Glacier Bancorp, Inc. (NASDAQ:GBCI) Q3 2019 Earnings Conference Call - Final Transcript

Oct 18, 2019 • 11:00 am ET


Glacier Bancorp, Inc. (NASDAQ:GBCI) Q3 2019 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and welcome to Glacier Bancorp Third Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Randy Chesler, President and CEO of Glacier Bancorp. Mr. Chesler, the floor is yours.

Randy Chesler

All right, thank you, Rusty. Good morning and thank you for joining us today. With me here in Kalispell this morning is Ron Copher, our Chief Financial Officer; Don Cherry, our Chief Administrative Officer; Angela Dose, our Chief Accounting Officer, Barry Johnston, our Chief Credit Officer; Tom Dolan, our Deputy Chief Credit Administrator; and Byron Pollan, our Treasurer. Let me first thank you all for joining us today, and hope you're all enjoying the fall.

Yesterday, we released our third quarter 2019 results. This was a very strong quarter for us with strong net interest margin, excellent deposit growth, steady and improving credit performance and good quality loan growth. As we noted in the last quarter's call, we feel we are very well positioned to navigate through the current interest rate environment. And despite the headwinds in the market for banks, challenging interest rate curve, later innings of a long-term recovery, the Glacier team is strong and we are continuing to build the balance sheet and the Company for the long haul.

Some highlights from the quarter. Earnings were $51.6 million, an increase of $2 million or 5% over the prior-year third quarter, including current period acquisition-related expenses of $2.1 million and $5.4 million of stock compensation expense related to the accelerated vesting of options from the Heritage Bancorp acquisition. Without the acquisition expenses, net income would have been $56.2 million, an increase from the prior-year third quarter of $6.9 million or 14%.

Diluted earnings per share for the quarter were $0.57, a decrease of 2% over the prior year third quarter, but this included the acquisition-related expenses. Organic loan balances increased $84 million or 4% annualized. On a full-year basis, loan balances grew $393 million or 6%. We also had organic core deposit growth of $302 million or 12% annualized. And organic non-interest deposit growth was a very strong $211 million or 26% annualized. This quarter's deposit growth exceeded our expectations.

Net interest margin for the quarter of 4.42% of earning assets increased 9 basis points over the prior quarter, excluding the 2 basis points from discount accretion and 5 basis points from non-accrual interest, the core net interest margin grew 8 basis points in the quarter to 4.35% from 4.27% in the prior quarter and up 17 basis points from 4.18% in the prior-year third quarter. We are very pleased to be one of the few banks in this earning season is to be able to talk about an expanding margin.

Return on assets was 1.55% for the quarter, a 14 basis points decrease over