GBCI Glacier Bancorp Inc

HIGHLIGHTS:

Glacier Bancorp, Inc. (Nasdaq:GBCI) reported net income of $29.6 million for the current quarter, an increase of $320 thousand, or 1 percent, from the $29.3 million of net income for the prior year third quarter.  Diluted earnings per share for the current quarter was $0.39 per share, a decrease of $0.01, or 3 percent, from the prior year third quarter diluted earnings per share of $0.40.  Included in the current quarter non-interest expense was $259 thousand of one-time acquisition and conversion related expenses.  “Once again this quarter we delivered solid performance metrics similar to what we have achieved over the past nine quarters,” said Mick Blodnick, President and Chief Executive Officer.  “Record top line revenues helped offset higher taxes in the third quarter and allowed us to generate another quarter of record earnings.  The growth in revenues came primarily from increases in interest on our investment and commercial loan portfolios as well as greater service charge fee income on deposit accounts,” Blodnick said.

Net income for the nine months ended September 30, 2015 was $86.6 million, an increase of $1.9 million, or 2 percent, from the $84.7 million of net income for the same period in the prior year.  Diluted earnings per share for the nine months ended September 30, 2015 was $1.15 per share, an increase of $0.01, or 1 percent, from the diluted earnings per share for the same period in the prior year.

On February 28, 2015, the Company completed the acquisition of Montana Community Banks, Inc. and its subsidiary, Community Bank, Inc. (collectively, “CB”).  The Company incurred $1.5 million of legal and professional expenses in connection with the CB acquisition and conversion during the current year.  Goodwill of $1.1 million resulted from the acquisition which was based on the estimated fair value of the assets acquired and liabilities assumed.  The Company’s results of operations and financial condition include the acquisition of CB from the acquisition date and the following table provides information on the fair value of selected classifications of assets and liabilities acquired:

(Dollars in thousands)	February 28,  2015
Total assets	$	175,774
Investment securities		42,350
Loans receivable		84,689
Non-interest bearing deposits		41,779
Interest bearing deposits		105,041
Federal Home Loan Bank advances and other borrowed funds		3,292

Asset Summary

																			$ Change from
(Dollars in thousands)	Sep 30,  2015									Jun 30,  2015			Dec 31,  2014			Sep 30,  2014			Jun 30,  2015			Dec 31,  2014			Sep 30,  2014
Cash and cash equivalents			$		242,835					355,719			442,409			282,097			(112,884	)		(199,574	)		(39,262	)
Investment securities, available-for-sale					2,530,994					2,361,830			2,387,428			2,398,196			169,164			143,566			132,798
Investment securities, held-to-maturity					651,822					593,314			520,997			482,757			58,508			130,825			169,065
Total investment securities					3,182,816					2,955,144			2,908,425			2,880,953			227,672			274,391			301,863
Loans receivable
Residential real estate					644,694					635,674			611,463			603,806			9,020			33,231			40,888
Commercial					3,581,667					3,529,274			3,263,448			3,248,529			52,393			318,219			333,138
Consumer and other					650,058					642,483			613,184			606,764			7,575			36,874			43,294
Loans receivable					4,876,419					4,807,431			4,488,095			4,459,099			68,988			388,324			417,320
Allowance for loan and lease losses					(130,768		)			(130,519	)		(129,753	)		(130,632	)		(249	)		(1,015	)		(136	)
Loans receivable, net					4,745,651					4,676,912			4,358,342			4,328,467			68,739			387,309			417,184
Other assets					592,997					602,035			597,331			618,293			(9,038	)		(4,334	)		(25,296	)
Total assets			$		8,764,299					8,589,810			8,306,507			8,109,810			174,489			457,792			654,489

Total investment securities of $3.183 billion at September 30, 2015 increased $228 million, or 8 percent, during the current quarter and increased $302 million, or 10 percent, from September 30, 2014.  The increase in the investment portfolio from the prior quarter and the prior year third quarter was the result of continuing to selectively purchase investment securities with the Company’s excess liquidity resulting from the sustained increase in deposits.  Investment securities represented 36 percent of total assets at September 30, 2015 compared to 35 percent at December 31, 2014 and 36 percent at September 30, 2014.

The Company continues to experience growth in the loan portfolio which increased $69.0 million, or 1 percent, during the current quarter.  The loan category with the largest dollar increase during the current quarter was commercial real estate loans which increased $46.6 million, or 2 percent.  The loan category with the largest percentage increase was residential construction (i.e., regulatory classification) which increased 10 percent over the prior quarter.  Excluding the CB acquisition, the loan portfolio increased $304 million, or 7 percent, since December 31, 2014 with $252 million of the increase coming from growth in commercial loans.  “Our loan growth was a little softer than what we had hoped for this quarter as a couple of large credits paid off,” Blodnick said.  “Loan production in the third quarter actually exceeded the first two quarters of the year, unfortunately so did pay offs.  The good news is the loan pipeline still looks decent as we head into what traditionally is a slower time of the year for loan production.  Hopefully, loan pay downs will slow down also,” Blodnick said.

Credit Quality Summary

	At or for the Nine Months ended				At or for the Six Months ended			At or for the Year ended			At or for the Nine Months ended
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015			Dec 31,  2014			Sep 30,  2014
Allowance for loan and lease losses
Balance at beginning of period	$	129,753			129,753			130,351			130,351
Provision for loan losses	1,873				1,047			1,912			1,721
Charge-offs	(4,671		)		(2,598	)		(7,603	)		(5,567	)
Recoveries	3,813				2,317			5,093			4,127
Balance at end of period	$	130,768			130,519			129,753			130,632
Other real estate owned	$	26,609			26,686			27,804			28,374
Accruing loans 90 days or more past due	3,784				618			214			1,617
Non-accrual loans	54,632				56,918			61,882			68,149
Total non-performing assets 1	$	85,025			84,222			89,900			98,140
Non-performing assets as a percentage of subsidiary assets	0.97		%		0.98	%		1.08	%		1.21	%
Allowance for loan and lease losses as a percentage of non-performing loans	224		%		227	%		209	%		187	%
Allowance for loan and lease losses as a percentage of total loans	2.68		%		2.71	%		2.89	%		2.93	%
Net charge-offs as a percentage of total loans	0.02		%		0.01	%		0.06	%		0.03	%
Accruing loans 30-89 days past due	$	17,822			28,474			25,904			17,570
Accruing troubled debt restructurings	$	63,638			64,336			69,129			74,376
Non-accrual troubled debt restructurings	$	27,442			32,664			33,714			37,482

__________1 As of September 30, 2015, non-performing assets have not been reduced by U.S. government guarantees of $2.0 million.

Non-performing assets at September 30, 2015 were $85.0 million, an increase of $803 thousand, or less than 1 percent, during the current quarter.  Non-performing assets at September 30, 2015 decreased $13.1 million, or 13 percent, from a year ago.  Land, lot and other construction loans (i.e., regulatory classification) continues to be the largest category of non-performing assets with $38.6 million, or 45 percent, at September 30, 2015.  The Company has continued to make progress by reducing this category the past few years and the category decreased $4.2 million, or 10 percent, from the prior quarter.  Early stage delinquencies (accruing loans 30-89 days past due) of $17.8 million at September 30, 2015 decreased $10.7 million from the prior quarter and increased $252 thousand from the prior year third quarter.

The allowance for loan and lease losses (“allowance”) was $131 million at September 30, 2015 and continued to remain stable compared to the prior periods.  The allowance was 2.68 percent of total loans outstanding at September 30, 2015 compared to 2.89 percent at December 31, 2014 and 2.93 percent for the same quarter last year. The reduction in the allowance as a percentage of total loans was driven primarily by loan growth, stabilizing credit quality, and no allowance carried over from bank acquisitions as a result of the acquired loans recorded at fair value.

Credit Quality Trends and Provision for Loan Losses

(Dollars in thousands)		Provisionfor LoanLosses				Net Charge-Offs (Recoveries)				ALLLas a Percentof Loans			AccruingLoans 30-89Days Past Dueas a Percent ofLoans			Non-PerformingAssets toTotal SubsidiaryAssets
Third quarter 2015		$	826			$	577			2.68	%		0.37	%		0.97	%
Second quarter 2015		282				(381		)		2.71	%		0.59	%		0.98	%
First quarter 2015		765				662				2.77	%		0.71	%		1.07	%
Fourth quarter 2014		191				1,070				2.89	%		0.58	%		1.08	%
Third quarter 2014		360				364				2.93	%		0.39	%		1.21	%
Second quarter 2014		239				332				3.11	%		0.44	%		1.30	%
First quarter 2014		1,122				744				3.20	%		1.05	%		1.37	%
Fourth quarter 2013		1,802				2,216				3.21	%		0.79	%		1.39	%

Net charge-offs of loans for the current quarter were $577 thousand compared to net recoveries of $381 thousand for the prior quarter and net charge-offs of $364 thousand from the same quarter last year.  The current quarter provision for loan losses of $826 thousand increased $544 thousand from the prior quarter and increased $466 thousand from the prior year third 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)	Sep 30,  2015				Jun 30,  2015			Dec 31,  2014			Sep 30,  2014			Jun 30,  2015			Dec 31,  2014			Sep 30,  2014
Non-interest bearing deposits	$	1,893,723			1,731,015			1,632,403			1,595,971			162,708			261,320			297,752
Interest bearing deposits	4,779,456				4,827,642			4,712,809			4,510,840			(48,186	)		66,647			268,616
Repurchase agreements	441,041				408,935			397,107			367,213			32,106			43,934			73,828
Federal Home Loan Bank advances	329,299				329,470			296,944			366,866			(171	)		32,355			(37,567	)
Other borrowed funds	6,619				6,665			7,311			7,351			(46	)		(692	)		(732	)
Subordinated debentures	125,812				125,776			125,705			125,669			36			107			143
Other liabilities	113,541				103,856			106,181			95,420			9,685			7,360			18,121
Total liabilities	$	7,689,491			7,533,359			7,278,460			7,069,330			156,132			411,031			620,161

The Company continues to generate strong increases in non-interest bearing deposits.  Non-interest bearing deposits of $1.894 billion at September 30, 2015, increased $163 million, or 9 percent, from the prior quarter.  Excluding the CB acquisition, non-interest bearing deposits increased $256 million, or 16 percent, from September 30, 2014.  Interest bearing deposits of $4.779 billion at September 30, 2015 included $190 million of wholesale deposits (i.e., brokered deposits classified as NOW, money market deposits and certificate accounts).  Excluding the decrease of $7.5 million in wholesale deposits, interest bearing deposits at September 30, 2015 decreased $40.6 million, or 1 percent, during the current quarter.  Excluding the CB acquisition, interest bearing deposits at September 30, 2015 increased $164 million, or 4 percent, from September 30, 2014.  “We continue to drive significant organic growth in non-interest bearing deposits, ” Blodnick said.  “The current quarter was by far the largest increase we have generated in this deposit category and even exceeds those quarters where we acquired a new bank.  It’s a testament to the great work done by all of our banks in adding to and maintaining  their market share.  This large low cost deposit base will serve us well when interest rates begin to rise,” Blodnick said.

Securities sold under agreements to repurchase (“repurchase agreements”) of $441 million at September 30, 2015 increased $32.1 million, or 8 percent, from the prior quarter and was primarily the result of additions to existing repurchase agreements.  Federal Home Loan Bank (“FHLB”) advances of $329 million at September 30, 2015 were unchanged for the current quarter and increased $32.4 million, or 11 percent, since December 31, 2014 as the Company took advantage of attractive term borrowings that were available from the FHLB of Seattle prior to the merger with FHLB of Des Moines during the second quarter of 2015.   FHLB advances decreased $37.6 million, or 10 percent, from September 30, 2014 as growth in deposits and continued balance sheet changes reduced the need for additional borrowings.

Stockholders’ Equity Summary

																														$ Change from
(Dollars in thousands, except per share data)		Sep 30,							Jun 30,							Dec 31,							Sep 30,							Jun 30,				Dec 31,				Sep 30,
					2015							2015							2014							2014					2015				2014				2014
Common equity		$			1,066,801							1,051,011							1,010,303							1,017,805					15,790				56,498				48,996
Accumulated other comprehensive income					8,007							5,440							17,744							22,675					2,567				(9,737	)			(14,668	)
Total stockholders’ equity					1,074,808							1,056,451							1,028,047							1,040,480					18,357				46,761				34,328
Goodwill and core deposit intangible, net					(141,624	)						(142,344	)						(140,606	)						(141,323	)				720				(1,018	)			(301	)
Tangible stockholders’ equity		$			933,184							914,107							887,441							899,157					19,077				45,743				34,027
Stockholders’ equity to total assets					12.26	%						12.30	%						12.38	%						12.83	%
Tangible stockholders’ equity to total tangible assets					10.82	%						10.82	%						10.87	%						11.28	%
Book value per common share		$			14.23							13.99							13.70							13.87					0.24				0.53				0.36
Tangible book value per common share		$			12.35							12.10							11.83							11.98					0.25				0.52				0.37
Market price per share at end of period		$			26.39							29.42							27.77							25.86					(3.03	)			(1.38	)			0.53

Tangible stockholders’ equity of $933 million at September 30, 2015 increased $19.1 million, or 2 percent, from the prior quarter due primarily to earnings retention and an increase in accumulated other comprehensive income.  Tangible stockholders’ equity increased $34.0 million, or 4 percent, from a year ago the result of earnings retention and Company stock issued in connection with the CB acquisitions, both of which offset the decrease in accumulated other comprehensive income.  Tangible book value per common share of $12.35 increased $0.25 per share from the prior quarter and increased $0.37 per share from the prior year third quarter.

Cash Dividend

On September 30, 2015, the Company’s Board of Directors declared a cash dividend of $0.19 per share.  The dividend was payable October 22, 2015 to shareholders of record on October 13, 2015.  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 September 30, 2015Compared to June 30, 2015 and September 30, 2014

Income Summary

	Three Months ended													$ Change from
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015			Mar 31,  2015			Sep 30,  2014			Jun 30,  2015			Mar 31,  2015			Sep 30,  2014
Net interest income
Interest income	$	80,367			78,617			77,486			75,690			1,750			2,881			4,677
Interest expense	7,309				7,369			7,382			6,430			(60	)		(73	)		879
Total net interest income	73,058				71,248			70,104			69,260			1,810			2,954			3,798
Non-interest income
Service charges, loan fees, and other fees	16,030				15,445			14,156			15,661			585			1,874			369
Gain on sale of loans	7,326				7,600			5,430			6,000			(274	)		1,896			1,326
(Loss) gain on sale of investments	(31		)		(98	)		5			(61	)		67			(36	)		30
Other income	2,474				2,855			3,102			2,832			(381	)		(628	)		(358	)
Total non-interest income	25,799				25,802			22,693			24,432			(3	)		3,106			1,367
	$	98,857			97,050			92,797			93,692			1,807			6,060			5,165
Net interest margin (tax-equivalent)	3.96		%		3.98	%		4.03	%		3.99	%

Net Interest Income

In the current quarter, interest income of $80.4 million increased $1.8 million, or 2 percent from the prior quarter, such increase attributable to increases in interest income on commercial loans.  Income of $42.1 million on commercial loans increased $1.4 million, or 4 percent, from the prior quarter and was driven primarily by loan volume increases.  Interest income during the current quarter increased $4.7 million, or 6 percent, over the prior year third quarter and was also due to higher interest income on commercial loans.  The current quarter interest income on commercial loans increased $14.2 million, or 13 percent, over the prior year third quarter primarily the result of an increased volume in commercial loans.  Interest income of $22.4 million on investment securities increased $478 thousand, or 2 percent, over the prior quarter and decreased $357 thousand, or 2 percent, over the prior year third quarter.

The current quarter interest expense of $7.3 million decreased $60 thousand, or 1 percent, from the prior quarter.  The current quarter interest expense increased $879 thousand from the prior year third quarter, such increase attributed to the interest expense associated with the interest rate swap which started interest expense accruals in the fourth quarter of 2014.  The total cost of funding (including non-interest bearing deposits) for the current quarter was 39 basis points compared to 40 basis points for the prior quarter and 37 basis points in the prior year third quarter.

The Company’s net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.96 percent compared to 3.98 percent in the prior quarter. The 2 basis point decrease in the current quarter net interest margin was primarily driven by a 3 basis point reduction in the acquired loan fair value discount accretion.  Included in the current quarter net interest margin was 4 basis points related to the recovery of interest on loans previously placed on non-accrual compared to 1 basis point in the prior quarter.  The Company’s current quarter net interest margin decreased 3 basis points from the prior year third quarter net interest margin of 3.99 percent.  The reduction in the net interest margin from the prior year third quarter was the result of a 6 basis point increase in interest expense related to the interest rate swaps.  “The net interest margin for the current and sequential quarter and for the first nine months of the current year have remained stable compared to the year ago quarters and year ago nine month period as the Bank divisions have been disciplined in pricing loans and interest bearing deposits,” said Ron Copher, Chief Financial Officer.  “The growth in the non-interest bearing balances has served the Bank well to offset the higher interest expense associated with the interest rate swap.”

Non-interest Income

Non-interest income for the current quarter totaled $25.8 million which was stable compared to the prior quarter and an increase of $1.4 million, or 6 percent, over the same quarter last year.  Service fee income of $16.0 million, increased $585 thousand, or 4 percent, from the prior quarter and increased $369 thousand, or 2 percent, from the prior year third quarter with both increases the result of the increased number of deposit accounts.  Gain of $7.3 million on the sale of the residential loans in the current quarter decreased $274 thousand, or 4 percent, from the prior quarter and increased $1.3 million, or 22 percent, from the prior year third quarter as a result of an increase in mortgage purchase activity.  Other non-interest income for the current quarter decreased $381 thousand, or 13 percent, over the prior quarter the result of annual incentives received in the second quarter of 2015.  Other non-interest income decreased $358 thousand, or 13 percent, over the prior year third quarter due to a decrease in other real estate owned (“OREO”) income.   Included in other income was operating revenue of $19 thousand from OREO and a gain of $110 thousand from the sale of OREO, a combined total of $129 thousand for the current quarter compared to $323 thousand for the prior quarter and $406 thousand for the prior year third quarter.

Non-interest Expense Summary

	Three Months ended													$ Change from
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015			Mar 31,  2015			Sep 30,  2014			Jun 30,  2015			Mar 31,  2015			Sep 30,  2014
Compensation and employee benefits	$	33,534			32,729			32,244			30,142			805			1,290			3,392
Occupancy and equipment	7,887				7,810			7,362			6,961			77			525			926
Advertising and promotions	2,459				2,240			1,927			2,141			219			532			318
Data processing	1,258				1,593			1,249			1,472			(335	)		9			(214	)
Other real estate owned	1,047				1,377			758			602			(330	)		289			445
Regulatory assessments and insurance	1,478				1,006			1,305			1,435			472			173			43
Core deposit intangibles amortization	720				755			731			692			(35	)		(11	)		28
Other expenses	10,729				12,435			9,921			10,793			(1,706	)		808			(64	)
Total non-interest expense	$	59,112			59,945			55,497			54,238			(833	)		3,615			4,874

Compensation and employee benefits for the current quarter increased by $805 thousand, or 2 percent, from the prior quarter.  Compensation and employee benefits for the current quarter increased by $3.4 million, or 11 percent, from the prior year third quarter due to the increased number of employees from the CB acquisition and the First National Bank of the Rockies (“FNBR”) acquisition in August 2014, and annual salary increases.  Current quarter occupancy and equipment expense increased $926 thousand, or 13 percent, from the prior year third quarter as a result of added costs associated with the CB and FNBR acquisitions and equipment expense related to additional information technology infrastructure.  The current quarter advertising expense increased $219 thousand, or 10 percent, from the prior quarter and increased $318 thousand, or 15 percent, from the prior year third quarter as a result of the Company actively marketing to its customer base in certain market areas.  The current quarter data processing expense decreased $335 thousand, or 21 percent, from the prior quarter as a result of conversion related expenses and general increases during the prior quarter.  The current quarter data processing expense decreased $214 thousand, or 15 percent, from the prior year third quarter as a result of a decrease in outsourced data processing expense from an acquired bank in the prior year third quarter.  The current quarter OREO expense of $1.0 million was a decrease of $330 thousand from the prior quarter and included $559 thousand of operating expense, $452 thousand of fair value write-downs, and $37 thousand of loss from the sales of OREO.  Current quarter other expenses of $10.7 million decreased by $1.7 million, or 14 percent, from the prior quarter primarily from expenses connected with equity investments in New Market Tax Credits (“NMTC”) projects and conversion related expenses which were incurred in the second quarter of 2015.  The NMTC expenses were more than offset by the tax benefits included in federal income tax expense during the second quarter of 2015 which was the reason for the increase of $1.8 million in federal and state income tax during the current quarter.

Efficiency Ratio

The efficiency ratio for the current quarter was 54.32 percent compared to 55.91 percent in the prior quarter.  The  1.59 percent decrease in efficiency ratio resulted from decreases in expenses associated with NMTC projects and increases in net interest income primarily from volume increases in commercial loans and investment securities.  The current quarter efficiency ratio of 54.32 percent compares to 53.87 percent in the prior year third quarter.  The 45 basis point increase in efficiency ratio resulted from increases in non-interest expense driven by increased compensation and other operational expenses, which outpaced the increases in net interest income from an increase in earning assets.

Operating Results for Nine Months ended September 30, 2015Compared to September 30, 2014

Income Summary

	Nine Months ended								$ Change				% Change
(Dollars in thousands)	Sep 30,  2015				Sep 30,  2014
Net interest income
Interest income	$	236,470			$	223,740			$	12,730			6	%
Interest expense	22,060				19,598				2,462				13	%
Total net interest income	214,410				204,142				10,268				5	%
Non-interest income
Service charges, loan fees, and other fees	45,631				43,656				1,975				5	%
Gain on sale of loans	20,356				14,373				5,983				42	%
Loss on sale of investments	(124		)		(160		)		36				(23	)%
Other income	8,431				8,455				(24		)		—	%
Total non-interest income	74,294				66,324				7,970				12	%
	$	288,704			$	270,466			$	18,238			7	%
Net interest margin (tax-equivalent)	3.99		%		4.00		%

Net Interest Income

Interest income for the first nine months of the current year increased $12.7 million, or 6 percent, from the prior year first nine months and was principally due to an increase in income from commercial loans.  Current year interest income of $122 million on commercial loans increased $14.2 million, or 13 percent, from the prior year first nine months and was primarily the result of an increased volume of commercial loans.  Current year interest income of $67.4 million on investment securities decreased $3.6 million, or 5 percent, over the same period last year, as a result of a decreased rate on investment securities, although the tax effective yield adjustment reduced this decrease to $140 thousand.

Interest expense for the first nine months of the current year increased $2.5 million, or 13 percent, from the prior year first nine months and was primarily due to the interest expense associated with the interest rate swap which started interest expense accruals in the fourth quarter of 2014.  The total funding cost (including non-interest bearing deposits) for the first nine months of 2015 was 40 basis points compared to 39 basis points for the first nine months of 2014.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the first nine months of 2015 was 3.99 percent, a decrease of 1 basis point from the prior year first nine months net interest margin of 4.00 percent.  The 1 basis point reduction was attributable to a combination of items including an increase in interest expense from the interest rate swaps which was partially offset by increases in higher yielding earning assets.

Non-interest Income

Non-interest income of $74.3 million for the first nine months of 2015 increased $8.0 million, or 12 percent, over the same period last year.  Service charges and other fees of $45.6 million for the first nine months of 2015 increased $2.0 million, or 5 percent, from the same period last year driven by the increased number of deposit accounts.  The gains of $20.4 million on the sale of residential loans for the first nine months of 2015 increased $6.0 million, or 42 percent, from the first nine months of 2014 resulting from an increase in mortgage refinancing and purchase activity.  Other income was unchanged from the nine month period last year.  Included in other income was operating revenue of $95 thousand from OREO and gains of $775 thousand from the sales of OREO, which totaled $870 thousand for the first nine months of 2015 compared to $1.8 million for the same period in the prior year.

Non-interest Expense Summary

	Nine Months ended
(Dollars in thousands)	Sep 30,  2015				Sep 30,  2014				$ Change				% Change
Compensation and employee benefits	$	98,507			$	87,764			$	10,743			12	%
Occupancy and equipment	23,059				20,307				2,752				14	%
Advertising and promotions	6,626				5,866				760				13	%
Data processing	4,100				4,792				(692		)		(14	)%
Other real estate owned	3,182				1,675				1,507				90	%
Regulatory assessments and insurance	3,789				4,055				(266		)		(7	)%
Core deposit intangible amortization	2,206				2,095				111				5	%
Other expenses	33,085				30,427				2,658				9	%
Total non-interest expense	$	174,554			$	156,981			$	17,573			11	%

Compensation and employee benefits for the first nine months of 2015 increased $10.7 million, or 12 percent, from the same period last year due to the increased number of employees from the acquired banks, additional benefit costs and annual salary increases.  Occupancy and equipment expense increased $2.8 million, or 14 percent, as a result of increased costs associated with the CB and FNBR acquisitions and equipment expense related to additional information technology infrastructure. Outsourced data processing expense decreased $692 thousand, or 14 percent, from the prior year first nine months as a result of a decrease in conversion related expenses and outsourced data processing expense from an acquired bank.  OREO expense of $3.2 million in the first nine months of 2015 increased $1.5 million, or 90 percent, from the first nine months of the prior year.  OREO expenses tend to fluctuate based on the level of activity in various quarters.  OREO expense for the first nine months of 2015 included $1.4 million of operating expenses, $1.5 million of fair value write-downs, and $250 thousand of loss from the sales of OREO.  Other expense of $33.1 million for the first nine months of 2015 increased by $2.7 million, or 9 percent, from the first nine months of the prior year primarily due to increases in conversion and acquisition related expenses.

Provision for Loan Losses

The provision for loan losses was $1.9 million for the first nine months of 2015, an increase of $152 thousand, or 9 percent, from the same period in the prior year.  Net charged-off loans during the first nine months of 2015 were $858 thousand, a decrease of $582 thousand from the first nine months of 2014.

Efficiency Ratio

The efficiency ratio was 55.01 percent for the first nine months of 2015 and 54.03 percent for the first nine months of 2014.  The increase in the efficiency ratio resulted from compensation expense and increased costs from acquisitions outpacing the increase in net interest income and increases in gain on sale of loans.

About Glacier Bancorp, Inc.

Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 82 communities in Montana, Idaho, Utah, Washington, Wyoming and Colorado. Glacier Bancorp, Inc. is headquartered in Kalispell, Montana, and  is the parent company for Glacier Bank, Kalispell and Bank divisions First Security Bank of Missoula; Valley Bank of Helena; Big Sky Western Bank, Bozeman; Western Security Bank, Billings; and First Bank of Montana, Lewistown, all operating in Montana; as well as Mountain West Bank, Coeur d’Alene operating in Idaho, Utah and Washington; Citizens Community Bank, Pocatello, operating in Idaho; 1st Bank, Evanston, operating in Wyoming and Utah;  First Bank of Wyoming, Powell and First State Bank, Wheatland,   each operating in Wyoming; North Cascades Bank, Chelan, operating in Washington; and Bank of the San Juans, Durango, operating in Colorado.

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 market interest rates, which could adversely affect the Company’s net interest income and profitability;
• legislative or regulatory changes that adversely affect the Company’s business, ability to complete pending or prospective future acquisitions, limit certain sources of revenue, or increase cost of operations;
• 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 risks presented by 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;
• 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 the Bank divisions;
• potential interruption or breach in security of the Company’s systems; and
• the Company’s success in managing risks involved in 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.

Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Financial Condition
(Dollars in thousands, except per share data)	September 30,  2015				June 30,  2015			December 31,  2014			September 30,  2014
Assets
Cash on hand and in banks	$	104,363			120,783			122,834			109,947
Federal funds sold	2,210				—			1,025			488
Interest bearing cash deposits	136,262				234,936			318,550			171,662
Cash and cash equivalents	242,835				355,719			442,409			282,097
Investment securities, available-for-sale	2,530,994				2,361,830			2,387,428			2,398,196
Investment securities, held-to-maturity	651,822				593,314			520,997			482,757
Total investment securities	3,182,816				2,955,144			2,908,425			2,880,953
Loans held for sale	40,456				53,201			46,726			65,598
Loans receivable	4,876,419				4,807,431			4,488,095			4,459,099
Allowance for loan and lease losses	(130,768		)		(130,519	)		(129,753	)		(130,632	)
Loans receivable, net	4,745,651				4,676,912			4,358,342			4,328,467
Premises and equipment, net	185,864				186,858			179,175			178,509
Other real estate owned	26,609				26,686			27,804			28,374
Accrued interest receivable	46,786				44,563			40,587			42,981
Deferred tax asset	55,095				56,571			41,737			44,452
Core deposit intangible, net	10,781				11,501			10,900			11,617
Goodwill	130,843				130,843			129,706			129,706
Non-marketable equity securities	24,905				24,914			52,868			52,868
Other assets	71,658				66,898			67,828			64,188
Total assets	$	8,764,299			8,589,810			8,306,507			8,109,810
Liabilities
Non-interest bearing deposits	$	1,893,723			1,731,015			1,632,403			1,595,971
Interest bearing deposits	4,779,456				4,827,642			4,712,809			4,510,840
Securities sold under agreements to repurchase	441,041				408,935			397,107			367,213
FHLB advances	329,299				329,470			296,944			366,866
Other borrowed funds	6,619				6,665			7,311			7,351
Subordinated debentures	125,812				125,776			125,705			125,669
Accrued interest payable	3,641				3,790			4,155			3,058
Other liabilities	109,900				100,066			102,026			92,362
Total liabilities	7,689,491				7,533,359			7,278,460			7,069,330
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	755				755			750			750
Paid-in capital	720,639				720,073			708,356			707,821
Retained earnings - substantially restricted	345,407				330,183			301,197			309,234
Accumulated other comprehensive income	8,007				5,440			17,744			22,675
Total stockholders’ equity	1,074,808				1,056,451			1,028,047			1,040,480
Total liabilities and stockholders’ equity	$	8,764,299			8,589,810			8,306,507			8,109,810
Number of common stock shares issued and outstanding	75,532,082				75,531,258			75,026,092			75,024,092

Glacier Bancorp, Inc.
Unaudited Condensed Consolidated Statements of Operations
	Three Months ended										Nine Months ended
(Dollars in thousands, except per share data)	September 30,  2015				June 30,  2015			September 30,  2014			September 30,  2015			September 30,  2014
Interest Income
Investment securities	$	22,437			21,959			22,794			67,355			71,002
Residential real estate loans	7,878				7,942			7,950			23,581			22,257
Commercial loans	42,137				40,698			37,387			121,857			107,696
Consumer and other loans	7,915				8,018			7,559			23,677			22,785
Total interest income	80,367				78,617			75,690			236,470			223,740
Interest Expense
Deposits	3,947				4,112			3,027			12,206			9,177
Securities sold under agreements to repurchase	261				232			225			734			627
Federal Home Loan Bank advances	2,273				2,217			2,356			6,685			7,317
Federal funds purchased and other borrowed funds	21				15			34			63			135
Subordinated debentures	807				793			788			2,372			2,342
Total interest expense	7,309				7,369			6,430			22,060			19,598
Net Interest Income	73,058				71,248			69,260			214,410			204,142
Provision for loan losses	826				282			360			1,873			1,721
Net interest income after provision for loan losses	72,232				70,966			68,900			212,537			202,421
Non-Interest Income
Service charges and other fees	14,975				14,303			14,319			42,277			40,085
Miscellaneous loan fees and charges	1,055				1,142			1,342			3,354			3,571
Gain on sale of loans	7,326				7,600			6,000			20,356			14,373
Loss on sale of investments	(31		)		(98	)		(61	)		(124	)		(160	)
Other income	2,474				2,855			2,832			8,431			8,455
Total non-interest income	25,799				25,802			24,432			74,294			66,324
Non-Interest Expense
Compensation and employee benefits	33,534				32,729			30,142			98,507			87,764
Occupancy and equipment	7,887				7,810			6,961			23,059			20,307
Advertising and promotions	2,459				2,240			2,141			6,626			5,866
Data processing	1,258				1,593			1,472			4,100			4,792
Other real estate owned	1,047				1,377			602			3,182			1,675
Regulatory assessments and insurance	1,478				1,006			1,435			3,789			4,055
Core deposit intangibles amortization	720				755			692			2,206			2,095
Other expenses	10,729				12,435			10,793			33,085			30,427
Total non-interest expense	59,112				59,945			54,238			174,554			156,981
Income Before Income Taxes	38,919				36,823			39,094			112,277			111,764
Federal and state income tax expense	9,305				7,488			9,800			25,658			27,063
Net Income	$	29,614			29,335			29,294			86,619			84,701
Basic earnings per share	$	0.39			0.39			0.40			1.15			1.14
Diluted earnings per share	$	0.39			0.39			0.40			1.15			1.14
Dividends declared per share	$	0.19			0.19			0.17			0.56			0.50
Average outstanding shares - basic	75,531,923				75,530,591			74,631,317			75,424,147			74,512,806
Average outstanding shares - diluted	75,586,453				75,565,655			74,676,124			75,469,355			74,554,263

Glacier Bancorp, Inc.
Average Balance Sheet
	Three Months ended											Nine Months ended
	September 30, 2015											September 30, 2015
(Dollars in thousands)	AverageBalance				Interest &Dividends				AverageYield/Rate			AverageBalance				Interest &Dividends				AverageYield/Rate
Assets
Residential real estate loans	$	679,037			$	7,878			4.64	%		$	673,084			$	23,581			4.67	%
Commercial loans 1	3,510,098				42,811				4.84	%		3,411,631				123,759				4.85	%
Consumer and other loans	639,155				7,915				4.91	%		625,726				23,677				5.06	%
Total loans 2	4,828,290				58,604				4.82	%		4,710,441				171,017				4.85	%
Tax-exempt investment securities 3	1,334,980				19,511				5.85	%		1,317,788				57,026				5.77	%
Taxable investment securities 4	1,930,378				10,063				2.09	%		1,894,572				30,472				2.14	%
Total earning assets	8,093,648				88,178				4.32	%		7,922,801				258,515				4.36	%
Goodwill and intangibles	142,031											141,851
Non-earning assets	384,452											385,216
Total assets	$	8,620,131										$	8,449,868
Liabilities
Non-interest bearing deposits	$	1,793,899			$	—			—	%		$	1,702,459			$	—			—	%
NOW accounts	1,387,334				264				0.08	%		1,347,658				790				0.08	%
Savings accounts	763,430				90				0.05	%		740,905				263				0.05	%
Money market deposit accounts	1,349,244				514				0.15	%		1,330,212				1,544				0.16	%
Certificate accounts	1,125,276				1,657				0.58	%		1,147,820				5,284				0.62	%
Wholesale deposits 5	190,724				1,422				2.96	%		208,640				4,325				2.77	%
FHLB advances	329,797				2,273				2.70	%		315,068				6,685				2.80	%
Repurchase agreements and  other borrowed funds	512,807				1,089				0.84	%		504,787				3,169				0.84	%
Total funding liabilities	7,452,511				7,309				0.39	%		7,297,549				22,060				0.40	%
Other liabilities	92,955											90,300
Total liabilities	7,545,466											7,387,849
Stockholders’ Equity
Common stock	755											754
Paid-in capital	720,325											717,424
Retained earnings	344,768											329,630
Accumulated other comprehensive income	8,817											14,211
Total stockholders’ equity	1,074,665											1,062,019
Total liabilities and stockholders’ equity	$	8,620,131										$	8,449,868
Net interest income (tax-equivalent)					$	80,869										$	236,455
Net interest spread (tax-equivalent)									3.93	%										3.96	%
Net interest margin (tax-equivalent)									3.96	%										3.99	%

__________1    Includes tax effect of $674 thousand and $1.9 million on tax-exempt municipal loan and lease income for the three and nine months ended September 30, 2015.2   Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale.  Non-accrual loans were included in the average volume for the entire period.3    Includes tax effect of $6.8 million and $19.1 million on tax-exempt investment security income for the three and nine months ended September 30, 2015.4    Includes tax effect of $362 thousand and $1.1 million on federal income tax credits for the three and nine months ended September 30, 2015.5    Wholesale deposits include brokered deposits classified as NOW, money market deposit and certificate accounts.

Glacier Bancorp, Inc.
Loan Portfolio by Regulatory Classification
	Loans Receivable, by Loan Type																% Change from
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015				Dec 31,  2014				Sep 30,  2014				Jun 30,  2015			Dec 31,  2014			Sep 30,  2014
Custom and owner occupied construction	$	64,951			$	56,460			$	56,689			$	59,121			15	%		15	%		10	%
Pre-sold and spec construction	46,921				45,063				47,406				44,085				4	%		(1	)%		6	%
Total residential construction	111,872				101,523				104,095				103,206				10	%		7	%		8	%
Land development	83,756				78,059				82,829				88,507				7	%		1	%		(5	)%
Consumer land or lots	98,490				98,365				101,818				99,003				—	%		(3	)%		(1	)%
Unimproved land	74,439				76,726				86,116				66,684				(3	)%		(14	)%		12	%
Developed lots for operative builders	13,697				13,673				14,126				15,471				—	%		(3	)%		(11	)%
Commercial lots	22,937				20,047				16,205				16,050				14	%		42	%		43	%
Other construction	122,347				126,966				150,075				149,207				(4	)%		(18	)%		(18	)%
Total land, lot, and other construction	415,666				413,836				451,169				434,922				—	%		(8	)%		(4	)%
Owner occupied	885,736				874,651				849,148				834,742				1	%		4	%		6	%
Non-owner occupied	739,057				718,024				674,381				658,429				3	%		10	%		12	%
Total commercial real estate	1,624,793				1,592,675				1,523,529				1,493,171				2	%		7	%		9	%
Commercial and industrial	619,688				635,259				547,910				573,617				(2	)%		13	%		8	%
Agriculture	386,523				374,258				310,785				317,506				3	%		24	%		22	%
1st lien	801,705				802,152				775,785				782,116				—	%		3	%		3	%
Junior lien	67,351				67,019				68,358				71,678				—	%		(1	)%		(6	)%
Total 1-4 family	869,056				869,171				844,143				853,794				—	%		3	%		2	%
Multifamily residential	189,944				195,674				160,426				168,760				(3	)%		18	%		13	%
Home equity lines of credit	359,605				356,077				334,788				322,442				1	%		7	%		12	%
Other consumer	154,095				147,427				133,773				139,045				5	%		15	%		11	%
Total consumer	513,700				503,504				468,561				461,487				2	%		10	%		11	%
Other	185,633				174,732				124,203				118,234				6	%		49	%		57	%
Total loans receivable, including loans held for sale	4,916,875				4,860,632				4,534,821				4,524,697				1	%		8	%		9	%
Less loans held for sale 1	(40,456		)		(53,201		)		(46,726		)		(65,598		)		(24	)%		(13	)%		(38	)%
Total loans receivable	$	4,876,419			$	4,807,431			$	4,488,095			$	4,459,099			1	%		9	%		9	%

 _______

 1 Loans held for sale are primarily 1st lien 1-4 family loans.  

Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification
	Non-performing Assets, by Loan Type													Non-AccrualLoans			AccruingLoans 90  Days or More Past  Due			OtherReal EstateOwned
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015			Dec 31,  2014			Sep 30,  2014			Sep 30,  2015			Sep 30,  2015		Sep 30,  2015
Custom and owner occupied construction	$	1,048			1,079			1,132			1,164			1,048			—			—
Pre-sold and spec construction	—				18			218			222			—			—			—
Total residential construction	1,048				1,097			1,350			1,386			1,048			—			—
Land development	17,719				20,405			20,842			24,803			7,769			—			9,950
Consumer land or lots	2,430				2,647			3,581			3,451			1,105			—			1,325
Unimproved land	12,055				12,580			14,170			13,659			8,607			—			3,448
Developed lots for operative builders	492				848			1,318			1,672			270			—			222
Commercial lots	1,631				2,050			2,660			2,697			241			—			1,390
Other construction	4,244				4,244			5,151			5,154			—			—			4,244
Total land, lot and other construction	38,571				42,774			47,722			51,436			17,992			—			20,579
Owner occupied	12,719				13,057			13,574			14,913			8,220			1,444			3,055
Non-owner occupied	3,833				3,179			3,013			3,768			2,713			—			1,120
Total commercial real estate	16,552				16,236			16,587			18,681			10,933			1,444			4,175
Commercial and industrial	5,110				5,805			4,375			4,833			4,868			199			43
Agriculture	3,114				2,769			3,074			3,430			2,499			167			448
1st lien	11,953				9,867			9,580			13,236			10,538			107			1,308
Junior lien	660				739			442			481			660			—			—
Total 1-4 family	12,613				10,606			10,022			13,717			11,198			107			1,308
Multifamily residential	—				—			440			450			—			—			—
Home equity lines of credit	6,013				4,742			6,099			3,985			5,991			22			—
Other consumer	204				164			231			222			103			45			56
Total consumer	6,217				4,906			6,330			4,207			6,094			67			56
Other	1,800				29			—			—			—			1,800			—
Total	$	85,025			84,222			89,900			98,140			54,632			3,784			26,609

Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification (continued)
	Accruing 30-89 Days Delinquent Loans,  by Loan Type																% Change from
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015				Dec 31,  2014				Sep 30,  2014				Jun 30,  2015			Dec 31,  2014			Sep 30,  2014
Custom and owner occupied construction	$	138			$	—			$	—			$	—			n/m			n/m			n/m
Pre-sold and spec construction	144				—				869				179				n/m			(83	)%		(20	)%
Total residential construction	282				—				869				179				n/m			(68	)%		58	%
Consumer land or lots	266				158				391				62				68	%		(32	)%		329	%
Unimproved land	304				755				267				1,177				(60	)%		14	%		(74	)%
Developed lots for operative builders	—				—				—				21				n/m			n/m			(100	)%
Commercial lots	—				66				21				106				(100	)%		(100	)%		(100	)%
Other construction	—				—				—				660				n/m			n/m			(100	)%
Total land, lot and other construction	570				979				679				2,026				(42	)%		(16	)%		(72	)%
Owner occupied	2,497				4,727				5,971				4,341				(47	)%		(58	)%		(42	)%
Non-owner occupied	5,529				8,257				3,131				266				(33	)%		77	%		1,979	%
Total commercial real estate	8,026				12,984				9,102				4,607				(38	)%		(12	)%		74	%
Commercial and industrial	2,774				6,760				2,915				3,376				(59	)%		(5	)%		(18	)%
Agriculture	867				353				994				152				146	%		(13	)%		470	%
1st lien	2,510				2,891				6,804				3,738				(13	)%		(63	)%		(33	)%
Junior lien	228				335				491				275				(32	)%		(54	)%		(17	)%
Total 1-4 family	2,738				3,226				7,295				4,013				(15	)%		(62	)%		(32	)%
Multifamily Residential	114				671				—				684				(83	)%		n/m			(83	)%
Home equity lines of credit	1,599				2,464				1,288				1,725				(35	)%		24	%		(7	)%
Other consumer	811				996				928				789				(19	)%		(13	)%		3	%
Total consumer	2,410				3,460				2,216				2,514				(30	)%		9	%		(4	)%
Other	41				41				1,834				19				—	%		(98	)%		116	%
Total	$	17,822			$	28,474			$	25,904			$	17,570			(37	)%		(31	)%		1	%

_______

n/m - not measurable

Glacier Bancorp, Inc.
Credit Quality Summary by Regulatory Classification (continued)
	Net Charge-Offs (Recoveries), Year-to-DatePeriod Ending, By Loan Type													Charge-Offs			Recoveries
(Dollars in thousands)	Sep 30,  2015				Jun 30,  2015			Dec 31,  2014			Sep 30,  2014			Sep 30,  2015			Sep 30,  2015
Pre-sold and spec construction	$	(34	)		(23	)		(94	)		(58	)		—			34
Land development	(293		)		(807	)		(390	)		(319	)		828			1,121
Consumer land or lots	(8		)		(77	)		375			69			306			314
Unimproved land	(152		)		(86	)		52			(186	)		—			152
Developed lots for operative builders	(72		)		(98	)		(140	)		(125	)		51			123
Commercial lots	(5		)		(3	)		(6	)		(5	)		—			5
Other construction	(1		)		(1	)		—			—			—			1
Total land, lot and other construction	(531		)		(1,072	)		(109	)		(566	)		1,185			1,716
Owner occupied	249				271			669			201			587			338
Non-owner occupied	105				109			(162	)		(44	)		116			11
Total commercial real estate	354				380			507			157			703			349
Commercial and industrial	1,011				1,007			1,069			932			1,638			627
Agriculture	(8		)		(7	)		28			(1	)		—			8
1st lien	(80		)		(49	)		372			207			39			119
Junior lien	(106		)		(129	)		183			199			79			185
Total 1-4 family	(186		)		(178	)		555			406			118			304
Multifamily residential	(318		)		(29	)		138			138			—			318
Home equity lines of credit	531				206			190			222			660			129
Other consumer	39				(3	)		226			210			367			328
Total consumer	570				203			416			432			1,027			457
Total	$	858			281			2,510			1,440			4,671			3,813

Visit our website at www.glacierbancorp.com

CONTACT:  Michael J. Blodnick
(406) 751-4701
Ron J. Copher
(406) 751-7706