First Western(US:MYFW)2025-08-01 20:16Financial Performance - For the three months ended June 30, 2025, net income available to common shareholders was $2.5 million, a 127.3% increase from $1.1 million for the same period in 2024[195]. - For the six months ended June 30, 2025, net income available to common shareholders was $6.7 million, an 86.1% increase from $3.6 million for the same period in 2024[196]. - The company reported a $0.6 million decrease in non-interest income for the three months ended June 30, 2025, primarily due to a decrease in net gain on mortgage loans and trust and investment management fees[195]. - Non-interest income for the three months ended June 30, 2025, decreased by $0.7 million, or 9.6%, to $6.3 million compared to $6.97 million in 2024, primarily due to lower net gains on mortgage loans and trust fees[211]. - Non-interest income for the six months ended June 30, 2025, decreased by $0.6 million, or 4.2%, to $13.7 million, driven by declines in net gains on mortgage loans and bank fees[212]. Net Interest Income - Net interest income for the three months ended June 30, 2025, was $17.9 million, a 13.3% increase from the same period in 2024[197]. - Net interest income for the six months ended June 30, 2025, was $35.3 million, an increase of $3.5 million, or 11.0%, compared to the same period in 2024[201]. - The net interest margin increased by 32 basis points to 2.67% for the second quarter of 2025 from 2.35% in the second quarter of 2024[197]. - The net interest margin increased by 30 basis points to 2.64% for the six months ended June 30, 2025, compared to 2.34% for the same period in 2024[201]. - The net interest rate spread increased to 1.98 for the three months ended June 30, 2025, compared to 1.45 for the same period in 2024[205]. Assets and Liabilities - Total assets as of June 30, 2025, were $3.03 billion, with fiduciary and advisory services provided on $7.50 billion of assets under management (AUM)[183]. - Total assets increased by $107.8 million, or 3.7%, to $3.03 billion as of June 30, 2025, compared to December 31, 2024[233]. - Loans, net of allowance increased by $113.9 million, or 4.7%, to $2.52 billion as of June 30, 2025, driven by new loan production[234]. - Total loans outstanding at the end of the period was $2.535 billion as of June 30, 2025, compared to $2.446 billion as of June 30, 2024[267]. - Total deposits increased by $14.9 million, or 0.6%, to $2.53 billion as of June 30, 2025, compared to December 31, 2024[271]. Non-Interest Expense - Non-interest expense for the three months ended June 30, 2025, increased by $0.1 million, or 0.5%, to $19.1 million, driven by higher occupancy and equipment costs[220]. - Non-interest expense for the six months ended June 30, 2025, decreased by $0.2 million, or 0.6%, to $38.5 million, primarily due to reductions in professional services[221]. Credit Losses and Non-Performing Assets - Provision for credit losses for the three months ended June 30, 2025, was $1.8 million, a decrease from $2.3 million in the same period of 2024, reflecting proactive management of problem credits[209]. - The total non-performing assets decreased to $18.8 million as of June 30, 2025, compared to $48.7 million as of December 31, 2024, primarily due to the sale of OREO properties[264]. - The allowance for credit losses (ACL) on loans was $18.0 million as of June 30, 2025, unchanged from December 31, 2024, with a provision of $0.0 million for pooled loans during the same period[266]. - The amortized cost basis of non-performing loans was $14.4 million as of June 30, 2025, compared to $12.8 million as of December 31, 2024, indicating an increase in non-performing loans[265]. Regulatory Compliance and Capital - The company has adopted the Basel III regulatory capital framework, with capital ratios exceeding the current well-capitalized regulatory requirements as of June 30, 2025[193]. - The Company was in compliance with all applicable regulatory capital requirements as of June 30, 2025, and was classified as "well capitalized"[283]. - Total shareholders' equity increased by $6.5 million, or 2.6%, to $258.8 million as of June 30, 2025, driven by net income for the year[239]. Interest Rate Risk Management - Interest rate sensitivity analysis indicates that a 200 basis point increase in interest rates could lead to a 3.57% increase in net interest income and a 7.30% decrease in the fair value of equity as of June 30, 2025[292]. - The company actively monitors and manages interest rate risk exposure through various asset/liability strategies[289]. - The potential impact of interest rate changes on net economic value of equity and net interest income is analyzed by the Board of Directors[290]. - The Board of Directors reviews interest rate risk exposure at least quarterly, using sensitivity analysis to measure potential changes in net interest income and economic value of equity[291].