First Financial Northwest (FFNW) Q3 2024 earnings summary

Executive summary

• Reported net loss of $608,000 for Q3 2024, compared to net income of $1.5 million in Q3 2023 and $1.6 million in Q2 2024, driven by lower net interest income and a $1.6 million provision for credit losses.

• Net loss for the nine months ended September 30, 2024 was $128,000, down from net income of $5.1 million for the same period in 2023.

• Shareholders approved the sale of substantially all assets and liabilities to Global Federal Credit Union; regulatory approval from NCUA is pending.

• Credit quality remains strong with nonaccrual loans at $853,000, or 0.07% of total loans.

• Loss mainly related to two substandard participation loans in the healthcare sector.

Financial highlights

• Net interest income for Q3 2024 was $8.5 million, down from $9.7 million in Q3 2023 and $9.0 million in Q2 2024; net interest margin declined to 2.46% from 2.69% in Q3 2023.

• Net loans receivable totaled $1.13 billion at September 30, 2024, down 4.2% year-over-year and $8.9 million from the prior quarter.

• Deposits increased to $1.17 billion, up $79.2 million from June 30, 2024, mainly due to retail certificates of deposit.

• FHLB advances reduced to $100 million from $176 million in the prior quarter; all advances tied to interest rate swaps.

• Book value per share was $17.39 at September 30, 2024, compared to $17.51 at June 30, 2024.

Outlook and guidance

• Asset sale to Global Federal Credit Union is expected to close pending NCUA approval; timing and conditions remain uncertain.

• Management expects continued focus on liquidity and capital, with sufficient resources to meet obligations for at least the next 12 months.

• Proceeds from a pending property sale by loan guarantors are expected to improve the position on substandard loans.