Great Western Bancorp, Inc. Announces Earnings for Fourth Quarter & Full Fiscal Year 2020 | Financial Buzz

Great Western Bancorp, Inc. Announces Earnings for Fourth Quarter & Full Fiscal Year 2020

Great Western Bancorp, Inc. (NYSE: GWB) today reported net income of $11.1 million, or $0.20 per diluted share, for the fourth quarter of fiscal year 2020, compared to net income of $5.4 million, or $0.10 per diluted share, for the third quarter of fiscal year 2020. Net loss for fiscal year 2020 was $680.8 million, or $12.24 per diluted share. Adjusted net income 2 which excludes the COVID-19 pandemic impact on goodwill, certain intangible assets and credit and other related charges, was $88.9 million, or $1.60 per diluted share, compared to net income of $167.4 million, or $2.92 per diluted share for fiscal year 2019.

“This quarter’s results bring to a close what has been a challenging fiscal year,” said Mark Borrecco, President and Chief Executive Officer. “Our underlying earnings were again offset with increased credit charges and costs from strategic actions to improve the position of the bank. This includes the closure of our Wichita LPO, a reduction of FTEs to align with current market conditions, payoff of $205.0 million in FHLB borrowings to right-size the balance sheet and improve future earnings, and a commitment to a new platform to support our small business initiative. Asset quality continues to be our primary focus resulting in higher frequency monitoring and proactive issue identification. We used a third party to complete a supplemental review of critical areas of the loan portfolio this quarter, confirming the risk ratings of our portfolio. As a result of the actions we have taken, including the dividend reductions, we saw an improvement of our capital ratios as we remain above well-capitalized regulatory limits.”

“The COVID-19 pandemic is still running its course, and the uncertainty of its continued impact on the economy and on families and individuals is not something we are taking lightly. As we work through these difficult times, we continue to seek to make conservative decisions as we pivot and optimize our resources in this time of disruption. I continue to be proud of the contributions made by our employees as we maintain our focus on serving our customers and supporting our communities.”

Impact and Response to COVID-19 Pandemic

Through this time of disruption we remain committed to keeping our employees safe and our bank running effectively to serve our customers. We have reopened all of our branches and are continuing shut down protocols according to CDC guidelines when we become aware of a possible close contact scenario, and a majority of our employees who can work outside of our offices are doing so. Social distancing, restrictions on in-person meetings and conferences, company travel restrictions and increased sanitary protocols all remain in place and are all intended to offer the best protection for our employees and customers and enhance our ability to provide our banking services. We are supporting our employees with paid time off, work from home flexibility and paid time for volunteering. Finally, we supported the Paycheck Protection Program, having provided $727.3 million in loans to over 4,800 customers, improved engagement with customers in impacted segments, and remained committed to working with customers for solutions as we transition through loan deferral expirations and new requests.

Net Interest Income and Net Interest Margin 1

Net interest income was $107.5 million for the quarter, a decrease of $0.3 million, or 0.3%, from the prior quarter. Interest income was lower by $3.0 million as a result of decreases in loan interest of $1.8 million and securities interest of $1.2 million, primarily as a result of repricing in a lower rate environment. The decrease in interest income was offset with a $2.7 million reduction in interest expense as a result of a $2.2 million decrease in deposit interest due to lower rates on interest-bearing deposits combined with time deposit runoff, and a $0.5 million decrease in interest as a result of a reduction in higher interest borrowings.

Net interest margin was 3.51% for the quarter, a decrease of 6 basis points from the prior quarter. Adjusted net interest margin 2, which adjusts for the realized gain (loss) on interest rate swaps, was 3.40% for the quarter, a decrease of 7 basis points from the prior quarter. Net interest margin declined a net 16 basis points as yields on the securities and loan portfolios decreased 27 and 12 basis points, respectively, due to renewing volumes impacted by a lower repricing environment, combined with a benefit from PPP loan income and lower nonaccrual interest reversals. Offsetting that impact was a 7 basis point lift from a 24% decrease in deposit yields by 9 basis points from lower offering rates and improved mix. In addition, there was a 2 basis point lift from reduced borrowings, including the nominal yield impact resulting from the payoff of $205 million in higher interest FHLB borrowings offset with a reduction in securities and cash late in the quarter.

Noninterest Income

Noninterest income items resulted in a $4.0 million loss for the quarter, compared to a loss of $11.7 million for the prior quarter. Service charges and other fee income increased $1.7 million with a rebound in transaction activity, mortgage banking income increased $1.4 million on stronger origination demand, and wealth management revenue remained flat compared to the prior quarter.

As part of the reduction in higher interest FHLB borrowings, a $7.6 million prepayment charge was recognized in other noninterest expense, which was offset with a sale in investment securities which resulted in a $7.9 million realized gain.

Noninterest income items related to loans carried at fair value this quarter include an $8.0 million charge for a classified loan sold in September, $4.3 million charge for credit risk and swap break fees for a loan moved to substandard, and a $12.5 million charge for credit risk on the remaining fair value portfolio based on updated default risk assumptions. In addition, the interest rate cost on total swap derivatives for the quarter was $3.5 million, compared to $3.0 million for the prior quarter.

Noninterest Expense

Total noninterest expense was $74.9 million for the quarter, an increase of $7.9 million from the prior quarter. This quarter included a $7.6 million expense related to the early payment of FHLB borrowings, $2.0 million expense related to the completion of the FDIC loss-sharing agreement, which ended June 4, 2020, and net credit related charges of $3.4 million related to OREO and unfunded commitment reserves, along with approximately $1.8 million in severances, closure costs for the Wichita LPO and consulting costs.

The efficiency ratio1 was 72.1% for the quarter, compared to 69.4% for the prior quarter.

Provision for Loan and Lease Losses and Asset Quality

The ALLL to total loans increased to 1.49% as of September 30, 2020 from 1.44% as of June 30, 2020, an increase of 5 basis points from the prior quarter. Excluding PPP loans the ratio was 1.60%. Provision for loan and lease losses was $16.9 million, a decrease of $4.8 million, with the quarterly provision related to increased specific reserves on a number of loans moved to substandard in the quarter. Net charge-offs were $15.1 million, or 0.59% of average total loans (annualized) for the quarter, up $5.7 million and 22 basis points from the prior quarter, respectively. Charge-offs were related to a dairy facility, a health care facility and various other loans charged off in the quarter.

Included within total loans are approximately $655.2 million of loans with maturities greater than 5 years that use derivatives to manage a fixed rate structure for the customer and for which management has elected the fair value accounting option. These loans are excluded from the ALLL process, but management has estimated that approximately $30.5 million of the fair value adjustment for these loans relates to credit risk, or 0.30% of total loans. In addition, total purchase discount remaining on all acquired loans equates to 0.08% of total loans.

Loans graded “Substandard” or worse were $769.5 million for the quarter, an increase of $66.7 million from the prior quarter. The increase was primarily due to the downgrade of a dairy relationship, a number of hotel loans and various other commercial and agriculture loans that deteriorated in the quarter, partially offset with the sale of a health care facility loan in September. Nonaccrual loans were $324.9 million for the quarter, or 3.22% of total loans, an increase of $50.5 million from the prior quarter, or 2.66% of total loans. The increase was largely due to one dairy relationship. Watch loans were $982.8 million for the quarter, an increase of $505.7 million. The increase was primarily a result of $230.0 million in hotels & resorts, $109.0 million in healthcare and $75.0 million in other CRE relationships moving to Watch, reflecting the current operating environment. The Watch category will be retired for the December 2020 quarter and replaced with the Special Mention category to better align to peers. Total other repossessed property balances were $20.0 million for the quarter, an increase of $0.8 million from the prior quarter.

Beginning with the third fiscal quarter of 2020, we ceased separating credit-related charges between those related or unrelated to the COVID-19 pandemic as it has become more difficult to attribute losses caused or not caused by the pandemic as it continues. 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,

2020

 

September 30,

2019

 

September 30,

2020

 

June 30,

2020

 

September 30,

2019

 

 

 

 

(dollars in thousands)

Charges unrelated to COVID-19 pandemic

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

Provision for loan and lease losses

 

$

58,680

 

 

$

40,947

 

 

$

16,853

 

 

$

21,641

 

 

$

1,982

 

Net other repossessed property charges

 

Net loss on repossessed property and other related expenses

 

9,544

 

 

4,367

 

 

4,350

 

 

2,475

 

 

305

 

Net reversal (recovery) of interest income on nonaccrual loans

 

Interest income on loans

 

4,894

 

 

312

 

 

730

 

 

1,070

 

 

(157)

 

Increase (decrease) in unfunded commitment reserve

 

Other noninterest expense

 

1,495

 

 

 

 

(920)

 

 

2,215

 

 

 

Net credit loss on derivatives

 

Net realized and unrealized loss on derivatives

 

2,952

 

 

 

 

1,243

 

 

1,709

 

 

 

Loan fair value adjustment related to credit

 

Net decrease in fair value of loans at fair value

 

52,256

 

 

7,664

 

 

23,407

 

 

23,292

 

 

2,085

 

Subtotal charges unrelated to COVID-19 pandemic

 

 

 

$

129,821

 

 

$

53,290

 

 

$

45,663

 

 

$

52,402

 

 

$

4,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Charges related to COVID-19 pandemic

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan and lease losses

 

Provision for loan and lease losses

 

$

59,712

 

 

$

 

 

$

 

 

$

 

 

$

 

Net other repossessed property charges

 

Net loss on repossessed property and other related expenses

 

3,314

 

 

 

 

 

 

 

 

 

Net reversal (recovery) of interest income on nonaccrual loans

 

Interest income on loans

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in unfunded commitment reserve

 

Other noninterest expense

 

444

 

 

 

 

 

 

 

 

 

Net credit loss on derivatives

 

Net realized and unrealized loss on derivatives

 

 

 

 

 

 

 

 

 

 

Loan fair value adjustment related to credit

 

Net decrease in fair value of loans at fair value

 

7,100

 

 

 

 

 

 

 

 

 

Subtotal charges related to COVID-19 pandemic

 

 

 

70,570

 

 

 

 

 

 

 

 

 

Total credit-related charges

 

 

 

$

200,391

 

 

$

53,290

 

 

$

45,663

 

 

$

52,402

 

 

$

4,215

 

We continue to evaluate the impact of COVID-19 on our loan portfolio. Industries such as hotels & resorts, restaurants, oil & energy, retail malls, airlines and healthcare have experienced significant revenue loss due to COVID-19. Within our portfolio we have identified the following segments with elevated risk: hotels & resorts with $1.21 billion, or 12.0% of total loans, restaurants with $156.5 million, or 1.6% of total loans, arts and entertainment with $130.3 million, or 1.3% of total loans, senior care with $330.7 million, or 3.3% of total loans, and skilled nursing with $250.9 million, or 2.5% of total loans, for a total exposure of $2.07 billion, or 20.7% of total loans. Loan exposure in such other identified industries is either immaterial or has not shown general distress thus far. Loan deferrals related to COVID-19 relief have declined from 17.7% of loans excluding PPP in the prior quarter to 2.0% this quarter. At this time it is difficult to determine ultimate impact upon our portfolio, but we are of the view the credit-related adjustments reflect the best estimate of incurred losses in our portfolio as of September 30, 2020.

Loans and Deposits

Total loans outstanding were $10.08 billion as of September 30, 2020, a decrease of $0.24 billion from the prior quarter. The decrease in loans during the quarter was mainly attributable to the agriculture segment of the portfolio, which decreased $0.09 billion, the CRE segment, which decreased $0.08 billion, and the commercial non-real estate segment, which decreased $0.05 billion. The decline in the loan balances was driven by the exit of a large commercial non-real estate facility, progress in deleveraging of agriculture and commercial problem loans in workout, an acceleration of paydowns in commercial and consumer HELOC balances and a decrease in new volume originations due to softer demand.

Total deposits were $11.01 billion as of September 30, 2020, a decrease of $0.14 billion from the prior quarter, due to a continued decrease in time deposits by $0.10 billion and a decrease of $0.09 billion for brokered funds and public deposits, offset with a net increase in checking and savings balances of $0.05 billion.

Capital

Tier 1 and total capital ratios were 11.8% and 13.3%, respectively, as of September 30, 2020, compared to 11.3% and 12.9% as of June 30, 2020. The common equity tier 1 capital ratio and tier 1 leverage ratio were 11.0% and 9.4%, respectively, as of September 30, 2020, compared to 10.6% and 9.3% as of June 30, 2020. All regulatory capital ratios remain above regulatory minimums to be considered “well capitalized” and above internal thresholds, which are in excess of regulatory minimums.

On October 28, 2020, the Company’s Board of Directors declared a dividend of $0.01 per common share payable on November 27, 2020 to stockholders of record as of close of business on November 12, 2020. The aggregate dividend payment will be approximately $0.6 million.

Provision for Income Taxes

The benefit from income taxes for the quarter ended September 30, 2020 was $0.9 million, compared to a provision for income taxes of $0.5 million for the prior quarter, reflecting an adjustment to the expected tax liability due to lower taxable income realized in the fiscal year.

Conference Call

Great Western Bancorp, Inc. will host a conference call to discuss its financial results for the fourth quarter of fiscal year 2020 on Wednesday, October 28, 2020 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 in the Investor Relations section of Great Western’s website at www.greatwesternbank.com. A replay will be available beginning one hour following the conference call and ending on November 11, 2020. To access the replay, dial (877) 344-7529 (U.S.) and use conference ID 10149074 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 and agribusiness 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 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 June 30, 2020, March 31, 2020 and December 31, 2019 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 twelve months ended:

 

At and for the three months ended:

 

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

June 30,

2020

 

March 31,

2020

 

December 31,

2019

 

September 30,

2019

 

 

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

Operating Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (FTE)

 

$

499,718

 

 

$

548,760

 

 

$

118,429

 

 

$

121,472

 

 

$

126,757

 

 

$

133,060

 

 

$

140,257

 

Interest expense

 

74,147

 

 

122,209

 

 

10,903

 

 

13,620

 

 

23,260

 

 

26,364

 

 

32,061

 

Noninterest income

 

17

 

 

60,732

 

 

(3,950)

 

 

(11,683)

 

 

(83)

 

 

15,733

 

 

15,023

 

Noninterest expense

 

1,007,368

 

 

224,898

 

 

74,936

 

 

67,049

 

 

808,453

 

 

56,930

 

 

55,212

 

Provision for loan and lease losses

 

118,392

 

 

40,947

 

 

16,853

 

 

21,641

 

 

71,795

 

 

8,103

 

 

1,982

 

Net income

 

(680,808)

 

 

167,365

 

 

11,136

 

 

5,400

 

 

(740,618)

 

 

43,274

 

 

50,285

 

Adjusted net income ¹

 

$

88,890

 

 

$

167,365

 

 

$

11,136

 

 

$

5,400

 

 

$

29,080

 

 

$

43,274

 

 

$

50,285

 

Common shares outstanding

 

55,014,189

 

56,283,659

 

55,014,189

 

55,014,047

 

55,013,928

 

56,382,915

 

56,283,659

Weighted average diluted common shares outstanding

 

55,612,251

 

57,257,061

 

55,164,548

 

55,145,619

 

55,906,002

 

56,457,967

 

56,804,172

Earnings per common share – diluted

 

$

(12.24)

 

 

$

2.92

 

 

$

0.20

 

 

$

0.10

 

 

$

(13.25)

 

 

$

0.77

 

 

$

0.89

 

Adjusted earnings per common share – diluted ¹

 

$

1.60

 

 

$

2.92

 

 

$

0.20

 

 

$

0.10

 

 

$

0.52

 

 

$

0.77

 

 

$

0.89

 

Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (FTE) ¹ ²

 

3.59

%

 

3.74

%

 

3.51

%

 

3.57

%

 

3.59

%

 

3.68

%

 

3.70

%

Adjusted net interest margin (FTE) ¹ ²

 

3.51

%

 

3.74

%

 

3.40

%

 

3.47

%

 

3.55

%

 

3.65

%

 

3.69

%

Return on average total assets ²

 

(5.32)

%

 

1.33

%

 

0.35

%

 

0.17

%

 

(23.16)

%

 

1.34

%

 

1.55

%

Return on average common equity ²

 

(44.2)

%

 

9.1

%

 

3.8

%

 

1.9

%

 

(155.3)

%

 

9.0

%

 

10.6

%

Return on average tangible common equity ¹ ²

 

2.9

%

 

15.3

%

 

3.9

%

 

2.0

%

 

(9.3)

%

 

15.0

%

 

17.6

%

Efficiency ratio ¹

 

61.9

%

 

45.8

%

 

72.1

%

 

69.4

%

 

63.5

%

 

46.2

%

 

44.5

%

Capital:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital ratio

 

11.8

%

 

11.7

%

 

11.8

%

 

11.3

%

 

11.3

%

 

12.0

%

 

11.7

%

Total capital ratio

 

13.3

%

 

12.7

%

 

13.3

%

 

12.9

%

 

12.9

%

 

13.0

%

 

12.7

%

Tier 1 leverage ratio

 

9.4

%

 

10.1

%

 

9.4

%

 

9.3

%

 

9.2

%

 

10.4

%

 

10.1

%

Common equity tier 1 ratio

 

11.0

%

 

11.0

%

 

11.0

%

 

10.6

%

 

10.6

%

 

11.3

%

 

11.0

%

Tangible common equity / tangible assets ¹

 

9.2

%

 

9.6

%

 

9.2

%

 

8.9

%

 

9.3

%

 

9.7

%

 

9.6

%

Book value per share – GAAP

 

$

21.14

 

 

$

33.76

 

 

$

21.14

 

 

$

21.10

 

 

$

20.97

 

 

$

34.06

 

 

$

33.76

 

Tangible book value per share ¹

 

$

21.03

 

 

$

20.52

 

 

$

21.03

 

 

$

20.98

 

 

$

20.84

 

 

$

20.77

 

 

$

20.52

 

Asset Quality:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

324,946

 

 

$

107,191

 

 

$

324,946

 

 

$

274,475

 

 

$

213,075

 

 

$

156,113

 

 

$

107,191

 

Other repossessed property

 

$

20,034

 

 

$

36,764

 

 

$

20,034

 

 

$

19,231

 

 

$

27,289

 

 

$

39,490

 

 

$

36,764

 

Nonaccrual loans / total loans

 

3.22

%

 

1.10

%

 

3.22

%

 

2.66

%

 

2.20

%

 

1.62

%

 

1.10

%

Net charge-offs (recoveries)

 

$

39,279

 

 

$

34,713

 

 

$

15,124

 

 

$

9,433

 

 

$

8,626

 

 

$

6,096

 

 

$

7,754

 

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

 

0.40

%

 

0.36

%

 

0.59

%

 

0.37

%

 

0.36

%

 

0.25

%

 

0.31

%

Allowance for loan and lease losses / total loans

 

1.49

%

 

0.73

%

 

1.49

%

 

1.44

%

 

1.40

%

 

0.76

%

 

0.73

%

Watch-rated loans

 

$

982,841

 

 

$

405,549

 

 

$

982,841

 

 

$

477,128

 

 

$

420,252

 

 

$

416,259

 

 

$

405,549

 

Substandard or worse loans

 

$

769,515

 

 

$

478,717

 

 

$

769,515

 

 

$

702,795

 

 

$

629,327

 

 

$

640,501

 

 

$

478,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

GREAT WESTERN BANCORP, INC.

Consolidated Income Statement (Unaudited)

 

 

 

At and for the twelve months ended:

 

At and for the three months ended:

 

 

September 30,

2020

 

September 30,

2019

 

September 30,

2020

 

June 30,

2020

 

March 31,

2020

 

December 31,

2019

 

September 30,

2019

 

 

(dollars in thousands)

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

449,536

 

 

$

498,935

 

 

$

107,522

 

 

$

109,227

 

 

$

113,356

 

 

$

119,431

 

 

$

126,779

 

Investment securities

 

42,653

 

 

41,510

 

 

9,294

 

 

10,532

 

 

11,329

 

 

11,498

 

 

10,935

 

Federal funds sold and other

 

1,383

 

 

2,472

 

 

105

 

 

112

 

 

558

 

 

608

 

 

1,056

 

Total interest income

 

493,572

 

 

542,917

 

 

116,921

 

 

119,871

 

 

125,243

 

 

131,537

 

 

138,770

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

58,603

 

 

106,718

 

 

7,785

 

 

10,011

 

 

18,867

 

 

21,940

 

 

27,211

 

FHLB advances and other borrowings

 

11,028

 

 

9,951

 

 

2,221

 

 

2,539

 

 

3,155

 

 

3,113

 

 

3,487

 

Subordinated debentures and subordinated notes payable

 

4,516

 

 

5,540

 

 

897

 

 

1,070

 

 

1,238

 

 

1,311

 

 

1,363

 

Total interest expense

 

74,147

 

 

122,209

 

 

10,903

 

 

13,620

 

 

23,260

 

 

26,364

 

 

32,061

 

Net interest income

 

419,425

 

 

420,708

 

 

106,018

 

 

106,251

 

 

101,983

 

 

105,173

 

 

106,709

 

Provision for loan and lease losses

 

118,392

 

 

40,947

 

 

16,853

 

 

21,641

 

 

71,795

 

 

8,103

 

 

1,982

 

Net interest income after provision for loan and lease losses

 

301,033

 

 

379,761

 

 

89,165

 

 

84,610

 

 

30,188

 

 

97,070

 

 

104,727

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and other fees

 

37,741

 

 

43,893

 

 

9,413

 

 

7,731

 

 

9,188

 

 

11,409

 

 

11,674

 

Wealth management fees

 

11,772

 

 

8,914

 

 

2,913

 

 

2,773

 

 

3,122

 

 

2,964

 

 

2,322

 

Mortgage banking income, net

 

8,959

 

 

4,848

 

 

3,780

 

 

2,422

 

 

1,145

 

 

1,612

 

 

1,482

 

Net gain (loss) on sale of securities

 

7,890

 

 

(178)

 

 

7,890

 

 

 

 

 

 

 

 

13

 

Net (decrease) increase in fair value of loans at fair value

 

(32,529)

 

 

61,412

 

 

(31,019)

 

 

(22,118)

 

 

35,541

 

 

(14,933)

 

 

11,749

 

Net realized and unrealized (loss) gain on derivatives

 

(38,439)

 

 

(63,444)

 

 

1,940

 

 

(3,681)

 

 

(50,214)

 

 

13,516

 

 

(13,191)

 

Other

 

4,623

 

 

5,287

 

 

1,133

 

 

1,190

 

 

1,135

 

 

1,165

 

 

974

 

Total noninterest income (loss)

 

17

 

 

60,732

 

 

(3,950)

 

 

(11,683)

 

 

(83)

 

 

15,733

 

 

15,023

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

149,441

 

 

136,305

 

 

37,182

 

 

39,042

 

 

37,312

 

 

35,905

 

 

33,099

 

Data processing and communication

 

24,455

 

 

24,077

 

 

6,742

 

 

5,817

 

 

6,123

 

 

5,773

 

 

6,602

 

Occupancy and equipment

 

21,273

 

 

20,784

 

 

5,332

 

 

5,251

 

 

5,597

 

 

5,093

 

 

5,185

 

Professional fees

 

21,961

 

 

14,579

 

 

5,552

 

 

7,382

 

 

5,263

 

 

3,764

 

 

3,398

 

Advertising

 

3,396

 

 

4,493

 

 

823

 

 

750

 

 

958

 

 

865

 

 

1,194

 

Net loss on repossessed property and other related expenses

 

12,858

 

 

4,367

 

 

4,350

 

 

2,475

 

 

5,691

 

 

342

 

 

305

 

Goodwill and intangible assets impairment

 

742,352

 

 

 

 

 

 

 

 

742,352

 

 

 

 

 

Other

 

31,632

 

 

20,293

 

 

14,955

 

 

6,332

 

 

5,157

 

 

5,188

 

 

5,429

 

Total noninterest expense

 

1,007,368

 

 

224,898

 

 

74,936

 

 

67,049

 

 

808,453

 

 

56,930

 

 

55,212

 

(Loss) income before income taxes

 

(706,318)

 

 

215,595

 

 

10,279

 

 

5,878

 

 

(778,348)

 

 

55,873

 

 

64,538

 

(Benefit from) provision for income taxes

 

(25,510)

 

 

48,230

 

 

(857)

 

 

478

 

 

(37,730)

 

 

12,599

 

 

14,253

 

Net (loss) income

 

$

(680,808)

 

 

$

167,365

 

 

$

11,136

 

 

$

5,400

 

 

$

(740,618)

 

 

$

43,274

 

 

$

50,285

 

GREAT WESTERN BANCORP, INC.

Summarized Consolidated Balance Sheet (Unaudited)

 

 

 

 

 

As of

 

 

September 30,

2020

 

June 30,

2020

 

March 31,

2020

 

December 31,

2019

 

September 30,

2019

 

 

(dollars in thousands)

Assets

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

432,887

 

 

$

311,585

 

 

$

347,486

 

 

$

247,421

 

 

$

243,474

 

Investment securities

 

1,774,626

 

 

1,972,626

 

 

1,990,027

 

 

1,904,291

 

 

1,783,208

 

Total loans

 

10,076,142

 

 

10,313,999

 

 

9,693,295

 

 

9,626,224

 

 

9,706,763

 

Allowance for loan and lease losses

 

(149,887)

 

 

(148,158)

 

 

(135,950)

 

 

(72,781)

 

 

(70,774)

 

Loans, net

 

9,926,255

 

 

10,165,841

 

 

9,557,345

 

 

9,553,443

 

 

9,635,989

 

Goodwill

 

 

 

 

 

 

 

740,562

 

 

739,023

 

Other assets

 

470,671

 

 

484,276

 

 

492,950

 

 

405,948

 

 

386,607

 

Total assets

 

$

12,604,439

 

 

$

12,934,328

 

 

$

12,387,808

 

 

$

12,851,665

 

 

$

12,788,301

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

2,586,743

 

 

$

2,592,376

 

 

$

1,973,629

 

 

$

2,029,872

 

 

$

1,956,025

 

Interest-bearing deposits

 

8,422,036

 

 

8,558,238

 

 

8,205,486

 

 

8,058,656

 

 

8,344,314

 

Total deposits

 

11,008,779

 

 

11,150,614

 

 

10,179,115

 

 

10,088,528

 

 

10,300,339

 

Securities sold under agreements to repurchase

 

65,506

 

 

70,362

 

 

64,809

 

 

66,289

 

 

68,992

 

FHLB advances and other borrowings

 

195,000

 

 

355,000

 

 

800,000

 

 

575,000

 

 

340,000

 

Other liabilities

 

172,221

 

 

197,708

 

 

190,420

 

 

201,179

 

 

178,721

 

Total liabilities

 

11,441,506

 

 

11,773,684

 

 

11,234,344

 

 

10,930,996

 

 

10,888,052

 

Stockholders’ equity

 

1,162,933

 

 

1,160,644

 

 

1,153,464

 

 

1,920,669

 

 

1,900,249

 

Total liabilities and stockholders’ equity

 

$

12,604,439

 

 

$

12,934,328

 

 

$

12,387,808

 

 

$

12,851,665

 

 

$

12,788,301

 

GREAT WESTERN BANCORP, INC.

Loan Portfolio Summary (Unaudited)

 

 

 

As of

 

Fiscal year-to-date:

 

 

September 30,

2020

 

June 30,

2020

 

March 31,

2020

 

December 31,

2019

 

September 30,

2019

 

Change

($)

 

Change

(%)

 

 

(dollars in thousands)

Construction and development

 

$

415,440

 

 

$

407,024

 

 

$

434,264

 

 

$

496,156

 

 

$

463,757

 

 

$

(48,317)

 

 

(10.4)

%

Owner-occupied CRE

 

1,411,894

 

 

1,436,615

 

 

1,414,476

 

 

1,380,773

 

 

1,411,199

 

 

695

 

 

%

Non-owner-occupied CRE

 

2,910,965

 

 

2,965,971

 

 

2,910,516

 

 

2,827,484

 

 

2,853,131

 

 

57,834

 

 

2.0

%

Multifamily residential real estate

 

536,642

 

 

545,883

 

 

463,563

 

 

380,301

 

 

364,323

 

 

172,319

 

 

47.3

%

Commercial real estate

 

5,274,941

 

 

5,355,493

 

 

5,222,819

 

 

5,084,714

 

 

5,092,410

 

 

182,531

 

 

3.6

%

Agriculture

 

1,724,350

 

 

1,815,121

 

 

1,881,792

 

 

1,980,678

 

 

2,008,644

 

 

(284,294)

 

 

(14.2)

%

Commercial non-real estate

 

2,181,656

 

 

2,226,759

 

 

1,699,197

 

 

1,676,426

 

 

1,719,956

 

 

461,700

 

 

26.8

%

Residential real estate

 

830,102

 

 

862,821

 

 

820,759

 

 

811,735

 

 

812,208

 

 

17,894

 

 

2.2

%

Consumer

 

63,206

 

 

61,452

 

 

52,640

 

 

50,697

 

 

51,925

 

 

11,281

 

 

21.7

%

Other ¹

 

37,347

 

 

34,713

 

 

39,908

 

 

46,875

 

 

47,541

 

 

(10,194)

 

 

(21.4)

%

Total unpaid principal balance

 

10,111,602

 

 

10,356,359

 

 

9,717,115

 

 

9,651,125

 

 

9,732,684

 

 

378,918

 

 

3.9

%

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

 

(35,460)

 

 

(42,360)

 

 

(23,820)

 

 

(24,901)

 

 

(25,921)

 

 

(9,539)

 

 

36.8

%

Total loans

 

$

10,076,142

 

 

$

10,313,999

 

 

$

9,693,295

 

 

$

9,626,224

 

 

$

9,706,763

 

 

$

369,379

 

 

3.8

%

1 Other loans primarily include consumer and commercial credit cards, customer deposit account overdrafts, and lease receivables.

GREAT WESTERN BANCORP, INC.

Net Interest Margin (FTE) (Unaudited)

 

 

 

Three Months Ended

 

 

September 30, 2020

 

June 30, 2020

 

September 30, 2019

 

 

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

 

$

167,048

 

 

$

105

 

 

0.25

%

 

$

144,805

 

 

$

112

 

 

0.31

%

 

$

39,617

 

 

$

1,056

 

 

10.58

%

Investment securities

 

1,992,448

 

 

9,294

 

 

1.86

%

 

1,987,648

 

 

10,532

 

 

2.13

%

 

1,822,670

 

 

10,935

 

 

2.38

%

Non-ASC 310-30 loans, net ³

 

9,977,591

 

 

107,813

 

 

4.30

%

 

9,974,802

 

 

109,326

 

 

4.41

%

 

9,693,395

 

 

126,410

 

 

5.17

%

ASC 310-30 loans, net

 

47,006

 

 

1,217

 

 

10.30

%

 

49,250

 

 

1,502

 

 

12.27

%

 

54,141

 

 

1,856

 

 

13.60

%

Loans, net

 

10,024,597

 

 

109,030

 

 

4.33

%

 

10,024,052

 

 

110,828

 

 

4.45

%

 

9,747,536

 

 

128,266

 

 

5.22

%

Total interest-earning assets

 

12,184,093

 

 

118,429

 

 

3.87

%

 

12,156,505

 

 

121,472

 

 

4.02

%

 

11,609,823

 

 

140,257

 

 

4.79

%

Noninterest-earning assets

 

610,228

 

 

 

 

 

 

598,159

 

 

 

 

 

 

1,238,412

 

 

 

 

 

Total assets

 

$

12,794,321

 

 

$

118,429

 

 

3.68

%

 

$

12,754,664

 

 

$

121,472

 

 

3.83

%

 

$

12,848,235

 

 

$

140,257

 

 

4.33

%

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

2,575,732

 

 

 

 

 

 

$

2,414,567

 

 

 

 

 

 

$

1,903,177

 

 

 

 

 

Interest-bearing deposits

 

7,079,302

 

 

$

4,534

 

 

0.25

%

 

6,974,915

 

 

$

5,604

 

 

0.32

%

 

6,241,782

 

 

$

17,211

 

 

1.09

%

Time deposits

 

1,371,589

 

 

3,251

 

 

0.94

%

 

1,430,246

 

 

4,407

 

 

1.24

%

 

2,054,370

 

 

10,000

 

 

1.93

%

Total deposits

 

11,026,623

 

 

7,785

 

 

0.28

%

 

10,819,728

 

 

10,011

 

 

0.37

%

 

10,199,329

 

 

27,211

 

 

1.06

%

Securities sold under agreements to repurchase

 

73,451

 

 

18

 

 

0.10

%

 

64,645

 

 

15

 

 

0.09

%

 

62,302

 

 

40

 

 

0.25

%

FHLB advances and other borrowings

 

315,641

 

 

2,203

 

 

2.78

%

 

500,248

 

 

2,524

 

 

2.03

%

 

512,924

 

 

3,447

 

 

2.67

%

Subordinated debentures and subordinated notes payable

 

108,812

 

 

897

 

 

3.28

%

 

108,766

 

 

1,070

 

 

3.96

%

 

108,622

 

 

1,363

 

 

4.98

%

Total borrowings

 

497,904

 

 

3,118

 

 

2.49

%

 

673,659

 

 

3,609

 

 

2.15

%

 

683,848

 

 

4,850

 

 

2.81

%

Total interest-bearing liabilities

 

11,524,527

 

 

$

10,903

 

 

0.38

%

 

11,493,387

 

 

$

13,620

 

 

0.48

%

 

10,883,177

 

 

$

32,061

 

 

1.17

%

Noninterest-bearing liabilities

 

94,798

 

 

 

 

 

 

97,553

 

 

 

 

 

 

79,273

 

 

 

 

 

Stockholders’ equity

 

1,174,996

 

 

 

 

 

 

1,163,724

 

 

 

 

 

 

1,885,785

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

12,794,321

 

 

 

 

 

 

$

12,754,664

 

 

 

 

 

 

$

12,848,235

 

 

 

 

 

Net interest spread

 

 

 

 

 

3.30

%

 

 

 

 

 

3.35

%

 

 

 

 

 

3.16

%

Net interest income and net interest margin (FTE)

 

 

 

$

107,526

 

 

3.51

%

 

 

 

$

107,852

 

 

3.57

%

 

 

 

$

108,196

 

 

3.70

%

Less: Tax equivalent adjustment

 

 

 

1,508

 

 

 

 

 

 

1,601

 

 

 

 

 

 

1,487

 

 

 

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

 

 

 

$

106,018

 

 

3.46

%

 

 

 

$

106,251

 

 

3.52

%

 

 

 

$

106,709

 

 

3.65

%

1 Annualized for all partial-year periods.

2 Interest income includes nominal and $0.7 million for the fourth quarter of fiscal years 2020 and 2019, respectively, resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets.

3 Interest income includes $0.2 million and $0.3 million for the fourth quarter of fiscal years 2020 and 2019, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.

GREAT WESTERN BANCORP, INC.

Net Interest Margin (FTE) (Unaudited)

 

 

 

Twelve Months Ended

 

 

September 30, 2020

 

September 30, 2019

 

 

Average Balance

 

Interest (FTE)

 

Yield / Cost

 

Average Balance

 

Interest (FTE)

 

Yield / Cost

 

 

(dollars in thousands)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing bank deposits ¹

 

$

100,385

 

 

$

1,383

 

 

1.38

%

 

$

61,646

 

 

$

2,472

 

 

4.01

%

Investment securities

 

1,967,873

 

 

42,653

 

 

2.17

%

 

1,681,185

 

 

41,510

 

 

2.47

%

Non-ASC 310-30 loans, net ²

 

9,750,677

 

 

449,855

 

 

4.61

%

 

9,610,956

 

 

496,753

 

 

5.17

%

ASC 310-30 loans, net

 

49,731

 

 

5,827

 

 

11.72

%

 

61,139

 

 

8,025

 

 

13.13

%

Loans, net

 

9,800,408

 

 

455,682

 

 

4.65

%

 

9,672,095

 

 

504,778

 

 

5.22

%

Total interest-earning assets

 

11,868,666

 

 

499,718

 

 

4.21

%

 

11,414,926

 

 

548,760

 

 

4.81

%

Noninterest-earning assets

 

937,489

 

 

 

 

 

 

1,206,151

 

 

 

 

 

Total assets

 

$

12,806,155

 

 

$

499,718

 

 

3.90

%

 

$

12,621,077

 

 

$

548,760

 

 

4.35

%

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

2,227,518

 

 

 

 

 

 

$

1,860,645

 

 

 

 

 

Interest-bearing deposits

 

6,708,650

 

 

$

35,594

 

 

0.53

%

 

6,286,878

 

 

$

69,305

 

 

1.10

%

Time deposits

 

1,584,191

 

 

23,009

 

 

1.45

%

 

2,030,619

 

 

37,413

 

 

1.84

%

Total deposits

 

10,520,359

 

 

58,603

 

 

0.56

%

 

10,178,142

 

 

106,718

 

 

1.05

%

Securities sold under agreements to repurchase

 

65,248

 

 

88

 

 

0.13

%

 

66,485

 

 

180

 

 

0.27

%

FHLB advances and other borrowings

 

473,689

 

 

10,940

 

 

2.31

%

 

345,375

 

 

9,771

 

 

2.83

%

Subordinated debentures and subordinated notes payable

 

108,739

 

 

4,516

 

 

4.15

%

 

108,553

 

 

5,540

 

 

5.10

%

Total borrowings

 

647,676

 

 

15,544

 

 

2.40

%

 

520,413

 

 

15,491

 

 

2.98

%

Total interest-bearing liabilities

 

11,168,035

 

 

$

74,147

 

 

0.66

%

 

10,698,555

 

 

$

122,209

 

 

1.14

%

Noninterest-bearing liabilities

 

96,806

 

 

 

 

 

 

75,045

 

 

 

 

 

Stockholders’ equity

 

1,541,314

 

 

 

 

 

 

1,847,477

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

12,806,155

 

 

 

 

 

 

$

12,621,077

 

 

 

 

 

Net interest spread

 

 

 

 

 

3.24

%

 

 

 

 

 

3.21

%

Net interest income and net interest margin (FTE)

 

 

 

$

425,571

 

 

3.59

%

 

 

 

$

426,551

 

 

3.74

%

Less: Tax equivalent adjustment

 

 

 

6,146

 

 

 

 

 

 

5,843

 

 

 

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

 

 

 

$

419,425

 

 

3.53

%

 

 

 

$

420,708

 

 

3.69

%

1 Interest income includes $0.9 million and $0.7 million for the fiscal years 2020 and 2019, respectively, resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets.

2 Interest income includes $1.4 million and $1.3 million for the fiscal years 2020 and 2019, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.

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 U.S. 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, 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 COVID-19 impact on credit and other related charges and the impairment of goodwill and certain intangible assets). Our tangible net income and return on average tangible common equity exclude the effects of amortization expense relating to intangible assets and related tax effects from the acquisition of us by National Australia Bank Limited (“NAB”) 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) and 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 non-ASC 310-30 loans and adjusted yield on non-ASC 310-30 loans. We adjust each of these four measures to include the current realized gain (loss) of derivatives 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,

2020

 

September 30,

2019

 

September 30,

2020

 

June 30,

2020

 

March 31,

2020

 

December 31,

2019

 

September 30,

2019

 

 

(dollars in thousands except share and per share amounts)

Adjusted net income and adjusted earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income – GAAP

 

$

(680,808)

 

 

$

167,365

 

 

$

11,136

 

 

$

5,400

 

 

$

(740,618)

 

 

$

43,274

 

 

$

50,285

 

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

 

713,013

 

 

 

 

 

 

 

 

713,013

 

 

 

 

 

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

 

56,685

 

 

 

 

 

 

 

 

56,685

 

 

 

 

 

Adjusted net income

 

$

88,890

 

 

$

167,365

 

 

$

11,136

 

 

$

5,400

 

 

$

29,080

 

 

$

43,274

 

 

$

50,285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common shares outstanding

 

55,612,251

 

57,257,061

 

55,164,548

 

55,145,619

 

55,906,002

 

56,457,967

 

56,804,172

Earnings per common share – diluted

 

$

(12.24)

 

 

$

2.92

 

 

$

0.20

 

 

$

0.10

 

 

$

(13.25)

 

 

$

0.77

 

 

$

0.89

 

Adjusted earnings per common share – diluted

 

$

1.60

 

 

$

2.92

 

 

$

0.20

 

 

$

0.10

 

 

$

0.52

 

 

$

0.77

 

 

$

0.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible net income and return on average tangible common equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income – GAAP

 

$

(680,808)

 

 

$

167,365

 

 

$

11,136

 

 

$

5,400

 

 

$

(740,618)

 

 

$

43,274

 

 

$

50,285

 

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

 

714,339

 

 

1,337

 

 

261

 

 

261

 

 

713,440

 

 

377

 

 

315

 

Tangible net income

 

$

33,531

 

 

$

168,702

 

 

$

11,397

 

 

$

5,661

 

 

$

(27,178)

 

 

$

43,651

 

 

$

50,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common equity

 

$

1,541,314

 

 

$

1,847,477

 

 

$

1,174,996

 

 

$

1,163,724

 

 

$

1,918,035

 

 

$

1,908,519

 

 

$

1,885,785

 

Less: Average goodwill and other intangible assets

 

375,549

 

 

745,920

 

 

6,265

 

 

6,527

 

 

741,257

 

 

748,146

 

 

745,349

 

Average tangible common equity

 

$

1,165,765

 

 

$

1,101,557

 

 

$

1,168,731

 

 

$

1,157,197

 

 

$

1,176,778

 

 

$

1,160,373

 

 

$

1,140,436

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average common equity *

 

(44.2)

%

 

9.1

%

 

3.8

%

 

1.9

%

 

(155.3)

%

 

9.0

%

 

10.6

%

Return on average tangible common equity **

 

2.9

%

 

15.3

%

 

3.9

%

 

2.0

%

 

(9.3)

%

 

15.0

%

 

17.6

%

* 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):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income – GAAP

 

$

419,425

 

 

$

420,708

 

 

$

106,018

 

 

$

106,251

 

 

$

101,983

 

 

$

105,173

 

 

$

106,709

 

Add: Tax equivalent adjustment

 

6,146

 

 

5,843

 

 

1,508

 

 

1,601

 

 

1,514

 

 

1,523

 

 

1,487

 

Net interest income (FTE)

 

425,571

 

 

426,551

 

 

107,526

 

 

107,852

 

 

103,497

 

 

106,696

 

 

108,196

 

Add: Current realized derivative gain (loss)

 

(8,721)

 

 

619

 

 

(3,541)

 

 

(3,040)

 

 

(1,250)

 

 

(890)

 

 

(127)

 

Adjusted net interest income (FTE)

 

$

416,850

 

 

$

427,170

 

 

$

103,985

 

 

$

104,812

 

 

$

102,247

 

 

$

105,806

 

 

$

108,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average interest-earning assets

 

$11,868,666

 

$11,414,926

 

$12,184,093

 

$12,156,505

 

$11,590,453

 

$11,543,610

 

$11,609,823

Net interest margin (FTE) *

 

3.59

%

 

3.74

%

 

3.51

%

 

3.57

%

 

3.59

%

 

3.68

%

 

3.70

%

Adjusted net interest margin (FTE) **

 

3.51

%

 

3.74

%

 

3.40

%

 

3.47

%

 

3.55

%

 

3.65

%

 

3.69

%

* 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

 

$

443,709

 

 

$

490,910

 

 

$

106,305

 

 

$

107,725

 

 

$

111,970

 

 

$

117,709

 

 

$

124,923

 

Add: Tax equivalent adjustment

 

6,146

 

 

5,843

 

 

1,508

 

 

1,601

 

 

1,514

 

 

1,523

 

 

1,487

 

Interest income (FTE)

 

449,855

 

 

496,753

 

 

107,813

 

 

109,326

 

 

113,484

 

 

119,232

 

 

126,410

 

Add: Current realized derivative gain (loss)

 

(8,721)

 

 

619

 

 

(3,541)

 

 

(3,040)

 

 

(1,250)

 

 

(890)

 

 

(127)

 

Adjusted interest income (FTE)

 

$

441,134

 

 

$

497,372

 

 

$

104,272

 

 

$

106,286

 

 

$

112,234

 

 

$

118,342

 

 

$

126,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average non-ASC 310-30 loans

 

$9,750,677

 

$9,610,956

 

$9,977,591

 

$9,974,802

 

$9,496,153

 

$9,554,161

 

$9,693,395

Yield (FTE) *

 

4.61

%

 

5.17

%

 

4.30

%

 

4.41

%

 

4.81

%

 

4.96

%

 

5.17

%

Adjusted yield (FTE) **

 

4.52

%

 

5.18

%

 

4.16

%

 

4.29

%

 

4.75

%

 

4.93

%

 

5.17

%

* 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

 

$

419,442

 

 

$

481,440

 

 

$

102,068

 

 

$

94,568

 

 

$

101,900

 

 

$

120,906

 

 

$

121,732

 

Add: Tax equivalent adjustment

 

6,146

 

 

5,843

 

 

1,508

 

 

1,601

 

 

1,514

 

 

1,523

 

 

1,487

 

Total revenue (FTE)

 

$

425,588

 

 

$

487,283

 

 

$

103,576

 

 

$

96,169

 

 

$

103,414

 

 

$

122,429

 

 

$

123,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

$

1,007,368

 

 

$

224,898

 

 

$

74,936

 

 

$

67,049

 

 

$

808,453

 

 

$

56,930

 

 

$

55,212

 

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

 

743,745

 

 

1,538

 

 

261

 

 

278

 

 

742,779

 

 

427

 

 

366

 

Tangible noninterest expense

 

$

263,623

 

 

$

223,360

 

 

$

74,675

 

 

$

66,771

 

 

$

65,674

 

 

$

56,503

 

 

$

54,846

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio *

 

61.9

%

 

45.8

%

 

72.1

%

 

69.4

%

 

63.5

%

 

46.2

%

 

44.5

%

* 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

 

$

1,162,933

 

 

$

1,900,249

 

 

$

1,162,933

 

 

$

1,160,644

 

 

$

1,153,464

 

 

$

1,920,669

 

 

$

1,900,249

 

Less: Goodwill and other intangible assets

 

6,164

 

 

745,197

 

 

6,164

 

 

6,425

 

 

6,703

 

 

749,481

 

 

745,197

 

Tangible common equity

 

$

1,156,769

 

 

$

1,155,052

 

 

$

1,156,769

 

 

$

1,154,219

 

 

$

1,146,761

 

 

$

1,171,188

 

 

$

1,155,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

12,604,439

 

 

$

12,788,301

 

 

$

12,604,439

 

 

$

12,934,328

 

 

$

12,387,808

 

 

$

12,851,665

 

 

$

12,788,301

 

Less: Goodwill and other intangible assets

 

6,164

 

 

745,197

 

 

6,164

 

 

6,425

 

 

6,703

 

 

749,481

 

 

745,197

 

Tangible assets

 

$

12,598,275

 

 

$

12,043,104

 

 

$

12,598,275

 

 

$

12,927,903

 

 

$

12,381,105

 

 

$

12,102,184

 

 

$

12,043,104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible common equity to tangible assets

 

9.2

%

 

9.6

%

 

9.2

%

 

8.9

%

 

9.3

%

 

9.7

%

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible book value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$

1,162,933

 

 

$

1,900,249

 

 

$

1,162,933

 

 

$

1,160,644

 

 

$

1,153,464

 

 

$

1,920,669

 

 

$

1,900,249

 

Less: Goodwill and other intangible assets

 

6,164

 

 

745,197

 

 

6,164

 

 

6,425

 

 

6,703

 

 

749,481

 

 

745,197

 

Tangible common equity

 

$

1,156,769

 

 

$

1,155,052

 

 

$

1,156,769

 

 

$

1,154,219

 

 

$

1,146,761

 

 

$

1,171,188

 

 

$

1,155,052

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

55,014,189

 

56,283,659

 

55,014,189

 

55,014,047

 

55,013,928

 

56,382,915

 

56,283,659

Book value per share – GAAP

 

$

21.14

 

 

$

33.76

 

 

$

21.14

 

 

$

21.10

 

 

$

20.97

 

 

$

34.06

 

 

$

33.76

 

Tangible book value per share

 

$

21.03

 

 

$

20.52

 

 

$

21.03

 

 

$

20.98

 

 

$

20.84

 

 

$

20.77

 

 

$

20.52

 


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 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.

Contacts

GREAT WESTERN BANCORP, INC.

Media Contact:

Lexie Feterl, 605.978.5829

alexis.feterl@greatwesternbank.com


Investor Relations Contact:

Seth Artz, 605.988.9523

seth.artz@greatwesternbank.com

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