First Western Reports First Quarter 2024 Financial Results

First Quarter 2024 Summary

• Net income available to common shareholders of $2.5 million in Q1 2024, compared to a Net loss of $3.2 million in Q4 2023.
• Diluted earnings/(loss) per share of $0.26 in Q1 2024, compared to $(0.34) in Q4 2023
• Non-interest income increased 19.7% to $7.3 million compared to $6.1 million in Q4 2023 and 25.3% compared to $5.8 million in Q1 2023
• Loan to deposit ratio decreased to 98.4% in Q1 2024, compared to 100.6% in Q4 2023
• Book value per common share increased 0.8% from $25.33 in Q4 2023 to $25.52 in Q1 2024. Tangible book value per common share⁽¹⁾ increased 0.9% from $22.01 in Q4 2023, to $22.21 in Q1 2024.
• Total capital to risk-weighted assets ratio of 13.15% in Q1 2024, compared to 12.59% in Q4 2023

/EIN News/ -- DENVER, April 18, 2024 (GLOBE NEWSWIRE) -- First Western Financial, Inc. (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the first quarter ended March 31, 2024.

Net income available to common shareholders was $2.5 million, or $0.26 per diluted share, for the first quarter of 2024. This compares to Net loss of $3.2 million, or $(0.34) per diluted share, for the fourth quarter of 2023, and Net income of $3.8 million, or $0.39 per diluted share, for the first quarter of 2023.

Scott C. Wylie, CEO of First Western, commented, "While continuing to prioritize prudent risk management and a conservative approach to new loan production, we delivered a higher level of profitability during the first quarter compared to Q4 2023. As a result of strong execution on our strategic priorities, we saw positive trends in a number of key areas including further improvement in our loan-to-deposit ratio, a higher level of non-interest income driven by our wealth management and mortgage banking businesses, and improvement in our asset quality with a decline in non-performing loans and net charge-offs to average loans of 0.00% in the quarter. Given our higher level of profitability and prudent balance sheet management, we were able to continue increasing our tangible book value per share and our risk-based capital ratios.

“While economic conditions remain uncertain, we will continue to prioritize prudent risk management and be conservative in new loan production, while focusing on adding new full banking relationships with high quality clients that need the multiple products and services we can provide in banking, wealth management, and other areas. When economic conditions improve, given the strength of our balance sheet, including the higher level of liquidity that we now have, we believe we are well positioned to capitalize on increased loan demand to grow our balance sheet, increase revenue, and realize more operating leverage, which should result in further increases in our level of profitability and additional value being created for shareholders,” said Mr. Wylie.

	For the Three Months Ended
	March 31,				December 31,				March 31,
(Dollars in thousands, except per share data)	2024				2023				2023
Earnings Summary
Net interest income	$	16,070			$	16,331			$	19,573
Provision/(release) for credit losses		72				8,493				(310	)
Total non-interest income		7,277				6,081				5,806
Total non-interest expense		19,696				18,276				20,528
Income/(loss) before income taxes		3,579				(4,357	)			5,161
Income tax expense/(benefit)		1,064				(1,138	)			1,341
Net income/(loss) available to common shareholders		2,515				(3,219	)			3,820
Basic earnings/(loss) per common share		0.26				(0.34	)			0.40
Diluted earnings/(loss) per common share		0.26				(0.34	)			0.39
Return on average assets (annualized)		0.35	%			(0.45	)%			0.54	%
Return on average shareholders' equity (annualized)		4.10				(5.17	)			6.40
Return on tangible common equity (annualized)(1)		4.71				(6.11	)			7.35
Net interest margin		2.34				2.37				2.93
Efficiency ratio(1)		83.44				80.93				78.44

____________________

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Operating Results for the First Quarter 2024

Revenue

Total income before non-interest expense was $23.3 million for the first quarter of 2024, an increase of 67.2%, compared to $13.9 million for the fourth quarter of 2023. Gross revenue⁽¹⁾ was $23.5 million for the first quarter of 2024, an increase of 4.6%, from $22.5 million for the fourth quarter of 2023. The increase in Total income before non-interest expense was primarily driven by a decrease in Provision for credit losses. Relative to the first quarter of 2023, Total income before non-interest expense decreased 9.4% from $25.7 million. Gross revenue decreased 9.8% from $26.1 million for the first quarter of 2023. The decrease was driven by a decrease in Net interest income as a result of higher Interest expense due to higher deposit costs, offset partially by higher Interest income.

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Net Interest Income

Net interest income for the first quarter of 2024 was $16.1 million, a decrease of 1.6% from $16.3 million in the fourth quarter of 2023. Relative to the first quarter of 2023, Net interest income decreased 17.9% from $19.6 million. The decreases were due to higher Interest expense driven primarily by higher deposit costs, offset partially by higher Interest income.

Net Interest Margin

Net interest margin for the first quarter of 2024 decreased 3 basis points to 2.34% from 2.37% reported in the fourth quarter of 2024, primarily due to continued pricing pressure on interest-bearing deposits and an unfavorable mix shift in the deposit portfolio.

The yield on interest-earning assets increased 7 basis points to 5.58% in the first quarter of 2024 from 5.51% in the fourth quarter of 2023 and the cost of interest-bearing deposits increased 19 basis points to 4.13% in the first quarter of 2024 from 3.94% in the fourth quarter of 2023.

Relative to the first quarter of 2023, net interest margin decreased from 2.93%, primarily due to pricing pressure on interest-bearing deposits and an unfavorable mix shift in the deposit portfolio.

Non-interest Income

Non-interest income for the first quarter of 2024 was $7.3 million compared to $6.1 million in the fourth quarter of 2023, primarily driven by an increase in Net gain on mortgage loans and higher Bank fees during the first quarter of 2024, partially offset by lower Risk management and insurance fees, which tend to be seasonally higher in the fourth quarter.

Relative to the first quarter of 2023, Non-interest income increased 25.3% from $5.8 million. Increases were driven by most components of Non-interest income, including Bank fees, Net gain on loans held for sale, Trust and investment management fees, Net gain on mortgage loans, and Net gain on loans accounted for under the fair value option.

Non-interest Expense

Non-interest expense for the first quarter of 2024 was $19.7 million compared to $18.3 million for the fourth quarter of 2023. The increase was driven by higher Salaries and employee benefits due to a higher bonus accrual commensurate with improved earnings in the first quarter of 2024 as compared to the fourth quarter of 2023 and higher payroll taxes, which tend to be seasonally higher in the first quarter.

Relative to the first quarter of 2023, Non-interest expense decreased 4.1% from $20.5 million, driven primarily by lower Salaries and employee benefits as a result of staffing reductions in 2023 to better align expenses with lower revenue. The decrease was partially offset by increased Professional services and Other operational costs related to higher legal, audit and other professional fees.

The Company’s efficiency ratio⁽¹⁾ was 83.4% in the first quarter of 2024, compared with 80.9% in the fourth quarter of 2023 and 78.4% in the first quarter of 2023.

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Income Taxes

The Company recorded Income tax expense of $1.1 million for the first quarter of 2024, compared to Income tax benefit of $1.1 million for the fourth quarter of 2023 and Income tax expense of $1.3 million for the first quarter of 2023.

Loans

Total loans held for investment were $2.48 billion as of March 31, 2024, a decrease of 2.2% from $2.54 billion as of December 31, 2023, the decline was due to a net decrease in Commercial and Industrial and 1-4 Family Residential portfolios. Relative to the first quarter of 2023, Total loans held for investment were flat year over year at $2.48 billion as of March 31, 2023.

Deposits

Total deposits were $2.53 billion as of March 31, 2024, which were flat compared to December 31, 2023. Relative to the first quarter of 2023, Total deposits increased 5.9% from $2.39 billion as of March 31, 2023, driven primarily by Interest-bearing deposits due to new and expanded deposit relationships.

Borrowings

Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $69.5 million as of March 31, 2024, a decrease of $56.2 million from $125.7 million as of December 31, 2023. Relative to the first quarter of 2023, borrowings decreased $191.9 million from $261.4 million as of March 31, 2023. The change in borrowings from December 31, 2023 and March 31, 2023 is driven by a $31.0 million repayment of a Bank Term Funding Program loan that matured in March 2024. The change when compared to March 31, 2023 was also driven by a decline in FHLB borrowing reliance as a result of increased deposits.

Subordinated notes were $52.4 million as of March 31, 2024, compared to $52.3 million as of December 31, 2023. Subordinated notes increased $0.2 million from $52.2 million as of March 31, 2023.

Assets Under Management

Assets Under Management ("AUM") increased by $388.5 million during the first quarter to $7.14 billion as of March 31, 2024, compared to $6.75 billion as of December 31, 2023. This increase was primarily attributable to an increase in market values throughout the first quarter of 2024, resulting in an increase in the value of AUM balances. Total AUM increased by $759.4 million compared to March 31, 2023 from $6.38 billion, which was primarily attributable to improving market conditions year-over-year resulting in an increase in the value of AUM.

Credit Quality

Non-performing assets totaled $46.0 million, or 1.57% of total assets, as of March 31, 2024, compared to $51.1 million, or 1.72% of total assets, as of December 31, 2023. The decrease is primarily due to the sale of a non-performing Construction and Development note at a gain, a large principal payment received on a Cash, securities and other note offset partially by one new Non-performing Commercial and Industrial loan. As of March 31, 2023, non-performing assets totaled $12.5 million, or 0.42% of total assets. Relative to the first quarter of 2023, the increase in non-performing assets was due to the net addition of $33.5 million in loans added throughout 2023.

During the first quarter of 2024 the Company recorded a provision expense of $0.1 million, compared to a provision expense of $8.5 million in the fourth quarter of 2023 and a $0.3 million release to its provision in the first quarter of 2023. The decrease in provision expense recorded in the first quarter of 2024 compared to fourth quarter of 2023 reflects a Commercial and Industrial loan where the borrower filed for bankruptcy resulting in a charge-off of the entire loan balance during the fourth quarter of 2023.

Capital

As of March 31, 2024, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. As of March 31, 2024, the Bank was classified as “well capitalized,” as summarized in the following table:

	March 31,
	2024
Consolidated Capital
Tier 1 capital to risk-weighted assets	9.77	%
Common Equity Tier 1 ("CET1") to risk-weighted assets	9.77
Total capital to risk-weighted assets	13.15
Tier 1 capital to average assets	7.73
Bank Capital
Tier 1 capital to risk-weighted assets	11.00
CET1 to risk-weighted assets	11.00
Total capital to risk-weighted assets	12.02
Tier 1 capital to average assets	8.70

Book value per common share increased 0.8% from $25.33 as of December 31, 2023 to $25.52 as of March 31, 2024. Book value per common share increased 1.2% from $25.22 as of March 31, 2023.

Tangible book value per common share⁽¹⁾ increased 0.9% from $22.01 as of December 31, 2023, to $22.21 as of March 31, 2024. Tangible book value per common share increased 1.5% from $21.85 as of March 31, 2023.

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Conference Call, Webcast and Slide Presentation

The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00 p.m. ET on Friday, April 19, 2024. Telephone access: https://register.vevent.com/register/BId5870626426740ff9c585b6c315ea36c.

A slide presentation relating to the fourth quarter 2024 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of the Company’s investor relations website at https://myfw.gcs-web.com.

About First Western

First Western is a financial services holding company headquartered in Denver, Colorado, with operations in Colorado, Arizona, Wyoming, California, and Montana. First Western and its subsidiaries provide a fully integrated suite of wealth management services on a private trust bank platform, which includes a comprehensive selection of deposit, loan, trust, wealth planning and investment management products and services. First Western’s common stock is traded on the Nasdaq Global Select Market under the symbol “MYFW.” For more information, please visit www.myfw.com.

Non-GAAP Financial Measures

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include “Tangible Common Equity,” “Tangible Common Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency Ratio,” “Gross Revenue,” and “Allowance for Credit Losses to Adjusted Loans". The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliation of non-GAAP financial measures, to GAAP financial measures are provided at the end of this press release.

Forward-Looking Statements

Statements in this news release regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “position,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “opportunity,” “could,” or “may.” The forward-looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, without limitation, the lack of soundness of other financial institutions or financial market utilities may adversely affect the Company; the Company’s ability to engage in routine funding and other transactions could be adversely affected by the actions and commercial soundness of other financial institutions; financial institutions are interrelated because of trading, clearing, counterparty or other relationships; defaults by, or even rumors or questions about, one or more financial institutions or financial market utilities, or the financial services industry generally, may lead to market-wide liquidity problems and losses of client, creditor and counterparty confidence and could lead to losses or defaults by other financial institutions, or the Company; integration risks and projected cost savings in connection with acquisitions; the risk of geographic concentration in Colorado, Arizona, Wyoming, California, and Montana; the risk of changes in the economy affecting real estate values and liquidity; the risk in our ability to continue to originate residential real estate loans and sell such loans; risks specific to commercial loans and borrowers; the risk of claims and litigation pertaining to our fiduciary responsibilities; the risk of competition for investment managers and professionals; the risk of fluctuation in the value of our investment securities; the risk of changes in interest rates; and the risk of the adequacy of our allowance for credit losses and the risk in our ability to maintain a strong core deposit base or other low-cost funding sources. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 15, 2024 (“Form 10-K”), and other documents we file with the SEC from time to time. We urge readers of this news release to review the “Risk Factors” section our Form 10-K and any updates to those risk factors set forth in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our other filings with the SEC. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today’s date, or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Contacts:
Financial Profiles, Inc.
Tony Rossi
310-622-8221
MYFW@finprofiles.com
IR@myfw.com

First Western Financial, Inc.
Condensed ConsolidatedStatements of Income (unaudited)
	Three Months Ended
	March 31,				December 31,				March 31,
(Dollars in thousands, except per share amounts)	2024				2023				2023
Interest and dividend income:
Loans, including fees	$	35,139			$	35,625			$	32,080
Loans accounted for under the fair value option		209				257				427
Investment securities		603				600				629
Interest-bearing deposits in other financial institutions		2,352				1,350				1,403
Dividends, restricted stock		95				161				173
Total interest and dividend income		38,398				37,993				34,712
Interest expense:
Deposits		20,622				19,037				13,092
Other borrowed funds		1,706				2,625				2,047
Total interest expense		22,328				21,662				15,139
Net interest income		16,070				16,331				19,573
Less: provision/(release) for credit losses		72				8,493				(310	)
Net interest income, after provision/(release) for credit losses		15,998				7,838				19,883
Non-interest income:
Trust and investment management fees		4,930				4,705				4,635
Net gain on mortgage loans		1,264				379				1,019
Net gain/(loss) on loans held for sale		117				—				(178	)
Bank fees		891				412				592
Risk management and insurance fees		49				544				127
Income on company-owned life insurance		105				101				90
Net loss on loans accounted for under the fair value option		(302	)			(91	)			(543	)
Unrealized (loss)/gain recognized on equity securities		(6	)			(2	)			10
Other		229				33				54
Total non-interest income		7,277				6,081				5,806
Total income before non-interest expense		23,275				13,919				25,689
Non-interest expense:
Salaries and employee benefits		11,267				9,988				13,098
Occupancy and equipment		1,976				1,937				1,914
Professional services		2,411				1,990				1,923
Technology and information systems		1,010				928				832
Data processing		948				1,189				1,139
Marketing		194				415				391
Amortization of other intangible assets		57				62				64
Other		1,833				1,767				1,167
Total non-interest expense		19,696				18,276				20,528
Income/(loss) before income taxes		3,579				(4,357	)			5,161
Income tax (benefit)/expense		1,064				(1,138	)			1,341
Net income/(loss) available to common shareholders	$	2,515			$	(3,219	)		$	3,820
Earnings/(loss) per common share:
Basic	$	0.26			$	(0.34	)		$	0.40
Diluted		0.26				(0.34	)			0.39

First Western Financial, Inc.
CondensedConsolidatedBalance Sheets (unaudited)
	March 31,				December 31,				March 31,
(Dollars in thousands)	2024				2023				2023
Assets
Cash and cash equivalents:
Cash and due from banks	$	8,136			$	7,284			$	6,920
Interest-bearing deposits in other financial institutions		249,753				247,158				288,147
Total cash and cash equivalents		257,889				254,442				295,067
Held-to-maturity securities (fair value of $64,908, $66,617 and $73,570, respectively), net of allowance for credit losses of $71		72,303				74,102				79,565
Correspondent bank stock, at cost		4,461				7,155				13,222
Mortgage loans held for sale, at fair value		10,470				7,254				9,873
Loans (includes $11,922, $13,726, and $20,807 measured at fair value, respectively)		2,475,524				2,530,915				2,469,038
Allowance for credit losses		(24,630	)			(23,931	)			(19,843	)
Loans, net		2,450,894				2,506,984				2,449,195
Premises and equipment, net		24,869				25,256				25,383
Accrued interest receivable		11,919				11,428				10,976
Accounts receivable		4,980				5,095				4,713
Other receivables		5,254				4,467				2,396
Goodwill and other intangible assets, net		31,797				31,854				32,040
Deferred tax assets, net		5,695				6,407				6,792
Company-owned life insurance		16,635				16,530				16,242
Other assets		35,051				24,488				23,043
Total assets	$	2,932,217			$	2,975,462			$	2,968,507
Liabilities
Deposits:
Noninterest-bearing	$	434,236			$	482,579			$	545,064
Interest-bearing		2,097,734				2,046,460				1,846,863
Total deposits		2,531,970				2,529,039				2,391,927
Borrowings:
Federal Home Loan Bank and Federal Reserve borrowings		69,484				125,711				261,385
Subordinated notes		52,397				52,340				52,167
Accrued interest payable		2,415				3,793				1,786
Other liabilities		30,423				21,841				21,420
Total liabilities		2,686,689				2,732,724				2,728,685
Shareholders’ Equity
Total shareholders’ equity		245,528				242,738				239,822
Total liabilities and shareholders’ equity	$	2,932,217			$	2,975,462			$	2,968,507

First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
	March 31,				December 31,				March 31,
(Dollars in thousands)	2024				2023				2023
Loan Portfolio
Cash, Securities, and Other(1)	$	151,178			$	140,053			$	157,308
Consumer and Other		18,556				27,446				22,183
Construction and Development		333,284				347,515				283,999
1-4 Family Residential		910,129				925,984				889,782
Non-Owner Occupied CRE		562,862				546,966				536,679
Owner Occupied CRE		194,338				197,205				223,449
Commercial and Industrial		297,573				336,842				340,632
Total		2,467,920				2,522,011				2,454,032
Loans accounted for under the fair value option		12,276				14,129				21,052
Total loans held for investment		2,480,196				2,536,140				2,475,084
Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net(2)		(4,672	)			(5,225	)			(6,046	)
Loans (includes $11,922, $13,726, and $20,807 measured at fair value, respectively)	$	2,475,524			$	2,530,915			$	2,469,038
Mortgage loans held for sale		10,470				7,254				9,873
Deposit Portfolio
Money market deposit accounts	$	1,503,598			$	1,386,149			$	1,277,988
Time deposits		442,834				496,452				354,545
Negotiable order of withdrawal accounts		132,415				147,488				192,011
Savings accounts		18,887				16,371				22,319
Total interest-bearing deposits		2,097,734				2,046,460				1,846,863
Noninterest-bearing accounts		434,236				482,579				545,064
Total deposits	$	2,531,970			$	2,529,039			$	2,391,927

____________________
⁽¹⁾ Includes PPP loans of $3.8 million as of March 31, 2024, $4.3 million as of December 31, 2023, and $6.1 million as of March 31, 2023.
⁽²⁾ Includes fair value adjustments on loans held for investment accounted for under the fair value option.

First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
	As of or for the Three Months Ended
	March 31,				December 31,				March 31,
(Dollars in thousands)	2024				2023				2023
Average Balance Sheets
Assets
Interest-earning assets:
Interest-bearing deposits in other financial institutions	$	177,523			$	104,789			$	127,608
Investment securities		74,666				76,331				82,106
Correspondent bank stock		4,451				7,576				9,592
Loans		2,490,300				2,521,532				2,456,922
Mortgage loans held for sale		6,752				9,915				7,521
Loans held at fair value		13,134				14,755				22,722
Total interest-earning assets		2,766,826				2,734,898				2,706,471
Allowance for credit losses		(23,974	)			(23,308	)			(20,325	)
Noninterest-earning assets		124,144				126,132				125,201
Total assets	$	2,866,996			$	2,837,722			$	2,811,347
Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,008,246			$	1,914,856			$	1,805,994
FHLB and Federal Reserve borrowings		92,195				139,316				142,642
Subordinated notes		52,360				52,299				52,135
Total interest-bearing liabilities		2,152,801				2,106,471				2,000,771
Noninterest-bearing liabilities:
Noninterest-bearing deposits		446,457				456,787				545,670
Other liabilities		22,250				25,387				26,206
Total noninterest-bearing liabilities		468,707				482,174				571,876
Total shareholders’ equity		245,488				249,077				238,700
Total liabilities and shareholders’ equity	$	2,866,996			$	2,837,722			$	2,811,347
Yields/Cost of funds (annualized)
Interest-bearing deposits in other financial institutions		5.33	%			5.11	%			4.46	%
Investment securities		3.25				3.12				3.11
Correspondent bank stock		8.58				8.43				7.31
Loans		5.66				5.58				5.28
Loan held at fair value		6.40				6.91				7.62
Mortgage loans held for sale		6.79				6.60				6.04
Total interest-earning assets		5.58				5.51				5.20
Interest-bearing deposits		4.13				3.94				2.94
Total deposits		3.38				3.18				2.26
FHLB and Federal Reserve borrowings		4.23				5.36				3.89
Subordinated notes		5.66				5.63				5.38
Total interest-bearing liabilities		4.17				4.08				3.07
Net interest margin		2.34				2.37				2.93
Net interest rate spread		1.41				1.43				2.13

First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
	As of or for the Three Months Ended
	March 31,				December 31,				March 31,
(Dollars in thousands, except share and per share amounts)	2024				2023				2023
Asset Quality
Non-performing loans	$	46,044			$	51,125			$	12,460
Non-performing assets		46,044				51,125				12,460
Net charge-offs		—				8,595				5
Non-performing loans to total loans		1.86	%			2.02	%			0.50	%
Non-performing assets to total assets		1.57				1.72				0.42
Allowance for credit losses to non-performing loans		53.49				46.81				159.25
Allowance for credit losses to total loans		1.00				0.95				0.81
Allowance for credit losses to adjusted loans(1)		1.00				0.95				0.81
Net charge-offs to average loans		—				0.34				*
Assets Under Management	$	7,141,453			$	6,752,981			$	6,382,036
Market Data
Book value per share at period end		25.52				25.33				25.22
Tangible book value per common share(1)		22.21				22.01				21.85
Weighted average outstanding shares, basic		9,621,309				9,572,582				9,503,715
Weighted average outstanding shares, diluted		9,710,764				9,572,582				9,732,674
Shares outstanding at period end		9,621,309				9,581,183				9,507,564
Consolidated Capital
Tier 1 capital to risk-weighted assets		9.77	%			9.40	%			9.28	%
CET1 to risk-weighted assets		9.77				9.40				9.28
Total capital to risk-weighted assets		13.15				12.59				12.39
Tier 1 capital to average assets		7.73				7.77				7.75
Bank Capital
Tier 1 capital to risk-weighted assets		11.00				10.54				10.29
CET1 to risk-weighted assets		11.00				10.54				10.29
Total capital to risk-weighted assets		12.02				11.45				11.12
Tier 1 capital to average assets		8.70				8.71				8.59

____________________
⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.
* Value results in an immaterial amount.

First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
Reconciliations of Non-GAAP Financial Measures
	As of or for the Three Months Ended
	March 31,				December 31,				March 31,
(Dollars in thousands, except share and per share amounts)	2024				2023				2023
Tangible Common
Total shareholders' equity	$	245,528			$	242,738			$	239,822
Less: goodwill and other intangibles, net		31,797				31,854				32,040
Tangible common equity	$	213,731			$	210,884			$	207,782
Common shares outstanding, end of period		9,621,309				9,581,183				9,507,564
Tangible common book value per share	$	22.21			$	22.01			$	21.85
Net income/(loss) available to common shareholders		2,515				(3,219	)			3,820
Return on tangible common equity (annualized)		4.71	%			(6.11	)%			7.35	%
Efficiency
Non-interest expense	$	19,696			$	18,276			$	20,528
Less: amortization		57				62				64
Adjusted non-interest expense	$	19,639			$	18,214			$	20,464
Total income before non-interest expense	$	23,275			$	13,919			$	25,689
Less: unrealized (loss)/gain recognized on equity securities		(6	)			(2	)			10
Less: net loss on loans accounted for under the fair value option		(302	)			(91	)			(543	)
Less: net gain/(loss) on loans held for sale at fair value		117				—				(178	)
Plus: provision/(release) for credit losses		72				8,493				(310	)
Gross revenue	$	23,538			$	22,505			$	26,090
Efficiency ratio		83.44	%			80.93	%			78.44	%
Allowance for Credit Loss to Adjusted Loans
Total loans held for investment		2,480,196				2,536,140				2,475,084
Less: PPP loans		3,779				4,343				6,100
Less: loans accounted for under fair value		12,276				14,129				21,052
Adjusted loans	$	2,464,141			$	2,517,668			$	2,447,932
Allowance for credit losses	$	24,630			$	23,931			$	19,843
Allowance for credit losses to adjusted loans		1.00	%			0.95	%			0.81	%