First Northwest Bancorp : Latest Proxy

PROXY STATEMENT 2023

2022 AWARDS

PSBJ Top Corporate Philanthropists

PSBJ Best Workplace List

PSBJ Middle Market Fast 50 List

Bellingham Alive Best of the Northwest - Gold

Sound Publishing: Best of Olympic Peninsula Awards Best Financial Advisor in Jefferson County

Best Bank in Clallam and Jefferson Counties

LETTER FROM OUR PRESIDENT AND CEO

April 13, 2023

DEAR SHAREHOLDER:

On behalf of the Board of Directors and management of First Northwest Bancorp, you are cordially invited to the 2023 Annual Meeting of Shareholders. This year's meeting will be held in-person at 4:00 p.m. (Pacific Time) on Tuesday, May 23, 2023. The meeting will be held at 7 Cedars Hotel, 270756 Highway 101, Sequim, Washington 98382. Meeting participants will be required to follow all relevant local and state health requirements for public meetings.

The attached Proxy Statement discusses each matter expected to be voted on at this year's Annual Meeting of Shareholders, which the Board of Directors and management team encourage you to attend. In addition to voting on the proposed items, our team will present a brief report on current operations and provide an opportunity for you to have your questions and comments addressed. Whether or not you participate in the Annual Meeting, it is important that your shares be represented and voted. We urge you to promptly vote and submit your proxy (1) via the Internet, (2) by phone, or (3) if you received your proxy materials by mail, by signing, dating, and returning the enclosed proxy card or voting instruction form in the envelope provided for your convenience.

Last year presented a new set of challenges and opportunities in banking as we worked to understand and respond to the rapidly evolving business landscape for ourselves and our customers. We are proud to report that First Northwest Bancorp continued to show remarkable adaptability and delivered another outstanding year of financial performance. Looking forward, we plan to sharpen our focus on improving service across our customer base, developing our small business service lines, and continuing our investment in technology.

As you may have already noticed, this year marks the 100th anniversary of First Fed Bank's presence in our communities. We hope you will consider joining us to celebrate this milestone!

Sincerely,

Matthew P. Deines

President and Chief Executive Officer

SAVE THE DATE!

First Fed Centennial Celebration

September 3, 2023

You are cordially invited to join us for this fun community event on the Port Angeles waterfront celebrating 100 years of commitment to our customers and community. Enjoy fireworks, family activities, food trucks, beer garden, and free live music from PNW bands.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The Board of Directors of First Northwest Bancorp (the "Board") is distributing this Proxy Statement to solicit proxies from our shareholders for use at our 2023 Annual Meeting of Shareholders. We first provided electronic access to this Proxy Statement, a form of proxy card, and our Annual Report to our shareholders on or about April 13, 2023.

Meeting Date: May 23, 2023	Meeting Place: 7 Cedars Hotel, 270756 Highway 101
	Sequim, Washington 98382
Meeting Time: 4:00 p.m. (Pacific Time)	Record Date: March 24, 2023

This year's Annual Meeting will return to an in-person format. You will be able to attend and participate in the Annual Meeting at the time, date, and location described in the accompanying Proxy Statement. All meeting attendees will be required to comply with local and state health requirements for public meetings.

ANNUAL MEETING BUSINESS

PROPOSAL 1 - Election of nine directors to serve a one-year term;

PROPOSAL 2 - An advisory (non-binding) vote to approve the compensation of our named executive officers, as disclosed in this Proxy Statement; and

PROPOSAL 3 - Ratification of the appointment of Moss Adams LLP as our independent registered public accounting firm for the year ending December 31, 2023.

YOUR VOTE IS IMPORTANT. We urge you to read this Proxy Statement carefully. Whether or not you plan to attend the Annual Meeting, we urge you to vote promptly through the Internet, by telephone, or by mail. This will ensure the presence of

a quorum at the meeting. For instructions on voting, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail. You can request to receive proxy materials by mail or e-mail as well. Promptly voting your shares via the Internet, by telephone, or by signing, dating, and returning the proxy card or voting instruction form will save us the expense and extra work of additional solicitation. If you are a shareholder of record and vote at the Annual Meeting, your proxy will not be used.

By Order of the Board of Directors

Allison R. Mahaney, SVP

General Counsel / Corporate Secretary

Port Angeles, Washington

April 13, 2023

F I R S T N O R T H W E S T B A N C O R P

1

TABLE OF CONTENTS

PROXY SUMMARY	1
ESG SUMMARY	3
PRINCIPAL SHAREHOLDERS	5
BENEFICIAL OWNERSHIP BY DIRECTORS AND
NAMED EXECUTIVE OFFICERS	6
PROPOSAL 1
Election of Directors	7
Director Qualifications and Experience	9
Information Regarding Nominees for Election
and Continuing Directors	10
CORPORATE GOVERNANCE AND BOARD MATTERS . . . .	14
DIRECTOR COMPENSATION	17
EXECUTIVE COMPENSATION	18
Summary Compensation Table	20
Cash Incentive Compensation	20

Pay Versus Performance	23
Outstanding Equity Awards	24
Retirement Benefits	25
Employment Agreements for Named Executive
Officers	26
PROPOSAL 2
Advisory Vote to Approve Executive Compensation . . . .	28
AUDIT COMMITTEE REPORT	29
PROPOSAL 3
Ratification of Appointment of Independent Auditor . . .	30
SHAREHOLDER PROPOSALS	31
QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING	32
MISCELLANEOUS	35

The information provided in this Proxy Statement relates to First Northwest Bancorp and its wholly owned subsidiary, First Fed Bank. First Northwest Bancorp may also be referred to as "First Northwest" and First Fed Bank may also be referred to as "First Fed" or the "Bank." References to "we," "us," and "our" refer to First Northwest and, as the context requires, First Fed.