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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 10-Q

 


 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2004

 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT

 

For the transition period from              to             

 

Commission File Number: 001-15215

 


 

GREAT WESTERN BANCORPORATION, INC.

(Exact name of registrant as specified in its charter)

 


 

Iowa   42-0867112

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

10834 Old Mill Road, Suite One, Omaha, NE 68154

(Address of principal executive office) (Zip code)

 

(402) 333-8330

(Registrant’s telephone number, including area code)

 


 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for past 90 days.    Yes  x    No  ¨

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

 

Class


 

Outstanding at January 31, 2005


Common Stock, $1.00 par value

  123,650 shares

 



Table of Contents

GREAT WESTERN BANCORPORATION, INC.

INDEX TO FORM 10-Q FOR THE QUARTERLY

PERIOD ENDED DECEMBER 31, 2004

 

                   PAGE

FORWARD-LOOKING STATEMENTS   3
PART I:   

FINANCIAL INFORMATION

   
     ITEM 1:        

FINANCIAL STATEMENTS

   
          Condensed Consolidated Balance Sheets at December 31, 2004 (unaudited) and June 30, 2004   4
          Condensed Consolidated Statements of Income - Three months ended December 31, 2004 and December 31, 2003 (unaudited)   5
          Condensed Consolidated Statements of Income - Six months ended December 31, 2004 and December 31, 2003 (unaudited)   6
          Condensed Consolidated Statements of Cash Flows - Six months ended December 31, 2004 and December 31, 2003 (unaudited)   7
          Notes to Condensed Consolidated Financial Statements   8
     ITEM 2:         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   10
     ITEM 3:         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   14
     ITEM 4:        

CONTROLS AND PROCEDURES

  14
PART II:   

OTHER INFORMATION

   
     ITEM 1:        

LEGAL PROCEEDINGS

  15
     ITEM 2:        

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

  15
     ITEM 3:        

DEFAULTS UPON SENIOR SECURITIES

  15
     ITEM 4:        

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  15
     ITEM 5:        

OTHER INFORMATION

  15
     ITEM 6:        

EXHIBITS

  15
              

SIGNATURES

  16

 

2


Table of Contents

FORWARD-LOOKING STATEMENTS

 

This report includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements can include words such as “may”, “believe”, “will”, “anticipated”, “estimated”, “projected”, “could”, “should”, “plan” or similar expressions. Forward-looking statements are based on management’s current expectations. Factors that might cause future results to differ from management’s expectations include, but are not limited to: fluctuations in interest rates, inflation, the effect of regulatory or government legislative changes, expected cost savings and revenue growth not fully realized, the progress of strategic initiatives and whether realized within expected time frames, general economic conditions, adequacy of allowance for loan losses, costs or difficulties associated with restructuring initiatives, changes in accounting policies or guidelines, changes in the quality or composition of Great Western Bancorporation, Inc. (“Great Western”) loan and investment portfolios, technology changes and competitive pressures in the geographic and business areas where Great Western conducts its operations.

 

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning Great Western and its business, including other factors that could materially affect Great Western’s financial results, is included in Great Western’s filings with the Securities and Exchange Commission.

 

3


Table of Contents

PART I

FINANCIAL INFORMATION

 

ITEM 1: FINANCIAL STATEMENTS

 

GREAT WESTERN BANCORPORATION, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

     December 31,
2004


   

June 30,

2004


 
     (unaudited)        
Assets                 

Cash and due from banks

   $ 57,512     $ 49,768  

Federal funds sold and FHLB overnight deposits

     223       26,642  
    


 


Cash and cash equivalents

     57,735       76,410  

Certificates of deposit

     140       99  

Securities available for sale

     421,593       364,847  

Investment in affiliates

     2,631       3,262  

Loans, net of allowance for loan losses of $25,745 and $22,643

     1,986,087       1,832,215  

Premises and equipment, net

     53,358       47,890  

Accrued interest receivable

     16,417       14,309  

Core deposit intangible and other, net

     3,642       2,897  

Goodwill, net

     53,558       51,847  

Mortgage servicing rights, net

     16,741       14,557  

Other assets

     20,182       21,576  
    


 


Total assets

   $ 2,632,084     $ 2,429,909  
    


 


Liabilities and Stockholders’ Equity                 

Liabilities

                

Deposits

                

Noninterest bearing

   $ 294,732     $ 252,759  

Interest bearing

     1,781,333       1,661,305  
    


 


Total deposits

     2,076,065       1,914,064  

Federal funds purchased and securities sold under agreements to repurchase

     93,873       95,810  

FHLB advances and other borrowings

     159,191       115,355  

Notes payable

     37,037       36,700  

Subordinated debentures

     87,631       108,662  

Accrued interest and other liabilities

     17,601       16,124  
    


 


Total liabilities

     2,471,398       2,286,715  
    


 


Minority interests

     4,346       4,074  
    


 


Stockholders’ equity

                

Preferred stock, $100 par value; authorized 500,000 shares; issued and outstanding: 9,000 shares of 8% cumulative, nonvoting; 8,000 shares of 10% noncumulative, nonvoting; 100,000 shares of variable rate, noncumulative, nonvoting

     11,700       11,700  

Common stock, $1.00 par value, authorized 1,000,000 shares, issued and outstanding 123,802 shares

     124       124  

Additional paid-in capital

     2,032       2,032  

Retained earnings

     143,037       129,106  

Accumulated other comprehensive loss

     (553 )     (3,842 )
    


 


Total stockholders’ equity

     156,340       139,120  
    


 


Total liabilities and stockholders’ equity

   $ 2,632,084     $ 2,429,909  
    


 


 

See Notes to Condensed Consolidated Financial Statements.

 

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GREAT WESTERN BANCORPORATION, INC.

Condensed Consolidated Statements of Income

For The Three Months Ended

(In thousands, except share and per share data)

(unaudited)

 

     December 31,
2004


   

December 31,

2003


Interest and Dividend Income

              

Loans

   $ 31,926     $ 27,227

Taxable securities

     3,274       2,442

Nontaxable securities

     383       421

Dividends on securities

     94       81

Federal funds sold and other

     95       37

Trust common securities

     43       40
    


 

Total interest and dividend income

     35,815       30,248
    


 

Interest Expense

              

Deposits

     8,430       7,136

Federal funds purchased and securities sold under agreements to repurchase

     335       271

FHLB advances and other borrowings

     1,165       976

Notes payable

     541       500

Subordinated debentures

     1,431       1,340
    


 

Total interest expense

     11,902       10,223
    


 

Net Interest Income

     23,913       20,025

Provision for Loan Losses

     1,236       1,332
    


 

Net Interest Income After Provision for Loan Losses

     22,677       18,693
    


 

Noninterest Income

              

Service charges and other fees

     4,363       3,560

Net gain from sale of loans

     973       1,094

Loan servicing fees

     1,100       781

Loss on sale of securities, net

     (6 )     —  

Trust department income

     517       489

Other

     707       922
    


 

Total noninterest income

     7,654       6,846
    


 

Noninterest Expense

              

Salaries and employee benefits

     9,711       8,678

Occupancy expenses, net

     1,269       1,062

Data processing

     1,086       1,021

Equipment expenses

     817       692

Advertising

     1,118       932

Professional fees

     831       751

Communication expense

     570       570

Amortization of core deposit and other intangibles

     414       362

Amortization and valuation adjustments of mortgage servicing rights

     707       710

Other

     1,857       1,822
    


 

Total noninterest expense

     18,380       16,600
    


 

Income Before Income Taxes and Minority Interests

     11,951       8,939

Provision for Income Taxes

     4,238       3,236
    


 

Income Before Minority Interests

     7,713       5,703

Minority Interests

     159       135
    


 

Net Income

   $ 7,554     $ 5,568
    


 

Basic Earnings Per Common Share

   $ 60.71     $ 44.26
    


 

Cash Dividends Per Share Declared on Common Stock

   $ 1.85     $ 1.65
    


 

Weighted Average Shares Outstanding

     123,802       124,952
    


 

See Notes to Condensed Consolidated Financial Statements.

 

5


Table of Contents

GREAT WESTERN BANCORPORATION, INC.

Condensed Consolidated Statements of Income

For The Six Months Ended

(In thousands, except share and per share data)

(unaudited)

 

     December 31,
2004


  

December 31,

2003


Interest and Dividend Income

             

Loans

   $ 61,902    $ 54,377

Taxable securities

     6,213      4,882

Nontaxable securities

     765      864

Dividends on securities

     172      144

Federal funds sold and other

     154      146

Trust common securities

     92      80
    

  

Total interest and dividend income

     69,298      60,493
    

  

Interest Expense

             

Deposits

     16,090      14,779

Federal funds purchased and securities sold under agreements to repurchase

     618      448

FHLB advances and other borrowings

     2,248      1,997

Notes payable

     1,038      1,021

Subordinated debentures

     3,078      2,641
    

  

Total interest expense

     23,072      20,886
    

  

Net Interest Income

     46,226      39,607

Provision for Loan Losses

     2,092      2,287
    

  

Net Interest Income After Provision for Loan Losses

     44,134      37,320
    

  

Noninterest Income

             

Service charges and other fees

     8,716      7,052

Net gain from sale of loans

     1,939      3,686

Loan servicing fees

     2,110      1,525

Gain on sale of securities, net

     14      1,067

Trust department income

     1,013      957

Other

     1,387      1,870
    

  

Total noninterest income

     15,179