GWB Great Western Bancorp Inc

Highlights for the Quarter Ending on September 30, 2021 (all quarterly comparisons in this document refer to the quarter ending on June 30, 2021, except as noted)

• Net income of $51.9 million, or $0.93 per diluted share, down from $58.7 million, or $1.06 per diluted share
• Net interest income1 of $95.1 million, down from $99.1 million, with net interest margin1 of 3.10%, down from 3.23%
• Total loans of $8.19 billion, down $292.7 million, including a reduction of $152.9 million in Paycheck Protection Program ("PPP") loans
• Total deposits of $11.31 billion, down $227.3 million
• Allowance for credit losses ("ACL") of $246.0 million, down from $270.3 million, and a ratio of ACL to total loans of 3.01%, down from 3.19%
• Nonaccrual loans of $197.9 million, down $12.2 million, or 5.8%, and other repossessed property of $4.5 million, down $7.0 million, or 61.0%
• Net charge-offs of $4.1 million, or 0.20% of average total loans (annualized), down from $5.2 million and 0.24%, respectively
• Total capital ratio of 16.3%, up from 16.0%; tier 1 capital ratio of 15.1%, up from 14.5%; common equity tier 1 capital ratio of 14.3%, up from 13.7%
• Return on average common equity of 17.5%
• The Company's Board of Directors declared a quarterly dividend of $0.05 per share

Great Western Bancorp, Inc. (NYSE: GWB) ("GWBI" or the "Company") today reported net income of $51.9 million, or $0.93 per diluted share, for the quarter ending on September 30, 2021, compared to net income of $58.7 million, or $1.06 per diluted share, for the previous quarter.

"The progress this quarter caps off what has been a productive fiscal year for our company," said Mark Borrecco, President and Chief Executive Officer. "Asset quality improved significantly, with nonaccrual loans down 5.8% from the prior quarter and down 39.1% from a year ago. In addition, OREO was $4.5 million this quarter, down 77.6% from $20.0 million the prior fiscal year, and special mention loans of $351.5 million are down 31.4% from their peak earlier this year. Our hotel loan concentration finished the fiscal year at $619.1 million, down 41.3% from $1.05 billion (all excluding PPP) at the beginning of fiscal year 2021.

I am proud of our team's performance this year. This improvement along with our announced partnership with First Interstate will accelerate our ability to improve delivery of products and services to our customers and support future growth."

Pending Merger of First Interstate Bancorp and Great Western Bancorp

On September 16, 2021, First Interstate BancSystem, Inc. (NASDAQ: FIBK) (“FIBK”), parent company of First Interstate Bank, and GWBI, parent company of Great Western Bank, announced they have entered into a definitive agreement under which the companies will combine in an all‐stock transaction. Under the terms of the agreement, which was unanimously approved by both companies’ Boards of Directors, GWBI will merge into FIBK and the combined holding company and bank will operate under the First Interstate name and brand with the company’s headquarters remaining in Billings, Montana. Pending regulatory and shareholder approvals and the satisfaction of the closing conditions set forth in the agreement, the transaction is expected to close during the first calendar quarter of 2022.

Net Interest Income and Net Interest Margin1

Net interest income was $95.1 million for the quarter, down $4.0 million, while net interest margin was 3.10%, a 13 basis point decrease from 3.23%. Adjusted net interest income2, which includes derivative interest expense recognized in noninterest income, was $92.0 million, down $3.9 million, and adjusted net interest margin2 was 3.00%, a 13 basis point decrease from 3.13%. Interest income was lower by $4.7 million as loan interest decreased by $5.3 million while securities and other interest income increased by $0.6 million. Loan interest reflects a $0.9 million decrease in PPP interest and fees, a $1.0 million decrease in recoveries of interest on nonaccrual loans, and a $3.4 million net decrease from lower volumes and lower yields, all partially offset with a $0.6 million increase in securities and other interest driven largely by increased volumes. The decrease in net interest income was partially offset by a $0.2 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 a 4 basis point decrease in yield to 0.37%, while the decrease in interest on other interest bearing deposits was driven primarily by a 2 basis point decrease in yield of interest bearing deposits to 0.11%. The 13 basis point decrease in adjusted net interest margin2 was driven by an 8 basis point decrease from excess liquidity and a 7 basis point net decrease from lower loan and securities yields and lower recoveries of interest on nonaccrual loans, all partially offset by a 2 basis point impact from lower deposit costs.

Noninterest Income

Noninterest income was $15.9 million for the quarter, down $3.5 million from the prior quarter. This was driven mainly by a net $3.8 million decrease in adjustments for loans and derivatives accounted for at fair value related to credit risk. Excluding those fair value adjustments, the $0.2 million increase in noninterest income was driven by a $0.9 million increase in service charges from increased account activity and interchange fees and a $0.1 million increase in wealth management fees, partially offset by a $0.8 million decrease in mortgage revenue from slower refinancing and purchase activity.

Noninterest Expense

Noninterest expense was $63.7 million for the quarter, up $3.2 million from the prior quarter. The increase was driven by $5.2 million in merger-related costs included within professional fees and a $0.6 million increase in data processing costs related to software maintenance and upgrades. These were partially offset by a $2.9 million decrease in salaries and benefits due to lower incentive accruals and a $0.6 million decrease in other real estate owned operating costs due to the gain on sale of an OREO property.

The efficiency ratio2 was 57.2% for the quarter, compared to 50.9% for the prior quarter.

Provision for Income Taxes

Income tax expense was $14.7 million for the quarter, down $3.6 million from the prior quarter, yielding an effective rate of 22.1% compared to 23.7%.

Asset Quality

The ACL was $246.0 million as of September 30, 2021, down $24.3 million from $270.3 million in the prior quarter. The provision for credit losses on loans resulted in a $20.9 million benefit for the quarter, compared to a $20.7 million benefit in the prior quarter, due to lower loan volumes and improved economic factors.

The ratio of ACL to total loans was 3.01% as of September 30, 2021, down from 3.19% in the prior quarter. Excluding PPP loans, the ratio was 3.09% for the current quarter and 3.33% for the prior quarter.

Net charge-offs were $4.1 million, or 0.20% of average total loans (annualized) for the quarter, down $1.1 million and 4 basis points from the prior quarter, respectively.

Included within total loans are approximately $524.5 million of loans with long-term, fixed rate structures for which management has elected the fair value accounting option, down from $545.1 million in the prior quarter. These loans are excluded from CECL and the ACL, but management has estimated that approximately $22.3 million of the fair value adjustment for these loans relates to credit risk, which is 4.26% of the fair value option loans and 0.28% of total loans excluding PPP loans, compared to $23.3 million of the fair value adjustment for these loans related to credit risk in the prior quarter, which was 4.28% of the fair value option loans and 0.29% of total loans excluding PPP loans.

Nonaccrual loans were $197.9 million as of September 30, 2021, down $12.2 million from $210.1 million in the prior quarter, largely driven by repayments on multiple agricultural and commercial nonaccrual loans.

Classified loans were $604.9 million as of September 30, 2021, down $7.3 million from $612.2 million in the prior quarter, and special mention loans were $351.5 million as of September 30, 2021, down $23.3 million.

Total other repossessed property balances were $4.5 million as of September 30, 2021, down $7.0 million from the prior quarter due largely to the sale of an OREO property.

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

 

GREAT WESTERN BANCORP, INC.

 

 

 

 

 

 

Summary of Credit-Related Charges (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the twelve months ended:

 

For the three months ended:

Item

Included within F/S Line Item(s):

September 30, 2021

September 30, 2020

 

September 30, 2021

June 30, 2021

September 30, 2020

 

 

(dollars in thousands)

(Reversal of) provision for credit losses ¹

(Reversal of) provision for credit losses ¹

$

(34,734)

 

$

118,392

 

 

$

(20,934)

 

$

(20,699)

 

$

16,853

 

Increase (decrease) provision for unfunded commitments reserve ¹

Other noninterest expense ¹

—

 

1,939

 

 

—

 

—

 

(920)

 

Net other repossessed property charges (income)

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

(1,782)

 

12,858

 

 

(1,313)

 

(760)

 

4,350

 

Net (recovery) reversal of interest income on nonaccrual loans

Interest income on loans

(7,660)

 

4,894

 

 

(1,526)

 

(2,514)

 

730

 

Net realized credit loss on derivatives

Change in fair value of FVO loans and related derivatives

210

 

2,952

 

 

—

 

—

 

1,243

 

Loan fair value adjustment related to credit

Change in fair value of FVO loans and related derivatives

(3,664)

 

59,356

 

 

(990)

 

(4,111)

 

23,407

 

Total credit-related charges

 

$

(47,630)

 

$

200,391

 

 

$

(24,763)

 

$

(28,084)

 

$

45,663

 

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 $619.1 million, or 7.7% of total loans, restaurants with $125.7 million, or 1.6% of total loans, arts and entertainment with $159.0 million, or 2.0% of total loans, senior care with $368.0 million, or 4.6% of total loans, and skilled nursing with $206.9 million, or 2.6% of total loans, all as of September 30, 2021, with $195.2 million of these loans being classified as of September 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 $8.19 billion as of September 30, 2021, down $292.7 million from the prior quarter. The decrease in loans during the quarter was driven by a $152.9 million net decrease in PPP loans, a $132.4 million decrease from repayments on several criticized and specialized asset hotel loans, and a net decrease across retail and commercial loan segments related to business sales and excess liquidity.

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 6,900 loans totaling $764.8 million related to PPP forgiveness, resulting in an outstanding balance of $212.0 million as of September 30, 2021.

Total deposits were $11.31 billion as of September 30, 2021, down $227.3 million from the prior quarter, driven by a $167.3 million decrease in other interest-bearing deposits, a $44.6 million decrease in time deposits, and a $15.4 million decrease in checking and savings balances.

Capital

Total capital and tier 1 capital ratios were 16.3% and 15.1%, respectively, as of September 30, 2021, compared to 16.0% and 14.5% as of June 30, 2021. The common equity tier 1 capital and tier 1 leverage ratios were 14.3% and 10.6%, respectively, as of September 30, 2021, compared to 13.7% and 10.1% as of June 30, 2021. All regulatory capital ratios remain above regulatory minimums to be considered "well capitalized."

On October 26, 2021, the Company's Board of Directors declared a dividend of $0.05 per common share, payable on November 26, 2021 to stockholders of record as of close of business on November 12, 2021.

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, which involve inherent risks and uncertainties. Statements about GWBI’s, FIBK's or the combined company'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 GWBI’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, the interest rate environment and the business combination transaction between GWBI and FIBK (the "Transaction") 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. In addition to factors previously disclosed in GWBI's and FIBK's reports filed with the U.S. Securities and Exchange Commission (the "SEC") and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between GWBI and FIBK; the outcome of any legal proceedings that may be instituted against GWBI or FIBK; the possibility that the Transaction does not close when expected or at all because required regulatory, shareholder, or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the risk that the benefits from the Transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which GWBI and FIBK operate; the ability to promptly and effectively integrate the businesses of GWBI and FIBK; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; reputational risk and potential adverse reactions of GWBI's or FIBK's customers, employees or other business partners, including those resulting from the announcement or completion of the Transaction; the dilution caused by FIBK's issuance of additional shares of its capital stock in connection with the Transaction; the diversion of management's attention and time from ongoing business operations and opportunities on merger-related matters; and the impact of the global COVID-19 pandemic on GWBI's and FIBK's businesses, the ability to complete the Transaction or any of the other foregoing risks. These factors are not necessarily all of the factors that could cause GWBI's, FIBK's or the combined company's actual results, performance, or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other unknown or unpredictable factors also could harm GWBI's, FIBK's or the combined company's results.

All forward-looking statements attributable to GWBI, FIBK or the combined company, or persons acting on GWBI's or FIBK's behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made and GWBI and FIBK do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If GWBI or FIBK update one or more forward-looking statements, no inference should be drawn that GWBI or FIBK will make additional updates with respect to those or other forward-looking statements. Further information regarding GWBI, FIBK and the factors which could affect the forward-looking statements contained herein can be found in GWBI's Annual Report on Form 10-K for the fiscal year ended September 30, 2020, Form 10-Q for the quarters ended December 31, 2020, March 31, 2021 and June 30, 2021 and in other filings with the SEC and in FIBK's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, Form 10-Q for the quarters ended March 31, 2021 and June 30, 2021, and its other filings with the SEC.

 

GREAT WESTERN BANCORP, INC.

 

 

 

 

 

 

 

 

Consolidated Financial Data (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At and for the twelve months ended:

 

At and for the three months ended:

 

September 30, 2021

September 30, 2020

 

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

 

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

Operating Data:

 

 

 

 

 

 

 

 

Interest income (FTE)

$

431,488

 

 

$

499,718

 

 

 

$

99,500

 

 

$

104,219

 

$

110,574

 

$

117,195

$

118,429

 

Interest expense

$

23,417

 

 

$

74,147

 

 

 

$

4,440

 

 

$

5,161

 

$

6,127

 

$

7,689

$

10,903

 

Noninterest income (loss)

$

66,564

 

 

$

17

 

 

 

$

15,852

 

 

$

19,371

 

$

17,193

 

$

14,148

$

(3,950

)

Noninterest expense

$

240,756

 

 

$

1,007,368

 

 

 

$

63,699

 

 

$

60,505

 

$

59,103

 

$

57,449

$

74,936

 

(Reversal of) provision for credit losses ³

$

(34,734

)

 

$

118,392

 

 

 

$

(20,934

)

 

$

(20,699

)

$

(5,000

)

$

11,899

$

16,853

 

Net income (loss)

$

203,258

 

 

$

(680,808

)

 

 

$

51,891

 

 

$

58,749

 

$

51,299

 

$

41,319

$

11,136

 

Adjusted net income ¹

$

203,258

 

 

$

88,890

 

 

 

$

51,891

 

 

$

58,749

 

$

51,299

 

$

41,319

$

11,136

 

Common shares outstanding

55,116,503

 

 

55,014,189

 

 

 

55,116,503

 

 

55,116,095

 

55,111,403

 

55,105,105

 

55,014,189

 

Weighted average diluted common shares outstanding

55,443,909

 

 

55,612,251

 

 

 

55,546,917

 

 

55,524,979

 

55,456,399

 

55,247,343

 

55,164,548

 

Earnings per common share - diluted

$

3.67

 

 

$

(12.24

)

 

 

$

0.93

 

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

Adjusted earnings per common share - diluted ¹

$

3.67

 

 

$

1.60

 

 

 

$

0.93

 

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

Performance Ratios:

 

 

 

 

 

 

 

 

Net interest margin (FTE) ¹ ²

3.36

 

%

3.59

 

%

 

3.10

 

%

3.23

%

3.51

%

3.63

%

3.51

%

Adjusted net interest margin (FTE) ¹ ²

3.26

 

%

3.51

 

%

 

3.00

 

%

3.13

%

3.40

%

3.52

%

3.40

%

Return on average total assets ²

1.59

 

%

(5.32

)

%

 

1.59

 

%

1.81

%

1.64

%

1.30

%

0.35

%

Return on average common equity ²

18.4

 

%

(44.2

)

%

 

17.5

 

%

21.2

%

19.8

%

15.2

%

3.8

%

Return on average tangible common equity ¹ ²

18.6

 

%

2.9

 

%

 

17.7

 

%

21.4

%

20.0

%

15.3

%

3.9

%

Efficiency ratio ¹

50.5

 

%

61.9

 

%

 

57.2

 

%

50.9

%

48.4

%

46.2

%

72.1

%

Capital:

 

 

 

 

 

 

 

 

Tier 1 capital ratio

15.1

 

%

11.8

 

%

 

15.1

 

%

14.5

%

13.5

%

12.7

%

11.8

%

Total capital ratio

16.3

 

%

13.3

 

%

 

16.3

 

%

16.0

%

15.1

%

14.3

%

13.3

%

Tier 1 leverage ratio

10.6

 

%

9.4

 

%

 

10.6

 

%

10.1

%

10.0

%

9.7

%

9.4

%

Common equity tier 1 ratio

14.3

 

%

11.0

 

%

 

14.3

 

%

13.7

%

12.8

%

12.0

%

11.0

%

Tangible common equity / tangible assets ¹

9.3

 

%

9.2

 

%

 

9.3

 

%

8.8

%

8.4

%

8.3

%

9.2

%

Book value per share - GAAP

$

21.80

 

 

$

21.14

 

 

 

$

21.80

 

 

$

21.07

 

$

19.85

 

$

19.39

 

$

21.14

 

Tangible book value per share ¹

$

21.71

 

 

$

21.03

 

 

 

$

21.71

 

 

$

20.97

 

$

19.75

 

$

19.28

 

$

21.03

 

Asset Quality:

 

 

 

 

 

 

 

 

Nonaccrual loans

$

197,936

 

 

$

324,946

 

 

 

$

197,936

 

$

210,083

 

$

284,541

 

$

292,357

$

324,946

 

Other repossessed property

$

4,479

 

 

$

20,034

 

 

 

$

4,479

 

$

11,498

 

$

17,529

 

$

18,086

$

20,034

 

Nonaccrual loans / total loans

2.42

 

%

3.22

 

%

 

2.42

 

%

2.48

%

3.16

%

3.07

%

3.22

%

Net charge-offs (recoveries)

$

47,550

 

 

$

39,279

 

 

 

$

4,140

 

$

5,211

 

$

7,841

 

$

30,358

$

15,124

 

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

0.52

 

%

0.40

 

%

 

0.20

 

%

0.24

%

0.34

%

1.22

%

0.59

%

Allowance for credit losses / total loans

3.01

 

%

1.49

 

%

 

3.01

 

%

3.19

%

3.28

%

3.24

%

1.49

%

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

n/a

 

$

982,841

 

 

 

n/a

 

n/a

 

n/a

 

n/a

$

982,841

 

Special mention loans ⁴

$

351,499

 

 

n/a

 

 

$

351,499

 

$

374,782

 

$

512,320

 

$

453,484

 

n/a

 

Classified loans (substandard or worse)

$

604,877

 

 

$

769,515

 

 

 

$

604,877

 

$

612,175

 

$

673,854

 

$

716,948

 

$

769,515

 

Criticized loans (special mention or worse) ⁴

$

956,376

 

 

n/a

 

 

$

956,376

 

$

986,957

 

$

1,186,174

 

$

1,170,432

 

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 twelve months ended:

 

At and for the three months ended:

 

September 30, 2021

September 30, 2020

 

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

 

(dollars in thousands)

Interest income

 

 

 

 

 

 

 

 

Loans

$

388,977

 

$

449,536

 

 

$

88,052

 

$

93,328

 

$

100,274

 

$

107,323

 

$

107,522

 

Investment securities

33,995

 

42,653

 

 

8,916

 

8,642

 

8,318

 

8,119

 

9,294

 

Federal funds sold and other

2,172

 

1,383

 

 

958

 

654

 

405

 

155

 

105

 

Total interest income

425,144

 

493,572

 

 

97,926

 

102,624

 

108,997

 

115,597

 

116,921

 

Interest expense

 

 

 

 

 

 

 

 

Deposits

16,754

 

58,603

 

 

2,778

 

3,505

 

4,479

 

5,992

 

7,785

 

FHLB advances and other borrowings

3,481

 

11,028

 

 

878

 

867

 

856

 

880

 

2,221

 

Subordinated debentures and subordinated notes payable

3,182

 

4,516

 

 

784

 

789

 

792

 

817

 

897

 

Total interest expense

23,417

 

74,147

 

 

4,440

 

5,161

 

6,127

 

7,689

 

10,903

 

Net interest income

401,727

 

419,425

 

 

93,486

 

97,463

 

102,870

 

107,908

 

106,018

 

(Reversal of) provision for credit losses ¹

(34,734)

 

118,392

 

 

(20,934)

 

(20,699)

 

(5,000)

 

11,899

 

16,853

 

Net interest income after provision for loan and lease losses

436,461

 

301,033

 

 

114,420

 

118,162

 

107,870

 

96,009

 

89,165

 

Noninterest income

 

 

 

 

 

 

 

 

Service charges and other fees

37,129

 

37,741

 

 

9,901

 

9,005

 

8,599

 

9,624

 

9,413

 

Wealth management fees

13,347

 

11,772

 

 

3,659

 

3,477

 

3,182

 

3,029

 

2,913

 

Mortgage banking income, net

11,337

 

8,959

 

 

1,400

 

2,157

 

3,690

 

4,090

 

3,780

 

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

249

 

7,890

 

 

2

 

—

 

(1)

 

248

 

7,890

 

Derivative interest expense

(12,727)

 

(8,722)

 

 

(3,035)

 

(3,117)

 

(3,182)

 

(3,393)

 

(3,541)

 

Change in fair value of FVO loans and related derivatives

3,468

 

(62,306)

 

 

988

 

4,110

 

42

 

(1,672)

 

(24,648)

 

Other derivative income (loss)

6,500

 

60

 

 

817

 

1,530

 

3,255

 

898

 

(890)

 

Other

7,261

 

4,623

 

 

2,120

 

2,209

 

1,608

 

1,324

 

1,133

 

Total noninterest income (loss)

66,564

 

17

 

 

15,852

 

19,371

 

17,193

 

14,148

 

(3,950)

 

Noninterest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

154,288

 

149,441

 

 

37,370

 

40,239

 

39,125

 

37,554

 

37,182

 

Data processing and communication

27,526

 

24,455

 

 

7,701

 

7,054

 

6,545

 

6,226

 

6,742

 

Occupancy and equipment

21,270

 

21,273

 

 

5,441

 

5,105

 

5,511

 

5,213

 

5,332

 

Professional fees

21,332

 

21,961

 

 

9,039

 

4,644

 

3,734

 

3,915

 

5,552

 

Advertising

2,756

 

3,396

 

 

1,121

 

602

 

477

 

556

 

823

 

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

(1,782)

 

12,858

 

 

(1,313)

 

(760)

 

(54)

 

345

 

4,350

 

Goodwill and intangible assets impairment

—

 

742,352

 

 

—

 

—

 

—

 

—

 

—

 

Other

15,366

 

31,632

 

 

4,340

 

3,621

 

3,765

 

3,640

 

14,955

 

Total noninterest expense

240,756

 

1,007,368

 

 

63,699

 

60,505

 

59,103

 

57,449

 

74,936

 

Income (loss) before income taxes

262,269

 

(706,318)

 

 

66,573

 

77,028

 

65,960

 

52,708

 

10,279

 

Provision for (benefit from) income taxes

59,011

 

(25,510)

 

 

14,682

 

18,279

 

14,661

 

11,389

 

(857)

 

Net income (loss)

$

203,258

 

$

(680,808)

 

 

$

51,891

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

1 For the three and twelve months ended September 30, 2021, this line includes a $0.8 million and $1.1 million decrease in provision for unfunded commitments reserve, respectively. For the three and twelve months ended September 30, 2020, a decrease of $0.9 million and an increase of $1.9 million, respectively, in provision for unfunded commitments reserve were recorded in other noninterest expense in the consolidated income statement.

 

GREAT WESTERN BANCORP, INC.

 

 

 

 

 

 

 

 

 

Summarized Consolidated Balance Sheet (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

As of

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

September 30, 2020

 

(dollars in thousands)

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,552,260

 

 

$

1,756,345

 

 

$

1,383,071

 

 

$

1,061,796

 

 

$

432,887

 

Investment securities

2,710,953

 

 

2,383,959

 

 

2,265,261

 

 

2,059,615

 

 

1,774,626

 

Total loans

8,185,053

 

 

8,477,783

 

 

9,011,352

 

 

9,517,876

 

 

10,076,142

 

Allowance for credit losses ¹

(246,038)

 

 

(270,298)

 

 

(295,953)

 

 

(308,794)

 

 

(149,887)

 

Loans, net

7,939,015

 

 

8,207,485

 

 

8,715,399

 

 

9,209,082

 

 

9,926,255

 

Other assets

709,240

 

 

722,440

 

 

650,008

 

 

483,890

 

 

470,671

 

Total assets

$

12,911,468

 

 

$

13,070,229

 

 

$

13,013,739

 

 

$

12,814,383

 

 

$

12,604,439

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

2,608,579

 

 

$

2,958,488

 

 

$

2,845,309

 

 

$

2,858,455

 

 

$

2,586,743

 

Interest-bearing deposits

8,701,887

 

 

8,579,289

 

 

8,718,745

 

 

8,514,863

 

 

8,422,036

 

Total deposits

11,310,466

 

 

11,537,777

 

 

11,564,054

 

 

11,373,318

 

 

11,008,779

 

Securities sold under agreements to repurchase

91,289

 

 

80,167

 

 

63,153

 

 

80,355

 

 

65,506

 

FHLB advances and other borrowings

120,000

 

 

120,000

 

 

120,000

 

 

120,000

 

 

195,000

 

Other liabilities

188,234

 

 

171,216

 

 

172,613

 

 

172,209

 

 

172,221

 

Total liabilities

11,709,989

 

 

11,909,160

 

 

11,919,820

 

 

11,745,882

 

 

11,441,506

 

Stockholders' equity

1,201,479

 

 

1,161,069

 

 

1,093,919

 

 

1,068,501

 

 

1,162,933

 

Total liabilities and stockholders' equity

$

12,911,468

 

 

$

13,070,229

 

 

$

13,013,739

 

 

$

12,814,383

 

 

$

12,604,439

 

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:

 

September 30, 2021

 

June 30, 2021

 

March 31, 2021

 

December 31, 2020

 

September 30, 2020

 

Change

($)

Change

(%)

 

(dollars in thousands)

Construction and development

$

394,712

 

 

$

433,293

 

 

$

472,939

 

 

$

482,462

 

 

$

415,440

 

 

$

(20,728)

 

(5.0)

%

Owner-occupied CRE

1,357,715

 

 

1,318,196

 

 

1,381,693

 

 

1,411,558

 

 

1,411,894

 

 

(54,179)

 

(3.8)

%

Non-owner-occupied CRE

2,191,848

 

 

2,244,335

 

 

2,340,206

 

 

2,660,682

 

 

2,910,965

 

 

(719,117)

 

(24.7)

%

Multifamily residential real estate

539,063

 

 

592,544

 

 

619,353

 

 

476,159

 

 

536,642

 

 

2,421

 

0.5

%

Total commercial real estate

4,483,338

 

 

4,588,368

 

 

4,814,191

 

 

5,030,861

 

 

5,274,941

 

 

(791,603)

 

(15.0)

%

Agriculture

1,428,614

 

 

1,438,499

 

 

1,549,926

 

 

1,635,952

 

 

1,724,350

 

 

(295,736)

 

(17.2)

%

Commercial non-real estate

1,535,394

 

 

1,710,938

 

 

1,897,569

 

 

2,054,478

 

 

2,181,656

 

 

(646,262)

 

(29.6)

%

Residential real estate

628,098

 

 

631,688

 

 

660,450

 

 

708,086

 

 

830,102

 

 

(202,004)

 

(24.3)

%

Consumer and other ¹

109,609

 

 

108,290

 

 

89,216

 

 

88,499

 

 

100,553

 

 

9,056

 

9.0

%

Total loans

8,185,053

 

 

8,477,783

 

 

9,011,352

 

 

9,517,876

 

 

10,111,602

 

 

(1,926,549)

 

(19.1)

%

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

$

8,185,053

 

 

$

8,477,783

 

 

$

9,011,352

 

 

$

9,517,876

 

 

$

10,076,142

 

 

$

(1,891,089)

 

(18.8)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

September 30, 2021

 

June 30, 2021

 

September 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

$

1,466,674

 

$

607

 

0.16

%

 

$

1,357,821

 

$

306

 

0.09

%

 

$

167,048

 

$

105

 

0.25

%

Other interest-earning assets

127,321

 

351

 

1.09

%

 

121,981

 

348

 

1.14

%

 

—

 

—

 

—

%

Investment securities

2,531,714

 

8,916

 

1.40

%

 

2,318,325

 

8,642

 

1.50

%

 

1,992,448

 

9,294

 

1.86

%

Non-ASC 310-30 loans, net ³

8,053,490

 

89,626

 

4.42

%

 

8,500,919

 

94,923

 

4.48

%

 

9,977,591

 

107,813

 

4.30

%

ASC 310-30 loans, net ⁴

—

 

—

 

—

%

 

—

 

—

 

—

%

 

47,006

 

1,217

 

10.30

%

Loans, net

8,053,490

 

89,626

 

4.42

%

 

8,500,919

 

94,923

 

4.48

%

 

10,024,597

 

109,030

 

4.33

%

Total interest-earning assets

12,179,199

 

99,500

 

3.24

%

 

12,299,046

 

104,219

 

3.40

%

 

12,184,093

 

118,429

 

3.87

%

Noninterest-earning assets

741,138

 

 

 

 

743,109

 

 

 

 

610,228

 

 

 

Total assets

$

12,920,337

 

$

99,500

 

3.05

%

 

$

13,042,155

 

$

104,219

 

3.21

%

 

$

12,794,321

 

$

118,429

 

3.68

%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

2,898,276

 

 

 

 

$

2,863,176

 

 

 

 

$

2,575,732

 

 

 

Interest-bearing deposits

7,696,542

 

$

2,066

 

0.11

%

 

7,834,032

 

$

2,618

 

0.13

%

 

7,079,302

 

$

4,534

 

0.25

%

Time deposits

759,420

 

712

 

0.37

%

 

863,923

 

887

 

0.41

%

 

1,371,589

 

3,251

 

0.94

%

Total deposits

11,354,238

 

2,778

 

0.10

%

 

11,561,131

 

3,505

 

0.12

%

 

11,026,623

 

7,785

 

0.28

%

Securities sold under agreements to repurchase

88,511

 

17

 

0.08

%

 

74,785

 

14

 

0.08

%

 

73,451

 

18

 

0.10

%

FHLB advances and other borrowings

120,032

 

861

 

2.85

%

 

120,000

 

853

 

2.85

%

 

315,641

 

2,203

 

2.78

%

Subordinated debentures and subordinated notes payable

108,947

 

784

 

2.85

%

 

108,913

 

789

 

2.91

%

 

108,812

 

897

 

3.28

%

Total borrowings

317,490

 

1,662

 

2.08

%

 

303,698

 

1,656

 

2.19

%

 

497,904

 

3,118

 

2.49

%

Total interest-bearing liabilities

11,671,728

 

$

4,440

 

0.15

%

 

11,864,829

 

$

5,161

 

0.17

%

 

11,524,527

 

$

10,903

 

0.38

%

Noninterest-bearing liabilities

71,844

 

 

 

 

63,535

 

 

 

 

94,798

 

 

 

Stockholders' equity

1,176,765

 

 

 

 

1,113,791

 

 

 

 

1,174,996

 

 

 

Total liabilities and stockholders' equity

$

12,920,337

 

 

 

 

$

13,042,155

 

 

 

 

$

12,794,321

 

 

 

Net interest spread

 

 

2.90

%

 

 

 

3.04

%

 

 

 

3.30

%

Net interest income and net interest margin (FTE)

 

$

95,060

 

3.10

%

 

 

$

99,058

 

3.23

%

 

 

$

107,526

 

3.51

%

Less: Tax equivalent adjustment

 

1,574

 

 

 

 

1,595

 

 

 

 

1,508

 

 

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

 

$

93,486

 

3.05

%

 

 

$

97,463

 

3.18

%

 

 

$

106,018

 

3.46

%

1 Annualized for all partial-year periods.

2 Interest income includes nominal amounts for the fourth quarter of fiscal year 2020 resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets. For the fourth 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 fourth 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

September 30, 2021

 

September 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

$

1,033,690

 

$

1,229

 

0.12

%

 

$

100,385

 

$

1,383

 

1.38

%

Other interest-earning assets

85,144

 

943

 

1.11

%

 

—

 

—

 

—

%

Investment securities

2,225,913

 

33,995

 

1.53

%

 

1,967,873

 

42,653

 

2.17

%

Non-ASC 310-30 loans, net ³

8,784,577

 

395,321

 

4.50

%

 

9,750,677

 

449,855

 

4.61

%

ASC 310-30 loans, net ⁴

—

 

—

 

—

%

 

49,731

 

5,827

 

11.72

%

Loans, net

8,784,577

 

395,321

 

4.50

%

 

9,800,408

 

455,682

 

4.65

%

Total interest-earning assets

12,129,324

 

431,488

 

3.56

%

 

11,868,666

 

499,718

 

4.21

%

Noninterest-earning assets

675,299

 

 

 

 

937,489

 

 

 

Total assets

$

12,804,623

 

$

431,488

 

3.37

%

 

$

12,806,155

 

$

499,718

 

3.90

%

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Noninterest-bearing deposits

$

2,784,732

 

 

 

 

$

2,227,518

 

 

 

Interest-bearing deposits

7,589,788

 

$

11,846

 

0.16

%

 

6,708,650

 

$

35,594

 

0.53

%

Time deposits

953,724

 

4,908

 

0.51

%

 

1,584,191

 

23,009

 

1.45

%

Total deposits

11,328,244

 

16,754

 

0.15

%

 

10,520,359

 

58,603

 

0.56

%

Securities sold under agreements to repurchase

77,804

 

62

 

0.08

%

 

65,248

 

88

 

0.13

%

FHLB advances and other borrowings

120,008

 

3,419

 

2.85

%

 

473,689

 

10,940

 

2.31

%

Subordinated debentures and subordinated notes payable

108,897

 

3,182

 

2.92

%

 

108,739

 

4,516

 

4.15

%

Total borrowings

306,709

 

6,663

 

2.17

%

 

647,676

 

15,544

 

2.40

%

Total interest-bearing liabilities

11,634,953

 

$

23,417

 

0.20

%

 

11,168,035

 

$

74,147

 

0.66

%

Noninterest-bearing liabilities

64,165

 

 

 

 

96,806

 

 

 

Stockholders' equity

1,105,505

 

 

 

 

1,541,314

 

 

 

Total liabilities and stockholders' equity

$

12,804,623

 

 

 

 

$

12,806,155

 

 

 

Net interest spread

 

 

3.17

%

 

 

 

3.24

%

Net interest income and net interest margin (FTE)

 

$

408,071

 

3.36

%

 

 

$

425,571

 

3.59

%

Less: Tax equivalent adjustment

 

6,344

 

 

 

 

6,146

 

 

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

 

$

401,727

 

3.31

%

 

 

$

419,425

 

3.53

%

2 Interest income includes $0.9 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 $1.4 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 twelve months ended:

 

At and for the three months ended:

 

September 30, 2021

September 30, 2020

 

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

 

(dollars in thousands except share and per share amounts)

Adjusted net income and adjusted earnings per common share:

 

 

 

 

 

 

 

 

Net income (loss) - GAAP

$

203,258

 

$

(680,808)

 

 

$

51,891

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

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

$

203,258

 

$

88,890

 

 

$

51,891

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

Weighted average diluted common shares outstanding

55,443,909

 

55,612,251

 

 

55,546,917

 

55,524,979

 

55,456,399

 

55,247,343

 

55,164,548

 

Earnings per common share - diluted

$

3.67

 

$

(12.24)

 

 

$

0.93

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

Adjusted earnings per common share - diluted

$

3.67

 

$

1.60

 

 

$

0.93

 

$

1.06

 

$

0.93

 

$

0.75

 

$

0.20

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Income (loss) before income taxes - GAAP

$

262,269

 

$

(706,318)

 

 

$

66,573

 

$

77,028

 

$

65,960

 

$

52,708

 

$

10,279

 

Add: (Reversal of) provision for credit losses - GAAP

(34,734)

 

118,392

 

 

(20,934)

 

(20,699)

 

(5,000)

 

11,899

 

16,853

 

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

(3,468)

 

62,306

 

 

(988)

 

(4,110)

 

(42)

 

1,672

 

24,648

 

Add: Goodwill impairment - GAAP

—

 

742,352

 

 

—

 

—

 

—

 

—

 

—

 

Pre-tax pre-provision income

$

224,067

 

$

216,732

 

 

$

44,651

 

$

52,219

 

$

60,918

 

$

66,279

 

$

51,780

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible net income and return on average tangible common equity:

 

 

 

 

 

 

 

 

Net income (loss) - GAAP

$

203,258

 

$

(680,808)

 

 

$

51,891

 

$

58,749

 

$

51,299

 

$

41,319

 

$

11,136

 

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

1,014

 

714,339

 

 

239

 

253

 

261

 

261

 

261

 

Tangible net income

$

204,272

 

$

33,531

 

 

$

52,130

 

$

59,002

 

$

51,560

 

$

41,580

 

$

11,397

 

Average common equity

$

1,105,505

 

$

1,541,314

 

 

$

1,176,765

 

$

1,113,791

 

$

1,049,388

 

$

1,082,077

 

$

1,174,996

 

Less: Average goodwill and other intangible assets

5,619

 

375,549

 

 

5,244

 

5,485

 

5,742

 

6,004

 

6,265

 

Average tangible common equity

$

1,099,886

 

$

1,165,765

 

 

$

1,171,521

 

$

1,108,306

 

$

1,043,646

 

$

1,076,073

 

$

1,168,731

 

Return on average common equity *

18.4

%

(44.2)

%

 

17.5

%

21.2

%

19.8

%

15.2

%

3.8

%

Return on average tangible common equity **

18.6

%

2.9

%

 

17.7

%

21.4

%

20.0

%

15.3

%

3.9

%

* 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

$

401,727

 

$

419,425

 

 

$

93,486

 

$

97,463

 

$

102,870

 

$

107,908

 

$

106,018

 

Add: Tax equivalent adjustment

6,344

 

6,146

 

 

1,574

 

1,595

 

1,577

 

1,598

 

1,508

 

Net interest income (FTE)

408,071

 

425,571

 

 

95,060

 

99,058

 

104,447

 

109,506

 

107,526

 

Add: Derivative interest expense

(12,727)

 

(8,721)

 

 

(3,035)

 

(3,117)

 

(3,182)

 

(3,393)

 

(3,541)

 

Adjusted net interest income (FTE)

$

395,344

 

$

416,850

 

 

$

92,025

 

$

95,941

 

$

101,265

 

$

106,113

 

$

103,985

 

Average interest-earning assets

$

12,129,324

 

$

11,868,666

 

 

$

12,179,199

 

$

12,299,046

 

$

12,073,497

 

$

11,965,555

 

$

12,184,093

 

Net interest margin (FTE) *

3.36

%

3.59

%

 

3.10

%

3.23

%

3.51

%

3.63

%

3.51

%

Adjusted net interest margin (FTE) **

3.26

%

3.51

%

 

3.00

%

3.13

%

3.40

%

3.52

%

3.40

%

* 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

$

388,977

 

$

443,709

 

 

$

88,052

 

$

93,328

 

$

100,274

 

$

107,323

 

$

106,305

 

Add: Tax equivalent adjustment

6,344

 

6,146

 

 

1,574

 

1,595

 

1,577

 

1,598

 

1,508

 

Interest income (FTE)

395,321

 

449,855

 

 

89,626

 

94,923

 

101,851

 

108,921

 

107,813

 

Add: Derivative interest expense

(12,727)

 

(8,721)

 

 

(3,035)

 

(3,117)

 

(3,182)

 

(3,393)

 

(3,541)

 

Adjusted interest income (FTE)

$

382,594

 

$

441,134

 

 

$

86,591

 

$

91,806

 

$

98,669

 

$

105,528

 

$

104,272

 

Average non-ASC310-30 loans

$

8,784,577

 

$

9,750,677

 

 

$

8,053,490

 

$

8,500,919

 

$

9,016,221

 

$

9,567,679

 

$

9,977,591

 

Yield (FTE) *

4.50

%

4.61

%

 

4.42

%

4.48

%

4.58

%

4.52

%

4.30

%

Adjusted yield (FTE) **

4.36

%

4.52

%

 

4.27

%

4.33

%

4.44

%

4.38

%

4.16

%

* 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

$

468,291

 

$

419,442

 

 

$

109,338

 

$

116,834

 

$

120,063

 

$

122,056

 

$

102,068

 

Add: Tax equivalent adjustment

6,344

 

6,146

 

 

1,574

 

1,595

 

1,577

 

1,598

 

1,508

 

Total revenue (FTE)

$

474,635

 

$

425,588

 

 

$

110,912

 

$

118,429

 

$

121,640

 

$

123,654

 

$

103,576

 

Noninterest expense

$

240,756

 

$

1,007,368

 

 

$

63,699

 

$

60,505

 

$

59,103

 

$

57,449

 

$

74,936

 

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

1,014

 

743,745

 

 

239

 

253

 

261

 

261

 

261

 

Tangible noninterest expense

$

239,742

 

$

263,623

 

 

$

63,460

 

$

60,252

 

$

58,842

 

$

57,188

 

$

74,675

 

Efficiency ratio *

50.5

%

61.9

%

 

57.2

%

50.9

%

48.4

%

46.2

%

72.1

%

* 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

$

1,201,479

 

$

1,162,933

 

 

$

1,201,479

 

$

1,161,069

 

$

1,093,919

 

$

1,068,501

 

$

1,162,933

 

Less: Goodwill and other intangible assets

5,151

 

6,164

 

 

5,151

 

5,390

 

5,643

 

5,904

 

6,164

 

Tangible common equity

$

1,196,328

 

$

1,156,769

 

 

$

1,196,328

 

$

1,155,679

 

$

1,088,276

 

$

1,062,597

 

$

1,156,769

 

Total assets

$

12,911,468

 

$

12,604,439

 

 

$

12,911,468

 

$

13,070,229

 

$

13,013,739

 

$

12,814,383

 

$

12,604,439

 

Less: Goodwill and other intangible assets

5,151

 

6,164

 

 

5,151

 

5,390

 

5,643

 

5,904

 

6,164

 

Tangible assets

$

12,906,317

 

$

12,598,275

 

 

$

12,906,317

 

$

13,064,839

 

$

13,008,096

 

$

12,808,479

 

$

12,598,275

 

Tangible common equity to tangible assets

9.3

%

9.2

%

 

9.3

%

8.8

%

8.4

%

8.3

%

9.2

%

 

 

 

 

 

 

 

 

 

Tangible book value per share:

 

 

 

 

 

 

 

 

Total stockholders' equity

$

1,201,479

 

$

1,162,933

 

 

$

1,201,479

 

$

1,161,069

 

$

1,093,919

 

$

1,068,501

 

$

1,162,933

 

Less: Goodwill and other intangible assets

5,151

 

6,164

 

 

5,151

 

5,390

 

5,643

 

5,904

 

6,164

 

Tangible common equity

$

1,196,328

 

$

1,156,769

 

 

$

1,196,328

 

$

1,155,679

 

$

1,088,276

 

$

1,062,597

 

$

1,156,769

 

Common shares outstanding

55,116,503

 

55,014,189

 

 

55,116,503

 

55,116,095

 

55,111,403

 

55,105,105

 

55,014,189

 

Book value per share - GAAP

$

21.80

 

$

21.14

 

 

$

21.80

 

$

21.07

 

$

19.85

 

$

19.39

 

$

21.14

 

Tangible book value per share

$

21.71

 

$

21.03

 

 

$

21.71

 

$

20.97

 

$

19.75

 

$

19.28

 

$

21.03

 

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211026006046/en/

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