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CST: 20/09/2019 07:13:54   

First Western Reports Second Quarter 2019 Financial Results

56 Days ago

Second Quarter 2019 Summary

  • Net income available to common shareholders of $1.4 million in Q2 2019, compared to net income available to common shareholders of $0.5 million in Q2 2018
  • Diluted EPS of $0.18 in Q2 2019, compared to $0.21 in Q1 2019, and $0.08 in Q2 2018
  • Adjusted net income available to common shareholders, excluding goodwill impairment charge, of $2.6 million in Q2 2019, an increase from Q2 2018 of 432.1%
  • Adjusted diluted EPS, excluding goodwill impairment charge, of $0.33 for Q2 2019, an increase from Q2 2018 of 312.5% 
  • Q2 2019 financial results include a $1.6 million goodwill impairment charge
  • Gross loans, excluding loans held for sale, of $939.4 million, a 3.5% annualized increase from Q1 2019 and an 11.5% increase from Q2 2018
  • Average total loans increased to $966.5 million in Q2 2019, a 16.0% annualized increase from Q1 2019
  • Total deposits of $1.0 billion, an 11.1% annualized increase from Q1 2019 and a 19.1% increase from Q2 2018
  • Efficiency ratio of 78.2%, compared to 83.2% in Q1 2019 and 88.8% in Q2 2018
  • Authorized stock repurchase program and opened office in Vail Valley

DENVER, July 25, 2019 (GLOBE NEWSWIRE) -- First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the second quarter ended June 30, 2019.

Net income available to common shareholders was $1.4 million, or $0.18 per diluted share. This compares to $1.6 million, or $0.21 per diluted share, for the first quarter of 2019, and $0.5 million, or $0.08 per share, for the second quarter of 2018, which included $0.6 million of preferred stock dividends. The preferred stock was redeemed in the third quarter of 2018. Financial results for the second quarter of 2019 include a $1.6 million goodwill impairment charge related to the announced sale of the Company’s Los Angeles-based fixed income team (a component of the Company’s Capital Management segment), which negatively impacted earnings per diluted share by 15 cents. For the second quarter of 2019, adjusted net income, excluding the goodwill impairment charge, available to common shareholders was $2.6 million, or $0.33 per diluted share.

“From an operating perspective, we delivered our strongest quarter since our initial public offering in 2018,” said Scott C. Wylie, CEO of First Western. “We continue to successfully attract new clients, resulting in further increases in loans, deposits and assets under management, while our commitment to the mortgage business has put us in good position to capitalize on the increase in demand we are seeing in our markets. As a result, we delivered on our revenue growth, operating efficiency and earnings ramp story. We continue to deliver on strategies to optimize our business model and investment platform, which led to our decision to sign an agreement to sell our Los Angeles-based fixed income team. Although this sale agreement resulted in a goodwill impairment charge in the second quarter, we expect that it will result in a significant increase in tangible book value in the third quarter of 2019 and free up capital and resources that we believe can be more profitably deployed in core areas of our business. 

“We expect the positive trends we are experiencing in the business to continue and drive further improvement in our level of profitability in the second half of the year. In addition, with the implementation of our stock repurchase program, we believe we have another catalyst for creating shareholder value going forward,” said Mr. Wylie.

                     
    For the Three Months Ended  
    June 30,     March 30,       June 30,  
(Dollars in thousands, except per share data)   2019     2019     2018  
Earnings Summary                        
Net interest income   $ 7,960     $ 7,971     $ 7,577  
Less: (recovery of) provision for credit losses     (78 )     194        
Total non-interest income     8,586       6,976       6,892  
Total non-interest expense(1)     14,659       12,602       13,084  
Income before income taxes     1,965       2,151       1,385  
Income tax expense     561       524       337  
Net income     1,404       1,627       1,048  
Preferred stock dividends                 (562 )
Net income available to common shareholders     1,404       1,627       486  
Adjusted net income available to common shareholders(2)     2,586       1,627       486  
Basic and diluted earnings per common share     0.18       0.21       0.08  
Adjusted basic and diluted earnings per common share(2)   $ 0.33     $ 0.21     $ 0.08  
                     
Return on average assets     0.50 %     0.57 %     0.41 %
Adjusted return on average assets(2)     0.91       0.57       0.41  
Return on average shareholders' equity     4.61       5.50       3.99  
Adjusted return on average shareholders' equity(2)     8.50       5.50       3.99  
Return on tangible common equity(2)     5.68       6.88       3.57  
Adjusted return on tangible common equity(2)     10.51       6.88       3.57  
Net interest margin     3.10       3.03       3.29  
Efficiency ratio(2)     78.24 %     83.15 %     88.84 %


(1)   Includes non-operating goodwill impairment charge of $1.6 million for the three months ended June 30, 2019.
(2)   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.

Operating Results for the Second Quarter 2019

Revenue

Gross revenue (total income before non-interest expense, plus provision for credit losses) was $16.5 million for the second quarter of 2019, compared to $14.9 million for the first quarter of 2019. The increase in revenue was primarily driven by a $1.6 million increase in non-interest income, due to an increase in mortgage activity.

Relative to the second quarter of 2018, gross revenue increased $2.1 million from $14.5 million. The increase was primarily attributable to a $1.7 million increase in non-interest income, due to an increase in mortgage activity.

Net Interest Income

Net interest income for the second quarter of 2019 was $8.0 million, materially unchanged from the first quarter of 2019.

Relative to the second quarter of 2018, net interest income increased 5.1% from $7.6 million. The increase in net interest income from the second quarter of 2018 was primarily driven by higher average loan balances.

Net Interest Margin

Net interest margin for the second quarter of 2019 increased to 3.10% from 3.03% in the first quarter of 2019. The increase was primarily due to a 15 basis point increase in the average yield on interest earning assets, from 4.20% to 4.35%, driven by higher average loan yields and a favorable shift in the mix of earning assets.

Relative to the second quarter of 2018, the net interest margin decreased from 3.29%, primarily due to 46 basis point increase in the average cost of funds, which was partially offset by a 22 basis point increase in the average yield on interest earning assets.

Non-interest Income

Non-interest income for the second quarter of 2019 was $8.6 million, an increase of 23.1% from $7.0 million in the first quarter of 2019 and 24.6% from $6.9 million in the second quarter of 2018. The increase was primarily attributable to higher net gains on mortgage loans sold as a result of a higher volume of mortgages sold in the second quarter of 2019.

Non-interest Expense

Non-interest expense for the second quarter of 2019 was $14.7 million, an increase of 16.3% from $12.6 million for the first quarter of 2019. Non-interest expense for the second quarter of 2019 included a $1.6 million goodwill impairment charge related to the sale of the Company’s Los Angeles-based fixed income team. Excluding the goodwill impairment charge, the increase was primarily attributable to an increase in professional services fees related to the announced sale of the Los Angeles-based fixed income team, the 2019 proxy filing, and higher audit related fees associated with internal controls and the preparation for the CECL implementation.

Excluding the goodwill impairment charge, non-interest expense was consistent with the second quarter of 2018.

The Company’s efficiency ratio was 78.2% in the second quarter of 2019, compared with 83.2% in the first quarter of 2019 and 88.8% in the second quarter of 2018.

Income Taxes

The Company recorded income tax expense of $0.6 million for the second quarter of 2019, representing an effective tax rate of 28.5%, compared to 24.4% for the first quarter of 2019. The increase is related to the vesting of Restricted Stock Units during the three months ended June 30, 2019.

Loan Portfolio

Gross loans, excluding mortgage loans held for sale, totaled $939.4 million at June 30, 2019, compared to $931.2 million at March 31, 2019 and $842.6 million at June 30, 2018. Average total loans increased in the quarter by an annualized 16.0% from the first quarter of 2019 to $966.5 million. The increase in gross loans from March 31, 2019 was primarily attributable to growth in the residential mortgage loan portfolio and loans secured by cash, securities and other. Higher paydown activity was noted in the second quarter of 2019 compared to the first quarter of 2019 and included the reduction of special mention and substandard credits.

Deposits

Total deposits were $1.0 billion at June 30, 2019, compared to $978.1 million at March 31, 2019, and $843.7 million at June 30, 2018. The increase in total deposits from March 31, 2019 was due primarily to an increase in NOW accounts related to the addition of new clients.

Assets Under Management

Total assets under management increased by $188.0 million during the second quarter to $5.97 billion at June 30, 2019, compared to $5.78 billion at March 31, 2019, and $5.42 billion at June 30, 2018. The increase was primarily attributed to new accounts added in the second quarter of 2019 contributing $161.5 million in new assets.

Credit Quality

Non-performing assets totaled $13.5 million, or 1.13% of total assets, at June 30, 2019, down from $19.4 million, or 1.69% of total assets, at March 31, 2019 due to paydowns. 

The Company recorded $8 thousand in net recoveries in the second quarter of 2019.

The Company recorded a recovery of provision for loan losses of $78 thousand in the second quarter of 2019, primarily due to overall improvement in credit quality.

Capital

At June 30, 2019, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. At June 30, 2019, the Bank was classified as “well capitalized,” as summarized in the following table:

       
    June 30,  
    2019  
Consolidated Capital      
Common Equity Tier 1(CET1) to risk-weighted assets   11.41 %
Tier 1 capital to risk-weighted assets   11.41  
Total capital to risk-weighted assets   13.04  
Tier 1 capital to average assets   9.01  
       
Bank Capital      
Common Equity Tier 1(CET1) to risk-weighted assets   10.65  
Tier 1 capital to risk-weighted assets   10.65  
Total capital to risk-weighted assets   11.53  
Tier 1 capital to average assets   8.42 %

Tangible book value per common share improved from $9.19 in the second quarter of 2018 to $12.38 in the second quarter of 2019, an improvement of 34.7%.

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 Friday, July 26, 2019. The call can be accessed via telephone at 877-405-1628; passcode 1193649. A recorded replay will be accessible through August 2, 2019 by dialing 855-859-2056; passcode 1193649.

A slide presentation relating to the second quarter 2019 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 and California. 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,” “Adjusted Net Income Available to Common Shareholders,” “Adjusted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” and “Adjusted Return on Tangible Common Equity.” 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,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “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 risk of geographic concentration in Colorado, Arizona, Wyoming and California; 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 21, 2019 (“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
Larry Clark
310-622-8223
MYFW@finprofiles.com
IR@myfw.com

 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
                   
    For the Three Months Ended  
    June 30,     March 31,   June 30,  
(Dollars in thousands, except per share data)   2019     2019   2018  
Interest and dividend income:                    
Loans, including fees   $ 10,600     $ 10,218   $ 9,074  
Investment securities     331       310     281  
Federal funds sold and other     243       522     150  
Total interest and dividend income     11,174       11,050     9,505  
                       
Interest expense:                      
Deposits     2,995       2,909     1,411  
Other borrowed funds     219       170     517  
Total interest expense     3,214       3,079     1,928  
Net interest income     7,960       7,971     7,577  
Less: (recovery of) provision for credit losses     (78 )     194      
Net interest income, after (recovery of) provision for credit losses     8,038       7,777     7,577  
                       
Non-interest income:                      
Trust and investment management fees     4,693       4,670     4,689  
Net gain on mortgage loans sold     3,262       1,456     1,359  
Bank fees     341       289     455  
Risk management and insurance fees     194       468     284  
Income on company-owned life insurance     96       93     105  
Total non-interest income     8,586       6,976     6,892  
Total income before non-interest expense     16,624       14,753     14,469  
                       
Non-interest expense:                      
Salaries and employee benefits     7,699       7,618     7,660  
Occupancy and equipment     1,398       1,407     1,527  
Professional services     1,036       777     1,008  
Technology and information systems     1,016       1,069     1,000  
Data processing     742       687     687  
Marketing     441       278     316  
Amortization of other intangible assets     142       173     230  
Goodwill impairment     1,572            
Other     613       593     656  
Total non-interest expense     14,659       12,602     13,084  
Income before income taxes     1,965       2,151     1,385  
Income tax expense     561       524     337  
Net income     1,404       1,627     1,048  
Preferred stock dividends               (562 )
Net income available to common shareholders   $ 1,404     $ 1,627   $ 486  
Earnings per common share:                      
Basic and diluted   $ 0.18     $ 0.21   $ 0.08  


 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
                   
    June 30,   March 31,   June 30,
    2019   2019   2018
(Dollars in thousands)                  
ASSETS                  
Cash and cash equivalents:                  
Cash and due from banks   $  1,974   $  2,164   $  994
Interest-bearing deposits in other financial institutions      90,795      67,602      57,470
Total cash and cash equivalents      92,769      69,766      58,464
                   
Available-for-sale securities      51,698      53,610      46,873
Correspondent bank stock, at cost      1,649      993      3,477
Mortgage loans held for sale      36,269      19,778      35,064
Loans, net of allowance of $7,575, $7,645 and $7,100      931,820      923,545      835,544
Promissory notes from related parties      —      —      2,125
Premises and equipment, net      5,683      5,815      6,255
Accrued interest receivable      3,184      3,053      2,565
Accounts receivable      4,718      4,561      5,504
Other receivables      872      881      1,908
Other real estate owned, net      658      658      658
Goodwill      23,239      24,811      24,811
Other intangible assets, net      88      229      773
Deferred tax assets, net      4,607      4,549      4,971
Company-owned life insurance      14,898      14,803      14,515
Other assets      18,313      17,636      3,066
Total assets   $  1,190,465   $  1,144,688   $  1,046,573
                   
LIABILITIES                  
Deposits:                  
Noninterest-bearing   $  229,266   $  226,484   $  212,225
Interest-bearing      775,911      751,617      631,517
Total deposits      1,005,177      978,101      843,742
Borrowings:                  
Federal Home Loan Bank Topeka borrowings      36,060      20,361      75,598
Subordinated Notes      6,560      6,560      13,435
Accrued interest payable      274      329      231
Other liabilities      20,237      19,669      8,609
Total liabilities      1,068,308      1,025,020      941,615
                   
SHAREHOLDERS’ EQUITY                  
Total shareholders’ equity      122,157      119,668      104,958
Total liabilities and shareholders’ equity   $  1,190,465   $  1,144,688   $  1,046,573


 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
                   
    As of
    June 30,   March 31,   June 30,
(Dollars in thousands)   2019   2019   2018
Loan Portfolio                  
Cash, Securities and Other   $  149,503   $  130,641   $  135,393
Construction and Development      40,826      37,128      35,760
1 - 4 Family Residential      373,836      360,607      307,794
Non-Owner Occupied CRE      152,664      172,014      164,438
Owner Occupied CRE      112,660      108,873      98,393
Commercial and Industrial      108,516      120,602      99,711
Total loans held for investment   $  938,005   $  929,865   $  841,489
Deferred costs, net      1,390      1,325      1,155
Gross loans   $  939,395   $  931,190   $  842,644
Total loans held for sale   $  36,269   $  19,778   $  35,064
                   
Deposit Portfolio                  
Money market deposit accounts   $  508,263   $  513,328   $  394,759
Time deposits      176,128      176,312      166,670
Negotiable order of withdrawal accounts      88,687      59,464      68,742
Savings accounts      2,833      2,513      1,346
Total interest-bearing deposits   $  775,911   $  751,617   $  631,517
Noninterest-bearing accounts   $  229,266   $  226,484   $  212,225
Total deposits   $  1,005,177   $  978,101   $  843,742


 
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
                   
    For the Three Months Ended  
    June 30,     March 31,     June 30,  
(Dollars in thousands)   2019     2019     2018  
Average Balance Sheets                        
Average Assets                        
Interest-earnings assets:                        
Interest-bearing deposits in other financial institutions   $  40,755     $  85,826     $  35,550  
Available-for-sale securities      52,852        50,474        49,821  
Loans      935,025        915,921        829,944  
Promissory notes from related parties(1)      —        —        5,305  
Interest earning-assets      1,028,632        1,052,221        920,620  
Mortgage loans held for sale      31,454        13,277        31,570  
Total interest earning-assets, plus loans held-for-sale      1,060,086        1,065,498        952,190  
Allowance for loan losses      (7,648 )      (7,567 )      (7,100 )
Noninterest-earnings assets      79,735        77,780        73,245  
Total assets   $  1,132,173     $  1,135,711     $  1,018,335  
                         
Average Liabilities and Shareholders’ Equity                        
Interest-bearing liabilities:                        
Interest-bearing deposits   $  742,002     $  760,507     $  588,916  
Federal Home Loan Bank Topeka borrowings      17,922        10,401        54,185  
Subordinated notes      6,560        6,560        13,435  
Total interest-bearing liabilities   $  766,484     $  777,468     $  656,536  
Noninterest-bearing liabilities:                        
Noninterest-bearing deposits      225,153        220,408        249,085  
Other liabilities      18,830        19,413        7,875  
Total noninterest-bearing liabilities   $  243,983     $  239,821     $  256,960  
Shareholders’ equity   $  121,706     $  118,422     $  104,839  
Total liabilities and shareholders’ equity   $  1,132,173     $  1,135,711     $  1,018,335  
                         
Yields (annualized)                        
Interest-bearing deposits in other financial institutions      2.38  %      2.43 %      1.69 %
Available-for-sale securities      2.51        2.46        2.26  
Loans      4.53        4.46        4.34  
Promissory notes from related parties      —        —        4.75  
Interest earning-assets      4.35        4.20        4.13  
Mortgage loans held for sale      3.73        3.80        3.81  
Total interest earning-assets, plus loans held for sale      4.33        4.20        4.12  
Interest-bearing deposits      1.61        1.53        0.96  
Federal Home Loan Bank Topeka borrowings      2.23        1.92        1.92  
Subordinated notes      7.26        7.32        7.65  
Total interest-bearing liabilities      1.68        1.58        1.17  
Net interest margin      3.10        3.03        3.29  
Interest rate spread      2.67  %      2.62 %      2.96 %


(1)   Promissory notes from related parties were reclassified to loans in 2018 due to change in composition of related parties.


   
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
 
                     
    As of and for the Three Months Ended  
    June 30,
    March 31,   June 30,  
(Dollars in thousands, except per share data)   2019     2019   2018  
Asset Quality                      
Nonperforming loans   $ 12,803     $ 18,713   $ 3,052  
Nonperforming assets     13,461       19,371     3,710  
Net recoveries     (8 )          
Nonperforming loans to total loans     1.36 %     2.01 %   0.36 %
Nonperforming assets to total assets     1.13       1.69     0.35  
Allowance for loan losses to nonperforming loans     59.17       40.85     232.63  
Allowance for loan losses to total loans     0.81       0.82     0.84  
Net charge-offs to average loans     %     %   %
                     
Assets under management   $ 5,968,318     $ 5,781,297   $ 5,415,918  
                     
Market Data                    
Book value per share at period end   $ 15.30     $ 15.02   $ 13.52  
Tangible book value per common share(1)   $ 12.38     $ 11.88   $ 9.19  
Weighted average outstanding shares, basic     7,881,999       7,873,718     5,911,886  
Weighted average outstanding shares, diluted     7,897,092       7,889,644     5,981,421  
Shares outstanding at period end     7,983,866       7,968,420     5,917,667  
                     
Consolidated Capital                    
Common Equity Tier 1(CET1) to risk-weighted assets     11.41 %     11.13 %   7.04 %
Tier 1 capital to risk-weighted assets     11.41       11.13     9.42  
Total capital to risk-weighted assets     13.04       12.78     12.12  
Tier 1 capital to average assets     9.01       8.67     7.74  
                     
Bank Capital                    
Common Equity Tier 1(CET1) to risk-weighted assets     10.65       10.36     10.17  
Tier 1 capital to risk-weighted assets     10.65       10.36     10.17  
Total capital to risk-weighted assets     11.53       11.26     11.07  
Tier 1 capital to average assets     8.42 %     8.07 %   8.37 %


(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.


   
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
 
                     
Reconciliations of Non-GAAP Financial Measures  
                     
    As of and for the Three Months Ended  
    June 30,
    March 31,   June 30,  
(Dollars in thousands, except share and per share data)   2019     2019   2018  
Tangible common                    
Total shareholders' equity   $ 122,157     $ 119,668   $ 104,958  
Less:                    
Preferred stock (liquidation preference)               24,968  
Goodwill     23,239       24,811     24,811  
Other intangibles, net     88       229     773  
Tangible common equity   $ 98,830     $ 94,628   $ 54,406  
                       
Common shares outstanding, end of period     7,983,866       7,968,420     5,917,667  
Tangible common book value per share   $ 12.38     $ 11.88   $ 9.19  
                     
Net income, as reported   $ 1,404     $ 1,627   $ 1,048  
Less: Preferred stock dividends               562  
Income available to common shareholders   $ 1,404     $ 1,627   $ 486  
Return on tangible common equity (annualized)     5.68 %     6.88 %   3.57 %
                     
Efficiency                    
Non-interest expense   $ 14,659     $ 12,602   $ 13,084  
Less: Amortization     142       173     230  
Less: Goodwill impairment     1,572            
Adjusted non-interest expense   $ 12,945     $ 12,429   $ 12,854  
                       
Net interest income   $ 7,960     $ 7,971   $ 7,577  
Non-interest income     8,586       6,976     6,892  
Total income   $ 16,546     $ 14,947   $ 14,469  
Efficiency ratio     78.24 %     83.15 %   88.84 %
                     
Total income before non-interest expense   $ 16,624     $ 14,753   $ 14,469  
Plus: (recovery of) provision for credit losses     (78 )     194      
Gross revenue   $ 16,546     $ 14,947   $ 14,469  


   
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
 
                     
Reconciliations of Non-GAAP Financial Measures  
                     
                     
    As of and for the Three Months Ended  
    June 30,   March 31,   June 30,  
(Dollars in thousands, except share and per share data)   2019   2019   2018  
Adjusted Net Income Available To Common Shareholders                    
Net income available to common shareholders   $ 1,404   $ 1,627   $ 486  
Plus: Goodwill impairment including income tax impact     1,182          
Adjusted net income available to shareholders   $ 2,586   $ 1,627   $ 486  
                     
Adjusted Earnings Per Share                    
Earnings per share   $ 0.18   $ 0.21   $ 0.08  
Plus: Goodwill impairment including income tax impact     0.15          
Adjusted earnings per share   $ 0.33   $ 0.21   $ 0.08  
                     
Adjusted Return on Average Assets (annualized)                    
Return on average assets     0.50 %   0.57 %   0.41 %
Plus: Goodwill impairment including income tax impact     0.41          
Adjusted return on average assets     0.91 %   0.57 %   0.41 %
                     
Adjusted Return on Average Shareholders' Equity (annualized)                    
Return on average shareholders' equity     4.61 %   5.50 %   3.99 %
Plus: Goodwill impairment including income tax impact     3.89          
Adjusted return on average shareholders' equity     8.50 %   5.50 %   3.99 %
                     
Adjusted Return on Tangible Common Equity (annualized)                    
Return on tangible common equity     5.68 %   6.88 %   3.57 %
Plus: Goodwill impairment including income tax impact     4.83          
Adjusted return on tangible common equity     10.51 %   6.88 %   3.57 %

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