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RENTON, Wash., Oct. 22, 2010 (GLOBE NEWSWIRE) -- First Financial Northwest, Inc. (the "Company") (Nasdaq:FFNW), the holding company for First Savings Bank Northwest (the "Bank"), today reported a net loss for the third quarter ended September 30, 2010 of $12.1 million, or $0.69 per diluted share, as compared to a net loss of $1.7 million, or $0.09 per diluted share for the quarter ended September 30, 2009. For the nine months ended September 30, 2010, the Company reported a net loss of $54.7 million, or $3.14 per diluted share as compared to a net loss of $28.5 million, or $1.50 per diluted share for the comparable period in 2009.
"Although we continue to experience quarterly losses, our year-to-date pretax, pre-provision core earnings increased $1.6 million to $8.1 million
1 from the same nine-month period in 2009. These results indicate that the Company is maintaining solid core earnings. We continue to concentrate on reducing our nonperforming assets which decreased $20.8 million during the third quarter of 2010 from the prior quarter. By taking possession of the underlying properties supporting these non-earning assets, it expedites the conversion of these properties into cash," stated Victor Karpiak, Chairman, President and Chief Executive Officer of First Financial Northwest, Inc.
Pretax, pre-provision core operating earnings exclusive of net expenses related to other real estate owned ("OREO") and goodwill represent non-Generally Accepted Accounting Principles ("GAAP") financial measures. Management has presented these non-GAAP financial measures in this earnings release because we believe that they provide useful and comparative information to assess trends in the Company's core operations reflected in the current quarter's results. Where applicable, the Company has also presented comparable earnings information using GAAP financial measures.
During the quarter ended September 30, 2010, the following items contributed to our financial results:
Provision for loan losses of $12.0 million;
Net loan charge-offs of $13.5 million;
Nonperforming assets decreased $20.8 million to $116.4 million at September 30, 2010 and now represent 9.09% of total assets compared to 10.50% at June 30, 2010;
Interest rate spread increased 17 basis points to 2.43% as compared to the quarter ended June 30, 2010;
Cost of funds declined 25 basis points to 2.42% as compared to the quarter ended June 30, 2010;
The overall risk level of our loan portfolio was decreased by the amount of speculative construction/land development loans to $73.8 million, or 7.68% of total loans from $94.5 million, or 9.24% at June 30, 2010 and $164.0 million, or 14.70% at December 31, 2009;
The Company's consolidated ratio of average tangible common equity to average tangible assets ended the quarter at 14.75% 2.
"Our capital levels remain strong and continue to exceed the definition of a well capitalized institution. As part of the Consent Order ("Order") entered into on September 27, 2010 with the FDIC and Washington State Department of Financial Institutions (DFI), we continue to make substantial progress in complying with the items outlined in the Order and continue to work diligently towards being in full compliance with the Order as quickly as possible," stated Victor Karpiak.