First Western Financial (MYFW) Q4 2021 earnings summary

Executive summary

• 2021 growth reflected organic expansion and the Dec. 31 Teton acquisition; commercial banking and wealth management gains offset a sharp pullback in mortgage refinancing. Tangible book value per share rose 20%+ in 2021.

• Assets grew 28% and loans 17% during 2021 while credit quality remained strong; commercial loans rose 23% and commercial deposits 43%.

Financial highlights

• FY21 total income before non-interest expense was $95.4M, up from $92.6M; net income available to common shareholders fell 16.0% to $20.6M.

• Net interest income before provision rose 22.6% to $56.5M; provision for loan losses declined to $1.2M from $4.7M.

• Non-interest income fell 21.6% to $40.2M, mainly as mortgage gains declined $13.2M to $16.1M amid lower refinance activity.

• Non-interest expense rose 14.5% to $68.1M, including $4.1M of Teton acquisition costs; salaries and benefits increased 17.1% to $40.7M.

• Diluted EPS was $2.50 versus $3.08; income tax expense was $6.7M at a 24.5% effective rate versus $8.5M and 25.8%.

Outlook and guidance

• Management expected strong 2022 performance, citing the largest quarterly loan production in its history at year-end and continued business-development momentum.

• Bozeman team investments and a strengthened Arizona team were expected to contribute more to 2022 growth; Teton cost savings were expected largely after the May system conversion.

• Growth plans include adding banking talent, entering markets, and investing in technology; management also expected accretive contribution from Teton.