In This Article:
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Net Income: $2.7 million or $0.28 per diluted share in Q4 2024.
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Loan Production: $94 million in Q4, up from $83 million in Q3.
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Average Rate on New Loan Production: 7.44% in Q4.
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Total Deposits: Increased by $11 million from the prior quarter.
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Gross Revenue: Increased 4.8% from the prior quarter.
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Net Interest Income: Increased 8.3% from the prior quarter.
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Net Interest Margin (NIM): Increased 13 basis points to 2.45%.
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Noninterest Income: Decreased by approximately $500,000 from the prior quarter.
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Noninterest Expense: Increased by $1 million due to a $1.1 million write-down of OREO.
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Assets Under Management: Decreased by $145 million in Q4.
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Tangible Book Value Per Share: Increased by 1.6% in the quarter.
Release Date: January 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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First Western Financial Inc (NASDAQ:MYFW) achieved its highest level of loan production in any quarter of 2024, driven by additions to its banking team.
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The company successfully lowered deposit costs, contributing to an expansion in net interest margin.
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There was a decline in non-performing assets, with immaterial charge-offs reported for the quarter.
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The tangible book value per share increased by 1.6% during the quarter.
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Net interest income increased by 8.3% from the prior quarter, contributing to a 4.8% rise in gross revenue.
Negative Points
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A $1.1 million write-down in OREO negatively impacted earnings per share by $0.08 in the fourth quarter.
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Non-interest income decreased by approximately $500,000 due to a decline in gain on sale of mortgage loans.
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Assets under management decreased by $145 million in the fourth quarter, primarily due to net withdrawals and lower market values.
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Non-interest expenses increased by $1 million from the prior quarter, attributed to the OREO write-down.
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The trust and investment management fees only increased by 2.2% year over year, indicating slower growth in this segment.
Q & A Highlights
Q: Can you provide more details about the sale of the large OREO property and its impact on financials? A: Scott Wylie, CEO, explained that the Three Meadows Ranch, a significant property, is under contract with a strong price that will not require a write-down. The sale is expected to close in early February. The other two properties are smaller and have seen interest but are less likely to sell during the winter season.
Q: What is the outlook for the net interest margin (NIM) in 2025, with or without rate cuts? A: David Weber, CFO, stated that they expect to expand the NIM in 2025 without relying on rate cuts. Rate cuts would further benefit the NIM, with an estimated $1 million annualized increase per 25 basis point reduction. The focus will be on loan turnover and deposit growth to improve the average cost of funds.