The near-zero profitability and 101.4% efficiency ratio signal a bank struggling to cover operating costs. Monitor for further legal developments in the Socotra REIT and 3|5|2 Capital cases, which could drive additional expense volatility. The Q2 2026 Bellevue branch closure is expected to reduce annual expenses by ~$900K, but this is insufficient to materially move the needle on profitability.
Price Chart
Executive Summary
First Northwest Bancorp reported Q1 2026 net income of just $6,000 ($0.00 EPS), a 100% miss vs the $0.04 consensus estimate, as noninterest income fell 46% due to the absence of a prior-quarter insurance reimbursement. Net interest margin improved for the sixth consecutive quarter to 3.03%, but the bank remains barely profitable with an efficiency ratio of 101.4% and elevated legal costs from ongoing litigation.
Key Financial Metrics
Key Facts
- Net income of $6,000 vs $382,000 in Q4 2025 and a loss of $9.0M in Q1 2025
- EPS of $0.00 missed consensus estimate of $0.04 by 100%
- Noninterest income fell 46% QoQ to $2.0M due to absence of $1.7M insurance reimbursement
- Net interest margin improved to 3.03% from 3.00% QoQ, sixth consecutive quarterly expansion
- Efficiency ratio worsened to 101.4% from 92.0% in Q4 2025
- Nonperforming loans decreased to $21.7M from $22.6M QoQ
- Customer deposits increased $24.9M while brokered deposits decreased $22.4M
- No dividends declared; 846,123 shares remain available for repurchase under existing plan
- Legal fees remain elevated due to ongoing Socotra REIT and 3|5|2 Capital litigation
Financial Impact
EPS miss of $0.04 vs $0.04 consensus (-100%) on net income of just $6,000
Risk Factors
- Ongoing litigation (Socotra REIT, 3|5|2 Capital) could result in material adverse judgments or continued elevated legal fees
- Efficiency ratio above 100% indicates the bank is not covering operating expenses with revenue
- Loan portfolio continues to shrink YoY (-1.5% net loans), limiting interest income growth
- Four collateral-dependent loans totaling $26.5M represent 77% of classified loans, concentrated credit risk
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001437749-26-013774 |
| Document: fnwb20260407_8k.htm | 0001437749-26-013774 |
| Document: 0001437749-26-013774-index-headers.html | 0001437749-26-013774 |
| Document: 0001437749-26-013774-index.html | 0001437749-26-013774 |
| Document: 0001437749-26-013774.txt | 0001437749-26-013774 |
| 8-K Data (Synthetic) | 0001437749-26-013774 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 18, 2026 5w ago | 8-K | $10.36 | awaiting T+60 | — | $9.76 (−5.79%) |
Jul 29, 2026 12w ago | 8-K | $12.01 $9.65 | ▼ −19.65% | ▼ −24.38% | $9.76 (−18.73%) |
Jun 26, 2026 17w ago | 3 | $10.50 $10.23 | ▼ −2.57% | ▼ −6.96% | $9.76 (−7.05%) |
May 4, 2026 25w ago | 8-K | $9.92 $12.01 | ▲ +21.07% | ▲ +19.21% | $9.76 (−1.61%) |
Apr 29, 2026 25w ago | 8-K | $9.97 $11.95 | ▼ −19.86% | ▼ −15.75% | $9.76 (+2.11%) |
US Market Status
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