First Western(US:MYFW)2026-02-27 21:16Financial Performance - For the year ended December 31, 2025, net income available to common shareholders was $13.2 million, a 55.3% increase from $8.5 million in 2024[291]. - Net interest income for 2025 was $75.4 million, reflecting a 17.2% increase driven by a $142.9 million rise in average interest-earning assets and a 27 basis point increase in net interest margin[292]. - Total revenues for the year ended December 31, 2025, were $96.9 million, with a notable increase in net interest income contributing significantly to this growth[280]. - Wealth Management segment reported income before income taxes of $16.4 million for the year ended December 31, 2025, a 54.4% increase from $10.6 million in 2024[317]. - Mortgage segment reported income before income taxes of $0.7 million for the year ended December 31, 2025, a decrease of 30.1% from $1.0 million in 2024[319]. Asset Management - The company managed $7.28 billion in assets under management (AUM) as of December 31, 2025, indicating a strong position in fiduciary and advisory services[280]. - Total Assets Under Management (AUM) decreased by $43 million, or 0.6%, to $7.28 billion for the year ended December 31, 2025, primarily due to net withdrawals, partially offset by improved market conditions[333]. - Managed Trust Balance at the end of the period was $1,901 million, down from $2,018 million in 2024, reflecting a decrease of $117 million[332]. - Directed Trust Balance increased to $2,014 million from $1,934 million, with contributions rising to $201 million from $108 million[332]. - Investment Agency Balance rose to $1,635 million from $1,584 million, with contributions of $81 million compared to $98 million in 2024[332]. Loan and Deposit Growth - Total assets increased to $2.992 billion in 2025 from $2.848 billion in 2024, marking a growth of 5.0%[300]. - Deposits increased by $232.4 million, or 9.2%, to $2.75 billion as of December 31, 2025, driven by increases in money market deposit accounts[327]. - Loans, net of allowance, increased by $221.7 million, or 9.2%, to $2.63 billion as of December 31, 2025, primarily driven by growth in various real estate portfolios[324]. - Total loans outstanding at the end of 2025 were $2.65 billion, up from $2.42 billion in 2024[358]. - The average balance of money market deposit accounts increased to $1.73 billion in 2025, with an average rate of 3.65%[368]. Credit Losses and Provisions - Provision for credit losses increased by $3.1 million in 2025, primarily due to loan growth[291]. - Provision for credit losses increased to $5.0 million in 2025 from $1.9 million in 2024, driven by loan growth and charge-offs[301]. - The allowance for credit losses (ACL) increased by $3.1 million during 2025, with total ACL at the end of the period amounting to $21.4 million, representing 0.81% of total loans[358]. - The ACL on pooled loans remained stable at $18.0 million for both 2025 and 2024, while the ACL on individually analyzed loans increased to $3.4 million in 2025 from $0.3 million in 2024[357]. Interest Rate and Risk Management - The average interest-bearing deposit rates decreased to 3.54% in 2025 from 4.07% in 2024, reflecting a lower interest rate environment[294]. - The effective tax rate decreased to 22.8% in 2025 from 26.8% in 2024, with an income tax provision of $3.9 million recorded[312]. - Interest rate risk exposure is reviewed quarterly by the Board of Directors, with adjustments made to asset and liability mix if necessary[401]. - The company actively monitors interest rate risk to limit exposure within established guidelines[399]. - Changes in interest rates can significantly impact performance, as assets and liabilities are primarily monetary in nature[405]. Non-Interest Income and Expenses - Non-interest income decreased by $1.1 million, impacted by lower trust and investment management fees and a decline in risk management and insurance fees[291]. - Non-interest expense rose by $1.3 million, largely due to increases in salaries and employee benefits and data processing costs related to digital banking upgrades[291]. - Non-interest expense rose by 1.7% to $79.8 million in 2025, influenced by increases in salaries and employee benefits and data processing costs[309]. - Non-interest income decreased by $1.1 million, or 4.0%, to $26.6 million in 2025, primarily due to declines in risk management and insurance fees, trust and investment management fees, and bank fees[303]. Capital and Equity - As of December 31, 2025, the bank's capital ratios exceeded the Basel III regulatory requirements, indicating a strong capital position[289]. - Total shareholders' equity increased by $13.2 million, or 5.2%, to $265.6 million as of December 31, 2025, primarily due to net income for the year[329]. - Goodwill remained stable at $30.4 million as of December 31, 2025, with no impairment identified[395]. Portfolio Performance - The net gain on loans accounted for under the fair value option increased by $1.0 million, or 100.6%, reflecting improved portfolio performance[308]. - Non-performing assets decreased to $19.6 million as of December 31, 2025, from $48.7 million in 2024, primarily due to the sale of two OREO properties and pay downs[352]. - Total non-performing loans increased to $16.6 million in 2025 from $12.8 million in 2024, with non-accrual loans to total loans ratio rising to 0.63% from 0.53%[356]. - The company maintains a diversified office portfolio primarily in suburban markets, mitigating risks associated with central business district properties[346]. - The company employs regular loan reviews and stress tests to assess portfolio risk, focusing on past due rates and non-performing trends[346].