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Glacier (GBCI) Concludes Altabancorp Buyout, Expands in Utah

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Glacier Bancorp, Inc. GBCI has completed the previously announced acquisition of Altabancorp, a bank holding company for Altabank, the largest community bank in Utah. The all-stock transaction is expected to further strengthen Glacier Bancorp’s presence in the booming Utah market.

The buyout enables Glacier Bancorp to leverage Altabank’s extensive footprint throughout Utah and southern Idaho, with 25 branch locations from Preston, ID, to St. George, UT. Altabank offers banking services to individuals and businesses, and will operate as the newest banking division of Glacier Bank as “Altabank, Division of Glacier Bank”.

The acquisition will considerably scale up Glacier Bancorp’s loans and deposits. Considering Altabancorp’s total assets of $3.5 billion, loans of $1.9 billion and deposits of $3.2 billion as of the second quarter end; Glacier Bancorp would have total assets of $24 billion, loans of $13.1 billion and deposits of $19.9 billion as of the same date on a pro-forma combined basis.

Randy Chesler, Glacier Bancorp's president and chief executive officer, remarked, "we are excited to welcome Altabank and their shareholders to the Glacier family and are very pleased with how smoothly the transaction process went and that the acquisition closed ahead of schedule.”

When the deal was announced this May, Glacier Bancorp projected the acquisition to be 5.2% accretive to earnings (excluding the one-time transaction costs) in 2022. Also, it anticipated the buyout to be instantly accretive to the company’s tangible book value per share and lead to significant revenue synergies.

The transaction was estimated to result in one-time transaction charges of $33 million. Glacier Bancorp anticipates 80% of cost savings to be realized in 2022 and 100% thereafter.

The buyout is a strategic fit as it will facilitate Glacier Bancorp to compete in the growing and dynamic markets by partnering with the largest community bank in the state. Such efforts also reflect its solid balance sheet and liquidity position.

Shares of Glacier Bancorp have rallied 61.2% compared with the industry’s 101.1% over the past year.

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Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Competitive Landscape

Recently, Southern Missouri Bancorp Inc. SMBC announced that it will acquire Fortune Financial Corporation in a stock and cash transaction worth $30 million.

In the last month, U.S. Bancorp USB entered a definitive agreement to acquire MUFG Union Bank’s core retail banking operations from Mitsubishi UFJ Financial Group MUFG for a cash-and-stock transaction valued at $8 billion in a bid to boost its presence on the West Coast. The deal’s closure, expected in the first half of 2022, is subject to the satisfaction of customary closing conditions and regulatory approvals. No shareholder approvals are required from both companies.

While banks have resorted to mergers and acquisitions in recent years to dodge the heightened costs of investments in technology and counter lower rates, U.S Senator Elizabeth Warren reintroduced the Bank Merger Review Modernization Act in late September to curb rubberstamping of bank mergers.

The legislation intends to limit the consolidation in the banking industry that could potentially harm consumers and the financial system from “Too Big to Fail” institutions.

Senator Warren remarked, “community banks are being gobbled up by larger competitors or forced to shut down because they can’t compete on a level playing field. This results in more concentration, higher costs for consumers, and increased systemic risk to our financial system. The bill Congressman García and I are reintroducing would ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need and help prevent another financial crisis”.

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Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report

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