First Western Financial (MYFW) Q4 2023 earnings summary

Executive summary

• Q4 2023 net income available to common shareholders was $0.3 million, or $0.03 diluted EPS, versus $3.1 million and $0.32 in Q3; the $3.9 million provision weighed on results.

• Pre-tax, pre-provision net income was $4.1 million; expense control kept operating expenses below initial 2023 expectations.

• Deposits rose 4.5% QoQ to $2.53 billion, outpacing loan growth and lowering the loan-to-deposit ratio to 100.7% from 105.1%.

• Priorities include core deposit growth, prudent underwriting, disciplined expenses and measured asset growth; management expects solid earnings growth in 2024.

Financial highlights

• Net interest income was $16.3 million, down 2.6% QoQ and 25.7% YoY; gross revenue was $22.5 million, down 2.7% QoQ and 22.4% YoY.

• Provision for credit losses was $3.9 million, versus $0.3 million in Q3 and $1.2 million in Q4 2022; net income was $0.3 million, versus $3.1 million and $5.5 million, respectively.

• Non-interest income was $6.1 million, flat QoQ and down 5.2% YoY; non-interest expense was $18.3 million, flat QoQ and down 8.2% YoY.

• Adjusted net income was $0.3 million and adjusted diluted EPS was $0.03; pre-tax, pre-provision net income was $4.1 million versus $4.6 million in Q3.

Outlook and guidance

• Conservative loan production and core deposit gathering are expected to support modest asset growth until economic conditions improve.

• Management expects solid 2024 earnings growth despite modest balance-sheet growth, supported by expense discipline, technology and talent investments, and potential NIM expansion as rates decline.

• Focus remains on core clients and deposit-rich industries; management cited conservative underwriting and business-development capabilities as positioning for strengthening loan demand.