First Western Financial reported net income available to common shareholders of $3.3 million for the fourth quarter of 2025, up from $3.2 million in Q3 2025 and $2.7 million in Q4 2024. Diluted earnings per share rose to $0.34, compared with $0.32 in the prior quarter and $0.28 in the year-ago period. Return on average assets and return on average shareholders’ equity improved to 0.42% and 5.06% (annualized), respectively, reflecting enhanced profitability metrics across the franchise.

Net interest income increased 5.6% sequentially to $20.6 million, driven by a 17-basis-point rise in net interest margin to 2.71% from 2.54%. The cost of funds declined 20 basis points to 3.03%, while yield on interest-earning assets dipped marginally by three basis points to 5.56%. Versus Q4 2024, net interest income surged 21.9% on a 26-basis-point margin expansion and a 10.0% increase in average interest-earning assets, underpinning core revenue growth.

Total loans held for investment grew by $59 million (2.3%) quarter-over-quarter to $2.65 billion, led by non-owner occupied and owner-occupied commercial real estate segments, partially offset by a contraction in construction and development loans. Meanwhile, total deposits declined 3.5% to $2.75 billion, reflecting reductions in higher-cost money market and noninterest-bearing accounts. On a year-over-year basis, loans rose from $2.43 billion and deposits increased from $2.51 billion, signaling ongoing balance sheet expansion.

Non-interest expense increased 6.0% sequentially to $21.3 million, primarily due to a $1.4 million write-down on other real estate owned assets and higher professional services fees, offset by lower occupancy and salary costs. The efficiency ratio improved to 74.9% from 76.4% in Q3. Provision for credit losses declined to $0.9 million from $2.3 million, reflecting continued stability in asset quality and disciplined loan underwriting standards.