 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 revenue1 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 Westerns presence in Denver market; acquired 123.3 million in loans and 65.2 million in deposits as of June 30, 20201 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, July 23, 2020 GLOBE NEWSWIRE -- 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 expense1 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 shareholders2 8,941 1,772 2,586 Basic earnings per common share 1.10 0.17 0.18 Adjusted basic earnings per common share2 1.13 0.23 0.33 Diluted earnings per common share 1.10 0.17 0.18 Adjusted diluted earnings per common share2 1.13 0.22 0.33 Return on average assets annualized 2.25 0.43 0.50 Adjusted return on average assets annualized2 2.32 0.57 0.91 Return on average shareholders equity annualized 25.44 4.09 4.61 Adjusted return on average shareholders equity annualized2 26.16 5.43 8.50 Return on tangible common equity annualized2 31.02 5.03 5.68 Adjusted return on tangible common equity annualized2 31.89 6.69 10.51 Net interest margin 3.10 3.14 3.10 Efficiency ratio2 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 2020RevenueGross 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 IncomeNet 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 MarginNet 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 IncomeNon-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 ExpenseNon-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. 