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Glacier Bancorp, Inc. Announces Results for the Quarter Ended September 30, 2018

3rd Quarter 2018 Highlights:

  • Net income of $49.3 million for the current quarter, an increase of $12.8 million, or 35 percent, over the prior year third quarter net income of $36.5 million.  Pre-tax income of $60.1 million for the current quarter, an increase of $12.0 million, or 25 percent, over the prior year third quarter pre-tax income of $48.1 million.
  • Current quarter diluted earnings per share of $0.58, an increase of 12 percent from the prior quarter, and an increase of 23 percent from the prior year third quarter diluted earnings per share of $0.47.
  • Current quarter loan growth of $175 million, or 9 percent annualized.
  • Current quarter core deposits increased $199 million, or 9 percent annualized.
  • Net interest margin of 4.26 percent as a percentage of earning assets, on a tax equivalent basis, a 9 basis points increase over the prior quarter, and a 15 basis points increase over the prior year third quarter net interest margin of 4.11 percent.
  • Dividend declared of $0.26 per share.  The dividend was the 134th consecutive quarterly dividend.
  • The Company successfully completed the core system conversion of Columbine Capital Corp., the holding company for Collegiate Peaks Bank, a community bank in Buena Vista, Colorado.

Year-to-Date 2018 Highlights:

  • Net income of $132 million for the first nine months of 2018, an increase of $30.9 million, or 30 percent, over the first nine months of 2017 net income of $101 million.  Pre-tax income of $161 million for the  first nine months of 2018, an increase of $26.2 million, or 19 percent, over the first nine months of 2017 pre-tax income of $135 million.
  • Diluted earnings per share of $1.59, an increase of 21 percent from the prior year first nine months diluted earnings per share of $1.31.
  • Organic loan growth of $563 million, or 11 percent annualized, for the first nine months of the current year.
  • Net interest margin of 4.18 percent as a percentage of earning assets, on a tax equivalent basis, a 9 basis points increase over the 4.09 percent net interest margin in the first nine months of the prior year.
  • Dividends declared of $0.75 per share, an increase of $0.12 per share, or 19 percent, over the prior year first nine months regular quarterly dividends.
  • The Company completed the acquisition and core system conversion 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 and core system conversion 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.


Financial Highlights

  At or for the Three Months ended   At or for the
Nine Months Ended
(Dollars in thousands, except per share and market data) Sep 30,
 2018
  Jun 30,
 2018
  Mar 31,
 2018
  Sep 30,
 2017
  Sep 30,
 2018
  Sep 30,
 2017
Operating results                      
Net income $ 49,336   44,384   38,559   36,479   132,279   101,421
Basic earnings per share $ 0.58   0.53   0.48   0.47   1.59   1.31
Diluted earnings per share $ 0.58   0.52   0.48   0.47   1.59   1.31
Dividends declared per share 1 $ 0.26   0.26   0.23   0.51   0.75   0.93
Market value per share                      
Closing $ 43.09   38.68   38.38   37.76   43.09   37.76
High $ 46.28   41.47   41.24   37.76   46.28   38.03
Low $ 38.37   35.77   36.72   31.50   35.77   31.50
Selected ratios and other data                      
Number of common stock shares outstanding 84,521,093   84,516,650   84,511,472   78,006,956   84,521,093   78,006,956
Average outstanding shares - basic 84,518,407   84,514,257   80,808,904   78,004,450   83,294,111   77,379,514
Average outstanding shares - diluted 84,593,122   84,559,268   80,887,135   78,065,942   83,362,323   77,442,944
Return on average assets (annualized) 1.66%   1.53%   1.50%   1.46%   1.57%   1.40%
Return on average equity (annualized) 13.10%   12.07%   11.90%   11.87%   12.38%   11.49%
Efficiency ratio 52.26%   55.44%   57.80%   53.44%   55.01%   53.92%
Dividend payout ratio 1 44.83%   49.06%   47.92%   108.51%   47.17%   70.99%
Loan to deposit ratio 85.13%   84.92%   81.83%   84.43%   85.13%   84.43%
Number of full time equivalent employees 2,572   2,605   2,545   2,250   2,572   2,250
Number of locations 164   167   166   145   164   145
Number of ATMs 215   221   223   200   215   200

______________________________
1 Includes a special dividend declared of $0.30 per share for the three and nine months ended September 30, 2017.


KALISPELL, Mont., Oct. 18, 2018 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $49.3 million for the current quarter, an increase of $12.8 million, or 35 percent, from the $36.5 million of net income for the prior year third quarter.  Diluted earnings per share for the current quarter was $0.58 per share, an increase of $0.11, or 23 percent, from the prior year third quarter diluted earnings per share of $0.47.  Included in the current quarter was $1.3 million of acquisition-related expenses.  “This was a very strong quarter which highlights the consistent strength of the Glacier team and business model.  We saw solid, broad-based growth in quality loans and deposits across the franchise,” said Randy Chesler, President and Chief Executive Officer.

Net income for the nine months ended September 30, 2018 was $132 million, an increase of $30.9 million, or 30 percent,  from the $101 million of net income for the first nine months of the prior year.  Diluted earnings per share for the first nine months of 2018 was $1.59 per share, an increase of $0.28, or 21 percent, from the diluted earnings per share of $1.31 for the same period in the prior year.

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

  FSB   Collegiate    
(Dollars in thousands) February 28,
 2018
  January 31,
 2018
  Total
Total assets $ 1,109,684     551,198     1,660,882  
Debt 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) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
Cash and cash equivalents $ 307,104     368,132     200,004     220,210     (61,028 )   107,100     86,894  
                                         
Debt securities, available-for-sale 2,103,619     2,177,352     1,778,243     1,886,517     (73,733 )   325,376     217,102  
Debt securities, held-to-maturity 590,915     620,409     648,313     655,128     (29,494 )   (57,398 )   (64,213 )
Total debt securities 2,694,534     2,797,761     2,426,556     2,541,645     (103,227 )   267,978     152,889  
                           
Loans receivable                          
Residential real estate 862,830     835,382     720,728     734,242     27,448     142,102     128,588  
Commercial real estate 4,527,577     4,384,781     3,577,139     3,503,976     142,796     950,438     1,023,601  
Other commercial 1,921,955     1,940,435     1,579,353     1,575,514     (18,480 )   342,602     346,441  
Home equity 528,404     511,043     457,918     452,291     17,361     70,486     76,113  
Other consumer 282,479     277,031     242,686     243,410     5,448     39,793     39,069  
Loans receivable 8,123,245     7,948,672     6,577,824     6,509,433     174,573     1,545,421     1,613,812  
Allowance for loan and lease losses (132,535 )   (131,564 )   (129,568 )   (129,576 )   (971 )   (2,967 )   (2,959 )
Loans receivable, net 7,990,710     7,817,108     6,448,256     6,379,857     173,602     1,542,454     1,610,853  
                                         
Other assets 916,754     914,643     631,533     656,890     2,111     285,221     259,864  
Total assets $ 11,909,102     11,897,644     9,706,349     9,798,602     11,458     2,202,753     2,110,500  


Total debt securities of $2.695 billion at September 30, 2018 decreased $103 million, or 4 percent, during the current quarter and increased $153 million, or 6 percent, from the prior year third quarter.   Debt securities represented 23 percent of total assets at September 30, 2018 compared to 26 percent of total assets at September 30, 2017.

The loan portfolio of $8.123 billion increased $175 million, or 9 percent annualized, during the current quarter.  The loan category with the largest increase was commercial real estate loans which increased $143 million, or 3 percent.  Excluding the FSB and Collegiate acquisitions, the loan portfolio increased $632 million, or 10 percent, since September 30, 2017 and was primarily driven by growth in commercial real estate loans, which increased $406 million, or 12 percent.


Credit Quality Summary

  At or for the
Nine Months ended
  At or for the
Six Months ended
  At or for the
Year ended
  At or for the
Nine Months ended
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
Allowance for loan and lease losses              
Balance at beginning of period $ 129,568     129,568     129,572     129,572  
Provision for loan losses 8,707     5,513     10,824     7,938  
Charge-offs (11,905 )   (7,611 )   (19,331 )   (14,801 )
Recoveries 6,165     4,094     8,503     6,867  
Balance at end of period $ 132,535     131,564     129,568     129,576  
                         
Other real estate owned $ 12,399     13,616     14,269     14,359  
Accruing loans 90 days or more past due 4,333     12,751     6,077     3,944  
Non-accrual loans 55,373     58,170     44,833     46,770  
Total non-performing assets $ 72,105     84,537     65,179     65,073  
                       
Non-performing assets as a percentage of subsidiary assets 0.61 %   0.71 %   0.68 %   0.67 %
Allowance for loan and lease losses as a percentage of non-performing loans 222 %   186 %   255 %   256 %
Allowance for loan and lease losses as a percentage of total loans 1.63 %   1.66 %   1.97 %   1.99 %
Net charge-offs as a percentage of total loans 0.07 %   0.04 %   0.17 %   0.12 %
Accruing loans 30-89 days past due $ 25,181     39,650     37,687     29,115  
Accruing troubled debt restructurings $ 35,080     34,991     38,491     31,093  
Non-accrual troubled debt restructurings $ 12,911     18,380     23,709     22,134  
U.S. government guarantees included in non-performing assets $ 5,791     7,265     2,513     1,913  


Non-performing assets at September 30, 2018 were $72.1 million, a decrease of $12.4 million, or 15 percent, from the prior quarter and an increase of $7.0 million, or 11 percent, from the prior year third quarter.  Non-performing assets as a percentage of subsidiary assets at September 30, 2018 was 0.61 percent, a decrease of 10 basis points from the prior quarter, and a decrease of 6 basis points from the prior year third quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $25.2 million at September 30, 2018 decreased $14.5 million from the prior quarter and decreased $3.9 million from the prior year third quarter.  Early stage delinquencies as a percentage of loans at September 30, 2018 was 0.31 percent which was a decrease of 19 basis points from the prior quarter and a 14 basis point decrease from prior year third quarter.  The allowance for loan and lease losses (“allowance”) as a percent of total loans outstanding at September 30, 2018 was 1.63 percent, which was a 3 basis points decrease compared to the prior quarter and a decrease of 36 basis points from a year ago.  The decrease from the prior year third quarter was primarily driven by the addition of loans from new acquisitions, as they are added to the loan portfolio on a fair value basis with no allowance.


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
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 %
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 %


Net charge-offs for the current quarter were $2.2 million compared to $762 thousand for the prior quarter and $3.6 million from the same quarter last year.  Current quarter provision for loan losses was $3.2 million, compared to $4.7 million in the prior quarter and $3.3 million in the prior year third 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) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
Deposits                          
Non-interest bearing deposits $ 3,103,112     2,914,885     2,311,902     2,355,983     188,227     791,210     747,129  
NOW and DDA accounts 2,346,050     2,354,214     1,695,246     1,733,353     (8,164 )   650,804     612,697  
Savings accounts 1,345,163     1,330,637     1,082,604     1,081,056     14,526     262,559     264,107  
Money market deposit accounts 1,722,975     1,723,681     1,512,693     1,564,738     (706 )   210,282     158,237  
Certificate accounts 932,461     927,608     817,259     846,005     4,853     115,202     86,456  
Core deposits, total 9,449,761     9,251,025     7,419,704     7,581,135     198,736     2,030,057     1,868,626  
Wholesale deposits 151,421     172,550     160,043     186,019     (21,129 )   (8,622 )   (34,598 )
Deposits, total 9,601,182     9,423,575     7,579,747     7,767,154     177,607     2,021,435     1,834,028  
Repurchase agreements 408,754     361,515     362,573     453,596     47,239     46,181     (44,842 )
Federal Home Loan Bank advances 155,328     395,037     353,995     153,685     (239,709 )   (198,667 )   1,643  
Other borrowed funds 9,944     9,917     8,224     8,243     27     1,720     1,701  
Subordinated debentures 134,055     134,058     126,135     126,099     (3 )   7,920     7,956  
Other liabilities 107,227     99,550     76,618     83,624     7,677     30,609     23,603  
Total liabilities $ 10,416,490     10,423,652     8,507,292     8,592,401     (7,162 )   1,909,198     1,824,089  


Core deposits of $9.450 billion as of September 30, 2018 increased $199 million, or 2 percent, from the prior quarter.  Excluding acquisitions, core deposits increased $554 million, or 7 percent, from the prior year third quarter. The Company benefited from the increase in non-interest bearing deposits which increased $188 million, or 6 percent from the prior quarter and organically increased $276 million, or 12 percent from the prior year third quarter.

Securities sold under agreements to repurchase (“repurchase agreements”) of $409 million at September 30, 2018 increased $47.2 million, or 13 percent, over the prior quarter and decreased $44.8 million, or 10 percent, over prior year third quarter.  Federal Home Loan Bank (“FHLB”) advances of $155 million at September 30, 2018, decreased $240 million over the prior quarter and remained stable from the prior year third quarter.  FHLB advances continue to fluctuate to supplement deposit growth and fund loan growth.


Stockholders’ Equity Summary

                  $ Change from
(Dollars in thousands, except per share data) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
                                           
Common equity $ 1,522,329     1,494,274     1,201,036     1,201,534     28,055     321,293     320,795  
Accumulated other comprehensive (loss) income (29,717 )   (20,282 )   (1,979 )   4,667     (9,435 )   (27,738 )   (34,384 )
Total stockholders’ equity 1,492,612     1,473,992     1,199,057     1,206,201     18,620     293,555     286,411  
                                         
Goodwill and core deposit intangible, net (340,508 )   (342,243 )   (191,995 )   (192,609 )   1,735     (148,513 )   (147,899 )
Tangible stockholders’ equity $ 1,152,104     1,131,749     1,007,062     1,013,592     20,355     145,042     138,512  
                                           
Stockholders’ equity to total assets   12.53 %   12.39 %   12.35 %   12.31 %                  
                                           
Tangible stockholders’ equity to total tangible assets   9.96 %   9.79 %   10.58 %   10.55 %                  
                                           
Book value per common share $ 17.66     17.44     15.37     15.46     0.22     2.29     2.20  
                                           
Tangible book value per common share $ 13.63     13.39     12.91     12.99     0.24     0.72     0.64  


Tangible stockholders’ equity of $1.152 billion at September 30, 2018 increased $20 million compared to the prior quarter which was the result of earnings retention.  Tangible stockholders’ equity increased $139 million over the prior year third quarter which was the result of earnings retention and $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 and the decrease in accumulated other comprehensive income.  Tangible book value per common share at quarter end increased $0.24 per share from the prior quarter and increased $0.64 per share from a year ago.

Cash Dividends
On September 26, 2018, the Company’s Board of Directors declared a quarterly cash dividend of $0.26 per share.  The dividend was payable October 18, 2018 to shareholders of record on October 9, 2018.  The dividend was the 134th consecutive quarterly dividend.  Regular quarterly dividends declared for the first nine months of 2018 were $0.75 per share, an increase of $0.12 per share, or 19 percent, over the same period last year.  Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.


Operating Results for Three Months Ended September 30, 2018
Compared to June 30, 2018, March 31, 2018 and September 30, 2017

Income Summary

  Three Months ended   $ Change from
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Mar 31,
 2018
  Sep 30,
 2017
  Jun 30,
 2018
  Mar 31,
 2018
  Sep 30,
 2017
Net interest income                          
Interest income $ 122,905     117,715     103,066     96,464     5,190     19,839     26,441  
Interest expense 9,160     9,161     7,774     7,652     (1 )   1,386     1,508  
      Total net interest income 113,745     108,554     95,292     88,812     5,191     18,453     24,933  
Non-interest income                          
Service charges and other fees 19,504     18,804     16,871     17,307     700     2,633     2,197  
Miscellaneous loan fees and charges 1,807     2,243     1,477     1,211     (436 )   330     596  
Gain on sale of loans 7,256     8,142     6,097     9,141     (886 )   1,159     (1,885 )
(Loss) gain on sale of investments (367 )   (56 )   (333 )   77     (311 )   (34 )   (444 )
Other income 4,216     2,695     1,974     3,449     1,521     2,242     767  
      Total non-interest income 32,416     31,828     26,086     31,185     588     6,330     1,231  
      Total income $ 146,161     140,382     121,378     119,997     5,779     24,783     26,164  
                                   
Net interest margin (tax-equivalent) 4.26 %   4.17 %   4.10 %   4.11 %            


Net Interest Income
The current quarter interest income of $123 million increased $5.2 million, or 4 percent, from the prior quarter and increased $26.4 million, or 27 percent, over the prior year third quarter with both increases primarily attributable to the increase in interest income from commercial loans.  Interest income on commercial loans increased $4.8 million, or 6 percent, from the prior quarter and increased $20.7 million, or 35 percent, from the prior year third quarter.

The current quarter interest expense of $9.2 million remained stable from the prior quarter and increased $1.5 million, or 20 percent, from the prior year third quarter.  The total cost of funding (including non-interest bearing deposits) for the current quarter was 36 basis points compared to 36 basis points for the prior quarter and 35 basis points for the prior year third quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.26 percent compared to 4.17 percent in the prior quarter.  The 9 basis points increase in the net interest margin was primarily the result of increased yields on the loan portfolio and a 2 basis points increase in loan discount accretion from the fair value adjustments of recently acquired banks.  The current quarter net interest margin increased 15 basis points over the prior year third quarter net interest margin of 4.11 percent.  Included in the current quarter margin was a 14 basis points decrease due to the reduction in the federal corporate income tax rate in 2018 by the Tax Cut and Jobs Act (“Tax Act”).  The increase in the margin from the prior year third quarter resulted from the remix of earning assets to higher yielding loans, increased yields on the loan portfolio, and stable funding costs.  “The Bank divisions have done well again in growing their non-interest bearing deposit balances,” said Ron Copher, Chief Financial Officer.  “Growth in these balances enable the Company to limit rate increases on interest bearing balances, especially in higher interest rate environments.”

Non-interest Income
Non-interest income for the current quarter totaled $32.4 million, an increase of $588 thousand, or 2 percent, from the prior quarter and an increase of $1.2 million, or 4 percent, over the same quarter last year.  Service charges and other fees of $19.5 million for the current quarter, increased $700 thousand, or 4 percent, from the prior quarter and increased $2.2 million, or 13 percent, from the prior year third quarter with such increases primarily due to the increased number of accounts from organic growth and acquisitions.  Miscellaneous loan fees and charges decreased $436 thousand, or 19 percent from prior quarter as a result of seasonality and increased $596 thousand, or 49 percent, from the prior year third quarter as a result of the recent acquisitions and increased loan growth.  Gain on sale of loans decreased $886 thousand, or 11 percent, from the prior quarter as a result of seasonal activity and decreased $1.9 million, or 21 percent from the prior year third quarter as result of the decrease in purchase and refinance activity.  Other income increased $1.5 million, or 56 percent, from the prior quarter and was primarily due to a $2.3 million gain on sale of a former branch building.  Compared to the prior year third quarter, other income increased $767 thousand, or 22 percent, due to the sale of the former branch building, which was partially offset by the $1.3 million decrease in gain on sale of other real estate owned (“OREO”).


Non-interest Expense Summary

  Three Months ended   $ Change from
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Mar 31,
 2018
  Sep 30,
 2017
  Jun 30,
 2018
  Mar 31,
 2018
  Sep 30,
 2017
Compensation and employee benefits $ 49,927     49,023     45,721     41,297     904     4,206     8,630  
Occupancy and equipment 7,914     7,662     7,274     6,500     252     640     1,414  
Advertising and promotions 2,432     2,530     2,170     2,239     (98 )   262     193  
Data processing 3,752     4,241     3,967     3,647     (489 )   (215 )   105  
Other real estate owned 2,674     211     72     817     2,463     2,602     1,857  
Regulatory assessments and insurance 1,277     1,329     1,206     1,214     (52 )   71     63  
Core deposit intangibles amortization 1,735     1,748     1,056     640     (13 )   679     1,095  
Other expenses 13,118     15,051     12,161     12,198     (1,933 )   957     920  
                                           
Total non-interest expense $ 82,829     81,795     73,627     68,552     1,034     9,202     14,277  


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 $14.3 million, or 21 percent, over the prior year third quarter.  Compensation and employee benefits increased by $904 thousand, or 2 percent, from the prior quarter.  Compensation and employee benefits increased by $8.6 million, or 21 percent, from the prior year third quarter principally due to the increased number of employees from acquisitions.  Occupancy and equipment expense increased $1.4 million, or 22 percent, over the prior year third quarter and was attributable to increased costs from acquisitions.  OREO expenses increased $2.5 million from the prior quarter and increased $1.9 million from the prior year third quarter, due to a write down of $2.2 million on a single property.  Other expenses decreased $1.9 million, or 13 percent, from the prior quarter and was primarily due to a decrease in acquisition-related expenses.  Compared to the prior year third quarter, other expenses increased $920 thousand, or 8 percent.  Acquisition-related expenses were $1.3 million during the current quarter compared to $2.9 million in the prior quarter and $245 thousand in the prior year third quarter.

Federal and State Income Tax Expense
Tax expense during the third quarter of 2018 was $10.8 million, which is a decrease of $837 thousand, or 7 percent, from the prior year third quarter and was primarily attributable to the decrease in the federal income tax rate driven by the Tax Act.  The effective tax rate in the third quarter of 2018 was 18 percent compared to 24 percent in the prior year third quarter.

Efficiency Ratio
The current quarter efficiency ratio was 52.26 percent, a 318 basis points improvement from the prior quarter efficiency ratio of 55.44 percent.  The improvement was the result of increases in net interest income and non-interest income, including the $2.3 million gain on the sale of the former branch building.  In addition, there was a decrease in acquisition-related expenses and the Company continues to control its operating costs.


Operating Results for Nine Months Ended September 30, 2018
Compared to September 30, 2017

Income Summary

  Nine Months Ended        
(Dollars in thousands) Sep 30,
 2018
  Sep 30,
 2017
  $ Change   % Change
Net interest income              
Interest income $ 343,686     $ 278,124     $ 65,562     24 %
Interest expense 26,095     22,792     3,303     14 %
      Total net interest income 317,591     255,332     62,259     24 %
               
Non-interest income              
Service charges and other fees 55,179     50,435     4,744     9 %
Miscellaneous loan fees and charges 5,527     3,283     2,244     68 %
Gain on sale of loans 21,495     23,031     (1,536 )   (7 )%
Loss on sale of investments (756 )   (545 )   (211 )   39 %
Other income 8,885     8,326     559     7 %
      Total non-interest income 90,330     84,530     5,800     7 %
                             
  $ 407,921     $ 339,862     $ 68,059     20 %
                   
Net interest margin (tax-equivalent) 4.18 %   4.09 %        


Net Interest Income
Interest income for the first nine months of 2018 increased $65.6 million, or 24 percent, from the first nine months of 2017 and was principally due to a $55.9 million increase in interest income from commercial loans.  Interest expense of $26.1 million for the first nine months of 2018 increased $3.3 million over the prior year same period.  Interest expense on repurchase agreements, FHLB advances, and subordinated debt increased $3.4 million, or 37 percent, over the prior year and was primarily driven by the increase in market interest rates.  The Company has maintained stable funding costs through its focus on growing non-interest bearing deposits and continued pricing discipline.  The total funding cost was 36 basis points for the first nine months of 2018 and 2017.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first nine months of 2018 was 4.18 percent, a 9 basis points increase from the net interest margin of 4.09 percent for the first nine months of 2017.  Included in the current year margin was a 14 basis points decrease compared to the prior year driven by the reduction  in the federal corporate income tax rate.  The increase in the margin from the prior year resulted from the remix of earning assets to higher yielding loans, increased yields on the loan portfolio, and stable funding costs.

Non-interest Income
Non-interest income of $90.3 million for the first nine months of 2018 increased $5.8 million, or 7 percent, over the same period last year.  Service charges and other fees of $55.2 million for 2018 increased $4.7 million, or 9 percent, from the prior year as a result of an increased number of deposit accounts from organic growth and acquisitions.  Miscellaneous loan fees and charges for the first nine months of 2018 increased $2.2 million, or 68 percent from the prior year as a result of the recent acquisitions and increased loan growth.  Gain on sale of loans decreased $1.5 million, or 7 percent, from the prior year first nine months due to the decrease in purchase and refinance activity.   Other income of $8.9 million, increased $559 thousand, or 7 percent, from the prior year first nine months with increases of $1.9 million from the sale of bank assets and a decrease of $2.5 million from the gain on sale of OREO.


Non-interest Expense Summary

  Nine Months Ended        
(Dollars in thousands) Sep 30,
 2018
  Sep 30,
 2017
  $ Change   % Change
                             
Compensation and employee benefits $ 144,671     $ 120,041     $ 24,630     21 %
Occupancy and equipment 22,850     19,706     3,144     16 %
Advertising and promotions 7,132     6,381     751     12 %
Data processing 11,960     10,180     1,780     17 %
Other real estate owned 2,957     1,532     1,425     93 %
Regulatory assessments and insurance 3,812     3,362     450     13 %
Core deposit intangibles amortization 4,539     1,880     2,659     141 %
Other expenses 40,330     34,123     6,207     18 %
Total non-interest expense $ 238,251     $ 197,205     $ 41,046     21 %


Total non-interest expense of $238.3 million for the first nine months of 2018 increased $41.0 million, or 21 percent, over prior year same period.  Compensation and employee benefits for the first nine months of 2018 increased $24.6 million, or 21 percent, from the same period last year due to the increased number of employees from acquisitions. Occupancy and equipment expense for the first nine months of 2018 increased $3.1 million, or 16 percent from the prior year as a result of increased costs from acquisitions.  Data processing expense for the current year increased $1.8 million, or 17 percent, from the prior year as a result of increased costs from the acquisitions and organic growth.  Current year other expenses of $40.3 million increased $6.2 million, or 18 percent, from the prior year due to an increase in acquisition-related expenses.  Acquisition-related expenses were $6.1 million during the first nine months of 2018 compared to $1.2 million in the prior year first nine months.

Provision for Loan Losses
The provision for loan losses was $8.7 million for the first nine months of 2018, an increase of $769 thousand from the same period in the prior year.  Net charge-offs during the first nine months of 2018 were $5.7 million compared to $7.9 million during the same period in 2017.

Federal and State Income Tax Expense
Tax expense of $28.7 million in the first nine months of 2018 decreased $4.6 million, or 14 percent, over the prior year same period as a result of a decrease in the federal corporate income tax rate by the Tax Act.  The effective tax rate in 2018 was 18 percent compared to 25 percent in the prior year.

Efficiency Ratio
The efficiency ratio of 55.01 percent for the first nine months of 2018 increased 109 basis points from the prior year first nine months efficiency ratio of 53.92.  The increase included 140 basis points related to the decrease in the federal income tax rate and a 117 basis points increase in acquisition-related expenses.

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

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

The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

Conference Call Information
A conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, October 19, 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 8090339. To participate on the webcast, log on to: https://edge.media-server.com/m6/p/rbdz6bvt. 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 8090339 by November 2, 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, Bozeman, all located in Montana; as well as Mountain West Bank, Coeur d’Alene, operating in Idaho, Utah and Washington; First Bank, Powell, operating in Wyoming and Utah; Citizens Community Bank, Pocatello, operating in Idaho; Bank of the San Juans, Durango; and Collegiate Peaks Bank, Buena Vista both operating in Colorado; First State Bank, Wheatland, operating in Wyoming; North Cascades Bank, Chelan, operating in Washington; and The Foothills Bank, Yuma, operating in Arizona.


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

(Dollars in thousands, except per share data) September 30,
 2018
  June 30,
 2018
  December 31,
 2017
  September 30,
 2017
Assets              
Cash on hand and in banks $ 171,394     174,239     139,948     136,822  
Federal funds sold             210  
Interest bearing cash deposits 135,710     193,893     60,056     83,178  
      Cash and cash equivalents 307,104     368,132     200,004     220,210  
Debt securities, available-for-sale 2,103,619     2,177,352     1,778,243     1,886,517  
Debt securities, held-to-maturity 590,915     620,409     648,313     655,128  
     Total debt securities 2,694,534     2,797,761     2,426,556     2,541,645  
Loans held for sale, at fair value 50,649     53,788     38,833     48,709  
Loans receivable 8,123,245     7,948,672     6,577,824     6,509,433  
Allowance for loan and lease losses (132,535 )   (131,564 )   (129,568 )   (129,576 )
     Loans receivable, net 7,990,710     7,817,108     6,448,256     6,379,857  
Premises and equipment, net 239,006     240,373     177,348     178,672  
Other real estate owned 12,399     13,616     14,269     14,359  
Accrued interest receivable 62,248     55,973     44,462     50,492  
Deferred tax asset 37,264     34,211     38,344     58,916  
Core deposit intangible, net 50,973     52,708     14,184     14,798  
Goodwill 289,535     289,535     177,811     177,811  
Non-marketable equity securities 16,502     26,107     29,884     21,890  
Bank-owned life insurance 81,850     81,379     59,351     58,982  
Other assets 76,328     66,953     37,047     32,261  
     Total assets $ 11,909,102     11,897,644     9,706,349     9,798,602  
Liabilities              
Non-interest bearing deposits $ 3,103,112     2,914,885     2,311,902     2,355,983  
Interest bearing deposits 6,498,070     6,508,690     5,267,845     5,411,171  
Securities sold under agreements to repurchase 408,754     361,515     362,573     453,596  
FHLB advances 155,328     395,037     353,995     153,685  
Other borrowed funds 9,944     9,917     8,224     8,243  
Subordinated debentures 134,055     134,058     126,135     126,099  
Accrued interest payable 4,065     3,952     3,450     3,154  
Other liabilities 103,162     95,598     73,168     80,470  
     Total liabilities 10,416,490     10,423,652     8,507,292     8,592,401  
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     845     780     780  
Paid-in capital 1,050,463     1,049,724     797,997     797,381  
Retained earnings - substantially restricted 471,021     443,705     402,259     403,373  
Accumulated other comprehensive (loss) income (29,717 )   (20,282 )   (1,979 )   4,667  
     Total stockholders’ equity 1,492,612     1,473,992     1,199,057     1,206,201  
     Total liabilities and stockholders’ equity $ 11,909,102     11,897,644     9,706,349     9,798,602  
                         


Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

  Three Months ended   Nine Months Ended
(Dollars in thousands, except per share data) September 30,
 2018
  June 30,
 2018
  September 30,
 2017
  September 30,
 2018
  September 30,
 2017
Interest Income                  
Debt securities $ 21,971     22,370     19,987     64,483     63,305  
Residential real estate loans 10,356     10,149     8,326     29,290     24,594  
Commercial loans 80,587     75,824     59,875     221,926     166,027  
Consumer and other loans 9,991     9,372     8,276     27,987     24,198  
     Total interest income 122,905     117,715     96,464     343,686     278,124  
Interest Expense                  
Deposits 4,837     4,617     4,564     13,370     13,505  
Securities sold under agreements to repurchase 570     486     537     1,541     1,362  
Federal Home Loan Bank advances 2,132     2,513     1,398     6,734     4,642  
Other borrowed funds 63     26     21     105     55  
Subordinated debentures 1,558     1,519     1,132     4,345     3,228  
     Total interest expense 9,160     9,161     7,652     26,095     22,792  
Net Interest Income 113,745     108,554     88,812     317,591     255,332  
Provision for loan losses 3,194     4,718     3,327     8,707     7,938  
     Net interest income after provision for loan losses 110,551     103,836     85,485     308,884     247,394  
Non-Interest Income                  
Service charges and other fees 19,504     18,804     17,307     55,179     50,435  
Miscellaneous loan fees and charges 1,807     2,243     1,211     5,527     3,283  
Gain on sale of loans 7,256     8,142     9,141     21,495     23,031  
(Loss) gain on sale of debt securities (367 )   (56 )   77     (756 )   (545 )
Other income 4,216     2,695     3,449     8,885     8,326  
     Total non-interest income 32,416     31,828     31,185     90,330     84,530  
Non-Interest Expense                  
Compensation and employee benefits 49,927     49,023     41,297     144,671     120,041  
Occupancy and equipment 7,914     7,662     6,500     22,850     19,706  
Advertising and promotions 2,432     2,530     2,239     7,132     6,381  
Data processing 3,752     4,241     3,647     11,960     10,180  
Other real estate owned 2,674     211     817     2,957     1,532  
Regulatory assessments and insurance 1,277     1,329     1,214     3,812     3,362  
Core deposit intangibles amortization 1,735     1,748     640     4,539     1,880  
Other expenses 13,118     15,051     12,198     40,330     34,123  
     Total non-interest expense 82,829     81,795     68,552     238,251     197,205  
                             
Income Before Income Taxes 60,138     53,869     48,118     160,963     134,719  
Federal and state income tax expense 10,802     9,485     11,639     28,684     33,298  
Net Income $ 49,336     44,384     36,479     132,279     101,421  
                               


Glacier Bancorp, Inc.
Average Balance Sheets

  Three Months ended
  September 30, 2018   September 30, 2017
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 893,972     $ 10,356     4.63 %   $ 771,342     $ 8,326     4.32 %
Commercial loans 1 6,361,742     81,636     5.09 %   4,968,989     61,560     4.92 %
Consumer and other loans 796,558     9,991     4.98 %   688,294     8,276     4.77 %
Total loans 2 8,052,272     101,983     5.02 %   6,428,625     78,162     4.82 %
Tax-exempt debt securities 3 1,074,266     12,389     4.61 %   1,106,288     15,678     5.67 %
Taxable debt securities 4 1,838,949     12,425     2.70 %   1,757,102     9,961     2.27 %
Total earning assets 10,965,487     126,797     4.59 %   9,292,015     103,801     4.43 %
Goodwill and intangibles 341,354             192,937          
Non-earning assets 476,135             411,248          
Total assets $ 11,782,976             $ 9,896,200          
Liabilities                      
Non-interest bearing deposits $ 2,988,562     $     %   $ 2,274,387     $     %
NOW and DDA accounts 2,304,338     997     0.17 %   1,720,374     465     0.11 %
Savings accounts 1,340,003     219     0.06 %   1,071,674     160     0.06 %
Money market deposit accounts 1,720,845     881     0.20 %   1,596,170     624     0.16 %
Certificate accounts 942,417     1,728     0.73 %   866,094     1,275     0.58 %
Total core deposits 9,296,165     3,825     0.16 %   7,528,699     2,524     0.13 %
Wholesale deposits 5 166,009     1,012     2.42 %   297,768     2,040     2.72 %
FHLB advances 209,248     2,132     3.99 %   197,458     1,398     2.77 %
Repurchase agreements and  other borrowed funds 534,384     2,191     1.63 %   562,169     1,690     1.19 %
Total funding liabilities 10,205,806     9,160     0.36 %   8,586,094     7,652     0.35 %
Other liabilities 82,621             89,898          
Total liabilities 10,288,427             8,675,992          
Stockholders’ Equity                      
Common stock 845             780          
Paid-in capital 1,050,081             797,011          
Retained earnings 467,671             418,034          
Accumulated other comprehensive (loss) income (24,048 )           4,383          
Total stockholders’ equity 1,494,549             1,220,208          
Total liabilities and stockholders’ equity $ 11,782,976             $ 9,896,200          
Net interest income (tax-equivalent)     $ 117,637             $ 96,149      
Net interest spread (tax-equivalent)         4.23 %           4.08 %
Net interest margin (tax-equivalent)         4.26 %           4.11 %

______________________________
1    Includes tax effect of $1.0 million and $1.7 million on tax-exempt municipal loan and lease income for the three months ended September 30, 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 $2.5 million and $5.3 million on tax-exempt debt securities income for the three months ended September 30, 2018 and 2017, respectively.
4    Includes tax effect of $304 thousand on federal income tax credits for the three months ended September 30, 2018 and 2017.
5    Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.


Glacier Bancorp, Inc.
Average Balance Sheets (continued)

  Nine Months Ended
  September 30, 2018   September 30, 2017
(Dollars in thousands) Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
  Average
Balance
  Interest &
Dividends
  Average
Yield/
Rate
Assets                      
Residential real estate loans $ 851,280     $ 29,290     4.59 %   $ 739,921     $ 24,594     4.43 %
Commercial loans 1 6,026,787     224,944     4.99 %   4,692,565     170,604     4.86 %
Consumer and other loans 759,437     27,987     4.93 %   680,368     24,198     4.76 %
Total loans 2 7,637,504     282,221     4.94 %   6,112,854     219,396     4.80 %
Tax-exempt debt securities 3 1,084,436     37,818     4.65 %   1,183,954     50,593     5.70 %
Taxable debt securities 4 1,809,047     35,327     2.60 %   1,802,842     30,952     2.29 %
Total earning assets 10,530,987     355,366     4.51 %   9,099,650     300,941     4.42 %
Goodwill and intangibles 301,786             175,752          
Non-earning assets 447,226             391,519          
Total assets $ 11,279,999             $ 9,666,921          
Liabilities                      
Non-interest bearing deposits $ 2,755,702     $     %   $ 2,122,385     $     %
NOW and DDA accounts 2,211,982     2,824     0.17 %   1,640,712     994     0.08 %
Savings accounts 1,282,161     642     0.07 %   1,045,065     460     0.06 %
Money market deposit accounts 1,700,216     2,457     0.19 %   1,546,181     1,797     0.16 %
Certificate accounts 920,222     4,639     0.67 %   908,359     3,911     0.58 %
Total core deposits 8,870,283     10,562     0.16 %   7,262,702     7,162     0.13 %
Wholesale deposits 5 156,298     2,808     2.40 %   314,385     6,343     2.70 %
FHLB advances 241,438     6,734     3.68 %   269,377     4,642     2.27 %
Repurchase agreements and  other borrowed funds 522,267     5,991     1.53 %   558,943     4,645     1.11 %
Total funding liabilities 9,790,286     26,095     0.36 %   8,405,407     22,792     0.36 %
Other liabilities 61,272             80,841          
Total liabilities 9,851,558             8,486,248          
Stockholders’ Equity                      
Common stock 833             774          
Paid-in capital 1,002,321             775,761          
Retained earnings 444,116             404,638          
Accumulated other comprehensive loss (18,829 )           (500 )        
Total stockholders’ equity 1,428,441             1,180,673          
Total liabilities and stockholders’ equity $ 11,279,999             $ 9,666,921          
Net interest income (tax-equivalent)     $ 329,271             $ 278,149      
Net interest spread (tax-equivalent)         4.15 %           4.06 %
Net interest margin (tax-equivalent)         4.18 %           4.09 %

______________________________
1    Includes tax effect of $3.0 million and $4.6 million on tax-exempt municipal loan and lease income for the nine months ended September 30, 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 $7.7 million and $17.3 million on tax-exempt investment securities income for the nine months ended September 30, 2018 and 2017, respectively.
4    Includes tax effect of $913 thousand and $981 thousand on federal income tax credits for the nine months ended September 30, 2018 and 2017, respectively.
5    Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.


Glacier Bancorp, Inc.
Loan Portfolio by Regulatory Classification

  Loans Receivable, by Loan Type   % Change from
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
                                                 
Custom and owner occupied construction $ 123,369     $ 138,171     $ 109,555     $ 106,615     (11 )%   13 %   16 %
Pre-sold and spec construction 109,214     96,008     72,160     82,023     14 %   51 %   33 %
Total residential construction 232,583     234,179     181,715     188,638     (1 )%   28 %   23 %
Land development 125,272     108,641     82,398     83,414     15 %   52 %   50 %
Consumer land or lots 123,979     110,846     102,289     99,866     12 %   21 %   24 %
Unimproved land 75,183     72,150     65,753     64,610     4 %   14 %   16 %
Developed lots for operative builders 14,922     12,708     14,592     12,830     17 %   2 %   16 %
Commercial lots 30,255     27,661     23,770     25,984     9 %   27 %   16 %
Other construction 487,428     478,037     391,835     367,060     2 %   24 %   33 %
Total land, lot, and other construction 857,039     810,043     680,637     653,764     6 %   26 %   31 %
                                         
Owner occupied 1,330,024     1,302,737     1,132,833     1,109,796     2 %   17 %   20 %
Non-owner occupied 1,564,182     1,495,532     1,186,066     1,180,976     5 %   32 %   32 %
Total commercial real estate 2,894,206     2,798,269     2,318,899     2,290,772     3 %   25 %   26 %
                                         
Commercial and industrial 884,414     909,688     751,221     766,970     (3 )%   18 %   15 %
                                         
Agriculture 672,916     661,218     450,616     468,168     2 %   49 %   44 %
                                         
1st lien 1,109,308     1,072,917     877,335     873,061     3 %   26 %   27 %
Junior lien 59,345     64,821     51,155     53,337     (8 )%   16 %   11 %
Total 1-4 family 1,168,653     1,137,738     928,490     926,398     3 %   26 %   26 %
                                         
Multifamily residential 222,647     218,061     189,342     185,891     2 %   18 %   20 %
                                         
Home equity lines of credit 521,778     500,036     440,105     429,483     4 %   19 %   21 %
Other consumer 166,788     164,288     148,247     153,363     2 %   13 %   9 %
Total consumer 688,566     664,324     588,352     582,846     4 %   17 %   18 %
                                         
States and political subdivisions 429,409     419,025     383,252     351,869     2 %   12 %   22 %
                                         
Other 123,461     149,915     144,133     142,826     (18 )%   (14 )%   (14 )%
Total loans receivable, including  loans held for sale 8,173,894     8,002,460     6,616,657     6,558,142     2 %   24 %   25 %
                                         
Less loans held for sale 1 (50,649 )   (53,788 )   (38,833 )   (48,709 )   (6 )%   30 %   4 %
                                                 
Total loans receivable $ 8,123,245     $ 7,948,672     $ 6,577,824     $ 6,509,433     2 %   23 %   25 %

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


Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification

   

Non-performing Assets, by Loan Type
  Non-
Accrual
Loans
  Accruing Loans
90 Days or More
Past Due
  Other
Real Estate
Owned
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Sep 30,
 2018
  Sep 30,
 2018
  Sep 30,
 2018
Custom and owner occupied construction $ 1,599     48     48     177         1,599      
Pre-sold and spec construction 474     492     38     267     474          
Total residential construction 2,073     540     86     444     474     1,599      
                                         
Land development 5,147     7,564     7,888     8,116     843         4,304  
Consumer land or lots 1,592     1,593     1,861     2,451     526         1,066  
Unimproved land 9,815     9,962     10,866     10,320     8,307     28     1,480  
Developed lots for operative builders 68     126     116     116     43         25  
Commercial lots 1,046     1,059     1,312     1,374             1,046  
Other construction 147     155     151     151     9         138  
Total land, lot and other construction 17,815     20,459     22,194     22,528     9,728     28     8,059  
                                         
Owner occupied 11,246     12,891     13,848     14,207     9,978     34     1,234  
Non-owner occupied 10,847     15,337     4,584     4,251     10,574         273  
Total commercial real estate 22,093     28,228     18,432     18,458     20,552     34     1,507  
                                         
Commercial and industrial 5,615     7,692     5,294     5,190     4,956     409     250  
                                         
Agriculture 7,856     10,497     3,931     3,998     6,804     1,052      
                                         
1st lien 9,543     9,725     9,261     7,688     8,922     528     93  
Junior lien 2,610     3,257     567     591     709         1,901  
Total 1-4 family 12,153     12,982     9,828     8,279     9,631     528     1,994  
                                         
Multifamily residential 613     634             613          
                                         
Home equity lines of credit 3,470     3,112     3,292     4,151     2,397     508     565  
Other consumer 417     393     322     225     218     175     24  
Total consumer 3,887     3,505     3,614     4,376     2,615     683     589  
States and political subdivisions         1,800     1,800              
                                           
Total $ 72,105     84,537     65,179     65,073     55,373     4,333     12,399  
                                           


Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification (continued)

  Accruing 30-89 Days Delinquent Loans, by Loan Type   % Change from
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
Custom and owner occupied construction $ 4,502     $ 1,525     $ 300     $ 415     195 %   1,401 %   985 %
Pre-sold and spec construction 494     721     102     451     (31 )%   384 %   10 %
Total residential construction 4,996     2,246     402     866     122 %   1,143 %   477 %
                                       
Land development 516     728         5     (29 )%   n/m   10,220 %
Consumer land or lots 235     471     353     615     (50 )%   (33 )%   (62 )%
Unimproved land 629     1,450     662     621     (57 )%   (5 )%   1 %
Developed lots for operative builders         7         n/m   (100 )%   n/m
Commercial lots         108     15     n/m   (100 )%   (100 )%
Other construction                 n/m   n/m   n/m
Total land, lot and other construction 1,380     2,649     1,130     1,256     (48 )%   22 %   10 %
                                         
Owner occupied 2,872     3,571     4,726     4,450     (20 )%   (39 )%   (35 )%
Non-owner occupied 1,131     8,414     2,399     5,502     (87 )%   (53 )%   (79 )%
Total commercial real estate 4,003     11,985     7,125     9,952     (67 )%   (44 )%   (60 )%
                                         
Commercial and industrial 4,791     5,745     6,472     5,784     (17 )%   (26 )%   (17 )%
                                         
Agriculture 1,332     5,288     3,205     780     (75 )%   (58 )%   71 %
                                         
1st lien 3,795     5,132     10,865     2,973     (26 )%   (65 )%   28 %
Junior lien 420     989     4,348     3,463     (58 )%   (90 )%   (88 )%
Total 1-4 family 4,215     6,121     15,213     6,436     (31 )%   (72 )%   (35 )%
                                     
Multifamily Residential             237     n/m      n/m      (100 )%
                                     
Home equity lines of credit 2,467     3,940     1,962     2,065     (37 )%   26 %   19 %
Other consumer 1,903     1,665     2,109     1,735     14 %   (10 )%   10 %
Total consumer 4,370     5,605     4,071     3,800     (22 )%   7 %   15 %
                                         
Other 94     11     69     4     755 %   36 %   2,250 %
                                         
Total $ 25,181     $ 39,650     $ 37,687     $ 29,115     (36 )%   (33 )%   (14 )%

______________________________
n/m - not measurable


Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification (continued)

  Net Charge-Offs (Recoveries), Year-to-Date
Period Ending, By Loan Type
  Charge-Offs   Recoveries
(Dollars in thousands) Sep 30,
 2018
  Jun 30,
 2018
  Dec 31,
 2017
  Sep 30,
 2017
  Sep 30,
 2018
  Sep 30,
 2018
                                     
Custom and owner occupied construction $             58          
Pre-sold and spec construction (348 )   (344 )   (23 )   (19 )   17     365  
Total residential construction (348 )   (344 )   (23 )   39     17     365  
                                   
Land development (110 )   (107 )   (143 )   (67 )       110  
Consumer land or lots (121 )   (92 )   222     (150 )   206     327  
Unimproved land (288 )   (144 )   (304 )   (177 )       288  
Developed lots for operative builders 33     33     (107 )   (16 )   33      
Commercial lots 3     4     (6 )   (4 )   7     4  
Other construction (4 )       389     390         4  
Total land, lot and other construction (487 )   (306 )   51     (24 )   246     733  
                                   
Owner occupied 902     1,000     3,908     3,416     1,084     182  
Non-owner occupied (6 )   (4 )   368     214     59     65  
Total commercial real estate 896     996     4,276     3,630     1,143     247  
                                   
Commercial and industrial 1,893     1,471     883     429     2,527     634  
                                   
Agriculture 39     44     9     (11 )   50     11  
                                   
1st lien 8     (193 )   (23 )   (201 )   257     249  
Junior lien 486     (34 )   719     746     959     473  
Total 1-4 family 494     (227 )   696     545     1,216     722  
                                   
Multifamily residential (6 )   (6 )   (230 )   (229 )       6  
                                   
Home equity lines of credit (39 )   (38 )   272     262     101     140  
Other consumer 161     111     505     98     381     220  
Total consumer 122     73     777     360     482     360  
                                   
Other 3,137     1,816     4,389     3,195     6,224     3,087  
                                   
Total $ 5,740     3,517     10,828     7,934     11,905     6,165  


Visit our website at www.glacierbancorp.com


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

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