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

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 outstanding	95,413,743				95,409,061			95,408,274			92,180,618			95,413,743			92,180,618
Average outstanding shares - basic	95,411,656				95,405,493			93,287,670			90,294,811			94,704,198			86,911,402
Average outstanding shares - diluted	95,442,576				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 ratio	49.16		%		49.29	%		52.55	%		65.95	%		50.21	%		58.82	%
Dividend payout ratio	37.04		%		43.28	%		63.04	%		50.88	%		45.13	%		46.59	%
Loan to deposit ratio	82.29		%		86.45	%		88.10	%		88.71	%		82.29	%		88.71	%
Number of full time equivalent employees	2,946				2,954			2,955			2,802			2,946			2,802
Number of locations	193				192			192			182			193			182
Number of ATMs	250				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 securities	142,174
Loans receivable	451,702
Non-interest bearing deposits	141,620
Interest bearing deposits	461,669
Borrowings	10,904

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-sale	4,125,548				3,533,950			2,575,252			2,459,036			591,598			1,550,296			1,666,512
Debt securities, held-to-maturity	193,509				203,275			224,611			234,992			(9,766	)		(31,102	)		(41,483	)
Total debt securities	4,319,057				3,737,225			2,799,863			2,694,028			581,832			1,519,194			1,625,029
Loans receivable
Residential real estate	862,614				903,198			926,388			936,877			(40,584	)		(63,774	)		(74,263	)
Commercial real estate	6,201,817				6,047,692			5,579,307			5,548,174			154,125			622,510			653,643
Other commercial	3,593,322				3,547,249			2,094,254			2,145,257			46,073			1,499,068			1,448,065
Home equity	646,850				654,392			617,201			615,781			(7,542	)		29,649			31,069
Other consumer	314,128				300,847			295,660			294,999			13,281			18,468			19,129
Loans receivable	11,618,731				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, net	11,454,179				11,290,869			9,388,320			9,415,553			163,310			2,065,859			2,038,626
Other assets	1,382,952				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 CECL	3,720					3,720				—				—
Acquisitions	49					49				—				—
Credit loss expense	39,165					36,296				57				57
Charge-offs	(7,865		)			(5,235	)			(15,178	)			(12,090	)
Recoveries	4,993					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 due	2,952					6,071				1,412				7,912
Non-accrual loans	36,350					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 assets	0.25			%		0.27		%		0.27		%		0.40		%
Allowance for credit losses as a percentage of non-performing loans	419			%		394		%		385		%		262		%
Allowance for credit losses as a percentage of total loans	1.42			%		1.42		%		1.31		%		1.32		%
Net charge-offs as a percentage of total loans	0.03			%		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 2020	13,552				1,233				1.42	%		0.22	%		0.27	%
First quarter 2020	22,744				813				1.49	%		0.41	%		0.26	%
Fourth quarter 2019	—				1,045				1.31	%		0.24	%		0.27	%
Third quarter 2019	—				3,519				1.32	%		0.31	%		0.40	%
Second quarter 2019	—				732				1.46	%		0.43	%		0.41	%
First quarter 2019	57				1,510				1.56	%		0.44	%		0.42	%
Fourth quarter 2018	1,246				2,542				1.58	%		0.41	%		0.47	%

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 leasing	1,221			64,647				3,361,074			1.92	%
Accommodation and food services	1,502			160,295				644,627			24.87	%
Healthcare	1,928			288,612				826,809			34.91	%
Manufacturing	830			80,483				193,216			41.65	%
Retail and wholesale trade	1,672			168,837				471,115			35.84	%
Construction	2,297			214,652				774,069			27.73	%
Other	6,640			470,891				2,075,812			22.68	%
Home equity and other consumer	—			—				960,978			—	%
Total	16,090			$	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 leasing	3,361,074				163,103				43,735			206,838			6.15	%		587,609				18.11	%
Accommodation and   food services	644,627				69,328				12,854			82,182			12.75	%		395,882				61.41	%
Healthcare	826,809				29,136				14,117			43,253			5.23	%		126,808				16.01	%
Manufacturing	193,216				15,263				3,296			18,559			9.61	%		49,338				24.41	%
Retail and wholesale   trade	471,115				13,299				2,554			15,853			3.36	%		46,623				9.78	%
Construction	774,069				13,337				1,188			14,525			1.88	%		38,751				5.06	%
Other	2,075,812				23,146				27,442			50,588			2.44	%		192,060				9.40	%
Home equity and other   consumer	960,978				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	%
Restaurant	138,944				1.37	%		12,977			6,175			19,152			13.78	%		76,632				1.50	%		50.91	%
Travel and tourism	19,726				0.19	%		4,605			397			5,002			25.36	%		7,845				0.21	%		37.79	%
Gaming	14,500				0.14	%		1,101			—			1,101			7.59	%		9,214				0.15	%		60.95	%
Oil and gas	22,178				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 accounts	3,300,152				3,113,863			2,645,404			2,592,483			186,289				654,748				707,669
Savings accounts	1,864,143				1,756,503			1,485,487			1,472,465			107,640				378,656				391,678
Money market deposit accounts	2,557,294				2,403,641			1,937,141			1,940,517			153,653				620,153				616,777
Certificate accounts	979,857				995,536			958,501			955,765			(15,679	)			21,356				24,092
Core deposits, total	14,180,757				13,313,247			10,723,160			10,733,996			867,510				3,457,597				3,446,761
Wholesale deposits	119,131				68,285			53,297			134,629			50,846				65,834				(15,498	)
Deposits, total	14,299,888				13,381,532			10,776,457			10,868,625			918,356				3,523,431				3,431,263
Repurchase agreements	965,668				881,227			569,824			558,752			84,441				395,844				406,916
Federal Home Loan Bank advances	7,318				37,963			38,611			8,707			(30,645	)			(31,293	)			(1,389	)
Other borrowed funds	32,967				32,546			28,820			14,808			421				4,147				18,159
Subordinated debentures	139,918				139,917			139,914			139,913			1				4				5
Other liabilities	225,219				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 income	131,098					129,909				40,226				48,095				1,189			90,872				83,003
Total stockholders’ equity	2,255,089					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 assets	12.58		%		13.03	%		14.33	%		14.24	%
Tangible stockholders’ equity to total tangible assets	9.70		%		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 expense	6,084				7,185			8,496			10,947			(1,101	)			(2,412	)			(4,863	)
Total net interest income	151,403				148,219			134,369			131,448			3,184				17,034				19,955
Non-interest income
Service charges and other fees	13,404				11,366			14,020			15,138			2,038				(616	)			(1,734	)
Miscellaneous loan fees and charges	2,084				1,682			1,285			1,775			402				799				309
Gain on sale of loans	35,516				25,858			11,862			10,369			9,658				23,654				25,147
Gain on sale of investments	24				128			863			13,811			(104	)			(839	)			(13,787	)
Other income	2,639				2,190			5,242			1,956			449				(2,603	)			683
Total non-interest income	53,667				41,224			33,272			43,049			12,443				20,395				10,618
Total income	205,070				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 equipment	9,369				9,357			9,219			8,731			12				150			638
Advertising and promotions	2,779				2,138			2,487			2,719			641				292			60
Data processing	5,597				5,042			5,282			4,466			555				315			1,131
Other real estate owned	186				75			112			166			111				74			20
Regulatory assessments and insurance	1,495				1,037			1,090			593			458				405			902
Loss on termination of hedging activities	—				—			—			13,528			—				—			(13,528	)
Core deposit intangibles amortization	2,612				2,613			2,533			2,360			(1	)			79			252
Other expenses	18,786				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 expense	21,765				33,940				(12,175		)			(36	)	%
Total net interest income	433,991				366,956				67,035					18		%
Non-interest income
Service charges and other fees	38,790				53,178				(14,388		)			(27	)	%
Miscellaneous loan fees and charges	5,051				3,934				1,117					28		%
Gain on sale of loans	73,236				23,929				49,307					206		%
Gain on sale of investments	1,015				14,158				(13,143		)			(93	)	%
Other income	10,071				7,158				2,913					41		%
Total non-interest income	128,163				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 equipment	27,945				25,348				2,597					10		%
Advertising and promotions	7,404				7,874				(470		)			(6	)	%
Data processing	15,921				12,420				3,501					28		%
Other real estate owned	373				496				(123		)			(25	)	%
Regulatory assessments and insurance	3,622				3,726				(104		)			(3	)	%
Loss on termination of hedging activities	—				13,528				(13,528		)			(100	)	%
Core deposit intangibles amortization	7,758				5,919				1,839					31		%
Other expenses	50,229				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 sold	590					—				—				—
Interest bearing cash deposits	520,044					334,929				132,322				172,761
Cash and cash equivalents	769,879					547,610				330,961				406,384
Debt securities, available-for-sale	4,125,548					3,533,950				2,575,252				2,459,036
Debt securities, held-to-maturity	193,509					203,275				224,611				234,992
Total debt securities	4,319,057					3,737,225				2,799,863				2,694,028
Loans held for sale, at fair value	147,937					115,345				69,194				100,441
Loans receivable	11,618,731					11,453,378				9,512,810				9,541,088
Allowance for credit losses	(164,552		)			(162,509	)			(124,490	)			(125,535	)
Loans receivable, net	11,454,179					11,290,869				9,388,320				9,415,553
Premises and equipment, net	326,925					326,005				310,309				307,590
Other real estate owned	5,361					4,743				5,142				7,148
Accrued interest receivable	91,393					77,363				56,047				63,294
Deferred tax asset	—					—				2,037				—
Core deposit intangible, net	58,121					60,733				63,286				65,852
Goodwill	514,013					513,355				456,418				456,422
Non-marketable equity securities	10,366					11,592				11,623				10,427
Bank-owned life insurance	123,095					122,388				109,428				108,814
Other assets	105,741					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 deposits	8,820,577					8,337,828				7,079,830				7,095,859
Securities sold under agreements to repurchase	965,668					881,227				569,824				558,752
FHLB advances	7,318					37,963				38,611				8,707
Other borrowed funds	32,967					32,546				28,820				14,808
Subordinated debentures	139,918					139,917				139,914				139,913
Accrued interest payable	3,951					4,211				4,686				4,435
Deferred tax liability	17,227					25,213				—
Other liabilities	204,041					200,324				164,954				170,151
Total liabilities	15,670,978					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 authorized	954					954				923				922
Paid-in capital	1,493,928					1,492,817				1,378,534				1,375,785
Retained earnings - substantially restricted	629,109					580,035				541,050				528,599
Accumulated other comprehensive income	131,098					129,909				40,226				48,095
Total stockholders’ equity	2,255,089					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 loans	11,592				12,098			11,526			12,156			35,216			34,345
Commercial loans	109,514				106,343			98,684			97,224			314,541			268,806
Consumer and other loans	11,000				11,130			11,641			11,658			33,771			33,145
Total interest income	157,487				155,404			142,865			142,395			455,756			400,896
Interest Expense
Deposits	3,952				4,587			5,581			6,214			14,120			17,179
Securities sold under agreements to repurchase	886				908			989			999			2,783			2,687
Federal Home Loan Bank advances	70				268			346			2,035			684			8,937
Other borrowed funds	173				172			128			47			473			123
Subordinated debentures	1,003				1,250			1,452			1,652			3,705			5,014
Total interest expense	6,084				7,185			8,496			10,947			21,765			33,940
Net Interest Income	151,403				148,219			134,369			131,448			433,991			366,956
Credit loss expense	2,869				13,552			22,744			—			39,165			57
Net interest income after credit loss expense	148,534				134,667			111,625			131,448			394,826			366,899
Non-Interest Income
Service charges and other fees	13,404				11,366			14,020			15,138			38,790			53,178
Miscellaneous loan fees and charges	2,084				1,682			1,285			1,775			5,051			3,934
Gain on sale of loans	35,516				25,858			11,862			10,369			73,236			23,929
Gain on sale of debt securities	24				128			863			13,811			1,015			14,158
Other income	2,639				2,190			5,242			1,956			10,071			7,158
Total non-interest income	53,667				41,224			33,272			43,049			128,163			102,357
Non-Interest Expense
Compensation and employee benefits	64,866				57,981			59,660			62,509			182,507			167,210
Occupancy and equipment	9,369				9,357			9,219			8,731			27,945			25,348
Advertising and promotions	2,779				2,138			2,487			2,719			7,404			7,874
Data processing	5,597				5,042			5,282			4,466			15,921			12,420
Other real estate owned	186				75			112			166			373			496
Regulatory assessments and insurance	1,495				1,037			1,090			593			3,622			3,726
Loss on termination of hedging activities	—				—			—			13,528			—			13,528
Core deposit intangibles amortization	2,612				2,613			2,533			2,360			7,758			5,919
Other expenses	18,786				19,898			11,545			15,603			50,229			43,154
Total non-interest expense	105,690				98,141			91,928			110,675			295,759			279,675
Income Before Income Taxes	96,511				77,750			52,969			63,822			227,230			189,581
Federal and state income tax expense	18,754				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 1	9,636,631				110,847				4.58	%		9,235,881				107,632				4.69	%
Consumer and other loans	957,284				11,000				4.57	%		957,798				11,130				4.67	%
Total loans 2	11,604,418				133,439				4.57	%		11,241,774				130,860				4.68	%
Tax-exempt investment securities 2	1,379,577				13,885				4.03	%		1,401,603				14,248				4.07	%
Taxable investment securities 4	2,809,545				14,568				2.07	%		2,266,707				14,730				2.60	%
Total earning assets	15,793,540				161,892				4.08	%		14,910,084				159,838				4.31	%
Goodwill and intangibles	572,759											575,296
Non-earning assets	794,165											797,403
Total assets	$	17,160,464										$	16,282,783
Liabilities
Non-interest bearing deposits	$	5,171,984			$	—			—	%		$	4,733,485			$	—			—	%
NOW and DDA accounts	3,218,536				642				0.08	%		3,018,706				687				0.09	%
Savings accounts	1,804,438				166				0.04	%		1,687,448				175				0.04	%
Money market deposit accounts	2,453,659				1,161				0.19	%		2,300,787				1,240				0.22	%
Certificate accounts	981,385				1,936				0.78	%		1,013,188				2,408				0.96	%
Total core deposits	13,630,002				3,905				0.11	%		12,753,614				4,510				0.14	%
Wholesale deposits 5	86,852				47				0.22	%		68,503				77				0.46	%
FHLB advances	21,273				70				1.30	%		182,061				268				0.58	%
Repurchase agreements and other borrowed funds	1,049,002				2,062				0.78	%		913,744				2,330				1.03	%
Total funding liabilities	14,787,129				6,084				0.16	%		13,917,922				7,185				0.21	%
Other liabilities	120,294											180,935
Total liabilities	14,907,423											14,098,857
Stockholders’ Equity
Common stock	954											954
Paid-in capital	1,493,353											1,492,230
Retained earnings	622,099											575,455
Accumulated other comprehensive income	136,635											115,287
Total stockholders’ equity	2,253,041											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 1	9,636,631				110,847				4.58	%		7,378,337				98,465				5.29	%
Consumer and other loans	957,284				11,000				4.57	%		906,148				11,658				5.10	%
Total loans 2	11,604,418				133,439				4.57	%		9,279,391				122,279				5.23	%
Tax-exempt debt securities 3	1,379,577				13,885				4.03	%		899,914				9,280				4.13	%
Taxable debt securities 4	2,809,545				14,568				2.07	%		1,917,045				14,250				2.97	%
Total earning assets	15,793,540				161,892				4.08	%		12,096,350				145,809				4.78	%
Goodwill and intangibles	572,759											429,191
Non-earning assets	794,165											672,550
Total assets	$	17,160,464										$	13,198,091
Liabilities
Non-interest bearing deposits	$	5,171,984			$	—			—	%		$	3,513,908			$	—			—	%
NOW and DDA accounts	3,218,536				642				0.08	%		2,473,375				1,091				0.17	%
Savings accounts	1,804,438				166				0.04	%		1,445,323				270				0.07	%
Money market deposit accounts	2,453,659				1,161				0.19	%		1,845,184				1,540				0.33	%
Certificate accounts	981,385				1,936				0.78	%		929,441				2,412				1.03	%
Total core deposits	13,630,002				3,905				0.11	%		10,207,231				5,313				0.21	%
Wholesale deposits 5	86,852				47				0.22	%		146,339				901				2.44	%
FHLB advances	21,273				70				1.30	%		222,449				2,035				3.58	%
Repurchase agreements and other borrowed funds	1,049,002				2,062				0.78	%		645,426				2,698				1.66	%
Total funding liabilities	14,787,129				6,084				0.16	%		11,221,445				10,947				0.39	%
Other liabilities	120,294											101,806
Total liabilities	14,907,423											11,323,251
Stockholders’ Equity
Common stock	954											903
Paid-in capital	1,493,353											1,292,182
Retained earnings	622,099											531,181
Accumulated other comprehensive    income	136,635											50,574
Total stockholders’ equity	2,253,041											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 1	8,896,708				318,435				4.78	%		6,905,151				272,269				5.27	%
Consumer and other loans	947,372				33,771				4.76	%		871,544				33,145				5.08	%
Total loans 2	10,857,152				387,422				4.77	%		8,727,211				339,759				5.21	%
Tax-exempt debt securities 3	1,237,779				37,542				4.04	%		938,998				29,212				4.15	%
Taxable debt securities 4	2,380,184				43,070				2.41	%		1,891,560				42,225				2.98	%
Total earning assets	14,475,115				468,034				4.32	%		11,557,769				411,196				4.76	%
Goodwill and intangibles	562,533											373,207
Non-earning assets	760,758											593,011
Total assets	$	15,798,406										$	12,523,987
Liabilities
Non-interest bearing deposits	$	4,528,500			$	—			—	%		$	3,182,783			$	—			—	%
NOW and DDA accounts	2,971,702				2,244				0.10	%		2,396,828				3,037				0.17	%
Savings accounts	1,670,722				580				0.05	%		1,398,539				757				0.07	%
Money market deposit accounts	2,262,781				4,025				0.24	%		1,733,245				3,675				0.28	%
Certificate accounts	986,807				6,940				0.94	%		912,283				6,648				0.97	%
Total core deposits	12,420,512				13,789				0.15	%		9,623,678				14,117				0.20	%
Wholesale deposits 5	70,880				332				0.63	%		159,314				3,062				2.57	%
FHLB advances	103,700				684				0.87	%		349,998				8,937				3.37	%
Repurchase agreements and other borrowed funds	892,418				6,960				1.04	%		598,907				7,824				1.75	%
Total funding liabilities	13,487,510				21,765				0.22	%		10,731,897				33,940				0.42	%
Other liabilities	149,423											109,090
Total liabilities	13,636,933											10,840,987
Stockholders’ Equity
Common stock	947											870
Paid-in capital	1,467,623											1,152,076
Retained earnings	586,963											501,158
Accumulated other comprehensive income	105,940											28,896
Total stockholders’ equity	2,161,473											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 construction	157,242					161,964					180,539					207,596					(3	)	%		(13	)	%		(24	)	%
Total residential construction	323,437					339,136					324,018					355,222					(5	)	%		—		%		(9	)	%
Land development	96,814					94,667					101,592					103,090					2		%		(5	)	%		(6	)	%
Consumer land or lots	122,019					120,015					125,759					128,668					2		%		(3	)	%		(5	)	%
Unimproved land	64,770					63,459					62,563					71,467					2		%		4		%		(9	)	%
Developed lots for operative builders	30,871					26,647					17,390					13,782					16		%		78		%		124		%
Commercial lots	62,445					60,563					46,408					64,904					3		%		35		%		(4	)	%
Other construction	537,105					477,922					478,368					443,947					12		%		12		%		21		%
Total land, lot, and other construction	914,024					843,273					832,080					825,858					8		%		10		%		11		%
Owner occupied	1,889,512					1,855,994					1,667,526					1,666,211					2		%		13		%		13		%
Non-owner occupied	2,259,062					2,238,586					2,017,375					2,023,262					1		%		12		%		12		%
Total commercial real estate	4,148,574					4,094,580					3,684,901					3,689,473					1		%		13		%		12		%
Commercial and industrial	2,308,710					2,342,081					991,580					1,009,310					(1	)	%		133		%		129		%
Agriculture	747,145					714,227					701,363					718,255					5		%		7		%		4		%
1st lien	1,256,111					1,227,514					1,186,889					1,208,096					2		%		6		%		4		%
Junior lien	43,355					47,121					53,571					53,931					(8	)	%		(19	)	%		(20	)	%
Total 1-4 family	1,299,466					1,274,635					1,240,460					1,262,027					2		%		5		%		3		%
Multifamily residential	359,030					343,870					342,498					350,622					4		%		5		%		2		%
Home equity lines of credit	651,546					655,492					617,900					612,775					(1	)	%		5		%		6		%
Other consumer	191,761					181,402					174,643					171,633					6		%		10		%		12		%
Total consumer	843,307					836,894					792,543					784,408					1		%		6		%		8		%
States and political subdivisions	617,624					581,673					533,023					471,599					6		%		16		%		31		%
Other	205,351					198,354					139,538					174,755					4		%		47		%		18		%
Total loans receivable, including   loans held for sale	11,766,668					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 construction	249				440			928			1,502			249			—			—
Land development	450				659			852			1,006			202			—			248
Consumer land or lots	223				427			330			828			61			—			162
Unimproved land	417				663			1,181			8,781			270			—			147
Commercial lots	682				529			529			575			153			—			529
Other construction	—				—			—			—			—			—			—
Total land, lot and other construction	1,772				2,278			2,892			11,190			686			—			1,086
Owner occupied	9,077				9,424			4,608			8,251			7,338			—			1,739
Non-owner occupied	4,879				5,482			8,229			9,271			4,879			—			—
Total commercial real estate	13,956				14,906			12,837			17,522			12,217			—			1,739
Commercial and industrial	8,571				5,039			5,297			6,135			7,614			396			561
Agriculture	8,972				11,087			2,288			3,469			7,011			1,961			—
1st lien	6,559				7,634			8,671			9,420			4,698			217			1,644
Junior lien	986				746			569			669			815			171			—
Total 1-4 family	7,545				8,380			9,240			10,089			5,513			388			1,644
Multifamily residential	—				92			201			206			—			—			—
Home equity lines of credit	2,903				3,048			2,618			3,553			2,550			80			273
Other consumer	407				412			837			1,098			241			108			58
Total consumer	3,310				3,460			3,455			4,651			2,791			188			331
Other	288				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 construction	448				—				785				57				n/m				(43	)	%		686		%
Land development	—				—				—				1,282				n/m				n/m				(100	)	%
Consumer land or lots	220				248				672				836				(11	)	%		(67	)	%		(74	)	%
Unimproved land	381				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 construction	601				812				1,232				2,268				(26	)	%		(51	)	%		(74	)	%
Owner occupied	3,163				1,512				3,052				2,949				109		%		4		%		7		%
Non-owner occupied	1,157				966				1,834				1,286				20		%		(37	)	%		(10	)	%
Total commercial real estate	4,320				2,478				4,886				4,235				74		%		(12	)	%		2		%
Commercial and industrial	2,354				4,127				2,036				12,780				(43	)	%		16		%		(82	)	%
Agriculture	2,795				12,084				4,298				1,290				(77	)	%		(35	)	%		117		%
1st lien	2,589				656				4,711				2,521				295		%		(45	)	%		3		%
Junior lien	738				160				624				715				361		%		18		%		3		%
Total 1-4 family	3,327				816				5,335				3,236				308		%		(38	)	%		3		%
Home equity lines of credit	2,200				3,330				2,352				4,162				(34	)	%		(6	)	%		(47	)	%
Other consumer	789				739				1,187				1,388				7		%		(34	)	%		(43	)	%
Total consumer	2,989				4,069				3,539				5,550				(27	)	%		(16	)	%		(46	)	%
States and political subdivisions	—				124				—				—				(100	)			n/m				n/m
Other	797				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 occupied	246					115				2,015				1,861				295			49
Total commercial real estate	164					66				1,536				1,826				347			183
Commercial and industrial	740					576				1,472				1,066				1,317			577
Agriculture	309					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 credit	79					24				19				(25	)			310			231
Other consumer	233					161				603				380				445			212
Total consumer	312					185				622				355				755			443
Other	2,589					1,727				4,035				3,243				5,075			2,486
Total	$	2,872				2,046				6,806				5,761				7,865			4,993

Visit our website at www.glacierbancorp.com

 

CONTACT: Randall M. Chesler, CEO

(406) 751-4722

Ron J. Copher, CFO

(406) 751-7706

Source: Glacier Bancorp, Inc.