First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q2 2022 Earnings Presentation
21 slides from First Western Financial's earnings presentation, Jul 28, 2022
Slide 1: Second Quarter 2022 Conference Call
Second Quarter 2022 Conference Call
Slide 2: Safe Harbor
Safe Harbor 2 This presentation contains “forward - looking statements” within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended .. These forward - looking statements reflect the current views of First Western
Slide 3: Overview of 2Q22
3 Overview of 2Q22 Significant NIM Expansion 2Q22 Earnings Record Loan Production and Growth ▪ Total loans held for investment increased at annualized rate of 45%, driven by record loan production ▪ Increases across most major loan categories ▪ Productivity of commercial banking platform continues t
Slide 4: Net Income Available to Common Shareholders and Earnings per Share
4 Net Income Available to Common Shareholders and Earnings per Share ▪ Net income of $4.5 million, or $0.46 diluted earnings per share, in 2Q22 ▪ Excluding acquisition - related expenses, adjusted diluted earnings per share (1) of $0.49 in 2Q22 ▪ Strong profitability resulted in 1.6% and 2.0% increa
Slide 5: Wealth Management Segment Earnings
5 Wealth Management Segment Earnings (1) See Non - GAAP reconciliation (2) Wealth Management segment earnings reflects contribution of private banking, commercial banking, and trust and investment management business lines $0.86 $0.79 $0.71 $0.77 $0.75 $1.01 $1.07 $0.75 $0.80 $0.65 $0.00 $0.50 $1.00
Slide 6: Loan Portfolio
6 Loan Portfolio ▪ Total loans HFI increased $219.0 million from prior quarter ▪ Record loan production more than offset continued high level of payoffs ▪ Growth in most major loan categories with largest increases in C&I and 1 - 4 family residential ▪ Mortgage loan officers generating more jumbo AR
Slide 7: Total Deposits
7 Total Deposits ▪ Total deposits decreased $102.1 million from end of prior quarter ▪ Decrease primarily driven by fluctuations in commercial operating accounts, seasonal tax payments made by clients, and clients moving deposits into investment opportunities ▪ New client acquisition activity result
Slide 8: Trust and Investment Management
8 Trust and Investment Management ▪ Total assets under management decreased $921.7 million from March 31, 2022 to $6.28 billion as of June 30, 2022 ▪ The decrease in asset balances was primarily attributable to unfavorable market conditions resulting in a decrease in the value of assets under manage
Slide 9: Gross Revenue
(1) See Non - GAAP reconciliation Gross Revenue ▪ Gross revenue (1) unchanged from 1Q22 ▪ Higher net interest income offset by decline in non - interest income ▪ Net interest income increased to $20.1 million, or 10.1%, from $18.3 million as of March 31, 2022 and 41.6% from $14.2 million as of June
Slide 10: Net Interest Income and Net Interest Margin
10 Net Interest Income and Net Interest Margin ▪ Net interest income increased 10.1% from 1Q22, primarily due to higher average loan balances and increase in net interest margin ▪ Growth in investment portfolio resulted in modest increase in interest income from securities ▪ Net interest margin, inc
Slide 11: Non-Interest Income
11 Non - Interest Income ▪ Non - interest income decreased 19.3% from 1Q22 ▪ Declines due primarily to ▪ Decrease in net gain on mortgage due to reduction in amount of mortgage loans originated for sale as production was more heavily weighted to portfolio loans held for investment ▪ Lower TIM fees p
Slide 12: Mortgage Operations
12 Mortgage Operations ▪ Total mortgage originations (HFS and portfolio) increased 48% from prior quarter ▪ Refi/Purchase mix of 25% / 75% in Q2 compared to 41% / 59% in 1Q22 and 41% / 59% in 4Q21 ▪ Profit margin declined in Q2 due to lower lock volume for HFS loans* ▪ Non - interest expense flat qu
Slide 13: Non-Interest Expense and Efficiency Ratio
13 Non - Interest Expense and Efficiency Ratio ▪ Non - interest expense increased 6.3% from 1Q22 ▪ Increase due primarily to higher salaries and benefits expense resulting from higher commission payments on portfolio mortgage production, investment in additional banking talent to support continued g
Slide 14: Asset Quality
14 Asset Quality ▪ Stable asset quality across the portfolio with NPAs remaining consistent at 0.17% of total assets ▪ Immaterial net charge - offs again in the quarter ▪ Improved collateral valuation of largest problem loan resulted in partial release of specific reserve ▪ $0.5 million provision fo
Slide 15: Near-Term Outlook
15 Near - Term Outlook ▪ Expect continuation of positive trends in second half of 2022 driven by further organic balance sheet growth ▪ Loan pipeline remains very strong, consistent with the end of the first quarter, and should result in continued strong loan growth ➢ Well diversified loan productio
Slide 16: Appendix
Appendix 16 W Frirstwestern
Slide 17: Capital and Liquidity Overview
17 Capital and Liquidity Overview 10.15% 10.15% 12.58% 8.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% Tier 1 Capital to Risk-Weighted Assets CET1 to Risk- Weighted Assets Total Capital to Risk-Weighted Assets Tier 1 Capital to Average Assets Liquidity Funding Sources (as of 6/30/22) Liquid
Slide 18: Reconciliation: Consolidated Tangible Common Book Value Per Share
18 Non - GAAP Reconciliation Consolidated Tangible Common Book Value Per Share As of the Three Months Ended, (Dollars in thousands) Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31 , 2021 Mar. 31, 2022 June 30 , 2022 Total shareholders' equity $116,875 $127,678 $154,962 $219,041 223,266 $228,024 Le
Slide 19: Reconciliation: Wealth Management Gross Revenue
19 Non - GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Total income before non - interest expense $19,784 $20,435 $20,612 $24,156 $25,282 Less: unrealized gains/(l
Slide 20: Reconciliation: Adjusted net income available to common shareholders
20 Non - GAAP Reconciliation Adjusted net income available to common shareholders For the Three Months Ended, (Dollars in thousands, except per share data) June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Net income available to common shareholders $6,277 $6,417 $1,917
Slide 21: Reconciliation: Adjusted net interest margin
21 Non - GAAP Reconciliation Adjusted net interest margin For the Three Months Ended June 30, 2021 For the Three Months Ended September 30, 2021 For the Three Months Ended December 31, 2021 For the Three Months Ended March 31, 2022 For the Three Months Ended June 30, 2022 (Dollars in thousands) Aver
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