First Northwest Bancorp (FNWB) PT Lowered to $11 at Piper Sandler

Piper Sandler analyst Nathan Race lowered the price target on First Northwest Bancorp (NASDAQ: FNWB) to $11.00 (from $12.50) while maintaining a Neutral rating.

The analyst commented ,"After the close Friday, FNWB released an 8-K announcing the identification of a material weakness in its 2Q24 financial results and the subsequent determination to recognize an additional $6.6M in NCOs ($7.5M total in 2Q24). These higher NCOs are tied to certain loans in FNWB's commercial C&D, C&I, and Splash (third party consumer) loan portfolios. An additional $4.5M in provisioning ($8.7M total in 2Q24) results in a -$3.6M (or -$0.41 p/s) reduction in FNWB's 2Q24 core net income to -$6.4M (or -$0.72 in operating EPS vs. -$0.31 previously). TBV for 2Q24 comes down to $16.64 (from $17.08 or -3%). While we were aware of a few problem loans coming out of 2Q, we are disappointed by the additional charge-offs tied to these borrowers. We understand there are opportunities to recover some of these losses over time and expect to learn more after FNWB releases 3Q results on Tuesday (10/29)."

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