Glacier Bancorp Inc. has no plans to moderate its appetite for acquisitions, even after announcing its third deal this year and seventh over the last three years.
On Sept. 30, Glacier announced an agreement to buy Lake Havasu City, Ariz.-based State Bank Corp. Earlier in the year, the bank closed its acquisition of FNB Bancorp and its purchase of Heritage Bancorp. Both of those deals closed in less than four months, and executives expect a similar timeline for State Bank, guiding for a close in the late fourth quarter or early 2020 first quarter.
"This is a record year for us, so the door is always open, but I think right now we're really happy with the transactions that we announced in 2019," said CEO Randy Chesler during an Oct. 1 call for the State Bank deal. "Our focus now is to do a great job with this transaction, but we continue to talk to folks and keep the door open."
Later in the deal call, an analyst asked about capital uses looking forward, and Chesler said the bank focuses most intently on the bank's common equity Tier 1 ratio. He said the bank remains committed to a strong dividend payout and that the latest deal does not change its plans for shareholder return or strategic acquisitions.
During prepared remarks, Chesler offered a similar steady-as-it-goes mantra, saying the State Bank acquisition fits Glacier's preferred model of targeting "good banks in good markets with good people."
On financial metrics, Glacier Bancorp did not disclose what the dilution would have been without implementing the current expected credit loss, or CECL, accounting standard — something that has been a point of focus in other recent bank deals. Glacier's acquisition of State Bank carries dilution of 0.56% on a tangible book value per share basis with an expected earnback of 1.9 years.
Asked about CECL on the call, management said the impact was "very minimal, if negligible" considering State Bank's strong credit quality and its small size relative to Glacier's total assets.
