First Western Financial Reports Mixed Q3 Results, Net Income Down 31.6%

As of September 30, 2024, First Western Financial, Inc. reported total cash and cash equivalents of $276.2 million, an increase from $254.4 million at the end of 2023. However, total loans decreased to $2.36 billion from $2.51 billion, reflecting a decline in new loan production and lower draws on existing credit lines. Total assets also fell to $2.91 billion from $2.98 billion, while total deposits slightly decreased to $2.50 billion from $2.53 billion. Total liabilities decreased to $2.66 billion, down from $2.73 billion, and total shareholders’ equity rose to $248.8 million from $242.7 million.

For the third quarter of 2024, interest and dividend income increased to $38.1 million from $36.5 million in the same period of 2023. However, net interest income fell to $15.6 million from $16.8 million, primarily due to increased interest expenses, which rose to $22.5 million from $19.7 million. The net interest margin also declined to 2.32% from 2.46%. Net income available to common shareholders for Q3 2024 was $2.1 million, down from $3.1 million in Q3 2023, marking a 31.6% decrease. For the nine months ended September 30, 2024, net income was $5.7 million, down from $8.4 million in the prior year.

Non-interest income for the third quarter increased by 14.3% to $7.0 million, driven by higher net gains on mortgage loans and risk management fees. For the nine months, non-interest income rose to $21.2 million, a 33.7% increase compared to the same period in 2023. The company recorded a significant increase in net gain on mortgage loans, which rose to $4.5 million for the nine months, up 85.3% year-over-year.

In terms of strategic developments, First Western recorded $37.0 million in Other Real Estate Owned (OREO) due to foreclosures, a significant increase from no OREO properties at the end of 2023. The allowance for credit losses decreased to $18.8 million from $23.9 million, reflecting a release of provision due to loan paydowns and sales.

The company’s capital ratios remained strong, with the Bank categorized as "well capitalized" under regulatory guidelines. As of September 30, 2024, the Bank's Tier 1 capital to risk-weighted assets was 11.39%, exceeding the required capital adequacy levels. The company also repurchased 5,501 shares under its 2024 Repurchase Plan, leaving 194,499 shares available for repurchase.