Unassociated Document

KALISPELL, MONTANA - Glacier Bancorp, Inc. (Nasdaq: GBCI) reported record net earnings of $18.146 million for the fourth quarter, an increase of $1.116 million, or 7 percent, over the $17.030 million for the fourth quarter of 2006. Diluted earnings per share of $.34 for the quarter is an increase of 6 percent over the diluted earnings per share of $.32 for the same quarter of 2006. Net earnings for the fourth quarter of 2007 and 2006 were reduced by $488 thousand, or $.01 per share, and $446 thousand, or $.01 per share, respectively, for stock-based compensation expense. “I can’t thank enough, the 1600 individuals who make up this Company for the remarkable job they did in 2007,” said Mick Blodnick, President and Chief Executive Officer. “They produced record results for the quarter and full year in one of the most challenging banking environments of the past two decades.” Annualized return on average assets and return on average equity for the quarter were 1.49 percent and 13.82 percent, respectively, which compares with prior year returns for the fourth quarter of 1.51 percent and 15.01 percent.

Net earnings for the year ended December 31, 2007 were $68.603 million, which is an increase of $7.472 million, or 12 percent over the prior year. Diluted earnings per share of $1.28 is an increase of 5.8 percent over the $1.21 earned in 2006. Included in 2007 net earnings is a $1.0 million gain (pre-tax gain of $1.6 million) from the January 19, 2007 sale of Western Security Bank’s Lewistown branch, a requirement imposed by bank regulators to complete the acquisition of Citizens Development Company (“CDC”). Also included in 2007 net earnings is approximately $500 thousand of non-recurring expenses and costs associated with the January 26, 2007 merger of three of the five CDC subsidiaries into Glacier Bancorp, Inc.’s subsidiaries. Effective with its acquisition on April 30, 2007, North Side State Bank (“North Side”) of Rock Springs, Wyoming was merged into 1st Bank, Glacier Bancorp, Inc.’s subsidiary bank in Evanston, Wyoming. On June 21, 2007, the remaining two CDC subsidiaries, i.e., First National Bank of Lewistown and Western Bank of Chinook, merged to become First Bank of Montana. During the second quarter of 2007, each of the combining CDC bank’s operating systems and First National Bank of Morgan’s operating systems were converted to the core operating system used by Glacier Bancorp, Inc.’s subsidiaries.

	December 31,			December 31,			$ change from
	2007			2006			December 31,
Assets ($ in thousands)	(unaudited)			(audited)			2006

Cash on hand and in banks	$	145,697			136,591			9,106
Investments, interest bearing deposits,
FHLB stock, FRB stock, and Fed Funds		782,236			862,063			(79,827	)
Loans:
Real estate		725,854			789,843			(63,989	)
Commercial		2,247,303			1,850,417			396,886
Consumer and other		638,378			574,523			63,855
Total loans		3,611,535			3,214,783			396,752
Allowance for loan losses		(54,413	)		(49,259	)		(5,154	)
Total loans net of allowance for losses		3,557,122			3,165,524			391,598
Other assets		332,518			307,120			25,398
Total Assets	$	4,817,573			4,471,298			346,275

At December 31, 2007, total loans were $3.612 billion, an increase of $124 million, or 3.6 percent (14 percent annualized) over total loans of $3.487 billion at September 30, 2007 with two loan categories showing increases. Commercial loans grew the most with an increase of $218 million, or 11 percent, followed by consumer loans, which are primarily comprised of home equity loans, increasing by $12 million, or 2.0 percent. Real estate loans have decreased $106 million, or 13 percent from the third quarter of 2007. Total loans increased $397 million, or 12 percent from December 31, 2006. During the year, commercial loans have increased $397 million, or 21 percent, consumer loans grew by $64 million, or 11 percent, while real estate loans decreased $64 million, or 8.1 percent. “We were pleased with the growth in our loan portfolio during this past year,” said Blodnick. “Excluding the loans we acquired in the North Side State Bank acquisition, our organic loan growth was 11 percent - slightly higher than our goal of 10 percent.”

	December 31,		December 31,		$ change from
	2007		2006		December 31,
Liabilities ($ in thousands)	(unaudited)		(audited)		2006

Non-interest bearing deposits	$	788,087		829,355		(41,268	)
Interest bearing deposits		2,396,391		2,378,178		18,213
Advances from Federal Home Loan Bank		538,949		307,522		231,427
Securities sold under agreements to
repurchase and other borrowed funds		401,621		338,986		62,635
Other liabilities		45,390		42,555		2,835
Subordinated debentures		118,559		118,559		-
Total liabilities	$	4,288,997	$	4,015,155		273,842

Non-interest bearing deposits decreased $41 million, or 5.0 percent, since December 31, 2006 and decreased by $32 million, or 3.9 percent since September 30, 2007. Interest bearing deposits decreased $151 million from September 30, 2007. The December 31, 2007 balance of interest bearing deposits includes $1 million in broker originated CD’s. Since December 31, 2006, interest bearing deposits, excluding a decrease of $172 million in CD’s from broker sources, increased $190 million, or 9 percent. Federal Home Loan Bank (“FHLB”) advances increased $231 million from December 31, 2006 and $287 million from September 30, 2007. The increase in advances is primarily the result of the decrease in CD’s from broker sources to more favorable rates at the FHLB. Repurchase agreements and other borrowed funds were $402 million at December 31, 2007, an increase of $63 million from December 31, 2006, and a decrease of $6 million from September 30, 2007. Included in this latter category are U.S. Treasury auction funds of $216 million at December 31, 2007, an increase of $11 million from September 30, 2007, and an increase of $54 million from December 31, 2006.

	December 31,			December 31,			$ change from
Stockholders' equity	2007			2006			December 31,
($ in thousands except per share data)	(unaudited)			(unaudited)			2006

Common equity	$	525,459		$	453,074			72,385
Accumulated other comprehensive income		3,117			3,069			48
Total stockholders' equity		528,576			456,143			72,433
Core deposit intangible, net, and goodwill		(154,507	)		(144,466	)		(10,041	)
Tangible stockholders' equity	$	374,069			311,677			62,392

Stockholders' equity to total assets		10.97	%		10.21	%
Tangible stockholders' equity to total tangible assets		8.02	%		7.21	%
Book value per common share	$	9.85			8.72			1.13
Market price per share at end of quarter	$	18.74			24.44			(5.70	)

	Three months ended December 31,
Revenue summary	2007			2006
($ in thousands)	(unaudited)			(audited)			$ change		% change
Net interest income
Interest income	$	79,117		$	73,549		$	5,568		8	%
Interest expense		30,918			28,200		$	2,718		10	%
Net interest income		48,199			45,349			2,850		6	%

Non-interest income
Service charges, loan fees, and other fees		11,790			10,103			1,687		17	%
Gain on sale of loans		3,330			2,867			463		16	%
Other income		1,117			1,056			61		6	%
Total non-interest income		16,237			14,026			2,211		16	%
	$	64,436		$	59,375		$	5,061		9	%

Tax equivalent net interest margin		4.52	%		4.55	%

Net interest income for the quarter increased $2.850 million, or 6.3 percent, over the same period in 2006, and increased $1.216 million, or 2.6 percent, from the third quarter of 2007. Total interest income increased $5.568 million from the prior year’s quarter, or 7.6 percent, while total interest expense was $2.718 million, or 9.6 percent higher. The increase in interest expense is primarily attributable to the volume and rate increases in interest bearing deposits. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.52 percent which is 2 basis points higher than the third quarter of 2007, and 3 basis points lower than the 4.55 percent result for the fourth quarter of 2006. “We are pleased with the net interest margin results for the year, and especially the fourth quarter given industry trends in the costs of funding,” said Ron Copher, Chief Financial Officer.

Non-interest expense increased by $2.535 million, or 7.9 percent, from the same quarter of 2006. Compensation and benefit expense increased $307 thousand, or 1.7 percent, which is primarily attributable to increased staffing levels, including staffing from the acquisition of North Side in 2007, new branches, as well as increased compensation, including commissions tied to increased production, and benefits, including health insurance. The number of full-time-equivalent employees has increased from 1,356 to 1,480, a 9.1 percent increase since December 31, 2006. Occupancy and equipment expense increased $571 thousand, or 13 percent, reflecting the acquisition of North Side, cost of additional branch locations and facility upgrades.

“All our Banks continue to focus a significant amount of time on maintaining our credit quality,” said Blodnick. “We have been very fortunate to date with these results and plan to continue working very hard to maintain this asset quality level.” Non-performing assets as a percentage of total bank assets at December 31, 2007 were at .27 percent, up from the third quarter results of .24, and up from .19 percent at December 31, 2006. These ratios compare favorably to the Federal Reserve Bank Peer Group average of .67 percent at September 30, 2007, the most recent information available. The allowance for loan losses was 409 percent of non-performing assets at December 31, 2007, down from 554 percent a year ago. The allowance, including $639 thousand from acquisitions, has increased $5.2 million, or 10.5 percent, from a year ago. The allowance of $54.413 million is 1.51 percent of December 31, 2007 total loans outstanding, down from 1.53 percent in the fourth quarter last year. The fourth quarter provision for loan losses expense was $2.960 million, an increase of $1.608 million from the same quarter in 2006. Charged off loans exceeded recovery of previously charged-off loans during the quarter by $1.2 million. Loan growth, average loan size, and credit quality considerations will determine the level of additional provision expense.

	Twelve months ended December 31,
Revenue summary	2007			2006
($ in thousands)	(unaudited)			(audited)			$ change			% change
Net interest income
Interest income	$	304,760		$	253,326		$	51,434			20	%
Interest expense		121,291			95,038		$	26,253			28	%
Net interest income		183,469			158,288			25,181			16	%

Non-interest income
Service charges, loan fees, and other fees		45,486			37,072			8,414			23	%
Gain on sale of loans		13,283			10,819			2,464			23	%
Loss on sale of investments		(8	)		(3	)		(5	)		167	%
Other income		6,057			3,954			2,103			53	%
Total non-interest income		64,818			51,842			12,976			25	%
	$	248,287		$	210,130		$	38,157			18	%

Tax equivalent net interest margin		4.50	%		4.44	%

Net interest income for the year increased $25.181 million, or 16 percent, over 2006. Total interest income increased $51.434 million, or 20 percent, while total interest expense increased $26.253 million, or 28 percent. The increase in interest expense is primarily attributable to the volume and rate increases in interest bearing deposits. The net interest margin as a percentage of earning assets, on a tax equivalent basis, was 4.50 percent which is an increase of 6 basis points over the 4.44 percent for 2006. The net interest margin calculation has been revised to account for intercompany elimination entries and previously reported net interest margins have been adjusted to reflect such change.

Total non-interest income increased $12.976 million, or 25 percent in 2007. Fee income increased $8.414 million, or 23 percent, over last year, driven primarily by an increased number of loan and deposit accounts, acquisitions, and additional customer products and services offered. Gain on sale of loans increased $2.464 million, or 23 percent, from last year. Loan origination volume, especially in the first half of 2007, was robust versus historical standards. Other income increased $2.103 million, or 53 percent, over the same period in 2006. Such increase includes a gain of $1.6 million from the January 19, 2007 sale of Western Security Bank’s Lewistown branch, a regulatory requirement imposed to complete the acquisition of CDC.

Non-interest expense increased by $25.367 million, or 23 percent, from 2006. Compensation and benefit expense increased $13.651 million, or 21 percent, which is primarily attributable to increased staffing levels, including staffing from the acquisitions of First National Bank of Morgan and CDC during 2006 and North Side in 2007, de novo branches, increased compensation, including production based commissions, and benefits, including health insurance, and overtime associated with the merger and operating systems conversions in the first half of 2007. Included in 2007 are approximately $500,000 of non-recurring expenses and costs associated with the January 26, 2007 merger of three of the five CDC subsidiaries into Glacier Bancorp, Inc.’s subsidiaries. Occupancy and equipment expense increased $3.884 million, or 25 percent, reflecting the acquisitions, cost of additional locations and facility upgrades. Other expenses increased $6.687 million, or 25 percent, primarily from acquisitions, additional marketing expenses, costs associated with new branch offices and other general and administrative costs. The efficiency ratio (non-interest expense/net interest income plus non-interest income) increased to 56 percent from 54 percent during 2006.

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

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

	December 31,			December 31,
($ in thousands except per share data)	2007			2006
	(unaudited)			(audited)
Assets:
Cash on hand and in banks	$	145,697			136,591
Federal funds sold		135			6,125
Interest bearing cash deposits		81,777			30,301
Investment securities, available-for-sale		700,324			825,637

Net loans receivable:
Real estate loans		725,854			789,843
Commercial loans		2,247,303			1,850,417
Consumer and other loans		638,378			574,523
Allowance for losses		(54,413	)		(49,259	)
Total loans, net		3,557,122			3,165,524

Premises and equipment, net		123,749			110,759
Real estate and other assets owned, net		2,043			1,484
Accrued interest receivable		26,168			25,729
Core deposit intangible, net		13,963			14,750
Goodwill		140,544			129,716
Other assets		26,051			24,682
	$	4,817,573			4,471,298

Liabilities and stockholders' equity:
Non-interest bearing deposits	$	788,087			829,355
Interest bearing deposits		2,396,391			2,378,178
Advances from Federal Home Loan Bank of Seattle		538,949			307,522
Securities sold under agreements to repurchase		178,041			170,216
Other borrowed funds		223,580			168,770
Accrued interest payable		13,281			11,041
Deferred tax liability		250			1,927
Subordinated debentures		118,559			118,559
Other liabilities		31,859			29,587
Total liabilities		4,288,997			4,015,155

Preferred shares, $.01 par value per share. 1,000,000 shares authorized
None issued or outstanding		-			-
Common stock, $.01 par value per share. 117,187,500 shares authorized		536			523
Paid-in capital		374,728			344,265
Retained earnings - substantially restricted		150,195			108,286
Accumulated other comprehensive income		3,117			3,069
Total stockholders' equity		528,576			456,143
	$	4,817,573			4,471,298
Number of shares outstanding		53,646,480			52,302,820
Book value of equity per share		9.85			8.72

	Three months ended December 31,						Twelve months ended December 31,
($ in thousands except per share data)	2007			2006			2007			2006
	(unaudited)			(audited)			(unaudited)			(audited)
Interest income:
Real estate loans	$	14,405			15,280			59,664			52,219
Commercial loans		42,443			36,524			157,644			119,215
Consumer and other loans		12,498			11,417			48,105			40,284
Investment securities and other		9,771			10,328			39,347			41,608
Total interest income		79,117			73,549			304,760			253,326

Interest expense:
Deposits		20,673			17,744			81,459			58,147
Federal Home Loan Bank of Seattle advances		4,778			5,907			18,897			20,460
Securities sold under agreements to repurchase		1,821			2,053			7,445			6,618
Subordinated debentures		1,884			1,818			7,537			6,050
Other borrowed funds		1,762			678			5,953			3,763
Total interest expense		30,918			28,200			121,291			95,038

Net interest income		48,199			45,349			183,469			158,288
Provision for loan losses		2,960			1,352			6,680			5,192
Net interest income after provision for loan losses		45,239			43,997			176,789			153,096

Non-interest income:
Service charges and other fees		10,130			8,200			37,931			29,701
Miscellaneous loan fees and charges		1,660			1,903			7,555			7,371
Gain on sale of loans		3,330			2,867			13,283			10,819
Loss on sale of investments		-			-			(8	)		(3	)
Other income		1,117			1,056			6,057			3,954
Total non-interest income		16,237			14,026			64,818			51,842
Non-interest expense:
Compensation, employee benefits and related expenses		18,684			18,377			79,070			65,419
Occupancy and equipment expense		5,042			4,471			19,152			15,268
Outsourced data processing expense		710			766			2,755			2,788
Core deposit intangibles amortization		786			793			3,202			2,024
Other expenses		9,242			7,522			33,738			27,051
Total non-interest expense		34,464			31,929			137,917			112,550
Earnings before income taxes		27,012			26,094			103,690			92,388

Federal and state income tax expense		8,866			9,064			35,087			31,257
Net earnings	$	18,146			17,030			68,603			61,131

Basic earnings per share		0.34			0.33			1.29			1.23
Diluted earnings per share		0.34			0.32			1.28			1.21
Dividends declared per share		0.13			0.12			0.50			0.45
Return on average assets (annualized)		1.51	%		1.51	%		1.49	%		1.52	%
Return on average equity (annualized)		13.74	%		15.01	%		13.82	%		16.00	%
Average outstanding shares - basic		53,681,922			52,241,656			53,236,489			49,727,299
Average outstanding shares - diluted		54,030,134			53,114,881			53,748,398			50,497,177

	For the Three months ended 12-31-07							For the Twelve months ended 12-31-07
			Interest		Average					Interest		Average
AVERAGE BALANCE SHEET	Average		and		Yield/			Average		and		Yield/
(Unaudited - $ in Thousands)	Balance		Dividends		Rate			Balance		Dividends		Rate
ASSETS
Real Estate Loans	$	799,851		14,405		7.20	%	$	798,841		59,664		7.47	%
Commercial Loans		2,099,362		42,443		8.02	%		1,957,252		157,644		8.05	%
Consumer and Other Loans		628,696		12,498		7.89	%		604,234		48,105		7.96	%
Total Loans		3,527,909		69,346		7.80	%		3,360,327		265,413		7.90	%
Tax -Exempt Investment Securities (1)		263,747		3,220		4.88	%		272,042		13,427		4.94	%
Other Investment Securities		564,589		6,551		4.64	%		574,913		25,920		4.51	%
Total Earning Assets		4,356,245		79,117		7.21	%		4,207,282		304,760		7.24	%
Goodwill and Core Deposit Intangible		154,727							149,934
Other Non-Earning Assets		264,911							248,866
TOTAL ASSETS	$	4,775,883						$	4,606,082

LIABILITIES AND STOCKHOLDERS' EQUITY
NOW Accounts	$	478,743		1,208		1.00	%	$	461,341		4,708		1.02	%
Savings Accounts		267,957		675		1.00	%		268,175		2,679		1.00	%
Money Market Accounts		789,332		6,835		3.44	%		754,995		27,248		3.61	%
Certificates of Deposit		1,006,664		11,955		4.71	%		1,000,797		46,824		4.68	%
FHLB Advances		399,639		4,778		4.74	%		382,243		18,897		4.94	%
Repurchase Agreements
and Other Borrowed Funds		460,743		5,467		4.71	%		412,237		20,935		5.08	%
Total Interest Bearing Liabilities		3,403,078		30,918		3.60	%		3,279,788		121,291		3.70	%
Non-interest Bearing Deposits		791,465							781,447
Other Liabilities		57,367							48,454
Total Liabilities		4,251,910							4,109,689

Common Stock		537							532
Paid-In Capital		373,921							361,003
Retained Earnings		146,142							132,352
Accumulated Other
Comprehensive Income		3,373							2,506
Total Stockholders' Equity		523,973							496,393
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	4,775,883						$	4,606,082

Net Interest Income			$	48,199						$	183,469
Net Interest Spread						3.61	%						3.54	%
Net Interest Margin						4.39	%						4.36	%
Net Interest Margin (Tax Equivalent)						4.52	%						4.50	%
Return on Average Assets (annualized)						1.51	%						1.49	%
Return on Average Equity (annualized)						13.74	%						13.82	%

FOR IMMEDIATE RELEASE	Contact: Michael J. Blodnick
	(406) 751-4701
	Ron J. Copher
	(406) 751-7706

	North Side
(Unaudited - $ in thousands)	State Bank

Total assets		128,252
Investments		61,360
Fed funds sold		10,100
Net loans		38,773
Non-interest bearing deposits		22,101
Interest bearing deposits		77,467

	Three months						Twelve months
	ended December 31,						ended December 31,
Earnings Summary	(unaudited)			(audited)			(unaudited)			(audited)
($ in thousands, except per share data)	2007			2006			2007			2006

Net earnings	$	18,146		$	17,030		$	68,603		$	61,131
Diluted earnings per share	$	0.34		$	0.32		$	1.28		$	1.21
Return on average assets (annualized)		1.51	%		1.51	%		1.49	%		1.52	%
Return on average equity (annualized)		13.74	%		15.01	%		13.82	%		16.00	%

	Three months ended December 31,
Non-interest expense summary	2007		2006
($ in thousands)	(unaudited)		(audited)		$ change			% change

Compensation and employee benefits	$	18,684	$	18,377	$	307			2	%
Occupancy and equipment expense		5,042		4,471		571			13	%
Outsourced data processing		710		766		(56	)		-7	%
Core deposit intangibles amortization		786		793		(7	)		-1	%
Other expenses		9,242		7,522		1,720			23	%
Total non-interest expense	$	34,464	$	31,929	$	2,535			8	%

	December 31,			December 31,
Credit quality information	2007			2006
($ in thousands)	(unaudited)			(audited)

Allowance for loan losses	$	54,413		$	49,259

Non-performing assets		13,288			8,894

Allowance as a percentage of non performing assets		409	%		554	%

Non-performing assets as a percentage of total bank assets		0.27	%		0.19	%

Allowance as a percentage of total loans		1.51	%		1.53	%

Net charge-offs as a percentage of loans		0.060	%		0.021	%