Second Quarter 2019 Summary
- Net income available to common shareholders of $1.4 million in Q2 2019, compared to net income available to common shareholders of $0.5 million in Q2 2018
- Diluted EPS of $0.18 in Q2 2019, compared to $0.21 in Q1 2019, and $0.08 in Q2 2018
- Adjusted net income available to common shareholders, excluding goodwill impairment charge, of $2.6 million in Q2 2019, an increase from Q2 2018 of 432.1%
- Adjusted diluted EPS, excluding goodwill impairment charge, of $0.33 for Q2 2019, an increase from Q2 2018 of 312.5%
- Q2 2019 financial results include a $1.6 million goodwill impairment charge
- Gross loans, excluding loans held for sale, of $939.4 million, a 3.5% annualized increase from Q1 2019 and an 11.5% increase from Q2 2018
- Average total loans increased to $966.5 million in Q2 2019, a 16.0% annualized increase from Q1 2019
- Total deposits of $1.0 billion, an 11.1% annualized increase from Q1 2019 and a 19.1% increase from Q2 2018
- Efficiency ratio of 78.2%, compared to 83.2% in Q1 2019 and 88.8% in Q2 2018
- Authorized stock repurchase program and opened office in Vail Valley
DENVER, July 25, 2019 (GLOBE NEWSWIRE) -- First Western Financial, Inc., ("First Western" or the "Company") MYFW, today reported financial results for the second quarter ended June 30, 2019.
Net income available to common shareholders was $1.4 million, or $0.18 per diluted share. This compares to $1.6 million, or $0.21 per diluted share, for the first quarter of 2019, and $0.5 million, or $0.08 per share, for the second quarter of 2018, which included $0.6 million of preferred stock dividends. The preferred stock was redeemed in the third quarter of 2018. Financial results for the second quarter of 2019 include a $1.6 million goodwill impairment charge related to the announced sale of the Company's Los Angeles-based fixed income team (a component of the Company's Capital Management segment), which negatively impacted earnings per diluted share by 15 cents. For the second quarter of 2019, adjusted net income, excluding the goodwill impairment charge, available to common shareholders was $2.6 million, or $0.33 per diluted share.
"From an operating perspective, we delivered our strongest quarter since our initial public offering in 2018," said Scott C. Wylie, CEO of First Western. "We continue to successfully attract new clients, resulting in further increases in loans, deposits and assets under management, while our commitment to the mortgage business has put us in good position to capitalize on the increase in demand we are seeing in our markets. As a result, we delivered on our revenue growth, operating efficiency and earnings ramp story. We continue to deliver on strategies to optimize our business model and investment platform, which led to our decision to sign an agreement to sell our Los Angeles-based fixed income team. Although this sale agreement resulted in a goodwill impairment charge in the second quarter, we expect that it will result in a significant increase in tangible book value in the third quarter of 2019 and free up capital and resources that we believe can be more profitably deployed in core areas of our business.
"We expect the positive trends we are experiencing in the business to continue and drive further improvement in our level of profitability in the second half of the year. In addition, with the implementation of our stock repurchase program, we believe we have another catalyst for creating shareholder value going forward," said Mr. Wylie.
| For the Three Months Ended | ||||||||||||
| June 30, | March 30, | June 30, | ||||||||||
| (Dollars in thousands, except per share data) | 2019 | 2019 | 2018 | |||||||||
| Earnings Summary | ||||||||||||
| Net interest income | $ | 7,960 | $ | 7,971 | $ | 7,577 | ||||||
| Less: (recovery of) provision for credit losses | (78 | ) | 194 | — | ||||||||
| Total non-interest income | 8,586 | 6,976 | 6,892 | |||||||||
| Total non-interest expense(1) | 14,659 | 12,602 | 13,084 | |||||||||
| Income before income taxes | 1,965 | 2,151 | 1,385 | |||||||||
| Income tax expense | 561 | 524 | 337 | |||||||||
| Net income | 1,404 | 1,627 | 1,048 | |||||||||
| Preferred stock dividends | — | — | (562 | ) | ||||||||
| Net income available to common shareholders | 1,404 | 1,627 | 486 | |||||||||
| Adjusted net income available to common shareholders(2) | 2,586 | 1,627 | 486 | |||||||||
| Basic and diluted earnings per common share | 0.18 | 0.21 | 0.08 | |||||||||
| Adjusted basic and diluted earnings per common share(2) | $ | 0.33 | $ | 0.21 | $ | 0.08 | ||||||
| Return on average assets | 0.50 | % | 0.57 | % | 0.41 | % | ||||||
| Adjusted return on average assets(2) | 0.91 | 0.57 | 0.41 | |||||||||
| Return on average shareholders' equity | 4.61 | 5.50 | 3.99 | |||||||||
| Adjusted return on average shareholders' equity(2) | 8.50 | 5.50 | 3.99 | |||||||||
| Return on tangible common equity(2) | 5.68 | 6.88 | 3.57 | |||||||||
| Adjusted return on tangible common equity(2) | 10.51 | 6.88 | 3.57 | |||||||||
| Net interest margin | 3.10 | 3.03 | 3.29 | |||||||||
| Efficiency ratio(2) | 78.24 | % | 83.15 | % | 88.84 | % | ||||||
| (1) | Includes non-operating goodwill impairment charge of $1.6 million for the three months ended June 30, 2019. | |
| (2) | 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. |
Operating Results for the Second Quarter 2019
Revenue
Gross revenue (total income before non-interest expense, plus provision for credit losses) was $16.5 million for the second quarter of 2019, compared to $14.9 million for the first quarter of 2019. The increase in revenue was primarily driven by a $1.6 million increase in non-interest income, due to an increase in mortgage activity.
Relative to the second quarter of 2018, gross revenue increased $2.1 million from $14.5 million. The increase was primarily attributable to a $1.7 million increase in non-interest income, due to an increase in mortgage activity.
Net Interest Income
Net interest income for the second quarter of 2019 was $8.0 million, materially unchanged from the first quarter of 2019.
Relative to the second quarter of 2018, net interest income increased 5.1% from $7.6 million. The increase in net interest income from the second quarter of 2018 was primarily driven by higher average loan balances.
Net Interest Margin
Net interest margin for the second quarter of 2019 increased to 3.10% from 3.03% in the first quarter of 2019. The increase was primarily due to a 15 basis point increase in the average yield on interest earning assets, from 4.20% to 4.35%, driven by higher average loan yields and a favorable shift in the mix of earning assets.
Relative to the second quarter of 2018, the net interest margin decreased from 3.29%, primarily due to 46 basis point increase in the average cost of funds, which was partially offset by a 22 basis point increase in the average yield on interest earning assets.
Non-interest Income
Non-interest income for the second quarter of 2019 was $8.6 million, an increase of 23.1% from $7.0 million in the first quarter of 2019 and 24.6% from $6.9 million in the second quarter of 2018. The increase was primarily attributable to higher net gains on mortgage loans sold as a result of a higher volume of mortgages sold in the second quarter of 2019.
Non-interest Expense
Non-interest expense for the second quarter of 2019 was $14.7 million, an increase of 16.3% from $12.6 million for the first quarter of 2019. Non-interest expense for the second quarter of 2019 included a $1.6 million goodwill impairment charge related to the sale of the Company's Los Angeles-based fixed income team. Excluding the goodwill impairment charge, the increase was primarily attributable to an increase in professional services fees related to the announced sale of the Los Angeles-based fixed income team, the 2019 proxy filing, and higher audit related fees associated with internal controls and the preparation for the CECL implementation.
Excluding the goodwill impairment charge, non-interest expense was consistent with the second quarter of 2018.
The Company's efficiency ratio was 78.2% in the second quarter of 2019, compared with 83.2% in the first quarter of 2019 and 88.8% in the second quarter of 2018.
Income Taxes
The Company recorded income tax expense of $0.6 million for the second quarter of 2019, representing an effective tax rate of 28.5%, compared to 24.4% for the first quarter of 2019. The increase is related to the vesting of Restricted Stock Units during the three months ended June 30, 2019.
Loan Portfolio
Gross loans, excluding mortgage loans held for sale, totaled $939.4 million at June 30, 2019, compared to $931.2 million at March 31, 2019 and $842.6 million at June 30, 2018. Average total loans increased in the quarter by an annualized 16.0% from the first quarter of 2019 to $966.5 million. The increase in gross loans from March 31, 2019 was primarily attributable to growth in the residential mortgage loan portfolio and loans secured by cash, securities and other. Higher paydown activity was noted in the second quarter of 2019 compared to the first quarter of 2019 and included the reduction of special mention and substandard credits.
Deposits
Total deposits were $1.0 billion at June 30, 2019, compared to $978.1 million at March 31, 2019, and $843.7 million at June 30, 2018. The increase in total deposits from March 31, 2019 was due primarily to an increase in NOW accounts related to the addition of new clients.
Assets Under Management
Total assets under management increased by $188.0 million during the second quarter to $5.97 billion at June 30, 2019, compared to $5.78 billion at March 31, 2019, and $5.42 billion at June 30, 2018. The increase was primarily attributed to new accounts added in the second quarter of 2019 contributing $161.5 million in new assets.
Credit Quality
Non-performing assets totaled $13.5 million, or 1.13% of total assets, at June 30, 2019, down from $19.4 million, or 1.69% of total assets, at March 31, 2019 due to paydowns.
The Company recorded $8 thousand in net recoveries in the second quarter of 2019.
The Company recorded a recovery of provision for loan losses of $78 thousand in the second quarter of 2019, primarily due to overall improvement in credit quality.
Capital
At June 30, 2019, First Western ("Consolidated") and First Western Trust Bank ("Bank") exceeded the minimum capital levels required by their respective regulators. At June 30, 2019, the Bank was classified as "well capitalized," as summarized in the following table:
| June 30, | |||
| 2019 | |||
| Consolidated Capital | |||
| Common Equity Tier 1(CET1) to risk-weighted assets | 11.41 | % | |
| Tier 1 capital to risk-weighted assets | 11.41 | ||
| Total capital to risk-weighted assets | 13.04 | ||
| Tier 1 capital to average assets | 9.01 | ||
| Bank Capital | |||
| Common Equity Tier 1(CET1) to risk-weighted assets | 10.65 | ||
| Tier 1 capital to risk-weighted assets | 10.65 | ||
| Total capital to risk-weighted assets | 11.53 | ||
| Tier 1 capital to average assets | 8.42 | % |
Tangible book value per common share improved from $9.19 in the second quarter of 2018 to $12.38 in the second quarter of 2019, an improvement of 34.7%.
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, July 26, 2019. The call can be accessed via telephone at 877-405-1628; passcode 1193649. A recorded replay will be accessible through August 2, 2019 by dialing 855-859-2056; passcode 1193649.
A slide presentation relating to the second quarter 2019 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," "Adjusted Net Income Available to Common Shareholders," "Adjusted 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," "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 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 credit 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 21, 2019 ("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
Larry Clark
310-622-8223
MYFW@finprofiles.com
IR@myfw.com
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) | |||||||||||
| For the Three Months Ended | |||||||||||
| June 30, | March 31, | June 30, | |||||||||
| (Dollars in thousands, except per share data) | 2019 | 2019 | 2018 | ||||||||
| Interest and dividend income: | |||||||||||
| Loans, including fees | $ | 10,600 | $ | 10,218 | $ | 9,074 | |||||
| Investment securities | 331 | 310 | 281 | ||||||||
| Federal funds sold and other | 243 | 522 | 150 | ||||||||
| Total interest and dividend income | 11,174 | 11,050 | 9,505 | ||||||||
| Interest expense: | |||||||||||
| Deposits | 2,995 | 2,909 | 1,411 | ||||||||
| Other borrowed funds | 219 | 170 | 517 | ||||||||
| Total interest expense | 3,214 | 3,079 | 1,928 | ||||||||
| Net interest income | 7,960 | 7,971 | 7,577 | ||||||||
| Less: (recovery of) provision for credit losses | (78 | ) | 194 | — | |||||||
| Net interest income, after (recovery of) provision for credit losses | 8,038 | 7,777 | 7,577 | ||||||||
| Non-interest income: | |||||||||||
| Trust and investment management fees | 4,693 | 4,670 | 4,689 | ||||||||
| Net gain on mortgage loans sold | 3,262 | 1,456 | 1,359 | ||||||||
| Bank fees | 341 | 289 | 455 | ||||||||
| Risk management and insurance fees | 194 | 468 | 284 | ||||||||
| Income on company-owned life insurance | 96 | 93 | 105 | ||||||||
| Total non-interest income | 8,586 | 6,976 | 6,892 | ||||||||
| Total income before non-interest expense | 16,624 | 14,753 | 14,469 | ||||||||
| Non-interest expense: | |||||||||||
| Salaries and employee benefits | 7,699 | 7,618 | 7,660 | ||||||||
| Occupancy and equipment | 1,398 | 1,407 | 1,527 | ||||||||
| Professional services | 1,036 | 777 | 1,008 | ||||||||
| Technology and information systems | 1,016 | 1,069 | 1,000 | ||||||||
| Data processing | 742 | 687 | 687 | ||||||||
| Marketing | 441 | 278 | 316 | ||||||||
| Amortization of other intangible assets | 142 | 173 | 230 | ||||||||
| Goodwill impairment | 1,572 | — | — | ||||||||
| Other | 613 | 593 | 656 | ||||||||
| Total non-interest expense | 14,659 | 12,602 | 13,084 | ||||||||
| Income before income taxes | 1,965 | 2,151 | 1,385 | ||||||||
| Income tax expense | 561 | 524 | 337 | ||||||||
| Net income | 1,404 | 1,627 | 1,048 | ||||||||
| Preferred stock dividends | — | — | (562 | ) | |||||||
| Net income available to common shareholders | $ | 1,404 | $ | 1,627 | $ | 486 | |||||
| Earnings per common share: | |||||||||||
| Basic and diluted | $ | 0.18 | $ | 0.21 | $ | 0.08 | |||||
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued) | |||||||||
| June 30, | March 31, | June 30, | |||||||
| 2019 | 2019 | 2018 | |||||||
| (Dollars in thousands) | |||||||||
| ASSETS | |||||||||
| Cash and cash equivalents: | |||||||||
| Cash and due from banks | $ | 1,974 | $ | 2,164 | $ | 994 | |||
| Interest-bearing deposits in other financial institutions | 90,795 | 67,602 | 57,470 | ||||||
| Total cash and cash equivalents | 92,769 | 69,766 | 58,464 | ||||||
| Available-for-sale securities | 51,698 | 53,610 | 46,873 | ||||||
| Correspondent bank stock, at cost | 1,649 | 993 | 3,477 | ||||||
| Mortgage loans held for sale | 36,269 | 19,778 | 35,064 | ||||||
| Loans, net of allowance of $7,575, $7,645 and $7,100 | 931,820 | 923,545 | 835,544 | ||||||
| Promissory notes from related parties | — | — | 2,125 | ||||||
| Premises and equipment, net | 5,683 | 5,815 | 6,255 | ||||||
| Accrued interest receivable | 3,184 | 3,053 | 2,565 | ||||||
| Accounts receivable | 4,718 | 4,561 | 5,504 | ||||||
| Other receivables | 872 | 881 | 1,908 | ||||||
| Other real estate owned, net | 658 | 658 | 658 | ||||||
| Goodwill | 23,239 | 24,811 | 24,811 | ||||||
| Other intangible assets, net | 88 | 229 | 773 | ||||||
| Deferred tax assets, net | 4,607 | 4,549 | 4,971 | ||||||
| Company-owned life insurance | 14,898 | 14,803 | 14,515 | ||||||
| Other assets | 18,313 | 17,636 | 3,066 | ||||||
| Total assets | $ | 1,190,465 | $ | 1,144,688 | $ | 1,046,573 | |||
| LIABILITIES | |||||||||
| Deposits: | |||||||||
| Noninterest-bearing | $ | 229,266 | $ | 226,484 | $ | 212,225 | |||
| Interest-bearing | 775,911 | 751,617 | 631,517 | ||||||
| Total deposits | 1,005,177 | 978,101 | 843,742 | ||||||
| Borrowings: | |||||||||
| Federal Home Loan Bank Topeka borrowings | 36,060 | 20,361 | 75,598 | ||||||
| Subordinated Notes | 6,560 | 6,560 | 13,435 | ||||||
| Accrued interest payable | 274 | 329 | 231 | ||||||
| Other liabilities | 20,237 | 19,669 | 8,609 | ||||||
| Total liabilities | 1,068,308 | 1,025,020 | 941,615 | ||||||
| SHAREHOLDERS' EQUITY | |||||||||
| Total shareholders' equity | 122,157 | 119,668 | 104,958 | ||||||
| Total liabilities and shareholders' equity | $ | 1,190,465 | $ | 1,144,688 | $ | 1,046,573 | |||
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued) | |||||||||
| As of | |||||||||
| June 30, | March 31, | June 30, | |||||||
| (Dollars in thousands) | 2019 | 2019 | 2018 | ||||||
| Loan Portfolio | |||||||||
| Cash, Securities and Other | $ | 149,503 | $ | 130,641 | $ | 135,393 | |||
| Construction and Development | 40,826 | 37,128 | 35,760 | ||||||
| 1 - 4 Family Residential | 373,836 | 360,607 | 307,794 | ||||||
| Non-Owner Occupied CRE | 152,664 | 172,014 | 164,438 | ||||||
| Owner Occupied CRE | 112,660 | 108,873 | 98,393 | ||||||
| Commercial and Industrial | 108,516 | 120,602 | 99,711 | ||||||
| Total loans held for investment | $ | 938,005 | $ | 929,865 | $ | 841,489 | |||
| Deferred costs, net | 1,390 | 1,325 | 1,155 | ||||||
| Gross loans | $ | 939,395 | $ | 931,190 | $ | 842,644 | |||
| Total loans held for sale | $ | 36,269 | $ | 19,778 | $ | 35,064 | |||
| Deposit Portfolio | |||||||||
| Money market deposit accounts | $ | 508,263 | $ | 513,328 | $ | 394,759 | |||
| Time deposits | 176,128 | 176,312 | 166,670 | ||||||
| Negotiable order of withdrawal accounts | 88,687 | 59,464 | 68,742 | ||||||
| Savings accounts | 2,833 | 2,513 | 1,346 | ||||||
| Total interest-bearing deposits | $ | 775,911 | $ | 751,617 | $ | 631,517 | |||
| Noninterest-bearing accounts | $ | 229,266 | $ | 226,484 | $ | 212,225 | |||
| Total deposits | $ | 1,005,177 | $ | 978,101 | $ | 843,742 | |||
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued) | ||||||||||||
| For the Three Months Ended | ||||||||||||
| June 30, | March 31, | June 30, | ||||||||||
| (Dollars in thousands) | 2019 | 2019 | 2018 | |||||||||
| Average Balance Sheets | ||||||||||||
| Average Assets | ||||||||||||
| Interest-earnings assets: | ||||||||||||
| Interest-bearing deposits in other financial institutions | $ | 40,755 | $ | 85,826 | $ | 35,550 | ||||||
| Available-for-sale securities | 52,852 | 50,474 | 49,821 | |||||||||
| Loans | 935,025 | 915,921 | 829,944 | |||||||||
| Promissory notes from related parties(1) | — | — | 5,305 | |||||||||
| Interest earning-assets | 1,028,632 | 1,052,221 | 920,620 | |||||||||
| Mortgage loans held for sale | 31,454 | 13,277 | 31,570 | |||||||||
| Total interest earning-assets, plus loans held-for-sale | 1,060,086 | 1,065,498 | 952,190 | |||||||||
| Allowance for loan losses | (7,648 | ) | (7,567 | ) | (7,100 | ) | ||||||
| Noninterest-earnings assets | 79,735 | 77,780 | 73,245 | |||||||||
| Total assets | $ | 1,132,173 | $ | 1,135,711 | $ | 1,018,335 | ||||||
| Average Liabilities and Shareholders' Equity | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||
| Interest-bearing deposits | $ | 742,002 | $ | 760,507 | $ | 588,916 | ||||||
| Federal Home Loan Bank Topeka borrowings | 17,922 | 10,401 | 54,185 | |||||||||
| Subordinated notes | 6,560 | 6,560 | 13,435 | |||||||||
| Total interest-bearing liabilities | $ | 766,484 | $ | 777,468 | $ | 656,536 | ||||||
| Noninterest-bearing liabilities: | ||||||||||||
| Noninterest-bearing deposits | 225,153 | 220,408 | 249,085 | |||||||||
| Other liabilities | 18,830 | 19,413 | 7,875 | |||||||||
| Total noninterest-bearing liabilities | $ | 243,983 | $ | 239,821 | $ | 256,960 | ||||||
| Shareholders' equity | $ | 121,706 | $ | 118,422 | $ | 104,839 | ||||||
| Total liabilities and shareholders' equity | $ | 1,132,173 | $ | 1,135,711 | $ | 1,018,335 | ||||||
| Yields (annualized) | ||||||||||||
| Interest-bearing deposits in other financial institutions | 2.38 | % | 2.43 | % | 1.69 | % | ||||||
| Available-for-sale securities | 2.51 | 2.46 | 2.26 | |||||||||
| Loans | 4.53 | 4.46 | 4.34 | |||||||||
| Promissory notes from related parties | — | — | 4.75 | |||||||||
| Interest earning-assets | 4.35 | 4.20 | 4.13 | |||||||||
| Mortgage loans held for sale | 3.73 | 3.80 | 3.81 | |||||||||
| Total interest earning-assets, plus loans held for sale | 4.33 | 4.20 | 4.12 | |||||||||
| Interest-bearing deposits | 1.61 | 1.53 | 0.96 | |||||||||
| Federal Home Loan Bank Topeka borrowings | 2.23 | 1.92 | 1.92 | |||||||||
| Subordinated notes | 7.26 | 7.32 | 7.65 | |||||||||
| Total interest-bearing liabilities | 1.68 | 1.58 | 1.17 | |||||||||
| Net interest margin | 3.10 | 3.03 | 3.29 | |||||||||
| Interest rate spread | 2.67 | % | 2.62 | % | 2.96 | % | ||||||
| (1) | Promissory notes from related parties were reclassified to loans in 2018 due to change in composition of related parties. |
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued) | |||||||||||
| As of and for the Three Months Ended | |||||||||||
| June 30, | March 31, | June 30, | |||||||||
| (Dollars in thousands, except per share data) | 2019 | 2019 | 2018 | ||||||||
| Asset Quality | |||||||||||
| Nonperforming loans | $ | 12,803 | $ | 18,713 | $ | 3,052 | |||||
| Nonperforming assets | 13,461 | 19,371 | 3,710 | ||||||||
| Net recoveries | (8 | ) | — | — | |||||||
| Nonperforming loans to total loans | 1.36 | % | 2.01 | % | 0.36 | % | |||||
| Nonperforming assets to total assets | 1.13 | 1.69 | 0.35 | ||||||||
| Allowance for loan losses to nonperforming loans | 59.17 | 40.85 | 232.63 | ||||||||
| Allowance for loan losses to total loans | 0.81 | 0.82 | 0.84 | ||||||||
| Net charge-offs to average loans | — | % | — | % | — | % | |||||
| Assets under management | $ | 5,968,318 | $ | 5,781,297 | $ | 5,415,918 | |||||
| Market Data | |||||||||||
| Book value per share at period end | $ | 15.30 | $ | 15.02 | $ | 13.52 | |||||
| Tangible book value per common share(1) | $ | 12.38 | $ | 11.88 | $ | 9.19 | |||||
| Weighted average outstanding shares, basic | 7,881,999 | 7,873,718 | 5,911,886 | ||||||||
| Weighted average outstanding shares, diluted | 7,897,092 | 7,889,644 | 5,981,421 | ||||||||
| Shares outstanding at period end | 7,983,866 | 7,968,420 | 5,917,667 | ||||||||
| Consolidated Capital | |||||||||||
| Common Equity Tier 1(CET1) to risk-weighted assets | 11.41 | % | 11.13 | % | 7.04 | % | |||||
| Tier 1 capital to risk-weighted assets | 11.41 | 11.13 | 9.42 | ||||||||
| Total capital to risk-weighted assets | 13.04 | 12.78 | 12.12 | ||||||||
| Tier 1 capital to average assets | 9.01 | 8.67 | 7.74 | ||||||||
| Bank Capital | |||||||||||
| Common Equity Tier 1(CET1) to risk-weighted assets | 10.65 | 10.36 | 10.17 | ||||||||
| Tier 1 capital to risk-weighted assets | 10.65 | 10.36 | 10.17 | ||||||||
| Total capital to risk-weighted assets | 11.53 | 11.26 | 11.07 | ||||||||
| Tier 1 capital to average assets | 8.42 | % | 8.07 | % | 8.37 | % | |||||
| (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. |
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued) | |||||||||||
| Reconciliations of Non-GAAP Financial Measures | |||||||||||
| As of and for the Three Months Ended | |||||||||||
| June 30, | March 31, | June 30, | |||||||||
| (Dollars in thousands, except share and per share data) | 2019 | 2019 | 2018 | ||||||||
| Tangible common | |||||||||||
| Total shareholders' equity | $ | 122,157 | $ | 119,668 | $ | 104,958 | |||||
| Less: | |||||||||||
| Preferred stock (liquidation preference) | — | — | 24,968 | ||||||||
| Goodwill | 23,239 | 24,811 | 24,811 | ||||||||
| Other intangibles, net | 88 | 229 | 773 | ||||||||
| Tangible common equity | $ | 98,830 | $ | 94,628 | $ | 54,406 | |||||
| Common shares outstanding, end of period | 7,983,866 | 7,968,420 | 5,917,667 | ||||||||
| Tangible common book value per share | $ | 12.38 | $ | 11.88 | $ | 9.19 | |||||
| Net income, as reported | $ | 1,404 | $ | 1,627 | $ | 1,048 | |||||
| Less: Preferred stock dividends | — | — | 562 | ||||||||
| Income available to common shareholders | $ | 1,404 | $ | 1,627 | $ | 486 | |||||
| Return on tangible common equity (annualized) | 5.68 | % | 6.88 | % | 3.57 | % | |||||
| Efficiency | |||||||||||
| Non-interest expense | $ | 14,659 | $ | 12,602 | $ | 13,084 | |||||
| Less: Amortization | 142 | 173 | 230 | ||||||||
| Less: Goodwill impairment | 1,572 | — | — | ||||||||
| Adjusted non-interest expense | $ | 12,945 | $ | 12,429 | $ | 12,854 | |||||
| Net interest income | $ | 7,960 | $ | 7,971 | $ | 7,577 | |||||
| Non-interest income | 8,586 | 6,976 | 6,892 | ||||||||
| Total income | $ | 16,546 | $ | 14,947 | $ | 14,469 | |||||
| Efficiency ratio | 78.24 | % | 83.15 | % | 88.84 | % | |||||
| Total income before non-interest expense | $ | 16,624 | $ | 14,753 | $ | 14,469 | |||||
| Plus: (recovery of) provision for credit losses | (78 | ) | 194 | — | |||||||
| Gross revenue | $ | 16,546 | $ | 14,947 | $ | 14,469 | |||||
| First Western Financial, Inc. Consolidated Financial Summary (unaudited) (continued) | ||||||||||
| Reconciliations of Non-GAAP Financial Measures | ||||||||||
| As of and for the Three Months Ended | ||||||||||
| June 30, | March 31, | June 30, | ||||||||
| (Dollars in thousands, except share and per share data) | 2019 | 2019 | 2018 | |||||||
| Adjusted Net Income Available To Common Shareholders | ||||||||||
| Net income available to common shareholders | $ | 1,404 | $ | 1,627 | $ | 486 | ||||
| Plus: Goodwill impairment including income tax impact | 1,182 | — | — | |||||||
| Adjusted net income available to shareholders | $ | 2,586 | $ | 1,627 | $ | 486 | ||||
| Adjusted Earnings Per Share | ||||||||||
| Earnings per share | $ | 0.18 | $ | 0.21 | $ | 0.08 | ||||
| Plus: Goodwill impairment including income tax impact | 0.15 | — | — | |||||||
| Adjusted earnings per share | $ | 0.33 | $ | 0.21 | $ | 0.08 | ||||
| Adjusted Return on Average Assets (annualized) | ||||||||||
| Return on average assets | 0.50 | % | 0.57 | % | 0.41 | % | ||||
| Plus: Goodwill impairment including income tax impact | 0.41 | — | — | |||||||
| Adjusted return on average assets | 0.91 | % | 0.57 | % | 0.41 | % | ||||
| Adjusted Return on Average Shareholders' Equity (annualized) | ||||||||||
| Return on average shareholders' equity | 4.61 | % | 5.50 | % | 3.99 | % | ||||
| Plus: Goodwill impairment including income tax impact | 3.89 | — | — | |||||||
| Adjusted return on average shareholders' equity | 8.50 | % | 5.50 | % | 3.99 | % | ||||
| Adjusted Return on Tangible Common Equity (annualized) | ||||||||||
| Return on tangible common equity | 5.68 | % | 6.88 | % | 3.57 | % | ||||
| Plus: Goodwill impairment including income tax impact | 4.83 | — | — | |||||||
| Adjusted return on tangible common equity | 10.51 | % | 6.88 | % | 3.57 | % | ||||
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