First Western Financial, Inc. (MYFW) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance with increased net interest income and margin, stable asset quality, and a strategic focus on growth and efficiency. The Q&A section reveals opportunities for margin expansion and growth in loans and deposits, although some responses were vague. Despite a decrease in noninterest income, optimistic guidance and strategic growth initiatives suggest a positive outlook, likely leading to a stock price increase in the near term.
Key Financial Performance
Net Income $3.3 million or $0.34 per diluted share in Q4 2025, higher than the prior quarter. A write-down of an OREO property reduced earnings per share by $0.10 after tax.
Tangible Book Value Per Share Increased 1.6% in Q4 2025 due to prudent balance sheet management.
Loans Held for Investment Increased $59 million from the prior quarter due to higher productivity from banking team additions and increased CRE loan demand.
New Loan Production $146 million in Q4 2025, diversified across commercial real estate portfolios with an average rate of 6.36%.
Total Deposits Increased $102 million from the prior quarter. Average deposits increased 10% in Q4 2025 compared to Q4 2024, despite seasonal outflows.
Assets Under Management Decreased $155 million in Q4 2025 due to net withdrawals in low fee and fixed fee product categories, partially offset by improved market conditions on investment agency accounts.
Gross Revenue Increased 1.5% from the prior quarter and 12.2% compared to Q4 2024, primarily due to an increase in net interest income.
Net Interest Income Increased 5.6% from the prior quarter and 21.7% compared to Q4 2024 due to an increase in net interest margin.
Net Interest Margin (NIM) Increased 17 basis points from the prior quarter to 2.71%, driven by a reduction in cost of funds and lower rates on money market deposit accounts.
Noninterest Income Decreased by approximately $800,000 from the prior quarter due to seasonal declines in gain on sale of mortgage loans and a decrease in risk management and insurance fees.
Noninterest Expense Increased $1.2 million from the prior quarter, impacted by a one-time $1.4 million write-down on an OREO property. Excluding this, noninterest expense decreased $100,000.
Asset Quality Stable trends with decreases in nonaccrual loans and NPAs. Minimal net charge-offs in the quarter. Allowance coverage remained unchanged at 81 basis points of total loans.
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Operating Highlights
New market presence in Arizona: The company has recently added a new market presence in Arizona, which is expected to provide good opportunities for growth.
Loan growth: Loans held for investment increased by $59 million from the prior quarter, with new loan production reaching $146 million in Q4 2025. The average rate on new production was 6.36%.
Deposit growth: Total deposits increased by $102 million from the prior quarter, with average deposits increasing 10% year-over-year.
Net interest margin (NIM) expansion: NIM increased by 17 basis points from the prior quarter to 2.71%, driven by a reduction in cost of funds and runoff of high-cost deposit accounts.
Expense management: Noninterest expense increased by $1.2 million due to a one-time $1.4 million write-down of an OREO property. Excluding this, expenses decreased by $100,000.
Talent acquisition and M&A disruption: The company is leveraging ongoing M&A activity in the Colorado banking market to add new clients and banking talent.
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Risk or Challenges
Competitive Market Conditions: The market remains very competitive in terms of pricing on loans and deposits, with other banks offering lower rates on loans and higher rates on deposits to attract business.
Seasonal Deposit Outflows: Seasonal outflows were observed, particularly related to title company operating accounts, which typically see declines in deposit balances during the fourth quarter due to lower home purchase activity.
Decreased Noninterest Income: Noninterest income decreased by approximately $800,000 from the prior quarter, primarily due to a decline in gain on sale of mortgage loans and a decrease in risk management and insurance fees.
Write-Down of OREO Property: A one-time $1.4 million write-down on the value of an OREO property negatively impacted noninterest expenses and earnings per share.
Decline in Assets Under Management: A $155 million decrease in assets under management was noted, primarily due to net withdrawals in low fee and fixed fee product categories.
Economic Sensitivity: The company’s performance is sensitive to economic conditions, as evidenced by seasonal and market-driven fluctuations in deposits and loan demand.
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Guidance & Outlook
Economic Conditions and Market Opportunities: The company anticipates relatively healthy economic conditions in its markets and sees opportunities to add new clients and talent due to ongoing disruption from M&A activity in the Colorado banking market. Additionally, a new market presence in Arizona is expected to provide growth opportunities.
Loan and Deposit Growth: Loan and deposit pipelines are expected to remain strong, leading to solid balance sheet growth in 2026, with growth levels similar to those achieved in 2025.
Net Interest Margin and Fee Income: Positive trends in net interest margin and fee income are expected to continue in 2026, although net interest margin expansion may not match the levels seen in 2025.
Expense Control and Operating Leverage: The company plans to maintain disciplined expense control while making strategic investments to drive future shareholder value. Improved operating leverage is anticipated.
Asset Quality: No meaningful deterioration in asset quality is expected based on current portfolio trends and client feedback.
Shareholder Value: The company expects steady improvement in financial performance and further value creation for shareholders in 2026.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the outlook for margin expansion opportunities in the next few quarters and the amount of loans repricing this year?
A:The company expects further margin expansion through 2026, though not at the same level as seen in 2025. About $250 million in fixed-rate loans maturing over the next year, with an average yield in the low 5s, provide opportunities for repricing and positive trends in yield on interest-earning assets.
Q:What were the drivers behind the trends in the asset management, wealth management, and mortgage banking businesses in Q4?
A:The decline in AUM was due to reductions in lower-yielding and fixed-rate categories, while higher-yielding categories showed improvements. Restructuring in risk and insurance revenues led to cost reductions. Mortgage production was seasonally lower in Q4 and Q1, but the company added eight MLOs in 2025, a 45% increase, to position for future growth.
Q:What is the growth outlook for loans and deposits in 2026?
A:The company expects growth in 2026 to be in line with 2025, driven by market disruption creating opportunities for talent and new clients. A disruption task force is focused on recruiting and sales initiatives, and the company sees strong momentum in its niche markets.
Q:What is the expense outlook for 2026?
A:The company aims to keep expenses below $20 million per quarter while driving efficiency and revenue growth. They are open to investing in opportunities that provide strong short-term and long-term impacts.
Q:What is the profitability improvement potential in 2026?
A:The company is targeting a 1% ROA, with a starting operating run rate of $2 per share. They aim to achieve this through NIM improvements, operating growth, and other initiatives.
Q:How does the company plan to match loan growth with core deposits in 2026?
A:The company is focused on deposit growth and has historically been able to bring in deposits as needed. They are leveraging market disruption to attract new business and maintain a strong loan and deposit pipeline.
Q:What is the outlook for the mortgage market and the company's mortgage operations in 2026?
A:The company has increased its MLO team by 45% in 2025 to position for future growth. They expect pent-up demand in the market to create opportunities, particularly in Denver, Arizona, and Wyoming. The Bozeman office is also contributing positively.
Q:What is the company's approach to acquisitions and organic growth?
A:The company is focused on organic growth, leveraging market disruption to hire talent and attract clients. They are not actively pursuing acquisitions but are open to opportunities that align with their strategy.
Q:What is the company's tax rate outlook and strategies?
A:The effective tax rate is expected to be in the 23%-24% range. The company has added tax-exempt interest income sources and is exploring additional opportunities.
Q:What caused the increase in mortgage loans held for sale in Q4?
A:The increase was due to timing dynamics of when sales occur relative to the end of the period. The company does not hold loans for strategic reasons but sells them as part of normal operations.
Q:What caused the reduction in construction and development loans?
A:The reduction was intentional as part of a risk mitigation strategy. Completed construction projects are moving to investor real estate and are often refinanced into permanent financing.
Q:What is the company's deposit beta outlook for 2026?
A:The company expects to maintain a mid-50s deposit beta in 2026, with a spot rate of 2.86% at the end of 2025.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the question about the profitability improvement potential in 2026, specifically regarding the ROA range they are targeting by year-end. The response included vague language and lacked specific details.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CRE portfolio
Inc today
Investment insurance
NPAs level
OREO contract
OREO property
Okay trend
President Okay
Trust Investment
account Slide
account decline
account fee
activity addition
addition cost
balance home
completion project
construction loan
contract sale
core deposit
cost deposit
criterion construction
decline decrease
decrease gain
decrease loan
decrease risk
decrease runoff
deposit Trust
deposit account
deposit core
deposit production
expansion asset
loan NPAs
production increase
value OREO
write value
MYFW Transcript
First Western Financial, Inc. (MYFW) Q4 2025 Earnings Call Transcript
Positive1-23
The earnings call summary indicates strong financial performance with increased net interest income and margin, stable asset quality, and a strategic focus on growth and efficiency. The Q&A section reveals opportunities for margin expansion and growth in loans and deposits, although some responses were vague. Despite a decrease in noninterest income, optimistic guidance and strategic growth initiatives suggest a positive outlook, likely leading to a stock price increase in the near term.
First Western Financial, Inc. (MYFW) Q3 2025 Earnings Call Transcript
Unknown10-24
The earnings call summary and Q&A session reveal mixed signals. While there is positive sentiment around deposit growth and net interest margin expansion, concerns about non-performing loans and lack of clear guidance on liquidity redeployment dampen enthusiasm. The company's strategic focus on growth and shareholder value is promising, but uncertainties about loan performance and market conditions temper expectations. The absence of a market cap prevents assessing small-cap stock volatility, leading to a neutral prediction for stock price movement.
First Western Financial, Inc. (MYFW) Q2 2025 Earnings Call Transcript
Unknown7-25
The earnings call reveals mixed signals. Financial performance shows growth in net interest income, assets under management, and disciplined loan production, but also highlights a decline in noninterest income and gross revenue. The Q&A section indicates stable expenses and a focus on revenue growth, but management's lack of specific guidance on NIM and trust fees raises concerns. Despite positive customer sentiment and strategic hires, uncertainties in mortgage volumes and macroeconomic conditions persist. These factors suggest a neutral stock price reaction over the next two weeks.
Earnings call transcript: First Western Financial beats Q1 2025 expectations
Unknown4-25
The earnings call presents a mixed picture. Positive aspects include increased net income, gross revenue, and net interest margin, alongside controlled expenses. However, assets under management decreased significantly, and loan production was offset by payoffs. The Q&A revealed management's reluctance to provide precise guidance on expenses and the impact of new hires. Although financial performance improved, the lack of clear future guidance and asset management decline suggest a neutral sentiment, with limited stock price movement expected in the short term.
MYFW Slides
MYFW Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
