First Western Reports Fourth Quarter 2025 Financial Results

Core Insights - First Western Financial, Inc. reported a net income of $3.3 million for Q4 2025, an increase from $3.2 million in Q3 2025 and $2.7 million in Q4 2024, with diluted earnings per share rising to $0.34 from $0.32 in the previous quarter [2][6]. Financial Performance - Net interest income for Q4 2025 was $20.6 million, up 5.6% from $19.5 million in Q3 2025 and 21.9% from $16.9 million in Q4 2024 [11][12]. - The net interest margin increased by 17 basis points to 2.71% in Q4 2025, compared to 2.54% in Q3 2025, primarily due to a decrease in the cost of funds [9][10]. - Total income before non-interest expense was $25.7 million, a 7.1% increase from $24.0 million in Q3 2025, driven by higher net interest income [8]. Loan and Deposit Trends - Total loans held for investment rose to $2.65 billion, an increase of $59 million or 2.3% from Q3 2025, with growth in commercial real estate portfolios [17]. - Total deposits decreased by 3.5% to $2.75 billion from $2.85 billion in Q3 2025, primarily due to fluctuations in higher-cost money market accounts [18]. Expense Management - Non-interest expense increased to $21.3 million, a 6.0% rise from $20.1 million in Q3 2025, mainly due to a write-down of other real estate owned [14][15]. - The efficiency ratio improved to 74.9% in Q4 2025 from 76.4% in Q3 2025, indicating better cost management [15]. Asset Quality - Non-performing assets decreased to $19.6 million, or 0.62% of total assets, down from $22.7 million or 0.70% in Q3 2025, reflecting improved asset quality [23]. - Non-accrual loans totaled $16.6 million, a decrease from $18.3 million in Q3 2025, indicating a positive trend in credit quality [24]. Capital Position - As of December 31, 2025, the company maintained strong capital ratios, with Tier 1 capital to risk-weighted assets at 9.75% and the bank classified as "well capitalized" [26][46]. - Book value per common share increased by 1.4% to $27.30 from $26.92 in Q3 2025, and tangible book value per common share rose by 1.6% to $24.07 [26][27].