Exhibit 99.1
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
Three Months Ended | |||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands, except per share amounts) | 2023(1) | 2023 | 2022 | ||||||||||||||
Interest and dividend income: | |||||||||||||||||
Loans, including fees | $ | 35,625 | $ | 34,141 | $ | 30,349 | |||||||||||
Loans accounted for under the fair value option | 257 | 300 | 488 | ||||||||||||||
Investment securities | 600 | 607 | 645 | ||||||||||||||
Interest-bearing deposits in other financial institutions | 1,350 | 1,292 | 931 | ||||||||||||||
Dividends, restricted stock | 161 | 141 | 238 | ||||||||||||||
Total interest and dividend income | 37,993 | 36,481 | 32,651 | ||||||||||||||
Interest expense: | |||||||||||||||||
Deposits | 19,037 | 17,467 | 8,260 | ||||||||||||||
Other borrowed funds | 2,625 | 2,248 | 2,403 | ||||||||||||||
Total interest expense | 21,662 | 19,715 | 10,663 | ||||||||||||||
Net interest income | 16,331 | 16,766 | 21,988 | ||||||||||||||
Less: provision for credit losses(2) | 8,493 | 329 | 1,197 | ||||||||||||||
Net interest income, after provision for credit losses(2) | 7,838 | 16,437 | 20,791 | ||||||||||||||
Non-interest income: | |||||||||||||||||
Trust and investment management fees | 4,705 | 4,846 | 4,358 | ||||||||||||||
Net gain on mortgage loans | 379 | 654 | 629 | ||||||||||||||
Net loss on loans held for sale | — | — | (12) | ||||||||||||||
Bank fees | 412 | 427 | 812 | ||||||||||||||
Risk management and insurance fees | 544 | 145 | 924 | ||||||||||||||
Income on company-owned life insurance | 101 | 96 | 88 | ||||||||||||||
Net loss on loans accounted for under the fair value option | (91) | (252) | (602) | ||||||||||||||
Unrealized loss recognized on equity securities | (2) | (19) | — | ||||||||||||||
Other | 33 | 202 | 218 | ||||||||||||||
Total non-interest income | 6,081 | 6,099 | 6,415 | ||||||||||||||
Total income before non-interest expense | 13,919 | 22,536 | 27,206 | ||||||||||||||
Non-interest expense: | |||||||||||||||||
Salaries and employee benefits | 9,988 | 10,968 | 11,679 | ||||||||||||||
Occupancy and equipment | 1,937 | 1,807 | 1,910 | ||||||||||||||
Professional services | 1,990 | 1,867 | 2,027 | ||||||||||||||
Technology and information systems | 928 | 906 | 1,168 | ||||||||||||||
Data processing | 1,189 | 1,159 | 1,223 | ||||||||||||||
Marketing | 415 | 355 | 500 | ||||||||||||||
Amortization of other intangible assets | 62 | 62 | 77 | ||||||||||||||
Net gain on sale of other real estate owned | — | — | (3) | ||||||||||||||
Other | 1,767 | 1,190 | 1,324 | ||||||||||||||
Total non-interest expense | 18,276 | 18,314 | 19,905 | ||||||||||||||
(Loss)/income before income taxes | (4,357) | 4,222 | 7,301 | ||||||||||||||
Income tax (benefit)/expense | (1,138) | 1,104 | 1,830 | ||||||||||||||
Net (loss)/income available to common shareholders | $ | (3,219) | $ | 3,118 | $ | 5,471 | |||||||||||
(Loss)/earnings per common share: | |||||||||||||||||
Basic | $ | (0.34) | $ | 0.33 | $ | 0.58 | |||||||||||
Diluted | (0.34) | 0.32 | 0.56 |
(2)Provision for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP.
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands) | 2023(1) | 2023 | 2022 | ||||||||||||||
Assets | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Cash and due from banks | $ | 7,284 | $ | 6,439 | $ | 4,926 | |||||||||||
Interest-bearing deposits in other financial institutions | 247,158 | 265,045 | 191,586 | ||||||||||||||
Total cash and cash equivalents | 254,442 | 271,484 | 196,512 | ||||||||||||||
Held-to-maturity securities, at amortized cost (fair value of $66,617, $66,487 and $74,718, respectively), net of allowance for credit losses | 74,102 | 75,539 | 81,056 | ||||||||||||||
Correspondent bank stock, at cost | 7,155 | 11,305 | 7,110 | ||||||||||||||
Mortgage loans held for sale, at fair value | 7,254 | 12,105 | 8,839 | ||||||||||||||
Loans held for sale, at fair value | — | — | 1,965 | ||||||||||||||
Loans (includes $13,726, $15,464, and $23,321 measured at fair value, respectively) | 2,530,915 | 2,530,459 | 2,469,413 | ||||||||||||||
Allowance for credit losses(2) | (23,931) | (23,175) | (17,183) | ||||||||||||||
Loans, net | 2,506,984 | 2,507,284 | 2,452,230 | ||||||||||||||
Premises and equipment, net | 25,256 | 25,410 | 25,118 | ||||||||||||||
Accrued interest receivable | 11,428 | 11,633 | 10,445 | ||||||||||||||
Accounts receivable | 5,095 | 5,292 | 4,873 | ||||||||||||||
Other receivables | 4,467 | 3,052 | 1,973 | ||||||||||||||
Goodwill and other intangible assets, net | 31,854 | 31,916 | 32,104 | ||||||||||||||
Deferred tax assets, net | 6,407 | 6,624 | 6,914 | ||||||||||||||
Company-owned life insurance | 16,530 | 16,429 | 16,152 | ||||||||||||||
Other assets | 24,488 | 24,680 | 21,457 | ||||||||||||||
Total assets | $ | 2,975,462 | $ | 3,002,753 | $ | 2,866,748 | |||||||||||
Liabilities | |||||||||||||||||
Deposits: | |||||||||||||||||
Noninterest-bearing | $ | 482,579 | $ | 476,308 | $ | 583,092 | |||||||||||
Interest-bearing | 2,046,460 | 1,943,688 | 1,822,137 | ||||||||||||||
Total deposits | 2,529,039 | 2,419,996 | 2,405,229 | ||||||||||||||
Borrowings: | |||||||||||||||||
Federal Home Loan Bank and Federal Reserve borrowings | 125,711 | 259,930 | 146,886 | ||||||||||||||
Subordinated notes | 52,340 | 52,279 | 52,132 | ||||||||||||||
Accrued interest payable | 3,793 | 3,203 | 1,125 | ||||||||||||||
Other liabilities | 21,841 | 21,089 | 20,512 | ||||||||||||||
Total liabilities | 2,732,724 | 2,756,497 | 2,625,884 | ||||||||||||||
Shareholders’ Equity | |||||||||||||||||
Total shareholders’ equity | 242,738 | 246,256 | 240,864 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,975,462 | $ | 3,002,753 | $ | 2,866,748 |
(2) Allowance for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP.
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands) | 2023(1) | 2023 | 2022 | ||||||||||||||
Loan Portfolio | |||||||||||||||||
Cash, Securities, and Other(2) | $ | 140,053 | $ | 148,669 | $ | 165,670 | |||||||||||
Consumer and Other | 31,296 | 23,975 | 26,539 | ||||||||||||||
Construction and Development | 347,515 | 349,436 | 288,497 | ||||||||||||||
1-4 Family Residential | 925,984 | 913,085 | 898,154 | ||||||||||||||
Non-Owner Occupied CRE | 546,966 | 527,377 | 496,776 | ||||||||||||||
Owner Occupied CRE | 197,205 | 208,341 | 216,056 | ||||||||||||||
Commercial and Industrial | 336,842 | 349,515 | 361,028 | ||||||||||||||
Total | 2,525,861 | 2,520,398 | 2,452,720 | ||||||||||||||
Loans accounted for under the fair value option | 14,129 | 16,105 | 23,415 | ||||||||||||||
Total loans held for investment | 2,539,990 | 2,536,503 | 2,476,135 | ||||||||||||||
Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net(3) | (9,075) | (6,044) | (6,722) | ||||||||||||||
Loans (includes $13,726, $15,464, and $23,321 measured at fair value, respectively) | $ | 2,530,915 | $ | 2,530,459 | $ | 2,469,413 | |||||||||||
Mortgage loans held for sale | 7,254 | 12,105 | 8,839 | ||||||||||||||
Loans held for sale | — | — | 1,965 | ||||||||||||||
Deposit Portfolio | |||||||||||||||||
Money market deposit accounts | $ | 1,386,149 | $ | 1,388,726 | $ | 1,336,092 | |||||||||||
Time deposits | 496,452 | 373,459 | 224,090 | ||||||||||||||
Negotiable order of withdrawal accounts | 147,488 | 164,000 | 234,778 | ||||||||||||||
Savings accounts | 16,371 | 17,503 | 27,177 | ||||||||||||||
Total interest-bearing deposits | 2,046,460 | 1,943,688 | 1,822,137 | ||||||||||||||
Noninterest-bearing accounts | 482,579 | 476,308 | 583,092 | ||||||||||||||
Total deposits | $ | 2,529,039 | $ | 2,419,996 | $ | 2,405,229 |
____________________
(1) December 31, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
(2) Includes PPP loans of $4.3 million as of December 31, 2023, $4.9 million as of September 30, 2023, and $7.1 million as of December 31, 2022.
(3) Includes fair value adjustments on loans held for investment accounted for under the fair value option.
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
As of or for the Three Months Ended | |||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands) | 2023(1) | 2023 | 2022 | ||||||||||||||
Average Balance Sheets | |||||||||||||||||
Assets | |||||||||||||||||
Interest-earning assets: | |||||||||||||||||
Interest-bearing deposits in other financial institutions | $ | 104,789 | $ | 102,510 | $ | 103,190 | |||||||||||
Federal funds sold | — | — | — | ||||||||||||||
Investment securities | 76,331 | 78,057 | 84,017 | ||||||||||||||
Correspondent bank stock | 7,576 | 7,162 | 11,880 | ||||||||||||||
Loans | 2,536,287 | 2,502,419 | 2,436,273 | ||||||||||||||
Interest-earning assets | 2,724,983 | 2,690,148 | 2,635,360 | ||||||||||||||
Mortgage loans held for sale | 9,915 | 12,680 | 9,065 | ||||||||||||||
Total interest-earning assets, plus mortgage loans held for sale | 2,734,898 | 2,702,828 | 2,644,425 | ||||||||||||||
Allowance for credit losses(2) | (23,308) | (22,122) | (16,724) | ||||||||||||||
Noninterest-earning assets | 126,132 | 125,774 | 125,355 | ||||||||||||||
Total assets | $ | 2,837,722 | $ | 2,806,480 | $ | 2,753,056 | |||||||||||
Liabilities and Shareholders’ Equity | |||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||
Interest-bearing deposits | $ | 1,914,856 | $ | 1,846,318 | $ | 1,582,587 | |||||||||||
FHLB and Federal Reserve borrowings | 139,316 | 125,250 | 212,693 | ||||||||||||||
Subordinated notes | 52,299 | 52,242 | 38,335 | ||||||||||||||
Total interest-bearing liabilities | 2,106,471 | 2,023,810 | 1,833,615 | ||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||
Noninterest-bearing deposits | 456,787 | 512,956 | 659,076 | ||||||||||||||
Other liabilities | 25,387 | 24,228 | 21,660 | ||||||||||||||
Total noninterest-bearing liabilities | 482,174 | 537,184 | 680,736 | ||||||||||||||
Total shareholders’ equity | 249,077 | 245,486 | 238,705 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,837,722 | $ | 2,806,480 | $ | 2,753,056 | |||||||||||
Yields/Cost of funds (annualized) | |||||||||||||||||
Interest-bearing deposits in other financial institutions | 5.11 | % | 5.00 | % | 3.57 | % | |||||||||||
Investment securities | 3.12 | 3.09 | 3.05 | ||||||||||||||
Correspondent bank stock | 8.43 | 7.81 | 7.95 | ||||||||||||||
Loans | 5.59 | 5.43 | 5.00 | ||||||||||||||
Mortgage loans held for sale | 6.60 | 6.70 | 6.39 | ||||||||||||||
Total interest-earning assets | 5.51 | 5.35 | 4.90 | ||||||||||||||
Interest-bearing deposits | 3.94 | 3.75 | 2.07 | ||||||||||||||
Cost of deposits | 3.18 | 2.94 | 1.46 | ||||||||||||||
FHLB and Federal Reserve borrowings | 5.36 | 4.58 | 3.58 | ||||||||||||||
Subordinated notes | 5.63 | 6.08 | 5.03 | ||||||||||||||
Total interest-bearing liabilities | 4.08 | 3.86 | 2.31 | ||||||||||||||
Net interest margin | 2.37 | 2.46 | 3.30 | ||||||||||||||
Net interest rate spread | 1.43 | 1.49 | 2.59 |
(1) December 31, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
(2) Allowance for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP.
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
As of or for the Three Months Ended | |||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands, except share and per share amounts) | 2023(1) | 2023 | 2022 | ||||||||||||||
Asset Quality | |||||||||||||||||
Non-performing loans | $ | 51,125 | $ | 56,146 | $ | 12,349 | |||||||||||
Non-performing assets | 51,125 | 56,146 | 12,349 | ||||||||||||||
Net charge-offs | 8,595 | 190 | 95 | ||||||||||||||
Non-performing loans to total loans | 2.01 | % | 2.21 | % | 0.50 | % | |||||||||||
Non-performing assets to total assets | 1.72 | 1.87 | 0.43 | ||||||||||||||
Allowance for credit losses to non-performing loans(4) | 46.81 | 41.28 | 139.14 | ||||||||||||||
Allowance for credit losses to total loans(4) | 0.95 | 0.92 | 0.70 | ||||||||||||||
Allowance for credit losses to adjusted loans(2)(4) | 0.95 | 0.92 | 0.78 | ||||||||||||||
Net charge-offs to average loans(3) | 0.34 | 0.01 | * | ||||||||||||||
Assets Under Management | $ | 6,752,981 | $ | 6,395,786 | $ | 6,106,973 | |||||||||||
Market Data | |||||||||||||||||
Book value per share at period end | 25.33 | 25.76 | 25.37 | ||||||||||||||
Tangible book value per common share(2) | 22.01 | 22.42 | 21.99 | ||||||||||||||
Weighted average outstanding shares, basic | 9,572,582 | 9,553,331 | 9,493,732 | ||||||||||||||
Weighted average outstanding shares, diluted | 9,572,582 | 9,743,270 | 9,702,908 | ||||||||||||||
Shares outstanding at period end | 9,581,183 | 9,560,209 | 9,495,440 | ||||||||||||||
Consolidated Capital | |||||||||||||||||
Tier 1 capital to risk-weighted assets | 9.40 | % | 9.32 | % | 9.28 | % | |||||||||||
CET1 to risk-weighted assets | 9.40 | 9.32 | 9.28 | ||||||||||||||
Total capital to risk-weighted assets | 12.59 | 12.45 | 12.37 | ||||||||||||||
Tier 1 capital to average assets | 7.77 | 7.96 | 7.81 | ||||||||||||||
Bank Capital | |||||||||||||||||
Tier 1 capital to risk-weighted assets | 10.54 | 10.42 | 10.29 | ||||||||||||||
CET1 to risk-weighted assets | 10.54 | 10.42 | 10.29 | ||||||||||||||
Total capital to risk-weighted assets | 11.45 | 11.31 | 11.06 | ||||||||||||||
Tier 1 capital to average assets | 8.71 | 8.88 | 8.65 |
____________________
(1) December 31, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
(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.
(3) Value results in an immaterial amount.
(4) Allowance for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP. Total loans does not include loans accounted for under the fair value option.
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
Reconciliations of Non-GAAP Financial Measures
As of or for the Three Months Ended | |||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands, except share and per share amounts) | 2023(1) | 2023 | 2022 | ||||||||||||||
Tangible Common | |||||||||||||||||
Total shareholders' equity | $ | 242,738 | $ | 246,256 | $ | 240,864 | |||||||||||
Less: goodwill and other intangibles, net | 31,854 | 31,916 | 32,104 | ||||||||||||||
Tangible common equity | $ | 210,884 | $ | 214,340 | $ | 208,760 | |||||||||||
Common shares outstanding, end of period | 9,581,183 | 9,560,209 | 9,495,440 | ||||||||||||||
Tangible common book value per share | $ | 22.01 | $ | 22.42 | $ | 21.99 | |||||||||||
Net (loss)/income available to common shareholders | (3,219) | 3,118 | 5,471 | ||||||||||||||
Return on tangible common equity (annualized) | (6.11) | % | 5.82 | % | 10.48 | % | |||||||||||
Efficiency | |||||||||||||||||
Non-interest expense | $ | 18,276 | $ | 18,314 | $ | 19,905 | |||||||||||
Less: amortization | 62 | 62 | 77 | ||||||||||||||
Less: acquisition related expenses | 36 | 30 | 195 | ||||||||||||||
Adjusted non-interest expense | $ | 18,178 | $ | 18,222 | $ | 19,633 | |||||||||||
Total income before non-interest expense | $ | 13,919 | $ | 22,536 | $ | 27,206 | |||||||||||
Less: unrealized loss recognized on equity securities | (2) | (19) | — | ||||||||||||||
Less: net loss on loans accounted for under the fair value option | (91) | (252) | (602) | ||||||||||||||
Less: net loss on loans held for sale at fair value | — | — | (12) | ||||||||||||||
Plus: provision for credit losses(2) | 8,493 | 329 | 1,197 | ||||||||||||||
Gross revenue | $ | 22,505 | $ | 23,136 | $ | 29,017 | |||||||||||
Efficiency ratio | 80.77 | % | 78.76 | % | 67.66 | % | |||||||||||
Allowance for Credit Loss to Adjusted Loans | |||||||||||||||||
Total loans held for investment | 2,539,990 | 2,536,503 | 2,476,135 | ||||||||||||||
Less: loans acquired(3) | — | — | 234,717 | ||||||||||||||
Less: PPP loans(4) | 4,343 | 4,876 | 6,378 | ||||||||||||||
Less: loans accounted for under fair value | 14,129 | 16,105 | 23,415 | ||||||||||||||
Adjusted loans | $ | 2,521,518 | $ | 2,515,522 | $ | 2,211,625 | |||||||||||
Allowance for credit losses(2) | $ | 23,931 | $ | 23,175 | $ | 17,183 | |||||||||||
Allowance for credit losses to adjusted loans(2) | 0.95 | % | 0.92 | % | 0.78 | % |
(1) December 31, 2023 amounts include the impact of the revision previously mentioned in this earnings release.
(2) Provision and allowance for credit loss amounts for periods prior to the ASC 326 adoption date of January 1, 2023 are reported in accordance with previously applicable GAAP.
(3)As of December 31, 2023 and September 30, 2023, acquired loans totaling $212.3 million and $216.1 million, respectively, are included in the allowance for credit loss calculation and are therefore not removed in calculating adjusted total loans.
(4)As of December 31, 2023 and September 30, 2023, the adjustment for PPP loans includes acquired PPP loans as acquired loans are included in total loans held for investment as a result of the adoption of ASC 326. As of December 31, 2022, the adjustment for PPP loans did not include acquired PPP loans, as those were already included in the loans acquired adjustment.
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
As of or for the Three Months Ended | |||||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||||
(Dollars in thousands, except share and per share data) | 2023(1) | 2023 | 2022 | ||||||||||||||
Adjusted Net (Loss)/Income Available to Common Shareholders | |||||||||||||||||
Net (loss)/income available to common shareholders | $ | (3,219) | $ | 3,118 | $ | 5,471 | |||||||||||
Plus: acquisition related expenses | 36 | 30 | 195 | ||||||||||||||
Less: income tax impact from acquisition related expenses | 9 | 8 | 49 | ||||||||||||||
Adjusted net (loss)/income available to shareholders | $ | (3,192) | $ | 3,140 | $ | 5,617 | |||||||||||
Pre-Tax, Pre-Provision Net Income | |||||||||||||||||
(Loss)/income before income taxes | $ | (4,357) | $ | 4,222 | $ | 7,301 | |||||||||||
Plus: provision for credit losses | 8,493 | 329 | 1,197 | ||||||||||||||
Pre-tax, pre-provision net income | $ | 4,136 | $ | 4,551 | $ | 8,498 | |||||||||||
Adjusted Basic (Loss)/Earnings Per Share | |||||||||||||||||
Basic (loss)/earnings per share | $ | (0.34) | $ | 0.33 | $ | 0.58 | |||||||||||
Plus: acquisition related expenses net of income tax impact | * | * | 0.01 | ||||||||||||||
Adjusted basic (loss)/earnings per share | $ | (0.34) | $ | 0.33 | $ | 0.59 | |||||||||||
Adjusted Diluted (Loss)/Earnings Per Share | |||||||||||||||||
Diluted (loss)/earnings per share | $ | (0.34) | $ | 0.32 | $ | 0.56 | |||||||||||
Plus: acquisition related expenses net of income tax impact | * | * | 0.02 | ||||||||||||||
Adjusted diluted (loss)/earnings per share | $ | (0.34) | $ | 0.32 | $ | 0.58 | |||||||||||
Adjusted Return on Average Assets (annualized) | |||||||||||||||||
Return on average assets | (0.45) | % | 0.44 | % | 0.79 | % | |||||||||||
Plus: acquisition related expenses net of income tax impact | * | 0.01 | 0.03 | ||||||||||||||
Adjusted return on average assets | (0.46) | % | 0.45 | % | 0.82 | % | |||||||||||
Adjusted Return on Average Shareholders' Equity (annualized) | |||||||||||||||||
Return on average shareholders' equity | (5.17) | % | 5.08 | % | 9.17 | % | |||||||||||
Plus: acquisition related expenses net of income tax impact | 0.04 | 0.04 | 0.24 | ||||||||||||||
Adjusted return on average shareholders' equity | (5.12) | % | 5.12 | % | 9.41 | % | |||||||||||
Adjusted Return on Tangible Common Equity (annualized) | |||||||||||||||||
Return on tangible common equity | (6.11) | % | 5.82 | % | 10.48 | % | |||||||||||
Plus: acquisition related expenses net of income tax impact | 0.06 | 0.04 | 0.28 | ||||||||||||||
Adjusted return on tangible common equity | (6.05) | % | 5.86 | % | 10.76 | % |
* Represents an immaterial impact to adjusted earnings per share.