Glacier Bancorp, Inc. Announces Results for the Quarter and Period Ended September 30, 2024

3rd Quarter 2024 Highlights:

• Diluted earnings per share for the current quarter was $0.45 per share, an increase of 15 percent from the prior quarter diluted earnings per share of $0.39 per share.
• Net income was $51.1 million for the current quarter, an increase of $6.3 million, or 14 percent, from the prior quarter net income of $44.7 million and a decrease of $1.4 million, or 3 percent, from the prior year third quarter net income of $52.4 million.
• The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 2.83 percent, an increase of 15 basis points from the prior quarter net interest margin of 2.68 percent.
• Net interest income was $180 million for the current quarter, an increase of $13.8 million, or 8 percent, from the prior quarter net interest income of $166 million and an increase of $13.2 million, or 8 percent, from the prior year third quarter net interest income of $167 million.
• The loan portfolio of $17.181 billion increased $329 million, or 2 percent, during the current quarter and organically increased $57.6 million, or 1 percent annualized, during the current quarter.
• Total core deposits of $20.711 billion, increased $613 million, or 3 percent, during the current quarter and organically increased $216 million, or 4 percent annualized, during the current quarter.
• Non-interest bearing deposits of $6.408 billion, increased $314 million, or 5 percent, during the current quarter and organically increased $221 million, or 14 percent annualized, during the current quarter.
• The loan yield of 5.69 percent in the current quarter increased 11 basis points from the prior quarter loan yield of 5.58 percent and increased 42 basis points from the prior year third quarter loan yield of 5.27 percent.
• The total cost of funding (including non-interest bearing deposits) of 1.79 percent in the current quarter decreased 1 basis point from the prior quarter total cost of funding of 1.80 percent.
• Stockholders’ equity of $3.245 billion increased $108 million, or 3 percent, during the current quarter and increased $370 million, or 13 percent, over the prior year third quarter.
• The Company declared a quarterly dividend of $0.33 per share. The Company has declared 158 consecutive quarterly dividends and has increased the dividend 49 times.
• The Company completed the acquisition and core system conversion of six Montana branch locations of Rocky Mountain Bank division (“RMB”) of HTLF Bank, a wholly owned subsidiary of Heartland Financial USA, Inc. with total assets of $403 million, total gross loans of $272 million and total deposits of $397 million.

Year-to-date 2024 Highlights:

• Net income for the first nine months of 2024 was $128 million, a decrease of $40.2 million, or 24 percent, from the prior year first nine months net income of $169 million.
• Interest income for the first nine months of 2024 was $843 million, an increase of $98.7 million, or 13 percent, over the $744 million of interest income for the first nine months of 2023.
• The loan portfolio increased $983 million, or 6 percent, during the first nine months of 2024 and organically increased $261 million, or 2 percent, during the first nine months of 2024.
• The $2.740 billion of FRB Bank Term Funding (“BTFP”) was paid off during the current year through a combination of Federal Home Loan Bank (“FHLB”) advances and cash.
• Dividends declared in the first nine months of 2024 were $0.99 per share.
• The Company completed the acquisition and core system conversion of Community Financial Group, Inc., the parent company of Wheatland Bank (collectively, “Wheatland”), a leading eastern Washington community bank headquartered in Spokane with total assets of $778 million.

Financial Summary  

KALISPELL, Mont., Oct. 24, 2024 (GLOBE NEWSWIRE) — Glacier Bancorp, Inc. (NYSE: GBCI) reported net income of $51.1 million for the current quarter, an increase of $6.3 million, or 14 percent from the prior quarter net income of $44.7 million and a decrease of $1.4 million, or 3 percent, from the $52.4 million of net income for the prior year third quarter. Diluted earnings per share for the current quarter was $0.45 per share, an increase of 15 percent from the prior quarter diluted earnings per share of $0.39 per share and a decrease of 4 percent from the prior year third quarter diluted earnings per share of $0.47. The decrease in net income compared to the prior year third quarter was due to the increase in funding costs and the increased costs associated with the acquisitions of Wheatland and RMB over the prior year third quarter. “Our positive business trends through the third quarter. We were very pleased to see solid earnings, margin and deposit growth,” said Randy Chesler, President and Chief Executive Officer. “We finalized the acquisition of the Rocky Mountain Bank Montana branches from Heartland and welcome the employees to the Glacier team.”

Net income for the nine months ended September 30, 2024 was $128 million, a decrease of $40.2 million, or 24 percent, from the $169 million net income for the first nine months of the prior year. Diluted earnings per share for the first nine months of 2024 was $1.13 per share, a decrease of $0.39 per share from the prior year first nine months diluted earnings per share of $1.52. The decrease in net income for the first nine months of the current year compared to the prior year first nine months was primarily due to the significant increase in funding costs. In addition, the current year-to-date results included increased operating costs and a $9.7 million provision for credit losses associated with the acquisitions of Wheatland and RMB.

On July 19, 2024, the Company completed the acquisition of six RMB branches in Montana. The branches have been combined with Glacier Bank divisions operating in Montana, including First Bank of Montana, First Security Bank of Bozeman, First Security Bank of Missoula, Valley Bank, and Western Security Bank. On January 31, 2024, the Company completed the acquisition of Wheatland, headquartered in Spokane, Washington. Wheatland had 14 branches in eastern Washington and was combined with the North Cascades Bank division under the name Wheatland Bank, division of Glacier Bank. The Wheatland Bank division now operates with a combined 23 branches in Central and Eastern Washington and is a Top 5 community bank by deposit share in Eastern Washington. The Company’s results of operations and financial condition include the Wheatland and RMB acquisitions beginning on the acquisition date of each. The following table discloses the preliminary fair value estimates of select classifications of assets and liabilities acquired:

Asset Summary

Total debt securities of $7.785 billion at September 30, 2024 decreased $115 million, or 1 percent, during the current quarter and decreased $510 million, or 6 percent, from the prior year third quarter. Debt securities represented 28 percent of total assets at September 30, 2024 compared to 30 percent at December 31, 2023 and 30 percent at September 30, 2023.

The loan portfolio of $17.181 billion at September 30, 2024 increased $329 million, or 2 percent, during the current quarter. Excluding the RMB acquisition, the loan portfolio organically increased $57.6 million, or 1 percent annualized, during the current quarter. Excluding the RMB and Wheatland acquisitions, the loan portfolio organically increased $261 million, or 2 percent, during the first nine months of 2024 and increased $324 million, or 2 percent, from the prior year third quarter.

Credit Quality Summary

Non-performing assets as a percentage of subsidiary assets at September 30, 2024 was 0.10 percent compared to 0.06 percent in the prior quarter and 0.15 percent in the prior year third quarter. Non-performing assets of $28.1 million at September 30, 2024 increased $10.1 million, or 56 percent, over the prior quarter and decreased $14.2 million, or 33 percent, over the prior year third quarter.

Early stage delinquencies (accruing loans 30-89 days past due) as a percentage of loans at September 30, 2024 were 0.33 percent compared to 0.29 percent for the prior quarter end and 0.09 percent for the prior year third quarter. Early stage delinquencies of $56.2 million at September 30, 2024 increased $6.5 million from the prior quarter and increased $41.0 million from prior year third quarter.

The current quarter credit loss expense of $8.0 million included $2.8 million of provision for credit losses on loans and $799 thousand of provision for credit losses on unfunded commitments from the acquisition of RMB. Excluding the acquisition of RMB, the current quarter credit loss expense was $4.4 million, including $4.2 million of credit loss expense from loans and $225 thousand of credit loss expense from unfunded loan commitments.

For the first nine months of the current year, the provision for credit losses of $19.8 million included $8.1 million of provision for credit losses on loans and $1.6 million of provision for credit losses on unfunded loan commitments from the acquisitions of Wheatland and RMB.

The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at September 30, 2024 was 1.19 percent and remained unchanged from the prior year end and the prior year third 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 for loans. 

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

Net charge-offs for the current quarter were $2.8 million compared to $2.9 million in the prior quarter and $2.2 million for the prior year third quarter. Net charge-offs of $2.8 million included $1.9 million in deposit overdraft net charge-offs and $815 thousand of net loan charge-offs.

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

Total core deposits of $20.711 billion at September 30, 2024 increased $613 million, or 3 percent, from the prior quarter and increased $786 million, or 4 percent, from the prior year end. Total core deposits organically increased $217 million, or 4 percent annualized, during the current quarter and decreased $227 million, or 1 percent, from the prior year end.

Total non-interest bearing deposits of $6.408 billion, increased $314 million, or 5 percent, from the prior quarter and increased $385 million, or 6 percent, from the prior year end. Non-interest bearing deposits organically increased $221 million, or 14 percent annualized, during the current quarter and increased $13.6 million, or 23 basis points, from the prior year end. Non-interest bearing deposits represented 31 percent of total deposits at June 30, 2024, compared to 30 percent at December 31, 2023 and 32 percent at September 30, 2023.

FHLB borrowings of $1.800 billion decreased $550 million, or 23 percent, during the current quarter. Upon maturity in the first quarter of 2024, the Company paid off its $2.740 billion BTFP borrowings with a combination of $2.140 billion in FHLB borrowings and cash.

Stockholders’ Equity Summary

Tangible stockholders’ equity of $2.139 billion at September 30, 2024 increased $68.1 million, or 3 percent, compared to the prior quarter and was primarily the result of a decrease in unrealized loss on the available-for-sale debt securities which was partially offset by the increase in goodwill and core deposit intangibles associated with the acquisition of RMB. Tangible stockholders’ equity at September 30, 2024 increased $136 million, or 7 percent, compared to the prior year end and was primarily due to $92.4 million of Company common stock issued for the acquisition of Wheatland and the decrease in the unrealized loss on the available-for-sale securities. The increase was partially offset by the increase in goodwill and core deposits associated with the acquisitions of Wheatland and RMB. Tangible book value per common share of $18.86 at the current quarter end increased $0.80 per share, or 4 percent, from the prior year end and increased $2.13 per share, or 13 percent, from the prior year third quarter.

Cash Dividends
On September 24, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.33 per share. The dividend was payable October 17, 2024 to shareholders of record on October 8, 2024. The dividend was the Company’s 158th consecutive regular dividend. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Net Interest Income
The current quarter interest income of $290 million increased $15.7 million, or 6 percent, over the prior quarter and increased $24.7 million, or 9 percent, over the prior year third quarter, with both increases being primarily due to the increase in the loan yields and the increase in average balances of the loan portfolio. The loan yield of 5.69 percent in the current quarter increased 11 basis points from the prior quarter loan yield of 5.58 percent and increased 42 basis points from the prior year third quarter loan yield of 5.27 percent.

The current quarter interest expense of $109 million increased $2.0 million, or 2 percent, over the prior quarter and was primarily attributable to the increase in average deposit balances. The current quarter interest expense increased $11.5 million, or 12 percent, over the prior year third quarter and was primarily the result of an increase in rates on deposits and borrowings. Core deposit cost (including non-interest bearing deposits) was 1.37 percent for the current quarter compared to 1.36 percent in the prior quarter and 1.03 percent for the prior year third quarter. The total cost of funding (including non-interest bearing deposits) of 1.79 percent in the current quarter decreased 1 basis point from the prior quarter. The current quarter cost of funds increased 21 basis points from the prior year third quarter which was primarily the result of the increased deposit rates.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 2.83 percent, an increase of 15 basis points from the prior quarter net interest margin of 2.68 percent and was primarily driven by an increase in loan yields. The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was an increase of 25 basis points from the prior year third quarter net interest margin of 2.58 percent and was primarily driven by an increase in loan yields which more than offset the total cost of funding. Core net interest margin excludes the impact from discount accretion and non-accrual interest. Excluding the 4 basis points from discount accretion, the core net interest margin was 2.79 percent in the current quarter compared to 2.63 percent in the prior quarter and 2.55 in the prior year third quarter. “The growth in the loan portfolio at higher yields was funded primarily by the remix of lower yield cash flow from the securities portfolio,” said Ron Copher, Chief Financial Officer. “In addition, the growth in non-interest bearing deposits and the reduction in wholesale funding contributed to the improvement in the current quarter net interest margin.”

Non-interest Income
Non-interest income for the current quarter totaled $34.7 million, which was an increase of $2.5 million, or 8 percent, over the prior quarter and an increase of $4.5 million, or 15 percent, over the prior year third quarter. Service charges and other fees of $20.6 million for the current quarter increased $1.2 million, or 6 percent, compared to the prior quarter and increased $1.3 million, or 7 percent, compared to the prior year third quarter. Gain on the sale of residential loans of $4.9 million for the current quarter increased $229 thousand, or 5 percent, compared to the prior quarter and increased $852 thousand, or 21 percent, from the prior year third quarter. Other income of $4.2 million increased $919 thousand, or 28 percent, over the prior quarter and increased $1.6 million, or 60 percent, over the prior year third quarter, with both increases being driven by a $1.2 million gain on the sale of repossessed property during the current quarter.

Non-interest Expense Summary

Total non-interest expense of $145 million for the current quarter increased $3.8 million, or 3 percent, over the prior quarter and increased $15.1 million, or 12 percent, over the prior year third quarter. Compensation and employee benefits increased $7.7 million, or 10 percent, from the prior year third quarter and was driven by annual salary increases, increased performance-related compensation and increases from the acquisitions of Wheatland and RMB.

Other expenses of $25.8 million increased $3.2 million, or 14 percent, from the prior quarter, which was attributable to several miscellaneous category increases including an increase of $1.2 million in outside consulting services. In addition, the current quarter other expenses included $586 thousand of gains from the sale of former branch facilities and disposal of fixed assets compared to $1.5 million in the prior quarter. Other expenses increased $5.5 million, or 27 percent, from the prior year third quarter as a result of several miscellaneous category increases including an increase of $2.7 million in outside consulting services and an increase of $1.6 million in acquisition-related expenses. Acquisition-related expense was $1.9 million in the current quarter compared to $1.8 million in the prior quarter and $279 thousand in the prior year third quarter.

Federal and State Income Tax Expense
Tax expense during the third quarter of 2024 was $11.2 million, an increase of $1.7 million, or 18 percent, compared to the prior quarter and a decrease of $567 thousand, or 5 percent, from the prior year third quarter. The effective tax rate in the current quarter was 17.9 percent compared to 17.5 percent in the prior quarter and 18.3 percent in the prior year third quarter.

Efficiency Ratio
The efficiency ratio was 64.92 percent in the current quarter compared to 67.97 percent in the prior quarter and 63.31 percent in the prior year third quarter. The decrease from the prior quarter was principally driven by the increase in net interest income that more than offset the increase in non-interest expense.

Net Interest Income
Net-interest income of $513 million for the first nine months of 2024 decreased $12.0 million, or 2 percent, over 2023 and was primarily driven by increased interest expense which outpaced the increase in interest income. Interest income of $843 million for 2024 increased $98.7 million, or 13 percent, from the prior year and was primarily attributable to the increase in the loan portfolio and an increase in loan yields. The loan yield was 5.58 percent during the first nine months of 2024, an increase of 44 basis points from the prior year first nine months loan yield of 5.14 percent.

Interest expense of $330 million for the first nine months of 2024 increased $111 million, or 51 percent, over the same period in the prior year and was primarily the result of higher interest rates on deposits. Core deposit cost (including non-interest bearing deposits) was 1.36 percent for the first nine months of 2024 compared to 0.62 percent for the same period in the prior year. The total funding cost (including non-interest bearing deposits) for the first nine months of 2024 was 1.81 percent, which was an increase of 59 basis points over the first nine months of the prior year funding cost of 1.22 percent.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during the first nine months of 2024 was 2.70 percent, a 9 basis points decrease from the net interest margin of 2.79 percent for the first nine months of the prior year. Excluding the 4 basis points from discount accretion and the 1 basis point from non-accrual interest, the core net interest margin was 2.65 percent in the first nine months of the current year compared to 2.77 percent in the prior year first nine months.

Non-interest Income  
Non-interest income of $96.9 million for the first nine months of 2024 increased $9.7 million, or 11 percent, over the same period last year. Gain on sale of residential loans of $12.9 million for the first nine months of 2024 increased by $3.0 million, or 30 percent, over the first nine months of the prior year. Other income of $11.2 million for the first nine months of 2024 increased $2.3 million, or 25 percent, over the same period last year and was primarily driven by a $1.2 million gain on the sale of repossessed property during the current quarter.

Non-interest Expense Summary

Total non-interest expense of $438 million for the first nine months of 2024 increased $42.3 million, or 11 percent, over the same period in the prior year. Compensation and employee benefits expense of $255 million in the first nine months of 2024 increased $17.7 million, or 7 percent, over the same period in the prior year and was driven by annual salary increases and the acquisitions of Wheatland and RMB. Data processing expenses of $27.7 million for the first nine months of 2024 increased $2.5 million, or 10 percent, from the same period in the prior year. Regulatory assessments and insurance expense of $18.3 million for the first nine months of 2024 increased $2.0 million, or 12 percent, over the same period in the prior year which was principally due to the accrual adjustment for the FDIC special assessment. Other expenses of $78.9 million for the first nine months of 2024 increased $15.3 million, or 24 percent, from the first nine months of the prior year and was primarily driven by an increase of $8.6 million of acquisition-related expenses, which was partially offset by gains of $3.1 million from the sale of former branch facilities and disposal of fixed assets.

Provision for Credit Losses
The provision for credit loss expense was $19.8 million for the first nine months of 2024, an increase of $8.0 million, or 68 percent, over the same period in the prior year and was primarily attributable to $9.7 million from the acquisitions of Wheatland and RMB. Net charge-offs for the first nine months of 2024 were $8.7 million compared to $6.6 million in the first nine months of 2023.

Federal and State Income Tax Expense
Tax expense of $24.4 million for the first nine months of 2024 decreased $12.5 million, or 34 percent, over the prior year. The effective tax rate for the first nine months of 2024 was 16.0 percent compared to 17.9 percent for the same period in the prior year. The decrease in tax expense and the resulting effective tax rate was the result of a combination of increased federal tax credits and a decrease in the pre-tax income.

Efficiency Ratio
The efficiency ratio was 68.98 percent for the first nine months of 2024 compared to 62.10 percent for the same period of 2023. The increase from the prior year was primarily attributable to the increase in interest expense in the current year that outpaced the increase in interest income and increased non-interest 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 the Company’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 other comparable words or phrases of a future or forward-looking nature. 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 based on assumptions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results (express or implied) or other expectations in the forward-looking statements, including those made in this news release:

• risks associated with lending and potential adverse changes in the credit quality of the Company’s loan portfolio;
• changes in monetary and fiscal policies, including interest rate policies of the Federal Reserve Board, which could adversely affect the Company’s net interest income and margin, the fair value of its financial instruments, profitability, and stockholders’ equity;
• legislative or regulatory changes, including increased FDIC insurance rates and assessments, changes in the review and regulation of bank mergers, or increased banking and consumer protection regulations, that may adversely affect the Company’s business and strategies;
• risks related to overall economic conditions, including the impact on the economy of an uncertain interest rate environment, inflationary pressures, and geopolitical instability, including the wars in Ukraine and the Middle East;
• risks associated with the Company’s ability to negotiate, complete, and successfully integrate any future acquisitions;
• costs or difficulties related to the completion and integration of pending or future acquisitions;
• impairment of the goodwill recorded by the Company in connection with acquisitions, which may have an adverse impact on earnings and capital;
• reduction in demand for banking products and services, whether as a result of changes in customer behavior, economic conditions, banking environment, or competition;
• deterioration of the reputation of banks and the financial services industry, which could adversely affect the Company’s ability to obtain and maintain customers;
• changes in the competitive landscape, including as may result from new market entrants or further consolidation in the financial services industry, resulting in the creation of larger competitors with greater financial resources;
• risks presented by 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 through acquisitions;
• risks associated with dependence on the Chief Executive Officer, the senior management team and the Presidents of Glacier Bank’s divisions;
• material failure, potential interruption or breach in security of the Company’s systems or changes in technological which could expose the Company to cybersecurity risks, fraud, system failures, or direct liabilities;
• risks related to natural disasters, including droughts, fires, floods, earthquakes, pandemics, and other unexpected events;
• success in managing risks involved in the foregoing; and
• effects of any reputational damage to the Company resulting from any of the foregoing.

The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

Conference Call Information
A conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, October 25, 2024. Please note that our conference call host no longer offers a general dial-in number. Investors who would like to join the call may now register by following this link to obtain dial-in instructions: https://register.vevent.com/register/BI32ee03ea65c34bd794e0027768d383d4. To participate via the webcast, log on to: https://edge.media-server.com/mmc/p/9bh88vfv.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. (NYSE: GBCI), a member of the Russell 2000® and the S&P MidCap 400® indices, is the parent company for Glacier Bank and its Bank divisions located across its eight state Western U.S. footprint: Altabank (American Fork, UT), Bank of the San Juans (Durango, CO), Citizens Community Bank (Pocatello, ID), Collegiate Peaks Bank (Buena Vista, CO), First Bank of Montana (Lewistown, MT), First Bank of Wyoming (Powell, WY), First Community Bank Utah (Layton, UT), First Security Bank (Bozeman, MT), First Security Bank of Missoula (Missoula, MT), First State Bank (Wheatland, WY), Glacier Bank (Kalispell, MT), Heritage Bank of Nevada (Reno, NV), Mountain West Bank (Coeur d’Alene, ID), The Foothills Bank (Yuma, AZ), Valley Bank of Helena (Helena, MT), Western Security Bank (Billings, MT), and Wheatland Bank (Spokane, WA).

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