Glacier Bancorp, Inc. Earnings for Quarter Ended March 31, 2008

HIGHLIGHTS: - Net earnings for the quarter of $17.399 million, up 8 percent from last year's first quarter.

- Net operating earnings for the quarter increased 13 percent from last year's first quarter.

- Diluted quarterly earnings per share of $.32, up 7 percent from last year's first quarter.

- Loans grew by $70 million (8 percent annualized) in the first quarter.

- Non-interest income increased $570 million, up 4 percent from last year's first quarter.

- Effective April 30, 2008, Glacier Bank of Whitefish will merge into Glacier Bank of Kalispell.

- Cash dividend of $.13 per share declared, an increase of 8 percent over the prior year first quarter.

KALISPELL, Mont., April 24 /PRNewswire-FirstCall/ -- Earnings Summary Three months
($ in thousands, except per share data) ended March 31,
(unaudited) (unaudited)
2008 2007

Net earnings $17,399 $16,093
Diluted earnings per share $0.32 $0.30
Return on average assets (annualized) 1.46% 1.48%
Return on average equity (annualized) 12.98% 14.02%

Glacier Bancorp, Inc. (NASDAQ:GBCI) reported net earnings of $17.399 million for the first quarter, an increase of $1.306 million, or 8 percent, over the $16.093 million for the first quarter of 2007. Diluted earnings per share of $.32 for the quarter is an increase of 7 percent over the diluted earnings per share of $.30 for the same quarter of 2007. Included in first quarter 2007 earnings is a nonrecurring $1.0 million gain ($1.6 million pre-tax) from the sale of Western Security Bank's Lewistown, Montana branch and approximately $500 thousand of nonrecurring expenses from the merger of three of the acquired Citizens Development Company's (CDC) five subsidiaries into Glacier Bancorp, Inc. subsidiaries. Excluding such nonrecurring items from the same quarter 2007 results, net earnings for the first quarter increased $1.962 million, or 13 percent, and diluted earnings per share for the first quarter increased 10 percent over the $.29 of diluted earnings per share on an operating basis.

"It was a good quarter and start to the year for us," said Mick Blodnick, President and Chief Executive Officer. "Hopefully the earnings momentum will continue throughout the year." Annualized return on average assets and return on average equity for the first quarter were 1.46 percent and 12.98 percent, respectively, which compares with prior year returns for the first quarter of 1.48 percent and 14.02 percent, respectively.

As reflected on the next table, total assets at March 31, 2008 were $4.835 billion, which is $18 million greater than the total assets of $4.817 billion at December 31, 2007, and $376 million, or 8 percent, greater than the March 31, 2007 assets of $4.459 billion.

$ change $ change
March December March from from
31, 31, 31, December March
Assets ($ in 2008 2007 2007 31, 31,
thousands) (unaudited) (audited)(unaudited) 2007 2007

Cash on hand and in
banks $113,016 145,697 $123,697 (32,681) (10,681)
Investments, interest
bearing deposits,
FHLB stock, FRB
stock, and Fed Funds 764,067 782,236 864,228 (18,169) (100,161)
Loans:
Real estate 720,108 725,854 766,421 (5,746) (46,313)
Commercial 2,312,359 2,247,303 1,851,139 65,056 461,220
Consumer and other 649,401 638,378 590,126 11,023 59,275
Total loans 3,681,868 3,611,535 3,207,686 70,333 474,182
Allowance for loan
and lease losses (56,680) (54,413) (50,540) (2,267) (6,140)
Total loans net
of allowance
for loan and
lease losses 3,625,188 3,557,122 3,157,146 68,066 468,042
Other assets 332,601 332,275 313,942 326 18,659
Total Assets $4,834,872 4,817,330 4,459,013 17,542 375,859

At March 31, 2008, total loans were $3.682 billion, an increase of $70 million, or 2 percent (8 percent annualized) over total loans of $3.612 billion at December 31, 2007. Commercial loans grew the most with an increase of $65 million, or 3 percent, followed by consumer loans, which are primarily comprised of home equity loans, increasing by $11 million, or 2 percent. Real estate loans decreased $6 million, or 79 basis points from the fourth quarter of 2007. Total loans increased $474 million, or 15 percent from March 31, 2007. During the year, commercial loans have increased $461 million, or 25 percent, consumer loans grew by $59 million, or 10 percent, while real estate loans decreased $46 million, or 6 percent.

Investment securities, including interest bearing deposits in other financial institutions and federal funds sold, have decreased $100 million, or 12 percent, from March 31, 2007, and have declined $18 million, or 2 percent, from December 31, 2007. Investment securities at March 31, 2008 represented 16 percent of total assets versus 19 percent at March 31, 2007.

$ change $ change
March December March from from
31, 31, 31, December March
Liabilities ($ in 2008 2007 2007 31, 31,
thousands) (unaudited) (audited) (unaudited) 2007 2007

Non-interest bearing
deposits $770,456 $788,087 $788,426 (17,631) (17,970)
Interest bearing
deposits 2,388,483 2,396,391 2,410,668 (7,908) (22,185)
Advances from Federal
Home Loan Bank 472,761 538,949 455,625 (66,188) 17,136
Securities sold under
agreements to
repurchase and other
borrowed funds 492,189 401,621 168,421 90,568 323,768
Other liabilities 49,217 45,147 44,878 4,070 4,339
Subordinated
debentures 118,559 118,559 118,559 - - Total
liabilities $4,291,665 $4,288,754 3,986,577 2,911 305,088

Non-interest bearing deposits decreased $18 million, or 2 percent, since March 31, 2007 and decreased by $18 million, or 2 percent since December 31, 2007. Interest bearing deposits decreased $8 million from December 31, 2007. The March 31, 2008 balance of interest bearing deposits includes $1 million in broker originated CD's. Since March 31, 2007, interest bearing deposits, excluding a decrease of $204 million in CD's from broker sources, increased $182 million, or 8 percent. Federal Home Loan Bank ("FHLB") advances increased $17 million from March 31, 2007 and decreased $66 million from December 31, 2007. The increase in advances is primarily the result of the decrease in CD's from broker sources to more favorable rates at the FHLB. Repurchase agreements and other borrowed funds were $492 million at March 31, 2008, an increase of $324 million from March 31, 2007, and an increase of $91 million from December 31, 2007. Included in this latter category are U.S. Treasury Tax and Loan funds of $296 million at March 31, 2008, an increase of $80 million from December 31, 2007, and an increase of $296 million from March 31, 2007.

$ change $ change
March December March from from
Stockholders' equity 31, 31, 31, December March
($ in thousands except 2008 2007 2007 31, 31,
per share data) (unaudited) (audited) (unaudited) 2007 2007

Common equity $538,924 $525,459 $468,646 13,465 70,278
Accumulated other
comprehensive income 4,283 3,117 3,790 1,166 493
Total stockholders'
equity 543,207 528,576 472,436 14,631 70,771
Core deposit intangible,
net, and goodwill (153,485) (154,264) (146,164) 779 (7,321)
Tangible
stockholders'
equity $389,722 374,312 $326,272 15,410 63,450

Stockholders' equity
to total assets 11.24% 10.97% 10.60%
Tangible stockholders'
equity to total
tangible assets 8.32% 8.03% 7.57%
Book value per common
share $10.07 $9.85 $8.97 0.22 1.10
Market price per share
at end of quarter $19.17 $18.74 $24.04 0.43 (4.87)

Total equity and book value per share amounts have increased $71 million and $1.10 per share, respectively, from March 31, 2007, the result of earnings retention, issuance of common stock in connection with the acquisition of North Side State Bank in Rock Springs, Wyoming, and exercised stock options. Accumulated other comprehensive income, representing net unrealized gains or losses on investment securities designated as available for sale, increased $493 thousand from March 31, 2007. "In these uncertain times we have continued to build equity in the Company," said Blodnick. "Hopefully the future will present opportunities to leverage this capital at better risk / reward multiples."

Operating Results for Three Months Ended March 31, 2008
Compared to December 31, 2007 and March 31, 2007

Revenue summary
($ in thousands) Three months ended
March 31, December 31, March 31,
2008 2007 2007
(unaudited) (unaudited) (unaudited)
Net interest income
Interest income $76,016 $79,117 $71,920
Interest expense 27,387 30,918 28,829
Net interest income 48,629 48,199 43,091

Non-interest income
Service charges, loan fees, and
other fees 10,961 11,790 10,085
Gain on sale of loans 3,880 3,330 3,042
Gain (Loss) on sale of investments 248 - (8)
Other income 1,173 1,117 2,573
Total non-interest income 16,262 16,237 15,692
$64,891 $64,436 $58,783

Tax equivalent net interest margin 4.54% 4.52% 4.47%

$ change $ change % change % change
from from from from
December March December March
31, 31, 31, 31,
2007 2007 2007 2007
Net interest income
Interest income $(3,101) $4,096 -4% 6%
Interest expense $(3,531) $(1,442) -11% -5%
Net interest income 430 5,538 1% 13%

Non-interest income
Service charges, loan fees, and
other fees (829) 876 -7% 9%
Gain on sale of loans 550 838 17% 28%
Gain (Loss) on sale of investments 248 256 n/m -3200%
Other income 56 (1,400) 5% -54%
Total non-interest income 25 570 0% 4%
$455 $6,108 1% 10%

Tax equivalent net interest margin

Net Interest Income

Net interest income for the quarter increased $5.5 million, or 13 percent, over the same period in 2007. Total interest income increased $4.1 million, or 6 percent, from the prior year's quarter due largely to the increase in commercial loan volume. Total interest expense has decreased by $1.4 million, or 5 percent, from the same period last year primarily attributable to rate decreases in interest bearing deposits. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.54 percent which is 2 basis points higher than the 4.52 percent achieved for the prior quarter and 7 basis points higher than the 4.47 percent result for the first quarter of 2007. "The improvement in the net interest margin results for the first quarter reflects the banks' willingness to reduce deposit rates yet remain competitive in the face of rate cuts by the Federal Reserve since the start of the year," said Ron Copher, Chief Financial Officer.

Non-interest Income

Fee income increased $876 thousand, or 9 percent, over the same period last year, driven primarily by an increase in the number of checking accounts. Gain on sale of loans increased $838 thousand, or 28 percent, from the first quarter of last year, a combination of a greater volume of real estate loans and SBA loans sold. Gain from the sale of investments during the first quarter included a mandatory redemption of a portion of Visa, Inc. shares from its recent initial public offering, and the sale of shares in Principal Financial Group (PFG). The remaining unredeemed shares of Visa, Inc. are restricted and have an estimated value of $140 thousand as of quarter end. Other income decreased by $1.4 million, or 54 percent, over the same period last year primarily due to the nonrecurring $1.6 million gain from the sale of Western Security Bank's Lewistown, Montana branch.

Non-interest expense summary Three months ended
($ in thousands) March 31, December 31, March 31,
2008 2007 2007
(unaudited) (unaudited) (unaudited)

Compensation and employee benefits $21,097 $18,684 $19,506
Occupancy and equipment expense 5,133 5,042 4,458
Advertising and promotion expense 1,539 1,609 1,440
Outsourced data processing 667 710 812
Core deposit intangibles amortization 779 786 780
Other expenses 6,398 7,633 6,187
Total non-interest expense $35,613 $34,464 $33,183

$ change $ change % change % change
from from from from
December March December March
31, 31, 31, 31,
2007 2007 2007 2007

Compensation and employee benefits $2,413 $1,591 13% 8%
Occupancy and equipment expense 91 675 2% 15%
Advertising and promotion expense (70) 99 -4% 7%
Outsourced data processing (43) (145) -6% -18%
Core deposit intangibles amortization (7) (1) -1% 0%
Other expenses (1,235) 211 -16% 3%
Total non-interest expense $1,149 $2,430 3% 7%

Non-interest Expense

Non-interest expense increased by $1.1 million, or 3 percent, from the prior quarter and increased by $2.4 million, or 7 percent, from the same quarter of 2007. Included in the first quarter of 2007 is approximately $500 thousand of nonrecurring expenses from the merger of three of the acquired CDC's five subsidiaries into Glacier Bancorp, Inc. subsidiaries. Compensation and benefit expense increased $2.4 million, or 13 percent, over the prior quarter and increased $1.6 million, or 8 percent, over the same quarter of 2007, such increases primarily attributable to increased staffing levels, including new branches, as well as increased compensation, including commissions tied to increased production, and benefits, including health insurance. The number of full-time-equivalent employees has increased from 1,395 to 1,510, an 8 percent increase since March 31, 2007. Occupancy and equipment expense increased $675 thousand, or 15 percent, reflecting the cost of additional branch locations and facility upgrades.

Other expenses increased $211 thousand, or 3 percent, over the same period last year, primarily from costs associated with new branch offices, and other general and administrative costs. Other expenses decreased by $1.2 million from the prior quarter, such decreases attributable to an enhanced focus on reducing operating expenses. "Our employees are diligently working to improve operational efficiencies, including cost controls," said Copher. The efficiency ratio (non-interest expense/net interest income plus non-interest income) was 55 percent for the 2008 first quarter, compared to 56 percent for the 2007 first quarter.

March 31, December 31, March 31,
Credit quality information 2008 2007 2007
($ in thousands) (unaudited) (audited) (unaudited)

Allowance for loan losses $56,680 $54,413 $50,540

Real estate and other assets owned 2,098 2,043 1,727
Accruing Loans 90 days or more overdue 4,717 2,685 3,982
Non-accrual loans 21,747 8,560 5,597
Total non-performing assets 28,562 13,288 11,306

Allowance for loan and lease losses as
a percentage of non performing assets 198% 409% 447%

Non-performing assets as a percentage
of total bank assets 0.57% 0.27% 0.25%

Allowance for loan losses as a
percentage of total loans 1.54% 1.51% 1.58%

Net (charge-offs) recoveries as a
percentage of loans (0.006%) (0.060%) 0.003%

Allowance for Loan and Lease Loss and Non-Performing Assets

"As expected we did see an increase in non-performing assets during the quarter although net charge-offs were negligible," Blodnick said. "The banks are working very hard to resolve these past due loans and keep our charge-offs at manageable levels." Non-performing assets as a percentage of total bank assets at March 31, 2008 were at .57 percent, up .27 percent as of December 31, 2007, and up from .25 percent at March 31, 2007. These ratios compare favorably to the Federal Reserve Bank Peer Group average of .80 percent at December 31, 2007, the most recent information available. The allowance for loan and lease losses was 198 percent of non-performing assets at March 31, 2008, down from 409 percent for the prior quarter end and down from 447 percent a year ago. The allowance for loan and lease losses, has increased $6.1 million, or 12 percent, from a year ago. The allowance for loan and lease losses of $56.680 million is 1.54 percent of March 31, 2008 total loans outstanding, up from 1.51 percent at the prior quarter end, and down from 1.58 percent in the first quarter last year. The first quarter provision for loan losses expense was $2.5 million, an increase of $1.3 million from the same quarter in 2007. Charged off loans exceeded recovery of previously charged-off loans during the quarter by $233 thousand. Loan portfolio growth, composition, average loan size, and credit quality considerations will determine the level of additional provision expense.

Merger of Bank Subsidiaries

Effective April 30, 2008, Glacier Bank of Whitefish, Montana will merge into Glacier Bank with operations conducted under the Glacier Bank charter. In connection with the merger, Russ Porter, President of Glacier Bank of Whitefish, has joined Mountain West Bank of Coeur d'Alene, Idaho as President and Chief Operating Officer.

Cash dividend

On March 26, 2008, the board of directors declared a cash dividend of $.13 per share, payable April 17, 2008 to shareholders of record on April 7, 2008, which is an increase of 8 percent over the $.12 dividend declared in the first quarter of last year.

About Glacier Bancorp, Inc.

Glacier Bancorp, Inc. is a regional multi-bank holding company providing commercial banking services in 53 communities in Montana, Idaho, Utah, Washington, and Wyoming. Glacier Bancorp, Inc. is headquartered in Kalispell, Montana, and conducts its operations principally through eleven banking subsidiaries. These subsidiaries include seven Montana banks: Glacier Bank of Kalispell, Glacier Bank of Whitefish, First Security Bank of Missoula, Valley Bank of Helena, Big Sky Western Bank of Bozeman, Western Security Bank of Billings, First Bank of Montana of Lewistown; as well as Mountain West Bank in Idaho, Utah and Washington; 1st Bank in Wyoming, Citizens Community Bank in Idaho, and First National Bank of Morgan in Utah.

This news release includes forward looking statements, which describe management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of the Company's style of banking and the strength of the local economies in which it operates. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in the Company's public filings, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are less favorable than expected or have a more direct and pronounced effect on the Company than expected and adversely affect the company's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new banks and/or branches are lower than expected; (4) costs or difficulties related to the integration of acquisitions are greater than expected; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which the Company is engaged.

Visit our website at http://www.glacierbancorp.com/

GLACIER BANCORP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL CONDITION

($ in thousands except per
share data) March 31, December 31, March 31,
2008 2007 2007
(unaudited) (audited) (unaudited)
Assets:
Cash on hand and in banks $113,016 145,697 123,697
Federal funds sold 135 135 2,752
Interest bearing cash deposits 72,662 81,777 88,112

Investment securities,
available-for-sale 691,270 700,324 773,364

Net loans receivable:
Real estate loans 720,108 725,854 766,421
Commercial loans 2,312,359 2,247,303 1,851,139
Consumer and other loans 649,401 638,378 590,126
Allowance for loan and lease
losses (56,680) (54,413) (50,540)
Total loans, net 3,625,188 3,557,122 3,157,146

Premises and equipment, net 124,183 123,749 115,123
Real estate and other assets
owned, net 2,098 2,043 1,727
Accrued interest receivable 25,900 26,168 25,340
Core deposit intangible, net 13,184 13,963 13,861
Goodwill 140,301 140,301 132,303
Other assets 26,935 26,051 25,588
Total assets $4,834,872 4,817,330 4,459,013

Liabilities and stockholders'
equity:
Non-interest bearing deposits $770,456 788,087 788,426
Interest bearing deposits 2,388,483 2,396,391 2,410,668
Advances from Federal Home
Loan Bank of Seattle 472,761 538,949 455,625
Securities sold under
agreements to repurchase 191,369 178,041 162,491
Other borrowed funds 300,820 223,580 5,930
Accrued interest payable 11,116 13,281 12,980
Deferred tax liability 932 481 94
Subordinated debentures 118,559 118,559 118,559
Other liabilities 37,169 31,385 31,804
Total liabilities 4,291,665 4,288,754 3,986,577

Preferred shares, $.01 par
value per share. 1,000,000
shares authorized
None issued or
outstanding - - - Common stock, $.01 par value
per share. 117,187,500 shares
authorized 539 536 527
Paid-in capital 378,547 374,728 350,065
Retained earnings - substantially restricted 159,838 150,195 118,054
Accumulated other
comprehensive income 4,283 3,117 3,790
Total stockholders' equity 543,207 528,576 472,436
Total liabilities and
stockholders' equity $4,834,872 4,817,330 4,459,013
Number of shares outstanding 53,918,813 53,646,480 52,656,162
Book value of equity per share 10.07 9.85 8.97

GLACIER BANCORP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS

($ in thousands except per share data) Three months ended March 31,
2008 2007
(unaudited) (unaudited)
Interest income:
Real estate loans $12,592 14,441
Commercial loans 42,533 36,652
Consumer and other loans 12,107 11,314
Investment securities and other 8,784 9,513
Total interest income 76,016 71,920

Interest expense:
Deposits 16,869 18,807
Federal Home Loan Bank of Seattle
advances 5,718 5,042
Securities sold under agreements
to repurchase 1,341 1,887
Subordinated debentures 1,873 1,814
Other borrowed funds 1,586 1,279
Total interest expense 27,387 28,829

Net interest income 48,629 43,091
Provision for loan losses 2,500 1,195
Net interest income after provision
for loan losses 46,129 41,896

Non-interest income:
Service charges and other fees 9,471 8,263
Miscellaneous loan fees and charges 1,490 1,822
Gain on sale of loans 3,880 3,042
Gain (loss) on sale of investments 248 (8)
Other income 1,173 2,573
Total non-interest income 16,262 15,692
Non-interest expense:
Compensation, employee benefits
and related expenses 21,097 19,506
Occupancy and equipment expense 5,133 4,458
Advertising and promotion expense 1,539 1,609
Outsourced data processing expense 667 812
Core deposit intangibles amortization 779 780
Other expenses 6,398 6,018
Total non-interest expense 35,613 33,183
Earnings before income taxes 26,778 24,405

Federal and state income tax expense 9,379 8,312
Net earnings $17,399 16,093

Basic earnings per share 0.32 0.31
Diluted earnings per share 0.32 0.30
Dividends declared per share 0.13 0.12
Return on average assets (annualized) 1.46% 1.48%
Return on average equity (annualized) 12.98% 14.02%
Average outstanding shares - basic 53,849,608 52,500,395
Average outstanding shares - diluted 54,034,186 53,239,346

AVERAGE BALANCE SHEET For the Three months ended 3-31-08
(Unaudited - $ in Thousands) Interest Average
Average and Yield/
ASSETS Balance Dividends Rate
Real Estate Loans $719,371 12,592 7.00%
Commercial Loans 2,275,044 42,533 7.50%
Consumer and Other Loans 639,091 12,107 7.60%
Total Loans 3,633,506 67,232 7.42%
Tax-Exempt Investment Securities (1) 259,894 3,174 4.89%
Other Investment Securities 522,511 5,610 4.29%
Total Earning Assets 4,415,911 76,016 6.89%
Goodwill and Core Deposit Intangible 154,018
Other Non-Earning Assets 239,529
TOTAL ASSETS $4,809,458

LIABILITIES AND STOCKHOLDERS' EQUITY
NOW Accounts $463,716 912 0.79%
Savings Accounts 267,285 547 0.82%
Money Market Accounts 799,407 5,950 2.99%
Certificates of Deposit 860,552 9,460 4.41%
FHLB Advances 595,268 5,718 3.85%
Repurchase Agreements and Other
Borrowed Funds 504,296 4,800 3.82%
Total Interest Bearing Liabilities 3,490,524 27,387 3.15%
Non-interest Bearing Deposits 735,205
Other Liabilities 44,586
Total Liabilities 4,270,315

Common Stock 538
Paid-In Capital 376,451
Retained Earnings 156,779
Accumulated Other
Comprehensive Income 5,375
Total Stockholders' Equity 539,143
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,809,458

Net Interest Income $48,629
Net Interest Spread 3.74%
Net Interest Margin 4.42%
Net Interest Margin (Tax Equivalent) 4.54%
Return on Average Assets (annualized) 1.46%
Return on Average Equity (annualized) 12.98%

(1) Excludes tax effect of $1,405 on non-taxable investment
security income

First Call Analyst:
FCMN Contact:

Source: Glacier Bancorp, Inc.

CONTACT: Michael J. Blodnick, +1-406-751-4701, or Ron J. Copher,
+1-406-751-7706, both of Glacier Bancorp, Inc.

Web site: http://www.glacierbancorp.com/

2008-04-24 19:02:01 0345070 PRNEWSWIRE