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KALISPELL, Mont., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. (NYSE: GBCI) reported net income of $50.7 million for the current quarter, a decrease of $31.2 million, or 38 percent, from the $81.9 million of net income for the prior year fourth quarter. Diluted earnings per share for the current quarter was $0.46 per share, a decrease of 47 percent from the prior year fourth quarter diluted earnings per share of $0.86. The decrease in fourth quarter earnings over the prior year was driven primarily by the $22.3 million of credit loss expense and $8.2 million of acquisition-related expenses from the acquisition of Altabank. In addition, there was a $14.8 million decrease in gain on sale of loans with the slowing of purchase and refinance activity after the historic levels in the prior year. The credit loss expense due to the acquisition of Altabank reflects the requirement to fully fund an allowance for credit losses on loans and unfunded commitments post-acquisition. “The Glacier team ended 2021 on a high note with very strong net interest income and loan growth,” said Randy Chesler, President and Chief Executive Officer. “All of our Divisions across the West are extremely well positioned to thrive in 2022.”

Net income for 2021 was $285 million, an increase of $18.4 million, or 7 percent, from the $266 million net income from the prior year. Diluted earnings per share for the current year was $2.86 per share, an increase of 2 percent, from the diluted earnings per share of $2.81 for the same period last year.

On October 1, 2021, the Company completed the acquisition of Altabancorp, the parent company of Altabank, based in American Fork, Utah (collectively, “Alta”) and the largest community bank in Utah. Alta provides banking services to individuals and businesses in Utah with twenty-five banking offices from Preston, Idaho to St. George, Utah. Alta became the seventeenth division of the Company and significantly increased the Company’s presence in the State of Utah.

The Company’s results of operations and financial condition include the Alta acquisition beginning on the acquisition date and the following table discloses the preliminary fair value estimates of select classifications of assets and liabilities acquired:

Asset Summary

Excluding the $1.623 billion of cash received from the Alta acquisition that was invested in the current quarter, total debt securities at December 31, 2021 increased $228 million, or 3 percent, during the current quarter and increased $3.220 billion, or 58 percent, from the prior year fourth quarter. The Company continues to selectively purchase debt securities with excess liquidity from the increase in core deposits and SBA forgiveness of PPP loans. Debt securities represented 40 percent of total assets at December 31, 2021 and September 30, 2021 compared to 30 percent of total assets at December 31, 2020.

The loan portfolio of $13.432 billion at December 31, 2021 increased $2.138 billion, or 19 percent, in the current quarter and increased $2.309 billion, or 21 percent, from the prior year end. Excluding the PPP loans and loans from the Alta acquisition, the loan portfolio increased $448 million, or 16 percent annualized, during the current quarter with the largest increase in commercial real estate which increased $315 million, or 18 percent annualized. Excluding the PPP loans and loans from the Alta acquisition, the loan portfolio increased $1.160 billion, or 11 percent, from the prior year end with the largest increase in commercial real estate loans which increased $912 million, or 14 percent.

Credit Quality Summary

Non-performing assets of $67.7 million at December 31, 2021 increased $16.5 million, or 32 percent, over the prior quarter which was primarily attributable to the acquisition of Alta. Non-performing assets increased $32.3 million, or 91 percent, over the prior year fourth quarter primarily as a result of the Alta acquisition and a single credit relationship. Non-performing assets as a percentage of subsidiary assets at December 31, 2021 was 0.26 percent compared to 0.24 percent in the prior quarter and 0.19 percent in the prior year fourth quarter.

Early stage delinquencies (accruing loans 30-89 days past due) of $50.6 million at December 31, 2021 increased $24.6 million from the prior quarter with a large portion of the increase primarily isolated to a single credit relationship. Early stage delinquencies increased $27.8 million from the prior year fourth quarter. Early stage delinquencies as a percentage of loans at December 31, 2021 was 0.38 percent, which was an increase of 15 basis points from prior quarter and an 18 basis points increase from prior year fourth quarter.

The current quarter credit loss expense of $28.0 million included $18.1 million of provision for credit loss on loans and $4.2 million of provision for credit loss on unfunded loan commitments from the acquisition of Alta. The credit loss expense due to the acquisition of Altabank reflects the requirement to fully fund an allowance for credit losses on loans and unfunded commitments post-acquisition. Excluding the Alta acquisition, the current quarter credit loss expense was $5.7 million, including $1.2 million of credit loss from loans and $4.5 million of credit loss from unfunded loan commitments.

The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at December 31 2021 was 1.29 percent which was a 7 basis points decrease compared to the prior quarter and a 13 basis points decrease from the prior year fourth quarter. The decrease in the ACL as a percentage of total loans during the current year was driven by the improvement in the economic forecasts.

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

Excluding the acquisition of Alta, the current quarter provision for credit loss expense for loans was $1.2 million which was a decrease of $1.1 million from the prior quarter provision for credit loss expense of $2.3 million and an increase of $2.8 million from the prior year fourth quarter provision for credit loss benefit of $1.5 million.

Net charge-offs for the current quarter were $616 thousand compared to $152 thousand for the prior quarter and $4.8 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 provision for credit losses for loans.

PPP Loans

The SBA Round 2 PPP program ended in early May 2021 after the available funds were fully drawn upon. During the first half of 2021, the Company originated $555 million of Round 2 PPP loans which generated $33.2 million of SBA deferred processing fees and $6.7 million of deferred compensation costs for total net deferred fees of $26.5 million.

During the current year, the SBA processing fees received on Round 2 averaged 5.99 percent which compared to the average of 3.75 percent received on Round 1 in the prior year. The increase in the fee percentage received on Round 2 was the result of an increase in the number of smaller loans which receive a higher percentage fee.

The Company received $201 million in PPP loan forgiveness during the current quarter and received $1.305 billion in 2021. As of December 31, 2021, the Company had $32.3 million remaining, or 2 percent of the $1.472 billion of Round 1 PPP loans originated in the prior year still to be forgiven and had $136 million remaining, or 25 percent of the $555 million of Round 2 PPP loans originated in the current year.

In the current quarter, the Company recognized $8.7 million of interest income (including deferred fees and costs) from the Round 1 and Round 2 PPP loans. The income recognized in the current quarter included $7.4 million acceleration of net deferred fees in interest income resulting from the SBA forgiveness of loans. Net deferred fees remaining on the balance of the PPP loans at December 31, 2021 were $5.1 million, which will be recognized into interest income over the remaining life of the loans or when the loans are forgiven in whole or in part by the SBA.

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

Excluding the Alta acquisition, core deposits increased $560 million, or 13 percent annualized, from the prior quarter and increased $3.278 billion, or 22 percent, from the prior year fourth quarter. Non-interest bearing deposits of $7.779 billion as of December 31, 2021 organically increased $1.123 billion, or 21 percent, from the prior year fourth quarter. The unprecedented increase in deposits over the prior two years resulted from a number of factors including the PPP loan proceeds deposited by customers, federal stimulus deposits and the increase in customer savings. Non-interest bearing deposits were 37 percent of total core deposits at December 31, 2021 compared to 38 percent of total core deposits at September 30, 2021 and 37 percent at December 31, 2020.

The low levels of borrowings, including wholesale deposits and Federal Home Loan Bank (“FHLB”) advances, reflected the significant increase in core deposits which funded the asset growth.

Stockholders’ Equity Summary

Tangible stockholders’ equity of $2.140 billion at December 31, 2021 increased $314 million, or 17 percent, from the prior quarter and increased $402 million, or 23 percent, from the prior year fourth quarter which was the result of $840 million of Company common stock issued for the acquisition of Alta and earnings retention. The increase was partially offset by the increase in goodwill and core deposits associated with the Alta acquisition and a decrease in other comprehensive income. Tangible book value per common share of $19.33 at the current quarter end increased $0.22 per share, or 1 percent, from the prior quarter and increased $1.12 per share, or 6 percent, from a year ago.

Cash Dividends
On December 29, 2021, the Company’s Board of Directors declared a special cash dividend of $0.10 per share, the 18th special dividend the Company has declared. The special dividend was payable on January 20, 2022 to shareholders of record on January 11, 2022. On November 17, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.32 per share. The dividend was payable December 16, 2021 to shareholders of record on December 7, 2021. The dividend was the 147th consecutive dividend. 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, 2021
Compared to September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020

Income Summary