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First Western Reports Second Quarter 2024 Financial Results
Источник: Nasdaq GlobeNewswire / 23 июл 2024 16:58:54 America/New_York
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, July 23, 2024 (GLOBE NEWSWIRE) -- 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,
2024Consolidated 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.comFirst 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 $7178,927 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 % 
