UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 24, 2019
FIRST WESTERN FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
|
Colorado |
001-38595 |
37-1442266 |
|
(State or other jurisdiction of |
(Commission |
(I.R.S. Employer |
|
incorporation or organization) |
File Number) |
Identification No.) |
|
|
|
|
|
1900 16th Street, Suite 1200 |
|
|
|
Denver, Colorado |
|
80202 |
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (303) 531-8100
Former name or former address, if changed since last report: Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☒ Emerging growth company
☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On January 24, 2019, First Western Financial, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2018. A copy of the press release is furnished as Exhibit 99.1 and is incorporated by reference herein.
The information in this Item 2.02, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.
Item 7.01Regulation FD Disclosure.
The Company intends to hold an investor call and webcast to discuss its financial results for the fourth quarter ended December 31, 2018 on Friday, January 25, 2019, at 10:00 a.m. Mountain Time. The Company’s presentation to analysts and investors contains additional information about the Company’s financial results for the fourth quarter ended December 31, 2018 and is furnished as Exhibit 99.2 and is incorporated by reference herein.
The information in this Item 7.01, including Exhibit 99.2, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit |
|
Description |
|
99.1
99.2 |
|
Press Release issued by First Western Financial, Inc. dated January 24, 2019
First Western Financial, Inc. Investor Presentation
|
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
FIRST WESTERN FINANCIAL, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
Date: January 24, 2019 |
|
By: /s/ Scott C. Wylie |
|
|
|
|
Scott C. Wylie |
|
|
|
|
|
|
|
|
|
Chairman, Chief Executive Officer and President |
3
Exhibit 99.1
First Western Reports Fourth Quarter 2018 Financial Results
Fourth Quarter 2018 Summary
|
· |
Net income available to common shareholders of $1.7 million in Q4 2018, compared to net loss available to common shareholders of $0.5 million in Q4 2017 |
|
· |
Diluted EPS of $0.22 in Q4 2018, compared to $0.19 in Q3 2018, and ($0.09) in Q4 2017 |
|
· |
Gross loans, excluding loans held for sale, of $894.0 million, a 17.1% annualized increase from Q3 2018 and a 9.9% increase from Q4 2017 |
|
· |
Total deposits of $937.8 million, a 26.9% annualized increase from Q3 2018 and a 14.9% increase from Q4 2017 |
|
· |
Efficiency ratio of 80.6%, an improvement from 83.0% in Q3 2018, and 86.5% in Q4 2017 |
Denver, Colo., January 24, 2019 – First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), a financial services holding company, today reported financial results for the fourth quarter ended December 31, 2018.
For the fourth quarter of 2018, net income available to common shareholders was $1.7 million, or $0.22 per diluted share. This compares to $1.4 million, or $0.19 per diluted share, for the third quarter of 2018, which included $0.3 million of preferred stock dividends, and a loss of $0.5 million, or ($0.09) per share, for the fourth quarter of 2017, which included $0.6 million of preferred stock dividends. The preferred stock was redeemed in the third quarter of 2018.
“We executed well in the fourth quarter and continued to deliver a higher level of earnings for our shareholders,” said Scott C. Wylie, CEO of First Western. “We saw positive trends in most areas of the company including strong balance sheet growth, improved operating efficiencies and continued strong credit quality. The investments we have made in our business development platform are gaining traction, as we generated 17% annualized growth in total loans and 27% annualized growth in total deposits. We believe we are well positioned to continue our positive momentum, capitalize on the disruption caused by recent bank consolidation in the Colorado market to add new clients and banking talent, and expand our team in the Arizona market. As we continue to add scale and realize additional operating leverage, we expect to deliver another year of strong earnings growth in 2019 and further enhance the value of our franchise.”
|
|
|
For the Three Months Ended |
|
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
(Dollars in thousands, except per share data) |
|
2018 |
|
2018 |
|
2017 |
|
|||
|
Earnings Summary |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
7,899 |
|
$ |
7,788 |
|
$ |
7,270 |
|
|
Less: Provision (Recovery of) for credit losses |
|
|
349 |
|
|
18 |
|
|
(4) |
|
|
Total non-interest income |
|
|
6,351 |
|
|
6,638 |
|
|
8,429 |
|
|
Total non-interest expense |
|
|
11,649 |
|
|
12,176 |
|
|
13,810 |
|
|
Income before income taxes |
|
|
2,252 |
|
|
2,232 |
|
|
1,893 |
|
|
Income tax expense |
|
|
528 |
|
|
543 |
|
|
1,848 |
|
|
Net income |
|
|
1,724 |
|
|
1,689 |
|
|
45 |
|
|
Preferred stock dividends |
|
|
— |
|
|
(255) |
|
|
(560) |
|
|
Net income (loss) available to common shareholders |
|
$ |
1,724 |
|
$ |
1,434 |
|
$ |
(515) |
|
|
Basic and diluted earnings per common share |
|
$ |
0.22 |
|
$ |
0.19 |
|
$ |
(0.09) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
0.66 |
% |
|
0.65 |
% |
|
0.02 |
% |
|
Return on average shareholders' equity |
|
|
5.98 |
% |
|
5.10 |
% |
|
(2.01) |
% |
|
Return on tangible common equity(1) |
|
|
7.52 |
% |
|
6.46 |
% |
|
(4.05) |
% |
|
Net interest margin |
|
|
3.29 |
% |
|
3.29 |
% |
|
3.30 |
% |
|
Efficiency ratio(1) |
|
|
80.60 |
% |
|
82.96 |
% |
|
86.50 |
% |
|
(1) |
Represents a Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure. |
Operating Results for the Fourth Quarter 2018
Revenue
Gross revenue (total income before non-interest expense, less gains on securities sold, plus provision for credit losses) was $14.3 million for the fourth quarter 2018, compared to $14.4 million for the third quarter 2018. The decline in revenue was primarily driven by a $0.3 million decrease in non-interest income, due in part to a decline in mortgage activity.
Relative to the fourth quarter of 2017, gross revenue decreased $1.5 million from $15.7 million. The decrease was attributable to a $2.1 million decline in non-interest income, which included a legal settlement of $0.8 million in 2017, and partially offset by a $0.6 million increase in net interest income.
Net Interest Income
Net interest income for the fourth quarter of 2018 was $7.9 million, an annualized increase of 5.7%. The increase in net interest income from the third quarter was primarily attributable to higher average loan balances.
Relative to the fourth quarter of 2017, net interest income increased 8.7% from $7.3 million. The increase in net interest income from the fourth quarter of 2017 was primarily driven by higher average loan balances.
Net Interest Margin
Net interest margin for the fourth quarter of 2018 was 3.29%, unchanged from the third quarter of 2018. An 11 basis point increase in the average yield on interest earning assets, from 4.20% to 4.31%, was offset by a 13 basis point increase in the average cost of funds, from 0.93% to 1.06%.
2
Relative to the fourth quarter of 2017, the net interest margin decreased slightly from 3.30%. A 32 basis point increase in the average yield on interest earning assets was offset by a 36 basis point increase in the average cost of funds.
Non-interest Income
Non-interest income for the fourth quarter of 2018 was $6.4 million, a decrease of 4.3% from $6.6 million in the third quarter of 2018. The decrease was primarily attributable to lower net gains on mortgage loans sold as a result of a lower volume of mortgages sold in the quarter. This was partially offset by a $0.1 million increase in risk management and insurance fees.
Non-interest income decreased 24.7% from $8.4 million in the fourth quarter of 2017, primarily as a result of a gain on legal settlement and higher mortgage and insurance revenues recorded in the prior period.
Non-interest Expense
Non-interest expense for the fourth quarter of 2018 was $11.6 million, a decrease of 4.3% from $12.2 million for the third quarter of 2018. The decrease was primarily attributable to lower compensation expense resulting from a decrease in incentive accruals.
Non-interest expense decreased 15.6% from $13.8 million in the fourth quarter of 2017, primarily due to lower salary and employee benefits expense as a result of streamlining the cost structure in certain areas of the Company and a decrease in accrued incentive compensation.
The Company’s efficiency ratio was 80.6% in the fourth quarter of 2018, compared with 83.0% in the third quarter of 2018 and 86.5% in the fourth quarter of 2017.
Income Taxes
The Company recorded income tax expense of $0.5 million for the fourth quarter of 2018, representing an effective tax rate of 23.4%, compared to 24.3% for the third quarter of 2018.
Loan Portfolio
Gross loans, excluding mortgage loans held for sale, totaled $894.0 million at December 31, 2018, compared to $857.3 million at September 30, 2018 and $813.7 million at December 31, 2017. The increase in gross loans from September 30, 2018 was attributable to growth in the 1-4 family residential, commercial real estate, and commercial and industrial portfolios.
Deposits
Total deposits were $937.8 million at December 31, 2018, compared to $878.6 million at September 30, 2018, and $816.1 million at December 31, 2017. The increase in total deposits from September 30, 2018 was due to an increase in money market and time deposits.
3
Assets Under Management
Total assets under management decreased by $391.0 million during the fourth quarter to $5.24 billion at December 31, 2018, compared to $5.63 billion at September 30, 2018, and $5.37 billion at December 31, 2017. The decline was attributed to market volatility resulting in a reduction of $403.8 million which was partially off-set by net client inflows in Q4 2018 of $12.8 million. New accounts added in the fourth quarter of 2018 contributed $158.0 million in new assets, an increase of $62.2 million compared to $95.8 million in new assets added in the third quarter of 2018.
Credit Quality
Non-performing assets totaled $19.7 million, or 1.82% of total assets, at December 31, 2018, an increase from $19.0 million, or 1.81% of total assets, at September 30, 2018. The increase in non-performing assets was primarily related to the addition of a TDR still accruing, partially offset by two credits that are now performing following administrative delays in renewing the credits during the previous quarter.
The Company recorded a provision for loan losses of $0.3 million for the fourth quarter of 2018, primarily attributable to the growth in the loan portfolio.
Capital
At December 31, 2018, First Western (“Consolidated”) and First Western Trust (“Bank”) exceeded the minimum “well capitalized” capital levels required by their respective regulators, as summarized in the following table:
|
|
|
December 31, |
|
|
|
|
2018 |
|
|
Consolidated Capital |
|
|
|
|
Common Equity Tier 1(CET1) to risk-weighted assets |
|
11.35 |
% |
|
Tier 1 capital to risk-weighted assets |
|
11.35 |
% |
|
Total capital to risk-weighted assets |
|
13.06 |
% |
|
Tier 1 capital to average assets |
|
9.28 |
% |
|
|
|
|
|
|
Bank Capital |
|
|
|
|
Common Equity Tier 1(CET1) to risk-weighted assets |
|
10.55 |
% |
|
Tier 1 capital to risk-weighted assets |
|
10.55 |
% |
|
Total capital to risk-weighted assets |
|
11.47 |
% |
|
Tier 1 capital to average assets |
|
8.63 |
% |
4
Conference Call, Webcast and Slide Presentation
The Company will host a conference call and webcast at 10:00 a.m. MT/ 12:00 p.m. ET on Friday, January 25, 2019. The call can be accessed via telephone at 877-405-1628; passcode 1293539. A recorded replay will be accessible through February 1, 2019 by dialing 855-859-2056; passcode 1293539.
A slide presentation relating to the fourth quarter 2018 results will be accessible prior to the scheduled conference call. The slide presentation and webcast of the conference call can be accessed on the Events and Presentations page of the Company’s investor relations website at https://myfw.gcs-web.com.
About First Western Financial Inc.
First Western Financial, Inc. is a financial services holding company headquartered in Denver, Colorado, with operations in Colorado, Arizona, Wyoming and California. First Western and its subsidiaries provide a fully integrated suite of wealth management services on a private trust bank platform, which includes a comprehensive selection of deposit, loan, trust, wealth planning and investment management products and services. First Western’s common stock is traded on the Nasdaq Global Select Market under the symbol “MYFW.” For more information, please visit www.myfw.com.
Non-GAAP Financial Measures
Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures include “Tangible Common Equity,” “Tangible Common Book Value per Share,” “Return on Tangible Common Equity,” “Efficiency Ratio,” and “Gross Revenue.” The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. Reconciliation of non-GAAP financial measures, to GAAP financial measures are provided at the end of this press release.
Forward-Looking Statements
Statements in this news release 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. Forward-looking statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The forward looking statements in this news release are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward looking statements contained in this news release and could cause us to make changes to our future plans. Those risks and uncertainties include, without limitation, the risk of geographic concentration in Colorado, Arizona, Wyoming and California; the risk of changes in the economy affecting real estate values and liquidity; the risk in our ability to continue to originate residential real estate loans and sell such loans; risks specific to commercial loans and borrowers; the risk of claims and litigation pertaining to our fiduciary responsibilities; the risk of competition for investment managers and professionals; the risk of fluctuation in the value of our investment securities; the risk of changes in interest rates; and the risk of the adequacy of our
5
allowance for credit losses and the risk in our ability to maintain a strong core deposit base or other low-cost funding sources. Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in our Prospectus filed with the U.S. Securities and Exchange Commission (“SEC”) dated July 18, 2018 (“Prospectus”), and other documents we file with the SEC from time to time. We urge readers of this news release to review the Risk Factors section of that Prospectus and the Risk Factors section of other documents we file with the SEC from time to time. Also, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release, which speak only as of today’s date, or to make predictions based solely on historical financial performance. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
Contacts:
Financial Profiles, Inc.
Tony Rossi
310-622-8221
Larry Clark
310-622-8223
MYFW@finprofiles.com
IR@myfw.com
6
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
|
|
|
Three Months Ending |
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||
|
(Dollars in thousands, except per share data) |
|
2018 |
|
2018 |
|
2017 |
|||
|
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
9,866 |
|
$ |
9,468 |
|
$ |
8,386 |
|
Investment securities |
|
|
273 |
|
|
266 |
|
|
326 |
|
Federal funds sold and other |
|
|
206 |
|
|
206 |
|
|
90 |
|
Total interest and dividend income |
|
|
10,345 |
|
|
9,940 |
|
|
8,802 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,179 |
|
|
1,761 |
|
|
1,062 |
|
Other borrowed funds |
|
|
267 |
|
|
391 |
|
|
470 |
|
Total interest expense |
|
|
2,446 |
|
|
2,152 |
|
|
1,532 |
|
Net interest income |
|
|
7,899 |
|
|
7,788 |
|
|
7,270 |
|
Less: Provision (Recovery of) for credit losses |
|
|
349 |
|
|
18 |
|
|
(4) |
|
Net interest income, after provision (recovery of) for credit losses |
|
|
7,550 |
|
|
7,770 |
|
|
7,274 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
Trust and investment management fees |
|
|
4,752 |
|
|
4,770 |
|
|
5,057 |
|
Net gain on mortgage loans sold |
|
|
791 |
|
|
1,159 |
|
|
1,247 |
|
Bank fees |
|
|
333 |
|
|
361 |
|
|
502 |
|
Risk management and insurance fees |
|
|
380 |
|
|
249 |
|
|
742 |
|
Income on company-owned life insurance |
|
|
95 |
|
|
99 |
|
|
101 |
|
Net (loss) on sale of securities |
|
|
— |
|
|
— |
|
|
(45) |
|
Gain on legal settlement |
|
|
— |
|
|
— |
|
|
825 |
|
Total non-interest income |
|
|
6,351 |
|
|
6,638 |
|
|
8,429 |
|
Total income before non-interest expense |
|
|
13,901 |
|
|
14,408 |
|
|
15,703 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
6,710 |
|
|
7,221 |
|
|
8,211 |
|
Occupancy and equipment |
|
|
1,414 |
|
|
1,427 |
|
|
1,497 |
|
Professional services |
|
|
814 |
|
|
805 |
|
|
915 |
|
Technology and information systems |
|
|
954 |
|
|
965 |
|
|
1,096 |
|
Data processing |
|
|
659 |
|
|
697 |
|
|
568 |
|
Marketing |
|
|
378 |
|
|
274 |
|
|
420 |
|
Amortization of other intangible assets |
|
|
163 |
|
|
208 |
|
|
230 |
|
Total loss on sales/provision of other real estate owned |
|
|
— |
|
|
— |
|
|
75 |
|
Other |
|
|
557 |
|
|
579 |
|
|
798 |
|
Total non-interest expense |
|
|
11,649 |
|
|
12,176 |
|
|
13,810 |
|
Income before income taxes |
|
|
2,252 |
|
|
2,232 |
|
|
1,893 |
|
Income tax expense |
|
|
528 |
|
|
543 |
|
|
1,848 |
|
Net income |
|
|
1,724 |
|
|
1,689 |
|
|
45 |
|
Preferred stock dividends |
|
|
— |
|
|
(255) |
|
|
(560) |
|
Net income (loss) available to common shareholders |
|
$ |
1,724 |
|
$ |
1,434 |
|
$ |
(515) |
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
0.22 |
|
$ |
0.19 |
|
$ |
(0.09) |
7
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||
|
|
|
2018 |
|
2018 |
|
2017 |
|||
|
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents: |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
1,574 |
|
$ |
1,232 |
|
$ |
1,370 |
|
Interest-bearing deposits in other financial institutions |
|
|
71,783 |
|
|
69,186 |
|
|
8,132 |
|
Total cash and cash equivalents |
|
|
73,357 |
|
|
70,418 |
|
|
9,502 |
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities |
|
|
44,901 |
|
|
45,492 |
|
|
53,650 |
|
Correspondent bank stock, at cost |
|
|
2,488 |
|
|
2,392 |
|
|
1,555 |
|
Mortgage loans held for sale |
|
|
14,832 |
|
|
19,238 |
|
|
22,940 |
|
Loans, net of allowance of $7,451, $7,118, and $7,287 |
|
|
886,515 |
|
|
850,199 |
|
|
806,402 |
|
Promissory notes from related parties |
|
|
— |
|
|
— |
|
|
5,792 |
|
Premises and equipment, net |
|
|
6,100 |
|
|
6,263 |
|
|
6,777 |
|
Accrued interest receivable |
|
|
2,844 |
|
|
2,854 |
|
|
2,421 |
|
Accounts receivable |
|
|
4,492 |
|
|
4,736 |
|
|
5,592 |
|
Other receivables |
|
|
1,391 |
|
|
1,841 |
|
|
6,324 |
|
Other real estate owned, net |
|
|
658 |
|
|
658 |
|
|
658 |
|
Goodwill |
|
|
24,811 |
|
|
24,811 |
|
|
24,811 |
|
Other intangible assets, net |
|
|
402 |
|
|
565 |
|
|
1,233 |
|
Deferred tax assets, net |
|
|
4,306 |
|
|
4,626 |
|
|
5,987 |
|
Company-owned life insurance |
|
|
14,709 |
|
|
14,614 |
|
|
14,316 |
|
Other assets |
|
|
2,518 |
|
|
2,820 |
|
|
1,699 |
|
Total assets |
|
$ |
1,084,324 |
|
$ |
1,051,527 |
|
$ |
969,659 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
202,856 |
|
$ |
219,400 |
|
$ |
198,685 |
|
Interest-bearing |
|
|
734,902 |
|
|
659,239 |
|
|
617,432 |
|
Total deposits |
|
|
937,758 |
|
|
878,639 |
|
|
816,117 |
|
Borrowings: |
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank Topeka borrowings |
|
|
15,000 |
|
|
44,598 |
|
|
28,563 |
|
Subordinated Notes |
|
|
6,560 |
|
|
6,560 |
|
|
13,435 |
|
Accrued interest payable |
|
|
231 |
|
|
211 |
|
|
197 |
|
Other liabilities |
|
|
7,900 |
|
|
7,355 |
|
|
9,501 |
|
Total liabilities |
|
|
967,449 |
|
|
937,363 |
|
|
867,813 |
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
116,875 |
|
|
114,164 |
|
|
101,846 |
|
Total liabilities and shareholders’ equity |
|
$ |
1,084,324 |
|
$ |
1,051,527 |
|
$ |
969,659 |
8
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
|
|
|
As of |
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||
|
(Dollars in thousands) |
|
2018 |
|
2018 |
|
2017 |
|||
|
Loan Portfolio |
|
|
|
|
|
|
|
|
|
|
Cash, Securities and Other |
|
$ |
114,165 |
|
$ |
132,920 |
|
$ |
131,756 |
|
Construction and Development |
|
|
31,897 |
|
|
37,423 |
|
|
24,914 |
|
1 - 4 Family Residential |
|
|
350,852 |
|
|
327,674 |
|
|
282,014 |
|
Non-Owner Occupied CRE |
|
|
173,741 |
|
|
165,670 |
|
|
176,987 |
|
Owner Occupied CRE |
|
|
108,480 |
|
|
94,698 |
|
|
92,742 |
|
Commercial and Industrial |
|
|
113,660 |
|
|
97,772 |
|
|
104,284 |
|
Total loans held for investment |
|
$ |
892,795 |
|
$ |
856,157 |
|
$ |
812,697 |
|
Deferred costs, net |
|
|
1,171 |
|
|
1,160 |
|
|
992 |
|
Gross loans |
|
$ |
893,966 |
|
$ |
857,317 |
|
$ |
813,689 |
|
Total loans held for sale |
|
$ |
14,832 |
|
$ |
19,238 |
|
$ |
22,940 |
|
|
|
|
|
|
|
|
|
|
|
|
Deposit Portfolio |
|
|
|
|
|
|
|
|
|
|
Money market deposit accounts |
|
$ |
489,506 |
|
$ |
444,580 |
|
$ |
331,039 |
|
Time deposits |
|
|
178,743 |
|
|
148,425 |
|
|
210,292 |
|
Negotiable order of withdrawal accounts |
|
|
64,853 |
|
|
64,777 |
|
|
74,300 |
|
Savings accounts |
|
|
1,800 |
|
|
1,457 |
|
|
1,801 |
|
Total interest-bearing deposits |
|
$ |
734,902 |
|
$ |
659,239 |
|
$ |
617,432 |
|
Noninterest-bearing accounts |
|
$ |
202,856 |
|
$ |
219,400 |
|
$ |
198,685 |
|
Total deposits |
|
$ |
937,758 |
|
$ |
878,639 |
|
$ |
816,117 |
9
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
|
|
|
For the Three Months Ended |
|
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
(Dollars in thousands) |
|
2018 |
|
2018 |
|
2017 |
|
|||
|
Average Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
Average Assets |
|
|
|
|
|
|
|
|
|
|
|
Interest-earnings assets: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits in other financial institutions |
|
$ |
36,563 |
|
$ |
41,538 |
|
$ |
32,258 |
|
|
Available-for-sale securities |
|
|
46,219 |
|
|
48,438 |
|
|
61,760 |
|
|
Loans |
|
|
878,145 |
|
|
857,676 |
|
|
782,717 |
|
|
Promissory notes from related parties (1) |
|
|
— |
|
|
— |
|
|
5,781 |
|
|
Interest earning-assets |
|
|
960,927 |
|
|
947,652 |
|
|
882,516 |
|
|
Mortgage loans held-for-sale |
|
|
15,148 |
|
|
22,294 |
|
|
25,316 |
|
|
Total interest earning-assets, plus loans held-for-sale |
|
|
976,075 |
|
|
969,946 |
|
|
907,832 |
|
|
Allowance for loan losses |
|
|
(7,240) |
|
|
(7,141) |
|
|
(7,289) |
|
|
Noninterest-earnings assets |
|
|
68,962 |
|
|
72,922 |
|
|
79,931 |
|
|
Total assets |
|
$ |
1,037,797 |
|
$ |
1,035,727 |
|
$ |
980,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
674,691 |
|
$ |
640,507 |
|
$ |
578,940 |
|
|
Federal Home Loan Bank Topeka borrowings |
|
|
26,959 |
|
|
44,804 |
|
|
55,921 |
|
|
Subordinated notes |
|
|
6,560 |
|
|
8,489 |
|
|
13,435 |
|
|
Total interest-bearing liabilities |
|
$ |
708,210 |
|
$ |
693,800 |
|
$ |
648,296 |
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
205,059 |
|
|
221,411 |
|
|
222,361 |
|
|
Other liabilities |
|
|
9,214 |
|
|
8,132 |
|
|
7,197 |
|
|
Total noninterest-bearing liabilities |
|
$ |
214,273 |
|
$ |
229,543 |
|
$ |
229,558 |
|
|
Shareholders’ equity |
|
$ |
115,314 |
|
$ |
112,384 |
|
$ |
102,620 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
1,037,797 |
|
$ |
1,035,727 |
|
$ |
980,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yields (annualized) |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits in other financial institutions |
|
|
2.25 |
% |
|
1.98 |
% |
|
1.12 |
% |
|
Available-for-sale securities |
|
|
2.36 |
% |
|
2.20 |
% |
|
2.11 |
% |
|
Loans |
|
|
4.49 |
% |
|
4.42 |
% |
|
4.25 |
% |
|
Promissory notes from related parties |
|
|
— |
% |
|
— |
% |
|
4.91 |
% |
|
Interest earning-assets |
|
|
4.31 |
% |
|
4.20 |
% |
|
3.99 |
% |
|
Mortgage loans held-for-sale |
|
|
4.33 |
% |
|
4.36 |
% |
|
4.01 |
% |
|
Total interest earning-assets, plus loans held-for-sale |
|
|
4.31 |
% |
|
4.20 |
% |
|
3.99 |
% |
|
Interest-bearing deposits |
|
|
1.29 |
% |
|
1.10 |
% |
|
0.73 |
% |
|
Federal Home Loan Bank Topeka borrowings |
|
|
2.20 |
% |
|
2.05 |
% |
|
1.52 |
% |
|
Subordinated notes |
|
|
7.26 |
% |
|
7.59 |
% |
|
7.65 |
% |
|
Total interest-bearing liabilities |
|
|
1.38 |
% |
|
1.24 |
% |
|
0.95 |
% |
|
Net interest margin |
|
|
3.29 |
% |
|
3.29 |
% |
|
3.30 |
% |
|
Interest rate spread |
|
|
2.93 |
% |
|
2.96 |
% |
|
3.04 |
% |
|
(1) |
Promissory notes from related parties were reclassed to loans as of September 30, 2018 due to change in composition of related parties. |
10
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
|
|
|
As of and for the Three Months Ended |
|
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
(Dollars in thousands, except per share data) |
|
2018 |
|
2018 |
|
2017 |
|
|||
|
Asset Quality |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
$ |
19,052 |
|
$ |
18,388 |
|
$ |
4,223 |
|
|
Nonperforming assets |
|
|
19,710 |
|
|
19,046 |
|
|
4,881 |
|
|
Net charge-offs (recoveries) |
|
|
16 |
|
|
— |
|
|
(2) |
|
|
Nonperforming loans to total loans |
|
|
2.13 |
% |
|
2.14 |
% |
|
0.52 |
% |
|
Nonperforming assets to total assets |
|
|
1.82 |
% |
|
1.81 |
% |
|
0.50 |
% |
|
Allowance for loan losses to nonperforming loans |
|
|
39.11 |
% |
|
38.71 |
% |
|
172.55 |
% |
|
Allowance for loan losses to total loans |
|
|
0.83 |
% |
|
0.83 |
% |
|
0.90 |
% |
|
Net charge-offs to average loans |
|
|
— |
% |
|
— |
% |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets under management |
|
$ |
5,235,177 |
|
$ |
5,626,163 |
|
$ |
5,374,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Data |
|
|
|
|
|
|
|
|
|
|
|
Book value per share at period end |
|
$ |
14.67 |
|
$ |
14.33 |
|
$ |
13.18 |
|
|
Tangible book value per common share(1) |
|
$ |
11.50 |
|
$ |
11.14 |
|
$ |
8.71 |
|
|
Shares outstanding at period end |
|
|
7,968,420 |
|
|
7,968,420 |
|
|
5,833,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Capital |
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1(CET1) to risk-weighted assets |
|
|
11.35 |
% |
|
11.22 |
% |
|
6.56 |
% |
|
Tier 1 capital to risk-weighted assets |
|
|
11.35 |
% |
|
11.22 |
% |
|
8.79 |
% |
|
Total capital to risk-weighted assets |
|
|
13.06 |
% |
|
12.90 |
% |
|
11.70 |
% |
|
Tier 1 capital to average assets |
|
|
9.28 |
% |
|
9.09 |
% |
|
7.41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Capital |
|
|
|
|
|
|
|
|
|
|
|
Common Equity Tier 1(CET1) to risk-weighted assets |
|
|
10.55 |
% |
|
10.42 |
% |
|
9.81 |
% |
|
Tier 1 capital to risk-weighted assets |
|
|
10.55 |
% |
|
10.42 |
% |
|
9.81 |
% |
|
Total capital to risk-weighted assets |
|
|
11.47 |
% |
|
11.31 |
% |
|
10.75 |
% |
|
Tier 1 capital to average assets |
|
|
8.63 |
% |
|
8.45 |
% |
|
8.27 |
% |
|
(1) |
Represents a Non-GAAP financial measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure. |
11
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
Reconciliations of Non-GAAP Financial Measures
|
|
|
As of and for the Three Months Ended |
|
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
(Dollars in thousands, except share and per share data) |
|
2018 |
|
2018 |
|
2017 |
|
|||
|
Tangible common |
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
$ |
116,875 |
|
$ |
114,164 |
|
$ |
101,846 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Preferred stock (liquidation preference) |
|
|
— |
|
|
— |
|
|
24,968 |
|
|
Goodwill |
|
|
24,811 |
|
|
24,811 |
|
|
24,811 |
|
|
Other intangibles, net |
|
|
402 |
|
|
565 |
|
|
1,233 |
|
|
Tangible common equity |
|
$ |
91,662 |
|
$ |
88,788 |
|
$ |
50,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding, end of period |
|
|
7,968,420 |
|
|
7,968,420 |
|
|
5,833,456 |
|
|
Tangible common book value per share |
|
$ |
11.50 |
|
$ |
11.14 |
|
$ |
8.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as reported |
|
$ |
1,724 |
|
$ |
1,689 |
|
$ |
45 |
|
|
Less: Preferred stock dividends |
|
|
— |
|
|
255 |
|
|
560 |
|
|
Income available to common shareholders |
|
$ |
1,724 |
|
$ |
1,434 |
|
$ |
(515) |
|
|
Return on tangible common equity |
|
|
7.52 |
% |
|
6.46 |
% |
|
(4.05) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency |
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
$ |
11,649 |
|
$ |
12,176 |
|
$ |
13,810 |
|
|
Less: Amortization |
|
|
163 |
|
|
208 |
|
|
230 |
|
|
Adjusted non-interest expense |
|
$ |
11,486 |
|
$ |
11,968 |
|
$ |
13,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
7,899 |
|
$ |
7,788 |
|
$ |
7,270 |
|
|
Non-interest income |
|
|
6,351 |
|
|
6,638 |
|
|
8,429 |
|
|
Total income |
|
$ |
14,250 |
|
$ |
14,426 |
|
$ |
15,699 |
|
|
Efficiency ratio |
|
|
80.60 |
% |
|
82.96 |
% |
|
86.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income before non-interest expense |
|
$ |
13,901 |
|
$ |
14,408 |
|
$ |
15,703 |
|
|
Less: Net gain (loss) on sale of securities |
|
|
— |
|
|
— |
|
|
(45) |
|
|
Plus: Provision (Recovery of) for credit losses |
|
|
349 |
|
|
18 |
|
|
(4) |
|
|
Gross revenue |
|
$ |
14,250 |
|
$ |
14,426 |
|
$ |
15,744 |
|
12
Exhibit 99.2
| First Western Financial, Inc. The First, Western-Based Private Trust Bank Fourth Quarter 2018 Financial Results |
| 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, Inc.’s (“First Western”) management with respect to, among other things, future events and First Western’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “future” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about First Western’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond First Western’s control. Accordingly, First Western cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although First Western believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. All subsequent written and oral forward-looking statements attributable to First Western or persons acting on First Western’s behalf are expressly qualified in their entirety by this paragraph. Forward-looking statements speak only as of the date of this presentation. First Western undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise (except as required by law). Certain of the information contained herein may be derived from information provided by industry sources. The Company believes that such information is accurate and the sources from which it has been obtained are reliable; however, the Company cannot guaranty the accuracy of such information and has not independently verified such information. This presentation contains certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of this presentation. Numbers in the presentation may not sum due to rounding. |
| 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 .. Continued strong credit quality Key Operating Trends .. Reduced non-interest expense 4.3% from prior quarter .. Improved efficiency ratio(1) to 80.6% from 83.0% in prior quarter 3(1) See Non-GAAP reconciliation .. Earned net income available to common shareholders of $1.7 million, or $0.22 per diluted share .. Increased EPS 15.8% from prior quarter |
| $(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 available to common shareholders increased 20.2% from prior quarter .. Earnings per share increased 15.8% from prior quarter Earnings (loss) per Share (in thousands) ($515) $625 $486 $1,434 $1,724 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 |
| $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 with increases in residential mortgage, C&I and CRE portfolios .. Elevated payoffs continue to present headwind (in thousands, as of quarter-end) Total Loans (in millions) (1) Excludes deferred costs, net 4Q 2017 3Q 2018 4Q 2018 Cash, Securities and Other $131,756 $132,920 $114,165 Construction and Development 24,914 37,423 31,897 1 - 4 Family Residential 282,014 327,674 350,852 Non-Owner Occupied CRE 176,987 165,670 173,741 Owner Occupied CRE 92,742 94,698 108,480 Commercial and Industrial 104,284 97,772 113,660 Gross Loans $812,697 $856,157 $892,795 Mortgage loans held for sale 22,940 19,238 14,832 Total Loans $835,637 $875,395 $907,627 |
| $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 driving growth 4Q 2017 3Q 2018 4Q 2018 Money market deposit accounts $331,039 $444,580 $489,506 Time deposits 210,292 148,425 178,743 NOW 74,300 64,777 64,853 Savings accounts 1,801 1,457 1,800 Noninterest-bearing Accounts 198,685 219,400 202,856 Total Deposits $816,117 $878,639 $937,758 (in thousands, as of quarter-end) Total Deposits (in millions) |
| 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 during the quarter .. New accounts contributed $158.0 million in new assets in Q4 2018 $5,374 $5,358 $5,416 $5,626 $5,235 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Investment Agency Managed Trust 401(k)/Retirement Directed Trust Custody (in millions, as of quarter-end) 7 |
| Non-interest Income $6.4 MillionNet Interest Income $7.9 Million 55.4% 44.6% Gross Revenue 8(1) See Non-GAAP reconciliation Q4 2018 Gross Revenue(1) .. Gross revenue stable with prior quarter .. Balance sheet growth drove an 8.7% NII improvement year over year .. Growth in wealth management segment offset by other segment declines .. Gross revenue impacted by decline in residential mortgage production Gross Revenue(1) ($millions) $15.7 $14.7 $14.5 $14.4 $14.3 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Wealth Management Capital Management Mortgage |
| 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 deposits impacting deposit costs Net Interest Margin 3.30% 3.25% 3.29% 3.29% 3.29% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 $7,270 $7,360 $7,577 $7,788 $7,899 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (in thousands) |
| 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 2018 Q2 2018 Q3 2018 Q4 2018 Trust and Investment Management Fees Net Gain on Mortgage Loans Sold Bank Fees Risk Management and Insurance Fees Income on Company-Owned Life Insurance Net Gain on Sale of Securities Other (in thousands)(in thousands) $5,057 $4,954 $4,689 $4,770 $4,752 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 |
| 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) 86.5% 89.1% 88.8% 83.0% 80.6% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 $13,810 $13,286 $13,084 $12,176 $11,649 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (in thousands) (1) See Non-GAAP reconciliation |
| 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 Q4 2018 0.50% 0.41% 0.35% 1.81% 1.82% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 |
| 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 Improved operating leverage • 2018 expense reductions eliminated redundancies • Lower expense driving improved efficiency ratio Some profit centers gaining scale FY 2018 total revenue increases for some profit centers • Aspen: +53% • Denver: +42% • Scottsdale: +41% • Cherry Creek: +24% • Jackson Hole: +20% |
| 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 mortgage team in the Arizona market .. Continued improvement in operating efficiencies .. Adding new client relationships and expanding existing with ConnectView® .. Opportunities to add clients and experienced talent resulting from consolidation in Colorado banking market |
| Appendix |
| 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 non-interest expense $13,580 $13,056 $12,854 $11,968 $11,486 Net interest income $7,270 $7,360 $7,577 $7,788 $7,899 Non-interest income 8,429 7,292 6,892 6,638 6,351 Total Income $15,699 $14,652 $14,469 $14,426 $14,250 Efficiency ratio 86.5% 89.1% 88.8% 83.0% 80.6% |
| 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 sale of securities (45) ---- Plus: Provision (Recovery of) for credit loss (4) (187) - 18 349 Gross Revenue $13,443 $12,524 $12,257 $12,401 $12,638 Capital 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 $1,035 $861 $845 $850 $794 Less: Net gain (loss) on sale of securities ----- Plus: Provision (Recovery of) for credit loss ----- Gross Revenue $1,035 $861 $845 $850 $794 Mortgage 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 $1,266 $1,267 $1,367 $1,175 $818 Less: Net gain (loss) on sale of securities ----- Plus: Provision (Recovery of) for credit loss ----- Gross Revenue $1,266 $1,267 $1,367 $1,175 $818 Consolidated 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 $15,703 $14,839 $14,469 $14,408 $13,901 Less: Net gain (loss) on sale of securities (45) ---- Plus: Provision (Recovery of) for credit loss (4) (187) - 18 349 Gross Revenue $15,744 $14,652 $14,469 $14,426 $14,250 |
