PORT ANGELES, Wash. - First Northwest Bancorp (NASDAQ: FNWB), parent company of First Fed Bank, announced the termination of the Consent Order issued by the Federal Deposit Insurance Corporation (FDIC) on November 21, 2023. The order, which addressed deficiencies in the bank's compliance program, was lifted on Sunday following First Fed's rectification efforts.
Matthew P. Deines, CEO of First Fed, expressed gratitude to the compliance team and the board for their efforts in resolving the issues within the 11-month period. This development marks the bank's successful overhaul of its compliance management system, which has been acknowledged by the FDIC.
In a separate but related announcement, First Northwest Bancorp's Board of Directors declared a quarterly cash dividend of $0.07 per common share, payable on November 22, 2024, to shareholders of record by November 8, 2024. Deines highlighted the importance of dividends in building shareholder value and noted the company's solid capital position to sustain such payouts.
First Fed Bank has been serving the Pacific Northwest since 1923 and currently operates 12 full-service branches among its 16 locations in Washington state. The bank's strategy focuses on delivering comprehensive financial services to individuals, small businesses, non-profit organizations, and commercial clients. In 2022, First Northwest invested in The Meriwether Group, LLC, and continues to engage in strategic partnerships to offer modern financial solutions.
The press release also contained forward-looking statements, cautioning that actual results could vary due to numerous factors, including market and economic conditions, regulatory changes, and other risks detailed in the company's SEC filings.
This news comes as part of First Northwest Bancorp's ongoing efforts to inform shareholders and the public about its financial health and strategic direction, based on a press release statement.
In other recent news, First Northwest Bancorp faced a significant revision in its second-quarter 2024 financial results, identifying a material weakness that led to an additional $6.6 million in net charge-offs. This development necessitated an increase in its provisioning by an additional $4.5 million and resulted in a net loss of $6.4 million. Analyst firm Piper Sandler subsequently adjusted its price target for the company down to $11.00, maintaining a neutral rating.
Furthermore, First Northwest Bancorp has seen changes in its earnings estimates by Piper Sandler due to its second-quarter performance. The firm revised the 2024 estimate to $0.00, a decrease of $0.50, but increased the 2025 earnings estimate to $1.20, reflecting improved net interest margin and operating expense outlooks.
In response to these challenges, First Northwest Bancorp has implemented measures to enhance profitability, such as a branch sale-leaseback, a partial securities restructuring, and a recently announced 9% Reduction in Force. Despite these efforts, Piper Sandler maintains a neutral stance due to the bank's below-average profitability forecast.
In other developments, First Northwest Bancorp has promoted Kyle Henderson to the role of Chief Credit Officer, succeeding Terry Anderson. These recent developments reflect the ongoing adjustments and strategic measures undertaken by First Northwest Bancorp in response to its financial performance and market conditions.
InvestingPro Insights
As First Northwest Bancorp (NASDAQ: FNWB) celebrates the termination of the FDIC Consent Order and announces its quarterly dividend, a closer look at the company's financials reveals some interesting insights.
According to InvestingPro data, FNWB's market capitalization stands at $90.93 million, reflecting its position as a smaller regional bank. The company's price-to-book ratio of 0.56 suggests that the stock may be undervalued relative to its book value, which could be of interest to value investors considering the recent positive developments.
However, InvestingPro Tips highlight some challenges. The company is not profitable over the last twelve months, with a negative P/E ratio of -76.41. This aligns with the reported basic and diluted EPS of -$0.13 for the same period. Additionally, FNWB suffers from weak gross profit margins, which may impact its ability to generate robust earnings in the near term.
On a more positive note, the announced quarterly dividend translates to a dividend yield of 2.7%, which could be attractive to income-focused investors. This dividend policy, as mentioned by CEO Matthew P. Deines, underscores the company's commitment to shareholder value despite current profitability challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for FNWB, providing a deeper understanding of the company's financial health and prospects.
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