First Western Financial (MYFW) Q1 2025 earnings summary

Executive summary

• Net income available to common shareholders rose to $4.2 million, or $0.43 per diluted share, up 68% year-over-year and substantially from the prior quarter, driven by higher net interest income, NIM expansion, and lower non-interest expense.

• Tangible book value per share increased 1.6% sequentially to $23.18, with book value per share at $26.44.

• The company maintained a conservative credit profile and disciplined expense management, with positive trends in asset quality and deposit gathering.

• The banking sector outlook is stable but cautious, with the company well-positioned in affluent, high-growth Western markets.

Financial highlights

• Net interest income rose to $17.5 million, up 3.6% sequentially and 8.7% year-over-year, with net interest margin expanding to 2.61%.

• Non-interest income grew by $900,000 to $7.3 million, driven by gains on mortgage loan and OREO property sales.

• Non-interest expense decreased to $19.4 million, mainly due to the absence of a prior quarter OREO write-down and lower professional services costs.

• Efficiency ratio improved to 79.2% from 80.7% in Q4 2024 and 83.7% in Q1 2024.

• Total deposits were $2.52 billion, with noninterest-bearing deposits up 9.1% sequentially.

Outlook and guidance

• Management expects continued positive trends in asset quality, NIM, and operating efficiency, with redeployment of OREO sale proceeds into interest-earning assets.

• Loan growth may be impacted by macroeconomic uncertainty and tariffs, but pipelines remain healthy and new banking talent is expected to support growth.

• Expense guidance remains at $19.5–$20 million per quarter, barring outperformance-driven incentive accruals.

• The company remains well-capitalized and anticipates no material changes to its primary funding or asset strategies.

• Targeting a return on assets (ROA) of 1% as a near-term goal.