First Financial Northwest, Inc. (the “Company”) (NASDAQ GS: FFNW),
the holding company for First Financial Northwest Bank (the
“Bank”), today reported net income for the quarter ended
September 30, 2022, of $3.9 million, or $0.43 per diluted
share, compared to $2.8 million, or $0.31 per diluted share
for the quarter ended June 30, 2022, and $3.2 million, or
$0.34 per diluted share, for the quarter ended September 30,
2021. For the nine months ended September 30, 2022, net income
was $10.0 million, or $1.10 per diluted share, compared to net
income of $9.5 million, or $0.99 per diluted share, for the
comparable nine-month period in 2021.
“I am pleased with continued expansion of our
net interest margin to 3.65% in the quarter, compared to 3.53% in
the quarter ended June 30, 2022, and 3.33% in the quarter
ended September 30, 2021,” noted Joseph W. Kiley III, President and
CEO. “While our cost of funds is coming under pressure like many of
our peers, our efforts in recent years to increase the balance of
variable rate assets and to lock in a portion of our funding costs
with $95 million of pay-fixed/receive floating interest rate swaps
helped to enhance our net interest margin and partially offset the
adverse impact of rising interest rates on our comprehensive income
from decreases in the market value of our available-for-sale
investment portfolio. While many institutions have seen material,
double-digit percentage declines in their book value per share in
2022, I am pleased to report that our book value per share is
unchanged at September 30, 2022, from its value of $17.30 at
December 31, 2021,” continued Kiley.
“As a result of our quarterly analysis of our
loan portfolio, we downgraded to substandard a $6.2 million
loan where we are a participant lender. This loan is secured by a
senior housing/assisted living facility that was previously
downgraded to special mention in the quarter ended March 31,
2022. We analyzed this loan for impairment and concluded that no
losses are anticipated, resulting in a recapture of provision for
loan losses previously allocated to this loan. Changes in the mix
of our loan portfolio also impacted the allowance for loan and
lease losses, with growth in consumer, construction and land
development, and one-to-four family residential loans impacting the
analysis. This loan growth partially offset the recapture from the
substandard loan downgrade, resulting in a $400,000 recapture of
provision for loan losses for the quarter, compared to no provision
for loan losses in the quarter ended June 30, 2022,” concluded
Kiley.
Highlights for the quarter ended
September 30, 2022:
- Net loans receivable increased by
$23.6 million to $1.14 billion at September 30,
2022, as continued strength in one-to-four family lending and an
increase in construction/land lending helped outpace loan
repayments in the quarter.
- The Company’s book value per share
increased to $17.30 at September 30, 2022, compared to $17.26
at June 30, 2022, and $17.03 at September 30, 2021.
- The Company repurchased 27,270
shares in the quarter at an average price of $15.46 per share under
its board-authorized stock repurchase plan that expired on
September 16, 2022.
- The Board of Directors approved a
new stock repurchase plan authorizing the repurchase of up to 5% of
the Company’s outstanding common stock, or approximately 456,000
shares, which will commence on or about October 31, 2022, and
expire no later than March 17, 2023.
- The Company paid a regular
quarterly cash dividend of $0.12 per share to shareholders.
- The Bank’s Tier 1 leverage and
total capital ratios at September 30, 2022, were 10.4% and
15.5%, respectively, compared to 10.5% and 15.5%, respectively, at
June 30, 2022, and 10.2% and 15.5%, respectively at
September 30, 2021.
- Credit quality remains strong as
nonperforming assets remained low at $232,000, or 0.02% of total
assets, and $406,000 in past due loans represented just 0.04% of
total loans receivable.
- Based on management’s evaluation of
the adequacy of the allowance for loan and lease losses (“ALLL”),
the Bank recognized a recapture of provision for loan losses of
$400,000 for the quarter.
Deposits totaled $1.15 billion at September
30, 2022, compared to $1.18 billion at June 30, 2022, and
$1.14 billion at September 30, 2021. The
$30.0 million decline in total deposits for the quarter ended
September 30, 2022, compared to the quarter ended June 30,
2022, reflects decreases across nearly all deposit categories,
particularly money market and interest-bearing demand deposits,
partially offset by an increase in brokered deposits. Management
continues to consider multiple alternatives to increase deposits to
fund its anticipated asset growth in addition to its efforts
through its branch network, including wholesale markets, brokered
deposits, and the national deposit market.
The following table presents a breakdown of our total deposits
(unaudited):
|
Sep 30,2022 |
|
Jun 30,2022 |
|
Sep 30,2021 |
|
ThreeMonthChange |
|
OneYearChange |
Deposits: |
(Dollars in thousands) |
Noninterest-bearing demand |
$ |
118,842 |
|
$ |
127,808 |
|
$ |
115,311 |
|
$ |
(8,966 |
) |
|
$ |
3,531 |
|
Interest-bearing demand |
|
95,767 |
|
|
107,478 |
|
|
104,761 |
|
|
(11,711 |
) |
|
|
(8,994 |
) |
Savings |
|
24,625 |
|
|
23,525 |
|
|
23,024 |
|
|
1,100 |
|
|
|
1,601 |
|
Money market |
|
572,137 |
|
|
596,515 |
|
|
596,911 |
|
|
(24,378 |
) |
|
|
(24,774 |
) |
Certificates of deposit, retail |
|
268,528 |
|
|
270,866 |
|
|
301,729 |
|
|
(2,338 |
) |
|
|
(33,201 |
) |
Brokered deposits |
|
69,537 |
|
|
53,277 |
|
|
– |
|
|
16,260 |
|
|
|
69,537 |
|
Total deposits |
$ |
1,149,436 |
|
$ |
1,179,469 |
|
$ |
1,141,736 |
|
$ |
(30,033 |
) |
|
$ |
7,700 |
|
The following tables present an analysis of
total deposits by branch office (unaudited):
September 30, 2022 |
|
Noninterest-bearing demand |
Interest-bearing demand |
Savings |
Money market |
Certificates of deposit, retail |
Brokered deposits |
Total |
|
(Dollars in thousands) |
King County |
|
|
|
|
|
|
|
Renton |
$ |
36,797 |
$ |
43,129 |
$ |
16,483 |
$ |
301,912 |
$ |
209,504 |
$ |
- |
$ |
607,825 |
Landing |
|
4,345 |
|
2,586 |
|
155 |
|
20,301 |
|
4,089 |
|
- |
|
31,476 |
Woodinville |
|
3,033 |
|
3,714 |
|
1,208 |
|
19,514 |
|
9,799 |
|
- |
|
37,268 |
Bothell |
|
3,287 |
|
1,045 |
|
54 |
|
7,307 |
|
1,694 |
|
- |
|
13,387 |
Crossroads |
|
13,047 |
|
4,225 |
|
49 |
|
38,668 |
|
9,228 |
|
- |
|
65,217 |
Kent |
|
6,323 |
|
13,945 |
|
4 |
|
19,843 |
|
1,499 |
|
- |
|
41,614 |
Kirkland |
|
9,101 |
|
365 |
|
42 |
|
7,297 |
|
25 |
|
- |
|
16,830 |
Issaquah |
|
3,396 |
|
1,480 |
|
60 |
|
3,037 |
|
2,295 |
|
- |
|
10,268 |
Total King County |
|
79,329 |
|
70,489 |
|
18,055 |
|
417,879 |
|
238,133 |
|
- |
|
823,885 |
Snohomish County |
|
|
|
|
|
|
|
Mill Creek |
|
7,153 |
|
2,727 |
|
904 |
|
23,527 |
|
5,626 |
|
- |
|
39,937 |
Edmonds |
|
16,209 |
|
6,284 |
|
901 |
|
34,719 |
|
8,935 |
|
- |
|
67,048 |
Clearview |
|
5,143 |
|
5,957 |
|
1,662 |
|
26,923 |
|
2,873 |
|
- |
|
42,558 |
Lake Stevens |
|
4,977 |
|
5,233 |
|
1,471 |
|
40,297 |
|
4,975 |
|
- |
|
56,953 |
Smokey Point |
|
3,430 |
|
4,452 |
|
1,422 |
|
23,527 |
|
7,066 |
|
- |
|
39,897 |
Total Snohomish County |
|
36,912 |
|
24,653 |
|
6,360 |
|
148,993 |
|
29,475 |
|
- |
|
246,393 |
Pierce County |
|
|
|
|
|
|
|
University Place |
|
1,879 |
|
108 |
|
2 |
|
3,883 |
|
670 |
|
- |
|
6,542 |
Gig Harbor |
|
722 |
|
517 |
|
208 |
|
1,382 |
|
250 |
|
- |
|
3,079 |
Total Pierce County |
|
2,601 |
|
625 |
|
210 |
|
5,265 |
|
920 |
|
- |
|
9,621 |
|
|
|
|
|
|
|
|
Brokered deposits |
|
- |
|
- |
|
- |
|
- |
|
- |
|
69,537 |
|
69,537 |
|
|
|
|
|
|
|
|
Total deposits |
$ |
118,842 |
$ |
95,767 |
$ |
24,625 |
$ |
572,137 |
$ |
268,528 |
$ |
69,537 |
$ |
1,149,436 |
June 30, 2022 |
|
Noninterest-bearing demand |
Interest-bearing demand |
Savings |
Money market |
Certificates of deposit, retail |
Brokered deposits |
Total |
|
(Dollars in thousands) |
King County |
|
|
|
|
|
|
|
Renton |
$ |
37,688 |
$ |
43,985 |
$ |
15,160 |
$ |
311,528 |
$ |
225,799 |
$ |
- |
$ |
634,160 |
Landing |
|
4,925 |
|
2,504 |
|
178 |
|
21,802 |
|
2,988 |
|
- |
|
32,397 |
Woodinville |
|
3,235 |
|
7,776 |
|
1,141 |
|
19,202 |
|
5,167 |
|
- |
|
36,521 |
Bothell |
|
3,734 |
|
1,258 |
|
63 |
|
7,286 |
|
1,488 |
|
- |
|
13,829 |
Crossroads |
|
16,004 |
|
4,930 |
|
356 |
|
52,277 |
|
5,896 |
|
- |
|
79,463 |
Kent |
|
5,834 |
|
11,353 |
|
18 |
|
17,459 |
|
716 |
|
- |
|
35,380 |
Kirkland |
|
9,332 |
|
319 |
|
22 |
|
7,299 |
|
25 |
|
- |
|
16,997 |
Issaquah |
|
4,541 |
|
1,265 |
|
62 |
|
7,033 |
|
406 |
|
- |
|
13,307 |
Total King County |
|
85,293 |
|
73,390 |
|
17,000 |
|
443,886 |
|
242,485 |
|
- |
|
862,054 |
Snohomish County |
|
|
|
|
|
|
|
Mill Creek |
|
6,290 |
|
3,445 |
|
837 |
|
21,716 |
|
6,082 |
|
- |
|
38,370 |
Edmonds |
|
19,892 |
|
13,627 |
|
1,060 |
|
39,220 |
|
8,714 |
|
- |
|
82,513 |
Clearview |
|
6,307 |
|
4,650 |
|
1,364 |
|
26,613 |
|
1,526 |
|
- |
|
40,460 |
Lake Stevens |
|
4,631 |
|
7,241 |
|
1,554 |
|
34,406 |
|
5,018 |
|
- |
|
52,850 |
Smokey Point |
|
3,252 |
|
4,501 |
|
1,581 |
|
24,917 |
|
6,735 |
|
- |
|
40,986 |
Total Snohomish County |
|
40,372 |
|
33,464 |
|
6,396 |
|
146,872 |
|
28,075 |
|
- |
|
255,179 |
Pierce County |
|
|
|
|
|
|
|
University Place |
|
1,032 |
|
95 |
|
2 |
|
4,052 |
|
306 |
|
- |
|
5,487 |
Gig Harbor |
|
1,111 |
|
529 |
|
127 |
|
1,705 |
|
- |
|
- |
|
3,472 |
Total Pierce County |
|
2,143 |
|
624 |
|
129 |
|
5,757 |
|
306 |
|
- |
|
8,959 |
|
|
|
|
|
|
|
|
Brokered deposits |
|
- |
|
- |
|
- |
|
- |
|
- |
|
53,277 |
|
53,277 |
|
|
|
|
|
|
|
|
Total deposits |
$ |
127,808 |
$ |
107,478 |
$ |
23,525 |
$ |
596,515 |
$ |
270,866 |
$ |
53,277 |
$ |
1,179,469 |
Net loans receivable totaled $1.14 billion
at September 30, 2022, compared to $1.12 billion at
June 30, 2022, and $1.10 billion at September 30,
2021. During the quarter ended September 30, 2022, new
originations of one-to-four family residential loans,
construction/land and classic, collectible and other auto loans
outpaced loan repayments in the quarter. The average balance of net
loans receivable totaled $1.13 billion for the quarter ended
September 30, 2022, compared to $1.12 billion for the
quarter ended June 30, 2022, and $1.09 billion for the
quarter ended September 30, 2021.
The ALLL represented 1.27% of total loans
receivable at September 30, 2022, compared to 1.33% at
June 30, 2022, and 1.35% of total loans receivable at
September 30, 2021.
There was $232,000 in nonperforming loans at
September 30, 2022, compared to none at June 30, 2022,
and September 30, 2021. There was no other real estate owned
(“OREO”) at September 30, 2022, June 30, 2022, or
September 30, 2021.
The following table presents a breakdown of our
nonperforming assets (unaudited):
|
Sep 30, |
|
Jun 30, |
|
Sep 30, |
|
ThreeMonth |
|
OneYear |
|
2022 |
|
2022 |
|
2021 |
|
Change |
|
Change |
|
(Dollars in thousands) |
Nonperforming loans: |
|
|
|
|
|
|
|
|
|
One-to-four family residential |
$ |
39 |
|
|
$
─ |
|
|
$
─ |
|
|
$ |
39 |
|
$ |
39 |
Consumer |
|
193 |
|
|
─ |
|
|
─ |
|
|
|
193 |
|
|
193 |
Total nonperforming loans |
|
232 |
|
|
─ |
|
|
─ |
|
|
|
232 |
|
|
232 |
|
|
|
|
|
|
|
|
|
|
OREO |
─ |
|
|
─ |
|
|
─ |
|
|
─ |
|
─ |
|
|
|
|
|
|
|
|
|
|
Total nonperforming
assets(1) |
$ |
232 |
|
|
$
─ |
|
|
$
─ |
|
|
$ |
232 |
|
$ |
232 |
|
|
|
|
|
|
|
|
|
|
Nonperforming assets as a
percent of total assets |
|
0.02 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
|
|
|
(1) The difference between nonperforming assets
reported above, and the totals reported by other industry sources,
is due to their inclusion of all Troubled Debt Restructured Loans
("TDRs") as nonperforming loans, although 100% of the Bank’s TDRs
were performing in accordance with their restructured terms at
September 30, 2022.
The Company accounts for certain loan
modifications or restructurings as TDRs. In general, the
modification or restructuring of a debt is considered a TDR if, for
economic or legal reasons related to the borrower’s financial
difficulties, the Company grants a concession to the borrower that
it would not otherwise consider. TDRs totaled $1.8 million at
September 30, 2022, compared to $2.1 million at
June 30, 2022, and $2.4 million at September 30,
2021. All TDRs were performing according to their modified
repayment terms for the periods presented.
Net interest income totaled $12.7 million
for the quarter ended September 30, 2022, compared to
$11.8 million for the quarter ended June 30, 2022, and
$11.4 million for the quarter ended September 30, 2021.
The increase in the current quarter compared to the quarter ended
June 30, 2022, was primarily due to higher interest income on
loans, including fees, and investment securities, partially offset
by higher interest expense on deposits and other borrowings,
primarily reflecting the increase in market interest rates due to
the recent increases to the targeted federal funds rate and
increased competition for deposits.
Total interest income was $15.4 million for
the quarter ended September 30, 2022, compared to
$13.5 million for the quarter ended June 30, 2022, and
$13.4 million for the quarter ended September 30, 2021.
The increase in the current quarter compared to the prior quarters
was primarily due to an improvement in the average loan yield to
4.77% from 4.41% and 4.54% for the quarters ended June 30,
2022, and September 30, 2021, respectively, due in large part
to recent increases in short term interest rates that increased our
returns from LIBOR and Prime based variable rate loans and variable
rate investment securities.
Total interest expense was $2.7 million for
the quarter ended September 30, 2022, compared to
$1.7 million for the quarter ended June 30, 2022, and
$2.0 million for the quarter ended September 30, 2021.
The average cost of interest-bearing deposits was 0.87% for the
quarter ended September 30, 2022, compared to 0.55% for the
quarter ended June 30, 2022, and 0.63% for the quarter ended
September 30, 2021. The increase from the quarter ended
June 30, 2022, was due primarily to increased interest expense
on money market balances and the continued use of higher cost
brokered deposits and wholesale sources to meet our funding needs.
As of September 30, 2022, there were approximately
$130.1 million in retail certificates of deposit at a weighted
average interest rate of 1.52% maturing in the next 12 months, and
an additional $104.6 million maturing in the subsequent 12 to
24 months, at a weighted average interest rate of 1.59%. Advances
from the FHLB increased to $150.0 million at
September 30, 2022, compared to $95.0 million at June 30,
2022, and $120.0 million at September 30, 2021, as these
borrowings helped to partially fund our loan growth and the decline
in total deposits. Currently, $95.0 million of our FHLB advances
are tied to cash flow hedge agreements where the Bank pays a fixed
rate and receives a variable rate in return to assist in the Bank’s
interest rate risk management efforts. These cash flow hedge
agreements have a weighted average remaining term of 50 months and
a weighted average fixed interest rate of 1.05%. The average cost
of borrowings was 1.48% for the quarter ended September 30,
2022, compared to 1.21% for the quarter ended June 30, 2022,
and 1.42% for the quarter ended September 30, 2021.
The net interest margin was 3.65% for the
quarter ended September 30, 2022, compared to 3.53% for the
quarter ended June 30, 2022, and 3.33% for the quarter ended
September 30, 2021. The increase in the net interest margin
for the quarter ended September 30, 2022, compared to the
quarter ended June 30, 2022, is due primarily to a 39-basis
point improvement in the Company’s average yield on
interest-earning assets during the quarter to 4.43% from 4.04%,
partially offset by a 32-basis point increase in the average cost
of interest-bearing liabilities to 0.93% from 0.61%. The increase
in net interest margin for the quarter ended September 30,
2022, compared to the quarter ended September 30, 2021, was
similarly due primarily to a 50-basis point increase in the average
yield on interest-earning assets from 3.93%, partially offset by a
22-basis point increase in the average cost of interest-bearing
liabilities from 0.71%.
Noninterest income for the quarter ended
September 30, 2022, totaled $778,000, compared to $961,000 for
the quarter ended June 30, 2022, and $999,000 for the quarter
ended September 30, 2021. The decrease in noninterest income
for the quarter ended September 30, 2022, compared to the
quarter ended June 30, 2022, was primarily due to lower loan
related fees, including a $215,000 decline in loan prepayment
penalties. As compared to the quarter ended September 30,
2021, the decrease in the current quarter likewise primarily
reflects reduced loan fees, in addition to a decrease in BOLI
income.
Noninterest expense totaled $9.0 million
for the quarter ended September 30, 2022, compared to
$9.3 million for the quarter ended June 30, 2022, and
$8.3 million for the quarter ended September 30, 2021.
The decrease in noninterest expense for the quarter ended
September 30, 2022, compared to the quarter ended
June 30, 2022, was primarily due to a $182,000 decline in
professional fees due in part to $151,000 in regulatory examination
fees and fees paid to human resources recruiters to fill open
positions in the quarter ended June 30, 2022. The increase in
noninterest expense for the quarter ended September 30, 2022,
compared to the quarter ended September 30, 2021, primarily
reflects a $561,000 increase in salaries and employee benefits, due
primarily to 25 open positions filled last quarter.
Forward-looking statements:
When used in this press release and in other
documents filed with or furnished to the Securities and Exchange
Commission (the “SEC”), in press releases or other public
stockholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases
“believe,” “will,” “will likely result,” “are expected to,” “will
continue,” “is anticipated,” “estimate,” “project,” “plans,” or
similar expressions are intended to identify “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are not
historical facts but instead represent management's current
expectations and forecasts regarding future events many of which
are inherently uncertain and outside of our control. Actual results
may differ, possibly materially from those currently expected or
projected in these forward-looking statements. Factors that could
cause our actual results to differ materially from those described
in the forward-looking statements, include, but are not limited to,
the following: potential adverse impacts to economic conditions in
our local market areas, other markets where the Company has lending
relationships, or other aspects of the Company’s business
operations or financial markets, including, without limitation, as
a result of employment levels, labor shortages and the effects of
inflation, a potential recession or slowed economic growth caused
by increasing political instability from acts of war including
Russia’s invasion of Ukraine, as well as increasing oil prices and
supply chain disruptions, and any governmental or societal
responses to the COVID-19 pandemic, including the possibility of
new COVID-19 variants; increased competitive pressures; changes in
the interest rate environment; legislative and regulatory changes;
and other factors described in the Company’s latest Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q and other filings
with the Securities and Exchange Commission – that are available on
our website at www.ffnwb.com and on the SEC's website at
www.sec.gov.
Any of the forward-looking statements that we
make in this Press Release and in the other public statements are
based upon management's beliefs and assumptions at the time they
are made and may turn out to be wrong because of the inaccurate
assumptions we might make, because of the factors illustrated above
or because of other factors that we cannot foresee. Therefore,
these factors should be considered in evaluating the
forward-looking statements, and undue reliance should not be placed
on such statements. We do not undertake and specifically disclaim
any obligation to revise any forward-looking statements to reflect
the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements. These risks could
cause our actual results for 2022 and beyond to differ materially
from those expressed in any forward-looking statements made by, or
on behalf of, us and could negatively affect our operating and
stock performance.
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESConsolidated Balance Sheets(Dollars in
thousands, except share data)(Unaudited)
Assets |
Sep 30,2022 |
|
Jun 30,2022 |
|
Sep 30,2021 |
|
ThreeMonthChange |
|
OneYearChange |
Cash on hand and in banks |
$ |
9,684 |
|
|
$ |
9,458 |
|
|
$ |
7,243 |
|
|
2.4 |
% |
|
33.7 |
% |
Interest-earning deposits with banks |
|
15,227 |
|
|
|
26,194 |
|
|
|
71,869 |
|
|
(41.9 |
) |
|
(78.8 |
) |
Investments available-for-sale, at fair value |
|
221,278 |
|
|
|
210,826 |
|
|
|
178,061 |
|
|
5.0 |
|
|
24.3 |
|
Investments held-to-maturity, at amortized cost |
|
2,438 |
|
|
|
2,432 |
|
|
|
2,425 |
|
|
0.2 |
|
|
0.5 |
|
Loans receivable, net of allowance of $14,726, $15,125, and $15,057
respectively |
|
1,143,348 |
|
|
|
1,119,795 |
|
|
|
1,101,669 |
|
|
2.1 |
|
|
3.8 |
|
Federal Home Loan Bank ("FHLB") stock, at cost |
|
7,712 |
|
|
|
5,512 |
|
|
|
6,465 |
|
|
39.9 |
|
|
19.3 |
|
Accrued interest receivable |
|
6,261 |
|
|
|
5,738 |
|
|
|
5,681 |
|
|
9.1 |
|
|
10.2 |
|
Deferred tax assets, net |
|
2,355 |
|
|
|
1,840 |
|
|
|
746 |
|
|
28.0 |
|
|
215.7 |
|
Premises and equipment, net |
|
21,608 |
|
|
|
21,855 |
|
|
|
22,628 |
|
|
(1.1 |
) |
|
(4.5 |
) |
Bank owned life insurance ("BOLI"), net |
|
36,064 |
|
|
|
35,819 |
|
|
|
34,994 |
|
|
0.7 |
|
|
3.1 |
|
Prepaid expenses and other assets |
|
13,605 |
|
|
|
10,493 |
|
|
|
2,975 |
|
|
29.7 |
|
|
357.3 |
|
Right of use asset ("ROU"), net |
|
3,260 |
|
|
|
3,301 |
|
|
|
3,838 |
|
|
(1.2 |
) |
|
(15.1 |
) |
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
0.0 |
|
|
0.0 |
|
Core deposit intangible, net |
|
582 |
|
|
|
616 |
|
|
|
719 |
|
|
(5.5 |
) |
|
(19.1 |
) |
Total assets |
$ |
1,484,311 |
|
|
$ |
1,454,768 |
|
|
$ |
1,440,202 |
|
|
2.0 |
|
|
3.1 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
118,842 |
|
|
$ |
127,808 |
|
|
$ |
115,311 |
|
|
(7.0 |
) |
|
3.1 |
|
Interest-bearing deposits |
|
1,030,594 |
|
|
|
1,051,661 |
|
|
|
1,026,425 |
|
|
(2.0 |
) |
|
0.4 |
|
Total deposits |
|
1,149,436 |
|
|
|
1,179,469 |
|
|
|
1,141,736 |
|
|
(2.5 |
) |
|
0.7 |
|
Advances from the FHLB |
|
150,000 |
|
|
|
95,000 |
|
|
|
120,000 |
|
|
57.9 |
|
|
25.0 |
|
Advance payments from borrowers for taxesand insurance |
|
5,033 |
|
|
|
2,670 |
|
|
|
5,075 |
|
|
88.5 |
|
|
(0.8 |
) |
Lease liability, net |
|
3,441 |
|
|
|
3,482 |
|
|
|
3,994 |
|
|
(1.2 |
) |
|
(13.8 |
) |
Accrued interest payable |
|
185 |
|
|
|
115 |
|
|
|
206 |
|
|
60.9 |
|
|
(10.2 |
) |
Other liabilities |
|
18,326 |
|
|
|
17,136 |
|
|
|
7,735 |
|
|
6.9 |
|
|
136.9 |
|
Total liabilities |
|
1,326,421 |
|
|
|
1,297,872 |
|
|
|
1,278,746 |
|
|
2.2 |
|
|
3.7 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; authorized 10,000,000 shares; no
shares issued or outstanding |
|
- |
|
|
|
- |
|
|
|
- |
|
|
n/a |
|
|
n/a |
|
Common stock, $0.01 par value; authorized 90,000,000 shares; issued
and outstanding 9,127,595 shares at September 30, 2022,9,091,533
shares at June 30, 2022, and9,483,081 shares at September 30,
2021 |
|
91 |
|
|
|
91 |
|
|
|
95 |
|
|
0.0 |
|
|
(4.2 |
) |
Additional paid-in capital |
|
72,295 |
|
|
|
71,835 |
|
|
|
78,311 |
|
|
0.6 |
|
|
(7.7 |
) |
Retained earnings |
|
92,928 |
|
|
|
90,066 |
|
|
|
84,402 |
|
|
3.2 |
|
|
10.1 |
|
Accumulated other comprehensive loss, net of tax |
|
(7,424 |
) |
|
|
(4,814 |
) |
|
|
(223 |
) |
|
54.2 |
|
|
3229.1 |
|
Unearned Employee Stock Ownership Plan ("ESOP") shares |
|
- |
|
|
|
(282 |
) |
|
|
(1,129 |
) |
|
(100.0 |
) |
|
(100.0 |
) |
Total stockholders' equity |
|
157,890 |
|
|
|
156,896 |
|
|
|
161,456 |
|
|
0.6 |
|
|
(2.2 |
) |
Total liabilities and stockholders' equity |
$ |
1,484,311 |
|
|
$ |
1,454,768 |
|
|
$ |
1,440,202 |
|
|
2.0 |
|
|
3.1 |
|
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESConsolidated Income Statements(Dollars in
thousands, except share data)(Unaudited)
|
Quarter Ended |
|
|
|
|
|
Sep 30,2022 |
|
Jun 30,2022 |
|
Sep 30,2021 |
|
ThreeMonthChange |
|
OneYearChange |
Interest income |
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
13,618 |
|
|
$ |
12,273 |
|
$ |
12,508 |
|
11.0 |
% |
|
8.9 |
% |
Investment securities |
|
1,609 |
|
|
|
1,156 |
|
|
818 |
|
39.2 |
|
|
96.7 |
|
Interest-earning deposits with banks |
|
125 |
|
|
|
37 |
|
|
24 |
|
237.8 |
|
|
420.8 |
|
Dividends on FHLB Stock |
|
83 |
|
|
|
71 |
|
|
84 |
|
16.9 |
|
|
(1.2 |
) |
Total interest income |
|
15,435 |
|
|
|
13,537 |
|
|
13,434 |
|
14.0 |
|
|
14.9 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
2,326 |
|
|
|
1,398 |
|
|
1,612 |
|
66.4 |
|
|
44.3 |
|
Other borrowings |
|
392 |
|
|
|
315 |
|
|
431 |
|
24.4 |
|
|
(9.0 |
) |
Total interest expense |
|
2,718 |
|
|
|
1,713 |
|
|
2,043 |
|
58.7 |
|
|
33.0 |
|
Net interest income |
|
12,717 |
|
|
|
11,824 |
|
|
11,391 |
|
7.6 |
|
|
11.6 |
|
(Recapture of provision)
provision for loan losses |
|
(400 |
) |
|
|
- |
|
|
100 |
|
n/a |
|
|
(500.0 |
) |
Net interest income after
(recapture of provision) provision for loan losses |
|
13,117 |
|
|
|
11,824 |
|
|
11,291 |
|
10.9 |
|
|
16.2 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
|
|
BOLI income |
|
243 |
|
|
|
251 |
|
|
377 |
|
(3.2 |
) |
|
(35.5 |
) |
Wealth management revenue |
|
89 |
|
|
|
104 |
|
|
64 |
|
(14.4 |
) |
|
39.1 |
|
Deposit related fees |
|
245 |
|
|
|
246 |
|
|
228 |
|
(0.4 |
) |
|
7.5 |
|
Loan related fees |
|
195 |
|
|
|
354 |
|
|
300 |
|
(44.9 |
) |
|
(35.0 |
) |
Other |
|
6 |
|
|
|
6 |
|
|
30 |
|
0.0 |
|
|
(80.0 |
) |
Total noninterest income |
|
778 |
|
|
|
961 |
|
|
999 |
|
(19.0 |
) |
|
(22.1 |
) |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
5,417 |
|
|
|
5,478 |
|
|
4,856 |
|
(1.1 |
) |
|
11.6 |
|
Occupancy and equipment |
|
1,188 |
|
|
|
1,205 |
|
|
1,116 |
|
(1.4 |
) |
|
6.5 |
|
Professional fees |
|
549 |
|
|
|
731 |
|
|
502 |
|
(24.9 |
) |
|
9.4 |
|
Data processing |
|
675 |
|
|
|
692 |
|
|
626 |
|
(2.5 |
) |
|
7.8 |
|
Regulatory assessments |
|
105 |
|
|
|
90 |
|
|
121 |
|
16.7 |
|
|
(13.2 |
) |
Insurance and bond premiums |
|
112 |
|
|
|
113 |
|
|
106 |
|
(0.9 |
) |
|
5.7 |
|
Marketing |
|
92 |
|
|
|
96 |
|
|
64 |
|
(4.2 |
) |
|
43.8 |
|
Other general and administrative |
|
876 |
|
|
|
880 |
|
|
942 |
|
(0.5 |
) |
|
(7.0 |
) |
Total noninterest expense |
|
9,014 |
|
|
|
9,285 |
|
|
8,333 |
|
(2.9 |
) |
|
8.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before federal income
tax provision |
|
4,881 |
|
|
|
3,500 |
|
|
3,957 |
|
39.5 |
|
|
23.4 |
|
Federal income tax
provision |
|
935 |
|
|
|
692 |
|
|
758 |
|
35.1 |
|
|
23.4 |
|
Net income |
$ |
3,946 |
|
|
$ |
2,808 |
|
$ |
3,199 |
|
40.5 |
% |
|
23.4 |
% |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.44 |
|
|
$ |
0.31 |
|
$ |
0.34 |
|
|
|
|
Diluted earnings per
share |
$ |
0.43 |
|
|
$ |
0.31 |
|
$ |
0.34 |
|
|
|
|
Weighted average number of
common shares outstanding |
|
8,981,037 |
|
|
|
8,982,969 |
|
|
9,314,456 |
|
|
|
|
Weighted average number of
diluted shares outstanding |
|
9,068,541 |
|
|
|
9,085,913 |
|
|
9,446,702 |
|
|
|
|
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESConsolidated Income Statements(Dollars in
thousands, except share data)(Unaudited)
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
OneYearChange |
Interest income |
|
|
|
|
|
Loans, including fees |
$ |
37,893 |
|
|
$ |
37,772 |
|
|
0.3 |
% |
Investment securities |
|
3,595 |
|
|
|
2,420 |
|
|
48.6 |
|
Interest-earning deposits with banks |
|
181 |
|
|
|
53 |
|
|
241.5 |
|
Dividends on FHLB Stock |
|
228 |
|
|
|
247 |
|
|
(7.7 |
) |
Total interest income |
|
41,897 |
|
|
|
40,492 |
|
|
3.5 |
|
Interest expense |
|
|
|
|
|
Deposits |
|
4,982 |
|
|
|
5,826 |
|
|
(14.5 |
) |
Other borrowings |
|
1,006 |
|
|
|
1,263 |
|
|
(20.3 |
) |
Total interest expense |
|
5,988 |
|
|
|
7,089 |
|
|
(15.5 |
) |
Net interest income |
|
35,909 |
|
|
|
33,403 |
|
|
7.5 |
|
Recapture of provision for
loan losses |
|
(900 |
) |
|
|
(300 |
) |
|
200.0 |
|
Net interest income after
recapture of provision for loan losses |
|
36,809 |
|
|
|
33,703 |
|
|
9.2 |
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
BOLI income |
|
782 |
|
|
|
891 |
|
|
(12.2 |
) |
Wealth management revenue |
|
276 |
|
|
|
391 |
|
|
(29.4 |
) |
Deposit related fees |
|
705 |
|
|
|
654 |
|
|
7.8 |
|
Loan related fees |
|
748 |
|
|
|
714 |
|
|
4.8 |
|
Other |
|
17 |
|
|
|
86 |
|
|
(80.2 |
) |
Total noninterest income |
|
2,528 |
|
|
|
2,736 |
|
|
(7.6 |
) |
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
Salaries and employee benefits |
|
16,156 |
|
|
|
14,863 |
|
|
8.7 |
|
Occupancy and equipment |
|
3,621 |
|
|
|
3,403 |
|
|
6.4 |
|
Professional fees |
|
1,732 |
|
|
|
1,423 |
|
|
21.7 |
|
Data processing |
|
2,044 |
|
|
|
2,003 |
|
|
2.0 |
|
Regulatory assessments |
|
295 |
|
|
|
356 |
|
|
(17.1 |
) |
Insurance and bond premiums |
|
354 |
|
|
|
341 |
|
|
3.8 |
|
Marketing |
|
226 |
|
|
|
116 |
|
|
94.8 |
|
Other general and administrative |
|
2,497 |
|
|
|
2,146 |
|
|
16.4 |
|
Total noninterest expense |
|
26,925 |
|
|
|
24,651 |
|
|
9.2 |
|
Income before federal income
tax provision |
|
12,412 |
|
|
|
11,788 |
|
|
5.3 |
|
Federal income tax
provision |
|
2,398 |
|
|
|
2,281 |
|
|
5.1 |
|
Net income |
$ |
10,014 |
|
|
$ |
9,507 |
|
|
5.3 |
% |
|
|
|
|
|
|
Basic earnings per share |
$ |
1.11 |
|
|
$ |
1.01 |
|
|
|
Diluted earnings per
share |
$ |
1.10 |
|
|
$ |
0.99 |
|
|
|
Weighted average number of
common shares outstanding |
|
8,983,806 |
|
|
|
9,412,196 |
|
|
|
Weighted average number of
diluted shares outstanding |
|
9,088,206 |
|
|
|
9,514,165 |
|
|
|
The following table presents a breakdown of the loan portfolio
(unaudited):
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
(Dollars in thousands) |
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
Residential: |
|
|
|
|
|
|
|
|
|
|
|
Micro-unit apartments |
$ |
- |
|
|
0.0 |
% |
|
$ |
- |
|
|
0.0 |
% |
|
$ |
8,220 |
|
|
0.7 |
% |
Other multifamily |
|
132,755 |
|
|
11.4 |
|
|
|
135,961 |
|
|
12.0 |
|
|
|
135,586 |
|
|
12.2 |
|
Total multifamily residential |
|
132,755 |
|
|
11.4 |
|
|
|
135,961 |
|
|
12.0 |
|
|
|
143,806 |
|
|
12.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-residential: |
|
|
|
|
|
|
|
|
|
|
|
Office |
|
84,768 |
|
|
7.3 |
|
|
|
84,905 |
|
|
7.5 |
|
|
|
89,622 |
|
|
8.0 |
|
Retail |
|
137,417 |
|
|
11.9 |
|
|
|
138,892 |
|
|
12.2 |
|
|
|
124,439 |
|
|
11.1 |
|
Mobile home park |
|
23,531 |
|
|
2.0 |
|
|
|
22,387 |
|
|
2.0 |
|
|
|
20,838 |
|
|
1.9 |
|
Hotel / motel |
|
56,715 |
|
|
4.9 |
|
|
|
57,285 |
|
|
5.0 |
|
|
|
65,210 |
|
|
5.8 |
|
Nursing Home |
|
12,452 |
|
|
1.2 |
|
|
|
12,535 |
|
|
1.1 |
|
|
|
12,784 |
|
|
1.1 |
|
Warehouse |
|
19,934 |
|
|
1.7 |
|
|
|
18,943 |
|
|
1.7 |
|
|
|
16,999 |
|
|
1.5 |
|
Storage |
|
34,069 |
|
|
2.9 |
|
|
|
34,261 |
|
|
3.0 |
|
|
|
33,163 |
|
|
3.0 |
|
Other non-residential |
|
44,600 |
|
|
3.9 |
|
|
|
43,485 |
|
|
3.8 |
|
|
|
29,301 |
|
|
2.6 |
|
Total non-residential |
|
413,486 |
|
|
35.8 |
|
|
|
412,693 |
|
|
36.3 |
|
|
|
392,356 |
|
|
35.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction/land: |
|
|
|
|
|
|
|
|
|
|
|
One-to-four family residential |
|
41,606 |
|
|
3.6 |
|
|
|
34,932 |
|
|
3.1 |
|
|
|
36,213 |
|
|
3.2 |
|
Multifamily |
|
15,500 |
|
|
1.3 |
|
|
|
15,500 |
|
|
1.4 |
|
|
|
47,549 |
|
|
4.3 |
|
Commercial |
|
- |
|
|
0.0 |
|
|
|
- |
|
|
0.0 |
|
|
|
6,189 |
|
|
0.6 |
|
Land development |
|
15,518 |
|
|
1.3 |
|
|
|
13,915 |
|
|
1.2 |
|
|
|
11,337 |
|
|
1.0 |
|
Total construction/land |
|
72,624 |
|
|
6.2 |
|
|
|
64,347 |
|
|
5.7 |
|
|
|
101,288 |
|
|
9.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
residential: |
|
|
|
|
|
|
|
|
|
|
|
Permanent owner occupied |
|
221,212 |
|
|
19.1 |
|
|
|
212,364 |
|
|
18.7 |
|
|
|
184,990 |
|
|
16.6 |
|
Permanent non-owner occupied |
|
228,223 |
|
|
19.7 |
|
|
|
224,390 |
|
|
19.8 |
|
|
|
197,686 |
|
|
17.7 |
|
Total one-to-four family residential |
|
449,435 |
|
|
38.8 |
|
|
|
436,754 |
|
|
38.5 |
|
|
|
382,676 |
|
|
34.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Business: |
|
|
|
|
|
|
|
|
|
|
|
Aircraft |
|
2,335 |
|
|
0.2 |
|
|
|
3,130 |
|
|
0.3 |
|
|
|
6,322 |
|
|
0.6 |
|
Small Business Administration ("SBA") |
|
520 |
|
|
0.1 |
|
|
|
532 |
|
|
0.1 |
|
|
|
862 |
|
|
0.1 |
|
Paycheck Protection Plan ("PPP") |
|
1,209 |
|
|
0.1 |
|
|
|
1,528 |
|
|
0.1 |
|
|
|
22,379 |
|
|
2.0 |
|
Other business |
|
27,990 |
|
|
2.4 |
|
|
|
28,502 |
|
|
2.5 |
|
|
|
25,185 |
|
|
2.2 |
|
Total business |
|
32,054 |
|
|
2.8 |
|
|
|
33,692 |
|
|
3.0 |
|
|
|
54,748 |
|
|
4.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
Classic, collectible and other auto |
|
47,141 |
|
|
4.1 |
|
|
|
42,009 |
|
|
3.7 |
|
|
|
32,819 |
|
|
2.9 |
|
Other consumer |
|
10,478 |
|
|
0.9 |
|
|
|
9,594 |
|
|
0.8 |
|
|
|
9,665 |
|
|
0.9 |
|
Total consumer |
|
57,619 |
|
|
5.0 |
|
|
|
51,603 |
|
|
4.5 |
|
|
|
42,484 |
|
|
3.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
1,157,973 |
|
|
100.0 |
% |
|
|
1,135,050 |
|
|
100.0 |
% |
|
|
1,117,358 |
|
|
100.0 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Deferred loan fees, net |
|
(101 |
) |
|
|
|
|
130 |
|
|
|
|
|
632 |
|
|
|
ALLL |
|
14,726 |
|
|
|
|
|
15,125 |
|
|
|
|
|
15,057 |
|
|
|
Loans receivable, net |
$ |
1,143,348 |
|
|
|
|
$ |
1,119,795 |
|
|
|
|
$ |
1,101,669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentrations of
credit:(1) |
|
|
|
|
|
|
|
|
|
|
|
Construction loans as % of total capital |
|
49.1 |
% |
|
|
|
|
45.2 |
% |
|
|
|
|
67.1 |
% |
|
|
Total non-owner occupied
commercialreal estate as % of total capital |
|
354.6 |
% |
|
|
|
|
360.0 |
% |
|
|
|
|
389.6 |
% |
|
|
(1) Concentrations of credit percentages are for
First Financial Northwest Bank only using classifications in
accordance with FDIC regulatory guidelines.
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESKey Financial Measures(Unaudited)
|
At or For the Quarter End |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share data) |
Performance
Ratios:(1) |
|
|
|
|
|
|
|
|
|
Return on assets |
|
1.06 |
% |
|
|
0.79 |
% |
|
|
0.93 |
% |
|
|
0.76 |
% |
|
|
0.88 |
% |
Return on equity |
|
9.88 |
|
|
|
7.11 |
|
|
|
8.33 |
|
|
|
6.79 |
|
|
|
7.84 |
|
Dividend payout ratio |
|
27.40 |
|
|
|
38.51 |
|
|
|
33.20 |
|
|
|
36.67 |
|
|
|
32.35 |
|
Equity-to-assets ratio |
|
10.64 |
|
|
|
10.78 |
|
|
|
11.15 |
|
|
|
11.07 |
|
|
|
11.21 |
|
Tangible equity ratio(2) |
|
10.55 |
|
|
|
10.69 |
|
|
|
11.05 |
|
|
|
10.97 |
|
|
|
11.11 |
|
Net interest margin |
|
3.65 |
|
|
|
3.53 |
|
|
|
3.43 |
|
|
|
3.40 |
|
|
|
3.33 |
|
Average interest-earning
assets to average interest-bearing liabilities |
|
119.08 |
|
|
|
120.21 |
|
|
|
119.59 |
|
|
|
119.08 |
|
|
|
119.35 |
|
Efficiency ratio |
|
66.80 |
|
|
|
72.62 |
|
|
|
70.96 |
|
|
|
68.62 |
|
|
|
67.26 |
|
Noninterest expense as a
percent of average total assets |
|
2.43 |
|
|
|
2.60 |
|
|
|
2.46 |
|
|
|
2.42 |
|
|
|
2.30 |
|
Book value per common
share |
$ |
17.30 |
|
|
$ |
17.26 |
|
|
$ |
17.32 |
|
|
$ |
17.30 |
|
|
$ |
17.03 |
|
Tangible book value per
share(2) |
|
17.14 |
|
|
|
17.09 |
|
|
|
17.15 |
|
|
|
17.13 |
|
|
|
16.86 |
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios:(3) |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
10.43 |
% |
|
|
10.53 |
% |
|
|
10.51 |
% |
|
|
10.34 |
% |
|
|
10.19 |
% |
Common equity tier 1 capital
ratio |
|
14.24 |
|
|
|
14.22 |
|
|
|
14.08 |
|
|
|
14.23 |
|
|
|
14.25 |
|
Tier 1 capital ratio |
|
14.24 |
|
|
|
14.22 |
|
|
|
14.08 |
|
|
|
14.23 |
|
|
|
14.25 |
|
Total capital ratio |
|
15.49 |
|
|
|
15.47 |
|
|
|
15.33 |
|
|
|
15.48 |
|
|
|
15.50 |
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:(4) |
|
|
|
|
|
|
|
|
|
Nonperforming loans as a
percent of total loans |
|
0.02 |
|
|
|
0.00 |
|
|
|
0.02 |
|
|
|
0.00 |
|
|
|
0.00 |
|
Nonperforming assets as a
percent of total assets |
|
0.02 |
|
|
|
0.00 |
|
|
|
0.01 |
|
|
|
0.00 |
|
|
|
0.00 |
|
ALLL as a percent of total
loans |
|
1.27 |
|
|
|
1.33 |
|
|
|
1.33 |
|
|
|
1.40 |
|
|
|
1.35 |
|
Net (recoveries) charge-offs
to average loans receivable, net |
|
(0.00 |
) |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses: |
|
|
|
|
|
|
|
|
|
ALLL, beginning of the
quarter |
$ |
15,125 |
|
|
$ |
15,159 |
|
|
$ |
15,657 |
|
|
$ |
15,057 |
|
|
$ |
14,878 |
|
(Recapture of provision)
provision |
|
(400 |
) |
|
|
- |
|
|
|
(500 |
) |
|
|
600 |
|
|
|
100 |
|
Charge-offs |
|
- |
|
|
|
(37 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Recoveries |
|
1 |
|
|
|
3 |
|
|
|
2 |
|
|
|
- |
|
|
|
79 |
|
ALLL, end of the quarter |
$ |
14,726 |
|
|
$ |
15,125 |
|
|
$ |
15,159 |
|
|
$ |
15,657 |
|
|
$ |
15,057 |
|
(1) Performance ratios are calculated on an
annualized basis.(2) Tangible equity excludes goodwill and core
deposit intangible assets. Tangible assets exclude goodwill and
other intangible assets. The tangible equity ratio and tangible
book value per share are non-GAAP financial measures. Refer to
Non-GAAP Financial Measures at the end of this press release for a
reconciliation to the nearest GAAP equivalents.(3) Capital ratios
are for First Financial Northwest Bank only.(4) Loans are reported
net of undisbursed funds.
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESKey Financial Measures
(continued)(Unaudited)
|
At or For the Quarter Ended |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
Sep 30, |
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share data) |
Average Yields and
Costs:(1) |
|
|
|
|
|
|
|
|
|
Yield on loans |
|
4.77 |
% |
|
|
4.41 |
% |
|
|
4.36 |
% |
|
|
4.44 |
% |
|
|
4.54 |
% |
Yield on investment
securities |
|
2.90 |
|
|
|
2.33 |
|
|
|
1.96 |
|
|
|
1.79 |
|
|
|
1.73 |
|
Yield on interest-earning
deposits |
|
2.02 |
|
|
|
0.67 |
|
|
|
0.15 |
|
|
|
0.13 |
|
|
|
0.14 |
|
Yield on FHLB stock |
|
5.56 |
|
|
|
4.82 |
|
|
|
5.49 |
|
|
|
5.89 |
|
|
|
5.15 |
|
Yield on interest-earning assets |
|
4.43 |
% |
|
|
4.04 |
% |
|
|
3.90 |
% |
|
|
3.91 |
% |
|
|
3.93 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of interest-bearing
deposits |
|
0.87 |
% |
|
|
0.55 |
% |
|
|
0.50 |
% |
|
|
0.53 |
% |
|
|
0.63 |
% |
Cost of borrowings |
|
1.48 |
|
|
|
1.21 |
|
|
|
1.28 |
|
|
|
1.33 |
|
|
|
1.42 |
|
Cost of interest-bearing liabilities |
|
0.93 |
% |
|
|
0.61 |
% |
|
|
0.56 |
% |
|
|
0.61 |
% |
|
|
0.71 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of total deposits |
|
0.78 |
% |
|
|
0.49 |
% |
|
|
0.44 |
% |
|
|
0.48 |
% |
|
|
0.56 |
% |
Cost of funds |
|
0.84 |
|
|
|
0.55 |
|
|
|
0.51 |
|
|
|
0.55 |
|
|
|
0.64 |
|
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
1,132,233 |
|
|
$ |
1,117,079 |
|
|
$ |
1,115,428 |
|
|
$ |
1,108,836 |
|
|
$ |
1,094,124 |
|
Investment securities |
|
220,244 |
|
|
|
198,819 |
|
|
|
171,685 |
|
|
|
178,500 |
|
|
|
187,261 |
|
Interest-earning deposits |
|
24,565 |
|
|
|
22,010 |
|
|
|
49,857 |
|
|
|
56,800 |
|
|
|
68,618 |
|
FHLB stock |
|
5,923 |
|
|
|
5,905 |
|
|
|
5,467 |
|
|
|
5,726 |
|
|
|
6,465 |
|
Total interest-earning assets |
$ |
1,382,965 |
|
|
$ |
1,343,813 |
|
|
$ |
1,342,437 |
|
|
$ |
1,349,862 |
|
|
$ |
1,356,468 |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
1,056,079 |
|
|
$ |
1,013,080 |
|
|
$ |
1,027,507 |
|
|
$ |
1,032,090 |
|
|
$ |
1,016,540 |
|
Borrowings |
|
105,272 |
|
|
|
104,835 |
|
|
|
95,000 |
|
|
|
101,522 |
|
|
|
120,000 |
|
Total interest-bearing
liabilities |
|
1,161,351 |
|
|
|
1,117,915 |
|
|
|
1,122,507 |
|
|
|
1,133,612 |
|
|
|
1,136,540 |
|
Noninterest-bearing
deposits |
|
125,561 |
|
|
|
131,415 |
|
|
|
122,175 |
|
|
|
119,142 |
|
|
|
121,256 |
|
Total deposits and borrowings |
$ |
1,286,912 |
|
|
$ |
1,249,330 |
|
|
$ |
1,244,682 |
|
|
$ |
1,252,754 |
|
|
$ |
1,257,796 |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
1,470,816 |
|
|
$ |
1,431,003 |
|
|
$ |
1,424,054 |
|
|
$ |
1,430,199 |
|
|
$ |
1,436,801 |
|
Average stockholders'
equity |
|
158,515 |
|
|
|
158,349 |
|
|
|
158,756 |
|
|
|
160,183 |
|
|
|
161,892 |
|
(1) Yields and costs are annualized.
Non-GAAP Financial Measures
In addition to financial results presented in
accordance with generally accepted accounting principles utilized
in the United States ("GAAP"), this earnings release contains
non-GAAP financial measures that include tangible equity, tangible
assets, tangible book value per share, and the tangible equity
ratio. The Company believes that these non-GAAP financial measures
and ratios as presented are useful for both investors and
management to understand the effects of certain items and provides
an alternative view of the Company’s performance over time and in
comparison to the Company’s competitors. Non-GAAP financial
measures have limitations, are not required to be uniformly applied
and are not audited. They should not be considered in isolation and
are not a substitute for other measures in this earnings release
that are presented in accordance with GAAP. These non-GAAP measures
may not be comparable to similarly titled measures reported by
other companies.
The following tables provide a reconciliation
between the GAAP and non-GAAP measures:
|
|
Quarter Ended |
|
|
Sep 30, 2022 |
|
|
|
Jun 30, 2022 |
|
|
|
Mar 31, 2022 |
|
|
|
Dec 31, 2021 |
|
|
|
Sep 30, 2021 |
|
|
(Dollars in thousands, except per share data) |
Tangible equity to tangible
assets and tangible book value per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity (GAAP) |
$ |
157,890 |
|
|
$ |
156,896 |
|
|
$ |
157,757 |
|
|
$ |
157,879 |
|
|
$ |
161,456 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
Core deposit intangible, net |
|
582 |
|
|
|
616 |
|
|
|
650 |
|
|
|
684 |
|
|
|
719 |
|
Tangible equity (Non-GAAP) |
$ |
156,419 |
|
|
$ |
155,391 |
|
|
$ |
156,218 |
|
|
$ |
156,306 |
|
|
$ |
159,848 |
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
$ |
1,484,311 |
|
|
$ |
1,454,768 |
|
|
$ |
1,415,054 |
|
|
$ |
1,426,329 |
|
|
$ |
1,440,202 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
Core deposit intangible, net |
|
582 |
|
|
|
616 |
|
|
|
650 |
|
|
|
684 |
|
|
|
719 |
|
Tangible assets (Non-GAAP) |
$ |
1,482,840 |
|
|
$ |
1,453,263 |
|
|
$ |
1,413,515 |
|
|
$ |
1,424,756 |
|
|
$ |
1,438,594 |
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at period end |
|
9,127,595 |
|
|
|
9,091,533 |
|
|
|
9,107,977 |
|
|
|
9,125,759 |
|
|
|
9,483,081 |
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets ratio (GAAP) |
|
10.64 |
% |
|
|
10.78 |
% |
|
|
11.15 |
% |
|
|
11.07 |
% |
|
|
11.21 |
% |
Tangible equity ratio (Non-GAAP) |
|
10.55 |
|
|
|
10.69 |
|
|
|
11.05 |
|
|
|
10.97 |
|
|
|
11.11 |
|
Book value per common share (GAAP) |
$ |
17.30 |
|
|
$ |
17.26 |
|
|
$ |
17.32 |
|
|
$ |
17.30 |
|
|
$ |
17.03 |
|
Tangible book value per share (Non-GAAP) |
|
17.14 |
|
|
|
17.09 |
|
|
|
17.15 |
|
|
|
17.13 |
|
|
|
16.86 |
|
For more information, contact:Joseph W. Kiley III, President and
Chief Executive OfficerRich Jacobson, Executive Vice President and
Chief Financial Officer(425) 255-4400
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