First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q4 2018 Earnings Presentation
17 slides from First Western Financial's earnings presentation, Jan 24, 2019
Slide 1: Fourth Quarter 2018 Financial Results
First Western Financial, Inc. The First, Western-Based Private Trust Bank Fourth Quarter 2018 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 Q418
Overview of Q418 Further Improvement in Efficiencies Continued Ramp Up in Earnings Strong Balance Sheet Growth .. Increased gross loans at a 17.1% annualized rate from prior quarter .. Increased deposits at a 26.9% annualized rate from prior quarter .. Produced stable net interest margin .. Continue
Slide 4: Net Income Available to Common Shareholders and Earnings per Share
$(0.09) $0.11 $0.08 $0.19 $0.22 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net Income Available to Common Shareholders and Earnings per Share 4 Net Income (loss) Available to Common Shareholders .. Continued execution on embedded growth drivers produced strong improvement in profitability .. Net income
Slide 5: Loan Portfolio
$808 $831 $862 $880 $893 $875 $908 4Q17 1Q18 2Q18 3Q18 4Q18 3Q18 4Q18 HFI HFSAverage Period End Loan Portfolio 5 Loan Portfolio Composition(1) .. Annualized growth of 17.1% in gross loans from Q3 2018 .. Total new loan production of $102 million vs $32 million in Q3 2018 .. Well diversified growth w
Slide 6: Total Deposits
$801 $810 $838 $862 $880 $879 $938 4Q17 1Q18 2Q18 3Q18 4Q18 3Q18 4Q18 Average Period End Total Deposits 6 Deposit Portfolio Composition .. Total deposits increased $59.1 million from Q3 2018, annualized growth of 26.9% .. Strongest growth in money market deposit accounts .. Inflows of trust deposits
Slide 7: Trust and Investment Management
Trust and Investment Management .. Total assets under management decreased $391.0 million from Q3 2018 .. Decrease largely related to decline in equity market (S&P down 16.7% in Q4 2018) .. First Western Fixed Income Fund receives 5-star Morningstar rating .. Net client inflows of $12.8 million duri
Slide 8: Q4 2018 Gross Revenue
Non-interest Income $6.4 MillionNet Interest Income $7.9 Million 55.4% 44.6% Gross Revenue 8(1) See Non-GAAP reconciliation Q4 2018 Gross Revenue(1) .. Gross revenue stable with prior quarter .. Balance sheet growth drove an 8.7% NII improvement year over year .. Growth in wealth management segment
Slide 9: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin 9 Net Interest Income .. Net interest income increased 1.4%, primarily due to higher average loan balances .. Net interest margin remains stable at 3.29% .. Increase in loan yields largely offsetting increase in deposit costs .. Inflows of high beta trust de
Slide 10: Non-Interest Income
Non-Interest Income 10 Total Non-Interest Income .. Total non-interest income decreased by 4.3% due to lower gains on mortgage loans sold .. Trust and investment management fees were flat in spite of market headwinds Trust & Investment Management Fees $8,429 $7,292 $6,892 $6,638 $6,351 Q4 2017 Q1 20
Slide 11: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense and Efficiency Ratio 11 Total Non-Interest Expense .. Total non-interest expense declined 4.3%, primarily due to a decrease in accrued incentive compensation .. Efficiency ratio(1) of 80.6%, an improvement from 83.0% in Q3 2018, and 86.5% in Q4 2017 Operating Efficiency Ratio(1)
Slide 12: Asset Quality
Asset Quality 12 Non-Performing Assets/Total Assets .. Total NPAs stable quarter over quarter .. Our loss experience continues to be extremely low .. Q4 earnings includes a growth related provision of $0.3 million Net Charge-Offs/Average Loans 0.0% 0.0% 0.0% 0.0% 0.0% Q4 2017 Q1 2018 Q2 2018 Q3 2018
Slide 13: Progress Report on Earnings Drivers
Progress Report on Earnings Drivers 13 Earnings Driver 4Q18 Update Lower capital costs • First quarter with no preferred stock dividend payment Increased loan growth • Total gross loans up 17.1% annualized in 4Q18 Higher fee income • Slowdown in mortgage market driving lower gain on loan sales Impro
Slide 14: Outlook
Outlook 14 .. Revenue growth driven by continued traction from investments in business development platform Full executive team in place for 2019 Business Development Officers becoming more seasoned and productive Mortgage Loan Originators moving into existing offices .. Expansion of our mortg
Slide 15: Appendix
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Slide 16: Non-GAAP Reconciliation: Consolidated Efficiency Ratio
16 Non-GAAP Reconciliation Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Non-interest expense $13,810 $13,286 $13,084 $12,176 $11,649 Less: Amortization 230 230 230 208 163 Adjusted
Slide 17: Non-GAAP Reconciliation: Gross Revenue by Segment
17 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Total income before non-interest expense $13,402 $12,711 $12,257 $12,383 $12,289 Less: Net gain (loss) on
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