Washington
|
001-3365
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26-0610707
|
||
State or other jurisdiction of
incorporation
|
Commission
File Number
|
(I.R.S. Employer
Identification No.)
|
||
201 Wells Avenue South, Renton, Washington
|
98057
|
|||
(Address of principal executive offices)
|
(Zip Code)
|
[ ]
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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)
|
[ ]
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
|
|
(17 CFR 240.14d-2(b))
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[ ]
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
|
|
(17 CFR 240.13e-4 (c))
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FIRST FINANCIAL NORTHWEST, INC.
|
|
DATE: April 23, 2015 |
By: /s/Richard P. Jacobson
|
Richard P. Jacobson
|
|
Chief Financial Officer
|
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 |
·
|
Share repurchases totaled 268,300 shares during the quarter, at an average price of $12.00 per share, bringing the total shares repurchased under the current plan to 595,412 shares at an average price of $11.67 per share.
|
·
|
The Company’s book value per share at March 31, 2015, increased to $12.10 from $11.96 at December 31, 2014, and $11.42 at March 31, 2014.
|
·
|
The Bank’s Tier 1 leverage and total risk-based capital ratios at March 31, 2015, were 11.64% and 18.59%, respectively, compared to 11.79% and 19.56% at December 31, 2014, and 18.61% and 28.24%, at March 31, 2014. The change from the March 31, 2014, level was primarily a result of $70 million in dividends paid by the Bank to the Company in 2014.
|
·
|
The Bank received recoveries of amounts previously charged off totaling $457,000 during the quarter, contributing to the Company’s ALLL balances.
|
·
|
Delinquent loans (loans over 30 days past due) remained low at $3.6 million at March 31, 2015, compared to $4.4 million at December 31, 2014, and $3.0 million at March 31, 2014.
|
·
|
Nonperforming loans remained low at $2.7 million at March 31, 2015, compared to $1.3 million at December 31, 2014, and $2.5 million at March 31, 2014. The increase in the most recent quarter was primarily due to one loan with a balance of $1.7 million becoming nonaccrual.
|
·
|
Nonperforming loans as a percentage of total loans remained low at 0.39% at March 31, 2015, compared to 0.20% at December 31, 2014, and 0.37% at March 31, 2014.
|
March 31,
|
December 31, |
March 31,
|
Three Month
|
One Year
|
||||||||||||||||
2015
|
2014
|
2014
|
Change
|
Change
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Nonperforming loans:
|
||||||||||||||||||||
One-to-four family residential
|
$ | 494 | $ | 830 | $ | 1,600 | $ | (336 | ) | $ | (1,106 | ) | ||||||||
Multifamily
|
1,683 | - | 228 | 1,683 | 1,455 | |||||||||||||||
Commercial real estate
|
425 | 434 | 706 | (9 | ) | (281 | ) | |||||||||||||
Consumer
|
74 | 75 | - | (1 | ) | 74 | ||||||||||||||
Total nonperforming loans
|
$ | 2,676 | $ | 1,339 | $ | 2,534 | $ | 1,337 | $ | 142 | ||||||||||
OREO
|
5,575 | 9,283 | 11,609 | (3,708 | ) | (6,034 | ) | |||||||||||||
Total nonperforming assets (1)
|
$ | 8,251 | $ | 10,622 | $ | 14,143 | $ | (2,371 | ) | $ | (5,892 | ) | ||||||||
Nonperforming assets as a
|
||||||||||||||||||||
percent of total assets
|
0.86 | % | 1.13 | % | 1.57 | % | ||||||||||||||
County
|
Total
|
Number
|
Percent of
|
|||||||||||||||||||||||||
King
|
Pierce
|
Kitsap
|
All Other
|
OREO
|
of Properties
|
Total OREO
|
||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||
OREO:
|
||||||||||||||||||||||||||||
One-to-four family residential
|
$ | 141 | $ | 146 | $ | - | $ | - | $ | 287 | 2 | 5.2 | % | |||||||||||||||
Commercial real estate (1)
|
- | 3,253 | 755 | 877 | 4,885 | 10 | 87.6 | |||||||||||||||||||||
Construction/land
development
|
- | 200 | - | 203 | 403 | 2 | 7.2 | |||||||||||||||||||||
Total OREO
|
$ | 141 | $ | 3,599 | $ | 755 | $ | 1,080 | $ | 5,575 | 14 | 100.0 | % | |||||||||||||||
(1) Of the 10 commercial real estate properties that are OREO, seven are office/retail buildings and three are undeveloped lots.
|
March 31,
2015
|
December 31,
2014
|
March 31,
2014
|
Three Month
Change
|
One Year
Change
|
||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
Nonperforming TDRs:
|
||||||||||||||||||||
One-to-four family residential
|
$ | - | $ | - | $ | 469 | $ | - | $ | (469 | ) | |||||||||
Total nonperforming TDRs
|
$ | - | $ | - | $ | 469 | $ | - | $ | (469 | ) | |||||||||
Performing TDRs:
|
||||||||||||||||||||
One-to-four family residential
|
40,943 | 42,908 | 45,762 | (1,965 | ) | (4,819 | ) | |||||||||||||
Multifamily
|
2,163 | 2,172 | 2,201 | (9 | ) | (38 | ) | |||||||||||||
Commercial real estate
|
8,241 | 9,118 | 12,066 | (877 | ) | (3,825 | ) | |||||||||||||
Consumer
|
43 | 43 | 43 | - | - | |||||||||||||||
Total performing TDRs
|
$ | 51,390 | $ | 54,241 | $ | 60,072 | $ | (2,851 | ) | $ | (8,682 | ) | ||||||||
Total TDRs
|
$ | 51,390 | $ | 54,241 | $ | 60,541 | $ | (2,851 | ) | $ | (9,151 | ) | ||||||||
% TDRs classified as performing
|
100.0 | % | 100.0 | % | 99.2 | % |
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
Consolidated Balance Sheets
|
||||||||||||||||||||
(Dollars in thousands, except share data)
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Assets
|
March 31,
2015
|
December 31,
2014
|
March 31,
2014
|
Three
Month
Change
|
One Year
Change
|
|||||||||||||||
Cash on hand and in banks
|
$ | 5,313 | $ | 5,920 | $ | 5,440 | (10.3 | )% | (2.3 | )% | ||||||||||
Interest-earning deposits
|
114,973 | 98,129 | 28,073 | 17.2 | 309.6 | |||||||||||||||
Investments available-for-sale, at fair value
|
118,110 | 120,374 | 139,868 | (1.9 | ) | (15.6 | ) | |||||||||||||
Loans receivable, net of allowance of $10,508,
$10,491 and $12,093, respectively
|
668,714 | 663,938 | 671,848 | 0.7 | (0.5 | ) | ||||||||||||||
Premises and equipment, net
|
16,841 | 16,734 | 17,139 | 0.6 | (1.7 | ) | ||||||||||||||
Federal Home Loan Bank ("FHLB") stock,
at cost
|
6,672 | 6,745 | 6,952 | (1.1 | ) | (4.0 | ) | |||||||||||||
Accrued interest receivable
|
3,106 | 3,265 | 3,509 | (4.9 | ) | (11.5 | ) | |||||||||||||
Deferred tax assets, net
|
7,049 | 8,338 | 13,124 | (15.5 | ) | (46.3 | ) | |||||||||||||
Other real estate owned ("OREO")
|
5,575 | 9,283 | 11,609 | (39.9 | ) | (52.0 | ) | |||||||||||||
Other receivable
|
4,038 | 128 | 1 | 3,054.7 | 403,700.0 | |||||||||||||||
Prepaid expenses and other assets
|
4,613 | 4,143 | 3,916 | 11.3 | 17.8 | |||||||||||||||
Total assets
|
$ | 955,004 | $ | 936,997 | $ | 901,479 | 1.9 | % | 5.9 | % | ||||||||||
Liabilities and Stockholders' Equity
|
||||||||||||||||||||
Deposits
|
||||||||||||||||||||
Interest-bearing deposits
|
$ | 611,266 | $ | 599,773 | $ | 578,237 | 1.9 | % | 5.7 | % | ||||||||||
Noninterest-bearing deposits
|
19,738 | 14,354 | 8,810 | 37.5 | 124.0 | |||||||||||||||
Total Deposits
|
631,004 | 614,127 | 587,047 | 2.7 | 7.5 | |||||||||||||||
Advances from the FHLB
|
135,500 | 135,500 | 119,000 | - | 13.9 | |||||||||||||||
Advance payments from borrowers for taxes
and insurance
|
3,075 | 1,707 | 3,722 | 80.1 | (17.4 | ) | ||||||||||||||
Accrued interest payable
|
151 | 142 | 91 | 6.3 | 65.9 | |||||||||||||||
Other liabilities
|
4,452 | 4,109 | 3,791 | 8.3 | 17.4 | |||||||||||||||
Total liabilities
|
$ | 774,182 | $ | 755,585 | $ | 713,651 | 2.5 | % | 8.5 | % | ||||||||||
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 14,949,081 shares at March
31, 2015;15,167,381 shares at
December 31, 2014; and 16,454,139
shares at March 31, 2014
|
150 | 151 | 165 | (0.7 | ) | (9.1 | ) | |||||||||||||
Additional paid-in capital
|
150,826 | 153,395 | 167,568 | (1.7 | ) | (10.0 | ) | |||||||||||||
Retained earnings, substantially restricted
|
38,355 | 36,969 | 31,098 | 3.7 | 23.3 | |||||||||||||||
Accumulated other comprehensive loss, net
of tax
|
(45 | ) | (357 | ) | (1,410 | ) | (87.4 | ) | (96.8 | ) | ||||||||||
Unearned Employee Stock Ownership Plan
("ESOP") shares
|
(8,464 | ) | (8,746 | ) | (9,593 | ) | (3.2 | ) | (11.8 | ) | ||||||||||
Total stockholders' equity
|
$ | 180,822 | $ | 181,412 | $ | 187,828 | (0.3 | )% | (3.7 | )% | ||||||||||
Total liabilities and stockholders' equity
|
$ | 955,004 | $ | 936,997 | $ | 901,479 | 1.9 | % | 5.9 | % |
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
Consolidated Income Statements
|
||||||||||||||||||||
(Dollars in thousands, except share data)
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
Quarter Ended
|
||||||||||||||||||||
March 31,
2015
|
December 31,
2014
|
March 31,
2014
|
Three
Month
Change
|
One Year
Change
|
||||||||||||||||
Interest income
|
||||||||||||||||||||
Loans, including fees
|
$ | 8,576 | $ | 9,010 | $ | 9,026 | (4.8 | )% | (5.0 | )% | ||||||||||
Investments available-for-sale
|
512 | 544 | 604 | (5.9 | ) | (15.2 | ) | |||||||||||||
Interest-earning deposits with banks
|
64 | 50 | 20 | 28.0 | 220.0 | |||||||||||||||
Dividends on FHLB Stock
|
2 | 2 | 2 | - | - | |||||||||||||||
Total interest income
|
$ | 9,154 | $ | 9,606 | $ | 9,652 | (4.7 | ) | (5.2 | ) | ||||||||||
Interest expense
|
||||||||||||||||||||
Deposits
|
1,314 | 1,285 | 1,347 | 2.3 | (2.4 | ) | ||||||||||||||
FHLB advances
|
318 | 324 | 251 | (1.9 | ) | 26.7 | ||||||||||||||
Total interest expense
|
$ | 1,632 | $ | 1,609 | $ | 1,598 | 1.4 | 2.1 | ||||||||||||
Net interest income
|
7,522 | 7,997 | 8,054 | (5.9 | ) | (6.6 | ) | |||||||||||||
Recapture of provision for loan losses
|
(100 | ) | (1,200 | ) | (500 | ) | (91.7 | ) | (80.0 | ) | ||||||||||
Net interest income after recapture of provision for
loan losses
|
7,622 | 9,197 | 8,554 | (17.1 | ) | (10.9 | ) | |||||||||||||
Noninterest income
|
||||||||||||||||||||
Other
|
91 | 156 | 68 | (41.7 | ) | 33.8 | ||||||||||||||
Total noninterest income
|
$ | 91 | $ | 156 | $ | 68 | (41.7 | ) | 33.8 | |||||||||||
Noninterest expense
|
||||||||||||||||||||
Salaries and employee benefits
|
3,414 | 3,294 | 2,885 | 3.6 | 18.3 | |||||||||||||||
Occupancy and equipment
|
338 | 345 | 351 | (2.0 | ) | (3.7 | ) | |||||||||||||
Professional fees
|
354 | 332 | 357 | 6.6 | (0.8 | ) | ||||||||||||||
Data processing
|
160 | 196 | 173 | (18.4 | ) | (7.5 | ) | |||||||||||||
(Gain) loss on sale of OREO property, net
|
(529 | ) | (6 | ) | 71 | 8,716.7 | (845.1 | ) | ||||||||||||
OREO market value adjustments
|
50 | 45 | 196 | 11.1 | (74.5 | ) | ||||||||||||||
OREO expenses (reimbursements), net
|
(48 | ) | 2 | 61 | (2,500.0 | ) | (178.7 | ) | ||||||||||||
Regulatory assessments
|
116 | 112 | 78 | 3.6 | 48.7 | |||||||||||||||
Insurance and bond premiums
|
92 | 96 | 103 | (4.2 | ) | (10.7 | ) | |||||||||||||
Marketing
|
33 | 20 | 25 | 65.0 | 32.0 | |||||||||||||||
Other general and administrative
|
310 | 333 | 224 | (6.9 | ) | 38.4 | ||||||||||||||
Total noninterest expense
|
$ | 4,290 | $ | 4,769 | $ | 4,524 | (10.0 | ) | (5.2 | ) | ||||||||||
Income before federal income tax provision
|
3,423 | 4,584 | 4,098 | (25.3 | ) | (16.5 | ) | |||||||||||||
Federal income tax provision
|
1,194 | 1,644 | 1,453 | (27.4 | ) | (17.8 | ) | |||||||||||||
Net income
|
$ | 2,229 | $ | 2,940 | $ | 2,645 | (24.2 | )% | (15.7 | )% | ||||||||||
Basic earnings per share
|
$ | 0.16 | $ | 0.20 | $ | 0.17 | ||||||||||||||
Diluted earnings per share
|
$ | 0.16 | $ | 0.20 | $ | 0.17 | ||||||||||||||
Weighted average number of common shares
outstanding
|
14,036,959 | 14,287,939 | 15,252,445 | |||||||||||||||||
Weighted average number of diluted shares
outstanding
|
14,199,715 | 14,421,592 | 15,357,120 |
March 31, 2015
|
December 31, 2014
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
One-to-four family residential:
|
||||||||||||||||
Permanent owner occupied
|
$ | 158,541 | 22.3 | % | $ | 161,013 | 22.9 | % | ||||||||
Permanent non-owner occupied
|
106,809 | 15.0 | 112,180 | 15.9 | ||||||||||||
Construction non-owner occupied
|
500 | 0.1 | 500 | 0.1 | ||||||||||||
$ | 265,850 | 37.4 | % | $ | 273,693 | 38.9 | % | |||||||||
Multifamily:
|
||||||||||||||||
Permanent
|
117,359 | 16.5 | 116,014 | 16.5 | ||||||||||||
Construction
|
4,450 | 0.6 | 4,450 | 0.6 | ||||||||||||
$ | 121,809 | 17.1 | % | $ | 120,464 | 17.1 | % | |||||||||
Commercial real estate:
|
||||||||||||||||
Permanent
|
238,227 | 33.5 | 239,211 | 34.0 | ||||||||||||
Construction
|
6,100 | 0.9 | 6,100 | 0.9 | ||||||||||||
Land
|
5,370 | 0.8 | 2,956 | 0.4 | ||||||||||||
$ | 249,697 | 35.2 | % | $ | 248,267 | 35.3 | % | |||||||||
Construction/land development: (1)
|
||||||||||||||||
One-to-four family residential
|
28,810 | 4.1 | 19,860 | 2.8 | ||||||||||||
Multifamily
|
19,452 | 2.7 | 17,902 | 2.5 | ||||||||||||
Commercial
|
4,300 | 0.6 | 4,300 | 0.6 | ||||||||||||
Land development
|
8,673 | 1.2 | 8,993 | 1.3 | ||||||||||||
$ | 61,235 | 8.6 | % | $ | 51,055 | 7.2 | % | |||||||||
Business
|
5,313 | 0.8 | 3,783 | 0.5 | ||||||||||||
Consumer
|
6,716 | 0.9 | 7,130 | 1.0 | ||||||||||||
Total loans
|
$ | 710,620 | 100.0 | % | $ | 704,392 | 100.0 | % | ||||||||
Less:
|
||||||||||||||||
Loans in Process ("LIP")
|
28,788 | 27,359 | ||||||||||||||
Deferred loan fees, net
|
2,610 | 2,604 | ||||||||||||||
ALLL
|
10,508 | 10,491 | ||||||||||||||
Loans receivable, net
|
$ | 668,714 | $ | 663,938 | ||||||||||||
_________________________________ |
FIRST FINANCIAL NORTHWEST, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
Key Financial Ratios
|
||||||||||||||||||||
At or For the Quarter Ended
|
||||||||||||||||||||
March 31,
|
December 31,
|
September 30, |
June 30,
|
March 31,
|
||||||||||||||||
2015
|
2014
|
2014
|
2014
|
2014
|
||||||||||||||||
(Dollars in thousands, except per share data)
|
||||||||||||||||||||
Performance Ratios:
|
||||||||||||||||||||
Return on assets
|
0.96 | % | 1.27 | % | 1.21 | % | 1.05 | % | 1.16 | % | ||||||||||
Return on equity
|
4.94 | 6.73 | 5.98 | 5.08 | 5.67 | |||||||||||||||
Dividend payout ratio
|
37.97 | 24.42 | 26.32 | 31.25 | 29.41 | |||||||||||||||
Equity-to-assets ratio
|
18.93 | 19.36 | 19.86 | 20.30 | 20.84 | |||||||||||||||
Interest rate spread
|
3.23 | 3.46 | 3.69 | 3.71 | 3.62 | |||||||||||||||
Net interest margin
|
3.40 | 3.61 | 3.84 | 3.86 | 3.78 | |||||||||||||||
Average interest-earning assets to average
interest-bearing liabilities
|
121.74 | 120.92 | 121.36 | 121.39 | 120.94 | |||||||||||||||
Efficiency ratio
|
56.35 | 58.49 | 53.63 | 56.88 | 55.70 | |||||||||||||||
Noninterest expense as a percent of average
total assets
|
1.84 | 2.06 | 1.99 | 2.09 | 1.99 | |||||||||||||||
Book value per common share
|
$ | 12.10 | $ | 11.96 | $ | 11.76 | $ | 11.60 | $ | 11.42 | ||||||||||
Capital Ratios: (1)
|
||||||||||||||||||||
Tier 1 leverage ratio
|
11.64 | % | 11.79 | % | 18.98 | % | 18.91 | % | 18.61 | % | ||||||||||
Common equity tier 1 capital ratio
|
17.33 | n/a | n/a | n/a | n/a | |||||||||||||||
Tier 1 capital ratio
|
17.33 | 18.30 | 27.93 | 28.05 | 26.98 | |||||||||||||||
Total capital ratio
|
18.59 | 19.56 | 29.18 | 29.31 | 28.24 | |||||||||||||||
Asset Quality Ratios: (2)
|
||||||||||||||||||||
Nonperforming loans as a percent of total
loans
|
0.39 | 0.20 | 0.23 | 0.33 | 0.37 | |||||||||||||||
Nonperforming assets as a percent of
total assets
|
0.86 | 1.13 | 1.24 | 1.38 | 1.57 | |||||||||||||||
ALLL as a percent of total loans
|
1.54 | 1.55 | 1.67 | 1.73 | 1.76 | |||||||||||||||
ALLL as a percent of nonperforming loans
|
392.68 | 783.50 | 741.73 | 518.93 | 477.23 | |||||||||||||||
Net charge-offs (recoveries) to average
loans receivable, net
|
(0.02 | ) | - | - | 0.01 | 0.06 | ||||||||||||||
Allowance for Loan Losses:
|
||||||||||||||||||||
ALLL, beginning of the quarter
|
$ | 10,491 | $ | 11,660 | $ | 11,951 | $ | 12,093 | $ | 12,994 | ||||||||||
Recapture of provision
|
(100 | ) | (1,200 | ) | (300 | ) | (100 | ) | (500 | ) | ||||||||||
Charge-offs
|
(340 | ) | - | (9 | ) | (80 | ) | (553 | ) | |||||||||||
Recoveries
|
457 | 31 | 18 | 38 | 152 | |||||||||||||||
ALLL, end of the quarter
|
$ | 10,508 | $ | 10,491 | $ | 11,660 | $ | 11,951 | $ | 12,093 | ||||||||||
Nonperforming Assets:
|
||||||||||||||||||||
Nonperforming loans (2) (3)
|
||||||||||||||||||||
Nonaccrual loans
|
$ | 2,676 | $ | 1,339 | $ | 1,572 | $ | 1,845 | $ | 2,065 | ||||||||||
Nonaccrual TDRs
|
- | - | - | 458 | 469 | |||||||||||||||
Total nonperforming loans
|
2,676 | 1,339 | 1,572 | 2,303 | 2,534 | |||||||||||||||
OREO
|
5,575 | 9,283 | 9,819 | 10,114 | 11,609 | |||||||||||||||
Total nonperforming assets
|
$ | 8,251 | $ | 10,622 | $ | 11,391 | $ | 12,417 | $ | 14,143 | ||||||||||
Performing TDRs
|
$ | 51,390 | $ | 54,241 | $ | 55,802 | $ | 56,783 | $ | 60,072 | ||||||||||
(1) Capital ratios are for First Savings Bank Northwest only. Capital ratios for the first quarter of 2015 are calculated based on new regulatory capital rules that became effective on January 1, 2015. These rules made select changes to the calculation of risk-weighted assets, revisions to regulatory capital elements and also added a new common equity tier 1 capital ratio component, among other modifications. Additionally, the new rules allow, and the Bank has made, a one-time election to permanently opt-out of the inclusion of accumulated other comprehensive income in its capital calculation.
(2) Loans are reported net of undisbursed funds.
(3) There were no loans 90 days or more past due and still accruing interest.
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