SEC Filing | First Western Financial

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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): July 23, 2020

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.

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, no par value	MYFW	The Nasdaq Stock Market LLC

Item 2.02 Results of Operations and Financial Condition.

On July 23, 2020, First Western Financial, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2020. 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 second quarter ended June 30, 2020 on Friday, July 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 second quarter ended June 30, 2020 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 Number		Description

99.1 99.2		Press Release issued by First Western Financial, Inc. dated July 23, 2020 First Western Financial, Inc. Earnings Presentation

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: July 23, 2020		By: /s/ Scott C. Wylie
			Scott C. Wylie

			Chairman, Chief Executive Officer and President

Exhibit 99.1

First Western Reports Second Quarter 2020 Financial Results

Second Quarter 2020 Summary

Net income available to common shareholders of $8.7 million in Q2 2020, compared to $1.3 million in Q1 2020 and $1.4 million in Q2 2019

Diluted EPS of $1.10 in Q2 2020, compared to $0.17 in Q1 2020 and $0.18 in Q2 2019

●

Gross revenue⁽¹⁾ of $26.2 million in Q2 2020, compared to $16.7 million in Q1 2020 and $16.5 million in Q2 2019

●

Net interest margin remained relatively flat at 3.10% in Q2 2020, compared with 3.14% in Q1 2020 and 3.10% Q2 2019

●

Total assets of $1.81 billion, up 33.7% from Q1 2020 and 52.1% from Q2 2019

●

Total deposits of $1.41 billion, up 19.4% from Q1 2020 and 40.0% from Q2 2019

●

Gross loans of $1.42 billion, up 36.3% from Q1 2020 and 51.4% from Q2 2019

●

$204.6 million in Paycheck Protection Program (“PPP”) Loans, including $12.9 million in acquired PPP loans

●

Branch purchase and assumption agreement completed that expands First Western’s presence in Denver market; acquired $123.3 million in loans and $65.2 million in deposits as of June 30, 2020

⁽¹⁾ Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Denver, Colo., July 23, 2020 – First Western Financial, Inc., (“First Western” or the “Company”) (NASDAQ: MYFW), today reported financial results for the second quarter ended June 30, 2020.

Net income available to common shareholders was $8.7 million, or $1.10 per diluted share, for the second quarter of 2020. This compares to $1.3 million, or $0.17 per diluted share, for the first quarter of 2020, and $1.4 million, or $0.18 per diluted share, for the second quarter of 2019.

Scott C. Wylie, CEO of First Western, commented, “Our second quarter performance – which represents a record level of net income and earnings per share for the Company – reflects our inherent advantages in managing through the impact of the COVID-19 pandemic. Given our conservatively underwritten loan portfolio with minimal exposure to the industries most impacted by the crisis, we have seen generally stable asset quality and a relatively low level of projected losses. In addition to tightening credit underwriting and pricing, we have increased our loan level reviews and portfolio monitoring. We have also benefited from the strong demand for mortgage refinancing, which resulted in the highest level of residential mortgage originations and gain on mortgages sold income in our history. In addition, we were able to significantly reduce our cost of deposits, which helped us to maintain a relatively stable net interest margin despite a decline in earning asset yields due to the drop in prevailing interest rates and low contractual rates on PPP loans.

In the second quarter, we posted strong organic growth while also producing a high level of PPP loans and closing early on a branch acquisition, with four locations in metro Denver, all while working remotely. Net loans, excluding PPP and acquired loans, grew 26.4% and net deposits, excluding PPP and acquired deposits, grew 34.2% annualized over the prior quarter.

We have continued to actively support our communities through the origination of PPP loans. Through June 30, we had $204.6 million in loans funded for both existing and new clients through the PPP. Our productivity in the PPP program has helped drive substantial growth in both loans and deposits, accelerating our efforts to gain scale and realize improved operating efficiencies.

In May, we completed our branch purchase and assumption agreement ahead of schedule, which provided substantial economic benefits to the Company. The integration of our new associates and clients has gone very smoothly as both loan and deposit balances have grown from closing to June 30, 2020, and we continue to expect this transaction to be significantly accretive to future earnings.

While the ongoing pandemic creates a great deal of uncertainty, we believe we are well positioned to see a continuation of our strong performance in the second half of the year. Mortgage demand remains robust, we have a healthy pipeline of quality lending opportunities outside of PPP, and we expect to begin realizing the synergies from the branch acquisition. We believe this combination will result in a strong level of earnings, further increases in our tangible book value per share, and additional value being created for our shareholders,” said Mr. Wylie.


	For the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except per share data)	2020			2020			2019
Earnings Summary
Net interest income	$	10,796		$	8,931		$	7,960
Less: provision for (recovery of) loan losses		2,124			367			(78)
Total non-interest income		15,427			7,767			8,586
Total non-interest expense⁽¹⁾		12,644			14,647			14,659
Income before income taxes		11,455			1,684			1,965
Income tax expense		2,759			350			561
Net income available to common shareholders		8,696			1,334			1,404
Adjusted net income available to common shareholders⁽²⁾		8,941			1,772			2,586
Basic earnings per common share		1.10			0.17			0.18
Adjusted basic earnings per common share⁽²⁾		1.13			0.23			0.33
Diluted earnings per common share		1.10			0.17			0.18
Adjusted diluted earnings per common share⁽²⁾	$	1.13		$	0.22		$	0.33

Return on average assets (annualized)		2.25	%		0.43	%		0.50	%
Adjusted return on average assets (annualized)⁽²⁾		2.32			0.57			0.91
Return on average shareholders' equity (annualized)		25.44			4.09			4.61
Adjusted return on average shareholders' equity (annualized)⁽²⁾		26.16			5.43			8.50
Return on tangible common equity (annualized)⁽²⁾		31.02			5.03			5.68
Adjusted return on tangible common equity (annualized)⁽²⁾		31.89			6.69			10.51
Net interest margin		3.10			3.14			3.10
Efficiency ratio⁽²⁾		48.07	%		84.39	%		78.24	%

⁽¹⁾ Includes non-recurring acquisition related expenses of $0.3 million for the three months ended June 30, 2020, non-operating loss on intangibles held for sale of $0.6 million for the three months ended March 31, 2020 and non-operating goodwill impairment charge of $1.6 million for the three months ended June 30, 2019.

⁽²⁾Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Operating Results for the Second Quarter 2020

Revenue

Gross revenue⁽¹⁾ was $26.2 million for the second quarter of 2020, compared to $16.7 million for the first quarter of 2020. The increase in revenue was driven by a $7.7 million increase in non-interest income, primarily due to higher mortgage segment activity, as well as a $1.9 million increase in net interest income.

Relative to the second quarter of 2019, gross revenue increased $9.7 million from $16.5 million. The increase was due to growth in net interest income and net gain on mortgage loans resulting from increased mortgage activity.

(1)	Represents a Non-GAAP financial measure. See “Reconciliations of Non-GAAP Measures” for a reconciliation of our Non-GAAP measures to the most directly comparable GAAP financial measure.

Net Interest Income

Net interest income for the second quarter of 2020 was $10.8 million, an increase of 20.9% from $8.9 million in the first quarter of 2020. The increase in net interest income was driven by three primary factors: $0.7 million related to the branch acquisition, $0.6 million from PPP loans and $0.6 million from higher average loan balances attributed to organic growth as well as a stable net interest margin.

Relative to the second quarter of 2019, net interest income increased 35.6% from $8.0 million. The year-over-year increase in net interest income was due primarily to growth in average loans including the impact of PPP loans and the branch acquisition.

We expect net income related to the PPP program to result in $2.4 million of additional interest income related to the fees from the Small Business Administration for participation in PPP less the loan origination fees on these loans. The current amortization of this income is being recognized over a two-year period, however we expect much of that income to be recognized in the second half of 2020 as the borrowers are granted forgiveness.

Net Interest Margin

Net interest margin for the second quarter of 2020 decreased slightly to 3.10% from 3.14% in the first quarter of 2020. The decrease was primarily driven by a 46 basis point decline in the yield on earning assets, which was partially offset by a 48 basis point decline in the cost of deposits. On a net basis, the impact of the PPP program resulted in the second quarter net interest margin decreasing by approximately 12 basis points.

Relative to the second quarter of 2019, the net interest margin was unchanged from 3.10%.

Non-interest Income

Non-interest income for the second quarter of 2020 was $15.4 million, an increase of 98.6% from $7.8 million in the first quarter of 2020. The increase was attributable to an increase in net gain on mortgage loans as a result of record volume of mortgages locked and originated in the quarter. We originated $344.3 million of mortgage loans for sale during the quarter compared to $196.9 million the previous quarter, an increase of $147.4 million.

Relative to the second quarter of 2019, non-interest income increased 79.7% from $8.6 million. The increase was primarily attributable to higher net gains on mortgage loans as a result of a higher volume of mortgages and improving margins.

Non-interest Expense

Non-interest expense for the second quarter of 2020 was $12.6 million, a decrease of 13.7% from $14.6 million for the first quarter of 2020. The decrease was primarily attributable to lower salaries and benefits expense resulting from $2.9 million in loan origination expenses related to PPP loans that were deferred in the period and will be amortized through net interest income over the expected 24-month life of the loans, if not earlier, as the borrowers are granted forgiveness. This was offset by $0.3 million of acquisition related expenses incurred during the second quarter of 2020 as well as an increase in incentive compensation accruals correlating with the increase in revenues and earnings.

Non-interest expense decreased 13.7% from $14.7 million in the second quarter of 2019. The decrease was primarily due to lower salaries and employee benefits expense resulting from the capitalization of the PPP loan origination expenses. Non-interest expense in the second quarter of 2019 included a $1.6 million goodwill impairment charge.

Including the impacts of PPP, mortgage earnings, and the acquisition related costs, the Company’s efficiency ratio was 48.1% in the second quarter of 2020, compared with 84.4% in the first quarter of 2020 and 78.2% in the second quarter of 2019.

The impact of the non-operating costs are as follows:


	Three Months Ending
		June 30,		March 31,		June 30,
(Dollars in thousands, except share and per share data)		2020		2020		2019
Adjusted Net Income Available to Common Shareholders⁽¹⁾
Net income available to common shareholders	$	8,696	$	1,334	$	1,404
Plus: acquisition related expenses related to branch acquisition		323		—		—
Plus: loss on intangibles held for sale		—		553		—
Plus: goodwill impairment		—		—		1,572
Less: income tax impact		78		115		390
Adjusted Net Income Available to Common Shareholders⁽¹⁾	$	8,941	$	1,772	$	2,586

Adjusted Diluted Earnings Per Share⁽¹⁾
Diluted Earnings per share	$	1.10	$	0.17	$	0.18
Plus: acquisition related expenses net of income tax impact:		0.03		—		—
Plus: loss on intangibles held for sale net of income tax impact		—		0.05		—
Plus: goodwill impairment net of income tax impact		—		—		0.15
Adjusted Diluted Earnings Per Share⁽¹⁾	$	1.13	$	0.22	$	0.33

(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.

Income Taxes

The Company recorded income tax expense of $2.8 million for the second quarter of 2020, representing an effective tax rate of 24.1%, compared to 20.8% for the first quarter of 2020. The increase in effective tax rate in the second quarter of 2020 was primarily attributable to increased earnings.

Loan Portfolio

Total loans including mortgage loans held for sale were $1.49 billion at June 30, 2020, an increase of $387.2 million from the end of the prior quarter, and an increase of $519.5 million from June 30, 2019. The increase in total loans was attributable to $191.7 million added through PPP loan originations and $123.8 million in period end balances which were added through the branch acquisition, including PPP loans acquired, with the remaining $71.7 million increase being attributable to organic growth.

Prior to the completion of the branch acquisition, our internal credit department and management reviewed large loans as well as loans that were modified due to the impact from the COVID-19 pandemic. As a result of this increased degree of review, the Bank purchased only performing loans that we believe to be of high quality as of the closing of the acquisition. No loans purchased were designated as purchase credit impaired.

Total loans held for investment, was $1.42 billion at June 30, 2020, an increase of 36.6% from $1.04 billion at March 31, 2020, and an increase of 51.8% from $938.0 million at June 30, 2019. The increase in total loans held for investment from March 31, 2020 was primarily due to growth in the commercial and industrial, commercial real estate, and construction portfolios along with an increase in the cash, securities and other portfolio driven by the PPP loans.

Deposits

Total deposits were $1.41 billion at June 30, 2020, compared to $1.18 billion at March 31, 2020, and $1.01 billion at June 30, 2019. The increase in total deposits from March 31, 2020 was attributable to $65.2 million

added through the branch acquisition, $62.4 million inflows related to funding the PPP loans, with the remaining $100.9 million increase being attributable to organic growth.

Average total deposits for the second quarter of 2020 increased $342.0 million, or 35.4%, from the second quarter of 2019.

Borrowings

Federal Home Loan Bank (“FHLB”) and Federal Reserve borrowings were $222.3 million at June 30, 2020, compared to $10.0 million at March 31, 2020 an increase of $212.3 million from the end of the prior quarter. The increase is attributable to participation in the Paycheck Protection Program Loan Facility from the Federal Reserve during the quarter in the amount of $204.3 million. Borrowing from this facility is expected to match fund the balances of the PPP loans. The remaining $8.0 million increase was a result of additional advances from FHLB.

Assets Under Management

Total assets under management increased by $115.9 million during the second quarter to $5.75 billion at June 30, 2020, compared to $5.64 billion at March 31, 2020, and $5.97 billion at June 30, 2019. The increase was primarily attributable to customer contributions to existing accounts and improving market conditions.

Credit Quality

Non-performing assets totaled $12.1 million, or 0.67% of total assets, at June 30, 2020, compared with $11.1 million, or 0.82% of total assets, at March 31, 2020.

As a result of the COVID-19 pandemic, a loan modification program was designed and implemented to assist our clients experiencing financial stress resulting from the economic impacts caused by the global pandemic. The Company offered loan extensions, temporary payment moratoriums, and financial covenant waivers for commercial and consumer borrowers impacted by the pandemic who had a pass risk rating and had not been delinquent over 30 days on payments in the last two years.

At June 30, 2020, the Company had entered into loan modification agreements on ninety-eight loans across multiple industries in the amount of $176.9 million. Most of the temporary payment moratoriums are for a period of 180 days or less and the Company is recognizing interest income on these loans. At June 30, 2020, accrued interest increased $2.4 million as a result of payment moratoriums related to loan modifications. The Company continues to meet regularly with clients who could be more highly impacted by the COVID-19 pandemic. The Company receives and reviews current financial data and cash flow forecasts from borrowers with loan modification agreements.

The Company recorded a provision for loan losses of $2.1 million in the second quarter of 2020, primarily based on the additional variability surrounding the loan modifications made during the quarter and increased economic uncertainty. The Company has increased loan level reviews and portfolio monitoring to address the changing environment.

Capital

At June 30, 2020, First Western (“Consolidated”) and First Western Trust Bank (“Bank”) exceeded the minimum capital levels required by their respective regulators. At June 30, 2020, the Bank was classified as “well capitalized,” as summarized in the following table:


	June 30,
	2020
Consolidated Capital
Tier 1 capital to risk-weighted assets	9.67	%
Common Equity Tier 1 (CET1) to risk-weighted assets	9.67
Total capital to risk-weighted assets	11.84
Tier 1 capital to average assets	8.30

Bank Capital
Tier 1 capital to risk-weighted assets	10.12
Common Equity Tier 1 (CET1) to risk-weighted assets	10.12
Total capital to risk-weighted assets	11.05
Tier 1 capital to average assets	8.63	%

Tangible book value per common share⁽¹⁾ increased 14.1% from $12.38 at June 30, 2019 to $14.13 at June 30, 2020, and was up 5.5% from $13.39 at March 31, 2020.

During the second quarter of 2020, the Company did not repurchase any shares of its common stock under its stock repurchase program. The Company does not currently anticipate repurchasing shares while its capital can be used to support its clients and communities through the duration of the COVID-19 pandemic.

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, July 24, 2020. The call can be accessed via telephone at 877-405-1628; passcode 8691738. A recorded replay will be accessible through July 31, 2020 by dialing 855-859-2056; passcode 8691738.

A slide presentation relating to the second quarter 2020 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,” “Adjusted Net Income Available to Common Shareholders,” “Adjusted Earnings Per Share,” “Adjusted Diluted Earnings Per Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” and “Adjusted Return on Tangible Common Equity”. 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 COVID-19 pandemic and its effects; integration risks in connection with acquisitions; 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 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 12, 2020 (“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

First Western Financial, Inc.

Consolidated Financial Summary (unaudited)


	Three Months Ending
	June 30,		March 31,		June 30,
(Dollars in thousands, except per share data)	2020		2020		2019
Interest and dividend income:
Loans, including fees	$	12,202	$	11,002	$	10,600
Investment securities		224		295		331
Federal funds sold and other		44		215		243
Total interest and dividend income		12,470		11,512		11,174

Interest expense:
Deposits		1,319		2,393		2,995
Other borrowed funds		355		188		219
Total interest expense		1,674		2,581		3,214
Net interest income		10,796		8,931		7,960
Less: provision for (recovery of) loan losses		2,124		367		(78)
Net interest income, after provision for (recovery of) loan losses		8,672		8,564		8,038

Non-interest income:
Trust and investment management fees		4,609		4,731		4,693
Net gain on mortgage loans		10,173		2,481		3,262
Bank fees		221		368		341
Risk management and insurance fees		333		96		194
Income on company-owned life insurance		91		91		96
Total non-interest income		15,427		7,767		8,586
Total income before non-interest expense		24,099		16,331		16,624

Non-interest expense:
Salaries and employee benefits		6,690		8,482		7,699
Occupancy and equipment		1,515		1,440		1,398
Professional services		1,231		1,023		1,036
Technology and information systems		993		969		1,016
Data processing		1,037		847		742
Marketing		253		415		441
Amortization of other intangible assets		38		2		142
Goodwill impairment		—		—		1,572
Net loss on held for sale intangibles		—		553		—
Other		887		916		613
Total non-interest expense		12,644		14,647		14,659
Income before income taxes		11,455		1,684		1,965
Income tax expense		2,759		350		561
Net income available to common shareholders	$	8,696	$	1,334	$	1,404
Earnings per common share:
Basic	$	1.10	$	0.17	$	0.18
Diluted	$	1.10	$	0.17	$	0.18

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)


	As of
	June 30,		March 31,		June 30,
	2020		2020		2019

(Dollars in thousands)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	4,404	$	4,076	$	1,974
Interest-bearing deposits in other financial institutions		187,272		114,438		90,795
Total cash and cash equivalents		191,676		118,514		92,769

Available-for-sale securities, at fair value		47,018		52,500		51,698
Correspondent bank stock, at cost		1,295		1,158		1,649
Mortgage loans held for sale		69,604		64,120		36,269
Loans, net of allowance of $10,354, $8,242 and $7,575		1,412,086		1,035,709		931,820
Premises and equipment, net		5,201		5,148		5,683
Accrued interest receivable		5,108		3,107		3,184
Accounts receivable		4,616		4,669		4,718
Other receivables		1,543		1,058		872
Other real estate owned, net		658		658		658
Goodwill		24,191		19,686		23,239
Other intangible assets, net		76		26		88
Deferred tax assets, net		6,035		5,036		4,607
Company-owned life insurance		15,268		15,177		14,898
Other assets		23,141		24,297		18,313
Assets held for sale		3,010		3,000		—
Total assets	$	1,810,526	$	1,353,863	$	1,190,465

LIABILITIES
Deposits:
Noninterest-bearing	$	398,063	$	270,604	$	229,266
Interest-bearing		1,008,869		907,846		775,911
Total deposits		1,406,932		1,178,450		1,005,177
Borrowings:
Federal Home Loan Bank Topeka and Federal Reserve borrowings		222,313		10,000		36,060
Subordinated notes		14,444		14,459		6,560
Accrued interest payable		205		417		274
Other liabilities		27,080		21,708		20,237
Liabilities held for sale		135		126		—
Total liabilities		1,671,109		1,225,160		1,068,308

SHAREHOLDERS’ EQUITY
Total shareholders’ equity		139,417		128,703		122,157
Total liabilities and shareholders’ equity	$	1,810,526	$	1,353,863	$	1,190,465

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)


	As of
	June 30,		March 31,		June 30,
(Dollars in thousands)	2020		2020		2019
Loan Portfolio
Cash, Securities and Other	$	371,111	$	147,157	$	149,503
Construction and Development		74,793		25,461		40,826
1-4 Family Residential		418,409		412,306		373,836
Non-Owner Occupied CRE		229,150		192,350		152,664
Owner Occupied CRE		117,426		121,138		112,660
Commercial and Industrial		213,271		144,066		108,516
Total loans held for investment		1,424,160		1,042,478		938,005
Deferred costs (fees) and unamortized premium\(unaccreted discount), net		(1,720)		1,473		1,390
Gross loans	$	1,422,440	$	1,043,951	$	939,395
Total mortgage loans held for sale	$	69,604	$	64,120	$	36,269

Deposit Portfolio
Money market deposit accounts	$	759,997	$	671,641	$	508,263
Time deposits		152,897		150,190		176,128
Negotiable order of withdrawal accounts		88,560		82,092		88,687
Savings accounts		7,415		3,923		2,833
Total interest-bearing deposits		1,008,869		907,846		775,911
Noninterest-bearing accounts		398,063		270,604		229,266
Total deposits	$	1,406,932	$	1,178,450	$	1,005,177

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)


	For the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands)	2020			2020			2019
Average Balance Sheets
Average Assets
Interest-earning assets:
Interest-bearing deposits in other financial institutions	$	76,463		$	68,035		$	40,755
Available-for-sale securities		48,614			55,208			52,852
Loans		1,268,797			1,016,148			935,025
Interest-earning assets		1,393,874			1,139,391			1,028,632
Mortgage loans held for sale		68,212			37,798			31,454
Total interest earning-assets, plus mortgage loans held for sale		1,462,086			1,177,189			1,060,086
Allowance for loan losses		(8,694)			(8,010)			(7,648)
Noninterest-earning assets		89,817			84,054			79,735
Total assets	$	1,543,209		$	1,253,233		$	1,132,173

Average Liabilities and Shareholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits	$	929,805		$	830,736		$	742,002
Federal Home Loan Bank Topeka and Federal Reserve borrowings		64,067			10,495			17,922
Subordinated notes		14,445			7,854			6,560
Total interest-bearing liabilities		1,008,317			849,085			766,484
Noninterest-bearing liabilities:
Noninterest-bearing deposits		379,374			253,813			225,153
Other liabilities		18,815			19,874			18,830
Total noninterest-bearing liabilities		398,189			273,687			243,983
Shareholders’ equity		136,703			130,461			121,706
Total liabilities and shareholders’ equity	$	1,543,209		$	1,253,233		$	1,132,173

Yields (annualized)
Interest-bearing deposits in other financial institutions		0.23	%		1.26	%		2.38	%
Available-for-sale securities		1.84			2.14			2.51
Loans		3.85			4.33			4.53
Interest-earning assets		3.58			4.04			4.35
Mortgage loans held for sale		3.23			3.45			3.73
Total interest-earning assets, plus mortgage loans held for sale		3.56			4.02			4.33
Interest-bearing deposits		0.57			1.15			1.61
Federal Home Loan Bank Topeka and Federal Reserve borrowings		0.81			1.95			2.23
Subordinated notes		6.26			6.97			7.26
Total interest-bearing liabilities		0.66			1.22			1.68
Net interest margin		3.10			3.14			3.10
Interest rate spread		2.92	%		2.83	%		2.67	%

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)


	As of and for the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except share and per share data)	2020			2020			2019
Asset Quality
Non-performing loans	$	11,454		$	10,451		$	12,803
Non-performing assets		12,112			11,109			13,461
Net charge-offs (recoveries)	$	12		$	—		$	(8)
Non-performing loans to total loans		0.81	%		1.00	%		1.36	%
Non-performing assets to total assets		0.67			0.82			1.13
Allowance for loan losses to non-performing loans		90.40			78.86			59.17
Allowance for loan losses to total loans		0.73			0.79			0.81
Allowance for loan losses to bank originated loans excluding PPP⁽¹⁾		0.93			0.79			0.81
Net charge-offs to average loans		—	%		—	%		—	%

Assets under management	$	5,752,353		$	5,636,500		$	5,968,318

Market Data
Book value per share at period end	$	17.56		$	16.26		$	15.30
Tangible book value per common share⁽¹⁾	$	14.13		$	13.39		$	12.38
Weighted average outstanding shares, basic		7,890,337			7,863,564			7,881,999
Weighted average outstanding shares, diluted		7,928,518			7,930,611			7,897,092
Shares outstanding at period end		7,939,024			7,917,489			7,983,866

Consolidated Capital
Tier 1 capital to risk-weighted assets		9.67	%		10.96	%		11.41	%
Common Equity Tier 1 (CET1) to risk-weighted assets		9.67			10.96			11.41
Total capital to risk-weighted assets		11.84			13.31			13.04
Tier 1 capital to average assets		8.30			8.81			9.01

Bank Capital
Tier 1 capital to risk-weighted assets		10.12			10.35			10.65
Common Equity Tier 1 (CET1) to risk-weighted assets		10.12			10.35			10.65
Total capital to risk-weighted assets		11.05			11.23			11.53
Tier 1 capital to average assets		8.63	%		8.33	%		8.42	%

⁽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.

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)

Reconciliations of Non-GAAP Financial Measures


	As of and for the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except share and per share data)	2020			2020			2019
Tangible common
Total shareholders' equity	$	139,417		$	128,703		$	122,157
Less:
Goodwill		24,191			19,686			23,239
Intangibles held for sale⁽¹⁾		3,000			3,000			—
Other intangibles, net		76			26			88
Tangible common equity	$	112,150		$	105,991		$	98,830

Common shares outstanding, end of period		7,939,024			7,917,489			7,983,866
Tangible common book value per share	$	14.13		$	13.39		$	12.38

Net income available to common shareholders	$	8,696		$	1,334		$	1,404
Return on tangible common equity (annualized)		31.02	%		5.03	%		5.68	%

Efficiency
Non-interest expense	$	12,644		$	14,647		$	14,659
Less: amortization		38			2			142
Less: loss on intangibles held for sale		—			553			—
Less: goodwill impairment		—			—			1,572
Adjusted non-interest expense	$	12,606		$	14,092		$	12,945

Net interest income	$	10,796		$	8,931		$	7,960
Non-interest income		15,427			7,767			8,586
Total income	$	26,223		$	16,698		$	16,546
Efficiency ratio		48.07	%		84.39	%		78.24	%

Gross revenue
Total income before non-interest expense	$	24,099		$	16,331		$	16,624
Plus: provision for (recovery of) loan losses		2,124			367			(78)
Gross revenue	$	26,223		$	16,698		$	16,546

Allowance to Bank originated loans excluding PPP
Total loans held for investment	$	1,424,160		$	1,042,478		$	938,005
Less: Loans acquired		123,786			—			—
Less: Paycheck Protection Program ("PPP") loans		191,676			—			—
Bank originated loans excluding PPP		1,108,698			1,042,478			938,005

Allowance for loan losses		10,354			8,242			7,575
Allowance for loan losses to bank originated loans excluding PPP		0.93	%		0.79	%		0.81	%

⁽¹⁾ Represents the intangible portion of assets held for sale

First Western Financial, Inc.

Consolidated Financial Summary (unaudited) (continued)


	As of and for the Three Months Ended
	June 30,			March 31,			June 30,
(Dollars in thousands, except share and per share data)	2020			2020			2019
Adjusted Net Income Available to Common Shareholders
Net income available to common shareholders	$	8,696		$	1,334		$	1,404
Plus: acquisition related expenses related to the branch acquisition		323			—			—
Plus: loss on intangibles held for sale		—			553			—
Plus: goodwill impairment		—			—			1,572
Less: income tax impact		78			115			390
Adjusted net income available to shareholders	$	8,941		$	1,772		$	2,586

Adjusted Earnings Per Share
Earnings per share	$	1.10		$	0.17		$	0.18
Plus: acquisition related expenses related to the branch acquisition		0.03			—			—
Plus: loss on intangibles held for sale		—			0.06			—
Plus: goodwill impairment		—			—			0.15
Adjusted earnings per share	$	1.13		$	0.23		$	0.33

Adjusted Diluted Earnings Per Share
Diluted earnings per share	$	1.10		$	0.17		$	0.18
Plus: acquisition related expenses related to the branch acquisition		0.03			—			—
Plus: loss on intangibles held for sale		—			0.05			—
Plus: goodwill impairment		—			—			0.15
Adjusted diluted earnings per share	$	1.13		$	0.22		$	0.33

Adjusted Return on Average Assets (annualized)
Return on average assets		2.25	%		0.43	%		0.50	%
Plus: acquisition related expenses related to the branch acquisition		0.07			—			—
Plus: loss on intangibles held for sale		—			0.14			—
Plus: goodwill impairment		—			—			0.41
Adjusted return on average assets		2.32	%		0.57	%		0.91	%

Adjusted Return on Average Shareholders' Equity (annualized)
Return on average shareholders' equity		25.44	%		4.09	%		4.61	%
Plus: acquisition related expenses related to the branch acquisition		0.72			—			—
Plus: loss on intangibles held for sale		—			1.34			—
Plus: goodwill impairment		—			—			3.89
Adjusted return on average shareholders' equity		26.16	%		5.43	%		8.50	%

Adjusted Return on Tangible Common Equity (annualized)
Return on tangible common equity		31.02	%		5.03	%		5.68	%
Plus: acquisition related expenses related to the branch acquisition		0.87			—			—
Plus: loss on intangibles held for sale		—			1.66			—
Plus: goodwill impairment		—			—			4.83
Adjusted return on tangible common equity		31.89	%		6.69	%		10.51	%

Exhibit 99.2

First Western Financial, Inc. The First, Western-Based Private Trust Bank Second Quarter 2020 Conference Call

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. Those following risks and uncertainties, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: the COVID-19 pandemic and its effects; integration risks in connection with acquisitions; 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 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 12, 2020 and other documents we file with the SEC from time to time. 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 2Q20 Record Quarter of Mortgage Production Record Financial Performance Strong Balance Sheet Growth and Stable Asset Quality .. Strong Balance Sheet growth with a combination of PPP, branch acquisition and organic growth .. Gross loans increased 36.3% from 1Q20 .. Total deposits increased 19.4% from 1Q20 .. Non-performing loans increased just $1.0 million, NPA to total assets down 15 bps to 0.67% .. Earlier than anticipated closing reduced deposit premium by 1% .. Smooth integration of new employees and clients .. Updated review of acquired loans prior to closing resulted in adversely graded loans not being purchased in the branch acquisition .. Branch consolidation to occur during 3Q20 Completion of Branch Purchase and Assumption Agreement .. Total residential mortgage originations of $344.3 million .. Net gain on mortgage loans of $10.2 million 3 .. Net income available to common shareholders of $8.7 million, or $1.10 EPS .. Gross revenue(1) of $26.2 million, up 57.0% from 1Q20 .. Book value, and tangible book value(1), per share increased 8.0% and 5.5%, respectively, from 1Q20 (1) See Non-GAAP reconciliation

Net Income Available to Common Shareholders and Earnings per Share 4 Net Income Available to Common Shareholders .. Record financial performance despite impact of COVID-19 pandemic .. Financial results impacted by $0.2 million (or $0.03 per diluted share)(1) in tax effected acquisition-related expenses related to branch acquisition .. Net income of $8.7 million, or $1.10 diluted earnings per share, in 2Q20 Earnings per Share (in thousands) $1,182 $438 $245 $2,586 $2,406 $2,572 $1,772 $8,941 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Net Income Adjustments to Net Income (1) (1) See Non-GAAP reconciliation (1) (1) $0.15 $0.05 $0.03 $0.33 $0.30 $0.32 $0.22 $1.13 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Net Income Adjustments to Net Income (1) (1) (1)

Improving Economic Trends in Colorado 5 Source: Trackthercovery.com

$966 $990 $1,018 $1,054 $1,337 $1,107 $1,494 2Q19 3Q19 4Q19 1Q20 2Q20 1Q20 2Q20 HFI Acquired Loans HFS Average Period End Loan Portfolio 6 Loan Portfolio Composition(2) .. Total loans held-for-investment (HFI) increased $381.7 million, or 36.6% from prior quarter  PPP contributed $191.7 million  Branch acquisition contributed $123.8 million .. Non-PPP organic loan growth, including Mortgage loans held for sale of $71.7 million .. Strongest growth in C&I, CRE, Construction, and Cash, Securities and Other portfolios (in thousands, as of quarter-end) Total Loans(2) (in millions) (1) Bank originated (2) Excludes deferred costs, and amortized premium/(unaccreted discount), net 2Q 2019 1Q 2020 2Q 2020 Cash, Securities and Other $149,503 $147,157 $371,111 Construction and Development 40,826 25,461 74,793 1 - 4 Family Residential 373,836 412,306 418,409 Non-Owner Occupied CRE 152,664 192,350 229,150 Owner Occupied CRE 112,660 121,138 117,426 Commercial and Industrial 108,516 144,066 213,271 Total Loans HFI $938,005 $1,042,478 $1,424,160 Mortgage loans held for sale 36,289 64,120 69,604 Total Loans $974,294 $1,106,598 $1,493,764 Loan Production & Net Loan Payoffs/Paydowns $191.7 $52.6 $55.4 $146.1 $122.5 $119.0 $44.7 $71.3 $82.7 $87.7 $71.8 2Q19 3Q19 4Q19 1Q20 2Q20 PPP⁽¹⁾ Production Net Loan Payoffs/Paydowns (in millions)

$967 $1,042 $1,092 $1,085 $1,309 $1,178 $1,407 2Q19 3Q19 4Q19 1Q20 2Q20 1Q20 2Q20 Total Deposits Aquired Deposits Average Period End Total Deposits 7 Deposit Portfolio Composition .. Total deposits increased $228.5 million, or 19.4%, from end of prior quarter .. Branch acquisition contributed $65.2 million in deposits at quarter end .. PPP contributed to $62.4 million in deposits at quarter end .. Growth almost entirely attributable to increases in noninterest-bearing and money market accounts .. Non-maturity deposits increased to 89.1% of total deposits in 2Q20 from 82.5% in 2Q19 2Q 2019 1Q 2020 2Q 2020(1) Money market deposit accounts $508,263 $671,641 $759,997 Time deposits 176,128 150,190 152,897 NOW 88,687 82,092 88,560 Savings accounts 2,833 3,923 7,415 Noninterest-bearing accounts 229,266 270,604 398,063 Total Deposits $1,005,177 $1,178,450 $1,406,932 (in thousands, as of quarter-end) Total Deposits (in millions) (1) PPP related deposits accounted for $62.4 million of total deposit balances at 6/30/20

Trust and Investment Management .. Total assets under management increased $115.9 million from March 31, 2020 to $5.75 billion at June 30, 2020 .. Increase was primarily attributable to improving market conditions $5,968 $6,116 $6,188 $5,636 $5,752 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Investment Agency Managed Trust 401(k)/Retirement Directed Trust Custody (in millions, as of quarter-end) 8

Paycheck Protection Program Overview 9 ($ in Millions) At or for the three months ended 6/30/20 Total Loans $204.6 Average Loan Size $0.3 Total Deposits $62.4 PPPLF Advances $204.3 Net Interest Margin Impact -12 bps .. $204.6 million in total PPP loans originated, including $12.9 million purchased PPP loans .. 281 new relationships added, total loans of $93.0 million .. $2.4 million (2) income remaining to be recognized (1) .. Amortizing PPP fees and loan origination expense over 24-month life of loans but expected to be recognized in the second half of 2020 as the borrowers apply for forgiveness Impact on 2Q20 Financials (2) (1) Includes $5.0 million in SBA fee income less $2.6 million of deferred loan origination expense (2) All numbers represented do not include the impact of taxes (3) The deferred loan origination expenses are recorded in non-interest expenses (Salaries and Benefits) and amortized through net interest income ($ in Millions) Net Interest Income Amortization of SBA Fee Income and Deferred Loan Origination Expense (3) $0.3 Interest Income from PPP loans, less PPPLF funding cost $0.3 Net Interest Income $0.6 Expense: Salaries & Employee Benefits Deferred Loan Origination Expense ($2.9) Net Impact of PPP $3.5

Non-interest Income $15,427 Net Interest Income $10,796 41.2% 58.8% Gross Revenue 10 (1) See Non-GAAP reconciliation 2Q20 Gross Revenue(1) .. Gross revenue(1) increased 57.0% from 1Q20 .. Strong year-over-year growth in both net interest income and non-interest income Gross Revenue(1) $16.5 $16.6 $16.2 $16.7 $26.2 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Wealth Management Capital Management Mortgage (in millions)

Net Interest Income & Net Interest Margin 11 Net Interest Income .. Net interest income increased 20.9% from 1Q20, due to three primary factors: $0.7 million from branch acquisition, $0.6 million from PPP loans and $0.6 million from higher average loan balances attributed to organic growth .. Net interest margin decreased to 3.10%, due to a 46 bp decline in earning asset yields .. Cost of deposits decreased 48 bps to 0.40% from 0.88% in 1Q20 .. Net interest margin, excluding impact of PPP(1), was 3.22% in 2Q20 Net Interest Margin 3.10% 3.10% 2.95% 2.91% 3.14% 3.22%⁽¹⁾ Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Net Interest Margin Adjusted Net Interest Margin $7,960 $7,940 $8,190 $8,931 $10,796 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 (in thousands) (1) See Non-GAAP reconciliation

$4,693 $4,824 $4,748 $4,731 $4,609 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Non-Interest Income 12 Total Non-Interest Income .. Non-interest income increased 98.6% from 1Q20 .. Increase primarily due to record quarter of net gain on mortgage loans .. Increase in risk management and insurance fees offset slight decline in trust and investment management fees Trust & Investment Management Fees $8,586 $8,788 $8,228 $7,767 $15,427 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Trust and Investment Management Fees Net Gain on Mortgage Loans Bank Fees Risk Management and Insurance Fees Income on Company-Owned Life Insurance Net Gain on Sale of Securities/Assets (in thousands) (in thousands)

Mortgage Operations 13 Mortgage Originations .. Record mortgage originations in 2Q20 .. Refi/Purchase mix of 73%/27% in 2Q20, compared to 63%/37% in 1Q20 and 30%/70% in 2Q19 .. Mortgage sale margins have increased by 27.8% from 2Q19 to 2Q20 to 81.5% Mortgage Loan Locks Profit Margin $155.11 $215.41 $196.99 $196.87 $344.35 $19.74 $16.87 $66.28 $31.18 $37.18 $- $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 $400.00 Millions Originations for Sale Originations for Portfolio $1.76 $1.29 $0.89 $0.71 $8.31 $3.28 $3.30 $2.62 $2.50 $10.20 54% 39% 34% 29% 81% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% $- $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 54% 39% 34% 29% 81% Millions Net Income Revenue Profit Margin $204.98 $221.02 $166.81 $394.33 $394.82 $- $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 $400.00 $450.00 2Q19 3Q19 4Q19 1Q20 2Q20 Millions

Non-Interest Expense and Efficiency Ratio 14 Total Non-Interest Expense .. Non-interest expense decreased 13.7% from 1Q20 .. Decrease was attributable to the capitalization of $2.9 million in PPP loan origination expense that will be amortized through net interest income over the expected 24-month life of the loans, or earlier as borrowers receive forgiveness. .. Non-interest expense in 2Q20 included $0.3 million in pretax expense related to branch acquisition .. Balance sheet growth and mortgage activity accelerated improvement in efficiency ratio .. Following branch consolidations in 3Q20, run rate for non-interest expense expected to range from $15.3-$15.7 million per quarter Operating Efficiency Ratio(1) 78.2% 80.6% 80.5% 84.4% 48.1% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 $1,572 $553 $323 $14,659⁽¹⁾ $13,422 $13,082 $14,647⁽¹⁾ $12,644⁽¹⁾ Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Non-Interest Expense Adjustments to Non-Interest Expense (in thousands) (1) See Non-GAAP reconciliation

Asset Quality 15 Non-Performing Assets/Total Assets .. Non-performing assets increased by $1.0 million, but declined as a percentage of total assets to 0.67% from 0.82% in 1Q20 .. Minimal charge-offs in the quarter .. $1.1 million discount based on fair value of loans added through branch acquisition Net Charge-Offs/Average Loans 0.00% 0.00% 0.03% 0.00% 0.00% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 1.13% 1.15% 1.03% 0.82% 0.67% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Asset Quality 16 .. $2.1 million provision expense resulting from an increase based on the additional variability surrounding the COVID modifications made during the quarter and increased economic uncertainty. .. Increased loan level reviews and portfolio monitoring .. Past due loans as a % of total loans remains steady ALLL/ Adjusted Total Loans(1) 0.81% 0.83% 0.79% 0.79% 0.93% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 0.0% 0.6% 0.6% 0.4% 0.5% 0.3% 0.0% 0.3% 0.0% 0.1% 0.1% 0.1% 0.1% 0.5% 0.4% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 30-59 60-89 90 + Total Past Due as a % of Total Loans (1) Adjusted Total Loans – Total Loans minus PPP loans and Acquired Loans

Loan Modification Overview 17 .. Modified ninety-eight loans totaling $176.9 million during 2Q20, including $30.8 million acquired with branch acquisition .. New deferral requests have slowed considerably, offering on exception basis only as of June 30 .. 90 day loan modifications represent loans added through branch acquisition 180 + Days 37 101-180 Days 9 30-100 Days 52 Length of Loan Modifications Loan Modification by Type (as of 6/30/20) Loan Balance Loan Count Maturity Extension and Payment Deferral $101.2 million 65 Payment Deferral Only $55.8 million 24 Maturity Extension, Payment Deferral, and Covenant Mod (ALL) $15.9 million 6 Covenant Modification Only $2.8 million 1 Maturity Extension Only $0.9 million 1 Maturity Extension and Covenant Modification $0.3 million 1

Loan Modification Overview 18 Portfolio Loan Level Reviews • Borrowers providing current financials and cash flow forecasts • Increased monitoring and oversight • Identify emerging issues early $1.83 $1.52 $1.77 $2.31 $2.45 $2.50 $12.40 $20.04 Other Miscellaneous⁽¹⁾ Professional, Scientific, and Technical Services Accommodation Educational Services Management of Companies and Enterprises Motor Vehicle and Parts Dealers Food Services and Drinking Establishments Real Estate and Rental and Leasing Modified C&I Loans by Industry Exposure Modified Loan Characteristics Commercial / Consumer Mix 76% / 24% Total Modified Loans $176.9 million Number of Loans 98 Average Loan Size $1.8 million Loan-to-Value (Avg) 48% Seasoning (Avg) 2.5 years Modified CRE Loans by Collateral Type $0.31 $2.35 $3.12 $3.68 $3.81 $8.12 $8.23 $9.00 $9.81 $11.03 $12.94 $14.43 1st DOT - 1-4 Family Dwelling Other (Commercial) Restaurant 1st DOT 5+ Units - Residential Dwelling Commercial Construction Other Commercial Property Commercial Office Building Motel Warehouse Strip Center Retail Office/Office Condo (in millions) (in millions) (1) Represents the aggregate of individual industries; no one industry is more than $1.0 million of Commercial loans

Near-Term Outlook and Expectations 19 .. Healthy loan pipeline should continue to drive organic loan growth in second half of 2020 .. Strong mortgage originations continuing in 3Q20 .. Net interest margin expected to expand as earning asset yields stabilize and deposit costs continue to decline .. Positive trends in fee income resulting from higher AUM .. Asset quality continues to show strength despite continuation of pandemic .. Initial synergies realized from branch acquisition

Appendix

Loan Portfolio Composition 21 Cash, Securities and Other ⁽¹⁾ 26% 1 - 4 Family Residential 30% Non-Owner Occupied CRE 16% Construction and Development 5% Owner Occupied CRE 8% Commercial and Industrial 15% Commercial 61% Consumer 39% $1.4 Billion (as of 6/30/20) Commercial vs. Consumer (1) PPP loans accounted for $204.6 million of total loans, including $12.9 million of acquired PPP at 6/30/20

Commercial Loans by Industry(2) 22 40.36% 12.57% 9.83% 6.86% 6.80% 4.56% 3.80% 3.64% 3.53% 3.31% 2.24% 1.13% 1.08% 0.30% Real Estate / Rental and Leasing Retail Trade Construction Other Miscellaneous⁽¹⁾ Educational Services Arts, Entertainment and Recreation Health Care and Social Assistance Professional, Scientific and Technical Services Accommodation and Food Services Management of Companies and Enterprises Manufacturing Finance and Insurance Mining, Quarrying and Oil and Gas Extraction Administrative and Support and Waste Management and Remediation Services 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% $785.2 Million (as of 6/30/20) Industry as a Percentage of Commercial Loans (as of 6/30/20) (1) Represents the aggregate of individual industries; no one industry is more than 2% of Commercial loans (2) Excludes PPP loans

CRE(1) Loans By Property Type 23 1-4 Family Construction 2% Other Construction & Land Development 16% 1st or 2nd DOT 5+ SFR Units 14% 1st & 2nd DOT- 1-4 Family Dwelling 1% Office/Office Condo 13% Commercial Office Building 9% Other Commercial 12% Hotel / Motel 3% Restaurant 1% Retail 12% Strip Center 4% Warehouse 13% (1) Commercial Real Estate including Owner Occupied, Non-Owner Occupied, and Construction and Development $421.4 Million (as of 6/30/20) Property Type as a Percentage of CRE Loans (as of 6/30/20)

. We require our CRE loans to be secured by seasoned and well-managed properties with adequate margins .. We generally obtain a guaranty from experienced owners and managers with outside cash flows and/or other assets .. Loan amounts generally do not exceed 80% or 75% of the property’s appraised value for owner- occupied and non-owner occupied, respectively .. Aggregate debt service ratios, including the guarantor’s cash flow and the borrower’s other projects, are required by policy to have a minimum annual cash flow to debt service ratio of 2.0x CRE Portfolio Characteristics and Underwriting 24 Portfolio Characteristics - CRE Loan Balances Outstanding (6/30/20) $421.4 million Number of Loans 219 Average Loan Size $1.9 million Loan-to-Value (Avg) 47.4% Seasoning (Avg) 3 years Net Charge-offs in 2019 & 2020 0.00% Underwriting Criteria

Exposure to Stressed Industries (as of 6/30/20) 25 Industry Exposure Outstanding Balances ($ in millions) % of Total Loans Unused Commitments ($ in Millions) Portfolio Characteristics Energy Related $8.4 0.6% $16.3 .. Indirect business or personal exposure to energy industry .. Collateral type: 54% IM accounts, 32% life insurance, 14% other assets Accommodations $17.7 1.2% $5.7 .. Portfolio consists of eight loans .. Largest loan is in prominent geographic region with multiple sources of repayment and personal guarantee Food Service, Drinking Establishments $9.8 0.7% $2.8 .. Portfolio consists of nineteen borrowers .. Average loan balance of approximately $517,000 .. Includes loans directly to restaurants and those with > 50% cash flows from restaurants

Capital and Liquidity Overview 26 Liquidity Funding Sources (as of 6/30/20) Liquidity Reserves: Total Available Cash $190,159,663 Unpledged Investment Securities $ 42,123,068 Borrowed Funds: Unsecured: Credit Lines $ 54,000,000 Secured: FHLB Available $402,470,791 FRB Available $ 1,174,905 Brokered Remaining Capacity $209,154,867 Total Liquidity Funding Sources $899,083,294 Loan to Deposit Ratio 101.1% Consolidated Capital Ratios (as of 6/30/20) 9.67% 9.67% 11.84% 8.30% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% Tier 1 Capital to Risk-Weighted Assets CET1 to Risk- Weighted Assets Total Capital to Risk-Weighted Assets Tier 1 Capital to Average Assets Tangible Common Equity / TBV Per Share(1) (in thousands) $91,662 $104,411 $105,991 $112,150 $11.50 $13.15 $13.39 $14.13 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $80,000 $90,000 $100,000 $110,000 $120,000 4Q18 4Q19 1Q20 2Q20 TCE TBV/Share (1) See Non-GAAP reconciliation

27 Non-GAAP Reconciliation Consolidated Efficiency Ratio For the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Non-interest expense $14,659 $13,442 $13,082 $14,647 $12,644 Less: Amortization 142 52 7 2 38 Less: Goodwill impairment 1,572 ---- Less: loss on assets held for sale --- 553 - Adjusted non-interest expense $12,945 $13,390 $13,075 $14,092 $12,606 Net interest income $7,960 $7,940 $8,190 $8,931 $10,796 Non-interest income 8,586 8,788 8,228 7,767 15,427 Less: Net gain on sale of securities - 119 --- Less: Net gain on sale of assets -- 183 -- Total income $16,546 $16,609 $16,235 $16,698 $26,223 Efficiency ratio 78.2% 80.6% 80.5% 84.4% 48.1% Consolidated Tangible Common Book Value Per Share As of the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Total shareholders' equity $122,157 $125,732 $127,678 $128,703 $139,417 Less: Goodwill 23,239 19,686 $19,686 $19,686 $24,191 Intangibles held for sale(1) — 3,553 3,553 3,000 3,000 Other intangibles, net 88 36 28 26 76 Tangible common equity 98,830 102,457 104,411 105,991 112,150 Common shares outstanding, end of period 7,983,866 7,983,284 7,940,168 7,917,489 7,939,024 Tangible common book value per share $12.38 $12.83 $13.15 $13.39 $14.13 (1) Represents the intangible portion of assets held for sale

28 Non-GAAP Reconciliation Wealth Management Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Total income before non-interest expense $12,550 $12,554 $12,534 $13,023 $13,114 Less: Net gain on sale of securities - 119 --- Less: Net gain on sale of assets -- 183 -- Plus: Provision for (recovery of) credit loss (78) 100 447 367 2,124 Gross revenue $12,472 $12,535 $12,798 $13,390 $15,238 Capital Management Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Total income before non-interest expense $798 $776 $815 $804 $788 Less: Net gain on sale of securities ----- Less: Net gain on sale of assets ----- Plus: Provision for (recovery of) credit loss ----- Gross revenue $798 $776 $815 $804 $788 Mortgage Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Total income before non-interest expense $3,276 $3,298 $2,622 $2,504 $10,197 Less: Net gain on sale of securities ----- Less: Net gain on sale of assets ----- Plus: Provision for (recovery of) credit loss ----- Gross revenue $3,276 $3,298 $2,622 $2,504 $10,197 Consolidated Gross Revenue For the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Total income before non-interest expense $16,624 $16,628 $15,971 $16,331 $24,099 Less: Net gain on sale of securities - 119 --- Less: Net gain on sale of assets -- 183 -- Plus: Provision for (recovery of) credit loss (78) 100 447 367 2,124 Gross revenue $16,546 $16,609 $16,235 $16,698 $26,223

29 Non-GAAP Reconciliation Adjusted net income available to common shareholders For the Three Months Ended, (Dollars in thousands, except per share data) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Net income available to common shareholders $1,404 $2,406 $2,572 $1,334 $8,696 Plus: acquisition related expense including tax impact ---- 245 Plus: goodwill impairment including tax impact 1,182 ---- Plus: loss on intangibles held for sale including tax impact --- 438 - Adjusted net income to common shareholders $2,586 $2,406 $2,572 $1,772 $8,941 Adjusted earnings per share For the Three Months Ended, (Dollars in thousands, except per share data) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Earnings per share $0.18 $0.30 $0.32 $0.17 $1.10 Plus: acquisition related expenses including tax impact ---- 0.03 Plus: goodwill impairment including tax impact 0.15 ---- Plus: loss on intangibles held for sale including tax impact --- 0.05 - Adjusted earnings per share $0.33 $0.30 $0.32 $0.22 $1.13 Allowance for loan losses to loans excluding PPP As of (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Gross loans 938,005 924,356 996,559 1,042,478 1,424,160 Less: Branch acquisition ---- 123,786 Less: PPP loans ---- 191,676 Loans excluding acquired and PPP 938,005 924,356 996,559 1,042,478 1,108,698 Allowance for loan losses 7,575 7,675 7,875 8,242 10,354 Allowance for loan losses to loans excluding PPP 0.81% 0.83% 0.79% 0.79% 0.93% Total Non-Interest Expense adjusted for Non-Operating items For the Three Months Ended, (Dollars in thousands) June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Net income available to common shareholders $14,659 $13,422 $13,082 $14,647 $12,644 Less: acquisition related expense ---- 323 Less: goodwill impairment 1,572 ---- Less: loss on intangibles held for sale --- 553 - Total Non-Interest Expense adjusted for Non-Operating items $13,087 $13,422 $13,082 $14,094 $12,321

30 Non-GAAP Reconciliation Adjusted net interest margin For the Three Months Ended June 30, (Dollars in thousands) Average Balance Interest Earned/Paid Average Yield/Rate Interest-bearing deposits in other financial institutions 76,463 44 PPP adjustment 20,587 25 Available-for-sale securities 48,614 224 PPP adjustment -- Loans 1,268,797 12,202 PPP adjustment (152,893) (718) Adjusted total Interest-earning assets 1,261,568 11,777 Interest-bearing deposits 1,319 PPP adjustment - Federal Home Loan Bank Topeka and Federal Reserve borrowings 129 PPP adjustment (39) Subordinated notes 226 Adjusted total interest-bearing liabilities 1,635 Net interest income 10,142 Adjusted net interest margin 3.22%