First Northwest Bancorp Reports Third Quarter 2024 Financial Results
PORT ANGELES, Wash., Oct. 29, 2024 (GLOBE NEWSWIRE) --
CEO Commentary"This was a quarter of mixed results. Progress on customer deposit gathering and the termination of the FDIC Consent Order was overshadowed by a quarterly loss driven by additional provisions primarily related to certain equity loans made to high net worth, accredited investors.
The teamwork and collaboration between Staff, Management and the Board to address the matters identified in the Consent Order is demonstrative of the qualifications, determination and capabilities of the First Fed team. We appreciate that the FDIC acknowledged the planning, monitoring and execution required to comply with the Order and validation that all of these matters were properly addressed. I am very proud of this accomplishment, and I would like to thank all of the many people within the bank who worked tirelessly to reach this achievement less than one year after the Order was issued.
Through an internal review of our loan portfolio and with consultation with our prudential regulators, it was determined that larger provisions were required in the second quarter of 2024. As a result, we decided it was appropriate to file a restated quarterly report on Form 10-Q for the quarter ended June 30, 2024, and identified a material weakness in the design of certain internal controls. The loans for which we increased reserves were originated between 2020 and 2023. More recent vintages of our loan portfolio are performing well as we have engaged in lending and partnerships that we have evaluated as having a relatively lower risk profile. The provision for credit losses after the amendment was $8.7 million in the second quarter of 2024.
Management and the Board of Directors take the reported material weakness very seriously. We have taken corrective action to address the basis for the restatement and are working to promptly remediate.
We also acknowledge the ongoing lawsuits filed by some of the Water Station equipment borrowers. We intend to vigorously defend against these claims, which we believe are meritless. We also intend to continue pursuing collection of all monies owed by the litigants using all available legal means.
Moving forward, the highly capable bankers at First Fed are focused on continuing to build relationships with small businesses and individuals in the communities we serve. We continue to pursue inroads in SBA, treasury, maritime lending, first and second mortgage lending and community banking. We are introducing products and services to meet our customers where they are and to enhance their overall experience with First Fed. We believe that focusing on these fundamentals of Community Banking will improve our results and our overall franchise value."
-- Matthew P. Deines, President and CEO, First Northwest Bancorp
2024 FINANCIAL RESULTS
3Q 24
2Q 24
3Q 23
2024 YTD
2023 YTD
OPERATING RESULTS (in millions)
Net (loss) income
$
(2.0
)
$
(2.2
)
$
2.5
$
(3.8
)
$
7.8
Pre-provision net interest income
14.0
14.2
15.0
42.2
47.2
Provision for credit losses
3.1
8.7
0.4
12.8
0.2
Noninterest expense
15.8
15.6
14.4
45.8
44.5
Total revenue, net of interest expense *
15.8
21.6
17.9
53.5
54.2
PER SHARE DATA
Basic and diluted (loss) earnings
$
(0.23
)
$
(0.25
)
$
0.28
$
(0.43
)
$
0.87
Book value
17.17
16.81
16.20
17.17
16.20
Tangible book value *
17.00
16.64
16.03
17.00
16.03
BALANCE SHEET (in millions)
Total assets
$
2,255
$
2,216
$
2,154
$
2,255
$
2,154
Total loans
1,735
1,698
1,635
1,735
1,635
Total deposits
1,712
1,708
1,658
1,712
1,658
Total shareholders' equity
161
159
156
161
156
ASSET QUALITY
Net charge-off ratio(1)
0.10
%
1.70
%
0.30
%
0.67
%
0.10
%
Nonperforming assets to total assets
1.35
1.07
0.11
1.35
0.11
Allowance for credit losses on loans
to total loans
1.27
1.14
1.04
1.27
1.04
Nonaccrual loan coverage ratio
72
82
714
72
714
(1) Performance ratios are annualized, where appropriate.*See reconciliation of Non-GAAP Financial Measures later in this release.
2024 FINANCIAL RESULTS (Continued)
3Q 24
2Q 24
3Q 23
2024 YTD
2023 YTD
SELECTED RATIOS
Return on average assets(1)
-0.36
%
-0.40
%
0.46
%
-0.23
%
0.50
%
Return on average equity(1)
-4.91
-5.47
6.17
-3.14
6.50
Return on average tangible common equity(1) *
-4.96
-5.53
6.23
-3.17
6.57
Net interest margin
2.70
2.76
2.97
2.74
3.22
Efficiency ratio
100.31
72.32
80.52
85.54
82.06
Bank common equity tier 1 (CETI) ratio
12.20
12.40
13.43
12.20
13.43
Bank total risk-based capital ratio
13.44
13.49
14.38
13.44
14.38
(1) Performance ratios are annualized, where appropriate.*See reconciliation of Non-GAAP Financial Measures later in this release.
2024 Significant Items as of September 30, 2024
•
Year-to-date net loss of $3.8 million was primarily due to a provision for credit losses of $12.8 million as the collectability of a small number of loan relationships continued to deteriorate and additional reserves were taken on purchased loan pools.
•
First Fed Bank ("First Fed" or the "Bank") balance sheet restructuring contributed to an improved year-to-date yield on earning assets by 16-basis points over the prior year end to 5.44%.
- Sale-leaseback transaction completed in the second quarter, resulting in a $7.9 million gain on sale of premises and equipment.
- Sold $23.2 million of lower-yielding security investments which resulted in $2.1 million year-to-date loss on sale.
- Purchased $53.3 million of higher-yielding security investments year-to-date.
- Continued conversion of lower-yielding bank-owned life insurance ("BOLI") with one conversion completed in the first quarter and an exchange in the third quarter. Two additional policy restructures expected to be completed by the end of the first quarter of 2025.
•
Net interest margin decreased over the prior year end from 3.13% to 2.74%, impacted by the increase in deposit and borrowing costs outpacing increased yields on loans and investments.
•
Loan mix shifted away from construction and commercial real estate into commercial business, auto, multi-family real estate, one-to-four family and home equity compared to the prior year end. The weighted-average rate on new loans year-to-date was 8.5%.
•
Borrowings increased $14.1 million, or 4.4%, to $335.0 million at September 30, 2024, compared to $320.9 million at December 31, 2023.
•
Repurchased 214,132 shares during the first quarter, which closed out the October 2020 Stock Repurchase Plan.
•
Repurchased 98,156 shares during the third quarter under the new share repurchase plan approved in April 2024.
•
Year-to-date deposit growth of $34.7 million, or 2.0%, to $1.71 billion, with a $30.0 million shift from savings to money market accounts. Cost of total deposits increased over the prior year end from 1.66% to 2.49%.
•
Estimated insured deposits totaled $1.3 billion, or 77% of total deposits at September 30, 2024. Available liquidity to uninsured deposit coverage remained strong at 142% at September 30, 2024.
•
Classified loans increased to 2.71% of total loans at September 30, 2024, compared to 2.12% at December 31, 2023.
•
Nonperforming assets increased $11.7 million year-to-date mainly due to three commercial loan relationships included in commercial construction, commercial real estate and commercial business.
•
Completed a reduction-in-force impacting 9% of our workforce on July 24, 2024. This action, along with year-to-date headcount management through attrition, is expected to result in a reduction in current levels of compensation expense by approximately $820,000 per quarter starting in the fourth quarter of 2024.
First Northwest Bancorp (NASDAQ:FNWB) ("First Northwest" or the "Company") today reported a net loss of $2.0 million for the third quarter of 2024, compared to a net loss of $2.2 million for the second quarter of 2024 and net income of $2.5 million for the third quarter of 2023. Basic and diluted loss per share were $0.23 for the third quarter of 2024, compared to basic and diluted loss per share of $0.25 for the second quarter of 2024 and basic and diluted earnings per share of $0.28 for the third quarter of 2023. In the third quarter of 2024, the Company generated a return on average assets of -0.36%, a return on average equity of -4.91% and a return on average tangible common equity* of -4.96%. Loss before provision for income taxes was $3.2 million for the third quarter of 2024, compared to a loss before provision for income taxes of $2.8 million for the preceding quarter, a decrease of $417,000, or 15.1%, and decreased $6.3 million compared to income of $3.1 million for the third quarter of 2023.
The Bank recorded reserves on individually analyzed loans totaling $1.9 million due to the uncertain future cash flows from specific loan relationships in the third quarter of 2024. An additional credit loss on loans of $1.8 million was attributable to an increase in the reserve on pooled commercial business loans, with a reserve loss rate of 3.4% applied to that segment of the loan portfolio at period end. We believe the reserve on individually analyzed loans does not represent a universal decline in the collectability of all loans in the portfolio. We continue to work on resolution plans for all troubled borrowers. The provision for credit losses on loans had a significant negative impact on net income and was the only reason for the net loss recorded for the third quarter of 2024.
Steps taken to restructure the Bank's balance sheet continue to have a positive impact. The fair value hedge on loans, tied to the compounded overnight index swap using the secured overnight financing rate index, established in the first quarter of 2024 added $946,000 to interest income year-to-date. The fair value hedge on loans reduces interest rate risk by reducing liability sensitivity while increasing interest income. We estimate that if rates remain unchanged, this hedge will add $1.3 million of annualized interest income in 2024. The estimated impact will be reduced if the Federal Reserve Board ("FRB") implements additional rate cuts during the year. The Bank expects to maintain a positive carry on its derivative for up to 75-basis points of additional rate cuts.
The balance sheet restructure plan also includes the conversion of BOLI policies in order to reinvest in higher yielding products. The first $6.1 million policy earning 2.58% was surrendered during the first quarter and reinvested into a policy earning 5.18%. In the third quarter of 2024, a $1.3 million policy earning 3.18% was exchanged and reinvested into a policy earning 5.73%. The remaining surrender and exchange transactions are expected to be completed by the end of the first quarter of 2025.
Net Interest IncomeTotal interest income decreased $405,000 to $28.2 million for the third quarter of 2024, compared to $28.6 million in the previous quarter, and increased $2.4 million compared to $25.8 million in the third quarter of 2023. Interest income decreased in the third quarter of 2024 primarily due to interest reversals for loans placed on nonaccrual totaling $619,000. The interest adjustments were partially offset by higher yields on performing loans combined with increased loan volume. Interest and fees on loans increased year-over-year as the loan portfolio grew as a result of draws on new and existing lines of credit, originations of commercial real estate, commercial business and home equity loans, and auto and manufactured home loan purchases. Loan yields increased over the prior year due to higher rates on new originations as well as the repricing of variable and adjustable-rate loans tied to the Prime Rate or other indices.
Total interest expense decreased $190,000 to $14.2 million for the third quarter of 2024, compared to $14.4 million in the second quarter of 2024, and increased $3.3 million compared to $10.9 million in the third quarter of 2023. Interest expense for the three months ended September 30, 2024, was lower primarily due to lower rates on advances combined with decreased advance volumes. The decrease was partially offset by a 9-basis point increase in the cost of deposits to 2.56% for the quarter ended September 30, 2024, from 2.47% for the prior quarter as a result of customers continuing to shift deposit balances into higher earning products. The increase over the third quarter of 2023 was the result of a 71-basis point increase in the cost of deposits from 1.85% in the third quarter one year ago. A shift in the deposit mix from transaction and savings accounts to money market accounts and time deposits also added to the higher cost of deposits compared to the third quarter of 2023. Higher costs of brokered time deposits also contributed to additional deposit costs with a 57-basis point increase to 4.88% for the current quarter compared to 4.31% for the third quarter one year ago.
Net interest income before provision for credit losses for the third quarter of 2024 decreased $215,000, or 1.5%, to $14.0 million, compared to $14.2 million for the preceding quarter, and decreased $930,000, or 6.2%, from the third quarter one year ago. The impact of the September FRB rate cut will be reflected beginning with fourth quarter 2024 interest income and expenses.
The Company recorded a $3.1 million provision for credit losses on loans in the third quarter of 2024, primarily due to reserves taken individually analyzed loans and Current Expected Credit Loss model loss factor increases attributable to pooled commercial business and multi-family loans at quarter end. Credit loss provision increases were offset by decreases to the loss factors applied to consumer, commercial real estate and one-to-four family loans. Higher loss factors applied to unfunded commitments and a moderate increase in commitment balances also resulted in a provision for credit losses on unfunded commitments of $57,000 for the quarter. The total provision for credit loss recorded for the third quarter of 2024 was $3.1 million, compared to a credit loss provision of $8.7 million for the preceding quarter and a provision of $371,000 for the third quarter of 2023.
The net interest margin decreased to 2.70% for the third quarter of 2024, from 2.76% for the prior quarter, and decreased 27-basis points from 2.97% for the third quarter of 2023. The decrease over the linked quarter is primarily due to the accrued interest reversed on three nonperforming commercial loans during the three months ended September 30, 2024, partially offset by an increase in interest income earned on a higher volume of loans. Investment securities also had decreased volume due to regular payments and lower yields due to variable-rate securities compared to the preceding quarter. The Company reported reduced rates and declining volume of borrowings during the quarter which lowered costs; however, these savings were partially offset by an increase in cost due to a higher volume of retail customer deposits. The decrease in net interest margin from the same quarter one year ago is due to higher funding costs for deposits and borrowed funds. Organic loan production comprised 73% of new loan commitments for the third quarter with the remaining 27% added through purchases of higher-yielding loans from established third-party relationships. The Bank's fair value hedging agreements on securities and loans added $188,000 and $395,000, respectively, to interest income for the third quarter of 2024.
The yield on average earning assets for the third quarter of 2024 decreased 11-basis points to 5.44% compared to 5.55% for the second quarter of 2024 and increased 30-basis points from 5.14% for the third quarter of 2023. The third quarter decrease is attributable to the accrued interest reversed on nonperforming loans, a lower yield and volume of investment securities and a decrease in the balance of Federal Home Loan Bank ("FHLB") stock. The year-over-year increase in interest income was primarily due to higher average loan balances augmented by increases in yields on all earning assets, which were positively impacted by the higher rate environment.
The cost of average interest-bearing liabilities decreased 5-basis points to 3.23% for the third quarter of 2024, compared to 3.28% for the second quarter of 2024, and increased 63-basis points from 2.60% for the third quarter of 2023. Total cost of funds decreased to 2.82% for the third quarter of 2024 from 2.87% in the prior quarter and increased from 2.23% for the third quarter of 2023. Current quarter decreases were due to lower average balances and costs on borrowings. The Bank continues to offer higher rate specials on money market and CD accounts to attract and retain retail customer deposits. The average brokered CD balance decreased $5.5 million from the linked quarter with a 6-basis point decrease in the average rate paid on brokered funds.
The increase in cost of average interest-bearing liabilities over the same quarter last year was driven by higher rates paid on deposits and borrowings and higher average CD balances. The Company attracted and retained funding through the use of promotional products and a focus on digital account acquisition. The mix of retail deposit balances shifted from no or low-cost transaction and savings accounts towards higher cost term certificate and higher yield money market accounts. Retail CDs represented 29.3%, 26.8% and 27.6% of retail deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively. Average interest-bearing deposit balances increased $44.8 million, or 3.2%, to $1.45 billion for the third quarter of 2024 compared to the second quarter of 2024 and increased $75.0 million, or 5.4%, compared to $1.38 billion for the third quarter of 2023.
Selected Yields
3Q 24
2Q 24
1Q 24
4Q 23
3Q 23
Loan yield
5.51
%
5.62
%
5.51
%
5.38
%
5.31
%
Investment securities yield
4.90
5.01
4.75
4.53
4.18
Cost of interest-bearing deposits
3.00
2.91
2.86
2.52
2.22
Cost of total deposits
2.56
2.47
2.43
2.12
1.85
Cost of borrowed funds
4.35
4.76
4.52
4.50
4.45
Net interest spread
2.21
2.27
2.28
2.40
2.54
Net interest margin
2.70
2.76
2.76
2.84
2.97
Noninterest IncomeNoninterest income decreased to $1.8 million for the third quarter of 2024 compared to $7.4 million for the second quarter of 2024. Nonrecurring second quarter transactions included a sale-leaseback transaction which resulted in a gain on sale of premises and equipment of $7.9 million, partially offset by a $2.1 million loss on the sale of lower-yielding available-for-sale securities. Income from the gain on sale of loans in the third quarter of 2024 includes $51,000 from SBA loans, compared to $116,000 in the prior quarter. Write-downs on sold loan servicing rights mark-to-market valuation totaled $161,000 for the third quarter of 2024 compared to $103,000 in the prior quarter. Other noninterest income includes a valuation gain on partnership investments of $279,000 compared to a loss of $56,000 in the preceding quarter.
Noninterest income decreased 38.7% from $2.9 million in the same quarter one year ago. The third quarter of 2023 included $750,000 in credit enhancements reimbursed to the Company on Splash charge-offs recorded in other noninterest income. The quarter ended September 30, 2023, also included a $102,000 gain on sale of mortgage loans, compared to a $6,000 gain in the third quarter of 2024.
Noninterest Income
$ in thousands
3Q 24
2Q 24
1Q 24
4Q 23
3Q 23
Loan and deposit service fees
$
1,059
$
1,076
$
1,102
1,068
$
1,068
Sold loan servicing fees and servicing rights mark-to-market
10
74
219
276
98
Net gain on sale of loans
58
150
52
33
171
Net (loss) gain on sale of investment securities
—
(2,117
)
—
(5,397
)
—
Net gain on sale of premises and equipment
—
7,919
—
—
—
Increase in cash surrender value of bank-owned life insurance
315
293
243
260
252
Other income
337
(48
)
572
831
1,315
Total noninterest income
$
1,779
$
7,347
$
2,188
$
(2,929
)
$
2,904
Noninterest ExpenseNoninterest expense totaled $15.9 million for the third quarter of 2024, compared to $15.6 million for the preceding quarter and $14.4 million for the third quarter a year ago. Increases were primarily due to one-time severance payouts of $704,000 during the three months ended September 30, 2024, partially offset by a decrease in occupancy due to the one-time tax assessment on the sale-leaseback of $359,000 paid in the previous quarter. Other expense increased this quarter primarily due to $161,000 of additional credit related expenses.
The increase in total noninterest expenses compared to the third quarter of 2023 is mainly due to current quarter one-time severance payouts of $704,000, additional payroll tax expense of $342,000 and additional medical benefit expense of $162,000. Payroll tax expense in the third quarter of 2023 included accretion of the employee retention credit ("ERC") which reduced the expense by $293,000. In the fourth quarter of 2023, the Bank stopped the recognition of the ERC for the foreseeable future. Occupancy increased due to the additional rent of $416,000 from the previous quarter sale-leaseback transaction. Other increases compared to the third quarter of 2023 included $51,000 in stockholder communications, $103,000 of state taxes, $163,000 in FDIC insurance premiums, and $269,000 of additional credit related expenses. These increases were partially offset by lower legal fees of $204,000, consulting fees of $146,000 and advertising costs of $91,000. The Company continues to focus on controlling compensation expense and reducing advertising and other discretionary spending to improve earnings.
Noninterest Expense
$ in thousands
3Q 24
2Q 24
1Q 24
4Q 23
3Q 23
Compensation and benefits
$
8,582
$
8,588
$
8,128
$
7,397
$
7,795
Data processing
2,085
2,008
1,944
2,107
1,945
Occupancy and equipment
1,553
1,799
1,240
1,262
1,173
Supplies, postage, and telephone
360
317
293
351
292
Regulatory assessments and state taxes
548
457
513
376
446
Advertising
409
377
309
235
501
Professional fees
698
684
910
1,119
929
FDIC insurance premium
533
473
386
418
369
Other expense
1,080
906
580
3,725
926
Total noninterest expense
$
15,848
$
15,609
$
14,303
$
16,990
$
14,376
Efficiency ratio
100.31
%
72.32
%
88.75
%
150.81
%
80.52
%
Investment SecuritiesInvestment securities increased $4.2 million, or 1.4%, to $310.9 million at September 30, 2024, compared to $306.7 million three months earlier, and increased $1.5 million compared to $309.3 million at September 30, 2023. The market value of the portfolio increased $8.1 million during the third quarter of 2024 primarily due to the market rally in the second half the third quarter which drove the yield curve lower. At September 30, 2024, municipal bonds totaled $81.4 million and comprised the largest portion of the investment portfolio at 26.2%. Agency issued mortgage-backed securities ("MBS agency") were the second largest segment, totaling $78.5 million, or 25.3%, of the portfolio at quarter end. Included in MBS non-agency were $29.6 million of commercial mortgage-backed securities ("CMBS"), of which 89.8% were in "A" tranches and the remaining 10.2% were in "B" tranches. Our largest exposure in the CMBS portfolio at September 30, 2024, was to long-term care facilities, which comprised 65.0%, or $19.2 million, of our private label CMBS securities. All of the CMBS bonds had credit enhancements ranging from 28.8% to 71.8%, with a weighted-average credit enhancement of 55.3%, that further reduced the risk of loss on these investments.
The estimated average life of the securities portfolio was approximately 7.4 years at September 30, 2024, 7.8 years at the prior quarter end and 7.7 years for the third quarter of 2023. The effective duration of the portfolio was approximately 3.9 years at September 30, 2024, compared to 4.3 years in the prior quarter and 4.9 years at the end of the third quarter of 2023. Our recent investment purchases have primarily been floating rate securities to take advantage of higher short-term rates above those offered on cash and to reduce our liability sensitivity.
Investment Securities Available for Sale, at Fair Value
$ in thousands
3Q 24
2Q 24
1Q 24
4Q 23
3Q 23
Municipal bonds
$
81,363
$
78,825
$
87,004
$
87,761
$
93,995
U.S. Treasury notes
—
—
—
—
2,377
International agency issued bonds (Agency bonds)
—
—
—
—
1,703
U.S. government agency issued asset-backed securities (ABS agency)
13,296
13,982
14,822
11,782
—
Corporate issued asset-backed securities (ABS corporate)
16,391
16,483
13,929
5,286
—
Corporate issued debt securities (Corporate debt):
Senior positions
10,241
9,066
13,617
9,270
16,975
Subordinated bank notes
43,817
43,826
39,414
42,184
37,360
U.S. Small Business Administration securities (SBA)
9,317
9,772
7,911
—
—
Mortgage-backed securities:
U.S. government agency issued mortgage-backed securities (MBS agency)
78,549
77,301
83,271
63,247
66,946
Non-agency issued mortgage-backed securities (MBS non-agency)
57,886
57,459
65,987
76,093
89,968
Total securities available for sale, at fair value
$
310,860
$
306,714
$
325,955
$
295,623
$
309,324
Loans and Unfunded Loan CommitmentsNet loans, excluding loans held for sale, increased $36.7 million, or 2.2%, to $1.71 billion at September 30, 2024, from $1.68 billion at June 30, 2024, and increased $96.4 million, or 6.0%, from $1.62 billion one year ago.
Commercial business loans increased $38.2 million, primarily attributable to a $29.0 million increase in our Northpointe Bank Mortgage Purchase Program participation, organic originations totaling $7.9 million and draws on existing lines of credit of $5.7 million which were partially offset by payments. One-to-four family loans increased $5.9 million during the third quarter of 2024 as a result of $14.2 million in residential construction loans that converted to permanent amortizing loans, partially offset by payoffs and scheduled payments. Home equity loans increased $4.3 million over the previous quarter due to organic home equity loan production of $5.5 million and draws on new and existing commitments of $4.6 million, partially offset by payoffs and scheduled payments. Multi-family loans increased $3.7 million during the current quarter. The increase was primarily the result of $9.2 million of construction loans converting into permanent amortizing loans, partially offset by payoffs and scheduled payments. Commercial real estate loans increased $497,000 during the third quarter of 2024 compared to the previous quarter as originations of $8.6 million were offset by payoffs and scheduled payments.
Construction loans decreased $11.6 million during the quarter, with $23.4 million converting into fully amortizing loans, partially offset by draws on new and existing loans. New single-family residence construction loan commitments totaled $4.1 million in the third quarter, compared to $2.7 million in the preceding quarter. Auto and other consumer loans decreased $4.4 million during the third quarter of 2024 as payoffs and scheduled payments were higher than $5.8 million of new auto loan purchases, a $4.3 million manufactured home loan pool and individual manufactured home loan purchases totaling $1.2 million.
The Company originated $3.4 million in residential mortgages during the third quarter of 2023 and sold $3.9 million, with an average gross margin on sale of mortgage loans of approximately 2.06%. This production compares to residential mortgage originations of $5.0 million in the preceding quarter with sales of $4.9 million, and an average gross margin of 2.05%. Single-family home inventory remained historically low and higher market rates on mortgage loans continued to limit saleable mortgage loan production through much of the third quarter.
Loans by Collateral and Unfunded Commitments
$ in thousands
3Q 24
2Q 24
1Q 24
4Q 23
3Q 23
One-to-four family construction
$
51,607
$
49,440
$
70,100
$
60,211
$
72,991
All other construction and land
45,166
58,346
55,286
69,484
71,092
One-to-four family first mortgage
469,053
434,840
436,543
426,159
409,207
One-to-four family junior liens
14,701
13,706
12,608
12,250
12,859
One-to-four family revolving open-end
48,459
44,803
45,536
42,479
38,413
Commercial real estate, owner occupied:
Health care
29,407
29,678
29,946
22,523
22,677
Office
17,901
19,215
17,951
18,468
18,599
Warehouse
11,645
14,613
14,683
14,758
14,890
Other
64,535
56,292
55,063
61,304
57,414
Commercial real estate, non-owner occupied:
Office
49,770
50,158
53,099
53,548
53,879
Retail
49,717
50,101
50,478
51,384
51,466
Hospitality
62,282
62,628
66,982
67,332
61,339
Other
82,573
84,428
93,040
94,822
96,083
Multi-family residential
354,118
350,382
339,907
333,428
325,338
Commercial business loans
86,904
79,055
90,781
76,920
75,068
Commercial agriculture and fishing loans
15,369
14,411
10,200
5,422
4,437
State and political subdivision obligations
404
405
405
405
439
Consumer automobile loans
144,036
151,121
139,524
132,877
134,695
Consumer loans secured by other assets
132,749
129,293
122,895
108,542
104,999
Consumer loans unsecured
4,411
5,209
6,415
7,712
9,093
Total loans
$
1,734,807
$
1,698,124
$
1,711,442
$
1,660,028
$
1,634,978
Unfunded commitments under lines of credit or existing loans
$
166,446
$
155,005
$
148,736
$
149,631
$
154,722
DepositsTotal deposits increased $3.4 million to $1.71 billion at September 30, 2024, compared to $1.71 billion at June 30, 2024, and increased $53.9 million, or 3.3%, compared to $1.66 billion one year ago. During the third quarter of 2024, total retail customer deposit balances increased $23.4 million and brokered deposit balances decreased $20.0 million. Compared to the preceding quarter, there were balance increases of $18.1 million in consumer time deposits, $17.7 million in business money market accounts, $7.9 million in consumer demand accounts and $7.7 million in business time deposits. These increases were partially offset by decreases in business demand accounts of $26.4 million, brokered time deposits of $20.0 million, consumer money market accounts of $7.4 million, business savings accounts of $6.5 million, consumer savings accounts of $5.3 million and public fund time deposits of $941,000, during the third quarter of 2024. Increases in time deposits and money market accounts were driven by customer behavior as they sought out higher rates. Overall, the current rate environment continues to contribute to greater competition for deposits with ongoing deposit rate specials offered to attract new funds.
The Company estimates that $401.0 million, or 23%, of total deposit balances were uninsured at September 30, 2024. Approximately $265.7 million, or 16%, of total deposits were uninsured business and consumer deposits with the remaining $135.3 million, or 8%, consisting of uninsured public funds at September 30, 2024. Uninsured public fund balances were fully collateralized. The Bank holds an FHLB standby letter of credit as part of our participation in the Washington Public Deposit Protection Commission program which covered $115.5 million of related deposit balances while the remaining $19.8 million of uninsured tribal accounts was fully covered through pledged securities at September 30, 2024.
As of September 30, 2024, consumer deposits made up 58% of total deposits with an average balance of $24,000 per account, business deposits made up 22% of total deposits with an average balance of $51,000 per account, public fund deposits made up 8% of total deposits with an average balance of $1.6 million per account and the remaining 12% of account balances are brokered time deposits. We have maintained the majority of our public fund relationships for over 10 years. Approximately 70% of our customer base is located in rural areas, with 18% in urban areas and the remaining 12% are brokered deposits as of September 30, 2024.
Deposits
$ in thousands
3Q 24
2Q 24
1Q 24
4Q 23
