Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net income of $75.6 million for the current quarter, a decrease of $2.2 million, or 3 percent, from the $77.8 million of net income for the prior year third quarter. Diluted earnings per share for the current quarter was $0.79 per share, a decrease of 2 percent from the prior year third quarter diluted earnings per share of $0.81. The decrease in third quarter earnings over the prior year was driven by a $21.6 million reduction in the gain on sale of residential mortgage loans due to record gains in the prior year. “The Glacier team produced very strong core loan and net interest income growth in the quarter,” said Randy Chesler, President and Chief Executive Officer. “We are excited to welcome the outstanding team at Altabank to the Glacier family and are well positioned to capitalize on our strengthening markets across the West.”

Net income for the nine months ended September 30, 2021 was $234 million, an increase of $49.5 million, or 27 percent, from the $185 million net income from the first nine months in the prior year. Diluted earnings per share for the first nine months of the current year was $2.45 per share, an increase of 26 percent, from the diluted earnings per share of $1.95 for the same period last year.

On October 1, 2021, the Company announced the completion of the acquisition of Altabancorp, the parent company of Altabank, based in American Fork, Utah (collectively, “Alta”) and the largest community bank in Utah. Alta provides banking services to individuals and businesses in Utah with twenty-five banking offices from Preston, Idaho to St. George, Utah. As of September 30, 2021, Alta had total assets of $3.648 billion, total loans of $1.901 billion and total deposits of $3.279 billion. Upon closing of the transaction, Alta became the Company’s seventeenth Bank division.

Asset Summary

                  $ Change from
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Jun 30,2021   Dec 31,2020   Sep 30,2020
Cash and cash equivalents $ 348,888       921,207       633,142       769,879       (572,319 )     (284,254 )     (420,991 )  
Debt securities, available-for-sale 7,390,580       6,147,143       5,337,814       4,125,548       1,243,437       2,052,766       3,265,032    
Debt securities, held-to-maturity 1,128,299       1,024,730       189,836       193,509       103,569       938,463       934,790    
Total debt securities 8,518,879       7,171,873       5,527,650       4,319,057       1,347,006       2,991,229       4,199,822    
Loans receivable                          
Residential real estate 781,538       734,838       802,508       862,614       46,700       (20,970 )     (81,076 )  
Commercial real estate 6,912,569       6,584,322       6,315,895       6,201,817       328,247       596,674       710,752    
Other commercial 2,598,616       2,932,419       3,054,817       3,593,322       (333,803 )     (456,201 )     (994,706 )  
Home equity 660,920       648,800       636,405       646,850       12,120       24,515       14,070    
Other consumer 340,248       337,669       313,071       314,128       2,579       27,177       26,120    
Loans receivable 11,293,891       11,238,048       11,122,696       11,618,731       55,843       171,195       (324,840 )  
Allowance for credit losses (153,609 )     (151,448 )     (158,243 )     (164,552 )     (2,161 )     4,634       10,943    
Loans receivable, net 11,140,282       11,086,600       10,964,453       11,454,179       53,682       175,829       (313,897 )  
Other assets 1,305,970       1,308,353       1,378,961       1,382,952       (2,383 )     (72,991 )     (76,982 )  
Total assets $ 21,314,019       20,488,033       18,504,206       17,926,067       825,986       2,809,813       3,387,952    

Total debt securities of $8.519 billion at September 30, 2021 increased $1.347 billion, or 19 percent, during the current quarter and increased $4.200 billion, or 97 percent, from the prior year third quarter. The Company continues to selectively purchase debt securities with excess liquidity from the increase in core deposits and SBA forgiveness of PPP loans. Debt securities represented 40 percent of total assets at September 30, 2021 compared to 30 percent of total assets at December 30, 2020 and 24 percent of total assets at September 30, 2020.

The loan portfolio of $11.294 billion at September 30, 2021 increased $55.8 million, or 50 basis points, in the current quarter. Excluding the PPP loans, the loan portfolio increased $382 million, or 14 percent annualized, during the current quarter with the largest increase in commercial real estate which increased $328 million.

The loan portfolio decreased $325 million, or 3 percent, from the prior year third quarter. Excluding the PPP loans, the loan portfolio increased $755 million, or 7 percent, from the prior year third quarter with the largest increase in commercial real estate loans which increased $711 million, or 11 percent.

Credit Quality Summary

  At or for the Nine Months ended   At or for the Six Months ended   At or for the Year ended   At or for the Nine Months ended
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020
Allowance for credit losses              
Balance at beginning of period $ 158,243     158,243     124,490     124,490  
Impact of adopting CECL         3,720     3,720  
Acquisitions         49     49  
Provision for credit losses (2,921 )   (5,234 )   37,637     39,165  
Charge-offs (8,566 )   (5,946 )   (13,808 )   (7,865 )
Recoveries 6,853     4,385     6,155     4,993  
Balance at end of period $ 153,609     151,448     158,243     164,552  
Provision for credit losses              
Loan portfolio $ (2,921 )   (5,234 )   37,637     39,165  
Unfunded loan commitments (1,959 )   (371 )   2,128     2,135  
Total provision for credit losses $ (4,880 )   (5,605 )   39,765     41,300  
Other real estate owned $ 88     705     1,182     4,742  
Other foreclosed assets 18     66     562     619  
Accruing loans 90 days or more past due 5,172     4,220     1,725     2,952  
Non-accrual loans 45,901     48,050     31,964     36,350  
Total non-performing assets $ 51,179     53,041     35,433     44,663  
Non-performing assets as a percentage of subsidiary assets 0.24 %   0.26 %   0.19 %   0.25 %
Allowance for credit losses as a percentage of non-performing loans 301 %   290 %   470 %   419 %
Allowance for credit losses as a percentage of total loans 1.36 %   1.35 %   1.42 %   1.42 %
Net charge-offs as a percentage of total loans 0.02 %   0.01 %   0.07 %   0.03 %
Accruing loans 30-89 days past due $ 26,002     12,076     22,721     17,631  
Accruing troubled debt restructurings $ 36,666     37,667     42,003     39,999  
Non-accrual troubled debt restructurings $ 2,820     3,179     3,507     7,579  
U.S. government guarantees included in non-performing assets $ 4,116     4,186     3,011     4,411  

Non-performing assets of $51.2 million at September 30, 2021 decreased $1.9 million, or 4 percent, over the prior quarter. Non-performing assets increased $6.5 million, or 15 percent, over the prior year third quarter. Non-performing assets as a percentage of subsidiary assets at September 30, 2021 was 0.24 percent compared to 0.26 percent in the prior quarter and 0.25 percent in the prior year third quarter. Early stage delinquencies (accruing loans 30-89 days past due) of $26.0 million at September 30, 2021 increased $13.9 million from the prior quarter with a large portion of the increase primarily isolated to one credit relationship. Early stage delinquencies increased $8.4 million from the prior year third quarter. Early stage delinquencies as a percentage of loans at September 30, 2021 was 0.23 percent, which was an increase of 12 basis points from prior quarter and an 8 basis points increase from prior year third quarter.

The allowance for credit losses on loans (“ACL”) as a percentage of total loans outstanding at September 30, 2021 was 1.36 percent which was a 1 basis point increase compared to the prior quarter and a 6 basis point decrease from the prior year third quarter. Excluding the PPP loans, the ACL as percentage of loans was 1.40 percent compared to 1.43 percent in the prior quarter and 1.62 percent in the prior year third quarter. The decrease in the ACL as a percentage of total loans during the current year was driven by the improvement in the economic forecasts.

Credit Quality Trends and Provision for Credit Losses on the Loan Portfolio

(Dollars in thousands) Provision for Credit Losses Loans   Net Charge-Offs(Recoveries)   ACLas a Percentof Loans   AccruingLoans 30-89Days Past Dueas a Percent ofLoans   Non-PerformingAssets toTotal SubsidiaryAssets
Third quarter 2021 $ 2,313       $ 152       1.36 %   0.23 %   0.24 %
Second quarter 2021 (5,723 )     (725 )     1.35 %   0.11 %   0.26 %
First quarter 2021 489       2,286       1.39 %   0.40 %   0.19 %
Fourth quarter 2020 (1,528 )     4,781       1.42 %   0.20 %   0.19 %
Third quarter 2020 2,869       826       1.42 %   0.15 %   0.25 %
Second quarter 2020 13,552       1,233       1.42 %   0.22 %   0.27 %
First quarter 2020 22,744       813       1.49 %   0.41 %   0.26 %
Fourth quarter 2019       1,045       1.31 %   0.24 %   0.27 %

The current quarter provision for credit loss expense for loans was $2.3 million which was an increase of $8.0 million from the prior quarter provision for credit loss benefit of $5.7 million and a $556 thousand decrease from the prior year third quarter provision for credit loss expense of $2.9 million. The increase in provision for credit losses for loans in the current quarter compared to the prior quarter was primarily driven by organic loan growth in the current quarter.

Net charge-offs for the current quarter were $152 thousand compared to net recoveries of $725 thousand for the prior quarter and net charge-offs $826 thousand from the same quarter last year. Loan portfolio growth, composition, average loan size, credit quality considerations, economic forecasts and other environmental factors will continue to determine the level of the provision for credit losses for loans. 

PPP Loans

  Three Months ended   Nine Months ended
(Dollars in thousands) Sep 30, 2021   Jun 30, 2021   Mar 31, 2021   Sep 30, 2021   Sep 30, 2020
PPP interest income $ 12,894     10,328     13,523     36,745     16,646  
Deferred compensation on originating PPP loans     1,522     5,213     6,735     8,850  
Total PPP income impact $ 12,894     11,850     18,736     43,480     25,496  
(Dollars in thousands) Sep 30, 2021   Jun 30, 2021   Dec 31, 2020   Sep 30, 2020
PPP Round 1 loans $ 56,048      176,498      909,173      1,448,417   
PPP Round 2 loans 312,865      518,107      —      —   
Total PPP loans 368,913      694,605      909,173      1,448,417   
               
Net remaining fees - Round 1 485      1,313      17,605      36,099   
Net remaining fees - Round 2 12,501      22,694      —      —   
Total net remaining fees $ 12,986      24,007      17,605      36,099   

The SBA Round 2 PPP program ended in early May of 2021 after the available funds were fully drawn upon. During the first half of 2021, the Company originated $555 million of Round 2 PPP loans which generated $33.2 million of SBA deferred processing fees and $6.7 million of deferred compensation costs for total net deferred fees of $26.5 million.

During the current year, the SBA processing fees received on Round 2 averaged 5.99 percent which compared to the average of 3.75 percent received on Round 1 in the prior year. The increase in the fee percentage received on Round 2 was the result of an increase in the number of smaller loans which receive a higher percentage fee.

The Company received $327 million in PPP loan forgiveness during the current quarter and received $1.103 billion in the first nine months of 2021. As of September 30, 2021, the Company had $56 million, or 4 percent of the $1.472 billion of Round 1 PPP loans originated in the prior year and had $313 million, or 56 percent of the $555 million of Round 2 PPP loans originated in the current year.

The Company recognized $12.9 million of interest income (including deferred fees and costs) from the Round 1 and Round 2 PPP loans in the current quarter. The income recognized in the current quarter included $10.5 million acceleration of net deferred fees in interest income resulting from the SBA forgiveness of loans. Net deferred fees remaining on the balance of the PPP loans at September 30, 2021 were $13.0 million, which will be recognized into interest income over the remaining life of the loans or when the loans are forgiven in whole or in part by the SBA.

Supplemental information regarding credit quality and identification of the Company’s loan portfolio based on regulatory classification is provided in the exhibits at the end of this press release. The regulatory classification of loans is based primarily on collateral type while the Company’s loan segments presented herein are based on the purpose of the loan.

Liability Summary

                  $ Change from
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Jun 30,2021   Dec 31,2020   Sep 30,2020
Deposits                          
Non-interest bearing deposits $ 6,632,402     6,307,794     5,454,539     5,479,311     324,608     1,177,863     1,153,091  
NOW and DDA accounts 4,299,244     4,151,264     3,698,559     3,300,152     147,980     600,685     999,092  
Savings accounts 2,502,268     2,346,129     2,000,174     1,864,143     156,139     502,094     638,125  
Money market deposit accounts 3,123,425     2,990,021     2,627,336     2,557,294     133,404     496,089     566,131  
Certificate accounts 919,852     939,563     978,779     979,857     (19,711 )   (58,927 )   (60,005 )
Core deposits, total 17,477,191     16,734,771     14,759,387     14,180,757     742,420     2,717,804     3,296,434  
Wholesale deposits 26,123     26,121     38,142     119,131     2     (12,019 )   (93,008 )
Deposits, total 17,503,314     16,760,892     14,797,529     14,299,888     742,422     2,705,785     3,203,426  
Repurchase agreements 1,040,939     995,201     1,004,583     965,668     45,738     36,356     75,271  
Federal Home Loan Bank advances             7,318             (7,318 )
Other borrowed funds 33,671     33,556     33,068     32,967     115     603     704  
Subordinated debentures 132,580     132,540     139,959     139,918     40     (7,379 )   (7,338 )
Other liabilities 215,899     211,889     222,026     225,219     4,010     (6,127 )   (9,320 )
Total liabilities $ 18,926,403     18,134,078     16,197,165     15,670,978     792,325     2,729,238     3,255,425  

Core deposits of $17.477 billion as of September 30, 2021 increased $742 million, or 18 percent annualized, from the prior quarter and increased $3.296 billion, or 23 percent, from the prior year third quarter. Non-interest bearing deposits of $6.632 billion as of September 30, 2021 increased $325 million, or 5 percent, from the prior quarter and increased $1.153 billion, or 21 percent, from the prior year third quarter. The unprecedented increase in deposits over the prior eighteen months resulted from a number of factors including the PPP loan proceeds deposited by customers, federal stimulus deposits and the increase in customer savings. Non-interest bearing deposits were 38 percent of total core deposits at September 30, 2021 compared to 37 percent of total core deposits at December 31, 2020 and 39 percent at September 30, 2020.

The low levels of borrowings, including wholesale deposits and Federal Home Loan Bank (“FHLB”) advances, reflected the significant increase in core deposits which funded the asset growth.

Stockholders’ Equity Summary

                  $ Change from
(Dollars in thousands, except per share data) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Jun 30,2021   Dec 31,2020   Sep 30,2020
Common equity $ 2,309,957     2,263,513     2,163,951     2,123,991     46,444     146,006     185,966  
Accumulated other comprehensive income 77,659     90,442     143,090     131,098     (12,783 )   (65,431 )   (53,439 )
Total stockholders’ equity 2,387,616     2,353,955     2,307,041     2,255,089     33,661     80,575     132,527  
Goodwill and core deposit intangible, net (562,058 )   (564,546 )   (569,522 )   (572,134 )   2,488     7,464     10,076  
Tangible stockholders’ equity $ 1,825,558     1,789,409     1,737,519     1,682,955     36,149     88,039     142,603  
Stockholders’ equity to total assets   11.20 %   11.49 %   12.47 %   12.58 %                  
Tangible stockholders’ equity to total tangible assets   8.80 %   8.98 %   9.69 %   9.70 %                  
Book value per common share $ 25.00     24.65     24.18     23.63     0.35     0.82     1.37  
Tangible book value per common share $ 19.11     18.74     18.21     17.64     0.37     0.90     1.47  

Tangible stockholders’ equity of $1.826 billion at September 30, 2021 increased $36.1 million, or 2 percent, from the prior quarter and increased $143 million, or 8 percent, from the prior year third quarter and was due to earnings retention that more than offset the decrease in other comprehensive income. The current year decrease in both the stockholders’ equity to total assets ratio and the tangible stockholders’ equity to tangible assets was the result of the $2.991 billion increase in debt securities driven primarily by the significant influx of deposits during the current year. Tangible book value per common share of $19.11 at the current quarter end increased $0.37 per share, or 2 percent, from the prior quarter and increased $1.47 per share, or 8 percent, from a year ago.

Cash DividendsOn September 30, 2021, the Company’s Board of Directors declared a quarterly cash dividend of $0.32 per share. The dividend was payable October 21, 2021 to shareholders of record on October 12, 2021. The dividend was the 146th consecutive dividend. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Operating Results for Three Months Ended September 30, 2021 Compared to June 30, 2021, March 31, 2021, and September 30, 2020

Income Summary

  Three Months ended $ Change from
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Mar 31,2021   Sep 30,2020   Jun 30,2021   Mar 31,2021   Sep 30,2020
Net interest income                          
Interest income $ 166,741     159,956     161,552     157,487     6,785     5,189     9,254  
Interest expense 4,128     4,487     4,740     6,084     (359 )   (612 )   (1,956 )
Total net interest income 162,613     155,469     156,812     151,403     7,144     5,801     11,210  
Non-interest income                          
Service charges and other fees 15,154     13,795     12,792     13,404     1,359     2,362     1,750  
Miscellaneous loan fees and charges 2,592     2,923     2,778     2,084     (331 )   (186 )   508  
Gain on sale of loans 13,902     16,106     21,624     35,516     (2,204 )   (7,722 )   (21,614 )
(Loss) gain on sale of investments (168 )   (61 )   284     24     (107 )   (452 )   (192 )
Other income 3,335     2,759     2,643     2,639     576     692     696  
Total non-interest income 34,815     35,522     40,121     53,667     (707 )   (5,306 )   (18,852 )
Total income 197,428     190,991     196,933     205,070     6,437     495     (7,642 )
Net interest margin (tax-equivalent) 3.39 %   3.44 %   3.74 %   3.92 %            

Net Interest IncomeThe current quarter net interest income of $163 million increased $7.1 million, or 5 percent, over the prior quarter and increased $11.2 million, or 7 percent, from the prior year third quarter. The current quarter interest income of $167 million increased $6.8 million, or 4 percent, compared to the prior quarter and increased $9.3 million, or 6 percent, over the prior year third quarter due to an increase in interest income from the PPP loans and debt securities. The interest income (which included deferred fees and deferred costs) from the PPP loans was $12.9 million in the current quarter and $10.3 million in the prior quarter and $9.3 million in the prior year third quarter. Excluding the PPP loans, net interest income was $150 million in the current quarter compared to $145 million in the prior quarter and $142 million in the prior year third quarter.

The current quarter interest expense of $4.1 million decreased $359 thousand, or 8 percent, over the prior quarter and decreased $2.0 million, or 32 percent, over the prior year third quarter primarily as result of a decrease in deposit rates. During the current quarter, the total cost of funding (including non-interest bearing deposits) of 9 basis points declined 1 basis points from the prior quarter and declined 7 basis points from the prior year third quarter with both decreases driven by a decrease in rates in deposits and borrowings.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.39 percent compared to 3.44 percent in the prior quarter and 3.92 in the prior year third quarter. The core net interest margin, excluding 2 basis points of discount accretion, 2 basis point from non-accrual interest and 18 basis points increase from the PPP loans, was 3.17 percent compared to 3.33 in the prior quarter and 4.02 percent in the prior year third quarter. The core net interest margin decreased 16 basis points in the current quarter and decreased 85 basis points from the prior third quarter due to a decrease in earning asset yields. Earning asset yields have decreased due to the combined impact of the significant increase in the debt securities and the lower yields on both core loans and debt securities. Debt securities comprised 42.5 percent of the earning assets during the current quarter compared to 39.4 percent in the prior quarter and 26.5 percent in the prior year third quarter. Non-interest IncomeNon-interest income for the current quarter totaled $34.8 million which was a decrease of $707 thousand, or 2 percent, over the prior quarter and a decrease of $18.9 million, or 35 percent, over the same quarter last year. Service charges and other fees increased $1.4 million from the prior quarter and increased $1.8 million from the prior year third quarter as a result of increased customer accounts and transaction activity.

Gain on the sale of loans of $13.9 million for the current quarter decreased $2.2 million, or 14 percent, compared to the prior quarter and decreased $21.6 million, or 61 percent, from the prior year third quarter. The current quarter mortgage activity was lower than prior periods, but still remained at historically strong levels.

Non-interest Expense Summary

  Three Months ended $ Change from
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Mar 31,2021   Sep 30,2020   Jun 30,2021   Mar 31,2021   Sep 30,2020
Compensation and employee benefits $ 66,364     64,109     62,468     64,866     2,255     3,896     1,498  
Occupancy and equipment 9,412     9,208     9,515     9,369     204     (103 )   43  
Advertising and promotions 3,236     2,906     2,371     2,779     330     865     457  
Data processing 5,135     5,661     5,206     5,597     (526 )   (71 )   (462 )
Other real estate owned and foreclosed assets 142     48     12     186     94     130     (44 )
Regulatory assessments and insurance 2,011     1,702     1,879     1,495     309     132     516  
Core deposit intangibles amortization 2,488     2,488     2,488     2,612             (124 )
Other expenses 15,320     13,960     12,646     16,469     1,360     2,674     (1,149 )
Total non-interest expense $ 104,108     100,082     96,585     103,373     4,026     7,523     735  

Total non-interest expense of $104 million for the current quarter increased $4.0 million, or 4 percent, over the prior quarter and increased $735 thousand, or 71 basis points, over the prior year third quarter. Compensation and employee benefits increased $2.3 million, or 4 percent, from the prior quarter and increased $1.5 million from the prior year third quarter.

Other expenses of $15.3 million, increased $1.4 million, or 10 percent, from the prior quarter and decreased $1.1 million, or 7 percent, from the prior year third quarter. Current quarter other expenses included acquisition-related expenses of $472 thousand compared to $1.1 million in the prior quarter and $793 thousand in the prior year third quarter.

Federal and State Income Tax ExpenseTax expense during the third quarter of 2021 was $17.0 million, a decrease of $2.0 million, or 10 percent, compared to the prior quarter and a decrease of $1.8 million, or 9 percent, from the prior year third quarter. The effective tax rate in the current quarter was 18.3 compared to 19.6 in the prior quarter and 19.4 percent in the prior year third quarter.

Efficiency RatioThe efficiency ratio was 50.17 percent in the current quarter and 49.92 percent in the prior quarter and 48.05 in the prior year third quarter. “The Bank divisions are making do with less as increased hiring has taken longer as the markets get back to normal,” said Ron Copher, Chief Financial Officer. “Controlling non-interest expense growth has helped the Company maintain an efficiency ratio below 50 percent for the nine months of the current and prior year.” Excluding the impact from the PPP loans, the efficiency ratio would have been 53.59 percent in the current quarter compared to 53.53 percent in the prior quarter. Excluding the impact of PPP loans, the current quarter efficiency ratio was an increase of 308 basis points from the prior year third quarter efficiency ratio of 50.51 percent which was primarily driven by the decrease in the gain on sale of loans in the current quarter.

Operating Results for Nine Months Ended September 30, 2021Compared to September 30, 2020

Income Summary

  Nine Months ended        
(Dollars in thousands) Sep 30,2021   Sep 30,2020   $ Change   % Change
Net interest income              
Interest income $ 488,249     $ 455,756     $ 32,493     7 %
Interest expense 13,355     21,765     (8,410 )   (39 )%
Total net interest income 474,894     433,991     40,903     9 %
Non-interest income              
Service charges and other fees 41,741     38,790     2,951     8 %
Miscellaneous loan fees and charges 8,293     5,051     3,242     64 %
Gain on sale of loans 51,632     73,236     (21,604 )   (29 )%
Gain on sale of investments 55     1,015     (960 )   (95 )%
Other income 8,737     10,071     (1,334 )   (13 )%
Total non-interest income 110,458     128,163     (17,705 )   (14 )%
Total Income $ 585,352     $ 562,154     $ 23,198     4 %
Net interest margin (tax-equivalent) 3.52 %   4.12 %        

Net Interest IncomeNet-interest income of $475 million for the first nine months of 2021 increased $40.9 million, or 9 percent, over the same period in 2020. Interest income of $488 million for the first nine months of the current year increased $32.5 million, or 7 percent, from the prior year and was primarily attributable to a $25.4 million increase in income from commercial loans, including $20.1 million from the PPP loans. Additionally, interest income on debt securities increased $14.2 million, or 20 percent, over the prior year which resulted from the increased volume of debt securities. Interest expense of $13.4 million for the first nine months of 2021 decreased $8.4 million, or 39 percent over the prior year primarily as a result of a decrease in the cost of deposits. The total funding cost (including non-interest bearing deposits) for the first nine months of 2021 was 10 basis points, which decreased 12 basis points compared to 22 basis points in first nine months of 2020.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during the first nine months of 2021 was 3.52 percent, a 60 basis points decrease from the net interest margin of 4.12 percent for the same period in the prior year. The core net interest margin, excluding 3 basis points of discount accretion, 1 basis point of non-accrual interest and 13 basis points increase from the PPP loans, was 3.35 which was an 85 basis point decrease from the core margin of 4.20 percent in the prior year. Although the Company was successful in reducing the total cost of funding, it was not enough to outpace the lower yields on core loans and debt securities driven by the current interest rate environment and the shift in the earning asset mix to lower yielding debt securities.

Non-interest IncomeNon-interest income of $110 million for the first nine months of 2021 decreased $17.7 million, or 14 percent, over the same period last year. Service charges and other fees of $41.7 million for the first nine months of 2021 increased $3.0 million, or 8 percent, from prior year as a result of additional fees from increased customer accounts and transaction activity. Miscellaneous loan fees and charges of $8.3 million increased $3.2 million, or 64 percent, driven by increases in loan servicing income and credit card interchange fees due to increased activity. Gain on the sale of loans of $51.6 million for the first nine months of 2021 decreased $21.6 million, or 29 percent, compared to the same period last year which was the result of the anticipated slowing of purchase and refinance activity after the historically high levels in the prior year. Other income of $8.7 million decreased $1.3 million from the prior year and was primarily the result of a gain of $2.4 million on the sale of a former branch building in the first quarter of 2020.

Non-interest Expense Summary

  Nine Months ended        
(Dollars in thousands) Sep 30,2021   Sep 30,2020   $ Change   % Change
Compensation and employee benefits $ 192,941     $ 182,507     $ 10,434       6 %
Occupancy and equipment 28,135     27,945     190       1 %
Advertising and promotions 8,513     7,404     1,109       15 %
Data processing 16,002     15,921     81       1 %
Other real estate owned and foreclosed assets 202     373     (171 )     (46 )%
Regulatory assessments and insurance 5,592     3,622     1,970       54 %
Core deposit intangibles amortization 7,464     7,758     (294 )     (4 )%
Other expenses 41,926     48,094     (6,168 )     (13 )%
Total non-interest expense $ 300,775     $ 293,624     $ 7,151       2 %

Total non-interest expense of $301 million for the first nine months of 2021 increased $7.2 million, or 2 percent, over the prior year same period. Compensation and employee benefits for the first nine months of 2021 increased $10.4 million, or 6 percent, from last year due to the increased number of employees from organic growth, increased performance-related compensation and annual salary increases. Advertising and promotions for the first nine months of 2021 increased $1.1 million, or 15 percent, from the prior year. Regulatory assessment and insurance for the first nine months of 2021 increased $2.0 million from the prior year same period primarily as a result of the State of Montana waiving the first semi-annual regulatory assessment of 2020 and Small Bank assessment credits applied by the FDIC in the first quarter of 2020. Other expenses of $41.9 million, decreased $6.2 million, or 13 percent, from the prior year, primarily from a decrease in acquisition-related expenses. Acquisition-related expenses were $1.7 million in the current year compared to $7.3 million in the prior year.

Provision for Credit Losses

The provision for credit loss benefit was $4.9 million for the first nine months of 2021, including provision for credit loss benefit of $2.9 million on the loan portfolio and credit loss benefit of $2.0 million on unfunded loan commitments. The provision for credit loss benefit of $2.9 million on the loan portfolio in the current year decreased $42.1 million over the provision for credit loss expense of $39.2 million in the prior year which was primarily attributable to changes in the economic forecast related to COVID-19. Net charge-offs during the current year were $1.7 million compared to $2.9 million during the prior year.

Federal and State Income Tax ExpenseTax expense of $55.4 million in the first nine months of 2021 increased $12.7 million, or 30 percent, over the prior year same period. The effective tax rate for the first nine months of 2021 was 19.1 percent compared to 18.8 percent in the prior year same period.

Efficiency RatioThe efficiency ratio was 48.94 percent for the first nine months of 2021 compared to 49.83 percent for the same period last year. Excluding the impact from the PPP loans, the efficiency ratio was 53.34 in 2021 compared to 53.30 in 2020.

Forward-Looking Statements   This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about management’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations in the forward-looking statements, including those set forth in this news release:

  • the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio;
  • changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System or the Federal Reserve Board, which could adversely affect the Company’s net interest income and profitability;
  • changes in the cost and scope of insurance from the Federal Deposit Insurance Corporation and other third parties;
  • legislative or regulatory changes, such as the those signaled by the Biden Administration, as well as increased banking and consumer protection regulation that adversely affect the Company’s business, both generally and as a result of the Company exceeding $10 billion in total consolidated assets;
  • ability to complete pending or prospective future acquisitions;
  • costs or difficulties related to the completion and integration of acquisitions;
  • the goodwill the Company has recorded in connection with acquisitions could become impaired, which may have an adverse impact on earnings and capital;
  • reduced demand for banking products and services;
  • the reputation of banks and the financial services industry could deteriorate, which could adversely affect the Company's ability to obtain and maintain customers;
  • competition among financial institutions in the Company's markets may increase significantly;
  • the risks presented by continued public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow the Company through acquisitions;
  • the projected business and profitability of an expansion or the opening of a new branch could be lower than expected;
  • consolidation in the financial services industry in the Company’s markets resulting in the creation of larger financial institutions who may have greater resources could change the competitive landscape;
  • dependence on the Chief Executive Officer, the senior management team and the Presidents of Glacier Bank divisions;
  • material failure, potential interruption or breach in security of the Company’s systems and technological changes which could expose us to new risks (e.g., cybersecurity), fraud or system failures;
  • natural disasters, including fires, floods, earthquakes, and other unexpected events;
  • the Company’s success in managing risks involved in the foregoing; and
  • the effects of any reputational damage to the Company resulting from any of the foregoing.

The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

Conference Call InformationA conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, October 22, 2021. The conference call will be accessible by telephone and webcast. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 9278886. To participate on the webcast, log on to: https://edge.media-server.com/mmc/p/y8hi69ox. If you are unable to participate during the live webcast, the call will be archived on our website, www.glacierbancorp.com, or by calling 855-859-2056 with the ID 9278886 by October 29, 2021.

About Glacier Bancorp, Inc.Glacier Bancorp, Inc. (NASDAQ:GBCI), a member of the Russell 2000® and the S&P MidCap 400® indices, is the parent company for Glacier Bank and its Bank divisions located across its eight state Western U.S. footprint: Altabank (American Fork, UT), Bank of the San Juans (Durango, CO), Citizens Community Bank (Pocatello, ID), Collegiate Peaks Bank (Buena Vista, CO), First Bank of Montana (Lewistown, MT), First Bank of Wyoming (Powell, WY), First Community Bank Utah (Layton, UT), First Security Bank (Bozeman, MT), First Security Bank of Missoula (Missoula, MT), First State Bank (Wheatland, WY), Glacier Bank (Kalispell, MT), Heritage Bank of Nevada (Reno, NV), Mountain West Bank (Coeur d’Alene, ID), North Cascades Bank (Chelan, WA), The Foothills Bank (Yuma, AZ), Valley Bank of Helena (Helena, MT), and Western Security Bank (Billings, MT).

CONTACT: Randall M. Chesler, CEO
(406) 751-4722
Ron J. Copher, CFO
(406) 751-7706

Glacier Bancorp, Inc.Unaudited Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020
Assets              
Cash on hand and in banks $ 250,579     272,363     227,108     249,245  
Federal funds sold             590  
Interest bearing cash deposits 98,309     648,844     406,034     520,044  
Cash and cash equivalents 348,888     921,207     633,142     769,879  
Debt securities, available-for-sale 7,390,580     6,147,143     5,337,814     4,125,548  
Debt securities, held-to-maturity 1,128,299     1,024,730     189,836     193,509  
Total debt securities 8,518,879     7,171,873     5,527,650     4,319,057  
Loans held for sale, at fair value 94,138     98,410     166,572     147,937  
Loans receivable 11,293,891     11,238,048     11,122,696     11,618,731  
Allowance for credit losses (153,609 )   (151,448 )   (158,243 )   (164,552 )
Loans receivable, net 11,140,282     11,086,600     10,964,453     11,454,179  
Premises and equipment, net 316,191     315,573     325,335     326,925  
Other real estate owned and foreclosed assets 106     771     1,744     5,361  
Accrued interest receivable 79,699     70,452     75,497     91,393  
Core deposit intangible, net 48,045     50,533     55,509     58,121  
Goodwill 514,013     514,013     514,013     514,013  
Non-marketable equity securities 10,021     10,019     10,023     10,366  
Bank-owned life insurance 123,729     123,035     123,763     123,095  
Other assets 120,028     125,547     106,505     105,741  
Total assets $ 21,314,019     20,488,033     18,504,206     17,926,067  
Liabilities              
Non-interest bearing deposits $ 6,632,402     6,307,794     5,454,539     5,479,311  
Interest bearing deposits 10,870,912     10,453,098     9,342,990     8,820,577  
Securities sold under agreements to repurchase 1,040,939     995,201     1,004,583     965,668  
FHLB advances             7,318  
Other borrowed funds 33,671     33,556     33,068     32,967  
Subordinated debentures 132,580     132,540     139,959     139,918  
Accrued interest payable 2,437     2,433     3,305     3,951  
Deferred tax liability 1,815     6,463     23,860     17,227  
Other liabilities 211,647     202,993     194,861     204,041  
Total liabilities 18,926,403     18,134,078     16,197,165     15,670,978  
Commitments and Contingent Liabilities              
Stockholders’ Equity              
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding              
Common stock, $0.01 par value per share, 117,187,500 shares authorized 955     955     954     954  
Paid-in capital 1,497,939     1,496,488     1,495,053     1,493,928  
Retained earnings - substantially restricted 811,063     766,070     667,944     629,109  
Accumulated other comprehensive income 77,659     90,442     143,090     131,098  
Total stockholders’ equity 2,387,616     2,353,955     2,307,041     2,255,089  
Total liabilities and stockholders’ equity $ 21,314,019     20,488,033     18,504,206     17,926,067  

Glacier Bancorp, Inc.Unaudited Condensed Consolidated Statements of Operations

  Three Months ended   Nine Months ended
(Dollars in thousands, except per share data) Sep 30,2021   Jun 30,2021   Mar 31,2021   Sep 30,2020   Sep 30,2021   Sep 30,2020
Interest Income                      
Debt securities $ 30,352     28,730     27,306     25,381     86,388     72,228  
Residential real estate loans 9,885     9,541     10,146     11,592     29,572     35,216  
Commercial loans 115,533     110,829     113,541     109,514     339,903     314,541  
Consumer and other loans 10,971     10,856     10,559     11,000     32,386     33,771  
Total interest income 166,741     159,956     161,552     157,487     488,249     455,756  
Interest Expense                      
Deposits 2,609     2,804     3,014     3,952     8,427     14,120  
Securities sold under agreements to repurchase 496     651     689     886     1,836     2,783  
Federal Home Loan Bank advances             70         684  
Other borrowed funds 178     177     174     173     529     473  
Subordinated debentures 845     855     863     1,003     2,563     3,705  
Total interest expense 4,128     4,487     4,740     6,084     13,355     21,765  
Net Interest Income 162,613     155,469     156,812     151,403     474,894     433,991  
Provision for credit losses 725     (5,653 )   48     5,186     (4,880 )   41,300  
Net interest income after provision for credit losses 161,888     161,122     156,764     146,217     479,774     392,691  
Non-Interest Income                      
Service charges and other fees 15,154     13,795     12,792     13,404     41,741     38,790  
Miscellaneous loan fees and charges 2,592     2,923     2,778     2,084     8,293     5,051  
Gain on sale of loans 13,902     16,106     21,624     35,516     51,632     73,236  
(Loss) gain on sale of debt securities (168 )   (61 )   284     24     55     1,015  
Other income 3,335     2,759     2,643     2,639     8,737     10,071  
Total non-interest income 34,815     35,522     40,121     53,667     110,458     128,163  
Non-Interest Expense                      
Compensation and employee benefits 66,364     64,109     62,468     64,866     192,941     182,507  
Occupancy and equipment 9,412     9,208     9,515     9,369     28,135     27,945  
Advertising and promotions 3,236     2,906     2,371     2,779     8,513     7,404  
Data processing 5,135     5,661     5,206     5,597     16,002     15,921  
Other real estate owned and foreclosed assets 142     48     12     186     202     373  
Regulatory assessments and insurance 2,011     1,702     1,879     1,495     5,592     3,622  
Core deposit intangibles amortization 2,488     2,488     2,488     2,612     7,464     7,758  
Other expenses 15,320     13,960     12,646     16,469     41,926     48,094  
Total non-interest expense 104,108     100,082     96,585     103,373     300,775     293,624  
Income Before Income Taxes 92,595     96,562     100,300     96,511     289,457     227,230  
Federal and state income tax expense 16,976     18,935     19,498     18,754     55,409     42,690  
Net Income $ 75,619     77,627     80,802     77,757     234,048     184,540  

Glacier Bancorp, Inc.Average Balance Sheets

  Three Months ended
  September 30, 2021   June 30, 2021
(Dollars in thousands) AverageBalance   Interest &Dividends   AverageYield/Rate   AverageBalance   Interest &Dividends   AverageYield/Rate
Assets                      
Residential real estate loans $ 817,150     $ 9,885     4.84 %   $ 825,467     $ 9,541     4.62 %
Commercial loans 1 9,468,440     116,963     4.90 %   9,520,603     112,226     4.73 %
Consumer and other loans 974,582     10,971     4.47 %   964,415     10,856     4.51 %
Total loans 2 11,260,172     137,819     4.86 %   11,310,485     132,623     4.70 %
Tax-exempt debt securities 2 1,548,447     14,711     3.80 %   1,548,323     14,740     3.81 %
Taxable debt securities 4 6,767,418     18,896     1.12 %   5,810,800     17,251     1.19 %
Total earning assets 19,576,037     171,426     3.47 %   18,669,608     164,614     3.54 %
Goodwill and intangibles 563,257             565,749          
Non-earning assets 803,226             804,897          
Total assets $ 20,942,520             $ 20,040,254          
Liabilities                      
Non-interest bearing deposits $ 6,505,530     $     %   $ 6,100,872     $     %
NOW and DDA accounts 4,261,648     597     0.06 %   4,073,819     600     0.06 %
Savings accounts 2,440,332     146     0.02 %   2,295,334     141     0.02 %
Money market deposit accounts 3,041,634     814     0.11 %   2,921,642     861     0.12 %
Certificate accounts 928,165     1,036     0.44 %   955,694     1,181     0.50 %
Total core deposits 17,177,309     2,593     0.06 %   16,347,361     2,783     0.07 %
Wholesale deposits 5 26,117     16     0.24 %   34,301     21     0.24 %
Repurchase agreements 988,283     495     0.20 %   974,744     651     0.27 %
Subordinated debentures and other borrowed funds 166,151     1,024     2.44 %   166,002     1,032     2.49 %
Total funding liabilities 18,357,860     4,128     0.09 %   17,522,408     4,487     0.10 %
Other liabilities 182,573             168,613          
Total liabilities 18,540,433             17,691,021          
Stockholders’ Equity                      
Common stock 955             955          
Paid-in capital 1,497,107             1,495,886          
Retained earnings 805,253             756,561          
Accumulated other comprehensive income 98,772             95,831          
Total stockholders’ equity 2,402,087             2,349,233          
Total liabilities and stockholders’ equity $ 20,942,520             $ 20,040,254          
Net interest income (tax-equivalent)     $ 167,298             $ 160,127      
Net interest spread (tax-equivalent)         3.38 %           3.44 %
Net interest margin (tax-equivalent)         3.39 %           3.44 %

______________________________

1 Includes tax effect of $1.4 million and $1.4 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2021 and June 30, 2021, respectively.2 Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.3 Includes tax effect of $3.0 million and $3.0 million on tax-exempt debt securities income for the three months ended September 30, 2021 and June 30, 2021, respectively.4 Includes tax effect of $255 thousand and $255 thousand on federal income tax credits for the three months ended September 30, 2021 and June 30, 2021, respectively.5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Glacier Bancorp, Inc.Average Balance Sheets (continued)

  Three Months ended
  September 30, 2021   September 30, 2020
(Dollars in thousands) AverageBalance   Interest &Dividends   AverageYield/Rate   AverageBalance   Interest &Dividends   AverageYield/Rate
Assets                      
Residential real estate loans $ 817,150     $ 9,885     4.84 %   $ 1,010,503     $ 11,592     4.59 %
Commercial loans 1 9,468,440     116,963     4.90 %   9,636,631     110,847     4.58 %
Consumer and other loans 974,582     10,971     4.47 %   957,284     11,000     4.57 %
Total loans 2 11,260,172     137,819     4.86 %   11,604,418     133,439     4.57 %
Tax-exempt debt securities 3 1,548,447     14,711     3.80 %   1,379,577     13,885     4.03 %
Taxable debt securities 4 6,767,418     18,896     1.12 %   2,809,545     14,568     2.07 %
Total earning assets 19,576,037     171,426     3.47 %   15,793,540     161,892     4.08 %
Goodwill and intangibles 563,257             572,759          
Non-earning assets 803,226             794,165          
Total assets $ 20,942,520             $ 17,160,464          
Liabilities                      
Non-interest bearing deposits $ 6,505,530     $     %   $ 5,171,984     $     %
NOW and DDA accounts 4,261,648     597     0.06 %   3,218,536     642     0.08 %
Savings accounts 2,440,332     146     0.02 %   1,804,438     166     0.04 %
Money market deposit accounts 3,041,634     814     0.11 %   2,453,659     1,161     0.19 %
Certificate accounts 928,165     1,036     0.44 %   981,385     1,936     0.78 %
Total core deposits 17,177,309     2,593     0.06 %   13,630,002     3,905     0.11 %
Wholesale deposits 5 26,117     16     0.24 %   86,852     47     0.22 %
Repurchase agreements 988,283     495     0.20 %   1,049,002     2,062     0.78 %
FHLB advances         %   21,273     70     1.30 %
Subordinated debentures and other borrowed funds 166,151     1,024     2.44 %           %
Total funding liabilities 18,357,860     4,128     0.09 %   14,787,129     6,084     0.16 %
Other liabilities 182,573             120,294          
Total liabilities 18,540,433             14,907,423          
Stockholders’ Equity                      
Common stock 955             954          
Paid-in capital 1,497,107             1,493,353          
Retained earnings 805,253             622,099          
Accumulated other comprehensive income 98,772             136,635          
Total stockholders’ equity 2,402,087             2,253,041          
Total liabilities and stockholders’ equity $ 20,942,520             $ 17,160,464          
Net interest income (tax-equivalent)     $ 167,298             $ 155,808      
Net interest spread (tax-equivalent)         3.38 %           3.92 %
Net interest margin (tax-equivalent)         3.39 %           3.92 %

______________________________

1 Includes tax effect of $1.4 million and $1.3 million on tax-exempt municipal loan and lease income for the three months ended September 30, 2021 and 2020, respectively.2 Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.3 Includes tax effect of $3.0 million and $2.8 million on tax-exempt debt securities income for the three months ended September 30, 2021 and 2020, respectively.4 Includes tax effect of $255 thousand and $266 thousand on federal income tax credits for the three months ended September 30, 2021 and 2020, respectively.5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Glacier Bancorp, Inc.Average Balance Sheets (continued)

  Nine Months ended
  September 30, 2021   September 30, 2020
(Dollars in thousands) AverageBalance   Interest &Dividends   AverageYield/Rate   AverageBalance   Interest &Dividends   AverageYield/Rate
Assets                      
Residential real estate loans $ 844,945     $ 29,572     4.67 %   $ 1,013,072     $ 35,216     4.63 %
Commercial loans 1 9,467,329     344,117     4.86 %   8,896,708     318,435     4.78 %
Consumer and other loans 963,002     32,386     4.50 %   947,372     33,771     4.76 %
Total loans 2 11,275,276     406,075     4.82 %   10,857,152     387,422     4.77 %
Tax-exempt debt securities 3 1,547,429     44,162     3.81 %   1,237,779     37,542     4.04 %
Taxable debt securities 4 5,771,573     51,998     1.20 %   2,380,184     43,070     2.41 %
Total earning assets 18,594,278     502,235     3.61 %   14,475,115     468,034     4.32 %
Goodwill and intangibles 565,724             562,533          
Non-earning assets 816,982             760,758          
Total assets $ 19,976,984             $ 15,798,406          
Liabilities                      
Non-interest bearing deposits $ 6,069,326     $     %   $ 4,528,500     $     %
NOW and DDA accounts 4,057,019     1,768     0.06 %   2,971,702     2,244     0.10 %
Savings accounts 2,277,335     425     0.02 %   1,670,722     580     0.05 %
Money market deposit accounts 2,895,362     2,540     0.12 %   2,262,781     4,025     0.24 %
Certificate accounts 951,655     3,640     0.51 %   986,807     6,940     0.94 %
Total core deposits 16,250,697     8,373     0.07 %   12,420,512     13,789     0.15 %
Wholesale deposits 5 32,787     55     0.22 %   70,880     332     0.63 %
Repurchase agreements 988,092     1,835     0.25 %   892,418     6,960     1.04 %
FHLB advances         %   103,700     684     0.87 %
Subordinated debentures and other borrowed funds 165,996     3,092     2.49 %           %
Total funding liabilities 17,437,572     13,355     0.10 %   13,487,510     21,765     0.22 %
Other liabilities 181,640             149,423          
Total liabilities 17,619,212             13,636,933          
Stockholders’ Equity                      
Common stock 955             947          
Paid-in capital 1,496,051             1,467,623          
Retained earnings 757,666             586,963          
Accumulated other comprehensive income 103,100             105,940          
Total stockholders’ equity 2,357,772             2,161,473          
Total liabilities and stockholders’ equity $ 19,976,984             $ 15,798,406          
Net interest income (tax-equivalent)     $ 488,880             $ 446,269      
Net interest spread (tax-equivalent)         3.51 %           4.10 %
Net interest margin (tax-equivalent)         3.52 %           4.12 %

______________________________

1 Includes tax effect of $4.2 million and $3.9 million on tax-exempt municipal loan and lease income for the nine months ended September 30, 2021 and 2020, respectively.2 Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.3 Includes tax effect of $9.0 million and $7.6 million on tax-exempt debt securities income for the nine months ended September 30, 2021 and 2020, respectively.4 Includes tax effect of $766 thousand and $798 thousand on federal income tax credits for the nine months ended September 30, 2021 and 2020, respectively.5 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Glacier Bancorp, Inc.Loan Portfolio by Regulatory Classification

  Loans Receivable, by Loan Type   % Change from
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Jun 30,2021   Dec 31,2020   Sep 30,2020
Custom and owner occupied construction $ 170,489       $ 158,405       $ 157,529       $ 166,195       8   %   8   %   3   %
Pre-sold and spec construction 188,668       163,740       148,845       157,242       15   %   27   %   20   %
Total residential construction 359,157       322,145       306,374       323,437       11   %   17   %   11   %
Land development 151,640       111,736       102,930       96,814       36   %   47   %   57   %
Consumer land or lots 143,977       138,292       123,747       122,019       4   %   16   %   18   %
Unimproved land 68,805       63,469       59,500       64,770       8   %   16   %   6   %
Developed lots for operative builders 33,487       27,143       30,449       30,871       23   %   10   %   8   %
Commercial lots 76,382       64,664       60,499       62,445       18   %   26   %   22   %
Other construction 562,223       554,548       555,375       537,105       1   %   1   %   5   %
Total land, lot, and other construction 1,036,514       959,852        932,500        914,024          %   11    %   13    %
Owner occupied 2,069,551       2,019,860       1,945,686       1,889,512       2   %   6   %   10   %
Non-owner occupied 2,561,777       2,436,672       2,290,512       2,259,062       5   %   12   %   13   %
Total commercial real estate 4,631,328       4,456,532       4,236,198       4,148,574       4   %   9   %   12   %
Commercial and industrial 1,407,353       1,654,237       1,850,197       2,308,710       (15 ) %   (24 ) %   (39 ) %
Agriculture 748,548       746,678       721,490       747,145         %   4   %     %
1st lien 1,159,265       1,105,579       1,228,867       1,256,111       5   %   (6 ) %   (8 ) %
Junior lien 36,942       38,029       41,641       43,355       (3 ) %   (11 ) %   (15 ) %
Total 1-4 family 1,196,207       1,143,608       1,270,508       1,299,466       5   %   (6 ) %   (8 ) %
Multifamily residential 373,022       398,499       391,895       359,030       (6 ) %   (5 ) %   4   %
Home equity lines of credit 709,828       693,135       657,626       651,546       2   %   8   %   9   %
Other consumer 198,763       201,336       190,186       191,761       (1 ) %   5   %   4   %
Total consumer 908,591       894,471       847,812       843,307       2   %   7   %   8   %
States and political subdivisions 612,882       631,199       575,647       617,624       (3 ) %   6   %   (1 ) %
Other 114,427       129,237       156,647       205,351       (11 ) %   (27 ) %   (44 ) %
Total loans receivable, including loans held for sale 11,388,029       11,336,458       11,289,268       11,766,668         %   1   %   (3 ) %
Less loans held for sale 1 (94,138 )     (98,410 )     (166,572 )     (147,937 )     (4 ) %   (43 ) %   (36 ) %
Total loans receivable $ 11,293,891       $ 11,238,048       $ 11,122,696       $ 11,618,731         %   2   %   (3 ) %

______________________________

1 Loans held for sale are primarily 1st lien 1-4 family loans.

Glacier Bancorp, Inc.Credit Quality Summary by Regulatory Classification

   Non-performing Assets, by Loan Type   Non-AccrualLoans   AccruingLoans 90Daysor More PastDue   Other real estate owned and foreclosed assets
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Sep 30,2021   Sep 30,2021   Sep 30,2021
Custom and owner occupied construction $ 240     243     247     249     240          
Land development 31     279     342     450     31          
Consumer land or lots 186     190     201     223     186          
Unimproved land 166     178     294     417     166          
Commercial lots     368     368     682              
Other construction 276                 276          
Total land, lot and other construction 659     1,015     1,205     1,772     659          
Owner occupied 3,323     3,747     6,725     9,077     3,323          
Non-owner occupied 2,089     1,892     4,796     4,879     1,716     373      
Total commercial real estate 5,412     5,639     11,521     13,956     5,039     373      
Commercial and Industrial 5,621     6,046     6,689     8,571     5,444     177      
Agriculture 32,712     31,742     6,313     8,972     28,412     4,300      
1st lien 3,178     4,186     5,353     6,559     3,091     87      
Junior lien 166     272     301     986     166          
Total 1-4 family 3,344     4,458     5,654     7,545     3,257     87      
Multifamily residential —      —      —      —      —           
Home equity lines of credit 2,393     2,653     2,939     2,903     2,224     81     88  
Other consumer 539     542     572     407     392     129     18  
Total consumer 2,932     3,195     3,511     3,310     2,616     210     106  
Other 259     703     293     288     234     25      
Total $ 51,179     53,041     35,433     44,663     45,901     5,172     106  

Glacier Bancorp, Inc.Credit Quality Summary by Regulatory Classification (continued)

  Accruing 30-89 Days Delinquent Loans,  by Loan Type   % Change from
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Jun 30,2021   Dec 31,2020   Sep 30,2020
Custom and owner occupied construction $ 892     $     $ 788     $ 448     n/m   13   %   99   %
Pre-sold and spec construction 325     70             364   %   n/m   n/m
Total residential construction 1,217     70     788     448     1,639   %   54   %   172   %
Land development 276         202         n/m   37   %   n/m
Consumer land or lots 325         71     220     n/m   358   %   48   %
Unimproved land 181     307     357     381     (41 ) %   (49 ) %   (52 ) %
Developed lots for operative builders 59         306         n/m   (81 ) %   n/m
Other construction 12,884                 n/m   n/m   n/m
Total land, lot and other construction 13,725     307     936     601     4,371   %   1,366   %   2,184   %
Owner occupied 1,933     2,243     3,432     3,163     (14 ) %   (44 ) %   (39 ) %
Non-owner occupied 443     574     149     1,157     (23 ) %   197   %   (62 ) %
Total commercial real estate 2,376     2,817     3,581     4,320     (16 ) %   (34 ) %   (45 ) %
Commercial and industrial 1,581     2,947     1,814     2,354     (46 ) %   (13 ) %   (33 ) %
Agriculture 1,032     837     1,553     2,795     23   %   (34 ) %   (63 ) %
1st lien 350     736     6,677     2,589     (52 ) %   (95 ) %   (86 ) %
Junior lien 167     106     55     738     58   %   204   %   (77 ) %
Total 1-4 family 517     842     6,732     3,327     (39 ) %   (92 ) %   (84 ) %
Home equity lines of credit 3,023     1,942     2,840     2,200     56   %   6   %   37   %
Other consumer 1,361     919     1,054     789     48   %   29   %   72   %
Total consumer 4,384     2,861     3,894     2,989     53   %   13   %   47   %
States and political subdivisions         2,358         n/m   (100 ) %   n/m
Other 1,170     1,395     1,065     797     (16 ) %   10   %   47   %
Total $ 26,002     $ 12,076     $ 22,721     $ 17,631     115   %   14   %   47   %

______________________________

n/m - not measurable

Glacier Bancorp, Inc.Credit Quality Summary by Regulatory Classification (continued)

  Net Charge-Offs (Recoveries), Year-to-DatePeriod Ending, By Loan Type   Charge-Offs   Recoveries
(Dollars in thousands) Sep 30,2021   Jun 30,2021   Dec 31,2020   Sep 30,2020   Sep 30,2021   Sep 30,2021
Custom and owner occupied construction $             (9 )     (9 )          
Pre-sold and spec construction (12 )     (8 )     (24 )     (19 )         12  
Total residential construction (12 )     (8 )     (33 )     (28 )         12  
Land development (163 )     (77 )     (106 )     (63 )         163  
Consumer land or lots (164 )     (164 )     (221 )     (217 )     3     167  
Unimproved land (241 )     (21 )     (489 )     (489 )         241  
Commercial lots             (55 )     (5 )          
Total land, lot and other construction (568 )     (262 )     (871 )     (774 )     3     571  
Owner occupied (410 )     (70 )     (168 )     (82 )     41     451  
Non-owner occupied (356 )     (503 )     3,030       246       148     504  
Total commercial real estate (766 )     (573 )     2,862       164       189     955  
Commercial and industrial (87 )     (218 )     1,533       740       481     568  
Agriculture       (6 )     337       309       12     12  
1st lien (250 )     (237 )     69       (27 )     42     292  
Junior lien (511 )     (475 )     (211 )     (169 )         511  
Total 1-4 family (761 )     (712 )     (142 )     (196 )     42     803  
Multifamily residential (40 )     (40 )     (244 )     (244 )         40  
Home equity lines of credit (601 )     (23 )     101       79       41     642  
Other consumer 145       74       307       233       369     224  
Total consumer (456 )     51       408       312       410     866  
Other 4,403       3,329       3,803       2,589       7,429     3,026  
Total $ 1,713       1,561       7,653       2,872       8,566     6,853  

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