Great Western in S.D. Reports Lower Profit as Fee Income Falls

Great Western Bancorp in Sioux Falls, S.D., reported lower profit in its first quarter since completing its initial public offering.

The $9.6 billion-asset company said in a press release Thursday that its net income fell 7% from a year earlier, to $26.7 million. Earnings 46 cents a share met the average estimate of analysts polled by Bloomberg.

Net interest income rose 4%, to $84.4 million. Total loans increased by 8%, to $7 billion, led by growth in commercial real estate and agriculture. The net interest margin compressed by 7 basis points, to 3.91%. The company recorded a $3.3 million loan-loss provision, compared to an $875,000 reserve release a year earlier.

Noninterest income fell 27%, to $7.9 million. The company recorded a net charge of $7.5 million tied to loans at fair value and the related derivatives used to manage the interest rate risk.

Noninterest expenses declined 2%, to $47.1 million, driven in part by a $2.4 million decline in the amortization of intangible assets.