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

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Glacier Bancorp reported a net income of $77.8 million for Q3 2020, a 51% increase from the prior year's $51.6 million. Diluted earnings per share rose to $0.81, up 42% from $0.57. The company saw a 1% organic increase in loan portfolio, totaling $11.619 billion, alongside a 7% increase in core deposits, amounting to $12.8 billion. The net charge-offs lowered to $826 thousand, while non-performing assets decreased to 0.25% of subsidiary assets. The quarterly dividend was declared at $0.30 per share, marking the 142nd consecutive payout.

Positive
  • Net income increased by $26.2 million, or 51%, to $77.8 million in Q3 2020.
  • Diluted earnings per share rose 42% to $0.81 compared to the same quarter last year.
  • Loan portfolio increased by $165 million, or 1%, and $1.654 billion, or 17%, year-over-year.
  • Core deposits grew by $868 million, or 7%, in Q3 2020.
  • Non-performing assets decreased to 0.25% of subsidiary assets.
Negative
  • Acquisition-related expenses of $793 thousand impacted Q3 2020 earnings.
  • Loan modifications related to COVID-19 remain at $466 million, affecting the stability of the loan portfolio.

3rd Quarter 2020 Highlights:

  • Net income of $77.8 million for the current quarter, an increase of $26.2 million, or 51 percent, over the prior year third quarter net income of $51.6 million. 

  • Current quarter diluted earnings per share of $0.81, an increase of 42 percent from the prior year third quarter diluted earnings per share of $0.57.

  • The loan portfolio organically increased $165 million, or 1 percent, in the current quarter and increased $1.626 billion, or 17 percent, from the prior year third quarter.

  • Core deposits increased $868 million, or 7 percent, during the current quarter, with non-interest bearing deposit growth of $436 million, or 9 percent.  Core deposits organically increased $2.8 billion, or 26 percent, compared to the prior year third quarter, with non-interest bearing deposit growth of $1.6 billion, or 41 percent.

  • Gain on sale of loans of $35.5 million, increased $9.7 million, or 37 percent, over the prior quarter and increased $25.1 million, or 243 percent, compared to the prior year third quarter.

  • Interest expense of $6.1 million decreased $1.1 million, or 15 percent, over the prior quarter and decreased $4.9 million, or 44 percent, compared to the prior year third quarter.

  • Bank loan modifications related to the coronavirus disease of 2019 (“COVID-19”) decreased $1.049 billion during the current quarter to $466 million, or 4.58 percent of loans excluding PPP loans. 

  • Non-performing assets as a percentage of subsidiary assets was 0.25 percent, which compared to 0.27 percent in the prior quarter and 0.40 percent in the prior year third quarter.

  • Early stage delinquencies (accruing 30-89 days past due) as a percentage of loans in the current quarter was 0.15 percent, which compared to 0.22 percent in the prior quarter and 0.31 percent in the prior year third quarter.

  • Declared a quarterly dividend of $0.30 per share, an increase of $0.01 per share or 3 percent over the prior quarter dividend.  The Company has declared 142 consecutive quarterly dividends and has increased the dividend 46 times.

Year-to-Date 2020 Highlights:

  • Net income of $185 million for the first nine months of 2020, an increase of $31.4 million, or 21 percent, over the first nine months of 2019 net income of $153 million. 

  • Diluted earnings per share of $1.95, an increase of 11 percent from the prior year first nine months diluted earnings per share of $1.76.

  • The Company originated U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) loans for businesses in its communities.  The Company originated 16,090 PPP loans in the amount of $1.472 billion. 

  • The loan portfolio organically grew $1.654 billion, or 17 percent, during the first nine months of 2020.  Excluding PPP loans, the loan portfolio organically increased $206 million, or 2 percent during the first nine months of 2020.

  • Core deposits organically increased $2.9 billion, or 27 percent, during the first nine months of 2020, with non-interest bearings deposit growth of $1.6 billion, or 44 percent.

  • Gain on sale of loans of $73.2 million, increased $49.3 million, or 206 percent, compared to the prior year first nine months.

  • Dividends declared of $0.88 per share, an increase of $0.06 per share, or 7 percent, over the prior year first nine months dividends of $0.82.

  • On February 29, 2020, the Company completed the acquisition of State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona with total assets of $744 million.

  • During the current year, S&P Dow Jones Indices selected the Company to transition from the S&P SmallCap 600® to the S&P MidCap 400®.

Financial Highlights 

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

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

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

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

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

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

On February 29, 2020, the Company completed the acquisition of State Bank Corp., the parent company of State Bank of Arizona, a community bank based in Lake Havasu City, Arizona (collectively, “SBAZ”).  SBAZ provides banking services to individuals and businesses in Arizona with ten banking offices located in Bullhead City, Cottonwood, Kingman, Lake Havasu City, Phoenix, Prescott Valley and Prescott.  Upon closing of the transaction, SBAZ merged into the Company's Foothills Bank division, which expanded the Company's footprint in Arizona to cover all major markets in the state and be a leading community bank in Arizona. 

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

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


Asset Summary

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

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

The loan portfolio of $11.619 billion increased $165 million, or 1 percent, during the current quarter with the largest increase in commercial real estate which increased $154 million, or 3 percent.  Excluding the PPP loans and the SBAZ acquisition, the loan portfolio increased $178 million, or 2 percent, since the prior year third quarter with the largest increase in commercial real estate loans which increased $318 million, or 6 percent.

Credit Quality Summary

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

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

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

Credit Quality Trends and Credit Loss Expense

(Dollars in thousands)Credit Loss Expense Net
Charge-Offs		 ACL
as a Percent
of Loans		 Accruing
Loans 30-89
Days Past Due
as a Percent of
Loans		 Non-Performing
Assets to
Total Subsidiary
Assets
Third quarter 2020$2,869  $826  1.42% 0.15% 0.25%
Second quarter 202013,552  1,233  1.42% 0.22% 0.27%
First quarter 202022,744  813  1.49% 0.41% 0.26%
Fourth quarter 2019—  1,045  1.31% 0.24% 0.27%
Third quarter 2019—  3,519  1.32% 0.31% 0.40%
Second quarter 2019—  732  1.46% 0.43% 0.41%
First quarter 201957  1,510  1.56% 0.44% 0.42%
Fourth quarter 20181,246  2,542  1.58% 0.41% 0.47%

Net charge-offs for the current quarter were $826 thousand compared to $1.2 million for the prior quarter and $3.5 million from the same quarter last year.  Loan portfolio growth, composition, average loan size, credit quality considerations, economic forecasts and other environmental factors will continue to determine the level of the credit loss expense. 

PPP Loans

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

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

COVID-19 Bank Loan Modifications

 September 30, 2020 June 30, 2020
(Dollars in thousands)Total Loans Receivable, Net of PPP Loans Amount of Unexpired Original  Loan Modifications Amount of
Re-deferral Loan Modifications		 Amount of
Remaining Loan
Modifications		 Loan Modifications (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans Amount of
Remaining Loan
Modifications		 Loan Modifications (Amount) as a Percent of Total Loans Receivable, Net of PPP Loans
Residential real estate$862,614  28,571  —  28,571  3.31% $66,395  7.35%
Commercial real estate
  and other commercial		             
Real estate rental
  and 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%
Healthcare826,809  29,136  14,117  43,253  5.23% 126,808  16.01%
Manufacturing193,216  15,263  3,296  18,559  9.61% 49,338  24.41%
Retail and wholesale
  trade		471,115  13,299  2,554  15,853  3.36% 46,623  9.78%
Construction774,069  13,337  1,188  14,525  1.88% 38,751  5.06%
Other2,075,812  23,146  27,442  50,588  2.44% 192,060  9.40%
Home equity and other
  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
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FAQ

What were Glacier Bancorp's net income and earnings per share for Q3 2020?

Glacier Bancorp reported a net income of $77.8 million and diluted earnings per share of $0.81 for Q3 2020.

How much did Glacier Bancorp's loan portfolio grow in Q3 2020?

The loan portfolio grew by $165 million, or 1%, during Q3 2020.

What was the increase in core deposits for Glacier Bancorp in Q3 2020?

Core deposits increased by $868 million, or 7%, in Q3 2020.

How did non-performing assets change for Glacier Bancorp in Q3 2020?

Non-performing assets decreased to 0.25% of subsidiary assets in Q3 2020.

What was the quarterly dividend declared by Glacier Bancorp for Q3 2020?

The quarterly dividend declared was $0.30 per share for Q3 2020.

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Glacier Bancorp Inc

NYSE:GBCI

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6.59B
112.84M
0.49%
85.8%
4.8%
Banks - Regional
State Commercial Banks
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United States of America
KALISPELL