Glacier Bancorp, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are primarily with FY2022. The company operates Glacier Bank across eight Western states through 17 bank divisions and reported one operating segment.
Key financial results
| Metric | FY2023 / year-end | Change versus FY2022 |
|---|---|---|
| Total assets | $27.74 billion | Up 4% |
| Total income (net interest income plus non-interest income) | $809.8 million | Down 11% |
| Net interest income | $691.7 million | Down 12% |
| Net income / diluted EPS | $222.9 million / $2.01 | Down 26% / 27% |
| Net interest margin, tax-equivalent | 2.73% | Down 54 basis points |
| Non-interest expense | $527.4 million | Up 2% |
| Provision for credit losses | $14.8 million | Down 26% |
| Loans, gross / deposits | $16.20 billion / $19.93 billion | Loans up 6%; deposits down 3% |
| Cash and cash equivalents | $1.35 billion | Up $952 million |
| Stockholders’ equity | $3.02 billion | Up 6% |
Annual operating cash flow was $500.7 million; investing activities used $207.5 million and financing activities provided $659.1 million. Cash increased $952.3 million during the year. The company declared $1.32 per share in dividends and made no 2023 share repurchases. Return on average assets was 0.81%, return on average equity 7.64%, and the efficiency ratio 62.85%.
Material changes and financial position
- Interest income rose 23% to $1.02 billion, but interest expense increased to $326.0 million from $41.3 million. Higher funding costs outpaced asset yield growth, reducing net interest income and margin.
- Average loan yield increased to 5.19% from 4.66%; total funding cost rose to 1.35% from 0.18%. Management attributed the pressure to higher rates, deposit competition and increased borrowing.
- Commercial real estate was $10.30 billion, about 64% of gross loans. Total loans grew $951 million, with the largest increase in commercial real estate.
- Deposit mix shifted: non-interest-bearing deposits fell 22% to $6.02 billion, while certificates of deposit increased to $2.92 billion. Estimated uninsured deposits were $6.08 billion.
- Year-end borrowings included $2.74 billion under the Federal Reserve Bank Term Funding Program (BTFP), $1.49 billion of repurchase agreements and $133 million of subordinated debentures. No FHLB advances were outstanding at year-end.
- Available liquidity was reported at $15.0 billion, including cash, borrowing capacity, unpledged securities and other sources. Tangible stockholders’ equity was $2.00 billion; tangible book value per share was $18.06.
- Accumulated other comprehensive loss improved to $374.1 million from $468.8 million. AFS securities had $498.4 million of gross unrealized losses; HTM securities had $325.1 million. Management attributed AFS losses primarily to rates and market spreads and recorded no securities credit-loss allowance.
Credit quality, outlook and notable items
- Non-performing assets declined to $25.6 million, or 0.09% of subsidiary assets, from $32.7 million, or 0.12%. The allowance for credit losses was $192.8 million, 1.19% of loans; net charge-offs were $10.3 million, or 0.07% of average loans.
- Accruing loans 30–89 days past due rose to $50.0 million from $21.0 million, primarily in the fourth quarter. Management said part of the increase included a $13 million loan brought current shortly after year-end.
- Management expects results to depend on economic conditions, interest rates, deposit and loan competition, credit quality, loan growth, acquisition integration and regulatory costs. No quantified earnings or margin guidance is provided.
- Non-interest expense included a $6.0 million FDIC special assessment; total regulatory assessments and insurance expense rose 123%. A $1.7 million gain from selling all Visa Class B shares was included in securities gains. The effective tax rate was 16.7%.
- The $2.74 billion BTFP borrowing was due to mature in March 2024. The company had committed to $1.8 billion in FHLB advances, with maturities from March 2025 to March 2026, and planned to repay the BTFP borrowing using those advances and other liquidity.
- After year-end, the company completed its Wheatland Bank acquisition on January 31, 2024, issuing 2.39 million shares. At closing, CFGW reported $728.6 million of assets, $464.1 million of gross loans and $611.7 million of deposits. A separate agreement to acquire six Montana branches was announced; closing was anticipated in Q3 2024, subject to approvals and conditions.
- Key risks include commercial real estate and broader credit exposure, funding-cost and interest-rate sensitivity, securities valuation, deposit competition, regulatory and FDIC assessment changes, cyber and third-party risks, and acquisition integration. Goodwill was $985 million; management reported no impairment. The auditor issued unqualified opinions on the financial statements and internal controls.
Important facts for investors to verify
- Progress in replacing the BTFP borrowing at maturity, the actual cost and timing of replacement funding, and effects on net interest margin.
- Deposit retention, certificate maturities and pricing, uninsured deposit trends, and whether the reported $15.0 billion liquidity remains available under stress.
- Delinquencies and criticized or classified commercial real estate loans, including office and other property exposures, collateral values, and allowance adequacy.
- Realized or unrealized securities losses, securities pledging, and any change in management’s ability or intent to hold securities through recovery.
- Wheatland integration and share dilution, plus regulatory approval and completion of the proposed Montana branch acquisition.
- Future earnings, capital and dividend capacity, given the 65.7% dividend payout ratio and sensitivity to funding costs and credit conditions.