What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 290 added, 200 removed, 1224 unchanged (29% of the section changed)

3 unchanged sentences

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

March 31, 2026

June 30, 2026

December 31, 2025

60 unchanged sentences

Three Months Ended

Six Months Ended

INTEREST INCOME

9 unchanged sentences

(Recapture of) provision for credit losses on loans

Provision for credit losses on unfunded commitments

Provision for credit losses

Net interest income after provision for credit losses

Recapture of provision for credit losses on unfunded commitments

(Recapture of) provision for credit losses

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

NONINTEREST INCOME

16 unchanged sentences

Total noninterest expense

Loss before benefit from income taxes

Benefit from income taxes

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

Provision for (benefit from) income taxes

Net income (loss)

2 unchanged sentences

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands) (Unaudited)

Three Months Ended March 31,

Three Months Ended June 30,

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

Other comprehensive income (loss), net of tax

Comprehensive income

For the Six Months Ended June 30,

Net income (loss)

$ 6 $ ( 9,036 )

Other comprehensive loss:

Other comprehensive income (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

Other comprehensive income, net of tax

Comprehensive income (loss)

See selected notes to the consolidated financial statements.

FIRST NORTHWEST BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Three Months Ended June 30, 2026 and 2025

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

Additional Paid-in

Unearned ESOP

Accumulated Other Comprehensive Loss,

Total Shareholders'

Balance at March 31, 2025

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

Other comprehensive (loss) income, net of tax

Restricted stock award grants, net of forfeitures

Restricted stock awards canceled

( 2,316 ) — ( 23 ) ( 23 )

Comprehensive loss

Other comprehensive loss, net of tax

( 69 ) ( 69 )

Share-based compensation expense

ESOP shares committed to be released

( 43 ) 165 122

Cash dividends declared ($ 0.07 per share)

( 661 ) ( 661 )

Balance at June 30, 2025

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

Balance at March 31, 2026

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

Restricted stock award grants, net of forfeitures

Restricted stock awards canceled

( 1,859 ) — ( 19 ) ( 19 )

Other comprehensive income, net of tax

Share-based compensation expense

ESOP shares committed to be released

( 32 ) 164 132

Balance at June 30, 2026

9,504,441 $ 95 $ 93,986 $ 92,015 $ ( 5,606 ) $ ( 22,177 ) $ 158,313

See selected notes to the consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the Three Months Ended March 31, 2026 and 2025

For the Six Months Ended June 30, 2026 and 2025

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

7 unchanged sentences

Restricted stock award grants, net of forfeitures

101,210 1 — 1

Restricted stock awards canceled

6 unchanged sentences

( 1,317 ) ( 1,317 )

Balance at March 31, 2025

Balance at June 30, 2025

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

4 unchanged sentences

( 3,721 ) — ( 36 ) ( 36 )

Other comprehensive loss, net of tax

( 522 ) ( 522 )

Other comprehensive income, net of tax

Share-based compensation expense

2 unchanged sentences

Canceled dividends payable on forfeited unvested restricted stock awards

Balance at March 31, 2026

Balance at June 30, 2026

9,504,441 $ 95 $ 93,986 $ 92,015 $ ( 5,606 ) $ ( 22,177 ) $ 158,313

3 unchanged sentences

(Dollars in thousands) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization of fixed assets

Amortization of core deposit intangible

Amortization and accretion of premiums and discounts on investments, net

5 unchanged sentences

(Recapture of) provision for credit losses on loans

Provision for credit losses on unfunded commitments

Recapture of provision for credit losses on unfunded commitments

Allocation of ESOP shares

1 unchanged sentence

Gain on sale of loans, net

Gain on sale of real estate owned

Write-down on real estate owned

Gain on extinguishment of subordinated debt

13 unchanged sentences

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

(Purchase) redemption of FHLB stock

Purchase of FHLB stock

Early surrender of BOLI policies

Purchase of BOLI policies

Proceeds from BOLI death benefit

1 unchanged sentence

Decrease in loans receivable, net

Purchase of premises and equipment

Net (purchase) sale of premises and equipment

Capital contributions to partnership investments

2 unchanged sentences

Capital contributions to low-income housing tax credit partnerships

Proceeds from sale of real estate owned

Net cash (used) provided by investing activities

3 unchanged sentences

(Dollars in thousands) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities:

2 unchanged sentences

Repayment of long-term FHLB advances

Net increase (decrease) in short-term FHLB advances

Net increase in short-term FHLB advances

Redemption of subordinated debt, net

Net increase in line of credit

Net increase in advances from borrowers for taxes and insurance

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

Payment of dividends

1 unchanged sentence

Net cash provided (used) by financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

2 unchanged sentences

Cash paid for interest on deposits and borrowings

Cash paid for income taxes

Supplemental disclosures of noncash investing activities:

2 unchanged sentences

Amortization of unrecognized DB plan prior service cost

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

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

Lease liabilities arising from obtaining right-of-use assets

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

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

Series A equity investment acquired upon conversion of commercial business loan

16 unchanged sentences

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

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

Operating results for the three and six months ended June 30, 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.

32 unchanged sentences

Note 2 - Securities

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

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities classified as available-for-sale at June 30, 2026 are summarized as follows:

(dollars in thousands)

44 unchanged sentences

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

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.

There were no securities classified as held-to-maturity at June 30, 2026 and December 31, 2025 .

There was no allowance for credit losses on investment securities recorded at June 30, 2026 and December 31, 2025 , based on analysis performed by the Company.

Accrued interest receivable on available-for-sale debt securities totaled $ 1.6 million and $ 1.5 million as of June 30, 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

8 unchanged sentences

— — ( 22 ) 2,463 ( 22 ) 2,463

ABS corporate

— — ( 3 ) 1,666 ( 3 ) 1,666

Corporate debt

33 unchanged sentences

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 .

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

March 31, 2026

June 30, 2026

December 31, 2025

34 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 $ 22.1 million as of March 31, 2026 and $ 21.5 million as of December 31, 2025 .

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 $ 22.7 million as of June 30, 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.

Accrued interest receivable on loans was $ 5.6 million as of June 30, 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

June 30, 2026

December 31, 2025

31 unchanged sentences

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

March 31, 2026

June 30, 2026

December 31, 2025

19 unchanged sentences

$ 613 $ 20,115 $ 20,728 $ 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.

Interest income recognized on a cash basis on nonaccrual loans for the three months ended June 30, 2026 and 2025 , was $ 33,000 and $ 24,000 , respectively.

Interest income recognized on a cash basis on nonaccrual loans for the six months ended June 30, 2026 and 2025 , was $ 166,000 and $ 32,000 , 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 .

There were no loans past due 90 days or more and still accruing interest at June 30, 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 June 30, 2026 .

90 Days or More

50 unchanged sentences

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

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

The following table presents the amortized cost of loans receivable by internally assigned risk grade and class of loans as of June 30, 2026 , as well as gross charge-off activity for the six months ended June 30, 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.

20 unchanged sentences

— 4,534 — — — — — 4,534

Substandard (Grade 6)

— — — — 4,704 — — 4,704

Total multi-family

18 unchanged sentences

15,255 27,971 11,653 262 769 1,623 — 57,533

Watch (Grade 4)

426 — — — — — — 426

Substandard (Grade 6)

8 unchanged sentences

— 186 115 — 23 157 187 668

Special Mention (Grade 5)

— — — — — — 53 53

Substandard (Grade 6)

153 unchanged sentences

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

As of March 31, 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 June 30, 2026 , $ 23.9 million of loans were individually evaluated with $ 173,000 of ACLL attributed to such loans.

At June 30, 2026 , two individually evaluated loans with recorded investments totaling $ 379,000 were evaluated using a discounted cash flow approach and the remaining loans totaling $ 23.5 million were evaluated based on the underlying value of the collateral.

One $ 4.5 million multi-family loan was accruing interest at quarter end, while all other individually evaluated loans were on nonaccrual status at June 30, 2026 .

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

3 unchanged sentences

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 .

The following table summarizes individually evaluated collateral dependent loans by segment and collateral type as of June 30, 2026 .

Collateral Type

10 unchanged sentences

— 4,160 — — — — — 4,160

106 — — — — — — 106

Auto and other consumer

28 unchanged sentences

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.

There were no new MLTB during the six months ended June 30, 2026 .

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

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

This commercial construction loan subsequently converted to an amortizing multi-family loan and was in compliance with the modified terms at June 30, 2026.

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.

The Company held $ 1.6 million and $ 1.4 million at June 30, 2026 , and December 31, 2025 , respectively, of OREO secured by residential real estate properties included in "prepaid expenses and other assets" on the Consolidated Balance Sheets.

Note 4 - Allowance for Credit Losses on Loans

The Company maintains an ACLL and an 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.

5 unchanged sentences

If the present value of cash flows is less than the total recorded investment, a reserve is calculated.

The reserve is an estimate based upon factors and trends at the time the financial statements are prepared.

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

At or For the Three Months Ended June 30, 2026

(dollars in thousands)

15 unchanged sentences

$ 16,823 $ ( 359 ) $ 182 $ ( 337 ) $ 16,309

At or For the Three Months Ended March 31, 2025

At or For the Six Months Ended June 30, 2026

(dollars in thousands)

Beginning Balance

(Recapture of) Provision for Credit Losses

Ending Balance

One-to-four family

$ 3,789 $ — $ — $ ( 322 ) $ 3,467

2,458 — — ( 262 ) 2,196

Commercial real estate

3,405 ( 3 ) — ( 355 ) 3,047

Construction and land

661 ( 371 ) — 571 861

1,329 — — 111 1,440

Auto and other consumer

1,956 ( 401 ) 159 255 1,969

Commercial business

3,389 ( 167 ) 455 ( 348 ) 3,329

$ 16,987 $ ( 942 ) $ 614 $ ( 350 ) $ 16,309

At or For the Three Months Ended June 30, 2025

(dollars in thousands)

Beginning Balance

Provision for (Recapture of) Credit Losses

13 unchanged sentences

$ 20,569 $ ( 3,111 ) $ 1,183 $ ( 296 ) $ 18,345

At or For the Six Months Ended June 30, 2025

(dollars in thousands)

Beginning Balance

Provision for (Recapture of) Credit Losses

Ending Balance

One-to-four family

$ 4,757 $ — $ — $ 131 $ 4,888

2,493 — — 140 2,633

Commercial real estate

2,410 ( 5,586 ) 26 5,612 2,462

Construction and land

576 ( 374 ) 5 292 499

1,322 — — 119 1,441

Auto and other consumer

2,687 ( 516 ) 117 ( 20 ) 2,268

Commercial business

6,204 ( 4,336 ) 1,086 1,200 4,154

$ 20,449 $ ( 10,812 ) $ 1,234 $ 7,474 $ 18,345

Allowance for Credit Losses on Unfunded Loan Commitments.

1 unchanged sentence

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 allowance methodology is similar to the ACLL, but includes an additional 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.

The allowance for unfunded commitments was $ 483,000 and $ 594,000 at June 30, 2026 , and December 31, 2025 , respectively.

The related provision recapture was $ 112,000 and $ 49,000 for the six months ended June 30, 2026 and June 30, 2025 , respectively.

Note 5 - Deposits

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

March 31, 2026

June 30, 2026

December 31, 2025

16 unchanged sentences

$ 1,607,392 2.03 $ 1,599,101 2.04

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.

The aggregate amount of time deposits issued in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit, currently $250,000, at June 30, 2026 and December 31, 2025 , was $ 175.5 million and $ 164.2 million, respectively.

Maturities of certificates at the dates indicated are as follows:

(dollars in thousands)

March 31, 2026

June 30, 2026

December 31, 2025

8 unchanged sentences

$ 511,755 $ 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.

At June 30, 2026 and December 31, 2025 , deposits included $ 121.3 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 $ 72.0 million at June 30, 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.

Also included in deposits at June 30, 2026 and December 31, 2025 , were funds held by federally recognized tribes totaling $ 29.0 million and $ 31.3 million, respectively.

Investment securities with a carrying value of $ 32.9 million and $ 40.7 million were pledged as collateral for these deposits at June 30, 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,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

Demand deposits

$ 83 $ 240 $ 155 $ 500

Money market accounts

2,451 2,660 4,794 5,005

Savings accounts

921 884 1,792 1,667

Certificates of deposit, customer

4,024 4,396 7,916 8,918

Certificates of deposit, brokered

554 1,372 1,306 3,199

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 $ 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 .

Available borrowing capacity was $ 157.7 million and $ 204.4 million at June 30, 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 $ 832.2 million and $ 871.3 million at June 30, 2026 and December 31, 2025 , respectively.

The Bank had outstanding letters of credit from the FHLB with notional amounts of $ 72.0 million to collateralize public deposits, $ 17.3 million to collateralize assumable rate conversion (ARC) loans and $ 772,000 to secure the Bellevue, Washington branch lease at both June 30, 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.

Available borrowing capacity was $ 16.7 million and $ 17.3 million at June 30, 2026 and December 31, 2025 , respectively.

Investment securities with a carrying value of $ 17.3 million and $ 18.0 million were pledged to the FRB at June 30, 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.

2 unchanged sentences

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.

Beginning in March 2026, the Notes bear interest at a variable rate that resets quarterly on the 30th day of March, June, September and December based on the three -month Secured Overnight Financing Rate in effect on the applicable reset date, plus 300 basis points.

Accordingly, the interest rate on the Notes increased from 3.75 % to 6.69 % on March 30, 2026, and increased to 6.73 % on June 30, 2026.

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

1 unchanged sentence

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 Company was in compliance with all covenants at June 30, 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 June 30, 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 March 31, 2026 and December 31, 2025 .

Available borrowing capacity was $ 50.0 million at both June 30, 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 following table presents information regarding our borrowings as of June 30, 2026 .

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

9 unchanged sentences

3.88 % 3.92 % 7.25 % 5.59 %

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:

The amounts by year of maturity and weighted-average interest rate of FHLB long-term, fixed-rate advances at June 30, 2026 are as follows:

(dollars in thousands)

3 unchanged sentences

After one year through two years

After two years through three years

Total FHLB long-term advances

7 unchanged sentences

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.

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

Included in the benefit from income tax for the first half 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 against the net deferred tax asset.

Based on its evaluation of cumulative earnings, including other comprehensive income, available tax planning strategies, projected future earnings and other relevant evidence regarding realizability, management concluded that it is more likely than not that the net deferred tax asset will be realized.

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 March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands, except share data)

16 unchanged sentences

Dilutive restricted stock awards

49,999 8,443 47,911 —

Total diluted weighted average common shares outstanding

5 unchanged sentences

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.

At June 30, 2026 and 2025 , antidilutive shares as calculated under the treasury stock method totaled 3,774 and 23,270 , 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.

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

Principal and interest payments of $ 835,000 were made by the ESOP during the second quarter of both 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 March 31, 2026 and 2025 , was $ 127,000 and $ 140,000 , respectively.

Compensation expense related to the ESOP for the three months ended June 30, 2026 and 2025 , was $ 132,000 and $ 122,000 , respectively.

Compensation expense related to the ESOP for the six months ended June 30, 2026 and 2025 , was $ 259,000 and $ 262,000 , respectively.

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

(dollars in thousands, except share data)

March 31, 2026

June 30, 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

1 unchanged sentence

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 .

In May 2026, shareholders approved the First Northwest Bancorp Amended and Restated 2020 Equity Incentive Plan ("Amended 2020 EIP"), which increased the maximum number of shares that may be utilized for awards from 520,000 to 820,000 shares.

As of June 30, 2026 , there were 355,552 total shares available for grant under the Amended 2020 EIP, all of which are available to be granted as restricted shares, performance shares, options or stock appreciation rights.

The Amended 2020 EIP will terminate in May 2036.

There were 40,101 and 73,337 shares of restricted stock awarded, respectively, during the six months ended June 30, 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 .

In addition, there were 16,045 and 33,251 performance shares awarded, respectively, during the six months ended June 30, 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 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

For the three months ended June 30, 2026 and 2025 , total compensation expense for the equity incentive plans was $ 183,000 and $ 211,000 , respectively.

Included in the compensation expense for the three months ended June 30, 2026 and 2025 , was directors' equity compensation of $ 59,000 and $ 65,000 , respectively.

For the six months ended June 30, 2026 and 2025 , total compensation expense for the equity incentive plans was $ 289,000 and $ 405,000 , respectively.

Included in the compensation expense for the six months ended June 30, 2026 and 2025 , was directors' equity compensation of $ 116,000 and $ 121,000 , respectively.

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

Three Months Ended June 30, 2026

Weighted-Average Grant Date Fair Value

Non-vested at April 1, 2026

167,687 $ 8.95

( 5,923 ) 10.29

( 1,859 ) 10.29

Non-vested at June 30, 2026

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

The surrendered shares are canceled and are unavailable for reissue.

Six Months Ended June 30, 2026

Weighted-Average Grant Date Fair Value

Non-vested at January 1, 2026

3 unchanged sentences

( 15,909 ) 11.90

Non-vested at March 31, 2026

Non-vested at June 30, 2026

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.

As of June 30, 2026 , there was $ 1.1 million of total unrecognized compensation cost related to non-vested shares granted as restricted stock and performance share awards.

The cost is expected to be recognized over the remaining weighted-average vesting period of approximately 2.0 years.

25 unchanged sentences

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 on sold loan, at fair value :

The fair value of servicing rights on sold loans 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.

9 unchanged sentences

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

June 30, 2026

Quoted Prices in Active Markets for Identical Assets or Liabilities

5 unchanged sentences

Municipal bonds

$ 11,884 $ 67,681 $ — $ 79,565

— 11,632 — 11,632

ABS corporate

— 7,676 — 7,676

Corporate debt

1,965 35,427 — 37,392

— 5,820 — 5,820

— 97,968 — 97,968

MBS non-agency

— 26,349 6,583 32,932

Sold loan servicing rights

— — 2,999 2,999

Servicing rights on sold loans

Interest rate swap derivative - loans

Total assets measured at fair value

$ 13,849 $ 252,553 $ 9,582 $ 275,984

Financial Liabilities

Interest rate swap derivative

$ — $ 871 $ — $ 871

Interest rate swap derivative - securities

December 31, 2025

6 unchanged sentences

Municipal bonds

$ 11,908 $ 68,344 $ — $ 80,252

— 11,943 — 11,943

ABS corporate

— 7,961 — 7,961

Corporate debt

1,977 36,824 — 38,801

— 6,293 — 6,293

— 91,656 — 91,656

MBS non-agency

— 26,805 6,599 33,404

Sold loan servicing rights

— — 3,014 3,014

Servicing rights on sold loans

Total assets measured at fair value

$ 13,885 $ 249,826 $ 9,613 $ 273,324

Financial Liabilities

Interest rate swap derivative

$ — $ 1,703 $ — $ 1,703

Interest rate swap derivative - securities and loans

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

June 30, 2026

Fair Value (dollars in thousands)

2 unchanged sentences

Range (Weighted Average)

Sold loan servicing rights

Servicing rights on sold loans

Discounted cash flow

6 unchanged sentences

Offered quotes

98.25 - 100.17

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

4 unchanged sentences

Range (Weighted Average)

Sold loan servicing rights

Servicing rights on sold loans

Discounted cash flow

8 unchanged sentences

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

As of or For the Three Months Ended March 31,

As of or For the Three Months Ended June 30,

As of or For the Six Months Ended June 30,

(dollars in thousands)

Sold loan servicing rights:

Servicing rights on sold loans:

Balance at beginning of period

$ 3,014 $ 3,281

Servicing rights that result from transfers and sale of financial assets

1 unchanged sentence

Balance at end of period

$ 2,999 $ 3,301

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

As of or For the Three Months Ended March 31,

As of or For the Three Months Ended June 30,

As of or For the Six Months Ended June 30,

(dollars in thousands)

2 unchanged sentences

Balance at beginning of period

$ 6,599 $ 31,881

Principal payments and maturities

1 unchanged sentence

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.

1 unchanged sentence

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

March 31, 2026

June 30, 2026

(dollars in thousands)

Individually evaluated collateral-dependent loans

$ — $ — $ 37,479 $ 37,479

Other real estate owned

— — 1,380 1,380

December 31, 2025

1 unchanged sentence

Individually evaluated collateral-dependent loans

Other real estate owned

At June 30, 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 techniques used to value assets measured at fair value on a nonrecurring basis at the dates indicated:

June 30, 2026

Fair Value (dollars in thousands)

Valuation Technique

Unobservable Input

Range (Weighted Average)

Other real estate owned

Market comparable

Discount to appraisal

0% - 10% (5%)

December 31, 2025

Fair Value (dollars in thousands)

Valuation Technique

Unobservable Input

Range (Weighted Average)

Other real estate owned

Market comparable

Discount to appraisal

0% - 10% (5%)

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

June 30, 2026

Fair Value Measurements Using:

4 unchanged sentences

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

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

Servicing rights on sold loans, at fair value

Interest rate swap derivative - loans

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 —

Interest rate swap derivative - securities

December 31, 2025

5 unchanged sentences

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

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

Servicing rights on sold loans, at fair value

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 —

Interest rate swap derivative - securities and loans

Note 12 - Change in Accumulated Other Comprehensive Income ("AOCI")

6 unchanged sentences

Unrealized Losses on Fair Value of Hedged Items

Balance at March 31, 2025

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

Other comprehensive income before reclassification

Amounts reclassified from accumulated other comprehensive income

— — 30 ( 196 ) ( 166 )

Net other comprehensive income (loss)

97 — 30 ( 196 ) ( 69 )

Balance at June 30, 2025

$ ( 25,674 ) $ ( 486 ) $ ( 1,244 ) $ ( 794 ) $ ( 28,198 )

Balance at March 31, 2026

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

Other comprehensive income before reclassification

418 — — — 418

Amounts reclassified from accumulated other comprehensive income

— — 30 295 325

Net other comprehensive income

418 — 30 295 743

Balance at June 30, 2026

$ ( 20,486 ) $ ( 387 ) $ ( 1,125 ) $ ( 179 ) $ ( 22,177 )

(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

Balance at December 31, 2024

6 unchanged sentences

2,536 — 59 ( 621 ) 1,974

Balance at March 31, 2025

Balance at June 30, 2025

$ ( 25,674 ) $ ( 486 ) $ ( 1,244 ) $ ( 794 ) $ ( 28,198 )

7 unchanged sentences

( 428 ) — 59 590 221

Balance at March 31, 2026

Balance at June 30, 2026

$ ( 20,486 ) $ ( 387 ) $ ( 1,125 ) $ ( 179 ) $ ( 22,177 )

14 unchanged sentences

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

March 31, 2026

June 30, 2026

Investment securities (1)

8 unchanged sentences

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

At March 31, 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;

At June 30, 2026 and December 31, 2025 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 55.8 million and $ 56.1 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 228,000 and $ 980,000 , respectively;

1 unchanged sentence

( 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;

At June 30, 2026 and December 31, 2025 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 195.1 million and $ 213.3 million, respectively;

the cumulative basis adjustments associated with this hedging relationship was $ 10,000 and $ 903,000 , respectively;

5 unchanged sentences

Other Liabilities

March 31, 2026

June 30, 2026

Fair value hedges:

9 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 March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

8 unchanged sentences

Recognized on derivatives designated as hedging instruments

( 385 ) 230 ( 760 ) 761

Interest rate swaps - loans

Recognized on hedged items

397 ( 295 ) 894 ( 1,049 )

Recognized on derivatives designated as hedging instruments

Net income (expense) recognized on fair value hedges

( 402 ) 279 ( 880 ) 1,036

Net (expense) income recognized on fair value hedges

$ ( 15 ) $ ( 36 ) $ 6 $ ( 43 )

Credit Risk-related Contingent Features

4 unchanged sentences

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

At March 31, 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.

At June 30, 2026 , the Company had derivatives on securities in a net liability position related to these agreements.

The Company has minimum collateral posting thresholds with its derivative counterparties and has posted cash of $ 3.5 million at June 30, 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.

As of June 30, 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.

20 unchanged sentences

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.

The Company strongly disputes the allegations contained in the 3|5|2 Complaint and is vigorously defending against the claims, most recently filing its Second Amendment Answer, Affirmative Defenses, and Counterclaims on July 22, 2026.

Socotra REIT I Litigation

5 unchanged sentences

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