Note 8 - Borrowings

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Federal Home Loan Bank Advances, Disclosure [Text Block]

Note 8 - 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 has entered into borrowing arrangements with the FHLB to borrow funds under long-term, fixed-rate advance agreements; overnight borrowings through FHLB which renew daily until paid; and, as an alternative source of funds, fixed-rate advances maturing in less than one year. All borrowings are secured by collateral consisting of single-family, home equity, commercial real estate, and multi-family loans receivable in the amounts of $753.6 million and $699.5 million at  December 31, 2022 and 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. No funds have been borrowed to date. Investment securities with a carrying value of $8.9 million were pledged to the FRB at  December 31, 2022.

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 intends to use the net proceeds of the offering for general corporate purposes.

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, with the option for two 364-day extensions.

FHLB advances, line of credit, and subordinated debt outstanding by type of advance were as follows:

	December 31, 2022		December 31, 2021
	(In thousands)
Long-term advances	$	80,000	$	80,000
Short-term fixed-rate advances		10,000		—
Overnight variable-rate advances		144,000		—
Line of Credit		12,000		—
Subordinated debt, net		39,358		39,280

The maximum and average outstanding balances and average interest rates on FHLB overnight variable-rate advances were as follows:

	For the Year Ended December 31,
	2022			2021
	(Dollars in thousands)
Maximum outstanding at any month-end	$	206,000		$	40,000
Monthly average outstanding		90,983			5,207
Weighted-average daily interest rates
Annual		2.83	%		0.30	%
Period End		4.30	%		0.31	%
Interest expense during the period		1,845			6

The maximum and average outstanding balances and average interest rates on FHLB short-term, fixed-rate advances were as follows:

	For the Year Ended December 31,
	2022			2021
	(Dollars in thousands)
Maximum outstanding at any month-end	$	42,500		$	—
Monthly average outstanding		15,208			—
Weighted-average daily interest rates
Annual		1.82	%		—	%
Period End		2.12	%		—	%
Interest expense during the period		246			—

The maximum and average outstanding balances and average interest rates on FHLB long-term, fixed-rate advances were as follows:

	For the Year Ended December 31,
	2022			2021
	(Dollars in thousands)
Maximum outstanding at any month-end	$	80,000		$	80,000
Monthly average outstanding		80,000			52,500
Weighted-average interest rates
Annual		1.52	%		1.46	%
Period End		1.52	%		1.52	%
Interest expense during the period		1,260			768

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

	December 31, 2022					December 31, 2021
	Amount		Weighted- Average Interest Rate			Amount		Weighted- Average Interest Rate
	(Dollars in thousands)
Within one year or less	$	15,000		1.54	%	$	—		—	%
After one year through two years		15,000		1.47			15,000		1.54
After two years through three years		25,000		1.42			15,000		1.47
After three years through four years		15,000		1.55			25,000		1.42
After four years through five years		10,000		1.76			15,000		1.55
After five years		—		—			10,000		1.76
	$	80,000		1.52	%	$	80,000		1.52	%

The maximum and average outstanding balances and average interest rates on the line of credit were as follows:

	For the Year Ended December 31,
	2022			2021
	(Dollars in thousands)
Maximum outstanding at any month-end	$	12,000		$	—
Monthly average outstanding		5,770			—
Weighted-average interest rates
Annual		6.76	%		—	%
Period End		8.00	%		—	%
Interest expense during the period		389			—

The maximum and average outstanding balances and average interest rates on subordinated debt were as follows:

	For the Year Ended December 31,
	2022			2021
	(Dollars in thousands)
Maximum outstanding at any month-end	$	39,358		$	39,310
Monthly average outstanding		39,312			30,370
Weighted-average interest rates
Annual		4.01	%		3.96	%
Period End		4.01	%		3.06	%
Interest expense during the period		1,577			1,203