Glacier Bancorp, Inc. Announces Results for the Quarter Ended December 31, 2017

4th Quarter 2017 Highlights:

  • Recognized a one-time tax expense of $19.7 million from the revaluation of the net deferred tax asset as a result of the Tax Cuts and Jobs Act (“Tax Act”). The Company believes that the financial results are more comparable excluding the impact of the revaluation of the net deferred tax asset, so we have included a Non-GAAP Financial Measures section within the earnings release that shows certain key business measures without the impact of the one-time tax adjustment.

  • Net income of $34.7 million for the current quarter, an increase of $3.7 million over the prior year fourth quarter net income of $31.0 million, excluding the impact of the Tax Act. Including the impact from the Tax Act, net income was $15.0 million.

  • Current quarter diluted earnings per share of $0.44, an increase of 7 percent from the prior year fourth quarter diluted earnings per share of $0.41, excluding the impact of the Tax Act. Including the impact from the Tax Act, diluted earnings per share was $0.19.

  • Net interest margin of 4.23 percent as a percentage of earning assets, on a tax equivalent basis, a 21 basis point increase over the 4.02 percent net interest margin in the fourth quarter of the prior year.

  • Declared and paid a regular quarterly dividend of $0.21 per share. The dividend was the 131st consecutive quarterly dividend.

  • The Company announced the signing of a definitive agreement to acquire Inter-Mountain Bancorp, Inc., the holding company for First Security Bank, a community bank in Bozeman, Montana, with total assets of $1.028 billion as of December 31, 2017.

  • Total assets of $9.7 billion at year end enabled the Company to delay the impact of the Durbin Amendment for one additional year.

Year 2017 Highlights:

  • Record net income of $136 million for 2017, an increase of $14.9 million, or 12 percent, over the prior year net income of $121 million, excluding the impact of the Tax Act. Including the impact from the Tax Act, net income was $116 million.

  • Diluted earnings per share of $1.75, an increase of 10 percent from the prior year diluted earnings per share of $1.59, excluding the impact of the Tax Act. Including the impact from the Tax Act, diluted earnings per share was $1.50.

  • Organic loan growth of $601 million, or 11 percent, for the current year.

  • Net interest margin of 4.12 percent as a percentage of earning assets, on a tax equivalent basis, a 10 basis point increase over the 4.02 percent net interest margin in the prior year.

Non-GAAP Financial Measures - Tax Cuts and Jobs Act
In addition to the results presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), this press release contains certain non-GAAP financial measures. The Company believes that providing these non-GAAP financial measures provides investors with information useful in understanding the Company's financial performance, performance trends, and financial position. While the Company uses these non-GAAP measures in its analysis of the Company's performance, this information should not be considered an alternative to measurements required by GAAP.

The following table provides a reconciliation of certain GAAP financial measures to non-GAAP financial measures. The reconciling item between the GAAP and non-GAAP financial measures was the current quarter one-time net tax expense of $19.7 million. The one-time net tax expense was driven by the Tax Act and the change in the current year federal marginal rate of 35 percent to 21 percent for future years, which resulted in this revaluation of its deferred tax assets and deferred tax liabilities (“net deferred tax asset”). The Company believes that the financial results are more comparable excluding the impact of the revaluation of the net deferred tax asset.

Three Months ended Year ended
(Dollars in thousands, except per share data)Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Dec 31,
2017
Dec 31,
2016
Net income (GAAP)$14,956 36,479 33,687 31,255 31,041 116,377 121,131
Tax Act adjustment (GAAP)19,699 19,699
Net income (non-GAAP)$34,655 36,479 33,687 31,255 31,041 136,076 121,131
Basic earnings per share (GAAP)$0.19 0.47 0.43 0.41 0.41 1.50 1.59
Tax Act adjustment (GAAP)0.25 0.25
Basic earnings per share (non-GAAP)$0.44 0.47 0.43 0.41 0.41 1.75 1.59
Diluted earnings per share (GAAP)$0.19 0.47 0.43 0.41 0.41 1.50 1.59
Tax Act adjustment (GAAP)0.25 0.25
Diluted earnings per share (non-GAAP)$0.44 0.47 0.43 0.41 0.41 1.75 1.59
Return on average assets
(annualized) (GAAP)
0.61% 1.46% 1.39% 1.35% 1.33% 1.20% 1.32%
Tax Act adjustment (GAAP)0.81% % % % % 0.21% %
Return on average assets
(annualized) (non-GAAP)
1.42% 1.46% 1.39% 1.35% 1.33% 1.41% 1.32%
Return on average equity
(annualized) (GAAP)
4.91% 11.87% 11.37% 11.19% 10.82% 9.80% 10.79%
Tax Act adjustment (GAAP)6.47% % % % % 1.66% %
Return on average equity
(annualized) (non-GAAP)
11.38% 11.87% 11.37% 11.19% 10.82% 11.46% 10.79%
Dividend payout ratio
(annualized) (GAAP)
110.53% 108.51% 48.84% 51.22% 121.95% 76.00% 69.18%
Tax Act adjustment (GAAP)(62.80)% % % % % (10.86)% %
Dividend payout ratio
(annualized) (non-GAAP)
47.73% 108.51% 48.84% 51.22% 121.95% 65.14% 69.18%
Effective tax rate (GAAP)67.69% 24.19% 26.11% 23.79% 23.74% 35.70% 24.67%
Tax Act adjustment (GAAP)(42.57)% % % % % (10.88)% %
Effective tax rate (non-GAAP)25.12% 24.19% 26.11% 23.79% 23.74% 24.82% 24.67%

Financial Highlights

At or for the Three Months ended At or for the Year ended
(Dollars in thousands, except per share and market data)Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Dec 31,
2017
Dec 31,
2016
Operating results
Net income 1$34,655 36,479 33,687 31,255 31,041 136,076 121,131
Basic earnings per share 1$0.44 0.47 0.43 0.41 0.41 1.75 1.59
Diluted earnings per share 1$0.44 0.47 0.43 0.41 0.41 1.75 1.59
Dividends declared per share 2$0.21 0.51 0.21 0.21 0.50 1.14 1.10
Market value per share
Closing$39.39 37.76 36.61 33.93 36.23 39.39 36.23
High$40.31 37.76 36.72 38.03 37.66 40.31 37.66
Low$36.01 31.50 32.06 32.47 27.50 31.50 22.19
Selected ratios and other data
Number of common stock shares
outstanding
78,006,956 78,006,956 78,001,890 76,619,952 76,525,402 78,006,956 76,525,402
Average outstanding shares - basic78,006,956 78,004,450 77,546,236 76,572,116 76,525,402 77,537,664 76,278,463
Average outstanding shares - diluted78,094,494 78,065,942 77,592,325 76,633,283 76,615,272 77,607,605 76,341,836
Return on average assets (annualized) 11.42% 1.46% 1.39% 1.35% 1.33% 1.41% 1.32%
Return on average equity (annualized) 111.38% 11.87% 11.37% 11.19% 10.82% 11.46% 10.79%
Efficiency ratio54.02% 53.44% 52.89% 55.57% 55.08% 53.94% 55.88%
Dividend payout ratio 1,247.73% 108.51% 48.84% 51.22% 121.95% 65.14% 69.18%
Loan to deposit ratio87.29% 84.43% 81.86% 78.91% 78.10% 87.29% 78.10%
Number of full time equivalent
employees
2,278 2,250 2,265 2,224 2,222 2,278 2,222
Number of locations145 145 145 142 142 145 142
Number of ATMs200 200 199 195 200 200 200


_______
1 Excludes a one-time revaluation of the deferred tax assets and deferred tax liabilities as a result of the Tax Act for the three months and year ended December 31, 2017. For additional information on the revaluation, see the “Non-GAAP Financial Measures - Tax Cuts and Jobs Act” section above.
2 Includes a special dividend declared of $0.30 per share for the three months ended September 30, 2017 and December 31, 2016 and for the years ended December 31, 2017 and 2016.

KALISPELL, Mt., Jan. 25, 2018 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $34.7 million for the current quarter, an increase of $3.7 million, or 12 percent, from the $31.0 million of net income for the prior year fourth quarter, excluding the impact of the Tax Act. Diluted earnings per share for the current quarter was $0.44 per share, an increase of $0.03, or 7 percent, from the prior year fourth quarter diluted earnings per share of $0.41, excluding the impact from the Tax Act. Included in the current quarter was $937 thousand of acquisition-related expenses. “2017 was an excellent year for the Company and we are extremely pleased to see our core business perform at these levels. We thank all of our customers for their continued confidence in us and our employees for turning in another record year,” said Randy Chesler, President and Chief Executive Officer.

Record net income for the year ended December 31, 2017 was $136 million, an increase of $14.9 million, or 12 percent, from the $121 million of net income for the prior year excluding the impact from the Tax Act. Diluted earnings per share for 2017 was $1.75 per share, an increase of $0.16, or 10 percent, from the diluted earnings per share of $1.59 for the same period in the prior year, excluding the impact from the Tax Act.

During the fourth quarter of 2017, the Company announced the signing of a definitive agreement to acquire Inter-Mountain Bancorp, Inc., the holding company for First Security Bank, a community bank in Bozeman, Montana (collectively, “FSB”). As of December 31, 2017, FSB had total assets of $1.028 billion, gross loans of $640 million and total deposits of $891 million. The acquisition marks the Company’s 20th acquisition since 2000 and its ninth announced transaction in the past five years. The acquisition has received the required regulatory approvals, is subject to other customary conditions of closing and is expected to be completed in February 2018.

During the second quarter of 2017, the Company announced the signing of a definitive agreement to acquire Columbine Capital Corp., the holding company for Collegiate Peaks Bank, a community bank in Buena Vista, Colorado (collectively, “Collegiate”). As of December 31, 2017, Collegiate had total assets of $533 million, gross loans of $346 million and total deposits of $464 million. The acquisition has received the required regulatory approvals, is subject to other customary conditions of closing and is expected to be completed in January 2018.

On April 30, 2017, the Company completed the acquisition of TFB Bancorp, Inc., the holding company for The Foothills Bank, a community bank based in Yuma, Arizona (collectively, “Foothills”). The Company’s results of operations and financial condition include the acquisition of Foothills from the acquisition date and the following table provides information on the fair value of selected classifications of assets and liabilities acquired:

(Dollars in thousands)April 30,
2017
Total assets$385,839
Investment securities25,420
Loans receivable292,529
Non-interest bearing deposits97,527
Interest bearing deposits199,233
Federal Home Loan Bank advances22,800


Asset Summary

$ Change from
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Sep 30,
2017
Dec 31,
2016
Cash and cash equivalents$200,004 220,210 152,541 (20,206) 47,463
Investment securities, available-for-sale1,778,243 1,886,517 2,425,477 (108,274) (647,234)
Investment securities, held-to-maturity648,313 655,128 675,674 (6,815) (27,361)
Total investment securities2,426,556 2,541,645 3,101,151 (115,089) (674,595)
Loans receivable
Residential real estate720,728 734,242 674,347 (13,514) 46,381
Commercial real estate3,577,139 3,503,976 2,990,141 73,163 586,998
Other commercial1,579,353 1,575,514 1,342,250 3,839 237,103
Home equity457,918 452,291 434,774 5,627 23,144
Other consumer242,686 243,410 242,951 (724) (265)
Loans receivable6,577,824 6,509,433 5,684,463 68,391 893,361
Allowance for loan and lease losses(129,568) (129,576) (129,572) 8 4
Loans receivable, net6,448,256 6,379,857 5,554,891 68,399 893,365
Other assets631,533 656,890 642,017 (25,357) (10,484)
Total assets$9,706,349 9,798,602 9,450,600 (92,253) 255,749

The Company successfully executed its strategy to stay below $10 billion in total assets as of year end to delay the impact of the Durbin Amendment for one additional year. The Company accomplished this strategy in part by redeploying investment cash flow selectively and selling securities into the higher yielding loan portfolio. The Durbin Amendment, which was passed as part of Dodd-Frank, establishes limits on the amount of interchange fees that can be charged to merchants for debit card processing and will reduce the Company’s service charge fee income in the future.

Total investment securities of $2.427 billion at December 31, 2017 decreased $115 million, or 5 percent, during the current quarter and decreased $675 million, or 22 percent, from the prior year fourth quarter. Investment securities represented 25 percent of total assets at December 31, 2017 compared to 33 percent of total assets at December 31, 2016.

The loan portfolio of $6.6 billion had seasonally slower growth in the fourth quarter of 2017, increasing $68.4 million, or 1 percent, during the quarter. The loan category with the largest increase was commercial real estate loans which increased $73.2 million, or 2 percent. Excluding the Foothills acquisition, the loan portfolio increased $601 million, or 11 percent, since the prior year end and primarily came from growth in commercial real estate and other commercial loans of $357 million and $209 million, respectively.

Credit Quality Summary

At or for the
Year ended
At or for the
Nine Months
ended
At or for the
Year ended
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Allowance for loan and lease losses
Balance at beginning of period$129,572 129,572 129,697
Provision for loan losses10,824 7,938 2,333
Charge-offs(19,331) (14,801) (11,496)
Recoveries8,503 6,867 9,038
Balance at end of period$129,568 129,576 129,572
Other real estate owned$14,269 14,359 20,954
Accruing loans 90 days or more past due6,077 3,944 1,099
Non-accrual loans44,833 46,770 49,332
Total non-performing assets$65,179 65,073 71,385
Non-performing assets as a percentage of subsidiary assets0.68% 0.67% 0.76%
Allowance for loan and lease losses as a percentage of non-performing loans255% 256% 257%
Allowance for loan and lease losses as a percentage of total loans1.97% 1.99% 2.28%
Net charge-offs as a percentage of total loans0.17% 0.12% 0.04%
Accruing loans 30-89 days past due$37,687 29,115 25,617
Accruing troubled debt restructurings$38,491 31,093 52,077
Non-accrual troubled debt restructurings$23,709 22,134 21,693
U.S. government guarantees included in non-performing assets$2,513 1,913 1,746

Non-performing assets at December 31, 2017 were $65.1 million, a decrease of $6.2 million, or 9 percent, from a year ago. Non-performing assets as a percentage of subsidiary assets at December 31, 2017 was 0.68 percent which was a decrease of 8 basis points from the prior year end of 0.76 percent. Early stage delinquencies (accruing loans 30-89 days past due) of $37.7 million at December 31, 2017 increased $8.6 million from the prior quarter and increased $12.1 million from the prior year end. The allowance for loan and lease losses (“allowance”) as a percent of total loans outstanding at December 31, 2017 was 1.97 percent, a decrease of 31 basis points from 2.28 percent at December 31, 2016, such decrease was driven by loan growth, stabilizing credit quality, and no allowance carried over from the Foothills acquisition as a result of the acquired loans recorded at fair value.

Credit Quality Trends and Provision for Loan Losses

(Dollars in thousands)Provision
for Loan
Losses
Net
Charge-Offs
(Recoveries)
ALLL
as a Percent
of Loans
Accruing
Loans 30-89
Days Past Due
as a Percent of
Loans
Non-Performing
Assets to
Total Subsidiary
Assets
Fourth quarter 2017$2,886 $2,894 1.97% 0.57% 0.68%
Third quarter 20173,327 3,628 1.99% 0.45% 0.67%
Second quarter 20173,013 2,362 2.05% 0.49% 0.70%
First quarter 20171,598 1,944 2.20% 0.67% 0.75%
Fourth quarter 20161,139 4,101 2.28% 0.45% 0.76%
Third quarter 2016626 478 2.37% 0.49% 0.84%
Second quarter 2016 (2,315) 2.46% 0.44% 0.82%
First quarter 2016568 194 2.50% 0.46% 0.88%

Net charge-offs for the current quarter were $2.9 million compared to $3.6 million for the prior quarter and $4.1 million from the same quarter last year. There was $2.9 million of current quarter provision for loan losses, compared to $3.3 million in the prior quarter and $1.1 million in the prior year fourth quarter. Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of the loan loss provision.

Supplemental information regarding credit quality and identification of the Company’s loan portfolio based on regulatory classification is provided in the exhibits at the end of this press release. The regulatory classification of loans is based primarily on collateral type while the Company’s loan segments presented herein are based on the purpose of the loan.

Liability Summary

$ Change from
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Sep 30,
2017
Dec 31,
2016
Deposits
Non-interest bearing deposits$2,311,902 2,355,983 2,041,852 (44,081) 270,050
NOW and DDA accounts1,695,246 1,733,353 1,588,550 (38,107) 106,696
Savings accounts1,082,604 1,081,056 996,061 1,548 86,543
Money market deposit accounts1,512,693 1,564,738 1,464,415 (52,045) 48,278
Certificate accounts817,259 846,005 948,714 (28,746) (131,455)
Core deposits, total7,419,704 7,581,135 7,039,592 (161,431) 380,112
Wholesale deposits160,043 186,019 332,687 (25,976) (172,644)
Deposits, total7,579,747 7,767,154 7,372,279 (187,407) 207,468
Repurchase agreements362,573 453,596 473,650 (91,023) (111,077)
Federal Home Loan Bank advances353,995 153,685 251,749 200,310 102,246
Other borrowed funds8,224 8,243 4,440 (19) 3,784
Subordinated debentures126,135 126,099 125,991 36 144
Other liabilities76,618 83,624 105,622 (7,006) (29,004)
Total liabilities$8,507,292 8,592,401 8,333,731 (85,109) 173,561

The Company reduced the amount of on-balance sheet deposits during the quarter as part of its strategy to stay below $10 billion in total assets. Core deposits decreased $161 million, or 2 percent, from the prior quarter, and decreased $380 million, or 5 percent, from the prior year end. The Company utilized a third party vendor to transfer $433 million of deposits off balance sheet as of December 31, 2017, an increase of $268 million over the prior quarter, or 162 percent, over the prior quarter. These deposits can be brought back onto the Company’s balance sheet at the Company’s discretion. Including the deposit accounts transferred, organic core deposits increased $478 million, or 7 percent, from December 31, 2016. At December 31, 2017, wholesale deposits were $160 million, a decrease of $26.0 million, or 14 percent, over the prior quarter and a decrease of $173 million, or 52 percent, over the prior year end.

Securities sold under agreements to repurchase (“repurchase agreements”) of $363 million at December 31, 2017 decreased $91.0 million, or 20 percent, from the prior quarter and decreased $111 million, or 23 percent, from the prior year end. Federal Home Loan Bank (“FHLB”) advances of $354 million at December 31, 2017, increased $200 million over prior quarter and increased $102 million over the prior year end. The increases were the result of strategically managing the deposit accounts to stay below $10 billion and utilizing FHLB advances to manage the daily liquidity needs for loan growth.

Stockholders’ Equity Summary

$ Change from
(Dollars in thousands, except per share data)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Sep 30,
2017
Dec 31,
2016
Common equity$1,201,036 1,201,534 1,124,251 (498) 76,785
Accumulated other comprehensive (loss) income(1,979) 4,667 (7,382) (6,646) 5,403
Total stockholders’ equity1,199,057 1,206,201 1,116,869 (7,144) 82,188
Goodwill and core deposit intangible, net(191,995) (192,609) (159,400) 614 (32,595)
Tangible stockholders’ equity$1,007,062 1,013,592 957,469 (6,530) 49,593
Stockholders’ equity to total assets 12.35% 12.31% 11.82%
Tangible stockholders’ equity to total tangible assets 10.58% 10.55% 10.31%
Book value per common share$15.37 15.46 14.59 (0.09) 0.78
Tangible book value per common share$12.91 12.99 12.51 (0.08) 0.40

Tangible stockholders’ equity of $1.007 billion at December 31, 2017 decreased $6.5 million compared to the prior quarter which was the result of a decrease in accumulated other comprehensive income. Tangible stockholders’ equity increased $49.6 million, or 5 percent, from a year ago, the result of earnings retention and $46.7 million of Company stock issued in connection with the Foothills acquisition; such increases more than offset the increase in goodwill and core deposit intangibles. Tangible book value per common share at quarter end decreased $0.08 per share from the prior quarter and increased $0.40 per share from a year ago.

Cash Dividend
On November 15, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.21 per share. The dividend was payable December 14, 2017 to shareholders of record on December 5, 2017. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.


Operating Results for Three Months Ended December 31, 2017
Compared to September 30, 2017, June 30, 2017, March 31, 2017 and December 31, 2016

Income Summary

Three Months ended
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Net interest income
Interest income$96,898 96,464 94,032 87,628 87,759
Interest expense7,072 7,652 7,774 7,366 7,214
Total net interest income89,826 88,812 86,258 80,262 80,545
Non-interest income
Service charges and other fees17,282 17,307 17,495 15,633 15,645
Miscellaneous loan fees and charges1,077 1,211 1,092 980 1,234
Gain on sale of loans7,408 9,141 7,532 6,358 9,765
(Loss) gain on sale of investments(115) 77 (522) (100) (757)
Other income2,057 3,449 2,059 2,818 2,127
Total non-interest income27,709 31,185 27,656 25,689 28,014
$117,535 119,997 113,914 105,951 108,559
Net interest margin (tax-equivalent)4.23% 4.11% 4.12% 4.03% 4.02%
$ Change from
(Dollars in thousands) Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Net interest income
Interest income $434 2,866 9,270 9,139
Interest expense (580) (702) (294) (142)
Total net interest income 1,014 3,568 9,564 9,281
Non-interest income
Service charges and other fees (25) (213) 1,649 1,637
Miscellaneous loan fees and charges (134) (15) 97 (157)
Gain on sale of loans (1,733) (124) 1,050 (2,357)
(Loss) gain on sale of investments (192) 407 (15) 642
Other income (1,392) (2) (761) (70)
Total non-interest income (3,476) 53 2,020 (305)
$(2,462) 3,621 11,584 8,976

Net Interest Income
In the current quarter, interest income of $96.9 million increased $434 thousand, or 45 basis points, from the prior quarter and increased $9.1 million, or 10 percent, over the prior year fourth quarter with both increases attributable to the increase in interest from commercial loans. Interest income on commercial loans increased $1.5 million, or 2 percent, from the prior quarter and increased $11.6 million, or 23 percent, from the prior year fourth quarter. As a result of the shrinking investment portfolio, interest income from investments decreased $1.3 million from the prior quarter and $3.0 million from the prior year fourth quarter.

The current quarter interest expense of $7.1 million decreased $580 thousand, or 8 percent, from the prior quarter and was driven primarily by the decrease in wholesale deposits. Current quarter interest expense decreased $142 thousand, or 2 percent, from the prior year fourth quarter. The total cost of funding (including non-interest bearing deposits) for the current quarter was 33 basis points compared to 35 basis points for the prior quarter and 36 basis points for the prior year fourth quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.23 percent compared to 4.11 percent in the prior quarter. The 12 basis points increase in the net interest margin was the result of an 11 basis points increase on the earning asset yield and a decrease of 2 basis points in cost of funds. The increase in earning asset yield was primarily driven by the continuing shift of lower yielding investments to higher yielding loans coupled with increased yields on loans and investments. The decrease in cost of funds was driven by the decrease in wholesale deposits which more than offset the increase in interest expense on FHLB advances. The current quarter net interest margin increased 21 basis points over the prior year fourth quarter net interest margin of 4.02 percent, due to the remix of earning assets to higher yielding loans and higher yielding earning assets.

Non-interest Income
Non-interest income for the current quarter totaled $27.7 million, a decrease of $3.5 million, or 11 percent, from the prior quarter and a decrease of $305 thousand, or 1 percent, over the same quarter last year. Service charges and other fees of $17.3 million, increased $1.6 million, or 10 percent, from the prior year fourth quarter primarily from the increased number of accounts. Gain on sale of loans for the current quarter decreased $1.7 million, or 19 percent, from the prior quarter as a result of a seasonal slowdown in purchase activity. Gain on sale of loans decreased $2.4 million, or 24 percent, from the prior year fourth quarter as a result of decreased refinance and purchase activity. Other income of $2.1 million, decreased $1.4 million, or 40 percent, over the prior quarter due to the decrease in gain on sale of other real estate owned (“OREO”). Gain on sale of OREO during the fourth quarter of 2017 was $62.7 thousand compared to $1.5 million in the prior quarter.

Non-interest Expense Summary

Three Months ended
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Compensation and employee benefits$40,465 41,297 39,498 39,246 38,826
Occupancy and equipment6,925 6,500 6,560 6,646 6,692
Advertising and promotions2,024 2,239 2,169 1,973 2,125
Data processing3,970 3,647 3,409 3,124 3,408
Other real estate owned377 817 442 273 2,076
Regulatory assessments and insurance1,069 1,214 1,087 1,061 1,048
Core deposit intangibles amortization614 640 639 601 608
Other expenses12,922 12,198 11,505 10,420 11,934
Total non-interest expense$68,366 68,552 65,309 63,344 66,717
$ Change from
(Dollars in thousands) Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Compensation and employee benefits $(832) 967 1,219 1,639
Occupancy and equipment 425 365 279 233
Advertising and promotions (215) (145) 51 (101)
Data processing 323 561 846 562
Other real estate owned (440) (65) 104 (1,699)
Regulatory assessments and insurance (145) (18) 8 21
Core deposit intangibles amortization (26) (25) 13 6
Other expense 724 1,417 2,502 988
Total non-interest expense $(186) 3,057 5,022 1,649

During 2016, the Company consolidated its Bank divisions’ individual core database systems into a single core database and re-issued debit cards with chip technology (the Core Consolidation Project or “CCP”). Expenses related to CCP were $741 thousand during the fourth quarter of 2016. Excluding CCP expenses, non-interest expense for the current quarter increased $2.4 million, or 4 percent, over the prior year fourth quarter.

Compensation and employee benefits increased by $1.6 million, or 4 percent, from the prior year fourth quarter due to salary increases and the increased number of employees from acquisitions. Data processing expense increased $323 thousand, or 9 percent, from the prior quarter and increased $562, or 16 percent, from the prior year fourth quarter. Other expenses increased $724 thousand, or 6 percent from the prior quarter and increased $988 thousand, or 8 percent, from the prior year fourth quarter with changes in several categories and the primary increase was from acquisition related expenses.

Federal and State Income Tax Expense
Tax expense during the fourth quarter of 2017 was $31.3 million, an increase $19.7 million, or 169 percent, over the prior quarter and an increase of $21.7 million, or 224 percent, over the prior year fourth quarter with the increases due to the revaluation of the Company’s net deferred tax asset. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to the years in which the temporary differences are expected to be recognized. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in net income in the period that includes the enactment date which occurred on December 22, 2017 with the enactment of the Tax Act. The current year federal marginal rate was 35 percent and will decrease to 21 percent in 2018. Excluding the impact of the Tax Act, the effective federal and state income tax rate for the Company was 25.1 percent in 2017 and is expected to decrease to a range of 17 to 18 percent during 2018 as a result of the Tax Act.

Efficiency Ratio
The current quarter efficiency ratio was 54.02 percent, a 58 basis points increase from the prior quarter efficiency ratio of 53.44 percent which was primarily driven by a seasonal slowing of residential refinance and purchase activity which caused a decrease in the gain on sale of loans. The current quarter efficiency ratio decreased 106 basis points from the prior year fourth quarter ratio of 55.08 percent and was attributable to the increase in net interest income primarily due to higher interest income on commercial loans. “The Bank divisions’ success in growing loans at higher yields while controlling funding costs throughout the year is reflected in the efficiency ratio improvement,” said Ron Copher, Chief Financial Officer.


Operating Results for Year ended December 31, 2017
Compared to December 31, 2016

Income Summary

Year ended
(Dollars in thousands)Dec 31,
2017
Dec 31,
2016
$ Change % Change
Net interest income
Interest income$375,022 $344,153 $30,869 9%
Interest expense29,864 29,631 233 1%
Total net interest income345,158 314,522 30,636 10%
Non-interest income
Service charges and other fees67,717 62,405 5,312 9%
Miscellaneous loan fees and charges4,360 4,613 (253) (5)%
Gain on sale of loans30,439 33,606 (3,167) (9)%
Loss on sale of investments(660) (1,463) 803 (55)%
Other income10,383 8,157 2,226 27%
Total non-interest income112,239 107,318 4,921 5%
$457,397 $421,840 $35,557 8%
Net interest margin (tax-equivalent)4.12% 4.02%

Net Interest Income
Interest income for the current year increased $30.9 million, or 9 percent, from the prior year and was attributable to a $38.4 million increase in income from commercial loans which more than offset the decrease of $8.4 million in interest income on investments.

Interest expense of $29.9 million for the current year increased $233 thousand over the prior year. Interest expense on deposits decreased $1.6 million, or 9 percent, and was due to the decrease in wholesale deposits. Interest expense on repurchase agreements, FHLB advances, and subordinated debt increased $1.8 million, or 16 percent, over the prior year and was primarily driven by the increase in interest rates. The total funding cost (including non-interest bearing deposits) for 2017 was 36 basis points compared to 37 basis points for 2016.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for 2017 was 4.12 percent, a 10 basis point increase from the net interest margin of 4.02 percent for 2016. The increase in the margin was primarily attributable to a shift in earning assets to higher yielding loans. Additionally, there was an increase in yields on earning assets combined with a continued increase in low cost deposits during the current year.

Non-interest Income
Non-interest income of $112.2 million for 2017 increased $4.9 million, or 5 percent, over last year. Service charges and other fees of $67.7 million for 2017 increased $5.3 million, or 9 percent, from the prior year as a result of an increased number of deposit accounts. The gain on sale of loans of $30.4 million for 2017 decreased $3.2 million, or 9 percent, from prior year which was due to a lower volume of refinanced and purchased mortgages. Other income of $10.4 million for 2017 increased $2.2 million, or 27 percent, over last year and was the result of an increase on gain on sale of OREO.

Non-interest Expense Summary

Year ended
(Dollars in thousands)Dec 31,
2017
Dec 31,
2016
$ Change % Change
Compensation and employee benefits$160,506 $151,697 $8,809 6%
Occupancy and equipment26,631 25,979 652 3%
Advertising and promotions8,405 8,433 (28) %
Data processing14,150 14,390 (240) (2)%
Other real estate owned1,909 2,895 (986) (34)%
Regulatory assessments and insurance4,431 4,780 (349) (7)%
Core deposit intangibles amortization2,494 2,970 (476) (16)%
Other expenses47,045 47,570 (525) (1)%
Total non-interest expense$265,571 $258,714 $6,857 3%

Expenses related to CCP were $4.3 million during 2016. Excluding CCP expenses, non-interest expense for the current year increased $11.2 million, or 4 percent, over the prior year. Compensation and employee benefits for 2017 increased $8.8 million, or 6 percent, from the same period last year due to salary increases and the increased number of employees from the acquired banks. Occupancy and equipment expense increased $652 thousand, or 3 percent from the prior year as a result of increased costs from acquisitions. Data processing expense decreased $240 thousand, or 2 percent, from the prior year as a result of decreased costs associated with CCP. Current year other expenses of $47.0 million decreased $525 thousand, or 1 percent, from the prior year and was principally driven by decreased costs associated with CCP.

Provision for Loan Losses
The provision for loan losses was $10.8 million for 2017, an increase of $8.5 million from the same period in the prior year. Net charge-offs during 2017 were $10.8 million compared to $2.5 million during 2016.

Federal and State Income Tax Expense
Tax expense of $64.6 million in 2017 increased $25.0 million, or 63 percent, over the prior year as a result of the $19.7 million revaluation of the Company’s deferred tax asset related to the Tax Act.

Efficiency Ratio
The efficiency ratio of 53.94 percent for 2017 decreased 194 basis points from the prior year efficiency ratio of 55.88 percent which resulted from the increase in net interest income largely due to higher interest income on commercial loans.

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, including increased banking and consumer protection regulation that adversely affect the Company’s business;
  • ability to complete pending or prospective future acquisitions, limit certain sources of revenue, or increase cost of operations;
  • 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 Information
A conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, January 26, 2018. The conference call will be accessible by telephone and through the internet. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 5089588. To participate on the webcast, log on to: https://edge.media-server.com/m6/p/oqu7ruzu. 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 5089588 by February 9, 2018.

About Glacier Bancorp, Inc.
Glacier Bancorp, Inc. is the parent company for Glacier Bank, Kalispell and Bank divisions First Security Bank of Missoula; Valley Bank of Helena; Big Sky Western Bank, Bozeman; Western Security Bank, Billings; and First Bank of Montana, Lewistown; all operating in Montana; as well as Mountain West Bank, Coeur d’Alene, with operations in Idaho, Utah and Washington; 1st Bank, Evanston, operating in Wyoming and Utah; Citizens Community Bank, Pocatello, operating in Idaho; Bank of the San Juans, Durango, operating in Colorado; First Bank of Wyoming, Powell, and First State Bank, Wheatland, both operating in Wyoming; North Cascades Bank, Chelan, with operations in Washington; and The Foothills Bank, Yuma, with operations in Arizona.


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

(Dollars in thousands, except per share data)December 31,
2017
September 30,
2017
December 31,
2016
Assets
Cash on hand and in banks$139,948 136,822 135,268
Federal funds sold 210
Interest bearing cash deposits60,056 83,178 17,273
Cash and cash equivalents200,004 220,210 152,541
Investment securities, available-for-sale1,778,243 1,886,517 2,425,477
Investment securities, held-to-maturity648,313 655,128 675,674
Total investment securities2,426,556 2,541,645 3,101,151
Loans held for sale38,833 48,709 72,927
Loans receivable6,577,824 6,509,433 5,684,463
Allowance for loan and lease losses(129,568) (129,576) (129,572)
Loans receivable, net6,448,256 6,379,857 5,554,891
Premises and equipment, net177,348 178,672 176,198
Other real estate owned14,269 14,359 20,954
Accrued interest receivable44,462 50,492 45,832
Deferred tax asset38,344 58,916 67,121
Core deposit intangible, net14,184 14,798 12,347
Goodwill177,811 177,811 147,053
Non-marketable equity securities29,884 21,890 25,550
Other assets96,398 91,243 74,035
Total assets$9,706,349 9,798,602 9,450,600
Liabilities
Non-interest bearing deposits$2,311,902 2,355,983 2,041,852
Interest bearing deposits5,267,845 5,411,171 5,330,427
Securities sold under agreements to repurchase362,573 453,596 473,650
FHLB advances353,995 153,685 251,749
Other borrowed funds8,224 8,243 4,440
Subordinated debentures126,135 126,099 125,991
Accrued interest payable3,450 3,154 3,584
Other liabilities73,168 80,470 102,038
Total liabilities8,507,292 8,592,401 8,333,731
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
780 780 765
Paid-in capital797,997 797,381 749,107
Retained earnings - substantially restricted402,259 403,373 374,379
Accumulated other comprehensive (loss) income(1,979) 4,667 (7,382)
Total stockholders’ equity1,199,057 1,206,201 1,116,869
Total liabilities and stockholders’ equity$9,706,349 9,798,602 9,450,600


Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations

Three Months ended Year ended
(Dollars in thousands, except per share data)December 31,
2017
September 30,
2017
December 31,
2016
December 31,
2017
December 31,
2016
Interest Income
Investment securities$18,663 19,987 21,645 81,968 90,392
Residential real estate loans8,520 8,326 8,463 33,114 33,410
Commercial loans61,329 59,875 49,750 227,356 188,949
Consumer and other loans8,386 8,276 7,901 32,584 31,402
Total interest income96,898 96,464 87,759 375,022 344,153
Interest Expense
Deposits3,288 4,564 4,497 16,793 18,402
Securities sold under agreements to
repurchase
496 537 325 1,858 1,207
Federal Home Loan Bank advances2,106 1,398 1,377 6,748 6,221
Other borrowed funds24 21 18 79 67
Subordinated debentures1,158 1,132 997 4,386 3,734
Total interest expense7,072 7,652 7,214 29,864 29,631
Net Interest Income89,826 88,812 80,545 345,158 314,522
Provision for loan losses2,886 3,327 1,139 10,824 2,333
Net interest income after provision for loan
losses
86,940 85,485 79,406 334,334 312,189
Non-Interest Income
Service charges and other fees17,282 17,307 15,645 67,717 62,405
Miscellaneous loan fees and charges1,077 1,211 1,234 4,360 4,613
Gain on sale of loans7,408 9,141 9,765 30,439 33,606
(Loss) gain on sale of investments(115) 77 (757) (660) (1,463)
Other income2,057 3,449 2,127 10,383 8,157
Total non-interest income27,709 31,185 28,014 112,239 107,318
Non-Interest Expense
Compensation and employee benefits40,465 41,297 38,826 160,506 151,697
Occupancy and equipment6,925 6,500 6,692 26,631 25,979
Advertising and promotions2,024 2,239 2,125 8,405 8,433
Data processing3,970 3,647 3,408 14,150 14,390
Other real estate owned377 817 2,076 1,909 2,895
Regulatory assessments and insurance1,069 1,214 1,048 4,431 4,780
Core deposit intangibles amortization614 640 608 2,494 2,970
Other expenses12,922 12,198 11,934 47,045 47,570
Total non-interest expense68,366 68,552 66,717 265,571 258,714
Income Before Income Taxes46,283 48,118 40,703 181,002 160,793
Federal and state income tax expense31,327 11,639 9,662 64,625 39,662
Net Income$14,956 36,479 31,041 116,377 121,131


Glacier Bancorp, Inc.
Average Balance Sheets

Three Months ended
December 31, 2017 December 31, 2016
(Dollars in thousands)Average
Balance
Interest &
Dividends
Average
Yield/
Rate
Average
Balance
Interest &
Dividends
Average
Yield/
Rate
Assets
Residential real estate loans$758,180 $8,520 4.50% $756,796 $8,463 4.47%
Commercial loans 15,089,922 63,140 4.92% 4,225,252 51,039 4.81%
Consumer and other loans695,288 8,386 4.79% 677,300 7,901 4.64%
Total loans 26,543,390 80,046 4.85% 5,659,348 67,403 4.74%
Tax-exempt investment securities 31,089,640 15,485 5.68% 1,290,962 18,487 5.73%
Taxable investment securities 41,483,157 8,774 2.37% 1,809,816 9,813 2.17%
Total earning assets9,116,187 104,305 4.54% 8,760,126 95,703 4.35%
Goodwill and intangibles192,663 159,771
Non-earning assets402,802 389,562
Total assets$9,711,652 $9,309,459
Liabilities
Non-interest bearing deposits$2,334,103 $ % $2,045,833 $ %
NOW and DDA accounts1,704,799 408 0.10% 1,533,225 254 0.07%
Savings accounts1,087,212 164 0.06% 979,377 134 0.05%
Money market deposit accounts1,552,045 610 0.16% 1,451,803 548 0.15%
Certificate accounts831,107 1,203 0.57% 961,707 1,393 0.58%
Wholesale deposits 5161,320 903 2.22% 335,579 2,168 2.57%
FHLB advances226,334 2,106 3.64% 220,921 1,377 2.44%
Repurchase agreements and
other borrowed funds
512,780 1,678 1.30% 538,305 1,340 0.99%
Total funding liabilities8,409,700 7,072 0.33% 8,066,750 7,214 0.36%
Other liabilities93,335 101,383
Total liabilities8,503,035 8,168,133
Stockholders’ Equity
Common stock780 765
Paid-in capital797,607 748,730
Retained earnings410,836 389,289
Accumulated other comprehensive
(loss) income
(606) 2,542
Total stockholders’ equity1,208,617 1,141,326
Total liabilities and stockholders’ equity$9,711,652 $9,309,459
Net interest income (tax-equivalent) $97,233 $88,489
Net interest spread (tax-equivalent) 4.21% 3.99%
Net interest margin (tax-equivalent) 4.23% 4.02%

__________
1 Includes tax effect of $1.8 million and $1.3 million on tax-exempt municipal loan and lease income for the three months ended December 31, 2017 and 2016, respectively.
2 Total loans are gross of the allowance for loan and lease 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 $5.3 million and $6.3 million on tax-exempt investment securities income for the three months ended December 31, 2017 and 2016, respectively.
4 Includes tax effect of $313 thousand and $353 thousand on federal income tax credits for the three months ended December 31, 2017 and 2016, respectively.
5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.


Glacier Bancorp, Inc.
Average Balance Sheets (continued)

Year ended
December 31, 2017 December 31, 2016
(Dollars in thousands)Average
Balance

Interest &
Dividends
Average
Yield/
Rate
Average
Balance
Interest &
Dividends
Average
Yield/
Rate
Assets
Residential real estate loans$744,523 $33,114 4.45% $741,876 $33,410 4.50%
Commercial loans 14,792,720 233,744 4.88% 3,993,363 193,147 4.84%
Consumer and other loans684,129 32,584 4.76% 668,990 31,402 4.69%
Total loans 26,221,372 299,442 4.81% 5,404,229 257,959 4.77%
Tax-exempt investment securities 31,160,182 66,077 5.70% 1,325,810 75,907 5.73%
Taxable investment securities 41,722,264 39,727 2.31% 1,874,240 41,775 2.23%
Total earning assets9,103,818 405,246 4.45% 8,604,279 375,641 4.37%
Goodwill and intangibles180,014 155,981
Non-earning assets394,363 392,353
Total assets$9,678,195 $9,152,613
Liabilities
Non-interest bearing deposits$2,175,750 $ % $1,934,543 $ %
NOW and DDA accounts1,656,865 1,402 0.08% 1,498,928 1,062 0.07%
Savings accounts1,055,688 624 0.06% 920,058 464 0.05%
Money market deposit accounts1,547,659 2,407 0.16% 1,420,700 2,183 0.15%
Certificate accounts888,887 5,114 0.58% 1,013,046 5,998 0.59%
Wholesale deposits 5275,804 7,246 2.63% 335,616 8,695 2.59%
FHLB advances258,528 6,748 2.57% 294,952 6,221 2.07%
Repurchase agreements and
other borrowed funds
547,307 6,323 1.16% 515,254 5,008 0.97%
Total funding liabilities8,406,488 29,864 0.36% 7,933,097 29,631 0.37%
Other liabilities83,991 96,392
Total liabilities8,490,479 8,029,489
Stockholders’ Equity
Common stock775 763
Paid-in capital781,267 740,792
Retained earnings406,200 371,925
Accumulated other comprehensive
(loss) income
(526) 9,644
Total stockholders’ equity1,187,716 1,123,124
Total liabilities and stockholders’ equity$9,678,195 $9,152,613
Net interest income (tax-equivalent) $375,382 $346,010
Net interest spread (tax-equivalent) 4.09% 4.00%
Net interest margin (tax-equivalent) 4.12% 4.02%

__________
1 Includes tax effect of $6.4 million and $4.2 million on tax-exempt municipal loan and lease income for the years ended December 31, 2017 and 2016, respectively.
2 Total loans are gross of the allowance for loan and lease 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 $22.5 million and $25.9 million on tax-exempt investment securities income for the years ended December 31, 2017 and 2016, respectively.
4 Includes tax effect of $1.3 million and $1.4 million on federal income tax credits for the years ended December 31, 2017 and 2016, respectively.
5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts.


Glacier Bancorp, Inc.
Loan Portfolio by Regulatory Classification

Loans Receivable, by Loan Type % Change from
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Sep 30,
2017
Dec 31,
2016
Custom and owner occupied construction$109,555 $106,615 $86,233 3% 27%
Pre-sold and spec construction72,160 82,023 66,184 (12)% 9%
Total residential construction181,715 188,638 152,417 (4)% 19%
Land development82,398 83,414 75,078 (1)% 10%
Consumer land or lots102,289 99,866 97,449 2% 5%
Unimproved land65,753 64,610 69,157 2% (5)%
Developed lots for operative builders14,592 12,830 13,254 14% 10%
Commercial lots23,770 25,984 30,523 (9)% (22)%
Other construction391,835 367,060 257,769 7% 52%
Total land, lot, and other construction680,637 653,764 543,230 4% 25%
Owner occupied1,132,833 1,109,796 977,932 2% 16%
Non-owner occupied1,186,066 1,180,976 929,729 % 28%
Total commercial real estate2,318,899 2,290,772 1,907,661 1% 22%
Commercial and industrial751,221 766,970 686,870 (2)% 9%
Agriculture450,616 468,168 407,208 (4)% 11%
1st lien877,335 873,061 877,893 % %
Junior lien51,155 53,337 58,564 (4)% (13)%
Total 1-4 family928,490 926,398 936,457 % (1)%
Multifamily residential189,342 185,891 184,068 2% 3%
Home equity lines of credit440,105 429,483 402,614 2% 9%
Other consumer148,247 153,363 155,193 (3)% (4)%
Total consumer588,352 582,846 557,807 1% 5%
States and political subdivisions383,252 351,869 255,420 9% 50%
Other144,133 142,826 126,252 1% 14%
Total loans receivable, including loans held for sale6,616,657 6,558,142 5,757,390 1% 15%
Less loans held for sale 1(38,833) (48,709) (72,927) (20)% (47)%
Total loans receivable$6,577,824 $6,509,433 $5,684,463 1% 16%


_______
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)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Dec 31,
2017
Dec 31,
2017
Dec 31,
2017
Custom and owner occupied construction$48 177 48
Pre-sold and spec construction38 267 226 38
Total residential construction86 444 226 38 48
Land development7,888 8,116 9,864 806 7,082
Consumer land or lots1,861 2,451 2,137 1,065 796
Unimproved land10,866 10,320 11,905 8,760 2,106
Developed lots for operative builders116 116 175 116
Commercial lots1,312 1,374 1,466 260 1,052
Other construction151 151 151
Total land, lot and other
construction
22,194 22,528 25,547 10,891 11,303
Owner occupied13,848 14,207 18,749 11,778 698 1,372
Non-owner occupied4,584 4,251 3,426 3,711 312 561
Total commercial real estate18,432 18,458 22,175 15,489 1,010 1,933
Commercial and industrial5,294 5,190 5,184 4,700 533 61
Agriculture3,931 3,998 1,615 3,931
1st lien9,261 7,688 9,186 6,452 2,605 204
Junior lien567 591 1,167 518 49
Total 1-4 family9,828 8,279 10,353 6,970 2,605 253
Multifamily residential 400
Home equity lines of credit3,292 4,151 5,494 2,652 640
Other consumer322 225 391 162 129 31
Total consumer3,614 4,376 5,885 2,814 129 671
States and political subdivisions1,800 1,800 1,800
Total$65,179 65,073 71,385 44,833 6,077 14,269



Glacier Bancorp, Inc.

Credit Quality Summary by Regulatory Classification (continued)

Accruing 30-89 Days Delinquent Loans,
by Loan Type
% Change from
(Dollars in thousands)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Sep 30,
2017
Dec 31,
2016
Custom and owner occupied construction$300 $415 $1,836 (28)% (84)%
Pre-sold and spec construction102 451 (77)% n/m
Total residential construction402 866 1,836 (54)% (78)%
Land development 5 154 (100)% (100)%
Consumer land or lots353 615 638 (43)% (45)%
Unimproved land662 621 1,442 7 % (54)%
Developed lots for operative builders7 n/m
n/m
Commercial lots108 15 620 % n/m
Total land, lot and other construction1,130 1,256 2,234 (10)% (49)%
Owner occupied4,726 4,450 2,307 6 % 105 %
Non-owner occupied2,399 5,502 1,689 (56) % 42 %
Total commercial real estate7,125 9,952 3,996 (28)% 78 %
Commercial and industrial6,472 5,784 3,032 12 % 113 %
Agriculture3,205 780 1,133 311 % 183 %
1st lien10,865 2,973 7,777 265 % 40 %
Junior lien4,348 3,463 1,016 26 % 328 %
Total 1-4 family15,213 6,436 8,793 136 % 73 %
Multifamily Residential 237 10 (100)% (100)%
Home equity lines of credit1,962 2,065 1,537 (5)% 28 %
Other consumer2,109 1,735 1,180 22 % 79 %
Total consumer4,071 3,800 2,717 7 % 50 %
States and political subdivisions 1,800 n/m
(100)%
Other69 4 66 1,625 % 5 %
Total$37,687 $29,115 $25,617 29 % 47 %


_______
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)Dec 31,
2017
Sep 30,
2017
Dec 31,
2016
Dec 31,
2017
Dec 31,
2017
Custom and owner occupied construction$ 58 (1) 62 62
Pre-sold and spec construction(23) (19) 786 23
Total residential construction(23) 39 785 62 85
Land development(143) (67) (2,661) 143
Consumer land or lots222 (150) (688) 411 189
Unimproved land(304) (177) (184) 304
Developed lots for operative builders(107) (16) (27) 107
Commercial lots(6) (4) 27 6
Other construction389 390 389
Total land, lot and other construction51 (24) (3,533) 800 749
Owner occupied3,908 3,416 1,196 4,556 648
Non-owner occupied368 214 44 382 14
Total commercial real estate4,276 3,630 1,240 4,938 662
Commercial and industrial883 429 (370) 1,597 714
Agriculture9 (11) 50 37 28
1st lien(23) (201) 487 356 379
Junior lien719 746 60 815 96
Total 1-4 family696 545 547 1,171 475
Multifamily residential(230) (229) 229 230
Home equity lines of credit272 262 611 463 191
Other consumer505 98 257 735 230
Total consumer777 360 868 1,198 421
Other4,389 3,195 2,642 9,528 5,139
Total$10,828 7,934 2,458 19,331 8,503


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.