Glacier Bancorp, Inc. (NASDAQ:GBCI) Q2 2019 Earnings Conference Call - Final Transcript
Jul 19, 2019 • 11:00 am ET
start the third quarter with the deal folding in, and you didn't really change the efficiency ratio guidance for the year despite maybe the slightly less optimistic view on margins. So, are there some offsets in other parts of the income statements that are helping there?
Well, from a -- this is Ron, Michael. From a run rate, remember in the second quarter, we had $1.8 million of acquisition-related expenses and so we would see a similar number in the third quarter coming from the acquisition of Heritage. So I would tell you the run rate maybe go up another 1%, but that would be more than covered by the additional income will pick up from the acquisition. So that's why we have an update of the efficiency guidance we still, as Randy said, will come in at between 54% and 55%, and you can see it, it's come down Q1 versus Q2. So we felt comfortable with that.
Okay, thanks. I'll step back.
Thank you. And our next question comes from Jeff Rulis with D.A. Davidson. Your line is now open.
Thanks, good morning.
Randall M. Chesler
Good morning, Jeff.
Question on just the credit side of things and the provisioning levels are off quite a bit year-to-date and just kind of poking into that a little bit, it really seems to signal that the underlying fundamentals of -- you put on pretty good growth but are the underlying credit fundamentals significantly improved? Is there any switch in methodology here that would underlie the pretty modest provisioning year-to-date?
Randall M. Chesler
Sure. Barry, do you want to answer that?
Yeah. We've had some good loan growth this year, but we have to remember part of it came from acquisitions and those portfolios come over with a discount already attached. From perspective, as we do every quarter, we evaluate our current portfolio, the respective credit metrics and given what we've seen is some fairly significant reductions in non-performing loans and non-performing assets already was included. We evaluate it and that remains fairly directionally consistent and given those improved credit metrics with provisioning was commensurate with the movement in the portfolio.
Barry, on, I guess just a follow-up, just any initial thoughts on CECL or is that guiding any current provisioning or thoughts kind of going forward either in the number, if it's not just anything you could add to how you're prepping on that end?
No, it's not impacting our current evaluation. We are running parallel runs. We're in the process of that. We're doing some data validation and we anticipate that overall with the conversion to CECL, it won't have a material impact on our business.
Got you. Okay. And then maybe one last one for Randy, just interested in the reception in Utah with that added scale, you've been in the state, but this is a bigger step and anything from how you think you've been received with the added folks, but also just also general thoughts on the competitive landscape in the state?