Exhibit 99.1
Glacier Bancorp, Inc. Earnings for Quarter and Nine Months Ended September 30, 2006
HIGHLIGHTS:
|
|
* |
Record net earnings for the quarter of $15.806 million, up 16 percent from last year’s quarter. |
|
|
|
|
|
|
* |
Record net earnings year-to-date of $44.101 million, up 15 percent from the same period last year. |
|
|
|
|
|
|
* |
Diluted quarterly earnings per share of $0.47, up 12 percent from last year’s quarter. |
|
|
|
|
|
|
* |
Diluted year-to-date earnings per share of $1.33, up 10 percent from the same period last year. |
|
|
|
|
|
|
* |
Net interest margin 16 basis points greater than the first nine months of 2005. |
|
|
|
|
|
|
* |
Non-interest bearing deposits increased $31 million, or 17 percent annualized, from prior quarter. |
|
|
|
|
|
|
* |
Loans increased $156 million, or 22 percent annualized, from prior quarter. |
|
|
|
|
|
|
* |
Acquisition of First National Bank of Morgan with $89 million in assets completed September 1. |
|
|
|
|
|
|
* |
Cash dividend of $0.17 declared which is an increase of 13 percent over the prior year quarter. |
|
|
|
|
|
|
* |
Acquisition of Citizens Development Company completed October 1, 2006. |
KALISPELL, Mont., Oct. 26 /PRNewswire-FirstCall/ --
|
Earnings Summary |
|
Three months |
|
Nine months |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
15,806 |
|
$ |
13,575 |
|
$ |
44,101 |
|
$ |
38,185 |
|
|
Diluted earnings per share |
|
$ |
0.47 |
|
$ |
0.42 |
|
$ |
1.33 |
|
$ |
1.21 |
|
|
Return on average assets (annualized) |
|
|
1.58 |
% |
|
1.52 |
% |
|
1.53 |
% |
|
1.51 |
% |
|
Return on average equity (annualized) |
|
|
16.24 |
% |
|
17.88 |
% |
|
16.42 |
% |
|
17.67 |
% |
Glacier Bancorp, Inc. (Nasdaq: GBCI) reported net quarterly earnings of $15.806 million, an increase of $2.231 million, or 16 percent, over the $13.575 million for the third quarter of 2005. Net quarterly earnings were reduced by $519,000, or $0.02 per share, due to the January 1, 2006 adoption of SFAS 123(R) Share-based Payment which requires recording the estimated fair value of stock options as compensation expense. Diluted earnings per share for the quarter of $0.47 is an increase of 12 percent over the per share earnings of $0.42 for the same quarter of 2005. Excluding the affects of SFAS 123(R), diluted earnings per share would have been $0.49, or an increase of 17 percent over the prior year quarter. “We had another solid quarter,” said Mick Blodnick, President and Chief Executive Officer. “Loan growth, asset quality, and increases to our low cost transaction deposits all continued to trend in the right direction.” Annualized return on average assets and return on average equity for the quarter were 1.58 percent and 16.24 percent, respectively, which compares with prior year returns for the third quarter of 1.52 percent and 17.88 percent.
Net earnings for the nine months ended September 30, 2006 were $44.101 million, which is an increase of $5.916 million, or 15 percent over the prior year. Diluted earnings per share of $1.33 is an increase of 10 percent over the $1.21 earned in the first nine months of 2005. Excluding SFAS 123(R) compensation costs of $1.703 million, diluted earnings per share increased 14 percent for the first nine months of 2006. The 2006 nine month annualized return on average assets and return on average equity was 1.53 percent and 16.42 percent, respectively, which compares with prior year nine month returns of 1.51 percent and 17.67 percent.
The results of operations and financial condition include the acquisition of the First National Bank of Morgan, Utah (“Morgan”) from September 1, 2006 forward. The following table provides information on selected classifications of assets and liabilities acquired:
|
(Unaudited - $ in thousands) |
|
First National |
|
|
|
|
|
|
|
|
|
Acquisition Date |
|
|
September 1, 2006 |
|
|
Total assets |
|
|
88,519 |
|
|
Investments |
|
|
5,713 |
|
|
Net loans |
|
|
40,944 |
|
|
Non-interest bearing deposits |
|
|
14,144 |
|
|
Interest bearing deposits |
|
|
53,028 |
|
Net earnings was reduced as a result of the adoption of SFAS 123(R) Share-based Payment beginning January 1, 2006, which requires recording the estimated fair value of stock options as compensation expense. The following table illustrates the affect of the adoption of SFAS 123(R), net of tax affects, if it would not have been adopted in 2006.
|
Impact of SFAS 123 (R) |
|
Three months ended Sept. 30, |
|
Nine months ended Sept. 30, |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
15,806 |
|
|
13,575 |
|
|
44,101 |
|
|
38,185 |
|
|
Stock option compensation cost |
|
|
519 |
|
|
— |
|
|
1,703 |
|
|
— |
|
|
Pro forma net operating earnings |
|
$ |
16,325 |
|
|
13,575 |
|
|
45,804 |
|
|
38,185 |
|
|
Diluted earnings per share |
|
$ |
0.47 |
|
|
0.42 |
|
|
1.33 |
|
|
1.21 |
|
|
Stock option compensation cost |
|
|
0.02 |
|
|
— |
|
|
0.05 |
|
|
— |
|
|
Pro forma net operating earnings |
|
$ |
0.49 |
|
|
0.42 |
|
|
1.38 |
|
|
1.21 |
|
|
Assets |
|
September 30, 2006 |
|
December 31, |
|
September 30, |
|
$change |
|
$change |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(audited) |
|
(unaudited) |
|
|
|
|
|
|
|
|||
|
Cash on hand and in banks |
|
$ |
113,268 |
|
|
111,418 |
|
|
114,781 |
|
|
1,850 |
|
|
(1,513 |
) |
|
Investments, interest bearing deposits, FHLB stock, FRB stock, and Fed Funds |
|
|
915,858 |
|
|
991,246 |
|
|
1,051,739 |
|
|
(75,388 |
) |
|
(135,881 |
) |
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate |
|
|
757,470 |
|
|
607,627 |
|
|
538,339 |
|
|
149,843 |
|
|
219,131 |
|
|
Commercial |
|
|
1,560,433 |
|
|
1,357,051 |
|
|
1,282,978 |
|
|
203,382 |
|
|
277,455 |
|
|
Consumer and other |
|
|
540,362 |
|
|
471,164 |
|
|
447,238 |
|
|
69,198 |
|
|
93,124 |
|
|
Total loans |
|
|
2,858,265 |
|
|
2,435,842 |
|
|
2,268,555 |
|
|
422,423 |
|
|
589,710 |
|
|
Allowance for loan losses |
|
|
(43,216 |
) |
|
(38,655 |
) |
|
(34,506 |
) |
|
(4,561 |
) |
|
(8,710 |
) |
|
Total loans net of allowance for losses |
|
|
2,815,049 |
|
|
2,397,187 |
|
|
2,234,049 |
|
|
417,862 |
|
|
581,000 |
|
|
Other assets |
|
|
282,521 |
|
|
206,493 |
|
|
189,311 |
|
|
76,028 |
|
|
93,210 |
|
|
Total Assets |
|
$ |
4,126,696 |
|
|
3,706,344 |
|
|
3,589,880 |
|
|
420,352 |
|
|
536,816 |
|
At September 30, 2006 total assets were $4.127 billion, which is $420 million, or 11 percent, greater than the December 31, 2005 assets of $3.706 billion. Without the acquisition of Morgan total assets increased $331 million, or 9 percent, from year end 2005. Of the $537 million increase in total assets since September 30, 2005, $296 million, or 8 percent, was from internal growth.
Total loans have increased $422 million from December 31, 2005, or 17 percent, with the growth occurring in all loan categories. The Morgan acquisition accounted for $42 million, or 2 percent of the increase. Including loans acquired, commercial loans have increased $203 million, or 15 percent, real estate loans gained $150 million, or 25 percent, and consumer loans grew by $69 million, or 15 percent. “The continued strong growth in loans has allowed us to further reduce our investment portfolio which in turn has improved our overall yield on earning assets,” Blodnick said. Total loans have increased $590 million, or 26 percent, with internal loan growth of $436 million, from September 30, 2005, with all loan categories showing increases. Including loans acquired, commercial loans increased the most, $277 million, or 22 percent, followed by real estate loans which increased $219 million, or 41 percent, which was the largest percentage gain, and consumer loans, which are primarily comprised of home equity loans, increasing by $93 million, or 21 percent.
Investment securities, including interest bearing deposits in other financial institutions, and federal funds sold have decreased $75 million from December 31, 2005, or 8 percent, and have declined $136 million, or 13 percent, from September 30, 2005. Investment securities, without interest bearing deposits and federal funds sold, have decreased $125 million from December 31, 2005, and $182 million from September 30, 2005. Investments, including interest bearing deposits and federal funds sold, at September 30, 2006 represented 22% of total assets versus 29% the prior year, which is a result of the continued use of investment cash flow to fund loan growth.
|
Liabilities |
|
September 30, |
|
December 31, |
|
September 30, |
|
$change |
|
$change |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(audited) |
|
(unaudited) |
|
|
|
|
|
|
|
|||
|
Non-interest bearing deposits |
|
$ |
751,593 |
|
|
667,008 |
|
|
684,151 |
|
|
84,585 |
|
|
67,442 |
|
|
Interest bearing deposits |
|
|
2,099,742 |
|
|
1,867,704 |
|
|
1,702,977 |
|
|
232,038 |
|
|
396,765 |
|
|
Advances from Federal Home Loan Bank |
|
|
377,104 |
|
|
402,191 |
|
|
654,368 |
|
|
(25,087 |
) |
|
(277,264 |
) |
|
Securities sold under agreements to repurchase and other borrowed funds |
|
|
334,099 |
|
|
317,222 |
|
|
123,509 |
|
|
16,877 |
|
|
210,590 |
|
|
Other liabilities |
|
|
38,148 |
|
|
33,980 |
|
|
34,475 |
|
|
4,168 |
|
|
3,673 |
|
|
Subordinated debentures |
|
|
115,000 |
|
|
85,000 |
|
|
85,000 |
|
|
30,000 |
|
|
30,000 |
|
|
Total liabilities |
|
$ |
3,715,686 |
|
|
3,373,105 |
|
|
3,284,480 |
|
|
342,581 |
|
|
431,206 |
|
Non-interest bearing deposits have increased $85 million, or 13 percent, since December 31, 2005, and by $67 million, or 10 percent, since September 30, 2005. Acquisitions accounted for $14 million of the 2006 increase and $36 million of the increase from September 30, 2005. This low cost of funding continues to be a primary focus of each of our banks. Interest bearing deposits have increased $232 million since December 31, 2005, with Brokered and National Market CD’s adding $68 million, and the Morgan acquisition adding $53 million to the total. Since September 30, 2005 interest bearing deposits have increased $397 million, or 23 percent, with $127 million of that amount from broker and Internet sources, and $140 million from acquisitions. Federal Home Loan Bank (FHLB) advances decreased $25 million, and repurchase agreements and other borrowed funds increased $17 million from December 31, 2005. FHLB advances are $277 million less than the September 30, 2005 balances due primarily to the above described increases in deposits and other funding sources including $163 million in U.S. Treasury Tax and Loan Term Auction funds, and $30 million additional subordinated debentures.
|
Stockholders’ equity |
|
September 30, |
|
December 31, |
|
September 30, |
|
$change |
|
$change |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(audited) |
|
(unaudited) |
|
|
|
|
|
|
|
|||
|
Common equity |
|
$ |
408,556 |
|
$ |
332,418 |
|
$ |
301,192 |
|
|
76,138 |
|
|
107,364 |
|
|
Accumulated other comprehensive income |
|
|
2,454 |
|
|
821 |
|
|
4,208 |
|
|
1,633 |
|
|
(1,754 |
) |
|
Total stockholders’ equity |
|
|
411,010 |
|
|
333,239 |
|
|
305,400 |
|
|
77,771 |
|
|
105,610 |
|
|
Core deposit intangible, net, and goodwill |
|
|
(97,494 |
) |
|
(87,114 |
) |
|
(79,898 |
) |
|
(10,380 |
) |
|
(17,596 |
) |
|
Tangible stockholders’ equity |
|
$ |
313,516 |
|
|
246,125 |
|
|
225,502 |
|
|
67,391 |
|
|
88,014 |
|
|
Stockholders’ equity to total assets |
|
|
9.96 |
% |
|
8.99 |
% |
|
8.51 |
% |
|
|
|
|
|
|
|
Tangible stockholders’ equity to total tangible assets |
|
|
7.78 |
% |
|
6.80 |
% |
|
6.42 |
% |
|
|
|
|
|
|
|
Book value per common share |
|
$ |
12.14 |
|
|
10.36 |
|
|
9.74 |
|
|
1.78 |
|
|
2.40 |
|
|
Market price per share at end of quarter |
|
$ |
34.17 |
|
|
30.05 |
|
|
30.87 |
|
|
4.12 |
|
|
3.30 |
|
Total equity and book value per share amounts have increased $77.771 million and $1.78 per share, respectively, from December 31, 2005, the result of the secondary offering of 1 million shares on August 9, 2006, and 317,436 shares issued for the Morgan acquisition, earnings retention, stock options exercised, and an increase in other comprehensive income. Accumulated other comprehensive income, representing net unrealized gains on securities available for sale, decreased $1.754 million from September 30, 2005 and increased $1.633 million from year end, primarily a function of interest rate changes.
Operating Results for Three Months Ended September 30, 2006
Compared to September 30, 2005
|
Revenue summary |
|
Three months ended September 30, |
|
||||||||||
|
|
|
|
|||||||||||
|
|
2006 |
|
2005 |
|
$ change |
|
% change |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
39,005 |
|
$ |
33,760 |
|
$ |
5,245 |
|
|
16 |
% |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges, loan fees, and other fees |
|
|
9,403 |
|
|
8,381 |
|
|
1,022 |
|
|
12 |
% |
|
Gain on sale of loans |
|
|
2,992 |
|
|
3,258 |
|
|
(266 |
) |
|
-8 |
% |
|
Loss on sale of investments |
|
|
(3 |
) |
|
(1 |
) |
|
(2 |
) |
|
200 |
% |
|
Other income |
|
|
1,370 |
|
|
698 |
|
|
672 |
|
|
96 |
% |
|
Total non-interest income |
|
|
13,762 |
|
|
12,336 |
|
|
1,426 |
|
|
12 |
% |
|
|
|
$ |
52,767 |
|
$ |
46,096 |
|
$ |
6,671 |
|
|
14 |
% |
|
Tax equivalent net interest margin |
|
|
4.28 |
% |
|
4.24 |
% |
|
|
|
|
|
|
Net Interest Income
Net interest income for the quarter increased $5.245 million, or 16 percent, over the same period in 2005, and $1.379 million from the second quarter of 2006. Total interest income increased $14.322 million from the prior year’s quarter, or 29 percent, while total interest expense increased $9.077 million, or 57 percent. The increase in interest expense is primarily attributable to the volume increase in interest bearing deposits, and increases in short term interest rates during 2005 continuing into 2006. The net interest margin as a percentage of earning assets for the quarter, on a tax equivalent basis, was 4.28 percent which was 4 basis points higher than the 4.24 percent result for the third quarter of 2005. The margin for the third quarter of 2006 decreased 6 basis points from the second quarter of 2006 margin of 4.34 percent, primarily a result of the continued increase in funding costs. Issuing the $30 million subordinated debentures in advance of acquisitions also reduced net interest income by approximately $62,000 in the third quarter of 2006.
Non-interest Income
Fee income increased $1.022 million, or 12 percent, over the same period last year, driven primarily by an increased number of loan and deposit accounts from internal growth and acquisitions. Gain on sale of loans decreased $266 thousand, or 8 percent, from the third quarter of last year. Loan origination volume in our markets for housing construction continues to remain very active by historical standards and the recent decline was expected with the slow down from unprecedented activity last year and as interest rates increased. Other income rose $672,000 of which $543,000 was non-recurring bank owned life insurance proceeds.
|
|
|
Three months ended September 30, |
|
||||||||||
|
Non-interest expense summary |
|
|
|
||||||||||
|
|
2006 |
|
2005 |
|
$ change |
|
% change |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
$ |
15,992 |
|
$ |
13,685 |
|
$ |
2,307 |
|
|
17 |
% |
|
Occupancy and equipment expense |
|
|
3,875 |
|
|
3,356 |
|
|
519 |
|
|
15 |
% |
|
Outsourced data processing |
|
|
620 |
|
|
615 |
|
|
5 |
|
|
1 |
% |
|
Core deposit intangibles amortization |
|
|
411 |
|
|
388 |
|
|
23 |
|
|
6 |
% |
|
Other expenses |
|
|
6,946 |
|
|
6,132 |
|
|
814 |
|
|
13 |
% |
|
Total non-interest expense |
|
$ |
27,844 |
|
$ |
24,176 |
|
$ |
3,668 |
|
|
15 |
% |
Non-interest Expense
Non-interest expense increased by $3.668 million, or 15 percent, from the same quarter of 2005. Compensation and benefit expense increased $2.307 million, or 17 percent. Excluding SFAS 123(R) compensation cost of $726 thousand the increase would have been 12 percent. The remaining increase in compensation and benefit expense was primarily attributed to four acquisitions during 2005 and normal compensation increases for job performance and increased costs for benefits. The number of full-time-equivalent employees has increased from 1,052 to 1,200, an 14 percent increase, since September 30, 2005. Occupancy and equipment expense increased $519 thousand, or 15 percent, reflecting the bank acquisitions, cost of additional branch locations and facility upgrades. Other expenses increased $814 thousand, or 13 percent, primarily from acquisitions, additional marketing expenses, and costs associated with new branch offices. The efficiency ratio (non-interest expense/net interest income + non-interest income) was 53 percent for the 2006 quarter, up from 52 percent for the 2005 quarter.
|
Credit quality information |
|
September 30, |
|
December 31, |
|
September 30, |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
(audited) |
|
|
(unaudited) |
|
|
Allowance for loan losses |
|
$ |
43,216 |
|
$ |
38,655 |
|
$ |
34,506 |
|
|
Non-performing assets |
|
|
9,505 |
|
|
10,089 |
|
|
7,862 |
|
|
Allowance as a percentage of non performing assets |
|
|
455 |
% |
|
383 |
% |
|
439 |
% |
|
Non-performing assets as a percentage of total bank assets |
|
|
0.22 |
% |
|
0.26 |
% |
|
0.22 |
% |
|
Allowance as a percentage of total loans |
|
|
1.51 |
% |
|
1.59 |
% |
|
1.52 |
% |
|
Net charge-offs as a percentage of loans |
|
|
0.00 |
% |
|
0.02 |
% |
|
0.02 |
% |
Allowance for Loan Loss and Non-Performing Assets
Non-performing assets as a percentage of total bank assets at September 30, 2006 were at .22 percent, the same percentage as at September 30, 2005, but decreasing slightly from .26 percent at December 31, 2005. The Company ratios compare favorably to the Federal Reserve Bank Peer Group average of .43 percent at June 30, 2006, the most recent information available. The allowance for loan losses was 455 percent of non-performing assets at September 30, 2006, up from 439 percent a year ago. The allowance, including $3.555 million from acquisitions, has increased $8.710 million, or 25 percent, from a year ago. The allowance of $43.216 million, is 1.51 percent of September 30, 2006 total loans outstanding, down slightly from the 1.52 percent a year ago. The third quarter provision for loan losses expense was $1.320 million, a decrease of $287 thousand from the same quarter in 2005. Net charge offs remain low at $62 thousand for the third quarter of 2006. Loan growth, average loan size, and credit quality considerations will determine the level of additional provision expense.
Operating Results for Nine Months Ended September 30, 2006
Compared to September 30, 2005
|
Revenue summary |
|
Nine months ended September 30, |
|||||||||||
|
|
|
||||||||||||
|
|
|
2006 |
|
|
2005 |
|
|
$ change |
|
|
% change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
112,939 |
|
$ |
94,303 |
|
$ |
18,636 |
|
|
20 |
% |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges, loan fees, and other fees |
|
|
26,969 |
|
|
22,713 |
|
|
4,256 |
|
|
19 |
% |
|
Gain on sale of loans |
|
|
7,952 |
|
|
8,234 |
|
|
(282 |
) |
|
-3 |
% |
|
Loss on sale of investments |
|
|
(3 |
) |
|
(138 |
) |
|
135 |
|
|
-98 |
% |
|
Other income |
|
|
2,898 |
|
|
2,148 |
|
|
750 |
|
|
35 |
% |
|
Total non-interest income |
|
|
37,816 |
|
|
32,957 |
|
|
4,859 |
|
|
15 |
% |
|
|
|
$ |
150,755 |
|
$ |
127,260 |
|
$ |
23,495 |
|
|
18 |
% |
|
Tax equivalent net interest margin |
|
|
4.33 |
% |
|
4.17 |
% |
|
|
|
|
|
|
Net Interest Income
Net interest income for the nine months increased $18.636 million, or 20 percent, over the same period in 2005. Total interest income increased $43.155 million, or 32 percent, while total interest expense increased $24.519 million, or 58 percent. The increase in interest expense is primarily attributable to the volume increase in interest bearing deposits, and increases in short term interest rates during 2005 and continuing in 2006. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.33 percent which was 16 basis points higher than the 4.17 percent result for 2005.
Non-interest Income
Total non-interest income increased $4.859 million, or 15 percent in 2006. Fee income increased $4.256 million, or 19 percent, over last year, driven primarily by an increased number of loan and deposit accounts, acquisitions, and additional customer products and services offered. Gain on sale of loans decreased $282 thousand, or 3 percent, from the first nine months of last year. Loan origination volume in our markets for housing continues to remain very active by historical standards and the recent decline was expected with the slow down from unprecedented activity last year. Other income increased $750,000 of which $543,000 was non-recurring bank owned life insurance proceeds.
|
Non-interest expense summary |
|
Nine months ended September 30, |
|
||||||||||
|
|
|
|
|||||||||||
|
|
2006 |
|
2005 |
|
$ change |
|
% change |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
$ |
47,042 |
|
$ |
37,103 |
|
$ |
9,939 |
|
|
27 |
% |
|
Occupancy and equipment expense |
|
|
10,797 |
|
|
9,363 |
|
|
1,434 |
|
|
15 |
% |
|
Outsourced data processing |
|
|
2,022 |
|
|
1,270 |
|
|
752 |
|
|
59 |
% |
|
Core deposit intangibles amortization |
|
|
1,231 |
|
|
1,055 |
|
|
176 |
|
|
17 |
% |
|
Other expenses |
|
|
19,529 |
|
|
16,935 |
|
|
2,594 |
|
|
15 |
% |
|
Total non-interest expense |
|
$ |
80,621 |
|
$ |
65,726 |
|
$ |
14,895 |
|
|
23 |
% |
Non-interest Expense
Non-interest expense increased by $14.895 million, or 23 percent, from the same nine months of 2005. Compensation and benefit expense increased $9.939 million, or 27 percent. Excluding SFAS 123(R) compensation cost of $2.410 million the increase would have been 20 percent. The remaining increase in compensation and benefit expense was primarily attributed to four acquisitions during 2005, the addition of five new bank branches in 2006, and normal compensation increases for job performance and increased costs for benefits. Occupancy and equipment expense increased $1.434 million, or 15 percent, reflecting the acquisitions, cost of additional locations and facility upgrades. Other expenses increased $2.594 million, or 15 percent, primarily from acquisitions, additional marketing expenses, and costs associated with new branch offices. The efficiency ratio (non-interest expense/net interest income + non-interest income) increased to 53 percent from 52 percent for the first nine months of 2005 largely a result of the recent acquisitions and branch openings.
Allowance for Loan Loss and Non-Performing Assets
The provision for loan losses expense was $3.840 million for the first nine months of 2006, a decrease of $809,000, or 17 percent, from the same period in 2005. Net charged off loans was $42 thousand, or .001% of loans, for the nine months ended September 30, 2006.
Cash dividend
On September 27, 2006, the board of directors declared a cash dividend of $0.17 payable October 19, 2006 to shareholders of record on October 10, 2006, which is an increase of 13 percent over the $0.15 dividend declared in the third quarter of last year.
Bank Acquisitions completed after quarter end
The acquisition of Citizens Development Company a Billings, Montana-based bank holding company that owned five community banks located throughout Montana, with principal banking offices in Billings, Lewistown, Hamilton, Columbia Falls and Chinook was completed on October 1, 2006. At September 30, 2006, Citizens had total assets of $411 million, net loans of $308 million, total deposits of $361 million, and stockholders’ equity of $37 million. The acquisition of the Citizens banks will strengthen the Company’s presence in three of Montana’s strongest markets-Billings, the Flathead Valley, and the Bitterroot Valley, while expanding its operations in central Montana.
Headquartered in Kalispell, Montana, Glacier Bancorp, Inc. conducts business from Glacier Bank of Kalispell, First Security Bank of Missoula, Glacier Bank of Whitefish, Valley Bank of Helena, Big Sky Western Bank of Bozeman, Western Security Bank of Billings, all located in Montana, Mountain West Bank located in Idaho with two branches in Utah and two in Washington, 1st Bank, Evanston, Wyoming, Citizens Community Bank, Pocatello, Idaho, and First National Bank of Morgan, Utah.
This news release includes forward looking statements, which describe management’s expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of the Company’ style of banking and the strength of the local economies in which it operates. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in the Company’s public filings, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are less favorable than expected or have a more direct and pronounced effect on the Company than expected and adversely affect the company’s ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new banks and/or branches are lower than expected; (4) costs or difficulties related to the integration of acquisitions are greater than expected; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which the Company is engaged.
Visit our website at www.glacierbancorp.com
GLACIER BANCORP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
|
($ in thousands except per share data) |
|
September 30, |
|
December 31, |
|
September 30, |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(audited) |
|
(unaudited) |
|
|||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
Cash on hand and in banks |
|
$ |
113,268 |
|
|
111,418 |
|
|
114,781 |
|
|
Federal funds sold |
|
|
2,882 |
|
|
7,537 |
|
|
8,137 |
|
|
Interest bearing cash deposits |
|
|
67,672 |
|
|
13,654 |
|
|
16,636 |
|
|
Investment securities, available-for-sale |
|
|
845,304 |
|
|
970,055 |
|
|
1,026,966 |
|
|
Net loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
|
|
757,470 |
|
|
607,627 |
|
|
538,339 |
|
|
Commercial loans |
|
|
1,560,433 |
|
|
1,357,051 |
|
|
1,282,978 |
|
|
Consumer and other loans |
|
|
540,362 |
|
|
471,164 |
|
|
447,238 |
|
|
Allowance for losses |
|
|
(43,216 |
) |
|
(38,655 |
) |
|
(34,506 |
) |
|
Total loans, net |
|
|
2,815,049 |
|
|
2,397,187 |
|
|
2,234,049 |
|
|
Premises and equipment, net |
|
|
93,859 |
|
|
79,952 |
|
|
73,579 |
|
|
Real estate and other assets owned, net |
|
|
510 |
|
|
332 |
|
|
1,803 |
|
|
Accrued interest receivable |
|
|
22,822 |
|
|
19,923 |
|
|
17,515 |
|
|
Core deposit intangible, net |
|
|
7,680 |
|
|
8,015 |
|
|
7,516 |
|
|
Goodwill |
|
|
89,814 |
|
|
79,099 |
|
|
72,382 |
|
|
Other assets |
|
|
67,836 |
|
|
19,172 |
|
|
16,516 |
|
|
|
|
$ |
4,126,696 |
|
|
3,706,344 |
|
|
3,589,880 |
|
|
Liabilities and stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
Non-interest bearing deposits |
|
$ |
751,593 |
|
|
667,008 |
|
|
684,151 |
|
|
Interest bearing deposits |
|
|
2,099,742 |
|
|
1,867,704 |
|
|
1,702,977 |
|
|
Advances from Federal Home Loan Bank of Seattle |
|
|
377,104 |
|
|
402,191 |
|
|
654,368 |
|
|
Securities sold under agreements to repurchase |
|
|
162,400 |
|
|
129,530 |
|
|
111,196 |
|
|
Other borrowed funds |
|
|
171,699 |
|
|
187,692 |
|
|
12,313 |
|
|
Accrued interest payable |
|
|
10,288 |
|
|
7,437 |
|
|
5,784 |
|
|
Deferred tax liability |
|
|
3,266 |
|
|
2,746 |
|
|
7,644 |
|
|
Subordinated debentures |
|
|
115,000 |
|
|
85,000 |
|
|
85,000 |
|
|
Other liabilities |
|
|
24,594 |
|
|
23,797 |
|
|
21,047 |
|
|
Total liabilities |
|
|
3,715,686 |
|
|
3,373,105 |
|
|
3,284,480 |
|
|
Preferred shares, $.01 par value per share. 1,000,000 shares authorized None issued or outstanding |
|
|
— |
|
|
— |
|
|
— |
|
|
Common stock, $.01 par value per share. 78,125,000 shares authorized |
|
|
338 |
|
|
322 |
|
|
313 |
|
|
Paid-in capital |
|
|
310,685 |
|
|
262,383 |
|
|
240,197 |
|
|
Retained earnings - substantially restricted |
|
|
97,533 |
|
|
69,713 |
|
|
60,682 |
|
|
Accumulated other comprehensive income |
|
|
2,454 |
|
|
821 |
|
|
4,208 |
|
|
Total stockholders’ equity |
|
|
411,010 |
|
|
333,239 |
|
|
305,400 |
|
|
|
|
$ |
4,126,696 |
|
|
3,706,344 |
|
|
3,589,880 |
|
|
Number of shares outstanding |
|
|
33,844,184 |
|
|
32,172,547 |
|
|
31,345,769 |
|
|
Book value of equity per share |
|
|
12.14 |
|
|
10.36 |
|
|
9.74 |
|
|
|
|
* Certain reclassifications have been made to the 2005 financial statements to conform to the 2006 presentation |
GLACIER BANCORP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
|
|
|
Three months ended |
|
Nine months ended |
|
||||||||
|
|
|
|
|
|
|
||||||||
|
($ in thousands except per share data) |
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
||||
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
|
$ |
13,708 |
|
|
8,946 |
|
|
36,939 |
|
|
23,658 |
|
|
Commercial loans |
|
|
29,687 |
|
|
21,803 |
|
|
82,691 |
|
|
57,915 |
|
|
Consumer and other loans |
|
|
10,348 |
|
|
7,666 |
|
|
28,867 |
|
|
20,407 |
|
|
Investment securities and other |
|
|
10,149 |
|
|
11,155 |
|
|
31,280 |
|
|
34,642 |
|
|
Total interest income |
|
|
63,892 |
|
|
49,570 |
|
|
179,777 |
|
|
136,622 |
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
15,351 |
|
|
6,914 |
|
|
40,403 |
|
|
16,565 |
|
|
Federal Home Loan Bank of Seattle advances |
|
|
5,340 |
|
|
5,830 |
|
|
14,553 |
|
|
16,843 |
|
|
Securities sold under agreements to repurchase |
|
|
1,804 |
|
|
804 |
|
|
4,565 |
|
|
1,803 |
|
|
Subordinated debentures |
|
|
1,519 |
|
|
1,633 |
|
|
4,232 |
|
|
4,817 |
|
|
Other borrowed funds |
|
|
873 |
|
|
629 |
|
|
3,085 |
|
|
2,291 |
|
|
Total interest expense |
|
|
24,887 |
|
|
15,810 |
|
|
66,838 |
|
|
42,319 |
|
|
Net interest income |
|
|
39,005 |
|
|
33,760 |
|
|
112,939 |
|
|
94,303 |
|
|
Provision for loan losses |
|
|
1,320 |
|
|
1,607 |
|
|
3,840 |
|
|
4,649 |
|
|
Net interest income after provision for loan losses |
|
|
37,685 |
|
|
32,153 |
|
|
109,099 |
|
|
89,654 |
|
|
Non-interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and other fees |
|
|
7,703 |
|
|
6,575 |
|
|
21,501 |
|
|
18,020 |
|
|
Miscellaneous loan fees and charges |
|
|
1,700 |
|
|
1,806 |
|
|
5,468 |
|
|
4,693 |
|
|
Gain on sale of loans |
|
|
2,992 |
|
|
3,258 |
|
|
7,952 |
|
|
8,234 |
|
|
Loss on sale of investments |
|
|
(3 |
) |
|
(1 |
) |
|
(3 |
) |
|
(138 |
) |
|
Other income |
|
|
1,370 |
|
|
698 |
|
|
2,898 |
|
|
2,148 |
|
|
Total non-interest income |
|
|
13,762 |
|
|
12,336 |
|
|
37,816 |
|
|
32,957 |
|
|
Non-interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation, employee benefits and related expenses |
|
|
15,992 |
|
|
13,685 |
|
|
47,042 |
|
|
37,103 |
|
|
Occupancy and equipment expense |
|
|
3,875 |
|
|
3,356 |
|
|
10,797 |
|
|
9,363 |
|
|
Outsourced data processing expense |
|
|
620 |
|
|
615 |
|
|
2,022 |
|
|
1,270 |
|
|
Core deposit intangibles amortization |
|
|
411 |
|
|
388 |
|
|
1,231 |
|
|
1,055 |
|
|
Other expenses |
|
|
6,946 |
|
|
6,132 |
|
|
19,529 |
|
|
16,935 |
|
|
Total non-interest expense |
|
|
27,844 |
|
|
24,176 |
|
|
80,621 |
|
|
65,726 |
|
|
Earnings before income taxes |
|
|
23,603 |
|
|
20,313 |
|
|
66,294 |
|
|
56,885 |
|
|
Federal and state income tax expense |
|
|
7,797 |
|
|
6,738 |
|
|
22,193 |
|
|
18,700 |
|
|
Net earnings |
|
$ |
15,806 |
|
|
13,575 |
|
|
44,101 |
|
|
38,185 |
|
|
Basic earnings per share |
|
|
0.48 |
|
|
0.43 |
|
|
1.35 |
|
|
1.23 |
|
|
Diluted earnings per share |
|
|
0.47 |
|
|
0.42 |
|
|
1.33 |
|
|
1.21 |
|
|
Dividends declared per share |
|
|
0.17 |
|
|
0.15 |
|
|
0.49 |
|
|
0.44 |
|
|
Return on average assets (annualized) |
|
|
1.58 |
% |
|
1.52 |
% |
|
1.53 |
% |
|
1.51 |
% |
|
Return on average equity (annualized) |
|
|
16.24 |
% |
|
17.88 |
% |
|
16.42 |
% |
|
17.67 |
% |
|
Average outstanding shares - basic |
|
|
33,135,225 |
|
|
31,304,413 |
|
|
32,586,646 |
|
|
31,100,946 |
|
|
Average outstanding shares - diluted |
|
|
33,602,209 |
|
|
31,960,244 |
|
|
33,084,871 |
|
|
31,673,706 |
|
|
|
|
For the Three months ended 9-30-06 |
|
|||||||
|
AVERAGE BALANCE SHEET |
|
|
|
|||||||
|
|
Average Balance |
|
Interest and Dividends |
|
Average Yield/ Rate |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Real Estate Loans |
|
$ |
726,299 |
|
|
13,708 |
|
|
7.55 |
% |
|
Commercial Loans |
|
|
1,513,258 |
|
|
29,687 |
|
|
7.78 |
% |
|
Consumer and Other Loans |
|
|
522,143 |
|
|
10,348 |
|
|
7.86 |
% |
|
Total Loans |
|
|
2,761,700 |
|
|
53,743 |
|
|
7.72 |
% |
|
Tax -Exempt Investment Securities (1) |
|
|
281,787 |
|
|
3,481 |
|
|
4.94 |
% |
|
Other Investment Securities |
|
|
625,273 |
|
|
6,668 |
|
|
4.27 |
% |
|
Total Earning Assets |
|
|
3,668,760 |
|
|
63,892 |
|
|
6.97 |
% |
|
Goodwill and Core Deposit Intangible |
|
|
89,811 |
|
|
|
|
|
|
|
|
Other Non-Earning Assets |
|
|
193,102 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
3,951,673 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
NOW Accounts |
|
$ |
360,802 |
|
|
651 |
|
|
0.72 |
% |
|
Savings Accounts |
|
|
219,617 |
|
|
456 |
|
|
0.82 |
% |
|
Money Market Accounts |
|
|
607,185 |
|
|
5,221 |
|
|
3.41 |
% |
|
Certificates of Deposit |
|
|
842,722 |
|
|
9,023 |
|
|
4.25 |
% |
|
FHLB Advances |
|
|
481,741 |
|
|
5,340 |
|
|
4.40 |
% |
|
Repurchase Agreements and Other Borrowed Funds |
|
|
323,413 |
|
|
4,196 |
|
|
5.15 |
% |
|
Total Interest Bearing Liabilities |
|
|
2,835,480 |
|
|
24,887 |
|
|
3.48 |
% |
|
Non-interest Bearing Deposits |
|
|
703,737 |
|
|
|
|
|
|
|
|
Other Liabilities |
|
|
26,362 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,565,579 |
|
|
|
|
|
|
|
|
Common Stock |
|
|
332 |
|
|
|
|
|
|
|
|
Paid-In Capital |
|
|
290,190 |
|
|
|
|
|
|
|
|
Retained Earnings |
|
|
97,864 |
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income |
|
|
(2,292 |
) |
|
|
|
|
|
|
|
Total Stockholders’ Equity |
|
|
386,094 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
3,951,673 |
|
|
|
|
|
|
|
|
Net Interest Income |
|
|
|
|
$ |
39,005 |
|
|
|
|
|
Net Interest Spread |
|
|
|
|
|
|
|
|
3.49 |
% |
|
Net Interest Margin on Average Earning Assets |
|
|
|
|
|
|
|
|
4.22 |
% |
|
Return on Average Assets (annualized) |
|
|
|
|
|
|
|
|
1.58 |
% |
|
Return on Average Equity (annualized) |
|
|
|
|
|
|
|
|
16.24 |
% |
|
|
|
|
(1) |
Excludes tax effect on non-taxable investment security income |
|
|
|
For the Nine months ended 09-30-06 |
|
|||||||
|
AVERAGE BALANCE SHEET |
|
|
|
|||||||
|
|
Average Balance |
|
Interest and Dividends |
|
Average Yield/ Rate |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
Real Estate Loans |
|
$ |
672,448 |
|
|
36,939 |
|
|
7.32 |
% |
|
Commercial Loans |
|
|
1,457,040 |
|
|
82,691 |
|
|
7.59 |
% |
|
Consumer and Other Loans |
|
|
502,827 |
|
|
28,867 |
|
|
7.68 |
% |
|
Total Loans |
|
|
2,632,315 |
|
|
148,497 |
|
|
7.54 |
% |
|
Tax -Exempt Investment Securities (1) |
|
|
282,807 |
|
|
10,428 |
|
|
4.92 |
% |
|
Other Investment Securities |
|
|
661,686 |
|
|
20,852 |
|
|
4.20 |
% |
|
Total Earning Assets |
|
|
3,576,808 |
|
|
179,777 |
|
|
6.70 |
% |
|
Goodwill and Core Deposit Intangible |
|
|
87,991 |
|
|
|
|
|
|
|
|
Other Non-Earning Assets |
|
|
190,508 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
3,855,307 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
NOW Accounts |
|
$ |
365,672 |
|
|
1,823 |
|
|
0.67 |
% |
|
Savings Accounts |
|
|
232,489 |
|
|
1,535 |
|
|
0.88 |
% |
|
Money Market Accounts |
|
|
549,203 |
|
|
11,970 |
|
|
2.91 |
% |
|
Certificates of Deposit |
|
|
851,578 |
|
|
25,075 |
|
|
3.94 |
% |
|
FHLB Advances |
|
|
484,396 |
|
|
14,553 |
|
|
4.02 |
% |
|
Repurchase Agreements and Other Borrowed Funds |
|
|
318,688 |
|
|
11,882 |
|
|
4.98 |
% |
|
Total Interest Bearing Liabilities |
|
|
2,802,026 |
|
|
66,838 |
|
|
3.19 |
% |
|
Non-interest Bearing Deposits |
|
|
662,955 |
|
|
|
|
|
|
|
|
Other Liabilities |
|
|
31,143 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,496,124 |
|
|
|
|
|
|
|
|
Common Stock |
|
|
326 |
|
|
|
|
|
|
|
|
Paid-In Capital |
|
|
273,724 |
|
|
|
|
|
|
|
|
Retained Earnings |
|
|
85,832 |
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Income |
|
|
(699 |
) |
|
|
|
|
|
|
|
Total Stockholders’ Equity |
|
|
359,183 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
3,855,307 |
|
|
|
|
|
|
|
|
Net Interest Income |
|
|
|
|
$ |
112,939 |
|
|
|
|
|
Net Interest Spread |
|
|
|
|
|
|
|
|
3.51 |
% |
|
Net Interest Margin on Average Earning Assets |
|
|
|
|
|
|
|
|
4.22 |
% |
|
Return on Average Assets (annualized) |
|
|
|
|
|
|
|
|
1.53 |
% |
|
Return on Average Equity (annualized) |
|
|
|
|
|
|
|
|
16.42 |
% |
|
|
|
|
(1) |
Excludes tax effect on non-taxable investment security income |
SOURCE Glacier Bancorp, Inc.
-0- 10/26/2006
/CONTACT: Michael J. Blodnick, +1-406-751-4701, or James H. Strosahl, +1-406-751-4702, both of Glacier Bancorp, Inc./
/Web site: http://www.glacierbancorp.com /