First Western expects 2026 loan and deposit growth similar to 2025 while aiming for 1% ROA in 2027

Earnings Call Insights: First Western Financial (MYFW) Q1 2026

Management View

• "We executed well in the first quarter and saw positive trends in many areas, including loan and deposit growth, net interest margin expansion, well-managed expenses, higher mortgage banking revenues and improved asset quality." (Founder, Chairman, CEO & President Scott Wylie)
• "We generated net income of $6.2 million or $0.63 per diluted share in the first quarter" and "our tangible book value per share increased 3.3% for the quarter -- quarter-over-quarter." (Founder, Chairman, CEO & President Scott Wylie)
• "Our loans held for investment increased $41 million" and "new loan production was $116 million in the first quarter" with "the average rate on new production of 6.31%." (COO & Director Julie Courkamp)
• "Our total deposits increased $95 million" and "noninterest-bearing deposits increased 10% or $35 million" as "our loan-to-deposit ratio" moved "to below 95%." (COO & Director Courkamp)
• "Our net interest income increased 1.5% from the prior quarter" and "our NIM increased 10 basis points from the prior quarter to 2.81%." (Principal Accounting Officer, CFO & Treasurer David Weber)

Outlook

• "Based on our first quarter performance and what we're seeing in our markets, our expectation for the year are unchanged from what we provided at the start of the year." (Founder, Chairman, CEO & President Wylie)
• "Our loan and deposit pipelines remain strong and should continue to result in solid balance sheet growth in 2026 with loan deposit growth at similar levels to what we had in 2025." (Founder, Chairman, CEO & President Wylie)
• "While we expect further expansion in 2026, it may not be at the same level as last year." (Founder, Chairman, CEO & President Wylie)
• "We also recently added a new market President for Scottsdale, Arizona, where we see good opportunities for growth." (Founder, Chairman, CEO & President Wylie)

Financial Results

• "Gross revenue increased 3.4% from the prior quarter" and "noninterest income increased by approximately $600,000 from the prior quarter" driven by "gain on sale of mortgage loans, risk management and insurance fees and trust and investment management fees." (Principal Accounting Officer, CFO & Treasurer Weber)
• "Noninterest expense decreased by $1.1 million from the prior quarter" and "our efficiency ratio improved for the sixth consecutive quarter" as management cited "tight" expense management alongside "investments in the business." (Principal Accounting Officer, CFO & Treasurer Weber)
• "We saw improved trends in the loan portfolio in the first quarter with decreases in nonaccrual loans and NPAs" and "we had no loan charge-offs in the quarter" while "allowance coverage was 77 basis points of total loans" as "improved trends during the quarter drove a release of provision." (Principal Accounting Officer, CFO & Treasurer Weber)

Q&A

• Brett Rabatin: asked "How many MLOs have you guys added?" and about mortgage momentum; Founder, Chairman, CEO & President Wylie answered, "I think we added one new MLO this quarter," and COO & Director Courkamp added, "gains on mortgage loans go from $800,000 in quarter 4 to $1.5 million in quarter 1," while Principal Accounting Officer, CFO & Treasurer Weber said, "We were just under $180 million in secondary lock volume for Q1" and "in 2025, we added 8 MLOs."
• Brett Rabatin: asked whether disruption in Colorado and the Scottsdale hire could support faster growth; Founder, Chairman, CEO & President Wylie said of Arizona, "we have tiny market share in Arizona" and described recruiting "one of the top folks out of First Republic/JPMorgan" and "one of the top folks out of FirstBank/PNC," adding on Colorado disruption that layoffs were "big news" and "going to continue to create opportunities for us."
• Wood Lay, KBW: pressed on NIM trajectory; Founder, Chairman, CEO & President Wylie reiterated, "I believe that we will ultimately get back to a 3.15%, 3.20% kind of a NIM" but said, "The pace is just hard to predict," while COO & Director Courkamp said, "There's a very large opportunity for us in DDAs" and the organization is "extremely focused on that."
• Matthew Clark, Piper Sandler: asked deposit costs, seasonality, and borrowings; Principal Accounting Officer, CFO & Treasurer Weber said, "the spot rate on deposits was 2.79% for the end of the quarter," added that Q2 typically brings "deposit outflows... related to tax payments," and stated of FHLB, "that swap matured in early April" and "Correct" that the balance is "0" in April.

Sentiment Analysis

• Analysts were slightly positive but probing on sustainability, with repeated pressure on NIM and funding costs (e.g., "how we should think about the trajectory" and "additional relief"), plus second-quarter deposit seasonality and margin sensitivity.
• Management tone was slightly positive and confident in prepared remarks ("executed well," "expectation for the year are unchanged") and more cautious in forecasting precision during Q&A ("The pace is just hard to predict"; "we can't really predict it").
• Versus the prior quarter, management maintained similar “offense” language around market disruption but placed more emphasis this quarter on tangible first-quarter profitability and mortgage contribution, rather than the prior quarter’s heavier focus on normalizing for the OREO write-down.

Quarter-over-Quarter Comparison

• The company repeated its core 2026 framework from Q4: "solid balance sheet growth" and further NIM expansion, "may not be at the same level" as 2025, and continued opportunity from Colorado bank M&A disruption.
• Q1 replaced Q4’s notable one-time drag with improved profitability visibility: Q4 referenced "a write-down... of an OREO property" while Q1 emphasized "the sale of the last OREO property we had on the balance sheet" and "no loan charge-offs."
• Analysts’ focus shifted from Q4’s heavier concentration on expense outlook and deposit beta to Q1’s emphasis on mortgage strength, deposit spot rate, and how quickly NIM can progress toward management’s longer-run targets.

Risks and Concerns

• "The market remains very competitive" on pricing, including acquirers "out doing really aggressive loan pricing," and management said, "we're not going to compete with that" while emphasizing disciplined underwriting and pricing. (Founder, Chairman, CEO & President Wylie)
• Management flagged seasonality risk in deposits: "We typically see deposit outflows... related to tax payments in the second quarter." (Principal Accounting Officer, CFO & Treasurer Weber)
• On macro/geopolitics, management said, "we haven't seen that yet" in client pullback related to the "Iran War," adding, "That could change, I don't know." (Founder, Chairman, CEO & President Wylie)

Final Takeaway

Management described Q1 2026 as another step in a multi-quarter profitability improvement, highlighting $6.2 million in net income, 2.81% NIM, lower noninterest expense, stronger mortgage-related income, and improving asset quality with no charge-offs. For 2026, leadership kept expectations unchanged—calling for balance sheet growth similar to 2025, continued (but moderating) NIM expansion, and operating leverage—while pointing to market disruption from bank M&A as a recruiting and client-acquisition catalyst, including a new Scottsdale market president and additional banking and mortgage hires.

Read the full Earnings Call Transcript