First Western Financial Reports 55.3% Increase in Net Income for 2025

First Western Financial Inc. (FWFI), a Denver-based financial holding company, reported a net income available to common shareholders of $13.2 million for the year ended December 31, 2025, a 55.3% increase from the $8.5 million reported in the previous fiscal year. The company's income before income taxes rose by 47.5% to $17.1 million, primarily driven by an $11.0 million increase in net interest income. This growth was partially offset by a $3.1 million increase in the provision for credit losses, a $1.3 million increase in non-interest expense, and a $1.1 million decrease in non-interest income.

The increase in net interest income was attributed to a 27 basis point increase in the net interest margin and growth in average interest-earning assets. The net interest margin expansion was primarily due to a 31 basis point decrease in the total cost of funds. Total non-interest income was $26.6 million, representing 27.4% of total income before non-interest expense, while net interest income before the provision for credit losses was $75.4 million, accounting for 77.8% of total income before non-interest expense. Assets Under Management (AUM) totaled $7.28 billion as of December 31, 2025, a slight decrease of 0.6% compared to $7.32 billion the previous year.

Key operational developments included a 9.2% increase in total deposits to $2.75 billion, compared to $2.51 billion in the prior year. Gross loans, excluding $3.2 million in consumer and other loans accounted for under the fair value option, totaled $2.65 billion. The loan portfolio comprised a diverse mix, including 39.1% in 1-4 family residential loans, 8.5% in commercial and industrial loans, 7.7% in owner-occupied commercial real estate loans, 30.6% in non-owner occupied commercial real estate loans, and 7.1% in construction and development loans. The increase in the provision for credit losses was primarily driven by loan growth, partially offset by favorable mix shifts within the portfolio.

Strategic initiatives for FWFI include building out existing markets, deepening client relationships, generating referrals, developing new products, and expanding to new markets within the Western United States. The company also focuses on growing its core deposit franchise and attracting talent. The company's team of 320 associates delivers wealth management products and services through its ConnectView approach, which holistically assesses a client's financial situation.

Looking ahead, FWFI intends to continue exploring new markets in the Western United States with favorable high net worth demographics and competitive landscapes. The company also plans to enhance its funding sources by building its private and commercial banking capabilities to increase its base of attractively priced core deposits. However, the company acknowledges potential risks, including geographic concentration, changes in interest rates, competition, and cybersecurity threats, which could impact future performance.