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What changed in GLACIER BANCORP, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GLACIER BANCORP, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+297 added−292 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-23)

Top changes in GLACIER BANCORP, INC.'s 2024 10-K

297 paragraphs added · 292 removed · 237 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

73 edited+14 added−26 removed80 unchanged
Biggest changeWe have completed the following acquisitions during the last five fiscal years: (Dollars in thousands) Date Total Assets Gross Loans Total Deposits Altabancorp and its wholly-owned subsidiary, Altabank (collectively, "Alta") October 1, 2021 $ 4,131,662 1,902,321 3,273,819 State Bank Corp. and its wholly-owned subsidiary, State Bank of Arizona (collectively, "SBAZ") February 29, 2020 745,420 451,702 603,289 Heritage Bancorp and its wholly-owned subsidiary, Heritage Bank of Nevada (collectively, "Heritage") July 31, 2019 977,944 615,279 722,220 FNB Bancorp and its wholly-owned subsidiary, The First National Bank of Layton (collectively, "FNB") April 30, 2019 379,155 245,485 274,646 On January 31, 2024, the Company completed its acquisition of Community Financial Group, Inc., the parent company of Wheatland Bank, headquartered in Spokane, Washington.
Biggest changeWe have completed the following acquisitions during the last five fiscal years: (Dollars in thousands) Date Total Assets Gross Loans Total Deposits Rocky Mountain Bank branches (“RMB”) July 19, 2024 $ 403,052 271,569 396,690 Community Financial Group, Inc. and its wholly-owned subsidiary, Wheatland Bank (collectively, “Wheatland”) January 31, 2024 777,705 452,740 616,955 Altabancorp and its wholly-owned subsidiary, Altabank (collectively, "Alta") October 1, 2021 4,131,662 1,902,321 3,273,819 State Bank Corp. and its wholly-owned subsidiary, State Bank of Arizona February 29, 2020 745,420 451,702 603,289 On January 13, 2025, the Company announced the signing of a definitive agreement to acquire Bank of Idaho Holding Co., the parent company of Bank of Idaho.
Descriptions of statutory or regulatory provisions do not purport to be complete and are qualified by reference to those provisions. These statutes and regulations, as well as related policies, continue to be subject to change by Congress, state legislatures, and federal and state regulators.
Descriptions of statutory or regulatory provisions do not purport to be complete and are qualified by reference to those provisions. These statutes and regulations, as well as related regulatory policies, continue to be subject to change by Congress, state legislatures, and federal and state regulators.
This means that the Company is required to commit, as necessary, capital and resources to support the Bank, including at times when the Company may not be in a financial position to provide such resources or 7 when it may not be in the Company's or its shareholders' best interests to do so.
This means that the Company is required to commit, as necessary, capital and 7 resources to support the Bank, including at times when the Company may not be in a financial position to provide such resources or when it may not be in the Company's or its shareholders' best interests to do so.
The information security program must be designed to ensure the security and confidentiality of customer information, protect against any unanticipated threats or hazards to the security or integrity of such information, protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer, and ensure the proper disposal of customer and consumer information.
The information security program must be designed to ensure the security and confidentiality of customer information, protect against any unanticipated threats or hazards to the security or integrity of such information, protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer, and ensure the proper disposal of consumer information.
The FDIC may terminate the deposit insurance of any insured depository institution if the FDIC determines after a hearing that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order, or any condition imposed by an agreement with the FDIC.
The FDIC may terminate the deposit insurance of any insured depository institution, after a hearing, if the FDIC determines that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, order, or any condition imposed by an agreement with the FDIC.
Several states have regulations requiring certain financial institutions to implement cybersecurity programs and many states, including Montana, have also implemented or recently modified their data breach notification, information security and data privacy requirements. We expect this trend of state-level activity in those areas to continue, and are continually monitoring developments in the states in which our customers are located.
Several states also have regulations requiring certain financial institutions to implement cybersecurity programs and many states, including Montana, have also implemented or recently modified their data breach notification, information security and data privacy requirements. We expect this trend of state-level activity in those areas to continue, and are continually monitoring developments in the states in which our customers are located.
We have developed several programs to encourage a safe and healthy workplace, including: • GBCI Injury and Illness Prevention Program • Work-life Balance Employee Assistance Program (“EAP”) • WellSteps program offering assessments, goal setting tools, activities, incentives, and rewards • The appointment of Safety & Wellness Ambassadors • Quarterly Wellness Campaign • Workstation Ergonomics Assessments Through our Injury and Illness Prevention Program, we have established protocols for minimizing work place injuries and incidents.
We have developed several programs to encourage a safe and healthy workplace, including: • GBCI Injury and Illness Prevention Program • Work-life Balance Employee Assistance Program • WellSteps program offering assessments, goal setting tools, activities, incentives, and rewards • The appointment of Safety & Wellness Ambassadors • Quarterly Wellness Campaign • Workstation Ergonomics Assessments Through our Injury and Illness Prevention Program, we have established protocols for minimizing work place injuries and incidents.
Through its open market operations in U.S. government securities, control of the discount rate applicable to borrowings, establishment of reserve requirements against certain deposits, and control of the interest rate applicable to excess reserve balances and reverse repurchase agreements, the Federal Reserve influences the availability and cost of money and credit and, ultimately, a range of economic variables including employment, output, and the prices of goods and services.
Through its open market operations in U.S. 12 government securities, control of the discount rate applicable to borrowings, establishment of reserve requirements against certain deposits, and control of the interest rate applicable to excess reserve balances and reverse repurchase agreements, the Federal Reserve influences the availability and cost of money and credit and, ultimately, a range of economic variables including employment, output, and the prices of goods and services.
The imposition of liquidity requirements in connection with these rules could also cause the Bank to increase its holdings of liquid assets, change its business strategy, and make other changes to the terms of its funding. Regulatory Oversight and Examination Inspections. The Federal Reserve conducts periodic inspections of bank holding companies.
The imposition of liquidity requirements in connection with these rules could also cause the Bank to increase its holdings of liquid assets, change its business strategy, and make other changes to the terms of its funding. 10 Regulatory Oversight and Examination Inspections. The Federal Reserve conducts periodic inspections of bank holding companies.
The bank divisions operate under separate names, management teams and advisory directors and include the following: • Glacier Bank (Kalispell, Montana) with operations in Montana; • First Security Bank of Missoula (Missoula, Montana) with operations in Montana; • Valley Bank of Helena (Helena, Montana) with operations in Montana; • First Security Bank (Bozeman, Montana) with operations in Montana; • Western Security Bank (Billings, Montana) with operations in Montana; • First Bank of Montana (Lewistown, Montana) with operations in Montana; • Mountain West Bank (Coeur d’Alene, Idaho) with operations in Idaho and Washington; • Citizens Community Bank (Pocatello, Idaho) with operations in Idaho; • First Bank (Powell, Wyoming) with operations in Wyoming; • First State Bank (Wheatland, Wyoming) with operations in Wyoming; • North Cascades Bank (Chelan, Washington) with operations in Washington; • First Community Bank Utah (Layton, Utah) with operations in Utah; • Altabank (American Fork, UT) with operations in Utah and Idaho; • Bank of the San Juans (Durango, Colorado) with operations in Colorado; • Collegiate Peaks Bank (Buena Vista, Colorado) with operations in Colorado; • The Foothills Bank (Yuma, Arizona) with operations in Arizona; and • Heritage Bank of Nevada (Reno, NV) with operations in Nevada.
The bank divisions operate under separate names, management teams and advisory directors and include the following: • Glacier Bank (Kalispell, Montana) with operations in Montana; • First Security Bank of Missoula (Missoula, Montana) with operations in Montana; • Valley Bank (Helena, Montana) with operations in Montana; • First Security Bank (Bozeman, Montana) with operations in Montana; • Western Security Bank (Billings, Montana) with operations in Montana; • First Bank of Montana (Lewistown, Montana) with operations in Montana; • Mountain West Bank (Coeur d’Alene, Idaho) with operations in Idaho and Washington; • Citizens Community Bank (Pocatello, Idaho) with operations in Idaho; • First Bank (Powell, Wyoming) with operations in Wyoming; • First State Bank (Wheatland, Wyoming) with operations in Wyoming; • Wheatland Bank (Chelan, Washington) with operations in Washington; • First Community Bank Utah (Layton, Utah) with operations in Utah; • Altabank (American Fork, UT) with operations in Utah and Idaho; • Bank of the San Juans (Durango, Colorado) with operations in Colorado; • Collegiate Peaks Bank (Buena Vista, Colorado) with operations in Colorado; • The Foothills Bank (Yuma, Arizona) with operations in Arizona; and • Heritage Bank of Nevada (Reno, NV) with operations in Nevada.
The Company is a publicly-traded company and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol: GBCI. We provide a full range of banking services to individuals and businesses from 221 locations in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada through our wholly-owned bank subsidiary, Glacier Bank (“Bank”).
The Company is a publicly-traded company and its common stock trades on the New York Stock Exchange (“NYSE”) under the symbol: GBCI. We provide a full range of banking services to individuals and businesses from 227 locations in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada through our wholly-owned bank subsidiary, Glacier Bank (“Bank”).
Notably, the Federal Reserve's rules set a maximum permissible interchange fee, among other requirements. We have been subject to the interchange fee cap since July 1, 2019. In October 2023, the Federal Reserve requested comments on a proposed rule that would lower the interchange fee cap and establish a regular process for updating the cap every other year going forward.
Notably, the Federal Reserve's rules set a maximum permissible interchange fee, among other requirements. We have been subject to the interchange fee cap since 2019. In October 2023, the Federal Reserve requested comments on a proposed rule that would lower the interchange fee cap and establish a regular process for updating the cap every other year going forward.
As a publicly 11 reporting company with the SEC, the Company is subject to the requirements of the SOX Act and related rules and regulations issued by the SEC and the NYSE.
As a publicly reporting company with the SEC, the Company is subject to the requirements of the SOX Act and related rules and regulations issued by the SEC and the NYSE.
Management is not aware of any existing circumstances that would result in termination of the Bank's deposit insurance. Insurance of Deposit Accounts . The Dodd-Frank Act permanently increased FDIC deposit insurance from $100,000 to $250,000 per depositor. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.
Management is not aware of any existing circumstances that would result in termination of the Bank's deposit insurance. FDIC Insured Deposits . The Dodd-Frank Act permanently increased FDIC deposit insurance from $100,000 to $250,000 per depositor. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.
In October 2023, federal bank regulators issued a rule to strengthen and modernize the CRA in several ways (e.g., to encourage banks to expand access to banking services, adapt to internet and mobile banking usage, improve clarity and consistency in the application of the CRA regulations, and to tailor CRA evaluations to the size and type of the bank being evaluated.
In 2023, federal bank regulators issued a final rule to strengthen and modernize the CRA in several ways (e.g., to encourage banks to expand access to banking services, adapt to internet and mobile banking usage, improve clarity and consistency in the application of the CRA regulations, and to tailor CRA evaluations to the size and type of the bank being evaluated).
Federal law 1) sets forth circumstances under which officers or directors of a bank may be removed by the bank's federal supervisory agency; 2) as discussed above, places restraints on lending by a bank to its executive officers, directors, principal shareholders, and their related interests; and 3) generally prohibits management personnel of a bank from serving as directors or in other management positions of another financial institution whose assets exceed a specified amount or which has an office within a specified geographic area. 8 Safety and Soundness Standards .
Federal law 1) sets forth circumstances under which officers or directors of a bank may be removed by the bank's federal supervisory agency; 2) as discussed above, places restraints on lending by a bank to its executive officers, directors, principal shareholders, and their related interests; and 3) generally prohibits management personnel of a bank from serving as directors or in other management positions of another financial institution whose assets exceed a specified amount or has an office within a specified geographic area.
As of December 31, 2023, the Company and its subsidiaries were not engaged in any operations in foreign countries. 4 Recent Acquisitions Our strategy is to profitably grow our business through internal growth and selective acquisitions. We continue to look for profitable expansion opportunities primarily in existing and new markets in the Rocky Mountain and Western states.
As of December 31, 2024, the Company and its subsidiaries were not engaged in any operations in foreign countries. 4 Recent Acquisitions Our strategy is to profitably grow our business through internal growth and selective acquisitions. We continue to look for expansion opportunities primarily in existing and new markets in the Rocky Mountain and Western states.
The Dodd-Frank Act repealed the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts. Consumer Financial Protection Bureau. The Dodd-Frank Act established the CFPB and empowered it to exercise broad rulemaking, supervision, and enforcement authority for a wide range of consumer protection laws.
The Dodd-Frank Act repealed the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts. Consumer Financial Protection Bureau. The Dodd-Frank Act established the CFPB and empowered it to exercise broad rule making, supervision, and enforcement authority for a wide range of consumer protection laws.
We also encourage employee growth and development in a variety of ways, including through formal and informal training, relationships with colleagues and internal mentors, and by making a variety of resources available.
We also encourage employee growth and development in a variety of ways, including through formal and informal training, continuing education, relationships with colleagues and internal mentors, and by making a variety of resources available.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company includes the parent holding company and the Bank. As of December 31, 2023, the Bank consists of seventeen bank divisions and a corporate division.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company includes the parent holding company and the Bank. As of December 31, 2024, the Bank consists of seventeen bank divisions and a corporate division.
In addition, we are also subject to regulation and direct supervision by the Consumer Financial Protection Bureau (“CFPB”) which is empowered to exercise broad rulemaking, supervision, and enforcement authority for a wide range of consumer protection laws. Federal and State Bank Holding Company Regulation General.
In addition, we are also subject to regulation and direct supervision by the Consumer Financial Protection Bureau (“CFPB”) which has been empowered to exercise broad rulemaking, supervision, and enforcement authority for a wide range of consumer protection laws. Federal and State Bank Holding Company Regulation General.
Percent of deposits are based on the FDIC summary of deposits survey as of June 30, 2023 and does not include any bank division acquired after such date.
Percent of deposits are based on the FDIC summary of deposits survey as of June 30, 2024 and does not include any bank division acquired after such date.
The Bank is subject to primary supervision, periodic examination, and regulation of the FDIC and the MT Division of Banking. These agencies have the authority to prohibit the Bank from engaging in what they believe constitute unsafe or unsound banking practices.
The Bank is subject to primary supervision, periodic examination, and regulation by the FDIC and the MT Division of Banking. These agencies have the authority to prohibit the Bank from engaging in what they believe constitutes unsafe or unsound banking practices.
These extensions of credit 1) must be made on substantially the same terms (including interest rates and collateral) and follow credit underwriting procedures that are at least as stringent as those prevailing at the time for comparable transactions with persons not related to the lending bank; and 2) must not involve more than the normal risk of repayment or present other unfavorable features.
These extensions of credit 1) must be made on substantially the same terms (including interest rates and collateral); 2) follow credit underwriting procedures that are at least as stringent as those prevailing at the time the credit is underwritten for comparable transactions with persons not related to the lending bank; and 3) must not involve more than the normal risk of nonpayment or present other unfavorable features.
The FDIC determines the amount of insurance premiums based on the financial institutions’ deposit base and the applicable assessment rate. The Dodd-Frank Act redefined the assessment base as the average consolidated total assets less average tangible equity capital of a financial institution.
The FDIC determines the amount of the quarterly assessment based on the financial institutions’ deposit base and the applicable assessment rate. The Dodd-Frank Act redefined the assessment base as the average consolidated total assets less average tangible equity capital of a financial institution.
Generally, the GLBA 1) repealed historical restrictions on preventing banks from affiliating with securities firms; 2) provided a uniform framework for the activities of banks, savings institutions, and their holding companies; 3) broadened the activities that may be conducted by national banks and banking subsidiaries of bank holding companies; 4) provided an enhanced framework for protecting the privacy of consumer information and requires notification to consumers of bank privacy policies; and 5) addressesed a variety of other legal and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions.
Generally, the GLBA 1) repealed historical restrictions on preventing banks from affiliating with securities firms; 2) provided a uniform framework for the activities of banks, savings institutions, and their holding companies; 3) broadened the activities that may be conducted by national banks and banking subsidiaries of bank holding companies; 4) provided an enhanced framework for protecting the privacy of consumer information, and established the requirement to notify consumers of bank privacy policies; and 5) addressed a variety of other legal and regulatory issues affecting both day-to-day operations and long-term activities of financial institutions.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) further extends the definition of an “affiliate” and treats credit exposure arising from derivative transactions, securities lending, and borrowing transactions as covered transactions under the regulations.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) further expanded the definition of an “affiliate” and included credit exposure arising from derivative transactions, securities lending, and borrowing transactions as covered transactions under the regulations.
In general, this regulatory framework is designed to protect depositors, the federal Deposit Insurance Fund (“DIF”), and the federal and state banking system as a whole, rather than specifically for the protection of shareholders. Note that this section is not intended to summarize all laws and regulations applicable to us.
In general, this regulatory framework is designed to protect depositors, the federal Deposit Insurance Fund (“DIF”), and the federal and state banking systems as a whole, rather than to specifically protect shareholders. Note that this section is not intended to summarize all laws and regulations applicable to us.
Additional information regarding Board committees is set forth under the heading “Meetings and Committees of the Board of Directors - Committees and Committee Membership” in the Company’s 2024 Annual Meeting Proxy Statement (“Proxy Statement”) and is incorporated herein by reference.
Additional information regarding Board committees is set forth under the heading “Meetings and Committees of the Board of Directors - Committees and Committee Membership” in the Company’s 2025 Annual Meeting Proxy Statement (“2025 Proxy Statement”) and is incorporated herein by reference.
The application of the Final Rules may result in lower returns on invested capital, require the raising of additional capital or require regulatory action if the Bank were unable to comply with such requirements.
The application of these regulations may result in lower returns on invested capital, require the raising of additional capital or require regulatory action if the Bank were unable to comply with such requirements.
It also 1) expands the scope of covered transactions required to be collateralized; 2) requires collateral to be maintained at all times for covered transactions required to be collateralized; and 3) places limits on acceptable collateral.
It also 1) expanded the scope of covered transactions required to be collateralized; 2) requires collateral to be maintained at all times for covered transactions required to be collateralized; and 3) placed limits on acceptable collateral.
The Patriot Act also includes provisions providing the government with power to investigate terrorism, including expanded government access to bank account records. Regulators are directed to consider a bank holding company’s and a bank’s effectiveness in combating money laundering when reviewing and ruling on applications under the BHCA and the Bank Merger Act.
The Patriot Act also grants the government power to investigate terrorism, including expanded government access to bank account records. Regulators are directed to consider a bank holding company’s and a bank’s effectiveness in combating money laundering when 11 reviewing and ruling on applications under the BHCA and the Bank Merger Act.
For select management-level employees, we also offer our Short and Long-Term Incentive Plans, which are cash and equity-based compensation plans, respectively, that are designed to encourage achievement of short and long-term financial goals as our determined by the Company’s Board of Directors (the “Board”) from time to time, and to further retention through long-term vesting of certain awards earned.
For select management-level employees, we also offer our Long-Term Incentive Plans, which is an equity-based compensation plan that is designed to encourage achievement of long-term financial goals as our determined by the Company’s Board of Directors (the “Board”) from time to time, and to further retention through long-term vesting of certain awards earned.
The FDIC’s rules (as amended by the Final Rules) contain other capital classification categories, such as “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized,” each of which are based on differing capital ratios. Undercapitalized institutions are subject to certain mandatory restrictions, including on capital distributions and growth. Significantly undercapitalized and critically undercapitalized institutions are subject to additional restrictions.
The regulations contain other capital classification categories, such as “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized,” each of which are based on differing capital ratios. Undercapitalized institutions are subject to certain mandatory restrictions, including on capital distributions and growth. Significantly undercapitalized and critically undercapitalized institutions are subject to additional restrictions.
In addition to guidance and standards implemented by banking regulators, in July 2023, the SEC adopted final rules requiring an annual disclosure of registrants’ cybersecurity risk management, strategy, and governance. Additionally, registrants are required to disclose material cybersecurity incidents, including the nature, scope, timing, and impact, within four business days of the incident.
In addition to guidance and standards implemented by banking regulators, the SEC requires an annual disclosure of registrants’ cybersecurity risk management, strategy, and governance. Additionally, registrants are required to disclose material cybersecurity incidents, including the nature, scope, timing, and impact, within four business days of the incident.
The Bank is subject to FDIC regulations implementing the privacy provisions of the GLBA. Amont other requireemnts, these regulations require the Bank to disclose its privacy policy, including informing consumers of the Bank's information sharing practices and their right to opt out of certain practices. Deposit Insurance FDIC Insured Deposits.
The Bank is subject to FDIC regulations implementing the privacy provisions of the GLBA. These regulations require the Bank to disclose its privacy policy, including informing consumers of the Bank's information sharing practices and their right to opt out of certain practices, among other requirements. Deposit Insurance FDIC Insurance.
The disclosure requirements went into effect in December of 2023. Environmental, Social and Governance Bank regulatory agencies and the SEC have shown increased interest in environmental, social and governance matters (“ESG”) and expressed an intent to increase related regulatory oversight of companies efforts to address how ESG issues may affect their businesses.
Environmental, Social and Governance Bank regulatory agencies and the SEC have shown increased interest in environmental, social and governance matters (“ESG”) and expressed an intent to increase related regulatory oversight of companies efforts to address how ESG issues may affect their businesses.
Financial Statements and Supplementary Data.” The Final Rules also contain revisions to the prompt corrective action framework, which is designed to place restrictions on an insured depository institution if its capital levels begin to show signs of weakness.
Financial Statements and Supplementary Data.” The Federal regulations also address the prompt corrective action framework, which is designed to place restrictions on an insured depository institution if its capital levels begin to show signs of weakness.
Changes in statutes, regulations, or regulatory policies applicable to us (including their interpretation or implementation) cannot be predicted and could have a material effect on our business and operations. Numerous changes to the statutes, regulations, and regulatory policies applicable to us have been made or proposed in recent years.
Changes in statutes, regulations, or regulatory policies applicable to us (including their interpretation or implementation) cannot be predicted and could have a material effect on our business and operations.
In addition we offer a Profit Sharing and 401(k) Plan, stock-based compensation plan, deferred compensation plans, and a supplemental executive retirement plan for certain employees (“SERP”).
In addition we offer a Profit Sharing and 401(k) Plan, short-term cash incentive plan, deferred compensation plans, and a supplemental executive retirement plan for certain employees (“SERP”).
Certain non-capital safety and soundness standards are also imposed upon banks. These standards cover, among other things, internal controls, information systems and internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, such other operational and managerial standards as the agency determines to be appropriate, and standards for asset quality, earnings, and stock valuation.
These standards cover, among other things, internal controls, information systems and internal audit systems, loan documentation, credit underwriting, 8 interest rate exposure, asset growth, compensation, fees and benefits, other operational and managerial standards as the agency determines to be appropriate, and standards for asset quality, earnings, and stock valuation.
Recent and Proposed Legislation The economic and political environment of the past several years has led to a number of proposed legislative, governmental, and regulatory initiatives that may significantly impact the banking industry.
Recent and Proposed Legislation The economic and political environment of the past several years has led to a number of proposed legislative, governmental, and regulatory initiatives that may significantly impact the banking industry. Other regulatory initiatives by federal and state government agencies may also significantly impact our business.
Non-depository financial service institutions, primarily in the securities, insurance and retail industries, have also become competitors for retail savings, investment funds and lending activities.
Competition is also increasing for deposit and lending services from internet-based competitors. Non-depository financial service institutions, primarily in the securities, insurance and retail industries, have also become competitors for retail savings, investment funds and lending activities.
Among other types of computer-security incidents, a “notification incident” includes one that has materially disrupted or degraded the banking organization’s ability to carry out banking operations to a material portion of its customer base in the ordinary course of business. State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations.
Among other types of computer-security incidents, a “notification incident” includes one that has materially disrupted or degraded the banking organization’s ability to carry out banking operations to a material portion of its customer base in the ordinary course of business.
Number of Locations Number of Counties Served Percent of Deposits Montana 70 18 27.1 % Idaho 30 11 8.5 % Utah 38 9 0.3 % Washington 13 6 5.7 % Wyoming 19 10 15.1 % Colorado 27 14 1.7 % Arizona 17 7 0.8 % Nevada 7 3 6.0 % Total 221 78 5 Human Capital As of December 31, 2023, we employed 3,358 persons, 3,095 of whom were employed full time.
Number of Locations Number of Counties Served Percent of Deposits Montana 68 20 25.9 % Idaho 30 11 8.6 % Utah 38 9 0.3 % Washington 25 11 5.8 % Wyoming 19 10 15.8 % Colorado 23 14 1.8 % Arizona 17 7 0.9 % Nevada 7 3 6.3 % Total 227 85 5 Human Capital As of December 31, 2024, we employed 3,595 persons, 3,313 of whom were employed full time.
The FDIC may also prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious risk to the DIF. Safety and Soundness.
The FDIC may also prohibit any insured institution from engaging in any activity determined by regulation or order to pose a serious risk to the DIF. The Bank is not in default on any of its federal deposit insurance assessments. Safety and Soundness.
Anti-Money Laundering and Anti-Terrorism The Bank Secrecy Act (“BSA”) requires all financial institutions to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism.
Anti-Money Laundering and Anti-Terrorism The Bank Secrecy Act, as amended by the Anti-Money Laundering Act of 2020 (“BSA”), requires all financial institutions to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism, including the development of standards for testing technology and internal processes for BSA compliance.
Failure to comply with these laws and regulations may subject the Bank to various penalties, including but not limited to enforcement actions, injunctions, fines, civil monetary penalties, criminal penalties, punitive damages, and the loss of certain contractual rights. Recently, the CFPB has been focusing its enforcement efforts on certain types of fees commonly charged by financial institutions.
Nevertheless, failure to comply with these laws and regulations may subject the Bank to various penalties, including but not limited to enforcement actions, injunctions, fines, civil monetary penalties, criminal penalties, punitive damages, and the loss of certain contractual rights.
Department of the Treasury, issued the priorities for anti-money laundering and countering the financing of terrorism policy required under the AMLA. The priorities include: corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing. In December 2023, FinCEN issued a Final Rule implementing the access and safeguard provisions of the Corporate Transparency Act (the “Access Rule”).
Department of the Treasury, administers the BSA and determines the policy priorities for anti-money laundering and countering the financing of terrorism. The priorities include: corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking, and proliferation financing. FinCEN is also responsible for implementing the access and safeguard provisions of the Corporate Transparency Act.
Continued efforts to monitor and comply with new regulatory requirements add to the complexity and cost of our business and operations. The Company is subject to regulation and supervision by the Federal Reserve and the Montana Department of Administration’s Division of Banking and Financial Institutions (“MT Division of Banking”) and regulation generally by the State of Montana.
The Company is subject to regulation and supervision by the Federal Reserve and the Montana Department of Administration’s Division of Banking and Financial Institutions (“MT Division of Banking”) and regulation generally by the State of Montana.
For additional information regarding trust preferred securities and their impact to regulatory capital, see Note 12 to the Consolidated Financial Statements in “Item 8.
The regulations change the risk-weights of certain assets for purposes of the risk-based capital ratios and phase out certain instruments as qualifying capital. For additional information regarding trust preferred securities and their impact to regulatory capital, see Note 12 to the Consolidated Financial Statements in “Item 8.
However, the examination authority of the Federal Reserve and the FDIC allows them to examine supervised institutions as frequently as deemed necessary based on the condition of the institution or as a result of certain triggering events. Because our total consolidated assets exceed $10 billion, we are also subject to the direct supervision of the CFPB. Commercial Real Estate Ratios.
However, the examination authority of the Federal Reserve and the FDIC allows them to examine supervised institutions as frequently as deemed necessary based on the condition of the institution or as a result of certain triggering events.
These efforts have included requesting public input on fees charged for deposit accounts, credit cards, and other financial products, issuing advisory opinions, and various enforcement actions and penalties against a number of financial institutions for practices related to banking fees.
These efforts have included issuing final rules on a number of issues including on fees charged for deposit accounts, credit cards, and other financial products, issuing advisory opinions, pursuing litigation against financial institutions for lack of anti-fraud measures on peer-to-peer payment platforms, and various enforcement actions and penalties against a number of financial institutions for practices related to fraud, credit reporting failures, and discriminatory lending practices.
We strive to provide a safe and gratifying workplace for our employees. We promote and support a work environment free from any form of harassment, discrimination, bullying, or retaliation, and we are committed to principles of equal employment opportunity and to taking affirmative steps to hire and advance qualified minorities, women, individuals with disabilities, and protected veterans.
We strive to provide a safe and gratifying workplace for our employees. We promote and support a work environment free from any form of harassment, discrimination, bullying, or retaliation.
The BSA also sets forth various recordkeeping and reporting requirements (such as reporting suspicious activities that might signal criminal activity) and certain due diligence and "know your customer" documentation requirements.
The BSA also sets forth various recordkeeping and reporting requirements (such as reporting suspicious activities that might signal criminal activity) and certain due diligence and "know your customer" documentation requirements. The BSA provides for sanctions or certain BSA violations and establishes BSA whistleblower incentives and protections. The Financial Crimes Enforcement Network (“FinCEN”), a bureau of the U.S.
The Bank received a “satisfactory” rating in its most recent CRA examination. Insider Credit Transactions . Banks are subject to certain restrictions on extensions of credit to executive officers, directors, principal shareholders, and their related interests.
Banks are subject to certain restrictions on extensions of credit to executive officers, directors, principal shareholders, and their related interests.
In recent years, examination and enforcement by federal and state banking agencies for compliance with consumer protection laws and regulations have increased and become more intense.
While in recent years, examination and enforcement by federal and state banking agencies for compliance with consumer protection laws and regulations have increased and become more intense, federal regulators are facing an increasing number of third-party legal challenges to their enforcement actions and rule making.
See Note 14 in the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for detailed information regarding employee benefit plans and eligibility requirements. Board of Directors and Committees The Board has the ultimate authority and responsibility for overseeing risk management at the Company.
See Note 14 in the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for detailed information regarding employee benefit plans and eligibility requirements. Board of Directors and Committees The Board has established, among others, an Audit Committee, a Compensation and Human Capital Committee, a Nominating/Corporate Governance Committee, and a Risk Oversight Committee.
In November 2021, the federal banking agencies adopted a Final Rule, with compliance required by May 1, 2022, establishing new notification requirements for banking organizations. The rule requires banks to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” rising to the level of a “notification incident,” has occurred.
Federal regulations require banks to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” rising to the level of a “notification incident,” has occurred.
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“Patriot Act”), intended to combat terrorism, was renewed with certain amendments in 2006.
The Reporting Rule has been subject to a number of legal challenges and the timing of its full implementation is uncertain. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as renewed and amended in 2006, (“Patriot Act”) was enacted to combat terrorism.
Failure to comply with this buffer requirement may result in constraints on capital distributions ( e.g. , dividends, equity repurchases, and certain bonus compensation for executive officers). The Final Rules change the risk-weights of certain assets for purposes of the risk-based capital ratios and phase out certain instruments as qualifying capital.
The regulations also require a capital conservation buffer designed to absorb losses during periods of economic stress. Failure to comply with this buffer requirement may result in constraints on capital distributions ( e.g. , dividends, equity repurchases, and certain bonus compensation for executive officers).
The Access Rule allows FinCEN to disclose beneficial ownership information to financial institutions to facilitate compliance with customer due diligence requirements and anti-money laundering obligations under the BSA. Financial Services Modernization The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (“GLBA”) brought about significant changes to the laws affecting banks and bank holding companies.
We have established comprehensive compliance programs designed to comply with the requirements of the BSA and the Patriot Act. Financial Services Modernization The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (“GLBA”) brought about significant changes to the laws affecting banks and bank holding companies.
The last rate increase was in July 2023, and the Federal Reserve has communicated that the economic outlook continues to be uncertain and inflation risks are present. Changes in monetary policy, including increases in the federal funds rate, can affect net interest income and margin, overall profitability, and shareholders’ equity.
The last rate decrease was in December 2024, and the Federal Reserve has communicated that economic activity has been expanding at a solid pace, the unemployment rate remains low, while inflation has eased by remains elevated. Changes in monetary policy, including increases in the federal funds rate, can affect net interest income and margin, overall profitability, and shareholders’ equity.
We cannot predict the ultimate impact of any such initiatives on our operations, competitive situation, financial conditions, or results of operations, or whether any other proposals will emerge.
We cannot predict the ultimate impact of any such initiatives on our operations, competitive situation, financial conditions, or results of operations, or whether any other proposals will emerge. Recent history has demonstrated that new legislation or changes to existing laws or regulations typically result in a greater compliance burden (and therefore increase the general costs of doing business).
We have established a comprehensive compliance system to ensure compliance with these rules. Cybersecurity The federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards, intended to enhance cyber risk management among financial institutions.
The nature and impact of future changes in monetary policies and their impact on us cannot be predicted with certainty. Cybersecurity Federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards, intended to enhance cyber risk management among financial institutions.
For additional information on the acquisition and subsequent event, see Note 23 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.” Market Area and Competition We have 221 locations, which consists of 187 branches and 34 loan or administration offices, in 78 counties within eight states including Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada.
Financial Statements and Supplementary Data.” Market Area and Competition We have 227 locations, which consist of 194 branches and 33 loan or administration offices, in 85 counties within eight states including Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada. The market area’s diversified economic base primarily focuses on tourism, construction, mining, energy, manufacturing, agriculture, service industries, and health care.
Most of these new requirements will be applicable beginning January 2026, and the remaining requirements, including data reporting requirements, will be applicable January 2027. These changes in the evaluation process and reporting requirements under the CRA could impact the Bank’s costs of compliance and rating during its next evaluation.
If and when the final rule becomes effective, changes in the evaluation process and reporting requirements under the CRA could impact the Bank’s costs of compliance and rating during its next evaluation. The Bank received a “satisfactory” rating in its most recent CRA examination. Insider Credit Transactions .
The Bank's deposits are insured under the Federal Deposit Insurance Act, up to the maximum applicable limits and are subject to deposit insurance assessments by the FDIC, which are designed to tie what banks pay for deposit insurance to the risks they pose.
The Bank's deposits are insured under the Federal Deposit Insurance Act, up to the maximum applicable limits. The Bank is subject to deposit insurance assessments by the FDIC, which contribute to the funding of the Deposit Insurance Funds (“DIF”) and are imposed on all financial institutions with insured deposits based on the risk each bank poses to the financial system.
The market area’s diversified economic base primarily focuses on tourism, construction, mining, energy, manufacturing, agriculture, service industries, and health care. The tourism industry is highly influenced by national parks, ski resorts, significant lakes and rural scenic areas. Commercial banking is a highly competitive business and operates in a rapidly changing environment.
The tourism industry is highly influenced by national parks, ski resorts, significant lakes and rural scenic areas. Commercial banking is a highly competitive business and operates in a rapidly changing environment. There are a large number of depository institutions including commercial banks, savings and loans, and credit unions in the markets in which we have locations.
The Federal Reserve has also issued a policy statement on the payment of cash dividends by bank holding companies.
Basel III is scheduled to take effect on July 1, 2025 and will include a 3-year “phase in” period (with full compliance required on or before July 1, 2028). The Federal Reserve has also issued a policy statement on the payment of cash dividends by bank holding companies.
Additionally, the FDIC has the authority to implement special assessments to recover losses to the DIF caused by systemic risks in the banking industry. The FDIC exercised this authority in connection with the systemic risk determination by federal bank regulators in March 2023 after the failures of Silicon Valley Bank and Signature Bank.
In addition, the FDIC has the authority to implement special assessments to recover losses to the DIF caused by systemic risks in the banking industry, which was last exercised in 2023 after the failures a number of large banks. No institution may pay a dividend if it is in default on its federal deposit insurance assessments.
Assessment rates are applied to the depository intuition’s base to determine payments to the DIF. The FDIC has authority to increase assessment rates, and in October 2022 adopted a Final Rule increasing initial base deposit rate schedules uniformly by two basis points starting with the first quarterly assessment period of 2023.
Assessment rates are applied to the depository intuition’s base to determine payments to the DIF. The FDIC has authority to increase assessment rates, and rates have remained unchanged since an increase in 2023.
For example, the CFPB issued an advisory opinion explaining how the CFPB may evaluate the premissibility of fees imposed on customers for making requests for information about their accounts. The Bank is closely monitoring changes to the rules related to banking fees and has established a comprehensive compliance system to ensure consumer protection. Community Reinvestment .
The Bank is closely monitoring changes (and challenges) to these laws and regulations and has established a comprehensive compliance system to ensure consumer protection. Community Reinvestment .
Removed
Effective January 31, 2024, the Company completed its acquisition of Community Financial Group, Inc. and its subsidiary, Wheatland Bank. The Wheatland Bank operations will be combined with the North Cascades Bank division, and the combined operations will begin to operate under the name Wheatland Bank in the second quarter of 2024.
Added
For additional information on recently completed acquisition and subsequent event, see Note 23 to the Consolidated Financial Statements in “Item 8.
Removed
There are a large number of depository institutions including commercial banks, savings and loans, and credit unions in the markets in which we have locations. Competition is also increasing for deposit and lending services from internet-based competitors.
Added
We are also committed to assisting with reasonable workplace accommodations for individuals with disabilities, for known limitations related to pregnancy, and for religious beliefs or practices that conflict with a job requirement.
Removed
Some aspects of risk oversight are fulfilled at the Board level, and the Board delegates other aspects of its risk oversight function to its committees. The Board has established, among others, an Audit Committee, a Compensation and Human Capital Committee, a Nominating/Corporate Governance Committee, a Compliance Committee, and a Risk Oversight Committee.
Added
Numerous changes to the statutes, regulations, and regulatory policies applicable to us have been proposed or made in recent years and the pace of change has been exacerbated by the changing political climate. Continued efforts to monitor and comply with new and changing regulatory requirements add to the complexity and cost of our business and operations.
Removed
The CFPB has issued and continues to issue numerous regulations under which we will continue to incur additional expenses in connection with our ongoing compliance obligations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe loss of key employees during acquisitions may also adversely affect our business. We anticipate that we might issue capital stock in connection with future acquisitions. Acquisitions and related issuances of stock may have a dilutive effect on earnings per share, book value per share, and the percentage ownership of current shareholders.
Biggest changeAcquisitions and related issuances of stock may have a dilutive effect on earnings per share, and book value per share, and will in any event reduce the percentage ownership of current shareholders. In acquisitions involving the use of cash as consideration, there will be an impact on our capital position.
Any future deterioration in economic conditions in the markets the Company serves could result in the following consequences, any of which could have an adverse impact, which could be material, on our business, financial condition, results of operations and prospects: 14 • Loan delinquencies may increase; • Problem assets and foreclosures may increase; • Collateral for loans made may decline in value, in turn reducing customers’ borrowing power and the Bank’s security; • Certain securities within the investment portfolio could become other-than-temporarily impaired, requiring a write-down through earnings to fair value, thereby reducing equity; • Low cost or non-interest bearing deposits may decrease; and • Demand for loan and other products and services may decrease.
Any future deterioration in economic conditions in the markets the Company serves could result in the following consequences, any of which could have an adverse impact, which could be material, on our business, financial condition, results of operations and prospects: • Loan delinquencies may increase; • Problem assets and foreclosures may increase; • Collateral for loans made may decline in value, in turn reducing customers’ borrowing power and the Bank’s security; • Certain securities within the investment portfolio could become other-than-temporarily impaired, requiring a write-down through earnings to fair value, thereby reducing equity; • Low cost or non-interest bearing deposits may decrease; and • Demand for loan and other products and services may decrease.
Substantially all of the Bank’s loans are to businesses and individuals in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada, and adverse economic conditions in these market areas could have a material adverse effect on our business, financial condition, results of operations and prospects. Deterioration in the national economy may also have an adverse effect in these markets.
Substantially all of the Bank’s loans are to businesses and individuals in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada, and adverse economic conditions in these market areas could have a material adverse effect on our business, 13 financial condition, results of operations and prospects. Deterioration in the national economy may also have an adverse effect in these markets.
Current guidance from the Federal Reserve provides, among other things, that dividends per share should not exceed earnings per share 15 measured over the previous four fiscal quarters. In certain circumstances, Montana law also places limits or restrictions on a bank’s ability to declare and pay dividends.
Current guidance from the Federal Reserve provides, among other things, that dividends per share should not exceed earnings per share measured over the previous four fiscal quarters. In certain circumstances, Montana law also places limits or restrictions on a bank’s ability to declare and pay dividends.
We are not able to anticipate or implement effective preventative measures against all security breaches of these types. Although the Bank employs detection and response mechanisms designed to contain and mitigate security incidents, early detection may be thwarted by sophisticated attacks and malware designed to avoid detection, which continue to evolve.
We may not be able to anticipate or implement effective preventative measures against all security breaches of these types. Although the Bank employs detection and response mechanisms designed to contain and mitigate security incidents, early detection may be thwarted by sophisticated attacks and malware designed to avoid detection, which continue to evolve.
Environmental laws may require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
Environmental laws may further require us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell the affected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
Further decreases in the value of these assets, or the underlying collateral, or in these borrowers’ performance or 16 financial condition, whether or not due to economic and market conditions beyond the Bank’s control, could adversely affect our business, results of operations and financial condition, perhaps materially.
Further decreases in the value of these assets, or the underlying collateral, or in these borrowers’ performance or financial condition, whether due to economic and market conditions beyond the Bank’s control or not, could adversely affect our business, results of operations and financial condition, perhaps materially.
National and global economies are constantly in flux, as evidenced by recent market volatility resulting from, among other things, the bank failures involving Silicon Valley Bank and Signature Bank, the effects of inflation, and the ever-changing landscape of the energy and medical industries.
National and global economies are constantly in flux, as evidenced by recent market volatility resulting from, among other things, the bank failures involving Silicon Valley Bank and Signature Bank in 2023, the effects of inflation, and the ever-changing landscape of the energy and medical industries.
Our future success will depend upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as create additional efficiencies in our operations.
Our future success will depend upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience and additional features, as well as create additional efficiencies in our operations.
Additionally, the Bank faces the risk of operational disruption, failure, termination or capacity constraints of any of the third parties that facilitate its business activities, including third-party service providers, exchanges, clearing agents, clearing houses or other financial intermediaries.
Additionally, the Bank faces the risk of operational disruption, failure, termination or capacity constraints of any of the third parties that facilitate its business activities, including third-party service providers, vendors, exchanges, clearing agents, clearing houses or other financial intermediaries.
Such parties could also be the source of an attack on, or breach of, the Bank’s operational systems. 18 Any failures, interruptions or security breaches in our information systems could damage our reputation, result in a loss of customer business, result in a violation of privacy or other laws, or expose us to civil litigation, regulatory fines or losses not covered by insurance.
Such parties could also be the source of an attack on, or breach of, the Bank’s operational systems. 17 Any failures, interruptions or security breaches in our information systems could damage our reputation, result in a loss of customer business, result in a violation of privacy or other laws, or expose us to civil litigation, regulatory fines or losses not covered by insurance.
The Bank attemps to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, but the bank’s efforts may not be effective in protecting the Bank from the negative impact of new laws and regulations or changes in consumer or business behavior.
The Bank attempts to take these risks into account in making lending and other decisions, including by increasing our business with climate-friendly companies, but the bank’s efforts may not be effective in protecting the Bank from the negative impact of new laws and regulations or changes in consumer or business behavior.
Information security risks for financial institutions such as the Bank have increased recently in part because of new technologies, the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions and the increased sophistication and activities of organized crime, perpetrators of fraud, hackers, terrorists and others.
Information security risks for financial institutions such as the Bank have increased recently in part because of new technologies, the use of the Internet and telecommunications technologies (including mobile devices) to conduct financial and other business transactions, and the increased sophistication and activities of organized crime, foreign actors, hackers, perpetrators of fraud, terrorists and others.
Our goodwill was not considered impaired as of December 31, 2023 and 2022; however, there can be no assurance that future evaluations of goodwill will not result in findings of impairment and write-downs, which could be material.
Our goodwill was not considered impaired as of December 31, 2024 and 2023; however, there can be no assurance that future evaluations of goodwill will not result in findings of impairment and write-downs, which could be material.
A decline in the fair value of the Bank’s investment portfolio could adversely affect earnings and capital. The fair value of the Bank’s debt securities could decline as a result of factors including changes in market interest rates, tax reform, credit quality and credit ratings, lack of market liquidity and other economic conditions.
A decline in the fair value of the Bank’s investment portfolio could adversely affect earnings and capital. The fair value of the Bank’s debt securities could decline as a result of various factors, including changes in market interest rates, tax reform, decreases in credit quality and related credit ratings, lack of market liquidity and other economic conditions.
In addition to cyber attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against financial institutions designed to disrupt key business services such as customer-facing web sites. National and international economic and geopolitical conditions may also have a negative impact in the number of cyber security threats the Bank may face.
In addition to cyber attacks or other security breaches involving the theft of sensitive and confidential information, hackers have engaged in attacks against financial institutions designed to disrupt key business services such as customer-facing web sites. National and international economic and geopolitical conditions may also increase the number of cyber security threats the Bank may face.
The payment of dividends is subject to government regulation in that regulatory authorities may prohibit banks and bank holding companies from paying dividends that would constitute an unsafe or unsound banking practice. Our ability to pay dividends is heavily based on our earnings and capital levels which currently are strong.
The payment of dividends is subject to government regulation in that regulatory authorities may prohibit banks and bank holding companies from paying dividends that would constitute an unsafe or unsound banking practice. Our ability to pay dividends is heavily based on our earnings and capital levels.
These risks include, among other things, incorrectly assessing the asset quality of a financial institution being acquired, discovering compliance or regulatory issues after the acquisition, encountering greater than anticipated cost and use of management time associated with integrating acquired businesses into our operations, and being unable to profitably deploy funds acquired in an acquisition.
These risks include, among other things, incorrectly assessing the asset quality of a financial institution being acquired, discovering compliance or regulatory issues after the acquisition, encountering greater than anticipated costs and use of management time associated with evaluating potential acquisitions and integrating acquired businesses into our operations, and being unable to profitably deploy funds acquired in an acquisition.
Emerging technologies and advances and the growth of e-commerce have lowered geographic and monetary barriers of other financial institutions, made it easier for non-depository institutions to offer products and services that traditionally were banking products and allowed non-traditional financial service providers and technology companies to compete with traditional financial service companies in providing electronic and internet-based financial solutions and services, including electronic securities trading, marketplace lending, financial data aggregation and payment processing, including real-time payment platforms.
Emerging technologies and advances and growing market acceptance of e-commerce have lowered geographic and monetary barriers to other financial institutions, made it easier for non-depository institutions to offer products and services that traditionally were banking products and services, and allowed non-traditional financial service providers and technology companies to compete with traditional financial service companies in providing electronic and internet-based financial solutions and services, including marketplace lending, financial data aggregation and payment processing, including through real-time payment platforms and electronic securities trading.
The Federal Reserve has communicated that the economic outlook continues to be uncertain, and while it has stated that rates may decrease later in 2024, there can be no assurance of the timing or amount of any future rate adjustments.
The Federal Reserve has communicated that the economic outlook continues to be uncertain, and while it has stated that rates may continue to decrease in 2025, there can be no assurance of the timing or amount of any future rate adjustments.
Acquisitions may also cause business disruptions that cause the Bank to lose customers or cause customers to remove their accounts from the Bank and move to competing financial institutions. Further, acquisitions may also disrupt the Bank's ongoing businesses or create inconsistencies in standards, controls, procedures, and policies that adversely affect relationships with employees, clients, customers, and depositors.
In addition, acquisitions may lead to business disruptions that cause the Bank to lose customers or employees to competing financial institutions. Further, acquisitions may also disrupt the Bank's ongoing businesses or create inconsistencies in standards, controls, procedures, and policies that adversely affect relationships with employees, clients, customers, and depositors.
Future economic conditions cannot be predicted, and any renewed deterioration in the economies of the nation as a whole or in our markets could have an adverse effect, which could be material, on our business, financial condition, results of operations and prospects, and could cause the market price of our stock to decline. 19 Our business is heavily dependent on the services of members of the senior management team.
Future economic conditions cannot be predicted, and any renewed deterioration in the economies of the nation as a whole or in our markets could have an adverse effect, which could be material, on our business, financial condition, results of operations and prospects, and could cause the market price of our stock to decline.
There can be no assurance we will be able to continue paying dividends on our common stock at recent levels. We may not be able to continue paying quarterly dividends commensurate with recent levels given that our ability to pay dividends on our common stock depends on a variety of factors.
We may not be able to continue paying quarterly dividends commensurate with recent levels given that our ability to pay dividends on our common stock depends on a variety of factors.
Any future deterioration in the real estate markets could adversely impact borrowers’ ability to repay loans secured by real estate and the value of real estate collateral, thereby increasing the credit risk associated with the loan portfolio.
The Bank has a high degree of concentration in loans secured by real estate. Any future deterioration in the real estate markets could adversely impact borrowers’ ability to repay loans secured by real estate and the value of our real estate collateral, thereby increasing the credit risk associated with the loan portfolio.
We may not be able to continue to grow organically or through acquisitions. Historically, we have expanded through a combination of organic growth and acquisitions.
We may not be able to continue to grow internally or through acquisitions. Historically, we have expanded through a combination of internal growth and selective acquisitions.
Our articles of incorporation include certain provisions that could make it more difficult to acquire us by means of a tender offer, a proxy contest, merger or otherwise.
We have various anti-takeover measures that could impede a takeover. Our articles of incorporation include certain provisions that could make it more difficult to acquire us by means of a tender offer, a proxy contest, merger or otherwise.
A significant portion of our loan portfolio is secured by real estate, and we could become subject to environmental liabilities with respect to one or more of these properties. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans.
We hold an interest in real estate as collateral for a significant portion of our loan portfolio, and we could become subject to environmental liabilities with respect to one or more of these properties. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans.
Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us.
Increased competition may negatively affect our earnings by creating pressure to lower prices or credit standards on our products and services requiring additional investment to improve the quality and delivery of our technology and/or reducing our market share, or affecting the willingness of our clients to do business with us. 16 Interest Rates, Operations and Risk Management Fluctuating interest rates can adversely affect profitability and shareholders’ equity.
Interest Rates, Operations and Risk Management Fluctuating interest rates can adversely affect profitability and shareholders’ equity. The Bank’s profitability is dependent to a large extent upon net interest income, which is the difference (or “spread”) between the interest earned on loans, investment securities and other interest earning assets and interest paid on deposits, borrowings, and other interest-bearing liabilities.
The Bank’s profitability is dependent to a large extent upon net interest income, which is the difference (or “spread”) between the interest earned on loans, investment securities and other interest earning assets and interest paid on deposits, borrowings, and other interest-bearing liabilities.
In acquisitions involving the use of cash as consideration, there will be an impact on our capital position. If goodwill recorded in connection with acquisitions becomes impaired, it could have an adverse impact on earnings and capital. Accounting standards require us to account for acquisitions using the acquisition method of accounting.
If goodwill recorded in connection with acquisitions becomes impaired, it could have an adverse impact on earnings and capital. Accounting standards require us to account for acquisitions using the acquisition method of accounting.
The terms and costs of these activities, or the failure of these actions to help stabilize the financial markets, asset prices, market liquidity and a continuation or worsening of current financial market and economic conditions could materially and adversely affect our business, financial condition, results of operations, and the trading price of our common stock.
The terms and costs of these activities, or the failure of these actions to help stabilize the financial markets, asset prices, market liquidity and a continuation or worsening of current financial market and economic conditions could materially and adversely affect our business, financial condition, results of operations, and the trading price of our common stock. 18 Increasing regulatory focus on privacy and security issues and expanding laws and regulatory requirements could impact our business models and expose us to increased liability.
We may not be able to effectively implement new technology-driven products or services, or be successful in marketing these products and services. Additionally, the implementation of technological changes and upgrades to maintain current systems and integrate new ones may cause services interruptions, transaction processing errors and system conversion delays and may cause us to fail to comply with applicable laws.
Additionally, the implementation of technological changes and upgrades to maintain current systems and integrate new ones may cause service interruptions, transaction processing errors and system conversion delays and may cause us to fail to comply with applicable laws and regulations.
In the normal course of its business, the Bank collects, processes and retains sensitive and confidential customer and consumer information. Despite the security measures we have in place, our facilities may be vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, and other similar events.
Despite the security measures we have in place, our facilities and systems may be vulnerable to cyber-attacks, security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, attacks enhanced or facilitated by artificial intelligence (“AI”) and other similar events.
An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for credit losses, or an increase in charge-offs, which could have a material adverse impact on our business, results of operations, and financial condition.
An increase in non-performing loans would result in a loss of earnings from these loans and an increase in the provision for credit losses, and could lead to an increase in charge-offs, which could have a material adverse impact on our business, results of operations, and financial condition. 15 The Bank has a high concentration of loans secured by real estate, so a deterioration in the real estate markets could require material increases in the ACL and adversely affect our business, financial condition, and results of operations.
Further, there can be no assurance regarding any forecasts or predictions about the effect that any future rate adjustments may have on our results of operations.
Further, there can be no assurance regarding any forecasts or predictions about the effect that any future rate adjustments may have on our results of operations. Elevated interest rates could negatively impact deposit growth and mix, the value of our investments, shareholders’ equity, and the Bank’s profitability.
The loan portfolio contains a high percentage of commercial, commercial real estate, real estate acquisition and development loans in relation to the total loans and total assets. These types of loans have historically been viewed as having more risk of default than residential real estate loans or certain other types of loans or investments.
These types of loans have historically been viewed as having more risk of default than residential real estate loans or certain other types of loans or investments and tend to be larger in size.
The financial services industry is experiencing rapid technological changes with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs.
The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs.
These types of loans also typically are larger than residential real estate loans and other commercial loans. Because the Bank’s loan portfolio contains a significant number of commercial and commercial real estate loans with relatively large balances, the deterioration of one or more of these loans may cause a significant increase in non-performing loans.
Because the Bank’s loan portfolio contain commercial and commercial real estate loans with relatively large balances and nonperforming loan balances are very low, the deterioration of the credit quality of a few loans or the loan category may cause a significant increase in non-performing loans.
The occurrence of any of these events may result in a prolonged interruption of our business, which could have a material adverse effect on our business, financial condition, and operations. Our future performance will depend on our ability to respond timely to technological change.
The occurrence of any of these events may result in a prolonged interruption of our business and the businesses of our customers and could disrupt the insurability of our assets or the assets of our customers that may be material to their ability to repay or provide collateral for our loans, which could have a material adverse effect on our business, financial condition and results of operations.
Moreover, federal bank regulators have highlighted the increased risk associated with commercial real estate loans, including with respect to the higher vulnerability of these credits to pressure as interest rates remain elevated and market conditions in many large metropolitan areas continue to show signs of stress.
In fact, the FDIC has issued recent pronouncements highlighting the increased risk associated with commercial real estate loans, including with respect to the higher vulnerability of these credits to elevated interest rates and stressed market conditions in many large metropolitan areas, and alerting banks to its concern about banks with a heavy concentration of commercial real estate loans.
Since we have $985 million in goodwill, representing 33 percent of our shareholders' equity, impairment of goodwill could have a material adverse effect on our business, financial condition and results of operations. Furthermore, even though it is a non-cash item, significant impairment of goodwill could subject us to regulatory limitations, including the ability to pay dividends on our common stock.
Since we have $1.051 billion in goodwill, representing 33 percent of our shareholders' equity, impairment of goodwill could have a material adverse effect on our business, financial condition and results of operations.
With Bank branches located in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada, our business could be affected by a major natural catastrophe, such as a drought, fire, flood, earthquake, or other natural disaster.
Our business is subject to the risks of earthquakes, floods, fires, and other catastrophic events. With Bank branches and customers located in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada, our business could be affected by natural catastrophes such as droughts, fires, earthquakes, or other natural disasters that affect these regions.
The Federal Reserve slowed its increases to the federal funds target rate in 2023, with the most recent increase occurring in July 2023.
The Federal Reserve decreased the federal funds target rate three times in 2024, with the most recent decrease occurring in December 2024.
We may not be able to continue to grow through acquisitions, and if we do, there is a risk of negative impacts of such acquisitions on our operating results and financial condition, which could be material.
If we are unable to manage associated risks, acquisitions may have negative impacts on our operating results and financial condition, which could be material. We anticipate that we will issue capital stock in connection with future acquisitions.
See “Item 1C. Cybersecurity” for additional information regarding our efforts to detect, identify, assess, manage, and respond to material risks from cybersecurity threats. We have various anti-takeover measures that could impede a takeover.
See “Item 1C. Cybersecurity” for additional information regarding our efforts to detect, identify, assess, manage, and respond to risks from cybersecurity threats. The Company’s business may be materially affected by the emergence of disruptive new technologies or approaches enabled by the rapid pace of innovation unfolding in the artificial intelligence space.
Removed
In fact, the FDIC has issued pronouncements alerting banks of its concern about banks with a heavy concentration of commercial real estate loans.
Added
Furthermore, even though it is a non-cash item, significant impairment of goodwill could subject us to regulatory limitations, including limits applicable to dividends on our common stock. 14 There can be no assurance we will be able to continue paying dividends on our common stock at recent levels.
Removed
The Bank has a high concentration of loans secured by real estate, so any future deterioration in the real estate markets could require material increases in the ACL and adversely affect our business, financial condition, and results of operations. The Bank has a high degree of concentration in loans secured by real estate.
Added
The loan portfolio contains a high percentage of commercial, commercial real estate, real estate acquisition and development loans in relation to the total loans and total assets.
Removed
Elevated interest rates could negatively impact deposit growth, the value of our investments, shareholders’ equity, and the Bank’s profitability. 17 We may be impacted by the retirement of London Interbank Offered Rate (“LIBOR”) as a reference rate. In July 2017, the United Kingdom Financial Conduct Authority announced that LIBOR may no longer be published after 2021.
Added
Our future performance will depend on our ability to respond timely to technological change. The financial services industry continues to experience rapid technological changes with frequent introductions of new technology-driven products and services by both other regulated entities and by companies that are not subject to the extensive regulations applicable to banks.
Removed
LIBOR is used extensively in the U.S and globally as a “benchmark” or “reference rate” for various commercial and financial contracts. In March 2022, the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was enacted providing that LIBOR-based contracts that lack fallback language specifying practicable replacement “benchmarks” will automatically transition to the applicable reference rates recommended by the Federal Reserve.
Added
We may not be able to effectively implement new technology-driven products or services, or be successful in marketing these products and services.
Removed
Subsequently in December 2022, the Federal Reserve issued a Final Rule establishing “benchmark” replacements based on the Secured Overnight Financing Rate (“SOFR”). The ICE Benchmark Administration (“IBA”), the authorized and regulated administrator of LIBOR, is being compelled by the Financial Conduct Authority (the “FCA”) to continue publishing some LIBOR tenors under a synthetic methodology.
Added
In the normal course of its business, the Bank collects, processes and retains sensitive and confidential customer and consumer information.
Removed
The FCA intends to no longer require the publication of these synthetic tenors by September 2024, but may extend the timeline if needed.
Added
The safe and responsible integration of AI functionality as it rapidly evolves presents emerging ethical and legal challenges, and the use of such technologies may result in diminished brand trust and reputational harm. As with many innovations, AI presents risks and challenges that could significantly disrupt our business model.
Removed
Despite the progress made through the LIBOR Act and the Federal Reserve’s Final Rule, it is impossible to predict the effect of any alternatives rates on the value of LIBOR-based securities and variable rate loans, subordinated debentures or other securities or financial arrangements.
Added
In addition, the use of AI by bad actors presents increasingly complex and sophisticated security threats to our confidential customer, employee, and Company data, and we must make additional efforts to maintain network security.
Removed
The replacement of LIBOR with one or more alternative rates may impact the availability and cost of hedging instruments and borrowings, including the rates we pay on our subordinated debentures and derivative financial instruments.
Added
The regulatory landscape surrounding AI technologies is evolving, and the ways in which these technologies will be regulated by governmental authorities, self-regulatory institutions, or other regulatory authorities remains uncertain and may be inconsistent from jurisdiction to jurisdiction.
Removed
When LIBOR rates are no longer available, and we are required to implement substitute indices for the calculation of interest rates under contracts or financial instruments to which we are a party, we may incur significant expenses in effecting the transition.
Added
Certain jurisdictions in which we operate are considering or have proposed or enacted legislation and policies regulating AI and non-personal data, such as the recent Executive Order on AI. Such regulations may result in operational costs to modify, maintain, or align our business practices, or constrain our ability to develop, deploy, or maintain these technologies.
Removed
The transition to a new reference rate requires changes to contracts, risk and pricing models, valuation tools, systems, product design and hedging strategies. Our business is subject to the risks of earthquakes, floods, fires, and other natural catastrophes.
Added
We are subject to national data protection, privacy and security laws, regulations and codes of conduct that relate to our various business units and data processing activities, which may include sensitive, confidential, and personal information. These laws, regulations and codes may be inconsistent across jurisdictions and are subject to evolving and differing (sometimes conflicting) interpretations.
Added
Government officials and regulators, privacy advocates and class action attorneys are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data, including the transferring of personal information across international borders. This scrutiny can result in new and shifting interpretations of existing laws, thereby further impacting our business.
Added
State laws in the United States on privacy, data and related technologies, as well as industry self-regulatory codes and regulatory requirements, create additional privacy and security compliance obligations and expand the scope of potential liability.
Added
While we have invested in readiness to comply with applicable requirements, the dynamic and evolving nature of these laws, regulations and codes, as well as their interpretation by regulators and courts, may affect our ability to reach current and prospective customers, to respond to individual customer requests under the laws (such as individual rights of access, correction and deletion of their personal information), to implement our business models effectively and to adequately address disclosure requirements.
Added
Perception of our practices, products, services or solutions, even if unfounded, as a violation of individual privacy, data protection rights or cybersecurity requirements, subjects us to public criticism, lawsuits, investigations, claims and other proceedings by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and reputation and expose us to increased liability, fines and other punitive measures including prohibition on sales of our products, services or solutions, restrictive judicial orders and disgorgement of data.
Added
Non-compliance with the Patriot Act, BSA, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions. The Patriot Act and BSA require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities.
Added
Failure to comply with these regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance can be given that these policies and procedures will be effective in preventing violations of these laws and regulations.
Added
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. Any of these results could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Added
Although inflationary pressures declined throughout 2024, with the annual inflation rate in the United States decreasing to 2.4% during September 2024 as reported by the U.S. Bureau of Labor Statistics, our business may be impacted by periods of high inflation in the future.
Added
Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses. Consequently, the ability of our business customers to repay their loans may deteriorate, which would adversely impact our results of operations and financial condition.
Added
Furthermore, a prolonged period of inflation could cause wages and other costs to the Company to increase, which could adversely affect our results of operations and financial condition. Nearly all our assets and liabilities are monetary in nature. As a result, interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.
Added
Interest rates do not necessarily move in the same direction or by the same magnitude as the prices of goods and services.
Added
Significant changes or developments in U.S. laws or policies, and the reactions of the national and global economy to such changes, may have a material adverse effect on our business. Significant changes or developments in U.S. laws and policies can materially adversely affect our business.
Added
There are uncertainties around the legal and regulatory approach that will be taken under the Executive branch Administration, and we cannot predict the likelihood, nature or extent of changes in law or government regulations that may arise from future legislation or administrative or executive action, either in the United States or abroad. 19 Our business is heavily dependent on the services of members of the senior management team.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

3 edited+0 added−0 removed12 unchanged
Biggest changeThe CISO has maintained a Certified Information Systems Security Professional (CISSP) certification for over 18 years. The CRO has a degree in Business Administration and Finance from the University of Montana. The CRO has over 20 years of combined experience with financial institution risk management, including prior experience as a bank regulator and a credit risk management consultant.
Biggest changeThe CISO has maintained a Certified Information Systems Security Professional (CISSP) certification for over 19 years. The CRO has a degree in Business Administration and Finance from the University of Montana. The CRO has over 24 years of combined experience with financial institution risk management, including prior experience as a bank regulator and a credit risk management consultant.
These management and staff members also participate in structured ongoing training to keep current with industry trends and cybersecurity threats. The CISO has a degree in Business Administration, Finance, and Risk Management from Washington State University. The CISO has over 23 years of experience in cybersecurity and information security.
These management and staff members also participate in structured ongoing training to keep current with industry trends and cybersecurity threats. The CISO has a degree in Business Administration, Finance, and Risk Management from Washington State University. The CISO has over 24 years of experience in cybersecurity and information security.
The CIO has dual degrees in Accounting and Computer Science from the University of Montana. The CIO has over 30 years of experience managing information technology at the Company.
The CIO has dual degrees in Accounting and Computer Science from the University of Montana. The CIO has over 31 years of experience managing information technology at the Company.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeProperties The following schedule provides information on the Company’s 221 properties as of December 31, 2023: (Dollars in thousands) Properties Leased Properties Owned Net Book Value Montana 9 61 $ 121,504 Utah 5 33 65,414 Idaho 7 23 37,206 Colorado 6 21 29,135 Wyoming 3 16 22,205 Arizona 8 9 16,357 Nevada 1 6 10,464 Washington 2 11 15,486 Total 41 180 $ 317,771 We believe that all of our facilities are well maintained, generally adequate and suitable for the current operations of our business, as well as fully utilized.
Biggest changeProperties The following schedule provides information on the Company’s 227 properties as of December 31, 2024: (Dollars in thousands) Properties Leased Properties Owned Net Book Value Montana 7 61 $ 158,896 Utah 5 33 65,746 Idaho 7 23 48,076 Colorado 6 17 24,744 Wyoming 3 16 22,174 Arizona 8 9 16,014 Nevada 1 6 10,227 Washington 2 23 35,416 Total 39 188 $ 381,293 We believe that all of our facilities are well maintained, generally adequate and suitable for the current operations of our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−1 removed1 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s stock trades on the NYSE under the symbol GBCI. As of December 31, 2023, there were approximately 1,732 stockholders of record of the Company’s common stock. The closing price per share of common stock on December 31, 2023, was $41.32.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock trades on the NYSE under the symbol GBCI. As of December 31, 2024, there were approximately 1,968 stockholders of record of the Company’s common stock. The closing price per share on December 31, 2024, was $50.22.
In 2023, the Company declared total regular dividends in cash of $1.32 per share. Future cash dividends will depend on a variety of factors, including earnings, capital, asset quality, general economic conditions and regulatory considerations. Information regarding the regulatory considerations is set forth under the heading “Supervision and Regulation” in “Item 1.
In 2024, the Company declared total regular dividends in cash of $1.32 per share. Future cash dividends will depend on a variety of factors, including earnings, capital, asset quality, general economic conditions and regulatory considerations. Information regarding the regulatory considerations is set forth under the heading “Supervision and Regulation” in “Item 1.
Total return includes appreciation in market value of the stock as well as the actual cash and stock dividends paid to stockholders. The graph assumes that the value of the each investment was $100 on December 31, 2018 and that all dividends were reinvested.
Total return includes appreciation in market value of the stock as well as the actual cash and stock dividends paid to stockholders. The graph assumes that the value of the each investment was $100 on December 31, 2019 and that all dividends were reinvested.
Business.” Issuer Stock Purchases The Company made no stock repurchases during 2023.
Business.” Issuer Stock Purchases The Company made no stock repurchases during 2024.
Removed
Period Ending 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Glacier Bancorp, Inc. 100.00 120.08 124.68 157.66 141.25 122.87 Russell 2000 Index 100.00 125.53 150.58 172.90 137.56 160.85 KBW Regional Banking Index 100.00 123.81 113.03 154.45 143.75 143.17 23
Added
Period Ending 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Glacier Bancorp, Inc. 100.00 103.83 131.29 117.63 102.32 128.28 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 KBW Regional Banking Index 100.00 91.29 124.74 116.10 115.64 130.90

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

108 edited+22 added−18 removed116 unchanged
Biggest changeThe following table summarizes the Company’s loan portfolio by regulatory classification: (Dollars in thousands) December 31, 2023 December 31, 2022 $ Change % Change Custom and owner occupied construction $ 290,572 $ 298,461 $ (7,889) (3 %) Pre-sold and spec construction 236,596 297,895 (61,299) (21 %) Total residential construction 527,168 596,356 (69,188) (12 %) Land development 232,966 219,842 13,124 6 % Consumer land or lots 187,545 206,604 (19,059) (9 %) Unimproved land 87,739 104,662 (16,923) (16 %) Developed lots for operative builders 56,142 60,987 (4,845) (8 %) Commercial lots 87,185 93,952 (6,767) (7 %) Other construction 900,547 938,406 (37,859) (4 %) Total land, lot, and other construction 1,552,124 1,624,453 (72,329) (4 %) Owner occupied 3,035,768 2,833,469 202,299 7 % Non-owner occupied 3,742,916 3,531,673 211,243 6 % Total commercial real estate 6,778,684 6,365,142 413,542 6 % Commercial and industrial 1,363,479 1,377,888 (14,409) (1 %) Agriculture 772,458 735,553 36,905 5 % 1st lien 2,127,989 1,808,502 319,487 18 % Junior lien 47,230 40,445 6,785 17 % Total 1-4 family 2,175,219 1,848,947 326,272 18 % Multifamily residential 796,538 622,185 174,353 28 % Home equity lines of credit 979,891 872,899 106,992 12 % Other consumer 229,154 220,035 9,119 4 % Total consumer 1,209,045 1,092,934 116,111 11 % States and political subdivisions 834,947 797,656 37,291 5 % Other 204,111 198,012 6,099 3 % Total loans receivable, including loans held for sale 16,213,773 15,259,126 954,647 6 % Less loans held for sale 1 (15,691) (12,314) (3,377) 27 % Total loans receivable $ 16,198,082 $ 15,246,812 $ 951,270 6 % ______________________________ 1 Loans held for sale are primarily 1st lien 1-4 family loans. 43 The following table summarizes the Company’s non-performing assets by regulatory classification: Non-performing Assets, by Loan Type Non- Accrual Loans Accruing Loans 90 Days or More Past Due OREO (Dollars in thousands) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2023 December 31, 2023 Custom and owner occupied construction $ 214 224 214 — — Pre-sold and spec construction 763 389 — 763 — Total residential construction 977 613 214 763 — Land development 35 138 35 — — Consumer land or lots 96 278 96 — — Unimproved land — 78 — — — Developed lots for operative builders 608 251 — 608 — Commercial lots 47 — — 47 — Other construction — 12,884 — — — Total land, lot and other construction 786 13,629 131 655 — Owner occupied 1,838 2,076 821 — 1,017 Non-owner occupied 11,016 805 10,757 259 — Total commercial real estate 12,854 2,881 11,578 259 1,017 Commercial and industrial 1,971 3,326 1,245 575 151 Agriculture 2,558 2,574 2,557 1 — 1st lien 2,664 2,678 2,533 116 15 Junior lien 180 166 144 36 — Total 1-4 family 2,844 2,844 2,677 152 15 Multifamily residential 395 4,535 — 395 — Home equity lines of credit 2,043 1,393 1,778 265 — Other consumer 1,187 911 636 231 320 Total consumer 3,230 2,304 2,414 496 320 Other 16 36 — 16 — Total $ 25,631 32,742 20,816 3,312 1,503 44 The following table summarizes the Company’s accruing loans 30-89 days past due by regulatory classification: Accruing 30-89 Days Delinquent Loans, by Loan Type (Dollars in thousands) December 31, 2023 December 31, 2022 $ Change % Change Custom and owner occupied construction $ 2,549 $ 1,082 $ 1,467 136 % Pre-sold and spec construction 1,219 1,712 (493) (29 %) Total residential construction 3,768 2,794 974 35 % Land development 163 — 163 n/m Consumer land or lots 624 442 182 41 % Unimproved land — 120 (120) (100 %) Developed lots for operative builders — 958 (958) (100 %) Commercial lots 2,159 47 2,112 4,494 % Other construction — 209 (209) (100 %) Total land, lot and other construction 2,946 1,776 1,170 66 % Owner occupied 2,222 3,478 (1,256) (36 %) Non-owner occupied 14,471 496 13,975 2,818 % Total commercial real estate 16,693 3,974 12,719 320 % Commercial and industrial 12,905 3,439 9,466 275 % Agriculture 594 1,367 (773) (57 %) 1st lien 3,768 2,174 1,594 73 % Junior lien 1 190 (189) (99 %) Total 1-4 family 3,769 2,364 1,405 59 % Multifamily residential — 492 (492) (100 %) Home equity lines of credit 4,518 1,182 3,336 282 % Other consumer 3,264 1,824 1,440 79 % Total consumer 7,782 3,006 4,776 159 % States and political subdivisions — 28 (28) (100 %) Other 1,510 1,727 (217) (13 %) Total $ 49,967 $ 20,967 $ 29,000 138 % _________________ n/m - not measurable 45 The following table summarizes the Company’s charge-offs and recoveries by regulatory classification: Net Charge-Offs (Recoveries), Years ended, By Loan Type Charge-Offs Recoveries (Dollars in thousands) December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2023 Custom and owner occupied construction $ — 17 — — Pre-sold and spec construction (15) (15) — 15 Total residential construction (15) 2 — 15 Land development (135) (34) — 135 Consumer land or lots (19) (46) — 19 Other construction 889 — 889 — Total land, lot and other construction 735 (80) 889 154 Owner occupied (59) 555 66 125 Non-owner occupied 799 (242) 807 8 Total commercial real estate 740 313 873 133 Commercial and industrial 364 (70) 1,040 676 Agriculture — (7) — — 1st lien 66 (109) 110 44 Junior lien 24 (302) 49 25 Total 1-4 family 90 (411) 159 69 Multifamily residential (136) 136 — 136 Home equity lines of credit (6) (91) 129 135 Other consumer 1,097 451 1,368 271 Total consumer 1,091 360 1,497 406 Other 7,447 7,572 10,637 3,190 Total $ 10,316 7,815 15,095 4,779 46 Sources of Funds The Company’s deposits have traditionally been the principal source of funds for use in lending and other business purposes.
Biggest changeThe following table summarizes the Company’s loan portfolio by regulatory classification: (Dollars in thousands) December 31, 2024 December 31, 2023 $ Change % Change Custom and owner occupied construction $ 242,844 $ 290,572 $ (47,728) (16 %) Pre-sold and spec construction 191,926 236,596 (44,670) (19 %) Total residential construction 434,770 527,168 (92,398) (18 %) Land development 197,369 232,966 (35,597) (15 %) Consumer land or lots 187,024 187,545 (521) — % Unimproved land 113,532 87,739 25,793 29 % Developed lots for operative builders 61,661 56,142 5,519 10 % Commercial lots 99,243 87,185 12,058 14 % Other construction 693,461 900,547 (207,086) (23 %) Total land, lot, and other construction 1,352,290 1,552,124 (199,834) (13 %) Owner occupied 3,197,138 3,035,768 161,370 5 % Non-owner occupied 4,053,996 3,742,916 311,080 8 % Total commercial real estate 7,251,134 6,778,684 472,450 7 % Commercial and industrial 1,395,997 1,363,479 32,518 2 % Agriculture 1,024,520 772,458 252,062 33 % 1st lien 2,481,918 2,127,989 353,929 17 % Junior lien 76,303 47,230 29,073 62 % Total 1-4 family 2,558,221 2,175,219 383,002 18 % Multifamily residential 895,242 796,538 98,704 12 % Home equity lines of credit 1,005,783 979,891 25,892 3 % Other consumer 209,457 229,154 (19,697) (9 %) Total consumer 1,215,240 1,209,045 6,195 1 % States and political subdivisions 983,601 834,947 148,654 18 % Other 183,894 204,111 (20,217) (10 %) Total loans receivable, including loans held for sale 17,294,909 16,213,773 1,081,136 7 % Less loans held for sale 1 (33,060) (15,691) (17,369) 111 % Total loans receivable $ 17,261,849 $ 16,198,082 $ 1,063,767 7 % ______________________________ 1 Loans held for sale are primarily 1st lien 1-4 family loans. 45 The following table summarizes the Company’s non-performing assets by regulatory classification: Non-performing Assets, by Loan Type Non- Accrual Loans Accruing Loans 90 Days or More Past Due OREO (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2024 December 31, 2024 Custom and owner occupied construction $ 198 214 198 — — Pre-sold and spec construction 2,132 763 813 1,319 — Total residential construction 2,330 977 1,011 1,319 — Land development 966 35 966 — — Consumer land or lots 78 96 78 — — Developed lots for operative builders 531 608 — 531 — Commercial lots 47 47 — 47 — Total land, lot and other construction 1,622 786 1,044 578 — Owner occupied 2,979 1,838 1,545 1,002 432 Non-owner occupied 2,235 11,016 1,582 — 653 Total commercial real estate 5,214 12,854 3,127 1,002 1,085 Commercial and industrial 2,069 1,971 1,420 641 8 Agriculture 2,335 2,558 2,122 213 — 1st lien 9,053 2,664 7,457 1,596 — Junior lien 315 180 303 12 — Total 1-4 family 9,368 2,844 7,760 1,608 — Multifamily residential 389 395 389 — — Home equity lines of credit 3,465 2,043 2,826 639 — Other consumer 955 1,187 746 138 71 Total consumer 4,420 3,230 3,572 777 71 Other 39 16 — 39 — Total $ 27,786 25,631 20,445 6,177 1,164 46 The following table summarizes the Company’s accruing loans 30-89 days past due by regulatory classification: Accruing 30-89 Days Delinquent Loans, by Loan Type (Dollars in thousands) December 31, 2024 December 31, 2023 $ Change % Change Custom and owner occupied construction $ 969 $ 2,549 $ (1,580) (62 %) Pre-sold and spec construction 564 1,219 (655) (54 %) Total residential construction 1,533 3,768 (2,235) (59 %) Land development 1,450 163 1,287 790 % Consumer land or lots 402 624 (222) (36 %) Unimproved land 36 — 36 n/m Developed lots for operative builders 214 — 214 n/m Commercial lots — 2,159 (2,159) (100 %) Total land, lot and other construction 2,102 2,946 (844) (29 %) Owner occupied 2,867 2,222 645 29 % Non-owner occupied 5,037 14,471 (9,434) (65 %) Total commercial real estate 7,904 16,693 (8,789) (53 %) Commercial and industrial 6,194 12,905 (6,711) (52 %) Agriculture 744 594 150 25 % 1st lien 6,326 3,768 2,558 68 % Junior lien 214 1 213 21,300 % Total 1-4 family 6,540 3,769 2,771 74 % Home equity lines of credit 3,731 4,518 (787) (17 %) Other consumer 1,775 3,264 (1,489) (46 %) Total consumer 5,506 7,782 (2,276) (29 %) Other 1,705 1,510 195 13 % Total $ 32,228 $ 49,967 $ (17,739) (36 %) _________________ n/m - not measurable 47 The following table summarizes the Company’s charge-offs and recoveries by regulatory classification: Net Charge-Offs (Recoveries), Years ended, By Loan Type Charge-Offs Recoveries (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2024 Pre-sold and spec construction $ (4) (15) — 4 Land development 1,095 (135) 1,128 33 Consumer land or lots (22) (19) — 22 Unimproved land 1,338 — 1,338 — Commercial lots 319 — 319 — Other construction — 889 — — Total land, lot and other construction 2,730 735 2,785 55 Owner occupied (73) (59) — 73 Non-owner occupied 2 799 7 5 Total commercial real estate (71) 740 7 78 Commercial and industrial 1,422 364 2,084 662 Agriculture 64 — 68 4 1st lien 32 66 71 39 Junior lien (65) 24 10 75 Total 1-4 family (33) 90 81 114 Multifamily residential — (136) — — Home equity lines of credit 69 (6) 140 71 Other consumer 1,078 1,097 1,494 416 Total consumer 1,147 1,091 1,634 487 Other 8,643 7,447 11,967 3,324 Total $ 13,898 10,316 18,626 4,728 48 Sources of Funds The Company’s deposits have traditionally been the principal source of funds for use in lending and other business purposes.
These forward-looking statements include, but are not limited to, statements about the Company’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 the negative version of those words or other comparable words or phrases of a future or forward-looking nature.
These forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “will,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature.
During the first quarter of 2023, the Federal Reserve Bank (“FRB”) offered a new Bank Term Funding Program (“BTFP”) for eligible depository institutions. The BTFP offers loans of up to one year in length to institutions pledging collateral eligible for purchase by the FRB in open market operations such as U.S. Treasuries, U.S. Agency securities, and U.S. agency mortgage-backed securities.
During the first quarter of 2023, the Federal Reserve Bank (“FRB”) offered a new Bank Term Funding Program (“BTFP”) for eligible depository institutions. The BTFP offered loans of up to one year in length to institutions pledging collateral eligible for purchase by the FRB in open market operations such as U.S. Treasuries, U.S. Agency securities, and U.S. agency mortgage-backed securities.
Short-term borrowings are accompanied by increased risks managed by the Bank’s Asset Liability Committee (“ALCO”) such as rate increases or unfavorable changes in terms which would make it more costly to obtain future short-term borrowings. The Company’s short-term borrowing sources include FHLB advances, BTFP, federal funds purchased and retail and wholesale repurchase agreements.
Short-term borrowings are accompanied by increased risks managed by the Bank’s Asset Liability Committee (“ALCO”) such as rate increases or unfavorable changes in terms which would make it more costly to obtain future short-term borrowings. The Company’s short-term borrowing sources include FHLB advances, federal funds purchased and retail and wholesale repurchase agreements.
The Company employs detection and response mechanisms designed to contain and mitigate these risks. The Company maintains a robust information security program that is regularly 53 reviewed, tested, and updated. This includes vulnerability and patch management programs, incident response planning, security monitoring, employee training, and security awareness testing.
The Company employs detection and response mechanisms designed to contain and mitigate these risks. The Company maintains a robust information security program that is regularly reviewed, tested, and updated. This includes vulnerability and patch management programs, incident response planning, security monitoring, employee training, and security awareness testing.
Financial Statements and Supplementary Data.” Modified Loans If a loan is modified in response to a borrower’s financial difficulties such modification is known as a modification to a borrower experiencing financial difficulty (“MBFD”), and if the underlying loan is characterized as a loan.
Financial Statements and Supplementary Data.” 41 Modified Loans If a loan is modified in response to a borrower’s financial difficulties such modification is known as a modification to a borrower experiencing financial difficulty (“MBFD”), and if the underlying loan is characterized as a loan.
Should any of the factors considered by management in making this estimate change, the Company’s estimate of current expected credit losses could also change, which could affect the level of future provision of credit losses related to loans.
Should any of the factors considered by management in making this estimate change, the Company’s estimate of current expected credit losses could also change, which could affect the level of future provision for credit losses related to loans.
The following factors, among others, could cause actual results to differ materially from the anticipated results (express or implied) or other expectations in the forward-looking statements, including those factors set forth under “Risk Factors” and in other sections in this Annual Report on Form 10-K, or the documents incorporated by reference: • risks associated with lending and potential adverse changes in the credit quality of the Company’s loan portfolio; • changes in monetary and fiscal policies, including interest rate policies of the Federal Reserve Board, which may continue to adversely affect the Company’s net interest income and margin, the fair value of its financial instruments, profitability, and stockholders’ equity; • legislative or regulatory changes, including increased insurance rates and assessments or increased banking and consumer protection regulations, that may adversely affect the Company’s business; • risks related to overall economic conditions, including the impact on the economy of an elevated interest rate environment, inflationary pressures, and geopolitical instability, including the wars in Ukraine and the Middle East; • risks, costs and other difficulties associated with the Company’s ability to negotiate, complete, and successfully integrate any pending or future acquisitions; • costs or difficulties related to the completion and integration of pending or future acquisitions; • impairment of the goodwill recorded by the Company in connection with acquisitions, which may have an adverse impact on earnings and capital; • reduction in demand for banking products and services, whether as a result of changes in customer behavior, economic conditions, banking environment, or competition; • deterioration of the reputation of banks and the financial services industry, which could adversely affect the Company's ability to obtain and maintain customers; • changes in the competitive landscape, including as may result from new market entrants or further consolidation in the financial services industry, resulting in the creation of larger competitors with greater financial resources; • 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 through acquisitions; • risks associated with dependence on the Chief Executive Officer (“CEO”), the senior management team and the Presidents of Glacier Bank (the “Bank”) divisions; • material failure, potential interruption or breach in security of the Company’s systems or changes in technologies which could expose the Company to cybersecurity risks, fraud, system failures, or direct liabilities; • risks related to natural disasters, including droughts, fires, floods, earthquakes, pandemics, and other unexpected events; • success in managing risks involved in the foregoing; and • effects of any reputational damage to the Company resulting from any of the foregoing.
The following factors, among others, could cause actual results to differ materially from the anticipated results (express or implied) or other expectations in the forward-looking statements, including those factors set forth under “Risk Factors” and in other sections in this Annual Report on Form 10-K, or the documents incorporated by reference: • risks associated with lending and potential adverse changes in the credit quality of the Company’s loan portfolio; • changes in monetary and fiscal policies, including interest rate policies of the Federal Reserve Board, which may continue to adversely affect the Company’s net interest income and margin, the fair value of its financial instruments, profitability, and stockholders’ equity; • legislative or regulatory changes, including increased FDIC insurance rates and assessments or increased banking and consumer protection regulations, that may adversely affect the Company’s business and strategies; • risks related to overall economic conditions, including the impact on the economy of an uncertain interest rate environment, inflationary pressures, the potential for significant changes in economic policies in the new administration, and geopolitical instability, including the wars in Ukraine and the Middle East; • risks associated with the Company’s ability to negotiate, complete, and successfully integrate any pending or future acquisitions; • costs or difficulties related to the completion and integration of pending or future acquisitions; • impairment of the goodwill recorded by the Company in connection with acquisitions, which may have an adverse impact on earnings and capital; • reduction in demand for banking products and services, whether as a result of changes in customer behavior, economic conditions, banking environment, or competition; • deterioration of the reputation of banks and the financial services industry, which could adversely affect the Company's ability to obtain and maintain customers; • changes in the competitive landscape, including as may result from new market entrants or further consolidation in the financial services industry, resulting in the creation of larger competitors with greater financial resources; • 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 through acquisitions; • risks associated with dependence on the Chief Executive Officer (“CEO”), the senior management team and the Presidents of Glacier Bank (the “Bank”) divisions; • material failure, potential interruption or breach in security of the Company’s systems or changes in technology which could expose the Company to cybersecurity risks, fraud, system failures, or direct liabilities; • risks related to natural disasters, including droughts, fires, floods, earthquakes, pandemics, and other unexpected events; • success in managing risks involved in any of the foregoing; and • effects of any reputational damage to the Company resulting from any of the foregoing.
Financial Statements and Supplementary Data.” 50 Federal and State Income Taxes The Company files a consolidated federal income tax return using the accrual method of accounting. All required tax returns have been timely filed. Financial institutions are subject to the provisions of the Internal Revenue Code of 1986, as amended, in the same general manner as other corporations.
Financial Statements and Supplementary Data.” 52 Federal and State Income Taxes The Company files a consolidated federal income tax return using the accrual method of accounting. All required tax returns have been timely filed. Financial institutions are subject to the provisions of the Internal Revenue Code of 1986, as amended, in the same general manner as other corporations.
There were no changes to the Company’s assessment or reported amounts during 2023. For information on goodwill, see Notes 1 and 5 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.” Fair Value Measurements Fair value measurement estimates are used for certain recorded and disclosed financial instruments on a recurring and non-recurring basis.
There were no changes to the Company’s assessment or reported amounts during 2024. For information on goodwill, see Notes 1 and 5 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.” Fair Value Measurements Fair value measurement estimates are used for certain recorded and disclosed financial instruments on a recurring and non-recurring basis.
Based on an analysis of its available-for-sale debt securities with unrealized losses as of December 31, 2023, the Company determined their decline in value was unrelated to credit loss and was primarily the result of interest rate changes and market spreads subsequent to acquisition.
Based on an analysis of its available-for-sale debt securities with unrealized losses as of December 31, 2024, the Company determined their decline in value was unrelated to credit loss and was primarily the result of interest rate changes and market spreads subsequent to acquisition.
The fair value of the debt securities is expected to recover as payments are received and the debt securities approach maturity. In addition, the Company determined an insignificant amount of credit losses is expected on the held-to-maturity debt securities portfolio; therefore, no ACL has been recognized at December 31, 2023.
The fair value of the debt securities is expected to recover as payments are received and the debt securities approach maturity. In addition, the Company determined an insignificant amount of credit losses is expected on the held-to-maturity debt securities portfolio; therefore, no ACL has been recognized at December 31, 2024.
The loans are generally long-term in nature and interest on many of these loans is tax-exempt for federal income tax purposes. 37 Credit Risk Management The Company is committed to a conservative management of the credit risk within the loan portfolio, including the early recognition of problem loans.
The loans are generally long-term in nature and interest on many of these loans is tax-exempt for federal income tax purposes. 38 Credit Risk Management The Company is committed to a conservative management of the credit risk within the loan portfolio, including the early recognition of problem loans.
As of December 31, 2023, management believes the Company and Bank meet all capital adequacy requirements to which they are subject and there are no conditions or events subsequent to this date that management believes have changed the Company’s or Bank’s risk-based capital category.
As of December 31, 2024, management believes the Company and Bank meet all capital adequacy requirements to which they are subject and there are no conditions or events subsequent to this date that management believes have changed the Company’s or Bank’s risk-based capital category.
The information includes material information relevant to the Company’s financial condition and results of operations, material events and uncertainties that are reasonably likely to cause reported information not to be indicative of future operating results or future financial condition, and material financial and statistical information that the Company believes will enhance the investors’ understanding of the Company and its financial results.
The information includes management’s assessment of material information relevant to the Company’s financial condition and results of operations, material events and uncertainties that are reasonably likely to cause reported information not to be indicative of future operating results or financial condition, and material financial and statistical information that the Company believes will enhance the investors’ understanding of the Company and its financial results.
These loans are supported by a term take-out commitment that may be subject to certain contingencies. 36 Consumer Land or Lot Loans The Company originates land and lot acquisition loans to borrowers who intend to construct their primary residence on the respective land or lot.
These loans are supported by a term take-out commitment that may be subject to certain contingencies. 37 Consumer Land or Lot Loans The Company originates land and lot acquisition loans to borrowers who intend to construct their primary residence on the respective land or lot.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
The Company’s ACL of $193 million is considered by management to be adequate to absorb the estimated credit losses from any segment of its loan portfolio based upon management’s best estimate of current expected credit losses within the existing portfolio of loans.
The Company’s ACL of $206 million is considered by management to be adequate to absorb the estimated credit losses from any segment of its loan portfolio based upon management’s best estimate of current expected credit losses within the existing portfolio of loans.
Financial Statements and Supplementary Data.” 42 Loans by Regulatory Classification Supplemental information regarding identification of the Company’s loan portfolio and credit quality based on regulatory classification is provided in the following tables. The regulatory classification of loans is based primarily on the type of collateral for the loans.
Financial Statements and Supplementary Data.” 44 Loans by Regulatory Classification Supplemental information regarding identification of the Company’s loan portfolio and credit quality based on regulatory classification is provided in the following tables. The regulatory classification of loans is based primarily on the type of collateral for the loans.
The subordinated debentures outstanding as of December 31, 2023 were $133 million, including fair value adjustments from acquisitions. For additional information regarding the subordinated debentures, see Note 10 to the Consolidated Financial Statements in “Item 8.
The subordinated debentures outstanding as of December 31, 2024 were $133 million, including fair value adjustments from acquisitions. For additional information regarding the subordinated debentures, see Note 10 to the Consolidated Financial Statements in “Item 8.
Subordinated debentures were issued in conjunction with the trust preferred securities and the terms of the subordinated debentures and trust preferred securities are the same. For regulatory capital purposes, the trust preferred securities are included in Tier 2 capital at December 31, 2023.
Subordinated debentures were issued in conjunction with the trust preferred securities and the terms of the subordinated debentures and trust preferred securities are the same. For regulatory capital purposes, the trust preferred securities are included in Tier 2 capital at December 31, 2024.
Benefits from Low-Income Housing Tax Credits (“LIHTC”) federal income tax credits were $19.9 million and $15.4 million for the years ended December 31, 2023 and 2022, respectively. The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). Administered by the Community Development Financial Institutions Fund (“CDFI Fund”) of the U.S.
Benefits from Low-Income Housing Tax Credits (“LIHTC”) federal income tax credits were $25.4 million and $19.9 million for the years ended December 31, 2024 and 2023, respectively. The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). Administered by the Community Development Financial Institutions Fund (“CDFI Fund”) of the U.S.
Financial Statements and Supplementary Data.” 54 Impact of Recently Issued Accounting Standards Authoritative accounting guidance that impacted the Company that became effective during 2023 or 2022 include amendments to: • FASB ASC Topic 326, Financial Instruments - Credit Losses Troubled Debt Restructurings and Vintage Disclosures • FASB ASC Topic 848, Reference Rate Reform Authoritative accounting guidance that may possibly have a material impact on the Company that is pending adoption at December 31, 2023 includes amendments to: • FASB ASC Topic 232, Investments Equity Method and Joint Ventures • FASB ASC Topic 740, Income Taxes For additional information on the topics and the impact on the Company see Note 1 to the Consolidated Financial Statements in “Item 8.
Financial Statements and Supplementary Data.” 56 Impact of Recently Issued Accounting Standards Authoritative accounting guidance that impacted the Company that became effective during 2024 or 2023 include amendments to: • FASB ASC Topic 326, Financial Instruments - Credit Losses Troubled Debt Restructurings and Vintage Disclosures • FASB ASC Topic 280, Segment Reporting • FASB ASC Topic 848, Reference Rate Reform • FASB ASC Topic 232, Investments Equity Method and Joint Ventures Authoritative accounting guidance that may possibly have a material impact on the Company that is pending adoption at December 31, 2024 includes amendments to: • FASB ASC Topic 740, Income Taxes For additional information on the topics and the impact on the Company see Note 1 to the Consolidated Financial Statements in “Item 8.
The Company also has the capacity to issue 1,000,000 shares of preferred stock of which none have been issued as of December 31, 2023.
The Company also has the capacity to issue 1,000,000 shares of preferred stock of which none have been issued as of December 31, 2024.
Additionally, the Bank is subject to a membership capital stock requirement that is based upon an annual calibration tied to the total assets of the Bank.
Additionally, the Bank is subject to a membership capital stock requirement that is based upon an annual calculation tied to the total assets of the Bank.
Supplemental information regarding the Company’s loan portfolio and credit quality based on regulatory classification is provided in the section captioned “Loans by Regulatory Classification” included in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The regulatory classification of loans is based primarily on the type of collateral for the loans.
Supplemental information regarding the Company’s loan portfolio and credit quality based on regulatory classification is provided in the section captioned “Loans by Regulatory Classification” included in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The regulatory classification of loans is based primarily on the type of collateral for the loans.
The federal income tax credits are claimed over a ten-year credit allowance period. The Company has investments of $14.6 million in Qualified School Construction bonds whereby the Company receives quarterly federal income tax credits in lieu of taxable interest income. The federal income tax credits on these debt securities are subject to federal and state income tax.
The federal income tax credits are claimed over a ten-year credit allowance period. The Company has investments of $11.8 million in Qualified School Construction bonds whereby the Company receives quarterly federal income tax credits in lieu of taxable interest income. The federal income tax credits on these debt securities are subject to federal and state income tax.
As of December 31, 2023, the Company had no construction loans with interest reserves that are currently non-performing or that are designated potential problem loans. 38 Loan Purchases, Sales, and Servicing Fixed rate, long-term mortgage loans are generally sold in the secondary market.
As of December 31, 2024, the Company had no construction loans with interest reserves that are currently non-performing or that are designated potential problem loans. 39 Loan Purchases, Sales, and Servicing Fixed rate, long-term mortgage loans are generally sold in the secondary market.
The following table summarizes the estimated amounts outstanding at December 31, 2023 for uninsured time deposits according to the time remaining to maturity.
The following table summarizes the estimated amounts outstanding at December 31, 2024 for uninsured time deposits according to the time remaining to maturity.
The current and prior year’s low effective income tax rates were due to income from tax-exempt debt securities, municipal loans and leases and benefits from federal income tax credits. Income from tax-exempt debt securities, loans and leases was $80.2 million and $80.1 million for the years ended December 31, 2023 and 2022, respectively.
The current and prior year’s low effective income tax rates were due to income from tax-exempt debt securities, municipal loans and leases and benefits from federal income tax credits. Income from tax-exempt debt securities, loans and leases was $84.2 million and $80.2 million for the years ended December 31, 2024 and 2023, respectively.
Loan information included in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on the Company’s loan segments, which are based on the purpose of the loan, unless otherwise noted as a regulatory classification.
Loan information included in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on the Company’s loan segments, which are based on the purpose of the loan, unless otherwise noted as a regulatory classification.
The Company provides commercial banking services to individuals, small to medium-sized businesses, community organizations and public entities from 221 locations, including 187 branches, across Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada.
The Company provides commercial banking services to individuals, small to medium-sized businesses, community organizations and public entities from 227 locations, including 194 branches, across Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona and Nevada.
State taxes are incurred at the rate of 6.75 percent in Montana, 5.80 percent in Idaho, 4.65 percent in Utah, 4.40 percent in Colorado and 4.90 percent in Arizona. Washington, Wyoming and Nevada do not impose a corporate income tax. The Company is also required to file in states other than the eight states in which it has properties.
State taxes are incurred at the rate of 6.75 percent in Montana, 5.70 percent in Idaho, 4.55 percent in Utah, 4.25 percent in Colorado and 4.90 percent in Arizona. Washington, Wyoming and Nevada do not impose a corporate income tax. The Company is also required to file in states other than the eight states in which it has properties.
Non-accrual loans were included in the average volume for the entire period. 3 Includes tax effect of $8.9 million, $14.5 million and $12.2 million on tax-exempt debt securities income for the years ended December 31, 2023, 2022 and 2021, respectively. 4 Includes tax effect of $859 thousand, $901 thousand and $1.0 million on federal income tax credits for the years ended December 31, 2023, 2022 and 2021, respectively. 5 Includes interest income of $42.2 million, $1.5 million and $915 thousand on average interest-bearing cash balances of $791.5 million, $120.3 million and $674.1 million for the years ended December 31, 2023, 2022 and 2021, respectively. 6 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.
Non-accrual loans were included in the average volume for the entire period. 3 Includes tax effect of $8.6 million, $8.9 million and $14.5 million on tax-exempt debt securities income for the years ended December 31, 2024, 2023 and 2022, respectively. 4 Includes tax effect of $832 thousand, $859 thousand and $0.9 million on federal income tax credits for the years ended December 31, 2024, 2023 and 2022, respectively. 5 Includes interest income of $31.2 million, $42.2 million and $1,523 thousand on average interest-bearing cash balances of $594.8 million, $791.5 million and $120.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. 6 Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.
The following table illustrates the Bank’s regulatory capital ratios and the Federal Reserve’s capital adequacy guidelines as of December 31, 2023: Total Capital (To Risk-Weighted Assets) Tier 1 Capital (To Risk-Weighted Assets) Common Equity Tier 1 (To Risk-Weighted Assets) Leverage Ratio/ Tier 1 Capital (To Average Assets) Glacier Bank actual regulatory ratios 14.07 % 13.01 % 13.01 % 8.81 % Minimum capital requirements 8.00 % 6.00 % 4.50 % 4.00 % Minimum capital requirements plus capital conservation buffer 10.50 % 8.50 % 7.00 % N/A Well capitalized requirements 10.00 % 8.00 % 6.50 % 5.00 % On January 1, 2020, the Company adopted the current expected credit losses (“CECL”) accounting standard that requires management’s estimate of credit losses over the expected contractual lives of the Company's relevant financial assets.
The following table illustrates the Bank’s regulatory capital ratios and the Federal Reserve’s capital adequacy guidelines as of December 31, 2024: Total Capital (To Risk-Weighted Assets) Tier 1 Capital (To Risk-Weighted Assets) Common Equity Tier 1 (To Risk-Weighted Assets) Leverage Ratio/ Tier 1 Capital (To Average Assets) Glacier Bank actual regulatory ratios 13.59 % 12.46 % 12.46 % 8.77 % Minimum capital requirements 8.00 % 6.00 % 4.50 % 4.00 % Minimum capital requirements plus capital conservation buffer 10.50 % 8.50 % 7.00 % N/A Well capitalized requirements 10.00 % 8.00 % 6.50 % 5.00 % On January 1, 2020, the Company adopted the current expected credit losses (“CECL”) accounting standard that requires management’s estimate of credit losses over the expected contractual lives of the Company's relevant financial assets.
Financial Statements and Supplementary Data.” Capital Resources Maintaining capital strength continues to be a long-term objective of the Company. Abundant capital is necessary to sustain growth, provide protection against unanticipated declines in asset values, and to safeguard the funds of depositors.
Financial Statements and Supplementary Data.” Capital Resources Maintaining capital strength continues to be a long-term objective of the Company. High levels of capital are necessary to sustain growth, provide protection against unanticipated declines in asset values, and to safeguard the funds of depositors.
The Company assessed the off-balance sheet credit exposures as of December 31, 2023 and determined its ACL of $19.3 million was adequate to absorb the estimated credit losses. Such ACL is included in other liabilities. For additional information regarding the Company’s ACL, see “Allowance for Credit Losses - Loans Receivable” above.
The Company assessed the off-balance sheet credit exposures as of December 31, 2024 and determined its ACL of $20.4 million was adequate to absorb the estimated credit losses. Such ACL is included in other liabilities. For additional information regarding the Company’s ACL, see “Allowance for Credit Losses - Loans Receivable” above.
Starting on January 1, 2022, the quarterly transitional amounts along with the initial adoption impact of CECL will be phased out of Common Tier 1 capital evenly over the three-year period. For additional information regarding regulatory capital, see Note 12 to the Consolidated Financial Statements in “Item 8.
Starting on January 1, 2022, the quarterly transitional amounts along with the initial adoption impact of CECL were phased out of Common Tier 1 capital evenly over the three-year period ending at the end of 2024. For additional information regarding regulatory capital, see Note 12 to the Consolidated Financial Statements in “Item 8.
Total unencumbered debt securities at December 31, 2022, included $3.1 billion classified as AFS, and $3.1 billion classified as HTM. 49 Contractual Obligations and Off-Balance Sheet Arrangements In the normal course of business, there may be various outstanding commitments to obtain funding and to extend credit, such as letters of credit and unfunded loan commitments, which are not reflected in the accompanying condensed consolidated financial statements.
Total unencumbered debt securities at December 31, 2023, included $441.5 million classified as AFS, and $1.4 billion classified as HTM. 51 Contractual Obligations and Off-Balance Sheet Arrangements In the normal course of business, there may be various outstanding commitments to obtain funding and to extend credit, such as letters of credit and unfunded loan commitments, which are not reflected in the accompanying condensed consolidated financial statements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to provide a more comprehensive review of the Company’s operating results and financial condition than can be obtained from reading the Consolidated Financial Statements alone. The discussion is expected to provide investors an enhanced view of the Company from management’s perspective.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion is intended to provide a more comprehensive review of the Company’s operating results and financial condition from management’s perspective than can be obtained from reading the Consolidated Financial Statements alone.
The Company monitors liquidity and contingency funding alternatives through management reports of liquid assets (e.g., debt securities), both unencumbered and pledged, as well as borrowing capacity, both secured and unsecured, including off-balance sheet funding sources. During 2023, the amount of unencumbered securities decreased primarily as a result of pledging securities to collateralize borrowings.
The Company monitors liquidity and contingency funding alternatives through management reports of liquid assets (e.g., debt securities), both unencumbered and pledged, as well as borrowing capacity, both secured and unsecured, including off-balance sheet funding sources. During 2024, the amount of unencumbered securities increased primarily as a result of pledging securities to collateralize borrowings from 2023 that were released in 2024.
For such loans, the accrual of interest and its capitalization into the loan balance will be discontinued. The Company had $479 million and $554 million of loans with remaining interest reserves of $20.7 million and $27.7 million as of December 31, 2023 and 2022, respectively.
For such loans, the accrual of interest and its capitalization into the loan balance will be discontinued. The Company had $388 million and $479 million of loans with remaining interest reserves of $31.3 million and $20.7 million as of December 31, 2024 and 2023, respectively.
During 2023 and 2022, the Company extended, renewed or modified 7 loans and 5 loans, respectively, with interest reserves. Such loans had an aggregate outstanding principal balance of $56.0 million and $16.2 million as of December 31, 2023 and 2022, respectively.
During 2024 and 2023, the Company extended, renewed or modified 4 loans and 7 loans, respectively, with interest reserves. Such loans had an aggregate outstanding principal balance of $1.5 million and $56.0 million as of December 31, 2024 and 2023, respectively.
Each modified loan is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s prospective ability to service their obligations as modified. The Company discourages the use of multiple loans when modifying loans regardless of whether or not the loans are designated an MBFD. The Company had MBFD loans of $60.6 million at December 31, 2023.
Each modified loan is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s prospective ability to service their obligations as modified. The Company discourages the use of multiple loans when modifying loans regardless of whether or not the loans are designated an MBFD.
For the periods ended December 31, 2023 and 2022, the Company believes the ACL is commensurate with the risk in the Company’s loan portfolio and is directionally consistent with the change in the quality of the Company’s loan portfolio. During 2023, provision for credit losses exceeded the charge-offs, net of recoveries, by $10.5 million.
For the periods ended December 31, 2024 and 2023, the Company believes the ACL is commensurate with the risk in the Company’s loan portfolio and is directionally consistent with the change in the quality of the Company’s loan portfolio. During 2024 and 2023, provision for credit losses exceeded the charge-offs, net of recoveries, by $13.3 million and $13.0 million, respectively.
Capital is also a source of funds for loan demand and enables the Company to effectively manage its assets and liabilities. The Company has the capacity to issue 234,000,000 shares of common stock of which 110,888,942 have been issued as of December 31, 2023.
Capital is also a source of funds for loan demand and enables the Company to effectively manage its assets and liabilities. The Company has the capacity to issue 234,000,000 shares of common stock of which 113,401,955 have been issued as of December 31, 2024.
If there are any deficiencies noted in the reviews, they are reported to Bank management and prompt corrective action is taken. 39 Non-performing Assets The following table summarizes information regarding non-performing assets at the dates indicated: At or for the Years ended (Dollars in thousands) December 31, 2023 December 31, 2022 December 31, 2021 Other real estate owned and foreclosed assets $ 1,503 32 18 Accruing loans 90 days or more past due 3,312 1,559 17,141 Non-accrual loans 20,816 31,151 50,532 Total non-performing assets $ 25,631 32,742 67,691 Non-performing assets as a percentage of subsidiary assets 0.09 % 0.12 % 0.26 % ACL as a percentage of non-performing loans 799 % 557 % 255 % Accruing loans 30-89 days past due $ 49,967 20,967 50,566 U.S. government guarantees included in non-performing assets $ 1,503 2,312 4,028 Interest income 1 $ 1,085 1,450 2,422 ______________________________ 1 Amounts represent estimated interest income that would have been recognized on loans accounted for on a non-accrual basis as of the end of each period had such loans performed pursuant to contractual terms.
If there are any deficiencies noted in the reviews, they are reported to Bank management and prompt corrective action is taken. 40 Non-performing Assets The following table summarizes information regarding non-performing assets at the dates indicated: At or for the Years ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Other real estate owned and foreclosed assets $ 1,164 1,503 32 Accruing loans 90 days or more past due 6,177 3,312 1,559 Non-accrual loans 20,445 20,816 31,151 Total non-performing assets $ 27,786 25,631 32,742 Non-performing assets as a percentage of subsidiary assets 0.10 % 0.09 % 0.12 % ACL as a percentage of non-performing loans 774 % 799 % 557 % Accruing loans 30-89 days past due $ 32,228 49,967 20,967 U.S. government guarantees included in non-performing assets $ 748 1,503 2,312 Interest income 1 $ 1,142 1,085 1,450 ______________________________ 1 Amounts represent estimated interest income that would have been recognized on loans accounted for on a non-accrual basis as of the end of each period had such loans performed pursuant to contractual terms.
The determination of the ACL on loans, including credit loss expense and net charge-offs, is a critical accounting estimate that involves management’s judgments about the loan portfolio that impact credit losses, including the credit risk inherent in the loan portfolio, economic forecasts nationally and in the local markets in which the Company operates, trends and changes in collateral values, delinquencies, non-performing assets, net charge-offs, credit-related policies and personnel, and other environmental factors.
The determination of the ACL on loans, including credit loss expense and net charge-offs, is a critical accounting estimate that involves management’s judgments about the loan portfolio that impact credit losses, including the credit risk inherent in the loan portfolio, economic forecasts nationally and in the local markets in which the Company operates, trends and changes in collateral values, delinquencies, non-performing assets, net charge-offs, credit-related policies and personnel, and other factors. 43 In determining the allowance, the loan portfolio is separated into pools of loans that share similar risk characteristics which are the Company’s loan segments.
December 31, Compounded Annual Growth Rate (Dollars in thousands, except per share data) 2023 2022 2021 2020 2019 1-Year 5-Year Selected Statements of Financial Condition Information Total assets $ 27,742,629 $ 26,635,375 $ 25,940,645 $ 18,504,206 $ 13,683,999 4.2 % 15.2 % Debt securities 8,288,130 9,022,359 10,370,013 5,527,650 2,799,863 (8.1) % 24.2 % Loans receivable, net 16,005,325 15,064,529 13,259,366 10,964,453 9,388,320 6.2 % 11.3 % Allowance for credit losses (192,757) (182,283) (172,665) (158,243) (124,490) 5.7 % 9.1 % Goodwill and intangibles 1,017,263 1,026,994 1,037,652 569,522 519,704 (0.9) % 14.4 % Deposits 19,929,167 20,606,555 21,337,249 14,797,529 10,776,457 (3.3) % 13.1 % Federal Home Loan Bank advances — 1,800,000 — — 38,611 (100.0) % (100.0) % FRB Bank Term Funding 2,740,000 — — — — n/m n/m Securities sold under agreements to repurchase and other borrowed funds 1,568,545 1,023,209 1,064,888 1,037,651 598,644 53.3 % 21.2 % Stockholders’ equity 3,020,281 2,843,305 3,177,622 2,307,041 1,960,733 6.2 % 9.0 % Equity per share 27.24 25.67 28.71 24.18 21.25 6.1 % 5.1 % Equity as a percentage of total assets 10.9 % 10.7 % 12.3 % 12.5 % 14.3 % 2.1 % (5.3) % ________________________ n/m - not measurable Years ended December 31, Compounded Annual Growth Rate (Dollars in thousands, except per share data) 2023 2022 2021 2020 2019 1-Year 5-Year Summary Statements of Operations Interest income $ 1,017,655 $ 829,640 $ 681,074 $ 627,064 $ 546,177 22.7 % 13.3 % Interest expense 325,973 41,261 18,558 27,315 42,773 690.0 % 50.1 % Net interest income 691,682 788,379 662,516 599,749 503,404 (12.3) % 6.6 % Provision for credit losses 14,795 19,963 23,076 39,765 57 (25.9) % 204.0 % Non-interest income 118,079 120,732 144,820 172,867 130,774 (2.2) % (2.0) % Non-interest expense 527,358 518,868 434,822 404,811 374,927 1.6 % 7.1 % Income before income taxes 267,608 370,280 349,438 328,040 259,194 (27.7) % 0.6 % Federal and state income tax expense 44,681 67,078 64,681 61,640 48,650 (33.4) % (1.7) % Net income $ 222,927 $ 303,202 $ 284,757 $ 266,400 $ 210,544 (26.5) % 1.1 % Basic earnings per share $ 2.01 $ 2.74 $ 2.87 $ 2.81 $ 2.39 (26.6) % (3.4) % Diluted earnings per share $ 2.01 $ 2.74 $ 2.86 $ 2.81 $ 2.38 (26.6) % (3.3) % Dividends declared per share $ 1.32 $ 1.32 $ 1.37 $ 1.33 $ 1.31 — % 0.2 % 25 At or for the Years ended December 31, (Dollars in thousands) 2023 2022 2021 2020 2019 Selected Ratios and Other Data Return on average assets 0.81 % 1.15 % 1.33 % 1.62 % 1.64 % Return on average equity 7.64 % 10.43 % 11.08 % 12.15 % 12.01 % Dividend payout ratio 65.67 % 48.18 % 47.74 % 47.33 % 54.81 % Average equity to average asset ratio 10.65 % 11.01 % 11.99 % 13.35 % 13.69 % Total capital (to risk-weighted assets) 14.61 % 14.02 % 14.21 % 14.63 % 14.95 % Tier 1 capital (to risk-weighted assets) 12.85 % 12.34 % 12.49 % 12.42 % 13.76 % Common Equity Tier 1 (to risk-weighted assets) 12.85 % 12.34 % 12.49 % 12.42 % 12.58 % Tier 1 capital (to average assets) 8.71 % 8.79 % 8.64 % 9.12 % 11.65 % Net interest margin on average earning assets (tax-equivalent) 2.73 % 3.27 % 3.42 % 4.09 % 4.39 % Efficiency ratio 1 62.85 % 54.64 % 51.35 % 49.97 % 57.78 % Allowance for credit losses as a percent of loans 1.19 % 1.20 % 1.29 % 1.42 % 1.31 % Allowance for credit losses as a percent of nonperforming loans 799 % 557 % 255 % 470 % 385 % Non-performing assets as a percentage of subsidiary assets 0.09 % 0.12 % 0.26 % 0.19 % 0.27 % Non-performing assets $ 25,631 32,742 67,691 35,433 37,437 Loans originated and acquired $ 4,449,350 8,039,623 8,551,419 7,934,881 4,607,536 Number of full time equivalent employees 3,294 3,390 3,436 2,970 2,826 Number of locations 221 221 224 193 181 ______________________________ 1 Non-interest expense before OREO expenses, core deposit intangibles amortization, goodwill impairment charges, and non-recurring expense items as a percentage of tax-equivalent net interest income and non-interest income, excluding gains or losses on sale of investments, OREO income, and non-recurring income items. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2023 COMPARED TO DECEMBER 31, 2022 Highlights and Overview The banking industry experienced significant pressures during the current year with historic increases in interest rates during the last eighteen months and three notable bank failures in 2023.
December 31, Compounded Annual Growth Rate (Dollars in thousands, except per share data) 2024 2023 2022 2021 2020 1-Year 5-Year Selected Statements of Financial Condition Information Total assets $ 27,902,987 $ 27,742,629 $ 26,635,375 $ 25,940,645 $ 18,504,206 0.6 % 8.6 % Debt securities 7,540,052 8,288,130 9,022,359 10,370,013 5,527,650 (9.0) % 6.4 % Loans receivable, net 17,055,808 16,005,325 15,064,529 13,259,366 10,964,453 6.6 % 9.2 % Allowance for credit losses (206,041) (192,757) (182,283) (172,665) (158,243) 6.9 % 5.4 % Goodwill and intangibles 1,102,500 1,017,263 1,026,994 1,037,652 569,522 8.4 % 14.1 % Deposits 20,546,994 19,929,167 20,606,555 21,337,249 14,797,529 3.1 % 6.8 % Federal Home Loan Bank advances 1,800,000 — 1,800,000 — — 100.0 % n/m FRB Bank Term Funding — 2,740,000 — — — (100.0) % n/m Securities sold under agreements to repurchase and other borrowed funds 1,860,816 1,568,545 1,023,209 1,064,888 1,037,651 18.6 % 12.4 % Stockholders’ equity 3,223,854 3,020,281 2,843,305 3,177,622 2,307,041 6.7 % 6.9 % Equity per share 28.43 27.24 25.67 28.71 24.18 4.4 % 3.3 % Equity as a percentage of total assets 11.6 % 10.9 % 10.7 % 12.3 % 12.5 % 6.1 % (1.5) % ________________________ n/m - not measurable Years ended December 31, Compounded Annual Growth Rate (Dollars in thousands, except per share data) 2024 2023 2022 2021 2020 1-Year 5-Year Summary Statements of Operations Interest income $ 1,139,850 $ 1,017,655 $ 829,640 $ 681,074 $ 627,064 12.0 % 12.7 % Interest expense 435,218 325,973 41,261 18,558 27,315 33.5 % 74.0 % Net interest income 704,632 691,682 788,379 662,516 599,749 1.9 % 3.3 % Provision for credit losses 28,306 14,795 19,963 23,076 39,765 91.3 % (6.6) % Non-interest income 128,446 118,079 120,732 144,820 172,867 8.8 % (5.8) % Non-interest expense 578,468 527,358 518,868 434,822 404,811 9.7 % 7.4 % Income before income taxes 226,304 267,608 370,280 349,438 328,040 (15.4) % (7.2) % Federal and state income tax expense 36,160 44,681 67,078 64,681 61,640 (19.1) % (10.1) % Net income $ 190,144 $ 222,927 $ 303,202 $ 284,757 $ 266,400 (14.7) % (6.5) % Basic earnings per share $ 1.68 $ 2.01 $ 2.74 $ 2.87 $ 2.81 (16.4) % (9.8) % Diluted earnings per share $ 1.68 $ 2.01 $ 2.74 $ 2.86 $ 2.81 (16.4) % (9.8) % Dividends declared per share $ 1.32 $ 1.32 $ 1.32 $ 1.37 $ 1.33 — % (0.2) % 25 At or for the Years ended December 31, (Dollars in thousands) 2024 2023 2022 2021 2020 Selected Ratios and Other Data Return on average assets 0.68 % 0.81 % 1.15 % 1.33 % 1.62 % Return on average equity 6.02 % 7.64 % 10.43 % 11.08 % 12.15 % Dividend payout ratio 78.57 % 65.67 % 48.18 % 47.74 % 47.33 % Average equity to average asset ratio 11.33 % 10.65 % 11.01 % 11.99 % 13.35 % Total capital (to risk-weighted assets) 14.49 % 14.61 % 14.02 % 14.21 % 14.63 % Tier 1 capital (to risk-weighted assets) 12.69 % 12.85 % 12.34 % 12.49 % 12.42 % Common Equity Tier 1 (to risk-weighted assets) 12.69 % 12.85 % 12.34 % 12.49 % 12.42 % Tier 1 capital (to average assets) 8.93 % 8.71 % 8.79 % 8.64 % 9.12 % Net interest margin on average earning assets (tax-equivalent) 2.77 % 2.73 % 3.27 % 3.42 % 4.09 % Efficiency ratio 1 66.71 % 62.85 % 54.64 % 51.35 % 49.97 % Allowance for credit losses as a percent of loans 1.19 % 1.19 % 1.20 % 1.29 % 1.42 % Allowance for credit losses as a percent of nonperforming loans 774 % 799 % 557 % 255 % 470 % Non-performing assets as a percentage of subsidiary assets 0.10 % 0.09 % 0.12 % 0.26 % 0.19 % Non-performing assets $27,786 25,631 32,742 67,691 35,433 Loans originated $5,151,138 4,449,350 8,039,623 8,551,419 7,934,881 Number of full time equivalent employees 3,441 3,294 3,390 3,436 2,970 Number of locations 227 221 221 224 193 ______________________________ 1 Non-interest expense before OREO expenses, core deposit intangibles amortization, goodwill impairment charges, and non-recurring expense items as a percentage of tax-equivalent net interest income and non-interest income, excluding gains or losses on sale of investments, OREO income, and non-recurring income items. 26 YEAR ENDED DECEMBER 31, 2024 COMPARED TO DECEMBER 31, 2023 Highlights and Overview The Company continued to experience pressure during 2024 from the historic interest rate increases during 2023.
The total funding cost (including non-interest bearing deposits) for 2023 was 1.35 percent, which was an increase of 117 basis points over the prior year funding cost of 0.18 percent.
The total funding cost (including non-interest bearing deposits) for 2024 was 1.79 percent, which was an increase of 44 basis points over the prior year funding cost of 1.35 percent.
The Company’s credit quality remains strong, ending the current year with $26 million in non-performing assets compared to $33 million at prior year end. Net charge-offs for 2023 remained low at 0.06 percent of loans compared to 0.05 percent of loans during the prior year.
The Company’s credit quality remains strong, ending the current year with $27.8 million in non-performing assets compared to $25.6 million at prior year end. Net charge-offs for 2024 remained low at 0.08 percent of loans compared to 0.06 percent of loans during the prior year.
The Company does not undertake any obligation to publicly correct, revise, or update any forward-looking 24 statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement, except as may be required under federal securities laws.
The Company does not undertake any obligation to publicly correct, revise, 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, except as may be required under federal securities laws. 24 FIVE YEAR SELECTED FINANCIAL DATA Selected Financial Data The selected financial data of the Company is derived from the Company’s historical audited financial statements and related notes.
The Company ended the year at $27.743 billion in assets, which was a $1.107 billion, or 4 percent, increase over the prior year end and was driven by the increase in the loan portfolio and cash liquidity that more than offset the decrease in debt securities.
The Company ended the year at $27.903 billion in assets, which was a $160 million, or 1 percent, increase over the prior year end and was primarily driven by the increase in the loan portfolio which more than offset the decrease in debt securities and interest bearing cash.
The loss assumptions are then applied to each segment of loan to estimate the ACL on the pooled loans. For any loans that do not share similar risk characteristics, the estimated credit losses are determined on an individual loan basis and such loans primarily consist of non-accrual loans.
For any loans that do not share similar risk characteristics, the estimated credit losses are determined on an individual loan basis and such loans primarily consist of non-accrual loans.
Financial Statements and Supplementary Data.” 48 Liquidity Risk In the normal course of business, the Company has commitments that require significant cash availability for customer deposits outflows, repurchase agreements, borrowed funds, lease obligations, off-balance sheet obligations, operating expenses and other contractual obligations. The source of funding for such requirements includes loan repayments, customer deposit inflows, borrowings and capital resources.
Financial Statements and Supplementary Data.” 50 Liquidity Risk In the normal course of business, the Company has commitments that require significant cash availability for customer deposits outflows, repurchase agreements, borrowed funds, lease obligations, off-balance sheet obligations, operating expenses and other contractual obligations.
The increase from the prior year was primarily attributable to the increase in interest expense in the current year that outpaced the increase in interest income. 32 ADDITIONAL MANAGEMENT’S DISCUSSION AND ANALYSIS Investment Activity The Company’s investment securities primarily consist of debt securities classified as either available-for-sale or held-to-maturity.
The increase from the prior year was primarily attributable to increased non-interest expense, including costs associated with the acquisitions of Wheatland and RMB, which outpaced the increase in net interest income. 32 ADDITIONAL MANAGEMENT’S DISCUSSION AND ANALYSIS Investment Activity The Company’s investment securities primarily consist of debt securities classified as either available-for-sale or held-to-maturity.
The Company plans to pay off all of the BTFP borrowings at maturity through a combination of the committed FHLB borrowings and additional sources of liquidity. Additionally, the Company has other sources of secured and unsecured borrowing lines from various sources that may be used from time to time.
In the first quarter of 2024, the Company paid off all of the BTFP borrowings through a combination of the FHLB borrowings, cash, and additional sources of liquidity. Additionally, the Company has other sources of secured and unsecured borrowing lines from various sources that may be used from time to time.
Cyber Risk A failure in or breach of the Company’s operational or security systems, or those of the Company’s third-party service providers, including as a result of cyber-attacks, could disrupt business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase costs and cause losses.
The historic increase in interest rates during the prior year was the reason for the increase in interest expense which outpaced the increase in interest income. 55 Cyber Risk A failure in or breach of the Company’s operational or security systems, or those of the Company’s third-party service providers, including as a result of cyber-attacks, could disrupt business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase costs and cause losses.
The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during 2023 was 2.73 percent, a 54 basis points decrease from the net interest margin of 3.27 percent for the prior year.
The net interest margin as a percentage of earning assets, on a tax-equivalent basis, during 2024 was 2.77 percent, a 4 basis points increase from the net interest margin of 2.73 percent for the prior year.
Income tax expense for the years ended December 31, 2023 and 2022 was $44.7 million and $67.1 million, respectively. The Company’s effective income tax rate for the years ended December 31, 2023 and 2022 was 16.7 percent and 18.1 percent, respectively.
Income tax expense for the years ended December 31, 2024 and 2023 was $36.2 million and $44.7 million, respectively. The Company’s effective income tax rate for the years ended December 31, 2024 and 2023 was 16.0 percent and 16.7 percent, respectively.
Conversely, the Company may decide to utilize a portion of its strong capital position, as it has done in the past, to repurchase shares of its outstanding common stock, depending on market price and other relevant considerations. The Federal Reserve has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company.
Conversely, the Company may in the future decide to utilize a portion of its strong capital position, as it has done in the past, to repurchase shares of its outstanding common stock, depending on market price and other relevant considerations.
These assets are valued at par value. During 2023 the Company borrowed $2.740 billion from the BTFP which enabled the Company to pay off higher rate FHLB advances and support its current liquidity position. The $2.740 billion in BTFP borrowings will mature in March of 2024.
These assets were valued at par value. During 2023 the Company borrowed $2.740 billion from the BTFP which enabled the Company to pay off higher rate FHLB advances and support its liquidity position at that time.
Non-marketable equity securities consist of capital stock issued by the FHLB of Des Moines. Debt Securities Debt securities classified as available-for-sale are carried at estimated fair value and debt securities classified as held-to-maturity are carried at amortized cost.
Non-marketable equity securities primarily consist of capital stock issued by the FHLB of Des Moines. Debt Securities Debt securities classified as available-for-sale are carried at estimated fair value and debt securities classified as held-to-maturity are carried at amortized cost. Unrealized gains or losses, net of tax, on available-for-sale debt securities are reflected as an adjustment to other comprehensive income.
The following table sets forth the changes in OREO for the periods indicated: 40 Years ended (Dollars in thousands) December 31, 2023 December 31, 2022 Balance at beginning of period $ 32 18 Additions 1,563 907 Write-downs (8) — Sales (84) (893) Balance at end of period $ 1,503 32 Allowance for Credit Losses - Loans Receivable The following table summarizes the allocation of the ACL as of the dates indicated: December 31, 2023 December 31, 2022 (Dollars in thousands) ACL Percent of Loans in Category ACL Percent of Loans in Category Residential real estate $ 22,325 11 % $ 19,683 10 % Commercial real estate 130,924 64 % 125,816 65 % Other commercial 21,194 18 % 21,454 18 % Home equity 11,766 5 % 10,759 5 % Other consumer 6,548 2 % 4,571 2 % Total $ 192,757 100 % $ 182,283 100 % The following table summarizes the ACL experience for the periods indicated: At or for the Years ended (Dollars in thousands) December 31, 2023 % of Average Loans December 31, 2022 % of Average Loans December 31, 2021 % of Average Loans Balance at beginning of period $ 182,283 $ 172,665 $ 158,243 Acquisitions — — 371 Provision for credit losses 20,790 17,433 16,380 Net (charge-offs) recoveries Residential real estate (3) — % 63 — % 337 0.04 % Commercial real estate (1,640) (0.02) % 684 0.01 % 1,597 0.02 % Other commercial (2,256) (0.08) % (2,545) (0.10) % (1,048) (0.04) % Home equity 38 — % 250 0.03 % 198 0.03 % Other consumer (6,455) (1.64) % (6,267) (1.70) % (3,413) (1.03) % Net Charge-offs (10,316) (0.07) % (7,815) (0.05) % (2,329) (0.02) % Balance at end of period $ 192,757 $ 182,283 $ 172,665 ACL as a percentage of total loans 1.19 % 1.20 % 1.29 % Non-accrual loans as a percentage of total loans 0.13 % 0.20 % 0.38 % ACL as a percentage of non-accrual loans 926.01 % 585.16 % 341.69 % 41 The ACL as a percentage of total loans outstanding at December 31 2023 was 1.19 percent which was a 1 basis point decrease from the prior year end.
The following table sets forth the changes in OREO for the periods indicated: Years ended (Dollars in thousands) December 31, 2024 December 31, 2023 Balance at beginning of period $ 1,503 32 Additions 879 1,563 Write-downs (16) (8) Sales (1,203) (84) Balance at end of period $ 1,164 1,503 Allowance for Credit Losses - Loans Receivable The following table summarizes the allocation of the ACL as of the dates indicated: December 31, 2024 December 31, 2023 (Dollars in thousands) ACL Percent of Loans in Category ACL Percent of Loans in Category Residential real estate $ 25,181 11 % $ 22,325 11 % Commercial real estate 138,545 64 % 130,924 64 % Other commercial 24,400 18 % 21,194 18 % Home equity 11,402 5 % 11,766 5 % Other consumer 6,513 2 % 6,548 2 % Total $ 206,041 100 % $ 192,757 100 % 42 The following table summarizes the ACL experience for the periods indicated: At or for the Years ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Balance at beginning of period $ 192,757 $ 182,283 $ 172,665 Acquisitions 3 — — Provision for credit losses 27,179 20,790 17,433 Net (charge-offs) recoveries Residential real estate (6) (3) 63 Commercial real estate (2,828) (1,640) 684 Other commercial (3,956) (2,256) (2,545) Home equity 5 38 250 Other consumer (7,113) (6,455) (6,267) Net Charge-offs (13,898) (10,316) (7,815) Balance at end of period $ 206,041 $ 192,757 $ 182,283 ACL as a percentage of total loans 1.19 % 1.19 % 1.20 % Non-accrual loans as a percentage of total loans 0.12 % 0.13 % 0.13 % ACL as a percentage of non-accrual loans 1,007.78 % 926.01 % 585.16 % The following table summarizes net (charge-offs) recoveries as a percentage of average loans for the periods indicated: December 31, 2024 December 31, 2023 December 31, 2022 Residential real estate — % — % — % Commercial real estate (0.03) % (0.02) % (0.02) % Other commercial (0.13) % (0.08) % (0.08) % Home equity — % — % — % Other consumer (1.79) % (1.64) % (1.64) % Total net charge-offs (0.08) % (0.07) % (0.07) % The ACL as a percentage of total loans outstanding at December 31 2024 was 1.19 percent which was unchanged from the prior year end.
Liquidity risk is the possibility that the Company will not be able to fund present and future obligations as they come due because of an inability to liquidate assets or obtain adequate funding at a reasonable cost.
The source of funding for such requirements includes loan repayments, customer deposit inflows, borrowings, revenue from operations, and capital resources. Liquidity risk is the possibility that the Company will not be able to fund present and future obligations as they come due because of an inability to liquidate assets or obtain adequate funding at a reasonable cost.
Average Balance Sheet The following schedule provides 1) the total dollar amount of interest and dividend income of the Company for earning assets and the average yields; 2) the total dollar amount of interest expense on interest bearing liabilities and the average rates; 3) net interest and dividend income and interest rate spread; and 4) net interest margin (tax-equivalent). 51 Years ended December 31, 2023 December 31, 2022 December 31, 2021 (Dollars in thousands) Average Balance Interest and Dividends Average Yield/ Rate Average Balance Interest and Dividends Average Yield/ Rate Average Balance Interest and Dividends Average Yield/ Rate Assets Residential real estate loans $ 1,603,600 $ 71,328 4.45 % $ 1,284,029 $ 57,243 4.46 % $ 910,300 $ 43,300 4.76 % Commercial loans 1 12,982,708 675,549 5.20 % 11,902,971 555,244 4.66 % 9,900,056 476,678 4.81 % Consumer and other loans 1,247,114 74,734 5.99 % 1,131,000 54,393 4.81 % 993,082 44,614 4.49 % Total loans 2 15,833,422 821,611 5.19 % 14,318,000 666,880 4.66 % 11,803,438 564,592 4.78 % Tax-exempt investment securities 3 1,740,746 59,716 3.43 % 1,916,731 70,438 3.67 % 1,584,313 59,713 3.77 % Taxable investment securities 4,5 8,297,203 152,003 1.83 % 8,546,792 113,952 1.33 % 6,512,202 75,553 1.16 % Total earning assets 25,871,371 1,033,330 3.99 % 24,781,523 851,270 3.44 % 19,899,953 699,858 3.52 % Goodwill and intangibles 1,022,052 1,032,263 683,000 Non-earning assets 504,698 603,401 850,742 Total assets $ 27,398,121 $ 26,417,187 $ 21,433,695 Liabilities Non-interest bearing deposits $ 6,642,339 $ — — % $ 8,005,821 $ — — % $ 6,544,843 $ — — % NOW and DDA accounts 5,167,117 37,357 0.72 % 5,387,277 3,439 0.06 % 4,325,071 2,737 0.06 % Savings accounts 2,908,584 9,918 0.34 % 3,270,799 1,191 0.04 % 2,493,174 771 0.03 % Money market deposit accounts 3,166,914 42,254 1.33 % 3,926,737 6,401 0.16 % 3,144,507 3,914 0.12 % Certificate accounts 1,949,206 64,176 3.29 % 955,829 3,249 0.34 % 976,894 4,643 0.48 % Total core deposits 19,834,160 153,705 0.77 % 21,546,463 14,280 0.07 % 17,484,489 12,065 0.07 % Short-term borrowings Wholesale deposits 6 173,231 8,721 5.03 % 11,862 246 2.07 % 31,103 70 0.22 % Repurchase agreements 1,301,223 36,414 2.80 % 920,955 3,200 0.35 % 994,968 2,302 0.23 % FHLB advances 551,986 26,910 4.81 % 584,562 17,317 2.92 % — — — % FRB Bank Term Funding 2,133,658 93,388 4.38 % — — — % — — — % Total short-term borrowings 4,160,098 165,433 3.92 % 1,517,379 20,763 1.35 % 1,026,071 2,372 0.23 % Long-term borrowings Subordinated debentures and other borrowed funds 209,567 6,835 3.26 % 196,139 6,218 3.17 % 166,386 4,121 2.48 % Total interest bearing liabilities 24,203,825 325,973 1.35 % 23,259,981 41,261 0.18 % 18,676,946 18,558 0.10 % Other liabilities 275,359 249,832 186,068 Total liabilities 24,479,184 23,509,813 18,863,014 Stockholders’ Equity Common stock 1,109 1,107 993 Paid-in capital 2,346,575 2,340,952 1,708,271 Retained earnings 1,021,469 897,587 772,300 Accumulated other comprehensive (loss) income (450,216) (332,272) 89,117 Total stockholders’ equity 2,918,937 2,907,374 2,570,681 Total liabilities and stockholders’ equity $ 27,398,121 $ 26,417,187 $ 21,433,695 Net interest income (tax-equivalent) $ 707,357 $ 810,009 $ 681,300 Net interest spread (tax-equivalent) 2.64 % 3.26 % 3.42 % Net interest margin (tax-equivalent) 2.73 % 3.27 % 3.42 % ______________________________ 1 Includes tax effect of $5.9 million, $6.3 million and $5.6 million on tax-exempt municipal loan and lease income for the years ended December 31, 2023, 2022 and 2021, respectively. 52 2 Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale.
Average Balance Sheet The following schedule provides 1) the total dollar amount of interest and dividend income of the Company for earning assets and the average yields; 2) the total dollar amount of interest expense on interest bearing liabilities and the average rates; 3) net interest and dividend income and interest rate spread; and 4) net interest margin (tax-equivalent). 53 Years ended December 31, 2024 December 31, 2023 December 31, 2022 (Dollars in thousands) Average Balance Interest and Dividends Average Yield/ Rate Average Balance Interest and Dividends Average Yield/ Rate Average Balance Interest and Dividends Average Yield/ Rate Assets Residential real estate loans $ 1,820,057 $ 89,596 4.92 % $ 1,603,600 $ 71,328 4.45 % $ 1,284,029 $ 57,243 4.46 % Commercial loans 1 13,818,805 772,496 5.59 % 12,982,708 675,549 5.20 % 11,902,971 555,244 4.66 % Consumer and other loans 1,305,716 89,160 6.83 % 1,247,114 74,734 5.99 % 1,131,000 54,393 4.81 % Total loans 2 16,944,578 951,252 5.61 % 15,833,422 821,611 5.19 % 14,318,000 666,880 4.66 % Tax-exempt investment securities 3 1,675,732 59,479 3.55 % 1,740,746 59,716 3.43 % 1,916,731 70,438 3.67 % Taxable investment securities 4,5 7,400,887 145,128 1.96 % 8,297,203 152,003 1.83 % 8,546,792 113,952 1.33 % Total earning assets 26,021,197 1,155,859 4.44 % 25,871,371 1,033,330 3.99 % 24,781,523 851,270 3.44 % Goodwill and intangibles 1,079,404 1,022,052 1,032,263 Non-earning assets 773,322 504,698 603,401 Total assets $ 27,873,923 $ 27,398,121 $ 26,417,187 Liabilities Non-interest bearing deposits $ 6,144,268 $ — — % $ 6,642,339 $ — — % $ 8,005,821 $ — — % NOW and DDA accounts 5,326,296 63,635 1.19 % 5,167,117 37,357 0.72 % 5,387,277 3,439 0.06 % Savings accounts 2,866,908 22,684 0.79 % 2,908,584 9,918 0.34 % 3,270,799 1,191 0.04 % Money market deposit accounts 2,904,461 58,140 2.00 % 3,166,914 42,254 1.33 % 3,926,737 6,401 0.16 % Certificate accounts 3,106,755 128,081 4.12 % 1,949,206 64,176 3.29 % 955,829 3,249 0.34 % Total core deposits 20,348,688 272,540 1.34 % 19,834,160 153,705 0.77 % 21,546,463 14,280 0.07 % Short-term borrowings Wholesale deposits 6 3,615 194 5.36 % 173,231 8,721 5.03 % 11,862 246 2.07 % Repurchase agreements 1,676,040 55,723 3.32 % 1,301,223 36,414 2.80 % 920,955 3,200 0.35 % FHLB advances 1,147,456 56,297 4.83 % 551,986 26,910 4.81 % 584,562 17,317 2.92 % FRB Bank Term Funding 617,377 27,097 4.39 % 2,133,658 93,388 4.38 % — — — % Total short-term borrowings 3,444,488 139,311 3.98 % 4,160,098 165,433 3.92 % 1,517,379 20,763 1.35 % Long-term borrowings FHLB advances 351,038 16,323 4.57 % — — — % — — — % Subordinated debentures and other borrowed funds 219,839 7,044 3.20 % 209,567 6,835 3.26 % 196,139 6,218 3.17 % Total interest bearing liabilities 24,364,053 435,218 1.79 % 24,203,825 325,973 1.35 % 23,259,981 41,261 0.18 % Other liabilities 351,825 275,359 249,832 Total liabilities 24,715,878 24,479,184 23,509,813 Stockholders’ Equity Common stock 1,132 1,109 1,107 Paid-in capital 2,437,641 2,346,575 2,340,952 Retained earnings 1,064,090 1,021,469 897,587 Accumulated other comprehensive loss (344,818) (450,216) (332,272) Total stockholders’ equity 3,158,045 2,918,937 2,907,374 Total liabilities and stockholders’ equity $ 27,873,923 $ 27,398,121 $ 26,417,187 Net interest income (tax-equivalent) $ 720,641 $ 707,357 $ 810,009 Net interest spread (tax-equivalent) 2.65 % 2.64 % 3.26 % Net interest margin (tax-equivalent) 2.77 % 2.73 % 3.70 % 54 Average Balance Sheet - continued ______________________________ 1 Includes tax effect of $6.5 million, $5.9 million and $6.3 million on tax-exempt municipal loan and lease income for the years ended December 31, 2024, 2023 and 2022, respectively. 2 Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale.
During 2022, provision for credit losses exceeded the charge-offs, net of recoveries, by $9.6 million. At the end of each quarter, the Company analyzes its loan portfolio and maintains an ACL at a level that is appropriate and determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
At the end of each quarter, the Company analyzes its loan portfolio and maintains an ACL at a level that is appropriate and determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The highest issued rating was used to categorize the securities in the table for those securities where the NRSRO ratings were not at the same level. 33 December 31, 2023 December 31, 2022 (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value S&P: AAA / Moody’s: Aaa $ 446,206 402,932 456,074 395,371 S&P: AA+, AA, AA- / Moody’s: Aa1, Aa2, Aa3 1,244,344 1,107,064 1,291,020 1,102,120 S&P: A+, A, A- / Moody’s: A1, A2, A3 55,511 55,101 58,045 56,865 Not rated by either entity 5,842 5,486 14,534 14,089 Total $ 1,751,903 1,570,583 1,819,673 1,568,445 State and local government securities largely consist of both taxable and tax-exempt general obligation and revenue bonds.
The highest issued rating was used to categorize the securities in the table for those securities where the NRSRO ratings were not at the same level. 33 December 31, 2024 December 31, 2023 (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value S&P: AAA / Moody’s: Aaa $ 429,267 379,793 446,206 402,932 S&P: AA+, AA, AA- / Moody’s: Aa1, Aa2, Aa3 1,207,309 1,046,083 1,244,344 1,107,064 S&P: A+, A, A- / Moody’s: A1, A2, A3 48,143 47,345 55,511 55,101 Not rated by either entity 6,868 6,617 5,842 5,486 Total $ 1,691,587 1,479,838 1,751,903 1,570,583 State and local government securities largely consist of both taxable and tax-exempt general obligation and revenue bonds.
Provision for Credit Losses The following table summarizes the provision for credit losses on the loan portfolio, net charge-offs and select ratios relating to the provision for credit losses on loans for the previous eight quarters: (Dollars in thousands) Provision for Credit Losses on Loans Net Charge-Offs (Recoveries) ACL as a Percent of Loans Accruing Loans 30-89 Days Past Due as a Percent of Loans Non-Performing Assets to Total Sub-sidiary Assets Fourth quarter 2023 $ 4,181 $ 3,695 1.19 % 0.31 % 0.09 % Third quarter 2023 5,095 2,209 1.19 % 0.09 % 0.15 % Second quarter 2023 5,254 2,473 1.19 % 0.16 % 0.12 % First quarter 2023 6,260 1,939 1.20 % 0.16 % 0.12 % Fourth quarter 2022 6,060 1,968 1.20 % 0.14 % 0.12 % Third quarter 2022 8,382 3,154 1.20 % 0.07 % 0.13 % Second quarter 2022 (1,353) 1,843 1.20 % 0.12 % 0.16 % First quarter 2022 4,344 850 1.28 % 0.12 % 0.24 % The provision for credit loss expense was $14.8 million for 2023, a decrease of $5.2 million, or 26 percent, over the same period in the prior year.
Provision for Credit Losses The following table summarizes the provision for credit losses on the loan portfolio, net charge-offs and select ratios relating to the provision for credit losses on loans for the previous eight quarters: (Dollars in thousands) Provision for Credit Losses on Loans Net Charge-Offs (Recoveries) ACL as a Percent of Loans Accruing Loans 30-89 Days Past Due as a Percent of Loans Non-Performing Assets to Total Sub-sidiary Assets Fourth quarter 2024 $ 6,041 $ 5,170 1.19 % 0.19 % 0.10 % Third quarter 2024 6,981 2,766 1.19 % 0.33 % 0.10 % Second quarter 2024 5,066 2,890 1.19 % 0.29 % 0.06 % First quarter 2024 9,091 3,072 1.19 % 0.37 % 0.09 % Fourth quarter 2023 4,181 3,695 1.19 % 0.31 % 0.09 % Third quarter 2023 5,095 2,209 1.19 % 0.09 % 0.15 % Second quarter 2023 5,254 2,473 1.19 % 0.16 % 0.12 % First quarter 2023 6,260 1,939 1.20 % 0.16 % 0.12 % The provision for credit loss expense was $28.3 million for 2024, an increase of $13.5 million, or 91 percent, over the prior year and was primarily attributable to $9.7 million from the acquisitions of Wheatland and RMB.
FIVE YEAR SELECTED FINANCIAL DATA Selected Financial Data The selected financial data of the Company is derived from the Company’s historical audited financial statements and related notes. The information set forth below should be read in conjunction with “Item 8. Financial Statements and Supplementary Data” contained elsewhere in this Annual Report on Form 10-K.
The information set forth below should be read in conjunction with “Item 8. Financial Statements and Supplementary Data” contained elsewhere in this Annual Report on Form 10-K.
The following table identifies certain liquidity sources and capacity available to the Company as of the dates indicated: (Dollars in thousands) December 31, 2023 December 31, 2022 FHLB advances Borrowing capacity $ 4,444,588 4,358,079 Amount utilized — (1,800,000) Letters of credit (2,327) (2,075) Amount available $ 4,442,261 2,556,004 FRB discount window Borrowing capacity $ 1,916,312 1,680,117 Amount utilized — — Amount available $ 1,916,312 1,680,117 FRB Bank Term Funding Program Borrowing capacity $ 2,853,209 — Amount utilized (2,740,000) — Amount available $ 113,209 — Unsecured lines of credit available $ 565,000 805,000 Unencumbered debt securities U.S. government and federal agency $ 473,084 811,311 U.S. government sponsored enterprises — 286,480 State and local governments 998,923 1,513,164 Corporate bonds 26,253 26,109 Residential mortgage-backed securities 127,328 2,646,766 Commercial mortgage-backed securities 183,048 970,300 Total unencumbered debt securities 1 $ 1,808,636 6,254,130 ____________________________ 1 Total unencumbered debt securities at December 31, 2023, included $441.5 million classified as AFS and $1.4 billion classified as HTM.
The following table identifies certain liquidity sources and capacity available to the Company as of the dates indicated: (Dollars in thousands) December 31, 2024 December 31, 2023 FHLB advances Borrowing capacity $ 4,355,976 4,444,588 Amount utilized (1,800,000) — Letters of credit and other pledged collateral (6,165) (2,327) Amount available $ 2,549,811 4,442,261 FRB discount window Borrowing capacity $ 1,860,932 1,916,312 Amount utilized — — Amount available $ 1,860,932 1,916,312 FRB Bank Term Funding Program Borrowing capacity $ — 2,853,209 Amount utilized — (2,740,000) Amount available $ — 113,209 Unsecured lines of credit available $ 525,000 565,000 Unencumbered debt securities U.S. government and federal agency $ 608,979 473,084 U.S. government sponsored enterprises 301,990 — State and local governments 907,832 998,923 Corporate bonds 14,503 26,253 Residential mortgage-backed securities 615,310 127,328 Commercial mortgage-backed securities 837,169 183,048 Total unencumbered debt securities 1 $ 3,285,783 1,808,636 ____________________________ 1 Total unencumbered debt securities at December 31, 2024, included $1.6 billion classified as AFS and $1.6 billion classified as HTM.
Interest income of $1.018 billion for 2023 increased $188 million, or 23 percent, from the prior year and was primarily attributable to the increase in the loan portfolio and an increase in loan yields. The loan yield was 5.19 percent for 2023, an increase of 53 basis points from the prior year loan yield of 4.66 percent.
Interest income of $1.140 billion for 2024 increased $122 million, or 12 percent, from the prior year and was primarily attributable to the increases in the loan yields and the average balance of the loan portfolio. The loan yield was 5.61 percent for 2024, an increase of 42 basis points from the prior year loan yield of 5.19 percent.
(Dollars in thousands) Certificates of Deposit Within three months $ 542,291 Three months to six months 255,865 Seven months to twelve months 165,620 Over twelve months 70,771 Total $ 1,034,547 For additional information on deposits, see Note 8 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.” 47 Borrowings The Company borrows money through repurchase agreements.
(Dollars in thousands) Certificates of Deposit Within three months $ 694,754 Three months to six months 247,273 Seven months to twelve months 123,487 Over twelve months 23,649 Total $ 1,089,163 For additional information on deposits, see Note 8 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.” 49 Borrowings The Company borrows money through repurchase agreements.
Interest expense of $326 million for 2023 increased $285 million, or 690 percent, over the same period in the prior year and was the result of increased borrowings and higher interest rates on borrowings and deposits. Core deposit cost (including non-interest bearing deposits) was 0.77 percent for 2023 compared to 0.07 percent for the prior year.
Interest expense of $435 million for 2024 increased $109 million, or 34 percent, over the prior year and was primarily the result of higher interest rates on deposits and an increase in deposit balances. Core deposit cost (including non-interest bearing deposits) was 1.34 percent for 2024 compared to 0.77 percent for the prior year.
The Company’s deposits are summarized below: December 31, 2023 December 31, 2022 (Dollars in thousands) Amount Percent Amount Percent Non-interest bearing deposits $ 6,022,980 30 % $ 7,690,751 37 % NOW and DDA accounts 5,321,257 27 % 5,330,614 26 % Savings accounts 2,833,887 14 % 3,200,321 16 % Money market deposit accounts 2,831,624 14 % 3,472,281 17 % Certificate accounts 2,915,393 15 % 880,589 4 % Wholesale deposits 4,026 — % 31,999 — % Total interest bearing deposits 13,906,187 70 % 12,915,804 63 % Total deposits $ 19,929,167 100 % $ 20,606,555 100 % Total estimated uninsured deposits were $6.081 billion and $7.234 billion at December 31, 2023 and December 31, 2022, respectively.
The Company’s deposits are summarized below: December 31, 2024 December 31, 2023 (Dollars in thousands) Amount Percent Amount Percent Non-interest bearing deposits $ 6,136,709 30 % $ 6,022,980 30 % NOW and DDA accounts 5,543,512 27 % 5,321,257 27 % Savings accounts 2,845,124 14 % 2,833,887 14 % Money market deposit accounts 2,878,213 14 % 2,831,624 14 % Certificate accounts 3,139,821 15 % 2,915,393 15 % Wholesale deposits 3,615 — % 4,026 — % Total interest bearing deposits 14,410,285 70 % 13,906,187 70 % Total deposits $ 20,546,994 100 % $ 19,929,167 100 % Total estimated uninsured deposits were $6.544 billion and $6.081 billion at December 31, 2024 and December 31, 2023, respectively.
Non-performing assets of $25.6 million at December 31, 2023 decreased $7.1 million, or 22 percent, over the prior year end. Non-performing assets as a percentage of subsidiary assets at December 31, 2023 was 0.09 percent compared to 0.12 percent in the prior year end.
Non-performing assets as a percentage of subsidiary assets at December 31, 2024 was 0.10 percent compared to 0.09 percent at the prior year end. Non-performing assets of $27.8 million at December 31, 2024 increased $2.2 million, or 8 percent, over the prior year end.
December 31, 2023 December 31, 2022 (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value General obligation - unlimited $ 383,400 361,728 421,698 389,762 General obligation - limited 183,078 165,993 186,401 162,096 Revenue 1,146,341 1,006,088 1,171,971 981,486 Certificate of participation 36,396 34,144 36,864 32,464 Other 2,688 2,630 2,739 2,637 Total $ 1,751,903 1,570,583 1,819,673 1,568,445 The following table outlines the five states in which the Company owns the highest concentrations of state and local government securities.
December 31, 2024 December 31, 2023 (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value General obligation - unlimited $ 348,129 322,414 383,400 361,728 General obligation - limited 172,537 151,445 183,078 165,993 Revenue 1,135,421 974,076 1,146,341 1,006,088 Certificate of participation 35,443 31,846 36,396 34,144 Other 57 57 2,688 2,630 Total $ 1,691,587 1,479,838 1,751,903 1,570,583 The following table outlines the five states in which the Company owns the highest concentrations of state and local government securities.
Included in the 2023 gain on sale of securities was $1.7 million of gain on the sale of all of the Company’s Visa class B shares. 31 Non-interest Expense The following table summarizes non-interest expense for the periods indicated: Years ended $ Change % Change (Dollars in thousands) December 31, 2023 December 31, 2022 Compensation and employee benefits $ 309,048 $ 319,303 $ (10,255) (3 %) Occupancy and equipment 43,578 43,261 317 1 % Advertising and promotions 15,430 14,324 1,106 8 % Data processing 33,752 30,823 2,929 10 % Other real estate owned and foreclosed assets 119 77 42 55 % Regulatory assessments and insurance 28,712 12,904 15,808 123 % Core deposit intangibles amortization 9,731 10,658 (927) (9 %) Other expenses 86,988 87,518 (530) (1 %) Total non-interest expense $ 527,358 $ 518,868 $ 8,490 2 % Total non-interest expense of $527 million for 2023 increased $8.5 million, or 2 percent, over the same period in the prior year.
Included in the 2023 gain on sale of securities was $1.7 million of gain on the sale of all of the Company’s Visa class B shares. 31 Non-interest Expense The following table summarizes non-interest expense for the periods indicated: Years ended $ Change % Change (Dollars in thousands) December 31, 2024 December 31, 2023 Compensation and employee benefits $ 336,906 $ 309,048 $ 27,858 9 % Occupancy and equipment 47,055 43,578 3,477 8 % Advertising and promotions 16,132 15,430 702 5 % Data processing 36,887 33,752 3,135 9 % Other real estate owned and foreclosed assets 217 119 98 82 % Regulatory assessments and insurance 24,194 28,712 (4,518) (16 %) Core deposit intangibles amortization 12,757 9,731 3,026 31 % Other expenses 104,320 86,988 17,332 20 % Total non-interest expense $ 578,468 $ 527,358 $ 51,110 10 % Total non-interest expense of $578 million for 2024 increased $51.1 million, or 10 percent, over the prior year.
Financial Statements and Supplementary Data.” 35 Lending Activity The Company focuses its lending activities primarily on the following types of loans: 1) first-mortgage, conventional loans secured by residential properties, particularly single-family; 2) commercial lending, including agriculture and public entities; and 3) installment lending for consumer purposes (e.g., home equity, automobile, etc.).
Based on the Company’s evaluation of its investments in non-marketable equity securities and equity securities without readily determinable fair values as of December 31, 2024, the Company determined that none of such securities were impaired. 35 Lending Activity The Company focuses its lending activities primarily on the following types of loans: 1) first-mortgage, conventional loans secured by residential properties, particularly single-family; 2) commercial lending, including agriculture and public entities; and 3) installment lending for consumer purposes (e.g., home equity, automobile, etc.).
December 31, 2023 December 31, 2022 (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value New York $ 372,926 334,583 382,529 324,651 California 113,983 104,960 117,284 102,804 Texas 125,906 114,753 128,590 113,444 Michigan 82,575 79,012 89,372 82,649 Washington 98,239 90,413 103,106 92,411 All other states 958,274 846,862 998,792 852,486 Total $ 1,751,903 1,570,583 1,819,673 1,568,445 34 The following table presents the carrying amount and weighted-average yield of available-for-sale and held-to-maturity debt securities by contractual maturity at December 31, 2023.
December 31, 2024 December 31, 2023 (Dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value New York $ 370,189 329,252 372,926 334,583 Texas 118,219 104,938 125,906 114,753 California 111,324 101,021 113,983 104,960 Washington 92,198 82,872 98,239 90,413 Colorado 79,987 69,527 82,575 79,012 All other states 919,670 792,228 958,274 846,862 Total $ 1,691,587 1,479,838 1,751,903 1,570,583 34 The following table presents the carrying amount and weighted-average yield of available-for-sale and held-to-maturity debt securities by contractual maturity at December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed17 unchanged
Biggest changeEstimated Sensitivity Rate Scenarios One Year Two Years -400 bp Rate ramp 1.19 % 3.33 % -200 bp Rate ramp 1.45 % 3.25 % -200 bp Rate shock 0.85 % 2.19 % -100 bp Rate shock 1.80 % 5.77 % +100 bp Rate shock (4.94 %) (3.55 %) +200 bp Rate shock (9.42 %) (6.49 %) +200 bp Rate ramp (6.18 %) (6.86 %) +400 bp Rate ramp (6.21 %) (10.67 %) The preceding sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results.
Biggest changeEstimated Sensitivity Rate Scenarios One Year Two Years -400 bp Rate ramp 1.20 % 1.42 % -200 bp Rate ramp 0.92 % (0.31 %) -200 bp Rate shock (0.11 %) (2.99 %) -100 bp Rate shock 0.19 % (0.86 %) +100 bp Rate shock 2.48 % 3.26 % +200 bp Rate shock 1.52 % 3.15 % +200 bp Rate ramp 1.74 % 2.76 % +400 bp Rate shock 1.75 % 0.57 % The preceding sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results.
Other non-parallel rate movement scenarios are also modeled to determine the potential impact on net interest income. The additional scenarios are adjusted as the economic environment changes and provide ALCO additional interest rate risk monitoring tools to evaluate current market conditions. 55 The following is indicative of the Company’s overall NII sensitivity analysis as of December 31, 2023.
Other non-parallel rate movement scenarios are also modeled to determine the potential impact on net interest income. The additional scenarios are adjusted as the economic environment changes and provide ALCO additional interest rate risk monitoring tools to evaluate current market conditions. 57 The following is indicative of the Company’s overall NII sensitivity analysis as of December 31, 2024.
The Company’s NII sensitivity remained within policy limits at December 31, 2023.
The Company’s NII sensitivity remained within policy limits at December 31, 2024.

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