Great Western Bancorp — Q4 2021 Earnings Presentation
28 slides from Great Western Bancorp's earnings presentation, Oct 26, 2021
Slide 1: Investor Presentation | September 30, 2021
Investor Presentation | September 30, 2021
Slide 2: Fiscal Year 2021 Progress
FISCAL YEAR 2021 PROGRESS 2 Asset Quality Improvement Nonperforming assets lower by 41.3% Classified loans down by 21.4% Special mention loans down 31.4% from their peak this year Capital Strength Total capital of 16.3%, up from 13.3% and CET1 of 14.3%, up from 11.0% ROE of 18.4%, up from (44.2)% an
Slide 3: Earnings Overview
EARNINGS OVERVIEW 3 4QFY21 Net Interest Income-GAAP $93.5 Noninterest Income (excl FVO Credit Adj) $14.9 Noninterest Expense $63.7 PTPP 1 $44.7 Provision for (recapture of) Credit Losses $(20.9) FVO Credit Adj $1.0 Tax $14.7 Net Income $51.9 Strong quarter of net income supported by lower credit cos
Slide 4: Net Interest Income and NIM Analysis
NIM Analysis 3.13% (0.08)% (0.03)% (0.05)% (0.03)% 0.03% 0.03% 3.00% 3.23% 3.10% NIM (FTE) Adjusted NIM (FTE)¹ 3QFY21 Liquidity FASB Fees/A CL Loans Nonaccr ual R ecoveries PPP Funding 4QFY21 Net Interest Income ($MM) and NIM $425.6 $408.1 $107.5 $109.5 $104.4 $99.1 $95.1 3.59% 3.36% 3.51% 3.63% 3.5
Slide 5: Net Interest Income (cont'd)
NET INTEREST INCOME (cont'd) 5 • PPP loan income was $5.7 million for the quarter, with $0.7 million of interest and $5.0 million of amortized fees ◦ Remaining unamortized PPP fee income to be recognized is $9.3 million ◦ Outstanding PPP loans of $212.0 million following $764.8 million of PPP loans
Slide 6: Noninterest Income
6 NONINTEREST INCOME • Noninterest income was $15.9 million for the quarter, down $3.5 million from the prior quarter ◦ Favorable adjustments for loans and derivatives accounted for at fair value were lower by $3.8 million due mainly to stronger improvement in credit risk factors in the prior quarte
Slide 7: Expenses & Provision
Provision for Credit Losses ($MM) $118.4 $16.9 $11.9 $(34.7) $(5.0) $(20.7) $(20.9) $58.7 $59.7 Provision for Credit Losses Incremental Environmental Overlay for COVID-19 FY20 FY21 4QFY20 1QFY21 2QFY21 3QFY21 4QFY21 7 EXPENSES & PROVISION • Noninterest expense was $63.7 million for the quarter, up $
Slide 8: ACL & Credit Coverage
ACL & CREDIT COVERAGE 8 • The ACL (CECL adopted October 1, 2020), was $246.0 million as of September 30, 2021, down $24.3 million from $270.3 million in the prior quarter • The ratio of ACL to total loans was 3.01% as of September 30, 2021, down from 3.19% in the prior quarter • In addition, $22.3 m
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 16.3%, 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
Slide 10: Deposits
DEPOSITS 10 • 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 • De
Slide 11: Loan Overview
Loan Portfolio - Key Segments² Agriculture $1.4B Accommodation³ $0.8BHealthCare $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 $0.5B Other CRE-N
Slide 12: Credit Overview
CREDIT OVERVIEW 12 Key Highlights: • Continued progress on asset quality ◦ Reduced nonaccrual loans by $12.2 million in the quarter (5.8%) and by $127.0 million fiscal year to date (39.1%) ◦ Reduced classified loans by $7.3 million in the quarter (1.2%) and by $164.6 million fiscal year to date (21.
Slide 13: Asset Quality Metrics
Net Charge-offs / Average Total Loans 0.08% 0.10% 0.25% 0.20% 0.03% 0.18% 0.08% 0.11% 0.20% 0.12% 0.37%0.26% 0.18% 0.36% 0.40% 0.52% Ag Non Ag Total Discount on Hotel Exits FY17 FY18 FY19 FY20 FY21 ASSET QUALITY METRICS 13 • Net charge-offs were $4.1 million, or 0.20% of average total loans (annuali
Slide 14: Key Loan Segments
KEY LOAN SEGMENTS 14 Midwest, 48% Western, 38% Hotel & Casino Hotel Balances by State ($MM) IA $153 SD $85 NE $67 MN $38 Other $32 CO $166 AZ $131 Non-Footprint² $107 1 Consists of 65 PPP loans, most of which are related to non-PPP relationships reflected in the chart 2 Includes AK $27, CA $18, FL $
Slide 15: Key Loan Segments (cont'd)
Ag Portfolio by Industry Grains, 28.4% Beef Cattle, 19.1% Dairy Farms, 28.3% Hogs, 3.8% Other Specialty, 20.4% Grains, 28.4% Proteins, 51.2% Other, 20.4% KEY LOAN SEGMENTS (cont'd) 15 Health Care Portfolio Senior Care, 39.9% Skilled Nursing, 22.8% Hospitals, 21.6% All Other, 15.7% • 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 Data
Appendix 1 Supplemental Data
Slide 18: Footprint / 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 174 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 $1,152 14.1 % Lessors of Residential RE/Oth $194 2.4 % Accommodation & Food/Drink Hotel (excl Casino Hotels) $645 7.9 % Food/Drink $150 1.8 % Casino Hotels $135 1.6 % Other Acc
Slide 20: Ag Loan Asset Quality
Ag Loan Net Charge-offs / Avg Total Loans¹ 0.03% 0.07% 0.05% 0.07% 0.03% 0.05% 0.03% 0.19% 0.07% 0.06% 0.01% Grains Beef Cattle Dairy Farms Hogs Other Specialty² FY17 FY18 FY19 FY20 FY21 AG LOAN ASSET QUALITY 20 Classified & Nonaccrual Loans ($MM) $62 $51 $108 $78 $50 $16 $63 $65 $69 $93 $65 $39 $54
Slide 21: Investments & Borrowings
INVESTMENTS & BORROWINGS 21 • Investment portfolio weighted average life of 4.0 years as of September 30, 2021 and yield of 1.40% for the quarter ended September 30, 2021, a decrease of 10 basis points compared to the prior quarter • Spot yield on the portfolio at September 30, 2021 was 1.40% • Borr
Slide 22: Liquidity & Interest Rate Sensitivity
LIQUIDITY & INTEREST RATE SENSITIVITY 22 Rate Term 5.2% 9.6% 19.7% 32.2% 24.5% 51.9% 11.3% 10.0% 13.4% 9.3% 0.1% 0.1% 1.4% 1.5% 5.7% 0.3% 0.1% 3.7% Fixed Swapped to Variable Adjustable <3m 3m- 12m 12m- 3y 3y-5y 5y+ <3m 3m- 12m 12m- 3y 3y-5y 5y+ Sensitivity Modeling Immediate Gradual -100 bps +100 bp
Slide 23: Farm Income
Net Cash Income by State¹ ($B) 6.5 6.4 5.5 5.1 3.8 3.7 3.1 15.2 4.7 4.0 7.4 3.3 GWB Footprint² GWB Adjacent All Other States CA TX IA NE MN KS IL WI ND SD IN MO FARM INCOME 23 • 2021 net cash income is projected to be $135 billion, up 22% from 2020 with increased commodity prices in both crops and l
Slide 24: Farm Balance Sheets
FARM BALANCE SHEETS 24 Debt to Equity 19.4% 28.5% 18.5% 17.4% 15.8% 13.9% 14.7% 14.1% 16.3% 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 25: Appendix Non-GAAP Measures
Appendix 2 Non-GAAP Measures
Slide 26: Non-GAAP Measures
NON-GAAP MEASURES 26 At or for the twelve months ended: At or 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 Adjusted net income and adjusted earnings per common share: Net income (loss) - GAAP $
Slide 27: Non-GAAP Measures
NON-GAAP MEASURES 27 At or for the twelve months ended: At or 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 Adjusted net interest income and adjusted net interest margin (fully-tax equivalent bas
Slide 28: Non-GAAP Measures
NON-GAAP MEASURES 28 At or for the twelve months ended: At or 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 Efficiency ratio: Total revenue - GAAP $ 468,291 $ 419,442 $ 109,338 $ 116,834 $ 120,06
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