First Western Financial’s Earnings Call Highlights Growth

First Western Financial ((MYFW)) has held its Q1 earnings call. Read on for the main highlights of the call.

First Western Financial’s recent earnings call painted a predominantly positive picture, highlighting significant improvements in profitability, net interest margin, and asset quality. Despite challenges such as flat loan production and a decrease in assets under management, the company remains optimistic about its growth trajectory through strategic initiatives and market expansion.

Increased Profitability and Net Income

First Western Financial reported a net income of $4.2 million, or $0.43 per diluted share, marking a substantial increase from the previous quarter. This continues a positive trend for the company, showcasing its ability to enhance profitability.

Improvement in Net Interest Margin

The company experienced an expansion in its net interest margin, which rose by 16 basis points from the prior quarter to 2.61%. This improvement was attributed to a reduction in deposit costs and an increase in the average yield on interest-earning assets.

Successful Deposit Gathering

First Western Financial saw an increase in non-interest-bearing deposits, bolstered by the addition of new clients and inflows from existing ones. This contributed to an improved deposit mix, further strengthening the company’s financial position.

Asset Quality Improvement

Positive trends in asset quality were noted, with a decline in non-performing assets relative to total assets. The successful resolution of two large OREO properties, sold for a net gain, also underscored the company’s asset management capabilities.

Expansion in Trust Investment Management

Efforts to grow the trust investment management business are underway, with strategic hires from Goldman Sachs and other financial institutions. These moves are expected to drive future growth in this segment.

Flat Loan Production

The loan portfolio remained stable, with $71 million in new loan production being offset by $72 million in loan payoffs. This balance reflects the current economic conditions and the company’s cautious approach to loan growth.

Decrease in Assets Under Management

A decrease of $144 million in assets under management was reported, primarily due to net withdrawals in fixed fee accounts. This highlights a challenge the company faces in maintaining its asset base.

Potential Economic Uncertainty Impact

Concerns were raised about the impact of economic uncertainty and tariffs on loan demand, which could affect loan growth for the year. The company remains vigilant in monitoring these external factors.

Forward-Looking Guidance

Looking ahead, First Western Financial’s management emphasized the continuation of positive trends in profitability, asset quality, and expense management. The focus remains on driving further growth and enhancing shareholder value, despite some challenges in the broader economic environment.

In summary, First Western Financial’s earnings call highlighted a positive outlook, with notable improvements in key financial metrics. While challenges such as flat loan production and decreased assets under management persist, the company’s strategic initiatives and market expansion efforts are expected to support continued growth and profitability.