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Net Interest Income was up 16% over Q4, however, pre-provision net interest continued to decline due to three main factors:

  • Loan pricing competition and low market rates;
  • Declining loans outstanding, also due to increased market competition; and
  • Lower investment portfolio yields in 2013.

However, efforts of management to reduce deposit rates consistent with market have improved net interest margin from 3Q12 up 18 bps to 3.61%.  The provision for credit losses was $108m, largely driven by the improvement in credit quality and declining loans outstanding.

Non-Interest Income continued to improve in Q113, up 23% over Q412, when Q112 and Q212 are adjusted for the Westwood team exit, and when Q4 is adjusted for one time litigation gains.  Revenue in Q113 benefited from the recognition of annual performance fees at FWCM and an increase in AUM of $613mm, or 15%, driven by higher market values and new business.

Expenses continued their declining trend, reflecting earnings improvement initiatives management has undertaken.  Earnings were positive at the Bank, FWCM and consolidated Company.

With weaker loan trends, management worked to reduce excess liquidity in Q412 and Q113, reflected in the decline in deposits of $118mm from September 30.  First Western’s revenue mix continues to be approximately 50/50, which is well above peers and indicates the diversity and strength of revenues at First Western.  Bank capital ratios continued to improve, and continue to exceed the regulatory “well-capitalized” standards.

View the financial summary PDF.



First Western Financial, Inc.: FWF, Company, First Western, Holding Company

First Western Trust Bank: FWT, Bank

First Western Capital Management: FWCM, RIA


This report is Privileged and Confidential.  The 2013 financial information included herein is unaudited.  Certain statements contained in this quarterly report constitute forward-looking statements. These statements relate to future events or First Western’s future performance. All statements other than statements of historical fact are forward-looking statements. The use of any future or present tense language including but not limited to the words “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “believe”, “predict” and “potential”, or similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. First Western undertakes no obligation to publicly update or revise any forward-looking statements except as expressly required by applicable law.