Earnings

Glacier Bancorp Puts Special Dividends And Buybacks On The Table As Capital Builds

The CEO said all capital options are now in scope after a record $105 million quarter and a net interest margin above 4%.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Glacier Bancorp Puts Special Dividends And Buybacks On The Table As Capital Builds

Glacier Bancorp, the Kalispell, Montana, bank holding company, is weighing special dividends and share buybacks because its capital is piling up, CEO Randy Chesler said on the bank's third-quarter earnings call Friday. The comments came after the bank reported record net income of $105 million, the first quarter above $100 million in its history.

"Absolutely in our scope"

A Piper Sandler analyst pointed out that Glacier's stock trades at a multiple not seen in a while, on both an absolute and a relative basis, and asked whether management had any appetite to authorize a repurchase.

Chesler tied the answer to the bank's capital outlook, which he called "substantial given the earnings growth." The bank will "take a look at all options, including special dividends and share buybacks," he said, because it wants "all levers available to us." He called the topic "absolutely in our scope."

GBCI shares rose 4.26% to $47.95 in Friday trading, from a prior close of $45.99. The bank's market value was $6.0 billion.

A record quarter behind the capital build

Net income rose 7% from the second quarter and 54% from a year earlier. Diluted earnings per share were 80 cents, up 40% from the prior-year third quarter.

Net interest income climbed to $290 million, up 5% from the second quarter and 29% from a year ago. The tax-equivalent net interest margin, the spread between what the bank earns on loans and securities and what it pays on funding, reached 4.01%, the 11th straight quarter of expansion.

Total deposits were $25.3 billion, up 16% from a year earlier. Loans were $21.6 billion, up 5% annualized from the second quarter. Return on average assets rose to 1.31% from 1.25% in the prior quarter.

The board raised the quarterly dividend by 2 cents, or 6%, to 35 cents a share. Chesler said that makes 50 increases over the bank's history.

Margin tailwinds and expense guidance

Deputy CFO and Treasurer Byron Pollin said about $3.5 billion of loans will reprice up 125 to 150 basis points over the next 12 months, and securities cash flows are being reinvested at roughly 350 basis points above the runoff yield. He expects the margin to keep expanding through 2027, though a modest rise in deposit costs could shave the quarterly gain to a bit under 10 basis points.

Chief Financial Officer Ron Copher kept fourth-quarter expense guidance at $187 million to $192 million, likely toward the high end, and full-year guidance at $750 million to $760 million. He said he is confident in an efficiency ratio of 54% to 55% in the fourth quarter. He also expects a tax rate around 21% for the quarter and the full year.

Chesler gave no commitment beyond saying the matter is in scope; the fourth-quarter call is where Copher said he would speak further on efficiency and budgeting.

Sources

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