First Financial Northwest, Inc. Announces Receipt of Federal Deposit Insurance Corporation Approval for Transaction with Global Credit Union

Rhea-AI Summary

First Financial Northwest, Inc. (NASDAQ GS: FFNW) has announced that it received FDIC approval for Global Federal Credit Union to acquire substantially all assets and assume liabilities of First Financial Northwest Bank. This approval is a important step in the Asset Sale agreement dated January 10, 2024. The company has already obtained approval from the Washington State Department of Financial Institutions and shareholder approval on July 19, 2024.

However, the transaction still requires regulatory approval from the NCUA, which has not yet been obtained. The company cannot guarantee when or if this final approval will be received, or if there will be any burdensome conditions attached. First Financial Northwest Bank currently operates 15 full-service banking offices in the Puget Sound Region.

Positive

• Received FDIC approval for the Asset Sale to Global Federal Credit Union
• Obtained approval from Washington State Department of Financial Institutions
• Shareholders approved the transaction on July 19, 2024

Negative

• Still awaiting NCUA approval, which is not guaranteed
• Potential for burdensome conditions attached to NCUA approval
• Uncertainty regarding timeline for final regulatory approval

Insights

Financial Analyst

The FDIC's approval for Global Credit Union's acquisition of First Financial Northwest Bank is a significant milestone in the transaction process. This move represents a strategic shift in the local banking landscape, potentially impacting $1.3 billion in assets based on FFNW's latest financial reports. The deal's progression suggests positive momentum, but investors should note that NCUA approval is still pending, which introduces an element of uncertainty. The transaction, if completed, could lead to improved operational efficiencies and expanded services for customers, potentially enhancing long-term value. However, shareholders should be aware that such transitions can also bring short-term volatility and integration challenges.

Legal Expert

The regulatory approval from the FDIC marks a crucial legal step in the asset sale process. However, the transaction's completion hinges on the NCUA's approval, which adds a layer of regulatory complexity. The company's cautionary statement regarding potential unacceptably burdensome conditions from NCUA approval is noteworthy. This language suggests potential legal hurdles that could affect the deal's terms or even its completion. Investors should be aware that regulatory conditions might impact the financial terms or timeline of the transaction. The prior shareholder approval on July 19, 2024, demonstrates compliance with corporate governance requirements, reinforcing the legal foundation of the deal.

Market Research Analyst

This transaction signifies a notable shift in the regional banking market dynamics. The acquisition of a traditional bank by a credit union is part of a broader trend of credit unions expanding their market presence. This move could potentially reshape competition in the Puget Sound Region's banking sector. For investors, it's important to consider the long-term implications on market share and customer base. The consolidation might lead to improved economies of scale, potentially benefiting members/customers through enhanced services or more competitive rates. However, it also raises questions about the future landscape of community banking in the region and how this might affect smaller financial institutions' strategies going forward.

RENTON, Wash., Aug. 12, 2024 (GLOBE NEWSWIRE) -- First Financial Northwest, Inc. (the “Company”) (NASDAQ GS: FFNW), the holding company for First Financial Northwest Bank (the “Bank”), announced today that they received the required regulatory approval from the Federal Deposit Insurance Corporation (“FDIC”) for Global Federal Credit Union (“Global”) to acquire substantially all of the assets and assume substantially all of the liabilities (including deposit liabilities) of the Bank (the “Asset Sale”), on the terms and subject to the conditions of the Purchase and Assumption Agreement, dated as of January 10, 2024, by and among the Company, the Bank and Global. The Company previously announced that the Bank had received approval from the Washington State Department of Financial Institutions. The Company shareholders approved the transaction at a special meeting of shareholders held on July 19, 2024.

The consummation of the Asset Sale remains subject to Global receiving the required regulatory approval from the National Credit Union Administration (“NCUA”), which has not yet been obtained. The Company cannot provide any assurance as to whether the required final regulatory approval from the NCUA will be received, when such approval will be received, or whether there will be conditions to such approval that are unacceptably burdensome to the Company or Global.

First Financial Northwest, Inc. is the parent company of First Financial Northwest Bank; an FDIC insured Washington State-chartered commercial bank headquartered in Renton, Washington, serving the Puget Sound Region through 15 full-service banking offices. For additional information about us, please visit our website at ffnwb.com and click on the “Investor Relations” link at the bottom of the page.

Forward-looking statements:

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but instead represent management’s current expectations and forecasts regarding future events many of which are inherently uncertain and outside of our control. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about, among other things, our pending transaction with Global Federal Credit Union (“Global”) whereby Global, pursuant to the definitive purchase and assumption agreement (the “P&A Agreement”), will acquire substantially all of the assets and assume substantially all of the liabilities of the Bank, expectations of the business environment in which we operate, projections of future performance or financial items, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based on current management expectations and may, therefore, involve risks and uncertainties. Actual results may differ, possibly materially from those currently expected or projected in these forward-looking statements made by, or on behalf of, us and could negatively affect our operating and stock performance. Factors that could cause our actual results to differ materially from those described in the forward-looking statements, include, but are not limited to, the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or all of the parties to terminate the P&A Agreement; delays in completing the P&A Agreement; the failure to obtain all necessary regulatory approvals or to satisfy any of the other conditions to the Global transaction, including the P&A Agreement, on a timely basis or at all; delays or other circumstances arising from the dissolution of the Bank and the Company following completion of the P&A Agreement; diversion of management’s attention from ongoing business operations and opportunities during the pending Global transaction; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement of the Global transaction; potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; changes in the interest rate environment, including the recent increases in the Federal Reserve benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; increased competitive pressures; legislative and regulatory changes; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; effects of critical accounting policies and judgments, including the use of estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with or furnished to the Securities and Exchange Commission – that are available on our website at www.ffnwb.com and on the SEC’s website at www.sec.gov.

Any of the forward-looking statements that we make in this Press Release and in the other public statements are based upon management’s beliefs and assumptions at the time they are made and 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. Therefore, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

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

FAQ

What regulatory approvals has First Financial Northwest (FFNW) received for its Asset Sale to Global Credit Union?

First Financial Northwest (FFNW) has received approval from the Federal Deposit Insurance (FDIC) and the Washington State Department of Financial Institutions for its Asset Sale to Global Credit Union.

When did shareholders of First Financial Northwest (FFNW) approve the Asset Sale transaction?

Shareholders of First Financial Northwest (FFNW) approved the Asset Sale transaction at a special meeting held on July 19, 2024.

What final regulatory approval is First Financial Northwest (FFNW) still waiting for to complete the Asset Sale?

First Financial Northwest (FFNW) is still waiting for regulatory approval from the National Credit Union Administration (NCUA) to complete the Asset Sale to Global Credit Union.

How many full-service banking offices does First Financial Northwest Bank (FFNW) currently operate?

First Financial Northwest Bank (FFNW) currently operates 15 full-service banking offices in the Puget Sound Region.