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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 25, 2018

GREAT WESTERN BANCORP, INC.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of Incorporation)
001-36688
 
47-1308512
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
225 South Main Avenue
 
 
Sioux Falls, South Dakota
 
57104
(Address of Principal Executive Offices)
 
 (Zip Code)

(605) 334-2548
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).                         Emerging growth company        o

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                                 o






Item 2.02.
Results of Operations and Financial Condition.

On January 25, 2018, Great Western Bancorp, Inc. ("Great Western" and, together with its consolidated subsidiaries, the “Company”) announced its earnings for the first fiscal quarter ended December 31, 2017. A copy of Great Western's press release containing this information is attached as Exhibit 99.1 to this report on Form 8-K and is incorporated herein by reference.

Item 7.01.
Regulation FD Disclosure.

A copy of the slide presentation relating to the Company’s earnings results for use on the conference call being held for investors and analysts is being furnished as Exhibit 99.2 to this report on Form 8-K and is incorporated herein by reference.

The Company is also furnishing via this report on Form 8-K a copy of its Quarterly Investor Relations Presentation which includes financial data as of and for the three months ended December 31, 2017. The Company intends to use this presentation for any investor meetings or related interactions through the first quarter of fiscal year 2018. A copy of the presentation will also be available in the Investor Relations section of the Company’s website, www.greatwesternbank.com. A copy of the presentation is furnished as Exhibit 99.3 to this Form 8-K and is incorporated herein by reference.
Item 9.01.
Financial Statements and Exhibits.

(d)
Exhibits.

Exhibit No.
Description
 
 
99.1
Press release of Great Western dated January 25, 2018, containing financial information for the quarter ended December 31, 2017.
 
 
99.2
Slide presentation for conference call for investors and analysts on January 25, 2018.
 
 
99.3
Quarterly Investor Relations Presentation for the first quarter of fiscal year 2018.

All information provided in this report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Great Western under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.






Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
GREAT WESTERN BANCORP, INC.
 
 
Date: January 25, 2018
By:          /s/ Peter Chapman
 
Name:          Peter Chapman    
 
Title:          Chief Financial Officer and Executive Vice President











INDEX TO EXHIBITS


Exhibit No.
Description
 
 
Press release of the registrant dated January 25, 2018, containing financial information for the quarter ended December 31, 2017.
 
 
Slide presentation for conference call for investors and analysts on January 25, 2018.
 
 
Quarterly Investor Relations Presentation for the first quarter of fiscal year 2018.




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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

391889809_greatwesternbancorpa18.jpg

Great Western Bancorp, Inc. Announces Fiscal Year 2018 First Quarter Financial Results
Highlights for the First Quarter of Fiscal Year 2018 (all comparisons in this document refer to the fourth quarter of fiscal year 2017, except as noted)
First quarter net income was $29.2 million, or $0.49 per diluted share, compared to $37.7 million, or $0.64 per diluted share
Adjusted net income1, which excludes the nonrecurring charge to provision for income taxes of $13.6 million related to revaluation of the Company's deferred taxes, was $42.8 million or $0.72 per diluted share
Net interest margin and adjusted net interest margin1, 2 were 3.89% and 3.80%, respectively, decreases of 4 and 2 basis points, respectively, with each change impacted by a lower tax equivalent adjustment resulting from a lower tax rate
The efficiency ratio1 improved to 45.8% from 47.1%
Total loans increased $196.8 million, an annualized increase of 8.7%, while total deposits grew by $46.6 million
Net charge-offs recognized during the quarter were 0.18% of average total loans on an annualized basis, a reduction compared to each quarter of fiscal year 2017

Sioux Falls, SD - January 25, 2018 - Great Western Bancorp, Inc. (NYSE: GWB) today reported net income of $29.2 million, or $0.49 per diluted share, for the first quarter of fiscal year 2018, compared to net income of $37.7 million, or $0.64 per diluted share, for the fourth quarter of fiscal year 2017. Adjusted net income1, which excludes the deferred taxes revaluation triggered by the Tax Cuts and Jobs Act of 2017, was $42.8 million or $0.72 per diluted share.
"We are pleased to report a strong underlying financial result for the quarter," said Ken Karels, Chairman, President and Chief Executive Officer. "Our loan growth was strong, we continued to manage costs well and overall credit quality trends remain favorable. As a result of corporate tax reform, we were required to adjust the value of our deferred taxes, but we already began to benefit from a lower statutory tax rate during the quarter and expect that we will earn back the amount of the deferred tax charge within this fiscal year. Finally, we were very pleased to announce earlier this month compensation and benefit increases for many of our employees and increased investments in other parts of our business directly resulting from tax reform and the savings we expect to incur."
Impact of the Tax Cuts and Jobs Act of 2017
The Tax Cuts and Jobs Act of 2017 significantly impacted the Company's financial results for the quarter and going forward. The three main impacts include:
A nonrecurring reduction in the carrying value of the Company's deferred taxes of $13.6 million, equating to $0.23, or 1.3%, of the Company's tangible book value per share1 and a reduction of approximately 15 basis points to the total capital ratio as of December 31, 2017 and $0.23 per diluted share for the quarter ended December 31, 2017;
A reduction in the statutory federal tax rate upon which the Company's net income before taxes is taxed beginning with the current fiscal year ending September 30, 2018. Because of the Company's fiscal year end, a blended statutory federal tax rate of 24.5% is applied to all net income before taxes generated during the current fiscal year and the overall effective tax rate for the fiscal year is expected to be approximately 26.0%. Compared to the previous statutory tax rate, the blended rate reduced the provision for income taxes by approximately $5.0 million for the quarter ended December 31, 2017. Beginning in fiscal year 2019, the Company's net income will be taxed at the 21.0% statutory federal tax rate; and
A reduction in the tax-related benefit generated by tax-advantaged assets. The tax equivalent adjustment to net interest income and net interest margin was $1.6 million for the current quarter, compared to $2.1 million in the prior quarter, on a consistent asset base. This change reduced net interest margin and adjusted net interest margin1, 2 in the current quarter by approximately 2 basis points and increased our efficiency ratio1 by a negligible amount.


1 This is a non-GAAP measure management believes is helpful to understanding trends in the business that may not be fully apparent based only on the most comparable GAAP measure. Further information on this measure and a reconciliation to the most comparable GAAP measure is provided at the end of this release.
2 All references to net interest income and net interest margin are presented on a fully-tax equivalent basis unless otherwise noted.

1

Exhibit 99.1

Net Interest Income and Net Interest Margin 2 
Net interest income was $102.2 million for the first quarter of fiscal year 2018, an increase of $0.4 million, or 0.4%, compared to the prior quarter. The increase was primarily attributable to higher loan interest income driven by 1.2% growth in average loans outstanding between periods and a modest increase in investment portfolio income driven by rising interest rates, partially offset by higher interest expense associated with interest-bearing deposits and borrowings.
The consolidated income statements have been revised to correct an immaterial classification error in interest income and noninterest income related to credit card interchange income for the current quarter and all comparable periods presented. This change has no impact on net income, total revenue1, earnings per share, retained earnings, capital ratios or efficiency ratio1 for any period. Net interest margin and adjusted net interest margin1 are reduced by seven to eight basis points for each period presented, but there is no material impact to the trend for either of these metrics.
Net interest margin was 3.89% and 3.93%, respectively, for the quarters ended December 31, 2017 and September 30, 2017. Adjusted net interest margin1, which adjusts for the realized gain (loss) on interest rate swaps, was 3.80% and 3.82%, respectively, for the same periods. The yield on total loans decreased 2 basis points and the cost of deposits increased by 1 basis point. The reduction in the magnitude of the tax equivalent adjustment driven by a lower statutory tax rate reduced each metric by approximately 2 basis points.
Total loans outstanding were $9.17 billion as of December 31, 2017, an increase of $196.8 million, or 2.2%, for the quarter, and 8.7% on an annualized basis. The majority of the growth during the quarter occurred in the commercial real estate ("CRE") segment of the portfolio, which increased by $170.9 million, including strong growth in owner-occupied CRE and construction loans. Agriculture loans increased by $55.2 million, with approximately $20 million of that growth resulting from short-term advances required by many of our dairy customers for tax planning purposes that have already been repaid.
Total deposits grew $46.6 million, or 0.5%, during the quarter. Noninterest-bearing deposits were $1.93 billion, a 4.1% increase, for the quarter and interest-bearing deposits were $7.09 billion, a 0.4% decrease for the quarter. FHLB and other borrowings increased by $77.8 million, or 12.1%, as a result of loan growth during the quarter exceeding net deposit growth.
Provision for Loan and Lease Losses and Asset Quality
Provision for loan and lease losses was $4.6 million for the first quarter of fiscal year 2018, a decrease of $0.1 million, or 2.7%. Net charge-offs for the first quarter were $4.0 million, or 0.18% of average total loans on an annualized basis, with the majority of net charge-offs concentrated in the agriculture and commercial non-real estate segments of the loan portfolio. The ratio of allowance for loan and lease losses ("ALLL") to total loans was 0.70% at December 31, 2017, a decrease from 0.71%.
Included within total loans are approximately $980.1 million of loans for which management has elected the fair value option. These loans are excluded from the ALLL process, but management has estimated that approximately $6.2 million of the fair value adjustment for these loans relates to credit risk, or 0.07% of total loans. Finally, total purchase discount remaining on all acquired loans equates to 0.29% of total loans.
At December 31, 2017, loans graded "Watch" were $287.5 million, a decrease of $24.1 million, or 7.7%. Loans graded "Substandard" were $247.7 million, an increase of $14.8 million, or 6.4%. The decrease in "Watch" graded loans and the increase in "Substandard" graded loans was primarily driven by the deterioration of a small number of CRE relationships.
Nonaccrual loans were $147.3 million as of December 31, 2017, with $4.1 million of the balance covered by FDIC loss-sharing agreements. Total nonaccrual loans increased by $9.0 million during the quarter, primarily driven by one CRE loan relationship. Total other repossessed property balances were $10.5 million as of December 31, 2017, an increase of $1.5 million, or 16.7%.
As of mid-January, annual reviews have been completed on approximately 70% of agriculture loan relationships with maturity dates between November 1, 2017 and January 15, 2018. Growers' 2017 performance was broadly in line with expectations and risk rating changes are expected to be minimal with upgrades modestly exceeding downgrades.

2

Exhibit 99.1

Total credit-related charges decreased compared to the previous quarter. A summary of total credit-related charges incurred during the current and prior quarters is presented below:
GREAT WESTERN BANCORP, INC.
 
 
 
Summary of Credit-Related Charges (Unaudited)
 
 
 
 
 
 
 
 
 
 
For the three months ended:
Item
Included within F/S Line Item(s):
December 31, 2017
 
September 30, 2017
 
 
(dollars in thousands)
Provision for loan and lease losses
Provision for loan and lease losses
$
4,557

 
$
4,685

Net other repossessed property charges
Net loss on repossessed property and other related expenses
214

 
541

Reversal (recovery) of interest income on nonaccrual loans
Interest income on loans
1,068

 
697

Loan fair value adjustment related to credit
Net (decrease) increase in fair value of loans at fair value
(1,038
)
 
940

Total
 
$
4,801

 
$
6,863

Noninterest Income
Noninterest income was $16.7 million for the first quarter of fiscal year 2018, an increase of $1.9 million, or 13.1%. The net effect of the change in the fair value of loans for which the Company has elected the fair value option and the net gain (loss), realized and unrealized, of the related derivatives was $2.2 million favorable, partially offset by a $0.6 million reduction in service charges and other fees primarily driven by the full quarter impact of the "Durbin Amendment" limit on debit card interchange income.
Noninterest Expense
Total noninterest expense was $54.9 million for the first quarter of fiscal year 2018, a decrease of $0.5 million, or 0.8%. Other noninterest expense, comprised of a number of miscellaneous items, decreased by $1.0 million and data processing decreased by $0.6 million as a result of lower communications cost. Salaries and employee benefits increased by $1.6 million, driven primarily by items related to fiscal year-end including vesting of share-based awards, incentive compensation and the related payroll taxes.
The efficiency ratio1 was 45.8% for the quarter, a decrease from 47.1%.
Provision for Income Taxes
The provision for income taxes for the first fiscal quarter ended December 31, 2017 was $28.6 million, reflecting an effective tax rate of 49.5% of income before income taxes, compared to an effective tax rate of 30.8%. Excluding the deferred taxes adjustment, the effective tax rate was 26.0%. See "Impact of the Tax Cuts and Jobs Act of 2017" above for discussion of material income tax items for the quarter.
Capital
Tier 1 and total capital ratios were 11.3% and 12.3%, respectively, as of December 31, 2017, compared to 11.4% and 12.5%, respectively. The common equity tier 1 capital ratio was 10.5% as of December 31, 2017 compared to 10.7%. The tier 1 leverage ratio was 10.3% as of December 31, 2017 and September 30, 2017. All regulatory capital ratios remain above regulatory minimums to be considered "well capitalized." The revaluation of the Company's deferred taxes reduced the total capital ratio by approximately 15 basis points.
On January 25, 2018, the Company’s Board of Directors declared a dividend of $0.20 per common share payable on February 21, 2018 to stockholders of record as of close of business on February 9, 2018. The aggregate dividend payment will be approximately $11.8 million.
Business Outlook
"We are very happy with the strong start to our fiscal year," added Karels. "We believe the recently enacted tax reform will generate meaningful savings that we can use to invest in our people and our business and materially increase our return profile for investors. Furthermore, we are hopeful that we will see regulatory reform in 2018 that will significantly reduce the compliance burden on Great Western Bank and many of our competitors and allow us to devote more energy and resources to continuing to grow this high-performing organization."

3

Exhibit 99.1

Conference Call
Great Western Bancorp, Inc. will host a conference call to discuss its financial results for the first quarter of fiscal year 2018 on Thursday, January 25, 2018 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 February 8, 2018. To access the replay, dial (877) 344-7529 (U.S.) and use conference ID 10115205. 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, the effects of tax reform, the outlook for its agricultural lending segment 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 fiscal year ended September 30, 2017. 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.


4

Exhibit 99.1

GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
 
 
Consolidated Financial Data (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
At or for the three months ended:
 
December 31, 2017
 
September 30, 2017
 
June 30,
 2017
 
March 31, 2017
 
December 31, 2016
 
(dollars in thousands, except share and per share amounts)
Operating Data:
 
 
 
 
 
 
 
 
 
Interest and dividend income (FTE)
$
116,519

 
$
115,185

 
$
110,713

 
$
108,420

 
$
108,797

Interest expense
14,332

 
13,391

 
11,671

 
10,494

 
9,764

Noninterest income
16,674

 
14,740

 
17,327

 
15,489

 
15,658

Noninterest expense
54,868

 
55,332

 
54,922

 
53,852

 
52,537

Provision for loan and lease losses
4,557

 
4,685

 
5,796

 
4,009

 
7,049

Net income
29,230

 
37,662

 
35,060

 
35,162

 
36,903

Adjusted net income 1
$
42,816

 
$
37,662

 
$
35,060

 
$
35,162

 
$
37,343

Common shares outstanding
58,896,189

 
58,834,066

 
58,761,597

 
58,760,517

 
58,755,989

Weighted average diluted common shares outstanding
59,087,729

 
58,914,144

 
59,130,632

 
59,073,669

 
58,991,905

Earnings per common share - diluted
$
0.49

 
$
0.64

 
$
0.59

 
$
0.60

 
$
0.63

Adjusted earnings per common share - diluted 1
$
0.72

 
$
0.64

 
$
0.59

 
$
0.60

 
$
0.63

 
 
 
 
 
 
 
 
 
 
Performance Ratios:
 
 
 
 
 
 
 
 
 
Net interest margin (FTE) 1 2
3.89
%
 
3.93
%
 
3.92
%
 
3.91
%
 
3.82
%
Adjusted net interest margin (FTE) 1 2
3.80
%
 
3.82
%
 
3.79
%
 
3.76
%
 
3.65
%
Return on average total assets 2
1.00
%
 
1.30
%
 
1.25
%
 
1.26
%
 
1.28
%
Return on average common equity 2
6.6
%
 
8.6
%
 
8.2
%
 
8.5
%
 
8.8
%
Return on average tangible common equity 1 2
11.6
%
 
15.2
%
 
14.8
%
 
15.4
%
 
16.3
%
Efficiency ratio 1
45.8
%
 
47.1
%
 
46.7
%
 
47.0
%
 
45.1
%
 
 
 
 
 
 
 
 
 
 
Capital:
 
 
 
 
 
 
 
 
 
Tier 1 capital ratio
11.3
%
 
11.4
%
 
11.5
%
 
11.6
%
 
11.2
%
Total capital ratio
12.3
%
 
12.5
%
 
12.6
%
 
12.7
%
 
12.3
%
Tier 1 leverage ratio
10.3
%
 
10.3
%
 
10.3
%
 
10.0
%
 
9.7
%
Common equity tier 1 ratio
10.5
%
 
10.7
%
 
10.7
%
 
10.8
%
 
10.4
%
Tangible common equity / tangible assets 1
9.2
%
 
9.2
%
 
9.2
%
 
9.0
%
 
8.7
%
Book value per share - GAAP
$
30.02

 
$
29.83

 
$
29.49

 
$
29.05

 
$
28.57

Tangible book value per share 1
$
17.32

 
$
17.11

 
$
16.75

 
$
16.29

 
$
15.81

 
 
 
 
 
 
 
 
 
 
Asset Quality:
 
 
 
 
 
 
 
 
 
Nonaccrual loans
$
147,325

 
$
138,312

 
$
123,641

 
$
127,675

 
$
124,178

Other repossessed property
$
10,486

 
$
8,985

 
$
9,051

 
$
6,994

 
$
8,093

Nonaccrual loans / total loans
1.61
%
 
1.54
%
 
1.41
%
 
1.47
%
 
1.41
%
Net charge-offs (recoveries)
$
4,037

 
$
5,394

 
$
4,267

 
$
8,091

 
$
4,924

Net charge-offs (recoveries) / average total loans 2
0.18
%
 
0.24
%
 
0.20
%
 
0.38
%
 
0.22
%
Allowance for loan and lease losses / total loans
0.70
%
 
0.71
%
 
0.73
%
 
0.72
%
 
0.76
%
Watch-rated loans
$
287,468

 
$
311,611

 
$
298,963

 
$
324,457

 
$
334,673

 
 
 
 
 
 
 
 
 
 
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.


5

Exhibit 99.1

GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
 
 
Consolidated Income Statement (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
At or for the three months ended:
 
December 31, 2017
 
September 30, 2017
 
June 30,
 2017
 
March 31, 2017
 
December 31, 2016
 
(dollars in thousands)
Interest and dividend income
 
 
 
 
 
 
 
 
 
Loans
$
107,680

 
$
106,277

 
$
101,593

 
$
99,481

 
$
99,932

Taxable securities
6,494

 
6,092

 
6,238

 
6,055

 
5,878

Nontaxable securities
260

 
268

 
269

 
241

 
199

Dividends on securities
289

 
232

 
296

 
242

 
300

Federal funds sold and other
231

 
194

 
163

 
219

 
346

Total interest and dividend income
114,954

 
113,063

 
108,559

 
106,238

 
106,655

Interest expense
 
 
 
 
 
 
 
 
 
Deposits
10,998

 
10,439

 
9,478

 
7,829

 
7,290

Securities sold under agreements to repurchase
95

 
85

 
86

 
98

 
115

FHLB advances and other borrowings
2,069

 
1,702

 
994

 
1,469

 
1,271

Subordinated debentures and subordinated notes payable
1,170

 
1,165

 
1,113

 
1,098

 
1,088

Total interest expense
14,332

 
13,391

 
11,671

 
10,494

 
9,764

Net interest income
100,622

 
99,672

 
96,888

 
95,744

 
96,891

Provision for loan and lease losses
4,557

 
4,685

 
5,796

 
4,009

 
7,049

Net interest income after provision for loan and lease losses
96,065

 
94,987

 
91,092

 
91,735

 
89,842

Noninterest income
 
 
 
 
 
 
 
 
 
Service charges and other fees
13,178

 
13,742

 
14,572

 
13,574

 
13,837

Wealth management fees
2,185

 
2,002

 
2,433

 
2,429

 
2,254

Mortgage banking income, net
1,660

 
1,798

 
1,828

 
1,640

 
2,662

Net (loss) gain on sale of securities
(1
)
 
32

 

 
44

 

Net (decrease) increase in fair value of loans at fair value
(8,665
)
 
(2,073
)
 
6,060

 
(5,216
)
 
(64,001
)
Net realized and unrealized gain (loss) on derivatives
7,227

 
(1,581
)
 
(9,088
)
 
1,592

 
58,976

Other
1,090

 
820

 
1,522

 
1,426

 
1,930

Total noninterest income
16,674

 
14,740

 
17,327

 
15,489

 
15,658

Noninterest expense
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
32,868

 
31,263

 
32,868

 
32,370

 
31,634

Data processing
5,896

 
6,494

 
6,378

 
5,965

 
5,677

Occupancy expenses
4,002

 
4,033

 
4,057

 
4,355

 
4,024

Professional fees
4,240

 
4,503

 
4,141

 
3,559

 
2,835

Communication expenses
988

 
830

 
992

 
914

 
1,040

Advertising
1,059

 
954

 
1,059

 
995

 
975

Equipment expenses
846

 
973

 
809

 
768

 
798

Net loss on repossessed property and other related expenses
214

 
541

 
152

 
397

 
658

Amortization of core deposits and other intangibles
426

 
430

 
538

 
550

 
839

Acquisition expenses

 

 

 

 
710

Other
4,329

 
5,311

 
3,928

 
3,979

 
3,347

Total noninterest expense
54,868

 
55,332

 
54,922

 
53,852

 
52,537

Income before income taxes
57,871

 
54,395

 
53,497

 
53,372

 
52,963

Provision for income taxes
28,641

 
16,733

 
18,437

 
18,210

 
16,060

Net income
$
29,230

 
$
37,662

 
$
35,060

 
$
35,162

 
$
36,903


6

Exhibit 99.1

GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
 
 
Summarized Consolidated Balance Sheet (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
As of
 
December 31,
 2017
 
September 30,
 2017
 
June 30,
 2017
 
March 31,
 2017
 
December 31,
 2016
 
(dollars in thousands)
Assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
297,596

 
$
360,396

 
$
327,901

 
$
335,929

 
$
270,168

Securities
1,366,641

 
1,367,960

 
1,366,442

 
1,350,893

 
1,371,558

Total loans
9,165,373

 
8,968,553

 
8,791,852

 
8,697,426

 
8,779,107

Allowance for loan and lease losses
(64,023
)
 
(63,503
)
 
(64,214
)
 
(62,685
)
 
(66,767
)
Loans, net
9,101,350

 
8,905,050

 
8,727,638

 
8,634,741

 
8,712,340

Goodwill
739,023

 
739,023

 
739,023

 
739,023

 
739,023

Other assets
301,971

 
317,582

 
305,180

 
296,255

 
329,528

Total assets
$
11,806,581

 
$
11,690,011

 
$
11,466,184

 
$
11,356,841

 
$
11,422,617

 
 
 
 
 
 
 
 
 
 
Liabilities and stockholders' equity
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
1,932,080

 
$
1,856,126

 
$
1,915,560

 
$
2,026,627

 
$
1,954,881

Interest-bearing deposits
7,092,105

 
7,121,487

 
7,043,542

 
7,065,291

 
6,751,366

Total deposits
9,024,185

 
8,977,613

 
8,959,102

 
9,091,918

 
8,706,247

Securities sold under agreements to repurchase
116,884

 
132,636

 
123,851

 
124,472

 
142,741

FHLB advances and other borrowings
721,009

 
643,214

 
471,719

 
264,624

 
711,029

Other liabilities
176,630

 
181,548

 
178,529

 
168,966

 
183,962

Total liabilities
10,038,708

 
9,935,011

 
9,733,201

 
9,649,980

 
9,743,979

Stockholders' equity
1,767,873

 
1,755,000

 
1,732,983

 
1,706,861

 
1,678,638

Total liabilities and stockholders' equity
$
11,806,581

 
$
11,690,011

 
$
11,466,184

 
$
11,356,841

 
$
11,422,617


GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
Loan Portfolio Summary (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of
 
Fiscal year-to-date:
 
December 31, 2017
 
September 30, 2017
 
Change
($)
 
Change
(%)
 
(dollars in thousands)
Construction and development
$
622,985

 
$
538,736

 
$
84,249

 
15.6
 %
Owner-occupied CRE
1,317,585

 
1,219,523

 
98,062

 
8.0
 %
Non-owner-occupied CRE
2,035,987

 
2,025,326

 
10,661

 
0.5
 %
Multifamily residential real estate
319,139

 
341,220

 
(22,081
)
 
(6.5
)%
Commercial real estate
4,295,696

 
4,124,805

 
170,891

 
4.1
 %
Agriculture
2,177,383

 
2,122,138

 
55,245

 
2.6
 %
Commercial non-real estate
1,695,731

 
1,718,914

 
(23,183
)
 
(1.3
)%
Residential real estate
924,439

 
932,892

 
(8,453
)
 
(0.9
)%
Consumer
62,872

 
66,559

 
(3,687
)
 
(5.5
)%
Other 1
45,805

 
43,207

 
2,598

 
6.0
 %
Total unpaid principal balance
9,201,926

 
9,008,515

 
193,411

 
2.1
 %
Less: Unamortized discount on acquired loans and unearned net deferred fees and costs and loans in process
(36,553
)
 
(39,962
)
 
3,409

 
8.5
 %
Total loans
$
9,165,373

 
$
8,968,553

 
$
196,820

 
2.2
 %
 
 
 
 
 
 
 
 
1 Other loans primarily include consumer and commercial credit cards, customer deposit account overdrafts, and lease receivables.


7

Exhibit 99.1

GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Margin (FTE) (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended:
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
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
$
65,935

 
$
231

 
1.39
%
 
$
55,834

 
$
194

 
1.38
%
 
$
266,704

 
$
346

 
0.51
%
Investment securities
1,416,179

 
7,043

 
1.97
%
 
1,403,240

 
6,592

 
1.86
%
 
1,377,459

 
6,377

 
1.84
%
Non ASC 310-30 loans, net 2
8,840,929

 
106,500

 
4.78
%
 
8,728,514

 
105,120

 
4.78
%
 
8,515,947

 
99,730

 
4.65
%
ASC 310-30 loans, net
89,839

 
2,745

 
12.12
%
 
95,813

 
3,279

 
13.58
%
 
126,174

 
2,344

 
7.37
%
Loans, net
8,930,768

 
109,245

 
4.85
%
 
8,824,327

 
108,399

 
4.87
%
 
8,642,121

 
102,074

 
4.69
%
Total interest-earning assets
10,412,882

 
116,519

 
4.44
%
 
10,283,401

 
115,185

 
4.44
%
 
10,286,284

 
108,797

 
4.20
%
Noninterest-earning assets
1,176,658

 
 
 
 
 
1,166,931

 
 
 
 
 
1,152,013

 
 
 
 
Total assets
$
11,589,540

 
$
116,519

 
3.99
%
 
$
11,450,332

 
$
115,185

 
3.99
%
 
$
11,438,297

 
$
108,797

 
3.77
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
1,844,490

 
 
 
 
 
$
1,793,321

 
 
 
 
 
$
1,792,060

 
 
 
 
NOW, money market and savings deposits
5,887,195

 
$
8,291

 
0.56
%
 
5,817,665

 
$
7,909

 
0.54
%
 
5,548,112

 
$
5,129

 
0.37
%
Time deposits
1,267,300

 
2,707

 
0.85
%
 
1,280,226

 
2,530

 
0.78
%
 
1,348,119

 
2,161

 
0.64
%
Total deposits
8,998,985

 
10,998

 
0.48
%
 
8,891,212

 
10,439

 
0.47
%
 
8,688,291

 
7,290

 
0.33
%
Securities sold under agreements to repurchase
125,060

 
95

 
0.30
%
 
116,004

 
85

 
0.29
%
 
136,405

 
115

 
0.33
%
FHLB advances and other borrowings
519,575

 
2,069

 
1.58
%
 
509,959

 
1,702

 
1.32
%
 
716,953

 
1,271

 
0.70
%
Subordinated debentures and subordinated notes payable
108,316

 
1,170

 
4.28
%
 
108,275

 
1,165

 
4.27
%
 
110,962

 
1,088

 
3.89
%
Total borrowings
752,951

 
3,334

 
1.76
%
 
734,238

 
2,952

 
1.60
%
 
964,320

 
2,474

 
1.02
%
Total interest-bearing liabilities
9,751,936

 
$
14,332

 
0.58
%
 
9,625,450

 
$
13,391

 
0.55
%
 
9,652,611

 
$
9,764

 
0.40
%
Noninterest-bearing liabilities
76,477

 
 
 
 
 
84,453

 
 
 
 
 
119,443

 
 
 
 
Stockholders' equity
1,761,127

 
 
 
 
 
1,740,429

 
 
 
 
 
1,666,243

 
 
 
 
Total liabilities and stockholders' equity
$
11,589,540

 
 
 
 
 
$
11,450,332

 
 
 
 
 
$
11,438,297

 
 
 
 
Net interest spread
 
 
 
 
3.41
%
 
 
 
 
 
3.44
%
 
 
 
 
 
3.37
%
Net interest income and net interest margin (FTE)
 
 
$
102,187

 
3.89
%
 
 
 
$
101,794

 
3.93
%
 
 
 
$
99,033

 
3.82
%
Less: Tax equivalent adjustment
 
 
1,565

 
 
 
 
 
2,122

 
 
 
 
 
2,142

 
 
Net interest income and net interest margin - ties to Statements of Comprehensive Income
 
 
$
100,622

 
3.83
%
 
 
 
$
99,672

 
3.85
%
 
 
 
$
96,891

 
3.74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Annualized for all partial-year periods.
2 Interest income includes $0.6 million and $1.4 million for the first quarter of fiscal year 2018 and 2017, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.
Non-GAAP Measures and Reconciliation
We rely on certain non-GAAP measures in making financial and operational decisions about our business. We believe that each of the non-GAAP 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. generally accepted accounting principles, or 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.

8

Exhibit 99.1

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 effect of revaluation of deferred taxes). 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 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 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 or for the three months ended:
 
December 31, 2017
 
September 30, 2017
 
June 30,
 2017
 
March 31, 2017
 
December 31, 2016
 
(dollars in thousands except share and per share amounts)
Adjusted net income and adjusted earnings per common share:
 
 
 
 
 
 
 
 
 
Net income - GAAP
$
29,230

 
$
37,662

 
$
35,060

 
$
35,162

 
$
36,903

Add: Acquisition expenses, net of tax

 

 

 

 
440

Add: Deferred taxes revaluation
13,586

 

 

 

 

Adjusted net income
$
42,816

 
$
37,662

 
$
35,060

 
$
35,162

 
$
37,343

 
 
 
 
 
 
 
 
 
 
Weighted average diluted common shares outstanding
59,087,729

 
58,914,144

 
59,130,632

 
59,073,669

 
58,991,905

Earnings per common share - diluted
$
0.49

 
$
0.64

 
$
0.59

 
$
0.60

 
$
0.63

Adjusted earnings per common share - diluted
$
0.72

 
$
0.64

 
$
0.59

 
$
0.60

 
$
0.63

 
 
 
 
 
 
 
 
 
 
Tangible net income and return on average tangible common equity:
 
 
 
 
 
 
 
 
 
Net income - GAAP
$
29,230

 
$
37,662

 
$
35,060

 
$
35,162

 
$
36,903

Add: Amortization of intangible assets, net of tax
376

 
380

 
488

 
500

 
676

Tangible net income
$
29,606

 
$
38,042

 
$
35,548

 
$
35,662

 
$
37,579

 
 
 
 
 
 
 
 
 
 
Average common equity
$
1,761,127

 
$
1,740,429

 
$
1,715,460

 
$
1,686,770

 
$
1,666,243

Less: Average goodwill and other intangible assets
748,144

 
748,571

 
749,074

 
749,638

 
750,290

Average tangible common equity
$
1,012,983

 
$
991,858

 
$
966,386

 
$
937,132

 
$
915,953

Return on average common equity *
6.6
%
 
8.6
%
 
8.2
%
 
8.5
%
 
8.8
%
Return on average tangible common equity **
11.6
%
 
15.2
%
 
14.8
%
 
15.4
%
 
16.3
%
 
 
 
 
 
 
 
 
 
 
* 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.
 
 
 
 
 
 
 
 
 
 

9

Exhibit 99.1

GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Measures (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At or for the three months ended:
 
December 31, 2017
 
September 30, 2017
 
June 30,
 2017
 
March 31, 2017
 
December 31, 2016
 
(dollars in thousands except share and per share amounts)
Adjusted net interest income and adjusted net interest margin (fully-tax equivalent basis):
 
 
 
 
 
 
 
 
 
Net interest income - GAAP
$
100,622

 
$
99,672

 
$
96,888

 
$
95,744

 
$
96,891

Add: Tax equivalent adjustment
1,565

 
2,122

 
2,154

 
2,182

 
2,142

Net interest income (FTE)
102,187

 
101,794

 
99,042

 
97,926

 
99,033

Add: Current realized derivative gain (loss)
(2,476
)
 
(2,714
)
 
(3,320
)
 
(3,875
)
 
(4,486
)
Adjusted net interest income (FTE)
$
99,711

 
$
99,080

 
$
95,722

 
$
94,051

 
$
94,547

 
 
 
 
 
 
 
 
 
 
Average interest-earning assets
$
10,412,882

 
$
10,283,401

 
$
10,124,404

 
$
10,144,875

 
$
10,286,284

Net interest margin (FTE) *
3.89
%
 
3.93
%
 
3.92
%
 
3.91
%
 
3.82
%
Adjusted net interest margin (FTE) **
3.80
%
 
3.82
%
 
3.79
%
 
3.76
%
 
3.65
%
 
 
 
 
 
 
 
 
 
 
* 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
$
104,935

 
$
102,998

 
$
98,724

 
$
97,170

 
$
97,588

Add: Tax equivalent adjustment
1,565

 
2,122

 
2,154

 
2,182

 
2,142

Interest income (FTE)
106,500

 
105,120

 
100,878

 
99,352

 
99,730

Add: Current realized derivative gain (loss)
(2,476
)
 
(2,714
)
 
(3,320
)
 
(3,875
)
 
(4,486
)
Adjusted interest income (FTE)
$
104,024

 
$
102,406

 
$
97,558

 
$
95,477

 
$
95,244

 
 
 
 
 
 
 
 
 
 
Average non ASC 310-30 loans
$
8,840,929

 
$
8,728,514

 
$
8,550,349

 
$
8,531,652

 
$
8,515,947

Yield (FTE) *
4.78
%
 
4.78
%
 
4.73
%
 
4.72
%
 
4.65
%
Adjusted yield (FTE) **
4.67
%
 
4.65
%
 
4.58
%
 
4.54
%
 
4.44
%
 
 
 
 
 
 
 
 
 
 
* 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
$
117,296

 
$
114,412

 
$
114,215

 
$
111,233

 
$
112,549

Add: Tax equivalent adjustment
1,565

 
2,122

 
2,154

 
2,182

 
2,142

Total revenue (FTE)
$
118,861

 
$
116,534

 
$
116,369

 
$
113,415

 
$
114,691

 
 
 
 
 
 
 
 
 
 
Noninterest expense
$
54,868

 
$
55,332

 
$
54,922

 
$
53,852

 
$
52,537

Less: Amortization of intangible assets
426

 
430

 
538

 
550

 
839

Tangible noninterest expense
$
54,442

 
$
54,902

 
$
54,384

 
$
53,302

 
$
51,698

Efficiency ratio *
45.8
%
 
47.1
%
 
46.7
%
 
47.0
%
 
45.1
%
 
 
 
 
 
 
 
 
 
 
* 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
$
1,767,873

 
$
1,755,000

 
$
1,732,983

 
$
1,706,861

 
$
1,678,638

Less: Goodwill and other intangible assets
747,971

 
748,397

 
748,828

 
749,366

 
749,916

Tangible common equity
$
1,019,902

 
$
1,006,603

 
$
984,155

 
$
957,495

 
$
928,722

 
 
 
 
 
 
 
 
 
 
Total assets
$
11,806,581

 
$
11,690,011

 
$
11,466,184

 
$
11,356,841

 
$
11,422,617

Less: Goodwill and other intangible assets
747,971

 
748,397

 
748,828

 
749,366

 
749,916

Tangible assets
$
11,058,610

 
$
10,941,614

 
$
10,717,356

 
$
10,607,475

 
$
10,672,701

Tangible common equity to tangible assets
9.2
%
 
9.2
%
 
9.2
%
 
9.0
%
 
8.7
%
 
 
 
 
 
 
 
 
 
 

10

Exhibit 99.1

GREAT WESTERN BANCORP, INC.
 
 
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Measures (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At or for the three months ended:
 
December 31, 2017
 
September 30, 2017
 
June 30,
 2017
 
March 31, 2017
 
December 31, 2016
 
(dollars in thousands except share and per share amounts)
Tangible book value per share:
 
 
 
 
 
 
 
 
 
Total stockholders' equity
$
1,767,873

 
$
1,755,000

 
$
1,732,983

 
$
1,706,861

 
$
1,678,638

Less: Goodwill and other intangible assets
747,971

 
748,397

 
748,828

 
749,366

 
749,916

Tangible common equity
$
1,019,902

 
$
1,006,603

 
$
984,155

 
$
957,495

 
$
928,722

 
 
 
 
 
 
 
 
 
 
Common shares outstanding
58,896,189

 
58,834,066

 
58,761,597

 
58,760,517

 
58,755,989

Book value per share - GAAP
$
30.02

 
$
29.83

 
$
29.49

 
$
29.05

 
$
28.57

Tangible book value per share
$
17.32

 
$
17.11

 
$
16.75

 
$
16.29

 
$
15.81


GREAT WESTERN BANCORP, INC.
Media Contact:
Ann Nachtigal, 605-988-9217
ann.nachtigal@greatwesternbank.com
Investor Relations Contact:
David Hinderaker, 605-988-9253
david.hinderaker@greatwesternbank.com


11
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

erdeck20171231vfinal
Earnings Release | January 25, 2018


 
FY13 FY14 FY15 FY16 FY17 $1.66 $1.81 $1.90 $2.14 $2.45$2.31 $2.46 Net Income ($MM) Adj. Net Income ($MM) (2) Efficiency Ratio (2) About GWB 2 Company Snapshot EPS Performance Strong Earnings Growth and Efficiency Market Presence (1) Source: American Banker's Association (2) Efficiency ratio, adjusted net income and adjusted EPS are non-GAAP measures. See appendix for reconciliations. • Full-service regional bank focused on relationship-based business and agribusiness banking • 173 banking branches across 9 states: Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota • Headquartered in Sioux Falls, South Dakota • 6th largest farm lender bank in the U.S. as of 09/30/17 (1) FY13 FY14 FY15 FY16 FY17 $96 $105 $109 $121 $145 $10 $131 51% 50% 48% 50% 47% FY17 YTD FY18 YTD $37 $43 45% 46% CAGR EPS 10% FY17 YTD FY18 YTD $0.63 $0.49 $0.23 $0.72 EPS - diluted Adj. EPS - diluted (2)


 
Executing on Strategy Focused Business Banking Franchise with Agribusiness Expertise Strong Profitability and Growth Driven by a Highly Efficient Operating Model Risk Management Driving Strong Credit Quality Strong Capital Generation and Attractive Dividend (1) This is a non-GAAP measure. See appendix for reconciliation. • Total loans increased $196.8 million during the quarter representing 8.7% annualized growth • Loan growth was focused in the commercial real estate and agriculture segments of the portfolio, with the majority of agriculture growth driven by short-term advances for tax planning purposes • Deposit balances increased by $46.6 million compared to September 30, 2017 • Net charge-offs of $4.0 million during the quarter represent 0.18% of average total loans on an annualized basis, the lowest quarterly rate since FY16 • Loans graded "Substandard" increased by 6.4% to $247.7 million, loans graded "Watch" decreased by 7.7% to $287.5 million and nonaccrual loans increased by 6.5% to $147.3 million compared to September 30, 2017 • All regulatory capital ratios remain above minimums to be considered “well capitalized” • Strong capital generation supports a quarterly dividend of $0.20 per share ◦ Dividend payable February 21, 2018 to stockholders of record as of the close of business on February 9, 2018 3 • Fully diluted EPS of $0.49 and adjusted EPS of $0.72 for the quarter compared to $0.64 for 4QFY17, an increase of 12.5% • The effective tax rate, excluding one-time revaluation of deferred tax assets, declined to 26.0%, contributing to higher profitability • Efficiency ratio(1) of 45.8% for the quarter compared to 47.1% for the prior quarter


 
1QFY17 4QFY17 1QFY18 $99.0 $101.8 $102.2 3.82% 3.93% 3.89% 3.65% 3.82% 3.80% Revenue (1) Chart excludes changes related to loans and derivatives at fair value which netted $(1.4) million for the quarter. Dollars in thousands. (2) Adjusted NIM (FTE) is a non-GAAP measure. See appendix for reconciliations. 4 Revenue Highlights Net Interest Income ($MM) and NIM Noninterest Income (1) (2)Net Interest Income (FTE) NIM (FTE) Adjusted NIM (FTE) Service charges and other fees, $13,178 Wealth management, $2,185 Mortgage banking income, net, $1,660 Other, $1,090 • Net interest income (FTE) up 0.4% compared to 4QFY17 primarily due to higher loan interest income driven by growth in average loans outstanding • NIM (FTE) down 4 basis points and adjusted NIM (FTE) (2) down 2 basis points on a sequential quarter basis ◦ Lower statutory tax rate reduced each metric by approximately 2 basis points (lower FTE adjustment) • Noninterest income, excluding the change in fair value of fair value option loans and the net gain (loss) on related derivatives, decreased 2% compared to 4QFY17 ◦ Primarily driven by full-quarter Durbin impact NIM Analysis 3.80% 3.82% 0.11% -0.01% -0.02% -0.01% -0.01% 0.01% NIM (FTE) Adjusted NIM (FTE) (2) 4QFY17 Investment yiel d FHLB yield FTE adjustment IB deposit yield Time deposit yield 1QFY18 3.93% 3.89% 0.09% Cost of swaps: 0.09% current quarter vs 0.10% prior quarter


 
1QFY17 4QFY17 1QFY18 $51.8 $55.0 $54.9 $52.5 45.1% 47.1% 45.8% Earnings, Expenses & Provision 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 $37 $35 $35 $38 $29 $14 $43 1.28% 1.26% 1.25% 1.30% 1.00% 5 Highlights Provision for Loan Losses ($MM)Noninterest Expense ($MM) Net Income ($MM) (1) Efficiency ratio and adjusted net income are non-GAAP measures. See appendix for reconciliations. 0.8% decrease in total noninterest expense sequentially Noninterest expense Acquisition expense Efficiency Ratio (1) 1QFY17 4QFY17 1QFY18 $7.0 $4.7 $4.6 • Net income of $29.2 million included a one-time $13.6 million charge to provision for income taxes driven by the Tax Cuts and Jobs Act of 2017 ◦ Adjusted net income of $42.8 million represents a 13.7% quarter-over-quarter increase • Efficiency ratio(1) was 45.8%, down from 47.1% for 4QFY17 • Provision for loan losses stable compared to prior quarter • Effective tax rate of 26.0%, excluding one-time DTA adjustment, reflects the lower blended rate for FY18 Net Income Adjusted net income (1) ROAA


 
Balance Sheet Overview 6 Balance Sheet Highlights Total Loans ($MM) Deposits ($MM) Capital (1) TCE / TA is a non-GAAP measure. See appendix for reconciliation. • Outstanding loans increased $196.8 million during the quarter, an annualized growth rate of 8.7% ◦ Loan growth focused in owner-occupied commercial real estate, construction and agriculture • Deposits grew $46.6 million, or 0.5%, during the quarter • All key regulatory capital ratios remained stable compared to September 30, 2017 ◦ DTA adjustment reduced TBV/share by 1.3% and total capital ratio by approximately 15 basis points 0.5% FYTD growth FY13 FY14 FY15 FY16 FY17 1QFY18 $6,363 $6,787 $7,325 $7,819 $8,969 $9,165 $864 $8,683 8.7% annualized growth Total Loans Loans Acquired Total Deposits Deposits Acquired Cost of Deposits FY13 FY14 FY15 FY16 FY17 1QFY18 12.4% 11.8% 10.9% 11.1% 11.4% 11.3% 13.8% 12.9% 12.1% 12.2% 12.5% 12.3% 8.2% 8.2% 8.3% 8.5% 9.2% 9.2% Tier 1 Capital Total Capital TCE / TA (1) FY13 FY14 FY15 FY16 FY17 1QFY18 $6,948 $7,052 $7,387 $7,742 $8,978 $9,024 $863 $8,605 0.48% 0.36% 0.32% 0.32% 0.40% 0.48%


 
• Ratio of ALLL / total loans was 0.70% at December 31, 2017, down from 0.71% at September 30, 2017 ◦ Comprehensive Credit-Related Coverage is 1.06%(1), inclusive of acquired loan marks and credit adjustment on loans at fair value • Nonaccrual loans increased by $9.0 million, loans graded “Watch” decreased $24.1 million and loans graded “Substandard” increased $14.8 million during the quarter ◦ Changes each primarily driven by deterioration of a small number of CRE loans ◦ Ag grain producer annual reviews underway with overall performance in line with expectations Asset Quality 7 Highlights Net Charge-offs / Average Total Loans Sound Credit QualityWatch & Substandard Loans ($MM) “Watch” and “Substandard” loans declined as a percentage of total loans Watch Loans Substandard Loans % of Total Loans FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YTD 0.88% 0.54% 0.44% 0.14% 0.13% 0.12% 0.26% 0.18% FY12 FY13 FY14 FY15 FY16 FY17 1QFY18 2.76% 2.03% 1.16% 0.93% 1.46% 1.54% 42.4% 43.3% 60.2% 83.8% 51.1% 45.9% 43.5% NALs / Total Loans Reserves / NALs (1) Comprehensive Credit-Related Coverage is a non-GAAP measure. FY13 FY14 FY15 FY16 FY17 1QFY18 $219 $288 $310 $328 $312 $287 $139 $358 $126 $414 $184 $494 $242 $570 $233 $545 $248 $535 5.6% 6.1% 6.7% 6.6% 6.1% 5.8% 1.61%


 
Proven Business Strategy 8 Focused Business Banking Franchise with Agribusiness Expertise Risk Management Driving Solid Credit Quality Attract and Retain High-Quality Relationship Bankers Invest in Organic Growth While Optimizing Footprint Deepen Customer Relationships Strong Profitability and Growth Driven by a Highly Efficient Operating Model Strong Capital Generation and Attractive Dividend Explore Accretive Strategic Acquisition Opportunities


 
Forward-Looking Statements: This presentation 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, the effects of tax reform, the outlook for its agricultural lending segment and the interest rate environment, beyond fiscal year 2017 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 fiscal year ended September 30, 2017. 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. Non-GAAP Financial Measures: This presentation contains non-GAAP measures which our management relies on in making financial and operational decisions about our business and which exclude certain items that we do not consider reflective of our business performance. We believe that the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations. These non-GAAP measures should be considered in context with our GAAP results. A reconciliation of these non-GAAP measures appears in our earnings release dated January 25, 2017 and in Appendix 1 to this presentation. Our earnings release and this presentation are available in the Investor Relations section of our website at www.greatwesternbank.com. Our earnings release and this presentation are also available as part of our Current Report on Form 8-K filed with the SEC on January 25, 2017. Explanatory Note: In this presentation, all financial information presented refers to the financial results of Great Western Bancorp, Inc. combined with those of its predecessor, Great Western Bancorporation, Inc. Disclosures 9


 
Appendix 1 Non-GAAP Measures


 
Non-GAAP Measures 11 At or for the three months ended: December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 Adjusted net income and adjusted earnings per common share: Net income - GAAP $ 29,230 $ 37,662 $ 35,060 $ 35,162 $ 36,903 Add: Acquisition expenses, net of tax — — — — 440 Add: Deferred taxes revaluation 13,586 — — — — Adjusted net income $ 42,816 $ 37,662 $ 35,060 $ 35,162 $ 37,343 Weighted average diluted common shares outstanding 59,087,729 58,914,144 59,130,632 59,073,669 58,991,905 Earnings per common share - diluted $ 0.49 $ 0.64 $ 0.59 $ 0.60 $ 0.63 Adjusted earnings per common share - diluted $ 0.72 $ 0.64 $ 0.59 $ 0.60 $ 0.63 Tangible net income and return on average tangible common equity: Net income - GAAP $ 29,230 $ 37,662 $ 35,060 $ 35,162 $ 36,903 Add: Amortization of intangible assets, net of tax 376 380 488 500 676 Tangible net income $ 29,606 $ 38,042 $ 35,548 $ 35,662 $ 37,579 Average common equity $ 1,761,127 $ 1,740,429 $ 1,715,460 $ 1,686,770 $ 1,666,243 Less: Average goodwill and other intangible assets 748,144 748,571 749,074 749,638 750,290 Average tangible common equity $ 1,012,983 $ 991,858 $ 966,386 $ 937,132 $ 915,953 Return on average common equity * 6.6% 8.6% 8.2% 8.5% 8.8% Return on average tangible common equity ** 11.6% 15.2% 14.8% 15.4% 16.3% * 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.


 
Non-GAAP Measures 12 At or for the three months ended: December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 Adjusted net interest income and adjusted net interest margin (fully-tax equivalent basis): Net interest income - GAAP $ 100,622 $ 99,672 $ 96,888 $ 95,744 $ 96,891 Add: Tax equivalent adjustment 1,565 2,122 2,154 2,182 2,142 Net interest income (FTE) 102,187 101,794 99,042 97,926 99,033 Add: Current realized derivative gain (loss) (2,476) (2,714) (3,320) (3,875) (4,486) Adjusted net interest income (FTE) $ 99,711 $ 99,080 $ 95,722 $ 94,051 $ 94,547 Average interest-earning assets $ 10,412,882 $ 10,283,401 $ 10,124,404 $ 10,144,875 $ 10,286,284 Net interest margin (FTE) * 3.89% 3.93% 3.92% 3.91% 3.82% Adjusted net interest margin (FTE) ** 3.80% 3.82% 3.79% 3.76% 3.65% * 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 $ 104,935 $ 102,998 $ 98,724 $ 97,170 $ 97,588 Add: Tax equivalent adjustment 1,565 2,122 2,154 2,182 2,142 Interest income (FTE) 106,500 105,120 100,878 99,352 99,730 Add: Current realized derivative gain (loss) (2,476) (2,714) (3,320) (3,875) (4,486) Adjusted interest income (FTE) $ 104,024 $ 102,406 $ 97,558 $ 95,477 $ 95,244 Average non ASC 310-30 loans $ 8,840,929 $ 8,728,514 $ 8,550,349 $ 8,531,652 $ 8,515,947 Yield (FTE) * 4.78% 4.78% 4.73% 4.72% 4.65% Adjusted yield (FTE) ** 4.67% 4.65% 4.58% 4.54% 4.44% * 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.


 
Non-GAAP Measures 13 At or for the three months ended: December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 Efficiency ratio: Total revenue - GAAP $ 117,296 $ 114,412 $ 114,215 $ 111,233 $ 112,549 Add: Tax equivalent adjustment 1,565 2,122 2,154 2,182 2,142 Total revenue (FTE) $ 118,861 $ 116,534 $ 116,369 $ 113,415 $ 114,691 Noninterest expense $ 54,868 $ 55,332 $ 54,922 $ 53,852 $ 52,537 Less: Amortization of intangible assets 426 430 538 550 839 Tangible noninterest expense $ 54,442 $ 54,902 $ 54,384 $ 53,302 $ 51,698 Efficiency ratio * 45.8% 47.1% 46.7% 47.0% 45.1% * 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 $ 1,767,873 $ 1,755,000 $ 1,732,983 $ 1,706,861 $ 1,678,638 Less: Goodwill and other intangible assets 747,971 748,397 748,828 749,366 749,916 Tangible common equity $ 1,019,902 $ 1,006,603 $ 984,155 $ 957,495 $ 928,722 Total assets $ 11,806,581 $ 11,690,011 $ 11,466,184 $ 11,356,841 $ 11,422,617 Less: Goodwill and other intangible assets 747,971 748,397 748,828 749,366 749,916 Tangible assets $ 11,058,610 $ 10,941,614 $ 10,717,356 $ 10,607,475 $ 10,672,701 Tangible common equity to tangible assets 9.2% 9.2% 9.2% 9.0% 8.7% Tangible book value per share: Total stockholders' equity $ 1,767,873 $ 1,755,000 $ 1,732,983 $ 1,706,861 $ 1,678,638 Less: Goodwill and other intangible assets 747,971 748,397 748,828 749,366 749,916 Tangible common equity $ 1,019,902 $ 1,006,603 $ 984,155 $ 957,495 $ 928,722 Common shares outstanding 58,896,189 58,834,066 58,761,597 58,760,517 58,755,989 Book value per share - GAAP $ 30.02 $ 29.83 $ 29.49 $ 29.05 $ 28.57 Tangible book value per share $ 17.32 $ 17.11 $ 16.75 $ 16.29 $ 15.81


 
Non-GAAP Measures 14 Comprehensive Credit-Related Coverage ($MM) (1) Comprehensive Credit-Related Coverage is a non-GAAP measure that Management believes is useful to demonstrate that the FV adjustments related to credit and remaining loan discounts consider credit risk and should be considered as part of total coverage. GWB Legacy - Loans at Amortized Cost GWB Legacy - Loans at Fair Value HF Financial Corp. Acquired Loans Other Acquired Loans Total ALLL $ 60,798 $ — $ 907 $ 2,318 $ 64,023 Remaining Loan Discount $ — $ — $ 17,256 $ 9,280 $ 26,536 Fair Value Adjustment (Credit) $ — $ 6,180 $ — $ — $ 6,180 Total ALLL / Discount / FV Adj. $ 60,798 $ 6,180 $ 18,163 $ 11,598 $ 96,739 Total Loans $ 7,413,714 $ 980,144 $ 624,796 $ 146,719 $ 9,165,373 ALLL / Total Loans 0.82% —% 0.15% 1.58% 0.70% Discount / Total Loans —% —% 2.76% 6.33% 0.29% FV Adj. / Total Loans —% 0.63% —% —% 0.07% Total Coverage / Total Loans (1) 0.82% 0.63% 2.91% 7.91% 1.06%


 
Appendix 2 Accounting for Loans at FV and Related Derivatives


 
Loans at FV and Related Derivatives Overview Summary • For certain loans with an original term greater than 5 years with a fixed rate to the customer, Great Western Bank (“GWB”) has entered into equal and offsetting fixed-to-floating interest rate swaps with two US counterparties • Total size of the portfolio was $980.1 million at December 31, 2017 • GWB has elected the Fair Value Option (ASC 825) on these loans and applies a similar treatment to the related derivatives: • Changes in the fair value of the loans and the derivatives and the current period realized cost (benefit) of the derivatives (i.e., the net pay fixed/receive floating settlement) are recorded in earnings through noninterest income • This differs significantly from most peers who have elected Hedge Accounting treatment • The historical election is irrevocable so the concept will be present for the foreseeable future in GWB’s financial statements even if different accounting elections are made on future originations • Management presents non-GAAP measures to provide more clarity on the underlying economics Income Statement Line Item: Net increase (decrease) in fair value of loans at fair value Net realized and unrealized gain (loss) on derivatives Net Relationship Notes Increase (decrease) in FV related to interest rates $ (9,703) $ 9,703 $ — (1) Increase (decrease) in FV related to credit $ 1,038 $ — $ 1,038 (2) Current period realized cost of derivatives $ — $ (2,476) $ (2,476) (3) Subtotal, loans at FV and related derivatives $ (8,665) $ 7,227 $ (1,438) (4) (1) Equal and offsetting each period. Changes in the FV of each financial asset and liability driven by current compared to contractual rates. (2) Management records an adjustment for credit risk in noninterest income based on loss history for similar loans, adjusted for an assessment of existing market conditions for each loan segment. The FV adjustment related to credit is not included in the ALLL but loans are included in the ALLL coverage ratio denominator. (3) Current period actual cost of fixed-to-float interest rate swaps. Within non-GAAP financial measures, management reclassifies this component to interest income, resulting in adjusted interest income, adjusted net interest income and adjusted NIM, reflecting the underlying economics of the transactions. All else equal, this drag on earnings will reduce as short-term LIBOR rates increase. (4) While US GAAP mandates the presentation of these items in noninterest income, management believes the residual net amount economically represents the net credit exposure of this segment of the portfolio - presented as a "credit-related charge" in the earnings release and elsewhere (see note (2)) - and the current period derivative cost which should be analyzed relative to gross interest income received from the loan customers (see note (3)) as presented in non-GAAP measures. 16


 
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Section 4: EX-99.3 (EXHIBIT 99.3)

ipdeck20171231vfinal
Quarterly Investor Relations Presentation At and for the three months ended December 31, 2017


 
About GWB 2 Company Snapshot Exchange / Ticker • NYSE: GWB Market Cap • 58.9 million shares outstanding / $2.41 billion Ownership • 100% publicly traded Total Assets • $11.81 billion ROA / ROTCE • 1.00% / 11.6% (each impacted by a $13.6 million one-time deferred tax adjustment) Efficiency Ratio • 45.8% FTEs • Approximately 1,700 Locations • 173 branches in nine states Business & Ag Expertise • 89% of loans in business and ag segments; 6 th largest farm lender bank in the U.S.(1) (1) As of September 30, 2017. Source: American Banker's Association NOTE: All financial data is as of or for the three months ended December 31, 2017 unless otherwise noted. Market Cap calculated based on January 8, 2018 closing price of $40.97. Branch count as of December 31, 2017. See appendix for non-GAAP reconciliation of ROTCE and efficiency ratio.


 
Footprint 3 • 173 banking branches across nine Midwestern and Western states • Vibrant, diverse economies balanced across growing commercial hub cities and smaller rural communities • Opportunities for expansion into new markets within and adjacent to footprint Attractive Markets


 
Executing on Strategy (1) This is a non-GAAP measure. See appendix for reconciliation. 4 Focused Business Banking Franchise with Agribusiness Expertise Strong Profitability and Growth Driven by a Highly Efficient Operating Model Risk Management Driving Strong Credit Quality Strong Capital Generation and Attractive Dividend • All regulatory capital ratios remain above minimums to be considered “well capitalized” • Strong capital generation supports a quarterly dividend of $0.20 per share ◦ Dividend payable February 21, 2018 to stockholders of record as of the close of business on February 9, 2018 • Total loans increased $196.8 million during the quarter representing 8.7% annualized growth • Loan growth was focused in the commercial real estate and agriculture segments of the portfolio, with the majority of agriculture growth driven by short-term advances for tax planning purposes • Deposit balances increased by $46.6 million compared to September 30, 2017 • Fully diluted EPS of $0.49 and adjusted EPS of $0.72 for the quarter compared to $0.64 for 4QFY17, an increase of 12.5% • The effective tax rate, excluding one-time revaluation of deferred tax assets, declined to 26.0%, contributing to higher profitability • Efficiency ratio(1) of 45.8% for the quarter compared to 47.1% for the prior quarter • Net charge-offs of $4.0 million during the quarter represent 0.18% of average total loans on an annualized basis, the lowest quarterly rate since FY16 • Loans graded "Substandard" increased by 6.4% to $247.7 million, loans graded "Watch" decreased by 7.7% to $287.5 million and nonaccrual loans increased by 6.5% to $147.3 million compared to September 30, 2017


 
Non-Executive Officers 9 Experienced Management Team Prior experience – Senior Human Resource Generalist for Citibank and Wells Fargo 39 41 35 24 18 34 30 16 11 9 14 28 4 Ken Karels Chairman, President and CEO Doug Bass Regional President Regional President for Iowa / Kansas / Missouri, Arizona / Colorado, L&D / Marketing, Operations, and People & Culture Prior positions with U.S. Bank and First American Bank Group Pete Chapman Executive VP & CFO Responsible for financial / regulatory reporting, planning and strategy, project management, treasury, and banking operations in Minnesota and North Dakota Prior U.S. experience with E&Y Steve Ulenberg Executive VP & CRO Responsible for risk framework across Great Western Prior leadership roles in commercial and wholesale banking, risk management, and cross-organizational strategy – National Australia Bank Executive Officers Former COO and Regional President – Great Western Former President and CEO – Marquette Bank Acting Regional President for South Dakota Prior experience – VP & Regional Training Manager for Bank of the West and VP Learning and Development Officer for Community First Bankshares Inc Cheryl Olson Head of Marketing Industry experience (yrs) Great Western Bank experience (yrs) (1) Andy Pederson Head of People & Culture and L&D Donald Straka General Counsel and Corporate Secretary Prior experience – attorney and executive in banking, securities and M&A 5(1) For Messers. Chapman and Ulenberg, includes experience at National Australia Bank, Ltd. and subsidiaries; For Mr. Erkonen, includes experience at HF Financial Corp. Scott Erkonen Chief Information Officer Prior leadership role representing the United States internationally in the areas of IT Governance and Information Security -- ISO (International Organization for Standardization) 22 11 Michael Gough Executive VP & CCO Prior leadership roles with GWB include Senior Lender, EVP - Credit, and Executive GM - Strategic Business Services 35 22


 
$12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 1QFY18 $4.3 $8.2 $9.1 $9.4 $9.8 $11.7 $11.8 $3.1 $3.4 $5.2 $8.3 $9.0 $11.5 Acquisition History Note: Total assets are as of September 30 of each fiscal year unless otherwise noted. Acquired assets are the total of the fair value of total assets acquired and the net cash and cash equivalents received, at the time of acquisition of each indicated year. 6 Acquired Security Bank ($0.1 billion) Acquired Sunstate Bank and three branches from HF Financial Corp. ($0.2 billion total) Acquired North Central Bancshares Inc. ($0.4 billion total) Acquired HF Financial Corp. ($1.1 billion total) Acquired First Community Bank's Colorado franchise and a branch from Wachovia ($0.6 billion total) Acquired F&M Bank-Iowa and TierOne Bank ($3.0 billion total) Pre-Acquisition Assets Acquired Assets


 
Loan Portfolio Composition 7 Loan Portfolio ($MM) At September 30 of each fiscal year unless otherwise noted (UPB). Geographic Diversification Iowa / Kansas / Missouri 28.7% South Dakota 24.4% Nebraska 16.9% Arizona 13.9% Colorado 12.2% Minnesota / North Dakota 2.6% Other 1.3% NOTE: Other loans represent acquired workout loans and certain other loans managed by our staff FY11 FY12 FY13 FY14 FY15 FY16 FY17 1QFY18 $2,342 $2,364 $2,312 $2,541 $2,846 $3,754 $4,125 $4,296 $1,092 $1,396 $1,587 $1,681 $1,861 $2,169 $2,122 $2,177 $971 $1,354 $1,482 $1,571 $1,611 $1,673 $1,719 $1,696 $777 $940 $906 $902 $922 $1,021 $933 $924 $5,293 $6,197 $7,351 $8,736 Focused business and ag lending growth Commercial RE Agriculture C&I Residential RE Consumer & Other $6,820 $6,414 Portfolio Segmentation by Type $9,202$9,009 Commercial non- real estate, 18.4% Ag real estate, 10.8% Ag operating, 12.9% Construction & development, 6.8% Owner-occupied CRE, 14.3% Non owner-occupied CRE, 22.1% Multifamily, 3.5% Residential real estate, 10.0% Consumer & Other, 1.2%


 
Additional Loan Information 8 Incremental Impact from Acquired Loans ($MM)Highlights (1) Comprehensive Credit-Related Coverage is a non-GAAP measure that Management believes is useful to demonstrate that the FV adjustments related to credit and remaining loan discounts consider credit risk and should be considered as part of total coverage. • Loan portfolio is managed to Board-approved concentration limits and regulatory guidelines • All categories are within limits including regulatory 300/100% of capital CRE limits • Income statement impact from acquired loans (including indemnification asset amortization) has not significantly inflated earnings and is not expected to in the future • Management remains very comfortable with credit coverage levels Includes ASC 310-20 accretion, ASC 310-30 accretion in excess of contractual interest and indem. asset amortization ASC 310-30 Non ASC 310-30 2014 2015 2016 2017 FY18 YTD $(5.6) $0.5 $1.4 $3.1 $1.3 $0.2 $(3.3) $2.1 $2.1 $0.2 GWB Legacy - Loans at Amortized Cost GWB Legacy - Loans at Fair Value HF Financial Corp. Acquired Loans Other Acquired Loans Total ALLL $ 60,798 $ — $ 907 $ 2,318 $ 64,023 Remaining Loan Discount $ — $ — $ 17,256 $ 9,280 $ 26,536 Fair Value Adjustment (Cr