Glacier Bancorp, Inc. Announces Results for the Quarter and Period Ended September 30, 2020

Nachrichtenquelle: globenewswire
22.10.2020, 22:30  |  111   |   |   

3rd Quarter 2020 Highlights:

  • Net income of $77.8 million for the current quarter, an increase of $26.2 million, or 51 percent, over the prior year third quarter net income of $51.6 million. 

  • Current quarter diluted earnings per share of $0.81, an increase of 42 percent from the prior year third quarter diluted earnings per share of $0.57.

  • The loan portfolio organically increased $165 million, or 1 percent, in the current quarter and increased $1.626 billion, or 17 percent, from the prior year third quarter.

  • Core deposits increased $868 million, or 7 percent, during the current quarter, with non-interest bearing deposit growth of $436 million, or 9 percent.  Core deposits organically increased $2.8 billion, or 26 percent, compared to the prior year third quarter, with non-interest bearing deposit growth of $1.6 billion, or 41 percent.

  • Gain on sale of loans of $35.5 million, increased $9.7 million, or 37 percent, over the prior quarter and increased $25.1 million, or 243 percent, compared to the prior year third quarter.

  • Interest expense of $6.1 million decreased $1.1 million, or 15 percent, over the prior quarter and decreased $4.9 million, or 44 percent, compared to the prior year third quarter.

  • Bank loan modifications related to the coronavirus disease of 2019 (“COVID-19”) decreased $1.049 billion during the current quarter to $466 million, or 4.58 percent of loans excluding PPP loans. 

  • Non-performing assets as a percentage of subsidiary assets was 0.25 percent, which compared to 0.27 percent in the prior quarter and 0.40 percent in the prior year third quarter.

  • Early stage delinquencies (accruing 30-89 days past due) as a percentage of loans in the current quarter was 0.15 percent, which compared to 0.22 percent in the prior quarter and 0.31 percent in the prior year third quarter.

  • Declared a quarterly dividend of $0.30 per share, an increase of $0.01 per share or 3 percent over the prior quarter dividend.  The Company has declared 142 consecutive quarterly dividends and has increased the dividend 46 times.

Year-to-Date 2020 Highlights:

  • Net income of $185 million for the first nine months of 2020, an increase of $31.4 million, or 21 percent, over the first nine months of 2019 net income of $153 million. 

  • Diluted earnings per share of $1.95, an increase of 11 percent from the prior year first nine months diluted earnings per share of $1.76.

  • The Company originated U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) loans for businesses in its communities.  The Company originated 16,090 PPP loans in the amount of $1.472 billion. 

  • The loan portfolio organically grew $1.654 billion, or 17 percent, during the first nine months of 2020.  Excluding PPP loans, the loan portfolio organically increased $206 million, or 2 percent during the first nine months of 2020.

  • Core deposits organically increased $2.9 billion, or 27 percent, during the first nine months of 2020, with non-interest bearings deposit growth of $1.6 billion, or 44 percent.

  • Gain on sale of loans of $73.2 million, increased $49.3 million, or 206 percent, compared to the prior year first nine months.

  • Dividends declared of $0.88 per share, an increase of $0.06 per share, or 7 percent, over the prior year first nine months dividends of $0.82.

  • 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.

  • During the current year, S&P Dow Jones Indices selected the Company to transition from the S&P SmallCap 600 to the S&P MidCap 400.

Financial Highlights 

  At or for the Three Months ended   At or for the Nine Months ended
(Dollars in thousands, except per share and market data) Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
  Sep 30,
2019
  Sep 30,
2020
  Sep 30,
2019
Operating results                      
Net income $ 77,757     63,444     43,339     51,610     184,540     153,134  
Basic earnings per share $ 0.81     0.67     0.46     0.57     1.95     1.76  
Diluted earnings per share $ 0.81     0.66     0.46     0.57     1.95     1.76  
Dividends declared per share $ 0.30     0.29     0.29     0.29     0.88     0.82  
Market value per share                      
Closing $ 32.05     35.29     34.01     40.46     32.05     40.46  
High $ 38.13     46.54     46.10     42.61     46.54     45.47  
Low $ 30.05     30.30     26.66     37.70     26.66     37.58  
Selected ratios and other data                      
Number of common stock shares outstanding 95,413,743   95,409,061   95,408,274   92,180,618   95,413,743   92,180,618
Average outstanding shares - basic 95,411,656   95,405,493   93,287,670   90,294,811   94,704,198   86,911,402
Average outstanding shares - diluted 95,442,576   95,430,403   93,359,792   90,449,195   94,747,894   87,082,178
Return on average assets (annualized) 1.80 %   1.57 %   1.25 %   1.55 %   1.56 %   1.63 %
Return on average equity (annualized) 13.73 %   11.68 %   8.52 %   10.92 %   11.40 %   12.17 %
Efficiency ratio 49.16 %   49.29 %   52.55 %   65.95 %   50.21 %   58.82 %
Dividend payout ratio 37.04 %   43.28 %   63.04 %   50.88 %   45.13 %   46.59 %
Loan to deposit ratio 82.29 %   86.45 %   88.10 %   88.71 %   82.29 %   88.71 %
Number of full time equivalent employees 2,946   2,954   2,955   2,802   2,946   2,802
Number of locations 193   192   192   182   193   182
Number of ATMs 250   251   247   238   250   238

KALISPELL, Mont., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $77.8 million for the current quarter, an increase of $26.2 million, or 51 percent, from the $51.6 million of net income for the prior year third quarter.  Diluted earnings per share for the current quarter was $0.81 per share, an increase of 42 percent from the prior year third quarter diluted earnings per share of $0.57.  Included in the current quarter was $793 thousand of acquisition-related expenses.  “The Glacier team continues to do an outstanding job managing through a constantly changing and uncertain operating landscape while taking care of employees, customers and communities,” said Randy Chesler, President and Chief Executive Officer.  “We are encouraged by the credit performance we see in our portfolio and believe that, in addition to our conservative credit culture, we are helped by the strong markets in which we operate as well as the increased movement into our markets as technology and business practices allow more people to consider different places to live.”

Net income for the nine months ended September 30, 2020 was $185 million, an increase of $31.4 million, or 21 percent, from the $153 million net income from the first nine months of the prior year.  Diluted earnings per share for the first nine months of the current year was $1.95 per share, an increase of 11 percent, from the diluted earnings per share of $1.76 for the same period last year.

The Company continues to navigate through the coronavirus disease of 2019 (“COVID-19”) pandemic to ensure the safety of its employees and customers along with monitoring credit quality and protecting shareholder value.  The Company’s geographic footprint has experienced varying levels of exposure and impact from COVID-19 and the Company’s pandemic team remains flexible in responding to the changing conditions in all the markets that it serves. 

In order to meet the needs of customers impacted by the pandemic, during the second quarter of 2020 the Company modified 3,054 loans in the amount of $1.515 billion primarily with short-term payment deferrals under six months.  The majority of these modified loan deferral periods expired and the loans returned to regular payment status with only $466 million loans, or 5 percent, remaining deferred as of September 30, 2020.

In addition, the Company originated SBA PPP loans for businesses in its communities.  The Company originated 16,090 PPP loans in the amount of $1.472 billion during the current year.  During the current quarter, these loans provided an additional $9.3 million of interest income (including net deferred fees and costs) and $438 thousand of deferred compensation costs for a total increase in income of $9.8 million ($7.3 million net of tax).

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. 

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 Corp.
(Dollars in thousands) February 29,
2020
Total assets $ 745,420  
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) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
Cash and cash equivalents $ 769,879     547,610     330,961     406,384     222,269     438,918     363,495  
Debt securities, available-for-sale 4,125,548     3,533,950     2,575,252     2,459,036     591,598     1,550,296     1,666,512  
Debt securities, held-to-maturity 193,509     203,275     224,611     234,992     (9,766 )   (31,102 )   (41,483 )
Total debt securities 4,319,057     3,737,225     2,799,863     2,694,028     581,832     1,519,194     1,625,029  
Loans receivable                          
Residential real estate 862,614     903,198     926,388     936,877     (40,584 )   (63,774 )   (74,263 )
Commercial real estate 6,201,817     6,047,692     5,579,307     5,548,174     154,125     622,510     653,643  
Other commercial 3,593,322     3,547,249     2,094,254     2,145,257     46,073     1,499,068     1,448,065  
Home equity 646,850     654,392     617,201     615,781     (7,542 )   29,649     31,069  
Other consumer 314,128     300,847     295,660     294,999     13,281     18,468     19,129  
Loans receivable 11,618,731     11,453,378     9,512,810     9,541,088     165,353     2,105,921     2,077,643  
Allowance for credit losses (164,552 )   (162,509 )   (124,490 )   (125,535 )   (2,043 )   (40,062 )   (39,017 )
Loans receivable, net 11,454,179     11,290,869     9,388,320     9,415,553     163,310     2,065,859     2,038,626  
Other assets 1,382,952     1,330,944     1,164,855     1,202,827     52,008     218,097     180,125  
Total assets $ 17,926,067     16,906,648     13,683,999     13,718,792     1,019,419     4,242,068     4,207,275  

Total debt securities of $4.319 billion at September 30, 2020 increased $582 million, or 16 percent, during the current quarter and increased $1.625 billion, or 60 percent, from the prior year third quarter.  The Company continues to purchase debt securities with the excess liquidity produced from the increase in core deposits.  Debt securities represented 24 percent of total assets at September 30, 2020 compared to 20 percent at December 31, 2019 and 20 percent of total assets at September 30, 2019. 

The loan portfolio of $11.619 billion increased $165 million, or 1 percent, during the current quarter with the largest increase in commercial real estate which increased $154 million, or 3 percent.  Excluding the PPP loans and the SBAZ acquisition, the loan portfolio increased $178 million, or 2 percent, since the prior year third quarter with the largest increase in commercial real estate loans which increased $318 million, or 6 percent.

Credit Quality Summary

  At or for the Nine Months ended   At or for the Six Months ended   At or for the Year ended   At or for the Nine Months ended
(Dollars in thousands) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
Allowance for credit losses              
Balance at beginning of period $ 124,490       124,490       131,239       131,239    
Impact of adopting CECL 3,720       3,720                
Acquisitions 49       49                
Credit loss expense 39,165       36,296       57       57    
Charge-offs (7,865 )     (5,235 )     (15,178 )     (12,090 )  
Recoveries 4,993       3,189       8,372       6,329    
Balance at end of period $ 164,552       162,509       124,490       125,535    
Other real estate owned $ 5,361       4,743       5,142       7,148    
Accruing loans 90 days or more past due 2,952       6,071       1,412       7,912    
Non-accrual loans 36,350       35,157       30,883       40,017    
Total non-performing assets $ 44,663       45,971       37,437       55,077    
Non-performing assets as a percentage of subsidiary assets 0.25   %   0.27   %   0.27   %   0.40   %
Allowance for credit losses as a percentage of non-performing loans 419   %   394   %   385   %   262   %
Allowance for credit losses as a percentage of total loans 1.42   %   1.42   %   1.31   %   1.32   %
Net charge-offs as a percentage of total loans 0.03   %   0.02   %   0.07   %   0.06   %
Accruing loans 30-89 days past due $ 17,631       25,225       23,192       29,954    
Accruing troubled debt restructurings $ 39,999       41,759       34,055       32,949    
Non-accrual troubled debt restructurings $ 7,579       8,204       3,346       6,723    
U.S. government guarantees included in non-performing assets $ 4,411       3,305       1,786       3,000    

Non-performing assets of $44.7 million at September 30, 2020 decreased $1.3 million, or 3 percent, over the prior quarter and decreased $10.4 million, or 19 percent, over the prior year third quarter.  Non-performing assets as a percentage of subsidiary assets at September 30, 2020 was 0.25 percent.  Excluding the government guaranteed PPP loans, the non-performing assets as a percentage of subsidiary assets at September 30, 2020 was 0.27 percent, a decrease of 3 basis points from the prior quarter, and a decrease of 13 basis points from the prior year third quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $17.6 million at September 30, 2020 decreased $7.6 million from the prior quarter and decreased $12.3 million from the prior year third quarter.  Early stage delinquencies as a percentage of loans at September 30, 2020 was 0.15 percent, which was a decrease of 7 basis points from prior quarter and a 16 basis points decrease from prior year third quarter.  Excluding PPP loans, early stage delinquencies as a percentage of loans at September 30, 2020 was 0.17 percent, which was a decrease of 8 basis points from prior quarter and a 14 basis points decrease from prior year third quarter.

The current quarter credit loss expense was $2.9 million, a decrease of $10.7 million from the prior quarter credit loss expense of $13.6 million.  The current year-to-date credit loss expense was $39.2 million and primarily attributable to credit loss expense related to COVID-19 and an additional $4.8 million of credit loss expense related to the SBAZ acquisition.  The allowance for credit losses (“ACL”) as a percentage of total loans outstanding at September 30, 2020 was 1.42 percent which remained unchanged compared to the prior quarter.  Excluding the PPP loans, the ACL as percentage of loans was 1.62 percent which also remained unchanged compared to the prior quarter.  

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
Third quarter 2020 $ 2,869     $ 826     1.42 %   0.15 %   0.25 %
Second quarter 2020 13,552     1,233     1.42 %   0.22 %   0.27 %
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 %

Net charge-offs for the current quarter were $826 thousand compared to $1.2 million for the prior quarter and $3.5 million from the same quarter last year.  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. 

PPP Loans

  September 30, 2020
(Dollars in thousands) Number of
PPP Loans
  Amount of
PPP Loans
  Total Loans Receivable, Net of PPP Loans   PPP Loans (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans
Residential real estate     $     862,614     %
Commercial real estate and other commercial              
Real estate rental and leasing 1,221     64,647     3,361,074     1.92 %
Accommodation and food services 1,502     160,295     644,627     24.87 %
Healthcare 1,928     288,612     826,809     34.91 %
Manufacturing 830     80,483     193,216     41.65 %
Retail and wholesale trade 1,672     168,837     471,115     35.84 %
Construction 2,297     214,652     774,069     27.73 %
Other 6,640     470,891     2,075,812     22.68 %
Home equity and other consumer         960,978     %
Total 16,090     $ 1,448,417     10,170,314     14.24 %

The PPP loan originations generated $55.2 million of SBA processing fees, or an average of 3.75 percent, and $8.9 million of deferred compensation costs for total net deferred fees of $46.3 million.  Net deferred fees remaining on the PPP loans at September 30, 2020 were $36.1 million, which will be recognized into interest income over the life of the loans, generally two years, or when the loans are forgiven in whole or part by the SBA.  The Company has actively been working with its customers to submit applications to the SBA for forgiveness of the loans and the Company started receiving forgiveness payments in the fourth quarter of 2020.

COVID-19 Bank Loan Modifications

  September 30, 2020   June 30, 2020
(Dollars in thousands) Total Loans Receivable, Net of PPP Loans   Amount of Unexpired Original  Loan Modifications   Amount of
Re-deferral Loan Modifications
  Amount of
Remaining Loan
Modifications
  Loan Modifications (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans   Amount of
Remaining Loan
Modifications
  Loan Modifications (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans
Residential real estate $ 862,614     28,571         28,571     3.31 %   $ 66,395     7.35 %
Commercial real estate
  and other commercial
                         
Real estate rental
  and leasing
3,361,074     163,103     43,735     206,838     6.15 %   587,609     18.11 %
Accommodation and
  food services
644,627     69,328     12,854     82,182     12.75 %   395,882     61.41 %
Healthcare 826,809     29,136     14,117     43,253     5.23 %   126,808     16.01 %
Manufacturing 193,216     15,263     3,296     18,559     9.61 %   49,338     24.41 %
Retail and wholesale
  trade
471,115     13,299     2,554     15,853     3.36 %   46,623     9.78 %
Construction 774,069     13,337     1,188     14,525     1.88 %   38,751     5.06 %
Other 2,075,812     23,146     27,442     50,588     2.44 %   192,060     9.40 %
Home equity and other
  consumer
960,978     5,767         5,767     0.60 %   11,326     1.19 %
Total $ 10,170,314       360,950     105,186     466,136     4.58 %   $ 1,514,792     15.11 %

In response to COVID-19, the Company modified 3,054 loans in the amount of $1.515 billion during the second quarter of 2020.  These modifications were primarily short-term payment deferrals under six months.  During the third quarter of 2020, the majority of the modified loan deferral periods expired, and the loans returned to regular payment status.  During the current quarter, the re-deferral rate was 9.12 percent for modified loans whose original deferral period had expired, with no industry category exceeding 20 percent.  As of September 30, 2020, $466 million of the modifications, or 4.58 percent of the $10.170 billion of loans, net of the PPP loans, remain in the deferral period, a reduction of $1.049 billion from the $1.515 billion of loan modifications at the end of the prior quarter. 

In addition to the Bank loan modifications presented above, the state of Montana created the Montana Loan Deferment Program for only Montana-based businesses and was implemented only in the third quarter.  Cares Act Funds were used to provide interest payments upfront and directly to lenders on behalf of participating borrowers to convert existing commercial loans to interest only status, resulting in the deferral of principal and interest for a period of six to twelve months.  None of the interest payments are required to be repaid by the borrowers, thus providing a grant to the borrowers.  This program was unique to Montana, had minimal qualification requirements, and required that participating lenders modify eligible loans to conform to the program in order for borrowers to qualify for the grant.  As of September 30, 2020, the Company had $237 million in eligible loans benefiting from this grant program, which was 2.33 percent of total loans receivable, net of PPP loans. Given the unique nature of the Montana only grant program, the $237 million was not included in the Bank loan modifications presented above.

COVID-19 Higher Risk Industries - Enhanced Monitoring

  September 30, 2020   June 30, 2020
(Dollars in thousands) Enhanced Monitoring Loans Receivable, Net of PPP Loans   Percent of Total Loans Receivable, Net of PPP Loans   Amount of Unexpired Original
Loan Modifications
  Amount of
Re-deferral Loan Modifications
  Amount of
Remaining Loan
Modifications
  Loan Modifications (Amount) as a Percent of Enhanced Monitoring Loans Receivable, Net of PPP Loans   Amount of
Remaining Loan
Modifications
  Percent of Loans Receivable, Net of PPP Loans   Loan Modifications (Amount) as a Percent of Enhanced Monitoring Loans Receivable, Net of PPP Loans
Hotel and motel $ 422,500     4.15 %   44,091     6,679     50,770     12.02 %   $ 300,747     4.20 %   71.34 %
Restaurant 138,944     1.37 %   12,977     6,175     19,152     13.78 %   76,632     1.50 %   50.91 %
Travel and tourism 19,726     0.19 %   4,605     397     5,002     25.36 %   7,845     0.21 %   37.79 %
Gaming 14,500     0.14 %   1,101         1,101     7.59 %   9,214     0.15 %   60.95 %
Oil and gas 22,178     0.22 %   1,474         1,474     6.65 %   6,013     0.23 %   26.43 %
Total $ 617,848     6.08 %   64,248     13,251     77,499     12.54 %   $ 400,451     6.29 %   63.49 %


Excluding the PPP loans, the Company has $618 million, or 6 percent, of its total loan portfolio with direct exposure to industries for which it has identified as higher risk, requiring enhanced monitoring.  As of September 30, 2020, $77.5 million have modifications, which was a reduction of $323 million, or 81 percent,  from the $400 million of modifications at the end of the prior quarter.   During the current quarter the re-deferral rate was 3.94 percent for modified loans whose original deferral period had expired, with no industry category exceeding 15 percent.  The Company continues to conduct enhanced portfolio reviews and monitoring for potential credit deterioration.

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.

Liability Summary

                  $ Change from
(Dollars in thousands) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
Deposits                          
Non-interest bearing deposits $ 5,479,311     5,043,704     3,696,627     3,772,766     435,607       1,782,684       1,706,545    
NOW and DDA accounts 3,300,152     3,113,863     2,645,404     2,592,483     186,289       654,748       707,669    
Savings accounts 1,864,143     1,756,503     1,485,487     1,472,465     107,640       378,656       391,678    
Money market deposit accounts 2,557,294     2,403,641     1,937,141     1,940,517     153,653       620,153       616,777    
Certificate accounts 979,857     995,536     958,501     955,765     (15,679 )     21,356       24,092    
Core deposits, total 14,180,757     13,313,247     10,723,160     10,733,996     867,510       3,457,597       3,446,761    
Wholesale deposits 119,131     68,285     53,297     134,629     50,846       65,834       (15,498 )  
Deposits, total 14,299,888     13,381,532     10,776,457     10,868,625     918,356       3,523,431       3,431,263    
Repurchase agreements 965,668     881,227     569,824     558,752     84,441       395,844       406,916    
Federal Home Loan Bank advances 7,318     37,963     38,611     8,707     (30,645 )     (31,293 )     (1,389 )  
Other borrowed funds 32,967     32,546     28,820     14,808     421       4,147       18,159    
Subordinated debentures 139,918     139,917     139,914     139,913     1       4       5    
Other liabilities 225,219     229,748     169,640     174,586     (4,529 )     55,579       50,633    
Total liabilities $ 15,670,978     14,702,933     11,723,266     11,765,391     968,045       3,947,712       3,905,587    

Core deposits of $14.181 billion as of September 30, 2020 increased $868 million, or 7 percent, from the prior quarter.  Excluding the SBAZ acquisition, core deposits increased $2.843 billion, or 26 percent, from the prior year third quarter, with non-interest bearing deposits increasing $1.565 billion, or 41 percent.  The current year significant increase in deposits was attributable to a number of factors including the PPP loan proceeds deposited by customers and the increase in customer savings rate.  Non-interest bearing deposits were 39 percent of total core deposits at September 30, 2020 compared to 35 percent of total core deposits at September 30, 2019.

Federal Home Loan Bank (“FHLB”) advances of $7.3 million at September 30, 2020 decreased $31 million from the prior quarter and decreased $1.4 million from the prior year third quarter.  The low level of FHLB advances was the result of the significant increase in core deposits which funded loans and debt security growth.  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) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
Common equity $ 2,123,991       2,073,806       1,920,507       1,905,306       50,185     203,484       218,685    
Accumulated other comprehensive income 131,098       129,909       40,226       48,095       1,189     90,872       83,003    
Total stockholders’ equity 2,255,089       2,203,715       1,960,733       1,953,401       51,374     294,356       301,688    
Goodwill and core deposit intangible, net (572,134 )     (574,088 )     (519,704 )     (522,274 )     1,954     (52,430 )     (49,860 )  
Tangible stockholders’ equity $ 1,682,955       1,629,627       1,441,029       1,431,127       53,328     241,926       251,828    


Stockholders’ equity to total assets 12.58 %   13.03 %   14.33 %   14.24 %            
Tangible stockholders’ equity to total tangible assets 9.70 %   9.98 %   10.95 %   10.84 %            
Book value per common share $ 23.63     23.10     21.25     21.19     0.53     2.38     2.44  
Tangible book value per common share $ 17.64     17.08     15.61     15.53     0.56     2.03     2.11  

Tangible stockholders’ equity of $1.683 billion at September 30, 2020 increased $53 million, or 3 percent, from the prior quarter and was primarily the result of earnings retention.  Tangible stockholders’ equity increased $252 million over the prior year third quarter, which was the result of $112 million of Company stock issued for the acquisitions of SBAZ and an increase in other comprehensive income and earnings retention.  These increases more than offset the increase in goodwill and core deposit intangible associated with the acquisition.  The current year decrease in both the stockholder’s equity to total assets ratio and the tangible stockholders’ equity to total tangible assets ratio was primarily the result of adding $1.448 billion of PPP loans.  Tangible book value per common share of $17.64 at the current quarter end increased $0.56 per share from the prior quarter and increased $2.11 per share from a year ago.

Cash Dividends
On September 30, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share.  The dividend was payable October 22, 2020 to shareholders of record on October 13, 2020. The dividend was the 142nd consecutive dividend.  Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations. 

S&P MidMidCap 400 Index

During the second quarter of 2020, S&P Dow Jones Indices selected the Company to transition from the S&P SmallCap 600 to the S&P MidCap 400. S&P MidCap 400 index consists of 400 companies that are chosen with regard to market capitalization, liquidity and industry representations.


Operating Results for Three Months Ended September 30, 2020 
Compared to June 30, 2020 and March 31, 2020

Income Summary

  Three Months ended   $ Change from
(Dollars in thousands) Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
  Sep 30,
2019
  Jun 30,
2020
  Mar 31,
2020
  Sep 30,
2019
Net interest income                          
Interest income $ 157,487     155,404     142,865     142,395     2,083       14,622       15,092    
Interest expense 6,084     7,185     8,496     10,947     (1,101 )     (2,412 )     (4,863 )  
Total net interest income 151,403     148,219     134,369     131,448     3,184       17,034       19,955    
Non-interest income                          
Service charges and other fees 13,404     11,366     14,020     15,138     2,038       (616 )     (1,734 )  
Miscellaneous loan fees and charges 2,084     1,682     1,285     1,775     402       799       309    
Gain on sale of loans 35,516     25,858     11,862     10,369     9,658       23,654       25,147    
Gain on sale of investments 24     128     863     13,811     (104 )     (839 )     (13,787 )  
Other income 2,639     2,190     5,242     1,956     449       (2,603 )     683    
Total non-interest income 53,667     41,224     33,272     43,049     12,443       20,395       10,618    
Total income 205,070     189,443     167,641     174,497     15,627       37,429       30,573    
Net interest margin (tax-equivalent) 3.92 %   4.12 %   4.36 %   4.42 %            

Net Interest Income
The current quarter net interest income of $151 million increased $3.2 million, or 2 percent, over the prior quarter and increased $20.0 million, or 15 percent, from the prior year third quarter.  The current quarter interest income of $157 million increased $2.1 million, or 1 percent, compared to the prior quarter which was driven by an increase in income from commercial loans primarily from the PPP loans.  The current quarter interest income increased $15.1 million, or 11 percent, over prior year third quarter and was due to an increase in income from commercial loans and an increase in income on debt securities.  Included in interest income was interest from the PPP loans of $9.3 million in the current quarter and $7.3 million in the prior quarter.  

The current quarter interest expense of $6.1 million decreased $1.1 million, or 15 percent, over the prior quarter primarily as result of a decrease in deposit rates and borrowing interest rates.  Current quarter interest expense decreased $4.9 million, or 44 percent, over prior year third quarter which was due to the decrease in higher cost borrowings and a decrease in deposit rates.  During the current quarter, the total cost of funding (including non-interest bearing deposits) declined 5 basis points to 16 basis points compared to 21 basis points for the prior quarter primarily as a result of a decrease in rates on both deposits and borrowings.  The total cost of funding decreased 23 basis points from the prior year third quarter and was attributable to a decrease in rates and a shift from higher cost borrowings to low cost deposits.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.92 percent compared to 4.12 percent in the prior quarter.  The core net interest margin, excluding  2 basis points of discount accretion, 1 basis point of non-accrual interest, and 13 basis points of income from the PPP loans, was 4.02 percent compared to 4.21 in the prior quarter and 4.35 percent in the prior year third quarter.  The Company experienced a 19 basis points decrease in the core net interest margin during the current quarter from decreased yields on loans and debt securities which were partially offset by the decrease in the cost of funding.  The core net interest margin decreased 33 basis points from the prior year third quarter primarily from a decrease in earning asset yields, primarily loan yields, that outpaced the decrease in the total cost of funding.  “The Bank divisions’ reduction in the cost of interest bearing deposits and repurchase agreements while increasing non-interest bearing deposits enabled the total cost of funding to decline by 5 basis points in the current quarter,” said Ron Copher, Chief Financial Officer.

Non-interest Income
Non-interest income for the current quarter totaled $53.7 million which was an increase of $12.4 million, or 30 percent, over the prior quarter and an increase of $10.6 million, or 25 percent, over the same quarter last year.  Service charges and other fees of $13.4 million for the current quarter increased $2.0 million, or 18 percent, from the prior quarter.  Service charges and other fees decreased $1.7 million from the prior year third quarter due to the decreased overdraft activity.  Gain on the sale of loans of $35.5 million for the current quarter increased $9.7 million, or 37 percent, compared to the prior quarter and increased $25.1 million, or 242 percent, from the prior year third quarter due to the significant increase in refinance activity driven by the decrease in interest rates. 

During the prior year third quarter, the Company terminated $260 million notional pay-fixed interest rate swaps and corresponding debt along with the sale of $308 million of available-for-sale debt securities.  Sale of the investment securities resulted in a gain of $13.8 million in the prior year third quarter.  Offsetting the gain was a $10 million loss recognized on the early termination of the interest swaps and a $3.5 million write-off of deferred prepayment penalties on FHLB borrowings. 

Non-interest Expense Summary

  Three Months ended   $ Change from
(Dollars in thousands) Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
  Sep 30,
2019
  Jun 30,
2020
  Mar 31,
2020
  Sep 30,
2019
Compensation and employee benefits $ 64,866     57,981     59,660     62,509     6,885       5,206     2,357    
Occupancy and equipment 9,369     9,357     9,219     8,731     12       150     638    
Advertising and promotions 2,779     2,138     2,487     2,719     641       292     60    
Data processing 5,597     5,042     5,282     4,466     555       315     1,131    
Other real estate owned 186     75     112     166     111       74     20    
Regulatory assessments and insurance 1,495     1,037     1,090     593     458       405     902    
Loss on termination of hedging activities             13,528               (13,528 )  
Core deposit intangibles amortization 2,612     2,613     2,533     2,360     (1 )     79     252    
Other expenses 18,786     19,898     11,545     15,603     (1,112 )     7,241     3,183    
Total non-interest expense $ 105,690     98,141     91,928     110,675     7,549       13,762     (4,985 )  

Total non-interest expense of $106 million for the current quarter increased $7.5 million, or 8 percent, over the prior quarter and decreased $5.0 million, or 5 percent, over the prior year third quarter.  Compensation and employee benefits increased by $6.9 million, or 12 percent, from the prior quarter which was primarily driven by the decrease in deferring compensation on originating the PPP loans which was $438 thousand in the current quarter compared to $8.4 million in the prior quarter.  Compensation and employee benefits increased $2.4 million, or 4 percent, from the prior year third quarter primarily due to an increased number of employees driven by acquisitions and organic growth which more than offset the decrease from the $5.4 million of stock compensation expense in the prior year third quarter related to the Heritage Bancorp acquisition.  Occupancy and equipment expense increased $638 thousand, or 7 percent, over the prior year third quarter primarily as a result of increased costs from acquisitions.  Data processing expense increased $555 thousand, or 11 percent, over the prior quarter and increased $1.1 million, or 25 percent over the prior year third quarter as a result of the increased cost from acquisitions along with increased investment in technology infrastructure.  Regulatory assessment and insurance increased $458 thousand from the prior quarter primarily due to an accrual adjustment in the prior quarter for waiver of the State of Montana regulatory semi-annual assessment for the first half of 2020.  Regulatory assessment and insurance increased $902 thousand from the prior year third quarter quarter primarily due to $1.3 million in Small Bank Assessment credits applied in the prior year third quarter.  The prior year loss on termination of hedging activities included $3.5 million write-off of the remaining unamortized deferred prepayment penalties on FHLB debt and a $10 million loss on the termination of pay-fixed interest rate swaps with notional amount of $260 million in the prior year third quarter. 

Other expenses of $18.8 million, decreased $1.1 million, or 6 percent, from the prior quarter primarily due to a decrease in acquisition-related expenses.  Other expenses increased $3.2 million, or 20 percent, over the prior year third quarter and was driven primarily from an increase in expense related to unfunded loan commitments.  Current quarter other expenses included acquisition-related expenses of $793 thousand compared to $3.7 million in the prior quarter and $2.1 million in the prior year third quarter.  Expense related to unfunded loan commitments was $2.3 million in the current quarter compared to $3.4 million in the prior quarter and no expense in the prior year third quarter.  Also included in the current quarter other expenses was $1.9 million for third party consulting regarding improvements in technology, product and service offerings. 

Federal and State Income Tax Expense
Tax expense during the third quarter of 2020 was $18.8 million, an increase of $4.5 million, or 31 percent, compared to the prior quarter and an increase of $6.5 million, or 54 percent, from the prior year third quarter.  The effective tax rate in the current quarter was 19 percent compared to 18 percent in the prior quarter and  19 percent prior year third quarter.

Efficiency Ratio
The efficiency ratio was 49.16 percent in the current quarter and 49.29 percent in the prior quarter.  Excluding the impact from the PPP loans, the efficiency ratio would have been 51.67 percent in the current quarter, which was a 406 basis points decrease from the prior quarter efficiency ratio of 55.73 percent and was primarily due to the increase in gain on sale of loans.  The prior year third quarter efficiency was 65.95 and excluding the impact from the termination of the cash flow hedges and the accelerated stock compensation expense, the efficiency ratio would have been 54.41 percent.  Excluding these adjustments, the current quarter efficiency ratio decreased 274 basis points from the prior year third quarter efficiency ratio which was also driven by the increased gain on sale of loans.


Operating Results for Nine Months Ended September 30, 2020
Compared to September 30, 2019

Income Summary

  Nine Months ended        
(Dollars in thousands) Sep 30,
2020
  Sep 30,
2019
  $ Change   % Change
Net interest income              
Interest income $ 455,756     $ 400,896     $ 54,860       14   %
Interest expense 21,765     33,940     (12,175 )     (36 ) %
Total net interest income 433,991     366,956     67,035       18   %
Non-interest income              
Service charges and other fees 38,790     53,178     (14,388 )     (27 ) %
Miscellaneous loan fees and charges 5,051     3,934     1,117       28   %
Gain on sale of loans 73,236     23,929     49,307       206   %
Gain on sale of investments 1,015     14,158     (13,143 )     (93 ) %
Other income 10,071     7,158     2,913       41   %
Total non-interest income 128,163     102,357     25,806       25   %
  $ 562,154     $ 469,313     $ 92,841       20   %
Net interest margin (tax-equivalent) 4.12 %   4.36 %        

Net Interest Income
Net-interest income of $434 million for the first nine months of 2020 increased $67.0 million, or 18 percent, over the first nine months of 2019.  Interest income of $456 million for the first nine months of 2020 increased $54.9 million, or 14 percent, from the first nine months of 2019 and was primarily attributable to a $45.7 million increase in income from commercial loans, including $16.6 million from the PPP loans.  Interest expense of $21.8 million for the first nine months of 2020 decreased $12.2 million, or 36 percent over the prior year same period primarily as a result of decreased higher cost FHLB advances and the decrease in the cost of deposits and borrowings.  The total funding cost (including non-interest bearing deposits) for the first nine months of 2020 was 22 basis points, which decreased 20 basis points, or 48 percent, compared to 42 basis points for the first nine months of 2019.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first nine months of 2020 was 4.12 percent, a 24 basis points decrease from the net interest margin of 4.36 percent for the first nine months of 2019.  The core net interest margin, excluding 3 basis points of discount accretion, 1 basis point of non-accrual interest, and 9 basis points of income from the PPP loans was 4.17 compared to a core margin of 4.29 percent in the prior year first nine months.  Although the Company was successful in reducing the cost of funding, it was not enough to outpace the decrease in yields on loans and debt securities driven by the current interest rate environment.

Non-interest Income
Non-interest income of $128 million for the first nine months of 2020 increased $25.8 million, or 25 percent, over the same period last year.  Service charges and other fees of $38.8 million for 2020 year-to-date decreased $14.4 million, or 27 percent, from the same period prior year as a result of a decrease in overdraft activity and the impact 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 $73.2 million for the first nine months of 2020, increased $49.3 million, or 206 percent, compared to the prior year as a result significant increase in refinance activity driven by the decrease in interest rates.  Other income increased $2.9 million from the prior year and was primarily the result of a gain of $2.4 million on the sale of a former branch building in the first quarter of 2020.

Non-interest Expense Summary

  Nine Months ended        
(Dollars in thousands) Sep 30,
2020
  Sep 30,
2019
  $ Change   % Change
Compensation and employee benefits $ 182,507     $ 167,210     $ 15,297       9   %
Occupancy and equipment 27,945     25,348     2,597       10   %
Advertising and promotions 7,404     7,874     (470 )     (6 ) %
Data processing 15,921     12,420     3,501       28   %
Other real estate owned 373     496     (123 )     (25 ) %
Regulatory assessments and insurance 3,622     3,726     (104 )     (3 ) %
Loss on termination of hedging activities     13,528     (13,528 )     (100 ) %
Core deposit intangibles amortization 7,758     5,919     1,839       31   %
Other expenses 50,229     43,154     7,075       16   %
Total non-interest expense $ 295,759     $ 279,675     $ 16,084       6   %

Total non-interest expense of $296 million for the first nine months of 2020 increased $16.1 million, or 6 percent, over the prior year same period.  Compensation and employee benefits for the first nine months of 2020 increased $15.3 million, or 9 percent, from the same period last year due to the increased number of employees from acquisitions and organic growth and annual salary increases which more than offset the $8.9 million deferral of compensation cost from the PPP loans in the current year and the $5.4 million of stock compensation expense in the prior year from the Heritage Bancorp acquisition.  Occupancy and equipment expense for the first nine months of 2020 increased $2.6 million, or 10 percent from the prior year primarily from increased cost from acquisitions.  Data processing expense for the first nine months of 2020 increased $3.5 million, or 28 percent, from the prior year as a result of the increased costs from acquisitions along with increased investment in technology infrastructure.  Other expenses of $50.2 million, increased $7.1 million, or 16 percent, from the prior year and was primarily driven by an increase in expense related to unfunded loan commitments and an increase in acquisition-related expenses.  Acquisition-related expenses were $7.3 million in the current year first nine months compared to $4.1 million in the prior year first nine months.  In the current year-to-date period, there was $2.1 million of expense related to unfunded loan commitments which was primarily attributable to the economic forecast related to COVID-19.  

Credit Loss Expense
The credit loss expense was $39.2 million for the first nine months of 2020, an increase of $39.1 million from the same period in the prior year, this increase was primarily attributable to changes in the economic forecast related to COVID-19.  Net charge-offs during the first nine months of 2020 were $2.9 million compared to $5.8 million during the same period in 2019.

Federal and State Income Tax Expense
Tax expense of $42.7 million in the first nine months of 2020 increased $6.2 million, or 17 percent, over the prior year same period.  The effective tax rate year-to-date in 2020 and 2019 was 19 percent.

Efficiency Ratio
The efficiency ratio was 50.21 percent for the first nine months of 2020.  Excluding the impact from the PPP loans, the efficiency ratio would have been 53.30 percent.  The prior year first nine months efficiency ratio was 58.82 and excluding the impact from the termination of the cash flow hedges and the accelerated stock compensation expense, the efficiency ratio would have been 54.74 percent.  Excluding these adjustments, the current year efficiency ratio decreased 144 basis points from the prior year efficiency ratio which was driven by the increased gain on sale of loans and increase in net interest income that more than offset the decrease in service fee income from the Durbin Amendment and increases in compensation expense.

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, October 23, 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 1497135. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/or6wd4fi. 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 1497135 by November 6, 2020.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. (NASDAQ:GBCI), a member of the Russell 2000 and the S&P MidCap 400 indices, 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) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
Assets              
Cash on hand and in banks $ 249,245       212,681       198,639       233,623    
Federal funds sold 590                      
Interest bearing cash deposits 520,044       334,929       132,322       172,761    
Cash and cash equivalents 769,879       547,610       330,961       406,384    
Debt securities, available-for-sale 4,125,548       3,533,950       2,575,252       2,459,036    
Debt securities, held-to-maturity 193,509       203,275       224,611       234,992    
Total debt securities 4,319,057       3,737,225       2,799,863       2,694,028    
Loans held for sale, at fair value 147,937       115,345       69,194       100,441    
Loans receivable 11,618,731       11,453,378       9,512,810       9,541,088    
Allowance for credit losses (164,552 )     (162,509 )     (124,490 )     (125,535 )  
Loans receivable, net 11,454,179       11,290,869       9,388,320       9,415,553    
Premises and equipment, net 326,925       326,005       310,309       307,590    
Other real estate owned 5,361       4,743       5,142       7,148    
Accrued interest receivable 91,393       77,363       56,047       63,294    
Deferred tax asset             2,037          
Core deposit intangible, net 58,121       60,733       63,286       65,852    
Goodwill 514,013       513,355       456,418       456,422    
Non-marketable equity securities 10,366       11,592       11,623       10,427    
Bank-owned life insurance 123,095       122,388       109,428       108,814    
Other assets 105,741       99,420       81,371       82,839    
Total assets $ 17,926,067       16,906,648       13,683,999       13,718,792    
Liabilities              
Non-interest bearing deposits $ 5,479,311       5,043,704       3,696,627       3,772,766    
Interest bearing deposits 8,820,577       8,337,828       7,079,830       7,095,859    
Securities sold under agreements to repurchase 965,668       881,227       569,824       558,752    
FHLB advances 7,318       37,963       38,611       8,707    
Other borrowed funds 32,967       32,546       28,820       14,808    
Subordinated debentures 139,918       139,917       139,914       139,913    
Accrued interest payable 3,951       4,211       4,686       4,435    
Deferred tax liability 17,227       25,213              
Other liabilities 204,041       200,324       164,954       170,151    
Total liabilities 15,670,978       14,702,933       11,723,266       11,765,391    
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       954       923       922    
Paid-in capital 1,493,928       1,492,817       1,378,534       1,375,785    
Retained earnings - substantially restricted 629,109       580,035       541,050       528,599    
Accumulated other comprehensive income 131,098       129,909       40,226       48,095    
Total stockholders’ equity 2,255,089       2,203,715       1,960,733       1,953,401    
Total liabilities and stockholders’ equity $ 17,926,067       16,906,648       13,683,999       13,718,792    




Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

  Three Months ended   Nine Months ended
(Dollars in thousands, except per share data) Sep 30,
2020
  Jun 30,
2020
  Mar 31,
2020
  Sep 30,
2019
  Sep 30,
2020
  Sep 30,
2019
Interest Income                      
Debt securities $ 25,381     25,833     21,014     21,357     72,228     64,600  
Residential real estate loans 11,592     12,098     11,526     12,156     35,216     34,345  
Commercial loans 109,514     106,343     98,684     97,224     314,541     268,806  
Consumer and other loans 11,000     11,130     11,641     11,658     33,771     33,145  
Total interest income 157,487     155,404     142,865     142,395     455,756     400,896  
Interest Expense                      
Deposits 3,952     4,587     5,581     6,214     14,120     17,179  
Securities sold under agreements to repurchase 886     908     989     999     2,783     2,687  
Federal Home Loan Bank advances 70     268     346     2,035     684     8,937  
Other borrowed funds 173     172     128     47     473     123  
Subordinated debentures 1,003     1,250     1,452     1,652     3,705     5,014  
Total interest expense 6,084     7,185     8,496     10,947     21,765     33,940  
Net Interest Income 151,403     148,219     134,369     131,448     433,991     366,956  
Credit loss expense 2,869     13,552     22,744         39,165     57  
Net interest income after credit loss expense 148,534     134,667     111,625     131,448     394,826     366,899  
Non-Interest Income                      
Service charges and other fees 13,404     11,366     14,020     15,138     38,790     53,178  
Miscellaneous loan fees and charges 2,084     1,682     1,285     1,775     5,051     3,934  
Gain on sale of loans 35,516     25,858     11,862     10,369     73,236     23,929  
Gain on sale of debt securities 24     128     863     13,811     1,015     14,158  
Other income 2,639     2,190     5,242     1,956     10,071     7,158  
Total non-interest income 53,667     41,224     33,272     43,049     128,163     102,357  
Non-Interest Expense                      
Compensation and employee benefits 64,866     57,981     59,660     62,509     182,507     167,210  
Occupancy and equipment 9,369     9,357     9,219     8,731     27,945     25,348  
Advertising and promotions 2,779     2,138     2,487     2,719     7,404     7,874  
Data processing 5,597     5,042     5,282     4,466     15,921     12,420  
Other real estate owned 186     75     112     166     373     496  
Regulatory assessments and insurance 1,495     1,037     1,090     593     3,622     3,726  
Loss on termination of hedging activities             13,528         13,528  
Core deposit intangibles amortization 2,612     2,613     2,533     2,360     7,758     5,919  
Other expenses 18,786     19,898     11,545     15,603     50,229     43,154  
Total non-interest expense 105,690     98,141     91,928     110,675     295,759     279,675  
Income Before Income Taxes 96,511     77,750     52,969     63,822     227,230     189,581  
Federal and state income tax expense 18,754     14,306     9,630     12,212     42,690     36,447  
Net Income $ 77,757     63,444     43,339     51,610     184,540     153,134  




Glacier Bancorp, Inc.
Average Balance Sheets

  Three Months ended
  September 30, 2020   June 30, 2020
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 1,010,503     $ 11,592     4.59 %   $ 1,048,095     $ 12,098     4.62 %
Commercial loans 1 9,636,631     110,847     4.58 %   9,235,881     107,632     4.69 %
Consumer and other loans 957,284     11,000     4.57 %   957,798     11,130     4.67 %
Total loans 2 11,604,418     133,439     4.57 %   11,241,774     130,860     4.68 %
Tax-exempt investment securities 2 1,379,577     13,885     4.03 %   1,401,603     14,248     4.07 %
Taxable investment securities 4 2,809,545     14,568     2.07 %   2,266,707     14,730     2.60 %
Total earning assets 15,793,540     161,892     4.08 %   14,910,084     159,838     4.31 %
Goodwill and intangibles 572,759             575,296          
Non-earning assets 794,165             797,403          
Total assets $ 17,160,464             $ 16,282,783          
Liabilities                      
Non-interest bearing deposits $ 5,171,984     $     %   $ 4,733,485     $     %
NOW and DDA accounts 3,218,536     642     0.08 %   3,018,706     687     0.09 %
Savings accounts 1,804,438     166     0.04 %   1,687,448     175     0.04 %
Money market deposit accounts 2,453,659     1,161     0.19 %   2,300,787     1,240     0.22 %
Certificate accounts 981,385     1,936     0.78 %   1,013,188     2,408     0.96 %
Total core deposits 13,630,002     3,905     0.11 %   12,753,614     4,510     0.14 %
Wholesale deposits 5 86,852     47     0.22 %   68,503     77     0.46 %
FHLB advances 21,273     70     1.30 %   182,061     268     0.58 %
Repurchase agreements and other borrowed funds 1,049,002     2,062     0.78 %   913,744     2,330     1.03 %
Total funding liabilities 14,787,129     6,084     0.16 %   13,917,922     7,185     0.21 %
Other liabilities 120,294             180,935          
Total liabilities 14,907,423             14,098,857          
Stockholders’ Equity                      
Common stock 954             954          
Paid-in capital 1,493,353             1,492,230          
Retained earnings 622,099             575,455          
Accumulated other comprehensive income 136,635             115,287          
Total stockholders’ equity 2,253,041             2,183,926          
Total liabilities and stockholders’ equity $ 17,160,464             $ 16,282,783          
Net interest income (tax-equivalent)     $ 155,808             $ 152,653      
Net interest spread (tax-equivalent)         3.92 %           4.10 %
Net interest margin (tax-equivalent)         3.92 %           4.12 %

______________________________
Includes tax effect of $1.3 million and $1.3 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2020 and June 30, 2020, 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 $2.8 million and $2.9 million on tax-exempt debt securities income for the three months ended September 30, 2020 and June 30, 2020, respectively.
4  Includes tax effect of $266 thousand and $266 thousand on federal income tax credits for the three months ended September 30, 2020 and June 30, 2020, respectively.
5  Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.


Glacier Bancorp, Inc.
Average Balance Sheets (continued)

  Three Months ended
  September 30, 2020   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 $ 1,010,503     $ 11,592     4.59 %   $ 994,906     $ 12,156     4.89 %
Commercial loans 1 9,636,631     110,847     4.58 %   7,378,337     98,465     5.29 %
Consumer and other loans 957,284     11,000     4.57 %   906,148     11,658     5.10 %
Total loans 2 11,604,418     133,439     4.57 %   9,279,391     122,279     5.23 %
Tax-exempt debt securities 3 1,379,577     13,885     4.03 %   899,914     9,280     4.13 %
Taxable debt securities 4 2,809,545     14,568     2.07 %   1,917,045     14,250     2.97 %
Total earning assets 15,793,540     161,892     4.08 %   12,096,350     145,809     4.78 %
Goodwill and intangibles 572,759             429,191          
Non-earning assets 794,165             672,550          
Total assets $ 17,160,464             $ 13,198,091          
Liabilities                      
Non-interest bearing deposits $ 5,171,984     $     %   $ 3,513,908     $     %
NOW and DDA accounts 3,218,536     642     0.08 %   2,473,375     1,091     0.17 %
Savings accounts 1,804,438     166     0.04 %   1,445,323     270     0.07 %
Money market deposit accounts 2,453,659     1,161     0.19 %   1,845,184     1,540     0.33 %
Certificate accounts 981,385     1,936     0.78 %   929,441     2,412     1.03 %
Total core deposits 13,630,002     3,905     0.11 %   10,207,231     5,313     0.21 %
Wholesale deposits 5 86,852     47     0.22 %   146,339     901     2.44 %
FHLB advances 21,273     70     1.30 %   222,449     2,035     3.58 %
Repurchase agreements and other borrowed funds 1,049,002     2,062     0.78 %   645,426     2,698     1.66 %
Total funding liabilities 14,787,129     6,084     0.16 %   11,221,445     10,947     0.39 %
Other liabilities 120,294             101,806          
Total liabilities 14,907,423             11,323,251          
Stockholders’ Equity                      
Common stock 954             903          
Paid-in capital 1,493,353             1,292,182          
Retained earnings 622,099             531,181          
Accumulated other comprehensive    income 136,635             50,574          
Total stockholders’ equity 2,253,041             1,874,840          
Total liabilities and stockholders’ equity $ 17,160,464             $ 13,198,091          
Net interest income (tax-equivalent)     $ 155,808             $ 134,862      
Net interest spread (tax-equivalent)         3.92 %           4.39 %
Net interest margin (tax-equivalent)         3.92 %           4.42 %

______________________________
Includes tax effect of $1.3 million and $1.2 million on tax-exempt municipal loan and lease income for the three months ended September 30, 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 $2.8 million and $1.9 million on tax-exempt debt securities income for the three months ended September 30, 2020 and 2019, respectively.
4  Includes tax effect of $266 thousand and $275 thousand on federal income tax credits for the three months ended September 30, 2020 and 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)

  Nine Months ended
  September 30, 2020   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 $ 1,013,072     $ 35,216     4.63 %   $ 950,516     $ 34,345     4.82 %
Commercial loans 1 8,896,708     318,435     4.78 %   6,905,151     272,269     5.27 %
Consumer and other loans 947,372     33,771     4.76 %   871,544     33,145     5.08 %
Total loans 2 10,857,152     387,422     4.77 %   8,727,211     339,759     5.21 %
Tax-exempt debt securities 3 1,237,779     37,542     4.04 %   938,998     29,212     4.15 %
Taxable debt securities 4 2,380,184     43,070     2.41 %   1,891,560     42,225     2.98 %
Total earning assets 14,475,115     468,034     4.32 %   11,557,769     411,196     4.76 %
Goodwill and intangibles 562,533             373,207          
Non-earning assets 760,758             593,011          
Total assets $ 15,798,406             $ 12,523,987          
Liabilities                      
Non-interest bearing deposits $ 4,528,500     $     %   $ 3,182,783     $     %
NOW and DDA accounts 2,971,702     2,244     0.10 %   2,396,828     3,037     0.17 %
Savings accounts 1,670,722     580     0.05 %   1,398,539     757     0.07 %
Money market deposit accounts 2,262,781     4,025     0.24 %   1,733,245     3,675     0.28 %
Certificate accounts 986,807     6,940     0.94 %   912,283     6,648     0.97 %
Total core deposits 12,420,512     13,789     0.15 %   9,623,678     14,117     0.20 %
Wholesale deposits 5 70,880     332     0.63 %   159,314     3,062     2.57 %
FHLB advances 103,700     684     0.87 %   349,998     8,937     3.37 %
Repurchase agreements and other borrowed funds 892,418     6,960     1.04 %   598,907     7,824     1.75 %
Total funding liabilities 13,487,510     21,765     0.22 %   10,731,897     33,940     0.42 %
Other liabilities 149,423             109,090          
Total liabilities 13,636,933             10,840,987          
Stockholders’ Equity                      
Common stock 947             870          
Paid-in capital 1,467,623             1,152,076          
Retained earnings 586,963             501,158          
Accumulated other comprehensive income 105,940             28,896          
Total stockholders’ equity 2,161,473             1,683,000          
Total liabilities and stockholders’ equity $ 15,798,406             $ 12,523,987          
Net interest income (tax-equivalent)     $ 446,269             $ 377,256      
Net interest spread (tax-equivalent)         4.10 %           4.34 %
Net interest margin (tax-equivalent)         4.12 %           4.36 %

______________________________
Includes tax effect of $3.9 million and $3.5 million on tax-exempt municipal loan and lease income for the six months ended September 30, 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 $7.6 million and $6.0 million on tax-exempt debt securities income for the six months ended September 30, 2020 and 2019, respectively.
4  Includes tax effect of $798 thousand and $863 thousand on federal income tax credits for the six months ended September 30, 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) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
Custom and owner occupied construction $ 166,195       $ 177,172       $ 143,479       $ 147,626       (6 ) %   16   %   13   %
Pre-sold and spec construction 157,242       161,964       180,539       207,596       (3 ) %   (13 ) %   (24 ) %
Total residential construction 323,437       339,136       324,018       355,222       (5 ) %     %   (9 ) %
Land development 96,814       94,667       101,592       103,090       2   %   (5 ) %   (6 ) %
Consumer land or lots 122,019       120,015       125,759       128,668       2   %   (3 ) %   (5 ) %
Unimproved land 64,770       63,459       62,563       71,467       2   %   4   %   (9 ) %
Developed lots for operative builders 30,871       26,647       17,390       13,782       16   %   78   %   124   %
Commercial lots 62,445       60,563       46,408       64,904       3   %   35   %   (4 ) %
Other construction 537,105       477,922       478,368       443,947       12   %   12   %   21   %
Total land, lot, and other construction 914,024       843,273       832,080       825,858       8   %   10   %   11   %
Owner occupied 1,889,512       1,855,994       1,667,526       1,666,211       2   %   13   %   13   %
Non-owner occupied 2,259,062       2,238,586       2,017,375       2,023,262       1   %   12   %   12   %
Total commercial real estate 4,148,574       4,094,580       3,684,901       3,689,473       1   %   13   %   12   %
Commercial and industrial 2,308,710       2,342,081       991,580       1,009,310       (1 ) %   133   %   129   %
Agriculture 747,145       714,227       701,363       718,255       5   %   7   %   4   %
1st lien 1,256,111       1,227,514       1,186,889       1,208,096       2   %   6   %   4   %
Junior lien 43,355       47,121       53,571       53,931       (8 ) %   (19 ) %   (20 ) %
Total 1-4 family 1,299,466       1,274,635       1,240,460       1,262,027       2   %   5   %   3   %
Multifamily residential 359,030       343,870       342,498       350,622       4   %   5   %   2   %
Home equity lines of credit 651,546       655,492       617,900       612,775       (1 ) %   5   %   6   %
Other consumer 191,761       181,402       174,643       171,633       6   %   10   %   12   %
Total consumer 843,307       836,894       792,543       784,408       1   %   6   %   8   %
States and political subdivisions 617,624       581,673       533,023       471,599       6   %   16   %   31   %
Other 205,351       198,354       139,538       174,755       4   %   47   %   18   %
Total loans receivable, including
  loans held for sale
11,766,668       11,568,723       9,582,004       9,641,529       2   %   23   %   22   %
Less loans held for sale 1 (147,937 )     (115,345 )     (69,194 )     (100,441 )     28    %   114    %   47    %
Total loans receivable $ 11,618,731       $ 11,453,378       $ 9,512,810       $ 9,541,088       1   %   22   %   22   %

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




Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification

 
Non-performing Assets, by Loan Type
  Non-
Accrual
Loans
  Accruing
Loans 90
Days
or More Past
Due
  Other
Real Estate
Owned
(Dollars in thousands) Sep 30,
2020
  Jun 30,
2020
  Dec 31,
2019
  Sep 30,
2019
  Sep 30,
2020
  Sep 30,
2020
  Sep 30,
2020
Custom and owner occupied construction $ 249     440     185     283     249          
Pre-sold and spec construction         743     1,219              
Total residential construction 249     440     928     1,502     249          
Land development 450     659     852     1,006     202         248  
Consumer land or lots 223     427     330