Glacier Bancorp, Inc. Announces Results for the Quarter Ended December 31, 2019

Published

4th Quarter 2019 Highlights:

  • Net income of $57.4 million for the current quarter, an increase of $7.8 million, or 16 percent, over the prior year fourth quarter net income of $49.6 million.
  • Current quarter diluted earnings per share of $0.62, an increase of 5 percent from the prior year fourth quarter diluted earnings per share of $0.59
  • Net interest margin of 4.45 percent increased 3 basis points compared to 4.42 percent in the prior quarter and increased 15 basis points over the prior year fourth quarter net interest margin of 4.30 percent.
  • Interest bearing deposits increased $65 million, or 4 percent annualized, during the current quarter.
  • Non-performing assets of $37.4 million, decreased $17.7 million, or 32 percent, from the prior quarter non-performing assets of $55.1 million.
  • Declared a special dividend of $0.20 per share.  This was the 16th special dividend the Company has declared.
  • Declared and paid a regular dividend of $0.29 per share.  The Company has declared 139 consecutive quarterly dividends and has increased the dividend 45 times.

Year 2019 Highlights:

  • Net income of $211 million for 2019, an increase of $28.7 million, or 16 percent, over the prior year net income of $182 million.
  • Diluted earnings per share of $2.38, an increase of 10 percent from the prior year diluted earnings per share of $2.17.
  • Net interest margin of 4.39 percent for 2019, an increase of 18 basis points from the net interest margin of 4.21 percent in 2018.
  • Core deposits organically grew $401 million, or 4 percent, during 2019, including non-interest bearing deposit growth of $305 million, or 10 percent.
  • Organic loan growth was $364 million, or 4 percent for 2019.
  • Regular quarterly dividends declared of $1.11 per share, an increase of $0.10 per share, or 10 percent, over the prior year regular quarterly dividends of $1.01.
  • 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 $678 million at December 31, 2019 which will significantly enhance its Arizona franchise.
  • 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 completed the acquisition of FNB Bancorp, the holding company for The First National Bank of Layton (collectively, "FNB"), a community bank based in Layton, Utah, with total assets of $379 million

Financial Highlights 

 At or for the Three Months ended At or for the Year ended
(Dollars in thousands, except per share and market data)Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Dec 31, 2019 Dec 31, 2018
Operating results             
Net income$57,410   51,610   52,392   49,132   49,599   210,544   181,878  
Basic earnings per share$0.62   0.57   0.61   0.58   0.59   2.39   2.18  
Diluted earnings per share$0.62   0.57   0.61   0.58   0.59   2.38   2.17  
Dividends declared per share$0.49   0.29   0.27   0.26   0.56   1.31   1.31  
Market value per share             
Closing$45.99   40.46   40.55   40.07   39.62   45.99   39.62  
High$46.51   42.61   43.44   45.47   47.67   46.51   47.67  
Low$38.99   37.70   38.65   37.58   36.84   37.58   35.77  
Selected ratios and other data             
Number of common stock shares outstanding92,289,750 92,180,618 86,637,394 84,588,199 84,521,692 92,289,750 84,521,692
Average outstanding shares - basic92,243,133 90,294,811 85,826,290 84,549,974 84,521,640 88,255,290 83,603,515
Average outstanding shares - diluted92,365,021 90,449,195 85,858,286 84,614,248 84,610,018 88,385,775 83,677,185
Return on average assets (annualized)1.67 % 1.55 % 1.69 % 1.67 % 1.66 % 1.64 % 1.59 %
Return on average equity (annualized)11.61 % 10.92 % 12.82 % 13.02 % 13.08 % 12.01 % 12.56 %
Efficiency ratio54.90 % 65.95 % 54.50 % 55.37 % 53.93 % 57.78 % 54.73 %
Dividend payout ratio79.03 % 50.88 % 44.26 % 44.83 % 94.92 % 54.81 % 60.09 %
Loan to deposit ratio88.92 % 88.71 % 90.27 % 87.14 % 87.64 % 88.92 % 87.64 %
Number of full time equivalent employees2,826 2,802 2,703 2,634 2,623 2,826 2,623
Number of locations181 182 175 169 167 181 167
Number of ATMs248 238 228 222 216 248 216

______________________________

1 Includes a special dividend declared of $0.20 and $0.30 per share for the three months ended December 31, 2019 and December 31, 2018 and for the years ended December 31, 2019 and 2018.

KALISPELL, Mont., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $57.4 million for the current quarter, an increase of $7.8 million, or 16 percent, from the $49.6 million of net income for the prior year fourth quarter.  Diluted earnings per share for the current quarter was $0.62 per share, an increase of 5 percent from the prior year fourth quarter diluted earnings per share of $0.59.  Included in the current quarter was acquisition-related expenses of $4.4 million and a $1.3 million reduction in regulatory assessment and insurance expense from Small Bank Assessment credits applied by the FDIC.  “These results represent a strong close to a great year.  We are especially pleased to see the substantial improvement in credit this quarter and a business that continues to withstand market headwinds.  The Company's growth and performance for the quarter and the full year was well balanced across all of our key operating metrics,” said Randy Chesler, President and Chief Executive Officer.  “Our Company has grown stronger during 2019, both organically and with the addition of Heritage Bank in Nevada and First Community Bank in Utah.  With this foundation, we believe the Glacier team is set to have another strong year in 2020.”

Net income for 2019 was $211 million, an increase of $28.7 million, or 16 percent, from the $182 million of net income for the prior year.  Diluted earnings per share for the current year was $2.38 per share, an increase of $0.21, or 10 percent, from the diluted earnings per share of $2.17 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 December 31, 2019, SBAZ had total assets of $678 million, gross loans of $439 million and total deposits of $587 million.  The acquisition has received regulatory approvals, is subject to other customary conditions of closing and is expected to be completed 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 to cover all major markets in the state and be a leading community bank 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.  This acquisition also marks the Company's first entrance into the state of Nevada.

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 first division in Utah and the fifteenth Bank division.  In October, the Company combined its four existing Utah-based branches into First Community Bank Utah, enhancing the Company's growth prospects in one of the fastest growing markets in the United States.

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 assets977,944   $379,155   1,357,099  
Debt securities103,231   47,247   150,478  
Loans receivable615,279   245,485   860,764  
Non-interest bearing deposits296,393   93,647   390,040  
Interest bearing deposits425,827   180,999   606,826  
Borrowings—   7,273   7,273  

Asset Summary

       $ Change from
(Dollars in thousands)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Sep 30, 2019 Dec 31, 2018
Cash and cash equivalents$330,961    406,384    203,790    (75,423)  127,171   
Debt securities, available-for-sale2,575,252    2,459,036    2,571,663    116,216    3,589   
Debt securities, held-to-maturity224,611    234,992    297,915    (10,381)  (73,304) 
Total debt securities2,799,863    2,694,028    2,869,578    105,835    (69,715) 
Loans receivable         
Residential real estate926,388    936,877    887,742    (10,489)  38,646   
Commercial real estate5,579,307    5,548,174    4,657,561    31,133    921,746   
Other commercial2,094,254    2,145,257    1,911,171    (51,003)  183,083   
Home equity617,201    615,781    544,688    1,420    72,513   
Other consumer295,660    294,999    286,387    661    9,273   
Loans receivable9,512,810    9,541,088    8,287,549    (28,278)  1,225,261   
Allowance for loan and lease losses(124,490)  (125,535)  (131,239)  1,045    6,749   
Loans receivable, net9,388,320    9,415,553    8,156,310    (27,233)  1,232,010   
Other assets1,164,855    1,202,827    885,806    (37,972)  279,049   
Total assets$13,683,999    13,718,792    12,115,484    (34,793)  1,568,515   

Total debt securities of $2.800 billion at December 31, 2019 increased $106 million, or 4 percent, during the current quarter and decreased $69.7 million, or 2 percent, from the prior year.  Debt securities represented 20 percent of total assets at December 31, 2019 compared to 24 percent of total assets at December 31, 2018.  The level of debt securities will continue to fluctuate as necessary to supplement liquidity needs of the Company. 

The loan portfolio of $9.513 billion decreased $28.3 million, or 30 basis points, during the current quarter primarily as a result of seasonality and a few isolated loan payoffs.  Excluding the FNB and Heritage acquisitions, the loan portfolio increased $364 million, or 4 percent, since December 31, 2018, with the largest increase in commercial real estate loans, which increased $195 million, or 4 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 Year ended At or for the Nine Months ended At or for the Year ended
(Dollars in thousands)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018
Allowance for loan and lease losses     
Balance at beginning of period$131,239   131,239   129,568  
Provision for loan losses57   57   9,953  
Charge-offs(15,178) (12,090) (17,807)
Recoveries8,372   6,329   9,525  
Balance at end of period$124,490   125,535   131,239  
Other real estate owned$5,142   7,148   7,480  
Accruing loans 90 days or more past due1,412   7,912   2,018  
Non-accrual loans30,883   40,017   47,252  
Total non-performing assets$37,437   55,077   56,750  
Non-performing assets as a percentage of subsidiary assets0.27 % 0.40 % 0.47 %
Allowance for loan and lease losses as a percentage of non-performing loans385 % 262 % 266 %
Allowance for loan and lease losses as a percentage of total loans1.31 % 1.32 % 1.58 %
Net charge-offs as a percentage of total loans0.07 % 0.06 % 0.10 %
Accruing loans 30-89 days past due$23,192   29,954   33,567  
Accruing troubled debt restructurings$34,055   32,949   25,833  
Non-accrual troubled debt restructurings$3,346   6,723   10,660  
U.S. government guarantees included in non-performing assets$1,786   3,000   4,811  

The Company experienced another successful quarter in reducing non-performing assets as the Bank divisions continued to focus on resolving outstanding credit issues.  Non-performing assets of $37.4 million at December 31, 2019 decreased $17.6 million, or 32 percent, over the prior quarter and decreased $19.3 million, or 34 percent, over the prior year end.  Non-performing assets as a percentage of subsidiary assets at December 31, 2019 was 0.27 percent, a decrease of 13 basis point from the prior quarter, and a decrease of 20 basis points from the prior year fourth quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $23.2 million at December 31, 2019 decreased $6.8 million from the prior quarter and decreased $10.4 million from the prior year end.  Early stage delinquencies as a percentage of loans at December 31, 2019 was 0.24 percent, which was a decrease of 7 basis points from prior quarter and a 17 basis points decrease from prior year end. 

The allowance for loan and lease losses (“allowance”) as a percent of total loans outstanding at December 31, 2019 was 1.31 percent, which was a 1 basis point decrease compared to the prior quarter and a decrease of 27 basis points from a year ago.  The decrease from prior year end 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
Fourth quarter 2019$—   $1,045   1.31 % 0.24 % 0.27 %
Third quarter 2019—   3,519   1.32 % 0.31 % 0.40 %
Second quarter 2019—   732   1.46 % 0.43 % 0.41 %
First quarter 201957   1,510   1.56 % 0.44 % 0.42 %
Fourth quarter 20181,246   2,542   1.58 % 0.41 % 0.47 %
Third quarter 20183,194   2,223   1.63 % 0.31 % 0.61 %
Second quarter 20184,718   762   1.66 % 0.50 % 0.71 %
First quarter 2018795   2,755   1.66 % 0.59 % 0.64 %

Net charge-offs for the current quarter were $1.0 million compared to $3.5 million for the prior quarter and $2.5 million from the same quarter last year.  There was no current or prior quarter provision for loan losses compared to $1.2 million in the prior year fourth 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)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Sep 30, 2019 Dec 31, 2018
Deposits         
Non-interest bearing deposits$3,696,627   3,772,766   3,001,178   (76,139)  695,449   
NOW and DDA accounts2,645,404   2,592,483   2,391,307   52,921    254,097   
Savings accounts1,485,487   1,472,465   1,346,790   13,022    138,697   
Money market deposit accounts1,937,141   1,940,517   1,684,284   (3,376)  252,857   
Certificate accounts958,501   955,765   901,484   2,736    57,017   
Core deposits, total10,723,160   10,733,996   9,325,043   (10,836)  1,398,117   
Wholesale deposits53,297   134,629   168,724   (81,332)  (115,427) 
Deposits, total10,776,457   10,868,625   9,493,767   (92,168)  1,282,690   
Repurchase agreements569,824   558,752   396,151   11,072    173,673   
Federal Home Loan Bank advances38,611   8,707   440,175   29,904    (401,564) 
Other borrowed funds28,820   14,808   14,708   14,012    14,112   
Subordinated debentures139,914   139,913   134,051      5,863   
Other liabilities169,640   174,586   120,778   (4,946)  48,862   
Total liabilities$11,723,266   11,765,391   10,599,630   (42,125)  1,123,636   

Core deposits of $10.723 billion as of December 31, 2019 decreased $10.8 million or 10 basis points, from the prior quarter with the decrease primarily attributable to the $76 million, or 2 percent, seasonal reduction in non-interest bearing deposits.  Excluding acquisitions, core deposits increased $401 million, or 4 percent, from prior year end with non-interest bearing deposits increasing $305 million, or 10 percent.  Non-interest bearing deposits were 34 percent of total core deposits at current year end, an increase of 2 percent from 32 percent of total core deposits at the prior year end.

Wholesale deposits of $53.3 million at December 31, 2019 decreased $81.3 million from prior quarter and decreased $115 million from the prior year end.  FHLB advances of $38.6 million at December 31, 2019 increased $29.9 million from prior quarter and decreased $402 million from the prior year end.  As a result of the prior quarter's balance sheet strategy, the Company reduced its overall wholesale funding during 2019.  The balance sheet strategy included early termination of the Company's $260 million notional pay-fixed interest rate swaps and corresponding debt.  Wholesale deposits and FHLB advances will continue to 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)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Sep 30, 2019 Dec 31, 2018
Common equity$1,920,507   1,905,306   1,525,281   15,201   395,226  
Accumulated other comprehensive income (loss)40,226   48,095   (9,427) (7,869) 49,653  
Total stockholders’ equity1,960,733   1,953,401   1,515,854   7,332   444,879  
Goodwill and core deposit intangible, net(519,704) (522,274) (338,828) 2,570   (180,876)
Tangible stockholders’ equity$1,441,029   1,431,127   1,177,026   9,902   264,003  
Stockholders’ equity to total assets14.33 % 14.24 % 12.51 %    
Tangible stockholders’ equity to total tangible assets10.95 % 10.84 % 9.99 %    
Book value per common share$21.25   21.19   17.93   0.06   3.32  
Tangible book value per common share$15.61   15.53   13.93   0.08   1.68  

Tangible stockholders’ equity of $1.441 billion at December 31, 2019 increased $9.9 million, or 70 basis points, compared to the prior quarter which was driven by earnings retention.  Tangible stockholders’ equity increased $264 million, or 22 percent, over the prior year end which was primarily the result of earnings retention, an increase in other comprehensive income, and the result of $317 million of Company stock issued for current year acquisitions.  Tangible book value per common share of $15.61 at current quarter end increased $0.08 per share from the prior quarter and increased $1.68 per share from a year ago.

Cash DividendsOn December 30, 2019, the Company’s Board of Directors declared a special cash dividend of $0.20 per share, the 16th special dividend the Company has declared.  The special dividend was payable January 16, 2020 to shareholders of record on January 7, 2020.  On November 13, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.29 per share.  The regular quarterly dividend was payable December 19, 2019 to shareholders of record on December 10, 2019. The Company has declared 139 consecutive quarterly dividends.  Regular quarterly dividends for 2019 were $1.11 per share, an increase of $0.10 per share, or 10 percent, compared to prior year quarterly dividends of $1.01 per share.  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 December 31, 2019 Compared to September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018

Income Summary

 Three Months ended
(Dollars in thousands)Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Net interest income         
Interest income$145,281   142,395   132,385   126,116   125,310  
Interest expense8,833   10,947   12,089   10,904   9,436  
Total net interest income136,448   131,448   120,296   115,212   115,874  
Non-interest income         
Service charges and other fees14,756   15,138   20,025   18,015   19,708  
Miscellaneous loan fees and charges1,379   1,775   1,192   967   1,278  
Gain on sale of loans10,135   10,369   7,762   5,798   5,639  
Gain (loss) on sale of investments257   13,811   134   213   (357)
Other income1,890   1,956   1,721   3,481   2,226  
Total non-interest income28,417   43,049   30,834   28,474   28,494  
Total income$164,865   174,497   151,130   143,686   144,368  
Net interest margin (tax-equivalent)4.45 % 4.42 % 4.33 % 4.34 % 4.30 %
          
   $ Change from
(Dollars in thousands)  Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Net interest income         
Interest income  $2,886   12,896   19,165   19,971  
Interest expense  (2,114) (3,256) (2,071) (603)
Total net interest income  5,000   16,152   21,236   20,574  
Non-interest income         
Service charges and other fees  (382) (5,269) (3,259) (4,952)
Miscellaneous loan fees and charges  (396) 187   412   101  
Gain on sale of loans  (234) 2,373   4,337   4,496  
Gain (loss) on sale of investments  (13,554) 123   44   614  
Other income  (66) 169   (1,591) (336)
Total non-interest income  (14,632) (2,417) (57) (77)
Total income  $(9,632) 13,735   21,179   20,497  

Net Interest IncomeThe current quarter net interest income of $136 million increased $5.0 million, or 4 percent, over the prior quarter and increased $20.6 million, or 18 percent, from the prior year fourth quarter.  The current quarter interest income  of $145 million increased $2.9 million, or 2 percent, over the prior quarter and increased $20.0 million, or 16 percent, over prior year fourth quarter and was primarily driven by an increase in interest income on commercial loans.  Interest income on commercial loans increased $3.1 million, or 3 percent, from the prior quarter and increased $18.1 million, or 22 percent, from the prior year fourth quarter.

The current quarter interest expense of $8.8 million decreased $2.1 million, or 19 percent, over the prior quarter and decreased $603 thousand, or 6 percent, over prior year fourth quarter which was driven by the decrease in higher cost FHLB advances and wholesale deposits.  During the current quarter, the total cost of funding (including non-interest bearing deposits) declined 9 basis points to 30 basis points compared to 39 basis points for the prior quarter and 36 basis points for the prior year fourth quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.45 percent compared to 4.42 percent in the prior quarter.  The core net interest margin, excluding  $2.1 million, or 6 basis points, of discount accretion and $2.0 million, or 6 basis points, of non-accrual interest recoveries, was 4.33 percent compared to 4.35 in the prior quarter and 4.25 percent in the prior year fourth quarter.  The Company experienced a 2 basis points decrease in the core net interest margin during the current quarter from decreased yields on loans and investments that more than offset the decrease in the cost of funding from the reduction of FHLB borrowings.  The core net interest margin increased 8 basis points from the prior year fourth quarter primarily the result of increased yields on the loan portfolio and a decrease in funding cost.  “The stable net margin reflects the full quarter benefits of September's balance sheet strategy to improve net interest income by reducing high cost funding and low yield securities,” said Ron Copher, Chief Financial Officer. “In addition, the average balance of non-interest bearing deposits increased in the current quarter and over the entire year.”              

Non-interest IncomeNon-interest income for the current quarter totaled $28.4 million which was a decrease of $14.6 million, or 34 percent, over the prior quarter and a decrease of $77 thousand, or 27 basis points, over the same quarter last year.  In the prior quarter as part of the balance sheet strategy, the Company sold $308 million of securities and recognized gain of $13.8 million.  Service charges and other fees of $14.8 million for the current quarter decreased $5.0 million, or 25 percent, from the prior year fourth quarter due to the Company's decrease in interchange fees as a result of the Durbin Amendment.  As of July 1, 2019, the Company became subject to the Durbin Amendment which established limits on the amount of interchange fees that can be charged to merchants for debit card processing. Gain on the sale of loans of $10.1 million for the current quarter increased $4.5 million, or 80 percent, compared to the prior year fourth quarter as a result of increased purchase and refinance activity.

Non-interest Expense Summary

 Three Months ended
(Dollars in thousands)Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Compensation and employee benefits$55,543   62,509   51,973   52,728   50,385  
Occupancy and equipment9,149   8,731   8,180   8,437   7,884  
Advertising and promotions2,747   2,719   2,767   2,388   2,434  
Data processing4,972   4,466   4,062   3,892   3,951  
Other real estate owned609   166   191   139   264  
Regulatory assessments and insurance45   593   1,848   1,285   1,263  
Loss on termination of hedging activities—   13,528   —   —   —  
Core deposit intangibles amortization2,566   2,360   1,865   1,694   1,731  
Other expenses19,621   15,603   15,284   12,267   13,964  
Total non-interest expense$95,252   110,675   86,170   82,830   81,876  
          
   $ Change from
(Dollars in thousands)  Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018
Compensation and employee benefits  $(6,966) 3,570   2,815   5,158  
Occupancy and equipment  418   969   712   1,265  
Advertising and promotions  28   (20) 359   313  
Data processing  506   910   1,080   1,021  
Other real estate owned  443   418   470   345  
Regulatory assessments and insurance  (548) (1,803) (1,240) (1,218)
Loss on termination of hedging activities  (13,528) —   —   —  
Core deposit intangibles amortization  206   701   872   835  
Other expenses  4,018   4,337   7,354   5,657  
Total non-interest expense  $(15,423) 9,082   12,422   13,376  

Total non-interest expense of $95.3 million for the current quarter decreased $15.4 million, or 14 percent, over the prior quarter and increased $13.4 million, or 16 percent, over the prior year fourth quarter.  Compensation and employee benefits decreased by $7.0 million, or 11 percent, from the prior quarter primarily due to the $5.4 million of stock compensation expense related to the accelerated vesting of stock options from the Heritage acquisition in the prior quarter.  Compensation and employee benefits increased $5.2 million, or 10 percent, from the prior year fourth quarter due to an increased number of employees driven by acquisition and organic growth.  Occupancy and equipment expense increased $418 thousand, or 5 percent, over the prior quarter and increased $1.3 million, or 16 percent, over the prior year fourth quarter as a result of the current year acquisitions and general cost increases.  Data processing expense increased $506 thousand, or 11 percent, over the prior quarter and increased $1.0 million, or 26 percent, over the prior year fourth quarter primarily as a result of the current year acquisitions.  Regulatory assessment and insurance decreased $1.2 million, or 96 percent, from the prior year fourth quarter primarily as a result of $1.3 million of Small Bank Assessment credits applied by the FDIC during the current quarter.  The prior quarter loss on termination of hedging activities included a $3.5 million write-off of the remaining unamortized deferred prepayment penalties on FHLB advances and a $10.0 million loss on the termination of pay-fixed interest rate swaps with notional amounts totaling $260 million.  Other expenses of $19.6 million, increased $4.0 million, or 26 percent, from the prior quarter and was primarily driven by an increase in acquisition-related expenses.  Other expenses included acquisition-related expenses of $4.4 million in the current quarter compared to $2.1 million in the prior quarter and $520 thousand in the prior year fourth quarter.

Federal and State Income Tax ExpenseTax expense during the fourth quarter of 2019 was $12.2 million, which was stable compared to the prior quarter and an increase of $556 thousand, or 5 percent, from the prior year fourth quarter.  The effective tax rate in the current quarter was 18 percent which compares to 19 percent in the prior quarter and prior year fourth quarter.

Efficiency RatioThe current quarter efficiency ratio was 54.90 percent, a 97 basis points increase from the prior year fourth quarter efficiency ratio of 53.93 as a result of increased operating expenses from acquisitions and the Durbin amendment which outpaced the increase in net interest income.

Operating Results for Year Ended December 31, 2019 Compared to December 31, 2018

Income Summary

 Year ended    
(Dollars in thousands)Dec 31, 2019 Dec 31, 2018 $ Change % Change
Net interest income       
Interest income$546,177   $468,996   $77,181    16 %
Interest expense42,773   35,531   7,242    20 %
Total net interest income503,404   433,465   69,939    16 %
Non-interest income       
Service charges and other fees67,934   74,887   (6,953)  (9)%
Miscellaneous loan fees and charges5,313   6,805   (1,492)  (22)%
Gain on sale of loans34,064   27,134   6,930    26 %
Gain (loss) on sale of investments14,415   (1,113) 15,528    (1,395)%
Other income9,048   11,111   (2,063)  (19)%
Total non-interest income130,774   118,824   11,950    10 %
Total Income$634,178   $552,289   $81,889    15 %
Net interest margin (tax-equivalent)4.39 % 4.21 %    

Net Interest IncomeNet interest income of $503 million for 2019 increased $69.9 million, or 16 percent, from prior year and was primarily attributable to a $64.9 million increase in interest income from commercial loans.  Interest expense of $42.8 million for 2019 increased $7.2 million, or 20 percent over the prior year as a result of an increase in the amount of deposits and interest rate increases on deposits.  The total funding cost (including non-interest bearing deposits) for 2019 was 39 basis points compared to 36 basis points for 2018.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for 2019 was 4.39 percent, an 18 basis points increase from the net interest margin of 4.21 percent for 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 and an increase in non-accrual interest recoveries combined with relatively stable cost of funds and an increase low cost deposits.  The current year included $4.4 million in non-accrual interest recoveries compared to $187 thousand in the prior year.

Non-interest IncomeNon-interest income of $131 million for 2019 increased $12.0 million, or 10 percent, over the 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 $67.9 million for 2019 decreased $7.0 million, or 9 percent, from the prior year.  Excluding the impact from the Durbin Amendment, there was an increase in fees during the current year from the increased number of deposit accounts from organic growth and acquisitions.  Gain on the sale of loans of $34.1 million for 2019, increased $6.9 million, or 26 percent, compared to the prior year as a result of increased purchase and refinance activity.  Other income decreased $2.1 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

 Year ended    
(Dollars in thousands)Dec 31, 2019 Dec 31, 2018 $ Change % Change
Compensation and employee benefits$222,753   $195,056   $27,697    14 %
Occupancy and equipment34,497   30,734   3,763    12 %
Advertising and promotions10,621   9,566   1,055    11 %
Data processing17,392   15,911   1,481    %
Other real estate owned1,105   3,221   (2,116)  (66)%
Regulatory assessments and insurance3,771   5,075   (1,304)  (26)%
Loss on termination of hedging activities13,528   —   13,528    n/m 
Core deposit intangibles amortization8,485   6,270   2,215    35 %
Other expenses62,775   54,294   8,481    16 %
Total non-interest expense$374,927   $320,127   $54,800    17 %

______________________________

n/m - not measurable

Total non-interest expense of $375 million for 2019 increased $54.8 million, or 17 percent, over the prior year.  Compensation and employee benefits for 2019 increased $27.7 million, or 14 percent, from the prior year due to the increased number of employees from acquisitions and organic growth, a $5.4 million of stock compensation expense related to the Heritage acquisition and annual salary increases.  Occupancy and equipment expense for 2019 increased $3.8 million, or 12 percent from the prior year as a result of increased cost from acquisitions and general cost increases.  Data processing expense increased $1.5 million or 9 percent, over the prior year primarily as a result of increased costs from acquisitions.  Regulatory assessment and insurance decreased $1.3 million, or 26 percent, from the prior year and included $2.5 million of Small Bank Assessment credits applied by the FDIC during the current year.  Other expenses of $62.8 million in the current year, increased $8.5 million, or 16 percent, from the prior year and was primarily driven an increase in acquisition-related expenses, increased costs from acquisitions and general cost increases.  Other expenses included acquisition-related expenses of $8.5 million in 2019 compared to $6.6 million in the prior year.

Provision for Loan LossesThe provision for loan losses was $57 thousand for 2019, a decrease of $9.9 million from prior year.  Net charge-offs during the 2019 were $6.8 million compared to $8.3 million during 2018.

Federal and State Income Tax ExpenseTax expense of $48.7 million in 2019 increased $8.3 million, or 21 percent, over the prior year.  The effective tax rate in 2019 was 19 percent compared to 18 percent in the prior year.

Efficiency RatioThe efficiency ratio for the year ended December 31, 2019 was 57.78 percent.  Excluding the $10.0 million loss recognized on the termination of the interest rate swaps, the $3.5 million write-off of the remaining unamortized deferred prepayment penalties on FHLB advances, and the $5.4 million of accelerated stock compensation expense, the efficiency ratio would have been 54.79 percent, which was an increase of 6 basis points from the efficiency ratio of 54.73 percent for 2018.  The increase in the efficiency ratio was driven by the decrease in interchange fees from the Durbin Amendment that outpaced the increase in net interest income.

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, January 24, 2020. 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 9735109. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/eq5tpgz. 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 9735109 by February 7, 2020.

About Glacier Bancorp, Inc.Glacier Bancorp, Inc. is the parent company for Glacier Bank 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 of Wyoming (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), Glacier Bank (Kalispell, MT), 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)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018
Assets     
Cash on hand and in banks$198,639   233,623   161,782  
Interest bearing cash deposits132,322   172,761   42,008  
Cash and cash equivalents330,961   406,384   203,790  
Debt securities, available-for-sale2,575,252   2,459,036   2,571,663  
Debt securities, held-to-maturity224,611   234,992   297,915  
Total debt securities2,799,863   2,694,028   2,869,578  
Loans held for sale, at fair value69,194   100,441   33,156  
Loans receivable9,512,810   9,541,088   8,287,549  
Allowance for loan and lease losses(124,490) (125,535) (131,239)
Loans receivable, net9,388,320   9,415,553   8,156,310  
Premises and equipment, net310,309   307,590   241,528  
Other real estate owned5,142   7,148   7,480  
Accrued interest receivable56,047   63,294   54,408  
Deferred tax asset2,037   —   23,564  
Core deposit intangible, net63,286   65,852   49,242  
Goodwill456,418   456,422   289,586  
Non-marketable equity securities11,623   10,427   27,871  
Bank-owned life insurance109,428   108,814   82,320  
Other assets81,371   82,839   76,651  
Total assets$13,683,999   13,718,792   12,115,484  
Liabilities     
Non-interest bearing deposits$3,696,627   3,772,766   3,001,178  
Interest bearing deposits7,079,830   7,095,859   6,492,589  
Securities sold under agreements to repurchase569,824   558,752   396,151  
FHLB advances38,611   8,707   440,175  
Other borrowed funds28,820   14,808   14,708  
Subordinated debentures139,914   139,913   134,051  
Accrued interest payable4,686   4,435   4,252  
Other liabilities164,954   170,151   116,526  
Total liabilities11,723,266   11,765,391   10,599,630  
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 authorized923   922   845  
Paid-in capital1,378,534   1,375,785   1,051,253  
Retained earnings - substantially restricted541,050   528,599   473,183  
Accumulated other comprehensive income (loss)40,226   48,095   (9,427)
Total stockholders’ equity1,960,733   1,953,401   1,515,854  
Total liabilities and stockholders’ equity$13,683,999   13,718,792   12,115,484  

Glacier Bancorp, Inc.Unaudited Condensed Consolidated Statements of Operations

 Three Months ended Year ended
(Dollars in thousands, except per share data)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Dec 31, 2019 Dec 31, 2018
Interest Income         
Debt securities$20,904   21,357   22,016   85,504   86,499  
Residential real estate loans12,554   12,156   10,751   46,899   40,041  
Commercial loans100,301   97,224   82,238   369,107   304,164  
Consumer and other loans11,522   11,658   10,305   44,667   38,292  
Total interest income145,281   142,395   125,310   546,177   468,996  
Interest Expense         
Deposits6,101   6,214   4,989   23,280   18,359  
Securities sold under agreements to repurchase1,007   999   707   3,694   2,248  
Federal Home Loan Bank advances86   2,035   2,146   9,023   8,880  
Other borrowed funds92   47   (10) 215   95  
Subordinated debentures1,547   1,652   1,604   6,561   5,949  
Total interest expense8,833   10,947   9,436   42,773   35,531  
Net Interest Income136,448   131,448   115,874   503,404   433,465  
Provision for loan losses—   —   1,246   57   9,953  
Net interest income after provision for loan losses136,448   131,448   114,628   503,347   423,512  
Non-Interest Income         
Service charges and other fees14,756   15,138   19,708   67,934   74,887  
Miscellaneous loan fees and charges1,379   1,775   1,278   5,313   6,805  
Gain on sale of loans10,135   10,369   5,639   34,064   27,134  
Gain (loss) on sale of debt securities257   13,811   (357) 14,415   (1,113)
Other income1,890   1,956   2,226   9,048   11,111  
Total non-interest income28,417   43,049   28,494   130,774   118,824  
Non-Interest Expense         
Compensation and employee benefits55,543   62,509   50,385   222,753   195,056  
Occupancy and equipment9,149   8,731   7,884   34,497   30,734  
Advertising and promotions2,747   2,719   2,434   10,621   9,566  
Data processing4,972   4,466   3,951   17,392   15,911  
Other real estate owned609   166   264   1,105   3,221  
Regulatory assessments and insurance45   593   1,263   3,771   5,075  
Loss on termination of hedging activities—   13,528   —   13,528   —  
Core deposit intangibles amortization2,566   2,360   1,731   8,485   6,270  
Other expenses19,621   15,603   13,964   62,775   54,294  
Total non-interest expense95,252   110,675   81,876   374,927   320,127  
Income Before Income Taxes69,613   63,822   61,246   259,194   222,209  
Federal and state income tax expense12,203   12,212   11,647   48,650   40,331  
Net Income$57,410   51,610   49,599   210,544   181,878  

Glacier Bancorp, Inc.Average Balance Sheets

 Three Months ended
 December 31, 2019 September 30, 2019
(Dollars in thousands)Average Balance Interest & Dividends Average Yield/ Rate Average Balance Interest & Dividends Average Yield/ Rate
Assets           
Residential real estate loans$1,010,174   $12,554   4.97 % $994,906   $12,156   4.89 %
Commercial loans 17,617,702   101,619   5.29 % 7,378,337   98,465   5.29 %
Consumer and other loans911,942   11,522   5.01 % 906,148   11,658   5.10 %
Total loans 29,539,818   125,695   5.23 % 9,279,391   122,279   5.23 %
Tax-exempt debt securities 3853,524   8,983   4.21 % 899,914   9,280   4.13 %
Taxable debt securities 42,064,755   14,033   2.72 % 1,917,045   14,250   2.97 %
Total earning assets12,458,097   148,711   4.74 % 12,096,350   145,809   4.78 %
Goodwill and intangibles521,405       429,191      
Non-earning assets667,505       672,550      
Total assets$13,647,007       $13,198,091      
Liabilities           
Non-interest bearing deposits$3,741,622   $—   — % $3,513,908   $—   — %
NOW and DDA accounts2,596,029   1,159   0.18 % 2,473,375   1,091   0.17 %
Savings accounts1,486,387   265   0.07 % 1,445,323   270   0.07 %
Money market deposit accounts1,947,102   1,710   0.35 % 1,845,184   1,540   0.33 %
Certificate accounts958,133   2,609   1.08 % 929,441   2,412   1.03 %
Total core deposits10,729,273   5,743   0.21 % 10,207,231   5,313   0.21 %
Wholesale deposits 572,539   358   1.96 % 146,339   901   2.44 %
FHLB advances15,601   86   2.18 % 222,449   2,035   3.58 %
Repurchase agreements and  other borrowed funds703,391   2,646   1.49 % 645,426   2,698   1.66 %
Total funding liabilities11,520,804   8,833   0.30 % 11,221,445   10,947   0.39 %
Other liabilities164,285       101,806      
Total liabilities11,685,089       11,323,251      
Stockholders’ Equity           
Common stock922       903      
Paid-in capital1,377,013       1,292,182      
Retained earnings538,620       531,181      
Accumulated other comprehensive income45,363       50,574      
Total stockholders’ equity1,961,918       1,874,840      
Total liabilities and stockholders’ equity$13,647,007       $13,198,091      
Net interest income (tax-equivalent)  $139,878       $134,862    
Net interest spread (tax-equivalent)    4.44 %     4.39 %
Net interest margin (tax-equivalent)    4.45 %     4.42 %

______________________________

1 Includes tax effect of $1.3 million and $1.2 million on tax-exempt municipal loan and lease income for the three months ended December 31, 2019 and September 30, 2019, respectively.2 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 $1.8 million and $1.9 million on tax-exempt debt securities income for the three months ended December 31, 2019 and September 30, 2019, respectively.4 Includes tax effect of $276 thousand and $275 thousand on federal income tax credits for the three months ended December 31, 2019 and September 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
 December 31, 2019 December 31, 2018
(Dollars in thousands)Average Balance Interest & Dividends Average Yield/ Rate Average Balance Interest & Dividends Average Yield/ Rate
Assets           
Residential real estate loans$1,010,174   $12,554   4.97 % $919,468   $10,751   4.68 %
Commercial loans 17,617,702   101,619   5.29 % 6,452,215   83,319   5.12 %
Consumer and other loans911,942   11,522   5.01 % 820,439   10,305   4.98 %
Total loans 29,539,818   125,695   5.23 % 8,192,122   104,375   5.05 %
Tax-exempt debt securities 3853,524   8,983   4.21 % 1,082,702   12,421   4.59 %
Taxable debt securities 42,064,755   14,033   2.72 % 1,783,881   12,444   2.79 %
Total earning assets12,458,097   148,711   4.74 % 11,058,705   129,240   4.64 %
Goodwill and intangibles521,405       339,617      
Non-earning assets667,505       471,696      
Total assets$13,647,007       $11,870,018      
Liabilities           
Non-interest bearing deposits$3,741,622   $—   — % $3,050,140   $—   — %
NOW and DDA accounts2,596,029   1,159   0.18 % 2,334,785   1,038   0.18 %
Savings accounts1,486,387   265   0.07 % 1,348,907   220   0.06 %
Money market deposit accounts1,947,102   1,710   0.35 % 1,716,296   920   0.21 %
Certificate accounts958,133   2,609   1.08 % 916,786   1,858   0.80 %
Total core deposits10,729,273   5,743   0.21 % 9,366,914   4,036   0.17 %
Wholesale deposits 572,539   358   1.96 % 155,203   953   2.44 %
FHLB advances15,601   86   2.18 % 200,654   2,146   4.18 %
Repurchase agreements and  other borrowed funds703,391   2,646   1.49 % 539,548   2,301   1.69 %
Total funding liabilities11,520,804   8,833   0.30 % 10,262,319   9,436   0.36 %
Other liabilities164,285       103,441      
Total liabilities11,685,089       10,365,760      
Stockholders’ Equity           
Common stock922       845      
Paid-in capital1,377,013       1,050,872      
Retained earnings538,620       479,347      
Accumulated other comprehensive  income (loss)45,363       (26,806)    
Total stockholders’ equity1,961,918       1,504,258      
Total liabilities and stockholders’ equity$13,647,007       $11,870,018      
Net interest income (tax-equivalent)  $139,878       $119,804    
Net interest spread (tax-equivalent)    4.44 %     4.28 %
Net interest margin (tax-equivalent)    4.45 %     4.30 %

______________________________

1 Includes tax effect of $1.3 million and $1.1 million on tax-exempt municipal loan and lease income for the three months ended December 31, 2019 and 2018, respectively.2 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 $1.8 million and $2.5 million on tax-exempt debt securities income for the three months ended December 31, 2019 and 2018, respectively.4 Includes tax effect of $276 thousand and $304 thousand on federal income tax credits for the three months ended December 31, 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)

 Year ended
 December 31, 2019 December 31, 2018
(Dollars in thousands)Average Balance Interest & Dividends Average Yield/ Rate Average Balance Interest & Dividends Average Yield/ Rate
Assets           
Residential real estate loans$965,553   $46,899   4.86 % $868,467   $40,041   4.61 %
Commercial loans 17,084,753   373,888   5.28 % 6,134,018   308,263   5.03 %
Consumer and other loans881,726   44,667   5.07 % 774,813   38,292   4.94 %
Total loans 28,932,032   465,454   5.21 % 7,777,298   386,596   4.97 %
Tax-exempt debt securities 3917,454   38,195   4.16 % 1,083,999   50,239   4.63 %
Taxable debt securities 41,935,215   56,258   2.91 % 1,802,704   47,771   2.65 %
Total earning assets11,784,701   559,907   4.75 % 10,664,001   484,606   4.54 %
Goodwill and intangibles410,561       311,321      
Non-earning assets611,788       453,394      
Total assets$12,807,050       $11,428,716      
Liabilities           
Non-interest bearing deposits$3,323,641   $—   — % $2,829,916   $—   — %
NOW and DDA accounts2,447,037   4,196   0.17 % 2,242,935   3,862   0.17 %
Savings accounts1,420,682   1,022   0.07 % 1,298,985   862   0.07 %
Money market deposit accounts1,787,149   5,385   0.30 % 1,704,269   3,377   0.20 %
Certificate accounts923,840   9,257   1.00 % 919,356   6,497   0.71 %
Total core deposits9,902,349   19,860   0.20 % 8,995,461   14,598   0.16 %
Wholesale deposits 5137,442   3,420   2.49 % 156,022   3,761   2.41 %
FHLB advances265,712   9,023   3.35 % 231,158   8,880   3.79 %
Repurchase agreements and  other borrowed funds625,242   10,470   1.67 % 526,623   8,292   1.57 %
Total funding liabilities10,930,745   42,773   0.39 % 9,909,264   35,531   0.36 %
Other liabilities123,002       71,901      
Total liabilities11,053,747       9,981,165      
Stockholders’ Equity           
Common stock883       836      
Paid-in capital1,208,772       1,014,559      
Retained earnings510,601       452,996      
Accumulated other comprehensive  income (loss)33,047       (20,840)    
Total stockholders’ equity1,753,303       1,447,551      
Total liabilities and stockholders’ equity$12,807,050       $11,428,716      
Net interest income (tax-equivalent)  $517,134       $449,075    
Net interest spread (tax-equivalent)    4.36 %     4.18 %
Net interest margin (tax-equivalent)    4.39 %     4.21 %

______________________________

1 Includes tax effect of $4.8 million and $4.1 million on tax-exempt municipal loan and lease income for the year ended December 31, 2019 and 2018, respectively.2 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 $7.8 million and $10.3 million on tax-exempt investment securities income for the year ended December 31, 2019 and 2018, respectively.4 Includes tax effect of $1.1 million and $1.2 million on federal income tax credits for the year ended December 31, 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)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Sep 30, 2019 Dec 31, 2018
Custom and owner occupied construction$143,479    $147,626    $126,595    (3)% 13 
Pre-sold and spec construction180,539    207,596    121,938    (13)% 48 
Total residential construction324,018    355,222    248,533    (9)% 30 
Land development101,592    103,090    137,814    (1)% (26)%
Consumer land or lots125,759    128,668    127,775    (2)% (2)%
Unimproved land62,563    71,467    83,579    (12)% (25)%
Developed lots for operative builders17,390    13,782    17,061    26 % 
Commercial lots46,408    64,904    34,096    (28)% 36 
Other construction478,368    443,947    520,005     (8)%
Total land, lot, and other construction832,080    825,858    920,330     (10)%
Owner occupied1,667,526    1,666,211    1,343,563    —  24 
Non-owner occupied2,017,375    2,023,262    1,605,960    —  26 
Total commercial real estate3,684,901    3,689,473    2,949,523    —  25 
Commercial and industrial991,580    1,009,310    907,340    (2)% 
Agriculture701,363    718,255    646,822    (2)% 
1st lien1,186,889    1,208,096    1,108,227    (2)% 
Junior lien53,571    53,931    56,689    (1)% (6)%
Total 1-4 family1,240,460    1,262,027    1,164,916    (2)% 
Multifamily residential342,498    350,622    247,457    (2)% 38 
Home equity lines of credit617,900    612,775    539,938     14 
Other consumer174,643    171,633    165,865     
Total consumer792,543    784,408    705,803    1  12 % 
States and political subdivisions533,023    471,599    404,671    13  32 
Other139,538    174,755    125,310    (20)% 11 
Total loans receivable, including loans held for sale9,582,004    9,641,529    8,320,705    (1)% 15 
Less loans held for sale 1(69,194 )  (100,441 )  (33,156 )  (31)% 109 %
Total loans receivable$9,512,810    $9,541,088    $8,287,549    —  15 %

______________________________

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)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Dec 31, 2019 Dec 31, 2019 Dec 31, 2019
Custom and owner occupied construction$185   283   —   185   —   —  
Pre-sold and spec construction743   1,219   463   743   —   —  
Total residential construction928   1,502   463   928   —   —  
Land development852   1,006   2,166   474   —   378  
Consumer land or lots330   828   1,428   330   —   —  
Unimproved land1,181   8,781   9,338   105   —   1,076  
Developed lots for operative builders—   —   68   —   —   —  
Commercial lots529   575   1,046   —   —   529  
Other construction—   —   120   —   —   —  
Total land, lot and other construction2,892   11,190   14,166   909   —   1,983  
Owner occupied4,608   8,251   5,940   3,320   41   1,247  
Non-owner occupied8,229   9,271   10,567   8,229   —   —  
Total commercial real estate12,837   17,522   16,507   11,549   41   1,247  
Commercial and industrial5,297   6,135   3,914   4,945   142   210  
Agriculture2,288   3,469   7,040   2,137     150  
1st lien8,671   9,420   10,290   6,414   753   1,504  
Junior lien569   669   565   546   23   —  
Total 1-4 family9,240   10,089   10,855   6,960   776   1,504  
Multifamily residential201   206   —   201   —   —  
Home equity lines of credit2,618   3,553   2,770   2,618   —   —  
Other consumer837   1,098   456   344   445   48  
Total consumer3,455   4,651   3,226   2,962   445   48  
Other299   313   579   292     —  
Total$37,437   55,077   56,750   30,883   1,412   5,142  

Glacier Bancorp, Inc.Credit Quality Summary by Regulatory Classification (continued)

 Accruing 30-89 Days Delinquent Loans,  by Loan Type % Change from
(Dollars in thousands)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Sep 30, 2019 Dec 31, 2018
Custom and owner occupied construction$637   $49   $1,661   1,200 % (62)%
Pre-sold and spec construction148     887   1,750 % (83)%
Total residential construction785   57   2,548   1,277 % (69)%
Land development—   1,282   228   (100)% (100)%
Consumer land or lots672   836   200   (20)% 236 
Unimproved land558     579   6,875 % (4)%
Developed lots for operative builders  —   122   n/m  (98)%
Commercial lots—   —   203   n/m  (100)%
Other construction—   142   4,170   (100)% (100)%
Total land, lot and other construction1,232   2,268   5,502   (46)% (78)%
Owner occupied3,052   2,949   2,981    %
Non-owner occupied1,834   1,286   1,245   43  47 %
Total commercial real estate4,886   4,235   4,226   15  16 %
Commercial and industrial2,036   12,780   3,374   (84)% (40)%
Agriculture4,298   1,290   6,455   233  (33)%
1st lien4,711   2,521   5,384   87  (13)%
Junior lien624   715   118   (13)% 429 
Total 1-4 family5,335   3,236   5,502   65  (3)%
Multifamily Residential—   149   —   (100)% n/m 
Home equity lines of credit2,352   4,162   3,562   (43)% (34)%
Other consumer1,187   1,388   1,650   (14)% (28)%
Total consumer3,539   5,550   5,212   (36)% (32)%
States and political subdivisions—   —   229   n/m  (100)%
Other1,081   389   519   178 % 108 %
Total$23,192   $29,954   $33,567   (23)% (31)%

______________________________

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)Dec 31, 2019 Sep 30, 2019 Dec 31, 2018 Dec 31, 2019 Dec 31, 2019
Custom and owner occupied construction$98   —   —   98   —  
Pre-sold and spec construction$(18) (12) (352) —   18  
Total residential construction80   (12) (352) 98   18  
Land development(30) (25) (116) 42   72  
Consumer land or lots(138) (160) (146) 64   202  
Unimproved land(311) (271) (445) —   311  
Developed lots for operative builders(18) (18) 33   —   18  
Commercial lots(6) (4)   —    
Other construction(142) (142) (19)   151  
Total land, lot and other construction(645) (620) (692) 115   760  
Owner occupied(479) (35) 1,320   362   841  
Non-owner occupied2,015   1,861   853   2,156   141  
Total commercial real estate1,536   1,826   2,173   2,518   982  
Commercial and industrial1,472   1,066   2,449   2,385   913  
Agriculture21   (32) 16   119   98  
1st lien(12) 189   577   477   489  
Junior lien(303) (254) (371) 61   364  
Total 1-4 family(315) (65) 206   538   853  
Multifamily residential—   —   (649) —   —  
Home equity lines of credit19   (25) (97) 73   54  
Other consumer603   380   261   895   292  
Total consumer622   355   164   968   346  
Other4,035   3,243   4,967   8,437   4,402  
Total$6,806   5,761   8,282   15,178   8,372  

Visit our website at www.glacierbancorp.com 

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

Glacier Bancorp, Inc.

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