Note 5 - Borrowings

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note 5 - Borrowings

First Fed is a member of the FHLB. As a member, First Fed has a committed line of credit of up to 40% of total assets, subject to the amount of FHLB stock ownership and certain collateral requirements.

First Fed maintains borrowing arrangements with the FHLB to borrow funds primarily under long-term, fixed-rate advance agreements. First Fed also has overnight borrowings through FHLB which renew daily until paid. First Fed periodically uses fixed-rate advances maturing in less than one year as an alternative source of funds. All borrowings are secured by collateral consisting of single-family, home equity, commercial real estate, and multi-family loans receivable in the amounts of $648.1 million and $699.6 million at  June 30, 2022 and December 31, 2021, respectively.

First Fed also has an established borrowing arrangement with the Federal Reserve Board of San Francisco ("FRB") to utilize the discount window for short-term borrowing. Available borrowing capacity was $8.7 million and $17.3 million at  June 30, 2022 and December 31, 2021, respectively. No funds have been borrowed to date. Investment securities with a carrying value of $9.3 million and $17.2 million were pledged to the FRB at  June 30, 2022 and December 31, 2021, respectively.

On March 25, 2021, the Company completed a private placement of $40.0 million of 3.75% fixed-to-floating rate subordinated notes due 2031 (the “Notes”) to certain qualified institutional buyers and institutional accredited investors. The net proceeds to the Company from the sale of the Notes were approximately $39.3 million after deducting placement agent fees and other offering expenses. The Notes have been structured to qualify as Tier 2 capital for the Company for regulatory capital purposes. The Company used the net proceeds of the offering for general corporate purposes and provided $20.0 million to the Bank as Tier 1 capital.

On May 20, 2022, First Northwest entered into a borrowing arrangement with NexBank for a $20.0 million revolving line of credit. Borrowings are secured by a blanket lien on First Northwest's personal property assets (with certain exclusions), including all the outstanding shares of First Fed, cash, loans receivable, and limited partnership investments. The line of credit matures on May 19, 2023.

The following table sets forth information regarding our borrowings at the end of and during the six months ended June 30, 2022. The table includes both long- and short-term borrowings.

	FHLB Long-Term Advances			FHLB Overnight Variable-Rate Advances			FHLB Short-Term Fixed-Rate Advances			Line of Credit			Subordinated Debt, net
	(Dollars in thousands)
Balance outstanding	$	90,000		$	102,000		$	10,000		$	8,000		$	39,319
Maximum outstanding at any month-end		90,000			102,000			20,000			8,000			39,319
Average monthly outstanding during the period		83,333			43,300			8,333			1,333			39,288
Weighted-average daily interest rates
Annual		1.54	%		0.69	%		0.71	%		4.78	%		4.05	%
Period End		1.59	%		1.40	%		1.74	%		5.25	%		4.05	%

The amounts by year of maturity and weighted-average interest rate of FHLB long-term, fixed-rate advances at June 30, 2022 are as follows:

	Weighted- Average Interest Rate			Amount
	(Dollars in thousands)
Within one year or less		1.76	%	$	20,000
After one year through two years		1.47			15,000
After two years through three years		1.46			20,000
After three years through four years		1.49			15,000
After four years through five years		1.63			10,000
After five years		1.76			10,000
Total FHLB long-term advances		1.59	%	$	90,000

The following table sets forth information regarding our borrowings at the end of and during the year ended December 31, 2021. The table includes both long- and short-term borrowings.

	FHLB Long-Term Advances			FHLB Overnight Variable-Rate Advances			Subordinated Debt, net
	(Dollars in thousands)
Balance outstanding	$	80,000		$	—		$	39,280
Maximum outstanding at any month-end		80,000			40,000			40,000
Average monthly outstanding during the period		52,500			5,207			30,370
Weighted-average daily interest rates
Annual		1.46	%		0.30	%		3.96	%
Period End		1.52	%		0.31	%		3.01	%