First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q1 2023 Earnings Presentation
22 slides from First Western Financial's earnings presentation, Apr 28, 2023
Slide 1: First Quarter 2023 Conference Call
First Quarter 2023 Conference Call
Slide 2: Safe Harbor
Safe Harbor 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 1Q23
Overview of 1Q23 • Net income available to common shareholders of $3.8 million, or $0.39 per diluted share 1Q23 Earnings • Pre-tax, pre-provision net income of $4.9 million(1) • Higher level of cash being held to temporarily increase balance sheet liquidity and flexibility • Total deposits increased
Slide 4: Net Income Available to Common Shareholders and Earnings per Share
Net Income Available to Common Shareholders and Earnings per Share • Net income of $3.8 million, or $0.39 diluted earnings per share, in 1Q23 • Continued profitability and prudent balance sheet management resulted in book value and tangible book value per share(1) increasing by 6.5% and 7.9%, respec
Slide 5: Loan Portfolio
Loan Portfolio Loan Portfolio Details Loan Production & Loan Payoffs • Total loans held for investment decreased $1.1 million from prior quarter • Total loans impacted by disposition of $40.9 million of non- relationship loans • Average rate on new loan production increased by 125 bps from prior qua
Slide 6: CRE Loan Portfolio Characteristics
CRE Loan Portfolio Characteristics • Conservatively underwritten, well diversified CRE loan portfolio • Multi Family comprise the largest percentage at 16.3% of total CRE loans ($123.7 million) and 5.0% of total loan portfolio • Office CRE loans represent just 11.1% of total CRE loans and 3.4% of to
Slide 7: Total Deposits
Total Deposits • Average Interest-bearing deposits up 14% from 4Q22 and average total deposit balances up 5% in 1Q23 • Total deposits declined $71 million in January primarily due to client liquidity events, followed by net deposit inflows of $29 million in February and $29 million in March • Limite
Slide 8: Trust and Investment Management
Trust and Investment Management • Total assets under management increased $275.1 million from December 31, 2022 to $6.38 billion as of March 31, 2023 • Client accounts benefited from improved market conditions in the first quarter • All five product categories increased quarter-over-quarter Total As
Slide 9: Gross Revenue
Gross Revenue • Gross revenue(1) declined 10.1% from prior quarter, primarily driven by an increase in the cost of interest- bearing liabilities, partially offset by growth in interest-earning assets • Net interest income up $1.1 million or 5.8% from 1Q22 • Non-interest income down $2.6 million or 3
Slide 10: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin • Net interest income decreased to $19.6 million, or 10.4%, from $21.8 million in 4Q22, but increased 5.8% from $18.5 million in 1Q22 • Interest income up $14.8 million or 74.6% compared to 1Q22. Interest expense increased $13.8 million or 997% • Net inter
Slide 11: Non-Interest Income
Non-Interest Income • Non-interest income decreased 11.3% from 4Q22, primarily due to seasonally lower risk management and insurance fees • Trust and Investment Management fees increased 6.4% from 4Q22 • Net gain on mortgage loans decreased from 1Q22 but increased from 4Q22 as the impact of loan pro
Slide 12: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense and Efficiency Ratio • Non-interest expense increased 3.1% from 4Q22 • Increase primarily due to an increase in Salary and employee benefits, driven by the seasonality of payroll taxes in addition to lower deferred compensation due to fewer loan originations, partially offset by
Slide 13: Asset Quality
Asset Quality • CECL accounting standard adopted on January 1, 2023 with ACL/Total Loans of 84 bps and 47 bps coverage on off-balance sheet commitments. Total decrease to retained earnings of $5.3 million, net of tax impact ◦ Provision related to purchased loans upon adoption totaled $2.5 million •
Slide 14: Consistent Value Creation
Consistent Value Creation TBV/Share(1) Up 144% Since July 2018 IPO Wealth Management Segment Diluted Pre-Tax Earnings Per Share(1) 14
Slide 15: Near-Term Outlook
Near-Term Outlook • Prudent risk management will remain top priority while economic uncertainty remains, which will impact level of profitability in short term • We expect strength of balance sheet will enable First Western to capitalize on current turmoil in banking industry to add new clients and
Slide 16: Appendix
Appendix 16 W FIRSTWesternTRUST
Slide 17: Capital and Liquidity Overview
Capital and Liquidity Overview Tangible Common Equity / TBV per Share(1) Consolidated Capital Ratios (as of 3/31/23) Liquidity Funding Sources (as of 3/31/23) (in thousands) 15.00% 12.39% Liquidity Reserves: Total Available Cash $293,570 Unpledged Investment Securities 22,019 10.00% 9.28% 9.28% 7.75
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) March 31, 2021 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 Non-interest expense $19,358 $20,583 $19,260 $19,905 $20,528 Less: amortization 77 77 77 77 64 Less: acquisition r
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 Total income before non-interest expense $24,156 $25,282 $26,555 $26,623 $25,092 Less: unrealized gains/(losses)
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted net income available to common shareholders For the Three Months Ended, (Dollars in thousands, except per share data) March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 Net income available to common shareholders $5,524 $4,482 $6,221 $5,
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation | (Dalasin toss) une 30,2022 September 30, 2022 | December 31,2022 | March 31, 2023 | Non-Mortgage income before income tax $6,926 $9,034 $8,168 $5,971 Plus: Acquisition-related expenses 347 154 195 37 Plus: Mortgage income before income tax (950) (799) (867) (810) Less: Inco
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted net interest For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended For the Three Months Ended margin March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 Interest Average Interest Avera
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