Glacier Bancorp, Inc. Announces Results for the Quarter and Year Ended December 31, 2020

January 28, 2021 4:30 PM EST

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4th Quarter 2020 Highlights:

  • Record net income of $81.9 million, an increase of $24.5 million, or 43 percent, over the prior year fourth quarter net income of $57.4 million.
  • Diluted earnings per share of $0.86, an increase of 39 percent from the prior year fourth quarter diluted earnings per share of $0.62.
  • Gain on sale of loans of $26.2 million, increased $16.1 million, or 159 percent, compared to the prior year fourth quarter.
  • Bank loan modifications related to the coronavirus disease of 2019 (“COVID-19”) decreased $371 million from the prior quarter and decreased $1.420 billion from the second quarter to $94.9 million, or 93 basis points of loans excluding the PPP loans.
  • Non-performing assets as a percentage of subsidiary assets was 0.19 percent, which compared to 0.25 percent in the prior quarter and 0.27 percent in the prior year fourth quarter.
  • Core deposits increased $579 million, or 4 percent.
  • The loan portfolio, excluding Payroll Protection Program (“PPP”) loans, organically increased $43.2 million, or 42 basis points, in the current quarter.
  • The Company was active in submitting applications to the SBA for PPP loan forgiveness resulting in a $539 million decrease, or 37 percent, in the PPP loan portfolio and a $14.0 million acceleration of net deferred fees included in interest income.
  • Declared and paid a regular quarterly dividend of $0.30 per share. The Company has declared 143 consecutive quarterly dividends and has increased the dividend 46 times.
  • Declared a special dividend of $0.15 per share.   This was the 17th special dividend the Company has declared.

Year 2020 Highlights:

  • Record net income of $266 million for 2020, an increase of $55.9 million, or 27 percent, over the prior year net income of $211 million.
  • Diluted earnings per share of $2.81, an increase of 18 percent from the prior year diluted earnings per share of $2.38.
  • The Company originated U.S. Small Business Administration (“SBA”) 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 $1.158 billion, or 12 percent, during 2020. Excluding PPP loans, the loan portfolio organically increased $249 million, or 3 percent during the current year.
  • Core deposits organically increased $3.4 billion, or 32 percent, during 2020, with non-interest bearing deposit growth of $1.6 billion, or 44 percent.
  • A record year for gain on sale of loans of $99.5 million, which increased $65.4 million, or 192 percent, compared to the prior year.
  • Dividends declared of $1.33 per share, an increase of $0.02 per share, or 2 percent, over the prior year dividends of $1.31.
  • 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 $745 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 Year ended
(Dollars in thousands, except per share and market data)Dec 31,2020 Sep 30,2020 Jun 30,2020 Mar 31,2020 Dec 31,2019 Dec 31,2020 Dec 31,2019
Operating results             
Net income$81,860  77,757  63,444  43,339  57,410  266,400  210,544 
Basic earnings per share$0.86  0.81  0.67  0.46  0.62  2.81  2.39 
Diluted earnings per share$0.86  0.81  0.66  0.46  0.62  2.81  2.38 
Dividends declared per share 1$0.45  0.30  0.29  0.29  0.49  1.33  1.31 
Market value per share             
Closing$46.01  32.05  35.29  34.01  45.99  46.01  45.99 
High$47.05  38.13  46.54  46.10  46.51  47.05  46.51 
Low$31.29  30.05  30.30  26.66  38.99  26.66  37.58 
Selected ratios and other data             
Number of common stock shares outstanding95,426,364 95,413,743 95,409,061 95,408,274 92,289,750 95,426,364 92,289,750
Average outstanding shares - basic95,418,958 95,411,656 95,405,493 93,287,670 92,243,133 94,833,864 88,255,290
Average outstanding shares - diluted95,492,258 95,442,576 95,430,403 93,359,792 92,365,021 94,932,353 88,385,775
Return on average assets (annualized)1.78% 1.80% 1.57% 1.25% 1.67% 1.62% 1.64%
Return on average equity (annualized)14.27% 13.73% 11.68% 8.52% 11.61% 12.15% 12.01%
Efficiency ratio50.34% 48.05% 47.54% 54.65% 54.90% 49.97% 57.78%
Dividend payout ratio 252.33% 37.04% 43.28% 63.04% 79.03% 47.33% 54.81%
Loan to deposit ratio76.29% 82.29% 86.45% 88.10% 88.92% 76.29% 88.92%
Number of full time equivalent employees2,970 2,946 2,954 2,955 2,826 2,970 2,826
Number of locations193 193 192 192 181 193 181
Number of ATMs250 250 251 247 248 250 248

______________________1 Includes a special dividend declared of $0.15 and $0.20 per share for the three and twelve months ended December 31, 2020 and December 31, 2019, respectively.   2 Excluding the special dividend, the dividend payout ratio was 34.88 percent and 46.77 percent for the three months ended December 31, 2020 and 2019, respectively and 41.99 percent and 46.44 percent for the twelve months ended December 31, 2020 and 2019, respectively.

KALISPELL, Mont., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ: GBCI) reported net income of $81.9 million for the current quarter, an increase of $24.5 million, or 43 percent, from the $57.4 million of net income for the prior year fourth quarter.   Diluted earnings per share for the current quarter was $0.86 per share, an increase of 39 percent from the prior year fourth quarter diluted earnings per share of $0.62. “While the pandemic has created a difficult time for the country and our Company, the Glacier Team did an outstanding job managing through the challenges and still delivering excellent results for the quarter and full year,” said Randy Chesler, President and Chief Executive Officer. “We are especially pleased with our credit performance which reflects the strong markets in which we operate as well as our conservative lending culture. We are optimistic about the future and the opportunity for continued profitable growth.”

Net income for 2020 was $266 million, an increase of $55.9 million, or 27 percent, from the $211 million net income from the prior year. Diluted earnings per share for the current year was $2.81 per share, an increase of 18 percent, from the diluted earnings per share of $2.38 for last year.

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 $94.9 million loans, or 93 basis points, remaining deferred as of December 31, 2020.

In addition, the Company originated SBA PPP loans primarily for small businesses in its communities. The Company originated 16,090 PPP loans in the amount of $1.472 billion during the current year. The majority of the PPP loans are expected to be forgiven by the SBA resulting in the forgiven loan amounts paid to the Company by the SBA. During the current quarter, the PPP loans provided $21.5 million of interest income (including deferred fees and deferred costs) of which $14.0 million was accelerated by the SBA forgiveness.

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 established it as 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)Dec 31,2020 Sep 30,2020 Dec 31,2019 Sep 30,2020 Dec 31,2019
Cash and cash equivalents$633,142  769,879  330,961  (136,737) 302,181 
Debt securities, available-for-sale5,337,814  4,125,548  2,575,252  1,212,266  2,762,562 
Debt securities, held-to-maturity189,836  193,509  224,611  (3,673) (34,775)
Total debt securities5,527,650  4,319,057  2,799,863  1,208,593  2,727,787 
Loans receivable         
Residential real estate802,508  862,614  926,388  (60,106) (123,880)
Commercial real estate6,315,895  6,201,817  5,579,307  114,078  736,588 
Other commercial3,054,817  3,593,322  2,094,254  (538,505) 960,563 
Home equity636,405  646,850  617,201  (10,445) 19,204 
Other consumer313,071  314,128  295,660  (1,057) 17,411 
Loans receivable11,122,696  11,618,731  9,512,810  (496,035) 1,609,886 
Allowance for credit losses(158,243) (164,552) (124,490) 6,309  (33,753)
Loans receivable, net10,964,453  11,454,179  9,388,320  (489,726) 1,576,133 
Other assets1,378,961  1,382,952  1,164,855  (3,991) 214,106 
Total assets$18,504,206  17,926,067  13,683,999  578,139  4,820,207 

Total debt securities of $5.528 billion at December 31, 2020 increased $1.209 billion, or 28 percent, during the current quarter and increased $2.728 billion, or 97 percent, from the prior year end. The Company continues to purchase debt securities with excess liquidity from the increase in core deposits and SBA forgiveness of PPP loans. Debt securities represented 30 percent of total assets at December 31, 2020 compared to 24 percent of total assets at September 30, 2020 and 20 percent of total assets at December 31, 2019.

The loan portfolio of $11.123 billion decreased $496 million, or 4 percent, during the current quarter which was driven by the SBA forgiveness of the PPP loans. Excluding the decrease in the PPP loans, the loan portfolio increased $43.2 million, or 42 basis points, during the current quarter with the largest increase in commercial real estate loans which increased $114 million, or 2 percent. Excluding the PPP loans and the SBAZ acquisition, the loan portfolio increased $249 million, or 3 percent, from the prior year end with the largest increase in commercial real estate loans which increased $401 million, or 7 percent.

Credit Quality Summary

 At or for the Yearended At or for the NineMonths ended At or for the Yearended
(Dollars in thousands)Dec 31,2020 Sep 30,2020 Dec 31,2019
Allowance for credit losses     
Balance at beginning of period$124,490  124,490  131,239 
Impact of adopting CECL3,720  3,720   
Acquisitions49  49   
Provision for credit losses37,637  39,165  57 
Charge-offs(13,808) (7,865) (15,178)
Recoveries6,155  4,993  8,372 
Balance at end of period$158,243  164,552  124,490 
Other real estate owned$1,744  5,361  5,142 
Accruing loans 90 days or more past due1,725  2,952  1,412 
Non-accrual loans31,964  36,350  30,883 
Total non-performing assets$35,433  44,663  37,437 
Non-performing assets as a percentage of subsidiary assets0.19% 0.25% 0.27%
Allowance for credit losses as a percentage of non-performing loans470% 419% 385%
Allowance for credit losses as a percentage of total loans1.42% 1.42% 1.31%
Net charge-offs as a percentage of total loans0.07% 0.03% 0.07%
Accruing loans 30-89 days past due$22,721  17,631  23,192 
Accruing troubled debt restructurings$42,003  39,999  34,055 
Non-accrual troubled debt restructurings$3,507  7,579  3,346 
U.S. government guarantees included in non-performing assets$3,011  4,411  1,786 

Non-performing assets of $35.4 million at December 31, 2020 decreased $9.2 million, or 21 percent, over the prior quarter and decreased $2.0 million, or 5 percent, over the prior year fourth quarter. Non-performing assets as a percentage of subsidiary assets at December 31, 2020 was 0.19 percent. Excluding the government guaranteed PPP loans, the non-performing assets as a percentage of subsidiary assets at December 31, 2020 was 0.20 percent, a decrease of 7 basis points from the prior quarter and from the prior year end. Early stage delinquencies (accruing loans 30-89 days past due) of $22.7 million at December 31, 2020 increased $5.1 million from the prior quarter and decreased $471 thousand from the prior year fourth quarter. Early stage delinquencies as a percentage of loans at December 31, 2020 was 0.20 percent, which was an increase of 5 basis points from prior quarter and a 4 basis points decrease from prior year fourth quarter. Excluding PPP loans, early stage delinquencies as a percentage of loans at December 31, 2020 was 0.22 percent, which was an increase of 5 basis points from prior quarter and a 2 basis points decrease from prior year fourth quarter.

During the current quarter, the Company reclassified the current year credit loss expense for unfunded loan commitments from non-interest expense to provision for credit losses in the income statement. The Company believes reporting the credit loss expense on unfunded loan commitments together with credit loss expense on the loan portfolio is more appropriate than reporting credit loss expense on unfunded loan commitments as non-interest expense.   The current quarter provision for credit loss benefit of $1.5 million included a provision for credit loss benefit of $1.5 million on the loan portfolio and a provision for credit loss benefit of $8 thousand on unfunded loan commitments.

The current quarter provision for credit loss benefit on loans was a decrease of $4.4 million from the prior quarter provision for credit loss expense of $2.9 million. The current year provision for credit loss expense on loans was $37.6 million and primarily attributable to provision for credit losses related to COVID-19 and an additional $4.8 million of provision for credit losses related to the SBAZ acquisition. The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at December 31, 2020 was 1.42 percent which remained unchanged compared to the prior quarter. Excluding the PPP loans, the ACL as percentage of loans was 1.55 percent compared to 1.62 percent in as of the prior quarter.

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

(Dollars in thousands)Provision for Credit Losses Loans NetCharge-Offs ACLas a Percentof Loans AccruingLoans 30-89Days Past Dueas a Percent ofLoans Non-PerformingAssets toTotal SubsidiaryAssets
Fourth quarter 2020$(1,528) $4,781 1.42% 0.20% 0.19%
Third quarter 20202,869  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%

Net charge-offs for the current quarter were $4.8 million compared to $826 thousand for the prior quarter and $1.0 million from the same quarter last year.   The current quarter increase was primarily isolated to one credit relationship. The increase in the current quarter 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. 

PPP Loans

 December 31, 2020
(Dollars in thousands)Number of PPP Loans Amount of PPP Loans Total LoansReceivable, Net of PPP Loans PPP Loans (Amount) as a Percent of Total LoansReceivable, Net of PPP Loans
Residential real estate $ 802,508 %
Commercial real estate and other commercial       
Real estate rental and leasing896 37,285 3,484,537 1.07%
Accommodation and food services1,200 108,273 657,770 16.46%
Healthcare1,389 210,349 835,642 25.17%
Manufacturing594 43,798 182,565 23.99%
Retail and wholesale trade1,166 99,504 471,282 21.11%
Construction1,607 128,101 758,308 16.89%
Other4,532 281,863 2,071,435 13.61%
Home equity and other consumer  949,476 %
Total11,384 $909,173 10,213,523 8.90%

During the current year, 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. During the current quarter, the Company actively worked with its customers to submit applications to the SBA for PPP loan forgiveness which resulted in a decrease of $539 million, or 37 percent, of the PPP loans.

The Company recognized $38.2 million of interest income (including deferred fees and costs) from the PPP loans in 2020, which included $14.0 million acceleration of net deferred fees in interest income resulting from the SBA forgiveness of loans. Net deferred fees remaining on the balance of PPP loans at December 31, 2020 were $17.6 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.

COVID-19 Bank Loan Modifications

 December 31, 2020 September 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 LoansReceivable, Net of PPP Loans Amount of Remaining Loan Modifications Loan Modifications (Amount) as a Percent of Total LoansReceivable, Net of PPP Loans
Residential real estate$802,508  4,322    4,322  0.54% $28,571  3.31%
Commercial real estate and other commercial             
Real estate rental and leasing3,484,537  39,329  3,984  43,313  1.24% 206,838  6.15%
Accommodation and food services657,770  8,151  13,903  22,054  3.35% 82,182  12.75%
Healthcare835,642  1,043  88  1,131  0.14% 43,253  5.23%
Manufacturing182,565  6,806  2,682  9,488  5.20% 18,559  9.61%
Retail and wholesale trade471,282  2,655    2,655  0.56% 15,853  3.36%
Construction758,308  927    927  0.12% 14,525  1.88%
Other2,071,435  216  10,039  10,255  0.50% 50,588  2.44%
Home equity and other consumer949,476  705    705  0.07% 5,767  0.60%
Total$10,213,523  64,154  30,696  94,850  0.93% $466,136  4.58%

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 second half of 2020, the majority of the modified loan deferral periods expired, and the loans returned to regular payment status. As of December 31, 2020, $94.9 million of the modifications, or 93 basis points of the $10.214 billion of loans, net of the PPP loans, remain in the deferral period, a reduction of $371 million in the current quarter and a reduction of $1.420 billion from the $1.515 billion of the original loan modifications in the second 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 December 31, 2020, the Company had $278 million in eligible loans benefiting from this grant program, which was 2.8 percent of total loans receivable, net of PPP loans. Given the unique nature of the Montana only grant program, the $278 million was not included in the Bank loan modifications presented above.

COVID-19 Higher Risk Industries - Enhanced Monitoring

 December 31, 2020 September 30, 2020
(Dollars in thousands)Enhanced Monitoring Total 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 LoansReceivable, Net of PPP Loans Amount of Remaining Loan Modifications Percent of Total Loans Receivable, Net of PPP Loans Loan Modifications (Amount) as a Percent of Enhanced Monitoring LoansReceivable, Net of PPP Loans
Hotel and motel$428,868 4.20% 6,074 7,958 14,032 3.27% $50,770 4.15% 12.02%
Restaurant154,055 1.51% 2,054 5,945 7,999 5.19% 19,152 1.37% 13.78%
Travel and tourism22,018 0.22%    % 5,002 0.19% 25.36%
Gaming14,220 0.14%    % 1,101 0.14% 7.59%
Oil and gas23,158 0.23% 494 941 1,435 6.20% 1,474 0.22% 6.65%
Total$642,319 6.29% 8,622 14,844 23,466 3.65% $77,499 6.08% 12.54%

Excluding the PPP loans, the Company has $642 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 December 31, 2020, $23.5 million, or 3.65 percent, of the loans in the higher risk industries have modifications which was a reduction of $54.0 million, or 70 percent, from the $77.5 million of modifications at the end of the prior quarter.   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)Dec 31,2020 Sep 30,2020 Dec 31,2019 Sep 30,2020 Dec 31,2019
Deposits         
Non-interest bearing deposits$5,454,539  5,479,311  3,696,627  (24,772) 1,757,912 
NOW and DDA accounts3,698,559  3,300,152  2,645,404  398,407  1,053,155 
Savings accounts2,000,174  1,864,143  1,485,487  136,031  514,687 
Money market deposit accounts2,627,336  2,557,294  1,937,141  70,042  690,195 
Certificate accounts978,779  979,857  958,501  (1,078) 20,278 
Core deposits, total14,759,387  14,180,757  10,723,160  578,630  4,036,227 
Wholesale deposits38,142  119,131  53,297  (80,989) (15,155)
Deposits, total14,797,529  14,299,888  10,776,457  497,641  4,021,072 
Repurchase agreements1,004,583  965,668  569,824  38,915  434,759 
Federal Home Loan Bank advances  7,318  38,611  (7,318) (38,611)
Other borrowed funds33,068  32,967  28,820  101  4,248 
Subordinated debentures139,959  139,918  139,914  41  45 
Other liabilities222,026  225,219  169,640  (3,193) 52,386 
Total liabilities$16,197,165  15,670,978  11,723,266  526,187  4,473,899 

Core deposits of $14.759 billion as of December 31, 2020 increased $579 million, or 4 percent, from the prior quarter. Excluding the SBAZ acquisition, core deposits increased $3.433 billion, or 32 percent, from the prior year end, with non-interest bearing deposits increasing $1.616 billion, or 44 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.   Non-interest bearing deposits were 37 percent of total core deposits at December 31, 2020 compared to 39 percent of total core deposits at September 30, 2020 and 34 percent at December 31, 2019.

Wholesale deposits of $38.1 million at December 31, 2020 decreased $81.0 million, or 68 percent, from the prior quarter and decreased $15.2 million, or 28 percent, from the prior year end. The remaining wholesale deposits at December 31, 2020 had contractual maturities. Federal Home Loan Bank (“FHLB”) advances were paid off as of December 31, 2020 which resulted in a decrease of $7.3 million from the prior quarter and a decrease of $38.6 million from the prior year. The reduction in wholesale deposits and FHLB advances were the result of the significant increase in core deposits which funded loans and debt security growth. Wholesale deposits and FHLB advances will continue to fluctuate as necessary for balance sheet growth and to supplement liquidity needs of the Company.

Stockholders’ Equity Summary

       $ Change from
(Dollars in thousands, except per share data)Dec 31,2020 Sep 30,2020 Dec 31,2019 Sep 30,2020 Dec 31,2019
Common equity$2,163,951  2,123,991  1,920,507  39,960  243,444 
Accumulated other comprehensive income143,090  131,098  40,226  11,992  102,864 
Total stockholders’ equity2,307,041  2,255,089  1,960,733  51,952  346,308 
Goodwill and core deposit intangible, net(569,522) (572,134) (519,704) 2,612  (49,818)
Tangible stockholders’ equity$1,737,519  1,682,955  1,441,029  54,564  296,490 
                
Stockholders’ equity to total assets 12.47% 12.58% 14.33%      
Tangible stockholders’ equity to total tangible assets 9.69% 9.70% 10.95%      
Book value per common share$24.18  23.63  21.25  0.55  2.93 
Tangible book value per common share$18.21  17.64  15.61  0.57  2.60 

Tangible stockholders’ equity of $1.738 billion at December 31, 2020 increased $54.6 million, or 3 percent, from the prior quarter and was primarily the result of earnings retention and an increase in other comprehensive income. Tangible stockholders’ equity increased $296 million over the prior year, 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 $909 million of PPP loans and $2.7 billion in debt securities.   Tangible book value per common share of $18.21 at the current quarter end increased $0.57 per share from the prior quarter and increased $2.60 per share from a year ago.

Cash DividendsOn December 29, 2020, the Company’s Board of Directors declared a special cash dividend of $0.15 per share, the 17th special dividend the Company has declared. The special dividend was payable on January 19, 2021 to shareholders of record on January 8, 2021. On November 18, 2020, the Company’s Board of Directors declared a quarterly cash dividend of $0.30 per share. The regular quarterly dividend was payable December 17, 2020 to shareholders of record on December 8, 2020. The dividend was the 143rd 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 MidCap 400® IndexDuring 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 December 31, 2020 Compared to September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019

Income Summary

 Three Months ended
(Dollars in thousands)Dec 31,2020 Sep 30,2020 Jun 30,2020 Mar 31,2020 Dec 31,2019
Net interest income         
Interest income$171,308  157,487  155,404  142,865  145,281 
Interest expense5,550  6,084  7,185  8,496  8,833 
Total net interest income165,758  151,403  148,219  134,369  136,448 
          
Non-interest income         
Service charges and other fees13,713  13,404  11,366  14,020  14,756 
Miscellaneous loan fees and charges2,293  2,084  1,682  1,285  1,379 
Gain on sale of loans26,214  35,516  25,858  11,862  10,135 
Gain on sale of investments124  24  128  863  257 
Other income2,360  2,639  2,190  5,242  1,890 
Total non-interest income44,704  53,667  41,224  33,272  28,417 
Total income210,462  205,070  189,443  167,641  164,865 
               
Net interest margin (tax-equivalent)4.03% 3.92% 4.12% 4.36% 4.45%
          
   $ Change from
(Dollars in thousands)  Sep 30,2020 Jun 30,2020 Mar 31,2020 Dec 31,2019
Net interest income         
Interest income  $13,821  15,904  28,443  26,027 
Interest expense  (534) (1,635) (2,946) (3,283)
Total net interest income  14,355  17,539  31,389  29,310 
          
Non-interest income         
Service charges and other fees  309  2,347  (307) (1,043)
Miscellaneous loan fees and charges  209  611  1,008  914 
Gain on sale of loans  (9,302) 356  14,352  16,079 
Gain on sale of investments  100  (4) (739) (133)
Other income  (279) 170  (2,882) 470 
Total non-interest income  (8,963) 3,480  11,432  16,287 
Total income  $5,392  21,019  42,821  45,597 

Net Interest IncomeThe current quarter net interest income of $166 million increased $14.4 million, or 9 percent, over the prior quarter and increased $29.3 million, or 21 percent, from the prior year fourth quarter. The current quarter interest income of $171 million increased $13.8 million, or 9 percent, compared to the prior quarter and increased $26.0 million, or 18 percent, over the prior year fourth quarter. These increases include increased income from commercial loans (primarily from the PPP loans) and increased income on debt securities.   The interest income (which included deferred fees and deferred costs) from the PPP loans was $21.5 million in the current quarter and $9.3 million in the prior quarter.

The current quarter interest expense of $5.6 million decreased $534 thousand, or 9 percent, over the prior quarter and decreased $3.3 million, or 37 percent, over the prior year fourth quarter primarily as result of a decrease in deposit rates and borrowing interest rates. During the current quarter, the total cost of funding (including non-interest bearing deposits) declined 2 basis points to 14 basis points compared to 16 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 16 basis points from the prior year fourth 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 4.03 percent compared to 3.92 percent in the prior quarter. The core net interest margin, excluding 3 basis points of discount accretion and 24 basis points increase from the PPP loans, was 3.76 percent compared to 4.02 in the prior quarter and 4.33 percent in the prior year fourth quarter. The core net interest margin decreased 11 basis points in the current quarter and decreased 57 basis points from the prior year fourth quarter due to a decrease in earning asset yields that outpaced the decrease in the total cost of funding along with a shift in the earning asset mix from higher yielding loans to lower yielding debt securities.

Non-interest IncomeNon-interest income for the current quarter totaled $44.7 million which was a decrease of $9.0 million, or 17 percent, over the prior quarter and an increase of $16.3 million, or 57 percent, over the same quarter last year. Service charges and other fees decreased $1.0 million from the prior year fourth quarter due to the decreased overdraft activity. Gain on the sale of loans of $26.2 million for the current quarter decreased $9.3 million, or 26 percent, compared to the prior quarter as a result of seasonal decreases, although remained at elevated levels as a result of the current low interest rate environment.   Gain on sale of loans increased $16.1 million, or 159 percent, from the prior year fourth quarter due to the significant increase in purchase and refinance activity driven by the decrease in interest rates.

Non-interest Expense Summary

 Three Months ended
(Dollars in thousands)Dec 31,2020 Sep 30,2020 Jun 30,2020 Mar 31,2020 Dec 31,2019
Compensation and employee benefits$70,540  64,866  57,981  59,660  55,543 
Occupancy and equipment9,728  9,369  9,357  9,219  9,149 
Advertising and promotions2,797  2,779  2,138  2,487  2,747 
Data processing5,211  5,597  5,042  5,282  4,972 
Other real estate owned550  186  75  112  609 
Regulatory assessments and insurance1,034  1,495  1,037  1,090  45 
Core deposit intangibles amortization2,612  2,612  2,613  2,533  2,566 
Other expenses18,715  16,469  16,521  15,104  19,621 
                
Total non-interest expense$111,187  103,373  94,764  95,487  95,252 
          
   $ Change from
(Dollars in thousands)  Sep 30,2020 Jun 30,2020 Mar 31,2020 Dec 31,2019
Compensation and employee benefits  $5,674  12,559  10,880  14,997 
Occupancy and equipment  359  371  509  579 
Advertising and promotions  18  659  310  50 
Data processing  (386) 169  (71) 239 
Other real estate owned  364  475  438  (59)
Regulatory assessments and insurance  (461) (3) (56) 989 
Core deposit intangibles amortization    (1) 79  46 
Other expenses  2,246  2,194  3,611  (906)
               
Total non-interest expense  $7,814  16,423  15,700  15,935 

Total non-interest expense of $111 million for the current quarter increased $7.8 million, or 8 percent, over the prior quarter and increased $16.0 million, or 17 percent, over the prior year fourth quarter. Compensation and employee benefits increased by $5.7 million, or 9 percent, from the prior quarter which was primarily driven by the increase in accrued expenses for employee benefits due to strong financial performance. Compensation and employee benefits increased $15.0 million, or 27 percent, from the prior year fourth quarter primarily due to an increased number of employees driven by acquisitions and organic growth, increased real estate commissions and increased performance-related compensation. Occupancy and equipment expense increased $579 thousand, or 6 percent, over the prior year fourth quarter primarily as a result of increased costs from acquisitions. Regulatory assessment and insurance decreased $461 thousand from the prior quarter primarily due to an accrual adjustment in the current quarter for waiver of the State of Montana regulatory semi-annual assessment for the second half of 2020. Regulatory assessment and insurance increased $989 thousand from the prior year fourth quarter primarily due to $1.3 million in Small Bank Assessment credits applied in the prior year fourth quarter which more than offset the decrease in the current quarter waiver from the State of Montana assessment.  

Other expenses of $18.7 million, increased $2.2 million, or 14 percent, from the prior quarter and decreased $906 thousand, or 5 percent, from the prior year fourth quarter. Current quarter other expenses included acquisition-related expenses of $501 thousand compared to $793 thousand in the prior quarter and $4.4 million in the prior year fourth quarter.

Federal and State Income Tax ExpenseTax expense during the fourth quarter of 2020 was $19.0 million, an increase of $196 thousand, or 1 percent, compared to the prior quarter and an increase of $6.7 million, or 55 percent, from the prior year fourth quarter. The effective tax rate in the current and prior quarter was 19 percent compared to 18 percent in the prior year fourth quarter.

Efficiency RatioThe efficiency ratio was 50.34 percent in the current quarter and 48.05 percent in the prior quarter. Excluding the impact from the PPP loans, the efficiency ratio would have been 55.96 percent in the current quarter, which was a 545 basis points increase from the prior quarter efficiency ratio of 50.51 percent and was the result of the decrease in gain on sale of loans and the increase in non-interest expense during the current quarter. Excluding the current year impact from the PPP loans, the current quarter efficiency ratio of 55.96 was an increase of 106 basis points the prior year fourth quarter efficiency ratio of 54.90 and was primarily the result of the increase in compensation costs that outpaced the increase in gain on sale of loans and net interest income.

Operating Results for Year Ended December 31, 2020Compared to December 31, 2019

Income Summary

 Year ended    
(Dollars in thousands)Dec 31,2020 Dec 31,2019 $ Change % Change
Net interest income       
Interest income$627,064  $546,177  $80,887  15%
Interest expense27,315  42,773  (15,458) (36)%
Total net interest income599,749  503,404  96,345  19%
        
Non-interest income       
Service charges and other fees52,503  67,934  (15,431) (23)%
Miscellaneous loan fees and charges7,344  5,313  2,031  38%
Gain on sale of loans99,450  34,064  65,386  192%
Gain on sale of investments1,139  14,415  (13,276) (92)%
Other income12,431  9,048  3,383  37%
Total non-interest income172,867  130,774  42,093  32%
Total Income$772,616  $634,178  $138,438  22%
          
Net interest margin (tax-equivalent)4.09% 4.39%    

Net Interest IncomeNet-interest income of $600 million for 2020 increased $96.3 million, or 19 percent, over 2019. Interest income of $627 million for the current year increased $80.9 million, or 15 percent, from the prior year and was primarily attributable to a $67.4 million increase in income from commercial loans, including $38.2 million from the PPP loans. Additionally, interest income on debt securities increased $14.1 million, or 17 percent, over the prior year which resulted from the increased volume of debt securities. Interest expense of $27.3 million for 2020 decreased $15.5 million, or 36 percent over the prior year primarily as a result of decreased higher cost FHLB advances combined with the decrease in the cost of deposits and borrowings. The total funding cost (including non-interest bearing deposits) for 2020 was 19 basis points, which decreased 20 basis points compared to 39 basis points in 2019.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during 2020 was 4.09 percent, a 30 basis points decrease from the net interest margin of 4.39 percent for 2019. The core net interest margin, excluding 3 basis points of discount accretion, 1 basis point of non-accrual interest was 4.05 compared to a core margin of 4.30 percent in the prior year. Although the Company was successful in reducing the total 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 and the shift in the earning asset mix to lower yielding debt securities. For the year, the 24 basis points increase in the fourth quarter net interest margin from the PPP loans offset the combined 24 basis points decrease in the net interest margin from the PPP loans that occurred in the second and third quarters of the current year.

Non-interest IncomeNon-interest income of $173 million for 2020 increased $42.1 million, or 32 percent, over last year. Service charges and other fees of $52.5 million for 2020 decreased $15.4 million, or 23 percent, from prior year as a result of a decrease in overdraft activity and the impact of the Durbin Amendment which outpaced the additional fees from increased customer accounts. 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. Miscellaneous loan fees increased $2.0 million, or 38 percent, driven by increased activity primarily in residential real estate. Gain on the sale of loans of $99.5 million for 2020, increased $65.4 million, or 192 percent, compared to the prior year as a result of a significant increase in purchase and refinance activity driven by the decrease in interest rates. Other income increased $3.4 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.

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

 Year ended    
(Dollars in thousands)Dec 31,2020 Dec 31,2019 $ Change % Change
Compensation and employee benefits$253,047  $222,753  $30,294  14%
Occupancy and equipment37,673  34,497  3,176  9%
Advertising and promotions10,201  10,621  (420) (4)%
Data processing21,132  17,392  3,740  22%
Other real estate owned923  1,105  (182) (16)%
Regulatory assessments and insurance4,656  3,771  885  23%
Loss on termination of hedging activities  13,528  (13,528) (100)%
Core deposit intangibles amortization10,370  8,485  1,885  22%
Other expenses66,809  62,775  4,034  6%
Total non-interest expense$404,811  $374,927  $29,884  8%

Total non-interest expense of $405 million for 2020 increased $29.9 million, or 8 percent, over the prior year. Compensation and employee benefits for 2020 increased $30.3 million, or 14 percent, from last year due to the increased number of employees from acquisitions and organic growth, increased real estate commissions, increased performance-related compensation 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 current year increased $3.2 million, or 9 percent from the prior year primarily from increased cost from acquisitions. Data processing expense for the current year increased $3.7 million, or 22 percent, from the prior year as a result of the increased costs from acquisitions along with increased investment in technology infrastructure. Regulatory assessment and insurance for the current year increased $885 thousand from the prior quarter primarily due to $2.5 million in Small Bank Assessment credits applied in 2019 that more than offset the $530 thousand in Small Bank credits applied in 2020 and the current year waiver of the State of Montana regulatory assessment. Other expenses of $66.8 million, increased $4.0 million, or 6 percent, from the prior year, including $1.9 million for third party consulting regarding improvements in technology, product and service offerings.   Acquisition-related expenses were $7.8 million in the current year compared to $8.5 million in the prior year.

The prior year $13.5 million loss on termination of hedging activities included a $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.

Provision for Credit LossesThe provision for credit losses was $39.8 million for 2020, including provision for credit losses of $37.6 million on the loan portfolio and $2.1 million of provision for credit losses on unfunded loan commitments. The provision for credit losses of $37.6 million on the loan portfolio in the current year increased $37.6 million over the $57 thousand prior year provision for credit losses on the loan portfolio which was primarily attributable to changes in the economic forecast related to COVID-19. Net charge-offs during the current year were $7.6 million compared to $6.8 million during the prior year.

Federal and State Income Tax ExpenseTax expense of $61.6 million in 2020 increased $13.0 million, or 27 percent, over the prior year same period. The effective tax rate for each year was 19 percent.

Efficiency RatioThe efficiency ratio was 49.97 percent for 2020. Excluding the impact from the PPP loans, the efficiency ratio would have been 53.70 percent. The prior year efficiency ratio was 57.78 and excluding the impact from the termination of the cash flow hedges and the accelerated stock compensation expense, the efficiency ratio would have been 54.79 percent. Excluding these adjustments, the current year efficiency ratio decreased 109 basis points from the prior year efficiency ratio which was driven primarily by the combined increased on gain on sale of loans and the increased net interest income that more than offset the decrease in service fee income from the Durbin Amendment and increased 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, January 29, 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 6941139. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/ghaqi5ja. 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 6941139 by February 12, 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: 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)Dec 31,2020 Sep 30,2020 Dec 31,2019
Assets     
Cash on hand and in banks$227,108  249,245  198,639 
Federal funds sold  590   
Interest bearing cash deposits406,034  520,044  132,322 
Cash and cash equivalents633,142  769,879  330,961 
Debt securities, available-for-sale5,337,814  4,125,548  2,575,252 
Debt securities, held-to-maturity189,836  193,509  224,611 
Total debt securities5,527,650  4,319,057  2,799,863 
Loans held for sale, at fair value166,572  147,937  69,194 
Loans receivable11,122,696  11,618,731  9,512,810 
Allowance for credit losses(158,243) (164,552) (124,490)
Loans receivable, net10,964,453  11,454,179  9,388,320 
Premises and equipment, net325,335  326,925  310,309 
Other real estate owned1,744  5,361  5,142 
Accrued interest receivable75,497  91,393  56,047 
Deferred tax asset    2,037 
Core deposit intangible, net55,509  58,121  63,286 
Goodwill514,013  514,013  456,418 
Non-marketable equity securities10,023  10,366  11,623 
Bank-owned life insurance123,763  123,095  109,428 
Other assets106,505  105,741  81,371 
Total assets$18,504,206  17,926,067  13,683,999 
Liabilities     
Non-interest bearing deposits$5,454,539  5,479,311  3,696,627 
Interest bearing deposits9,342,990  8,820,577  7,079,830 
Securities sold under agreements to repurchase1,004,583  965,668  569,824 
FHLB advances  7,318  38,611 
Other borrowed funds33,068  32,967  28,820 
Subordinated debentures139,959  139,918  139,914 
Accrued interest payable3,305  3,951  4,686 
Deferred tax liability23,860  17,227   
Other liabilities194,861  204,041  164,954 
Total liabilities16,197,165  15,670,978  11,723,266 
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 
Paid-in capital1,495,053  1,493,928  1,378,534 
Retained earnings - substantially restricted667,944  629,109  541,050 
Accumulated other comprehensive income143,090  131,098  40,226 
Total stockholders’ equity2,307,041  2,255,089  1,960,733 
Total liabilities and stockholders’ equity$18,504,206  17,926,067  13,683,999 

Glacier Bancorp, Inc.Unaudited Condensed Consolidated Statements of Operations

 Three Months ended Year ended
(Dollars in thousands, except per share data)Dec 31,2020 Sep 30,2020 Dec 31,2019 Dec 31,2020 Dec 31,2019
Interest Income         
Debt securities$27,388  25,381  20,904  99,616  85,504 
Residential real estate loans11,176  11,592  12,554  46,392  46,899 
Commercial loans121,956  109,514  100,301  436,497  369,107 
Consumer and other loans10,788  11,000  11,522  44,559  44,667 
Total interest income171,308  157,487  145,281  627,064  546,177 
Interest Expense         
Deposits3,500  3,952  6,101  17,620  23,280 
Securities sold under agreements to repurchase818  886  1,007  3,601  3,694 
Federal Home Loan Bank advances49  70  86  733  9,023 
Other borrowed funds173  173  92  646  215 
Subordinated debentures1,010  1,003  1,547  4,715  6,561 
Total interest expense5,550  6,084  8,833  27,315  42,773 
Net Interest Income165,758  151,403  136,448  599,749  503,404 
Provision for credit losses(1,535) 5,186    39,765  57 
Net interest income after provision for credit losses167,293  146,217  136,448  559,984  503,347 
Non-Interest Income         
Service charges and other fees13,713  13,404  14,756  52,503  67,934 
Miscellaneous loan fees and charges2,293  2,084  1,379  7,344  5,313 
Gain on sale of loans26,214  35,516  10,135  99,450  34,064 
Gain on sale of debt securities124  24  257  1,139  14,415 
Other income2,360  2,639  1,890  12,431  9,048 
Total non-interest income44,704  53,667  28,417  172,867  130,774 
Non-Interest Expense         
Compensation and employee benefits70,540  64,866  55,543  253,047  222,753 
Occupancy and equipment9,728  9,369  9,149  37,673  34,497 
Advertising and promotions2,797  2,779  2,747  10,201  10,621 
Data processing5,211  5,597  4,972  21,132  17,392 
Other real estate owned550  186  609  923  1,105 
Regulatory assessments and insurance1,034  1,495  45  4,656  3,771 
Loss on termination of hedging activities        13,528 
Core deposit intangibles amortization2,612  2,612  2,566  10,370  8,485 
Other expenses18,715  16,469  19,621  66,809  62,775 
Total non-interest expense111,187  103,373  95,252  404,811  374,927 
Income Before Income Taxes100,810  96,511  69,613  328,040  259,194 
Federal and state income tax expense18,950  18,754  12,203  61,640  48,650 
Net Income$81,860  77,757  57,410  266,400  210,544 

Glacier Bancorp, Inc.Average Balance Sheets

 Three Months ended
 December 31, 2020 September 30, 2020
(Dollars in thousands)AverageBalance Interest &Dividends AverageYield/Rate AverageBalance Interest &Dividends AverageYield/Rate
Assets           
Residential real estate loans$984,942  $11,176  4.54% $1,010,503  $11,592  4.59%
Commercial loans 19,535,228  123,327  5.15% 9,636,631  110,847  4.58%
Consumer and other loans951,379  10,788  4.51% 957,284  11,000  4.57%
Total loans 211,471,549  145,291  5.04% 11,604,418  133,439  4.57%
Tax-exempt investment securities 21,511,725  14,659  3.88% 1,379,577  13,885  4.03%
Taxable investment securities 43,838,896  15,957  1.66% 2,809,545  14,568  2.07%
Total earning assets16,822,170  175,907  4.16% 15,793,540  161,892  4.08%
Goodwill and intangibles570,771      572,759     
Non-earning assets853,518      794,165     
Total assets$18,246,459      $17,160,464     
Liabilities           
Non-interest bearing deposits$5,498,744  $  % $5,171,984  $  %
NOW and DDA accounts3,460,923  607  0.07% 3,218,536  642  0.08%
Savings accounts1,935,476  162  0.03% 1,804,438  166  0.04%
Money market deposit accounts2,635,653  1,052  0.16% 2,453,659  1,161  0.19%
Certificate accounts984,100  1,629  0.66% 981,385  1,936  0.78%
Total core deposits14,514,896  3,450  0.09% 13,630,002  3,905  0.11%
Wholesale deposits 5100,329  50  0.20% 86,852  47  0.22%
FHLB advances6,540  49  2.93% 21,273  70  1.30%
Repurchase agreements and other borrowed funds1,142,199  2,001  0.70% 1,049,002  2,062  0.78%
Total funding liabilities15,763,964  5,550  0.14% 14,787,129  6,084  0.16%
Other liabilities199,771      120,294     
Total liabilities15,963,735      14,907,423     
Stockholders’ Equity           
Common stock954      954     
Paid-in capital1,494,422      1,493,353     
Retained earnings657,906      622,099     
Accumulated other comprehensive income129,442      136,635     
Total stockholders’ equity2,282,724      2,253,041     
Total liabilities and stockholders’ equity$18,246,459      $17,160,464     
Net interest income (tax-equivalent)  $170,357      $155,808   
Net interest spread (tax-equivalent)    4.02%     3.92%
Net interest margin (tax-equivalent)    4.03%     3.92%

______________________________1 Includes tax effect of $1.4 million and $1.3 million on tax-exempt municipal loan and lease income for the three months ended December 31, 2020 and September 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 $3.0 million and $2.8 million on tax-exempt debt securities income for the three months ended December 31, 2020 and September 30, 2020, respectively.4 Includes tax effect of $266 thousand and $266 thousand on federal income tax credits for the three months ended December 31, 2020 and September 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
 December 31, 2020 December 31, 2019
(Dollars in thousands)AverageBalance Interest &Dividends AverageYield/Rate AverageBalance Interest &Dividends AverageYield/Rate
Assets           
Residential real estate loans$984,942  $11,176  4.54% $1,010,174  $12,554  4.97%
Commercial loans 19,535,228  123,327  5.15% 7,617,702  101,619  5.29%
Consumer and other loans951,379  10,788  4.51% 911,942  11,522  5.01%
Total loans 211,471,549  145,291  5.04% 9,539,818  125,695  5.23%
Tax-exempt debt securities 31,511,725  14,659  3.88% 853,524  8,983  4.21%
Taxable debt securities 43,838,896  15,957  1.66% 2,064,755  14,033  2.72%
Total earning assets16,822,170  175,907  4.16% 12,458,097  148,711  4.74%
Goodwill and intangibles570,771      521,405     
Non-earning assets853,518      667,505     
Total assets$18,246,459      $13,647,007     
Liabilities           
Non-interest bearing deposits$5,498,744  $  % $3,741,622  $  %
NOW and DDA accounts3,460,923  607  0.07% 2,596,029  1,159  0.18%
Savings accounts1,935,476  162  0.03% 1,486,387  265  0.07%
Money market deposit accounts2,635,653  1,052  0.16% 1,947,102  1,710  0.35%
Certificate accounts984,100  1,629  0.66% 958,133  2,609  1.08%
Total core deposits14,514,896  3,450  0.09% 10,729,273  5,743  0.21%
Wholesale deposits 5100,329  50  0.20% 72,539  358  1.96%
FHLB advances6,540  49  2.93% 15,601  86  2.18%
Repurchase agreements and other borrowed funds1,142,199  2,001  0.70% 703,391  2,646  1.49%
Total funding liabilities15,763,964  5,550  0.14% 11,520,804  8,833  0.30%
Other liabilities199,771      164,285     
Total liabilities15,963,735      11,685,089     
Stockholders’ Equity           
Common stock954      922     
Paid-in capital1,494,422      1,377,013     
Retained earnings657,906      538,620     
Accumulated other comprehensive income129,442      45,363     
Total stockholders’ equity2,282,724      1,961,918     
Total liabilities and stockholders’ equity$18,246,459      $13,647,007     
Net interest income (tax-equivalent)  $170,357      $139,878   
Net interest spread (tax-equivalent)    4.02%     4.44%
Net interest margin (tax-equivalent)    4.03%     4.45%

______________________________1 Includes tax effect of $1.4 million and $1.3 million on tax-exempt municipal loan and lease income for the three months ended December 31, 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 $3.0 million and $1.8 million on tax-exempt debt securities income for the three months ended December 31, 2020 and 2019, respectively.4 Includes tax effect of $266 thousand and $276 thousand on federal income tax credits for the three months ended December 31, 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)

 Year ended
 December 31, 2020 December 31, 2019
(Dollars in thousands)AverageBalance Interest &Dividends Average Yield/Rate AverageBalance Interest &Dividends Average Yield/Rate
Assets           
Residential real estate loans$1,006,001  $46,392  4.61% $965,553  $46,899  4.86%
Commercial loans 19,057,210  441,762  4.88% 7,084,753  373,888  5.28%
Consumer and other loans948,379  44,559  4.70% 881,726  44,667  5.07%
Total loans 211,011,590  532,713  4.84% 8,932,032  465,454  5.21%
Tax-exempt debt securities 31,306,640  52,201  4.00% 917,454  38,195  4.16%
Taxable debt securities 42,746,855  59,027  2.15% 1,935,215  56,258  2.91%
Total earning assets15,065,085  643,941  4.27% 11,784,701  559,907  4.75%
Goodwill and intangibles564,603      410,561     
Non-earning assets784,075      611,788     
Total assets$16,413,763      $12,807,050     
Liabilities           
Non-interest bearing deposits$4,772,386  $  % $3,323,641  $  %
NOW and DDA accounts3,094,675  2,849  0.09% 2,447,037  4,196  0.17%
Savings accounts1,737,272  742  0.04% 1,420,682  1,022  0.07%
Money market deposit accounts2,356,508  5,077  0.22% 1,787,149  5,385  0.30%
Certificate accounts986,126  8,568  0.87% 923,840  9,257  1.00%
Total core deposits12,946,967  17,236  0.13% 9,902,349  19,860  0.20%
Wholesale deposits 578,283  384  0.49% 137,442  3,420  2.49%
FHLB advances79,277  733  0.91% 265,712  9,023  3.35%
Repurchase agreements and other borrowed funds955,205  8,962  0.94% 625,242  10,470  1.67%
Total funding liabilities14,059,732  27,315  0.19% 10,930,745  42,773  0.39%
Other liabilities162,079      123,002     
Total liabilities14,221,811      11,053,747     
Stockholders’ Equity           
Common stock949      883     
Paid-in capital1,474,359      1,208,772     
Retained earnings604,796      510,601     
Accumulated other comprehensive income111,848      33,047     
Total stockholders’ equity2,191,952      1,753,303     
Total liabilities and stockholders’ equity$16,413,763      $12,807,050     
Net interest income (tax-equivalent)  $616,626      $517,134   
Net interest spread (tax-equivalent)    4.08%     4.36%
Net interest margin (tax-equivalent)    4.09%     4.39%

______________________________1 Includes tax effect of $5.3 million and $4.8 million on tax-exempt municipal loan and lease income for the year ended December 31, 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 $10.5 million and $7.8 million on tax-exempt debt securities income for the year ended December 31, 2020 and 2019, respectively.4 Includes tax effect of $1.1 million and $1.1 million on federal income tax credits for the year ended December 31, 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)Dec 31,2020 Sep 30,2020 Dec 31,2019 Sep 30,2020 Dec 31,2019
Custom and owner occupied construction$157,529  $166,195  $143,479  (5)% 10%
Pre-sold and spec construction148,845  157,242  180,539  (5)% (18)%
Total residential construction306,374   323,437   324,018   (5)% (5)%
Land development102,930  96,814  101,592  6% 1%
Consumer land or lots123,747  122,019  125,759  1% (2)%
Unimproved land59,500  64,770  62,563  (8)% (5)%
Developed lots for operative builders30,449  30,871  17,390  (1)% 75%
Commercial lots60,499  62,445  46,408  (3)% 30%
Other construction555,375  537,105  478,368  3% 16%
Total land, lot, and other construction932,500   914,024   832,080   2% 12%
Owner occupied1,945,686  1,889,512  1,667,526  3% 17%
Non-owner occupied2,290,512  2,259,062  2,017,375  1% 14%
Total commercial real estate4,236,198   4,148,574   3,684,901   2% 15%
Commercial and industrial1,850,197   2,308,710   991,580   (20)% 87%
Agriculture721,490   747,145   701,363   (3)% 3%
1st lien1,228,867  1,256,111  1,186,889  (2)% 4%
Junior lien41,641  43,355  53,571  (4)% (22)%
Total 1-4 family1,270,508   1,299,466   1,240,460   (2)% 2%
Multifamily residential391,895   359,030   342,498   9% 14%
Home equity lines of credit657,626  651,546  617,900  1% 6%
Other consumer190,186  191,761  174,643  (1)% 9%
Total consumer847,812   843,307   792,543   1% 7%
States and political subdivisions575,647   617,624   533,023   (7)% 8%
Other156,647   205,351   139,538   (24)% 12%
Total loans receivable, including loans held for sale11,289,268  11,766,668  9,582,004  (4)% 18%
Less loans held for sale 1(166,572) (147,937) (69,194) 13% 141%
Total loans receivable$11,122,696  $11,618,731  $9,512,810  (4)% 17%

______________________________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 TypeNon-AccrualLoans AccruingLoans 90Daysor More PastDue OtherReal EstateOwned
(Dollars in thousands)Dec 31,2020 Sep 30,2020 Dec 31,2019 Dec 31,2020 Dec 31,2020 Dec 31,2020
Custom and owner occupied construction$247  249  185  247     
Pre-sold and spec construction    743       
Total residential construction247   249   928   247   —   —  
Land development342  450  852  93    249 
Consumer land or lots201  223  330  74    127 
Unimproved land294  417  1,181  214  34  46 
Commercial lots368  682  529      368 
Total land, lot and other construction1,205   1,772   2,892   381   34   790  
Owner occupied6,725  9,077  4,608  6,605    120 
Non-owner occupied4,796  4,879  8,229  4,607  189   
Total commercial real estate11,521   13,956   12,837   11,212   189   120  
Commercial and industrial6,689   8,571   5,297   5,982   152   555  
Agriculture6,313   8,972   2,288   6,164   149   —  
1st lien5,353  6,559  8,671  4,419  934   
Junior lien301  986  569  301     
Total 1-4 family5,654   7,545   9,240   4,720   934   —  
Multifamily residential—   —   201   —   —   —  
Home equity lines of credit2,939  2,903  2,618  2,531  135  273 
Other consumer572  407  837  466  100  6 
Total consumer3,511   3,310   3,455   2,997   235   279  
Other293   288   299   261   32   —  
Total$35,433  44,663  37,437  31,964  1,725  1,744 

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

 Accruing 30-89 Days Delinquent Loans,  by Loan Type% Change from
(Dollars in thousands)Dec 31,2020 Sep 30,2020 Dec 31,2019 Sep 30,2020 Dec 31,2019
Custom and owner occupied construction$788  $448  $637  76% 24%
Pre-sold and spec construction    148  n/m (100)%
Total residential construction788   448   785   76% — %
Land development202      n/m n/m
Consumer land or lots71  220  672  (68)% (89)%
Unimproved land357  381  558  (6)% (36)%
Developed lots for operative builders306    2  n/m 15,200%
Total land, lot and other construction936   601   1,232   56% (24)%
Owner occupied3,432  3,163  3,052  9% 12%
Non-owner occupied149  1,157  1,834  (87)% (92)%
Total commercial real estate3,581   4,320   4,886   (17)% (27)%
Commercial and industrial1,814   2,354   2,036   (23)% (11)%
Agriculture1,553   2,795   4,298   (44)% (64)%
1st lien6,677  2,589  4,711  158% 42%
Junior lien55  738  624  (93)% (91)%
Total 1-4 family6,732   3,327   5,335   102% 26%
Home equity lines of credit2,840  2,200  2,352  29% 21%
Other consumer1,054  789  1,187  34% (11)%
Total consumer3,894   2,989   3,539   30% 10%
States and political subdivisions2,358   —   —   n/m n/m
Other1,065   797   1,081   34% (1)%
Total$22,721  $17,631  $23,192  29% (2)%

______________________________n/m - not measurable

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

 Net Charge-Offs (Recoveries), Year-to-DatePeriod Ending, By Loan Type Charge-Offs Recoveries
(Dollars in thousands)Dec 31,2020 Sep 30,2020 Dec 31,2019 Dec 31,2020 Dec 31,2020
Custom and owner occupied construction$(9) (9) 98   —    
Pre-sold and spec construction(24) (19) (18) —   24  
Total residential construction(33) (28) 80   —   33  
Land development(106) (63) (30) —   106  
Consumer land or lots(221) (217) (138)   228  
Unimproved land(489) (489) (311) —   489  
Developed lots for operative builders—   —   (18) —   —  
Commercial lots(55) (5) (6) 22   77  
Other construction—   —   (142) —   —  
Total land, lot and other construction(871) (774) (645) 29   900  
Owner occupied(168) (82) (479) 57   225  
Non-owner occupied3,030   246   2,015   3,086   56  
Total commercial real estate2,862   164   1,536   3,143   281  
Commercial and industrial1,533   740   1,472   2,278   745  
Agriculture337   309   21   345    
1st lien69   (27) (12) 127   58  
Junior lien(211) (169) (303) 27   238  
Total 1-4 family(142) (196) (315) 154   296  
Multifamily residential(244) (244) —   —   244  
Home equity lines of credit101   79   19   350   249  
Other consumer307   233   603   604   297  
Total consumer408   312   622   954   546  
Other3,803   2,589   4,035   6,905   3,102  
Total$7,653   2,872   6,806   13,808   6,155  

Visit our website at www.glacierbancorp.com 

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Source: Glacier Bancorp, Inc.


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