Core Insights - First Western Financial, Inc. has appointed Alex McDougall as Regional President for its Arizona offices, bringing over 18 years of experience in private banking and wealth management [1][2] - McDougall previously held senior roles at JPMorgan and First Republic Bank, where he achieved significant growth in market share and deposits [1][2] - His appointment reflects First Western Trust's strategic investment in Arizona, emphasizing community engagement and support for local businesses [3][4] Company Strategy - First Western Trust aims to strengthen its presence in Arizona, a key growth market, by focusing on client service and community involvement [3][5] - The firm continues to support local entrepreneurs and nonprofit organizations through partnerships and philanthropy [4][5] - Leadership at First Western believes that exceptional client service and personal connection are critical differentiators in the banking industry [4] Leadership and Experience - Alex McDougall has received multiple industry accolades, including the President's Circle Award and Top Contributions to Banking Award, highlighting his ability to drive client satisfaction and business growth [2] - His leadership style aligns with First Western's philosophy of serving as trusted advisors, which is expected to enhance the firm's client-focused approach in Arizona [4][5] - McDougall holds a Business Administration degree and has served on various nonprofit boards, indicating a commitment to community service [5]

Financial Performance - For the three months ended September 30, 2025, net income available to common shareholders was $3.2 million, a 52.4% increase from $2.1 million for the same period in 2024[208]. - The company reported a $4.2 million, or 73.7% increase in net income available to common shareholders for the nine months ended September 30, 2025, totaling $9.9 million[210]. - For the nine months ended September 30, 2025, net interest income increased by $7.4 million, or 15.6%, to $54.8 million compared to the same period in 2024[215]. - Net interest income for the three months ended September 30, 2025, was $19.5 million, a 25.0% increase compared to the same period in 2024, driven by a $363.5 million increase in average interest-earning assets[211]. Assets and Liabilities - Total assets as of September 30, 2025, were $3.24 billion, with fiduciary and advisory services provided on $7.43 billion of assets under management (AUM)[198]. - Total assets increased by $321.4 million, or 11.0%, to $3.24 billion as of September 30, 2025, compared to $2.92 billion as of December 31, 2024[245]. - Loans, net of allowance increased by $162.6 million, or 6.8%, to $2.57 billion as of September 30, 2025, driven by new loan production[247]. - Total loans held for investment amounted to $2,590.8 million as of September 30, 2025, an increase from $2,425.6 million as of December 31, 2024[266]. Income and Expenses - Non-interest income decreased by $0.7 million for the nine months ended September 30, 2025, primarily due to lower net gains on mortgage loans and trust management fees[210]. - Non-interest income for Q3 2025 decreased by $0.1 million, or 1.9%, to $6.8 million compared to Q3 2024, primarily due to declines in risk management and insurance fees[224]. - Non-interest expense for Q3 2025 increased by $0.7 million, or 3.6%, to $20.1 million, primarily due to higher salaries and employee benefits[231]. - Non-interest expense for the nine months ended September 30, 2025 decreased by $0.5 million, or 0.8%, to $58.5 million compared to the same period in 2024[232]. Credit Quality - The provision for credit losses increased by $1.8 million for the three months ended September 30, 2025, reflecting loan growth and specific reserve provisions[208]. - Non-performing assets decreased to $22.5 million as of September 30, 2025, down from $48.7 million as of December 31, 2024, primarily due to the sale of two OREO properties[276]. - The allowance for credit losses (ACL) on pooled loans was $17.0 million as of September 30, 2025, reflecting a decrease from $18.0 million as of December 31, 2024[278]. - Non-accrual loans increased to $18.1 million as of September 30, 2025, compared to $12.8 million as of December 31, 2024, indicating a rise in credit risk[277]. Deposits and Borrowings - Total deposits increased by $334.7 million, or 13.3%, to $2.85 billion as of September 30, 2025, compared to December 31, 2024[283]. - Average deposits for the three months ended September 30, 2025 were $2.77 billion, an increase of $369.0 million, or 15.4%, compared to $2.40 billion for the same period in 2024[283]. - Borrowings decreased to $95.6 million as of September 30, 2025, from $109.6 million as of December 31, 2024[288]. - Interest-bearing deposits increased to 76.62% of total deposits in Q3 2025, compared to 71.51% in Q3 2024[292]. Market and Investment Performance - Assets Under Management (AUM) decreased by $64.0 million, or 0.9%, during the three months ended September 30, 2025, primarily due to net withdrawals[256]. - AUM increased by $112.0 million, or 1.5%, for the nine months ended September 30, 2025, primarily due to improved market conditions[256]. - The yield on total assets under management was 0.25% as of September 30, 2025, consistent with the previous period[256]. - The company experienced a net market change of $81 million for the nine months ended September 30, 2025, contributing to the increase in AUM[256]. Regulatory Compliance and Capital - The bank's capital ratios exceeded the current well-capitalized regulatory requirements established under Basel III as of September 30, 2025[207]. - The company maintained compliance with all applicable regulatory capital requirements as of September 30, 2025, and was classified as "well capitalized"[294]. - Future contractual obligations total $471.725 million, with $350.086 million due within one year[296]. Interest Rate Management - Average interest-bearing deposit rates decreased to 3.63% for the three months ended September 30, 2025, from 4.19% in the same period of 2024[212]. - A 200 basis point increase in interest rates is projected to increase net interest income by 14.54% as of September 30, 2025[301]. - Interest rate risk exposure is actively monitored and managed, with quarterly reviews by the Board of Directors[300].

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Financial Data and Key Metrics Changes - The company generated net income of $3.2 million or $0.32 per diluted share in Q3 2025, a 45% increase from the same quarter last year [6][10] - Tangible book value per share increased by 1.2% this quarter [6] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year-over-year [9] - Net interest income increased by 8.9% from the prior quarter and 25% year-over-year [10] - Non-interest income increased by 8.5% from the prior quarter, primarily due to increases in all major fee categories [10] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50 million from the end of the prior quarter, with new loan production of $146 million in Q3 [7] - Total deposits increased by $320 million from the end of the prior quarter, driven by new accounts and existing client balance growth [8] - Trust and investment management assets under management decreased by $64 million, primarily due to net withdrawals in low-fee product categories [8] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [7] - The spot rate on deposits at the end of the quarter was 3.04% [24] - The company achieved a 63% beta on money market accounts in Q3, which is expected to continue into Q4 [25] Company Strategy and Development Direction - The company focuses on generating new loans and deposits through superior service rather than competing on rates [4] - A conservative approach to new loan production is maintained, with disciplined underwriting and pricing criteria [4] - The company aims to leverage market disruptions from M&A activity to add new clients and banking talent [12][37] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects strong loan deposit pipelines to continue into Q4 [12] - There are no indications of meaningful deterioration in asset quality, with stable trends in the loan portfolio [12] - The company anticipates positive trends in net interest margin and fee income, contributing to improved financial performance [12][70] Other Important Information - The company has made significant investments in technology and team restructuring to enhance operational efficiency [68] - The efficiency ratio is trending down with operating leverage increasing, indicating improved profitability [70] Q&A Session Summary Question: Insights on deposit growth and mortgage department contributions - Management indicated that the deposit growth is expected to remain stable and provide a higher deposit base for future growth [16] Question: Details on the newly added non-performing asset (NPA) - The NPA was a C&I loan with performance issues, and a specific provision has been made for it [17] Question: Expectations for net interest margin (NIM) in Q4 - Management expects NIM expansion, potentially around five basis points, as liquidity is redeployed into the loan portfolio [20] Question: Spot rate on deposits and beta expectations - The spot rate was reported at 3.04%, with a beta of approximately 63% expected to continue [24][25] Question: Wealth management business and assets under management (AUM) - Management is focused on fee income rather than AUM, with positive growth noted in agency accounts [27] Question: Opportunities from M&A disruptions - Management sees ongoing market disruptions as beneficial for attracting new clients and talent [37][52]

Financial Data and Key Metrics Changes - The company generated net income of $3.2 million or $0.32 per diluted share in Q3 2025, a 45% increase from the same quarter last year [6] - Tangible book value per share increased by 1.2% this quarter [6] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year-over-year [9] - Net interest income rose for the fourth consecutive quarter, increasing 8.9% from the prior quarter and 25% year-over-year [9][10] - Non-interest income increased by more than $500,000 or 8.5% from the prior quarter [10] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50 million from the end of the prior quarter, with new loan production of $146 million in Q3 [7] - Total deposits increased by $320 million from the end of the prior quarter, driven by new accounts and existing client balance growth [8] - Trust and investment management assets under management decreased by $64 million, primarily due to net withdrawals from low-fee product categories [8] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [7] - The spot rate on deposits at the end of the quarter was 3.04% [24] - The company achieved a 63% beta on money market accounts in Q3, which is expected to continue into Q4 [25] Company Strategy and Development Direction - The company aims to grow deposits and loans by focusing on superior service rather than competing on pricing [4] - Management is optimistic about opportunities arising from market disruptions due to M&A activity in Colorado [12] - The company is focused on creating operating leverage by growing revenues faster than expenses [43] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects strong loan and deposit pipelines to continue into Q4 [12] - There are no indications of meaningful deterioration in asset quality, with stable trends in the loan portfolio [12] - The company anticipates NIM expansion as liquidity is deployed into the loan portfolio [19] Other Important Information - The company has made significant investments in technology and team restructuring to enhance operational efficiency [68] - The efficiency ratio is trending down with operating leverage increasing [70] - The company was named one of the KBW Bank Honor Roll members in 2025 for its performance [70] Q&A Session Summary Question: Insights on deposit growth and mortgage department contributions - Management indicated that the deposit growth is expected to remain stable and provide a higher base for future growth [16] Question: Details on the credit related to the downgraded loan - A specific provision was made for a C&I loan that was downgraded, and management expects it to be resolved over time [17] Question: Expectations for NIM in Q4 - Management anticipates a potential NIM expansion of about five basis points in Q4 [20] Question: Thoughts on the beta for additional Fed rate cuts - The beta has been declining, with a reasonable expectation of around 63% for the fourth quarter [25] Question: Update on wealth management and AUM strategy - The company is focused on fee income growth rather than AUM, with positive progress noted in agency accounts [27] Question: Opportunities from M&A disruptions - Management believes that ongoing market disruptions create opportunities for talent acquisition and client growth [37] Question: Plans for redeploying excess cash - The company expects to continue deploying liquidity into the loan portfolio, with strong loan demand trends anticipated [61]

Financial Data and Key Metrics Changes - The company generated net income of $3,200,000 or $0.32 per diluted share in Q3 2025, representing a 45% increase from the same quarter last year [5] - Tangible book value per share increased by 1.2% this quarter [5] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year over year [11] - Net interest income increased for the fourth consecutive quarter, up 8.9% from the prior quarter and 25% year over year [12] - Non-interest income increased by more than $500,000 or 8.5% from the prior quarter [13] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50,000,000 from the end of the prior quarter, with new loan production of $146,000,000 in Q3 [6][8] - Total deposits increased by $320,000,000 from the end of the prior quarter, driven by new accounts and existing client balance growth [9] - Trust and investment management assets under management decreased by $64,000,000, primarily due to net withdrawals [10] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [8] - The spot rate on deposits at the end of the quarter was 3.04% [30] - The company achieved a beta of approximately 63% on money market accounts in Q3 [31] Company Strategy and Development Direction - The company maintains a conservative approach to new loan production while focusing on service quality rather than competing on pricing [4] - The management is optimistic about continued growth opportunities in the Colorado market due to ongoing M&A activity [16] - The company is focused on creating operating leverage by growing revenues faster than expenses, aiming for improved efficiency ratios [50] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects solid balance sheet growth in Q4 [17] - There are no indications of meaningful deterioration in asset quality, with positive trends expected to continue [17] - The company plans to leverage investments made in technology and team restructuring to drive future growth [79] Other Important Information - The company was named one of 16 KBW Bank honor roll members in 2025 for its performance [86] - The management is optimistic about finishing the year strong and delivering shareholder value into 2026 [87] Q&A Session Summary Question: Insights on deposit growth and its sustainability - Management indicated that the deposits seen in Q3 are expected to remain and provide a higher deposit base for Q4 [21] Question: Details on the newly added non-performing asset (NPA) - The NPA was a commercial and industrial loan that had performance issues, with a specific provision set aside for it [22][23] Question: Expectations for net interest margin (NIM) in Q4 - Management anticipates NIM expansion due to liquidity on the balance sheet being redeployed into loans, estimating a potential increase of five basis points [24][26] Question: Update on wealth management and assets under management (AUM) - The company is focused on fee income growth rather than AUM, with recent progress noted in agency accounts [33] Question: Thoughts on future loan demand and liquidity deployment - Management expects loan demand trends to continue, with a focus on gradually redeploying excess liquidity into the loan portfolio over the next year [73][75]

Financial Data and Key Metrics Changes - The company generated net income of $3.2 million or $0.32 per diluted share in Q3 2025, a 45% increase from the same quarter last year [5] - Tangible book value per share increased by 1.2% this quarter [6] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year over year [9] - Net interest income increased by 8.9% from the prior quarter and 25% year over year [10] - Non-interest income increased by 8.5% from the prior quarter, primarily due to increases in all major fee categories [11] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50 million from the end of the prior quarter, with new loan production of $146 million in Q3 [6][7] - Total deposits increased by $320 million from the end of the prior quarter, driven by new accounts and existing client balances [8] - Trust and investment management assets under management decreased by $64 million, primarily due to net withdrawals in low-fee product categories [9] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [7] - The spot rate on deposits at the end of the quarter was 3.04% [22] - The company achieved a 63% beta on money market accounts in Q3, which is expected to remain reasonable for Q4 [23] Company Strategy and Development Direction - The company aims to leverage its investments in technology and product teams to drive shareholder value and improve efficiency [66][68] - The focus remains on maintaining a conservative approach to new loan production while expanding deposit relationships [4][5] - The company is optimistic about growth opportunities arising from market disruptions and M&A activity in Colorado [12][35] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects continued solid balance sheet growth in Q4 [12][13] - There are no indications of meaningful deterioration in asset quality, with positive trends expected to continue [13] - The company anticipates NIM expansion in Q4 due to liquidity deployment into the loan portfolio [18][19] Other Important Information - The company has been recognized as one of the KBW Bank Honor Roll members in 2025 for its performance [68] - The management team has made significant investments in technology and operational efficiency, which are expected to yield positive results [66][68] Q&A Session Summary Question: Insights on deposit growth and its sustainability - Management indicated that the deposits seen in Q3 are expected to remain and provide a higher deposit base for Q4 [16] Question: Details on the MPA and related provisions - A specific provision was made for a downgraded C&I loan, which management expects to resolve over time [17] Question: Expectations for NIM in Q4 - Management anticipates NIM expansion, potentially achieving around five basis points of improvement [19] Question: Thoughts on deposit pricing and beta - The beta on money market accounts was around 63% in Q3, with expectations for it to decline over time [23] Question: Update on wealth management and AUM - Management is focused on improving fee income and has seen progress in agency accounts despite a decrease in AUM [25] Question: Future growth and balance sheet strategy - Management views the recent deposit influx as part of an ongoing effort to align loan-to-deposit ratios and expects continued growth into 2026 [30][35] Question: Opportunities from M&A disruptions - Management believes that market disruptions create opportunities for talent acquisition and client growth [34][40]

Third Quarter 2025 Conference Call Safe Harbor This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of First Western Financial, Inc.'s ("First Western") management with respect to, among other things, future events and First Western's financial performance. These statements are often, but not always, mad ...

Core Insights - First Western (MYFW) reported quarterly earnings of $0.32 per share, missing the Zacks Consensus Estimate of $0.38 per share, but showing an increase from $0.22 per share a year ago, resulting in an earnings surprise of -15.79% [1] - The company posted revenues of $26.3 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 3.12%, and up from $22.54 million year-over-year [2] - First Western shares have increased approximately 17.9% year-to-date, outperforming the S&P 500's gain of 13.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $27.2 million, and for the current fiscal year, it is $1.54 on revenues of $101.5 million [7] - The estimate revisions trend for First Western was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Banks - Midwest industry, to which First Western belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net income available to common shareholders was $3.2 million, or $0.32 per diluted share, for Q3 2025, compared to $2.5 million, or $0.26 per diluted share, in Q2 2025[3] - Non-interest income for Q3 2025 was $6.8 million, an increase of 7.9% from $6.3 million in Q2 2025[12] - Net income available to common shareholders for Q3 2025 was $3,186,000, a 27.3% increase compared to $2,503,000 in Q2 2025[32] - Basic earnings per common share for Q3 2025 was $0.33, compared to $0.26 in Q2 2025[32] - Return on tangible common equity (annualized) improved to 5.54%, compared to 4.40% in the previous quarter, showing an increase of 25.8%[42] Deposits and Loans - Total deposits increased by $320 million, or 12.6%, from $2.53 billion in Q2 2025 to $2.85 billion in Q3 2025[6] - Total loans held for investment were $2.59 billion as of September 30, 2025, an increase of $50 million, or 2.0%, compared to June 30, 2025[16] - Total deposits reached $2,848,911 thousand, a significant increase from $2,529,129 thousand in the previous quarter, reflecting a growth of 12.7%[38] - Total loans held for investment increased to $2,593,564 thousand, up from $2,543,194 thousand in the previous quarter, representing a growth of 1.97%[36] Income and Expenses - Net interest income rose by $1.6 million, or 8.9%, from $17.9 million in Q2 2025 to $19.5 million in Q3 2025[6] - Non-interest expense increased by 5.2% from $19.1 million in Q2 2025 to $20.1 million in Q3 2025[14] - Total interest and dividend income for Q3 2025 was $42,774,000, an increase of 14.4% from $37,500,000 in Q2 2025[32] - Net interest income after provision for credit losses was $17,197,000, up 6.7% from $16,111,000 in Q2 2025[32] Asset Management - Assets Under Management (AUM) decreased by $64 million, or 0.9%, from $7.50 billion as of June 30, 2025, to $7.43 billion as of September 30, 2025[20] - Assets under management stood at $7,433,029 thousand, slightly down from $7,497,361 thousand in the previous quarter, a decrease of 0.86%[40] Credit Quality - Non-performing assets totaled $22.7 million, or 0.70% of total assets, as of September 30, 2025, compared to $18.8 million, or 0.62% of total assets, as of June 30, 2025[21] - Non-performing loans rose to $18,293 thousand, compared to $14,394 thousand in the prior quarter, indicating an increase of 26.3%[40] - The allowance for credit losses was $20,967,000, compared to $18,994,000 in Q2 2025[34] - The allowance for credit losses to total loans ratio improved to 0.81%, compared to 0.75% in the previous quarter, indicating a strengthening of credit quality[40] Efficiency and Capital - The efficiency ratio improved to 76.4% in Q3 2025, compared to 78.8% in Q2 2025[15] - The efficiency ratio improved to 76.38%, down from 78.83% in the previous quarter, indicating better operational efficiency[42] - The Tier 1 capital to risk-weighted assets ratio was 9.80%, down from 9.96% in the previous quarter, indicating a slight decrease in capital adequacy[40] Shareholder Equity - Total shareholders' equity as of September 30, 2025, was $261,495,000, slightly up from $258,847,000 in Q2 2025[34] - Book value per common share increased by 1.1% from $26.64 as of June 30, 2025, to $26.92 as of September 30, 2025[24] - Book value per share increased to $26.92, up from $26.64 in the previous quarter, reflecting a growth of 1.05%[40] Future Outlook - The company anticipates continued growth in its wealth management services and plans to expand its market presence in Colorado, Arizona, Wyoming, California, and Montana[29]