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MYFW - First Western Financial Inc News Story

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Sector
Financials
Size
Small Cap
Market Cap £152.0m
Enterprise Value £167.8m
Revenue £75.0m
Position in Universe 4483rd / 6849

First Western Reports First Quarter 2021 Financial Results

Thu 22nd April, 2021 9:05pm
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First Quarter 2021 Summary
* Net income available to common shareholders of $6.0 million in Q1 2021,
compared to $4.9 million in Q4 2020 and $1.3 million in Q1 2020
* Diluted EPS of $0.74 in Q1 2021, compared to $0.61 in Q4 2020 and $0.17 in
Q1 2020
* Gross revenue((1)) of $23.7 million in Q1 2021, compared to $23.4 million in
Q4 2020 and $16.7 million in Q1 2020
* Total assets of $2.21 billion, up 48.2% annualized from Q4 2020 and 63.4%
from Q1 2020
* Return on average assets of 1.16%, compared to 0.99% for the fourth quarter
of 2020
* Return on average shareholders’ equity of 14.95%, compared to 12.62% for
the fourth quarter of 2020
* Return on tangible common equity((1)) of 17.49%, compared to 14.92% for the
fourth quarter of 2020
((1)) Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.

DENVER, April 22, 2021 (GLOBE NEWSWIRE) -- First Western Financial, Inc.,
(“First Western” or the “Company”) (NASDAQ: MYFW), today reported
financial results for the first quarter ended March 31, 2021.

Net income available to common shareholders was $6.0 million, or $0.74 per
diluted share, for the first quarter of 2021. This compares to $4.9 million,
or $0.61 per diluted share, for the fourth quarter of 2020, and $1.3 million,
or $0.17 per diluted share, for the first quarter of 2020.

Scott C. Wylie, CEO of First Western, commented, “Our first quarter results
reflect the continuation of our improved profitability, as our earnings per
share increased more than 300% over the first quarter of last year and our
return on tangible common equity exceeded 17%. Our new business development
activity remains very strong and new client relationships helped drive a 12%
increase in total deposits during the first quarter. While the strong deposit
inflows are creating excess liquidity in the short-term that impacts our net
interest margin, we believe we are well positioned to generate higher revenue
in the future as these funds are redeployed into higher yielding earning
assets or transferred into investment management accounts where they will
generate fee income.

“During the first quarter, we resolved the processing constraints that
limited our mortgage production late in 2020. We were able to capitalize on
continued strong demand and more than double our net gain on mortgage loans
compared to the first quarter of last year. Given the population growth and
strong housing trends in our markets, we expect the mortgage segment to
continue making a significant contribution to our overall profitability.

“We spent the first quarter rebuilding our loan pipeline following the
strong production we had to end 2020, as well as helping clients access the
second round of funding through the Paycheck Protection Program. Despite the
smaller pipeline to begin the year that impacted new loan production, our
average loan balances, including mortgage loans held for sale, were still up
more than 21% on an annualized basis in the first quarter. With our loan
pipeline growing and commercial clients becoming more confident in a stronger
economic recovery, we anticipate seeing a higher level of loan production and
loan growth as we move through the year. This should lead to further increases
in our level of profitability as we redeploy our excess liquidity and realize
additional operating leverage,” said Mr. Wylie.

                                                                                                                                      
                                                                       For the Three Months Ended                                     
                                                                       March 31,            December 31,            March 31,         
 (Dollars in thousands, except per share data)                         2021                 2020                    2020              
 Earnings Summary                                                                                                                     
 Net interest income                                                   $      13,053        $        13,457         $      8,931      
 Less: provision for loan losses                                              —                      695                   367        
 Total non-interest income                                                    10,615                 9,954                 7,767      
 Total non-interest expense                                                   15,629                 15,614                14,647     
 Income before income taxes                                                   8,039                  7,102                 1,684      
 Income tax expense                                                           2,040                  2,228                 350        
 Net income available to common shareholders                                  5,999                  4,874                 1,334      
 Adjusted net income available to common shareholders ((1))                   5,999                  4,874                 1,772      
 Basic earnings per common share                                              0.76                   0.61                  0.17       
 Adjusted basic earnings per common share ((1))                               0.76                   0.61                  0.23       
 Diluted earnings per common share                                            0.74                   0.61                  0.17       
 Adjusted diluted earnings per common share ((1))                      $      0.74          $        0.61           $      0.22       
                                                                                                                                      
 Return on average assets (annualized)                                        1.16    %              0.99     %            0.43    %  
 Adjusted return on average assets (annualized) ((1))                         1.16                   0.99                  0.57       
 Return on average shareholders' equity (annualized)                          14.95                  12.62                 4.09       
 Adjusted return on average shareholders' equity (annualized) ((1))           14.95                  12.62                 5.43       
 Return on tangible common equity (annualized) ((1))                          17.49                  14.92                 5.03       
 Adjusted return on tangible common equity (annualized) ((1))                 17.49                  14.92                 6.69       
 Net interest margin                                                          2.90                   3.07                  3.14       
 Efficiency ratio ((1))                                                       66.02   %              66.62    %            84.39   %  

 (()(1)()) Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.

Operating Results for the First Quarter 2021

Revenue

Gross revenue( (1)) was $23.7 million for the first quarter of 2021, compared
to $23.4 million for the fourth quarter of 2020. The increase in revenue was
driven by a $0.7 million increase in non-interest income, primarily due to a
higher net gain on mortgage loans resulting from increased mortgage activity.

Relative to the first quarter of 2020, gross revenue increased $7.0 million
from $16.7 million, or 41.7%. The increase in revenue was primarily due to a
$4.1 million increase in net interest income driven by growth in interest
earning assets, as well as higher mortgage segment activity.

((1)) Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.

Net Interest Income

Net interest income for the first quarter of 2021 was $13.1 million, a
decrease of 3.0% from $13.5 million in the fourth quarter of 2020. The
decrease in net interest income was primarily driven by a $0.2 million
decrease in interest and loan fees recognized on Paycheck Protection Program
(“PPP”), as well as the reduction in number of days of interest accruals
in the first quarter of 2021 compared to the fourth quarter of 2020.

Relative to the first quarter of 2020, net interest income increased 46.2%
from $8.9 million. The year-over-year increase in net interest income was due
primarily to growth in average loans and the impact of PPP loan income.

Net Interest Margin

Net interest margin for the first quarter of 2021 decreased to 2.90% from
3.07% in the fourth quarter of 2020. Net interest margin was negatively
impacted by a more liquid balance sheet mix resulting from continued strong
deposit growth, which resulted in lower interest earning asset yields. On a
net basis, the PPP program also negatively impacted net interest margin by 6
basis points. This was driven by amortization of SBA fee income and deferred
loan origination expense of $0.5 million and interest income from PPP loans of
$0.3 million. The impact from the PPP program was offset by an increase of 8
basis points relating to the impact of purchase accretion from the 2020 branch
acquisition.

The cost of interest-bearing deposits decreased to 0.33% in the first quarter
of 2021, from 0.37% in the fourth quarter of 2020, while the yield on
interest-earning assets decreased to 3.22% in the first quarter of 2021, from
3.41% in the fourth quarter of 2020. The decline during the period was
primarily due to a decrease in loan fees recognized on PPP loans, a more
liquid balance sheet mix resulting from continued strong deposit growth, and
two fewer days of interest accruals in the first quarter.

Relative to the first quarter of 2020, the net interest margin decreased from
3.14%, primarily due to an 82 basis point reduction in average yields on
interest earning assets resulting from lower market rates and a more liquid
mix of earning assets.

Non-interest Income

Non-interest income for the first quarter of 2021 was $10.6 million, an
increase of 6.6% from $10.0 million in the fourth quarter of 2020. This was
primarily due to an increase in realized net margins on sold loans from the
fourth quarter 2020 to the first quarter 2021, offset by a decrease in the net
margin on the unrealized portfolio. Mortgage origination volume increased
$77.8 million in the first quarter 2021 compared to the fourth quarter 2020
contributing additional interest income and origination fee income of $0.5
million which was offset by $1.0 million in commission and other variable
expenses associated with the increased volume. The Company originated $490.8
million of mortgage loans for sale during the quarter, compared to $414.5
million the previous quarter, an increase of $76.3 million. Excluding the fee
revenue in the fourth quarter of 2020 generated by the LA Fixed Income team
that was sold in November 2020, Trust and Investment Management fees increased
$0.1 million, or 1.9% during the first quarter of 2021.

Relative to the first quarter of 2020, non-interest income increased 36.7%
from $7.8 million. The increase was attributable to a $2.7 million increase in
net gain on mortgage loans, primarily related to an increase in the volume of
mortgage originations quarter-over-quarter.

Non-interest Expense

Non-interest expense for the first quarter of 2021 was flat from the fourth
quarter of 2020 at $15.6 million. First quarter non-interest expense reflects
lower salaries and benefits expense resulting from $1.0 million in loan
origination expenses related to PPP loans that were deferred in the period and
will be amortized through net interest income over the expected 60-month life
of the loans, if not earlier, as the borrowers are granted forgiveness. The
resulting increase in compensation expense is primarily due to increased
mortgage expenses resulting from higher mortgage originations and increased
seasonal tax and benefits expenses.

Non-interest expense increased 6.7% from $14.6 million in the first quarter of
2020. The increase was primarily due to higher salaries and employee benefits
expense and increased data processing costs resulting from the increase in
total assets added through the branch purchase and through organic growth of
the balance sheet.

The Company’s efficiency ratio((1)) was 66.0% in the first quarter of 2021,
compared with 66.6% in the fourth quarter of 2020 and 84.4% in the first
quarter of 2020.

((1)) Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.

Income Taxes

The Company recorded income tax expense of $2.0 million for the first quarter
of 2021, representing an effective tax rate of 25.4%, compared to 31.4% for
the fourth quarter of 2020. The decrease in effective tax rate in the first
quarter of 2021 was primarily attributable to an increase in the fourth
quarter 2020 effective tax rate as a result of additional expense related to
recording a valuation allowance of $0.4 million on our net operating loss with
the State of California following the sale of our LA fixed income team.

Loan Portfolio

Total loans, including mortgage loans held for sale, were $1.72 billion as of
March 31, 2021, an increase of $27.4 million, or 1.6% from the end of the
prior quarter and an increase of $616.8 million, or 55.7% from March 31, 2020.

Total loans held for investment, were $1.55 billion as of March 31, 2021, an
increase of 0.8% from $1.53 billion as of December 31, 2020, and an increase
of 48.4% from $1.04 billion as of March 31, 2020. The increase in total loans
held for investment from December 31, 2020 was primarily due to growth in the
non-owner occupied commercial real estate portfolio.

PPP loans were $190.5 million as of March 31, 2021, an increase of 33.3% from
$142.9 million as of December 31, 2020. In the first quarter of 2021, the
Company originated $78.9 million in PPP loans. As of March 31, 2021, the
Company has submitted loan forgiveness applications to the Small Business
Administration (“SBA”) on behalf of clients for $155.1 million and
received forgiveness and funds remitted in the amount of $84.7 million from
the SBA. As of March 31, 2021, there was $3.1 million remaining in net fees to
be recognized upon forgiveness or repayment.

Deposits

Total deposits were $1.81 billion as of March 31, 2021, compared to $1.62
billion as of December 31, 2020, and $1.18 billion as of March 31, 2020. The
increase in total deposits from December 31, 2020 was attributable to an
increase in non-interest bearing deposits and money market deposits.

Average total deposits for the first quarter of 2021 increased $143.3 million,
or 36.3% annualized, from the fourth quarter of 2020 and $636.2 million, or
58.7%, from the first quarter of 2020. The increase was primarily attributable
to an increase in non-interest bearing and money market deposits resulting
from inflows from large commercial depositors and higher deposit balances
across the Company’s clientele due to the improving economic and business
environment.

Borrowings

Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $198.0
million as of March 31, 2021, an increase of $48.5 million from $149.6 million
as of December 31, 2020, and an increase of $188.0 million from $10.0 million
as of March 31, 2020. The increase from March 31, 2020 and from December 31,
2020 is attributable to the participation in the Paycheck Protection Program
Loan Facility (“PPPLF”) from the Federal Reserve. Borrowing from this
facility is expected to match the balances of the PPP loans and the resulting
net increase in PPP loans drove the increase to the PPPLF balance.

Assets Under Management

Total assets under management (“AUM”) increased by $230.3 million during
the first quarter to $6.49 billion as of March 31, 2021, compared to $6.26
billion as of December 31, 2020, and $5.64 billion as of March 31, 2020. The
increase was primarily attributable to contributions to existing accounts and
new accounts, as well as improving market conditions resulting in an increase
in the value of assets under management balances.

Credit Quality

Non-performing assets totaled $4.0 million, or 0.18% of total assets, as of
March 31, 2021, compared with $4.3 million, or 0.22% of total assets, as of
December 31, 2020 and $11.1 million, or 0.82% of total assets, as of March 31,
2020. The decline in non-performing assets from the prior quarter was due to
continued pay downs on outstanding balances, as well as the sale of the
remaining other real estate owned property in the quarter.

The Company did not record a provision for loan losses in the first quarter of
2021, compared to a provision of $0.4 million in the first quarter of 2020 and
$0.7 million in the fourth quarter of 2020. The lower provision was the result
of continued strong credit quality in the portfolio and continued pay downs on
substandard loans. During 2020, the Company had implemented a loan
modification program to assist its clients experiencing financial stress
resulting from the economic impacts caused by the global pandemic. As of
January 25, 2021, all borrowers were out of their deferral period and all are
performing.

Capital

As of March 31, 2021, First Western (“Consolidated”) and First Western
Trust Bank (“Bank”) exceeded the minimum capital levels required by their
respective regulators. As of March 31, 2021, the Bank was classified as
“well capitalized,” as summarized in the following table:

                                                                        
                                                          March 31,     
                                                          2021          
 Consolidated Capital                                                   
 Tier 1 capital to risk-weighted assets                   10.31      %  
 Common Equity Tier 1 ("CET1") to risk-weighted assets    10.31         
 Total capital to risk-weighted assets                    13.11         
 Tier 1 capital to average assets                         7.35          
                                                                        
 Bank Capital                                                           
 Tier 1 capital to risk-weighted assets                   10.60         
 CET1 to risk-weighted assets                             10.60         
 Total capital to risk-weighted assets                    11.57         
 Tier 1 capital to average assets                         7.53       %  

Book value per common share increased 24.8% from $16.26 as of March 31, 2020
to $20.29 as of March 31, 2021, and was up 4.1% from $19.49 as of December 31,
2020.

Tangible book value per common share( ()(1)) increased 28.8% from $13.39 as of
March 31, 2020 to $17.24 as of March 31, 2021, and was up 4.9% from $16.44 as
of December 31, 2020.

The Company did not repurchase any shares of its common stock during the first
quarter of 2021 under its stock repurchase program, which authorized the
repurchase of up to 400,000 shares of its common stock. As of March 31, 2021,
the Company had up to 399,574 shares remaining under the current stock
repurchase authorization.

((1)) Represents a Non-GAAP financial measure. See “Reconciliations of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00
p.m. ET on Friday, April 23, 2021. The call can be accessed via telephone at
877-405-1628. A recorded replay will be accessible through April 30, 2021 by
dialing 855-859-2056; passcode 5491494.

A slide presentation relating to the first quarter 2021 results will be
accessible prior to the scheduled conference call. The slide presentation and
webcast of the conference call can be accessed on the Events and Presentations
page of the Company’s investor relations website at
https://myfw.gcs-web.com.

About First Western
First Western is a financial services holding company headquartered in Denver,
Colorado, with operations in Colorado, Arizona, Wyoming and California. First
Western and its subsidiaries provide a fully integrated suite of wealth
management services on a private trust bank platform, which includes a
comprehensive selection of deposit, loan, trust, wealth planning and
investment management products and services. First Western’s common stock is
traded on the Nasdaq Global Select Market under the symbol “MYFW.” For
more information, please visit www.myfw.com.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures
of financial performance recognized in accordance with generally accepted
accounting principles in the United States (“GAAP”). These non-GAAP
financial measures include “Tangible Common Equity,” “Tangible Common
Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency
Ratio,” “Gross Revenue,” “Allowance to Bank Originated Loans Excluding
PPP,” “Adjusted Net Income Available to Common Shareholders,”
“Adjusted Earnings Per Share,” “Adjusted Diluted Earnings Per Share,”
“Adjusted Return on Average Assets,” “Adjusted Return on Average
Shareholders’ Equity,” and “Adjusted Return on Tangible Common
Equity”. The Company believes these non-GAAP financial measures provide both
management and investors a more complete understanding of the Company’s
financial position and performance. These non-GAAP financial measures are
supplemental and are not a substitute for any analysis based on GAAP financial
measures. Not all companies use the same calculation of these measures;
therefore, this presentation may not be comparable to other similarly titled
measures as presented by other companies. Reconciliation of non-GAAP financial
measures, to GAAP financial measures are provided at the end of this press
release.

Forward-Looking Statements

Statements in this news release regarding our expectations and beliefs about
our future financial performance and financial condition, as well as trends in
our business and markets are “forward-looking statements” as defined in
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements often include words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “project,”
“outlook,” or words of similar meaning, or future or conditional verbs
such as “will,” “would,” “should,” “opportunity,” “could,”
or “may.” The forward-looking statements in this news release are based on
current information and on assumptions that we make about future events and
circumstances that are subject to a number of risks and uncertainties that are
often difficult to predict and beyond our control. As a result of those risks
and uncertainties, our actual financial results in the future could differ,
possibly materially, from those expressed in or implied by the forward-looking
statements contained in this news release and could cause us to make changes
to our future plans. Those risks and uncertainties include, without
limitation, the COVID-19 pandemic and its effects; integration risks in
connection with acquisitions; the risk of geographic concentration in
Colorado, Arizona, Wyoming and California; the risk of changes in the economy
affecting real estate values and liquidity; the risk in our ability to
continue to originate residential real estate loans and sell such loans; risks
specific to commercial loans and borrowers; the risk of claims and litigation
pertaining to our fiduciary responsibilities; the risk of competition for
investment managers and professionals; the risk of fluctuation in the value of
our investment securities; the risk of changes in interest rates; and the risk
of the adequacy of our allowance for loan losses and the risk in our ability
to maintain a strong core deposit base or other low-cost funding sources.
Additional information regarding these and other risks and uncertainties to
which our business and future financial performance are subject is contained
in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange
Commission (“SEC”) on March 12, 2021 (“Form 10-K”), and other
documents we file with the SEC from time to time. We urge readers of this news
release to review the “Risk Factors” section our Form 10-K and any updates
to those risk factors set forth in our subsequent Quarterly Reports on Form
10-Q, Current Reports on Form 8-K, and our other filings with the SEC. Also,
our actual financial results in the future may differ from those currently
expected due to additional risks and uncertainties of which we are not
currently aware or which we do not currently view as, but in the future may
become, material to our business or operating results. Due to these and other
possible uncertainties and risks, readers are cautioned not to place undue
reliance on the forward-looking statements contained in this news release,
which speak only as of today’s date, or to make predictions based solely on
historical financial performance. Any forward-looking statement speaks only as
of the date on which it is made, and we do not undertake any obligation to
update or review any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required by law.

Contacts:
Financial Profiles, Inc.
Tony Rossi
310-622-8221
MYFW@finprofiles.com 
IR@myfw.com 

First Western Financial, Inc.
Consolidated Financial Summary (unaudited)

                                                                                                                     
                                                         Three Months Ended                                          
                                                         March 31,           December 31,             March 31,      
 (Dollars in thousands, except per share amounts)        2021                2020                     2020           
 Interest and dividend income:                                                                                       
 Loans, including fees                                   $      14,212       $        14,656          $      11,002  
 Investment securities                                          196                   186                    295     
 Federal funds sold and other                                   91                    100                    215     
 Total interest and dividend income                             14,499                14,942                 11,512  
                                                                                                                     
 Interest expense:                                                                                                   
 Deposits                                                       974                   1,015                  2,393   
 Other borrowed funds                                           472                   470                    188     
 Total interest expense                                         1,446                 1,485                  2,581   
 Net interest income                                            13,053                13,457                 8,931   
 Less: provision for loan losses                                —                     695                    367     
 Net interest income, after provision for loan losses           13,053                12,762                 8,564   
                                                                                                                     
 Non-interest income:                                                                                                
 Trust and investment management fees                           4,847                 4,868                  4,731   
 Net gain on mortgage loans                                     5,196                 4,318                  2,481   
 Bank fees                                                      373                   391                    368     
 Risk management and insurance fees                             51                    287                    96      
 Income on company-owned life insurance                         88                    90                     91      
 Other                                                          60                    —                      —       
 Total non-interest income                                      10,615                9,954                  7,767   
 Total income before non-interest expense                       23,668                22,716                 16,331  
                                                                                                                     
 Non-interest expense:                                                                                               
 Salaries and employee benefits                                 9,861                 9,401                  8,482   
 Occupancy and equipment                                        1,409                 1,435                  1,440   
 Professional services                                          1,279                 1,493                  1,023   
 Technology and information systems                             942                   1,041                  969     
 Data processing                                                1,015                 1,078                  847     
 Marketing                                                      321                   415                    415     
 Amortization of other intangible assets                        4                     4                      2       
 Net loss on assets held for sale                               —                     —                      553     
 Provision on other real estate owned                           —                     76                     —       
 Other                                                          798                   671      ((1))         916     
 Total non-interest expense                                     15,629                15,614                 14,647  
 Income before income taxes                                     8,039                 7,102                  1,684   
 Income tax expense                                             2,040                 2,228                  350     
 Net income available to common shareholders             $      5,999        $        4,874           $      1,334   
 Earnings per common share:                                                                                          
 Basic                                                   $      0.76         $        0.61            $      0.17    
 Diluted                                                 $      0.74         $        0.61            $      0.17    

 ((1)) Includes a $62 thousand gain on sale of the LA fixed income team.



First Western Financial, Inc.
Consolidated Financial Summary (unaudited)

                                                                                                                          
                                                              March 31,           December 31,          March 31,         
 (Dollars in thousands)                                       2021                2020                  2020              
 ASSETS                                                                                                                   
 Cash and cash equivalents:                                                                                               
 Cash and due from banks                                      $      2,295        $        2,405        $      4,076      
 Interest-bearing deposits in other financial institutions           373,641               153,584             114,438    
 Total cash and cash equivalents                                     375,936               155,989             118,514    
                                                                                                                          
 Available-for-sale securities, at fair value                        30,843                36,666              52,500     
 Correspondent bank stock, at cost                                   2,576                 2,552               1,158      
 Mortgage loans held for sale                                        176,644               161,843             64,120     
 Loans, net of allowance of $12,539, $12,539 and $8,242              1,531,387             1,520,294           1,035,709  
 Premises and equipment, net                                         5,778                 5,320               5,148      
 Accrued interest receivable                                         6,852                 6,618               3,107      
 Accounts receivable                                                 10,175                4,865               4,669      
 Other receivables                                                   3,254                 1,422               1,058      
 Other real estate owned, net                                        —                     194                 658        
 Goodwill and other intangible assets, net                           24,254                24,258              19,712     
 Deferred tax assets, net                                            6,073                 6,056               5,036      
 Company-owned life insurance                                        15,537                15,449              15,177     
 Other assets                                                        22,269                32,129              24,297     
 Assets held for sale                                                —                     —                   3,000      
 Total assets                                                 $      2,211,578    $        1,973,655    $      1,353,863  
                                                                                                                          
 LIABILITIES                                                                                                              
 Deposits:                                                                                                                
 Noninterest-bearing                                          $      593,388      $        481,457      $      270,604    
 Interest-bearing                                                    1,214,437             1,138,453           907,846    
 Total deposits                                                      1,807,825             1,619,910           1,178,450  
 Borrowings:                                                                                                              
 FHLB and Federal Reserve borrowings                                 198,041               149,563             10,000     
 Subordinated notes                                                  24,248                24,291              14,459     
 Accrued interest payable                                            612                   453                 417        
 Other liabilities                                                   19,413                24,476              21,708     
 Liabilities held for sale                                           —                     —                   126        
 Total liabilities                                                   2,050,139             1,818,693           1,225,160  
                                                                                                                          
 SHAREHOLDERS’ EQUITY                                                                                                     
 Total shareholders’ equity                                          161,439               154,962             128,703    
 Total liabilities and shareholders’ equity                   $      2,211,578    $        1,973,655    $      1,353,863  



First Western Financial, Inc.
Consolidated Financial Summary (unaudited)

                                                                                                                                                     
                                                                               March 31,                December 31,               March 31,         
 (Dollars in thousands)                                                        2021                     2020                       2020              
 Loan Portfolio                                                                                                                                      
 Cash, Securities and Other ((1))                                              $     363,155            $      357,020             $      147,157    
 Construction and Development                                                        110,024                   131,111                    25,461     
 1-4 Family Residential                                                              452,591                   455,038                    412,306    
 Non-Owner Occupied CRE                                                              317,457                   281,943                    192,350    
 Owner Occupied CRE                                                                  161,787                   163,042                    121,138    
 Commercial and Industrial                                                           141,770                   146,031                    144,066    
 Total loans held for investment                                                     1,546,784                 1,534,185                  1,042,478  
 Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net          (2,858     )              (1,352     )               1,473      
 Gross loans                                                                   $     1,543,926          $      1,532,833           $      1,043,951  
 Mortgage loans held for sale                                                  $     176,644            $      161,843             $      64,120     
                                                                                                                                                     
 Deposit Portfolio                                                                                                                                   
 Money market deposit accounts                                                 $     918,940            $      847,430             $      671,641    
 Time deposits                                                                       157,072                   172,682                    150,190    
 Negotiable order of withdrawal accounts                                             130,540                   113,052                    82,092     
 Savings accounts                                                                    7,885                     5,289                      3,923      
 Total interest-bearing deposits                                                     1,214,437                 1,138,453                  907,846    
 Noninterest-bearing accounts                                                        593,388                   481,457                    270,604    
 Total deposits                                                                $     1,807,825          $      1,619,910           $      1,178,450  

 ((1)) Includes PPP loans.



First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)

                                                                                                                                                          
                                                                     As of and for the Three Months Ended                                                 
                                                                     March 31,                    December 31,                   March 31,                
 (Dollars in thousands)                                              2021                         2020                           2020                     
 Average Balance Sheets                                                                                                                                   
 Assets                                                                                                                                                   
 Interest-earning assets:                                                                                                                                 
 Interest-bearing deposits in other financial institutions           $     213,577                $      194,179                 $     68,035             
 Available-for-sale securities                                             31,935                        37,512                        55,208             
 Loans                                                                     1,554,990                     1,522,947                     1,016,148          
 Interest-earning assets                                                   1,800,502                     1,754,638                     1,139,391          
 Mortgage loans held for sale                                              175,891                       120,554                       37,798             
 Total interest-earning assets, plus mortgage loans held for sale          1,976,393                     1,875,192                     1,177,189          
 Allowance for loan losses                                                 (12,541    )                  (12,077    )                  (8,010     )       
 Noninterest-earning assets                                                100,415                       103,961                       84,054             
 Total assets                                                        $     2,064,267              $      1,967,076               $     1,253,233          
                                                                                                                                                          
 Liabilities and Shareholders’ Equity                                                                                                                     
 Interest-bearing liabilities:                                                                                                                            
 Interest-bearing deposits                                           $     1,163,010              $      1,094,317               $     830,736            
 FHLB and Federal Reserve borrowings                                       137,626                       192,448                       10,495             
 Subordinated notes                                                        24,259                        18,443                        7,854              
 Total interest-bearing liabilities                                        1,324,895                     1,305,208                     849,085            
 Noninterest-bearing liabilities:                                                                                                                         
 Noninterest-bearing deposits                                              557,707                       483,115                       253,813            
 Other liabilities                                                         21,151                        24,311                        19,874             
 Total noninterest-bearing liabilities                                     578,858                       507,426                       273,687            
 Total shareholders’ equity                                                160,514                       154,442                       130,461            
 Total liabilities and shareholders’ equity                          $     2,064,267              $      1,967,076               $     1,253,233          
                                                                                                                                                          
 Yields (annualized)                                                                                                                                      
 Interest-bearing deposits in other financial institutions                 0.17       %                  0.21       %                  1.26       %       
 Available-for-sale securities                                             2.45                          1.98                          2.14               
 Loans                                                                     3.66                          3.85                          4.33               
 Interest-earning assets                                                   3.22                          3.41                          4.04               
 Mortgage loans held for sale                                              2.62                          2.88                          3.45               
 Total interest-earning assets, plus mortgage loans held for sale          3.17                          3.37                          4.02               
 Interest-bearing deposits                                                 0.33                          0.37                          1.15               
 FHLB and Federal Reserve borrowings                                       0.38                          0.42                          1.95               
 Subordinated notes                                                        5.61                          5.86                          6.97               
 Total interest-bearing liabilities                                        0.44                          0.46                          1.22               
 Net interest margin                                                       2.90                          3.07                          3.14               
 Net interest rate spread                                                  2.78       %                  2.95       %                  2.83       %       



First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)

                                                                                                                                                        
                                                                           As of and for the Three Months Ended                                         
                                                                           March 31,                  December 31,                 March 31,            
 (Dollars in thousands, except share and per share amounts)                2021                       2020                         2020                 
 Asset Quality                                                                                                                                          
 Non-performing loans                                                      $      4,021               $        4,058               $      10,451        
 Non-performing assets                                                            4,021                        4,252                      11,109        
 Net charge-offs                                                           $      —                   $        1                   $      —             
 Non-performing loans to total loans                                              0.26       %                 0.26       %               1.00       %  
 Non-performing assets to total assets                                            0.18                         0.22                       0.82          
 Allowance for loan losses to non-performing loans                                311.84                       308.99                     78.86         
 Allowance for loan losses to total loans                                         0.81                         0.82                       0.79          
 Allowance for loan losses to bank originated loans excluding PPP ((1))           1.01                         0.98                       0.79          
 Net charge-offs to average loans                                                 0.00       % ((2))           0.00       % ((2))         —          %  
                                                                                                                                                        
 Assets Under Management                                                   $      6,485,647           $        6,255,336           $      5,636,500     
                                                                                                                                                        
 Market Data                                                                                                                                            
 Book value per share at period end                                               20.29                        19.49                      16.26         
 Tangible book value per common share ((1))                                $      17.24               $        16.44               $      13.39         
 Weighted average outstanding shares, basic                                       7,935,664                    7,930,854                  7,863,564     
 Weighted average outstanding shares, diluted                                     8,098,680                    8,015,780                  7,930,611     
 Shares outstanding at period end                                                 7,957,900                    7,951,773                  7,917,489     
                                                                                                                                                        
 Consolidated Capital                                                                                                                                   
 Tier 1 capital to risk-weighted assets                                           10.31      %                 9.96       %               10.96      %  
 CET1 to risk-weighted assets                                                     10.31                        9.96                       10.96         
 Total capital to risk-weighted assets                                            13.11                        12.80                      13.31         
 Tier 1 capital to average assets                                                 7.35                         7.45                       8.81          
                                                                                                                                                        
 Bank Capital                                                                                                                                           
 Tier 1 capital to risk-weighted assets                                           10.60                        10.22                      10.35         
 CET1 to risk-weighted assets                                                     10.60                        10.22                      10.35         
 Total capital to risk-weighted assets                                            11.57                        11.20                      11.23         
 Tier 1 capital to average assets                                                 7.53       %                 7.62       %               8.33       %  

((1)) Represents a Non-GAAP financial measure. See “Reconciliation of
Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most
directly comparable GAAP financial measure.
((2)) Value results in an immaterial amount.



First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)

Reconciliations of Non-GAAP Financial Measures

                                                                                                                                                   
                                                                     As of and for the Three Months Ended                                          
                                                                     March 31,                December 31,                    March 31,            
 (Dollars in thousands, except share and per share amounts)          2021                     2020                            2020                 
 Tangible Common                                                                                                                                   
 Total shareholders' equity                                          $      161,439           $      154,962                  $      128,703       
 Less: goodwill and other intangibles, net                                  24,254                   24,258                          19,712        
 Less: intangibles held for sale ((1))                                      —                        —                               3,000         
 Tangible common equity                                              $      137,185           $      130,704                  $      105,991       
                                                                                                                                                   
 Common shares outstanding, end of period                                   7,957,900                7,951,773                       7,917,489     
 Tangible common book value per share                                $      17.24             $      16.44                    $      13.39         
                                                                                                                                                   
 Net income available to common shareholders                         $      5,999             $      4,874                    $      1,334         
 Return on tangible common equity (annualized)                              17.49      %             14.92      %                    5.03       %  
                                                                                                                                                   
 Efficiency                                                                                                                                        
 Non-interest expense                                                $      15,629            $      15,614                   $      14,647        
 Less: amortization                                                         4                        4                               2             
 Less: provision on other real estate owned                                 —                        76                              —             
 Less: loss on assets held for sale                                         —                        —                               553           
 Plus: gain on sale of LA fixed income team                                 —                        (62        )                    —             
 Adjusted non-interest expense                                       $      15,625            $      15,596                   $      14,092        
                                                                                                                                                   
 Net interest income                                                 $      13,053            $      13,457                   $      8,931         
 Non-interest income                                                        10,615                   9,954                           7,767         
 Total income                                                        $      23,668            $      23,411                   $      16,698        
 Efficiency ratio                                                           66.02      %             66.62      %                    84.39      %  
                                                                                                                                                   
 Gross Revenue                                                                                                                                     
 Total income before non-interest expense                            $      23,668            $      22,716                   $      16,331        
 Plus: provision for loan losses                                            —                        695                             367           
 Gross revenue                                                       $      23,668            $      23,411                   $      16,698        
                                                                                                                                                   
 Allowance to Bank Originated Loans Excluding PPP                                                                                                  
 Total loans held for investment                                     $      1,546,784         $      1,534,185                $      1,042,478     
 Less: loans acquired                                                       120,839                  127,233                         —             
 Less: bank originated PPP loans                                            183,005                  130,019                         —             
 Bank originated loans excluding PPP                                 $      1,242,940         $      1,276,933                $      1,042,478     
                                                                                                                                                   
 Allowance for loan losses                                           $      12,539            $      12,539                   $      8,242         
                                                                                                                                                   
 Allowance for loan losses to bank originated loans excluding PPP           1.01       %             0.98       %                    0.79       %  

 ((1)  )Represents only the intangible portion of Assets held for sale.



First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)

                                                                                                                                
                                                                 As of and for the Three Months Ended                           
                                                                 March 31,            December 31,             March 31,        
 (Dollars in thousands, except share and per share data)         2021                 2020                     2020             
 Adjusted Net Income Available to Common Shareholders                                                                           
 Net income available to common shareholders                     $      5,999         $        4,874           $      1,334     
 Plus: loss on intangibles held for sale, net of tax impact             —                      —                      438       
 Adjusted net income available to shareholders                   $      5,999         $        4,874           $      1,772     
                                                                                                                                
 Adjusted Basic Earnings Per Share                                                                                              
 Basic earnings per share                                        $      0.76          $        0.61            $      0.17      
 Plus: loss on intangibles held for sale                                —                      —                      0.06      
 Adjusted basic earnings per share                               $      0.76          $        0.61            $      0.23      
                                                                                                                                
 Adjusted Diluted Earnings Per Share                                                                                            
 Diluted earnings per share                                      $      0.74          $        0.61            $      0.17      
 Plus: loss on intangibles held for sale                                —                      —                      0.05      
 Adjusted diluted earnings per share                             $      0.74          $        0.61            $      0.22      
                                                                                                                                
 Adjusted Return on Average Assets (annualized)                                                                                 
 Return on average assets                                               1.16   %               0.99     %             0.43   %  
 Plus: loss on intangibles held for sale                                —                      —                      0.14      
 Adjusted return on average assets                                      1.16   %               0.99     %             0.57   %  
                                                                                                                                
 Adjusted Return on Average Shareholders' Equity (annualized)                                                                   
 Return on average shareholders' equity                                 14.95  %               12.62    %             4.09   %  
 Plus: loss on intangibles held for sale                                —                      —                      1.34      
 Adjusted return on average shareholders' equity                        14.95  %               12.62    %             5.43   %  
                                                                                                                                
 Adjusted Return on Tangible Common Equity (annualized)                                                                         
 Return on tangible common equity                                       17.49  %               14.92    %             5.03   %  
 Plus: loss on intangibles held for sale                                —                      —                      1.66      
 Adjusted return on tangible common equity                              17.49  %               14.92    %             6.69   %  

(https://www.globenewswire.com/NewsRoom/AttachmentNg/80292151-ffab-4c1f-81dd-2c0bc66e8142)



GlobeNewswire, Inc. 2021
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