Great Western Bancorp — Q1 FY2022 Earnings Presentation
27 slides from Great Western Bancorp's earnings presentation, Jan 27, 2022
Slide 1: Investor Presentation | December 31, 2021
Investor Presentation | December 31, 2021
Slide 2: Fiscal Year 2022 Q1 Key Results
FISCAL YEAR 2022 Q1 KEY RESULTS 2 Asset Quality Improvement Nonperforming assets lower by 12.8% Criticized loans lower by 8.7% Entered into agreement to sell $75.1 million of criticized hotel loans (Jan 2022 closing) Business Initiatives Good momentum in ag and commercial loan production and growth
Slide 3: Earnings Overview
EARNINGS OVERVIEW 3 1QFY22 Net Interest Income-GAAP $93.8 Noninterest Income (excl FVO Credit Adj) $19.2 Noninterest Expense $62.2 PTPP 1 $50.8 Provision for (recapture of) Credit Losses $1.0 FVO Credit Adj $0.2 Tax $10.8 Net Income $39.2 Solid quarter of net income supported by improved revenue and
Slide 4: Net Interest Income
NIM Analysis 3.00% (0.05)% (0.02)% (0.02)% 0.01% 0.03% 2.95% 3.10% 3.05% NIM (FTE) Adjusted NIM (FTE)¹ 4QFY21 Liquidity Loan Fees / ACL Loans Nonaccr ual R ecoveries PPP 1QFY22 Net Interest Income ($MM) and NIM $425.6 $408.1 $109.5 $104.4 $99.1 $95.1 $95.3 3.59% 3.36% 3.63% 3.51% 3.23% 3.10% 3.05%3.
Slide 5: Net Interest Income (cont'd)
NET INTEREST INCOME (cont'd) 5 • PPP loan income was $5.6 million for the quarter, with $0.4 million of interest and $5.2 million of amortized fees ◦ Remaining unamortized PPP fee income to be recognized is $4.1 million ◦ Outstanding PPP loans of $90.1 million following $886.7 million of PPP loans f
Slide 6: Noninterest Income
6 NONINTEREST INCOME • Noninterest income was $19.4 million for the quarter, up $3.5 million from the prior quarter ◦ The increase was driven largely by a $2.4 million increase from swap fee revenue sharing and a $1.0 million increase in service charges from seasonal crop insurance premiums and new
Slide 7: Expenses & Provision
Provision for (Recovery of) Credit Losses ($MM) $118.4 $11.9 $1.0 $(34.7) $(5.0) $(20.7) $(20.9) $58.7 $59.7 Provision for (Recovery of) Credit Losses Incremental Environmental Overlay for COVID-19 FY20 FY21 1QFY21 2QFY21 3QFY21 4QFY21 1QFY22 7 EXPENSES & PROVISION • Noninterest expense was $62.2 mi
Slide 8: ACL & Credit Coverage
ACL & CREDIT COVERAGE 8 • The ACL was $236.3 million as of December 31, 2021, down $9.7 million from $246.0 million in the prior quarter • The ratio of ACL to total loans was 2.91% as of December 31, 2021, down from 3.01% in the prior quarter • In addition, $22.1 million of the fair value adjustment
Slide 9: Capital
CAPITAL 9 • All regulatory capital ratios improved over the prior quarter, and all remain above regulatory minimums to be considered "well capitalized" ◦ Total capital ratio of 16.5%, up from 16.3% ◦ Tier 1 capital ratio of 15.3%, up from 15.1% ◦ Common equity tier 1 capital ratio of 14.5%, up from
Slide 10: Deposits
DEPOSITS 10 • Total deposits were $11.76 billion as of December 31, 2021, up $450.4 million from the prior quarter, driven by a $235.0 million increase in noninterest-bearing deposits and a $215.4 million increase in interest-bearing deposits • Deposit yields decreased 1 basis point to 0.09% ◦ Time
Slide 11: Loan Overview
Loan Portfolio - Key Segments² Agriculture $1.5B Accommodation (excl HFS)³ $0.7BHealthCare $0.9B Retail Trade $0.4B Construction $0.4B Prof, Scien, Tech Oth Services $0.3B Manufacturing $0.3B Wholesale Trade $0.3B Finance and Insurance $0.1B Other C&I (incl PPP) $0.3B Other CRE-Owner Occupied $0.4B
Slide 12: Credit Overview
CREDIT OVERVIEW 12 Key Highlights: • Continued progress on asset quality ◦ Reduced criticized loans by $83.1 million in the quarter, or 8.7% ◦ Reduced special mention loans by $30.2 million in the quarter, or 8.6% ◦ Reduced classified loans by $53.0 million in the quarter, or 8.8% ◦ Reduced nonaccru
Slide 13: Asset Quality Metrics
Net Charge-offs / Average Total Loans 0.10% 0.25% 0.20% 0.03% 0.02% 0.06% 0.08% 0.11% 0.20% 0.12% 0.17% (0.04)% 0.37% 1.03% 0.45%0.18% 0.36% 0.40% 0.52% 1.22% 0.47% Ag Non Ag Total Discount on Hotel Exits FY18 FY19 FY20 FY21 FYTD 21 FYTD 22 ASSET QUALITY METRICS 13 • Net charge-offs were $9.7 millio
Slide 14: Key Loan Segments
KEY LOAN SEGMENTS 14 Midwest, 43% Western, 42% Hotel & Casino Hotel Balances by State ($MM) IA $120 SD $66 NE $46 MN $37 Other $23 CO $159 AZ $125 Non-Footprint² $108 1 Consists of 29 PPP loans, most of which are related to non-PPP relationships reflected in the chart 2 Includes AK $26, CA $18, FL $
Slide 15: Key Loan Segments (cont'd)
Ag Portfolio by Industry Grains, 26.3% Beef Cattle, 18.9% Dairy Farms, 29.1% Hogs, 5.8% Other Specialty, 19.9% Grains, 26.3% Proteins, 53.8% Other, 19.9% KEY LOAN SEGMENTS (cont'd) 15 Health Care Portfolio Senior Care, 38.7% Skilled Nursing, 22.7% Hospitals, 23.0% All Other, 15.6% • Senior Care is $
Slide 16: Forward Looking Statements
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, strat
Slide 17: Appendix Supplemental Information
Appendix 1 Supplemental Information
Slide 18: Company Snapshot
Footprint 18 COMPANY SNAPSHOT • A relationship-focused commercial bank with agribusiness expertise, partnering with retail and leveraging our business partners • Headquartered in Sioux Falls, SD with 173 banking branches across nine states: Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebra
Slide 19: Commercial Loans
COMMERCIAL LOANS 19 Commercial Segments1 Balance ($MM) % of Total Loans Real Estate & Leasing Lessors of Non Residential RE $1,218 15.0 % Lessors of Residential RE/Oth $210 2.6 % Accommodation & Food/Drink Hotel (excl Casino Hotels) (excl HFS) $554 6.8 % Food/Drink $155 1.9 % Casino Hotels $131 1.6
Slide 20: Ag Loan Asset Quality
Ag Loan Net Charge-offs / Avg Total Loans¹ 0.07% 0.05% 0.07% 0.03% 0.04% 0.07% 0.03% 0.19% 0.07% (0.01)% (0.01)% 0.06% (0.01)% 0.01% Grains Beef Cattle Dairy Farms Hogs Other Specialty² FY18 FY19 FY20 FY21 FYTD 21 FYTD 22 AG LOAN ASSET QUALITY 20 Classified & Nonaccrual Loans ($MM) $51 $108 $78 $39
Slide 21: Investments & Borrowings
INVESTMENTS & BORROWINGS 21 • Investment portfolio weighted average life of 4.2 years as of December 31, 2021 and yield of 1.42% for the quarter ended December 31, 2021, an increase of 2 basis points compared to the prior quarter • Spot yield on the portfolio at December 31, 2021 was 1.43% • Borrowi
Slide 22: Farm Income
Net Cash Income by State¹ ($B) 7.1 6.9 5.9 5.7 4.1 3.9 3.5 15.2 5.3 4.1 7.6 3.7 GWB Footprint² GWB Adjacent All Other States CA TX IA NE MN KS IL WI ND SD IN MO FARM INCOME 22 • 2021 net cash income is projected to be $133 billion, up 15% from 2020 with increased commodity prices in both crops and l
Slide 23: Farm Balance Sheets
FARM BALANCE SHEETS 23 Debt to Equity 19.4% 28.5% 18.5% 17.4% 15.8% 13.9% 14.7% 14.1% 16.1% Equity Debt Debt/equity ratio 1980 1985 1990 1995 2000 2005 2010 2015 2020 $0B $500B $1,000B $1,500B $2,000B $2,500B $3,000B $3,500B $4,000B Debt Service Ratios 37% 38% 24% 24% 25% 23% 25% 24% 26% Non RE Debt
Slide 24: Appendix Non-GAAP Measures
Appendix 2 Non-GAAP Measures
Slide 25: Non-GAAP Measures
NON-GAAP MEASURES 25 At or for the three months ended: December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Adjusted net income and adjusted earnings per common share: Net income (loss) - GAAP $ 39,221 $ 51,891 $ 58,749 $ 51,299 $ 41,319 Add: COVID-19 related impairmen
Slide 26: Non-GAAP Measures
NON-GAAP MEASURES 26 At or for the three months ended: December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Adjusted net interest income and adjusted net interest margin (fully-tax equivalent basis), on non-ASC 310-30 loans: Net interest income - GAAP $ 93,806 $ 93,486
Slide 27: Non-GAAP Measures
NON-GAAP MEASURES 27 At or for the three months ended: December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 Efficiency ratio: Total revenue - GAAP $ 113,195 $ 109,338 $ 116,834 $ 120,063 $ 122,056 Add: Tax equivalent adjustment 1,514 1,574 1,595 1,577 1,598 Total reven
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