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CLOSED · 03:20 ET
Market ClerkRecap
Sat Oct 31 · markets closed3 signals on Oct 30129 insider buys this week · $10BCIRO short report next: Nov 14The week ahead

FNWB

First Northwest Bancorp
NASDAQ · FINANCIALS · SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED
10.23
−0.08 −0.78%
USD · close Oct 30
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Work order
58
WATCH · shorts 58
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $97.3MP/E 63.9DIV YIELD —FCF YIELD —REV TTM —NET INCOME $1.5MNET DEBT $83.7M52W 8.51 – 12.17SEC XBRL · TTM TO Invalid Date

How FNWB rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
44%
of sentences unchanged
Added
180
new sentences
Dropped
74
sentences removed
Length
+3,435
words, now 11,610

New in FY2025

  • The following is a discussion of what we currently believe are the most significant risks and uncertainties that may affect our business, financial condition, and future results.
  • You should carefully consider the following risks, together with all of the other information contained in this Form 10-K, including the sections entitled "Forward-Looking Statements" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes thereto.
  • Any of the following risks could have an adverse effect on our business, financial condition, and results of operations and could cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment.
  • Our business, financial condition, and results of operations could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.
  • Economy and Our Markets Our business and operations are concentrated in Washington, and adverse economic conditions in that area could adversely impact our earnings and could increase the credit risk associated with our loan portfolio.
  • Adverse changes in the regional and general economy could reduce our growth rate, impair our ability to collect loans, and generally have a negative effect on our business, financial condition and results of operations.
  • The interest rate environment impacts competition for deposits across the banking industry, and deposit balances may decrease if customers perceive alternative investments as providing a better risk/return tradeoff or if customers turn to other alternatives to deposits, such as stablecoins.
  • Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer perceptions of the Company, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among those with uninsured deposits.
  • Furthermore, as banking organizations experienced in the Spring of 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed "too big to fail" or remove deposits from the banking system entirely.
  • We may not be able to replace maturing deposits and advances as necessary in the future, especially if a large number of our depositors sought to withdraw their accounts, regardless of the reason.
  • Public health crises , geopolitical developments, acts of terrorism, natural disasters, climate change and other events out of our control could harm our business.
  • Public health crises, domestic or geopolitical crises, such as the current wars in Ukraine and the Middle East, political instability or civil unrest, terrorism or other events outside of our control, could cause disruptions to our business and those of our customers, counterparties and service providers or the U.S.' economy, resulting in potentially adverse operating results.
  • Natural disasters may disrupt our operations and those of our customers, counterparties and service providers, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the economies in which we operate.
  • We also could be adversely affected if our key personnel or a significant number of our employees were to become unavailable due to a public health crisis (such as an outbreak of a contagious disease), natural disaster, war, act of terrorism, accident or other reason.
  • The effects of any of the foregoing factors could have a material adverse effect on our business, financial condition and results of operations.
  • We may be impacted by the actions, soundness or creditworthiness of other financial institutions, which can cause disruption within the industry and increase expenses.
  • Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships.
  • We execute transactions with various counterparties in the financial industry, including broker-dealers, commercial banks, and investment banks.
  • Defaults or failures of financial services institutions and instability in the financial services industry in general can lead to market-wide liquidity problems, increased credit risk and withdrawals of uninsured deposits.
  • Such events could adversely affect our business, results of operations, and financial condition, as well as the market price and volatility of our common stock.
  • Bank failures may increase the risk of a recession or lead to regulatory changes and initiatives, such as enhanced capital, liquidity, or risk management requirements, which could adversely impact us.
  • Changes to laws or regulations, or the imposition of additional restrictions through supervisory or enforcement activities, could have a material impact on our business.
  • Regulatory changes could also adversely impact our ability to access funding, increase the cost of funding, limit our access to capital markets, and negatively impact our overall financial condition.
  • For example, certain bank failures in 2023 resulted in a special assessment by the FDIC to replenish the DIF.
  • These competitors primarily include national, regional, community and digital banks within the various markets in which we operate.
  • We also face competition from many other types of financial institutions, including savings and loans, credit unions, mutual funds, mortgage banking finance companies, brokerage firms, insurance companies and other financial intermediaries or alternative investment vehicles.
  • For example, financial technology companies and other firms have begun to offer services such as stablecoins that may serve as alternatives to traditional banking products such as deposits.
  • Failure to keep up with the rapid technological changes in the financial services industry could have an adverse effect on our competitive position and profitability.
  • The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services.
  • The effective use of technology increases efficiency and enables financial institutions to better serve customers and reduce costs.
  • Our future success will depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as to create additional efficiencies in our operations.
  • Many of our competitors have substantially greater resources to invest in technological improvements than we do.
  • We may not be able to implement new technology-driven products and services effectively or be successful in marketing these products and services to our customers.
  • Failure to keep pace successfully with technological change affecting the financial services industry could harm our ability to compete effectively and could have an adverse effect on our business, financial condition, and results of operations.
  • As these technologies improve in the future, we may be required to make significant capital expenditures in order to remain competitive, which may increase our overall expenses and have an adverse effect on our business, financial condition, and results of operations.
  • Credit and Asset Quality Our emphasis on commercial real estate lending subjects us to various risks that could adversely impact our results of operations and financial condition.
  • Our commercial real estate and multi-family loans represent a significant portion of our portfolio, with balances of $691.2 million, or 42.5%, of our total loan portfolio, at December 31, 2025, and $723.0 million, or 42.6%, of our total loan portfolio at December 31, 2024.
  • We intend to continue, subject to market demand, our origination and purchase of commercial real estate loans.
  • Our focus on this type of lending has increased our risk profile.
  • At December 31, 2025, we had $9.8 million of nonperforming commercial real estate loans in our portfolio.

and 140 more.

Gone since FY2024

  • Economy and Our Markets Adverse economic conditions in market areas we serve could adversely impact our earnings and could increase the credit risk associated with our loan portfolio.
  • Adverse changes in the regional and general economy could reduce our growth rate, impair our ability to collect loans, and generally have a negative effect on our financial condition and results of operations.
  • The current elevated interest rate environment has increased competition for deposits across the banking industry, and deposit balances may decrease if customers perceive alternative investments as providing a better risk/return tradeoff.
  • Public health crises , geopolitical developments, acts of terrorism, natural disasters, climate change and other external factors could harm our business.
  • Public health crises, domestic or geopolitical crises, such as the current wars in Ukraine and the Middle East, political instability or civil unrest, terrorism, human error or other events outside of our control, could cause disruptions to our business or the United States' economy, resulting in potentially adverse operating results.
  • Natural disasters may disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the economies in which we operate.
  • The effects of any of the foregoing factors could have a material adverse effect on our business, operations, and financial condition.
  • Credit and Asset Quality Our increased emphasis on commercial real estate lending subjects us to various risks that could adversely impact our results of operations and financial condition.
  • We have increased the amount of our commercial real estate and multi-family loans to $723.0 million, or 42.6%, of our total loan portfolio, at December 31, 2024, from $721.1 million, or 43.4%, of our total loan portfolio at December 31, 2023.
  • We intend to continue to increase, subject to market demand, our origination and purchase of commercial real estate loans.
  • Our increased focus on this type of lending has increased our risk profile.
  • At December 31, 2024, we had $5,598,000 of nonperforming commercial real estate loans and $0 of nonperforming multi-family loans in our portfolio.
  • An increase in unsecured lending exposes us to an increase in loan losses.
  • We have increased our commercial business loan portfolio by purchasing unsecured loans to small businesses and professionals and our consumer loan portfolio through purchases from Splash Financial.
  • Our exposure on these purchased loan portfolios was $21.1 million and $7.3 million, respectively, at December 31, 2024.
  • Unsecured loans present additional risks to us because if a borrower defaults on an unsecured loan, there is no collateral to repossess and liquidate in order to satisfy the outstanding loan balance.
  • Also, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on an unsecured loan in default.
  • Our efforts to mitigate this risk include carefully assessing a borrower’s creditworthiness, including their income, employment history, and debt-to-income ratio.
  • In 2022, we began purchasing unsecured consumer loans through a partnership with Splash Financial, a private lender that underwrites and funds personal loans.
  • First Fed has experienced losses of $3.4 million on the Splash Financial loans to date.
  • We made changes to the program participation criteria for these loans in 2023 with the goal of reducing additional losses.
  • Purchases of Splash loans were suspended in August 2023.
  • Additional losses in our unsecured lending portfolio would negatively affect our profitability and capital.
  • The significant growth in our loan portfolio and expansion into new markets may increase our credit risk.
  • Since the completion of our initial public offering in January 2015, we have grown substantially in terms of total assets, total loans, total deposits, employees, and locations, expanding our business activities throughout the Puget Sound region.
  • Our commercial loan portfolio, which includes loans for commercial and multi-family real estate as well as other business loans, has increased to $874.5 million, or 51.6% of total loans, at December 31, 2024, from $833.4 million, or 50.2% of total loans, at December 31, 2023.
  • One-to-four family loans have increased to $395.3 million, or 23.3% of total loans, at December 31, 2024, from $378.4 million, or 22.8% of total loans, at December 31, 2023.
  • Total consumer loans have increased to $347.9 million, or 20.6% of total loans, at December 31, 2024, from $318.5 million, or 19.2% of total loans, at December 31, 2023.
  • Rapidly growing loan portfolios are, by their nature, less seasoned and our experience with these loans may not provide us with a useful payment history pattern.
  • Rapid growth combined with the geographic expansion of our lending area may make estimating loan loss allowances more difficult and more susceptible to changes in estimates, and to losses exceeding estimates, than our more seasoned portfolio of loans in our traditional lending area.
  • As a result, it is difficult to predict the future performance of these parts of our loan portfolio.
  • These loans may develop delinquency or charge-off levels above our historical experience, which could adversely affect our future performance.
  • We plan to continue both strategic and opportunistic growth, understanding that we may see a slowing of growth as we mature and manage capital down to more efficient levels.
  • Continued growth can present substantial demands on management personnel, line employees, and other aspects of our operations, especially if our growth occurs rapidly.
  • We may face difficulties in managing that growth effectively, which could damage our reputation, limit our growth, and negatively affect our operating results.
  • Also see "Our expansion strategy will cause our expenses to increase and may negatively affect our earnings." We have a concentration of large loans outstanding to a limited number of borrowers that increases our risk of loss.
  • First Fed has extended significant amounts of credit to certain borrowers, largely in connection with high-end residential real estate and commercial and multi-family real estate loans.
  • At December 31, 2024, the aggregate amount of loans, including unused commitments, to First Fed's five largest borrowers (including related entities) amounted to approximately $95.9 million.
  • Outstanding loan balances for the ten largest borrowing relationships at December 31, 2024, totaled $165.7 million, or 9.8% of total loans.
  • Although only one of the loans to First Fed's 20 largest borrowers was nonperforming as of December 31, 2024, concentration of credit to a limited number of borrowers increases the risk in First Fed's loan portfolio.

and 34 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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