First Western Financial (MYFW) Q4 2020 earnings summary

Executive summary

• 2020 was a record year, with net income and diluted EPS more than tripling YoY as mortgage gains surged, net interest income grew and credit quality remained strong.

• At year-end, total assets were $1.97B, loans $1.53B, deposits $1.62B and trust and investment management AUM $6.26B.

• Commercial banking expansion diversified the loan mix: residential mortgages fell to 29.7% of loans from 40.2% a year earlier.

Financial highlights

• Net income was $24.5M vs $8.0M; income before tax was $33.1M vs $10.2M, up 224.4% YoY.

• Basic and diluted EPS were $3.11 and $3.08, respectively, vs $1.02 and $1.01 in 2019.

• Net interest income rose 43.8% to $46.1M; non-interest income rose 57.1% to $51.2M, led by mortgage gains of $29.3M vs $10.6M.

• Gross revenue, a non-GAAP measure, increased 51.2% to $97.3M; non-interest expense rose 10.7% to $59.5M.

• Provision for loan losses increased to $4.7M from $0.7M, reflecting pandemic uncertainty, loan modifications and portfolio growth.

Outlook and guidance

• Strategy remains focused on adding commercial clients, growing the balance sheet, expanding fee income and generating operating leverage through organic growth and acquisitions.

• Strong earnings increased tangible common equity by more than $26M in 2020, supporting planned organic and acquisitive growth without shareholder dilution from a capital raise.

• Reopened PPP activity had 660 applications totaling $91.4M by Feb. 28, 2021; 410 applications for $68.7M had been approved and funded.