Jan. 31, 2018

Changes related to federal tax reform contributed to a 21 percent earnings decrease for Great Western Bancorp Inc. in its first quarter of fiscal 2018, but prospects for the year remain strong, its CEO said.

Net income was $29.2 million, or 49 cents per share, compared with $36.9 million, or 63 cents per share, one year ago.

Adjusted net income, which excludes taxes revalued by the Tax Cuts and Jobs Act of 2017, was $42.8 million, or 72 cents per share.

“We are pleased to report a strong underlying financial result for the quarter,” said Ken Karels, chairman, president and CEO.

“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.”

Total loans increased by $196.8 million, an annualized increase of 8.7 percent, while total deposits grew by $46.6 million.

“We are very happy with the strong start to our fiscal year,” Karels said. “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.”

Great Western serves customers at more than 170 branches in nine states.