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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 18, 1995
First Western Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Commission file number 0-13882
Pennsylvania 25-1461570
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
101 East Washington Street, New Castle, Pennsylvania 16101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (412) 652-8550
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Item 5. Other Events
On July 18, 1995, First Western's Board of Directors
authorized a common stock repurchase program. Under the program,
up to five percent of First Western's approximately 5.2 million
outstanding shares (totaling up to approximately 250,000 shares)
may be repurchased. Shares will be repurchased at current market
prices using available corporate funds. Shares will be purchased
through a broker or in blocks in accordance with applicable rules of
the Securities and Exchange Commission and will be held in treasury
for general corporate purposes including various employee benefit
plans. The authorization expires on December 31, 1995, unless
extended by Board action.
Item 7. Financial Statements and Exhibits
(a) Financial Statements: None.
(b) Exhibits:
10.1 Press Release Announcing Second Quarter Earnings,
Share Repurchase Program and Dividend.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
First Western Bancorp, Inc.
(Registrant)
July 27, 1995 /s/ Robert H. Young
-----------------------------
Robert H. Young
Senior Vice President-Finance,
Secretary and Treasurer
(Principal Financial Officer)
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First Western Bancorp, Inc.
Exhibits to Form 8-K
For the Current Report Dated July 18, 1995
Exhibit Index
<TABLE>
<CAPTION>
Exhibit Method of
Number Description Filing
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<S> <C> <C>
10.1 Press Release Announcing Second Filed
Quarter Earnings, Share Repurchase Herewith
Program and Dividend. page__/__
</TABLE>
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Exhibit 10.1
July 18, 1995
Robert H. Young
Senior Vice President - Finance
Secretary and Treasurer
FIRST WESTERN BANCORP, INC.
(412) 652-8550
or
Dan Pecchia
IRA THOMAS ASSOCIATES, INC. FOR IMMEDIATE RELEASE
216/793-3000
FIRST WESTERN BANCORP, INC. ANNOUNCES RECORD SECOND QUARTER
EARNINGS, SHARE REPURCHASE PROGRAM AND DIVIDEND
(NEW CASTLE, PA) First Western Bancorp, Inc. (NASDAQ - FWBI)
today reported record earnings for the second quarter ended June
30, 1995 of $4,192,000, or $0.80 per share, as compared to
$3,920,000 or $0.75 per share for the same quarter in 1994, an
increase of 6.9% in dollars and 6.7% on a per share basis.
Earnings were up 5.7% from the first quarter's $3,967,000, or $0.76
per share.
For the six months ended June 30, 1995, First Western earned a
record $8,159,000, or $1.56 per share, up 3.9% and 4.0%,
respectively from the $7,854,000 or $1.50 per share recorded in the
same period in 1994.
Earnings increased in the second quarter due to a 4.6% increase in
net interest income and a 10.5% increase in other income, somewhat
offset by a 4.9% increase in other expenses. The previously
reported acquisition in the first quarter of 1995 of $97 million in
deposits in five branches in northeastern Ohio are included in the
above increases.
For the six months, earnings were up by a smaller percentage due to
higher security gains in 1994. Exclusive of security gains and
gains on sales of certain loans and real estate owned from
comparable periods, First Western would have earned approximately
$0.72 per share for the second quarter of 1995, compared to $0.66
last year, and for the six months, earnings would have been
approximately $1.44 per share for 1995 versus $1.34 last year. On
an operating basis, this represents a 9% increase for the quarter
and 7.5% for the year-to-date.
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"Earnings growth in the second quarter was a result of superior
loan growth and asset utilization, new fee income sources, and
continued strong expense controls," stated Thomas J. O'Shane,
President and CEO of First Western. "We are proud of our
performance during the past year's turbulent interest rate
environment and current flat yield curve. With a record six
months to start 1995, we look forward to another full-year record
performance for the eighth year in a row."
At First Western's regular board meeting on July 18, 1995, the
Board of Directors authorized a common stock repurchase program of
up to 5% of First Western's current 5.2 million outstanding shares
(totaling up to approximately 250,000 shares) from time to time at
current market prices from available corporate funds. The
program, which will purchase shares through a broker or in blocks
in accordance with applicable rules of the Securities and Exchange
Commission, will hold repurchased shares in treasury for general
corporate purposes including various employee benefit plans. Such
authorization expires on December 31, 1995, unless extended by
Board action. The Board and management of First Western believe
that this program is in the best interests of the Company and that
such purchases are an attractive investment for a portion of the
Company's available funds.
In addition, the Board authorized the declaration of a regular
quarterly cash dividend of $0.26 per share on 5,184,905 outstanding
shares as of July 18, 1995 with a record date of August 1, 1995 and
a payable date of August 8, 1995.
Net interest income growth for the three months ended June 30, 1995
was primarily attributed to the branch acquisitions and a 26%
increase in loan income, somewhat offset by an increased cost of
funds as certificate of deposit rates rose at a fast pace earlier
this year. The net interest margin was 3.73% for the second
quarter of 1995, versus 4.21% during the comparable period last
year and 3.95% for the first quarter, as cost of funds grew faster
than asset yields. For the year-to-date, the margin was 3.83%
versus 4.21% last year. The margin shrinkage in the second quarter
was as expected, and with CD rates now dropping as rates have more
recently fallen, First Western believes the margin should flatten
in the second half of the year at approximately the second quarter
level.
Other income for the quarter rose 10.5% from last year. Exclusive
of security gains, real estate owned sales and student loan and
residential mortgage sale gains, other income was up almost 17% for
the quarter ended June 30, 1995. This increase was due to
increased deposit service charges, credit card fees and other
operating income. For the year-to-date, other income was up 2.4%
despite almost $1.3 million in security gains recorded in the first
half of 1994. Without such gains other income would have been up
approximately 13% for the six month period.
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Other expenses for the quarter were up 4.9% over the prior year's
second quarter due to the branch acquisitions, normal staff
increases and higher advertising expense. For the year-to-date,
expenses were up 4.1% for similar reasons. Exclusive of the branch
acquisitions, expenses would have been approximately flat for the
quarter and year-to-date.
The provision for possible loan losses for the quarter was
$940,000, versus $875,000 for last year's second quarter and
$730,000 in the first quarter of 1995. The second quarter was
higher than the first quarter provision due to higher consumer loan
losses as the portfolio of indirect automobile loans and other
consumer loans grew, primarily from expansion into new market
areas. Year-to-date, the provision was $1,670,000 versus last
year's $1,737,000. Net chargeoffs for the second quarter were
$575,000, or 0.20% as a percentage of average loans as compared to
$450,000 last quarter. Nonaccrual loans and loans past due 90
days or more were $6.1 million at quarter-end as compared to $4.7
million at December 31, 1994, or 0.58% as a percent of total loans.
Total past due and nonaccrual loans were $12.9 million (or 1.21% of
total loans) as compared to $12.1 million (or 1.24% of total loans)
at year-end. The allowance for possible loan losses stood at $13.6
million at June 30, 1995, or 1.27% of total loans, providing 2.2
times coverage of nonaccrual and 90 day past due loans.
Total assets as of June 30, 1995 were $1.659 billion, up 14% from
December 31, 1994 and 4.3% from March 31, 1995, primarily due to
the aforementioned branch purchases but also assisted by 5.2%
deposit growth exclusive of the branch purchases. Total loans are
up 19.9% from a year ago and 9.1% from year-end 1994, primarily in
consumer installment, residential mortgage and commercial loans.
First Western sold approximately $11.6 million in student loans
during the first six months of 1995 at a gain of $245,000, and does
not presently intend to hold originated student loans in its loan
portfolio due to recently-enacted government regulations and their
increasing involvement in direct lending to students.
Total shareholders' equity was at $114.7 million at June 30, 1995,
up 8.1% from $106.1 million at year-end, and book value per share
was $22.13 at June 30, 1995 as compared to $19.75 at June 30, 1994.
The Tier I leverage ratio was 6.61% at quarter-end as compared to
7.46% last year, with the reduction due to the growth in total
assets and intangibles acquired in the recent branch purchases.
First Western's market price for its stock at quarter-end, $28.38,
represents 128% of book value and 9.4 times trailing twelve months'
earnings.
First Western Bancorp, Inc., a multi-bank holding company based in
New Castle, PA, is the parent of First Western Bank, N.A. a full-
service bank; First Western Bank, F.S.B., a federal savings bank;
First Western Trust Services Co., a full-service trust company and
Residential Mortgage Co. of America, a mortgage banking company.
First Western's 42 community banking offices are located in seven
Pennsylvania counties (Lawrence, Mercer, Beaver, Erie, Allegheny,
Venango and Butler) and two Ohio counties (Ashtabula and Lake).
The Company employs more than 600 people.
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