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MYFW - First Western Financial Inc News Story

$26.59 0.1  0.3%

Last Trade - 16/04/21

Sector
Financials
Size
Small Cap
Market Cap £153.0m
Enterprise Value £168.8m
Revenue £70.3m
Position in Universe 4468th / 6850

First Western Reports Fourth Quarter 2020 Financial Results

Thu 28th January, 2021 9:15pm
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Fourth Quarter 2020 Summary
* Net income available to common shareholders of $4.9 million in Q4 2020,
compared to $9.6 million in Q3 2020 and $2.6 million in Q4 2019
* Diluted EPS of $0.61 in Q4 2020, compared to $1.21 in Q3 2020 and $0.32 in
Q4 2019
* Gross revenue((1)) of $23.4 million in Q4 2020, compared to $31.0 million in
Q3 2020 and $16.2 million in Q4 2019
* Net interest margin, including the impact of Paycheck Protection Program
(“PPP”) loans, was consistent with Q3 2020 at 3.07% and an increase from
2.91% in Q4 2019
* Total assets of $1.97 billion, remained relatively flat from Q3 2020 and up
57.7% from Q4 2019
* Total deposits of $1.62 billion, up 3.6% from Q3 2020 and 49.1% from Q4 2019
* Gross loans of $1.53 billion, up 1.8% from Q3 2020 and 53.6% from Q4 2019
* Loans under active COVID-19 loan modification agreements declined 96.7% from
$63.0 million in Q3 2020, to $2.1 million in Q4 2020
* Non-performing assets to total assets declined to 0.22% from 0.53% in Q3
2020 and 1.03% in Q4 2019
((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, Jan. 28, 2021 (GLOBE NEWSWIRE) -- First Western Financial, Inc.,
(“First Western” or the “Company”) (NASDAQ: MYFW), today reported
financial results for the fourth quarter ended December 31, 2020.

Net income available to common shareholders was $4.9 million, or $0.61 per
diluted share, for the fourth quarter of 2020. This compares to $9.6 million,
or $1.21 per diluted share, for the third quarter of 2020, and $2.6 million,
or $0.32 per diluted share, for the fourth quarter of 2019.

Scott C. Wylie, CEO of First Western, commented, “Although we saw a seasonal
decline in mortgage activity during the fourth quarter, we were still able to
nearly double our earnings from the prior year due primarily to the strong
balance sheet growth we generated in 2020, which resulted in a 64%
year-over-year increase in our net interest income. We had another strong
quarter of loan production and core deposit gathering, largely due to
continued growth in commercial relationships.

“We also continued to see positive trends in asset quality, which reflects
the strength of our borrowers and our conservative underwriting. Our total
non-performing assets declined by approximately 60% from the end of the prior
quarter, while only a small number of loans remain on deferral. We continue to
closely monitor our borrowers and have not seen any meaningful deterioration
in credit quality resulting from the recent surge in COVID-19 cases.

“We believe we are well positioned to generate another year of strong
balance sheet growth in 2021, as our commercial banking initiative gains
additional traction and we continue to have success competing against and
taking business from larger banks. With the growth we have seen in our
commercial client roster over the past year, we also believe that we have good
opportunities to expand those relationships to include other products and
services across the First Western banking and wealth management platform. As
we continue to grow our balance sheet and expand client relationships, we
expect to realize additional operating leverage, consistently deliver strong
returns, and further enhance the value of the First Western franchise in the
years to come,” said Mr. Wylie.

                                                                                                                             
                                                        For the Three Months Ended                                           
                                                        December 31,            September 30,           December 31,         
 (Dollars in thousands, except per share data)          2020                    2020                    2019                 
 Earnings Summary                                                                                                            
 Net interest income                                    $        13,457         $        12,918         $        8,190       
 Less: provision for loan losses                                 695                     1,496                   447         
 Total non-interest income                                       9,954                   18,032                  8,228       
 Total non-interest expense                                      15,614                  16,632                  13,082      
 Income before income taxes                                      7,102                   12,822                  2,889       
 Income tax expense                                              2,228                   3,192                   317         
 Net income available to common shareholders                     4,874                   9,630                   2,572       
 Basic earnings per common share                                 0.61                    1.22                    0.33        
 Diluted earnings per common share                               0.61                    1.21                    0.32        
                                                                                                                             
 Return on average assets (annualized)                           0.99     %              2.06     %              0.82     %  
 Return on average shareholders' equity (annualized)             12.62                   26.43                   8.06        
 Return on tangible common equity (annualized) ((1))             14.92                   31.49                   9.85        
 Net interest margin                                             3.07                    3.07                    2.91        
 Efficiency ratio ((1))                                          66.62    %              53.40    %              80.54    %  



(__________________________________________()(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 Fourth Quarter 2020

Revenue

Gross revenue( (1)) was $23.4 million for the fourth quarter of 2020, compared
to $31.0 million for the third quarter of 2020. The decrease in revenue was
driven by an $8.1 million decrease in non-interest income, primarily due to a
seasonal decline and processing constraints that impacted mortgage segment
revenue.

Relative to the fourth quarter of 2019, gross revenue increased $7.2 million
from $16.2 million, or 44.2%. The increase in revenue was primarily due to a
$5.3 million increase in net interest income driven by improving net interest
margin and 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 fourth quarter of 2020 was $13.5 million, an
increase of 4.2% from $12.9 million in the third quarter of 2020. The increase
in net interest income was primarily driven by a $60.1 million, or 4.1%,
increase in average loan balances attributed to organic growth and $1.0
million from PPP income.

Relative to the fourth quarter of 2019, net interest income increased 64.3%
from $8.2 million. The year-over-year increase in net interest income was due
primarily to growth in average loans including organic growth, the impact of
PPP loans, and the branch acquisition.

Net Interest Margin

Net interest margin for the fourth quarter of 2020 remained flat from the
third quarter of 2020, at 3.07%. On a net basis, the PPP program negatively
impacted net interest margin by 12 basis points. This was primarily driven by
amortization of SBA fee income and deferred loan origination expense of $0.7
million and interest income from PPP loans of $0.3 million. The negative
impact was offset by an increase of 9 basis points relating to the impact of
purchase accretion from the branch acquisition completed in the second quarter
2020. Net interest margin was also negatively impacted by excess liquidity
during the period, although the excess liquidity was a contributor to growth
in net interest income.

Relative to the fourth quarter of 2019, the net interest margin increased from
2.91%, primarily due to an 84 basis point decline in cost of deposits,
partially offset by a 62 basis point reduction in average yields on interest
earning assets.

Non-interest Income

Non-interest income for the fourth quarter of 2020 was $10.0 million, a
decrease of 44.8% from $18.0 million in the third quarter of 2020. The
decrease was attributable to a seasonal decline in demand for mortgage loans
in the secondary market, operational constraints that limited the number of
mortgage loans that could be processed in the quarter, and lower margins due
to investor pricing pressure driven by high volume of originations in the MBS
market. While mortgage loan lock volume declined 47.6% from the third quarter
of 2020, the Company originated $414.5 million of mortgage loans for sale
during the fourth quarter of 2020, compared to $376.3 million the previous
quarter, an increase of $38.2 million.

Relative to the fourth quarter of 2019, non-interest income increased 21.0%
from $8.2 million. The increase was attributable to higher net gain on
mortgage loans of 67.6%, primarily related to an increase in mortgage lock
volume of 125.8% year-over-year.

Non-interest Expense

Non-interest expense for the fourth quarter of 2020 was $15.6 million, a
decrease of 6.1% from $16.6 million for the third quarter of 2020. The
decrease was attributable to lower incentive compensation accruals and lower
occupancy costs related to the consolidation of other locations acquired as
part of the branch acquisition in the second quarter of 2020. This was
partially offset by higher professional fees related to the disposition of the
Los Angeles fixed income portfolio management team (“LA fixed income
team”) and higher FDIC insurance related to deposit growth.

Non-interest expense increased 19.4% from $13.1 million in the fourth quarter
of 2019. The increase was primarily due to higher salaries and employee
benefits expense, additional FDIC insurance, and additional data processing
costs resulting from the personnel and assets added through the branch
purchase and organic growth.

The Company’s efficiency ratio((1)) was 66.6% in the fourth quarter of 2020,
compared with 53.4% in the third quarter of 2020 and 80.5% in the fourth
quarter of 2019.

((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 $2.2 million for the fourth quarter
of 2020, representing an effective tax rate of 31.4%, compared to 24.9% for
the third quarter of 2020. The increase in effective tax rate in the fourth
quarter of 2020 was primarily attributable to recording a valuation allowance
of $0.4 million related to our net operating loss with the State of California
following the sale of our LA fixed income team in the fourth quarter.

Loan Portfolio

Total loans, including mortgage loans held for sale, were $1.70 billion at
December 31, 2020, an increase of $98.7 million from the end of the prior
quarter and an increase of $648.4 million from December 31, 2019.

Total loans held for investment, were $1.53 billion at December 31, 2020, an
increase of 1.8% from $1.51 billion at September 30, 2020, and an increase of
53.9% from $996.6 million at December 31, 2019. The increase in total loans
held for investment from September 30, 2020 was primarily due to growth in the
commercial real estate, construction portfolio, and 1-4 family residential
portfolios.

PPP loans were $142.9 million as of December 31, 2020, a decrease of 30.7%
from $206.1 million as of September 30, 2020. As of December 31, 2020, the
Company has submitted loan forgiveness applications to the Small Business
Administration (“SBA”) on behalf of clients for $123.8 million and
received forgiveness and funds remitted in the amount of $54.8 million from
the SBA. As of December 31, 2020, there was $1.3 million remaining in net fees
to be recognized upon forgiveness.

Deposits

Total deposits were $1.62 billion at December 31, 2020, compared to $1.56
billion at September 30, 2020, and $1.09 billion at December 31, 2019. The
increase in total deposits from September 30, 2020 was primarily attributable
to an increase in money market deposits.

Average total deposits for the fourth quarter of 2020 increased $114.6
million, or 31.3% annualized, from the third quarter of 2020 and $485.0
million, or 44.4%, from the fourth quarter of 2019. The increase was primarily
attributable to an increase in money market deposits.

Borrowings

Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $149.6
million as of December 31, 2020, compared to $222.1 million as of September
30, 2020, a decrease of $72.5 million from the end of the prior quarter, and
an increase of $139.6 million from December 31, 2019. The decrease from
September 30, 2020 is attributable to the payback of funds received from the
Paycheck Protection Program Loan Facility (“PPPLF”) from the Federal
Reserve as PPP loans are forgiven. The balances in PPPLF reduced by $69.5
million in the fourth quarter 2020 when compared to the third quarter 2020 due
to the corresponding forgiveness of PPP loans. Borrowing from this facility is
expected to match the balances of the PPP loans. The increase from December
30, 2019 is attributable to participation in the PPPLF.

Assets Under Management

Total assets under management (“AUM”) increased by $124.2 million during
the fourth quarter to $6.26 billion as of December 31, 2020, compared to $6.13
billion as of September 30, 2020, and $6.19 billion as of December 31, 2019.
The increase was primarily attributable to new accounts and contributions to
existing accounts, as well as improving market conditions causing an increase
in assets under management balances. The increase in the fourth quarter AUM
was partially offset by the sale of the LA fixed income team, resulting in a
decline in investment agency balances of $330.6 million.

Credit Quality

Non-performing assets totaled $4.3 million, or 0.22% of total assets, as of
December 31, 2020, compared with $10.4 million, or 0.53% of total assets, as
of September 30, 2020 and $12.9 million, or 1.03% of total assets, as of
December 31, 2019. The decline in non-performing assets from prior quarter was
primarily due to the payoff of one large non-performing loan.

As a result of the COVID-19 pandemic, a loan modification program was designed
and implemented to assist our clients experiencing financial stress resulting
from the economic impacts caused by the global pandemic. The Company offered
loan extensions, temporary payment moratoriums, and financial covenant waivers
for commercial and consumer borrowers impacted by the pandemic who had a pass
risk rating and had not been delinquent over 30 days on payments in the last
two years. As of January 25, 2021, all borrowers were out of their deferral
period and all are performing.

As of December 31, 2020, the Company has active loan modification agreements
on two loans across multiple industries in the amount of $2.1 million,
representing a decline of 96.7% from $63.0 million, as of September 30, 2020.
COVID-19 loan modification agreements represented 0.1% of total loans, as of
December 31, 2020, compared with 4.2% of total loans, as of September 30,
2020. Most of the temporary payment moratoriums were for a period of 180 days
or less and the Company is recognizing interest income on these loans.

The Company continues to meet regularly with clients who could be more highly
impacted by the COVID-19 pandemic. The Company receives and reviews current
financial data and cash flow forecasts from borrowers with loan modification
agreements. As of December 31, 2020, loans which were granted modifications
and the modification term has ended have returned to performing status.

The Company recorded a provision for loan losses of $0.7 million in the fourth
quarter of 2020, compared with $0.4 million in the fourth quarter of 2019. The
higher provision was primarily due to the growth in the loan portfolio. The
Company has increased loan level reviews and portfolio monitoring to
thoroughly assess how its clients are being impacted by the current
environment.

Capital

As of December 31, 2020, First Western (“Consolidated”) and First Western
Trust Bank (“Bank”) exceeded the minimum capital levels required by their
respective regulators. As of December 31, 2020, the Bank was classified as
“well capitalized,” as summarized in the following table:

                                                                         
                                                        December 31,     
                                                        2020             
 Consolidated Capital                                                    
 Tier 1 capital to risk-weighted assets                 9.96          %  
 Common Equity Tier 1 (CET1) to risk-weighted assets    9.96             
 Total capital to risk-weighted assets                  12.80            
 Tier 1 capital to average assets                       7.45             
                                                                         
 Bank Capital                                                            
 Tier 1 capital to risk-weighted assets                 10.22            
 Common Equity Tier 1 (CET1) to risk-weighted assets    10.22            
 Total capital to risk-weighted assets                  11.20            
 Tier 1 capital to average assets                       7.62          %  

Book value per common share increased 21.2% from $16.08 as of December 31,
2019 to $19.49 as of December 31, 2020, and was up 3.6% from $18.81 as of
September 30, 2020.

Tangible book value per common share( ()(1)) increased 25.0% from $13.15 as of
December 31, 2019 to $16.44 as of December 31, 2020, and was up 6.9% from
$15.38 as of September 30, 2020.

During the fourth quarter of 2020, the Company repurchased 426 shares of its
common stock at an average price of $17.30 under its stock repurchase program,
which authorized the repurchase of up to 400,000 shares of its common stock.
As of December 31, 2020, the Company had up to 399,574 shares remaining under
the current stock repurchase authorization.

During the fourth quarter of 2020, the Company completed a subordinated debt
offering, raising $10.0 million from five investors with an initial interest
rate of 4.25%.

((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, January 29, 2021. The call can be accessed via telephone at
877-405-1628. A recorded replay will be accessible through February 5, 2021 by
dialing 855-859-2056; passcode 3477399.

A slide presentation relating to the fourth quarter 2020 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,” and “Allowance to Bank Originated Loans
Excluding PPP”. 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, 2020 (“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                                              
                                                         December 31,           September 30,          December 31,      
 (Dollars in thousands, except per share amounts)        2020                   2020                   2019              
 Interest and dividend income:                                                                                           
 Loans, including fees                                   $        14,656        $        14,138        $        10,554   
 Investment securities                                            186                    173                    321      
 Federal funds sold and other                                     100                    99                     478      
 Total interest and dividend income                               14,942                 14,410                 11,353   
                                                                                                                         
 Interest expense:                                                                                                       
 Deposits                                                         1,015                  1,067                  2,995    
 Other borrowed funds                                             470                    425                    168      
 Total interest expense                                           1,485                  1,492                  3,163    
 Net interest income                                              13,457                 12,918                 8,190    
 Less: provision for loan losses                                  695                    1,496                  447      
 Net interest income, after provision for loan losses             12,762                 11,422                 7,743    
                                                                                                                         
 Non-interest income:                                                                                                    
 Trust and investment management fees                             4,868                  4,814                  4,748    
 Net gain on mortgage loans                                       4,318                  12,304                 2,577    
 Bank fees                                                        391                    340                    261      
 Risk management and insurance fees                               287                    483                    367      
 Net gain on sale of assets                                       —                      —                      183      
 Income on company-owned life insurance                           90                     91                     92       
 Total non-interest income                                        9,954                  18,032                 8,228    
 Total income before non-interest expense                         22,716                 29,454                 15,971   
                                                                                                                         
 Non-interest expense:                                                                                                   
 Salaries and employee benefits                                   9,401                  10,212                 7,990    
 Occupancy and equipment                                          1,435                  1,619                  1,369    
 Professional services                                            1,493                  1,288                  962      
 Technology and information systems                               1,041                  1,032                  928      
 Data processing                                                  1,078                  1,038                  783      
 Marketing                                                        415                    395                    300      
 Amortization of other intangible assets                          4                      4                      7        
 Provision on other real estate owned                             76                     100                    —        
 Other ((1))                                                      671                    944                    743      
 Total non-interest expense                                       15,614                 16,632                 13,082   
 Income before income taxes                                       7,102                  12,822                 2,889    
 Income tax expense                                               2,228                  3,192                  317      
 Net income available to common shareholders             $        4,874         $        9,630         $        2,572    
 Earnings per common share:                                                                                              
 Basic                                                   $        0.61          $        1.22          $        0.33     
 Diluted                                                 $        0.61          $        1.21          $        0.32     

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

                                                                                                                                 
                                                                                                                                 
                                                                                                                                 
                                                                 December 31,          September 30,         December 31,        
 (Dollars in thousands)                                          2020                  2020                  2019                
 ASSETS                                                                                                                          
 Cash and cash equivalents:                                                                                                      
 Cash and due from banks                                         $        2,405        $        2,867        $        4,180      
 Interest-bearing deposits in other financial institutions                153,584               247,491               74,458     
 Total cash and cash equivalents                                          155,989               250,358               78,638     
                                                                                                                                 
 Available-for-sale securities, at fair value                             36,666                40,654                58,903     
 Correspondent bank stock, at cost                                        2,552                 1,295                 585        
 Mortgage loans held for sale                                             161,843               89,872                48,312     
 Loans, net of allowance of $12,539, $11,845 and $7,875                   1,520,294             1,494,231             990,132    
 Premises and equipment, net                                              5,320                 5,116                 5,218      
 Accrued interest receivable                                              6,618                 6,730                 3,048      
 Accounts receivable                                                      4,865                 4,821                 5,238      
 Other receivables                                                        1,422                 1,497                 1,006      
 Other real estate owned, net                                             194                   558                   658        
 Goodwill                                                                 24,191                24,191                19,686     
 Other intangible assets, net                                             67                    72                    28         
 Deferred tax assets, net                                                 6,056                 6,405                 5,047      
 Company-owned life insurance                                             15,449                15,359                15,086     
 Other assets                                                             32,129                28,738                16,544     
 Assets held for sale                                                     —                     3,000                 3,553      
 Total assets                                                    $        1,973,655    $        1,972,897    $        1,251,682  
                                                                                                                                 
 LIABILITIES                                                                                                                     
 Deposits:                                                                                                                       
 Noninterest-bearing                                             $        481,457      $        472,963      $        240,068    
 Interest-bearing                                                         1,138,453             1,090,709             846,716    
 Total deposits                                                           1,619,910             1,563,672             1,086,784  
 Borrowings:                                                                                                                     
 Federal Home Loan Bank Topeka and Federal Reserve borrowings             149,563               222,075               10,000     
 Subordinated notes                                                       24,291                14,447                6,560      
 Accrued interest payable                                                 453                   347                   299        
 Other liabilities                                                        24,476                22,639                20,244     
 Liabilities held for sale                                                —                     141                   117        
 Total liabilities                                                        1,818,693             1,823,321             1,124,004  
                                                                                                                                 
 SHAREHOLDERS’ EQUITY                                                                                                            
 Total shareholders’ equity                                               154,962               149,576               127,678    
 Total liabilities and shareholders’ equity                      $        1,973,655    $        1,972,897    $        1,251,682  
                                                                                                                                 



                                                                                                                                                         
                                                                               December 31,               September 30,              December 31,        
 (Dollars in thousands)                                                        2020                       2020                       2019                
 Loan Portfolio                                                                                                                                          
 Cash, Securities and Other ((1))                                              $      357,020             $      371,481             $        146,701    
 Construction and Development                                                         131,111                    105,717                      28,120     
 1-4 Family Residential                                                               455,038                    446,959                      400,134    
 Non-Owner Occupied CRE                                                               281,943                    243,564                      165,179    
 Owner Occupied CRE                                                                   163,042                    154,138                      127,968    
 Commercial and Industrial                                                            146,031                    185,625                      128,457    
 Total loans held for investment                                                      1,534,185                  1,507,484                    996,559    
 Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net           (1,352     )               (1,408     )                 1,448      
 Gross loans                                                                   $      1,532,833           $      1,506,076           $        998,007    
 Total mortgage loans held for sale                                            $      161,843             $      89,872              $        48,312     
                                                                                                                                                         
 Deposit Portfolio                                                                                                                                       
 Money market deposit accounts                                                 $      847,430             $      805,634             $        615,575    
 Time deposits                                                                        172,682                    177,391                      134,913    
 Negotiable order of withdrawal accounts                                              113,052                    101,708                      91,921     
 Savings accounts                                                                     5,289                      5,976                        4,307      
 Total interest-bearing deposits                                                      1,138,453                  1,090,709                    846,716    
 Noninterest-bearing accounts                                                         481,457                    472,963                      240,068    
 Total deposits                                                                $      1,619,910           $      1,563,672           $        1,086,784  



(_____________________________________(1)) Includes PPP loans.

                                                                                                                                                               
                                                                     As of and for the Three Months Ended                                                      
                                                                     December 31,                   September 30,                  December 31,                
 (Dollars in thousands)                                              2020                           2020                           2019                        
 Average Balance Sheets                                                                                                                                        
 Assets                                                                                                                                                        
 Interest-earning assets:                                                                                                                                      
 Interest-bearing deposits in other financial institutions           $      194,179                 $      178,756                 $      108,245              
 Available-for-sale securities                                              37,512                         40,528                         58,745               
 Loans                                                                      1,522,947                      1,462,872                      958,497              
 Interest-earning assets                                                    1,754,638                      1,682,156                      1,125,487            
 Mortgage loans held for sale                                               120,554                        94,714                         59,813               
 Total interest-earning assets, plus mortgage loans held for sale           1,875,192                      1,776,870                      1,185,300            
 Allowance for loan losses                                                  (12,077    )                   (10,965    )                   (7,756     )         
 Noninterest-earning assets                                                 103,961                        101,874                        78,934               
 Total assets                                                        $      1,967,076               $      1,867,779               $      1,256,478            
                                                                                                                                                               
 Liabilities and Shareholders’ Equity                                                                                                                          
 Interest-bearing liabilities:                                                                                                                                 
 Interest-bearing deposits                                           $      1,094,317               $      1,045,321               $      865,489              
 Federal Home Loan Bank Topeka and Federal Reserve borrowings               192,448                        222,225                        10,000               
 Subordinated notes                                                         18,443                         14,445                         6,560                
 Total interest-bearing liabilities                                         1,305,208                      1,281,991                      882,049              
 Noninterest-bearing liabilities:                                                                                                                              
 Noninterest-bearing deposits                                               483,115                        417,502                        226,948              
 Other liabilities                                                          24,311                         22,564                         19,912               
 Total noninterest-bearing liabilities                                      507,426                        440,066                        246,860              
 Total shareholders’ equity                                                 154,442                        145,722                        127,569              
 Total liabilities and shareholders’ equity                          $      1,967,076               $      1,867,779               $      1,256,478            
                                                                                                                                                               
 Yields (annualized)                                                                                                                                           
 Interest-bearing deposits in other financial institutions                  0.21              %            0.22              %            1.77              %  
 Available-for-sale securities                                              1.98                           1.71                           2.19                 
 Loans                                                                      3.85                           3.87                           4.40                 
 Interest-earning assets                                                    3.41                           3.43                           4.03                 
 Mortgage loans held for sale                                               2.88                           2.72                           3.63                 
 Total interest-earning assets, plus mortgage loans held for sale           3.37                           3.39                           4.01                 
 Interest-bearing deposits                                                  0.37                           0.41                           1.38                 
 Federal Home Loan Bank Topeka and Federal Reserve borrowings               0.42                           0.37                           1.96                 
 Subordinated notes                                                         5.86                           6.12                           7.26                 
 Total interest-bearing liabilities                                         0.46                           0.47                           1.43                 
 Net interest margin                                                        3.07                           3.07                           2.91                 
 Net interest rate spread                                                   2.95              %            2.96              %            2.60              %  
                                                                                                                                                               



                                                                                                                                                            
                                                                           As of and for the Three Months Ended                                             
                                                                           December 31,                 September 30,                December 31,           
 (Dollars in thousands, except share and per share amounts)                2020                         2020                         2019                   
 Asset Quality                                                                                                                                              
 Non-performing loans                                                      $        4,058               $        9,881               $        12,270        
 Non-performing assets                                                              4,252                        10,439                       12,928        
 Net charge-offs                                                           $        1                   $        5                   $        248           
 Non-performing loans to total loans                                                0.26       %                 0.66       %                 1.23       %  
 Non-performing assets to total assets                                              0.22                         0.53                         1.03          
 Allowance for loan losses to non-performing loans                                  308.99                       119.88                       64.18         
 Allowance for loan losses to total loans                                           0.82                         0.79                         0.79          
 Allowance for loan losses to bank originated loans excluding PPP ((1))             0.98                         1.00                         0.79          
 Net charge-offs to average loans                                                   0.00       % ((2))           0.00       % ((2))           0.03       %  
                                                                                                                                                            
 Assets Under Management                                                   $        6,255,336           $        6,131,179           $        6,187,707     
                                                                                                                                                            
 Market Data                                                                                                                                                
 Book value per share at period end                                        $        19.49               $        18.81               $        16.08         
 Tangible book value per common share ((1))                                $        16.44               $        15.38               $        13.15         
 Weighted average outstanding shares, basic                                         7,930,854                    7,911,871                    7,906,516     
 Weighted average outstanding shares, diluted                                       8,015,780                    7,963,736                    7,950,279     
 Shares outstanding at period end                                                   7,951,773                    7,951,749                    7,940,168     
                                                                                                                                                            
 Consolidated Capital                                                                                                                                       
 Tier 1 capital to risk-weighted assets                                             9.96       %                 9.88       %                 11.31      %  
 Common Equity Tier 1 (CET1) to risk-weighted assets                                9.96                         9.88                         11.31         
 Total capital to risk-weighted assets                                              12.80                        12.03                        12.87         
 Tier 1 capital to average assets                                                   7.45                         7.52                         8.58          
                                                                                                                                                            
 Bank Capital                                                                                                                                               
 Tier 1 capital to risk-weighted assets                                             10.22                        10.28                        10.67         
 Common Equity Tier 1 (CET1) to risk-weighted assets                                10.22                        10.28                        10.67         
 Total capital to risk-weighted assets                                              11.20                        11.26                        11.53         
 Tier 1 capital to average assets                                                   7.62       %                 7.81       %                 8.09       %  

(_____________________________________(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.

                                                                                                                                                       
 Reconciliations of Non-GAAP Financial Measures                                                                                                        
                                                                                                                                                       
                                                                     As of and for the Three Months Ended                                              
                                                                     December 31,                    September 30,              December 31,           
 (Dollars in thousands, except share and per share amounts)          2020                            2020                       2019                   
 Tangible Common                                                                                                                                       
 Total shareholders' equity                                          $      154,962                  $        149,576           $        127,678       
 Less: goodwill                                                             24,191                            24,191                     19,686        
 Less: intangibles held for sale ((1))                                      —                                 3,000                      3,553         
 Less: other intangibles, net                                               67                                72                         28            
 Tangible common equity                                              $      130,704                  $        122,313           $        104,411       
                                                                                                                                                       
 Common shares outstanding, end of period                                   7,951,773                         7,951,749                  7,940,168     
 Tangible common book value per share                                $      16.44                    $        15.38             $        13.15         
                                                                                                                                                       
 Net income available to common shareholders                         $      4,874                    $        9,630             $        2,572         
 Return on tangible common equity (annualized)                              14.92             %               31.49      %               9.85       %  
                                                                                                                                                       
 Efficiency                                                                                                                                            
 Non-interest expense                                                $      15,614                   $        16,632            $        13,082        
 Less: amortization                                                         4                                 4                          7             
 Less: provision on other real estate owned                                 76                                100                        —             
 Plus: Gain on sale of LA fixed income team                                 (62        )                      —                          —             
 Adjusted non-interest expense                                       $      15,596                   $        16,528            $        13,075        
                                                                                                                                                       
 Net interest income                                                 $      13,457                   $        12,918            $        8,190         
 Non-interest income                                                        9,954                             18,032                     8,228         
 Less: net gain on sale of securities                                       —                                 —                          —             
 Less: net gain on sale of assets                                           —                                 —                          183           
 Total income                                                        $      23,411                   $        30,950            $        16,235        
 Efficiency ratio                                                           66.62             %               53.40      %               80.54      %  
                                                                                                                                                       
 Gross Revenue                                                                                                                                         
 Total income before non-interest expense                            $      22,716                   $        29,454            $        15,971        
 Less: net gain on sale of assets                                           —                                 —                          183           
 Plus: provision for loan losses                                            695                               1,496                      447           
 Gross revenue                                                       $      23,411                   $        30,950            $        16,235        
                                                                                                                                                       
 Allowance to Bank Originated Loans Excluding PPP                                                                                                      
 Total loans                                                         $      1,534,185                $        1,507,484         $        996,559       
 Less: loans acquired                                                       127,233                           124,689                    —             
 Less: bank originated PPP loans                                            130,019                           193,213                    —             
 Bank originated loans excluding PPP                                 $      1,276,933                $        1,189,582         $        996,559       
                                                                                                                                                       
 Allowance for loan losses                                           $      12,539                   $        11,845            $        7,875         
 Allowance for loan losses to bank originated loans excluding PPP           0.98              %               1.00       %               0.79       %  

(_____________________________________(1)) Represents only the intangible
portion of assets held for sale



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