Good day, ladies and gentlemen, and welcome to the Glacier Bancorp First Quarter Earnings Call. (Operator Instructions) As a reminder, today's program is being recorded. I would now like to introduce your host for today's conference. President and CEO of Glacier Bancorp, Mick Blodnick. Please proceed, sir.

Welcome and thank you for joining us today. With me this morning is Ron Copher, our Chief Financial Officer; Don Chery, our Chief Administrative Officer; Barry Johnston, our Chief Credit Administrator; and Angela Dose, our Principal Accounting Officer. Yesterday, we reported earnings for the first quarter of 2014. Net income for the quarter was $26,700,000. That’s an increase of 29% compared to the $20,800,000 earned in last year's quarter. To produced diluted earnings per share for the quarter of $0.36, that compares to $0.29 in the prior year quarter, a 24% increase. As we assessed our first quarter performance, a couple of things stood out. It was a record quarter for earnings, which is unusual for the first quarter of the year. We grew our loan portfolio, something that has and always been possible during the winter months. Our net interest margin move back above 4%, almost to 1% improvement the past year, as we continue to get a lift, from not only a reduction in premium amortization expense, but also the change in the mix of our earnings assets. And finally credit quality trended better, especially in the area of net charge-offs. Offsetting these highlights however, was a decrease in mortgage origination income, as mortgage volumes took a substantial drop compared to what we've generated in the same quarter last year. Nevertheless, the benefit we received this past quarter from lower premium amortization was more than enough to cover the loss of fee income from mortgages. It was a clean quarter with no one-time gains or losses or other non-recurring income or expense items. We generated a very respectable return on average assets for the quarter of 1.39% and return on tangible equity of 13.07%. Both of these performance ratios were the best we produced in over five years…

(Operator Instructions) Our first question will be coming from the line of Brett Rabatin from Sterne, Agee. Your line is open. Brett Rabatin – Sterne, Agee & Leach: Hi, Mick. Good morning.

Hi Brett. Brett Rabatin – Sterne, Agee & Leach: Wanted to, I guess first start with the loan portfolio and thinking about growth and you mentioned in multifamily in the 5% growth target. Can you talk about how much you think, you might grow multifamily this year and where you're seeing in pricing there and then just generally how much [eq] pickup, you think you'll see in the portfolio maybe in the second quarter here?

As far as the multifamily side of it. I mean, that was some of what surprise to us because it hasn't been a portion of the loan portfolio that we've historically have had a lot of real successes. It's not been a piece of the portfolio or section of the portfolio breadth that we've actually gone after in a big, big way. We just happen to have a couple of nice transactions during the quarter that came from existing customers. As far as, our ability to continue to grow that. I'm just really not sure; I just don't think that there is enough of those kind of opportunities within our market. There's a lot of players that really do focus on multifamily lending that seem to be all over that type of loan and that just happen in the past with us. So I think, we were fortunate that we saw an increase this last quarter, but I'm not expecting that's going to be an area. It would be greater, if we could continue to grow because it is a nice piece of diversification as I say, in my remarks away some of our more traditional lines of loans, but I just don't believe that we are going to see that they ramp up a whole bunch, more the rest of the year. In regards to [eq], we are coming to our obviously our two best quarter. I haven't put up percentage on it. I don't know Barry, if you have this as far as what we hope to increase but let's face it. The overall portfolio is twice as large as it was a year ago and that's come primarily from the addition of the two new banks What we will get over the next two quarters, with the operating lines being drawn on. It's going to definitely add to [eq] outstanding. But as far as a percentage, my best guess is that over the next two quarters that we will maybe see a 10% to 15% increase from the outstanding at the end of the year. So you take that number, you're probably talking $25 million to $35 million breadth and then by the end of the year. Our expectations of everything goes away most of those lines to be paid back down, but we'll have this for over the next six to seven months. We will have this increase in [eq] lines outstanding. And again, my guess would be that's going to range somewhere in the $25 million to $35 million range. Brett Rabatin – Sterne, Agee & Leach: Okay. I'm sorry, great color and the other thing I was just curious about, you talked about holding the margin at 4%. Can you maybe talk a little bit about, the loan portfolio yields going forward. I mean, keep them portfolio with the present yield and then any additional benefit you think, you might get on a premium am going forward?

If we do get any benefit on premium am, it's going to be much smaller. It's even going to be much smaller, I mean. If we go back four quarters and I look at these numbers recently. We had about $3 million reduction in the first quarter or maybe that was, yes that was first quarter or second quarter of last year followed by a $3.2 million reduction followed by a $6 million in the fourth quarter and then like I said $1.4 million this quarter. We could see some reduction because I think, if you looked at March's number and carry March into the next three months that would probably give you a slight reduction, but believe I think that most of the gains there have already been noted and we've already received most of the benefit coming from premium amortization. On the loan side; it appears as though, we've kind of hit that inflection point where we haven't seen yields on the loan portfolio change much here over the last two quarters that little bit of reduction in the fourth quarter, but as I noted this last quarter. The yield on the loan portfolio was flat. I don't expect that there is a lot of further reduction. It seems like at the margin. The yield that we're putting new loans on is not materially depressing that overall loan yield and that's probably makes some sense. I mean we've gone through a number of years now with that, that reduction in yield has been absolutely been an every quarter event, but I think again I think we've hit that inflection point now and we're expecting that yield kind of holds in this range, not obviously going to see any kind of increase in that yield until rates start moving up, but don't believe we're going to see a lot of additional contraction. Now what will benefit us more than anything in the margin is the change of the mix. I mean, if we can as I said drive more and more volume into these higher yielding loan assets and out from the investment portfolio that obviously will do us some good and that's really where the focus is right now, but I just again make sure that we're doing everything we can, to try to generate more loans and maybe take pressure up about having to buy more and more securities. Brett Rabatin – Sterne, Agee & Leach: Okay, great. I appreciate that color.

You bet Brett.

Thank you. Our next question will be coming from the line of Jeff Rulis from D.A. Davidson. Your line is open. Jeff Rulis – D.A. Davidson: Thanks, good morning.

Hi Jeff. Jeff Rulis – D.A. Davidson: Hi Mick. Just a question on the, I guess visibility on the gain on sale one, I know that's a one a tough one to predict but, kind of approaching a bottom here. Is that to debt, I guess approach zero, any sort of outlook on that front?

You mean gain on sale, on the security portfolio? Jeff Rulis – D.A. Davidson: No, within in the mortgage banking.

Oh! The gain on sale on the fee income side. Jeff Rulis – D.A. Davidson: Right, yes.

Yes, I mean we've, as I said. I mean, there's 60% drop in mortgage origination fee income just from the same quarter last year that's much. I mean, we were expecting that was going to be down pretty significantly and yet I think it was even down more than what we had estimated from the same quarter last year. Again, I'm hoping Jeff that we have seen kind of the bottom, we're certainly as we enter the spring now. We are certainly starting to see a little bit more activity that activity has got to come in the form as I said earlier purchases and construction. Although, there is always going to be some refinances out there and we still do some refinances. It's a far cry from what it was, this time last year. So our hope is that with, the spring better weather coming, a renewed focus among our mortgage originators to really get our and reestablish and continue to firm up relationships with builders and realtors that this quarter hopefully will be the low point, when it comes to gain on sale. Jeff Rulis – D.A. Davidson: And I apologize if this was addressed, I hopped on a little late. The compensation cost does that, anything one-time in there. Is that, I guess is there some seasonal [adds] or is that kind of core rate that we should assume going forward?

On the compensation, I think that's pretty core. I mean, we've seen the reduction in compensation from the mortgage side obviously with the lower volume of mortgage originations. You know there's somewhat of an offset on the expense side, to those lower fee, when that comes clearly from the lower compensation expenses, but at the same time each quarter or each quarter especially the first quarter of the year obviously our FICA expenses move up. We had some extraordinary expenses in the form, we paid some directors fees during the quarter that was paid in the first quarter that will not be paid to the rest of the year. A few minimal things like that Jeff, but nothing that I believe is so material that you could see a significant reduction moving forward. So I think the compensation figure that you saw, is pretty core and one that you could probably rely on through the rest of the year. Jeff Rulis – D.A. Davidson: Okay, thanks Mick.

You bet.

Thank you. Our next question will be coming from the line of Jennifer Demba from SunTrust. Your line is open. Jennifer Demba – SunTrust Robinson Humphrey: Thanks. Good morning.

Hi Jennifer. Jennifer Demba – SunTrust Robinson Humphrey: Just wondering, what kind of progress you think, you can make on the non-performing assets over the course of this year. Mick, based on what you're seeing right now.

Well as I mentioned, we've got a couple of larger deals that there is never any guarantee Jennifer that they ever get done. They don't get done, until we are absolutely closed, but a couple of the remaining larger non-performers are currently in the process and it looks pretty encouraging that we could move a couple more of these. As I said in my remarks, I mean our goal this year is to remove NPA's down to that $90 million get below or at that $90 million level. We started the year at $107 that's a $17 million reduction, which would be just about 20%, just slightly over 20% that's our goal for the year. We think it's achievable, it's some of things that are looking like I said encouraging right now, do materialize. I definitely believe we can get down to that $90 million. I mean, obviously we'd like to get below that but that is our goal for the year is to see if we could, reduce that number by approximately another 20%. It gets a little bit more difficult, as I have said in past quarters. As you get lower and lower and to the bottom of that barrel. Some of the remaining non-performing assets. It's not as if they're bad assets, it's just maybe they have a single utility. It's going to take the absolute life borrower in order to move that or to sell that property and in some cases, some of the property is just not the most attractive. So you got a little bit of both and we are in the process working very, very hard again to this two or three transactions out there that if they do close I really do believe we will hit our goals till the year. Jennifer Demba – SunTrust Robinson Humphrey: Thanks.

Thank you. Our next question will be coming from the line of Jacquelynne Chimera from Keefe, Bruyette & Woods. Your line is open. Jacquelynne Chimera – Keefe, Bruyette & Woods: Mick, I wondered if you could give us an update on the two acquisitions you did last year and how the conversions are coming in the integration and everything.

You bet Jacky. This Friday, we are converting on First State Bank of Wheatland that will be the final piece of integration that we will have to complete regarding that entire integration process. I think, both their staff and our staff both are technology people. Our operation staff have done a great job. Knock on wood, I mean you never get through any conversions without some hiccups and some things that get missed, but right now through all the testing when everything is been done, it's really looking good. So my hats off to the staff at First State Bank, I think they've done an incredible of job focusing on this conversion and we are going to be flipping the switch on Friday evening, on that particular one. So we are off the two, that we partnered with last year that one will be totally integrated and then it's, we are in the process of doing the network conversion at North Cascades Bank, they're scheduled for that October, November timeframe for their conversion. Once again, I think that with the staff that they have and I think we get a little bit better and we learn more and more from these conversions every time, we do them and we've done a lot of them. I would expect that last piece of that integration goes very, very well also. So Jacky, if you want to call me next week. I can give you a better senses to how First State Bank's done, but our expectations are that it's going to go very, very well and talking with Marcia Johnson, our Chief Operations Officer. She's feeling very, very good and has said that the staff down there has been incredible to work with and she really feels good, where that conversions going this weekend. Jacquelynne Chimera – Keefe, Bruyette & Woods: Okay, so is it safe to assume that then in the latter half of second quarter and fourth quarter, there will be a little bit of expense release associated with those conversions?

That is correct. Jacquelynne Chimera – Keefe, Bruyette & Woods: Okay and how do future discussions, look I know that you've said that two to three deals similar to what you did last year, is kind of what you're looking to do this year, if that's something that you think is achievable?

Yes, I think there's an outside chance. Obviously, we are ready through the first quarter and there's nothing at this point in time, but lots of dialog, lots of discussions, lots of interesting things to discuss and look at so we are still hopeful. For us to put three together that might be a stretch but, it will certainly be nice to get one more done yet this year and if we could work on two that would be great. Again, you just never know and all I can really say on the [bone] is that, there's been a lot of dialog, there's been a lot of interest from a lot of banks in Glacier and we'll just see where that takes us. Jacquelynne Chimera – Keefe, Bruyette & Woods: And Washington, Utah and Colorado remained kind of your key markets of choice?

Yes, I'd have to say we look at all six of them, all of the States and the only reason I mentioned Washington, Utah and Colorado is because you just don't have many HHI issues, market concentration issues in those States that we have more of an issue in Montana, Idaho and Wyoming, but I don't want to misinform or give anyone the wrong impression that we are not looking and we have not had dialog with banks in those other states also. But I just think that the opportunities Jacky for us and the headwinds of doing transactions are much easier in those states. Jacquelynne Chimera – Keefe, Bruyette & Woods: Okay, so discussions are taking placed broadly across the footprint.

Across the footprint, that is correct. Jacquelynne Chimera – Keefe, Bruyette & Woods: Okay. Great, thanks for the update.

You bet. Thank you Jacky.

Thank you. Our next question will be coming from the line of Joe Morford from RBC Capital Markets. Your line is open. Joe Morford – RBC Capital Markets: Thanks, good morning Mick.

Hi Joe. Joe Morford – RBC Capital Markets: Most of my stuff has been asked, but just one follow-up on credit quality. I mean given the drop in net charge-offs and the fact, you're still get some recoveries and prospect of getting NPA's down further. When might we see you perhaps take down the reserve at a little faster pace?

Yes, I mean obviously we do the analysis every year, every quarter. We want to make sure that it's that reserve is fully adequate; we believe it is, at the end of the quarter. Can't really say whether we would take it down a whole bunch from here. I mean clearly, we got a lot of growth that could be added to that loan portfolio and still retained a very adequate in our mind, be very adequate [reserve]. I think Joe, the biggest thing for us is, we're going to have to see if credit trends do continue to improve. We expect that they will, but then probably the big driver is going to be two things; number one what kind of organic loan growth can we put on the books and then how successful are we in the M&A arena because like it or not. Every time we do a transaction and under purchase accounting rules. We don't carry that ALLL over. So I mean, if it's going to be bank that's got any signs of loan portfolio that's going to have to be absorbed by our existing ALLL and we are mindful of that and I think that's one of the things that gives us some comfort that the level of the ALLL is where it is, we like where it is. We think it's adequate for the type of business that we hope to produce organically as well as the additional business, we hope to put on the balance sheet via the (indiscernible). So it's about probably, I guess all I really have to say. Joe Morford – RBC Capital Markets: That's enough.

It's adequate. Joe Morford – RBC Capital Markets: I would think so, okay that's helpful. Thanks Mick.

Thank you. Our next question will be coming from the line of Tim Coffey from FIG Partners. Your line is open. Tim Coffey – FIG Partners: Good morning Mick.

Hi Tim. Tim Coffey – FIG Partners: I have a question about, you're possibly for net recovering going forward. Given that you know, you're entering the best two quarters of decision for you guys and the options in your specimen on the construction side, in terms of loans that's going forward. Does that all increase your options for net loan recoveries next couple of quarters?

We've had, Tim we've had really three good quarters in the row now. Where recoveries have been awfully strong? It's one of those things where it's really difficult to gage, if now the second quarter that's going to continue. I mean, I would suspect that total charge-offs are going to behave. I don't see at least we are not seeing anything out there right now, but it would be a big surprise. Although, I have been surprised many times. So I mean, the time I say that is now the time we're in this quarter something will come out of nowhere that no one could have foreseen or no one expect, but as we are looking at Tim is right now. It appears to us, charge-offs should remain fairly well behaved and there was a lot of dollars charged off. As unfortunately we all know, during those down years and I think the banks were doing a really nice job of recovering some of those and that's what we really experienced here over the last three quarters. Well second quarter, the third quarter this year Tim, carry that on. We certainly hope so, we certainly believe there are loans out there to be recovered on. It's just one of those where I can't really I'd just be speculating is to whether this next quarter is going to be as good as the last three, could even be better. I mean, there's clearly some loans out there that could be recovered on that would make that recovery another very, very or make this quarter for recoveries, another good quarter. Tim Coffey – FIG Partners: All right, understood and then the answer with the income probably you gave it seems (indiscernible) that could be probably without this and premium amortization issues. My question that was on, interest expenses I mean that's been coming down fairly steadily. Are we going to appoint where it's going bottom exactly rise marginally.

I don't see it rising in the near term Tim. You're right though, I mean it's not getting any lower. I mean like take for example this last quarter. I mean it flat-lined from the fourth quarter and even if you go back to the third quarter and compare third to fourth quarter. I mean, it was like 1 basis point or 2 basis point so. It's just really been now three quarters, where we haven't seen much movement on the interest expense line. And I will not expect that to go down much. As I said, we work very, very hard at generating a lot of transaction accounts and the banks have done a great job of doing that and the new banks are really doing a nice job in that area. Unfortunately though, when you bring it in a non-interest bearing account. It's not materially different than what we borrow money at and what we pay on other types of accounts and yet we still recognize the long-term inherent value built in those and that's why we continue to just drive down to each and every one of the banks the importance of growing that non-interest bearing, deposit base. So that's and I think that during the summer months Tim, we usually see those balances increase as tourism increases just the overall activity level increases throughout our footprint. So it would be our hope that piece of our overall funding continues to get larger and larger, and larger. Maybe not, right now having a noticeable impact on our funding cost, but expectation with us is down the road. Where the rates, do start to move back up those will be very, very valuable deposits and that's just the way we're approaching it. Tim Coffey – FIG Partners: And then during your comment. You mentioned, some sort of deposit account of 5%, is that kind of the target growth for you?

No, that's actually so far on an annualized basis, that's exceeding our goal. Our goal was 3%, so through the first quarter, we have seen better growth than what our expectations were and what our plan called for, that's why I'm saying if we can continue to hold that target growth for the rest of the year that will be outstanding. And it will trump, what we did last year. Last year, our growth was over 4%, we figured that it was going to be tough because we had a very, very good year in 2013. Felt, that was going to be very difficult to replicate. So we actually brought down our expectations a little bit and we are calling for 3% growth this year, but through the first quarter we did a lot better than that. So now, I'm going to be very interested to see if that momentum can be maintained and the pace of 5% transaction account growth will hold through the remaining three quarters of the year. If it does, then that will be outstanding. Once again, Tim you're talking 5% on a much, much bigger base too. I mean, we're approaching 300,000 checking account customers. So I mean, it's one thing they're 100,000. Where 5% means 5,000. We're at 300,000, it means 15,000 new accounts. So it's a bigger deal for us and one that we really focus on, the banks really spend a lot of energy and time and effort in this area. And so far through the first quarter, it's paid off. Tim Coffey – FIG Partners: All right. Mick, I appreciate. Those were all my questions.

Thanks Tim.

Thank you. We have another question from the line of Brett Rabatin from Sterne, Agee. Your line is open. Brett Rabatin – Sterne, Agee & Leach: My (Indiscernible) thank you.

And at this time I'm not showing any further questions.

Okay, well thank you all very much for joining us this morning and again. I believe, we've got the year off to a good start. Now the key for us, is to continue to maintain this level of momentum. Hopefully as we enter, what historically and traditionally for us has always been the two busiest quarters. We certainly, certainly hope that is the case in 2014. So with that, thank you all for joining us this morning and have a great rest of the week. Bye now.

Ladies and gentlemen. Thank you for participating in today's conference. This does conclude, the program and you may all disconnect. Everyone, have a great day.