FFNW Stock Forecast & Price Target

First Financial Northwest's outlook is bolstered by a notable increase in earning asset yield, which rose by 11 basis points to 5.73%, alongside a rise in loan yield to 5.93%, enhancing the overall core margin by 5 basis points. Additionally, the company's period-end loans demonstrated a solid 3% growth quarter-over-quarter, surpassing initial growth expectations, while the loan/deposit ratio has improved to 100%, indicating effective loan utilization relative to deposits. Although the increase in non-performing assets and borrowing through FHLB advances suggests a need for careful monitoring, the overall trends in loan yields and deposit growth strategies highlight sound financial management and a strong potential for future earnings.

First Financial Northwest Inc. faces significant challenges as evidenced by a decline in net interest margin (NIM), which fell 15 basis points to 2.54%, reflecting the pressures of increasing deposit costs outpacing loan yields. Additionally, the bank experienced a 7% reduction in deposits to $1.09 billion, driven by intended decreases in brokered CDs and lower money market account balances, potentially constraining its balance sheet. These factors, coupled with a forecasted continued decline in core margins and reduced loan growth, contribute to a negative outlook for the company's financial performance.