Washington
|
001-3365
|
26-0610707
|
||
State or other jurisdiction of
incorporation
|
Commission
File Number
|
(I.R.S. Employer
Identification No.)
|
||
201 Wells Avenue South, Renton, Washington
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98057
|
|||
(Address of principal executive offices)
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(Zip Code)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
|
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(17 CFR 240.14d-2(b))
|
[ ]
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
|
|
(17 CFR 240.13e-4 (c))
|
FIRST FINANCIAL NORTHWEST, INC. | |
DATE: April 23, 2012 | By: /s/Kari Stenslie |
Kari Stenslie | |
Chief Financial Officer |
For more information, contact:
Victor Karpiak, President and Chief Executive Officer
Kari Stenslie, Chief Financial Officer
(425) 255-4400
|
·
|
The Consent Order (“Order”) was terminated by the Federal Deposit Insurance Corporation (“FDIC”) and the Washington State Department of Financial Institutions (“DFI”) effective March 27, 2012 and replaced with a Memorandum of Understanding (“MOU”), which is an informal regulatory action with the FDIC and DFI;
|
·
|
Nonperforming assets decreased $905,000 to $48.8 million at March 31, 2012 from December 31, 2011 and decreased $33.5 million, or 40.7%, from March 31, 2011;
|
·
|
Sales of other real estate owned (“OREO”) totaled $5.1 million during the quarter, generating a net gain on sales of $221,000;
|
·
|
Net interest margin increased to 3.11% for the quarter ended March 31, 2012 from 2.96% for the quarter ended December 31, 2011, as compared to 3.09% for the quarter ended March 31, 2011;
|
·
|
Net gain on sales of investments during the quarter totaled $194,000;
|
·
|
The Bank’s Tier 1 and total risk-based capital ratios at March 31, 2012 were 14.28% and 25.46%, respectively.
|
March 31,
|
One Year
|
|||||||||||
2012
|
2011
|
Increase/(Decrease)
|
||||||||||
(In thousands)
|
||||||||||||
Nonperforming TDRs:
|
||||||||||||
One-to-four family residential
|
$ | 2,999 | $ | 3,946 | $ | (947 | ) | |||||
Commercial real estate
|
462 | 3,400 | (2,938 | ) | ||||||||
Construction/land development
|
183 | 4,003 | (3,820 | ) | ||||||||
Total nonperforming TDRs
|
3,644 | 11,349 | (7,705 | ) | ||||||||
Performing TDRs:
|
||||||||||||
One-to-four family residential
|
51,643 | 52,805 | (1,162 | ) | ||||||||
Multifamily
|
2,496 | 2,508 | (12 | ) | ||||||||
Commercial real estate
|
11,347 | 10,422 | 925 | |||||||||
Consumer
|
70 | 70 | - | |||||||||
Total performing TDRs
|
65,556 | 65,805 | (249 | ) | ||||||||
Total TDRs
|
$ | 69,200 | $ | 77,154 | $ | (7,954 | ) |
Three Month
|
One Year
|
|||||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
Increase /
|
Increase /
|
||||||||||||||||
2012
|
2011
|
2011
|
(Decrease)
|
(Decrease)
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Nonperforming loans:
|
||||||||||||||||||||
One-to-four family residential
|
$ | 8,691 | $ | 9,808 | $ | 15,652 | $ | (1,117 | ) | $ | (6,961 | ) | ||||||||
Multifamily
|
949 | 949 | 700 | - | 249 | |||||||||||||||
Commercial real estate
|
7,588 | 3,736 | 11,104 | 3,852 | (3,516 | ) | ||||||||||||||
Construction/land development
|
8,991 | 9,199 | 23,485 | (208 | ) | (14,494 | ) | |||||||||||||
Consumer
|
164 | - | 145 | 164 | 19 | |||||||||||||||
Total nonperforming loans
|
26,383 | 23,692 | 51,086 | 2,691 | (24,703 | ) | ||||||||||||||
OREO
|
22,448 | 26,044 | 31,266 | (3,596 | ) | (8,818 | ) | |||||||||||||
Total nonperforming assets
|
$ | 48,831 | $ | 49,736 | $ | 82,352 | $ | (905 | ) | $ | (33,521 | ) | ||||||||
Nonperforming assets as a percent
|
||||||||||||||||||||
of total assets
|
4.71 | % | 4.69 | % | 6.96 | % |
County
|
Number of
|
Percent of
|
||||||||||||||||||||||||||
King
|
Pierce
|
Kitsap
|
All Other
|
Total OREO
|
Properties
|
Total OREO
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
OREO:
|
||||||||||||||||||||||||||||
One-to-four family residential
|
$ | 3,038 | $ | 2,712 | $ | 215 | $ | 236 | $ | 6,201 | 33 | 27.6 | % | |||||||||||||||
Commercial real estate
|
2,717 | 5,392 | 1,202 | 382 | 9,693 | 32 | 43.2 | |||||||||||||||||||||
Construction/land development
|
1,390 | 4,129 | 202 | 833 | 6,554 | 21 | 29.2 | |||||||||||||||||||||
Total OREO
|
$ | 7,145 | $ | 12,233 | $ | 1,619 | $ | 1,451 | $ | 22,448 | 86 | 100.0 | % |
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
Consolidated Balance Sheets
|
||||||||||||||||||||
(Dollars in thousands, except share data)
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Three Month
|
One Year
|
|||||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
Increase/
|
Increase/
|
||||||||||||||||
Assets
|
2012
|
2011
|
2011
|
(Decrease)
|
(Decrease)
|
|||||||||||||||
Cash on hand and in banks
|
$ | 5,186 | $ | 4,620 | $ | 4,869 | 12.3 | % | 6.5 | % | ||||||||||
Interest-bearing deposits
|
152,177 | 160,141 | 159,126 | (5.0 | ) | (4.4 | ) | |||||||||||||
Investments available-for-sale, at fair value
|
140,676 | 129,002 | 148,230 | 9.0 | (5.1 | ) | ||||||||||||||
Loans receivable, net of allowance of $14,832,
|
||||||||||||||||||||
$16,559 and $20,250
|
680,737 | 703,288 | 796,354 | (3.2 | ) | (14.5 | ) | |||||||||||||
Premises and equipment, net
|
18,702 | 18,922 | 19,585 | (1.2 | ) | (4.5 | ) | |||||||||||||
Federal Home Loan Bank stock, at cost
|
7,413 | 7,413 | 7,413 | - | - | |||||||||||||||
Accrued interest receivable
|
3,897 | 3,856 | 4,339 | 1.1 | (10.2 | ) | ||||||||||||||
Federal income tax receivable
|
1,058 | 1,060 | 6,346 | (0.2 | ) | (83.3 | ) | |||||||||||||
Other real estate owned ("OREO")
|
22,448 | 26,044 | 31,266 | (13.8 | ) | (28.2 | ) | |||||||||||||
Prepaid expenses and other assets
|
5,028 | 5,044 | 6,210 | (0.3 | ) | (19.0 | ) | |||||||||||||
Total assets
|
$ | 1,037,322 | $ | 1,059,390 | $ | 1,183,738 | (2.1 | ) | (12.4 | ) | ||||||||||
Liabilities and Stockholders' Equity
|
||||||||||||||||||||
Interest-bearing deposits
|
$ | 758,415 | $ | 782,652 | $ | 901,408 | (3.1 | ) | (15.9 | ) | ||||||||||
Noninterest-bearing deposits
|
5,633 | 6,013 | 4,818 | (6.3 | ) | 16.9 | ||||||||||||||
Advances from the Federal Home Loan Bank
|
83,066 | 83,066 | 93,066 | - | (10.7 | ) | ||||||||||||||
Advance payments from borrowers for taxes and insurance
|
4,056 | 2,093 | 4,293 | 93.8 | (5.5 | ) | ||||||||||||||
Accrued interest payable
|
196 | 184 | 230 | 6.5 | (14.8 | ) | ||||||||||||||
Other liabilities
|
3,281 | 4,062 | 3,408 | (19.2 | ) | (3.7 | ) | |||||||||||||
Total liabilities
|
854,647 | 878,070 | 1,007,223 | (2.7 | ) | (15.1 | ) | |||||||||||||
Commitments and contingencies
|
||||||||||||||||||||
Stockholders' Equity
|
||||||||||||||||||||
Preferred stock, $0.01 par value; authorized 10,000,000
|
||||||||||||||||||||
shares, no shares issued or outstanding
|
- | - | - | - | - | |||||||||||||||
Common stock, $0.01 par value; authorized 90,000,000
|
||||||||||||||||||||
shares; issued and outstanding 18,805,168 shares at
|
||||||||||||||||||||
March 31, 2012, December 31, 2011 and March 31,
|
||||||||||||||||||||
2011, respectively
|
188 | 188 | 188 | - | - | |||||||||||||||
Additional paid-in capital
|
189,209 | 188,816 | 187,707 | 0.2 | 0.8 | |||||||||||||||
Retained earnings, substantially restricted
|
4,559 | 3,937 | 1,129 | 15.8 | 303.8 | |||||||||||||||
Accumulated other comprehensive income, net of tax
|
569 | 511 | 469 | 11.4 | 21.3 | |||||||||||||||
Unearned Employee Stock Ownership Plan ("ESOP")
|
||||||||||||||||||||
shares
|
(11,850 | ) | (12,132 | ) | (12,978 | ) | (2.3 | ) | (8.7 | ) | ||||||||||
Total stockholders' equity
|
182,675 | 181,320 | 176,515 | 0.7 | 3.5 | |||||||||||||||
Total liabilities and stockholders' equity
|
$ | 1,037,322 | $ | 1,059,390 | $ | 1,183,738 | (2.1 | ) | (12.4 | ) |
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
|
|||||||||||||||||
Consolidated Income Statements
|
|||||||||||||||||
(Dollars in thousands, except share data)
|
|||||||||||||||||
(Unaudited)
|
|||||||||||||||||
Quarters Ended
|
Three Month
|
||||||||||||||||
March 31,
|
December 31,
|
March 31,
|
Increase/
|
||||||||||||||
2012
|
2011
|
2011
|
(Decrease)
|
||||||||||||||
Interest income
|
|||||||||||||||||
Loans, including fees
|
$ | 10,472 | $ | 10,892 | $ | 12,428 | (3.9 | ) |
%
|
||||||||
Investments available-for-sale
|
593 | 647 | 1,205 | (8.3 | ) | ||||||||||||
Interest-bearing deposits
|
97 | 107 | 76 | (9.3 | ) | ||||||||||||
Total interest income
|
$ | 11,162 | $ | 11,646 | $ | 13,709 | (4.2 | ) | |||||||||
Interest expense
|
|||||||||||||||||
Deposits
|
2,941 | 3,501 | 4,513 | (16.0 | ) | ||||||||||||
Federal Home Loan Bank advances
|
511 | 522 | 576 | (2.1 | ) | ||||||||||||
Total interest expense
|
$ | 3,452 | $ | 4,023 | $ | 5,089 | (14.2 | ) | |||||||||
Net interest income
|
7,710 | 7,623 | 8,620 | 1.1 | |||||||||||||
Provision for loan losses
|
1,700 | 600 | 1,200 | 183.3 | |||||||||||||
Net interest income after provision for loan losses
|
$ | 6,010 | $ | 7,023 | $ | 7,420 | (14.4 | ) | |||||||||
Noninterest income
|
|||||||||||||||||
Net gain on sale of investments
|
194 | 485 | 511 | (60.0 | ) | ||||||||||||
Other
|
87 | 70 | 85 | 24.3 | |||||||||||||
Total noninterest income
|
$ | 281 | $ | 555 | $ | 596 | (49.4 | ) | |||||||||
Noninterest expense
|
|||||||||||||||||
Salaries and employee benefits
|
3,427 | 3,212 | 3,289 | 6.7 | |||||||||||||
Occupancy and equipment
|
405 | 388 | 402 | 4.4 | |||||||||||||
Professional fees
|
473 | 535 | 480 | (11.6 | ) | ||||||||||||
Data processing
|
181 | 188 | 209 | (3.7 | ) | ||||||||||||
Gain on sale of OREO property, net
|
(221 | ) | (134 | ) | (626 | ) | 64.9 | ||||||||||
OREO market value adjustments
|
310 | 492 | 628 | (37.0 | ) | ||||||||||||
OREO related expenses, net
|
489 | 597 | 850 | (18.1 | ) | ||||||||||||
Regulatory assessments
|
97 | 537 | 710 | (81.9 | ) | ||||||||||||
Insurance and bond premiums
|
100 | 247 | 247 | (59.5 | ) | ||||||||||||
Marketing
|
52 | 51 | 61 | 2.0 | |||||||||||||
Other general and administrative
|
308 | 538 | 332 | (42.8 | ) | ||||||||||||
Total noninterest expense
|
$ | 5,621 | $ | 6,651 | $ | 6,582 | (15.5 | ) | |||||||||
Income before provision for federal income taxes
|
670 | 927 | 1,434 | (27.7 | ) | ||||||||||||
Provision for federal income taxes
|
48 | - | - | 100.0 | |||||||||||||
Net income
|
$ | 622 | $ | 927 | $ | 1,434 | (32.9 | ) | |||||||||
Basic earnings per share
|
$ | 0.04 | $ | 0.05 | $ | 0.08 | (20.0 | ) | |||||||||
Diluted earnings per share
|
$ | 0.04 | $ | 0.05 | $ | 0.08 | (20.0 | ) |
March 31, 2012
|
December 31, 2011
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
One-to-four family residential (1)
|
$ | 325,316 | 46.6 | % | $ | 335,412 | 46.4 | % | ||||||||
Multifamily:
|
||||||||||||||||
Permanent
|
110,319 | 15.8 | 110,148 | 15.2 | ||||||||||||
Construction
|
- | - | 3,526 | 0.5 | ||||||||||||
110,319 | 15.8 | 113,674 | 15.7 | |||||||||||||
Commercial real estate:
|
||||||||||||||||
Permanent
|
213,391 | 30.6 | 218,032 | 30.2 | ||||||||||||
Construction
|
12,500 | 1.8 | 12,500 | 1.7 | ||||||||||||
Land
|
1,780 | 0.3 | 1,811 | 0.2 | ||||||||||||
227,671 | 32.7 | 232,343 | 32.1 | |||||||||||||
Construction/land development (2):
|
||||||||||||||||
One-to-four family residential
|
1,475 | 0.2 | 6,194 | 0.9 | ||||||||||||
Multifamily
|
855 | 0.1 | 855 | 0.1 | ||||||||||||
Commercial
|
1,104 | 0.2 | 1,104 | 0.2 | ||||||||||||
Land development
|
16,156 | 2.3 | 16,990 | 2.3 | ||||||||||||
19,590 | 2.8 | 25,143 | 3.5 | |||||||||||||
Business
|
3,620 | 0.5 | 3,909 | 0.6 | ||||||||||||
Consumer
|
11,439 | 1.6 | 12,499 | 1.7 | ||||||||||||
Total loans
|
697,955 | 100.0 | % | 722,980 | 100.0 | % | ||||||||||
Less:
|
||||||||||||||||
Loans in process
|
598 | 1,372 | ||||||||||||||
Deferred loan fees, net
|
1,788 | 1,761 | ||||||||||||||
ALLL
|
14,832 | 16,559 | ||||||||||||||
Loans receivable, net
|
$ | 680,737 | $ | 703,288 |
(1) | Includes $146.2 million and $147.4 million of non-owner occupied loans at March 31, 2012 and December 31, 2011, respectively. |
(2) |
Excludes construction loans that will convert to permanent loans. We consider these loans to be "rollovers" in that one loan is originated for both the construction loan and permanent financing. These loans are classified according to the underlying collateral. As a result, at March 31, 2012, we had $12.5 million, or 5.5%, of our total commercial real estate portfolio and no one-to-four family residential or multifamily loans in these "rollover" type of loans. At December 31, 2011, we had $12.5 million, or 5.4%, of our total commercial real estate portfolio and $3.5 million, or 3.1%, of our total multifamily loan portfolio and no one-to-four family residential loans in these "rollover" type of loans. At both March 31, 2012 and December 31, 2011, $1.8 million of commercial real estate land loans were not included in the construction/ land development category because we classify raw land or buildable lots where we do not intend to finance the construction as commercial real estate land loans.
|
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
|
||||||||||||
Key Financial Ratios
|
||||||||||||
(Unaudited)
|
||||||||||||
At or For the Quarters Ended
|
||||||||||||
March 31, 2012
|
December 31, 2011
|
March 31, 2011
|
||||||||||
(Dollars in thousands, except share data)
|
||||||||||||
Performance Ratios:
|
||||||||||||
Return on assets
|
0.24
|
%
|
0.34
|
%
|
0.48
|
%
|
||||||
Return on equity
|
1.36
|
2.05
|
3.25
|
|||||||||
Equity-to-assets
|
17.61
|
17.12
|
14.91
|
|||||||||
Interest rate spread
|
2.88
|
2.72
|
2.88
|
|||||||||
Net interest margin
|
3.11
|
2.96
|
3.09
|
|||||||||
Average interest-earning assets to average interest-bearing liabilities
|
116.28
|
115.03
|
111.55
|
|||||||||
Efficiency ratio
|
70.34
|
81.33
|
71.42
|
|||||||||
Noninterest expense as a percent of average total assets
|
2.14
|
2.44
|
2.21
|
|||||||||
Book value per common share
|
$
|
9.71
|
$
|
9.64
|
$
|
9.39
|
||||||
Capital Ratios (1):
|
||||||||||||
Tier 1 leverage
|
14.28
|
%
|
13.54
|
%
|
12.13
|
%
|
||||||
Tier 1 risk-based
|
24.20
|
23.49
|
20.03
|
|||||||||
Total risk-based
|
25.46
|
24.76
|
21.30
|
|||||||||
Asset Quality Ratios:
|
||||||||||||
Nonperforming loans as a percent of total loans
|
3.78
|
%
|
3.28
|
%
|
6.24
|
%
|
||||||
Nonperforming assets as a percent of total assets
|
4.71
|
4.69
|
6.96
|
|||||||||
ALLL as a percent of total loans, net of undisbursed funds
|
2.13
|
2.29
|
2.47
|
|||||||||
ALLL as a percent of nonperforming loans, net of undisbursed funds
|
56.22
|
69.89
|
39.64
|
|||||||||
Net charge-offs to average loans receivable, net
|
0.49
|
0.09
|
0.42
|
|||||||||
Allowance for Loan Losses:
|
||||||||||||
Allowance for loan losses, beginning of the quarter
|
$
|
16,559
|
$
|
16,634
|
$
|
22,534
|
||||||
Provision
|
1,700
|
600
|
1,200
|
|||||||||
Charge-offs
|
(3,699
|
) |
(688
|
) |
(3,675
|
) | ||||||
Recoveries
|
272
|
13
|
191
|
|||||||||
Allowance for loan losses, end of the quarter
|
$
|
14,832
|
$
|
16,559
|
$
|
20,250
|
||||||
Nonperforming Assets (2):
|
||||||||||||
Nonperforming loans (3):
|
||||||||||||
Nonaccrual loans
|
$
|
22,739
|
$
|
18,613
|
$
|
39,737
|
||||||
Nonaccrual troubled debt restructured loans
|
3,644
|
5,079
|
11,349
|
|||||||||
Total nonperforming loans
|
26,383
|
23,692
|
51,086
|
|||||||||
OREO
|
22,448
|
26,044
|
31,266
|
|||||||||
Total nonperforming assets
|
$
|
48,831
|
$
|
49,736
|
$
|
82,352
|
||||||
Performing troubled debt restructured loans
|
$
|
65,556
|
$
|
66,225
|
$
|
65,805
|
_____________ | ||||||||||||
(1) Capital ratios are for First Savings Bank Northwest only.
|
||||||||||||
(2) Loans are reported net of undisbursed funds.
|
||||||||||||
(3) There were no loans 90 days or more past due and still accruing interest.
|