Document

Through this time of disruption we have remained open for business supporting our customers while implementing our business continuity plan to mitigate the risks of the spread of COVID-19 to our employees and customers. As of April 24th, we have more than 750 employees working remotely from home with those still in the office appropriately spaced, 97% of our branches open with limited access, increased functionality of ATM, online banking and mobile channels, and processed 2,300 applications approved for Paycheck Protection Program loans totaling over $600.0 million. We have also taken such other actions as social distancing, restrictions on in-person meetings and conferences, Company travel restrictions and increased sanitary protocols. We believe these actions offer the best protection for our employees and customers, an enhance our ability to continue providing our banking services.

In addition, the COVID-19 impacts included $73.8 million in several credit and other related charges for loan and other real estate reserves, including a $59.7 million charge for collectively evaluated allowance increases in provision expense under the incurred loss model, $7.1 million and $3.3 million of charges for fair value credit risk and derivative reserves in noninterest income, respectively, a $3.3 million write down on an OREO hotel property negatively impacted by COVID-19 pandemic travel restrictions, and $0.4 million of charges for the reserve on unfunded commitments in noninterest expenses. All of these pretax expenses are offset in part by a related benefit from income taxes of $17.2 million. See also the "Non-GAAP Financial Measures and Reconciliation" section in this document for further discussion of the above items.

With the many uncertainties of the COVID-19 pandemic, including the full impacts on the future financial results and operations of the Company, the Board of Directors has determined to reduce its regular quarterly dividend for the quarter ending March 31, 2020 to $0.15 per common share. The reduced dividend will help strengthen the Company's balance sheet and liquidity in light of the uncertainty surrounding the COVID-19 pandemic. The dividend will be payable on May 29, 2020 to stockholders of record as of close of business on May 15, 2020. The aggregate dividend payment will be approximately $8.3 million. The Board of Directors will continue to evaluate the impacts of the COVID-19 pandemic and the appropriateness of declaring future dividends throughout the year.

Total loans outstanding were $9.69 billion as of March 31, 2020, an increase of $67.1 million, or 0.7%. The increase in loans during the quarter was mainly attributable to the CRE segment of the portfolio, which increased $138.1 million, a $22.8 million increase in the commercial non-real estate segment, combined with a reduction in the agriculture segment of $98.9 million. The increase in the CRE segment of the portfolio was attributable to growth from construction drawdowns and new relationships across the footprint and a $35.5 million increase in fair value of loans the Company held at fair value due to a decline in interest rates during the quarter. The increase in the commercial non-real estate segment was due to increased activity in warehouse mortgage lending to independent mortgage originators, while the decrease in the agriculture segment was due largely to a seasonal decrease related to customer tax planning and a number of relationships refinanced elsewhere.

Loans graded "Watch" increased $4.0 million, or 1.0%, to $420.3 million, while loans graded "Substandard" decreased $12.4 million, or 1.9%, to $627.7 million. The decrease in loans graded "Substandard" was primarily due to paydowns of several agriculture and commercial loans along with a number of upgrades, all outpacing a more normalized number of downgrades to substandard. Nonaccrual loans were $213.1 million as of March 31, 2020, representing an increase of $57.0 million, or 36.5%, driven by a small number of relationships in healthcare and agriculture industries as they progress through the workout process. Total other repossessed property balances were $27.3 million as of March 31, 2020, a decrease of $12.2 million, or 30.9%.


GREAT WESTERN BANCORP, INC.
Summary of Credit-Related Charges (Unaudited)

		For the six months ended:						For the three months ended:
Item	Included within F/S Line Item(s):	March 31, 2020		March 31, 2019		March 31, 2020		December 31, 2019		March 31, 2019
		(dollars in thousands)
Pre-COVID-19 pandemic related
Provision for loan and lease losses	Provision for loan and lease losses	$	20,186	$	12,888	$	12,083	$	8,103	$	7,673
Net other repossessed property charges	Net loss on repossessed property and other related expenses	2,719		3,467		2,377		342		404
Net reversal of interest income on nonaccrual loans	Interest income on loans	3,094		296		1,088		2,006		337
Loan fair value adjustment related to credit	Net decrease (increase) in fair value of loans at fair value	5,557		762		3,423		2,134		(422)
Subtotal pre-COVID-19 pandemic related		$	31,556	$	17,413	$	18,971	$	12,585	$	7,992
COVID-19 pandemic related
Provision for loan and lease losses	Provision for loan and lease losses	$	59,712	$	—	$	59,712	$	—	$	—
Net other repossessed property charges	Net loss on repossessed property and other related expenses	3,314		—		3,314		—		—
Net reversal of interest income on nonaccrual loans	Interest income on loans	—		—		—		—		—
Loan fair value adjustment related to credit	Net decrease (increase) in fair value of loans at fair value	7,100		—		7,100		—		—
Subtotal COVID-19 pandemic related		70,126		—		70,126		—		—
Total credit-related charges		$	101,682	$	17,413	$	89,097	$	12,585	$	7,992

In determining the credit related charges attributable to the COVID-19 pandemic, we considered the impact upon our loan portfolio. Industries such as oil & energy, hotels & resorts, restaurants, retail malls, airlines and others have been cited as being at risk for significant revenue loss. Within our portfolio at March 31, 2020, $1.14 billion, or 11.8% relates to hotels & resorts, $109.8 million, or 1.1% relates to restaurants, with exposure in such other identified industries being immaterial. At this time it is difficult to determine ultimate impact upon our portfolio, but we are of the view the credit-related adjustments reflect the best estimate of incurred losses in our portfolio as of March 31, 2020.

Noninterest loss was $0.1 million, a decrease of $15.8 million. Included within noninterest income for the current quarter is $14.7 million in net loss related to the change in fair value of loans for which the Company has elected the fair value option and the net realized and unrealized gain (loss) of the related derivatives, $10.4 million of which was related to the COVID-19 pandemic impact on loan fair value adjustment related to credit. Excluding this item, remaining noninterest income was $14.6 million for the quarter, compared to $17.2 million, a decrease of $2.6 million primarily related to lower deposit revenue and interchange revenue from seasonal declines combined with further declines in transaction activity from COVID-19 pandemic impacts.

Total noninterest expense was $808.5 million, an increase of $751.5 million. Included within this amount is goodwill impairment of $740.6 million, intangible assets impairment of $1.8 million, and the COVID-19 pandemic credit related charges of a $3.3 million charge for one OREO property negatively impacted by COVID-19 travel restrictions and $0.4 million increase in reserve for unfunded commitments. Excluding these items, noninterest expense was $62.3 million for the quarter, compared to $56.9 million, an increase of $5.4 million, or 9.5%. The remaining increase was driven by an increase in salaries and employee benefits related to annual merit increases effective in January, a one-time bonus payment to retail staff of $0.5 million and elevated legal and administrative costs on OREO assets.

Great Western Bancorp, Inc. will host a conference call to discuss its financial results for the second quarter of fiscal year 2020 on Thursday, April 30, 2020 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 May 14, 2020. To access the replay, dial (877) 344-7529 (U.S.) and use conference ID 10141770 International callers should dial (412) 317-0088 and enter the same conference ID number.

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.

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, strategies for managing troubled loans, the impact on the business arising from the COVID-19 outbreak 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 most recently ended fiscal year, Form 10-Q for the quarter ended December 31, 2019 and in other periodic filings with the Securities and Exchange Commission. 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.


GREAT WESTERN BANCORP, INC.
Consolidated Financial Data (Unaudited)

	At and for the six months ended:									At and for the three months ended:
	March 31, 2020			March 31, 2019			March 31, 2020			December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019
	(dollars in thousands, except share and per share amounts)
Operating Data:
Interest income (FTE)	$	259,817		$	268,879		$	126,757		$	133,060		$	140,257		$	139,623		$	135,328
Interest expense	49,624			57,578			23,260			26,364			32,061			32,570			30,411
Noninterest income	15,650			34,943			(83)			15,733			15,023			10,766			18,223
Noninterest expense	865,383			113,686			808,453			56,930			55,212			56,000			56,580
Provision for loan and lease losses	79,898			12,888			71,795			8,103			1,982			26,077			7,673
Net income	(697,344)			90,297			(740,618)			43,274			50,285			26,783			44,511
Adjusted net income ¹	$	72,354		$	90,297		$	29,080		$	43,274		$	50,285		$	26,783		$	44,511
Common shares outstanding	55,013,928			56,938,435			55,013,928			56,382,915			56,283,659			56,939,032			56,938,435
Weighted average diluted common shares outstanding	56,141,816			57,556,984			55,906,002			56,457,967			56,804,172			57,110,103			57,074,674
Earnings per common share - diluted	$	(12.42)		$	1.57		$	(13.25)		$	0.77		$	0.89		$	0.47		$	0.78
Adjusted earnings per common share - diluted ¹	$	1.29		$	1.57		$	0.52		$	0.77		$	0.89		$	0.47		$	0.78
Performance Ratios:
Net interest margin (FTE) ¹ ²	3.63		%	3.78		%	3.59		%	3.68		%	3.70		%	3.70		%	3.75		%
Adjusted net interest margin (FTE) ¹ ²	3.60		%	3.79		%	3.55		%	3.65		%	3.69		%	3.71		%	3.76		%
Return on average total assets ²	(10.86)		%	1.46		%	(23.16)		%	1.34		%	1.55		%	0.84		%	1.44		%
Return on average common equity ²	(72.9)		%	10.0		%	(155.3)		%	9.0		%	10.6		%	5.8		%	9.9		%
Return on average tangible common equity ¹ ²	2.8		%	17.0		%	(9.3)		%	15.0		%	17.6		%	9.7		%	16.9		%
Efficiency ratio ¹	54.1		%	45.8		%	63.5		%	46.2		%	44.5		%	47.2		%	45.6		%
Capital:
Tier 1 capital ratio	11.3		%	11.4		%	11.3		%	12.0		%	11.7		%	11.3		%	11.4		%
Total capital ratio	12.9		%	12.4		%	12.9		%	13.0		%	12.7		%	12.4		%	12.4		%
Tier 1 leverage ratio	9.2		%	10.2		%	9.2		%	10.4		%	10.1		%	10.0		%	10.2		%
Common equity tier 1 ratio	10.6		%	10.7		%	10.6		%	11.3		%	11.0		%	10.6		%	10.7		%
Tangible common equity / tangible assets ¹	9.3		%	9.2		%	9.3		%	9.7		%	9.6		%	9.3		%	9.2		%
Book value per share - GAAP	$	20.97		$	32.53		$	20.97		$	34.06		$	33.76		$	33.04		$	32.53
Tangible book value per share ¹	$	20.84		$	19.43		$	20.84		$	20.77		$	20.52		$	19.94		$	19.43
Asset Quality:
Nonaccrual loans	$	213,075		$	121,616		$	213,075		$	156,113		$	107,191		$	118,060		$	121,616
Other repossessed property	$	27,289		$	32,450		$	27,289		$	39,490		$	36,764		$	36,393		$	32,450
Nonaccrual loans / total loans	2.20		%	1.24		%	2.20		%	1.62		%	1.10		%	1.19		%	1.24		%
Net charge-offs (recoveries)	$	14,722		$	9,425		$	8,626		$	6,096		$	7,754		$	17,534		$	5,863
Net charge-offs (recoveries) / average total loans ²	0.31		%	0.20		%	0.36		%	0.25		%	0.31		%	0.72		%	0.25		%
Allowance for loan and lease losses / total loans	1.40		%	0.70		%	1.40		%	0.76		%	0.73		%	0.77		%	0.70		%
Watch-rated loans	$	420,252		$	301,099		$	420,252		$	416,259		$	405,549		$	220,883		$	301,099
Substandard loans	$	627,720		$	258,946		$	627,720		$	640,121		$	472,497		$	475,999		$	258,946

¹This 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.
²Annualized for all partial-year periods.


GREAT WESTERN BANCORP, INC.
Consolidated Income Statement (Unaudited)

	At and for the six months ended:						At and for the three months ended:
	March 31, 2020		March 31, 2019		March 31, 2020		December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019
	(dollars in thousands)
Interest income
Loans	$	232,787	$	245,763	$	113,356	$	119,431	$	126,779	$	126,392	$	123,432
Investment securities	22,827		19,145		11,329		11,498		10,935		11,430		9,957
Federal funds sold and other	1,166		1,039		558		608		1,056		377		497
Total interest income	256,780		265,947		125,243		131,537		138,770		138,199		133,886
Interest expense
Deposits	40,807		50,892		18,867		21,940		27,211		28,615		27,098
FHLB advances and other borrowings	6,268		3,926		3,155		3,113		3,487		2,538		1,923
Subordinated debentures and subordinated notes payable	2,549		2,760		1,238		1,311		1,363		1,417		1,390
Total interest expense	49,624		57,578		23,260		26,364		32,061		32,570		30,411
Net interest income	207,156		208,369		101,983		105,173		106,709		105,629		103,475
Provision for loan and lease losses	79,898		12,888		71,795		8,103		1,982		26,077		7,673
Net interest income after provision for loan and lease losses	127,258		195,481		30,188		97,070		104,727		79,552		95,802
Noninterest income
Service charges and other fees	20,597		21,897		9,188		11,409		11,674		10,321		10,209
Wealth management fees	6,086		4,358		3,122		2,964		2,322		2,234		2,117
Mortgage banking income, net	2,757		2,311		1,145		1,612		1,482		1,055		991
Net gain (loss) on sale of securities	—		(513)		—		—		13		322		—
Net increase (decrease) in fair value of loans at fair value	20,608		33,234		35,541		(14,933)		11,749		16,429		14,018
Net realized and unrealized (loss) gain on derivatives	(36,698)		(29,348)		(50,214)		13,516		(13,191)		(20,904)		(11,032)
Other	2,300		3,004		1,135		1,165		974		1,309		1,920
Total noninterest income	15,650		34,943		(83)		15,733		15,023		10,766		18,223
Noninterest expense
Salaries and employee benefits	73,217		69,307		37,312		35,905		33,099		33,899		34,537
Data processing and communication	11,896		11,242		6,123		5,773		6,602		6,234		5,964
Occupancy and equipment	10,690		10,665		5,597		5,093		5,185		4,934		5,539
Professional fees	9,027		7,258		5,263		3,764		3,398		3,923		3,970
Advertising	1,823		2,154		958		865		1,194		1,145		1,216
Net loss on repossessed property and other related expenses	6,033		3,467		5,691		342		305		595		404
Goodwill and intangible assets impairment	742,352		—		742,352		—		—		—		—
Other	10,345		9,593		5,157		5,188		5,429		5,270		4,950
Total noninterest expense	865,383		113,686		808,453		56,930		55,212		56,000		56,580
(Loss) income before income taxes	(722,475)		116,738		(778,348)		55,873		64,538		34,318		57,445
(Benefit from) provision for income taxes	(25,131)		26,441		(37,730)		12,599		14,253		7,535		12,934
Net (loss) income	$	(697,344)	$	90,297	$	(740,618)	$	43,274	$	50,285	$	26,783	$	44,511


GREAT WESTERN BANCORP, INC.
Summarized Consolidated Balance Sheet (Unaudited)

	As of
	March 31, 2020		December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019
	(dollars in thousands)
Assets
Cash and cash equivalents	$	347,486	$	247,421	$	243,474	$	225,356	$	282,638
Investment securities	1,990,027		1,904,291		1,783,208		1,799,430		1,763,305
Total loans	9,693,295		9,626,224		9,706,763		9,886,971		9,770,911
Allowance for loan and lease losses	(135,950)		(72,781)		(70,774)		(76,546)		(68,003)
Loans, net	9,557,345		9,553,443		9,635,989		9,810,425		9,702,908
Goodwill	—		740,562		739,023		739,023		739,023
Other assets	492,950		405,948		386,607		380,662		342,288
Total assets	$	12,387,808	$	12,851,665	$	12,788,301	$	12,954,896	$	12,830,162
Liabilities and stockholders' equity
Noninterest-bearing deposits	$	1,973,629	$	2,029,872	$	1,956,025	$	1,936,986	$	1,824,507
Interest-bearing deposits	8,205,486		8,058,656		8,344,314		8,298,958		8,643,876
Total deposits	10,179,115		10,088,528		10,300,339		10,235,944		10,468,383
Securities sold under agreements to repurchase	64,809		66,289		68,992		56,925		62,537
FHLB advances and other borrowings	800,000		575,000		340,000		605,000		275,000
Other liabilities	190,420		201,179		178,721		175,899		171,848
Total liabilities	11,234,344		10,930,996		10,888,052		11,073,768		10,977,768
Stockholders' equity	1,153,464		1,920,669		1,900,249		1,881,128		1,852,394
Total liabilities and stockholders' equity	$	12,387,808	$	12,851,665	$	12,788,301	$	12,954,896	$	12,830,162


GREAT WESTERN BANCORP, INC.
Loan Portfolio Summary (Unaudited)

	As of										Fiscal year-to-date:
	March 31, 2020		December 31, 2019		September 30, 2019		Change ($)		Change (%)
	(dollars in thousands)
Construction and development	$	434,264	$	496,156	$	463,757	$	(29,493)	(6.4)	%
Owner-occupied CRE	1,414,476		1,380,773		1,411,199		3,277		0.2	%
Non-owner-occupied CRE	2,910,516		2,827,484		2,853,131		57,385		2.0	%
Multifamily residential real estate	463,563		380,301		364,323		99,240		27.2	%
Commercial real estate	5,222,819		5,084,714		5,092,410		130,409		2.6	%
Agriculture	1,881,792		1,980,678		2,008,644		(126,852)		(6.3)	%
Commercial non-real estate	1,699,197		1,676,426		1,719,956		(20,759)		(1.2)	%
Residential real estate	820,759		811,735		812,208		8,551		1.1	%
Consumer	52,640		50,697		51,925		715		1.4	%
Other ¹	39,908		46,875		47,541		(7,633)		(16.1)	%
Total unpaid principal balance	9,717,115		9,651,125		9,732,684		(15,569)		(0.2)	%
Less: Unamortized discount on acquired loans and unearned net deferred fees and costs and loans in process	(23,820)		(24,901)		(25,921)		2,101		(8.1)	%
Total loans	$	9,693,295	$	9,626,224	$	9,706,763	$	(13,468)	(0.1)	%
¹ Other loans primarily include consumer and commercial credit cards, customer deposit account overdrafts, and lease receivables.


GREAT WESTERN BANCORP, INC.
Net Interest Margin (FTE) (Unaudited)

	Three Months Ended
	March 31, 2020										December 31, 2019								March 31, 2019
	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 ²	$	56,883	$	558	3.95	%	$	32,803	$	608	7.37	%	$	63,546	$	497	3.17	%
Investment securities	1,987,045		11,329		2.29	%	1,904,350		11,498		2.40	%	1,603,038		9,957		2.52	%
Non-ASC 310-30 loans, net ³	9,496,153		113,484		4.81	%	9,554,161		119,232		4.96	%	9,615,096		122,970		5.19	%
ASC 310-30 loans, net	50,372		1,386		11.07	%	52,296		1,722		13.10	%	63,879		1,904		12.09	%
Loans, net	9,546,525		114,870		4.84	%	9,606,457		120,954		5.01	%	9,678,975		124,874		5.23	%
Total interest-earning assets	11,590,453		126,757		4.40	%	11,543,610		133,060		4.59	%	11,345,559		135,328		4.84	%
Noninterest-earning assets	1,273,143						1,267,983						1,186,286
Total assets	$	12,863,596	$	126,757	3.96	%	$	12,811,593	$	133,060	4.13	%	$	12,531,845	$	135,328	4.38	%
Liabilities and Stockholders' Equity
Noninterest-bearing deposits	$	1,942,686					$	1,977,084					$	1,800,307
Interest-bearing deposits	6,473,524		$	12,083	0.75	%	6,306,861		$	13,373	0.84	%	6,363,730		$	17,865	1.14	%
Time deposits	1,686,977		6,784		1.62	%	1,847,954		8,567		1.84	%	2,039,208		9,233		1.84	%
Total deposits	10,103,187		18,867		0.75	%	10,131,899		21,940		0.86	%	10,203,245		27,098		1.08	%
Securities sold under agreements to repurchase	56,369		24		0.17	%	66,527		31		0.19	%	63,237		43		0.28	%
FHLB advances and other borrowings	581,834		3,131		2.16	%	497,034		3,082		2.47	%	264,347		1,880		2.88	%
Subordinated debentures and subordinated notes payable	108,714		1,238		4.58	%	108,663		1,311		4.80	%	108,522		1,390		5.19	%
Total borrowings	746,917		4,393		2.37	%	672,224		4,424		2.62	%	436,106		3,313		3.08	%
Total interest-bearing liabilities	10,850,104		$	23,260	0.86	%	10,804,123		$	26,364	0.97	%	10,639,351		$	30,411	1.16	%
Noninterest-bearing liabilities	95,457						98,951						69,554
Stockholders' equity	1,918,035						1,908,519						1,822,940
Total liabilities and stockholders' equity	$	12,863,596					$	12,811,593					$	12,531,845
Net interest spread					3.10	%					3.16	%					3.22	%
Net interest income and net interest margin (FTE)			$	103,497	3.59	%			$	106,696	3.68	%			$	104,917	3.75	%
Less: Tax equivalent adjustment			1,514						1,523						1,442
Net interest income and net interest margin - ties to Statements of Comprehensive Income			$	101,983	3.54	%			$	105,173	3.62	%			$	103,475	3.70	%
¹ Annualized for all partial-year periods.
² Interest income includes $0.4 million and $0.1 million for the second quarter of fiscal years 2020 and 2019, respectively, resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets.
³Interest income includes $0.4 million and $0.4 million for the second quarter of fiscal years 2020 and 2019, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.


GREAT WESTERN BANCORP, INC.
Net Interest Margin (FTE) (Unaudited)

	Six Months Ended
	March 31, 2020										March 31, 2019
	Average Balance		Interest (FTE)		Yield / Cost ¹		Average Balance		Interest (FTE)		Yield / Cost ¹
	(dollars in thousands)
Assets
Interest-bearing bank deposits ²	$	44,843	$	1,166	5.20	%	$	77,663	$	1,039	2.68	%
Investment securities	1,945,698		22,827		2.35	%	1,547,161		19,145		2.48	%
Non-ASC 310-30 loans, net ³	9,525,157		232,716		4.89	%	9,525,498		244,821		5.15	%
ASC 310-30 loans, net	51,334		3,108		12.11	%	65,857		3,874		11.80	%
Loans, net	9,576,491		235,824		4.93	%	9,591,355		248,695		5.20	%
Total interest-earning assets	11,567,032		259,817		4.49	%	11,216,179		268,879		4.81	%
Noninterest-earning assets	1,270,562						1,186,554
Total assets	$	12,837,594	$	259,817	4.05	%	$	12,402,733	$	268,879	4.35	%
Liabilities and Stockholders' Equity
Noninterest-bearing deposits	$	1,959,885					$	1,831,877
Interest-bearing deposits	6,390,193		$	25,456	0.80	%	6,257,167		$	33,601	1.08	%
Time deposits	1,767,465		15,351		1.74	%	1,988,251		17,291		1.74	%
Total deposits	10,117,543		40,807		0.81	%	10,077,295		50,892		1.01	%
Securities sold under agreements to repurchase	61,448		55		0.18	%	71,543		99		0.28	%
FHLB advances and other borrowings	539,434		6,213		2.30	%	253,421		3,827		3.03	%
Subordinated debentures and subordinated notes payable	108,688		2,549		4.69	%	108,503		2,760		5.10	%
Total borrowings	709,570		8,817		2.49	%	433,467		6,686		3.09	%
Total interest-bearing liabilities	10,827,113		$	49,624	0.92	%	10,510,762		$	57,578	1.10	%
Noninterest-bearing liabilities	97,204						71,975
Stockholders' equity	1,913,277						1,819,996
Total liabilities and stockholders' equity	$	12,837,594					$	12,402,733
Net interest spread					3.13	%					3.25	%
Net interest income and net interest margin (FTE)			$	210,193	3.63	%			$	211,301	3.78	%
Less: Tax equivalent adjustment			3,037						2,932
Net interest income and net interest margin - ties to Statements of Comprehensive Income			$	207,156	3.58	%			$	208,369	3.73	%
¹ Annualized for all partial-year periods.
² Interest income includes $0.8 million and $0.1 million for the first six months of fiscal years 2020 and 2019, respectively, resulting from interest earned on derivative collateral included in other assets on the consolidated balance sheets.
³Interest income includes $1.0 million and $0.7 million for the first six months of fiscal years 2020 and 2019, respectively, resulting from accretion of purchase accounting discount associated with acquired loans.

We rely on certain non-GAAP financial measures in making financial and operational decisions about our business. We believe that each of the non-GAAP financial 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. 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.

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 COVID-19 impact on credit and other related charges and the impairment of goodwill and certain intangible assets). 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 common 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.


GREAT WESTERN BANCORP, INC.
Reconciliation of Non-GAAP Measures (Unaudited)

	At and for the six months ended:									At and for the three months ended:
	March 31, 2020			March 31, 2019			March 31, 2020			December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019
	(dollars in thousands except share and per share amounts)
Adjusted net income and adjusted earnings per common share:
Net (loss) income - GAAP	$	(697,344)		$	90,297		$	(740,618)		$	43,274		$	50,285		$	26,783		$	44,511

Add: COVID-19 related impairment of goodwill and certain intangible assets, net of tax	713,013			—			713,013			—			—			—			—
Add: COVID-19 impact on credit and other related charges, net of tax	56,685			—			56,685			—			—			—			—

Adjusted net income	$	72,354		$	90,297		$	29,080		$	43,274		$	50,285		$	26,783		$	44,511

Weighted average diluted common shares outstanding	56,141,816			57,556,984			55,906,002			56,457,967			56,804,172			57,110,103			57,074,674
Earnings per common share - diluted	$	(12.42)		$	1.57		$	(13.25)		$	0.77		$	0.89		$	0.47		$	0.78
Adjusted earnings per common share - diluted	$	1.29		$	1.57		$	0.52		$	0.77		$	0.89		$	0.47		$	0.78

Tangible net income and return on average tangible common equity:
Net (loss) income - GAAP	$	(697,344)		$	90,297		$	(740,618)		$	43,274		$	50,285		$	26,783		$	44,511
Add: Amortization of intangible assets and COVID-19 related impairment of goodwill and certain intangible assets, net of tax	713,817			687			713,440			377			315			335			343
Tangible net income	$	16,473		$	90,984		$	(27,178)		$	43,651		$	50,600		$	27,118		$	44,854

Average common equity	$	1,913,277		$	1,819,996		$	1,918,035		$	1,908,519		$	1,885,785		$	1,864,132		$	1,822,940
Less: Average goodwill and other intangible assets	744,702			746,305			741,257			748,146			745,349			745,718			746,107
Average tangible common equity	$	1,168,575		$	1,073,691		$	1,176,778		$	1,160,373		$	1,140,436		$	1,118,414		$	1,076,833

Return on average common equity *	(72.9)		%	10.0		%	(155.3)		%	9.0		%	10.6		%	5.8		%	9.9		%
Return on average tangible common equity **	2.8		%	17.0		%	(9.3)		%	15.0		%	17.6		%	9.7		%	16.9		%
* 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.

Adjusted net interest income and adjusted net interest margin (fully-tax equivalent basis):
Net interest income - GAAP	$	207,156		$	208,369		$	101,983		$	105,173		$	106,709		$	105,629		$	103,475
Add: Tax equivalent adjustment	3,037			2,932			1,514			1,523			1,487			1,424			1,442
Net interest income (FTE)	210,193			211,301			103,497			106,696			108,196			107,053			104,917
Add: Current realized derivative gain (loss)	(2,140)			426			(1,250)			(890)			(127)			321			405
Adjusted net interest income (FTE)	$	208,053		$	211,727		$	102,247		$	105,806		$	108,069		$	107,374		$	105,322

Average interest-earning assets	$	11,567,032		$	11,216,179		$	11,590,453		$	11,543,610		$	11,609,823		$	11,617,521		$	11,345,559
Net interest margin (FTE) *	3.63		%	3.78		%	3.59		%	3.68		%	3.70		%	3.70		%	3.75		%
Adjusted net interest margin (FTE) **	3.60		%	3.79		%	3.55		%	3.65		%	3.69		%	3.71		%	3.76		%
* 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.


GREAT WESTERN BANCORP, INC.
Reconciliation of Non-GAAP Measures (Unaudited)

	At and for the six months ended:									At and for the three months ended:
	March 31, 2020			March 31, 2019			March 31, 2020			December 31, 2019			September 30, 2019			June 30, 2019			March 31, 2019
	(dollars in thousands except share and per share amounts)
Adjusted interest income and adjusted yield (fully-tax equivalent basis), on non-ASC 310-30 loans:
Interest income - GAAP	$	229,679		$	241,889		$	111,970		$	117,709		$	124,923		$	124,098		$	121,528
Add: Tax equivalent adjustment	3,037			2,932			1,514			1,523			1,487			1,424			1,442
Interest income (FTE)	232,716			244,821			113,484			119,232			126,410			125,522			122,970
Add: Current realized derivative gain (loss)	(2,140)			426			(1,250)			(890)			(127)			321			405
Adjusted interest income (FTE)	$	230,576		$	245,247		$	112,234		$	118,342		$	126,283		$	125,843		$	123,375

Average non-ASC 310-30 loans	$	9,525,157		$	9,525,498		$	9,496,153		$	9,554,161		$	9,693,395		$	9,699,433		$	9,615,096
Yield (FTE) *	4.89		%	5.15		%	4.81		%	4.96		%	5.17		%	5.19		%	5.19		%
Adjusted yield (FTE) **	4.84		%	5.16		%	4.75		%	4.93		%	5.17		%	5.20		%	5.20		%
* 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	$	222,806		$	243,312		$	101,900		$	120,906		$	121,732		$	116,395		$	121,698
Add: Tax equivalent adjustment	3,037			2,932			1,514			1,523			1,487			1,424			1,442
Total revenue (FTE)	$	225,843		$	246,244		$	103,414		$	122,429		$	123,219		$	117,819		$	123,140

Noninterest expense	$	865,383		$	113,686		$	808,453		$	56,930		$	55,212		$	56,000		$	56,580
Less: Amortization of intangible assets and COVID-19 related impairment of goodwill and certain intangible assets	743,206			788			742,779			427			366			385			394
Tangible noninterest expense	$	122,177		$	112,898		$	65,674		$	56,503		$	54,846		$	55,615		$	56,186

Efficiency ratio *	54.1		%	45.8		%	63.5		%	46.2		%	44.5		%	47.2		%	45.6		%
* 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	$	1,153,464		$	1,852,394		$	1,153,464		$	1,920,669		$	1,900,249		$	1,881,128		$	1,852,394
Less: Goodwill and other intangible assets	6,703			745,947			6,703			749,481			745,197			745,563			745,947
Tangible common equity	$	1,146,761		$	1,106,447		$	1,146,761		$	1,171,188		$	1,155,052		$	1,135,565		$	1,106,447

Total assets	$	12,387,808		$	12,830,162		$	12,387,808		$	12,851,665		$	12,788,301		$	12,954,896		$	12,830,162
Less: Goodwill and other intangible assets	6,703			745,947			6,703			749,481			745,197			745,563			745,947
Tangible assets	$	12,381,105		$	12,084,215		$	12,381,105		$	12,102,184		$	12,043,104		$	12,209,333		$	12,084,215

Tangible common equity to tangible assets	9.3		%	9.2		%	9.3		%	9.7		%	9.6		%	9.3		%	9.2		%

Tangible book value per share:
Total stockholders' equity	$	1,153,464		$	1,852,394		$	1,153,464		$	1,920,669		$	1,900,249		$	1,881,128		$	1,852,394
Less: Goodwill and other intangible assets	6,703			745,947			6,703			749,481			745,197			745,563			745,947
Tangible common equity	$	1,146,761		$	1,106,447		$	1,146,761		$	1,171,188		$	1,155,052		$	1,135,565		$	1,106,447

Common shares outstanding	55,013,928			56,938,435			55,013,928			56,382,915			56,283,659			56,939,032			56,938,435
Book value per share - GAAP	$	20.97		$	32.53		$	20.97		$	34.06		$	33.76		$	33.04		$	32.53
Tangible book value per share	$	20.84		$	19.43		$	20.84		$	20.77		$	20.52		$	19.94		$	19.43