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A service for global professionals · Friday, November 22, 2019 · 502,960,355 Articles · 3+ Million Readers

Glacier Bancorp, Inc. Announces results for the Quarter Ended September 30, 2019

/EIN News/ -- 3rd Quarter 2019 Highlights:

  • Net income of $51.6 million for the current quarter, an increase of $2.3 million, or 5 percent, over the prior year third quarter net income of $49.3 million including current period acquisition-related expenses of $2.1 million and $5.4 million of stock compensation expense related to the accelerated vesting of stock options from the Heritage Bancorp acquisition.
  • Including the above acquisition-related expenses, current quarter diluted earnings per share of $0.57, a decrease of 2 percent from the prior year third quarter diluted earnings per share of $0.58. 
  • Net interest margin of 4.42 percent increased 9 basis points compared to 4.33 percent in the prior quarter and increased 16 basis points over the prior year third quarter.
  • Core deposits organically grew $302 million, or 12 percent annualized, during the current quarter, including non-interest bearing deposit growth of $211 million, or 26 percent annualized.
  • Current quarter organic loan growth was $84 million, or 4 percent annualized.
  • Gain on sale of loans of $10.4 million for the current quarter, increased $2.6 million, or 34 percent, compared to the prior quarter and increased $3.1 million, or 43 percent, over the prior year third quarter.
  • Improving credit quality with non-performing assets as a percentage of subsidiary assets decreasing to 0.40 percent in the current quarter compared to 0.41 percent for the prior quarter and 0.61 percent from the prior year third quarter.
  • In early September, the Company implemented a balance sheet strategy which resulted in the reduction of $260 million of high cost fixed-rate borrowings with an effective cost of 3.73 percent.
  • Dividend declared of $0.29 per share, or a 7 percent increase over the prior quarterly dividend of $0.27 per share.  The Company has declared 138 consecutive quarterly dividends and has increased the dividend 45 times.
  • The Company entered Nevada by completing the acquisition of Heritage Bancorp, the parent company of Heritage Bank of Nevada (collectively, "Heritage"), a community bank based in Reno, Nevada, with total assets of $978 million.
  • The Company announced the signing of a definitive agreement to acquire State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona with total assets of $677 million at September 30, 2019 to further grow its Arizona presence.

Year-to-Date 2019 Highlights:

  • Net income of $153 million for the first nine months of 2019, an increase of $20.9 million, or 16 percent, over the first nine months of 2018 net income of $132 million.
  • Diluted earnings per share of $1.76, an increase of 11 percent from the prior year first nine months diluted earnings per share of $1.59.
  • Net interest margin of 4.36 percent for the first nine months of 2019, an increase of 18 basis points from the net interest margin of 4.18 percent for the first nine months of 2018.
  • Core deposits organically grew $412 million, or 6 percent annualized, for the first nine months of 2019, including non-interest bearing deposit growth of $382 million, or 17 percent annualized.
  • Organic loan growth was $393 million, or 6 percent annualized, for the first nine months of 2019.
  • Dividend declared of $0.82 per share, an increase of $0.07 per share, or 9 percent, over the prior year first nine months dividends of $0.75.

Financial Highlights 

  At or for the Three Months ended   At or for the Nine Months ended
(Dollars in thousands, except per share and market data) Sep 30,
2019
  Jun 30,
2019
  Mar 31,
2019
  Sep 30,
2018
  Sep 30,
2019
  Sep 30,
2018
Operating results                      
Net income $ 51,610   52,392   49,132   49,336   153,134   132,279
Basic earnings per share $ 0.57   0.61   0.58   0.58   1.76   1.59
Diluted earnings per share $ 0.57   0.61   0.58   0.58   1.76   1.59
Dividends declared per share $ 0.29   0.27   0.26   0.26   0.82   0.75
Market value per share                      
Closing $ 40.46   40.55   40.07   43.09   40.46   43.09
High $ 42.61   43.44   45.47   46.28   45.47   46.28
Low $ 37.70   38.65   37.58   38.37   37.58   35.77
Selected ratios and other data                        
Number of common stock shares outstanding 92,180,618   86,637,394   84,588,199   84,521,093   92,180,618   84,521,093
Average outstanding shares - basic 90,294,811   85,826,290   84,549,974   84,518,407   86,911,402   83,294,111
Average outstanding shares - diluted 90,449,195   85,858,286   84,614,248   84,593,122   87,082,178   83,362,323
Return on average assets (annualized) 1.55 %    1.69 %    1.67 %    1.66 %    1.63 %    1.57 % 
Return on average equity (annualized) 10.92 %    12.82 %    13.02 %    13.10 %    12.17 %    12.38 % 
Efficiency ratio 65.95 %    54.50 %    55.37 %    52.26 %    58.82 %    55.01 % 
Dividend payout ratio 50.88 %    44.26 %    44.83 %    44.83 %    46.59 %    47.17 % 
Loan to deposit ratio 88.71 %    90.27 %    87.14 %    85.13 %    88.71 %    85.13 % 
Number of full time equivalent employees 2,802   2,703   2,634   2,572   2,802   2,572
Number of locations 182   175   169   164   182   164
Number of ATMs 238   228   222   215   238   215

KALISPELL, Mont., Oct. 17, 2019 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $51.6 million for the current quarter, an increase of $2.3 million, or 5 percent, from the $49.3 million of net income for the prior year third quarter.  Diluted earnings per share for the current quarter was $0.57 per share, a decrease of 2 percent from the prior year third quarter diluted earnings per share of $0.58.  Included in the current quarter was acquisition-related expenses of $2.1 million and $5.4 million of stock compensation expense related to the accelerated vesting of stock options from the Heritage acquisition.  “We are very pleased with the strong results achieved this quarter even with the expense from the acquisition of Heritage and the impact of the Durbin Amendment.  We are especially pleased to see strong deposit growth, good quality loan growth, an expanding core margin and further improving credit performance,” said Randy Chesler, President and Chief Executive Officer.  “The Glacier team once again achieved excellent results as we position the Company to continue to excel over the long haul.  We are also very excited to welcome the Heritage team, one of the top performing community banks in the country.”

The current quarter results include:

  • $2.1 million of acquisition-related expenses and $5.4 million of stock compensation expense related to the accelerated vesting of stock options from the Heritage acquisition.
     
  • As of July 1, 2019, the Company became subject to the Durbin Amendment to the Dodd-Frank Act, which established limits on the amount of interchange fees that can be charged to merchants for debit card processing. The current quarter impact of the Durbin Amendment was a reduction of $5 million, or 57 percent, of the Company's service charge fee income.     
     
  • The Company's regulatory assessment and insurance expense decreased $1.3 million, or 68 percent, from the prior quarter as a result of $1.3 million of Small Bank Assessment credits applied by the FDIC. The Company’s remaining credit of $1.6 million will be applied in future quarters in amounts solely determined by the FDIC.

Net income for the first nine months ended September 30, 2019 was $153 million, an increase of $20.9 million, or 16 percent, from the $132 million of net income for the first nine months of the prior year.  Diluted earnings per share for the first nine months of the current year was $1.76 per share, an increase of $0.17, or 11 percent, from the diluted earnings per share of $1.59 for the same period in the prior year.

In September of 2019, the Company announced the signing of a definitive agreement to acquire State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona (collectively, "SBAZ").  SBAZ provides banking services to individuals and businesses in Arizona with ten banking offices located in Bullhead City, Cottonwood, Kingman, Lake Havasu City, Phoenix, Prescott Valley and Prescott.  As of September 30, 2019, SBAZ had total assets of $677 million, gross loans of $413 million and total deposits of $587 million.  The acquisition is subject to required regulatory approvals and other customary conditions of closing and is expected to be completed in the fourth quarter of 2019 or early in the first quarter of 2020.  Upon closing of the transaction, SBAZ will merge into the Company's Foothills Bank division and will expand the Company's footprint in Arizona.

On July 31, 2019, the Company completed the acquisition of Heritage Bancorp, the bank holding company for Heritage Bank of Nevada, a community bank based in Reno, Nevada (collectively, “Heritage”).  Upon closing of the transaction, Heritage  became the Company’s sixteenth Bank division.

On April 30, 2019, the Company completed the acquisition of FNB Bancorp, the holding company for The First National Bank of Layton, a community bank based in Layton, Utah (“FNB”).  Upon closing of the transaction, FNB became First Community Bank Utah, the Company’s fifteenth Bank division. 

The Company’s results of operations and financial condition include both acquisitions beginning on the acquisition dates and the following table discloses the preliminary fair value estimates of selected classifications of assets and liabilities acquired:

  Heritage   FNB    
(Dollars in thousands) July 31,
2019
  April 30,
2019
  Total
Total assets 977,948   $ 379,155   1,357,103
Debt securities 103,231   47,247   150,478
Loans receivable 615,279   245,485   860,764
Non-interest bearing deposits 296,393   93,647   390,040
Interest bearing deposits 425,827   180,999   606,826
Borrowings   7,273   7,273


Asset Summary

                  $ Change from
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
Cash and cash equivalents $ 406,384     231,209     203,790     307,104     175,175     202,594     99,280  
Debt securities, available-for-sale 2,459,036     2,470,634     2,571,663     2,103,619     (11,598 )   (112,627 )   355,417  
Debt securities, held-to-maturity 234,992     252,097     297,915     590,915     (17,105 )   (62,923 )   (355,923 )
Total debt securities 2,694,028     2,722,731     2,869,578     2,694,534     (28,703 )   (175,550 )   (506 )
Loans receivable                          
Residential real estate 936,877     920,715     887,742     862,830     16,162     49,135     74,047  
Commercial real estate 5,548,174     4,959,863     4,657,561     4,527,577     588,311     890,613     1,020,597  
Other commercial 2,145,257     2,076,605     1,911,171     1,921,955     68,652     234,086     223,302  
Home equity 615,781     596,041     544,688     528,404     19,740     71,093     87,377  
Other consumer 294,999     288,553     286,387     282,479     6,446     8,612     12,520  
Loans receivable 9,541,088     8,841,777     8,287,549     8,123,245     699,311     1,253,539     1,417,843  
Allowance for loan and lease losses (125,535 )   (129,054 )   (131,239 )   (132,535 )   3,519     5,704     7,000  
Loans receivable, net 9,415,553     8,712,723     8,156,310     7,990,710     702,830     1,259,243     1,424,843  
Other assets 1,202,827     1,009,698     885,806     916,754     193,129     317,021     286,073  
Total assets $ 13,718,792     12,676,361     12,115,484     11,909,102     1,042,431     1,603,308     1,809,690  

In early September, the Company implemented a balance sheet strategy to increase its net interest income and net interest margin.  The strategy included early termination of the Company’s $260 million notional pay-fixed interest rate swaps and corresponding debt along with the sale of $308 million of available-for-sale debt securities.  Sale of the investment securities during the quarter resulted in gain of $13.8 million.  Offsetting the gain was a $10.0 million loss recognized on the early termination of the interest rate swaps and a $3.5 million write-off of deferred prepayment penalties on FHLB borrowings.

Total debt securities of $2.694 billion at September 30, 2019 decreased $28.7 million, or 1 percent, during the current quarter and remained stable compared to the prior year third quarter.  Debt securities represented 20 percent of total assets at September 30, 2019 compared to 24 percent of total assets at December 31, 2018 and 23 percent at September 30, 2018.  The level of debt securities will continue to fluctuate as necessary to supplement liquidity needs of the Company. 

The loan portfolio of $9.541 billion increased $84 million, or 4 percent annualized, during the current quarter excluding the Heritage acquisition.  The loan categories with the largest organic increase was commercial real estate loans which increased $39.6 million, or 1 percent and other commercial loans which increased $37.7 million, or 2 percent.  Excluding the FNB and Heritage acquisitions, the loan portfolio increased $557 million, or 7 percent, since September 30, 2018, with the largest increase in commercial real estate loans, which increased $293 million, or 6 percent.

Supplemental information regarding credit quality and identification of the Company’s loan portfolio based on regulatory classification is provided in the exhibits at the end of this press release.  The regulatory classification of loans is based primarily on collateral type while the Company’s loan segments presented herein are based on the purpose of the loan.

Credit Quality Summary

  At or for the Nine
Months ended
  At or for the Six
Months ended
  At or for the
Year ended
  At or for the Nine
Months ended
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
Allowance for loan and lease losses                        
Balance at beginning of period $ 131,239     131,239     129,568     129,568  
Provision for loan losses 57     57     9,953     8,707  
Charge-offs (12,090 )   (6,200 )   (17,807 )   (11,905 )
Recoveries 6,329     3,958     9,525     6,165  
Balance at end of period $ 125,535     129,054     131,239     132,535  
                         
Other real estate owned $ 7,148     7,281     7,480     12,399  
Accruing loans 90 days or more past due 7,912     3,463     2,018     4,333  
Non-accrual loans 40,017     41,195     47,252     55,373  
Total non-performing assets $ 55,077     51,939     56,750     72,105  
                       
Non-performing assets as a percentage of subsidiary assets 0.40 %      0.41 %      0.47 %      0.61 %   
Allowance for loan and lease losses as a percentage of non-performing loans 262 %      289 %      266 %      222 %   
Allowance for loan and lease losses as a percentage of total loans 1.32 %      1.46 %      1.58 %      1.63 %   
Net charge-offs as a percentage of total loans 0.06 %      0.03 %      0.10 %      0.07 %   
Accruing loans 30-89 days past due $ 29,954     37,937     33,567     25,181  
Accruing troubled debt restructurings $ 32,949     25,019     25,833     35,080  
Non-accrual troubled debt restructurings $ 6,723     6,041     10,660     12,911  
U.S. government guarantees included in non-performing assets $ 3,000     2,785     4,811     5,791  

Non-performing assets as a percentage of subsidiary assets at September 30, 2019 was 0.40 percent, a decrease of 1 basis point from the prior quarter, and a decrease of 21 basis points from the prior year third quarter.  Non-performing assets of $55.1 million at September 30, 2019 increased $3.1 million, or 6 percent, over the prior quarter and decreased $17.0 million, or 24 percent, over the prior year third quarter.  The increase in the current quarter non-performing assets was isolated to a $2.7 million loan.  Early stage delinquencies (accruing loans 30-89 days past due) as a percentage of loans at September 30, 2019 was 0.31 percent, which was a decrease of 12 basis points from prior quarter and no change from prior year third quarter.  Early stage delinquencies of $30.0 million at September 30, 2019 decreased $8.0 million from the prior quarter and increased $4.8 million from the prior year third quarter.   The allowance for loan and lease losses (“allowance”) as a percent of total loans outstanding at September 30, 2019 was 1.32 percent, which was a 14 basis points decrease compared to the prior quarter and a decrease of 31 basis points from a year ago.  The decrease was attributable to stabilizing credit quality and the addition of loans from the acquisitions which were added to the portfolio on a fair value basis and as a result did not require an allowance at acquisition date.

Credit Quality Trends and Provision for Loan Losses

(Dollars in thousands) Provision
for Loan
Losses
  Net
Charge-Offs
  ALLL
as a Percent
of Loans
  Accruing
Loans 30-89
Days Past Due
as a Percent of
Loans
  Non-Performing
Assets to
Total Subsidiary
Assets
Third quarter 2019 $   $ 3,519   1.32   %   0.31   %   0.40   %
Second quarter 2019   732   1.46   %   0.43   %   0.41   %
First quarter 2019 57   1,510   1.56   %   0.44   %   0.42   %
Fourth quarter 2018 1,246   2,542   1.58   %   0.41   %   0.47   %
Third quarter 2018 3,194   2,223   1.63   %   0.31   %   0.61   %
Second quarter 2018 4,718   762   1.66   %   0.50   %   0.71   %
First quarter 2018 795   2,755   1.66   %   0.59   %   0.64   %
Fourth quarter 2017 2,886   2,894   1.97   %   0.57   %   0.68   %

Net charge-offs for the current quarter were $3.5 million compared to $732 thousand for the prior quarter and $2.2 million from the same quarter last year.  The increase in net charge-offs were primarily centered in one loan with a $1.9 million loss resulting from a negotiated short-sale. There was no current or prior quarter provision for loan losses compared to $3.2 million in the prior year third quarter.  Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of the loan loss provision. 

Liability Summary

                  $ Change from
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
Deposits                          
Non-interest bearing deposits $ 3,772,766   3,265,077   3,001,178   3,103,112   507,689     771,588     669,654  
NOW and DDA accounts 2,592,483   2,487,806   2,391,307   2,346,050   104,677     201,176     246,433  
Savings accounts 1,472,465   1,412,046   1,346,790   1,345,163   60,419     125,675     127,302  
                                 
Money market deposit accounts 1,940,517   1,647,372   1,684,284   1,722,975   293,145     256,233     217,542  
Certificate accounts 955,765   897,625   901,484   932,461   58,140     54,281     23,304  
Core deposits, total 10,733,996   9,709,926   9,325,043   9,449,761   1,024,070     1,408,953     1,284,235  
Wholesale deposits 134,629   144,949   168,724   151,421   (10,320 )   (34,095 )   (16,792 )
Deposits, total 10,868,625   9,854,875   9,493,767   9,601,182   1,013,750     1,374,858     1,267,443  
Repurchase agreements 558,752   494,651   396,151   408,754   64,101     162,601     149,998  
Federal Home Loan Bank advances 8,707   319,996   440,175   155,328   (311,289 )   (431,468 )   (146,621 )
Other borrowed funds 14,808   14,765   14,708   9,944   43     100     4,864  
Subordinated debentures 139,913   139,912   134,051   134,055   1     5,862     5,858  
Other liabilities 174,586   164,786   120,778   107,227   9,800     53,808     67,359  
Total liabilities $ 11,765,391   10,988,985   10,599,630   10,416,490   776,406     1,165,761     1,348,901  

As a result of the Bank's continued focus on stable and steady low cost deposits, in particular non-interest bearing deposits, the Company experienced a strong quarter in deposit growth.  Excluding the acquisitions, core deposits of $10.734 billion as of September 30, 2019 increased $302 million, or 12 percent annualized, from the prior quarter and increased $287 million, or 3 percent, from the prior year third quarter.  Non-interest bearing deposits organically increased $211 million, or 26 percent annualized, over the prior quarter and increased $280 million, or 9 percent, over the prior year third quarter.  Non-interest bearing deposits were 35 percent of total deposits at the end of the third quarter, an increase of 2 percent from 33 percent at the end of the prior quarter and a 3 percent increase from 32 percent at the end of the prior year third quarter.

During the current quarter, the Company reduced its FHLB advances by $311 million. The Company utilized proceeds from the sale of debt securities and deposit growth to pay down this funding. As of September 30, 2019, the Company had $8.7 million of FHLB advances, and these advances will fluctuate as necessary for balance sheet growth and to supplement liquidity needs of the Company.

Stockholders’ Equity Summary

                  $ Change from
(Dollars in thousands, except per share data)  Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Jun 30,
2019
  Dec 31,
2018
  Sep 30, 
2018
Common equity $ 1,905,306     1,643,928     1,525,281     1,522,329     261,378     380,025     382,977  
Accumulated other comprehensive income (loss)   48,095     43,448     (9,427 )   (29,717 )   4,647     57,522     77,812  
Total stockholders’ equity   1,953,401     1,687,376     1,515,854     1,492,612     266,025     437,547     460,789  
Goodwill and core deposit intangible, net   (522,274 )   (385,533 )   (338,828 )   (340,508 )   (136,741 )   (183,446 )   (181,766 )
Tangible stockholders’ equity $ 1,431,127     1,301,843     1,177,026     1,152,104     129,284     254,101     279,023  
Stockholders’ equity to total assets   14.24 %      13.31 %      12.51 %      12.53 %                     
Tangible stockholders’ equity to total tangible assets   10.84 %      10.59 %      9.99 %      9.96 %                     
Book value per common share $ 21.19     19.48     17.93     17.66     1.71     3.26     3.53  
Tangible book value per common share $ 15.53     15.03     13.93     13.63     0.50     1.60     1.90  

Tangible stockholders’ equity of $1.431 billion at September 30, 2019 increased $129 million, or 10 percent,  compared to the prior quarter which was the result of $229 million of Company stock issued for the acquisition of Heritage and earnings retention, these increases more than offset the increase in goodwill and core deposits associated with the acquisition.  Tangible stockholders’ equity increased $279 million, or 24 percent, over the prior year third quarter which was the result of earnings retention, an increase in other comprehensive income, and the impact from the acquisitions which was offset by a decrease of $25.5 million from the cumulative-effect adjustments related to the adoption of new accounting standards.  Tangible book value per common share of $15.53 at current quarter end increased $0.50 per share from the prior quarter and increased $1.90 per share from a year ago.

Cash Dividends
On September 25, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.29 per share, and increase of $0.02 per share, or 7 percent.  The dividend was payable October 17, 2019 to shareholders of record on October 8, 2019.  The Company has declared 138 consecutive quarterly dividends and has increased the dividend 45 times.  Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations. 


Operating Results for Three Months Ended September 30, 2019 
Compared to June 30, 2019, March 31, 2019, and September 30, 2018

Income Summary

  Three Months ended   $ Change from
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Mar 31,
2019
  Sep 30,
2018
  Jun 30,
2019
  Mar 31,
2019
  Sep 30,
2018
Net interest income                          
Interest income $ 142,395   132,385   126,116   122,905     10,010     16,279     19,490  
Interest expense 10,947   12,089   10,904   9,160     (1,142 )   43     1,787  
Total net interest income 131,448   120,296   115,212   113,745     11,152     16,236     17,703  
Non-interest income                          
Service charges and other fees 15,138   20,025   18,015   19,504     (4,887 )   (2,877 )   (4,366 )
Miscellaneous loan fees and charges 1,775   1,192   967   1,807     583     808     (32 )
Gain on sale of loans 10,369   7,762   5,798   7,256     2,607     4,571     3,113  
Gain (loss) on sale of investments 13,811   134   213   (367 )   13,677     13,598     14,178  
Other income 1,956   1,721   3,481   4,216     235     (1,525 )   (2,260 )
Total non-interest income 43,049   30,834   28,474   32,416     12,215     14,575     10,633  
Total income 174,497   151,130   143,686   146,161     23,367     30,811     28,336  
                               
Net interest margin (tax-equivalent)   4.42 %    4.33 %    4.34 %    4.26 %               

Net Interest Income
The current quarter net interest income of $131 million increased $11.1 million, or 9 percent, over the prior quarter and increased $17.7 million, or 16 percent, from the prior year third quarter.  The increase in net interest income over the prior quarter and prior year third quarter was primarily driven by an increase in interest income on commercial loans.  Interest income on commercial loans increased $9.2 million, or 10 percent, from the prior quarter and increased $16.6 million, or 21 percent, from the prior year third quarter.

The current quarter interest expense of $10.9 million decreased $1.1 million, or 9 percent, over the prior quarter which was driven primarily by the decrease in FHLB advances during the current quarter.  The current quarter interest expense increased $1.8 million, or 20 percent, from the prior year third quarter and was primarily due to the increased amount of deposits, increased rates on deposits and an increase in repurchase agreements.  During the quarter, the total cost of funding (including non-interest bearing deposits) declined 6 basis points to 39 basis points compared to 45 basis points for the prior quarter and 36 basis points for the prior year third quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.42 percent compared to 4.33 percent in the prior quarter.  The core net interest margin, excluding  $736 thousand, or 2 basis points, of discount accretion and $1.5 million, or 5 basis points, of non-accrual interest, was 4.35 percent compared to 4.27 in the prior quarter and 4.18 percent in the prior year third quarter.  The Company experienced an increase in the core net interest margin during the quarter from the reduction of FHLB borrowings, an increase in low cost deposits and the continued shift from lower yielding investments to higher yielding loans.  “The increase in net interest margin reflects the success our Bank divisions had in growing low cost core deposits, particularly non-interest bearing deposits,” said Ron Copher, Chief Financial Officer. “In addition, the balance sheet strategy executed in the third quarter allowed the Company to reduce high cost fixed-rate funding which will continue to have a positive impact on earnings and margin.”              

Non-interest Income
Non-interest income for the current quarter totaled $43.0 million which was an increase of $12.2 million, or 40 percent, over the prior quarter and an increase of $10.6 million, or 33 percent, over the same quarter last year.  Service charges and other fees of $15.1 million for the current quarter decreased $4.9 million, or 24 percent, from the prior quarter and decreased $4.4 million, or 22 percent, from the prior year third quarter due to the Company's decrease in interchange fee as a result of the Durbin Amendment.  Gain on the sale of loans of $10.4 million for the current quarter, increased $2.6 million, or 34 percent, compared to the prior quarter and increased $3.1 million, or 43 percent, over the prior year third quarter as a result of increased purchase and refinance activity.  The Company sold $308 million of securities and recognized gain of $13.8 million, an increase of $13.7 million from the prior quarter.  Other income decreased $2.3 million from the prior year third quarter and was the result of a gain of $2.3 million on the sale of a former branch building in the prior year third quarter.

Non-interest Expense Summary

  Three Months ended   $ Change from
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Mar 31,
2019
  Sep 30,
2018
  Jun 30,
2019
  Mar 31,
2019
  Sep 30,
2018
Compensation and employee benefits $ 62,509   51,973   52,728   49,927   10,536     9,781     12,582  
Occupancy and equipment 8,731   8,180   8,437   7,914   551     294     817  
Advertising and promotions 2,719   2,767   2,388   2,432   (48 )   331     287  
Data processing 4,466   4,062   3,892   3,752   404     574     714  
Other real estate owned 166   191   139   2,674   (25 )   27     (2,508 )
Regulatory assessments and insurance 593   1,848   1,285   1,277   (1,255 )   (692 )   (684 )
Core deposit intangibles amortization 2,360   1,865   1,694   1,735   495     666     625  
Other expenses 29,131   15,284   12,267   13,118   13,847     16,864     16,013  
                                 
Total non-interest expense 110,675   86,170   82,830   82,829   24,505     27,845     27,846  

Total non-interest expense of $111 million for the current quarter increased $24.5 million, or 28 percent, over the prior quarter and increased $27.8 million, or 34 percent, over the prior year third quarter.  Compensation and employee benefits increased by $10.5 million, or 20 percent, from the prior quarter and increased $12.6 million, or 25 percent from the prior year third quarter due to the $5.4 million of stock compensation expense related to the Heritage acquisition and an increased number of employees driven by acquisition and organic growth. Occupancy and equipment expense increased $551 thousand or 7 percent, over the prior quarter and increased $817 thousand, or 10 percent, over the prior year third quarter primarily as a result of the current year acquisitions.  Data processing expense increased $404 thousand or 10 percent, over the prior quarter and increased $714 thousand, or 19 percent, over the prior year third quarter primarily as a result of the current year acquisitions.  Regulatory assessment and insurance decreased $1.3 million, or 68 percent, from the prior quarter as a result of $1.3 million of Small Bank Assessment credits applied by the FDIC during the current quarter.  Other expenses of $29.1 million, increased $13.8 million, or 91 percent, from the prior quarter and was primarily driven by the a $3.5 million loss on the pay down of FHLB debt and a $10.0 million loss on the termination of cash flow hedges.  Acquisition-related expenses were $2.1 million during the current quarter compared to $1.8 million in the prior quarter and $1.3 million in the prior year third quarter.

Federal and State Income Tax Expense
Tax expense during the third quarter of 2019 was $12.2 million, a decrease of $356 thousand, or 3 percent, compared to the prior quarter and an increase of $1.4 million, or 13 percent, from the prior year third quarter.  The effective tax rate in the current and prior quarter was 19 percent which compares to 18 percent in the prior year third quarter.

Efficiency Ratio
The current quarter efficiency ratio was 65.95 percent. Excluding the $10.0 million loss recognized on the termination of the interest rate swaps, the $3.5 million write-off of the deferred prepayment penalties on FHLB advances, and the $5.4 million of accelerated stock compensation expense the efficiency ratio would have been 54.41 percent, which was a decrease of 9 basis points from the prior quarter efficiency ratio of 54.50 percent and an increase of 215 basis points from the prior year third quarter efficiency ratio of 52.26 percent.  The lower efficiency ratio in the prior year third quarter included a gain of $2.3 million recognized on the sale of a former branch building. 


Operating Results for Nine Months Ended September 30, 2019
Compared to September 30, 2018

Income Summary

  Nine Months ended        
(Dollars in thousands) Sep 30,
2019
  Sep 30,
2018
  $ Change   % Change
Net interest income              
Interest income $ 400,896   $ 343,686     $ 57,210     17   %
Interest expense 33,940   26,095     7,845     30   %
Total net interest income 366,956   317,591     49,365     16   %
Non-interest income              
Service charges and other fees 53,178   55,179     (2,001 )   (4 ) %
Miscellaneous loan fees and charges 3,934   5,527     (1,593 )   (29 ) %
Gain on sale of loans 23,929   21,495     2,434     11   %
Gain (loss) on sale of investments 14,158   (756 )   14,914     (1,973 ) %
Other income 7,158   8,885     (1,727 )   (19 ) %
Total non-interest income 102,357   90,330     12,027     13   %
                             
  $ 469,313   $ 407,921     $ 61,392     15   %
                     
Net interest margin (tax-equivalent)   4.36 %      4.18 %           

Net Interest Income
Net interest income for the first nine months of 2019 increased $49.4 million, or 16 percent, from the first nine months of 2018 and was primarily attributable to a $46.9 million increase in interest income from commercial loans.  Interest expense of $33.9 million for the first nine months of 2019 increased $7.8 million, or 30 percent over the prior year same period as a result of increased deposits and borrowings combined with interest rate increases.  The total funding cost (including non-interest bearing deposits) for the first nine months of 2019 was 42 basis points compared to 36 basis points for the first nine months of 2018.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first nine months of 2019 was 4.36 percent, an 18 basis points increase from the net interest margin of 4.18 percent for the first nine months of 2018.  The increase in the margin was principally due to a shift in earning assets to higher yielding loans along with an increase in yields on the loan portfolio combined with relatively stable cost of funds and reduction in higher cost FHLB advances.

Non-interest Income
Non-interest income of $102.4 million for the first nine months of 2019 increased $12.0 million, or 13 percent, over the same period last year which was driven by the sale of debt securities from the balance sheet strategy implemented during the current year.  Service charges and other fees of $53.2 million for 2019 year to date decreased $2.0 million, or 4 percent, from the same period prior year and although there was an increase in fees from increased number of deposit accounts from organic growth and acquisitions, the impact of the Durbin Amendment overshadowed such increases.  Gain on the sale of loans of $23.9 million for the first nine months of 2019, increased $2.4 million, or 11 percent, compared to the prior year as a result of increased purchase and refinance activity.  Other income decreased $1.7 million from the prior year and was the result of a gain of $2.3 million on the sale of a former branch building in the prior year third quarter.

Non-interest Expense Summary

  Nine Months ended        
(Dollars in thousands) Sep 30,
2019
  Sep 30,
2018
  $ Change   % Change
                           
Compensation and employee benefits $ 167,210   $ 144,671   $ 22,539     16   %
Occupancy and equipment 25,348   22,850   2,498     11   %
Advertising and promotions 7,874   7,132   742     10   %
Data processing 12,420   11,960   460     4   %
Other real estate owned 496   2,957   (2,461 )   (83 ) %
Regulatory assessments and insurance 3,726   3,812   (86 )   (2 ) %
Core deposit intangibles amortization 5,919   4,539   1,380     30   %
Other expenses 56,682   40,330   16,352     41   %
Total non-interest expense $ 279,675   $ 238,251   $ 41,424     17   %

Total non-interest expense of $280 million for the first nine months of 2019 increased $41.4 million, or 17 percent, over the prior year same period.  Compensation and employee benefits for the first nine months of 2019 increased $22.5 million, or 16 percent, from the same period last year due to the $5.4 million of stock compensation expense related to the Heritage acquisition, the increased number of employees from acquisitions and organic growth, and annual salary increases. Occupancy and equipment expense for the first nine months of 2019 increased $2.5 million, or 11 percent from the prior year as a result of increased cost from acquisitions and general cost increases.  Other expenses of $56.7 million, increased $16.4 million, or 41 percent, from the prior year and was primarily driven by a $3.5 million write-off of prepayment penalties on FHLB borrowings and a $10.0 million loss recognized on the early termination of the interest rate swaps. 

Provision for Loan Losses
The provision for loan losses was $57 thousand for the first nine months of 2019, a decrease of $8.6 million from the same period in the prior year.  Net charge-offs during the first nine months of 2019 were $5.8 million compared to $5.7 million during the same period in 2018.

Federal and State Income Tax Expense
Tax expense of $36.4 million in the first nine months of 2019 increased $7.8 million, or 27 percent, over the prior year same period.  The effective tax rate year-to-date in 2019 was 19 percent compared to 18 percent in the prior year same period.

Efficiency Ratio
The efficiency ratio was 58.82 percent for the first nine months of 2019.  Excluding the $10.0 million loss recognized on the termination of the interest rate swaps, the $3.5 million write-off of the deferred prepayment penalties on FHLB advances, and the $5.4 million of accelerated stock compensation expense, the efficiency ratio would have been 54.74 percent, which was a 27 basis points improvement from the efficiency ratio of 55.01 percent for the first nine months of 2018.

Forward-Looking Statements
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include, but are not limited to, statements about management’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or words of similar meaning.  These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control.  In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change.  The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations in the forward-looking statements, including those set forth in this news release:

  • the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio;
  • changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System or the Federal Reserve Board, which could adversely affect the Company’s net interest income and profitability;
  • changes in the cost and scope of insurance from the Federal Deposit Insurance Corporation and other third parties;
  • legislative or regulatory changes, including increased banking and consumer protection regulation that adversely affect the Company’s business, both generally and as a result of the Company exceeding $10 billion in total consolidated assets;
  • ability to complete pending or prospective future acquisitions;
  • costs or difficulties related to the completion and integration of acquisitions;
  • the goodwill the Company has recorded in connection with acquisitions could become impaired, which may have an adverse impact on earnings and capital;
  • reduced demand for banking products and services;
  • the reputation of banks and the financial services industry could deteriorate, which could adversely affect the Company's ability to obtain and maintain customers;
  • competition among financial institutions in the Company's markets may increase significantly;
  • the risks presented by continued public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow the Company through acquisitions;
  • the projected business and profitability of an expansion or the opening of a new branch could be lower than expected;
  • consolidation in the financial services industry in the Company’s markets resulting in the creation of larger financial institutions who may have greater resources could change the competitive landscape;
  • dependence on the Chief Executive Officer, the senior management team and the Presidents of Glacier Bank divisions;
  • material failure, potential interruption or breach in security of the Company’s systems and technological changes which could expose us to new risks (e.g., cybersecurity), fraud or system failures;
  • natural disasters, including fires, floods, earthquakes, and other unexpected events;
  • the Company’s success in managing risks involved in the foregoing; and
  • the effects of any reputational damage to the Company resulting from any of the foregoing.

The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

Conference Call Information
A conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, October 18, 2019. The conference call will be accessible by telephone and through the internet. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 8397567. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/ysgi28yh. If you are unable to participate during the live webcast, the call will be archived on our website, www.glacierbancorp.com, or by calling 855-859-2056 with the ID 8397567 by November 1, 2019.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. is the parent company for Glacier Bank, Kalispell and its Bank divisions: Bank of the San Juans (Durango, CO), Citizens Community Bank (Pocatello, ID), Collegiate Peaks Bank (Buena Vista, CO), First Bank of Montana (Lewistown, MT), First Bank (Powell, WY), First Community Bank Utah (Layton, UT), First Security Bank of Bozeman (Bozeman, MT), First Security Bank of Missoula (Missoula, MT), First State Bank (Wheatland, WY), Heritage Bank of Nevada (Reno, NV), Mountain West Bank (Coeur d’Alene, ID), North Cascades Bank (Chelan, WA), The Foothills Bank (Yuma, AZ), Valley Bank of Helena (Helena, MT), and Western Security Bank (Billings, MT).


Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
Assets              
Cash on hand and in banks $ 233,623     181,526     161,782     171,394  
Interest bearing cash deposits 172,761     49,683     42,008     135,710  
Cash and cash equivalents 406,384     231,209     203,790     307,104  
Debt securities, available-for-sale 2,459,036     2,470,634     2,571,663     2,103,619  
Debt securities, held-to-maturity 234,992     252,097     297,915     590,915  
Total debt securities 2,694,028     2,722,731     2,869,578     2,694,534  
Loans held for sale, at fair value 100,441     54,711     33,156     50,649  
Loans receivable 9,541,088     8,841,777     8,287,549     8,123,245  
Allowance for loan and lease losses (125,535 )   (129,054 )   (131,239 )   (132,535 )
Loans receivable, net 9,415,553     8,712,723     8,156,310     7,990,710  
Premises and equipment, net 307,590     296,915     241,528     239,006  
Other real estate owned 7,148     7,281     7,480     12,399  
Accrued interest receivable 63,294     58,567     54,408     62,248  
Deferred tax asset     3,371     23,564     37,264  
Core deposit intangible, net 65,852     54,646     49,242     50,973  
Goodwill 456,422     330,887     289,586     289,535  
Non-marketable equity securities 10,427     23,031     27,871     16,502  
Bank-owned life insurance 108,814     93,543     82,320     81,850  
Other assets 82,839     86,746     76,651     76,328  
Total assets $ 13,718,792     12,676,361     12,115,484     11,909,102  
Liabilities              
Non-interest bearing deposits $ 3,772,766     3,265,077     3,001,178     3,103,112  
Interest bearing deposits 7,095,859     6,589,798     6,492,589     6,498,070  
Securities sold under agreements to repurchase 558,752     494,651     396,151     408,754  
FHLB advances 8,707     319,996     440,175     155,328  
Other borrowed funds 14,808     14,765     14,708     9,944  
Subordinated debentures 139,913     139,912     134,051     134,055  
Accrued interest payable 4,435     5,091     4,252     4,065  
Other liabilities 170,151     159,695     116,526     103,162  
Total liabilities 11,765,391     10,988,985     10,599,630     10,416,490  
Stockholders’ Equity              
Preferred shares, $0.01 par value per share, 1,000,000  shares authorized, none issued or outstanding              
Common stock, $0.01 par value per share, 117,187,500   shares authorized 922     866     845     845  
Paid-in capital 1,375,785     1,139,289     1,051,253     1,050,463  
Retained earnings - substantially restricted 528,599     503,773     473,183     471,021  
Accumulated other comprehensive income (loss) 48,095     43,448     (9,427 )   (29,717 )
Total stockholders’ equity 1,953,401     1,687,376     1,515,854     1,492,612  
Total liabilities and stockholders’ equity $ 13,718,792     12,676,361     12,115,484     11,909,102  
                         



Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Operations

  Three Months ended   Nine Months ended
(Dollars in thousands, except per share data) Sep 30,
2019
  Jun 30,
2019
  Mar 31,
2019
  Sep 30,
2018
  Sep 30,
2019
  Sep 30,
2018
Interest Income                      
Debt securities $ 21,357   21,892   21,351   21,971     64,600   64,483  
Residential real estate loans 12,156   11,410   10,779   10,356     34,345   29,290  
Commercial loans 97,224   88,043   83,539   80,587     268,806   221,926  
Consumer and other loans 11,658   11,040   10,447   9,991     33,145   27,987  
Total interest income 142,395   132,385   126,116   122,905     400,896   343,686  
Interest Expense                      
Deposits 6,214   5,624   5,341   4,837     17,179   13,370  
Securities sold under agreements to repurchase 999   886   802   570     2,687   1,541  
Federal Home Loan Bank advances 2,035   3,847   3,055   2,132     8,937   6,734  
Other borrowed funds 47   38   38   63     123   105  
Subordinated debentures 1,652   1,694   1,668   1,558     5,014   4,345  
Total interest expense 10,947   12,089   10,904   9,160     33,940   26,095  
Net Interest Income 131,448   120,296   115,212   113,745     366,956   317,591  
Provision for loan losses     57   3,194     57   8,707  
Net interest income after provision for loan losses 131,448   120,296   115,155   110,551     366,899   308,884  
Non-Interest Income                      
Service charges and other fees 15,138   20,025   18,015   19,504     53,178   55,179  
Miscellaneous loan fees and charges 1,775   1,192   967   1,807     3,934   5,527  
Gain on sale of loans 10,369   7,762   5,798   7,256     23,929   21,495  
Gain (loss) on sale of debt securities 13,811   134   213   (367 )   14,158   (756 )
Other income 1,956   1,721   3,481   4,216     7,158   8,885  
Total non-interest income 43,049   30,834   28,474   32,416     102,357   90,330  
Non-Interest Expense                      
Compensation and employee benefits 62,509   51,973   52,728   49,927     167,210   144,671  
Occupancy and equipment 8,731   8,180   8,437   7,914     25,348   22,850  
Advertising and promotions 2,719   2,767   2,388   2,432     7,874   7,132  
Data processing 4,466   4,062   3,892   3,752     12,420   11,960  
Other real estate owned 166   191   139   2,674     496   2,957  
Regulatory assessments and insurance 593   1,848   1,285   1,277     3,726   3,812  
Core deposit intangibles amortization 2,360   1,865   1,694   1,735     5,919   4,539  
Other expenses 29,131   15,284   12,267   13,118     56,682   40,330  
Total non-interest expense 110,675   86,170   82,830   82,829     279,675   238,251  
Income Before Income Taxes 63,822   64,960   60,799   60,138     189,581   160,963  
Federal and state income tax expense 12,212   12,568   11,667   10,802     36,447   28,684  
Net Income $ 51,610   52,392   49,132   49,336     153,134   132,279  
                             



Glacier Bancorp, Inc.

Average Balance Sheets

  Three Months ended
  September 30, 2019   June 30, 2019
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 994,906   $ 12,156   4.89 %   $ 938,467   $ 11,410   4.86 %
Commercial loans 1 7,378,337   98,465   5.29 %   6,803,541   89,191   5.26 %
Consumer and other loans 906,148   11,658   5.10 %   868,733   11,040   5.10 %
Total loans 2 9,279,391   122,279   5.23 %   8,610,741   111,641   5.20 %
Tax-exempt debt securities 3 899,914   9,280   4.13 %   957,177   9,982   4.17 %
Taxable debt securities 4 1,917,045   14,250   2.97 %   1,911,173   14,246   2.98 %
Total earning assets 12,096,350   145,809   4.78 %   11,479,091   135,869   4.75 %
Goodwill and intangibles 429,191           351,466        
Non-earning assets 672,550           584,459        
Total assets $ 13,198,091           $ 12,415,016        
Liabilities                      
Non-interest bearing deposits $ 3,513,908   $   %   $ 3,084,404   $   %
NOW and DDA accounts 2,473,375   1,091   0.17 %   2,394,505   985   0.17 %
Savings accounts 1,445,323   270   0.07 %   1,389,548   253   0.07 %
Money market deposit accounts 1,845,184   1,540   0.33 %   1,662,545   1,125   0.27 %
Certificate accounts 929,441   2,412   1.03 %   902,134   2,222   0.99 %
Total core deposits 10,207,231   5,313   0.21 %   9,433,136   4,585   0.19 %
Wholesale deposits 5 146,339   901   2.44 %   162,495   1,039   2.56 %
FHLB advances 222,449   2,035   3.58 %   476,204   3,847   3.20 %
Repurchase agreements and  other borrowed funds 645,426   2,698   1.66 %   593,990   2,618   1.77 %
Total funding liabilities 11,221,445   10,947   0.39 %   10,665,825   12,089   0.45 %
Other liabilities 101,806           109,480        
Total liabilities 11,323,251           10,775,305        
Stockholders’ Equity                      
Common stock 903           860        
Paid-in capital 1,292,182           1,110,138        
Retained earnings 531,181           500,015        
Accumulated other comprehensive income 50,574           28,698        
Total stockholders’ equity 1,874,840           1,639,711        
Total liabilities and stockholders’ equity $ 13,198,091           $ 12,415,016        
Net interest income (tax-equivalent)     $ 134,862           $ 123,780    
Net interest spread (tax-equivalent)         4.39 %           4.30 %
Net interest margin (tax-equivalent)         4.42 %           4.33 %

______________________________
Includes tax effect of $1.2 million and $1.1 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2019 and June 30, 2019, respectively.
Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale.  Non-accrual loans were included in the average volume for the entire period.
Includes tax effect of $1.9 million and $2.0 million on tax-exempt debt securities income for the three months ended September 30, 2019 and June 30, 2019, respectively.
4   Includes tax effect of $275 thousand and $294 thousand on federal income tax credits for the three months ended September 30, 2019 and June 30, 2019, respectively.
5   Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.



Glacier Bancorp, Inc.

Average Balance Sheets (continued)

  Three Months ended
  September 30, 2019   September 30, 2018
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 994,906   $ 12,156   4.89 %   $ 893,972     $ 10,356   4.63 %
Commercial loans 1 7,378,337   98,465   5.29 %   6,361,742     81,636   5.09 %
Consumer and other loans 906,148   11,658   5.10 %   796,558     9,991   4.98 %
Total loans 2 9,279,391   122,279   5.23 %   8,052,272     101,983   5.02 %
Tax-exempt debt securities 3 899,914   9,280   4.13 %   1,074,266     12,389   4.61 %
Taxable debt securities 4 1,917,045   14,250   2.97 %   1,838,949     12,425   2.70 %
Total earning assets 12,096,350   145,809   4.78 %   10,965,487     126,797   4.59 %
Goodwill and intangibles 429,191           341,354          
Non-earning assets 672,550           476,135          
Total assets $ 13,198,091           $ 11,782,976          
Liabilities                      
Non-interest bearing deposits $ 3,513,908   $   %   $ 2,988,562     $   %
NOW and DDA accounts 2,473,375   1,091   0.17 %   2,304,338     997   0.17 %
Savings accounts 1,445,323   270   0.07 %   1,340,003     219   0.06 %
Money market deposit accounts 1,845,184   1,540   0.33 %   1,720,845     881   0.20 %
Certificate accounts 929,441   2,412   1.03 %   942,417     1,728   0.73 %
Total core deposits 10,207,231   5,313   0.21 %   9,296,165     3,825   0.16 %
Wholesale deposits 5 146,339   901   2.44 %   166,009     1,012   2.42 %
FHLB advances 222,449   2,035   3.58 %   209,248     2,132   3.99 %
Repurchase agreements and  other borrowed funds 645,426   2,698   1.66 %   534,384     2,191   1.63 %
Total funding liabilities 11,221,445   10,947   0.39 %   10,205,806     9,160   0.36 %
Other liabilities 101,806           82,621          
Total liabilities 11,323,251           10,288,427          
Stockholders’ Equity                      
Common stock 903           845          
Paid-in capital 1,292,182           1,050,081          
Retained earnings 531,181           467,671          
Accumulated other comprehensive  income (loss) 50,574           (24,048 )        
Total stockholders’ equity 1,874,840           1,494,549          
Total liabilities and stockholders’ equity $ 13,198,091           $ 11,782,976          
Net interest income (tax-equivalent)     $ 134,862           $ 117,637    
Net interest spread (tax-equivalent)         4.39 %           4.23 %
Net interest margin (tax-equivalent)         4.42 %           4.26 %

______________________________
Includes tax effect of $1.2 million and $1.0 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2019 and 2018, respectively.
Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale.  Non-accrual loans were included in the average volume for the entire period.
3   Includes tax effect of $1.9 million and $2.5 million on tax-exempt debt securities income for the three months ended September 30, 2019 and 2018, respectively.
4   Includes tax effect of $275 thousand and $304 thousand on federal income tax credits for the three months ended September 30, 2019 and 2018, respectively.
5   Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.



Glacier Bancorp, Inc.

Average Balance Sheets (continued)

  Nine Months ended
  September 30, 2019   September 30, 2018
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 950,516   $ 34,345   4.82 %   $ 851,280     $ 29,290   4.59 %
Commercial loans 1 6,905,151   272,269   5.27 %   6,026,787     224,944   4.99 %
Consumer and other loans 871,544   33,145   5.08 %   759,437     27,987   4.93 %
Total loans 2 8,727,211   339,759   5.21 %   7,637,504     282,221   4.94 %
Tax-exempt debt securities 3 938,998   29,212   4.15 %   1,084,436     37,818   4.65 %
Taxable debt securities 4 1,891,560   42,225   2.98 %   1,809,047     35,327   2.60 %
Total earning assets 11,557,769   411,196   4.76 %   10,530,987     355,366   4.51 %
Goodwill and intangibles 373,207           301,786          
Non-earning assets 593,011           447,226          
Total assets $ 12,523,987           $ 11,279,999          
Liabilities                      
Non-interest bearing deposits $ 3,182,783   $   %   $ 2,755,702     $   %
NOW and DDA accounts 2,396,828   3,037   0.17 %   2,211,982     2,824   0.17 %
Savings accounts 1,398,539   757   0.07 %   1,282,161     642   0.07 %
Money market deposit accounts 1,733,245   3,675   0.28 %   1,700,216     2,457   0.19 %
Certificate accounts 912,283   6,648   0.97 %   920,222     4,639   0.67 %
Total core deposits 9,623,678   14,117   0.20 %   8,870,283     10,562   0.16 %
Wholesale deposits 5 159,314   3,062   2.57 %   156,298     2,808   2.40 %
FHLB advances 349,998   8,937   3.37 %   241,438     6,734   3.68 %
Repurchase agreements and  other borrowed funds 598,907   7,824   1.75 %   522,267     5,991   1.53 %
Total funding liabilities 10,731,897   33,940   0.42 %   9,790,286     26,095   0.36 %
Other liabilities 109,090           61,272          
Total liabilities 10,840,987           9,851,558          
Stockholders’ Equity                      
Common stock 870           833          
Paid-in capital 1,152,076           1,002,321          
Retained earnings 501,158           444,116          
Accumulated other comprehensive  income (loss) 28,896           (18,829 )        
Total stockholders’ equity 1,683,000           1,428,441          
Total liabilities and stockholders’ equity $ 12,523,987           $ 11,279,999          
Net interest income (tax-equivalent)     $ 377,256           $ 329,271    
Net interest spread (tax-equivalent)         4.34 %           4.15 %
Net interest margin (tax-equivalent)         4.36 %           4.18 %

______________________________
Includes tax effect of $3.5 million and $3.0 million on tax-exempt municipal loan and lease income for the nine months ended September 30, 2019 and 2018, respectively.
Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale.  Non-accrual loans were included in the average volume for the entire period.
Includes tax effect of $6.0 million and $7.7 million on tax-exempt investment securities income for the nine months ended September 30, 2019 and 2018, respectively.
4   Includes tax effect of $863 thousand and $913 thousand on federal income tax credits for the nine months ended September 30, 2019 and 2018, respectively.
5   Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.



Glacier Bancorp, Inc.

Loan Portfolio by Regulatory Classification

  Loans Receivable, by Loan Type   % Change from
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
Custom and owner occupied construction $ 147,626     $ 140,186     $ 126,595     $ 123,369     5   %   17   %   20   %
Pre-sold and spec construction 207,596     171,464     121,938     109,214     21   %   70   %   90   %
Total residential construction 355,222     311,650     248,533     232,583     14   %   43   %   53   %
Land development 103,090     120,052     137,814     125,272     (14 ) %   (25 ) %   (18 ) %
Consumer land or lots 128,668     128,544     127,775     123,979       %   1   %   4   %
Unimproved land 71,467     74,244     83,579     75,183     (4 ) %   (14 ) %   (5 ) %
Developed lots for operative builders 13,782     14,117     17,061     14,922     (2 ) %   (19 ) %   (8 ) %
Commercial lots 64,904     57,447     34,096     30,255     13   %   90   %   115   %
Other construction 443,947     453,782     520,005     487,428     (2 ) %   (15 ) %   (9 ) %
Total land, lot, and other construction 825,858     848,186     920,330     857,039     (3 ) %   (10 ) %   (4 ) %
Owner occupied 1,666,211     1,418,190     1,343,563     1,330,024     17   %   24   %   25   %
Non-owner occupied 2,023,262     1,780,988     1,605,960     1,564,182     14   %   26   %   29   %
Total commercial real estate 3,689,473     3,199,178     2,949,523     2,894,206     15   %   25   %   27   %
Commercial and industrial 1,009,310     1,024,828     907,340     884,414     (2 ) %   11   %   14   %
Agriculture 718,255     697,893     646,822     672,916     3   %   11   %   7   %
1st lien 1,208,096     1,154,221     1,108,227     1,109,308     5   %   9   %   9   %
Junior lien 53,931     53,055     56,689     59,345     2   %   (5 ) %   (9 ) %
Total 1-4 family 1,262,027     1,207,276     1,164,916     1,168,653     5   %   8   %   8   %
Multifamily residential 350,622     278,539     247,457     222,647     26   %   42   %   57   %
Home equity lines of credit 612,775     592,355     539,938     521,778     3   %   13   %   17   %
Other consumer 171,633     167,964     165,865     166,788     2   %   3   %   3   %
Total consumer 784,408     760,319     705,803     688,566     3   %   11   %   14   %
States and political subdivisions 471,599     454,085     404,671     429,409     4   %   17   %   10   %
Other 174,755     114,534     125,310     123,461     53   %   39   %   42   %
Total loans receivable, including  loans held for sale 9,641,529     8,896,488     8,320,705     8,173,894     8   %   16   %   18   %
Less loans held for sale 1 (100,441 )   (54,711 )   (33,156 )   (50,649 )   84   %   203   %   98   %
Total loans receivable $ 9,541,088     $ 8,841,777     $ 8,287,549     $ 8,123,245     8   %   15   %   17   %

______________________________
1 Loans held for sale are primarily 1st lien 1-4 family loans.



Glacier Bancorp, Inc.

Credit Quality Summary by Regulatory Classification

   
Non-performing Assets, by Loan Type
  Non-
Accrual
Loans
  Accruing
Loans 90
Days
or More Past
Due
  Other
Real Estate
Owned
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Sep 30,
2019
  Sep 30,
2019
  Sep 30,
2019
Custom and owner occupied construction $ 283   283     1,599   283    
Pre-sold and spec construction 1,219   1,261   463   474   1,219    
Total residential construction 1,502   1,544   463   2,073   1,502    
Land development 1,006   1,272   2,166   5,147   494     512
Consumer land or lots 828   1,075   1,428   1,592   368     460
Unimproved land 8,781   8,864   9,338   9,815   6,998   486   1,297
Developed lots for operative builders     68   68      
Commercial lots 575   575   1,046   1,046       575
Other construction   241   120   147      
Total land, lot and other construction 11,190   12,027   14,166   17,815   7,860   486   2,844
Owner occupied 8,251   6,998   5,940   11,246   6,141   538   1,572
Non-owner occupied 9,271   7,198   10,567   10,847   6,099   3,172  
Total commercial real estate 17,522   14,196   16,507   22,093   12,240   3,710   1,572
Commercial and industrial 6,135   5,690   3,914   5,615   5,749   172   214
Agriculture 3,469   4,228   7,040   7,856   2,612   707   150
1st lien 9,420   10,211   10,290   9,543   6,104   1,665   1,651
Junior lien 669   592   565   2,610   597     72
Total 1-4 family 10,089   10,803   10,855   12,153   6,701   1,665   1,723
Multifamily residential 206       613   206    
Home equity lines of credit 3,553   2,474   2,770   3,470   2,435   549   569
Other consumer 1,098   597   456   417   412   610   76
Total consumer 4,651   3,071   3,226   3,887   2,847   1,159   645
Other 313   380   579     300   13  
Total $ 55,077   51,939   56,750   72,105   40,017   7,912   7,148
                             



Glacier Bancorp, Inc.

Credit Quality Summary by Regulatory Classification (continued)

  Accruing 30-89 Days Delinquent Loans,  by Loan Type   % Change from
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
Custom and owner occupied construction $ 49   $ 49   $ 1,661   $ 4,502     %   (97 ) %   (99 ) %
Pre-sold and spec construction 8   219   887   494   (96 ) %   (99 ) %   (98 ) %
Total residential construction 57   268   2,548   4,996   (79 ) %   (98 ) %   (99 ) %
Land development 1,282   1,990   228   516   (36 ) %   462   %   148   %
Consumer land or lots 836   206   200   235   306   %   318   %   256   %
Unimproved land 8   658   579   629   (99 ) %   (99 ) %   (99 ) %
Developed lots for operative builders     122     n/m   (100 ) %   n/m
Commercial lots     203     n/m   (100 ) %   n/m
Other construction 142     4,170     n/m   (97 ) %   n/m
Total land, lot and other construction 2,268   2,854   5,502   1,380   (21 ) %   (59 ) %   64   %
Owner occupied 2,949   5,322   2,981   2,872   (45 ) %   (1 ) %   3   %
Non-owner occupied 1,286   11,700   1,245   1,131   (89 ) %   3   %   14   %
Total commercial real estate 4,235   17,022   4,226   4,003   (75 ) %     %   6   %
Commercial and industrial 12,780   3,006   3,374   4,791   325   %   279   %   167   %
Agriculture 1,290   3,125   6,455   1,332   (59 ) %   (80 ) %   (3 ) %
1st lien 2,521   2,776   5,384   3,795   (9 ) %   (53 ) %   (34 ) %
Junior lien 715   1,302   118   420   (45 ) %   506   %   70   %
Total 1-4 family 3,236   4,078   5,502   4,215   (21 ) %   (41 ) %   (23 ) %
Multifamily Residential 149   1,598       (91 ) %   n/m   n/m
Home equity lines of credit 4,162   3,931   3,562   2,467   6   %   17   %   69   %
Other consumer 1,388   1,683   1,650   1,903   (18 ) %   (16 ) %   (27 ) %
Total consumer 5,550   5,614   5,212   4,370   (1 ) %   6   %   27   %
States and political subdivisions     229     n/m   (100 ) %   n/m
Other 389   372   519   94   5   %   (25 ) %   314   %
Total $ 29,954   $ 37,937   $ 33,567   $ 25,181   (21 ) %   (11 ) %   19   %

______________________________
n/m - not measurable



Glacier Bancorp, Inc.

Credit Quality Summary by Regulatory Classification (continued)

  Net Charge-Offs (Recoveries), Year-to-Date
Period Ending, By Loan Type
  Charge-Offs   Recoveries
(Dollars in thousands) Sep 30,
2019
  Jun 30,
2019
  Dec 31,
2018
  Sep 30,
2018
  Sep 30,
2019
  Sep 30,
2019
Pre-sold and spec construction $ (12 )   (6 )   (352 )   (348 )     12
Land development (25 )   15     (116 )   (110 )   42   67
Consumer land or lots (160 )   (2 )   (146 )   (121 )   37   197
Unimproved land (271 )   (54 )   (445 )   (288 )     271
Developed lots for operative builders (18 )   (18 )   33     33       18
Commercial lots (4 )   (3 )   1     3       4
Other construction (142 )   (32 )   (19 )   (4 )   9   151
Total land, lot and other construction (620 )   (94 )   (692 )   (487 )   88   708
Owner occupied (35 )   139     1,320     902     226   261
Non-owner occupied 1,861     7     853     (6 )   1,988   127
Total commercial real estate 1,826     146     2,173     896     2,214   388
Commercial and industrial 1,066     37     2,449     1,893     1,797   731
Agriculture (32 )   (32 )   16     39     67   99
1st lien 189     56     577     8     439   250
Junior lien (254 )   (222 )   (371 )   486     44   298
Total 1-4 family (65 )   (166 )   206     494     483   548
Multifamily residential         (649 )   (6 )    
Home equity lines of credit (25 )   (11 )   (97 )   (39 )   13   38
Other consumer 380     313     261     161     606   226
Total consumer 355     302     164     122     619   264
Other 3,243     2,055     4,967     3,137     6,822   3,579
Total $ 5,761     2,242     8,282     5,740     12,090   6,329


Visit our website at www.glacierbancorp.com


CONTACT: Randall M. Chesler, CEO
(406) 751-4722
Ron J. Copher, CFO
(406) 751-7706

 

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