First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q3 2019 Earnings Presentation
17 slides from First Western Financial's earnings presentation, Oct 24, 2019
Slide 1: Third Quarter 2019 Financial Results
First Western Financial, Inc. The First, Western-Based Private Trust Bank Third Quarter 2019 Financial Results
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 3Q19
Overview of 3Q19 Loan Trends Strong Operating Earnings Continued Momentum in Business Development ▪ Average deposits increased $75.1 million from 2Q19 to 3Q19 ▪ Total deposits increased 41.3% annualized and 26.2% year-over-year ▪ AUM surpassed $6.1 billion at September 30, 2019, a 8.7% increase over
Slide 4: Net Income Available to Common Shareholders and Earnings per Share
$0.19 $0.22 $0.21 $0.30 $0.15 $0.33 $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 EPS Adjustments to EPS (1) Net Income Available to Common Shareholders and Earnings per Share 4 Net Income Available to Common Shareholders ▪ Higher revenue and well control
Slide 5: Loan Portfolio
$880 $893 $929 $966 $990 $974 $994 3Q18 4Q18 1Q19 2Q19 3Q19 2Q19 3Q19 HFI HFS Average Period End Loan Portfolio 5 Loan Portfolio Composition(1) ▪ Average loans up 12.5% year-over-year ▪ Total new held-for-investment (HFI) loan production of $55.4 million in 3Q19 vs $52.6 million in 2Q19 and $32.3 mi
Slide 6: Total Deposits
$862 $880 $981 $967 $1,042 $1,005 $1,109 3Q18 4Q18 1Q19 2Q19 3Q19 2Q19 3Q19 Average Period End Total Deposits 6 Deposit Portfolio Composition ▪ Total deposits increased $103.7 million from 2Q19, annualized growth of 41.3% and increased 26.2% from 3Q18 ▪ Strongest growth in money market deposit accou
Slide 7: Trust and Investment Management
Trust and Investment Management ▪ Total assets under management increased $148.2 million to $6.12 billion at September 30, 2019 ▪ Increase was primarily attributable to market gains, additionally $20.3 million in new assets and $45.9 million in contributions were added in Q3 2019 $5,626 $5,235 $5,78
Slide 8: Q3 2019 Gross Revenue
Non-interest Income $8,669 Net Interest Income $7,940 47.8% 52.2% Gross Revenue 8 (1) See Non-GAAP reconciliation Q3 2019 Gross Revenue(1) ▪ Gross revenue remained relatively flat from prior quarter and increased 15.1% from 3Q18 ▪ Consistent mortgage activity, higher trust and investment management
Slide 9: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin 9 Net Interest Income ▪ Net interest income consistent with prior quarter, up 2.0% from 3Q18 ▪ Net interest margin decreased to 2.95% primarily due to excess liquidity created from strong deposit inflows which will be redeployed in 4Q19 ▪ Earning asset yield
Slide 10: Non-Interest Income
Non-Interest Income 10 Total Non-Interest Income ▪ Total non-interest income increased by 2.4% due to higher trust and investment management fees and gain on sale of securities ▪ $181.7 million in mortgage loans sold in 3Q19 compared to $138.3 million sold in 2Q19 Trust & Investment Management Fees
Slide 11: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense and Efficiency Ratio 11 Total Non-Interest Expense ▪ Excluding goodwill impairment charge in 2Q19, non-interest expense increased 2.7% ▪ Increase was primarily driven by $0.5 million in equity compensation earnout related to residential mortgage business ▪ $0.14 million of non-r
Slide 12: Asset Quality
Asset Quality 12 Non-Performing Assets/Total Assets ▪ Generally stable trends in the portfolio with slight increases in non-performing and substandard loans ▪ Loss experience continues to be extremely low Net Charge-Offs/Average Loans 0.0% 0.0% 0.0% 0.0% 0.0% Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019
Slide 13: Outlook
Outlook 13 ▪ Business development platform has been effectively generating deposit and AUM growth; we now intend to increase our focus on asset generation ▪ Loan production expected to be strong in 4Q19, although we expect payoffs will continue to present a near-term headwind for loan growth ▪ Mortg
Slide 14: Appendix
Ww Firstwestern Appendix
Slide 15: Non-GAAP Reconciliation: Efficiency Ratio and Tangible Book Value
15Non-GAAP ReconciliationConsolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) September 30, 2018 December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 Non-interest expense $12,176 $11,649 $12,602 $14,659 $13,442 Less: Amortization Less: Goodwill impairment 208
Slide 16: Non-GAAP Reconciliation: Gross Revenue by Segment
16 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) September 30, 2018 December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 Total income before non-interest expense $12,383 $12,289 $12,509 $12,550 $12,554 Less: Net gain (loss) on
Slide 17: Non-GAAP Reconciliation: Impact of Goodwill Impairment
17 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 Net income available to common shareholders $1,404 $2,406 Plus: Goodwill impairment includi
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