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Section 1: 8-K (FORM 8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________
FORM 8-K
____________________________________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 18, 2019 

____________________________________________________________
GLACIER BANCORP, INC.
(Exact name of registrant as specified in its charter)
____________________________________________________________

MONTANA
000-18911
81-0519541
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer Identification No.)

49 Commons Loop, Kalispell, Montana
59901
(Address of principal executive offices)
(Zip Code)

(406) 756-4200
Registrant’s telephone number, including area code

Not Applicable
(Former name or former address, if changed since last report)
____________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02. Results of Operations and Financial Condition

On April 18, 2019, the Company issued a press release announcing its financial results for the quarter ended March 31, 2019. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information in this Item 2.02 and the Exhibit attached hereto is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such document or filing.

Item 9.01. Financial Statements and Exhibits

(d)
Exhibit 99.1 - Press Release dated April 18, 2019, announcing financial results for the quarter ended March 31, 2019.







SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:
April 18, 2019
GLACIER BANCORP, INC.
 
 
 
 
 
 
By:
/s/ Randall M. Chesler
 
 
 
Randall M. Chesler
 
 
 
President and Chief Executive Officer





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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


397576906_gbcilogostatesnewa02.jpg

NEWS RELEASE
April 18, 2019

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, 2019

1st Quarter 2019 Highlights:
Net income of $49.1 million for the current quarter, an increase of $10.5 million, or 27 percent, over the prior year first quarter net income of $38.6 million.
Current quarter diluted earnings per share of $0.58, an increase of 21 percent from the prior year first quarter diluted earnings per share of $0.48.
Current quarter loan growth was $38.5 million, or 2 percent annualized.
Core deposits grew $70.1 million, or 3 percent annualized, during the current quarter with non-interest bearing deposit growth of $49.9 million, or 7 percent annualized.
Continued credit quality improvement with non-performing assets declining $5.9 million, or 10 percent from the prior quarter.
Net interest margin of 4.34 percent as a percentage of earning assets, on a tax equivalent basis, a 4 basis points increase over the prior quarter, and a 24 basis points increase over the prior year first quarter net interest margin of 4.10 percent.
Declared and paid a quarterly dividend of $0.26 per share. The dividend was the 136th consecutive quarterly dividend declared by the Company.
On January 16, 2019, the Company announced the signing of a definitive agreement to acquire FNB Bancorp, the holding company for The First National Bank of Layton, a community bank based in Layton, Utah, with total assets of $335 million.
On April 3, 2019, the Company announced the signing of a definitive agreement to acquire Heritage Bancorp, the bank holding company for Heritage Bank of Nevada, a community bank based in Reno, Nevada, with total assets of $830 million.



1





Financial Highlights
 
At or for the Three Months ended
(Dollars in thousands, except per share and market data)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
Operating results
 
 
 
 
 
Net income
$
49,132

 
49,599

 
38,559

Basic earnings per share
$
0.58

 
0.59

 
0.48

Diluted earnings per share
$
0.58

 
0.59

 
0.48

Dividends declared per share 1
$
0.26

 
0.56

 
0.23

Market value per share
 
 
 
 
 
Closing
$
40.07

 
39.62

 
38.38

High
$
45.47

 
47.67

 
41.24

Low
$
37.58

 
36.84

 
36.72

Selected ratios and other data
 
 
 
 
 
Number of common stock shares outstanding
84,588,199

 
84,521,692

 
84,511,472

Average outstanding shares - basic
84,549,974

 
84,521,640

 
80,808,904

Average outstanding shares - diluted
84,614,248

 
84,610,018

 
80,887,135

Return on average assets (annualized)
1.67
%
 
1.66
%
 
1.50
%
Return on average equity (annualized)
13.02
%
 
13.08
%
 
11.90
%
Efficiency ratio
55.37
%
 
53.93
%
 
57.80
%
Dividend payout ratio 1
44.83
%
 
94.92
%
 
47.92
%
Loan to deposit ratio
87.14
%
 
87.64
%
 
81.83
%
Number of full time equivalent employees
2,634

 
2,623

 
2,545

Number of locations
169

 
167

 
166

Number of ATMs
222

 
222

 
223

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

KALISPELL, Mont., Apr 18, 2019 (GLOBE NEWSWIRE) - Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $49.1 million for the current quarter, an increase of $10.5 million, or 27 percent, from the $38.6 million of net income for the prior year first quarter. Diluted earnings per share for the current quarter was $0.58 per share, an increase of 21 percent from the prior year first quarter diluted earnings per share of $0.48. Included in the current quarter was $214 thousand of acquisition-related expenses. “The Glacier team delivered a great first quarter with solid business performance and the announcement of two acquisitions totaling over $1.1 billion in assets.  We continue to selectively grow the business and are pleased to see the continued improvement in our credit quality,” said Randy Chesler, President and Chief Executive Officer. “We are all very excited about the prospect of First National Bank of Layton and Heritage Bank joining the Glacier family.”

On January 16, 2019, the Company announced the signing of a definitive agreement to acquire FNB Bancorp, the holding company for The First National Bank of Layton, a community bank based in Layton, Utah (collectively, “FNB”). FNB provides banking services to individuals and businesses throughout Utah with six banking offices located in Layton, Bountiful, Clearfield, and Draper. As of December 31, 2018, FNB had total assets of $335 million, total loans of $243 million and total deposits of $285 million. The acquisition has received the required regulatory approvals, is subject to other customary conditions of closing and is expected to be completed during the second quarter of 2019. Upon closing of the transaction, FNB will become the Company’s fifteenth Bank Division.

2




On April 3, 2019, the Company announced the signing of a definitive agreement to acquire Heritage Bancorp, the bank holding company for Heritage Bank of Nevada, a community bank based in Reno, Nevada (collectively, “Heritage”). Heritage provides banking services to individuals and businesses throughout Northern Nevada with seven banking offices located in Carson City, Gardnerville, Reno and Sparks. As of December 31, 2018, Heritage had total assets of $830 million, total loans of $596 million and total deposits of $720 million. The acquisition is subject to required regulatory approvals and other customary conditions of closing and is expected to be completed during the third quarter of 2019. Upon closing of the transaction, Heritage will become the Company’s sixteenth Bank Division.

Asset Summary
 
 
 
 
 
 
 
$ Change from
(Dollars in thousands)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Cash and cash equivalents
$
202,527

 
203,790

 
451,048

 
(1,263
)
 
(248,521
)
Debt securities, available-for-sale
2,522,322

 
2,571,663

 
2,154,845

 
(49,341
)
 
367,477

Debt securities, held-to-maturity
255,572

 
297,915

 
634,413

 
(42,343
)
 
(378,841
)
Total debt securities
2,777,894

 
2,869,578

 
2,789,258

 
(91,684
)
 
(11,364
)
Loans receivable
 
 
 
 
 
 
 
 
 
Residential real estate
884,732

 
887,742

 
831,021

 
(3,010
)
 
53,711

Commercial real estate
4,686,082

 
4,657,561

 
4,251,003

 
28,521

 
435,079

Other commercial
1,909,452

 
1,911,171

 
1,839,293

 
(1,719
)
 
70,159

Home equity
562,381

 
544,688

 
489,879

 
17,693

 
72,502

Other consumer
283,423

 
286,387

 
258,834

 
(2,964
)
 
24,589

Loans receivable
8,326,070

 
8,287,549

 
7,670,030

 
38,521

 
656,040

Allowance for loan and lease losses
(129,786
)
 
(131,239
)
 
(127,608
)
 
1,453

 
(2,178
)
Loans receivable, net
8,196,284

 
8,156,310

 
7,542,422

 
39,974

 
653,862

Other assets
897,074

 
885,806

 
876,050

 
11,268

 
21,024

Total assets
$
12,073,779

 
12,115,484

 
11,658,778

 
(41,705
)
 
415,001


Total debt securities of $2.778 billion at March 31, 2019 decreased $91.7 million, or 3 percent, during the current quarter and decreased $11.4 million, or 41 basis points, from the prior year first quarter. Debt securities represented 23 percent of total assets at March 31, 2019 compared to 24 percent of total assets at December 31, 2018 and March 31, 2018.

The loan portfolio of $8.326 billion increased $38.5 million, or 2 percent annualized, during the current quarter. The loan category with the largest dollar increase was commercial real estate loans which increased $28.5 million, or 61 basis points. The loan category with the largest percentage increase was home equity loans which increased $17.7 million, or 3 percent. The loan portfolio increased $656 million, or 9 percent, since March 31, 2018, with the largest increase in commercial real estate loans, which increased $435 million, or 10 percent.


3



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,
2019
 
Dec 31,
2018
 
Mar 31,
2018
Allowance for loan and lease losses
 
 
 
 
 
Balance at beginning of period
$
131,239

 
129,568

 
129,568

Provision for loan losses
57

 
9,953

 
795

Charge-offs
(3,341
)
 
(17,807
)
 
(5,007
)
Recoveries
1,831

 
9,525

 
2,252

Balance at end of period
$
129,786

 
131,239

 
127,608

Other real estate owned
$
8,125

 
7,480

 
14,132

Accruing loans 90 days or more past due
2,451

 
2,018

 
5,402

Non-accrual loans
40,269

 
47,252

 
54,449

Total non-performing assets
$
50,845

 
56,750

 
73,983

Non-performing assets as a percentage of subsidiary assets
0.42
%
 
0.47
%
 
0.64
%
Allowance for loan and lease losses as a percentage of non-performing loans
304
%
 
266
%
 
213
%
Allowance for loan and lease losses as a percentage of total loans
1.56
%
 
1.58
%
 
1.66
%
Net charge-offs as a percentage of total loans
0.02
%
 
0.10
%
 
0.04
%
Accruing loans 30-89 days past due
$
36,894

 
33,567

 
44,963

Accruing troubled debt restructurings
$
24,468

 
25,833

 
41,649

Non-accrual troubled debt restructurings
$
6,747

 
10,660

 
13,289

U.S. government guarantees included in non-performing assets
$
2,649

 
4,811

 
4,548


The current quarter had continued improvement in non-performing assets which ended the current quarter at $50.8 million, which was a decrease of $5.9 million, or 10 percent, from the prior quarter and a decrease of $23.1 million, or 31 percent, from the prior year first quarter. Non-performing assets as a percentage of subsidiary assets at March 31, 2019 was 0.42 percent, a decrease of 5 basis points from the prior quarter, and a decrease of 22 basis points from the prior year first quarter. Early stage delinquencies (accruing loans 30-89 days past due) of $36.9 million at March 31, 2019 increased $3.3 million from prior quarter and decreased $8.1 million from prior year first quarter. Early stage delinquencies as a percentage of loans at March 31, 2019 was 0.44 percent, which was an increase of 3 basis points from prior quarter and was a decrease of 15 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, 2019 was 1.56 percent, which was a 2 basis points decrease compared to the prior quarter and a decrease of 10 basis points from a year ago with such decreases reflective of the stabilizing credit quality.


4



Credit Quality Trends and Provision for Loan Losses
(Dollars in thousands)
Provision
for Loan
Losses
 
Net
Charge-Offs
 
ALLL
as a Percent
of Loans
 
Accruing
Loans 30-89
Days Past Due
as a Percent of
Loans
 
Non-Performing
Assets to
Total Subsidiary
Assets
First quarter 2019
$
57

 
$
1,510

 
1.56
%
 
0.44
%
 
0.42
%
Fourth quarter 2018
1,246

 
2,542

 
1.58
%
 
0.41
%
 
0.47
%
Third quarter 2018
3,194

 
2,223

 
1.63
%
 
0.31
%
 
0.61
%
Second quarter 2018
4,718

 
762

 
1.66
%
 
0.50
%
 
0.71
%
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
%

Net charge-offs for the current quarter were $1.5 million compared to $2.5 million for the prior quarter and $2.8 million from the same quarter last year. Current quarter provision for loan losses was $57 thousand, compared to $1.2 million in the prior quarter and $795 thousand 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,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Deposits
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
$
3,051,119

 
3,001,178

 
2,811,469

 
49,941

 
239,650

NOW and DDA accounts
2,383,806

 
2,391,307

 
2,400,693

 
(7,501
)
 
(16,887
)
Savings accounts
1,373,544

 
1,346,790

 
1,328,047

 
26,754

 
45,497

Money market deposit accounts
1,689,962

 
1,684,284

 
1,778,068

 
5,678

 
(88,106
)
Certificate accounts
896,731

 
901,484

 
955,105

 
(4,753
)
 
(58,374
)
Core deposits, total
9,395,162

 
9,325,043

 
9,273,382

 
70,119

 
121,780

Wholesale deposits
192,953

 
168,724

 
145,463

 
24,229

 
47,490

Deposits, total
9,588,115

 
9,493,767

 
9,418,845

 
94,348

 
169,270

Repurchase agreements
489,620

 
396,151

 
395,794

 
93,469

 
93,826

Federal Home Loan Bank advances
154,683

 
440,175

 
155,057

 
(285,492
)
 
(374
)
Other borrowed funds
14,738

 
14,708

 
8,204

 
30

 
6,534

Subordinated debentures
134,048

 
134,051

 
134,061

 
(3
)
 
(13
)
Other liabilities
141,725

 
120,778

 
92,793

 
20,947

 
48,932

Total liabilities
$
10,522,929

 
10,599,630

 
10,204,754

 
(76,701
)
 
318,175



5



Core deposits of $9.395 billion as of March 31, 2019 increased $70.1 million, or 3 percent annualized, from the prior quarter and increased $122 million, or 1 percent, from the prior year first quarter. Non-interest bearing deposits increased $49.9 million, or 2 percent, over the prior quarter and increased $240 million, or 9 percent, over the prior year first quarter.

Federal Home Loan Bank (“FHLB”) advances of $155 million at March 31, 2019, decreased $285 million over the prior quarter and was stable over the prior year first quarter. FHLB advances and wholesale deposits will continue to fluctuate to supplement liquidity needs as necessary during the year.

Stockholders’ Equity Summary
 
 
 
 
 
 
 
$ Change from
(Dollars in thousands, except per share data)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Common equity
$
1,526,963

 
1,525,281

 
1,471,047

 
1,682

 
55,916

Accumulated other comprehensive income (loss)
23,887

 
(9,427
)
 
(17,023
)
 
33,314

 
40,910

Total stockholders’ equity
1,550,850

 
1,515,854

 
1,454,024

 
34,996

 
96,826

Goodwill and core deposit intangible, net
(337,134
)
 
(338,828
)
 
(343,991
)
 
1,694

 
6,857

Tangible stockholders’ equity
$
1,213,716

 
1,177,026

 
1,110,033

 
36,690

 
103,683

Stockholders’ equity to total assets
12.84
%
 
12.51
%
 
12.47
%
 
 
 
 
Tangible stockholders’ equity to total tangible assets
10.34
%
 
9.99
%
 
9.81
%
 
 
 
 
Book value per common share
$
18.33

 
17.93

 
17.21

 
0.40

 
1.12

Tangible book value per common share
$
14.35

 
13.93

 
13.13

 
0.42

 
1.22


Tangible stockholders’ equity of $1.214 billion at March 31, 2019 increased $36.7 million compared to the prior quarter which was primarily the result of an increase in other comprehensive income and earnings retention, which was partially offset by a decrease of $25.5 million from the cumulative-effect adjustments related to the adoption of new accounting standards. Tangible stockholders’ equity increased $104 million over the prior year first quarter which was the result of earnings retention and an increase in other comprehensive income, which was partially offset by the adoption of the accounting standards. Tangible book value per common share at quarter end increased $0.42 per share from the prior quarter and increased $1.22 per share from a year ago.

Cash Dividends
On March 27, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share. The dividend was payable April 18, 2019 to shareholders of record on April 9, 2019. The dividend was the 136th consecutive quarterly dividend. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.


6



Operating Results for Three Months Ended March 31, 2019 
Compared to December 31, 2018, and March 31, 2018

Income Summary
 
Three Months ended
 
$ Change from
(Dollars in thousands)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Net interest income
 
 
 
 
 
 
 
 
 
Interest income
$
126,116

 
125,310

 
103,066

 
806

 
23,050

Interest expense
10,904

 
9,436

 
7,774

 
1,468

 
3,130

Total net interest income
115,212

 
115,874

 
95,292

 
(662
)
 
19,920

Non-interest income
 
 
 
 
 
 
 
 
 
Service charges and other fees
18,015

 
19,708

 
16,871

 
(1,693
)
 
1,144

Miscellaneous loan fees and charges
967

 
1,278

 
1,477

 
(311
)
 
(510
)
Gain on sale of loans
5,798

 
5,639

 
6,097

 
159

 
(299
)
Gain (loss) on sale of investments
213

 
(357
)
 
(333
)
 
570

 
546

Other income
3,481

 
2,226

 
1,974

 
1,255

 
1,507

Total non-interest income
28,474

 
28,494

 
26,086

 
(20
)
 
2,388

Total income
$
143,686

 
144,368

 
121,378

 
(682
)
 
22,308

Net interest margin (tax-equivalent)
4.34
%
 
4.30
%
 
4.10
%
 
 
 
 

Net Interest Income
The current quarter net interest income of $115 million was stable compared to the prior quarter and increased $19.9 million, or 21 percent, from the prior year first quarter. The increase in net interest income over the prior year first quarter was primarily driven by interest rate increases and an increase in commercial loans. Interest income on commercial loans increased $1.3 million, or 2 percent, from the prior quarter and increased $18.0 million, or 28 percent, from the prior year first quarter.

The current quarter interest expense of $10.9 million increased $1.5 million, or 16 percent, over the prior quarter which was primarily driven by seasonal fluctuations in core deposits, which were supplemented using higher cost borrowings. As deposits increased during the current quarter, FHLB advances were reduced by $285 million to $155 million, the same amount at the end of the prior year first quarter. The current quarter interest expense increased $3.1 million, or 40 percent, from the prior year first quarter and was primarily due to the increased amount of deposits and other funding. The cost of core deposits for the current quarter was 19 basis points compared to 17 basis points for the prior quarter and 15 basis points in the prior year first quarter. The total cost of funding (including non-interest bearing deposits) for the current quarter was 43 basis points compared to 36 basis points for the prior quarter and 35 basis points for the prior year first quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.34 percent compared to 4.30 percent in the prior quarter. The 4 basis points increase in the net interest margin was primarily the result of increased yields on the loan portfolio. The current quarter net interest margin included 2 basis points from the recovery of interest on loans previously placed on non-accrual. The current quarter net interest margin increased 24 basis points over the prior year first quarter net interest margin of 4.10 percent. The increase in the margin from the prior year first quarter resulted from the remix of earning assets to higher yielding loans, increased yields on the loan portfolio which more than offset the increase in funding costs. “The current quarter net interest margin expansion reflects the 10 basis points higher yield on earnings assets, while the cost of core deposit funding increased 2 basis points,” said Ron Copher, Chief Financial Officer.


7



Non-interest Income
Non-interest income for the current quarter totaled $28.5 million which was comparable to the prior quarter and an increase of $2.4 million, or 9 percent, over the same quarter last year. Service charges and other fees of $18.0 million for the current quarter decreased $1.7 million, or 9 percent, from the prior quarter due to seasonality. Service charges and other fees for the current quarter increased $1.1 million, or 7 percent, from the prior year first quarter which was due to the increased number of accounts from organic growth and acquisitions. Other income increased $1.3 million from the prior quarter and increased $1.5 million over the prior year first quarter.

Non-interest Expense Summary
 
Three Months ended
 
$ Change from
(Dollars in thousands)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Compensation and employee benefits
$
52,728

 
50,385

 
45,721

 
2,343

 
7,007

Occupancy and equipment
8,437

 
7,884

 
7,274

 
553

 
1,163

Advertising and promotions
2,388

 
2,434

 
2,170

 
(46
)
 
218

Data processing
3,892

 
3,951

 
3,967

 
(59
)
 
(75
)
Other real estate owned
139

 
264

 
72

 
(125
)
 
67

Regulatory assessments and insurance
1,285

 
1,263

 
1,206

 
22

 
79

Core deposit intangibles amortization
1,694

 
1,731

 
1,056

 
(37
)
 
638

Other expenses
12,267

 
13,964

 
12,161

 
(1,697
)
 
106

Total non-interest expense
$
82,830

 
81,876

 
73,627

 
954

 
9,203


Total non-interest expense of $82.8 million for the current quarter increased $1.0 million, or 1 percent, over the prior quarter and increased $9.2 million, or 13 percent, over the prior year first quarter. Compensation and employee benefits increased by $2.3 million, or 5 percent, from the prior quarter primarily from annual salary increases and benefit adjustments. Compensation and employee benefits increased by $7.0 million, or 15 percent, from the prior year first quarter principally due to the increased number of employees driven by organic growth and the prior year first quarter acquisitions. Occupancy and equipment expense increased $1.2 million, or 16 percent, over the prior year first quarter as a result of the prior year first quarter acquisitions and general cost increases. Other expenses of $12.3 million, decreased $1.7 million, or 12 percent, from the prior quarter which was driven by decreases in several categories including acquisition-related expenses and expenses connected with equity investments in New Market Tax Credit projects. Other expenses increased $106 thousand, or 87 basis points, from the prior year first quarter and included a decrease of $1.6 million in acquisition-related expenses which was offset by a general increase in costs from organic growth and the prior year first quarter acquisitions. Acquisition-related expenses were $214 thousand during the current quarter compared to $520 thousand in the prior quarter and $1.8 million in the prior year first quarter.

Federal and State Income Tax Expense
Tax expense during the first quarter of 2019 was $11.7 million, with no change from the prior quarter and an increase of $3.3 million, or 39 percent, from the prior year first quarter. The effective tax rate in the current and prior quarter was 19 percent which compares to 18 percent in the prior year first quarter.

Efficiency Ratio
The current quarter efficiency ratio was 55.37 percent, a 144 basis points increase from the prior quarter efficiency ratio of 53.93 percent and was driven by increased operating costs combined with a slight decrease in net interest income. The current quarter efficiency ratio decreased 243 basis points from the prior year first quarter efficiency ratio of 57.80 percent and was driven by the increase in net interest income that more than offset the increased operating costs.

8




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 FederalReserve System or the Federal Reserve Board, which could adversely affect the Company’s net interest income and profitability;
changes in the cost and scope of insurance from the Federal Deposit Insurance Corporation and other third parties;
legislative or regulatory changes, including increased banking and consumer protection regulation that adversely affect the Company’s business, both generally and as a result of the Company exceeding $10 billion in total consolidated assets;
ability to complete pending or prospective future acquisitions;
costs or difficulties related to the completion and integration of acquisitions;
the goodwill the Company has recorded in connection with acquisitions could become impaired, which may have an adverse impact on earnings and capital;
reduced demand for banking products and services;
the reputation of banks and the financial services industry could deteriorate, which could adversely affect the Company's ability to obtain (and maintain) customers;
competition among financial institutions in the Company's markets may increase significantly;
the risks presented by continued public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow the Company through acquisitions;
the projected business and profitability of an expansion or the opening of a new branch could be lower than expected;
consolidation in the financial services industry in the Company’s markets resulting in the creation of larger financial institutions who may have greater resources could change the competitive landscape;
dependence on the Chief Executive Officer, the senior management team and the Presidents of Glacier Bank divisions;
material failure, potential interruption or breach in security of the Company’s systems and technological changes which could expose us to new risks (e.g., cybersecurity), fraud or system failures;
natural disasters, including fires, floods, earthquakes, and other unexpected events;
the Company’s success in managing risks involved in the foregoing; and
the effects of any reputational damage to the Company resulting from any of the foregoing.



9



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 19, 2019. 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 4067719. To participate on the webcast, log on to:https://edge.media-server.com/m6/p/hd6quiqa. 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 4067719 by May 3, 2019.

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, 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.


10



Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data)
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Assets
 
 
 
 
 
Cash on hand and in banks
$
139,333

 
161,782

 
140,625

Federal funds sold
115

 

 
230

Interest bearing cash deposits
63,079

 
42,008

 
310,193

Cash and cash equivalents
202,527

 
203,790

 
451,048

Debt securities, available-for-sale
2,522,322

 
2,571,663

 
2,154,845

Debt securities, held-to-maturity
255,572

 
297,915

 
634,413

Total debt securities
2,777,894

 
2,869,578

 
2,789,258

Loans held for sale, at fair value
29,389

 
33,156

 
37,058

Loans receivable
8,326,070

 
8,287,549

 
7,670,030

Allowance for loan and lease losses
(129,786
)
 
(131,239
)
 
(127,608
)
Loans receivable, net
8,196,284

 
8,156,310

 
7,542,422

Premises and equipment, net
277,619

 
241,528

 
238,491

Other real estate owned
8,125

 
7,480

 
14,132

Accrued interest receivable
57,367

 
54,408

 
54,376

Deferred tax asset
12,554

 
23,564

 
32,929

Core deposit intangible, net
47,548

 
49,242

 
54,456

Goodwill
289,586

 
289,586

 
289,535

Non-marketable equity securities
16,435

 
27,871

 
21,910

Bank-owned life insurance
82,819

 
82,320

 
81,787

Other assets
75,632

 
76,651

 
51,376

Total assets
$
12,073,779

 
12,115,484

 
11,658,778

Liabilities
 
 
 
 
 
Non-interest bearing deposits
$
3,051,119

 
3,001,178

 
2,811,469

Interest bearing deposits
6,536,996

 
6,492,589

 
6,607,376

Securities sold under agreements to repurchase
489,620

 
396,151

 
395,794

FHLB advances
154,683

 
440,175

 
155,057

Other borrowed funds
14,738

 
14,708

 
8,204

Subordinated debentures
134,048

 
134,051

 
134,061

Accrued interest payable
4,709

 
4,252

 
3,740

Other liabilities
137,016

 
116,526

 
89,053

Total liabilities
10,522,929

 
10,599,630

 
10,204,754

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
846

 
845

 
845

Paid-in capital
1,051,299

 
1,051,253

 
1,048,860

Retained earnings - substantially restricted
474,818

 
473,183

 
421,342

Accumulated other comprehensive income (loss)
23,887

 
(9,427
)
 
(17,023
)
Total stockholders’ equity
1,550,850

 
1,515,854

 
1,454,024

Total liabilities and stockholders’ equity
$
12,073,779

 
12,115,484

 
11,658,778



11



Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

 
Three Months ended
(Dollars in thousands, except per share data)
March 31,
2019
 
December 31,
2018
 
March 31,
2018
Interest Income
 
 
 
 
 
Debt securities
$
21,351

 
22,016

 
20,142

Residential real estate loans
10,779

 
10,751

 
8,785

Commercial loans
83,539

 
82,238

 
65,515

Consumer and other loans
10,447

 
10,305

 
8,624

Total interest income
126,116

 
125,310

 
103,066

Interest Expense
 
 
 
 
 
Deposits
5,341

 
4,989

 
3,916

Securities sold under agreements to repurchase
802

 
707

 
485

Federal Home Loan Bank advances
3,055

 
2,146

 
2,089

Other borrowed funds
38

 
(10
)
 
16

Subordinated debentures
1,668

 
1,604

 
1,268

Total interest expense
10,904

 
9,436

 
7,774

Net Interest Income
115,212

 
115,874

 
95,292

Provision for loan losses
57

 
1,246

 
795

Net interest income after provision for loan losses
115,155

 
114,628

 
94,497

Non-Interest Income
 
 
 
 
 
Service charges and other fees
18,015

 
19,708

 
16,871

Miscellaneous loan fees and charges
967

 
1,278

 
1,477

Gain on sale of loans
5,798

 
5,639

 
6,097

Gain (loss) on sale of debt securities
213

 
(357
)
 
(333
)
Other income
3,481

 
2,226

 
1,974

Total non-interest income
28,474

 
28,494

 
26,086

Non-Interest Expense
 
 
 
 
 
Compensation and employee benefits
52,728

 
50,385

 
45,721

Occupancy and equipment
8,437

 
7,884

 
7,274

Advertising and promotions
2,388

 
2,434

 
2,170

Data processing
3,892

 
3,951

 
3,967

Other real estate owned
139

 
264

 
72

Regulatory assessments and insurance
1,285

 
1,263

 
1,206

Core deposit intangibles amortization
1,694

 
1,731

 
1,056

Other expenses
12,267

 
13,964

 
12,161

Total non-interest expense
82,830

 
81,876

 
73,627

Income Before Income Taxes
60,799

 
61,246

 
46,956

Federal and state income tax expense
11,667

 
11,647

 
8,397

Net Income
$
49,132

 
49,599

 
38,559


12



Glacier Bancorp, Inc.
Average Balance Sheets

 
Three Months ended
 
March 31, 2019
 
March 31, 2018
(Dollars in thousands)
Average
Balance
 
Interest &
Dividends
 
Average
Yield/
Rate
 
Average
Balance
 
Interest &
Dividends
 
Average
Yield/
Rate
Assets
 
 
 
 
 
 
 
 
 
 
 
Residential real estate loans
$
917,324

 
$
10,779

 
4.70
%
 
$
783,817

 
$
8,785

 
4.48
%
Commercial loans 1
6,524,190

 
84,613

 
5.26
%
 
5,551,619

 
66,474

 
4.86
%
Consumer and other loans
839,011

 
10,447

 
5.05
%
 
719,153

 
8,624

 
4.86
%
Total loans 2
8,280,525

 
105,839

 
5.18
%
 
7,054,589

 
83,883

 
4.82
%
Tax-exempt debt securities 3
960,569

 
9,950

 
4.14
%
 
1,093,736

 
12,795

 
4.68
%
Taxable debt securities 4
1,845,677

 
13,729

 
2.98
%
 
1,654,318

 
10,273

 
2.48
%
Total earning assets
11,086,771

 
129,518

 
4.74
%
 
9,802,643

 
106,951

 
4.42
%
Goodwill and intangibles
337,963

 
 
 
 
 
219,463

 
 
 
 
Non-earning assets
520,353

 
 
 
 
 
390,857

 
 
 
 
Total assets
$
11,945,087

 
 
 
 
 
$
10,412,963

 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Non-interest bearing deposits
$
2,943,770

 
$

 
%
 
$
2,472,151

 
$

 
%
NOW and DDA accounts
2,320,928

 
961

 
0.17
%
 
2,011,464

 
818

 
0.16
%
Savings accounts
1,359,807

 
234

 
0.07
%
 
1,184,807

 
193

 
0.07
%
Money market deposit accounts
1,690,305

 
1,010

 
0.24
%
 
1,631,863

 
719

 
0.18
%
Certificate accounts
905,005

 
2,014

 
0.90
%
 
876,425

 
1,319

 
0.61
%
Total core deposits
9,219,815

 
4,219

 
0.19
%
 
8,176,710

 
3,049

 
0.15
%
Wholesale deposits 5
169,361

 
1,122

 
2.69
%
 
149,577

 
867

 
2.35
%
FHLB advances
352,773

 
3,055

 
3.46
%
 
224,847

 
2,089

 
3.72
%
Repurchase agreements and other borrowed funds
556,325

 
2,508

 
1.83
%
 
521,641

 
1,769

 
1.38
%
Total funding liabilities
10,298,274

 
10,904

 
0.43
%
 
9,072,775

 
7,774

 
0.35
%
Other liabilities
116,143

 
 
 
 
 
25,973

 
 
 
 
Total liabilities
10,414,417

 
 
 
 
 
9,098,748

 
 
 
 
Stockholders’ Equity
 
 
 
 
 
 
 
 
 
 
 
Common stock
846

 
 
 
 
 
808

 
 
 
 
Paid-in capital
1,051,261

 
 
 
 
 
906,030

 
 
 
 
Retained earnings
471,626

 
 
 
 
 
420,552

 
 
 
 
Accumulated other comprehensive loss
6,937

 
 
 
 
 
(13,175
)
 
 
 
 
Total stockholders’ equity
1,530,670

 
 
 
 
 
1,314,215

 
 
 
 
Total liabilities and stockholders’ equity
$
11,945,087

 
 
 
 
 
$
10,412,963

 
 
 
 
Net interest income (tax-equivalent)
 
 
$
118,614

 
 
 
 
 
$
99,177

 
 
Net interest spread (tax-equivalent)
 
 
 
 
4.31
%
 
 
 
 
 
4.07
%
Net interest margin (tax-equivalent)
 
 
 
 
4.34
%
 
 
 
 
 
4.10
%
______________________________
1 
Includes tax effect of $1.1 million and $959 thousand on tax-exempt municipal loan and lease income for the three months ended March 31, 2019 and 2018, respectively.
2 
Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.
3 
Includes tax effect of $2.0 million and $2.6 million on tax-exempt debt securities income for the three months ended March 31, 2019 and 2018, respectively.
4 
Includes tax effect of $293 thousand and $304 thousand on federal income tax credits for the three months ended March 31, 2019 and 2018.
5 
Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.



13



Glacier Bancorp, Inc.
Loan Portfolio by Regulatory Classification

 
Loans Receivable, by Loan Type
 
% Change from
(Dollars in thousands)
Mar 31,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Custom and owner occupied construction
$
126,820

 
$
126,595

 
$
140,440

 
 %
 
(10
)%
Pre-sold and spec construction
135,137

 
121,938

 
100,376

 
11
 %
 
35
 %
Total residential construction
261,957

 
248,533

 
240,816

 
5
 %
 
9
 %
Land development
126,417

 
137,814

 
76,528

 
(8
)%
 
65
 %
Consumer land or lots
125,818

 
127,775

 
119,469

 
(2
)%
 
5
 %
Unimproved land
75,113

 
83,579

 
68,862

 
(10
)%
 
9
 %
Developed lots for operative builders
16,171

 
17,061

 
13,093

 
(5
)%
 
24
 %
Commercial lots
35,511

 
34,096

 
43,232

 
4
 %
 
(18
)%
Other construction
454,965

 
520,005

 
420,632

 
(13
)%
 
8
 %
Total land, lot, and other construction
833,995

 
920,330

 
741,816

 
(9
)%
 
12
 %
Owner occupied
1,367,530

 
1,343,563

 
1,292,206

 
2
 %
 
6
 %
Non-owner occupied
1,662,390

 
1,605,960

 
1,449,166

 
4
 %
 
15
 %
Total commercial real estate
3,029,920

 
2,949,523

 
2,741,372

 
3
 %
 
11
 %
Commercial and industrial
922,124

 
907,340

 
865,574

 
2
 %
 
7
 %
Agriculture
641,146

 
646,822

 
620,342

 
(1
)%
 
3
 %
1st lien
1,102,920

 
1,108,227

 
1,014,361

 
 %
 
9
 %
Junior lien
54,964

 
56,689

 
66,288

 
(3
)%
 
(17
)%
Total 1-4 family
1,157,884

 
1,164,916

 
1,080,649

 
(1
)%
 
7
 %
Multifamily residential
268,156

 
247,457

 
219,310

 
8
 %
 
22
 %
Home equity lines of credit
557,895

 
539,938

 
481,204

 
3
 %
 
16
 %
Other consumer
163,568

 
165,865

 
162,171

 
(1
)%
 
1
 %
Total consumer
721,463

 
705,803

 
643,375

 
2
 %
 
12
 %
States and political subdivisions
398,848

 
404,671

 
421,252

 
(1
)%
 
(5
)%
Other
119,966

 
125,310

 
132,582

 
(4
)%
 
(10
)%
Total loans receivable, including loans held for sale
8,355,459

 
8,320,705

 
7,707,088

 
 %
 
8
 %
Less loans held for sale 1
(29,389
)
 
(33,156
)
 
(37,058
)
 
(11
)%
 
(21
)%
Total loans receivable
$
8,326,070

 
$
8,287,549

 
$
7,670,030

 
 %
 
9
 %
______________________________
1 Loans held for sale are primarily 1st lien 1-4 family loans.


14



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,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Mar 31,
2019
 
Mar 31,
2019
 
Mar 31,
2019
Custom and owner occupied construction
$

 

 
48

 

 

 

Pre-sold and spec construction
456

 
463

 
492

 
456

 

 

Total residential construction
456

 
463

 
540

 
456

 

 

Land development
2,272

 
2,166

 
7,802

 
713

 

 
1,559

Consumer land or lots
1,126

 
1,428

 
1,622

 
635

 

 
491

Unimproved land
9,222

 
9,338

 
10,294

 
7,648

 
42

 
1,532

Developed lots for operative builders
67

 
68

 
83

 
42

 

 
25

Commercial lots
663

 
1,046

 
1,312

 

 

 
663

Other construction
111

 
120

 
319

 

 

 
111

Total land, lot and other construction
13,461

 
14,166

 
21,432

 
9,038

 
42

 
4,381

Owner occupied
7,229

 
5,940

 
12,594

 
5,953

 
42

 
1,234

Non-owner occupied
7,368

 
10,567

 
5,346

 
7,368

 

 

Total commercial real estate
14,597

 
16,507

 
17,940

 
13,321

 
42

 
1,234

Commercial and industrial
3,893

 
3,914

 
6,313

 
3,602

 
57

 
234

Agriculture
4,488

 
7,040

 
10,476

 
3,397

 
941

 
150

1st lien
10,279

 
10,290

 
8,717

 
7,198

 
1,193

 
1,888

Junior lien
582

 
565

 
4,271

 
512

 
70

 

Total 1-4 family
10,861

 
10,855

 
12,988

 
7,710

 
1,263

 
1,888

Multifamily residential

 

 
652

 

 

 

Home equity lines of credit
2,288

 
2,770

 
3,312

 
2,100

 

 
188

Other consumer
453

 
456

 
330

 
330

 
73

 
50

Total consumer
2,741

 
3,226

 
3,642

 
2,430

 
73

 
238

Other
348

 
579

 

 
315

 
33

 

Total
$
50,845

 
56,750

 
73,983

 
40,269

 
2,451

 
8,125



15



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,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Dec 31,
2018
 
Mar 31,
2018
Custom and owner occupied construction
$
282

 
$
1,661

 
$
611

 
(83
)%
 
(54
)%
Pre-sold and spec construction
553

 
887

 
267

 
(38
)%
 
107
 %
Total residential construction
835

 
2,548

 
878

 
(67
)%
 
(5
)%
Land development

 
228

 
585

 
(100
)%
 
(100
)%
Consumer land or lots
510

 
200

 
485

 
155
 %
 
5
 %
Unimproved land
685

 
579

 
889

 
18
 %
 
(23
)%
Developed lots for operative builders
4

 
122

 
464

 
(97
)%
 
(99
)%
Commercial lots
331

 
203

 
194

 
63
 %
 
71
 %
Other construction
1,234

 
4,170

 
76

 
(70
)%
 
1,524
 %
Total land, lot and other construction
2,764

 
5,502

 
2,693

 
(50
)%
 
3
 %
Owner occupied
4,463

 
2,981

 
13,904

 
50
 %
 
(68
)%
Non-owner occupied
6,604

 
1,245

 
3,842

 
430
 %
 
72
 %
Total commercial real estate
11,067

 
4,226

 
17,746

 
162
 %
 
(38
)%
Commercial and industrial
4,070

 
3,374

 
5,746

 
21
 %
 
(29
)%
Agriculture
5,709

 
6,455

 
3,845

 
(12
)%
 
48
 %
1st lien
7,179

 
5,384

 
9,597

 
33
 %
 
(25
)%
Junior lien
583

 
118

 
240

 
394
 %
 
143
 %
Total 1-4 family
7,762

 
5,502

 
9,837

 
41
 %
 
(21
)%
Home equity lines of credit
2,925

 
3,562

 
2,316

 
(18
)%
 
26
 %
Other consumer
1,357

 
1,650

 
1,849

 
(18
)%
 
(27
)%
Total consumer
4,282

 
5,212

 
4,165

 
(18
)%
 
3
 %
States and political subdivisions

 
229

 

 
(100
)%
 
n/m

Other
405

 
519

 
53

 
(22
)%
 
664
 %
Total
$
36,894

 
$
33,567

 
$
44,963

 
10
 %
 
(18
)%
______________________________
n/m - not measurable



16



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,
2019
 
Dec 31,
2018
 
Mar 31,
2018
 
Mar 31,
2019
 
Mar 31,
2019
Pre-sold and spec construction
$
(4
)
 
(352
)
 
(339
)
 

 
4

Land development
23

 
(116
)
 
(5
)
 
42

 
19

Consumer land or lots
(20
)
 
(146
)
 
(3
)
 
15

 
35

Unimproved land
(9
)
 
(445
)
 
(73
)
 

 
9

Developed lots for operative builders

 
33

 

 

 

Commercial lots
(2
)
 
1

 
(2