Attached files
Exhibit 99.1 |
**For
Immediate Release**
For more
information, contact:
Victor
Karpiak: (425) 255-4400
Scott
Gaspard: (425) 254-2002
First
Financial Northwest, Inc.
Announces
Agreement With Regulators
Renton,
Washington – September 27, 2010 – First Financial Northwest, Inc. (the
“Company”) (Nasdaq GS: FFNW), today announced that its subsidiary, First Savings
Bank Northwest (the “Bank”), entered into a formal agreement with the Federal
Deposit Insurance Corporation and the Washington Department of Financial
Institutions requiring the Bank to take corrective measures in a number of areas
to strengthen and improve the Bank’s financial condition and
operations.
Victor
Karpiak, Chairman, President and Chief Executive Officer of First Financial
Northwest, Inc. stated, “Like many real estate lenders, First Savings Bank
Northwest continues to face unprecedented challenges with the prolonged downturn
in the economy and the steep decline in the values of the underlying residential
real estate collateral of our loan portfolio.”
The
agreement, formally known as a Stipulation to the Issuance of a Consent Order
(“Order”), is based on items identified in our on-site regulatory exam completed
earlier this year and commits the Bank to continue taking actions relating to
its asset quality, earnings, and capital levels, along with appropriate board
and management oversight.
Among
other directives, the Order requires the Bank to maintain or exceed regulatory
capital levels at 10% Tier 1 Leverage Ratio and 12% Total Risk-Based Ratio,
which the Bank currently exceeds as a result of the capital contribution
discussed below. At its meeting held September 15, 2010, the Board of Directors
of First Financial Northwest, Inc. authorized a portion of the Company’s capital
to be contributed to the Bank, which will provide the Bank with the capital to
exceed these measures prior to the issuance of the Order. Further, the Bank is
directed to take certain measures in a number of areas including loan loss
allowance
determination;
problem loan charge-off and reduction; lending and collection policies; reducing
loan concentrations; incorporating the terms of the Order into an updated three
year strategic plan; liquidity management; increasing Board oversight, and an
independent study of management resources. The Order also provides
that the Bank will obtain prior regulatory approval before the payment of cash
dividends or the appointment of any senior executive officers or
directors.
“We have
made significant progress on these issues since the exam. Foremost has been the
new management and restructuring of our lending and credit administration
department. The Board and management are committed to complying with all aspects
of the agreement as quickly as possible. This agreement is consistent with our
objective of improving the financial performance of the Bank in this challenging
economy.” said Victor Karpiak.
First
Financial Northwest, Inc. is the parent company of First Savings Bank Northwest;
a Washington chartered stock savings bank headquartered in Renton, Washington,
serving the Puget Sound Region with its full-service banking office and its
online banking website, www.fsbnw.com. For
additional information about First Savings Bank Northwest and First Financial
Northwest, Inc. please visit the website at www.fsbnw.com and
click on the “Investor Relations” tab.
Forward-looking
statements:
Certain
matters discussed in this press release may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements relate to, among other things, expectations of
the business environment in which we operate, projections of future performance,
perceived opportunities in the market, potential future credit experience, and
statements regarding our mission and vision. These forward-looking statements
are based upon current management expectations and may, therefore, involve risks
and uncertainties. Our actual results, performance, or achievements may differ
materially from those suggested, expressed, or implied by forward-looking
statements as a result of a wide variety or range of factors including, but not
limited to: the credit risks of lending activities, including changes in the
level and trend of loan delinquencies and write-offs that may be impacted by
deterioration in the housing and commercial real estate markets and may lead to
increased losses and nonperforming assets in our loan portfolio, and may result
in our allowance for loan losses not being adequate to cover actual losses, and
require us to materially increase our reserves; changes in general economic
conditions, either nationally or in our market areas; changes in the levels of
general interest rates, and the relative differences between short and long term
interest rates, deposit interest rates, our net interest margin and funding
sources; fluctuations in the demand for loans, the number of unsold homes and
other properties and fluctuations in real estate values in our market areas;
results of examinations of us by the Office of Thrift Supervision and our bank
subsidiary by the Federal Deposit Insurance Corporation, the Washington State
Department of Financial Institutions, Division of Banks or other regulatory
authorities; our ability to control operating costs and expenses; the use of
estimates in determining fair value of certain of our assets, which estimates
may prove to be incorrect and result in significant declines in valuation;
difficulties in reducing risk associated with the loans on our balance sheet;
staffing fluctuations in response to product demand or the implementation of
corporate strategies that affect our work force and potential associated
charges; computer systems on which we depend could fail or experience a security
breach; our ability to retain key members of
our
senior management team; costs and effects of litigation, including settlements
and judgments; our ability to implement our branch expansion strategy; our
ability to successfully integrate any assets, liabilities, customers, systems,
and management personnel we have acquired or may in the future acquire into our
operations and our ability to realize related revenue synergies and cost savings
within expected time frames and any goodwill charges related thereto; our
ability to manage loan delinquency rates; increased competitive pressures among
financial services companies; changes in consumer spending, borrowing and
savings habits; legislative or regulatory changes that adversely affect our
business including changes in regulatory policies and principles, including the
interpretation of regulatory capital or other rules; the availability of
resources to address changes in laws, rules, or regulations or to respond to
regulatory actions; adverse changes in the securities markets; inability of key
third-party providers to perform their obligations to us; changes in accounting
policies and practices, as may be adopted by the financial institution
regulatory agencies or the Financial Accounting Standards Board, including
additional guidance and interpretation on accounting issues and details of the
implementation of new accounting methods; the economic impact of war or any
terrorist activities; other economic, competitive, governmental, regulatory, and
technological factors affecting our operations; pricing, products and services;
and other risks detailed in our reports filed with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year ended December
31, 2009. Any of the forward-looking statements that we make in this Press
Release and in the other public statements we make may turn out to be wrong
because of the inaccurate assumptions we might make, because of the factors
illustrated above or because of other factors that we cannot foresee. Because of
these and other uncertainties, our actual future results may be materially
different from those expressed in any forward-looking statements made by or on
our behalf. Therefore, these factors should be considered in evaluating the
forward-looking statements, and undue reliance should not be placed on such
statements. We undertake no responsibility to update or revise any
forward-looking statements.