First Western(US:MYFW)2025-10-24 17:02Financial Data and Key Metrics Changes - The company generated net income of $3.2 million or $0.32 per diluted share in Q3 2025, a 45% increase from the same quarter last year [6][10] - Tangible book value per share increased by 1.2% this quarter [6] - Gross revenue increased by 8.7% from the prior quarter and 15.5% year-over-year [9] - Net interest income increased by 8.9% from the prior quarter and 25% year-over-year [10] - Non-interest income increased by 8.5% from the prior quarter, primarily due to increases in all major fee categories [10] Business Line Data and Key Metrics Changes - Loans held for investment increased by $50 million from the end of the prior quarter, with new loan production of $146 million in Q3 [7] - Total deposits increased by $320 million from the end of the prior quarter, driven by new accounts and existing client balance growth [8] - Trust and investment management assets under management decreased by $64 million, primarily due to net withdrawals in low-fee product categories [8] Market Data and Key Metrics Changes - The average rate on new loan production was 6.38% in the quarter [7] - The spot rate on deposits at the end of the quarter was 3.04% [24] - The company achieved a 63% beta on money market accounts in Q3, which is expected to continue into Q4 [25] Company Strategy and Development Direction - The company focuses on generating new loans and deposits through superior service rather than competing on rates [4] - A conservative approach to new loan production is maintained, with disciplined underwriting and pricing criteria [4] - The company aims to leverage market disruptions from M&A activity to add new clients and banking talent [12][37] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects strong loan deposit pipelines to continue into Q4 [12] - There are no indications of meaningful deterioration in asset quality, with stable trends in the loan portfolio [12] - The company anticipates positive trends in net interest margin and fee income, contributing to improved financial performance [12][70] Other Important Information - The company has made significant investments in technology and team restructuring to enhance operational efficiency [68] - The efficiency ratio is trending down with operating leverage increasing, indicating improved profitability [70] Q&A Session Summary Question: Insights on deposit growth and mortgage department contributions - Management indicated that the deposit growth is expected to remain stable and provide a higher deposit base for future growth [16] Question: Details on the newly added non-performing asset (NPA) - The NPA was a C&I loan with performance issues, and a specific provision has been made for it [17] Question: Expectations for net interest margin (NIM) in Q4 - Management expects NIM expansion, potentially around five basis points, as liquidity is redeployed into the loan portfolio [20] Question: Spot rate on deposits and beta expectations - The spot rate was reported at 3.04%, with a beta of approximately 63% expected to continue [24][25] Question: Wealth management business and assets under management (AUM) - Management is focused on fee income rather than AUM, with positive growth noted in agency accounts [27] Question: Opportunities from M&A disruptions - Management sees ongoing market disruptions as beneficial for attracting new clients and talent [37][52]