First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Investor Presentation (September 2018)
31 slides from First Western Financial's investor presentation, Sep 24, 2018
Slide 1: First Western Financial, Inc. The First, Western-Based Private Trust Bank
First Western Financial, Inc. The First, Western-Based Private Trust Bank Investor Presentation September 2018
Slide 2: Safe Harbor
Safe Harbor 2 This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of First Western’s managem
Slide 3: A Wealth Manager on Private Trust Bank Platform
A Wealth Manager on Private Trust Bank Platform 3 Overview Niche-focused regional wealth manager built on a private trust bank platform Headquartered in Denver, Colorado and positioned in desirable, affluent and high growth markets Target Market Households of $1+ million liquid net worth High net wo
Slide 4: MYFW: Our Five Core Strengths
First Western’s core strengths provide the foundation for driving shareholder value MYFW: Our Five Core Strengths Experienced, Tested Team Niche-focused franchise headquartered in Denver, Colorado Well-positioned in many attractive markets in Arizona, California, Colorado and Wyoming Specialized cen
Slide 5: Rationale for Starting First Western
5 Rationale for Starting First Western Competition is Everyone and No One
Slide 6: Team: Ready to Take MYFW to the Next Level
6 Team: Ready to Take MYFW to the Next Level Name Title Years at FW Years in Industry Prior Experience Scott C. Wylie Chairman, CEO & President 16 31 Chairman & CEO, Northern Trust Bank of Colorado Chairman & CEO, Trust Bank of Colorado CEO, Equitable Bancshares of Colorado and Women’s Bank, Chairma
Slide 7: Board of Directors / Trustees
Name Title Primary Business Scott C. Wylie Chairman, CEO & President First Western Financial, Inc. Julie A. Caponi, CPA Board Director / Trustee Former Finance Executive at Arconic, Inc. (fka Alcoa Inc.) Former audit partner at Deloitte Board member & Audit Committee chair for FCF (NYSE) David R. Du
Slide 8: Success in Expansion and Acquisition Growth
Success in Expansion and Acquisition Growth January 2004 Acquired Westcor Insurance Group, Inc. January 2004 Acquired James Sprout & Associates, Inc. January 2004 Acquired Poudre River Valley Trust Company February 2005 Acquired Sterling Partners/ Silversmith Financial Corp September 2006 Acquired R
Slide 9: Great Markets, Scarce Investment Opportunity
MSA State Market Share Projected % Change in HHI of $200M + (2019-2024)(3) Denver-Aurora-Lakewood CO 0.45 35.49 Fort Collins CO 2.15 44.99 Phoenix-Mesa-Scottsdale AZ 0.13 41.62 Boulder CO 0.83 28.76 Jackson WY/ID 2.90 21.42 Glenwood Springs CO 1.17 24.61 National Average 31.93 10 Source: 2017 Downto
Slide 10: The Roadmap to Shareholder Value Creation
11 The Roadmap to Shareholder Value Creation Short-Term Goals Long-Term Goals Our mission is to be the BPBFWWMC – Best Private Bank for the Western Wealth Management Client We believe First Western can be a unique, niche focused regional powerhouse with high fee income and consistent strong earnings
Slide 11: Organizational Structure Built for Scale
Finance & Accounting Risk & Compliance Enterprise Technology Human Capital Credit Analysis Bank & Trust/Investment Operations Marketing/Branding Our local, boutique private trust bank offices compete with the biggest wealth managers in the country First Western Product Groups (PG) Support Centers (S
Slide 12: Integrated Team Approach in Boutique Offices
Integrated Team Approach in Boutique Offices President Private Bankers Wealth Advisor Trust Officer 13 Lenders Portfolio Managers Team Philosophy 1. 2. 3. 4. 5. by working as a team to grow relationships Team-based incentives Relationship-based wealth management Many relationship managers to one cli
Slide 13: Different Paths to Profit Center Success
Different Paths to Profit Center Success 14 We build new offices through acquisition or de novo, and start with either banking or investment professionals Jackson Hole January 2014 Northern Colorado January 2005 Aspen October 2015 RIA, trust company acquisition Added bigger platform Rapid growth in
Slide 14: Acquire, Cross Sell Clients Using Product Groups
Acquire, Cross Sell Clients Using Product Groups 15 Wealth Planning Commercial Banking Investment Management Residential Mortgage Lending Retirement / 401(k) Plan Consulting Trust Wealth planning with specialized services (e.g. philanthropic) Proprietary ConnectView® approach, with access to CFPs, C
Slide 15: Teamwork Drives Client Satisfaction, Retention
Investment Policy Committee (IPC), Investment Management (IM), Business Development Officers (BDO). Teamwork Drives Client Satisfaction, Retention 16 Example of investment management teamwork shows how MYFW, not relationship managers, owns our clients Profit Centers Product Groups Support Centers Te
Slide 16: Our High-Quality, Recurring Revenues
Our High-Quality, Recurring Revenues 17 Q2 2018 Net interest income, before provision, plus non-interest income. Note: As of or for the six months ended June 30, 2018 (unaudited). Q2 2018 Gross Revenue(1) Earnings Themes Diverse, stable, desirable revenue mix Attractive markets and business model Ro
Slide 17: Predictable, Growing Sources of Fee Income
Predictable, Growing Sources of Fee Income 18 Note: As of or for the six months ended June 30, 2018 (unaudited). AUM Composition by Account Type ($billions) YTD 2018 Non-Interest Income ($millions) Trust and Investment Management Guided architecture Customized investment solutions Internally manage
Slide 18: Our Balanced, Private Banking Loan Portfolio
Our Balanced, Private Banking Loan Portfolio 19 Historical Gross Loans ($millions) Q2 2018 Loan Portfolio by Collateral Type (2) MYFW vs. Peers(1) – Yield on Loans Q2’18 (%) Lending Strategy MYFW uses the following Peers throughout this presentation: ALRS, BMTC, BPFH, CATC, CFR, FFWM, FRC, PGC, SYBT
Slide 19: A Balanced, Growing Core Deposit Base
A Balanced, Growing Core Deposit Base 20 Historical Total Deposits ($millions) Deposit Composition (June 30, 2018) MYFW vs. Peers(1) – Cost of Deposits Q2’18 (%) Deposit Strategy Peers include ALRS, BMTC, BPFH, CATC, CFR, FFWM, FRC, PGC, SYBT, TMP, TSC, UMBF, UVSP, and WASH. Source: S&P Global Marke
Slide 20: MYFW's Embedded Earnings Growth Drivers
21 MYFW’s Embedded Earnings Growth Drivers Remove Capital Constraints Reduce Expenses and Improve Operating Efficiency Added Revenue Generators in 2017 - 2018 Drive Client Acquisition and Increase Share of Wallet Lowering capital costs by ~$2.7 million (after-tax) per year(1) Historical balance shee
Slide 21: Our Revenues have Outgrown Expenses by ~50%
Year Ended December 31, Six Months Ended June 30, 2018 Dollars in thousands 2013 2014 2015 2016 2017 Net interest income before provision $ 19,910 $ 20,712 $ 22,466 $ 24,457 $ 27,576 $ 14,937 (Release of) provision for credit losses (1,676) 1,455 1,071 985 788 (187) Net interest income after provisi
Slide 22: Income Statement Summary
23 Year Ended December 31, Six Months Ended June 30, 2018 (Dollars in thousands) 2013 2014 2015 2016 2017 Net interest income before provision $ 19,910 $ 20,712 $ 22,466 $ 24,457 $ 27,576 $ 14,937 (Release of) provision for credit losses (1,676) 1,455 1,071 985 788 (187) Net interest income after pr
Slide 23: Adjusted Results and Additional Growth Drivers
24 Six Months Ended June 30, 2018 (Dollars in thousands) As Reported Results Staffing and Other Operating Efficiencies (1) Use of Proceeds (2) Adjusted Results Additional Growth Drivers Net interest income before provision $ 14,937 - $ 276 $ 15,213 + Gross loans up 21% 2016 to 2017, 14% YOY YTD + NI
Slide 24: A Unique and Attractive Investment
Experienced, Tested Team Built-in Operating Leverage Highly Desirable Recurring Fee Income Differentiated, Proven in the Marketplace Unique Opportunity for Investors MYFW’s core strengths provide the foundation for driving shareholder value A Unique and Attractive Investment 25
Slide 25: Appendix
Firstwestern Appendix
Slide 26: Selected Historical Consolidated Financials
Selected Historical Consolidated Financials 27 Total loans net of loan fees and costs do not include loans held for sale of $35.1 million, $22.9 million, $8.1 million and $19.9 million on June 30, 2018 and December 31, 2017, 2016 and 2015, respectively. Year Ended December 31, Six Months Ended, (Dol
Slide 27: Holistic, Integrated Risk Management
Holistic, Integrated Risk Management 28 Purpose Holistic approach for the oversight, control, and discipline to drive continuous improvement Everyone’s responsibility and non-compliance is not an option Governance framework for the process of anticipating, identifying, assessing, managing and monito
Slide 28: Key Themes of ERM
Key Themes of ERM– In the Business 29 Ensure Compliance Meet regulatory requirements Comply with good industry practices Effective, efficient, and smart compliance – a change agent for better business decisions Limit Potential Losses Improve Profitability Support Growth Risk Overlay for Decision Mak
Slide 29: Favorable Asset Quality Trends
Favorable Asset Quality Trends NPAs / Assets (%) NPLs / Loans (%) Net Charge-offs / Average Loans (%) Loan Loss Reserves / Gross Loans (%) 30 1.00 1.12 0.98 0.96 0.90 0.84 2013 2014 2015 2016 2017 Q2'18 0.62 0.07 0.19 0.07 0.00 0.00 2013 2014 2015 2016 2017 Q2'18 2.58 2.03 1.19 0.54 0.52 0.36 2013 2
Slide 30: First Western Capital Management and Mortgage Services
31 First Western Capital Management First Western Mortgage Services In late 2016, we closed our loan production office in Scottsdale, Arizona due to a lack of cultural fit and for not aligning with our long term mortgage strategy That location funded $149.8 million of mortgages during the first thre
Slide 31: Non-GAAP Reconciliation
32 Non-GAAP Reconciliation Consolidated Pre-tax Pre-provision Income For the Three Months Ended, (Dollars in thousands) June 30, 2017(1) September 30, 2017(1) December 31, 2017(1) March 31, 2018(1) June 30, 2018(1) Net Income, as reported $404 $2,746 $(1,650) $1,186 $1,048 Provision for loan losses
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