First Western(US:MYFW)2024-08-02 20:16Financial Performance - For the three months ended June 30, 2024, net income available to common shareholders was $1.1 million, a decrease of $0.4 million, or 28.6%, compared to the same period in 2023[158]. - For the six months ended June 30, 2024, net income available to common shareholders was $3.6 million, a decrease of $1.7 million, or 32.6%, compared to the same period in 2023[159]. - Non-interest income increased by $4.5 million for the six months ended June 30, 2024, driven by an increase in net gain on mortgage loans[159]. - Non-interest income increased by $3.0 million, or 76.0%, to $7.0 million for the three months ended June 30, 2024 compared to the same period in 2023, driven by a rise in net gain on mortgage loans[169]. - The Wealth Management segment reported income before income tax of $645,000 for the three months ended June 30, 2024, down from $2,429,000 in the same period of 2023[181]. Interest Income and Expenses - Net interest income for the three months ended June 30, 2024, was $15.8 million, a decrease of $2.7 million, or 14.4%, compared to the same period in 2023[160]. - The Company experienced a $7.0 million decrease in net interest income for the six months ended June 30, 2024, primarily due to higher rates on deposits and borrowings[159]. - For the six months ended June 30, 2024, net interest income was $31.8 million, a decrease of $6.2 million, or 16.2%, compared to the same period in 2023[161]. - Interest expense on deposits increased significantly, with total interest-bearing liabilities averaging $2.14 billion for the six months ended June 30, 2024, resulting in interest paid of $44.60 million[165]. - The average interest rate on money market deposit accounts increased to 4.34% for the three months ended June 30, 2024, compared to 3.81% for the same period in 2023[240]. Asset Management - The Company provided fiduciary and advisory services on $7.0 billion of assets under management (AUM) as of June 30, 2024[149]. - Total Assets Under Management (AUM) decreased by $129 million, or 1.8%, during the three months ended June 30, 2024, primarily due to asset withdrawals in custody accounts[196]. - For the six months ended June 30, 2024, AUM increased by $259 million, or 3.8%, attributed to contributions and improving market conditions[196]. - The ending balance of Total Assets Under Management as of June 30, 2024, was $7,012 million, compared to $6,504 million as of June 30, 2023[196]. Loan Portfolio - The loan portfolio as of June 30, 2024, amounted to $2.46 billion, with 1-4 family residential loans making up 37.4% of the total[207]. - Non-performing loans decreased from $50,816 thousand as of December 31, 2023, to $37,626 thousand as of June 30, 2024, representing a reduction of approximately 26%[216]. - The company reported $3.1 million in outstanding PPP loans as of June 30, 2024, down from $4.2 million at the end of 2023[206]. - The construction and development loans decreased to $307.5 million, accounting for 12.6% of the total loan portfolio as of June 30, 2024[207]. Deposits and Borrowings - Total deposits decreased by $118.1 million, or 4.7%, to $2.41 billion as of June 30, 2024, from December 31, 2023[240]. - Total time deposits as of June 30, 2024 were $519.6 million, an increase of $23.1 million, or 4.7%, from December 31, 2023[243]. - FHLB borrowings increased to $178.7 million as of June 30, 2024, compared to $91.2 million as of December 31, 2023[246]. Credit Losses and Provisions - The allowance for credit losses increased to $24.27 million as of June 30, 2024, compared to $20.08 million in the same period of 2023[165]. - The provision for credit losses for the six months ended June 30, 2024, was $2,680 thousand, compared to $2,209 thousand for the same period in 2023, indicating an increase of about 21.3%[233]. - The allowance for credit losses to non-accrual loans increased to 72.61% as of June 30, 2024, compared to 47.09% as of December 31, 2023[216]. Regulatory Compliance and Capital - The company remains in compliance with all applicable regulatory capital requirements, classified as "well capitalized" as of June 30, 2024[256]. - The Bank's Tier 1 capital to risk-weighted assets ratio improved to 11.22% as of June 30, 2024, up from 10.54% as of December 31, 2023[257]. - Total capital to risk-weighted assets ratio for the consolidated company was 13.44% as of June 30, 2024, compared to 12.59% as of December 31, 2023[257]. Interest Rate Risk Management - The company actively monitors and manages interest rate risk exposure, with reviews conducted at least quarterly by the board of directors[261]. - A 200 basis point increase in interest rates would result in a 7.41% decrease in net interest income and an 11.30% decrease in the fair value of equity[262]. - The balance sheet maintains a relatively consistent interest rate risk profile compared to December 31, 2023, according to model simulations[263].