First Northwest Bancorp (FNWB) Delivers Modest Sequential Earnings Gain in Q2 2026
Key Takeaways
- First Northwest Bancorp reported second quarter 2026 net income of $308,000, or $0.03 per diluted share, up from $6,000 in the prior quarter but down from $3.7 million a year earlier.
- Net interest margin eased to 2.95%, below the 3.03% recorded in the first quarter but above 2.83% a year ago.
- Customer deposits increased $11.3 million to $1.55 billion, while net loans receivable declined $15.9 million to $1.60 billion as the bank continued rebalancing its portfolio.
- First Fed Bank's total risk-based capital ratio remained solid at 13.4%, and the company recorded a $337,000 recapture of its loan-loss provision.
- Total revenue of roughly $16.2 million came in slightly below the approximately $17 million consensus estimate, while the $0.03 per-share result reflected a modest but positive sequential improvement.
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Earnings in Perspective
First Northwest Bancorp, the holding company for First Fed Bank, has spent the past several quarters working to stabilize profitability after a difficult 2025 marked by an elevated credit-loss provision, a suspended dividend, and ongoing litigation. The second quarter 2026 report matters because it shows whether the bank can hold its improved deposit franchise and net interest margin while managing a shrinking loan book and persistently high professional and legal fees. For investors, the results offer a read on the bank's capital discipline, credit quality, and ability to return to sustainable earnings. With customer deposits still growing and capital ratios holding steady, the quarter provides an important checkpoint on the bank's broader turnaround. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Q2 Results
First Northwest Bancorp reported second quarter 2026 net income of $308,000, or $0.03 per basic and diluted share, compared with $6,000 in the first quarter of 2026 and $3.7 million in the second quarter of 2025. Net interest income was $14.2 million, while total interest income reached $25.5 million.
The bank's net interest margin eased to 2.95%, down from 3.03% in the first quarter but still above the 2.83% recorded a year earlier. Customer deposits increased $11.3 million to $1.55 billion, reflecting ongoing growth in the deposit franchise. Net loans receivable, excluding loans held for sale, decreased $15.9 million to $1.60 billion as management continued to rebalance the portfolio. The company also recorded a $337,000 recapture of its provision for credit losses on loans, and First Fed's total risk-based capital ratio stood at 13.4%, down modestly from 13.5% in the prior quarter. Total revenue of roughly $16.2 million came in slightly below the approximately $17 million consensus estimate.
Market Reaction and Investor Sentiment
Sentiment around First Northwest Bancorp (FNWB) remains cautious, reflecting the bank's modest profitability and a number of unresolved factors that weigh on the shares. The company has prioritized capital conservation, having previously elected not to declare a dividend, and it continues to defend itself against two significant legal proceedings involving the 3|5|2 Capital and Socotra REIT matters. These disputes have kept professional and legal expenses elevated and remain a key source of uncertainty for investors. The modestly positive sequential earnings result and steady deposit growth offer some reassurance, but the shrinking loan book and margin moderation have limited enthusiasm. Overall, the market appears focused on whether the bank can translate stabilizing fundamentals into more meaningful, sustainable earnings.
Forward Outlook and Key Factors to Monitor
Looking ahead, the bank's next earnings release is scheduled for late October 2026, providing a near-term catalyst for investors to assess whether the deposit and margin trends seen in the second quarter continue.
A central question is the trajectory of net interest margin. While the 2.95% level remains above year-ago figures, the sequential decline from 3.03% suggests funding-cost relief may be leveling off. Investors will watch whether the bank can defend the margin as its higher-cost liabilities mature and competitive pressure on deposits persists.
Credit quality and capital also remain in focus. The $337,000 recapture of loan-loss provisions points to improving asset quality, but any reversal would quickly change the earnings picture. Meanwhile, the bank's total risk-based capital ratio of 13.4% keeps it comfortably within regulatory requirements, supporting the case for a future return to shareholder distributions.
Finally, the outcome of the ongoing litigation, expense management, and any progress in rebuilding the loan portfolio will be key variables. The bank has signaled a strategy of supplementing organic growth with wholesale loan acquisitions while managing credit risk prudently, making loan-growth trends and noninterest expense control important indicators to monitor in the quarters ahead.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
FNWB's RSI Indicator ascends from oversold territory
The RSI Indicator for FNWB moved out of oversold territory on October 20, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 31 similar instances when the indicator left oversold territory. In 23 of the 31 cases the stock moved higher. This puts the odds of a move higher at 74%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
The Moving Average Convergence Divergence (MACD) for FNWB just turned positive on October 09, 2026. Looking at past instances where FNWB's MACD turned positive, the stock continued to rise in 26 of 42 cases over the following month. The odds of a continued upward trend are 62%.
Following a +1.44% 3-day Advance, the price is estimated to grow further. Considering data from situations where FNWB advanced for three days, in 181 of 270 cases, the price rose further within the following month. The odds of a continued upward trend are 67%.
FNWB may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 02, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on FNWB as a result. In 49 of 74 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 66%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FNWB declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 68%.
The Aroon Indicator for FNWB entered a downward trend on October 16, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 3 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 34 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.580) is normal, around the industry mean (1.271). P/E Ratio (56.765) is within average values for comparable stocks, (13.247). Projected Growth (PEG Ratio) (0.140) is also within normal values, averaging (1.190). Dividend Yield (0.029) settles around the average of (0.035) among similar stocks. FNWB's P/S Ratio (1.303) is slightly lower than the industry average of (3.738).
The Tickeron Price Growth Rating for this company is 59 (best 1 - 100 worst), indicating fairly steady price growth. FNWB’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 76 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FNWB’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 56, placing this stock worse than average.
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a regional bank
Industry RegionalBanks