Glacier Bancorp, Inc. Announces Results for the Quarter Ended September 30, 2017

3rd Quarter 2017 Highlights:

• Net income of $36.5 million for the current quarter, an increase of $5.5 million, or 18 percent, over the prior year third quarter net income of $31.0 million.
• Current quarter diluted earnings per share of $0.47, an increase of 18 percent from the prior year third quarter diluted earnings per share of $0.40.
• Loan growth of $164 million, or 10 percent annualized, for the current quarter.
• Net interest margin of 4.11 percent as a percentage of earning assets, on a tax equivalent basis, an 11 basis point increase over the 4.00 percent net interest margin in the third quarter of the prior year.
• Declared and paid a special dividend of $0.30 per share.  This was the 14th special dividend the Company has declared.
• Declared and paid a regular quarterly dividend of $0.21 per share.  The dividend was the 130th consecutive quarterly dividend.
• The Company announced the appointment of George R. Sutton as a Director of the Company.  Mr. Sutton is an experienced financial services attorney, a past board member of Synchrony Bank and the former Commissioner of the Utah Department of Financial Institutions.

Year-to-Date 2017 Highlights:

• Net income of $101.4 million for the first nine months of 2017, an increase of $11.3 million, or 13 percent, over the first nine months of 2016 net income of $90.1 million.
• Diluted earnings per share of $1.31, an increase of 11 percent from the prior year first nine months diluted earnings per share of $1.18.
• Organic loan growth of $532 million, or 13 percent annualized, for the first nine months of the current year.
• Net interest margin of 4.09 percent as a percentage of earning assets, on a tax equivalent basis, a 7 basis point increase over the 4.02 percent net interest margin in the first nine months of the prior year.

KALISPELL, Mont., Oct. 19, 2017 (GLOBE NEWSWIRE) -- Glacier Bancorp, Inc. GBCI reported net income of $36.5 million for the current quarter, an increase of $5.5 million, or 18 percent, from the $31.0 million of net income for the prior year third quarter.  Diluted earnings per share for the current quarter was $0.47 per share, an increase of $0.07, or 18 percent, from the prior year third quarter diluted earnings per share of $0.40.  Included in the current quarter was $245 thousand of acquisition-related expenses.  "We are very pleased to see the strong results posted by our bank Divisions.  Our dedicated employees, across the Company, turned in a strong quarter with broad based growth," said Randy Chesler, President and Chief Executive Officer.

Net income for the nine months ended September 30, 2017 was $101.4 million, an increase of $11.3 million, or 13 percent, from the $90.1 million of net income for the first nine months of the prior year.  Diluted earnings per share for the first nine months of 2017 was $1.31 per share, an increase of $0.13, or 11 percent, from the diluted earnings per share of $1.18 for the same period in the prior year.

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 September 30, 2017, Collegiate had total assets of $536 million, gross loans of $331 million and total deposits of $460 million.  The acquisition marks the Company's 19th acquisition since 2000, its eighth transaction in the past five years, and its fourth transaction in the state of Colorado.  The acquisition is subject to required regulatory approvals and other customary conditions of closing and is expected to be completed during the first quarter of 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:

The Company is managing its asset size to stay below $10 billion through the remainder of the current year to delay the impact of the Durbin Amendment for one additional year.  The Company is accomplishing this strategy 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 charges fee income in the future.

Total investment securities of $2.542 billion at September 30, 2017 decreased $260 million, or 9 percent, during the current quarter and decreased $430 million, or 14 percent, from the prior year third quarter.  Investment securities represented 26 percent of total assets at September 30, 2017 compared to 33 percent of total assets at December 31, 2016 and 32 percent of total assets at September 30, 2016.

The Company experienced another strong quarter for loan growth with an increase of $164 million, or 10 percent annualized, during the current quarter.  The loan category with the largest increase was commercial real estate loans which increased $110 million, or 3 percent.  Excluding the Foothills acquisition, the loan portfolio increased $621 million, or 11 percent, since September 30, 2016 with the primary increases coming from growth in commercial real estate and other commercial loans of $354 million and $244 million, respectively.

Non-performing assets at September 30, 2017 were $65.1 million, a decrease of $3.8 million, or 6 percent, from the prior quarter and a decrease of $13.2 million, or 17 percent, from a year ago.  Non-performing assets as a percentage of subsidiary assets at September 30, 2017 was 0.67 percent which was a decrease of 17 basis points from the prior year third quarter of 0.84 percent.  Early stage delinquencies (accruing loans 30-89 days past due) of $29.1 million at September 30, 2017 decreased $2.0 million from the prior quarter and increased $1.7 million from the prior year third quarter.  The allowance for loan and lease losses ("allowance") as a percent of total loans outstanding at September 30, 2017 was 1.99 percent, a decrease of 29 basis points from 2.28 percent at December 31, 2016 which 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.

Net charge-offs for the current quarter were $3.6 million compared to $2.4 million for the prior quarter and $478 thousand from the same quarter last year.  There was $3.3 million of current quarter provision for loan losses, compared to $3.0 million in the prior quarter and $626 thousand in the prior year third 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.

Core deposits increased $74.5 million, or 1 percent, from the prior quarter, with the largest increase in non-interest bearing deposits which increased $121.9 million, or 5 percent.  As part of the strategy to stay below $10 billion, the Company reduced the amount of wholesale deposits during the current quarter which decreased $105 million, or 36 percent, over the prior quarter.  Excluding the Foothills acquisition, core deposits increased $315 million, or 5 percent, from September 30, 2016.

Securities sold under agreements to repurchase ("repurchase agreements") of $454 million at September 30, 2017 increased $2.5 million, or 1 percent, from the prior quarter and increased $52.4 million, or 13 percent, from the prior year third quarter.  Federal Home Loan Bank ("FHLB") advances of $154 million at September 30, 2017 decreased $57.8 million from the prior quarter as a result of the Company prepaying $50 million of higher cost advances.

Tangible stockholders' equity of $1.014 billion at September 30, 2017 was stable compared to the prior quarter which was the result of the Company declaring a special and regular quarterly dividend which offset the current quarter net income.  Tangible stockholders' equity increased $25.8 million, or 3 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 and the decrease in accumulated other comprehensive income.  Tangible book value per common share at quarter end decreased $0.04 per share from the prior quarter and increased $0.08 per share from a year ago.

Cash Dividend
On September 11, 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.21 per share and a special cash dividend of $0.30 per share.  The quarterly dividend was payable September 28, 2017 to shareholders of record on September 21, 2017.  The special dividend was payable September 29, 2017 to shareholders of record on September 22, 2017.  Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Net Interest Income
In the current quarter, interest income of $96.5 million increased $2.4 million, or 3 percent, from the prior quarter and increased $10.5 million, or 12 percent, over the prior year third quarter with both increases attributable to the increase in interest from commercial loans.  Interest income on commercial loans increased $3.7 million, or 7 percent, from the prior quarter and increased $12.2 million, or 26 percent, from the prior year third quarter.  As a result of the shrinking investment portfolio, interest income from investments decreased $1.4 million from the prior quarter and $1.8 million from the prior year third quarter.

The current quarter interest expense of $7.7 million decreased $122 thousand, or 2 percent, from the prior quarter and increased $334 thousand, or 5 percent, from the prior year third quarter.  The total cost of funding (including non-interest bearing deposits) for the current quarter was 35 basis points compared to 37 basis points for the prior quarter and 37 basis points for the prior year third quarter.

The Company's net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.11 percent compared to 4.12 percent in the prior quarter.  The 1 basis points decrease in the net interest margin was the result of a 3 basis points reduction on the earning asset yield which was partially offset by a 2 basis point reduction in cost of funds.  The decrease in earning asset yield was primarily driven by the decrease in higher yielding securities and the decrease in cost of funds was driven by an increase in non-interest bearing deposits and a decrease in borrowings.  The current quarter net interest margin increased 11 basis points over the prior year third quarter net interest margin of 4.00 percent, due to the remix of earning assets to higher yielding loans. "The Bank divisions have remained focused each quarter on increasing the number of checking accounts along with higher core deposit balances," said Ron Copher, Chief Financial Officer.  "Commercial loan growth at higher yields combined with increased non-interest bearing deposits helped to improve the net interest income and net interest margin in the current year."

Non-interest Income
Non-interest income for the current quarter totaled $31.2 million, an increase of $3.5 million, or 13 percent, from the prior quarter and an increase of $2.9 million, or 10 percent, over the same quarter last year.  Service charges and other fees of $17.3 million, decreased by $188 thousand, or 1 percent, from the prior quarter primarily from seasonal activity and increased $1.0 million, or 6 percent, from the prior year third quarter which was driven by the increased number of accounts.  Gain on sale of loans for the current quarter increased $1.6 million, or 21 percent, from the prior quarter and decreased $451 thousand, or 5 percent, from the prior year third quarter.  Other income of $3.4 million, increased $1.4 million, or 68 percent, over the prior quarter and increased $1.7 million, or 92 percent over the prior year third quarter principally due to the increase in gain on sale of other real estate owned ("OREO").  Gain on sale of OREO during the third quarter of 2017 was $1.5 million compared to $369 thousand in the prior quarter and $134 thousand in the prior year third quarter.

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 $1.4 million during the third quarter of 2016. Excluding CCP expenses, non-interest expense for the current quarter increased $4.8 million, or 7 percent, over the prior year third quarter.

Compensation and employee benefits for the current quarter increased $1.8 million, or 5 percent, from the prior quarter as a result of increased cost of benefits, the Foothills acquisition, and a reduction in deferred compensation from loan production.  Compensation and employee benefits increased by $2.9 million, or 8 percent, from the prior year third quarter due to salary increases and the increased number of employees from acquisitions.  Data processing expense increased $238 thousand, or 7 percent, from the prior quarter.  Data processing expense decreased $335, or 8 percent, from the prior year third quarter as a result of decreased costs associated with CCP.  Other expenses increased $693 thousand, or 6 percent from the prior quarter with changes in several categories.  Other expense decreased $214 thousand, or 2 percent, from the prior year third quarter as a result of decreased costs associated with CCP.

Efficiency Ratio
The current quarter efficiency ratio was 53.44 percent, a 55 basis points increase from the prior quarter efficiency ratio of 52.89 percent which was the result of an increase in operating expenses that outpaced the increase in net interest income and non-interest income.  The current quarter efficiency ratio decreased 240 basis points from the prior year third quarter ratio of 55.84 percent and was attributable to the increase in net interest income primarily due to higher interest income on commercial loans.

Net Interest Income
Interest income for the first nine months of the current year increased $21.7 million, or 8 percent, from the prior year first nine months and was principally due to a $26.8 million increase in income from commercial loans which more than offset the decrease of $5.4 million in interest income on investments.

Interest expense of $22.8 million for the first nine months of the current year increased $375 thousand over the the same period in the prior year.  The total funding cost (including non-interest bearing deposits) for the first nine months of 2017 was 36 basis points compared to 38 basis points for the first nine months of 2016.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first nine months of 2017 was 4.09 percent, a 7 basis point increase from the net interest margin of 4.02 percent for the first nine months of 2016.  The increase in the margin was primarily attributable to a shift in earning assets to higher yielding loans combined with a continued increase in low cost deposits.

Non-interest Income
Non-interest income of $84.5 million for the first nine months of 2017 increased $5.2 million, or 7 percent, over the same period last year.  Service charges and other fees of $50.4 million for the first nine months of 2017 increased $3.7 million, or 8 percent, from the same period last year as a result of an increased number of deposit accounts.  The gain on sale of loans of $23.0 million for the first nine months of 2017 decreased $810 thousand, or 3 percent, from the same period last year which was due to a lower volume of refinanced mortgages.  Other income of $8.3 million for the first nine months of 2017 increased $2.3 thousand, or 38 percent, over the same period last year and was the result of an increase on gain on sale of OREO.

Expenses related to CCP were $3.6 million during the first nine months of 2016. Excluding CCP expenses, non-interest expense for the current year increased $8.8 million, or 5 percent, over the prior year.  Compensation and employee benefits for the first nine months of 2017 increased $7.2 million, or 6 percent, from the same period last year due to salary increases, vesting of restricted stock awards, and the increased number of employees from the acquired banks.  Data processing expense decreased $802 thousand, or 7 percent, from the prior year first nine months as a result of decreased costs associated with CCP.  Current year other expenses of $34.1 million decreased $1.5 million, or 4 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 $7.9 million for the first nine months of 2017, an increase of $6.7 million from the same period in the prior year.  Net charge-offs during the first nine months of 2017 were $7.9 million compared to net recoveries of $1.6 million from the first nine months of 2016.

Efficiency Ratio
The efficiency ratio of 53.92 percent for the first nine months of 2017 decreased 223 basis points from the prior year efficiency ratio of 56.15 percent for the first nine months of 2016 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, October 20, 2017.  The conference call will be accessible by telephone and through the Internet. Interested individuals are invited to listen to the call by telephone at 877-561-2748 and the conference ID is 85315870.  To participate on the webcast, log on to: https://edge.media-server.com/m6/p/8udautgt. 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 85315870 by November 3, 2017.

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; 1^st 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.