First Western: Capitalizing on M&A Disruption with Disciplined Execution
Deposit growth and NIM expansion drive Q2 beat, as the bank invests in talent to capture market share amid regional banking turmoil.
MYFW · Earnings Call · 2026-07-24
A Quarter of Steady Progress
The second quarter of 2026 delivered another solid performance for First Western Financial, with net income of $6.7 million (or $0.57 per share) — a 129% increase year-over-year. Scott Wylie opened the call by highlighting deposit cost and deposit growth, net interest margin expansion, managed expenses, and stable asset quality. This momentum is not accidental; it builds on a multi-quarter strategy to reposition the balance sheet and take advantage of a turbulent regional banking environment. The bank's focus on relationship-based lending and disciplined pricing is paying off. As Wylie noted, “We executed well in the second quarter and saw positive trends in many areas, including deposit cost deposit growth, net interest margin expansion, managed expenses, and stable asset quality.” — Scott C. Wylie, CEO · 2026-07-24 The result was a fifth consecutive quarterly increase in loans held for investment, with new production of $115 million at an average rate of 6.37% — comfortably above the 5.89% payoff rate.Market Disruption as a Growth Catalyst
The most compelling narrative is the ongoing market disruption from M&A activity in First Western's footprint. Larger out-of-state acquirers are absorbing local institutions, creating an outflow of experienced bankers and clients who prefer a local, relationship-driven bank. The company is actively recruiting, adding 12 new front-office professionals this year. This is a deliberate strategy to convert disruption into market share. Wylie explained the two-sided nature of the opportunity: “The other side of the sword is that we are seeing real price competition on loans. And so, you know, we have made the decision here today right or wrong, but this is what we said is that we are going to be disciplined in our pricing and in our terms.” — Scott C. Wylie, CEO · 2026-07-24 That discipline is visible in the NIM improvement story.NIM Expansion and Deposit Strategy
Net interest margin expanded 9 basis points to 2.9%, driven by a favorable mix shift and lower funding costs. Chief Financial Officer David Weber attributed the increase to both rate dynamics and balance sheet management: “Our net interest income increased 4.3% from the prior quarter due to an increase in net interest margin and an increase in day count.” — David Weber, Likely CFO or finance executive · 2026-07-24 The deposit base grew 12.6% year-over-year, with particular strength in non-interest-bearing deposits, up 5.1% on average. The bank continues to see runway for further NIM expansion. Management reiterated its longer-term target of returning to a 3.15%–3.20% margin, though it tempered the near-term pace. As Wylie stated in the prior quarter, “I have been saying for six or eight quarters that I believe we will ultimately get back to a 3.15-3.20 kind of a NIM because that is historically what we have seen in normal markets with normal yield curves and normal economics and a normal competitive environment over my forty years of running banks.” — Scott C. Wylie, Chairman and Chief Executive Officer · 2026-04-24 The trajectory is supported by a strong pipeline of new hires.The short answer is, if we grew $280 million in net growth by the end of the year, And just kept our NIM flat from here. That would actually have the same income effect as growing zero in assets and having 10 basis points a quarter in improvements.