Page 1

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 Second Quarter Net Income of $ 3.8 Million or $ 0.40 per Diluted Share Renton , Washington – July 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 June 30 , 2021 , of $ 3.8 million , or $ 0.40 per diluted share , compared to net income of $ 2.5 million , or $ 0.26 per diluted share , for the quarter ended March 31 , 2021 , and $ 2.1 million , or $ 0.22 per diluted share , for the quarter ended June 30 , 2020. For the six months ended June 30 , 2021 , net income was $ 6.3 million , or $ 0.66 per diluted share , compared to net income of $ 3.8 million , or $ 0.39 per diluted share , for the comparable six - month period in 2020 . " I am pleased to report that we have no nonperforming loans and no loans over 30 days delinquent at June 30 , 2021. During the quarter , a $ 2.0 million nonperforming loan paid off and our credit team continues to work diligently to maintain our excellent credit quality , ” stated Joseph W. Kiley III , President and CEO . “ In addition , we saw a further reduction in our cost of funds , with the average cost of deposits decreasing to 0.68 % in the quarter ended June 30 , 2021 , compared to 0.85 % in the quarter ended March 31 , 2021 , and 1.38 % in the quarter ended June 30 , 2020 , ” continued Kiley . “ If market interest rates remain low , we expect this decline to continue as we have approximately $ 172.1 million in certificates of deposit maturing in the next 12 months and an additional $ 84.5 million of certificates of deposit maturing in the subsequent 12 months , all at a weighted average rate of 1.46 % , ” continued Kiley . " As a result of our quarterly analysis of our loan portfolio , we downgraded to special mention $ 6.5 million of loans where we are a participating lender . These loans are secured by medical rehabilitation facilities and we expect improvement as elective medical procedures are currently being undertaken that were not available during the pandemic . In addition , we further downgraded $ 10.5 million in loans made to a single lending relationship to substandard . These substandard loans were analyzed for impairment and the analysis showed that no losses are anticipated from these loans . We also upgraded loans totaling $ 2.9 million in the quarter . As a result , we recorded a recapture of provision for loan losses of $ 700,000 during the quarter , compared to a provision for loan losses of $ 300,000 in the quarter ended March 31 , 2021 , " concluded Kiley .