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“Our net interest margin contracted compared to the preceding quarter, as the increase in cost of funds outpaced the growth in our yields on earning assets. We are working hard to build core customer deposits, and while deposit pricing pressure persists, we anticipate funding costs will start to stabilize over the next few quarters,” said Rick Darrow, Liberty Northwest Bancorp, Inc. President and Chief Executive Officer.

The Company’s net interest margin was 2.48% for the fourth quarter of 2023, compared to 2.64% for the preceding quarter, and 3.11% for the fourth quarter of 2022. For the full year 2023, the net interest margin was 2.59%, compared to 3.18% for 2022.

Total non-interest income was $78 thousand for the fourth quarter of 2023, compared to $45 thousand in the fourth quarter a year ago. The year-over-year 75% increase was primarily due to an increase in referral income. For the year 2023, non-interest income increased to $449 thousand, compared to $193 thousand for 2022, an increase of $256 thousand, or 133%.

Total noninterest expense was $1.22 million for the fourth quarter of 2023, an increase of $54 thousand, or 5%, from the fourth quarter a year ago. Compensation and benefits costs increased by $71 thousand, or 11%, over the prior year quarter, while occupancy costs decreased by 1% from prior quarter of last year. For the year 2023, total noninterest expense increased $66 thousand, or 1%, to $4.95 million, over the same period in 2022.

Capital ratios continue to exceed regulatory requirements, with a total risk-based capital ratio at 15.09% at quarter end, substantially above well-capitalized regulatory requirements. The tangible book value per share increased to $7.58 at quarter end, compared to $7.51 a year earlier.

“While the high interest rate environment continues to be a challenge, we are well positioned with a strong balance sheet to continue our growth in 2024,” said Darrow. “Additionally, the recent market disruptions in our Pacific Northwest markets continues to give us opportunities to grow our client base. We have the right team in place, together with the strength of our local markets, to improve our operating results in the year ahead.”

About Liberty Northwest Bancorp, Inc.
Liberty Northwest Bancorp, Inc. is the bank holding company for Liberty Bank, a commercial bank chartered in the State of Washington. The Bank began operations June 11, 2009, and operates a full-service branch in Poulsbo, WA in addition to a loan production office in Bellevue, WA. The Bank provides loan and deposit services to predominantly small and middle-sized businesses and individuals in and around Kitsap and King counties. The Bank is subject to regulation by the State of Washington Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC). For more information, please visit www.libertybanknw.com. Liberty Northwest Bancorp, Inc. (OTCQX: LBNW), qualified to trade on the OTCQX® Best Market in June 2022. For information related to the trading of LBNW, please visit www.otcmarkets.com.

For further discussion, please contact:
Rick Darrow, Chief Executive Officer | 360-394-4750

Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe Liberty Northwest Bancorp, Inc.’s projections, estimates, plans and expectations of future results and can be identified by words such as “believe,” “intend,” “estimate,” “likely,” “anticipate,” “expect,” “looking forward,” and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve’s actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Liberty Northwest Bancorp, Inc. undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.