• First Financial Northwest, Inc. Reports Net Income of $3.3 million or $0.36 per Diluted Share for the First Quarter Ended March 31, 2022

    Источник: Nasdaq GlobeNewswire / 28 апр 2022 08:15:01   America/Chicago

    RENTON, Wash., April 28, 2022 (GLOBE NEWSWIRE) -- 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 March 31, 2022, of $3.3 million, or $0.36 per diluted share, compared to $2.7 million, or $0.29 per diluted share, for the quarter ended December 31, 2021, and $2.5 million, or $0.26 per diluted share, for the quarter ended March 31, 2021.

    “The first quarter of 2022 showed continued improvement in our funding base, with our average cost of funds declining to 0.51% from 0.55% in the quarter ended December 31, 2021, and 0.91% in the quarter ended March 31, 2021,” stated Joseph W. Kiley, III, President and CEO. “We anticipate that this improvement will continue since we have approximately $142.0 million in retail certificates of deposit at a weighted average rate of 1.0% maturing in the next 12 months, and an additional $91.4 million maturing in the subsequent 12 to 24 months, at a weighted average rate of 1.61%. The favorable impact of repricing maturing certificates of deposit on our average cost of funds may be less significant than we currently anticipate depending on the extent our competition for rate sensitive deposits responds to the Federal Reserve increasing the target federal funds rate,” continued Kiley.

    “In addition to the ongoing improvement in our cost of funds, I was pleased to see checking account deposit balances increase $14.7 million during the quarter. We also saw continued loan growth despite $5.7 million in Paycheck Protection Program loan repayments and forgiveness, with net loans receivable increasing $17.9 million to $1.12 billion during the quarter, led by growth in one-to-four family residential and multifamily loans,” continued Kiley.

    “As a result of our quarterly analysis of our loan portfolio, we downgraded to substandard $6.4 million of participation loans secured by medical rehabilitation facilities that were previously downgraded to special mention in the quarter ended June 30, 2021, due to the unavailability of elective medical procedures during the pandemic. In addition, we further downgraded a $1.7 million multifamily property loan to substandard subsequent to an overall financial analysis of a single borrowing relationship with multiple loans. These substandard loans were analyzed for impairment and the analysis concluded that no losses are anticipated from these loans, resulting in a recapture of provision for loan losses of the amount previously allocated to these loans. We also downgraded a $6.3 million loan where we are a participating lender on a nursing home facility to special mention as its recovery is occurring slower than anticipated as additional occupants are moving into such facilities at a slower pace compared to activity prior to the pandemic. Changes in the mix of our loan portfolio also impacted the allowance for loan and lease losses, with growth in the lower risk one-to-four family residential and reduced balances in other business loans that carry higher loan loss reserves impacting the analysis. In addition, $20.7 million in loans converted from construction loans to permanent multifamily loans, further contributing to the $500,000 recapture of provision for loan losses during the quarter, compared to a provision for loan losses of $600,000 in the quarter ended December 31, 2021,” concluded Kiley.

    Highlights for the quarter ended March 31, 2022:

    • Net loans receivable increased by $17.9 million to $1.12 billion at March 31, 2022, despite a reduction in Paycheck Protection Program (“PPP”) loan balances totaling $5.7 million.
    • Total deposits decreased by $17.4 million in the quarter; however, noninterest-bearing demand deposits increased by $12.8 million.
    • The Company’s book value per share increased to $17.32 at March 31, 2022, compared to $17.30 at December 31, 2021, and $16.35 at March 31, 2021.
    • The Company repurchased a total of 40,784 shares at an average price of $17.00 per share in the quarter, including 17,716 shares at an average price of $17.00 per share under its most recent board-authorized share repurchase plan authorizing the repurchase of up to 455,000 shares, or approximately 5% of the Company’s outstanding shares effective February 18, 2022.
    • The Company increased its regular quarterly cash dividend to shareholders to $0.12 per share from $0.11 per share.
    • The Bank’s Tier 1 leverage and total capital ratios at March 31, 2022, were 10.5% and 15.3%, respectively, compared to 10.3% and 15.5%, respectively, at December 31, 2021, and 10.2% and 15.6%, respectively at March 31, 2021.
    • Based on management’s evaluation of the adequacy of the allowance for loan and lease losses (“ALLL”), the Bank recorded a $500,000 recapture of provision for loan losses for the quarter.

    Deposits totaled $1.14 billion at March 31, 2022, compared to $1.16 billion at December 31, 2021, and $1.13 billion at March 31, 2021. The $12.8 million increase in noninterest-bearing demand deposits in the quarter ended March 31, 2022, was more than offset by the $30.2 million decrease in interest-bearing deposits as the Bank continues its strategy to shift its deposit composition to lower cost transaction accounts.

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

     Mar 31,
    2022    		 Dec 31,
    2021    		 Mar 31,
    2021    		 Three
    Month
    Change    		 One
    Year
    Change
    Deposits:(Dollars in thousands)
    Noninterest-bearing demand$130,596 $117,751 $114,437 $12,845  $16,159 
    Interest-bearing demand 99,794  97,907  114,098  1,887   (14,304)
    Savings 23,441  23,146  20,470  295   2,971 
    Money market 609,080  624,543  500,619  (15,463)  108,461 
    Certificates of deposit, retail 277,190  294,127  384,031  (16,937)  (106,841)
    Total deposits$1,140,101 $1,157,474 $1,133,655 $(17,373) $6,446 


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

    March 31, 2022
     Noninterest-
    bearing
    demand     		Interest-
    bearing
    demand    		 Savings Money
    market     		Certificates
    of deposit,
    retail    		Total
    (Dollars in thousands)
    King County      
    Renton$41,009$46,467$15,242$327,054$236,637$666,409
    Landing 5,105 2,328 182 23,720 3,297 34,632
    Woodinville 3,379 6,863 1,004 18,426 4,706 34,378
    Bothell 3,301 1,359 65 8,274 1,164 14,163
    Crossroads 19,127 6,449 58 53,827 4,638 84,099
    Kent 6,706 8,077 27 15,927 273 31,010
    Kirkland 7,587 358 19 8,114 25 16,103
    Issaquah 2,865 371 25 3,759 200 7,220
    Total King County 89,079 72,272 16,622 459,101 250,940 888,014
           
    Snohomish County      
    Mill Creek 6,479 2,515 1,144 20,807 6,769 37,714
    Edmonds 20,054 7,814 913 41,399 8,332 78,512
    Clearview 5,781 4,598 1,348 25,563 1,242 38,532
    Lake Stevens 4,176 7,163 1,684 30,239 4,504 47,766
    Smokey Point 3,199 4,827 1,676 27,809 5,393 42,904
    Total Snohomish County 39,689 26,917 6,765 145,817 26,240 245,428
           
    Pierce County      
    University Place 1,345 59 22 2,541 10 3,977
    Gig Harbor 483 546 32 1,621 - 2,682
    Total Pierce County 1,828 605 54 4,162 10 6,659
           
    Total deposits$130,596$99,794$23,441$609,080$277,190$1,140,101


    December 31, 2021
     Noninterest-
    bearing
    demand     		Interest-
    bearing
    demand    		 Savings Money
    market     		Certificates
    of deposit,
    retail    		Total
    (Dollars in thousands)
    King County      
    Renton$44,550$46,485$14,948$316,781$251,860$674,624
    Landing 6,060 3,218 180 24,056 3,620 37,134
    Woodinville 3,625 6,814 1,017 19,585 4,974 36,015
    Bothell 2,590 1,726 86 8,453 1,158 14,013
    Crossroads 14,094 4,129 45 69,687 4,622 92,577
    Kent 6,022 8,148 2 20,268 282 34,722
    Kirkland 5,449 333 12 6,834 25 12,653
    Issaquah 1,326 367 17 4,532 100 6,342
    Total King County 83,716 71,220 16,307 470,196 266,641 908,080
           
    Snohomish County      
    Mill Creek 5,854 3,559 694 18,781 7,101 35,989
    Edmonds 13,839 6,809 1,103 41,513 8,954 72,218
    Clearview 5,799 4,610 1,380 24,925 1,290 38,004
    Lake Stevens 3,552 6,878 1,904 33,122 4,500 49,956
    Smokey Point 3,476 4,205 1,727 33,550 5,639 48,597
    Total Snohomish County 32,520 26,061 6,808 151,891 27,484 244,764
           
    Pierce County      
    University Place 1,058 51 8 481 2 1,600
    Gig Harbor 457 575 23 1,975 - 3,030
    Total Pierce County 1,515 626 31 2,456 2 4,630
           
    Total deposits$117,751$97,907$23,146$624,543$294,127$1,157,474

    Net loans receivable totaled $1.12 billion at March 31, 2022, compared to $1.10 billion at both December 31, 2021, and March 31, 2021. During the quarter ended March 31, 2022, new originations of one-to-four family and multifamily residential loans and consumer loans more than offset loan repayments in the quarter, including PPP loan repayments and forgiveness. The average balance of net loans receivable increased to $1.12 billion for the quarter ended March 31, 2022, compared to $1.11 billion for the quarter ended December 31, 2021, and $1.10 billion for the quarter ended March 31, 2021.

    The ALLL represented 1.33% of total loans receivable at March 31, 2022, compared to 1.40% of total loans receivable at December 31, 2021, and 1.39% of total loans receivable at March 31, 2021.

    There was a single nonperforming consumer loan of $179,000 at March 31, 2022, compared to none at December 31, 2021, and $2.0 million at March 31, 2021. There was no other real estate owned (“OREO”) at both March 31, 2022, and December 31, 2021, compared to $454,000 at March 31, 2021.

    The following table presents a breakdown of our nonperforming assets (unaudited):

     Mar 31,  Dec 31, Mar 31, Three
    Month    		 One
    Year
      2022   2021  2021  Change Change
     (Dollars in thousands)
    Nonperforming loans:          
    Multifamily$─  $─ $2,036  $─ $(2,036)
    Consumer 179   ─  ─   179  179 
    Total nonperforming loans 179   ─  2,036   179  (1,857)
               
    OREO ─   ─  454  ─  (454)
               
    Total nonperforming assets (1)$179  $─ $2,490  $179 $(2,311)
               
    Nonperforming assets as a percent          
    of total assets 0.01%  0.00%  0.17%    

    (1) The difference between nonperforming assets reported above, and the totals reported by other industry sources, is due to their inclusion of all Troubled Debt Restructured Loans ("TDRs") as nonperforming loans, although 100% of the Bank’s TDRs were performing in accordance with their restructured terms at March 31, 2022.

    The Company accounts for certain loan modifications or restructurings as TDRs. In general, the modification or restructuring of a debt is considered a TDR if, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider. TDRs totaled $2.1 million at both March 31, 2022, and December 31, 2021, compared to $3.8 million at March 31, 2021. All TDRs were performing according to their modified repayment terms for the periods presented.

    Net interest income totaled $11.4 million for the quarter ended March 31, 2022, compared to $11.6 million for the quarter ended December 31, 2021, and $10.7 million for the quarter ended March 31, 2021. The decrease in the current quarter compared to the quarter ended December 31, 2021, was primarily due to lower interest income on loans, including reduced fee income recognition from PPP loan forgiveness, partially offset by lower interest expense on deposits, FHLB advances and other borrowings.

    Total interest income was $12.9 million for the quarter ended March 31, 2022, compared to $13.3 million for the quarter ended December 31, 2021, and $13.5 million for the quarter ended March 31, 2021. The decrease in the current quarter compared to the quarter ended December 31, 2021, was primarily due to a reduction in average loan yields to 4.36% from 4.44% in the prior quarter. The decrease from the quarter ended March 31, 2021, is primarily due to a decline in average loan yields to 4.36% from 4.66%, partially offset by a $26.1 million increase in the average balance of interest-earning assets. The reduction in average loan yields primarily reflects loans originated or refinanced at lower rates in this continued low interest rate environment, along with reduced net deferred loan fee income recognition from PPP loan forgiveness compared to each of the prior periods. Asset yields and interest income from loans continued to be impacted by the net deferred loan fee recognition on PPP loans, primarily the recognition of previously unamortized net deferred loan fees and costs related to forgiven PPP loans, which totaled $172,000 in the quarter ended March 31, 2022, compared to $461,000 in the quarter ended December 31, 2021, and $718,000 in the quarter ended March 31, 2021. At March 31, 2022, the balance of net deferred loan fees relating to PPP loans to be recognized in future periods totaled $86,000.

    Total interest expense was $1.6 million for the quarter ended March 31, 2022, compared to $1.7 million for the quarter ended December 31, 2021, and $2.7 million for the quarter ended March 31, 2021. The average cost of interest-bearing deposits declined to 0.50% for the quarter ended March 31, 2022, compared to 0.53% for the quarter ended December 31, 2021, and 0.94% for the quarter ended March 31, 2021. The decline from the quarter ended December 31, 2021, was due primarily to the continued repricing of maturing certificates of deposit to lower interest rates combined with a reduction in the average balance of higher cost certificates of deposit. Advances from the FHLB were $95.0 million at both March 31, 2022, and December 31, 2021, compared to $120.0 million at March 31, 2021. The 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 56 months and a weighted average fixed rate of 1.05%. The average cost of borrowings was 1.28% for the quarter ended March 31, 2022, compared to 1.33% for the quarter ended December 31, 2021, and 1.41% for the quarter ended March 31, 2021.

    The net interest margin was 3.43% for the quarter ended March 31, 2022, compared to 3.40% for the quarter ended December 31, 2021, and 3.31% for the quarter ended March 31, 2021. The increase in the net interest margin for the quarter ended March 31, 2022, compared to the quarter ended December 31, 2021, is due to several factors, including a five basis point reduction in the average cost of interest-bearing liabilities to 0.56% from 0.61%, partially offset by a one basis point reduction in the Company’s average yield on interest-earning assets during the quarter to 3.90% from 3.91%. The increase in net interest margin for the quarter ended March 31, 2022, compared to the quarter ended March 31, 2021, was due primarily to the 43 basis point reduction in the average cost of interest-bearing liabilities to 0.56% from 0.99%, partially offset by a 25 basis point reduction in the average yield on interest-earning assets to 3.90% from 4.15%.

    Noninterest income for the quarter ended March 31, 2022, totaled $789,000, compared to $1.1 million for the quarter ended December 31, 2021, and $764,000 for the quarter ended March 31, 2021. The decrease in noninterest income for the quarter ended March 31, 2022, compared to the quarter ended December 31, 2021, was primarily due to lower loan related fees, predominantly from a $365,000 decrease in prepayment penalties, and to a lesser extent lower wealth management revenue, partially offset by higher BOLI income, while the quarter ended December 31, 2021, included a slight net gain on sale of investments as compared to none in the current quarter.

    Noninterest expense totaled $8.6 million for the quarter ended March 31, 2022, compared to $8.7 million for the quarter ended December 31, 2021, and $8.1 million for the quarter ended March 31, 2021. Salaries and benefits for the quarter ended March 31, 2022, decreased $113,000 from the quarter ended December 31, 2021, which included final year-end accruals for employee incentives and commissions earned in 2021, while occupancy and equipment increased modestly in the current quarter.

    Forward-looking statements:

    When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events many of which are inherently uncertain and outside of our control. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements. Factors that could cause our actual results to differ materially from those described in the forward-looking statements, include, but are not limited to, the following: the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; 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 SUBSIDIARIES
    Consolidated Balance Sheets
    (Dollars in thousands, except share data)
    (Unaudited)

    AssetsMar 31,
    2022    		 Dec 31,
    2021    		  Mar 31,
    2021    		 Three
    Month
    Change    		 One
    Year
    Change
    Cash on hand and in banks$7,979  $7,246  $7,211  10.1% 10.7%
    Interest-earning deposits with banks 19,633   66,145   75,023  (70.3) (73.8)
    Investments available-for-sale, at fair value 180,212   168,948   168,042  6.7  7.2 
    Investments held-to-maturity, at amortized cost 2,426   2,432   2,413  (0.2) 0.5 
    Loans receivable, net of allowance of $15,159, $15,657, and $15,502 respectively 1,121,382   1,103,461   1,098,832  1.6  2.1 
    Federal Home Loan Bank ("FHLB") stock, at cost 5,512   5,465   6,465  0.9  (14.7)
    Accrued interest receivable 5,590   5,285   5,702  5.8  (2.0)
    Deferred tax assets, net 1,069   850   1,163  25.8  (8.1)
    Other real estate owned ("OREO") -   -   454  n/a  (100.0)
    Premises and equipment, net 22,254   22,440   22,512  (0.8) (1.1)
    Bank owned life insurance ("BOLI"), net 35,552   35,210   33,357  1.0  6.6 
    Prepaid expenses and other assets 8,451   3,628   3,398  132.9  148.7 
    Right of use asset ("ROU"), net 3,455   3,646   3,976  (5.2) (13.1)
    Goodwill 889   889   889  0.0  0.0 
    Core deposit intangible, net 650   684   789  (5.0) (17.6)
    Total assets$1,415,054  $1,426,329  $1,430,226  (0.8) (1.1)
              
    Liabilities and Stockholders' Equity         
              
    Deposits         
    Noninterest-bearing deposits$130,596  $117,751  $114,437  10.9% 14.1%
    Interest-bearing deposits 1,009,505   1,039,723   1,019,218  (2.9) (1.0)
    Total deposits 1,140,101   1,157,474   1,133,655  (1.5) 0.6 
    Advances from the FHLB 95,000   95,000   120,000  0.0  (20.8)
    Advance payments from borrowers for taxes and insurance 5,299   2,909   4,813  82.2  10.1 
    Lease liability, net 3,617   3,805   4,123  (4.9) (12.3)
    Accrued interest payable 112   112   197  0.0  (43.1)
    Other liabilities 13,168   9,150   8,995  43.9  46.4 
    Total liabilities 1,257,297   1,268,450   1,271,783  (0.9) (1.1)
              
    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 9,107,977 shares at March 31, 2022, 9,125,759 shares at December 31, 2021, and 9,692,610 shares at March 31, 2021 91   91   97  0.0  (6.2)
    Additional paid-in capital 71,780   72,298   81,099  (0.7) (11.5)
    Retained earnings 88,339   86,162   79,455  2.5  11.2 
    Accumulated other comprehensive (loss) income, net of tax (1,889)  174   (515) (1,185.6) 266.8 
    Unearned Employee Stock Ownership Plan ("ESOP") shares (564)  (846)  (1,693) (33.3) (66.7)
    Total stockholders' equity 157,757   157,879   158,443  (0.1) (0.4)
    Total liabilities and stockholders' equity$1,415,054  $1,426,329  $1,430,226  (0.8)% (1.1)%


    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
    Consolidated Income Statements
    (Dollars in thousands, except share data)
    (Unaudited)

     Quarter Ended    
     Mar 31,
    2022    		  Dec 31,
    2021     		 Mar 31,
    2021    		  Three
    Month
    Change     		  One
    Year
    Change
    Interest income         
    Loans, including fees$12,001  $12,398 $12,624 (3.2)% (4.9)%
    Investment securities 831   804  748 3.4  11.1 
    Interest-earning deposits with banks 19   19  12 0.0  58.3 
    Dividends on FHLB Stock 74   85  79 (12.9) (6.3)
    Total interest income 12,925   13,306  13,463 (2.9) (4.0)
    Interest expense         
    Deposits 1,257   1,390  2,299 (9.6) (45.3)
    FHLB advances and other borrowings 300   340  418 (11.8) (28.2)
    Total interest expense 1,557   1,730  2,717 (10.0) (42.7)
    Net interest income 11,368   11,576  10,746 (1.8) 5.8 
    (Recapture of provision) provision for loan losses (500)  600  300 (183.3) (266.7)
    Net interest income after (recapture of provision) provision for loan losses 11,868   10,976  10,446 8.1  13.6 
              
    Noninterest income         
    Net gain on sale of investments -   32  - (100.0) n/a
    BOLI income 288   216  269 33.3  7.1 
    Wealth management revenue 82   104  160 (21.2) (48.8)
    Deposit related fees 215   218  200 (1.4) 7.5 
    Loan related fees 199   551  132 (63.9) 50.8 
    Other 5   5  3 0.0  66.7 
    Total noninterest income 789   1,126  764 (29.9) 3.3 
              
    Noninterest expense         
    Salaries and employee benefits 5,261   5,374  4,945 (2.1) 6.4 
    Occupancy and equipment 1,228   1,154  1,100 6.4  11.6 
    Professional fees 452   477  532 (5.2) (15.0)
    Data processing 677   689  697 (1.7) (2.9)
    Regulatory assessments 101   100  121 1.0  (16.5)
    Insurance and bond premiums 129   110  124 17.3  4.0 
    Marketing 37   37  29 0.0  27.6 
    Other general and administrative 741   775  581 (4.4) 27.5 
    Total noninterest expense 8,626   8,716  8,129 (1.0) 6.1 
    Income before federal income tax provision 4,031   3,386  3,081 19.0  30.8 
    Federal income tax provision 771   643  584 19.9  32.0 
    Net income$3,260  $2,743 $2,497 18.8% 30.6%
              
    Basic earnings per share$0.36  $0.30 $0.26    
    Diluted earnings per share$0.36  $0.29 $0.26    
    Weighted average number of common shares outstanding 8,987,482   9,129,724  9,490,058    
    Weighted average number of diluted shares outstanding 9,117,432   9,273,502  9,566,671    


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

     March 31, 2022December 31, 2021March 31, 2021
     Amount Percent Amount Percent Amount Percent
     (Dollars in thousands)
    Commercial real estate:           
    Residential:           
    Micro-unit apartments$-  0.0% $-  0.0% $11,708  1.0%
    Other multifamily 152,855  13.4   130,146  11.6   128,360  11.5 
    Total multifamily residential 152,855  13.4   130,146  11.6   140,068  12.5 
                
    Non-residential:           
    Office 87,394  7.7   90,727  8.1   83,176  7.5 
    Retail 142,725  12.6   138,463  12.4   110,843  9.9 
    Mobile home park 20,409  1.8   20,636  1.8   29,708  2.7 
    Hotel / motel 58,406  5.1   64,854  5.8   65,475  5.9 
    Nursing Home 12,622  1.1   12,713  1.1   12,852  1.1 
    Warehouse 21,103  1.9   17,724  1.6   17,435  1.6 
    Storage 34,442  3.0   32,990  2.9   33,498  3.0 
    Other non-residential 39,887  3.5   41,310  3.8   32,483  2.8 
    Total non-residential 416,988  36.7   419,417  37.5   385,470  34.5 
                
    Construction/land:           
    One-to-four family residential 35,953  3.2   34,677  3.1   27,817  2.5 
    Multifamily 17,196  1.5   37,194  3.3   58,718  5.3 
    Commercial 6,189  0.5   6,189  0.6   5,837  0.5 
    Land development 15,359  1.4   15,395  1.4   2,173  0.2 
    Total construction/land 74,697  6.6   93,455  8.4   94,545  8.5 
                
    One-to-four family residential:           
    Permanent owner occupied 197,447  17.4   185,320  16.6   199,845  17.9 
    Permanent non-owner occupied 214,784  18.9   199,796  17.8   179,401  16.1 
    Total one-to-four family residential 412,231  36.3   385,116  34.4   379,246  34.0 
                
    Business           
    Aircraft 4,647  0.4   6,079  0.5   9,512  0.8 
    Small Business Administration ("SBA") 816  0.1   839  0.1   906  0.1 
    Paycheck Protection Program ("PPP") 5,181  0.5   10,849  1.0   45,220  4.1 
    Other business 19,902  1.7   28,823  2.5   22,656  2.0 
    Total business 30,546  2.7   46,590  4.1   78,294  7.0 
                
    Consumer           
    Classic, collectible and other auto 38,781  3.4   35,861  3.2   26,488  2.4 
    Other consumer 10,650  0.9   8,951  0.8   12,280  1.1 
    Total consumer 49,431  4.3   44,812  4.0   38,768  3.5 
                
    Total loans 1,136,748  100.0%  1,119,536  100.0%  1,116,391  100.0%
    Less:           
    Deferred loan fees, net 207     418     2,057   
    ALLL 15,159     15,657     15,502   
    Loans receivable, net$1,121,382    $1,103,461    $1,098,832   
                
    Concentrations of credit: (1)           
    Construction loans as % of total capital 51.9%    59.7%    64.0%  
    Total non-owner occupied commercial
    real estate as % of total capital    		 379.6%    384.0%    391.8%  

    (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
     Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
      2022   2021   2021   2021   2021 
     (Dollars in thousands, except per share data)
    Performance Ratios: (1)         
    Return on assets 0.93%  0.76%  0.88%  1.07%  0.73%
    Return on equity 8.33   6.79   7.84   9.54   6.42 
    Dividend payout ratio 33.20   36.67   32.35   27.50   42.31 
    Equity-to-assets ratio 11.15   11.07   11.21   11.30   11.08 
    Tangible equity ratio (2) 11.05   10.97   11.11   11.19   10.97 
    Net interest margin 3.43   3.40   3.33   3.36   3.31 
    Average interest-earning assets to average interest-bearing liabilities 119.59   119.08   119.35   117.99   117.92 
    Efficiency ratio 70.96   68.62   67.26   66.92   70.63 
    Noninterest expense as a percent of average total assets 2.46   2.42   2.30   2.31   2.36 
    Book value per common share$17.32  $17.30  $17.03  $16.75  $16.35 
    Tangible book value per share (2) 17.15   17.13   16.86   16.58   16.17 
              
    Capital Ratios: (3)         
    Tier 1 leverage ratio 10.51%  10.34%  10.19%  10.15%  10.15%
    Common equity tier 1 capital ratio 14.08   14.23   14.25   14.45   14.36 
    Tier 1 capital ratio 14.08   14.23   14.25   14.45   14.36 
    Total capital ratio 15.33   15.48   15.50   15.70   15.62 
              
    Asset Quality Ratios: (4)         
    Nonperforming loans as a percent of total loans 0.02%  0.00%  0.00%  0.00%  0.18%
    Nonperforming assets as a percent of total assets 0.01   0.00   0.00   0.03   0.17 
    ALLL as a percent of total loans 1.33   1.40   1.35   1.35   1.39 
    Net (recoveries) charge-offs to average loans receivable, net (0.00)  0.00   (0.01)  (0.01)  (0.00)
              
    Allowance for Loan Losses:         
    ALLL, beginning of the quarter$15,657  $15,057  $14,878  $15,502  $15,174 
    (Recapture of provision) provision (500)  600   100   (700)  300 
    Charge-offs -   -   -   -   - 
    Recoveries 2   -   79   76   28 
    ALLL, end of the quarter$15,159  $15,657  $15,057  $14,878  $15,502 


    (1)Performance ratios are calculated on an annualized basis.
    (2)Tangible equity excludes goodwill and core deposit intangible assets. Tangible assets exclude goodwill and other intangible assets. The tangible equity ratio and tangible book value per share are non-GAAP financial measures. Refer to Non-GAAP Financial Measures at the end of this press release for a reconciliation to the nearest GAAP equivalents.
    (3)Capital ratios are for First Financial Northwest Bank only.
    (4)Loans are reported net of undisbursed funds.


    FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
    Key Financial Measures (continued)
    (Unaudited)

     At or For the Quarter Ended
     Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
      2022   2021   2021   2021   2021 
     (Dollars in thousands, except per share data)
    Yields and Costs: (1)         
    Yield on loans 4.36%  4.44%  4.54%  4.64%  4.66%
    Yield on investments 1.96   1.79   1.73   1.90   1.92 
    Yield on interest-earning deposits 0.15   0.13   0.14   0.10   0.09 
    Yield on FHLB stock 5.49   5.89   5.15   5.13   5.00 
    Yield on interest-earning assets 3.90%  3.91%  3.93%  4.06%  4.15%
              
    Cost of interest-bearing deposits 0.50%  0.53%  0.63%  0.75%  0.94%
    Cost of borrowings 1.28   1.33   1.42   1.37   1.41 
    Cost of interest-bearing liabilities 0.56%  0.61%  0.71%  0.82%  0.99%
              
    Cost of total deposits 0.44%  0.48%  0.56%  0.68%  0.85%
    Cost of funds 0.51   0.55   0.64   0.75   0.91 
              
    Average Balances:         
    Loans$1,115,428  $1,108,836  $1,094,124  $1,092,710  $1,099,364 
    Investment securities 171,685   178,500   187,261   180,128   158,208 
    Interest-earning deposits 49,857   56,800   68,618   64,035   52,336 
    FHLB stock 5,467   5,726   6,465   6,485   6,412 
    Total interest-earning assets$1,342,437  $1,349,862  $1,356,468  $1,343,358  $1,316,320 
              
    Interest-bearing deposits$1,027,507  $1,032,090  $1,016,540  $1,018,083  $996,295 
    Borrowings 95,000   101,522   120,000   120,494   120,000 
    Total interest-bearing liabilities 1,122,507   1,133,612   1,136,540   1,138,577   1,116,295 
    Noninterest-bearing deposits 122,175   119,142   121,256   110,207   99,013 
    Total deposits and borrowings$1,244,682  $1,252,754  $1,257,796  $1,248,784  $1,215,308 
              
    Average assets$1,424,054  $1,430,199  $1,436,801  $1,424,126  $1,394,213 
    Average stockholders' equity 158,756   160,183   161,892   160,189   157,856 

    (1) Yields and costs are annualized.


    Non-GAAP Financial Measures

    In addition to financial results presented in accordance with generally accepted accounting principles utilized in the United States ("GAAP"), this earnings release contains non-GAAP financial measures that include tangible equity, tangible assets, tangible book value per share, and the tangible equity ratio. The Company believes that these non-GAAP financial measures and ratios as presented are useful for both investors and management to understand the effects of certain items and provides an alternative view of the Company’s performance over time and in comparison to the Company’s competitors. Non-GAAP financial measures have limitations, are not required to be uniformly applied and are not audited. They should not be considered in isolation and are not a substitute for other measures in this earnings release that are presented in accordance with GAAP. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

    The following tables provide a reconciliation between the GAAP and non-GAAP measures:

     Quarter Ended
     Mar 31,
    2022    		 Dec 31,
    2021    		 Sep 30,
    2021    		 Jun 30,
    2021    		 Mar 31,
    2021
     (Dollars in thousands, except per share data)

    Tangible equity to tangible assets and tangible book value per share:

    Total stockholders' equity (GAAP)$157,757  $157,879  $161,456  $161,621  $158,443 
    Less:         
    Goodwill 889   889   889   889   889 
    Core deposit intangible, net 650   684   719   754   789 
    Tangible equity (Non-GAAP)$156,218  $156,306  $159,848  $159,978  $156,765 
              
    Total assets (GAAP)$1,415,054  $1,426,329  $1,440,202  $1,430,703  $1,430,226 
    Less:         
    Goodwill 889   889   889   889   889 
    Core deposit intangible, net 650   684   719   754   789 
    Tangible assets (Non-GAAP)$1,413,515  $1,424,756  $1,438,594  $1,429,060  $1,428,548 
              
    Common shares outstanding at period end 9,107,977   9,125,759   9,483,081   9,651,180   9,692,610 
              
    Equity-to-assets ratio (GAAP) 11.15%  11.07%  11.21%  11.30%  11.08%
    Tangible equity ratio (Non-GAAP) 11.05   10.97   11.11   11.19   10.97 
    Book value per common share (GAAP)$17.32  $17.30  $17.03  $16.75  $16.35 
    Tangible book value per share (Non-GAAP) 17.15   17.13   16.86   16.58   16.17 


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


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