First Western Financial, Inc., and First Western Trust Bank reported net income for the three quarters ended September 30, 2013 of $1.4M and $2.6M, respectively. These results are ahead of 2013 forecast and are significantly improved over the same nine months of 2012 by $6.8M and $3.3M, respectively.
Net Interest Income was up 11% over 3Q12 and 29% over 2Q13, and the declining trend in pre-provision net interest income has slowed due to three main factors:
- Loans grew in the month of September to $515M, up $10M from August month end;
- Investments grew to $71M, up $48M from June quarter end; and
- Deposits grew $73M from June quarter end, $36M of the growth was in non-interest bearing accounts.
However, loan pricing competition and low market rates continue to hinder growth and put pressure on net interest margin.
In the third quarter of 2013, the Bank experienced continued decreases in levels of non-performing assets and an increase in credit recoveries. Non-accrual loans have declined significantly to $2.5M or 0.5% of total loans at the end of the 3rd quarter of 2013 compared to $19.3M or 3.7% at the end of the 3rd quarter of 2012. The majority of the $1.8M positive provision in the quarter was related to credit recoveries of $1.3M and improving credit quality.
Non-Interest Income (NonII) was up quarter over quarter due largely to the continued increases in assets under management (AUM). AUM has grown to $4.7 billion, a 20% increase from the beginning of the fiscal year. Fee revenue continues to be a significant portion of total revenues at 45%, which is well above peers and indicates the diversity and strength of revenues at the Company.
Total expenses have declined from 2nd quarter and are down 14% from the same 9 months of 2012. Bank capital ratios improved further as of September 30, 2013, and continue to exceed the regulatory “well-capitalized” standards.