First Western(US:MYFW)2026-01-23 18:02Financial 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 [6] - Gross revenue increased by 1.5% from the prior quarter and 12.2% from Q4 2024 [10] - Net interest income rose by 5.6% from the prior quarter and 21.7% from Q4 2024, with net interest margin (NIM) increasing to 2.71% [10][11] - Tangible book value per share increased by 1.6% this quarter [6] 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 [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 in Trust and Investment Management decreased by $155 million, primarily due to net withdrawals [9] Market Data and Key Metrics Changes - The company experienced solid loan production diversified across markets, industries, and loan types, supported by healthy economic conditions [6] - The market remains competitive in terms of pricing on loans and deposits, but the company focuses on service quality rather than competing on rates [4] Company Strategy and Development Direction - The company aims to maintain a conservative approach to new loan production with disciplined underwriting and pricing criteria [4] - There is a focus on organic growth and leveraging market disruption to recruit talent and new clients [14][87] - The company is investing in technology infrastructure, product teams, and marketing to enhance efficiency and value [91] Management's Comments on Operating Environment and Future Outlook - Management sees healthy economic conditions in their markets and expects continued loan and deposit growth in 2026 [14] - Positive trends in net interest margin and fee income are anticipated, with a goal of achieving a 1% return on assets (ROA) [43][94] - The company does not foresee any meaningful deterioration in asset quality based on current portfolio trends [15] Other Important Information - A one-time $1.4 million write-down on an OREO property impacted non-interest expenses, but excluding this, expenses decreased by $100,000 [12] - The company has shifted its focus in Trust and Investment Management from investment management to fiduciary and planning-driven services [26] Q&A Session Summary Question: Margin outlook and loan repricing - Management expects further NIM expansion through 2026, with $250 million in fixed-rate loans maturing over the next year providing repricing opportunities [22][23] Question: Asset management and mortgage banking trends - AUM decline was due to net withdrawals in lower-yielding categories, but higher-yielding categories are improving [25] - Mortgage production is expected to be stronger in Q2 and Q3 of 2026, with a focus on building the MLO team [28] Question: Expense growth rate in 2026 - The company aims to keep expenses below $20 million per quarter while investing in growth opportunities [38] Question: Profitability improvement potential in 2026 - The company targets a 1% ROA, with expectations for continued NIM improvement and operating growth [43] Question: Deposit competition and loan pipeline - Both loan and deposit pipelines are strong, with a focus on optimizing the balance sheet [47] Question: Tax rate outlook - The effective tax rate is expected to stabilize around 23%-24% moving forward [76][77] Question: Mortgage market expectations for 2026 - The company is well-positioned for future mortgage opportunities as market conditions improve [82][83]