GBCI - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Glacier Bancorp First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will 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 introduce your host for today’s conference, Mr. CEO, Bancorp. and President Chesler, of Glacier Randy Sir, begin. you may

Randall Chesler

is you, Good right. our here thank Administrator; Chief Angela morning Officer; Chief you Cherry, Chief joining Johnston, All Officer; in Copher, and Barry Financial this Dose, me for Joelle. Don Credit With Officer. us morning by Thank Chief our is our Administrative today. joining Kalispell Accounting our Ron and us phone

we and first scheduling me for you try let we you -- thank that a this holiday avoid today let So going joining will know forward. all will on to keep to us try call

of performance, So released we First acquisitions, Layton my Reno, our Heritage I'll this billion announced comments in being we’ve will add XXXX and National that quarter morning. over business results and one year Yesterday quarter history. keep transactions and try in first the by solid Utah transactions was of two These Bank brief largest $X.X Nevada, to end. a this well-balanced Bank in assets in with company's the one

from first prior the the per quarter first over highlights an the and quarter. an quarters annualized earnings prior for quarter million some XX% $XX.X from increase increase details prior $XX.X Earnings X% share the quarter some So, to quarter. year of -- from million, the X% increased Average $X.XX, over were or of point. annualized quarter. XX% for the loan Diluted and year point this were balances

million or Notably, $XX.X or annualized. $XX.X deposit deposit non-interest growth of growth We annualized. was core million also had X% X%

X points the quarter X.XX% year versus of and interest up up net margin earning over basis of prior assets a ago. XX points Our basis was

on yields one quarter, basis XX Return on points yields basis quarter from for increase over loan the a very for points to quarter the the the a increased prior X.XX% quarter. X.XX%. strong to was basis from And X.XX%. our assets prior company XX prior the increased assets Our point earning

our and We regular closed, quarterly is also a Coast a with dividend. a And best performers Reno, friendly declared community dividend the deposit Nevada drivers stable Valley, This environment in we of community markets the share, place a quality Bank, after definitive strategically business margin the and Silicon near Reno signing agreement large quarter bank, great in low Heritage $X.XX right announced Reno believe one offers are industry, in cost loans. the a Nevada. high bank of base cents We in in XXXth high excellent the numerous consecutive per acquire the fantastic to West specifically quality long-term. located a on for of growth of the life.

we're presence So future nicely And our this new this to Glacier very growth. us excited family dynamic expand for and market into to position addition will the really state.

of is points first five prior subsidiary the a quarter. decrease land the being first growth. fifth lot points than of securities and of were So X million proud million, quarter the loan basis million, decreased it was points Montana $X.X board. quarter. of of had loans their The team's XX and loans. Once zero a feel a starting the of assets construction points We completion basis quarter and decrease Net the end for loan Early to activity. area. represent a Total compared larger model prior construction without coldest a reach $X.X $X.X on the ended $X.X in million slower the improved for contributed territory. million year this all new of million investment basis at of XX% quarter the loans This of about snowiest Investment very points, categories month of year $X.XXX a the or at quarter quarter. lower target the XX basis end payoff very the basis or in from loan and the record at XX% percentage February of current active loans total projects performance portfolio effective. the good points first the first and a said, one $XX year in and our the billion. at percentage were business paydown quarter XX prior in year lower the loans of million or as when which fifth to divisions, quarter of one remains number healthy remain basis construction ago. payoffs quarter the $XX total in was That the production quarter $XXX and from the primarily seasonality, XX% loan quality and loans is again X% in stage or to were basis end million, billion than to the credit past from charge-offs ratios which quarter compared prior quarter of first compared or our ago. our was million across was among elevated markets slightly Western our from once $XX.X basis At again, distributed $XXX paydowns first with for about Non-performing as I'm of all which delinquencies still the of quarter. assets especially first of due the assets other first of end prior as first points quarter XX of to securities the year XX were X we in points, our half quarter a X% almost below decreased NPAs the $XXX the the first at end our were year's quarter the for well

working quite on some as And as know, on level mentioned very NPAs. are continued reduction and been see for We you of we've pleased this this we've time. calls, to the in prior

XX on losses The level annualized. the job to and deposit This an quarter. quarter XX quarter, deposits Our for we quarter X quarter as did difficult or at compared basis NPAs of was total points credits. cost a divisions quarter. bearing from to and XX around the point And prior as through loan quarter. year's from current billion. total move in the expect had which basis and cost first were the first increase and by cost positive to an up prior quarter these fluctuations end the basis unchanged we at losses the The of in prior increased and million for primarily core the driven were Provision XX seasonality. XX quarter prior were in the was a excellent the at The down funds deposits loan these prior mitigate quarter essentially portfolio increased continued quarter allowance Core points this to We basis in due from points down the stable $X.X XX deposits X.XX%, million annualized XX% is quarter to up non-interest from in this our the very core ratio of quarter lease X a increase ended points basis forward. and be $XX.X from points was and loans of before of XX the the a deposits funding basis reflects points, outstanding was the quarter this basis the working points million with Total for the year percentage early basis ended points for X% We in prior off loan needed versus largely the year ago. prior in first the $XX,XXX prior current outlook in positive quarter. quarter, later $XX Total end. or X% the deposits markets. $X.X quarter borrowings paid borrowed up of our of

attributable Our XX% -- to the peers loans continue an $XX loans loans. $XXX increased increases about prior of flat was to the we and increased rate quarter quarter, our were $X.X quarter first managing do outstanding commercial prior was job markets. or the $XX.X to XX% over for area. on these And from which Interest expect million or interest their and million, income XX million year million of outperform this primarily commercial Interest costs in divisions which prior from renewing new to quarter. deposit and and increases each quarter. in was the increase first on Both or continue year's to X% specific prior income to an

and a loan X.XX%. portfolio year increased net increased primarily increase for margin increase of $X.X net margin X yielding percentage loans prior over other million the from prior X.X% The basis margin quarter. quarter. the first from Service million flat to fees the and rate the increased reduction same earning XX% due prior of from tax interest employees a increase primarily of $XX.X due net increase was a quarter $XX.X of to or year was quarter. acquisitions. organic prior due X% million prior the compared in basis first from prior quarter the estate growth prior XX% $X.X million sale The quarter point increased in first the the prior to margin result quarter increased expenses. and expense totaled acquisition first in from primarily million to of X% XX%, million increase number first quarter of Gains was quarter quarter adjustments million the year and the X.XX% quarter million decreased of improved extreme salary $XX.X the acquisitions. or $X XX rates assets weather, loans million or $XXX,XXX Non-interest impacted February was year or as activity. prior margin quarter, Our points the X% in Gain quarter. million, from current the decreased accounts and $X.X $XX.X of Compensation on of quarter which year remix from or a $XXX,XXX as $X.X annual from the the primarily Non-interest XX% year. result X.XX% the prior the result earning the an portfolio. number Tax or X.XX%. to in the million loan the prior was quarter, and quarter quarter. million The X% expenses XX% to of And from XX%, the cold of first quarter. Other expense net purchase higher quarter prior to increased on first X% benefits first $XX year income or quarter increased quarter, $X.X charges X% year million, real interest primarily which in yields the was to for or related the decreased the first from compared the effective first employee the or for over the on flat of $X due for $X.X to and last year's XXXX over or the the and of of in assets from prior prior The increases benefit increase interest the to was seasonality

was to first ratio of year prior basis a ratio XX%. quarter efficiency basis the from year efficiency XX.XX%, Our XXX point a expect ratio quarter the efficiency XX.XX%. of between the and over ratio XX.X% We point XXX still XX% increase and efficiency prior be full improvement

performance represents The strong for company. first the another quarter

the noticed, add, will Bank assets will in these announced Bank proceed in delivering the company in of National Layton to National approvals billion Bank the addition the regulatory add First as Heritage also I which the end of all occur I $X.X received And this In to we've with over performance acquisitions XXXX. previously month. acquisition closing as should at planned of solid of Reno. for and Layton, First the of quarter,

like and division market any to for commitment I'd my well line the That to our questions seven teams staff be remarks. like all would as their may drive Joelle I ends continue states, their our and results senior you the Our leading ask produce to to have. across presidents them formal open now best. please to and for XX that as thank

Operator

[Operator Thank Jackie comes Our first KBW. Instructions] you. Bohlen question from with

Your line is now open.

Jacquelynne Bohlen

Hi. morning, everyone. Good

Randall Chesler

Jackie. morning, Good

Jacquelynne Bohlen

could on just Xst, acquisitions will of you a if wondered two a just the an be impact of I -- update legacy Glacier? on the the with -- us reminder what's July on Durban provide outside We

Randall Chesler

in in then it look, then does really Yes, XXXX same, for this about kick the it XXXX. it's between to so and for XXXX, estimating first -- And going million is forwards we're July. start XXXX impact $X what the and

Jacquelynne Bohlen

just or because jump And combined -- related to I then double acquisitions X, that that get for that XX… expectations is franchise I growth that at the if

Randall Chesler

both. little Yes. it's Yes, a

Jacquelynne Bohlen

Okay, that's there understanding, and cold that the it occurred fees of everything happened seasonality unusual quarter? Thank a in then outside was you. in helpful. was winter anything And that first

Randall Chesler

No. record breaking builders up us a had customers discussion And half snowfall. we more temperature to with the half but cold bring record our that we when activity, it it people of long February breaking -- all such And just was about about temperatures zero, than month, tell that hate was or it, below month a for drops they get injured. where the equipment breaks, stop and

So And our bit of point. that an stop that on volume. things at a really had impact

Jacquelynne Bohlen

about banking, of anyone when versus about not should I you a go are XXXX volume, think you in that's mortgage thinking forward terms understood working guess, no condition the Yes, then, be And how XXXX? again. particularly

Randall Chesler

our Yes, having good we about business. this strong a quarter. very very We're to mortgage feel start

to that. see drop to bit. rates So pick We refinances given starting up, the see happy we're interest a actually

full So once going again, basis, we feel on a it's to a like year XXXX. lot look

Just about of volume. kind of the range same

very, stable. So very

Jacquelynne Bohlen

is even continues obviously higher little might pickup? there that pick rates in to And we of or volume some that a forces see, there are independent bit XXXX a that other Okay. offset if might on possibility refinance up

Randall Chesler

supply. a -- is a here just own our bit Well, headwind of

continue with our we of lack So to in many of markets supply. wrestle

and tight labor is And supply. also build so -- to in

refis, open bit rates year. think really to the on that's drop more to at a that of bit we significantly. for against the of have I amount up So look little limiter would over prior performing And a when a

outlook. would being but don't possibility Jackie, a the that I a So see there's say we just change as material to

Jacquelynne Bohlen

Randy. great now. color. you, step No, I'll back Okay. that's Thank

Randall Chesler

right. All

You're welcome,

Operator

And from Inc. our McGuire next question Stephens comes Gordon with

now Your open. line is

Gordon McGuire

gentlemen. Good morning,

Randall Chesler

Good morning, Gordon.

Gordon McGuire

And you maybe in to have the accretion maybe also the on then on quarter? originations much the Ron, start was? the NIM, new do yield So just the how quarter this

Ronald Copher

Yes.

that's hopefully When talking origination you're new accretion. the of the north you that X.XX. And discount on accounting accretion purchase So, say will continue. to

Gordon McGuire

Yes.

Ronald Copher

quarter, Yes, that's X basis fourth same as it the was in points.

Gordon McGuire

really second your then outlook positive off how sounded January, And to you maybe this repricing following five In just getting are and the same it. I rates your it years. most Got takes dynamic loans vein, around just NIM reprice. year, pretty priced kind the loan a the year for of in though, talking think of

your your three talk five where months the So year I'm for wondering, just dynamics year. any kind with versus of book you expectation the maybe that was ago where moderated about if it's has the yields it at just and in throughout if loan the NIM and just those could repricing

Ronald Copher

portfolio the there's bias. of momentum and advances five so is Most the year Yes, tied federal morning. you're this upward loan pulls home and But certainly really our rate correct. bank to

just XX So XXX from basically we've year, of through last last dropped night, points. basis

up, but come we're Now one to see the back that that's of drivers. key starting

The credit they're we're bias. those act characters, as and seeing still everywhere, also they we've some it the observing. irrational irrational upward unions spoken it up, things not done that. part But of we But to may to but bank have feel two So And, going there's we're of in also well. are pricing. if with not they compete say where space I we're certainly

we that really the addition Randy, the I'll headwinds word, of Layton on our feel and are margin. expansion So will said there, we interest but that Heritage net with borrow the see

bring collectively, margin. the they'll fact, In X points to basis

want So that. hazard it. I good a early But number. we It's too to feel still about don't to do

Gordon McGuire

with yields, can about change you your as anything the can this then about quarter. just what as in far early investment quarter? basis how on buying the point, you're the this into this late whether and rate think quarter, maybe the maybe that at talk quarter, strategy changed XX up around I the And were investment in outlook wondering I'm securities I was any it. carryover maybe in just second they think Got portfolio, if points taxable quarter,

Ronald Copher

Yes, bit duration, backed investments going then nothing the commercial been out mortgage selectively longer little so security, on just and buying with the but meaningful. taxable a we've

fourth really on. was and We to that to the of impact during want last the quarter thought decided the have that started them year. buying so we’d we securities And put

the year. so we’re full for having And

So there. the that's really impact

Gordon McGuire

Got below still are rate XX% tax the it. coming And around given that guidance, this level, you just still a if then lastly, you’re that's thinking just quarter good.

Ronald Copher

with the Heritage Well, as the at the connection rate that's Layton, big I in I said when the went back that looked fact they muni so much XX% income would and from truly don't transcript, portfolio. be you for what bring and on have year full a was and

investments municipal lower in some are the first sold actually the down. so ones our quarter. trending yielding And We of

So the out quarter-over-quarter up and the full XX% get it's you where average full year. for higher going year, then XX% to to will it for ramp steady, could

Gordon McGuire

All you, all Thank had. right. That's I guys.

Operator

question Davidson. D.A. Thank with you. And next comes Rulis our from Jeff

Your line is now open.

Jeffrey Rulis

morning. good Thanks,

Randall Chesler

Good morning, Jeff.

Jeffrey Rulis

touch that Just but target did on the not X%, -- growth the of for of quarter much pushed of given and on a you’re too any -- to I sort kind loan front on wanted bit from they'd seeing the the a pent that was early little potential quarter returns a up there translated some whether but the loan be to weather, reiterate you that focus and or second activity growth good sense second pretty perspective. lumpier, of guess on into

Randall Chesler

been we why it but But they're I They're the good what see the sold, think still there's little digestive demand, don't I they're have I overachieve we're think of we're No, built. feel utilized, pent being we are what the to that actually economies a But going is And I now I period. that's that capacity call that. X%. I and wouldn't being our good. little projects bit up still seeing filled, think with a a customers say, about is velocity a bit that think being digestive

Jeffrey Rulis

Okay.

think $XXX paydown. you So it in million more was I said

kind timing lumpy. just was a it of maybe So

Randall Chesler

Yes.

Jeffrey Rulis

Okay, fair enough.

Randall Chesler

Yes, of the and yes. that we a The activity construction loans because new startup. lot didn't see capacity off and weather, both the paid digestive of

Jeffrey Rulis

Got it.

Okay.

Randall Chesler

some of wouldn't it a now, activity. I want it seeing give right surge I We’re color, to call it of but the you

Jeffrey Rulis

item item income that anything over I little was Got QX function of sequentially, Other line being light, if it, a that know a line but little note? a don't okay. up that was a to million in

Ronald Copher

sorry I'm -- Gordon, Yes, me. Jeff, forgive

Just we and out. from income vary that time investments sticks nothing some gain equity that on had time, can really of from come sale in our income OREO to but

Jeffrey Rulis

Okay. Maybe the just level growth net credit one well. last Barry provisioning on one for certainly lighter trending

any level it's that on Just commentary any provisioning but front. thoughts the wide a on range,

Barry Johnston

As portfolio growth given looked we or accordingly our provision adjusted improvement the the we and accordingly. depending make every quarter it always, and minimal some the at PLs on adjustment growth in in we and metrics credit non-growth loan and

Jeffrey Rulis

you. thank Okay,

Operator

our And Michael question from comes with you. SunTrust. next Thank Young

Your line is now open.

Michael Young

Hey, good morning, everyone.

Randall Chesler

Michael. morning Good

Michael Young

up willing point, or quick and But with over upward this seem provision as on still we XXXX implementation from a I kind if of just now qualitatively? like Wanted and know any maybe your indications at of have provision that terms you forward. are It a onetime hit to that to pressure in the low. even post be start and there'd of at going a early follow you're the X.X% share CECL look any the maybe guys reserve rate run you don't of being in just forward actually environment kind doesn't to so question, just NPAs

Randall Chesler

together. -- it CECL all we're we're pulling still with proceeding so We're it. Well,

run. are We do to our starting

well we of But reserved. early I feels correct. you're right. little at you tell. I think it's So that level, at gut a that lot a can’t But support to well very we're But to have the think I CECL. this tell about out numbers We that don't to We I directionally probably positioned, feel a of surprises expect very point. come think

Michael Young

front. switching just then, gears the to And deposit Okay. maybe

But you the was there side it of payoff this pretty some with been down. good from or having demand that's people just I I into stayed industry on just back have wondering the core obviously guys have from kind a there. focused of would of additional go across with deposit very guys Bank benefits did were those if demand growth? flowing know quarter projects any that say was inflows generally the light, loan and You deposits lot some these cash I really

Randall Chesler

spread it have I I'd growth. pretty out more to particular, to one seems be of and was don't kind any say core think Yes, there source.

spread up our be and turned the consistent just of So pretty relationships think, discussions of kind making increased brick strategy brick. it loans long-term to those by I around out building And Barry, much seem and sure deposit follow. with

Michael Young

one five then vintage it a pricing that that the is Ron higher at shorter, flow Okay. yields? close years I'm of the start Good. rates kind like pricing on loans the last year into just duration? think or of book, the duration about of kind me, going loan dynamics on you year three just as year for maybe and more is in five loan actually the are to of loans it trying versus And much new to five shift to these to when make off like through running kind pretty

Ronald Copher

but duration. a to hovering it's year down Yes, around it’s And years. it's five anything closer little five come bit,

Michael Young

Okay.

the the got years with mean, I over repricing front rate five multiple six on even the year mentioned, forward, higher that decline So as is last of going we the in loan you still months, fair?

Ronald Copher

Yes, very fair.

Michael Young

for Thanks, all guys. right. me. all Okay, That's

Operator

comes Jaffray. with question Clark from Matthew Thank next you. And our Piper

Your line open. is now

Matthew Clark

Hi, good morning.

Randall Chesler

Matthew. morning, Good

Michael Young

to Just have spot you at relative the XX end interest quarter? March points deposits the in bearing basis the happen on your the deposit rates, do on to of rate

Randall Chesler

and market was Interest that in The bearing. most core and too was of CDs. money overall up

getting know don't question. your if I at So that's

Michael Young

to here some to I foreseeable the bit just is deposit a market, hold to costs about up of on the and below see less this kind continue catch maybe there point? up the to for thinking we do little I'm still from just to start future. Well, what you you're you're price need Fed play with because Is feel guess And, of going at Yes. that pressure of stabilization here.

Randall Chesler

where There's of an at and a them it -- same the the are and very point, has up past no loan need a stick yes Fed many interesting banks are the in to possible time where the all whole probably is at signaled stable loaned Yet it are decrease. XXX% to market to our markets change -- deposits. deposit

where a industry so I our of be bit will they of But, their headwind. two to where the tell little -- some a us loan goes make the very decided quarter the as the is some actions continued if of deposits we're remain more and changes transaction that's particular price especially our think really, In change. And, don't think individually pressure really where we kind to of not good really on And a to our pricing I demand accounts divisions, this and a material what core very, expect pricing. seeing Fed core subject XX depend had where in in it lot and pressure. to markets we in a there'll

I more of it. on pressure think it's degrees

Michael Young

is look Okay. give in some expected, there if us this trends, migration can charge-offs -- provision sense classified classified your what but for what obviously non-performers mean, when some and where I at deterioration criticized your migration And or lighter than a you were quarter loans, it down, you resides? criticized low any then

Ronald Copher

very grains. recently, are operating a have other rest only the with now the across to agricultural and portfolio their we're other clear one that up it, right is factors, Yes, primarily with the the the we're lines, some lines. to that about and able but not hard seen credits, where performance the there moved the some the weather on location, place point have our improvement our being those only biggest of of Prices borrowers of of. the we're challenge depending seeing seeing is ones That's product only pleased

Michael Young

the as well or adjust just on quarter maybe, up acquisitions. that the we so reserve this the it gross loan Great. for the And discount Barry, on portfolio can

Barry Johnston

million. $XX it's Okay,

Michael Young

thank Okay, you.

Operator

[Operator you. with Our Tim comes Thank question Coffey next FIG instructions] from Partners.

Your now is open. line

Timothy Coffey

Great, thank you. everybody. Good morning,

Randall Chesler

Good morning, Tim.

Timothy Coffey

prepared points having for optimism trends Hey. support data the you're remarks I'm using your quality and and of and/or what forward wondering Randy, your about in talked markets, you your credit markets optimism. on kind

Randall Chesler

we but projects things. properties. intend to two mean, developers let are NPAs. sold being improve NPAs, to lot Barry with Well, I'll develop continue those I to A of follow, our these who

are buying make I they at and most But that's into pretty a then to positive. price. attractive I think indicator. -- intend They're very that's investments very think a good

In percentages seen down addition, you've drop quarter-over-quarter. delinquency our

Barry, this we're we're we environment So than balance performance point. our And looking look when at are sheet, of ago. health then, better showing the the anything flags, just see there add. see we customers we a see year very at and did at red this you point, constantly did to a have if good to

Barry Johnston

Yes. With across the markets, all the markets are still active.

two think Utah, are pretty new which some have going to in and with more I strong bode well to into for coming going markets good with be we're markets some We growth, us. Nevada,

from markets. as on and So, respective those we're side market the positive far staying growth production as

Timothy Coffey

great. Okay,

magnitude within Another or the question was, the can you remind me the non-interest expenses? seasonality what is

Randall Chesler

Let's see.

bit an that of quarter. first uptick comp the reset expense we that a in see really for first hits because of all starts So quarter, hit usually non-interest the the to

So that's pretty pretty I think what quarteris this we past typical, been. what saw much pattern the has

Timothy Coffey

right. questions my Okay. rest answered. have been All Thanks. Yes, of

Randall Chesler

Thank bet. you. You

Operator

I Thank to time. any questions to now call like you. would I'm this any back further remarks. at Chesler closing for over the showing Randall not turn

Randall Chesler

Joelle. you, thank Well,

of a weekend. the on on want what's I a thank holiday We all today everybody to dialing call. in to number you a for So a for great folks wonderful have want day and

you. thank So

Operator

have today's does for Everyone, This you conference. you today's Ladies a may all in disconnect. program, and conclude participating gentlemen, thank wonderful and day.

Glacier Bancorp (GBCI) 19 Apr 192019 Q1 Earnings call transcript