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Glacier Bancorp, Inc. Announces Results for the Quarter Ended December 31, 2019

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In this article:
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4th Quarter 2019 Highlights:

  • Net income of $57.4 million for the current quarter, an increase of $7.8 million, or 16 percent, over the prior year fourth quarter net income of $49.6 million.

  • Current quarter diluted earnings per share of $0.62, an increase of 5 percent from the prior year fourth quarter diluted earnings per share of $0.59.

  • Net interest margin of 4.45 percent increased 3 basis points compared to 4.42 percent in the prior quarter and increased 15 basis points over the prior year fourth quarter net interest margin of 4.30 percent.

  • Interest bearing deposits increased $65 million, or 4 percent annualized, during the current quarter.

  • Non-performing assets of $37.4 million, decreased $17.7 million, or 32 percent, from the prior quarter non-performing assets of $55.1 million.

  • Declared a special dividend of $0.20 per share. This was the 16th special dividend the Company has declared.

  • Declared and paid a regular dividend of $0.29 per share. The Company has declared 139 consecutive quarterly dividends and has increased the dividend 45 times.

Year 2019 Highlights:

  • Net income of $211 million for 2019, an increase of $28.7 million, or 16 percent, over the prior year net income of $182 million.

  • Diluted earnings per share of $2.38, an increase of 10 percent from the prior year diluted earnings per share of $2.17.

  • Net interest margin of 4.39 percent for 2019, an increase of 18 basis points from the net interest margin of 4.21 percent in 2018.

  • Core deposits organically grew $401 million, or 4 percent, during 2019, including non-interest bearing deposit growth of $305 million, or 10 percent.

  • Organic loan growth was $364 million, or 4 percent for 2019.

  • Regular quarterly dividends declared of $1.11 per share, an increase of $0.10 per share, or 10 percent, over the prior year regular quarterly dividends of $1.01.

  • The Company announced the signing of a definitive agreement to acquire State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona with total assets of $678 million at December 31, 2019 which will significantly enhance its Arizona franchise.

  • The Company entered Nevada by completing the acquisition of Heritage Bancorp, the parent company of Heritage Bank of Nevada (collectively, "Heritage"), a community bank based in Reno, Nevada, with total assets of $978 million.

  • The Company completed the acquisition of FNB Bancorp, the holding company for The First National Bank of Layton (collectively, "FNB"), a community bank based in Layton, Utah, with total assets of $379 million.

Financial Highlights

At or for the Three Months ended

At or for the Year ended

(Dollars in thousands, except per share and market data)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Dec 31,
2019

Dec 31,
2018

Operating results

Net income

$

57,410

51,610

52,392

49,132

49,599

210,544

181,878

Basic earnings per share

$

0.62

0.57

0.61

0.58

0.59

2.39

2.18

Diluted earnings per share

$

0.62

0.57

0.61

0.58

0.59

2.38

2.17

Dividends declared per share

$

0.49

0.29

0.27

0.26

0.56

1.31

1.31

Market value per share

Closing

$

45.99

40.46

40.55

40.07

39.62

45.99

39.62

High

$

46.51

42.61

43.44

45.47

47.67

46.51

47.67

Low

$

38.99

37.70

38.65

37.58

36.84

37.58

35.77

Selected ratios and other data

Number of common stock shares outstanding

92,289,750

92,180,618

86,637,394

84,588,199

84,521,692

92,289,750

84,521,692

Average outstanding shares - basic

92,243,133

90,294,811

85,826,290

84,549,974

84,521,640

88,255,290

83,603,515

Average outstanding shares - diluted

92,365,021

90,449,195

85,858,286

84,614,248

84,610,018

88,385,775

83,677,185

Return on average assets (annualized)

1.67

%

1.55

%

1.69

%

1.67

%

1.66

%

1.64

%

1.59

%

Return on average equity (annualized)

11.61

%

10.92

%

12.82

%

13.02

%

13.08

%

12.01

%

12.56

%

Efficiency ratio

54.90

%

65.95

%

54.50

%

55.37

%

53.93

%

57.78

%

54.73

%

Dividend payout ratio

79.03

%

50.88

%

44.26

%

44.83

%

94.92

%

54.81

%

60.09

%

Loan to deposit ratio

88.92

%

88.71

%

90.27

%

87.14

%

87.64

%

88.92

%

87.64

%

Number of full time equivalent employees

2,826

2,802

2,703

2,634

2,623

2,826

2,623

Number of locations

181

182

175

169

167

181

167

Number of ATMs

248

238

228

222

216

248

216

______________________________

1 Includes a special dividend declared of $0.20 and $0.30 per share for the three months ended December 31, 2019 and December 31, 2018 and for the years ended December 31, 2019 and 2018.

KALISPELL, Mont., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (GBCI) reported net income of $57.4 million for the current quarter, an increase of $7.8 million, or 16 percent, from the $49.6 million of net income for the prior year fourth quarter. Diluted earnings per share for the current quarter was $0.62 per share, an increase of 5 percent from the prior year fourth quarter diluted earnings per share of $0.59. Included in the current quarter was acquisition-related expenses of $4.4 million and a $1.3 million reduction in regulatory assessment and insurance expense from Small Bank Assessment credits applied by the FDIC. “These results represent a strong close to a great year. We are especially pleased to see the substantial improvement in credit this quarter and a business that continues to withstand market headwinds. The Company's growth and performance for the quarter and the full year was well balanced across all of our key operating metrics,” said Randy Chesler, President and Chief Executive Officer. “Our Company has grown stronger during 2019, both organically and with the addition of Heritage Bank in Nevada and First Community Bank in Utah. With this foundation, we believe the Glacier team is set to have another strong year in 2020.”

Net income for 2019 was $211 million, an increase of $28.7 million, or 16 percent, from the $182 million of net income for the prior year. Diluted earnings per share for the current year was $2.38 per share, an increase of $0.21, or 10 percent, from the diluted earnings per share of $2.17 for the same period in the prior year.

In September of 2019, the Company announced the signing of a definitive agreement to acquire State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona (collectively, "SBAZ"). SBAZ provides banking services to individuals and businesses in Arizona with ten banking offices located in Bullhead City, Cottonwood, Kingman, Lake Havasu City, Phoenix, Prescott Valley and Prescott. As of December 31, 2019, SBAZ had total assets of $678 million, gross loans of $439 million and total deposits of $587 million. The acquisition has received regulatory approvals, is subject to other customary conditions of closing and is expected to be completed in the first quarter of 2020. Upon closing of the transaction, SBAZ will merge into the Company's Foothills Bank division and will expand the Company's footprint in Arizona to cover all major markets in the state and be a leading community bank in Arizona.

On July 31, 2019, the Company completed the acquisition of Heritage Bancorp, the bank holding company for Heritage Bank of Nevada, a community bank based in Reno, Nevada (collectively, “Heritage”). Upon closing of the transaction, Heritage became the Company’s sixteenth Bank division. This acquisition also marks the Company's first entrance into the state of Nevada.

On April 30, 2019, the Company completed the acquisition of FNB Bancorp, the holding company for The First National Bank of Layton, a community bank based in Layton, Utah (“FNB”). Upon closing of the transaction, FNB became First Community Bank Utah, the Company’s first division in Utah and the fifteenth Bank division. In October, the Company combined its four existing Utah-based branches into First Community Bank Utah, enhancing the Company's growth prospects in one of the fastest growing markets in the United States.

The Company’s results of operations and financial condition include both acquisitions beginning on the acquisition dates and the following table discloses the preliminary fair value estimates of selected classifications of assets and liabilities acquired:

Heritage

FNB

(Dollars in thousands)

July 31,
2019

April 30,
2019

Total

Total assets

977,944

$

379,155

1,357,099

Debt securities

103,231

47,247

150,478

Loans receivable

615,279

245,485

860,764

Non-interest bearing deposits

296,393

93,647

390,040

Interest bearing deposits

425,827

180,999

606,826

Borrowings

7,273

7,273

Asset Summary

$ Change from

(Dollars in thousands)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Sep 30,
2019

Dec 31,
2018

Cash and cash equivalents

$

330,961

406,384

203,790

(75,423

)

127,171

Debt securities, available-for-sale

2,575,252

2,459,036

2,571,663

116,216

3,589

Debt securities, held-to-maturity

224,611

234,992

297,915

(10,381

)

(73,304

)

Total debt securities

2,799,863

2,694,028

2,869,578

105,835

(69,715

)

Loans receivable

Residential real estate

926,388

936,877

887,742

(10,489

)

38,646

Commercial real estate

5,579,307

5,548,174

4,657,561

31,133

921,746

Other commercial

2,094,254

2,145,257

1,911,171

(51,003

)

183,083

Home equity

617,201

615,781

544,688

1,420

72,513

Other consumer

295,660

294,999

286,387

661

9,273

Loans receivable

9,512,810

9,541,088

8,287,549

(28,278

)

1,225,261

Allowance for loan and lease losses

(124,490

)

(125,535

)

(131,239

)

1,045

6,749

Loans receivable, net

9,388,320

9,415,553

8,156,310

(27,233

)

1,232,010

Other assets

1,164,855

1,202,827

885,806

(37,972

)

279,049

Total assets

$

13,683,999

13,718,792

12,115,484

(34,793

)

1,568,515

Total debt securities of $2.800 billion at December 31, 2019 increased $106 million, or 4 percent, during the current quarter and decreased $69.7 million, or 2 percent, from the prior year. Debt securities represented 20 percent of total assets at December 31, 2019 compared to 24 percent of total assets at December 31, 2018. The level of debt securities will continue to fluctuate as necessary to supplement liquidity needs of the Company.

The loan portfolio of $9.513 billion decreased $28.3 million, or 30 basis points, during the current quarter primarily as a result of seasonality and a few isolated loan payoffs. Excluding the FNB and Heritage acquisitions, the loan portfolio increased $364 million, or 4 percent, since December 31, 2018, with the largest increase in commercial real estate loans, which increased $195 million, or 4 percent.

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.

Credit Quality Summary

At or for the Year
ended

At or for the Nine
Months ended

At or for the
Year ended

(Dollars in thousands)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Allowance for loan and lease losses

Balance at beginning of period

$

131,239

131,239

129,568

Provision for loan losses

57

57

9,953

Charge-offs

(15,178

)

(12,090

)

(17,807

)

Recoveries

8,372

6,329

9,525

Balance at end of period

$

124,490

125,535

131,239

Other real estate owned

$

5,142

7,148

7,480

Accruing loans 90 days or more past due

1,412

7,912

2,018

Non-accrual loans

30,883

40,017

47,252

Total non-performing assets

$

37,437

55,077

56,750

Non-performing assets as a percentage of subsidiary assets

0.27

%

0.40

%

0.47

%

Allowance for loan and lease losses as a percentage of non-performing loans

385

%

262

%

266

%

Allowance for loan and lease losses as a percentage of total loans

1.31

%

1.32

%

1.58

%

Net charge-offs as a percentage of total loans

0.07

%

0.06

%

0.10

%

Accruing loans 30-89 days past due

$

23,192

29,954

33,567

Accruing troubled debt restructurings

$

34,055

32,949

25,833

Non-accrual troubled debt restructurings

$

3,346

6,723

10,660

U.S. government guarantees included in non-performing assets

$

1,786

3,000

4,811

The Company experienced another successful quarter in reducing non-performing assets as the Bank divisions continued to focus on resolving outstanding credit issues. Non-performing assets of $37.4 million at December 31, 2019 decreased $17.6 million, or 32 percent, over the prior quarter and decreased $19.3 million, or 34 percent, over the prior year end. Non-performing assets as a percentage of subsidiary assets at December 31, 2019 was 0.27 percent, a decrease of 13 basis point from the prior quarter, and a decrease of 20 basis points from the prior year fourth quarter. Early stage delinquencies (accruing loans 30-89 days past due) of $23.2 million at December 31, 2019 decreased $6.8 million from the prior quarter and decreased $10.4 million from the prior year end. Early stage delinquencies as a percentage of loans at December 31, 2019 was 0.24 percent, which was a decrease of 7 basis points from prior quarter and a 17 basis points decrease from prior year end.

The allowance for loan and lease losses (“allowance”) as a percent of total loans outstanding at December 31, 2019 was 1.31 percent, which was a 1 basis point decrease compared to the prior quarter and a decrease of 27 basis points from a year ago. The decrease from prior year end was attributable to stabilizing credit quality and the addition of loans from the acquisitions which were added to the portfolio on a fair value basis and as a result did not require an allowance at acquisition date.

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

Fourth quarter 2019

$

$

1,045

1.31

%

0.24

%

0.27

%

Third quarter 2019

3,519

1.32

%

0.31

%

0.40

%

Second quarter 2019

732

1.46

%

0.43

%

0.41

%

First quarter 2019

57

1,510

1.56

%

0.44

%

0.42

%

Fourth quarter 2018

1,246

2,542

1.58

%

0.41

%

0.47

%

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

%

Net charge-offs for the current quarter were $1.0 million compared to $3.5 million for the prior quarter and $2.5 million from the same quarter last year. There was no current or prior quarter provision for loan losses compared to $1.2 million in the prior year fourth 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.

Liability Summary

$ Change from

(Dollars in thousands)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Sep 30,
2019

Dec 31,
2018

Deposits

Non-interest bearing deposits

$

3,696,627

3,772,766

3,001,178

(76,139

)

695,449

NOW and DDA accounts

2,645,404

2,592,483

2,391,307

52,921

254,097

Savings accounts

1,485,487

1,472,465

1,346,790

13,022

138,697

Money market deposit accounts

1,937,141

1,940,517

1,684,284

(3,376

)

252,857

Certificate accounts

958,501

955,765

901,484

2,736

57,017

Core deposits, total

10,723,160

10,733,996

9,325,043

(10,836

)

1,398,117

Wholesale deposits

53,297

134,629

168,724

(81,332

)

(115,427

)

Deposits, total

10,776,457

10,868,625

9,493,767

(92,168

)

1,282,690

Repurchase agreements

569,824

558,752

396,151

11,072

173,673

Federal Home Loan Bank advances

38,611

8,707

440,175

29,904

(401,564

)

Other borrowed funds

28,820

14,808

14,708

14,012

14,112

Subordinated debentures

139,914

139,913

134,051

1

5,863

Other liabilities

169,640

174,586

120,778

(4,946

)

48,862

Total liabilities

$

11,723,266

11,765,391

10,599,630

(42,125

)

1,123,636

Core deposits of $10.723 billion as of December 31, 2019 decreased $10.8 million or 10 basis points, from the prior quarter with the decrease primarily attributable to the $76 million, or 2 percent, seasonal reduction in non-interest bearing deposits. Excluding acquisitions, core deposits increased $401 million, or 4 percent, from prior year end with non-interest bearing deposits increasing $305 million, or 10 percent. Non-interest bearing deposits were 34 percent of total core deposits at current year end, an increase of 2 percent from 32 percent of total core deposits at the prior year end.

Wholesale deposits of $53.3 million at December 31, 2019 decreased $81.3 million from prior quarter and decreased $115 million from the prior year end. FHLB advances of $38.6 million at December 31, 2019 increased $29.9 million from prior quarter and decreased $402 million from the prior year end. As a result of the prior quarter's balance sheet strategy, the Company reduced its overall wholesale funding during 2019. The balance sheet strategy included early termination of the Company's $260 million notional pay-fixed interest rate swaps and corresponding debt. Wholesale deposits and FHLB advances will continue to fluctuate as necessary for balance sheet growth and to supplement liquidity needs of the Company.

Stockholders’ Equity Summary

$ Change from

(Dollars in thousands, except per share data)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Sep 30,
2019

Dec 31,
2018

Common equity

$

1,920,507

1,905,306

1,525,281

15,201

395,226

Accumulated other comprehensive income (loss)

40,226

48,095

(9,427

)

(7,869

)

49,653

Total stockholders’ equity

1,960,733

1,953,401

1,515,854

7,332

444,879

Goodwill and core deposit intangible, net

(519,704

)

(522,274

)

(338,828

)

2,570

(180,876

)

Tangible stockholders’ equity

$

1,441,029

1,431,127

1,177,026

9,902

264,003

Stockholders’ equity to total assets

14.33

%

14.24

%

12.51

%

Tangible stockholders’ equity to total tangible assets

10.95

%

10.84

%

9.99

%

Book value per common share

$

21.25

21.19

17.93

0.06

3.32

Tangible book value per common share

$

15.61

15.53

13.93

0.08

1.68

Tangible stockholders’ equity of $1.441 billion at December 31, 2019 increased $9.9 million, or 70 basis points, compared to the prior quarter which was driven by earnings retention. Tangible stockholders’ equity increased $264 million, or 22 percent, over the prior year end which was primarily the result of earnings retention, an increase in other comprehensive income, and the result of $317 million of Company stock issued for current year acquisitions. Tangible book value per common share of $15.61 at current quarter end increased $0.08 per share from the prior quarter and increased $1.68 per share from a year ago.

Cash Dividends
On December 30, 2019, the Company’s Board of Directors declared a special cash dividend of $0.20 per share, the 16th special dividend the Company has declared. The special dividend was payable January 16, 2020 to shareholders of record on January 7, 2020. On November 13, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.29 per share. The regular quarterly dividend was payable December 19, 2019 to shareholders of record on December 10, 2019. The Company has declared 139 consecutive quarterly dividends. Regular quarterly dividends for 2019 were $1.11 per share, an increase of $0.10 per share, or 10 percent, compared to prior year quarterly dividends of $1.01 per share. 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 December 31, 2019
Compared to September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018

Income Summary

Three Months ended

(Dollars in thousands)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Net interest income

Interest income

$

145,281

142,395

132,385

126,116

125,310

Interest expense

8,833

10,947

12,089

10,904

9,436

Total net interest income

136,448

131,448

120,296

115,212

115,874

Non-interest income

Service charges and other fees

14,756

15,138

20,025

18,015

19,708

Miscellaneous loan fees and charges

1,379

1,775

1,192

967

1,278

Gain on sale of loans

10,135

10,369

7,762

5,798

5,639

Gain (loss) on sale of investments

257

13,811

134

213

(357

)

Other income

1,890

1,956

1,721

3,481

2,226

Total non-interest income

28,417

43,049

30,834

28,474

28,494

Total income

$

164,865

174,497

151,130

143,686

144,368

Net interest margin (tax-equivalent)

4.45

%

4.42

%

4.33

%

4.34

%

4.30

%

$ Change from

(Dollars in thousands)

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Net interest income

Interest income

$

2,886

12,896

19,165

19,971

Interest expense

(2,114

)

(3,256

)

(2,071

)

(603

)

Total net interest income

5,000

16,152

21,236

20,574

Non-interest income

Service charges and other fees

(382

)

(5,269

)

(3,259

)

(4,952

)

Miscellaneous loan fees and charges

(396

)

187

412

101

Gain on sale of loans

(234

)

2,373

4,337

4,496

Gain (loss) on sale of investments

(13,554

)

123

44

614

Other income

(66

)

169

(1,591

)

(336

)

Total non-interest income

(14,632

)

(2,417

)

(57

)

(77

)

Total income

$

(9,632

)

13,735

21,179

20,497

Net Interest Income
The current quarter net interest income of $136 million increased $5.0 million, or 4 percent, over the prior quarter and increased $20.6 million, or 18 percent, from the prior year fourth quarter. The current quarter interest income of $145 million increased $2.9 million, or 2 percent, over the prior quarter and increased $20.0 million, or 16 percent, over prior year fourth quarter and was primarily driven by an increase in interest income on commercial loans. Interest income on commercial loans increased $3.1 million, or 3 percent, from the prior quarter and increased $18.1 million, or 22 percent, from the prior year fourth quarter.

The current quarter interest expense of $8.8 million decreased $2.1 million, or 19 percent, over the prior quarter and decreased $603 thousand, or 6 percent, over prior year fourth quarter which was driven by the decrease in higher cost FHLB advances and wholesale deposits. During the current quarter, the total cost of funding (including non-interest bearing deposits) declined 9 basis points to 30 basis points compared to 39 basis points for the prior quarter and 36 basis points for the prior year fourth quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.45 percent compared to 4.42 percent in the prior quarter. The core net interest margin, excluding $2.1 million, or 6 basis points, of discount accretion and $2.0 million, or 6 basis points, of non-accrual interest recoveries, was 4.33 percent compared to 4.35 in the prior quarter and 4.25 percent in the prior year fourth quarter. The Company experienced a 2 basis points decrease in the core net interest margin during the current quarter from decreased yields on loans and investments that more than offset the decrease in the cost of funding from the reduction of FHLB borrowings. The core net interest margin increased 8 basis points from the prior year fourth quarter primarily the result of increased yields on the loan portfolio and a decrease in funding cost. “The stable net margin reflects the full quarter benefits of September's balance sheet strategy to improve net interest income by reducing high cost funding and low yield securities,” said Ron Copher, Chief Financial Officer. “In addition, the average balance of non-interest bearing deposits increased in the current quarter and over the entire year.”

Non-interest Income
Non-interest income for the current quarter totaled $28.4 million which was a decrease of $14.6 million, or 34 percent, over the prior quarter and a decrease of $77 thousand, or 27 basis points, over the same quarter last year. In the prior quarter as part of the balance sheet strategy, the Company sold $308 million of securities and recognized gain of $13.8 million. Service charges and other fees of $14.8 million for the current quarter decreased $5.0 million, or 25 percent, from the prior year fourth quarter due to the Company's decrease in interchange fees as a result of the Durbin Amendment. As of July 1, 2019, the Company became subject to the Durbin Amendment which established limits on the amount of interchange fees that can be charged to merchants for debit card processing. Gain on the sale of loans of $10.1 million for the current quarter increased $4.5 million, or 80 percent, compared to the prior year fourth quarter as a result of increased purchase and refinance activity.

Non-interest Expense Summary

Three Months ended

(Dollars in thousands)

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Compensation and employee benefits

$

55,543

62,509

51,973

52,728

50,385

Occupancy and equipment

9,149

8,731

8,180

8,437

7,884

Advertising and promotions

2,747

2,719

2,767

2,388

2,434

Data processing

4,972

4,466

4,062

3,892

3,951

Other real estate owned

609

166

191

139

264

Regulatory assessments and insurance

45

593

1,848

1,285

1,263

Loss on termination of hedging activities

13,528

Core deposit intangibles amortization

2,566

2,360

1,865

1,694

1,731

Other expenses

19,621

15,603

15,284

12,267

13,964

Total non-interest expense

$

95,252

110,675

86,170

82,830

81,876

$ Change from

(Dollars in thousands)

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Compensation and employee benefits

$

(6,966

)

3,570

2,815

5,158

Occupancy and equipment

418

969

712

1,265

Advertising and promotions

28

(20

)

359

313

Data processing

506

910

1,080

1,021

Other real estate owned

443

418

470

345

Regulatory assessments and insurance

(548

)

(1,803

)

(1,240

)

(1,218

)

Loss on termination of hedging activities

(13,528

)

Core deposit intangibles amortization

206

701

872

835

Other expenses

4,018

4,337

7,354

5,657

Total non-interest expense

$

(15,423

)

9,082

12,422

13,376

Total non-interest expense of $95.3 million for the current quarter decreased $15.4 million, or 14 percent, over the prior quarter and increased $13.4 million, or 16 percent, over the prior year fourth quarter. Compensation and employee benefits decreased by $7.0 million, or 11 percent, from the prior quarter primarily due to the $5.4 million of stock compensation expense related to the accelerated vesting of stock options from the Heritage acquisition in the prior quarter. Compensation and employee benefits increased $5.2 million, or 10 percent, from the prior year fourth quarter due to an increased number of employees driven by acquisition and organic growth. Occupancy and equipment expense increased $418 thousand, or 5 percent, over the prior quarter and increased $1.3 million, or 16 percent, over the prior year fourth quarter as a result of the current year acquisitions and general cost increases. Data processing expense increased $506 thousand, or 11 percent, over the prior quarter and increased $1.0 million, or 26 percent, over the prior year fourth quarter primarily as a result of the current year acquisitions. Regulatory assessment and insurance decreased $1.2 million, or 96 percent, from the prior year fourth quarter primarily as a result of $1.3 million of Small Bank Assessment credits applied by the FDIC during the current quarter. The prior quarter loss on termination of hedging activities included a $3.5 million write-off of the remaining unamortized deferred prepayment penalties on FHLB advances and a $10.0 million loss on the termination of pay-fixed interest rate swaps with notional amounts totaling $260 million. Other expenses of $19.6 million, increased $4.0 million, or 26 percent, from the prior quarter and was primarily driven by an increase in acquisition-related expenses. Other expenses included acquisition-related expenses of $4.4 million in the current quarter compared to $2.1 million in the prior quarter and $520 thousand in the prior year fourth quarter.

Federal and State Income Tax Expense
Tax expense during the fourth quarter of 2019 was $12.2 million, which was stable compared to the prior quarter and an increase of $556 thousand, or 5 percent, from the prior year fourth quarter. The effective tax rate in the current quarter was 18 percent which compares to 19 percent in the prior quarter and prior year fourth quarter.

Efficiency Ratio
The current quarter efficiency ratio was 54.90 percent, a 97 basis points increase from the prior year fourth quarter efficiency ratio of 53.93 as a result of increased operating expenses from acquisitions and the Durbin amendment which outpaced the increase in net interest income.

Operating Results for Year Ended December 31, 2019
Compared to December 31, 2018

Income Summary

Year ended

(Dollars in thousands)

Dec 31,
2019

Dec 31,
2018

$ Change

% Change

Net interest income

Interest income

$

546,177

$

468,996

$

77,181

16

%

Interest expense

42,773

35,531

7,242

20

%

Total net interest income

503,404

433,465

69,939

16

%

Non-interest income

Service charges and other fees

67,934

74,887

(6,953

)

(9

)%

Miscellaneous loan fees and charges

5,313

6,805

(1,492

)

(22

)%

Gain on sale of loans

34,064

27,134

6,930

26

%

Gain (loss) on sale of investments

14,415

(1,113

)

15,528

(1,395

)%

Other income

9,048

11,111

(2,063

)

(19

)%

Total non-interest income

130,774

118,824

11,950

10

%

Total Income

$

634,178

$

552,289

$

81,889

15

%

Net interest margin (tax-equivalent)

4.39

%

4.21

%

Net Interest Income
Net interest income of $503 million for 2019 increased $69.9 million, or 16 percent, from prior year and was primarily attributable to a $64.9 million increase in interest income from commercial loans. Interest expense of $42.8 million for 2019 increased $7.2 million, or 20 percent over the prior year as a result of an increase in the amount of deposits and interest rate increases on deposits. The total funding cost (including non-interest bearing deposits) for 2019 was 39 basis points compared to 36 basis points for 2018.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for 2019 was 4.39 percent, an 18 basis points increase from the net interest margin of 4.21 percent for 2018. The increase in the margin was principally due to a shift in earning assets to higher yielding loans along with an increase in yields on the loan portfolio and an increase in non-accrual interest recoveries combined with relatively stable cost of funds and an increase low cost deposits. The current year included $4.4 million in non-accrual interest recoveries compared to $187 thousand in the prior year.

Non-interest Income
Non-interest income of $131 million for 2019 increased $12.0 million, or 10 percent, over the last year which was driven by the sale of debt securities from the balance sheet strategy implemented during the current year. Service charges and other fees of $67.9 million for 2019 decreased $7.0 million, or 9 percent, from the prior year. Excluding the impact from the Durbin Amendment, there was an increase in fees during the current year from the increased number of deposit accounts from organic growth and acquisitions. Gain on the sale of loans of $34.1 million for 2019, increased $6.9 million, or 26 percent, compared to the prior year as a result of increased purchase and refinance activity. Other income decreased $2.1 million from the prior year and was the result of a gain of $2.3 million on the sale of a former branch building in the prior year third quarter.

Non-interest Expense Summary

Year ended

(Dollars in thousands)

Dec 31,
2019

Dec 31,
2018

$ Change

% Change

Compensation and employee benefits

$

222,753

$

195,056

$

27,697

14

%

Occupancy and equipment

34,497

30,734

3,763

12

%

Advertising and promotions

10,621

9,566

1,055

11

%

Data processing

17,392

15,911

1,481

9

%

Other real estate owned

1,105

3,221

(2,116

)

(66

)%

Regulatory assessments and insurance

3,771

5,075

(1,304

)

(26

)%

Loss on termination of hedging activities

13,528

13,528

n/m

Core deposit intangibles amortization

8,485

6,270

2,215

35

%

Other expenses

62,775

54,294

8,481

16

%

Total non-interest expense

$

374,927

$

320,127

$

54,800

17

%

______________________________

n/m - not measurable

Total non-interest expense of $375 million for 2019 increased $54.8 million, or 17 percent, over the prior year. Compensation and employee benefits for 2019 increased $27.7 million, or 14 percent, from the prior year due to the increased number of employees from acquisitions and organic growth, a $5.4 million of stock compensation expense related to the Heritage acquisition and annual salary increases. Occupancy and equipment expense for 2019 increased $3.8 million, or 12 percent from the prior year as a result of increased cost from acquisitions and general cost increases. Data processing expense increased $1.5 million or 9 percent, over the prior year primarily as a result of increased costs from acquisitions. Regulatory assessment and insurance decreased $1.3 million, or 26 percent, from the prior year and included $2.5 million of Small Bank Assessment credits applied by the FDIC during the current year. Other expenses of $62.8 million in the current year, increased $8.5 million, or 16 percent, from the prior year and was primarily driven an increase in acquisition-related expenses, increased costs from acquisitions and general cost increases. Other expenses included acquisition-related expenses of $8.5 million in 2019 compared to $6.6 million in the prior year.

Provision for Loan Losses
The provision for loan losses was $57 thousand for 2019, a decrease of $9.9 million from prior year. Net charge-offs during the 2019 were $6.8 million compared to $8.3 million during 2018.

Federal and State Income Tax Expense
Tax expense of $48.7 million in 2019 increased $8.3 million, or 21 percent, over the prior year. The effective tax rate in 2019 was 19 percent compared to 18 percent in the prior year.

Efficiency Ratio
The efficiency ratio for the year ended December 31, 2019 was 57.78 percent. Excluding the $10.0 million loss recognized on the termination of the interest rate swaps, the $3.5 million write-off of the remaining unamortized deferred prepayment penalties on FHLB advances, and the $5.4 million of accelerated stock compensation expense, the efficiency ratio would have been 54.79 percent, which was an increase of 6 basis points from the efficiency ratio of 54.73 percent for 2018. The increase in the efficiency ratio was driven by the decrease in interchange fees from the Durbin Amendment that outpaced the increase in net interest income.

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;

  • 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, January 24, 2020. 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 9735109. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/eq5tpgz. 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 9735109 by February 7, 2020.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. is the parent company for Glacier Bank and its Bank divisions: Bank of the San Juans (Durango, CO), Citizens Community Bank (Pocatello, ID), Collegiate Peaks Bank (Buena Vista, CO), First Bank of Montana (Lewistown, MT), First Bank of Wyoming (Powell, WY), First Community Bank Utah (Layton, UT), First Security Bank of Bozeman (Bozeman, MT), First Security Bank of Missoula (Missoula, MT), First State Bank (Wheatland, WY), Glacier Bank (Kalispell, MT), Heritage Bank of Nevada (Reno, NV), Mountain West Bank (Coeur d’Alene, ID), North Cascades Bank (Chelan, WA), The Foothills Bank (Yuma, AZ), Valley Bank of Helena (Helena, MT), and Western Security Bank (Billings, MT).

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

(Dollars in thousands, except per share data)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Assets

Cash on hand and in banks

$

198,639

233,623

161,782

Interest bearing cash deposits

132,322

172,761

42,008

Cash and cash equivalents

330,961

406,384

203,790

Debt securities, available-for-sale

2,575,252

2,459,036

2,571,663

Debt securities, held-to-maturity

224,611

234,992

297,915

Total debt securities

2,799,863

2,694,028

2,869,578

Loans held for sale, at fair value

69,194

100,441

33,156

Loans receivable

9,512,810

9,541,088

8,287,549

Allowance for loan and lease losses

(124,490

)

(125,535

)

(131,239

)

Loans receivable, net

9,388,320

9,415,553

8,156,310

Premises and equipment, net

310,309

307,590

241,528

Other real estate owned

5,142

7,148

7,480

Accrued interest receivable

56,047

63,294

54,408

Deferred tax asset

2,037

23,564

Core deposit intangible, net

63,286

65,852

49,242

Goodwill

456,418

456,422

289,586

Non-marketable equity securities

11,623

10,427

27,871

Bank-owned life insurance

109,428

108,814

82,320

Other assets

81,371

82,839

76,651

Total assets

$

13,683,999

13,718,792

12,115,484

Liabilities

Non-interest bearing deposits

$

3,696,627

3,772,766

3,001,178

Interest bearing deposits

7,079,830

7,095,859

6,492,589

Securities sold under agreements to repurchase

569,824

558,752

396,151

FHLB advances

38,611

8,707

440,175

Other borrowed funds

28,820

14,808

14,708

Subordinated debentures

139,914

139,913

134,051

Accrued interest payable

4,686

4,435

4,252

Other liabilities

164,954

170,151

116,526

Total liabilities

11,723,266

11,765,391

10,599,630

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

923

922

845

Paid-in capital

1,378,534

1,375,785

1,051,253

Retained earnings - substantially restricted

541,050

528,599

473,183

Accumulated other comprehensive income (loss)

40,226

48,095

(9,427

)

Total stockholders’ equity

1,960,733

1,953,401

1,515,854

Total liabilities and stockholders’ equity

$

13,683,999

13,718,792

12,115,484

Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

Three Months ended

Year ended

(Dollars in thousands, except per share data)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Dec 31,
2019

Dec 31,
2018

Interest Income

Debt securities

$

20,904

21,357

22,016

85,504

86,499

Residential real estate loans

12,554

12,156

10,751

46,899

40,041

Commercial loans

100,301

97,224

82,238

369,107

304,164

Consumer and other loans

11,522

11,658

10,305

44,667

38,292

Total interest income

145,281

142,395

125,310

546,177

468,996

Interest Expense

Deposits

6,101

6,214

4,989

23,280

18,359

Securities sold under agreements to repurchase

1,007

999

707

3,694

2,248

Federal Home Loan Bank advances

86

2,035

2,146

9,023

8,880

Other borrowed funds

92

47

(10

)

215

95

Subordinated debentures

1,547

1,652

1,604

6,561

5,949

Total interest expense

8,833

10,947

9,436

42,773

35,531

Net Interest Income

136,448

131,448

115,874

503,404

433,465

Provision for loan losses

1,246

57

9,953

Net interest income after provision for loan losses

136,448

131,448

114,628

503,347

423,512

Non-Interest Income

Service charges and other fees

14,756

15,138

19,708

67,934

74,887

Miscellaneous loan fees and charges

1,379

1,775

1,278

5,313

6,805

Gain on sale of loans

10,135

10,369

5,639

34,064

27,134

Gain (loss) on sale of debt securities

257

13,811

(357

)

14,415

(1,113

)

Other income

1,890

1,956

2,226

9,048

11,111

Total non-interest income

28,417

43,049

28,494

130,774

118,824

Non-Interest Expense

Compensation and employee benefits

55,543

62,509

50,385

222,753

195,056

Occupancy and equipment

9,149

8,731

7,884

34,497

30,734

Advertising and promotions

2,747

2,719

2,434

10,621

9,566

Data processing

4,972

4,466

3,951

17,392

15,911

Other real estate owned

609

166

264

1,105

3,221

Regulatory assessments and insurance

45

593

1,263

3,771

5,075

Loss on termination of hedging activities

13,528

13,528

Core deposit intangibles amortization

2,566

2,360

1,731

8,485

6,270

Other expenses

19,621

15,603

13,964

62,775

54,294

Total non-interest expense

95,252

110,675

81,876

374,927

320,127

Income Before Income Taxes

69,613

63,822

61,246

259,194

222,209

Federal and state income tax expense

12,203

12,212

11,647

48,650

40,331

Net Income

$

57,410

51,610

49,599

210,544

181,878

Glacier Bancorp, Inc.
Average Balance Sheets

Three Months ended

December 31, 2019

September 30, 2019

(Dollars in thousands)

Average
Balance

Interest &
Dividends

Average
Yield/
Rate

Average
Balance

Interest &
Dividends

Average
Yield/
Rate

Assets

Residential real estate loans

$

1,010,174

$

12,554

4.97

%

$

994,906

$

12,156

4.89

%

Commercial loans 1

7,617,702

101,619

5.29

%

7,378,337

98,465

5.29

%

Consumer and other loans

911,942

11,522

5.01

%

906,148

11,658

5.10

%

Total loans 2

9,539,818

125,695

5.23

%

9,279,391

122,279

5.23

%

Tax-exempt debt securities 3

853,524

8,983

4.21

%

899,914

9,280

4.13

%

Taxable debt securities 4

2,064,755

14,033

2.72

%

1,917,045

14,250

2.97

%

Total earning assets

12,458,097

148,711

4.74

%

12,096,350

145,809

4.78

%

Goodwill and intangibles

521,405

429,191

Non-earning assets

667,505

672,550

Total assets

$

13,647,007

$

13,198,091

Liabilities

Non-interest bearing deposits

$

3,741,622

$

%

$

3,513,908

$

%

NOW and DDA accounts

2,596,029

1,159

0.18

%

2,473,375

1,091

0.17

%

Savings accounts

1,486,387

265

0.07

%

1,445,323

270

0.07

%

Money market deposit accounts

1,947,102

1,710

0.35

%

1,845,184

1,540

0.33

%

Certificate accounts

958,133

2,609

1.08

%

929,441

2,412

1.03

%

Total core deposits

10,729,273

5,743

0.21

%

10,207,231

5,313

0.21

%

Wholesale deposits 5

72,539

358

1.96

%

146,339

901

2.44

%

FHLB advances

15,601

86

2.18

%

222,449

2,035

3.58

%

Repurchase agreements and other borrowed funds

703,391

2,646

1.49

%

645,426

2,698

1.66

%

Total funding liabilities

11,520,804

8,833

0.30

%

11,221,445

10,947

0.39

%

Other liabilities

164,285

101,806

Total liabilities

11,685,089

11,323,251

Stockholders’ Equity

Common stock

922

903

Paid-in capital

1,377,013

1,292,182

Retained earnings

538,620

531,181

Accumulated other comprehensive income

45,363

50,574

Total stockholders’ equity

1,961,918

1,874,840

Total liabilities and stockholders’ equity

$

13,647,007

$

13,198,091

Net interest income (tax-equivalent)

$

139,878

$

134,862

Net interest spread (tax-equivalent)

4.44

%

4.39

%

Net interest margin (tax-equivalent)

4.45

%

4.42

%

______________________________

1 Includes tax effect of $1.3 million and $1.2 million on tax-exempt municipal loan and lease income for the three months ended December 31, 2019 and September 30, 2019, 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 $1.8 million and $1.9 million on tax-exempt debt securities income for the three months ended December 31, 2019 and September 30, 2019, respectively.
4 Includes tax effect of $276 thousand and $275 thousand on federal income tax credits for the three months ended December 31, 2019 and September 30, 2019, respectively.
5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.

Glacier Bancorp, Inc.
Average Balance Sheets (continued)

Three Months ended

December 31, 2019

December 31, 2018

(Dollars in thousands)

Average
Balance

Interest &
Dividends

Average
Yield/
Rate

Average
Balance

Interest &
Dividends

Average
Yield/
Rate

Assets

Residential real estate loans

$

1,010,174

$

12,554

4.97

%

$

919,468

$

10,751

4.68

%

Commercial loans 1

7,617,702

101,619

5.29

%

6,452,215

83,319

5.12

%

Consumer and other loans

911,942

11,522

5.01

%

820,439

10,305

4.98

%

Total loans 2

9,539,818

125,695

5.23

%

8,192,122

104,375

5.05

%

Tax-exempt debt securities 3

853,524

8,983

4.21

%

1,082,702

12,421

4.59

%

Taxable debt securities 4

2,064,755

14,033

2.72

%

1,783,881

12,444

2.79

%

Total earning assets

12,458,097

148,711

4.74

%

11,058,705

129,240

4.64

%

Goodwill and intangibles

521,405

339,617

Non-earning assets

667,505

471,696

Total assets

$

13,647,007

$

11,870,018

Liabilities

Non-interest bearing deposits

$

3,741,622

$

%

$

3,050,140

$

%

NOW and DDA accounts

2,596,029

1,159

0.18

%

2,334,785

1,038

0.18

%

Savings accounts

1,486,387

265

0.07

%

1,348,907

220

0.06

%

Money market deposit accounts

1,947,102

1,710

0.35

%

1,716,296

920

0.21

%

Certificate accounts

958,133

2,609

1.08

%

916,786

1,858

0.80

%

Total core deposits

10,729,273

5,743

0.21

%

9,366,914

4,036

0.17

%

Wholesale deposits 5

72,539

358

1.96

%

155,203

953

2.44

%

FHLB advances

15,601

86

2.18

%

200,654

2,146

4.18

%

Repurchase agreements and other borrowed funds

703,391

2,646

1.49

%

539,548

2,301

1.69

%

Total funding liabilities

11,520,804

8,833

0.30

%

10,262,319

9,436

0.36

%

Other liabilities

164,285

103,441

Total liabilities

11,685,089

10,365,760

Stockholders’ Equity

Common stock

922

845

Paid-in capital

1,377,013

1,050,872

Retained earnings

538,620

479,347

Accumulated other comprehensive income (loss)

45,363

(26,806

)

Total stockholders’ equity

1,961,918

1,504,258

Total liabilities and stockholders’ equity

$

13,647,007

$

11,870,018

Net interest income (tax-equivalent)

$

139,878

$

119,804

Net interest spread (tax-equivalent)

4.44

%

4.28

%

Net interest margin (tax-equivalent)

4.45

%

4.30

%

______________________________

1 Includes tax effect of $1.3 million and $1.1 million on tax-exempt municipal loan and lease income for the three months ended December 31, 2019 and 2018, 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 $1.8 million and $2.5 million on tax-exempt debt securities income for the three months ended December 31, 2019 and 2018, respectively.
4 Includes tax effect of $276 thousand and $304 thousand on federal income tax credits for the three months ended December 31, 2019 and 2018, respectively.
5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.

Glacier Bancorp, Inc.
Average Balance Sheets (continued)

Year ended

December 31, 2019

December 31, 2018

(Dollars in thousands)

Average
Balance

Interest &
Dividends

Average
Yield/
Rate

Average
Balance

Interest &
Dividends

Average
Yield/
Rate

Assets

Residential real estate loans

$

965,553

$

46,899

4.86

%

$

868,467

$

40,041

4.61

%

Commercial loans 1

7,084,753

373,888

5.28

%

6,134,018

308,263

5.03

%

Consumer and other loans

881,726

44,667

5.07

%

774,813

38,292

4.94

%

Total loans 2

8,932,032

465,454

5.21

%

7,777,298

386,596

4.97

%

Tax-exempt debt securities 3

917,454

38,195

4.16

%

1,083,999

50,239

4.63

%

Taxable debt securities 4

1,935,215

56,258

2.91

%

1,802,704

47,771

2.65

%

Total earning assets

11,784,701

559,907

4.75

%

10,664,001

484,606

4.54

%

Goodwill and intangibles

410,561

311,321

Non-earning assets

611,788

453,394

Total assets

$

12,807,050

$

11,428,716

Liabilities

Non-interest bearing deposits

$

3,323,641

$

%

$

2,829,916

$

%

NOW and DDA accounts

2,447,037

4,196

0.17

%

2,242,935

3,862

0.17

%

Savings accounts

1,420,682

1,022

0.07

%

1,298,985

862

0.07

%

Money market deposit accounts

1,787,149

5,385

0.30

%

1,704,269

3,377

0.20

%

Certificate accounts

923,840

9,257

1.00

%

919,356

6,497

0.71

%

Total core deposits

9,902,349

19,860

0.20

%

8,995,461

14,598

0.16

%

Wholesale deposits 5

137,442

3,420

2.49

%

156,022

3,761

2.41

%

FHLB advances

265,712

9,023

3.35

%

231,158

8,880

3.79

%

Repurchase agreements and other borrowed funds

625,242

10,470

1.67

%

526,623

8,292

1.57

%

Total funding liabilities

10,930,745

42,773

0.39

%

9,909,264

35,531

0.36

%

Other liabilities

123,002

71,901

Total liabilities

11,053,747

9,981,165

Stockholders’ Equity

Common stock

883

836

Paid-in capital

1,208,772

1,014,559

Retained earnings

510,601

452,996

Accumulated other comprehensive income (loss)

33,047

(20,840

)

Total stockholders’ equity

1,753,303

1,447,551

Total liabilities and stockholders’ equity

$

12,807,050

$

11,428,716

Net interest income (tax-equivalent)

$

517,134

$

449,075

Net interest spread (tax-equivalent)

4.36

%

4.18

%

Net interest margin (tax-equivalent)

4.39

%

4.21

%

______________________________

1 Includes tax effect of $4.8 million and $4.1 million on tax-exempt municipal loan and lease income for the year ended December 31, 2019 and 2018, 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 $7.8 million and $10.3 million on tax-exempt investment securities income for the year ended December 31, 2019 and 2018, respectively.
4 Includes tax effect of $1.1 million and $1.2 million on federal income tax credits for the year ended December 31, 2019 and 2018, 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)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Sep 30,
2019

Dec 31,
2018

Custom and owner occupied construction

$

143,479

$

147,626

$

126,595

(3

)%

13

%

Pre-sold and spec construction

180,539

207,596

121,938

(13

)%

48

%

Total residential construction

324,018

355,222

248,533

(9

)%

30

%

Land development

101,592

103,090

137,814

(1

)%

(26

)%

Consumer land or lots

125,759

128,668

127,775

(2

)%

(2

)%

Unimproved land

62,563

71,467

83,579

(12

)%

(25

)%

Developed lots for operative builders

17,390

13,782

17,061

26

%

2

%

Commercial lots

46,408

64,904

34,096

(28

)%

36

%

Other construction

478,368

443,947

520,005

8

%

(8

)%

Total land, lot, and other construction

832,080

825,858

920,330

1

%

(10

)%

Owner occupied

1,667,526

1,666,211

1,343,563

%

24

%

Non-owner occupied

2,017,375

2,023,262

1,605,960

%

26

%

Total commercial real estate

3,684,901

3,689,473

2,949,523

%

25

%

Commercial and industrial

991,580

1,009,310

907,340

(2

)%

9

%

Agriculture

701,363

718,255

646,822

(2

)%

8

%

1st lien

1,186,889

1,208,096

1,108,227

(2

)%

7

%

Junior lien

53,571

53,931

56,689

(1

)%

(6

)%

Total 1-4 family

1,240,460

1,262,027

1,164,916

(2

)%

6

%

Multifamily residential

342,498

350,622

247,457

(2

)%

38

%

Home equity lines of credit

617,900

612,775

539,938

1

%

14

%

Other consumer

174,643

171,633

165,865

2

%

5

%

Total consumer

792,543

784,408

705,803

1

%

12

%

States and political subdivisions

533,023

471,599

404,671

13

%

32

%

Other

139,538

174,755

125,310

(20

)%

11

%

Total loans receivable, including loans held for sale

9,582,004

9,641,529

8,320,705

(1

)%

15

%

Less loans held for sale 1

(69,194

)

(100,441

)

(33,156

)

(31

)%

109

%

Total loans receivable

$

9,512,810

$

9,541,088

$

8,287,549

%

15

%

______________________________

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)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Dec 31,
2019

Dec 31,
2019

Dec 31,
2019

Custom and owner occupied construction

$

185

283

185

Pre-sold and spec construction

743

1,219

463

743

Total residential construction

928

1,502

463

928

Land development

852

1,006

2,166

474

378

Consumer land or lots

330

828

1,428

330

Unimproved land

1,181

8,781

9,338

105

1,076

Developed lots for operative builders

68

Commercial lots

529

575

1,046

529

Other construction

120

Total land, lot and other construction

2,892

11,190

14,166

909

1,983

Owner occupied

4,608

8,251

5,940

3,320

41

1,247

Non-owner occupied

8,229

9,271

10,567

8,229

Total commercial real estate

12,837

17,522

16,507

11,549

41

1,247

Commercial and industrial

5,297

6,135

3,914

4,945

142

210

Agriculture

2,288

3,469

7,040

2,137

1

150

1st lien

8,671

9,420

10,290

6,414

753

1,504

Junior lien

569

669

565

546

23

Total 1-4 family

9,240

10,089

10,855

6,960

776

1,504

Multifamily residential

201

206

201

Home equity lines of credit

2,618

3,553

2,770

2,618

Other consumer

837

1,098

456

344

445

48

Total consumer

3,455

4,651

3,226

2,962

445

48

Other

299

313

579

292

7

Total

$

37,437

55,077

56,750

30,883

1,412

5,142


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

Accruing 30-89 Days Delinquent Loans, by Loan Type

% Change from

(Dollars in thousands)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Sep 30,
2019

Dec 31,
2018

Custom and owner occupied construction

$

637

$

49

$

1,661

1,200

%

(62

)%

Pre-sold and spec construction

148

8

887

1,750

%

(83

)%

Total residential construction

785

57

2,548

1,277

%

(69

)%

Land development

1,282

228

(100

)%

(100

)%

Consumer land or lots

672

836

200

(20

)%

236

%

Unimproved land

558

8

579

6,875

%

(4

)%

Developed lots for operative builders

2

122

n/m

(98

)%

Commercial lots

203

n/m

(100

)%

Other construction

142

4,170

(100

)%

(100

)%

Total land, lot and other construction

1,232

2,268

5,502

(46

)%

(78

)%

Owner occupied

3,052

2,949

2,981

3

%

2

%

Non-owner occupied

1,834

1,286

1,245

43

%

47

%

Total commercial real estate

4,886

4,235

4,226

15

%

16

%

Commercial and industrial

2,036

12,780

3,374

(84

)%

(40

)%

Agriculture

4,298

1,290

6,455

233

%

(33

)%

1st lien

4,711

2,521

5,384

87

%

(13

)%

Junior lien

624

715

118

(13

)%

429

%

Total 1-4 family

5,335

3,236

5,502

65

%

(3

)%

Multifamily Residential

149

(100

)%

n/m

Home equity lines of credit

2,352

4,162

3,562

(43

)%

(34

)%

Other consumer

1,187

1,388

1,650

(14

)%

(28

)%

Total consumer

3,539

5,550

5,212

(36

)%

(32

)%

States and political subdivisions

229

n/m

(100

)%

Other

1,081

389

519

178

%

108

%

Total

$

23,192

$

29,954

$

33,567

(23

)%

(31

)%

______________________________

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)

Dec 31,
2019

Sep 30,
2019

Dec 31,
2018

Dec 31,
2019

Dec 31,
2019

Custom and owner occupied construction

$

98

98

Pre-sold and spec construction

$

(18

)

(12

)

(352

)

18

Total residential construction

80

(12

)

(352

)

98

18

Land development

(30

)

(25

)

(116

)

42

72

Consumer land or lots

(138

)

(160

)

(146

)

64

202

Unimproved land

(311

)

(271

)

(445

)

311

Developed lots for operative builders

(18

)

(18

)

33

18

Commercial lots

(6

)

(4

)

1

6

Other construction

(142

)

(142

)

(19

)

9

151

Total land, lot and other construction

(645

)

(620

)

(692

)

115

760

Owner occupied

(479

)

(35

)

1,320

362

841

Non-owner occupied

2,015

1,861

853

2,156

141

Total commercial real estate

1,536

1,826

2,173

2,518

982

Commercial and industrial

1,472

1,066

2,449

2,385

913

Agriculture

21

(32

)

16

119

98

1st lien

(12

)

189

577

477

489

Junior lien

(303

)

(254

)

(371

)

61

364

Total 1-4 family

(315

)

(65

)

206

538

853

Multifamily residential

(649

)

Home equity lines of credit

19

(25

)

(97

)

73

54

Other consumer

603

380

261

895

292

Total consumer

622

355

164

968

346

Other

4,035

3,243

4,967

8,437

4,402

Total

$

6,806

5,761

8,282

15,178

8,372

Visit our website at www.glacierbancorp.com

CONTACT: Randall M. Chesler, CEO

(406) 751-4722

Ron J. Copher, CFO

(406) 751-7706