Investor Presentation | September 30, 2021
FISCAL YEAR 2021 PROGRESS
Asset Quality Improvement
Capital
Strength
Business
Initiatives
Nonperforming assets lower by 41.3%
Classified loans down by 21.4%
Special mention loans down 31.4% from their peak this year
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)% and ROTCE of 18.6%, up from 2.9%
Net income of $203 million, up from $(681) million and PTPP of $224 million, up from $217 million
Developed and launched small business center across the footprint Loan growth returning in majority of markets, both metro and rural
New Wealth Management leader alongside Ag, Retail and Treasury Management business lines Advanced Diversity, Equity & Inclusion with #beU campaign and first-ever Director appointment
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EARNINGS OVERVIEW
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 costs
- Net interest income benefited from reduced funding costs helping to counter lower PPP fees, lower nonaccrual interest recoveries and the impact from reduced loan volume
- Noninterest income benefited from improvements in service charges and wealth management, helping to offset lower mortgage income and a lower derivative credit adjustment
- Expenses benefiting from favorable OREO trends and lower salary costs, partially offsetting $5.2 million in merger-related costs
- Provision recapture driven by reduced loans and improved economic forecasts
- PTPP1 decreased $7.6 million from the prior quarter primarily due to lower NII from a decrease in PPP income and reduced loan volumes and increased expenses from $5.2 million of merger-related costs
- PTPP1 decreased by $7.1 million from the comparable quarter prior year with a 15.0% expense reduction offsetting lower NII resulting from a shift in interest earning asset mix
- See Non-GAAP table in appendix for reconciliation
Pre-taxPre-provision Income¹ (PTPP)
$66.3 | $60.9 | |||
$51.8 | $52.2 | $44.7 | ||
4QFY20 | 1QFY21 | 2QFY21 | 3QFY21 | 4QFY21 |
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NET INTEREST INCOME
- Net interest income was $95.1 million for the quarter, down $4.0 million; adjusted net interest income1 was $92.0 million, down $3.9 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
- Interest expense was lower, driven by a $0.2 million decrease in time deposit interest and $0.6 million decrease in interest on other interest bearing deposits
- Net interest margin was 3.10%, a 13 basis point decrease from 3.23%; adjusted net interest margin1 was 3.00%, a 13 basis point decrease from 3.13%
Net Interest Income ($MM) and NIM | NIM Analysis |
$425.6 | $408.1 | ||||||||||||||||||||||
3.59% | 3.51% | 3.63% | 3.51% | ||||||||||||||||||||
3.36% | |||||||||||||||||||||||
3.52% | 3.23% | ||||||||||||||||||||||
3.51% | 3.40% | 3.40% | 3.10% | ||||||||||||||||||||
3.26% | 3.13% | ||||||||||||||||||||||
$107.5 | $109.5 | $104.4 | $99.1 | 3.00% | |||||||||||||||||||
$95.1 | |||||||||||||||||||||||
FY20 | FY21 | 4QFY20 | 1QFY21 | 2QFY21 | 3QFY21 | 4QFY21 | |||||||||||||||||
Net Interest Income (FTE) | NIM (FTE) | Adjusted NIM (FTE)¹ | |||||||||||||||||||||
3.23% | |||||||||||||||||||||||||
3.10% | |||||||||||||||||||||||||
3.13% | 0.03% | ||||||||||||||||||||||||
(0.08)% | 0.03% | ||||||||||||||||||||||||
(0.03)% | 3.00% | ||||||||||||||||||||||||
(0.05)% | |||||||||||||||||||||||||
3Q | Li | Fees/ACL | (0.03)% | Fu | 4Q | ||||||||||||||||||||
FY21 | quidity | Loans | PP | P | nding | FY21 | |||||||||||||||||||
FA | SB | naccrual | |||||||||||||||||||||||
No | |||||||||||||||||||||||||
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.
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NET INTEREST INCOME (cont'd)
- 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 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 4.07%
- $1.7 billion of variable loans have reached their floors with a yield of 3.94%
- $1.0 billion of variable loans repricing after 90 days with a yield of 4.25%
Rate Floor Summary¹
PPP Summary ($MM)
Round 1 | Round 2 | |||||
Original | Current | # Loans | Original | Current | # Loans | |
Under $150k | $137.9 | $1.6 | 77 | $88.6 | $44.2 | 1,674 |
$150k to $350k | $105.2 | $3.5 | 16 | $38.2 | $33.1 | 154 |
$350k to $2MM | $323.1 | $6.2 | 10 | $110.7 | $93.7 | 119 |
$2MM+ | $161.1 | $17.7 | 3 | $12.0 | $12.0 | 6 |
Total | $727.3 | $29.0 | 106 | $249.5 | $183.0 | 1,953 |
FY20 | Dec20 | Mar21 | Jun21 | Sep21 | Remain | |
Fee Schedule ($MM) | $7.0 | $3.7 | $8.1 | $5.3 | $5.0 | $9.3 |
$3.9B, 4.07% | $0.2B, 3.53% | ||
$0.2B, 4.00% | |||
$1.2B, 2.64% | |||
$1.7B, 3.94% | |||
$0.8B, 4.33% | |||
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: 38% Prime, 26% 5 yr Treasury, 25% 1 mo LIBOR, 11% all other
- Excludes PPP loans
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Great Western Bancorporation Inc. published this content on 26 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2021 21:47:02 UTC.