On Friday, First Western Financial (NASDAQ:MYFW) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
First Western Financial reported a strong first quarter with notable improvements in loan and deposit growth, net interest margin expansion, and asset quality, leading to an 85% increase in EPS quarter over quarter.
The company maintained a disciplined approach to new loan production, with a focus on pricing criteria and expanding their banking team, resulting in diversified loan production and an average rate of 6.31% on new loans.
Total deposits increased by $95 million, with significant growth in non-interest-bearing deposits, bringing the loan-to-deposit ratio below 95.
Assets under management increased by $43 million due to new accounts and contributions, and the company’s trust and investment management fees rose by 5.3% from the previous year.
The company anticipates continued growth in 2026, leveraging market conditions and potential disruptions to expand client and talent acquisition, while maintaining a focus on deposit growth and operating leverage.
Management highlighted a focus on expanding in markets like Scottsdale, Arizona, and capitalizing on market disruptions in Colorado for talent acquisition.
First Western Financial continues to see opportunities for further net interest margin expansion, although not at the same pace as previous quarters, with a long-term goal of reaching a 3.15% to 3.20% margin.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the First Western Financial first quarter 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised to withdraw your question. Please press star 1-1 again. Please be advised that today’s conference is being recorded now. It’s my pleasure to hand the conference to Tony Rossi. Please proceed.
Tony Rossi
Thank you Carmen. Good morning everyone and thank you for joining us today for First Western Financial’s first quarter 2026 earnings call. Joining us from First Western’s management team are Scott Wiley, Chairman and Chief Executive Officer, Julie Corkamp, Chief Operating Officer and David Weber, Chief Financial Officer. We’ll use a slide presentation as part of our discussion this morning. If you have not done so already, please visit the events and Presentations page of First Western’s investor relations website to download a copy of the presentation. Before we begin, I’d like to remind you that this conference call contains forward looking statements with respect to the future performance and financial condition of First Western Financial that involve risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward looking statements. These factors are discussed in the Company’s SEC filings which are available on the company’s website. I would also direct you to read the disclaimers in our earnings release and investor presentation. The company disclaims any obligation to update any forward looking statements made during the call. Additionally, management may refer to non GAAP measures which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today as well as a reconciliation of the GAAP to non GAAP measures and with that I’d like to turn the call over to Scott.
Scott Wiley (Chairman and Chief Executive Officer)
Thanks Tony and good morning everybody. We executed well in the first quarter and saw positive trends in many areas including loan and deposit growth, net interest margin expansion, well managed expenses, higher mortgage banking revenues and improved asset quality. This resulted in another increase in our level of profitability with EPS up 85% quarter over quarter. We continued to maintain a conservative approach to our new loan production with our disciplined underwriting and pricing criteria. As a result of the additions we’ve made to our banking team over the past few years, as well as the generally healthy economic conditions in our markets, we had a Solid level of loan production which was diversified across our market industries and loan types. As a result of our financial performance and the balance sheet management strategies, we had a further increase in both book value and tangible book value per share. Moving to Slide 4, we generated net income of $6.2 million or $0.63 per diluted share in the first quarter which was higher than the prior quarter. This represented our third consecutive quarter where we generated an increase in net income and earnings per share with our prudent balance sheet management. Our tangible book value per share increased 3.3% for the quarter quarter over quarter. Now I’ll turn the call over to Julie for additional discussion of our balance sheet and trust investment management trends. Julie?
Julie Corkamp (Chief Operating Officer)
Thank you, Scott. Turning to Slide 5, we’ll look at the trends in our loan portfolio. Our loans held for investment increased 41 million from the end of the prior quarter. We continue to be conservative and highly selective in our new loan production, but with the higher level of productivity we are seeing from the additions to our banking team that we have made over the last several quarters, we are seeing a solid level of new loan production. New loan production was 116 million in the first quarter. That production was diversified across our portfolios and we are also getting deposit relationships with most of these new clients. We continue to be disciplined and are maintaining our pricing criteria. This resulted in the average rate on new production of 6.31% in the quarter. Moving to Slide 6, we’ll take a closer look at our deposit trends. Our total deposits increased 95 million from the end of the prior quarter with growth in all types of deposits. The increase was driven by both new deposit relationships and inflows from existing deposit accounts. Notably, non interest bearing deposits increased 10% or 35 million in the quarter. The deposit growth in the quarter brought our loan to deposit ratio down from 96.5 in the prior quarter and 96.4 from a year ago to below 95. Now turning to trust and investment management, Slide 7. We had a $43 million increase in our assets under management in the first quarter, primarily attributed to lower market values which were partially offset by the addition of new accounts. Net new accounts and contributions contributed a net increase of 42 million in the quarter. On a year over year basis, our assets under management increased by approximately 1%. As David will cover shortly. Our trust and investment management FEES have increased 5.3% from the second quarter of 2025 as we have restructured that team for growth. Now I’ll turn the call over to David for further discussion. Of our financial results.
David Weber (Chief Financial Officer)
David thank you Julie. Turning to slide 8, we’ll look at our gross revenue. Our GROSS Revenue increased 3.4% from the prior quarter due to increases in both net interest income and non interest income. Turning to slide nine, we’ll look at our trends in net interest income and margin. Our net interest income increased 1.5% from the prior quarter due to an increase in our net interest margin. Our NIM increased 10 basis points from the prior quarter to 2.81%. This was due to a reduction in our cost of funds which was primarily due to lower rates on money market deposit accounts as a result of the company reducing deposit rates commensurate with the short term rate decreases in 2025 and runoff of higher cost deposit accounts. Our net interest income increased 19.7% from the first quarter of 2025 due to an increase in net interest margin and an increase in average interest earning assets. Now turning to Slide 10, our non interest income increased by approximately 600,000 from the prior quarter. This was primarily due to increases in gain on sale of mortgage loans, risk management and insurance fees and trust and investment management fees which increased for the third consecutive quarter. Now turning to slide 11 and our expenses our non interest expense decreased by 1.1 million from the prior quarter. The decrease was due to an OREO (Other Real Estate Owned) write down in the fourth quarter of 2025 and a decrease in professional services partially offset by an increase in salaries and employee benefits due to payroll tax seasonality and an increase in bonus accruals as a result of the improved earnings in the quarter. Our efficiency ratio improved for the sixth consecutive quarter as we continue to tightly manage expenses while also making investments in the business that we believe will positively impact our long term performance. Now turning to slide 12, we’ll look at our asset quality. As Scott indicated earlier, we saw improved trends in the loan portfolio in the first quarter with decreases in non accrual loans and NPAs. This was partially driven by the sale of the last OREO (Other Real Estate Owned) property we had on the balance sheet. Additionally, we had no loan charge offs in the quarter. Our allowance coverage was 77 basis points of total loans as improved trends during the quarter drove a release of provision. Now I’ll turn it back to Scott.
Scott Wiley (Chairman and Chief Executive Officer)
Scott Thanks David. Turning to slide 13, I’ll wrap up with some comments about our outlook based on our first quarter performance and what we’re seeing in our markets. Our expectations for the year are unchanged from what we provided at the start of the year. Overall, we continue to see relatively healthy economic conditions in our markets, we’re seeing good opportunities to add both new clients and banking talent. Due to the ongoing disruption from M and A activity, particularly in the Colorado banking market, we’re also seeing. Well, we also recently added a new market president for Scottsdale, Arizona, where we see good opportunities for growth. Our loan and deposit pipelines remain strong and should continue to result in solid balance sheet growth in 2026, with loan deposit growth at similar levels to what we had in 2025. In addition to the balance sheet growth, we expect to see more positive trends in our net interest margin or fee income and more operating leverage resulting from our disciplined expense control. We had net interest margin expansion of 26 basis points in 2025 and while we expect further expansion in 2026, it may not be at the same level as last year. While we’ll remain disciplined in our expense control, we believe that investing in the business will drive future shareholder value and ongoing disruption from the M and A activity in our markets creates unique opportunities for us to add banking talent. We will take advantage of those opportunities if and when they materialize, as well as opportunities to add new clients. Based on the trends we’re seeing in the portfolio and the feedback we’re getting from clients, we don’t see anything to indicate that we’ll experience any meaningful deterioration in asset quality. The positive trends we’re seeing in a number of key areas expected to continue, which we believe should result in steady improvement in our financial performance and further value being created for shareholders in 2026. So with that we’re happy to take your questions. So Carmen, please open up the call.
OPERATOR
Thank you so much. And as a reminder, if you do have a question, press star 11 and wait for your name to be announced. To remove yourself, press star 11 again. One moment for our first question. It comes from the line of Brett Rabatin with Stonex Group. Please proceed.
Brett Rabatin (Equity Analyst)
Hey good morning everyone. Or good afternoon to some. Wanted to start off obviously great to see the trends this quarter in a number of categories. How many MLOs have you guys added and then just obviously stronger starts than usual on mortgage. How much production that you guys have this quarter? I know it was better than usual for 1q.
Scott Wiley (Chairman and Chief Executive Officer)
I think we added one new MLO this quarter and we added another seven folks in front office banker type jobs. The MLO additions are especially nice if they’re a good fit for us and producers because they have very low fixed costs and their compensation largely comes from variable cost from production. Do either of you have the data for last year handy? Last year MLO Ads. Yeah, we’ll look up that number, Brett. And then just mortgage production totals. Yeah, mortgage had a good strong first quarter. We saw gains on mortgage loans go from 800,000 in quarter four to 1.3 in quarter one. So several strong production, good economic conditions I think spurred that. But also the MLO ads we’ve been doing over the last several quarters have just given us a level of ability to produce mortgages. Yeah, block volume increased a little under 40 million. Quarter over quarter, we were just under 180 million secondary LOC volume for Q1. And then we added in 2025, we added 8 MLOs. Okay, that’s helpful. Color. Brett, just on that point, just on that point, I would love to tell you that we were expecting a strong first quarter, but actually our experience is first quarter tends to be pretty …
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