First Western Financial, Inc. · NASDAQ:MYFW
First Western Financial — Investor Presentation (May 2019)
32 slides from First Western Financial's investor presentation, May 6, 2019
Slide 1: First Western Financial, Inc. The First, Western-Based Private Trust Bank
First Western Financial, Inc. The First, Western-Based Private Trust Bank Investor Presentation May 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: A Wealth Manager on Private Trust Bank Platform
A Wealth Manager on Private Trust Bank Platform 3 Overview .. Niche-focused regional wealth manager built on a private trust bank platform .. Headquartered in Denver, Colorado and positioned in desirable, affluent and high growth markets Target Market .. Households of $1+ million liquid net worth ..
Slide 4: MYFW: 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 .. Specia
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: Team: Ready to Take MYFW to the Next Level
6 Team: Ready to Take MYFW to the Next Level Name Title Years at FW Years in Industry Prior Experience Scott C. Wylie Chairman, CEO & President 17 32 . Chairman & CEO, Northern Trust Bank of Colorado .. Chairman & CEO, Trust Bank of Colorado .. CEO, Equitable Bancshares of Colorado and Women’s Bank,
Slide 7: Board of Directors
Name Title Primary Business Scott C. Wylie Chairman, CEO & President . First Western Financial, Inc. Julie A. Caponi, CPA Board Director / Trustee . Former Finance Executive at Arconic, Inc. (fka Alcoa Inc.) .. Former audit partner at Deloitte .. Board member & Audit Committee chair for FCF (NYSE) D
Slide 8: 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 9: Emerging From a Cycle of Capital Constraint
$110 $159 $327 $433 $478 $525 $509 $485 $533 $610 $673 $814 $894 $931 $102 $147 $270 $407 $472 $530 $596 $561 $589 $710 $754 $816 $938 $978 $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 $5,781 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $0 $200 $4
Slide 10: 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 10 (1) Source: 2018 Do
Slide 11: The Roadmap to Shareholder Value Creation
11 The Roadmap to Shareholder Value Creation Short-Term Goals Long-Term Goals Our mission is to be the BPBFWWMC – Best Private Bank for the Western Wealth Management Client We believe First Western can be a unique, niche focused regional powerhouse with high fee income and consistent strong earnings
Slide 12: 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 (P
Slide 13: Integrated Team Approach in Boutique Offices
Integrated Team Approach in Boutique Offices President Private Bankers Wealth Advisor Trust Officer 13 Lenders Portfolio Managers Team-based incentives Relationship-based wealth management Many relationship managers to one client Product group specialists Holistic view of the client – ConnectView® T
Slide 14: Different Paths to Profit Center Success
Different Paths to Profit Center Success 14 We build new offices through acquisition or de novo, and start with either banking or investment professionals Jackson Hole January 2014 Northern Colorado January 2005 Aspen October 2015 RIA, trust company acquisition Added bigger platform Rapid growth in
Slide 15: Acquire, Cross Sell Clients Using Product Groups
Acquire, Cross Sell Clients Using Product Groups 15 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 C
Slide 16: Teamwork Drives Client Satisfaction, Retention
(1) Investment Policy Committee (IPC), Investment Management (IM), Business Development Officers (BDO). Teamwork Drives Client Satisfaction, Retention 16 Example of investment management teamwork shows how MYFW, not relationship managers, owns our clients Profit Centers Product Groups Support Center
Slide 17: Our High-Quality, Recurring Revenues
$43.7 $49.7 $54.3 $55.2 $57.8 $14.7 $14.9 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 March 31, 2018 March 31, 2019 Non-Interest Income, excluding net gain/(loss) on sale of securities Net Interest Income Our High-Quality, Recurring Revenues 17(1) See No
Slide 18: Predictable, Growing Sources of Fee Income
$18.9 $19.2 $5.2 $4.7 December 31, 2017 December 31, 2018 March 31, 2018 March 31, 2019 Predictable, Growing Sources of Fee Income 18Note: As of or for the quarter ended March 31, 2019 (unaudited). Totals may not add up due to rounding. AUM Composition by Account Type ($billions)Q1’19 Non-Interest I
Slide 19: Private Bank Model Generates Strong Fee Income
57.6% 46.2% 39.1% 33.7% 33.6% 33.4% 31.4% 30.2% 28.0% 27.3% 26.9% 26.8% 26.5% 17.8% 17.4% ALRS MYFW UMBF CATC BMTC BPFH WASH TSC SYBT UVSP PGC CFR TMP FFWM FRC Noninterest Income/Operating Revenue Peer Average Private Bank Model Generates Strong Fee Income 19 Nearly Half of Operating Revenue Generat
Slide 20: Our Balanced, Private Banking Loan Portfolio
$532.5 $610.4 $672.8 $813.7 $894.0 $931.2 2014 2015 2016 2017 2018 Q1'19 Our Balanced, Private Banking Loan Portfolio 20 Historical Gross Loans ($millions) Q1 2019 Loan Portfolio by Collateral Type (1) Lending Strategy (1) As of March 31, 2019, excluding deferred costs, net .. Grew gross loans at 16
Slide 21: 10 Quarters of No Net Charge-offs
1.12 0.98 0.96 0.90 0.83 0.82 2014 2015 2016 2017 2018 Q1'19 0.07 0.19 0.07 0.00 0.00 0.00 2014 2015 2016 2017 2018 Q1'19 2.03 1.19 0.54 0.52 2.13 2.01 2014 2015 2016 2017 2018 Q1'19 2.04 1.20 0.70 0.50 1.82 1.69 2014 2015 2016 2017 2018 Q1'19 10 Quarters of No Net Charge-offs NPAs / Assets (%) NPLs
Slide 22: A Balanced, Growing Core Deposit Base
$588.8 $709.9 $753.9 $816.1 $937.8 $978.1 2014 2015 2016 2017 2018 Q1'19 A Balanced, Growing Core Deposit Base 22 Historical Total Deposits ($millions) Q1 2019 Deposit Composition(1) Deposit Strategy (1) As of March 31, 2019. .. Cross-sell additional products and services to depositors .. Relationsh
Slide 23: Revenue Growth Exceeding Expense Growth
$43.5 $45.6 $49.8 $49.5 $50.2 $12.6 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 March 31, 2019 $43.7 $49.7 $54.3 $55.2 $57.8 $14.9 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 March 31, 2019 Revenue Growth Exc
Slide 24: MYFW's Embedded Earnings Growth Drivers
24 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
Slide 25: Progress Report on Earnings Drivers
Progress Report on Earnings Drivers 25 Earnings Driver Progress Report Lower capital costs • 2019 is first full year with no preferred stock dividend payment Increased loan growth • Annualized loan growth: 17.1% in 4Q18 and 16.7% in 1Q19 • Growth coming in all portfolios except commercial real estat
Slide 26: Outlook
Outlook 26 .. Business development platform expected to continue to gain traction and drive further increases in gross revenue .. Second half of 2019 expected to be stronger than first half .. Loan production continues to be well diversified .. Lower mortgage rates and seasonal factors driving incre
Slide 27: 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 27
Slide 28: Appendix
Ww Figstwestern Appendix
Slide 29: Holistic, Integrated Risk Management
Holistic, Integrated Risk Management 29 Purpose .. Holistic approach for the oversight, control, and discipline to drive continuous improvement .. Everyone’s responsibility and non-compliance is not an option .. Governance framework for the process of anticipating, identifying, assessing, managing a
Slide 30: Key Themes of ERM
Key Themes of ERM– In the Business 30 Ensure Compliance .. Meet regulatory requirements .. Comply with good industry practices .. Effective, efficient, and smart compliance – a change agent for better business decisions Limit Potential Losses Improve Profitability Support Growth Risk Overlay for Dec
Slide 31: Non-GAAP Reconciliation
31 Non-GAAP Reconciliation Consolidated Pre-tax, Pre-provision Income For the Three Months Ended, (Dollars in thousands) March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 March 31, 2019(1) Net Income, as reported $1,186 $1,048 $1,689 $1,724 $1,627 Provision for loan losses (187) -- 1
Slide 32: Non-GAAP Reconciliation: Consolidated Gross Revenue
32 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
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