Second Quarter 2019 Summary

  • Net income available to common shareholders of $1.4 million in Q2 2019, compared to net income available to common shareholders of $0.5 million in Q2 2018
  • Diluted EPS of $0.18 in Q2 2019, compared to $0.21 in Q1 2019, and $0.08 in Q2 2018
  • Adjusted net income available to common shareholders, excluding goodwill impairment charge, of $2.6 million in Q2 2019, an increase from Q2 2018 of 432.1%
  • Adjusted diluted EPS, excluding goodwill impairment charge, of $0.33 for Q2 2019, an increase from Q2 2018 of 312.5% 
  • Q2 2019 financial results include a $1.6 million goodwill impairment charge
  • Gross loans, excluding loans held for sale, of $939.4 million, a 3.5% annualized increase from Q1 2019 and an 11.5% increase from Q2 2018
  • Average total loans increased to $966.5 million in Q2 2019, a 16.0% annualized increase from Q1 2019
  • Total deposits of $1.0 billion, an 11.1% annualized increase from Q1 2019 and a 19.1% increase from Q2 2018
  • Efficiency ratio of 78.2%, compared to 83.2% in Q1 2019 and 88.8% in Q2 2018
  • Authorized stock repurchase program and opened office in Vail Valley

DENVER, July 25, 2019 (GLOBE NEWSWIRE) -- First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the second quarter ended June 30, 2019.

Net income available to common shareholders was $1.4 million, or $0.18 per diluted share. This compares to $1.6 million, or $0.21 per diluted share, for the first quarter of 2019, and $0.5 million, or $0.08 per share, for the second quarter of 2018, which included $0.6 million of preferred stock dividends. The preferred stock was redeemed in the third quarter of 2018. Financial results for the second quarter of 2019 include a $1.6 million goodwill impairment charge related to the announced sale of the Company’s Los Angeles-based fixed income team (a component of the Company’s Capital Management segment), which negatively impacted earnings per diluted share by 15 cents. For the second quarter of 2019, adjusted net income, excluding the goodwill impairment charge, available to common shareholders was $2.6 million, or $0.33 per diluted share.

“From an operating perspective, we delivered our strongest quarter since our initial public offering in 2018,” said Scott C. Wylie, CEO of First Western. “We continue to successfully attract new clients, resulting in further increases in loans, deposits and assets under management, while our commitment to the mortgage business has put us in good position to capitalize on the increase in demand we are seeing in our markets. As a result, we delivered on our revenue growth, operating efficiency and earnings ramp story. We continue to deliver on strategies to optimize our business model and investment platform, which led to our decision to sign an agreement to sell our Los Angeles-based fixed income team. Although this sale agreement resulted in a goodwill impairment charge in the second quarter, we expect that it will result in a significant increase in tangible book value in the third quarter of 2019 and free up capital and resources that we believe can be more profitably deployed in core areas of our business. 

“We expect the positive trends we are experiencing in the business to continue and drive further improvement in our level of profitability in the second half of the year. In addition, with the implementation of our stock repurchase program, we believe we have another catalyst for creating shareholder value going forward,” said Mr. Wylie.

           
  For the Three Months Ended 
  June 30,  March 30,   June 30, 
(Dollars in thousands, except per share data) 2019  2019  2018 
Earnings Summary            
Net interest income $7,960  $7,971  $7,577 
Less: (recovery of) provision for credit losses  (78)  194    
Total non-interest income  8,586   6,976   6,892 
Total non-interest expense(1)  14,659   12,602   13,084 
Income before income taxes  1,965   2,151   1,385 
Income tax expense  561   524   337 
Net income  1,404   1,627   1,048 
Preferred stock dividends        (562)
Net income available to common shareholders  1,404   1,627   486 
Adjusted net income available to common shareholders(2)  2,586   1,627   486 
Basic and diluted earnings per common share  0.18   0.21   0.08 
Adjusted basic and diluted earnings per common share(2) $0.33  $0.21  $0.08 
           
Return on average assets  0.50%  0.57%  0.41%
Adjusted return on average assets(2)  0.91   0.57   0.41 
Return on average shareholders' equity  4.61   5.50   3.99 
Adjusted return on average shareholders' equity(2)  8.50   5.50   3.99 
Return on tangible common equity(2)  5.68   6.88   3.57 
Adjusted return on tangible common equity(2)  10.51   6.88   3.57 
Net interest margin  3.10   3.03   3.29 
Efficiency ratio(2)  78.24%  83.15%  88.84%


(1) Includes non-operating goodwill impairment charge of $1.6 million for the three months ended June 30, 2019.
(2) 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.

Operating Results for the Second Quarter 2019

Revenue

Gross revenue (total income before non-interest expense, plus provision for credit losses) was $16.5 million for the second quarter of 2019, compared to $14.9 million for the first quarter of 2019. The increase in revenue was primarily driven by a $1.6 million increase in non-interest income, due to an increase in mortgage activity.

Relative to the second quarter of 2018, gross revenue increased $2.1 million from $14.5 million. The increase was primarily attributable to a $1.7 million increase in non-interest income, due to an increase in mortgage activity.

Net Interest Income

Net interest income for the second quarter of 2019 was $8.0 million, materially unchanged from the first quarter of 2019.

Relative to the second quarter of 2018, net interest income increased 5.1% from $7.6 million. The increase in net interest income from the second quarter of 2018 was primarily driven by higher average loan balances.

Net Interest Margin

Net interest margin for the second quarter of 2019 increased to 3.10% from 3.03% in the first quarter of 2019. The increase was primarily due to a 15 basis point increase in the average yield on interest earning assets, from 4.20% to 4.35%, driven by higher average loan yields and a favorable shift in the mix of earning assets.

Relative to the second quarter of 2018, the net interest margin decreased from 3.29%, primarily due to 46 basis point increase in the average cost of funds, which was partially offset by a 22 basis point increase in the average yield on interest earning assets.

Non-interest Income

Non-interest income for the second quarter of 2019 was $8.6 million, an increase of 23.1% from $7.0 million in the first quarter of 2019 and 24.6% from $6.9 million in the second quarter of 2018. The increase was primarily attributable to higher net gains on mortgage loans sold as a result of a higher volume of mortgages sold in the second quarter of 2019.

Non-interest Expense

Non-interest expense for the second quarter of 2019 was $14.7 million, an increase of 16.3% from $12.6 million for the first quarter of 2019. Non-interest expense for the second quarter of 2019 included a $1.6 million goodwill impairment charge related to the sale of the Company’s Los Angeles-based fixed income team. Excluding the goodwill impairment charge, the increase was primarily attributable to an increase in professional services fees related to the announced sale of the Los Angeles-based fixed income team, the 2019 proxy filing, and higher audit related fees associated with internal controls and the preparation for the CECL implementation.

Excluding the goodwill impairment charge, non-interest expense was consistent with the second quarter of 2018.

The Company’s efficiency ratio was 78.2% in the second quarter of 2019, compared with 83.2% in the first quarter of 2019 and 88.8% in the second quarter of 2018.

Income Taxes

The Company recorded income tax expense of $0.6 million for the second quarter of 2019, representing an effective tax rate of 28.5%, compared to 24.4% for the first quarter of 2019. The increase is related to the vesting of Restricted Stock Units during the three months ended June 30, 2019.

Loan Portfolio

Gross loans, excluding mortgage loans held for sale, totaled $939.4 million at June 30, 2019, compared to $931.2 million at March 31, 2019 and $842.6 million at June 30, 2018. Average total loans increased in the quarter by an annualized 16.0% from the first quarter of 2019 to $966.5 million. The increase in gross loans from March 31, 2019 was primarily attributable to growth in the residential mortgage loan portfolio and loans secured by cash, securities and other. Higher paydown activity was noted in the second quarter of 2019 compared to the first quarter of 2019 and included the reduction of special mention and substandard credits.

Deposits

Total deposits were $1.0 billion at June 30, 2019, compared to $978.1 million at March 31, 2019, and $843.7 million at June 30, 2018. The increase in total deposits from March 31, 2019 was due primarily to an increase in NOW accounts related to the addition of new clients.

Assets Under Management

Total assets under management increased by $188.0 million during the second quarter to $5.97 billion at June 30, 2019, compared to $5.78 billion at March 31, 2019, and $5.42 billion at June 30, 2018. The increase was primarily attributed to new accounts added in the second quarter of 2019 contributing $161.5 million in new assets.

Credit Quality

Non-performing assets totaled $13.5 million, or 1.13% of total assets, at June 30, 2019, down from $19.4 million, or 1.69% of total assets, at March 31, 2019 due to paydowns. 

The Company recorded $8 thousand in net recoveries in the second quarter of 2019.

The Company recorded a recovery of provision for loan losses of $78 thousand in the second quarter of 2019, primarily due to overall improvement in credit quality.

Capital

At June 30, 2019, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. At June 30, 2019, the Bank was classified as “well capitalized,” as summarized in the following table:

    
  June 30, 
  2019 
Consolidated Capital   
Common Equity Tier 1(CET1) to risk-weighted assets 11.41%
Tier 1 capital to risk-weighted assets 11.41 
Total capital to risk-weighted assets 13.04 
Tier 1 capital to average assets 9.01 
    
Bank Capital   
Common Equity Tier 1(CET1) to risk-weighted assets 10.65 
Tier 1 capital to risk-weighted assets 10.65 
Total capital to risk-weighted assets 11.53 
Tier 1 capital to average assets 8.42%

Tangible book value per common share improved from $9.19 in the second quarter of 2018 to $12.38 in the second quarter of 2019, an improvement of 34.7%.

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, July 26, 2019. The call can be accessed via telephone at 877-405-1628; passcode 1193649. A recorded replay will be accessible through August 2, 2019 by dialing 855-859-2056; passcode 1193649.

A slide presentation relating to the second quarter 2019 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 and California. 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,” “Adjusted Net Income Available to Common Shareholders,” “Adjusted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” and “Adjusted Return on Tangible Common Equity.” 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,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “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 risk of geographic concentration in Colorado, Arizona, Wyoming and California; 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 21, 2019 (“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
Larry Clark
310-622-8223
MYFW@finprofiles.com
IR@myfw.com

 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
          
  For the Three Months Ended 
  June 30,  March 31, June 30, 
(Dollars in thousands, except per share data) 2019  2019 2018 
Interest and dividend income:          
Loans, including fees $10,600  $10,218 $9,074 
Investment securities  331   310  281 
Federal funds sold and other  243   522  150 
Total interest and dividend income  11,174   11,050  9,505 
            
Interest expense:           
Deposits  2,995   2,909  1,411 
Other borrowed funds  219   170  517 
Total interest expense  3,214   3,079  1,928 
Net interest income  7,960   7,971  7,577 
Less: (recovery of) provision for credit losses  (78)  194   
Net interest income, after (recovery of) provision for credit losses  8,038   7,777  7,577 
            
Non-interest income:           
Trust and investment management fees  4,693   4,670  4,689 
Net gain on mortgage loans sold  3,262   1,456  1,359 
Bank fees  341   289  455 
Risk management and insurance fees  194   468  284 
Income on company-owned life insurance  96   93  105 
Total non-interest income  8,586   6,976  6,892 
Total income before non-interest expense  16,624   14,753  14,469 
            
Non-interest expense:           
Salaries and employee benefits  7,699   7,618  7,660 
Occupancy and equipment  1,398   1,407  1,527 
Professional services  1,036   777  1,008 
Technology and information systems  1,016   1,069  1,000 
Data processing  742   687  687 
Marketing  441   278  316 
Amortization of other intangible assets  142   173  230 
Goodwill impairment  1,572      
Other  613   593  656 
Total non-interest expense  14,659   12,602  13,084 
Income before income taxes  1,965   2,151  1,385 
Income tax expense  561   524  337 
Net income  1,404   1,627  1,048 
Preferred stock dividends       (562)
Net income available to common shareholders $1,404  $1,627 $486 
Earnings per common share:           
Basic and diluted $0.18  $0.21 $0.08 


 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
          
  June 30, March 31, June 30,
  2019 2019 2018
(Dollars in thousands)         
ASSETS         
Cash and cash equivalents:         
Cash and due from banks $ 1,974 $ 2,164 $ 994
Interest-bearing deposits in other financial institutions   90,795   67,602   57,470
Total cash and cash equivalents   92,769   69,766   58,464
          
Available-for-sale securities   51,698   53,610   46,873
Correspondent bank stock, at cost   1,649   993   3,477
Mortgage loans held for sale   36,269   19,778   35,064
Loans, net of allowance of $7,575, $7,645 and $7,100   931,820   923,545   835,544
Promissory notes from related parties   —   —   2,125
Premises and equipment, net   5,683   5,815   6,255
Accrued interest receivable   3,184   3,053   2,565
Accounts receivable   4,718   4,561   5,504
Other receivables   872   881   1,908
Other real estate owned, net   658   658   658
Goodwill   23,239   24,811   24,811
Other intangible assets, net   88   229   773
Deferred tax assets, net   4,607   4,549   4,971
Company-owned life insurance   14,898   14,803   14,515
Other assets   18,313   17,636   3,066
Total assets $ 1,190,465 $ 1,144,688 $ 1,046,573
          
LIABILITIES         
Deposits:         
Noninterest-bearing $ 229,266 $ 226,484 $ 212,225
Interest-bearing   775,911   751,617   631,517
Total deposits   1,005,177   978,101   843,742
Borrowings:         
Federal Home Loan Bank Topeka borrowings   36,060   20,361   75,598
Subordinated Notes   6,560   6,560   13,435
Accrued interest payable   274   329   231
Other liabilities   20,237   19,669   8,609
Total liabilities   1,068,308   1,025,020   941,615
          
SHAREHOLDERS’ EQUITY         
Total shareholders’ equity   122,157   119,668   104,958
Total liabilities and shareholders’ equity $ 1,190,465 $ 1,144,688 $ 1,046,573


 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
          
  As of
  June 30, March 31, June 30,
(Dollars in thousands) 2019 2019 2018
Loan Portfolio         
Cash, Securities and Other $ 149,503 $ 130,641 $ 135,393
Construction and Development   40,826   37,128   35,760
1 - 4 Family Residential   373,836   360,607   307,794
Non-Owner Occupied CRE   152,664   172,014   164,438
Owner Occupied CRE   112,660   108,873   98,393
Commercial and Industrial   108,516   120,602   99,711
Total loans held for investment $ 938,005 $ 929,865 $ 841,489
Deferred costs, net   1,390   1,325   1,155
Gross loans $ 939,395 $ 931,190 $ 842,644
Total loans held for sale $ 36,269 $ 19,778 $ 35,064
          
Deposit Portfolio         
Money market deposit accounts $ 508,263 $ 513,328 $ 394,759
Time deposits   176,128   176,312   166,670
Negotiable order of withdrawal accounts   88,687   59,464   68,742
Savings accounts   2,833   2,513   1,346
Total interest-bearing deposits $ 775,911 $ 751,617 $ 631,517
Noninterest-bearing accounts $ 229,266 $ 226,484 $ 212,225
Total deposits $ 1,005,177 $ 978,101 $ 843,742


 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
          
  For the Three Months Ended 
  June 30,  March 31,  June 30, 
(Dollars in thousands) 2019  2019  2018 
Average Balance Sheets            
Average Assets            
Interest-earnings assets:            
Interest-bearing deposits in other financial institutions $ 40,755  $ 85,826  $ 35,550 
Available-for-sale securities   52,852    50,474    49,821 
Loans   935,025    915,921    829,944 
Promissory notes from related parties(1)   —    —    5,305 
Interest earning-assets   1,028,632    1,052,221    920,620 
Mortgage loans held for sale   31,454    13,277    31,570 
Total interest earning-assets, plus loans held-for-sale   1,060,086    1,065,498    952,190 
Allowance for loan losses   (7,648)   (7,567)   (7,100)
Noninterest-earnings assets   79,735    77,780    73,245 
Total assets $ 1,132,173  $ 1,135,711  $ 1,018,335 
             
Average Liabilities and Shareholders’ Equity            
Interest-bearing liabilities:            
Interest-bearing deposits $ 742,002  $ 760,507  $ 588,916 
Federal Home Loan Bank Topeka borrowings   17,922    10,401    54,185 
Subordinated notes   6,560    6,560    13,435 
Total interest-bearing liabilities $ 766,484  $ 777,468  $ 656,536 
Noninterest-bearing liabilities:            
Noninterest-bearing deposits   225,153    220,408    249,085 
Other liabilities   18,830    19,413    7,875 
Total noninterest-bearing liabilities $ 243,983  $ 239,821  $ 256,960 
Shareholders’ equity $ 121,706  $ 118,422  $ 104,839 
Total liabilities and shareholders’ equity $ 1,132,173  $ 1,135,711  $ 1,018,335 
             
Yields (annualized)            
Interest-bearing deposits in other financial institutions   2.38 %   2.43%   1.69%
Available-for-sale securities   2.51    2.46    2.26 
Loans   4.53    4.46    4.34 
Promissory notes from related parties   —    —    4.75 
Interest earning-assets   4.35    4.20    4.13 
Mortgage loans held for sale   3.73    3.80    3.81 
Total interest earning-assets, plus loans held for sale   4.33    4.20    4.12 
Interest-bearing deposits   1.61    1.53    0.96 
Federal Home Loan Bank Topeka borrowings   2.23    1.92    1.92 
Subordinated notes   7.26    7.32    7.65 
Total interest-bearing liabilities   1.68    1.58    1.17 
Net interest margin   3.10    3.03    3.29 
Interest rate spread   2.67 %   2.62%   2.96%


(1) Promissory notes from related parties were reclassified to loans in 2018 due to change in composition of related parties.


  
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
 
           
  As of and for the Three Months Ended 
  June 30,
  March 31, June 30, 
(Dollars in thousands, except per share data) 2019  2019 2018 
Asset Quality           
Nonperforming loans $12,803  $18,713 $3,052 
Nonperforming assets  13,461   19,371  3,710 
Net recoveries  (8)     
Nonperforming loans to total loans  1.36%  2.01% 0.36%
Nonperforming assets to total assets  1.13   1.69  0.35 
Allowance for loan losses to nonperforming loans  59.17   40.85  232.63 
Allowance for loan losses to total loans  0.81   0.82  0.84 
Net charge-offs to average loans  %  % %
           
Assets under management $5,968,318  $5,781,297 $5,415,918 
           
Market Data          
Book value per share at period end $15.30  $15.02 $13.52 
Tangible book value per common share(1) $12.38  $11.88 $9.19 
Weighted average outstanding shares, basic  7,881,999   7,873,718  5,911,886 
Weighted average outstanding shares, diluted  7,897,092   7,889,644  5,981,421 
Shares outstanding at period end  7,983,866   7,968,420  5,917,667 
           
Consolidated Capital          
Common Equity Tier 1(CET1) to risk-weighted assets  11.41%  11.13% 7.04%
Tier 1 capital to risk-weighted assets  11.41   11.13  9.42 
Total capital to risk-weighted assets  13.04   12.78  12.12 
Tier 1 capital to average assets  9.01   8.67  7.74 
           
Bank Capital          
Common Equity Tier 1(CET1) to risk-weighted assets  10.65   10.36  10.17 
Tier 1 capital to risk-weighted assets  10.65   10.36  10.17 
Total capital to risk-weighted assets  11.53   11.26  11.07 
Tier 1 capital to average assets  8.42%  8.07% 8.37%


(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.


  
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
 
           
Reconciliations of Non-GAAP Financial Measures 
           
  As of and for the Three Months Ended 
  June 30,
  March 31,  June 30,  
(Dollars in thousands, except share and per share data) 2019  2019 2018 
Tangible common          
Total shareholders' equity $122,157  $119,668 $104,958 
Less:          
Preferred stock (liquidation preference)       24,968 
Goodwill  23,239   24,811  24,811 
Other intangibles, net  88   229  773 
Tangible common equity $98,830  $94,628 $54,406 
            
Common shares outstanding, end of period  7,983,866   7,968,420  5,917,667 
Tangible common book value per share $12.38  $11.88 $9.19 
           
Net income, as reported $1,404  $1,627 $1,048 
Less: Preferred stock dividends       562 
Income available to common shareholders $1,404  $1,627 $486 
Return on tangible common equity (annualized)  5.68%  6.88% 3.57%
           
Efficiency          
Non-interest expense $14,659  $12,602 $13,084 
Less: Amortization  142   173  230 
Less: Goodwill impairment  1,572      
Adjusted non-interest expense $12,945  $12,429 $12,854 
            
Net interest income $7,960  $7,971 $7,577 
Non-interest income  8,586   6,976  6,892 
Total income $16,546  $14,947 $14,469 
Efficiency ratio  78.24%  83.15% 88.84%
           
Total income before non-interest expense $16,624  $14,753 $14,469 
Plus: (recovery of) provision for credit losses  (78)  194   
Gross revenue $16,546  $14,947 $14,469 


  
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
 
           
Reconciliations of Non-GAAP Financial Measures 
           
           
  As of and for the Three Months Ended 
  June 30, March 31,  June 30,  
(Dollars in thousands, except share and per share data) 2019 2019 2018 
Adjusted Net Income Available To Common Shareholders          
Net income available to common shareholders $1,404 $1,627 $486 
Plus: Goodwill impairment including income tax impact  1,182     
Adjusted net income available to shareholders $2,586 $1,627 $486 
           
Adjusted Earnings Per Share          
Earnings per share $0.18 $0.21 $0.08 
Plus: Goodwill impairment including income tax impact  0.15     
Adjusted earnings per share $0.33 $0.21 $0.08 
           
Adjusted Return on Average Assets (annualized)          
Return on average assets  0.50% 0.57% 0.41%
Plus: Goodwill impairment including income tax impact  0.41     
Adjusted return on average assets  0.91% 0.57% 0.41%
           
Adjusted Return on Average Shareholders' Equity (annualized)          
Return on average shareholders' equity  4.61% 5.50% 3.99%
Plus: Goodwill impairment including income tax impact  3.89     
Adjusted return on average shareholders' equity  8.50% 5.50% 3.99%
           
Adjusted Return on Tangible Common Equity (annualized)          
Return on tangible common equity  5.68% 6.88% 3.57%
Plus: Goodwill impairment including income tax impact  4.83     
Adjusted return on tangible common equity  10.51% 6.88% 3.57%