Glacier Bancorp, Inc. (NASDAQ:GBCI) Q2 2019 Earnings Conference Call - Final Transcript

Jul 19, 2019 • 11:00 am ET

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Glacier Bancorp, Inc. (NASDAQ:GBCI) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Our first question comes from Michael Young with SunTrust. Your line is now open.

Analyst
Michael Young

Hey, good morning, everyone.

Executive
Randall M. Chesler

Morning.

Analyst
Michael Young

I appreciate the updated color on the net interest margin outlook, Randy. I just wanted to see if I could clarify a few points around that. First is that kind of on the core margin or the reported margin with purchase accounting accretion and does that include or exclude the Heritage deal closings?

Executive
Randall M. Chesler

So I'm going to -- so, obviously, given what's going on in the markets, we've taken a close look at this and I've had Ron take it apart for you, so I'm going to ask Ron to cover that.

Executive
Ronald Copher

Yeah. So the reported margin is what the reduction was, the 5 to 7 basis point, and that will include the acquisition of Layton -- I'm sorry, Heritage and as we add them in July 31st. And, Michael what were the other -- oh, the discount accretion. So that -- we estimate that only from Layton was the minor piece, we only picked up discount accretion of basically $1.9 million on the acquisition and so based, I think that answers your questions, but did you have more or other color you want?

Analyst
Michael Young

Yeah. Maybe just a little color around kind of what would drive the higher versus the lower end of kind of that guidance and what offsets are there potentially out there in terms of either reducing deposit costs or using the floor [Phonetic], which already bakes in some of the lower rates into the forward curve. Just some potential geometry around how we might end up a couple of quarters from now?

Executive
Randall M. Chesler

Sure, Michael. So I think we've got some positives coming our way. You've seen really strong growth. We -- like I said, we expect our growth to continue and targeting at 8%. We also have pretty good pricing power through our model across all our markets, so we feel good about that. Headwind on our margin is going to be what -- really what the Fed does in the amount, the steepness, what they actually do whether it's 25 basis points or 50 basis points and then what impact that has on the longer part of the curve, so where the five year goes. The other factor is just going to be our deposit growth and the speed of our growth. So we have a lot of growth this quarter, a little more than we expected and so we didn't have the deposit growth recovered. So our borrowing costs were up.

So I think you kind of rattled through the right factors. So those are the kind of the -- some of the pluses and minuses that we see that really drive whether we're going to kind of bounce around flat or to be downward pressure over the next two quarters of up to 5 to 7.

Analyst
Michael Young

Okay. And maybe just one last one on expenses. Any outlook for kind of where we should