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First Financial Northwest , Inc. For more information , contact : Joseph W. Kiley III , President and Chief Executive Officer Rich Jacobson , Executive Vice President and Chief Financial Officer ( 425 ) 255-4400 First Financial Northwest , Inc. Reports First Quarter Net Income of $ 2.5 Million or $ 0.26 per Diluted Share Renton , Washington - April 27 , 2021 - First Financial Northwest , Inc. ( the “ Company ” ) ( NASDAQ GS : FFNW ) , the holding company for First Financial Northwest Bank ( the “ Bank ” ) , today reported net income for the quarter ended March 31 , 2021 , of $ 2.5 million , or $ 0.26 per diluted share , compared to net income of $ 2.6 million , or $ 0.28 per diluted share , for the quarter ended December 31 , 2020 , and $ 1.7 million , or $ 0.17 per diluted share , for the quarter ended March 31 , 2020 . " This quarter we continued to see accelerated success of our strategy to diversify the liability side of our balance sheet and reduce our cost of funds , " stated Joseph W. Kiley III , President and CEO . “ During the quarter , deposits increased $ 40.0 million , with over half of the growth coming in the form of noninterest bearing demand deposits . In addition , higher cost certificate of deposit balances declined by $ 25.5 million in the quarter . This resulted in a further reduction in our cost of funds , with the average cost of deposits decreasing to 0.85 % in the quarter ended March 31 , 2021 , compared to 1.03 % in the quarter ended December 31 , 2020 , and 1.72 % in the quarter ended March 31 , 2020 , ” continued Kiley . “ If market interest rates remain low , we expect this trend to continue as we have approximately $ 219.9 million in certificates of deposit maturing in the next 12 months at a weighted average rate of 1.69 % . In addition , we have $ 83.0 million of certificates of deposit maturing in the subsequent 12 months at a weighted average rate of 1.58 % , ” continued Kiley . " We opened our 15th office in Issaquah , Washington on March 1 , 2021 , and now intend to pause our expansion with a focus on growing relationships and improving efficiency throughout our existing branch network . Our strategy remains focused on improving the Bank's deposit composition from a reliance on certificates of deposit to a more balanced deposit mix , and expanding our network for lending opportunities , " stated Kiley . “ Our lending teams continue to assist borrowers that may require additional support or closer monitoring due to the COVID - 19 pandemic . As a result of our quarterly analysis of our loan portfolio , we downgraded to special mention $ 10.5 million of $ 12.2 million in total loans made to a single lending relationship . These downgrades offset improvements to economic environmental factors related to the COVID - 19 pandemic used to calculate our allowance for loan losses , resulting in a provision for loan losses of $ 300,000 during the quarter , compared to a provision for loan losses of $ 600,000 in the quarter ended December 31 , 2020 , ” concluded Kiley .