First Financial Northwest (NasdaqGS:FFNW) - Share price, News & Analysis

Q: What is the Fair Price of FFNW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

FFNW ($15.45) is trading below our estimate of [[fair value]] ($21.07)

FFNW fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	3/6

FFNW Stock Overview

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington.

Rewards

Trading at 26.7% below our estimate of its fair value

Earnings grew by 38.6% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 1.1% per year for the next 3 years

Unstable dividend track record

First Financial Northwest Competitors

Adirondack Trust

OTCPK:ADKT

US$142.2m

Croghan Bancshares

OTCPK:CHBH

US$133.9m

Middlefield Banc

NasdaqCM:MBCN

US$147.1m

Ohio Valley Banc

NasdaqGM:OVBC

US$147.9m

Price History & Performance

Summary of all time highs, changes and price drops for First Financial Northwest
Historical stock prices
Current Share Price	US$15.45
52 Week High	US$17.95
52 Week Low	US$14.29
Beta	0.45
1 Month Change	-7.71%
3 Month Change	-10.12%
1 Year Change	2.18%
3 Year Change	10.99%
5 Year Change	-11.66%
Change since IPO	31.71%

Recent News & Updates

May 20

First Financial Northwest (NASDAQ:FFNW) Has Announced A Dividend Of US$0.12

First Financial Northwest, Inc. ( NASDAQ:FFNW ) has announced that it will pay a dividend of US$0.12 per share on the...

Shareholder Returns

	FFNW	US Banks	US Market
7D	-0.6%	-1.9%	-2.5%
1Y	2.2%	-18.3%	-21.2%

Return vs Industry: FFNW exceeded the US Banks industry which returned -20.1% over the past year.

Return vs Market: FFNW exceeded the US Market which returned -21.7% over the past year.

Price Volatility

Is FFNW's price volatile compared to industry and market?
FFNW volatility
FFNW Average Weekly Movement	2.7%
Banks Industry Average Movement	3.8%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: FFNW is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: FFNW's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1923	144	Joe Kiley	https://www.ffnwb.com

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest bearing accounts, interest-bearing demand accounts, money market accounts, statement savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans for the construction of single-family residences, condominiums, townhouses, multifamily properties, and residential developments; business loans; and consumer loans, such as home equity loans and savings account loans.

First Financial Northwest Fundamentals Summary

How do First Financial Northwest's earnings and revenue compare to its market cap?
FFNW fundamental statistics
Market Cap	US$138.83m
Earnings (TTM)	US$12.95m
Revenue (TTM)	US$49.99m

10.7x

P/E Ratio

0.9x

P/B Ratio

Is FFNW overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FFNW income statement (TTM)
Revenue	US$49.99m
Cost of Revenue	US$0
Gross Profit	US$49.99m
Other Expenses	US$37.04m
Earnings	US$12.95m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.44
Gross Margin	100.00%
Net Profit Margin	25.91%
Debt/Equity Ratio	60.2%

How did FFNW perform over the long term?

See historical performance and comparison

Dividends

3.1%

Current Dividend Yield

32%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is FFNW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FFNW?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for FFNW. This is calculated by dividing FFNW's market cap by their current preferred multiple.
What is FFNW's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$138.83m

FFNW key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	-9.6x

Price to Earnings Ratio vs Peers

How does FFNW's PE Ratio compare to its peers?

FFNW PE Ratio vs Peers

The above table shows the PE ratio for FFNW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	9.7x
ADKT Adirondack Trust	9.9x	n/a	US$142.2m
CHBH Croghan Bancshares	9x	n/a	US$133.9m
MBCN Middlefield Banc	8x	18.1%	US$147.1m
OVBC Ohio Valley Banc	12x	n/a	US$147.9m
FFNW First Financial Northwest	10.7x	-1.1%	US$138.8m

Forward PE

Price-To-Earnings vs Peers: FFNW is expensive based on its Price-To-Earnings Ratio (10.7x) compared to the peer average (9.7x).

Price to Earnings Ratio vs Industry

How does FFNW's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: FFNW is expensive based on its Price-To-Earnings Ratio (10.7x) compared to the US Banks industry average (9.5x)

Price to Earnings Ratio vs Fair Ratio

What is FFNW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FFNW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.7x
Fair PE Ratio	10x

Price-To-Earnings vs Fair Ratio: FFNW is expensive based on its Price-To-Earnings Ratio (10.7x) compared to the estimated Fair Price-To-Earnings Ratio (10x).

Share Price vs Fair Value

What is the Fair Price of FFNW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FFNW ($15.45) is trading below our estimate of fair value ($21.07)

Significantly Below Fair Value: FFNW is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: FFNW's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is First Financial Northwest forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-1.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FFNW's earnings are forecast to decline over the next 3 years (-1.1% per year).

Earnings vs Market: FFNW's earnings are forecast to decline over the next 3 years (-1.1% per year).

High Growth Earnings: FFNW's earnings are forecast to decline over the next 3 years.

Revenue vs Market: FFNW's revenue (2.4% per year) is forecast to grow slower than the US market (8.2% per year).

High Growth Revenue: FFNW's revenue (2.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FFNW's Return on Equity is forecast to be low in 3 years time (7.2%).

Discover growth companies

Past Performance

How has First Financial Northwest performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FFNW has high quality earnings.

Growing Profit Margin: FFNW's current net profit margins (25.9%) are higher than last year (21.3%).

Past Earnings Growth Analysis

Earnings Trend: FFNW's earnings have grown by 0.2% per year over the past 5 years.

Accelerating Growth: FFNW's earnings growth over the past year (38.6%) exceeds its 5-year average (0.2% per year).

Earnings vs Industry: FFNW earnings growth over the past year (38.6%) exceeded the Banks industry 20.7%.

Return on Equity

High ROE: FFNW's Return on Equity (8.2%) is considered low.

Discover strong past performing companies

Financial Health

How is First Financial Northwest's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: FFNW's Assets to Equity ratio (9x) is low.

Allowance for Bad Loans: FFNW has a sufficient allowance for bad loans (8469%).

Low Risk Liabilities: 91% of FFNW's liabilities are made up of primarily low risk sources of funding.

Loan Level: FFNW has an appropriate level of Loans to Assets ratio (79%).

Low Risk Deposits: FFNW's Loans to Deposits ratio (98%) is appropriate.

Level of Bad Loans: FFNW has an appropriate level of bad loans (0%).

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Dividend

What is First Financial Northwest current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.11%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FFNW's dividend (3.11%) is higher than the bottom 25% of dividend payers in the US market (1.61%).

High Dividend: FFNW's dividend (3.11%) is low compared to the top 25% of dividend payers in the US market (4.3%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, FFNW has been paying a dividend for less than 10 years.

Growing Dividend: FFNW's dividend payments have increased, but the company has only paid a dividend for 9 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (32%), FFNW's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: FFNW's dividends in 3 years are forecast to be well covered by earnings (37.5% payout ratio).

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

9.3yrs

Average management tenure

CEO

Joe Kiley (66 yo)

8.75yrs

Tenure

US$935,794

Compensation

Mr. Joseph W. Kiley, III, also known as Joe, has been the Chief Executive Officer and President of First Financial Northwest, Inc. since September 1, 2013. Mr. Kiley has been the Chief Executive Officer an...

CEO Compensation Analysis

Compensation vs Market: Joe's total compensation ($USD935.79K) is about average for companies of similar size in the US market ($USD765.69K).

Compensation vs Earnings: Joe's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: FFNW's management team is seasoned and experienced (9.3 years average tenure).

Board Members

Experienced Board: FFNW's board of directors are considered experienced (6.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/01 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31