MYFW - Earnings call transcript Q4 2021 | First Western Financial, Inc.

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Operator

Thank you for standing by and welcome to the First Western Financial Q4 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions].

As a reminder, today's conference call is being recorded. to call like host, to now Mr. would turn over the your I Financial Rossi Profile. Tony of may you Sir begin.

Tony Rossi

Financials, Earnings Valerie. thank us Western you you, for quarter Thank Good joining today morning, for Call. everyone and fourth XXXX First

Joining Chairman Julie Chief Wylie, are and First us Financial Executive Officer. Western from Chief team Scott management Courkamp, Officer.

slide a use of will as part our discussion We presentation this morning.

First the download done the events page of If a visit and to website of please you Westerns so have Relations already, presentation. not copy Investor presentations

begin, you the we remind of or be results update materially that and are factors would are on statements. statements cause Before disclaims the of involves like implied company's filings, to presentation. I any you any impact COVID-XX in The and from discussed made statements company investor forward-looking different condition in direct read the that the this to could forward-looking by I forward-looking which actual expressed contains call. company's pandemic. SEC risks results with our earnings the available conference including factors future and to obligation first financial These financial to website. during call Western release Financial respect any the disclaimers uncertainties to such performance Various the also

like financial the call measures, Scott. I'd With be the the reconciliation Additionally, measures. contains as The GAAP comparable non-GAAP are GAAP to discussed management available not Scott. over intended the turn today, to refer to measures. the to website most directly which quantitative substitute well press may other non-GAAP to for of the information that, as supplement but on and release to

Scott Wylie

morning good everybody. and Tony, Thanks,

the communicated year of capped of the Our XXXX. in delivering strong time fourth-quarter vision another we in our IPO at performance

bit a the As for today. numbers you will noise quite in saw in QX, reported what it's we of unpack we

of on over organic by annualized commercial development risk growth, production, of operating driven and growth contribution striking Since we've in an while has growth between the on more vision The By acquisitions. through expansion, for balance organic improve sheet generated of has built successfully realize XX% created in new to criteria we've our XXX% per loan we Western share continued growth impact new us loans our banking XXXX. exceptional scale the strong in we and XX% we PPP XXXX bankers while a It's of by last leverage company the than and exceptional of by platform those another offices new two in in testament tangible of ended business mid-XXXX, able strict a We management, increase quarter profitability quality clients we've to growth as value the added. just years. And book had lending of strong underwriting credit our being with combination record deposits. offer, our success for executing that basis value with quarter accretive resulted First increased in growing QX. to more exceptional and A continue balance loans, shareholders. we've despite our We the excluding that the with pristine IPO our level funding that generate that opportunities maintaining the the adding value high-quality pandemic. pricing very that meet with low-cost a and present proposition

Well, level deposit since highest annualized. was growth strong Our coming organic XX% at also public.

book transaction will value over the with of acquisition estimated to tangible time organic At just points to completion the declining net under year. period exceptional that slightly our XX assets growth Complementing transaction. announcement, the Our another charge-offs. with we of asset assets earn-back with five the quality half of basis months non-performing quarter in Services, an of of total the strong just an Financial diluted immaterial of after remains Tieton amount a was the announcing be

earnings is a further Hole deal and As attractive the transaction Moving of prior from accretive primarily the impacted core consolidation improve earnings the tangible book conversion seasonal to trusted result including integrated. at price and May integration acquisition-related the slowdown, excluding already a systems were lower this four, that the we proceeding banking year. those given of mortgage for said quarter which level the mortgage value, lower announced this of quarter, a to stock pre-tax slightly of that end locations economics is costs, the deal. been higher The due system see expenses, to slide were expenses, Jackson of schedule, the have activity smoothly by down We

a to QX provision saw in impacting as further reported due QX also loan We results. higher growth

services However, continue and by the book accretive transaction. driven share per performance strong our the we book value to increases Financial impact of in see value tangible and Tieton financial

intended so we our Turning increased earnings segment. the generated of banking, more commercial sustainable fee year-over-year its business mortgage the After segment. earnings investment billing basis, of the this management to complementary of represented XX% role look growth a This speak, of that businesses earnings in On XXXX, outsized pre-tax at trust wealth private we're to our our and in source we'll as our the our earnings management in X, seeing in source performance with -tax businesses. by business mortgage Slide is banking, pre a to income. other returns earnings while GAAP, a

includes adjustments. adjustments additional at expected. Slide period This to our contributed could but trends particularly nothing purchase There is as material small acquisition portfolio. we amount to Turning balances. accounting our X, be the The million preliminary Teton finalized they are some in look our loan end $XXX

the prior higher expected the quarter. had than now, stands record strongest this growth portfolio strong offset $XX.X came in the On environment. XX% than of a the we $XXX basis, demand growth, organic loan resulted the it million what million more in were The As payoffs in quarter than portfolio. lower loan Loan current marks our which production also quarter most million, an runoff the which -- across was prior real the where and in deal commercial estate net organic increases announced. our we are growth and $XXX loan had when at production level was there's higher initially more than but

be the capabilities most other whatever Over development at rate have growing given in and remain the asset enable our portfolio point longer but term, broad class us time. focused our provides on than we pursue at attractive C&I we a business faster opportunities any to the flexible to portfolios,

more banking clients for grew our securities management private our consecutive demand among the secured quarter, portfolio For second to cash also of investment credit. and lines other due

the this of level continued masked Although are that -- held in by is runoff of also portfolio. loans growth the PPP

Slide to a deposit we'll closer Moving at look X, our trends. take

business Our is coming $XXX year. of million some of increased proceeds million as successful to The resulted distributor than through liquidity our fourth last expected end the in quarter. the was more saw existing deposit opened million through the our million the of mentioned off total entirety being deposits temporary Tieton not It that remained during at efforts this $XX million $XXX But run outflows our million in in acquisition early the $XX and organic as development in we prior its quarter, fourth $XX deposit expected. offset deposit from new this by real new from among call quarter. end did $XXX clients partners the our with the that the run-off growth. estate in the fund. year accounts quarter the on we This fourth event,

growth $XXX This have in the building $XXX the loans Commercial million from prior of commercial growing represents which commercial Moving improving deposit year platform, commercial prior in to Slide is we the and the progress $XX million base the is our our the over adding X. from Commercial commercial quarter deposits. at by transaction year. XX% prior diversification more quarter client momentum and our low-cost deposits increased increased loan XX% $XXX from our loan prior We'll providing reflective growth year. million look million strong from deposit and and base. prior banking and

to year. to end $X.X assets market from management combination well Turning increase Financial and due as a Teton to management under in investment XX.X% increased accounts, assets and accounts improving last was of or conditions the on the Slide existing acquisition, contributions value an trust increase X, closing total our This as of under of resulting on the management. billion new in

under of our for With management. for the financial quarter, the assets During to that, of approximately our growth results. new turn I'll call $XX Julie. Julie discussion fourth further in over clients million accounted

Julie Courkamp

metrics our Thanks Slide how provided participation fourth and quarter. XX, update PPP program have it an in Scott. on various we in the On impacted the

end recognized quarter. million during XXst. of had approximately PPP loans remains PPP decline $XX.X impact to six As our net sheet, of on XXX,XXX in at of quarter. XXst, is the $XX.X by our we acquired Offset We had December and first the quarter margin point which the December of million $X.X interest the a million fees fees PPP in basis $XXX,XXX prior had on positive recognized be remaining a in and balance fourth loans. from

from the As our to At million. loan December the forgiven, facility are fund our down that borrowings liquidity also borrowings were loans used originations from the to the XXst, facility declined. PPP $XX.X were

revenue. we'll XX, Slide gross to Turning look at our

net gain from the due on primarily loans. prior Our lower total gross X.X% mortgage revenue a quarter, to decreased

the areas. we increases exception non-interest had net gains, generating With most in our of these income of

at net interest margin. XX, to trends the look we Turning in and Slide income

from prior from recoveries on quarter, declined existing accretion and a When purchased X.X% portfolio. net primarily net yield in all X.X% basis than decline books interest production coming income both at PPP the loans. on in Our points to these lower to margin to the level due two the due our rates A from a recognized. interest excluded periods, quarter, primarily the interest new income loan average decreased on lower prior are decline of the

we acquisition, The assets a margin on loan excess With we this from acquired resulting balance with a forward. funds our we see the going temporary Tieton in of the cost basis. net interest our yields higher higher-yielding our more X.XX%. should of put sheet should and liquidity of points successful work of basis positive added close benefit strong to from XX of production, lower But loan liquidity as to impact

the an other from in non-interest decline as to net income, prior gain X.X% areas gain interest. This was decreased quarter Slide increases in income Our of well equity the loans. as offset by net $XXX,XXX XX, to on partially approximate due mortgage non-interest Turning most on

Trust We detail our on steady Investment mortgage XX, continue Fees, the growth for X.X% we On in fourth some XXXX. higher operations. quarter Management to additional than Slide and of our provided see which have

volumes, quarter. refinancing of of the prior quarter The and in in mortgage purchase Our to volume XX% our production for the move locks period a the from of both markets. production purchases accounting towards the range by mix fourth continues declined historical seasonally slow XX% to due back drop with for

As XXXX. seeing relative to group on QX, our last indicated level our we we to QX mortgage are of in expenses we volumes now of fixed our mortgage segment and that lower reflect the the call, were the XXXX, reduced fixed XX%. reduced XXXX expenses to From by

our and XX Slide expenses. to Turning

expense benefits by from and lines. to and prior acquisition-related data processing employee non-interest in due the higher Our increased recorded were professional expenses quarter, XX.X% services, our which primarily salaries

increased accruals Excluding ratio adjusted to acquisition-related basis strong loan deposit higher bonus from to due in excluding XX.X% increased expense and an our the to On XX.X% acquisition-related expenses, our expenses, production. prior non-interest quarter. efficiency related

acquisition while Tieton, efficiency the our expense ahead, to ratio return to the will of levels Looking increase due should our overall mid-XX.

combined of continue the from realize opportunities look operations. cost to additional We our remainder savings for to

be the to that expired acquisition our will Denver one into result waited office in Tree which a do consolidation, cost an until of During we we was Lone the added the consolidating first and Simmons nearby amount the will offices. office of in Lone small was our quarter, Tree savings. Bank lease

of rate, be million. half to first non-interest the $XX to in $XX the expense, of XXXX, range we Over quarterly run million operating expect our

at Turning XX, look quality. we'll to asset our Slide

across trends positive portfolio. We continue see the to

XX points points points assets a at prior see end the basis minimal Our of We we loan in And recorded declined non-performing of for losses brought to related of $XXX,XXX provision assets basis the and excludes which approximately at loans ALLL to This in loans of the which basis the adjusted losses XX PPP the loans. total is growth end total acquired our of quarter. continue from the XX to portfolio. total quarter. to

Now back to I Scott. Scott? will over turn the call

Scott Wylie

you, Thank Julie.

about Slide up some for to I'll Turning strategies. XX, Three and wrap with XXXX. our comments priorities outlook

step This was arise filed place in point procedural should we just And though, it's shelf earlier this have Before future. do that we this the always mention I some our like to something a to I at a do would month. in the to mix IPO. following planned need

turn basis will liquidity, deliver financial from sheet lower-cost services the another growth With very loan strong and adjusted the of Tieton from to EPS to XXXX. accretive in impact I and two we're Now with NIM well-positioned resulting We organic acquisition. excess balance points rising NIM believe in only the it of both improve growth year acquired and should down rates, our Tieton. deposits higher-yielding growth, reducing addition XXXX loans the and QX,

to recent Bozeman, the our team build a should made to continue make mid-teens add in existing very to our we and we larger from few the contribution opened the and built, as make believe we with And team growth And of as that the profit and the these year to healthy clients in generate larger in growth XXXX. offices team Our banking in up markets loan past year. a years loan this platform increasing start mature contributions. the Arizona, our pipeline commercial we new new production -- our another we'll continue of scale strength investments remains Montana centers help strong

growth, we that a making to key so always clients. the no While strong of all ensure we'll the from a seamless there's be provide and taken we continue disruption conservative the acquisitions, sure integration to the organic our the transition, generate synergies that approach on acquisition. personnel Tieton focused fully We've retain we realizing to also

And with acquisition, been respect this Tieton the far, successful regard. we've so to in

we earlier, and we the any the indicated to core of the though area. consolidation start once model impact number this brand's in we system and merger. the cost opportunities a didn't have the creative As complete synergies, we May, in a banking conversion And we'll of revenue are majority saves of believe see

new attractive for driving Our talent will we banking continue expansion value our to will and formula growth organic in investment where proposition include well-received. believe in be markets

up a offices new new private We target have demographics good and -- within markets a offices opening our have opportunities and footprint that a existing two our at commercial match the and looking states are with year one both that banking or services. we're for

technology in investing so fintech and our in of our With the scale increased we to the we in improving new investing determine which talent that while that this includes leverage. Teton have that realizing the better we ability in FinTech innovations space on operating strategy continue acquisition, have Part applications insight and firms the help the year have will inform map technology new or well-positioned road year, a consolidating into no areas And from on these two our investment single, believe banking efficiencies management we improved from with along perspective, trust business longer capabilities that we're systems. of separate From running the rates. to digital later sheet balance rising provide benefit a platform more and systems robust platform. we to we're want incorporate will our this additional features into technology

of bank years been rates, the not commercial variable-rate higher and bets the way asset to over sensitive. has of we with from always more mix policy have direction just it's on the become past make the more interest non-interest-bearing a several our evolved Although deposits, loans

With in deposit our the improvement base.

our growth year, remain growth, to the be In another net opportunities margin mix some we to We have our we'll of catalyst enable in with to when executing mix program. deposit all see the other development closed active M&A our as see for for improve which evaluating to continue can we acquisition, M&A little team shareholders. Tieton increase. Teton in the well-positioned will XXXX, and of opportunities, value of assets organization, execute believe in up productivity the and started Even from and see conditions we with level beta economic the rate liquidity, base interest our also and on We're improved on and high of improved returns. our additional of we've closing, been expect good any are impact asset low strong deposit well year. should the loan that strong. positive In move have first And we earnings transactions markets earning our and increasingly no hikes. integration business we beta couple continues our as to or expansion areas franchise earning long-term to in through merger, strengthen our this create We'll we're us

to We new on and strategic opening have our new should value interest And entering markets, good well-positioned expanding we're executing tangible continue value growing market all offices, rising opportunities our current growth. franchise additional rates. support Increasing transactions. book and shares benefit cap outstanding shareholder by to from offices,

As and that, in open of call. our your our ability we're to enhancing in confident come. to to questions, happy With and franchise the XXXX very in growth a very profitable years we're continue to the result, take generating the value pleased up

Operator

Again, Instructions]. Thank Instructions]. you. Again and One ladies moment gentlemen, please. [Operator [Operator

Our comes Group. of first Rabatin from question Brett Hovde

open. line Your is

Brett Rabatin

everyone. Hey, good morning

Scott Wylie

Brett. Morning

Brett Rabatin

talk $XX any many understood expense that Wanted but don't can that comment are number And with make want on first out. million the sure about million, the the there then year, to for Is I to how transpiring the inflationary year. that And pressures having, $XX throughout I level you the -- could million if that flattens the $XX that's ask, know first transpires the you throughout to the is give guidance $XX million? of on I expense quarter. the guidance, to maybe assume savings --

Julie Courkamp

good can take I that, and morning. Brett, Sure.

any to through a expenses So coming acquisition-related line that you give that would be our to are base tried operating. that additional are We've exclude number.

systems, level our happen will then quarter some benefit in a we part expect a of see, to the acquisition. little May, first in we or the bit more end come with the reduction from Overall, at in down saw and the consolidation of of May. first expense it would bit out. the We However, should more slightly

still However, investing throughout this year and as in part our of offices in business the new we are plan. of rest the

So a are but we little as the business well. actively into dip still building you'll on I quarter of that bit see to going a third the think be planning working

Brett Rabatin

in And I a quarter can thinking X.X% us, Can disclosure was how environment. the XXX-up talk -- you know about That's give you your maybe then margin, for like Okay. helpful. of just much last portfolio reprices be the of days portfolio how in floors? variable XX how Fed first is be might the much maybe hike? loan might -- much And rate? the below And a

Scott Wylie

Julie, numbers. I think you those have

Julie Courkamp

about Just is -- variable our XX% of rate, those those floors. their and portfolio loans, so XX% rate variable of are about below

points impact So basis average into hikes. first-rate continue gets would hike from account, we that taking loan yields XX about additional The four you as increase basis all to see expect rate points. in larger the of

So bit And of we as rate floor, those mentioned, should improvement come costs. be deposit in as a we're expecting not couple seeing of more off variable our of changes Scott significant loans from hikes, the for rate quite as their there. then first

So take you into account can that

Brett Rabatin

then would one last and in-market here talked engaged do you situations? or active, you still about new some M&A maybe from it conversations. Scott, for be potentially M&A. on more think, it And sounds type just Would be you remaining maybe one markets, in like you're

Scott Wylie

are those, those done market, of out a some given a folks we with list at are conversations adjacent. would of of make we have make look active them have that and and combinations some we've historically. market of them None priorities, that are we in what we sense think sense While

approach the I think all way consistent with we they're this.

bought so. get know, you not these things As sold,

Brett Rabatin

True.

Scott Wylie

that appropriate to work great. don't find Solid the project and I a priority in XXXX water in organic And of in to organic typically, nice value, mean, if something good expansion and We this going know us don't into whether the you fits And some know can't going if we for think working right? each I can growth or that not. and it's acquisition and year, happen of the combination it. a that have But keep you a growth an we play It's all on you it's would lot lines other. see anyways. acquisition really

Brett Rabatin

Appreciate great. Okay, the color.

Operator

to Again, gentlemen, you. Instructions]. Operator ask ladies to Thank and a like question,

Our next line question comes from open. Teton Bill your is Dezellem Capital. of

Bill Dezellem

Good morning.

of you And mortgage side mortgage business. thinking 'XX? the in with are the originations versus how start 'XX Let's about

Scott Wylie

focus answer Bill, the not Think reminding we would big is this us. start for by everybody that there, a growth as

profitability the business it's into there. to XXXX, in strategic have for business to And us. expect headwinds Given a we room to that continue big that we the continue profitable improve

As in actually we have improving margins seen, XXXX.

in what of not from The come have more expecting up. demand, to certainly lot activity There's we're as we not should is season of anticipating Certainly supply healthy. standpoint. go market was the of helpful in opportunities markets a a supply. purchase maybe lot spring much sooner we're back be a see going that So than that seeing. production rates in new I But here in [Indiscernible] we're to some supply.

the production starting us are better looking We to improve help directly to Overall, profitability probably XXXX and to agencies now originate execution continue margins. improve at and we us get similar will our continue but the of to which we're volumes down sell XX% a due to by since also would in you revenues out just gross and mortgage to our XXXX. something deck business. see of in non-mortgage the percent are like revenues point can growth, strong this as that numbers our the I

year the that replace one big great we wanted think we've time. done of the XXXX, gone in had mortgages, and to with XXXX I out that and we said challenges for we So in business [Indiscernible]

Bill Dezellem

Excellent.

So summarize if I'm sure make to I may here. grasping just fully

just above origination but are be higher, is your your total be expense will volume, you've the of anticipating You management profitability that you that that also been correct? that are 'XX's because believing doing, volume will

Scott Wylie

year-over-year, going flat it's safe assume to be assumption. you that's a if think I

Bill Dezellem

because I terms be that country residences levels the That's around thinking are of activity far? in markets or are stronger -- of are this, the your that ask me sale let markets, to am stretching in places too going fair. activity destination than many of And other is you

Scott Wylie

Yes.

kind mortgage the you're that to percentage in in we true what mortgage would seasonality don't our volumes. resort small markets, That's and us in to Aspen, getting would you be a this, be today benefit develop of to in keep very ongoing if what it's referring in we business. front complement to business are of Jackson, hope of I have of Colorado. to, a mortgage the range we in Colorado continue great and that's [Indiscernible]. And are I both Arizona The there. to I mean, hate have will our of wave but front which seasonality also, where saying majority terms nice of be think that I in able And terms a big this for purchase down in offsetting our natural here originations

Bill Dezellem

that And related made remarks did you business? in market the parts opening hear were of in or the mortgages those other and Phoenix we if have so, hires your

Scott Wylie

We've months six building team a in so been there. past now, or stronger the on focused, banking core

the think And much significant that we'd of be share hires market us. for Range, so in what come have in Phoenix a Front that to made we area there XXXX, MSA had an we we are here today. we in the and bank that's we've some opportunity larger more with same than If actually the

that XXXX. continue I to there's opportunity would of and lot there into area see is we have been an that we a So and investing think expect

Bill Dezellem

question a then a you. Great. Thank And point ignorance. of from

anticipated accretion there greater end aspect anticipated, that being that any Teton mention now. the did of closed earlier earnings that than value up You in implies 'XX and the accretive that you will to Is acquisition or longer-term? even than it's book

Scott Wylie

announced synergies don't of make us cost and revenue for deal we I what that, did we the we summer, don't will did revenue today have we in saves. that we differently expectations limit. accretion. that announced today, all think think when know confident the we We be would legal anything then. So that there than of is And pretty know include terms And a economics that about there we not I'm lending higher in any synergies. some

First so this larger legacy have bank to a through then the on far that larger Western, do at the Mountain to associates we brought enables and So what loans us between cultural nice also that loans our is us then of for enables course, transaction, clients. fit really do found clients. we Rocky And

last to through Rocky here with setup bank Mountain folks ahead teams numbers to accretive transition excellent transition. hard our more capital say, really lot the is And mind there's and closed terrific as also banks team been more with toolkit. don't so cross-selling Worked normal to ready teams working that just has. bills and worked the the which XX if favorable than have call take larger out providing a Western to be schedule this of And working close, mean, you going I this you I since our just out summer of tools First toolkit, are our be for legacy December I on think a would the opportunities of which really have nice community for this. XXXX.

Bill Dezellem

and involved. all you thank Well, Great. to congratulations

Scott Wylie

you. Yeah. Thank

Operator

Thank you.

question from Our Capital. next comes Coral of Brad [Indiscernible]

Your open. line is

Unidentified Analyst

when looks at [Indiscernible] the Investment Trust broader like you. Great. the regarding the that about A up have me and of market. were Thank here. maybe I up XX%. you X% time was thinking for Can color? a some One Management your It appreciation in greater Yeah. given area questions a year couple strong Fees. was growth in just you'd give on that they

Scott Wylie

Sure.

management on assets or under $X.X is conservative concentrated today You in know what? so portfolios. billion

they a the XX-XX we We'll mix capture on so, gains whatever. typically. if don't And mix so to have or the track is S&P XX-XX try and track about market -- the an goal upside. or our And

an do portfolio. is You see just a S&P on lot NASDAQ less equity going than what to the or

the I slide or through announcement was It in grew in year. think year. that deck the last growth we of XX% the like the something --

the Western that there the there. manager you're in revenues that out XXXX. million year-over-year, like Management LA Capital we less fixed think looking door we that in little end call that we of at than ed I $X had a First If went sold something team remember And income based was a

have adjusted And so factor to you'd out. actual the year-over-year, that

Unidentified Analyst

ramp mortgage that went same are your with quarters million quarter. do for means fourth and that numbers that and originations. looking fourth $XXX started at increase this to a it that in at may quarter volumes, levels very in 'XX in those and reading looking -- down less the XX, fourth To you. banking Got taking the with be expectations you am And a steadily versus context volumes sale the the Is think XXXX, the originations substantial XXXX? for steep those correctly, due in quarter the in equal for from I trough million basically originations $XXX quarter you than it

Scott Wylie

Well, think is see of XX, in slide that's how number and I you page could certainly that more that there, direct to and good a history. a business. has lot I actually this of points in a the embedded it stuff directly. of seasonality mortgage question information of think understanding raise answer you helpful our if interplays, sort the lot I to your We

improved need in funnel mortgages and do corner similar is expenses. and there And to to the on you brought $X.X the quarter, margins our that. So cut volumes I corner, we down in day I doing based from year. rising expense, in what with did upper actually the fixed who a our can going as at the about comes and right? upper demand the right-hand book you, of we've our profitability. of think Page to you the if if range right-hand we've the million all produce volumes really chart next actually which off going on you the continue that's look in right-hand locks we corner. it's numbers volumes you just knows, we we volume, end build year, activity the the QX. What's in at think for lower But you us $XXX if our certainly at revenues our that see $XXX at meet you lock shows look can We if in don't -- the lower of first you and care to left-hand that to I in that Originations, right-hand mean, for million the we're tell the team locks plans achievable revenues see million, and MLO know but Originations. we corner and of and because at are to improved level $X not in to last instructive we margins, expenses. were expense this it so I here $X.X QX going to out is know, that, rates to end similar on supply lower and the think, in that in today, and the repeat look QX, happen need to year what dropping see as fixed QX are And much at be is XX, really And $X.X million we corner, the And have million the million, the

can we So drive profitability.

in think of can do volumes. I shrinking we we've that proven that spite

Unidentified Analyst

that XXXX like fourth the merger quarter probably to cost rate and may saves bit quarter of achieved. or And it. lastly better of on be Is assume And a saves it clean around third a XXX back it safe you're level? little or in and a seems to ROA that seems quarter there quarter. like cost second muddled charges. that the will Got a of here, XXXX All quarter it be first with maybe run and accounting know little have some been the most lot going I was

Scott Wylie

there's repeating are we extent small our so think on noise company very before of relatively we're a potentials, great think a the look can the into good positive we of mean, economies at markets. trends that way larger I lot I We're along said and great XXXX. our We're and seeing Sheet. growth all Balance that and That's little really quarter some question. trends, here, putting of bears numbers. I strong a much going beyond a bit I it growth seeing We're in the it opportunities. goes up

succeeding Western competitively. So seeing opportunity lots of First We're there.

And peers; XXXX know that a we're Balance to Sheet factor expensed and organic be small that's Teton that mean, not proven numbers remained be are successfully, how significant. to related the into are going relatively being I XXXX. that outperforming to expansion I are strong good to growth do think acquirers is we we've our our and very good going good with into opportunities. We

reasonable we mortgage to out seem us. consensus think Our that are profitability is estimates manageable. there The

QX in that 'XX. this for outlook that up is and think positive think a QX a we QX not combination mostly things the is that downturn we see showing This trend. So of I are and numbers through positive looking that,

Unidentified Analyst

Great. Appreciate Thank you. it.

Operator

Thank you.

Clark Piper Sandler. Matthew next question from Our of comes

is Your line open.

Matthew Clark

morning. Good Hi.

outlook that's sheet should the that since two you're excess here how to there and together quarter here the hit think And just likely? remix deal the liquidity Are the on along in the putting changes margin the NIM in the the closed? balance core making about upcoming want any given banks with Teton. near-term, comes we Just

Scott Wylie

your mentioned Well, XXX an points NIM right. in was operating down her only adjusted comments. to as basis is on Julie two question from basis XXX

it's to go a confusing. -- I XX you If think Slide little

slide, that if I might that through that other like walk could So I just on mortgage helpful. did be

the exclude short income environment. seeing at rates up got already trends, in $XXX coming interest pretty XXX we're up on -- look we're noise, and XXX, XXX. million and then If Chart embedded the us. Julie the actually we've QX, Teton And the is that That's shows recovery average XXX number and NIM good XXX million you accretion what you same do that's done your That's rate and on you rates in XXX. at then you've as go that's by referenced. is interest If you at some yields, question, thing to which same a to is $X the for There go QX, forward I another XXst coincidence and in then And X%, our number just adjusted XXX. on there looking QX. that printed rates then a books And rising you QX, number December XXX production new get better the but on the number. right? how are get know in originating PPP already in like And

two the interesting to years, our like through production last And come we of really see Another line then and thing, then loan the year. in of behind we've quarter, had that we'd out QX. trend a we're fourth strong weak kind really

so do don't that. let's this And we year said,

think and ended about year, on where closing building going pipeline same the into I the was it for QX. Let's And focus the actually the as we QX. pipeline,

so going we're see a nice to that we're And hopeful organic growth QX. in

a addition, for than which In flat if up you starting you're sets better want. obviously you year if

Julie Courkamp

liquidity that you is about pipeline excess have And talked ratio, if that of in books that that we pipeline you That about loan the we -- million margin on -- our liquidity cash. from at in liquidity in the to really that $XXX the could well. use to hoping as in look just see cash Scott improvement your question, argue to have growth

Scott Wylie

Yeah. Great Julie. point,

Matthew Clark

integrating. Great. yeah, that's around the size great. M&A, this the you. perspective geographic Thank you. have Thank your guys And then and thoughts terms -- deal Okay. of just in updated there earlier missed a gotten comments you I that margin. And your from of closed on now some appetite and then

Scott Wylie

development active program have that we continues. Well, an corporate do

year, more the you sense focused of kind bit. we're end projects so $X.X makes year, have billion normal the deals of we've focused acquisition, potential growth lines our of now in doing near we're I I getting at sights might we little or size At that the on three $X really experienced they than that before a lots raised the number We of of on. the if would And -- on. we're have high-priority have we this and probably we're raised and we working have water. broadened that tell our partners think a just billion

a mean, ago, not things minute these As I do I sold, said get bought.

the when for of that work mean, for but build sense sense. do from that terms under doesn't sellers strategic hope a standpoint us. we've any works to that I relationships time deals and we it makes -- also that at something so us the looked had make And for the we've number is a that pricing right

just think a And with Teton with folks, added recent with So things partnership that's we've add be look years new the to Julie? Certainly to last think ago. You something add these certainly true mortgage long value. the is did we three in going year. brands I there wanted you to -- I like deals history, getting home the were have you our It's Is purchase we another of did purchase a way there, to ready we done. true that doing run

Julie Courkamp

can that as offices Things hope couple deal, of to another a going and was control. working we we're on I Well, find add notwithstanding that, the can we incubation well.

today. office on working are space continuing have the we grow We that to

Matthew Clark

That's great. Thank you.

Operator

questions further Thank no at showing you. time. I'm this

Let over call closing any back remarks. for turn the me to management

Scott Wylie

lot look have good on prepared mean, we the all Well, think point But hit of quarter the a we the questions QX into in of you and that. I question noise trend I about this at there's do don't and nature main as really remarks. future. all think I asked the some that a the

we're in into of and the in it's means we're optimistic company's and a both terms nice ended think, I that year for XXXX, acquisition outlook, the organic starting year, a growth XXXX. about we've really where expansion new setup good the place

for everybody and you. participate thanks taking we the sure support. appreciate the and today listen Thank So time to

Operator

for gentlemen, all and conference. you this Ladies Thank you. today's Thank concludes participating.

You a may day. now Have great disconnect.

First Western Financial (MYFW) 28 Jan 222021 Q4 Earnings call transcript