Financial Data and Key Metrics - The company held its Q4 2024 earnings conference call on January 24, 2025, with key management participants including Scott Wylie (Chairman and CEO), Julie Courkamp (COO), and David Weber (CFO) [1][3] - The call included forward-looking statements regarding the company's future performance and financial condition, with a reminder that actual results may differ due to various risks and uncertainties [5][6] Business Line Data and Key Metrics - No specific data or metrics related to individual business lines were provided in the content Market Data and Key Metrics - No specific data or metrics related to market performance were provided in the content Company Strategy and Industry Competition - No specific details on company strategy, development direction, or industry competition were provided in the content Management Commentary on Operating Environment and Future Outlook - Management emphasized the inclusion of forward-looking statements in the call, highlighting potential risks and uncertainties that could impact future results [5][6] Other Important Information - The company used a slide presentation during the call, which was available for download on the Investor Relations website [4] - Non-GAAP measures were referenced during the call, intended to supplement but not replace GAAP measures [6] Q&A Session Summary - No specific questions or answers from the Q&A session were provided in the content

Earnings Performance - First Western reported quarterly earnings of $0 28 per share, missing the Zacks Consensus Estimate of $0 34 per share, representing an earnings surprise of -17 65% [1] - The company's earnings were $0 03 per share a year ago, showing significant year-over-year growth despite the miss [1] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Revenue Performance - First Western posted revenues of $23 37 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 6 90% [2] - Year-ago revenues were $22 41 million, indicating a modest year-over-year increase [2] - The company has topped consensus revenue estimates just once over the last four quarters [2] Stock Performance - First Western shares have lost about 7 4% since the beginning of the year, underperforming the S&P 500's gain of 3 5% [3] - The stock's immediate price movement will depend on management's commentary on the earnings call [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0 30 on $25 1 million in revenues [7] - For the current fiscal year, the consensus EPS estimate is $1 74 on $108 8 million in revenues [7] - The estimate revisions trend for First Western is unfavorable, translating into a Zacks Rank 5 (Strong Sell) [6] Industry Context - First Western belongs to the Zacks Banks - Midwest industry, which is currently in the top 12% of the 250 plus Zacks industries [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] Peer Comparison - First Merchants, another stock in the same industry, is expected to post quarterly earnings of $0 90 per share, representing a year-over-year change of +3 5% [9] - First Merchants' revenues are expected to be $161 3 million, up 3 1% from the year-ago quarter [9] - The consensus EPS estimate for First Merchants has remained unchanged over the last 30 days [9]

Core Viewpoint - First Western Financial, Inc. reported a net income of $2.7 million for Q4 2024, showing a significant improvement compared to previous quarters and the same quarter last year, indicating a positive trend in profitability and operational efficiency [3][7][9]. Financial Performance - Net income available to common shareholders was $2.7 million, or $0.28 per diluted share, for Q4 2024, compared to $2.1 million, or $0.22 per diluted share, for Q3 2024, and a net loss of $3.2 million, or $0.34 per diluted share, for Q4 2023 [3][7]. - Net interest income increased to $16.9 million in Q4 2024, up 8.3% from $15.6 million in Q3 2024, and up 3.7% from $16.3 million in Q4 2023 [11][14]. - The net interest margin rose to 2.45% in Q4 2024, an increase of 13 basis points from 2.32% in Q3 2024 and 8 basis points from 2.37% in Q4 2023 [12][13]. Loan and Deposit Growth - Total loans increased by 2.1% from $2.40 billion in Q3 2024 to $2.45 billion in Q4 2024, while average deposits rose by 4.0% from $2.40 billion to $2.50 billion during the same period [7][22]. - Total loans held for investment were $2.43 billion as of December 31, 2024, reflecting a 1.7% increase from $2.39 billion as of September 30, 2024 [21]. Non-Interest Income and Expenses - Total non-interest income for Q4 2024 was $6.5 million, a decrease of 7.1% from $7.0 million in Q3 2024, primarily due to a decrease in net gain on mortgage loans [14][15]. - Non-interest expense increased to $20.4 million in Q4 2024, up 5.2% from $19.4 million in Q3 2024, driven by a $1.1 million write-down of other real estate owned (OREO) [16][18]. Asset Quality - Non-performing assets totaled $49.0 million, or 1.68% of total assets, as of December 31, 2024, down from $52.1 million, or 1.79% of total assets, as of September 30, 2024 [26][27]. - The company recorded a provision release of $1.0 million in Q4 2024, compared to a provision expense of $0.5 million in Q3 2024 and $8.5 million in Q4 2023 [29]. Capital Position - As of December 31, 2024, the company exceeded the minimum capital levels required by regulators, with a Tier 1 capital ratio of 10.07% and a total capital ratio of 13.12% [30]. - Book value per common share increased by 1.4% from $25.75 as of September 30, 2024, to $26.10 as of December 31, 2024 [30][31].

Financial Performance - Net income available to common shareholders was $2.7 million in Q4 2024, up from $2.1 million in Q3 2024, and a net loss of $3.2 million in Q4 2023[3]. - Diluted earnings per share increased to $0.28 in Q4 2024 from $0.22 in Q3 2024[6]. - Net income available to common shareholders for Q4 2024 was $2,748,000, compared to $2,134,000 in Q3 2024[33]. - Net income available to common shareholders was $2,748,000, a significant improvement from a net loss of $3,219,000 in the same quarter last year[43]. - Return on tangible common equity (annualized) improved to 4.98%, up from 3.93% in the previous quarter[43]. - Gross revenue for the quarter was $23,787,000, an increase from $22,749,000 in the prior quarter[43]. Income and Expenses - Net interest income rose to $16.9 million in Q4 2024, an 8.3% increase from $15.6 million in Q3 2024[9]. - Non-interest income decreased to $6.5 million in Q4 2024, down 7.1% from $7.0 million in Q3 2024[12]. - Non-interest expense increased to $20.4 million in Q4 2024, a 5.2% rise from $19.4 million in Q3 2024[14]. - Total non-interest expense for Q4 2024 was $20,427,000, an increase from $19,368,000 in Q3 2024[33]. - Allowance for credit losses decreased to $18,330,000, down from $18,796,000 in the prior quarter[43]. - Allowance for credit losses to adjusted loans ratio was 0.76%, slightly down from 0.79% in the previous quarter[43]. Loans and Deposits - Total loans increased by 2.1% to $2.45 billion in Q4 2024 from $2.40 billion in Q3 2024[6]. - Total loans held for investment increased to $2,428,994 as of December 31, 2024, compared to $2,387,288 as of September 30, 2024, and decreased from $2,539,990 as of December 31, 2023[37]. - Average deposits grew by 4.0% to $2.50 billion in Q4 2024 from $2.40 billion in Q3 2024[6]. - Total deposits reached $2,514,209 as of December 31, 2024, slightly up from $2,503,054 as of September 30, 2024, but down from $2,529,039 as of December 31, 2023[37]. Asset Management - Total assets under management decreased to $7.32 billion as of December 31, 2024, from $7.47 billion as of September 30, 2024[21]. - Assets under management increased to $7,321,147 as of December 31, 2024, compared to $7,465,757 as of September 30, 2024, and $6,752,981 as of December 31, 2023[41]. - Total assets as of December 31, 2024, were $2,919,037, an increase from $2,911,948 as of September 30, 2024, and a decrease from $2,975,462 as of December 31, 2023[35]. Capital Ratios - As of December 31, 2024, the Bank's Tier 1 capital to risk-weighted assets was 11.41% and total capital to risk-weighted assets was 12.10%[25]. - The Tier 1 capital to risk-weighted assets ratio was 10.07% as of December 31, 2024, stable from 10.06% as of September 30, 2024, and up from 9.40% as of December 31, 2023[41]. - Book value per common share increased 1.4% from $25.75 as of September 30, 2024, to $26.10 as of December 31, 2024[25]. - Tangible book value per common share increased 1.6% from $22.47 as of September 30, 2024, to $22.83 as of December 31, 2024[26]. - Total shareholders' equity increased to $252,322,000 as of December 31, 2024, up from $248,831,000 in the previous quarter[43]. - Tangible common equity rose to $220,695,000, compared to $217,147,000 in the prior quarter[43]. Asset Quality - Non-performing assets totaled $49.0 million, or 1.68% of total assets, as of December 31, 2024, down from $52.1 million, or 1.79% of total assets, as of September 30, 2024[22]. - Non-performing loans decreased to $13,052 as of December 31, 2024, from $15,031 as of September 30, 2024, and significantly down from $51,125 as of December 31, 2023[41]. - The allowance for credit losses to non-performing loans ratio improved to 140.44% as of December 31, 2024, from 125.05% as of September 30, 2024, and significantly up from 46.81% as of December 31, 2023[41]. Efficiency Metrics - The efficiency ratio improved to 80.7% in Q4 2024 from 85.0% in Q3 2024[15]. - Efficiency ratio improved to 80.74%, compared to 84.98% in the previous quarter[43]. - The net interest margin improved to 2.45% for the three months ended December 31, 2024, compared to 2.32% for the three months ended September 30, 2024, and 2.37% for the three months ended December 31, 2023[39]. Upcoming Events - The company will host a conference call on January 24, 2025, to discuss the fourth quarter 2024 results[27].

Company Overview - First Western Financial, Inc. is a financial services holding company headquartered in Denver, Colorado, with operations in Colorado, Arizona, Wyoming, California, and Montana [5] - The company provides a fully integrated suite of wealth management services on a private trust bank platform, including deposit, loan, trust, wealth planning, and investment management products and services [5] - First Western's common stock is traded on the NASDAQ Global Select Market under the symbol "MYFW" [5] Upcoming Financial Results - First Western Financial will release its financial results for the fourth quarter ended December 31, 2024, after the markets close on Thursday, January 23, 2025 [1] - A conference call will be held on Friday, January 24, 2025, at 10:00 a.m. Mountain Time / 12:00 p.m. Eastern Time to discuss the financial results [2] - The conference call will be webcast live on the News & Events page of First Western's investor relations website, with an archived version available shortly after the live call [4]

Core Viewpoint - First Western Financial, Inc. will release its financial results for the fourth quarter ended December 31, 2024, on January 23, 2025, after market close [1] Financial Results Announcement - The financial results will be discussed in a conference call scheduled for January 24, 2025, at 10:00 a.m. Mountain Time / 12:00 p.m. Eastern Time [2] - Analysts and investors are invited to participate in the question-and-answer session during the conference call [2] Conference Call Details - Participants must register for the conference call to receive the dial-in number and personalized PIN code [3] - The conference call will be accessible via a Telephone Access link and will also be webcast live on the investor relations website [4] Company Overview - First Western Financial, Inc. is a financial services holding company based in Denver, Colorado, with operations in multiple states including Colorado, Arizona, Wyoming, California, and Montana [5] - The company offers a comprehensive suite of wealth management services on a private trust bank platform, including deposit, loan, trust, wealth planning, and investment management products [5] - First Western's common stock is traded on the NASDAQ Global Select Market under the symbol "MYFW" [5]

Financial Performance - For the three months ended September 30, 2024, net income available to common shareholders was $2.1 million, a decrease of $1.0 million, or 31.6%, compared to the same period in 2023[172]. - For the nine months ended September 30, 2024, net income available to common shareholders was $5.7 million, a decrease of $2.7 million, or 32.2%, compared to the same period in 2023[173]. - Non-interest income increased by $5.4 million for the nine months ended September 30, 2024, partially offsetting the decrease in net interest income[173]. - Non-interest income increased by $0.9 million, or 14.3%, to $7.0 million for the three months ended September 30, 2024, driven by higher net gains on mortgage loans and risk management fees[184]. - Total non-interest income for the nine months ended September 30, 2024, increased by $5.4 million, or 33.7%, to $21.2 million, primarily due to higher net gains on mortgage loans[186]. - The effective tax rate decreased to 20.1% for the three months ended September 30, 2024, compared to 26.1% for the same period in 2023[195]. Interest Income and Expenses - Net interest income for the three months ended September 30, 2024, was $15.6 million, a decrease of $1.2 million, or 7.1%, compared to the same period in 2023[174]. - The company experienced a $8.4 million decrease in net interest income for the nine months ended September 30, 2024, primarily due to higher rates on deposits and borrowings[173]. - For the nine months ended September 30, 2024, net interest income was $47.4 million, a decrease of $7.4 million or 13.4% compared to the same period in 2023[175]. - Average interest-bearing deposit rates increased to 4.19% and 4.17% for the three and nine months ended September 30, 2024, compared to 3.75% and 3.39% for the same periods in 2023[177]. - Total interest-bearing liabilities increased to $2.132 billion, with interest expense rising to $67.1 million for the three months ended September 30, 2024[180]. - Interest income decreased by $1.6 million, or 1.9%, for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to a decrease in loans[182]. Asset Management - Total assets as of September 30, 2024, were $2.91 billion, with total revenues of $65.7 million and $7.5 billion in assets under management (AUM)[163]. - Assets Under Management (AUM) increased by $454 million, or 6.5%, during the three months ended September 30, 2024, primarily driven by a net increase in market values[212]. - For the nine months ended September 30, 2024, AUM increased by $713 million, or 10.6%, attributed to contributions and improving market conditions year-over-year[212]. - Total Assets Under Management as of September 30, 2024, reached $7,466 million, compared to $6,396 million in the previous year[212]. - Contributions for the three months ended September 30, 2024, totaled $93 million, while withdrawals amounted to $262 million[212]. Loans and Credit Quality - Average loans outstanding decreased due to a net decline in several portfolios, with non-performing loans decreasing by $30.0 million[175]. - Non-performing assets totaled $51,450,000, with non-accrual loans accounting for 14,414,000, representing 0.61% of total loans[243]. - The company recorded $25.6 million of OREO in Q3 2024, increasing the carrying amount of OREO properties to $37.0 million[242]. - The allowance for credit losses to non-accrual loans was 130.40%, significantly higher than the previous year's 47.09%[243]. - The total amount of loans classified as substandard was $25.675 million as of September 30, 2024[246]. Deposits and Borrowings - Total deposits decreased by $26.0 million, or 1.0%, to $2.50 billion as of September 30, 2024, from December 31, 2023[258]. - Total average deposits for the three months ended September 30, 2024, increased by $43.7 million, or 1.9%, compared to $2.36 billion as of September 30, 2023[258]. - As of September 30, 2024, total borrowings decreased to $114.9 million from $178.1 million as of December 31, 2023, reflecting a lower reliance on FHLB and FRB borrowings due to decreased loans[262]. - The Company has pledged $1.30 billion in collateral for borrowings under the FHLB agreement as of September 30, 2024, with eligibility to borrow an additional $612.1 million[265]. Capital and Regulatory Compliance - The bank's capital ratios exceeded the current well-capitalized regulatory requirements established under Basel III as of September 30, 2024[171]. - Tier 1 capital to risk-weighted assets for the Bank improved to 11.39% as of September 30, 2024, up from 10.54% as of December 31, 2023[274]. - Total shareholders' equity increased by $6,093,000, or 2.5%, to $248,831,000 as of September 30, 2024, compared to $242,738,000 as of December 31, 2023[206]. Risk Management - The company actively monitors interest rate risk exposure, with quarterly reviews by the board of directors[280]. - Interest rate sensitivity analysis indicates potential changes in net interest income and economic value of equity under various interest rate scenarios[280]. - The company’s credit culture emphasizes conservative approaches to credit requests, ensuring strong credit underwriting practices across all loan types[228].

Financial Data and Key Metrics Changes - The company generated net income of $2.1 million, or $0.22 per diluted share in Q3 2024, which was double the EPS from the prior quarter [7] - The tangible book value per share increased by about 1% this quarter [7] - The loan to deposit ratio improved to 95% at the end of Q3, achieving the company's goal of reducing it to the mid-90% range [5] Business Line Data and Key Metrics Changes - Loans held for investment decreased by $73 million from the end of the prior quarter, with new loan production of $83 million compared to $50 million in the prior quarter [7][8] - Non-interest bearing deposits increased by 19% from the end of the prior quarter, contributing to a total deposit increase of $92 million [5][8] - Assets under management (AUM) increased by $454 million in Q3, reflecting nearly a 17% increase over the past year [8] Market Data and Key Metrics Changes - The company experienced a decrease in gross revenue by 1.7% from the prior quarter, attributed to a problem credit migrating to non-accrual status and increased interest expenses [9] - Net interest income decreased by 1.3% from the prior quarter, with a net interest margin (NIM) of 2.32%, down 3 basis points from the previous quarter [10][11] Company Strategy and Development Direction - The company continues to prioritize prudent risk management and conservative underwriting criteria while focusing on deposit gathering and maintaining disciplined expense control [5][14] - There is an expectation of solid operating leverage in the near term due to modest growth in the balance sheet, improved net interest margin, and higher fee income [14][15] - The company aims to capitalize on market disruptions faced by competing banks to add new clients and banking talent [14] Management's Comments on Operating Environment and Future Outlook - Management noted that overall economic activity remains healthy in their markets, with positive trends in asset quality and a reduction in non-performing loans [14][16] - The company expects to see continued improvement in financial performance and value creation for shareholders, driven by positive trends in key areas [16] Other Important Information - The company reported a higher level of non-interest bearing deposits, which will positively impact the cost of funds [11] - The company is seeing a positive trend in mortgage production, with September being the highest month in 2.5 years [12][34] Q&A Session Summary Question: Inquiry about credit and charge-offs - Management explained that a $10 million loan was moved to non-accrual status due to a liquidity issue with the borrower, but they expect a full recovery [18] - Charge-offs were primarily related to the conversion of a large credit into OREO, with the value of OREO being higher than the loan balance [18] Question: Classified loans and asset quality - Classified loans decreased significantly, with non-accrual classified at $14.4 million compared to $37.6 million in the prior quarter [19] Question: Deposit growth and sustainability - The growth in non-interest bearing deposits was broad-based among customers, indicating a positive trend in core relationships [20][22] Question: Deposit costs and NIM - The company reported a spot NIM of 2.40% at quarter-end, with expectations for positive trends in the future [22][24] Question: Mortgage business outlook - Management noted that while mortgage revenues were down in Q3, there is pent-up demand and a strong pipeline due to new MLO hires [34][36] Question: Future expansion plans - The company is looking to grow its presence in Arizona and Montana, with plans to add more personnel and branches in these markets [46][48]

Financial Performance - Net income available to common shareholders was $2.1 million, resulting in diluted earnings per share of $0.22 in 3Q24[6] - Net interest income after provision for credit losses improved to $15.1 million compared to the prior quarter's $13.4 million[6] - Tangible book value per share increased approximately 0.9% to $22.47[11] Loan Portfolio - Total loans held for investment decreased by $73.4 million from the prior quarter[16] - New loan production improved in 3Q24 to $82.8 million, with an average rate on new loan production of 7.49%[16] Deposits - Total deposits increased 3.7% from $2.41 billion in 2Q24 to $2.50 billion in 3Q24[22] - Noninterest-bearing deposits increased 19% from $397 million in 2Q24 to $474 million in 3Q24[22] Assets Under Management - Total assets under management increased 6.5% during the quarter to $7.5 billion and increased 16.7% from 3Q23[25] Revenue and Expenses - Gross revenue decreased 1.7% from the prior quarter[29] - Net interest income decreased 1.3% from the prior quarter[29] - Non-interest income remained flat quarter over quarter[29] - Non-interest expense increased to $19.4 million from $19.0 million in the second quarter[44]

Company Performance - First Western (MYFW) reported quarterly earnings of $0.22 per share, missing the Zacks Consensus Estimate of $0.30 per share, and down from $0.32 per share a year ago, representing an earnings surprise of -26.67% [1] - The company posted revenues of $22.54 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 6.47%, compared to $22.87 million in the same quarter last year [1] - Over the last four quarters, First Western has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [1] Stock Performance - First Western shares have increased by approximately 6.1% since the beginning of the year, while the S&P 500 has gained 21.5% [2] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.33 on revenues of $24.9 million, and for the current fiscal year, it is $1 on revenues of $95.6 million [4] - The estimate revisions trend for First Western is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [4] Industry Context - The Banks - Midwest industry, to which First Western belongs, is currently in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [5] - Empirical research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [5]