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 23, 2020
FIRST WESTERN FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
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Colorado |
001-38595 |
37-1442266 |
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(State or other jurisdiction of |
(Commission |
(I.R.S. Employer |
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incorporation or organization) |
File Number) |
Identification No.) |
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1900 16th Street, Suite 1200 |
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Denver, Colorado |
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80202 |
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(Address of principal executive offices) |
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(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.
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol |
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Name of each exchange on which registered |
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Common Stock, no par value |
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MYFW |
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The Nasdaq Stock Market LLC |
Item 2.02 Results of Operations and Financial Condition.
On January 23, 2020, First Western Financial, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 2019. 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, 2019 on Friday, January 24, 2020, 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, 2019 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.
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Exhibit |
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Description |
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99.1
99.2 |
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Press Release issued by First Western Financial, Inc. dated January 23, 2020
First Western Financial, Inc. Earnings Presentation
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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.
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FIRST WESTERN FINANCIAL, INC. |
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Date: January 23, 2020 |
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By: /s/ Scott C. Wylie |
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Scott C. Wylie |
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Chairman, Chief Executive Officer and President |
3
Exhibit 99.1
First Western Reports Fourth Quarter 2019 Financial Results
Fourth Quarter 2019 Summary
Net income available to common shareholders of $2.6 million in Q4 2019, compared to $2.4 million in Q3 2019 and $1.7 million in Q4 2018
Diluted EPS of $0.32 in Q4 2019, compared to $0.30 in Q3 2019 and $0.22 in Q4 2018
•Net income for Q4 2019 increased 49.2% and Diluted EPS increased 45.5%
•Average total loans increased $125.0 million from Q4 2018, or 14.0%, to $1.02 billion
Gross loans of $998.0 million, an annualized increase of 30.8% from Q3 2019 and an increase of 11.6% from December 31, 2018
Average deposits increased $50.2 million, an annualized increase of 19.3% from Q3 2019 and an increase of 24.2% from Q4 2018
Total assets under management were $6.19 billion at December 31, 2019, an annualized increase of 4.7% from Q3 2019 and an increase of 18.2% from December 31, 2018
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· |
43,116 shares of MYFW common stock repurchased in Q4 2019 |
Denver, Colo., January 23, 2020 – First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the fourth quarter ended December 31, 2019.
Net income available to common shareholders was $2.6 million, or $0.32 per diluted share, for the fourth quarter of 2019. This compares to $2.4 million, or $0.30 per diluted share, for the third quarter of 2019, and $1.7 million, or $0.22 per diluted share, for the fourth quarter of 2018.
“We delivered another strong quarter highlighted by a record level of loan production,” said Scott C. Wylie, CEO of First Western. “During the fourth quarter, we originated $146.1 million in loans with significant contributions across all of our major lending areas. Economic conditions in our markets remain very healthy, presenting good opportunities to continue building our roster of high net worth clientele, growing our assets under management, and adding high-quality loans to our portfolio. We anticipate another year of solid organic balance sheet growth in 2020 we believe that will result in further revenue growth and improved operating leverage.”
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For the Three Months Ended |
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December 31, |
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September 30, |
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December 31, |
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(Dollars in thousands, except per share data) |
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2019 |
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2019 |
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2018 |
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Earnings Summary |
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Net interest income |
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$ |
8,190 |
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$ |
7,940 |
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$ |
7,899 |
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Less: provision for credit losses |
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447 |
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100 |
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349 |
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Total non-interest income |
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8,228 |
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8,788 |
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6,351 |
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Total non-interest expense |
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13,082 |
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13,442 |
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11,649 |
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Income before income taxes |
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2,889 |
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3,186 |
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2,252 |
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Income tax expense |
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317 |
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780 |
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528 |
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Net income available to common shareholders |
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2,572 |
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2,406 |
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1,724 |
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Basic earnings per common share |
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0.33 |
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0.30 |
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0.22 |
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Diluted earnings per common share |
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$ |
0.32 |
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$ |
0.30 |
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$ |
0.22 |
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Return on average assets (annualized) |
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0.82 |
% |
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0.80 |
% |
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0.66 |
% |
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Return on average shareholders' equity (annualized) |
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8.06 |
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7.74 |
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5.98 |
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Return on tangible common equity (annualized)(1) |
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9.85 |
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9.39 |
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7.52 |
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Net interest margin |
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2.91 |
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2.95 |
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3.29 |
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Efficiency ratio(1) |
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80.54 |
% |
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80.62 |
% |
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80.60 |
% |
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(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 2019
Revenue
Gross revenue (total income before non-interest expense, less net gains on sales of securities and assets, plus provision for credit losses) was $16.2 million for the fourth quarter of 2019, compared to $16.6 million for the third quarter of 2019. The decrease in revenue was primarily attributable to a lower net gain on mortgage loans sold resulting from seasonally slower fourth quarter mortgage activity.
Relative to the fourth quarter of 2018, gross revenue increased $2.0 million from $14.3 million. The increase was primarily due to growth in net interest income and net gain on mortgage loans sold resulting from increased mortgage activity and improvement in operational efficiencies within the Mortgage segment.
Net Interest Income
Net interest income for the fourth quarter of 2019 was $8.2 million, an increase of 3.1% from $7.9 million in the third quarter of 2019. The increase in net interest income was primarily attributable to a reduction in interest expense resulting from a 19 basis point decline in the cost of funds.
Relative to the fourth quarter of 2018, net interest income increased 3.7% from $7.9 million. The year-over-year increase in net interest income was due primarily to growth in average loans, offset by a decline in net interest margin.
Net Interest Margin
Net interest margin for the fourth quarter of 2019 decreased to 2.91% from 2.95% in the third quarter of 2019. The decrease was primarily driven by a 23 basis point decline in the yield on earning assets, partially offset by a 19 basis point decline in the cost of funds.
2
Relative to the fourth quarter of 2018, the net interest margin decreased from 3.29%, primarily due to a 28 basis point decline in the yield on earning assets, combined with a 7 basis point increase in the cost of funds.
Non-interest Income
Non-interest income for the fourth quarter of 2019 was $8.2 million, a decrease of 6.4% from $8.8 million in the third quarter of 2019. The decrease was primarily due to a lower net gain on mortgage loans sold resulting from seasonally slower fourth quarter mortgage activity.
Relative to the fourth quarter of 2018, non-interest income increased 29.6% from $6.4 million. The increase was primarily attributable to higher net gains on mortgage loans sold as a result of a higher volume of mortgages sold in the fourth quarter of 2019.
Non-interest Expense
Non-interest expense for the fourth quarter of 2019 was $13.1 million, a decrease of 2.7% from $13.4 million for the third quarter of 2019. The decrease was primarily attributable to a decline in equity compensation expenses correlating with the decline in mortgage earnings.
Non-interest expense increased 12.3% from $11.6 million in the fourth quarter of 2018. The increase was primarily due to higher salaries and employee benefits expense reflecting the growth of the organization over the past year and improved performance.
The Company’s efficiency ratio was 80.5% in the fourth quarter of 2019, which is relativity unchanged from the third quarter of 2019 and fourth quarter of 2018. The efficiency ratio remained reasonably flat during the third and fourth quarter of 2019 as a result of various acquisition and disposition related expenses.
Income Taxes
The Company recorded income tax expense of $0.3 million for the fourth quarter of 2019, representing an effective tax rate of 11.0%, compared to 24.5% for the third quarter of 2019. The decline in the effective tax rate was primarily attributable to tax-planning strategies driven by the impact of research and development tax credits.
Loan Portfolio
Total gross loans including mortgage loans held for sale were $1.05 billion at December 31, 2019, an increase of $50.5 million from the end of the prior quarter, and an increase of $137.5 million from December 31, 2018.
Gross loans, excluding mortgage loans held for sale, totaled $998.0 million at December 31, 2019, an increase of 30.8% annualized from $926.6 million at September 30, 2019, and an increase of 11.6% from $894.0 million at December 31, 2018. The increase in gross loans from September 30, 2019 was primarily due to growth in the 1-4 family residential, commercial and industrial, and commercial real estate portfolios.
Deposits
Total deposits were $1.09 billion at December 31, 2019, compared to $1.11 billion at September 30, 2019, and $937.8 million at December 31, 2018. The decrease in total deposits from September 30, 2019 was due to the intentional run-off of higher-cost time deposits following strong growth in core deposits experienced earlier in 2019.
3
Average total deposits for the fourth quarter of 2019 increased $50.2 million, or 19.3% annualized, from the third quarter of 2019 and increased $212.7 million, or 24.2%, from the fourth quarter of 2018.
Assets Under Management
Total assets under management increased by $71.2 million during the fourth quarter to $6.19 billion at December 31, 2019, compared to $6.12 billion at September 30, 2019, and $5.24 billion at December 31, 2018. The increase was primarily attributable to market gains, additionally $79.8 million in new assets and $87.3 million in contributions were added in Q4 2019.
Credit Quality
Non-performing assets totaled $12.9 million, or 1.03% of total assets, at December 31, 2019, a decline from $14.6 million, or 1.15% of total assets, at September 30, 2019 due primarily to paydowns on non-performing loans.
The Company recorded a provision for loan losses of $0.4 million in the fourth quarter of 2019, primarily reflecting the strong growth in the loan portfolio.
Capital
At December 31, 2019, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. At December 31, 2019, the Bank was classified as “well capitalized,” as summarized in the following table:
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December 31, |
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2019 |
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Consolidated Capital |
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Tier 1 capital to risk-weighted assets |
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11.33 |
% |
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Common Equity Tier 1(1) (CET1) to risk-weighted assets |
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11.33 |
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Total capital to risk-weighted assets |
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12.89 |
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Tier 1 capital to average assets |
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8.58 |
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Bank Capital |
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Tier 1 capital to risk-weighted assets |
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10.69 |
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Common Equity Tier 1(1) (CET1) to risk-weighted assets |
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10.69 |
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Total capital to risk-weighted assets |
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11.55 |
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Tier 1 capital to average assets |
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8.09 |
% |
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(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. |
Tangible book value per common share increased 2.5% to $13.15 at December 31, 2019, from $12.83 at September 30, 2019.
During the fourth quarter of 2019, the Company repurchased 43,116 shares of its common stock at an average price of $16.61 under its stock repurchase program, which authorized the repurchase of up to 300,000 shares of its common stock. As of December 31, 2019, the Company had up to 256,302 shares remaining under the current stock repurchase authorization.
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 24, 2020. The call can be accessed via telephone at 877-405-1628; passcode 4991799. A recorded replay will be accessible through January 31, 2020 by dialing 855-859-2056; passcode 4991799.
A slide presentation relating to the fourth quarter 2019 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
First Western 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,” “opportunity,” “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
5
adequacy of our 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 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 21, 2019 (“Form 10-K”), 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 our Form 10-K and any updates to those risk factors set forth in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our other filings with the SEC. 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
MYFW@finprofiles.com
IR@myfw.com
6
First Western Financial, Inc.
Consolidated Financial Summary (unaudited)
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Three Months Ending |
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December 31, |
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September 30, |
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December 31, |
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(Dollars in thousands, except per share data) |
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2019 |
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2019 |
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2018 |
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Interest and dividend income: |
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Loans, including fees |
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$ |
10,554 |
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$ |
10,672 |
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$ |
9,866 |
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Investment securities |
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321 |
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312 |
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273 |
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Federal funds sold and other |
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478 |
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489 |
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206 |
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Total interest and dividend income |
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11,353 |
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11,473 |
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10,345 |
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Interest expense: |
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Deposits |
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2,995 |
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3,363 |
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2,179 |
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Other borrowed funds |
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168 |
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170 |
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267 |
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Total interest expense |
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3,163 |
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3,533 |
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2,446 |
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Net interest income |
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8,190 |
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7,940 |
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7,899 |
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Less: provision for credit losses |
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447 |
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100 |
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349 |
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Net interest income, after provision for credit losses |
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7,743 |
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7,840 |
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7,550 |
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Non-interest income: |
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Trust and investment management fees |
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4,748 |
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4,824 |
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4,752 |
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Net gain on mortgage loans sold |
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2,577 |
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3,291 |
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791 |
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Bank fees |
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261 |
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283 |
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333 |
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Risk management and insurance fees |
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367 |
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176 |
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380 |
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Net gain on sale of securities |
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— |
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119 |
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— |
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Net gain on sale of assets |
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183 |
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— |
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— |
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Income on company-owned life insurance |
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92 |
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95 |
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95 |
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Total non-interest income |
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8,228 |
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8,788 |
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6,351 |
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Total income before non-interest expense |
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15,971 |
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16,628 |
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13,901 |
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Non-interest expense: |
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Salaries and employee benefits |
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7,990 |
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8,504 |
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6,710 |
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Occupancy and equipment |
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1,369 |
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1,388 |
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1,414 |
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Professional services |
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962 |
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745 |
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814 |
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Technology and information systems |
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928 |
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961 |
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954 |
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Data processing |
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783 |
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854 |
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659 |
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Marketing |
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300 |
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272 |
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378 |
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Amortization of other intangible assets |
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7 |
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52 |
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163 |
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Other |
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743 |
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666 |
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557 |
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Total non-interest expense |
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13,082 |
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13,442 |
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11,649 |
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Income before income taxes |
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2,889 |
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3,186 |
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2,252 |
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Income tax expense |
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317 |
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|
780 |
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528 |
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Net income available to common shareholders |
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$ |
2,572 |
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$ |
2,406 |
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$ |
1,724 |
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Earnings per common share: |
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Basic |
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$ |
0.33 |
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$ |
0.30 |
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$ |
0.22 |
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Diluted |
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$ |
0.32 |
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$ |
0.30 |
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$ |
0.22 |
7
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
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December 31, |
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September 30, |
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December 31, |
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(Dollars in thousands) |
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2019 |
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2019 |
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2018 |
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ASSETS |
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Cash and cash equivalents: |
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Cash and due from banks |
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$ |
4,180 |
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$ |
3,828 |
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$ |
1,574 |
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Interest-bearing deposits in other financial institutions |
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74,458 |
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142,348 |
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|
71,783 |
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Total cash and cash equivalents |
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78,638 |
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146,176 |
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73,357 |
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Available-for-sale securities |
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58,903 |
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61,491 |
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44,901 |
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Correspondent bank stock, at cost |
|
|
585 |
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|
582 |
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|
2,488 |
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Mortgage loans held for sale |
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|
48,312 |
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|
69,231 |
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|
14,832 |
|
Loans, net of allowance of $7,875, $7,675 and $7,451 |
|
|
990,132 |
|
|
918,911 |
|
|
886,515 |
|
Premises and equipment, net |
|
|
5,218 |
|
|
5,483 |
|
|
6,100 |
|
Accrued interest receivable |
|
|
3,048 |
|
|
2,968 |
|
|
2,844 |
|
Accounts receivable |
|
|
5,238 |
|
|
4,978 |
|
|
4,492 |
|
Other receivables |
|
|
1,006 |
|
|
865 |
|
|
1,391 |
|
Other real estate owned, net |
|
|
658 |
|
|
658 |
|
|
658 |
|
Goodwill |
|
|
19,686 |
|
|
19,686 |
|
|
24,811 |
|
Other intangible assets, net |
|
|
28 |
|
|
36 |
|
|
402 |
|
Deferred tax assets, net |
|
|
5,047 |
|
|
4,765 |
|
|
4,306 |
|
Company-owned life insurance |
|
|
15,086 |
|
|
14,993 |
|
|
14,709 |
|
Other assets |
|
|
16,544 |
|
|
17,549 |
|
|
2,518 |
|
Assets held for sale |
|
|
3,553 |
|
|
3,553 |
|
|
— |
|
Total assets |
|
$ |
1,251,682 |
|
$ |
1,271,925 |
|
$ |
1,084,324 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing |
|
$ |
240,068 |
|
$ |
231,535 |
|
$ |
202,856 |
|
Interest-bearing |
|
|
846,716 |
|
|
877,369 |
|
|
734,902 |
|
Total deposits |
|
|
1,086,784 |
|
|
1,108,904 |
|
|
937,758 |
|
Borrowings: |
|
|
|
|
|
|
|
|
|
|
Federal Home Loan Bank Topeka borrowings |
|
|
10,000 |
|
|
10,000 |
|
|
15,000 |
|
Subordinated notes |
|
|
6,560 |
|
|
6,560 |
|
|
6,560 |
|
Accrued interest payable |
|
|
299 |
|
|
356 |
|
|
231 |
|
Other liabilities |
|
|
20,244 |
|
|
20,262 |
|
|
7,900 |
|
Liabilities held for sale |
|
|
117 |
|
|
111 |
|
|
— |
|
Total liabilities |
|
|
1,124,004 |
|
|
1,146,193 |
|
|
967,449 |
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
127,678 |
|
|
125,732 |
|
|
116,875 |
|
Total liabilities and shareholders’ equity |
|
$ |
1,251,682 |
|
$ |
1,271,925 |
|
$ |
1,084,324 |
8
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
|
|
|
As of |
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||
|
(Dollars in thousands) |
|
2019 |
|
2019 |
|
2018 |
|||
|
Loan Portfolio |
|
|
|
|
|
|
|
|
|
|
Cash, Securities and Other |
|
$ |
146,701 |
|
$ |
146,622 |
|
$ |
114,165 |
|
Construction and Development |
|
|
28,120 |
|
|
42,059 |
|
|
31,897 |
|
1 - 4 Family Residential |
|
|
400,134 |
|
|
366,238 |
|
|
350,852 |
|
Non-Owner Occupied CRE |
|
|
165,179 |
|
|
138,753 |
|
|
173,741 |
|
Owner Occupied CRE |
|
|
127,968 |
|
|
119,497 |
|
|
108,480 |
|
Commercial and Industrial |
|
|
128,457 |
|
|
111,187 |
|
|
113,660 |
|
Total loans held for investment |
|
|
996,559 |
|
|
924,356 |
|
|
892,795 |
|
Deferred costs, net |
|
|
1,448 |
|
|
2,230 |
|
|
1,171 |
|
Gross loans |
|
$ |
998,007 |
|
$ |
926,586 |
|
$ |
893,966 |
|
Total mortgage loans held for sale |
|
$ |
48,312 |
|
$ |
69,231 |
|
$ |
14,832 |
|
|
|
|
|
|
|
|
|
|
|
|
Deposit Portfolio |
|
|
|
|
|
|
|
|
|
|
Money market deposit accounts |
|
$ |
615,575 |
|
$ |
620,434 |
|
$ |
489,506 |
|
Time deposits |
|
|
134,913 |
|
|
170,457 |
|
|
178,743 |
|
Negotiable order of withdrawal accounts |
|
|
91,921 |
|
|
83,022 |
|
|
64,853 |
|
Savings accounts |
|
|
4,307 |
|
|
3,456 |
|
|
1,800 |
|
Total interest-bearing deposits |
|
|
846,716 |
|
|
877,369 |
|
|
734,902 |
|
Noninterest-bearing accounts |
|
|
240,068 |
|
|
231,535 |
|
|
202,856 |
|
Total deposits |
|
$ |
1,086,784 |
|
$ |
1,108,904 |
|
$ |
937,758 |
9
First Western Financial, Inc.
Consolidated Financial Summary (unaudited) (continued)
|
|
|
For the Three Months Ended |
|
|||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
(Dollars in thousands) |
|
2019 |
|
2019 |
|
2018 |
|
|||
|
Average Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
Average Assets |
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits in other financial institutions |
|
$ |
108,245 |
|
$ |
88,782 |
|
$ |
36,563 |
|
|
Available-for-sale securities |
|
|
58,745 |
|
|
51,368 |
|
|
46,219 |
|
|
Loans |
|
|
958,497 |
|
|
937,260 |
|
|
878,145 |
|
|
Interest-earning assets |
|
|
1,125,487 |
|
|
1,077,410 |
|
|
960,927 |
|
|
Mortgage loans held for sale |
|
|
59,813 |
|
|
52,546 |
|
|
15,148 |
|
|
Total interest earning-assets, plus loans held for sale |
|
|
1,185,300 |
|
|
1,129,956 |
|
|
976,075 |
|
|
Allowance for loan losses |
|
|
(7,756) |
|
|
(7,584) |
|
|
(7,240) |
|
|
Noninterest-earning assets |
|
|
78,934 |
|
|
81,171 |
|
|
68,962 |
|
|
Total assets |
|
$ |
1,256,478 |
|
$ |
1,203,543 |
|
$ |
1,037,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
865,489 |
|
$ |
826,490 |
|
$ |
674,691 |
|
|
Federal Home Loan Bank Topeka borrowings |
|
|
10,000 |
|
|
10,567 |
|
|
26,959 |
|
|
Subordinated notes |
|
|
6,560 |
|
|
6,560 |
|
|
6,560 |
|
|
Total interest-bearing liabilities |
|
|
882,049 |
|
|
843,617 |
|
|
708,210 |
|
|
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing deposits |
|
|
226,948 |
|
|
215,721 |
|
|
205,059 |
|
|
Other liabilities |
|
|
19,912 |
|
|
19,881 |
|
|
9,214 |
|
|
Total noninterest-bearing liabilities |
|
|
246,860 |
|
|
235,602 |
|
|
214,273 |
|
|
Shareholders’ equity |
|
|
127,569 |
|
|
124,324 |
|
|
115,314 |
|
|
Total liabilities and shareholders’ equity |
|
$ |
1,256,478 |
|
$ |
1,203,543 |
|
$ |
1,037,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yields (annualized) |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits in other financial institutions |
|
|
1.77 |
% |
|
2.20 |
% |
|
2.25 |
% |
|
Available-for-sale securities |
|
|
2.19 |
|
|
2.43 |
|
|
2.36 |
|
|
Loans |
|
|
4.40 |
|
|
4.55 |
|
|
4.49 |
|
|
Interest-earning assets |
|
|
4.03 |
|
|
4.26 |
|
|
4.31 |
|
|
Mortgage loans held for sale |
|
|
3.63 |
|
|
3.46 |
|
|
4.33 |
|
|
Total interest-earning assets, plus mortgage loans held for sale |
|
|
4.01 |
|
|
4.22 |
|
|
4.31 |
|
|
Interest-bearing deposits |
|
|
1.38 |
|
|
1.63 |
|
|
1.29 |
|
|
Federal Home Loan Bank Topeka borrowings |
|
|
1.96 |
|
|
1.93 |
|
|
2.20 |
|
|
Subordinated notes |
|
|
7.26 |
|
|
7.26 |
|
|
7.26 |
|
|
Total interest-bearing liabilities |
|
|
1.43 |
|
|
1.68 |
|
|
1.38 |
|
|
Net interest margin |
|
|
2.91 |
|
|
2.95 |
|
|
3.29 |
|
|
Interest rate spread |
|
|
2.60 |
% |
|
2.58 |
% |
|
2.93 |
% |
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 share and per share data) |
|
2019 |
|
2019 |
|
2018 |
|
|||
|
Asset Quality |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming loans |
|
$ |
12,270 |
|
$ |
13,980 |
|
$ |
19,052 |
|
|
Nonperforming assets |
|
|
12,928 |
|
|
14,638 |
|
|
19,710 |
|
|
Net charge-offs |
|
|
248 |
|
|
— |
|
|
16 |
|
|
Nonperforming loans to total loans |
|
|
1.23 |
% |
|
1.51 |
% |
|
2.13 |
% |
|
Nonperforming assets to total assets |
|
|
1.03 |
|
|
1.15 |
|
|
1.82 |
|
|
Allowance for loan losses to nonperforming loans |
|
|
64.18 |
|
|
54.90 |
|
|
39.11 |
|
|
Allowance for loan losses to total loans |
|
|
0.79 |
|
|
0.83 |
|
|
0.83 |
|
|
Net charge-offs to average loans |
|
|
0.03 |
% |
|
— |
% |
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets under management |
|
$ |
6,187,707 |
|
$ |
6,116,510 |
|
$ |
5,235,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Data |
|
|
|
|
|
|
|
|
|
|
|
Book value per share at period end |
|
$ |
16.08 |
|
$ |
15.75 |
|
$ |
14.67 |
|
|
Tangible book value per common share(1) |
|
$ |
13.15 |
|
$ |
12.83 |
|
$ |
11.50 |
|
|
Weighted average outstanding shares, basic |
|
|
7,906,516 |
|
|
7,890,794 |
|
|
7,873,718 |
|
|
Weighted average outstanding shares, diluted |
|
|
7,950,279 |
|
|
7,914,794 |
|
|
7,887,512 |
|
|
Shares outstanding at period end |
|
|
7,940,168 |
|
|
7,983,284 |
|
|
7,968,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Capital |
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to risk-weighted assets |
|
|
11.33 |
% |
|
11.73 |
% |
|
11.35 |
% |
|
Common Equity Tier 1(1) (CET1) to risk-weighted assets |
|
|
11.33 |
|
|
11.73 |
|
|
11.35 |
|
|
Total capital to risk-weighted assets |
|
|
12.89 |
|
|
13.36 |
|
|
13.06 |
|
|
Tier 1 capital to average assets |
|
|
8.58 |
|
|
8.76 |
|
|
9.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank Capital |
|
|
|
|
|
|
|
|
|
|
|
Tier 1 capital to risk-weighted assets |
|
|
10.69 |
|
|
10.98 |
|
|
10.55 |
|
|
Common Equity Tier 1(1) (CET1) to risk-weighted assets |
|
|
10.69 |
|
|
10.98 |
|
|
10.55 |
|
|
Total capital to risk-weighted assets |
|
|
11.55 |
|
|
11.87 |
|
|
11.47 |
|
|
Tier 1 capital to average assets |
|
|
8.09 |
% |
|
8.19 |
% |
|
8.63 |
% |
|
(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) |
|
2019 |
|
2019 |
|
2018 |
|
|||
|
Tangible common |
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
$ |
127,678 |
|
$ |
125,732 |
|
$ |
116,875 |
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
19,686 |
|
|
19,686 |
|
|
24,811 |
|
|
Assets held for sale |
|
|
3,553 |
|
|
3,553 |
|
|
— |
|
|
Other intangibles, net |
|
|
28 |
|
|
36 |
|
|
402 |
|
|
Tangible common equity |
|
$ |
104,411 |
|
$ |
102,457 |
|
$ |
91,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding, end of period |
|
|
7,940,168 |
|
|
7,983,284 |
|
|
7,968,420 |
|
|
Tangible common book value per share |
|
$ |
13.15 |
|
$ |
12.83 |
|
$ |
11.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders |
|
$ |
2,572 |
|
$ |
2,406 |
|
$ |
1,724 |
|
|
Return on tangible common equity (annualized) |
|
|
9.85 |
% |
|
9.39 |
% |
|
7.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency |
|
|
|
|
|
|
|
|
|
|
|
Non-interest expense |
|
$ |
13,082 |
|
$ |
13,442 |
|
$ |
11,649 |
|
|
Less: Amortization |
|
|
7 |
|
|
52 |
|
|
163 |
|
|
Adjusted non-interest expense |
|
$ |
13,075 |
|
$ |
13,390 |
|
$ |
11,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
8,190 |
|
$ |
7,940 |
|
$ |
7,899 |
|
|
Non-interest income |
|
|
8,228 |
|
|
8,788 |
|
|
6,351 |
|
|
Less: Net gain on sale of securities |
|
|
— |
|
|
119 |
|
|
— |
|
|
Less: Net gain on sale of assets |
|
|
183 |
|
|
— |
|
|
— |
|
|
Total income |
|
$ |
16,235 |
|
$ |
16,609 |
|
$ |
14,250 |
|
|
Efficiency ratio |
|
|
80.54 |
% |
|
80.62 |
% |
|
80.60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income before non-interest expense |
|
$ |
15,971 |
|
$ |
16,628 |
|
$ |
13,901 |
|
|
Less: Net gain on sale of securities |
|
|
— |
|
|
119 |
|
|
— |
|
|
Less: Net gain on sale of assets |
|
|
183 |
|
|
— |
|
|
— |
|
|
Plus: Provision for credit losses |
|
|
447 |
|
|
100 |
|
|
349 |
|
|
Gross revenue |
|
$ |
16,235 |
|
$ |
16,609 |
|
$ |
14,250 |
|
12
Exhibit 99.2
| First Western Financial, Inc. The First, Western-Based Private Trust Bank Fourth Quarter 2019 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 4Q19 Positive Trends in Core Deposits and AUM Strong Financial Performance Record Quarter of Loan Production .. Total loan production of $146.1 million, with 4Q19 average total gross loan balance over $1.0 billion ..Gross loans increased 30.8% annualized .. Significant contributions from all major lending areas .. Book value and tangible book value per common share increased 9.6% and 14.3%, respectively, over 4Q18 .. Average total loans increased 14.0% from December 31, 2018 .. Average deposits increased 24.2% over 4Q18 .. Nonperforming loans decreased $6.8 million, or 35.6%, from December 31, 2018 Year-over-Year Achievements .. Average deposits increased $50.2 million from 3Q19 to 4Q19 .. Deposit growth coming in lower cost categories .. AUM increased 18.2% over 4Q18 3 .. Net income available to common shareholders of $2.6 million, or $0.32 EPS at December 31, 2019 .. Net income increased 49.2% and EPS increased 45.5% over 4Q18 .. Book value and tangible book value per share(1) increased 2.1% and 2.5%, respectively, over 3Q19 (1) See Non-GAAP reconciliation |
| $0.22 $0.21 $0.30 $0.32 $0.15 $0.33 $- $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 $0.40 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 EPS Adjustments to EPS (1) Net Income Available to Common Shareholders and Earnings per Share 4 Net Income Available to Common Shareholders .. Strong execution delivering consistent earnings .. Net income increased 49.2% over 4Q18 .. Earnings per share increased 45.5% over 4Q18 Earnings per Share (in thousands) $1,182 $1,724 $1,627 $2,586 $2,406 $2,572 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net Income Adjustments to Net Income (1) (1) See Non-GAAP reconciliation |
| $893 $929 $966 $990 $1,018 $994 $1,045 4Q18 1Q19 2Q19 3Q19 4Q19 3Q19 4Q19 HFI HFS Average Period End Loan Portfolio 5 Loan Portfolio Composition(1) .. Gross loans held-for-investment (HFI) increased 30.8% annualized .. Total new HFI loan production of $146.1 million in 4Q19 vs $55.4 million in 3Q19 and $102.4 million in 4Q18 .. Payoffs/paydowns, net of draws, increased to $82.7 million in 4Q19 vs $71.3 million in 3Q19 .. Balanced growth across most major portfolios (in thousands, as of quarter-end) Total Loans(1) (in millions) (1) Excludes deferred costs, net 4Q 2018 3Q 2019 4Q 2019 Cash, Securities and Other $114,165 $146,622 $146,701 Construction and Development 31,897 42,059 28,120 1 - 4 Family Residential 350,852 366,238 400,134 Non-Owner Occupied CRE 173,741 138,753 165,179 Owner Occupied CRE 108,480 119,497 127,968 Commercial and Industrial 113,660 111,187 128,457 Total Loans HFI $892,795 $924,356 $996,559 Mortgage loans held for sale 14,832 69,231 48,312 Total Loans $907,627 $993,587 $1,044,871 Loan Production & Net Loan Payoffs/Paydowns $102.4 $63.8 $52.6 $55.4 $146.1 $67.4 $24.5 $44.7 $71.3 $82.7 4Q18 1Q19 2Q19 3Q19 4Q19 Production Net Loan Payoffs/Paydowns (in millions) |
| $880 $981 $967 $1,042 $1,092 $1,109 $1,087 4Q18 1Q19 2Q19 3Q19 4Q19 3Q19 4Q19 Average Period End Total Deposits 6 Deposit Portfolio Composition .. Average deposits increased $50.2 million from 3Q19 and $212.7 million from 4Q18 .. Continued growth in noninterest-bearing and NOW accounts .. Total deposits declined due to intentional run-off of higher-cost time deposits .. Strong inflows of core deposits earlier in 2019 allowed for repositioning of deposit portfolio to improve overall mix and reduce funding costs 4Q 2018 3Q 2019 4Q 2019 Money market deposit accounts $489,506 $620,434 $615,575 Time deposits 178,743 170,457 134,913 NOW 64,853 83,022 91,921 Savings accounts 1,800 3,456 4,307 Noninterest-bearing accounts 202,856 231,535 240,068 Total Deposits $937,758 $1,108,904 $1,086,784 (in thousands, as of quarter-end) Total Deposits (in millions) |
| Trust and Investment Management .. Total assets under management increased $952.5 million, or 18.2%, from December 31, 2018 .. Total assets under management increased $71.2 million from September 30, 2019 to $6.19 billion at December 31, 2019 .. Increase was primarily attributable to market gains, additionally $79.8 million in new assets and $87.3 million in contributions were added in 4Q19 $5,235 $5,781 $5,968 $6,116 $6,188 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Investment Agency Managed Trust 401(k)/Retirement Directed Trust Custody (in millions, as of quarter-end) 7 |
| Non-interest Income $8,045 Net Interest Income $8,190 50.4% 49.6% Gross Revenue 8 (1) See Non-GAAP reconciliation 4Q19 Gross Revenue(1) .. Gross revenue increased 13.9% from 4Q18 .. Higher net interest income helped to offset by higher provision and seasonal slow down of mortgage loans .. Late quarter loan growth provides tailwind entering 2020 Gross Revenue(1) ($millions) $14.3 $14.9 $16.5 $16.6 $16.2 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Wealth Management Capital Management Mortgage |
| Net Interest Income & Net Interest Margin 9 Net Interest Income .. Net interest income increased 3.1% from 3Q19, primarily due to a reduction in interest expense .. Net interest margin decreased to 2.91%, primarily due to a decline in the yield on earning assets .. Earning asset yields declined due to lower yields on securities, repricing in the loan portfolio and a higher mix of residential mortgage loans .. NIM expected to show more stability as repricing in loan portfolio is substantially complete Net Interest Margin 3.29% 3.03% 3.10% 2.95% 2.91% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 $7,899 $7,971 $7,960 $7,940 $8,190 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 (in thousands) |
| Non-Interest Income 10 Total Non-Interest Income .. Total non-interest income decreased by 6.4%, primarily due to seasonally slower mortgage activity in the fourth quarter .. $200.4 million in mortgage loans funded in 4Q19 compared to $226.5 million in 3Q19 Trust & Investment Management Fees $6,351 $6,976 $8,586 $8,788 $8,228 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 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 (in thousands) (in thousands) $4,752 $4,670 $4,693 $4,824 $4,748 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 |
| Non-Interest Expense and Efficiency Ratio 11 Total Non-Interest Expense(1) .. Non-interest expense decreased 2.7% from 3Q19 .. Decrease was primarily driven by lower equity compensation earnout related to residential mortgage business Operating Efficiency Ratio(1) 80.6% 83.2% 78.2% 80.6% 80.5% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 $1,572 $11,649 $12,602 $14,659 $13,422 $13,082 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Non-Interest Expense Goodwill Impairment (in thousands) (1) See Non-GAAP reconciliation |
| Asset Quality 12 Non-Performing Assets/Total Assets .. Generally stable trends in the portfolio with decreases in non-performing loans and non- performing assets .. Loss experience continues to be extremely low .. $0.4 million provision expense primarily reflects strong growth in total loans Net Charge-Offs/Average Loans 0.00% 0.00% 0.00% 0.00% 0.03% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 1.82% 1.69% 1.13% 1.15% 1.03% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 |
| Outlook 13 .. Increased focus on asset generation expected to complement success in growing total deposits and AUM .. Commercial banking initiative focused on building expertise in specific vertical markets 1Q20 launch of first vertical market: medical and dental practices .. Continued growth in newer markets such as Vail Valley and Broomfield .. Mortgage activity expected to be consistent with 2019 .. Continued revenue growth is expected to drive further operating leverage .. 2020 expected to be another year of strong earnings growth and improved profitability |
| Appendix |
| 15 Non-GAAP Reconciliation Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Non-interest expense $11,649 $12,602 $14,659 $13,442 $13,082 Less: Amortization 163 173 142 52 7 Less: Goodwill impairment -- 1,572 -- Adjusted non-interest expense $11,486 $12,429 $12,945 $13,390 $13,075 Net interest income $7,899 $7,971 $7,960 $7,940 $8,190 Non-interest income 6,351 6,976 8,586 8,788 8,228 Less: Net gain on sale of securities --- 119 - Less: Net gain on sale of assets ---- 183 Total income $14,250 $14,947 $16,546 $16,609 $16,235 Efficiency ratio 80.6% 83.2% 78.2% 80.6% 80.5% Consolidated Tangible Common Book Value Per Share As of the Three Months Ended, (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Total shareholders' equity $116,875 $119,668 $122,157 $125,732 $127,678 Less: Goodwill 24,811 24,811 23,239 19,686 $19,686 Assets held for sale ——— 3,553 3,553 Other intangibles, net 402 229 88 36 28 Tangible common equity 91,662 94,628 98,830 102,457 104,411 Common shares outstanding, end of period 7,968,420 7,968,420 7,983,866 7,983,284 7,940,168 Tangible common book value per share $11.50 $11.88 $12.38 $12.83 $13.15 |
| 16 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Total income before non-interest expense $12,289 $12,509 $12,550 $12,554 $12,534 Less: Net gain on sale of securities --- 119 - Less: Net gain on sale of assets ---- 183 Plus: Provision for (recovery of) credit loss 349 194 (78) 100 447 Gross revenue $12,638 $12,703 $12,472 $12,535 $12,798 Capital Management Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Total income before non-interest expense $794 $765 $798 $776 $815 Less: Net gain on sale of securities ----- Less: Net gain on sale of assets ----- Plus: Provision for (recovery of) credit loss ----- Gross revenue $794 $765 $798 $776 $815 Mortgage Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Total income before non-interest expense $818 $1,479 $3,276 $3,298 $2,622 Less: Net gain on sale of securities ----- Less: Net gain on sale of assets ----- Plus: Provision for (recovery of) credit loss ----- Gross revenue $818 $1,479 $3,276 $3,298 $2,622 Consolidated Gross Revenue For the Three Months Ended, (Dollars in thousands) December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 Total income before non-interest expense $13,901 $14,753 $16,624 $16,628 $15,971 Less: Net gain on sale of securities --- 119 - Less: Net gain on sale of assets ---- 183 Plus: Provision for (recovery of) credit loss 349 194 (78) 100 447 Gross revenue $14,250 $14,947 $16,546 $16,609 $16,235 |
| 17 Non-GAAP Reconciliation Impact of Goodwill impairment – Net income available to common shareholder For the Three Months Ended, (Dollars in thousands, except per share data) June 30, 2019 September 30, 2019 December 31, 2019 Net income available to common shareholders $1,404 $2,406 $2,572 Plus: Goodwill impairment including tax Impact 1,182 - - Adjusted net income to common shareholders $2,586 $2,406 $2,572 Impact of Goodwill impairment – Earnings Per Share For the Three Months Ended, (Dollars in thousands, except per share data) June 30, 2019 September 30, 2019 December 31, 2019 Earnings per share $0.18 $0.30 0.32 Plus: Goodwill impairment including tax impact 0.15 - - Adjusted earnings per share $0.33 $0.30 $0.32 |
