Glacier Bancorp(US:GBCI)2021-07-23 18:08Financial Data and Key Metrics Changes - The company generated net income of $77.6 million, an increase of $14.2 million or 22% compared to the prior year second quarter net income of $63.4 million [5] - Diluted earnings per share were $0.81, a 23% increase from the prior year second quarter diluted earnings per share of $0.66 [5] - Nonperforming assets as a percentage of subsidiary assets was 26 basis points, compared to 19 basis points in the prior quarter and 27 basis points in the prior year second quarter [6] - Noninterest expense was $100 million, an increase of only $3.5 million or 4% compared to the prior quarter [7] Business Line Data and Key Metrics Changes - The loan portfolio, excluding Payroll Protection Program (PPP) loans, increased by $249 million or 10% annualized in the current quarter and increased $517 million or 5% from the prior year second quarter [5] - Core deposits increased by $669 million or 17% annualized during the current quarter and increased $3.4 billion or 26% from the prior year second quarter [6] - Noninterest income declined to $36 million from $40 million or 11% in the prior quarter, primarily due to a reduced gain on sale of residential mortgages [23] Market Data and Key Metrics Changes - Solid loan growth was observed in Montana, Wyoming, and Nevada, leading the growth across the 8-state footprint [11] - Noninterest-bearing deposits increased by $267 million or 4% over the last quarter and increased $1.3 billion or 25% from the prior year second quarter [15] - Total debt securities of $7.2 billion increased by $730 million or 11% from the prior quarter and are up $3.4 billion or 92% from the prior year second quarter [16] Company Strategy and Development Direction - The company is focused on growing net interest income while managing the quality and duration of debt securities and loans [21][40] - The combination with Altabancorp is proceeding well, with plans for closing at the end of October and conversion in early 2022 [25] - The company aims for a loan growth target of 4% to 6% for the full year, despite headwinds from borrowers using excess liquidity to pay down loans [13] Management's Comments on Operating Environment and Future Outlook - Management noted that in-migration of new residents into their 8-state footprint continued, contributing to strong loan and deposit growth [10] - The company expects some normalization in in-migration trends but anticipates that it will remain above the U.S. average [56] - Management expressed caution regarding excess liquidity and potential payoffs from borrowers, which could impact loan growth [36] Other Important Information - The company declared a quarterly dividend of $0.32 per share, an increase of $0.01 per share or 3% over the prior quarter [8] - The efficiency ratio was 49.92% in the current quarter, compared to 46.75% in the prior quarter [24] Q&A Session Summary Question: What is the expected run rate for expenses? - Management expects the run rate to be closer to $103 million, with additional hiring and business development expenses anticipated [31] Question: What are the mortgage expectations for the group? - Management expects a decline of about 20% to 25% in mortgage activity, consistent with industry forecasts, due to low housing supply [32] Question: Can you provide details on nonperforming assets? - The nonperforming asset issue is predominantly one agricultural relationship, which is adequately secured and in the process of liquidation [34] Question: How do you feel about the loan growth range for the year? - Management is optimistic about achieving the higher end of the 4% to 6% growth range, given strong trends observed [36] Question: What types of projects are being financed? - The growth has been primarily in industrial and multifamily projects, with no significant growth in high-risk COVID-sensitive industries like hotels and restaurants [40] Question: What is the status of mortgage locks? - Mortgage locks for the quarter were about $350 million, down from the previous quarter, attributed to low housing inventory [62]