Breaking Down First Financial Northwest, Inc. (FFNW) Financial Health: Key Insights for Investors

If you were holding First Financial Northwest, Inc. (FFNW) stock, the most critical financial data point for 2025 isn't a quarterly earnings beat-it's the final cash distribution following the April 2025 acquisition by Global Federal Credit Union and subsequent liquidation. The story here isn't about ongoing operations, but the ultimate return on capital for shareholders.

The company, which reported Q4 2024 net income of just $1.2 million, or $0.13 diluted earnings per share (EPS), transitioned its $1.425 billion in total assets into a direct cash payout. That final chapter culminated in the Board declaring an initial liquidating distribution of $22.00 per share in April 2025. Honestly, that final, concrete number is the only one that matters now, and it's a defintely clean exit for investors who stuck it out.

Revenue Analysis

You need to understand that a traditional full-year revenue analysis for First Financial Northwest, Inc. (FFNW) in 2025 is impossible, as the company completed the sale of substantially all its assets and liabilities to Global Federal Credit Union in April 2025. The focus shifts from ongoing operations to the initial 2025 performance and the final transaction.

Before the sale, First Financial Northwest's revenue model was typical for a commercial bank holding company, primarily driven by net interest income (NII)-the difference between interest earned on assets like loans and interest paid on liabilities like deposits. Noninterest income provided a smaller, but important, diversification layer.

The core of the revenue came from its loan portfolio. The breakdown of primary revenue sources, which generate the interest income, included a mix of lending products:

• One-to-four family residential loans.
• Multifamily and commercial real estate loans.
• Construction/land loans.
• Business loans.
• Secured consumer loans, including home equity and auto loans.

On the noninterest income side, which is the secondary revenue stream, the company generated revenue from wealth management services, deposit-related fees, and bank-owned life insurance (BOLI) income. For the fourth quarter of 2024, the company's total revenue was $10.35 million, which represented a quarter-over-quarter growth of 4.45%. That's a good bounce-back, but it was overshadowed by bigger issues.

Looking at the historical trend, the year-over-year revenue growth rate was actually negative leading into 2025. The annual revenue for 2024 was $37.61 million, a significant decrease of -13.59% compared to the previous year. This softness in net interest income, driven by higher interest expenses on deposits, was a key factor leading to the strategic sale. Here's the quick math on the pre-sale revenue picture:

The most significant change in the 2025 revenue stream is the cessation of operations and the subsequent liquidation. The primary financial event of 2025 was the closing of the sale on April 11, 2025. This transaction meant the end of traditional revenue generation from lending and banking services, replacing it with the final liquidating distribution to shareholders. This event is defintely the most crucial piece of information for any investor reviewing FFNW's 2025 financials, as the company was delisted pending liquidation shortly after the sale.

For a deeper dive into the capital structure before the sale, you can check out the full analysis: Breaking Down First Financial Northwest, Inc. (FFNW) Financial Health: Key Insights for Investors.

Profitability Metrics

The core financial health of First Financial Northwest, Inc. (FFNW) is no longer defined by traditional operating profitability, but by its liquidation value, following the sale of substantially all assets and the subsequent dissolution plan announced in early 2025.

Still, to understand the final operational metrics before the wind-down, we look at the Trailing Twelve Months (TTM) data leading into the April 2025 transaction. The picture is one of extremely thin margins and poor performance relative to the industry, which ultimately contributed to the decision to sell. Here's the quick math on the final operational snapshot.

Gross, Operating, and Net Profit Margins

First Financial Northwest, Inc.'s profitability ratios, even before the dissolution, were challenging, especially when compared to the broader industry. For a bank, the Gross Profit Margin essentially reflects the Net Interest Income plus Non-Interest Income, which is why it appears so high, but the real story is in the operating and net figures.

The TTM data showed a high Gross Profit Margin of approximately 98.2%, which is typical for a bank's revenue structure. However, this high figure quickly eroded as operating costs were factored in. The TTM Operating Profit Margin stood at just 6.95%, and the crucial Net Profit Margin was only 5.5%. This indicates a significant issue with operational efficiency and cost control.

The company's TTM Net Income was a modest $1.07 million on TTM revenue of approximately $37.61 million.

Profitability Trends and Industry Comparison

The trend in profitability was clearly negative, culminating in the decision to dissolve the company. The TTM profitability ratios highlight how far First Financial Northwest, Inc. was lagging its peers in the regional banking sector.

• Net Profit Margin: FFNW's 5.5% TTM margin is drastically lower than the industry average of 23.04%.
• Operating Margin: FFNW's 6.95% TTM margin is dwarfed by the industry average of 35.09%.

This persistent underperformance is a clear signal that the company was not generating sufficient profit from its core banking activities compared to its operating expenses. That's a tough spot to be in, especially during a period of rising interest rates.

Analysis of Operational Efficiency

The massive drop-off between the Gross Profit Margin (98.2%) and the Operating Profit Margin (6.95%) is the clearest indicator of operational inefficiency. The vast majority of the company's revenue was consumed by non-interest expenses, which include salaries, occupancy, and other general and administrative costs.

This suggests a serious cost management problem. The high Gross Margin shows the bank was effective at generating interest income (its primary revenue), but the low Operating Margin confirms it was defintely spending too much to run the business. This inefficiency made the company an attractive target for acquisition and subsequent dissolution, as a buyer could realize significant cost savings by integrating the operations into a larger, more efficient structure.

For investors, the key insight is that the financial value is now crystallized in the liquidation process, not in future earnings potential. The initial liquidating distribution was $22.00 per share in April 2025, with a total estimated payout of $23.06-$23.34 per share expected as the final wind-down concludes. That's the only number that matters now. For more detail on the shareholder base, you can read Exploring First Financial Northwest, Inc. (FFNW) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking for a clear picture of how First Financial Northwest, Inc. (FFNW) funded its operations, and the 2025 data tells a unique story that culminates in a major capital action: liquidation. The traditional debt-to-equity analysis is a snapshot of the bank's health right before its sale, showing a well-capitalized structure, but the real story is the strategic decision to monetize equity.

Prior to the sale of its bank subsidiary, First Financial Northwest Bank, in April 2025, the holding company maintained a moderate debt-to-equity (D/E) ratio, which is a key measure of financial leverage (the use of borrowed money to finance assets). The D/E ratio for First Financial Northwest, Inc. stood at approximately 0.62.

Here's the quick math on what that 0.62 D/E ratio means: for every dollar of shareholder equity (ownership capital), the company was using about 62 cents of debt financing. This is slightly elevated compared to the broader regional bank industry average, which was closer to 0.5753 in 2025. A higher ratio suggests a slightly greater reliance on debt, but in the banking sector, the largest liability is typically customer deposits, which are operational liabilities rather than traditional long-term debt.

• Debt-to-Equity Ratio: 0.62 (Pre-sale figure)
• Industry Benchmark: Approx. 0.5753 for Regional Banks
• Interpretation: Moderate leverage, slightly above the peer group average.

The core of the company's liabilities-what you might consider its short-term debt-was primarily customer deposits, totaling around $1.13 billion at the end of 2024. This is normal for a bank. The company's final and most significant capital activity in 2025 wasn't a debt issuance or refinancing, but a complete strategic exit.

The company made the definitive choice to prioritize equity return through a dissolution plan. This action effectively resolved all debt and equity questions by selling the operating assets and liabilities. The sale of First Financial Northwest Bank to Global Federal Credit Union closed on April 11, 2025, providing the holding company with $228.7 million in cash.

This capital allocation decision is the ultimate balance between debt and equity: eliminating all operating liabilities and distributing the resulting cash to shareholders. The company declared an initial liquidating distribution of $22.00 per share, totaling approximately $203 million, on April 21, 2025. The stock was delisted on April 22, 2025. This is the final chapter in the company's financial structure.

If you want to dive deeper into the full context of this strategic move, you can read the comprehensive analysis at Breaking Down First Financial Northwest, Inc. (FFNW) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You're looking at First Financial Northwest, Inc. (FFNW) and trying to figure out its liquidity, but the real story isn't in a typical balance sheet-it's in the company's 2025 dissolution. The analysis shifts from operational cash flow to a massive, one-time cash event: the sale of the bank subsidiary.

Before the sale, the company's liquidity position was tight, as is common for a bank holding company. For the trailing twelve months (TTM) leading up to the acquisition, the Current Ratio and Quick Ratio were both approximately 1.04. This thin margin meant current assets barely covered current liabilities, but for a bank, the true liquidity is often tied up in loan portfolios and securities, not just cash on hand. Still, a 1.04 ratio is defintely a watch-out in a non-financial firm. The working capital trend was defined by a need to manage high-cost deposits, which had seen total deposits decrease by $62.7 million to $1.13 billion in the prior fiscal year.

The entire liquidity profile changed in April 2025. The company's solvency is no longer about generating profit; it's about orderly dissolution. The sale of First Financial Northwest Bank to Global Federal Credit Union for $228.7 million in cash fundamentally altered the holding company's cash flow and liquidity. This single transaction provided an immediate and massive cash injection, making FFNW highly liquid for the purpose of paying liabilities and distributing capital.

Here's the quick math on the cash flow shift in 2025:

• Operating Cash Flow: Now negligible, as the primary operating entity (the bank) was sold. The focus shifted to managing wind-down expenses.
• Investing Cash Flow: A massive inflow of $228.7 million from the asset sale.
• Financing Cash Flow: A significant outflow for the initial liquidating distribution of approximately $203 million, paid on April 30, 2025.

The cash flow statement for 2025 is essentially a liquidation statement. The immediate strength is having 95% of the anticipated shareholder proceeds-the $22.00 per share initial distribution-already paid out.

The potential liquidity concern is no longer about day-to-day operations, but the final distribution amount. The total projected payout is estimated to be between $23.06 and $23.34 per share, with the final amount contingent on settling all remaining liabilities, taxes, and wind-down costs. This is the final liquidity risk for shareholders: a small variance in the final payout. For a deeper dive into who was buying the stock right before this event, you should read Exploring First Financial Northwest, Inc. (FFNW) Investor Profile: Who's Buying and Why?

The following table summarizes the key liquidity metrics in the context of the 2025 acquisition and dissolution:

Valuation Analysis

You're looking at First Financial Northwest, Inc. (FFNW) and trying to figure out if it was overvalued or undervalued, but honestly, that's now a historical question. The company is no longer a going concern; it was delisted from the Nasdaq on April 22, 2025, following the sale of its bank subsidiary to Global Federal Credit Union.

The core valuation for any remaining shareholder is the cash from the liquidation. The initial liquidating distribution was $22.00 per share, paid on April 30, 2025. This represented about 95% of the anticipated total proceeds.

Here's the quick math: the estimated total distribution is expected to fall between $23.06 and $23.34 per share, which is the real, final value for investors. This range is slightly above the last trade price of $22.56 around the time of delisting.

Historical Multiples: A Pre-Acquisition View

For context, the traditional valuation ratios-which are now just historical data points leading up to the acquisition-showed a company priced for significant growth or operating with depressed earnings. The last reported Price-to-Earnings (P/E) ratio was extremely high at 188.00. This multiple, while eye-popping, was mostly a distortion caused by very low net income in the preceding 12 months, not a sign of massive overvaluation relative to the acquisition price.

The Price-to-Book (P/B) ratio, a more stable metric for a bank, stood at approximately 1.3. This suggests the market was valuing the company at about 30% over its accounting book value, which is a fairly typical premium for a regional bank being acquired.

• Price-to-Earnings (P/E): 188.00
• Price-to-Book (P/B): 1.3
• Enterprise Value-to-EBITDA (EV/EBITDA): Not a defintely reliable or standard metric for a bank in this scenario.

Stock Price Trend and Analyst Consensus

Over the 12 months leading up to the acquisition announcement, First Financial Northwest, Inc.'s stock price traded in a relatively tight range, from a 52-week low of $18.03 to a high of $23.50. This stability is common for a stock subject to merger arbitrage (the practice of buying shares of a company being acquired).

Analyst sentiment was cautious. The consensus rating was a Hold, with an average price target of $22.75. This target was right in line with the final liquidating value and the last trading price, indicating analysts had accurately mapped the expected deal value.

Dividend Yield and Liquidation Payout

Before the liquidation, the trailing twelve-month dividend yield was low, around 1.15%. This reflects the regular quarterly dividend. However, for investors who held through the transaction, the initial liquidating distribution of $22.00 per share acted as a massive, one-time payout, effectively replacing all future regular dividends. The total projected payout of up to $23.34 per share is the final return on capital.

The dividend payout ratio is not applicable in the traditional sense due to the dissolution, but the liquidating distribution itself represents a payout ratio of over 3.5 times the last reported earnings per share.

For a deeper dive into who was buying and selling First Financial Northwest, Inc. shares ahead of this major event, you should read Exploring First Financial Northwest, Inc. (FFNW) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at First Financial Northwest, Inc. (FFNW) and need to understand the risks, but the frame of reference has completely changed. This isn't a traditional bank facing interest rate risk or loan defaults anymore. As of April 2025, First Financial Northwest, Inc. completed the sale of its bank subsidiary and is now a shell company in the process of corporate dissolution and liquidation. So, the primary risk for investors is no longer operational; it's liquidation risk.

The company was delisted from the NASDAQ on April 22, 2025, following the closing of the sale of First Financial Northwest Bank to Global Federal Credit Union. This is defintely a unique situation. Your focus needs to shift from future earnings to the final cash distribution.

The Overriding Risk: Final Distribution Uncertainty

The key financial risk is that the total cash distributed to shareholders will fall short of the company's estimated range. In April 2025, First Financial Northwest, Inc. declared an initial liquidating distribution of $22.00 per share, which amounted to approximately $203 million and represented about 95% of the anticipated total proceeds. The company estimates the total distribution will potentially be in the range of $23.06 to $23.34 per share. The risk is that the remaining 5% is eroded by unforeseen costs.

Here's the quick math: The difference between the initial distribution and the high-end estimate is only $1.34 per share. That small remaining amount is directly exposed to the following internal and external risks during the wind-down period.

• Unknown or Contingent Liabilities: The biggest internal risk is the discovery of previously unknown or underestimated liabilities, which must be paid before the final distribution.
• Taxes and Expenses: The final distribution is contingent on paying all remaining taxes and wind-down expenses, which can be difficult to predict precisely.
• Legal and Regulatory Costs: Unexpected legal claims or regulatory hurdles during the dissolution process could consume the retained funds.

Operational and Financial Risks in Dissolution

The company's recent filings, including the April 2025 announcements, highlight the remaining financial risk as the execution of the Plan of Dissolution. The company received $228.7 million in cash from the sale, but they retained a portion of those funds to cover anticipated expenses and liabilities. What this estimate hides is the potential for litigation costs or a higher-than-expected tax bill on the sale proceeds, which would directly reduce the final per-share payout.

The operational risk is simply the time and cost to legally dissolve the entity. If the wind-down takes significantly longer than expected, the administrative costs will increase, eating into the final payout. You can read more about the former operating structure here: Mission Statement, Vision, & Core Values of First Financial Northwest, Inc. (FFNW).

Mitigation Strategies and Next Steps

The company's mitigation strategy is straightforward: they retained a portion of the sale proceeds specifically to cover known and anticipated expenses, taxes, debts, and liabilities in accordance with Washington law. This retained amount acts as a buffer against the liquidation risks. The final cash distribution will be the funds remaining after all these obligations are met.

Your clear action is to monitor for the final Form 15 filing with the SEC, which signals the suspension of periodic reporting, and the subsequent announcement of the final distribution amount and date. That's the last shoe to drop.

Growth Opportunities

You're looking for a clear path forward with First Financial Northwest, Inc. (FFNW), and honestly, the future isn't about traditional growth; it's about a definitive, near-term return of capital. The key insight for investors is that the company completed the sale of its core asset, First Financial Northwest Bank, to Global Federal Credit Union on April 11, 2025. The holding company is now in a wind-down phase, which is the new, final strategic direction.

The entire investment thesis shifted from earnings per share (EPS) to cash distributions. The transaction valued the bank at $228.7 million in cash. Following this, First Financial Northwest, Inc. delisted from the Nasdaq Global Select Market on April 21, 2025, so you can't trade the stock anymore. The company's sole remaining initiative is to liquidate its remaining assets and return the net proceeds to shareholders.

Capital Return Projections: The New 'Earnings'

Since First Financial Northwest, Inc. is dissolving, we don't look at revenue growth projections or earnings estimates. Instead, we focus on the liquidating distributions. The company's board declared an initial liquidating distribution of $22.00 per share on April 23, 2025. This is the most concrete financial value you can map for 2025. Here's the quick math: that initial distribution represents a significant portion of the total expected return, but it's not the final one. You should expect at least one more distribution after all final taxes and wind-down expenses are paid, but the amount is defintely less predictable.

• Initial cash return: $22.00 per share.
• Future distributions: At least one more payout expected.
• Total value realization: The $228.7 million sale price.

What this estimate hides is the final, smaller distribution amount, which depends on the actual costs of the dissolution process under Washington state law. The ultimate total distribution per share will be the true measure of the investment's final performance.

Strategic Initiatives and Value Realization

The strategic move was the sale itself-a clean exit to maximize shareholder value in a challenging regional banking environment. The partnership with Global Federal Credit Union, while ending the life of the bank, provided a clear, all-cash valuation. For the holding company, the strategic initiative is simply a formal dissolution process. This is the ultimate 'de-risking' action, replacing the uncertainty of future banking operations with a fixed cash return timeline.

The table below summarizes the key value realization events for the 2025 fiscal year:

The competitive advantage here isn't a business one; it's a shareholder advantage. You got a defined, premium cash exit, which is a rare, clean outcome in the financial sector. For a deeper dive into the health metrics that led to this strategic exit, you can check out Breaking Down First Financial Northwest, Inc. (FFNW) Financial Health: Key Insights for Investors.