third quarter 2026
Filed Oct 22, 2026First Western Reports Third Quarter 2026 Financial Results
Net income available to common shareholders rose to $ 5,981 (dollars in thousands) from $ 5,729, net interest income increased 5.5%, net interest margin expanded to 2.95%, and loans and deposits grew. Non-interest income declined sequentially and FHLB borrowings increased to $ 150,926 (dollars in thousands).
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest incomeGAAP | $22.96M | 5.5% | 17.9% |
| Provision for (release of) credit lossesGAAP | $647K | – | – |
| Net interest income, after provision for credit lossesGAAP | $22.31M | – | – |
| Total non-interest incomeGAAP | $5.81M | -9.4% | – |
| Total income before non-interest expenseGAAP | $28.12M | -1.7% | 17.1% |
| Gross revenuenon-GAAP | $28.87M | 2.8% | 9.9% |
| Total non-interest expenseGAAP | $20.84M | -1.9% | 3.5% |
| Income before income taxesGAAP | $7.28M | – | – |
| Income tax expenseGAAP | $1.30M | – | – |
| Net income available to common shareholdersGAAP | $5.98M | – | – |
| Basic earnings per common shareGAAP | $ 0.61 | – | – |
| Diluted earnings per common shareGAAP | $ 0.60 | – | – |
| Return on average assets (annualized)GAAP | 0.74 % | – | – |
| Return on average shareholders' equity (annualized)GAAP | 8.39 | – | – |
| Return on tangible common equity (annualized)non-GAAP | 9.31 % | – | – |
| Net interest marginGAAP | 2.95 % | 5 basis points | 41 basis points |
| Efficiency rationon-GAAP | 72.20 % | – | – |
| Total interest and dividend incomeGAAP | $43.95M | – | – |
| Total interest expenseGAAP | $20.99M | – | – |
| Trust and investment management feesGAAP | $4.87M | – | – |
| Net gain on mortgage loansGAAP | $483K | – | – |
| Bank feesGAAP | $329K | – | – |
| Salaries and employee benefitsGAAP | $12.70M | – | – |
| Technology and information systemsGAAP | $1.19M | – | – |
| Total loans held for investmentGAAP | $2.81B | 3.5% | 8.4% |
| Total depositsGAAP | $2.92B | 2.5% | 2.5% |
| Total cash and cash equivalentsGAAP | $166.2M | – | – |
| Federal Home Loan Bank and Federal Reserve borrowingsGAAP | $150.9M | – | – |
| Subordinated notesGAAP | $34.88M | – | – |
| Total assetsGAAP | $3.42B | – | – |
| Total shareholders' equityGAAP | $288.1M | – | – |
| Assets Under Managementother | $7.21B | -0.8% | -2.9% |
| Non-accrual loansGAAP | $13.25M | – | – |
| Non-performing assetsGAAP | $13.25M | – | – |
| Non-performing assets to total assetsGAAP | 0.39 % | – | – |
| Allowance for credit losses to total loansGAAP | 0.74 | – | – |
| Book value per share at period endGAAP | $ 29.48 | 2.6% | 9.5% |
| Tangible book value per common sharenon-GAAP | $ 26.28 | 2.9% | 11.0% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- The Company redeemed $10.0 million of subordinated notes relative to the second quarter of 2026 and third quarter of 2025.
What drove it
- Net interest income increased due to a 5 basis point increase in net interest margin and an $81.1 million increase in average interest-earning assets.
- The increase in yield on average interest-earning assets was primarily driven by an increase in loan yields.
- Cost of funds increased primarily because of higher rates on money market accounts.
- Loan growth during the quarter included growth in the 1-4 family residential and Commercial and industrial portfolios.
- Deposit growth was primarily driven by increases in Noninterest-bearing accounts and money market deposit accounts.
- The non-interest income decline was driven by decreases in Net gain on mortgage loans and Bank fees, partially offset by an increase in Trust and investment management fees.
- The non-interest expense decline reflected reduced Salaries and employee benefits and Technology and information systems, partially offset by higher Occupancy and equipment.
Concerns
- Total non-interest income was $ 5,806 (dollars in thousands), compared to $ 6,385 (dollars in thousands) in the second quarter of 2026 and $ 6,842 (dollars in thousands) in the third quarter of 2025.
- Net gain on mortgage loans was $ 483 (dollars in thousands), compared to $ 906 (dollars in thousands) in the second quarter of 2026 and $ 1,394 (dollars in thousands) in the third quarter of 2025, primarily due to lower origination volume.
- Assets Under Management were $ 7,214,885 (dollars in thousands), down 0.8% from June 30, 2026 and down 2.9% from September 30, 2025, due to lower market values in low fee account types.
- The Company recorded provision expense of $ 0.6 million in the third quarter of 2026 after a provision release of $ 0.5 million in the second quarter of 2026.
- FHLB borrowings increased $114.5 million from $36.4 million as of June 30, 2026 to $150.9 million as of September 30, 2026.
What to watch
- The loan pipeline and management's stated opportunities across its markets.
- Sustainability of net interest margin following the 5 basis point sequential expansion to 2.95%.
- Deposit mix, including continued growth in noninterest-bearing deposits and rates on money market accounts.
- Mortgage origination volume, net gain on mortgage loans and Bank fees.
- Further funding needs following the increase in FHLB borrowings.
- Asset quality after non-performing assets declined to $ 13,253 (dollars in thousands), or 0.39 % of total assets.
Balance sheet and cash flow
- Total cash and cash equivalents were $ 166,248 (dollars in thousands) as of September 30, 2026, compared to $ 174,886 (dollars in thousands) as of June 30, 2026 and $ 355,639 (dollars in thousands) as of September 30, 2025.
- Total deposits were $ 2,916,213 (dollars in thousands), including $ 420,566 (dollars in thousands) of noninterest-bearing accounts and $ 2,495,647 (dollars in thousands) of interest-bearing deposits.
- Federal Home Loan Bank and Federal Reserve borrowings were $ 150,926 (dollars in thousands), compared to $ 36,431 (dollars in thousands) as of June 30, 2026.
- Subordinated notes were $ 34,883 (dollars in thousands), compared to $ 44,849 (dollars in thousands) as of June 30, 2026.
- Total shareholders' equity was $ 288,115 (dollars in thousands), compared to $ 280,593 (dollars in thousands) as of June 30, 2026.
Analysis
First Western reported $ 5,981 (dollars in thousands) of net income available to common shareholders, or $ 0.60 per diluted share, for the third quarter of 2026, compared with $ 5,729 (dollars in thousands), or $ 0.57 per diluted share, in the second quarter of 2026 and $ 3,186 (dollars in thousands), or $ 0.32 per diluted share, in the third quarter of 2025. The reported return on average assets was 0.74 % and return on average shareholders' equity was 8.39, compared with 0.73 % and 8.28 in the prior quarter. Pre-tax, pre-provision net income increased 14.5% from $6.9 million in the second quarter of 2026 to $7.9 million in the third quarter of 2026.
Core spread income was the central source of sequential improvement. Net interest income was $ 22,960 (dollars in thousands), up 5.5% from the prior quarter and 17.9% from the prior-year quarter. Net interest margin increased 5 basis points sequentially to 2.95 % and 41 basis points from the third quarter of 2025. The yield on interest-earning assets increased to 5.65 % from 5.58 %, while cost of funds increased to 2.88 % from 2.86 %. The company attributed the asset-yield improvement primarily to higher loan yields and the funding-cost increase to higher money market account rates.
Balance-sheet growth supported the interest-income result. Total loans held for investment were $ 2,810,858 (dollars in thousands), up 3.5% from June 30, 2026 and 8.4% from September 30, 2025, with growth in 1-4 family residential and Commercial and industrial portfolios during the quarter. Total deposits were $ 2,916,213 (dollars in thousands), up 2.5% sequentially and 2.5% year over year, driven by noninterest-bearing accounts and money market deposit accounts. The funding mix also included $ 150,926 (dollars in thousands) of FHLB and Federal Reserve borrowings, compared with $ 36,431 (dollars in thousands) at June 30, 2026.
Fee income moderated. Total non-interest income was $ 5,806 (dollars in thousands), down 9.4% sequentially, as net gain on mortgage loans declined to $ 483 (dollars in thousands) from $ 906 (dollars in thousands) and Bank fees declined to $ 329 (dollars in thousands) from $ 429 (dollars in thousands). Trust and investment management fees increased to $ 4,865 (dollars in thousands) from $ 4,742 (dollars in thousands), but AUM declined 0.8% sequentially to $ 7,214,885 (dollars in thousands). Total non-interest expense declined 1.9% sequentially to $ 20,840 (dollars in thousands), including the absence of a $0.4 million nonrecurring technology-asset write-off recorded in the second quarter of 2026. The non-GAAP efficiency ratio improved to 72.20 % from 74.03 %.
Credit indicators improved, although provision expense returned as lending expanded. Non-performing assets declined to $ 13,253 (dollars in thousands), or 0.39 % of total assets, from $ 16,285 (dollars in thousands), or 0.50 %, at June 30, 2026. Non-accrual loans were also $ 13,253 (dollars in thousands). The company recorded a $ 647 (dollars in thousands) provision for credit losses, compared with a $ (469) (dollars in thousands) release in the prior quarter, primarily driven by loan growth. The release contained no quantitative financial guidance.
Management, verbatim
Our third quarter results demonstrate continued execution and progress across our business, underscored by strong loan and deposit growth, accelerating loan production, further expansion in our net interest margin and disciplined expense management. Healthy client demand in our markets drove robust loan growth during the quarter, while continued growth in noninterest-bearing deposits reflects the strength of our relationship-based banking model and our ongoing focus on improving our funding mix. Together, these trends contributed to strong growth in net interest income and pre-provision net revenue, while asset quality remained stable.
Scott C. Wylie, CEO of First Western
We remain encouraged by the strength of our loan pipeline and the opportunities we see across our markets. With continued momentum in our core banking franchise, disciplined expense management and a strong balance sheet, we believe we are well positioned to continue improving profitability and creating long-term value for our shareholders.
Scott C. Wylie, CEO of First Western
Not in the filing
stated, not guessed- Forward financial guidance was not provided.
- Previous-release outlook was not provided, so no comparison with prior guidance is available.
- Operating cash flow was not provided.
- Free cash flow was not provided.
- Dividend information was not provided.
- Common-share repurchase information was not provided.
- CFO commentary was not provided.
- Reportable operating segments and segment revenue were not provided.
- Gross margin was not provided.
- Forward operating-expense guidance was not provided.
- Forward tax-rate guidance was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.