First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q4 2021 Earnings Presentation
23 slides from First Western Financial's earnings presentation, Jan 27, 2022
Slide 1: Fourth Quarter 2021 Conference Call
Fourth Quarter 2021 Conference Call
Slide 2: Safe Harbor
Safe Harbor 2 This presentation contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended .. These forward - looking statements reflect the current views of First Western
Slide 3: Overview of 4Q21
3 Overview of 4Q21 Strong Organic Balance Sheet Growth 4Q21 Earnings Teton Financial Services Acquisition ▪ Acquisition closed on December 31, 2021 ▪ Upon closing, acquisition was immediately accretive to tangible book value ▪ Integration proceeding on schedule with core banking system integration a
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 $1.9 million, or $0.23 diluted earnings per share, in 4Q21 ▪ Excluding acquisition - related expenses, adjusted diluted earnings per share (1) of $0.57 in 4Q21 ▪ Strong profitability and Teton Financial Services acq
Slide 5: Wealth Management Segment Earnings
5 Wealth Management Segment Earnings (1) See Non - GAAP reconciliation $0.69 $0.73 $0.86 $0.79 $0.71 $1.63 $3.09 $0.91 $0.99 $1.01 $1.07 $0.75 $4.26 $3.81 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY20 FY21 Wealth Management Segment Consolida
Slide 6: Loan Portfolio
6 Loan Portfolio ▪ Total loans HFI increased $350.8 million from prior quarter ▪ Teton Financial Services acquisition contributed $252.3 million in loans HFI ▪ Organic loan growth (1) of $98.5 million in 4Q21 ▪ Strong organic growth across most portfolios ▪ New production in Cash, Securities and Oth
Slide 7: Total Deposits
7 Total Deposits ▪ Total deposits increased $423.4 million from end of prior quarter ▪ Teton Financial Services acquisition contributed $379.2 million in deposits ▪ Organic deposit growth (1) of $44.2 million ▪ Strong new client acquisition activity resulted in $110 million in new deposit accounts i
Slide 8: Commercial Banking Driving Growth
▪ During 2020, expanded commercial banking team and added construction lending expertise ▪ Increase in commercial banking clients contributing to growth in total loans and low - cost deposits while improving overall diversification ▪ Stronger commercial banking platform complements private banking a
Slide 9: Trust and Investment Management
9 Trust and Investment Management ▪ Total assets under management increased $445.9 million from September 30, 2021 to $7.35 billion at December 31, 2021 ▪ The increase in asset balances was attributable to the Teton acquisition and improving market conditions as well as account additions and new acc
Slide 10: Paycheck Protection Program Overview
(1) All numbers represented do not include the impact of taxes (2) The deferred loan origination expenses are recorded in non - interest expenses (Salaries and Benefits) and amortized throug h net interest income (3 ) Includes $0.8 million in SBA fee income less $0.1 million of deferred loan origina
Slide 11: Gross Revenue
(1) See Non - GAAP reconciliation (2) Gross Revenue for Capital Management includes amounts for the fourth quarter of 2020 through the completion of the sale of th e L A Fixed Income Team on November 16, 2020. Financial results after that date for the unsold portion are presented in Wealth Managemen
Slide 12: Net Interest Income and Net Interest Margin
12 Net Interest Income and Net Interest Margin ▪ Net interest income decreased 3.1% from 3Q21, primarily due to lower PPP fees and purchase accretion income ▪ Excluding PPP fees and purchase accretion income, net interest income increased $0.3 million from 3Q21 ▪ Net interest margin, including PPP a
Slide 13: Non-Interest Income
13 Non - Interest Income ▪ Non - interest income decreased 9.1% from 3Q21 ▪ Lower net gain on mortgage loans offset increases in most other areas ▪ Trust and Investment Management fees increased 6.8% from fourth quarter of 2020 ▪ $0.5 million net gain on equity interests in 4Q21 $9,954 $10,615 $9,49
Slide 14: Mortgage Operations
14 Mortgage Operations ▪ Mortgage locks down 39% from prior quarter ▪ Refi/Purchase mix of 41% / 59% in 4Q21 compared to 39% / 61% in 3Q21 and 49% / 51% in 2Q21 ▪ Profit margin down 38% due to decreased revenue as a result of the decrease in locks ▪ Non - interest expense down 29% in Mortgage segmen
Slide 15: Non-Interest Expense and Efficiency Ratio
15 Non - Interest Expense and Efficiency Ratio ▪ Non - interest expense increased 24.7% from 3Q21 ▪ 4Q21 included $3.7 million of acquisition - related expense, compared with $0.3 million in 3Q21 ▪ Excluding acquisition - related expense, non - interest expense increased from 3Q21 primarily due to h
Slide 16: Asset Quality
16 Asset Quality ▪ Stable asset quality across the portfolio ▪ Immaterial net charge - offs again in the quarter ▪ $0.8 million provision for loan losses related to growth in total loans ▪ Non - performing assets decreased to 0.17% of total assets from 0.21% in 3Q21 ▪ ALL/Adjusted Total Loans (1) de
Slide 17: 2022 Outlook and Priorities
17 2022 Outlook and Priorities ▪ First Western is well positioned to deliver another strong year of organic and acquisitive growth in 2022 ▪ Increasing production from commercial banking platform expected to result in strong organic loan growth ▪ Focused on fully realizing the synergies from Teton F
Slide 18: Appendix
Appendix 18 W Frirstwestern
Slide 19: Capital and Liquidity Overview
19 Capital and Liquidity Overview 10.54% 10.54% 13.54% 9.31% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 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 12/31/21
Slide 20: Reconciliation: Tangible Common Book Value Per Share
20 Non - GAAP Reconciliation Consolidated Tangible Common Book Value Per Share As of the Three Months Ended, (Dollars in thousands) Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 September 30, 2021 Dec. 31 , 2021 Total shareholders' equity $116,875 $127,678 $154,962 $175,129 $219,041 Less: Preferred stoc
Slide 21: Reconciliation: Gross Revenue by Segment
21 Non - GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Total income before non - interest expense $17,973 $18,471 $19,782 $20,438 $20,619 Less: Net gain on equ
Slide 22: Reconciliation: Adjusted Net Income Available to Common Shareholders
22 Non - GAAP Reconciliation Adjusted net income available to common shareholders For the Three Months Ended, (Dollars in thousands, except per share data) December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 Net income available to common shareholders $4,874 $5,999 $6
Slide 23: Reconciliation: Adjusted Net Interest Margin
23 Non - GAAP Reconciliation Adjusted net interest margin For the Three Months Ended March 31, 2021 For the Three Months Ended June 30, 2021 For the Three Months Ended September 30, 2021 For the Three Months Ended December 31, 2021 (Dollars in thousands) Average Balance Interest Earned/Paid Average
First Western Financial — Q4 2021 Earnings Presentation on 6ix