Glacier Bancorp(GBCI) - 2020 Q3 - Quarterly Report

Part I. Financial Information Financial Statements Presents unaudited condensed consolidated financial statements for Glacier Bancorp, Inc., detailing financial condition, operations, and cash flows, including notes on CECL adoption Unaudited Condensed Consolidated Statements of Financial Condition Total assets grew to $17.93 billion from $13.68 billion, driven by increased loans and debt securities, with total deposits reaching $14.30 billion Condensed Consolidated Statements of Financial Condition (Selected Items) | Financial Item | September 30, 2020 ($ in thousands) | December 31, 2019 ($ in thousands) | | :--- | :--- | :--- | | Total Assets | $17,926,067 | $13,683,999 | | Cash and cash equivalents | $769,879 | $330,961 | | Total debt securities | $4,319,057 | $2,799,863 | | Loans receivable, net | $11,454,179 | $9,388,320 | | Goodwill | $514,013 | $456,418 | | Total Liabilities | $15,670,978 | $11,723,266 | | Total deposits | $14,299,888 | $10,776,457 | | Total Stockholders' Equity | $2,255,089 | $1,960,733 | Unaudited Condensed Consolidated Statements of Operations Q3 2020 net income increased 51% to $77.8 million, with diluted EPS at $0.81, driven by higher net interest income and loan sale gains Key Operating Results (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $151,403 | $131,448 | $433,991 | $366,956 | | Credit loss expense | $2,869 | $— | $39,165 | $57 | | Total non-interest income | $53,667 | $43,049 | $128,163 | $102,357 | | Net Income | $77,757 | $51,610 | $184,540 | $153,134 | | Diluted EPS | $0.81 | $0.57 | $1.95 | $1.76 | Notes to Unaudited Condensed Consolidated Financial Statements Details significant accounting policies, including CECL adoption resulting in a $12.3 million reduction to retained earnings, and the SBAZ acquisition - The company adopted the new CECL accounting standard (ASU 2016-13) on January 1, 2020, using a modified retrospective approach, resulting in a net reduction of $12,347,000 in retained earnings, reflecting an increase in the allowance for credit losses on loans and off-balance sheet exposures[72] - On February 29, 2020, the company acquired State Bank Corp. (SBAZ) for a preliminary value of $125.9 million, paid through stock and cash, resulting in $57.6 million of goodwill and adding approximately $745 million in assets and $603 million in deposits[154][155][156] Allowance for Credit Losses (ACL) Activity - YTD Sep 30, 2020 (in thousands) | Category | Balance at Jan 1, 2020 | Impact of CECL Adoption | Credit Loss Expense | Net Charge-offs | Balance at Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total | $124,490 | $3,720 | $39,165 | ($2,872) | $164,552 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Analyzes financial performance and condition, highlighting strong earnings growth, COVID-19 impacts including PPP loans, and core deposit growth - Net income for Q3 2020 was $77.8 million ($0.81 per diluted share), a 51% increase from Q3 2019, driven by strong net interest income and a significant increase in gain on sale of loans[166] - The company actively managed the impact of the COVID-19 pandemic by originating 16,090 PPP loans totaling $1.472 billion and providing short-term payment deferrals on $1.515 billion of loans, of which only $466 million remained deferred as of September 30, 2020[169][170] - Core deposits increased by $2.84 billion (26%) year-over-year, excluding the SBAZ acquisition, attributed to PPP loan proceeds and an increased customer savings rate, allowing the company to fund asset growth and reduce higher-cost borrowings[176] Credit Quality Metrics | Metric | Q3 2020 | Q2 2020 | Q3 2019 | | :--- | :--- | :--- | :--- | | Credit Loss Expense ($ in thousands) | $2,869 | $13,552 | $0 | | Net Charge-offs ($ in thousands) | $826 | $1,233 | $3,519 | | Non-Performing Assets to Subsidiary Assets (%) | 0.25% | 0.27% | 0.40% | | ACL as a % of Total Loans (%) | 1.42% | 1.42% | 1.32% | Quantitative and Qualitative Disclosure about Market Risk No material changes in the company's market risk profile were identified compared to the 2019 Annual Report on Form 10-K - There were no material changes in the company's market risk profile from the disclosures made in the 2019 Annual Report on Form 10-K[275] Controls and Procedures CEO and CFO concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2020[276] - No material changes to the company's internal control over financial reporting occurred during the third quarter of 2020[277] Part II. Other Information Legal Proceedings Pending legal proceedings are not expected to materially affect the company's financial condition or results of operations - The company states that pending legal proceedings are not expected to have a material adverse effect on its financial condition or operations[279] Risk Factors A new material risk factor addresses the COVID-19 pandemic's potential adverse impact on customers, operations, and stock price due to market volatility - A new material risk factor has been added concerning the effects of the COVID-19 pandemic, which could adversely impact customers' future results and the company's stock price due to unprecedented market volatility and economic disruption[281] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - The company reported no unregistered sales of equity securities or use of proceeds during the period[282] Other Information Provides material updates to the regulatory environment, detailing recent COVID-19 related legislation including the CARES Act and PPP - The company highlights new legislation related to COVID-19, including the CARES Act and the Paycheck Protection Program, as material updates to its regulatory environment[284] Exhibits Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Interactive Data Files (XBRL) - The report includes required CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files[287]