Executive Summary

Q4 2024 net income was $1.20 million, or $0.13 diluted EPS, improving from a Q3 2024 net loss of $0.61 million (−$0.07 EPS) and flat year-over-year versus Q4 2023 ($0.13 EPS) .
Net interest margin ticked up to 2.50% from 2.46% in Q3, aided by lower average interest‑earning assets and modestly lower funding costs; noninterest expense rose on year-end compensation accruals and merit increases .
Credit quality remained strong: nonaccrual loans were $0.84 million (0.07% of total loans), and the company recorded a $1.25 million total recapture of credit loss provision (loans + unfunded commitments), following resolution and paydowns on two participated loans .
Strategic catalyst: pending sale of substantially all assets and liabilities to Global Federal Credit Union—NCUA approval received Mar. 12, 2025; expected closing Apr. 11, 2025, with subsequent shareholder distributions .

What Went Well and What Went Wrong

What Went Well

Recapture of provision: $1.20 million (loans) and $0.05 million (unfunded commitments) recaptured in Q4 after one loan paid in full and updated appraisal supported reserve release—key driver of return to profitability .
Credit quality: nonaccruals low at $842,000 (0.07% of total loans); ACL at 1.30% of loans with net charge-offs near zero .
Management execution: “our lending teams continue to focus on growing our loan portfolio” and “credit quality remained strong” underscored by CEO commentary .

What Went Wrong

Deposit mix pressure: total deposits fell $36.0 million sequentially, led by −$19.7 million in noninterest-bearing demand and −$15.5 million in money market balances, increasing reliance on higher-cost funding .
Net interest income softness: NII of $8.44 million fell 9.0% YoY; total interest income declined 6.4% YoY on lower loan/investment yields and balances .
Expense inflation: noninterest expense rose to $8.93 million (+5.3% QoQ), driven by $860,000 increase in salaries/benefits (merit increases and incentive accruals related to loan modifications for Global) .

Financial Results

P&L and EPS vs prior periods and estimates

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Net Interest Income ($USD Millions)	$9.275	$8.970	$8.454	$8.440
Noninterest Income ($USD Millions)	$0.633	$0.673	$0.677	$0.658
Total Net Revenue (NII + Noninterest) ($USD Millions)	$9.908	$9.643	$9.131	$9.098
Provision (Recapture) for Credit Losses ($USD Millions)	$0.000	$(0.200)	$1.575	$(1.250)
Net Income ($USD Millions)	$1.194	$1.555	$(0.608)	$1.200
Diluted EPS ($)	$0.13	$0.17	$(0.07)	$0.13
Primary EPS Consensus Mean ($)	— (SPGI unavailable)	—	—	0.05 (third‑party)
Revenue Consensus Mean ($USD Millions)	— (SPGI unavailable)	—	—	— (third‑party indicates +2.28% surprise)

Notes: Wall Street consensus via S&P Global was unavailable for FFNW; third‑party sources indicate Q4 2024 EPS consensus of $0.05 and a revenue surprise of +2.28% .

Result vs estimates: Diluted EPS $0.13 vs $0.05 consensus—bold beat driven by provision recapture and stable NIM. Net revenue modestly lower sequentially, with reported third‑party revenue surprise (+2.28%).

Margins and Efficiency

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Net Interest Margin (%)	2.54	2.66	2.46	2.50
Efficiency Ratio (%)	85.17	82.35	92.96	98.20
ROA (%)	0.31	0.43	−0.17	0.33
ROE (%)	2.97	3.88	−1.50	2.96

Deposits and Funding Mix

Category ($USD Millions)	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Noninterest-bearing Demand	$100.899	$99.842	$100.466	$80.772
Interest-bearing Demand	$56.968	$57.033	$55.506	$56.957
Savings	$18.886	$17.423	$17.031	$16.277
Money Market	$529.411	$497.345	$495.978	$480.520
Retail Certificates of Deposit	$357.153	$365.527	$447.474	$448.974
Brokered Deposits	$130.790	$51.004	$50.900	$47.900
Total Deposits	$1,194.107	$1,088.174	$1,167.355	$1,131.400
FHLB Advances	$125.000	$176.000	$100.000	$110.000
Avg. Cost of Borrowings (%)	2.40	2.64	3.19	2.35

Segment/Lending Mix (selected)

Category ($USD Millions, %)	Q4 2023	Q3 2024	Q4 2024
Multifamily (Residential)	$138.149 (11.6%)	$132.811 (11.6%)	$126.303 (10.9%)
Non‑Residential CRE (Total)	$377.859 (31.6%)	$363.089 (31.8%)	$374.398 (32.3%)
Construction/Land (Total)	$60.924 (5.1%)	$60.221 (5.2%)	$67.140 (5.8%)
1–4 Family Residential (Total)	$513.223 (43.1%)	$500.871 (43.9%)	$502.070 (43.5%)
Business (Total)	$29.081 (2.5%)	$14.399 (1.3%)	$12.135 (1.1%)
Consumer (Total)	$71.995 (6.1%)	$71.020 (6.2%)	$73.206 (6.4%)
Total Loans	$1,191.231	$1,142.411	$1,155.252
ACL (% of Loans)	1.28%	1.42%	1.30%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Transaction Timeline	2025	Pending NCUA approval	NCUA approval received Mar. 12, 2025; expected closing Apr. 11, 2025	Clarified (timing firmed)
Dividends	Q2 2024–Q4 2024	Paid $0.13 in Q2 2024	No explicit dividend announcements in Q3/Q4 releases; payout ratio 0.00 in Q3 and Q4	Maintained silence / implied pause
Financial Guidance (Revenue/Margins)	Q4 2024	Not provided	Not provided	Maintained

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was found; management commentary derived from press releases.

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
Credit Quality	Nonaccruals rose to $4.7M but “well-collateralized”; ACL recapture $0.2M	Nonaccruals fell to $0.85M; $1.6M provision on two participated loans	Nonaccruals $0.84M; $1.25M total recapture as one loan paid and appraisal supported reserve release	Improving
Funding Costs / NIM	NIM 2.66%; cost of deposits up; brokered deposits reduced, FHLB up	NIM 2.46%; cost of liabilities up to 3.72%	NIM 2.50%; cost of borrowings fell to 2.35%	Stabilizing
Deposit Mix	Intentional brokered deposit reduction; retail CDs steady	Retail CDs +$81.9M; brokered −$0.1M; total +$79M QoQ	Total deposits −$36.0M QoQ; retail CDs +$1.5M; noninterest-bearing −$19.7M; money market −$15.5M	Mixed (shift to interest-bearing)
Global Transaction	Loan modifications to meet Global eligibility; transaction costs	Preparing for closing; awaiting NCUA	NCUA approval received; closing date set; post-close distributions	Advancing to close
Operating Expenses	Q2 decline on lower salaries (deferred costs), lower professional fees	Q3 salaries up (less deferral); professional fees down	Q4 salaries up on merit increases and incentive accruals; other G&A down	Upward pressure

Management Commentary

“I am pleased to report that our net loans receivable increased $14.0 million in the quarter… credit quality remained strong, with only $842,000 in nonaccrual loans, representing 0.07% of our $1.16 billion total loan portfolio.” — Joseph W. Kiley III, President & CEO .
“We continue to prepare for the closing of the sale of the Bank to Global Federal Credit Union… as we await the final required approval… before we can proceed towards closing the transaction.” — Joseph W. Kiley III .
On Q3 provision drivers: “two participation loans… have been individually evaluated and classified as ‘substandard’ since March 2022… updated appraisals received during the quarter resulted in an increase in our ACL.” — Management .
On Q2 loan modifications: “modification or refinance of over $130 million of this portfolio” to align with Global’s credit union eligibility requirements — Joseph W. Kiley III .

Q&A Highlights

No formal Q&A transcript available for Q4 2024. Management clarified key drivers in press releases: credit provision recapture tied to loan resolution/appraisal , deposit/funding mix changes and NIM dynamics , and expense increases tied to compensation and transaction-related work .

Estimates Context

S&P Global Wall Street consensus: unavailable for FFNW due to missing mapping; therefore official SPGI estimates could not be retrieved (SPGI data unavailable).
Third‑party sources indicate Q4 2024 EPS consensus was $0.05; FFNW delivered $0.13, a significant beat; third‑party reported revenue surprise of +2.28% .
Implication: Consensus models likely need to reflect lower provision expense run‑rate and stabilized NIM; however, near‑term estimates will be superseded by the pending asset sale and dissolution plan .

Key Takeaways for Investors

Bold EPS beat in Q4 2024 ($0.13 vs $0.05 third‑party consensus) was primarily driven by a $1.25 million provision recapture after loan resolution and favorable appraisal; sustainable earnings power still depends on NIM and funding costs .
Deposit mix shifted away from noninterest-bearing and money market balances, increasing reliance on interest-bearing funding and modest FHLB advances, pressuring efficiency; watch deposit trends into close .
NIM stabilization (2.50%) benefited from lower borrowing costs (2.35% vs 3.19% in Q3) and asset mix; continued trajectory will matter only until closing .
Expense inflation in Q4 (salaries/benefits +$860k) tied to merit increases and incentive accruals for Global-related loan modifications; expect normalization post-transaction .
Credit quality resilient: nonaccruals at 0.07% of loans and ACL at 1.30% provide cushion; transactional adjustments, not underlying deterioration, drove Q3 provision .
Transaction is the dominant catalyst: NCUA approval secured; closing scheduled Apr. 11, 2025; subsequent shareholder cash distributions anticipated—focus shifts from quarterly earnings to deal execution and proceeds .
Near-term trading: deal certainty and distribution timing are primary drivers; medium‑term thesis transitions to liquidation value and payout cadence rather than ongoing bank operations .

First Financial Northwest, Inc. (FFNW)·Q4 2024 Earnings Summary