First Northwest Bancorp · NASDAQ:FNWB

First Northwest Bancorp — Q1 2021 Earnings Presentation

35 slides from First Northwest Bancorp's earnings presentation, May 3, 2021

  1. Slide 1: First Quarter 2021 Investor Presentation

    First Quarter 2021 Investor Presentation May 2021

  2. Slide 2: About First Northwest Bancorp (FNWB)

    First Northwest Bancorp About First  Bank holding company for First Fed, a growing $1.7 billion* Northwest asset, community bank headquartered in Port Angeles, Washington Bancorp (FNWB)  First Fed is a Washington state-chartered savings bank, founded FNWB in 1923  13 locations: 8 in Clallam and J

  3. Slide 3: Mission Statement

    First Northwest Bancorp We design and deliver delightful, accessible, and effortless financial solutions by empowering our team members to improve the lives of those we serve. Mission Statement Confidential © 2021 First Fed 3

  4. Slide 4: Experienced and Deep Leadership Team

    First Northwest Bancorp Experienced and Deep Leadership Team Years with Years of Name Title the Banking Company Experience Matthew P. Deines President, Chief Executive Officer and Director 1.75 20 Geri Bullard Executive VP, Chief Financial Officer 1.25 25 Terry Anderson Executive VP, Chief Credit Of

  5. Slide 5: Board Comprised of Community Leaders with Long Average Tenure

    First Northwest Bancorp Board Comprised of Community Leaders with Long Average Tenure Tenure with Name Role Outside Affiliation the Company Stephen E. Oliver Chairman of the Board Retired – Owned S.E. Oliver, Inc 21 years Cindy H. Finnie Vice Chairman of the Retired Executive from Allstate Insurance

  6. Slide 6: ESG – Creating Value Beyond Banking

    First Northwest Bancorp ESG – Creating Value Beyond Banking Governance Initiatives  Appointed our third female director in 2020  Formalized Diversity, Equity and Inclusion (DEI) Policy to increase diversity and social responsibility companywide  Formalized Environment, Social, and Governance Poli

  7. Slide 7: Overview of Risk Management

    First Northwest Bancorp Overview of Risk Management Risk Management Governance  Board and Committee Oversight and Reporting  Tenured General Counsel oversees Governance and Enterprise Risk Management  General Counsel reports directly to CEO  Tenured Chief Credit Officer  Ownership of Individual

  8. Slide 8: Recent Developments

    First Northwest Bancorp Recent Developments  Subordinated Debt Issuance  Bellevue Branch Purchase  Brand Refresh  Fintech Joint Venture Investor Presentation May 3, 2021 8 Source: Company documents

  9. Slide 9: Subordinated Debt Issuance

    First Northwest Bancorp Subordinated Debt Issuance  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 accredited investors.  The net proceeds to the C

  10. Slide 10: Bellevue Branch Purchase

    First Northwest Bancorp Bellevue Branch Purchase  On March 22, 2021 the Company announced that First Fed has entered into an agreement with Sterling Bank and Trust of Southfield, Michigan to purchase its Bellevue, Washington branch, subject to applicable regulatory approvals and other customary clo

  11. Slide 11: First Fed Brand Refresh

    First Northwest Bancorp First Fed Brand Refresh Primary Reasons for Our Name Change: 1. Familiar: Our customers and employees already call us “First Fed.” 2. Findable: Our website is ourfirstfed.com and social media is “ourfirstfed.” So, it is easier for people to find us online by searching “first

  12. Slide 12: Fintech Joint Venture

    First Northwest Bancorp Fintech Joint Venture Vision: Empowering dreams through financial peace of mind.  Quin Ventures is a joint venture partnership between Products Initial Suite of Services FNWB and Peace of Mind, Inc. – a combined effort by Payment Services Cost Savings a community bank and a

  13. Slide 13: Current Strategic Initiatives

    First Northwest Bancorp Current Strategic Initiatives 1 2 3 4 Balance Sheet Strategy Human Capital Revenue Growth Digital Channels Net Interest Income Deposit Account Opening Hire the Best People (Terafina) Scale Assets to Improve EPS and ROAE Mortgage Revenue Mortgage Production (Blend/Ellie Mae) E

  14. Slide 14: Substantial Growth Achieved With Similar Asset Mix

    First Northwest Bancorp Substantial Growth Achieved With Similar Asset Mix Q1 2019 Q1 2020 Q1 2021 Total Assets: Total Assets: Total Assets: $1,279M $1,397M $1,736M Investor Presentation May 3, 2021 Source: Company documents; Financial data as March 31, 2021 14

  15. Slide 15: Securities Portfolio

    First Northwest Bancorp Securities Portfolio Investment Portfolio Characteristics as of March 31, 2021  Book Value: $390.7 Million Corp Debt 10%  Market Value $393.5 Million MBS Corp ABS 25%  Effective Duration: 5.42 years 8%  Average Life: 6.78 years  Municipal Securities – Portfolio Ratings:

  16. Slide 16: Lending Strategy & Portfolio Composition

    First Northwest Bancorp Lending Strategy & Portfolio Composition C&I 3% PPP 4% Other (Dollars in Thousands) 3/31/2021 Consumer Loan Type Balance % Total Auto 9% 3% 1-4 Family $329,544 28.1% Commercial Real Estate $296,826 25.4% 1-4 Family 28% Multi-Family $162,487 13.9% C&D 14% C&D $157,316 13.4% Au

  17. Slide 17: Strong Core Deposit Composition

    First Northwest Bancorp Strong Core Deposit Composition (Dollars in Thousands) 3/31/2021 Deposits Type Balance % Total Brokered MMDA & Savings $681,438 47.5% CDs Non-Int. Checking $296,232 20.6% 7% Non-Int Retail CDs $201,278 14.0% Checking Interest Checking $169,910 11.8% Retail CDs 21% Brokered CD

  18. Slide 18: Building Revenue

    First Northwest Bancorp Non-interest Building Revenue Net Interest Income Income 11.5% 88.5% Total Operating $16,000 2019Q1 Q1 2019 Revenue: 2021Q1 $10.9M $14,000 $13,483 2021Q12 $12,000 Non-interest Net Interest Income $9,600 $9,407 Income 19.8% $10,000 80.2% Total Operating $8,000 Q1 2020 Revenue:

  19. Slide 19: 1Q 2021 Financial Highlights

    First Northwest Bancorp  Deposits increased 7.6% during the quarter and increased 1Q 2021 34.9% from one year prior, to $1.43 billion at March 31, 2021, due to successful organic and wholesale deposit- Financial Highlights gathering strategies, including significant growth in noninterest-bearing de

  20. Slide 20: Strong, Consistent Historical Profitability

    First Northwest Bancorp Strong, Consistent Historical Profitability Trailing Twelve Month Net Income ($M) Trailing Twelve Month ROAA (%) Trailing Twelve Month Efficiency Ratio (%) Trailing Twelve Month Net Interest Margin (%) Investor Presentation May 3, 2021 Source: S&P Global Market Intelligence;

  21. Slide 21: Net Interest Income and Margin

    First Northwest Bancorp Net Interest Income and Margin 3.60% $11,500 3.48% 3.50% 3.46% $10,500 3.36% 3.40% 3.30% $9,500 3.19% 3.16% 3.17% 3.20% $8,500 3.14% 3.10% 3.11% 3.10% 3.10% $7,500 3.00% $6,500 2.90% 4Q 2018 1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 $ in thousand

  22. Slide 22: Balance Sheet Growth

    First Northwest Bancorp Balance Sheet Growth Actual (Ex. PPP) PPP Loans Total Assets ($M) Total Loans and Leases ($M) CAGR¹: CAGR¹: 11.8% 15.0% Total Deposits ($M) Total Equity ($M) CAGR¹: Loan / Deposit (%) 13.4% Investor Presentation May 3, 2021 1) CAGR calculated from 2016Y to 2021Y 22 Source: S&

  23. Slide 23: Leading Deposit Market Share

    First Northwest Bancorp Leading Deposit Market Share Clallam County, WA Whatcom County, WA Market Market # Deposits Share # Deposits Share Rank Institution (ST) Branches ($M) (%) Rank Institution (ST) Branches ($M) (%) 1 First Northwest Bancorp (WA) 5 843 36.7 1 Peoples Bancorp (WA) 9 1,161 23.4 2 S

  24. Slide 24: Historically Strong Asset Quality

    First Northwest Bancorp Historically Strong Asset Quality NPAs / Assets (%) NCOs / Avg. Loans (%) Texas Ratio 2021Q1: 1.08% Loan Loss Reserve / Total Loans (%)  Growth focused on low-risk asset classes such as Multi-Family ALLL/Total Loans (Ex. PPP)  Use of enhanced underwriting throughout the COV

  25. Slide 25: Returning Capital to Shareholders

    First Northwest Bancorp Returning Capital to Shareholders Status of Share Repurchase Program  On October 28, 2020, the Company announced that its Board of Directors had authorized the repurchase and retirement of up to an additional ~1 million shares of its common stock, or 10% of the outstanding s

  26. Slide 26: Bank Level Capital Ratios

    First Northwest Bancorp Bank Level Capital Ratios TCE / TA (%) Leverage Ratio (%) Tier 1 Capital Ratio (%) Total RBC Ratio (%) Investor Presentation May 3, 2021 26

  27. Slide 27: Capital Metrics

    First Northwest Bancorp Capital Metrics Tangible Book Value Per Share Tangible Common Equity Ratio $18.50 $18.20 15.0% 14.4% $18.00 $17.86 14.0% 13.8% $17.48 $17.50 $17.07 13.0% 12.6% $17.00 $16.48 11.9% $16.50 12.0% 11.5% $16.02 11.1% $16.00 11.0% $15.50 10.0% $15.00 $14.50 9.0% 4Q 2019 1Q 2020 2Q

  28. Slide 28: Consolidated Historical Balance Sheet

    First Northwest Bancorp Consolidated Historical Balance Sheet For the Quarter Ending 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 Assets ($000) Total Cash and Cash Equivalents 107,164 49,588 52,079 65,155 99,271 Available for Sale Securities 317,520 364,273 369,111 364,296 393,495 Held to Maturity Securities

  29. Slide 29: Consolidated Historical Income Statement

    First Northwest Bancorp Consolidated Historical Income Statement For the Quarters Ending, 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 Net Interest Income 9,407 10,113 11,761 12,677 13,483 Provision for Loan Losses 1,266 1,500 1,350 930 500 Loan and Deposit Fees 881 765 868 940 837 Mortgage Servicing Fees, Ne

  30. Slide 30: COVID-19 Related Loan Deferrals By Industry

    First Northwest Bancorp COVID – 19 Related Loan Deferrals By Industry Loan Deferral Trends ($ in Thousands)  Management was proactive with customers at the onset of the  COVID – 19 crisis and granted short-term payment deferrals to those requesting financial assistance  Commercial loan deferral r

  31. Slide 31: Limited COVID-19 At-Risk Industry Exposure

    First Northwest Bancorp Limited COVID – 19 At-Risk Industry Exposure Limited COVID-19 At-Risk Industry Exposure ($ in Thousands) Outstanding % of Balance Total Loans Accommodation and Food Services $47,450 4.1% None of the Loan Balances Within “At-Risk” Industries Healthcare and Social Assistance $1

  32. Slide 32: Experienced, but #YOUNG, Management Team

    First Northwest Bancorp Experienced, but #YOUNG, Management Team Matt Deines, 47 Terry Anderson, 52 Derek Brown, 50 Geri Bullard, 56 President and CEO EVP/Chief Credit Officer EVP/Chief HR & Marketing Officer EVP/Chief Financial Officer President & CEO of the Bank since August Chief Credit Officer s

  33. Slide 33: Experienced, but #YOUNG, Management Team

    First Northwest Bancorp Experienced, but #YOUNG, Management Team Kelly Liske, 44 Chris Riffle, 45 Randy Riffle, 45 EVP/Chief Banking Officer EVP/Chief Operating Officer Corp. EVP/Chief Lending Officer Chief Banking Officer since 2013 Counsel/Corp. Secretary Chief Lending Officer since 2020. Formerly

  34. Slide 34: Market Footprint

    First Northwest Bancorp Market Footprint 13 locations: 8 in Clallam and Jefferson Counties 2 in Kitsap County 2 in Whatcom County (+1 in August 2021) 1 in King County (+1 in June 2021) Investor Presentation May 3, 2021 34

  35. Slide 35: Thank you

    Thank you Contact Matt Deines Geri Bullard President and CEO EVP/CFO matt.deines@ourfirstfed.com geri.bullard@ourfirstfed.com May 3, 2021 35

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