First Western Financial (MYFW) Q1 2025 earnings summary

Executive summary

• Net income available to common shareholders rose to $4.2 million in Q1 2025, up 68% year-over-year and 3.6% sequentially, with diluted EPS increasing to $0.43.

• Profitability was driven by net interest margin expansion, higher non-interest income, and disciplined expense management.

• Tangible book value per share increased 1.6% sequentially to $23.18.

• The company maintains a conservative credit profile and is well-positioned in affluent, high-growth Western markets.

• Successfully resolved and sold two largest OREO properties, generating a $0.5 million net gain and reducing non-performing assets.

Financial highlights

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

• Non-interest income increased to $7.3 million, up 12.3% sequentially, driven by gains on mortgage loan sales and OREO property sales.

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

• 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 is anticipated to accelerate in 2025, supported by new banking talent and disciplined underwriting.

• 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.

• Anticipate flat or lower deposit balances in Q2 due to seasonal tax outflows, with recovery expected in the second half.