First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q1 2020 Earnings Presentation
26 slides from First Western Financial's earnings presentation, Apr 30, 2020
Slide 1: First Quarter 2020 Conference Call
First Western Financial, Inc. The First, Western-Based Private Trust Bank First Quarter 2020 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: COVID-19 Impact Overview
Ww Figstwestern COVID-19 Impact Overview
Slide 4: Operational Response
Operational Response 4 .. Business Continuity Plan activated in early February .. Daily meeting of Pandemic Response Team .. All offices open and functioning; client service by appointment only .. 90% of associates working from home routinely, 100% enabled .. All client and support operations fully
Slide 5: Client Engagement and Support Overview
Client Engagement and Support Overview Trust and Investment Management Banking .. Active client calling program to assess impact of COVID-19 .. All credits placed into risk categories based on data gathered .. Loan modification program, including payment deferrals, extensions and financial covenant
Slide 6: Notable Trends and Data Points
Notable Trends and Data Points 6 .. Positive business development trends in January and February Strong loan and deposit growth Steady expansion in net interest margin .. No meaningful change in credit line utilization rate since crisis started .. Loan pipeline slightly down from pre-crisis leve
Slide 7: Loan Portfolio Composition
Loan Portfolio Composition 7 Cash, Securities and Other 14% 1 - 4 Family Residential 40% Non-Owner Occupied CRE 18% Construction and Development 2% Owner Occupied CRE 12% Commercial and Industrial 14% Commercial 58% Consumer 42% $1.0 Billion (as of 3/31/20) Commercial vs. Consumer
Slide 8: Commercial Loans by Industry
Commercial Loans by Industry 8 44% 16% 10% 7% 4% 4% 3% 3% 3% 2% 2% 2% Real Estate / Rental and Leasing Finance and Insurance Health Care and Social Assistance Other Miscellaneous⁽¹⁾ Consumer Professional, Scientific and Technical Services Accommodation and Food Services Construction Arts, Entertainm
Slide 9: CRE Loans By Property Type
CRE(1) Loans By Property Type 9 1-4 Family Construction 3% Other Construction & Land Development 6% 1st or 2nd DOT 5+ SFR Units 9% 1st & 2nd DOT- 1-4 Family Dwelling 1% Office/Office Condo 17% Commercial Office Building 12% Other Commercial 15% Hotel / Motel 3% Restaurant 1% Retail 14% Strip Center
Slide 10: Exposure to Stressed Industries
Exposure to Stressed Industries (as of 3/31/20) 10 Industry Outstanding Balances ($ in millions) % of Total Loans Unused Commitments ($ in Millions) Portfolio Characteristics Energy Related $18.3 1.8% $17.2 .. Indirect business or personal exposure to energy industry .. Collateral type: 49% business
Slide 11: Capital and Liquidity Overview
Capital and Liquidity Overview 11 Liquidity Funding Sources (as of 3/31/20) Liquidity Reserves: Total Available Cash $117,811,270 Unpledged Investment Securities $ 47,365,999 Borrowed Funds: Unsecured: Credit Lines $ 54,000,000 Secured: FHLB Available $378,745,864 FRB Available $ 1,203,604 Brokered
Slide 12: Near-Term Outlook and Expectations
Near-Term Outlook and Expectations 12 .. Excluding impact of PPP loans, NIM should continue to expand, while fee income should normalize .. Decrease in non-recurring expenses for Q2 - expect core NIE of $14-14.5M .. Share repurchase activity on hold during duration of crisis as capital can be better
Slide 13: First Quarter 2020 Financial Review
First Quarter 2020 Financial Review
Slide 14: Net Income Available to Common Shareholders and Earnings per Share
$0.21 $0.33 $0.30 $0.32 $0.22 $0.15 $0.05 $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 EPS Adjustments to EPS (1) (1) Net Income Available to Common Shareholders and Earnings per Share 14 Net Income Available to Common Shareholders .. Strong operational
Slide 15: Loan Portfolio
$929 $966 $990 $1,018 $1,054 $1,045 $1,107 1Q19 2Q19 3Q19 4Q19 1Q20 4Q19 1Q20 HFI HFS Average Period End Loan Portfolio 15 Loan Portfolio Composition(1) .. Gross loans held-for-investment (HFI) increased 18.4% annualized .. Total new HFI loan production of $122.5 million in 1Q20 vs $146.1 million in
Slide 16: Total Deposits
$981 $967 $1,042 $1,092 $1,085 $1,087 $1,178 1Q19 2Q19 3Q19 4Q19 1Q20 4Q19 1Q20 Average Period End Total Deposits 16 Deposit Portfolio Composition .. Total deposits increased $91.7 million from end of prior quarter .. Strong growth in noninterest-bearing and money market accounts .. Continued improv
Slide 17: Trust and Investment Management
Trust and Investment Management .. Total assets under management decreased $551.2 million from December 31, 2019 to $5.64 billion at March 31, 2020 .. Decrease was primarily attributable to volatility in markets resulting from COVID-19 pandemic $5,781 $5,968 $6,116 $6,188 $5,636 Q1 2019 Q2 2019 Q3 2
Slide 18: 1Q20 Gross Revenue
Non-interest Income $7,767 Net Interest Income $8,931 53.5% 46.5% Gross Revenue 18 (1) See Non-GAAP reconciliation 1Q20 Gross Revenue(1) .. Gross revenue(1) increased 11.7% from 1Q19 .. Strong year-over-year growth in both net interest income and non-interest income Gross Revenue(1) ($millions) $14.
Slide 19: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin 19 Net Interest Income .. Net interest income increased 9.0% from 4Q19, due to an increase in average loans and a higher net interest margin .. Net interest margin increased to 3.14%, primarily due to a 20 basis point decline in the cost of funds Net Interes
Slide 20: Non-Interest Income
$4,670 $4,693 $4,824 $4,748 $4,731 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Non-Interest Income 20 Total Non-Interest Income .. Non-interest income declined from 4Q19 primarily due to a decrease in insurance fees .. The uncertainty of COVID-19’s impact on the economy caused major disruptions in the m
Slide 21: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense and Efficiency Ratio 21 Total Non-Interest Expense(1) .. Non-interest expense in 1Q20 included $0.6 million net loss on intangibles held for sale related to the Capital Management segment .. Excluding the loss, non-interest expense increased 7.7% from 4Q19 .. Increase was primar
Slide 22: Asset Quality
Asset Quality 22 Non-Performing Assets/Total Assets .. Non-performing assets declined due to paydowns on non-performing loans .. No charge-offs in the quarter .. $0.4 million provision expense primarily reflects strong growth in total loans and a downgrade in the economic forecast due to the impact
Slide 23: Appendix
Ww Figstwestern Appendix
Slide 24: Non-GAAP Reconciliation: Efficiency Ratio and Tangible Book Value
24 Non-GAAP Reconciliation Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 Non-interest expense $12,602 $14,659 $13,442 $13,082 $14,647 Less: Amortization 173 142 52 7 2 Less: Goodwill i
Slide 25: Non-GAAP Reconciliation: Gross Revenue by Segment
25 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 Total income before non-interest expense $12,509 $12,550 $12,554 $12,534 $13,023 Less: Net gain on sale of se
Slide 26: Non-GAAP Reconciliation: Goodwill Impairment Impact
26 Non-GAAP Reconciliation Impact of Goodwill impairment – Net income available to common shareholder For the Three Months Ended, (Dollars in thousands, except per share data) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 Net income available to common shareholders $1,404 $2,406
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