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First Northwest Bancorp (FNWB) Risk Analysis
Risk Overview Q4, 2025
Source: the company's latest filing for the period ended Dec 31, 2025, filed Mar 12, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1The price of our common stock may be volatile or may decline.
During the year ended December 31, 2025, our stock price fluctuated from a low of $6.96 to a high of $11.88. The price of our common stock may fluctuate in response to various factors, some of which are outside our control. These factors include the risk factors discussed herein, as well as: - actual or anticipated quarterly fluctuations in our results of operations and financial condition; - changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts and rating agencies; - speculation or changes in perception in the press or investment community; - strategic actions and announcements by us or our competitors, such as acquisitions or restructurings; - actions by institutional stockholders; - addition or departure of key personnel; - fluctuations in the stock price and operating results of our competitors; - general market conditions and, in particular, market conditions in the financial services industry; - anticipated, proposed or adopted regulatory changes or developments; - cyclical fluctuations; - trading volume of our common stock; and - anticipated or pending investigations, proceedings or litigation that involve or affect us. Industry factors, general economic and political conditions and events, such as cybersecurity incidents or terrorist attacks, economic downturn or recessions, interest rate changes, credit default trends, currency fluctuations, changes to fiscal, monetary or trade policies, or public health issues could also cause our stock price to decline regardless of our operating results. A significant decline in our stock price could result in substantial losses for stockholders.
- Accounting & Financial Operations - Risk 2As a holding company, First Northwest depends on dividends and distributions from First Fed for liquidity and to pay dividends, if any.
First Northwest derives most of its cash flow from dividends paid by First Fed. These dividends are the primary source from which we may pay dividends on our common stock, if any, and principal and interest on our debt obligations. Various federal and Washington laws and regulations, as well as regulatory expectations, limit the amount of dividends that First Fed may pay to First Northwest. See Item 1, "Business – How We Are Regulated," of this Form 10-K for a discussion of regulatory requirements applicable to dividends by First Northwest and First Fed. Through May 2025, we historically declared cash dividends on our common stock. However, we have not done so since then, as part of a prudent approach to capital management. We are not required to pay dividends and there can be no assurance we will resume doing so in the future. Failure to pay dividends could adversely affect the market price of our common stock.
- Accounting & Financial Operations - Risk 3If we fail to maintain effective internal control over financial reporting or remediate any future material weakness in our internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Effective internal control over financial reporting is necessary for us to provide reliable reports and prevent fraud. We may not be able to identify all significant deficiencies and/or material weaknesses in our internal control over financial reporting in the future, and our failure to maintain effective internal control over financial reporting could have an adverse effect on our business, financial condition, and results of operations. We have in the past identified and may in the future identify material weaknesses or significant deficiencies in our internal control over financial reporting, which require remediation. A material weakness is defined by the standards issued by the PCAOB as a deficiency, or combination of deficiencies, in internal control over financial reporting that results in a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The existence of a material weakness precludes management from concluding that internal control over financial reporting is effective and precludes our independent registered public accounting firm from rendering their report addressing an assessment of the effectiveness of our internal control over financial reporting. In addition, disclosures of deficiencies of this type in our SEC reports could cause investors to lose confidence in our financial reporting, may negatively affect the market price of our common stock, and could result in the delisting of our securities from the securities exchanges on which they trade. Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our internal control over financial reporting, such deficiencies may adversely affect us.
- Debt & Financing - Risk 4We may be impacted by the actions, soundness or creditworthiness of other financial institutions, which can cause disruption within the industry and increase expenses.
Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. We execute transactions with various counterparties in the financial industry, including broker-dealers, commercial banks, and investment banks. Defaults or failures of financial services institutions and instability in the financial services industry in general can lead to market-wide liquidity problems, increased credit risk and withdrawals of uninsured deposits. Such events could adversely affect our business, results of operations, and financial condition, as well as the market price and volatility of our common stock. Bank failures may increase the risk of a recession or lead to regulatory changes and initiatives, such as enhanced capital, liquidity, or risk management requirements, which could adversely impact us. Changes to laws or regulations, or the imposition of additional restrictions through supervisory or enforcement activities, could have a material impact on our business. Regulatory changes could also adversely impact our ability to access funding, increase the cost of funding, limit our access to capital markets, and negatively impact our overall financial condition. For example, certain bank failures in 2023 resulted in a special assessment by the FDIC to replenish the DIF.
- Debt & Financing - Risk 5We may not be able to measure and limit our credit risk adequately, which could adversely affect our profitability.
At December 31, 2025, our nonperforming assets, which consist of nonaccrual loans, real estate owned and repossessed assets, were $24.0 million, or 1.1% of total assets. Our level of nonperforming assets is closely tied to the overall credit quality of our loan portfolio and the creditworthiness of our borrowers. Adverse changes in economic conditions, borrower financial performance, collateral values or other factors affecting credit risk could result in an increase in delinquencies, defaults and nonaccrual loans. Nonperforming assets adversely affect our net income in various ways. If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our nonperforming assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations.
- Corporate Activity and Growth - Risk 6Our enterprise risk management program may not be effective at mitigating the risks to which we are subject, based upon our size, scope, and complexity.
We have established processes and procedures intended to identify, measure, monitor, report, and analyze the types of risk to which we are subject, including capital, market, liquidity, credit, operational, compliance, legal, strategic, technology and reputational risks. Although we seek to manage our exposure to such risks, and employ a broad and diverse set of risk monitoring and mitigation techniques in the process, those techniques are inherently limited because they cannot anticipate the existence or development of risks that are currently unknown or unanticipated. Any system of control and any system to reduce risk exposure, however well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Further, in some cases we use analytical or forecasting models in our management of risks. If the models are inadequate, or are subject to ineffective governance, our risk management program may also prove ineffective. Actions taken to mitigate identified risks may prove less effective than anticipated. If our risk management program proves ineffective, we could suffer unexpected losses and reputational damage.
Risk Highlights Q4, 2025
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 33
- Share Price & Shareholder Rights - Risk 1AddedThe price of our common stock may be volatile or may decline.
During the year ended December 31, 2025, our stock price fluctuated from a low of $6.96 to a high of $11.88. The price of our common stock may fluctuate in response to various factors, some of which are outside our control. These factors include the risk factors discussed herein, as well as: - actual or anticipated quarterly fluctuations in our results of operations and financial condition; - changes in revenue or earnings estimates or publication of research reports and recommendations by financial analysts and rating agencies; - speculation or changes in perception in the press or investment community; - strategic actions and announcements by us or our competitors, such as acquisitions or restructurings; - actions by institutional stockholders; - addition or departure of key personnel; - fluctuations in the stock price and operating results of our competitors; - general market conditions and, in particular, market conditions in the financial services industry; - anticipated, proposed or adopted regulatory changes or developments; - cyclical fluctuations; - trading volume of our common stock; and - anticipated or pending investigations, proceedings or litigation that involve or affect us. Industry factors, general economic and political conditions and events, such as cybersecurity incidents or terrorist attacks, economic downturn or recessions, interest rate changes, credit default trends, currency fluctuations, changes to fiscal, monetary or trade policies, or public health issues could also cause our stock price to decline regardless of our operating results. A significant decline in our stock price could result in substantial losses for stockholders.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
