Glacier Bancorp, Inc. Announces Results for the Quarter and Period Ended September 30, 2020

October 22, 2020 4:30 PM EDT

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

3rd Quarter 2020 Highlights:

  • Net income of $77.8 million for the current quarter, an increase of $26.2 million, or 51 percent, over the prior year third quarter net income of $51.6 million. 
  • Current quarter diluted earnings per share of $0.81, an increase of 42 percent from the prior year third quarter diluted earnings per share of $0.57.
  • The loan portfolio organically increased $165 million, or 1 percent, in the current quarter and increased $1.626 billion, or 17 percent, from the prior year third quarter.
  • Core deposits increased $868 million, or 7 percent, during the current quarter, with non-interest bearing deposit growth of $436 million, or 9 percent.  Core deposits organically increased $2.8 billion, or 26 percent, compared to the prior year third quarter, with non-interest bearing deposit growth of $1.6 billion, or 41 percent.
  • Gain on sale of loans of $35.5 million, increased $9.7 million, or 37 percent, over the prior quarter and increased $25.1 million, or 243 percent, compared to the prior year third quarter.
  • Interest expense of $6.1 million decreased $1.1 million, or 15 percent, over the prior quarter and decreased $4.9 million, or 44 percent, compared to the prior year third quarter.
  • Bank loan modifications related to the coronavirus disease of 2019 (“COVID-19”) decreased $1.049 billion during the current quarter to $466 million, or 4.58 percent of loans excluding PPP loans. 
  • Non-performing assets as a percentage of subsidiary assets was 0.25 percent, which compared to 0.27 percent in the prior quarter and 0.40 percent in the prior year third quarter.
  • Early stage delinquencies (accruing 30-89 days past due) as a percentage of loans in the current quarter was 0.15 percent, which compared to 0.22 percent in the prior quarter and 0.31 percent in the prior year third quarter.
  • Declared a quarterly dividend of $0.30 per share, an increase of $0.01 per share or 3 percent over the prior quarter dividend.  The Company has declared 142 consecutive quarterly dividends and has increased the dividend 46 times.

Year-to-Date 2020 Highlights:

  • Net income of $185 million for the first nine months of 2020, an increase of $31.4 million, or 21 percent, over the first nine months of 2019 net income of $153 million. 
  • Diluted earnings per share of $1.95, an increase of 11 percent from the prior year first nine months diluted earnings per share of $1.76.
  • The Company originated U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) loans for businesses in its communities.  The Company originated 16,090 PPP loans in the amount of $1.472 billion. 
  • The loan portfolio organically grew $1.654 billion, or 17 percent, during the first nine months of 2020.  Excluding PPP loans, the loan portfolio organically increased $206 million, or 2 percent during the first nine months of 2020.
  • Core deposits organically increased $2.9 billion, or 27 percent, during the first nine months of 2020, with non-interest bearings deposit growth of $1.6 billion, or 44 percent.
  • Gain on sale of loans of $73.2 million, increased $49.3 million, or 206 percent, compared to the prior year first nine months.
  • Dividends declared of $0.88 per share, an increase of $0.06 per share, or 7 percent, over the prior year first nine months dividends of $0.82.
  • On February 29, 2020, the Company completed the acquisition of State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona with total assets of $744 million.
  • During the current year, S&P Dow Jones Indices selected the Company to transition from the S&P SmallCap 600® to the S&P MidCap 400®.

Financial Highlights 

 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, 2020 Jun 30, 2020 Mar 31, 2020 Sep 30, 2019 Sep 30, 2020 Sep 30, 2019
Operating results           
Net income$77,757  63,444  43,339  51,610  184,540  153,134 
Basic earnings per share$0.81  0.67  0.46  0.57  1.95  1.76 
Diluted earnings per share$0.81  0.66  0.46  0.57  1.95  1.76 
Dividends declared per share$0.30  0.29  0.29  0.29  0.88  0.82 
Market value per share           
Closing$32.05  35.29  34.01  40.46  32.05  40.46 
High$38.13  46.54  46.10  42.61  46.54  45.47 
Low$30.05  30.30  26.66  37.70  26.66  37.58 
Selected ratios and other data           
Number of common stock shares outstanding95,413,743 95,409,061 95,408,274 92,180,618 95,413,743 92,180,618
Average outstanding shares - basic95,411,656 95,405,493 93,287,670 90,294,811 94,704,198 86,911,402
Average outstanding shares - diluted95,442,576 95,430,403 93,359,792 90,449,195 94,747,894 87,082,178
Return on average assets (annualized)1.80% 1.57% 1.25% 1.55% 1.56% 1.63%
Return on average equity (annualized)13.73% 11.68% 8.52% 10.92% 11.40% 12.17%
Efficiency ratio49.16% 49.29% 52.55% 65.95% 50.21% 58.82%
Dividend payout ratio37.04% 43.28% 63.04% 50.88% 45.13% 46.59%
Loan to deposit ratio82.29% 86.45% 88.10% 88.71% 82.29% 88.71%
Number of full time equivalent employees2,946 2,954 2,955 2,802 2,946 2,802
Number of locations193 192 192 182 193 182
Number of ATMs250 251 247 238 250 238

KALISPELL, Mont., Oct. 22, 2020 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ: GBCI) reported net income of $77.8 million for the current quarter, an increase of $26.2 million, or 51 percent, from the $51.6 million of net income for the prior year third quarter.  Diluted earnings per share for the current quarter was $0.81 per share, an increase of 42 percent from the prior year third quarter diluted earnings per share of $0.57.  Included in the current quarter was $793 thousand of acquisition-related expenses.  “The Glacier team continues to do an outstanding job managing through a constantly changing and uncertain operating landscape while taking care of employees, customers and communities,” said Randy Chesler, President and Chief Executive Officer.  “We are encouraged by the credit performance we see in our portfolio and believe that, in addition to our conservative credit culture, we are helped by the strong markets in which we operate as well as the increased movement into our markets as technology and business practices allow more people to consider different places to live.”

Net income for the nine months ended September 30, 2020 was $185 million, an increase of $31.4 million, or 21 percent, from the $153 million net income from the first nine months of the prior year.  Diluted earnings per share for the first nine months of the current year was $1.95 per share, an increase of 11 percent, from the diluted earnings per share of $1.76 for the same period last year.

The Company continues to navigate through the coronavirus disease of 2019 (“COVID-19”) pandemic to ensure the safety of its employees and customers along with monitoring credit quality and protecting shareholder value.  The Company’s geographic footprint has experienced varying levels of exposure and impact from COVID-19 and the Company’s pandemic team remains flexible in responding to the changing conditions in all the markets that it serves. 

In order to meet the needs of customers impacted by the pandemic, during the second quarter of 2020 the Company modified 3,054 loans in the amount of $1.515 billion primarily with short-term payment deferrals under six months.  The majority of these modified loan deferral periods expired and the loans returned to regular payment status with only $466 million loans, or 5 percent, remaining deferred as of September 30, 2020.

In addition, the Company originated SBA PPP loans for businesses in its communities.  The Company originated 16,090 PPP loans in the amount of $1.472 billion during the current year.  During the current quarter, these loans provided an additional $9.3 million of interest income (including net deferred fees and costs) and $438 thousand of deferred compensation costs for a total increase in income of $9.8 million ($7.3 million net of tax).

On February 29, 2020, the Company completed the acquisition of 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.  Upon closing of the transaction, SBAZ merged into the Company's Foothills Bank division, which expanded the Company's footprint in Arizona to cover all major markets in the state and be a leading community bank in Arizona. 

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

 State Bank Corp.
(Dollars in thousands)February 29, 2020
Total assets$745,420 
Debt securities142,174 
Loans receivable451,702 
Non-interest bearing deposits141,620 
Interest bearing deposits461,669 
Borrowings10,904 

Asset Summary

         $ Change from
(Dollars in thousands)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Cash and cash equivalents$769,879  547,610  330,961  406,384  222,269  438,918  363,495 
Debt securities, available-for-sale4,125,548  3,533,950  2,575,252  2,459,036  591,598  1,550,296  1,666,512 
Debt securities, held-to-maturity193,509  203,275  224,611  234,992  (9,766) (31,102) (41,483)
Total debt securities4,319,057  3,737,225  2,799,863  2,694,028  581,832  1,519,194  1,625,029 
Loans receivable             
Residential real estate862,614  903,198  926,388  936,877  (40,584) (63,774) (74,263)
Commercial real estate6,201,817  6,047,692  5,579,307  5,548,174  154,125  622,510  653,643 
Other commercial3,593,322  3,547,249  2,094,254  2,145,257  46,073  1,499,068  1,448,065 
Home equity646,850  654,392  617,201  615,781  (7,542) 29,649  31,069 
Other consumer314,128  300,847  295,660  294,999  13,281  18,468  19,129 
Loans receivable11,618,731  11,453,378  9,512,810  9,541,088  165,353  2,105,921  2,077,643 
Allowance for credit losses(164,552) (162,509) (124,490) (125,535) (2,043) (40,062) (39,017)
Loans receivable, net11,454,179  11,290,869  9,388,320  9,415,553  163,310  2,065,859  2,038,626 
Other assets1,382,952  1,330,944  1,164,855  1,202,827  52,008  218,097  180,125 
Total assets$17,926,067  16,906,648  13,683,999  13,718,792  1,019,419  4,242,068  4,207,275 

Total debt securities of $4.319 billion at September 30, 2020 increased $582 million, or 16 percent, during the current quarter and increased $1.625 billion, or 60 percent, from the prior year third quarter.  The Company continues to purchase debt securities with the excess liquidity produced from the increase in core deposits.  Debt securities represented 24 percent of total assets at September 30, 2020 compared to 20 percent at December 31, 2019 and 20 percent of total assets at September 30, 2019. 

The loan portfolio of $11.619 billion increased $165 million, or 1 percent, during the current quarter with the largest increase in commercial real estate which increased $154 million, or 3 percent.  Excluding the PPP loans and the SBAZ acquisition, the loan portfolio increased $178 million, or 2 percent, since the prior year third quarter with the largest increase in commercial real estate loans which increased $318 million, or 6 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, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Allowance for credit losses       
Balance at beginning of period$124,490   124,490   131,239   131,239  
Impact of adopting CECL3,720   3,720        
Acquisitions49   49        
Credit loss expense39,165   36,296   57   57  
Charge-offs(7,865)  (5,235)  (15,178)  (12,090) 
Recoveries4,993   3,189   8,372   6,329  
Balance at end of period$164,552   162,509   124,490   125,535  
Other real estate owned$5,361   4,743   5,142   7,148  
Accruing loans 90 days or more past due2,952   6,071   1,412   7,912  
Non-accrual loans36,350   35,157   30,883   40,017  
Total non-performing assets$44,663   45,971   37,437   55,077  
Non-performing assets as a percentage of subsidiary assets0.25 % 0.27 % 0.27 % 0.40 %
Allowance for credit losses as a percentage of non-performing loans419 % 394 % 385 % 262 %
Allowance for credit losses as a percentage of total loans1.42 % 1.42 % 1.31 % 1.32 %
Net charge-offs as a percentage of total loans0.03 % 0.02 % 0.07 % 0.06 %
Accruing loans 30-89 days past due$17,631   25,225   23,192   29,954  
Accruing troubled debt restructurings$39,999   41,759   34,055   32,949  
Non-accrual troubled debt restructurings$7,579   8,204   3,346   6,723  
U.S. government guarantees included in non-performing assets$4,411   3,305   1,786   3,000  

Non-performing assets of $44.7 million at September 30, 2020 decreased $1.3 million, or 3 percent, over the prior quarter and decreased $10.4 million, or 19 percent, over the prior year third quarter.  Non-performing assets as a percentage of subsidiary assets at September 30, 2020 was 0.25 percent.  Excluding the government guaranteed PPP loans, the non-performing assets as a percentage of subsidiary assets at September 30, 2020 was 0.27 percent, a decrease of 3 basis points from the prior quarter, and a decrease of 13 basis points from the prior year third quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $17.6 million at September 30, 2020 decreased $7.6 million from the prior quarter and decreased $12.3 million from the prior year third quarter.  Early stage delinquencies as a percentage of loans at September 30, 2020 was 0.15 percent, which was a decrease of 7 basis points from prior quarter and a 16 basis points decrease from prior year third quarter.  Excluding PPP loans, early stage delinquencies as a percentage of loans at September 30, 2020 was 0.17 percent, which was a decrease of 8 basis points from prior quarter and a 14 basis points decrease from prior year third quarter.

The current quarter credit loss expense was $2.9 million, a decrease of $10.7 million from the prior quarter credit loss expense of $13.6 million.  The current year-to-date credit loss expense was $39.2 million and primarily attributable to credit loss expense related to COVID-19 and an additional $4.8 million of credit loss expense related to the SBAZ acquisition.  The allowance for credit losses (“ACL”) as a percentage of total loans outstanding at September 30, 2020 was 1.42 percent which remained unchanged compared to the prior quarter.  Excluding the PPP loans, the ACL as percentage of loans was 1.62 percent which also remained unchanged compared to the prior quarter.  

Credit Quality Trends and Credit Loss Expense

(Dollars in thousands)Credit Loss Expense Net Charge-Offs 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 2020$2,869  $826  1.42% 0.15% 0.25%
Second quarter 202013,552  1,233  1.42% 0.22% 0.27%
First quarter 202022,744  813  1.49% 0.41% 0.26%
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 201957  1,510  1.56% 0.44% 0.42%
Fourth quarter 20181,246  2,542  1.58% 0.41% 0.47%

Net charge-offs for the current quarter were $826 thousand compared to $1.2 million for the prior quarter and $3.5 million 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 credit loss expense. 

PPP Loans

 September 30, 2020
(Dollars in thousands)Number of PPP Loans Amount of PPP Loans Total Loans Receivable, Net of PPP Loans PPP Loans (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans
Residential real estate  $  862,614  %
Commercial real estate and other commercial       
Real estate rental and leasing1,221  64,647  3,361,074  1.92%
Accommodation and food services1,502  160,295  644,627  24.87%
Healthcare1,928  288,612  826,809  34.91%
Manufacturing830  80,483  193,216  41.65%
Retail and wholesale trade1,672  168,837  471,115  35.84%
Construction2,297  214,652  774,069  27.73%
Other6,640  470,891  2,075,812  22.68%
Home equity and other consumer    960,978  %
Total16,090  $1,448,417  10,170,314  14.24%

The PPP loan originations generated $55.2 million of SBA processing fees, or an average of 3.75 percent, and $8.9 million of deferred compensation costs for total net deferred fees of $46.3 million.  Net deferred fees remaining on the PPP loans at September 30, 2020 were $36.1 million, which will be recognized into interest income over the life of the loans, generally two years, or when the loans are forgiven in whole or part by the SBA.  The Company has actively been working with its customers to submit applications to the SBA for forgiveness of the loans and the Company started receiving forgiveness payments in the fourth quarter of 2020.

COVID-19 Bank Loan Modifications

 September 30, 2020 June 30, 2020
(Dollars in thousands)Total Loans Receivable, Net of PPP Loans Amount of Unexpired Original  Loan Modifications Amount of Re-deferral Loan Modifications Amount of Remaining Loan Modifications Loan Modifications (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans Amount of Remaining Loan Modifications Loan Modifications (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans
Residential real estate$862,614  28,571    28,571  3.31% $66,395  7.35%
Commercial real estate   and other commercial             
Real estate rental   and leasing3,361,074  163,103  43,735  206,838  6.15% 587,609  18.11%
Accommodation and   food services644,627  69,328  12,854  82,182  12.75% 395,882  61.41%
Healthcare826,809  29,136  14,117  43,253  5.23% 126,808  16.01%
Manufacturing193,216  15,263  3,296  18,559  9.61% 49,338  24.41%
Retail and wholesale   trade471,115  13,299  2,554  15,853  3.36% 46,623  9.78%
Construction774,069  13,337  1,188  14,525  1.88% 38,751  5.06%
Other2,075,812  23,146  27,442  50,588  2.44% 192,060  9.40%
Home equity and other   consumer960,978  5,767    5,767  0.60% 11,326  1.19%
Total$10,170,314   360,950  105,186  466,136  4.58% $1,514,792  15.11%

In response to COVID-19, the Company modified 3,054 loans in the amount of $1.515 billion during the second quarter of 2020.  These modifications were primarily short-term payment deferrals under six months.  During the third quarter of 2020, the majority of the modified loan deferral periods expired, and the loans returned to regular payment status.  During the current quarter, the re-deferral rate was 9.12 percent for modified loans whose original deferral period had expired, with no industry category exceeding 20 percent.  As of September 30, 2020, $466 million of the modifications, or 4.58 percent of the $10.170 billion of loans, net of the PPP loans, remain in the deferral period, a reduction of $1.049 billion from the $1.515 billion of loan modifications at the end of the prior quarter. 

In addition to the Bank loan modifications presented above, the state of Montana created the Montana Loan Deferment Program for only Montana-based businesses and was implemented only in the third quarter.  Cares Act Funds were used to provide interest payments upfront and directly to lenders on behalf of participating borrowers to convert existing commercial loans to interest only status, resulting in the deferral of principal and interest for a period of six to twelve months.  None of the interest payments are required to be repaid by the borrowers, thus providing a grant to the borrowers.  This program was unique to Montana, had minimal qualification requirements, and required that participating lenders modify eligible loans to conform to the program in order for borrowers to qualify for the grant.  As of September 30, 2020, the Company had $237 million in eligible loans benefiting from this grant program, which was 2.33 percent of total loans receivable, net of PPP loans. Given the unique nature of the Montana only grant program, the $237 million was not included in the Bank loan modifications presented above.

COVID-19 Higher Risk Industries - Enhanced Monitoring

 September 30, 2020 June 30, 2020
(Dollars in thousands)Enhanced Monitoring Loans Receivable, Net of PPP Loans Percent of Total Loans Receivable, Net of PPP Loans Amount of Unexpired Original Loan Modifications Amount of Re-deferral Loan Modifications Amount of Remaining Loan Modifications Loan Modifications (Amount) as a Percent of Enhanced Monitoring Loans Receivable, Net of PPP Loans Amount of Remaining Loan Modifications Percent of Loans Receivable, Net of PPP Loans Loan Modifications (Amount) as a Percent of Enhanced Monitoring Loans Receivable, Net of PPP Loans
Hotel and motel$422,500  4.15% 44,091  6,679  50,770  12.02% $300,747  4.20% 71.34%
Restaurant138,944  1.37% 12,977  6,175  19,152  13.78% 76,632  1.50% 50.91%
Travel and tourism19,726  0.19% 4,605  397  5,002  25.36% 7,845  0.21% 37.79%
Gaming14,500  0.14% 1,101    1,101  7.59% 9,214  0.15% 60.95%
Oil and gas22,178  0.22% 1,474    1,474  6.65% 6,013  0.23% 26.43%
Total$617,848  6.08% 64,248  13,251  77,499  12.54% $400,451  6.29% 63.49%

Excluding the PPP loans, the Company has $618 million, or 6 percent, of its total loan portfolio with direct exposure to industries for which it has identified as higher risk, requiring enhanced monitoring.  As of September 30, 2020, $77.5 million have modifications, which was a reduction of $323 million, or 81 percent,  from the $400 million of modifications at the end of the prior quarter.   During the current quarter the re-deferral rate was 3.94 percent for modified loans whose original deferral period had expired, with no industry category exceeding 15 percent.  The Company continues to conduct enhanced portfolio reviews and monitoring for potential credit deterioration.

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, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Deposits             
Non-interest bearing deposits$5,479,311  5,043,704  3,696,627  3,772,766  435,607   1,782,684   1,706,545  
NOW and DDA accounts3,300,152  3,113,863  2,645,404  2,592,483  186,289   654,748   707,669  
Savings accounts1,864,143  1,756,503  1,485,487  1,472,465  107,640   378,656   391,678  
Money market deposit accounts2,557,294  2,403,641  1,937,141  1,940,517  153,653   620,153   616,777  
Certificate accounts979,857  995,536  958,501  955,765  (15,679)  21,356   24,092  
Core deposits, total14,180,757  13,313,247  10,723,160  10,733,996  867,510   3,457,597   3,446,761  
Wholesale deposits119,131  68,285  53,297  134,629  50,846   65,834   (15,498) 
Deposits, total14,299,888  13,381,532  10,776,457  10,868,625  918,356   3,523,431   3,431,263  
Repurchase agreements965,668  881,227  569,824  558,752  84,441   395,844   406,916  
Federal Home Loan Bank advances7,318  37,963  38,611  8,707  (30,645)  (31,293)  (1,389) 
Other borrowed funds32,967  32,546  28,820  14,808  421   4,147   18,159  
Subordinated debentures139,918  139,917  139,914  139,913  1   4   5  
Other liabilities225,219  229,748  169,640  174,586  (4,529)  55,579   50,633  
Total liabilities$15,670,978  14,702,933  11,723,266  11,765,391  968,045   3,947,712   3,905,587  

Core deposits of $14.181 billion as of September 30, 2020 increased $868 million, or 7 percent, from the prior quarter.  Excluding the SBAZ acquisition, core deposits increased $2.843 billion, or 26 percent, from the prior year third quarter, with non-interest bearing deposits increasing $1.565 billion, or 41 percent.  The current year significant increase in deposits was attributable to a number of factors including the PPP loan proceeds deposited by customers and the increase in customer savings rate.  Non-interest bearing deposits were 39 percent of total core deposits at September 30, 2020 compared to 35 percent of total core deposits at September 30, 2019.

Federal Home Loan Bank (“FHLB”) advances of $7.3 million at September 30, 2020 decreased $31 million from the prior quarter and decreased $1.4 million from the prior year third quarter.  The low level of FHLB advances was the result of the significant increase in core deposits which funded loans and debt security growth.  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)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Common equity$2,123,991   2,073,806   1,920,507   1,905,306   50,185  203,484   218,685  
Accumulated other comprehensive income131,098   129,909   40,226   48,095   1,189  90,872   83,003  
Total stockholders’ equity2,255,089   2,203,715   1,960,733   1,953,401   51,374  294,356   301,688  
Goodwill and core deposit intangible, net(572,134)  (574,088)  (519,704)  (522,274)  1,954  (52,430)  (49,860) 
Tangible stockholders’ equity$1,682,955   1,629,627   1,441,029   1,431,127   53,328  241,926   251,828  

Stockholders’ equity to total assets12.58% 13.03% 14.33% 14.24%      
Tangible stockholders’ equity to total tangible assets9.70% 9.98% 10.95% 10.84%      
Book value per common share$23.63  23.10  21.25  21.19  0.53  2.38  2.44 
Tangible book value per common share$17.64  17.08  15.61  15.53  0.56  2.03  2.11 

Tangible stockholders’ equity of $1.683 billion at September 30, 2020 increased $53 million, or 3 percent, from the prior quarter and was primarily the result of earnings retention.  Tangible stockholders’ equity increased $252 million over the prior year third quarter, which was the result of $112 million of Company stock issued for the acquisitions of SBAZ and an increase in other comprehensive income and earnings retention.  These increases more than offset the increase in goodwill and core deposit intangible associated with the acquisition.  The current year decrease in both the stockholder’s equity to total assets ratio and the tangible stockholders’ equity to total tangible assets ratio was primarily the result of adding $1.448 billion of PPP loans.  Tangible book value per common share of $17.64 at the current quarter end increased $0.56 per share from the prior quarter and increased $2.11 per share from a year ago.

Cash DividendsOn September 30, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share.  The dividend was payable October 22, 2020 to shareholders of record on October 13, 2020. The dividend was the 142nd consecutive dividend.  Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations. 

S&P MidMidCap 400® Index

During the second quarter of 2020, S&P Dow Jones Indices selected the Company to transition from the S&P SmallCap 600® to the S&P MidCap 400®. S&P MidCap 400® index consists of 400 companies that are chosen with regard to market capitalization, liquidity and industry representations.

Operating Results for Three Months Ended September 30, 2020 Compared to June 30, 2020 and March 31, 2020

Income Summary

 Three Months ended $ Change from
(Dollars in thousands)Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Sep 30, 2019 Jun 30, 2020 Mar 31, 2020 Sep 30, 2019
Net interest income             
Interest income$157,487  155,404  142,865  142,395  2,083   14,622   15,092  
Interest expense6,084  7,185  8,496  10,947  (1,101)  (2,412)  (4,863) 
Total net interest income151,403  148,219  134,369  131,448  3,184   17,034   19,955  
Non-interest income             
Service charges and other fees13,404  11,366  14,020  15,138  2,038   (616)  (1,734) 
Miscellaneous loan fees and charges2,084  1,682  1,285  1,775  402   799   309  
Gain on sale of loans35,516  25,858  11,862  10,369  9,658   23,654   25,147  
Gain on sale of investments24  128  863  13,811  (104)  (839)  (13,787) 
Other income2,639  2,190  5,242  1,956  449   (2,603)  683  
Total non-interest income53,667  41,224  33,272  43,049  12,443   20,395   10,618  
Total income205,070  189,443  167,641  174,497  15,627   37,429   30,573  
Net interest margin (tax-equivalent)3.92% 4.12% 4.36% 4.42%      

Net Interest IncomeThe current quarter net interest income of $151 million increased $3.2 million, or 2 percent, over the prior quarter and increased $20.0 million, or 15 percent, from the prior year third quarter.  The current quarter interest income of $157 million increased $2.1 million, or 1 percent, compared to the prior quarter which was driven by an increase in income from commercial loans primarily from the PPP loans.  The current quarter interest income increased $15.1 million, or 11 percent, over prior year third quarter and was due to an increase in income from commercial loans and an increase in income on debt securities.  Included in interest income was interest from the PPP loans of $9.3 million in the current quarter and $7.3 million in the prior quarter.  

The current quarter interest expense of $6.1 million decreased $1.1 million, or 15 percent, over the prior quarter primarily as result of a decrease in deposit rates and borrowing interest rates.  Current quarter interest expense decreased $4.9 million, or 44 percent, over prior year third quarter which was due to the decrease in higher cost borrowings and a decrease in deposit rates.  During the current quarter, the total cost of funding (including non-interest bearing deposits) declined 5 basis points to 16 basis points compared to 21 basis points for the prior quarter primarily as a result of a decrease in rates on both deposits and borrowings.  The total cost of funding decreased 23 basis points from the prior year third quarter and was attributable to a decrease in rates and a shift from higher cost borrowings to low cost deposits.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.92 percent compared to 4.12 percent in the prior quarter.  The core net interest margin, excluding  2 basis points of discount accretion, 1 basis point of non-accrual interest, and 13 basis points of income from the PPP loans, was 4.02 percent compared to 4.21 in the prior quarter and 4.35 percent in the prior year third quarter.  The Company experienced a 19 basis points decrease in the core net interest margin during the current quarter from decreased yields on loans and debt securities which were partially offset by the decrease in the cost of funding.  The core net interest margin decreased 33 basis points from the prior year third quarter primarily from a decrease in earning asset yields, primarily loan yields, that outpaced the decrease in the total cost of funding.  “The Bank divisions’ reduction in the cost of interest bearing deposits and repurchase agreements while increasing non-interest bearing deposits enabled the total cost of funding to decline by 5 basis points in the current quarter,” said Ron Copher, Chief Financial Officer.

Non-interest IncomeNon-interest income for the current quarter totaled $53.7 million which was an increase of $12.4 million, or 30 percent, over the prior quarter and an increase of $10.6 million, or 25 percent, over the same quarter last year.  Service charges and other fees of $13.4 million for the current quarter increased $2.0 million, or 18 percent, from the prior quarter.  Service charges and other fees decreased $1.7 million from the prior year third quarter due to the decreased overdraft activity.  Gain on the sale of loans of $35.5 million for the current quarter increased $9.7 million, or 37 percent, compared to the prior quarter and increased $25.1 million, or 242 percent, from the prior year third quarter due to the significant increase in refinance activity driven by the decrease in interest rates. 

During the prior year third quarter, the Company terminated $260 million notional pay-fixed interest rate swaps and corresponding debt along with the sale of $308 million of available-for-sale debt securities.  Sale of the investment securities resulted in a gain of $13.8 million in the prior year third quarter.  Offsetting the gain was a $10 million loss recognized on the early termination of the interest swaps and a $3.5 million write-off of deferred prepayment penalties on FHLB borrowings. 

Non-interest Expense Summary

 Three Months ended $ Change from
(Dollars in thousands)Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Sep 30, 2019 Jun 30, 2020 Mar 31, 2020 Sep 30, 2019
Compensation and employee benefits$64,866  57,981  59,660  62,509  6,885   5,206  2,357  
Occupancy and equipment9,369  9,357  9,219  8,731  12   150  638  
Advertising and promotions2,779  2,138  2,487  2,719  641   292  60  
Data processing5,597  5,042  5,282  4,466  555   315  1,131  
Other real estate owned186  75  112  166  111   74  20  
Regulatory assessments and insurance1,495  1,037  1,090  593  458   405  902  
Loss on termination of hedging activities      13,528       (13,528) 
Core deposit intangibles amortization2,612  2,613  2,533  2,360  (1)  79  252  
Other expenses18,786  19,898  11,545  15,603  (1,112)  7,241  3,183  
Total non-interest expense$105,690  98,141  91,928  110,675  7,549   13,762  (4,985) 

Total non-interest expense of $106 million for the current quarter increased $7.5 million, or 8 percent, over the prior quarter and decreased $5.0 million, or 5 percent, over the prior year third quarter.  Compensation and employee benefits increased by $6.9 million, or 12 percent, from the prior quarter which was primarily driven by the decrease in deferring compensation on originating the PPP loans which was $438 thousand in the current quarter compared to $8.4 million in the prior quarter.  Compensation and employee benefits increased $2.4 million, or 4 percent, from the prior year third quarter primarily due to an increased number of employees driven by acquisitions and organic growth which more than offset the decrease from the $5.4 million of stock compensation expense in the prior year third quarter related to the Heritage Bancorp acquisition.  Occupancy and equipment expense increased $638 thousand, or 7 percent, over the prior year third quarter primarily as a result of increased costs from acquisitions.  Data processing expense increased $555 thousand, or 11 percent, over the prior quarter and increased $1.1 million, or 25 percent over the prior year third quarter as a result of the increased cost from acquisitions along with increased investment in technology infrastructure.  Regulatory assessment and insurance increased $458 thousand from the prior quarter primarily due to an accrual adjustment in the prior quarter for waiver of the State of Montana regulatory semi-annual assessment for the first half of 2020.  Regulatory assessment and insurance increased $902 thousand from the prior year third quarter quarter primarily due to $1.3 million in Small Bank Assessment credits applied in the prior year third quarter.  The prior year loss on termination of hedging activities included $3.5 million write-off of the remaining unamortized deferred prepayment penalties on FHLB debt and a $10 million loss on the termination of pay-fixed interest rate swaps with notional amount of $260 million in the prior year third quarter. 

Other expenses of $18.8 million, decreased $1.1 million, or 6 percent, from the prior quarter primarily due to a decrease in acquisition-related expenses.  Other expenses increased $3.2 million, or 20 percent, over the prior year third quarter and was driven primarily from an increase in expense related to unfunded loan commitments.  Current quarter other expenses included acquisition-related expenses of $793 thousand compared to $3.7 million in the prior quarter and $2.1 million in the prior year third quarter.  Expense related to unfunded loan commitments was $2.3 million in the current quarter compared to $3.4 million in the prior quarter and no expense in the prior year third quarter.  Also included in the current quarter other expenses was $1.9 million for third party consulting regarding improvements in technology, product and service offerings. 

Federal and State Income Tax ExpenseTax expense during the third quarter of 2020 was $18.8 million, an increase of $4.5 million, or 31 percent, compared to the prior quarter and an increase of $6.5 million, or 54 percent, from the prior year third quarter.  The effective tax rate in the current quarter was 19 percent compared to 18 percent in the prior quarter and  19 percent prior year third quarter.

Efficiency RatioThe efficiency ratio was 49.16 percent in the current quarter and 49.29 percent in the prior quarter.  Excluding the impact from the PPP loans, the efficiency ratio would have been 51.67 percent in the current quarter, which was a 406 basis points decrease from the prior quarter efficiency ratio of 55.73 percent and was primarily due to the increase in gain on sale of loans.  The prior year third quarter efficiency was 65.95 and excluding the impact from the termination of the cash flow hedges and the accelerated stock compensation expense, the efficiency ratio would have been 54.41 percent.  Excluding these adjustments, the current quarter efficiency ratio decreased 274 basis points from the prior year third quarter efficiency ratio which was also driven by the increased gain on sale of loans.

Operating Results for Nine Months Ended September 30, 2020Compared to September 30, 2019

Income Summary

 Nine Months ended    
(Dollars in thousands)Sep 30, 2020 Sep 30, 2019 $ Change % Change
Net interest income       
Interest income$455,756  $400,896  $54,860   14 %
Interest expense21,765  33,940  (12,175)  (36)%
Total net interest income433,991  366,956  67,035   18 %
Non-interest income       
Service charges and other fees38,790  53,178  (14,388)  (27)%
Miscellaneous loan fees and charges5,051  3,934  1,117   28 %
Gain on sale of loans73,236  23,929  49,307   206 %
Gain on sale of investments1,015  14,158  (13,143)  (93)%
Other income10,071  7,158  2,913   41 %
Total non-interest income128,163  102,357  25,806   25 %
 $562,154  $469,313  $92,841   20 %
Net interest margin (tax-equivalent)4.12% 4.36%    

Net Interest IncomeNet-interest income of $434 million for the first nine months of 2020 increased $67.0 million, or 18 percent, over the first nine months of 2019.  Interest income of $456 million for the first nine months of 2020 increased $54.9 million, or 14 percent, from the first nine months of 2019 and was primarily attributable to a $45.7 million increase in income from commercial loans, including $16.6 million from the PPP loans.  Interest expense of $21.8 million for the first nine months of 2020 decreased $12.2 million, or 36 percent over the prior year same period primarily as a result of decreased higher cost FHLB advances and the decrease in the cost of deposits and borrowings.  The total funding cost (including non-interest bearing deposits) for the first nine months of 2020 was 22 basis points, which decreased 20 basis points, or 48 percent, compared to 42 basis points for the first nine months of 2019.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first nine months of 2020 was 4.12 percent, a 24 basis points decrease from the net interest margin of 4.36 percent for the first nine months of 2019.  The core net interest margin, excluding 3 basis points of discount accretion, 1 basis point of non-accrual interest, and 9 basis points of income from the PPP loans was 4.17 compared to a core margin of 4.29 percent in the prior year first nine months.  Although the Company was successful in reducing the cost of funding, it was not enough to outpace the decrease in yields on loans and debt securities driven by the current interest rate environment.

Non-interest IncomeNon-interest income of $128 million for the first nine months of 2020 increased $25.8 million, or 25 percent, over the same period last year.  Service charges and other fees of $38.8 million for 2020 year-to-date decreased $14.4 million, or 27 percent, from the same period prior year as a result of a decrease in overdraft activity and the impact 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 $73.2 million for the first nine months of 2020, increased $49.3 million, or 206 percent, compared to the prior year as a result significant increase in refinance activity driven by the decrease in interest rates.  Other income increased $2.9 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, 2020 Sep 30, 2019 $ Change % Change
Compensation and employee benefits$182,507  $167,210  $15,297   9 %
Occupancy and equipment27,945  25,348  2,597   10 %
Advertising and promotions7,404  7,874  (470)  (6)%
Data processing15,921  12,420  3,501   28 %
Other real estate owned373  496  (123)  (25)%
Regulatory assessments and insurance3,622  3,726  (104)  (3)%
Loss on termination of hedging activities  13,528  (13,528)  (100)%
Core deposit intangibles amortization7,758  5,919  1,839   31 %
Other expenses50,229  43,154  7,075   16 %
Total non-interest expense$295,759  $279,675  $16,084   6 %

Total non-interest expense of $296 million for the first nine months of 2020 increased $16.1 million, or 6 percent, over the prior year same period.  Compensation and employee benefits for the first nine months of 2020 increased $15.3 million, or 9 percent, from the same period last year due to the increased number of employees from acquisitions and organic growth and annual salary increases which more than offset the $8.9 million deferral of compensation cost from the PPP loans in the current year and the $5.4 million of stock compensation expense in the prior year from the Heritage Bancorp acquisition.  Occupancy and equipment expense for the first nine months of 2020 increased $2.6 million, or 10 percent from the prior year primarily from increased cost from acquisitions.  Data processing expense for the first nine months of 2020 increased $3.5 million, or 28 percent, from the prior year as a result of the increased costs from acquisitions along with increased investment in technology infrastructure.  Other expenses of $50.2 million, increased $7.1 million, or 16 percent, from the prior year and was primarily driven by an increase in expense related to unfunded loan commitments and an increase in acquisition-related expenses.  Acquisition-related expenses were $7.3 million in the current year first nine months compared to $4.1 million in the prior year first nine months.  In the current year-to-date period, there was $2.1 million of expense related to unfunded loan commitments which was primarily attributable to the economic forecast related to COVID-19.  

Credit Loss ExpenseThe credit loss expense was $39.2 million for the first nine months of 2020, an increase of $39.1 million from the same period in the prior year, this increase was primarily attributable to changes in the economic forecast related to COVID-19.  Net charge-offs during the first nine months of 2020 were $2.9 million compared to $5.8 million during the same period in 2019.

Federal and State Income Tax ExpenseTax expense of $42.7 million in the first nine months of 2020 increased $6.2 million, or 17 percent, over the prior year same period.  The effective tax rate year-to-date in 2020 and 2019 was 19 percent.

Efficiency RatioThe efficiency ratio was 50.21 percent for the first nine months of 2020.  Excluding the impact from the PPP loans, the efficiency ratio would have been 53.30 percent.  The prior year first nine months efficiency ratio was 58.82 and excluding the impact from the termination of the cash flow hedges and the accelerated stock compensation expense, the efficiency ratio would have been 54.74 percent.  Excluding these adjustments, the current year efficiency ratio decreased 144 basis points from the prior year efficiency ratio which was driven by the increased gain on sale of loans and increase in net interest income that more than offset the decrease in service fee income from the Durbin Amendment and increases in compensation expense.

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 recently adopted CARES Act addressing the economic effects of the COVID-19 pandemic, 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 InformationA conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, October 23, 2020. 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 1497135. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/or6wd4fi. 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 1497135 by November 6, 2020.

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: 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).

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

(Dollars in thousands, except per share data)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Assets       
Cash on hand and in banks$249,245   212,681   198,639   233,623  
Federal funds sold590           
Interest bearing cash deposits520,044   334,929   132,322   172,761  
Cash and cash equivalents769,879   547,610   330,961   406,384  
Debt securities, available-for-sale4,125,548   3,533,950   2,575,252   2,459,036  
Debt securities, held-to-maturity193,509   203,275   224,611   234,992  
Total debt securities4,319,057   3,737,225   2,799,863   2,694,028  
Loans held for sale, at fair value147,937   115,345   69,194   100,441  
Loans receivable11,618,731   11,453,378   9,512,810   9,541,088  
Allowance for credit losses(164,552)  (162,509)  (124,490)  (125,535) 
Loans receivable, net11,454,179   11,290,869   9,388,320   9,415,553  
Premises and equipment, net326,925   326,005   310,309   307,590  
Other real estate owned5,361   4,743   5,142   7,148  
Accrued interest receivable91,393   77,363   56,047   63,294  
Deferred tax asset      2,037     
Core deposit intangible, net58,121   60,733   63,286   65,852  
Goodwill514,013   513,355   456,418   456,422  
Non-marketable equity securities10,366   11,592   11,623   10,427  
Bank-owned life insurance123,095   122,388   109,428   108,814  
Other assets105,741   99,420   81,371   82,839  
Total assets$17,926,067   16,906,648   13,683,999   13,718,792  
Liabilities       
Non-interest bearing deposits$5,479,311   5,043,704   3,696,627   3,772,766  
Interest bearing deposits8,820,577   8,337,828   7,079,830   7,095,859  
Securities sold under agreements to repurchase965,668   881,227   569,824   558,752  
FHLB advances7,318   37,963   38,611   8,707  
Other borrowed funds32,967   32,546   28,820   14,808  
Subordinated debentures139,918   139,917   139,914   139,913  
Accrued interest payable3,951   4,211   4,686   4,435  
Deferred tax liability17,227   25,213       
Other liabilities204,041   200,324   164,954   170,151  
Total liabilities15,670,978   14,702,933   11,723,266   11,765,391  
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 authorized954   954   923   922  
Paid-in capital1,493,928   1,492,817   1,378,534   1,375,785  
Retained earnings - substantially restricted629,109   580,035   541,050   528,599  
Accumulated other comprehensive income131,098   129,909   40,226   48,095  
Total stockholders’ equity2,255,089   2,203,715   1,960,733   1,953,401  
Total liabilities and stockholders’ equity$17,926,067   16,906,648   13,683,999   13,718,792  

Glacier Bancorp, Inc.Unaudited Condensed Consolidated Statements of Operations

 Three Months ended Nine Months ended
(Dollars in thousands, except per share data)Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Sep 30, 2019 Sep 30, 2020 Sep 30, 2019
Interest Income           
Debt securities$25,381  25,833  21,014  21,357  72,228  64,600 
Residential real estate loans11,592  12,098  11,526  12,156  35,216  34,345 
Commercial loans109,514  106,343  98,684  97,224  314,541  268,806 
Consumer and other loans11,000  11,130  11,641  11,658  33,771  33,145 
Total interest income157,487  155,404  142,865  142,395  455,756  400,896 
Interest Expense           
Deposits3,952  4,587  5,581  6,214  14,120  17,179 
Securities sold under agreements to repurchase886  908  989  999  2,783  2,687 
Federal Home Loan Bank advances70  268  346  2,035  684  8,937 
Other borrowed funds173  172  128  47  473  123 
Subordinated debentures1,003  1,250  1,452  1,652  3,705  5,014 
Total interest expense6,084  7,185  8,496  10,947  21,765  33,940 
Net Interest Income151,403  148,219  134,369  131,448  433,991  366,956 
Credit loss expense2,869  13,552  22,744    39,165  57 
Net interest income after credit loss expense148,534  134,667  111,625  131,448  394,826  366,899 
Non-Interest Income           
Service charges and other fees13,404  11,366  14,020  15,138  38,790  53,178 
Miscellaneous loan fees and charges2,084  1,682  1,285  1,775  5,051  3,934 
Gain on sale of loans35,516  25,858  11,862  10,369  73,236  23,929 
Gain on sale of debt securities24  128  863  13,811  1,015  14,158 
Other income2,639  2,190  5,242  1,956  10,071  7,158 
Total non-interest income53,667  41,224  33,272  43,049  128,163  102,357 
Non-Interest Expense           
Compensation and employee benefits64,866  57,981  59,660  62,509  182,507  167,210 
Occupancy and equipment9,369  9,357  9,219  8,731  27,945  25,348 
Advertising and promotions2,779  2,138  2,487  2,719  7,404  7,874 
Data processing5,597  5,042  5,282  4,466  15,921  12,420 
Other real estate owned186  75  112  166  373  496 
Regulatory assessments and insurance1,495  1,037  1,090  593  3,622  3,726 
Loss on termination of hedging activities      13,528    13,528 
Core deposit intangibles amortization2,612  2,613  2,533  2,360  7,758  5,919 
Other expenses18,786  19,898  11,545  15,603  50,229  43,154 
Total non-interest expense105,690  98,141  91,928  110,675  295,759  279,675 
Income Before Income Taxes96,511  77,750  52,969  63,822  227,230  189,581 
Federal and state income tax expense18,754  14,306  9,630  12,212  42,690  36,447 
Net Income$77,757  63,444  43,339  51,610  184,540  153,134 

Glacier Bancorp, Inc.Average Balance Sheets

 Three Months ended
 September 30, 2020 June 30, 2020
(Dollars in thousands)Average Balance Interest & Dividends Average Yield/ Rate Average Balance Interest & Dividends Average Yield/ Rate
Assets           
Residential real estate loans$1,010,503  $11,592  4.59% $1,048,095  $12,098  4.62%
Commercial loans 19,636,631  110,847  4.58% 9,235,881  107,632  4.69%
Consumer and other loans957,284  11,000  4.57% 957,798  11,130  4.67%
Total loans 211,604,418  133,439  4.57% 11,241,774  130,860  4.68%
Tax-exempt investment securities 21,379,577  13,885  4.03% 1,401,603  14,248  4.07%
Taxable investment securities 42,809,545  14,568  2.07% 2,266,707  14,730  2.60%
Total earning assets15,793,540  161,892  4.08% 14,910,084  159,838  4.31%
Goodwill and intangibles572,759      575,296     
Non-earning assets794,165      797,403     
Total assets$17,160,464      $16,282,783     
Liabilities           
Non-interest bearing deposits$5,171,984  $  % $4,733,485  $  %
NOW and DDA accounts3,218,536  642  0.08% 3,018,706  687  0.09%
Savings accounts1,804,438  166  0.04% 1,687,448  175  0.04%
Money market deposit accounts2,453,659  1,161  0.19% 2,300,787  1,240  0.22%
Certificate accounts981,385  1,936  0.78% 1,013,188  2,408  0.96%
Total core deposits13,630,002  3,905  0.11% 12,753,614  4,510  0.14%
Wholesale deposits 586,852  47  0.22% 68,503  77  0.46%
FHLB advances21,273  70  1.30% 182,061  268  0.58%
Repurchase agreements and other borrowed funds1,049,002  2,062  0.78% 913,744  2,330  1.03%
Total funding liabilities14,787,129  6,084  0.16% 13,917,922  7,185  0.21%
Other liabilities120,294      180,935     
Total liabilities14,907,423      14,098,857     
Stockholders’ Equity           
Common stock954      954     
Paid-in capital1,493,353      1,492,230     
Retained earnings622,099      575,455     
Accumulated other comprehensive income136,635      115,287     
Total stockholders’ equity2,253,041      2,183,926     
Total liabilities and stockholders’ equity$17,160,464      $16,282,783     
Net interest income (tax-equivalent)  $155,808      $152,653   
Net interest spread (tax-equivalent)    3.92%     4.10%
Net interest margin (tax-equivalent)    3.92%     4.12%

______________________________1  Includes tax effect of $1.3 million and $1.3 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2020 and June 30, 2020, respectively.2  Total loans are gross of the allowance for credit 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 $2.8 million and $2.9 million on tax-exempt debt securities income for the three months ended September 30, 2020 and June 30, 2020, respectively.4  Includes tax effect of $266 thousand and $266 thousand on federal income tax credits for the three months ended September 30, 2020 and June 30, 2020, 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
 September 30, 2020 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$1,010,503  $11,592  4.59% $994,906  $12,156  4.89%
Commercial loans 19,636,631  110,847  4.58% 7,378,337  98,465  5.29%
Consumer and other loans957,284  11,000  4.57% 906,148  11,658  5.10%
Total loans 211,604,418  133,439  4.57% 9,279,391  122,279  5.23%
Tax-exempt debt securities 31,379,577  13,885  4.03% 899,914  9,280  4.13%
Taxable debt securities 42,809,545  14,568  2.07% 1,917,045  14,250  2.97%
Total earning assets15,793,540  161,892  4.08% 12,096,350  145,809  4.78%
Goodwill and intangibles572,759      429,191     
Non-earning assets794,165      672,550     
Total assets$17,160,464      $13,198,091     
Liabilities           
Non-interest bearing deposits$5,171,984  $  % $3,513,908  $  %
NOW and DDA accounts3,218,536  642  0.08% 2,473,375  1,091  0.17%
Savings accounts1,804,438  166  0.04% 1,445,323  270  0.07%
Money market deposit accounts2,453,659  1,161  0.19% 1,845,184  1,540  0.33%
Certificate accounts981,385  1,936  0.78% 929,441  2,412  1.03%
Total core deposits13,630,002  3,905  0.11% 10,207,231  5,313  0.21%
Wholesale deposits 586,852  47  0.22% 146,339  901  2.44%
FHLB advances21,273  70  1.30% 222,449  2,035  3.58%
Repurchase agreements and other borrowed funds1,049,002  2,062  0.78% 645,426  2,698  1.66%
Total funding liabilities14,787,129  6,084  0.16% 11,221,445  10,947  0.39%
Other liabilities120,294      101,806     
Total liabilities14,907,423      11,323,251     
Stockholders’ Equity           
Common stock954      903     
Paid-in capital1,493,353      1,292,182     
Retained earnings622,099      531,181     
Accumulated other comprehensive    income136,635      50,574     
Total stockholders’ equity2,253,041      1,874,840     
Total liabilities and stockholders’ equity$17,160,464      $13,198,091     
Net interest income (tax-equivalent)  $155,808      $134,862   
Net interest spread (tax-equivalent)    3.92%     4.39%
Net interest margin (tax-equivalent)    3.92%     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 September 30, 2020 and 2019, respectively.2  Total loans are gross of the allowance for credit 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 $2.8 million and $1.9 million on tax-exempt debt securities income for the three months ended September 30, 2020 and 2019, respectively.4  Includes tax effect of $266 thousand and $275 thousand on federal income tax credits for the three months ended September 30, 2020 and 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)

 Nine Months ended
 September 30, 2020 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$1,013,072  $35,216  4.63% $950,516  $34,345  4.82%
Commercial loans 18,896,708  318,435  4.78% 6,905,151  272,269  5.27%
Consumer and other loans947,372  33,771  4.76% 871,544  33,145  5.08%
Total loans 210,857,152  387,422  4.77% 8,727,211  339,759  5.21%
Tax-exempt debt securities 31,237,779  37,542  4.04% 938,998  29,212  4.15%
Taxable debt securities 42,380,184  43,070  2.41% 1,891,560  42,225  2.98%
Total earning assets14,475,115  468,034  4.32% 11,557,769  411,196  4.76%
Goodwill and intangibles562,533      373,207     
Non-earning assets760,758      593,011     
Total assets$15,798,406      $12,523,987     
Liabilities           
Non-interest bearing deposits$4,528,500  $  % $3,182,783  $  %
NOW and DDA accounts2,971,702  2,244  0.10% 2,396,828  3,037  0.17%
Savings accounts1,670,722  580  0.05% 1,398,539  757  0.07%
Money market deposit accounts2,262,781  4,025  0.24% 1,733,245  3,675  0.28%
Certificate accounts986,807  6,940  0.94% 912,283  6,648  0.97%
Total core deposits12,420,512  13,789  0.15% 9,623,678  14,117  0.20%
Wholesale deposits 570,880  332  0.63% 159,314  3,062  2.57%
FHLB advances103,700  684  0.87% 349,998  8,937  3.37%
Repurchase agreements and other borrowed funds892,418  6,960  1.04% 598,907  7,824  1.75%
Total funding liabilities13,487,510  21,765  0.22% 10,731,897  33,940  0.42%
Other liabilities149,423      109,090     
Total liabilities13,636,933      10,840,987     
Stockholders’ Equity           
Common stock947      870     
Paid-in capital1,467,623      1,152,076     
Retained earnings586,963      501,158     
Accumulated other comprehensive income105,940      28,896     
Total stockholders’ equity2,161,473      1,683,000     
Total liabilities and stockholders’ equity$15,798,406      $12,523,987     
Net interest income (tax-equivalent)  $446,269      $377,256   
Net interest spread (tax-equivalent)    4.10%     4.34%
Net interest margin (tax-equivalent)    4.12%     4.36%

______________________________1  Includes tax effect of $3.9 million and $3.5 million on tax-exempt municipal loan and lease income for the six months ended September 30, 2020 and 2019, respectively.2  Total loans are gross of the allowance for credit 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 $7.6 million and $6.0 million on tax-exempt debt securities income for the six months ended September 30, 2020 and 2019, respectively.4  Includes tax effect of $798 thousand and $863 thousand on federal income tax credits for the six months ended September 30, 2020 and 2019, 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)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Custom and owner occupied construction$166,195   $177,172   $143,479   $147,626   (6)% 16 % 13 %
Pre-sold and spec construction157,242   161,964   180,539   207,596   (3)% (13)% (24)%
Total residential construction323,437   339,136   324,018   355,222   (5)%  % (9)%
Land development96,814   94,667   101,592   103,090   2 % (5)% (6)%
Consumer land or lots122,019   120,015   125,759   128,668   2 % (3)% (5)%
Unimproved land64,770   63,459   62,563   71,467   2 % 4 % (9)%
Developed lots for operative builders30,871   26,647   17,390   13,782   16 % 78 % 124 %
Commercial lots62,445   60,563   46,408   64,904   3 % 35 % (4)%
Other construction537,105   477,922   478,368   443,947   12 % 12 % 21 %
Total land, lot, and other construction914,024   843,273   832,080   825,858   8 % 10 % 11 %
Owner occupied1,889,512   1,855,994   1,667,526   1,666,211   2 % 13 % 13 %
Non-owner occupied2,259,062   2,238,586   2,017,375   2,023,262   1 % 12 % 12 %
Total commercial real estate4,148,574   4,094,580   3,684,901   3,689,473   1 % 13 % 12 %
Commercial and industrial2,308,710   2,342,081   991,580   1,009,310   (1)% 133 % 129 %
Agriculture747,145   714,227   701,363   718,255   5 % 7 % 4 %
1st lien1,256,111   1,227,514   1,186,889   1,208,096   2 % 6 % 4 %
Junior lien43,355   47,121   53,571   53,931   (8)% (19)% (20)%
Total 1-4 family1,299,466   1,274,635   1,240,460   1,262,027   2 % 5 % 3 %
Multifamily residential359,030   343,870   342,498   350,622   4 % 5 % 2 %
Home equity lines of credit651,546   655,492   617,900   612,775   (1)% 5 % 6 %
Other consumer191,761   181,402   174,643   171,633   6 % 10 % 12 %
Total consumer843,307   836,894   792,543   784,408   1 % 6 % 8 %
States and political subdivisions617,624   581,673   533,023   471,599   6 % 16 % 31 %
Other205,351   198,354   139,538   174,755   4 % 47 % 18 %
Total loans receivable, including   loans held for sale11,766,668   11,568,723   9,582,004   9,641,529   2 % 23 % 22 %
Less loans held for sale 1(147,937)  (115,345)  (69,194)  (100,441)  28  % 114  % 47  %
Total loans receivable$11,618,731   $11,453,378   $9,512,810   $9,541,088   1 % 22 % 22 %

______________________________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)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Sep 30, 2020 Sep 30, 2020 Sep 30, 2020
Custom and owner occupied construction$249  440  185  283  249     
Pre-sold and spec construction    743  1,219       
Total residential construction249  440  928  1,502  249     
Land development450  659  852  1,006  202    248 
Consumer land or lots223  427  330  828  61    162 
Unimproved land417  663  1,181  8,781  270    147 
Commercial lots682  529  529  575  153    529 
Other construction             
Total land, lot and other construction1,772  2,278  2,892  11,190  686    1,086 
Owner occupied9,077  9,424  4,608  8,251  7,338    1,739 
Non-owner occupied4,879  5,482  8,229  9,271  4,879     
Total commercial real estate13,956  14,906  12,837  17,522  12,217    1,739 
Commercial and industrial8,571  5,039  5,297  6,135  7,614  396  561 
Agriculture8,972  11,087  2,288  3,469  7,011  1,961   
1st lien6,559  7,634  8,671  9,420  4,698  217  1,644 
Junior lien986  746  569  669  815  171   
Total 1-4 family7,545  8,380  9,240  10,089  5,513  388  1,644 
Multifamily residential  92  201  206       
Home equity lines of credit2,903  3,048  2,618  3,553  2,550  80  273 
Other consumer407  412  837  1,098  241  108  58 
Total consumer3,310  3,460  3,455  4,651  2,791  188  331 
Other288  289  299  313  269  19   
Total$44,663  45,971  37,437  55,077  36,350  2,952  5,361 

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

 Accruing 30-89 Days Delinquent Loans,  by Loan Type % Change from
(Dollars in thousands)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019
Custom and owner occupied construction$448  $  $637  $49  n/m (30)% 814 %
Pre-sold and spec construction    148  8  n/m (100)% (100)%
Total residential construction448    785  57  n/m (43)% 686 %
Land development      1,282  n/m n/m (100)%
Consumer land or lots220  248  672  836  (11)% (67)% (74)%
Unimproved land381  411  558  8  (7)% (32)% 4,663 %
Developed lots for operative builders    2    n/m (100)% n/m
Commercial lots  153      (100)  n/m n/m
Other construction      142  n/m n/m (100) 
Total land, lot and other construction601  812  1,232  2,268  (26)% (51)% (74)%
Owner occupied3,163  1,512  3,052  2,949  109 % 4 % 7 %
Non-owner occupied1,157  966  1,834  1,286  20 % (37)% (10)%
Total commercial real estate4,320  2,478  4,886  4,235  74 % (12)% 2 %
Commercial and industrial2,354  4,127  2,036  12,780  (43)% 16 % (82)%
Agriculture2,795  12,084  4,298  1,290  (77)% (35)% 117 %
1st lien2,589  656  4,711  2,521  295 % (45)% 3 %
Junior lien738  160  624  715  361 % 18 % 3 %
Total 1-4 family3,327  816  5,335  3,236  308 % (38)% 3 %
Home equity lines of credit2,200  3,330  2,352  4,162  (34)% (6)% (47)%
Other consumer789  739  1,187  1,388  7 % (34)% (43)%
Total consumer2,989  4,069  3,539  5,550  (27)% (16)% (46)%
States and political subdivisions  124      (100)  n/m n/m
Other797  715  1,081  389  11 % (26)% 105 %
Total$17,631  $25,225  $23,192  $29,954  (30)% (24)% (41)%

______________________________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)Sep 30, 2020 Jun 30, 2020 Dec 31, 2019 Sep 30, 2019 Sep 30, 2020 Sep 30, 2020
Custom and owner occupied construction$(9)     98        9 
Pre-sold and spec construction(19)  (12)  (18)  (12)    19 
Total residential construction(28)  (12)  80   (12)    28 
Land development(63)  (50)  (30)  (25)    63 
Consumer land or lots(217)  (17)  (138)  (160)  7  224 
Unimproved land(489)  (287)  (311)  (271)    489 
Developed lots for operative builders      (18)  (18)     
Commercial lots(5)  (3)  (6)  (4)    5 
Other construction      (142)  (142)     
Total land, lot and other construction(774)  (357)  (645)  (620)  7  781 
Owner occupied(82)  (49)  (479)  (35)  52  134 
Non-owner occupied246   115   2,015   1,861   295  49 
Total commercial real estate164   66   1,536   1,826   347  183 
Commercial and industrial740   576   1,472   1,066   1,317  577 
Agriculture309   33   21   (32)  315  6 
1st lien(27)     (12)  189   21  48 
Junior lien(169)  (129)  (303)  (254)  28  197 
Total 1-4 family(196)  (129)  (315)  (65)  49  245 
Multifamily residential(244)  (43)          244 
Home equity lines of credit79   24