First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — KBW Conference 2019
20 slides from First Western Financial's conference presentation, Jul 29, 2019
Slide 1: The First, Western-Based Private Trust Bank - KBW Conference Presentation
First Western Financial, Inc. The First, Western-Based Private Trust Bank KBW Conference Presentation July 2019
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: 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 ▪ Specializ
Slide 4: 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 4
Slide 5: Rationale for Starting First Western; Competition is Everyone and No One
5 Rationale for Starting First Western Competition is Everyone and No One
Slide 6: 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 7: Emerging From a Cycle of Capital Constraint
$110 $159 $327 $433 $478 $525 $509 $485 $533 $610 $673 $814 $894 $939 $102 $147 $270 $407 $472 $530 $596 $561 $589 $710 $754 $816 $938 $1,005 $1,256 $1,378 $2,133 $3,057 $4,119 $4,042 $3,952 $4,523 $4,842 $4,744 $4,926 $5,374 $5,235 $5,968 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $0 $200
Slide 8: 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 8 (1) Source: 2018 Dow
Slide 9: 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) Sup
Slide 10: Acquire, Cross Sell Clients Using Product Groups
Acquire, Cross Sell Clients Using Product Groups 10 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 CFP
Slide 11: Our High-Quality, Recurring Revenues
$43.7 $49.7 $54.3 $55.2 $57.8 $29.3 $31.4 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 YTD 2Q18 YTD 2Q19 Non-Interest Income, excluding net gain/(loss) on sale of securities Net Interest Income Our High-Quality, Recurring Revenues 11 (1) See Non-GAAP reco
Slide 12: Revenue Growth Exceeding Expense Growth
$43.5 $45.6 $49.8 $49.5 $50.2 $27.3 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 YTD 2Q19 $43.7 $49.7 $54.3 $55.2 $57.8 $31.3 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 YTD 2Q19 Revenue Growth Exceeding Expen
Slide 13: Diverse Sources of Fee Income
Managed Trust $1.7 28.0% 401(k)/ Retirement $1.0 16.7% Directed Trust $0.9 15.6% Custody $0.5 7.7% Investment Agency $1.9 32.0% $27.7 $27.2 $14.2 $15.6 December 31, 2017 December 31, 2018 June 30, 2018 June 30, 2019 Diverse Sources of Fee Income 13 (1) As of or for the six months ended June 30, 2019
Slide 14: Our Balanced, Private Banking Loan Portfolio
$532.5 $610.4 $672.8 $813.7 $894.0 $939.4 2014 2015 2016 2017 2018 Q2'19 Our Balanced, Private Banking Loan Portfolio 14 Historical Gross Loans ($millions) Q2 2019 Loan Portfolio by Collateral Type (1) Lending Strategy (1) As of June 30, 2019, excluding deferred costs, net ▪ Gross loans increased 11
Slide 15: A Balanced, Growing Core Deposit Base
$588.8 $709.9 $753.9 $816.1 $937.8 $1,005.2 2014 2015 2016 2017 2018 Q2'19 A Balanced, Growing Core Deposit Base 15 Historical Total Deposits ($millions) Q2 2019 Deposit Composition(1) Deposit Strategy (1) As of June 30, 2019. ▪ Total deposits increased 19.1% from June 30, 2018 ▪ Cross-sell addition
Slide 16: MYFW's Embedded Earnings Growth Drivers
16 MYFW’s Embedded Earnings Growth Drivers Removed Capital Constraints Reduce Expenses and Improve Operating Efficiency Added Revenue Generators Drive Client Acquisition and Increase Share of Wallet ▪ Lowered capital costs by ~$2.7 million (after-tax) per year ▪ Historical balance sheet growth was B
Slide 17: Outlook
Outlook 17 ▪ Business development platform expected to continue to gain traction and drive further increases in gross revenue ▪ Second half of 2019 expected to be as strong as the first half ▪ Mortgage activity expected to remain strong ▪ Continued improvement in operating efficiencies despite furth
Slide 18: Appendix
Ww Firstwestern Appendix
Slide 19: Non-GAAP Reconciliation: Pre-tax, Pre-provision Income
19 Non-GAAP Reconciliation Consolidated Pre-tax, Pre-provision Income For the Twelve Months Ended December 31, (Dollars in thousands) 2014 2015 2016 2017 2018 Net Income, as reported $10,990 $2,650 $2,302 $2,023 $5,647 Provision for loan losses 1,455 1,071 985 788 180 Income tax (benefit) expense (1
Slide 20: Non-GAAP Reconciliation: Consolidated Gross Revenue
20 Non-GAAP Reconciliation Consolidated Gross Revenue For the Years Ended, (Dollars in thousands) 2014 2015 2016 2017 2018 Total income before non-interest expense $42,533 $49,339 $53,394 $54,501 $57,617 Less: Net gain on sale of securities 321 717 114 81 - Plus: Provision for credit loss 1,455 1,07