Core Viewpoint - First Financial Northwest, Inc. reported a net income of $1.2 million for Q4 2024, a significant recovery from a net loss of $608,000 in Q3 2024, and consistent with the net income of $1.2 million in Q4 2023. However, the total net income for the year 2024 decreased to $1.1 million from $6.3 million in 2023 [1][6]. Financial Performance - The improved performance in Q4 2024 was primarily due to a $1.3 million recapture of provision for credit losses, contrasting with a provision of $1.6 million in the previous quarter [2]. - Net loans receivable increased by $14.0 million in Q4 2024, totaling $1.14 billion, while nonaccrual loans remained low at $842,000, representing 0.07% of the total loan portfolio of $1.16 billion [3][6]. Deposits and Funding - Total deposits decreased by $36.0 million to $1.13 billion at December 31, 2024, compared to $1.17 billion at September 30, 2024, and a decrease of $62.7 million from $1.19 billion at December 31, 2023. The decline was mainly due to decreases in noninterest-bearing demand deposits and money market deposits [4][7]. - Federal Home Loan Bank (FHLB) advances increased to $110.0 million at December 31, 2024, from $100.0 million at September 30, 2024, but decreased from $125.0 million at December 31, 2023 [5]. Interest Income and Expense - Net interest income for Q4 2024 was $8.4 million, slightly down from $8.5 million in Q3 2024 and $9.3 million in Q4 2023. The decrease was attributed to declines in interest from earning assets [11]. - Total interest income decreased to $19.0 million in Q4 2024 from $19.4 million in Q3 2024 and $20.3 million in Q4 2023, primarily due to a decline in interest income from interest-earning deposits [12][13]. Noninterest Income and Expense - Noninterest income for Q4 2024 totaled $658,000, down from $677,000 in Q3 2024 but up from $633,000 in Q4 2023. The decrease was mainly due to lower loan and deposit-related fees [17]. - Noninterest expense increased to $8.9 million in Q4 2024 from $8.5 million in Q3 2024, primarily due to increased salaries and employee benefits [18]. Capital Ratios - The Bank's Tier 1 leverage and total capital ratios improved to 11.2% and 16.7% respectively at December 31, 2024, compared to 10.9% and 16.7% at September 30, 2024 [6].

Financial Performance - For the three months ended September 30, 2024, net interest margin decreased 23 basis points to 2.46%, compared to 2.69% in the same quarter last year [142]. - Net interest income for the three months ended September 30, 2024, decreased by $1.2 million to $8.5 million compared to $9.7 million for the same period in 2023 [173]. - Net interest income decreased to $26.3 million for the nine months ended September 30, 2024, down from $31.3 million for the same period in 2023, primarily due to an increase in interest expense outpacing interest income [197]. - The company's net interest margin decreased to 2.56% for the nine months ended September 30, 2024, down from 2.91% for the same period in 2023, due to rising interest expenses [202]. - The average yield on interest-earning assets increased due to rising market interest rates, while the average cost of interest-bearing liabilities also increased at a faster pace [142]. Loan Portfolio - During the first nine months of 2024, loan repayments outpaced newly funded loans, resulting in a decrease of $49.8 million in net loans receivable at September 30, 2024 [139]. - The Bank's portfolio at September 30, 2024, included $135.3 million of loans secured by properties in 47 other states and the District of Columbia, with significant concentrations in California, Oregon, Texas, Florida, and Alabama [140]. - Net loans receivable decreased by $49.8 million, or 4.2%, to $1.126 billion at September 30, 2024, reflecting decreases across all loan categories [152]. - Total loans outstanding decreased to $1,142,411 thousand as of September 30, 2024, from $1,183,385 thousand a year earlier [207]. - Approximately 62.1% of the Bank's net loans were adjustable-rate loans as of September 30, 2024 [234]. Credit Losses and Allowance - The allowance for credit losses (ACL) is an estimate of expected credit losses, which may increase as the loan portfolio grows or due to increased probable losses [143]. - The allowance for credit losses (ACL) increased by $959,000 to $16.3 million at September 30, 2024, representing 1.42% of total loans receivable, up from 1.29% at December 31, 2023 [157]. - A provision for credit losses of $1.2 million was recorded for the nine months ended September 30, 2024, compared to a recapture of $208,000 for the same period in 2023 [205]. - The provision for credit losses was $1.6 million, with $1.5 million allocated to loans and $75,000 to unfunded commitments, primarily related to two participation loans totaling $6.0 million [188]. Deposits and Assets - As of September 30, 2024, total assets decreased by $53.996 million, or 3.6%, to $1.451 billion from $1.505 billion as of December 31, 2023 [148]. - Total deposits decreased by $26.8 million to $1.17 billion as of September 30, 2024, primarily due to a $116.7 million decrease in brokered deposits, money market accounts, savings accounts, and interest-bearing demand accounts [162]. - Interest-earning deposits with banks increased by $50.746 million, or 229.2%, to $72.884 million at September 30, 2024, compared to $22.138 million at December 31, 2023 [148]. Noninterest Income and Expenses - Noninterest income is generated from various loan and deposit fees, wealth management services, and other income, which may be offset by net gains or losses on investment securities [144]. - Noninterest income remained stable at $677,000 for both the three months ended September 30, 2024, and September 30, 2023 [189]. - Noninterest expense decreased by $282,000 to $8.5 million for the three months ended September 30, 2024, compared to $8.8 million in the same period last year [192]. - Noninterest expense increased by $531,000 to $27.8 million for the nine months ended September 30, 2024, from $27.2 million in 2023 [210]. - The largest increase in noninterest expense was in professional fees, which rose by $778,000 due to acquisition-related expenses [210]. Capital and Equity - Stockholders' equity decreased to $160.2 million at September 30, 2024, from $161.7 million at December 31, 2023, due to a net loss of $128,000 and cash dividends of $2.4 million [169]. - Total stockholders' equity was $160.2 million as of September 30, 2024 [225]. - The Bank's total capital to risk-weighted assets ratio was 16.68% and Tier 1 capital to total assets was 10.86% as of September 30, 2024 [225]. - The Bank's capital conservation buffer was 8.68% as of September 30, 2024, exceeding the required minimum of 2.5% [225]. Interest Rate Risk - Interest rate risk is identified as the most significant market risk for the Bank, influenced by the maturity differences between loans and deposits [229]. - An immediate increase of 400 basis points in interest rates would result in a decrease of net interest income by $33,891 thousand, or 7.36% [239]. - The base net interest income was $36,585 thousand, with a potential increase of 1.23% if rates decreased by 100 basis points [239]. - The Bank's asset/liability management policy aims to maximize interest rate spread while maintaining acceptable levels of liquidity and capital adequacy [227]. Strategic Initiatives - The Bank is actively processing SBA loans through a partner while retaining credit decisions, aiming to become a preferred SBA lender as volumes increase [141]. - The Bank's strategic initiatives focus on diversifying the loan portfolio and broadening growth opportunities within current risk tolerance levels [140].

Financial Performance - The Company reported a net loss of $608,000, or $(0.07) per diluted share, for Q3 2024, compared to net income of $1.6 million, or $0.17 per diluted share, in Q2 2024[1]. - Net interest income for the quarter was $8.5 million, compared to $9.0 million for the previous quarter and $9.7 million for the same quarter last year[15]. - Net interest income after provision for credit losses decreased by 25.0% quarter-over-quarter to $6,879,000, and by 31.2% year-over-year[29]. - Noninterest income for the quarter totaled $677,000, slightly up from $673,000 in the previous quarter and unchanged from the same quarter last year[21]. - Noninterest expense increased to $8.5 million for the quarter ended September 30, 2024, compared to $7.9 million in the prior quarter and $8.8 million in the same period last year[22]. - The net loss for Q3 2024 was $608,000, representing a significant decline of 139.1% from a net income of $1,555,000 in Q2 2024[29]. Loan and Credit Quality - A provision for credit losses of $1.6 million was recorded, primarily related to two participation loans totaling $6.0 million classified as "substandard" since March 2022[2]. - Nonaccrual loans totaled $853,000, representing only 0.07% of the total loan portfolio of $1.14 billion, indicating strong credit quality[3]. - Nonaccrual loans decreased to $853,000 at September 30, 2024, from $4.7 million at June 30, 2024, and $201,000 at September 30, 2023[14]. - The allowance for credit losses (ACL) represented 1.42% of total loans receivable at September 30, 2024, compared to 1.29% at both June 30, 2024, and September 30, 2023[13]. - The allowance for credit losses (ACL) increased to $16,265,000 from $14,796,000 in Q2 2024[30]. - Nonaccrual loans as a percent of total loans improved to 0.07% in September 2024 from 0.41% in June 2024[31]. Deposits and Funding - Total deposits increased by $79.2 million to $1.17 billion at September 30, 2024, driven by an $81.9 million increase in retail certificates of deposit[7]. - Total deposits reached $1.17 billion as of September 30, 2024, a slight decrease from $1.18 billion at June 30, 2024, and $1.17 billion at September 30, 2023[12]. - Advances from the FHLB decreased to $100.0 million at September 30, 2024, down from $176.0 million at June 30, 2024, due to increased deposits[8]. - The average cost of interest-bearing deposits rose to 3.80% for the quarter ended September 30, 2024, up from 3.71% in the previous quarter[18]. - The cost of interest-bearing deposits increased to 3.80% from 3.71% in the previous quarter[32]. - The cost of total deposits increased to 3.47% from 3.38% in the previous quarter[32]. Capital and Equity - The Bank's Tier 1 leverage and total capital ratios were 10.9% and 16.7% respectively at September 30, 2024, showing improvement from the previous year[5]. - Total stockholders' equity as of September 30, 2024, was $160,213,000, a decrease of 0.3% from the previous quarter but an increase of 0.6% year-over-year[28]. - Tier 1 capital ratio remained stable at 15.43% in September 2024 compared to 14.75% in September 2023[31]. - Total capital ratio slightly increased to 16.68% in September 2024 from 16.00% in September 2023[31]. - The equity-to-assets ratio (GAAP) was 11.04%, slightly down from 11.10% in the previous quarter[34]. Asset Management - Total assets as of September 30, 2024, were $1,451,086,000, a slight increase of 0.2% from the previous quarter but a decrease of 4.9% year-over-year[26]. - Loans receivable net of allowance decreased to $1,126,146,000, down 0.8% from the previous quarter and 3.6% year-over-year[26]. - The loan portfolio totaled $1,142,411,000, a decrease of 0.6% from Q2 2024 and a decrease of 3.5% year-over-year[30]. - Average loans stood at $1,131,473 thousand, a slight decrease from $1,139,017 thousand in the prior quarter[32]. - Total interest-earning assets amounted to $1,365,573 thousand, up from $1,355,792 thousand in the previous quarter[32]. Interest Income and Expense - Total interest income was $19.4 million for the quarter, slightly up from $19.3 million in the previous quarter but down from $19.7 million a year ago[16]. - Total interest expense increased to $11.0 million for the quarter, compared to $10.3 million for the previous quarter and $10.0 million for the same quarter last year[18]. - The average yield on interest-earning assets decreased by 7 basis points to 5.66% during the quarter ended September 30, 2024[20]. - The average cost of interest-bearing liabilities increased by 13 basis points to 3.72% during the quarter[20]. - Yield on loans decreased to 5.86% during the recent quarter from 5.93% for the quarter ended June 30, 2024, but increased from 5.73% a year ago[17]. Future Transactions - The Company is preparing for a pending transaction with Global Federal Credit Union, awaiting final approval from the National Credit Union Administration[4]. - The company is in a pending transaction with Global Federal Credit Union to acquire substantially all of the assets and assume substantially all of the liabilities of the Bank[24].

Core Insights - First Financial Northwest (FFNW) reported a quarterly loss of $0.07 per share, matching the Zacks Consensus Estimate, compared to earnings of $0.16 per share a year ago, indicating a significant decline in performance [1] - The company posted revenues of $9.13 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 3.78% and down from $10.38 million year-over-year [2] - The stock has increased approximately 68.8% since the beginning of the year, outperforming the S&P 500's gain of 22.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $9.48 million, and for the current fiscal year, it is $0.24 on revenues of $38.31 million [7] - The estimate revisions trend for First Financial is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [6] Industry Context - The Banks - West industry, to which First Financial belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [8] - Another company in the same industry, First Northwest Bancorp (FNWB), is expected to report a quarterly earnings decline of 82.1% year-over-year, with revenues projected at $17.2 million, down 3.6% from the previous year [9]

Core Viewpoint - First Financial Northwest, Inc. reported a net loss of $608,000 for Q3 2024, a significant decline from net income of $1.6 million in Q2 2024 and $1.5 million in Q3 2023, primarily due to a $1.6 million provision for credit losses [1][2]. Financial Performance - The net loss for the quarter was attributed to a $1.6 million provision for credit losses, mainly related to two participation loans totaling $6.0 million classified as "substandard" since March 2022 [2][3]. - For the nine months ended September 30, 2024, the Company reported a net loss of $128,000 compared to net income of $5.1 million for the same period in 2023 [1]. - Net interest income decreased to $8.5 million for Q3 2024, down from $9.0 million in Q2 2024 and $9.7 million in Q3 2023 [13]. - Total interest income was $19.4 million for Q3 2024, slightly up from $19.3 million in Q2 2024 but down from $19.7 million in Q3 2023 [14]. Credit Quality - The allowance for credit losses (ACL) represented 1.42% of total loans receivable as of September 30, 2024, compared to 1.29% at both June 30, 2024, and September 30, 2023 [11]. - Nonaccrual loans totaled $853,000 at September 30, 2024, a decrease from $4.7 million at June 30, 2024, and $201,000 at September 30, 2023 [12]. Deposits and Advances - Total deposits increased to $1.17 billion at September 30, 2024, from $1.09 billion at June 30, 2024, primarily due to an increase in retail certificates of deposit [5]. - Advances from the Federal Home Loan Bank (FHLB) decreased to $100.0 million at September 30, 2024, down from $176.0 million at June 30, 2024 [6]. Capital Ratios - The Bank's Tier 1 leverage and total capital ratios were 10.9% and 16.7% at September 30, 2024, compared to 10.9% and 16.6% at June 30, 2024 [4]. Operational Developments - The Company is preparing for a pending transaction with Global Federal Credit Union, awaiting final approval from the National Credit Union Administration [4].

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5 6 7 8 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------------------------|-------|------------------|-------|-----------|---------------------|--------------------------------------------------------|-------|--------------------------|-------|----------------| | (1) Yields and Costs: | | Jun 30, 2024 | | Mar 2024 | or For \n(Dollars | the Quarter \nDec 31, 2023 \n in thousands) | | Ended \nSep 30, 2023 | | J ...

Jun 30, 2024 Mar 31, 2024 June 30, 2023 Three Month One Year "During the second quarter, our financial results were positively impacted by the successful completion of a project to modify a large number of loans relating to our previously announced sale of the Bank to Global Federal Credit Union. Specifically, our balance sheet contained over $250 million of loans that are ineligible for a federally chartered credit union like Global to hold due to various aspects, primarily an original term greater than 15 ...

Group 1 - Monteverde & Associates PC is investigating First Financial Northwest, Inc. regarding its proposed merger with Global Federal Credit Union [1] - Under the merger agreement, First Financial Northwest shareholders will receive cash distributions totaling approximately $23.06 to $23.59 per share of common stock [1] - The shareholder vote for the merger is scheduled for July 19, 2024 [5] Group 2 - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2018-2022 ISS Securities Class Action Services Report [1] - The firm has a successful track record in recovering money for shareholders through class action lawsuits [3]

Group 1 - First Financial Northwest (FFNW) is a commercial bank based in Renton, Washington, operating 14 full-service banking offices in the Puget Sound Region. The Zacks Consensus Estimate for its current year earnings has been revised downward by approximately 28.6% over the last 60 days [1] - Legal & General Group (LGGNY) is a prominent UK risk, savings, and investment group. The Zacks Consensus Estimate for its current year earnings has been revised downward by 7.6% over the last 60 days [2] - Nordson (NDSN) is a leading manufacturer and distributor of products and systems for dispensing, applying, and controlling adhesives, coatings, polymers, sealants, biomaterials, and other fluids. The Zacks Consensus Estimate for its current year earnings has been revised downward by 6.6% over the last 60 days [3]