First Western(US:MYFW)2025-04-25 18:07Financial Data and Key Metrics Changes - The company generated net income of $4.2 million or $0.43 per diluted share in Q1 2025, representing substantial increases from the prior quarter [11] - Tangible book value per share increased by 1.6% this quarter [12] - Gross revenue increased by 3.4% from the prior quarter, driven by increases in both net interest income and non-interest income [19] Business Line Data and Key Metrics Changes - New loan production was $71 million in Q1 2025, offset by $72 million in loan payoffs, resulting in a slight decrease in total loans [14] - The average rate on new loan production was 6.89%, higher than the average rate on loan payoffs, contributing positively to the loan portfolio's yield [15] - Total deposits were up slightly from the end of the prior quarter, with inflows of non-interest bearing deposits from existing clients and new relationships [16] Market Data and Key Metrics Changes - The company saw a $144 million decrease in assets under management (AUM) in Q1 2025, primarily due to net withdrawals in fixed fee accounts [18] - AUM increased nearly 1% over the past year despite the quarterly decrease [18] Company Strategy and Development Direction - The company is focused on improving profitability and asset quality, with a disciplined approach to loan production and pricing [9][28] - There is a priority on growing the trust investment management business, with new leadership added to enhance contributions to future growth [30][80] - The company plans to redeploy cash from the sale of OREO properties into interest-earning assets to support loan production [29] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about continued positive trends in asset quality, net interest margin, and overall efficiencies [28] - There is caution regarding potential impacts on loan demand due to macroeconomic uncertainties, including tariffs [30] - The company aims to achieve a return on assets (ROA) target of 1% as it continues to grow and improve profitability [61] Other Important Information - The company successfully resolved two largest OREO properties, resulting in a net gain [10] - Non-interest expense decreased by $1 million from the prior quarter, primarily due to a write-down recorded in the previous quarter [23] Q&A Session Summary Question: Can you isolate any interest recoveries on a dollar basis? - The company saw a higher amortized loan fee through the quarter, approximately $200,000 higher than typical [37][39] Question: What is the spot rate on deposits at the end of March? - The spot rate was 2.98%, with a cost of funds around 3.05% [41] Question: What is the outlook for loan payoffs going forward? - Historically, payoffs have been consistent at about $100 million per quarter, with expectations for similar trends moving forward [67] Question: How quickly do you expect new hires to impact the bottom line? - It typically takes time for new hires to settle in, but a positive impact is expected over the next two to three quarters [100]