Great Western Bancorp (GWB) Misses Q4 EPS by 20c

Great Western Bancorp (NYSE: GWB) reported Q4 EPS of $0.20, $0.20 worse than the analyst estimate of $0.40.

Highlights for the Fourth Quarter of Fiscal Year 2020 (all quarterly comparisons in this document refer to the third quarter of fiscal year 2020, except as noted)

• Net income of $11.1 million, or $0.20 per diluted share, compared to net income of $5.4 million, or $0.10 per diluted share
• Net interest income of $107.5 million, compared to $107.9 million, with net interest margin 1 of 3.51%, down from 3.57%
• Noninterest loss of $4.0 million, compared to a loss of $11.7 million
• Average net loans of $10.02 billion, flat with prior quarter
• Average deposits of $11.03 billion, an increase of $0.21 billion
• Allowance for loan and lease losses of 1.49% of total loans, up 5 basis points; net chargeoffs of $15.1 million and 0.59% of average total loans (annualized), up $5.7 million and 22 basis points, respectively
• Capital ratios increased to 11.8% and 13.3% for Tier 1 and total capital, respectively, and 11.0% for common equity tier one capital
• The Company's Board of Directors declared a quarterly dividend of $0.01 per share

"This quarter's results bring to a close what has been a challenging fiscal year," said Mark Borrecco, President and Chief Executive Officer. "Our underlying earnings were again offset with increased credit charges and costs from strategic actions to improve the position of the bank. This includes the closure of our Wichita LPO, a reduction of FTEs to align with current market conditions, payoff of $205.0 million in FHLB borrowings to right-size the balance sheet and improve future earnings, and a commitment to a new platform to support our small business initiative. Asset quality continues to be our primary focus resulting in higher frequency monitoring and proactive issue identification. We used a third party to complete a supplemental review of critical areas of the loan portfolio this quarter, confirming the risk ratings of our portfolio. As a result of the actions we have taken, including the dividend reductions, we saw an improvement of our capital ratios as we remain above well-capitalized regulatory limits."

"The COVID-19 pandemic is still running its course, and the uncertainty of its continued impact on the economy and on families and individuals is not something we are taking lightly. As we work through these difficult times, we continue to seek to make conservative decisions as we pivot and optimize our resources in this time of disruption. I continue to be proud of the contributions made by our employees as we maintain our focus on serving our customers and supporting our communities."

For earnings history and earnings-related data on Great Western Bancorp (GWB) click here.

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