<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 1996
OR
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______to______
Commission File No. 0-13882
FIRST WESTERN BANCORP, INC.
(Exact name of Registrant as specified in its charter)
Commonwealth of Pennsylvania 25-1461570
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
101 East Washington Street, New Castle, Pennsylvania 16101
(Address of principal executive offices) (Zip Code)
(412) 652-8550
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO_________
The number of shares outstanding of the Registrant's common stock as of May 9,
1996 was:
Common Stock, $5.00 par value - 7,728,688 shares outstanding <PAGE>
<PAGE> 2
FIRST WESTERN BANCORP, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C> <C> <C>
Part I. Financial Information:
Item 1. Financial Statements:
Independent Accountants' Report......................... 3
Consolidated Balance Sheets:
March 31, 1996, December 31, 1995 and
March 31, 1995......................................... 4
Consolidated Statements of Income:
Three months ended March 31, 1996
and three months ended March 31, 1995.................. 5
Consolidated Statements of Changes
in Shareholders' Equity:
Three months ended March 31, 1996
and three months ended March 31, 1995.................. 6
Consolidated Statements of Cash Flows:
Three months ended March 31, 1996
and three months ended March 31, 1995.................. 7
Notes to Consolidated Financial Statements.............. 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 11
Part II. Other Information:
Item 1. - Item 6. ........................................... 24
Signature.................................................... 25
</TABLE>
<PAGE>
<PAGE> 3
DELOITTE &
TOUCHE LLP
- ----------
------------------------------------------------------------------
2500 One PPG Place Telephone: (412) 338-7200
Pittsburgh, Pennsylvania 15222-5401 Facsimile: (412) 338-7380
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders
of First Western Bancorp, Inc.
We have reviewed the accompanying consolidated balance sheets of First Western
Bancorp, Inc. and subsidiaries as of March 31, 1996 and 1995, and the
related consolidated statements of income, changes in shareholders' equity, and
cash flows for the three-month periods then ended. These financial statements
are the responsibility of the Corporation's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of First Western Bancorp, Inc. and
subsidiaries as of December 31, 1995, and the related consolidated statements
of income, changes in shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated January 26, 1996, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying consolidated
balance sheet as of December 31, 1995 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
/s/ DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
April 16, 1996
- ---------------
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
- --------------- 3 <PAGE>
<PAGE> 4
Part I. Item 1. Financial Information
FIRST WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1996 1995 1995
------------- ------------ -------------
<S> <C> <C> <C>
ASSETS:
- -------
Cash and due from banks $ 38,860 $ 39,464 $ 49,742
------------- ------------ -------------
Interest-bearing deposits with other banks 1,162 2,124 887
------------- ------------ -------------
Securities available for sale
(amortized cost of $260,834, $243,145 and $162,747) 261,947 246,980 162,508
------------- ------------ -------------
Investment securities (market value of $109,476, $115,024 and $128,607) 109,491 114,015 131,215
------------- ------------ -------------
Mortgage-backed securities (market value of $185,163, $144,362
and $190,943) 188,267 145,550 197,909
------------- ------------ -------------
Loans available for sale (market value of $2,651 and $3,518) 2,651 3,510 -
------------- ------------ -------------
Loans (net of unearned income of $33,728, $34,636 and $37,345) 1,043,828 1,024,106 1,016,824
Less: Allowance for possible loan losses 14,404 14,148 13,223
------------- ------------ -------------
Net loans 1,029,424 1,009,958 1,003,601
------------- ------------ -------------
Premises and equipment 18,261 18,411 19,006
------------- ------------ -------------
Other assets 24,830 23,252 25,479
------------- ------------ -------------
Total Assets $ 1,674,893 $ 1,603,264 $ 1,590,347
============= ============ =============
LIABILITIES:
- ------------
Deposits:
Noninterest-bearing demand $ 102,281 $ 102,864 $ 96,440
Interest-bearing demand 113,233 110,703 109,471
Savings 267,478 271,442 305,481
Time 687,034 692,674 669,448
------------- ------------ -------------
Total deposits 1,170,026 1,177,683 1,180,840
------------- ------------ -------------
Borrowed funds:
Federal funds purchased and other short-term borrowings 42,940 3,598 14,472
Repurchase agreements and secured lines of credit 183,789 121,658 117,399
Advances from the Federal Home Loan Bank 126,670 111,670 138,121
------------- ------------ -------------
Total borrowed funds 353,399 236,926 269,992
------------- ------------ -------------
Long-term debt 6,236 8,133 9,778
------------- ------------ -------------
Other liabilities 23,611 58,834 18,981
------------- ------------ -------------
Total Liabilities 1,553,272 1,481,576 1,479,591
------------- ------------ -------------
SHAREHOLDERS' EQUITY:
- ---------------------
Preferred stock, no stated value, 4,000,000
shares authorized, none issued - - -
Common stock, $5.00 par value, 20,000,000
shares authorized, 7,820,588, 7,816,651 and 5,182,239 shares
issued 39,103 39,083 25,911
Additional paid-in capital 21,835 21,811 34,442
Retained earnings 62,086 59,313 50,581
Unrealized appreciation (depreciation) in securities available for sale 724 2,492 (155)
Treasury stock, 94,400 and 52,500 shares at cost (2,127) (1,011) -
Unallocated common stock held by ESOP (at cost) - - (23)
------------- ------------ -------------
Total Shareholders' Equity 121,621 121,688 110,756
------------- ------------ -------------
Total Liabilities and Shareholders' Equity $ 1,674,893 $ 1,603,264 $ 1,590,347
============= ============ =============
</TABLE>
See Notes to Consolidated Financial Statements.
4<PAGE>
<PAGE> 5
Part I. Item 1. Financial Information
FIRST WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
-----------------------------
March 31, March 31,
1996 1995
------------- -------------
<S> <C> <C>
INTEREST INCOME:
- ----------------
Interest and fees on loans $ 22,041 $ 21,225
Interest and fees on loans available for sale 46 -
Interest on deposits with other banks 14 11
Interest on securities available for sale 4,128 1,659
Interest and dividends on investment securities:
Taxable interest 422 813
Tax-exempt interest 1,031 1,010
Interest on mortgage-backed securities 2,366 3,016
Interest on federal funds sold 9 74
------------- -------------
Total Interest Income 30,057 27,808
------------- -------------
INTEREST EXPENSE:
- -----------------
Interest on deposits:
Demand 357 501
Savings 1,716 1,971
Time 9,690 8,064
Interest on borrowed funds:
Federal funds purchased and other short-term borrowings 484 241
Repurchase agreements and secured lines of credit 2,084 1,643
Advances from the Federal Home Loan Bank 1,622 1,857
Interest on long-term debt 143 199
------------- -------------
Total Interest Expense 16,096 14,476
------------- -------------
NET INTEREST INCOME 13,961 13,332
Provision for possible loan losses 1,290 730
------------- -------------
NET INTEREST INCOME AFTER PROVISION FOR
POSSIBLE LOAN LOSSES 12,671 12,602
------------- -------------
OTHER INCOME:
- -------------
Trust fees 547 573
Service charges on deposit accounts 815 686
Credit card program fees 330 296
Net securities gains (losses) 383 (66)
Other operating income 792 730
------------- -------------
Total Other Income 2,867 2,219
------------- -------------
OTHER EXPENSES:
- ---------------
Salaries and wages 3,464 3,271
Employee benefits 1,171 1,030
Net occupancy expense 752 696
Equipment rentals, depreciation and maintenance 575 572
Federal deposit insurance 322 598
Outside examination, legal fees and consulting 267 316
Advertising and promotion 374 377
Supplies 358 331
Outside data processing services 427 320
Other operating expense 1,928 1,674
------------- -------------
Total Other Expenses 9,638 9,185
------------- -------------
INCOME BEFORE INCOME TAXES 5,900 5,636
Income Taxes 1,731 1,669
------------- -------------
NET INCOME $ 4,169 $ 3,967
============= =============
EARNINGS PER SHARE $ 0.53 $ 0.50
============= =============
DIVIDENDS PER SHARE $ 0.18 $ 0.17
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING AND COMMON SHARE EQUIVALENTS 7,859 7,856
============= =============
</TABLE>
See Notes To Consolidated Financial Statements.
5<PAGE>
<PAGE> 6
Part I. Item 1. Financial Information
FIRST WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31, 1996
-------------------------------------------------------------------------------
Unrealized
Appreciation Common Stock
(Depreciation) Held by ESOP
Common Stock in Securities (at Cost)
--------------- Retained Available Treasury ---------------
Shares Amount Surplus Earnings for Sale Stock Shares Amount
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1996 7,817 $39,083 $21,811 $59,313 $2,492 ($1,011) _ $-
Net income - - - 4,169 - - - -
Cash dividends paid ($0.18 per share) - - - (1,396) - - - -
Exercise of options, net of shares redeemed 3 15 5 - - - - -
Common stock issued for dividend reinvestment 1 5 19 - - - - -
Treasury stock purchased - - - - - (1,116) - -
Net change in unrealized appreciation
(depreciation) in securities available
for sale - - - - (1,768) - - -
------------------------------------------------------------------------------
Balance - March 31, 1996 7,821 $39,103 $21,835 $62,086 $724 $(2,127) - $-
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
For the Three Months Ended March 31, 1995
-------------------------------------------------------------------------------
Unrealized
Appreciation Common Stock
(Depreciation) Held by ESOP
Common Stock in Securities (at Cost)
--------------- Retained Available ---------------
Shares Amount Surplus Earnings for Sale Shares Amount
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance - January 1, 1995 5,180 $25,901 $34,431 $47,961 $(2,191) (1) $(23)
Net income - - - 3,967 - - -
Cash dividends paid ($0.17 per share) - - - (1,347) - - -
Exercise of options, net of shares redeemed 2 10 11 - - - -
Net change in unrealized appreciation
(depreciation) in securities available
for sale - - - - 2,036 - -
------------------------------------------------------------------------------
Balance - March 31, 1995 5,182 $25,911 $34,442 $50,581 $(155) (1) $(23)
=============================================================================
</TABLE>
See Notes To Consolidated Financial Statements.
6<PAGE>
<PAGE> 7
Part I. Item 1. Financial Information
FIRST WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE> For the Nine Months Ended
-----------------------------
March 31, March 31,
1996 1995
------------- -------------
<CAPTION>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net income $ 4,169 $ 3,967
------------- -------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 579 548
Amortization and accretion 496 (123)
Provision for possible loan losses 1,290 730
(Gain) loss on sale of securities (383) 66
Loss (gain) on sale of real estate owned 19 (326)
Loss on sale of premises and equipment 1 39
Gain on sale of loans (49) (2)
Provision for deferred tax benefit (24) (98)
Increase in interest receivable (396) (751)
Increase in interest payable 415 1,483
Other - net 24 (746)
------------- -------------
Total adjustments 1,972 820
------------- -------------
Net cash provided by operating activities 6,141 4,787
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Proceeds from sales of securities available for sale 8,350 10,204
Proceeds from maturity or paydown of securities available for sale 25,029 1,609
Purchase of securities available for sale (87,020) (98,370)
Proceeds from maturity or paydown of investment securities 20,352 7,516
Purchase of investment securities (58,705) (230)
Purchase of loans (1,547) (14,540)
Proceeds from sale of loans 8,658 10,807
Net increase in loans (26,917) (34,814)
Decrease (increase) in deposits with other banks 963 (14)
Purchase of premises and equipment (443) (467)
Proceeds from sale of premises and equipment 12 39
Proceeds from sale of other real estate owned 52 828
Cash received in branch purchases - 88,021
------------- -------------
Net cash used in by investing activities (111,216) (29,411)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- ------------------------------------
Net (decrease) increase in deposits (7,637) 54,767
Net increase (decrease) in federal funds purchased and other
short-term borrowings 39,342 (20,375)
Net increase (decrease) in repurchase agreements and secured lines of credit 62,131 (11,062)
Net increase in advances from the Federal Home Loan Bank 15,000 10,000
Payments on long-term debt (1,897) (541)
Proceeds from exercise of stock options 20 21
Proceeds from common stock issued for dividend reinvestment plan 24 -
Treasury stock purchased (1,016) -
Dividends paid on common stock (1,396) (1,347)
------------- -------------
Net cash provided by financing activities 104,471 31,463
------------- -------------
NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS (604) 6,839
CASH AND DUE FROM BANKS - Beginning of year 39,464 42,903
------------- -------------
CASH AND DUE FROM BANKS - End of period $ 38,860 $ 49,742
============= =============
</TABLE>
See Notes To Consolidated Financial Statements.
7<PAGE>
<PAGE> 8
Part I. Item 1. Financial Information
FIRST WESTERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
-----------------------------
March 31, March 31,
1996 1995
------------- -------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 15,681 $ 12,517
============= =============
Income taxes $ 140 $ 291
============= =============
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Securities purchased settling after March 31 $ 909 $ 215
============= =============
Securities sold settling after March 31 $ - $ 49
============= =============
Transfers to other real estate owned $ 43 $ 160
============= =============
Net change in unrealized (depreciation) appreciation in securities
available for sale, net of income tax effects $ (1,768) $ 2,036
============= =============
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES:
Deposits assumed in branch acquisitions $ - $ 96,681
============= =============
</TABLE>
See Notes To Consolidated Financial Statements.
8<PAGE>
<PAGE> 9
FIRST WESTERN BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
1. Principles of Consolidation:
The consolidated financial statements include the accounts of First
Western Bancorp, Inc. (First Western) and its wholly-owned subsidiaries, First
Western Bank, National Association (First Western Bank, N.A.), First Western
Bank, Federal Savings Bank (First Western Bank, F.S.B.), and First Western
Trust Services Company (Trust Services). All significant intercompany
transactions have been eliminated in consolidation.
The consolidated balance sheets as of March 31, 1996 and March 31, 1995,
and the related consolidated statements of income, changes in shareholders'
equity, and cash flows for the three month periods ended March 31, 1996 and
1995 are unaudited. In the opinion of management, all adjustments necessary
for a fair presentation of such financial statements have been included. Such
adjustments consisted only of normal recurring items. Interim results are not
necessarily indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10-
Q. The interim statements are unaudited and should be read in conjunction with
the financial statements and notes thereto contained in First Western's 1995
Annual Report on Form 10-K.
2. Earnings Per Share:
Earnings per common share are based on the weighted average number of
common shares outstanding and common share equivalents in each period.
Weighted average shares outstanding include common share equivalents under
First Western's Incentive Stock Option Plan for Key Officers.
3. Recent Accounting Pronouncements:
During the second quarter of 1995, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and SFAS No. 122 "Accounting for Mortgage Servicing
Rights". These Statements are effective for fiscal years beginning after
December 31, 1995 with earlier adoption encouraged. First Western adopted
these statements during the first quarter of 1996 and the effects of adopting
these statements on First Western's financial statements were not material.
In October 1995, FASB issued SFAS No. 123, "Accounting for
9<PAGE>
<PAGE> 10
Stock-Based Compensation," which requires adoption no later than for fiscal
years beginning after December 15, 1995. The new standard defines a fair value
method of accounting for stock options and similar equity instruments.
Pursuant to the new standard, companies are encouraged, but not required, to
adopt the fair value method of accounting for employee stock-based
transactions. Companies are also permitted to continue to account for such
transactions under Accounting Principles Board Opinion No. 25, but would be
required to disclose, in a note to the financial statements, pro forma net
income and, if presented, earnings per share as if the company had applied the
new method of accounting. First Western has elected to continue to account for
stock-based compensation under Accounting Principles Board Opinion No. 25 and
as such, First Western will disclose in a footnote at year-end, pro forma net
income and earnings per share prepared under the fair value method.
10<PAGE>
<PAGE> 11
Part 1. Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of operations for the three months ended March 31, 1996 compared with
the three months ended March 31, 1995:
For the three months ended March 31, 1996, First Western's net income was
$4.2 million, 5.1% greater than net income of $4.0 million for the three months
ended March 31, 1995. First Western's earnings per share were $0.53 for the
three months ended March 31, 1996, increasing 6.0% from $0.50 for the three
months ended March 31, 1995. For the first three months of 1996, earnings
increased from the prior year due to increased other income, which was
partially offset by increased operating expenses. Net interest income
increased $629,000 or 4.7% for the first quarter of 1996 compared with the
first quarter of 1995; however, this increase was offset by a $560,000 increase
in the provision for possible loan losses. Exclusive of net gains on sales of
securities and sales of loans and other real estate owned, earnings for the
three months ended March 31, 1996 and 1995 would have been approximately $0.50
per share and $0.48 per share, respectively. First Western's return on average
assets was 1.04% for the three months ended March 31, 1996, compared with 1.08%
for the first three months of 1995. The decrease in First Western's return on
average assets was due primarily to a decline in First Western's net interest
margin for the first three months of 1996 compared with the prior year along
with an increase in the provision for possible loan losses.
Net Interest Income:
First Western's net interest income was $14.0 million for the three months
ended March 31, 1996, increasing $629,000 or 4.7% from $13.3 million for the
first three months of 1995. The increase in net interest income was generated
by a $125.3 million or 8.8% increase in average earning assets which was
partially offset by a decline in First Western's net interest margin from 3.95%
for the first three months of 1995 to 3.78% for the first three months of 1996.
The increase in average earning assets was due to an $83.1 million or 18.8%
increase in average securities along with a $46.5 million or 4.7% increase in
average loans outstanding. Average loans outstanding increased due to strong
loan growth experienced throughout 1995 in spite of the securitization and sale
of $188.5 million of loans in late 1995. Most of the growth in average earning
assets was funded by an $85.6 million or 8.0% increase in average deposits due
to the branches acquired during the first quarter of 1995.
First Western's net interest margin or net interest income expressed as
a percentage of average earning assets was 3.78% for the first three months of
1996 compared with 3.95% for the first three months of 1995. First Western's
yield on earning assets declined from the first quarter of 1995 to the first
quarter of 1996 due primarily
11<PAGE>
<PAGE> 12
to a decline in loan yields. Loan yields declined in part due to
securitization of $113.7 million of fixed rate residential mortgage loans
during the fourth quarter of 1995 and also due to a decline in the yields of
commercial loans with interest rates based on the prime rate, which was reduced
by 50 basis points since December 1995. First Western's cost of funds
increased for the first quarter of 1996 compared with the prior year due to an
increase in the rates paid for certificates of deposit. First Western's yield
on average earning assets was 7.94% for the first three months of 1996 compared
with 8.05% for the first three months of 1995, a decrease of eleven basis
points, while the cost of funds increased eight basis points from 4.64% to
4.72%.
First Western monitors its exposure to interest rate changes by performing
simulation modeling which attempts to quantify the impact of various interest
rate scenarios on First Western's balance sheet and income statement over a 24
month period. At March 31, 1996, First Western's simulation model indicates
that in a 200 basis point rising or falling interest rate environment with
limited reinvestment changes, net interest income is projected to decrease
approximately two percent over a 24 month period, within First Western's
asset/liability strategy and board approved limits.
Provision for Possible Loan Losses:
First Western's provision for possible loan losses was $1.3 million for
the first three months of 1996, increasing $560,000 from $730,000 for the first
three months of 1995. The first quarter 1996 provision for possible loan
losses was comparable to the $1.4 million provision for possible loan losses
recorded during the fourth quarter of 1995. First Western increased its
provision for possible loan losses for the first quarter of 1996 in response
to increased consumer loan charge-offs and delinquencies primarily in indirect
automobile loans and credit card loans. Net charge-offs for the first three
months of 1996 were $1.0 million compared with $450,000 for the first three
months of 1995. First Western's net charge-offs for the first three months of
1996 are higher than the prior year due to a $528,000 or 102.3% increase in
installment loan charge-offs. First Western's net charge-offs for the fourth
quarter of 1995 were $1.1 million. Management anticipates that the current
delinquency and charge-off trends will continue through the middle of 1996, if
not longer.
12<PAGE>
<PAGE> 13
First Western's net charge-offs by loan type are as follows (in
thousands):
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Commercial, financial and agricultural loans.......................... $ - $ (26)
Real estate construction loans........................................ - -
Real estate mortgage loans............................................ 27 (3)
Installment loans..................................................... 1,007 479
---------- ----------
Total net charge-offs.............................................. $ 1,034 $ 450
========== ==========
Net charge-offs as a percentage of
average loans...................................................... 0.40% 0.19%
========== ==========
</TABLE>
Other Income and Other Expenses:
Other income increased $648,000 or 29.2% from $2.2 million for the first
three months of 1995 to $2.9 million for the first three months of 1996 due
primarily to gains on sales of securities available for sale and increased
service charges on deposits. First Western also experienced increases in loan
servicing income and commissions on sales of mutual funds and annuities which
offset the decrease in other income that resulted from a decline in gains on
sales of other real estate owned.
Trust fees decreased $26,000 or 4.5% from $573,000 for the first quarter
of 1995 to $547,000 for the first quarter of 1996 due to a decrease in
nonrecurring fees such as estate fees and termination fees. This decrease in
nonrecurring fees was partially offset by increased recurring trust fee income.
Service charges on deposit accounts increased $129,000 or 18.8% for the
first three months of 1996 compared with the prior year. The increase in
service charges on deposit accounts reflected the addition of approximately $97
million of deposits acquired with the five branch offices purchased by First
Western during the first quarter of 1995.
First Western's credit card program fees increased $34,000 or 11.5% from
$296,000 for the first three months of 1995 to $330,000 for the first three
months of 1996 reflecting the growth of First Western's credit card program.
First Western realized gains on sales of securities available for sale of
$383,000 during the first quarter of 1996 compared with a loss of $66,000
during the first quarter of 1995. During the first quarter of 1996, First
Western sold certain bank equity securities realizing gains of $383,000.
Other operating income increased $62,000 or 8.5% from $730,000 for the
first three months of 1995 to $792,000 for the first three months of 1996 in
spite of a decrease in gains realized on sales of other real estate owned.
Sales of other real estate owned generated
13<PAGE>
<PAGE> 14
gains of $326,000 during the first quarter of 1995 compared with losses of
$19,000 during the first quarter of 1996. This decrease in income from sales
of other real estate owned was more than offset by increases in other types of
income during the first quarter of 1996. As a result of the loan
securitization and sales that took place during the fourth quarter of 1995,
First Western's income from loan servicing increased $146,000. Other operating
income also increased for the first quarter of 1996 compared with the prior
year due to a $114,000 increase in commissions on sales of mutual funds and
annuities. First Western increased its mutual fund and annuity commissions by
utilizing a third-party provider beginning in the second quarter of 1995.
Other operating income also increased from the first quarter of 1995 to the
first quarter of 1996 due to an $80,000 gain realized on the sale of the
solicitation rights to one of First Western's credit card affinity group
programs.
Total other expenses increased $453,000 or 4.9% from $9.2 million for the
first three months of 1995 to $9.6 million for the first three months of 1996.
The increase in other expenses was somewhat lessened by a $276,000 decrease in
Federal Deposit Insurance Corporation ("FDIC") insurance expense for the first
quarter of 1996 compared with the first quarter of 1995. The five branch
offices acquired by First Western during the first quarter of 1995 resulted in
approximately one-half of the increase in other expenses.
First Western's salary and employee benefits expense increased a combined
$334,000 or 7.8% for the first three months of 1996 compared with the first
three months of 1995. Approximately one-third of the increase in salaries and
employee benefits expense was attributable to the additional employees
resulting from the five branch offices acquired during the first quarter of
1995. Salaries and employee benefits expense also increased due to normal
salary and wage increases and additional employees were added during late 1995
and early 1996 to expand First Western's mortgage loan origination program.
Salaries and benefits expense also increased due to increases in the costs of
certain employee benefit programs.
Occupancy and equipment expense increased a combined $59,000 or 4.7% from
the first three months of 1995 to the first three months of 1996. The five
branch offices acquired during the first quarter of 1995 resulted in
approximately one-half of the increase in occupancy and equipment expense.
Occupancy and equipment expense also increased from the first quarter of 1995
to the first quarter of 1996 due to a decrease in rental income from certain
bank-owned facilities.
Federal deposit insurance expense decreased $276,000 or 46.2% from
$598,000 for the first three months of 1995 to $322,000 for the first three
months of 1996. This decrease was attributable to a reduction in the insurance
rates paid to the FDIC's Bank Insurance Fund ("BIF"). The impact of this
insurance rate decrease was partially offset by an increase in First Western's
insured deposits. The BIF insurance rates decreased from $0.23 per $100 of
deposits for
14<PAGE>
<PAGE> 15
the first quarter of 1995 to a zero premium for the first quarter of 1996.
Approximately 55% of First Western's deposits are insured by the BIF. The
insurance rate schedule for deposits insured by the Savings Association
Insurance Fund ("SAIF") remains unchanged from the prior year. Recently there
have been several proposals in various bills in Congress to change the
insurance rates paid for deposits insured by the SAIF. One prominent proposal
calls for a special assessment on institutions with funds insured by the SAIF.
If this proposal for a special assessment on institutions with funds insured
by the SAIF would be adopted it could result in a one-time, pre-tax charge to
First Western of approximately $4.3 million at the current proposed special
assessment rate of $0.85 per $100 of deposits insured by the SAIF, with a
subsequent rate cut in the regular semi-annual SAIF assessment.
First Western's outside examination, legal and consulting expense
decreased $49,000 or 15.5% from the first quarter of 1995 to the first quarter
of 1996 due to First Western utilizing outside consultants during the first
quarter of 1995 to facilitate the data processing conversion for the recently
acquired branches along with First Western using an outside consultant to
assist with several projects in the Human Resources department.
First Western's advertising and promotion expense decreased slightly from
$377,000 for the first three months of 1995 to $374,000 for the first three
months of 1996. First Western's advertising expenditures during the first
quarter of 1996 were directed at promoting an "Active Lifestyles" account which
is a bundle of accounts and products targeted at "Baby Boom" era customers.
During the first quarter of 1995, First Western's advertising expenditures were
directed at promoting the recently acquired branches and at credit card
solicitations.
First Western's supplies expense increased $27,000 or 8.2% from $331,000
for the first three months of 1995 to $358,000 for the first three months of
1996 due primarily to First Western providing certain customers with free
checks to promote the "Active Lifestyles" account.
Outside data processing services expense increased $107,000 or 33.4% from
$320,000 for the first quarter of 1995 to $427,000 for the first quarter of
1996. First Western's expense for outside data processing services increased
due to increased Automated Teller Machine data processing charges and increased
credit card data processing charges.
Other operating expenses increased $254,000 or 15.2% from $1.7 million for
the first three months of 1995 to $1.9 million for the first three months of
1996. The amortization of the intangible assets resulting from the first
quarter 1995 branch acquisitions added $122,000 to the increase in other
expenses for the three month period ended March 31, 1996 compared with the
prior year. Other operating expenses also increased due to increased telephone
expense which was
15<PAGE>
<PAGE> 16
the result of the additional locations added during the first quarter of 1995
and also due to increased customer use of bank-by-phone services.
Income Taxes:
First Western's income tax expense was $1,731,000 for the first three
months of 1996 compared with $1,669,000 for the first three months of 1995.
This increase in income tax expense was a result of an increase in First
Western's pre-tax income. First Western's effective tax rate for the first
three months of 1996 was 29.3%, comparable to 29.6% for the first three months
of 1995.
As discussed in the footnotes to First Western's 1995 Annual Report,
should First Western convert its thrift subsidiary, First Western Bank ,
Federal Savings Bank, from a thrift charter to a bank charter, First Western
would, under present law, incur a liability for income taxes of $2.2 million
not previously recorded. In addition to the SAIF one-time payment proposal
noted above, Congress is currently proposing the elimination of the portion of
most thrifts' bad debt reserve liability related to such build-up in such tax
reserves prior to 1988. Should such proposals become law, this potential
liability related to thrift charter conversions would be removed, eliminating
this as an obstacle to changing the thrift charter or merging the thrift
subsidiary with the bank subsidiary.
16<PAGE>
<PAGE> 17
Financial Condition as of March 31, 1996 as compared with December 31, 1995 and
March 31, 1995.
As of March 31, 1996, First Western's total assets were $1.675 billion
compared with $1.603 billion at December 31, 1995 and $1.590 billion at March
31, 1995. Most of the increase from March 31, 1995 and December 31, 1995 was
due to the growth of the securities portfolio funded by an increase in borrowed
funds. Total average assets for the first three months of 1996 were $1.619
billion compared with $1.488 billion for the first three months of 1995, an
increase of 8.8%.
Loan Portfolio:
Net loans increased $19.7 million or 1.9% during the first three months
of 1996. Real estate-mortgage loans increased $26.9 million during the first
three months of 1996 with most of this increase in residential mortgage loans.
Mortgage loans have increased as a result of First Western hiring additional
mortgage loan originators during late 1995 and early 1996. The following table
shows the composition of First Western's loan portfolio at March 31, 1996,
December 31, 1995 and March 31, 1995:
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995 March 31, 1995
------------------------ ---------------------- ------------------------
Amount Percent Amount Percent Amount Percent
------------ -------- ----------- -------- ----------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial and agricultural:
Automobile floorplan loans....... $ 23,151 2.2% $ 26,775 2.6% $ 24,953 2.5%
Loans to municipalities.......... 13,933 1.3 13,893 1.4 11,915 1.2
Other commercial loans........... 79,197 7.6 79,491 7.7 74,078 7.3
------------ -------- ----------- -------- ----------- --------
Subtotal....................... 116,281 11.1 120,159 11.7 110,946 11.0
------------ -------- ----------- -------- ----------- --------
Real estate-construction............. 25,610 2.5 24,501 2.4 17,394 1.7
------------ -------- ----------- -------- ----------- --------
Real estate-mortgage:
1-4 Family residential............. 391,720 37.5 370,276 36.2 394,110 38.8
Multi-family residential........... 35,135 3.4 35,088 3.4 29,962 2.9
Home equity........................ 42,953 4.1 41,417 4.0 36,618 3.6
Commercial and other............... 145,566 13.9 141,667 13.9 131,546 12.9
------------ -------- ----------- -------- ----------- --------
Subtotal......................... 615,374 58.9 588,448 57.5 592,236 58.2
------------ -------- ----------- -------- ----------- --------
Installment:
Credit cards....................... 41,249 4.0 45,226 4.4 35,822 3.5
Installment and other.............. 245,314 23.5 245,772 24.0 260,426 25.6
------------ -------- ----------- -------- ----------- --------
Subtotal......................... 286,314 27.5 290,998 28.4 296,248 29.1
------------ -------- ----------- -------- ----------- --------
Total............................ $ 1,043,828 100.0% $ 1,024,106 100.0% $ 1,016,824 100.0%
============ ======== =========== ======== =========== ========
</TABLE>
17<PAGE>
<PAGE> 18
First Western has several procedures in place to assist in maintaining the
overall quality of its loan portfolio. First Western has established
underwriting guidelines to be followed by its subsidiaries. In addition, a
formal, ongoing loan review program, which concentrates principally on
commercial credits, has been established to help monitor the loan portfolios
of the subsidiaries. First Western also regularly monitors its delinquency
levels for any negative or adverse trends and particularly monitors credits
which have total exposures of $1.5 million or more.
First Western's delinquent loans, nonaccrual loans and nonperforming
assets consisted of the following at March 31, 1996, December 31, 1995 and
March 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1996 1995 1995
------------- ------------ -------------
(Dollars in Thousands)
<S> <C> <C> <C>
Loans delinquent and still accruing interest:
Loans past due 30 to 89 days ........................... $ 7,474 $ 10,420 $ 5,592
Loans past due 90 days or more ......................... 2,644 2,648 1,611
------------- ------------ -------------
Total loan delinquencies ............................. $ 10,118 $ 13,068 $ 7,203
============= ============ =============
Nonaccrual loans ......................................... $ 5,605 $ 4,959 $ 3,735
Other real estate owned .................................. 136 165 843
------------- ------------ -------------
Total nonperforming assets ............................... $ 5,741 $ 5,124 $ 4,578
============= ============ =============
Total nonperforming assets and loans
past due 90 days or more ............................... $ 8,385 $ 7,772 $ 6,189
============= ============ =============
Nonaccrual loans to total loans .......................... 0.54 % 0.48 % 0.37 %
Nonperforming assets to total loans
and other real estate owned ............................ 0.55 % 0.50 % 0.45 %
Nonperforming assets to total assets ..................... 0.34 % 0.32 % 0.29 %
Nonperforming assets and loans past due
90 days or more to total assets ........................ 0.50 % 0.48 % 0.39 %
Nonaccrual loans and loans past due
90 days or more to total loans ......................... 0.79 % 0.74 % 0.53 %
Allowance for possible loan losses
to nonaccrual loans .................................... 256.96 % 285.31 % 354.03 %
Allowance for possible loan losses
to loans past due 90 days or more
and nonaccrual loans ................................... 174.60 % 185.98 % 247.34 %
Allowance for possible loan losses to
total loans ............................................ 1.38 % 1.38 % 1.30 %
</TABLE>
First Western's total delinquencies decreased $3.0 million from $13.1
million at December 31, 1995 to $10.1 million at March 31, 1996 with most of
this decrease occurring in loans past due 30-89 days. Nonaccrual loans
increased $646,000 from December 31, 1995 to March
18<PAGE>
<PAGE> 19
31, 1996 primarily as a result of an increase in loans serviced by others that
were placed on nonaccrual status. Most of the increase in delinquencies from
March 31, 1995 to March 31, 1996 has been due to increased consumer loan
delinquencies.
In order to determine the adequacy of the allowance for possible loan
losses, management considers the risk classification of loans, delinquency
trends, charge-off experience, credit concentrations, economic conditions and
other factors. Specific reserves are established for each classified credit
taking into consideration the credit's delinquency status, current operating
status, pledged collateral and plan of action for resolving any deficiencies.
For nonclassified loans and smaller loans not individually reviewed, management
considers historical charge-off experience in determining the amount to be
allocated to the allowance. An unallocated or general reserve is also
established which takes into consideration, among other things, unfunded
commitments, concentrations of credit, economic conditions, delinquency and
nonaccrual trends, management experience and trends in volume and terms of
loans. The allowance is maintained at a level determined according to this
methodology by charging a provision to operations.
First Western believes that the allowance for possible loan losses of
$14.4 million at March 31, 1996 is adequate to cover losses inherent in the
portfolio as of such date. However, there can be no assurance that First
Western will not sustain losses in future periods, which could be substantial
in relation to the size of the allowance at March 31, 1996.
Investment Securities, Mortgage-Backed Securities, and Securities Available for
Sale:
Investment securities and mortgage-backed securities increased a combined
$38.2 million for the first three months of 1996 with this increase due to the
purchase of securities funded by increased borrowings. The market value of
First Western's investment securities and mortgage-backed securities held to
maturity was a combined $294.6 million, $3.2 million or 1.1% below the
amortized cost of $297.8 million. First Western's portfolio of investment
securities and mortgage-backed securities had a market value below amortized
cost of $179,000 or 0.1% at December 31, 1995. The decrease in market value
of First Western's portfolio of investment securities and mortgage-backed
securities was due to an increase in intermediate and long-term interest rates
during the first quarter of 1996.
Securities available for sale increased $15.0 million during the first
three months of 1996 as First Western purchased securities in the absence of
strong loan demand. Securities available for sale increased $99.4 million from
$162.5 million at March 31, 1995 to $261.9 million at March 31, 1996 with this
increase due to the purchase of securities using the funds provided by the
acquisition of
19<PAGE>
<PAGE> 20
the branch offices during the first quarter of 1995 and also using the funds
provided by the fourth quarter 1995 loan securitizations and sales. At March
31, 1996, First Western had net unrealized appreciation on securities available
for sale of $1.1 million compared with unrealized appreciation of $3.8 million
at December 31, 1995 and unrealized depreciation of $239,000 at March 31, 1995.
Deposits:
Total deposits decreased $7.7 million or 0.7% from $1.178 billion at
December 31, 1995 to $1.170 billion at March 31, 1996. Deposits decreased
during the first three months of 1996 primarily due to the maturity of a short-
term deposit from a commercial customer that was originated during the fourth
quarter of 1995. First Western's deposits have not been growing due in part
to First Western holding down interest rates paid for deposits below
competitors in an effort to improve the net interest margin and to prevent
further disintermediation from lower-costing to higher-costing deposits. First
Western's deposits decreased $10.8 million from March 31, 1995 to March 31,
1996 with most of this decrease attributable to some run-off of certain higher
rate deposits acquired in the first quarter of 1995.
Borrowed Funds:
First Western's borrowed funds increased $116.5 million during the first
three months of 1996 from $236.9 million at December 31, 1995 to $353.4 million
at March 31, 1996. First Western increased its borrowings during the first
quarter of 1996 in order to fund the purchases of securities and also to fund
the loan growth. Total borrowed funds increased $83.4 million from March 31,
1995 to March 31, 1996 as these additional borrowings were necessary to fund
the growth of the securities and loan portfolios.
20<PAGE>
<PAGE> 21
Shareholders' Equity:
Shareholders' equity decreased slightly during the first quarter of 1996
due to a $1.8 million decline in the market value of securities available for
sale, net of income tax effects and also due to treasury stock purchases.
During the first quarter of 1996, First Western repurchased 41,900 shares of
common stock at a cost of $1.1 million in accordance with a common stock
repurchase program. The following table presents First Western's capital
ratios at March 31, 1996 and December 31, 1995:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------- ------------
(Dollars in Thousands)
<S> <C> <C>
Tier I:
Common shareholders' equity .............................. $ 121,621 $ 121,688
Non-exempt intangible assets ............................. (7,180) (7,391)
Unrealized (appreciation) depreciation in securities
available for sale ..................................... (724) (2,492)
------------- ------------
Total Tier I ......................................... 113,717 111,805
------------- ------------
Tier II:
Qualifying allowance for possible loan losses ............ 12,570 12,445
------------- ------------
Total Tier II ........................................ 12,570 12,445
------------- ------------
Total capital .............................................. $ 126,287 $ 124,250
============= ============
Risk weighted assets ....................................... $ 1,003,734 $ 993,929
============= ============
Tier I capital ratio ....................................... 11.33% 11.25%
============= ============
Required Tier I capital ratio .............................. 4.00% 4.00%
============= ============
Total capital ratio ........................................ 12.58% 12.51%
============= ============
Required total capital ratio ............................... 8.00% 8.00%
============= ============
Tier I leverage ratio ...................................... 7.05% 6.99%
============= ============
Required Tier I leverage ratio * ........................... 3.00% 3.00%
============= ============
<FN>
* For all but the most highly rated, low risk profile organizations, the
minimum Tier I leverage ratio is to be 3% plus a cushion of 100 to 200 basis
points.
</TABLE>
21<PAGE>
<PAGE> 22
Liquidity and Cash Flows:
Liquidity is the ability to provide the cash necessary to meet customer
credit needs, satisfy depositor withdrawal requirements and to pay-off short-
term borrowings. One source of liquidity is cash and due from banks and short-
term assets such as interest-bearing deposits in other banks and federal funds
sold, which totaled $40.0 million at March 31, 1996 as compared with $41.6
million at December 31, 1995 and $50.6 million at March 31, 1995. Another
source of liquidity is borrowing capability. First Western's banking
subsidiaries have a variety of sources of short-term liquidity available to
them, including federal funds purchased from correspondent banks, sales of
securities available for sale, sales of securities under agreements to
repurchase, the Federal Reserve discount window, interbank deposits, FHLB
advances and loan participations or sales. First Western also generates
liquidity from the regular principal payments and prepayments made on its
portfolio of loans and mortgage-backed securities. First Western's banking
subsidiaries had $26.8 million of unused overnight credit lines available at
March 31, 1996.
First Western's operating activities provided cash flows of $6.1 million
during the first three months of 1996 compared with $4.8 million during the
first three months of 1995. The primary source of operating cash flows was net
income combined with noncash expenses such as the provision for possible loan
losses and depreciation along with increased accrued interest payable.
Investing activities used cash flows of $111.2 million during the first
three months of 1996 compared with using cash flows of $29.4 million for the
first three months of 1995. The growth of the securities portfolios used net
cash flows of $92.0 million during the first three months of 1996 while the
growth of the loan portfolio used net cash flows of $19.8 million. The five
branch offices acquired during the first quarter of 1995 provided First Western
with net cash flows of $88.0 million which represents the deposit liabilities
assumed by First Western net of the premium paid for the deposits and the
assets that were purchased. Most of the funds provided by the acquisition of
the branches were initially used to purchase securities available for sale.
The growth of the loan portfolio during the first three months of 1995 used net
cash flows of $38.5 million.
Financing activities provided cash flows of $104.5 million in the first
three months of 1996 with increased borrowings providing cash flows of $116.5
million. During the first three months of 1995, financing activities provided
cash flows of $31.5 million primarily as a result of an increase in deposits
of $54.8 million, with some of these cash flows used to decrease repurchase
agreements and federal funds purchased and other short-term borrowings.
22<PAGE>
<PAGE> 23
Other:
Certain of the statements and information in this Form 10-Q may be forward
looking statements. For a discussion of the factors that may affect these
statements refer to the Management's Discussion and Analysis of Financial
Condition and Results of Operations in First Western's Annual Report on Form
10-K for the year ended December 31, 1995.
23 <PAGE>
<PAGE> 24
Part II. Other Information
Items 1-3. Not applicable.
Item 4. Results of Votes of Securities Holders:
First Western's Annual Meeting of Shareholders was held on April 16,
1996. The following directors were elected for three year terms expiring in
1999: John W. Lehman, M.D., Thomas S. Mansell, Richard C. McGill, and Harold
F. Reed, Jr. John W. Sant was elected as a director for a one year term
expiring in 1997. There were no other matters voted on at the Annual
Meeting.
Item 6. Exhibits and Reports on Form 8-K:
a. Exhibits:
15.1 Letter re: Unaudited Interim Financial Information.
b. Reports on Form 8-K:
An 8-K was filed on January 4, 1996 announcing the
reauthorization of the stock repurchase program.
24<PAGE>
<PAGE> 25
Signature
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)
May 9, 1996 /s/ Robert H. Young
Robert H. Young
Senior Vice President-Finance,
Secretary and Treasurer
(Principal Financial Officer)
25<PAGE>
<PAGE> 26
FIRST WESTERN BANCORP, INC.
EXHIBITS TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Method of
Number Description Filing
- ------ ----------- ------
<C> <C> <C>
15.1 Letter re: Unaudited Interim Financial Filed
Information herewith
27.1 Financial Data Schedule Filed
herewith
</TABLE>
<PAGE> 1
DELOITTE & Exhibit 15.1
TOUCHE LLP
- ----------
- -----------------------------------------------------------------
2500 One PPG Place Telephone: (412) 338-7200
Pittsburgh, Pennsylvania 15222-5401 Facsimile: (412) 338-7380
May 9, 1996
To the Board of Directors and Shareholders of
First Western Bancorp, Inc.
New Castle, Pennsylvania 16103
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
financial information of First Western Bancorp, Inc. and subsidiaries for the
periods ended March 31, 1996 and 1995, as indicated in our report dated
April 16, 1996; because we did not perform an audit, we expressed no
opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, is
incorporated by reference in the Registration Statements of First Western
Bancorp, Inc. on Form S-8 (No. 33-46923) for the First Western Bancorp, Inc.
401(k) Profit-Sharing and Stock Bonus Plan, on Form S-8 (No. 33-00528) for
the First Western Bancorp, Inc. Incentive Stock Option Plan for Key Employees
and on Form S-3 (No. 33-40596) for the First Western Bancorp, Inc. Dividend
Reinvestment and Additional Stock Purchase Plan.
We also are aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the
Registration Statements prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and
11 of that Act.
/s/ DELOITTE & TOUCHE LLP
- ---------------
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
- ---------------
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000740876
<NAME> First Western Bancorp Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 38,860
<INT-BEARING-DEPOSITS> 1,162
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 261,947
<INVESTMENTS-CARRYING> 297,758
<INVESTMENTS-MARKET> 294,639
<LOANS> 1,046,479
<ALLOWANCE> 14,404
<TOTAL-ASSETS> 1,674,893
<DEPOSITS> 1,170,026
<SHORT-TERM> 353,399
<LIABILITIES-OTHER> 23,611
<LONG-TERM> 6,236
<COMMON> 39,103
0
0
<OTHER-SE> 82,518
<TOTAL-LIABILITIES-AND-EQUITY> 1,674,893
<INTEREST-LOAN> 22,087
<INTEREST-INVEST> 7,947
<INTEREST-OTHER> 23
<INTEREST-TOTAL> 30,057
<INTEREST-DEPOSIT> 11,763
<INTEREST-EXPENSE> 16,096
<INTEREST-INCOME-NET> 13,961
<LOAN-LOSSES> 1,290
<SECURITIES-GAINS> 383
<EXPENSE-OTHER> 9,638
<INCOME-PRETAX> 5,900
<INCOME-PRE-EXTRAORDINARY> 4,169
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,169
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.53
<YIELD-ACTUAL> 7.94
<LOANS-NON> 5,605
<LOANS-PAST> 2,644
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 14,148
<CHARGE-OFFS> 1,125
<RECOVERIES> 91
<ALLOWANCE-CLOSE> 14,404
<ALLOWANCE-DOMESTIC> 9,522
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 4,882
</TABLE>
