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Glacier Bancorp, Inc. Announces Results For The Quarter And Period Ended September 30, 2021

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·40-min read
In this article:
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3rd Quarter 2021 Highlights:

  • The loan portfolio, excluding the Payroll Protection Program (“PPP”) loans, increased $382 million, or 14 percent annualized, in the current quarter.

  • Core deposits increased $742 million, or 18 percent annualized, during the current quarter.

  • Net interest income (tax-equivalent), excluding the PPP loans, of $154 million, increased $4.6 million, or 3 percent, over the prior quarter net interest income of $150 million.

  • Received $327 million in PPP loan forgiveness proceeds from the U.S. Small Business Administration (“SBA”) during the current quarter compared to $350 million in the prior quarter.

  • Declared a quarterly dividend of $0.32 per share. The Company has declared 146 consecutive quarterly dividends and has increased the dividend 48 times.

  • Completed the acquisition of Altabancorp, the parent company of Altabank, with total assets of $3.648 billion on October 1, 2021. Based in American Fork, Utah, Altabank is the largest community bank in Utah and is the Company’s 24th acquisition since 2000.

Year-to-Date 2021 Highlights:

  • The loan portfolio, excluding the PPP loans, increased $711 million, or 9 percent annualized, in the first nine months of 2021.

  • Core deposits increased $2.718 billion, or 25 percent annualized, during the first nine months of 2021.

  • Net income of $234 million for the first nine months of 2021, an increase of $49.5 million, or 27 percent, over the prior year first nine months net income of $185 million.

  • Diluted earnings per share of $2.45, an increase of 26 percent from the prior year first nine months diluted earnings per share of $1.95.

  • Net interest income (tax-equivalent), excluding the PPP loans, of $452 million, an increase of $22.5 million, or 5 percent, over the prior quarter net interest income of $430 million.

  • The Company funded 8,525 PPP loans in the amount of $555 million during the first half of 2021.

  • The Company received $1.103 billion in PPP loan forgiveness proceeds from the U.S. Small Business Administration (“SBA”) during the first nine months of 2021.

  • Dividends declared in the first nine months of 2021 of $0.95 per share, an increase of $0.07 per share, or 8 percent, over the prior year dividends declared of $0.88 per share.

Financial Summary

At or for the Three Months ended

At or for the Nine Months ended

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

Sep 30,
2021

Jun 30,
2021

Mar 31,
2021

Sep 30,
2020

Sep 30,
2021

Sep 30,
2020

Operating results

Net income

$

75,619

77,627

80,802

77,757

234,048

184,540

Basic earnings per share

$

0.79

0.81

0.85

0.81

2.45

1.95

Diluted earnings per share

$

0.79

0.81

0.85

0.81

2.45

1.95

Dividends declared per share

$

0.32

0.32

0.31

0.30

0.95

0.88

Market value per share

Closing

$

55.35

55.08

57.08

32.05

55.35

32.05

High

$

56.84

63.05

67.35

38.13

67.35

46.54

Low

$

48.62

52.99

44.55

30.05

44.55

26.66

Selected ratios and other data

Number of common stock shares outstanding

95,512,659

95,507,234

95,501,819

95,413,743

95,512,659

95,413,743

Average outstanding shares - basic

95,510,772

95,505,877

95,465,801

95,411,656

95,494,211

94,704,198

Average outstanding shares - diluted

95,586,202

95,580,904

95,546,922

95,442,576

95,573,519

94,747,894

Return on average assets (annualized)

1.43

%

1.55

%

1.73

%

1.80

%

1.57

%

1.56

%

Return on average equity (annualized)

12.49

%

13.25

%

14.12

%

13.73

%

13.27

%

11.40

%

Efficiency ratio

50.17

%

49.92

%

46.75

%

48.05

%

48.94

%

49.83

%

Dividend payout ratio

40.51

%

39.51

%

36.47

%

37.04

%

38.78

%

45.13

%

Loan to deposit ratio

65.06

%

67.64

%

70.72

%

82.29

%

65.06

%

82.29

%

Number of full time equivalent employees

2,978

2,987

2,994

2,946

2,978

2,946

Number of locations

194

194

193

193

194

193

Number of ATMs

250

250

250

250

250

250

KALISPELL, Mont., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $75.6 million for the current quarter, a decrease of $2.2 million, or 3 percent, from the $77.8 million of net income for the prior year third quarter. Diluted earnings per share for the current quarter was $0.79 per share, a decrease of 2 percent from the prior year third quarter diluted earnings per share of $0.81. The decrease in third quarter earnings over the prior year was driven by a $21.6 million reduction in the gain on sale of residential mortgage loans due to record gains in the prior year. “The Glacier team produced very strong core loan and net interest income growth in the quarter,” said Randy Chesler, President and Chief Executive Officer. “We are excited to welcome the outstanding team at Altabank to the Glacier family and are well positioned to capitalize on our strengthening markets across the West.”

Net income for the nine months ended September 30, 2021 was $234 million, an increase of $49.5 million, or 27 percent, from the $185 million net income from the first nine months in the prior year. Diluted earnings per share for the first nine months of the current year was $2.45 per share, an increase of 26 percent, from the diluted earnings per share of $1.95 for the same period last year.

On October 1, 2021, the Company announced the completion of the acquisition of Altabancorp, the parent company of Altabank, based in American Fork, Utah (collectively, “Alta”) and the largest community bank in Utah. Alta provides banking services to individuals and businesses in Utah with twenty-five banking offices from Preston, Idaho to St. George, Utah. As of September 30, 2021, Alta had total assets of $3.648 billion, total loans of $1.901 billion and total deposits of $3.279 billion. Upon closing of the transaction, Alta became the Company’s seventeenth Bank division.

Asset Summary

$ Change from

(Dollars in thousands)

Sep 30,
2021

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Cash and cash equivalents

$

348,888

921,207

633,142

769,879

(572,319

)

(284,254

)

(420,991

)

Debt securities, available-for-sale

7,390,580

6,147,143

5,337,814

4,125,548

1,243,437

2,052,766

3,265,032

Debt securities, held-to-maturity

1,128,299

1,024,730

189,836

193,509

103,569

938,463

934,790

Total debt securities

8,518,879

7,171,873

5,527,650

4,319,057

1,347,006

2,991,229

4,199,822

Loans receivable

Residential real estate

781,538

734,838

802,508

862,614

46,700

(20,970

)

(81,076

)

Commercial real estate

6,912,569

6,584,322

6,315,895

6,201,817

328,247

596,674

710,752

Other commercial

2,598,616

2,932,419

3,054,817

3,593,322

(333,803

)

(456,201

)

(994,706

)

Home equity

660,920

648,800

636,405

646,850

12,120

24,515

14,070

Other consumer

340,248

337,669

313,071

314,128

2,579

27,177

26,120

Loans receivable

11,293,891

11,238,048

11,122,696

11,618,731

55,843

171,195

(324,840

)

Allowance for credit losses

(153,609

)

(151,448

)

(158,243

)

(164,552

)

(2,161

)

4,634

10,943

Loans receivable, net

11,140,282

11,086,600

10,964,453

11,454,179

53,682

175,829

(313,897

)

Other assets

1,305,970

1,308,353

1,378,961

1,382,952

(2,383

)

(72,991

)

(76,982

)

Total assets

$

21,314,019

20,488,033

18,504,206

17,926,067

825,986

2,809,813

3,387,952

Total debt securities of $8.519 billion at September 30, 2021 increased $1.347 billion, or 19 percent, during the current quarter and increased $4.200 billion, or 97 percent, from the prior year third quarter. The Company continues to selectively purchase debt securities with excess liquidity from the increase in core deposits and SBA forgiveness of PPP loans. Debt securities represented 40 percent of total assets at September 30, 2021 compared to 30 percent of total assets at December 30, 2020 and 24 percent of total assets at September 30, 2020.

The loan portfolio of $11.294 billion at September 30, 2021 increased $55.8 million, or 50 basis points, in the current quarter. Excluding the PPP loans, the loan portfolio increased $382 million, or 14 percent annualized, during the current quarter with the largest increase in commercial real estate which increased $328 million.

The loan portfolio decreased $325 million, or 3 percent, from the prior year third quarter. Excluding the PPP loans, the loan portfolio increased $755 million, or 7 percent, from the prior year third quarter with the largest increase in commercial real estate loans which increased $711 million, or 11 percent.

Credit Quality Summary

At or for the
Nine Months ended

At or for the
Six Months ended

At or for the
Year ended

At or for the
Nine Months ended

(Dollars in thousands)

Sep 30,
2021

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Allowance for credit losses

Balance at beginning of period

$

158,243

158,243

124,490

124,490

Impact of adopting CECL

3,720

3,720

Acquisitions

49

49

Provision for credit losses

(2,921

)

(5,234

)

37,637

39,165

Charge-offs

(8,566

)

(5,946

)

(13,808

)

(7,865

)

Recoveries

6,853

4,385

6,155

4,993

Balance at end of period

$

153,609

151,448

158,243

164,552

Provision for credit losses

Loan portfolio

$

(2,921

)

(5,234

)

37,637

39,165

Unfunded loan commitments

(1,959

)

(371

)

2,128

2,135

Total provision for credit losses

$

(4,880

)

(5,605

)

39,765

41,300

Other real estate owned

$

88

705

1,182

4,742

Other foreclosed assets

18

66

562

619

Accruing loans 90 days or more past due

5,172

4,220

1,725

2,952

Non-accrual loans

45,901

48,050

31,964

36,350

Total non-performing assets

$

51,179

53,041

35,433

44,663

Non-performing assets as a percentage of subsidiary assets

0.24

%

0.26

%

0.19

%

0.25

%

Allowance for credit losses as a percentage of non-performing loans

301

%

290

%

470

%

419

%

Allowance for credit losses as a percentage of total loans

1.36

%

1.35

%

1.42

%

1.42

%

Net charge-offs as a percentage of total loans

0.02

%

0.01

%

0.07

%

0.03

%

Accruing loans 30-89 days past due

$

26,002

12,076

22,721

17,631

Accruing troubled debt restructurings

$

36,666

37,667

42,003

39,999

Non-accrual troubled debt restructurings

$

2,820

3,179

3,507

7,579

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

$

4,116

4,186

3,011

4,411

Non-performing assets of $51.2 million at September 30, 2021 decreased $1.9 million, or 4 percent, over the prior quarter. Non-performing assets increased $6.5 million, or 15 percent, over the prior year third quarter. Non-performing assets as a percentage of subsidiary assets at September 30, 2021 was 0.24 percent compared to 0.26 percent in the prior quarter and 0.25 percent in the prior year third quarter.
Early stage delinquencies (accruing loans 30-89 days past due) of $26.0 million at September 30, 2021 increased $13.9 million from the prior quarter with a large portion of the increase primarily isolated to one credit relationship. Early stage delinquencies increased $8.4 million from the prior year third quarter. Early stage delinquencies as a percentage of loans at September 30, 2021 was 0.23 percent, which was an increase of 12 basis points from prior quarter and an 8 basis points increase from prior year third quarter.

The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at September 30, 2021 was 1.36 percent which was a 1 basis point increase compared to the prior quarter and a 6 basis point decrease from the prior year third quarter. Excluding the PPP loans, the ACL as percentage of loans was 1.40 percent compared to 1.43 percent in the prior quarter and 1.62 percent in the prior year third quarter. The decrease in the ACL as a percentage of total loans during the current year was driven by the improvement in the economic forecasts.

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

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

%

Second quarter 2020

13,552

1,233

1.42

%

0.22

%

0.27

%

First quarter 2020

22,744

813

1.49

%

0.41

%

0.26

%

Fourth quarter 2019

1,045

1.31

%

0.24

%

0.27

%

The current quarter provision for credit loss expense for loans was $2.3 million which was an increase of $8.0 million from the prior quarter provision for credit loss benefit of $5.7 million and a $556 thousand decrease from the prior year third quarter provision for credit loss expense of $2.9 million. The increase in provision for credit losses for loans in the current quarter compared to the prior quarter was primarily driven by organic loan growth in the current quarter.

Net charge-offs for the current quarter were $152 thousand compared to net recoveries of $725 thousand for the prior quarter and net charge-offs $826 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.

PPP Loans

Three Months ended

Nine Months ended

(Dollars in thousands)

Sep 30, 2021

Jun 30, 2021

Mar 31, 2021

Sep 30, 2021

Sep 30, 2020

PPP interest income

$

12,894

10,328

13,523

36,745

16,646

Deferred compensation on originating PPP loans

1,522

5,213

6,735

8,850

Total PPP income impact

$

12,894

11,850

18,736

43,480

25,496


(Dollars in thousands)

Sep 30, 2021

Jun 30, 2021

Dec 31, 2020

Sep 30, 2020

PPP Round 1 loans

$

56,048

176,498

909,173

1,448,417

PPP Round 2 loans

312,865

518,107

Total PPP loans

368,913

694,605

909,173

1,448,417

Net remaining fees - Round 1

485

1,313

17,605

36,099

Net remaining fees - Round 2

12,501

22,694

Total net remaining fees

$

12,986

24,007

17,605

36,099

The SBA Round 2 PPP program ended in early May of 2021 after the available funds were fully drawn upon. During the first half of 2021, the Company originated $555 million of Round 2 PPP loans which generated $33.2 million of SBA deferred processing fees and $6.7 million of deferred compensation costs for total net deferred fees of $26.5 million.

During the current year, the SBA processing fees received on Round 2 averaged 5.99 percent which compared to the average of 3.75 percent received on Round 1 in the prior year. The increase in the fee percentage received on Round 2 was the result of an increase in the number of smaller loans which receive a higher percentage fee.

The Company received $327 million in PPP loan forgiveness during the current quarter and received $1.103 billion in the first nine months of 2021. As of September 30, 2021, the Company had $56 million, or 4 percent of the $1.472 billion of Round 1 PPP loans originated in the prior year and had $313 million, or 56 percent of the $555 million of Round 2 PPP loans originated in the current year.

The Company recognized $12.9 million of interest income (including deferred fees and costs) from the Round 1 and Round 2 PPP loans in the current quarter. The income recognized in the current quarter included $10.5 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 September 30, 2021 were $13.0 million, 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.

Supplemental information regarding credit quality and identification of the Company’s loan portfolio based on regulatory classification is provided in the exhibits at the end of this press release. The regulatory classification of loans is based primarily on collateral type while the Company’s loan segments presented herein are based on the purpose of the loan.

Liability Summary

$ Change from

(Dollars in thousands)

Sep 30,
2021

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Deposits

Non-interest bearing deposits

$

6,632,402

6,307,794

5,454,539

5,479,311

324,608

1,177,863

1,153,091

NOW and DDA accounts

4,299,244

4,151,264

3,698,559

3,300,152

147,980

600,685

999,092

Savings accounts

2,502,268

2,346,129

2,000,174

1,864,143

156,139

502,094

638,125

Money market deposit accounts

3,123,425

2,990,021

2,627,336

2,557,294

133,404

496,089

566,131

Certificate accounts

919,852

939,563

978,779

979,857

(19,711

)

(58,927

)

(60,005

)

Core deposits, total

17,477,191

16,734,771

14,759,387

14,180,757

742,420

2,717,804

3,296,434

Wholesale deposits

26,123

26,121

38,142

119,131

2

(12,019

)

(93,008

)

Deposits, total

17,503,314

16,760,892

14,797,529

14,299,888

742,422

2,705,785

3,203,426

Repurchase agreements

1,040,939

995,201

1,004,583

965,668

45,738

36,356

75,271

Federal Home Loan Bank advances

7,318

(7,318

)

Other borrowed funds

33,671

33,556

33,068

32,967

115

603

704

Subordinated debentures

132,580

132,540

139,959

139,918

40

(7,379

)

(7,338

)

Other liabilities

215,899

211,889

222,026

225,219

4,010

(6,127

)

(9,320

)

Total liabilities

$

18,926,403

18,134,078

16,197,165

15,670,978

792,325

2,729,238

3,255,425

Core deposits of $17.477 billion as of September 30, 2021 increased $742 million, or 18 percent annualized, from the prior quarter and increased $3.296 billion, or 23 percent, from the prior year third quarter. Non-interest bearing deposits of $6.632 billion as of September 30, 2021 increased $325 million, or 5 percent, from the prior quarter and increased $1.153 billion, or 21 percent, from the prior year third quarter. The unprecedented increase in deposits over the prior eighteen months resulted from a number of factors including the PPP loan proceeds deposited by customers, federal stimulus deposits and the increase in customer savings. Non-interest bearing deposits were 38 percent of total core deposits at September 30, 2021 compared to 37 percent of total core deposits at December 31, 2020 and 39 percent at September 30, 2020.

The low levels of borrowings, including wholesale deposits and Federal Home Loan Bank (“FHLB”) advances, reflected the significant increase in core deposits which funded the asset growth.

Stockholders’ Equity Summary

$ Change from

(Dollars in thousands, except per share data)

Sep 30,
2021

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Common equity

$

2,309,957

2,263,513

2,163,951

2,123,991

46,444

146,006

185,966

Accumulated other comprehensive income

77,659

90,442

143,090

131,098

(12,783

)

(65,431

)

(53,439

)

Total stockholders’ equity

2,387,616

2,353,955

2,307,041

2,255,089

33,661

80,575

132,527

Goodwill and core deposit intangible, net

(562,058

)

(564,546

)

(569,522

)

(572,134

)

2,488

7,464

10,076

Tangible stockholders’ equity

$

1,825,558

1,789,409

1,737,519

1,682,955

36,149

88,039

142,603

Stockholders’ equity to total assets

11.20

%

11.49

%

12.47

%

12.58

%

Tangible stockholders’ equity to total tangible assets

8.80

%

8.98

%

9.69

%

9.70

%

Book value per common share

$

25.00

24.65

24.18

23.63

0.35

0.82

1.37

Tangible book value per common share

$

19.11

18.74

18.21

17.64

0.37

0.90

1.47

Tangible stockholders’ equity of $1.826 billion at September 30, 2021 increased $36.1 million, or 2 percent, from the prior quarter and increased $143 million, or 8 percent, from the prior year third quarter and was due to earnings retention that more than offset the decrease in other comprehensive income. The current year decrease in both the stockholders’ equity to total assets ratio and the tangible stockholders’ equity to tangible assets was the result of the $2.991 billion increase in debt securities driven primarily by the significant influx of deposits during the current year. Tangible book value per common share of $19.11 at the current quarter end increased $0.37 per share, or 2 percent, from the prior quarter and increased $1.47 per share, or 8 percent, from a year ago.

Cash Dividends
On September 30, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.32 per share. The dividend was payable October 21, 2021 to shareholders of record on October 12, 2021. The dividend was the 146th 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 September 30, 2021
Compared to June 30, 2021, March 31, 2021, and September 30, 2020

Income Summary

Three Months ended

$ Change from

(Dollars in thousands)

Sep 30,
2021

Jun 30,
2021

Mar 31,
2021

Sep 30,
2020

Jun 30,
2021

Mar 31,
2021

Sep 30,
2020

Net interest income

Interest income

$

166,741

159,956

161,552

157,487

6,785

5,189

9,254

Interest expense

4,128

4,487

4,740

6,084

(359

)

(612

)

(1,956

)

Total net interest income

162,613

155,469

156,812

151,403

7,144

5,801

11,210

Non-interest income

Service charges and other fees

15,154

13,795

12,792

13,404

1,359

2,362

1,750

Miscellaneous loan fees and charges

2,592

2,923

2,778

2,084

(331

)

(186

)

508

Gain on sale of loans

13,902

16,106

21,624

35,516

(2,204

)

(7,722

)

(21,614

)

(Loss) gain on sale of investments

(168

)

(61

)

284

24

(107

)

(452

)

(192

)

Other income

3,335

2,759

2,643

2,639

576

692

696

Total non-interest income

34,815

35,522

40,121

53,667

(707

)

(5,306

)

(18,852

)

Total income

197,428

190,991

196,933

205,070

6,437

495

(7,642

)

Net interest margin (tax-equivalent)

3.39

%

3.44

%

3.74

%

3.92

%

Net Interest Income
The current quarter net interest income of $163 million increased $7.1 million, or 5 percent, over the prior quarter and increased $11.2 million, or 7 percent, from the prior year third quarter. The current quarter interest income of $167 million increased $6.8 million, or 4 percent, compared to the prior quarter and increased $9.3 million, or 6 percent, over the prior year third quarter due to an increase in interest income from the PPP loans and debt securities. The interest income (which included deferred fees and deferred costs) from the PPP loans was $12.9 million in the current quarter and $10.3 million in the prior quarter and $9.3 million in the prior year third quarter. Excluding the PPP loans, net interest income was $150 million in the current quarter compared to $145 million in the prior quarter and $142 million in the prior year third quarter.

The current quarter interest expense of $4.1 million decreased $359 thousand, or 8 percent, over the prior quarter and decreased $2.0 million, or 32 percent, over the prior year third quarter primarily as result of a decrease in deposit rates. During the current quarter, the total cost of funding (including non-interest bearing deposits) of 9 basis points declined 1 basis points from the prior quarter and declined 7 basis points from the prior year third quarter with both decreases driven by a decrease in rates in deposits and borrowings.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.39 percent compared to 3.44 percent in the prior quarter and 3.92 in the prior year third quarter. The core net interest margin, excluding 2 basis points of discount accretion, 2 basis point from non-accrual interest and 18 basis points increase from the PPP loans, was 3.17 percent compared to 3.33 in the prior quarter and 4.02 percent in the prior year third quarter. The core net interest margin decreased 16 basis points in the current quarter and decreased 85 basis points from the prior third quarter due to a decrease in earning asset yields. Earning asset yields have decreased due to the combined impact of the significant increase in the debt securities and the lower yields on both core loans and debt securities. Debt securities comprised 42.5 percent of the earning assets during the current quarter compared to 39.4 percent in the prior quarter and 26.5 percent in the prior year third quarter.
Non-interest Income
Non-interest income for the current quarter totaled $34.8 million which was a decrease of $707 thousand, or 2 percent, over the prior quarter and a decrease of $18.9 million, or 35 percent, over the same quarter last year. Service charges and other fees increased $1.4 million from the prior quarter and increased $1.8 million from the prior year third quarter as a result of increased customer accounts and transaction activity.

Gain on the sale of loans of $13.9 million for the current quarter decreased $2.2 million, or 14 percent, compared to the prior quarter and decreased $21.6 million, or 61 percent, from the prior year third quarter. The current quarter mortgage activity was lower than prior periods, but still remained at historically strong levels.

Non-interest Expense Summary

Three Months ended

$ Change from

(Dollars in thousands)

Sep 30,
2021

Jun 30,
2021

Mar 31,
2021

Sep 30,
2020

Jun 30,
2021

Mar 31,
2021

Sep 30,
2020

Compensation and employee benefits

$

66,364

64,109

62,468

64,866

2,255

3,896

1,498

Occupancy and equipment

9,412

9,208

9,515

9,369

204

(103

)

43

Advertising and promotions

3,236

2,906

2,371

2,779

330

865

457

Data processing

5,135

5,661

5,206

5,597

(526

)

(71

)

(462

)

Other real estate owned and foreclosed
assets

142

48

12

186

94

130

(44

)

Regulatory assessments and insurance

2,011

1,702

1,879

1,495

309

132

516

Core deposit intangibles amortization

2,488

2,488

2,488

2,612

(124

)

Other expenses

15,320

13,960

12,646

16,469

1,360

2,674

(1,149

)

Total non-interest expense

$

104,108

100,082

96,585

103,373

4,026

7,523

735

Total non-interest expense of $104 million for the current quarter increased $4.0 million, or 4 percent, over the prior quarter and increased $735 thousand, or 71 basis points, over the prior year third quarter. Compensation and employee benefits increased $2.3 million, or 4 percent, from the prior quarter and increased $1.5 million from the prior year third quarter.

Other expenses of $15.3 million, increased $1.4 million, or 10 percent, from the prior quarter and decreased $1.1 million, or 7 percent, from the prior year third quarter. Current quarter other expenses included acquisition-related expenses of $472 thousand compared to $1.1 million in the prior quarter and $793 thousand in the prior year third quarter.

Federal and State Income Tax Expense
Tax expense during the third quarter of 2021 was $17.0 million, a decrease of $2.0 million, or 10 percent, compared to the prior quarter and a decrease of $1.8 million, or 9 percent, from the prior year third quarter. The effective tax rate in the current quarter was 18.3 compared to 19.6 in the prior quarter and 19.4 percent in the prior year third quarter.

Efficiency Ratio
The efficiency ratio was 50.17 percent in the current quarter and 49.92 percent in the prior quarter and 48.05 in the prior year third quarter. “The Bank divisions are making do with less as increased hiring has taken longer as the markets get back to normal,” said Ron Copher, Chief Financial Officer. “Controlling non-interest expense growth has helped the Company maintain an efficiency ratio below 50 percent for the nine months of the current and prior year.” Excluding the impact from the PPP loans, the efficiency ratio would have been 53.59 percent in the current quarter compared to 53.53 percent in the prior quarter. Excluding the impact of PPP loans, the current quarter efficiency ratio was an increase of 308 basis points from the prior year third quarter efficiency ratio of 50.51 percent which was primarily driven by the decrease in the gain on sale of loans in the current quarter.

Operating Results for Nine Months Ended September 30, 2021
Compared to September 30, 2020

Income Summary

Nine Months ended

(Dollars in thousands)

Sep 30,
2021

Sep 30,
2020

$ Change

% Change

Net interest income

Interest income

$

488,249

$

455,756

$

32,493

7

%

Interest expense

13,355

21,765

(8,410

)

(39

)%

Total net interest income

474,894

433,991

40,903

9

%

Non-interest income

Service charges and other fees

41,741

38,790

2,951

8

%

Miscellaneous loan fees and charges

8,293

5,051

3,242

64

%

Gain on sale of loans

51,632

73,236

(21,604

)

(29

)%

Gain on sale of investments

55

1,015

(960

)

(95

)%

Other income

8,737

10,071

(1,334

)

(13

)%

Total non-interest income

110,458

128,163

(17,705

)

(14

)%

Total Income

$

585,352

$

562,154

$

23,198

4

%

Net interest margin (tax-equivalent)

3.52

%

4.12

%

Net Interest Income
Net-interest income of $475 million for the first nine months of 2021 increased $40.9 million, or 9 percent, over the same period in 2020. Interest income of $488 million for the first nine months of the current year increased $32.5 million, or 7 percent, from the prior year and was primarily attributable to a $25.4 million increase in income from commercial loans, including $20.1 million from the PPP loans. Additionally, interest income on debt securities increased $14.2 million, or 20 percent, over the prior year which resulted from the increased volume of debt securities. Interest expense of $13.4 million for the first nine months of 2021 decreased $8.4 million, or 39 percent over the prior year primarily as a result of a decrease in the cost of deposits. The total funding cost (including non-interest bearing deposits) for the first nine months of 2021 was 10 basis points, which decreased 12 basis points compared to 22 basis points in first nine months of 2020.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during the first nine months of 2021 was 3.52 percent, a 60 basis points decrease from the net interest margin of 4.12 percent for the same period in the prior year. The core net interest margin, excluding 3 basis points of discount accretion, 1 basis point of non-accrual interest and 13 basis points increase from the PPP loans, was 3.35 which was an 85 basis point decrease from the core margin of 4.20 percent in the prior year. Although the Company was successful in reducing the total cost of funding, it was not enough to outpace the lower yields on core loans and debt securities driven by the current interest rate environment and the shift in the earning asset mix to lower yielding debt securities.

Non-interest Income
Non-interest income of $110 million for the first nine months of 2021 decreased $17.7 million, or 14 percent, over the same period last year. Service charges and other fees of $41.7 million for the first nine months of 2021 increased $3.0 million, or 8 percent, from prior year as a result of additional fees from increased customer accounts and transaction activity. Miscellaneous loan fees and charges of $8.3 million increased $3.2 million, or 64 percent, driven by increases in loan servicing income and credit card interchange fees due to increased activity. Gain on the sale of loans of $51.6 million for the first nine months of 2021 decreased $21.6 million, or 29 percent, compared to the same period last year which was the result of the anticipated slowing of purchase and refinance activity after the historically high levels in the prior year. Other income of $8.7 million decreased $1.3 million from the prior year and was primarily the result of a gain of $2.4 million on the sale of a former branch building in the first quarter of 2020.

Non-interest Expense Summary

Nine Months ended

(Dollars in thousands)

Sep 30,
2021

Sep 30,
2020

$ Change

% Change

Compensation and employee benefits

$

192,941

$

182,507

$

10,434

6

%

Occupancy and equipment

28,135

27,945

190

1

%

Advertising and promotions

8,513

7,404

1,109

15

%

Data processing

16,002

15,921

81

1

%

Other real estate owned and foreclosed assets

202

373

(171

)

(46

)%

Regulatory assessments and insurance

5,592

3,622

1,970

54

%

Core deposit intangibles amortization

7,464

7,758

(294

)

(4

)%

Other expenses

41,926

48,094

(6,168

)

(13

)%

Total non-interest expense

$

300,775

$

293,624

$

7,151

2

%

Total non-interest expense of $301 million for the first nine months of 2021 increased $7.2 million, or 2 percent, over the prior year same period. Compensation and employee benefits for the first nine months of 2021 increased $10.4 million, or 6 percent, from last year due to the increased number of employees from organic growth, increased performance-related compensation and annual salary increases. Advertising and promotions for the first nine months of 2021 increased $1.1 million, or 15 percent, from the prior year. Regulatory assessment and insurance for the first nine months of 2021 increased $2.0 million from the prior year same period primarily as a result of the State of Montana waiving the first semi-annual regulatory assessment of 2020 and Small Bank assessment credits applied by the FDIC in the first quarter of 2020. Other expenses of $41.9 million, decreased $6.2 million, or 13 percent, from the prior year, primarily from a decrease in acquisition-related expenses. Acquisition-related expenses were $1.7 million in the current year compared to $7.3 million in the prior year.

Provision for Credit Losses

The provision for credit loss benefit was $4.9 million for the first nine months of 2021, including provision for credit loss benefit of $2.9 million on the loan portfolio and credit loss benefit of $2.0 million on unfunded loan commitments. The provision for credit loss benefit of $2.9 million on the loan portfolio in the current year decreased $42.1 million over the provision for credit loss expense of $39.2 million in the prior year which was primarily attributable to changes in the economic forecast related to COVID-19. Net charge-offs during the current year were $1.7 million compared to $2.9 million during the prior year.

Federal and State Income Tax Expense
Tax expense of $55.4 million in the first nine months of 2021 increased $12.7 million, or 30 percent, over the prior year same period. The effective tax rate for the first nine months of 2021 was 19.1 percent compared to 18.8 percent in the prior year same period.

Efficiency Ratio
The efficiency ratio was 48.94 percent for the first nine months of 2021 compared to 49.83 percent for the same period last year. Excluding the impact from the PPP loans, the efficiency ratio was 53.34 in 2021 compared to 53.30 in 2020.

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, such as the those signaled by the Biden Administration, as well as 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, October 22, 2021. The conference call will be accessible by telephone and webcast. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 9278886. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/y8hi69ox. 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 9278886 by October 29, 2021.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. (NASDAQ:GBCI), a member of the Russell 2000® and the S&P MidCap 400® indices, is the parent company for Glacier Bank and its Bank divisions located across its eight state Western U.S. footprint: Altabank (American Fork, UT), 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 (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).

CONTACT: Randall M. Chesler, CEO

(406) 751-4722

Ron J. Copher, CFO

(406) 751-7706



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

(Dollars in thousands, except per share data)

Sep 30,
2021

Jun 30,
2021

Dec 31,
2020

Sep 30,
2020

Assets

Cash on hand and in banks

$

250,579

272,363

227,108

249,245

Federal funds sold

590

Interest bearing cash deposits

98,309

648,844

406,034

520,044

Cash and cash equivalents

348,888

921,207

633,142

769,879

Debt securities, available-for-sale

7,390,580

6,147,143

5,337,814

4,125,548

Debt securities, held-to-maturity

1,128,299

1,024,730

189,836

193,509

Total debt securities

8,518,879

7,171,873

5,527,650

4,319,057

Loans held for sale, at fair value

94,138

98,410

166,572

147,937

Loans receivable

11,293,891

11,238,048

11,122,696

11,618,731

Allowance for credit losses

(153,609

)

(151,448

)

(158,243

)

(164,552

)

Loans receivable, net

11,140,282

11,086,600

10,964,453

11,454,179

Premises and equipment, net

316,191

315,573

325,335

326,925

Other real estate owned and foreclosed assets

106

771

1,744

5,361

Accrued interest receivable

79,699

70,452

75,497

91,393

Core deposit intangible, net

48,045

50,533

55,509

58,121

Goodwill

514,013

514,013

514,013

514,013

Non-marketable equity securities

10,021

10,019

10,023

10,366

Bank-owned life insurance

123,729

123,035

123,763

123,095

Other assets

120,028

125,547

106,505

105,741

Total assets

$

21,314,019

20,488,033

18,504,206

17,926,067

Liabilities

Non-interest bearing deposits

$

6,632,402

6,307,794

5,454,539

5,479,311

Interest bearing deposits

10,870,912

10,453,098

9,342,990

8,820,577

Securities sold under agreements to repurchase

1,040,939

995,201

1,004,583

965,668

FHLB advances

7,318

Other borrowed funds

33,671

33,556

33,068

32,967

Subordinated debentures

132,580

132,540

139,959

139,918

Accrued interest payable

2,437

2,433

3,305

3,951

Deferred tax liability

1,815

6,463

23,860

17,227

Other liabilities

211,647

202,993

194,861

204,041

Total liabilities

18,926,403

18,134,078

16,197,165

15,670,978

Commitments and Contingent Liabilities

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

955

955

954

954

Paid-in capital

1,497,939

1,496,488

1,495,053

1,493,928

Retained earnings - substantially restricted

811,063

766,070

667,944

629,109

Accumulated other comprehensive income

77,659

90,442

143,090

131,098

Total stockholders’ equity

2,387,616

2,353,955

2,307,041

2,255,089

Total liabilities and stockholders’ equity

$

21,314,019

20,488,033

18,504,206

17,926,067


Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

Three Months ended

Nine Months ended

(Dollars in thousands, except per share data)

Sep 30,
2021

Jun 30,
2021

Mar 31,
2021

Sep 30,
2020

Sep 30,
2021

Sep 30,
2020

Interest Income

Debt securities

$

30,352

28,730

27,306

25,381

86,388

72,228

Residential real estate loans

9,885

9,541

10,146

11,592

29,572

35,216

Commercial loans

115,533

110,829

113,541

109,514

339,903

314,541

Consumer and other loans

10,971

10,856

10,559

11,000

32,386

33,771

Total interest income

166,741

159,956

161,552

157,487

488,249

455,756

Interest Expense

Deposits

2,609

2,804

3,014

3,952

8,427

14,120

Securities sold under agreements to
repurchase

496

651

689

886

1,836

2,783

Federal Home Loan Bank advances

70

684

Other borrowed funds

178

177

174

173

529

473

Subordinated debentures

845

855

863

1,003

2,563

3,705

Total interest expense

4,128

4,487

4,740

6,084

13,355

21,765

Net Interest Income

162,613

155,469

156,812

151,403

474,894

433,991

Provision for credit losses

725

(5,653

)

48

5,186

(4,880

)

41,300

Net interest income after provision for credit losses

161,888

161,122

156,764

146,217

479,774

392,691

Non-Interest Income

Service charges and other fees

15,154

13,795

12,792

13,404

41,741

38,790

Miscellaneous loan fees and charges

2,592

2,923

2,778

2,084

8,293

5,051

Gain on sale of loans

13,902

16,106

21,624

35,516

51,632

73,236

(Loss) gain on sale of debt securities

(168

)

(61

)

284

24

55

1,015

Other income

3,335

2,759

2,643

2,639

8,737

10,071

Total non-interest income

34,815

35,522

40,121

53,667

110,458

128,163

Non-Interest Expense

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