First Northwest Bancorp Settles Lawsuit with Socotra REIT for $1.3M

What Happened
First Northwest Bancorp (the Company) reported in an 8-K filed on September 18, 2026 that its subsidiary, First Fed Bank, entered a Settlement Agreement & Mutual Release with Socotra REIT I, LLC on September 15, 2026. The settlement resolves a complaint Socotra filed October 17, 2025 in King County Superior Court alleging misrepresentation, fraud, conversion, and violations of the Washington Consumer Protection Act related to a commercial loan transaction involving Ideal Property Investments LLC. Under the agreement the Bank will make a cash payment of $1.3 million within 30 days in exchange for a full release of claims and dismissal of the complaint with prejudice. The Company stated the settlement is a compromise, does not admit liability, and is intended to avoid the costs and uncertainty of continued litigation.

Key Details

• Complaint filed: October 17, 2025 (King County Superior Court, Washington).
• Settlement date: September 15, 2026; 8-K filing date: September 18, 2026.
• Cash payment: $1.3 million payable within 30 days of the Settlement Agreement.
• Effect: Full release of claims and dismissal of the complaint with prejudice; settlement is not an admission of liability.

Why It Matters
The settlement removes a legal overhang and potential litigation costs and distractions for the Bank and the Company, providing certainty by resolving the asserted claims for a defined cash amount. For investors, the most direct impact is the near-term cash outflow of $1.3 million; the company framed the payment as a business decision to avoid further expense and uncertainty. The filing does not indicate admission of wrongdoing, and investors should watch future filings for any additional financial details or disclosures about the settlement’s impact on results or capital.