Glacier Bancorp(US:GBCI)2022-02-22 16:00Company Overview - As of December 31, 2021, Glacier Bancorp, Inc. operates 224 locations across 8 states, with a focus on retail and business banking services[19]. - The company serves 75 counties, holding 26.8% of FDIC insured deposits in Montana, 14.4% in Wyoming, and 8.0% in Idaho as of June 30, 2021[24]. - Glacier Bancorp employs 3,559 individuals, with 3,270 in full-time positions, emphasizing a commitment to employee relations and retention strategies[25]. - The company has 224 properties with a total net book value of $293.949 million as of December 31, 2021, including 179 owned and 45 leased properties[132]. - The company's stock closed at $56.70 on December 31, 2021, with approximately 1,909 shareholders of record[136]. - The company has not made any stock repurchases during 2021, indicating a focus on maintaining capital[137]. Acquisitions and Growth Strategy - The company has completed several acquisitions in the last five years, including Altabancorp with total assets of $4.13 billion, loans of $1.90 billion, and deposits of $3.27 billion as of October 1, 2021[20]. - The company aims for profitable growth through internal expansion and selective acquisitions, focusing on markets in the Rocky Mountain and Western states[20]. - The Company acquired Altabancorp, enhancing its presence in Utah, with total assets of $4.132 billion, marking the largest acquisition in its history[156]. Financial Performance - Total assets increased to $25.94 billion in 2021, up from $18.50 billion in 2020, representing a 40.2% growth rate[151]. - Net interest income for 2021 was $662.52 million, a 10.5% increase from $599.75 million in 2020[151]. - Net income for 2021 reached $284.76 million, reflecting a 6.9% increase compared to $266.40 million in 2020[151]. - Basic earnings per share rose to $2.87 in 2021, up 2.1% from $2.81 in 2020[151]. - Total loans receivable, net, increased to $13.26 billion in 2021, compared to $10.96 billion in 2020, marking a 20.9% growth[151]. - Deposits grew to $21.34 billion in 2021, a 44.2% increase from $14.80 billion in 2020[151]. - Non-interest income decreased to $144.82 million in 2021, down 16.2% from $172.87 million in 2020[151]. - Provision for credit losses was $23.08 million in 2021, a significant decrease of 42.0% from $39.77 million in 2020[151]. - The company's equity per share increased to $28.71 in 2021, up from $24.18 in 2020, representing an 18.7% growth[151]. - The effective income tax rate for 2021 was 22.7%, compared to 23.1% in 2020, indicating a slight improvement[151]. - The Company reported a record net income of $285 million for 2021, an increase of $18.4 million, or 7%, compared to $266 million in 2020[159]. Regulatory Environment - The company is subject to extensive federal and state regulations, impacting its operations and compliance costs[34]. - The Company is prohibited from acquiring or retaining more than 5% of voting shares in non-bank companies, with exceptions for activities closely related to banking[39]. - Bank subsidiaries face restrictions on credit extensions to the holding company, with the Dodd-Frank Act expanding the definition of "affiliate" and requiring collateral for covered transactions[40]. - The Company must act as a source of financial strength for the Bank, committing capital and resources even when it may not be in its best interest[43]. - Federal regulations require a common equity Tier 1 capital to risk-based assets ratio of 4.5%, with additional capital conservation buffer requirements[64]. - The Dodd-Frank Act significantly changed the bank regulatory structure, impacting lending, deposit, investment, and trading activities[55]. - The Company is subject to various consumer protection laws, with increased examination and enforcement by federal and state agencies[46]. - The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB), which has broad authority over consumer protection laws[60]. - The Company is not currently subject to Dodd-Frank Act stress testing requirements due to the Economic Growth, Regulatory Relief, and Consumer Protection Act[62]. - The Dodd-Frank Act repealed the federal prohibitions on the payment of interest on demand deposits, allowing institutions to pay interest on business transaction accounts[59]. - The company is required to maintain a Tier 1 common equity capital ratio of at least 6.5%, a Tier 1 capital ratio of at least 8%, and a total capital ratio of at least 10% to qualify as "well capitalized" under FDIC rules[66]. - The application of the Final Rules may lead to lower returns on invested capital and may require raising additional capital or modifying business strategies due to changes in asset risk-weights[67]. - The Federal Reserve conducts periodic inspections of bank holding companies to assess their financial strength and the effects of transactions between subsidiaries[68]. - Banks are subject to examinations every 12 to 18 months based on their asset size and capital status, with the frequency linked to compliance ratings[69]. - The Dodd-Frank Act increased FDIC deposit insurance from $100,000 to $250,000 per depositor, enhancing consumer protection[78]. - The company is subject to heightened requirements under the Dodd-Frank Act, including compliance with federal consumer protection laws[82]. Risk Factors - The ongoing effects of the COVID-19 pandemic may adversely affect the company's results of operations and market price of its stock, despite a strong liquidity and capital position[129]. - The company faces risks related to operational disruptions and security breaches, which could damage its reputation and result in financial losses[120]. - The company is heavily dependent on its senior management team, and the unexpected loss of key executives could adversely affect future growth prospects[126]. - The company is exposed to risks from climate change, which may lead to cost increases and changes in consumer behavior affecting demand for its products and services[130]. - The company utilizes models to forecast losses and assess risks, but these models may not adequately anticipate current and evolving risks, potentially leading to operational and financial harm[127]. - A high concentration of loans secured by real estate increases credit risk, and any deterioration in real estate markets could require material increases in the ACL[103]. - Non-performing assets may increase, adversely affecting earnings as the Bank does not record interest income on non-accrual loans[104]. - The Bank's profitability is heavily dependent on net interest income, and fluctuations in interest rates could adversely affect the interest rate spread and profitability[110]. - The Bank faces significant competition from other financial institutions and emerging technologies, which may pressure pricing and market share[109]. - Future acquisitions may have a dilutive effect on earnings per share and could disrupt ongoing business operations[98]. - The Bank's loan portfolio contains a high percentage of commercial loans, which are viewed as having a higher risk of default compared to residential loans[102]. - Regulatory authorities may require the Bank to recognize further provisions for credit losses, which could differ from the Bank's assessments[101]. - The Bank's ability to pay dividends may be affected by earnings and capital levels, with future dividends dependent on these factors[100]. - The transition from LIBOR to alternative reference rates may significantly impact the availability and cost of hedging instruments and borrowings, potentially incurring substantial transition expenses[112]. Employee Benefits and Corporate Governance - The company has a comprehensive employee benefit program, including health insurance, retirement plans, and profit-sharing options[29]. - The company is committed to improving its environmental, social, and governance (ESG) performance, overseen by its Nominating/Corporate Governance Committee[90]. Loan Portfolio and Credit Losses - The Bank maintains an allowance for credit losses (ACL) but may need to increase it significantly due to potential loan losses, which could adversely impact earnings[101]. - The commercial real estate loans represented 65% of the total loan portfolio as of December 31, 2021, up from 58% in the previous year[193]. - The residential real estate loans increased to $1,052 million, accounting for 8% of the total loan portfolio, compared to 7% in 2020[193]. - The allowance for credit losses (ACL) was $172.7 million, representing 1% of total loans receivable as of December 31, 2021, compared to 2% in 2020[193]. - The Company conducts regular internal and external credit examinations to manage credit risk within the loan portfolio[205].