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Joseph W. Kiley III, President and Chief Executive Officer
Rich Jacobson, Executive Vice President and Chief Financial Officer
First Financial Northwest, Inc.
Reports Net Income of $2.7 million or $0.29 per Diluted Share for the Fourth Quarter and
$12.2 Million or $1.29 per Diluted Share for the Year Ended December 31, 2021
Renton, Washington – January 27, 2022 - 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, 2021, of $2.7 million, or $0.29 per diluted share, compared to $3.2 million, or $0.34 per diluted share, for the quarter ended September 30,
2021, and $2.6 million, or $0.28 per diluted share, for the quarter ended December 31, 2020. For the year ended December 31, 2021, net income was $12.2 million, or $1.29 per diluted share, compared to net income of $8.6 million, or $0.88 per diluted
share, for the year ended December 31, 2020.
“The final quarter of 2021 showed continued improvement in our funding base, with our average cost of funds declining to 0.55% from
0.64% in the quarter ended September 30, 2021, and 1.07% in the quarter ended December 31, 2020,” stated Joseph W. Kiley, III, President and CEO. “If market interest rates remain low, we expect this decline to continue as we have approximately $145.3
million in retail certificates of deposit at a weighted average rate of 0.99% maturing in the next 12 months, and an additional $96.0 million maturing in the subsequent 12 to 24 months, at a weighted average rate of 1.72%. In the event that the
Federal Reserve raises interest rates, the impact of repricing maturing CDs may be less significant than in the current low rate environment, but still favorable to our interest expense on CDs, although, as previously disclosed, the Bank’s interest
rate profile is slightly asset sensitive and currently not anticipated to change,” continued Kiley.
“I was pleased to see continued loan growth despite $11.5 million in Paycheck Protection Program loan repayments and forgiveness. In
addition, for the second consecutive quarter we had no nonperforming assets,” concluded Kiley.
Changes in the provision for loan losses were the primary contributors to the change in net income for the quarter ended December 31,
2021, compared to the quarter ended September 30, 2021. The Company recorded a $600,000 provision for loan losses in the quarter ended December 31, 2021, compared to a $100,000 provision for loan losses in the quarter ended September 30, 2021, and a
provision for loan losses of $600,000 in the quarter ended December 31, 2020. The provision for loan losses in the quarter ended December 31, 2021, was due primarily to the growth in loans receivable, excluding the reduction in Paycheck Protection
Program (“PPP”) loan balances that do not require an allowance for loan and lease losses (“ALLL”) due to their government guarantees. Credit downgrades on two relationships, both relating to commercial real estate loans secured by office buildings in
King County that are either experiencing or are expected to have increased vacancies, also contributed to the fluctuation in the provision. Uncertainties about the timing to fill the current and expected vacancies resulted in the downgrades for both
relationships. One loan in the amount of $4.7 million was