First Northwest Bancorp · NASDAQ:FNWB

First Northwest Bancorp — Q4 2020 Earnings Presentation

37 slides from First Northwest Bancorp's earnings presentation, Mar 2, 2021

  1. Slide 1: Fourth Quarter 2020 Investor Presentation

    & First Northwest Bancorp Fourth Quarter 2020 Investor Presentation March 2021 > =

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

    First Northwest Bancorp. About First Northwest Bancorp (FNWB) FNWB NASDAQ ticker symbol N°1 Deposit Market Share in Clallam and Jefferson Counties Investor Presentation Bank holding company for First Fed, a growing $1.7 billion* asset, state chartered savings bank headquartered in Port Angeles, Wash

  3. Slide 3: Experienced and Deep Leadership Team

    First Northwest Bancorp, Experienced and Deep Leadership Team Years with | Years of the Banking Company | Experience Matthew P. Deines President, Chief Executive Officer and Director 1 20 Geri Bullard Executive VP, Chief Financial Officer 1 25 Terry Anderson Executive VP, Chief Credit Officer 3 7 Ch

  4. Slide 4: Board Comprised of Community Leaders with Long Average Tenure

    First Northwest Bancorp, Board Comprised of Community Leaders with Long Average Tenure Tenure With The Company| Nami Stephen E. Oliver Chairman of the Board / Retired~ Owned S.E. Oliver, Inc. 21 years Cindy H. Finnie Vice Chairman of the Board / Retired Executive from Allstate Insurance 9 years Sher

  5. Slide 5: Mission Aligned Initiatives — Creating Value Beyond Banking

    First Northwest Bancorp Mission Aligned Initiatives — Creating Value Beyond Banking Governance initiatives "Appointed our third female director in 2020 * Formalized Diversity, Equity and Inclusion Policy to increase diversity and social responsibility companywide . Social, and Policy to establish ov

  6. Slide 6: Recent Developments

    First Northwest Bancorp Recent Developments Things we set out to do, and did Things we didn’t set out to do, but did = Hire Great People = Build Diverse Investment Portfolio = Optimize the Balance Sheet = Grow Deposits by over 30% = Grow Top Line Revenue = Participate in Government Lending Programs

  7. Slide 7: Strategic Goals

    First Northwest Bancorp, Strategic Goals 01 Balance Sheet Strategy 02 Human Capital 03 Revenue Growth 04 Digital Channels

  8. Slide 8: Strategic Goal #1: Balance Sheet Strategy

    First Northwest Bancorp. Strategic Goal #1 Balance Sheet Strategy Scale Assets to Improve EPS Improve Balance Sheet and ROAE Mix Investor Presentation Leverage Organic and Non-Organic Sources

  9. Slide 9: Substantial Growth Achieved With Similar Asset Mix

    First Northwest Bancorp. Substantial Growth Achieved With Similar Asset Mix 800 $38.53 other S083 can Be $5455 2018Y 2019Y 2020Y Total Assets: $1,654M. Total Assets: Total Assets: $1,307M. AL ss7a50 s1s722 Investor Presentation

  10. Slide 10: Balance Sheet Utilization

    First Northwest Bancorp. Balance Sheet Utilization 2/1/2018 2/31/2019 mrss. $1,258.983 $1,307,336 me Deposits 940260 $1,003,645 ee Borrowings 5136552 3112930 Leverage Ratio Bem 13.59% mAsets mem Deposits Borrowings —Leverage Ratio Investor Presentation varen2 202 sere ordeal a i 8 42/31/2020 $1,654,

  11. Slide 11: Strategic Goal #2: Human Capital

    First Northwest Bancorp Strategic Goal #2 Human Capital S$ Bw Hire the best people Empower them Hold them Accountable Investor Presentation oe Reward them

  12. Slide 12: Experienced, but #YOUNG, Management Team

    First Northwest Bancorp Experienced, but #YOUNG, Management Team Matt Deines (age 47) Presiden & CEO of the Sank since August 2019, and President & CEO of the Company since December 201, Former EVF/CFOot bert Bank and SFC Neary 20 yeas of banking experience (Uof Washinton MBA, Paina) Investor Presen

  13. Slide 13: Experienced, but #YOUNG, Management Team

    First Northwest Bancorp Experienced, but #YOUNG, Management Team t\ Kelly Liske (age 44) Chris Riffle (age 45) Randy Riffle (age 45) ve / chit Banking Ofcer ve (chit Operating Oticer Corp. Evo /Chiet Lending Oicer (hie Banking Ofer since 2013 aeonenmaned hit Lending Ofer since 2020, Formerly (ver 20

  14. Slide 14: 2020 Key Hires

    2020 Key Hires Geri Bullard VP/Chiet Banking Oeer Experienced ¢FO/ former Regulator ‘Andy Pohiman ‘vPReponal Market President Banking ender from W. Washington $1.58 bank a; | Randy Riffle EvP/Chlet Lending Ofc ‘commercial eadeformer Chie crud Offcor Stephanie Nicklaus ‘VP/Senior Credit Adminstrator

  15. Slide 15: Strategic Goal #3: Revenue Growth

    First Northwest Bancorp Strategic Goal #3 Revenue Growth Net Interest Income ‘Mortgage Revenue Debit Card Interchange fe Bank Owned Life Insurance Commercial Banking Investor Presentation

  16. Slide 16: Building Revenue

    First Northwest Bancorp Building Revenue = Non-interest income accounts for over 22.4% of LTM operating income, driven by the strength of the Company's Mortgage Banking Operations = Offers interest rate hedged loans through the ARC (Assumable Rate Conversion) program to manage lending and liability

  17. Slide 17: Strategic Goal #4: Digital Channels

    First Northwest Bancorp Strategic Goal #4 Digital Channels Deposit Account Opening Mortgage Production Digital Consumer Lending (Terafina) (Blend/Ellie Mae) (Meridian Link) ‘Small Business Lending Digital Marketing Program (Sageworks) (Salesforce) Investor Presentation

  18. Slide 18: Financial Highlights

    Financial Highlights

  19. Slide 19: 4Q 2020 Financial Highlights

    First Northwest Bancorp. 4Q 2020 Financial Highlights — Fourth quarter net income totaled $3.8 million, compared to $3.7 million in the preceding quarter and $2.2 million in the year ago quarter. Diluted earnings per share was $0.41, up from $0.40 per share in the preceding quarter and up from $0.23

  20. Slide 20: Strong, Consistent Historical Profitability

    First Northwest Bancorp Strong, Consistent Historical Profitability Net Income ($M) ROAA (24) ( CAGR': J $10.3 sa0 gra 9 Ey es pour 201 2018Y201y «20207 oie 20177. 2018” 2019" 202001 202002 202003 202008 Efficiency Ratio (%) Net Interest Margin (96) 8 es om 16 n 6s oisy 2047Y. 2018 20191 207001 2020

  21. Slide 21: Net Interest Income and Margin

    Net Interest Income and Margin $1,500 $10,500 $8,500 ‘a2018 102019 202019 302019, 402019, 102020 202000 302020 402020 4 Sin thousands mati nterest ncome Het intrest Margin Investor Presentation one sre ca ant nome en

  22. Slide 22: Targeted Balance Sheet Growth

    First Northwest Bancorp Targeted Balance Sheet Growth Total Loans and Leases ($M) $1216 $izso $4307 $1,010 2016y 2017" Total Deposits ($M) 201s 20199 20207 2016 20177 20187 20197 20207 Total Equity ($M) @— Loan / Deposit) $1,334 2016" 2017" 2o18y 20197 20207 Investor Presentation aen2. 202 $190 2o16

  23. Slide 23: Leading Deposit Market Share

    First Northwest Bancorp Leading Deposit Market Share Clallam County, WA Whatcom County, WA. . Depots Shaw : Depots Rank tution aches fe st snes Sound nan Bn ne WAY 3 or 0 2 tancof Amerie crpraon HC) 2 © 3 Fsmace ne Wa) 2 cy so 2 Ustanerpiuny 5 ™ 4 Urpqustiang Cre. (08) 2 ca 76 Washington eden (A) 3

  24. Slide 24: Strong Core Deposit Composition

    First Northwest Bancorp Strong Core Deposit Composition Brokered CDs % NNon-lnt. Checking (coor tT) apsipam0 bel Deposits Type Balance se MMDA & Savings $593,579 Nonint. Checking $274930 Retail CDs $219,208 Interest Checking $156,240 2020Y Brokered CDs $89,560 6.7% Total Deposits: Interest checking

  25. Slide 25: Deposit Portfolio Mix

    First Northwest Bancorp Deposit Portfolio Mix 4Q 2019 4Q 2020 Non-Int Checking $160,420 16% 0.00% $274,930 0.00% Int Checking 116,076 12% 0.07% 156,240 12% 0.01% Savings 168,983 17% 0.91% 164,434 12% 0.14% Money Market 248,086 25% 0.55% 429,143 32% 0.31% Retail CDs 256,473 26% 1.94% 219,208 16% 1.17

  26. Slide 26: Lending Strategy & Portfolio Composition

    First Northwest Bancorp Lending Strategy & Portfolio Composition Auto and Other consumer Loans 11% Multi-Family 4% 0 11% cal 7% PPP 236 1-4 Family 30% 2020Y Gross Loans: $1,160M Commercial Real Estate 25% {oilers in Thousands) lemtype 4Foeiy Commerc Real Estate Malfoy ‘sto and Other Consumer teens c

  27. Slide 27: Overview of Real Estate Portfolio

    First Northwest Bancorp Overview of Real Estate Portfolio Composition By Property Type and Region Orme oct "As of December 31, 2020 the total real estate portfolio =~, represents $925 million or 80% of total loan portfolio, on oa "10 largest real estate loans represented 12% of the total real names

  28. Slide 28: COVID — Related Loan Deferrals By Industry

    First Northwest Bancorp, COVID — 19 Related Loan Deferrals By Industry Loan Deferral Trends (Sn Thousands) = Management was proactive with customers at the onset of the siggse simgana_—— COVID ~ 19 crisis and granted short-term payment deferrals to those requesting financial assistance ® Commercial

  29. Slide 29: Limited COVID — At Risk Industry Exposure

    First Northwest Bancorp, Limited COVID — 19 A Risk Industry Exposure (Sin Thousands) Outstanding of Balance Total Loans ‘Accommodation and Food Services $47,450 4.1% None of the Loan Healthcare and Social Assistance $15,510 13% Balances Within “At- Risk” Industries Are Retail Trade $24,788 13%. Curr

  30. Slide 30: Historically Strong Asset Quality

    First Northwest Bancorp Historically Strong Asset Quality NPAs / Assets (%) NCOs / Avg. Loans (%) ose t 0.07 0.08 0.02 mt O 2o16y 2017" 20187 2019" 20207 20167 2017 2018v 2019 2020¥ Loan Loss Reserve / Total Loans (%) ——— * Growth focused on low-risk asset classes such as Multi-Family (~ Aili fTotal

  31. Slide 31: 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 sh

  32. Slide 32: Bank Level Capital Ratios

    First Northwest Bancorp Bank Level Capital Ratios TCE / TA (%) Leverage Ratio (%) 20167 2017¥ 2o1ey 2019" 2o20y 2o16y 20177 2o1sy 2019 20207 Tier 1 Capital Ratio (%) Total RBC Ratio (%) a5 209 180 wa 175 134 20167 2017" 201 2o19¥ 20207 2o16y 20177 2018y 2019 20207 Investor Presentation aen2. 202 Sae

  33. Slide 33: Capital Metrics

    First Northwest Bancorp Capital Metrics $1830 $1800 31730 $1700 $1650 $1600 31590 $1500 $1450 Tangible Book Value Per Share $1820 $1748 s1707 S168 lJ ] 4a2019 12020202020 3a2020 © 4a.2020 Investor Presentation Tangible Common Equity Ratio aK 118% 12.6% 19% UJ : a2: 102020 ©2020 © sam 402020

  34. Slide 34: Consolidated Historical Balance Sheet

    First Northwest Bancorp, Consolidated Historical Balance Sheet ste Yoo En forthe user toa a 21 el Gao Ga sets $00) “ot cashand Gah uvalens cay =e eis Tort oo Ea eis Avalos torsl Sector 22.9607 18380 a6 sys a7 seg 6 Heist kotntySecates 350 - Othe Seetes ‘o07 fon rs. son sou son Total cash Secures are

  35. Slide 35: Consolidated Historical Income Statement

    First Northwest Bancorp, Consolidated Historical Income Statement For the Vear Ending, 2018 20197 aay Net interest income 36,792 37,865, 3,958 Provision for Loan Losses a7 69 5.086 Loan and Deposit Fees 4167 3.893 3484 ‘Mortgage Servicing Fees, Net 188 176 137 Net Gain on Sale of toans 7 077 6433 ‘N

  36. Slide 36: Market Footprint

    First Northwest Bancorp, Market Footprint 13 locations: — 6 Branches in Clallam and Jefferson Counties — 2Branches in Kitsap County — 2Branches in Whatcom County 1 Lending Center in King County © branches ows © Lending center

  37. Slide 37: Thank you

    ‘S First Northwest Bancorp Thank you Contact Matt Deines Geri Bullard —— president and C0 eiero = First Fed matt denes@ourtstfed com sev.bulard@ourtistfed com

First Northwest Bancorp — Q4 2020 Earnings Presentation on 6ix