First Northwest Bancorp (FNWB): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of First Northwest Bancorp's (FNWB) current position, and honestly, the BCG matrix is the perfect tool to map their strategic trade-offs right now. We need to see where the capital is working and where it's just sitting. Right now, FNWB is showing real strength in its Stars quadrant, driven by core deposit growth of $19.6$ million in Q2 2025 and a Net Interest Margin hitting 2.83%, all while relying on the steady income from its $1.55$ billion deposit base, the Cash Cow. However, this is balanced against the drag of $20.4$ million in nonperforming loans in the Dogs category and the high-risk/high-reward nature of the Question Marks, especially following $1.428$ million in commercial loan charge-offs in Q1 2025 and the uncertainty of the new CEO transition in Q3 2025. Let's dive into the specifics to see where FNWB needs to focus its next round of capital allocation.

Background of First Northwest Bancorp (FNWB)

You're looking at First Northwest Bancorp (FNWB), which is the holding company for First Fed Bank, a financial institution rooted in the Pacific Northwest since 1923. Honestly, the company has been around for a while, but it officially became the entity you see today when it was incorporated in 2012 and later went public in 2015. Its corporate home base is Port Angeles, Washington.

The core of First Northwest Bancorp's business, through First Fed Bank, is building sustainable earnings by offering a full suite of financial products. This means they focus on serving individuals, small businesses, non-profit organizations, and commercial customers across their network. As of late 2025, they operate about 16 locations across Washington state, including roughly 12 full-service branches.

When we look at their lending focus, it's quite broad, which is typical for a regional bank. Their principal lending activities center on first lien one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, commercial business loans, and consumer loans. For context, as of the second quarter of 2025, their total customer deposits stood at about $1.55 billion.

To be fair, First Northwest Bancorp isn't just about traditional banking; they've also made strategic moves into the fintech space. Back in 2022, they invested in The Meriwether Group, LLC, which is a boutique investment banking and accelerator firm. This shows they are actively pursuing strategic partnerships to bring in modern financial services like digital payments and marketplace lending, which you'll want to track as we map out their portfolio.

Looking at the most recent top-line figures we have, the trailing twelve-month revenue as of September 30, 2025, was approximately $66 million. You might also note that their net interest margin has shown some positive momentum, hitting 2.91% for the third quarter of 2025, marking five consecutive quarters of improvement. That kind of consistency in a key metric is definitely something to keep in mind.

First Northwest Bancorp (FNWB) - BCG Matrix: Stars

You're looking at the business units or products within First Northwest Bancorp that are currently dominating a growing market segment, demanding significant investment to maintain that lead. These are the areas where market share is high and the market itself is expanding, which is exactly what we see in several core operational metrics for First Northwest Bancorp as of mid-2025.

The traction in local relationship banking is a clear indicator of a strong market position in core services. We see this directly reflected in the deposit base growth, which is a key measure of local market share in banking. This success in gathering core funding is what fuels the growth engine.

The profitability profile is also showing strong upward momentum, which is crucial for a Star that needs cash to fuel its growth. The expansion in the Net Interest Margin (NIM) suggests that First Northwest Bancorp is effectively managing its asset pricing relative to its funding costs in a competitive environment. This margin improvement signals high-growth potential in the core lending business.

Here's a quick look at the key performance indicators from the second quarter of 2025 that define this Star quadrant performance:

The Adjusted PPNR growth is particularly noteworthy. It moved to $2.1 million in Q2 2025, up from $1.5 million in the preceding quarter. This consistent quarterly increase demonstrates that the underlying business operations are strengthening their ability to generate revenue before considering credit provisions, a definite sign of a market leader in a growth phase.

To sustain this Star status, First Northwest Bancorp is strategically investing in segments that represent the future of finance. This is where the high cash consumption of a Star is directed-into areas promising future high returns and market share capture. The focus here is on modernizing the service offering, which is essential for long-term transition into a Cash Cow.

The strategic investments supporting this high-growth category include:

• Strategic focus on digital payments.
• Marketplace lending partnerships.
• A modern FinTech segment focus.

If First Northwest Bancorp maintains this market share success as the overall market growth rate for these specific services eventually slows, these units are positioned to mature into the Cash Cow quadrant, providing stable, high returns with lower reinvestment needs. The current strategy is definitely about feeding these Stars now.

First Northwest Bancorp (FNWB) - BCG Matrix: Cash Cows

Cash Cows for First Northwest Bancorp (FNWB) are anchored in its established, mature regional presence, providing a reliable source of funding and steady income generation, which is characteristic of a high market share in a low-growth segment.

No. 1 Deposit Market Share in Clallam County, Washington, provides a stable, low-cost funding base in their legacy market. This local leadership is evidenced by past accolades, such as being recognized with the 'Best Bank in Clallam County' award in 2024.

The overall customer deposit base of $1.55 billion as of June 30, 2025, generates predictable, recurring net interest income. This core funding base is crucial for supporting lending activities and covering corporate overhead. The Net Interest Margin (NIM) for the second quarter of 2025 stood at 2.83%, reflecting effective management of funding costs relative to asset yields.

The established portfolio of first lien one- to four-family mortgage loans represents a mature, low-growth, and steady income stream. The bank's principal lending activities are focused here, alongside commercial and multi-family real estate loans, construction and land loans, commercial business loans, and consumer loans.

The Bank-Owned Life Insurance (BOLI) portfolio provides a reliable, non-volatile stream of non-interest income, serving as a steady, though non-core, contributor to overall earnings stability.

You should note the composition of the earning assets as of March 31, 2025, to understand where this cash flow is generated. The total loan portfolio was $2.68 billion at that time. Here's a quick look at the core loan mix:

The stability of these Cash Cow segments allows First Northwest Bancorp to fund other strategic areas. For instance, the company declared a quarterly cash dividend of $0.07 per common share in the first quarter of 2025, translating to an annual dividend of $0.14 per share, which is a direct return of cash generated by these mature businesses.

The characteristics supporting the Cash Cow designation include:

• High Market Share: Confirmed local leadership in the legacy Clallam County market.
• Stable Funding: Core customer deposits reached $1.55 billion as of June 30, 2025.
• Steady Income: Net Interest Margin at 2.83% in Q2 2025.
• Shareholder Return: Consistent dividend payments, such as the $0.07 per share declared for Q1 2025.

To maintain this status, the focus should be on efficiency. The second quarter of 2025 saw the efficiency ratio improve to 78.0% from 113.5% in the preceding quarter, which is exactly the kind of infrastructure support investment that maximizes cash flow from these stable units.

First Northwest Bancorp (FNWB) - BCG Matrix: Dogs

You're looking at the units within First Northwest Bancorp (FNWB) that operate in low-growth markets and carry a low market share. These are the classic Dogs-assets that frequently break even, neither earning nor consuming significant cash, but still tying up capital. They are prime candidates for divestiture because expensive turn-around plans usually don't help much. For FNWB, this quadrant highlights areas where capital is currently trapped, such as the $20.4 million in nonperforming loans reported in Q2 2025, which you can view as low-growth, capital-consuming problem assets that require active management or resolution.

Here's a quick look at the key metrics characterizing these low-momentum areas as of the second quarter of 2025:

One clear action First Northwest Bancorp is taking to minimize cash traps is running down higher-cost funding sources. You saw a deliberate $31.0 million reduction in brokered Certificates of Deposit (CDs) during Q2 2025. This move helps improve the overall funding mix, as customer deposits actually increased by $19.6 million during the same period, suggesting a positive shift away from more expensive, potentially less stable, wholesale funding, even if it means a temporary dip in total deposits. Honestly, shedding high-cost liabilities is a necessary step when dealing with Dogs.

Asset quality remains a watch area, particularly within commercial real estate (CRE) lending. The concentration risk here is notable; 77% of classified loans are tied up in just four collateral-dependent relationships. This level of concentration in problem assets within a low-growth segment is defintely a red flag for potential future write-downs, even if the overall nonperforming loan balance held steady quarter-over-quarter at $20.4 million.

Furthermore, the revenue stream from non-interest income reflects the normalization away from prior quarter anomalies. The segment settled at $2.2 million in Q2 2025. This follows a period where Q1 was inflated by nonrecurring items that won't repeat, which you should factor in when assessing baseline performance. These one-time gains included:

• Nonrecurring $1.1 million BOLI (Bank Owned Life Insurance) death benefit.
• A $0.85 million gain on extinguishment of debt.

The move to normalize this income stream suggests management is focusing on recurring operational results rather than one-off boosts to mask underlying performance in these lower-growth areas.

First Northwest Bancorp (FNWB) - BCG Matrix: Question Marks

You're looking at business units that are burning cash now but have the potential to be future Stars. For First Northwest Bancorp (FNWB), these are areas where growth is high, but market penetration is still low, demanding significant capital infusion to gain traction.

Investment in Meriwether Group, a boutique investment banking firm, represents one such area. This strategic investment, formalized back in 2022, positions First Northwest Bancorp to act like a modern-day merchant bank, focusing on high-growth business opportunities outside core banking. While the initial investment was made years ago, its current status as a Question Mark is supported by the fact that in the third quarter of 2025, there was a period-over-period decrease in the value of equity and fintech partnership investments, which includes this venture. The associated Meriwether Group Capital's Hero Fund is targeting growth from nearly $22 million in assets under management to $50 million in its next phase.

Commercial business loans show a classic Question Mark tension: high risk indicated by charge-offs, but the potential for high yield if asset quality stabilizes. In the first quarter of 2025, First Northwest Bancorp recorded $1.428 million in charge-offs across commercial business, construction, and consumer loans, contributing to a provision for credit losses on loans of $1.553M for that quarter. This level of credit cost remains a headwind, consuming capital that could otherwise be deployed elsewhere.

The new CEO transition in the third quarter of 2025 introduces high strategic uncertainty, which is characteristic of a Question Mark. Matthew P. Deines resigned as President and CEO effective July 12, 2025, with Geraldine L. Bullard serving as Interim CEO starting July 13, 2025. Curt Queyrouze was appointed the new CEO and President, starting on September 17, 2025. This leadership change, following the departure of the previous CEO in July 2025, creates a period of high uncertainty regarding the direction of strategic investments and resource allocation, which is a major cash consumer until the new strategy is proven.

The digital banking platform expansion into emerging markets, such as King County, requires significant upfront investment for uncertain market share gains. While specific King County data isn't available, the overall investment posture is reflected in the financial statements. Noninterest expense increased $4.6 million to $17.4 million for the third quarter of 2025, compared to $12.8 million for the preceding quarter. This substantial increase suggests heavy investment in operations, technology, or growth initiatives that have not yet translated into commensurate market share or returns, fitting the Question Mark profile.

Here's a quick look at the financial markers associated with these high-growth, high-cash-consumption areas as of the latest reporting:

These Question Marks require immediate strategic triage. You need to decide which areas warrant heavy investment to rapidly capture market share, and which need to be divested before they become Dogs.

• Invest heavily in digital expansion if market adoption curves show rapid acceleration.
• Quickly resolve classified commercial loan relationships to stop cash drain.
• Monitor new CEO Curt Queyrouze's initial strategic directives closely.
• Assess the near-term viability of the Meriwether Group investment portfolio.

Finance: draft 13-week cash view by Friday.