First Northwest Bancorp 10-Q

Item 1. Financial Statements (Unaudited) FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share information) (Unaudited) March 31, 2026 December 31, 2025 ASSETS Cash and due from banks $ 16,548 $ 15,530 Interest-earning deposits in banks 87,588 69,587 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 1,140 1,063 Loans receivable (net of allowance for credit losses on loans of $ 16,823 and $ 16,987 , respectively) 1,612,979 1,612,028 Federal Home Loan Bank ("FHLB") stock, at cost 13,927 13,105 Accrued interest receivable 7,051 6,498 Premises and equipment, net 8,591 8,464 Servicing rights on sold loans, at fair value 2,999 3,014 Bank-owned life insurance ("BOLI"), net 42,850 42,382 Equity and partnership investments 15,452 15,489 Goodwill and other intangible assets, net 1,062 1,062 Deferred tax asset, net 13,898 13,638 Right-of-use ("ROU") asset, net 15,316 15,596 Prepaid expenses and other assets 21,057 20,129 Total assets $ 2,133,443 $ 2,107,895 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 1,601,582 $ 1,599,101 Borrowings 328,160 308,143 Accrued interest payable 280 1,223 Lease liability, net 16,250 16,439 Accrued expenses and other liabilities 27,514 24,301 Advances from borrowers for taxes and insurance 2,691 1,424 Total liabilities 1,976,477 1,950,631 Shareholders' Equity Preferred stock, $ 0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding — — Common stock, $ 0.01 par value; 75,000,000 shares authorized; 9,499,300 and 9,467,925 shares issued and outstanding, respectively 95 95 Additional paid-in capital 93,854 93,803 Retained earnings 91,707 91,699 Accumulated other comprehensive loss, net of tax ( 22,920 ) ( 22,398 ) Unearned employee stock ownership plan ("ESOP") shares ( 5,770 ) ( 5,935 ) Total shareholders' equity 156,966 157,264 Total liabilities and shareholders' equity $ 2,133,443 $ 2,107,895 See selected notes to the consolidated financial statements. 3 Table of Contents FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited) Three Months Ended March 31, 2026 2025 INTEREST INCOME Interest and fees on loans receivable $ 22,000 $ 22,231 Interest on investment securities 2,585 3,803 Interest on deposits in banks and other 467 482 FHLB dividends 282 307 Total interest income 25,334 26,823 INTEREST EXPENSE Deposits 7,930 9,737 Borrowings 2,964 3,239 Total interest expense 10,894 12,976 Net interest income 14,440 13,847 PROVISION FOR CREDIT LOSSES (Recapture of) provision for credit losses on loans ( 13 ) 7,770 Provision for credit losses on unfunded commitments 91 15 Provision for credit losses 78 7,785 Net interest income after provision for credit losses 14,362 6,062 NONINTEREST INCOME Loan and deposit service fees 1,122 1,106 Sold loan servicing fees and servicing rights mark-to-market 127 195 Net gain on sale of loans 76 11 Increase in BOLI cash surrender value 468 372 Income from BOLI death benefit, net — 1,059 Other income 215 1,034 Total noninterest income 2,008 3,777 NONINTEREST EXPENSE Compensation and benefits 8,232 7,715 Data processing 2,228 2,011 Occupancy and equipment 1,565 1,592 Supplies, postage, and telephone 298 298 Regulatory assessments and state taxes 534 479 Advertising 304 265 Professional fees 2,026 777 FDIC insurance premium 363 434 Legal settlement — 5,750 Other expense 1,134 679 Total noninterest expense 16,684 20,000 Loss before benefit from income taxes ( 314 ) ( 10,161 ) Benefit from income taxes ( 320 ) ( 1,125 ) Net income (loss) $ 6 $ ( 9,036 ) Basic and diluted earnings (loss) per common share $ — $ ( 1.03 ) See selected notes to the consolidated financial statements. 4 Table of Contents FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Dollars in thousands) (Unaudited) Three Months Ended March 31, 2026 2025 Balance Tax Effect Net Balance Tax Effect Net Net income (loss) $ 6 $ ( 9,036 ) 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 Amortization of unrecognized defined benefit ("DB") plan prior service cost 37 ( 8 ) 29 37 ( 8 ) 29 Reclassification adjustment for change in fair value of hedged items 377 ( 82 ) 295 ( 541 ) 116 ( 425 ) Other comprehensive (loss) income, net of tax $ ( 769 ) $ 247 ( 522 ) $ 2,601 $ ( 558 ) 2,043 Comprehensive loss $ ( 516 ) $ ( 6,993 ) See selected notes to the consolidated financial statements. 5 Table of Contents FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the Three Months Ended March 31, 2026 and 2025 (Dollars in thousands, except share information) (Unaudited) Common Stock Additional Paid-in Retained Unearned ESOP Accumulated Other Comprehensive Loss, Total Shareholders' Shares Amount Capital Earnings Shares Net of Tax Equity Balance at December 31, 2024 9,353,348 $ 93 $ 93,357 $ 97,198 $ ( 6,594 ) $ ( 30,172 ) $ 153,882 Net loss ( 9,036 ) ( 9,036 ) Restricted stock award grants, net of forfeitures 94,549 1 — 1 Restricted stock awards canceled ( 7,279 ) — ( 76 ) ( 76 ) Other comprehensive income, net of tax 2,043 2,043 Share-based compensation expense 194 194 ESOP shares committed to be released ( 25 ) 165 140 Cash dividends declared ($ 0.07 per share) ( 656 ) ( 656 ) Balance at March 31, 2025 9,440,618 $ 94 $ 93,450 $ 87,506 $ ( 6,429 ) $ ( 28,129 ) $ 146,492 Balance at December 31, 2025 9,467,925 $ 95 $ 93,803 $ 91,699 $ ( 5,935 ) $ ( 22,398 ) $ 157,264 Net income 6 6 Restricted stock award grants, net of forfeitures 33,237 — — — Restricted stock awards canceled ( 1,862 ) — ( 17 ) ( 17 ) Other comprehensive loss, net of tax ( 522 ) ( 522 ) Share-based compensation expense 106 106 ESOP shares committed to be released ( 38 ) 165 127 Canceled dividends payable on forfeited unvested restricted stock awards 2 2 Balance at March 31, 2026 9,499,300 $ 95 $ 93,854 $ 91,707 $ ( 5,770 ) $ ( 22,920 ) $ 156,966 See selected notes to the consolidated financial statements. 6 Table of Contents FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income (loss) $ 6 $ ( 9,036 ) Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization of fixed assets 318 330 Amortization and accretion of premiums and discounts on investments, net 17 59 Accretion of deferred loan fees and purchased premiums, net ( 589 ) ( 446 ) Amortization of debt issuance costs 17 77 Amortization of ROU asset 280 314 Change in fair value of sold loan servicing rights 18 ( 9 ) Additions to servicing rights on sold loans, net ( 3 ) ( 11 ) (Recapture of) provision for credit losses on loans ( 13 ) 7,770 Provision for credit losses on unfunded commitments 91 15 Allocation of ESOP shares 127 140 Share-based compensation expense 106 194 Gain on sale of loans, net ( 76 ) ( 11 ) Gain on extinguishment of subordinated debt — ( 905 ) Increase in BOLI cash surrender value, net ( 468 ) ( 372 ) Income from BOLI death benefit, net — ( 1,059 ) Origination of loans held for sale ( 7,008 ) ( 6,109 ) Proceeds from sale of loans held for sale 7,007 3,652 Change in assets and liabilities: Increase in accrued interest receivable ( 553 ) ( 160 ) Increase in prepaid expenses and other assets ( 1,237 ) ( 11,675 ) Decrease in accrued interest payable ( 943 ) ( 1,132 ) Decrease in lease liabilities ( 189 ) ( 269 ) Increase (decrease) in accrued expenses and other liabilities 3,977 ( 3,100 ) Net cash provided (used) by operating activities 885 ( 21,743 ) Cash flows from investing activities: Purchase of securities available for sale ( 10,979 ) — Proceeds from maturities, calls, and principal repayments of securities available for sale 7,103 27,957 (Purchase) redemption of FHLB stock ( 822 ) 1,329 Early surrender of BOLI policies — 9,381 Proceeds from BOLI death benefit — 528 Purchase of loans ( 23,419 ) ( 21,673 ) Decrease in loans receivable, net 23,070 51,962 Purchase of premises and equipment ( 445 ) ( 71 ) Capital contributions to partnership investments ( 97 ) ( 295 ) Redemption of partnership investment 150 — Capital disbursements received from partnership investments 187 179 Capital contributions to low-income housing tax credit partnerships ( 345 ) — Net cash (used) provided by investing activities ( 5,597 ) 69,297 See selected notes to the consolidated financial statements. 7 Table of Contents FIRST NORTHWEST BANCORP AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended March 31, 2026 2025 Cash flows from financing activities: Net increase (decrease) in deposits $ 2,481 $ ( 21,958 ) Proceeds from long-term FHLB advances — 30,000 Repayment of long-term FHLB advances ( 30,000 ) ( 20,000 ) Net increase (decrease) in short-term FHLB advances 50,000 ( 40,000 ) Redemption of subordinated debt, net — ( 4,095 ) Net increase in line of credit — 6,000 Net increase in advances from borrowers for taxes and insurance 1,267 1,099 Payment of dividends — ( 649 ) Restricted stock awards canceled ( 17 ) ( 76 ) Net cash provided (used) by financing activities 23,731 ( 49,679 ) Net increase (decrease) in cash and cash equivalents 19,019 ( 2,125 ) Cash and cash equivalents at beginning of period 85,117 72,448 Cash and cash equivalents at end of period $ 104,136 $ 70,323 Supplemental disclosures of cash flow information: Cash paid for interest on deposits and borrowings $ 11,837 $ 14,166 Supplemental disclosures of noncash investing activities: Change in unrealized (loss) gain on securities available for sale $ ( 1,183 ) $ 3,105 Change in unrealized gain (loss) on fair value hedge 377 ( 541 ) Amortization of unrecognized DB plan prior service cost 37 37 Transfer of BOLI receivable to prepaid expenses and other assets due to death benefit accrued but not paid at period end — 1,404 Series A equity investment acquired upon conversion of commercial business loan — 1,260 See selected notes to the consolidated financial statements. 8 Table of Contents FIRST NORTHWEST BANCORP AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 - Basis of Presentation and Critical Accounting Policies 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"). 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 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. 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. Basis of presentation - The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all the information and footnotes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. These unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10 -K for the year ended December 31, 2025 . In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial statements in accordance with GAAP have been included. Operating results for the three months ended March 31, 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. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to a determination of the allowance for credit losses ("ACL"), fair value of financial instruments and derivatives, and deferred tax assets and liabilities. Principles of consolidation - The accompanying consolidated financial statements include the accounts of First Northwest and its wholly owned subsidiary, First Fed. All material intercompany accounts and transactions have been eliminated in consolidation. Subsequent events - The Company has evaluated subsequent events for potential recognition and disclosure. Recently adopted accounting pronouncements 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 did not have a material impact on the consolidated financial statements and related disclosures. Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU 2024 - 03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Income Statement Expenses . ASU 2024 - 03 requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information to better understand an entity's performance and potential future cash flows. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024 - 03 is effective for the Company for fiscal years beginning after December 15, 2026, 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. 9 Table of Contents 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 March 31, 2026 are summarized as follows: (dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Allowance for Credit Losses Available for Sale Municipal bonds $ 91,924 $ — $ ( 12,359 ) $ 79,565 $ — U.S. government agency issued asset-backed securities (ABS agency) 11,665 3 ( 36 ) 11,632 — Corporate issued asset-backed securities (ABS corporate) 7,670 9 ( 3 ) 7,676 — Corporate issued debt securities (Corporate debt) 38,525 320 ( 1,453 ) 37,392 — U.S. Small Business Administration securities (SBA) 5,810 22 ( 12 ) 5,820 — Mortgage-backed securities: U.S. government agency issued mortgage-backed securities (MBS agency) 108,375 255 ( 10,662 ) 97,968 — Non-agency issued mortgage-backed securities (MBS non-agency) 35,738 1 ( 2,807 ) 32,932 — Total securities available for sale $ 299,707 $ 610 $ ( 27,332 ) $ 272,985 $ — 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 Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Allowance for Credit Losses Available for Sale Municipal bonds $ 92,148 $ — $ ( 11,896 ) $ 80,252 $ — ABS agency 11,927 28 ( 12 ) 11,943 — ABS corporate 7,963 2 ( 4 ) 7,961 — Corporate debt 39,772 251 ( 1,222 ) 38,801 — SBA 6,293 18 ( 18 ) 6,293 — Mortgage-backed securities: MBS agency 101,618 379 ( 10,341 ) 91,656 — MBS non-agency 36,128 4 ( 2,728 ) 33,404 — Total securities available for sale $ 295,849 $ 682 $ ( 26,221 ) $ 270,310 $ — 10 Table of Contents 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 March 31, 2026 : Less Than Twelve Months Twelve Months or Longer Total (dollars in thousands) Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Available for Sale Municipal bonds $ — $ — $ ( 12,359 ) $ 79,565 $ ( 12,359 ) $ 79,565 ABS agency ( 24 ) 2,556 ( 12 ) 6,222 ( 36 ) 8,778 ABS corporate — — ( 3 ) 1,666 ( 3 ) 1,666 Corporate debt ( 2 ) 1,498 ( 1,451 ) 24,077 ( 1,453 ) 25,575 SBA ( 3 ) 639 ( 9 ) 1,929 ( 12 ) 2,568 Mortgage-backed securities: MBS agency ( 72 ) 12,793 ( 10,590 ) 55,300 ( 10,662 ) 68,093 MBS non-agency — — ( 2,807 ) 30,685 ( 2,807 ) 30,685 Total available-for-sale in a loss position $ ( 101 ) $ 17,486 $ ( 27,231 ) $ 199,444 $ ( 27,332 ) $ 216,930 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 December 31, 2025 : Less Than Twelve Months Twelve Months or Longer Total (dollars in thousands) Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Available for Sale Municipal bonds $ — $ — $ ( 11,896 ) $ 80,252 $ ( 11,896 ) $ 80,252 ABS agency — — ( 12 ) 4,116 ( 12 ) 4,116 ABS corporate — — ( 4 ) 958 ( 4 ) 958 Corporate debt ( 8 ) 993 ( 1,214 ) 27,570 ( 1,222 ) 28,563 SBA ( 5 ) 643 ( 13 ) 2,380 ( 18 ) 3,023 Mortgage-backed securities: MBS agency ( 31 ) 3,871 ( 10,310 ) 57,375 ( 10,341 ) 61,246 MBS non-agency — — ( 2,728 ) 31,154 ( 2,728 ) 31,154 Total available-for-sale in a loss position $ ( 44 ) $ 5,507 $ ( 26,177 ) $ 203,805 $ ( 26,221 ) $ 209,312 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. We do not believe the unrealized losses on our securities are related to a deterioration in credit quality. Certain investments in a loss position are guaranteed by government entities or government sponsored entities. 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 . 11 Table of Contents The amortized cost and estimated fair value of investment securities by contractual maturity are shown in the following tables at the dates indicated. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties; therefore, these securities are shown separately. March 31, 2026 December 31, 2025 (dollars in thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Available for Sale Mortgage-backed securities: Due within one year $ 6,603 $ 6,583 $ 4,602 $ 4,603 Due after one through five years 3,107 3,049 6,912 6,856 Due after five through ten years 7,157 6,936 7,215 7,012 Due after ten years 127,246 114,332 119,017 106,589 Total mortgage-backed securities 144,113 130,900 137,746 125,060 All other investment securities: Due within one year 1,000 971 1,000 959 Due after one through five years 23,058 22,324 24,082 23,620 Due after five through ten years 44,894 41,019 45,356 41,453 Due after ten years 86,642 77,771 87,665 79,218 Total all other investment securities 155,594 142,085 158,103 145,250 Total investment securities $ 299,707 $ 272,985 $ 295,849 $ 270,310 Note 3 - Loans Receivable The Company has identified three segments of its loan portfolio that reflect the structure of the lending function, the Company's strategic plan and the manner in which management monitors performance and credit quality. The three loan portfolio segments are: Real Estate Loans, Consumer Loans and Commercial Business Loans. 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 $ 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 $ 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: (dollars in thousands) March 31, 2026 December 31, 2025 Real Estate: One-to-four family $ 362,984 $ 376,731 Multi-family 270,979 288,529 Commercial real estate 403,243 402,683 Construction and land 62,347 61,268 Total real estate loans 1,099,553 1,129,211 Consumer: Home equity 86,292 85,088 Auto and other consumer 290,960 283,502 Total consumer loans 377,252 368,590 Commercial business loans 152,591 130,311 Total loans receivable 1,629,396 1,628,112 Less: Derivative basis adjustment ( 406 ) ( 903 ) Allowance for credit losses on loans 16,823 16,987 Total loans receivable, net $ 1,612,979 $ 1,612,028 12 Table of Contents Nonaccrual Loans. The accrual of interest on loans is discontinued at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on either the cash basis or cost recovery method until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. For those loans placed on nonaccrual status due to payment delinquency, return to accrual status will generally not occur until the borrower demonstrates repayment ability over a period of not less than six months. The following table presents the amortized cost of nonaccrual loans by class of loan at the dates indicated: March 31, 2026 December 31, 2025 (dollars in thousands) Nonaccrual Loans with ACLL Nonaccrual Loans with No ACLL Total Nonaccrual Loans Nonaccrual Loans with ACLL Nonaccrual Loans with No ACLL Total Nonaccrual Loans One-to-four family $ 88 $ 2,433 $ 2,521 $ 91 $ 2,181 $ 2,272 Commercial real estate 26 9,593 9,619 5 9,740 9,745 Construction and land 4 4,160 4,164 7 5,139 5,146 Home equity 53 — 53 53 — 53 Auto and other consumer 24 1,256 1,280 25 1,061 1,086 Commercial business 384 3,678 4,062 303 3,990 4,293 Total nonaccrual loans $ 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 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 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 . 30-59 Days 60-89 Days 90 Days or More Total (dollars in thousands) Past Due Past Due Past Due Past Due Current Total Loans Real Estate: One-to-four family $ 894 $ 457 $ 1,326 $ 2,677 $ 360,307 $ 362,984 Multi-family — — — — 270,979 270,979 Commercial real estate 232 — 3,435 3,667 399,576 403,243 Construction and land — — 4,160 4,160 58,187 62,347 Total real estate loans 1,126 457 8,921 10,504 1,089,049 1,099,553 Consumer: Home equity 107 — — 107 86,185 86,292 Auto and other consumer 3,119 866 1,256 5,241 285,719 290,960 Total consumer loans 3,226 866 1,256 5,348 371,904 377,252 Commercial business loans 400 — 2,823 3,223 149,368 152,591 Total loans $ 4,752 $ 1,323 $ 13,000 $ 19,075 $ 1,610,321 $ 1,629,396 13 Table of Contents 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 . 30-59 Days 60-89 Days 90 Days or More Total (dollars in thousands) Past Due Past Due Past Due Past Due Current Total Loans Real Estate: One-to-four family $ 867 $ 1,288 $ 523 $ 2,678 $ 374,053 $ 376,731 Multi-family — — — — 288,529 288,529 Commercial real estate 3,435 — — 3,435 399,248 402,683 Construction and land 1 — 5,146 5,147 56,121 61,268 Total real estate loans 4,303 1,288 5,669 11,260 1,117,951 1,129,211 Consumer: Home equity — — 53 53 85,035 85,088 Auto and other consumer 3,565 528 1,062 5,155 278,347 283,502 Total consumer loans 3,565 528 1,115 5,208 363,382 368,590 Commercial business loans 19 2,686 270 2,975 127,336 130,311 Total loans $ 7,887 $ 4,502 $ 7,054 $ 19,443 $ 1,608,669 $ 1,628,112 Credit quality indicator. Federal regulations provide for the classification of lower quality loans and other assets, such as debt and equity securities, as substandard, doubtful, or loss; risk ratings 6, 7, and 8 in our 8 -point risk rating system, respectively. An asset is considered substandard if it is inadequately protected by the current net worth and paying capacity of the borrower or of any collateral pledged. Substandard assets include those characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values. Assets classified as loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. When First Fed classifies problem assets as either substandard or doubtful, it may choose to individually evaluate the expected credit loss or may determine that the characteristics are not significantly different from those in pooled loan analysis. The Company evaluates individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. When an insured institution classifies problem assets as a loss, it is required to charge off such assets in the period in which they are deemed uncollectible. Assets that do not currently expose First Fed to sufficient risk to warrant classification as substandard or doubtful but possess identified weaknesses are designated as either watch or special mention assets; risk ratings 4 and 5 in our risk rating system, respectively. Loans not otherwise classified are considered pass graded loans and are rated 1 - 3 in our risk rating system. 14 Table of Contents 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) Revolving Total (dollars in thousands) 2026 2025 2024 2023 2022 Prior Loans Loans One-to-four family Pass (Grades 1-3) $ 455 $ 6,920 $ 3,156 $ 7,977 $ 124,295 $ 213,595 $ — $ 356,398 Watch (Grade 4) — — 385 — 291 2,853 — 3,529 Special Mention (Grade 5) — — — — 457 79 — 536 Substandard (Grade 6) — — — — 783 1,738 — 2,521 Total one-to-four family 455 6,920 3,541 7,977 125,826 218,265 — 362,984 Gross charge-offs year-to-date — — — — — — — — Multi-family Pass (Grades 1-3) 7,902 8,063 17,681 22,294 68,620 76,328 — 200,888 Watch (Grade 4) 3,277 5,809 9,694 — 15,084 26,980 — 60,844 Special Mention (Grade 5) — 4,532 — — 4,715 — — 9,247 Total multi-family 11,179 18,404 27,375 22,294 88,419 103,308 — 270,979 Gross charge-offs year-to-date — — — — — — — — Commercial Real Estate Pass (Grades 1-3) 8,736 58,204 14,022 42,480 49,152 153,275 — 325,869 Watch (Grade 4) — 3,644 14,591 — 12,033 14,106 — 44,374 Special Mention (Grade 5) — — — — 5,451 5,149 — 10,600 Substandard (Grade 6) 12,781 9,593 — — 26 — — 22,400 Total commercial real estate 21,517 71,441 28,613 42,480 66,662 172,530 — 403,243 Gross charge-offs year-to-date — 3 — — — — — 3 Construction and Land Pass (Grades 1-3) 10,288 26,083 17,969 264 1,371 1,782 — 57,757 Watch (Grade 4) 426 — — — — — — 426 Substandard (Grade 6) — — — 4,160 — 4 — 4,164 Total construction and land 10,714 26,083 17,969 4,424 1,371 1,786 — 62,347 Gross charge-offs year-to-date — — — 171 — — — 171 Home Equity Pass (Grades 1-3) 1,463 6,092 4,080 4,158 4,702 9,304 55,507 85,306 Watch (Grade 4) — 188 116 180 131 116 153 884 Substandard (Grade 6) — — — — — 49 53 102 Total home equity 1,463 6,280 4,196 4,338 4,833 9,469 55,713 86,292 Gross charge-offs year-to-date — — — — — — — — Auto and Other Consumer Pass (Grades 1-3) 21,112 64,843 51,394 29,393 38,904 78,869 859 285,374 Watch (Grade 4) — 78 936 817 692 940 1 3,464 Special Mention (Grade 5) — — 134 509 32 167 — 842 Substandard (Grade 6) — — 90 651 367 172 — 1,280 Total auto and other consumer 21,112 64,921 52,554 31,370 39,995 80,148 860 290,960 Gross charge-offs year-to-date — — 7 100 102 45 22 276 Commercial business Pass (Grades 1-3) 2,628 11,325 20,959 10,958 5,210 45,490 41,856 138,426 Watch (Grade 4) 4 3,326 1,518 1 243 12 1,299 6,403 Special Mention (Grade 5) — — 1,458 90 866 8 1,187 3,609 Substandard (Grade 6) — 314 78 165 3,444 152 — 4,153 Total commercial business 2,632 14,965 24,013 11,214 9,763 45,662 44,342 152,591 Gross charge-offs year-to-date — 4 4 — 11 114 — 133 Total loans Pass (Grades 1-3) 52,584 181,530 129,261 117,524 292,254 578,643 98,222 1,450,018 Watch (Grade 4) 3,707 13,045 27,240 998 28,474 45,007 1,453 119,924 Special Mention (Grade 5) — 4,532 1,592 599 11,521 5,403 1,187 24,834 Substandard (Grade 6) 12,781 9,907 168 4,976 4,620 2,115 53 34,620 Total loans $ 69,072 $ 209,014 $ 158,261 $ 124,097 $ 336,869 $ 631,168 $ 100,915 $ 1,629,396 Total gross charge-offs year-to-date $ — $ 7 $ 11 $ 271 $ 113 $ 159 $ 22 $ 583 ( 1 ) 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. 15 Table of Contents The following table presents the amortized cost of loans receivable by internally assigned risk grade and class of loans as of December 31, 2025 , as well as gross charge-off activity for the year then ended. 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) Revolving Total (dollars in thousands) 2025 2024 2023 2022 2021 Prior Loans Loans One-to-four family Pass (Grades 1-3) $ 7,571 $ 4,066 $ 8,065 $ 128,413 $ 109,134 $ 113,570 $ — $ 370,819 Watch (Grade 4) — 387 — 292 — 2,355 — 3,034 Special Mention (Grade 5) — — — 529 — 43 — 572 Substandard (Grade 6) — — — 259 — 2,047 — 2,306 Total one-to-four family 7,571 4,453 8,065 129,493 109,134 118,015 — 376,731 Gross charge-offs for the year — — — — — — — — Multi-family Pass (Grades 1-3) 8,081 17,738 17,820 80,638 51,091 37,775 — 213,143 Watch (Grade 4) 5,825 9,732 — 22,204 24,889 4,902 — 67,552 Special Mention (Grade 5) 4,531 — 3,303 — — — — 7,834 Total multi-family 18,437 27,470 21,123 102,842 75,980 42,677 — 288,529 Gross charge-offs for the year — — — — — — — — Commercial Real Estate Pass (Grades 1-3) 61,864 21,177 44,009 50,828 70,765 89,639 — 338,282 Watch (Grade 4) 3,671 7,572 — 12,118 6,204 3,120 — 32,685 Special Mention (Grade 5) — — — 4,251 3,419 1,771 — 9,441 Substandard (Grade 6) 9,740 — — 5 12,530 — — 22,275 Total commercial real estate 75,275 28,749 44,009 67,202 92,918 94,530 — 402,683 Gross charge-offs for the year 985 — — — 5,586 — — 6,571 Construction and Land Pass (Grades 1-3) 26,259 24,510 351 1,571 1,477 422 — 54,590 Watch (Grade 4) — 1,532 — — — — — 1,532 Substandard (Grade 6) — — 5,139 — — 7 — 5,146 Total construction and land 26,259 26,042 5,490 1,571 1,477 429 — 61,268 Gross charge-offs for the year — — 1,884 — — — — 1,884 Home Equity Pass (Grades 1-3) 6,552 4,290 4,257 4,841 3,641 6,138 54,422 84,141 Watch (Grade 4) — 117 182 132 — 23 280 734 Special Mention (Grade 5) — — — — — 9 101 110 Substandard (Grade 6) — — — — — 50 53 103 Total home equity 6,552 4,407 4,439 4,973 3,641 6,220 54,856 85,088 Gross charge-offs for the year — — — — — — — — Auto and Other Consumer Pass (Grades 1-3) 65,818 54,755 30,871 41,590 50,744 32,830 822 277,430 Watch (Grade 4) — 1,023 1,167 1,522 386 146 1 4,245 Special Mention (Grade 5) 79 126 393 43 24 76 — 741 Substandard (Grade 6) — 85 640 262 — 99 — 1,086 Total auto and other consumer 65,897 55,989 33,071 43,417 51,154 33,151 823 283,502 Gross charge-offs for the year — 22 228 313 13 32 137 745 Commercial business Pass (Grades 1-3) 11,921 21,923 12,145 5,452 2,889 19,955 41,274 115,559 Watch (Grade 4) 3,447 1,638 565 251 13 250 1,280 7,444 Special Mention (Grade 5) — 1,457 99 910 211 112 130 2,919 Substandard (Grade 6) 334 96 169 3,514 276 — — 4,389 Total commercial business 15,702 25,114 12,978 10,127 3,389 20,317 42,684 130,311 Gross charge-offs for the year 692 434 — 2,478 2,015 686 — 6,305 Total loans Pass (Grades 1-3) 188,066 148,459 117,518 313,333 289,741 300,329 96,518 1,453,964 Watch (Grade 4) 12,943 22,001 1,914 36,519 31,492 10,796 1,561 117,226 Special Mention (Grade 5) 4,610 1,583 3,795 5,733 3,654 2,011 231 21,617 Substandard (Grade 6) 10,074 181 5,948 4,040 12,806 2,203 53 35,305 Total loans $ 215,693 $ 172,224 $ 129,175 $ 359,625 $ 337,693 $ 315,339 $ 98,363 $ 1,628,112 Total Gross charge-offs for the year $ 1,677 $ 456 $ 2,112 $ 2,791 $ 7,614 $ 718 $ 137 $ 15,505 ( 1 ) 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. 16 Table of Contents Individually Evaluated Loans. The Company evaluates loans collectively for purposes of determining the ACLL in accordance with ASC 326 by aggregating loans deemed to possess similar risk characteristics and individually evaluates loans that it believes no longer possess risk characteristics similar to other loans in the portfolio. These loans are typically identified from a substandard or worse internal risk grade, since the specific attributes and risks associated with such loans tend to become unique as the credit deteriorates. Such loans are typically nonperforming, modified loans made to borrowers experiencing financial difficulty, and/or are deemed collateral dependent, where the ultimate repayment of the loan is expected to come from the operation of or eventual sale of the collateral. Loans that are deemed by management to possess unique risk characteristics are evaluated individually for purposes of determining an appropriate lifetime ACLL. The Company uses a discounted cash flow approach, using the loan’s effective interest rate, for determining the ACL on individually evaluated loans, unless the loan is deemed collateral dependent. Collateral dependent loans are evaluated based on the estimated fair value of the underlying collateral, less estimated costs to sell. The Company may increase or decrease the ACLL for collateral dependent individually evaluated loans based on changes in the estimated expected fair value of the collateral. In cases where the loan is well-secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACLL is recorded. Changes in the ACLL for all other individually evaluated loans is based substantially on the Company’s evaluation of cash flows expected to be received from such loans. As of March 31, 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 March 31, 2026 . Collateral Type (dollars in thousands) Single Family Residence Condominium Multi-family Office Building Gas Station Auto Business Assets Total One-to-four family $ 2,433 $ — $ — $ — $ — $ — $ — $ 2,433 Multi-family — — 4,533 — — — — 4,533 Commercial real estate — 12,781 — 6,158 3,435 — — 22,374 Construction and land — 4,160 — — — — — 4,160 Auto and other consumer — — — — — 302 — 302 Commercial business 2,871 7 — — — — 799 3,677 Total collateral-dependent loans $ 5,304 $ 16,948 $ 4,533 $ 6,158 $ 3,435 $ 302 $ 799 $ 37,479 17 Table of Contents The following table summarizes individually evaluated collateral dependent loans by segment and collateral type as of December 31, 2025 . Collateral Type (dollars in thousands) Single Family Residence Condominium Multi-family Office Building Gas Station Business Assets Total One-to-four family $ 2,181 $ — $ — $ — $ — $ — $ 2,181 Multi-family — — 4,531 — — — 4,531 Commercial real estate — — — 6,306 3,435 — 9,741 Construction and land — 5,139 — — — — 5,139 Commercial business 2,875 7 — — — 1,108 3,990 Total collateral-dependent loans $ 5,056 $ 5,146 $ 4,531 $ 6,306 $ 3,435 $ 1,108 $ 25,582 Modified Loans to Troubled Borrowers. Modified loans to troubled borrowers ("MLTB") refer to modifications of loans to borrowers experiencing financial difficulty. A MLTB arises from a modification made to a loan in order to alleviate temporary difficulties in the borrower’s financial condition and/or constraints on the borrower’s ability to repay the loan, and to minimize potential losses to the Company. GAAP requires that certain types of modifications be reported, which consist of the following: principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension, or any combination of the foregoing. The ACLL for MLTBs is measured on a collective basis, as with other loans in the loan portfolio, unless management determines that such loans no longer possess risk characteristics similar to others in the loan portfolio. In those instances, the ACLL for a MLTB is determined through individual evaluation. There were no new MLTB during the three months ended March 31, 2026 or 2025. Other Real Estate Owned ("OREO"). 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 The Company maintains an ACLL and an allowance for credit losses on unfunded commitments ("ACLUC") in accordance with ASC 326: Financial Instruments - Credit Losses . ASC 326 requires the Company to recognize estimates for lifetime credit losses on loans and unfunded loan commitments at the time of origination or acquisition. The recognition of credit losses at origination or acquisition represents the Company’s best estimate of lifetime expected credit losses, given the facts and circumstances associated with a particular loan or group of loans with similar risk characteristics. Determining the ACLL involves the use of significant management judgement and estimates, which are subject to change based on management’s ongoing assessment of the credit quality of the loan portfolio and changes in economic forecasts used in the Bank's Current Expected Credit Loss ("CECL") model. The reserve is an estimate based upon factors and trends at the time the financial statements are prepared. The Company has identified segments of loans with similar risk characteristics for which it then applies one of two loss methodologies. The Company uses a discounted cash flow ("DCF") methodology for most of its segments to calculate the ACLL. For certain segments with smaller portfolios or where data is prohibitive to running a DCF calculation, management has elected to use a Remaining Life methodology. The Company will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. The allowance for individually evaluated loans is calculated using the collateral value method, which considers the likely source of repayment as the value of the collateral, less estimated costs to sell, or another method such as the cash flow method, which considers the contractual principal and interest terms and estimated cash flows available from the borrower to satisfy the debt. When the cash flow method is used, cash flows are discounted back by the effective interest rate and compared to the total recorded investment. If the present value of cash flows is less than the total recorded investment, a reserve is calculated. 18 Table of Contents The following tables detail activity in the allowance for credit losses on loans by class for the periods shown: At or For the Three Months Ended March 31, 2026 (dollars in thousands) Beginning Balance Charge-offs Recoveries (Recapture of) Provision for Credit Losses Ending Balance One-to-four family $ 3,789 $ — $ — $ ( 294 ) $ 3,495 Multi-family 2,458 — — ( 88 ) 2,370 Commercial real estate 3,405 ( 3 ) — 161 3,563 Construction and land 661 ( 171 ) — 385 875 Home equity 1,329 — — ( 43 ) 1,286 Auto and other consumer 1,956 ( 276 ) 50 227 1,957 Commercial business 3,389 ( 133 ) 382 ( 361 ) 3,277 Total $ 16,987 $ ( 583 ) $ 432 $ ( 13 ) $ 16,823 At or For the Three Months Ended March 31, 2025 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provision for (Recapture of) Credit Losses Ending Balance One-to-four family $ 4,757 $ — $ — $ 119 $ 4,876 Multi-family 2,493 — — 152 2,645 Commercial real estate 2,410 ( 5,571 ) 6 5,582 2,427 Construction and land 576 ( 374 ) — 259 461 Home equity 1,322 — — 65 1,387 Auto and other consumer 2,687 ( 243 ) 43 ( 38 ) 2,449 Commercial business 6,204 ( 1,513 ) 2 1,631 6,324 Total $ 20,449 $ ( 7,701 ) $ 51 $ 7,770 $ 20,569 Allowance for Credit Losses on Unfunded Loan Commitments. The Company estimates expected credit losses on unfunded, off-balance sheet commitments over the contractual period in which the Company is exposed to credit risk from a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The Company has determined that no allowance is necessary for its home equity line of credit portfolio as it has the contractual ability to unconditionally cancel the available lines of credit. The allowance methodology is similar to the ACLL, but additionally includes an estimate of the future utilization of the commitment as determined by historical commitment utilization. The credit risks associated with the unfunded commitments are consistent with the risks outlined for each loan class. 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 $ 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: March 31, 2026 December 31, 2025 (dollars in thousands) Amount Weighted-Average Interest Rate Amount Weighted-Average Interest Rate Noninterest-bearing demand deposits $ 238,901 — % $ 245,760 — % Interest-bearing demand deposits 157,565 0.20 143,166 0.19 Money market accounts 449,353 2.11 451,143 2.12 Savings accounts 246,533 1.45 239,258 1.39 Certificates of deposit, customer 445,110 3.60 433,264 3.63 Certificates of deposit, brokered 64,120 4.20 86,510 4.22 Total deposits $ 1,601,582 2.00 $ 1,599,101 2.04 19 Table of Contents 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: (dollars in thousands) March 31, 2026 December 31, 2025 Within one year or less $ 462,799 $ 450,819 After one year through two years 38,464 59,588 After two years through three years 4,310 5,483 After three years through four years 1,457 2,211 After four years through five years 2,200 1,673 Total certificates of deposit $ 509,230 $ 519,774 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 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 March 31, (dollars in thousands) 2026 2025 Demand deposits $ 72 $ 260 Money market accounts 2,343 2,345 Savings accounts 871 783 Certificates of deposit, customer 3,892 4,522 Certificates of deposit, brokered 752 1,827 Total interest expense on deposits $ 7,930 $ 9,737 Note 6 - Borrowings First Fed is a member of the FHLB. As a member, First Fed has a committed line of credit of up to 25 % of total assets, subject to the amount of FHLB stock ownership and certain collateral requirements. First Fed maintains borrowing arrangements with the FHLB to borrow funds primarily under long-term, fixed-rate advance agreements. First Fed also has overnight borrowings through FHLB which renew daily until paid. First Fed periodically uses fixed-rate advances maturing in less than one year as an alternative source of funds. 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. 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 both March 31, 2026 and December 31, 2025 . 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 $ 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. 20 Table of Contents 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. The net proceeds to the Company from the sale of the Notes were approximately $ 39.3 million after deducting placement agent fees and other offering expenses. The Notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. The Company used the net proceeds of the offering for general corporate purposes. Beginning in April 2026, the interest rate on the Notes will reset quarterly to the three -month Secured Overnight Financing Rate plus 300 basis points. In March 2025, the Company 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 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 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 . In October 2023, Pacific Coast Bankers Bank ("PCBB") extended a $ 50.0 million unsecured Fed Funds Borrowing Facility to the Bank. The Bank must maintain a minimum demand deposit account average balance of $ 250,000 with PCBB. Availability of funds are not guaranteed and facility usage is generally limited to ten consecutive days. Available borrowing capacity was $ 50.0 million at both 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 FHLB Overnight Variable-Rate Advances NexBank Line of Credit Subordinated Debt, net Balance outstanding $ 130,000 $ 150,000 $ 13,500 $ 34,660 Weighted-average daily interest rates Annualized 4.05 % 3.87 % 7.15 % 4.04 % Period End 4.06 % 3.88 % 7.25 % 4.04 % 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) Amount Weighted- Average Interest Rate Within one year or less $ 70,000 4.04 % After one year through two years 35,000 3.78 After two years through three years 25,000 4.50 Total FHLB long-term advances $ 130,000 4.06 Note 7 - Income Tax Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. These calculations are based on many complex factors including estimates of the timing of reversals of temporary differences, the interpretation of federal income tax laws, and a determination of the differences between the tax and the financial reporting basis of assets and liabilities. Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax assets and liabilities. 21 Table of Contents 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. Available tax planning strategies support the realization of the net deferred tax asset; furthermore, management has concluded that all deferred tax assets are realizable individually. Note 8 - Earnings (Loss) per Common Share The two -class method is used for computing basic and diluted earnings per share. Under the two -class method, EPS is determined for each class of common stock and participating security according to dividends declared and participating rights in undistributed earnings. The Company has issued restricted shares under share-based compensation plans which qualify as participating securities. The following table presents a reconciliation of the components used to compute basic and diluted earnings per share for the periods shown: Three Months Ended March 31, (dollars in thousands, except share data) 2026 2025 Net income (loss): Net income (loss) available to common shareholders $ 6 $ ( 9,036 ) Dividends and undistributed earnings allocated to participating securities — — Earnings (loss) allocated to common shareholders $ 6 $ ( 9,036 ) Basic: Weighted average common shares outstanding 9,468,679 9,380,951 Weighted average unvested restricted stock awards ( 153,793 ) ( 112,987 ) Weighted average unallocated ESOP shares ( 467,677 ) ( 520,542 ) Total basic weighted average common shares outstanding 8,847,209 8,747,422 Diluted: Basic weighted average common shares outstanding 8,847,209 8,747,422 Dilutive restricted stock awards 47,789 — Total diluted weighted average common shares outstanding 8,894,998 8,747,422 Basic earnings (loss) per common share $ — $ ( 1.03 ) Diluted earnings (loss) per common share $ — $ ( 1.03 ) Potentially dilutive shares are excluded from the computation of EPS if their effect is anti-dilutive. At March 31, 2026 and 2025 , antidilutive shares as calculated under the treasury stock method totaled 872 and 28,364 , respectively. 22 Table of Contents Note 9 - Employee Benefits Employee Stock Ownership Plan In connection with the Conversion, the Company established an ESOP for eligible employees of the Company and the Bank. Employees of the Company and the Bank who have been credited with at least 1,000 hours of service during a 12 -month period are eligible to participate in the ESOP. Pursuant to the Plan, the ESOP purchased shares in the open market with funds borrowed from First Northwest. The Bank will make contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to First Northwest over a period of 20 years, bearing estimated interest at 2.46 %. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Bank's discretionary contributions to the ESOP and earnings on the ESOP assets. No principal 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. The compensation expense is accrued monthly throughout the year. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as a reduction of debt and accrued interest. Compensation expense related to the ESOP for the three months ended March 31, 2026 and 2025 , was $ 127,000 and $ 140,000 , respectively. Shares issued to the ESOP as of the dates indicated are as follows: (dollars in thousands, except share data) March 31, 2026 December 31, 2025 Allocated shares 545,097 545,097 Committed to be released shares 39,663 26,442 Unallocated shares 463,269 476,490 Total ESOP shares issued 1,048,029 1,048,029 Fair value of unallocated shares $ 4,021 $ 4,469 Note 10 - Stock-based Compensation In May 2020, the Company's shareholders approved the First Northwest Bancorp 2020 Equity Incentive Plan ( "2020 EIP"), which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock shares or restricted stock units, and performance share awards to eligible participants through May 2030. The cost of awards under the 2020 EIP generally is based on the fair value of the awards on their grant date. The maximum number of shares that may be utilized for awards under the 2020 EIP is 520,000 . 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 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. 23 Table of Contents 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 Shares Weighted-Average Grant Date Fair Value Non-vested at January 1, 2026 162,097 $ 9.53 Granted 49,146 9.19 Vested ( 25,785 ) 11.12 Canceled (1) ( 1,862 ) 11.12 Forfeited ( 15,909 ) 11.90 Non-vested at March 31, 2026 167,687 8.95 (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. 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. Note 11 - Fair Value Measurements Fair value is the price to sell an asset or transfer a liability in an orderly transaction between market participants in the Company’s principal market. The Company has established and documented its process for determining the fair values of its assets and liabilities, where applicable. Fair value is based on quoted market prices, when available, for identical or similar assets or liabilities. In the absence of quoted market prices, management determines the fair value of the Company’s assets and liabilities using valuation models or third -party pricing services, both of which rely on market-based parameters when available, such as interest rate yield curves, option volatilities and credit spreads, or unobservable inputs. Unobservable inputs may be based on management’s judgment, assumptions, and estimates related to credit quality, liquidity, interest rates, and other relevant inputs. Any changes to valuation methodologies are reviewed by management to ensure they are relevant and justified. Valuation methodologies are refined as more market-based data becomes available. 24 Table of Contents A three -level valuation hierarchy is used in determining fair value that is based on the transparency of the inputs used in the valuation process. The inputs used in determining fair value in each of the three levels of the hierarchy are as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 - Either: (i) quoted prices for similar assets or liabilities; (ii) observable inputs, such as interest rates or yield curves; or (iii) inputs derived principally from or corroborated by observable market data. Level 3 - Unobservable inputs. The hierarchy gives the highest ranking to Level 1 inputs and the lowest ranking to Level 3 inputs. The level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the overall fair value measurement. The Company used the following methods to measure fair value on a recurring and nonrecurring basis. Securities available for sale : Where quoted prices are available in an active market, securities are classified as Level 1. Level 1 instruments include highly liquid government bonds, securities issued by the U.S. Treasury, and exchange-traded equity securities. If quoted prices are not available, management determines fair value using pricing models, quoted prices of similar securities, which are considered Level 2, or discounted cash flows. In certain cases, where there is limited activity in the market for an instrument, assumptions must be made to determine their fair value. Such instruments are classified as Level 3. Sold loan servicing rights, at fair value : The fair value of sold loan servicing rights is determined through a discounted cash flow analysis, which uses interest rates, prepayment speeds, discount rates, and delinquency rate assumptions as inputs. Servicing rights are classified as Level 3 due to reliance on assumptions used in the valuation. Interest rate swap derivative : The fair values of interest rate swap agreements are based on valuation models using observable market data as of the measurement date (Level 2 ). The Company’s securities derivatives are traded in an over-the-counter market where quoted market prices are not always available. The Company also entered into pay-fixed and receive-floating interest rate swaps associated with certain fixed rate loans. The fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including market transactions and third -party pricing services. The fair values of all interest rate swaps are determined from third -party pricing services without adjustment. Assets and liabilities measured at fair value on a recurring basis - Assets and liabilities are considered to be valued on a recurring basis if fair value is measured regularly (i.e., daily, weekly, monthly, or quarterly). The following tables show the Company’s assets and liabilities measured at fair value on a recurring basis at the dates indicated: March 31, 2026 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs (dollars in thousands) (Level 1) (Level 2) (Level 3) Total Financial Assets Securities available-for-sale Municipal bonds $ 11,884 $ 67,681 $ — $ 79,565 ABS agency — 11,632 — 11,632 ABS corporate — 7,676 — 7,676 Corporate debt 1,965 35,427 — 37,392 SBA — 5,820 — 5,820 MBS agency — 97,968 — 97,968 MBS non-agency — 26,349 6,583 32,932 Sold loan servicing rights — — 2,999 2,999 Total assets measured at fair value $ 13,849 $ 252,553 $ 9,582 $ 275,984 Financial Liabilities Interest rate swap derivative $ — $ 871 $ — $ 871 25 Table of Contents December 31, 2025 Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Other Observable Inputs Significant Unobservable Inputs (dollars in thousands) (Level 1) (Level 2) (Level 3) Total Financial Assets Securities available-for-sale Municipal bonds $ 11,908 $ 68,344 $ — $ 80,252 ABS agency — 11,943 — 11,943 ABS corporate — 7,961 — 7,961 Corporate debt 1,977 36,824 — 38,801 SBA — 6,293 — 6,293 MBS agency — 91,656 — 91,656 MBS non-agency — 26,805 6,599 33,404 Sold loan servicing rights — — 3,014 3,014 Total assets measured at fair value $ 13,885 $ 249,826 $ 9,613 $ 273,324 Financial Liabilities Interest rate swap derivative $ — $ 1,703 $ — $ 1,703 The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at the dates indicated: March 31, 2026 Fair Value (dollars in thousands) Valuation Technique Unobservable Input (1) Range (Weighted Average) Sold loan servicing rights $ 2,999 Discounted cash flow Constant prepayment rate 3.42% - 30.45% (5.42%) Discount rate 10.63% - 14.38% (11.25%) MBS non-agency $ 6,583 Consensus pricing Offered quotes 98.3 - 100.2 (1) Unobservable inputs were weighted by the relative fair value of the instruments. December 31, 2025 Fair Value (dollars in thousands) Valuation Technique Unobservable Input (1) Range (Weighted Average) Sold loan servicing rights $ 3,014 Discounted cash flow Constant prepayment rate 4.31% - 31.02% (5.88%) Discount rate 10.38% - 12.52% (10.99%) MBS non-agency $ 6,599 Consensus pricing Offered quotes 99.0 - 100.4 (1) Unobservable inputs were weighted by the relative fair value of the instruments. The following tables summarize the changes in Level 3 assets measured at fair value on a recurring basis, at the dates indicated: As of or For the Three Months Ended March 31, (dollars in thousands) 2026 2025 Sold loan servicing rights: Balance at beginning of period $ 3,014 $ 3,281 Servicing rights that result from transfers and sale of financial assets 3 11 Changes in fair value due to changes in model inputs or assumptions (1) ( 18 ) 9 Balance at end of period $ 2,999 $ 3,301 (1) Represents changes due to collection/realization of expected cash flows and curtailments. 26 Table of Contents As of or For the Three Months Ended March 31, (dollars in thousands) 2026 2025 Securities available for sale: MBS non-agency Balance at beginning of period $ 6,599 $ 31,881 Principal payments and maturities — ( 13,424 ) Unrealized (Losses) Gains ( 16 ) 86 Balance at end of period $ 6,583 $ 18,543 Assets and liabilities measured at fair value on a nonrecurring basis - Assets are considered to be valued on a nonrecurring basis if the fair value measurement of the instrument does not necessarily result in a change in the amount recorded on the consolidated balance sheets. Generally, nonrecurring valuation is the result of the application of other accounting pronouncements that require assets or liabilities to be assessed for impairment or recorded at the lower of cost or fair value. The following tables present the Company’s assets measured at fair value on a nonrecurring basis at the dates indicated: March 31, 2026 (dollars in thousands) Level 1 Level 2 Level 3 Total Individually evaluated collateral-dependent loans $ — $ — $ 37,479 $ 37,479 Other real estate owned — — 1,380 1,380 December 31, 2025 (dollars in thousands) Level 1 Level 2 Level 3 Total Individually evaluated collateral-dependent loans $ — $ — $ 25,582 $ 25,582 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: March 31, 2026 Fair Value Measurements Using: (dollars in thousands) Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 104,136 $ 104,136 $ 104,136 $ — $ — Investment securities available for sale 272,985 272,985 13,849 252,553 6,583 Loans held for sale 1,140 1,140 — 1,140 — Loans receivable, net 1,612,979 1,512,743 — — 1,512,743 FHLB stock 13,927 13,927 — 13,927 — Accrued interest receivable 7,051 7,051 — 7,051 — Sold loan servicing rights, at fair value 2,999 2,999 — — 2,999 Financial liabilities Demand deposits $ 1,092,352 $ 1,092,352 $ 1,092,352 $ — $ — Time deposits 509,230 508,757 — — 508,757 FHLB Borrowings 280,000 279,950 — — 279,950 Line of Credit 13,500 13,592 — — 13,592 Subordinated debt, net 34,660 35,882 — — 35,882 Accrued interest payable 280 280 — 280 — Interest rate swap derivative 871 871 — 871 — 27 Table of Contents December 31, 2025 Fair Value Measurements Using: (dollars in thousands) Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 85,117 $ 85,117 $ 85,117 $ — $ — Investment securities available for sale 270,310 270,310 13,885 249,826 6,599 Loans held for sale 1,063 1,063 — 1,063 — Loans receivable, net 1,612,028 1,504,219 — — 1,504,219 FHLB stock 13,105 13,105 — 13,105 — Accrued interest receivable 6,498 6,498 — 6,498 — Sold loan servicing rights, at fair value 3,014 3,014 — — 3,014 Financial liabilities Demand deposits 1,079,327 $ 1,079,327 $ 1,079,327 $ — $ — Time deposits 519,774 520,033 — — 520,033 FHLB Borrowings 260,000 260,510 — — 260,510 Line of Credit 13,500 13,589 — — 13,589 Subordinated debt, net 34,643 35,973 — — 35,973 Accrued interest payable 1,223 1,223 — 1,223 — Interest rate swap derivative 1,703 1,703 — 1,703 — Note 12 - Change in Accumulated Other Comprehensive Income ("AOCI") Our AOCI includes unrealized gains (losses) on available-for-sale securities, defined benefit plan assets and derivatives as well as an unrecognized defined benefit plan prior service cost. The following table presents changes to accumulated other comprehensive income after-tax for the periods shown: (dollars in thousands) 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 Losses on Fair Value of Hedged Items Total 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) 2,439 — 29 ( 425 ) 2,043 Balance at March 31, 2025 $ ( 25,771 ) $ ( 486 ) $ ( 1,274 ) $ ( 598 ) $ ( 28,129 ) Balance at December 31, 2025 $ ( 20,058 ) $ ( 387 ) $ ( 1,184 ) $ ( 769 ) $ ( 22,398 ) Other comprehensive loss before reclassification ( 846 ) — — — ( 846 ) Amounts reclassified from accumulated other comprehensive income — — 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 ) 28 Table of Contents Note 13 - Derivatives and Hedging Activities The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Fair Value Hedges of Interest Rate Risk The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreement without the exchange of the underlying notional amount. 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 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: March 31, 2026 Investment securities (1) $ 50,603 $ 603 Loans receivable (2) 97,020 406 Total $ 147,623 $ 1,009 December 31, 2025 Investment securities (1) $ 50,980 $ 980 Loans receivable (2) 100,903 903 Total $ 151,883 $ 1,883 ( 1 ) These amounts include the amortized cost basis of a closed portfolio of AFS securities used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At March 31, 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 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 $ 96.6 million and $ 100.0 million, respectively. 29 Table of Contents 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: Fair Value (dollars in thousands) Notional Amount Other Assets Other Liabilities March 31, 2026 Fair value hedges: Interest rate swaps - securities $ 50,000 $ — $ 490 Interest rate swaps - loans 96,614 — 381 December 31, 2025 Fair value hedges: Interest rate swaps - securities $ 50,000 $ — $ 860 Interest rate swaps - loans 100,000 — 843 The following table summarizes the effect of fair value accounting on the Consolidated Statements of Operations for the periods shown: Three Months Ended March 31, (dollars in thousands) 2026 2025 Total amounts recognized in interest on investment securities $ 2,585 $ 3,803 Total amounts recognized in interest and fees on loans receivable 22,000 22,231 Net gains (losses) on fair value hedging relationships Interest rate swaps - securities Recognized on hedged items $ 377 $ ( 541 ) Recognized on derivatives designated as hedging instruments ( 375 ) 531 Interest rate swaps - loans Recognized on hedged items 497 ( 754 ) Recognized on derivatives designated as hedging instruments ( 478 ) 757 Net income (expense) recognized on fair value hedges $ 21 $ ( 7 ) Credit Risk-related Contingent Features The Company is exposed to credit-related losses in the event of nonperformance by counterparties to hedging instruments. The counterparties to all derivative transactions are major financial institutions with investment grade credit ratings. However, this does not eliminate the Company’s exposure to credit risk with these institutions. This credit risk is limited to the unrealized gains in such contracts should any of these counterparties fail to perform as contracted. The Company has interest rate swap agreements with its derivative counterparties that contain provisions where if the Company either defaults or fails to maintain its status as a well or adequately capitalized institution, then the Company could be required to terminate the contract or post additional collateral. At March 31, 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 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. Note 14 - Segment Reporting First Fed is engaged in the business of attracting deposits and providing lending services. Substantially all income is derived from a diverse base of commercial, mortgage, and consumer lending activities and investments. The Company’s activities are considered to be a single industry segment for financial reporting purposes. The chief operating decision maker ("CODM") is comprised of the chief executive officer and the chief financial officer. 30 Table of Contents The accounting policies of the Bank are the same as those described in the summary of significant accounting policies in Note 1 of the Company's Annual Report on Form 10 -K for the year ended December 31, 2025 (" 2025 Form 10 -K"). The CODM assesses performance for the Bank and decides how to allocate resources based on net income that is reported on the income statement as consolidated net income. The measurement of segment assets is reported on the balance sheet as total consolidated assets. The CODM uses net income to evaluate income generated from the segment assets (return on assets) in deciding whether to reinvest profits into the Bank or into other parts of the entity, such as to pay dividends or a share repurchase plan. Net income is used to monitor budget versus actual results and assess the performance of the Bank. The Company generates revenue from interest income, fee income and other noninterest income from investments and services. All operations are based in Washington State. No single customer accounts for more than 10% of total revenue. 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. For these claims, the Company establishes a liability for contingent losses when it is probable that a loss has been incurred and the amount of loss can be reasonably estimated. For claims determined to be reasonably possible but not probable of resulting in a loss, 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. 3|5|2 Capital Litigation 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. The 3|5|2 Complaint asserts claims against the Bank for aiding and abetting the alleged fraud, conspiracy to commit fraud, unjust enrichment, and constructive trust, and seeks various forms of relief, including not less than $ 106.9 million in compensatory damages plus interest, unspecified punitive damages, and attorneys' fees and costs. The Company strongly disputes the allegations contained in the 3|5|2 Complaint and is vigorously defending against the claims. 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. 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. 31 Table of Contents