Great Western Bancorp — Merger or Acquisition (October 2021)
55 slides from Great Western Bancorp's merger presentation, Oct 29, 2021
Slide 1: Investor Presentation October 2021
Investor Presentation October 2021 Exhibit 99.2 Filed by First Interstate BancSystem, Inc. pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Great Western Bancorp, Inc. Commission File No. 001-366
Slide 2: Cautionary Note Regarding Forward-Looking Statements
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Page 2 This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, an
Slide 3: Additional Information about the Transaction and Where to Find It
Additional Information about the Transaction and Where to Find It Page 3 In connection with the Transaction, FIBK will file with the SEC a Registration Statement on Form S-4 to register the shares of FIBK capital stock to be issued in connection with the Transaction. The Registration Statement will
Slide 4: FIBK Overview
FIBK Overview Overview Headquarters Billings, MT Kroll Rating (Subordinated Notes) BBB Total Assets $19.4 Billion Trust Assets Under Management $5.7 Billion Total Deposits $16.0 Billion Description • Headquartered in Billings, MT and focused on regional community banking in Idaho, Montana, Oregon, S
Slide 5: Investment Highlights
Investment Highlights • Experienced leadership team • Strong financial performance • Diversified client base tempers economic volatility • Highly liquid, asset sensitive balance sheet positioned for higher rates • Strong core deposit funding • Conservative credit strategy, limiting exposure to large
Slide 6: Experienced Leadership Team
Name Title Age Industry Experience Years at FIBK Kevin P. Riley President and Chief Executive Officer 62 30+ Years 8 Years Marcy D. Mutch Chief Financial Officer 62 30+ Years 14 Years Russell A. Lee Chief Banking Officer 65 40+ Years 6 Years Jodi Delahunt Hubbell Chief Operating Officer 56 30+ Years
Slide 7: Building the First Interstate Franchise
147 banking offices in 6 states Building the First Interstate Franchise Mr. Homer Scott establishes First Interstate Bank with the purchase of the Bank of Commerce in Sheridan, Wyoming 1968 2014 2015 2019 11 BRANCHES $725 MILLION 2017 46 BRANCHES $3.2 BILLION 2008 2018 20 BRANCHES $814 MILLION2016 7
Slide 8: Attractive Markets
Attractive Markets Page 8 Deposit Market Share and Branch Locations by State Idaho % of Market Deposits 4.3% 17.8% 2.3% 0.2% 0.4% 14.5% Deposit Market Share Rank 8th 2nd 11th 12th 31st 1st Number of Branches 23 45 33 14 18 14 Total Population 1,832,352 1,081,656 4,281,747 894,793 7,765,146 578,413 P
Slide 9: Attractive Markets: Historically Stable Employment
Attractive Markets: Historically Stable Employment Page 9 B est 5 States 1 Nebraska 2.2% 2 Utah 2.6% 3 Idaho 2.9% 4 South Dakota 2.9% 5 New Hampshire 3% Wo rst 5 States 50 Nevada 7.7% 49 California 7.5% 48 New York 7.4% 47 New M exico 7.2% 46 New Jersey 7.2% 0.0% to 3.0% 3.0% to 4.0% 4.0% to 6.0% So
Slide 10: Solid Funding Base
Solid Funding Base First Interstate -BancSystem
Slide 11: Strong Core Deposit Base
Strong Core Deposit Base Page 11 As of September 30, 2021 Overview Total Deposits $16.0 Billion Total Core Deposits* $15.8 Billion Cost of Deposits, incl. Repos (Q3 2021) 5 basis points Demand Non- Interest Bearing 35% Demand Interest Bearing 28% Savings 31% Time, Other 5% Time, $250K and over 1% *C
Slide 12: Source of Deposits
Source of Deposits Allocation of $16.0B of Deposits by State Page 12 *The market share percentages are per the FDIC, not including Credit Union Deposits within each community. As of September 30, 2021 LOCATION MARKET SHARE* JUNE 2021 LOCATION MARKET SHARE* JUNE 2021 Laramie, WY 45% Jackson, WY 13% R
Slide 13: Balance of Consumer and Business Deposits
Balance of Consumer and Business Deposits 57% 57% 55% 53% 51% 50% 50% 43% 43% 45% 47% 49% 50% 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 Total Consumer Deposits Total Business Deposits Page 13 P e rc e n t (% ) As of the applicable period end
Slide 14: Credit Portfolio
Credit Portfolio First Interstate -BancSystem
Slide 15: Diversified Loan Portfolio by Industry
Diversified Loan Portfolio by Industry Loan Mix Commercial Commercial Real Estate & Construction Agriculture RE 3% Commercial RE 40% Residential RE 16% Construction RE 12% Consumer 10% Agriculture 2% Commercial 17% $9.6 Billion in Loans Real Estate and Rental and Leasing 17% Construction 10% Health
Slide 16: Loan Portfolio by State
Loan Portfolio by State Idaho 9% Montana 25% Oregon 17% South Dakota 5% Washington 11% Wyoming 9% Other* 24% Page 16 * “Other” is an aggregation of central lines of business that includes residential mortgages, credit cards, and indirect consumer loans. As of September 30, 2021
Slide 17: Trends in Unfunded Commitments
Trends in Unfunded Commitments Page 17 54.6% 67.1% 39.8% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% Jul '20 Aug '20 Sep '20 Oct '20 Nov '20 Dec '20 Jan '21 Feb '21 Mar '21 Apr '21 May '21 Jun '21 Jul '21 Aug '21 Sep '21 Unfunded as a % of Commitment Revolving and Non-Revolving Lines
Slide 18: Trends in Unfunded Revolving Commitments
Trends in Unfunded Revolving Commitments Page 18 67.1% 32.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Mar 2020 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021 Percentage Used / Unused (Revolving)* Total Unfunded Commitments % Total Funded Commitments % 0 200 400 600 800 1,000 1,200
Slide 19: Indirect Auto: Lending
Indirect Auto: Lending Consumer Indirect Production Indirect Loan Portfolio Page 19 As of September 30, 2021 • Est. Average Life of RV: 45 months • Est. Average Life of Auto: 32 months $ i n M il li o n s 4.91% 4.73% 4.61% 4.26% 4.52% 4.79% 4.80% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 0 50 100 150 200 2
Slide 20: Indirect Auto: Delinquency
Indirect Auto: Delinquency Originations from a credit quality perspective • Approximately 58% of our originations are above a 750 FICO score • Approximately 88% of our originations are above a 700 FICO score • Not participating in the subprime space; less than 0.2% of the portfolio has a score below
Slide 21: Improving Asset Quality
Improving Asset Quality Non-Performing Loans to Loans Held for Investment (LHFI) Non-Performing Assets to Total Assets Non-Performing Assets to LHFI + OREO 0.51% 0.39% 0.49% 0.39% 0.35% 0.29% 0.24% 0.20% 0.19% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020
Slide 22: Criticized and Classified Loans
Criticized and Classified Loans 4.63% 4.34% 4.49% 3.65% 3.74% 3.49% 3.16% 2.78% 2.61% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 2.69% 2.58% 2.80% 2.43% 2.19% 1.96% 1.62% 1.47% 1.58% 0.00% 0.50% 1.00% 1.50
Slide 23: Top Relationships
Top 10 Relationships Page 23 Borrower Industry Outstandings Unfunded Commitments Lessors of Residential Buildings and Dwellings 39,278,908 29,294,096 68,573,005 Other Activities Related to Real Estate 47,955,811 19,419,042 67,374,853 Lessors of Residential Buildings and Dwellings 13,262,329 38,334,0
Slide 24: Current Expected Credit Loss (CECL)
Page 24 Current Expected Credit Loss (CECL)
Slide 25: CECL Results
CECL Results Page 25 • Reviewed and affirmed September 2021 Baseline forecast. • Herd immunity against COVID-19 achieved August 2021 • Fed maintains target rates at 0.00% - 0.25% until early 2023, with asset purchase tapering beginning December 2021 • Inflation risks expected to increase to 3.9% on
Slide 26: Allowance for Credit Loss (ACL) – Funded Allocation by Segment
Allowance for Credit Loss (ACL) – Funded Allocation by Segment Page 26 *Variance between modeled loan outstanding balances and total loans are primarily Paycheck Protection Program (PPP) Loans, New Market Tax Credits and overdrafts. Totals may not sum due to rounding and/or non-disclosed segments. A
Slide 27: Balance Sheet Management
Page 27 Balance Sheet Management
Slide 28: Investment Portfolio
Investment Portfolio Quarterly New Purchases: Average Yield Quarterly New Purchases: Duration A/L Page 28 Portfolio Composition ($6.03 Billion) 1.2% 1.0% 1.3% 1.4% 1.5% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% Q3-21Q2-21Q1-21Q4-20Q3-20 As of September 30, 2021 0% 0% 0% 1% 2% 6% 8% 8% 9% 14% 18%
Slide 29: Attractive Duration Profile
Attractive Duration Profile Page 29 3.48 3.86 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 INVESTMENT DURATION Securities Duration Securities + Fair Value Hedge Duration
Slide 30: Interest Rate Sensitivity
Interest Rate Sensitivity Page 30 NET INTEREST INCOME CHANGE ($) NET INTEREST INCOME CHANGE (%) Basecase assumes static balance sheet as of September 30, 2021, and parallel rate shifts. $575 $544 $512 $480 $447 $407 $387 $300 $350 $400 $450 $500 $550 $600 +400 bps+300 bps+200 bps+100 bpsBase-100 bps
Slide 31: Well Positioned to Benefit from Higher Rates
Well Positioned to Benefit from Higher Rates Page 31 • 15.5% Increase in Core Deposits (Q3-21 vs. Q3-20) • 5 BPS Total Deposit Costs, incl. Repos (Q3 2021) • $2.0B Excess Liquidity (09-30-21) We remain well positioned for the environment as deployment of excess liquidity could provide meaningful ear
Slide 32: Well Positioned to Benefit from Higher Rates: Loan Repricing Gap
Page 32 As of September 30, 2021 LOAN REPRICING GAP SCHEDULE* *Contractual Repricing Benchmarks Well Positioned to Benefit from Higher Rates Fixed 54.3% Adjustable (Excl: 1M Libor) 21.9% Libor 1M 11.5% Variable 12.3% $4,869 $2,762 $1,396 $596 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 <= 1 Yr >1 Y
Slide 33: Current Financial Performance
Page 33 Current Financial Performance
Slide 34: Pre-Provision Net Revenue (PPNR)
Pre-Provision Net Revenue (PPNR) Page 34 1 Net Income Before Tax + Provision Expense. PPNR is a Non-GAAP measurement. See Appendix for Non-GAAP reconciliation. The increase in PPNR during Q3 2021 was due to an increase in non-interest income of $4.4 million, primarily driven by an increase in mortga
Slide 35: Net Interest Margin Analysis: Contribution to Change
Net Interest Margin Analysis: Contribution to Change Page 35 2.82% 2.91% 16 BPS -3 BPS 0 BPS 2 BPS -11 BPS 5 BPS 0 BPS 0 BPS 2.00% 2.20% 2.40% 2.60% 2.80% 3.00% 3.20% Q2-21 Loans Investments Cash Deposits Loans Investments Cash Deposits Q3-21 NET INTEREST MARGIN CONTRIBUTION: BREAKDOWN RATE IMPACT M
Slide 36: Non-Interest Income
Non-Interest Income Payment Services 30.7% Mortgage Banking 29.2% Wealth Management 16.4% Deposit Service Charges 11.1% Other Service Charges and Fees 3.5% Other Income 9.1% 23.8% of Total Revenue Page 36 Quarter Ended September 30, 2021
Slide 37: Payment Services
Payment Services $3.2 $6.3 $2.7 Total: $12.2 Million** Debit Interchange Credit Interchange Other fee income $196.6 $232.8 $239.4 $218.8 $262.3 $270.1 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Credit Card Volumes* Business Consumer **As of Septembe
Slide 38: Mortgage Production
Mortgage Production QUARTERLY PRODUCTION VOLUME Page 38 As of September 30, 2021 M il li o n s 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% $- $100 $200 $300 $400 $500 $600 $700 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Purchase Refinance % Sold to Seconda
Slide 39: Wealth Management
Wealth Management $3,585 $573 $1,322 $257 Total: $5,737 Million Discretionary Non-Discretionary Brokerage Retirement Plan $3,600 $4,100 $4,600 $5,100 $5,600 $6,100 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Assets Under Administration As of June 30, 2021 (in millions) Page 39 $ i n m il li o n s
Slide 40: Growth Strategies and Capital Allocation
Page 40 Growth Strategies and Capital Allocation
Slide 41: Maximizing Shareholder Value
Maximizing Shareholder Value Management’s priority is to deploy capital through: Page 41 Return on Capital Organic Growth M&A Share Repurchases Special Dividend Dividends
Slide 42: We are Delivering Results
Page 42 We are Delivering Results Since the IPO in March 2010, FIBK has delivered a 302% total return to shareholders Source: Bloomberg 301.79 % -100 -50 0 50 100 150 200 250 300 350 400 450 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 P e rc e n t (% ) FIBK: T
Slide 43: Appendix
Appendix FirstInterstate .BancSystem
Slide 44: Non-GAAP Financial Measures
Non-GAAP Financial Measures Page 44 This presentation contains pre-provision net revenue (PPNR) which is a non-GAAP financial measure that management uses to evaluate our performance relative to our targeted capital adequacy standards. PPNR is calculated as net-interest income plus non-interest inco
Slide 45: Non-GAAP Reconciliation
Non-GAAP Reconciliation Page 45
Slide 46: Hospitality: Portfolio Exposure
Hospitality: Portfolio Exposure • 7.8% of total loan portfolio • $22.6 million in unfunded commitments • Hotel (except Casino Hotels) and Motel account for 62.7% of total portfolio Month NAICS Code Description Net Principal Balance Unfunded Commitment Sep 2021 721110Hotels (except Casino Hotels) and
Slide 47: Hospitality: Industry Performance
Hospitality: Industry Performance • $82.5 million in criticized loan categories • $4.2 million in impaired loan categories • $10.4 million or 1.4% in allowance for credit losses • No specific reserves Description Criticized % Criticized Classified % Classified Impaired % Impaired Hotels (except Casi
Slide 48: Hotel Exposure by State
Hotel Exposure by State Page 48 $14.0 $126.1 $141.0 $26.2 $76.5 $88.1 $0.6 $14.0 $127.0 $145.9 $28.4 $76.5 $90.8 $0.6 $0 $20 $40 $60 $80 $100 $120 $140 $160 ID MT OR SD WA WY Other Outstanding Commitment • No hotel loan with a balance greater than $23 Million. • Approximately $86 Million of Hotel Po
Slide 49: Hotel Outstandings by Risk Distribution
Hotel Outstandings by Risk Distribution Page 49 Pass 62%Pass-Watch 24% Special Mention 5% Substandard 9% As of September 30, 2021
Slide 50: Agriculture: Portfolio Exposure
Agriculture: Portfolio Exposure • 4.6% of total loan portfolio • $169.6 million in unfunded commitments • Beef Cattle Ranching/Farming accounting for 41.7% of total portfolio Month NAICS Code Description Net Principal Balance Unfunded Commitment Sep 2021 112111Beef Cattle Ranching and Farming $184,3
Slide 51: Agriculture: Industry Performance
Agriculture: Industry Performance • $49.0 million in criticized loan categories • $7.4 million in impaired loan categories • $3.4 million or 0.8% allowance for credit losses • $0.7 million in specific reserves Description Criticized % Criticized Classified % Classified Impaired % Impaired Beef Cattl
Slide 52: Oil and Gas: Industry Exposure
Oil and Gas: Industry Exposure • $25.0 million in direct exposure (0.3% of total loan portfolio) • $17.8 million in unfunded commitments • $6.1 million in criticized loans category Month NAICS Code Description Net Principal Balance Unfunded Commitment Sep 2021 213112 Support Activities for Oil and G
Slide 53: Oil and Gas: Industry Performance
Oil and Gas: Industry Performance • $2.0 million in impaired loan categories • $0.6 million or 2.2% allowance for credit losses • No specific reserves Description Criticized % Criticized Classified % Classified Impaired % Impaired Support Activities for Oil and Gas Operations $3,933,493 26.0% $1,519
Slide 54: Mall and Retail Trade: Portfolio Exposure
Mall and Retail Trade: Portfolio Exposure • $53.1 million direct exposure to Malls (0.6% of total loan portfolio) o None in criticized loan categories • $31.1 million direct exposure to Retail Trade (0.3% of total loan portfolio) o $1.7 million in criticized loan categories Month NAICS Code Descript
Slide 55: Mall and Retail Trade: Portfolio Performance
Mall and Retail Trade: Portfolio Performance • $1.7 million in criticized loan categories • $0.2 million in impaired loan categories • $0.8 million or 1.0% allowance for credit losses • No specific reserves Description Criticized % Criticized Classified % Classified Impaired % Impaired Sporting Good
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