Exhibit 99.1
Glacier Bancorp, Inc. Earnings for Quarter and Year Ended December 31, 2003
HIGHLIGHTS:
* Earnings for quarter of $9.531 million, up 9 percent from last year's
quarter.
* Diluted earnings per share of $.48, up 7 percent from last year's
quarter.
* Record earnings of $38.008 million, up 17 percent from last year.
* Record diluted earnings per share of $1.94, up 15 percent from last
year.
* Loans outstanding increased $133 million, or 10 percent, over a year
ago.
* Non-interest bearing deposits increased $74 million, or 25 percent,
over last year end.
* Cash dividend for the quarter of $.20 declared; bringing 2003 dividend
to $.75 an increase of $.14, or 23 percent over the prior year.
Earnings Summary
(Unaudited - $ in thousands, Three months Year
except per share data) ended December 31, ended December 31,
2003 2002 2003 2002
Net earnings $9,531 $8,761 $38,008 $32,402
Diluted earnings per share $0.48 $0.45 $1.94 $1.69
Return on average assets 1.40% 1.56% 1.53% 1.50%
Return on average equity 16.29% 16.99% 16.82% 16.57%
KALISPELL, Mont., Feb. 5 /PRNewswire-FirstCall/ -- Glacier Bancorp, Inc.
(Nasdaq: GBCI) reported net quarterly earnings of $9.531 million which is an
increase of $770 thousand, or 9 percent, over the $8.761 million for the
fourth quarter of 2002. Diluted earnings per share of $.48, is an increase of
7 percent over the per share earnings of $.45 for the same quarter of 2002.
Return on average assets and return on average equity for the quarter were
1.40 percent and 16.29 percent, respectively, which compares with prior year
returns of 1.56 percent and 16.99 percent.
Net earnings for the year 2003 were $38.008 million which is an increase
of $5.606 million, or 17 percent over the prior year. Diluted earnings per
share of $1.94, is an increase of 15 percent over the $1.69 earned in 2002.
The 2003 return on average assets and return on average equity were
1.53 percent and 16.82 percent, respectively, which compares with the prior
year returns of 1.50 percent and 16.57 percent.
"Higher mortgage interest rates during the fourth quarter reduced the
volume of mortgage loan originations and the resulting gain-on-sale of loans,"
said Mick Blodnick, President and CEO. "October was not a great start to the
quarter as we continued to experience high levels of prepayments in our
securities portfolio and resulting high levels of premium amortization.
November and December saw an abrupt reduction in prepayments and a significant
reduction in premium amortization resulting in our net interest margin
improving from 4.06 percent in October to 4.13 in November to 4.31 percent in
December. Hopefully prepayments will stabilize and we can maintain the
earnings momentum of the past two months as we enter 2004. Our expectations
are that prepayments will not reach the levels of 2003."
Assets (Unaudited - $ in
thousands) December 31,
2003 2002 $ change % change
Cash on hand and in banks $77,093 $74,624 $2,469 3%
Investment securities
and interest bearing
deposits 1,059,358 744,714 314,644 42%
Loans:
Real estate 317,774 361,522 (43,748) -12%
Commercial 841,305 673,256 168,049 25%
Consumer 295,275 286,819 8,456 3%
Total loans 1,454,354 1,321,597 132,757 10%
Allowance for loan
losses (23,990) (20,944) (3,046) 15%
Total loans net of
allowance for loan
losses 1,430,364 1,300,653 129,711 10%
Other assets 172,818 161,353 11,465 7%
Total Assets $2,739,633 $2,281,344 $458,289 20%
At December 31, 2003 total assets were $2.740 billion which is
$458 million greater than the December 31, 2002 assets of $2.281 billion, an
increase of 20 percent. In addition to the internal growth, the third quarter
Pend Oreille Bank acquisition added $66 million to the asset base.
Total loans have increased $133 million from December 31, 2002, of which
$50 million was from the acquisition. Commercial loans have increased
$168 million, or 25 percent, and continue to be the focus of our lending.
Real estate loan volume has been at record levels through much of the year,
with $805 million originated for the year, up from $588 million in 2002. The
refinancing of our existing loans coupled with our decision to sell the
majority of the real estate loan production has resulted in a reduction in
real estate loans of $44 million from December 31, 2002, however, $35 million
of the reduction was in loans held for sale. Consumer loans have increased
$8 million resulting from increases in home equity loans. Home-equity loans
continue to be the primary source of our consumer loan originations and have
increased approximately $26 million, or 15 percent, from a year ago. Home
equity loans comprise 68 percent of consumer loans at December 31, 2003.
Investment securities, including interest bearing deposits in other
financial institutions, have increased $315 million from December 31, 2002.
The cash received from the reduction in real estate loans has been redeployed
in mortgage related investment securities. These securities have
characteristics that result in less interest rate risk in an increasing
interest rate environment than retaining long term mortgage loans. Additional
investments were made to utilize funding liquidity that exceeded loan growth
opportunities, and expected principal reductions on mortgage related
investments.
Liabilities (Unaudited - $
in thousands) December 31,
2003 2002 $ change % change
Non-interest bearing
deposits $369,052 $295,016 $74,036 25%
Interest-bearing
deposits 1,228,573 1,164,907 63,666 5%
Advances from Federal
Home Loan Bank 777,294 483,660 293,634 61%
Securities sold under
agreements to repurchase
and other borrowed funds 64,986 61,293 3,693 6%
Other liabilities 26,889 29,219 (2,330) -8%
Trust preferred securities 35,000 35,000 -- 0%
Total liabilities $2,501,794 $2,069,095 $432,699 21%
Total deposits have increased $138 million from the December 31, 2002
balances of which $59 million came with the acquisition. There was a large
increase of $74 million, or 25 percent, in non-interest bearing deposits.
This growth in low cost stable funding gives us increased flexibility in
managing our asset mix. The High Performance Checking program (HPC), based on
the experience of the three banks previously using HPC, is expected to
increase our base of customers, providing additional low cost deposit balances
and enhancing fee income. Interest-bearing deposits are up $64 million, or
5 percent, of which $49 million was added by the acquisition. Federal Home
Loan Bank advances have also increased $294 million as we continue to take
advantage of the flexibility of that funding source in this current period of
low interest rates.
Stockholders' equity
(Unaudited - $ in
thousands except December 31,
per share data) 2003 2002 $ change % change
Common equity $231,223 $202,138 $29,085 14%
Net unrealized gain on
securities 6,616 10,111 (3,495) -35%
Total stockholders'
equity $237,839 $212,249 $25,590 12%
Stockholders' equity to
total assets 8.68% 9.30% -- --
Tangible equity to
total assets 7.23% 7.68% -- --
Book value per
common share $12.28 $11.16 $1.12 10%
Tangible book value
per common share $10.07 $9.06 $1.01 11%
Market price per share
at end of quarter $32.47 $21.42 $11.05 52%
Total equity and book value per share amounts have increased substantially
from the prior year, primarily the result of earnings retention, and stock
options exercised. Net unrealized gains on securities declined $3.5 million
from a year ago primarily the result of increasing intermediate term interest
rates.
Our stock price experienced another solid year, increasing 52 percent.
"An improving economy and growth in the markets in which we operate created a
positive and rewarding business climate," said Blodnick.
Operating Results for Three Months Ended December 31, 2003 Compared to
December 31, 2002
Operating results include amounts related to the operation of the three
branches acquired with the Pend Oreille Bank as of July 15, 2003.
Revenue summary
(Unaudited - $ in thousands) Three months ended December 31,
2003 2002 $ change % change
Net interest income $24,887 $22,368 $2,519 11%
Fees and other revenue:
Service charges, loan fees,
and other fees 4,987 4,785 202 4%
Gain on sale of loans 1,934 1,993 (59) -3%
Gain on sale of investments -- 236 (236) -100%
Other income 402 263 139 53%
Total non-interest income 7,323 7,277 46 1%
Total revenue $32,210 $29,645 $2,565 9%
Tax equivalent net interest
margin 4.17% 4.49%
Net Interest Income
Net interest income for the quarter increased $2.519 million, or
11 percent, over the same period in 2002. Total interest income was
$477 thousand, or 1 percent higher than the same quarter in 2002, while total
interest expense was $2.042 million or 18 percent lower. The decrease in
interest expense is partly attributed to the increase in non-interest bearing
deposits which reduced the need to borrow funds. The net interest margin as a
percentage of earning assets, on a tax equivalent basis, decreased from
4.49 percent for the 2002 quarter, 4.35 percent for the first quarter of 2003,
4.17 percent for the second quarter of 2003, to 4.12 percent for the third
quarter. The net interest margin for the fourth quarter of 2003 increased to
4.17 percent the same as the second quarter. Premium amortization on mortgage
related investments for the current quarter was $3.884 million, down slightly
from the $3.976 million during the third quarter, but an increase of
$2.177 million over last year's quarter. Mortgage loan prepayments have
slowed resulting in less amortization expense allowing our net interest margin
to stabilize. We continue to deploy a strategy of investing in short term
securities that carry lower current yields. We believe it is inappropriate in
this rate environment to extend maturities in order to achieve higher yields.
This strategy in the near term will keep pressure on our net interest margin,
however from a longer term perspective we are more comfortable with this
approach.
Non-interest Income
Fee income increased 4 percent over the same period last year, driven
primarily by an increased number of loan and deposit accounts. Gain on sale
of loans decreased $59 thousand from the fourth quarter of last year and
$1.324 million from the third quarter of 2003, reflecting the reduced mortgage
loan refinancing activity. Other income, which includes a variety of
activities, was $139 thousand greater than the prior years' quarter.
Non-interest expense summary
(Unaudited - $ in thousands) Three months ended December 31,
2003 2002 $ change % change
Compensation and employee
benefits $9,696 $7,592 $2,104 28%
Occupancy and equipment
expense 2,665 2,626 39 1%
Outsourced data processing 429 540 (111) -21%
Core deposit intangibles
amortization 306 359 (53) -15
Other expenses 4,593 3,993 600 15%
Total non-interest
expense $17,689 $15,110 $2,579 17%
Non-interest Expense
Non-interest expense increased by $2.579 million, or 17 percent, from the
same quarter of 2002 including expenses from the acquisition of the three Pend
Oreille branches, two additional branches in Boise, Idaho, and a new branch in
downtown Bozeman, one of the fastest growing cities in Montana. Compensation
and benefit expense increased $2.104 million, or 28 percent from the fourth
quarter of 2002, with commissions for loan originators, additional support
staff for increased volumes, the new bank branches, and increased cost for
benefits tied to the Company stock price performance, accounting for the
majority of the increase. Outsourced data processing expense decreased by
$111 thousand which included data conversion expense to bring the acquired
branches onto our in-house data system. Other expenses increased
$600 thousand, or 15 percent, primarily from start up expenses on implementing
the High Performance Checking program at the four banks not previously on the
program, additional advertising expense, and costs associated with new branch
offices and the Pend Oreille acquisition. The efficiency ratio (non-interest
expense/net interest income + non-interest income) was 55 percent for the 2003
quarter which is up from 51 percent for the 2002 quarter the result of the
higher operating expenses.
Credit quality
information December 31, September 30, December 31,
(Unaudited - $ in thousands) 2003 2003 2002
Allowance for loan losses $23,990 $23,920 $20,944
Non-performing assets 13,068 10,489 11,582
Allowance as a percentage of
non performing assets 184% 228% 181%
Non-performing assets as a
percentage of total assets 0.48% 0.39% 0.51%
Allowance as a percentage of
total loans 1.65% 1.63% 1.58%
Net charge-offs as a
percentage of loans 0.118% 0.075% 0.261%
Allowance for Loan Loss and Non-Performing Assets
Non-performing assets as a percentage of total assets at December 31, 2003
were at .48 percent, a decrease from .51 percent at December 31, 2002 but up
from .39 percent at September 30, 2003. The increase is attributed to a small
number of loans which are expected to be fully collected. This compares to
the Peer Group average of .65 percent at September 30, 2003, the most recent
information available. The allowance for loan losses was 184 percent of
non-performing assets at December 31, 2003, compared to 181 percent a year
ago. With the continuing change in loan mix from residential real estate to
commercial and consumer loans, which historically have greater credit risk,
the Company has continued to increase the balance in the allowance for loan
losses. The allowance has increased $3.046 million, or 15 percent, from a
year ago to $23.990 million, which is 1.65 percent of total loans outstanding,
up from 1.58 percent a year ago. The fourth quarter provision expense for
loan losses was $696 thousand, a decrease of $824 thousand from the same
quarter in 2002.
Operating Results for Year Ended December 31, 2003 Compared to
December 31, 2002
Operating results include amounts related to the operation of the three
branches acquired with the Pend Oreille Bank as of July 15, 2003.
Revenue summary
(Unaudited - $ in thousands) Years ended December 31,
2003 2002 $ change % change
Net interest income $92,352 $86,467 $5,885 7%
Fees and other revenue:
Service charges, loan fees,
and other fees 19,756 17,954 1,802 10%
Gain on sale of loans 10,674 5,709 4,965 87%
Gain on sale of investments,
net of impairment charge 1,253 238 1,015 426%
Other income 1,879 2,016 (137) -7%
Total non-interest
income 33,562 25,917 7,645 29%
Total revenue $125,914 $112,384 $13,530 12%
Tax equivalent net interest
margin 4.20% 4.51%
Net Interest Income
Net interest income increased $5.885 million, or 7 percent, over 2002.
Total interest income is $3.159 million, or 2 percent lower than in 2002,
while total interest expense is $9.044 million or 19 percent lower. Lower
interest rates were the main reason for the reduction in interest income and
interest expense. Investment income is also lower because of prepayments on
our mortgage related investments which increased the year-to-date premium
amortization by $9.4 million over the prior year. The net interest margin as
a percentage of earning assets, on a tax equivalent basis, decreased from
4.51 percent in 2002 to 4.20 percent in 2003. The additional investments add
to net interest income but at a lower yield. The interest spread on the
increased investments is lower than the historical spread which reduces the
net interest margin.
Non-interest Income
Fee income increased $1.802 million, or 10 percent, over last year, driven
primarily by an increased number of loan and deposit accounts. Gain on sale
of loans increased $4.965 million reflecting the low level of mortgage
interest rates and resulting increased home purchase and loan refinancing
activity. Other income was lower in the current year by $137 thousand
primarily the result of reduced loan servicing income.
Gain on sale of investments, net of an impairment charge of $2.279 million
for impairment of value of collateralized mortgage obligations, increased
$1.015 million from the prior year. Market conditions provided an opportunity
to realize income currently that would have taken several years to earn if the
investments were held.
Non-interest expense summary
(Unaudited - $ in thousands) Years ended December 31,
2003 2002 $ change % change
Compensation and employee
benefits $36,173 $30,448 $5,725 19%
Occupancy and equipment
expense 9,931 9,591 340 4%
Outsourced data processing 1,650 2,048 (398) -19%
Core deposit intangibles
amortization 1,243 1,439 (196) -14%
Other expenses 16,947 14,287 2,660 19%
Total non-interest
expense $65,944 $57,813 $8,131 14%
Non-interest Expense
Non-interest expense increased by $8.131 million, or 14 percent, from
2002. Compensation and benefit expense increased $5.725 million, or
19 percent from 2002, with commissions for loan originators, other incentives,
additional support staff for increased volumes, acquisition of the three Pend
Oreille branches, three additional start-up branches in operation in Boise and
Bozeman, and increased cost for benefits tied to the Company stock price
performance accounting for the majority of the increase. Occupancy and
equipment expense increased $340 thousand, or 4 percent, the result of adding
additional facilities. Outsourced data processing expense decreased by
$398 thousand, or 19 percent, resulting from bringing the core processing for
each subsidiary bank onto our in-house data system. Other expenses increased
$2.660 million, or 19 percent, however, 2002 included a $323 thousand merger
related expense reversal. The increase in other expenses from operations,
excluding this reversal, was $2.337 million, or 16 percent. Charges for data
conversion of Mountain West Bank and the acquired branches to the in-house
data system, start up expenses on implementing the High Performance Checking
program at the four banks not previously on the program, and volume related
increases were the primary reasons for the increased expense. The efficiency
ratio (non-interest expense/net interest income + non-interest income) was
52 percent for 2003 which is up from the 51 percent for 2002.
Allowance for Loan Loss and Non-Performing Assets
The provision expense for loan losses was $3.809 million which is a
decrease of $1.936 million from the prior year's provision. The allowance
balance has increased $3.046 million, or 15 percent, from prior year to
$23.990 million, which is 1.65 percent of total loans outstanding, up from
1.58 percent a year ago. Net charge off loans as a percentage of loans
outstanding were .118 percent for 2003 which is down from .261 percent for
2002.
Cash dividend
On December 29, 2003 the board of directors declared a cash dividend of
$.20 payable January 22, 2004 to shareholders of record on January 13, 2004.
This was a $.04 increase from the same quarter's dividend in 2002, or a
25 percent increase, and is a $.14 increase in dividends declared for the
year, or a 23 percent increase.
Headquartered in Kalispell, Montana, Glacier Bancorp, Inc. conducts
business from Glacier Bank of Kalispell, First Security Bank of Missoula,
Glacier Bank of Whitefish, Valley Bank of Helena, Big Sky Western Bank of
Bozeman, Western Security Bank of Billings, all located in Montana, and
Mountain West Bank located in Idaho with two branches in Utah and one in
Washington.
Visit our website at www.glacierbancorp.com .
For further information, please contact Michael J. Blodnick,
+1-406-751-4701, or James H. Strosahl, +1-406-751-4702, both of Glacier
Bancorp, Inc.
GLACIER BANCORP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION
(Unaudited - $ in thousands
except per share data) December 31, December 31,
2003 2002
Assets:
Cash on hand and in banks $77,093 74,624
Interest bearing cash deposits 9,047 4,753
Cash and cash equivalents 86,140 79,377
Investment securities, available-for-sale 1,050,311 739,961
Net loans receivable:
Real estate loans 317,774 361,522
Commercial Loans 841,305 673,256
Consumer and other loans 295,275 286,819
Allowance for losses (23,990) (20,944)
Total Loans, net 1,430,364 1,300,653
Premises and equipment, net 53,251 47,215
Real estate and other assets owned, net 587 1,542
Federal Home Loan Bank of Seattle stock,
at cost 41,235 38,286
Federal Reserve Bank stock, at cost 5,408 4,578
Accrued interest receivable 14,941 13,421
Core deposit intangible, net 5,865 6,822
Goodwill, net 36,951 33,189
Other assets 14,580 16,300
$2,739,633 2,281,344
Liabilities and stockholders' equity:
Non-interest bearing deposits $369,052 295,016
Interest bearing deposits 1,228,573 1,164,907
Advances from Federal Home Loan Bank
of Seattle 777,294 483,660
Securities sold under agreements to
repurchase 56,968 46,206
Other borrowed funds 8,018 15,087
Accrued interest payable 4,353 6,090
Current income taxes 826 815
Deferred tax liability 7,369 8,629
Trust preferred securities 35,000 35,000
Other liabilities 14,341 13,685
Total liabilities 2,501,794 2,069,095
Preferred shares, 1,000,000 shares
authorized. None outstanding -- --
Common stock, $.01 par value per share.
50,000,000 shares authorized 194 173
Paid-in capital 222,636 173,408
Retained earnings - substantially
restricted 8,393 28,557
Accumulated other comprehensive income 6,616 10,111
Total stockholders' equity 237,839 212,249
$2,739,633 2,281,344
Number of shares outstanding 19,362,670 19,014,400
Book value of equity per share 12.28 11.16
Tangible book value per share 10.07 9.06
GLACIER BANCORP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited - $ in
thousands except
per share data) Three months ended Twelve months ended
December 31, December 31,
2003 2002 2003 2002
Interest income:
Real estate loans $5,766 7,037 23,883 29,290
Commercial loans 13,087 11,925 50,203 47,013
Consumer and
other loans 4,882 5,417 20,013 22,559
Investment
securities
and other 10,317 9,196 36,731 35,127
Total interest
income 34,052 33,575 130,830 133,989
Interest expense:
Deposits 3,741 5,724 17,221 26,268
FHLB Advances 4,309 4,404 16,860 16,959
Securities sold
under agreements
to repurchase 183 158 673 591
Trust preferred
securities 904 905 3,615 3,616
Other borrowed funds 28 16 109 88
Total interest
expense 9,165 11,207 38,478 47,522
Net interest income 24,887 22,368 92,352 86,467
Provision for
loan losses 696 1,520 3,809 5,745
Net Interest income
after provision
for loan losses 24,191 20,848 88,543 80,722
Non-interest income:
Service charges
and other fees 3,935 3,679 15,458 14,011
Miscellaneous loan
fees and charges 1,052 1,106 4,298 3,943
Gain on sale of
loans 1,934 1,993 10,674 5,709
Gain on sale of
investments, net -- 236 1,253 238
Other income 402 263 1,879 2,016
Total fees and
other income 7,323 7,277 33,562 25,917
Non-interest expense:
Compensation,
employee benefits
and related
expenses 9,696 7,592 36,173 30,448
Occupancy and
equipment expense 2,665 2,626 9,931 9,591
Outsourced data
processing expense 429 540 1,650 2,048
Core deposit
intangibles
amortization 306 359 1,243 1,439
Other expenses 4,593 3,993 16,947 14,287
Total
non-interest
expense 17,689 15,110 65,944 57,813
Earnings before
income taxes 13,825 13,015 56,161 48,826
Federal and state
income tax expense 4,294 4,254 18,153 16,424
Net earnings $9,531 8,761 38,008 32,402
Basic earnings
per share 0.49 0.46 1.97 1.72
Diluted earnings
per share 0.48 0.45 1.94 1.69
Dividends declared
per share 0.20 0.16 0.75 0.61
Return on average
assets (annualized) .40% 1.56% 1.53% 1.50%
Return on average
equity (annualized) 16.29% 16.99% 16.82% 16.57%
Return on tangible
average equity
(annualized) 19.99% 21.21% 20.58% 21.01%
Average
outstanding
shares -
basic 19,347,117 18,968,787 19,270,632 18,866,935
Average
outstanding
shares -
diluted 19,769,849 19,266,161 19,620,458 19,188,934
SOURCE Glacier Bancorp, Inc.
-0- 02/05/2004
/CONTACT: Michael J. Blodnick, +1-406-751-4701, or James H. Strosahl,
+1-406-751-4702, both of Glacier Bancorp, Inc./
/Web site: http://www.glacierbancorp.com /
(GBCI)
CO: Glacier Bancorp, Inc.
ST: Montana
IN: FIN
SU: ERN DIV