First Western Financial, Inc. (Company) and First Western Trust Bank (Bank) reported pre-tax net income (loss) for the quarter ended September 30, 2014 of $(0.3)M and $0.4M, respectively. These results were significantly impacted by $730K of deal costs related to the recently announced merger with Sunflower Financial, Inc. Excluding these one-time deal costs, Q314 pre-tax net income would be $0.4M at First Western Financial, Inc. and $1.1M at the Bank.
Net Interest Income (pre-provision) was up 8% over Q313 but was flat compared to Q214; pre-provision net interest income was impacted by two main factors:
- Average loans outstanding were slightly higher than prior quarter but loan yield dropped 2bps to 4.56% in Q314. Loan pricing competition and low market rates continue to impact loan growth.
- Average deposits were up in the quarter ending at $600M, and the cost of interest-bearing deposits continues to decline with portfolio rates at 0.41% in Q314 vs. 0.44% in the prior quarter.
The Bank continues to experience improving asset quality with total non-performing loans continuing to drop for the eighth consecutive quarter and representing just 1.4% of total loans.
Assets under management (AUM) have grown to $4.7 billion YTD, a 3% increase from December 31, 2013. Fee revenue continues to be a significant portion of total revenues at 50%, which is well above peers and indicates the diversity and strength of revenues at the Company.
First Western Trust remains “well capitalized” by all regulatory measures with total equity capital of $70.0M at September 30, 2014.
Julie A. Courkamp
November 4, 2014