FFNW First Financial Northwest Inc

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, 2024, of $1.2 million, or $0.13 per diluted share, compared to a net loss of $608,000, or $(0.07) per diluted share, for the quarter ended September 30, 2024, and net income of $1.2 million, or $0.13 per diluted share, for the quarter ended December 31, 2023. For the twelve months ended December 31, 2024, the Company reported net income of $1.1 million, or $0.12 per diluted share, compared to net income of $6.3 million, or $0.69 per diluted share, for the year ended December 31, 2023.

The improved performance in the current quarter compared to the quarter ended September 30, 2024, was due primarily to a $1.3 million recapture of provision for credit losses. This compares to a provision for credit losses of $1.6 million in the prior quarter that mainly related to two participation loans to a single borrowing entity totaling approximately $6.0 million, where we were not the lead lender. During the quarter ended December 31, 2024, one of the two loans was paid in full and the borrower paid down the balance on the other loan using proceeds from the sale of another property. Subsequently, we received an updated appraisal of the property securing the remaining loan that confirmed a value sufficient to support the recapture of the previously allocated specific reserve for this loan.

“I am pleased to report that our net loans receivable increased $14.0 million in the quarter as our lending teams continue to focus on growing our loan portfolio. In addition, our credit quality remained strong, with only $842,000 in nonaccrual loans, representing 0.07% of our $1.16 billion total loan portfolio,” stated Joseph W. Kiley III, President and CEO.

“We continue to prepare for the closing of the sale of the Bank to Global Federal Credit Union (“Global”), as we await the final required approval from Global’s primary regulator, the National Credit Union Administration, before we can proceed towards closing the transaction,” concluded Kiley.

Highlights for the quarter and year ended December 31, 2024:

• Net loans receivable totaled $1.14 billion at December 31, 2024, compared to $1.13 billion at September 30, 2024, and $1.18 billion at December 31, 2023.
• Book value per common share was $17.50 at December 31, 2024, compared to $17.39 at September 30, 2024, and $17.61 at December 31, 2023.
• The Bank’s Tier 1 leverage and total capital ratios were 11.2% and 16.7% at December 31, 2024, compared to 10.9% and 16.7% at September 30, 2024, and 10.2% and 16.2% at December 31, 2023, respectively.
• Credit quality remained strong with nonaccrual loans totaling $842,000, or 0.07% of total loans at December 31, 2024.
• A $1.3 million recapture of provision for credit losses was recorded in the current quarter, compared to a $1.6 million and no provision for credit losses recorded during the prior quarter and the same quarter a year ago, respectively. We recorded a $50,000 recapture of provision for credit losses for the year ended December 31, 2024, compared to a $208,000 recapture of provision for credit losses for the year ended December 31, 2023.

Deposits decreased $36.0 million to $1.13 billion at December 31, 2024, compared to $1.17 billion at September 30, 2024, and decreased $62.7 million compared to $1.19 billion at December 31, 2023. The decrease in deposits at December 31, 2024, compared to September 30, 2024, was due primarily to a $19.7 million decrease in noninterest-bearing demand deposits and a $15.5 million decrease in money market deposits. The decrease in deposits at December 31, 2024, from December 31, 2023, reflects declines in all deposit categories except for retail certificates of deposit which increased $91.8 million.

Federal Home Loan Bank (“FHLB”) advances totaled $110.0 million at December 31, 2024, compared to $100.0 million at September 30, 2024, and $125.0 million at December 31, 2023. Of the total FHLB advances at December 31, 2024, $100.0 million were tied to cash flow hedge agreements under which 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 had a weighted average remaining term of 27.8 months and a weighted average fixed interest rate of 1.93% as of December 31, 2024. The average cost of borrowings was 2.35% for the quarter ended December 31, 2024, compared to 3.19% for the quarter ended September 30, 2024, and 2.40% for the quarter ended December 31, 2023.

The following table presents a breakdown of our total deposits (unaudited):

	Dec 31,2024			Sep 30,2024			Dec 31,2023			ThreeMonthChange				One Year Change
Deposits:	(Dollars in thousands)
Noninterest-bearing demand	$	80,772		$	100,466		$	100,899		$	(19,694	)		$	(20,127	)
Interest-bearing demand		56,957			55,506			56,968			1,451				(11	)
Savings		16,277			17,031			18,886			(754	)			(2,609	)
Money market		480,520			495,978			529,411			(15,458	)			(48,891	)
Certificates of deposit, retail		448,974			447,474			357,153			1,500				91,821
Brokered deposits		47,900			50,900			130,790			(3,000	)			(82,890	)
Total deposits	$	1,131,400		$	1,167,355		$	1,194,107		$	(35,955	)		$	(62,707	)

The following tables present an analysis of total deposits by branch office (unaudited):

December 31, 2024
	Noninterest-bearingdemand		Interest-bearingdemand		Savings		Moneymarket		Certificatesof deposit,retail		Brokereddeposits		Total
	(Dollars in thousands)
King County
Renton	$	26,242	$	14,786	$	10,197	$	284,670	$	309,858	$	-	$	645,753
Landing		3,245		1,359		170		7,958		14,965		-		27,697
Woodinville		1,738		3,168		620		8,834		11,511		-		25,871
Bothell		2,792		930		408		1,421		6,762		-		12,313
Crossroads		11,075		2,762		86		29,208		18,772		-		61,903
Kent		3,766		4,873		40		18,673		8,471		-		35,823
Kirkland		5,524		1,924		208		11,574		1,855		-		21,085
Issaquah		1,244		238		13		2,298		6,562		-		10,355
Total King County		55,626		30,040		11,742		364,636		378,756		-		840,800
Snohomish County
Mill Creek		3,184		3,496		342		16,135		12,487		-		35,644
Edmonds		7,316		8,542		338		16,482		13,003		-		45,681
Clearview		4,909		5,653		1,494		17,934		13,778		-		43,768
Lake Stevens		3,633		5,946		1,314		24,571		17,004		-		52,468
Smokey Point		2,544		1,800		1,032		36,950		9,619		-		51,945
Total Snohomish County		21,586		25,437		4,520		112,072		65,891		-		229,506
Pierce County
University Place		1,837		54		1		2,113		2,122		-		6,127
Gig Harbor		1,723		1,426		14		1,699		2,205		-		7,067
Total Pierce County		3,560		1,480		15		3,812		4,327		-		13,194
Brokered deposits		-		-		-		-		-		47,900		47,900
Total deposits	$	80,772	$	56,957	$	16,277	$	480,520	$	448,974	$	47,900	$	1,131,400

September 30, 2024
	Noninterest-bearing demand		Interest-bearing demand		Savings		Money market		Certificates of deposit, retail		Brokered deposits		Total
	(Dollars in thousands)
King County
Renton	$	29,388	$	14,153	$	10,654	$	305,836	$	315,721	$	-	$	675,752
Landing		3,442		1,660		237		8,348		12,733		-		26,420
Woodinville		1,968		2,234		959		8,852		11,522		-		25,535
Bothell		2,965		1,151		401		1,536		5,918		-		11,971
Crossroads		14,770		2,039		107		31,665		18,136		-		66,717
Kent		5,417		10,502		44		16,053		8,562		-		40,578
Kirkland		10,967		1,890		206		11,243		2,240		-		26,546
Issaquah		1,186		294		18		2,547		6,580		-		10,625
Total King County		70,103		33,923		12,626		386,080		381,412		-		884,144
Snohomish County
Mill Creek		3,990		2,171		384		14,628		10,312		-		31,485
Edmonds		9,254		6,831		330		18,549		13,281		-		48,245
Clearview		5,587		5,242		1,462		21,206		12,251		-		45,748
Lake Stevens		3,970		4,282		1,244		23,257		15,571		-		48,324
Smokey Point		2,994		1,664		969		29,353		11,387		-		46,367
Total Snohomish County		25,795		20,190		4,389		106,993		62,802		-		220,169
Pierce County
University Place		2,940		53		4		1,848		1,458		-		6,303
Gig Harbor		1,628		1,340		12		1,057		1,802		-		5,839
Total Pierce County		4,568		1,393		16		2,905		3,260		-		12,142
Brokered deposits		-		-		-		-		-		50,900		50,900
Total deposits	$	100,466	$	55,506	$	17,031	$	495,978	$	447,474	$	50,900	$	1,167,355

Net loans receivable totaled $1.14 billion at December 31, 2024, compared to $1.13 billion at September 30, 2024, and $1.18 billion at December 31, 2023. The increase in the current quarter compared to the quarter ended September 30, 2024, was due to growth in non-residential commercial real estate, construction/land, consumer and one-to-four family residential loans, partially offset by declines in multifamily and business lending. The average balance of net loans receivable totaled $1.13 billion for both the quarters ended December 31, 2024, and September 30, 2024, compared to $1.17 billion for the quarter ended December 31, 2023. For the year ended December 31, 2024, the average balance of net loans receivable was $1.14 billion, compared to $1.17 billion for the year ended December 31, 2023.

The allowance for credit losses (“ACL”) represented 1.30% of total loans receivable at December 31, 2024, compared to 1.42% of total loans receivable at September 30, 2024, and 1.28% at December 31, 2023. The change in the ACL at December 31, 2024, compared to September 30, 2024, related primarily to activity on the single lending relationship discussed above.

Nonaccrual loans totaled $842,000 at December 31, 2024, compared to $853,000 at September 30, 2024, and $220,000 at December 31, 2023. There was no other real estate owned at December 31, 2024, September 30, 2024, or December 31, 2023.

Net interest income totaled $8.4 million for the quarter ended December 31, 2024, compared to $8.5 million for the quarter ended September 30, 2024, and $9.3 million for the quarter ended December 31, 2023. The decrease in the current quarter compared to the quarter ended September 30, 2024, was primarily due to declines in interest from earning assets, partially offset by declines in interest expense. For the year ended December 31, 2024, net interest income totaled $34.8 million, compared to $40.5 million for the year ended December 31, 2023, as total interest expense increased by $5.0 million and total interest income declined by $800,000.

Total interest income decreased $419,000 to $19.0 million for the quarter ended December 31, 2024, compared to $19.4 million for the quarter ended September 30, 2024, and decreased $1.3 million compared to $20.3 million for the quarter ended December 31, 2023. The decrease in total interest income during the current quarter compared to the prior quarter was primarily due to a $250,000 or 29.0% decline in interest income earned on interest-earning deposits held with banks. This decline resulted from a 54 basis point decrease in the average yield earned on these deposits, coupled with a $13.6 million reduction in their average balance. Additionally, interest income on loans, including fees, declined by $146,000 or 0.9%, primarily due to a $2.5 million decrease in the average balance of loans and, to a lesser extent, a four basis point decrease in the yield earned on loans. The decrease in total interest income during the current quarter compared to the comparable quarter in 2023 was primarily due to declines in interest income on loans, including fees, of $631,000, investments of $449,000, and interest-earning deposits with banks of $267,000, partially offset by an increase in dividends on FHLB stock of $56,000.

Yield on loans, the largest component of our interest-earning assets, declined to 5.82% during the recent quarter, compared to 5.86% and 5.83% for the quarters ended September 30, 2024, and December 31, 2023, respectively. The yield on investment securities for the current quarter was 4.29%, down slightly from 4.30% last quarter and up from 4.11% a year ago.

Total interest expense was $10.6 million for the quarter ended December 31, 2024, down from $11.0 million for both quarters ended September 30, 2024, and December 31, 2023. The decrease from the quarter ended September 30, 2024, was due to lower interest expense related to FHLB advances and other borrowings, which declined due to a decline in the average balance of FHLB advances and other borrowings, partially offset by higher interest expense on deposits driven by an increase in the average balance of interest-bearing deposits. The decrease from the quarter ended December 31, 2023, was due to lower interest expense on deposits and FHLB advances and other borrowings, primarily as a result of lower average balances of these liabilities.

Net interest margin was 2.50% for the quarter ended December 31, 2024, compared to 2.46% for the quarter ended September 30, 2024, and 2.54% for the quarter ended December 31, 2023. The increase in the net interest margin for the quarter ended December 31, 2024, compared to the prior quarter was primarily due to a decline in the average balance of total interest-earning assets, as net interest income was relatively unchanged during the periods. The decrease in the net interest margin for the quarter ended December 31, 2024, compared to the same quarter a year ago was primarily due to a decline in net interest income, which was partially offset by a decline in the average balance of total interest-earning assets. The net interest margin for the month of December 2024 was 2.55%.

Noninterest income for the quarter ended December 31, 2024, totaled $658,000, down from $677,000 for the quarter ended September 30, 2024, and up from $633,000 for the quarter ended December 31, 2023. The decrease compared to the quarter ended September 30, 2024, was primarily due to lower loan and deposit related fees and BOLI income, partially offset by an increase in wealth management revenue. Noninterest income remained nearly flat at $2.8 million for both the years ended December 31, 2024, and December 31, 2023, as increases in BOLI income, wealth management revenue and loan related fees in the current year were nearly entirely offset by decreases in deposit related fees and other noninterest income.

Noninterest expense totaled $8.9 million for the quarter ended December 31, 2024, compared to $8.5 million for the quarter ended September 30, 2024, and $8.4 million for the quarter ended December 31, 2023. The increase from the quarter ended September 30, 2024, was primarily due to a $860,000 increase in salaries and employee benefits due to 2025 merit increases implemented in December 2024, as well as year-end accruals related to incentive compensation, partially offset by decreases in nearly all other categories, most notably professional fees and other general and administrative expenses. Incentive compensation increased due to the project that modified certain loans that would have otherwise been ineligible for Global Federal Credit Union to hold on their balance sheet. The increase compared to the quarter ended December 31, 2023, was primarily due to a $644,000 increase in salaries and employee benefits and an $87,000 increase in data processing expenses, partially offset by decreases across other expense categories. Noninterest expense totaled $36.7 million for the year ended December 31, 2024, compared to $35.7 million for the year ended December 31, 2023. The year-over-year increase was primarily due to an increase in professional fees, data processing and salaries and employee benefits, partially offset by lower marketing and other general and administrative expenses and regulatory assessments.

First Financial Northwest, Inc. is the parent company of First Financial Northwest Bank; an FDIC insured Washington State-chartered commercial bank headquartered in Renton, Washington, serving the Puget Sound Region through 15 full-service banking offices. For additional information about us, please visit our website at ffnwb.com and click on the “Investor Relations” link at the bottom of the page.

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. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about, among other things, our pending transaction with Global Federal Credit Union (“Global”) whereby Global, pursuant to the definitive purchase and assumption agreement (the “P&A Agreement”), will acquire substantially all of the assets and assume substantially all of the liabilities of the Bank, expectations of the business environment in which we operate, projections of future performance or financial items, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based on current management expectations and may, therefore, involve risks and uncertainties. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements made by, or on behalf of, us and could negatively affect our operating and stock performance. 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: the occurrence of any event, change or other circumstances that could give rise to the right of one or all of the parties to terminate the P&A Agreement; delays in completing the P&A Agreement; the failure to obtain necessary regulatory approvals or to satisfy any of the other conditions to the Global transaction, including the P&A Agreement, on a timely basis or at all; delays or other circumstances arising from the dissolution of the Bank and the Company following completion of the P&A Agreement; diversion of management’s attention from ongoing business operations and opportunities during the pending Global transaction; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of the Global transaction; 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 recession or slowed economic growth; changes in the interest rate environment, including increases or decreases in the Federal Reserve benchmark rate and duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures, including repricing and competitors’ pricing initiatives, and their impact on our market position, loan, and deposit products; legislative and regulatory changes; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; effects of critical accounting policies and judgments, including the use of estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; the potential effects of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with or furnished to 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.

FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands) (Unaudited)
Assets	Dec 31,2024				Sep 30,2024				Dec 31,2023				ThreeMonthChange			OneYearChange
Cash on hand and in banks	$	9,535			$	8,423			$	8,391			13.2	%		13.6	%
Interest-earning deposits with banks		36,182				72,884				22,138			(50.4	)		63.4
Investments available-for-sale, at fair value		151,642				156,609				207,915			(3.2	)		(27.1	)
Investments held-to-maturity, at amortized cost		2,468				2,462				2,456			0.2			0.5
Loans receivable, net of allowance of $15,066, $16,265 and $15,306, respectively		1,140,186				1,126,146				1,175,925			1.2			(3.0	)
Federal Home Loan Bank ("FHLB") stock, at cost		5,853				5,403				6,527			8.3			(10.3	)
Accrued interest receivable		6,108				6,638				7,359			(8.0	)		(17.0	)
Deferred tax assets, net		2,582				2,690				2,648			(4.0	)		(2.5	)
Premises and equipment, net		18,166				18,584				19,667			(2.2	)		(7.6	)
Bank owned life insurance ("BOLI"), net		38,950				38,661				37,653			0.7			3.4
Prepaid expenses and other assets		9,676				8,898				10,478			8.7			(7.7	)
Right of use asset ("ROU"), net		2,357				2,473				2,617			(4.7	)		(9.9	)
Goodwill		889				889				889			0.0			0.0
Core deposit intangible, net		295				326				419			(9.5	)		(29.6	)
Total assets	$	1,424,889			$	1,451,086			$	1,505,082			(1.8	)		(5.3	)
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing deposits	$	80,772			$	100,466			$	100,899			(19.6	)		(19.9	)
Interest-bearing deposits		1,050,628				1,066,889				1,093,208			(1.5	)		(3.9	)
Total deposits		1,131,400				1,167,355				1,194,107			(3.1	)		(5.3	)
FHLB advances		110,000				100,000				125,000			10.0			(12.0	)
Advance payments from borrowers for taxes and insurance		2,873				5,211				2,952			(44.9	)		(2.7	)
Lease liability, net		2,550				2,673				2,806			(4.6	)		(9.1	)
Accrued interest payable		526				294				2,739			78.9			(80.8	)
Other liabilities		15,985				15,340				15,818			4.2			1.1
Total liabilities		1,263,334				1,290,873				1,343,422			(2.1	)		(6.0	)
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 9,230,010 shares at December 31, 2024, 9,213,969 shares at September 30, 2024, and 9,179,510 shares at December 31, 2023		93				92				92			1.1			1.1
Additional paid-in capital		72,823				72,916				73,035			(0.1	)		(0.3	)
Retained earnings		94,892				93,692				96,206			1.3			(1.4	)
Accumulated other comprehensive loss, net of tax		(6,253	)			(6,487	)			(7,673	)		(3.6	)		(18.5	)
Total stockholders' equity		161,555				160,213				161,660			0.8			(0.1	)
Total liabilities and stockholders' equity	$	1,424,889			$	1,451,086			$	1,505,082			(1.8	)%		(5.3	)%

FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Consolidated Income Statements (Dollars in thousands, except per share data) (Unaudited)
	Quarter Ended
	Dec 31,2024				Sep 30,2024				Dec 31,2023			ThreeMonthChange			OneYearChange
Interest income
Loans, including fees	$	16,512			$	16,658			$	17,143		(0.9	)%		(3.7	)%
Investments		1,694				1,744				2,143		(2.9	)		(21.0	)
Interest-earning deposits with banks		613				863				880		(29.0	)		(30.3	)
Dividends on FHLB Stock		177				150				121		18.0			46.3
Total interest income		18,996				19,415				20,287		(2.2	)		(6.4	)
Interest expense
Deposits		9,956				9,748				10,281		2.1			(3.2	)
FHLB advances and other borrowings		600				1,213				731		(50.5	)		(17.9	)
Total interest expense		10,556				10,961				11,012		(3.7	)		(4.1	)
Net interest income		8,440				8,454				9,275		(0.2	)		(9.0	)
(Recapture of provision) provision for credit losses		(1,250	)			1,575				-		(179.4	)		n/a
Net interest income after (recapture of provision) provision for credit losses		9,690				6,879				9,275		40.9			4.5
Noninterest income
BOLI income		289				295				255		(2.0	)		13.3
Wealth management revenue		88				42				60		109.5			46.7
Deposit related fees		226				236				234		(4.2	)		(3.4	)
Loan related fees		44				96				60		(54.2	)		(26.7	)
Other		11				8				24		37.5			(54.2	)
Total noninterest income		658				677				633		(2.8	)		3.9
Noninterest expense
Salaries and employee benefits		5,466				4,606				4,822		18.7			13.4
Occupancy and equipment		1,154				1,183				1,231		(2.5	)		(6.3	)
Professional fees		377				585				431		(35.6	)		(12.5	)
Data processing		805				838				718		(3.9	)		12.1
Regulatory assessments		160				165				196		(3.0	)		(18.4	)
Insurance and bond premiums		114				113				113		0.9			0.9
Marketing		24				46				70		(47.8	)		(65.7	)
Other general and administrative		834				952				858		(12.4	)		(2.8	)
Total noninterest expense		8,934				8,488				8,439		5.3			5.9
Income before federal income tax provision (benefit)		1,414				(932	)			1,469		(251.7	)		(3.7	)
Federal income tax provision (benefit)		214				(324	)			275		(166.0	)		(22.2	)
Net income (loss)	$	1,200			$	(608	)		$	1,194		(297.4	)%		0.5	%
Basic earnings (loss) per share	$	0.13			$	(0.07	)		$	0.13
Diluted earnings (loss) per share	$	0.13			$	(0.07	)		$	0.13
Weighted average number of common shares outstanding		9,220,593				9,190,146				9,151,892
Weighted average number of diluted shares outstanding		9,238,565				9,190,146				9,176,724

FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Consolidated Income Statements (Dollars in thousands, except per share data) (Unaudited)
	Year Ended December 31,
		2024				2023			One Year Change
Interest income
Loans, including fees	$	66,941			$	66,938			0.0	%
Investments		7,388				8,474			(12.8	)
Interest-earning deposits with banks		2,444				2,261			8.1
Dividends on FHLB Stock		597				485			23.1
Total interest income		77,370				78,158			(1.0	)
Interest expense
Deposits		39,117				34,407			13.7
FHLB advances and other borrowings		3,490				3,208			8.8
Total interest expense		42,607				37,615			13.3
Net interest income		34,763				40,543			(14.3	)
Recapture of provision for credit losses		(50	)			(208	)		(76.0	)
Net interest income after recapture of provision for credit losses		34,813				40,751			(14.6	)
Noninterest income
BOLI		1,245				1,081			15.2
Wealth management revenue		279				253			10.3
Deposit accounts related fees		923				956			(3.5	)
Loan related fees		296				275			7.6
Other		53				208			(74.5	)
Total noninterest income		2,796				2,773			0.8
Noninterest expense
Salaries and employee benefits		20,652				20,366			1.4
Occupancy and equipment		4,789				4,748			0.9
Professional fees		3,011				2,288			31.6
Data processing		3,285				2,857			15.0
Regulatory assessments		662				763			(13.2	)
Insurance and bond premiums		477				468			1.9
Marketing		179				343			(47.8	)
Other general and administrative		3,638				3,833			(5.1	)
Total noninterest expense		36,693				35,666			2.9
Income before federal income tax (benefit) provision		916				7,858			(88.3	)
Federal income tax (benefit) provision		(156	)			1,553			(110.0	)
Net income	$	1,072			$	6,305			(83.0	)%
Basic earnings per share	$	0.12			$	0.69
Diluted earnings per share	$	0.12			$	0.69
Weighted average number of common shares outstanding		9,183,900				9,126,209
Weighted average number of diluted shares outstanding		9,238,016				9,152,617

The following table presents a breakdown of the loan portfolio (unaudited):

	December 31, 2024							September 30, 2024							December 31, 2023
	Amount				Percent			Amount				Percent			Amount				Percent
	(Dollars in thousands)
Commercial real estate:
Residential:
Multifamily	$	126,303			10.9	%		$	132,811			11.6	%		$	138,149			11.6	%
Total multifamily residential		126,303			10.9				132,811			11.6				138,149			11.6
Non-residential:
Retail		110,787			9.6				118,840			10.4				124,172			10.4
Office		73,306			6.3				73,778			6.5				72,778			6.1
Hotel / motel		72,434			6.3				54,716			4.8				63,597			5.3
Storage		32,229			2.8				32,443			2.8				33,033			2.8
Mobile home park		22,701			2.0				22,443			2.0				21,701			1.8
Warehouse		23,363			2.0				18,743			1.6				19,218			1.6
Nursing Home		9,713			0.8				11,407			1.0				11,610			1.0
Other non-residential		29,865			2.5				30,719			2.7				31,750			2.6
Total non-residential		374,398			32.3				363,089			31.8				377,859			31.6
Construction/land:
One-to-four family residential		49,674			4.3				42,846			3.8				47,149			4.0
Multifamily		7,884			0.7				7,227			0.6				4,004			0.3
Land development		9,582			0.8				10,148			0.8				9,771			0.8
Total construction/land		67,140			5.8				60,221			5.2				60,924			5.1
One-to-four family residential:
Permanent owner occupied		284,650			24.7				279,744			24.5				284,471			23.9
Permanent non-owner occupied		217,420			18.8				221,127			19.4				228,752			19.2
Total one-to-four family residential		502,070			43.5				500,871			43.9				513,223			43.1
Business
Aircraft		-			0.0				-			0.0				1,945			0.1
Small Business Administration ("SBA")		1,729			0.2				1,745			0.2				1,794			0.3
Paycheck Protection Plan ("PPP")		159			0.0				238			0.0				473			0.0
Other business		10,247			0.9				12,416			1.1				24,869			2.1
Total business		12,135			1.1				14,399			1.3				29,081			2.5
Consumer
Classic, collectible and other auto		59,580			5.2				58,085			5.1				58,618			5.0
Other consumer		13,626			1.2				12,935			1.1				13,377			1.1
Total consumer		73,206			6.4				71,020			6.2				71,995			6.1
Total loans		1,155,252			100.0	%			1,142,411			100.0	%			1,191,231			100.0	%
Less:
ACL		15,066							16,265							15,306
Loans receivable, net	$	1,140,186						$	1,126,146						$	1,175,925
Concentrations of credit: (1)
Construction loans as % of total capital		40.5	%						36.8	%						38.3	%
Total non-owner occupied commercial real estate as % of total capital		300.8	%						296.2	%						316.8	%

(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 SUBSIDIARIES Key Financial Measures (Unaudited)
	At or For the Quarter Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
		2024				2024				2024				2024				2023
	(Dollars in thousands, except per share data)
Performance Ratios: (1)
Return on assets		0.33	%			(0.17	)%			0.43	%			(0.29	)%			0.31	%
Return on equity		2.96				(1.50	)			3.88				(2.67	)			2.97
Dividend payout ratio		0.00				0.00				76.47				(108.33	)			100.00
Equity-to-assets ratio		11.34				11.04				11.10				10.91				10.74
Tangible equity ratio (2)		11.26				10.97				11.02				10.83				10.66
Net interest margin		2.50				2.46				2.66				2.55				2.54
Average interest-earning assets to average interest-bearing liabilities		116.51				116.46				117.01				116.40				115.84
Efficiency ratio		98.20				92.96				82.35				116.97				85.17
Noninterest expense as a percent of average total assets		2.49				2.32				2.21				3.05				2.18
Book value per common share	$	17.50			$	17.39			$	17.51			$	17.46			$	17.61
Tangible book value per share (2)		17.37				17.26				17.37				17.32				17.47
Capital Ratios: (3)
Tier 1 leverage ratio		11.16	%			10.86	%			10.91	%			10.41	%			10.18	%
Common equity tier 1 capital ratio		15.40				15.43				15.39				14.98				14.90
Tier 1 capital ratio		15.40				15.43				15.39				14.98				14.90
Total capital ratio		16.65				16.68				16.64				16.24				16.15
Asset Quality Ratios: (4)
Nonaccrual loans as a percent of total loans		0.07	%			0.07	%			0.41	%			0.02	%			0.02	%
Nonaccrual loans as a percent of total assets		0.06				0.06				0.32				0.01				0.01
ACL as a percent of total loans		1.30				1.42				1.29				1.30				1.28
Net charge-offs to average loans receivable, net		(0.00	)			0.00				0.00				0.00				0.00
Allowance for Credit Losses:
ACL - loans
Beginning balance	$	16,265			$	14,796			$	14,996			$	15,306			$	15,306
(Recapture of provision) provision for credit losses		(1,200	)			1,500				(200	)			(300	)			-
Charge-offs		-				(31	)			-				(10	)			-
Recoveries		1				-				-				-				-
Ending balance	$	15,066			$	16,265			$	14,796			$	14,996			$	15,306
Allowance for unfunded commitments
Beginning balance	$	639			$	564			$	564			$	439			$	439
(Recapture of provision) provision for credit losses		(50	)			75				-				125				-
Ending balance	$	589			$	639			$	564			$	564			$	439
(Recapture of provision) provision for credit losses
ACL - loans	$	(1,200	)		$	1,500			$	(200	)		$	(300	)		$	-
Allowance for unfunded commitments		(50	)			75				-				125				-
Total	$	(1,250	)		$	1,575			$	(200	)		$	(175	)		$	-

(1) Performance ratios are calculated on an annualized basis.(2) 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 SUBSIDIARIES Key Financial Measures (Unaudited)
	At or For the Quarter Ended
	Dec 31,				Sep 30,				Jun 30,				Mar 31,				Dec 31,
		2024				2024				2024				2024				2023
	(Dollars in thousands)
Yields and Costs: (1)
Yield on loans		5.82	%			5.86	%			5.93	%			5.88	%			5.83	%
Yield on investments		4.29				4.30				4.38				4.11				4.11
Yield on interest-earning deposits		4.73				5.27				5.25				5.28				5.32
Yield on FHLB stock		12.87				7.73				8.63				7.79				7.29
Yield on interest-earning assets		5.63	%			5.66	%			5.73	%			5.62	%			5.56	%
Cost of interest-bearing deposits		3.77	%			3.80	%			3.71	%			3.69	%			3.62	%
Cost of borrowings		2.35				3.19				2.64				2.65				2.40
Cost of interest-bearing liabilities		3.64	%			3.72	%			3.59	%			3.58	%			3.50	%
Cost of total deposits (2)		3.46	%			3.47	%			3.38	%			3.38	%			3.31	%
Cost of funds (2)		3.37				3.44				3.30				3.31				3.23
Average Balances:
Loans	$	1,129,019			$	1,131,473			$	1,139,017			$	1,160,156			$	1,167,339
Investments		156,975				161,232				173,102				202,106				206,837
Interest-earning deposits		51,518				65,149				36,959				37,032				65,680
FHLB stock		5,471				7,719				6,714				6,554				6,584
Total interest-earning assets	$	1,342,983			$	1,365,573			$	1,355,792			$	1,405,848			$	1,446,440
Interest-bearing deposits	$	1,051,201			$	1,021,041			$	1,029,608			$	1,082,168			$	1,127,690
Borrowings		101,522				151,478				129,126				125,604				120,978
Total interest-bearing liabilities		1,152,723				1,172,519				1,158,734				1,207,772				1,248,668
Noninterest-bearing deposits		93,331				96,003				101,196				99,173				102,869
Total deposits and borrowings	$	1,246,054			$	1,268,522			$	1,259,930			$	1,306,945			$	1,351,537
Average assets	$	1,429,788			$	1,453,431			$	1,446,207			$	1,495,753			$	1,538,955
Average stockholders' equity		161,093				161,569				161,057				161,823				159,659

(1) Yields and costs are annualized.(2) Includes noninterest-bearing deposits.(3) Includes total borrowings and deposits (including noninterest-bearing deposits).

FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES Key Financial Measures (Unaudited)
	At or For the Year Ended December 31,
		2024				2023				2022				2021				2020
					(Dollars in thousands, except per share data)
Performance Ratios:
Return on assets		0.07	%			0.41	%			0.91	%			0.86	%			0.63	%
Return on equity		0.66				3.93				8.34				7.65				5.50
Dividend payout ratio		216.67				75.36				32.65				33.59				45.45
Equity-to-assets ratio		11.34				10.74				10.67				11.07				11.26
Tangible equity ratio (1)		11.26				10.66				10.58				10.97				11.15
Net interest margin		2.54				2.82				3.54				3.35				3.15
Average interest-earning assets to average interest-bearing liabilities		116.59				116.69				119.18				118.59				115.62
Efficiency ratio		97.69				82.34				69.04				68.32				72.39
Noninterest expense as a percent of average total assets		2.52				2.33				2.44				2.35				2.39
Book value per common share	$	17.50			$	17.61			$	17.57			$	17.30			$	16.05
Tangible book value per share (1)		17.37				17.47				17.41				17.13				15.88
Capital Ratios: (2)
Tier 1 leverage ratio		11.16	%			10.18	%			10.31	%			10.34	%			10.29	%
Common equity tier 1 capital ratio		15.40				14.90				14.37				14.23				14.32
Tier 1 capital ratio		15.40				14.90				14.37				14.23				14.32
Total capital ratio		16.65				16.15				15.62				15.48				15.57
Asset Quality Ratios: (3)
Nonaccrual loans as a percent of total loans		0.07	%			0.02	%			0.02	%			0.00	%			0.19	%
Nonaccrual loans as a percent of total assets		0.06				0.01				0.01				0.00				0.18
ACL as a percent of total loans		1.30				1.28				1.29				1.40				1.36
Net charge-offs (recoveries) to average loans receivable, net		0.00				0.00				0.00				(0.02	)			(0.00	)
ACL - loans
Beginning balance	$	15,306			$	15,227			$	15,657			$	15,174			$	13,218
Beginning balance adjustment from adoption of Topic 326		-				500				-				-				-
(Recapture of provision) provision for credit losses		(200	)			(400	)			(400	)			300				1,900
Charge-offs		(41	)			(22	)			(37	)			-				(2	)
Recoveries		1				1				7				183				58
Ending balance	$	15,066			$	15,306			$	15,227			$	15,657			$	15,174
Allowance for unfunded commitments
Beginning balance	$	439			$	247			$	281			$	351			$	428
Provision (recapture of provision) for credit losses		150				192				(34	)			(70	)			(77	)
Ending balance	$	589			$	439			$	247			$	281			$	351
(Recapture of provision) provision for credit losses
ACL - loans	$	(200	)		$	(400	)		$	(400	)		$	300			$	1,900
Allowance for unfunded commitments		150				192				(34	)			(70	)			(77	)
Total	$	(50	)		$	(208	)		$	(434	)		$	230			$	1,823

(1) 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 SUBSIDIARIES Key Financial Measures (Unaudited)
	At or For the Year Ended December 31,
		2024				2023				2022				2021				2020
	(Dollars in thousands)
Yields and Costs:
Yield on loans		5.87	%			5.71	%			4.69	%			4.57	%			4.69	%
Yield on investments		4.26				3.97				2.77				1.83				2.39
Yield on interest-earning deposits		5.12				5.06				1.28				0.12				0.21
Yield on FHLB stock		9.03				7.07				5.08				5.29				4.85
Yield on interest-earning assets		5.66	%			5.44	%			4.33	%			4.01	%			4.36	%
Cost of deposits		3.74	%			3.12	%			0.87	%			0.71	%			1.42	%
Cost of borrowings		2.75				2.52				1.70				1.39				1.31
Cost of interest-bearing liabilities		3.63	%			3.05	%			0.95	%			0.78	%			1.41	%
Cost of interest-bearing deposits		3.42	%			2.83	%			0.77	%			0.64	%			1.32	%
Cost of funds		3.35				2.80				0.86				0.71				1.32
Average Balances:
Loans	$	1,139,864			$	1,172,569			$	1,128,835			$	1,098,772			$	1,120,889
Investments		173,276				213,261				203,165				176,110				133,584
Interest-earning deposits		47,723				44,684				30,176				60,482				25,108
FHLB stock		6,614				6,857				6,256				6,271				6,600
Total interest-earning assets	$	1,367,477			$	1,437,371			$	1,368,432			$	1,341,635			$	1,286,181
Interest-bearing deposits	$	1,045,950			$	1,104,510			$	1,034,351			$	1,015,852			$	987,069
Borrowings		126,931				127,263				113,890				115,466				125,392
Total interest-bearing liabilities		1,172,881				1,231,773				1,148,241				1,131,318				1,112,461
Noninterest-bearing deposits		97,411				109,795				125,166				112,484				75,388
Total deposits and borrowings	$	1,270,292			$	1,341,568			$	1,273,407			$	1,243,802			$	1,187,849
Average assets	$	1,456,215			$	1,529,511			$	1,455,739			$	1,421,476			$	1,361,604
Average stockholders' equity		161,385				160,428				158,685				160,041				155,587

Non-GAAP Financial Measures

In addition to financial results presented in accordance with generally accepted accounting principles (“GAAP”) utilized in the United States, this earnings release contains non-GAAP financial measures that include tangible equity, tangible assets, tangible book value per share, and the tangible equity-to-assets 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 31,2024				Sep 30,2024				Jun 30,2024				Mar 31,2024				Dec 31,2023
	(Dollars in thousands, except per share data)
Tangible equity to tangible assets and tangible book value per share:
Total stockholders' equity (GAAP)	$	161,555			$	160,213			$	160,693			$	160,183			$	161,660
Less:
Goodwill		889				889				889				889				889
Core deposit intangible, net		295				326				357				388				419
Tangible equity (Non-GAAP)	$	160,371			$	158,998			$	159,447			$	158,906			$	160,352
Total assets (GAAP)	$	1,424,889			$	1,451,086			$	1,447,753			$	1,468,350			$	1,505,082
Less:
Goodwill		889				889				889				889				889
Core deposit intangible, net		295				326				357				388				419
Tangible assets (Non-GAAP)	$	1,423,705			$	1,449,871			$	1,446,507			$	1,467,073			$	1,503,774
Common shares outstanding at period end		9,230,010				9,213,969				9,179,825				9,174,425				9,179,510
Equity-to-assets ratio (GAAP)		11.34	%			11.04	%			11.10	%			10.91	%			10.74	%
Tangible equity-to-tangible assets ratio (Non-GAAP)		11.26				10.97				11.02				10.83				10.66
Book value per common share (GAAP)	$	17.50			$	17.39			$	17.51			$	17.46			$	17.61
Tangible book value per share (Non-GAAP)		17.37				17.26				17.37				17.32				17.47

Non-GAAP Financial Measures (continued)
	Year Ended December 31,
		2024				2023				2022				2021				2020
	(Dollars in thousands, except per share data)
Tangible equity to tangible assets and tangible book value per share:
Total stockholders' equity (GAAP)	$	161,555			$	161,660			$	160,360			$	157,879			$	156,302
Less:
Goodwill		889				889				889				889				889
Core deposit intangible		295				419				548				684				824
Tangible equity (Non-GAAP)	$	160,371			$	160,352			$	158,923			$	156,306			$	154,589
Total assets (GAAP)		1,424,889				1,505,082				1,502,916				1,426,329				1,387,669
Less:
Goodwill		889				889				889				889				889
		295				419				548				684				824
Tangible assets (Non-GAAP)	$	1,423,705			$	1,503,774			$	1,501,479			$	1,424,756			$	1,385,956
Common shares outstanding at period end		9,230,010				9,179,510				9,127,595				9,125,759				9,736,875
Equity-to-assets ratio (GAAP)		11.34	%			10.74	%			10.67	%			11.07	%			11.26	%
Tangible equity ratio (Non-GAAP)		11.26				10.66				10.58				10.97				11.15
Book value per common share (GAAP)	$	17.50			$	17.61			$	17.57			$	17.30			$	16.05
Tangible book value per share (Non-GAAP)		17.37				17.47				17.41				17.13				15.88

For more information, contact:Joseph W. Kiley III, President and Chief Executive OfficerRich Jacobson, Executive Vice President and Chief Financial Officer(425) 255-4400