Western Financial Group2008 Year End Financial Results

Conference Call

March 20, 2009

Forward-Looking StatementsThis presentation contains certain forward-looking statements. Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes and plans and objectives of or involving Western Financial Group Inc. (the “Company”) or its subsidiaries. Many of these statements can be identified by looking for words such as ‘‘believe’’, ‘‘expects’’, ‘‘expected’’, ‘‘will’’, ‘‘intends’’, ‘‘projects’’, ‘‘anticipates’’, ‘‘estimates’’, ‘‘continues’’ or similar words. The Company believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties only some of which are described herein. Many factors could cause the Company’s actual results, performance or achievements to, or future events or developments to, differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risk factors, which are discussed in greater detail in the ‘‘Risk Factors’’ section of the prospectus. Any forward-looking statements are made as of the date hereof and the Company does not assume any obligation to publicly update or revise such statements to reflect new information, subsequent events or otherwise.Non-GAAP MeasuresThroughout this presentation, the Company may use the term ‘‘operating income’’ to refer to earnings, including investment income, before interest expense, taxes, depreciation and amortization of intangible and capital assets, excluding gain (loss) from the sale of assets and income (loss) from equity investments. The Company uses ‘‘operating income’’ to assist it in measuring corporate performance before the costs of capital and amortization of capital and intangible assets. Operating income is not a measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP. Therefore, this measure may not be comparable to similar measures presented by other issuers and investors are cautioned that it should not be used as an alternative to ‘‘net income’’ or other measures of financial performance calculated in accordance with GAAP.

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Today’s Remarks• Operational progress in 2008

• Top achievements and disappointments in 2008

• 2008 financial review

• Priorities for 2009

Operational Progress in 2008

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WFG Agency Network• Same store customer count +3.5%• Same store sales +8.9%• Soft pricing market continued - bottomed out

in Q4• Deteriorating loss ratios at insurance

companies in 2nd half cause adjustment of $1.0 million to 2008 profit share commission estimates

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WFG Agency NetworkAcquisitions:

• Southern• Simpson• Woodland• Dunn• Vet’s• Boyd • Bakes-Jarvie (Jan 1/09)

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Western Life Assurance• Sales and production increases – all lines• Certificate count growth 11.5% in 2008• Bolt-on product for network is at 6,400+ policies.

Target was 20,000 by Q2/08, extended through 2008 Y/E - has flattened. Target of 7,500 for Y/E 2009

• Western & Affiliates account for $3.2 million of 2008 net premium revenue

• Smooth CEO transition

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Bank West

• Loan book stable at $273.4 MM – capacity held for AgriFinancial

• AgriFinancial will add $80 MM in 2009

• Non-performing loans – 1.2% at year end

• Specific provisions at 37 bps

• Overspent on new banking platform

• Bruce Ratzlaff takes helm in November

Top 2 Achievements in 2008

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Top 2 Achievements in 2008

• Strong market share gains at Network

• Cross sales between WFG/Western Life

Top 4 Disappointments in 2008

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Top 4 Disappointments in 2008

• “Lost Year” at Bank West – delay in AgriFinancial approvals

• Equity portfolio write-downs – liberalization of policies aggravated the loss

• Execution delays on acquisitions

• Collapse of share price

2008 Financial Review

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Total Revenue

125

114

20

64

3342

2822

83

0

20

40

60

80

100

120

140

2000

2001

2002

2003

2004

2005

2006

2007

2008

($ M

illi

on

s)

CAGR 25.7%

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Overall2008 2007

Revenue ($)

Income from Equity Investments ($)

Net Income ($)

Earnings per share ($) – Basic

– Diluted

124,855

2,172

6,548

0.05

0.05

114,126

2,172

12,213

0.24

0.22

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The Network

2008 2007

Commission & other customer revenue ($)

75,424 66,408

Operating expenses ($) 54,710 46,613

Operating income ($) 20,714 19,795

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Bank West

2008 2007

Interest & investment income ($) 18,596 13,805Net interest & investment income ($) 6,041 4,596

Operating & provision expenses ($) 4,804 3,506

Operating income/loss ($) 1,237 1,090

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Non Performing LoansPersonal $604,009

Commercial $10,992

Mortgages $1,303,180

Leases $940,185

TOTAL $2,858,366

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Western Life Assurance

2008 2007

Premium income ($) 31,309 27,348

Investment income ($) 1,614 2,748

Policyholder benefits ($) 14,789 13,934

Operating expenses ($) 13,907 12,102

Operating income ($) 4,227 4,060

Impairment on AFS Investments (2,505) -

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Corporate & All Other

2008 2007

Other revenues ($) 1,959 3,817

Operating expenses ($) 9,223 9,130

Operating loss ($) (7,264) (5,313)

Impairment on AFS Investments (1,542) -

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Western Financial GroupHistorical Consolidated ROE

1.9 1.8

8.1

5.6

7.28.3

7.5 8.1 7.9

0123456789

2000

2001

2002

2003

2004

2005

2006

2007

2008

Per

cen

t

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Earnings Per Share

0.24

0.05

0.08 0.08

0.18

0.11

0.17

0.03

0.22

0

0.05

0.1

0.15

0.2

0.25

0.3

2000

2001

2002

2003

2004

2005

2006

2007

2008

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What Could Have Been… 2008

Net income before the following: $15,122

Short fall in contingent (1,000)

Reduction in equity investment income (1,500)

Reduction in dividends (1,700)

Impairment on equity investments (2,053)

Impairment of AFS preferred shares (1,325)

Impairment of AFS equities (2,505)

Change in tax expense 1,509

Net income for the year 6,548

Priorities for 2009

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2009 Priorities• Manage NPLs at Bank West• Internal growth focus – same store sales, cross

sales, PPCA• Increasing ownership in partner company – HED• Managing costs• Re-establishing profitability• Enhancing brand and reputation

Questions

…because we live here.