First Western Financial Q4 2025 First Western Financial Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 First Western Financial Inc Earnings Call
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To ask a question during the session, you'll need to press star 1 1 or telephone. You will then hear automated message. By January hand is raised to a draw your question. Please press star 1 1 again please. Advise that today's conference pre-recorded. All right, the hand conference over to your first Speaker today. Tony Rossi please go ahead.
Thank You, Marvin. Good morning, everyone. And thank you for joining us today. For First, Western financials fourth quarter 2025 earnings call.
Joining us from first westerners management team or Scott, Wy, chairman and chief executive officer, Julie Corps, Camp Chief Operating Officer and David Weber Chief Financial Officer.
We will use a slide presentation as part of our discussion this morning if you have not done. Uh, so already, please visit the events and presentations page of first Western's investor relations website to download a copy of the presentation.
Operator: Thank you, Marvin. Good morning, everyone, and thank you for joining us today for First Western Financial's Q4 2025 earnings call.
Operator: Joining us from First Western's management team are Scott Wylie, Chairman and Chief Executive Officer, Julie Courkamp, Chief Operating Officer, and David Weber, Chief Financial Officer. We will use a slide presentation as part of our discussion this morning. If you have 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.
Operator: Joining us from First Western's management team are Scott Wylie, Chairman and Chief Executive Officer, Julie Courkamp, Chief Operating Officer, and David Weber, Chief Financial Officer. We will use a slide presentation as part of our discussion this morning. If you have 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.
Before we begin, I'd like to remind you that this conference call contains 4 looking statements with respect to the Future performance and financial condition, of First Western Financial that involve risk 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 FCC 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 we discussed today as well as the reconciliation of the gaap to non-gaap measures with that. I'd like to turn on the call over to Scott Scott.
Okay. Thanks Tony and good morning everybody.
Operator: 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 we discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. With that, I'd like to turn the call over to Scott. Scott? Okay. Thanks, Tony. And good morning, everybody. We executed well in the fourth quarter and saw positive trends in many areas, including loan growth, net interest margin expansion, well-managed operating expenses, and generally stable asset quality. This resulted in an increase in our level of profitability.
Operator: 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 we discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. With that, I'd like to turn the call over to Scott. Scott? Okay. Thanks, Tony. And good morning, everybody. We executed well in the fourth quarter and saw positive trends in many areas, including loan growth, net interest margin expansion, well-managed operating expenses, and generally stable asset quality. This resulted in an increase in our level of profitability.
We executed well in the fourth quarter and saw a positive trend in many areas including loan growth and interest margin expansion.
Well-managed operating expenses and generally stable asset quality. This resulted in an increase in our level of profitability.
Okay, thanks, Tony, and good morning, everybody.
The market remains very competitive in terms of pricing on loans and deposits. But we continue to successfully generate new loans and deposits by offering by offering a superior level of service, expertise and responsiveness, rather than winning business by offering the lowest rates, highest rates on deposits. The lowest rates on loans, as other banks are doing
We executed well in the fourth quarter and saw a positive trend in many areas, including loan growth and interest margin expansion.
Operator: The market remains very competitive in terms of pricing on loans and deposits, but we continue to successfully generate new loans and deposits by offering a superior level of service, expertise, and responsiveness rather than winning business by offering the lowest rates, highest rates on deposits, and the lowest rates on loans, as other banks are doing. We continue to maintain a conservative approach to new loan production with our disciplined underwriting and pricing criteria. As a result of the additions we've made to our banking team over the past few years, as well as generally healthy economic conditions in our market, we've had a solid level of loan production, which was diversified across our markets, industries, and loan types. As a result of our financial performance and the balance sheet management strategies, we had a further increase in both book value and tangible book value per share.
Operator: The market remains very competitive in terms of pricing on loans and deposits, but we continue to successfully generate new loans and deposits by offering a superior level of service, expertise, and responsiveness rather than winning business by offering the lowest rates, highest rates on deposits, and the lowest rates on loans, as other banks are doing. We continue to maintain a conservative approach to new loan production with our disciplined underwriting and pricing criteria. As a result of the additions we've made to our banking team over the past few years, as well as generally healthy economic conditions in our market, we've had a solid level of loan production, which was diversified across our markets, industries, and loan types. As a result of our financial performance and the balance sheet management strategies, we had a further increase in both book value and tangible book value per share.
Well-managed operating expenses and generally stable asset quality resulted in an increase in our level of profitability.
We continue to maintain a conservative approach to a new Loan Production with our disciplined underwriting and pricing criteria as a result of the additions. We've made to our banking team over the past few years as well as generally healthy economic conditions in our Market.
We've had a solid level of Loan Production which was Diversified across our markets Industries and Loan types.
As a result of our financial performance and the balance sheet management strategies. We had a further increase in both
Book value and tangible book, value per share.
The market remains very competitive in terms of pricing, loans, and deposits. But we continue to successfully generate new loans and deposits by offering a superior level of service, expertise, and responsiveness, rather than winning business by offering the lowest rates on loans or the highest rates on deposits, as other banks are doing.
When we decide for we generated, net, income of 3.3 million or 34 cents per diluted share in the fourth quarter.
Which is higher than a prior quarter.
We continue to maintain a conservative approach to new loan production with our disciplined underwriting and pricing criteria.
As a result of the additions we've made to our banking team over the past few years, as well as generally healthy economic conditions in our market.
We had a right down of value of an oral property that reduced our earnings per share by 10 cents after tax in the fourth quarter.
We've had a solid level of loan production, which was diversified across our markets, industries, and loan types.
with our prudent balance sheet management, our tangible book value per share, increased 1.6% this quarter
Operator: Moving to slide four, we generated net income of $3.3 million, or $0.34 per diluted share in the fourth quarter, which was higher than the prior quarter. We had a write-down of value of an OREO property that reduced our earnings per share by $0.10 after tax in the fourth quarter. With our prudent balance sheet management, our tangible book value per share increased 1.6% this quarter. So now I'll turn the call over to Julie for some additional discussion of our balance sheet and our treasury or trust investment management trends. Julie? Thanks, Scott. Turning to slide five, we'll look at the trends in our loan portfolio. Our loans held for investment increased $59 million from the end of the prior quarter.
Operator: Moving to slide four, we generated net income of $3.3 million, or $0.34 per diluted share in the fourth quarter, which was higher than the prior quarter. We had a write-down of value of an OREO property that reduced our earnings per share by $0.10 after tax in the fourth quarter. With our prudent balance sheet management, our tangible book value per share increased 1.6% this quarter. So now I'll turn the call over to Julie for some additional discussion of our balance sheet and our treasury or trust investment management trends. Julie? Thanks, Scott. Turning to slide five, we'll look at the trends in our loan portfolio. Our loans held for investment increased $59 million from the end of the prior quarter.
As a result of our financial performance and the balance sheet management strategies, we had a further increase in both book value and tangible book value per share.
So now I'll turn the call over to Julie for some additional discussion of our balance sheet and our treasury or trust Investment Management Trends Julie.
Thanks Scott.
Turning the slide 5. We'll look at the trends in our loan portfolio.
Moving to slide 4, we generated net income of $3.3 million, or $0.34 per diluted share, in the fourth quarter, which is higher than the prior quarter.
We had to write down the value of an OREO property that reduced our earnings per share by $0.10 after tax in the fourth quarter.
Our loans health or investment increased, 59 million. From the end of the prayer quarter, we continue to be conservative and highly selective and our new Loan Production. But with a higher level of productivity. We are seeing from the additions to our banking team that we made over the last several quarters. We are seeing a solid level of new Loan Production.
With our prudent balance sheet management, our tangible book value per share increased 1.6% this quarter.
While we are also seeing an increase in our CRA loan demand that meets underwriting relationship and pricing criteria.
So now I'll turn the call over to Julie for some additional discussion over our balance sheet and our treasury or trust investment management trends. Julie.
Thanks Scott.
We also saw some construction loans that moved into our CRA portfolio after completion of their projects.
Turning to slide 5, we'll look at the trends in our loan portfolio.
New Loan Production was 146 million in the fourth quarter.
Operator: We continue to be conservative and highly selective in our new loan production, but with the higher level of productivity we are seeing from the additions to our banking team that we made over the last several quarters, we are seeing a solid level of new loan production. We are also seeing an increase in our CRE loan demand that meets underwriting, relationship, and pricing criteria. We also saw some construction loans that moved into our CRE portfolio after completion of their projects. New loan production was $146 million in Q4. The new loan production was diversified, with the largest increases coming in our commercial real estate portfolios, and we are also getting deposit relationships with most of these new clients. We continue to be disciplined, and we are maintaining our pricing criteria. This resulted in the average rate on new production being 6.36% in Q4.
Operator: We continue to be conservative and highly selective in our new loan production, but with the higher level of productivity we are seeing from the additions to our banking team that we made over the last several quarters, we are seeing a solid level of new loan production. We are also seeing an increase in our CRE loan demand that meets underwriting, relationship, and pricing criteria. We also saw some construction loans that moved into our CRE portfolio after completion of their projects. New loan production was $146 million in Q4. The new loan production was diversified, with the largest increases coming in our commercial real estate portfolios, and we are also getting deposit relationships with most of these new clients. We continue to be disciplined, and we are maintaining our pricing criteria. This resulted in the average rate on new production being 6.36% in Q4.
The new Loan Production was Diversified with the largest increases coming in our commercial real estate portfolios.
And we are also getting the positive relationships with most of these new clients.
We can continue to be disciplined. And we are maintaining our pricing criteria.
Our loans held for investment increased $59 million from the end of the prior quarter. We continue to be conservative and highly selective in our new loan production, but with a higher level of productivity, we are seeing from the additions to our banking team that we made over the last several quarters, we are seeing a solid level of new loan production.
This resulted in the average rate on new production, being 6.36% in this quarter,
We are also seeing an increase in our CRA loan demand that meets underwriting, relationship, and pricing criteria.
moving to slide 6, we'll take a closer look at the deposit trends.
We also saw some construction loans that moved into our CRA portfolio after completion of their projects.
Our total deposits, increase the 102 million from the end of the prior quarter.
New loan production was $146 million in the fourth quarter.
The new loan production was diversified, with the largest increases coming in our commercial real estate portfolios.
And we are also getting deposit relationships with most of these new clients.
This was partially offset by seasonal. Outflows we saw largely related to Title Company. Operating accounts who typically see declines in their deposit balances during the fourth quarter due to lower home purchase activity.
We continue to be disciplined, and we are maintaining our pricing criteria.
In addition we were able to run off high cost deposits as a result of the strong core deposit production in the third quarter.
Operator: Moving to slide six, we'll take a closer look at deposit trends. Our total deposits increased $102 million from the end of the prior quarter. While we continued to successfully add new deposit relationships, this was partially offset by seasonal outflows we saw, largely related to title company operating accounts, who typically see declines in their deposit balances during Q4 due to lower home purchase activity. In addition, we were able to run off high-cost deposits as a result of the strong core deposit production in Q3. Average deposits increased 10% in Q4 2025 compared to Q4 2024.
Operator: Moving to slide six, we'll take a closer look at deposit trends. Our total deposits increased $102 million from the end of the prior quarter. While we continued to successfully add new deposit relationships, this was partially offset by seasonal outflows we saw, largely related to title company operating accounts, who typically see declines in their deposit balances during Q4 due to lower home purchase activity. In addition, we were able to run off high-cost deposits as a result of the strong core deposit production in Q3. Average deposits increased 10% in Q4 2025 compared to Q4 2024.
This resulted in the average rate on new production being 6.36% in this quarter,
Moving to slide 6, we'll take a closer look at deposit trends.
Average deposits increased 10% in the fourth quarter of 2025 compared to the fourth quarter of 2024.
Our total deposits increased to $102 million from the end of the prior quarter.
Turning to trust and Investment Management on 57.
We had 155 million decrease in our assets under management. In the fourth quarter, primarily attributed to net withdrawals on low fee and fixed fee product categories.
While we continue to successfully add new deposit relationships, this was partially offset by seasonal outflows we saw, largely related to Title Company operating accounts, which typically see declines in their deposit balances during the fourth quarter due to lower home purchase activity.
Which was partially offset by improved market conditions on investment agency accounts. That carry a higher variable fee which increased 15 million or approximately 1% during the quarter.
In addition, we were able to run off high-cost deposits as a result of the strong core deposit production in the third quarter.
Now, I'll turn the call over to David for further discussion of our financial results. David
Operator: Turning to trust and investment management on slide seven, we had a $155 million decrease in our assets under management in the fourth quarter, primarily attributed to net withdrawals on low-fee and fixed-fee product categories, which was partially offset by improved market conditions on investment agency accounts that carry a higher variable fee, which increased $15 million, or approximately 1%, during the quarter. Now I'll turn the call over to David for further discussion of our financial results. David? Thanks, Julie. Turning to slide eight, we'll look at our gross revenue. Our gross revenue increased 1.5% from the prior quarter, primarily due to an increase in net interest income. Relative to the fourth quarter of 2024, our gross revenue increased 12.2%. Turning to slide nine, we'll look at the trends in net interest income and margin.
Operator: Turning to trust and investment management on slide seven, we had a $155 million decrease in our assets under management in the fourth quarter, primarily attributed to net withdrawals on low-fee and fixed-fee product categories, which was partially offset by improved market conditions on investment agency accounts that carry a higher variable fee, which increased $15 million, or approximately 1%, during the quarter. Now I'll turn the call over to David for further discussion of our financial results. David? Thanks, Julie. Turning to slide eight, we'll look at our gross revenue. Our gross revenue increased 1.5% from the prior quarter, primarily due to an increase in net interest income. Relative to the fourth quarter of 2024, our gross revenue increased 12.2%. Turning to slide nine, we'll look at the trends in net interest income and margin.
Average deposits increased 10% in the fourth quarter of 2025 compared to the fourth quarter of 2024.
Thank you, Julie, turning the slide. 8, we'll look at our gross revenue.
Turning to Trust and Investment Management on page 57.
our gross revenue increased 1.5% from the prior quarter, primarily due to an increase in net interest income
Relative to the fourth quarter of 2024, our gross revenue, increase 12.2%.
We had a $155 million decrease in our assets under management in the fourth quarter, primarily attributed to net withdrawals on low-fee and fixed-fee product categories.
Turning the slide 9. We'll look at the trends in net, interest, income and margin.
This was partially offset by improved market conditions on investment agency accounts that carry a higher variable fee, which increased $15 million, or approximately 1%, during the quarter.
Now, I'll turn the call over to David for further discussion of our financial results. David.
Our net interest income, increased 5.6% from the prior quarter and 21.7%. From the fourth quarter of 2024, due to an increase in our net interest margin.
Thanks, Julie. Turning to slide 8, we'll look at our gross revenue.
our Nim increase 17 basis points from the prior quarter to 2.71%
Revenue increased 1.5% from the prior quarter, primarily due to an increase in net interest income.
Relative to the fourth quarter of 2024, our gross revenue increased 12.2%.
Operator: Our net interest income increased 5.6% from the prior quarter and 21.7% from the fourth quarter of 2024 due to an increase in our net interest margin. Our NIM increased 17 basis points from the prior quarter to 2.71%. This was due to a reduction in our cost of funds, which was primarily due to lower rates on money market deposit accounts as a result of the company reducing deposit rates commensurate with the short-term rate decreases and runoff of high-cost deposit accounts. Now turning to slide 10, our non-interest income decreased by approximately $800,000 from the prior quarter. This was primarily due to a decrease in gain-on-sale of mortgage loans, which typically see seasonal declines in the fourth quarter, and a decrease in risk management and insurance fees.
Operator: Our net interest income increased 5.6% from the prior quarter and 21.7% from the fourth quarter of 2024 due to an increase in our net interest margin. Our NIM increased 17 basis points from the prior quarter to 2.71%. This was due to a reduction in our cost of funds, which was primarily due to lower rates on money market deposit accounts as a result of the company reducing deposit rates commensurate with the short-term rate decreases and runoff of high-cost deposit accounts. Now turning to slide 10, our non-interest income decreased by approximately $800,000 from the prior quarter. This was primarily due to a decrease in gain-on-sale of mortgage loans, which typically see seasonal declines in the fourth quarter, and a decrease in risk management and insurance fees.
This was due to a reduction in our cost of funds, which was primarily due to lower rates on money market deposit accounts. As a result of the company. Reducing deposit rates can measure it with the short-term rate, decreases and runoff of high costs, deposit accounts.
Turning to slide 9, we will look at the trends in net interest income and margin.
Now, turning to slide 10, our non-interest income, decreased by approximately 800,000 from the prior quarter.
Our net interest income increased 5.6% from the prior quarter and 21.7% from the fourth quarter of 2024, due to an increase in our net interest margin.
Our NIM increased 17 basis points from the prior quarter to 2.71%.
This was primarily due to a decrease in gain on sale of mortgage loans, which typically see seasonal, declines in the fourth quarter and a decrease in risk management and insurance fees.
We have successfully transitioned to previously discussed, new leadership, and focus in trust and investment management and insurance. At our expected to produce improved results going forward,
This was due to a reduction in our cost of funds, which was primarily due to lower rates on money market deposit accounts. As a result of the company reducing deposit rates, you can measure it with the short-term rate decreases and runoff of high-cost deposit accounts.
Now, turning the slide 11 and our expenses.
Our non-interest expense increased, 1.2 million from the prior quarter.
Now, turning to slide 10, our non-interest income decreased by approximately $800,000 from the prior quarter.
Our non-interest expense was impacted in the fourth quarter by a 1-time 1.4 million write down. We took on the value of an Oreo property.
Operator: We have successfully transitioned to previously discussed new leadership and focus in trust and investment management and insurance that are expected to produce improved results going forward. Now turning to slide 11 and our expenses. Our noninterest expense increased $1.2 million from the prior quarter. Our noninterest expense was impacted in Q4 by a one-time $1.4 million write-down we took on the value of an OREO property. Excluding the write-down of the OREO property, our noninterest expense decreased $100,000 in the quarter. Most areas of noninterest expense were relatively consistent with the prior quarter as we continue to tightly manage expenses while also making investments in the business that we believe will positively impact our long-term performance. Now turning to slide 12, we'll look at our asset quality.
Operator: We have successfully transitioned to previously discussed new leadership and focus in trust and investment management and insurance that are expected to produce improved results going forward. Now turning to slide 11 and our expenses. Our noninterest expense increased $1.2 million from the prior quarter. Our noninterest expense was impacted in Q4 by a one-time $1.4 million write-down we took on the value of an OREO property. Excluding the write-down of the OREO property, our noninterest expense decreased $100,000 in the quarter. Most areas of noninterest expense were relatively consistent with the prior quarter as we continue to tightly manage expenses while also making investments in the business that we believe will positively impact our long-term performance. Now turning to slide 12, we'll look at our asset quality.
This was primarily due to a decrease in gain on sale of mortgage loans, which typically see seasonal declines in the fourth quarter, and a decrease in risk management and insurance fees.
Including the write down of the Oreo property, our non-interest expense decreased 100,000 in the quarter.
We have successfully transitioned to previously discussed new leadership, with a focus on trust and investment management, and insurance. We are expected to produce improved results going forward.
Now, turning to slide 11 and our expenses.
Most areas of non-interest expense were relatively consistent with the prior quarter, as we continue to tightly manage expenses. While also making investments in the business that we believe will positively impact, our long-term performance
Our non-interest expense increased $1.2 million from the prior quarter.
Now, turning the slide 12 will look at our asset quality.
As Scott indicated earlier, we saw generally stable Trends in the loan portfolio, in the fourth quarter.
Our non-interest expense was impacted in the fourth quarter by a one-time $1.4 million write-down. We took on the value of an OREO property.
Decreases in non-accrual loans, and mpas.
Including the write-down of the OREO property, our non-interest expense decreased $100,000 in the quarter.
And we had a minimal level of net charge offs in the quarter.
Our last piece of Oreo is currently under contract for sale and is expected to close during the first quarter.
Most areas of non-interest expense were relatively consistent with the prior quarter, as we continue to tightly manage expenses, while also making investments in the business that we believe will positively impact our long-term performance.
Operator: As Scott indicated earlier, we saw generally stable trends in the loan portfolio in Q4 with decreases in non-accrual loans and MPAs, and we had a minimal level of net charge-offs in the quarter. Our last piece of OREO is currently under contract for sale and is expected to close during Q1. Our allowance coverage remained unchanged at 81 basis points of total loans as the decrease in non-accrual loans and MPAs resulted in a more normal level of provision during the quarter. Now I will turn it back to Scott. Scott? Thanks, David. Turning to slide 13, I'll wrap up with some comments about our outlook. Overall, we continue to see relatively healthy economic conditions in our markets. We're seeing good opportunities to add both new clients and talent due to the ongoing disruption from M&A activity in the Colorado banking market.
Operator: As Scott indicated earlier, we saw generally stable trends in the loan portfolio in Q4 with decreases in non-accrual loans and MPAs, and we had a minimal level of net charge-offs in the quarter. Our last piece of OREO is currently under contract for sale and is expected to close during Q1. Our allowance coverage remained unchanged at 81 basis points of total loans as the decrease in non-accrual loans and MPAs resulted in a more normal level of provision during the quarter. Now I will turn it back to Scott. Scott? Thanks, David. Turning to slide 13, I'll wrap up with some comments about our outlook. Overall, we continue to see relatively healthy economic conditions in our markets. We're seeing good opportunities to add both new clients and talent due to the ongoing disruption from M&A activity in the Colorado banking market.
Now, turning to this slide, 12, we’ll look at our asset quality.
Our allowance coverage remained unchanged at 81 basis points of total loans, as the decrease in non-accrual loans, and mpas resulted in a more normal level of provision during the quarter.
Now, I will turn it back to Scott, Scott.
As Scott indicated earlier, we saw generally stable trends in the loan portfolio in the fourth quarter.
Thank you, David.
With decreases in non-accrual loans, and MPAs.
Uh, attorney slide 13. I'll wrap up with some comments about our Outlook.
And we had a minimal level of net charge-offs in the quarter.
Our last piece of OREO is currently under contract for sale and is expected to close during the first quarter.
Overall, we did, you see relatively healthy economic conditions, in our markets, we're seeing good opportunities to have both new clients and towns due to the ongoing disruption from m&a, activity in the Colorado banking Market.
We also recently added a new market presence for Arizona where we're seeing good opportunities for growth.
Our loan deposit pipelines. Remain strong.
Our allowance coverage remained unchanged at 81 basis points of total loans, as the decrease in non-accrual loans and NPAs resulted in a more normal level of provision during the quarter.
Now, I will turn it back to Scott. Scott,
Thank you, David.
It should continue to result in solid balance sheet, grow growth in 2026 with loan and deposit growth at similar levels to what we had in 2025.
Uh, attorney, slide 13. I'll wrap up with some comments about our outlook.
In addition to the balance sheet growth, we also expect to see positive Trends in our net. Interest margin.
Or fee income and more operating leverage resulting from our disciplined expense control.
Operator: We also recently had a new market presence for Arizona where we're seeing good opportunities for growth. Our loan and deposit pipelines remain strong and should continue to result in solid balance sheet growth in 2026, with loan and deposit growth at similar levels to what we had in 2025. In addition to the balance sheet growth, we also expect to see positive trends in our net interest margin, our fee income, and more operating leverage resulting from our disciplined expense control. We had net interest margin of 26 basis points in 2025, and while we expect further expansion in 2026, it may not be at the same level as we saw last year. While we remain disciplined in our expense control, we believe that investing in the business will drive future shareholder value.
Operator: We also recently had a new market presence for Arizona where we're seeing good opportunities for growth. Our loan and deposit pipelines remain strong and should continue to result in solid balance sheet growth in 2026, with loan and deposit growth at similar levels to what we had in 2025. In addition to the balance sheet growth, we also expect to see positive trends in our net interest margin, our fee income, and more operating leverage resulting from our disciplined expense control. We had net interest margin of 26 basis points in 2025, and while we expect further expansion in 2026, it may not be at the same level as we saw last year. While we remain disciplined in our expense control, we believe that investing in the business will drive future shareholder value.
Overall, we did see relatively healthy economic conditions in our markets. We're seeing good opportunities here with both new clients and talent due to the ongoing disruption from M&A activity in the Colorado banking market.
Interest margin of 26 basis points in 2025.
We also recently added a new market presence in Arizona, where we're seeing good opportunities for growth.
And while we expect further expansion in 2026, it may not be at the same level as we saw last year.
Our loan deposit pipelines remain strong.
And while we remain disciplined, our expense control, we believe that investing in the business will drive.
And it should continue to result in a solid balance sheet, growing growth in 2026 with loan and deposit growth at similar levels to what we had in 2025.
In addition to the balance sheet growth, we also expect to see positive trends in our net interest margin.
For income.
Future shareholder value the ongoing disruption from the m&a activity in our markets creates opportunities for us to add banking talent and we will continue to take advantage of these opportunities. If and when they materialize
as well as opportunities to add new clients.
And more operating leverage resulting from our disciplined expense control.
We had net interest margin of 26 basis points in 2025.
Based on Trends we're seeing in the portfolio and the feedback we're getting from our clients. We're not seeing anything to indicate that we'll experience any meaningful deterioration and asset quality.
The positive Trends we're seeing.
And while we expect further expansion in 2026, it may not be at the same level as we saw last year.
And while we remain disciplined in our expense control, we believe that investing in the business will drive growth.
Operator: The ongoing disruption from the M&A activity in our markets creates opportunities for us to add banking talent, and we will continue to take advantage of these opportunities if and when they materialize, as well as opportunities to add new clients. Based on trends we're seeing in the portfolio and the feedback we're getting from our clients, we're not seeing anything to indicate that we'll experience any meaningful deterioration in asset quality. The positive trends we're seeing in a number of key areas are expected to continue, which we believe will result in a steady improvement in our financial performance and further value being created for our shareholders in 2026. With that, we're happy to take your questions. Marvin, please open up the call. Thank you. At this time, we'll conduct a question-and-answer session.
Operator: The ongoing disruption from the M&A activity in our markets creates opportunities for us to add banking talent, and we will continue to take advantage of these opportunities if and when they materialize, as well as opportunities to add new clients. Based on trends we're seeing in the portfolio and the feedback we're getting from our clients, we're not seeing anything to indicate that we'll experience any meaningful deterioration in asset quality. The positive trends we're seeing in a number of key areas are expected to continue, which we believe will result in a steady improvement in our financial performance and further value being created for our shareholders in 2026. With that, we're happy to take your questions. Marvin, please open up the call. Thank you. At this time, we'll conduct a question-and-answer session.
Future shareholder value.
in a number of key areas are expected to continue which we believe will result in a steady improvement in our financial performance and further value being created for our shareholders in 2027
With that, we're happy to take your questions.
Marvin please. Open up the call.
The ongoing disruption from the M&A activity in our markets creates opportunities for us to add banking talent, and we will continue to take advantage of these opportunities if and when they materialize.
As well as opportunities to add new clients.
Thank you at this time. We'll collect the question answer session. As a reminder to ask a question, you'll need to press star 1 1, or the telephone and wait for your name to be announced to each other question. Please press star 1 and again, please just stand by while we compile the Q&A roster.
Based on trends we're seeing in the portfolio and the feedback we're getting from our clients, we're not seeing anything to indicate that we'll experience any meaningful deterioration in asset quality.
The positive Trends we're seeing.
our first question because online of
Of the your line is now open.
In a number of key areas are expected to continue, which we believe will result in a steady improvement in our financial performance and further value being created for our shareholders in 2027.
Hey, good afternoon or good morning everybody.
Um,
With that, we're happy to take your questions.
Marvin, please open up the call.
Operator: As a reminder to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Now, our first question comes from the line of Brett Rabatin of Hovde. Your line is now open. Hey, good afternoon or good morning, everybody. Good morning, Brett. Wanted to start off on the margin and just the outlook in terms of magnitude of margin expansion opportunities you see in the next few quarters, and then if you had it, the amount of loans that are repricing this year at lower rates from fixed rates. Yeah. So we had certainly had good NIM performance in the fourth quarter. Pretty pleased with the expansion that occurred there. That was primarily driven by our ability to reduce our primarily deposit costs.
Operator: As a reminder to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Now, our first question comes from the line of Brett Rabatin of Hovde. Your line is now open. Hey, good afternoon or good morning, everybody. Good morning, Brett. Wanted to start off on the margin and just the outlook in terms of magnitude of margin expansion opportunities you see in the next few quarters, and then if you had it, the amount of loans that are repricing this year at lower rates from fixed rates. Yeah. So we had certainly had good NIM performance in the fourth quarter. Pretty pleased with the expansion that occurred there. That was primarily driven by our ability to reduce our primarily deposit costs.
wanted to start off on the margin and just the Outlook, uh, in terms of magnitude of of margin expansion opportunities, you see, in the next few quarters. And then, if you had it, the amount of loans that are repricing this year, um, at lower rates, from fixed rates,
You at this time, we'll collect the question answer session. As a reminder to ask the question, you'll need to press star 1 1 or your telephone and wait for your name to be announced to withdraw your question. Please, press star 1 1. Again please stand by while we can pause the Q&A roster.
And our first question comes online.
Brett Robertson, your line is now open.
Yeah, so uh, you know, we had certainly had good Nim performance in the fourth quarter uh, pretty pleased with the expansion that occurred there. Um,
Hey, good afternoon or good morning, everybody.
Um,
You know, that was primarily driven by our ability to reduce our um primarily deposit costs.
And we do expect uh further expansion to continue um through 2026. Now,
Wanted to start off on the margin and just the outlook, uh, in terms of magnitude of margin expansion opportunities you see in the next few quarters. And then, if you have it, the amount of loans that are repricing this year, um, at lower rates from fixed rates,
It may not be at the same level that we saw through 2025. If you if you look at Q4 2425. Um, you know it may not be at that same level but we do expect in to continue through 2026
Yeah, so, um, you know, we certainly had good NIM performance in the fourth quarter. Uh, pretty pleased with the expansion that occurred there. Um,
And then specifically, uh, on the loan portfolio.
Operator: And we do expect further expansion to continue through 2026. Now, it may not be at the same level that we saw through 2025. If you look at Q4 2024 to Q4 2025, it may not be at that same level, but we do expect expansion to continue through 2026. And then specifically on the loan portfolio, we have about $250 million in fixed rate loans maturing over the next year. And those average yield on those is in the low fives. So that does give us an opportunity, obviously, to continue to reprice our loan book and see some positive trends on the yield on interest-earning assets.
Operator: And we do expect further expansion to continue through 2026. Now, it may not be at the same level that we saw through 2025. If you look at Q4 2024 to Q4 2025, it may not be at that same level, but we do expect expansion to continue through 2026. And then specifically on the loan portfolio, we have about $250 million in fixed rate loans maturing over the next year. And those average yield on those is in the low fives. So that does give us an opportunity, obviously, to continue to reprice our loan book and see some positive trends on the yield on interest-earning assets.
You know, that was primarily driven by our ability to reduce our, um, primarily deposit costs.
Um, we have about 250 million in in fixed uh loans fixed rate loans maturing over the next year.
And we do expect, uh, further expansion to continue, um, through 2026. Now,
And those, uh, average yield on those um, is in in the low fives.
so, you know that that does give us an opportunity obviously to continue to reprice our loans and
It may not be at the same level that we saw through 2025; if you look at Q4 '24 to Q4 '25, you know, it may not be at that same level, but we do expect expansion to continue through 2026.
and see some positive Trends on the yield on interest earning assets.
And then, specifically, uh, on the loan portfolio.
You're the only thing I would add to that is we have shifted our, uh, our balance sheet, uh, interest rate risk
Um, we have about $250 million in fixed, uh,
to be closer to neutral.
Loans, fixed-rate loans, maturing over the next year.
over the last 6 months and we feel like uh and continuing to improve
And those, uh, average yield on those, um, is in the low fives.
Continue to improve in. Nim is not dependent on continued rate Cuts. If we do see rate cuts, that will be beneficial to us,
So, you know, that does give us an opportunity, obviously, to continue to reprice our loan book, and
Operator: The only thing I would add to that is we have shifted our balance sheet interest rate risk to be closer to neutral over the last 6 months, and we feel like continued improvement in NIM is not dependent on continued rate cuts. If we do see rate cuts, that will be beneficial to us, but we're expecting, for the purposes of planning and budgeting, no rate cuts. I think we could debate that one all day, but the feeling is that we should have the balance sheet more neutral, and that's where we are today. Okay. That's helpful. And then on the asset management, wealth management business, and the mortgage banking operation, you've obviously made some changes. I was hoping for maybe some clarity on the AUM levels in the Q4 relative to Q3.
Operator: The only thing I would add to that is we have shifted our balance sheet interest rate risk to be closer to neutral over the last 6 months, and we feel like continued improvement in NIM is not dependent on continued rate cuts. If we do see rate cuts, that will be beneficial to us, but we're expecting, for the purposes of planning and budgeting, no rate cuts. I think we could debate that one all day, but the feeling is that we should have the balance sheet more neutral, and that's where we are today. Okay. That's helpful. And then on the asset management, wealth management business, and the mortgage banking operation, you've obviously made some changes. I was hoping for maybe some clarity on the AUM levels in the Q4 relative to Q3.
And we see some positive trends on the yield on interest-earning assets.
Uh, but we're, uh, expecting, uh, for the purposes of planning and budgeting, uh, no rate Cuts. I, I, you know, we could debate that 1 all day, but uh, but you know, the feeling is that, we should have the balance sheet, uh, more neutral. And that's, uh, that's where we are today.
The only thing I would add to that is we have shifted our, uh,
Our balance sheet, uh, interest rate risk.
To be closer to neutral.
Okay, um that's helpful. And then on the uh Asset Management wealth management business and the Mortgage Banking operation. You know you've obviously made some changes um I was hoping for maybe some clarity on
Over the last six months, and we feel like, uh, continuing to improve and continue to improve in NM is not dependent on continued rate cuts. If we do see rate cuts, that will be beneficial to us,
the AUM levels in the fourth quarter relative to 3Q, you know, if you had clients that were just
taking money out to do things, or what was the
Uh, but we're, uh, expecting, uh, for the purposes of planning and budgeting, uh, no rate cuts. I, I, you know,
It debate that 1 all day, but uh, but you know, the feeling is that, we should have the balance sheet, uh, more neutral. And that's uh, that's where we are today.
driver behind the trends and, and that business and for in the fourth quarter and then just thinking about 26, you know, given the changes which which you think those businesses might do, um, you know, obviously rates will impact mortgage, but just any thoughts on those businesses and the growth of the income,
Okay, um, that's helpful. And then on the Asset Management, Wealth Management business, and the Mortgage Banking operation—you know, you've obviously made some changes. Um, I was hoping for maybe some clarity on—
Operator: If you had clients that were just taking money out to do things, or what was the driver behind the trends in that business in Q4? And then just thinking about 2026, given the changes, what do you think those businesses might do? Obviously, rates will impact mortgage, but just any thoughts on those businesses and the growth of fee income? Yeah. So maybe I'll start on that one, Julie, and you want to pick it up. So with respect to the wealth management fees, the AUM, we obviously did a deep dive on that because we were a little surprised to see the decline happening in the quarter. And what we have seen is a lot of the lower-yielding categories and the fixed-rate categories have had reductions. We're actually in the higher-yielding categories for us on the AUM side that we're seeing improvements.
Operator: If you had clients that were just taking money out to do things, or what was the driver behind the trends in that business in Q4? And then just thinking about 2026, given the changes, what do you think those businesses might do? Obviously, rates will impact mortgage, but just any thoughts on those businesses and the growth of fee income? Yeah. So maybe I'll start on that one, Julie, and you want to pick it up. So with respect to the wealth management fees, the AUM, we obviously did a deep dive on that because we were a little surprised to see the decline happening in the quarter. And what we have seen is a lot of the lower-yielding categories and the fixed-rate categories have had reductions. We're actually in the higher-yielding categories for us on the AUM side that we're seeing improvements.
The AUM levels in the fourth quarter relative to Q3, you know, if you had clients that were just
Taking money out to do things, or what was the
So um with respect to the wealth management, fees, the AUM. Uh we obviously that deep dive on that because we were a little surprised to see the decline.
Um, happening in the order and and what we have seen is, um, a lot of the lower yielding, uh, categories. And the fixed rate categories have had reductions where actually in the, in the higher,
Driver behind the trends, and that business, and for in the fourth quarter, and then just thinking about 2026, you know, given the changes, which you think those businesses might do—um, you know, obviously rates will impact mortgage, but just any thoughts on those businesses and the growth of the income,
Uh yielding categories for us on the AUM side that we're seeing uh improvements. So
Yes, so maybe I'll start out on that one.
So, um, with respect to the wealth management fees, the AUM, we obviously did that deep dive on that because we were a little surprised to see the decline.
Um, happening in the order and and what we have seen is, um, a lot of the lower yielding, uh, categories. And the fixed rate categories have had reductions where actually in the, in the higher,
Operator: So I think the trend there is positive. It looks negative on the surface, but in reality, those are actually things that we're trying to do to improve the trend on PTIM over time. We've made a pretty major shift there over the last year, which we've talked about a little bit before, from being so investment management-focused and led in the PTIM world over the last 20 years to being more fiduciary, trust, and especially planning-driven now. We've talked about the change in leadership there and a number of very positive changes that have been underway over the last six months. We've seen a lot of progress here in the last few months, and that's going to show up in the numbers in 2023, 2026.
Operator: So I think the trend there is positive. It looks negative on the surface, but in reality, those are actually things that we're trying to do to improve the trend on PTIM over time. We've made a pretty major shift there over the last year, which we've talked about a little bit before, from being so investment management-focused and led in the PTIM world over the last 20 years to being more fiduciary, trust, and especially planning-driven now. We've talked about the change in leadership there and a number of very positive changes that have been underway over the last six months. We've seen a lot of progress here in the last few months, and that's going to show up in the numbers in 2023, 2026.
Uh, yielding categories for us on the AUM side that we're seeing, uh, improvements. So,
So I think you know the trend there is positive, it looks negative on the surface um but in reality you know those are those are actually things that we're trying to do to um improve the the trend on PM over time. We've made a pretty major shift there over the last year which we've talked about a little bit before from being so Investment Management focused and and led in the P10 world over the last 20 years to being more fiduciary and trust and especially planning driven now. And we've talked about the change in leadership there and a number of very positive changes that have been uh,
You know, underway over the last 6 months, you know, we've seen a lot of progress here in the last few months and that's going to show up in the numbers in 2023 2020. Uh 6. You know, the other thing that um I think you asked about in there was the risk and insurance revenues and those aren't typically quite strong in the fourth quarter and they were um,
Especially planning-driven now, and we've talked about the change in leadership there and a number of very positive changes that have been, uh,
You know, underway over the last six months, we've seen a lot of progress here in the last few months, and that's going to show up in the numbers. And
Operator: The other thing that I think you asked about in there was the risk and insurance revenues, and those are typically quite strong in Q4, and they were not in this quarter. We've also made a pretty big restructuring of that group, and there were two very high-cost leaders for that group that were comfortable operating as a loss leader. We're not a big believer in loss leaders here, and so we have made some changes there and brought that into the wealth planning team more directly. You don't see the expense save that went with that, and you do see the cost reduction. So I think that those were actually very positive developments that we wanted to see in Q4 there. What did I miss, Julie? Maybe touching on mortgage. I think that was part of your question as well.
Operator: The other thing that I think you asked about in there was the risk and insurance revenues, and those are typically quite strong in Q4, and they were not in this quarter. We've also made a pretty big restructuring of that group, and there were two very high-cost leaders for that group that were comfortable operating as a loss leader. We're not a big believer in loss leaders here, and so we have made some changes there and brought that into the wealth planning team more directly. You don't see the expense save that went with that, and you do see the cost reduction. So I think that those were actually very positive developments that we wanted to see in Q4 there. What did I miss, Julie? Maybe touching on mortgage. I think that was part of your question as well.
Not in this quarter and and, you know, we've also made a pretty big restructuring of that group. And uh, there were 2, very high cost leaders for that group that were comfortable operating as a loss leader. You know, we're not a big believer in loss leaders here and so, um, we have made some changes there and brought that into the wealth planning team more directly. And uh, and you don't see the expense save that went with that and you do see the cost reduction. So, um, I think that those were actually very positive developments that we wanted to see in, uh, in Q4 there.
What I necessarily um maybe something on mortgage. I don't think that with part of your question as well but uh
23, 2020, uh 6. You know, the other thing that, um, I think you asked about in there was the risk and insurance revenues, and those aren't typically quite strong in the fourth quarter, and they were, um, not in this quarter. And, you know, we've also made a pretty big restructuring of that group. And, uh, there were two very high-cost leaders for that group that were comfortable operating as a loss leader. You know, we're not a big believer in loss leaders here, and so, um, we have made some changes there and brought that into the wealth planning team more directly, and you don't see the expense save that went with that, and you do see the cost reduction. So, um,
Those were actually very positive developments that we wanted to see.
In, uh, in Q4 there.
Operator: Q4 mortgage production, Q1 mortgage production for us is typically lower just given the seasonality, but we continue to remain very focused. That's a strategic part of our business. We've added, I think, 8 MLOs in the year of 2025. As you know, it's hard to move MLOs whenever times are strong. We feel like continuing to make that effort, even though overall the production isn't at the level we want it to be; we're profitable in that area. We're still adding and contributing net positive clients into the bank and the portfolio of the bank. I would expect that Q2 and Q3 of the coming year, 2026, are going to be seasonally stronger than the Q1 and Q4. I think we have good outlook there. I think we're doing the right things.
Operator: Q4 mortgage production, Q1 mortgage production for us is typically lower just given the seasonality, but we continue to remain very focused. That's a strategic part of our business. We've added, I think, 8 MLOs in the year of 2025. As you know, it's hard to move MLOs whenever times are strong. We feel like continuing to make that effort, even though overall the production isn't at the level we want it to be; we're profitable in that area. We're still adding and contributing net positive clients into the bank and the portfolio of the bank. I would expect that Q2 and Q3 of the coming year, 2026, are going to be seasonally stronger than the Q1 and Q4. I think we have good outlook there. I think we're doing the right things.
What I necessarily, um, maybe—touching on mortgage, I think that was part of your question as well, but, uh,
Q4 mortgage production, q1 mortgage production for us is typically lower. Um, just given the seasonality but we continue to remain very focused. Um, that's a, you know, a strategic part of our business. Um, we've added, I think 8 mls in the year, um, of 2025. And as you know, it's hard to move mlos whenever times are strong. So we feel like continuing to make that effort. Um, even though overall, the production isn't at the level. We want it to be, we're profitable in that area. We're still adding and contributing net positive clients into the bank and the, um, portfolio of the of the bank.
Q4 mortgage production, q1 mortgage production for us is typically lower. Um, just given the seasonality but we continue to remain very focused. Um, that's a, you know, a strategic part of our business. Um, we've added, I think 8 mls in the year, um, of 2025, and as you know, it's hard to move MLS whenever times are strong. So we feel like continuing to make that effort. Um, even though overall, the production isn't at the level. We want it to be, we're profitable in that area. We're still adding and contributing net positive clients into the bank and the, um, portfolio of the of the bank and, um,
And, um, I would expect that, you know, second and third quarters of the coming year, 2026 are going to be, um, you know, seasonally stronger than the first and fourth. So, I think we have good outlook there. I think we're doing the right things, um, and then to add on to the whole planning conversation, we have, uh, a lot of really strong momentum and that business line and still really good about what we're doing there. We've also added a, a B2B offering, um, that's really just now getting going and we're seeing some early, um, green shoots on that. So I think the outlook for us is strong but the the last, um, you know, Year's production really hasn't shown that yet. So, we're, um, we're looking to, uh, to that growth end of 2026.
Operator: And then to add on to the wealth planning conversation, we have a lot of really strong momentum in that business line and feel really good about what we're doing there. We've also added a B2B offering that's really just now getting going, and we're seeing some early green shoots on that. So I think the outlook for us is strong, but the last year's production really hasn't shown that yet. So we're looking to that growth into 2026. Okay. Good points there, Julie. And just to give some context to the 8 people, that's a 45% increase from where we were a year ago on MLOs at no direct expense. It's a variable cost that's commission-based. Okay. That's really helpful. And then if I could ask one last one, you're almost a double-digit grower in 2025 on loans and deposits.
Operator: And then to add on to the wealth planning conversation, we have a lot of really strong momentum in that business line and feel really good about what we're doing there. We've also added a B2B offering that's really just now getting going, and we're seeing some early green shoots on that. So I think the outlook for us is strong, but the last year's production really hasn't shown that yet. So we're looking to that growth into 2026. Okay. Good points there, Julie. And just to give some context to the 8 people, that's a 45% increase from where we were a year ago on MLOs at no direct expense. It's a variable cost that's commission-based. Okay. That's really helpful. And then if I could ask one last one, you're almost a double-digit grower in 2025 on loans and deposits.
Good, good point sir, Julian. And just to give some context to the 8 people, that's up. 45% increase from where we were a year ago on mlos at at no direct expense. It's a, it's a variable cost that's commission based
I would expect that, you know, second and third quarters of the coming year, 2026, are going to be, um, you know, seasonally stronger than the first and fourth. So I think we have good outlook there. I think we're doing the right things, um, and then to add on to the whole planning conversation, we have, uh, a lot of really strong momentum in that business line, and still feel really good about what we're doing there. We've also added a, a B2B offering, um, that's really just now getting going, and we're seeing some early, um, green shoots on that. So I think the outlook for us is strong. But the last, um, you know, year's production—
Really hasn't shown that yet. So we're, um, we're looking to, uh, to that growth into 2026.
Okay. Um, that's really helpful. And then if I could ask 1 last 1, you know, you're almost a double digit grower in 25 on loans and deposits. You know, is does the outlook for you guys as you see it in your account is in markets? Does that suggest another similar performance in 26? Or any thoughts on how you see the pipelines playing out for the year?
Good, good point, sir, Julian. And just to give some context to the 8 people, that's up—a 45% increase from where we were a year ago on MLOs, at no direct expense. It's a variable cost that's commission-based.
Operator: Does the outlook for you guys, as you see it in your economies and markets, suggest another similar performance in 2026? Or any thoughts on how you see the pipelines playing out for the year? We are expecting growth in 2026 in line with what we saw in 2025. We continue, as you know, Brett, to have really small market share in all of our markets. We're in strong economies. I mean, I think the big change that we've really seen in the past few months is this market disruption. And it continues, and in fact, is accelerating. It's creating all this opportunity for talent and for new clients. We set up this disruption task force. When Julie was that? In Q3? Yeah, just yeah, late summer. And we're working through that group on a series of very specific recruiting, sales, and marketing initiatives.
Operator: Does the outlook for you guys, as you see it in your economies and markets, suggest another similar performance in 2026? Or any thoughts on how you see the pipelines playing out for the year? We are expecting growth in 2026 in line with what we saw in 2025. We continue, as you know, Brett, to have really small market share in all of our markets. We're in strong economies. I mean, I think the big change that we've really seen in the past few months is this market disruption. And it continues, and in fact, is accelerating. It's creating all this opportunity for talent and for new clients. We set up this disruption task force. When Julie was that? In Q3? Yeah, just yeah, late summer. And we're working through that group on a series of very specific recruiting, sales, and marketing initiatives.
Okay. Um that's really helpful. And then if I could ask 1 last 1, you know, you're almost a double digit grower in 25 on loans and deposits. You know, is does the outlook for you guys as you see it in your economies and markets? Does that suggest another
you know, it continues and in fact is accelerating and it's creating all this opportunity for talent and for a new clients
You know, we we set up this disruption task force.
Similar performance in '26, or any thoughts on how you see the pipelines playing out for the year?
When Julie was at in the third quarter. Yeah, just. Yeah. Late summer. And, and you know, we're working through that group on a series of very specific recruiting and sales and marketing initiatives and we just had our big annual, um, manager Summit the last 2 days.
Uh, we are expecting growth in 2026 in line with what we saw in 2025. You know, we continue, as you know, Brett, to have really small market share in all of our markets. We're in strong economies. I mean, I think the big change that we've really seen in the past few months is this market disruption, and, you know, it continues and in fact is accelerating. It's creating all this opportunity for talent and for new clients.
You know, we set up this disruption task force.
And and the and the success stories coming out of that were remarkable. I mean, it there's just a lot of momentum in the field from, you know, prospects that don't want to be with these new organizations. And they want a stable local expert team and and an expert, uh, stable local institution and and I think that's especially true in our niche.
with um,
Operator: And we just had our big annual manager summit the last two days, and the success stories coming out of that were remarkable. I mean, there's just a lot of momentum in the field from prospects that don't want to be with these new organizations, and they want a stable local expert team and an expert stable local institution. And I think that's especially true in our niche with the private bank and trust focus. And with strong, healthy, and diverse economies, I think all that's going to continue on into 2026 and give us good opportunity for balance sheet growth. Okay. Great. Appreciate all the color. Thank you. Our next question is on the line of Woody Lay of KBW. Your line is now open. Hey, thanks for taking the questions. Wanted to start on the expense outlook.
Operator: And we just had our big annual manager summit the last two days, and the success stories coming out of that were remarkable. I mean, there's just a lot of momentum in the field from prospects that don't want to be with these new organizations, and they want a stable local expert team and an expert stable local institution. And I think that's especially true in our niche with the private bank and trust focus. And with strong, healthy, and diverse economies, I think all that's going to continue on into 2026 and give us good opportunity for balance sheet growth. Okay. Great. Appreciate all the color. Thank you. Our next question is on the line of Woody Lay of KBW. Your line is now open. Hey, thanks for taking the questions. Wanted to start on the expense outlook.
you know the um, Private Bank and Trust Focus.
and,
When Julie was at in the third quarter, you know, just, yeah, late summer, and, you know, we're working up through that group on a series of very specific recruiting and sales and marketing initiatives, and we just had our big annual, um, Manager Summit the last two days.
Um, be strong and healthy and diverse economies. I think all that's going to continue on into 26, and give us good opportunity for for balance sheet growth.
Okay. Great. Appreciate all the color.
Thank you, question.
In our next question, concerning the line of Woody lay of KBW, gilang is not open.
And and the and the success stories coming out of that were remarkable. I mean, it there's just a lot of momentum in the field from, you know, prospects that don't want to be with these new organizations. And they want a stable local expert team and, and an expert, uh, stable local institution. And and I think that's, especially true in our Niche with, um, you know, the um, Private Bank and Trust Focus.
Healthy and diverse economies—I think all that's going to continue on into '26 and give us good opportunity for balance sheet growth.
Okay, great. Appreciate all the color.
Thank you, question.
Hey, thanks for taking the questions. Um, wanted to start on the expense Outlook if I adjust for, um, that Oreo adjustment, it was good to see sort of the core run rate flat. Um, you talked about, you know, continuing the 1, uh, want to invest in the in, in the business aspect of the m&a disruption. So how should we think about the expense growth rate in 2026?
You know, the way we've talked about it internally is, you know, we wanted to keep our expense.
In our next question, this comes from the line of Woody Lay of KBW. Gilang is not open.
Operator: If I adjust for that OREO adjustment, it was good to see sort of the core run rate flat. You talk about continuing to want to invest in the business, especially given the M&A disruption. So how should we think about the expense growth rate in 2026? The way we've talked about it internally is we wanted to keep our expense below $20 million a quarter, and I think we've done that. Did you go back and look, David? I've been saying it's something like 12 quarters in a row. I don't know exactly, but certainly over the last eight quarters, that's been true. And so I think that's kind of our base case is how do we drive more efficiency and more effective teamwork here without driving up expenses.
Operator: If I adjust for that OREO adjustment, it was good to see sort of the core run rate flat. You talk about continuing to want to invest in the business, especially given the M&A disruption. So how should we think about the expense growth rate in 2026? The way we've talked about it internally is we wanted to keep our expense below $20 million a quarter, and I think we've done that. Did you go back and look, David? I've been saying it's something like 12 quarters in a row. I don't know exactly, but certainly over the last eight quarters, that's been true. And so I think that's kind of our base case is how do we drive more efficiency and more effective teamwork here without driving up expenses.
Uh below 20 million dollars a quarter and I think we've done that. Did you go back and look David? I've been saying it's something like 12 quarters in a row. I I don't know exactly. But but certainly over the last 8 quarters that's been true. And uh and so I think that's kind of our base case is, you know, how do we drive more efficiency and more effective?
Hey, thanks for taking the questions. Um, wanted to start on the expense Outlook if I adjust for, um, that Oreo adjustment, it was good to see sort of the core run rate flat. Um, you talked about, you know, continuing the 1, uh, want to invest in the in, in, in the business, especially given the m&a disruption. So how should we think about the expense growth rate in 2026?
You know, the way we've talked about it internally is, you know, we wanted to keep our expense.
Uh, below $20 million a quarter, and I think we've done that. Did you go back and look, David? I've been saying it's something like 12 quarters in a row.
I don't know exactly, but certainly over the last eight quarters that's been true, and uh, and so I think that's kind of our base case is, you know, how do we drive more efficiency and more effectiveness?
Operator: But having said that, and this was very much in your question, Woody, if we see opportunities, we have an internal business case process, and we've told our people, "If you can bring in some good people that are going to have a strong short-term and long-term impact, we want to hear about it. We want to look at it and support you with that." So I think we're doing the best of both worlds here where we can manage expenses, grow revenues, get that operating leverage. And if we see opportunities for more revenue growth, go ahead and invest in that. That's the outlook we're taking for 2026. Got it. So if I pair that with the commentary of growth remaining strong, the NIM should continually grind higher, how should we think about the profitability improvement potential in 2026?
Operator: But having said that, and this was very much in your question, Woody, if we see opportunities, we have an internal business case process, and we've told our people, "If you can bring in some good people that are going to have a strong short-term and long-term impact, we want to hear about it. We want to look at it and support you with that." So I think we're doing the best of both worlds here where we can manage expenses, grow revenues, get that operating leverage. And if we see opportunities for more revenue growth, go ahead and invest in that. That's the outlook we're taking for 2026. Got it. So if I pair that with the commentary of growth remaining strong, the NIM should continually grind higher, how should we think about the profitability improvement potential in 2026?
Teamwork here without driving up expenses. Um, but having said that and this was very much in your question, would he? Uh, you know, if we see opportunities, you know, we have an internal business case process and we told our people, you know, if you can bring in some good people that are going to have a strong short-term and long-term impact, uh, we want to hear about it. We want to look at it and, and, uh, support you with that. So, uh, I I, I think, I think we're doing The Best of Both Worlds here where we can, you know, manage expenses, grow revenues, get that operating leverage. And if we see opportunities for more Revenue growth, go ahead and invest in that. That's, uh, you know, the Outlook we're taking for 26.
Got it. Um,
So if I, if if I pair that with the commentary of of growth remaining strong, um, you know, the NIMS should continue to grind higher.
How how should we think about?
The profitability Improvement potential in 2026 that they're kind of in in Roa range that you're hoping to be at by year end.
Uh, teamwork here without driving up expenses. Um, but having said that—and this was, uh, very much in your question—would he? Uh, you know, if we see opportunities, you know, we have an internal business case process and we told our people, you know, if you can bring in some good people that are going to have a strong short-term and long-term impact, uh, we want to hear about it. We want to look at it and, and, uh, support you with that. So, uh, I—I think, I think we're doing the best of both worlds here, where we can, you know, manage expenses, grow revenues, get that operating leverage. And if we see opportunities for more revenue growth, go ahead and invest in that. That's, uh, you know, the outlook we're taking for '26.
Yeah, there is but I'm sworn to secrecy. I'll, I'll keep my answer and uh, let Julia and David do their rebuttal if they want, you know. Um,
Got it.
Um,
if you, if you look at our operating run rate,
In the third quarter and again in the fourth quarter.
so if I, if if I pair that with the commentary of of growth remaining strong, um, you know, the NIMS should continue to grind higher.
How should we think about that?
Operator: Is there kind of an ROA range that you're hoping to be at by year-end? Yeah, there is, but I'm sworn to secrecy. I'll keep my answer and let Julie and David do their rebuttal if they want. If you look at our operating run rate in Q3 and again in Q4, we're doing something like $0.50 a quarter if you take out things like that OREO write-down, which again, that was a decision we made. We had this last property up in Aspen in Basalt, actually near Aspen. There were some unpermitted construction done by the former owner that we foreclosed on, and the city has just really taken it out on us and made it very difficult for us to sell that thing given the strong attributes but the unpermitted construction that was done on it.
Operator: Is there kind of an ROA range that you're hoping to be at by year-end? Yeah, there is, but I'm sworn to secrecy. I'll keep my answer and let Julie and David do their rebuttal if they want. If you look at our operating run rate in Q3 and again in Q4, we're doing something like $0.50 a quarter if you take out things like that OREO write-down, which again, that was a decision we made. We had this last property up in Aspen in Basalt, actually near Aspen. There were some unpermitted construction done by the former owner that we foreclosed on, and the city has just really taken it out on us and made it very difficult for us to sell that thing given the strong attributes but the unpermitted construction that was done on it.
You know, we're doing something like fifty cents a quarter, if you take out things like that, um, boil, write down which again, you know, that was a decision. We made, we, we had
In this last property up in Aspen.
The profitability improvement potential in 2026— is there kind of an ROA range that you're hoping to be at by year-end?
in in Basalt, to actually near Aspen and
Yeah, there is, but I'm sworn to secrecy. I think my answer—and, uh, Julia, David, do their rebuttal if they want, you know. Um,
And and there were some unpermitted construction done by the former owner that we foreclosed on, and the city has just really taken it out on us and made it very difficult.
If you look at our operating run rate,
In the third quarter, and again in the fourth quarter.
You know, we're doing something like $0.50 a quarter. If you take out things like that, um, oil write-down, which again, you know, that was a decision we made, we, we had
It’s this last property up in Aspen.
in Basalt, actually near Aspen, and
Operator: And so we've been back and forth and back and forth with them. We had a buyer that was really interested, and she worked with the city, and she couldn't get them anywhere. And then we have a buyer now that put it under contract and is taking it kind of as is. And he was supposed to close in December, and he hasn't finished his diligence yet. So we gave him a 60-day extension. His request was to close in February. And the update from this week is he's on track. So I think that's going to get sold. It's a $1.4 million write-down from the discounted value that we had already put on it. So frankly, we're looking forward to having that off our books, not having OREO. So that is a one-time thing. We don't have other OREO. We had that marked below our appraised value.
Operator: And so we've been back and forth and back and forth with them. We had a buyer that was really interested, and she worked with the city, and she couldn't get them anywhere. And then we have a buyer now that put it under contract and is taking it kind of as is. And he was supposed to close in December, and he hasn't finished his diligence yet. So we gave him a 60-day extension. His request was to close in February. And the update from this week is he's on track. So I think that's going to get sold. It's a $1.4 million write-down from the discounted value that we had already put on it. So frankly, we're looking forward to having that off our books, not having OREO. So that is a one-time thing. We don't have other OREO. We had that marked below our appraised value.
Extension and his request for us to close in February, and the update from this week is, he's on track. So I think that's going to get. So it's a million 4 write down from the, um, discounted value that we had already put on it. Um,
And, and there were some unpermitted construction done by the former owner that we foreclosed on, and the city has just really taken it out on us and made it very difficult for us to sell that thing, given, you know, the strong attributes but the unpermitted construction that was done on it. And so we went back and forth and back and forth with them. We had a buyer that was really interested, and she worked with the city and she couldn't get them anywhere. And then we have a buyer now that put it under contract and is taking it kind of as is, and he was supposed to close in December and he hasn't finished his diligence yet. So we gave him a 60-day extension, and his request was to close in February, and the update from
This week, as he's on track. So, I think that's going to get sold. It's a $1.4 million write-down from the, um, discounted value that we had already put on it. Um,
Operator: We worked hard to realize that value at some point. That's not really our highest and best use of our executive's time and effort. So hopefully that'll get sold here in Q1. So if you take that out and you look at kind of the typical monthly expenses, and we always have puts and takes, and I'm not adjusting for that. I'm saying if you take out the big things and you kind of run through the net interest income, you look through the fee income, you look through the operating expenses, we're doing kind of a $2 run rate, and it improved actually a little bit from Q3 to Q4. So that's my starting point going forward is under a normal world, we ought to be starting the year at a 2% operating run rate, $2. That was wishful thinking, a 2% thing, $2 a share operating run rate.
Operator: We worked hard to realize that value at some point. That's not really our highest and best use of our executive's time and effort. So hopefully that'll get sold here in Q1. So if you take that out and you look at kind of the typical monthly expenses, and we always have puts and takes, and I'm not adjusting for that. I'm saying if you take out the big things and you kind of run through the net interest income, you look through the fee income, you look through the operating expenses, we're doing kind of a $2 run rate, and it improved actually a little bit from Q3 to Q4. So that's my starting point going forward is under a normal world, we ought to be starting the year at a 2% operating run rate, $2. That was wishful thinking, a 2% thing, $2 a share operating run rate.
so, you know, frankly, we're, we're looking forward to having that off our folks not having Oreo. So that, that is a 1 time thing. We don't have other Oreo. We had that marked below our appraised value. Uh, we worked hard to realize that value at some point, you know, that's not really our highest and best use of our executive's time and effort. So I hopefully that'll get sold here in q1. So if you take that out and you look at kind of the the typical monthly expenses and and we always have puts and takes and I, and I'm not adjusting for that. I'm saying, you know, if you take out the big things and you kind of run through the net interest income, you look you look through the fee income, you look through the operating expenses you know. We're doing kind of a 2 dollar run rate uh and it improved actually a little bit from Q3 to Q4 so that's my starting point. Going forward is under a normal World. We ought to be starting the year at a 2% operating run rate to 2 dollar.
Uh, that was wishful. Thinking a 2% thing. Um, 2 dollar, a share, um, uh, operating run rate and then I I do think we can grow from there. You know, we have said our near-term objective here is to get to a 1% Roa. Um, which would be, you know, 350 is
In a normal world, we ought to be starting the year at a 2% operating run rate. Twenty-two.
Operator: And then I do think we can grow from there. We have said our near-term objective here is to get to a 1% ROA, which would be 350-ish. And so we got people focused on that. Can we get there on a run rate basis this year? I think that's pretty stretchy, but I think we will get there. And I think we can get beyond that, but we have to get there first with the improvements in NIM and the operating growth and the impact of all these initiatives we've been talking about. We seem well on the way. Is there anything, David or Julie, you want to add? Yeah. No, not for me. Well, that's really helpful, Scott. And I guess just last for me, with a strong loan pipeline, how do you think about matching that with core deposits?
Operator: And then I do think we can grow from there. We have said our near-term objective here is to get to a 1% ROA, which would be 350-ish. And so we got people focused on that. Can we get there on a run rate basis this year? I think that's pretty stretchy, but I think we will get there. And I think we can get beyond that, but we have to get there first with the improvements in NIM and the operating growth and the impact of all these initiatives we've been talking about. We seem well on the way. Is there anything, David or Julie, you want to add? Yeah. No, not for me. Well, that's really helpful, Scott. And I guess just last for me, with a strong loan pipeline, how do you think about matching that with core deposits?
And so, um, you know, we got people focused on that. I can, we get there on a Runway basis this year? I think that's a pretty stretchy. But, um, but you know, I think we will get there and I think we can get beyond that. Uh, but we have to get there first with, um, the improvements in them and the operating growth and, and the impact of all these initiatives we've been talking about, uh, we seem well on the way.
Is there anything David or Julie? You want to add and
Yeah, no not for me.
Uh, that was wishful thinking—a 2% thing, um, $2 a share, um, uh, operating run rate, and then I do think we can grow from there. You know, we have said our near-term objective here is to get to a 1% ROA. Um,
Which would be, you know, $350 if
And so, um, you know, we've got people focused on that. Can we get there on a runway basis this year? I think that's, uh, pretty stretchy. But, um,
Well, that's, that's really helpful car. And, and I guess just the last for me, you know, with, with a strong loan pipeline. Um, how how do you think about matching that with core deposits? You know, the growth has been a little lumpy as you've optimized the balance sheet, um, but it was just curious on your thoughts on on, maybe the deposit, uh, competition in the next year,
You know, I think we will get there, and I think we can get beyond that. Uh, but we have to get there first with, um, the improvements in them and the operating growth and the impact of all these initiatives we've been talking about. Uh, we've seen, well on the way.
Is there anything, David or Julie, you want to add?
no, not for me.
Yeah. You know the teams really focused on that. And 1 of the questions we asked folks, well, they were here for the summit.
Uh, was, you know, how do you feel about the loan Pipeline and the deposit Pipeline and, you know, the feedback is that both are strong. I think the focus that we put on the deposit side, uh, seems to be paying
Operator: The growth has been a little lumpy as you've optimized the balance sheet, but just curious on your thoughts on maybe the deposit competition in the next year? Yeah. The team's really focused on that. And one of the questions we asked folks while they were here for the summit was, "How do you feel about the loan pipeline and the deposit pipeline?" And the feedback is that both are strong. I think the focus that we've put on the deposit side seems to be paying dividends in terms of that new business. Historically, if you look back at the 22-year, whatever history of First Western, we have found that at the margin when we need deposits to fund the loan opportunities that we want to do, we can bring those in. And there was a period there. Actually, after our last call, it was interesting.
Operator: The growth has been a little lumpy as you've optimized the balance sheet, but just curious on your thoughts on maybe the deposit competition in the next year? Yeah. The team's really focused on that. And one of the questions we asked folks while they were here for the summit was, "How do you feel about the loan pipeline and the deposit pipeline?" And the feedback is that both are strong. I think the focus that we've put on the deposit side seems to be paying dividends in terms of that new business. Historically, if you look back at the 22-year, whatever history of First Western, we have found that at the margin when we need deposits to fund the loan opportunities that we want to do, we can bring those in. And there was a period there. Actually, after our last call, it was interesting.
Uh, dividends in terms of uh, that new business. I
you know, historically, if you look back,
at the,
Well, that that's really helpful car. And, and I guess, just the last for me, you know, with with a strong loan pipeline. Um, how how do you think about matching that with core deposits? You know, the growth has been a little lumpy as you've optimized the balance sheet, um, but it was just curious on your thoughts on on, maybe the deposit, uh, competition in the next year,
Yeah, you know, the team's really focused on that. And one of the questions we asked folks while they were here for the summit.
Uh, was, you know, how do you feel about the loan pipeline and the deposit pipeline? And, you know, the feedback is that both are strong. I think the focus that we put on the deposit side, uh, seems to be paying.
Uh, dividends, in terms of, uh, that new business. I
You know, historically, if you look back,
at the,
Operator: One of our bigger holders texted or emailed Julie and me and said, "Hey, great quarter, good report on the third quarter. Must feel good to get out of the slog of the last couple of years." And for me, that just really resonated that it was kind of a difficult period there with the bank failures and the darling of the private banking industry going out of business and all that. So I think getting out of that slog, getting back on a growth track, getting off of defense, which I feel like we played well to get back on offense. And those are all things that I think are panning out in our deposit growth story, which your use of the term lumpy was kind.
Operator: One of our bigger holders texted or emailed Julie and me and said, "Hey, great quarter, good report on the third quarter. Must feel good to get out of the slog of the last couple of years." And for me, that just really resonated that it was kind of a difficult period there with the bank failures and the darling of the private banking industry going out of business and all that. So I think getting out of that slog, getting back on a growth track, getting off of defense, which I feel like we played well to get back on offense. And those are all things that I think are panning out in our deposit growth story, which your use of the term lumpy was kind.
22 year, whatever history of First Western, you know, we have found that at at the margin when we need deposits to fund the loan opportunities that we want to do. Uh, we can bring those in and there was a period there actually, after our last call it was interesting. 1 of our bigger holders texted, our email Julian me and said, hey, you know, great quarter good. Good report on the third quarter, uh, it must feel good to get out of the slog of the last couple years. And, and for me, that just really resonated that that, you know, it was kind of a, a difficult period there with, you know, the bank failures and the, you know, the darling of, um, of the private banking industry going out of business and all that. So uh, I think, you know, getting out of that slot getting back on a growth track bit getting off of Defense, which I feel like we played well to get back on offense and those are all things that I think are are panning out in our deposit growth story which you you're
22 year, whatever history of First Western, you know, we have found that at the margin when we need deposits to fund the loan opportunities that we want to do. Uh we can bring those in and there was a period there actually after our last call it was interesting. 1 of our bigger holders texted, our email Julian. Me and said, hey, you know, great quarter good. Good report on the third quarter, uh, must feel good to get out of the slog of the last couple years. And, and for me, that just really resonated the, the, you know, it was kind of a, a difficult period there with, you know, the bank failures and the, you know, the darling of um, of the private banking industry going out of business and all that. So uh, I think, you know, getting out of that slot getting back on a growth track bit getting off of Defense, which I feel like we played well to get back on offense and those are all things that I think are are panning out in our deposit growth story which you you're
Operator: I mean, that was obviously not what we would choose to see all that great growth in Q3, but it did let us run off some of the high-cost deposits in Q4 and in some way kind of proved what we've seen over the years, which is when we want deposits, we can bring them in, and when we don't need them, we can pay them off. And those things help NIM. And I like the NIM slide this quarter. I'm not sure which page that's on, but if you look at kind of the full-year trend for the last five quarters, it shows a nice upward trend that gets us, is that page 9, Julie? Yeah. It gets us on this trajectory back to 310, 315 that I've talked about before that historically we've seen in our banks. I appreciate all the insight. Thanks for taking my questions. Thank you.
Operator: I mean, that was obviously not what we would choose to see all that great growth in Q3, but it did let us run off some of the high-cost deposits in Q4 and in some way kind of proved what we've seen over the years, which is when we want deposits, we can bring them in, and when we don't need them, we can pay them off. And those things help NIM. And I like the NIM slide this quarter. I'm not sure which page that's on, but if you look at kind of the full-year trend for the last five quarters, it shows a nice upward trend that gets us, is that page 9, Julie? Yeah. It gets us on this trajectory back to 310, 315 that I've talked about before that historically we've seen in our banks. I appreciate all the insight. Thanks for taking my questions. Thank you.
That's uh, I I appreciate all the Insight. Thanks for taking my questions.
Thank you movement, for our next question.
In our next question, comes from line of Matthew Clark of piperrranne. Unionized not open.
Hey, good morning, everyone.
um,
just the first question on the deposit beta 54% this quarter from an interest bearing perspective.
Use of the term. Lumpy was kind. I mean, that was obviously, um, not what we would choose to see all that great growth in Q3. But it did let us run off some of the high cost deposits in Q4. And in some way kind of proved what we've seen over the years, which is when we want deposits, we can bring them in. And we, when we don't need them, we can pay them off and those things helped them and and you know, I like the name slide this quarter, not sure which page that's on. But if you look at, you know, kind of the full year trend for the last 5, quarters it, it it shows a nice upward Trend that gets us. Is that? Is that page 9, Julie? Yeah, you know, it gets us, um, on this trajectory back to 310, 315 that I've talked about before that historically we've seen in, in our banks.
Do you feel like you can hold that kind of mid-50s beta this year? Or do you feel like that might come down a little bit?
No, I think we can hold that.
That's, uh, I appreciate all the insight that you're going to take my questions.
Operator: We'll move on for our next question. Our next question comes from the line of Matthew Clark of Piper Sandler. Your line is now open. Hey, good morning, everyone. Good morning. Just the first question on the deposit beta, 54% this quarter from an interest-bearing perspective. Do you feel like you can hold that kind of mid-50s beta this year, or do you feel like that might come down a little bit? No, I think we can hold that. Okay. And then do you have the spot rate? An unhedged response. I like it. Yeah. I mean, we have seen it come down, you know, man. And we do think that—well, David said it. Yep. Okay. And then do you have the spot rate on deposits at the end of the year? Yeah. It was 286. 286. Okay. Got it.
Operator: We'll move on for our next question. Our next question comes from the line of Matthew Clark of Piper Sandler. Your line is now open. Hey, good morning, everyone. Good morning. Just the first question on the deposit beta, 54% this quarter from an interest-bearing perspective. Do you feel like you can hold that kind of mid-50s beta this year, or do you feel like that might come down a little bit? No, I think we can hold that. Okay. And then do you have the spot rate? An unhedged response. I like it. Yeah. I mean, we have seen it come down, you know, man. And we do think that—well, David said it. Yep. Okay. And then do you have the spot rate on deposits at the end of the year? Yeah. It was 286. 286. Okay. Got it.
And then do you have the spot Raymond?
I'm head.
Thank you movement, for our next question.
Response. I like it. Yeah. I mean, we have seen it come down. You know, man. And and and and we do think that um,
Our next question comes from the line of Matthew Clark of Piper Sandler. Your line is now open.
Well, David said it.
Hey, good morning, everyone.
um,
Yep. Okay. And then do you have the spot right on deposits at the end of the year?
Yeah, it was 286.
Just the first question on the deposit beta—54% this quarter from an interest-bearing perspective.
286.
Okay.
Got it.
and then,
Do you feel like you can hold that kind of mid-50s beta this year, or do you feel like that might come down a little bit?
No, I think we
Assuming that's the case.
And then, do you have the spot, Raven?
And just thinking about the near-term.
Margin.
Kind of implies your Betta steps up here, actually in the first quarter. Um,
An uned response, I like it. Yeah. I mean, we have seen it come down, you know, man. And, and, and we do thank you that, um,
you know, with the
Well, David said it.
Yep, okay. And then, do you have the spot rate on deposits at the end of the year?
Yeah, it was 286.
With the non interest, bearing deposits down at the end of the year, um, assuming they'll come back to some degree, but, you know, borrowings are up a little bit. You'll likely see some asset yield pressure.
286. Okay.
From the December rate cut on the floating rate portfolio, which I think is 25% of the book.
Operator: And then assuming that's the case and just thinking about the near-term margin, kind of implies your beta steps up here actually in Q1. With the non-interest-bearing deposits down at the end of the year, assuming they'll come back to some degree, but borrowings are up a little bit. You'll likely see some asset yield pressure from the December rate cut on the floating rate portfolio, which I think is 25% of the book. It appears like your NIM might come down a little bit here in Q1, but I'd love to hear your thoughts and tell me why I'm wrong. Our NIM in the month of December was 272. Okay. Okay. But in terms of the end-of-period balance sheet, you don't think there's some incremental pressure there? No, I don't. All right. Fair enough.
Operator: And then assuming that's the case and just thinking about the near-term margin, kind of implies your beta steps up here actually in Q1. With the non-interest-bearing deposits down at the end of the year, assuming they'll come back to some degree, but borrowings are up a little bit. You'll likely see some asset yield pressure from the December rate cut on the floating rate portfolio, which I think is 25% of the book. It appears like your NIM might come down a little bit here in Q1, but I'd love to hear your thoughts and tell me why I'm wrong. Our NIM in the month of December was 272. Okay. Okay. But in terms of the end-of-period balance sheet, you don't think there's some incremental pressure there? No, I don't. All right. Fair enough.
Got it.
and then,
Um, it's it appears like your Nim might come down a little bit here in the first quarter, but I'd love to hear your thoughts and
Assuming that's the case.
tell me why I'm wrong.
And just thinking about the near term.
Margin.
Our name is the month of December was 272.
Okay.
Kind of implies your betta steps up here, actually in the first quarter. Um,
you know, with the
Okay. Okay, but but in terms of the end of period balance sheet, you don't think there's something incremental pressure there.
No, I don't.
All right.
With the non-interest bearing deposits down at the end of the year, assuming they'll come back to some degree, but, you know, borrowings are up a little bit. You'll likely see some asset yield pressure.
Fair enough. Um,
and then the other 1, I had,
From the December rate cut on the floating rate portfolio, which I think is 25% of the book.
uh,
Um, it appears like your NIM might come down a little bit here in the first quarter, but I'd love to hear your thoughts and
Actually, I think it was already asked and answered uh, on expenses. Um, that's it for me. Thanks.
tell me why I'm wrong.
All right. Thank you. Ma'am. Thanks, bye.
Our name and the month of December was 272.
Thank you. 1 moment for our next question.
Okay.
Our next question comes from the line of Bill desalin of Titan Capital Management in life. Now open,
Okay, but in terms of the end-of-period balance sheet, you don't think there's some incremental pressure there?
No, I don't.
All right.
Operator: And then the other one I had, actually, I think it was already asked and answered on expenses. That's it for me. Thanks. Thank you, Matthew. Thanks. Bye. Thank you. We'll move on for our next question. Our next question comes from the line of Bill Dezellem of Tieton Capital Management. Your line is now open. Thank you. Two questions from the balance sheet. The first one is mortgage loans for sale jumped in the fourth quarter from, I think, $22 million or so in Q3 up to $40 million in Q4. Would you discuss the dynamics behind that, please? You're asking about the mortgage loans-for-sale balance? Yes. That's right. Yeah. Yeah. There are timing dynamics there. Timing of when the sales occur relative to the end of period.
Operator: And then the other one I had, actually, I think it was already asked and answered on expenses. That's it for me. Thanks. Thank you, Matthew. Thanks. Bye. Thank you. We'll move on for our next question. Our next question comes from the line of Bill Dezellem of Tieton Capital Management. Your line is now open. Thank you. Two questions from the balance sheet. The first one is mortgage loans for sale jumped in the fourth quarter from, I think, $22 million or so in Q3 up to $40 million in Q4. Would you discuss the dynamics behind that, please? You're asking about the mortgage loans-for-sale balance? Yes. That's right. Yeah. Yeah. There are timing dynamics there. Timing of when the sales occur relative to the end of period.
Fair enough. Um,
And then the other one I had,
uh,
thank you. Uh, 2 questions from the balance sheet. The first 1 is mortgage loans for sale. Uh, jumped in the fourth quarter, uh, from I think 22 million or so, in Q3 up to 40 million, in Q4. Would you discuss the Dynamics behind that, please?
Actually, I think it was already asked and answered—uh, on expenses. Um, that's it for me. Thanks.
You're you're asking about the mortgage health for sale balance.
That's right. Yeah.
Thank you. One moment for our next question.
Yeah, there are, there are timing Dynamics there. Um,
Our next question comes from the line of Bill Desalin of Titan Capital Management. Bill, you may now open your line.
Timing of when the sales occur, um, you know, relative to the end of the period, explain what those are.
Thank you. Uh, two questions from the balance sheet. The first one is mortgage loans for sale jumped in the fourth quarter, uh, from I think $22 million or so in Q3 up to $40 million in Q4. Would you discuss the dynamics behind that, please?
You're asking about the mortgage held-for-sale balance.
Which are which are loans that were originating and selling in secondary markets that are on the balance sheet in the intro. Yeah, yeah. Yeah. Those those loans are originated for the purpose. Um, from the beginning of, you know, application and lock and everything. Those are originated for the purpose of selling, so you know, the balance typically will kind of trend up and then we'll package that
That's right. Yeah.
Yeah, there are timing dynamics there. Um,
Operator: Explain what those are, which are loans that were originating and selling in the secondary market that are on the balance sheet in the interim. Yeah. Yeah. Those loans are originated for the purpose from the beginning of application and lock and everything. Those are originated for the purpose of selling. So the balance typically will kind of trend up, and then we'll package those, and we'll do a sale and move those off the balance sheet. So it does get impacted simply just by the timing of when those sales occur relative to the end of the period. Your question's a good one, though, Bill, because generally, when volumes are higher, that balance goes up, but then it's also offset by this timing thing that David was talking about. So I wouldn't read too much into that.
Operator: Explain what those are, which are loans that were originating and selling in the secondary market that are on the balance sheet in the interim. Yeah. Yeah. Those loans are originated for the purpose from the beginning of application and lock and everything. Those are originated for the purpose of selling. So the balance typically will kind of trend up, and then we'll package those, and we'll do a sale and move those off the balance sheet. So it does get impacted simply just by the timing of when those sales occur relative to the end of the period. Your question's a good one, though, Bill, because generally, when volumes are higher, that balance goes up, but then it's also offset by this timing thing that David was talking about. So I wouldn't read too much into that.
Timing of when the sales occur, um, you know, relative to the end of the period—explain what those are.
those and we'll do a sale and move those off the balance sheet so it it does get impacted simply just by the timing um of when those sales occur relative to you know, the end of the the period, your your your questions a good 1 though bill because generally when volumes are higher, that balance goes up,
But then it's also offset by this timing thing that David was talking about. So I wouldn't read too much into that.
And part of the, I guess, uh, backdrop of the spirit of the question was wondering if there was some Dynamic that you saw in the market, uh, whether it was sale premiums or something else that led you to conclude, you wanted to hold those a little bit longer or if it truly was simply a timing and getting, uh, proper proper volume set up for for your sale.
Which are, which are loans that were originating and selling the secondary Market that are on the balance in the intro. Yeah. Yeah, those those loans are originated for the purpose. Um, from the beginning of, you know, application and lock and everything. Those are originated for the purpose of selling, so you know, the balance typically will kind of trend up and then we'll package those and we'll do a sale and move those off the balance sheet so it it does get impacted simply just by the timing um of when those sales occur relative to, you know, the end of the the period, your your your questions a good 1 though bill because generally when volumes are higher, that balance goes up,
No, it's mechanical. We we don't we don't play that game.
But then it's also offset by this timing thing that David was talking about. So,
Operator: Part of the, I guess, backdrop of the spirit of the question was wondering if there was some dynamic that you saw in the market, whether it was sale premiums or something else, that led you to conclude you wanted to hold those a little bit longer, or if it truly was simply timing and getting proper volume set up for your sale. No, it's mechanical. We don't play that game. So it's truly just a timing phenomenon. Correct. Okay. Thank you. Then the other question was relative to your construction and development loans. You had a pretty significant reduction in the amount of those loans. And the question is whether that was an intentional risk mitigation strategy or whether it was all part of the normal ebb and flow of bringing on new loans and loans paying off, moving out of that C and D category.
Operator: Part of the, I guess, backdrop of the spirit of the question was wondering if there was some dynamic that you saw in the market, whether it was sale premiums or something else, that led you to conclude you wanted to hold those a little bit longer, or if it truly was simply timing and getting proper volume set up for your sale. No, it's mechanical. We don't play that game. So it's truly just a timing phenomenon. Correct. Okay. Thank you. Then the other question was relative to your construction and development loans. You had a pretty significant reduction in the amount of those loans. And the question is whether that was an intentional risk mitigation strategy or whether it was all part of the normal ebb and flow of bringing on new loans and loans paying off, moving out of that C and D category.
I wouldn’t read too much into that.
Correct.
Okay, thank you. And then the other question was relative to your uh construction and development loans. Uh you had a pretty significant reduction in the amount of those loans. And and the question is whether that was an intentional risk mitigation strategy, or whether it was all part of the normal ebb and flow of of
And part of the, I guess, uh, backdrop of this period as a question was wondering if there was some dynamic that you saw in the market, uh, whether it was sale premiums or something else, that led you to conclude you wanted to hold those a little bit longer, or if it truly was simply a timing and getting proper volume set up for your sale.
No, it's mechanical. We don't—we don't play that game.
Bringing on new loans and Loans paying off. Moving out of that CND category.
So, it's truly just a timing phenomenon, correct?
Let's see much more the former than the latter. We we had a
uh,
Review of that portfolio weighting months ago, something like that. Yeah. And felt like that was as high as we wanted it to get, and we wanted to work it down and so, if you look on page 5, you can see. That's gone, you know, 315 230189.
and,
Operator: I would say much more the former than the latter. We had a review of that portfolio 18 months ago, something like that, and felt like that was as high as we wanted it to get, and we wanted to work it down. So if you look on page 5, you can see that's gone 315, 230, 189. And actually, a lot of the increase that we've seen in non-owner-occupied CRE is those construction projects getting finished and then moving on to our investor real estate. And I don't think that those generally sit there very long because they get refinanced into permanent financing. So that's something that I think we'll continue to see: there is less of an increase in that investor real estate line item too. Great. Thank you. Thank you. We'll move on for our next question.
Operator: I would say much more the former than the latter. We had a review of that portfolio 18 months ago, something like that, and felt like that was as high as we wanted it to get, and we wanted to work it down. So if you look on page 5, you can see that's gone 315, 230, 189. And actually, a lot of the increase that we've seen in non-owner-occupied CRE is those construction projects getting finished and then moving on to our investor real estate. And I don't think that those generally sit there very long because they get refinanced into permanent financing. So that's something that I think we'll continue to see: there is less of an increase in that investor real estate line item too. Great. Thank you. Thank you. We'll move on for our next question.
Okay, thank you. And then the other question was relative to your uh construction and development loans. Uh you had a pretty significant reduction in the amount of those loans. And and the question is whether that was an intentional risk mitigation strategy, or whether it was all part of the normal ebb and flow of of bringing on new loans and Loans paying off the moving out of that to see and D category.
I would say much more the former than the latter. We had a
uh,
Actually, a lot of the increase that we've seen in non-owner occupied CRA is that those construction price getting finished and then moving on to our uh, investor real estate. Uh, and and I don't think that those generally sit there very long because they get refinanced into permanent financing.
so, that's
Something that I think.
uh, will continue to see there is uh,
Less of an increase in that, uh, investor real estate, uh, line item.
Review of that portfolio, 18 months ago, something like that. Yeah. And felt like that was as high as we wanted to get, and we wanted to work it down. And so, if you look on page 5, you can see—that's gone, you know, $315, $230, $189.
and,
Great. Thank you.
Thank you. 1 moment for next question.
Getting finished and then moving on.
In our next question, comes from line of Brett. Retan of of the your line is now open.
To our, uh, investor real estate. Uh, and I don't think that those generally sit there very long, because they get refinanced into permanent financing.
so, uh,
so, that's
Something that I think.
Uh, we’ll continue to see—there is, uh,
Hey, just want to follow up around the tax rate, it's been jumping around a lot, the last few quarters. Any um you know, any thoughts on the tax rate from here? And then just any strategies that you guys are implementing um on the on the tax side whether it be Miss bulls or other other things. Thanks.
Less of an increase in that, uh, investor real estate, uh, line item too.
Great. Thank you.
Thank you. One moment for our next question.
Operator: Our next question comes from the line of Brett Rabatin of Hovde Group. Your line is now open. Hey, just wanted to follow up around the tax rate. It's been jumping around a lot the last few quarters. Any thoughts on the tax rate from here? And then just any strategies that you guys are implementing on the tax side, whether it be municipals or other things. Thanks. Yeah. Good question, Brett. The tax rate, I agree. It has been a bit lumpy over the quarters.
Operator: Our next question comes from the line of Brett Rabatin of Hovde Group. Your line is now open. Hey, just wanted to follow up around the tax rate. It's been jumping around a lot the last few quarters. Any thoughts on the tax rate from here? And then just any strategies that you guys are implementing on the tax side, whether it be municipals or other things. Thanks. Yeah. Good question, Brett. The tax rate, I agree. It has been a bit lumpy over the quarters.
Yeah. Uh good question. Brett the the tax rate, I agree. It has been a bit lumpy over the quarters and some of those Dynamics at play. Just have to do with
um, some of our Live tech Investments and
And our next question comes from the line of Grant Retan. Grant, your line is now open.
the K1 losses that flow through. Um, and what the timing of when we actually received that information of the actual losses, versus the projected losses that were kind of using to
To work that through uh, the year for the effective tax rate as well as.
Hey, just wanted to follow up around the tax rate, it's been jumping around a lot, the last few quarters. Any um you know, any thoughts on the tax rate from here? And then just any strategies that you guys are implementing um on the, on the tax side, whether it be municipals or other other things,
Operator: Some of those dynamics at play just have to do with some of our live tech investments, and the K-1 losses that flow through, and the timing of when we actually receive that information of the actual losses versus the projected losses that we're kind of using to work that through the year for the effective tax rate, as well as there are components of equity compensation and the differences that come with that that come at play as well. And that had an impact in the fourth quarter. So that was one of the main drivers of why we saw the fluctuation in the effective tax rate in Q4. But going forward, I think we're more in that 23% to 24% range from an effective tax rate perspective.
Operator: Some of those dynamics at play just have to do with some of our live tech investments, and the K-1 losses that flow through, and the timing of when we actually receive that information of the actual losses versus the projected losses that we're kind of using to work that through the year for the effective tax rate, as well as there are components of equity compensation and the differences that come with that that come at play as well. And that had an impact in the fourth quarter. So that was one of the main drivers of why we saw the fluctuation in the effective tax rate in Q4. But going forward, I think we're more in that 23% to 24% range from an effective tax rate perspective.
Yeah, uh, good question, Brett. The tax rate—I agree—it has been a bit, uh, lumpy over the quarters, and some of those dynamics at play just have to do with...
You know, there are, um, components of equity compensation, and the differences that come with that that come at play, as well, and that, that had an impact in the fourth quarter. So, that's
That that was 1 of the main drivers of why we saw the fluctuation and the effective tax rate um in Q4.
But, you know, going forward.
Um, some of our live tech investments and the K-1 losses that flow through, um, and what the timing is of when we actually receive that information of the actual losses, versus the projected losses that we're kind of using to—
you know, I I think we're more in that 23 to 24% range, um, from a detective effective tax rate perspective,
To work that through, uh, the year for the effective tax rate as well.
we have added, okay.
We have added some uh, tax exempt.
Um,
You know, there are, um, components of equity compensation, and the differences that come with that that come into play as well, and that had an impact in the fourth quarter. So that's—
That was one of the main drivers of why we saw the fluctuation in the effective tax rate in Q4.
interesting come sources. I think over the past 12 months and we're working on another 1 now. We're looking at it. So I mean it's something that we do pay attention to Brett but I think for you know, planning purposes and forecasting purposes, so that 23 24% is a reasonable range.
But, you know, going forward.
Okay, great, that's helpful. Thanks.
Thank you. 1 moment for our next question.
Operator: We have added some tax-exempt interest income sources, I think, over the past 12 months, and we're working on another one now or looking at it. So I mean, it's something that we do pay attention to, Brett, but I think for planning purposes and forecasting purposes, that 23% to 24% is a reasonable range. Okay. Great. That's helpful. Thanks. Thank you. We'll move on for our next question. Our next question comes from the line of Ross Haberman of RLH Investments. Your line is now open. Good morning, Scott. I got on a bit late. Could you just tell me, did you touch upon your opinion of the mortgage market and what your expectations are for 2026? Let's say, I don't know, rates stay about the same or maybe come down a little bit. What's your expectation on your mortgage operation? Thanks. Well, thanks for the question, Ross.
Operator: We have added some tax-exempt interest income sources, I think, over the past 12 months, and we're working on another one now or looking at it. So I mean, it's something that we do pay attention to, Brett, but I think for planning purposes and forecasting purposes, that 23% to 24% is a reasonable range. Okay. Great. That's helpful. Thanks. Thank you. We'll move on for our next question. Our next question comes from the line of Ross Haberman of RLH Investments. Your line is now open. Good morning, Scott. I got on a bit late. Could you just tell me, did you touch upon your opinion of the mortgage market and what your expectations are for 2026? Let's say, I don't know, rates stay about the same or maybe come down a little bit. What's your expectation on your mortgage operation? Thanks. Well, thanks for the question, Ross.
You know, I think we're more in that 23% to 24% range, from a detected effective tax rate perspective.
we have added, okay.
We have added some, uh, tax-exempt.
And our next question comes from line of Ross, tuhan of, rlh Investments. Your line is now open,
Um,
Good morning Scott. Um I I got on a bit late, could you just tell me? Did you, did you touch upon your opinion of the mortgage Market? Uh and what's your expectations are for 26?
It's interesting, some sources. I think over the past 12 months—and we're working on another one now—we're looking at it. So, I mean, it's something that we do pay attention to, breathe. But I think for, you know, planning purposes and for...
Purposes.
That 23% to 24% is a reasonable range.
Okay, great, that's helpful. Thanks.
Uh, let's say, I don't know, rate stays stay about the same or maybe come down a little bit. What your expectation on the on, on your mortgage operation. Thanks.
well, uh,
Thank you. One moment for our next question.
Thanks for the question Ross. You know, we, um,
And our next question comes from the line of Ross Taboo of RLH Investments. Your line is now open.
We have been trying to build our production capability there. Even though the Market's slower and Julie did talk on the call a little bit about you know our experience has been that when the Market's really strong and you want to add more mortgage uh loan officers which are commission-based. The producers,
Good morning, Scott. Um, I got on a bit late. Could you just tell me, did you touch upon your opinion of the mortgage market, and what your expectations are for '26?
Uh, let's say, I don't know, rates stay about the same or maybe come down a little bit. What's your expectation on your mortgage operation? Thanks.
Well.
uh,
Operator: We have been trying to build our production capability there. Even though the market's slower, and Julie did talk on the call a little bit about our experience has been that when the market's really strong and you want to add more mortgage loan officers, which are commission-based, the producers, they won't move because they have a big pipeline wherever they are. So building that team when time's slow is pretty much how we've experienced that you have to do it if you want to get good ones. And so, as we talked about on the call, we've increased that has been a focus for us, and we've deliberately gone out and increased our MLO team by 8 producers in 2025, which is a 45% increase year-over-year. So that's somewhere we're investing.
Operator: We have been trying to build our production capability there. Even though the market's slower, and Julie did talk on the call a little bit about our experience has been that when the market's really strong and you want to add more mortgage loan officers, which are commission-based, the producers, they won't move because they have a big pipeline wherever they are. So building that team when time's slow is pretty much how we've experienced that you have to do it if you want to get good ones. And so, as we talked about on the call, we've increased that has been a focus for us, and we've deliberately gone out and increased our MLO team by 8 producers in 2025, which is a 45% increase year-over-year. So that's somewhere we're investing.
Thanks for the question, Ross. You know, we, um,
We have been trying to build our production capability there. Even though the market's slower—and Julie did talk on the call a little bit about, you know, our experience has been that when the market's really strong and you want to add more mortgage loan officers, which are commission-based—the producers,
Is pretty much how we've experienced that you have to do it if you want to get good ones. And so, uh, as we talked about on the call, we've increased that that has been a focus for us and we've deliberately gone out and increased our mlot by 8, producers in 2025, which is a 45% increase year-over-year. So that's somewhere. We are investing. We do think well investing their commission base so it's not a cost. Um but we're investing effort for sure in building. That team for future. Um, productivity. We do think that there just has to be a lot of pen up demand out there for people that want to move. We know people are going to leave their 2 or 3% mortgages behind.
Operator: We do think, well, investing, they're commission-based, so it's not a cost, but we're investing effort for sure in building that team for future productivity. We do think that there just has to be a lot of pent-up demand out there for people that want to move. We know people aren't going to leave their 2% and 3% mortgages behind, but at some point, if you've got another kid or you're moving or relocating, you need to do that. And we've seen prices, I think, at least in the Denver market, moderate. And so at some point, that's going to create some mortgage opportunities for us, I think. And obviously, the decline we saw this year in this quarter, it's not us. It's the industry. And so I think that we are doing a good job of playing the hand that we're dealt by this industry.
Operator: We do think, well, investing, they're commission-based, so it's not a cost, but we're investing effort for sure in building that team for future productivity. We do think that there just has to be a lot of pent-up demand out there for people that want to move. We know people aren't going to leave their 2% and 3% mortgages behind, but at some point, if you've got another kid or you're moving or relocating, you need to do that. And we've seen prices, I think, at least in the Denver market, moderate. And so at some point, that's going to create some mortgage opportunities for us, I think. And obviously, the decline we saw this year in this quarter, it's not us. It's the industry. And so I think that we are doing a good job of playing the hand that we're dealt by this industry.
But at some point, you know, if you got another kid or you're moving or relocating, you know, you need to do that. And we've seen prices, I think, at least in the Denver Market, moderate. And, uh, and and so at some point, that's going to create some mortgage opportunities for us. I think. And and and, you know, I obviously the decline we saw this year in this quarter, some uh, it's the industry. And and so I I think that we are doing a good job of being
Um, they won't move because they have a big pipeline wherever they are. So, building that team when times slow is pretty much how we've experienced that you have to do it if you want to get good ones. And so, uh, as we talked about in the call, we've increased that—that has been a focus for us, and we've deliberately gone out and increased our MLO team by 8 producers in 2025, which is a 45% increase year-over-year. So that's somewhere we are investing. We do think—well, they're commission-based, so it's not a cost. Um, but we're investing effort for sure in building that team for future, um, productivity. We do think that there just has to be a lot of pent-up demand out there for people that want to move. We know people are going to leave their 2 or 3 percent rates behind.
You know, playing the hand that were dealt by this industry but I I also think we're well positioned that when that comes back uh and we see some growth, we're well positioned to take advantage of it.
Not us, it's the industry. And so I think that we are doing a good job of being
uh,
Um, are you seeing any pickup in that division either in Phoenix or Wyoming or I I I think you opened up was it a lending office in? Boseman, was it, are you seeing are? Those are would those would you see a pickup their first or maybe the Denver area? If you saw in any sort of pickup you so you would it it would show up there first.
Operator: But I also think we're well-positioned that when that comes back and we see some growth, we're well-positioned to take advantage of it. Are you seeing any pickup in that division, either in Phoenix or Wyoming? I think you opened up a—was it a lending office in Bozeman, was it? Are you seeing—would you see a pickup there first, or maybe the Denver area, if you saw any sort of pickup, it would show up there first? We have actually brought in a few MLOs in Arizona, so we've seen some nice production out of that region. And then we've also brought in a few from the Wyoming region, which has really helped us there too. And these are really high-quality producers that have really our type of clients. So some of that you'll see adding to the portfolio. Montana is a little bit trickier.
Operator: But I also think we're well-positioned that when that comes back and we see some growth, we're well-positioned to take advantage of it. Are you seeing any pickup in that division, either in Phoenix or Wyoming? I think you opened up a—was it a lending office in Bozeman, was it? Are you seeing—would you see a pickup there first, or maybe the Denver area, if you saw any sort of pickup, it would show up there first? We have actually brought in a few MLOs in Arizona, so we've seen some nice production out of that region. And then we've also brought in a few from the Wyoming region, which has really helped us there too. And these are really high-quality producers that have really our type of clients. So some of that you'll see adding to the portfolio. Montana is a little bit trickier.
hand that were dealt.
By this industry. But, uh, I
We have um, actually brought in a few mls in Arizona. So we've seen some nice production out of that. Um, region. And then we've also
Also think we're well positioned that when that comes back, uh, and we see some growth, we're well positioned to take advantage of it.
Uh, are you seeing any pickup?
Brought in a few from the Wyoming region, which is really helped us there too. And, and these are really high quality, um,
In that division either in Phoenix or Wyoming, or I I I think you opened up was it a lending office in? Boseman, was it, are you seeing are? Those are would those would you see a pickup their first or maybe the Denver area? If you saw in any sort of pickup you so you would it it would show up there first.
Producers that have really our type of clients, so some of that you'll see adding to the portfolio. Um Montana is a little bit trickier we haven't been successful in finding a, a, a pure play in mallow there. But we have a great lending team and they're capable of doing all of the, The Lending needs. So um, definitely a focus of ours is to make sure that all of the markets are seeing the growth that we want. Um, so and we've been seeing production and all all of the markets,
With that, um, region. And then we've also
and and to be clear, you say, full service,
brought in a few from the Wyoming region, which has really helped us there too. And these are really high quality, um,
Uh, first question profit Center that uh is actually contribution positive. They they've made really nice progress there. Yeah,
Operator: We haven't been successful finding a pure-play MLO there, but we have a great lending team, and they're capable of doing all of the lending needs. So definitely a focus of ours is to make sure that all of the markets are seeing the growth that we want. We've been seeing production in all of the markets. To be clear, Bozeman is a full-service First Western profit center that is actually contribution positive. They've made really nice progress there. Just one other question. Have you been looking around for other operations to buy, either money management, or branches, or other little banks? Are you actively looking in any of those other three markets or any other now that you have a little bit of a currency this year than you had in the year or two past?
Operator: We haven't been successful finding a pure-play MLO there, but we have a great lending team, and they're capable of doing all of the lending needs. So definitely a focus of ours is to make sure that all of the markets are seeing the growth that we want. We've been seeing production in all of the markets. To be clear, Bozeman is a full-service First Western profit center that is actually contribution positive. They've made really nice progress there. Just one other question. Have you been looking around for other operations to buy, either money management, or branches, or other little banks? Are you actively looking in any of those other three markets or any other now that you have a little bit of a currency this year than you had in the year or two past?
And and just 1 1 1 other question. Um,
um,
Producers that have really our type of clients, so some of that you'll see adding to the portfolio. Um Montana is a little bit trickier we haven't been successful in finding a, a, a pure play in mallow there. But we have a great lending team and they're capable of doing all of the, The Lending needs. So um, definitely a focus of ours is to make sure that all of the markets are seeing the growth that we want. Um, so and we've been seeing production and all all of the markets,
have you been looking around for other operations to buy either money management or branches or other little banks? Are you actively looking at in in either in any of those those those other 3 markets or any other now that you have a little bit of a currency?
And to be clear, you say full service,
This year that then then you had uh you know, in the year or 2 past is that on your radar screen? Or or or uh,
Uh, first question: profit center that is actually contribution positive. They've made really nice progress there. Yes.
And, and just one other question. Um,
um,
Thanks.
Have you been looking around for other operations to buy, either money management, branches, or other little banks? Are you actively looking at it in either in any of those three markets or any others, now that you have a little bit of a currency?
Operator: Is that on your radar screen, or that's a backseat, and you would rather, if you found some great relationship bankers, you would rather hire one or two and/or a lift-out rather than a whole bank? Thanks. Yeah. So as you know, we have a long history of acquisitions, and our currency really has not been in a place where that has made sense here for the last couple of years. Our focus is on organic growth. We talked on the call a little bit about all this market disruption. And the beauty of hiring the people you want is you get the business that you want. You don't have to take the stuff you don't want. And so definitely, there's a strong focus here with this disruption task force and with our internal focus on how do we take advantage in an organic way. And that's Front Range.
Operator: Is that on your radar screen, or that's a backseat, and you would rather, if you found some great relationship bankers, you would rather hire one or two and/or a lift-out rather than a whole bank? Thanks. Yeah. So as you know, we have a long history of acquisitions, and our currency really has not been in a place where that has made sense here for the last couple of years. Our focus is on organic growth. We talked on the call a little bit about all this market disruption. And the beauty of hiring the people you want is you get the business that you want. You don't have to take the stuff you don't want. And so definitely, there's a strong focus here with this disruption task force and with our internal focus on how do we take advantage in an organic way. And that's Front Range.
This year, that then, then you had, uh, you know, in the year or two past, is that on your radar screen? Or, or, or, uh,
That's the back seat. And you would rather, if you found some great, um, relationship back—
Yeah, so, uh, as you know we have a long history of, um, Acquisitions and our currency really is not been, uh, in a place where that has made sense here for the last couple of years. Um, our our focus is on organic growth, you know, we talked on the call a little bit about all this Market disruption and, you know, the beauty of hiring the people you want, is you get the business that you want. You don't have to take the stuff you
Don't want.
Bankers, you would rather hire one or two, and, or lift out, rather than that—rather than a whole, uh, uh, bank.
Thanks.
and so uh it definitely does a strong Focus here with this disruption task force and with our internal focus on
Uh, you know, how do we take advantage in an organic way and, and that's Front Range, that's Resort markets, that's Arizona, uh, Montana and Wyoming all of them. So, uh, we, we do think there's a lot of opportunity right now for us to just, you know, do our jobs and get after this organic growth.
Thanks a lot. The best of luck. Thank you.
Yep. Thanks Ross.
Yeah, so, uh, as you know, we have a long history of, um, acquisitions and our currency really has not been, uh, in a place where that has made sense here for the last couple of years. Um, our focus is on organic growth. You know, we talked on the call a little bit about all this market disruption, and, you know, the beauty of hiring the people you want is you get the business that you want. You don't have to take the stuff you don't.
Don't want.
Thank you. I'm showing no further questions at this time, I'll now turn it back to Scott Wy for closing remarks.
Operator: That's resort markets. That's Arizona, Montana, and Wyoming, all of them. So we do think there's a lot of opportunity right now for us to just do our jobs and get after this organic growth. Thanks a lot. The best of luck. Thank you. Yep. Thanks, Ross. Thank you. I'm showing no further questions at this time. I'll now turn it back to Scott Wylie for closing remarks. Great. Thank you. So we said for several quarters that we had success playing defense through that slog of 2022 and 2023, and now we're shifting back onto offense. The headwinds out in the market have changed to tailwinds for 2026, and that's both in financial, economic, and competitive terms.
Operator: That's resort markets. That's Arizona, Montana, and Wyoming, all of them. So we do think there's a lot of opportunity right now for us to just do our jobs and get after this organic growth. Thanks a lot. The best of luck. Thank you. Yep. Thanks, Ross. Thank you. I'm showing no further questions at this time. I'll now turn it back to Scott Wylie for closing remarks. Great. Thank you. So we said for several quarters that we had success playing defense through that slog of 2022 and 2023, and now we're shifting back onto offense. The headwinds out in the market have changed to tailwinds for 2026, and that's both in financial, economic, and competitive terms.
And so, uh, that definitely does a strong focus here with this disruption task force and with our internal focus on, uh, you know, how do we take advantage in an organic way, and that's Front Range, that's resort markets, that's Arizona, uh, Montana, and Wyoming—all of them. So, uh, we do think there's a lot of opportunity right now for us to just, you know, do our jobs and get after this organic growth.
Thanks a lot. Best of luck. Thank you.
Yep. Thanks Ross.
Thank you. I'm showing no further questions at this time, so I'll now turn it back to Scott Wylie for closing remarks.
And now, we're shifting back on to offense, you know, the headwinds out in the market have changed to Tailwind for 2026, and that's both in financial, and economic and competitive terms. You know, we feel like our 2025 shift to offense really worked and we've leveraged our investments that we've been making in these 5 key areas. I talked about last time, which is, you know, our Tech infrastructure. Our product teams, our local PC teams profit, Center teams, our
Operator: We feel like our 2025 shift to offense really worked, and we've leveraged our investments that we've been making in these five key areas I talked about last time, which is our tech infrastructure, our product teams, our local PC teams, profit center teams, our reset of our internal processes for more efficiency and more value-add. And we've also now strengthened our credit and risk support and marketing teams to support the First Western of the future. So with the positive trends that we saw from Q3 to Q4, where that interest income was up 22% quarter-over-quarter annualized, or it was also up year-over-year nicely. Our NIM was up 17 basis points quarter-over-quarter, 26 basis points year-over-year.
Operator: We feel like our 2025 shift to offense really worked, and we've leveraged our investments that we've been making in these five key areas I talked about last time, which is our tech infrastructure, our product teams, our local PC teams, profit center teams, our reset of our internal processes for more efficiency and more value-add. And we've also now strengthened our credit and risk support and marketing teams to support the First Western of the future. So with the positive trends that we saw from Q3 to Q4, where that interest income was up 22% quarter-over-quarter annualized, or it was also up year-over-year nicely. Our NIM was up 17 basis points quarter-over-quarter, 26 basis points year-over-year.
Um, uh, reset of our internal processes for more efficiency and more value. Add and we've also now, strengthened our credit and risk support and marketing teams to support, you know, the first Western of the future. So with the Positive trends that we saw from Q3 to Q4 where that interest income was up 22% quarter over quarter annualized, or uh, it was also up year-over-year nicely our, any was up 17s, quarter over quarter, 26 basis, points year-over-year,
Great, thank you. So, uh, you know, he said for several quarters that we had success playing defense through that, log of '22 and '23. And now we're shifting back on to offense. You know, the headwinds out in the market have changed to tailwind for 2026, and that's both in financial, economic, and competitive terms. You know, we feel like our 2025 shift to offense really worked, and we've leveraged our investments that we've been making in these five key areas I talked about last time, which is, you know, our tech infrastructure, our product teams, our local PC teams, profit center teams are, um,
To continue back back back. Back to where that should be. Uh, we
If you adjust for the operating, uh, the Oreo, write down our prepac pre-provision net revenues. We're up another 39% quarter over quarter annualized or or double from a year ago.
Operator: On a continued path back to where that should be, if you adjust for the operating the OREO write-down, our pre-provision net revenues were up another 39% quarter-over-quarter annualized or double from a year ago. Our efficiency ratio, when adjusted for that OREO, continues to trend down nicely. And our operating run rate in the last quarter was, as I said, $0.50 if you take out, if you normalize it, and that's a little over $2 annualized. So looking at our 2026 business plan, assuming a stable environment, we expect these positive trends to continue, as we've talked about. Market disruption continues and increases. The opportunity for talent and clients, I don't think, has ever been better. Our disruption task force is focused on recruiting and sales marketing initiatives.
Operator: On a continued path back to where that should be, if you adjust for the operating the OREO write-down, our pre-provision net revenues were up another 39% quarter-over-quarter annualized or double from a year ago. Our efficiency ratio, when adjusted for that OREO, continues to trend down nicely. And our operating run rate in the last quarter was, as I said, $0.50 if you take out, if you normalize it, and that's a little over $2 annualized. So looking at our 2026 business plan, assuming a stable environment, we expect these positive trends to continue, as we've talked about. Market disruption continues and increases. The opportunity for talent and clients, I don't think, has ever been better. Our disruption task force is focused on recruiting and sales marketing initiatives.
Year-over-year.
Uh, our efficiency ratio, when adjusted for that, Oreo continues to Trend down nicely and our operating run rate in the last quarter. Uh, was as I said, you know, 50 cents. If you take out if you normalize it and, uh, and and that's a little over 2 dollars annualized.
To continue back, back. Back to where that should be. Uh, we—
If you adjust for the operating, uh, the OREO, write down our pre-PAC pre-provision net revenues, we're up another 39% quarter over quarter annualized, or double from a year ago.
Um, so looking at our 2026 business plan, assuming a stable environment, we expect these positive Trends to continue as we talked about, you know, the market disruption continues and increases the opportunity for Town and clients. I don't think has ever been better. Our disruption task force, is we're focused on recruiting and sales marketing initiatives. Our prospects are telling us. They want a stable local team of experts and a and a stable local Institution
Especially in our Niche this um, small market share.
Uh, our efficiency ratio, when adjusted for that, Oreo continues to Trend down nicely and our operating run rate in the last quarter. Uh, was as I said, you know, 50 cents. If you take out if you normalize it and, uh, and and that's a little over 2 dollars annualized.
Operator: Our prospects are telling us they want a stable local team of experts and a stable local institution, especially in our niche. This small market share that we have in each of our markets provides lots of upside in our strong, healthy, and diverse economies that we are operating in. Our PTIM restructuring is working. We'll see some results of that this year, both with the re-emphasis on planning and our B2B initiative that we've launched. Our MLOs are up, and that's taking advantage of the slow market for building for the future. And our NIM, I think, is going to continue to trend up towards the 315 number we've talked about as the economy and our financial markets normalize. So those NIM gains and some modest balance sheet growth, they will generate some nice net interest income gains, and they'll generate some nice earnings gains.
Operator: Our prospects are telling us they want a stable local team of experts and a stable local institution, especially in our niche. This small market share that we have in each of our markets provides lots of upside in our strong, healthy, and diverse economies that we are operating in. Our PTIM restructuring is working. We'll see some results of that this year, both with the re-emphasis on planning and our B2B initiative that we've launched. Our MLOs are up, and that's taking advantage of the slow market for building for the future. And our NIM, I think, is going to continue to trend up towards the 315 number we've talked about as the economy and our financial markets normalize. So those NIM gains and some modest balance sheet growth, they will generate some nice net interest income gains, and they'll generate some nice earnings gains.
That we have, in each of our markets provides, lots of upside in our strong and healthy and diverse economies that we are operating in our PM restructuring is working. We'll see some results of that this year, both with the re-emphasis on planning. And our visit B2B, uh, initiative that we've launched, our mlos are, are up and, and
Um, so looking at our 2026 business plan, assuming a stable environment, we expect these positive trends to continue as we talked about. You know, the market disruption continues and increases the opportunity for town and clients. I don't think has ever been better. Our Disruption Task Force is where we're focused on recruiting and sales marketing initiatives. Our prospects are telling us they want a stable local.
Team of experts and a stable local institution.
Especially in our niche, this, um, small market share.
That we have, in each of our markets, provides lots of upside in our strong, healthy, and diverse economies that we are operating in. Our PM restructuring is working. We'll see some results of that this year, both.
And that's taking advantage of the slow market for building for the future. In our name I think is going to continue to Trend up towards the 315 number. We've talked about as a economy and our financial markets normalized so you know those Nim gains and some modest balance sheet growth, they will generate some nice net interest income gains and they'll generate some nice earnings gains. So our intent to get back to being a financial High performer. We see a clear path to 1% Roa and uh plenty of room beyond that. So, thanks everybody for your support. We really appreciate your dialing in today and uh we'll look forward to connecting the future. Thank you.
Thank you for your participation. In today's conference, does this conclude the program? You may not disconnect.
Operator: So our intent to get back to being a financial high performer, we see a clear path to 1% ROA and plenty of room beyond that. So thanks, everybody, for your support. We really appreciate your dialing in today, and we'll look forward to connecting in the future. Thank you. Thank you for your participation in today's conference. This has concluded the program. You may now disconnect.
Operator: So our intent to get back to being a financial high performer, we see a clear path to 1% ROA and plenty of room beyond that. So thanks, everybody, for your support. We really appreciate your dialing in today, and we'll look forward to connecting in the future. Thank you. Thank you for your participation in today's conference. This has concluded the program. You may now disconnect.
Re-emphasis on planning and our visit B2B initiative that we've launched. Our MLOs are up, and that's taking advantage of the slow market for building for the future. In our NM, I think it is going to continue to trend up towards the 3.15% number we've talked about as the economy and our financial markets normalize. So, you know, those NIM gains and some modest balance sheet growth will generate some nice net interest income gains, and they'll generate some nice earnings gains. So, our intent is to get back to being a financial high performer. We see a clear path to 1% ROA and plenty of room beyond that. So, thanks everybody for your support. We really appreciate your dialing in today, and we'll look forward to connecting in the future. Thank you.
Thank you for your participation. In today's conference, does this conclude the program? You may not disconnect.
