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First Western Reports First Quarter 2024 Financial Results

First Western Financial, Inc.
First Western Financial, Inc.

First Quarter 2024 Summary

  • Net income available to common shareholders of $2.5 million in Q1 2024, compared to a Net loss of $3.2 million in Q4 2023.

  • Diluted earnings/(loss) per share of $0.26 in Q1 2024, compared to $(0.34) in Q4 2023

  • Non-interest income increased 19.7% to $7.3 million compared to $6.1 million in Q4 2023 and 25.3% compared to $5.8 million in Q1 2023

  • Loan to deposit ratio decreased to 98.4% in Q1 2024, compared to 100.6% in Q4 2023

  • Book value per common share increased 0.8% from $25.33 in Q4 2023 to $25.52 in Q1 2024. Tangible book value per common share(1) increased 0.9% from $22.01 in Q4 2023, to $22.21 in Q1 2024.

  • Total capital to risk-weighted assets ratio of 13.15% in Q1 2024, compared to 12.59% in Q4 2023

DENVER, April 18, 2024 (GLOBE NEWSWIRE) -- First Western Financial, Inc. (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the first quarter ended March 31, 2024.

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Net income available to common shareholders was $2.5 million, or $0.26 per diluted share, for the first quarter of 2024. This compares to Net loss of $3.2 million, or $(0.34) per diluted share, for the fourth quarter of 2023, and Net income of $3.8 million, or $0.39 per diluted share, for the first quarter of 2023.

Scott C. Wylie, CEO of First Western, commented, "While continuing to prioritize prudent risk management and a conservative approach to new loan production, we delivered a higher level of profitability during the first quarter compared to Q4 2023. As a result of strong execution on our strategic priorities, we saw positive trends in a number of key areas including further improvement in our loan-to-deposit ratio, a higher level of non-interest income driven by our wealth management and mortgage banking businesses, and improvement in our asset quality with a decline in non-performing loans and net charge-offs to average loans of 0.00% in the quarter. Given our higher level of profitability and prudent balance sheet management, we were able to continue increasing our tangible book value per share and our risk-based capital ratios.

“While economic conditions remain uncertain, we will continue to prioritize prudent risk management and be conservative in new loan production, while focusing on adding new full banking relationships with high quality clients that need the multiple products and services we can provide in banking, wealth management, and other areas. When economic conditions improve, given the strength of our balance sheet, including the higher level of liquidity that we now have, we believe we are well positioned to capitalize on increased loan demand to grow our balance sheet, increase revenue, and realize more operating leverage, which should result in further increases in our level of profitability and additional value being created for shareholders,” said Mr. Wylie.

 

For the Three Months Ended

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except per share data)

2024

 

2023

 

2023

Earnings Summary

 

 

 

 

 

Net interest income

$

16,070

 

 

$

16,331

 

 

$

19,573

 

Provision/(release) for credit losses

 

72

 

 

 

8,493

 

 

 

(310

)

Total non-interest income

 

7,277

 

 

 

6,081

 

 

 

5,806

 

Total non-interest expense

 

19,696

 

 

 

18,276

 

 

 

20,528

 

Income/(loss) before income taxes

 

3,579

 

 

 

(4,357

)

 

 

5,161

 

Income tax expense/(benefit)

 

1,064

 

 

 

(1,138

)

 

 

1,341

 

Net income/(loss) available to common shareholders

 

2,515

 

 

 

(3,219

)

 

 

3,820

 

Basic earnings/(loss) per common share

 

0.26

 

 

 

(0.34

)

 

 

0.40

 

Diluted earnings/(loss) per common share

 

0.26

 

 

 

(0.34

)

 

 

0.39

 

 

 

 

 

 

 

Return on average assets (annualized)

 

0.35

%

 

 

(0.45

)%

 

 

0.54

%

Return on average shareholders' equity (annualized)

 

4.10

 

 

 

(5.17

)

 

 

6.40

 

Return on tangible common equity (annualized)(1)

 

4.71

 

 

 

(6.11

)

 

 

7.35

 

Net interest margin

 

2.34

 

 

 

2.37

 

 

 

2.93

 

Efficiency ratio(1)

 

83.44

 

 

 

80.93

 

 

 

78.44

 

____________________

(1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Operating Results for the First Quarter 2024

Revenue

Total income before non-interest expense was $23.3 million for the first quarter of 2024, an increase of 67.2%, compared to $13.9 million for the fourth quarter of 2023. Gross revenue(1) was $23.5 million for the first quarter of 2024, an increase of 4.6%, from $22.5 million for the fourth quarter of 2023. The increase in Total income before non-interest expense was primarily driven by a decrease in Provision for credit losses. Relative to the first quarter of 2023, Total income before non-interest expense decreased 9.4% from $25.7 million. Gross revenue decreased 9.8% from $26.1 million for the first quarter of 2023. The decrease was driven by a decrease in Net interest income as a result of higher Interest expense due to higher deposit costs, offset partially by higher Interest income.

(1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Net Interest Income

Net interest income for the first quarter of 2024 was $16.1 million, a decrease of 1.6% from $16.3 million in the fourth quarter of 2023. Relative to the first quarter of 2023, Net interest income decreased 17.9% from $19.6 million. The decreases were due to higher Interest expense driven primarily by higher deposit costs, offset partially by higher Interest income.

Net Interest Margin

Net interest margin for the first quarter of 2024 decreased 3 basis points to 2.34% from 2.37% reported in the fourth quarter of 2024, primarily due to continued pricing pressure on interest-bearing deposits and an unfavorable mix shift in the deposit portfolio.

The yield on interest-earning assets increased 7 basis points to 5.58% in the first quarter of 2024 from 5.51% in the fourth quarter of 2023 and the cost of interest-bearing deposits increased 19 basis points to 4.13% in the first quarter of 2024 from 3.94% in the fourth quarter of 2023.

Relative to the first quarter of 2023, net interest margin decreased from 2.93%, primarily due to pricing pressure on interest-bearing deposits and an unfavorable mix shift in the deposit portfolio.

Non-interest Income

Non-interest income for the first quarter of 2024 was $7.3 million compared to $6.1 million in the fourth quarter of 2023, primarily driven by an increase in Net gain on mortgage loans and higher Bank fees during the first quarter of 2024, partially offset by lower Risk management and insurance fees, which tend to be seasonally higher in the fourth quarter.

Relative to the first quarter of 2023, Non-interest income increased 25.3% from $5.8 million. Increases were driven by most components of Non-interest income, including Bank fees, Net gain on loans held for sale, Trust and investment management fees, Net gain on mortgage loans, and Net gain on loans accounted for under the fair value option.

Non-interest Expense

Non-interest expense for the first quarter of 2024 was $19.7 million compared to $18.3 million for the fourth quarter of 2023. The increase was driven by higher Salaries and employee benefits due to a higher bonus accrual commensurate with improved earnings in the first quarter of 2024 as compared to the fourth quarter of 2023 and higher payroll taxes, which tend to be seasonally higher in the first quarter.

Relative to the first quarter of 2023, Non-interest expense decreased 4.1% from $20.5 million, driven primarily by lower Salaries and employee benefits as a result of staffing reductions in 2023 to better align expenses with lower revenue. The decrease was partially offset by increased Professional services and Other operational costs related to higher legal, audit and other professional fees.

The Company’s efficiency ratio(1) was 83.4% in the first quarter of 2024, compared with 80.9% in the fourth quarter of 2023 and 78.4% in the first quarter of 2023.

(1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Income Taxes

The Company recorded Income tax expense of $1.1 million for the first quarter of 2024, compared to Income tax benefit of $1.1 million for the fourth quarter of 2023 and Income tax expense of $1.3 million for the first quarter of 2023.

Loans

Total loans held for investment were $2.48 billion as of March 31, 2024, a decrease of 2.2% from $2.54 billion as of December 31, 2023, the decline was due to a net decrease in Commercial and Industrial and 1-4 Family Residential portfolios. Relative to the first quarter of 2023, Total loans held for investment were flat year over year at $2.48 billion as of March 31, 2023.

Deposits

Total deposits were $2.53 billion as of March 31, 2024, which were flat compared to December 31, 2023. Relative to the first quarter of 2023, Total deposits increased 5.9% from $2.39 billion as of March 31, 2023, driven primarily by Interest-bearing deposits due to new and expanded deposit relationships.

Borrowings

Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $69.5 million as of March 31, 2024, a decrease of $56.2 million from $125.7 million as of December 31, 2023. Relative to the first quarter of 2023, borrowings decreased $191.9 million from $261.4 million as of March 31, 2023. The change in borrowings from December 31, 2023 and March 31, 2023 is driven by a $31.0 million repayment of a Bank Term Funding Program loan that matured in March 2024. The change when compared to March 31, 2023 was also driven by a decline in FHLB borrowing reliance as a result of increased deposits.

Subordinated notes were $52.4 million as of March 31, 2024, compared to $52.3 million as of December 31, 2023. Subordinated notes increased $0.2 million from $52.2 million as of March 31, 2023.

Assets Under Management

Assets Under Management ("AUM") increased by $388.5 million during the first quarter to $7.14 billion as of March 31, 2024, compared to $6.75 billion as of December 31, 2023. This increase was primarily attributable to an increase in market values throughout the first quarter of 2024, resulting in an increase in the value of AUM balances. Total AUM increased by $759.4 million compared to March 31, 2023 from $6.38 billion, which was primarily attributable to improving market conditions year-over-year resulting in an increase in the value of AUM.

Credit Quality

Non-performing assets totaled $46.0 million, or 1.57% of total assets, as of March 31, 2024, compared to $51.1 million, or 1.72% of total assets, as of December 31, 2023. The decrease is primarily due to the sale of a non-performing Construction and Development note at a gain, a large principal payment received on a Cash, securities and other note offset partially by one new Non-performing Commercial and Industrial loan. As of March 31, 2023, non-performing assets totaled $12.5 million, or 0.42% of total assets. Relative to the first quarter of 2023, the increase in non-performing assets was due to the net addition of $33.5 million in loans added throughout 2023.

During the first quarter of 2024 the Company recorded a provision expense of $0.1 million, compared to a provision expense of $8.5 million in the fourth quarter of 2023 and a $0.3 million release to its provision in the first quarter of 2023. The decrease in provision expense recorded in the first quarter of 2024 compared to fourth quarter of 2023 reflects a Commercial and Industrial loan where the borrower filed for bankruptcy resulting in a charge-off of the entire loan balance during the fourth quarter of 2023.

Capital

As of March 31, 2024, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. As of March 31, 2024, the Bank was classified as “well capitalized,” as summarized in the following table:

 

March 31,

 

2024

Consolidated Capital

 

Tier 1 capital to risk-weighted assets

9.77

%

Common Equity Tier 1 ("CET1") to risk-weighted assets

9.77

 

Total capital to risk-weighted assets

13.15

 

Tier 1 capital to average assets

7.73

 

 

 

Bank Capital

 

Tier 1 capital to risk-weighted assets

11.00

 

CET1 to risk-weighted assets

11.00

 

Total capital to risk-weighted assets

12.02

 

Tier 1 capital to average assets

8.70

 

 

 

 

Book value per common share increased 0.8% from $25.33 as of December 31, 2023 to $25.52 as of March 31, 2024. Book value per common share increased 1.2% from $25.22 as of March 31, 2023.

Tangible book value per common share(1) increased 0.9% from $22.01 as of December 31, 2023, to $22.21 as of March 31, 2024. Tangible book value per common share increased 1.5% from $21.85 as of March 31, 2023.

(1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00 p.m. ET on Friday, April 19, 2024. Telephone access: https://register.vevent.com/register/BId5870626426740ff9c585b6c315ea36c.

A slide presentation relating to the fourth quarter 2024 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of the Company’s investor relations website at https://myfw.gcs-web.com.

About First Western

First Western is a financial services holding company headquartered in Denver, Colorado, with operations in Colorado, Arizona, Wyoming, California, and Montana. First Western and its subsidiaries provide a fully integrated suite of wealth management services on a private trust bank platform, which includes a comprehensive selection of deposit, loan, trust, wealth planning and investment management products and services. First Western’s common stock is traded on the Nasdaq Global Select Market under the symbol “MYFW.” For more information, please visit www.myfw.com.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include “Tangible Common Equity,” “Tangible Common Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency Ratio,” “Gross Revenue,” and “Allowance for Credit Losses to Adjusted Loans". The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliation of non-GAAP financial measures, to GAAP financial measures are provided at the end of this press release.

Forward-Looking Statements

Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “position,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “opportunity,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, without limitation, the lack of soundness of other financial institutions or financial market utilities may adversely affect the Company; the Company’s ability to engage in routine funding and other transactions could be adversely affected by the actions and commercial soundness of other financial institutions; financial institutions are interrelated because of trading, clearing, counterparty or other relationships; defaults by, or even rumors or questions about, one or more financial institutions or financial market utilities, or the financial services industry generally, may lead to market-wide liquidity problems and losses of client, creditor and counterparty confidence and could lead to losses or defaults by other financial institutions, or the Company; integration risks and projected cost savings in connection with acquisitions; the risk of geographic concentration in Colorado, Arizona, Wyoming, California, and Montana; the risk of changes in the economy affecting real estate values and liquidity; the risk in our ability to continue to originate residential real estate loans and sell such loans; risks specific to commercial loans and borrowers; the risk of claims and litigation pertaining to our fiduciary responsibilities; the risk of competition for investment managers and professionals; the risk of fluctuation in the value of our investment securities; the risk of changes in interest rates; and the risk of the adequacy of our allowance for credit losses and the risk in our ability to maintain a strong core deposit base or other low-cost funding sources. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 15, 2024 (“Form 10-K”), and other documents we file with the SEC from time to time. We urge readers of this news release to review the “Risk Factors” section our Form 10-K and any updates to those risk factors set forth in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our other filings with the SEC. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today’s date, or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Contacts:
Financial Profiles, Inc.
Tony Rossi
310-622-8221
MYFW@finprofiles.com
IR@myfw.com

First Western Financial, Inc.

Condensed ConsolidatedStatements of Income (unaudited)

 

 

 

Three Months Ended

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except per share amounts)

2024

 

2023

 

2023

Interest and dividend income:

 

 

 

 

 

Loans, including fees

$

35,139

 

 

$

35,625

 

 

$

32,080

 

Loans accounted for under the fair value option

 

209

 

 

 

257

 

 

 

427

 

Investment securities

 

603

 

 

 

600

 

 

 

629

 

Interest-bearing deposits in other financial institutions

 

2,352

 

 

 

1,350

 

 

 

1,403

 

Dividends, restricted stock

 

95

 

 

 

161

 

 

 

173

 

Total interest and dividend income

 

38,398

 

 

 

37,993

 

 

 

34,712

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

Deposits

 

20,622

 

 

 

19,037

 

 

 

13,092

 

Other borrowed funds

 

1,706

 

 

 

2,625

 

 

 

2,047

 

Total interest expense

 

22,328

 

 

 

21,662

 

 

 

15,139

 

Net interest income

 

16,070

 

 

 

16,331

 

 

 

19,573

 

Less: provision/(release) for credit losses

 

72

 

 

 

8,493

 

 

 

(310

)

Net interest income, after provision/(release) for credit losses

 

15,998

 

 

 

7,838

 

 

 

19,883

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

Trust and investment management fees

 

4,930

 

 

 

4,705

 

 

 

4,635

 

Net gain on mortgage loans

 

1,264

 

 

 

379

 

 

 

1,019

 

Net gain/(loss) on loans held for sale

 

117

 

 

 

 

 

 

(178

)

Bank fees

 

891

 

 

 

412

 

 

 

592

 

Risk management and insurance fees

 

49

 

 

 

544

 

 

 

127

 

Income on company-owned life insurance

 

105

 

 

 

101

 

 

 

90

 

Net loss on loans accounted for under the fair value option

 

(302

)

 

 

(91

)

 

 

(543

)

Unrealized (loss)/gain recognized on equity securities

 

(6

)

 

 

(2

)

 

 

10

 

Other

 

229

 

 

 

33

 

 

 

54

 

Total non-interest income

 

7,277

 

 

 

6,081

 

 

 

5,806

 

Total income before non-interest expense

 

23,275

 

 

 

13,919

 

 

 

25,689

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

Salaries and employee benefits

 

11,267

 

 

 

9,988

 

 

 

13,098

 

Occupancy and equipment

 

1,976

 

 

 

1,937

 

 

 

1,914

 

Professional services

 

2,411

 

 

 

1,990

 

 

 

1,923

 

Technology and information systems

 

1,010

 

 

 

928

 

 

 

832

 

Data processing

 

948

 

 

 

1,189

 

 

 

1,139

 

Marketing

 

194

 

 

 

415

 

 

 

391

 

Amortization of other intangible assets

 

57

 

 

 

62

 

 

 

64

 

Other

 

1,833

 

 

 

1,767

 

 

 

1,167

 

Total non-interest expense

 

19,696

 

 

 

18,276

 

 

 

20,528

 

Income/(loss) before income taxes

 

3,579

 

 

 

(4,357

)

 

 

5,161

 

Income tax (benefit)/expense

 

1,064

 

 

 

(1,138

)

 

 

1,341

 

Net income/(loss) available to common shareholders

$

2,515

 

 

$

(3,219

)

 

$

3,820

 

Earnings/(loss) per common share:

 

 

 

 

 

Basic

$

0.26

 

 

$

(0.34

)

 

$

0.40

 

Diluted

 

0.26

 

 

 

(0.34

)

 

 

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 


First Western Financial, Inc.

CondensedConsolidatedBalance Sheets (unaudited)

 

 

 

 

 

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

2024

 

2023

 

2023

Assets

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

Cash and due from banks

$

8,136

 

 

$

7,284

 

 

$

6,920

 

Interest-bearing deposits in other financial institutions

 

249,753

 

 

 

247,158

 

 

 

288,147

 

Total cash and cash equivalents

 

257,889

 

 

 

254,442

 

 

 

295,067

 

 

 

 

 

 

 

Held-to-maturity securities (fair value of $64,908, $66,617 and $73,570, respectively), net of allowance for credit losses of $71

 

72,303

 

 

 

74,102

 

 

 

79,565

 

Correspondent bank stock, at cost

 

4,461

 

 

 

7,155

 

 

 

13,222

 

Mortgage loans held for sale, at fair value

 

10,470

 

 

 

7,254

 

 

 

9,873

 

Loans (includes $11,922, $13,726, and $20,807 measured at fair value, respectively)

 

2,475,524

 

 

 

2,530,915

 

 

 

2,469,038

 

Allowance for credit losses

 

(24,630

)

 

 

(23,931

)

 

 

(19,843

)

Loans, net

 

2,450,894

 

 

 

2,506,984

 

 

 

2,449,195

 

Premises and equipment, net

 

24,869

 

 

 

25,256

 

 

 

25,383

 

Accrued interest receivable

 

11,919

 

 

 

11,428

 

 

 

10,976

 

Accounts receivable

 

4,980

 

 

 

5,095

 

 

 

4,713

 

Other receivables

 

5,254

 

 

 

4,467

 

 

 

2,396

 

Goodwill and other intangible assets, net

 

31,797

 

 

 

31,854

 

 

 

32,040

 

Deferred tax assets, net

 

5,695

 

 

 

6,407

 

 

 

6,792

 

Company-owned life insurance

 

16,635

 

 

 

16,530

 

 

 

16,242

 

Other assets

 

35,051

 

 

 

24,488

 

 

 

23,043

 

Total assets

$

2,932,217

 

 

$

2,975,462

 

 

$

2,968,507

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Deposits:

 

 

 

 

 

Noninterest-bearing

$

434,236

 

 

$

482,579

 

 

$

545,064

 

Interest-bearing

 

2,097,734

 

 

 

2,046,460

 

 

 

1,846,863

 

Total deposits

 

2,531,970

 

 

 

2,529,039

 

 

 

2,391,927

 

Borrowings:

 

 

 

 

 

Federal Home Loan Bank and Federal Reserve borrowings

 

69,484

 

 

 

125,711

 

 

 

261,385

 

Subordinated notes

 

52,397

 

 

 

52,340

 

 

 

52,167

 

Accrued interest payable

 

2,415

 

 

 

3,793

 

 

 

1,786

 

Other liabilities

 

30,423

 

 

 

21,841

 

 

 

21,420

 

Total liabilities

 

2,686,689

 

 

 

2,732,724

 

 

 

2,728,685

 

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

Total shareholders’ equity

 

245,528

 

 

 

242,738

 

 

 

239,822

 

Total liabilities and shareholders’ equity

$

2,932,217

 

 

$

2,975,462

 

 

$

2,968,507

 

 

 

 

 

 

 

 

 

 

 

 

 


First Western Financial, Inc.

Consolidated Financial Summary (unaudited)

 

 

 

 

 

 

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

2024

 

2023

 

2023

Loan Portfolio

 

 

 

 

 

Cash, Securities, and Other(1)

$

151,178

 

 

$

140,053

 

 

$

157,308

 

Consumer and Other

 

18,556

 

 

 

27,446

 

 

 

22,183

 

Construction and Development

 

333,284

 

 

 

347,515

 

 

 

283,999

 

1-4 Family Residential

 

910,129

 

 

 

925,984

 

 

 

889,782

 

Non-Owner Occupied CRE

 

562,862

 

 

 

546,966

 

 

 

536,679

 

Owner Occupied CRE

 

194,338

 

 

 

197,205

 

 

 

223,449

 

Commercial and Industrial

 

297,573

 

 

 

336,842

 

 

 

340,632

 

Total

 

2,467,920

 

 

 

2,522,011

 

 

 

2,454,032

 

Loans accounted for under the fair value option

 

12,276

 

 

 

14,129

 

 

 

21,052

 

Total loans held for investment

 

2,480,196

 

 

 

2,536,140

 

 

 

2,475,084

 

Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net(2)

 

(4,672

)

 

 

(5,225

)

 

 

(6,046

)

Loans (includes $11,922, $13,726, and $20,807 measured at fair value, respectively)

$

2,475,524

 

 

$

2,530,915

 

 

$

2,469,038

 

Mortgage loans held for sale

 

10,470

 

 

 

7,254

 

 

 

9,873

 

 

 

 

 

 

 

Deposit Portfolio

 

 

 

 

 

Money market deposit accounts

$

1,503,598

 

 

$

1,386,149

 

 

$

1,277,988

 

Time deposits

 

442,834

 

 

 

496,452

 

 

 

354,545

 

Negotiable order of withdrawal accounts

 

132,415

 

 

 

147,488

 

 

 

192,011

 

Savings accounts

 

18,887

 

 

 

16,371

 

 

 

22,319

 

Total interest-bearing deposits

 

2,097,734

 

 

 

2,046,460

 

 

 

1,846,863

 

Noninterest-bearing accounts

 

434,236

 

 

 

482,579

 

 

 

545,064

 

Total deposits

$

2,531,970

 

 

$

2,529,039

 

 

$

2,391,927

 

____________________
(1) Includes PPP loans of $3.8 million as of March 31, 2024, $4.3 million as of December 31, 2023, and $6.1 million as of March 31, 2023.
(2) Includes fair value adjustments on loans held for investment accounted for under the fair value option.

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)

 

 

 

As of or for the Three Months Ended

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands)

2024

 

2023

 

2023

Average Balance Sheets

 

 

 

 

 

Assets

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

Interest-bearing deposits in other financial institutions

$

177,523

 

 

$

104,789

 

 

$

127,608

 

Investment securities

 

74,666

 

 

 

76,331

 

 

 

82,106

 

Correspondent bank stock

 

4,451

 

 

 

7,576

 

 

 

9,592

 

Loans

 

2,490,300

 

 

 

2,521,532

 

 

 

2,456,922

 

Mortgage loans held for sale

 

6,752

 

 

 

9,915

 

 

 

7,521

 

Loans held at fair value

 

13,134

 

 

 

14,755

 

 

 

22,722

 

Total interest-earning assets

 

2,766,826

 

 

 

2,734,898

 

 

 

2,706,471

 

Allowance for credit losses

 

(23,974

)

 

 

(23,308

)

 

 

(20,325

)

Noninterest-earning assets

 

124,144

 

 

 

126,132

 

 

 

125,201

 

Total assets

$

2,866,996

 

 

$

2,837,722

 

 

$

2,811,347

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

Interest-bearing deposits

$

2,008,246

 

 

$

1,914,856

 

 

$

1,805,994

 

FHLB and Federal Reserve borrowings

 

92,195

 

 

 

139,316

 

 

 

142,642

 

Subordinated notes

 

52,360

 

 

 

52,299

 

 

 

52,135

 

Total interest-bearing liabilities

 

2,152,801

 

 

 

2,106,471

 

 

 

2,000,771

 

Noninterest-bearing liabilities:

 

 

 

 

 

Noninterest-bearing deposits

 

446,457

 

 

 

456,787

 

 

 

545,670

 

Other liabilities

 

22,250

 

 

 

25,387

 

 

 

26,206

 

Total noninterest-bearing liabilities

 

468,707

 

 

 

482,174

 

 

 

571,876

 

Total shareholders’ equity

 

245,488

 

 

 

249,077

 

 

 

238,700

 

Total liabilities and shareholders’ equity

$

2,866,996

 

 

$

2,837,722

 

 

$

2,811,347

 

 

 

 

 

 

 

Yields/Cost of funds (annualized)

 

 

 

 

 

Interest-bearing deposits in other financial institutions

 

5.33

%

 

 

5.11

%

 

 

4.46

%

Investment securities

 

3.25

 

 

 

3.12

 

 

 

3.11

 

Correspondent bank stock

 

8.58

 

 

 

8.43

 

 

 

7.31

 

Loans

 

5.66

 

 

 

5.58

 

 

 

5.28

 

Loan held at fair value

 

6.40

 

 

 

6.91

 

 

 

7.62

 

Mortgage loans held for sale

 

6.79

 

 

 

6.60

 

 

 

6.04

 

Total interest-earning assets

 

5.58

 

 

 

5.51

 

 

 

5.20

 

Interest-bearing deposits

 

4.13

 

 

 

3.94

 

 

 

2.94

 

Total deposits

 

3.38

 

 

 

3.18

 

 

 

2.26

 

FHLB and Federal Reserve borrowings

 

4.23

 

 

 

5.36

 

 

 

3.89

 

Subordinated notes

 

5.66

 

 

 

5.63

 

 

 

5.38

 

Total interest-bearing liabilities

 

4.17

 

 

 

4.08

 

 

 

3.07

 

Net interest margin

 

2.34

 

 

 

2.37

 

 

 

2.93

 

Net interest rate spread

 

1.41

 

 

 

1.43

 

 

 

2.13

 

 

 

 

 

 

 

 

 

 

 

 

 


First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)

 

 

 

As of or for the Three Months Ended

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except share and per share amounts)

2024

 

2023

 

2023

Asset Quality

 

 

 

 

 

Non-performing loans

$

46,044

 

 

$

51,125

 

 

$

12,460

 

Non-performing assets

 

46,044

 

 

 

51,125

 

 

 

12,460

 

Net charge-offs

 

 

 

 

8,595

 

 

 

5

 

Non-performing loans to total loans

 

1.86

%

 

 

2.02

%

 

 

0.50

%

Non-performing assets to total assets

 

1.57

 

 

 

1.72

 

 

 

0.42

 

Allowance for credit losses to non-performing loans

 

53.49

 

 

 

46.81

 

 

 

159.25

 

Allowance for credit losses to total loans

 

1.00

 

 

 

0.95

 

 

 

0.81

 

Allowance for credit losses to adjusted loans(1)

 

1.00

 

 

 

0.95

 

 

 

0.81

 

Net charge-offs to average loans

 

 

 

 

0.34

 

 

 

*

 

 

 

 

 

 

 

Assets Under Management

$

7,141,453

 

 

$

6,752,981

 

 

$

6,382,036

 

 

 

 

 

 

 

Market Data

 

 

 

 

 

Book value per share at period end

 

25.52

 

 

 

25.33

 

 

 

25.22

 

Tangible book value per common share(1)

 

22.21

 

 

 

22.01

 

 

 

21.85

 

Weighted average outstanding shares, basic

 

9,621,309

 

 

 

9,572,582

 

 

 

9,503,715

 

Weighted average outstanding shares, diluted

 

9,710,764

 

 

 

9,572,582

 

 

 

9,732,674

 

Shares outstanding at period end

 

9,621,309

 

 

 

9,581,183

 

 

 

9,507,564

 

 

 

 

 

 

 

Consolidated Capital

 

 

 

 

 

Tier 1 capital to risk-weighted assets

 

9.77

%

 

 

9.40

%

 

 

9.28

%

CET1 to risk-weighted assets

 

9.77

 

 

 

9.40

 

 

 

9.28

 

Total capital to risk-weighted assets

 

13.15

 

 

 

12.59

 

 

 

12.39

 

Tier 1 capital to average assets

 

7.73

 

 

 

7.77

 

 

 

7.75

 

 

 

 

 

 

 

Bank Capital

 

 

 

 

 

Tier 1 capital to risk-weighted assets

 

11.00

 

 

 

10.54

 

 

 

10.29

 

CET1 to risk-weighted assets

 

11.00

 

 

 

10.54

 

 

 

10.29

 

Total capital to risk-weighted assets

 

12.02

 

 

 

11.45

 

 

 

11.12

 

Tier 1 capital to average assets

 

8.70

 

 

 

8.71

 

 

 

8.59

 

____________________
(1) Represents a Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
* Value results in an immaterial amount.

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)

 

 

Reconciliations of Non-GAAP Financial Measures

 

 

As of or for the Three Months Ended

 

March 31,

 

December 31,

 

March 31,

(Dollars in thousands, except share and per share amounts)

2024

 

2023

 

2023

Tangible Common

 

 

 

 

 

Total shareholders' equity

$

245,528

 

 

$

242,738

 

 

$

239,822

 

Less: goodwill and other intangibles, net

 

31,797

 

 

 

31,854

 

 

 

32,040

 

Tangible common equity

$

213,731

 

 

$

210,884

 

 

$

207,782

 

 

 

 

 

 

 

Common shares outstanding, end of period

 

9,621,309

 

 

 

9,581,183

 

 

 

9,507,564

 

Tangible common book value per share

$

22.21

 

 

$

22.01

 

 

$

21.85

 

Net income/(loss) available to common shareholders

 

2,515

 

 

 

(3,219

)

 

 

3,820

 

Return on tangible common equity (annualized)

 

4.71

%

 

 

(6.11

)%

 

 

7.35

%

 

 

 

 

 

 

Efficiency

 

 

 

 

 

Non-interest expense

$

19,696

 

 

$

18,276

 

 

$

20,528

 

Less: amortization

 

57

 

 

 

62

 

 

 

64

 

Adjusted non-interest expense

$

19,639

 

 

$

18,214

 

 

$

20,464

 

 

 

 

 

 

 

Total income before non-interest expense

$

23,275

 

 

$

13,919

 

 

$

25,689

 

Less: unrealized (loss)/gain recognized on equity securities

 

(6

)

 

 

(2

)

 

 

10

 

Less: net loss on loans accounted for under the fair value option

 

(302

)

 

 

(91

)

 

 

(543

)

Less: net gain/(loss) on loans held for sale at fair value

 

117

 

 

 

 

 

 

(178

)

Plus: provision/(release) for credit losses

 

72

 

 

 

8,493

 

 

 

(310

)

Gross revenue

$

23,538

 

 

$

22,505

 

 

$

26,090

 

Efficiency ratio

 

83.44

%

 

 

80.93

%

 

 

78.44

%

 

 

 

 

 

 

Allowance for Credit Loss to Adjusted Loans

 

 

 

 

 

Total loans held for investment

 

2,480,196

 

 

 

2,536,140

 

 

 

2,475,084

 

Less: PPP loans

 

3,779

 

 

 

4,343

 

 

 

6,100

 

Less: loans accounted for under fair value

 

12,276

 

 

 

14,129

 

 

 

21,052

 

Adjusted loans

$

2,464,141

 

 

$

2,517,668

 

 

$

2,447,932

 

 

 

 

 

 

 

Allowance for credit losses

$

24,630

 

 

$

23,931

 

 

$

19,843

 

Allowance for credit losses to adjusted loans

 

1.00

%

 

 

0.95

%

 

 

0.81

%