Great Western Bancorp, Inc. Announces Fourth Quarter and Fiscal Year 2019 Financial Results; 9.4% Increase in Diluted EPS and 10.5% Increase in TBV1 for Fiscal Year 2019
Highlights for the Fourth Quarter of Fiscal Year 2019 (all quarterly comparisons in this document refer to the third quarter of fiscal year 2019, except as noted)
•Net income was $50.3 million, or $0.89 per diluted share, compared to $26.8 million, or $0.47 per diluted share
•Net interest margin remained stable at 3.70% while adjusted net interest margin1, 2 decreased 2 basis points to 3.69%
•Noninterest expenses were well controlled during the quarter contributing to an efficiency ratio1 of 44.5%
•Total loans declined $180.2 million, or 1.8%, for the quarter
•Total deposits increased $64.4 million, or 0.6%, for the quarter
•Credit-related charges were substantially reduced from the prior quarter to $4.2 million
•Approximately 0.7 million shares of common stock were repurchased and retired during the quarter under the authorized stock repurchase program, bringing total common stock repurchased to 2.7 million shares for fiscal year 2019
Highlights for Fiscal Year 2019 (all fiscal year comparisons refer to fiscal year 2018, except as noted)
•Net income was $167.4 million, or $2.92 per diluted share, compared to $157.9 million, or $2.67 per diluted share, a 9.4% increase
•Net interest margin and adjusted net interest margin1, 2 were 3.74%, a decrease from the prior fiscal year of 15 and 10 basis points, respectively
•Efficiency ratio1 was 45.8% for fiscal year 2019 compared to 47.1% for fiscal year 2018
•Total loans were $9.71 billion, an increase of $290.8 million, or 3.1%, and total deposits increased $566.8 million, or 5.8%, to $10.30 billion
•Profitability remains strong with return on tangible common equity1 of 15.3% and tangible book value1 increased 10.5% for the fiscal year
Sioux Falls, SD - October 24, 2019 - Great Western Bancorp, Inc. (NYSE: GWB) today reported net income of $50.3 million, or $0.89 per diluted share, for the fourth quarter of fiscal year 2019, compared to net income of $26.8 million, or $0.47 per diluted share, for the third quarter of fiscal year 2019. Net income for fiscal year 2019 was $167.4 million, or $2.92 per diluted share, compared to $157.9 million, or $2.67 per diluted share for fiscal year 2018.
"Overall we are pleased with the performance of the Company for the 2019 fiscal year, with an increase in tangible book value per share over 10% for the year," said Ken Karels, Chairperson of the Board, President and Chief Executive Officer. "I am confident that while asset quality metrics have deteriorated through the latter half of 2019, the team has a good plan to manage these metrics during 2020."
Net Interest Income and Net Interest Margin2
Net interest income was $108.2 million for the quarter, an increase of $1.1 million, or 1.1%. The increase was primarily attributable to a slightly higher interest-bearing bank deposits yield during the quarter combined with a decrease in the cost of deposits. The cost of deposits modestly decreased 5 basis points during the quarter, compared to an increase of 3 basis points in the previous quarter.
Net interest margin was 3.70% each of the quarters ended September 30, 2019 and June 30, 2019. Adjusted net interest margin1, which adjusts for the realized gain (loss) on interest rate swaps, was 3.69% and 3.71%, respectively, for the same periods. The lower margins were primarily driven by the yield on loans, which decreased 3 basis points to 5.22%, offset by the cost of deposits, which had a moderate decrease of 5 basis points to 1.06%.
Total loans outstanding were $9.71 billion as of September 30, 2019, a decrease of $180.2 million, or 1.8%, during the quarter, and an increase of $290.8 million, or 3.1%, for the fiscal year. The decline in loans during the quarter was mainly attributable to commercial loans refinancing to other lenders in this competitive rate environment. The majority of the growth for the fiscal year occurred in the commercial real estate ("CRE") segment of the portfolio, which grew by $463.1 million, or 10.0%, mainly in the non-owner-occupied category, partially offset by a reduction in the agriculture segment of $174.0 million, or 8.0%.
1 This is a non-GAAP financial measure management believes is helpful to understanding trends in the business that may not be fully apparent based only on the most comparable GAAP financial measure. Further information on this financial measure and a reconciliation to the most comparable GAAP financial 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.
The following information was filed by Great Western Bancorp, Inc. (GWB) on Thursday, October 24, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.