Bay Street News

First Western Reports First Quarter 2024 Financial Results

First Quarter 2024 Summary

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.

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 %

 


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