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Section 1: 8-K (8-K)

8-K
false 0000868671 0000868671 2020-09-09 2020-09-09

 

 

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): September 9, 2020

 

 

GLACIER BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

 

Montana

(State or other jurisdiction of incorporation)

 

(Commission File Number)   (IRS Employer Identification No.)
000-18911   81-0519541

49 Commons Loop

Kalispell, Montana 59901

(Address of principal executive offices) (zip code)

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

 

 

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 (see General Instruction A.2 below):

 

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))

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

 

Title of each Class

 

Trading

Symbol(s)

 

Name of each exchange

on which Registered

Common Stock, $0.01 par value   GBCI   NASDAQ

Indicate by check mark whether the registrant is an emerging growth company 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 7.01

REGULATION FD DISCLOSURE

On September 9, 2020, Glacier Bancorp, Inc. (the “Company”), Kalispell, Montana, posted a new investor presentation on its website. The presentation, furnished as Exhibit 99.1 to this report and incorporated herein by reference, updates the previously furnished presentation issued on May 18, 2020.

 

Item 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits:

The new investor presentation described in Item 7.01 is furnished with this report as Exhibit 99.1.

EXHIBIT INDEX

 

Exhibit

  

Description

99.1    Investor Presentation
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

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.

 

    GLACIER BANCORP, INC.
Dated: September 10, 2020     By:  

/s/ Randall M. Chesler

      Randall M. Chesler
      President and Chief Executive Officer
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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Slide 0

Investor Presentation September 2020 Exhibit 99.1


Slide 1

Forward-Looking Statements This presentation 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 presentation: 1) the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio; 2) 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; 3) changes in the cost and scope of insurance from the FDIC and other third parties; 4) legislative or regulatory changes, such as the recently adopted CARES Act addressing the economic effects of the COVID-19 pandemic, as well as increased banking and consumer protection regulation that adversely affect the Company’s business, both generally and as a result of the Company exceeding $10 billion in total consolidated assets; 5) ability to complete pending or prospective future acquisitions; 6) costs or difficulties related to the completion and integration of acquisitions; 7) the goodwill the Company has recorded in connection with acquisitions could become impaired, which may have an adverse impact on earnings and capital; 8) reduced demand for banking products and services; 9) the reputation of banks and the financial services industry could deteriorate, which could adversely affect the Company's ability to obtain (and maintain) customers; 10) competition among financial institutions in the Company's markets may increase significantly; 11) 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; 12) the projected business and profitability of an expansion or the opening of a new branch could be lower than expected; 13) 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; 14) dependence on the CEO, the senior management team and the Presidents of Glacier Bank divisions; 15) 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; 16) natural disasters, including fires, floods, earthquakes, and other unexpected events; 17) the Company’s success in managing risks involved in the foregoing; and 18) 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, revise, 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, except as required under federal securities laws.


Slide 2

Glacier Bancorp, Inc. 6/30/2020 Snapshot Ticker GBCI Total Assets $16.91 billion Gross Loans $11.45 billion Deposits $13.38 billion TCBV Per Share $17.08 Quarterly Dividend $0.29 Stock Price $35.29 Market Cap $3.37 billion


Slide 3

Differentiated Bank Model Genuine community banking model Backed by resources and support of Glacier Bancorp Strategy of growth through acquisitions and organically


Slide 4

Glacier is a “Company of Banks”


Slide 5

2019 Announced Acquisition Highlights


Slide 6

WY ID UT AZ NV WA CO MT 16 Bank Divisions 192 locations (as of 6/30/2020)


Slide 7

3/31/20 GBCI Geography Total chartered banks 315 Total target banks 206 Assets under $1B 185 Assets $1 – $3.5B 21


Slide 8

Solid Financial Results


Slide 9

5 Year Total Return 6/30/2015 – 6/30/2020


Slide 10

1 Year Total Return 6/30/2019 – 6/30/2020


Slide 11

Forbes Performance Ranking of America’s 100 Largest Banks


Slide 12

Bank Director Bank Performance Scorecard $5 Billion up to $50 Billion


Slide 13

Reconciliation of 2017 Non-GAAP Measures to GAAP In addition to the results presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this presentation 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. This 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 was the current quarter one-time tax expense of $19.7 million. The one-time tax expense was driven by the Tax Cuts and Job Act (“Tax Act”) and the change in the current year federal marginal rate of 35 percent to 21 percent for future years, which resulted in revaluation of 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.


Slide 14

Diluted Earnings Per Share Second quarter 2020 earnings per share decreased $0.05 per share, or 8%, over prior year second quarter First half 2020 earnings includes: Credit loss expense of $36.3 million largely due to CECL Acquisition-related expenses of $6.5 million Gain of $2.3 million from sale of a former branch building Core earnings remain strong * Non-GAAP (see reconciliation on slide 16) $1.13


Slide 15

ROA in the first quarter of 2020 was in the 92nd* percentile among Glacier’s peer group Return on Assets * Non-GAAP (see reconciliation on slide 16) * BHCPR as of 3/31/2020


Slide 16

Return on Tangible Equity We maintain historically high capital levels which have made it more difficult to produce higher ROTE * Non-GAAP (see reconciliation on slide 16)


Slide 17

Net Interest Margin First half of 2020 net interest margin of 4.23% decreased 10 basis points over the 2019 second quarter net interest margin of 4.33% (Dollars in millions) *Net interest income and margin is annualized


Slide 18

Efficiency Ratio First half of 2020 efficiency ratio improvement was driven by increases in gain on sale of loans and commercial loan interest income that more than offset the decreases in service fee income from the Durbin amendment and increases in compensation expenses Excluding $18.9 million of expenses(*) incurred in the third quarter of 2019, the 2019 efficiency ratio would be 54.8% * $5.4 million of accelerated stock compensation expense from the Heritage acquisition * $3.5 million write-off of deferred prepayment penalties on FHLB advances * $10.0 million loss on early termination of interest rate swaps


Slide 19

Strong Balance Sheet


Slide 20

Asset Trends Total assets increased $3.2 billion, or 24%, in the first half of 2020, including $744 million from State Bank of Arizona Total assets grew $1.6 billion, or 13%, in 2019, including $379 million from First National Bank of Layton and $978 million from Heritage Bank of Nevada (Dollars in millions)


Slide 21

Capital Ratios Relative to Peers* Total risk based capital ranks in the 68th percentile among Glacier’s peer group Capacity to add $5.1 billion of assets and still maintain an 8% leverage ratio * BHCPR as of 3/31/2020


Slide 22

Ample Liquidity of $11.2 Billion Ready access to liquidity totaling $7.7 billion $5.6 billion in available borrowing capacity Fed Discount Window: $1.2 billion Fed PPP Liquidity Facility: $1.4 billion (Based on PPP loans funded as of June 30, 2020) FHLB: $2.6 billion Correspondent banks: $0.4 billion $1.6 billion of unpledged marketable securities Cash of $0.5 billion Additional liquidity totaling $3.5 billion Access to brokered deposits: $2.5 billion Over-pledged marketable securities: $0.2 billion Loans eligible for pledging at FHLB: $0.8 billion Core deposit growth remains strong


Slide 23

Deposit Trends First half 2020 deposits increased $2.6 billion, or 24%, including $603 million from State Bank of Arizona Organic deposit growth for the first half 2020 was $2.0 billion, or 19% Growth in the number of deposit accounts has also increased significantly the past several years (Dollars in millions)


Slide 24

Deposit Composition


Slide 25

Non-Interest Bearing Deposits Non-interest bearing deposits increased $1.3 billion, or 36%, during first half 2020, including $142 million from State Bank of Arizona Non-interest bearing deposits comprise 38% of total deposits Organic growth for the first half 2020 was $1.2 billion, or 33% (Dollars in millions)


Slide 26

Deposit Costs Relative to Peers Total deposit costs have remained stable while Glacier’s peer group costs have increased Core deposits are a competitive advantage and will be a key driver of future performance


Slide 27

Loan Trends First half of 2020 gross loans increased $1.940 billion, or 20%, including $452 million from State Bank of Arizona Excluding $1.427 billion of PPP loans, the loan portfolio decreased $61.4 million, or 61 basis points, during the current quarter (Dollars in millions)


Slide 28

Organic Loan Growth Organic loan growth for second quarter 2020 was $1.489 billion, or 31% annualized, compared to $309 million, or 8% annualized, for second quarter 2019 (Dollars in millions)


Slide 29

Loan Composition


Slide 30

Geographic Loan Dispersion 06/30/20 2009


Slide 31

COVID-19 High Risk Industries Enhanced-Monitoring Conducting ongoing portfolio reviews and monitoring for potential credit impacts from COVID-19 $401 million of modifications made in the enhanced-monitoring loan portfolio 26% of total modifications of $1.515 billion


Slide 32

COVID-19 Total Loan Modifications and PPP Loans


Slide 33

Investment Portfolio Trends First half 2020 investment securities made up 22% of total assets Investments increased $937 million in the first half 2020 Our long-term goal is to maintain investment securities between 20% to 25% of total assets (Dollars in millions)


Slide 34

Investment Composition


Slide 35

Improved Credit Quality


Slide 36

NPAs to Bank Assets NPAs decreased $6 million in the first half 2020 compared to the first half of 2019


Slide 37

CECL and Allowance for Credit Losses (ACL) (Dollars in millions) Commercial Asset Quality Ratings Consumer Loan Past Due Status Additional Qualitative Adjustments Prepayment Speed Other Key Model Inputs National Economic Assumptions (June 2020)


Slide 38

Credit Loss Expense Loan portfolio growth and credit quality considerations will determine the level of credit loss expense (Dollars in thousands)


Slide 39

Net Charge-Offs First half 2020 net charge-offs as a percent of total loans were 0.02% compared to 0.03% for first half 2019 (Dollars in thousands)


Slide 40

ACL as a Percent of Loans ACL was 394% of non-performing loans at the end of first half 2020 compared to 289% at the end of first half last year ACL was in the 70th* percentile of Glacier’s peer group for first quarter 2020 As credit trends change, expect our allowance to adjust accordingly * BHCPR as of 3/31/2020


Slide 41

Shareholder Return


Slide 42

Dividends Declared At June 30, 2020, Glacier’s dividend yield was 3.31% The Company has declared 141 consecutive quarterly dividends In 2019, the Company increased its quarterly dividend by $0.10, or 10%, over 2018


Slide 43

Long-Term Performance Since 1984 Strong consistent performance over the past 36 years Long-term goal is to produce double digit dividend growth


Slide 44

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