Highlights for the Third Quarter of Fiscal Year 2021 (all quarterly comparisons in this document refer to the second quarter of fiscal year 2021, except as noted)

  • Net income of $58.7 million, or $1.06 per diluted share, up from $51.3 million, or $0.93 per diluted share
  • Net interest income1 of $99.1 million, down from $104.4 million, with net interest margin1 of 3.23%, down from 3.51%
  • Noninterest income of $19.4 million, up from $17.2 million
  • Noninterest expense of $60.5 million, up from $59.1 million
  • Total loans of $8.48 billion, down $533.6 million, including a reduction of $201.9 million in Paycheck Protection Program ("PPP") loans
  • Total deposits of $11.54 billion, down $26.3 million, and average deposits up $292.9 million
  • Allowance for credit losses ("ACL") of $270.3 million, down from $296.0 million, and a ratio of ACL to total loans of 3.19%, down from 3.28%
  • Nonaccrual loans of $210.1 million, down $74.4 million, or 26.2%
  • Net charge-offs of $5.2 million, or 0.24% of average total loans (annualized), down from $7.8 million and 0.34%, respectively
  • Total capital ratio of 16.0%, up from 15.1%; tier 1 capital ratio of 14.5%, up from 13.5%; common equity tier 1 capital ratio of 13.7%, up from 12.8%
  • Return on average common equity of 21.2%, up from 19.8%
  • The Company's Board of Directors declared a quarterly dividend of $0.05 per share

Great Western Bancorp, Inc. (NYSE: GWB) today reported net income of $58.7 million, or $1.06 per diluted share, for the third quarter of fiscal year 2021, compared to net income of $51.3 million, or $0.93 per diluted share, for the second quarter of fiscal year 2021.

"I am excited about our continued momentum this quarter," said Mark Borrecco, President and Chief Executive Officer. "We made significant progress in improving our asset quality, reflected in our $74.4 million reduction of nonaccrual loans. This brings our year to date nonaccrual reduction to $114.8 million, a 35.3% decrease. Net charge-offs of $5.2 million for the quarter highlight we are effectively managing the tradeoffs between loan workouts and loss avoidance. Criticized loans also decreased $199.2 million this quarter. Our allowance for credit losses remains appropriate at 3.19% of total loans following a $20.7 million release this quarter. Our capital levels improved once again, and I am very pleased we are able to increase the dividend this quarter from $0.01 to $0.05.

"In parallel we are investing in our people and processes. Our Small Business Center roll out continues on track, and we expect to have all of our markets on the new platform by the end of September. This enhancement will free up significant banker capacity and make it easier for our commercial and ag bankers to grow their mid-size relationship base, driving better portfolio diversity and revenue. Our Treasury Management improvements are progressing as well as our upgrades to our lending process that will accelerate our commercial and ag growth plans."

Impact and Response to COVID-19 Pandemic

We remain focused on keeping our employees safe and our bank running effectively to serve our customers and continue to monitor the continued spread of COVID-19 and its Delta variant. Our branches have been reopened across our footprint, and we are targeting a full return to work on September 7th that still provides for flexible remote work optionality and adherence to CDC guidelines in the office. For our customers, we have supported PPP, having provided over 4,800 loans for $727.3 million in the first round followed by over 4,100 loans for $249.5 million in the second round. We have processed over 4,300 loans totaling $612.0 million related to PPP forgiveness, resulting in an outstanding balance of $364.9 million as of June 30, 2021. Additionally, we granted both full and partial payment deferrals to help provide relief from COVID-19, which resulted in a peak of $1.69 billion of loans on deferral as of the third quarter of fiscal year 2020 that decreased to $19.7 million as of April 16, 2021 and to $0.2 million as of July 16, 2021.

Net Interest Income and Net Interest Margin1

Net interest income was $99.1 million for the quarter, a decrease of $5.3 million, while net interest margin was 3.23%, a 28 basis point decrease from 3.51%. Adjusted net interest income2, which includes derivative interest expense recognized in noninterest income, was $95.9 million, a decrease of $5.3 million, and adjusted net interest margin2 was 3.13%, a 27 basis point decrease from 3.40%. Interest income was lower by $6.4 million as loan interest decreased by $6.9 million while securities and other interest income increased by $0.5 million. Loan interest reflects a $3.2 million decrease in PPP interest and fees and a $5.5 million decrease largely due to lower loan volumes, partially offset by a $1.8 million increase in recoveries of interest on nonaccrual loans. The decrease in interest income was partially offset by a $0.4 million decrease in time deposit interest combined with a net $0.6 million decrease in interest on other interest bearing deposits. The decrease in time deposit interest resulted from a decrease in volumes and an 11 basis point decrease in yield to 0.41%, while the decrease in interest on other interest bearing deposits was driven primarily by a 4 basis point decrease in yield of interest bearing deposits to 0.13%. The 27 basis point decrease in adjusted net interest margin2 was driven by a 21 basis point decrease from excess liquidity and a net 10 basis point decrease from loans related to lower PPP income, lower portfolio yields, and higher recoveries of interest on nonaccrual loans, all partially offset by a 4 basis point decrease in total deposit yield.

Noninterest Income

Noninterest income was $19.4 million for the quarter, an increase of $2.2 million from the prior quarter. The increase was driven by a $0.4 million increase in service charges from increases in account activity and interchange fees, a $0.8 million increase from the additional investments in bank owned life insurance purchased, and a net $2.3 million benefit from loans and derivatives accounted for at fair value related to credit risk, all partially offset by a $1.5 million decrease in mortgage revenue from slower refinancing activity.

Noninterest Expense

Noninterest expense was $60.5 million for the quarter, an increase of $1.4 million from the prior quarter. The increase was driven by a $1.1 million increase in salaries and benefits due to accrued incentives, a $0.5 million increase in data processing costs related to software maintenance and upgrades, and a $0.5 million increase in consulting and business development costs. These were partially offset by a $0.7 million decrease in other real estate owned operating costs due the sale of an OREO property.

The efficiency ratio2 was 50.9% for the quarter, compared to 48.4% for the prior quarter.

Provision for Income Taxes

Income tax expense was $18.3 million for the quarter, an increase of $3.6 million from the prior quarter, yielding an effective rate of 23.7% compared to 22.2%.

Asset Quality

The ACL was $270.3 million as of June 30, 2021, a decrease of $25.7 million from $296.0 million from the prior quarter. The provision for credit losses on loans resulted in a $20.7 million benefit for the quarter, compared to a $5.0 million benefit in the prior quarter, due to lower loan volumes and improved economic factors this quarter.

The ratio of ACL to total loans was 3.19% as of June 30, 2021, a decrease from 3.28% in the prior quarter. Excluding PPP loans, the ratio was 3.33% for the current quarter and 3.50% for the prior quarter.

Net charge-offs were $5.2 million, or 0.24% of average total loans (annualized) for the quarter, down $2.6 million and 10 basis points from the prior quarter, respectively.

Included within total loans are approximately $545.1 million of loans with long-term, fixed rate structures for which management has elected the fair value accounting option, down from $568.9 million in the prior quarter. These loans are excluded from CECL and the ACL, but management has estimated that approximately $23.3 million of the fair value adjustment for these loans relates to credit risk, which is 4.28% of the fair value option loans and 0.29% of total loans excluding PPP loans.

Nonaccrual loans were $210.1 million as of June 30, 2021, a decrease of $74.4 million from $284.5 million in the prior quarter, largely driven by successful workouts leading to an agricultural relationship being upgraded to accruing status and multiple repayments of agricultural and commercial loans.

Classified loans were $612.2 million as of June 30, 2021, a decrease of $61.7 million from $673.9 million in the prior quarter, commensurate with the repayment of multiple nonaccrual loans.

Total other repossessed property balances were $11.5 million as of June 30, 2021, a decrease of $6.0 million from the prior quarter due to the sale of an OREO property previously mentioned above.

A summary of total credit-related charges incurred during the current and comparable nine month periods and current, previous and comparable quarters is presented below:

 

GREAT WESTERN BANCORP, INC.

 

 

 

 

 

 

Summary of Credit-Related Charges (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended:

 

For the three months ended:

Item

Included within F/S Line Item(s):

June 30, 2021

June 30, 2020

 

June 30, 2021

March 31, 2021

June 30, 2020

 

 

(dollars in thousands)

(Reversal of) provision for credit losses ¹

(Reversal of) provision for credit losses ¹

$

(13,800

)

 

$

101,539

 

 

$

(20,699

)

 

$

(5,000

)

 

$

21,641

 

Increase provision for unfunded commitments reserve ¹

Other noninterest expense ¹

 

 

2,859

 

 

 

 

 

 

2,215

 

Net other repossessed property charges (income)

Net (gain) loss on repossessed property and other related expenses

(469

)

 

8,508

 

 

(760

)

 

(54

)

 

2,475

 

Net (recovery) reversal of interest income on nonaccrual loans

Interest income on loans

(6,134

)

 

4,164

 

 

(2,514

)

 

(707

)

 

1,070

 

Net realized credit loss on derivatives

Change in fair value of FVO loans and related derivatives

210

 

 

1,709

 

 

 

 

 

 

1,709

 

Loan fair value adjustment related to credit

Change in fair value of FVO loans and related derivatives

(2,674

)

 

35,949

 

 

(4,111

)

 

(27

)

 

23,292

 

Total credit-related charges

 

$

(22,867

)

 

$

154,728

 

 

$

(28,084

)

 

$

(5,788

)

 

$

52,402

 

1 Beginning in the first quarter of fiscal year 2021, increase (decrease) in unfunded commitment reserve is included in provision for credit losses.

We continue to evaluate the impact of the COVID-19 pandemic on our loan portfolio. Industries such as hotels & resorts (excluding casino hotels), casino hotels, restaurants, arts and entertainment, oil & energy, retail malls, airlines and healthcare have experienced varied business disruptions due to COVID-19. Since the beginning of the pandemic we have been closely monitoring the following loan segments (excluding PPP loans) given elevated industry risk from COVID-19: hotels & resorts (excluding casino hotels) with $709.7 million, or 8.7% of total loans, restaurants with $121.7 million, or 1.5% of total loans, arts and entertainment with $153.9 million, or 1.9% of total loans, senior care with $379.7 million, or 4.7% of total loans, and skilled nursing with $209.2 million, or 2.6% of total loans, for a total exposure of $1.57 billion, or 19.4% of total loans (excluding PPP loans) as of June 30, 2021, with $194.6 million of these loans being classified as of June 30, 2021 and loan exposure in other segments of the identified industries being either immaterial or having not shown general distress thus far.

Loans and Deposits

Total loans outstanding were $8.48 billion as of June 30, 2021, a decrease of $533.6 million from the prior quarter. The decrease in loans during the quarter was driven by a $201.9 million net decrease in PPP loans, a $54.5 million decrease in outstanding balances of warehouse lines of credit from slowed mortgage activity, $211.3 million of repayments on several criticized and specialized asset loans, and paydowns across retail, commercial and agriculture loan segments related to business sales and excess liquidity.

Total deposits were $11.54 billion as of June 30, 2021, a decrease of $26.3 million from the prior quarter, driven by a $86.8 million decrease in other interest-bearing deposits and a $46.1 million decrease in time deposits, partially offset by a $106.6 million increase in checking and savings balances.

Capital

Total capital and tier 1 capital ratios were 16.0% and 14.5%, respectively, as of June 30, 2021, compared to 15.1% and 13.5% as of March 31, 2021. The common equity tier 1 capital and tier 1 leverage ratios were 13.7% and 10.1%, respectively, as of June 30, 2021, compared to 12.8% and 10.0% as of March 31, 2021. All regulatory capital ratios remain above regulatory minimums to be considered "well capitalized."

On July 29, 2021, the Company's Board of Directors declared a dividend of $0.05 per common share, payable on August 27, 2021 to stockholders of record as of close of business on August 13, 2021.

Conference Call

Great Western Bancorp, Inc. will host a conference call to discuss its financial results for the third quarter of fiscal year 2021 on Thursday, July 29, 2021 at 7:30 AM (CT). The call can be accessed by dialing (855) 238-8837 approximately 10 minutes prior to the start time. Please ask to be joined into the Great Western Bancorp, Inc. (GWB) call. International callers should dial (412) 542-4114. The call will also be broadcast live over the Internet and can be accessed by visiting ir.greatwesternbank.com. A replay will be available beginning one hour following the conference call and ending on August 12, 2021. To access the replay, dial (877) 344-7529 (U.S.) and use conference ID 10157664. International callers should dial (412) 317-0088 and enter the same conference ID number.

About Great Western Bancorp, Inc.

Great Western Bancorp, Inc. is the holding company for Great Western Bank, a full-service regional bank focused on relationship-based business banking. Great Western Bank offers small and mid-sized businesses a focused suite of financial products and a range of deposit and loan products to retail customers through several channels, including the branch network, online banking system, mobile banking applications and customer care centers. The bank services its customers through more than 170 branches in nine states: Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. To learn more about Great Western Bank visit www.greatwesternbank.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements about Great Western Bancorp, Inc.’s expectations, beliefs, plans, strategies, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “views,” “intends” and similar words or phrases. In particular, the statements included in this press release concerning Great Western Bancorp, Inc.’s expected performance and strategy, strategies for managing troubled loans, the appropriateness of the ACL, the impact on the business arising from the COVID-19 pandemic and the interest rate environment are not historical facts and are forward-looking. Accordingly, the forward-looking statements in this press release are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed in the sections titled “Item 1A. Risk Factors” and "Cautionary Note Regarding Forward-Looking Statements" in Great Western Bancorp, Inc.’s Annual Report on Form 10-K for the most recently ended fiscal year, Form 10-Q for the quarters ended March 31, 2021 and December 31, 2020 and in other periodic filings with the Securities and Exchange Commission. Further, any forward-looking statement speaks only as of the date on which it is made, and Great Western Bancorp, Inc. undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

 

GREAT WESTERN BANCORP, INC.

Consolidated Financial Data (Unaudited)

 

 

 

 

 

At and for the nine months ended:

At and for the three months ended:

 

June 30, 2021

June 30, 2020

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

 

(dollars in thousands, except share and per share amounts)

Operating Data:

 

 

 

 

 

 

 

Interest income (FTE)

$

331,988

 

$

381,289

 

$

104,219

 

$

110,574

 

$

117,195

 

$

118,429

 

$

121,472

 

Interest expense

 

18,977

 

 

63,244

 

$

5,161

 

$

6,127

 

$

7,689

 

$

10,903

 

$

13,620

 

Noninterest income (loss)

 

50,712

 

 

3,967

 

$

19,371

 

$

17,193

 

$

14,148

 

$

(3,950

)

$

(11,683

)

Noninterest expense

 

177,057

 

 

932,432

 

$

60,505

 

$

59,103

 

$

57,449

 

$

74,936

 

$

67,049

 

(Reversal of) provision for credit losses ³

 

(13,800

)

 

101,539

 

$

(20,699

)

$

(5,000

)

$

11,899

 

$

16,853

 

$

21,641

 

Net income (loss)

 

151,367

 

 

(691,944

)

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

$

5,400

 

Adjusted net income ¹

$

151,367

 

$

77,754

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

$

5,400

 

Common shares outstanding

 

55,116,095

 

 

55,014,047

 

 

55,116,095

 

 

55,111,403

 

 

55,105,105

 

 

55,014,189

 

 

55,014,047

 

Weighted average diluted common shares outstanding

 

55,409,573

 

 

55,788,751

 

 

55,524,979

 

 

55,456,399

 

 

55,247,343

 

 

55,164,548

 

 

55,145,619

 

Earnings per common share - diluted

$

2.74

 

$

(12.40

)

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

$

0.10

 

Adjusted earnings per common share - diluted ¹

$

2.74

 

$

1.39

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

$

0.10

 

Performance Ratios:

 

 

 

 

 

 

 

Net interest margin (FTE) ¹ ²

 

3.46

%

 

3.61

%

 

3.23

%

 

3.51

%

 

3.63

%

 

3.51

%

 

3.57

%

Adjusted net interest margin (FTE) ¹ ²

 

3.35

%

 

3.55

%

 

3.13

%

 

3.40

%

 

3.52

%

 

3.40

%

 

3.47

%

Return on average total assets ²

 

1.59

%

 

(7.22

)%

 

1.81

%

 

1.64

%

 

1.30

%

 

0.35

%

 

0.17

%

Return on average common equity ²

 

18.7

%

 

(55.6

)%

 

21.2

%

 

19.8

%

 

15.2

%

 

3.8

%

 

1.9

%

Return on average tangible common equity ¹ ²

 

18.9

%

 

2.5

%

 

21.4

%

 

20.0

%

 

15.3

%

 

3.9

%

 

2.0

%

Efficiency ratio ¹

 

48.5

%

 

58.7

%

 

50.9

%

 

48.4

%

 

46.2

%

 

72.1

%

 

69.4

%

Capital:

 

 

 

 

 

 

 

Tier 1 capital ratio

 

14.5

%

 

11.3

%

 

14.5

%

 

13.5

%

 

12.7

%

 

11.8

%

 

11.3

%

Total capital ratio

 

16.0

%

 

12.9

%

 

16.0

%

 

15.1

%

 

14.3

%

 

13.3

%

 

12.9

%

Tier 1 leverage ratio

 

10.1

%

 

9.3

%

 

10.1

%

 

10.0

%

 

9.7

%

 

9.4

%

 

9.3

%

Common equity tier 1 ratio

 

13.7

%

 

10.6

%

 

13.7

%

 

12.8

%

 

12.0

%

 

11.0

%

 

10.6

%

Tangible common equity / tangible assets ¹

 

8.8

%

 

8.9

%

 

8.8

%

 

8.4

%

 

8.3

%

 

9.2

%

 

8.9

%

Book value per share - GAAP

$

21.07

 

$

21.10

 

$

21.07

 

$

19.85

 

$

19.39

 

$

21.14

 

$

21.10

 

Tangible book value per share ¹

$

20.97

 

$

20.98

 

$

20.97

 

$

19.75

 

$

19.28

 

$

21.03

 

$

20.98

 

Asset Quality:

 

 

 

 

 

 

 

Nonaccrual loans

$

210,083

 

$

274,475

 

$

210,083

 

$

284,541

 

$

292,357

 

$

324,946

 

$

274,475

 

Other repossessed property

$

11,498

 

$

19,231

 

$

11,498

 

$

17,529

 

$

18,086

 

$

20,034

 

$

19,231

 

Nonaccrual loans / total loans

 

2.48

%

 

2.66

%

 

2.48

%

 

3.16

%

 

3.07

%

 

3.22

%

 

2.66

%

Net charge-offs (recoveries)

$

43,410

 

$

24,155

 

$

5,211

 

$

7,841

 

$

30,358

 

$

15,124

 

$

9,433

 

Net charge-offs (recoveries) / average total loans ²

 

0.62

%

 

0.33

%

 

0.24

%

 

0.34

%

 

1.22

%

 

0.59

%

 

0.37

%

Allowance for credit losses / total loans

 

3.19

%

 

1.44

%

 

3.19

%

 

3.28

%

 

3.24

%

 

1.49

%

 

1.44

%

Watch-rated loans (under former risk rating system) ⁴

 

n/a

 

$

477,128

 

 

n/a

 

 

n/a

 

 

n/a

 

$

982,841

 

$

477,128

 

Special mention loans ⁴

$

374,782

 

 

n/a

 

$

374,782

 

$

512,320

 

$

453,484

 

 

n/a

 

 

n/a

 

Classified loans (substandard or worse)

$

612,175

 

$

702,795

 

$

612,175

 

$

673,854

 

$

716,948

 

$

769,515

 

$

702,795

 

Criticized loans (special mention or worse) ⁴

$

986,957

 

 

n/a

 

$

986,957

 

$

1,186,174

 

$

1,170,432

 

 

n/a

 

 

n/a

 

 

1 This is a non-GAAP financial measure management believes is helpful to interpreting our financial results. See the tables at the end of this document for the calculation of the measure and reconciliation to the most comparable GAAP measure.

2 Annualized for all partial-year periods.

3 Prior to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, on October 1, 2020, this line represented the provision for loan and lease losses under the incurred model.

4 Upon implementation of the new risk rating system on October 1, 2020, the reported Watch rating was retired and new Special Mention loans and Criticized loans ratings were introduced for monitoring and reporting purposes.

 

GREAT WESTERN BANCORP, INC.

Consolidated Income Statement (Unaudited)

 

 

 

 

 

 

At and for the nine months ended:

 

At and for the three months ended:

 

June 30, 2021

June 30, 2020

 

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

 

(dollars in thousands)

Interest income

 

 

 

 

 

 

 

 

Loans

$

300,925

 

 

$

342,014

 

 

 

$

93,328

 

 

$

100,274

 

 

$

107,323

 

 

$

107,522

 

 

$

109,227

 

 

Investment securities

25,079

 

 

33,359

 

 

 

8,642

 

 

8,318

 

 

8,119

 

 

9,294

 

 

10,532

 

 

Federal funds sold and other

1,214

 

 

1,278

 

 

 

654

 

 

405

 

 

155

 

 

105

 

 

112

 

 

Total interest income

327,218

 

 

376,651

 

 

 

102,624

 

 

108,997

 

 

115,597

 

 

116,921

 

 

119,871

 

 

Interest expense

 

 

 

 

 

 

 

 

Deposits

13,976

 

 

50,818

 

 

 

3,505

 

 

4,479

 

 

5,992

 

 

7,785

 

 

10,011

 

 

FHLB advances and other borrowings

2,603

 

 

8,807

 

 

 

867

 

 

856

 

 

880

 

 

2,221

 

 

2,539

 

 

Subordinated debentures and subordinated notes payable

2,398

 

 

3,619

 

 

 

789

 

 

792

 

 

817

 

 

897

 

 

1,070

 

 

Total interest expense

18,977

 

 

63,244

 

 

 

5,161

 

 

6,127

 

 

7,689

 

 

10,903

 

 

13,620

 

 

Net interest income

308,241

 

 

313,407

 

 

 

97,463

 

 

102,870

 

 

107,908

 

 

106,018

 

 

106,251

 

 

(Reversal of) provision for credit losses ¹

(13,800

)

 

101,539

 

 

 

(20,699

)

 

(5,000

)

 

11,899

 

 

16,853

 

 

21,641

 

 

Net interest income after provision for loan and lease losses

322,041

 

 

211,868

 

 

 

118,162

 

 

107,870

 

 

96,009

 

 

89,165

 

 

84,610

 

 

Noninterest income

 

 

 

 

 

 

 

 

Service charges and other fees

27,228

 

 

28,328

 

 

 

9,005

 

 

8,599

 

 

9,624

 

 

9,413

 

 

7,731

 

 

Wealth management fees

9,688

 

 

8,859

 

 

 

3,477

 

 

3,182

 

 

3,029

 

 

2,913

 

 

2,773

 

 

Mortgage banking income, net

9,937

 

 

5,179

 

 

 

2,157

 

 

3,690

 

 

4,090

 

 

3,780

 

 

2,422

 

 

Net gain (loss) on sale of securities and other assets

247

 

 

 

 

 

 

 

(1

)

 

248

 

 

7,890

 

 

 

 

Derivative interest expense

(9,692

)

 

(5,181

)

 

 

(3,117

)

 

(3,182

)

 

(3,393

)

 

(3,541

)

 

(3,040

)

 

Change in fair value of FVO loans and related derivatives

2,480

 

 

(37,658

)

 

 

4,110

 

 

42

 

 

(1,672

)

 

(24,648

)

 

(25,001

)

 

Other derivative income (loss)

5,683

 

 

950

 

 

 

1,530

 

 

3,255

 

 

898

 

 

(890

)

 

2,242

 

 

Other

5,141

 

 

3,490

 

 

 

2,209

 

 

1,608

 

 

1,324

 

 

1,133

 

 

1,190

 

 

Total noninterest income (loss)

50,712

 

 

3,967

 

 

 

19,371

 

 

17,193

 

 

14,148

 

 

(3,950

)

 

(11,683

)

 

Noninterest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

116,918

 

 

112,259

 

 

 

40,239

 

 

39,125

 

 

37,554

 

 

37,182

 

 

39,042

 

 

Data processing and communication

19,825

 

 

17,713

 

 

 

7,054

 

 

6,545

 

 

6,226

 

 

6,742

 

 

5,817

 

 

Occupancy and equipment

15,829

 

 

15,941

 

 

 

5,105

 

 

5,511

 

 

5,213

 

 

5,332

 

 

5,251

 

 

Professional fees

12,293

 

 

16,409

 

 

 

4,644

 

 

3,734

 

 

3,915

 

 

5,552

 

 

7,382

 

 

Advertising

1,635

 

 

2,573

 

 

 

602

 

 

477

 

 

556

 

 

823

 

 

750

 

 

Net (gain) loss on repossessed property and other related expenses

(469

)

 

8,508

 

 

 

(760

)

 

(54

)

 

345

 

 

4,350

 

 

2,475

 

 

Goodwill and intangible assets impairment

 

 

742,352

 

 

 

 

 

 

 

 

 

 

 

 

 

Other ¹

11,026

 

 

16,677

 

 

 

3,621

 

 

3,765

 

 

3,640

 

 

14,955

 

 

6,332

 

 

Total noninterest expense

177,057

 

 

932,432

 

 

 

60,505

 

 

59,103

 

 

57,449

 

 

74,936

 

 

67,049

 

 

Income (loss) before income taxes

195,696

 

 

(716,597

)

 

 

77,028

 

 

65,960

 

 

52,708

 

 

10,279

 

 

5,878

 

 

Provision for (benefit from) income taxes

44,329

 

 

(24,653

)

 

 

18,279

 

 

14,661

 

 

11,389

 

 

(857

)

 

478

 

 

Net income (loss)

$

151,367

 

 

$

(691,944

)

 

 

$

58,749

 

 

$

51,299

 

 

$

41,319

 

 

$

11,136

 

 

$

5,400

 

 

1 For the three and nine months ended June 30, 2021, this line includes a $0.2 million and $0.3 million decrease in provision for unfunded commitments reserve, respectively. For the three and nine months ended June 30, 2020, increase in provision for unfunded commitments reserve of $2.2 million and $2.9 million, respectively, were recorded in other noninterest expense in the consolidated income statement.

  GREAT WESTERN BANCORP, INC.

Summarized Consolidated Balance Sheet (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

As of

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

September 30, 2020

 

June 30, 2020

 

(dollars in thousands)

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,756,345

 

 

$

1,383,071

 

 

$

1,061,796

 

 

$

432,887

 

 

$

311,585

 

Investment securities

2,383,959

 

 

2,265,261

 

 

2,059,615

 

 

1,774,626

 

 

1,972,626

 

Total loans

8,477,783

 

 

9,011,352

 

 

9,517,876

 

 

10,076,142

 

 

10,313,999

 

Allowance for credit losses ¹

(270,298

)

 

(295,953

)

 

(308,794

)

 

(149,887

)

 

(148,158

)

Loans, net

8,207,485

 

 

8,715,399

 

 

9,209,082

 

 

9,926,255

 

 

10,165,841

 

Other assets

722,440

 

 

650,008

 

 

483,890

 

 

470,671

 

 

484,276

 

Total assets

$

13,070,229

 

 

$

13,013,739

 

 

$

12,814,383

 

 

$

12,604,439

 

 

$

12,934,328

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

2,958,488

 

 

$

2,845,309

 

 

$

2,858,455

 

 

$

2,586,743

 

 

$

2,592,376

 

Interest-bearing deposits

8,579,289

 

 

8,718,745

 

 

8,514,863

 

 

8,422,036

 

 

8,558,238

 

Total deposits

11,537,777

 

 

11,564,054

 

 

11,373,318

 

 

11,008,779

 

 

11,150,614

 

Securities sold under agreements to repurchase

80,167

 

 

63,153

 

 

80,355

 

 

65,506

 

 

70,362

 

FHLB advances and other borrowings

120,000

 

 

120,000

 

 

120,000

 

 

195,000

 

 

355,000

 

Other liabilities

171,216

 

 

172,613

 

 

172,209

 

 

172,221

 

 

197,708

 

Total liabilities

11,909,160

 

 

11,919,820

 

 

11,745,882

 

 

11,441,506

 

 

11,773,684

 

Stockholders' equity

1,161,069

 

 

1,093,919

 

 

1,068,501

 

 

1,162,933

 

 

1,160,644

 

Total liabilities and stockholders' equity

$

13,070,229

 

 

$

13,013,739

 

 

$

12,814,383

 

 

$

12,604,439

 

 

$

12,934,328

 

1 Prior to the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, on October 1, 2020, this line represented the allowance for loan and lease losses under the incurred loss model.

GREAT WESTERN BANCORP, INC.

Loan Portfolio Summary (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

Fiscal year-to-date:

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

September 30, 2020

 

Change

($)

Change

(%)

 

(dollars in thousands)

Construction and development

$

433,293

 

$

472,939

 

$

482,462

 

$

415,440

 

 

$

17,853

 

4.3

%

Owner-occupied CRE

1,318,196

 

1,381,693

 

1,411,558

 

1,411,894

 

 

(93,698

)

(6.6

)%

Non-owner-occupied CRE

2,244,335

 

2,340,206

 

2,660,682

 

2,910,965

 

 

(666,630

)

(22.9

)%

Multifamily residential real estate

592,544

 

619,353

 

476,159

 

536,642

 

 

55,902

 

10.4

%

Total commercial real estate

4,588,368

 

4,814,191

 

5,030,861

 

5,274,941

 

 

(686,573

)

(13.0

)%

Agriculture

1,438,499

 

1,549,926

 

1,635,952

 

1,724,350

 

 

(285,851

)

(16.6

)%

Commercial non-real estate

1,710,938

 

1,897,569

 

2,054,478

 

2,181,656

 

 

(470,718

)

(21.6

)%

Residential real estate

631,688

 

660,450

 

708,086

 

830,102

 

 

(198,414

)

(23.9

)%

Consumer and other ¹

108,290

 

89,216

 

88,499

 

100,553

 

 

7,737

 

7.7

%

Total loans

8,477,783

 

9,011,352

 

9,517,876

 

10,111,602

 

 

(1,633,819

)

(16.2

)%

Less: Unamortized discount on acquired loans and unearned net deferred fees and costs and loans in process ²

 

 

 

(35,460

)

 

35,460

 

(100.0

)%

Total loans

$

8,477,783

 

$

9,011,352

 

$

9,517,876

 

$

10,076,142

 

 

$

(1,598,359

)

(15.9

)%

 

 

 

 

 

 

 

 

 

 

 

1 Other loans primarily include consumer and commercial credit cards, customer deposit account overdrafts, leases. Loans in process are included in this category beginning first quarter of fiscal year 2021.

2 Beginning in the first quarter of fiscal year 2021, loan segments are presented based on amortized cost, which includes unpaid principal balance, unamortized discount on acquired loans, and unearned net deferred fees and costs, as a part of the adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs.

GREAT WESTERN BANCORP, INC.

Net Interest Margin (FTE) (Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

June 30, 2021

 

March 31, 2021

 

June 30, 2020

 

Average Balance

Interest (FTE)

Yield / Cost ¹

 

Average Balance

Interest (FTE)

Yield / Cost ¹

 

Average Balance

Interest (FTE)

Yield / Cost ¹

 

(dollars in thousands)

Assets

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing bank deposits ²

$

1,357,821

$

306

0.09

%

 

$

818,162

$

213

0.11

%

 

$

144,805

$

112

0.31

%

Other interest-earning assets

121,981

348

1.14

%

 

71,330

192

1.09

%

 

%

Investment securities

2,318,325

8,642

1.50

%

 

2,167,784

8,318

1.56

%

 

1,987,648

10,532

2.13

%

Non-ASC 310-30 loans, net ³

8,500,919

94,923

4.48

%

 

9,016,221

101,851

4.58

%

 

9,974,802

109,326

4.41

%

ASC 310-30 loans, net ⁴

%

 

%

 

49,250

1,502

12.27

%

Loans, net

8,500,919

94,923

4.48

%

 

9,016,221

101,851

4.58

%

 

10,024,052

110,828

4.45

%

Total interest-earning assets

12,299,046

104,219

3.40

%

 

12,073,497

110,574

3.71

%

 

12,156,505

121,472

4.02

%

Noninterest-earning assets

743,109

 

 

 

602,004

 

 

 

598,159

 

 

Total assets

$

13,042,155

$

104,219

3.21

%

 

$

12,675,501

$

110,574

3.54

%

 

$

12,754,664

$

121,472

3.83

%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

2,863,176

 

 

 

$

2,713,360

 

 

 

$

2,414,567

 

 

Interest-bearing deposits

7,834,032

$

2,618

0.13

%

 

7,550,507

$

3,196

0.17

%

 

6,974,915

$

5,604

0.32

%

Time deposits

863,923

887

0.41

%

 

1,004,405

1,283

0.52

%

 

1,430,246

4,407

1.24

%

Total deposits

11,561,131

3,505

0.12

%

 

11,268,272

4,479

0.16

%

 

10,819,728

10,011

0.37

%

Securities sold under agreements to repurchase

74,785

14

0.08

%

 

69,282

13

0.08

%

 

64,645

15

0.09

%

FHLB advances and other borrowings

120,000

853

2.85

%

 

120,000

843

2.85

%

 

500,248

2,524

2.03

%

Subordinated debentures and subordinated notes payable

108,913

789

2.91

%

 

108,879

792

2.95

%

 

108,766

1,070

3.96

%

Total borrowings

303,698

1,656

2.19

%

 

298,161

1,648

2.24

%

 

673,659

3,609

2.15

%

Total interest-bearing liabilities

11,864,829

$

5,161

0.17

%

 

11,566,433

$

6,127

0.21

%

 

11,493,387

$

13,620

0.48

%

Noninterest-bearing liabilities

63,535

 

 

 

59,680

 

 

 

97,553

 

 

Stockholders' equity

1,113,791

 

 

 

1,049,388

 

 

 

1,163,724

 

 

Total liabilities and stockholders' equity

$

13,042,155

 

 

 

$

12,675,501

 

 

 

$

12,754,664

 

 

Net interest spread

 

 

3.04

%

 

 

 

3.33

%

 

 

 

3.35

%

Net interest income and net interest margin (FTE)

 

$

99,058

3.23

%

 

 

$

104,447

3.51

%

 

 

$

107,852

3.57

%

Less: Tax equivalent adjustment

 

1,595

 

 

 

1,577

 

 

 

1,601

 

Net interest income and net interest margin - ties to Statements of Comprehensive Income

 

$

97,463

3.18

%

 

 

$

102,870

3.46

%

 

 

$

106,251

3.52

%

1 Annualized for all partial-year periods.

2 Interest income includes $0.1 million for the third quarter of fiscal year 2020 resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets. For the third quarter of fiscal year 2021, all amounts were included in other interesting-earning assets.

3 Interest income includes $0.0 million and $0.2 million for the third quarter of fiscal years 2021 and 2020, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.

4 Beginning in the first quarter of fiscal year 2021, ASC 310-30 loans began being reported with non-ASC 310-30 loans. Upon adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, discounts on ASC 310-30 loans related to noncredit factors accreted to interest income were immaterial.

GREAT WESTERN BANCORP, INC.

Net Interest Margin (FTE) (Unaudited)

 

 

 

 

 

 

 

Nine Months Ended

 

June 30, 2021

 

June 30, 2020

 

Average Balance

Interest (FTE)

Yield / Cost ¹

 

Average Balance

Interest (FTE)

Yield / Cost ¹

 

(dollars in thousands)

Assets

 

 

 

 

 

 

 

Interest-bearing bank deposits ²

$

889,362

 

$

622

 

0.09

%

 

$

78,164

 

$

1,278

 

2.18

%

Other interest-earning assets

71,085

 

592

 

1.11

%

 

 

 

%

Investment securities

2,123,979

 

25,079

 

1.58

%

 

1,959,681

 

33,359

 

2.27

%

Non-ASC 310-30 loans, net ³

9,028,273

 

305,695

 

4.53

%

 

9,675,039

 

342,042

 

4.72

%

ASC 310-30 loans, net ⁴

 

 

%

 

50,639

 

4,610

 

12.16

%

Loans, net

9,028,273

 

305,695

 

4.53

%

 

9,725,678

 

346,652

 

4.76

%

Total interest-earning assets

12,112,699

 

331,988

 

3.66

%

 

11,763,523

 

381,289

 

4.33

%

Noninterest-earning assets

653,353

 

 

 

 

1,046,576

 

 

 

Total assets

$

12,766,052

 

$

331,988

 

3.48

%

 

$

12,810,099

 

$

381,289

 

3.98

%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

2,746,884

 

 

 

 

$

2,111,445

 

 

 

Interest-bearing deposits

7,554,204

 

$

9,780

 

0.17

%

 

6,585,100

 

$

31,060

 

0.63

%

Time deposits

1,018,492

 

4,196

 

0.55

%

 

1,655,059

 

19,758

 

1.59

%

Total deposits

11,319,580

 

13,976

 

0.17

%

 

10,351,604

 

50,818

 

0.66

%

Securities sold under agreements to repurchase

74,235

 

45

 

0.08

%

 

62,513

 

70

 

0.15

%

FHLB advances and other borrowings

120,000

 

2,558

 

2.85

%

 

526,372

 

8,737

 

2.22

%

Subordinated debentures and subordinated notes payable

108,880

 

2,398

 

2.94

%

 

108,715

 

3,619

 

4.45

%

Total borrowings

303,115

 

5,001

 

2.21

%

 

697,600

 

12,426

 

2.38

%

Total interest-bearing liabilities

11,622,695

 

$

18,977

 

0.22

%

 

11,049,204

 

$

63,244

 

0.76

%

Noninterest-bearing liabilities

61,605

 

 

 

 

97,475

 

 

 

Stockholders' equity

1,081,752

 

 

 

 

1,663,420

 

 

 

Total liabilities and stockholders' equity

$

12,766,052

 

 

 

 

$

12,810,099

 

 

 

Net interest spread

 

 

3.26

%

 

 

 

3.22

%

Net interest income and net interest margin (FTE)

 

$

313,011

 

3.46

%

 

 

$

318,045

 

3.61

%

Less: Tax equivalent adjustment

 

4,770

 

 

 

 

4,638

 

 

Net interest income and net interest margin - ties to Statements of Comprehensive Income

 

$

308,241

 

3.40

%

 

 

$

313,407

 

3.56

%

1 Annualized for all partial-year periods.

2 Interest income includes $0.8 million for fiscal year 2020 resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets. For fiscal year 2021, all amounts were included in other interest-earning assets.

3 Interest income includes $0.0 million and $1.2 million for the fiscal years 2021 and 2020, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.

4 Beginning in the first quarter of fiscal year 2021, ASC 310-30 loans began being reported with non-ASC 310-30 loans. Upon adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and subsequent related ASUs, discounts on ASC 310-30 loans related to noncredit factors accreted to interest income were immaterial.

Non-GAAP Financial Measures and Reconciliation

We rely on certain non-GAAP financial measures in making financial and operational decisions about our business. We believe that each of the non-GAAP financial measures presented is helpful in highlighting trends in our business, financial condition and results of operations which might not otherwise be apparent when relying solely on our financial results calculated in accordance with GAAP. We disclose net interest income and related ratios and analysis on a taxable-equivalent basis, which may also be considered non-GAAP financial measures. We believe this presentation to be the preferred industry measurement of net interest income as it provides a relevant comparison of net interest income arising from taxable and tax-exempt sources. In addition, certain performance measures, including the efficiency ratio and net interest margin utilize net interest income on a taxable-equivalent basis.

In particular, we evaluate our profitability and performance based on our adjusted net income, adjusted earnings per common share, pre-tax pre-provision income ("PTPP"), tangible net income and return on average tangible common equity. Our adjusted net income and adjusted earnings per common share exclude the after-tax effect of items with a significant impact to net income that we do not believe to be recurring in nature, (e.g., one-time acquisition expenses as well as the second quarter of fiscal year 2020 COVID-19 impact on credit and other related charges and the impairment of goodwill and certain intangible assets). Our PTPP income excludes total provision for credit losses, credit gains/losses on loans held for investment measured at fair value and goodwill impairment. Our tangible net income and return on average tangible common equity exclude the effects of amortization expense relating to intangible assets and our acquisitions of other institutions. We believe these measures help highlight trends associated with our financial condition and results of operations by providing net income and return information excluding significant nonrecurring items (for adjusted net income and adjusted earnings per common share), measure our ability to generate capital by providing net income excluding credit losses (for PTPP income) and measure net income based on our cash payments and receipts during the applicable period (for tangible net income and return on average tangible common equity).

We also evaluate our profitability and performance based on our adjusted net interest income, adjusted net interest margin, adjusted interest income on loans and adjusted yield on loans. We adjust each of these four measures to include the derivative interest expense we use to manage interest rate risk on certain of our loans, which we believe economically offsets the interest income earned on the loans. Similarly, we evaluate our operational efficiency based on our efficiency ratio, which excludes the effect of amortization of core deposit and other intangibles (a non-cash expense item) and includes the tax benefit associated with our tax-advantaged loans.

We evaluate our financial condition based on the ratio of our tangible common equity to our tangible assets and the ratio of our tangible common equity to common shares outstanding. Our calculation of this ratio excludes the effect of our goodwill and other intangible assets. We believe this measure is helpful in highlighting the common equity component of our capital and because of its focus by federal bank regulators when reviewing the health and strength of financial institutions in recent years and when considering regulatory approvals for certain actions, including capital actions. We also believe the ratio of our tangible common equity to common shares outstanding is helpful in understanding our stockholders’ relative ownership position as we undertake various actions to issue and retire common shares outstanding.

Reconciliations for each of these non-GAAP financial measures to the closest GAAP financial measures are included in the tables below. Each of the non-GAAP financial measures presented should be considered in context with our GAAP financial results included in this release.

GREAT WESTERN BANCORP, INC.

Reconciliation of Non-GAAP Measures (Unaudited)

 

 

 

 

 

 

 

 

 

 

At and for the nine months ended:

 

At and for the three months ended:

 

June 30, 2021

June 30, 2020

 

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

 

(dollars in thousands except share and per share amounts)

Adjusted net income and adjusted earnings per common share:

 

 

 

 

 

 

 

 

Net income (loss) - GAAP

$

151,367

 

$

(691,944

)

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

$

5,400

 

Add: COVID-19 related impairment of goodwill and certain intangible assets, net of tax

 

713,013

 

 

 

 

 

 

 

Add: COVID-19 impact on credit and other related charges, net of tax

 

56,685

 

 

 

 

 

 

 

Adjusted net income

$

151,367

 

$

77,754

 

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

$

5,400

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common shares outstanding

55,409,573

 

55,788,751

 

 

55,524,979

 

55,456,399

 

55,247,343

 

55,164,548

 

55,145,619

 

Earnings per common share - diluted

$

2.74

 

$

(12.40

)

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

$

0.10

 

Adjusted earnings per common share - diluted

$

2.74

 

$

1.39

 

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

$

0.10

 

 

 

 

 

 

 

 

 

 

Pre-tax pre-provision income ("PTPP"):

 

 

 

 

 

 

 

 

Income (loss) before income taxes - GAAP

$

195,696

 

$

(716,597

)

 

$

77,028

 

$

65,960

 

$

52,708

 

$

10,279

 

$

5,878

 

Add: Provision for credit losses - GAAP

(13,800

)

101,539

 

 

(20,699

)

(5,000

)

11,899

 

16,853

 

21,641

 

Add: Change in fair value of FVO loans and related derivatives - GAAP

(2,480

)

37,658

 

 

(4,110

)

(42

)

1,672

 

24,648

 

25,001

 

Add: Goodwill impairment - GAAP

 

742,352

 

 

 

 

 

 

 

Pre-tax pre-provision income

$

179,416

 

$

164,952

 

 

$

52,219

 

$

60,918

 

$

66,279

 

$

51,780

 

$

52,520

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible net income and return on average tangible common equity:

 

 

 

 

 

 

 

 

Net income (loss) - GAAP

$

151,367

 

$

(691,944

)

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

$

5,400

 

Add: Amortization of intangible assets and COVID-19 related impairment of goodwill and certain intangible assets, net of tax

775

 

714,078

 

 

253

 

261

 

261

 

261

 

261

 

Tangible net income (loss)

$

152,142

 

$

22,134

 

 

$

59,002

 

$

51,560

 

$

41,580

 

$

11,397

 

$

5,661

 

 

 

 

 

 

 

 

 

 

Average common equity

$

1,081,752

 

$

1,663,420

 

 

$

1,113,791

 

$

1,049,388

 

$

1,082,077

 

$

1,174,996

 

$

1,163,724

 

Less: Average goodwill and other intangible assets

5,744

 

498,644

 

 

5,485

 

5,742

 

6,004

 

6,265

 

6,527

 

Average tangible common equity

$

1,076,008

 

$

1,164,776

 

 

$

1,108,306

 

$

1,043,646

 

$

1,076,073

 

$

1,168,731

 

$

1,157,197

 

 

 

 

 

 

 

 

 

 

Return on average common equity *

18.7

%

(55.6

)%

 

21.2

%

19.8

%

15.2

%

3.8

%

1.9

%

Return on average tangible common equity **

18.9

%

2.5

%

 

21.4

%

20.0

%

15.3

%

3.9

%

2.0

%

* Calculated as net income - GAAP divided by average common equity. Annualized for partial-year periods.

** Calculated as tangible net income divided by average tangible common equity. Annualized for partial-year periods.

 

 

 

 

 

 

 

 

 

Adjusted net interest income and adjusted net interest margin (fully-tax equivalent basis), on non-ASC 310-30 loans:

 

 

 

 

 

 

 

 

Net interest income - GAAP

$

308,241

 

$

313,407

 

 

$

97,463

 

$

102,870

 

$

107,908

 

$

106,018

 

$

106,251

 

Add: Tax equivalent adjustment

4,770

 

4,638

 

 

1,595

 

1,577

 

1,598

 

1,508

 

1,601

 

Net interest income (FTE)

313,011

 

318,045

 

 

99,058

 

104,447

 

109,506

 

107,526

 

107,852

 

Add: Derivative interest expense

(9,692

)

(5,180

)

 

(3,117

)

(3,182

)

(3,393

)

(3,541

)

(3,040

)

Adjusted net interest income (FTE)

$

303,319

 

$

312,865

 

 

$

95,941

 

$

101,265

 

$

106,113

 

$

103,985

 

$

104,812

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets

$12,112,699

 

$11,763,523

 

 

$12,299,046

 

$12,073,497

 

$11,965,555

 

$12,184,093

 

$12,156,505

 

Net interest margin (FTE) *

3.46

%

3.61

%

 

3.23

%

3.51

%

3.63

%

3.51

%

3.57

%

Adjusted net interest margin (FTE) **

3.35

%

3.55

%

 

3.13

%

3.40

%

3.52

%

3.40

%

3.47

%

* Calculated as net interest income (FTE) divided by average interest earning assets. Annualized for partial-year periods.

** Calculated as adjusted net interest income (FTE) divided by average interest earning assets. Annualized for partial-year periods.

 

 

 

 

 

 

 

 

 

Adjusted interest income and adjusted yield (fully-tax equivalent basis), on non-ASC 310-30 loans:

 

 

 

 

 

 

 

 

Interest income - GAAP

$

300,925

 

$

337,404

 

 

$

93,328

 

$

100,274

 

$

107,323

 

$

106,305

 

$

107,725

 

Add: Tax equivalent adjustment

4,770

 

4,638

 

 

1,595

 

1,577

 

1,598

 

1,508

 

1,601

 

Interest income (FTE)

305,695

 

342,042

 

 

94,923

 

101,851

 

108,921

 

107,813

 

109,326

 

Add: Derivative interest expense

(9,692

)

(5,180

)

 

(3,117

)

(3,182

)

(3,393

)

(3,541

)

(3,040

)

Adjusted interest income (FTE)

$

296,003

 

$

336,862

 

 

$

91,806

 

$

98,669

 

$

105,528

 

$

104,272

 

$

106,286

 

 

 

 

 

 

 

 

 

 

Average non-ASC310-30 loans

$9,028,273

 

$9,675,039

 

 

$8,500,919

 

$9,016,221

 

$9,567,679

 

$9,977,591

 

$9,974,802

 

Yield (FTE) *

4.53

%

4.72

%

 

4.48

%

4.58

%

4.52

%

4.30

%

4.41

%

Adjusted yield (FTE) **

4.38

%

4.65

%

 

4.33

%

4.44

%

4.38

%

4.16

%

4.29

%

* Calculated as interest income (FTE) divided by average loans. Annualized for partial-year periods.

** Calculated as adjusted interest income (FTE) divided by average loans. Annualized for partial-year periods.

 

 

 

 

 

 

 

 

 

Efficiency ratio:

 

 

 

 

 

 

 

 

Total revenue - GAAP

$

358,953

 

$

317,374

 

 

$

116,834

 

$

120,063

 

$

122,056

 

$

102,068

 

$

94,568

 

Add: Tax equivalent adjustment

4,770

 

4,638

 

 

1,595

 

1,577

 

1,598

 

1,508

 

1,601

 

Total revenue (FTE)

$

363,723

 

$

322,012

 

 

$

118,429

 

$

121,640

 

$

123,654

 

$

103,576

 

$

96,169

 

 

 

 

 

 

 

 

 

 

Noninterest expense

$

177,057

 

$

932,432

 

 

$

60,505

 

$

59,103

 

$

57,449

 

$

74,936

 

$

67,049

 

Less: Amortization of intangible assets and COVID-19 related impairment of goodwill and certain intangible assets

775

 

743,484

 

 

253

 

261

 

261

 

261

 

278

 

Tangible noninterest expense

$

176,282

 

$

188,948

 

 

$

60,252

 

$

58,842

 

$

57,188

 

$

74,675

 

$

66,771

 

 

 

 

 

 

 

 

 

 

Efficiency ratio *

48.5

%

58.7

%

 

50.9

%

48.4

%

46.2

%

72.1

%

69.4

%

* Calculated as the ratio of tangible noninterest expense to total revenue (FTE).

 

 

 

 

 

 

 

 

 

Tangible common equity and tangible common equity to tangible assets:

 

 

 

 

 

 

 

 

Total stockholders' equity

$

1,161,069

 

$

1,160,644

 

 

$

1,161,069

 

$

1,093,919

 

$

1,068,501

 

$

1,162,933

 

$

1,160,644

 

Less: Goodwill and other intangible assets

5,390

 

6,425

 

 

5,390

 

5,643

 

5,904

 

6,164

 

6,425

 

Tangible common equity

$

1,155,679

 

$

1,154,219

 

 

$

1,155,679

 

$

1,088,276

 

$

1,062,597

 

$

1,156,769

 

$

1,154,219

 

 

 

 

 

 

 

 

 

 

Total assets

$

13,070,229

 

$

12,934,328

 

 

$

13,070,229

 

$

13,013,739

 

$

12,814,383

 

$

12,604,439

 

$

12,934,328

 

Less: Goodwill and other intangible assets

5,390

 

6,425

 

 

5,390

 

5,643

 

5,904

 

6,164

 

6,425

 

Tangible assets

$

13,064,839

 

$

12,927,903

 

 

$

13,064,839

 

$

13,008,096

 

$

12,808,479

 

$

12,598,275

 

$

12,927,903

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

8.8

%

8.9

%

 

8.8

%

8.4

%

8.3

%

9.2

%

8.9

%

 

 

 

 

 

 

 

 

 

Tangible book value per share:

 

 

 

 

 

 

 

 

Total stockholders' equity

$

1,161,069

 

$

1,160,644

 

 

$

1,161,069

 

$

1,093,919

 

$

1,068,501

 

$

1,162,933

 

$

1,160,644

 

Less: Goodwill and other intangible assets

5,390

 

6,425

 

 

5,390

 

5,643

 

5,904

 

6,164

 

6,425

 

Tangible common equity

$

1,155,679

 

$

1,154,219

 

 

$

1,155,679

 

$

1,088,276

 

$

1,062,597

 

$

1,156,769

 

$

1,154,219

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

55,116,095

 

55,014,047

 

 

55,116,095

 

55,111,403

 

55,105,105

 

55,014,189

 

55,014,047

 

Book value per share - GAAP

$

21.07

 

$

21.10

 

 

$

21.07

 

$

19.85

 

$

19.39

 

$

21.14

 

$

21.10

 

Tangible book value per share

$

20.97

 

$

20.98

 

 

$

20.97

 

$

19.75

 

$

19.28

 

$

21.03

 

$

20.98

 

1 All references to net interest income and net interest margin are presented on a fully-tax equivalent basis unless otherwise noted.

2 This is a non-GAAP financial measure management believes is helpful to understanding trends in our business that may not be fully apparent based only on the most comparable GAAP financial measure. Further information on this financial measure and a reconciliation to the most comparable GAAP financial measure is provided at the end of this release.

GREAT WESTERN BANCORP, INC. Investor Relations Contact: Seth Artz, 605.988.9253 seth.artz@greatwesternbank.com

Media Contact: Lexie Feterl, 605.978.5829 alexis.feterl@greatwesternbank.com

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