Glacier Bancorp, Inc. Announces Results for the Quarter Ended March 31, 2014

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| Source: Glacier Bancorp, Inc.

HIGHLIGHTS:

  • All time record net income of $26.7 million for the current quarter, an increase of 29 percent from the prior year first quarter net income of $20.8 million.
  • Current quarter diluted earnings per share of $0.36, an increase of 24 percent from the prior year first quarter diluted earnings per share of $0.29.
  • The loan portfolio increased $25.8 million, or 3 percent annualized, during the current quarter. Excluding acquisitions, the loan portfolio increased $298 million, or 9 percent, from the prior year first quarter.
  • Current quarter net interest margin, on a tax-equivalent basis, of 4.02 percent, an increase of 14 basis points from the prior quarter net interest margin of 3.88 percent.
  • Dividend declared of $0.16 per share during the current quarter. The dividend was the 116th consecutive quarterly dividend declared by the Company.

Results Summary

  Three Months ended
  March 31, December 31, March 31,
(Dollars in thousands, except per share data) 2014 2013 2013
Net income  $ 26,730 26,546  20,768
Diluted earnings per share  $ 0.36  0.36 0.29
Return on average assets (annualized) 1.39% 1.33% 1.11%
Return on average equity (annualized) 11.04% 10.96% 9.20%

KALISPELL, Mont., April 21, 2014 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (Nasdaq:GBCI) reported net income of $26.7 million for the current quarter, an increase of $6.0 million, or 29 percent, from the $20.8 million of net income for the prior year first quarter. Diluted earnings per share for the current quarter was $0.36 per share, an increase of $0.07, or 24 percent, from the prior year first quarter diluted earnings per share of $0.29. "The first quarter was stronger than expected as earnings, loan growth and our net interest margin all exceeded our forecast," said Mick Blodnick, President and Chief Executive Officer. "We certainly hope to build on the momentum created these first three months, especially on the loan origination front as we enter what typically has been our best two quarters for loan growth. We're off to a good start this year. Now we have to continue to work hard to keep it going," Blodnick said. 

Asset Summary

      $ Change from $ Change from
  March 31, December 31, March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013 2013 2013
           
Cash and cash equivalents  $ 161,691 155,657 129,057 6,034 32,634
           
Investment securities, available-for-sale 2,669,180 3,222,829 3,658,037 (553,649) (988,857)
Investment securities, held-to-maturity 481,476 481,476 481,476
Total investment securities 3,150,656 3,222,829 3,658,037 (72,173) (507,381)
           
Loans receivable          
Residential real estate 580,306 577,589 513,784 2,717 66,522
Commercial 2,928,995 2,901,283 2,307,632 27,712 621,363
Consumer and other 579,328 583,966 582,429 (4,638) (3,101)
Loans receivable 4,088,629 4,062,838 3,403,845 25,791 684,784
Allowance for loan and lease losses (130,729) (130,351) (130,835) (378) 106
Loans receivable, net 3,957,900 3,932,487 3,273,010 25,413 684,890
           
Other assets 560,476 573,377 549,133 (12,901) 11,343
Total assets  $ 7,830,723 7,884,350 7,609,237 (53,627) 221,486

Effective January 1, 2014, in connection with the monitoring of its investment securities portfolio, the Company reclassified state and local government securities with a fair value of approximately $485 million (inclusive of a net unrealized gain of $4.6 million) from available-for-sale to held-to-maturity classification. Total investment securities decreased $72 million, or 2 percent, during the current quarter and decreased $507 million, or 14 percent, from March 31, 2013 as the Company continued to reduce the overall size of the investment portfolio. At March 31, 2014, investment securities represented 40 percent of total assets, down from 41 percent at December 31, 2013 and 48 percent at March 31, 2013.

The Company grew its loans receivable by $25.8 million, or 1 percent, during the current quarter, a continuation of the Company's organic loan growth experienced in each quarter of 2013. The largest dollar and percentage increase was in commercial loans which increased $27.7 million, or 1 percent, during the current quarter. Excluding the loans receivable from the acquisitions of North Cascades National Bank ("NCB") and First State Bank ("FSB") during 2013, the loan portfolio increased $298 million, or 9 percent, since March 31, 2013 of which $292 million came from growth in commercial loans. $202 million of the increase in this category was from commercial real estate loans. Decreases in consumer and other loans was primarily attributable to customers paying off home equity lines of credit as they refinanced their first mortgage.

Credit Quality Summary 

  At or for the   At or for the
  Three Months At or for the Three Months
  ended Year ended ended
  March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013
Allowance for loan and lease losses      
Balance at beginning of period  $ 130,351 130,854 130,854
Provision for loan losses 1,122 6,887 2,100
Charge-offs (1,586) (13,643) (3,614)
Recoveries 842 6,253 1,495
Balance at end of period  $ 130,729 130,351 130,835
       
Other real estate owned  $ 27,332 26,860 43,975
Accruing loans 90 days or more past due 569 604 563
Non-accrual loans 78,905 81,956 90,856
Total non-performing assets 1  $ 106,806 109,420 135,394
       
Non-performing assets as a percentage of subsidiary assets 1.37% 1.39% 1.79%
Allowance for loan and lease losses as a percentage of non-performing loans 164% 158% 143%
Allowance for loan and lease losses as a percentage of total loans 3.20% 3.21% 3.84%
Net charge-offs as a percentage of total loans 0.02% 0.18% 0.06%
Accruing loans 30-89 days past due  $ 42,862 32,116 32,278
1 As of March 31, 2014, non-performing assets have not been reduced by U.S. government guarantees of $4.1 million.

Non-performing assets at March 31, 2014 were $107 million, a decrease of $2.6 million, or 2 percent, during the current quarter and a decrease of $28.6 million, or 21 percent, from a year ago. The largest category of non-performing assets was the land, lot and other construction category (i.e., regulatory classification) which was $50.9 million, or 48 percent, of the non-performing assets at March 31, 2014. Included in this category was $24.6 million of land development loans and $13.0 million in unimproved land loans at March 31, 2014. During the current quarter, the Company continued to reduce its exposure to land, lot and other construction category as it has over the past few years. The Company's early stage delinquencies (accruing loans 30-89 days past due) of $42.9 million at March 31, 2014 increased $10.7 million, or 33 percent, from the prior quarter and increased $10.6 million, or 33 percent, from the prior year first quarter.

The allowance for loan and lease losses ("allowance") was $131 million at March 31, 2014 and remained stable compared to the prior year end and a year ago. The allowance was 3.20 percent of total loans outstanding at March 31, 2014, a decrease of 1 basis point from 3.21 percent at December 31, 2013. The allowance as a percentage of total loans at March 31, 2014 decreased 64 basis points from 3.84 percent at March 31, 2013 primarily as a result of no allowance carried over from the NCB and FSB acquisitions since the acquired loans were recorded at fair value. Excluding the acquired banks, the allowance was 3.52 percent of total loans outstanding at March 31, 2014, a 32 basis points decrease from 3.84 percent at March 31, 2013.

Credit Quality Trends and Provision for Loan Losses

        Accruing  
        Loans 30-89 Non-Performing
  Provision   ALLL Days Past Due Assets to
  for Loan Net as a Percent as a Percent of Total Subsidiary
(Dollars in thousands) Losses Charge-Offs of Loans Loans Assets
           
First quarter 2014  $ 1,122 744 3.20% 1.05% 1.37%
Fourth quarter 2013 1,802 2,216 3.21% 0.79% 1.39%
Third quarter 2013 1,907 2,025 3.27% 0.66% 1.56%
Second quarter 2013 1,078 1,030 3.56% 0.60% 1.64%
First quarter 2013 2,100 2,119 3.84% 0.95% 1.79%
Fourth quarter 2012 2,275 8,081 3.85% 0.80% 1.87%
Third quarter 2012 2,700 3,499 4.01% 0.83% 2.33%
Second quarter 2012 7,925 7,052 3.99% 1.41% 2.69%

Net charged-off loans for the current quarter totaled $744 thousand, a decrease of $1.5 million, or 66 percent, from the prior quarter and $1.4 million, or 65 percent, from the prior year first quarter, respectively. "Credit costs continued to improve this quarter as net charged-off loans declined significantly. As real estate values have increased it has helped reduce loss exposure as we dispose of troubled credits. In addition, we now have had two consecutive quarters where recoveries of prior charged-off loans have helped to reduce the overall net charge-off amount," Blodnick said. The current quarter provision for loan losses of $1.1 million decreased $680 thousand from the prior quarter and decreased $978 thousand from the prior year first quarter. Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of provision for loan loss expense.

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 $ Change from
  March 31, December 31, March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013 2013 2013
           
Non-interest bearing deposits  $ 1,396,272 1,374,419 1,180,738 21,853 215,534
Interest bearing deposits 4,228,193 4,205,548 4,192,477 22,645 35,716
Repurchase agreements 327,322 313,394 312,505 13,928 14,817
FHLB advances 686,744 840,182 802,004 (153,438) (115,260)
Other borrowed funds 8,069 8,387 10,276 (318) (2,207)
Subordinated debentures 125,597 125,562 125,454 35 143
Other liabilities 73,566 53,608 71,503 19,958 2,063
Total liabilities  $ 6,845,763 6,921,100 6,694,957 (75,337) 150,806

Non-interest bearing deposits of $1.396 billion at March 31, 2014 increased $21.9 million, or 2 percent, during the current quarter. Excluding the NCB & FSB acquisitions, non-interest bearing deposits at March 31, 2014 increased $109 million, or 9 percent, since March 31, 2013. Interest bearing deposits of $4.228 billion at March 31, 2014 included $178 million of wholesale deposits (i.e., brokered deposits classified as NOW, money market deposit and certificate accounts). Excluding a decrease of $26.7 million in wholesale deposits during the current quarter, interest bearing deposits at March 31, 2014 increased $49.3 million, or 1 percent, during the current quarter. Excluding the acquisitions and a $478 million decrease in wholesale deposits, interest bearing deposits at March 31, 2014 increased $74.4 million, or 2 percent, from March 31, 2013.   In addition to the increase in deposits, the Company has benefited from a higher than expected increase in the number of checking accounts during the current quarter. Federal Home Loan Bank ("FHLB") advances of $687 million at March 31, 2014 decreased $153 million, or 18 percent, during the current quarter and decreased $115 million, or 14 percent, from March 31, 2013 as the need for borrowings continued to decrease with the increase in deposits.

Stockholders' Equity Summary

        $ Change from $ Change from
  March 31, December 31, March 31, December 31, March 31,
(Dollars in thousands, except per share data) 2014 2013 2013 2013 2013
           
Common equity  $ 969,672 953,605 864,205 16,067 105,467
Accumulated other comprehensive income 15,288 9,645 50,075 5,643 (34,787)
Total stockholders' equity 984,960 963,250 914,280 21,710 70,680
Goodwill and core deposit intangible, net (138,508) (139,218) (111,788) 710 (26,720)
Tangible stockholders' equity  $ 846,452 824,032 802,492 22,420 43,960
           
Stockholders' equity to total assets 12.58% 12.22% 12.02%    
Tangible stockholders' equity to total tangible assets 11.00% 10.64% 10.70%    
Book value per common share  $ 13.23 12.95 12.70 0.28 0.53
Tangible book value per common share  $ 11.37 11.08 11.14 0.29 0.23
Market price per share at end of period  $ 29.07 29.79 18.98 (0.72) 10.09

Tangible stockholders' equity of $846 million at March 31, 2014 increased $22.4 million, or 3 percent, from the prior quarter which was primarily driven by earnings retention. Tangible stockholders' equity increased $44.0 million from a year ago as the result of $45 million of Company stock issued in connection with the acquisitions and an increase in earnings retention, which were offset by the decrease in accumulated other comprehensive income of $34.8 million. Tangible book value per common share of $11.37 increased $0.29 per share from the prior quarter and increased $0.23 per share from the prior year first quarter.

Cash Dividend

On March 26, 2014, the Company's Board of Directors declared a cash dividend of $0.16 per share, payable April 17, 2014 to shareholders of record on April 8, 2014. The dividend was the 116th consecutive quarterly dividend declared by the Company. 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 March 31, 2014 
Compared to December 31, 2013 and March 31, 2013
       
Revenue Summary      
       
  Three Months ended
  March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013
Net interest income      
Interest income  $ 74,087 73,939 57,955
Interest expense 6,640 6,929 7,458
Total net interest income 67,447 67,010 50,497
       
Non-interest income      
Service charges, loan fees, and other fees 13,248 14,695 11,675
Gain on sale of loans 3,595 4,935 9,089
Loss on sale of investments (51) (137)
Other income 2,596 3,372 2,323
Total non-interest income 19,388 23,002 22,950
   $ 86,835 90,012 73,447
Net interest margin (tax-equivalent) 4.02% 3.88% 3.14%
       
       
  $ Change from $ Change from % Change from % Change from
  December 31, March 31, December 31, March 31,
(Dollars in thousands) 2013 2013 2013 2013
Net interest income        
Interest income  $ 148  $ 16,132 —% 28%
Interest expense (289) (818) (4)% (11)%
Total net interest income 437 16,950 1% 34%
         
Non-interest income        
Service charges, loan fees, and other fees (1,447) 1,573 (10)% 13%
Gain on sale of loans (1,340) (5,494) (27)% (60)%
Loss on sale of investments (51) 86 n/m (63)%
Other income (776) 273 (23)% 12%
Total non-interest income (3,614) (3,562) (16)% (16)%
  $ (3,177)  $ 13,388 (4)% 18%
         
n/m - not measurable      

Net Interest Income

The current quarter interest income of $74.1 million increased $148 thousand over the prior quarter. The current quarter increase in interest income on the investment portfolio was driven primarily by a decrease in premium amortization (net of discount accretion) on the investment securities ("premium amortization"). Included in the current quarter's interest income was $7.6 million of premium amortization on investment securities compared to $9.0 million in the prior quarter, a $1.4 million decrease in premium amortization compared to a decrease of $6.2 million in premium amortization in the prior quarter. The current quarter decrease in premium amortization on investment securities was the fifth consecutive quarter the Company has experienced such reduction. The current quarter interest income also increased as a result of greater interest income on commercial loans which was driven by both volume and rate increases.

The current quarter's interest income increased $16.1 million, or 28 percent, over the prior year quarter and was primarily attributable to higher interest income on the investment portfolio and commercial loans. Interest income on investment securities of $24.3 million increased $10.1 million, or 71 percent, over the prior year first quarter as premium amortization decreased $13.8 million. The current quarter interest income on commercial loans of $35.0 million increased $6.4 million, or 22 percent, over the prior year quarter as a result of increased volume of commercial loans.

The current quarter interest expense of $6.6 million decreased $289 thousand, or 4 percent, from the prior quarter and decreased $818 thousand, or 11 percent, from the prior year first quarter. The decrease in interest expense from the prior quarter and the prior year quarter was the result of decreases in retail deposit interest rates and decreases in the volume of wholesale deposits and borrowings. The cost of total funding (including non-interest bearing deposits) for the current and the prior quarter was 40 basis points, a decrease of 6 basis points compared to 46 basis points for the prior year first quarter.

The Company's current quarter net interest margin as a percentage of earning assets, on a tax-equivalent basis, was 4.02 percent, an increase of 14 basis points from the prior quarter net interest margin of 3.88 percent. Similar to the prior quarter, the current quarter increase in the net interest margin was the result of an increasing yield on the investment portfolio coupled with a shift in earning assets from investment securities to the higher yielding loan portfolio. The current quarter increase in the investment yield was principally due to a decrease in premium amortization which was consistent with the prior quarter. Of the 19 basis points increase in yield on investment securities during the current quarter, 13 basis points was due to the decrease in premium amortization. The premium amortization in the current quarter accounted for a 45 basis points reduction in the net interest margin compared to a 51 basis points reduction in the prior quarter and 123 basis points reduction in the net interest margin in the prior year first quarter. "Net interest income and net interest margin continue to improve through loan growth combined with the reduction in the lower yielding investment portfolio," said Ron Copher, Chief Financial Officer.

Non-interest Income

Non-interest income for the current quarter totaled $19.4 million, a decrease of $3.6 over the prior quarter and a decrease of $3.6 million over the same quarter last year. Service charge fee income decreased $1.4 million, or 10 percent, from the prior quarter due to seasonal activity and fewer days in the current quarter. Service charge fee income increased $1.6 million, or 13 percent, from the prior year first quarter which was driven by an increased volume and increased number of deposit accounts. Gain of $3.6 million on the sale of loans in the current quarter was a reduction of $1.3 million, or 27 percent, from the prior quarter and a decrease of $5.5 million, or 60 percent, from the prior year first quarter. The Company continued to experience a slowdown in refinance activity during the current quarter, although the decrease in gain on sale of loans was offset by the decrease in premium amortization on investment securities, both of which were attributable to the continuing slowdown of refinance activity. Other income of $2.6 million for the current quarter decreased $776 thousand, or 23 percent, from the prior quarter primarily as a result of a decrease in income related to other real estate owned ("OREO"). Included in other income was operating revenue of $64 thousand from OREO and gain of $747 thousand on the sales of OREO, the combined total of $811 thousand for the most recent quarter compared to $1.6 million for the prior quarter and $726 thousand for the prior year first quarter.

Non-interest Expense Summary

  Three Months ended
  March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013
Compensation and employee benefits  $ 28,634 27,258 24,577
Occupancy and equipment 6,613 6,723 5,825
Advertising and promotions 1,777 1,847 1,548
Outsourced data processing 1,288 1,623 825
Other real estate owned 507 2,295 884
Regulatory assessments and insurance 1,592 1,519 1,641
Core deposit intangibles amortization 710 717 486
Other expense 8,949 11,052 7,648
Total non-interest expense  $ 50,070 53,034 43,434
       
       
  $ Change from $ Change from % Change from % Change from
  December 31, March 31, December 31, March 31,
(Dollars in thousands) 2013 2013 2013 2013
Compensation and employee benefits  $ 1,376 $ 4,057 5% 17%
Occupancy and equipment (110) 788 (2)% 14%
Advertising and promotions (70) 229 (4)% 15%
Outsourced data processing (335) 463 (21)% 56%
Other real estate owned (1,788) (377) (78)% (43)%
Regulatory assessments and insurance 73 (49) 5% (3)%
Core deposit intangibles amortization (7) 224 (1)% 46%
Other expense (2,103) 1,301 (19)% 17%
Total non-interest expense $ (2,964) $ 6,636 (6)% 15%

Compensation and employee benefits increased by $1.4 million, or 5 percent, from the prior quarter due to benefit increases primarily in health insurance, and other adjustments, specifically increased FICA expense and director stock compensation. Compensation and employee benefits increased by $4.1 million, or 17 percent, from the prior year first quarter due to the increased number of employees from the NCB and FSB acquisitions along with additional benefit costs. Occupancy and equipment expense increased $788 thousand, or 14 percent, from the prior year first quarter as a result of the acquisitions and increases in equipment expense related to information and technology infrastructure. Advertising and promotion expense increased $229 thousand, or 15 percent, compared to the prior year first quarter primarily from recent marketing promotions at a number of the Bank divisions. Outsourced data processing expense increased $463 thousand, or 56 percent, from the prior year first quarter because of the acquired banks' outsourced data processing expense. OREO expense decreased $1.8 million, or 78 percent, from the prior quarter and decreased $377 thousand, or 43 percent, from the prior year first quarter. The current quarter OREO expense of $507 thousand included $284 thousand of operating expense, $54 thousand of fair value write-downs, and $169 thousand of loss on sale of OREO. OREO expense may fluctuate as the Company continues to work through non-performing assets and dispose of foreclosed properties. Other expense decreased by $2.1 million, or 19 percent, over the prior quarter primarily as a result of decreases in loan repurchases and debit card fraud losses which were partially offset by increases in professional and outside services expenses. Other expense increased $1.3 million, or 17 percent, from the prior year first quarter primarily from debit card expenses and other deposit account related charges.

Efficiency Ratio

The efficiency ratio for the current quarter was 53 percent compared to 55 percent for the prior year first quarter. The improvement in the efficiency ratio was primarily driven by the significant increase in net interest income which exceeded the increase in non-interest expense and the decrease in non-interest income.

About Glacier Bancorp, Inc.

Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 72 communities in Montana, Idaho, Utah, Washington, Wyoming and Colorado. Glacier Bancorp, Inc. is headquartered in Kalispell, Montana, and  is the parent company for Glacier Bank, Kalispell and Bank divisions First Security Bank of Missoula; Valley Bank of Helena; Big Sky Western Bank, Bozeman; Western Security Bank, Billings; and First Bank of Montana, Lewistown, all operating in Montana; as well as Mountain West Bank, Coeur d'Alene operating in Idaho, Utah and Washington; Citizens Community Bank, Pocatello, operating in Idaho; 1st Bank, Evanston, operating in Wyoming and Utah;  First Bank of Wyoming, Powell and First State Bank, Wheatland,   each operating in Wyoming; North Cascades Bank, Chelan, operating in Washington; and Bank of the San Juans, Durango, operating in Colorado.

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, including as a result of a slow recovery in the housing and real estate markets in its geographic areas;
  • increased loan delinquency rates;
  • the risks presented by a slow economic recovery which could adversely affect credit quality, loan collateral values, OREO values, investment values, liquidity and capital levels, dividends and loan originations;
  • changes in market interest rates, which could adversely affect the Company's net interest income and profitability;
  • legislative or regulatory changes that adversely affect the Company's business, 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 additionally impaired, which may have an adverse impact on earnings and capital;
  • reduced demand for banking products and services;
  • the risks presented by public stock market volatility, which could adversely affect the market price of the Company's common stock and the ability to raise additional capital in the future;
  • consolidation in the financial services industry in the Company's markets resulting in the creation of larger financial institutions which may have greater resources could change the competitive landscape;
  • dependence on the CEO, the senior management team and the Presidents of the Bank divisions;
  • potential interruption or breach in security of the Company's systems; and
  • the Company's success in managing risks involved in 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.

Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Financial Condition
       
  March 31, December 31, March 31,
(Dollars in thousands, except per share data) 2014 2013 2013
Assets      
Cash on hand and in banks  $ 116,267 109,995 88,132
Federal funds sold 14,055 10,527
Interest bearing cash deposits 31,369 35,135 40,925
Cash and cash equivalents 161,691 155,657 129,057
Investment securities, available-for-sale 2,669,180 3,222,829 3,658,037
Investment securities, held-to-maturity 481,476
Total investment securities 3,150,656 3,222,829 3,658,037
Loans held for sale 36,133 46,738 88,035
Loans receivable 4,088,629 4,062,838 3,403,845
Allowance for loan and lease losses (130,729) (130,351) (130,835)
Loans receivable, net 3,957,900 3,932,487 3,273,010
Premises and equipment, net 166,757 167,671 159,224
Other real estate owned 27,332 26,860 43,975
Accrued interest receivable 41,274 41,898 39,024
Deferred tax asset 39,997 43,549 17,449
Core deposit intangible, net 8,802 9,512 5,688
Goodwill 129,706 129,706 106,100
Non-marketable equity securities 52,192 52,192 48,812
Other assets 58,283 55,251 40,826
Total assets  $ 7,830,723 7,884,350 7,609,237
Liabilities      
Non-interest bearing deposits  $ 1,396,272 1,374,419 1,180,738
Interest bearing deposits 4,228,193 4,205,548 4,192,477
Securities sold under agreements to repurchase 327,322 313,394 312,505
Federal Home Loan Bank advances 686,744 840,182 802,004
Other borrowed funds 8,069 8,387 10,276
Subordinated debentures 125,597 125,562 125,454
Accrued interest payable 3,173 3,505 4,095
Other liabilities 70,393 50,103 67,408
Total liabilities 6,845,763 6,921,100 6,694,957
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 745 744 720
Paid-in capital 692,196 690,918 642,285
Retained earnings - substantially restricted 276,731 261,943 221,200
Accumulated other comprehensive income 15,288 9,645 50,075
Total stockholders' equity 984,960 963,250 914,280
Total liabilities and stockholders' equity  $ 7,830,723 7,884,350 7,609,237
Number of common stock shares issued and outstanding 74,465,666 74,373,296 72,018,617
       
       
Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations
       
  Three Months ended
  March 31, December 31, March 31,
(Dollars in thousands, except per share data) 2014 2013 2013
Interest Income      
Residential real estate loans  $ 7,087 7,919 7,260
Commercial loans 35,042 34,662 28,632
Consumer and other loans 7,643 7,869 7,864
Investment securities 24,315 23,489 14,199
Total interest income 74,087 73,939 57,955
Interest Expense      
Deposits 3,089 3,286 3,712
Securities sold under agreements to repurchase 210 221 227
Federal Home Loan Bank advances 2,514 2,581 2,651
Federal funds purchased and other borrowed funds 53 46 52
Subordinated debentures 774 795 816
Total interest expense 6,640 6,929 7,458
Net Interest Income 67,447 67,010 50,497
Provision for loan losses 1,122 1,802 2,100
Net interest income after provision for loan losses 66,325 65,208 48,397
Non-Interest Income      
Service charges and other fees 12,219 13,363 10,586
Miscellaneous loan fees and charges 1,029 1,332 1,089
Gain on sale of loans 3,595 4,935 9,089
Loss on sale of investments (51) (137)
Other income 2,596 3,372 2,323
Total non-interest income 19,388 23,002 22,950
Non-Interest Expense      
Compensation and employee benefits 28,634 27,258 24,577
Occupancy and equipment 6,613 6,723 5,825
Advertising and promotions 1,777 1,847 1,548
Outsourced data processing 1,288 1,623 825
Other real estate owned 507 2,295 884
Regulatory assessments and insurance 1,592 1,519 1,641
Core deposit intangibles amortization 710 717 486
Other expense 8,949 11,052 7,648
Total non-interest expense 50,070 53,034 43,434
Income Before Income Taxes 35,643 35,176 27,913
Federal and state income tax expense 8,913 8,630 7,145
Net Income  $ 26,730 26,546 20,768
Basic earnings per share  $ 0.36 0.36 0.29
Diluted earnings per share  $ 0.36 0.36 0.29
Dividends declared per share  $ 0.16 0.16 0.14
Average outstanding shares - basic 74,437,393 74,341,256 71,965,665
Average outstanding shares - diluted 74,480,818 74,417,361 72,013,177
       
       
Glacier Bancorp, Inc.
Average Balance Sheet
             
  Three Months ended Three Months ended
  March 31, 2014 March 31, 2013
      Average     Average
  Average Interest & Yield/ Average Interest & Yield/
(Dollars in thousands) Balance Dividends Rate Balance Dividends Rate
Assets            
Residential real estate loans  $ 609,534 7,087 4.65%  $ 617,852 7,260 4.70%
Commercial loans 2,882,054 35,042 4.93% 2,271,070 28,632 5.11%
Consumer and other loans 576,625 7,643 5.38% 587,433 7,864 5.43%
Total loans 1 4,068,213 49,772 4.96% 3,476,355 43,756 5.10%
Tax-exempt investment securities 2 1,191,679 16,768 5.63% 959,728 14,150 5.90%
Taxable investment securities 3 2,101,464 13,064 2.49% 2,686,727 4,772 0.71%
Total earning assets 7,361,356 79,604 4.39% 7,122,810 62,678 3.57%
Goodwill and intangibles 138,901     112,037    
Non-earning assets 317,625     349,000    
Total assets  $ 7,817,882      $ 7,583,847    
Liabilities            
Non-interest bearing deposits  $ 1,329,736 —%  $ 1,141,181 —%
NOW accounts 1,097,430 334 0.12% 965,799 273 0.11%
Savings accounts 628,947 80 0.05% 495,975 73 0.06%
Money market deposit accounts 1,187,525 600 0.20% 997,088 514 0.21%
Certificate accounts 1,132,828 1,984 0.71% 1,082,132 2,426 0.91%
Wholesale deposits 4 148,417 91 0.25% 579,188 426 0.30%
FHLB advances 825,823 2,514 1.22% 921,652 2,651 1.17%
Repurchase agreements, federal funds purchased and other borrowed funds 439,700 1,037 0.96% 427,693 1,095 1.04%
Total funding liabilities 6,790,406 6,640 0.40% 6,610,708 7,458 0.46%
Other liabilities 45,787     57,767    
Total liabilities 6,836,193     6,668,475    
Stockholders' Equity            
Common stock 744     720    
Paid-in capital 691,626     641,997    
Retained earnings 274,865     220,438    
Accumulated other comprehensive income 14,454     52,217    
Total stockholders' equity 981,689     915,372    
Total liabilities and stockholders' equity  $ 7,817,882      $ 7,583,847    
Net interest income (tax-equivalent)    $ 72,964      $ 55,220  
Net interest spread (tax-equivalent)     3.99%     3.11%
Net interest margin (tax-equivalent)     4.02%     3.14%
             
1 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.
2 Includes tax effect of $5.1 million and $4.3 million on tax-exempt investment security income for the three months ended March 31, 2014 and 2013, respectively.
3 Includes tax effect of $372 thousand and $381 thousand on investment security tax credits for the three months ended March 31, 2014 and 2013, respectively.
4 Wholesale deposits include brokered deposits classified as NOW, money market deposit and certificate accounts.
 
 
Glacier Bancorp, Inc.
Loan Portfolio by Regulatory Classification
           
  Loans Receivable, by Loan Type % Change from % Change from
  March 31, December 31, March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013 2013 2013
Custom and owner occupied construction  $ 44,333 50,352 36,607 (12)% 21%
Pre-sold and spec construction 34,786 34,217 36,162 2% (4)%
Total residential construction 79,119 84,569 72,769 (6)% 9%
Land development 82,275 73,132 78,524 13% 5%
Consumer land or lots 104,308 109,175 100,722 (4)% 4%
Unimproved land 49,871 50,422 49,904 (1)% —%
Developed lots for operative builders 15,984 15,951 15,713 —% 2%
Commercial lots 15,609 12,585 17,717 24% (12)%
Other construction 84,214 103,807 68,046 (19)% 24%
Total land, lot, and other construction 352,261 365,072 330,626 (4)% 7%
Owner occupied 812,727 811,479 705,232 —% 15%
Non-owner occupied 611,093 588,114 466,493 4% 31%
Total commercial real estate 1,423,820 1,399,593 1,171,725 2% 22%
Commercial and industrial 523,071 523,354 428,202 —% 22%
Agriculture 269,886 279,959 146,606 (4)% 84%
1st lien 726,471 733,406 684,968 (1)% 6%
Junior lien 71,012 73,348 79,549 (3)% (11)%
Total 1-4 family 797,483 806,754 764,517 (1)% 4%
Multifamily residential 143,438 123,154 94,246 16% 52%
Home equity lines of credit 298,073 298,119 306,606 —% (3)%
Other consumer 131,030 130,758 109,047 —% 20%
Total consumer 429,103 428,877 415,653 —% 3%
Other 106,581 98,244 67,536 8% 58%
Total loans receivable, including loans held for sale 4,124,762 4,109,576 3,491,880 —% 18%
Less loans held for sale 1 (36,133) (46,738) (88,035) (23)% (59)%
Total loans receivable  $ 4,088,629 4,062,838 3,403,845 1% 20%
           
1 Loans held for sale are primarily 1st lien 1-4 family loans.
           
           
Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification
             
        Non- Accruing Other
        Accruing Loans 90  Days Real Estate
  Non-performing Assets, by Loan Type Loans or More Past Due Owned
(Dollars in thousands) March 31, December 31, March 31, March 31, March 31, March 31,
  2014 2013 2013 2014 2014 2014
Custom and owner occupied construction  $ 1,227 1,248 1,322 1,227
Pre-sold and spec construction 663 828 1,101 238 425
Total residential construction 1,890 2,076 2,423 1,465 425
Land development 24,555 25,062 28,872 15,503 9,052
Consumer land or lots 3,169 2,588 5,800 2,333 836
Unimproved land 12,965 13,630 17,407 11,781 1,184
Developed lots for operative builders 2,157 2,215 2,177 1,485 672
Commercial lots 2,842 2,899 2,828 291 2,551
Other construction 5,168 5,167 5,181 179 4,989
Total land, lot and other construction 50,856 51,561 62,265 31,572 19,284
Owner occupied 14,625 14,270 14,097 12,746 1,879
Non-owner occupied 3,563 4,301 4,972 2,383 90 1,090
Total commercial real estate 18,188 18,571 19,069 15,129 90 2,969
Commercial and industrial 5,030 6,400 5,727 4,965 35 30
Agriculture 3,484 3,529 6,213 2,985 197 302
1st lien 17,457 17,630 23,341 13,002 146 4,309
Junior lien 4,947 4,767 6,366 4,908 39
Total 1-4 family 22,404 22,397 29,707 17,910 185 4,309
Multifamily residential 156 253 156
Home equity lines of credit 4,434 4,544 8,402 4,405 29
Other consumer 364 342 520 318 33 13
Total consumer 4,798 4,886 8,922 4,723 62 13
Other 815
Total  $ 106,806 109,420 135,394 78,905 569 27,332
             
             
Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification (continued)
           
  Accruing 30-89 Days Delinquent Loans,    
    by Loan Type % Change from % Change from
  March 31, December 31, March 31, December 31, March 31,
(Dollars in thousands) 2014 2013 2013 2013 2013
Custom and owner occupied construction  $ 277 202 37% n/m
Pre-sold and spec construction 101 394 n/m (74)%
Total residential construction 378 202 394 87% (4)%
Land development 1,437 n/m (100)%
Consumer land or lots 504 1,716 1,665 (71)% (70)%
Unimproved land 420 615 915 (32)% (54)%
Developed lots for operative builders 1,163 8 303 14,438% 284%
Total land, lot and other construction 2,087 2,339 4,320 (11)% (52)%
Owner occupied 9,099 5,321 5,524 71% 65%
Non-owner occupied 2,901 2,338 3,825 24% (24)%
Total commercial real estate 12,000 7,659 9,349 57% 28%
Commercial and industrial 6,192 3,542 3,873 75% 60%
Agriculture 2,710 1,366 2,785 98% (3)%
1st lien 15,018 12,386 8,254 21% 82%
Junior lien 503 482 625 4% (20)%
Total 1-4 family 15,521 12,868 8,879 21% 75%
Multifamily Residential 1,535 1,075 12 43% 12,692%
Home equity lines of credit 1,506 1,999 1,238 (25)% 22%
Other consumer 933 1,066 1,428 (12)% (35)%
Total consumer 2,439 3,065 2,666 (20)% (9)%
Total  $ 42,862 32,116 32,278 33% 33%
           
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
  March 31, December 31, March 31, March 31, March 31,
(Dollars in thousands) 2014 2013 2013 2014 2014
Custom and owner occupied construction $ — (51) (1)
Pre-sold and spec construction (16) (10) (7) 16
Total residential construction (16) (61) (8) 16
Land development 93 (383) 68 128 35
Consumer land or lots (69) 843 (38) 11 80
Unimproved land (5) 715 239 10 15
Developed lots for operative builders (17) (81) (22) 17
Commercial lots (2) 248 242 2
Other construction (473) (1)
Total land, lot and other construction 869 488 149 149
Owner occupied (18) 350 (305) 18
Non-owner occupied (185) 397 12 45 230
Total commercial real estate (203) 747 (293) 45 248
Commercial and industrial 1,038 3,096 575 1,111 73
Agriculture 53 3
1st lien (199) 681 181 57 256
Junior lien 38 106 71 54 16
Total 1-4 family (161) 787 252 111 272
Multifamily residential 1 (39) (5) 7 6
Home equity lines of credit 51 1,606 1,154 81 30
Other consumer 34 324 (47) 81 47
Total consumer 85 1,930 1,107 162 77
Other 8 1 1
Total  $ 744 7,390 2,119 1,586 842
           

Visit our website at www.glacierbancorp.com

Michael J. Blodnick
(406) 751-4701
Ron J. Copher
(406) 751-7706