Great Western Bancorp in Sioux Falls, S.D., plans to record a spike in credit costs during the first quarter as it deals with issues tied to certain commercial loans.
The $9.6 billion-asset company said in a press release Monday that it will likely record $15 million in credit-related charges, or more than double what it had during the fourth quarter.
Great Western said the charges involve "a small number" of commercial-and-industrial loans and about $2 million in charges tied to the liquidation of a property. The company said that the C&I charges "are driven by customer-specific developments and that the loans are not concentrated geographically or within a specific industry."
The company also said in the release that its loan and deposit pipelines are strong, although loan pricing and yields remain under pressure. Meanwhile, the company said that it is making progress with "internal readiness activities" tied to exceeding $10 billion in assets.
"We are aggressively managing our nonperforming assets and remain diligent in addressing credit challenges as they arise," Ken Karels, Great Western's president and chief executive, said in the release. "We remain very well-capitalized and continue to see strong loan demand across our footprint."
