First Northwest Bancorp, the holding company for First Fed Bank, reported a net loss of $743,000 for the third quarter of 2026. This compares to net income of $308,000 in the second quarter of 2026 and net income of $802,000 in the third quarter of 2025. The company reported a basic and diluted loss per share of $0.08 for the third quarter of 2026.
Management attributed the loss to a higher provision for credit losses and a nonrecurring $1.3 million expense related to the settlement of a previously disclosed legal matter. Despite the loss, the company noted growth in customer deposits and a modest expansion of its net interest margin.
For the nine months ended September 30, 2026, the company reported a net loss of $0.4 million. Total assets stood at $2.143 billion as of September 30, 2026, an increase of $18 million from the previous quarter. This growth was driven by an additional $27 million in customer deposits and an 8.1% increase in investment securities to $310.2 million.
Net interest income for the third quarter was $14.3 million, compared to $14.2 million in the second quarter. The net interest margin improved to 2.96% for the third quarter of 2026, up from 2.95% in the second quarter. The company noted that the yield on interest-earning assets remained flat at 5.30%.
Asset quality metrics showed some improvement. Nonperforming loans decreased by $842,000 to $19.9 million. However, the allowance for credit losses on loans increased to $16.4 million, or 1.03% of total loans. The nonaccrual loan coverage ratio was 82.41%.
The bank remains well capitalized, with a total risk-based capital ratio of 13.3% as of September 30, 2026. The company also noted that classified loans increased to $26.1 million, driven by new downgrades across multiple loan categories.
