Glacier Bancorp, Inc. Announces Results for the Quarter Ended March 31, 2020

Nachrichtenquelle: globenewswire
23.04.2020, 22:30  |  119   |   |   

1st Quarter 2020 Highlights:

  • Net income of $43.3 million for the current quarter, a decrease of $5.8 million, or 12 percent, over the prior year first quarter net income of $49.1 million.  The current quarter results include $19.1 million of credit loss expense related to the COVID-19 pandemic and $4.8 million of credit loss expense from the acquisition of State Bank Corp., consistent with the adoption of the current expected credit loss (“CECL”) accounting standard at the beginning of 2020.
  • Including the impact from CECL, the current quarter diluted earnings per share of $0.46, a decrease of 21 percent from the prior year first quarter diluted earnings per share of $0.58.
  • The loan portfolio organically grew $124 million, or 5 percent annualized, during the current quarter and increased $450 million, or 5 percent, from the prior year first quarter.
  • The Company provided Small Business Administration (SBA) Payroll Protection Program (PPP) loans to businesses in its communities.  As of April 21, the Company had approved 8,775 PPP loans in the amount of $1.088 billion. 
  • Non-interest bearing deposits organically increased $37.6 million, or 4 percent annualized, during the current quarter and increased $293 million, or 10 percent, from the prior year first quarter.
  • Non-performing assets as a percentage of assets was 0.26 percent, a 16 basis points decrease from the prior year first quarter.
  • Early stage delinquencies as a percentage of loans was 0.41 percent, a 3 basis points decrease from the prior year first quarter.
  • Purchased $723 million of municipal and corporate debt securities in the current quarter.
  • Declared a quarterly dividend of $0.29 per share.  The Company has declared 140 consecutive quarterly dividends and has increased the dividend 45 times.
  • On February 29, 2020, the Company completed the acquisition of State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona with total assets of $744 million which significantly expanded our Company’s Arizona franchise.

Financial Highlights 

  At or for the Three Months ended
(Dollars in thousands, except per share and market data) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
Operating results          
Net income $ 43,339     57,410     49,132  
Basic earnings per share $ 0.46     0.62     0.58  
Diluted earnings per share $ 0.46     0.62     0.58  
Dividends declared per share 1 $ 0.29     0.49     0.26  
Market value per share          
Closing $ 34.01     45.99     40.07  
High $ 46.10     46.51     45.47  
Low $ 26.66     38.99     37.58  
Selected ratios and other data                  
Number of common stock shares outstanding   95,408,274     92,289,750     84,588,199  
Average outstanding shares - basic   93,287,670     92,243,133     84,549,974  
Average outstanding shares - diluted   93,359,792     92,365,021     84,614,248  
Return on average assets (annualized) 1.25 %   1.67 %   1.67 %
Return on average equity (annualized) 8.52 %   11.61 %   13.02 %
Efficiency ratio 52.55 %   54.90 %   55.37 %
Dividend payout ratio 1 63.04 %   79.03 %   44.83 %
Loan to deposit ratio 88.10 %   88.92 %   87.14 %
Number of full time equivalent employees   2,955     2,826     2,634  
Number of locations   192     181     169  
Number of ATMs   247     248     222  

______________________________

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

KALISPELL, Mont., April 23, 2020 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $43.3 million for the current quarter, a decrease of $5.8 million, or 12 percent, from the $49.1 million of net income for the prior year first quarter.  Diluted earnings per share for the current quarter was $0.46 per share, a decrease of 21 percent from the prior year first quarter diluted earnings per share of $0.58.  “The outbreak of a global pandemic in the first quarter was one of the most difficult operating environments in decades and the Glacier team more than rose to the occasion to lead their teams and their communities through the difficult circumstances,” said Randy Chesler, President and Chief Executive Officer.  “The results highlight our exceptionally strong core business and high quality loan portfolio that we believe will weather this current storm and position Glacier to continue to excel over the long haul.”

In response to the rapidly changing COVID-19 pandemic, our Bank division Presidents, the Company's executive and senior management team, and all the front line staff have stepped up to lead the Company and the communities they serve through these uncertain times.  The Company seeks to provide the best possible service for customers, while protecting employees and shareholder value.  The Company is well positioned to mitigate the potential financial impact of COVID-19 with a strong liquidity and capital position.  The Company is confident that, while the full impact of the pandemic is unknown at this time, the strength of the Company and leadership team will ensure continued long-term success. 

The Company has implemented several measures to manage through the pandemic, including:

  • launched a pandemic team that addresses the daily impact to our business;
  • contacted customers to assess their needs and provide funding, flexible repayment options or modifications as necessary;
  • designated a “command center” that supports employees so they can work with customers to provide the PPP loans;
  • increased monitoring of credit quality and portfolio risk for industries determined to have elevated risk; and
  • developed safety measures for the health of our employees including elimination of unnecessary business travel, social distancing precautions, additional wellness and education programs, and preventative cleaning practices.

The Company's first quarter net income results were significantly impacted by adoption of the CECL accounting standard.  The Company chose to adopt the standard on January 1, 2020, rather than delay the adoption as allowed by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, since the Company was operationally prepared and already internally reporting under the CECL method.  As a result, the following items impacted the results in the first quarter 2020: 

  • a $12.3 million reduction in retained earnings upon adoption of the standard.
  • a $19.1 million credit loss expense as a result of the COVID-19 pandemic.
  • an additional $4.8 million credit loss expense due to the State Bank Corp. acquisition.

The current quarter results were also impacted by the following items:

  • acquisition-related expenses of $2.8 million.
  • gain of $2.4 million on the sale of a former branch building.

On February 29, 2020, the Company completed the acquisition of 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.  Upon closing of the transaction, SBAZ merged into the Company's Foothills Bank division, which expanded the Company's footprint in Arizona to cover all major markets in the state and be a leading community bank in Arizona.  During the current quarter, the Company also completed the system core conversion for SBAZ. 

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

  State Bank
(Dollars in thousands) February 29,
2020
Total assets $ 744,109  
Debt securities 142,174  
Loans receivable 451,702  
Non-interest bearing deposits 141,620  
Interest bearing deposits 461,669  
Borrowings 10,904  

Asset Summary

              $ Change from
(Dollars in thousands) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
Cash and cash equivalents $ 273,441     330,961     202,527     (57,520 )   70,914  
Debt securities, available-for-sale 3,429,890     2,575,252     2,522,322     854,638     907,568  
Debt securities, held-to-maturity 203,814     224,611     255,572     (20,797 )   (51,758 )
Total debt securities 3,633,704     2,799,863     2,777,894     833,841     855,810  
Loans receivable                  
Residential real estate 957,830     926,388     884,732     31,442     73,098  
Commercial real estate 5,928,303     5,579,307     4,686,082     348,996     1,242,221  
Other commercial 2,239,878     2,094,254     1,909,452     145,624     330,426  
Home equity 652,942     617,201     562,381     35,741     90,561  
Other consumer 309,253     295,660     283,423     13,593     25,830  
Loans receivable 10,088,206     9,512,810     8,326,070     575,396     1,762,136  
Allowance for credit losses (150,190 )   (124,490 )   (129,786 )   (25,700 )   (20,404 )
Loans receivable, net 9,938,016     9,388,320     8,196,284     549,696     1,741,732  
Other assets 1,313,223     1,164,855     897,074     148,368     416,149  
Total assets $ 15,158,384     13,683,999     12,073,779     1,474,385     3,084,605  

Total debt securities of $3.634 billion at March 31, 2020 increased $834 million, or 30 percent, during the current quarter and increased $856 million, or 31 percent, from the prior year first quarter.  The current quarter increase in debt securities was the result of acquiring $142 million of debt securities with the SBAZ acquisition and purchasing $723 million of municipal and corporate bonds in March.  These additional securities provide a low-risk, stable earnings stream.  Debt securities represented 24 percent of total assets at March 31, 2020 compared to 20 percent at December 31, 2019 and 23 percent of total assets at March 31, 2019. 

The loan portfolio of $10.088 billion increased $124 million, or 5 percent annualized, during the current quarter excluding the SBAZ acquisition, with the largest increase in other commercial loans which increased $100 million.  Excluding the current year acquisition and the prior year acquisitions of Heritage Bank of Nevada and The First National Bank of Layton, the loan portfolio increased $450 million, or 5 percent, since the prior year first quarter with the largest increase in other commercial loans which increased $201 million, or 11 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 Three Months ended   At or for the Year ended   At or for the Three Months ended
(Dollars in thousands) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
Allowance for credit losses          
Balance at beginning of period $ 124,490     131,239     131,239  
Impact of adopting CECL 3,720          
Acquisitions 49          
Credit loss expense 22,744     57     57  
Charge-offs (2,567 )   (15,178 )   (3,341 )
Recoveries 1,754     8,372     1,831  
Balance at end of period $ 150,190     124,490     129,786  
Other real estate owned $ 4,748     5,142     8,125  
Accruing loans 90 days or more past due 6,624     1,412     2,451  
Non-accrual loans 28,006     30,883     40,269  
Total non-performing assets $ 39,378     37,437     50,845  
Non-performing assets as a percentage of subsidiary assets 0.26 %   0.27 %   0.42 %
Allowance for credit losses as a percentage of non-performing loans 434 %   385 %   304 %
Allowance for credit losses as a percentage of total loans 1.49 %   1.31 %   1.56 %
Net charge-offs as a percentage of total loans 0.01 %   0.07 %   0.02 %
Accruing loans 30-89 days past due $ 41,375     23,192     36,894  
Accruing troubled debt restructurings $ 44,371     34,055     24,468  
Non-accrual troubled debt restructurings $ 6,911     3,346     6,747  
U.S. government guarantees included in non-performing assets $ 3,204     1,786     2,649  

Non-performing assets of $39.4 million at March 31, 2020 increased $1.9 million, or 5 percent, over the prior quarter and decreased $11.5 million, or 23 percent, over the prior year first quarter.  Non-performing assets as a percentage of subsidiary assets at March 31, 2020 was 0.26 percent, a decrease of 1 basis point from the prior quarter, and a decrease of 16 basis points from the prior year first quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $41.4 million at March 31, 2020 increased $18.2 million from the prior quarter and increased $4.5 million from the prior year first quarter.  Early stage delinquencies as a percentage of loans at March 31, 2020 was 0.41 percent, which was an increase of 17 basis points from prior quarter and a 3 basis points decrease from prior year first quarter. 

The Company’s adoption of the CECL accounting standard resulted in a $3.7 million increase in the allowance for credit losses (“allowance”).  The allowance as a percentage of total loans outstanding at March 31, 2020 was 1.49 percent, which was an 18 basis point increase compared to the prior quarter.  The increase in the allowance during the current quarter was attributable to the Company recognizing $19.1 million of credit loss expense related to COVID-19 and an additional $4.8 million of credit loss expense related to the SBAZ acquisition.

Credit Quality Trends and Credit Loss Expense

(Dollars in thousands) Credit Loss Expense   Net
Charge-Offs
  ACL
as a Percent
of Loans
  Accruing
Loans 30-89
Days Past Due
as a Percent of
Loans
  Non-Performing
Assets to
Total Subsidiary
Assets
First quarter 2020 $ 22,744     $ 813     1.49 %   0.41 %   0.26 %
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 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 %

Net charge-offs for the current quarter were $813 thousand compared to $1.0 million for the prior quarter and $1.5 million from the same quarter last year.  The current quarter credit loss expense was $22.7 million compared to $57 thousand in the prior year first quarter.  Loan portfolio growth, composition, average loan size, credit quality considerations, economic forecasts and other environmental factors will continue to determine the level of the credit loss expense. 


Liability Summary

              $ Change from
(Dollars in thousands) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
Deposits                  
Non-interest bearing deposits $ 3,875,848     3,696,627     3,051,119     179,221     824,729  
NOW and DDA accounts 2,860,563     2,645,404     2,383,806     215,159     476,757  
Savings accounts 1,578,062     1,485,487     1,373,544     92,575     204,518  
Money market deposit accounts 2,155,203     1,937,141     1,689,962     218,062     465,241  
Certificate accounts 1,025,237     958,501     896,731     66,736     128,506  
Core deposits, total 11,494,913     10,723,160     9,395,162     771,753     2,099,751  
Wholesale deposits 62,924     53,297     192,953     9,627     (130,029 )
Deposits, total 11,557,837     10,776,457     9,588,115     781,380     1,969,722  
Repurchase agreements 580,335     569,824     489,620     10,511     90,715  
Federal Home Loan Bank advances 513,055     38,611     154,683     474,444     358,372  
Other borrowed funds 32,499     28,820     14,738     3,679     17,761  
Subordinated debentures 139,916     139,914     134,048     2     5,868  
Other liabilities 198,098     169,640     141,725     28,458     56,373  
Total liabilities $ 13,021,740     11,723,266     10,522,929     1,298,474     2,498,811  

Core deposits of $11.495 billion as of March 31, 2020 increased $168 million or 6 percent annualized, from the prior quarter excluding the acquisition of SBAZ with non-interest bearing deposits increasing $37.6 million, or 4 percent annualized, during the current quarter.  Excluding current and prior year acquisitions, core deposits increased $500 million, or 5 percent, from the prior year first quarter with non-interest bearing deposits increasing $293 million, or 10 percent.  Non-interest bearing deposits were 34 percent of total core deposits at March 31, 2020, an increase of 2 percent from 32 percent of total core deposits at March 31, 2019.

Wholesale deposits of $62.9 million at March 31, 2020 increased $9.6 million from prior quarter and decreased $130 million from the prior year first quarter.  Federal Home Loan Bank (FHLB) advances of $513 million at March 31, 2020 increased $474 million from the prior quarter and increased $358 million from the prior year first quarter, such increases were to supplement the current quarter deposit growth used to fund the asset growth, including the additional  investment purchases.  Wholesale deposits and FHLB advances will continue to fluctuate as necessary for balance sheet growth and to supplement liquidity needs of the Company.

During March of the current quarter, the Company purchased interest rate caps with a notional amount of $131 million (tied to 3 month Libor) to limit interest expense on the Company’s trust preferred subordinated debt.  The interest rate caps effectively convert the variable interest expense on the debt to a fixed rate of 3.93 percent when 3 month Libor exceeds 1.88 percent at anytime during the five year term of the interest rate caps.

Stockholders’ Equity Summary

              $ Change from
(Dollars in thousands, except per share data) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
Common equity $ 2,036,920     1,920,507     1,526,963     116,413     509,957  
Accumulated other comprehensive income 99,724     40,226     23,887     59,498     75,837  
Total stockholders’ equity 2,136,644     1,960,733     1,550,850     175,911     585,794  
Goodwill and core deposit intangible, net (576,701 )   (519,704 )   (337,134 )   (56,997 )   (239,567 )
Tangible stockholders’ equity $ 1,559,943     1,441,029     1,213,716     118,914     346,227  
Stockholders’ equity to total assets 14.10 %   14.33 %   12.84 %        
Tangible stockholders’ equity to total tangible assets 10.70 %   10.95 %   10.34 %        
Book value per common share $ 22.39     21.25     18.33     1.14     4.06  
Tangible book value per common share $ 16.35     15.61     14.35     0.74     2.00  

Tangible stockholders’ equity of $1.560 billion at March 31, 2020 increased $119 million, or 8 percent, compared to the prior quarter which was the result of $112 million of Company stock issued for the acquisition of SBAZ and earnings retention; such increases more than offset the increase in goodwill and core deposits associated with the acquisition and the $12.3 million decrease from the adoption of the current expected credit loss model.  Tangible book value per common share of $16.35 at current quarter end increased $0.74 per share from the prior quarter and increased $2.00 per share from a year ago.

Cash Dividends
On March 25, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.29 per share.  The dividend was payable April 16, 2020 to shareholders of record on April 7, 2020. The dividend was the 140th consecutive dividend.  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 March 31, 2020 
Compared to December 31, 2019 and March 31, 2019

Income Summary

  Three Months ended   $ Change from
(Dollars in thousands) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
Net interest income                  
Interest income $ 142,865     145,281     126,116     (2,416 )   16,749  
Interest expense 8,496     8,833     10,904     (337 )   (2,408 )
Total net interest income 134,369     136,448     115,212     (2,079 )   19,157  
Non-interest income                  
Service charges and other fees 14,020     14,756     18,015     (736 )   (3,995 )
Miscellaneous loan fees and charges 1,285     1,379     967     (94 )   318  
Gain on sale of loans 11,862     10,135     5,798     1,727     6,064  
Gain on sale of investments 863     257     213     606     650  
Other income 5,242     1,890     3,481     3,352     1,761  
Total non-interest income 33,272     28,417     28,474     4,855     4,798  
Total income $ 167,641     164,865     143,686     2,776     23,955  
Net interest margin (tax-equivalent) 4.36 %   4.45 %   4.34 %        

Net Interest Income
The current quarter net interest income of $134 million decreased $2.1 million, or 2 percent, over the prior quarter and increased $19.2 million, or 17 percent, from the prior year first quarter.  The current quarter interest income of $143 million decreased $2.4 million, or 2 percent, over the prior quarter which was driven primarily by a decrease in loan interest rates.  The current quarter interest income increased $16.7 million, or 13 percent, over prior year first quarter and was attributable to an increase in interest income on commercial loans due to an increase in loans, which increased $15.1 million, or 18 percent, from the prior year first quarter.

The current quarter interest expense of $8.5 million decreased $337 thousand, or 4 percent, over the prior quarter as a result of a decrease in interest rates.  Current quarter interest expense decreased $2.4 million, or 22 percent, over prior year first quarter which was due to the decrease in higher cost FHLB advances.  During the current quarter, the total cost of funding (including non-interest bearing deposits) declined 1 basis point to 29 basis points compared to 30 basis points for the prior quarter and 43 basis points for the prior year first quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.36 percent compared to 4.45 percent in the prior quarter.  The core net interest margin, excluding  $1.2 million, or 4 basis points, of discount accretion and $655 thousand, or 2 basis points, of non-accrual interest recoveries, was 4.30 percent compared to 4.33 in the prior quarter and 4.26 percent in the prior year first quarter.  The Company experienced a 3 basis points decrease in the core net interest margin during the current quarter from decreased yields on loans that more than offset the decrease in the cost of funding.  The core net interest margin increased 4 basis points from the prior year first quarter primarily the result of a decrease in funding cost and reduced reliance on higher cost wholesale funding.  “We were pleased that the core net interest margin remained stable during the current quarter compared to the prior quarter,” said Ron Copher, Chief Financial Officer.              

Non-interest Income
Non-interest income for the current quarter totaled $33.3 million which was an increase of $4.9 million, or 17 percent, over the prior quarter and an increase of $4.8 million, or 17 percent, over the same quarter last year.  Service charges and other fees of $14.0 million for the current quarter decreased $4.0 million, or 22 percent, from the prior year first quarter due to the Company's decrease in interchange fees as a result of the Durbin Amendment that more than offset the increased transaction activity.  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 $11.9 million for the current quarter increased $1.7 million, or 17 percent, compared to the prior quarter and increased $6.1 million, or 105 percent, from the prior year first quarter principally due to the increased refinance activity driven by the decrease in interest rates.  Other income of $5.2 million increased $3.4 million from the prior quarter and increased $1.8 million from the prior year first quarter, primarily as a result of a $2.4 million gain on the sale of a former branch building in the current quarter.

Non-interest Expense Summary

  Three Months ended   $ Change from
(Dollars in thousands) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
Compensation and employee benefits $ 59,660     55,543     52,728     4,117     6,932  
Occupancy and equipment 9,219     9,149     8,437     70     782  
Advertising and promotions 2,487     2,747     2,388     (260 )   99  
Data processing 5,282     4,972     3,892     310     1,390  
Other real estate owned 112     609     139     (497 )   (27 )
Regulatory assessments and insurance 1,090     45     1,285     1,045     (195 )
Core deposit intangibles amortization 2,533     2,566     1,694     (33 )   839  
Other expenses 11,545     19,621     12,267     (8,076 )   (722 )
Total non-interest expense $ 91,928     95,252     82,830     (3,324 )   9,098  

Total non-interest expense of $92.0 million for the current quarter decreased $3.3 million, or 3 percent, over the prior quarter and increased $9.1 million, or 11 percent, over the prior year first quarter.  Compensation and employee benefits increased by $4.1 million, or 7 percent, from the prior quarter as result of increased employees from the SBAZ acquisition and annual salary increases and benefit adjustments.  Compensation and employee benefits increased $6.9 million, or 13 percent, from the prior year first quarter primarily due to an increased number of employees driven by current and prior year acquisitions.  Occupancy and equipment expense increased $782 thousand, or 9 percent, over the prior year first quarter primarily as a result of increased costs from acquisitions.  Data processing expense increased $310 thousand, or 6 percent, over the prior quarter and increased $1.4 million, or 36 percent, over the prior year first quarter as a result of the current and prior year acquisitions.  Regulatory assessment and insurance increased $1.0 million from the prior quarter as a result of a decrease in the amount of Small Bank Assessment credits applied by the FDIC.  The Company received $530 thousand of Small Bank Assessment credits during the current quarter compared to $1.3 million in the prior quarter.  Regulatory assessment and insurance decreased $195 thousand, or 15 percent, over prior year first quarter and was driven by the current quarter FDIC credits which offset the increased cost from organic and acquisition growth.  Other expenses of $11.5 million, decreased $8.1 million, or 41 percent, from the prior quarter and was due to a $3.6 million decrease in expense related to unfunded loan commitments, a $1.6 million decrease in acquisition-related expenses and smaller decreases in several other categories.  The current quarter decrease in expense related to unfunded loan commitments was driven by a decreased loss rate on certain portfolio segments, primarily the construction segments.  Other expenses included acquisition-related expenses of $2.8 million in the current quarter compared to $4.4 million in the prior quarter and $214 thousand in the prior year first quarter.

Federal and State Income Tax Expense
Tax expense during the first quarter of 2020 was $9.6 million, a decrease of $2.6 million, or 21 percent, compared to the prior quarter and a decrease of $2.0 million, or 17 percent, from the prior year first quarter.  The effective tax rate in the current quarter was 18 percent which compares to 18 percent in the prior quarter and 19 percent prior year first quarter.

Efficiency Ratio
The current quarter efficiency ratio was 52.55 percent, a 235 basis points decrease from the prior quarter efficiency ratio of 54.90 percent which was due to controlling costs, a decrease in expense related to unfunded loan commitments and the increase in non-interest income.  The current quarter efficiency ratio decreased 282 basis points from the prior year first quarter efficiency ratio of 55.37 percent which was driven by the increased commercial loan interest income and gain on sale of loans which more than offset decreases in service fee income from the Durbin amendment and increased operating costs.

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, such as the recently adopted CARES Act addressing the economic effects of the COVID-19 pandemic, as well as 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, April 24, 2020. The conference call will be accessible by telephone and webcast. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 8916519. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/nimct5u3. 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 8916519 by May 8, 2020.

In connection with this Earnings Release, we are also providing Supplemental Information for investors.

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 (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) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
Assets          
Cash on hand and in banks $ 204,373     198,639     139,333  
Federal funds sold         115  
Interest bearing cash deposits 69,068     132,322     63,079  
Cash and cash equivalents 273,441     330,961     202,527  
Debt securities, available-for-sale 3,429,890     2,575,252     2,522,322  
Debt securities, held-to-maturity 203,814     224,611     255,572  
Total debt securities 3,633,704     2,799,863     2,777,894  
Loans held for sale, at fair value 94,619     69,194     29,389  
Loans receivable 10,088,206     9,512,810     8,326,070  
Allowance for credit losses (150,190 )   (124,490 )   (129,786 )
Loans receivable, net 9,938,016     9,388,320     8,196,284  
Premises and equipment, net 324,230     310,309     277,619  
Other real estate owned 4,748     5,142     8,125  
Accrued interest receivable 68,525     56,047     57,367  
Deferred tax asset     2,037     12,554  
Core deposit intangible, net 63,346     63,286     47,548  
Goodwill 513,355     456,418     289,586  
Non-marketable equity securities 30,597     11,623     16,435  
Bank-owned life insurance 121,685     109,428     82,819  
Other assets 92,118     81,371     75,632  
Total assets $ 15,158,384     13,683,999     12,073,779  
Liabilities          
Non-interest bearing deposits $ 3,875,848     3,696,627     3,051,119  
Interest bearing deposits 7,681,989     7,079,830     6,536,996  
Securities sold under agreements to repurchase 580,335     569,824     489,620  
FHLB advances 513,055     38,611     154,683  
Other borrowed funds 32,499     28,820     14,738  
Subordinated debentures 139,916     139,914     134,048  
Accrued interest payable 4,713     4,686     4,709  
Deferred tax liability 15,210          
Other liabilities 178,175     164,954     137,016  
Total liabilities 13,021,740     11,723,266     10,522,929  
Commitments and Contingent Liabilities          
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 954     923     846  
Paid-in capital 1,491,651     1,378,534     1,051,299  
Retained earnings - substantially restricted 544,315     541,050     474,818  
Accumulated other comprehensive income 99,724     40,226     23,887  
Total stockholders’ equity 2,136,644     1,960,733     1,550,850  
Total liabilities and stockholders’ equity $ 15,158,384     13,683,999     12,073,779  


Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

  Three Months ended
(Dollars in thousands, except per share data) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
Interest Income          
Debt securities $ 21,014     20,904     21,351  
Residential real estate loans 11,526     12,554     10,779  
Commercial loans 98,684     100,301     83,539  
Consumer and other loans 11,641     11,522     10,447  
Total interest income 142,865     145,281     126,116  
Interest Expense          
Deposits 5,581     6,101     5,341  
Securities sold under agreements to repurchase 989     1,007     802  
Federal Home Loan Bank advances 346     86     3,055  
Other borrowed funds 128     92     38  
Subordinated debentures 1,452     1,547     1,668  
Total interest expense 8,496     8,833     10,904  
Net Interest Income 134,369     136,448     115,212  
Credit loss expense 22,744         57  
Net interest income after credit loss expense 111,625     136,448     115,155  
Non-Interest Income          
Service charges and other fees 14,020     14,756     18,015  
Miscellaneous loan fees and charges 1,285     1,379     967  
Gain on sale of loans 11,862     10,135     5,798  
Gain on sale of debt securities 863     257     213  
Other income 5,242     1,890     3,481  
Total non-interest income 33,272     28,417     28,474  
Non-Interest Expense          
Compensation and employee benefits 59,660     55,543     52,728  
Occupancy and equipment 9,219     9,149     8,437  
Advertising and promotions 2,487     2,747     2,388  
Data processing 5,282     4,972     3,892  
Other real estate owned 112     609     139  
Regulatory assessments and insurance 1,090     45     1,285  
Core deposit intangibles amortization 2,533     2,566     1,694  
Other expenses 11,545     19,621     12,267  
Total non-interest expense 91,928     95,252     82,830  
Income Before Income Taxes 52,969     69,613     60,799  
Federal and state income tax expense 9,630     12,203     11,667  
Net Income $ 43,339     57,410     49,132  

Glacier Bancorp, Inc.
Average Balance Sheets

  Three Months ended
  March 31, 2020   March 31, 2019
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 980,647     $ 11,526     4.70 %   $ 917,324     $ 10,779     4.70 %
Commercial loans 1 7,809,482     99,956     5.15 %   6,524,190     84,613     5.26 %
Consumer and other loans 926,924     11,641     5.05 %   839,011     10,447     5.05 %
Total loans 2 9,717,053     123,123     5.10 %   8,280,525     105,839     5.18 %
Tax-exempt debt securities 3 930,601     9,409     4.04 %   960,569     9,950     4.14 %
Taxable debt securities 4 2,059,581     13,772     2.67 %   1,845,677     13,729     2.98 %
Total earning assets 12,707,235     146,304     4.63 %   11,086,771     129,518     4.74 %
Goodwill and intangibles 539,431             337,963          
Non-earning assets 690,338             520,353          
Total assets $ 13,937,004             $ 11,945,087          
Liabilities                      
Non-interest bearing deposits $ 3,672,959     $     %   $ 2,943,770     $     %
NOW and DDA accounts 2,675,152     915     0.14 %   2,320,928     961     0.17 %
Savings accounts 1,518,809     239     0.06 %   1,359,807     234     0.07 %
Money market deposit accounts 2,031,799     1,624     0.32 %   1,690,305     1,010     0.24 %
Certificate accounts 965,908     2,595     1.08 %   905,005     2,014     0.90 %
Total core deposits 10,864,627     5,373     0.20 %   9,219,815     4,219     0.19 %
Wholesale deposits 5 57,110     208     1.46 %   169,361     1,122     2.69 %
FHLB advances 108,672     346     1.26 %   352,773     3,055     3.46 %
Repurchase agreements and  other borrowed funds 712,787     2,569     1.45 %   556,325     2,508     1.83 %
Total funding liabilities 11,743,196     8,496     0.29 %   10,298,274     10,904     0.43 %
Other liabilities 147,361             116,143          
Total liabilities 11,890,557             10,414,417          
Stockholders’ Equity                      
Common stock 933             846          
Paid-in capital 1,417,004             1,051,261          
Retained earnings 562,951             471,626          
Accumulated other comprehensive  income 65,559             6,937          
Total stockholders’ equity 2,046,447             1,530,670          
Total liabilities and stockholders’ equity $ 13,937,004             $ 11,945,087          
Net interest income (tax-equivalent)     $ 137,808             $ 118,614      
Net interest spread (tax-equivalent)         4.34 %           4.31 %
Net interest margin (tax-equivalent)         4.36 %           4.34 %

______________________________

Includes tax effect of $1.3 million and $1.1 million on tax-exempt municipal loan and lease income for the three months ended March 31, 2020 and 2019, respectively.
Total loans are gross of the allowance for credit 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 $2.0 million on tax-exempt debt securities income for the three months ended March 31, 2020 and 2019, respectively.
4   Includes tax effect of $266 thousand and $293 thousand on federal income tax credits for the three months ended March 31, 2020 and 2019, 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) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
 
Custom and owner occupied construction $ 172,238     $ 143,479     $ 126,820     20 %   36 %  
Pre-sold and spec construction 180,799     180,539     135,137     %   34 %  
Total residential construction 353,037     324,018     261,957     9 %   35 %  
Land development 101,644     101,592     126,417     %   (20 )%  
Consumer land or lots 121,082     125,759     125,818     (4 )%   (4 )%  
Unimproved land 65,355     62,563     75,113     4 %   (13 )%  
Developed lots for operative builders 32,661     17,390     16,171     88 %   102 %  
Commercial lots 59,023     46,408     35,511     27 %   66 %  
Other construction 453,403     478,368     454,965     (5 )%   %  
Total land, lot, and other construction 833,168     832,080     833,995     —  %   —  %  
Owner occupied 1,813,284     1,667,526     1,367,530     9 %   33 %  
Non-owner occupied 2,200,664     2,017,375     1,662,390     9 %   32 %  
Total commercial real estate 4,013,948     3,684,901     3,029,920     9 %   32 %  
Commercial and industrial 1,151,817     991,580     922,124     16 %   25 %  
Agriculture 694,444     701,363     641,146     (1 )%   8 %  
1st lien 1,213,232     1,186,889     1,102,920     2 %   10 %  
Junior lien 49,071     53,571     54,964     (8 )%   (11 )%  
Total 1-4 family 1,262,303     1,240,460     1,157,884     2 %   9 %  
Multifamily residential 352,379     342,498     268,156     3 %   31 %  
Home equity lines of credit 656,953     617,900     557,895     6 %   18 %  
Other consumer 180,832     174,643     163,568     4 %   11 %  
Total consumer 837,785     792,543     721,463     %   16  %  
States and political subdivisions 566,953     533,023     398,848     %   42  %  
Other 116,991     139,538     119,966     (16 )%   (2 )%  
Total loans receivable, including
  loans held for sale
10,182,825     9,582,004     8,355,459     6 %   22 %  
Less loans held for sale 1 (94,619 )   (69,194 )   (29,389 )   37 %   222 %  
Total loans receivable $ 10,088,206     $ 9,512,810     $ 8,326,070     6 %   21 %  

______________________________

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) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Mar 31,
2020
  Mar 31,
2020
  Mar 31,
2020
Custom and owner occupied construction $ 188     185         188          
Pre-sold and spec construction 96     743     456     96          
Total residential construction 284     928     456     284          
Land development 1,432     852     2,272     1,184         248  
Consumer land or lots 471     330     1,126     124     186     161  
Unimproved land 680     1,181     9,222     404         276  
Developed lots for operative builders         67              
Commercial lots 529     529     663             529  
Other construction         111              
Total land, lot and other construction 3,112     2,892     13,461     1,712     186     1,214  
Owner occupied 5,269     4,608     7,229     3,717     107     1,445  
Non-owner occupied 5,133     8,229     7,368     4,983     150      
Total commercial real estate 10,402     12,837     14,597     8,700     257     1,445  
Commercial and industrial 5,438     5,297     3,893     4,724     525     189  
Agriculture 7,263     2,288     4,488     2,658     4,605      
1st lien 8,410     8,671     10,279     6,155     701     1,554  
Junior lien 640     569     582     601     39      
Total 1-4 family 9,050     9,240     10,861     6,756     740     1,554  
Multifamily residential 402     201     —      95     —      307  
Home equity lines of credit 2,617     2,618     2,288     2,464     153      
Other consumer 520     837     453     329     152     39  
Total consumer 3,137     3,455     2,741     2,793     305     39  
Other 290     299     348     284     6      
Total $ 39,378     37,437     50,845     28,006     6,624     4,748  

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

  Accruing 30-89 Days Delinquent Loans,  by Loan Type   % Change from
(Dollars in thousands) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Dec 31,
2019
  Mar 31,
2019
Custom and owner occupied construction $ 2,176     $ 637     $ 282     242 %   672 %
Pre-sold and spec construction 328     148     553     122 %   (41 )%
Total residential construction 2,504     785     835     219 %   200 %
Land development 840             n/m     n/m  
Consumer land or lots 321     672     510     (52 )%   (37 )%
Unimproved land 934     558     685     67 %   36 %
Developed lots for operative builders     2     4     (100 )%   (100 )%
Commercial lots 216         331     n/m     (35 )%
Other construction         1,234     n/m     (100 )%
Total land, lot and other construction 2,311     1,232     2,764     88 %   (16 )%
Owner occupied 3,235     3,052     4,463     6 %   (28 )%
Non-owner occupied 4,764     1,834     6,604     160 %   (28 )%
Total commercial real estate 7,999     4,886     11,067     64 %   (28 )%
Commercial and industrial 6,122     2,036     4,070     201 %   50 %
Agriculture 6,210     4,298     5,709     44 %   9 %
1st lien 7,419     4,711     7,179     57 %   3 %
Junior lien 795     624     583     27 %   36 %
Total 1-4 family 8,214     5,335     7,762     54 %   6 %
Home equity lines of credit 5,549     2,352     2,925     136 %   90 %
Other consumer 1,456     1,187     1,357     23 %   7 %
Total consumer 7,005     3,539     4,282     98 %   64 %
Other 1,010     1,081     405     (7 )%   149 %
Total $ 41,375     $ 23,192     $ 36,894     78 %   12 %

______________________________

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) Mar 31,
2020
  Dec 31,
2019
  Mar 31,
2019
  Mar 31,
2020
  Mar 31,
2020
Custom and owner occupied construction $     98              
Pre-sold and spec construction (6 )   (18 )   (4 )       6  
Total residential construction (6 )   80     (4 )       6  
Land development (275 )   (30 )   23         275  
Consumer land or lots 3     (138 )   (20 )   7     4  
Unimproved land (37 )   (311 )   (9 )       37  
Developed lots for operative builders     (18 )            
Commercial lots (1 )   (6 )   (2 )       1  
Other construction     (142 )            
Total land, lot and other construction (310 )   (645 )   (8 )   7     317  
Owner occupied (16 )   (479 )   75     30     46  
Non-owner occupied (20 )   2,015     30         20  
Total commercial real estate (36 )   1,536     105     30     66  
Commercial and industrial 61     1,472     (4 )   404     343  
Agriculture 36     21     14     37     1  
1st lien 14     (12 )   198     21     7  
Junior lien (110 )   (303 )   (52 )   1     111  
Total 1-4 family (96 )   (315 )   146     22     118  
Multifamily residential (43 )   —      —          43  
Home equity lines of credit (103 )   19     (5 )       103  
Other consumer 88     603     223     151     63  
Total consumer (15 )   622     218     151     166  
Other 1,222     4,035     1,043     1,916     694  
Total $ 813     6,806     1,510     2,567     1,754  

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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Disclaimer

Glacier Bancorp, Inc. Announces Results for the Quarter Ended March 31, 2020 1st Quarter 2020 Highlights: Net income of $43.3 million for the current quarter, a decrease of $5.8 million, or 12 percent, over the prior year first quarter net income of $49.1 million.  The current quarter results include $19.1 million of credit …

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