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An Integrated Investment Approach USA Swimming

An Integrated Investment Approach USA Swimming. For USA Swimming, Inc. September 15, 2011. First Western Investment Management Services.

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An Integrated Investment Approach USA Swimming

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  1. An Integrated Investment Approach USA Swimming

  2. For USA Swimming, Inc. September 15, 2011 First WesternInvestment Management Services

  3. The information provided in this presentation is for illustrative purposes only. Actual individual account results may differ from any performance shown herein. All performance is shown gross of fees. Past performance is not a guarantee of future results. “Risk” as used in this presentation is presented on the historic volatility of returns, generally measured as a function of standard deviation from the mean investment return. Clients should note, however, that there is substantial risk of a permanent loss of capital in most, if not all, asset classes presented herein. DISCLOSURE INFORMATION

  4. Agenda • About First Western • Investment Management • Asset Allocation • Strategic and Tactical • Russell Partnership • Working with USA Swimming

  5. About First Western • A unique Western-based private bank offering integrated wealth management services • Nine (9) locations throughout the western United States • As of June 2011, over $4 billion in assets under management, advice and administration and over $630 million in bank assets • Inc. 500/5000’s fastest growing companies in 2008, 2009, and 2010, consistently among the top ranked bank/bank holding company on the list • Best Places to Work – Denver Business Journal, 2008 finalist, Phoenix Business Journal 2010 finalist • Fastest Growing Private Companies (Flight II) 2009-2010 Denver Business Journal -- #4 • Who’s Lending? -- Denver Business Journal, 2010- # 1 bank with overall loan and lease portfolio growth among Denver-based banks • Ranked as the #8 Denver-Area Trust Organization, based on the total Colorado fiduciary assets, according to the Denver Business Journal • CoBIZ magazine’s Top Company 2010 Finalist

  6. Our Investment Management Platform • Over $4 billion in assets under management, advice and administration (60% HNW and 40% Institutional.) • Expert research combined with access to world-class partners • Centralized, process-driven decision-making • Global exposure across asset classes • Average of 29 years of investment management experience on Investment Policy Committee

  7. Asset Allocation • Cornerstone to Our Approach • It’s about understanding risk and reward • Understanding the difference between strategic and tactical allocation • It's science and art - not a black box approach

  8. High Potential Return Risk Low High What is the Challenge? Achieving increased returns without increasing risk

  9. Strategic Allocation • Calls for setting target allocations and then periodically rebalancing (realigning the weighting of portfolio assets) back to those targets as investment returns skew the original asset allocation percentages. • Primary goal of the strategic allocation process is to determine the long-term exposure to the available asset classes and create an asset mix that provides the optimal balance between expected risk and return.

  10. The Importance of Diversification 2010 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 INT’L 8.06 LARGE CAPVALUE 38.35 REAL ESTATE 35.26 LARGE CAPVALUE 35.18 LARGE CAPGROWTH 38.71 SMALL CAP GROWTH 43.09 REAL ESTATE 26.35 SMALL CAP VALUE 14.03 BONDS 10.26 SMALL CAP GROWTH 48.54 REAL ESTATE 31.57 INT’L 14.02 REAL ESTATE 35.06 LARGE CAPGROWTH 11.81 BONDS 5.24 LARGE CAPGROWTH 37.21 SMALL CAP GROWTH 29.09 BESTPERFORMANCE REAL ESTATE 3.17 LARGE CAP 37.77 LARGE CAPGROWTH 23.12 LARGE CAP 32.85 LARGE CAP 27.02 LARGE CAPGROWTH 33.16 SMALL CAP VALUE 22.83 REAL ESTATE 13.93 REAL ESTATE 3.81 SMALL CAP 47.25 SMALL CAP VALUE 22.25 REAL ESTATE 12.15 INT’L 26.86 INT’L 11.63 SMALL CAPVALUE -28.92 SMALL CAP GROWTH 34.47 REAL ESTATE 27.58 SMALL CAP 26.85 INT’L 32.46 LARGE CAPGROWTH 2.66 LARGE CAPGROWTH 37.19 LARGE CAP 22.45 SMALL CAP VALUE 31.78 INT’L 20.33 INT’L 27.30 BONDS 11.63 BONDS 8.44 SMALL CAP VALUE -11.43 SMALL CAP VALUE 46.03 INT’L 20.70 LARGE CAPVALUE 7.05 SMALL CAP VALUE 23.48 SMALL CAP GROWTH7.05 SMALL CAP -33.79 LARGE CAP 28.43 LARGE CAP 0.38 SMALL CAP GROWTH 31.04 LARGE CAPVALUE 21.64 LARGE CAPGROWTH 30.49 LARGE CAPVALUE 15.63 SMALL CAP 21.26 LARGE CAPVALUE 7.01 SMALL CAP 2.49 LARGE CAPVALUE -15.52 INT’L 39.17 SMALL CAP 18.33 LARGE CAP 6.27 LARGE CAPVALUE 22.25 BONDS 6.97 LARGE CAPVALUE -36.85 SMALL CAP VALUE 24.50 LARGE CAPGROWTH 16.70 REAL ESTATE 27.99 SMALL CAP VALUE -1.55 SMALL CAP 28.44 SMALL CAP VALUE 21.37 SMALL CAP 22.36 BONDS 8.69 LARGE CAP 20.91 SMALL CAP -3.02 LARGE CAPVALUE -5.59 INT’L -15.66 REAL ESTATE 37.14 LARGE CAPVALUE 16.49 LARGE CAPGROWTH 5.26 SMALL CAP 18.37 LARGE CAP 5.77 LARGE CAP -37.60 LARGE CAP 16.1 SMALL CAP 27.17 SMALL CAP -1.82 SMALL CAP VALUE 25.75 SMALL CAP 16.49 REAL ESTATE 20.29 SMALL CAP GROWTH 1.23 LARGE CAPVALUE 7.35 LARGE CAP -7.79 SMALL CAP GROWTH -9.23 SMALL CAP -20.49 LARGE CAPVALUE 30.03 SMALL CAP GROWTH 14.31 SMALL CAP VALUE 4.71 LARGE CAP 15.46 LARGE CAPVALUE -0.17 REAL ESTATE -37.73 SMALL CAP VALUE 20.58 LARGE CAPVALUE -1.99 BONDS 18.47 SMALL CAP GROWTH 11.26 SMALL CAP GROWTH 12.95 SMALL CAP -2.55 BONDS -0.82 INT’L -13.96 LARGE CAP -12.45 LARGE CAP -21.65 LARGE CAP 29.89 LARGE CAP 11.40 SMALL CAP 4.55 SMALL CAP GROWTH13.35 SMALL CAP -1.57 LARGE CAPGROWTH -38.44 LARGE CAPVALUE 15.50 LARGE CAPVALUE 19.69 SMALL CAP GROWTH -2.43 REAL ESTATE 15.25 INT’L 6.36 BONDS 9.65 SMALL CAP VALUE -6.45 SMALL CAP VALUE -1.49 LARGE CAPGROWTH -22.42 LARGE CAPGROWTH -20.42 LARGE CAPGROWTH -27.89 LARGE CAPGROWTH 29.75 LARGE CAPGROWTH 6.30 SMALL CAPGROWTH 4.15 LARGE CAPGROWTH 9.07 SMALL CAP VALUE -9.78 SMALL CAPGROWTH -38.54 INT’L 7.75 BONDS 5.93 BONDS 6.54 WEAKEST PERFORMANCE BONDS -2.92 INT’L 11.55 BONDS 3.63 INT’L 2.06 REAL ESTATE -17.51 REAL ESTATE -4.62 SMALL CAP GROWTH -22.43 INT’L -21.21 SMALL CAP GROWTH -30.26 BONDS 4.10 BONDS 4.34 BONDS 2.43 BONDS 4.33 REAL ESTATE -15.69 INT’L -43.06 Source: Russell Investments.

  11. Benefits of A Diversified Portfolio Expected Return: 7.18 STDEV: 11.83 Sharpe Ratio: 0.61 Source: Ibbotson Associates, First Western Trust Bank

  12. Tactical Allocation • Centers on altering investment proportions to take advantage of differences in expected performance of various asset classes. • Allows for a range for percentiles (e.g. Stocks 40-50%) where managers evaluate the relative performance of each asset class and adjust the exposure based on expectations.

  13. Rebalancing $296k $292k $210k $96k NR- Never Rebalanced R12- Rebalanced Annually Source: Ibbotson Associates, First Western Trust Bank

  14. About Russell • Founded in 1936 • $163.4 billion in assets under management (6/30/11) • Approximately $786 billion* in assets under advisement (9/30/08) • 2,300 institutional clients • 6,157 investment products scrutinized annually • Fewer than 4% of researched money managers make it into our funds • First Western, through the acquisition of Reber Russell, has partnered with Russell since 1989

  15. Advising Clients Worldwide Representative Client List AT&T , Inc. Barclays Bank Bill and Melinda Gates Foundation Trust Boeing CHS Inc. Caterpillar Coca-Cola Bottling Co. Delta Airlines Federal Express Canada Limited Toyota Motor Pension Fund Build investment strategies Implement disciplined approach Help meet financial goals and obligations Representative client list as of 02/2011. Clients may contract for a variety of services from Russell Investment Group. For more information on the selection criteria, please refer to the disclosure slide. While the manager selection process utilized for Russell Funds is similar to the guidance and institutional fund management discipline that Russell provides to the clients listed, those clients have not invested in Russell Funds.

  16. The Goal of Our Investment Process Russell’s goal is to deliver above-average returns with above-average consistency Multi-style: 19 potential investment styles Multi-manager:Up to 49 independent money managers Multi-asset:Up to 4 asset classes The Heart of Russell’s difference: Institutional-quality money managers that are often not available to retail mutual fund investors

  17. Value of Diversification 1993-2009 Large CapRussell 1000® Index Large Cap GrowthRussell 1000® Index Large Cap ValueRussell 1000® Value Index Small CapRussell 2000® Index Small Cap GrowthRussell 2000® Growth Index Measures the performance of the 1,000 largest companies in the Russell 3000® Index, representative of the US large capitalization securities market. Measures the performance of those Russell 1000® Index securities with higher price-to-book ratios and higher forecasted growth values, representative of US securities exhibiting growth characteristics. Measures the performance of those Russell 1000® Index securities with lower price-to-book ratios and lower forecasted growth values, representative of US securities exhibiting value characteristics. Measures the performance of the 2,000 smallest companies in the Russell 3000® Index, representative of the US small capitalization securities market. Measures the performance of those Russell 2000® Index securities with higher price-to-book ratios and higher forecasted growth values, representative of US securities exhibiting growth characteristics. Small Cap ValueRussell 2000®Value Index InternationalMSCI® EAFE Index Real EstateNARIET EquityReit Index BondsBarclays Capital U.S.Aggregate Bond Index Measures the performance of those Russell 2000® Index securities with lower price-to-book ratios and lower forecasted growth values, representative of US securities exhibiting value characteristics. An index, with dividends reinvested, representative of the securities markets of twenty developed market countries in Europe, Australasia, and the Far East. An index, with dividends reinvested, representative of tax-qualified REITS listed on the New York Stock Exchange, American Stock Exchange, and the NASDAQ National Market System. An index, with income reinvested, generally representative of intermediate-term government bonds, investment-grade corporate debt securities, and mortgage-backed securities.

  18. The Russell DifferenceQualitative and quantitative methodology People Factors Leadership Quality of Personnel Continuity of Team Competitive Drive Process Factors Strength of Philosophy Technological Superiority Implementation Skill Risk-management Techniques Qualitative75% Expectations Validation Portfolio Structure Validation of Style Adherence to Philosophy Role in Funds Scenario Risks Performance Characteristics Excess Returns vs. Indexes Peer Group Comparisons Information Ratios Source of Excess Returns Quantitative25% Confirmation

  19. 8,000 5,200 500 200 The Russell Difference Russell’s Manager Selection Process Total Manager Products Monitored By Russell Investment Products Continually Monitored and Researched Managers With A Primary ‘Hire’ Rating Manager Products Used in Russell Funds

  20. Russell Sample PortfolioBalanced Model Strategy for Russell funds † This represents the role of the Funds’ investment advisor, Russell Investment Management Company (“RIMCo”), in exercising investment discretion over a portion of the Fund’s assets RIMCo has determined not to assign to a money manager pursuant to a proprietary “select holdings” investment strategy as more fully described in the Funds’ prospectuses. This does not represent the other aspects of RIMCo’s role as investment advisor of the Funds. Model Strategies represent target allocations of Russell funds; these models are not managed and cannot be invested in directly. You and your financial advisor may work to combine selected funds that differ from the illustrated combinations depending upon individual investment options. Managers Current as of July 1, 2010.

  21. Investment Solutions Implementation Investment Portfolio < $100,000 Bank Deposits, CDs Investment Portfolio - $100,000 - $250,000 Single Style-Allocation Fund Frank Russell Company Lower cost LifePoints Funds Greater diversification Investment Portfolio - $250,000 - $750,000 US Swim Asset Allocation Frank Russell Company Master IPS – lower cost Institutional Funds Investment Portfolio – Over $750,000 Customized Asset Allocation Frank Russell Company Customized IPS Funds Institutional pricing

  22. First Western Fee Structure LSC Investment Size Solution Fee Structure Fees IPS $100-$250,000 Investment Mgmt Fee .50% Stand alone Average LifePoints Fund 1.03% Total Approx. Fee 1.53% $250-$750,000 Investment Mgmt Fee .75% Master Average Fund Expense .77% Total Approx. Fee 1.52% Over $750,000 Investment Mgmt Fee .75% Stand alone Average Fund Expense .77% Total Approx. Fee 1.52%

  23. Together With Russell, We Bring You… • Investments designed to address your objectives • Asset allocation • Manager selection and monitoring • Research and development • Investment education

  24. Questions

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