Unassociated Document

Glacier Bancorp, Inc. (Nasdaq: GBCI) reported net earnings of $16.093 million, an increase of $2.5 million, or 18 percent, over the $13.629 million for the first quarter of 2006. Diluted earnings per share for the quarter of $.30 is an increase of 7 percent over the diluted earnings per share of $.28 for the first quarter of 2006. Net earnings was reduced by $547,230, or $.01 per share, for share-based compensation expense. "For the first time in the past three years, we experienced a more normalized first quarter," said Mick Blodnick, President and Chief Executive Officer. "Loan growth was flat and our net interest margin decreased slightly. However, over the last six quarters our net interest margin has been very consistent within a tight eight basis point range, up or down." Annualized return on average assets and return on average equity for the quarter were 1.48 percent and 14.02 percent, respectively, which compares with prior year returns for the first quarter of 1.48 percent and 16.21 percent.

Included in net earnings for the quarter is a $1.0 million gain (pre-tax gain of $1.6 million) from the January 19, 2007 sale of Western Security Bank's Lewistown branch as a condition imposed by bank regulators to complete the acquisition of Citizens Development Company ("CDC"). On January 26, 2007, three of the five CDC subsidiaries, i.e., Citizens State Bank, First Citizens Bank of Billings, and First Citizens Bank, N.A., were merged into Company subsidiaries, i.e., First Security Bank of Missoula, Western Security Bank and Glacier Bank, respectively. Costs associated with merging and converting these CDC subsidiaries, the Lewistown branch divestiture and other non-recurring expenses during the quarter were nearly $500 thousand. During June 2007, the remaining two CDC subsidiaries will be merged together.

	March 31,			December 31,			March 31,			$ change from			$ change from
	2007			2006			2006			December 31,			March 31,
Assets	(unaudited)			(audited)			(unaudited)			2006			2006
($ in
thousands)

Cash on hand
and in
banks	$	123,697			136,591			105,474			(12,894	)		18,223
Investments,
interest
bearing
deposits,
FHLB
stock,
FRB
stock,
and Fed
Funds		864,228			862,063			953,880			2,165			(89,652	)
Loans:
Real estate		766,421			789,843			638,529			(23,422	)		127,892
Commercial		1,851,139			1,850,417			1,435,731			722			415,408
Consumer
and other		590,126			574,523			493,023			15,603			97,103
Total
loans		3,207,686			3,214,783			2,567,283			(7,097	)		640,403
Allowance
for loan
losses		(50,540	)		(49,259	)		(39,851	)		(1,281	)		(10,689	)
Total
loans
net of
allowance
for
losses		3,157,146			3,165,524			2,527,432			(8,378	)		629,714
Other assets		313,942			307,120			216,003			6,822			97,939
Total
Assets	$	4,459,013			4,471,298			3,802,789			(12,285	)		656,224

Total loans decreased $7 million from December 31, 2006. Commercial loans have increased $722 thousand, or 0.04 percent, real estate loans decreased $23 million, or 3 percent, and consumer loans grew by $16 million, or 3 percent. "First quarter loan production, although down 5 percent from last year's record setting quarter, was far better than expected," Blodnick said. "However, in addition to the $16 million in loans sold in the branch divestiture, we experienced an unprecedented level of loan payoffs in the quarter. Payoffs of loans with balances greater than $1 million totaled $83 million and was a headwind that was tough to overcome." Total loans have increased $640 million, or 25 percent, from March 31, 2006, with all loan categories showing increases. Commercial loans grew the most with an increase of $415 million, or 29 percent, followed by real estate loans which increased $128 million, or 20 percent, and consumer loans, which are primarily comprised of home equity loans, increasing by $97 million, or 20 percent.

Investment securities, including interest bearing deposits in other financial institutions and federal funds sold, have increased $2 million from December 31, 2006, or 0.25 percent, and have declined $90 million, or 9 percent, from March 31, 2006. Investment securities at March 31, 2007 represented 19% of total assets versus 25% the prior year. "Cash flow from the investment portfolio continues to fund higher yielding loan growth as well as reduce higher cost borrowings, thereby sustaining the net interest margin," said Ron Copher, Chief Financial Officer.

	March 31,		December 31,		March 31,		$ change from			$ change from
	2007		2006		2006		December 31,			March 31,
Liabilities	(unaudited)		(audited)		(unaudited)		2006			2006
($ in
thousands)

Non-interest
bearing
deposits	$	788,426	$	829,355	$	683,201		(40,929	)		105,225
Interest
bearing
deposits		2,410,668		2,378,178		2,010,198		32,490			400,470
Advances from
Federal Home
Loan Bank		455,625		307,522		505,209		148,103			(49,584	)
Securities
sold under
agreements
to repurchase
and other
borrowed
funds		168,421		338,986		134,981		(170,565	)		33,440
Other
liabilities		44,878		42,555		37,178		2,323			7,700
Subordinated
debentures		118,559		118,559		87,631		--			30,928
Total
liabili-
ties	$	3,986,577		4,015,155	$	3,458,398		(28,578	)		528,179

Non-interest bearing deposits have decreased $41 million, or 5 percent, since December 31, 2006, and increased by $105 million, or 15 percent, since March 31, 2006. Increasing non-interest bearing deposits continues to be a primary focus of each of our banks. Interest bearing deposits increased $32 million from December 31, 2006, with such change attributable to growth in broker originated certificates of deposits. The March 31, 2007 balance of interest bearing deposits includes $205 million in broker originated CD's and $2 million in Internet generated National Market CD's. Since March 31, 2006, interest bearing deposits increased $400 million, or 20 percent, net of a decrease of $83 million in CD's from broker and Internet sources. Federal Home Loan Bank (FHLB) advances increased $148 million, and repurchase agreements and other borrowed funds decreased $171 million from December 31, 2006, primarily from the redemption of $162 million in U.S. Treasury Tax and Loan Term Auction funds. FHLB advances are $50 million less than the March 31, 2006 balances due primarily to the above described increases in deposits.

	March 31,			December 31,			March 31,			$ change from			$ change from
	2007			2006			2006			December 31,			March 31,
Stock-	(unaudited)			(audited)			(unaudited)			2006			2006
holders'
equity
($ in
thousands
except
per share
data)

Common
equity	$	468,646		$	453,074		$	344,259			15,572			124,387
Accumulated
other
comprehensive
income		3,790			3,069			132			721			3,658
Total
stock-
holders'
equity		472,436			456,143			344,391			16,293			128,045
Core deposit
intangible,
net, and
goodwill		(146,164	)		(144,466	)		(86,693	)		(1,698	)		(59,471	)
Tangible
stock-
holders'
equity	$	326,272		$	311,677		$	257,698			14,595			68,574

Stockholders'
equity
to total
assets		10.60	%		10.21	%		9.06	%
Tangible
stockholders'
equity to total
tangible assets		7.57	%		7.21	%		6.93	%
Book value per
common share	$	8.97		$	8.72		$	7.11			0.25			1.86
Market price per
share at end
of quarter	$	24.04		$	24.44		$	20.70			(0.40	)		3.34

Total equity and book value per share amounts have increased $16 million and $.25 per share, respectively, from December 31, 2006, the result of earnings retention, and stock options exercised. Accumulated other comprehensive income, representing net unrealized gains on securities designated as available for sale, increased $721 thousand during the quarter, such increase primarily a function of interest rate changes and the decreased balance of securities.

Revenue summary
(Unaudited - $ in thousands)	Three months ended March 31,
	2007			2006			$ change			% change

Net interest income	$	43,091		$	36,308		$	6,783			19	%

Non-interest income
Service charges, loan fees, and
other fees		10,085			8,217			1,868			23	%
Gain on sale of loans		3,042			2,190			852			39	%
Loss on sale of investments		(8	)		--			(8	)		n/m
Other income		2,573			749			1,824			244	%
Total non-interest income		15,692			11,156			4,536			41	%
	$	58,783		$	47,464		$	11,319			24	%

Tax equivalent net interest margin		4.36	%		4.39	%

Net interest income for the quarter increased $6.783 million, or 19 percent, over the same period in 2006, and decreased $2.258 million, or 5 percent, from the fourth quarter of 2006. Total interest income increased $15.968 million from the prior year's quarter, or 29 percent, while total interest expense was $9.185 million, or 47 percent higher. The increase in interest expense is primarily attributable to the volume increase in interest bearing liabilities, and the inverted to flat yield curve on the short end and flat on intermediate to long-term maturities. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.36 percent which was 3 basis points lower than the 4.39 percent result for the first quarter of 2006.

Fee income increased $1.868 million, or 23 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 increased $852 thousand, or 39 percent, from the first quarter of last year. Other income of $2.573 million includes the $1.6 million gain from the sale of the Lewistown branch of Western Security Bank. Loan origination activity for housing construction and purchases remains strong in our markets.

Non-interest expense summary
(Unaudited - $ in thousands)	Three months ended March 31,
	2007		2006		$ change		% change
Compensation and employee benefits	$	19,506	$	15,311	$	4,195		27	%
Occupancy and equipment expense		4,457		3,491		966		28	%
Outsourced data processing		812		724		88		12	%
Core deposit intangibles amortization		780		420		360		86	%
Other expenses		7,627		5,881		1,746		30	%
Total non-interest expense	$	33,182	$	25,827	$	7,355		28	%

Non-interest expense increased by $7.355 million, or 28 percent, from the same quarter of 2006. Compensation and benefit expense increased $4.195 million, or 27 percent, which is primarily attributable to increased staffing levels, including staffing from the acquisitions of First National Bank of Morgan and CDC during 2006, new branches, as well as compensation and merit increases for job performance, increased cost of benefits, and overtime associated with the three CDC banks mergers and related conversions of their operating systems in the first quarter of 2007. The number of full-time-equivalent employees has increased from 1,147 to 1,395, a 22 percent increase since March 31, 2006. Occupancy and equipment expense increased $966 thousand, or 28 percent, reflecting the bank acquisitions, cost of additional branch locations and facility upgrades. Other expenses increased $1.746 million, or 30 percent, primarily from acquisitions, data conversions, additional marketing expenses, and costs associated with new branch offices. The efficiency ratio (non-interest expense/net interest income + non-interest income) was 56 percent for the 2007 first quarter, up from 54 percent for the 2006 first quarter.

	March 31,			December 31,			March 31,
Credit quality information	2007			2006			2006
($ in thousands)	(unaudited)			(audited)			(unaudited)

Allowance for loan losses	$	50,540		$	49,259		$	39,851

Non-performing assets		11,306			8,894			10,325

Allowance as a percentage of non
performing assets		447	%		554	%		386	%

Non-performing assets as a percentage
of total bank assets		0.25	%		0.19	%		0.27	%

Allowance as a percentage of total
loans		1.58	%		1.53	%		1.55	%

Net recoveries (charge-offs) as a
percentage of loans		0.003	%		(0.021	%)		0.001	%

"A continued bright spot for the Company has been our credit quality," said Blodnick. "The banks have remained diligent in the management of their loan portfolios and the first quarter numbers validate this commitment." Non-performing assets as a percentage of total assets at March 31, 2007 were at .25 percent, down from .27 percent at March 31, 2006, but increasing slightly from .19 percent at December 31, 2006. The Company ratios compare favorably to the Federal Reserve Bank Peer Group average of .43 percent at December 31, 2006, the most recent information available. The allowance for loan losses was 447 percent of non-performing assets at March 31, 2007, up from 386 percent a year ago. The allowance, including $6.091 million from acquisitions, has increased $10.689 million, or 27 percent, from a year ago. The allowance of $50.540 million, is 1.58 percent of March 31, 2007 total loans outstanding, up slightly from the 1.55 percent a year ago. The first quarter provision for loan losses expense was $1.195 million, an increase of $30 thousand from the same quarter in 2006, and was a decrease of $157 thousand from the fourth quarter of 2006. Recovery of previously charged-off loans exceeded amounts charged-off during the quarter by $86,000. Loan growth, average loan size, and credit quality considerations will determine the level of additional provision expense.

Glacier Bancorp, Inc. is a regional multi-bank holding company providing commercial banking services in 53 communities in Montana, Idaho, Utah, Washington, and Wyoming. Glacier is headquartered in Kalispell, Montana, and conducts its operations principally through twelve banking subsidiaries. These subsidiaries include eight Montana banks: Glacier Bank of Kalispell, Glacier Bank of Whitefish, First Security Bank of Missoula, Valley Bank of Helena, Big Sky Western Bank of Bozeman, Western Security Bank of Billings, First National Bank of Lewistown, Western Bank of Chinook, N.A.; as well as Mountain West Bank in Idaho, Utah and Washington; 1st Bank in Wyoming, Citizens Community Bank in Idaho, and First National Bank of Morgan in 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.

($ in thousands except per	March 31,			December 31,			March 31,
share data)	2007			2006			2006
	(unaudited)			(audited)*			(unaudited)*
Assets:
Cash on hand and in banks	$	123,697			136,591			105,474
Federal funds sold		2,752			6,125			9,155
Interest bearing cash deposits		88,112			30,301			21,343

Investment securities,
available-for-sale		773,364			825,637			923,382

Net loans receivable:
Real estate loans		766,421			789,843			638,529
Commercial loans		1,851,139			1,850,417			1,435,731
Consumer and other loans		590,126			574,523			493,023
Allowance for losses		(50,540	)		(49,259	)		(39,851	)
Total loans, net		3,157,146			3,165,524			2,527,432

Premises and equipment, net		115,123			110,759			86,179
Real estate and other assets
owned, net		1,727			1,484			778
Accrued interest receivable		25,340			25,729			19,317
Core deposit intangible, net		13,861			14,750			7,594
Goodwill		132,303			129,716			79,099
Other assets		25,588			24,682			23,036
	$	4,459,013			4,471,298			3,802,789

Liabilities and stockholders'
equity:
Non-interest bearing deposits	$	788,426			829,355			683,201
Interest bearing deposits		2,410,668			2,378,178			2,010,198
Advances from Federal Home
Loan Bank of Seattle		455,625			307,522			505,209
Securities sold under
agreements to repurchase		162,491			170,216			132,207
Other borrowed funds		5,930			168,770			2,774
Accrued interest payable		12,980			11,041			8,537
Deferred tax liability		94			1,927			2,098
Subordinated debentures		118,559			118,559			87,631
Other liabilities		31,804			29,587			26,543
Total liabilities		3,986,577			4,015,155			3,458,398

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		527			523			485
Paid-in capital		350,065			344,265			265,603
Retained earnings -
substantially restricted		118,054			108,286			78,171
Accumulated other
comprehensive income		3,790			3,069			132
Total stockholders' equity		472,436			456,143			344,391
	$	4,459,013			4,471,298			3,802,789
Number of shares outstanding		52,656,162			52,302,820			48,471,168
Book value of equity per
share		8.97			8.72			7.11

($ in thousands except per share data)	Three months ended March 31,
	2007			2006
	(unaudited)			(unaudited)*
Interest income:
Real estate loans	$	14,441			10,989
Commercial loans		36,652			25,525
Consumer and other loans		11,314			8,865
Investment securities and other		9,513			10,573
Total interest income		71,920			55,952
Interest expense:
Deposits		18,807			11,291
Federal Home Loan Bank of Seattle
advances		5,042			4,796
Securities sold under agreements
to repurchase		1,887			1,290
Subordinated debentures		1,814			1,429
Other borrowed funds		1,279			838
Total interest expense		28,829			19,644
Net interest income		43,091			36,308
Provision for loan losses		1,195			1,165
Net interest income after provision
for loan losses		41,896			35,143
Non-interest income:
Service charges and other fees		8,263			6,406
Miscellaneous loan fees and
charges		1,822			1,811
Gain on sale of loans		3,042			2,190
Loss on sale of investments		(8	)		--
Other income		2,573			749
Total non-interest income		15,692			11,156
Non-interest expense:
Compensation, employee benefits
and related expenses		19,506			15,311
Occupancy and equipment expense		4,458			3,491
Outsourced data processing expense		812			724
Core deposit intangibles
amortization		780			420
Other expenses		7,627			5,881
Total non-interest expense		33,183			25,827
Earnings before income taxes		24,405			20,472
Federal and state income tax expense		8,312			6,843
Net earnings	$	16,093			13,629

AVERAGE BALANCE SHEET	For the Three months ended 3-31-07
(Unaudited - $ in Thousands)			Interest		Average
	Average		and		Yield/
ASSETS	Balance		Dividends		Rate
Real Estate Loans	$	769,196		14,441		7.51	%
Commercial Loans		1,852,657		36,652		8.02	%
Consumer and Other Loans		578,166		11,314		7.94	%
Total Loans		3,200,019		62,407		7.91	%
Tax-Exempt Investment Securities (1)		280,205		3,435		4.90	%
Other Investment Securities		564,311		6,078		4.31	%
Total Earning Assets		4,044,535		71,920		7.11	%
Goodwill and Core Deposit
Intangible		143,827
Other Non-Earning Assets		232,081
TOTAL ASSETS	$	4,420,443
LIABILITIES
AND STOCKHOLDERS' EQUITY
NOW Accounts	$	433,209		1,091		1.02	%
Savings Accounts		266,579		658		1.00	%
Money Market Accounts		707,579		6,414		3.68	%
Certificates of Deposit		944,895		10,644		4.57	%
FHLB Advances		419,216		5,042		4.88	%
Repurchase Agreements
and Other Borrowed Funds		391,044		4,980		5.17	%
Total Interest Bearing
Liabilities		3,162,522		28,829		3.70	%
Non-interest Bearing Deposits		747,585
Other Liabilities		44,651
Total Liabilities		3,954,758
Common Stock		525
Paid-In Capital		345,966
Retained Earnings		116,514
Accumulated Other
Comprehensive Income		2,680
Total Stockholders' Equity		465,685
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	4,420,443

Basic earnings per share	0.31		0.28
Diluted earnings per share	0.30		0.28
Dividends declared per share	0.12		0.11
Return on average assets (annualized)	1.48	%	1.48	%
Return on average equity (annualized)	14.02	%	16.21	%
Average outstanding shares - basic	52,500,395		48,378,237
Average outstanding shares - diluted	53,239,346		49,239,701

Net Interest Income	$	43,091
Net Interest Spread			3.41	%
Net Interest Margin
on Average Earning Assets			4.32	%
Return on Average Assets
(annualized)			1.48	%
Return on Average Equity
(annualized)			14.02	%

Earnings Summary (Unaudited - $ in thousands, except per share data)	Three months ended March 31,
	2007			2006

Net earnings	$	16,093		$	13,629
Diluted earnings per share	$	0.30		$	0.28
Return on average assets (annualized)		1.48	%		1.48	%
Return on average equity (annualized)		14.02	%		16.21	%