First Northwest Bancorp third quarter 2026 loss driven by $1.3M legal settlement

First Northwest Bancorp reported a net loss for the third quarter of 2026, primarily due to a nonrecurring litigation settlement and increased credit provisions. Despite the bottom-line loss, the core banking operation demonstrated resilience with sequential net interest margin expansion and a shift toward lower-cost customer deposits.

Key Highlights

• Net interest margin expanded to 2.96% from 2.95% in the second quarter of 2026.
• Total customer deposits increased by $27.0 million, allowing the bank to reduce reliance on higher-cost brokered funding.
• Noninterest expense reached $17.3 million, impacted by a $1.3 million litigation settlement charge.
• Credit quality showed mixed results as nonperforming loans fell to $19.9 million while the allowance for credit losses increased to 1.03% of total loans.