First Western Financial Inc
For the period ended Dec 31, 2025. Filed Feb 27, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 27, 2026
MYFW$30.71-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0001327607-25-000020
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-27.
0001628280-26-012825
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 237 previous paragraphs and 201 current paragraphs.
102 unchanged; 63 reworded; 33 added; 71 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 34 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
•The increase in Net interest income was primarily driven by a 27 basis point increase in net interest margin and an increase in average interest-earnings assets. The increase in net interest margin was primarily due to a 31 basis point decrease in total cost of funds.
Current report
•The increase in Provision for credit losses was primarily driven by loan growth, partially offset by favorable mix shifts within our portfolio.
Current report
•The increase in Non-interest expense was primarily driven by increases in Salaries and employee benefits due to salary increases and Data processing relating to upgrades to our digital banking platform, partially offset by a decrease in Professional services due to decreases in FDIC insurance fees and audit fees.
Current report
•The decrease in Non-interest income was primarily driven by decreases in Risk management and insurance fees due to a decrease in new insurance client agreements, Trust and investment management fees due to lower investment agency and managed trust fees, and Bank fees due to a large prepayment penalty fee collected in 2024, partially offset by an increase in Net gain on loans accounted for under the fair value option due to lower charge-offs and overall improved performance of the portfolio.
Current report
Total interest and dividend income increased $7.1 million, or 4.7%, during the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to a $142.9 million increase in average interest-earning assets, partially offset by a 3 basis point decrease in the average interest-earning assets yield. The increase in average interest-earning assets was driven by increases in average interest-bearing deposits in other financial institutions, debt securities, and loans, of $33.9 million, $31.4 million, and $74.6 million, respectively. The decrease in the average interest-earning assets yield was primarily driven by a 78 basis point decrease in interest-bearing deposits in other financial institution yield due to the lower interest rate environment.
Current report
Interest expense on Interest-bearing deposits decreased $3.1 million, or 3.7%, during the year ended December 31, 2025, primarily due to lower rates, partially offset by a $214.7 million increase in average interest-bearing deposits. Average interest-bearing deposit rates were 3.54% for the year ended December 31, 2025, compared to 4.07% for the year ended December 31, 2024. The decrease in the average Interest-bearing deposits rate was primarily attributable to reducing deposit rates commensurate with the short-term rate decreases. The increase in average interest-bearing deposits was primarily driven by growth in money market deposit accounts.
Current report
Trust and investment management fees—The decrease in Trust and investment management fees of $0.7 million, or 3.9%, was primarily attributable to lower investment agency and managed trust fees.
Current report
Net gain on mortgage loans—The decrease in Net gain on mortgage loans of $0.5 million, or 9.5%, was primarily attributable to lower margins due to a highly competitive mortgage market.
Current report
Net gain (loss) on loans held for sale—During the year ended December 31, 2025, the Net gain on loans held for sale of $0.2 million was due to a reversal of a write-down on a non-accrual loan recorded in the fourth quarter of 2024. This loan was previously classified as held for sale; however, during the first quarter of 2025, it was transferred to held for investment and charged off through the ACL.
Current report
Bank Fees— The decrease in Bank fees of $0.7 million, or 33.9%, was primarily driven by a large loan prepayment penalty fee collected in 2024.
Current report
Net gain on other real estate owned—In 2025, we sold two OREO properties for a net gain of $0.5 million.
Current report
The year ended December 31, 2025 compared with the year ended December 31, 2024. The increase in Non-interest expense of 1.7% to $79.8 million was driven by increases in Salaries and employee benefits and Data processing, partially offset by a decrease in Professional services.
Current report
Salaries and employee benefits—The increase in Salaries and employee benefits of $1.1 million, or 2.4%, was primarily driven by salary increases.
Current report
Data processing—The increase in Data processing of $0.6 million, or 14.6%, was primarily driven by upgrades to our digital banking platform.
Current report
Available-for-sale debt securities were $45.6 million as of December 31, 2025, compared to $0.0 as of December 31, 2024. The increase was due to the purchase of residential mortgage-backed securities issued by U.S. government agencies and sponsored enterprises.
Current report
Held-to-maturity debt securities increased by $19.2 million, or 25.4%, to $95.0 million as of December 31, 2025 compared to December 31, 2024. The increase was primarily due to the purchase of residential and commercial mortgage-backed securities issued by U.S. government agencies and sponsored enterprises.
Current report
Loans, net of allowance increased by $221.7 million, or 9.2%, to $2.63 billion as of December 31, 2025 compared to December 31, 2024. The increase was primarily driven by growth in the Non-owner occupied commercial real estate, 1-4 family residential, Cash, securities, and Other, and Owner occupied commercial real estate portfolios, partially offset by a decrease in the Construction and development portfolio.
Current report
Other real estate owned, net decreased by $32.9 million, or 91.5%, as of December 31, 2025 compared to December 31, 2024. The decrease was due to the sale of two OREO properties and an OREO write-down.
Current report
Other assets increased by $5.2 million, or 5.9%, to $93.1 million as of December 31, 2025 compared to December 31, 2024. The increase was primarily due to low-income housing tax credit and investment fund contributions and an increase in right-of-use lease assets due to the extension of three leases.
Current report
Deposits increased $232.4 million, or 9.2%, to $2.75 billion as of December 31, 2025 compared to December 31, 2024. The increase was primarily driven by increases in money market deposit accounts, partially offset by decreases in time deposit accounts and Noninterest-bearing deposit accounts. Noninterest-bearing deposit accounts decreased $30.6 million, or 8.2%, to $345.0 million as of December 31, 2025 compared to December 31, 2024. Money market deposit accounts increased $400.0 million, or 26.4%, to $1.91 billion as of December 31, 2025 compared to December 31, 2024. Time deposit accounts decreased $118.9 million, or 25.2%, to $352.5 million as of December 31, 2025 compared to December 31, 2024. Interest checking accounts decreased $17.1 million, or 12.3%, to $122.3 million compared to December 31, 2024.
Current report
Borrowings decreased $2.0 million, or 1.8%, to $107.6 million as of December 31, 2025 compared to December 31, 2024. The decrease was primarily driven by $8.0 million of subordinated notes that were redeemed in 2025, partially offset by an increase in FHLB borrowings to support the interest-earning asset growth.
Current report
Other liabilities decreased $7.7 million, or 17.9%, to $35.2 million as of December 31, 2025 compared to December 31, 2024. The decrease was primarily due to payments related to resolution of participated non-performing assets, partially offset by an increase in lease liabilities due to the extension of three leases.
Current report
AUM decreased $43 million, or 0.6%, to $7.28 billion for the year ended December 31, 2025. The decrease was primarily attributable to net withdrawals, partially offset by improved market conditions.
Current report
Debt securities we intend to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are recorded at fair value using current market information from a third-party pricing service, with unrealized gains and losses excluded from earnings and reported in OCI, net of tax. The carrying values of our debt securities classified as available-for-sale are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of OCI in shareholders’ equity. As of December 31, 2025 and 2024, investments in debt securities classified as available-for-sale totaled $45.6 million and $0.0, respectively.
Current report
Allowance for Credit Losses for Debt Securities
Current report
We had amortized cost of $19.6 million and $48.7 million in non-performing assets as of December 31, 2025 and 2024, respectively. The decrease in non-performing assets was primarily driven by the sale of two OREO properties, a write-down of OREO, pay downs, and a charge-off, partially offset by additions to non-accrual loans.
Current report
(1)Includes $3.2 million and $7.3 million of loans held for investment accounted for under the fair value option as of December 31, 2025 and 2024, respectively.
Current report
In the normal course of business, there may be various outstanding commitments to obtain funding and to extend credit, such as letters of credit and unfunded loan commitments, which are not reflected in the accompanying Condensed
Current report
Consolidated Financial Statements. The Company assessed the off balance sheet credit exposures as of December 31, 2025 and determined an ACL of $0.7 million was adequate to absorb the estimated credit losses. For additional information regarding the Company’s ACL on off-balance sheet credit exposures, see Note 10 – Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements.
Current report
Average cost of deposits was 3.06% and 3.38% during the years ended December 31, 2025 and 2024, respectively. The decrease in cost of deposits was primarily attributable to reducing deposit rates commensurate with the short-term rate decreases.
Current report
The following presents additional information on our FHLB borrowings:
Current report
Fair Value Measurements: Fair value measurement estimates are used for certain recorded and disclosed financial instruments on a recurring and non-recurring basis. Such estimates utilize a variety of assumptions, which are subject to uncertainty. Certain fair value measurements have a higher degree of sensitivity of the reported amount to the methods, assumptions, and estimates underlying the calculation.
Current report
See Note 16 – Fair Value for further information on fair value measurements and the estimated changes during the reporting periods.
Removed paragraphs (71)
Previous report
Recent Industry Developments
Previous report
During 2024, the banking industry largely rebounded from the disruption and volatility seen in 2023 stemming from the failure of multiple banks, which created industry wide concerns related to liquidity, deposit outflows, and unrealized securities losses. Valuations for bank stocks improved during the year, although there are still headwinds across the industry. The Bank remains stable with strong fundamentals including uninsured deposits at $902.6 million, or 35.9% of total deposits as of December 31, 2024. The Company has a low amount of held-to-maturity debt securities, which represent 2.6% of Total assets and carries unrecognized losses amounting to 3.0% of Total shareholders’ equity as of December 31, 2024. We have a conservative credit appetite as evidenced by our limited exposure to non-owner occupied office space commercial real estate (“CRE”), which has been negatively impacted by the shift to hybrid work environments. Our client base is well diversified with no single industry concentration.
Previous report
•Theincrease in Net interest income, after provision for credit losses was primarily driven by an increase in Total interest and dividend income due to an increase in total average interest-earning assets and average yield and a decrease in the Provision for credit losses predominately due to decreases in individually analyzed and pooled loan reserves, offset partially by an increase in Total interest expense due to an increase in total average interest-bearing liabilities and average rate.
Previous report
•The increase in Non-interest income was due to an increase in Net gain on mortgage loans driven by higher average gain on sale margins and origination volumes, increase in Risk management and insurance fees due to an increase in insurance client agreements, decrease in impairment to the carrying value of a contingent consideration asset, and decrease in Net loss on loans accounted for under the fair value option recorded.
Previous report
•The increase in Non-interest expense was primarily driven by increases in Other operational costs attributed to higher costs on non-performing asset workouts, fraud losses, and an OREO write-down, Technology and information system costs related to enhancements of our information technology infrastructure, and Occupancy and equipment costs related to additional rent expense on the extension of a lease in 2024.
Previous report
The decrease in average loans outstanding for the year ended December 31, 2024 compared to the same periods in 2023 was primarily due to net declines in the Cash, Securities and Other, Construction and Development, and Commercial and Industrial portfolios, offset by net growth in the 1-4 Family Residential and Non-Owner Occupied Commercial Real Estate portfolios. Contributing factors to the decline in the Commercial and Industrial portfolio was the resolution of a problem credit relationship, which decreased non-performing loans by $42.2 million and increased Other real estate owned ("OREO") by $35.9 million, as well as net pay downs. Average loan yield was 5.70% for the year ended December 31, 2024, compared to 5.43% for the year ended December 31, 2023. The increase in loan yield during the period was primarily driven by an increase in yields on new loan production due to the continued elevated interest rate environment.
Previous report
Interest income on our Debt securities portfolio increased as a result of an increase in average yield of 3.47% for the year ended December 31, 2024, compared to 3.11% for the year ended December 31, 2023. Our average Debt securities balance during the year ended December 31, 2024 was $76.7 million, a decrease of $2.5 million from the year ended December 31, 2023.
Previous report
Interest expense on Deposits increased during the year ended December 31, 2024. Average interest-bearing deposit rates were 4.07% and 3.53% for the years ended December 31, 2024 and 2023. The increase in Interest-bearing deposit rates was primarily attributable to the continued elevated interest rate environment and highly competitive deposit market.
Previous report
(2)Represents monthly averages.
Previous report
Trust and investment management fees—For the year ended December 31, 2024 compared to the same period in 2023, our Trust and investment management fees increased by $0.4 million, or 2.2%, to $19.2 million. The increase was primarily attributable to an increase in assets under management due to an increase in market values.
Previous report
Net gain on mortgage loans—For the year ended December 31, 2024 compared to the same period in 2023, our Net gain on mortgage loans increased by $2.1 million, or 73.8%, to $4.9 million. The increase in Net gain on mortgage loans was driven by higher average gain on sale margins and origination volumes.
Previous report
Net loss on loans held for sale—During the year ended December 31, 2024, the Company reclassified $5.8 million of loans held for investment to loans held for sale. The transfers occurred at the point in time the Company decided to sell the loans. During the year ended December 31, 2024, a total of $5.4 million reclassified loans held for investment were sold resulting in a gain of $0.1 million and a $0.2 million write-down on Loans held for sale still held by the Company at year-end was recognized, resulting in a Net loss on loans held for sale of $0.1 million.
Previous report
Other—The increase in Other income of $1.4 million, or 175.0% was primarily attributable to a $0.9 million year-over-year decrease in impairment recorded to the carrying value of a contingent consideration asset recorded related to the sale of First Western Capital Management in 2020. The initial contingent asset value was established using asset growth assumptions provided by the buyer, which have not materialized.
Previous report
The year ended December 31, 2024 compared with the year ended December 31, 2023. The increase in Non-interest expense of 3.8% to $78.5 million was driven by Other operational costs attributed to an OREO write-down driven by updated appraisals, higher costs on non-performing asset workouts, and fraud losses. Technology and information system costs related to enhancements of our information technology infrastructure, and Occupancy and equipment costs related to additional rent expense on the extension of a lease in 2024.
Previous report
Occupancy and equipment—The increase in Occupancy and equipment of $0.7 million, or 9.0%, was driven by additional rent expense related to the extension of a lease in 2024.
Previous report
Technology and information systems—The increase in Technology and information systems of $0.7 million, or 19.2%, was primarily driven by increased costs related to enhancements of our information technology infrastructure.
Previous report
Data processing—The decrease in Data processing of $0.4 million, or 7.9% was driven by lower system costs related to our trust and investment management system.
Previous report
Marketing—The decrease in Marketing of $0.3 million, or 21.6%, was driven by lower advertising costs and decreased events and sponsorships.
Previous report
Other—The increase in Other of $2.1 million, or 38.4%, was primarily driven by a $1.1 million OREO write-down driven by updated appraisals, increased costs related to non-performing asset workouts, and fraud losses.
Previous report
(1)All other non-interest income primarily includes Trust and investment management fees, Bank fees, Risk management and insurance fees, Net loss on loans accounted for under the fair value option, and Other.
Previous report
(2)All other non-interest expense primarily includes Occupancy and equipment, Professional services, Technology and information systems, Data processing, Marketing, and Other.
Previous report
(1)All other non-interest expense primarily includes Occupancy and equipment, Data processing, and Other.
Previous report
Held-to-maturity debt securities increased by $1.6 million, or 2.2%, to $75.7 million as of December 31, 2024 compared to December 31, 2023. The increase was primarily due to Held-to-maturity debt security purchases throughout the year.
Previous report
Loans, net of allowance decreased by $99.7 million, or 4.0%, to $2.41 billion as of December 31, 2024 compared to December 31, 2023. The decrease was due to payoffs outpacing new production as well as the migration of a large relationship out of loans and into OREO.
Previous report
Goodwill and other intangible assets, net decreased by $0.2 million, or 0.7%, to $31.6 million as of December 31, 2024 compared to December 31, 2023. The decrease was driven by amortization on intangible assets.
Previous report
Other real estate owned, net increased by $35.9 million as of December 31, 2024 compared to December 31, 2023. The increase was due to the migration of a large relationship out of loans and into OREO.
Previous report
Other assets increased by $5.5 million, or 6.5%, to $89.8 million as of December 31, 2024 compared to December 31, 2023. The increase was driven by a $10.2 million increase in our lease assets primarily due to an extension of a lease, offset partially by a $3.3 million decrease in Deferred tax assets, net.
Previous report
Deposits decreased $14.8 million, or 0.6%, to $2.51 billion as of December 31, 2024 compared to December 31, 2023. The decrease was driven primarily by operating account fluctuations and clients using liquidity for strategic investments. Noninterest-bearing deposit accounts decreased $107.0 million, or 22.2%, to $375.6 million as of December 31, 2024. Money market deposit accounts increased $127.5 million, or 9.2%, to $1.51 billion as of December 31, 2024 compared to December 31, 2023. Time deposit accounts decreased $25.0 million, or 5.0%, to $471.4 million as of December 31, 2024. Interest checking accounts decreased $8.1 million, or 5.5%, to $139.4 million compared to December 31, 2023. The decrease in noninterest-bearing deposit accounts and net increases in interest-bearing deposit accounts was primarily attributable to operating account fluctuations and a shift from noninterest-bearing deposit products into higher yielding products as clients seek higher rates for excess liquidity.
Previous report
Borrowings decreased $68.4 million, or 38.4%, to $109.6 million as of December 31, 2024 compared to December 31, 2023. The decrease was primarily driven by a by a lower reliance on FHLB and FRB borrowings due to the decrease in loans.
Previous report
Other liabilities increased $17.3 million, or 67.4%, to $42.9 million as of December 31, 2024 compared to December 31, 2023. The increase was primarily due to a $9.6 million increase in payables related to participated non-performing assets and a $10.1 million increase in our lease liability due to an extension of a lease, offset partially by a $1.5 million decrease in the unfunded commitment liability due to decreases in noncancellable commitments.
Previous report
(1)AUM reported for the current period is one quarter in arrears.
Previous report
AUM increased $568.0 million, or 8.4%, to $7.32 billion for the year ended December 31, 2024. The increase was attributable to contributions and improving market conditions year-over-year resulting in an increase in the value of assets under management balances, offset partially by net withdrawals.
Previous report
The following tables present the amortized cost and estimated fair value of our debt securities as of the dates noted:
Previous report
As of December 31, 2024 and 2023, there were no holdings of debt securities of any one issuer, other than the U.S. Government sponsored entities and its agencies, in an amount greater than 10% of shareholders’ equity.
Previous report
Allowance for Credit Losses for HTM Debt Securities
Previous report
As of December 31, 2024, the Company has $2.0 million in PPP loans outstanding with$40 thousand in remaining fees to be recognized. As of December 31, 2023, the Company had$4.2 million in PPP loans outstanding with$0.1 million in remaining fees to be recognized. The remaining fees represent the net amount of the fees from the SBA for participation in the PPP less the loan origination costs on these loans. The current amortization of this income is being recognized over a five-year period from the time of origination, however, if a loan receives full forgiveness from the SBA or if the borrower repays the loan, the remaining income will be recognized upon payoff.
Previous report
(1)Includes PPP loans of $2.0 million and $4.2 million as of December 31, 2024 and 2023, respectively.
Previous report
(1)Includes PPP loans.
Previous report
Loan Modifications
Previous report
GAAP requires that certain types of modifications of loans in response to a borrower’s financial difficulty be reported and include the following; (i) principal forgiveness, (ii) interest rate reduction, (iii) other than insignificant payment delay, (iv) term extension, or (v) any combination of the foregoing. Each modified loan is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s prospective ability to service their obligations as modified. The Company had loan modifications of $1.1 million at December 31, 2024. For additional information on loan modifications, see Note 4 – Loans and the Allowance For Credit Losses.
Showing the first 40 of 71 passages. Open the source sections for the rest.
Reworded paragraphs (63)
Previous wording
From 2004, when we opened our first profit center, until December 31, 2024, wehave expanded our footprint into fourteen full service profit centers, five loan production offices, and one trust office located across five states. Asof and for the year ended December 31, 2024, we had $2.92 billion in total assets, $90.1 million in total revenues, and provided fiduciary and advisory services on $7.32 billion of assets under management ("AUM").
Current wording
From 2004, when we opened our first profit center, until December 31, 2025, wehave expanded our footprint into fourteen full service profit centers, four loan production offices, andone trust office located across five states. Asof and for the year ended December 31, 2025, we had $3.15 billion in total assets, $96.9 million in total revenues, and provided fiduciary and advisory services on $7.28 billion of assets under management (AUM).
Previous wording
•Bank fees—income generated through bank-related service charges such as: electronic transfer fees, treasury management fees, bill pay fees, servicing fees for Main Street Lending Program (“MSLP”), loan prepayment penalty fees, loan interest rate swap fees, and other banking fees. Banking fees are primarily impacted by the level of business activities and cash movement activities of our clients.
Current wording
•Bank fees—income generated through bank-related service charges such as: electronic transfer fees, treasury management fees, bill pay fees, loan prepayment penalty fees, loan interest rate swap fees, and other banking fees. Banking fees are primarily impacted by the level of business activities and cash movement activities of our clients.
Previous wording
The year ended December 31, 2024 compared with the year ended December 31, 2023. We reported Net income available to common shareholders of $8.5 million for the year ended December 31, 2024, compared to $5.2 million of Net income available to common shareholders for the year ended December 31, 2023, a $3.2 million, or 63.5% increase. For the year ended December 31, 2024, our Income before income taxes was $11.6 million, a $4.5 million, or 63.4%, increase from the year ended December 31, 2023. The increase was primarily driven by a $1.6 million increase in Net interest income, after provision for credit losses and a $5.8 million increase in Non-interest income, partially offset by a $2.9 million increase in Non-interest expense.
Current wording
The year ended December 31, 2025 compared with the year ended December 31, 2024. We reported Net income available to common shareholders of $13.2 million for the year ended December 31, 2025, compared to $8.5 million of Net income available to common shareholders for the year ended December 31, 2024, a $4.7 million, or 55.3% increase. For the year ended December 31, 2025, our Income before income taxes was $17.1 million, a $5.5 million, or 47.5%, increase from the year ended December 31, 2024. The increase was primarily driven by an $11.0 million increase in Net interest income, partially offset by a $3.1 million increase in Provision for credit losses, a $1.3 million increase in Non-interest expense, and a $1.1 million decrease in non-interest income.
Previous wording
The year ended December 31, 2024 compared with the year ended December 31, 2023. For the year ended December 31, 2024, Net interest income, before Provision for credit losses, was $64.3 million, a decrease of $6.8 million, or 9.6%, compared to the year ended December 31, 2023. This decrease was driven by a $174.2 million increase in average interest-bearing deposit balances and a 54 basis point increase in average rates paid on Interest-bearing deposits, offset partially by a 27 basis point increase in the average yield on loans and a $53.7 million increase in Interest-bearing deposits in other financial institutions. For the year ended December 31, 2024, our net interest margin was 2.37% and our net interest spread was 1.50%. For the year ended December 31, 2023, our net interest margin was 2.62% and our net interest spread was 1.71%.
Current wording
The year ended December 31, 2025 compared with the year ended December 31, 2024. For the year ended December 31, 2025, Net interest income, before Provision for credit losses, was $75.4 million, an increase of $11.0 million, or 17.2%, compared to the year ended December 31, 2024. The increase was primarily driven by a $142.9 million increase in average interest-earning assets and a 27 basis point increase in net interest margin. The increase in net interest margin was primarily driven by a 32 basis point decrease in deposit costs.
Previous wording
(1)Average balance represents daily averages, unless otherwise noted.
Current wording
(1)Average balance represents daily averages.
Previous wording
(3)Non-accrual loans are included in the respective average loan balances. Income, if any, is not recognized until all principal has been repaid.
Current wording
(2)Non-accrual loans are included in the respective average loan balances. Income, if any, is not recognized until all principal has been repaid.
Previous wording
(4)Mortgage loans held for sale are included in the interest-earning assets above, with interest income recognized in the Interest and dividend income on loans, including fees line in the Consolidated Statements of Income. These balances are included in the margin calculations in these tables.
Current wording
(3)Mortgage loans held for sale are included in the interest-earning assets above, with interest income recognized in the Interest and dividend income on loans, including fees line in the Consolidated Statements of Income. These balances are included in the margin calculations in these tables.
Previous wording
(5)Tax-equivalent yield adjustments are immaterial.
Current wording
(4)Tax-equivalent yield adjustments are immaterial.
Previous wording
(6)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
Current wording
(5)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
Previous wording
(7)Net interest income is the difference between income earned on interest-earning assets and expense paid on interest-bearing liabilities.
Current wording
(6)Net interest income is the difference between income earned on interest-earning assets and expense paid on interest-bearing liabilities.
Previous wording
(8)Net interest margin is equal to net interest income divided by average interest-earning assets.
Current wording
(7)Net interest margin is equal to net interest income divided by average interest-earning assets.
Previous wording
We have a dedicated problem loan resolution team comprised of associates from our credit, senior leadership, risk, and accounting teams that meets frequently to ensure that watch list and problem credits are identified early and actively managed. We work to identify potential losses in a timely manner and proactively manage the problem credits to minimize losses. For the years ended December 31, 2024 and 2023, we recorded $1.9 million and $10.4 million Provision for credit losses, respectively. The provision recorded for the year ended December 31, 2024 was due to related provisioning on $9.0 million of net charge-offs, $3.5 million decrease in provisions on individually analyzed loans, $2.1 million release of provisions on pooled loans, and $1.5 million provision releases related to off-balance sheet commitments. The release of provision related to individually analyzed loans was predominately due to the migration of one loan relationship out of non-performing loans and into OREO, pay downs on non-performing loans, and charge-offs. The release of provision related to pooled loans was predominately due to net pay downs, changes in our portfolio mix, as well as modest macroeconomic forecast improvements. The release of provision related to off-balance sheet commitments for the year ended December 31, 2024 was predominately due to decreases in non-cancellable commitments..
Current wording
We have a dedicated problem loan resolution team comprised of associates from our credit, senior leadership, risk, and accounting teams that meets frequently to ensure that watch list and problem credits are identified early and actively managed. We work to identify potential losses in a timely manner and proactively manage the problem credits to minimize losses. For the years ended December 31, 2025 and 2024, we recorded $5.0 million and $1.9 million Provision for credit losses, respectively. The provision recorded for the year ended December 31, 2025 was primarily due to loan growth, charge-offs, and specific reserves related to individually analyzed loans, partially offset by favorable mix shifts within our portfolio.
Previous wording
The year ended December 31, 2024 compared with the year ended December 31, 2023. For the year ended December 31, 2024 compared to the year ended December 31, 2023, Non-interest income increased $5.7 million, or 26.1%, to $27.7 million. The increase in non-interest income was primarily due to a $2.1 million increase in Net gain on mortgage loans driven by higher average gain on sale margins and origination volumes, $0.7 million increase in Risk management and insurance fees due to an increase in insurance client agreements, $0.9 million decrease in impairment to the carrying value of a contingent consideration asset, and $1.0 million decrease in Net losses on loans accounted for under the fair value option.
Current wording
The year ended December 31, 2025 compared with the year ended December 31, 2024. For the year ended December 31, 2025 compared to the year ended December 31, 2024, Non-interest income decreased $1.1 million, or 4.0%, to $26.6 million. The decrease in non-interest income was primarily driven by decreases in Risk management and insurance fees, Trust and investment management fees, and Bank fees, partially offset by an increase in Net gain on loans accounted for under the fair value option.
Previous wording
Risk management and insurance fees—The increase in Risk management and insurance fees of $0.7 million, or 81.1%, to $1.7 million was primarily driven by an increase in insurance client agreements.
Current wording
Risk management and insurance fees—The decrease in Risk management and insurance fees of $1.1 million, or 66.9%, was primarily driven by a decrease in new insurance client agreements.
Previous wording
Net loss on loans accounted for under the fair value option—The Company elected the fair value option on certain loans purchased in 2022. The decrease in Net loss on loans accounted for under the fair value option of $1.0 million, or 50.3% was primarily attributable to overall improved performance of the portfolio.
Current wording
Net gain (loss) on loans accounted for under the fair value option—The increase in Net gain on loans accounted for under the fair value option of $1.0 million, or 100.6%, was primarily attributable to lower charge-offs and overall improved performance of the portfolio.
Previous wording
Professional services—The increase in Professional services of $0.3 million, or 4.1%, was driven by increased legal fees, audit fees, and FDIC insurance costs due to an increase in our assessment rate.
Current wording
Professional services—The decrease in Professional services of $0.3 million, or 3.3%, was primarily driven by decreases in FDIC insurance fees and audit fees, partially offset by an increase in recruiting expenses.
Previous wording
The Company recorded an income tax provision of $3.1 million and $1.8 million for the years ended December 31, 2024 and 2023, respectively, reflecting an effective tax rate 26.8% and 26.0%, respectively.
Current wording
The Company recorded an income tax provision of $3.9 million and $3.1 million for the years ended December 31, 2025 and 2024, respectively, reflecting an effective tax rate of 22.8% and 26.8%, respectively.
Previous wording
The Wealth Management segment reported Income before income taxes of $10.6 million for the year ended December 31, 2024, compared to $9.7 million for the same period in 2023. The majority of our assets and liabilities are on the Wealth Management segment balance sheet and the increase in Income before taxes is primarily attributable to an increases in Net interest income, after provision for credit losses and Non-interest income, partially offset by increases in Non-interest expense. The increase in Net interest income, after provision for credit losses was driven by a decrease in Provision for credit losses primarily due to a decrease in provisions related to individually analyzed loans and an increase in Total interest and dividend income due to an increase in total average interest-earning assets and average yield, offset partially by an increase in Total interest expense due to an increase in total average interest-bearing liabilities and average rate. The increase in Non-interest income was primarily driven by increases in Risk management and insurance fees and a decrease in Net loss on loans accounted for under the fair value option recorded. The increase in Non-interest expense was driven by increases in Technology and information systems expenses, Occupancy and equipment costs, and Other expenses.
Current wording
The Wealth Management segment reported Income before income taxes of $16.4 million for the year ended December 31, 2025, compared to $10.6 million for the same period in 2024. The majority of our assets and liabilities are on the Wealth Management segment balance sheet. The increase in Income before income taxes was primarily attributable to an increase in Net interest income, after provision for credit losses, partially offset by an increase in Non-interest expense. The increase in Net interest income, after provision for credit losses, was primarily driven by increases in net interest margin and average interest-earning assets, partially offset by an increase in Provision for credit losses. The increase in Non-interest expense was primarily driven by increases in Salaries and employee benefits and Data processing, partially offset by a decrease in Professional services.
Previous wording
The Mortgage segment reported Income before income tax of $1.0 million for the year ended December 31, 2024, compared to a loss before income tax of $2.6 million for the same period in 2023. The increase in Income before taxes was primarily driven by an increase in Non-interest income and a decrease in Non-interest expense. The increase in Non-interest income was primarily driven by higher average gain on sale margins and origination volume. The decrease in Non-interest expense was primarily due to lower Salaries and employee benefits.
Current wording
The Mortgage segment reported Income before income tax of $0.7 million for the year ended December 31, 2025, compared to $1.0 million for the same period in 2024. The decrease in Income before income taxes was primarily driven by a decrease in Net gain on mortgage loans. The decrease in Net gain on mortgage loans was primarily driven by lower margins due to a highly competitive mortgage market.
Previous wording
Cash and cash equivalents decreased by $18.4 million, or 7.2%, to $236.0 million as of December 31, 2024 compared to December 31, 2023. The decrease was a result of decreases in Borrowings and Deposits, offset partially by the decrease in Loans.
Current wording
Cash and cash equivalents decreased by $37.7 million, or 15.8%, to $200.3 million as of December 31, 2025 compared to December 31, 2024. The decrease was a result of the increase in Loans and debt securities, partially offset by an increase in Deposits.
Previous wording
Mortgage loans held for sale increased by $18.2 million, or 250.9%, to $25.5 million as of December 31, 2024 compared to December 31, 2023. The increase was driven driven by higher funded loan volume and the timing of loan sale settlements.
Current wording
Mortgage loans held for sale increased by $14.7 million, or 57.8%, to $40.2 million as of December 31, 2025 compared to December 31, 2024. The increase was primarily due to the timing of loan originations and sales.
Previous wording
Total shareholders’ equity increased $9.6 million, or 3.9%, to $252.3 million as of December 31, 2024. The increase was primarily due to Net income for the year and a $0.7 million increase in Additional paid-in capital driven by stock-based compensation expense.
Current wording
Total shareholders’ equity increased $13.2 million, or 5.2%, to $265.6 million as of December 31, 2025. The increase was primarily due to Net income for the year.
Previous wording
Debt securities for which we have the intent and ability to hold to their maturity are classified as Held-to-maturity debt securities and are recorded at amortized cost. Debt securities held-to-maturity are carried at cost, adjusted for the amortization of premiums and the accretion of discounts using the level-yield method over the remaining period until maturity. As of December 31, 2024 and 2023, all our investments in debt securities were classified as held-to-maturity.
Current wording
Debt securities for which we have the intent and ability to hold to their maturity are classified as Held-to-maturity debt securities and are recorded at amortized cost. Debt securities HTM are carried at cost, adjusted for the amortization of premiums and the accretion of discounts using the level-yield method over the remaining period until maturity. As of December 31, 2025 and 2024, investments in debt securities classified as HTM totaled $95.0 million and $75.7 million, respectively.
Previous wording
The following presents the book value of our contractual maturities and weighted average yield for our debt securities as of the dates presented. Contractual maturities may differ from expected maturities because issuers can have the right to call or prepay obligations without penalties. Our debt securities are taxable securities. The weighted average yield for each range of maturities was calculated using the yield on each security within that range weighted by the amortized cost of each security as of December 31, 2024. Weighted average yields are not presented on a taxable equivalent basis.
Current wording
The following provides information regarding contractual maturities and weighted average yield for our investment securities as of the dates presented. Contractual maturities may differ from expected maturities because issuers can have the right to call or prepay obligations without penalties. Our investments are taxable securities. The weighted average yield for each range of maturities was calculated using the yield on each security within that range weighted by the amortized cost of each security. Weighted average yields are not presented on a taxable equivalent basis.
Previous wording
Management measures expected credit losses on Held-to-maturity debt securities on a collective basis by major security type. The majority of our held-to-maturity investment portfolio consists of debt securities issued by U.S. government entities and agencies and we consider the risk of credit loss to be zero and, therefore, we do not record an ACL. The Company's non-government backed debt securities include private label CMO and MBS as well as corporate bonds. Accrued interest receivable on Held-to-maturity debt securities totaled $0.3 million and $0.4 million as of December 31, 2024 and 2023, respectively, and was excluded from the estimate of credit losses. The following table presents the activity in the allowance for credit losses for Held-to-maturity debt securities by major security type for the years noted:
Current wording
Management measures expected credit losses on debt securities on a collective basis by major security type. The majority of our held-to-maturity investment portfolio consists of debt securities issued by U.S. government entities and agencies and we consider the risk of credit loss to be zero and, therefore, we do not record an ACL. The Company's non-government backed debt securities include private label MBS as well as corporate bonds. The ACL on HTM debt securities was $0.1 million as of December 31, 2025 and 2024. There was no ACL on AFS debt securities as of December 31, 2025 and December 31, 2024.
Previous wording
In addition to originating loans for our own portfolio, we conduct mortgage banking activities in which we originate and sell, servicing-released, whole loans in the secondary market. Our mortgage banking loan sales activities are primarily directed at originating single family mortgages that are priced and underwritten to conform to previously agreed-upon criteria before loan funding, and are delivered to the investor shortly after funding. The level of future loan originations, loan sales and loan repayments depends on overall credit availability, the interest rate environment, the strength of the general economy, local real estate markets and the housing industry, and conditions in the secondary loan sale market. The amount of gain or loss on the sale of loans is primarily driven by market conditions and changes in interest rates, as well as our pricing and asset liability management strategies. As of December 31, 2024 and 2023, we had Mortgage loans held for sale of$25.5 million and$7.3 million, respectively, in residential mortgage loans we originated. As of December 31, 2024 and 2023, we had Loans held for sale of$0.3 million and$0.0 million, respectively.
Current wording
In addition to originating loans for our own portfolio, we conduct mortgage banking activities in which we originate and sell servicing-released, whole loans in the secondary market. Our mortgage banking loan sales activities are primarily directed at originating single family mortgages that are priced and underwritten to conform to previously agreed-upon criteria before loan funding, and are delivered to the investor shortly after funding. The level of future loan originations, loan sales and loan repayments depends on overall credit availability, the interest rate environment, the strength of the general economy, local real estate markets and the housing industry, and conditions in the secondary loan sale market. The amount of gain or loss on the sale of loans is primarily driven by market conditions and changes in interest rates, as well as our pricing and asset liability management strategies. As of December 31, 2025 and 2024, we had Mortgage loans held for sale of$40.2 million and$25.5 million, respectively, in residential mortgage loans we originated.
Previous wording
Beginning in the first quarter of 2022, the Company entered into whole loan purchase agreements to acquire third party originated and serviced unsecured consumer loans to hold for investment and elected the fair value option to account for these loans. As of December 31, 2024, the Company has $7.3 million in loans accounted for under the fair value option with an unpaid principal balance of $7.5 million. As of December 31, 2023, the Company had$13.7 million in loans accounted for under the fair value option with an unpaid principal balance $14.1 million. See Note 16 – Fair Value in the Notes to the Consolidated Financial Statements.
Current wording
As of December 31, 2025 and 2024, we had Loans held for sale of$0.0 million and$0.3 million, respectively. As of December 31, 2025, the Company has $3.2 million in loans accounted for under the fair value option with an unpaid principal balance of $3.2 million. As of December 31, 2024, the Company had$7.3 million in loans accounted for under the fair value option with an unpaid principal balance $7.5 million. See Note 16 – Fair Value in the Notes to the Consolidated Financial Statements.
Previous wording
(2)Includes$7.5 million and $14.1 million of unpaid principal balance of loans held for investment accounted for under the fair value option as of December 31, 2024 and 2023, respectively.
Current wording
(1)Includes$3.2 million and $7.5 million of unpaid principal balance of Loans held for investment accounted for under the fair value option as of December 31, 2025 and 2024, respectively.
Previous wording
(3)Includes $25.2 million and $7.1 million of unpaid principal balance of mortgage loans held for sale as of December 31, 2024 and 2023, respectively.
Current wording
(2)Includes $39.5 million and $25.2 million of unpaid principal balance of Mortgage loans held for sale as of December 31, 2025 and 2024, respectively.
Previous wording
(4)Includes$0.6 million of principal balance of loans held for sale as of December 31, 2024.
Current wording
(3)Includes$0.0 and$0.6 million of principal balance of loans held for sale as of December 31, 2025 and 2024, respectively.
Previous wording
•Cash, Securities, and Other—consists of consumer and commercial purpose loans that are primarily secured by securities managed and under custody with us, cash on deposit with us or life insurance policies. In addition, loans in this portfolio are collateralized with other sources of collateral. This segment of our portfolio is affected by a variety of local and national economic factors affecting borrowers’ employment prospects, income levels, and overall economic sentiment. PPP loans that are fully guaranteed by the SBA are classified within this line item and had balances of $2.0 million and $4.2 millionasof December 31, 2024 and 2023, respectively.
Current wording
•Cash, securities, and other—consists of consumer and commercial purpose loans that are primarily secured by securities managed and under custody with us, cash on deposit with us or life insurance policies. In addition, loans in this portfolio are collateralized with other sources of collateral. This segment of our portfolio is affected by a variety of local and national economic factors affecting borrowers’ employment prospects, income levels, and overall economic sentiment.
Previous wording
•Consumer and Other—consists of unsecured consumer loans. This segment of our portfolio is affected by a variety of local and national economic factors affecting borrowers’ employment prospects, income levels, and overall economic sentiment. Loans held for investment accounted for under the fair value option are also classified within this line item and had an unpaid principal balance of $7.5 million and $14.1 million as of December 31, 2024 and 2023, respectively.
Current wording
•Consumer and other—consists of unsecured consumer loans. This segment of our portfolio is affected by a variety of local and national economic factors affecting borrowers’ employment prospects, income levels, and overall economic sentiment. Loans held for investment accounted for under the fair value option are primarily consumer and other loans and are presented separately within the above table.
Previous wording
•Commercial and Industrial—consists of commercial and industrial loans, including working capital lines of credit, permanent working capital term loans, business asset loans, acquisition, expansion and development loans, and other loan products, primarily in our target markets. This portfolio primarily consists of term loans and lines of credit which are dependent on the strength of the industries of the related borrowers and the success of their businesses. MSLP loans of $1.7 million and $5.1 million as of December 31, 2024 and 2023, respectively, are included in this category.
Current wording
•Commercial and Industrial—consists of commercial and industrial loans, including working capital lines of credit, permanent working capital term loans, business asset loans, acquisition, expansion and development loans, and other loan products, primarily in our target markets. This portfolio primarily consists of term loans and lines of credit which are dependent on the strength of the industries of the related borrowers and the success of their businesses.
Previous wording
The largest category of the Company’s loan portfolio is Commercial Real Estate (“CRE”). An additional breakdown of the Company’s CRE portfolio follows.
Current wording
One of the larger categories of the Company’s loan portfolio is Commercial Real Estate (CRE). The following provides balances by asset type of the Company’s CRE portfolio:
Previous wording
The CRE portfolio is comprised of loans made to purchase, construct and finance commercial real estate properties. On average, the balances are small and geographically disbursed across our footprint. Specifically, our CRE portfolio has an average loan balance of $2.47 million with a weighted average loan-to-value ratio (“LTV”) of 52.9% as of December 31, 2024.
Current wording
The CRE portfolio is comprised of loans made to purchase and finance commercial real estate properties. On average, the balances are small and geographically disbursed across our footprint. Specifically, our CRE portfolio has an average loan balance of $3.10 million and $2.47 million with a weighted average loan-to-value ratio (LTV) of 54.3% and 52.9% as of December 31, 2025 and 2024, respectively.
Previous wording
Due to the recent trends in the banking industry, there has been increased risk associated with commercial real estate loans, including with respect to the higher vulnerability of these credits to pressure as interest rates remain elevated and market conditions in many large metropolitan areas continue to show signs of stress. The Company has limited exposure to the office building sector in central business districts as the office portfolio is generally diversified in suburban markets with strong occupancy levels. The Company maintains a practice of regular and ongoing loan reviews, stress tests, and sensitivity analyses to assess the level of risk in the loan portfolio. Loan reviews include monitoring past due rates, non-performing trends, concentrations, LTV’s, among other qualitative factors. Credit policies are robust and are updated as needed to meet the strategic and risk mitigation goals of the company.
Current wording
Due to the recent trends in the banking industry, there has been increased risk associated with commercial real estate loans, including with respect to the higher vulnerability of these credits to pressure as interest rates remain elevated and market conditions in many large metropolitan areas continue to show signs of stress. The Company has limited exposure to the office building sector in central business districts as the office portfolio is generally diversified in suburban markets with strong occupancy levels. The Company maintains a practice of regular and ongoing loan reviews, stress tests, and sensitivity analyses to assess the level of risk in the loan portfolio. Loan reviews include monitoring past due rates, non-performing trends, concentrations, LTVs, among other qualitative factors. The Company believes its credit policies are robust and are updated as needed to meet the strategic and risk mitigation goals of the company.
Previous wording
The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range, at amortized cost as of the dates noted, are summarized in the following tables:
Current wording
The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range, at amortized cost as of the dates noted, are summarized in the following:
Previous wording
(2)Loans accounted for under the fair value option are disclosed at fair value rather than amortized cost
Current wording
(1)Loans accounted for under the fair value option are disclosed at fair value rather than amortized cost
Previous wording
OREO represents assets acquired through, or in lieu of, foreclosure. The amounts reported as OREO are supported by recent appraisals, with the appraised values adjusted, where applicable, for expected transaction fees likely to be incurred upon sale of the property. We incur recurring expenses relating to OREO in the form of maintenance, taxes, insurance and legal fees, among others, until the OREO parcel is disposed. While disposition efforts with respect to our OREO are generally ongoing, if these properties are appraised at lower-than-expected values or if we are unable to sell the properties at the prices for which we expect to be able to sell them, we may incur additional losses. In the second quarter of 2024, the Company recorded $11.4 million of OREO as a result of obtaining physical possession of two foreclosed properties as partial consideration for amounts owed on non-performing loans related to an isolated loan relationship. During the third quarter of 2024, the Company recorded an additional $25.6 million of OREO related to a third foreclosed property within the same loan relationship. During the year ended December 31, 2024, the Company recorded a provision for Other real estate owned of $1.1 million. As of December 31, 2024, the Company owned OREO properties totaling $35.9 million. As of December 31, 2023, the Company did not own OREO properties.
Current wording
OREO represents assets acquired through, or in lieu of, foreclosure. The amounts reported as OREO are supported by recent appraisals, with the appraised values adjusted, where applicable, for expected transaction fees likely to be incurred upon sale of the property. We incur recurring expenses relating to OREO in the form of maintenance, taxes, insurance, and legal fees, among others, until the OREO property is disposed. During 2025, the Company sold two OREO properties resulting in a net gain on sale of $0.5 million. During the years ended December 31, 2025 and 2024, the Company recorded provisions for OREO of $1.3 million and $1.1 million, respectively. As of December 31, 2025 and 2024, OREO properties had carrying amounts of $3.0 million and $35.9 million, respectively.
Previous wording
The Company had $0.7 million and $1.7 million of interest reversed on non-accrual loans during the years ended December 31, 2024 and 2023, respectively. The amount of interest income that would have been recognized on loans accounted for on a non-accrual basis pursuant to contractual terms was $6.8 million and $4.0 million for the years ended December 31, 2024 and 2023, respectively.
Current wording
The Company reversed $0.1 million and $0.7 million of interest income on non-accrual loans during the years ended December 31, 2025 and 2024, respectively. The amount of interest income that would have been recognized on loans accounted for on a non-accrual basis pursuant to contractual terms was $2.4 million and $6.8 million for the years ended December 31, 2025 and 2024, respectively.
Showing the first 40 of 63 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The following presents the amortized cost basis of loans by credit quality indicator (see Note 4 – Loans and Allowance for Credit Losses for credit quality indicator descriptions), by class of financing receivable, as of the dates noted:
Current report — wording carried from elsewhere
The following presents balances of each of the borrowing facilities as of the dates noted:
Current report — wording carried from elsewhere
(1)Reflects contractual maturity date of December 1, 2030, although the Company can call the note prior to contractual maturity.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
(*)Represents percentages that are not meaningful..