First Western(US:MYFW)2025-04-25 17:00Financial Data and Key Metrics Changes - The company generated net income of $4,200,000 or $0.43 per diluted share in the quarter, representing substantial increases from the prior quarter [8] - Tangible book value per share increased by 1.6% this quarter [8] - Gross revenue increased by 3.4% from the prior quarter, driven by increases in both net interest income and noninterest income [13] Business Line Data and Key Metrics Changes - New loan production was $71,000,000 in the first quarter, offset by $72,000,000 in loan payoffs, resulting in a slight decrease in total loans [10] - 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 [10] - Total deposits were up slightly from the end of the prior quarter, with inflows of noninterest bearing deposits from existing clients and new relationships [11] Market Data and Key Metrics Changes - The company saw a $144,000,000 decrease in assets under management in the first quarter, primarily due to net withdrawals in fixed fee accounts [12] - The company continues to experience strong demand for commercial real estate loans as borrowers seek to take advantage of lower property valuations [10] Company Strategy and Development Direction - The company is focused on growing its Trust Investment Management business and has added a new Head of Wealth Planning from Goldman Sachs to enhance this area [20] - The management anticipates continued positive trends in asset quality, net interest margin, and overall efficiencies as processes improve throughout the organization [19] Management Comments on Operating Environment and Future Outlook - Management expressed that while profitability has improved, they are not satisfied with the current performance level and aim to achieve a return on assets (ROA) of 1% [40] - There is uncertainty regarding the macroeconomic outlook, which could impact loan demand later in the year [20] - The company expects to see continued growth in net interest income due to a reduction in the cost of funds and redeployment of cash from the sale of OREO properties [15] Other Important Information - The company successfully resolved its two largest OREO properties, selling them for a net gain [8] - Noninterest expense decreased by $1,000,000 from the prior quarter, primarily due to a write-down recorded in the previous quarter [16] Q&A Session Summary Question: Can you isolate any interest recoveries on a dollar basis? - Management noted that there was a $200,000 increase in amortized loan fees that contributed to the uptick in loan yields [24][25] Question: What is the spot rate on deposits and average margin in March? - The cost of deposits was 2.98%, and the cost of funds was approximately 3.05% [28] Question: What is the outlook for nonperforming loans? - Management expects to sell one remaining OREO property this year and is working through the resolution of a substantial nonperforming loan [30][31] Question: Will there be a significant increase in expenses due to new hires? - Management indicated that while expenses are expected to remain flat, new hires may take time to become accretive to the bottom line [72] Question: How does the origination pipeline relate to new hires? - Management acknowledged that new hires are contributing positively, but the exact impact is difficult to quantify [47] Question: Are there any markets that are softer in terms of loan originations? - Management noted that the front range of Colorado remains healthy, while resort communities and newer markets like Bozeman are performing well [68]