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<ACCESSION-NUMBER>0000868671-20-000072
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>92
<PERIOD>20200630
<FILING-DATE>20200731
<DATE-OF-FILING-DATE-CHANGE>20200731
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<CONFORMED-NAME>GLACIER BANCORP, INC.
<CIK>0000868671
<ASSIGNED-SIC>6022
<IRS-NUMBER>810519541
<STATE-OF-INCORPORATION>MT
<FISCAL-YEAR-END>1231
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<FILE-NUMBER>000-18911
<FILM-NUMBER>201065102
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<BUSINESS-ADDRESS>
<STREET1>49 COMMONS LOOP
<CITY>KALISPELL
<STATE>MT
<ZIP>59901
<PHONE>406-751-7708
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<STREET1>49 COMMONS LOOP
<CITY>KALISPELL
<STATE>MT
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<FORMER-CONFORMED-NAME>GLACIER BANCORP INC
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Section 1: 10-Q (FORM 10-Q)

gbci-20200630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________________________

FORM 10-Q

____________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________

Commission file number 000-18911

____________________________________________________________

GLACIER BANCORP, INC.

(Exact name of registrant as specified in its charter)

____________________________________________________________

Montana

81-0519541

(State or other jurisdiction of incorporation or organization)

(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)

____________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	GBCI	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of Registrant’s common stock outstanding on July 17, 2020 was 95,409,061. No preferred shares are issued or outstanding.

TABLE OF CONTENTS


			Page
Part I. Financial Information
Item 1 – Financial Statements
Unaudited Condensed Consolidated Statements of Financial Condition – June 30, 2020 and December 31, 2019			4
Unaudited Condensed Consolidated Statements of Operations – Three and Six Months ended June 30, 2020 and 2019			5
Unaudited Condensed Consolidated Statements of Comprehensive Income – Three and Six Months ended June 30, 2020 and 2019			6
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity – Three and Six Months ended June 30, 2020 and 2019			7
Unaudited Condensed Consolidated Statements of Cash Flows – Six Months ended June 30, 2020 and 2019			9
Notes to Unaudited Condensed Consolidated Financial Statements			11
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			47
Item 3 – Quantitative and Qualitative Disclosure about Market Risk			79
Item 4 – Controls and Procedures			79
Part II. Other Information			79
Item 1 – Legal Proceedings			79
Item 1A – Risk Factors			79
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			80
Item 3 – Defaults upon Senior Securities			80
Item 4 – Mine Safety Disclosures			80
Item 5 – Other Information			80
Item 6 – Exhibits			81
Signatures			82

ABBREVIATIONS/ACRONYMS


ACL or allowance – allowance for credit losses
ALCO – Asset Liability Committee
ASC – Accounting Standards Codification^TM
ASU – Accounting Standards Update
ATM – automated teller machine
Bank – Glacier Bank
CARES Act – Coronavirus Aid, Relief, and Economic Security Act
CDE – Certified Development Entity
CDFI Fund – Community Development Financial Institutions Fund
CECL – current expected credit losses
CEO – Chief Executive Officer
CFO – Chief Financial Officer
Company – Glacier Bancorp, Inc.
COVID-19 – coronavirus disease of 2019
DDA – demand deposit account
Fannie Mae – Federal National Mortgage Association
FASB – Financial Accounting Standards Board
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
Final Rules – final rules implemented by the federal banking agencies that established a new comprehensive regulatory capital framework
FRB – Federal Reserve Bank
Freddie Mac – Federal Home Loan Mortgage Corporation
GAAP – accounting principles generally accepted in the United States of America
GDP – gross domestic product
Ginnie Mae – Government National Mortgage Association
Interest rate locks - residential real estate derivatives for commitments
LIBOR – London Interbank Offered Rate
LIHTC – Low Income Housing Tax Credit
NMTC – New Markets Tax Credit
NOW – negotiable order of withdrawal
NRSRO – Nationally Recognized Statistical Rating Organizations
OCI – other comprehensive income
OREO – other real estate owned
PCD – purchased credit-deteriorated
PPP – Paycheck Protection Program
Repurchase agreements – securities sold under agreements to repurchase
ROU – right-of-use
S&P – Standard and Poor’s
SBA – United States Small Business Administration
SBAZ – State Bank Corp. and its subsidiary, State Bank of Arizona
SEC – United States Securities and Exchange Commission
TBA – to-be-announced
TDR – troubled debt restructuring
VIE – variable interest entity

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


(Dollars in thousands, except per share data)	June 30, 2020		December 31, 2019
Assets
Cash on hand and in banks	$	212,681	198,639

Interest bearing cash deposits	334,929		132,322
Cash and cash equivalents	547,610		330,961
Debt securities, available-for-sale	3,533,950		2,575,252
Debt securities, held-to-maturity	203,275		224,611
Total debt securities	3,737,225		2,799,863
Loans held for sale, at fair value	115,345		69,194
Loans receivable	11,453,378		9,512,810
Allowance for credit losses	(162,509)		(124,490)
Loans receivable, net	11,290,869		9,388,320
Premises and equipment, net	326,005		310,309
Other real estate owned	4,743		5,142
Accrued interest receivable	77,363		56,047
Deferred tax asset	—		2,037
Core deposit intangible, net	60,733		63,286
Goodwill	513,355		456,418
Non-marketable equity securities	11,592		11,623
Bank-owned life insurance	122,388		109,428
Other assets	99,420		81,371
Total assets	$	16,906,648	13,683,999
Liabilities
Non-interest bearing deposits	$	5,043,704	3,696,627
Interest bearing deposits	8,337,828		7,079,830
Securities sold under agreements to repurchase	881,227		569,824
Federal Home Loan Bank advances	37,963		38,611
Other borrowed funds	32,546		28,820
Subordinated debentures	139,917		139,914
Accrued interest payable	4,211		4,686
Deferred tax liability	25,213		—
Other liabilities	200,324		164,954
Total liabilities	14,702,933		11,723,266
Commitments and Contingent Liabilities
Stockholders’ Equity
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding	—		—
Common stock, $0.01 par value per share, 117,187,500 shares authorized	954		923
Paid-in capital	1,492,817		1,378,534
Retained earnings - substantially restricted	580,035		541,050
Accumulated other comprehensive income	129,909		40,226
Total stockholders’ equity	2,203,715		1,960,733
Total liabilities and stockholders’ equity	$	16,906,648	13,683,999
Number of common stock shares issued and outstanding	95,409,061		92,289,750

See accompanying notes to unaudited condensed consolidated financial statements.

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months ended				Six Months ended
(Dollars in thousands, except per share data)	June 30, 2020		June 30, 2019	June 30, 2020	June 30, 2019
Interest Income
Investment securities	$	25,833	21,892	46,847	43,243
Residential real estate loans	12,098		11,410	23,624	22,189
Commercial loans	106,343		88,043	205,027	171,582
Consumer and other loans	11,130		11,040	22,771	21,487
Total interest income	155,404		132,385	298,269	258,501
Interest Expense
Deposits	4,587		5,624	10,168	10,965
Securities sold under agreements to repurchase	908		886	1,897	1,688
Federal Home Loan Bank advances	268		3,847	614	6,902
Other borrowed funds	172		38	300	76
Subordinated debentures	1,250		1,694	2,702	3,362
Total interest expense	7,185		12,089	15,681	22,993
Net Interest Income	148,219		120,296	282,588	235,508
Credit loss expense	13,552		—	36,296	57
Net interest income after credit loss expense	134,667		120,296	246,292	235,451
Non-Interest Income
Service charges and other fees	11,366		20,025	25,386	38,040
Miscellaneous loan fees and charges	1,682		1,192	2,967	2,159
Gain on sale of loans	25,858		7,762	37,720	13,560
Gain on sale of debt securities	128		134	991	347
Other income	2,190		1,721	7,432	5,202
Total non-interest income	41,224		30,834	74,496	59,308
Non-Interest Expense
Compensation and employee benefits	57,981		51,973	117,641	104,701
Occupancy and equipment	9,357		8,180	18,576	16,617
Advertising and promotions	2,138		2,767	4,625	5,155
Data processing	5,042		4,062	10,324	7,954
Other real estate owned	75		191	187	330
Regulatory assessments and insurance	1,037		1,848	2,127	3,133

Core deposit intangibles amortization	2,613		1,865	5,146	3,559
Other expenses	19,898		15,284	31,443	27,551
Total non-interest expense	98,141		86,170	190,069	169,000
Income Before Income Taxes	77,750		64,960	130,719	125,759
Federal and state income tax expense	14,306		12,568	23,936	24,235
Net Income	$	63,444	52,392	106,783	101,524
Basic earnings per share	$	0.67	0.61	1.13	1.19
Diluted earnings per share	$	0.66	0.61	1.13	1.19
Dividends declared per share	$	0.29	0.27	0.58	0.53
Average outstanding shares - basic	95,405,493		85,826,290	94,346,582	85,191,658
Average outstanding shares - diluted	95,430,403		85,858,286	94,395,930	85,241,238

See accompanying notes to unaudited condensed consolidated financial statements.

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months ended				Six Months ended
(Dollars in thousands)	June 30, 2020		June 30, 2019	June 30, 2020	June 30, 2019
Net Income	$	63,444	52,392	106,783	101,524
Other Comprehensive Income, Net of Tax
Unrealized gains on available-for-sale securities	41,014		29,877	121,569	76,329
Reclassification adjustment for gains included in net income	(128)		(134)	(990)	(355)
Net unrealized gains on available-for-sale securities	40,886		29,743	120,579	75,974
Tax effect	(10,360)		(7,537)	(30,555)	(19,252)
Net of tax amount	30,526		22,206	90,024	56,722
Unrealized losses on derivatives used for cash flow hedges	(456)		(3,820)	(456)	(5,654)
Reclassification adjustment for losses included in net income	—		278	—	501
Net unrealized losses on derivatives used for cash flow hedges	(456)		(3,542)	(456)	(5,153)
Tax effect	115		897	115	1,306
Net of tax amount	(341)		(2,645)	(341)	(3,847)
Total other comprehensive income, net of tax	30,185		19,561	89,683	52,875
Total Comprehensive Income	$	93,629	71,953	196,466	154,399

See accompanying notes to unaudited condensed consolidated financial statements.

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

Three Months ended June 30, 2020 and 2019


(Dollars in thousands, except per share data)	Common Stock						Paid-in Capital	Retained Earnings Substantially Restricted	Accumulated Other Compre- hensive Income
		Shares			Amount					Total
Balance at April 1, 2019	84,588,199		$	846		1,051,299	474,818	23,887	1,550,850
Net income	—		—			—	52,392	—	52,392
Other comprehensive income	—		—			—	—	19,561	19,561
Cash dividends declared ($0.27 per share)	—		—			—	(23,437)	—	(23,437)
Stock issued in connection with acquisitions	2,046,341		20			87,133	—	—	87,153
Stock issuances under stock incentive plans	2,854		—			—	—	—	—
Stock-based compensation and related taxes	—		—			857	—	—	857

Balance at June 30, 2019	86,637,394		$	866		1,139,289	503,773	43,448	1,687,376
Balance at April 1, 2020	95,408,274		$	954		1,491,651	544,315	99,724	2,136,644
Net income	—		—			—	63,444	—	63,444
Other comprehensive income	—		—			—	—	30,185	30,185
Cash dividends declared ($0.29 per share)	—		—			—	(27,724)	—	(27,724)

Stock issuances under stock incentive plans	787		—			—	—	—	—
Stock-based compensation and related taxes	—		—			1,166	—	—	1,166

Balance at June 30, 2020	95,409,061		$	954		1,492,817	580,035	129,909	2,203,715

See accompanying notes to unaudited condensed consolidated financial statements.

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY

Six Months ended June 30, 2020 and 2019


(Dollars in thousands, except per share data)	Common Stock						Paid-in Capital	Retained Earnings Substantially Restricted	Accumulated Other Compre- hensive (Loss) Income
		Shares			Amount					Total
Balance at January 1, 2019	84,521,692		$	845		1,051,253	473,183	(9,427)	1,515,854
Net income	—		—			—	101,524	—	101,524
Other comprehensive income	—		—			—	—	52,875	52,875
Cash dividends declared ($0.53 per share)	—		—			—	(45,476)	—	(45,476)
Stock issued in connection with acquisitions	2,046,341		20			87,133	—	—	87,153
Stock issuances under stock incentive plans	69,361		1			(1)	—	—	—
Stock-based compensation and related taxes	—		—			904	—	—	904
Cumulative-effect of accounting changes	—		—			—	(25,458)	—	(25,458)
Balance at June 30, 2019	86,637,394		$	866		1,139,289	503,773	43,448	1,687,376
Balance at January 1, 2020	92,289,750		$	923		1,378,534	541,050	40,226	1,960,733
Net income	—		—			—	106,783	—	106,783
Other comprehensive income	—		—			—	—	89,683	89,683
Cash dividends declared ($0.58 per share)	—		—			—	(55,451)	—	(55,451)
Stock issued in connection with acquisitions	3,007,044		30			112,103	—	—	112,133
Stock issuances under stock incentive plans	112,267		1			(1)	—	—	—
Stock-based compensation and related taxes	—		—			2,181	—	—	2,181
Cumulative-effect of accounting changes	—		—			—	(12,347)	—	(12,347)
Balance at June 30, 2020	95,409,061		$	954		1,492,817	580,035	129,909	2,203,715

See accompanying notes to unaudited condensed consolidated financial statements.

GLACIER BANCORP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months ended
(Dollars in thousands)	June 30, 2020		June 30, 2019
Operating Activities
Net income	$	106,783	101,524
Adjustments to reconcile net income to net cash provided by operating activities:
Credit loss expense	36,296		57
Net amortization of debt securities	6,831		8,707
Net amortization (accretion) of purchase accounting adjustments and deferred loan fees and costs