Business Context and Reporting Period
This Form 8-K was filed by First Western Financial, Inc. on September 21, 2020, reporting an event that occurred on September 18, 2020. The Company is a Colorado-based financial institution with its principal executive offices in Denver.
Key Financial Metrics and Transaction Details
The filing discloses a specific transaction rather than periodic financial results. Key metrics related to the transaction include:
- Assets Under Management (AUM) Impact: Expected reduction of approximately $300 million.
- Tangible Common Equity Impact: Estimated positive impact of $3.0 million to $3.3 million to be recognized at closing.
- Earnings Impact: Expected to be earnings neutral, as revenue decreases are anticipated to align with expense reductions.
The filing text does not provide clear values for current period revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes
The primary material change is the agreement to sell the Los Angeles-based fixed income portfolio management team ("LA fixed income team") and certain related advisory and sub-advisory arrangements to Lido Advisors, LLC and Oakhurst Advisors, LLC. This divestiture will reduce the Company's AUM but is not expected to impact First Western's bank clients.
Outlook and Management Commentary
Management expects the transaction to close in the fourth quarter of 2020. The sale is projected to be earnings neutral on an ongoing basis. The transaction is expected to generate a one-time positive adjustment to tangible common equity upon closing.
Investor Verification Checklist
- Verify the final closing date of the transaction in Q4 2020.
- Confirm the actual tangible common equity impact upon closing against the estimated $3.0 million to $3.3 million range.
- Monitor future filings to ensure the "earnings neutral" projection holds as revenue and expense reductions materialize.
- Review subsequent reports for the updated total Assets Under Management following the $300 million reduction.