Ah, I read this as an answer to a question of whether it was warm or cold.

Person 1: "I went to the lake last weekend"

Person 2 (wondering if it was warm or cold): "What did you do?"

1: "we went swimming"

2: "Ah, it was warm then"

So my translation was «Так было тепло». Is that a bad translation?

Потом было тепло can translate as "Then, it was warm," meaning as opposed to prior to then.

What's wrong with: потом было тепло? The hing shows потом when you hoover over "then"