First Fed restarts plans to sell stock to public

By John Brewer
Peninsula Daily News

PORT ANGELES — First Federal, the only locally owned community bank on the North Olympic Peninsula, is moving ahead with new steps to go public and sell millions of shares of stock.

On Friday, First Northwest Bancorp, First Federal’s holding company, filed an amended Form S-1 with the federal Securities and Exchange Commission seeking approval to increase the maximum number of shares for sale beyond what was listed in its initial SEC filing Nov. 21, 2012.

First Federal’s plans — converting from a 91-year-old mutual, or depositor-owned, organization to a bank owned by shareholders — have been delayed since 2012 by changes at the bank, including a new president/CEO and new management team, and are still pending with federal and state regulators.

Once accepted by regulators, the change to stock ownership must be approved by a vote of the bank’s depositors.

First Federal’s plans follow a national trend in which mutuals like First Federal have converted to stock ownership to raise millions in new capital.

The money can be used to build new branches, expand lending and investments and offer new services.

First Federal, which had assets of more than $780 million as of Dec. 31, stands to gain $76 million to more than $100 million from its stock offering at a planned sale price of $10 a share.

While acknowledging that the bank’s conversion plans have restarted, First Federal officials had no comment about Friday’s SEC filing or the timetable for going public.

“Documents have been filed with the appropriate government agencies, and we are precluded from any further discussions at this time,” said Larry Hueth, who was named permanent First Federal president/CEO in April 2013.

He refused further comment.

If the conversion is approved, common stock would be sold first to First Federal’s depositors and then to the general public.

Stock ownership would not affect terms governing the bank’s savings and checking accounts and loans.

First Federal is well-known for its support of nonprofit groups, community development and civic projects.

Establishment of a new charitable foundation by the bank would be part of the conversion, “which will maintain our focus on future community-giving,” then-First Federal CEO Levon Mathews said in May 2012 after First Fed’s board of directors, following two years of study, announced plans to convert from a “Washington-chartered mutual savings bank to a Washington-chartered stock savings bank and reorganizing simultaneously as a wholly owned subsidiary of a newly formed holding company,” First Northwest Bancorp.

First Federal, which began in 1923, is based in Port Angeles and has branches there, Sequim, Port Townsend, Forks and Poulsbo in Kitsap County plus a lending center in the Whatcom County city of Bellingham.

It has more than 150 employees across the Peninsula.

In the SEC filing Friday, First Northwest Bancorp said it wants to conduct an offering of between 7,650,000 and 10,350,000 shares of common stock.

The filing also noted:

■   The company may increase the maximum number of shares it is selling in the offering by up to 15 percent, to 11,902,500 shares, as a result of the demand for shares or changes in market and financial conditions.

■   The stock would be $10 per share in a subscription offering and community offering.

■   The minimum includes 6,992,240 shares to be sold to the public and 657,760 shares to be sold to First Fed’s ESOP, or employee stock ownership plan.

■   The maximum includes 9,458,960 shares to be sold to the public and 891,040 to be sold to the ESOP.

■   The charitable foundation would be funded with $400,000 in cash and the remainder in shares of common stock so the total amount contributed is equal to 8 percent of the gross offering proceeds the company receives in the offering.

■   In the initial November 2012 filing, First Northwest originally registered to sell a minimum of 5,950,000 shares and a maximum of 8,050,000 shares in the offering, with the possibility of increasing the maximum by up to 15 percent to 9,257,500 shares.

■   Sandler O’Neill & Partners LP, a national investment banking firm and broker-dealer headquartered in New York City, will assist First Fed in selling the stock.

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Publisher and Editor John Brewer can be reached at 360-417-3500 or jbrewer@peninsuladailynews.com.

Last modified: March 08. 2014 5:38PM
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