MYFW — First Western Financial, Inc.

Summary of First Western Financial, Inc. (MYFW) Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Income: $6.2 million, or 63¢ per diluted share, marking an 85% increase quarter-over-quarter.
• Earnings Growth: This is the third consecutive quarter of increasing net income and earnings per share.
• Tangible Book Value: Increased by 3.3% quarter-over-quarter.
• Loan Portfolio: Loans held for investment rose by $41 million, with new loan production at $116 million.
• Deposits: Total deposits increased by $95 million (10% quarter-over-quarter), reducing the loan-to-deposit ratio to below 95%.
• Net Interest Margin (NIM): Increased to 2.81%, up 10 basis points from the prior quarter, driven by reduced funding costs.
• Noninterest Income: Increased by approximately $600,000, primarily from mortgage loan sales and trust management fees.

2. Strategic Updates and Business Highlights

• Continued focus on disciplined underwriting and pricing criteria for loan production.
• Strengthened banking team contributing to diversified loan production.
• Trust and investment management fees rose by 5.3% year-over-year, with a $43 million increase in assets under management.
• New market president appointed for Scottsdale, Arizona, aimed at enhancing growth opportunities in that region.
• Ongoing recruitment of banking talent in response to market disruptions from M&A activity.

3. Forward Guidance and Outlook

• Management expects loan and deposit growth to remain strong, similar to 2025 levels, with guidance of high single-digit growth.
• Anticipated continued improvement in net interest margin and fee income, although not at the same pace as previous years.
• Positive trends in asset quality are expected to persist, with no significant deterioration anticipated.
• Aiming for a return to a 1% return on assets (ROA) by 2027.

4. Bad News, Challenges, or Points of Concern

• While NIM has improved, management cautioned that future expansion may moderate and not reach previous highs in the near term.
• Seasonal declines in noninterest-bearing deposits are expected in Q2 due to tax payments.
• The competitive landscape for deposits remains high, although management has not felt pressure to raise rates significantly.
• Potential geopolitical risks, such as the Iran war, have not yet impacted client behavior but could pose future risks.

5. Notable Q&A Insights

• Management added one new mortgage loan officer (MLO) and seven front-office bankers, contributing to improved mortgage production.
• Loan growth is diversified across markets, with no significant weakness noted in any specific area.
• The company is focused on organic growth rather than acquisitions, although they remain open to opportunities that align with their strategy.
• The impact of recent layoffs at PNC was discussed, with management expressing confidence in their ability to attract talent from competitors.
• Future expectations for NIM were discussed, with management indicating a long-term target of 3.15-3.20%, but acknowledging that achieving this may take time.

Overall, First Western Financial, Inc. demonstrated strong financial performance in Q1 2026, with positive trends in profitability, loan and deposit growth, and asset quality, while also navigating competitive pressures and potential market challenges.