First Western Reports Third Quarter 2020 Financial Results
First Western Financial (MYFW) reported strong Q3 2020 results with a net income of $9.6 million, up from $8.7 million in Q2 2020 and $2.4 million in Q3 2019. Diluted EPS rose to $1.20, compared to $1.10 in the previous quarter. Gross revenue increased to $31.0 million, driven by higher mortgage segment activity and net interest income. Total deposits grew by 11.1% quarter-over-quarter. Despite a slight decrease in net interest margin to 3.07%, the company remains optimistic about future growth and continues to strengthen its banking initiatives.
- Net income available to common shareholders increased to $9.6 million in Q3 2020, up from $8.7 million in Q2 2020.
- Gross revenue increased by 18.5% to $31.0 million in Q3 2020 compared to Q2 2020.
- Total deposits grew by 11.1% quarter-over-quarter to $1.56 billion.
- Non-interest income rose to $18.0 million, a 16.9% increase from Q2 2020, driven by higher mortgage activity.
- Net interest margin fell slightly to 3.07% in Q3 2020 from 3.10% in Q2 2020.
- Non-interest expense increased by 31.5% from Q2 2020 to $16.6 million due to higher salaries and benefits.
Third Quarter 2020 Summary
- Net income available to common shareholders of
$9.6 million in Q3 2020, compared to$8.7 million in Q2 2020 and$2.4 million in Q3 2019 - Diluted EPS of
$1.20 in Q3 2020, compared to$1.10 in Q2 2020 and$0.30 in Q3 2019 - Gross revenue(1) of
$31.0 million in Q3 2020, compared to$26.2 million in Q2 2020 and$16.6 million in Q3 2019 - Net interest margin, including the impact of Paycheck Protection Program (“PPP”) loans, remained relatively flat at
3.07% in Q3 2020, compared with3.10% in Q2 2020 and2.95% Q3 2019 - Total assets of
$1.97 billion , up9.0% from Q2 2020 and55.1% from Q3 2019 - Total deposits of
$1.56 billion , up11.1% from Q2 2020 and41.0% from Q3 2019 - Gross loans of
$1.51 billion , up5.9% from Q2 2020 and62.5% from Q3 2019 - Loans under active COVID-19 loan modification agreements declined
62.3% from$176.9 million in Q2 2020, to$66.7 million in Q3 2020
(1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
DENVER, Oct. 22, 2020 (GLOBE NEWSWIRE) -- First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the third quarter ended September 30, 2020.
Net income available to common shareholders was
Scott C. Wylie, CEO of First Western, commented, “We are very pleased to deliver another record quarter of earnings driven by strong growth in both net interest income and non-interest income, while our asset quality continues to remain healthy despite the ongoing COVID-19 pandemic. The investments we have made in banking talent and technology over the past few years are having the impact that we expected, resulting in the consistent acquisition of new clients, strong balance sheet growth, improving operating leverage, and greater earnings power.
“With the addition of a number of experienced bankers through our branch purchase consummated in May 2020, we have accelerated our commercial banking initiative and are successfully attracting new commercial relationships. During the third quarter, we generated loan growth of
“We continue to have a strong business development pipeline in both our commercial banking and residential mortgage areas. We expect our mortgage activity to continue providing a significant earnings contribution in the near-term, while the balance sheet growth, strong net interest margin and improving operating leverage resulting from the expansion of our commercial client roster we believe is creating a sustainable path to consistently generating strong returns over the longer-term. As we continue to gain scale through organic growth, expansion and additional strategic acquisitions, we believe that our model will establish First Western as a high performing financial institution and create significant value for our shareholders in the future,” said Mr. Wylie.
| For the Three Months Ended | ||||||||||
| September 30, | June 30, | September 30, | ||||||||
| (Dollars in thousands, except per share data) | 2020 | 2020 | 2019 | |||||||
| Earnings Summary | ||||||||||
| Net interest income | $ | 12,918 | $ | 10,796 | $ | 7,940 | ||||
| Less: provision for loan losses | 1,496 | 2,124 | 100 | |||||||
| Total non-interest income | 18,032 | 15,427 | 8,788 | |||||||
| Total non-interest expense | 16,632 | 12,644 | (1) | 13,442 | ||||||
| Income before income taxes | 12,822 | 11,455 | 3,186 | |||||||
| Income tax expense | 3,192 | 2,759 | 780 | |||||||
| Net income available to common shareholders | 9,630 | 8,696 | 2,406 | |||||||
| Adjusted net income available to common shareholders(2) | 9,630 | 8,941 | 2,855 | |||||||
| Basic earnings per common share | 1.22 | 1.10 | 0.30 | |||||||
| Adjusted basic earnings per common share(2) | 1.22 | 1.13 | 0.35 | |||||||
| Diluted earnings per common share | 1.20 | 1.10 | 0.30 | |||||||
| Adjusted diluted earnings per common share(2) | $ | 1.20 | $ | 1.13 | $ | 0.35 | ||||
| Return on average assets (annualized) | 2.06 | % | 2.25 | % | 0.80 | % | ||||
| Adjusted return on average assets (annualized)(2) | 2.06 | 2.32 | 0.95 | |||||||
| Return on average shareholders' equity (annualized) | 26.43 | 25.44 | 7.74 | |||||||
| Adjusted return on average shareholders' equity (annualized)(2) | 26.43 | 26.16 | 9.19 | |||||||
| Return on tangible common equity (annualized)(2) | 31.49 | 31.02 | 9.39 | |||||||
| Adjusted return on tangible common equity (annualized)(2) | 31.49 | 31.89 | 11.15 | |||||||
| Net interest margin | 3.07 | 3.10 | 2.95 | |||||||
| Efficiency ratio(2) | 53.40 | % | 48.07 | % | 80.62 | % | ||||
(1) Includes non-recurring acquisition related expenses of
(2) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
Operating Results for the Third Quarter 2020
Revenue
Gross revenue (1) was
(1) Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
Relative to the third quarter of 2019, gross revenue increased
Net Interest Income
Net interest income for the third quarter of 2020 was
Relative to the third quarter of 2019, net interest income increased
Net Interest Margin
Net interest margin for the third quarter of 2020 decreased slightly to
Relative to the third quarter of 2019, the net interest margin increased from
Non-interest Income
Non-interest income for the third quarter of 2020 was
Relative to the third quarter of 2019, non-interest income increased
Non-interest Expense
Non-interest expense for the third quarter of 2020 was
Non-interest expense increased
The Company’s efficiency ratio was
Income Taxes
The Company recorded income tax expense of
Loan Portfolio
Total loans, including mortgage loans held for sale, were
Total loans held for investment, were
PPP loans were
Deposits
Total deposits were
Average total deposits for the third quarter of 2020 increased
Borrowings
Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were
Assets Under Management
Total assets under management increased by
Credit Quality
Non-performing assets totaled
As a result of the COVID-19 pandemic, a loan modification program was designed and implemented to assist our clients experiencing financial stress resulting from the economic impacts caused by the global pandemic. The Company offered loan extensions, temporary payment moratoriums, and financial covenant waivers for commercial and consumer borrowers impacted by the pandemic who had a pass risk rating and had not been delinquent over 30 days on payments in the last two years.
At September 30, 2020, the Company has active loan modification agreements on forty-four loans across multiple industries in the amount of
The Company continues to meet regularly with clients who could be more highly impacted by the COVID-19 pandemic. The Company receives and reviews current financial data and cash flow forecasts from borrowers with loan modification agreements. As of September 30, 2020, loans which were granted modifications and the modification term has ended have returned to performing status.
The Company recorded a provision for loan losses of
Capital
At September 30, 2020, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. At September 30, 2020, the Bank was classified as “well capitalized,” as summarized in the following table:
| September 30, | |||
| 2020 | |||
| Consolidated Capital | |||
| Tier 1 capital to risk-weighted assets |
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FAQ
What are First Western Financial's Q3 2020 earnings results?
First Western Financial reported a net income of $9.6 million for Q3 2020, with diluted EPS of $1.20.
How did First Western Financial's gross revenue perform in Q3 2020?
Gross revenue for Q3 2020 was $31.0 million, an increase from $26.2 million in Q2 2020.
What is the outlook for First Western Financial following Q3 2020 results?
The company expects continued growth in both commercial and residential mortgage areas, supported by a strong business development pipeline.
How much did total deposits increase for First Western Financial in Q3 2020?
Total deposits increased by 11.1% from Q2 2020, reaching $1.56 billion.
First Western Financial, Inc.
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