gbcilogostatesnewa02.jpg

NEWS RELEASE
April 19, 2018

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

GLACIER BANCORP, INC. ANNOUNCES
RESULTS FOR THE QUARTER ENDED MARCH 31, 2018

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.



1



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
%

2



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 outstanding
84,511,472

 
78,006,956

 
76,619,952

Average outstanding shares - basic
80,808,904

 
78,006,956

 
76,572,116

Average outstanding shares - diluted
80,887,135

 
78,094,494

 
76,633,283

Return on average assets (annualized) 1
1.50
%
 
1.42
%
 
1.35
%
Return on average equity (annualized) 1
11.90
%
 
11.38
%
 
11.19
%
Efficiency ratio
57.80
%
 
54.02
%
 
55.57
%
Dividend payout ratio 1
47.92
%
 
47.73
%
 
51.22
%
Loan to deposit ratio
81.83
%
 
87.29
%
 
78.91
%
Number of full time equivalent employees
2,492

 
2,278

 
2,224

Number of locations
166

 
145

 
142

Number of ATMs
222

 
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., Apr 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:

3



 
FSB
 
Collegiate
 
 
(Dollars in thousands)
February 28,
2018
 
January 31,
2018
 
Total
Total assets
$
1,109,684

 
551,198

 
1,660,882

Debt securities
271,865

 
42,177

 
314,042

Loans receivable
627,767

 
354,252

 
982,019

Non-interest bearing deposits
301,468

 
170,022

 
471,490

Interest bearing deposits
576,118

 
267,149

 
843,267

Borrowings
36,880

 
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-sale
2,154,845

 
1,778,243

 
2,314,521

 
376,602

 
(159,676
)
Debt securities, held-to-maturity
634,413

 
648,313

 
667,388

 
(13,900
)
 
(32,975
)
Total debt securities
2,789,258

 
2,426,556

 
2,981,909

 
362,702

 
(192,651
)
Loans receivable
 
 
 
 
 
 
 
 
 
Residential real estate
831,021

 
720,728

 
685,458

 
110,293

 
145,563

Commercial real estate
4,251,003

 
3,577,139

 
3,056,372

 
673,864

 
1,194,631

Other commercial
1,839,293

 
1,579,353

 
1,462,110

 
259,940

 
377,183

Home equity
489,879

 
457,918

 
433,554

 
31,961

 
56,325

Other consumer
258,834

 
242,686

 
239,480

 
16,148

 
19,354

Loans receivable
7,670,030

 
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, net
7,542,422

 
6,448,256

 
5,747,748

 
1,094,166

 
1,794,674

Other assets
876,050

 
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.


4



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 losses
795

 
10,824

 
1,598

Charge-offs
(5,007
)
 
(19,331
)
 
(4,229
)
Recoveries
2,252

 
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 due
5,402

 
6,077

 
3,028

Non-accrual loans
54,449

 
44,833

 
50,674

Total non-performing assets
$
73,983

 
65,179

 
71,473

Non-performing assets as a percentage of subsidiary assets
0.64
%
 
0.68
%
 
0.75
%
Allowance for loan and lease losses as a percentage of non-performing loans
213
%
 
255
%
 
241
%
Allowance for loan and lease losses as a percentage of total loans
1.66
%
 
1.97
%
 
2.20
%
Net charge-offs as a percentage of total loans
0.04
%
 
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.


5



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 2017
2,886

 
2,894

 
1.97
%
 
0.57
%
 
0.68
%
Third quarter 2017
3,327

 
3,628

 
1.99
%
 
0.45
%
 
0.67
%
Second quarter 2017
3,013

 
2,362

 
2.05
%
 
0.49
%
 
0.70
%
First quarter 2017
1,598

 
1,944

 
2.20
%
 
0.67
%
 
0.75
%
Fourth quarter 2016
1,139

 
4,101

 
2.28
%
 
0.45
%
 
0.76
%
Third quarter 2016
626

 
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 accounts
2,400,693

 
1,695,246

 
1,596,353

 
705,447

 
804,340

Savings accounts
1,328,047

 
1,082,604

 
1,035,023

 
245,443

 
293,024

Money market deposit accounts
1,778,068

 
1,512,693

 
1,516,731

 
265,375

 
261,337

Certificate accounts
955,105

 
817,259

 
941,628

 
137,846

 
13,477

Core deposits, total
9,273,382

 
7,419,704

 
7,139,211

 
1,853,678

 
2,134,171

Wholesale deposits
145,463

 
160,043

 
340,946

 
(14,580
)
 
(195,483
)
Deposits, total
9,418,845

 
7,579,747

 
7,480,157

 
1,839,098

 
1,938,688

Repurchase agreements
395,794

 
362,573

 
497,187

 
33,221

 
(101,393
)
Federal Home Loan Bank advances
155,057

 
353,995

 
211,627

 
(198,938
)
 
(56,570
)
Other borrowed funds
8,204

 
8,224

 
8,894

 
(20
)
 
(690
)
Subordinated debentures
134,061

 
126,135

 
126,027

 
7,926

 
8,034

Other liabilities
92,793

 
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



6



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’ equity
1,454,024

 
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.


7



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 expense
7,774

 
7,072

 
7,366

 
702

 
408

Total net interest income
95,292

 
89,826

 
80,262

 
5,466

 
15,030

Non-interest income
 
 
 
 
 
 
 
 
 
Service charges and other fees
16,871

 
17,282

 
15,633

 
(411
)
 
1,238

Miscellaneous loan fees and charges
1,477

 
1,077

 
980

 
400

 
497

Gain on sale of loans
6,097

 
7,408

 
6,358

 
(1,311
)
 
(261
)
Loss on sale of investments
(333
)
 
(115
)
 
(100
)
 
(218
)
 
(233
)
Other income
1,974

 
2,057

 
2,818

 
(83
)
 
(844
)
Total non-interest income
26,086

 
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. 



8



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 equipment
7,274

 
6,925

 
6,646

 
349

 
628

Advertising and promotions
2,170

 
2,024

 
1,973

 
146

 
197

Data processing
3,967

 
3,970

 
3,124

 
(3
)
 
843

Other real estate owned
72

 
377

 
273

 
(305
)
 
(201
)
Regulatory assessments and insurance
1,206

 
1,069

 
1,061

 
137

 
145

Core deposit intangibles amortization
1,056

 
614

 
601

 
442

 
455

Other expenses
12,161

 
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.


9



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.

10



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.


11



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 sold
230

 

 
190

Interest bearing cash deposits
310,193

 
60,056

 
109,313

Cash and cash equivalents
451,048

 
200,004

 
234,004

Debt securities, available-for-sale
2,154,845

 
1,778,243

 
2,314,521

Debt securities, held-to-maturity
634,413

 
648,313

 
667,388

Total debt securities
2,789,258

 
2,426,556

 
2,981,909

Loans held for sale, at fair value
37,058

 
38,833

 
25,649

Loans receivable
7,670,030

 
6,577,824

 
5,876,974

Allowance for loan and lease losses
(127,608
)
 
(129,568
)
 
(129,226
)
Loans receivable, net
7,542,422

 
6,448,256

 
5,747,748

Premises and equipment, net
238,491

 
177,348

 
175,283

Other real estate owned
14,132

 
14,269

 
17,771

Accrued interest receivable
54,376

 
44,462

 
48,043

Deferred tax asset
32,929

 
38,344

 
64,575

Core deposit intangible, net
54,456

 
14,184

 
11,746

Goodwill
289,535

 
177,811

 
147,053

Non-marketable equity securities
21,910

 
29,884

 
23,944

Bank-owned life insurance
81,787

 
59,351

 
50,335

Other assets
51,376

 
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 deposits
6,607,376

 
5,267,845

 
5,430,681

Securities sold under agreements to repurchase
395,794

 
362,573

 
497,187

FHLB advances
155,057

 
353,995

 
211,627

Other borrowed funds
8,204

 
8,224

 
8,894

Subordinated debentures
134,061

 
126,135

 
126,027

Accrued interest payable
3,740

 
3,450

 
3,467

Other liabilities
89,053

 
73,168

 
91,309

Total liabilities
10,204,754

 
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 authorized
845

 
780

 
766

Paid-in capital
1,048,860

 
797,997

 
749,381

Retained earnings - substantially restricted
421,342

 
402,259

 
389,505

Accumulated other comprehensive loss
(17,023
)
 
(1,979
)
 
(4,412
)
Total stockholders’ equity
1,454,024

 
1,199,057

 
1,135,240

Total liabilities and stockholders’ equity
$
11,658,778

 
9,706,349

 
9,553,908



12



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 loans
8,785

 
8,520

 
7,918

Commercial loans
65,515

 
61,329

 
49,970

Consumer and other loans
8,624

 
8,386

 
7,801

Total interest income
103,066

 
96,898

 
87,628

Interest Expense
 
 
 
 
 
Deposits
3,916

 
3,288

 
4,440

Securities sold under agreements to repurchase
485

 
496

 
382

Federal Home Loan Bank advances
2,089

 
2,106

 
1,510

Other borrowed funds
16

 
24

 
15

Subordinated debentures
1,268

 
1,158

 
1,019

Total interest expense
7,774

 
7,072

 
7,366

Net Interest Income
95,292

 
89,826

 
80,262

Provision for loan losses
795

 
2,886

 
1,598

Net interest income after provision for loan losses
94,497

 
86,940

 
78,664

Non-Interest Income
 
 
 
 
 
Service charges and other fees
16,871

 
17,282

 
15,633

Miscellaneous loan fees and charges
1,477

 
1,077

 
980

Gain on sale of loans
6,097

 
7,408

 
6,358

Loss on sale of debt securities
(333
)
 
(115
)
 
(100
)
Other income
1,974

 
2,057

 
2,818

Total non-interest income
26,086

 
27,709

 
25,689

Non-Interest Expense
 
 
 
 
 
Compensation and employee benefits
45,721

 
40,465

 
39,246

Occupancy and equipment
7,274

 
6,925

 
6,646

Advertising and promotions
2,170

 
2,024

 
1,973

Data processing
3,967

 
3,970

 
3,124

Other real estate owned
72

 
377

 
273

Regulatory assessments and insurance
1,206

 
1,069

 
1,061

Core deposit intangibles amortization
1,056

 
614

 
601

Other expenses
12,161

 
12,922

 
10,420

Total non-interest expense
73,627

 
68,366

 
63,344

Income Before Income Taxes
46,956

 
46,283

 
41,009

Federal and state income tax expense
8,397

 
31,327

 
9,754

Net Income
$
38,559

 
14,956

 
31,255


13



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 1
5,551,619

 
66,474

 
4.86
%
 
4,372,299

 
51,335

 
4.76
%
Consumer and other loans
719,153

 
8,624

 
4.86
%
 
672,480

 
7,801

 
4.70
%
Total loans 2
7,054,589

 
83,883

 
4.82
%
 
5,754,211

 
67,054

 
4.73
%
Tax-exempt debt securities 3
1,093,736

 
12,795

 
4.68
%
 
1,245,358

 
17,761

 
5.70
%
Taxable debt securities 4
1,654,318

 
10,273

 
2.48
%
 
1,857,335

 
10,575

 
2.28
%
Total earning assets
9,802,643

 
106,951

 
4.42
%
 
8,856,904

 
95,390

 
4.37
%
Goodwill and intangibles
219,463

 
 
 
 
 
159,089

 
 
 
 
Non-earning assets
390,857

 
 
 
 
 
369,274

 
 
 
 
Total assets
$
10,412,963

 
 
 
 
 
$
9,385,267

 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
$
2,472,151

 
$

 
%
 
$
1,970,654

 
$

 
%
NOW and DDA accounts
2,011,464

 
818

 
0.16
%
 
1,575,928

 
247

 
0.06
%
Savings accounts
1,184,807

 
193

 
0.07
%
 
1,015,108

 
146

 
0.06
%
Money market deposit accounts
1,631,863

 
719

 
0.18
%
 
1,490,198

 
565

 
0.15
%
Certificate accounts
876,425

 
1,319

 
0.61
%
 
953,527

 
1,333

 
0.57
%
Wholesale deposits 5
149,577

 
867

 
2.35
%
 
332,255

 
2,149

 
2.62
%
FHLB advances
224,847

 
2,089

 
3.72
%
 
271,225

 
1,510

 
2.23
%
Repurchase agreements and other borrowed funds
521,641

 
1,769

 
1.38
%
 
562,628

 
1,416

 
1.02
%
Total funding liabilities
9,072,775

 
7,774

 
0.35
%
 
8,171,523

 
7,366

 
0.37
%
Other liabilities
25,973

 
 
 
 
 
81,419

 
 
 
 
Total liabilities
9,098,748

 
 
 
 
 
8,252,942

 
 
 
 
Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
808

 
 
 
 
 
766

 
 
 
 
Paid-in capital
906,030

 
 
 
 
 
748,851

 
 
 
 
Retained earnings
420,552

 
 
 
 
 
389,798

 
 
 
 
Accumulated other comprehensive loss
(13,175
)
 
 
 
 
 
(7,090
)
 
 
 
 
Total stockholders’ equity
1,314,215

 
 
 
 
 
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
%
______________________________
1 
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.
3 
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.
4 
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.
5 
Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.


14



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 construction
100,376

 
72,160

 
68,736

 
39
 %
 
46
 %
Total residential construction
240,816

 
181,715

 
161,571

 
33
 %
 
49
 %
Land development
76,528

 
82,398

 
78,042

 
(7
)%
 
(2
)%
Consumer land or lots
119,469

 
102,289

 
94,840

 
17
 %
 
26
 %
Unimproved land
68,862

 
65,753

 
66,857

 
5
 %
 
3
 %
Developed lots for operative builders
13,093

 
14,592

 
13,046

 
(10
)%
 
 %
Commercial lots
43,232

 
23,770

 
26,639

 
82
 %
 
62
 %
Other construction
420,632

 
391,835

 
272,184

 
7
 %
 
55
 %
Total land, lot, and other construction
741,816

 
680,637

 
551,608

 
9
 %
 
34
 %
Owner occupied
1,292,206

 
1,132,833

 
988,544

 
14
 %
 
31
 %
Non-owner occupied
1,449,166

 
1,186,066

 
964,913

 
22
 %
 
50
 %
Total commercial real estate
2,741,372

 
2,318,899

 
1,953,457

 
18
 %
 
40
 %
Commercial and industrial
865,574

 
751,221

 
739,475

 
15
 %
 
17
 %
Agriculture
620,342

 
450,616

 
411,094

 
38
 %
 
51
 %
1st lien
1,014,361

 
877,335

 
839,387

 
16
 %
 
21
 %
Junior lien
66,288

 
51,155

 
54,801

 
30
 %
 
21
 %
Total 1-4 family
1,080,649

 
928,490

 
894,188

 
16
 %
 
21
 %
Multifamily residential
219,310

 
189,342

 
162,636

 
16
 %
 
35
 %
Home equity lines of credit
481,204

 
440,105

 
405,309

 
9
 %
 
19
 %
Other consumer
162,171

 
148,247

 
153,159

 
9
 %
 
6
 %
Total consumer
643,375

 
588,352

 
558,468

 
9
 %
 
15
 %
States and political subdivisions
421,252

 
383,252

 
329,461

 
10
 %
 
28
 %
Other
132,582

 
144,133

 
140,665

 
(8
)%
 
(6
)%
Total loans receivable, including loans held for sale
7,707,088

 
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.


15



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 construction
492

 
38

 
227

 
492

 

 

Total residential construction
540

 
86

 
227

 
492

 

 
48

Land development
7,802

 
7,888

 
8,856

 
775

 

 
7,027

Consumer land or lots
1,622

 
1,861

 
1,728

 
743

 

 
879

Unimproved land
10,294

 
10,866

 
12,017

 
8,638

 

 
1,656

Developed lots for operative builders
83

 
116

 
116

 

 

 
83

Commercial lots
1,312

 
1,312

 
1,255

 
260

 

 
1,052

Other construction
319

 
151

 

 
181

 

 
138

Total land, lot and other construction
21,432

 
22,194

 
23,972

 
10,597

 

 
10,835

Owner occupied
12,594

 
13,848

 
17,956

 
10,483

 
552

 
1,559

Non-owner occupied
5,346

 
4,584

 
3,194

 
4,751

 

 
595

Total commercial real estate
17,940

 
18,432

 
21,150

 
15,234

 
552

 
2,154

Commercial and industrial
6,313

 
5,294

 
4,466

 
4,956

 
1,312

 
45

Agriculture
10,476

 
3,931

 
1,878

 
8,481

 
1,995

 

1st lien
8,717

 
9,261

 
10,047

 
7,706

 
676

 
335

Junior lien
4,271

 
567

 
1,335

 
3,979

 
242

 
50

Total 1-4 family
12,988

 
9,828

 
11,382

 
11,685

 
918

 
385

Multifamily residential
652

 

 
388

 
652

 

 

Home equity lines of credit
3,312

 
3,292

 
6,008

 
2,207

 
465

 
640

Other consumer
330

 
322

 
202

 
145

 
160

 
25

Total consumer
3,642

 
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



16



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 construction
267

 
102

 
488

 
162
 %
 
(45
)%
Total residential construction
878

 
402

 
868

 
118
 %
 
1
 %
Land development
585

 

 

 
n/m

 
n/m

Consumer land or lots
485

 
353

 
432

 
37
 %
 
12
 %
Unimproved land
889

 
662

 
938

 
34
 %
 
(5
)%
Developed lots for operative builders
464

 
7

 

 
6,529
 %
 
n/m

Commercial lots
194

 
108

 
258

 
80
 %
 
(25
)%
Other construction
76

 

 
7,125

 
n/m

 
(99
)%
Total land, lot and other construction
2,693

 
1,130

 
8,753

 
138
 %
 
(69
)%
Owner occupied
13,904

 
4,726

 
6,686

 
194
 %
 
108
 %
Non-owner occupied
3,842

 
2,399

 
405

 
60
 %
 
849
 %
Total commercial real estate
17,746

 
7,125

 
7,091

 
149
 %
 
150
 %
Commercial and industrial
5,746

 
6,472

 
6,796

 
(11
)%
 
(15
)%
Agriculture
3,845

 
3,205

 
3,567

 
20
 %
 
8
 %
1st lien
9,597

 
10,865

 
7,132

 
(12
)%
 
35
 %
Junior lien
240

 
4,348

 
848

 
(94
)%
 
(72
)%
Total 1-4 family
9,837