Glacier Bancorp, Inc. Announces Results for the Quarter and Period Ended June 30, 2022

Glacier Bancorp, Inc.

2nd Quarter 2022 Highlights:

• Net income was $76.4 million for the current quarter, an increase of $8.6 million, or 13 percent, from the prior quarter net income of $67.8 million.

• The loan portfolio, excluding the Payroll Protection Program (“PPP”) loans, grew $714 million, or 21 percent annualized, in the current quarter.

• Net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.23 percent compared to 3.20 percent in the prior quarter. The core net interest margin for the current quarter of 3.16 percent, increased 9 basis points from 3.07 percent in the prior quarter.

• Net interest income, on a tax-equivalent basis, was $199 million in the current quarter which increased $8.6 million, or 5 percent, over the prior quarter net interest income of $190 million.

• Core deposits increased $85.5 million, or 2 percent annualized, during the current quarter.

• Non-interest bearing deposits increased $71.3 million, or 4 percent, annualized during the current quarter.

• The Company declared a quarterly dividend of $0.33 per share. The Company has declared 149 consecutive quarterly dividends and has increased the dividend 49 times.
  

First Half 2022 Highlights:

• The loan portfolio, excluding the PPP loans, organically grew $1.121 billion, or 17 percent annualized, in the first half of 2022.

• Net interest income, on a tax-equivalent basis, was $389 million in the first half of 2022. Excluding the PPP loans, net interest income was $384 million which increased $86.8 million, or 29 percent, over the prior year first half net interest income of $298 million.

• Core deposits increased $468 million, or 4 percent annualized, during the first six months of 2022.

• Dividends declared in the first half of 2022 of $0.66 per share, an increase of $0.03 per share, or 5 percent, over the prior year dividends of $0.63.

Financial Summary

		At or for the Three Months ended										At or for the Six Months ended
(Dollars in thousands, except per share and market data)		Jun 30, 2022				Mar 31, 2022			Jun 30, 2021			Jun 30, 2022			Jun 30, 2021
Operating results
Net income		$	76,392			67,795			77,627			144,187			158,429
Basic earnings per share		$	0.69			0.61			0.81			1.30			1.66
Diluted earnings per share		$	0.69			0.61			0.81			1.30			1.66
Dividends declared per share		$	0.33			0.33			0.32			0.66			0.63
Market value per share
Closing		$	47.42			50.28			55.08			47.42			55.08
High		$	51.40			60.69			63.05			60.69			67.35
Low		$	44.43			49.61			52.99			44.43			44.55
Selected ratios and other data
Number of common stock shares outstanding			110,766,287			110,763,316			95,507,234			110,766,287			95,507,234
Average outstanding shares - basic			110,765,379			110,724,655			95,505,877			110,745,017			95,485,839
Average outstanding shares - diluted			110,794,982			110,800,001			95,580,904			110,799,368			95,565,591
Return on average assets (annualized)			1.16	%		1.06	%		1.55	%		1.11	%		1.64	%
Return on average equity (annualized)			10.55	%		8.97	%		13.25	%		9.76	%		13.68	%
Efficiency ratio			55.74	%		57.11	%		49.92	%		56.42	%		48.31	%
Dividend payout			47.83	%		54.10	%		39.51	%		50.77	%		37.95	%
Loan to deposit ratio			66.26	%		63.52	%		67.64	%		66.26	%		67.64	%
Number of full time equivalent employees			3,439			3,439			2,987			3,439			2,987
Number of locations			224			223			194			224			194
Number of ATMs			274			273			250			274			250

KALISPELL, Mont., July 21, 2022 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NYSE: GBCI) reported net income of $76.4 million for the current quarter, a decrease of $1.2 million, or 2 percent, from the $77.6 million of net income for the prior year second quarter. Diluted earnings per share for the current quarter was $0.69 per share, a decrease of 15 percent from the prior year second quarter diluted earnings per share of $0.81. The $1.2 million decrease in second quarter earnings over the prior year second quarter was driven primarily by a $11.1 million decrease in gain on the sale of residential loans, a $10.3 million decrease in the PPP related income, an increase of $4.1 million of provision for credit loss, and a $976 thousand increase in acquisition-related expenses. For the quarter, the Company experienced a $38.0 million increase, or 24 percent, in net interest income and a $29.4 million increase, or 29 percent, in non-interest expense over the prior year second quarter which was driven by the acquisition of Altabancorp and its Altabank subsidiary (“Alta”). “We were very pleased to see the high quality loan and deposit growth we achieved this quarter,” said Randy Chesler, President and Chief Executive Officer. “We remain prepared to manage through economic headwinds if the economy experiences a recession and are confident in the long term resiliency of our markets and our core business.”

Net income for the six month ended June 30, 2022 was $144.2 million, a decrease of $14.2 million, or 9 percent, from the $158.4 million net income for the first six months in the prior year. Diluted earnings per share for the first half of 2022 was $1.30 per share, a decrease of 22 percent from the prior year first half earnings per share of $1.66. The $14.2 million decrease in net income over the prior year first half was driven primarily by a $25.7 million decrease in the PPP related income, a $23.7 million decrease in gain on the sale of residential loans, an increase of $11.1 million of provision for credit loss, and a $7.1 million increase in acquisition-related expenses.

Asset Summary

															$ Change from
(Dollars in thousands)		Jun 30, 2022				Mar 31, 2022			Dec 31, 2021			Jun 30, 2021			Mar 31, 2022			Dec 31, 2021			Jun 30, 2021
Cash and cash equivalents		$	415,406			436,805			437,686			921,207			(21,399	)		(22,280	)		(505,801	)
Debt securities, available-for-sale			6,209,199			6,535,763			9,170,849			6,147,143			(326,564	)		(2,961,650	)		62,056
Debt securities, held-to-maturity			3,788,486			3,576,941			1,199,164			1,024,730			211,545			2,589,322			2,763,756
Total debt securities			9,997,685			10,112,704			10,370,013			7,171,873			(115,019	)		(372,328	)		2,825,812
Loans receivable
Residential real estate			1,261,119			1,125,648			1,051,883			734,838			135,471			209,236			526,281
Commercial real estate			9,310,070			8,865,585			8,630,831			6,584,322			444,485			679,239			2,725,748
Other commercial			2,685,392			2,661,048			2,664,190			2,932,419			24,344			21,202			(247,027	)
Home equity			773,582			715,963			736,288			648,800			57,619			37,294			124,782
Other consumer			369,592			362,775			348,839			337,669			6,817			20,753			31,923
Loans receivable			14,399,755			13,731,019			13,432,031			11,238,048			668,736			967,724			3,161,707
Allowance for credit losses			(172,963	)		(176,159	)		(172,665	)		(151,448	)		3,196			(298	)		(21,515	)
Loans receivable, net			14,226,792			13,554,860			13,259,366			11,086,600			671,932			967,426			3,140,192
Other assets			2,050,122			1,995,955			1,873,580			1,308,353			54,167			176,542			741,769
Total assets		$	26,690,005			26,100,324			25,940,645			20,488,033			589,681			749,360			6,201,972

Total debt securities of $9.998 billion at June 30, 2022 decreased $115 million, or 1 percent, during the current quarter and increased $2.826 billion, or 39 percent, from the prior year second quarter. Debt securities represented 37 percent of total assets at June 30, 2022 compared to 40 percent at December 31, 2021 and 35 percent of total assets at June 30, 2021.

The loan portfolio of $14.400 billion at June 30, 2022 increased $669 million, or 5 percent, in the current quarter and increased $3.162 billion, or 28 percent, from the prior year second quarter. Excluding the PPP loans, the loan portfolio increased $714 million, or 21 percent annualized, during the current quarter with the largest dollar increase in commercial real estate which increased $444 million, or 20 percent annualized. Excluding the PPP loans and loans from the acquisition of Alta, the loan portfolio increased $1.950 billion, or 19 percent, from the prior year second quarter with the largest dollar increase in commercial real estate loans which increased $1.323 billion, or 20 percent.

The Company received $44.5 million in PPP loan forgiveness during the current quarter. As of June 30, 2022, the Company had $15.7 million of PPP loans remaining. In the current quarter, the Company recognized $1.6 million of interest income (including deferred fees and costs) from the PPP loans. The income recognized in the current quarter included $1.4 million acceleration of net deferred fees in interest income resulting from the SBA forgiveness of loans. Net deferred fees remaining on the balance of the PPP loans at June 30, 2022 was $416 thousand, which will be recognized into interest income over the remaining life of the loans or when the loans are forgiven in whole or in part by the SBA.

Credit Quality Summary

		At or for the Six Months ended				At or for the Three Months ended			At or for the Year ended			At or for the Six Months ended
(Dollars in thousands)		Jun 30, 2022				Mar 31, 2022			Dec 31, 2021			Jun 30, 2021
Allowance for credit losses
Balance at beginning of period		$	172,665			172,665			158,243			158,243
Acquisitions			—			—			371			—
Provision for credit losses			2,991			4,344			16,380			(5,234	)
Charge-offs			(7,040	)		(2,695	)		(11,594	)		(5,946	)
Recoveries			4,347			1,845			9,265			4,385
Balance at end of period		$	172,963			176,159			172,665			151,448
Provision for credit losses
Loan portfolio		$	2,991			4,344			16,380			(5,234	)
Unfunded loan commitments			2,507			2,687			6,696			(371	)
Total provision for credit losses		$	5,498			7,031			23,076			(5,605	)
Other real estate owned		$	—			—			—			705
Other foreclosed assets			379			43			18			66
Accruing loans 90 days or more past due			5,064			4,510			17,141			4,220
Non-accrual loans			38,523			57,923			50,532			48,050
Total non-performing assets		$	43,966			62,476			67,691			53,041
Non-performing assets as a percentage of subsidiary assets			0.16	%		0.24	%		0.26	%		0.26	%
Allowance for credit losses as a percentage of non-performing loans			393	%		282	%		255	%		290	%
Allowance for credit losses as a percentage of total loans			1.20	%		1.28	%		1.29	%		1.35	%
Net charge-offs as a percentage of total loans			0.02	%		0.01	%		0.02	%		0.01	%
Accruing loans 30-89 days past due		$	16,588			16,080			50,566			12,076
Accruing troubled debt restructurings		$	33,859			33,702			34,591			37,667
Non-accrual troubled debt restructurings		$	2,427			2,501			2,627			3,179
U.S. government guarantees included in non-performing assets		$	5,888			5,068			4,028			4,186

Non-performing assets of $44.0 million at June 30, 2022 decreased $18.5 million, or 30 percent, over the prior quarter and decreased $9.1 million, or 17 percent, over prior year second quarter. Non-performing assets as a percentage of subsidiary assets at June 30, 2022 was 0.16 percent compared to 0.24 percent in the prior quarter and 0.26 percent in the prior year second quarter.

Early stage delinquencies (accruing loans 30-89 days past due) of $16.6 million at June 30, 2022 increased $508 thousand from the prior quarter and increased $4.5 million from the prior year second quarter. Early stage delinquencies as a percentage of loans at June 30, 2022 was 12 basis points, which compared to 12 basis points in the prior quarter and 11 basis points from prior year second quarter.

The current quarter credit loss benefit of $1.5 million included $1.4 million of credit loss benefit from loans and $179 thousand of credit loss benefit from unfunded loan commitments. The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at June 30, 2022 was 1.20 percent which was an 8 basis point decrease compared to the prior quarter and a 15 basis points decrease from the prior year second quarter.

Credit Quality Trends and Provision for Credit Losses on the Loan Portfolio

(Dollars in thousands)		Provision for Credit Losses Loans				Net Charge-Offs (Recoveries)				ACL as a Percent of Loans			Accruing Loans 30-89 Days Past Due as a Percent of Loans			Non-Performing Assets to Total Subsidiary Assets
Second quarter 2022		$	(1,353	)		$	1,843			1.20	%		0.12	%		0.16	%
First quarter 2022			4,344				850			1.28	%		0.12	%		0.24	%
Fourth quarter 2021			19,301				616			1.29	%		0.38	%		0.26	%
Third quarter 2021			2,313				152			1.36	%		0.23	%		0.24	%
Second quarter 2021			(5,723	)			(725	)		1.35	%		0.11	%		0.26	%
First quarter 2021			489				2,286			1.39	%		0.40	%		0.19	%
Fourth quarter 2020			(1,528	)			4,781			1.42	%		0.20	%		0.19	%
Third quarter 2020			2,869				826			1.42	%		0.15	%		0.25	%

The current quarter provision for credit loss benefit for loans was $1.4 million which was a decrease of $5.7 million from the prior quarter which was driven by the continued improvement in the credit quality and the Company’s increased comfort with the economic forecasts. Current quarter provision for credit loss benefit for loans decreased $4.3 million from the prior year second quarter provision for credit loss benefit of $5.7 million.

Net charge-offs for the current quarter were $1.8 million compared to $850 thousand for the prior quarter and recoveries of $725 thousand from the same quarter last year. Loan portfolio growth, composition, average loan size, credit quality considerations, economic forecasts and other environmental factors will continue to determine the level of the provision for credit losses for loans.

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)		Jun 30, 2022			Mar 31, 2022		Dec 31, 2021		Jun 30, 2021		Mar 31, 2022			Dec 31, 2021			Jun 30, 2021
Deposits
Non-interest bearing deposits		$	8,061,304		7,990,003		7,779,288		6,307,794		71,301			282,016			1,753,510
NOW and DDA accounts			5,432,333		5,376,881		5,301,832		4,151,264		55,452			130,501			1,281,069
Savings accounts			3,296,561		3,287,521		3,180,046		2,346,129		9,040			116,515			950,432
Money market deposit accounts			4,021,102		4,044,655		4,014,128		2,990,021		(23,553	)		6,974			1,031,081
Certificate accounts			968,382		995,147		1,036,077		939,563		(26,765	)		(67,695	)		28,819
Core deposits, total			21,779,682		21,694,207		21,311,371		16,734,771		85,475			468,311			5,044,911
Wholesale deposits			4,001		3,688		25,878		26,121		313			(21,877	)		(22,120	)
Deposits, total			21,783,683		21,697,895		21,337,249		16,760,892		85,788			446,434			5,022,791
Repurchase agreements			968,197		958,479		1,020,794		995,201		9,718			(52,597	)		(27,004	)
Federal Home Loan Bank advances			580,000		80,000		—		—		500,000			580,000			580,000
Other borrowed funds			66,200		57,258		44,094		33,556		8,942			22,106			32,644
Subordinated debentures			132,701		132,661		132,620		132,540		40			81			161
Other liabilities			262,985		239,838		228,266		211,889		23,147			34,719			51,096
Total liabilities		$	23,793,766		23,166,131		22,763,023		18,134,078		627,635			1,030,743			5,659,688

Core deposits of $21.780 billion increased $85.5 million, or 2 percent annualized, during the current quarter and non-interest bearing deposits increased $71.3 million, or 4 percent annualized, during the current quarter. Excluding the Alta acquisition, core deposits increased $1.771 billion, or 11 percent, from the prior year second quarter. During 2020 and 2021, the Company experienced unprecedented increases in core deposits as a result of increased customer savings and federal stimulus. Non-interest bearing deposits were 37 percent of total core deposits at June 30, 2022 and December 31, 2021 compared to 38 percent at June 30, 2021.

Federal Home Loan Bank (“FHLB”) advances increased $500 million during the current quarter to support the liquidity needs driven by the increase in the loan portfolio. The FHLB advances will continue to fluctuate to supplement the liquidity needs during the year.

Stockholders’ Equity Summary

															$ Change from
(Dollars in thousands, except per share data)		Jun 30, 2022				Mar 31, 2022			Dec 31, 2021			Jun 30, 2021			Mar 31, 2022			Dec 31, 2021			Jun 30, 2021
Common equity		$	3,223,451			3,182,002			3,150,263			2,263,513			41,449			73,188			959,938
Accumulated other comprehensive (loss) income			(327,212	)		(247,809	)		27,359			90,442			(79,403	)		(354,571	)		(417,654	)
Total stockholders’ equity			2,896,239			2,934,193			3,177,622			2,353,955			(37,954	)		(281,383	)		542,284
Goodwill and core deposit intangible, net			(1,032,323	)		(1,034,987	)		(1,037,652	)		(564,546	)		2,664			5,329			(467,777	)
Tangible stockholders’ equity		$	1,863,916			1,899,206			2,139,970			1,789,409			(35,290	)		(276,054	)		74,507

Stockholders’ equity to total assets			10.85	%		11.24	%		12.25	%		11.49	%
Tangible stockholders’ equity to total tangible assets			7.26	%		7.58	%		8.59	%		8.98	%
Book value per common share		$	26.15			26.49			28.71			24.65			(0.34	)		(2.56	)		1.50
Tangible book value per common share		$	16.83			17.15			19.33			18.74			(0.32	)		(2.50	)		(1.91	)

Tangible stockholders’ equity of $1.864 billion at June 30, 2022 decreased $35.3 million, or 2 percent, from the prior quarter which was primarily driven by an increase in the unrealized loss on the available-for-sale (“AFS”) debt securities during the current quarter which was driven by an increase in interest rates. Tangible stockholders’ equity at June 30, 2022 increased $74.5 million, or 4 percent, from the prior year second quarter which largely was the result of $840 million of Company common stock issued for the acquisition of Alta, despite the increase in goodwill and core deposit intangibles associated with the Alta acquisition and an increase in the unrealized loss on the AFS debt securities. Tangible book value per common share of $16.83 at the current quarter end decreased $0.32 per share, or 2 percent, from the prior quarter and decreased $1.91 per share, or 10 percent, from the prior year second quarter primarily as a result of the increase in the unrealized loss on AFS debt securities.

Cash Dividends
On June 29, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.33 per share. The dividend was payable July 21, 2022 to shareholders of record on July 12, 2022. The dividend was the Company’s 149th consecutive dividend. 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 June 30, 2022 
Compared to March 31, 2022, and June 30, 2021

Income Summary

Three Months ended

$ Change from

(Dollars in thousands)

Jun 30, 2022

Mar 31, 2022

Jun 30, 2021

Mar 31, 2022

Jun 30, 2021

Net interest income

Interest income

$

199,637