Sioux Falls, SD: Great Western Bancorp, Inc. announced net income of $26.7 million, or $0.46 per share, for the quarter ended December 31, 2014, compared to net income of $28.6 million, or $0.49 per share, for the same quarter of fiscal year 2014.
In the current quarter, provision for loan losses was $3.3 million compared to $(0.9) million (i.e., release of provision for loan losses) in the first quarter of fiscal year 2014, an increase of $4.2 million. Higher provision for loan losses was partially offset by stronger net interest income and lower noninterest expenses. Asset quality metrics continue to remain strong and trend positively.
Ken Karels, President and Chief Executive Officer of Great Western Bancorp, Inc., said, “We are pleased with our financial performance for the quarter and the momentum it provides for the remainder of the fiscal year. We were able to deliver strong net income, recorded sound loan and deposit growth, further rationalized our branch footprint and continued the trend of reducing our cost of deposits, which dates to fiscal year 2011. We have a strong platform in place with balanced and diversified lending exposure. In addition, we have very limited exposure to energy which should be reassuring to our shareholders in light of current economic conditions.” In connection with this change, the Company has determined that the current realized gain (loss) on the derivatives should have been presented within noninterest income.
Previously, the current realized gain (loss) on the derivatives was presented in interest income on a net basis with interest income recognized on the loans. Based on an evaluation of quantitative and qualitative factors, the Company believes correcting the presentation of the current realized gain (loss) on the derivatives is not material to its financial statements previously presented and has not impacted the Company’s net income for any period presented. Because the Company believes that, economically, the current realized gain (loss) on the derivatives increases (decreases) the fixed interest income received from customers (as historically presented), the Company presented a non-GAAP adjusted net interest margin and adjusted loan yield to reflect the underlying economics.
