On Tuesday, Keefe, Bruyette & Woods maintained its Market Perform rating on Glacier Bancorp (NYSE:GBCI) with a steady price target of $62.00. The firm's analysis followed Glacier Bancorp's announcement of its all-stock acquisition of Bank of Idaho (OTCXC: BOID), a strategic move that adds approximately $1.3 billion in assets and expands the company's presence in the Pacific Northwest, particularly in Idaho and Washington.
The acquisition, valued at $245 million, is considered a "bite-sized transaction" by the firm, which is well-aligned with Glacier Bancorp's historical approach to growth through acquisitions. Keefe, Bruyette & Woods noted the deal's low execution risk, as it represents less than 5% of Glacier Bancorp's legacy size. The firm also highlighted the financial appeal of the acquisition, pointing out an earnback period of less than one year.
Glacier Bancorp's strategic rationale for the acquisition was emphasized by the analysts, who pointed out that the deal would strengthen the bank's market share in Idaho, the fastest-growing state in the U.S. Post-acquisition, Glacier Bancorp is expected to hold the number three position in deposit market share within the state.
The transaction marks Glacier Bancorp's twelfth in the past decade and its twenty-sixth bank deal since the year 2000. The consistent strategy of incremental growth through similar transactions has become a characteristic move for Glacier Bancorp, with Keefe, Bruyette & Woods suggesting that investors will likely appreciate the transaction due to its strategic logic, financial attractiveness, and minimal tangible book value dilution.
In other recent news, Glacier Bancorp has declared a quarterly dividend of $0.33 per share, marking the 159th consecutive payout to its shareholders. The company also reported a 15% and 14% increase in earnings and net income respectively in the recent quarter, largely due to the acquisition of six Montana branches from Heartland Financial (NASDAQ:HTLF) and a significant expansion in the loan portfolio.
Executive leadership changes were also announced with Ryan Screnar and Lee Groom assuming new roles.
Analyst firms Piper Sandler and Truist Securities revised their outlooks on Glacier Bancorp, citing core deposit strength, potential for mergers and acquisitions, and favorable loan repricing. The company is also planning to close and convert two additional acquisitions in 2024, adding around $1.2 billion in assets.
Despite potential slowdowns in the fourth quarter and lighter organic growth, Glacier Bancorp's financial metrics reflect a solid performance. Approximately 7% of the loan portfolio is indexed to prime, with expectations for increased loan yields due to re-pricing dynamics.
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