First Western(US:MYFW)2026-01-23 18:00Financial Data and Key Metrics Changes - The company generated net income of $3.3 million, or $0.34 per diluted share in Q4 2025, which was higher than the prior quarter [5] - Tangible book value per share increased by 1.6% this quarter [5] - Gross revenue increased by 1.5% from the prior quarter and 12.2% from Q4 2024 [10] - Net interest income increased by 5.6% from the prior quarter and 21.7% from Q4 2024 [10] - Non-interest income decreased by approximately $800,000 from the prior quarter [11] Business Line Data and Key Metrics Changes - Loans held for investment increased by $59 million from the end of the prior quarter, with new loan production of $146 million in Q4 [6][7] - Total deposits increased by $102 million from the end of the prior quarter, with average deposits up 10% compared to Q4 2024 [8][9] - Assets under management decreased by $155 million in Q4, primarily due to net withdrawals in low-fee and fixed-fee product categories [9] Market Data and Key Metrics Changes - The market remains competitive in terms of pricing on loans and deposits, but the company continues to generate new loans and deposits through superior service [4] - The company has seen good opportunities to add new clients and talent due to ongoing disruption from M&A activity in the Colorado banking market [13] Company Strategy and Development Direction - The company maintains a conservative approach to new loan production with disciplined underwriting and pricing criteria [4] - The focus is on organic growth, leveraging market disruption to recruit talent and acquire new clients [82] - The company is investing in technology infrastructure, product teams, and internal processes for efficiency [86] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects loan and deposit growth in 2026 to be similar to 2025 [13] - Positive trends in net interest margin and fee income are anticipated, with a focus on disciplined expense control [14] - Management does not foresee any meaningful deterioration in asset quality [15] Other Important Information - The company had a one-time $1.4 million write-down on an OREO property, which impacted non-interest expenses [11] - The allowance coverage remained unchanged at 81 basis points of total loans [12] Q&A Session Summary Question: Margin outlook and loan repricing - Management expects further net interest margin expansion through 2026, with about $250 million in fixed-rate loans maturing over the next year [21][22] Question: Asset management and wealth management business trends - The decline in assets under management was due to net withdrawals in lower-yielding categories, but higher-yielding categories are showing improvements [24][25] Question: Expense outlook for 2026 - The company aims to keep expenses below $20 million per quarter while investing in growth opportunities [36] Question: Profitability improvement potential in 2026 - The near-term objective is to achieve a 1% return on assets, with a current operating run rate of about $2 per share [41] Question: Matching loan pipeline with core deposits - Both loan and deposit pipelines are reported as strong, with a focus on bringing in deposits as needed [42][45] Question: Tax rate outlook - The effective tax rate is expected to stabilize around 23%-24% going forward [72] Question: Mortgage market expectations for 2026 - The company is building production capability in the mortgage sector and expects pent-up demand to create opportunities [77][78]