First Western(MYFW) - 2024 Q4 - Annual Report

Financial Performance - For the year ended December 31, 2024, the company reported net income available to common shareholders of $8.5 million, a 63.5% increase from$ 5.2 million in 2023[303]. - Net income for 2024 increased to $8,473,000, up from$ 5,225,000 in 2023, representing a 62.5% year-over-year growth[472]. - Earnings per common share (basic) increased to $0.88 in 2024 from$ 0.55 in 2023, a 60% increase[472]. - Total comprehensive income for 2024 was $8,893,000, compared to$ 5,544,000 in 2023, representing a 60.5% increase[472]. Revenue and Income Sources - Total revenues of $90.1 million and$ 7.32 billion in assets under management (AUM)[291]. - Non-interest income increased by $5.8 million in 2024, driven by higher net gains on mortgage loans and increased risk management and insurance fees[303]. - Non-interest income increased to$ 27,680,000 in 2024, up from $21,948,000 in 2023, reflecting a 26.2% growth[469]. - Total interest and dividend income rose to$ 152,651,000 in 2024, compared to $145,558,000 in 2023, marking a 4.5% increase[469]. Interest Income and Expenses - Net interest income before provision for credit losses was$ 64.3 million for 2024, a decrease of 9.6% compared to 2023, primarily due to a $174.2 million increase in average interest-bearing deposit balances[304]. - The company's net interest margin for 2024 was 2.37%, down from 2.62% in 2023, while the net interest spread decreased from 1.71% to 1.50%[304]. - Average loan yield increased to 5.70% in 2024 from 5.43% in 2023, attributed to elevated interest rates impacting new loan production[305]. - Net interest income after provision for credit losses was$ 62,391,000 in 2024, compared to $60,750,000 in 2023, a 2.7% increase[469]. Assets and Liabilities - Total assets as of December 31, 2024, were$ 2.92 billion, with total revenues of $90.1 million and$ 7.32 billion in assets under management (AUM)[291]. - The company reported a total of $2.85 billion in assets as of December 31, 2024, up from$ 2.82 billion in 2023[8][10]. - Total deposits decreased by $14.8 million, or 0.6%, to$ 2.51 billion as of December 31, 2024, primarily driven by operating account fluctuations and clients using liquidity for strategic investments[341]. - Cash and cash equivalents decreased by $18.401 million, or 7.2%, to$ 236.041 million as of December 31, 2024[337]. Credit Losses and Risk Management - The provision for credit losses recorded for the year ended December 31, 2024 was $1.9 million, a significant decrease from$ 10.4 million in 2023, attributed to $9.0 million of net charge-offs[12][13]. - The total allowance for credit losses at the end of 2024 was$ 18.33 million, down from $23.93 million at the end of 2023, reflecting a decrease in expected credit losses[392]. - The allowance for credit losses to total loans ratio decreased to 0.76% in 2024 from 0.95% in 2023, indicating a reduction in risk[392]. - The company maintains a credit management program to mitigate credit risk, with a focus on early identification and management of problem loans[12][13]. Operational Expenses - The increase in non-interest expense was primarily due to higher operational costs related to non-performing asset workouts and technology enhancements[307]. - Total non-interest expense increased by$ 2.855 million, or 3.8%, to $78.492 million for the year ended December 31, 2024, compared to$ 75.637 million in 2023[321]. - Non-interest expense rose by 3.8% to $78.5 million, driven by operational costs related to OREO write-downs and technology enhancements[20]. Capital and Regulatory Compliance - The company has adopted the Basel III regulatory capital framework, exceeding the current well-capitalized regulatory requirements as of December 31, 2024[302]. - The Bank was classified as "well capitalized" under prompt corrective action regulations as of December 31, 2024[419]. - As of December 31, 2024, the Bank's Tier 1 capital to risk-weighted assets ratio was 11.41%, up from 10.54% in 2023[420]. - The Bank's total capital to risk-weighted assets ratio was 12.10% for the Bank and 13.12% for the consolidated entity as of December 31, 2024[420]. Loan Portfolio and Performance - Total loans amounted to$ 2.425565 billion as of December 31, 2024, with fixed-rate loans constituting $1.003445 billion and floating-rate loans$ 1.422120 billion[364]. - Non-performing loans totaled $12.8 million, a decrease from$ 50.8 million in 2023, indicating improved loan quality[378]. - The largest category of the loan portfolio is Commercial Real Estate (CRE), with Non-Owner Occupied CRE accounting for 25.3% of total loans in 2024, up from 21.6% in 2023[359]. - The company conducts regular loan reviews and stress tests to assess risk levels in the loan portfolio, ensuring robust credit policies are in place[363].