KALISPELL, Mont., Oct. 23 /PRNewswire-FirstCall/ --
Earnings Summary Three months Nine months ($ in thousands, except ended September 30, ended September 30, per share data) (unaudited) (unaudited) (unaudited) (unaudited) 2008 2007 2008 2007 Net earnings $12,785 $17,639 $48,643 $50,457 Diluted earnings per share $0.24 $0.33 $0.90 $0.94 Return on average assets (annualized) 1.01% 1.50% 1.32% 1.48% Return on average equity (annualized) 9.15% 13.76% 11.85% 13.85%
Glacier Bancorp, Inc. reported net earnings of $12.785 million for the third quarter, a decrease of $4.854 million, or 28 percent, from the $17.639 million for the third quarter of 2007. Diluted earnings per share of $.24 for the quarter decreased 27 percent from the diluted earnings per share of $.33 for the same quarter of 2007. Included in net earnings for the third quarter of 2008 is a nonrecurring charge (after-tax) of $4.602 million for other than temporary impairment with respect to investments in Federal Home Loan Mortgage Corporation ("Freddie Mac") preferred stock and Federal National Mortgage Association ("Fannie Mae") common stock. Also included in the net earnings for the third quarter is a nonrecurring gain (after-tax) of $1.0 million ($.02 per share) from the sale and relocation of Mountain West Bank's office facility in Ketchum, Idaho. "Our performance in the third quarter was much stronger than the net earnings number would indicate," said Mick Blodnick, President and Chief Executive Officer. "Considering we wrote down our entire investment in Freddie Mac and Fannie Mae and increased our loan loss provision by $7.4 million (pre-tax) over last year's third quarter validates the Company's ability to do well even in the most difficult of operating environments." Annualized return on average assets and return on average equity for the third quarter were 1.01 percent and 9.15 percent, respectively, which compares with prior year returns for the third quarter of 1.50 percent and 13.76 percent, respectively.
Net earnings of $48.643 million for the first nine months of 2008 is a decrease of $1.814 million, or 4 percent, of the same period last year. Diluted earnings per share of $0.90 versus $0.94 for the same period last year is a decrease of 4 percent. Included in earnings for the first nine months of 2007 is a nonrecurring $1.0 million gain ($1.6 million pre-tax) from the sale of Western Security Bank's Lewistown, Montana branch, which was partially offset by approximately $500 thousand of nonrecurring expenses from the merger of three of the acquired Citizens Development Company's ("CDC") five subsidiaries into Glacier Bancorp, Inc. subsidiaries. Included in earnings for the first nine months of 2008 are a nonrecurring gain of $150 thousand ($248 thousand pre-tax) from the first quarter sale of Principal Financial Group and mandatory redemption of a portion of Visa, Inc. shares, the above referenced nonrecurring gain of $1.0 million ($1.7 million pre-tax) from the sale of the Ketchum office facility, and the above-referenced nonrecurring charge of $4.6 million ($7.6 million pre-tax) related to the Company's investments in Freddie Mac and Fannie Mae stock.
As reflected in the table below, total assets at September 30, 2008 were $5.173 billion, which is $356 million, or 7 percent, greater than total assets of $4.817 billion at December 31, 2007, and $473 million, or 10 percent, greater than the September 30, 2007 total assets of $4.700 billion.
$ change $ change September December September from from 30, 31, 30, December September Assets ($ in 2008 2007 2007 31, 30, thousands) (unaudited) (audited) (unaudited) 2007 2007 Cash on hand and in banks $94,865 145,697 $128,230 (50,832) (33,365) Investments, interest bearing deposits, FHLB stock, FRB stock, and Fed Funds 867,366 782,236 803,845 85,130 63,521 Loans: Real estate 769,860 725,854 832,038 44,006 (62,178) Commercial 2,452,102 2,247,303 2,029,117 204,799 422,985 Consumer and other 700,658 638,378 625,908 62,280 74,750 Total loans 3,922,620 3,611,535 3,487,063 311,085 435,557 Allowance for loan and lease losses (65,633) (54,413) (52,616) (11,220) (13,017) Total loans net of allowance for loan and lease losses 3,856,987 3,557,122 3,434,447 299,865 422,540 Other assets 353,891 332,275 333,735 21,616 20,156 Total Assets $5,173,109 4,817,330 4,700,257 355,779 472,852
At September 30, 2008, total loans were $3.923 billion, an increase of $102 million, or 2.7 percent (11 percent annualized) over total loans of $3.821 billion at June 30, 2008, and an increase of $311 million, or 8.6 percent (11 percent annualized) over total loans of $3.612 billion at December 31, 2007. Over the first nine months of 2008, commercial loans increased the most with an increase of $205 million, or 9 percent, followed by consumer loans, which are primarily comprised of home equity loans, increasing by $62 million, or 10 percent, and real estate loans increased $44 million, or 6 percent from the fourth quarter of 2007. Since September 30, 2007, total loans have increased $436 million, or 12 percent, of which commercial loans increased $423 million, or 21 percent, consumer loans grew by $75 million, or 12 percent, while real estate loans decreased $62 million, or 7 percent.
Investment securities, including interest bearing deposits in other financial institutions and federal funds sold, have increased $85 million, or 11 percent, from December 31, 2007 and have increased $64 million, or 8 percent, from September 30, 2007. Investment securities represented 17 percent of total assets at September 30, 2008, compared to 16 percent of total assets at December 31, 2007, and 17 percent at September 30, 2007.
$ change $ change September December September from from 30, 31, 30, December September Liabilities ($ in 2008 2007 2007 31, 30, thousands) (unaudited) (audited) (unaudited) 2007 2007 Non-interest bearing deposits $754,623 $788,087 $819,711 (33,464) (65,088) Interest bearing deposits 2,282,147 2,396,391 2,547,409 (114,244) (265,262) Advances from Federal Home Loan Bank 727,243 538,949 251,908 188,294 475,335 Securities sold under agreements to repurchase and other borrowed funds 689,533 401,621 395,436 287,912 294,097 Other liabilities 42,013 45,147 51,962 (3,134) (9,949) Subordinated debentures 118,559 118,559 118,559 - - Total liabilities $4,614,118 $4,288,754 4,184,985 325,364 429,133
As of September 30, 2008, non-interest bearing deposits decreased $24 million, or 3 percent, since June 30, 2008, decreased $33 million, or 4 percent, since December 31, 2007, and decreased $65 million, or 8 percent, since September 30, 2007. Interest bearing deposits decreased $114 million, or 5 percent, from December 31, 2007. The decrease of $265 million, or 10 percent, in interest bearing deposits since September 30, 2007 includes a $201 million decrease in higher cost brokered CD's in favor of lower cost alternative funding. Federal Home Loan Bank ("FHLB") advances at September 30, 2008 increased $475 million, or 189 percent, from September 30, 2007 and increased $188 million, or 35 percent, from December 31, 2007. Repurchase agreements and other borrowed funds were $690 million at September 30, 2008, an increase of $294 million, or 74 percent, from September 30, 2007, and an increase of $288 million, or 72 percent, from December 31, 2007. Included in this latter category are U.S. Treasury Tax and Loan funds of $357 million at September 30, 2008, an increase of $134 million from December 31, 2007, and an increase of $145 million from September 30, 2007.
$ change $ change Stockholders' equity September December September from from ($ in thousands 30, 31, 30, December September except per share 2008 2007 2007 31, 30, data) (unaudited) (audited) (unaudited) 2007 2007 Common equity $564,612 $525,459 $513,033 39,153 51,579 Accumulated other comprehensive (loss) income (5,621) 3,117 2,239 (8,738) (7,860) Total stockholders' equity 558,991 528,576 515,272 30,415 43,719 Core deposit intangible, net, and goodwill (151,954) (154,264) (155,036) 2,310 3,082 Tangible stockholders' equity $407,037 374,312 $360,236 32,725 46,801 Stockholders' equity to total assets 10.81% 10.97% 10.96% Tangible stockholders' equity to total tangible assets 8.11% 8.03% 7.93% Book value per common share $10.29 $9.85 $9.61 0.44 0.68 Tangible book value per common share $7.49 $6.98 $6.72 0.51 0.77 Market price per share at end of period $24.77 $18.74 $22.52 6.03 2.25
Total stockholders' equity and book value per share amounts have increased $44 million and $.68 per share, respectively, from September 30, 2007, the result of earnings retention and exercised stock options. Tangible stockholders equity has increased $47 million, or 13 percent since September 30, 2007, with tangible stockholders' equity at 8.11 percent of total tangible assets at September 30, 2008, up from 7.93 percent at September 30, 2007. Accumulated other comprehensive income, representing net unrealized gains or losses on investment securities designated as available for sale, decreased $8 million from September 30, 2007. "We believe our decision last year to grow our capital base has been a good one," Blodnick said "This high level of capital hopefully will give us the flexibility to take advantage of opportunities as they present themselves."
Operating Results for Three Months Ended September 30, 2008 Compared to June 30, 2008 and September 30, 2007 Revenue summary ($ in thousands) Three months ended September June September 30, 30, 30, 2008 2008 2007 (unaudited) (unaudited) (unaudited) Net interest income Interest income $75,689 $74,573 $78,430 Interest expense 22,113 22,273 31,447 Net interest income 53,576 52,300 46,983 Non-interest income Service charges, loan fees, and other fees 12,800 12,223 11,853 Gain on sale of loans 3,529 4,245 3,203 Loss on investments (7,593) - - Other income 3,018 913 1,422 Total non-interest income 11,754 17,381 16,478 $65,330 $69,681 $63,461 Tax equivalent net interest margin 4.65% 4.75% 4.50% ($ in thousands) $ change $ change % change % change from from from from June September June September 30, 30, 30, 30, 2008 2007 2008 2007 Net interest income Interest income $1,116 $(2,741) 1% -3% Interest expense $(160) $(9,334) -1% -30% Net interest income 1,276 6,593 2% 14% Non-interest income Service charges, loan fees, and other fees 577 947 5% 8% Gain on sale of loans (716) 326 -17% 10% Loss on investments (7,593) (7,593) n/m n/m Other income 2,105 1,596 231% 112% Total non-interest income (5,627) (4,724) -32% -29% $(4,351) $1,869 -6% 3% n/m - not measurable Net Interest Income
Net interest income for the quarter increased $1 million, or 2 percent, from the prior quarter, and increased $7 million, or 14 percent, over the same period in 2007. While total interest income has decreased by $3 million, or 3 percent, from the same period last year, total interest expense has decreased by $9 million, or 30 percent, from the same period last year. The decrease in total interest expense is primarily attributable to rate decreases in interest bearing deposits and lower cost borrowings. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.65 percent which is 10 basis points lower than the 4.75 percent achieved for the prior quarter and 15 basis points higher than the 4.50 percent result for the third quarter of 2007. "Our cost of funds, including non-interest bearing deposits, for the quarter was 1.98%, something we feel very positive about," said Ron Copher, Chief Financial Officer.
Non-interest Income
Non-interest income for the quarter decreased $6 million, or 32 percent, from the prior quarter, and also decreased $5 million, or 29 percent, over the same period in 2007. The Other Income category of non-interest income includes the $1.7 million gain from the sale and relocation of Mountain West Bank's office facility in Ketchum, Idaho. Excluding this nonrecurring item and also excluding the nonrecurring $7.6 million other than temporary impairment charge on the Freddie Mac and Fannie Mae stock, non-interest income for the quarter increased $248 thousand from the prior quarter and $1.1 million over the same period in 2007. Fee income increased $577 thousand, or 5 percent, during the quarter, compared to the increase of $947 million, or 8 percent, over the same period last year. The fee income increases are attributable to the continued growth in the number of checking accounts and related service charges. Gain on sale of loans decreased $716 thousand, or 17 percent, for the quarter and increased $326 thousand, or 10 percent, over the same period last year.
Non-interest expense summary Three months ended ($ in thousands) September June September 30, 30, 30, 2008 2008 2007 (unaudited) (unaudited) (unaudited) Compensation and employee benefits $21,188 $20,967 $20,286 Occupancy and equipment expense 5,502 5,116 4,840 Advertising and promotion expense 1,942 1,833 1,676 Outsourced data processing 556 647 553 Core deposit intangibles amortization 764 767 827 Other expenses 7,809 7,113 7,014 Total non-interest expense $37,761 $36,443 $35,196 ($ in thousands) $ change $ change % change % change from from from from June September June September 30, 30, 30, 30, 2008 2007 2008 2007 Compensation and employee benefits $221 $902 1% 4% Occupancy and equipment expense 386 662 8% 14% Advertising and promotion expense 109 266 6% 16% Outsourced data processing (91) 3 -14% 1% Core deposit intangibles amortization (3) (63) 0% -8% Other expenses 696 795 10% 11% Total non-interest expense $1,318 $2,565 4% 7% Non-interest Expense
Non-interest expense increased by $1.3 million, or 4 percent, from the prior quarter and increased by $2.6 million, or 7 percent, from the same quarter of 2007. Compensation and benefit expense increased $221 thousand, or 1 percent, over the prior quarter, and increased $902 thousand, or 4 percent, over the same quarter of 2007. The year-over-year increase is primarily attributable to increased staffing levels, including new branches, as well as increased compensation and employee benefits, including health insurance. The number of full-time-equivalent employees has increased from 1,476 to 1,539 since September 30, 2007.
Occupancy and equipment expense increased $662 thousand, or 14 percent, while other expenses increased $795 thousand, or 11 percent, since September 30, 2007, reflecting the cost of facility upgrades, additional branch locations, and other general and administrative costs. Advertising and promotion expense increased $109 thousand, or 6 percent, from the prior quarter, and increased $266 thousand, or 16 percent, from the same quarter of 2007, such increases attributable to branch promotions and the banks continuing focus on attracting and retaining non-interest bearing and other low cost deposits.
Excluding nonrecurring items, the efficiency ratio (non-interest expense/net interest income plus non-interest income) was 53 percent for the quarter, compared to 55 percent for the 2007 third quarter, a two percentage point improvement. "Such improvement underscores the banks' success in controlling operating expenses and generating solid interest and non-interest income," said Copher.
September June December September 30, 30, 31, 30, Credit quality information 2008 2008 2007 2007 ($ in thousands) (unaudited) (unaudited) (audited) (unaudited) Allowance for loan and lease losses $65,633 $60,807 $54,413 $52,616 Real estate and other assets owned $9,506 $6,523 $2,043 $1,750 Accruing Loans 90 days or more overdue 4,924 3,700 2,685 2,467 Non-accrual loans 56,322 19,674 8,560 7,505 Total non-performing assets $70,752 $29,897 $13,288 $11,722 Allowance for loan and lease losses as a percentage of non performing assets 93% 203% 409% 449% Non-performing assets as a percentage of total bank assets 1.30% 0.58% 0.27% 0.24% Allowance for loan and lease losses as a percentage of total loans 1.67% 1.59% 1.51% 1.51% Net charge-offs as a percentage of total loans 0.128% 0.030% 0.060% 0.029% Accruing Loans 30-89 days or more overdue $25,690 $35,017 $45,490 $18,099 Allowance for Loan and Lease Losses and Non-Performing Assets
At September 30, 2008, the allowance for loan and lease losses was $65.633 million, an increase of $13 million, or 25 percent, from a year ago. The allowance was 1.67 percent of total loans outstanding at September 30, 2008, up from 1.59 percent at the prior quarter end, and up from 1.51 percent at September 30, 2007. The allowance was 93 percent of non-performing assets at September 30, 2008, down from 203 percent for the prior quarter end and down from 449 percent a year ago. The current quarter provision for loan loss expense was $8.7 million, an increase of $7.4 million from the same quarter in 2007. Charged-off loans for the current quarter exceeded recoveries of previously charged-off loans by $3.9 million. Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will determine the level of additional provision expense.
Non-performing assets as a percentage of total bank assets at September 30, 2008 were at 1.30 percent, up from .58 percent as of June 30, 2008, and up from .24 percent at September 30, 2007. "We expected non-performing assets to move up in the third quarter to around 1.00 percent of assets. Instead non- performing assets were 1.30 percent of assets as we placed a couple of construction and development credits on non-accrual because of little or no sales activity for the past 90 days," Blodnick said. "In addition, we wrote down three credits by approximately $2.5 million, increasing our net charge- offs year to date to $5 million. On the plus side, our 30-89 day past due loans continue to decline since the start of 2008. At the same time, we have provisioned $16.3 million so far this year, increasing our allowance for loan losses as a percentage of loans from 1.51 percent to 1.67 percent."
Operating Results for Nine Months Ended September 30, 2008 Compared to September 30, 2007 Nine months ended $ change % change Revenue summary September September from from ($ in thousands) 30, 30, September September 2008 2007 30, 30, (unaudited) (unaudited) 2007 2007 Net interest income Interest income $226,278 $225,643 $635 0.28% Interest expense 71,773 90,373 $(18,600) -21% Net interest income 154,505 135,270 19,235 14% Non-interest income Service charges, loan fees, and other fees 35,984 33,696 2,288 7% Gain on sale of loans 11,654 9,953 1,701 17% Loss on sale of investments (7,345) (8) (7,337) 91713% Other income 5,104 4,940 164 3% Total non-interest income 45,397 48,581 (3,184) -7% $199,902 $183,851 $16,051 9% Tax equivalent net interest margin 4.65% 4.50% Net Interest Income
Net interest income for the current year nine months increased $19 million, or 14 percent, over the same period in 2007. Total interest income increased $635 thousand, while total interest expense decreased $19 million, or 21 percent. The decrease in interest expense is primarily attributable to the rate decreases on interest bearing deposits and lower cost borrowings. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.65 percent, an increase of 15 basis points from the 4.50 percent for the same period in 2007.
Non-interest Income
Total non-interest income decreased $3 million, or 7 percent in 2008. Excluding the current year nonrecurring items, consisting of the $7.6 million charge for other than temporary impairment on the Freddie Mac and Fannie Mae securities, the $1.7 million gain from the sale and relocation of Mountain West Bank's branch in Ketchum, Idaho, the first quarter $248 thousand combined gain from the sale of Principal Financial Group stock and mandatory redemption of a portion of Visa, Inc. shares, and also excluding the prior year nonrecurring gain from the first quarter sale of Western Security Bank's Lewistown, Montana branch, non-interest income for the nine months of 2008 increased $7.2 million from the same period in 2007. Fee income for the first nine months of 2008 increased $2 million, or 7 percent, over the first nine months of 2007, driven primarily by an increased number of loan and deposit accounts, as well as additional products and service offerings. Gain on sale of loans for the first nine months of 2008 increased $2 million, or 17 percent, over the first nine months of last year.
Nine months ended $ change % change Non-interest expense summary September September from from ($ in thousands) 30, 30, September September 2008 2007 30, 30, (unaudited) (unaudited) 2007 2007 Compensation and employee benefits $63,252 $60,386 $2,866 5% Occupancy and equipment expense 15,751 14,110 1,641 12% Advertising and promotion expense 5,314 4,697 617 13% Outsourced data processing 1,870 2,045 (175) -9% Core deposit intangibles amortization 2,310 2,416 (106) -4% Other expenses 21,320 19,799 1,521 8% Total non-interest expense $109,817 $103,453 $6,364 6% Non-interest Expense
Non-interest expense increased by $6 million, or 6 percent, from the same period in 2007. The first nine months of 2007 included approximately $500,000 of non-recurring expenses and costs, including overtime, associated with the January 26, 2007 merger of three of the five CDC subsidiaries into Glacier Bancorp, Inc.'s subsidiaries, and related operating system conversions. Compensation and employee benefit expense increased $3 million, or 5 percent, from the first nine months of 2007. Occupancy and equipment expense increased $2 million, or 12 percent, while other expenses increased $2 million, or 8 percent, since September 30, 2007, reflecting the cost of additional locations and facility upgrades. Advertising and promotion expense increased $617 thousand, or 13 percent, from 2007, due primarily to branch promotions and the banks continuing focus on attracting and retaining non-interest bearing and other low cost deposits. Excluding nonrecurring items, the efficiency ratio (non-interest expense/net interest income plus non-interest income) was 53 percent for the first nine months of 2008, compared to 56 percent for the same period in 2007.
Allowance for Loan and Lease Losses and Non-Performing Assets The provision for loan loss expense was $16.3 million for the first nine months of 2008, an increase of $12.5 million, or 337 percent, from the same period in 2007. Non-performing assets as a percentage of total bank assets at September 30, 2008 were at 1.30 percent, up from .24 percent at September 30, 2007. Net charged-off loans during the nine months ended September 30, 2008 were $5.037 million, compared to $1.002 million of net charged-off loans during the nine months ended September 30, 2007.
Acquisition Announced
A definitive agreement to acquire Bank of the San Juans ("BSJ"), a community bank based in Durango, Colorado was announced on August 19, 2008. As of September 30, 2008, BSJ had total assets of $146 million, net loans of $131 million and deposits of $131 million. The acquisition, which is subject to regulatory approval and other customary conditions, is expected to close on December 1, 2008. Upon closing, BSJ will become a wholly-owned subsidiary of Glacier Bancorp, Inc.
Cash Dividend
On September 24, 2008, the board of directors declared a cash dividend of $.13 per share, payable October 16, 2008 to shareholders of record on October 7, 2008.
About Glacier Bancorp, Inc.
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 Bancorp, Inc. is headquartered in Kalispell, Montana, and conducts its operations principally through ten community bank subsidiaries. These subsidiaries include six Montana banks: Glacier Bank of Kalispell, First Security Bank of Missoula, Valley Bank of Helena, Big Sky Western Bank of Bozeman, Western Security Bank of Billings, First Bank of Montana of Lewistown; 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's 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 http://www.glacierbancorp.com/. GLACIER BANCORP, INC. CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION ($ in thousands except per September December September share data) 30, 31, 30, 2008 2007 2007 (unaudited) (audited) (unaudited) Assets: Cash on hand and in banks $94,865 145,697 128,230 Federal funds sold - 135 2,735 Interest bearing cash deposits 25,018 81,777 60,704 Investment securities, available-for-sale 842,348 700,324 740,406 Net loans receivable: Real estate loans 769,860 725,854 832,038 Commercial loans 2,452,102 2,247,303 2,029,117 Consumer and other loans 700,658 638,378 625,908 Allowance for loan and lease losses (65,633) (54,413) (52,616) Total loans, net 3,856,987 3,557,122 3,434,447 Premises and equipment, net 123,218 123,749 121,045 Real estate and other assets owned, net 9,506 2,043 1,750 Accrued interest receivable 29,486 26,168 29,893 Deferred tax asset 8,832 - 1,122 Core deposit intangible, net 11,653 13,963 14,748 Goodwill 140,301 140,301 140,288 Other assets 30,895 26,051 24,889 Total assets $5,173,109 4,817,330 4,700,257 Liabilities and stockholders' equity: Non-interest bearing deposits $754,623 788,087 819,711 Interest bearing deposits 2,282,147 2,396,391 2,547,409 Advances from Federal Home Loan Bank of Seattle 727,243 538,949 251,908 Securities sold under agreements to repurchase 189,816 178,041 181,301 Other borrowed funds 499,717 223,580 214,135 Accrued interest payable 9,810 13,281 18,742 Deferred tax liability - 481 - Subordinated debentures 118,559 118,559 118,559 Other liabilities 32,203 31,385 33,220 Total liabilities 4,614,118 4,288,754 4,184,985 Preferred shares, $.01 par value per share. 1,000,000 shares authorized None issued or outstanding - - - Common stock, $.01 par value per share. 117,187,500 shares authorized 543 536 536 Paid-in capital 387,331 374,728 373,474 Retained earnings - substantially restricted 176,738 150,195 139,023 Accumulated other comprehensive (loss) income (5,621) 3,117 2,239 Total stockholders' equity 558,991 528,576 515,272 Total liabilities and stockholders' equity $5,173,109 4,817,330 4,700,257 Number of shares outstanding 54,332,527 53,646,480 53,612,211 Book value of equity per share 10.29 9.85 9.61 GLACIER BANCORP, INC. CONSOLIDATED STATEMENT OF OPERATIONS ($ in thousands except per share Three months ended Nine months ended data) September 30, September 30, 2008 2007 2008 2007 (unaudited) (unaudited) (unaudited) (unaudited) Interest income: Real estate loans $12,801 15,617 37,792 45,259 Commercial loans 41,212 40,379 124,845 115,201 Consumer and other loans 11,967 12,423 35,864 35,607 Investment securities and other 9,709 10,011 27,777 29,576 Total interest income 75,689 78,430 226,278 225,643 Interest expense: Deposits 12,518 21,449 42,861 60,786 Federal Home Loan Bank of Seattle advances 2,337 5,027 12,876 14,119 Securities sold under agreements to repurchase 919 2,012 3,068 5,623 Subordinated debentures 1,852 2,023 5,578 5,653 Other borrowed funds 4,487 936 7,390 4,192 Total interest expense 22,113 31,447 71,773 90,373 Net interest income 53,576 46,983 154,505 135,270 Provision for loan losses 8,715 1,315 16,257 3,720 Net interest income after provision for loan losses 44,861 45,668 138,248 131,550 Non-interest income: Service charges and other fees 11,285 10,055 31,355 27,801 Miscellaneous loan fees and charges 1,515 1,798 4,629 5,895 Gain on sale of loans 3,529 3,203 11,654 9,953 Loss on sale of investments (7,593) - (7,345) (8) Other income 3,018 1,422 5,104 4,940 Total non-interest income 11,754 16,478 45,397 48,581 Non-interest expense: Compensation, employee benefits and related expenses 21,188 20,286 63,252 60,386 Occupancy and equipment expense 5,502 4,840 15,751 14,110 Advertising and promotion expense 1,942 1,676 5,314 4,697 Outsourced data processing expense 556 553 1,870 2,045 Core deposit intangibles amortization 764 827 2,310 2,416 Other expenses 7,809 7,014 21,320 19,799 Total non-interest expense 37,761 35,196 109,817 103,453 Earnings before income taxes 18,854 26,950 73,828 76,678 Federal and state income tax expense 6,069 9,311 25,185 26,221 Net earnings $12,785 17,639 48,643 50,457 Basic earnings per share 0.23 0.33 0.90 0.95 Diluted earnings per share 0.24 0.33 0.90 0.94 Dividends declared per share 0.13 0.13 0.39 0.37 Return on average assets (annualized) 1.01% 1.50% 1.32% 1.48% Return on average equity (annualized) 9.15% 13.76% 11.85% 13.85% Average outstanding shares - basic 54,104,560 53,566,477 53,975,602 53,086,380 Average outstanding shares - diluted 54,305,005 54,004,828 54,148,583 53,604,922 AVERAGE BALANCE SHEET For the three months ended 9-30-08 (Unaudited - $ in Thousands) Interest Average Average and Yield/ ASSETS Balance Dividends Rate Real Estate Loans $752,329 12,801 6.81% Commercial Loans 2,429,102 41,212 6.73% Consumer and Other Loans 683,876 11,967 6.94% Total Loans 3,865,307 65,980 6.77% Tax -Exempt Investment Securities (1) 260,093 3,199 4.92% Other Investment Securities 563,454 6,510 4.62% Total Earning Assets 4,688,854 75,689 6.46% Goodwill and Core Deposit Intangible 152,392 Other Non-Earning Assets 219,072 TOTAL ASSETS $5,060,318 LIABILITIES AND STOCKHOLDERS' EQUITY NOW Accounts $457,774 722 0.63% Savings Accounts 273,901 443 0.64% Money Market Accounts 742,205 3,811 2.04% Certificates of Deposit 841,248 7,542 3.56% FHLB Advances 301,821 2,338 3.07% Repurchase Agreements and Other Borrowed Funds 1,098,834 7,257 2.62% Total Interest Bearing Liabilities 3,715,783 22,113 2.36% Non-interest Bearing Deposits 748,633 Other Liabilities 39,890 Total Liabilities 4,504,306 Common Stock 541 Paid-In Capital 381,577 Retained Earnings 178,502 Accumulated Other Comprehensive Income (4,608) Total Stockholders' Equity 556,012 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,060,318 Net Interest Income $53,576 Net Interest Spread 4.10% Net Interest Margin 4.53% Net Interest Margin (Tax Equivalent) 4.65% Return on Average Assets (annualized) 1.01% Return on Average Equity (annualized) 9.15% AVERAGE BALANCE SHEET For the nine months ended 9-30-08 (Unaudited - $ in Thousands) Interest Average Average and Yield/ ASSETS Balance Dividends Rate Real Estate Loans $733,345 37,792 6.87% Commercial Loans 2,352,238 124,844 7.07% Consumer and Other Loans 661,059 35,864 7.23% Total Loans 3,746,642 198,500 7.06% Tax -Exempt Investment Securities (1) 258,411 9,547 4.93% Other Investment Securities 541,314 18,231 4.49% Total Earning Assets 4,546,367 226,278 6.64% Goodwill and Core Deposit Intangible 153,186 Other Non-Earning Assets 229,173 TOTAL ASSETS $4,928,726 LIABILITIES AND STOCKHOLDERS' EQUITY NOW Accounts $463,094 2,332 0.67% Savings Accounts 271,385 1,436 0.70% Money Market Accounts 768,387 13,665 2.37% Certificates of Deposit 852,116 25,428 3.98% FHLB Advances 531,961 12,876 3.22% Repurchase Agreements and Other Borrowed Funds 709,516 16,036 3.01% Total Interest Bearing Liabilities 3,596,459 71,773 2.66% Non-interest Bearing Deposits 739,962 Other Liabilities 44,025 Total Liabilities 4,380,446 Common Stock 539 Paid-In Capital 379,107 Retained Earnings 167,237 Accumulated Other Comprehensive Income 1,397 Total Stockholders' Equity 548,280 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,928,726 Net Interest Income $154,505 Net Interest Spread 3.98% Net Interest Margin 4.53% Net Interest Margin (Tax Equivalent) 4.65% Return on Average Assets (annualized) 1.32% Return on Average Equity (annualized) 11.85% (1) Excludes tax effect of $4,226,000 and $1,416,000 on non-taxable investment security income for the year and quarter ended September 30, 2008, respectively.
