Summary of First Western Financial (MYFW) Q4 2025 Earnings Call

1Key Financial Results and Metrics

Net Income: $3.3 million, or $0.34 per diluted share, up from the previous quarter.

Tangible Book Value: Increased by 1.6% in Q4.

Loan Growth: Loans held for investment rose by $59 million; new loan production was $146 million, primarily in commercial real estate.

Deposits: Total deposits increased by $102 million, with average deposits up 10% year-over-year.

Net Interest Income: Increased by 5.6% quarter-over-quarter and 21.7% year-over-year; net interest margin (NIM) improved to 2.71%, up 17 basis points from the prior quarter.

Noninterest Income: Decreased by approximately $800,000 due to seasonal declines in mortgage loan sales and risk management fees.

Noninterest Expense: Increased by $1.2 million, impacted by a one-time $1.4 million write-down on an OREO property.

2Strategic Updates and Business Highlights

The company is focused on generating new loans and deposits through superior service rather than competitive pricing.

A conservative approach to new loan production continues, with disciplined underwriting and pricing criteria.

The Trust and Investment Management (PTIM) segment is undergoing restructuring to enhance performance, with a shift towards fiduciary and planning-driven services.

The company has added eight mortgage loan officers (MLOs), a 45% increase, to strengthen its mortgage operations.

3Forward Guidance and Outlook

Management expects loan and deposit growth in 2026 to mirror 2025 levels, supported by a strong pipeline and ongoing market disruption from M&A activity.

Positive trends in net interest margin and operating leverage are anticipated, with a target of reaching a 1% return on assets (ROA) in the near term.

The company is optimistic about its ability to capitalize on market opportunities and improve financial performance in 2026.

4Bad News, Challenges, or Points of Concern

A write-down on an OREO property negatively impacted earnings per share by $0.10 after tax.

Noninterest income has shown a decline, particularly in mortgage banking, due to seasonal factors.

The company faces competitive pressures in the market, particularly regarding deposit pricing.

The Trust and Investment Management segment experienced a decrease in assets under management, attributed to net withdrawals in lower-fee product categories.

5Notable Q&A Insights

Management indicated that while they expect further NIM expansion, it may not be as significant as in 2025.

The company has about $250 million in fixed-rate loans maturing over the next year, which presents opportunities for repricing.

There is a focus on maintaining a deposit beta in the mid-50s, with expectations that this can be sustained.

The company is prioritizing organic growth over acquisitions, leveraging market disruptions to attract talent and clients. Overall, First Western Financial reported solid financial performance in Q4 2025, with a focus on strategic growth initiatives and a positive outlook for 2026, despite some challenges in noninterest income and competitive pressures.