QNB Corp. Reports Earnings For Second Quarter 2019

Unrealized loss on equity securities decreased $446,000 when comparing the second quarter 2019 to the same period in 2018, due to the decrease …

QUAKERTOWN, Pa., July 23, 2019 /PRNewswire/ — QNB Corp. (the “Company” or “QNB”) (OTC Bulletin Board: QNBC), the parent company of QNB Bank, reported net income for the second quarter of 2019 of $3,143,000, or $0.90 per share on a diluted basis, compared to net income of $2,862,000, or $0.82 per share on a diluted basis, for the same period in 2018. For the six months ended June 30, 2019, QNB reported net income of $6,522,000, or $1.86 per share on a diluted basis. This compares to net income of $5,797,000, or $1.67 per share on a diluted basis, reported for the same period in 2018.

Total assets as of June 30, 2019 were $1,212,005,000 compared with $1,175,452,000 at December 31, 2018. Loans receivable at June 30, 2019 were $817,593,000 compared with $785,448,000 at December 31, 2018, an increase of $32,145,000, or 4.1%. Total deposits at June 30, 2019 were $1,030,661,000, increasing $15,063,000, compared with $1,015,598,000 at December 31, 2018.

“QNB is pleased to report increased earnings and earnings per share for the second quarter and first half of 2019,” said David W. Freeman, President and Chief Executive Officer. “During the second quarter, we continued to see strong loan, deposit, and household growth throughout the communities the Bank serves. Asset quality and net interest margin improved as well.”

Net Interest Income and Net Interest Margin

Net interest income for the quarter and six months ended June 30, 2019 totaled $9,111,000 and $17,947,000, respectively, an increase of $411,000 and $456,000, respectively, from the same periods in 2018. The net interest margin for the second quarter 2019 was 3.20% compared to 3.15% for the second quarter 2018. Net interest margin for the six months ended June 30, 2019 was 3.19%, an increase of five basis points for the quarter and one basis point for the six months ended June 30, 2019, respectively, compared to the same periods in 2018.

The yield on average earning assets improved 29 basis points to 4.10% for the second quarter 2019, compared with the second quarter 2018. For the six months ended June 30, 2019, the yield on average earning assets was 4.07%, compared with 3.82% for the same period in 2018, primarily due the proportionate increase in loans as a percent of earning assets, along with increased rates. The cost of interest-bearing liabilities increased 30 basis points to 1.11% for the quarter, and 31 basis points to 1.09% for the six months ended June 30, 2019, respectively, compared with the same periods in 2018.

Asset Quality, Provision for Loan Loss and Allowance for Loan Loss

QNB recorded a $150,000 provision for loan losses in the second quarter of 2019 compared with $187,000 in the second quarter 2018. QNB’s allowance for loan losses of $9,164,000 represents 1.12% of loans receivable at June 30, 2019 compared to $8,834,000, or 1.12% of loans receivable at December 31, 2018, and $8,192,000, or 1.05% of loans receivable at June 30, 2018. Net loan charge offs were $1,000 and $45,000 for the quarter and six months ended June 30, 2019, respectively, compared with $32,000 and $24,000 for the same periods in 2018, respectively. Annualized net loan charge-offs for the quarter and six months ended June 30, 2019 were 0.00% and 0.01% of average loans receivable, respectively.

Total non-performing loans, which represent loans on non-accrual status, loans past due 90 days or more and still accruing interest and restructured loans, were $9,677,000, or 1.18% of loans receivable at June 30, 2019, compared with $9,638,000, or 1.23% of loans receivable at December 31, 2018, and $7,987,000, or 1.02% of loans receivable at June 30, 2018. In cases where there is a collateral shortfall on impaired loans, specific impairment reserves have been established based on updated collateral values even if the borrower continues to pay in accordance with the terms of the agreement. At June 30, 2019, $2,172,000, or approximately 28% of the loans classified as non-accrual are current or past due less than 30 days. Commercial loans classified as substandard or doubtful loans totaled $12,572,000 at June 30, 2019, a decrease of $5,767,000, or 31.4%, from the $18,339,000 reported at December 31, 2018, and a decrease of $5,627,000, or 30.9%, from the $18,199,000 reported at June 30, 2018. The decrease is largely due to improved financial performance of two large commercial relationships resulting in upgrades to pass ratings, as well a payoff of a classified loan due to the sale of the collateral by the borrower.

Non-Interest Income

Total non-interest income was $1,654,000 for the second quarter of 2019, an increase of $200,000, or 13.8%, compared with the same period in 2018. Increases in non-interest income comprise; net gain on the sale of investment securities, other income, ATM and debit card, brokerage and advisory, and fees for services to customers, which increased $536,000, $45,000, $32,000, $28,000, and $14,000 respectively, in second quarter 2019 compared with the same period in 2018. Other income increased $45,000 to $373,000, due to increased merchant fee income and the recording of a $58,000 deferred gain on sale of a bank-financed OREO property. These increases were offset in part due to a reduction in miscellaneous income from $60,000 to $28,000. The Company recorded a $53,000 sales tax refund during second quarter 2018.

Unrealized loss on equity securities decreased $446,000 when comparing the second quarter 2019 to the same period in 2018, due to the decrease in fair value of the equities portfolio. Net gains on sale of loans decreased $9,000, due to reduced mortgage loan activity during the second quarter 2019, compared to the same period in 2018.

For the six months ended June 30, 2019, non-interest income was $3,963,000, an increase of $1,442,000, or 57.2%, compared to the same period in 2018, primarily due to net realized gains on the sale of investment securities of $457,000 and improved fair value of equity securities of $776,000, when comparing the two periods.

Non-Interest Expense

Total non-interest expense was $6,793,000 for the second quarter of 2019, increasing $260,000, or 4.0% from $6,533,000 for the same period in 2018. Salaries and benefits expense increased $163,000, or 4.5%, to $3,790,000 when comparing the two quarters. Salary expense and related payroll taxes increased $288,000, or 9.6%, to $3,277,000 during the second quarter 2019 compared to the same period in 2018 due to increased employees and salaries. Retirement plan expenses increased $27,000, or 14.1%, for the same reasons. Medical premiums decreased $152,000, or 29.5%, due to reduced medical claims when comparing the two periods. Net occupancy and furniture and equipment expense increased $86,000, or 8.5%, to $1,097,000 for the second quarter 2019, due primarily to increased rent, building repairs and maintenance, depreciation of furniture and equipment and software maintenance expense of $19,000, $42,000, $36,000, and $25,000, respectively, offset in part by decreased software amortization, and equipment maintenance expense of $7,000 and $23,000, respectively, when comparing the two periods. Other non-interest expense increased $11,000, or 0.6%, when comparing second quarter 2019 with second quarter 2018.

For the six months ended June 30, 2019, non-interest expense was $13,517,000, an increase of $806,000, or 6.3%, compared to the same period in 2018.

Provision for income taxes increased 18.7%, to $679,000 in the second quarter 2019 due to increased pre-tax income and a higher effective tax rate, compared with the same period in 2018. The effective tax rates for the quarter and six months ended June 30, 2019 were 17.8% and 18.7%, respectively, compared with 16.7% and 16.3%, respectively, for the same periods in 2018. The increase in effective tax rates is due to the increased proportional share of taxable versus non-taxable income during the quarter and six months ended June 30, 2019, compared with the same period in 2018.

About the Company

QNB Corp. is the holding company for QNB Bank, which is headquartered in Quakertown, Pennsylvania. QNB Bank currently operates eleven branches in Bucks, Montgomery and Lehigh Counties and offers commercial and retail banking services in the communities it serves. More information about QNB Corp. and QNB Bank is available at www.qnbbank.com.

Forward Looking Statement

This press release may contain forward-looking statements as defined in the Private Securities Litigation Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that increased demand or prices for the Company’s financial services and products may not occur, changing economic and competitive conditions, technological developments, and other risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission, including “Item lA. Risk Factors,” set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

QNB Corp.

Consolidated Selected Financial Data (unaudited)

(Dollars in thousands)

Balance Sheet (Period End)

6/30/19

3/31/19

12/31/18

9/30/18

6/30/18

Assets

$

1,212,005

$

1,203,126

$

1,175,452

$

1,184,389

$

1,172,874

Cash and cash equivalents

14,068

13,708

13,458

13,982

11,726

Investment securities

Debt securities, AFS

347,728

344,367

344,221

347,392

344,194

Equity securities

6,898

10,482

9,421

10,436

9,600

Loans held-for-sale

154

404

Loans receivable

817,593

804,528

785,448

785,962

779,886

Allowance for loan losses

(9,164)

(9,015)

(8,834)

(8,645)

(8,192)

Net loans

808,429

795,513

776,614

777,317

771,694

Deposits

1,030,661

1,034,614

1,015,598

1,024,565

985,726

Demand, non-interest bearing

149,591

139,970

128,615

128,089

135,482

Interest-bearing demand, money market and savings

646,759

671,925

663,195

672,467

627,525

Time

234,311

222,719

223,788

224,009

222,719

Short-term borrowings

59,048

49,897

50,872

55,923

85,646

Shareholders’ equity

115,878

110,360

104,348

98,834

97,818

Asset Quality Data (Period End)

Non-accrual loans

$

7,668

$

7,706

$

7,478

$

9,631

$

6,731

Loans past due 90 days or more and still accruing

23

Restructured loans

2,009

2,047

2,160

1,259

1,233

Non-performing loans

9,677

9,753

9,638

10,890

7,987

Other real estate owned and repossessed assets

Non-performing assets

$

9,677

$

9,753

$

9,638

$

10,890

$

7,987

Allowance for loan losses

$

9,164

$

9,015

$

8,834

$

8,645

$

8,192

Non-performing loans / Loans excluding held-for-sale

1.18

%

1.21

%

1.23

%

1.39

%

1.02

%

Non-performing assets / Assets

0.80

%

0.81

%

0.82

%

0.92

%

0.68

%

Allowance for loan losses / Loans excluding held-for-sale

1.12

%

1.12

%

1.12

%

1.10

%

1.05

%

QNB Corp.

Consolidated Selected Financial Data (unaudited)

(Dollars in thousands, except per share data)

Three months ended,

Six months ended,

For the period:

6/30/19

3/31/19

12/31/18

9/30/18

6/30/18

6/30/19

6/30/18

Interest income

$

11,712

$

11,289

$

11,203

$

10,926

$

10,562

$

23,001

$

21,071

Interest expense

2,601

2,453

2,383

2,222

1,862

5,054

3,580

Net interest income

9,111

8,836

8,820

8,704

8,700

17,947

17,491

Provision for loan losses

150

225

187

568

187

375

375

Net interest income after provision

for loan losses

8,961

8,611

8,633

8,136

8,513

17,572

17,116

Non-interest income:

Fees for services to customers

422

393

451

419

408

815

829

ATM and debit card

519

470

502

476

487

989

917

Retail brokerage and advisory income

133

141

66

96

105

274

208

Net realized gain (loss) on investment securities

584

6

(390)

181

48

590

133

Unrealized gain (loss) on equity securities

(405)

976

(862)

731

41

571

(205)

Net gain on sale of loans

28

21

23

38

37

49

44

Other

373

302

354

286

328

675

595

Total non-interest income

1,654

2,309

144

2,227

1,454

3,963

2,521

Non-interest expense:

Salaries and employee benefits

3,790

3,781

3,827

3,612

3,627

7,571

6,972

Net occupancy and furniture and

equipment

1,097

1,062

1,068

1,000

1,011

2,159

1,969

Other

1,906

1,881

1,894

1,773

1,895

3,787

3,770

Total non-interest expense

6,793

6,724

6,789

6,385

6,533

13,517

12,711

Income before income taxes

3,822

4,196

1,988

3,978

3,434

8,018

6,926

Provision for income taxes

679

817

(339)

767

572

1,496

1,129

Net income

$

3,143

$

3,379

$

2,327

$

3,211

$

2,862

$

6,522

$

5,797

Share and Per Share Data:

Net income – basic

$

0.90

$

0.97

$

0.67

$

0.93

$

0.83

$

1.87

$

1.68

Net income – diluted

$

0.90

$

0.97

$

0.67

$

0.92

$

0.82

$

1.86

$

1.67

Book value

$

33.09

$

31.59

$

29.95

$

28.47

$

28.23

$

33.09

$

28.23

Cash dividends

$

0.33

$

0.33

$

0.32

$

0.32

$

0.32

$

0.66

$

0.64

Average common shares outstanding

– basic

3,494,620

3,486,786

3,473,965

3,466,672

3,460,360

3,490,724

3,456,467

Average common shares outstanding

– diluted

3,502,111

3,494,429

3,492,060

3,489,061

3,481,312

3,498,057

3,476,874

(Dollars in thousands, except per share data)

Three months ended,

Six months ended,

For the period:

6/30/19

3/31/19

12/31/18

9/30/18

6/30/18

6/30/19

6/30/18

Selected Ratios:

Return on average assets

1.05

%

1.15

%

0.78

%

1.07

%

0.98

%

1.10

%

1.00

%

Return on average shareholders’ equity

10.91

%

12.09

%

8.29

%

11.64

%

10.70

%

11.49

%

11.02

%

Net interest margin (tax equivalent)

3.20

%

3.18

%

3.11

%

3.06

%

3.15

%

3.19

%

3.18

%

Efficiency ratio (tax equivalent)

61.97

%

59.28

%

74.03

%

57.31

%

63.08

%

60.61

%

62.27

%

Average shareholders’ equity to total

average assets

9.61

%

9.54

%

9.38

%

9.20

%

9.20

%

9.58

%

9.10

%

Net loan charge-offs (recoveries)

$

1

$

44

$

(2)

$

115

$

32

$

45

$

24

Net loan charge-offs (recoveries) –

annualized / Average loans excluding

held-for-sale

0.00

%

0.02

%

0.00

%

0.06

%

0.02

%

0.01

%

0.01

%

Balance Sheet (Average)

Assets

$

1,202,406

$

1,187,374

$

1,186,456

$

1,190,132

$

1,166,383

$

1,194,932

$

1,165,356

Investment securities (Trading, AFS & HTM, Equities)

357,836

360,640

366,469

368,807

372,850

359,231

378,055

Loans receivable

805,538

789,737

784,372

780,221

757,451

797,681

750,828

Deposits

1,021,925

1,008,060

1,018,141

1,023,227

987,000

1,015,031

985,333

Shareholders’ equity

115,551

113,304

111,312

109,433

107,301

114,434

106,073

SOURCE QNB Corp.

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Conference Call and Webcast Information

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About Discover

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A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the financial supplement filed as Exhibit 99.2 to the company’s Current Report on Form 8-K filed today with the Securities and Exchange Commission (“SEC”). Both the earnings release and the financial supplement are available online at the SEC’s website (http://www.sec.gov) and the company’s website (https://investorrelations.discover.com).

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which speak to our expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment, the levels of consumer confidence and consumer debt, and investor sentiment; the impact of current, pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to tax reform, financial regulatory reform, consumer financial services practices, anti-corruption, and funding, capital and liquidity; the actions and initiatives of current and potential competitors; the company’s ability to manage its expenses; the company’s ability to successfully achieve card acceptance across its networks and maintain relationships with network participants; the company’s ability to sustain and grow its non-card products; difficulty obtaining regulatory approval for, financing, closing, transitioning, integrating or managing the expenses of acquisitions of or investments in new businesses, products or technologies; the company’s ability to manage its credit risk, market risk, liquidity risk, operational risk, compliance and legal risk, and strategic risk; the availability and cost of funding and capital; access to deposit, securitization, equity, debt and credit markets; the impact of rating agency actions; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; losses in the company’s investment portfolio; limits on the company’s ability to pay dividends and repurchase its common stock; limits on the company’s ability to receive payments from its subsidiaries; fraudulent activities or material security breaches of key systems; the company’s ability to remain organizationally effective; the company’s ability to increase or sustain Discover card usage or attract new customers; the company’s ability to maintain relationships with merchants; the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events; the company’s ability to introduce new products or services; the company’s ability to manage its relationships with third-party vendors; the company’s ability to maintain current technology and integrate new and acquired systems; the company’s ability to collect amounts for disputed transactions from merchants and merchant acquirers; the company’s ability to attract and retain employees; the company’s ability to protect its reputation and its intellectual property; and new lawsuits, investigations or similar matters or unanticipated developments related to current matters. The company routinely evaluates and may pursue acquisitions of or investments in businesses, products, technologies, loan portfolios or deposits, which may involve payment in cash or the company’s debt or equity securities.

Additional factors that could cause the company’s results to differ materially from those described in the forward-looking statements can be found under “Risk Factors,” “Business – Competition,” “Business – Supervision and Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended December 31, 2018, and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which are filed with the SEC and available at the SEC’s internet site (http://www.sec.gov).

DISCOVER FINANCIAL SERVICES
(unaudited, in millions, except per share statistics)
Quarter Ended
June 30, 2019 March 31, 2019 June 30, 2018
EARNINGS SUMMARY
Interest Income

$2,977

$2,937

$2,636

Interest Expense

645

632

507

Net Interest Income

2,332

2,305

2,129

Discount/Interchange Revenue

759

677

724

Rewards Cost

460

446

461

Discount and Interchange Revenue, net

299

231

263

Protection Products Revenue

49

49

50

Loan Fee Income

102

104

95

Transaction Processing Revenue

48

46

42

Other Income

22

28

24

Total Other Income

520

458

474

Revenue Net of Interest Expense

2,852

2,763

2,603

Provision for Loan Losses

787

809

742

Employee Compensation and Benefits

427

425

400

Marketing and Business Development

224

195

224

Information Processing & Communications

101

99

86

Professional Fees

183

167

161

Premises and Equipment

26

28

24

Other Expense

117

110

89

Total Other Expense

1,078

1,024

984

Income Before Income Taxes

987

930

877

Tax Expense

234

204

208

Net Income

$753

$726

$669

Net Income Allocated to Common Stockholders

$747

$705

$663

PER SHARE STATISTICS
Basic EPS

$2.32

$2.15

$1.91

Diluted EPS

$2.32

$2.15

$1.91

Common Stock Price (period end)

$77.59

$71.16

$70.41

Book Value per share

$35.97

$34.60

$31.66

SEGMENT- INCOME BEFORE INCOME TAXES
Direct Banking

$941

$879

$837

Payment Services

46

51

40

Total

$987

$930

$877

BALANCE SHEET SUMMARY
Total Assets

$110,707

$110,720

$102,751

Total Liabilities

99,214

99,461

91,862

Total Equity

11,493

11,259

10,889

Total Liabilities and Stockholders’ Equity

$110,707

$110,720

$102,751

TOTAL LOAN RECEIVABLES
Ending Loans 1, 2

$90,229

$88,743

$84,789

Average Loans 1, 2

$89,358

$89,353

$83,648

Interest Yield

12.82%

12.79%

12.28%

Gross Principal Charge-off Rate

4.03%

4.02%

3.78%

Gross Principal Charge-off Rate excluding PCI Loans 3

4.10%

4.10%

3.87%

Net Principal Charge-off Rate

3.22%

3.25%

3.11%

Net Principal Charge-off Rate excluding PCI Loans 3

3.27%

3.31%

3.18%

Delinquency Rate (30 or more days) excluding PCI Loans 3

2.18%

2.28%

2.08%

Delinquency Rate (90 or more days) excluding PCI Loans 3

1.04%

1.10%

0.99%

Gross Principal Charge-off Dollars

$898

$887

$789

Net Principal Charge-off Dollars

$718

$715

$649

Net Interest and Fee Charge-off Dollars

$158

$158

$138

Loans Delinquent 30 or more days 3

$1,939

$1,988

$1,725

Loans Delinquent 90 or more days 3

$922

$959

$821

Allowance for Loan Loss (period end)

$3,202

$3,134

$2,828

Reserve Change Build/(Release) 4

$69

$94

$93

Reserve Rate

3.55%

3.53%

3.34%

Reserve Rate excluding PCI Loans 3

3.58%

3.57%

3.38%

CREDIT CARD LOANS
Ending Loans

$72,393

$70,789

$67,812

Average Loans

$71,492

$71,363

$66,594

Interest Yield

13.44%

13.42%

12.88%

Gross Principal Charge-off Rate

4.43%

4.40%

4.12%

Net Principal Charge-off Rate

3.49%

3.50%

3.34%

Delinquency Rate (30 or more days)

2.34%

2.45%

2.16%

Delinquency Rate (90 or more days)

1.18%

1.26%

1.09%

Gross Principal Charge-off Dollars

$789

$774

$684

Net Principal Charge-off Dollars

$623

$616

$555

Loans Delinquent 30 or more days

$1,692

$1,731

$1,466

Loans Delinquent 90 or more days

$857

$891

$743

Allowance for Loan Loss (period end)

$2,691

$2,622

$2,334

Reserve Change Build/(Release)

$69

$94

$82

Reserve Rate

3.72%

3.70%

3.44%

Total Discover Card Volume

$39,935

$36,386

$38,430

Discover Card Sales Volume

$36,664

$32,899

$35,077

Rewards Rate

1.25%

1.35%

1.31%

NETWORK VOLUME
PULSE Network

$47,389

$47,106

$44,308

Network Partners

5,950

5,663

4,602

Diners Club International 5

8,472

8,278

8,417

Total Payment Services

61,811

61,047

57,327

Discover Network – Proprietary

37,891

34,051

36,339

Total

$99,702

$95,098

$93,666

1 Total Loans includes Home Equity and other loans.
2 Purchased Credit Impaired (“PCI”) loans are loans that were acquired in which a deterioration in credit quality occurred between the origination date and the acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the loans are contractually past due. PCI loans are private student loans and are included in total loan receivables.
3 Excludes PCI loans (described above) which are accounted for on a pooled basis. Since a pool is accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, is not meaningful. Because the Company is recognizing interest income on a pool of loans, it is all considered to be performing.
4 Allowance for loan loss includes the net change in reserves on PCI pools having no remaining non-accretable difference which does not impact the reserve change build/(release) in provision for loan losses.
5 Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment.
Note: See Glossary for definitions of financial terms in the financial supplement which is available online at the SEC’s website (http://www.sec.gov) and the Company’s website (http://investorrelations.discoverfinancial.com).

View source version on businesswire.com: https://www.businesswire.com/news/home/20190723005945/en/

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Glacier Bancorp, Inc. Announces Results for the Quarter Ended June 30, 2019

Total debt securities of $2.723 billion at June 30, 2019 decreased $55.2 million, or 2 percent, during the current quarter and decreased $75.0 million, …

Credit Quality Trends and Provision for Loan Losses

(Dollars in thousands) Provision

for Loan

Losses
Net

Charge-Offs
ALLL

as a Percent

of Loans
Accruing

Loans 30-89

Days Past Due

as a Percent of

Loans
Non-Performing

Assets to

Total Subsidiary

Assets
Second quarter 2019 $ $ 732 1.46 % 0.43 % 0.41 %
First quarter 2019 57 1,510 1.56 % 0.44 % 0.42 %
Fourth quarter 2018 1,246 2,542 1.58 % 0.41 % 0.47 %
Third quarter 2018 3,194 2,223 1.63 % 0.31 % 0.61 %
Second quarter 2018 4,718 762 1.66 % 0.50 % 0.71 %
First quarter 2018 795 2,755 1.66 % 0.59 % 0.64 %
Fourth quarter 2017 2,886 2,894 1.97 % 0.57 % 0.68 %
Third quarter 2017 3,327 3,628 1.99 % 0.45 % 0.67 %

Net charge-offs for the current quarter were $732 thousand compared to $1.5 million for the prior quarter and $762 thousand from the same quarter last year. There was no current quarter provision for loan losses compared to $57 thousand in the prior quarter and $4.7 million in the prior year second quarter. Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of the loan loss provision.

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) Jun 30,

2019
Mar 31,

2019
Dec 31,

2018
Jun 30,

2018
Mar 31,

2019
Dec 31,

2018
Jun 30,

2018
Deposits
Non-interest bearing deposits $ 3,265,077 3,051,119 3,001,178 2,914,885 213,958 263,899 350,192
NOW and DDA accounts 2,487,806 2,383,806 2,391,307 2,354,214 104,000 96,499 133,592
Savings accounts 1,412,046 1,373,544 1,346,790 1,330,637 38,502 65,256 81,409
Money market deposit accounts 1,647,372 1,689,962 1,684,284 1,723,681 (42,590 ) (36,912 ) (76,309 )
Certificate accounts 897,625 896,731 901,484 927,608 894 (3,859 ) (29,983 )
Core deposits, total 9,709,926 9,395,162 9,325,043 9,251,025 314,764 384,883 458,901
Wholesale deposits 144,949 192,953 168,724 172,550 (48,004 ) (23,775 ) (27,601 )
Deposits, total 9,854,875 9,588,115 9,493,767 9,423,575 266,760 361,108 431,300
Repurchase agreements 494,651 489,620 396,151 361,515 5,031 98,500 133,136
Federal Home Loan Bank advances 319,996 154,683 440,175 395,037 165,313 (120,179 ) (75,041 )
Other borrowed funds 14,765 14,738 14,708 9,917 27 57 4,848
Subordinated debentures 139,912 134,048 134,051 134,058 5,864 5,861 5,854
Other liabilities 164,786 141,725 120,778 99,550 23,061 44,008 65,236
Total liabilities $ 10,988,985 10,522,929 10,599,630 10,423,652 466,056 389,355 565,333

Excluding the acquisition, core deposits of $9.710 billion as of June 30, 2019 increased $110 million, or 2 percent annualized, from the prior quarter and increased $184 million, or 2 percent, from the prior year second quarter. Non-interest bearing deposits organically increased $120 million, or 16 percent annualized, over the prior quarter and increased $257 million, or 9 percent, over the prior year second quarter.

Federal Home Loan Bank (“FHLB”) advances of $320 million at June 30, 2019, increased $165 million over the prior quarter and decreased $75.0 million over the prior year second quarter. FHLB advances and wholesale deposits will continue to fluctuate to supplement liquidity needs during the year.

Stockholders’ Equity Summary

$ Change from
(Dollars in thousands, except per share data) Jun 30,

2019
Mar 31,

2019
Dec 31,

2018
Jun 30,

2018
Mar 31,

2019
Dec 31,

2018
Jun 30,

2018
Common equity $ 1,643,928 1,526,963 1,525,281 1,494,274 116,965 118,647 149,654
Accumulated other comprehensive income (loss) 43,448 23,887 (9,427 ) (20,282 ) 19,561 52,875 63,730
Total stockholders’ equity 1,687,376 1,550,850 1,515,854 1,473,992 136,526 171,522 213,384
Goodwill and core deposit intangible, net (385,533 ) (337,134 ) (338,828 ) (342,243 ) (48,399 ) (46,705 ) (43,290 )
Tangible stockholders’ equity $ 1,301,843 1,213,716 1,177,026 1,131,749 88,127 124,817 170,094

Stockholders’ equity to total assets 13.31 % 12.84 % 12.51 % 12.39 %
Tangible stockholders’ equity to total tangible assets 10.59 % 10.34 % 9.99 % 9.79 %
Book value per common share $ 19.48 18.33 17.93 17.44 1.15 1.55 2.04
Tangible book value per common share $ 15.03 14.35 13.93 13.39 0.68 1.10 1.64

Tangible stockholders’ equity of $1.302 billion at June 30, 2019 increased $88.1 million compared to the prior quarter which was the result of $87.1 million of Company stock issued for the acquisition of FNB, earnings retention and an increase in other comprehensive income; such increases more than offset the increase in goodwill and core deposits associated with the acquisition. Tangible stockholders’ equity increased $170 million over the prior year second quarter which was the result of earnings retention, an increase in other comprehensive income, and the impact from the FNB acquisition which was offset by a decrease of $25.5 million from the cumulative-effect adjustments related to the adoption of new accounting standards. Tangible book value per common share of $15.03 at current quarter end increased $0.68 per share from the prior quarter and increased $1.64 per share from a year ago.

Cash Dividends

On June 25, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.27 per share. The dividend was payable July 18, 2019 to shareholders of record on July 9, 2019. The dividend was the 137th consecutive quarterly 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 June 30, 2019

Compared to March 31, 2019, and June 30, 2018

Income Summary

Three Months ended $ Change from
(Dollars in thousands) Jun 30,

2019
Mar 31,

2019
Jun 30,

2018
Mar 31,

2019
Jun 30,

2018
Net interest income
Interest income $ 132,385 126,116 117,715 6,269 14,670
Interest expense 12,089 10,904 9,161 1,185 2,928
Total net interest income 120,296 115,212 108,554 5,084 11,742
Non-interest income
Service charges and other fees 20,025 18,015 18,804 2,010 1,221
Miscellaneous loan fees and charges 1,192 967 2,243 225 (1,051 )
Gain on sale of loans 7,762 5,798 8,142 1,964 (380 )
Gain (loss) on sale of investments 134 213 (56 ) (79 ) 190
Other income 1,721 3,481 2,695 (1,760 ) (974 )
Total non-interest income 30,834 28,474 31,828 2,360 (994 )
Total income $ 151,130 143,686 140,382 7,444 10,748
Net interest margin (tax-equivalent) 4.33 % 4.34 % 4.17 %

Net Interest Income

The current quarter net interest income of $120 million increased $5.1 million, or 4 percent, over the prior quarter and increased $11.7 million, or 11 percent, from the prior year second quarter. The increase in net interest income over the prior quarter and prior year second quarter was primarily driven by an increase in interest income on commercial loans. Interest income on commercial loans increased $4.5 million, or 5 percent, from the prior quarter and increased $12.2 million, or 16 percent, from the prior year second quarter.

The current quarter interest expense of $12.1 million increased $1.2 million, or 11 percent, over the prior quarter which was driven by the increase in FHLB advances which supplemented the liquidity needs during the current quarter. The current quarter interest expense increased $3.0 million, or 32 percent, from the prior year second quarter and was primarily due to the increased amount of deposits and borrowings. The total cost of funding (including non-interest bearing deposits) for the current quarter was 45 basis points compared to 43 basis points for the prior quarter and 36 basis points for the prior year second quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 4.33 percent compared to 4.34 percent in the prior quarter. The yield on loans increased 2 basis points and was offset by the 2 basis points increase in funding cost related to the increased short-term borrowings while the cost of core deposits remained unchanged. The current quarter net interest margin included 5 basis points of discount accretion on acquired loans compared to 6 basis points in the prior quarter. The current quarter also included 1 basis point from the recovery of interest on loans previously placed on non-accrual compared to 2 basis points in the prior quarter. Excluding the 5 basis points from discount accretion and 1 basis point from non-accrual interest, the core net interest margin was 4.27 percent compared to 4.26 in the prior quarter and 4.11 percent in the prior year ago second quarter. The current quarter net interest margin increased 16 basis points over the prior year second quarter net interest margin of 4.17 percent. The increase in the margin from the prior year second quarter resulted from the remix of earning assets to higher yielding loans and the increased yields on the loan portfolio which more than offset the increase in funding costs. “The stable net interest margin reflects discipline in loan pricing by each of the Bank divisions,” said Ron Copher, Chief Financial Officer. “In addition, the Bank divisions continue to focus on growing a low-cost core deposit base, especially non-interest bearing deposits.”

Non-interest Income

Non-interest income for the current quarter totaled $30.8 million which was an increase of $2.4 million, or 8 percent, over the prior quarter and a decrease of $994 thousand, or 3 percent, over the same quarter last year. Service charges and other fees of $20.0 million for the current quarter increased $2.0 million, or 11 percent, from the prior quarter due primarily to seasonality. Service charges and other fees for the current quarter increased $1.2 million, or 6 percent, from the prior year second quarter which was due to the increased number of accounts driven by organic growth. Gain on the sale of loans of $7.8 million, increased $2.0 million, or 34 percent, compared to the prior quarter as a result of seasonality.

Non-interest Expense Summary

Three Months ended $ Change from
(Dollars in thousands) Jun 30,

2019
Mar 31,

2019
Jun 30,

2018
Mar 31,

2019
Jun 30,

2018
Compensation and employee benefits $ 51,973 52,728 49,023 (755 ) 2,950
Occupancy and equipment 8,180 8,437 7,662 (257 ) 518
Advertising and promotions 2,767 2,388 2,530 379 237
Data processing 4,062 3,892 4,241 170 (179 )
Other real estate owned 191 139 211 52 (20 )
Regulatory assessments and insurance 1,848 1,285 1,329 563 519
Core deposit intangibles amortization 1,865 1,694 1,748 171 117
Other expenses 15,284 12,267 15,051 3,017 233
Total non-interest expense $ 86,170 82,830 81,795 3,340 4,375

Total non-interest expense of $86.2 million for the current quarter increased $3.3 million, or 4 percent, over the prior quarter and increased $4.4 million, or 5 percent, over the prior year second quarter. Compensation and employee benefits increased by $2.9 million, or 6 percent, from the prior year second quarter due to the acquisition and an increased number of employees driven by organic growth. Occupancy and equipment expense increased $518 thousand or 7 percent, over the prior year second quarter as a result of the current year acquisition and general cost increases. Other expenses of $15.3 million, increased $3.0 million, or 25 percent, from the prior quarter and was primarily attributable to acquisition-related expenses. Acquisition-related expenses were $1.8 million during the current quarter compared to $214 thousand in the prior quarter and $2.9 million in the prior year second quarter.

Federal and State Income Tax Expense

Tax expense during the second quarter of 2019 was $12.6 million, an increase of $901 thousand, or 8 percent, compared to the prior quarter and an increase of $3.1 million, or 33 percent, from the prior year second quarter. The effective tax rate in the current and prior quarter was 19 percent which compares to 19 percent in the prior quarter and 18 percent in the prior year second quarter.

Efficiency Ratio

The current quarter efficiency ratio was 54.50 percent, an 87 basis points improvement from the prior quarter efficiency ratio of 55.37 percent and was driven by controlling operating costs combined with the increase in net interest income. The current quarter efficiency ratio improved 94 basis points from the prior year second quarter efficiency ratio of 55.44 percent and was driven by the increase in net interest income that more than offset the increased operating costs as a result of the Company’s growth.

Operating Results for Six Months Ended June 30, 2019

Compared to June 30, 2018

Income Summary

Six Months ended
(Dollars in thousands) Jun 30,

2019
Jun 30,

2018
$ Change % Change
Net interest income
Interest income $ 258,501 $ 220,781 $ 37,720 17 %
Interest expense 22,993 16,935 6,058 36 %
Total net interest income 235,508 203,846 31,662 16 %
Non-interest income
Service charges and other fees 38,040 35,675 2,365 7 %
Miscellaneous loan fees and charges 2,159 3,720 (1,561 ) (42 )%
Gain on sale of loans 13,560 14,239 (679 ) (5 )%
Loss on sale of investments 347 (389 ) 736 (189 )%
Other income 5,202 4,669 533 11 %
Total non-interest income 59,308 57,914 1,394 2 %
$ 294,816 $ 261,760 $ 33,056 13 %
Net interest margin (tax-equivalent) 4.33 % 4.14 %

Net Interest Income

Net interest income for the first six months of 2019 increased $31.7 million, or 16 percent, from the first six months of 2018 and was primarily attributable to a $30.2 million increase in interest income from commercial loans. Interest expense of $23.0 million for the first half of 2019 increased $6.1 million, or 36 percent over the prior year same period as a result of increased deposits and borrowings combined with interest rate increases. The total funding cost (including non-interest bearing deposits) for 2019 was 44 basis points compared to 36 basis points for 2018.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first six months of 2019 was 4.33 percent, a 19 basis points increase from the net interest margin of 4.14 percent for the first half of 2018. The increase in the margin was principally due to a shift in earning assets to higher yielding loans along with an increase in yields on the loan portfolio combined with relatively stable cost of funds.

Non-interest Income

Non-interest income of $59.3 million for the first six months of 2019 increased $1.4 million, or 2 percent, over the same period last year. Service charges and other fees of $38.0 million for 2019 increased $2.4 million, or 7 percent, from the prior year as a result of an increased number of deposit accounts from organic growth and acquisitions.

Non-interest Expense Summary

Six Months ended
(Dollars in thousands) Jun 30,

2019
Jun 30,

2018
$ Change % Change
Compensation and employee benefits $ 104,701 $ 94,744 $ 9,957 11 %
Occupancy and equipment 16,617 14,936 1,681 11 %
Advertising and promotions 5,155 4,700 455 10 %
Data processing 7,954 8,208 (254 ) (3 )%
Other real estate owned 330 283 47 17 %
Regulatory assessments and insurance 3,133 2,535 598 24 %
Core deposit intangibles amortization 3,559 2,804 755 27 %
Other expenses 27,551 27,212 339 1 %
Total non-interest expense $ 169,000 $ 155,422 $ 13,578 9 %

Total non-interest expense of $169 million for the first half of 2019 increased $13.6 million, or 9 percent, over the prior year first half. Compensation and employee benefits for the first six months of 2019 increased $10.0 million, or 11 percent, from the same period last year due to the increased number of employees from acquisitions and organic growth combined with annual salary increases. Occupancy and equipment expense for the first half of 2019 increased $1.7 million, or 11 percent from the prior year as a result of increased cost from acquisitions and general cost increases.

Provision for Loan Losses

The provision for loan losses was $57 thousand for the first half of 2019, a decrease of $4.7 million from the same period in the prior year. Net charge-offs during the first half of 2019 were $2.2 million compared to $3.5 million during the same period in 2018.

Federal and State Income Tax Expense

Tax expense of $24.2 million in the first half of 2019 increased $6.4 million, or 36 percent, over the prior year same period. The effective tax rate year-to-date in 2019 was 19 percent compared to 18 percent in the prior year same period.

Efficiency Ratio

The efficiency ratio of 54.93 percent for the first six months of 2019 improved 161 basis points from the prior year first six months efficiency ratio of 56.54 percent and was driven by the increase in net interest income that more than offset the increased operating costs.

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, including 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 Information

A conference call for investors is scheduled for 11:00 a.m. Eastern Time on Friday, July 19, 2019. The conference call will be accessible by telephone and through the internet. Interested individuals are invited to listen to the call by dialing 877-561-2748 and conference ID 7382835. To participate on the webcast, log on to: https://edge.media-server.com/m6/p/g6hp4cea. 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 7382835 by August 2, 2019.

About Glacier Bancorp, Inc.

Glacier Bancorp, Inc. is the parent company for Glacier Bank, Kalispell, and its bank divisions: First Security Bank of Missoula; Valley Bank of Helena; Western Security Bank, Billings; First Bank of Montana, Lewistown; and First Security Bank, Bozeman, all operating in Montana; as well as Mountain West Bank, Coeur d’Alene, operating in Idaho, Utah and Washington; First Bank, Powell, operating in Wyoming and Utah; Citizens Community Bank, Pocatello, operating in Idaho; Bank of the San Juans, Durango, and Collegiate Peaks Bank, Buena Vista, both operating in Colorado; First State Bank, Wheatland, operating in Wyoming; North Cascades Bank, Chelan, operating in Washington; The Foothills Bank, Yuma, operating in Arizona; and First Community Bank Utah, Layton, operating in Utah.

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data) June 30,

2019
March 31,

2019
December 31,

2018
June 30,

2018
Assets
Cash on hand and in banks $ 181,526 139,333 161,782 174,239
Federal funds sold 115
Interest bearing cash deposits 49,683 63,079 42,008 193,893
Cash and cash equivalents 231,209 202,527 203,790 368,132
Debt securities, available-for-sale 2,470,634 2,522,322 2,571,663 2,177,352
Debt securities, held-to-maturity 252,097 255,572 297,915 620,409
Total debt securities 2,722,731 2,777,894 2,869,578 2,797,761
Loans held for sale, at fair value 54,711 29,389 33,156 53,788
Loans receivable 8,841,777 8,326,070 8,287,549 7,948,672
Allowance for loan and lease losses (129,054 ) (129,786 ) (131,239 ) (131,564 )
Loans receivable, net 8,712,723 8,196,284 8,156,310 7,817,108
Premises and equipment, net 296,915 277,619 241,528 240,373
Other real estate owned 7,281 8,125 7,480 13,616
Accrued interest receivable 58,567 57,367 54,408 55,973
Deferred tax asset 3,371 12,554 23,564 34,211
Core deposit intangible, net 54,646 47,548 49,242 52,708
Goodwill 330,887 289,586 289,586 289,535
Non-marketable equity securities 23,031 16,435 27,871 26,107
Bank-owned life insurance 93,543 82,819 82,320 81,379
Other assets 86,746 75,632 76,651 66,953
Total assets $ 12,676,361 12,073,779 12,115,484 11,897,644
Liabilities
Non-interest bearing deposits $ 3,265,077 3,051,119 3,001,178 2,914,885
Interest bearing deposits 6,589,798 6,536,996 6,492,589 6,508,690
Securities sold under agreements to repurchase 494,651 489,620 396,151 361,515
FHLB advances 319,996 154,683 440,175 395,037
Other borrowed funds 14,765 14,738 14,708 9,917
Subordinated debentures 139,912 134,048 134,051 134,058
Accrued interest payable 5,091 4,709 4,252 3,952
Other liabilities 159,695 137,016 116,526 95,598
Total liabilities 10,988,985 10,522,929 10,599,630 10,423,652
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 866 846 845 845
Paid-in capital 1,139,289 1,051,299 1,051,253 1,049,724
Retained earnings – substantially restricted 503,773 474,818 473,183 443,705
Accumulated other comprehensive income (loss) 43,448 23,887 (9,427 ) (20,282 )
Total stockholders’ equity 1,687,376 1,550,850 1,515,854 1,473,992
Total liabilities and stockholders’ equity $ 12,676,361 12,073,779 12,115,484 11,897,644

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Operations

Three Months ended Six Months ended
(Dollars in thousands, except per share data) June 30,

2019
March 31,

2019
June 30,

2018
June 30,

2019
June 30,

2018
Interest Income
Debt securities $ 21,892 21,351 22,370 43,243 42,512
Residential real estate loans 11,410 10,779 10,149 22,189 18,934
Commercial loans 88,043 83,539 75,824 171,582 141,339
Consumer and other loans 11,040 10,447 9,372 21,487 17,996
Total interest income 132,385 126,116 117,715 258,501 220,781
Interest Expense
Deposits 5,624 5,341 4,617 10,965 8,533
Securities sold under agreements to repurchase 886 802 486 1,688 971
Federal Home Loan Bank advances 3,847 3,055 2,513 6,902 4,602
Other borrowed funds 38 38 26 76 42
Subordinated debentures 1,694 1,668 1,519 3,362 2,787
Total interest expense 12,089 10,904 9,161 22,993 16,935
Net Interest Income 120,296 115,212 108,554 235,508 203,846
Provision for loan losses 57 4,718 57 5,513
Net interest income after provision for loan losses 120,296 115,155 103,836 235,451 198,333
Non-Interest Income
Service charges and other fees 20,025 18,015 18,804 38,040 35,675
Miscellaneous loan fees and charges 1,192 967 2,243 2,159 3,720
Gain on sale of loans 7,762 5,798 8,142 13,560 14,239
Gain (loss) on sale of debt securities 134 213 (56 ) 347 (389 )
Other income 1,721 3,481 2,695 5,202 4,669
Total non-interest income 30,834 28,474 31,828 59,308 57,914
Non-Interest Expense
Compensation and employee benefits 51,973 52,728 49,023 104,701 94,744
Occupancy and equipment 8,180 8,437 7,662 16,617 14,936
Advertising and promotions 2,767 2,388 2,530 5,155 4,700
Data processing 4,062 3,892 4,241 7,954 8,208
Other real estate owned 191 139 211 330 283
Regulatory assessments and insurance 1,848 1,285 1,329 3,133 2,535
Core deposit intangibles amortization 1,865 1,694 1,748 3,559 2,804
Other expenses 15,284 12,267 15,051 27,551 27,212
Total non-interest expense 86,170 82,830 81,795 169,000 155,422
Income Before Income Taxes 64,960 60,799 53,869 125,759 100,825
Federal and state income tax expense 12,568 11,667 9,485 24,235 17,882
Net Income $ 52,392 49,132 44,384 101,524 82,943

Glacier Bancorp, Inc.

Average Balance Sheets

Three Months ended
6/30/2019 3/31/2019
(Dollars in thousands)
Average

Balance
Interest &

Dividends
Average

Yield/

Rate
Average

Balance
Interest &

Dividends
Average

Yield/

Rate
Assets
Residential real estate loans $ 938,467 $ 11,410 4.86 % $ 917,324 $ 10,779 4.70 %
Commercial loans 1 6,803,541 89,191 5.26 % 6,524,190 84,613 5.26 %
Consumer and other loans 868,733 11,040 5.10 % 839,011 10,447 5.05 %
Total loans 2 8,610,741 111,641 5.20 % 8,280,525 105,839 5.18 %
Tax-exempt debt securities 3 957,177 9,982 4.17 % 960,569 9,950 4.14 %
Taxable debt securities 4 1,911,173 14,246 2.98 % 1,845,677 13,729 2.98 %
Total earning assets 11,479,091 135,869 4.75 % 11,086,771 129,518 4.74 %
Goodwill and intangibles 351,466 337,963
Non-earning assets 584,459 520,353
Total assets $ 12,415,016 $ 11,945,087
Liabilities
Non-interest bearing deposits $ 3,084,404 $ % $ 2,943,770 $

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How Pillar Is Helping Solve The Student Loan Problem

Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures participated in this round. And individual …
  • Pillar, a company that is helping solve the student loan problem, announced it has raised $5.5 million in seed funding
  • This round of funding was led by Kleiner Perkins with participation from Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures.
  • Individual investors Adam Nash, Noah Weiss, Zach Weinberg,Misha Esipov, Patrick Kavanagh, and Nadia Asoyan also participated

Pillar is a company that helps people manage, pay off, and save money on their student loans. And early users of the service have already linked $50 million worth of student loans into the platform for automating and managing the loan repayment process. And Britta Mulderrig, the head of growth and marketing at Pillar, announced that the company has $5.5 million in seed funding led by Kleiner Perkins.

Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures participated in this round. And individual investors include Adam Nash (the former CEO of Wealthfront and Acorns board member), Noah Weiss (former SVP of Product at Foursquare), Flatiron Health co-founders Zach Weinberg and Nat Turner, Misha Esipov (CEO and co-founder of Nova Credit), Patrick Kavanagh (head of growth at Robinhood), and Nadia Asoyan (head of finance and strategy at Robinhood) also joined.

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Student loan debt is considered the second largest type of consumer debt with 45 million borrowers in the US owing more than $1.5 trillion. And 7 out of 10 students take out loans for paying for college and the average person graduates school with $30,000 in debt and it takes an average of 20 years to pay it off. And it takes more than 30 years on average for people with $60,000 in debt to pay it off. Nearly 20% of borrowers owe more than $100,000 after graduation.

And student loans also have a negative impact on the economy and harms wealth creation opportunities in America. About 83% of people ages 22 to 35 with student debt blame their loans as the reason why they have not bought a house yet. And women — who own two-thirds of all student loan debt — are disproportionately impacted due to the gender pay gap. Since women borrow more and earn less, it results in two extra years for paying off their loans.

How does Pillar work? The platform aggregates all of a borrower’s student loans into one place. Then it analyzes their loans, income, and spending for determining the fastest way to pay down their debt. From there, Pillar automates the payment and management process — which makes it easy for people to take action and pay off debt faster.

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“Last year my wife graduated from law school with over $300k of student loans. I was at Stanford Business School, where I planned to take on another $250,000 of debt. We spent weeks researching how we were going to pay our loans back, but struggled to find a way that was right for our unique financial situation and goals,” said Pillar co-founder and CEO Michael Bloch. “I experienced the same problem that millions of other borrowers face each day. I saw how the student loan debt crisis is one of the biggest challenges facing our country, so I dropped out of Stanford to help solve it.”

Essentially, it solves the pain points inherent to managing student loans, thus creating a positive impact on borrowers and helping them get out of debt faster. And the average borrower on Pillar will save $6,200 and four years on repayment.

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“Managing student loans has become one of the biggest challenges for many Americans today, impeding their financial well-being,” added Kleiner Perkins investor Monica Desai. “Startups have revolutionized many aspects of personal finance. We believe Pillar is well poised to tackle this mounting crisis and make it radically easier for graduates to manage and get ahead of their student loans.”

One of the biggest issues for borrowers is that student loan lenders are financially incentivized to keep people in debt longer. Pillar is not a student loan provider or refinancer so it does not make money from charging interest on student loans. And it takes just two minutes to sign up with Pillar. Plus it is completely free to download and use. Later this year, Pillar is going to introduce premium features that people can access.

“According to my student loan providers, I will be paying off my loans until I am 40 — yikes. I’m excited about Pillar because it tells me how much money I save by paying a few extra dollars towards my loans every month, which lender apps don’t do and are hard to use. With Pillar, I can see all my loans in one place and can finally see how much money that extra $5 saves me!” exclaimed BNY Mellon project manager Jordan Trejo.

With Pillar, people can make in-app payments and they are regularly updated on new ways to save money so that they can pay off their loans more effectively. And Pillar shows people how much money they will save over time if they make specified payments now or in the near term and whether they can afford to increase or decrease their payments.

“There is no simple way to figure out if you’re on track with making your student loan payments, I’m always wondering if I’m doing the right thing and making the right payments. Pillar’s app makes it easy to know if you are on the right track and making progress,” explained filmmaker Nora Unkel.

Pillar was founded last year by Bloch and CTO Gilad Kahala. Kahala was previously a senior data engineer at Spring Inc., a senior software engineer at Fiverr, and a software engineer for ForNova, IBM, and Zoran. And prior to launching Pillar, Bloch was a manager at DoorDash, the head of growth at Camio.

“I’ve been looking for a way to easily see and repay my student loans all in one place,” explained Ashwin Aravind — who is a law school graduate and management consultant with more than $200,000 in debt. “It’s exciting to see Pillar come along because that’s exactly what it does. I can use it without getting confused or feeling like I’m being kept in debt longer so someone else can make money off of me.”

You can download and sign up for Pillar in two minutes via iOS or via Android, which will add users quickly to a growing waitlist. Early access to Pillar is based on a first-come, first served basis.

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