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
December 31, 2022, of $3.2 million, or $0.35 per diluted
share, compared to $3.9 million, or $0.43 per diluted share,
for the quarter ended September 30, 2022, and
$2.7 million, or $0.29 per diluted share, for the quarter
ended December 31, 2021. For the year ended December 31,
2022, net income was $13.2 million, or $1.45 per diluted
share, compared to net income of $12.2 million, or $1.29 per
diluted share, for the year ended December 31, 2021.
The provision for loan losses was the primary
reason for the decrease in net income for the quarter ended
December 31, 2022, compared to the quarter ended September 30,
2022. As a result of the quarterly analysis of our loan portfolio,
the Company recorded a provision for loan losses of $500,000 for
the quarter ended December 31, 2022, compared to a $400,000
recapture of provision for loan losses for the quarter ended
September 30, 2022. The provision in the current quarter was
primarily attributable to growth in loans receivable, while the
recapture in the prior quarter was primarily attributable to the
net impact of changes in the loan portfolio mix, loan downgrades
and changes in impairment status.
“Our residential lending division continued to
exceed expectations, resulting in growth of $26.4 million in the
quarter ended December 31, 2022, bringing year-to-date growth
to $90.7 million in one-to-four family residential loan balances,
despite a rapidly increasing interest rate environment throughout
the year,” noted Joseph W. Kiley III, President and CEO. “This
growth was fairly evenly distributed between owner occupied homes
and non-owner occupied investment properties, with growth of $48.5
million and $42.3 million, respectively. In addition, I am
very proud of the efforts of our credit underwriting teams and the
focus on credit quality throughout the bank, with nonperforming
asset and loan delinquency balances approximating $200,000 on total
loans receivable of $1.2 billion,” continued Kiley.
“Finally, I am pleased to report that during a
year when many financial institutions saw deterioration in their
book value per share, ours increased to $17.57 at December 31,
2022, compared to $17.30 one year ago,” concluded Kiley.
Highlights for the quarter and year ended
December 31, 2022:
- Net loans receivable increased by
$23.7 million in the quarter to $1.17 billion at
December 31, 2022, on continued strength in one-to-four family
residential, construction/land, and classic, collectible and other
auto loans.
- The Bank increased its reliance on
brokered deposits to fund its asset growth in the quarter, while
also increasing noninterest-bearing demand deposits by
$1.1 million in the quarter and $2.2 million year over
year.
- The Company’s book value per share
increased to $17.57 at December 31, 2022, compared to $17.30
at both September 30, 2022, and December 31, 2021.
- The Company repurchased 84,981
shares at an average price of $16.43 per share during the year, an
amount equal to approximately 1.0% of shares outstanding at the
beginning of 2022.
- The Company paid regular quarterly
cash dividends to shareholders totaling $0.48 per share for the
year, a 9.1% increase over the prior year.
- The Bank’s Tier 1 leverage and
total capital ratios at December 31, 2022, were 10.3% and
15.6%, respectively compared to 10.4% and 15.5%, respectively, at
September 30, 2022, and 10.3% and 15.5%, respectively at
December 31, 2021.
- Credit quality remained strong as
nonperforming assets declined to $193,000, or 0.01% of total
assets, and there were only an additional $27,000 in loans over 30
days past due at December 31, 2022.
- Based on management’s evaluation of
the adequacy of the allowance for loan and lease losses (“ALLL”) at
December 31, 2022, the Bank recorded a $500,000 provision for
loan losses during the quarter, reducing the recapture of provision
for loan losses recognized during the year to $400,000. For the
year ended December 31, 2021, the Bank recorded a $300,000
provision for loan losses.
Deposits totaled $1.17 billion at
December 31, 2022, compared to $1.15 billion at September
30, 2022, and $1.16 billion at December 31, 2021. Total
deposits increased $20.6 million for the quarter ended
December 31, 2022, compared to the quarter ended
September 30, 2022, primarily due to a $55.3 million
increase in brokered deposits and $2.0 million increase in
demand deposits, partially offset by decreases across all other
deposit categories, particularly money market balances. Management
continually considers alternatives to increase deposits to fund
anticipated asset growth in addition to 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):
|
Dec 31,2022 |
|
Sep 30,2022 |
|
Dec 31,2021 |
|
ThreeMonthChange |
|
One Year
Change |
Deposits: |
(Dollars in thousands) |
Noninterest-bearing demand |
$ |
119,944 |
|
$ |
118,842 |
|
$ |
117,751 |
|
$ |
1,102 |
|
|
$ |
2,193 |
|
Interest-bearing demand |
|
96,632 |
|
|
95,767 |
|
|
97,907 |
|
|
865 |
|
|
|
(1,275 |
) |
Savings |
|
23,636 |
|
|
24,625 |
|
|
23,146 |
|
|
(989 |
) |
|
|
490 |
|
Money market |
|
542,388 |
|
|
572,137 |
|
|
624,543 |
|
|
(29,749 |
) |
|
|
(82,155 |
) |
Certificates of deposit, retail |
|
262,554 |
|
|
268,528 |
|
|
294,127 |
|
|
(5,974 |
) |
|
|
(31,573 |
) |
Brokered deposits |
|
124,886 |
|
|
69,537 |
|
|
- |
|
|
55,349 |
|
|
|
124,886 |
|
Total deposits |
$ |
1,170,040 |
|
$ |
1,149,436 |
|
$ |
1,157,474 |
|
$ |
20,604 |
|
|
$ |
12,566 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present an analysis of
total deposits by branch office (unaudited):
December 31, 2022 |
|
Noninterest-bearingdemand |
Interest-bearingdemand |
Savings |
Moneymarket |
Certificatesof deposit,retail |
Brokereddeposits |
Total |
|
(Dollars in thousands) |
King County |
|
|
|
|
|
|
|
Renton |
$ |
35,123 |
$ |
45,575 |
$ |
15,515 |
$ |
279,392 |
$ |
203,463 |
$ |
- |
$ |
579,068 |
Landing |
|
3,781 |
|
1,720 |
|
143 |
|
18,153 |
|
3,771 |
|
- |
|
27,568 |
Woodinville |
|
2,925 |
|
3,315 |
|
1,181 |
|
15,648 |
|
10,428 |
|
- |
|
33,497 |
Bothell |
|
3,363 |
|
1,041 |
|
49 |
|
6,485 |
|
942 |
|
- |
|
11,880 |
Crossroads |
|
14,455 |
|
3,082 |
|
226 |
|
30,969 |
|
11,667 |
|
- |
|
60,399 |
Kent |
|
8,162 |
|
11,660 |
|
2 |
|
19,549 |
|
1,023 |
|
- |
|
40,396 |
Kirkland |
|
10,618 |
|
506 |
|
62 |
|
8,310 |
|
25 |
|
- |
|
19,521 |
Issaquah |
|
3,342 |
|
1,171 |
|
134 |
|
2,474 |
|
3,408 |
|
- |
|
10,529 |
Total King County |
|
81,769 |
|
68,070 |
|
17,312 |
|
380,980 |
|
234,727 |
|
- |
|
782,858 |
Snohomish County |
|
|
|
|
|
|
|
Mill Creek |
|
6,594 |
|
4,005 |
|
911 |
|
15,445 |
|
5,443 |
|
- |
|
32,398 |
Edmonds |
|
16,619 |
|
6,191 |
|
766 |
|
33,904 |
|
7,768 |
|
- |
|
65,248 |
Clearview |
|
5,456 |
|
6,317 |
|
1,653 |
|
23,322 |
|
2,906 |
|
- |
|
39,654 |
Lake Stevens |
|
3,936 |
|
5,213 |
|
1,390 |
|
36,842 |
|
4,674 |
|
- |
|
52,055 |
Smokey Point |
|
2,617 |
|
6,330 |
|
1,391 |
|
46,486 |
|
6,012 |
|
- |
|
62,836 |
Total Snohomish County |
|
35,222 |
|
28,056 |
|
6,111 |
|
155,999 |
|
26,803 |
|
- |
|
252,191 |
Pierce County |
|
|
|
|
|
|
|
University Place |
|
2,192 |
|
96 |
|
1 |
|
3,953 |
|
672 |
|
- |
|
6,914 |
Gig Harbor |
|
761 |
|
410 |
|
212 |
|
1,456 |
|
352 |
|
- |
|
3,191 |
Total Pierce County |
|
2,953 |
|
506 |
|
213 |
|
5,409 |
|
1,024 |
|
- |
|
10,105 |
|
|
|
|
|
|
|
|
Brokered deposits |
|
- |
|
- |
|
- |
|
- |
|
- |
|
124,886 |
|
124,886 |
|
|
|
|
|
|
|
|
Total deposits |
$ |
119,944 |
$ |
96,632 |
$ |
23,636 |
$ |
542,388 |
$ |
262,554 |
$ |
124,886 |
$ |
1,170,040 |
September 30, 2022 |
|
Noninterest-bearingdemand |
Interest-bearingdemand |
Savings |
Moneymarket |
Certificatesof deposit,retail |
Brokereddeposits |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loans receivable totaled $1.17 billion
at December 31, 2022, compared to $1.14 billion at
September 30, 2022, and $1.10 billion at
December 31, 2021. During the quarter ended December 31,
2022, new originations of one-to-four family residential loans,
construction/land and classic, collectible and other auto loans
outpaced total loan repayments in the quarter. The average balance
of net loans receivable totaled $1.15 billion for the quarter
ended December 31, 2022, compared to $1.13 billion for
the quarter ended September 30, 2022, and $1.11 billion
for the quarter ended December 31, 2021. For the year ended
December 31, 2022, the average balance of net loans receivable was
$1.13 billion, compared to $1.10 billion for the year ended
December 31, 2021.
The ALLL represented 1.29% of total loans
receivable at December 31, 2022, compared to 1.27% at
September 30, 2022, and 1.40% of total loans receivable at
December 31, 2021.
There were $193,000 in nonperforming loans at
December 31, 2022, compared to $232,000 at September 30,
2022, and none at December 31, 2021. There was no other real
estate owned (“OREO”) at December 31, 2022, September 30,
2022, or December 31, 2021.
The following table presents a breakdown of our
nonperforming assets (unaudited):
|
Dec 31, |
|
Sep 30, |
|
Dec 31, |
|
Three Month |
|
One Year |
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Change |
|
Change |
|
(Dollars in thousands) |
Nonperforming loans: |
|
|
|
|
|
|
|
|
|
One-to-four family residential |
$ |
─ |
|
|
$ |
39 |
|
|
$ |
─ |
|
|
$ |
(39 |
) |
|
$ |
─ |
Consumer |
|
193 |
|
|
|
193 |
|
|
|
─ |
|
|
|
─ |
|
|
|
193 |
Total nonperforming loans |
|
193 |
|
|
|
232 |
|
|
|
─ |
|
|
|
(39 |
) |
|
|
193 |
|
|
|
|
|
|
|
|
|
|
OREO |
|
─ |
|
|
|
─ |
|
|
|
─ |
|
|
|
─ |
|
|
|
─ |
|
|
|
|
|
|
|
|
|
|
Total nonperforming assets
(1) |
$ |
193 |
|
|
$ |
232 |
|
|
$ |
─ |
|
|
$ |
(39 |
) |
|
$ |
193 |
|
|
|
|
|
|
|
|
|
|
Nonperforming assets as a
percent |
|
|
|
|
|
|
|
|
|
of total assets |
|
0.01 |
% |
|
|
0.02 |
% |
|
|
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 Company’s
TDRs were performing in accordance with their restructured terms
for the periods presented.
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 $1.4 million at
December 31, 2022, compared to $1.8 million at
September 30, 2022, and $2.1 million at December 31,
2021. All TDRs were performing according to their modified
repayment terms for the periods presented.
Net interest income totaled $12.5 million
for the quarter ended December 31, 2022, compared to
$12.7 million for the quarter ended September 30, 2022,
and $11.6 million for the quarter ended December 31,
2021. The decrease in the current quarter compared to the quarter
ended September 30, 2022, was primarily due to higher interest
expense on deposits and other borrowings, primarily reflecting the
continued increase in market interest rates due to the ongoing
increases to the targeted federal funds rate, which increased
125 basis points during the fourth calendar quarter of 2022,
and increased competition for deposits, partially offset by higher
interest income on loans, including fees, and investments. For the
year ended December 31, 2022, net interest income totaled
$48.4 million, compared to $45.0 million for the year
ended December 31, 2021, as the increase in interest income on
loans and investments outpaced the increase in interest expense on
liabilities.
Total interest income was $17.4 million for
the quarter ended December 31, 2022, compared to
$15.4 million for the quarter ended September 30, 2022,
and $13.3 million for the quarter ended December 31,
2021. The increase in the current quarter compared to the prior
quarters was primarily due to an improvement in the average loan
yield to 5.19% from 4.77% and 4.44% for the quarters ended
September 30, 2022, and December 31, 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 $4.9 million for
the quarter ended December 31, 2022, compared to
$2.7 million for the quarter ended September 30, 2022,
and $1.7 million for the quarter ended December 31, 2021.
The average cost of interest-bearing deposits was 1.51% for the
quarter ended December 31, 2022, compared to 0.87% for the
quarter ended September 30, 2022, and 0.53% for the quarter
ended December 31, 2021. The increase from the quarter ended
September 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. Advances from the FHLB decreased to $145.0 million at
December 31, 2022, compared to $150.0 million at
September 30, 2022, and increased from $95.0 million at
December 31, 2021. 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 47
months and a weighted average fixed interest rate of 1.05%. The
average cost of borrowings was 2.46% for the quarter ended
December 31, 2022, compared to 1.48% for the quarter ended
September 30, 2022, and 1.33% for the quarter ended
December 31, 2021.
The net interest margin was 3.52% for the
quarter ended December 31, 2022, compared to 3.65% for the
quarter ended September 30, 2022, and 3.40% for the quarter
ended December 31, 2021. The decrease in the net interest
margin for the quarter ended December 31, 2022, compared to
the quarter ended September 30, 2022, was due primarily to the
cost of interest-bearing liabilities increasing more than the
yields on interest-earnings assets, with a 70-basis point increase
in the Company’s average cost of interest-bearing liabilities to
1.63% from 0.93%, partially offset by a 48-basis point increase in
the average yield on interest-earning assets to 4.91% from
4.43%.
Noninterest income for the quarter ended
December 31, 2022, totaled $695,000, compared to $778,000 for
the quarter ended September 31, 2022, and $1.1 million
for the quarter ended December 31, 2021. The decrease in
noninterest income for the quarter ended December 31, 2022,
compared to the quarter ended September 30, 2022, was
primarily due to lower wealth management revenue, and lower loan
related fees. The decrease in the current quarter as compared to
the quarter ended December 31, 2021, primarily reflects reduced
loan fees, in addition to a reduction in wealth management revenue.
For the year ended December 31, 2022, noninterest income
declined $639,000 to $3.2 million, from $3.9 million for
the year ended December 31, 2021, due primarily to lower loan
related fees as loan prepayment penalties declined by $425,000,
along with a decline of $182,000 in wealth management revenue in
the year ended December 31, 2022, compared to the prior year.
Noninterest expense totaled $8.7 million
for the quarter ended December 31, 2022, compared to
$9.0 million for the quarter ended September 30, 2022,
and $8.7 million for the quarter ended December 31, 2021.
The decrease in noninterest expense for the quarter ended
December 31, 2022, compared to the quarter ended
September 30, 2022, was primarily due to a $440,000 decline in
salaries and employee benefits due in part to the maturity of the
Bank’s Employee Stock Ownership Plan (“ESOP”) in the quarter ended
September 30, 2022, resulting in no associated compensation
expense for the quarter ended December 31, 2022, compared to
$430,000 in the quarter ended September 30, 2022. Effective
January 1, 2023, this ESOP benefit was replaced by a new
profit-sharing contribution and other enhancements to the Bank’s
401(k) plan for all eligible employees. The Company expects that
the associated expenses will generally be in line with the previous
ESOP related expenses. The decrease in noninterest expense for the
quarter ended December 31, 2022, compared to the quarter ended
December 31, 2021, primarily reflects the absence of expenses
related to the matured ESOP, partially offset by higher other
general and administrative expenses and professional fees. The
increase year over year was due primarily to higher expenses across
all categories except net OREO related expenses, regulatory
assessments and data processing fees, which were lower.
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 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 |
Dec 31, 2022 |
|
Sep 30,2022 |
|
Dec 31,2021 |
|
ThreeMonthChange |
|
OneYearChange |
|
|
|
|
|
|
|
|
|
|
Cash on hand and in banks |
$ |
7,722 |
|
|
$ |
9,684 |
|
|
$ |
7,246 |
|
|
(20.3 |
)% |
|
6.6 |
% |
Interest-earning deposits with
banks |
|
16,598 |
|
|
|
15,227 |
|
|
|
66,145 |
|
|
9.0 |
|
|
(74.9 |
) |
Investments
available-for-sale, at fair value |
|
217,977 |
|
|
|
221,278 |
|
|
|
168,948 |
|
|
(1.5 |
) |
|
29.0 |
|
Investments held-to-maturity,
at amortized cost |
|
2,444 |
|
|
|
2,438 |
|
|
|
2,432 |
|
|
0.2 |
|
|
0.5 |
|
Loans receivable, net of
allowance of $15,227, $14,726, and $15,657 respectively |
|
1,167,083 |
|
|
|
1,143,348 |
|
|
|
1,103,461 |
|
|
2.1 |
|
|
5.8 |
|
Federal Home Loan Bank
(“FHLB”) stock, at cost |
|
7,512 |
|
|
|
7,712 |
|
|
|
5,465 |
|
|
(2.6 |
) |
|
37.5 |
|
Accrued interest
receivable |
|
6,513 |
|
|
|
6,261 |
|
|
|
5,285 |
|
|
4.0 |
|
|
23.2 |
|
Deferred tax assets, net |
|
2,597 |
|
|
|
2,355 |
|
|
|
850 |
|
|
10.3 |
|
|
205.5 |
|
Premises and equipment,
net |
|
21,192 |
|
|
|
21,608 |
|
|
|
22,440 |
|
|
(1.9 |
) |
|
(5.6 |
) |
Bank owned life insurance
(“BOLI”), net |
|
36,286 |
|
|
|
36,064 |
|
|
|
35,210 |
|
|
0.6 |
|
|
3.1 |
|
Prepaid expenses and other
assets |
|
12,280 |
|
|
|
13,605 |
|
|
|
3,628 |
|
|
(9.7 |
) |
|
238.5 |
|
Right of use asset (“ROU”),
net |
|
3,275 |
|
|
|
3,260 |
|
|
|
3,646 |
|
|
0.5 |
|
|
(10.2 |
) |
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
0.0 |
|
|
0.0 |
|
Core deposit intangible,
net |
|
548 |
|
|
|
582 |
|
|
|
684 |
|
|
(5.8 |
) |
|
(19.9 |
) |
Total assets |
$ |
1,502,916 |
|
|
$ |
1,484,311 |
|
|
$ |
1,426,329 |
|
|
1.3 |
% |
|
5.4 |
% |
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
119,944 |
|
|
$ |
118,842 |
|
|
$ |
117,751 |
|
|
0.9 |
% |
|
1.9 |
% |
Interest-bearing deposits |
|
1,050,096 |
|
|
|
1,030,594 |
|
|
|
1,039,723 |
|
|
1.9 |
|
|
1.0 |
|
Total deposits |
|
1,170,040 |
|
|
|
1,149,436 |
|
|
|
1,157,474 |
|
|
1.8 |
|
|
1.1 |
|
Advances from the FHLB |
|
145,000 |
|
|
|
150,000 |
|
|
|
95,000 |
|
|
(3.3 |
) |
|
52.6 |
|
Advance payments from
borrowers for taxes and insurance |
|
3,051 |
|
|
|
5,033 |
|
|
|
2,909 |
|
|
(39.4 |
) |
|
4.9 |
|
Lease liability, net |
|
3,454 |
|
|
|
3,441 |
|
|
|
3,805 |
|
|
0.4 |
|
|
(9.2 |
) |
Accrued interest payable |
|
328 |
|
|
|
185 |
|
|
|
112 |
|
|
77.3 |
|
|
192.9 |
|
Other liabilities |
|
20,683 |
|
|
|
18,326 |
|
|
|
9,150 |
|
|
12.9 |
|
|
126.0 |
|
Total liabilities |
|
1,342,556 |
|
|
|
1,326,421 |
|
|
|
1,268,450 |
|
|
1.2 |
|
|
5.8 |
|
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 December 31 2022, 9,127,595
shares at September 30 2022, and 9,125,759 shares at December 31,
2021 |
|
91 |
|
|
|
91 |
|
|
|
91 |
|
|
0.0 |
|
|
0.0 |
|
Additional paid-in capital |
|
72,424 |
|
|
|
72,295 |
|
|
|
72,298 |
|
|
0.2 |
|
|
0.2 |
|
Retained earnings |
|
95,059 |
|
|
|
92,928 |
|
|
|
86,162 |
|
|
2.3 |
|
|
10.3 |
|
Accumulated other comprehensive (loss) income, net of tax |
|
(7,214 |
) |
|
|
(7,424 |
) |
|
|
174 |
|
|
(2.8 |
) |
|
(4,246.0 |
) |
Unearned Employee Stock Ownership Plan (“ESOP”) shares |
|
- |
|
|
|
- |
|
|
|
(846 |
) |
|
n/a |
|
|
(100.0 |
) |
Total stockholders’
equity |
|
160,360 |
|
|
|
157,890 |
|
|
|
157,879 |
|
|
1.6 |
|
|
1.6 |
|
Total liabilities and
stockholders’ equity |
$ |
1,502,916 |
|
|
$ |
1,484,311 |
|
|
$ |
1,426,329 |
|
|
1.3 |
% |
|
5.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESConsolidated Income Statements(Dollars in
thousands, except share data)(Unaudited)
|
Quarter Ended |
|
|
|
|
|
Dec 31,2022 |
|
Sep 30,2022 |
|
Dec 31,2021 |
|
ThreeMonthChange |
|
OneYearChange |
Interest income |
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
15,042 |
|
$ |
13,618 |
|
|
$ |
12,398 |
|
10.5 |
% |
|
21.3 |
% |
Investments |
|
2,032 |
|
|
1,609 |
|
|
|
804 |
|
26.3 |
|
|
152.7 |
|
Interest-earning deposits with banks |
|
205 |
|
|
125 |
|
|
|
19 |
|
64.0 |
|
|
978.9 |
|
Dividends on FHLB Stock |
|
89 |
|
|
83 |
|
|
|
85 |
|
7.2 |
|
|
4.7 |
|
Total interest income |
|
17,368 |
|
|
15,435 |
|
|
|
13,306 |
|
12.5 |
|
|
30.5 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
Deposits |
|
3,972 |
|
|
2,326 |
|
|
|
1,390 |
|
70.8 |
|
|
185.8 |
|
FHLB advances and other borrowings |
|
928 |
|
|
392 |
|
|
|
340 |
|
136.7 |
|
|
172.9 |
|
Total interest expense |
|
4,900 |
|
|
2,718 |
|
|
|
1,730 |
|
80.3 |
|
|
183.2 |
|
Net interest income |
|
12,468 |
|
|
12,717 |
|
|
|
11,576 |
|
(2.0 |
) |
|
7.7 |
|
Provision (recapture of
provision) for loan losses |
|
500 |
|
|
(400 |
) |
|
|
600 |
|
(225.0 |
) |
|
(16.7 |
) |
Net interest income after
provision (recapture of provision) for loan losses |
|
11,968 |
|
|
13,117 |
|
|
|
10,976 |
|
(8.8 |
) |
|
9.0 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
|
|
|
|
Net gain on sale of investments |
|
27 |
|
|
- |
|
|
|
32 |
|
n/a |
|
|
(15.6 |
) |
BOLI income |
|
222 |
|
|
243 |
|
|
|
216 |
|
(8.6 |
) |
|
2.8 |
|
Wealth management revenue |
|
36 |
|
|
89 |
|
|
|
104 |
|
(59.6 |
) |
|
(65.4 |
) |
Deposit related fees |
|
231 |
|
|
245 |
|
|
|
218 |
|
(5.7 |
) |
|
6.0 |
|
Loan related fees |
|
172 |
|
|
195 |
|
|
|
551 |
|
(11.8 |
) |
|
(68.8 |
) |
Other |
|
7 |
|
|
6 |
|
|
|
5 |
|
16.7 |
|
|
40.0 |
|
Total noninterest income |
|
695 |
|
|
778 |
|
|
|
1,126 |
|
(10.7 |
) |
|
(38.3 |
) |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
4,977 |
|
|
5,417 |
|
|
|
5,374 |
|
(8.1 |
) |
|
(7.4 |
) |
Occupancy and equipment |
|
1,155 |
|
|
1,188 |
|
|
|
1,154 |
|
(2.8 |
) |
|
0.1 |
|
Professional fees |
|
607 |
|
|
549 |
|
|
|
477 |
|
10.6 |
|
|
27.3 |
|
Data processing |
|
634 |
|
|
675 |
|
|
|
689 |
|
(6.1 |
) |
|
(8.0 |
) |
Regulatory assessments |
|
108 |
|
|
105 |
|
|
|
100 |
|
2.9 |
|
|
8.0 |
|
Insurance and bond premiums |
|
111 |
|
|
112 |
|
|
|
110 |
|
(0.9 |
) |
|
0.9 |
|
Marketing |
|
77 |
|
|
92 |
|
|
|
37 |
|
(16.3 |
) |
|
108.1 |
|
Other general and administrative |
|
997 |
|
|
876 |
|
|
|
775 |
|
13.8 |
|
|
28.6 |
|
Total noninterest expense |
|
8,666 |
|
|
9,014 |
|
|
|
8,716 |
|
(3.9 |
) |
|
(0.6 |
) |
Income before federal income
tax provision |
|
3,997 |
|
|
4,881 |
|
|
|
3,386 |
|
(18.1 |
) |
|
18.0 |
|
Federal income tax
provision |
|
771 |
|
|
935 |
|
|
|
643 |
|
(17.5 |
) |
|
19.9 |
|
Net income |
$ |
3,226 |
|
$ |
3,946 |
|
|
$ |
2,743 |
|
(18.2 |
)% |
|
17.6 |
% |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.35 |
|
$ |
0.44 |
|
|
$ |
0.30 |
|
|
|
|
Diluted earnings per
share |
$ |
0.35 |
|
$ |
0.43 |
|
|
$ |
0.29 |
|
|
|
|
Weighted average number of
common shares outstanding |
|
9,073,323 |
|
|
8,981,037 |
|
|
|
9,129,724 |
|
|
|
|
Weighted average number of
diluted shares outstanding |
|
9,149,044 |
|
|
9,068,541 |
|
|
|
9,273,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESConsolidated Income Statements(Dollars in
thousands, except share data)(Unaudited)
|
Year Ended December 31, |
|
|
|
|
2022 |
|
|
2021 |
|
OneYearChange |
Interest income |
|
|
|
|
|
Loans, including fees |
$ |
52,935 |
|
|
$ |
50,170 |
|
5.5 |
% |
Investments |
|
5,627 |
|
|
|
3,224 |
|
74.5 |
|
Interest-earning deposits with banks |
|
386 |
|
|
|
72 |
|
436.1 |
|
Dividends on FHLB Stock |
|
318 |
|
|
|
332 |
|
(4.2 |
) |
Total interest income |
|
59,266 |
|
|
|
53,798 |
|
10.2 |
|
Interest expense |
|
|
|
|
|
Deposits |
|
8,955 |
|
|
|
7,216 |
|
24.1 |
|
FHLB advances and other borrowings |
|
1,934 |
|
|
|
1,603 |
|
20.6 |
|
Total interest expense |
|
10,889 |
|
|
|
8,819 |
|
23.5 |
|
Net interest income |
|
48,377 |
|
|
|
44,979 |
|
7.6 |
|
(Recapture of provision)
provision for loan losses |
|
(400 |
) |
|
|
300 |
|
(233.3 |
) |
Net interest income after
(recapture of provision) provision for loan losses |
|
48,777 |
|
|
|
44,679 |
|
9.2 |
|
|
|
|
|
|
|
Noninterest income |
|
|
|
|
|
Net gain on sale of investments |
|
27 |
|
|
|
32 |
|
(15.6 |
) |
BOLI income |
|
1,004 |
|
|
|
1,107 |
|
(9.3 |
) |
Wealth management revenue |
|
312 |
|
|
|
494 |
|
(36.8 |
) |
Deposit related fees |
|
936 |
|
|
|
872 |
|
7.3 |
|
Loan related fees |
|
919 |
|
|
|
1,265 |
|
(27.4 |
) |
Other |
|
25 |
|
|
|
92 |
|
(72.8 |
) |
Total noninterest income |
|
3,223 |
|
|
|
3,862 |
|
(16.5 |
) |
|
|
|
|
|
|
Noninterest expense |
|
|
|
|
|
Salaries and employee benefits |
|
21,133 |
|
|
|
20,237 |
|
4.4 |
|
Occupancy and equipment |
|
4,776 |
|
|
|
4,557 |
|
4.8 |
|
Professional fees |
|
2,339 |
|
|
|
1,899 |
|
23.2 |
|
Data processing |
|
2,678 |
|
|
|
2,692 |
|
(0.5 |
) |
Regulatory assessments |
|
403 |
|
|
|
456 |
|
(11.6 |
) |
Insurance and bond premiums |
|
464 |
|
|
|
451 |
|
2.9 |
|
Marketing |
|
303 |
|
|
|
154 |
|
96.8 |
|
Other general and administrative |
|
3,495 |
|
|
|
2,921 |
|
19.7 |
|
Total noninterest expense |
|
35,591 |
|
|
|
33,367 |
|
6.7 |
|
Income before federal income
tax provision |
|
16,409 |
|
|
|
15,174 |
|
8.1 |
|
Federal income tax
provision |
|
3,169 |
|
|
|
2,925 |
|
8.3 |
|
Net income |
$ |
13,240 |
|
|
$ |
12,249 |
|
8.1 |
% |
|
|
|
|
|
|
Basic earnings per share |
$ |
1.47 |
|
|
$ |
1.31 |
|
|
Diluted earnings per
share |
$ |
1.45 |
|
|
$ |
1.29 |
|
|
Weighted average number of
common shares outstanding |
|
9,006,369 |
|
|
|
9,340,997 |
|
|
Weighted average number of
diluted shares outstanding |
|
9,102,283 |
|
|
|
9,454,495 |
|
|
|
|
|
|
|
|
|
|
|
The following table presents a breakdown of the loan portfolio
(unaudited):
|
December 31, 2022 |
September 30, 2022 |
December 31, 2021 |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
Amount |
|
Percent |
|
(Dollars in thousands) |
Commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
Residential: |
|
|
|
|
|
|
|
|
|
|
|
Other multifamily |
$ |
126,895 |
|
|
10.7 |
% |
|
$ |
132,755 |
|
|
11.4 |
% |
|
$ |
130,146 |
|
|
11.6 |
% |
Total multifamily residential |
|
126,895 |
|
|
10.7 |
|
|
|
132,755 |
|
|
11.4 |
|
|
|
130,146 |
|
|
11.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-residential: |
|
|
|
|
|
|
|
|
|
|
|
Office |
|
84,315 |
|
|
7.1 |
|
|
|
84,768 |
|
|
7.3 |
|
|
|
90,727 |
|
|
8.1 |
|
Retail |
|
132,595 |
|
|
11.2 |
|
|
|
137,417 |
|
|
11.9 |
|
|
|
138,463 |
|
|
12.4 |
|
Mobile home park |
|
25,420 |
|
|
2.2 |
|
|
|
23,531 |
|
|
2.0 |
|
|
|
20,636 |
|
|
1.8 |
|
Hotel / motel |
|
55,471 |
|
|
4.7 |
|
|
|
56,715 |
|
|
4.9 |
|
|
|
64,854 |
|
|
5.8 |
|
Nursing home |
|
12,365 |
|
|
1.0 |
|
|
|
12,452 |
|
|
1.2 |
|
|
|
12,713 |
|
|
1.1 |
|
Warehouse |
|
19,783 |
|
|
1.7 |
|
|
|
19,934 |
|
|
1.7 |
|
|
|
17,724 |
|
|
1.6 |
|
Storage |
|
33,876 |
|
|
2.9 |
|
|
|
34,069 |
|
|
2.9 |
|
|
|
32,990 |
|
|
2.9 |
|
Other non-residential |
|
44,057 |
|
|
3.6 |
|
|
|
44,600 |
|
|
3.9 |
|
|
|
41,310 |
|
|
3.8 |
|
Total non-residential |
|
407,882 |
|
|
34.4 |
|
|
|
413,486 |
|
|
35.8 |
|
|
|
419,417 |
|
|
37.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction/land: |
|
|
|
|
|
|
|
|
|
|
|
One-to-four family residential |
|
52,836 |
|
|
4.5 |
|
|
|
41,606 |
|
|
3.6 |
|
|
|
34,677 |
|
|
3.1 |
|
Multifamily |
|
15,501 |
|
|
1.3 |
|
|
|
15,500 |
|
|
1.3 |
|
|
|
37,194 |
|
|
3.3 |
|
Commercial |
|
- |
|
|
0.0 |
|
|
|
- |
|
|
0.0 |
|
|
|
6,189 |
|
|
0.6 |
|
Land development |
|
9,783 |
|
|
0.8 |
|
|
|
15,518 |
|
|
1.3 |
|
|
|
15,395 |
|
|
1.4 |
|
Total construction/land |
|
78,120 |
|
|
6.6 |
|
|
|
72,624 |
|
|
6.2 |
|
|
|
93,455 |
|
|
8.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to-four family
residential: |
|
|
|
|
|
|
|
|
|
|
|
Permanent owner occupied |
|
233,785 |
|
|
19.8 |
|
|
|
221,212 |
|
|
19.1 |
|
|
|
185,320 |
|
|
16.6 |
|
Permanent non-owner occupied |
|
242,051 |
|
|
20.5 |
|
|
|
228,223 |
|
|
19.7 |
|
|
|
199,796 |
|
|
17.8 |
|
Total one-to-four family residential |
|
475,836 |
|
|
40.3 |
|
|
|
449,435 |
|
|
38.8 |
|
|
|
385,116 |
|
|
34.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Business: |
|
|
|
|
|
|
|
|
|
|
|
Aircraft |
|
2,086 |
|
|
0.1 |
|
|
|
2,335 |
|
|
0.2 |
|
|
|
6,079 |
|
|
0.5 |
|
Small Business Administration (“SBA”) |
|
509 |
|
|
0.1 |
|
|
|
520 |
|
|
0.1 |
|
|
|
839 |
|
|
0.1 |
|
Paycheck Protection Plan (“PPP”) |
|
785 |
|
|
0.1 |
|
|
|
1,209 |
|
|
0.1 |
|
|
|
10,849 |
|
|
1.0 |
|
Other business |
|
27,991 |
|
|
2.4 |
|
|
|
27,990 |
|
|
2.4 |
|
|
|
28,823 |
|
|
2.5 |
|
Total business |
|
31,371 |
|
|
2.7 |
|
|
|
32,054 |
|
|
2.8 |
|
|
|
46,590 |
|
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer: |
|
|
|
|
|
|
|
|
|
|
|
Classic, collectible and other auto |
|
53,705 |
|
|
4.6 |
|
|
|
47,141 |
|
|
4.1 |
|
|
|
35,861 |
|
|
3.2 |
|
Other consumer |
|
8,350 |
|
|
0.7 |
|
|
|
10,478 |
|
|
0.9 |
|
|
|
8,951 |
|
|
0.8 |
|
Total consumer |
|
62,055 |
|
|
5.3 |
|
|
|
57,619 |
|
|
5.0 |
|
|
|
44,812 |
|
|
4.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans |
|
1,182,159 |
|
|
100.0 |
% |
|
|
1,157,973 |
|
|
100.0 |
% |
|
|
1,119,536 |
|
|
100.0 |
% |
Less: |
|
|
|
|
|
|
|
|
|
|
|
Deferred loan (costs) fees, net |
|
(151 |
) |
|
|
|
|
(101 |
) |
|
|
|
|
418 |
|
|
|
ALLL |
|
15,227 |
|
|
|
|
|
14,726 |
|
|
|
|
|
15,657 |
|
|
|
Loans receivable, net |
$ |
1,167,083 |
|
|
|
|
$ |
1,143,348 |
|
|
|
|
$ |
1,103,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentrations of credit:
(1) |
|
|
|
|
|
|
|
|
|
|
|
Construction loans as % of total capital |
|
53.1 |
% |
|
|
|
|
49.1 |
% |
|
|
|
|
59.7 |
% |
|
|
Total non-owner occupied commercial real estate as % of total
capital |
|
346.9 |
% |
|
|
|
|
354.6 |
% |
|
|
|
|
384.0 |
% |
|
|
(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 Ended |
|
|
|
Dec 31, |
|
Sep 30, |
|
Jun 30, |
|
Mar 31, |
|
Dec 31, |
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share data) |
Performance
Ratios: (1) |
|
|
|
|
|
|
|
|
|
Return on assets |
|
0.86 |
% |
|
|
1.06 |
% |
|
|
0.79 |
% |
|
|
0.93 |
% |
|
|
0.76 |
% |
Return on equity |
|
8.04 |
|
|
|
9.88 |
|
|
|
7.11 |
|
|
|
8.33 |
|
|
|
6.79 |
|
Dividend payout ratio |
|
34.29 |
|
|
|
27.40 |
|
|
|
38.51 |
|
|
|
33.20 |
|
|
|
36.67 |
|
Equity-to-assets ratio |
|
10.67 |
|
|
|
10.64 |
|
|
|
10.78 |
|
|
|
11.15 |
|
|
|
11.07 |
|
Tangible equity ratio (2) |
|
10.58 |
|
|
|
10.55 |
|
|
|
10.69 |
|
|
|
11.05 |
|
|
|
10.97 |
|
Net interest margin |
|
3.52 |
|
|
|
3.65 |
|
|
|
3.53 |
|
|
|
3.43 |
|
|
|
3.40 |
|
Average interest-earning
assets to average interest-bearing liabilities |
|
117.93 |
|
|
|
119.08 |
|
|
|
120.21 |
|
|
|
119.59 |
|
|
|
119.08 |
|
Efficiency ratio |
|
65.84 |
|
|
|
66.80 |
|
|
|
72.62 |
|
|
|
70.96 |
|
|
|
68.62 |
|
Noninterest expense as a
percent of average total assets |
|
2.30 |
|
|
|
2.43 |
|
|
|
2.60 |
|
|
|
2.46 |
|
|
|
2.42 |
|
Book value per common
share |
$ |
17.57 |
|
|
$ |
17.30 |
|
|
$ |
17.26 |
|
|
$ |
17.32 |
|
|
$ |
17.30 |
|
Tangible book value per share
(2) |
|
17.41 |
|
|
|
17.14 |
|
|
|
17.09 |
|
|
|
17.15 |
|
|
|
17.13 |
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios:
(3) |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
10.31 |
% |
|
|
10.43 |
% |
|
|
10.53 |
% |
|
|
10.51 |
% |
|
|
10.34 |
% |
Common equity tier 1 capital
ratio |
|
14.37 |
|
|
|
14.24 |
|
|
|
14.22 |
|
|
|
14.08 |
|
|
|
14.23 |
|
Tier 1 capital ratio |
|
14.37 |
|
|
|
14.24 |
|
|
|
14.22 |
|
|
|
14.08 |
|
|
|
14.23 |
|
Total capital ratio |
|
15.62 |
|
|
|
15.49 |
|
|
|
15.47 |
|
|
|
15.33 |
|
|
|
15.48 |
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
(4) |
|
|
|
|
|
|
|
|
|
Nonperforming loans as a
percent of total loans |
|
0.02 |
% |
|
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.02 |
% |
|
|
0.00 |
% |
Nonperforming assets as a
percent of total assets |
|
0.01 |
|
|
|
0.02 |
|
|
|
0.00 |
|
|
|
0.01 |
|
|
|
0.00 |
|
ALLL as a percent of total
loans |
|
1.29 |
|
|
|
1.27 |
|
|
|
1.33 |
|
|
|
1.33 |
|
|
|
1.40 |
|
Net (recoveries) charge-offs
to average loans receivable, net |
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses: |
|
|
|
|
|
|
|
|
|
ALLL, beginning of the
quarter |
$ |
14,726 |
|
|
$ |
15,125 |
|
|
$ |
15,159 |
|
|
$ |
15,657 |
|
|
$ |
15,057 |
|
Provision (recapture of provision) |
|
500 |
|
|
|
(400 |
) |
|
|
- |
|
|
|
(500 |
) |
|
|
600 |
|
Charge-offs |
|
- |
|
|
|
- |
|
|
|
(37 |
) |
|
|
- |
|
|
|
- |
|
Recoveries |
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
2 |
|
|
|
- |
|
ALLL, end of the quarter |
$ |
15,227 |
|
|
$ |
14,726 |
|
|
$ |
15,125 |
|
|
$ |
15,159 |
|
|
$ |
15,657 |
|
(1) Performance ratios are calculated on an
annualized basis.(2) Tangible equity and tangible assets exclude
goodwill and core deposit intangible assets. Tangible equity,
tangible assets, 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(Unaudited)
|
For the Quarter Ended |
|
Dec 31,2022 |
|
Sep 30, 2022 |
|
Jun 30,2022 |
|
Mar 31,2022 |
|
Dec 31,2021 |
|
|
|
(Dollars in thousands) |
|
|
Average Yields and
Costs: (1) |
|
|
|
|
|
|
|
|
|
Yield on loans |
|
5.19 |
% |
|
|
4.77 |
% |
|
|
4.41 |
% |
|
|
4.36 |
% |
|
|
4.44 |
% |
Yield on investments |
|
3.64 |
|
|
|
2.90 |
|
|
|
2.33 |
|
|
|
1.96 |
|
|
|
1.79 |
|
Yield on interest-earning
deposits |
|
3.31 |
|
|
|
2.02 |
|
|
|
0.67 |
|
|
|
0.15 |
|
|
|
0.13 |
|
Yield on FHLB stock |
|
4.58 |
|
|
|
5.56 |
|
|
|
4.82 |
|
|
|
5.49 |
|
|
|
5.89 |
|
Yield on interest-earning assets |
|
4.91 |
% |
|
|
4.43 |
% |
|
|
4.04 |
% |
|
|
3.90 |
% |
|
|
3.91 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of interest-bearing
deposits |
|
1.51 |
% |
|
|
0.87 |
% |
|
|
0.55 |
% |
|
|
0.50 |
% |
|
|
0.53 |
% |
Cost of borrowings |
|
2.46 |
|
|
|
1.48 |
|
|
|
1.21 |
|
|
|
1.28 |
|
|
|
1.33 |
|
Cost of interest-bearing liabilities |
|
1.63 |
% |
|
|
0.93 |
% |
|
|
0.61 |
% |
|
|
0.56 |
% |
|
|
0.61 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of total deposits |
|
1.36 |
% |
|
|
0.78 |
% |
|
|
0.49 |
% |
|
|
0.44 |
% |
|
|
0.48 |
% |
Cost of funds |
|
1.48 |
|
|
|
0.84 |
|
|
|
0.55 |
|
|
|
0.51 |
|
|
|
0.55 |
|
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
1,150,181 |
|
|
$ |
1,132,233 |
|
|
$ |
1,117,079 |
|
|
$ |
1,115,428 |
|
|
$ |
1,108,836 |
|
Investments |
|
221,180 |
|
|
|
220,244 |
|
|
|
198,819 |
|
|
|
171,685 |
|
|
|
178,500 |
|
Interest-earning deposits |
|
24,608 |
|
|
|
24,565 |
|
|
|
22,010 |
|
|
|
49,857 |
|
|
|
56,800 |
|
FHLB stock |
|
7,710 |
|
|
|
5,923 |
|
|
|
5,905 |
|
|
|
5,467 |
|
|
|
5,726 |
|
Total interest-earning assets |
$ |
1,403,679 |
|
|
$ |
1,382,965 |
|
|
$ |
1,343,813 |
|
|
$ |
1,342,437 |
|
|
$ |
1,349,862 |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
1,040,357 |
|
|
$ |
1,056,079 |
|
|
$ |
1,013,080 |
|
|
$ |
1,027,507 |
|
|
$ |
1,032,090 |
|
Borrowings |
|
149,946 |
|
|
|
105,272 |
|
|
|
104,835 |
|
|
|
95,000 |
|
|
|
101,522 |
|
Total interest-bearing liabilities |
|
1,190,303 |
|
|
|
1,161,351 |
|
|
|
1,117,915 |
|
|
|
1,122,507 |
|
|
|
1,133,612 |
|
Noninterest-bearing
deposits |
|
121,518 |
|
|
|
125,561 |
|
|
|
131,415 |
|
|
|
122,175 |
|
|
|
119,142 |
|
Total deposits and borrowings |
$ |
1,311,821 |
|
|
$ |
1,286,912 |
|
|
$ |
1,249,330 |
|
|
$ |
1,244,682 |
|
|
$ |
1,252,754 |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
1,496,125 |
|
|
$ |
1,470,816 |
|
|
$ |
1,431,003 |
|
|
$ |
1,424,054 |
|
|
$ |
1,430,199 |
|
Average stockholders’
equity |
|
159,120 |
|
|
|
158,515 |
|
|
|
158,349 |
|
|
|
158,756 |
|
|
|
160,183 |
|
(1) Yields and costs are annualized.
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESKey Financial Measures(Unaudited)
|
At or For the Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
(Dollars in
thousands, except per share data) |
|
Performance
Ratios: |
|
|
|
|
|
|
|
|
|
Return on assets |
|
0.91 |
% |
|
|
0.86 |
% |
|
|
0.63 |
% |
|
|
0.80 |
% |
|
|
1.21 |
% |
Return on equity |
|
8.34 |
|
|
|
7.65 |
|
|
|
5.50 |
|
|
|
6.73 |
|
|
|
9.86 |
|
Dividend payout ratio |
|
32.65 |
|
|
|
33.59 |
|
|
|
45.45 |
|
|
|
33.65 |
|
|
|
21.53 |
|
Equity-to-assets ratio |
|
10.67 |
|
|
|
11.07 |
|
|
|
11.26 |
|
|
|
11.65 |
|
|
|
12.28 |
|
Tangible equity ratio (1) |
|
10.58 |
|
|
|
10.97 |
|
|
|
11.15 |
|
|
|
11.53 |
|
|
|
12.13 |
|
Net interest margin |
|
3.54 |
|
|
|
3.35 |
|
|
|
3.15 |
|
|
|
3.19 |
|
|
|
3.56 |
|
Average interest-earning
assets to average interest-bearing liabilities |
|
119.18 |
|
|
|
118.59 |
|
|
|
115.62 |
|
|
|
113.44 |
|
|
|
114.28 |
|
Efficiency ratio |
|
68.97 |
|
|
|
68.32 |
|
|
|
72.39 |
|
|
|
70.66 |
|
|
|
66.88 |
|
Noninterest expense as a
percent of average total assets |
|
2.44 |
|
|
|
2.35 |
|
|
|
2.39 |
|
|
|
2.35 |
|
|
|
2.40 |
|
Book value per common
share |
$ |
17.57 |
|
|
$ |
17.30 |
|
|
$ |
16.05 |
|
|
$ |
15.25 |
|
|
$ |
14.35 |
|
Tangible book value per share
(1) |
|
17.41 |
|
|
|
17.13 |
|
|
|
15.88 |
|
|
|
15.07 |
|
|
|
14.17 |
|
|
|
|
|
|
|
|
|
|
|
Capital
Ratios:
(2) |
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
10.31 |
% |
|
|
10.34 |
% |
|
|
10.29 |
% |
|
|
10.27 |
% |
|
|
10.37 |
% |
Common equity tier 1 capital
ratio |
|
14.37 |
|
|
|
14.23 |
|
|
|
14.32 |
|
|
|
13.13 |
|
|
|
13.43 |
|
Tier 1 capital ratio |
|
14.37 |
|
|
|
14.23 |
|
|
|
14.32 |
|
|
|
13.13 |
|
|
|
13.43 |
|
Total capital ratio |
|
15.62 |
|
|
|
15.48 |
|
|
|
15.57 |
|
|
|
14.38 |
|
|
|
14.68 |
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios:
(3) |
|
|
|
|
|
|
|
|
|
Nonperforming loans as a
percent of total loans |
|
0.02 |
% |
|
|
0.00 |
% |
|
|
0.19 |
% |
|
|
0.01 |
% |
|
|
0.07 |
% |
Nonperforming assets as a
percent of total assets |
|
0.01 |
|
|
|
0.00 |
|
|
|
0.18 |
|
|
|
0.04 |
|
|
|
0.10 |
|
ALLL as a percent of total
loans |
|
1.29 |
|
|
|
1.40 |
|
|
|
1.36 |
|
|
|
1.18 |
|
|
|
1.29 |
|
Net charge-offs (recoveries)
to average loans receivable, net |
|
0.00 |
|
|
|
(0.02 |
) |
|
|
(0.00 |
) |
|
|
(0.02 |
) |
|
|
(0.45 |
) |
|
|
|
|
|
|
|
|
|
|
Allowance for Loan
Losses: |
|
|
|
|
|
|
|
|
|
ALLL, beginning of the
year |
$ |
15,657 |
|
|
$ |
15,174 |
|
|
$ |
13,218 |
|
|
$ |
13,347 |
|
|
$ |
12,882 |
|
(Recapture of provision) provision |
|
(400 |
) |
|
|
300 |
|
|
|
1,900 |
|
|
|
(300 |
) |
|
|
(4,000 |
) |
Charge-offs |
|
(37 |
) |
|
|
- |
|
|
|
(2 |
) |
|
|
- |
|
|
|
- |
|
Recoveries |
|
7 |
|
|
|
183 |
|
|
|
58 |
|
|
|
171 |
|
|
|
4,465 |
|
ALLL, end of the year |
$ |
15,227 |
|
|
$ |
15,657 |
|
|
$ |
15,174 |
|
|
$ |
13,218 |
|
|
$ |
13,347 |
|
(1) Tangible equity and tangible assets exclude
goodwill and core deposit intangible assets. Tangible equity,
tangible, 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.(2) Capital ratios are for First
Financial Northwest Bank only.(3) Loans are reported net of
undisbursed funds.
FIRST FINANCIAL NORTHWEST, INC. AND
SUBSIDIARIESKey Financial Measures
(continued)(Unaudited)
|
For the Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
(Dollars in thousands) |
|
|
Average Yields and
Costs: |
|
|
|
|
|
|
|
|
|
Yield on loans |
|
4.69 |
% |
|
|
4.57 |
% |
|
|
4.69 |
% |
|
|
5.15 |
% |
|
|
5.13 |
% |
Yield on investments |
|
2.77 |
|
|
|
1.83 |
|
|
|
2.39 |
|
|
|
3.11 |
|
|
|
2.92 |
|
Yield on interest-earning
deposits |
|
1.28 |
|
|
|
0.12 |
|
|
|
0.21 |
|
|
|
2.15 |
|
|
|
1.74 |
|
Yield on FHLB stock |
|
5.08 |
|
|
|
5.29 |
|
|
|
4.85 |
|
|
|
5.42 |
|
|
|
5.24 |
|
Yield on interest-earning assets |
|
4.33 |
% |
|
|
4.01 |
% |
|
|
4.36 |
% |
|
|
4.88 |
% |
|
|
4.83 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of interest-bearing
deposits |
|
0.87 |
% |
|
|
0.71 |
% |
|
|
1.42 |
% |
|
|
1.90 |
% |
|
|
1.35 |
% |
Cost of borrowings |
|
1.70 |
|
|
|
1.39 |
|
|
|
1.31 |
|
|
|
2.09 |
|
|
|
1.92 |
|
Cost of interest-bearing liabilities |
|
0.95 |
% |
|
|
0.78 |
% |
|
|
1.41 |
% |
|
|
1.92 |
% |
|
|
1.46 |
% |
|
|
|
|
|
|
|
|
|
|
Cost of total deposits |
|
0.77 |
% |
|
|
0.64 |
% |
|
|
1.32 |
% |
|
|
1.81 |
% |
|
|
1.28 |
% |
Cost of funds |
|
0.86 |
|
|
|
0.71 |
|
|
|
1.32 |
|
|
|
1.84 |
|
|
|
1.39 |
|
|
|
|
|
|
|
|
|
|
|
Average
Balances: |
|
|
|
|
|
|
|
|
|
Loans |
$ |
1,128,835 |
|
|
$ |
1,098,772 |
|
|
$ |
1,120,889 |
|
|
$ |
1,061,367 |
|
|
$ |
995,810 |
|
Investments |
|
203,165 |
|
|
|
176,110 |
|
|
|
133,584 |
|
|
|
139,354 |
|
|
|
141,100 |
|
Interest-earning deposits |
|
30,176 |
|
|
|
60,482 |
|
|
|
25,108 |
|
|
|
13,634 |
|
|
|
11,628 |
|
FHLB stock |
|
6,256 |
|
|
|
6,271 |
|
|
|
6,600 |
|
|
|
6,684 |
|
|
|
8,748 |
|
Total interest-earning assets |
$ |
1,368,432 |
|
|
$ |
1,341,635 |
|
|
$ |
1,286,181 |
|
|
$ |
1,221,039 |
|
|
$ |
1,157,286 |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
$ |
1,034,351 |
|
|
$ |
1,015,852 |
|
|
$ |
987,069 |
|
|
$ |
946,484 |
|
|
$ |
828,965 |
|
Borrowings |
|
113,890 |
|
|
|
115,466 |
|
|
|
125,392 |
|
|
|
129,899 |
|
|
|
183,667 |
|
Total interest-bearing liabilities |
|
1,148,241 |
|
|
|
1,131,318 |
|
|
|
1,112,461 |
|
|
|
1,076,383 |
|
|
|
1,012,632 |
|
Noninterest-bearing
deposits |
|
125,166 |
|
|
|
112,484 |
|
|
|
75,388 |
|
|
|
48,434 |
|
|
|
49,461 |
|
Total deposits and borrowings |
$ |
1,273,407 |
|
|
$ |
1,243,802 |
|
|
$ |
1,187,849 |
|
|
$ |
1,124,817 |
|
|
$ |
1,062,093 |
|
|
|
|
|
|
|
|
|
|
|
Average assets |
$ |
1,455,739 |
|
|
$ |
1,421,476 |
|
|
$ |
1,361,604 |
|
|
$ |
1,294,164 |
|
|
$ |
1,227,396 |
|
Average stockholders’
equity |
|
158,685 |
|
|
|
160,041 |
|
|
|
155,587 |
|
|
|
154,092 |
|
|
|
151,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 goodwill and core deposit
intangible, net 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 |
|
|
Dec 31,2022 |
|
|
|
Sep 30,2022 |
|
|
|
Jun 30,2022 |
|
|
|
Mar 31,2022 |
|
|
|
Dec 31,2021 |
|
|
(Dollars in thousands, except per share data) |
Tangible equity to tangible
assets and tangible book value per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity (GAAP) |
$ |
160,360 |
|
|
$ |
157,890 |
|
|
$ |
156,896 |
|
|
$ |
157,757 |
|
|
$ |
157,879 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
Core deposit intangible, net |
|
548 |
|
|
|
582 |
|
|
|
616 |
|
|
|
650 |
|
|
|
684 |
|
Tangible equity (Non-GAAP) |
$ |
158,923 |
|
|
$ |
156,419 |
|
|
$ |
155,391 |
|
|
$ |
156,218 |
|
|
$ |
156,306 |
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
$ |
1,502,916 |
|
|
$ |
1,484,311 |
|
|
$ |
1,454,768 |
|
|
$ |
1,415,054 |
|
|
$ |
1,426,329 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
Core deposit intangible, net |
|
548 |
|
|
|
582 |
|
|
|
616 |
|
|
|
650 |
|
|
|
684 |
|
Tangible assets (Non-GAAP) |
$ |
1,501,479 |
|
|
$ |
1,482,840 |
|
|
$ |
1,453,263 |
|
|
$ |
1,413,515 |
|
|
$ |
1,424,756 |
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at period end |
|
9,127,595 |
|
|
|
9,127,595 |
|
|
|
9,091,533 |
|
|
|
9,107,977 |
|
|
|
9,125,759 |
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets ratio (GAAP) |
|
10.67 |
% |
|
|
10.64 |
% |
|
|
10.78 |
% |
|
|
11.15 |
% |
|
|
11.07 |
% |
Tangible equity ratio (Non-GAAP) |
|
10.58 |
|
|
|
10.55 |
|
|
|
10.69 |
|
|
|
11.05 |
|
|
|
10.97 |
|
Book value per common share (GAAP) |
$ |
17.57 |
|
|
$ |
17.30 |
|
|
$ |
17.26 |
|
|
$ |
17.32 |
|
|
$ |
17.30 |
|
Tangible book value per share (Non-GAAP) |
|
17.41 |
|
|
|
17.14 |
|
|
|
17.09 |
|
|
|
17.15 |
|
|
|
17.13 |
|
|
Year Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2018 |
|
|
(Dollars in thousands, except per share data) |
Tangible equity
to tangible assets and tangible book value per share: |
Total stockholders’ equity (GAAP) |
$ |
160,360 |
|
|
$ |
157,879 |
|
|
$ |
156,302 |
|
|
$ |
156,319 |
|
|
$ |
153,738 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
Core deposit intangible |
|
548 |
|
|
|
684 |
|
|
|
824 |
|
|
|
968 |
|
|
|
1,116 |
|
Tangible equity (Non-GAAP) |
$ |
158,923 |
|
|
$ |
156,306 |
|
|
$ |
154,589 |
|
|
$ |
154,462 |
|
|
$ |
151,733 |
|
|
|
|
|
|
|
|
|
|
|
Total assets (GAAP) |
|
1,502,916 |
|
|
|
1,426,329 |
|
|
|
1,387,669 |
|
|
|
1,341,885 |
|
|
|
1,252,424 |
|
Less: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
|
|
889 |
|
Core deposit intangible |
|
548 |
|
|
|
684 |
|
|
|
824 |
|
|
|
968 |
|
|
|
1,116 |
|
Tangible assets (Non-GAAP) |
$ |
1,501,479 |
|
|
$ |
1,424,756 |
|
|
$ |
1,385,956 |
|
|
$ |
1,340,028 |
|
|
$ |
1,250,419 |
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding at period end |
|
9,127,595 |
|
|
|
9,125,759 |
|
|
|
9,736,875 |
|
|
|
10,252,953 |
|
|
|
10,710,656 |
|
|
|
|
|
|
|
|
|
|
|
Equity-to-assets ratio (GAAP) |
|
10.67 |
% |
|
|
11.07 |
% |
|
|
11.26 |
% |
|
|
11.65 |
% |
|
|
12.28 |
% |
Tangible equity ratio (Non-GAAP) |
|
10.58 |
|
|
|
10.97 |
|
|
|
11.15 |
|
|
|
11.53 |
|
|
|
12.13 |
|
Book value per common share (GAAP) |
$ |
17.57 |
|
|
$ |
17.30 |
|
|
$ |
16.05 |
|
|
$ |
15.25 |
|
|
$ |
14.35 |
|
Tangible book value per share (Non-GAAP) |
|
17.41 |
|
|
|
17.13 |
|
|
|
15.88 |
|
|
|
15.07 |
|
|
|
14.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For more information, contact:Joseph W. Kiley III, President and
Chief Executive OfficerRich Jacobson, Executive Vice President and
Chief Financial Officer(425) 255-4400
First Financial Northwest (NASDAQ:FFNW)
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