First Western Financial Reports 63.5% Increase in Net Income for 2024

First Western Financial, Inc. (FWFI), a Denver-based financial holding company, reported net income available to common shareholders of $8.5 million for the year ended December 31, 2024, a 63.5% increase compared to $5.2 million in 2023. This increase stemmed from a $1.6 million rise in net interest income (after provision for credit losses) and a $5.8 million increase in non-interest income, partially offset by a $2.9 million increase in non-interest expense. Total assets reached $2.92 billion, with total loans (excluding mortgage loans held for sale) at $2.43 billion and total deposits at $2.51 billion. The company managed $7.32 billion in assets under management (AUM), an 8.4% increase year-over-year.

Net interest income before provision for credit losses decreased by $6.8 million (9.6%) to $64.3 million in 2024, primarily due to higher average interest-bearing deposit balances and rates. Non-interest income increased by $5.7 million (26.1%) to $27.7 million, driven by higher gains on mortgage loan sales, increased risk management and insurance fees, and a decrease in net losses on loans accounted for under the fair value option. Non-interest expense rose by $2.9 million (3.8%) to $78.5 million, mainly due to increased operational costs, technology investments, and higher occupancy expenses. The company employed 321 associates as of December 31, 2024.

FWFI's business strategy focuses on building out existing markets, deepening client relationships, generating referrals, developing client relationships through product groups, expanding into new markets, growing its core deposit franchise, attracting talent, and developing new products. The company operates through a network of twenty locations across Colorado, Arizona, Wyoming, Montana, and California, comprised of fourteen private trust bank offices, five loan production offices, and one trust office. The company's lending portfolio includes commercial and industrial loans, residential real estate loans, commercial real estate loans, and other consumer loans, with a significant portion concentrated in Colorado, Arizona, Wyoming, Montana, and California.

Key operational developments included an 8.4% increase in AUM to $7.32 billion and a decrease in total deposits of $14.8 million (0.6%) to $2.51 billion. The company's loan portfolio experienced a decrease of $105.35 million (4.2%) to $2.425 billion, primarily due to net declines in certain loan categories. The company also repurchased 5,501 shares of its common stock under its 2024 Repurchase Plan, leaving 194,499 shares available for future repurchase. The company noted that it does not currently anticipate paying cash dividends on its common stock in the foreseeable future.

FWFI's 10-K filing highlights several risk factors, including geographic concentration, the soundness of other financial institutions, economic changes affecting real estate, interest rate fluctuations, competition, regulatory compliance, cybersecurity risks, and the accuracy of estimates and assumptions used in financial reporting. The company also discussed its compliance with regulatory capital requirements and its ongoing efforts to manage various risks associated with its business operations and growth strategy. The company's outlook is contingent upon various factors, including economic conditions, interest rates, and the success of its strategic initiatives.