Glacier Bancorp(US:GBCI)2022-01-28 21:09Financial Data and Key Metrics Changes - The loan portfolio, excluding Payroll Protection Program (PPP) loans, experienced strong organic growth of $448 million or 16% annualized in Q4 2021, and $1.2 billion or 11% annualized for the full year, marking record quarterly growth for the company [5][12] - Net interest income for Q4 2021 was $184 million, an increase of $29.4 million or 19% from the prior quarter, while full-year net interest income reached $636 million, up $57.5 million or 10% year-over-year [6][7] - Net income for the year was $285 million, reflecting an increase of $18.4 million or 7% from $266 million in the previous year, with earnings per share reaching a record $2.86, up 2% [7][8] - The company declared dividends of $1.37 per share, a 3% increase from the prior year, marking 147 consecutive quarterly dividends [8] Business Line Data and Key Metrics Changes - Core deposits grew organically by $560 million or 13% during Q4 2021, and $3.3 billion or 22% annualized for the year [6][13] - Non-interest income for Q4 2021 was $34.4 million, a decline of $453,000 or 1% from the prior quarter, and a decrease of $10.3 million or 23% year-over-year, primarily due to reduced gains on the sale of residential mortgages [18] - Non-interest expense included $17 million from the Altabank division and $8.2 million in acquisition-related expenses, with a 5% increase in non-interest expense from the prior quarter when excluding these items [19] Market Data and Key Metrics Changes - The company saw excellent loan growth in Utah, Arizona, and Colorado, with commercial real estate lending growing organically by $175 million in Q4 2021 [11] - Non-interest bearing deposits increased by $2.3 billion or 43% year-over-year, now representing 37% of core deposits [13] Company Strategy and Development Direction - The company completed the acquisition of Altabancorp, the largest community bank in Utah, with assets of $4.1 billion, marking the largest acquisition in its history [9] - The company is focused on integrating Altabank and achieving targeted cost savings in 2022, with plans to roll out technology from Altabank to other divisions [21][78] - The company aims to maintain a strong efficiency ratio of 54% to 55% while investing in technology to improve operations [79] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment in the Western United States, citing strong trends in local economies and consumer confidence in property purchases [28][30] - The company anticipates low double-digit loan growth for 2022, despite potential headwinds such as supply chain issues and increased construction costs [61] - Management expects deposit growth to be in the high single digits for 2022, with loans outpacing deposits [64] Other Important Information - The company is nearing the end of the PPP program, with only $169 million of loans remaining to be forgiven as of the end of 2021 [10] - The tangible book value per share increased from $19.11 to $19.33 in Q4 2021, reflecting a 1% increase for the quarter and a 6% increase for the year [21] Q&A Session Summary Question: Contribution of Altabancorp to loan growth and economic outlook for 2022 - Management noted that loan growth was broad-based across the footprint, with strong performance in Utah, Arizona, and Colorado, and emphasized the positive economic trends in these regions [28][30] Question: Expense outlook and impact of inflation - Management provided insights on expected expenses, estimating a first-quarter run rate of $128 million, with elevated merger-related expenses anticipated during the Altabank conversion [33][34] Question: Trends in new loan yields and competitive landscape - Management indicated that loan pricing is under pressure, with expectations for rates to rise, but noted that competition may delay the full benefits of any rate increases [36][39] Question: Credit quality and delinquency trends - Management addressed concerns about increased delinquency, attributing it to one specific relationship and expecting resolution in the near term [51][52] Question: Confidence in achieving loan growth targets for 2022 - Management expressed confidence in achieving low double-digit loan growth for 2022, despite potential headwinds [61] Question: Tax rate outlook for the year - Management indicated that the effective tax rate is expected to ramp up to around 19% for the full year [96]