First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Q2 2024 Earnings Presentation
18 slides from First Western Financial's earnings presentation, Jul 24, 2024
Slide 1: Second Quarter 2024 Conference Call
Second Quarter 2024 Conference Call
Slide 2: Safe Harbor
Safe Harbor Statements in this presentation regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forwar
Slide 3: Overview of 2Q24
Overview of 2Q24 • Net income available to common shareholders of $1.1 million or $0.11 per diluted share • Pre-tax, pre-provision net income(1) of $3.75 million compared to prior quarter of $3.65 million. 2Q24 Earnings • Positive trends in a number of key areas • Continued priority on prudent risk
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 $1.1 million, or $0.11 diluted earnings per share, in 2Q24 • Pre-tax, pre-provision(1) net income consistent with prior quarter and same period of prior year • Tangible book value per share(1) increased approximately
Slide 5: Loan Portfolio
Loan Portfolio Loan Portfolio Details Loan Production & Loan Payoffs ($ in millions) • Total loans held for investment decreased $19.5 million from $150 prior quarter $122.3 $101.0 $102.2 $100.0 $100.3 • Decrease due to limited new production that was more than $100 $76.6 offset by payoffs $54.8 $51
Slide 6: Total Deposits
Total Deposits • Average deposits decreased $41 million and period end deposits decreased $121 million from the prior quarter. The deposit decline was primarily driven by seasonal tax payments, operating account fluctuations and clients using liquidity for strategic investments • Success in new busi
Slide 7: Trust and Investment Management
Trust and Investment Management • Total assets under management decreased 1.8% during the quarter to $7 billion, however have increased 7.8% from 2Q23 • The decrease in AUM during the quarter was driven by asset withdrawals in custody accounts that have minimal impact on Trust and Investment Managem
Slide 8: Gross Revenue
Gross Revenue • Gross revenue(1) decreased 2% from prior quarter • Net interest income decreased 2% from prior quarter, however net interest margin improved 1 basis point • Non-interest income decreased 4% from prior quarter, however mortgage revenues increased $0.8 million quarter over quarter and
Slide 9: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin • Net interest income decreased $0.3 million, or 1.9%, from $16.1 million in 1Q24, driven primarily by a decline in interest earning cash • Net interest margin stabilized during the quarter, with a slight increase of 1 basis point from 2.34% in 1Q24 to 2.3
Slide 10: Non-Interest Income
Non-Interest Income • Non-interest income decreased 4.2% from prior quarter • Stable Trust and Investment Management fees and increase in Net Gain on Mortgage Loans offset by decrease in Bank Fees, which included elevated loan prepayment penalty fees in 1Q24 • Mortgage production increased to $141 m
Slide 11: Non-Interest Expense and Efficiency Ratio
Non-Interest Expense and Efficiency Ratio • Non-interest expense decreased to $19.0 million, primarily due to to lower legal fees resulting from continued progress on resolution of NPLs, and lower fraud losses • Non-interest expense expected to be relatively consistent over next few quarters with pr
Slide 12: Asset Quality
Asset Quality • NPAs increased to $49.3 million due to the foreclosure on two properties held as collateral that were placed in OREO and more than offset the resulting decrease in NPLs • Past due loans declined for the second consecutive quarter • ACL/Adjusted Total Loans(1) increased to 1.12% in 2Q
Slide 13: Near-Term Outlook
Near-Term Outlook • Prudent risk management and conservative underwriting criteria expected to result in modest asset growth in 2024 until economic conditions improve • Deposit gathering will remain a top priority throughout the organization with increased focus on targeting deposit rich industries
Slide 14: Appendix
Appendix 14 W FIRSTWesternTRUST
Slide 15: Capital and Liquidity Overview
Capital and Liquidity Overview Tangible Common Equity / TBV per Share(1) $240,000 $215,134 $208,760 $210,884 $213,731 $220,000 $200,000 $187,139 $180,000 $160,000 $140,000 $130,704 $120,000 $104,411 $91,662 $100,000 $80,000 $60,000 $13.15 $16.44 $19.87 $21.99 $22.01 $22.21 $22.27 $40,000 $11.50 $20,
Slide 16: Non-GAAP Reconciliation
Non-GAAP Reconciliation Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Non-interest expense $ 18,519 $ 18,314 $ 18,276 $ 19,696 $ 19,001 Less: amortization 62 62 62 57 56 Adjusted non-in
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 Total income before non-interest expense $ 19,529 $ 21,647 $ 13,362 $ 21,890 $ 18,242 Less: unrealized gains/(los
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Pre-tax, pre-provision net income For the Three Months Ended, (Dollars in thousands) June 30, 2023 March 31, 2024 June 30, 2024 Income before income taxes $ 2,035 $ 3,579 $ 1,415 Plus: provision (release) for credit losses 1,843 72 2,334 Pre-tax, pre-provision (release) net i
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