GREAT WESTERN BANCORP, INC. Investor Presentation | December 31, 2021
FISCAL YEAR 2022 Q1 KEY RESULTS
Asset Quality Improvement
Business
Initiatives
Capital
Strength
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)
Good momentum in ag and commercial loan production and growth Merger with First Interstate expected to close February 1, 2022
Integration activities progressing as planned with a system conversion target of May 2022
Total capital of 16.5%, up from 16.3%
Tier 1 Capital of 15.3%, up from 15.1%
CET1 of 14.5%, up from 14.3%
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EARNINGS OVERVIEW
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 lower costs
- Net interest income continuing to benefit from reduced funding costs along with accelerated PPP fees, increased nonaccrual interest recoveries, and new loan growth
- Noninterest income benefited from improvements in swap revenue and service charges
- Expenses benefiting from lower merger-related costs
- PTPP1 increased $6.1 million from the prior quarter largely due to increased noninterest income from swap revenue and service charges combined with lower expenses due to a decrease in merger-related costs
- PTPP1 decreased by $15.5 million from the comparable quarter prior year with a 37.0% increase in noninterest income partially offsetting lower NII resulting from decreased loan volumes and a shift in the interest earning asset mix
Pre-taxPre-provision Income¹ (PTPP)
$66.3 | $60.9 | |||
$52.2 | $44.7 | $50.8 | ||
1QFY21 | 2QFY21 | 3QFY21 | 4QFY21 | 1QFY22 |
- See Non-GAAP table in appendix for reconciliation
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NET INTEREST INCOME
- Net interest income was $95.3 million for the quarter, up $0.2 million; adjusted net interest income1 was $92.4 million, up $0.4 million
- Loan interest decreased by $1.0 million due largely to a net impact from lower loan yields, which was partially offset by a $0.3 million increase in recoveries of interest on nonaccrual loans
- Securities and other interest increased by $0.9 million driven largely by increased volumes
- Interest expense was lower due to a $0.1 million decrease in time deposit interest and a net $0.1 million decrease in interest on other interest bearing deposits
- Net interest margin was 3.05%, a 5 basis point decrease from 3.10%; adjusted net interest margin1 was 2.95%, a 5 basis point decrease from 3.00%
Net Interest Income ($MM) and NIM | NIM Analysis |
$425.6 | $408.1 | ||||||||||||||
3.10% | |||||||||||||||
3.59% | 3.63% | 3.51% | |||||||||||||
3.36% | |||||||||||||||
3.52% | 3.23% | 3.00% | |||||||||||||
3.51% | 3.40% | 3.10% | |||||||||||||
3.05% | |||||||||||||||
3.26% | 3.13% | ||||||||||||||
$109.5 | $104.4 | $99.1 | 3.00% | 2.95% | |||||||||||
$95.1 | |||||||||||||||
$95.3 |
4Q | FY21 | ||||||||||||
FY20 | FY21 | 1QFY21 | 2QFY21 | 3QFY21 | 4QFY21 | 1QFY22 | |||||||
Net Interest Income (FTE) | NIM (FTE) | Adjusted NIM (FTE)¹ | |||||||||||
- Non-GAAPmeasures, see appendix for reconciliations.
NOTE: All references to net interest income and net interest margin are presented on a fully-tax equivalent basis unless otherwise noted.
3.05% | |||||||||||||||||||||||
0.01% | 0.03% | ||||||||||||||||||||||
(0.05)% | 2.95% | ||||||||||||||||||||||
(0.02)% | |||||||||||||||||||||||
(0.02)% | |||||||||||||||||||||||
quidity | ACL | Lo | ans | Recoveries | PPP | FY22 | |||||||||||||||||
Li | Fees | / | 1Q | ||||||||||||||||||||
Lo | an | naccrual | |||||||||||||||||||||
No | |||||||||||||||||||||||
NIM (FTE) | Adjusted NIM (FTE)¹ | ||||||||||||||||||||||
4
NET INTEREST INCOME (cont'd)
- 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 forgiven since the program began
- Loans that are fixed, are at their rate floors, or reprice beyond 90 days are providing yield support on approximately 80% of the loan portfolio
- $3.9 billion of fixed loans with a yield of 3.94%
- $1.7 billion of variable loans have reached their floors with a yield of 3.88%
- $0.9 billion of variable loans repricing after 90 days with a yield of 4.21%
Rate Floor Summary¹
PPP Summary ($MM)
Round 1 | Round 2 | |||||
Original | Current | # Loans | Original | Current | # Loans | |
Under $150k | $137.9 | $0.3 | 17 | $88.6 | $12.8 | 550 |
$150k to $350k | $105.2 | $0.3 | 2 | $38.2 | $14.1 | 67 |
$350k to $2MM | $323.1 | $0.5 | 3 | $110.7 | $45.5 | 58 |
$2MM+ | $161.1 | $10.6 | 2 | $12.0 | $6.0 | 3 |
Total | $727.3 | $11.7 | 24 | $249.5 | $78.4 | 678 |
FY20 | FY21 | Dec21 | Remain | |||
Fee Schedule ($MM) | $7.0 | $22.1 | $5.2 | $4.1 |
$3.9B, 3.94% | $0.3B, 3.56% | ||||||||||
$0.2B, 3.98% | |||||||||||
$1.2B, 2.63% | |||||||||||
$1.7B, 3.88% | |||||||||||
$0.7B, 4.28% | |||||||||||
Fixed | Variable - Floor | Variable - No Floor | |||||||||
Fixed or At Floor | Reprice After 90 Days | Reprice Within 90 Days | |||||||||
- Chart shows volumes and yields at the quarter end
- Variable/Adjustable: 41% Prime, 25% 5 yr Treasury, 22% 1 mo LIBOR, 12% all other
- Excludes PPP loans
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Great Western Bancorporation Inc. published this content on 27 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2022 22:35:06 UTC.
