Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2024

FIRST WESTERN FINANCIAL, INC.

(Exact name of registrant as specified in its charter)


Colorado	001-38595	37-1442266
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

1900 16th Street, Suite 1200 Denver, Colorado		80202
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 303.531.8100

Former name or former address, if changed since last report: Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


o			Emerging growth company

o			If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	MYFW	NASDAQ Stock Market LLC

Item 2.02 Results of Operations and Financial Condition.

On July 23, 2024, First Western Financial, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 and is incorporated by reference herein.

The information in this Item 2.02, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.

Item 7.01 Regulation FD Disclosure.

The Company intends to hold an investor call and webcast to discuss its financial results for the second quarter ended June 30, 2024 on Wednesday, July 24, 2024, at 10:00 a.m. Mountain Time. The Company’s presentation to analysts and investors contains additional information about the Company’s financial results for the second quarter ended June 30, 2024 and is furnished as Exhibit 99.2 and is incorporated by reference herein.

The information in this Item 7.01, including Exhibit 99.2, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit Number						Description

99.1						Press Release issued by First Western Financial, Inc. dated July 23, 2024
99.2						First Western Financial, Inc. Earnings Presentation
104						Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


						FIRST WESTERN FINANCIAL, INC.


Date: July 23, 2024						By: /s/ Scott C. Wylie
						Scott C. Wylie

						Chairman, Chief Executive Officer and President

Exhibit 99.1

First Western Reports Second Quarter 2024 Financial Results

Second Quarter 2024 Summary

•Book value per common share increased 0.1% from $25.52 in Q1 2024 to $25.55 in Q2 2024. Tangible book value per common share(1) increased 0.2% from $22.21 in Q1 2024 to $22.27 in Q2 2024

•Net interest margin stabilized during the quarter, with a slight increase of 1 basis point from 2.34% in Q1 2024 to 2.35% in Q2 2024

•Net income available to common shareholders of $1.1 million in Q2 2024, compared to $2.5 million in Q1 2024

•Diluted earnings per share of $0.11 in Q2 2024, compared to $0.26 in Q1 2024

•Total capital to risk-weighted assets ratio of 13.44% in Q2 2024, compared to 13.15% in Q1 2024

Denver, Colo., July 23, 2024 – First Western Financial, Inc. (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the second quarter ended June 30, 2024.

Net income available to common shareholders was $1.1 million, or $0.11 per diluted share, for the second quarter of 2024. This compares to net income of $2.5 million, or $0.26 per diluted share, for the first quarter of 2024, and net income of $1.5 million, or $0.16 per diluted share, for the second quarter of 2023.

Scott C. Wylie, CEO of First Western, commented, "During the second quarter, we continued to prioritize prudent risk management and a conservative approach to new loan production, which resulted in our balance sheet remaining relatively flat in the quarter. We also continued to execute well on our strategic priorities including maintaining disciplined expense control, adding new deposit relationships, and generating strong contributions of non-interest income from our wealth management and mortgage banking businesses, which combined with our prudent balance sheet management resulted in a further increase in our tangible book value per share. Our performance grew stronger as we moved through the quarter with increases in both loans and deposits in June and an increase in our net interest margin.

“We are benefiting from the strength of the franchise we have built to upgrade our banking talent throughout our markets as we fill open positions. These new additions, along with strong execution across our entire organization on our business development initiatives, are positively impacting our pipelines in all areas of our business including loans, deposits, mortgage banking, and investment management. Based on the positive trends we are currently seeing, we expect to generate a higher level of profitability in the second half of the year, while also continuing to make investments in talent and technology that will further enhance our ability to generate profitable growth in the future,” said Mr. Wylie.


	For the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except per share data)	2024			2024			2023
Earnings Summary
Net interest income	$	15,778		$	16,070		$	18,435
Provision for credit losses	2,334			72			1,843
Total non-interest income	6,972			7,277			3,962
Total non-interest expense	19,001			19,696			18,519
Income before income taxes	1,415			3,579			2,035
Income tax expense	339			1,064			529
Net income available to common shareholders	1,076			2,515			1,506

Basic earnings per common share	0.11			0.26			0.16

Diluted earnings per common share	0.11			0.26			0.16


Return on average assets (annualized)	0.15		%	0.35		%	0.21		%

Return on average shareholders' equity (annualized)	1.73			4.10			2.49

Return on tangible common equity (annualized)(1)	2.00			4.71			2.86

Net interest margin	2.35			2.34			2.73
Efficiency ratio(1)	82.13			83.44			74.48

____________________

(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 Second Quarter 2024

Revenue

Total income before non-interest expense was $20.4 million for the second quarter of 2024, compared to $23.3 million for the first quarter of 2024. Gross revenue(1) was $23.1 million for the second quarter of 2024, compared to $23.5 million for the first quarter of 2024. The decrease in total income before non-interest expense was primarily driven by an increase in Provision for credit losses. Relative to the second quarter of 2023, total income before non-interest expense decreased 0.7% from $20.6 million. Gross revenue decreased 6.9% from $24.8 million for the second 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 and Net mortgage gains.

(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 second quarter of 2024 was $15.8 million, a decrease of 1.9% from $16.1 million in the first quarter of 2024. The decrease quarter over quarter was primarily driven by a decline in interest-bearing deposits in other financial institutions. Relative to the second quarter of 2023, net interest income decreased 14.1% from $18.4 million. The decrease compared to the prior year was 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 second quarter of 2024 increased 1 basis point to 2.35% from 2.34% reported in the first quarter of 2024, primarily due to higher loan yields offset partially by continued pricing pressure on interest-bearing deposits and an unfavorable mix shift in the deposit portfolio.

The yield on interest-earning assets increased 9 basis points to 5.67% in the second quarter of 2024 from 5.58% in the first quarter of 2024 and the cost of interest-bearing deposits increased 6 basis points to 4.19% in the second quarter of 2024 from 4.13% in the first quarter of 2024.

Relative to the second quarter of 2023, net interest margin decreased from 2.73%, primarily due to pricing pressure on interest-bearing deposits and an unfavorable mix shift in the deposit portfolio, offset partially by higher loan yields.

Non-interest Income

Non-interest income for the second quarter of 2024 was $7.0 million compared to $7.3 million in the first quarter of 2024. The decrease was primarily driven by higher loan prepayment penalties impacting Bank fees during the first quarter of 2024, partially offset by higher Net gain on mortgage loans due to higher origination volume.

Relative to the second quarter of 2023, non-interest income increased 76.0% from $4.0 million. Increases were driven primarily by an increase in net gain on mortgage loans, a decrease in net loss on loans accounted for under the fair value option and a decrease in other non-interest loss which included an asset impairment write down in second quarter of 2023.

Non-interest Expense

Non-interest expense for the second quarter of 2024 was $19.0 million compared to $19.7 million for the first quarter of 2024. The decrease was driven by a decrease in legal fees and fraud losses.

Relative to the second quarter of 2023, non-interest expense increased 2.6% from $18.5 million, driven primarily by technology enhancements and an increase in occupancy costs.

The Company’s efficiency ratio(1) was 82.1% in the second quarter of 2024, compared with 83.4% in the first quarter of 2024 and 74.5% in the second 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 $0.3 million for the second quarter of 2024, compared to Income tax expense of $1.1 million for the first quarter of 2024 and $0.5 million for the second quarter of 2023. The decrease was attributable to the decrease in Income before income taxes.

Loans

Total loans held for investment were $2.46 billion as of June 30, 2024, a decrease of 0.8% from $2.48 billion as of March 31, 2024. The decline was due to a net decrease in the construction, cash, securities and other, and commercial and industrial portfolios offset partially by net growth in the commercial real estate portfolio. Relative to the second quarter of 2023, total loans held for investment decreased 1.6% year over year compared to $2.50 billion as of June 30, 2023.

Deposits

Total deposits were $2.41 billion as of June 30, 2024, compared to $2.53 billion as of March 31, 2024. The decrease was driven primarily by seasonal tax payments, operating account fluctuations and clients using liquidity for strategic investments. Relative to the second quarter of 2023, total deposits increased from $2.38 billion as of June 30, 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 a combined $191.5 million as of June 30, 2024, an increase of $122.0 million from $69.5 million as of March 31, 2024. The change when compared to March 31, 2024 was driven by an increase in FHLB borrowing due to the deposit runoff that occurred in the quarter. Relative to the second quarter of 2023, borrowings decreased $121.1 million from $312.6 million as of June 30, 2023. The change in FHLB borrowings from June 30, 2023 is driven by an increase in deposits, decrease in loans, and a decrease in excess liquidity that had been carried on the balance sheet as a result of the banking crisis in early 2023.

Subordinated notes were $52.5 million as of June 30, 2024, compared to $52.4 million as of March 31, 2024. Subordinated notes increased $0.3 million from $52.2 million as of June 30, 2023.

Assets Under Management

Assets Under Management (“AUM”) decreased during the second quarter to $7.01 billion as of June 30, 2024, compared to $7.14 billion as of March 31, 2024. The decrease in AUM during the quarter was driven by asset withdrawals in custody accounts that have minimal impact on Trust and Investment Management fees. Total AUM increased by $0.51 million compared to June 30, 2023 from $6.50 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 $49.3 million, or 1.68% of total assets, as of June 30, 2024, compared to $46.0 million, or 1.57% of total assets, as of March 31, 2024. The increase was primarily due to the foreclosure on two properties used as collateral for one participated loan balance, which increased OREO by a greater amount than the resulting decrease in non-performing loans. As of June 30, 2023, non-performing assets totaled $10.3 million, or 0.34% of total assets. Relative to the second quarter of 2023, the increase in non-performing assets was due to the net addition of $36.9 million in loans added throughout 2023, due primarily to the addition of one large loan relationship.

During the second quarter of 2024 the Company recorded a provision expense of $2.3 million, compared to a provision expense of $0.1 million in the first quarter of 2024 and $1.8 million in the second quarter of 2023. The increase in provision expense recorded in the second quarter of 2024 compared to first quarter of 2024 was primarily driven by increased provision on individually analyzed loans.

Capital

As of June 30, 2024, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. As of June 30, 2024, the Bank was classified as “well capitalized,” as summarized in the following table:


	June 30,
	2024
Consolidated Capital
Tier 1 capital to risk-weighted assets	9.92	%
Common Equity Tier 1 ("CET1") to risk-weighted assets	9.92
Total capital to risk-weighted assets	13.44
Tier 1 capital to average assets	7.91

Bank Capital
Tier 1 capital to risk-weighted assets	11.22	%
CET1 to risk-weighted assets	11.22
Total capital to risk-weighted assets	12.35
Tier 1 capital to average assets	8.95

Book value per common share increased 0.1% from $25.52 as of March 31, 2024 to $25.55 as of June 30, 2024. Book value per common share increased 0.7% from $25.38 as of June 30, 2023.

Tangible book value per common share(1) increased 0.2% from $22.21 as of March 31, 2024, to $22.27 as of June 30, 2024. Tangible book value per common share increased 1.1% from $22.03 as of June 30, 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 Wednesday, July 24, 2024. Telephone access: https://register.vevent.com/register/BI9009534197b84a16957a4d26aa92a1fe.

A slide presentation relating to the second 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 Consolidated Statements of Income (unaudited)


	Three Months Ended
	June 30,		March 31,		June 30,
(Dollars in thousands, except per share amounts)	2024		2024		2023
Interest and dividend income:
Loans, including fees	$	35,275	$	35,139	$	33,583
Loans accounted for under the fair value option	168		209		351
Investment securities	651		603		627
Interest-bearing deposits in other financial institutions	1,855		2,352		1,666
Dividends, restricted stock	105		95		145
Total interest and dividend income	38,054		38,398		36,372

Interest expense:
Deposits	20,848		20,622		15,864
Other borrowed funds	1,428		1,706		2,073
Total interest expense	22,276		22,328		17,937
Net interest income	15,778		16,070		18,435
Less: provision for credit losses	2,334		72		1,843
Net interest income, after provision for credit losses	13,444		15,998		16,592

Non-interest income:
Trust and investment management fees	4,875		4,930		4,602
Net gain on mortgage loans	1,820		1,264		774
Net gain on loans held for sale	—		117		—
Bank fees	327		891		591
Risk management and insurance fees	109		49		103
Income on company-owned life insurance	106		105		91
Net loss on loans accounted for under the fair value option	(315)		(302)		(1,124)
Unrealized loss recognized on equity securities	(2)		(6)		(11)

Other	52		229		(1,064)
Total non-interest income	6,972		7,277		3,962
Total income before non-interest expense	20,416		23,275		20,554

Non-interest expense:
Salaries and employee benefits	11,097		11,267		11,148
Occupancy and equipment	2,080		1,976		1,939
Professional services	1,826		2,411		1,858
Technology and information systems	1,042		1,010		831
Data processing	1,101		948		1,052
Marketing	243		194		379
Amortization of other intangible assets	56		57		62


Other	1,556		1,833		1,250
Total non-interest expense	19,001		19,696		18,519
Income before income taxes	1,415		3,579		2,035
Income tax expense	339		1,064		529
Net income available to common shareholders	$	1,076	$	2,515	$	1,506
Earnings per common share:
Basic	$	0.11	$	0.26	$	0.16
Diluted	0.11		0.26		0.16

First Western Financial, Inc.

Condensed Consolidated Balance Sheets (unaudited)


	June 30,		March 31,		June 30,
(Dollars in thousands)	2024		2024		2023
Assets
Cash and cash equivalents:
Cash and due from banks	$	6,374	$	8,136	$	6,285

Interest-bearing deposits in other financial institutions	239,425		249,753		291,283
Total cash and cash equivalents	245,799		257,889		297,568

Held-to-maturity securities (fair value of $71,067, $64,908 and $69,551, respectively), net of allowance for credit losses of $71	78,927		72,303		77,469
Correspondent bank stock, at cost	10,804		4,461		13,518
Mortgage loans held for sale, at fair value	26,856		10,470		19,746

Loans (includes $10,190, $11,922, and $20,807 measured at fair value, respectively)	2,456,063		2,475,524		2,495,582
Allowance for credit losses	(27,319)		(24,630)		(22,044)
Loans, net	2,428,744		2,450,894		2,473,538
Premises and equipment, net	24,657		24,869		25,473
Accrued interest receivable	11,339		11,919		11,135
Accounts receivable	5,118		4,980		5,116
Other receivables	4,875		5,254		3,331
Other real estate owned, net	11,421		—		—
Goodwill and other intangible assets, net	31,741		31,797		31,977
Deferred tax assets, net	6,123		5,695		7,202
Company-owned life insurance	16,741		16,635		16,333
Other assets	34,410		35,051		23,240

Total assets	$	2,937,555	$	2,932,217	$	3,005,646

Liabilities
Deposits:
Noninterest-bearing	$	396,702	$	434,236	$	514,241
Interest-bearing	2,014,190		2,097,734		1,861,153
Total deposits	2,410,892		2,531,970		2,375,394
Borrowings:
Federal Home Loan Bank and Federal Reserve borrowings	191,505		69,484		312,600
Subordinated notes	52,451		52,397		52,223
Accrued interest payable	2,243		2,415		1,788
Other liabilities	33,589		30,423		21,399
Total liabilities	2,690,680		2,686,689		2,763,404

Shareholders’ Equity
Total shareholders’ equity	246,875		245,528		242,242
Total liabilities and shareholders’ equity	$	2,937,555	$	2,932,217	$	3,005,646

First Western Financial, Inc.

Consolidated Financial Summary (unaudited)


	June 30,		March 31,		June 30,
(Dollars in thousands)	2024		2024		2023
Loan Portfolio
Cash, Securities, and Other(1)	$	143,720	$	151,178	$	150,679
Consumer and Other	15,645		18,556		21,866
Construction and Development	309,146		333,284		313,227
1-4 Family Residential	904,569		910,129		878,670
Non-Owner Occupied CRE	609,790		562,862		561,880
Owner Occupied CRE	189,353		194,338		218,651
Commercial and Industrial	277,973		297,573		338,679
Total	2,450,196		2,467,920		2,483,652
Loans accounted for under the fair value option	10,494		12,276		18,274
Total loans held for investment	2,460,690		2,480,196		2,501,926
Deferred (fees) costs and unamortized premiums/(unaccreted discounts), net(2)	(4,627)		(4,672)		(6,344)
Loans (includes $10,190, $11,922, and $20,807 measured at fair value, respectively)	$	2,456,063	$	2,475,524	$	2,495,582
Mortgage loans held for sale	26,856		10,470		19,746


Deposit Portfolio
Money market deposit accounts	$	1,342,753	$	1,503,598	$	1,297,732
Time deposits	519,597		442,834		376,147
Negotiable order of withdrawal accounts	135,759		132,415		168,537
Savings accounts	16,081		18,887		18,737
Total interest-bearing deposits	2,014,190		2,097,734		1,861,153
Noninterest-bearing accounts	396,702		434,236		514,241
Total deposits	$	2,410,892	$	2,531,970	$	2,375,394

____________________

(1) Includes PPP loans of $3.1 million as of June 30, 2024, $3.8 million as of March 31, 2024, and $5.6 million as of June 30, 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
	June 30,			March 31,			June 30,
(Dollars in thousands)	2024			2024			2023
Average Balance Sheets
Assets
Interest-earning assets:
Interest-bearing deposits in other financial institutions	$	141,600		$	177,523		$	135,757

Investment securities	75,461			74,666			80,106
Correspondent bank stock	4,801			4,451			8,844
Loans	2,443,937			2,490,300			2,451,762
Mortgage loans held for sale	20,254			6,752			15,841
Loans held at fair value	11,314			13,134			19,825
Total interest-earning assets	2,697,367			2,766,826			2,712,135
Allowance for credit losses	(24,267)			(23,974)			(20,077)
Noninterest-earning assets	143,514			124,144			124,561
Total assets	$	2,816,614		$	2,866,996		$	2,816,619

Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	2,001,691		$	2,008,246		$	1,847,788
FHLB and Federal Reserve borrowings	67,196			92,195			123,578
Subordinated notes	52,414			52,360			52,186
Total interest-bearing liabilities	2,121,301			2,152,801			2,023,552
Noninterest-bearing liabilities:
Noninterest-bearing deposits	412,741			446,457			527,562
Other liabilities	34,051			22,250			23,850
Total noninterest-bearing liabilities	446,792			468,707			551,412
Total shareholders’ equity	248,521			245,488			241,655
Total liabilities and shareholders’ equity	$	2,816,614		$	2,866,996		$	2,816,619

Yields/Cost of funds (annualized)
Interest-bearing deposits in other financial institutions	5.27		%	5.33		%	4.92		%
Investment securities	3.47			3.25			3.14
Correspondent bank stock	8.80			8.58			6.58
Loans	5.75			5.66			5.46
Loan held at fair value	5.97			6.40			7.10
Mortgage loans held for sale	6.83			6.79			5.82
Total interest-earning assets	5.67			5.58			5.38
Interest-bearing deposits	4.19			4.13			3.44
Total deposits	3.47			3.38			2.68
FHLB and Federal Reserve borrowings	4.14			4.23			4.42
Subordinated notes	5.66			5.66			5.47
Total interest-bearing liabilities	4.22			4.17			3.56
Net interest margin	2.35			2.34			2.73
Net interest rate spread	1.45			1.41			1.82

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)


	As of or for the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except share and per share amounts)	2024			2024			2023
Asset Quality
Non-performing loans	$	37,909		$	46,044		$	10,273
Non-performing assets	49,330			46,044			10,273
Net (recoveries) charge-offs	(9)			—			8
Non-performing loans to total loans	1.54		%	1.86		%	0.41		%
Non-performing assets to total assets	1.68			1.57			0.34
Allowance for credit losses to non-performing loans	72.06			53.49			214.58
Allowance for credit losses to total loans	1.11			1.00			0.89
Allowance for credit losses to adjusted loans(1)	1.12			1.00			0.89
Net charge-offs to average loans	*			—			*

Assets Under Management	$	7,011,796		$	7,141,453		$	6,503,964

Market Data
Book value per share at period end	25.55			25.52			25.38
Tangible book value per common share(1)	22.27			22.21			22.03
Weighted average outstanding shares, basic	9,647,345			9,621,309			9,532,397
Weighted average outstanding shares, diluted	9,750,667			9,710,764			9,686,401
Shares outstanding at period end	9,660,549			9,621,309			9,545,071

Consolidated Capital
Tier 1 capital to risk-weighted assets	9.92		%	9.77		%	9.26		%
CET1 to risk-weighted assets	9.92			9.77			9.26
Total capital to risk-weighted assets	13.44			13.15			12.41
Tier 1 capital to average assets	7.91			7.73			7.80

Bank Capital
Tier 1 capital to risk-weighted assets	11.22			11.00			10.34
CET1 to risk-weighted assets	11.22			11.00			10.34
Total capital to risk-weighted assets	12.35			12.02			11.23
Tier 1 capital to average assets	8.95			8.70			8.70

____________________

(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
	June 30,			March 31,			June 30,
(Dollars in thousands, except share and per share amounts)	2024			2024			2023
Tangible Common
Total shareholders' equity	$	246,875		$	245,528		$	242,242
Less: goodwill and other intangibles, net	31,741			31,797			31,977
Tangible common equity	$	215,134		$	213,731		$	210,265

Common shares outstanding, end of period	9,660,549			9,621,309			9,545,071
Tangible common book value per share	$	22.27		$	22.21		$	22.03
Net income available to common shareholders	1,076			2,515			1,506
Return on tangible common equity (annualized)	2.00		%	4.71		%	2.86		%

Efficiency
Non-interest expense	$	19,001		$	19,696		$	18,519
Less: amortization	56			57			62

Adjusted non-interest expense	$	18,945		$	19,639		$	18,457

Total income before non-interest expense	$	20,416		$	23,275		$	20,554
Less: unrealized (loss)/gain recognized on equity securities	(2)			(6)			(11)
Less: net loss on loans accounted for under the fair value option	(315)			(302)			(1,124)

Less: impairment of contingent consideration assets	—			—			(1,249)
Less: net gain on loans held for sale at fair value	—			117			—

Plus: provision for credit losses	2,334			72			1,843
Gross revenue	$	23,067		$	23,538		$	24,781
Efficiency ratio	82.13		%	83.44		%	74.48		%

Allowance for Credit Loss to Adjusted Loans
Total loans held for investment	2,460,690			2,480,196			2,501,926

Less: PPP loans	3,129			3,779			5,558
Less: loans accounted for under fair value	10,494			12,276			18,274
Adjusted loans	$	2,447,067		$	2,464,141		$	2,478,094

Allowance for credit losses	$	27,319		$	24,630		$	22,044
Allowance for credit losses to adjusted loans	1.12		%	1.00		%	0.89		%

Second Quarter 2024 Conference Call

Safe Harbor 2 Statements in this presentation 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 presentation 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 presentation 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 presentation 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 presentation, 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.

157 180 196 164 166 168 62 94 111 154 161 132 122 125 129 76 78 86 255 255 255 Chart color Table color Special Headlines Slide Headlines / Text on light background Primary Colors Secondary Colors Primary Background / Call Out Boxes / Text on dark background Chart color Table Color Tertiary Colors Chart color Table Color Chart Color Chart Color Approved Fonts AaBbCc 123 Lora (bold) Slide Headlines / Special Headlines AaBbCc 123 Lato (regular, bold, italics) Body Copy / Subheadings / Small Text Descriptions 5 Loan Portfolio • Total loans held for investment decreased $19.5 million from prior quarter • Decrease due to limited new production that was more than offset by payoffs • New loan production improved in 2Q24 to $50 million with focus primarily on lending to clients that also bring deposits to the bank • Average rate on new loan production of 8.35% was higher than average rate of loans paying off and accretive to NIM 2Q23 1Q24 2Q24 Cash, Securities and Other $ 150,679 $ 151,178 $ 143,720 Consumer and Other 21,866 18,556 15,645 Construction and Development 313,227 333,284 309,146 1-4 Family Residential 878,670 910,129 904,569 Non-Owner Occupied CRE 561,880 562,862 609,790 Owner Occupied CRE 218,651 194,338 189,353 Commercial and Industrial 338,679 297,573 277,973 Total $ 2,483,652 $ 2,467,920 $ 2,450,196 Loans accounted for at fair value(2) 18,274 12,276 10,494 Total Loans HFI $ 2,501,926 $ 2,480,196 $ 2,460,690 Loans held-for-sale (HFS) 19,746 10,470 26,856 Total Loans $ 2,521,672 $ 2,490,666 $ 2,487,546 (1) Represents unpaid principal balance. Excludes deferred (fees) costs, and amortized premium/ (unaccreted discount). (2) Excludes fair value adjustments on loans accounted for under the fair value option. ($ in thousands, as of quarter end) Loan Portfolio Composition(1) Loan Portfolio Details Loan Production & Loan Payoffs Total Loans(1) $2,487 $2,515 2,546 2,510 2,476 2,491 2,487 2Q23 3Q23 4Q23 1Q24 2Q24 1Q24 2Q24 $0 $400 $800 $1,200 $1,600 $2,000 $2,400 $2,800 $3,200 Average Period End $54.8 $101.0 $51.5 $30.6 $49.5 $76.6 $122.3 $102.2 $100.0 $100.3 Production Loan Payoffs 2Q23 3Q23 4Q23 1Q24 2Q24 $0 $50 $100 $150 ($ in millions)

157 180 196 164 166 168 62 94 111 154 161 132 122 125 129 76 78 86 255 255 255 Chart color Table color Special Headlines Slide Headlines / Text on light background Primary Colors Secondary Colors Primary Background / Call Out Boxes / Text on dark background Chart color Table Color Tertiary Colors Chart color Table Color Chart Color Chart Color Approved Fonts AaBbCc 123 Lora (bold) Slide Headlines / Special Headlines AaBbCc 123 Lato (regular, bold, italics) Body Copy / Subheadings / Small Text Descriptions 13 Near-Term Outlook • Prudent risk management and conservative underwriting criteria expected to result in modest asset growth in 2024 until economic conditions improve • Deposit gathering will remain a top priority throughout the organization with increased focus on targeting deposit rich industries • Business development focus remains on full banking relationships with high quality clients who need multiple products and services First Western provides in banking, wealth management, and other areas • Upgrading of banking talent while filling open positions is having a positive impact on pipelines for loans, deposits, mortgage banking, and wealth management • Positive trends in business development, growing pipelines, and NIM expansion experienced in June expected to result in a higher level of profitability in second half of the year • Long-term approach to managing the Company will result in continued investment in talent and technology that will support continued profitable growth along with optimization of Wealth Management business to improve performance and business development • Continued progress on working through credits placed on non-performing status • Increase in TBV/share, capital ratios, and improvement in asset quality provides flexibility to consider additional options for capital utilization including stock repurchase following authorization • Strength of franchise and balance sheet enables First Western to continue capitalizing on our attractive markets to consistently add new clients, realize more operating leverage as we increase scale, generate profitable growth, and further enhance the long-term value of our franchise

Appendix 14

157 180 196 164 166 168 62 94 111 154 161 132 122 125 129 76 78 86 255 255 255 Chart color Table color Special Headlines Slide Headlines / Text on light background Primary Colors Secondary Colors Primary Background / Call Out Boxes / Text on dark background Chart color Table Color Tertiary Colors Chart color Table Color Chart Color Chart Color Approved Fonts AaBbCc 123 Lora (bold) Slide Headlines / Special Headlines AaBbCc 123 Lato (regular, bold, italics) Body Copy / Subheadings / Small Text Descriptions 16 Non-GAAP Reconciliation Consolidated Tangible Common Book Value Per Share As of, (Dollars in thousands) Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 March 31, 2024 June 30, 2024 Total shareholders' equity $ 127,678 $ 154,962 $ 219,041 $ 240,864 $ 242,738 $ 245,528 $ 246,875 Less: Goodwill and other intangibles, net 19,714 24,258 31,902 32,104 31,854 31,797 31,741 Intangibles held for sale(1) 3,553 — — — — — — Tangible common equity $ 104,411 $ 130,704 $ 187,139 $ 208,760 $ 210,884 $ 213,731 $ 215,134 Common shares outstanding, end of period 7,940,168 7,951,773 9,419,271 9,495,440 9,581,183 9,621,309 9,660,549 Tangible common book value per share $ 13.15 $ 16.44 $ 19.87 $ 21.99 $ 22.01 $ 22.21 $ 22.27 Net income available to common shareholders $ 1,076 Return on tangible common equity (annualized) 2.00 % (1) Represents the intangible portion of assets held for sale Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Non-interest expense $ 18,519 $ 18,314 $ 18,276 $ 19,696 $ 19,001 Less: amortization 62 62 62 57 56 Adjusted non-interest expense $ 18,457 $ 18,252 $ 18,214 $ 19,639 $ 18,945 Net interest income $ 18,435 $ 16,766 $ 16,331 $ 16,070 $ 15,778 Non-interest income 3,962 6,099 6,081 7,277 6,972 Less: unrealized gains/(losses) recognized on equity securities (11) (19) (2) (6) (2) Less: impairment of contingent consideration assets (1,249) — — — — Less: net gain/(loss) on loans accounted for under the fair value option (1,124) (252) (91) (302) (315) Less: net gain on equity interests — — — — — Less: net (loss)/gain on loans held for sale at fair value — — — 117 — Adjusted non-interest income $ 6,346 $ 6,370 $ 6,174 $ 7,468 $ 7,289 Total income $ 24,781 $ 23,136 $ 22,505 $ 23,538 $ 23,067 Efficiency ratio 74.48 % 78.89 % 80.93 % 83.44 % 82.13 %

157 180 196 164 166 168 62 94 111 154 161 132 122 125 129 76 78 86 255 255 255 Chart color Table color Special Headlines Slide Headlines / Text on light background Primary Colors Secondary Colors Primary Background / Call Out Boxes / Text on dark background Chart color Table Color Tertiary Colors Chart color Table Color Chart Color Chart Color Approved Fonts AaBbCc 123 Lora (bold) Slide Headlines / Special Headlines AaBbCc 123 Lato (regular, bold, italics) Body Copy / Subheadings / Small Text Descriptions 17 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Total income before non-interest expense $ 19,529 $ 21,647 $ 13,362 $ 21,890 $ 18,242 Less: unrealized gains/(losses) recognized on equity securities (11) (19) (2) (6) (2) Less: impairment of contingent consideration assets (1,249) — — — — Less: net gain/(loss) on loans accounted for under the fair value option (1,124) (252) (91) (302) (315) Less: net gain on equity interests — — — — — Less: net (loss)/gain on loans held for sale at fair value — — — 117 — Plus: (release) provision for credit loss 1,843 329 8,493 72 2,334 Gross revenue $ 23,756 $ 22,247 $ 21,948 $ 22,153 $ 20,893 Mortgage Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Total income before non-interest expense $ 1,025 $ 889 $ 557 $ 1,385 $ 2,174 Plus: provision for credit loss — — — — — Gross revenue $ 1,025 $ 889 $ 557 $ 1,385 $ 2,174 Consolidated Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Total income before non-interest expense $ 20,554 $ 22,536 $ 13,919 $ 23,275 $ 20,416 Less: unrealized gains/(losses) recognized on equity securities (11) (19) (2) (6) (2) Less: impairment of contingent consideration assets (1,249) — — — — Less: net gain/(loss) on loans accounted for under the fair value option (1,124) (252) (91) (302) (315) Less: net gain on equity interests — — — — — Less: net (loss)/gain on loans held for sale at fair value — — — 117 — Plus: (release) provision for credit loss 1,843 329 8,493 72 2,334 Gross revenue $ 24,781 $ 23,136 $ 22,505 $ 23,538 $ 23,067 Gross Revenue excluding net gain on mortgage loans (Dollars in thousands) June 30, 2023 March 31, 2024 June 30, 2024 Gross revenue $ 24,781 $ 23,538 $ 23,067 Less: net gain on mortgage loans 774 1,264 1,820 Gross revenue excluding net gain on mortgage loans $ 24,007 $ 22,274 $ 21,247

Cover Page	Jul. 23, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 23, 2024
Entity Registrant Name	FIRST WESTERN FINANCIAL, INC.
Entity Incorporation, State or Country Code	CO
Entity File Number	001-38595
Entity Tax Identification Number	37-1442266
Entity Address, Address Line One	1900 16th Street
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80202
City Area Code	303
Local Phone Number	531.8100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	MYFW
Security Exchange Name	NASDAQ
Entity Central Index Key	0001327607
Amendment Flag	false