First Northwest Bancorp · NASDAQ:FNWB

First Northwest Bancorp — Q3 2021 Earnings Presentation

25 slides from First Northwest Bancorp's earnings presentation, October 2021

  1. Slide 1: Investor Presentation Third Quarter 2021

    Investor Presentation Third Quarter 2021 October 2021 © 2021 FNWB 1

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

     Bank holding company for First Fed, a growing About First Northwest community bank with $1.8 billion* in assets Bancorp (FNWB)  First Fed is a Washington state‐chartered savings bank, headquartered in Port Angeles where it was founded in 1923 FNWB  16 locations: 8 in Clallam and Jefferson Counti

  3. Slide 3: First Fed Mission Statement

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

  4. Slide 4: Market Expansion

    Market Expansion  Opened first King County branch on July 26, 2021, after the acquisition of the Bellevue, Washington branch of Sterling Bank and Trust of Southfield, Michigan, adding $65.4 million in deposit accounts.  Executed lease to relocate Commercial and Mortgage Lending and Business Center

  5. Slide 5: First Fed Executive Team

    First Fed Executive Team Matt Deines (48) Terry Anderson (52) Derek Brown (50) Geri Bullard (56) President and CEO Chief Credit Officer Chief HR & Marketing Officer Chief Financial Officer Kelly Liske (44) Chris Riffle (45) Randy Riffle (45) Chief Banking Officer Chief Operating Officer | Chief Lend

  6. Slide 6: Experienced Leadership Collaborating Across PNW

    Experienced Leadership Collaborating Across PNW Name Title Location Years with First Fed Years in Industry Matthew P. Deines President, Chief Executive Officer and Director Port Angeles, Seattle 2 20+ Terry Anderson Executive VP, Chief Credit Officer Sequim 3 25+ Derek J. Brown Executive VP, Chief H

  7. Slide 7: Major Strategic Initiatives

    Major Strategic Initiatives Investment in Technology Launch of quin Marketplace Lending Fintech Partners  Deposit Account Opening  Joint Venture launched in early  Focus on leveraging our  Primary focus is on payments (Terafina) 2021 charter, credit and compliance utilizing our compliance  Mort

  8. Slide 8: Selected Balance Sheet Detail

    $1,845,137 Selected Balance Sheet Detail $1,564,670 $1,522,916 $1,345,126 $1,237,771 $1,250,310 $1,254,456 $1,150,299 $1,061,417 $970,700 $931,605 $850,933 $839,458 $841,146 $726,891 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 Loans, Net ALLL Total Deposits Total Assets © 2021 FNWB Source: Company docum

  9. Slide 9: Substantial Growth While Enhancing Asset Mix

    Substantial Growth While Enhancing Asset Mix Other BOLI Other BOLI Other BOLI Cash $34,084 $29,754 Cash $43,959 $38,104 Cash $58,921 $39,080 $56,481 3% 2% $52,079 3% 2% $76,120 3% 2% 5% 3% 4% Investments Investments Investments $325,890 $288,845 $369,111 24% 18% 23% Q3 2019 Q3 2020 Q3 2021 Total Ass

  10. Slide 10: Securities Portfolio

    Securities Portfolio Investment Portfolio Characteristics as of September 30, 2021  Book Value: $322.3 Million Corp Debt  Market Value $325.9 Million 17% Corp ABS  Effective Duration: 5.54 years 3% MBS  Average Life: 5.84 years SBA 40% 6%  Municipal Securities – Portfolio Ratings:  Aaa/AAA $23

  11. Slide 11: Building Revenue (TTM)

    Net Interest Non‐interest Building Revenue (TTM) Income 86.0% Income 14.0% TTM Total Q3 2019 Operating Revenue: 2019Q3 $55,161 $44.3M $6,249 2020Q3 2019Q3 2021Q3 2020Q3 2021Q3 Net Interest Non‐interest $40,441 Income Income $38,101 $4,380 74.8% 25.2% TTM Total Q3 2020 Operating Revenue: $54.1M $2,06

  12. Slide 12: Measurable Improved Profitability

    Measurable Improved Profitability Trailing Twelve Month Net Income ($M) Trailing Twelve Month ROAA (%) $14,110 0.82% 0.71% $8,926 0.65% $8,742 0.58% $6,240 0.40% $4,861 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 Trailing Twelve Month Efficiency Ratio (%) Trailing

  13. Slide 13: Net Interest Income and Margin

    Net Interest Income and Margin $15,500 3.70% 3.58% $14,500 3.60% 3.46% 3.48% $13,500 3.50% 3.34% $12,500 3.36% 3.40% $11,500 3.30% $10,500 3.17% 3.20% 3.14% 3.10% 3.11% $9,500 3.10% 3.10% $8,500 3.00% $7,500 2.90% $6,500 2.80% 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 1Q 2021 2Q 2021 3

  14. Slide 14: Balance Sheet Growth

    Balance Sheet Growth Actual (Ex. PPP) Actual (Ex. PPP) Total Assets ($M) Total Loans and Leases ($M) $1,845 $1,345 CAGR¹: 12.0% $1,565 CAGR¹: 15.2% $27 $1,061 $27 $1,150 $1,238 $1,250 $32 $839 $841 $727 $32 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 Total Deposit

  15. Slide 15: Leading Deposit Market Share

    Leading Deposit Market Share Clallam County, WA Whatcom County, WA Rank Institution (ST) # Branches Deposits ($M) Market Share (%) Rank Institution (ST) # Branches Deposits ($M) Market Share (%) 1 First Northwest Bancorp (WA) 7 1,012 38.7 1 Peoples Bancorp (WA) 9 1,352 24.3 2 Sound Financial Bancorp

  16. Slide 16: Strong Core Deposit Composition

    Strong Core Deposit Composition Brokered CDs (Dollars in thousands) 9/30/2021 4% Deposits by Type Balance % of Total MMDA & Savings $767,192 50.4% Retail CDs Non‐Int. Non‐Int. Checking $328,463 21.6% 12% Checking Retail CDs $189,960 12.5% 22% Interest Checking $182,181 12.0% Brokered CDs $55,120 3.6

  17. Slide 17: Loan Portfolio Composition

    Loan Portfolio Composition (Dollars in thousands) 9/30/2021 Other Consumer PPP 4% 2% Loans by Type Balance % of Total Commercial and Industrial Commercial Real Estate $353,356 26.0% 5% 1‐4 Family $333,313 24.5% Commercial Construction and Development $214,472 15.8% Auto Multi‐Family $177,560 13.1% R

  18. Slide 18: Historically Strong Asset Quality

    Historically Strong Asset Quality NPA / Assets (%) Loan Loss Reserve / Total Loans (%) 0.20 0.21 1.21 0.16 1.17 0.12 1.13 1.10 1.11 0.06 Texas Ratio ALLL/Total Loans (Ex. PPP) 2021 Q3: 0.57% 2021 Q3: 1.14% 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 NCOs / Avg. Lo

  19. Slide 19: Returning Capital to Shareholders

    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 shares at that time  As

  20. Slide 20: Bank Level Capital Ratios

    Bank Level Capital Ratios TCE / TA Leverage Ratio 11.9% 12.5% 12.2% 11.5% 11.4% 10.3% 10.6% 11.1% 10.4% 10.1% 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 Tier 1 Capital Ratio Total RBC Ratio 18.0% 17.0% 17.5% 19.1% 18.2% 18.7% 13.4% 13.4% 14.6% 14.4% 2017 Q3 2018

  21. Slide 21: Consolidated Capital Ratios

    Consolidated Capital Ratios Trailing Twelve Month Return on Avg. Equity Trailing Twelve Month Earnings per Share 7.56% $1.52 5.13% 4.94% 3.48% $0.89 $0.93 2.78% $0.58 $0.47 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 2017 Q3 2018 Q3 2019 Q3 2020 Q3 2021 Q3 Historical Book Value per Share Historical TCE

  22. Slide 22: Consolidated Historical Balance Sheet

    For the Quarter Ending 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 Assets ($000) Consolidated Total Cash and Cash Equivalents Available for Sale Securities Other Securities 52,079 369,111 5,944 65,155 364,296 5,977 99,271 393,495 3,997 80,722 370,500 5,597 76,120 325,890 4,397 Historical Total Cash & Securit

  23. Slide 23: Consolidated Historical Income Statement

    For the Quarters Ending 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 (Dollars in thousands) Consolidated Interest and fees on loans receivable Interest on mortgage‐backed and investment securities Other interest income 11,097 2,168 106 11,894 2,018 65 12,541 2,034 58 12,866 2,124 61 14,581 715 1,423 Historica

  24. Slide 24: Market Footprint

    Market Footprint 16 locations:  7 in Clallam County: 5 branches, 2 ITMs only  1 in Jefferson County  2 in Kitsap County  2 in King County: 1 branch* and a Business Center  4 in Whatcom County: 3 branches and a Business Center * Bellevue branch and team acquired from Sterling Savings Bank on Jul

  25. Slide 25: Thank You!

    Thank You! Contact Matt Deines Geri Bullard President and CEO EVP | CFO matt.deines@ourfirstfed.com geri.bullard@ourfirstfed.com © 2021 FNWB 25

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