First Western Financial, Inc.

Good day, and thank you for standing by. And welcome to the First Western Financial First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tony Rossi of Financial Profiles. Sir, please go ahead.

Thank you, Norma. Good morning, everyone, and thank you for joining us today for First Western Financial's first quarter 2024 earnings call. Joining us from First Western's management team are Scott Wiley, Chairman and Chief Executive Officer, Julie Korkamp, Chief Operating Officer, and David Weber, Chief Financial Officer. We will use a slide presentation as part of our discussion this morning. If you've not done so already, please visit the events and presentations page of First Western's Investor Relations website to download a copy of the presentation. Before we begin, I'd like to remind you that this conference call contains forward-looking statements with respect to the future performance and financial condition of First Western Financial that involve risks and uncertainties. Various factors could cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors are discussed in the company's SEC filings which are available on the company's website. I would also direct you to read the disclaimers in our earnings release and investor presentation. The company disclaims any obligation to update any forward-looking statements made during the call. Additionally, management may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release, available on the website, contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. And with that, I'd like to turn the call over to Scott. Scott?

Thanks, Tony, and good morning, everybody. During the fourth quarter, while continuing to prioritize prudent risk management and conservative approach to new loan production, we were able to deliver a higher level of profitability than our originally reported $0.03 a share in Q4. This improvement is encouraging, although not at the level of profitability that we target. We executed well on our strategic priorities, which resulted in positive trends in a number of key areas, including further lowering our loan to deposit ratio, generating a higher level of non-interest income, primarily driven by our wealth management and mortgage banking businesses, an improvement in our asset quality with the decline in non-performing loans, and zero net charge-offs in the quarter. The higher level of profitability combined with our prudent balance sheet management resulted in an increase in our tangible book value per share and increases in our risk-based capital ratios. As we indicated in our last call, the primary focus of the near term is on core deposit gathering in order to further improve our level of liquidity, which is reflected in our balance sheet trends in the first quarter. we remain conservative in new loan production, maintaining our discipline, underwriting, and pricing criteria, while prioritizing lending to clients that provide full banking relationships, including deposits and wealth management business. This approach, along with lower level loan demand due to higher interest rates, resulted in a lower level of loan production in the quarter. Loan payoffs continue to be at relatively the same level we've been seeing but we also saw a lower level of draws on existing credit lines than we've seen in the past few quarters. This resulted in a decline in total loans during the first quarter, most notably in the areas of commercial and industrial loans. In terms of asset quality, we continue to make progress on the resolution of loans that were put in non-accrual status over the past several quarters. This included a pay down of one of the loans that comprised our largest non-accrual relationship following the sale of one of the properties that we had as collateral in a second already in Q2. As we've indicated, this process will take some time, and the sale of various collateral pieces will proceed on different schedules. But based on the progress we're making, we expect to see continuous successful resolutions with minimal loss incurred. Aside from the existing non-accrual loans, the rest of the portfolio is performing well, and we had a decline in past due loans during the first quarter. This continues a positive trend we've been seeing in this area. As compared to the first quarter of 2023, past due loans are down 59%. As we announced during the first quarter, we successfully charged off the other large non-accrual loan after the guarantor filed for bankruptcy. So the full extent of the losses on this loan have already been incurred and are reflected in our income statement. And as we pursue our recovery efforts, there will only be positive potential impact from here on out. We also sold off a third smaller non-accrual loan last quarter at a small premium, further reducing our problem loans to the lowest percent of total loans over the past three quarters down to 1.86%. Moving to slide four, we generated net income of 2.5 million or 26 cents per diluted share in the quarter and pre-tax, pre-provision net income of 3.7 million. Q1 earnings in EPS were about 16% higher than the average of the prior four quarters using our originally reported Q4 earnings, as we showed positive trends in several areas of our operations. With our higher level of profitability and prudent balance sheet management, we had a 1% increase in our tangible book value per share this quarter. Now I'll turn the call over to Julie for some additional discussion of our balance sheet and trust and investment management trends. Julie?