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Glacier Bancorp, Inc. Announces Results for the Quarter Ended March 31, 2018

2018-04-19 16:30 ET - News Release

1st Quarter 2018 Highlights:

  • Net income of $38.6 million for the current quarter, an increase of $7.3 million, or 23 percent, over the prior year first quarter net income of $31.3 million.  Pre-tax income of $47.0 million for the current quarter, an increase of $5.9 million, or 15 percent, over the prior year first quarter pre-tax income of $41.0 million
  • Current quarter diluted earnings per share of $0.48, an increase of 17 percent from the prior year first quarter diluted earnings per share of $0.41.
  • Current quarter organic loan growth of $110.2 million, or 7 percent annualized.
  • Current quarter organic deposit growth of $144 million, or 8 percent annualized, with 20 percent of the increase in non-interest bearing deposits.
  • Dividend declared of $0.23 per share, an increase of $0.02 per share, or 10 percent, over the prior quarter.   The dividend was the 132nd consecutive quarterly dividend.
  • The Company completed the acquisition of Columbine Capital Corp., the holding company for Collegiate Peaks Bank, a community bank in Buena Vista, Colorado, with total assets of $551 million.
  • The Company completed the acquisition of Inter-Mountain Bancorp, Inc., the holding company for First Security Bank, a community bank in Bozeman, Montana, with total assets of $1.110 billion.
  • The Company surpassed $10 billion in total assets ending the quarter at $11.659 billion, an increase of $1.952 billion, or 20 percent, from the prior quarter.

In addition to the results presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this press release contains certain non-GAAP financial measures.  The Company believes that providing these non-GAAP financial measures provides investors with information useful in understanding the Company's financial performance, performance trends, and financial position.  While the Company uses these non-GAAP measures in its analysis of the Company's performance, this information should not be considered an alternative to measurements required by GAAP.

The following table provides a reconciliation of certain GAAP financial measures to non-GAAP financial measures.  The reconciling item between the GAAP and non-GAAP financial measures consisted of the one-time net tax expense of $19.7 million during the three months ended December 31, 2017.  The one-time net tax expense was driven by the Tax Cuts and Jobs Act (“Tax Act”) and the change in the federal marginal rate from 35 percent to 21 percent, which resulted in the revaluation of its deferred tax assets and deferred tax liabilities (“net deferred tax asset”).  The Company believes that the financial results are more comparable excluding the impact of the revaluation of the net deferred tax asset.

Non-GAAP Financial Measures - Tax Cuts and Jobs Act

 Three Months ended
(Dollars in thousands, except per share data)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
Net income (GAAP)$38,559  14,956  31,255 
Tax Act adjustment (GAAP)  19,699   
Net income (non-GAAP)$38,559  34,655  31,255 
Basic earnings per share (GAAP)$0.48  0.19  0.41 
Tax Act adjustment (GAAP)  0.25   
Basic earnings per share (non-GAAP)$0.48  0.44  0.41 
Diluted earnings per share (GAAP)$0.48  0.19  0.41 
Tax Act adjustment (GAAP)  0.25   
Diluted earnings per share (non-GAAP)$0.48  0.44  0.41 
Return on average assets (annualized) (GAAP)1.50% 0.61% 1.35%
Tax Act adjustment (GAAP)% 0.81% %
Return on average assets (annualized) (non-GAAP)1.50% 1.42% 1.35%
Return on average equity (annualized) (GAAP)11.90% 4.91% 11.19%
Tax Act adjustment (GAAP)% 6.47% %
Return on average equity (annualized) (non-GAAP)11.90% 11.38% 11.19%
Dividend payout ratio (annualized) (GAAP)47.92% 110.53% 51.22%
Tax Act adjustment (GAAP)% (62.80)% %
Dividend payout ratio (annualized) (non-GAAP)47.92% 47.73% 51.22%
Effective tax rate (GAAP)17.88% 67.69% 23.79%
Tax Act adjustment (GAAP)% (42.57)% %
Effective tax rate (non-GAAP)17.88% 25.12% 23.79%
 

Financial Highlights

 At or for the Three Months ended
(Dollars in thousands, except per share and market data)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
Operating results     
Net income 1$38,559  34,655  31,255 
Basic earnings per share 1$0.48  0.44  0.41 
Diluted earnings per share 1$0.48  0.44  0.41 
Dividends declared per share$0.23  0.21  0.21 
Market value per share     
Closing$38.38  39.39  33.93 
High$41.24  41.23  38.17 
Low$36.72  35.50  31.70 
Selected ratios and other data     
Number of common stock shares outstanding84,511,472  78,006,956  76,619,952 
Average outstanding shares - basic80,808,904  78,006,956  76,572,116 
Average outstanding shares - diluted80,887,135  78,094,494  76,633,283 
Return on average assets (annualized) 11.50% 1.42% 1.35%
Return on average equity (annualized) 111.90% 11.38% 11.19%
Efficiency ratio57.80% 54.02% 55.57%
Dividend payout ratio 147.92% 47.73% 51.22%
Loan to deposit ratio81.83% 87.29% 78.91%
Number of full time equivalent employees2,492  2,278  2,224 
Number of locations166  145  142 
Number of ATMs222  200  195 

______________________________

1 Excludes a one-time revaluation of the deferred tax assets and deferred tax liabilities as a result of the Tax Act for the three months ended December 31, 2017.  For additional information on the revaluation, see the “Non-GAAP Financial Measures - Tax Cuts and Jobs Act” section above.

KALISPELL, Mont., April 19, 2018 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $38.6 million for the current quarter, an increase of $7.3 million, or 23 percent, from the $31.3 million of net income for the prior year first quarter.  Diluted earnings per share for the current quarter was $0.48 per share, an increase of $0.07, or 17 percent, from the prior year first quarter diluted earnings per share of $0.41.  Included in the current quarter was $1.8 million of acquisition-related expenses.  “I am very pleased to see the Glacier team post solid gains across all of our Company’s key performance metrics.  This was accomplished during one of the busiest quarters in the Company’s history, closing two of our largest acquisitions while continuing to grow our core business,” said Randy Chesler, President and Chief Executive Officer.

On February 28, 2018, the Company completed the acquisition of Inter-Mountain Bancorp, Inc., the holding company for First Security Bank, a community bank in Bozeman, Montana (collectively, “FSB”).  On January 31, 2018, the Company completed the acquisition of Columbine Capital Corp., the holding company for Collegiate Peaks Bank, a community bank in Buena Vista, Colorado (collectively, “Collegiate”).  The Company’s results of operations and financial condition include the acquisitions beginning on the acquisition dates and the following table discloses the preliminary fair value estimates of selected classifications of assets and liabilities acquired:

 FSB Collegiate  
(Dollars in thousands)February 28,
 2018
 January 31,
 2018
 Total
Total assets$1,109,684  551,198  1,660,882 
Debt securities271,865  42,177  314,042 
Loans receivable627,767  354,252  982,019 
Non-interest bearing deposits301,468  170,022  471,490 
Interest bearing deposits576,118  267,149  843,267 
Borrowings36,880  12,509  49,389 
         

Asset Summary

       $ Change from
(Dollars in thousands)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Cash and cash equivalents$451,048  200,004  234,004  251,044  217,044 
Debt securities, available-for-sale2,154,845  1,778,243  2,314,521  376,602  (159,676)
Debt securities, held-to-maturity634,413  648,313  667,388  (13,900) (32,975)
Total debt securities2,789,258  2,426,556  2,981,909  362,702  (192,651)
Loans receivable         
Residential real estate831,021  720,728  685,458  110,293  145,563 
Commercial real estate4,251,003  3,577,139  3,056,372  673,864  1,194,631 
Other commercial1,839,293  1,579,353  1,462,110  259,940  377,183 
Home equity489,879  457,918  433,554  31,961  56,325 
Other consumer258,834  242,686  239,480  16,148  19,354 
Loans receivable7,670,030  6,577,824  5,876,974  1,092,206  1,793,056 
Allowance for loan and lease losses(127,608) (129,568) (129,226) 1,960  1,618 
Loans receivable, net7,542,422  6,448,256  5,747,748  1,094,166  1,794,674 
Other assets876,050  631,533  590,247  244,517  285,803 
Total assets$11,658,778  9,706,349  9,553,908  1,952,429  2,104,870 
 

The Company successfully executed its strategy to stay below $10 billion in total assets as of  December 31, 2017 to delay the impact of the Durbin Amendment for one additional year.  The Durbin Amendment, which was passed as part of Dodd-Frank, establishes limits on the amount of interchange fees that can be charged to merchants for debit card processing and will reduce the Company’s service charge fee income in the future.  As a result, the Company’s annual service charge fee income is expected to decline by approximately $14 - $16 million (pre-tax) beginning July 2019.  During the current quarter, the Company surpassed $10 billion in total assets ending the quarter at $11.659 billion, which was an increase of $1.952 billion, or 20 percent, from the prior quarter resulting from the current quarter acquisitions along with organic growth in loans and debt securities.

Total debt securities of $2.789 billion at March 31, 2018 increased $363 million, or 15 percent, during the current quarter and decreased $192.7 million, or 6 percent, from the prior year first quarter.  The current quarter increase was primarily due to the addition of the acquired banks.  Debt securities represented 24 percent of total assets at March 31, 2018 compared to 31 percent of total assets at March 31, 2017.

The loan portfolio increased $110 million, or 7 percent annualized, during the current quarter, excluding the FSB and Collegiate acquisitions.  The loan category with the largest increase was commercial real estate loans which increased $56.0 million, or 2 percent.  Excluding the current quarter acquisitions and the prior year acquisition of Foothills Bank (“Foothills”), the loan portfolio increased $519 million, or 9 percent, since March 31, 2017 and was primarily driven by growth in commercial real estate loans, which increased $346 million, or 11 percent.

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,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
Allowance for loan and lease losses     
Balance at beginning of period$129,568  129,572  129,572 
Provision for loan losses795  10,824  1,598 
Charge-offs(5,007) (19,331) (4,229)
Recoveries2,252  8,503  2,285 
Balance at end of period$127,608  129,568  129,226 
Other real estate owned$14,132  14,269  17,771 
Accruing loans 90 days or more past due5,402  6,077  3,028 
Non-accrual loans54,449  44,833  50,674 
Total non-performing assets$73,983  65,179  71,473 
Non-performing assets as a percentage of subsidiary assets0.64% 0.68% 0.75%
Allowance for loan and lease losses as a percentage of non-performing loans213% 255% 241%
Allowance for loan and lease losses as a percentage of total loans1.66% 1.97% 2.20%
Net charge-offs as a percentage of total loans0.04% 0.17% 0.03%
Accruing loans 30-89 days past due$44,963  37,687  39,160 
Accruing troubled debt restructurings$41,649  38,491  38,955 
Non-accrual troubled debt restructurings$13,289  23,709  19,479 
U.S. government guarantees included in non-performing assets$4,548  2,513  1,690 
          

Non-performing assets at March 31, 2018 were $74.0 million, an increase of $8.8 million, or 14 percent, from December 31, 2017.  Non-performing assets as a percentage of subsidiary assets at March 31, 2018 was 0.64 percent which was a decrease of 4 basis points from the prior year end of 0.68 percent and a decrease of 11 basis points from prior year first quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $45.0 million at March 31, 2018 increased $7.3 million from the prior quarter and increased $5.8 million from the prior year which was also attributable to the acquired banks.  Early stage delinquencies as a percentage of loans at March 31, 2018 was 0.59 percent which was an increase of 2 basis points from the prior year end and a decrease of 8 basis points from prior year first quarter.  The allowance for loan and lease losses (“allowance”) as a percent of total loans outstanding at March 31, 2018 was 1.66 percent, a decrease of 31 basis points from 1.97 percent at December 31, 2017.  This decrease was primarily driven by the addition of loans from new acquisitions, as they are added to the portfolio on a fair value basis and as a result do not require an allowance.

Credit Quality Trends and Provision for Loan Losses

(Dollars in thousands)Provision
for Loan
Losses
 Net
Charge-Offs
(Recoveries)
 ALLL
as a Percent
of Loans
 Accruing
Loans 30-89
Days Past Due
as a Percent of
Loans
 Non-Performing
Assets to
Total Subsidiary
Assets
First quarter 2018$795  $2,755  1.66% 0.59% 0.64%
Fourth quarter 20172,886  2,894  1.97% 0.57% 0.68%
Third quarter 20173,327  3,628  1.99% 0.45% 0.67%
Second quarter 20173,013  2,362  2.05% 0.49% 0.70%
First quarter 20171,598  1,944  2.20% 0.67% 0.75%
Fourth quarter 20161,139  4,101  2.28% 0.45% 0.76%
Third quarter 2016626  478  2.37% 0.49% 0.84%
Second quarter 2016  (2,315) 2.46% 0.44% 0.82%

Net charge-offs for the current quarter were $2.8 million compared to $2.9 million for the prior quarter and $1.9 million from the same quarter last year.  Current quarter provision for loan losses was $795 thousand, compared to $2.9 million in the prior quarter and $1.6 million in the prior year first quarter.  Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of the loan loss provision.

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)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Deposits         
Non-interest bearing deposits$2,811,469  2,311,902  2,049,476  499,567  761,993 
NOW and DDA accounts2,400,693  1,695,246  1,596,353  705,447  804,340 
Savings accounts1,328,047  1,082,604  1,035,023  245,443  293,024 
Money market deposit accounts1,778,068  1,512,693  1,516,731  265,375  261,337 
Certificate accounts955,105  817,259  941,628  137,846  13,477 
Core deposits, total9,273,382  7,419,704  7,139,211  1,853,678  2,134,171 
Wholesale deposits145,463  160,043  340,946  (14,580) (195,483)
Deposits, total9,418,845  7,579,747  7,480,157  1,839,098  1,938,688 
Repurchase agreements395,794  362,573  497,187  33,221  (101,393)
Federal Home Loan Bank advances155,057  353,995  211,627  (198,938) (56,570)
Other borrowed funds8,204  8,224  8,894  (20) (690)
Subordinated debentures134,061  126,135  126,027  7,926  8,034 
Other liabilities92,793  76,618  94,776  16,175  (1,983)
Total liabilities$10,204,754  8,507,292  8,418,668  1,697,462  1,786,086 
 

The Company added back $395 million of deposits during the current quarter that were previously moved off balance sheet as part of its strategy to stay below $10 billion in total assets through December 31, 2017.  Excluding the acquisitions and deposits moved back onto the balance sheet, core deposits increased $143 million, or 2 percent, from the prior quarter.  Excluding acquisitions, core deposit increased $523 million, or 7 percent, from the prior year first quarter.  Excluding acquisitions, non-interest bearing deposits increased $28.1 million, or 1 percent, from prior quarter and increased $193 million, or 9 percent, from the prior year.

Securities sold under agreements to repurchase (“repurchase agreements”) of $396 million at March 31, 2018 increased $33.2 million, or 9 percent, from the prior quarter and decreased $101 million, or 20 percent, from the prior year first quarter.  Federal Home Loan Bank (“FHLB”) advances of $155 million at March 31, 2018, decreased $199 million over prior quarter as that higher cost of funding was replaced with the deposits brought back onto the balance sheet.

Stockholders’ Equity Summary

       $ Change from
(Dollars in thousands, except per share data)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Common equity$1,471,047  1,201,036  1,139,652  270,011  331,395 
Accumulated other comprehensive loss(17,023) (1,979) (4,412) (15,044) (12,611)
Total stockholders’ equity1,454,024  1,199,057  1,135,240  254,967  318,784 
Goodwill and core deposit intangible, net(343,991) (191,995) (158,799) (151,996) (185,192)
Tangible stockholders’ equity$1,110,033  1,007,062  976,441  102,971  133,592 
                
Stockholders’ equity to total assets 12.47% 12.35% 11.88%      
Tangible stockholders’ equity to total tangible assets 9.81% 10.58% 10.39%      
Book value per common share$17.21  15.37  14.82  1.84  2.39 
Tangible book value per common share$13.13  12.91  12.74  0.22  0.39 
                

Tangible stockholders’ equity of $1.110 billion at March 31, 2018 increased $103 million compared to the prior quarter which was the result of earnings retention, $181 million and $69.8 million of Company stock issued for the acquisitions of FSB and Collegiate, respectively; these increases more than offset the increase in goodwill and core deposit intangibles associated with the acquisitions.  Tangible book value per common share at quarter end increased $0.22 per share from the prior quarter and increased $0.39 per share from a year ago.

Cash Dividend
On March 28, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.23 per share, an increase of $0.02 per share, or 10 percent from the prior quarter.  The dividend was payable April 19, 2018 to shareholders of record on April 10, 2018.  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, 2018 
Compared to December 31, 2017 and March 31, 2017

Income Summary

 Three Months ended $ Change from
(Dollars in thousands)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Net interest income         
Interest income$103,066  96,898  87,628  6,168  15,438 
Interest expense7,774  7,072  7,366  702  408 
     Total net interest income95,292  89,826  80,262  5,466  15,030 
Non-interest income         
Service charges and other fees16,871  17,282  15,633  (411) 1,238 
Miscellaneous loan fees and charges1,477  1,077  980  400  497 
Gain on sale of loans6,097  7,408  6,358  (1,311) (261)
Loss on sale of investments(333) (115) (100) (218) (233)
Other income1,974  2,057  2,818  (83) (844)
     Total non-interest income26,086  27,709  25,689  (1,623) 397 
     Total income$121,378  117,535  105,951  3,843  15,427 
Net interest margin (tax-equivalent)4.10% 4.23% 4.03%    
 

Net Interest Income
In the current quarter, interest income of $103 million increased $6.2 million, or 6 percent, from the prior quarter and increased $15.4 million, or 18 percent, over the prior year first quarter with both increases primarily attributable to the increase in interest income from commercial loans.  Interest income on commercial loans increased $4.2 million, or 7 percent, from the prior quarter and increased $15.5 million, or 31 percent, from the prior year first quarter.

The current quarter interest expense of $7.8 million increased $702 thousand, or 10 percent, from the prior quarter and increased $408 thousand, or 6 percent, from the prior year first quarter.  The total cost of funding (including non-interest bearing deposits) for the current quarter was 35 basis points compared to 33 basis points for the prior quarter and 37 basis points for the prior year first quarter.  The 2 basis points increase from the prior quarter was driven by the $395 million of higher cost deposits brought back onto the balance sheet during the current quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.10 percent compared to 4.23 percent in the prior quarter.  The 13 basis points decrease in the net interest margin was primarily the result of a 15 basis points decrease in the tax benefit related to the tax effect on certain earning assets as a result of the lower federal income tax rate in the current year.  The current quarter net interest margin increased 7 basis points over the prior year first quarter net interest margin of 4.03 percent even though there was a current quarter decrease of 15 basis points driven by the decrease in the federal income tax rate.  The increase in the core margin from the prior year first quarter resulted from the remix of earning assets to higher yielding loans and stable funding costs.  “The low cost core deposit funding base of Collegiate Peaks Bank and First Security Bank adds significant value to the Company, especially in higher interest rate environments,” said Ron Copher, Chief Financial Officer.

Non-interest Income
Non-interest income for the current quarter totaled $26.1 million, a decrease of $1.6 million, or 6 percent, from the prior quarter and an increase of $397 thousand, or 2 percent, over the same quarter last year.  Service charges and other fees of $16.9 million, increased $1.2 million, or 8 percent, from the prior year first quarter primarily due to the increased number of accounts.  Gain on sale of loans decreased $1.3 million, or 18 percent, from the prior quarter and decreased $261 thousand from the prior year first quarter as a result of decreased refinance and purchase activity.  Other income of $2.0 million, decreased $844 thousand, or 30 percent, from the prior year first quarter due to the decrease in gain on sale of other real estate owned (“OREO”).   Gain on sale of OREO during the first quarter of 2018 was $72.7 thousand compared to $967 thousand in the prior year first quarter.

Non-interest Expense Summary

 Three Months ended $ Change from
(Dollars in thousands)Mar 31,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Compensation and employee benefits$45,721  40,465  39,246  5,256  6,475 
Occupancy and equipment7,274  6,925  6,646  349  628 
Advertising and promotions2,170  2,024  1,973  146  197 
Data processing3,967  3,970  3,124  (3) 843 
Other real estate owned72  377  273  (305) (201)
Regulatory assessments and insurance1,206  1,069  1,061  137  145 
Core deposit intangibles amortization1,056  614  601  442  455 
Other expenses12,161  12,922  10,420  (761) 1,741 
Total non-interest expense$73,627  68,366  63,344  5,261  10,283 
 

Compensation and employee benefits increased by $5.3 million, or 13 percent, from the prior year fourth quarter due to annual salary increases and the increased number of employees from acquisitions.  Occupancy and equipment expense increased $349 thousand, or 5 percent, over the prior quarter and increased $628 thousand, or 9 percent, over the prior year first quarter and was attributable to the acquisitions.  Data processing expense increased $843 thousand, or 27 percent, from the prior year first quarter as a result of acquisitions and volume driven cost increases.  Other expenses increased $1.7 million, or 17 percent from the prior year first quarter primarily from an increase in acquisition related expenses from the two acquisitions during the current quarter.  Acquisition related expenses were $1.8 million during the current quarter compared to $936 thousand in the prior quarter and $83 thousand in the prior year first quarter.

Federal and State Income Tax Expense
Tax expense during the first quarter of 2018 was $8.4 million, which is a decrease of $1.4 million, or 14 percent, from the prior year first quarter and was attributable to the decrease in the federal income tax rate driven by the Tax Act.  The effective tax rate in the first quarter of 2018 was 18 percent compared to 24 percent in the prior year first quarter.  Tax expense decreased $22.9 million from the prior quarter due to the one-time $19.7 million revaluation of the Company’s net deferred tax asset and a decrease in the federal income tax rate in the current year.  Excluding the impact of the revaluation of the deferred tax asset, the effective federal and state income tax rate for the Company was 25 percent in the prior quarter.

Efficiency Ratio
The current quarter efficiency ratio was 57.8 percent, a 378 basis points increase from the prior quarter efficiency ratio of 54.02 percent.  The increase included 230 basis points related to the combined impact of the decrease in the federal income tax rate and the increase in acquisition related expenses.

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

  • the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio;
  • changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System or the Federal Reserve Board, which could adversely affect the Company’s net interest income and profitability;
  • changes in the cost and scope of insurance from the Federal Deposit Insurance Corporation and other third parties;
  • legislative or regulatory changes, including increased banking and consumer protection regulation that adversely affect the Company’s business, both generally and as a result of the Company exceeding $10 billion in total consolidated assets;
  • ability to complete pending or prospective future acquisitions, limit certain sources of revenue, or increase cost of operations;
  • 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 20, 2018.  The conference call will be accessible by telephone and through the internet. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 7466239. To participate on the webcast, log on to: https://edge.media-server.com/m6/p/zzte4xtt.  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 7466239 by May 4, 2018.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. is the parent company for Glacier Bank, Kalispell and its bank divisions: First Security Bank of Missoula; Valley Bank of Helena; Western Security Bank, Billings; First Bank of Montana, Lewistown; and First Security Bank of Bozeman, all located in Montana; as well as Mountain West Bank, Coeur d’Alene, operating in Idaho, Utah and Washington; First Bank, Powell, operating in Wyoming and Utah; Citizens Community Bank, Pocatello, operating in Idaho; Bank of the San Juans, Durango; and Collegiate Peaks Bank, Buena Vista both operating in Colorado; First State Bank, Wheatland, operating in Wyoming; North Cascades Bank, Chelan, operating in Washington; and The Foothills Bank, Yuma, operating in Arizona.

 
Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Financial Condition
 
(Dollars in thousands, except per share data)March 31,
 2018
 December 31,
 2017
 March 31,
 2017
Assets     
Cash on hand and in banks$140,625  139,948  124,501 
Federal funds sold230    190 
Interest bearing cash deposits310,193  60,056  109,313 
     Cash and cash equivalents451,048  200,004  234,004 
Debt securities, available-for-sale2,154,845  1,778,243  2,314,521 
Debt securities, held-to-maturity634,413  648,313  667,388 
     Total debt securities2,789,258  2,426,556  2,981,909 
Loans held for sale, at fair value37,058  38,833  25,649 
Loans receivable7,670,030  6,577,824  5,876,974 
Allowance for loan and lease losses(127,608) (129,568) (129,226)
     Loans receivable, net7,542,422  6,448,256  5,747,748 
Premises and equipment, net238,491  177,348  175,283 
Other real estate owned14,132  14,269  17,771 
Accrued interest receivable54,376  44,462  48,043 
Deferred tax asset32,929  38,344  64,575 
Core deposit intangible, net54,456  14,184  11,746 
Goodwill289,535  177,811  147,053 
Non-marketable equity securities21,910  29,884  23,944 
Bank-owned life insurance81,787  59,351  50,335 
Other assets51,376  37,047  25,848 
     Total assets$11,658,778  9,706,349  9,553,908 
Liabilities     
Non-interest bearing deposits$2,811,469  2,311,902  2,049,476 
Interest bearing deposits6,607,376  5,267,845  5,430,681 
Securities sold under agreements to repurchase395,794  362,573  497,187 
FHLB advances155,057  353,995  211,627 
Other borrowed funds8,204  8,224  8,894 
Subordinated debentures134,061  126,135  126,027 
Accrued interest payable3,740  3,450  3,467 
Other liabilities89,053  73,168  91,309 
     Total liabilities10,204,754  8,507,292  8,418,668 
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 authorized845  780  766 
Paid-in capital1,048,860  797,997  749,381 
Retained earnings - substantially restricted421,342  402,259  389,505 
Accumulated other comprehensive loss(17,023) (1,979) (4,412)
     Total stockholders’ equity1,454,024  1,199,057  1,135,240 
     Total liabilities and stockholders’ equity$11,658,778  9,706,349  9,553,908 
 


Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations
 
 Three Months ended
(Dollars in thousands, except per share data)March 31,
 2018
 December 31,
 2017
 March 31,
 2017
Interest Income     
Debt securities$20,142  18,663  21,939 
Residential real estate loans8,785  8,520  7,918 
Commercial loans65,515  61,329  49,970 
Consumer and other loans8,624  8,386  7,801 
     Total interest income103,066  96,898  87,628 
Interest Expense     
Deposits3,916  3,288  4,440 
Securities sold under agreements to repurchase485  496  382 
Federal Home Loan Bank advances2,089  2,106  1,510 
Other borrowed funds16  24  15 
Subordinated debentures1,268  1,158  1,019 
     Total interest expense7,774  7,072  7,366 
Net Interest Income95,292  89,826  80,262 
Provision for loan losses795  2,886  1,598 
     Net interest income after provision for loan losses94,497  86,940  78,664 
Non-Interest Income     
Service charges and other fees16,871  17,282  15,633 
Miscellaneous loan fees and charges1,477  1,077  980 
Gain on sale of loans6,097  7,408  6,358 
Loss on sale of debt securities(333) (115) (100)
Other income1,974  2,057  2,818 
     Total non-interest income26,086  27,709  25,689 
Non-Interest Expense     
Compensation and employee benefits45,721  40,465  39,246 
Occupancy and equipment7,274  6,925  6,646 
Advertising and promotions2,170  2,024  1,973 
Data processing3,967  3,970  3,124 
Other real estate owned72  377  273 
Regulatory assessments and insurance1,206  1,069  1,061 
Core deposit intangibles amortization1,056  614  601 
Other expenses12,161  12,922  10,420 
     Total non-interest expense73,627  68,366  63,344 
Income Before Income Taxes46,956  46,283  41,009 
Federal and state income tax expense8,397  31,327  9,754 
Net Income$38,559  14,956  31,255 
 


Glacier Bancorp, Inc.
Average Balance Sheets
 
 Three Months ended
 March 31, 2018 March 31, 2017
(Dollars in thousands)Average
Balance
 Interest &
Dividends
 Average
Yield/
Rate
 Average
Balance
 Interest &
Dividends
 Average
Yield/
Rate
Assets           
Residential real estate loans$783,817  $8,785  4.48% $709,432  $7,918  4.46%
Commercial loans 15,551,619  66,474  4.86% 4,372,299  51,335  4.76%
Consumer and other loans719,153  8,624  4.86% 672,480  7,801  4.70%
Total loans 27,054,589  83,883  4.82% 5,754,211  67,054  4.73%
Tax-exempt debt securities 31,093,736  12,795  4.68% 1,245,358  17,761  5.70%
Taxable debt securities 41,654,318  10,273  2.48% 1,857,335  10,575  2.28%
Total earning assets9,802,643  106,951  4.42% 8,856,904  95,390  4.37%
Goodwill and intangibles219,463      159,089     
Non-earning assets390,857      369,274     
Total assets$10,412,963      $9,385,267     
Liabilities           
Non-interest bearing deposits$2,472,151  $  % $1,970,654  $  %
NOW and DDA accounts2,011,464  818  0.16% 1,575,928  247  0.06%
Savings accounts1,184,807  193  0.07% 1,015,108  146  0.06%
Money market deposit accounts1,631,863  719  0.18% 1,490,198  565  0.15%
Certificate accounts876,425  1,319  0.61% 953,527  1,333  0.57%
Wholesale deposits 5149,577  867  2.35% 332,255  2,149  2.62%
FHLB advances224,847  2,089  3.72% 271,225  1,510  2.23%
Repurchase agreements and other borrowed funds521,641  1,769  1.38% 562,628  1,416  1.02%
Total funding liabilities9,072,775  7,774  0.35% 8,171,523  7,366  0.37%
Other liabilities25,973      81,419     
Total liabilities9,098,748      8,252,942     
Stockholders’ Equity           
Common stock808      766     
Paid-in capital906,030      748,851     
Retained earnings420,552      389,798     
Accumulated other comprehensive loss(13,175)     (7,090)    
Total stockholders’ equity1,314,215      1,132,325     
Total liabilities and stockholders’ equity$10,412,963      $9,385,267     
Net interest income (tax-equivalent)  $99,177      $88,024   
Net interest spread (tax-equivalent)    4.07%     4.00%
Net interest margin (tax-equivalent)    4.10%     4.03%

______________________________

Includes tax effect of $959 thousand and $1.4 million on tax-exempt municipal loan and lease income for the three months ended March 31, 2018 and 2017, respectively.
2 Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale.  Non-accrual loans were included in the average volume for the entire period.
Includes tax effect of $2.6 million and $6.1 million on tax-exempt debt securities income for the three months ended March 31, 2018 and 2017, respectively.
Includes tax effect of $304 thousand and $338 thousand on federal income tax credits for the three months ended March 31, 2018 and 2017, respectively.
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,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Custom and owner occupied construction$140,440  $109,555  $92,835  28% 51%
Pre-sold and spec construction100,376  72,160  68,736  39% 46%
Total residential construction240,816  181,715  161,571  33% 49%
Land development76,528  82,398  78,042  (7)% (2)%
Consumer land or lots119,469  102,289  94,840  17% 26%
Unimproved land68,862  65,753  66,857  5% 3%
Developed lots for operative builders13,093  14,592  13,046  (10)% %
Commercial lots43,232  23,770  26,639  82% 62%
Other construction420,632  391,835  272,184  7% 55%
Total land, lot, and other construction741,816  680,637  551,608  9% 34%
Owner occupied1,292,206  1,132,833  988,544  14% 31%
Non-owner occupied1,449,166  1,186,066  964,913  22% 50%
Total commercial real estate2,741,372  2,318,899  1,953,457  18% 40%
Commercial and industrial865,574  751,221  739,475  15% 17%
Agriculture620,342  450,616  411,094  38% 51%
1st lien1,014,361  877,335  839,387  16% 21%
Junior lien66,288  51,155  54,801  30% 21%
Total 1-4 family1,080,649  928,490  894,188  16% 21%
Multifamily residential219,310  189,342  162,636  16% 35%
Home equity lines of credit481,204  440,105  405,309  9% 19%
Other consumer162,171  148,247  153,159  9% 6%
Total consumer643,375  588,352  558,468  9% 15%
States and political subdivisions421,252  383,252  329,461  10% 28%
Other132,582  144,133  140,665  (8)% (6)%
Total loans receivable, including loans held for sale7,707,088  6,616,657  5,902,623  16% 31%
Less loans held for sale 1(37,058) (38,833) (25,649) (5)% 44%
Total loans receivable$7,670,030  $6,577,824  $5,876,974  17% 31%

______________________________

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,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Mar 31,
 2018
 Mar 31,
 2018
 Mar 31,
 2018
Custom and owner occupied construction$48  48        48 
Pre-sold and spec construction492  38  227  492     
Total residential construction540  86  227  492    48 
Land development7,802  7,888  8,856  775    7,027 
Consumer land or lots1,622  1,861  1,728  743    879 
Unimproved land10,294  10,866  12,017  8,638    1,656 
Developed lots for operative builders83  116  116      83 
Commercial lots1,312  1,312  1,255  260    1,052 
Other construction319  151    181    138 
Total land, lot and other construction21,432  22,194  23,972  10,597    10,835 
Owner occupied12,594  13,848  17,956  10,483  552  1,559 
Non-owner occupied5,346  4,584  3,194  4,751    595 
Total commercial real estate17,940  18,432  21,150  15,234  552  2,154 
Commercial and industrial6,313  5,294  4,466  4,956  1,312  45 
Agriculture10,476  3,931  1,878  8,481  1,995   
1st lien8,717  9,261  10,047  7,706  676  335 
Junior lien4,271  567  1,335  3,979  242  50 
Total 1-4 family12,988  9,828  11,382  11,685  918  385 
Multifamily residential652    388  652     
Home equity lines of credit3,312  3,292  6,008  2,207  465  640 
Other consumer330  322  202  145  160  25 
Total consumer3,642  3,614  6,210  2,352  625  665 
States and political subdivisions  1,800  1,800       
Total$73,983  65,179  71,473  54,449  5,402  14,132 


 
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,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Dec 31,
 2017
 Mar 31,
 2017
Custom and owner occupied construction$611  $300  $380  104% 61%
Pre-sold and spec construction267  102  488  162% (45)%
Total residential construction878  402  868  118% 1%
Land development585      n/m  n/m 
Consumer land or lots485  353  432  37% 12%
Unimproved land889  662  938  34% (5)%
Developed lots for operative builders464  7    6,529% n/m 
Commercial lots194  108  258  80% (25)%
Other construction76    7,125  n/m  (99)%
Total land, lot and other construction2,693  1,130  8,753  138% (69)%
Owner occupied13,904  4,726  6,686  194% 108%
Non-owner occupied3,842  2,399  405  60% 849%
Total commercial real estate17,746  7,125  7,091  149% 150%
Commercial and industrial5,746  6,472  6,796  (11)% (15)%
Agriculture3,845  3,205  3,567  20% 8%
1st lien9,597  10,865  7,132  (12)% 35%
Junior lien240  4,348  848  (94)% (72)%
Total 1-4 family9,837  15,213  7,980  (35)% 23%
Multifamily Residential    2,028  n/m  (100)%
Home equity lines of credit2,316  1,962  703  18% 229%
Other consumer1,849  2,109  1,317  (12)% 40%
Total consumer4,165  4,071  2,020  2% 106%
Other53  69  57  (23)% (7)%
Total$44,963  $37,687  $39,160  19% 15%

______________________________

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,
 2018
 Dec 31,
 2017
 Mar 31,
 2017
 Mar 31,
 2018
 Mar 31,
 2018
Pre-sold and spec construction$(339) (23) (11) 17  356 
Total residential construction(339) (23) (11) 17  356 
Land development(5) (143) (33)   5 
Consumer land or lots(3) 222  (57) 169  172 
Unimproved land(73) (304) (96)   73 
Developed lots for operative builders  (107) (5)    
Commercial lots(2) (6) (2)   2 
Other construction  389       
Total land, lot and other construction(83) 51  (193) 169  252 
Owner occupied962  3,908  795  1,000  38 
Non-owner occupied(47) 368  (1) 15  62 
Total commercial real estate915  4,276  794  1,015  100 
Commercial and industrial1,430  883  344  1,539  109 
Agriculture(2) 9  (3)   2 
1st lien(65) (23) (15) 4  69 
Junior lien(29) 719  (16)   29 
Total 1-4 family(94) 696  (31) 4  98 
Multifamily residential(6) (230)     6 
Home equity lines of credit(32) 272  12  12  44 
Other consumer73  505  (11) 142  69 
Total consumer41  777  1  154  113 
Other893  4,389  1,043  2,109  1,216 
Total$2,755  10,828  1,944  5,007  2,252 
 

Visit our website atwww.glacierbancorp.com

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

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