Company Quick10K Filing
First Western Financial
Price13.40 EPS1
Shares8 P/E20
MCap107 P/FCF-2
Net Debt-146 EBIT17
TEV-39 TEV/EBIT-2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-04-30
10-K 2019-12-31 Filed 2020-03-12
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-21
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-30
S-1 2018-06-19 Public Filing
8-K 2020-11-25
8-K 2020-11-13
8-K 2020-11-10
8-K 2020-11-03
8-K 2020-10-28
8-K 2020-10-22
8-K 2020-09-21
8-K 2020-09-21
8-K 2020-07-27
8-K 2020-07-23
8-K 2020-07-16
8-K 2020-06-10
8-K 2020-06-08
8-K 2020-05-18
8-K 2020-05-06
8-K 2020-04-30
8-K 2020-04-08
8-K 2020-03-17
8-K 2020-02-10
8-K 2020-01-30
8-K 2020-01-23
8-K 2019-11-01
8-K 2019-11-01
8-K 2019-10-24
8-K 2019-07-29
8-K 2019-07-29
8-K 2019-07-25
8-K 2019-07-19
8-K 2019-06-14
8-K 2019-06-05
8-K 2019-06-05
8-K 2019-05-06
8-K 2019-05-02
8-K 2019-04-25
8-K 2019-03-18
8-K 2019-02-04
8-K 2019-01-24
8-K 2018-10-30
8-K 2018-10-25
8-K 2018-09-24
8-K 2018-09-10
8-K 2018-08-30
8-K 2018-08-02
8-K 2018-07-27

MYFW 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1 - Organization and Summary of Significant Accounting Policies
Note 2 - Acquisitions
Note 3 - Investment Securities
Note 4 - Loans and The Allowance for Loan Losses
Note 5 - Goodwill
Note 6 - Leases
Note 7 - Deposits
Note 8 - Borrowings
Note 9 - Commitments and Contingencies
Note 10 - Shareholders' Equity
Note 11 - Earnings per Common Share
Note 12 - Income Taxes
Note 13 - Related - Party Transactions
Note 14 - Fair Value
Note 15 - Assets and Other Liabilities Classified As Held for Sale
Note 16 - Segment Reporting
Note 17 - Regulatory Capital Matters
Note 18 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
Part II. Other Information
Item 1.Legal Proceedings
Item 1A. Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Item 5.Other Information
Item 6.Exhibits
EX-31.1 myfw-20200930ex311dce665.htm
EX-31.2 myfw-20200930ex312c1223b.htm
EX-32.1 myfw-20200930ex321efd963.htm
EX-32.2 myfw-20200930ex322c7bcec.htm

First Western Financial Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
1.31.00.80.50.30.02016201720182020
Assets, Equity
0.10.10.10.00.00.02016201720182020
Rev, G Profit, Net Income
0.10.10.0-0.0-0.1-0.12016201720182020
Ops, Inv, Fin

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-38595

FIRST WESTERN FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Colorado

37-1442266

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

1900 16th Street, Suite 1200
Denver, CO

80202

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: 303.531.8100

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

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer

Non-accelerated filer 

Smaller reporting company

Emerging growth company

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.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Shares outstanding as of
October 30, 2020

Common Stock, no par value

7,951,749

Table of Contents

FIRST WESTERN FINANCIAL, INC.

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

6

Condensed Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and December 31, 2019

6

Condensed Consolidated Statements of Income (Unaudited) for the Three Months and Nine Months Ended September 30, 2020 and September 30, 2019

7

Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months and Nine Months Ended September 30, 2020 and September 30, 2019

8

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) for the Three Months and Nine Months Ended September 30, 2020 and September 30, 2019

9

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2020 and September 30, 2019

10

Notes to Condensed Consolidated Financial Statements (Unaudited)

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

41

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

72

Item 4.

Controls and Procedures

73

PART II. OTHER INFORMATION

73

Item 1.

Legal Proceedings

73

Item 1A.

Risk Factors

74

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

76

Item 3.

Defaults upon Senior Securities

76

Item 4.

Mine Safety Disclosures

76

Item 5.

Other Information

76

Item 6.

Exhibits

77

SIGNATURES

78

Important Notice about Information in this Quarterly Report

Unless we state otherwise or the context otherwise requires, references in this Quarterly Report to “we,” “our,” “us,” “the Company” and “First Western” refer to First Western Financial, Inc. and its consolidated subsidiaries, including First Western Trust Bank, which we sometimes refer to as “the Bank” or “our Bank.”

The information contained in this Quarterly Report is accurate only as of the date of this Quarterly Report on Form 10-Q and as of the dates specified herein.

2

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control, particularly with regard to developments related to COVID-19. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

The impact of the COVID-19 pandemic and actions taken by governmental authorities in response to the pandemic;
geographic concentration in Colorado, Arizona, Wyoming and California;
changes in the economy affecting real estate values and liquidity;
our ability to continue to originate residential real estate loans and sell such loans;
risks specific to commercial loans and borrowers;
claims and litigation pertaining to our fiduciary responsibilities;
competition for investment managers and professionals and our ability to retain our associates;
fluctuation in the value of our investment securities;
the terminable nature of our investment management contracts;
changes to the level or type of investment activity by our clients;
investment performance, in either relative or absolute terms;
changes in interest rates;
the adequacy of our allowance for loan losses;
weak economic conditions and global trade;
legislative changes or the adoption of tax reform policies;
external business disruptors in the financial services industry;
liquidity risks;
our ability to maintain a strong core deposit base or other low-cost funding sources;

3

Table of Contents

continued positive interaction with and financial health of our referral sources;
retaining our largest trust clients;
our ability to achieve our strategic objectives;
competition from other banks, financial institutions and wealth and investment management firms;
our ability to implement our internal growth strategy and manage the risks associated with our anticipated growth;
the acquisition of other banks and financial services companies and integration risks and other unknown risks associated with acquisitions;
the accuracy of estimates and assumptions;
our ability to protect against and manage fraudulent activity, breaches of our information security, and cybersecurity attacks;
our reliance on communications, information, operating and financial control systems technology and related services from third-party service providers;
technological change;
our ability to attract and retain clients;
unforeseen or catastrophic events, including pandemics, terrorist attacks, extreme weather events or other natural disasters;
new lines of business or new products and services;
regulation of the financial services industry;
legal and regulatory proceedings, investigations and inquiries, fines and sanctions;
limited trading volume and liquidity in the market for our common stock;
fluctuations in the market price of our common stock;
potential impairment of goodwill recorded on our balance sheet and possible requirements to recognize significant charges to earnings due to impairment of intangible assets;
actual or anticipated issuances or sales of our common stock or preferred stock in the future;
the initiation and continuation of securities analysts coverage of the Company;
future issuances of debt securities;
our ability to manage our existing and future indebtedness;
available cash flows from the Bank; and
other factors that are discussed in “Item 1A - Risk Factors” in our Annual Report on Form 10-K.

4

Table of Contents

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in the section titled Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 12, 2020, in the section titled Risk Factors in Part II, Item 1A of our Form 10-Q filed with the SEC on April 30, 2020 and in the section titled Risk Factors in Part II, Item 1A of our Form 10-Q filed with the SEC on August 6, 2020. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

5

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRST WESTERN FINANCIAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share amounts)

September 30, 

December 31, 

    

2020

    

2019

ASSETS

 

 

  

Cash and cash equivalents:

 

  

 

  

Cash and due from banks

$

2,867

$

4,180

Interest-bearing deposits in other financial institutions

 

247,491

 

74,458

Total cash and cash equivalents

 

250,358

 

78,638

Available-for-sale securities, at fair value

 

40,654

 

58,903

Correspondent bank stock, at cost

 

1,295

 

585

Mortgage loans held for sale

 

89,872

 

48,312

Loans, net of allowance of $11,845 and $7,875

 

1,494,231

 

990,132

Premises and equipment, net

 

5,116

 

5,218

Accrued interest receivable

 

6,730

 

3,048

Accounts receivable

 

4,821

 

5,238

Other receivables

1,497

1,006

Other real estate owned, net

 

558

 

658

Goodwill

 

24,191

 

19,686

Other intangible assets, net

 

72

 

28

Deferred tax assets, net

 

6,405

 

5,047

Company-owned life insurance

 

15,359

 

15,086

Other assets

 

28,738

 

16,544

Assets held for sale

 

3,000

 

3,553

Total assets

$

1,972,897

$

1,251,682

LIABILITIES

 

  

 

  

Deposits:

 

  

 

  

Noninterest-bearing

$

472,963

$

240,068

Interest-bearing

 

1,090,709

 

846,716

Total deposits

 

1,563,672

 

1,086,784

Borrowings:

 

  

 

  

Federal Home Loan Bank Topeka and Federal Reserve borrowings

 

222,075

 

10,000

Subordinated notes

 

14,447

 

6,560

Accrued interest payable

 

347

 

299

Other liabilities

 

22,639

 

20,244

Liabilities held for sale

 

141

 

117

Total liabilities

 

1,823,321

 

1,124,004

SHAREHOLDERS’ EQUITY

 

  

 

  

Preferred stock - no par value; 10,000,000 shares authorized; 0 issued and outstanding

 

 

Convertible preferred stock - no par value; 150,000 shares authorized; 0 shares issued and outstanding

 

 

Common stock - no par value; 90,000,000 shares authorized; 7,951,749 and 7,940,168 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

 

 

Additional paid-in capital

 

144,048

 

142,797

Retained earnings (accumulated deficit)

 

4,705

 

(14,955)

Accumulated other comprehensive income (loss)

 

823

 

(164)

Total shareholders’ equity

 

149,576

 

127,678

Total liabilities and shareholders’ equity

$

1,972,897

$

1,251,682

See accompanying notes to condensed consolidated financial statements.

6

Table of Contents

FIRST WESTERN FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per share amounts)

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

    

2020

    

2019

 

    

2020

    

2019

Interest and dividend income:

 

  

 

  

 

  

 

  

Loans, including fees

$

14,138

$

10,672

$

37,342

$

31,490

Investment securities

 

173

 

312

 

692

 

954

Federal funds sold and other

 

99

 

489

 

358

 

1,254

Total interest and dividend income

 

14,410

 

11,473

 

38,392

 

33,698

Interest expense:

 

  

 

  

 

  

 

  

Deposits

 

1,067

 

3,363

 

4,779

 

9,268

Other borrowed funds

 

425

 

170

 

968

 

559

Total interest expense

 

1,492

 

3,533

 

5,747

 

9,827

Net interest income

 

12,918

 

7,940

 

32,645

 

23,871

Less: provision for loan losses

 

1,496

 

100

 

3,987

 

216

Net interest income, after provision for loan losses

 

11,422

 

7,840

 

28,658

 

23,655

Non-interest income:

 

  

 

  

 

  

 

  

Trust and investment management fees

 

4,814

 

4,824

 

14,154

 

14,186

Net gain on mortgage loans

 

12,304

 

3,291

 

24,958

 

8,009

Bank fees

 

340

 

283

 

929

 

912

Risk management and insurance fees

 

483

 

176

 

912

 

838

Income on company-owned life insurance

 

91

 

95

 

273

 

284

Net gain on sale of securities

 

 

119

 

 

119

Total non-interest income

 

18,032

 

8,788

 

41,226

 

24,348

Total income before non-interest expense

 

29,454

 

16,628

 

69,884

 

48,003

Non-interest expense:

 

  

 

  

 

  

 

  

Salaries and employee benefits

 

10,212

 

8,504

 

25,384

 

23,821

Occupancy and equipment

 

1,619

 

1,388

 

4,574

 

4,193

Professional services

 

1,288

 

745

 

3,542

 

2,557

Technology and information systems

 

1,032

 

961

 

2,994

 

3,046

Data processing

 

1,038

 

854

 

2,922

 

2,282

Marketing

 

395

 

272

 

1,063

 

991

Amortization of other intangible assets

 

4

 

52

 

44

 

366

Goodwill impairment

1,572

Net loss on assets held for sale

553

Provision for other real estate owned

100

100

Other

 

944

 

666

 

2,747

 

1,873

Total non-interest expense

 

16,632

 

13,442

 

43,923

 

40,701

Income before income taxes

 

12,822

 

3,186

 

25,961

 

7,302

Income tax expense

 

3,192

 

780

 

6,301

 

1,865

Net income available to common shareholders

$

9,630

$

2,406

$

19,660

$

5,437

Earnings per common share:

Basic

$

1.22

$

0.30

$

2.49

$

0.69

Diluted

$

1.20

$

0.30

$

2.47

$

0.69

See accompanying notes to condensed consolidated financial statements.

7

Table of Contents

FIRST WESTERN FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(in thousands)

Three Months Ended September 30, 

 

Nine Months Ended September 30, 

    

2020

    

2019

 

    

2020

    

2019

Net income

$

9,630

$

2,406

$

19,660

$

5,437

Other comprehensive income items:

Net change in unrealized gains on available-for-sale securities

 

(28)

 

321

 

1,305

 

2,364

Income tax effect

7

(83)

(318)

(611)

Total other comprehensive income (loss) items

(21)

238

987

1,753

Comprehensive income

$

9,609

$

2,644

$

20,647

$

7,190

See accompanying notes to condensed consolidated financial statements.

8

Table of Contents

FIRST WESTERN FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except share amounts)

    

Shares

    

    

Retained

    

Accumulated

    

Additional

Earnings

Other

Common

Paid-In

(Accumulated

Comprehensive

Stock

Capital

Deficit)

Income (Loss)

Total

Balance at July 1, 2019

 

7,983,866

$

142,095

$

(19,933)

$

(5)

$

122,157

Net income

 

 

 

2,406

 

 

2,406

Share repurchase

(582)

(8)

(8)

Other comprehensive income, net of tax

 

 

 

 

238

 

238

Stock-based compensation

 

 

939

 

 

 

939

Balance at September 30, 2019

 

7,983,284

$

143,026

$

(17,527)

$

233

$

125,732

Balance at July 1, 2020

7,939,024

$

143,498

$

(4,925)

$

844

$

139,417

Net income

 

 

 

9,630

 

 

9,630

Settlement of share awards

12,725

(88)

(88)

Other comprehensive loss, net of tax

 

 

 

 

(21)

 

(21)

Stock-based compensation

 

 

638

 

 

 

638

Balance at September 30, 2020

 

7,951,749

$

144,048

$

4,705

$

823

$

149,576

Balance at January 1, 2019

 

7,968,420

$

141,359

$

(23,199)

$

(1,285)

$

116,875

Net income

 

 

 

5,437

 

 

5,437

Settlement of share awards

 

15,446

 

(110)

 

 

 

(110)

Adoption of ASU 2018-02

235

(235)

Stock repurchase

(582)

(8)

(8)

Other comprehensive income, net of tax

 

 

 

 

1,753

 

1,753

Stock-based compensation

 

 

1,785

 

 

 

1,785

Balance at September 30, 2019

 

7,983,284

$

143,026

$

(17,527)

$

233

$

125,732

Balance at January 1, 2020

7,940,168

$

142,797

$

(14,955)

$

(164)

$

127,678

Net income

 

 

 

19,660

 

 

19,660

Other comprehensive income, net of tax

 

 

 

 

987

 

987

Settlement of share awards

34,260

(258)