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First Western Financial: A Deep Dive into Q4 2024 Results

AInvestTuesday, Jan 7, 2025 4:38 pm ET
3min read


As the clock ticks down to Thursday, January 23, investors eagerly await First Western Financial, Inc.'s (MYFW) fourth quarter 2024 financial results. The Denver-based financial services holding company has been making waves in the industry, and its upcoming earnings report promises to shed light on its recent performance and future prospects. Let's delve into the key aspects that investors should keep an eye on.



First Western's balance sheet management strategy has been a significant driver of its improved liquidity and profitability in recent quarters. In Q3 2024, the company reduced its loan-to-deposit ratio from 101.9% to 95.2%, reflecting an improvement in liquidity. This was primarily driven by a 19% increase in noninterest-bearing deposits compared to the prior quarter. CEO Scott C. Wylie attributed this success to the company's emphasis on prudent risk management and a conservative approach to new loan production, while effectively controlling expenses and investing in long-term growth initiatives.



The increase in noninterest-bearing deposits at First Western Financial was driven by a 19% quarter-over-quarter rise, reaching $474 million in Q3 2024. This trend is a result of the company's strategic focus on maintaining high levels of liquidity and conservative balance sheet management. The increase in noninterest-bearing deposits contributed to a reduction in the loan-to-deposit ratio, indicating an improvement in liquidity. This trend positively impacts the company's overall financial health by enhancing its ability to manage risks and support future growth.

First Western's focus on prudent risk management and conservative loan production is evident in its strategic balance sheet management and emphasis on maintaining high levels of liquidity. In Q3 2024, the company reduced its loan-to-deposit ratio, demonstrating a conservative approach to new loan production. This strategy allows First Western to maintain a strong financial position while selectively growing its loan book, positioning the company well for future growth. CEO Scott C. Wylie stated, "With our successful efforts to reposition our balance sheet... we are well positioned to generate a higher level of loan growth in 2025 as loan demand increases." This focus on risk management and conservative loan production enables First Western to maintain or grow its loan growth in the mid-single digits for the year, as projected by management.

As First Western Financial prepares to report its fourth quarter 2024 financial results, investors will be closely watching the company's performance in the mortgage banking sector. While the sector presents both challenges and opportunities, First Western is optimistic about its potential in wealth management and mortgage banking. The company has seen growth in assets under management and has added new mortgage loan originators to enhance loan production. Management expects to maintain or grow loan growth in the mid-single digits for the year, despite potential headwinds in the mortgage banking sector.

In conclusion, First Western Financial's upcoming earnings report promises to provide valuable insights into the company's recent performance and future prospects. With a strong focus on balance sheet management, prudent risk management, and conservative loan production, First Western is well-positioned to continue its growth trajectory. As investors await the Q4 2024 results, they should keep a close eye on the company's liquidity, loan growth, and mortgage banking sector performance. The future looks bright for First Western Financial, and its upcoming earnings report is sure to be a key milestone in its ongoing success story.
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