1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 16, 1996 GLACIER BANCORP, INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation) 000-18911 81-0468393 --------- ---------- (Commission File Number) IRS Employer Identification No. P. O. Box 27 202 Main Street Kalispell, MT 59903-0027 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (406) 756-4200
2 ITEM 5 - OTHER EVENTS On October 16, 1996, Glacier Bancorp, Inc., Kalispell, Montana ("Glacier") issued a press release announcing Glacier's third quarter and nine months earnings for the period ended September 30, 1996, including the effect of recent legislation imposing a one-time assessment on all SAIF insured deposits to recapitalize the Federal Deposit Insurance Corporation ("FDIC") Savings Association Insurance Fund ("SAIF"). The effect of this one-time assessment resulted in a net earnings reduction of $583,000, or $.17 per share. Although the one-time payment is a substantial expense, future insurance premiums for SAIF, based on Glacier's deposit balance at September 30, 1996 and new SAIF rates, will result in an annual expense reduction of approximately $323,000 recovering the one-time cost in approximately three years. ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements - not applicable. (b) Pro forma financial information - not applicable. (c) Exhibits: (99) Press Release issued by Glacier, dated October 16, 1996 2
3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 16, 1996 GLACIER BANCORP, INC. By: /s/ James H. Strosahl ------------------------- James H. Strosahl Senior Vice President/Chief Financial Officer 3
1 [GLACIER BANCORP Letterhead] NEWS RELEASE FOR IMMEDIATE RELEASE Contact: John S. MacMillan (406) 756-4217 GLACIER BANCORP, INC. EARNINGS THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1996 OCTOBER 16, 1996 HIGHLIGHTS: - Agreement to acquire First Security Bank of Missoula - FDIC SAIF/BIF assessment disparity resolved - First supermarket branch opened in Billings - Regulatory approval for two additional branches - Earnings per share increase from operations of 9.3% year-to-date - Asset growth of 9.4% year-to-year and 6.2% year-to-date - Information now available on PR Newswire's Company News On Call QUARTER ENDED SEPTEMBER 30, 1996 Glacier Bancorp, Inc. reported net income of $838 thousand, or $.25 per share, compared with $1.533 million, or $.45 per share, for the third quarter of 1995. 1996 earnings were impacted by a one-time assessment to recapitalize the Federal Deposit Insurance Corporation (FDIC) Savings Association Insurance Fund (SAIF), and merger related expenses, resulted in net earnings reduction of $658 thousand, or $.19 per share. (See discussion of these items in the Non-interest Expense section of this release). Earnings, exclusive of the SAIF assessment and merger expenses, decreased $37 thousand or 2.4 percent of net income, and 2.6 percent of per share earnings from the very strong third quarter of 1995. The cash dividend, adjusted for the 10 percent stock dividend paid in May 1996, was increased from $.14 to $.16 per share, a 14.3 percent increase over the third quarter of 1995. Return on average assets and return on beginning equity were .82 percent and 8.74 percent, respectively, compared with returns of 1.67 percent and 17.44 percent for the third quarter of 1995. Return on average assets and return on beginning equity, exclusive of the SAIF and merger expenses, were 1.46 percent and 15.61 percent, respectively. Total assets have increased $38.284 million, or 9.4 percent, and stockholders' equity increased $2.741 million, or 7.6 percent, over the third quarter of 1995.
2 Net Interest Income Net interest income was $4.227 million, an increase of $256 thousand, or 6.4 percent, over the same quarter in 1995, primarily the result of higher net earning assets. Loan balances grew $19.157 million from a year earlier, or 6.9 percent, with consumer loans leading the way with $11.196 million, or 20.7 percent, followed by real estate loans at $9.854 million, or 5.7 percent. Total investments, including mortgage backed securities, increased $14.451 million, or 22.1% from September 30, 1995, the result of a strategy to better utilize capital in excess of loan growth requirements. The capital level was 9.4 percent of assets at September 30, 1996. Loan Loss Provision and Non-Performing Assets The third quarter provision for loan losses was $159 thousand, up from $43 thousand during the same quarter in 1995. Although non-performing assets have increased from the very low September 30, 1995 level of .17 percent of loans, to .41 percent of loans at September 30, 1996, the ratio remains well below the average of the Company's peer group which was .93 percent at June 30, 1996, the last available data. The reserve for loan losses was 173 percent of non-performing assets as of September 30, 1996. Non-interest Income Non-interest income increased $125 thousand, or 9.6 percent over the third quarter of 1995. Loan fees and service charges on deposit accounts were up $164 thousand, while other income was down $81 thousand, attributed to a reduction in insurance income. Non-interest Expense Non-interest expense increased by $1.410 million or 51.7 percent, over the third quarter of 1995. The SAIF assessment of $947 thousand was the largest portion of the increase, while merger related expenses added $114 thousand to the increase. Without the SAIF assessment and the merger expenses, non-interest expenses increased $349 thousand, or 12.8 percent. The largest portion of the increase from operations was in compensation and employee benefits which increased $205 thousand, or 15.5 percent. Expansion of the Billings loan production office into a full service branch, staffing of the first supermarket branch which opened in Billings in July, expansion of banking services to include Saturdays and holidays, other growth related staffing additions, plus normal cost increases resulted in these increased costs. First Security Bank Acquisition On August 9, 1996 the Board's of Directors of Glacier Bancorp, Inc. and Missoula Bancshares, the parent company of the First Security Bank of Missoula, Montana, approved a definitive agreement for Glacier Bancorp, Inc. to acquire all of the outstanding stock of Missoula Bancshares through an exchange of shares. Request for approval of the merger has been filed with the Federal Reserve, and shareholders of both companies will vote on the merger in mid November. The transaction is expected to close in late December of this year. Branch Approvals Approvals have been received from the Office of Thrift Supervision for a supermarket office in Hamilton, and for a stand alone office in Thompson Falls, both of which are located in western Montana. The Hamilton office is expected to open in late November.
3 SAIF Assessment The one-time SAIF assessment resolves the disparity between the FDIC Bank Insurance Fund (BIF) premiums and SAIF premiums, which was approximately $.23 per $100 of deposit for SAIF insured banks, and a minimal maintenance cost for BIF insured banks. Although the one-time payment was a substantial expense, future insurance premiums for SAIF, based on deposit balances at September 30, 1996 and new SAIF rates, will result in an annual expense reduction of approximately $323 thousand, recovering the one-time cost in approximately three years. With the ownership of the two national banks, the significant use of Federal Home Loan Bank borrowings, and other borrowed funds the one-time charge, and future premium reductions, are smaller than the typical thrift chartered organization. Company News On Call You can now receive all news releases, including quarterly earnings reports, by Fax by calling PR Newswire at 1-800-758-5804 and entering the Glacier Bancorp, Inc. extension number 107807. The same information is also available on the World Wide Web at http://www.PRNewswire.com. NINE MONTHS ENDED SEPTEMBER 30, 1996 Year to date net income decreased $268 thousand, or 6.4 percent, to $3.911 million, or $1.16 per share, from $4.179 million, or $1.24 per share, a 6.4 percent per share decrease from the same period in 1995. Return on average assets and return on beginning equity was 1.30 percent and 13.81 percent, respectively, down from 1.56 percent and 16.78 percent for 1995. Total assets have increased $23.985 million, or 6.2 percent from December 31, 1995, while stockholders' equity increased $1.158, or 3.1 percent. Equity growth was curtailed by net unrealized losses on available for sale securities. Without the one-time SAIF assessment and merger related expenses discussed above, net income increased $390 thousand, or 9.3 percent, to $4.569 million, or $1.36 per share. Adjusted return on average assets, and return on beginning equity were 1.52 percent, and 16.13 percent, respectively. Net interest income Net interest income increased $890 thousand, or 7.7 percent, over the first nine months of 1995, reflecting the growth in loans and investments. Total interest income increased $2.338 million, or 11.0 percent, while total interest expense increased $1.448 million, or 15.0 percent. The increased interest expense has narrowed the net interest margin ratio, however, the earnings power from the increased earning asset levels has resulted in the significant net interest income increase. Non-interest income Non-interest income is up from the prior year by $539 thousand, or 15.0 percent. Loan fees and service charges on deposit accounts increased by $598 thousand.
4 Non-interest expense Non-interest expense has also increased during 1996, with the total $1.890 million, or 23.6 percent greater than the same nine months in 1995. Without the SAIF assessment and merger expenses, the increase was $829 thousand, or 10.3 percent. Compensation, employee benefits and related expenses increased $581 thousand, or 15.3 percent from the first nine months of 1995 the result of establishing the full-service branch in Billings, expansion of banking services to include Saturdays and some holidays, staffing of the supermarket branch in Billings, other growth related expenses, and normal cost increases. The remainder of the increased expense is comprised of small increases in several classifications of expense. Headquartered in Kalispell, Montana, Glacier Bancorp, Inc. conducts business from Glacier Bank (eleven banking offices), First National Bank of Whitefish, and First National Bank of Eureka, all located in northwest Montana, with two Glacier Bank offices in Billings, Montana. Glacier Bancorp, Inc. stock is listed on the NASDAQ National Market System and is traded under the symbol of GBCI.
5 GLACIER BANCORP, INC. SUMMARY OF CONSOLIDATED FINANCIAL CONDITION (unaudited - dollars in thousands except per share data) At September 30, ----------------------------- ASSETS: 1996 1995 ----------- ---------- Cash and Cash Equivalents ................................. $ 16,982 17,932 Investments and Mortgage-backed Securities ................ 79,748 65,297 Net Loans ................................................. 295,658 276,501 Office Properties ......................................... 8,062 7,233 Other Assets .............................................. 11,592 9,796 ----------- ---------- TOTAL ASSETS ....................................... $ 412,042 376,759 =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY: Savings and other Deposits (Interest Bearing) ............. $ 180,310 168,293 Demand Deposits (Non-Interest Bearing) .................... 31,691 27,702 FHLB Advances and Repurchase Agreements ................... 148,313 135,148 Other Liabilities and Deferred Credits .................... 12,802 9,431 ----------- ---------- Total Liabilities ..................................... 373,116 340,574 ----------- ---------- Common Stock and Paid-in Capital .......................... 29,606 22,466 Retained Earnings ......................................... 11,045 14,390 Net unrealized gain (loss) on securities available for sale .............................................. (659) 69 Treasury stock ............................................ (1,066) (740) ----------- ---------- Total Stockholders' Equity ............................ 38,926 36,185 ----------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... $ 412,042 376,759 =========== ========== Number of shares outstanding (1) .......................... 3,374,282 3,361,271 Book Value Per Share (1) .................................. $ 11.54 10.77 SUMMARY OF CONSOLIDATED INCOME AND EXPENSE Three months ended Nine months ended --------------------------- --------------------------- INTEREST INCOME: 09/30/96 09/30/95 09/30/96 09/30/95 -------- -------- -------- -------- Interest on Real Estate Loans ........................ $ 3,778 3,709 11,148 10,877 Interest on Investments and Mortgage Backed Securities........................................ 1,626 1,315 4,810 3,522 Interest on Installment and Other Loans .............. 2,611 2,438 7,533 6,754 --------- ---------- --------- ---------- TOTAL INTEREST INCOME .............................. 8,015 7,462 23,491 21,153 INTEREST EXPENSE: Interest Expense ..................................... 3,788 3,491 11,098 9,650 --------- ---------- --------- ---------- NET INTEREST INCOME ............................... 4,227 3,971 12,393 11,503 --------- ---------- --------- ---------- NON-INTEREST INCOME: Loan Fees and Service Charges ........................ 1,231 1,067 3,446 2,848 Gains (Losses) on Sale of Investments ................ 37 (5) 37 (5) Other Income ......................................... 160 241 645 746 --------- ---------- --------- ---------- TOTAL NON-INTEREST INCOME ......................... 1,428 1,303 4,128 3,589 --------- ---------- --------- ---------- NON-INTEREST EXPENSE: General and Administrative (2) ....................... 4,137 2,727 9,899 8,009 Loan Loss Provisions ................................. 159 43 254 243 --------- ---------- --------- ---------- TOTAL NON-INTEREST EXPENSE ........................ 4,296 2,770 10,153 8,252 --------- ---------- --------- ---------- Earnings Before Income Taxes ......................... 1,359 2,504 6,368 6,840 Federal and State Income Tax Expense ................. 521 971 2,457 2,661 --------- ---------- --------- ---------- NET INCOME ................................................ $ 838 1,533 3,911 4,179 ========= ========== ========= ========== Earnings Per Common Share and Common equivalent (1) .. $ 0.25 0.45 1.16 1.24 Dividends per Common Share (1) ....................... 0.16 0.14 0.47 0.40 Weighted average shares outstanding (1) .............. 3,365,289 3,358,529 3,360,629 3,369,617 Return on average assets (annualized) ................ 0.82% 1.67% 1.30% 1.56% Return on beginning equity (annualized) .............. 8.74% 17.44% 13.81% 16.78% (1) amounts restated to illustrate effect of 10% stock dividend paid in May 1996. (2) includes $947 thousand FDIC SAIF recapitalization assessment.