First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q4 2022 Earnings Presentation
19 slides from First Western Financial's earnings presentation, Jan 26, 2023
Slide 1: Fourth Quarter 2022 Conference Call
Fourth Quarter 2022 Conference Call
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 Financial
Slide 3: Overview of 4Q22
3 Overview of 4Q22 Strong Deposit Growth 4Q22 Earnings Well Balanced Loan Growth ▪ Despite tighter underwriting and pricing criteria, total loans held for investment increased at 21% annualized rate ▪ Increasing contributions from newer markets in Arizona, Wyoming and Montana ▪ Growth in most major
Slide 4: Net Income Available to Common Shareholders and Earnings per Share
4 Net Income Available to Common Shareholders and Earnings per Share ▪ Net income of $5.5 million, or $0.56 diluted earnings per share, in 4Q22 ▪ Excluding acquisition-related expenses, adjusted diluted earnings per share(1) of $0.58 in 4Q22 ▪ Strong profitability resulted in 2.5% and 3.0% increase
Slide 5: Loan Portfolio
5 Loan Portfolio ▪ Total loans held for investment increased $121.2 million from prior quarter ▪ Continued strong loan production and a moderation in payoffs results in another quarter of significant loan growth ▪ Average rate on new loan production increased by more than 100 bps from prior quarter
Slide 6: Total Deposits
6 Total Deposits ▪ Total deposits increased at 44% annualized rate in 4Q22 ▪ Some migration of noninterest-bearing deposits into interest-bearing categories as clients seek higher rates for their excess liquidity ▪ Time deposits added to lock-in longer-term fixed rate funding and help improve abilit
Slide 7: Trust and Investment Management
7 Trust and Investment Management ▪ Total assets under management increased $188.6 million from September 30, 2022 to $6.11 billion as of December 31, 2022 ▪ All model portfolios continue to outperform their respective benchmark helping moderate the impact of this year’s market pullback $7,352 $7,19
Slide 8: Gross Revenue
(1) See Non-GAAP reconciliation Gross Revenue ▪ Gross revenue(1) relatively consistent with prior quarter ▪ Higher non-interest income partially offset decline in net interest income ▪ Consistent growth in balance sheet and client base resulted in 4Q22 gross revenue(1) increasing 23.8% from same qua
Slide 9: Net Interest Income and Net Interest Margin
9 Net Interest Income and Net Interest Margin ▪ Net interest income decreased to $21.8 million, or 4.6%, from $22.9 million in 3Q22, but increased 51.6% from $14.4 million in 4Q21 ▪ Net interest income decreased from 3Q22 due to higher interest expense resulting from strong deposit growth and increa
Slide 10: Non-Interest Income
10 Non-Interest Income ▪ Non-interest income increased 3.4% from 3Q22, primarily due to increases in bank fees and risk management and insurance fees ▪ Increase in risk management and insurance fees reflect typical seasonal increase in fourth quarter, while increase in bank fees partially driven by
Slide 11: Non-Interest Expense and Efficiency Ratio
11 Non-Interest Expense and Efficiency Ratio ▪ Non-interest expense increased 3.3% from 3Q22 ▪ Increase primarily attributable to higher data processing fees and other operational costs related to enhancements to Trust and Investment Management platform ▪ Following investments in talent and technolo
Slide 12: Asset Quality
12 Asset Quality ▪ Increase in NPAs primarily attributable to one commercial loan with multiple sources of repayment ▪ $1.2 million provision for loan losses related to growth in total loans and changes in portfolio mix ▪ ALLL/Adjusted Total Loans(1) increased to 0.78% in 4Q22 from 0.77% in 3Q22 ▪ C
Slide 13: 2023 Outlook and Priorities
13 2023 Outlook and Priorities ▪ Well positioned to protect shareholder value during economic downturn and generate profitable growth as economic conditions improve ▪ Increased focus on core deposit gathering to fund loan production ▪ Strong business development capabilities and increasing contribut
Slide 14: Appendix
Appendix 14 W FirSTwestern
Slide 15: Capital and Liquidity Overview
15 Capital and Liquidity Overview 9.28% 9.28% 12.37% 7.81% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% Tier 1 Capital to Risk-Weighted Assets CET1 to Risk- Weighted Assets Total Capital to Risk-Weighted Assets Tier 1 Capital to Average Assets Liquidity Funding Sources (as of 12/31/22) Liquidi
Slide 16: Non-GAAP Reconciliation: Tangible Common Book Value Per Share
16 Non-GAAP Reconciliation Consolidated Tangible Common Book Value Per Share As of, (Dollars in thousands) Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 September 30, 2022 Dec. 31, 2022 Total shareholders' equity $116,875 $127,678 $154,962 $219,041 $234,862 $240,864 Less: Goodwill and othe
Slide 17: Non-GAAP Reconciliation: Gross Revenue
17 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Total income before non-interest expense $20,612 $24,156 $25,282 $26,555 $26,623 Less: unrealized gains/(l
Slide 18: Non-GAAP Reconciliation: Adjusted Net Income
18 Non-GAAP Reconciliation Adjusted net income available to common shareholders For the Three Months Ended, (Dollars in thousands, except per share data) December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net income available to common shareholders $1,917 $5,524 $4,4
Slide 19: Non-GAAP Reconciliation: Adjusted Net Interest Margin
19 Non-GAAP Reconciliation Adjusted net interest margin For the Three Months Ended December 31, 2021 For the Three Months Ended March 31, 2022 For the Three Months Ended June 30, 2022 For the Three Months Ended September 30, 2022 For the Three Months Ended December 31, 2022 (Dollars in thousands) Av
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