RENTON, Wash., Jan. 25, 2018 (GLOBE NEWSWIRE) -- First Financial Northwest, Inc. (the 'Company') (NASDAQ:FFNW), the holding company for First Financial Northwest Bank (the 'Bank'), today reported net income for the quarter ended December 31, 2017, of $2.4 million, or $0.23 per diluted share, compared to net income of $1.9 million, or $0.18 per diluted share, for the quarter ended September 30, 2017, and $3.0 million, or $0.29 per diluted share, for the quarter ended December 31, 2016. For the year ended December 31, 2017, net income was $8.5 million, or $0.81 per diluted share, compared to $8.9 million, or $0.74 per diluted share, for the year ended December 31, 2016.
Net loans receivable increased to $988.7 million for the quarter ended December 31, 2017, compared to $931.9 million at September 30, 2017, and $815.0 million at December 31, 2016. For the year ended December 31, 2017, net loans receivable increased $173.7 million to $988.7 million, from $815.0 million at December 31, 2016. Internally generated growth was supplemented through loan purchases of $77.9 million during the year. During the year ended December 31, 2017, the Bank purchased $49.5 million in one-to-four family residential and multifamily real estate loans secured by properties located in the states of Washington, Oregon and California, $25.2 million in commercial real estate loans with primarily single tenants located predominantly in the eastern half of the United States, and $3.2 million in aircraft loans. The average balance of net loans receivable totaled $963.1 million for the quarter ended December 31, 2017, compared to $879.1 million for the quarter ended September 30, 2017, and $845.3 million for the quarter ended December 31, 2016. For the year ended December 31, 2017, the average balance of net loans receivable was $878.4 million, compared to $765.9 million for the year ended December 31, 2016.
The Company had a $1.2 million recapture of provision for loan losses in the quarter ended December 31, 2017, compared to a provision for loan losses of $500,000 in the quarter ended September 30, 2017, and a recapture of provision of $100,000 in the quarter ended December 31, 2016. The recapture of provision in the quarter ended December 31, 2017, was due primarily to $2.0 million in recoveries during the quarter of amounts previously charged off, reduced by the provision for loan losses required as a result of the growth in net loans receivable, while the provision in the quarter ended September 30, 2017, was due primarily to the growth in net loans receivable, reduced by recoveries received on loans previously charged off. The recapture of provision in the quarter ended December 31, 2016, was due to a reduction in net loans receivable during that quarter. For the year ended December 31, 2017, the recapture of provision for loan losses totaled $400,000, compared to a provision for loan losses of $1.3 million recorded for the year ended December 31, 2016.
Following the passing of the U.S. Tax Cuts and Jobs Act of 2017 (the 'Tax Act'), the Company elected to restructure a portion of its investment portfolio. Specifically, the Company sold approximately $37 million in securities at a loss of $670,000. The investments sold were all fixed rate securities, with the proceeds reinvested primarily into adjustable rate securities. Also relating to passage of the Tax Act, the Company recorded a charge of $807,000 through its federal income tax provision relating to changes to the Company's net deferred tax asset valuation as a result of the new lower enacted tax rates.
'I am very pleased with how we finished the year with two consecutive quarters of significant growth in loans and deposits,' stated Joseph W. Kiley III, President and Chief Executive Officer. 'Specifically, net loans receivable increased $56.8 million in the fourth quarter, following $70.2 million growth in the third quarter. Organic loan growth was supplemented by loan purchases totaling $25.4 million in the fourth quarter and $52.4 million in the third quarter. For the year, net loans receivable increased $173.7 million, a 21.3% increase over prior year end figures. Deposits at year end were $839.5 million, compared to $717.5 million at December 31, 2016. This $122.0 million in deposit growth during 2017 reflects the acquisition of approximately $75.0 million in deposits from the four branches acquired in August 2017.'
As previously reported, the Bank expanded its geographic footprint during the year with the opening of a new branch in the Crossroads area of Bellevue, Washington, and with the acquisition of four branches from Opus Bank (the 'Branch Acquisition') that closed on August 25, 2017. These branches are located in Woodinville, Clearview, Lake Stevens, and Smokey Point, Washington. In connection with the Branch Acquisition, First Financial Northwest Bank acquired approximately $75.0 million in customer deposits. These deposits at the date of acquisition consisted of approximately 31% checking accounts, 48% savings and money market accounts, and 21% in certificates of deposit, with an average cost of funds of 0.58%. The Bank did not acquire any loans as part of the Branch Acquisition. In addition, a de novo branch office to be located at The Junction in Bothell, Washington is scheduled to open in the first quarter of 2018.
The following tables present an analysis of our total deposits by branch office (unaudited):
| December 31, 2017 | ||||||||||||||||||||||
|
Noninterest- bearing demand |
Interest- bearing demand |
Statement savings |
Money market |
Certificates of deposit, retail |
Certificates of deposit, brokered | Total | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||
| King County: | ||||||||||||||||||||||
| Renton | $ | 30,005 | $ | 18,099 | $ | 25,095 | $ | 225,714 | $ | 298,819 | $ | - | $ | 597,732 | ||||||||
| The Landing | 2,634 | 405 | 44 | 11,555 | 7,807 | - | 22,445 | |||||||||||||||
| Woodinville (1) | 1,904 | 3,124 | 685 | 20,527 | 7,072 | - | 33,312 | |||||||||||||||
| Crossroads | 606 | 5,413 | 81 | 13,831 | 945 | - | 20,876 | |||||||||||||||
| Total King County | 35,149 | 27,041 | 25,905 | 271,627 | 314,643 | - | 674,365 | |||||||||||||||
| Snohomish County: | ||||||||||||||||||||||
| Mill Creek | 1,721 | 2,931 | 355 | 14,325 | 5,652 | - | 24,984 | |||||||||||||||
| Edmonds | 1,300 | 1,119 | 30 | 17,576 | 4,932 | - | 24,957 | |||||||||||||||
| Clearview (1) | 3,960 | 3,631 | 1,247 | 7,009 | 1,724 | - | 17,571 | |||||||||||||||
| Lake Stevens (1) | 1,466 | 1,266 | 475 | 2,829 | 2,608 | - | 8,644 | |||||||||||||||
| Smokey Point (1) | 1,838 | 2,236 | 444 | 5,270 | 3,705 | - | 13,493 | |||||||||||||||
| Total Snohomish County | 10,285 | 11,183 | 2,551 | 47,009 | 18,621 | - | 89,649 | |||||||||||||||
| Total retail deposits | 45,434 | 38,224 | 28,456 | 318,636 | 333,264 | - | 764,014 | |||||||||||||||
| Brokered deposits | - | - | - | - | - | 75,488 | 75,488 | |||||||||||||||
| Total deposits | $ | 45,434 | $ | 38,224 | $ | 28,456 | $ | 318,636 | $ | 333,264 | $ | 75,488 | $ | 839,502 | ||||||||
(1) Balance of retail certificates of deposit for acquired branches are net of an aggregate fair value adjustment of $107,000.
| September 30, 2017 | |||||||||||||||||||||||
|
Noninterest- bearing demand |
Interest- bearing demand |
Statement savings |
Money market |
Certificates of deposit, retail |
Certificates of deposit, brokered | Total | |||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| King County: | |||||||||||||||||||||||
| Renton | $ | 31,071 | $ | 17,016 | $ | 25,717 | $ | 202,896 | $ | 311,728 | $ | - | $ | 588,428 | |||||||||
| The Landing | 1,148 | 442 | 39 | 11,778 | 6,279 | - | 19,686 | ||||||||||||||||
| Woodinville (1) | 3,104 | 3,151 | 613 | 19,454 | 7,124 | - | 33,446 | ||||||||||||||||
| Crossroads | 163 | 147 | 1 | 8,890 | 630 | - | 9,831 | ||||||||||||||||
| Total King County | 35,486 | 20,756 | 26,370 | 243,018 | 325,761 | - | 651,391 | ||||||||||||||||
| Snohomish County: | |||||||||||||||||||||||
| Mill Creek | 1,192 | 2,079 | 751 | 11,719 | 5,443 | - | 21,184 | ||||||||||||||||
| Edmonds | 1,441 | 1,226 | 31 | 16,581 | 6,556 | - | 25,835 | ||||||||||||||||
| Clearview (1) | 5,865 | 3,713 | 1,329 | 7,138 | 1,946 | - | 19,991 | ||||||||||||||||
| Lake Stevens (1) | 1,914 | 1,444 | 535 | 2,833 | 2,680 | - | 9,406 | ||||||||||||||||
| Smokey Point (1) | 1,754 | 2,372 | 409 | 4,171 | 3,739 | - | 12,445 | ||||||||||||||||
| Total Snohomish County | 12,166 | 10,834 | 3,055 | 42,442 | 20,364 | - | 88,861 | ||||||||||||||||
| Total retail deposits | 47,652 | 31,590 | 29,425 | 285,460 | 346,125 | - | 740,252 | ||||||||||||||||
| Brokered deposits | - | - | - | - | - | 75,488 | 75,488 | ||||||||||||||||
| Total deposits | $ | 47,652 | $ | 31,590 | $ | 29,425 | $ | 285,460 | $ | 346,125 | $ | 75,488 | $ | 815,740 | |||||||||
(1) Balance of retail certificates of deposit for acquired branches are net of an aggregate fair value adjustment of $122,000.
Highlights for the year ended December 31, 2017:
- Net loans receivable increased $173.7 million, or 21.3% during the year, to $988.7 million at December 31, 2017, from $815.0 million at December 31, 2016.
- The Bank acquired four branch offices and opened a fifth during 2017, more than doubling the number of branch offices from four to nine. A tenth new branch office located at The Junction in Bothell is scheduled to open during the first quarter of 2018.
- Deposits increased $122.0 million during the year, to $839.5 million at December 31, 2017, a 17.0% increase from $717.5 million at December 31, 2016. Excluding certificates of deposits, deposit balances increased $145.4 million during the year.
- The Company paid all of its 140 non-executive employees a one-time $1,000 after-tax bonus in response to the signing of the Tax Act.
- During the year ended December 31, 2017, the Company repurchased 326,800 shares of its common stock at an average price of $15.99 per share under a stock repurchase plan authorized by the Board of Directors on May 22, 2017. The plan, which expired on November 30, 2017, authorized the repurchase of up to 1.1 million shares of the Company's common stock, or 10% of its outstanding shares.
- The Company's book value per share was $13.27 at December 31, 2017, compared to $13.08 at September 30, 2017, and $12.63 at December 31, 2016.
- The Bank's Tier 1 leverage and total capital ratios at December 31, 2017, were 10.2% and 13.8%, respectively, compared to 10.8% and 14.2% at September 30, 2017, and 11.2% and 15.6% at December 31, 2016.
Based on management's evaluation of the adequacy of the Allowance for Loan and Lease Losses ('ALLL'), there was a $1.2 million recapture of provision for loan losses during the quarter ended December 31, 2017. The following items contributed to the recapture of provision during the quarter:
- The Bank received recoveries on loans previously charged off totaling $2.0 million, decreasing the provision necessary to support the Company's net loan growth. Approximately $1.8 million of these recoveries related to repayment of loans previously charged off for a single customer. As of December 31, 2017, this customer had approximately $465,000 remaining under contract to be repaid in balances previously charged off. The Bank has one additional customer with approximately $3.9 million in balances previously charged off under contract to be repaid. In the fourth quarter of 2017, the Bank entered into an agreement with this customer relating to the repayment of said balances. The Bank is unable to predict the timing of these repayments. Payments made by these borrowers will result in recoveries that will reduce the amounts necessary to set aside as provisions for loan losses in the periods that repayments are received.
- The Company's net loans receivable increased $56.8 million during the quarter to $988.7 million at December 31, 2017, from $931.9 million at September 30, 2017, and was $815.0 million at December 31, 2016.
- Delinquent loans (loans over 30 days past due) remained low at $101,000 at December 31, 2017, compared to $84,000 at September 30, 2017, and $473,000 at December 31, 2016.
- Nonperforming loans totaled $179,000 at December 31, 2017, compared to $185,000 at September 30, 2017, and $858,000 at December 31, 2016.
- Nonperforming loans as a percentage of total loans remained low at 0.02% at both December 31, 2017, and September 30, 2017, compared to 0.10% at December 31, 2016.
The ALLL represented 1.28% of total loans receivable, net of undisbursed funds, at both December 31, 2017, and September 30, 2017, compared to 1.32% at December 31, 2016. Nonperforming assets totaled $662,000 at December 31, 2017, compared to $2.0 million at September 30, 2017, and $3.2 million at December 31, 2016. The 79.2% decline in the Company's nonperforming assets from the prior year was primarily due to sales of other real estate owned ('OREO'), market value adjustments of OREO, and a reduction in nonperforming loans.
The following table presents a breakdown of our nonperforming assets (unaudited):
| Dec 31, | Sep 30, | Dec 31, |
Three Month |
One Year | |||||||||||||||
| 2017 | 2017 | 2016 | Change | Change | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||
| Nonperforming loans: | |||||||||||||||||||
| One-to-four family residential | $ | 128 | $ | 132 | $ | 798 | $ | (4 | ) | $ | (670 | ) | |||||||
| Consumer | 51 | 53 | 60 | (2 | ) | (9 | ) | ||||||||||||
| Total nonperforming loans | 179 | 185 | 858 | (6 | ) | (679 | ) | ||||||||||||
| OREO | 483 | 1,825 | 2,331 | (1,342 | ) | (1,848 | ) | ||||||||||||
| Total nonperforming assets (1) | $ | 662 | $ | 2,010 | $ | 3,189 | $ | (1,348 | ) | $ | (2,527 | ) | |||||||
| Nonperforming assets as a | |||||||||||||||||||
| percent of total assets | 0.05 | % | 0.17 | % | 0.31 | % | |||||||||||||
(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 our TDRs were performing in accordance with their restructured terms at December 31, 2017.
OREO totaled $483,000 at December 31, 2017, compared to $1.8 million at September 30, 2017, and $2.3 million at December 31, 2016, primarily due to sales of properties and, to a lesser extent, market value adjustments of OREO. We continue to actively market our two remaining OREO properties in an effort to minimize holding costs.
In circumstances where a customer is experiencing significant financial difficulties, the Company may elect to restructure the loan so the customer can continue to make payments while minimizing the potential loss to the Company. Such restructures must be classified as TDRs.
The following table presents a breakdown of our TDRs (unaudited):
|
Dec 31, 2017 |
Sep 30, 2017 |
Dec 31, 2016 |
Three Month Change |
One Year Change | ||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Nonperforming TDRs: | ||||||||||||||||
| One-to-four family residential | $ | - | $ | - | $ | 174 | $ | - | $ | (174 | ) | |||||
| Total nonperforming TDRs | - | - | 174 | - | (174 | ) | ||||||||||
| Performing TDRs: | ||||||||||||||||
| One-to-four family residential | 13,434 | 15,174 | 24,274 | (1,740 | ) | (10,840 | ) | |||||||||
| Multifamily | 1,134 | 1,140 | 1,564 | (6 | ) | (430 | ) | |||||||||
| Commercial real estate | 3,194 | 3,216 | 4,202 | (22 | ) | (1,008 | ) | |||||||||
| Consumer | 43 | 43 | 43 | 0 | 0 | |||||||||||
| Total performing TDRs | 17,805 | 19,573 | 30,083 | (1,768 | ) | (12,278 | ) | |||||||||
| Total TDRs | $ | 17,805 | $ | 19,573 | $ | 30,257 | $ | (1,768 | ) | $ | (12,452 | ) | ||||
Net interest income for the quarter ended December 31, 2017, increased to $10.4 million, compared to $9.4 million for the quarter ended September 30, 2017, and $9.3 million for the quarter ended December 31, 2016, due primarily to the growth in the average balance of net loans outstanding between periods. For the year ended December 31, 2017, net interest income totaled $37.6 million, compared to $34.2 million for the year ended December 31, 2016.
Total interest income increased to $13.3 million during the quarter ended December 31, 2017, compared to $12.0 million in the quarter ended September 30, 2017, and $11.4 million in the quarter ended December 31, 2016. For the year ended December 31, 2017, total interest income increased to $47.6 million compared to $41.7 million in 2016. These increases were due primarily to the growth in the average balances of net loans receivable to $963.1 million for the quarter ended December 31, 2017, compared to $845.3 million for the same period in 2016, and $879.1 million for the quarter ended September 30, 2017. For the year ended December 31, 2017, the average balance of net loans receivable was $878.4 million compared to $765.9 million for the prior year. Additional information related to average balances is provided in 'Key Financial Measures' below.
Total interest expense increased to $2.9 million for the quarter ended December 31, 2017, compared to $2.6 million for the quarter ended September 30, 2017, and $2.1 million for the quarter ended December 31, 2016. The higher level of interest expense in the quarter ended December 31, 2017, was due to increases in average deposits and borrowings outstanding, and in short term market interest rates, which adversely impacted the rates paid on our liabilities, many of which are short term in nature. For the year ended December 31, 2017, total interest expense totaled $10.0 million, compared to $7.5 million for the year ended December 31, 2016. This increase was due to the increase in average balances of outstanding interest bearing liabilities and the increase in short term market interest rates experienced in 2017. Advances from the FHLB totaled $216.0 million at December 31, 2017, compared to $191.5 million at September 30, 2017, and $171.5 million at December 31, 2016, as the Company borrowed from the FHLB to support its loan growth. The average cost of FHLB advances was 1.46% for the quarter ended December 31, 2017, compared to 1.40% for the quarter ended September 30, 2017, and 0.83% for the quarter ended December 31, 2016. For the year ended December 31, 2017, the average cost of FHLB advances was 1.30%, compared to 0.86% for the prior year. The balance of brokered certificates of deposits was unchanged at $75.5 million at December 31, 2017, September 30, 2017, and December 31, 2016.
The following table presents a breakdown of our total deposits (unaudited):
|
Dec 31, 2017 |
Sep 30, 2017 |
Dec 31, 2016 |
Three Month Change |
One Year Change | ||||||||||||
| Deposits: | (Dollars in thousands) | |||||||||||||||
| Noninterest-bearing | $ | 45,434 | $ | 47,652 | $ | 33,422 | $ | (2,218 | ) | $ | 12,012 | |||||
| Interest-bearing demand | 38,224 | 31,590 | 18,532 | 6,634 | 19,692 | |||||||||||
| Statement savings | 28,456 | 29,425 | 28,383 | (969 | ) | 73 | ||||||||||
| Money market | 318,636 | 285,460 | 204,998 | 33,176 | 113,638 | |||||||||||
| Certificates of deposit, retail (1) | 333,264 | 346,125 | 356,653 | (12,861 | ) | (23,389 | ) | |||||||||
| Certificates of deposit, brokered | 75,488 | 75,488 | 75,488 | - | - | |||||||||||
| Total deposits | $ | 839,502 | $ | 815,740 | $ | 717,476 | $ | 23,762 | $ | 122,026 | ||||||
(1) Balance of retail certificates of deposit for acquired branches are net of an aggregate fair value adjustment of $107,000 at December 31, 2017, and $122,000 at September 30, 2017.
Our net interest margin was 3.65% for the quarter ended December 31, 2017, compared to 3.53% for the quarter ended September 30, 2017, and 3.65% for the quarter ended December 31, 2016. The increase in the quarter ended December 31, 2017, from the prior quarter, was influenced by payments received from one borrower on amounts previously charged off. In addition to recognizing the recoveries on amounts previously charged off, the Company recorded $436,000 in additional interest related to these payments during the quarter. Net interest margin for the year ended December 31, 2017, was 3.60%, unchanged from the prior year period.
Noninterest income for the quarter ended December 31, 2017, totaled $211,000, compared to $731,000 in the quarter ended September 30, 2017, and $790,000 in the quarter ended December 31, 2016. The decreases were due primarily to the $670,000 loss on sale of investments due to our portfolio restructuring at year end, as discussed earlier. For the year ended December 31, 2017, noninterest income declined to $2.2 million, from $2.7 million in 2016, primarily due to the loss on sales of securities related to portfolio restructuring.
Noninterest expense for the quarter ended December 31, 2017, increased to $7.1 million from $6.8 million in the quarter ended September 30, 2017, and $5.9 million in the quarter ended December 31, 2016. The quarter ended December 31, 2017, was the first full quarter that included the Bank's entire nine branch offices, as the four offices included in the Branch Acquisition were acquired on August 25, 2017. Noninterest expense increased to $26.8 million for the year ended December 31, 2017, compared to $22.9 million in 2016. The increase in noninterest expense compared to the year ago period was due primarily to the growth of the Company's operations, increases in salaries and employee benefits which were mainly a result of standard salary increases and increased staffing as a result of our de novo branches, the Branch Acquisition and the development of new products, as well as increased occupancy and one-time equipment expenses related to converting the Bank's ATM processing system and continuing to upgrade the original branch location to better serve the Bank's customers' needs. The Company also recognized the acquisition costs related to the Branch Acquisition, such as system conversion costs, consulting, legal fees, and marketing and advertising costs over the last year. Expenses related to the Branch Acquisition totaled $690,000 for the year ended December 31, 2017, compared to none in the year ended December 31, 2016. As a result of the Branch Acquisition, the Bank recognized a core deposit intangible ('CDI') of $1.3 million, which represents the fair value of the acquired deposits. The CDI will be amortized over ten years into noninterest expense, with amortization expense of $38,000 recognized for the quarter ended December 31, 2017, and $53,000 for the year ended December 31, 2017.
The efficiency ratio improved to 66.69% for the quarter ended December 31, 2017, compared to 67.64% for the quarter ended September 30, 2017, but increased from 57.96% for the quarter ended December 31, 2016. For the year, the efficiency ratio increased to 67.31% in 2017, compared to 62.27% in 2016, primarily as a result of the greater number of locations and employees to support the Company's growth strategy.
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 nine full-service banking offices. We are a part of the ABA NASDAQ Community Bank Index and the Russell 3000 Index. 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. 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: increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; 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 2018 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)
| Assets |
Dec 31, 2017 |
Sep 30, 2017 |
Dec 31, 2016 |
Three Month Change |
One Year Change | ||||||||||||
| Cash on hand and in banks | $ | 9,189 | $ | 7,910 | $ | 5,779 | 16.2 | % | 59.0 | % | |||||||
| Interest-earning deposits | 6,942 | 14,093 | 25,573 | (50.7 | ) | (72.9 | ) | ||||||||||
| Investments available-for-sale, at fair value | 132,242 | 137,847 | 129,260 | (4.1 | ) | 2.3 | |||||||||||
|
Loans receivable, net of allowance of $12,882, $12,110, and $10,951, respectively | 988,662 | 931,862 | 815,043 | 6.1 | 21.3 | ||||||||||||
| Premises and equipment, net | 20,614 | 20,568 | 18,461 | 0.2 | 11.7 | ||||||||||||
| Federal Home Loan Bank ('FHLB') stock, at cost | 9,882 | 8,902 | 8,031 | 11.0 | 23.0 | ||||||||||||
| Accrued interest receivable | 4,084 | 3,709 | 3,147 | 10.1 | 29.8 | ||||||||||||
| Deferred tax assets, net | 1,211 | 2,381 | 3,142 | (49.1 | ) | (61.5 | ) | ||||||||||
| Other real estate owned ('OREO') | 483 | 1,825 | 2,331 | (73.5 | ) | (79.3 | ) | ||||||||||
| Bank owned life insurance ('BOLI'), net | 29,027 | 28,894 | 24,153 | 0.5 | 20.2 | ||||||||||||
| Prepaid expenses and other assets | 5,738 | 3,304 | 2,664 | 73.7 | 115.4 | ||||||||||||
| Goodwill | 889 | 979 | - | (9.2 | ) | n/a | |||||||||||
| Core deposit intangible | 1,266 | 1,304 | - | (2.9 | ) | n/a | |||||||||||
| Total assets | $ | 1,210,229 | $ | 1,163,578 | $ | 1,037,584 | 4.0 | % | 16.6 | % | |||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||
| Deposits | |||||||||||||||||
| Noninterest-bearing deposits | $ | 45,434 | $ | 47,652 | $ | 33,422 | (4.7 | )% | 35.9 | % | |||||||
| Interest-bearing deposits | 794,068 | 768,088 | 684,054 | 3.4 | 16.1 | ||||||||||||
| Total deposits | 839,502 | 815,740 | 717,476 | 2.9 | 17.0 | ||||||||||||
| Advances from the FHLB | 216,000 | 191,500 | 171,500 | 12.8 | 25.9 | ||||||||||||
|
Advance payments from borrowers for taxes and insurance | 2,515 | 4,267 | 2,259 | (41.1 | ) | 11.3 | |||||||||||
| Accrued interest payable | 326 | 280 | 231 | 16.4 | 41.1 | ||||||||||||
| Other liabilities | 9,252 | 11,031 | 7,993 | (16.1 | ) | 15.8 | |||||||||||
| Total liabilities | 1,067,595 | 1,022,818 | 899,459 | 4.4 | % | 18.7 | % | ||||||||||
| 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 | |||||||||||||||||
|
10,748,437 shares at December 31, 2017, 10,763,915 shares at September 30, 2017 and | |||||||||||||||||
| 10,938,251 shares at December 31, 2016 | 107 | 108 | 109 | (0.9 | )% | (1.8 | )% | ||||||||||
| Additional paid-in capital | 94,173 | 94,168 | 96,852 | 0.0 | (2.8 | ) | |||||||||||
| Retained earnings, substantially restricted (1) | 54,683 | 52,984 | 48,981 | 3.2 | 11.6 | ||||||||||||
| Accumulated other comprehensive loss, net of tax (1) | (969 | ) | (857 | ) | (1,328 | ) | 13.1 | (27.0 | ) | ||||||||
| Unearned Employee Stock Ownership Plan ('ESOP') shares | (5,360 | ) | (5,643 | ) | (6,489 | ) | (5.0 | ) | (17.4 | ) | |||||||
| Total stockholders' equity | 142,634 | 140,760 | 138,125 | 1.3 | 3.3 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 1,210,229 | $ | 1,163,578 | $ | 1,037,584 | 4.0 | % | 16.6 | % | |||||||
(1) Included in accumulated other comprehensive loss is a $41,000 net gain related to the tax effects on items included in accumulated other comprehensive income (referred to as stranded tax effects) resulting from the Tax Act that may be reclassified to retained earnings if the Financial Accounting Standards Board approves the proposed accounting standard on this topic.
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
Consolidated Income Statements
(Dollars in thousands, except share data)
(Unaudited)
| Quarter Ended | |||||||||||||||||
|
Dec 31, 2017 |
Sep 30, 2017 |
Dec 31, 2016 |
Three Month Change |
One Year Change | |||||||||||||
| Interest income | |||||||||||||||||
| Loans, including fees | $ | 12,269 | $ | 10,959 | $ | 10,476 | 12.0 | % | 17.1 | % | |||||||
| Investments available-for-sale | 903 | 869 | 830 | 3.9 | 8.8 | ||||||||||||
| Interest-earning deposits with banks | 43 | 108 | 37 | (60.2 | ) | 16.2 | |||||||||||
| Dividends on FHLB Stock | 85 | 67 | 66 | 26.9 | 28.8 | ||||||||||||
| Total interest income | 13,300 | 12,003 | 11,409 | 10.8 | 16.6 | ||||||||||||
| Interest expense | |||||||||||||||||
| Deposits | 2,117 | 1,933 | 1,632 | 9.5 | 29.7 | ||||||||||||
| FHLB advances and other borrowings | 795 | 695 | 473 | 14.4 | 68.1 | ||||||||||||
| Total interest expense | 2,912 | 2,628 | 2,105 | 10.8 | 38.3 | ||||||||||||
| Net interest income | 10,388 | 9,375 | 9,304 | 10.8 | 11.7 | ||||||||||||
| (Recapture of provision) provision for loan losses | (1,200 | ) | 500 | (100 | ) | (340.0 | ) | 1,100.0 | |||||||||
|
Net interest income after (recapture of provision) provision for loan losses | 11,588 | 8,875 | 9,404 | 30.6 | 23.2 | ||||||||||||
| Noninterest income | |||||||||||||||||
| Net (loss) gain on sale of investments | (670 | ) | 47 | 17 | (1,525.5 | ) | (4,041.2 | ) | |||||||||
| BOLI income | 133 | 173 | 203 | (23.1 | ) | (34.5 | ) | ||||||||||
| Wealth management revenue | 220 | 252 | 157 | (12.7 | ) | 40.1 | |||||||||||
| Deposit related fees | 169 | 113 | 70 | 49.6 | 141.4 | ||||||||||||
| Loan related fees | 356 | 144 | 340 | 147.2 | 4.7 | ||||||||||||
| Other | 3 | 2 | 3 | 50.0 | 0.0 | ||||||||||||
| Total noninterest income | 211 | 731 | 790 | (71.1 | ) | (73.3 | ) | ||||||||||
| Noninterest expense | |||||||||||||||||
| Salaries and employee benefits | 4,673 | 4,406 | 3,941 | 6.1 | 18.6 | ||||||||||||
| Occupancy and equipment | 721 | 726 | 521 | (0.7 | ) | 38.4 | |||||||||||
| Professional fees | 430 | 458 | 492 | (6.1 | ) | (12.6 | ) | ||||||||||
| Data processing | 326 | 372 | 211 | (12.4 | ) | 54.5 | |||||||||||
| OREO related reimbursements, net | (81 | ) | (6 | ) | (5 | ) | 1,250.0 | 1,520.0 | |||||||||
| Regulatory assessments | 161 | 122 | 101 | 32.0 | 59.4 | ||||||||||||
| Insurance and bond premiums | 97 | 105 | 89 | (7.6 | ) | 9.0 | |||||||||||
| Marketing | 68 | 102 | 49 | (33.3 | ) | 38.8 | |||||||||||
| Other general and administrative | 674 | 551 | 451 | 22.3 | 49.4 | ||||||||||||
| Total noninterest expense | 7,069 | 6,836 | 5,850 | 3.4 | 20.8 | ||||||||||||
| Income before federal income tax provision | 4,730 | 2,770 | 4,344 | 70.8 | 8.9 | ||||||||||||
| Federal income tax provision | 2,324 | 909 | 1,323 | 155.7 | 75.7 | ||||||||||||
| Net income | $ | 2,406 | $ | 1,861 | $ | 3,021 | 29.3 | % | (20.4 | )% | |||||||
| Basic earnings per share | $ | 0.24 | $ | 0.18 | $ | 0.29 | |||||||||||
| Diluted earnings per share | $ | 0.23 | $ | 0.18 | $ | 0.29 | |||||||||||
|
Weighted average number of common shares outstanding | 10,184,804 | 10,287,663 | 10,357,634 | ||||||||||||||
|
Weighted average number of diluted shares outstanding | 10,313,114 | 10,427,038 | 10,527,669 | ||||||||||||||
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
Consolidated Income Statements
(Dollars in thousands, except share data)
(Unaudited)
| Year Ended December 31, | ||||||||||||||||
| 2017 | 2016 | 2015 |
One Year Change |
Two Year Change | ||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 43,607 | $ | 38,218 | $ | 34,612 | 14.1 | % | 26.0 | % | ||||||
| Investments available-for-sale | 3,504 | 3,054 | 2,242 | 14.7 | 56.3 | |||||||||||
| Interest-earning deposits with banks | 237 | 235 | 274 | 0.9 | (13.5 | ) | ||||||||||
| Dividends on FHLB Stock | 296 | 202 | 69 | 46.5 | 329.0 | |||||||||||
| Total interest income | 47,644 | 41,709 | 37,197 | 14.2 | 28.1 | |||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 7,517 | 6,101 | 5,478 | 23.2 | 37.2 | |||||||||||
| FHLB advances | 2,505 | 1,406 | 1,273 | 78.2 | 96.8 | |||||||||||
| Total interest expense | 10,022 | 7,507 | 6,751 | 33.5 | 48.5 | |||||||||||
| Net interest income | 37,622 | 34,202 | 30,446 | 10.0 | 23.6 | |||||||||||
| (Recapture of provision) provision for loan losses | (400 | ) | 1,300 | (2,200 | ) | (130.8 | ) | (81.8 | ) | |||||||
|
Net interest income after (recapture of provision) provision for loan losses | 38,022 | 32,902 | 32,646 | 15.6 | 16.5 | |||||||||||
| Noninterest income | ||||||||||||||||
| Net (loss) gain on sale of investments | (567 | ) | 50 | 92 | (1,234.0 | ) | (716.3 | ) | ||||||||
| BOLI | 623 | 844 | 533 | (26.2 | ) | 16.9 | ||||||||||
| Wealth management revenue | 919 | 813 | 183 | 13.0 | 402.2 | |||||||||||
| Deposit related fees | 446 | 261 | 208 | 70.9 | 114.4 | |||||||||||
| Loan related fees | 776 | 671 | 151 | 15.6 | 413.9 | |||||||||||
| Other | 11 | 12 | 112 | (8.3 | ) | (90.2 | ) | |||||||||
| Total noninterest income | 2,208 | 2,651 | 1,279 | (16.7 | ) | 72.6 | ||||||||||
| Noninterest expense | ||||||||||||||||
| Salaries and employee benefits | 17,773 | 15,377 | 13,940 | 15.6 | 27.5 | |||||||||||
| Occupancy and equipment | 2,506 | 1,984 | 1,440 | 26.3 | 74.0 | |||||||||||
| Professional fees | 1,809 | 1,979 | 1,631 | (8.6 | ) | 10.9 | ||||||||||
| Data processing | 1,457 | 911 | 759 | 59.9 | 92.0 | |||||||||||
| OREO related (reimbursements) expenses, net | (67 | ) | 294 | (484 | ) | (122.8 | ) | (86.2 | ) | |||||||
| Regulatory assessments | 491 | 420 | 470 | 16.9 | 4.5 | |||||||||||
| Insurance and bond premiums | 399 | 349 | 359 | 14.3 | 11.1 | |||||||||||
| Marketing | 270 | 194 | 211 | 39.2 | 28.0 | |||||||||||
| Other general and administrative | 2,171 | 1,441 | 1,552 | 50.7 | 39.9 | |||||||||||
| Total noninterest expense | 26,809 | 22,949 | 19,878 | 16.8 | 34.9 | |||||||||||
| Income before federal income tax provision | 13,421 | 12,604 | 14,047 | 6.5 | (4.5 | ) | ||||||||||
| Federal income tax provision | 4,942 | 3,712 | 4,887 | 33.1 | 1.1 | |||||||||||
| Net income | $ | 8,479 | $ | 8,892 | 9,160 | (4.6 | )% | (7.4 | )% | |||||||
| Basic earnings per share | $ | 0.82 | $ | 0.75 | $ | 0.67 | ||||||||||
| Diluted earnings per share | $ | 0.81 | $ | 0.74 | $ | 0.67 | ||||||||||
|
Weighted average number of common shares outstanding | 10,289,049 | 11,868,278 | 13,528,393 | |||||||||||||
|
Weighted average number of diluted shares outstanding | 10,437,449 | 12,028,428 | 13,685,982 | |||||||||||||
The following table presents a breakdown of our loan portfolio (unaudited):
| December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||
| (Dollars in thousands) | |||||||||||||||
| Commercial real estate: | |||||||||||||||
| Residential: | |||||||||||||||
| Micro-unit apartments | $ | 7,020 | 0.6 | % | $ | 7,053 | 0.7 | % | $ | 7,878 | 0.9 | % | |||
| Other multifamily | 177,882 | 16.3 | 166,628 | 16.1 | 115,372 | 12.8 | |||||||||
| Total multifamily | 184,902 | 16.9 | 173,681 | 16.8 | 123,250 | 13.7 | |||||||||
| Non-residential: | |||||||||||||||
| Office | 112,327 | 10.2 | 99,350 | 9.6 | 101,688 | 11.3 | |||||||||
| Retail | 129,875 | 11.9 | 101,787 | 9.8 | 106,294 | 11.8 | |||||||||
| Mobile home park | 19,970 | 1.8 | 21,344 | 2.1 | 20,689 | 2.3 | |||||||||
| Warehouse | 22,701 | 2.1 | 22,788 | 2.2 | 15,338 | 1.7 | |||||||||
| Storage | 32,201 | 2.9 | 32,365 | 3.1 | 34,816 | 3.9 | |||||||||
| Other non-residential | 44,768 | 4.1 | 42,782 | 4.1 | 24,869 | 2.8 | |||||||||
| Total non-residential | 361,842 | 33.0 | 320,416 | 30.9 | 303,694 | 33.8 | |||||||||
| Construction/land development: | |||||||||||||||
| One-to-four family residential | 87,404 | 8.0 | 85,593 | 8.3 | 67,842 | 7.5 | |||||||||
| Multifamily | 108,439 | 9.9 | 115,345 | 11.1 | 111,051 | 12.3 | |||||||||
| Commercial | 5,325 | 0.5 | 5,325 | 0.5 | - | 0.0 | |||||||||
| Land | 36,405 | 3.3 | 38,423 | 3.7 | 30,055 | 3.3 | |||||||||
| Total construction/land development | 237,573 | 21.7 | 244,686 | 23.6 | 208,948 | 23.1 | |||||||||
| One-to-four family residential: | |||||||||||||||
| Permanent owner occupied | 148,304 | 13.6 | 139,736 | 13.5 | 137,834 | 15.3 | |||||||||
| Permanent non-owner occupied | 130,351 | 11.9 | 126,711 | 12.2 | 111,601 | 12.4 | |||||||||
| Total one-to-four family residential | 278,655 | 25.5 | 266,447 | 25.7 | 249,435 | 27.7 | |||||||||
| Business: | |||||||||||||||
| Aircraft | 12,491 | 1.1 | 11,317 | 1.1 | 366 | 0.0 | |||||||||
| Other business | 10,596 | 1.0 | 10,926 | 1.0 | 7,572 | 0.9 | |||||||||
| Total business | 23,087 | 2.1 | 22,243 | 2.1 | 7,938 | 0.9 | |||||||||
| Consumer | 9,133 | 0.8 | 9,301 | 0.9 | 6,922 | 0.8 | |||||||||
| Total loans | 1,095,192 | 100.0 | % | 1,036,774 | 100.0 | % | 900,187 | 100.0 | % | ||||||
| Less: | |||||||||||||||
| Loans in Process ('LIP') | 92,498 | 91,316 | 72,026 | ||||||||||||
| Deferred loan fees, net | 1,150 | 1,486 | 2,167 | ||||||||||||
| ALLL | 12,882 | 12,110 | 10,951 | ||||||||||||
| Loans receivable, net | $ | 988,662 | $ | 931,862 | $ | 815,043 | |||||||||
| Concentrations of credit: (1) | |||||||||||||||
| Construction loans as % of total capital | 108.6 | % | 114.4 | % | 105.9 | % | |||||||||
| Total non-owner occupied commercial | |||||||||||||||
| real estate as % of total capital | 514.0 | % | 478.9 | % | 428.8 | % | |||||||||
(1) Concentrations of credit percentages are for First Financial Northwest Bank only using classifications in accordance with FDIC guidelines
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
Key Financial Measures
| At or For the Quarter Ended | |||||||||||||||||||
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | |||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Performance Ratios: | |||||||||||||||||||
| Return on assets | 0.80 | % | 0.66 | % | 0.70 | % | 0.91 | % | 1.12 | % | |||||||||
| Return on equity | 6.70 | 5.13 | 5.22 | 6.76 | 8.58 | ||||||||||||||
| Dividend payout ratio | 29.17 | 38.89 | 38.89 | 26.09 | 20.62 | ||||||||||||||
| Equity-to-assets ratio | 11.79 | 12.10 | 13.27 | 13.37 | 13.31 | ||||||||||||||
| Interest rate spread | 3.51 | 3.38 | 3.47 | 3.51 | 3.53 | ||||||||||||||
| Net interest margin | 3.65 | 3.53 | 3.60 | 3.64 | 3.65 | ||||||||||||||
|
Average interest-earning assets to average interest- bearing liabilities | 113.32 | 114.08 | 114.29 | 114.74 | 113.75 | ||||||||||||||
| Efficiency ratio | 66.69 | 67.64 | 70.27 | 64.57 | 57.96 | ||||||||||||||
|
Noninterest expense as a percent of average total assets | 2.34 | 2.42 | 2.57 | 2.35 | 2.17 | ||||||||||||||
| Book value per common share | $ | 13.27 | $ | 13.08 | $ | 13.00 | $ | 12.84 | $ | 12.63 | |||||||||
| Capital Ratios: (1) | |||||||||||||||||||
| Tier 1 leverage ratio | 10.20 | % | 10.80 | % | 11.46 | % | 11.57 | % | 11.17 | % | |||||||||
| Common equity tier 1 capital ratio | 12.52 | 12.95 | 13.94 | 14.40 | 14.38 | ||||||||||||||
| Tier 1 capital ratio | 12.52 | 12.95 | 13.94 | 14.40 | 14.38 | ||||||||||||||
| Total capital ratio | 13.77 | 14.20 | 15.19 | 15.65 | 15.63 | ||||||||||||||
| Asset Quality Ratios: (2) | |||||||||||||||||||
| Nonperforming loans as a percent of total loans | 0.02 | % | 0.02 | % | 0.07 | % | 0.07 | % | 0.10 | % | |||||||||
| Nonperforming assets as a percent of total assets | 0.05 | 0.17 | 0.22 | 0.27 | 0.31 | ||||||||||||||
| ALLL as a percent of total loans | 1.28 | 1.28 | 1.29 | 1.31 | 1.32 | ||||||||||||||
| ALLL as a percent of nonperforming loans | 7,196.65 | 6,545.95 | 1,935.68 | 1,853.49 | 1,276.34 | ||||||||||||||
|
(Recoveries) charge-offs, net to average loans receivable, net | (0.20 | ) | (0.04 | ) | (0.00 | ) | (0.00 | ) | (0.01 | ) | |||||||||
| Allowance for Loan Losses: | |||||||||||||||||||
| ALLL, beginning of the quarter | $ | 12,110 | $ | 11,285 | $ | 11,158 | $ | 10,951 | $ | 11,006 | |||||||||
| (Recapture of provision) provision | (1,200 | ) | 500 | 100 | 200 | (100 | ) | ||||||||||||
| Charge-offs | - | - | - | - | (37 | ) | |||||||||||||
| Recoveries | 1,972 | 325 | 27 | 7 | 82 | ||||||||||||||
| ALLL, end of the quarter | $ | 12,882 | $ | 12,110 | $ | 11,285 | $ | 11,158 | $ | 10,951 | |||||||||
(1) Capital ratios are for First Financial Northwest Bank only.
(2) Loans are reported net of undisbursed funds.
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
Key Financial Measures (continued)
| At or For the Quarter Ended | ||||||||||||||||||||||
| Dec 31, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | ||||||||||||||||||
| 2017 | 2017 | 2017 | 2017 | 2016 | ||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||||
| Yields and Costs: | ||||||||||||||||||||||
| Yield on loans | 5.05 | % | 4.95 | % | 4.91 | % | 4.93 | % | 4.92 | % | ||||||||||||
| Yield on investments available-for-sale | 2.52 | 2.59 | 2.69 | 2.66 | 2.49 | |||||||||||||||||
| Yield on interest-earning deposits | 1.23 | 1.27 | 1.00 | 0.74 | 0.59 | |||||||||||||||||
| Yield on FHLB stock | 3.42 | 2.91 | 2.89 | 4.14 | 2.57 | |||||||||||||||||
| Yield on interest-earning assets | 4.67 | 4.51 | 4.54 | 4.52 | 4.47 | |||||||||||||||||
| Cost of deposits | 1.08 | 1.05 | 1.03 | 1.00 | 0.97 | |||||||||||||||||
| Cost of borrowings | 1.46 | 1.40 | 1.24 | 1.05 | 0.83 | |||||||||||||||||
| Cost of interest-bearing liabilities | 1.16 | 1.13 | 1.07 | 1.01 | 0.94 | |||||||||||||||||
| Average Balances: | ||||||||||||||||||||||
| Loans | $ | 963,097 | $ | 879,075 | $ | 844,853 | $ | 825,251 | $ | 845,276 | ||||||||||||
| Investments available-for-sale | 141,962 | 132,959 | 132,375 | 128,993 | 132,077 | |||||||||||||||||
| Interest-earning deposits | 13,843 | 33,854 | 16,831 | 24,233 | 25,082 | |||||||||||||||||
| FHLB stock | 9,859 | 9,126 | 8,616 | 8,034 | 10,205 | |||||||||||||||||
| Total interest-earning assets | $ | 1,128,761 | $ | 1,055,014 | $ | 1,002,675 | $ | 986,511 | $ | 1,012,640 | ||||||||||||
| Deposits | $ | 780,671 | $ | 727,702 | $ | 692,922 | $ | 688,298 | $ | 664,416 | ||||||||||||
| Borrowings | 215,418 | 197,098 | 184,357 | 171,500 | 225,848 | |||||||||||||||||
| Total interest-bearing liabilities | $ | 996,089 | $ | 924,800 | $ | 877,279 | $ | 859,798 | $ | 890,264 | ||||||||||||
| Average assets | $ | 1,199,774 | $ | 1,120,176 | $ | 1,066,477 | $ | 1,046,473 | $ | 1,071,597 | ||||||||||||
| Average stockholders' equity | $ | 142,390 | $ | 143,975 | $ | 143,643 | $ | 140,546 | $ | 139,658 | ||||||||||||
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
Key Financial Measures (continued)
| At or For the Year Ended December 31, | |||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Performance Ratios: | |||||||||||||||||||
| Return on assets | 0.76 | % | 0.88 | % | 0.96 | % | 1.17 | % | 2.73 | % | |||||||||
| Return on equity | 5.94 | 5.55 | 5.15 | 5.85 | 13.12 | ||||||||||||||
| Dividend payout ratio | 32.93 | 32.02 | 35.57 | 27.73 | 8.11 | ||||||||||||||
| Equity-to-assets | 11.79 | 13.31 | 17.42 | 19.36 | 20.02 | ||||||||||||||
| Interest rate spread | 3.47 | 3.47 | 3.23 | 3.62 | 3.49 | ||||||||||||||
| Net interest margin | 3.60 | 3.60 | 3.38 | 3.77 | 3.68 | ||||||||||||||
|
Average interest-earning assets to average interest-bearing liabilities | 114.07 | 117.11 | 120.45 | 121.15 | 121.77 | ||||||||||||||
| Efficiency ratio | 67.31 | 62.27 | 62.66 | 56.37 | 66.08 | ||||||||||||||
|
Noninterest expense as a percent of average total assets | 2.42 | 2.27 | 2.07 | 2.03 | 2.36 | ||||||||||||||
| Book value per common share | $ | 13.27 | $ | 12.63 | $ | 12.40 | $ | 11.96 | $ | 11.25 | |||||||||
| Capital Ratios:(1) | |||||||||||||||||||
| Tier 1 leverage ratio | 10.20 | % | 11.17 | % | 11.61 | % | 11.79 | % | 18.60 | % | |||||||||
| Common equity tier 1 capital ratio | 12.52 | 14.38 | 16.36 | n/a | n/a | ||||||||||||||
| Tier 1 capital ratio | 12.52 | 14.38 | 16.36 | 18.30 | 27.18 | ||||||||||||||
| Total capital ratio | 13.77 | 15.63 | 17.62 | 19.56 | 28.44 | ||||||||||||||
| Asset Quality Ratios:(2) | |||||||||||||||||||
| Nonperforming loans as a percent of total loans | 0.02 | % | 0.10 | % | 0.16 | % | 0.20 | % | 0.59 | % | |||||||||
| Nonperforming assets as a percent of total assets | 0.05 | 0.31 | 0.48 | 1.13 | 1.68 | ||||||||||||||
| ALLL as a percent of total loans | 1.28 | 1.32 | 1.36 | 1.55 | 1.91 | ||||||||||||||
| ALLL as a percent of nonperforming loans | 7,196.65 | 1,276.34 | 872.17 | 783.50 | 325.26 | ||||||||||||||
|
(Recoveries) charge-offs, net to average loans receivable, net | (0.27 | ) | (0.02 | ) | (0.18 | ) | 0.06 | (0.08 | ) | ||||||||||
| Allowance for Loan Losses: | |||||||||||||||||||
| ALLL, beginning of the year | $ | 10,951 | $ | 9,463 | $ | 10,491 | $ | 12,994 | $ | 12,542 | |||||||||
| (Recapture of provision) provision | (400 | ) | 1,300 | (2,200 | ) | (2,100 | ) | (100 | ) | ||||||||||
| Charge-offs | - | (83 | ) | (362 | ) | (642 | ) | (1,596 | ) | ||||||||||
| Recoveries | 2,331 | 271 | 1,534 | 239 | 2,148 | ||||||||||||||
| ALLL, end of the year | $ | 12,882 | $ | 10,951 | $ | 9,463 | $ | 10,491 | $ | 12,994 | |||||||||
(1) Capital ratios are for First Financial Northwest Bank only.
(2) Loans are reported net of undisbursed funds.
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
Key Financial Measures (continued)
| At or For the Year Ended December 31, | |||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Yields and Costs: | |||||||||||||||||||
| Yield on loans | 4.96 | % | 4.99 | % | 5.18 | % | 5.37 | % | 5.54 | % | |||||||||
| Yield on investments available-for-sale | 2.61 | 2.31 | 1.84 | 1.74 | 1.49 | ||||||||||||||
| Yield on interest-earning deposits | 1.07 | 0.52 | 0.26 | 0.25 | 0.26 | ||||||||||||||
| Yield on FHLB stock | 3.32 | 2.62 | 1.06 | 0.10 | 0.04 | ||||||||||||||
| Yield on interest-earning assets | 4.57 | % | 4.39 | % | 4.13 | % | 4.50 | % | 4.58 | % | |||||||||
| Cost of deposits | 1.04 | % | 0.94 | % | 0.89 | % | 0.87 | % | 1.09 | % | |||||||||
| Cost of borrowings | 1.30 | 0.86 | 0.95 | 0.91 | 1.08 | ||||||||||||||
| Cost of interest-bearing liabilities | 1.10 | % | 0.92 | % | 0.90 | % | 0.88 | % | 1.09 | % | |||||||||
| Average Balances: | |||||||||||||||||||
| Loans | $ | 878,449 | $ | 765,948 | $ | 667,739 | $ | 675,353 | $ | 653,238 | |||||||||
| Investments available-for-sale | 134,105 | 132,372 | 121,893 | 131,474 | 150,507 | ||||||||||||||
| Interest-earning deposits | 22,194 | 45,125 | 104,476 | 46,776 | 30,749 | ||||||||||||||
| FHLB stock | 8,914 | 7,714 | 6,527 | 6,899 | 7,170 | ||||||||||||||
| Total interest-earning assets | $ | 1,043,662 | $ | 951,159 | $ | 900,635 | $ | 860,502 | $ | 841,664 | |||||||||
| Deposits | $ | 722,666 | $ | 648,324 | $ | 614,185 | $ | 581,435 | $ | 623,392 | |||||||||
| Borrowings | 192,227 | 163,893 | 133,527 | 128,839 | 67,796 | ||||||||||||||
| Total interest-bearing liabilities | $ | 914,893 | $ | 812,217 | $ | 747,712 | $ | 710,274 | $ | 691,188 | |||||||||
| Average assets | $ | 1,108,656 | $ | 1,010,243 | $ | 958,154 | $ | 910,448 | $ | 895,118 | |||||||||
| Average stockholders' equity | $ | 142,647 | $ | 160,192 | $ | 177,904 | $ | 182,598 | $ | 186,537 | |||||||||
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
Source: First Financial Northwest, Inc.
First Financial Northwest Inc. published this content on 25 January 2018 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 25 January 2018 14:24:02 UTC.
Original documenthttp://www.snl.com/irweblinkx/file.aspx?IID=4087275&FID=391893074
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