First Financial Northwest, Inc. Reports Net Income of $1.5 Million or $0.16 per Diluted Share for the Second Quarter Ended June 30, 2023  

RENTON, Washington, July 27, 2023 (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 June 30, 2023, of $1.5 million, or $0.16 per diluted share, compared to $2.1 million, or $0.23 per diluted share, for the quarter ended March 31, 2023, and $2.8 million, or $0.31 per diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, net income was $3.6 million, or $0.39 per diluted share, compared to net income of $6.1 million, or $0.66 per diluted share, for the comparable six-month period in 2022.

“The Bank first opened for business in July 1923, and we are honoring our 100 years of service to the community in several ways. We hosted events with customers, prospects and business associates and held community events at designated branches during the quarter. We expanded our social media outreach to highlight our exceptional history of delivering personalized financial services that provide unique, innovative solutions to our customers, including a video interview spotlighting H. A. “Harry” Blencoe, who served as Chairman of the Board and CEO from 1961 to 2005 and who celebrated his 99^th birthday earlier this year. We also distributed tokens of our appreciation to our largest loan and deposit customers, as well as to each of our employees, as a special thank you for their continued support during the Bank’s 100-year anniversary,” stated Joseph W. Kiley III, President and CEO.

“Our financial results were affected during the quarter as a result of recognizing $419,200 in legal, accounting and other fees related to the unsuccessful negotiation of a potential business combination with another financial institution. Despite our best efforts, the parties were unable to come to a mutual agreement on the terms of merger,” stated Kiley.

“Credit quality at June 30, 2023, remained strong, with nonperforming assets totaling just $201,000 and additional loan delinquencies of only $175,000 on total loans receivable of $1.2 billion. A reduction in loans receivable during the quarter and a credit upgrade to a $2.1 million commercial real estate loan allowed the Company to recognize a $400,000 recapture of its provision for credit losses during the quarter,” continued Kiley.

“Competition for deposits continues to adversely impact our cost of funds. We continue to work to grow deposits throughout our branch network and are thankful for our loyal customer base. Our level of uninsured deposits was reduced to 21.5% at quarter end, down from 23.6% of deposits at March 31, 2023 and 27.4% at the end of 2022. I am truly appreciative of the efforts of our employees in assisting customers to maximize the coverage on their deposits,” concluded Kiley.

Highlights for the quarter ended June 30, 2023:

• The Company paid a regular quarterly cash dividend to shareholders of $0.13 per share.
• The Bank’s Tier 1 leverage and total capital ratios were 10.0% and 15.8% at June 30, 2023, compared to 10.2% and 15.6% at March 31, 2023, and 10.5% and 15.5% at June 30, 2022, respectively.
• Credit quality remained strong with nonperforming assets of $201,000, or 0.01% of total assets.
• Based on management’s evaluation of the adequacy of the Allowance for Credit Losses (“ACL”) at June 30, 2023, the Company recognized a $400,000 recapture of provision for credit losses during the quarter.

Deposits totaled $1.22 billion at June 30, 2023, compared to $1.23 billion at March 31, 2023, and $1.18 billion at June 30, 2022. Total deposits decreased $2.2 million in the quarter ended June 30, 2023, compared to the quarter ended March 31, 2023. We continued to see customers shift funds from money market accounts into retail certificates of deposit, with the $16.5 million decrease in money market balances more than offset by the $27.0 million increase in retail certificates of deposit. The primary reason for the slight reduction in deposits during the quarter was our decision to reduce our balances of brokered deposits by $15.0 million. At June 30, 2023, the Company held $43.0 million in interest-earning deposits that can be used to fund loan growth or further reduce brokered deposits and/or other wholesale liabilities in future periods, compared to $71.0 million at March 31, 2023, and $26.2 million at June 30, 2022.

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

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