.

Interest income recognized on a cash basis on nonaccrual loans for the nine months ended September 30, 2025 and 2024 , was $ 45,000 and $ 35,000 , respectively.

Interest income recognized on a cash basis on nonaccrual loans for the three months ended March 31, 2026 and 2025 , was $ 133,000 and $ 8,000 , respectively.

Past due loans.

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

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

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

There were no loans past due 90 days or more and still accruing interest at March 31, 2026 and December 31, 2025 .

The following tables present the amortized cost of past due loans (including both accruing and nonaccruing loans) by segment and class as of March 31, 2026 .

90 Days or More

September 30, 2025

Past Due Past Due Past Due Past Due Current Total Loans

(In thousands)

(dollars in thousands)

One-to-four family

15 unchanged sentences

$ 4,752 $ 1,323 $ 13,000 $ 19,075 $ 1,610,321 $ 1,629,396

The following tables present the amortized cost of past due loans (including both accruing and nonaccruing loans) by segment and class as of December 31, 2025 .

90 Days or More

December 31, 2024

Past Due Past Due Past Due Past Due Current Total Loans

(In thousands)

(dollars in thousands)

One-to-four family

28 unchanged sentences

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

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

The following table presents the amortized cost of loans receivable by internally assigned risk grade and class of loans as of March 31, 2026 , as well as gross charge-off activity for the three months ended March 31, 2026 .

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

Term Loans by Year of Origination or Most Recent Renewal or Extension (1)

(In thousands)

(dollars in thousands)

One-to-four family

39 unchanged sentences

426 — — — — — — 426

Special Mention (Grade 5)

4,530 — — — — — — 4,530

Substandard (Grade 6)

8 unchanged sentences

— 188 116 180 131 116 153 884

Special Mention (Grade 5)

— — — — — — 154 154

Substandard (Grade 6)

45 unchanged sentences

Term Loans by Year of Origination or Most Recent Renewal or Extension (1)

(In thousands)

(dollars in thousands)

One-to-four family

49 unchanged sentences

— 117 182 132 — 23 280 734

Special Mention (Grade 5)

— — — — — 9 101 110

Substandard (Grade 6)

52 unchanged sentences

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

As of September 30, 2025 , $ 23.2 million of loans were individually evaluated based on the underlying value of the collateral with no ACLL attributed to such loans.

One $ 6.7 million commercial real estate loan and one $ 4.5 million commercial construction loan were accruing interest at quarter end, while all other individually evaluated loans were on nonaccrual status at September 30, 2025 .

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

At December 31, 2024 , three individually evaluated loans with recorded investments totaling $ 2.5 million were evaluated using a discounted cash flow approach and the remaining loans totaling $ 33.2 million were evaluated based on the underlying value of the collateral.

One $ 6.4 million commercial real estate loan was accruing interest at year end, while all other individually evaluated loans were on nonaccrual status at December 31, 2024.

As of March 31, 2026 , $ 37.9 million of loans were individually evaluated with $ 243,000 of ACLL attributed to such loans.

At March 31, 2026 , two individually evaluated loans with recorded investments totaling $ 386,000 were evaluated using a discounted cash flow approach and the remaining loans totaling $ 37.5 million were evaluated based on the underlying value of the collateral.

One $ 12.8 million commercial real estate loan and one $ 4.5 million multi-family loan were accruing interest at quarter end, while all other individually evaluated loans were on nonaccrual status at March 31, 2026 .

As of December 31, 2025, $ 25.9 million of loans were individually evaluated with $ 151,000 of ACLL attributed to such loans.

At December 31, 2025, two individually evaluated loans with recorded investments totaling $ 303,000 were evaluated using a discounted cash flow approach and the remaining loans totaling $ 25.6 million were evaluated based on the underlying value of the collateral.

One $ 4.5 million multi-family loan was accruing interest at year end, while all other individually evaluated loans were on nonaccrual status at December 31, 2025.

Collateral Dependent Loans.

Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral.

The following table summarizes individually evaluated collateral dependent loans by segment and collateral type as of the periods shown:

The following table summarizes individually evaluated collateral dependent loans by segment and collateral type as of March 31, 2026 .

Collateral Type

September 30, 2025

(dollars in thousands)

Single Family Residence

1 unchanged sentence

Business Assets

(In thousands)

One-to-four family

$ 2,433 $ — $ — $ — $ — $ — $ — $ 2,433

— — 4,533 — — — — 4,533

Commercial real estate

2 unchanged sentences

— 4,160 — — — — — 4,160

Auto and other consumer

— — — — — 302 — 302

Commercial business

2 unchanged sentences

$ 5,304 $ 16,948 $ 4,533 $ 6,158 $ 3,435 $ 302 $ 799 $ 37,479

The following table summarizes individually evaluated collateral dependent loans by segment and collateral type as of December 31, 2025 .

Collateral Type

December 31, 2024

(dollars in thousands)

Single Family Residence

Office Building

Business Assets

(In thousands)

One-to-four family

$ 2,181 $ — $ — $ — $ — $ — $ 2,181

— — 4,531 — — — 4,531

Commercial real estate

13 unchanged sentences

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

There were three new MLTB during the nine months ended September 30, 2025 .

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

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

The Bank also agreed to defer payments on a commercial real estate loan with a recorded investment of $ 4.1 million at the time of modification.

The commercial real estate loan was in compliance with the modified terms at September 30, 2025 .

A previously charged-off commercial business loan was reinstated with term and rate modifications.

The commercial business loan was in compliance with the modified terms at September 30, 2025 .

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

A commercial business loan with a recorded investment of $ 17,000 at the time of modification for which the Bank agreed to deferred principal payments and the borrower agreed to resume both principal and interest payments at the end of the deferral period.

The commercial business loan was not in compliance with the modified terms at December 31, 2024, and the balance was charged-off in the fourth quarter of 2024.

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

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

There were no new MLTB during the three months ended March 31, 2026 or 2025.

Other Real Estate Owned ("OREO").

At September 30, 2025 , and December 31, 2024 , the Company had $ 1.4 million and $ 0 , respectively, of OREO secured by residential real estate properties included in "prepaid expenses and other assets" on the Consolidated Balance Sheets.

The Company held $ 1.4 million at both March 31, 2026 , and December 31, 2025 , of OREO secured by residential real estate properties included in "prepaid expenses and other assets" on the Consolidated Balance Sheets.

Note 4 - Allowance for Credit Losses on Loans

13 unchanged sentences

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

At or For the Three Months Ended September 30, 2025

Beginning Balance

(Recapture of) Provision for Credit Losses

Ending Balance

(In thousands)

One-to-four family

$ 4,888 $ — $ — $ ( 1,012 ) $ 3,876

2,633 — — ( 71 ) 2,562

Commercial real estate

2,462 ( 656 ) 6 893 2,705

Construction and land

499 ( 483 ) — 633 649

1,441 — — ( 49 ) 1,392

Auto and other consumer

2,268 ( 106 ) 47 ( 172 ) 2,037

Commercial business

4,154 ( 1,005 ) 675 ( 842 ) 2,982

$ 18,345 $ ( 2,250 ) $ 728 $ ( 620 ) $ 16,203

At or For the Nine Months Ended September 30, 2025

At or For the Three Months Ended March 31, 2026

(dollars in thousands)

Beginning Balance

1 unchanged sentence

Ending Balance

(In thousands)

One-to-four family

11 unchanged sentences

$ 16,987 $ ( 583 ) $ 432 $ ( 13 ) $ 16,823

At or For the Three Months Ended September 30, 2024

At or For the Three Months Ended March 31, 2025

(dollars in thousands)

Beginning Balance

(Recapture of) Provision for Credit Losses

Provision for (Recapture of) Credit Losses

Ending Balance

(In thousands)

One-to-four family

11 unchanged sentences

$ 20,449 $ ( 7,701 ) $ 51 $ 7,770 $ 20,569

At or For the Nine Months Ended September 30, 2024

Beginning Balance

Provision for (Recapture of) Credit Losses Ending Balance

(In thousands)

One-to-four family

$ 2,975 $ — $ 44 $ 1,289 $ 4,308

1,154 — — 1,435 2,589

Commercial real estate

3,671 — — ( 1,034 ) 2,637

Construction and land

1,889 ( 3,978 ) — 2,805 716

1,077 — — 169 1,246

Auto and other consumer

4,409 ( 2,130 ) 268 386 2,933

Commercial business

2,335 ( 2,700 ) — 7,906 7,541

$ 17,510 $ ( 8,808 ) $ 312 $ 12,956 $ 21,970

Allowance for Credit Losses on Unfunded Loan Commitments.

4 unchanged sentences

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

The allowance for unfunded commitments was $ 497,000 and $ 599,000 at September 30, 2025 , and December 31, 2024 , respectively.

The related provision (recapture) expense was ($ 53,000 ) and $ 57,000 for the three months ended September 30, 2025 and September 30, 2024 , respectively.

The related provision recapture was ($ 102,000 ) and ($ 113,000 ) for the nine months ended September 30, 2025 and September 30, 2024 , respectively.

The allowance for unfunded commitments was $ 685,000 and $ 594,000 at March 31, 2026 , and December 31, 2025 , respectively.

The related provision expense was $ 91,000 and $ 15,000 for the three months ended March 31, 2026 and March 31, 2025 , respectively.

Note 5 - Deposits

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

September 30, 2025

March 31, 2026

December 31, 2025

(dollars in thousands)

Weighted-Average Interest Rate

(Dollars in thousands)

Noninterest-bearing demand deposits

12 unchanged sentences

$ 1,601,582 2.00 $ 1,599,101 2.04

The aggregate balance of time deposit accounts, including certificates of deposit, in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit, currently $250,000, at September 30, 2025 and December 31, 2024 , was $ 166.0 million and $ 174.4 million, respectively.

The aggregate amount of time deposits issued in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit, currently $250,000, at March 31, 2026 and December 31, 2025 , was $ 173.4 million and $ 164.2 million, respectively.

Maturities of certificates at the dates indicated are as follows:

September 30, 2025

(dollars in thousands)

March 31, 2026

December 31, 2025

(In thousands)

Within one year or less

3 unchanged sentences

After two years through three years

10,389 29,378

After three years through four years

2 unchanged sentences

$ 509,230 $ 519,774

At September 30, 2025 and December 31, 2024 , deposits included $ 116.4 million and $ 100.8 million, respectively, in public fund deposits.

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

At March 31, 2026 and December 31, 2025 , deposits included $ 114.0 million and $ 113.6 million, respectively, in public fund deposits.

The Bank had an outstanding letter of credit from the Federal Home Loan Bank of Des Moines ("FHLB") with a notional amount of $ 60.0 million at March 31, 2026 and December 31, 2025 , to collateralize public deposits.

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

Also included in deposits at September 30, 2025 and December 31, 2024 , were funds held by federally recognized tribes totaling $ 37.6 million and $ 20.1 million, respectively.

Investment securities with a carrying value of $ 39.2 million and $ 22.8 million were pledged as collateral for these deposits at September 30, 2025 and December 31, 2024 , respectively.

Also included in deposits at March 31, 2026 and December 31, 2025 , were funds held by federally recognized tribes totaling $ 31.1 million and $ 31.3 million, respectively.

Investment securities with a carrying value of $ 32.4 million and $ 40.7 million were pledged as collateral for these deposits at March 31, 2026 and December 31, 2025 , respectively.

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

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

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

Three Months Ended March 31,

(dollars in thousands)

Demand deposits

$ 52 $ 187 $ 552 $ 567

Money market accounts

2,832 2,875 7,837 7,244

Savings accounts

914 923 2,581 2,791

Certificates of deposit, customer

4,175 4,340 13,093 12,913

Certificates of deposit, brokered

1,110 2,635 4,309 7,737

Total interest expense on deposits

6 unchanged sentences

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

Available borrowing capacity was $ 272.0 million and $ 207.3 million at September 30, 2025 and December 31, 2024 , respectively.

All borrowings are secured by collateral consisting of single-family, home equity, commercial real estate, and multi-family loans receivable in the amounts of $ 902.9 million and $ 951.8 million at September 30, 2025 and December 31, 2024 , respectively.

The Bank had outstanding letters of credit from the FHLB with notional amounts of $ 60.0 million to collateralize public deposits and $ 772,000 to secure the Bellevue, Washington branch lease at September 30, 2025 .

Available borrowing capacity was $ 181.6 million and $ 204.4 million at March 31, 2026 and December 31, 2025 , respectively.

All borrowings are secured by collateral consisting of single-family, home equity, commercial real estate, and multi-family loans receivable in the amounts of $ 835.3 million and $ 871.3 million at March 31, 2026 and December 31, 2025 , respectively.

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

Available borrowing capacity was $ 17.5 million and $ 17.9 million at September 30, 2025 and December 31, 2024 , respectively.

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

Investment securities with a carrying value of $ 18.3 million and $ 18.6 million were pledged to the FRB at September 30, 2025 and December 31, 2024 , respectively.

Available borrowing capacity was $ 16.9 million and $ 17.3 million at March 31, 2026 and December 31, 2025 , respectively.

Investment securities with a carrying value of $ 17.6 million and $ 18.0 million were pledged to the FRB at March 31, 2026 and December 31, 2025 , respectively.

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

4 unchanged sentences

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

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

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 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.

Available borrowing capacity was $ 5.0 million and $ 13.5 million at September 30, 2025 and December 31, 2024 , respectively.

The Company was in compliance with all covenants at March 31, 2026 , including fixed coverage, Tier 1 leverage, and risk-based capital ratio minimum requirements and classified assets to Tier 1 capital and Texas ratio maximum requirements.

Available borrowing capacity was $ 1.5 million at both March 31, 2026 and December 31, 2025 .

The line of credit matures on November 16, 2026 .

2 unchanged sentences

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

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

A borrowing test was performed in June 2025.

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

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

Available borrowing capacity was $ 50.0 million at both March 31, 2026 and December 31, 2025 .

This credit facility is authorized for use through December 31, 2027 .

The following table presents information regarding our borrowings as of March 31, 2026 .

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

(dollars in thousands)

FHLB Long-Term Advances

2 unchanged sentences

Subordinated Debt, net

(Dollars in thousands)

Balance outstanding

$ 130,000 $ 150,000 $ 13,500 $ 34,660

Maximum outstanding at any month-end

170,000 130,000 15,000 39,527

Average monthly outstanding during the period

167,222 95,000 10,172 35,849

Weighted-average daily interest rates

1 unchanged sentence

4.06 % 3.88 % 7.25 % 4.04 %

Interest expense during the period

4,850 3,335 624 1,074

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

Weighted- Average Interest Rate

The amounts by year of maturity and weighted-average interest rate of FHLB long-term, fixed-rate advances at March 31, 2026 are as follows:

(dollars in thousands)

Weighted- Average Interest Rate

Within one year or less

4 unchanged sentences

$ 130,000 4.06

The following table sets forth information regarding our borrowings at the end of and during the year ended December 31, 2024 .

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

FHLB Long-Term Advances

FHLB Overnight Variable-Rate Advances

NexBank Line of Credit

Subordinated Debt, net

(Dollars in thousands)

Balance outstanding

$ 160,000 $ 130,000 $ 6,500 $ 39,514

Maximum outstanding at any month-end

170,000 270,000 10,000 39,514

Average monthly outstanding during the period

136,250 137,750 6,635 39,475

Weighted-average daily interest rates

3.35 % 5.38 % 9.41 % 4.00 %

3.63 % 4.64 % 8.00 % 3.99 %

Note 7 - Income Tax

4 unchanged sentences

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

The effective tax rates were 28.0 % and 25.5 % for the nine months ended September 30, 2025 and 2024 , respectively.

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

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

Effectiv e tax rates differ from the statutory maximum federal tax rate for 2026 and 2025 of 21 %, largely due to the nontaxable earnings on BOLI and tax-exempt interest income earned on certain investment securities and loans.

Included in the benefit from income tax for the first quarter of 2026 were additional adjustments related to unrealized gains and penalties.

Included in the benefit from income tax for the first quarter of 2025 was an estimate for taxes and penalties on the early surrender of a BOLI contract.

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

1 unchanged sentence

furthermore, management has concluded that all deferred tax assets are realizable individually.

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

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

This legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the reinstatement of 100% bonus depreciation, while disallowance of other expenses, such as limitations on charitable deductions and meals, may have an unfavorable impact.

There was no material impact in the current period, and the Company is currently evaluating the impact on future periods.

Note 8 - Earnings (Loss) per Common Share

3 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands, except share data)

Three Months Ended March 31,

(dollars in thousands, except share data)

Net income (loss):

Net income (loss) available to common shareholders

1 unchanged sentence

Dividends and undistributed earnings allocated to participating securities

— ( 1 ) — ( 3 )

Earnings (loss) allocated to common shareholders

18 unchanged sentences

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

At September 30, 2025 and 2024 , antidilutive shares as calculated under the treasury stock method totaled 16,750 and 20,663 , respectively.

At March 31, 2026 and 2025 , antidilutive shares as calculated under the treasury stock method totaled 872 and 28,364 , respectively.

Note 9 - Employee Benefits

5 unchanged sentences

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

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

No principal or interest payments were made by the ESOP during the three months ended March 31, 2026 and 2025 .

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

2 unchanged sentences

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

Compensation expense related to the ESOP for the three months ended September 30, 2025 and 2024 , was $ 97,000 and $ 136,000 , respectively.

Compensation expense related to the ESOP for the nine months ended September 30, 2025 and 2024 , was $ 359,000 and $ 481,000 , respectively.

Compensation expense related to the ESOP for the three months ended March 31, 2026 and 2025 , was $ 127,000 and $ 140,000 , respectively.

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

September 30, 2025

(dollars in thousands, except share data)

March 31, 2026

December 31, 2025

7 unchanged sentences

1,048,029 1,048,029

(Dollars in thousands)

Fair value of unallocated shares

4 unchanged sentences

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

As of September 30, 2025 , there were 101,564 total shares available for grant under the 2020 EIP, all of which are available to be granted as restricted shares, performance shares, options or stock appreciation rights.

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

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

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

There were 145,875 and 81,181 shares of restricted stock awarded, respectively, during the nine months ended September 30, 2025 and 2024 .

As of March 31, 2026 , there were 62,552 total shares available for grant under the 2020 EIP, all of which are available to be granted as restricted shares, performance shares, options or stock appreciation rights.

There were 33,101 and 64,443 shares of restricted stock awarded, respectively, during the three months ended March 31, 2026 and 2025 .

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

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

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

In addition, there were 16,045 and 33,251 performance shares awarded, respectively, during the three months ended March 31, 2026 and 2025 .

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

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

For the three months ended September 30, 2025 and 2024 , total compensation expense for the equity incentive plans was $ 131,000 and $ 260,000 , respectively.

Included in the compensation expense for the three months ended September 30, 2025 and 2024 , was directors' equity compensation of $ 60,000 and $ 75,000 , respectively.

For the nine months ended September 30, 2025 and 2024 , total compensation expense for the equity incentive plans was $ 536,000 and $ 781,000 , respectively.

Included in the compensation expense for the nine months ended September 30, 2025 and 2024 , was directors' equity compensation of $ 181,000 and $ 185,000 , respectively.

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

Three Months Ended September 30, 2025

For the three months ended March 31, 2026 and 2025 , total compensation expense for the equity incentive plans was $ 106,000 and $ 194,000 , respectively.

Included in the compensation expense for the three months ended March 31, 2026 and 2025 , was directors' equity compensation of $ 57,000 and $ 56,000 , respectively.

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

Three Months Ended March 31, 2026

Weighted-Average Grant Date Fair Value

Non-vested at July 1, 2025

157,463 $ 11.24

( 10,113 ) 10.18

( 1,626 ) 10.18

( 53,725 ) 12.22

Non-vested at September 30, 2025

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

The surrendered shares are canceled and are unavailable for reissue.

Nine Months Ended September 30, 2025

Shares Weighted-Average Grant Date Fair Value

Non-vested at January 1, 2026

3 unchanged sentences

( 15,909 ) 11.90

Non-vested at September 30, 2025

Non-vested at March 31, 2026

The surrendered shares are canceled and are unavailable for reissue.

As of September 30, 2025 , there was $ 1.2 million of total unrecognized compensation cost related to non-vested shares granted as restricted stock awards.

As of March 31, 2026 , there was $ 1.2 million of total unrecognized compensation cost related to non-vested shares granted as stock awards.

The cost is expected to be recognized over the remaining weighted-average vesting period of approximately 2.1 years.

38 unchanged sentences

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

September 30, 2025

March 31, 2026

Quoted Prices in Active Markets for Identical Assets or Liabilities

1 unchanged sentence

Significant Unobservable Inputs

(dollars in thousands)

Financial Assets

(In thousands)

Securities available-for-sale

21 unchanged sentences

Significant Unobservable Inputs

(dollars in thousands)

Financial Assets

(In thousands)

Securities available-for-sale

12 unchanged sentences

— — 3,014 3,014

Interest rate swap derivative

Total assets measured at fair value

4 unchanged sentences

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

September 30, 2025

Fair Value (In thousands)

March 31, 2026

Fair Value (dollars in thousands)

Valuation Technique

12 unchanged sentences

December 31, 2025

Fair Value (In thousands)

Fair Value (dollars in thousands)

Valuation Technique

12 unchanged sentences

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

As of or For the Three Months Ended September 30,

As of or For the Nine Months Ended September 30,

As of or For the Three Months Ended March 31,

(dollars in thousands)

Sold loan servicing rights:

(In thousands)

Balance at beginning of period

1 unchanged sentence

Servicing rights that result from transfers and sale of financial assets

( 4 ) 5 13 38

Changes in fair value due to changes in model inputs or assumptions (1)

( 123 ) ( 161 ) ( 201 ) ( 247 )

Balance at end of period

1 unchanged sentence

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

As of or For the Three Months Ended September 30,

As of or For the Nine Months Ended September 30,

As of or For the Three Months Ended March 31,

(dollars in thousands)

Securities available for sale:

(In thousands)

MBS non-agency

2 unchanged sentences

Principal payments and maturities

( 3,944 ) ( 148 ) ( 22,717 ) ( 10,530 )

Unrealized Gains

50 12 140 156

Unrealized (Losses) Gains

Balance at end of period

3 unchanged sentences

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

September 30, 2025

(In thousands)

March 31, 2026

(dollars in thousands)

Individually evaluated collateral-dependent loans

3 unchanged sentences

December 31, 2025

(In thousands)

(dollars in thousands)

Individually evaluated collateral-dependent loans

$ — $ — $ 25,582 $ 25,582

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

Other real estate owned

— — 1,380 1,380

At March 31, 2026 and December 31, 2025 , there were no individually evaluated loans with discounts to appraisal disposition value or other unobservable inputs.

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

September 30, 2025

March 31, 2026

Fair Value Measurements Using:

(dollars in thousands)

Carrying Amount

Estimated Fair Value

(In thousands)

Financial assets

29 unchanged sentences

Fair Value Measurements Using:

(dollars in thousands)

Carrying Amount

Estimated Fair Value

(In thousands)

Financial assets

12 unchanged sentences

3,014 3,014 — — 3,014

Interest rate swap derivative

267 267 — 267 —

Financial liabilities

16 unchanged sentences

The following table presents changes to accumulated other comprehensive income after-tax for the periods shown:

Unrealized Gains and Losses on Available-for-Sale Securities

Net Actuarial Gains (Losses) on DB Plan Assets

Unrecognized DB Plan Prior Service Cost, Net of Amortization

Unrealized Gains (Losses) on Fair Value of Hedged Items

(In thousands)

Balance at June 30, 2024

Other comprehensive income before reclassification

Amounts reclassified from accumulated other comprehensive income

Net other comprehensive income (loss)

Balance at September 30, 2024

Balance at June 30, 2025

Other comprehensive income before reclassification

Amounts reclassified from accumulated other comprehensive income

Net other comprehensive income

Balance at September 30, 2025

(dollars in thousands)

Unrealized Gains and Losses on Available-for-Sale Securities

2 unchanged sentences

Unrealized Losses on Fair Value of Hedged Items

(In thousands)

Balance at December 31, 2024

$ ( 28,210 ) $ ( 486 ) $ ( 1,303 ) $ ( 173 ) $ ( 30,172 )

Other comprehensive income before reclassification

2,439 — — — 2,439

Amounts reclassified from accumulated other comprehensive income

— — 29 ( 425 ) ( 396 )

Net other comprehensive income (loss)

Balance at September 30, 2024

2,439 — 29 ( 425 ) 2,043

Balance at March 31, 2025

$ ( 25,771 ) $ ( 486 ) $ ( 1,274 ) $ ( 598 ) $ ( 28,129 )

Balance at December 31, 2025

Other comprehensive income before reclassification

$ ( 20,058 ) $ ( 387 ) $ ( 1,184 ) $ ( 769 ) $ ( 22,398 )

Other comprehensive loss before reclassification

( 846 ) — — — ( 846 )

Amounts reclassified from accumulated other comprehensive income

Net other comprehensive income (loss)

Balance at September 30, 2025

— — 29 295 324

Net other comprehensive (loss) income

( 846 ) — 29 295 ( 522 )

Balance at March 31, 2026

$ ( 20,904 ) $ ( 387 ) $ ( 1,155 ) $ ( 474 ) $ ( 22,920 )

Note 13 - Derivatives and Hedging Activities

8 unchanged sentences

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income.

The following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges for the periods shown.

Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets

(In thousands)

The following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges for the periods shown.

(dollars in thousands)

Carrying Amount of the Hedged Assets

Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets

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

September 30, 2025

March 31, 2026

Investment securities (1)

7 unchanged sentences

$ 151,883 $ 1,883

$ 150,032 $ 32

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

At September 30, 2025 and December 31, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 51.0 million and $ 56.7 million, respectively;

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

At March 31, 2026 and December 31, 2025 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 55.9 million and $ 56.1 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 603,000 and $ 980,000 , respectively;

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

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

At September 30, 2025 and December 31, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 227.7 million and $ 258.1 million, respectively;

At March 31, 2026 and December 31, 2025 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 201.3 million and $ 213.3 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 406,000 and $ 903,000 , respectively;

and the amount of the designated hedged items was $ 100.0 million for both periods.

and the amount of the designated hedged items was $ 96.6 million and $ 100.0 million, respectively.

The following table summarizes the Company’s derivative instruments at the date indicated.

The Company has master netting agreements with derivative dealers with which it does business, but reflects gross assets and liabilities as “Other assets” and “Other liabilities,” respectively, on the Consolidated Balance Sheets, as follows:

(dollars in thousands)

Notional Amount

Other Liabilities

(In thousands)

September 30, 2025

March 31, 2026

Fair value hedges:

2 unchanged sentences

Interest rate swaps - loans

100,000 — 804

December 31, 2025

5 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

Three Months Ended March 31,

(dollars in thousands)

Total amounts recognized in interest on investment securities

7 unchanged sentences

Recognized on derivatives designated as hedging instruments

( 22 ) ( 1,102 ) 739 ( 1,350 )

Interest rate swaps - loans

Recognized on hedged items

( 35 ) 562 ( 1,084 ) 1,579

Recognized on derivatives designated as hedging instruments

14 ( 300 ) 1,050 ( 1,544 )

Net (expense) income recognized on fair value hedges

$ ( 34 ) $ 498 $ ( 77 ) $ 118

Net income (expense) recognized on fair value hedges

Credit Risk-related Contingent Features

4 unchanged sentences

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

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

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

At March 31, 2026 , the Company had derivatives in a net liability position related to these agreements.

The Company has minimum collateral posting thresholds with its derivative counterparties and has posted cash of $ 3.5 million at March 31, 2026 , to secure the related interest rate swap agreements as needed.

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

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

As of March 31, 2026 , the Company was in compliance with all credit risk-related contingent features.

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

12 unchanged sentences

No single customer accounts for more than 10% of total revenue.

Note 15 - Contingencies

Note 15 - Legal contingencies

In the normal course of business, the Company may have various legal claims and other similar contingent matters outstanding for which a loss may be realized.

1 unchanged sentence

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

Water Station Management Litigation

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

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

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

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

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

The OpCo Debtors' Chapter 11 plan of liquidation was confirmed on September 9, 2025, with more than the 80 % threshold of eligible creditors opting in to the release of the Company.

The Bank subsequently paid the amounts required under the Settlement Agreement, utilizing the $ 5.74 million of the $ 5.8 million previously reserved in the first quarter of 2025 as a noninterest expense.

The Bank pursued reimbursement from its insurance carrier.

3|5|2 Capital Litigation

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

As the Company previously disclosed, on June 10, 2025, 3|5|2 Capital GP LLC, on behalf of 3|5|2 Capital ABS Master Fund LP (collectively, "3|5|2 Capital"), filed a complaint (the "3|5|2 Complaint") against First Fed, in the Superior Court of the State of Washington for King County, arising from 3|5|2 Capital’s alleged investment in bonds of Water Station Management.

The 3|5|2 Complaint alleges that Water Station Management and certain affiliated individuals and entities misappropriated over $ 100 million by using the proceeds from a bond offering to repay earlier investors and creditors, including the Bank, rather than for the disclosed purpose of expanding Water Station Management’s business.

2 unchanged sentences

On September 30, 2025, First Fed filed its Answer, Affirmative Defenses, and Counterclaims, which include a counterclaim alleging that 3|5|2 Capital aided and abetted a fraudulent scheme perpetrated by Ryan Wear, Water Station, and certain affiliated entities, causing damage to the Bank.

Note 16 - Subsequent Event

In October 2025, the Bank received a $ 1.6 million reimbursement from its insurance carrier to offset costs associated with the litigation described above.

Management is currently reviewing the related expenditures to determine the appropriate allocation of the funds received.

On October 17, 2025, Socotra REIT I, LLC filed a complaint (the "Socotra Complaint") against First Fed, in the Superior Court of the State of Washington for King County.

The Socotra Complaint alleges that First Fed made misrepresentations, committed fraudulent acts, converted funds, and violated Washington’s Consumer Protection Act in connection with a $ 7.7 million commercial loan from Socotra to Ideal that paid down $ 4.0 million in First Fed secured obligations, and seeks unspecified damages including restitution, statutory penalties, and attorneys' fees and costs.

The Company is reviewing the claims, strongly disputes the allegations contained in the Socotra Complaint and intends to vigorously defend against the claims.

On January 30, 2026, First Fed filed its Amended Answer, Affirmative Defenses, and Counterclaims adding Leucadia Asset Management, LLC ("Leucadia") to the litigation with 3|5|2 Capital.

On March 17, 2026, 3|5|2 Capital and Leucadia filed a Motion to Dismiss the Bank's counterclaims, which First Fed opposes.

The motion is pending.

Socotra REIT I Litigation

On October 17, 2025, Socotra REIT I, LLC ("Socotra") filed a complaint (the "Socotra Complaint") against First Fed, in the Superior Court of the State of Washington for King County.

The Socotra Complaint alleges that First Fed made misrepresentations, committed fraudulent acts, converted funds, and violated Washington’s Consumer Protection Act in connection with a $ 7.7 million commercial loan from Socotra to Ideal Property Investments LLC that paid down $ 4.0 million in First Fed secured obligations, and seeks unspecified damages including restitution, statutory penalties, and attorneys' fees and costs.

The Company strongly disputes the allegations contained in the Socotra Complaint and is vigorously defending against the claims made therein.

On December 8, 2025, First Fed filed its Answer and Affirmative Defenses.

The Bank and Socotra are currently engaged in discovery.

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

What changed 10-Q

Item 1. Financial Statements