10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2012

¨ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission file number 000-18911

GLACIER BANCORP, INC.

(Exact name of registrant as specified in its charter)

MONTANA	81-0519541
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
49 Commons Loop, Kalispell, Montana	59901
(Address of principal executive offices)	(Zip Code)

(406) 756-4200

Registrant’s telephone number, including area code

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    No  ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller reporting Company	¨

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    x  No

The number of shares of Registrant’s common stock outstanding on July 25, 2012 was 71,931,972. No preferred shares are issued or outstanding.

Glacier Bancorp, Inc.

Quarterly Report on Form 10-Q

Index

	Page
Part I. Financial Information
Item 1 – Financial Statements
Unaudited Condensed Consolidated Statements of Financial Condition – June  30, 2012 and December 31, 2011		3
Unaudited Condensed Consolidated Statements of Operations – Three and Six Months ended June  30, 2012 and 2011		4
Unaudited Condensed Consolidated Statements of Comprehensive Income – Three and Six Months ended June 30, 2012 and 2011		5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity – Six Months ended June 30, 2012 and 2011		6
Unaudited Condensed Consolidated Statements of Cash Flows – Six Months ended June  30, 2012 and 2011		7
Notes to Unaudited Condensed Consolidated Financial Statements		8
Item  2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3 – Quantitative and Qualitative Disclosure about Market Risk		61
Item 4 – Controls and Procedures		61
Part II. Other Information		61
Item 1 – Legal Proceedings		61
Item 1A – Risk Factors		61
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		62
Item 3 – Defaults upon Senior Securities		62
Item 4 – Mine Safety Disclosures		62
Item 5 – Other Information		62
Item 6 – Exhibits		62
Signatures		63

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Financial Condition

(Dollars in thousands, except per share data)	June 30, 2012			December 31, 2011
Assets
Cash on hand and in banks	$	92,119			104,674
Interest bearing cash deposits		48,300			23,358
Cash and cash equivalents		140,419			128,032
Investment securities, available-for-sale		3,404,282			3,126,743
Loans held for sale		88,442			95,457
Loans receivable		3,445,196			3,466,135
Allowance for loan and lease losses		(137,459	)		(137,516	)
Loans receivable, net		3,307,737			3,328,619
Premises and equipment, net		159,432			158,872
Other real estate owned		69,170			78,354
Accrued interest receivable		37,108			34,961
Deferred tax asset		22,892			31,081
Core deposit intangible, net		7,197			8,284
Goodwill		106,100			106,100
Non-marketable equity securities		50,371			49,694
Other assets		40,952			41,709
Total assets	$	7,434,102			7,187,906
Liabilities
Non-interest bearing deposits	$	1,066,662			1,010,899
Interest bearing deposits		3,915,607			3,810,314
Securities sold under agreements to repurchase		466,784			258,643
Federal Home Loan Bank advances		906,029			1,069,046
Other borrowed funds		9,973			9,995
Subordinated debentures		125,347			125,275
Accrued interest payable		5,076			5,825
Other liabilities		62,443			47,682
Total liabilities		6,557,921			6,337,679
Stockholders’ Equity
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $0.01 par value per share, 117,187,500 shares authorized		719			719
Paid-in capital		641,656			642,882
Retained earnings - substantially restricted		189,753			173,139
Accumulated other comprehensive income		44,053			33,487
Total stockholders’ equity		876,181			850,227
Total liabilities and stockholders’ equity	$	7,434,102			7,187,906
Number of common stock shares issued and outstanding		71,931,386			71,915,073

See accompanying notes to unaudited condensed consolidated financial statements.

3

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Operations

	Three Months ended June 30,					Six Months ended June 30,
(Dollars in thousands, except per share data)	2012		2011			2012		2011
Interest Income
Residential real estate loans	$	7,495		8,156			15,279		16,872
Commercial loans		30,430		32,977			61,471		66,035
Consumer and other loans		8,813		10,211			17,983		20,661
Investment securities		17,454		20,218			37,343		36,367
Total interest income		64,192		71,562			132,076		139,935
Interest Expense
Deposits		4,609		6,584			9,563		13,672
Securities sold under agreements to repurchase		303		319			602		676
Federal Home Loan Bank advances		3,218		3,093			6,599		5,641
Federal funds purchased and other borrowed funds		61		62			123		95
Subordinated debentures		853		1,273			1,755		2,916
Total interest expense		9,044		11,331			18,642		23,000
Net Interest Income		55,148		60,231			113,434		116,935
Provision for loan losses		7,925		19,150			16,550		38,650
Net interest income after provision for loan losses		47,223		41,081			96,884		78,285
Non-Interest Income
Service charges and other fees		11,291		11,330			21,783		21,538
Miscellaneous loan fees and charges		1,113		928			2,059		1,905
Gain on sale of loans		7,522		4,291			14,335		8,985
Loss on sale of investments		—		(591	)		—		(467	)
Other income		1,865		1,893			3,952		3,285
Total non-interest income		21,791		17,851			42,129		35,246
Non-Interest Expense
Compensation and employee benefits		23,684		21,170			47,244		42,773
Occupancy and equipment		5,825		5,728			11,793		11,682
Advertising and promotions		1,713		1,635			3,115		3,119
Outsourced data processing		788		791			1,634		1,564
Other real estate owned		2,199		5,062			9,021		7,161
Federal Deposit Insurance Corporation premiums		1,300		2,197			3,012		4,521
Core deposit intangibles amortization		535		590			1,087		1,317
Other expense		10,146		9,047			18,329		16,559
Total non-interest expense		46,190		46,220			95,235		88,696
Income Before Income Taxes		22,824		12,712			43,778		24,835
Federal and state income tax expense		3,843		826			8,464		2,664
Net Income	$	18,981		11,886			35,314		22,171
Basic earnings per share	$	0.26		0.17			0.49		0.31
Diluted earnings per share	$	0.26		0.17			0.49		0.31
Dividends declared per share	$	0.13		0.13			0.26		0.26
Average outstanding shares - basic		71,928,697		71,915,073			71,921,885		71,915,073
Average outstanding shares - diluted		71,928,853		71,915,073			71,921,990		71,915,073

See accompanying notes to unaudited condensed consolidated financial statements.

4

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Comprehensive Income

	Three Months ended June 30,						Six Months ended June 30,
(Dollars in thousands)	2012			2011			2012			2011
Net Income	$	18,981			11,886			35,314			22,171
Other Comprehensive Income, Net of Tax
Unrealized holding gains on available-for-sale securities		13,214			36,154			23,232			39,182
Reclassification adjustment for losses included in net income		—			591			—			467
Net unrealized gains on securities		13,214			36,745			23,232			39,649
Tax effect		(5,140	)		(14,400	)		(9,037	)		(15,538	)
Net of tax amount		8,074			22,345			14,195			24,111
Change in fair value of derivatives used for cash flow hedges		(9,051	)		—			(5,939	)		—
Tax effect		3,521			—			2,310			—
Net of tax amount		(5,530	)		—			(3,629	)		—
Total other comprehensive income, net of tax		2,544			22,345			10,566			24,111
Total Comprehensive Income	$	21,525			34,231			45,880			46,282

See accompanying notes to unaudited condensed consolidated financial statements.

5

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

Six Months ended June 30, 2012 and 2011

	Common Stock				Paid-in			Retained Earnings Substantially			Accumulated Other Comprehensive
(Dollars in thousands, except per share data)	Shares		Amount		Capital			Restricted			Income		Total
Balance at December 31, 2010		71,915,073	$	719		643,894			193,063			528		838,204
Comprehensive income		—		—		—			22,171			24,111		46,282
Cash dividends declared ($0.26 per share)		—		—		—			(18,698	)		—		(18,698	)
Stock-based compensation and related taxes		—		—		(1,016	)		—			—		(1,016	)
Balance at June 30, 2011		71,915,073	$	719		642,878			196,536			24,639		864,772
Balance at December 31, 2011		71,915,073	$	719		642,882			173,139			33,487		850,227
Comprehensive income		—		—		—			35,314			10,566		45,880
Cash dividends declared ($0.26 per share)		—		—		—			(18,700	)		—		(18,700	)
Stock issuances under stock incentive plans		16,313		—		233			—			—		233
Stock-based compensation and related taxes		—		—		(1,459	)		—			—		(1,459	)
Balance at June 30, 2012		71,931,386	$	719		641,656			189,753			44,053		876,181

See accompanying notes to unaudited condensed consolidated financial statements.

6

Glacier Bancorp, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

	Six Months ended June 30,
(Dollars in thousands)	2012			2011
Operating Activities
Net cash provided by operating activities	$	133,697			135,267
Investing Activities
Proceeds from sales, maturities and prepayments of investment securities, available-for-sale		871,472			429,256
Purchases of investment securities, available-for-sale		(1,154,990	)		(796,155	)
Principal collected on loans		441,318			459,488
Loans originated or acquired		(478,541	)		(397,174	)
Net addition of premises and equipment and other real estate owned		(5,501	)		(7,337	)
Proceeds from sale of other real estate owned		18,073			17,443
Net (sale) purchase of non-marketable equity securities		(671	)		14,278
Net cash used in investment activities		(308,840	)		(280,201	)
Financing Activities
Net increase in deposits		161,056			182,897
Net increase in securities sold under agreements to repurchase		208,141			1,900
Net decrease in Federal Home Loan Bank advances		(163,017	)		(40,080	)
Net increase in federal funds purchased and other borrowed funds		50			42,865
Cash dividends paid		(18,700	)		(18,698	)
Net cash provided by financing activities		187,530			168,884
Net increase in cash and cash equivalents		12,387			23,950
Cash and cash equivalents at beginning of period		128,032			105,091
Cash and cash equivalents at end of period	$	140,419			129,041
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	$	19,391			23,985
Cash paid during the period for income taxes		8,221			3,681
Sale and refinancing of other real estate owned		668			2,521
Other real estate acquired in settlement of loans		16,372			49,570

See accompanying notes to unaudited condensed consolidated financial statements.

7

Glacier Bancorp, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1) Nature of Operations and Summary of Significant Accounting Policies

General

Glacier Bancorp, Inc. (the “Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individual and corporate customers in Montana, Idaho, Wyoming, Colorado, Utah and Washington through eleven divisions of its wholly-owned bank subsidiary, Glacier Bank (the “Bank”). The Company is subject to competition from other financial service providers. The Company is also subject to the regulations of certain government agencies and undergoes periodic examinations by those regulatory authorities.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of June 30, 2012, the results of operations and comprehensive income for the three and six month periods ended June 30, 2012 and 2011, and changes in stockholders’ equity and cash flows for the six month periods ended June 30, 2012 and 2011. The condensed consolidated statement of financial condition of the Company as of December 31, 2011 has been derived from the audited consolidated statements of the Company as of that date.

The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results anticipated for the year ending December 31, 2012.

Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”), 2) the valuations related to investments and real estate acquired in connection with foreclosures or in satisfaction of loans, and 3) the evaluation of goodwill impairment. In connection with the determination of the ALLL and other real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investments are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on independent party valuations and internal calculations using significant independent party inputs.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the parent holding company and the Bank. All significant inter-company transactions have been eliminated in consolidation.

The Company formed GBCI Other Real Estate (“GORE”) to isolate certain bank foreclosed properties for legal protection and administrative purposes and the remaining properties are currently held for sale. GORE is included in the Bank operating segment due to its insignificant activity.

8

The Company owns the following trust subsidiaries for the purpose of issuing trust preferred securities: Glacier Capital Trust II, Glacier Capital Trust III, Glacier Capital Trust IV, Citizens (ID) Statutory Trust I, Bank of the San Juans Bancorporation Trust I, First Company Statutory Trust 2001 and First Company Statutory Trust 2003. The trust subsidiaries are not consolidated into the Company’s financial statements.

On April 30, 2012, the Company combined its eleven bank subsidiaries into eleven bank divisions within Glacier Bank, such divisions operating with the same names and management teams as before the combination. Prior to the combination of the bank subsidiaries, the Company considered its eleven bank subsidiaries, GORE, and the parent holding company to be its operating segments. Subsequent to the combination of the bank subsidiaries, the Company considers the Bank to be its sole operating segment. The change to combining the bank subsidiaries into a single segment is appropriate as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses, 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank, and 3) financial information is available for the Bank.

Variable Interest Entities

The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). The Company also has equity investments in Low-Income Housing Tax Credit (“LIHTC”) partnerships. The CDEs and the LIHTC partnerships are variable interest entities (“VIE”).

The following table summarizes the carrying amounts of the VIE’s assets and liabilities included in the Company’s consolidated financial statements at June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
(Dollars in thousands)	CDE (NMTC)		LIHTC		CDE (NMTC)		LIHTC
Assets
Loans receivable	$	35,443		—		32,748		—
Premises and equipment, net		—		15,700		—		15,996
Accrued interest receivable		112		—		116		—
Other assets		1,233		66		1,439		31
Total assets	$	36,788		15,766		34,303		16,027
Liabilities
Other borrowed funds	$	4,629		3,306		4,629		3,306
Accrued interest payable		3		6		4		9
Other liabilities		92		193		186		363
Total liabilities	$	4,724		3,505		4,819		3,678

Amounts presented in the table above are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.

9

Impact of Recent Authoritative Accounting Guidance

The Accounting Standards Codification^TM (“ASC”) is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative.

In September 2011, FASB amended FASB ASC Topic 350, Intangibles - Goodwill and Other. The amendment provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If the entity concludes it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The amendment is effective prospectively during interim and annual periods beginning after December 15, 2011 and early adoption is permitted. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

In June 2011, FASB amended FASB ASC Topic 220, Comprehensive Income. The amendment provides an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. Accounting Standards Update No. 2011-12, Comprehensive Income (Topic 220) defers the specific requirement of the amendment to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments are effective retrospectively during interim and annual periods beginning after December 15, 2011. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

In May 2011, FASB amended FASB ASC Topic 820, Fair Value Measurement. The amendment achieves common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The amendment changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendment is effective prospectively during interim and annual periods beginning after December 15, 2011. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

10

2) Investment Securities, Available-for-Sale

A comparison of the amortized cost and estimated fair value of the Company’s investment securities designated as available-for-sale is presented below.

	June 30, 2012
	Weighted			Amortized		Gross Unrealized					Fair
(Dollars in thousands)	Yield			Cost		Gains		Losses			Value
U.S. government and federal agency
Maturing after one year through five years		1.62	%	$	202		3		—			205
U.S. government sponsored enterprises
Maturing within one year		2.37	%		3,218		12		—			3,230
Maturing after one year through five years		2.34	%		21,727		458		—			22,185
Maturing after five years through ten years		1.90	%		73		—		—			73
		2.34	%		25,018		470		—			25,488
State and local governments
Maturing within one year		0.99	%		45,759		11		(5	)		45,765
Maturing after one year through five years		2.14	%		127,290		3,788		(121	)		130,957
Maturing after five years through ten years		2.64	%		52,835		1,699		(38	)		54,496
Maturing after ten years		4.78	%		886,899		75,645		(682	)		961,862
		4.22	%		1,112,783		81,143		(846	)		1,193,080
Corporate bonds
Maturing within one year		1.39	%		19,457		27		(4	)		19,480
Maturing after one year through five years		2.41	%		121,697		810		(351	)		122,156
Maturing after five years through ten years		2.30	%		18,197		166		(73	)		18,290
		2.27	%		159,351		1,003		(428	)		159,926
Collateralized debt obligations
Maturing after ten years		8.03	%		2,848		—		(114	)		2,734
Residential mortgage-backed securities		1.75	%		2,017,135		11,358		(5,644	)		2,022,849
Total investment securities		2.61	%	$	3,317,337		93,977		(7,032	)		3,404,282

11

	December 31, 2011
	Weighted			Amortized		Gross Unrealized					Fair
(Dollars in thousands)	Yield			Cost		Gains		Losses			Value
U.S. government and federal agency
Maturing after one year through five years		1.62	%	$	204		4		—			208
U.S. government sponsored enterprises
Maturing within one year		1.58	%		3,979		17		—			3,996
Maturing after one year through five years		2.36	%		26,399		682		—			27,081
Maturing after five years through ten years		1.90	%		78		—		—			78
		2.26	%		30,456		699		—			31,155
State and local governments
Maturing within one year		1.31	%		4,786		3		(2	)		4,787
Maturing after one year through five years		2.22	%		89,752		2,660		(22	)		92,390
Maturing after five years through ten years		2.59	%		63,143		2,094		(19	)		65,218
Maturing after ten years		4.84	%		845,657		57,138		(535	)		902,260
		4.44	%		1,003,338		61,895		(578	)		1,064,655
Corporate bonds
Maturing after one year through five years		2.55	%		60,810		261		(1,264	)		59,807
Maturing after five years through ten years		2.38	%		2,409		21		—			2,430
		2.54	%		63,219		282		(1,264	)		62,237
Collateralized debt obligations
Maturing after ten years		8.03	%		5,648		—		(282	)		5,366
Residential mortgage-backed securities		1.70	%		1,960,167		10,138		(7,183	)		1,963,122
Total investment securities		2.64	%	$	3,063,032		73,018		(9,307	)		3,126,743

Included in the residential mortgage-backed securities are $53,145,000 and $49,252,000 as of June 30, 2012 and December 31, 2011, respectively, of non-guaranteed private label whole loan mortgage-backed securities of which none of the underlying collateral is considered “subprime.”

Maturities of securities do not reflect repricing opportunities present in adjustable rate securities, nor do they reflect expected shorter maturities based upon early prepayment of principal. Weighted yields are based on the level-yield method taking into account premium amortization and discount accretion. Weighted yields on tax-exempt investment securities exclude the federal income tax benefit.

12

The cost of each investment sold is determined by specific identification. Gain or loss on sale of investments consists of the following:

	Three Months ended June 30,					Six Months ended June 30,
(Dollars in thousands)	2012		2011			2012		2011
Gross proceeds	$	—		4,074			—		8,208
Less amortized cost		—		(4,665	)		—		(8,675	)
Net loss on sale of investments	$	—		(591	)		—		(467	)
Gross gain on sale of investments	$	—		39			—		223
Gross loss on sale of investments		—		(630	)		—		(690	)
Net loss on sale of investments	$	—		(591	)		—		(467	)

Investments with an unrealized loss position are summarized as follows:

	June 30, 2012
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
State and local governments	$	77,764		(667	)		7,624		(179	)		85,388		(846	)
Corporate bonds		52,812		(396	)		5,383		(32	)		58,195		(428	)
Collateralized debt obligations		—		—			2,734		(114	)		2,734		(114	)
Residential mortgage-backed securities		854,027		(4,309	)		74,878		(1,335	)		928,905		(5,644	)
Total temporarily impaired securities	$	984,603		(5,372	)		90,619		(1,660	)		1,075,222		(7,032	)

	December 31, 2011
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
State and local governments	$	26,434		(90	)		9,948		(488	)		36,382		(578	)
Corporate bonds		31,782		(1,264	)		—		—			31,782		(1,264	)
Collateralized debt obligations		—		—			5,366		(282	)		5,366		(282	)
Residential mortgage-backed securities		943,372		(6,850	)		8,244		(333	)		951,616		(7,183	)
Total temporarily impaired securities	$	1,001,588		(8,204	)		23,558		(1,103	)		1,025,146		(9,307	)

With respect to its impaired securities at June 30, 2012, management determined that it did not intend to sell and there was no expected requirement to sell any of its impaired securities. Based on an analysis of its impaired securities as of June 30, 2012 and December 31, 2011, the Company determined that none of such securities had other-than-temporary impairment.

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3) Loans Receivable, Net

The following schedules summarize the activity in the ALLL on a portfolio class basis:

	Three Months ended June 30, 2012
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	136,586			19,003			73,240			22,444			13,364			8,535
Provision for loan losses		7,925			22			10,374			(1,255	)		(1,471	)		255
Charge-offs		(8,679	)		(953	)		(5,549	)		(887	)		(1,077	)		(213	)
Recoveries		1,627			67			1,033			268			88			171
Balance at end of period	$	137,459			18,139			79,098			20,570			10,904			8,748

	Three Months ended June 30, 2011
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	140,829			17,004			80,098			20,960			14,206			8,561
Provision for loan losses		19,150			1,557			9,430			3,969			294			3,900
Charge-offs		(21,814	)		(1,388	)		(10,691	)		(5,413	)		(971	)		(3,351	)
Recoveries		1,630			239			1,048			99			96			148
Balance at end of period	$	139,795			17,412			79,885			19,615			13,625			9,258

	Six Months ended June 30, 2012
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,516			17,227			76,920			20,833			13,616			8,920
Provision for loan losses		16,550			2,085			13,010			1,304			(470	)		621
Charge-offs		(19,737	)		(1,320	)		(12,534	)		(2,356	)		(2,358	)		(1,169	)
Recoveries		3,130			147			1,702			789			116			376
Balance at end of period	$	137,459			18,139			79,098			20,570			10,904			8,748

	Six Months ended June 30, 2011
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,107			20,957			76,147			19,932			13,334			6,737
Provision for loan losses		38,650			(703	)		23,697			6,607			2,415			6,634
Charge-offs		(38,318	)		(3,157	)		(21,319	)		(7,166	)		(2,303	)		(4,373	)
Recoveries		2,356			315			1,360			242			179			260
Balance at end of period	$	139,795			17,412			79,885			19,615			13,625			9,258

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The following schedules disclose the ALLL and loans receivable on a portfolio class basis:

	June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	19,208		3,938		9,337		3,408		690		1,835
Collectively evaluated for impairment		118,251		14,201		69,761		17,162		10,214		6,913
Total allowance for loan and lease losses	$	137,459		18,139		79,098		20,570		10,904		8,748
Loans receivable
Individually evaluated for impairment	$	237,899		33,617		144,506		38,702		13,501		7,573
Collectively evaluated for impairment		3,207,297		491,934		1,507,184		603,484		408,748		195,947
Total loans receivable	$	3,445,196		525,551		1,651,690		642,186		422,249		203,520

	December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	18,828		2,659		9,756		4,233		584		1,596
Collectively evaluated for impairment		118,688		14,568		67,164		16,600		13,032		7,324
Total allowance for loan and lease losses	$	137,516		17,227		76,920		20,833		13,616		8,920
Loans receivable
Individually evaluated for impairment	$	258,659		24,453		162,959		49,962		14,750		6,535
Collectively evaluated for impairment		3,207,476		492,354		1,509,100		573,906		425,819		206,297
Total loans receivable	$	3,466,135		516,807		1,672,059		623,868		440,569		212,832

Substantially all of the Company’s loan receivables are with customers within the Company’s market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas. Net deferred fees, costs, premiums, and discounts of $2,104,000 and $3,123,000 were included in the loans receivable balance at June 30, 2012 and December 31, 2011, respectively.

15

The following schedules disclose the impaired loans by portfolio class basis:

	At or for the Three or Six Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	81,875		18,356		36,084		21,607		1,847		3,981
Unpaid principal balance		92,771		18,666		46,440		21,735		1,918		4,012
Valuation allowance		19,208		3,938		9,337		3,408		690		1,835
Average impaired loans - three months		84,275		16,939		38,156		23,840		1,785		3,555
Average impaired loans - six months		82,089		14,996		38,761		23,255		1,597		3,480
Loans without a specific valuation allowance
Recorded balance	$	156,024		15,261		108,422		17,095		11,654		3,592
Unpaid principal balance		186,116		16,120		129,254		22,459		14,274		4,009
Average impaired loans - three months		170,211		15,010		116,160		22,542		12,733		3,766
Average impaired loans - six months		173,788		14,454		118,436		24,320		12,998		3,580
Totals
Recorded balance	$	237,899		33,617		144,506		38,702		13,501		7,573
Unpaid principal balance		278,887		34,786		175,694		44,194		16,192		8,021
Valuation allowance		19,208		3,938		9,337		3,408		690		1,835
Average impaired loans - three months		254,486		31,949		154,316		46,382		14,518		7,321
Average impaired loans - six months		255,877		29,450		157,197		47,575		14,595		7,060

	At or for the Year ended December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	77,717		11,111		39,971		22,087		1,219		3,329
Unpaid principal balance		85,514		11,177		47,569		22,196		1,238		3,334
Valuation allowance		18,828		2,659		9,756		4,233		584		1,596
Average impaired loans		66,871		10,330		38,805		13,395		1,284		3,057
Loans without a specific valuation allowance
Recorded balance	$	180,942		13,342		122,988		27,875		13,531		3,206
Unpaid principal balance		208,828		14,741		139,962		35,174		15,097		3,854
Average impaired loans		168,983		14,730		123,231		19,963		8,975		2,084
Totals
Recorded balance	$	258,659		24,453		162,959		49,962		14,750		6,535
Unpaid principal balance		294,342		25,918		187,531		57,370		16,335		7,188
Valuation allowance		18,828		2,659		9,756		4,233		584		1,596
Average impaired loans		235,854		25,060		162,036		33,358		10,259		5,141

Interest income recognized on impaired loans for the periods ended June 30, 2012 and December 31, 2011 was not significant.

16

The following is a loans receivable aging analysis on a portfolio class basis:

	June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Accruing loans 30-59 days past due	$	37,893		990		12,819		20,093		2,690		1,301
Accruing loans 60-89 days past due		10,814		5,175		2,822		1,995		472		350
Accruing loans 90 days or more past due		3,267		421		1,547		980		145		174
Non-accrual loans		126,463		19,835		77,203		15,490		10,156		3,779
Total past due and non-accrual loans		178,437		26,421		94,391		38,558		13,463		5,604
Current loans receivable		3,266,759		499,130		1,557,299		603,628		408,786		197,916
Total loans receivable	$	3,445,196		525,551		1,651,690		642,186		422,249		203,520

	December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Accruing loans 30-59 days past due	$	31,386		9,038		12,683		3,279		4,092		2,294
Accruing loans 60-89 days past due		17,700		2,678		11,660		1,034		1,276		1,052
Accruing loans 90 days or more past due		1,413		59		108		1,060		156		30
Non-accrual loans		133,689		11,881		87,956		21,685		10,272		1,895
Total past due and non-accrual loans		184,188		23,656		112,407		27,058		15,796		5,271
Current loans receivable		3,281,947		493,151		1,559,652		596,810		424,773		207,561
Total loans receivable	$	3,466,135		516,807		1,672,059		623,868		440,569		212,832

The following is a summary of the troubled debt restructurings (“TDR”) that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented on a portfolio class basis:

	Three Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Troubled debt restructurings
Number of loans		47		5		15		22		1		4
Pre-modification outstanding balance	$	11,929		1,342		5,736		4,309		310		232
Post-modification outstanding balance	$	10,650		1,342		4,444		4,322		310		232
Troubled debt restructurings that subsequently defaulted
Number of loans		9		—		4		2		1		2
Recorded balance	$	3,127		—		2,077		531		442		77

17

	Six Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Troubled debt restructurings
Number of loans		103		8		40		41		7		7
Pre-modification outstanding balance	$	28,455		1,701		16,846		8,432		1,095		381
Post-modification outstanding balance	$	26,469		1,701		14,838		8,454		1,095		381
Troubled debt restructurings that subsequently defaulted
Number of loans		20		—		11		5		2		2
Recorded balance	$	6,207		—		4,735		798		597		77

The majority of TDRs occurring in most loan classes was a result of an extension of the maturity date which aggregated 31 percent of total TDRs. In addition, 19 percent of total TDRs were a result of a combination of an interest rate reduction, extension of the maturity date, or reduction in the face amount and 19 percent were a result of a payment deferral or change to interest. For commercial real estate, the class with the largest dollar amount of TDRs, approximately 32 percent was due to a payment deferral or change to interest rate and 24 percent was due to a combination of an interest rate reduction, extension of the maturity date, or reduction in the face amount.

In addition to the TDRs that occurred during the period provided in the preceding table, the Company had TDRs with pre-modification loan balances of $24,390,000 for the six months ended June 30, 2012 for which other real estate owned was received in full or partial satisfaction of the loans. The majority of such TDRs was in commercial real estate.

4) Goodwill

The changes in the carrying amount of goodwill and accumulated impairment charge are as follows:

	Three Months ended June 30,				Six Months ended June 30,
(Dollars in thousands)	2012		2011		2012		2011
Net carrying value at beginning of period	$	106,100		146,259		106,100		146,259
Impairment charge		—		—		—		—
Net carrying value at end of period		106,100		146,259		106,100		146,259

(Dollars in thousands)	June 30, 2012			December 31, 2011
Gross carrying value		146,259			146,259
Accumulated impairment charge		(40,159	)		(40,159	)
Net carrying value	$	106,100			106,100

18

The Company performed its annual goodwill impairment test during the third quarter of 2011. Due to high levels of volatility and dislocation in prices of shares of publicly-held, exchange listed banking companies, a goodwill impairment charge was recognized by the Company during the third quarter of 2011. Prior to April 30, 2012, the Company had eleven bank reporting units, each of which had a goodwill impairment assessment. On April 30, 2012, the Company combined its eleven bank subsidiaries into a single commercial bank and the eleven bank reporting units are now aggregated for assessment of goodwill impairment. The Company has identified that the divisions are components of the Glacier Bank operating segment since there are segment managers; however, the components can be aggregated due to the components having similar economic characteristics.

Since there were no events or circumstances, including the combining of the eleven bank subsidiaries, that occurred since third quarter 2011 that would more-likely-than-not reduce the fair value of the Bank reporting unit below its carrying value, the Company did not perform interim testing at June 30, 2012.

5) Derivatives and Hedging Activities

The Company’s interest rate derivative financial instruments as of June 30, 2012 are as follows:

(Dollars in thousands)	Forecasted Notional Amount		Variable Interest Rate 1	Fixed Interest Rate  1			Term
Interest rate swap	$	160,000	3 month LIBOR		3.378	%	Oct. 21, 2014 - Oct. 21, 2021 2
Interest rate swap		100,000	3 month LIBOR		2.498	%	Nov 30, 2015 - Nov. 30, 2022 2

¹  The Company pays the fixed interest rate and the counterparties pay the Company the variable interest rate.

²  No cash will be exchanged prior to the term.

The hedging strategy converts the LIBOR based variable interest rate on forecasted borrowings to a fixed interest rate, thereby protecting the Company from floating interest rate variability.

The following table summarizes the fair value of the Company’s interest rate derivative financial instruments:

		Fair Value
(Dollars in thousands)	Balance Sheet Location	June 30, 2012		December 31, 2011
Interest rate swap	Other liabilities	$	14,845		8,906

Pursuant to the interest rate swap agreements, the Company pledged collateral to the counterparties in the form of investment securities totaling $22,087,000 at June 30, 2012. There was no collateral pledged from the counterparties to the Company as of June 30, 2012. There is the possibility that the Company may need to pledge additional collateral in the future.

19

6) Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income, included in stockholders’ equity, are as follows:

(Dollars in thousands)	June 30, 2012			December 31, 2011
Unrealized holding gains on available-for-sale securities	$	86,945			63,711
Tax effect		(33,822	)		(24,783	)
Net of tax amount		53,123			38,928
Change in fair value of derivatives used for cash flow hedges		(14,845	)		(8,906	)
Tax effect		5,775			3,465
Net of tax amount		(9,070	)		(5,441	)
Total accumulated other comprehensive income	$	44,053			33,487

7) Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period presented. Diluted earnings per share is computed by including the net increase in shares as if dilutive outstanding stock options were exercised, using the treasury stock method.

Basic and diluted earnings per share has been computed based on the following:

	Three Months ended June 30,				Six Months ended June 30,
(Dollars in thousands, except per share data)	2012		2011		2012		2011
Net income available to common stockholders, basic and diluted	$	18,981		11,886		35,314		22,171
Average outstanding shares - basic		71,928,697		71,915,073		71,921,885		71,915,073
Add: dilutive stock options and awards		156		—		105		—
Average outstanding shares - diluted		71,928,853		71,915,073		71,921,990		71,915,073
Basic earnings per share	$	0.26		0.17		0.49		0.31
Diluted earnings per share	$	0.26		0.17		0.49		0.31

There were 945,063 and 1,641,528 options excluded from the diluted average outstanding share calculation for the six months ended June 30, 2012 and 2011, respectively, due to the option exercise price exceeding the market price of the Company’s common stock.

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8) Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets and liabilities measured at fair value on a recurring basis, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended June 30, 2012.

Investment securities: fair value for available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections, and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. Where Level 1 or Level 2 inputs are not available, such securities are classified as Level 3 within the hierarchy.

Fair value determinations of investment securities are the responsibility of the Company’s corporate accounting department. The Company contracts with independent third party pricing vendors to generate fair value estimates on a monthly basis. The Company reviews the vendors’ inputs for fair value estimates and the recommended assignments of levels within the fair value hierarchy. The review includes the extent to which markets for investment securities are determined to have limited or no activity, or are judged to be active markets. The Company reviews the extent to which observable and unobservable inputs are used as well as the appropriateness of the underlying assumptions about risk that a market participant would use in active markets, with adjustments for limited or inactive markets. In considering the inputs to the fair value estimates, the Company places less reliance on quotes that are judged to not reflect orderly transactions, or are non-binding indications. The Company makes independent inquiries of other knowledgeable parties in testing the reliability of the inputs, including consideration for illiquidity, credit risk, and cash flow estimates. In assessing credit risk, the Company reviews payment performance, collateral adequacy, credit rating histories, and issuers’ financial statements with follow-up discussion with issuers. For those markets determined to be inactive, the valuation techniques used are models for which management verifies that discount rates are appropriately adjusted to reflect illiquidity and credit risk. The Company also independently obtains cash flow estimates that are stressed at levels that exceed those used by the independent third party pricing vendors.

21

Interest rate swap derivative agreements: fair values for interest rate swap derivative agreements are based upon the estimated amounts to settle the contracts considering current interest rates and are calculated using discounted cash flows that are observable or that can be corroborated by observable market data and, therefore, are classified within Level 2 of the valuation hierarchy. The inputs used to determine fair value include the 3 month Libor forward curve to estimate variable rate cash inflows and the spot Libor curve to estimate the discount rate. The estimated variable rate cash inflows are compared to the fixed rate outflows and such difference is discounted to a present value to estimate the fair value of the interest rate swaps. The Company also obtains and compares the reasonableness of the pricing from a secondary independent party.

The following schedules disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	205		—		205		—
U.S. government sponsored enterprises		25,488		—		25,488		—
State and local governments		1,193,080		—		1,193,080		—
Corporate bonds		159,926		—		159,926		—
Collateralized debt obligations		2,734		—		2,734		—
Residential mortgage-backed securities		2,022,849		—		2,022,849		—
Total assets measured at fair value on a recurring basis	$	3,404,282		—		3,404,282		—
Interest rate swaps	$	14,845		—		14,845		—
Total liabilities measured at fair value on a recurring basis	$	14,845		—		14,845		—

22

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	208		—		208		—
U.S. government sponsored enterprises		31,155		—		31,155		—
State and local governments		1,064,655		—		1,064,655		—
Corporate bonds		62,237		—		62,237		—
Collateralized debt obligations		5,366		—		5,366		—
Residential mortgage-backed securities		1,963,122		—		1,963,122		—
Total assets measured at fair value on a recurring basis	$	3,126,743		—		3,126,743		—
Interest rate swaps	$	8,906		—		8,906		—
Total liabilities measured at fair value on a recurring basis	$	8,906		—		8,906		—

Level 3 Reconciliation

There were no Level 3 fair value measurements during the six month period ended June 30, 2012.

The following schedule reconciles the opening and closing balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period ended June 30, 2011:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
				Investment Securities
(Dollars in thousands)	Total			Collateralized Debt Obligations			Residential Mortgage-backed Securities
Balance as of December 31, 2010	$	6,751			6,595			156
Total unrealized gains for the period included in other comprehensive income		1,641			1,598			43
Amortization, accretion and principal payments		(2,240	)		(2,240	)		—
Balance as of June 30, 2011	$	6,152			5,953			199

Non-recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a non-recurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended June 30, 2012.

Other real estate owned (“OREO”): OREO is carried at the lower of fair value at acquisition date or estimated fair value, less estimated cost to sell. Estimated fair value of other real estate owned is based on appraisals or evaluations. OREO is classified within Level 3 of the fair value hierarchy.

23

Collateral-dependent impaired loans, net of ALLL: loans included in the Company’s financials for which it is probable that the Company will not collect all principal and interest due according to contractual terms are considered impaired. Estimated fair value of collateral-dependent impaired loans is based on the fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company’s credit departments review appraisals for OREO and collateral-dependent loans, giving consideration to the highest and best use of the collateral. The appraisal or evaluation (new or updated) is considered the starting point for determining fair value. The Company also considers other factors and events in the environment that may affect the fair value. The fair values are reduced by discounts to consider lack of marketability and estimated cost to sell. The appraisals or evaluations (new or updated) are reviewed at least quarterly and more frequently based on current market conditions, including deterioration in a borrower’s financial condition and when property values may be subject to significant volatility. After review and acceptance of the collateral appraisal or evaluation (new or updated), adjustments to the impaired loan or OREO may occur. The Company generally obtains new or updated appraisals or evaluations annually.

Goodwill: Prior to April 30, 2012, goodwill was evaluated for impairment at the bank subsidiary level at least annually. On April 30, 2012, the Company combined its eleven bank subsidiaries into a single commercial bank and the eleven bank reporting units are now aggregated for assessment of goodwill impairment. The evaluation of goodwill impairment will be reviewed during the third quarter of 2012 and the inputs and valuation methods are not expected to change. The key inputs used to determine the implied fair value and the corresponding amount of the impairment charge includes quoted market prices of other banks, discounted cash flows and inputs from comparable transactions. These inputs are classified within Level 3 of the fair value hierarchy. The goodwill impairment evaluation is the responsibility of the Company’s corporate accounting department. Valuations and significant inputs developed by the independent valuation firm are reviewed by the Company for accuracy and reasonableness. For additional information regarding goodwill and reporting unit(s), see Note 4.

The following schedules disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	25,026		—		—		25,026
Collateral-dependent impaired loans, net of ALLL		37,159		—		—		37,159
Total assets measured at fair value on a non-recurring basis	$	62,185		—		—		62,185

24

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	38,076		—		—		38,076
Collateral-dependent impaired loans, net of ALLL		55,339		—		—		55,339
Goodwill		24,718		—		—		24,718
Total assets measured at fair value on a non-recurring basis	$	118,133		—		—		118,133

Fair Value of Financial Instruments

The following is a description of the methods used to estimate the fair value of all other assets and liabilities recognized at amounts other than fair value.

Cash and cash equivalents: fair value is estimated at book value.

Loans held for sale: fair value is estimated at book value due to the insignificant time between origination date and sale date.

Loans receivable, net of ALLL: fair value is estimated by discounting the future cash flows using the rates at which similar notes would be written for the same remaining maturities. The market rates used are based on current rates the Company would impose for similar loans and reflect a market participant assumption about risks associated with non-performance, illiquidity, and the structure and term of the loans along with local economic and market conditions. Estimated fair value of impaired loans is based on the fair value of the collateral, less estimated cost to sell, or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate). All impaired loans are classified as Level 3 and all other loans are classified as Level 2 within the hierarchy.

Accrued interest receivable: fair value is estimated at book value.

Non-marketable equity securities: fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities.

Deposits: fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from a knowledgeable independent third party and reviewed by the Company. The rates were the average of current rates offered by the Company’s local competitors. The estimated fair value of demand, NOW, savings, and money market deposits is the book value since rates are regularly adjusted to market rates and such deposits are classified in Level 1 of the valuation hierarchy. Certificate accounts and wholesale deposits are classified as Level 2 within the hierarchy.

Federal Home Loan Bank (“FHLB”) advances: fair value of non-callable FHLB advances is estimated by discounting the future cash flows using rates of similar advances with similar maturities. These rates were obtained from current rates offered by FHLB. The estimated fair value of callable FHLB advances was obtained from FHLB and the model was reviewed by the Company through discussions with FHLB.

25

Securities sold under agreements to repurchase (“repurchase agreements”) and other borrowed funds: fair value of term repurchase agreements and other term borrowings is estimated based on current repurchase rates and borrowing rates currently available to the Company for repurchases and borrowings with similar terms and maturities. The estimated fair value for overnight repurchase agreements and other borrowings is book value.

Subordinated debentures: fair value of the subordinated debt is estimated by discounting the estimated future cash flows using current estimated market rates. The market rates used were averages of currently traded trust preferred securities with similar characteristics to the Company’s issuances and obtained from an independent third party.

Accrued interest payable: fair value is estimated at book value.

Off-balance sheet financial instruments: commitments to extend credit and letters of credit represent the principal categories of off-balance sheet financial instruments. Rates for these commitments are set at time of loan closing, such that no adjustment is necessary to reflect these commitments at market value. The Company has an insignificant amount of off-balance sheet financial instruments.

The following schedules present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	140,419		140,419		—		—
Investment securities, available-for-sale		3,404,282		—		3,404,282		—
Loans held for sale		88,442		88,442		—		—
Loans receivable, net of ALLL		3,307,737		—		3,175,795		218,691
Accrued interest receivable		37,108		37,108		—		—
Non-marketable equity securities		50,371		—		50,371		—
Total financial assets	$	7,028,359		265,969		6,630,448		218,691
Financial liabilities
Deposits	$	4,982,269		3,300,960		1,689,452		—
FHLB advances		906,029		—		937,226		—
Repurchase agreements and other borrowed funds		476,757		—		476,757		—
Subordinated debentures		125,347		—		—		66,168
Accrued interest payable		5,076		5,076		—		—
Interest rate swaps		14,845		—		14,845		—
Total financial liabilities	$	6,510,323		3,306,036		3,118,280		66,168

26

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	128,032		128,032		—		—
Investment securities, available-for-sale		3,126,743		—		3,126,743		—
Loans held for sale		95,457		95,457		—		—
Loans receivable, net of ALLL		3,328,619		—		3,146,502		239,831
Accrued interest receivable		34,961		34,961		—		—
Non-marketable equity securities		49,694		—		49,694		—
Total financial assets	$	6,763,506		258,450		6,322,939		239,831
Financial liabilities
Deposits	$	4,821,213		3,132,261		1,698,382		—
FHLB advances		1,069,046		—		1,099,699		—
Repurchase agreements and other borrowed funds		268,638		—		268,642		—
Subordinated debentures		125,275		—		—		65,903
Accrued interest payable		5,825		5,825		—		—
Interest rate swaps		8,906		—		8,906		—
Total financial liabilities	$	6,298,903		3,138,086		3,075,629		65,903

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about management’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. In addition to the factors set forth in the sections titled “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as applicable, in this report and the Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Annual Report”), the following factors, among others, could cause actual results to differ materially from the anticipated results:

• local and national economic conditions could be less favorable than expected or could have a more direct and pronounced effect on the Company than expected;

• the risks associated with lending and potential adverse changes of the credit quality of loans in the Company’s portfolio, including as a result of declines in the housing and real estate markets in its geographic areas;

• increased loan delinquency rates;

• the risks presented by a continued economic downturn, which could adversely affect credit quality, loan collateral values, other real estate owned values, investment values, liquidity and capital levels, dividends and loan originations;

• changes in market interest rates, which could adversely affect the Company’s net interest income and profitability;

• legislative or regulatory changes that adversely affect the Company’s business, ability to complete pending or prospective future acquisitions, limit certain sources of revenue, or increase cost of operations;

• changes in accounting principles, policies and guidelines applicable to banking;

• costs or difficulties related to the integration of acquisitions;

• the goodwill the Company has recorded in connection with acquisitions could become additionally impaired, which may have an adverse impact on our earnings and capital;

• reduced demand for banking products and services;

• the risks presented by public stock market volatility, which could adversely affect the market price of our common stock and our ability to raise additional capital in the future;

• competition from other financial services companies in our markets;

• loss of services from the senior management team; and

• the Company’s success in managing risks involved in the foregoing.

Please take into account that the forward-looking statements only apply as of the date of this report or documents incorporated by reference herein. The Company does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that actual results are likely to differ materially from those expressed in such forward-looking statement.

28

Financial Condition Analysis

Assets

The following table summarizes the asset balances as of the dates indicated, and the amount of change from December 31, 2011 and June 30, 2011:

(Unaudited - Dollars in thousands)	June 30, 2012			December 31, 2011			June 30, 2011			$ Change from December 31, 2011			$ Change from June  30, 2011
Cash and cash equivalents	$	140,419			128,032			129,041			12,387			11,378
Investment securities, available-for-sale		3,404,282			3,126,743			2,784,415			277,539			619,867
Loans receivable
Residential real estate		525,551			516,807			527,808			8,744			(2,257	)
Commercial		2,293,876			2,295,927			2,390,388			(2,051	)		(96,512	)
Consumer and other		625,769			653,401			683,615			(27,632	)		(57,846	)
Loans receivable		3,445,196			3,466,135			3,601,811			(20,939	)		(156,615	)
Allowance for loan and lease losses		(137,459	)		(137,516	)		(139,795	)		57			2,336
Loans receivable, net		3,307,737			3,328,619			3,462,016			(20,882	)		(154,279	)
Other assets		581,664			604,512			602,848			(22,848	)		(21,184	)
Total assets	$	7,434,102			7,187,906			6,978,320			246,196			455,782

Investment securities increased $165 million, or 5 percent, during the current quarter and increased $620 million, or 22 percent, from June 30, 2011. During the current quarter and previous twelve months, the Company purchased investment securities to primarily offset the lack of loan growth and to maintain interest income. The increase in investment securities for the current quarter occurred in collateralized mortgage obligation (“CMO”), corporate and municipal bonds. The majority of the purchases were CMOs which were significantly offset by CMO principal paydowns during the quarter. Investment securities represent 46 percent of total assets at June 30, 2012 versus 44 percent at December 31, 2011 and 40 percent at June 30, 2011.

A real positive for the current quarter was the loan portfolio grew for the first time in several years. The loan portfolio increased during the current quarter by $12.0 million, or 1 percent annualized, to a total of $3.445 billion at June 30, 2012. Excluding net charge-offs of $7.1 million and loans of $5.4 million transferred to other real estate owned, loans increased $24.5 million, or 3 percent annualized, during the current quarter. The largest increase in dollars during the current quarter was in commercial loans which increased $10.4 million, or 0.5 percent, from March 31, 2012. The largest increase by percentage during the current quarter was in residential real estate loans which increased $10.1 million, or 2 percent, from March 31, 2012. The decrease in consumer and other loans was primarily driven by the Company reducing its exposure to consumer land and lot loans in combination with customers paying down lines of credit and reducing other debt. The continued slowness in the economy and low levels of loan demand could continue to place pressure on the Company in future periods and was the cause of the decrease in the loan portfolio over the prior periods. During the past twelve months, the loan portfolio decreased $157 million, or 4 percent, from total loans of $3.602 billion at June 30, 2011. The Company continues to reduce its exposure to land, lot and other construction loans which totaled $346 million as of June 30, 2012, a decrease of $92.9 million, or 21 percent, since the prior year second quarter.

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Liabilities

The following table summarizes the liability balances as of the dates indicated, and the amount of change from December 31, 2011 and June 30, 2011:

(Unaudited - Dollars in thousands)	June 30, 2012		December 31, 2011		June 30, 2011		$ Change from December 31, 2011			$ Change from June  30, 2011
Non-interest bearing deposits	$	1,066,662		1,010,899		916,887		55,763			149,775
Interest bearing deposits		3,915,607		3,810,314		3,787,912		105,293			127,695
Federal funds purchased		—		—		48,000		—			(48,000	)
Repurchase agreements		466,784		258,643		251,303		208,141			215,481
FHLB advances		906,029		1,069,046		925,061		(163,017	)		(19,032	)
Other borrowed funds		9,973		9,995		14,799		(22	)		(4,826	)
Subordinated debentures		125,347		125,275		125,203		72			144
Other liabilities		67,519		53,507		44,383		14,012			23,136
Total liabilities	$	6,557,921		6,337,679		6,113,548		220,242			444,373

At June 30, 2012, non-interest bearing deposits of $1.067 billion increased $27.6 million, or 3 percent, since March 31, 2012 and increased $150 million, or 16 percent, since June 30, 2011. Interest bearing deposits of $3.916 billion at June 30, 2012 included $646 million of wholesale deposits of which $180 million were reciprocal deposits (e.g., Certificate of Deposit Account Registry System deposits). In addition to reciprocal deposits, wholesale deposits include brokered deposits classified as NOW, money market deposit and certificate accounts. Interest bearing deposits increased $105 million, or 3 percent, since December 31, 2011 and included an increase of $38.2 million in wholesale deposits. Interest bearing deposits increased $128 million, or 3 percent, from June 30, 2011 and included a decrease of $43.4 million in wholesale deposits. The increase in deposits during the first half of 2012 and throughout 2011 has been driven by the Company’s success in generating new personal and business customer relationships, as well as existing customers retaining cash deposits for liquidity purposes due to the continued uncertainty in the current economic environment. These deposit increases have been beneficial to the Company in funding the investment securities portfolio growth at lower cost over the prior twelve months.

The Company’s level and mix of borrowings has fluctuated as needed to supplement deposit growth and to fund the growth in investment securities. Since the prior year end, Federal Home Loan Bank (“FHLB”) advances decreased $163 million and have decreased $19.0 million since the prior year second quarter. The increase in funding through repurchase agreements from the prior year end and the prior year second quarter was primarily due to the $195 million in wholesale repurchase agreements as of current quarter end compared to no wholesale repurchase agreements as of year end and only $15.0 million of wholesale repurchase agreements as of the prior year second quarter. The wholesale repurchase agreements were utilized as a source of low cost alternative funding.

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Stockholders’ Equity

The following table summarizes the stockholders’ equity balances as of the dates indicated, and the amount of change from December 31, 2011 and June 30, 2011:

(Unaudited - Dollars in thousands, except per share data)	June 30, 2012			December 31, 2011			June 30, 2011			$ Change from December 31, 2011		$ Change from June  30, 2011
Common equity	$	832,128			816,740			840,133			15,388		(8,005	)
Accumulated other comprehensive income		44,053			33,487			24,639			10,566		19,414
Total stockholders’ equity		876,181			850,227			864,772			25,954		11,409
Goodwill and core deposit intangible, net		(113,297	)		(114,384	)		(155,699	)		1,087		42,402
Tangible stockholders’ equity	$	762,884			735,843			709,073			27,041		53,811
Stockholders’ equity to total assets		11.79	%		11.83	%		12.39	%
Tangible stockholders’ equity to total tangible assets		10.42	%		10.40	%		10.39	%
Book value per common share	$	12.18			11.82			12.02			0.36		0.16
Tangible book value per common share	$	10.61			10.23			9.86			0.38		0.75
Market price per share at end of period	$	15.46			12.03			13.48			3.43		1.98

Tangible stockholders’ equity and book value per share increased $27.0 million and $0.38 per share from the prior year end, resulting in tangible stockholders’ equity to tangible assets of 10.42 percent and tangible book value per share of $10.61 as of June 30, 2012. The increases came from earnings retention and an increase in accumulated other comprehensive income. Tangible stockholders’ equity increased $53.8 million, or $0.75 per share since June 30, 2011, primarily a result of an increase in accumulated other comprehensive income. The $8.0 million decrease in common equity from June 30, 2011 included a third quarter 2011 goodwill impairment charge (net of tax) of $32.6 million.

On June 27, 2012, the Company’s Board of Directors declared a cash dividend of $0.13 per share, payable July 19, 2012 to shareholders of record on July 10, 2012. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Results of Operations – The Three Months ended June 30, 2012

Compared to the Three Months ended March 31, 2012 and June 30, 2011

Performance Summary

	Three Months ended
(Dollars in thousands, except per share data)	June 30, 2012			March 31, 2012			June 30, 2011
Net income	$	18,981			16,333			11,886
Diluted earnings per share	$	0.26			0.23			0.17
Return on average assets (annualized)		1.04	%		0.91	%		0.69	%
Return on average equity (annualized)		8.69	%		7.58	%		5.54	%

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The Company reported net income for the current quarter of $19.0 million, an increase of $7.1 million, or 60 percent, compared to $11.9 million for the prior year second quarter. The earnings improvement for the current quarter and the first half of 2012 was reflective of the reduction in the provision for loan losses as a result of the improvement in the credit quality. Diluted earnings per share for the current quarter was $0.26 per share, an increase of 53 percent from the prior year second quarter earnings per share of $0.17.

Revenue Summary

The following tables summarize revenue for the periods indicated, including the amount and percentage change from March 31, 2012 and June 30, 2011:

	Three Months ended
(Dollars in thousands)	June 30, 2012			March 31, 2012			June 30, 2011
Net interest income
Interest income	$	64,192			67,884			71,562
Interest expense		9,044			9,598			11,331
Total net interest income		55,148			58,286			60,231
Non-interest income
Service charges, loan fees, and other fees		12,404			11,438			12,258
Gain on sale of loans		7,522			6,813			4,291
Loss on sale of investments		—			—			(591	)
Other income		1,865			2,087			1,893
Total non-interest income		21,791			20,338			17,851
	$	76,939			78,624			78,082
Net interest margin (tax-equivalent)		3.49	%		3.73	%		4.01	%

(Dollars in thousands)	$ Change from March 31, 2012			$ Change from June  30, 2011			% Change from March 31, 2012			% Change from June  30, 2011
Net interest income
Interest income	$	(3,692	)	$	(7,370	)		-5	%		-10	%
Interest expense		(554	)		(2,287	)		-6	%		-20	%
Total net interest income		(3,138	)		(5,083	)		-5	%		-8	%
Non-interest income
Service charges, loan fees, and other fees		966			146			8	%		1	%
Gain on sale of loans		709			3,231			10	%		75	%
Loss on sale of investments		—			591			n/m			-100	%
Other income		(222	)		(28	)		-11	%		-1	%
Total non-interest income		1,453			3,940			7	%		22	%
	$	(1,685	)	$	(1,143	)		-2	%		-1	%

32

Net Interest Income

The current quarter net interest income of $55.1 million decreased $3.1 million, or 5 percent, over the prior quarter and decreased $5.1 million, or 8 percent, over the prior year second quarter. The current quarter interest income of $64.2 million decreased $3.7 million, or 5 percent, over the prior quarter and decreased $7.4 million, or 10 percent, over the prior year second quarter. A primary driver of the decrease in interest income was the $15.9 million of premium amortization (net of discount accretion) on investment securities in the current quarter which was an increase of $2.6 million over the prior quarter and an increase of $8.3 million over the prior year second quarter. The accelerated premium amortization during the current and prior quarters reflects the growth in the CMO investment securities over the course of the prior year as well as the increased mortgage refinance activity as mortgage rates have declined significantly to record lows over the same time period. The decrease in interest expense of $554 thousand, or 6 percent, from the prior quarter and the decrease of $2.3 million, or 20 percent, in interest expense from the prior year second quarter was the result of a decrease in interest rates on deposits as a result of the Company’s continued focus on reducing deposit and borrowing costs. The funding cost for the current quarter was 68 basis points compared to 72 basis points for the prior quarter and 89 basis points for the prior year second quarter.

The current quarter net interest margin as a percentage of earning assets, on a tax-equivalent basis, was 3.49 percent, a decrease of 24 basis points from the prior quarter net interest margin of 3.73 percent. Although there was a reduction in funding costs of 4 basis points during the current quarter compared to the prior quarter, the reduction was not enough to offset the 28 basis points reduction in yield on earning assets during the current quarter compared to the prior quarter. The decrease in yield on earning assets during the current quarter compared to the prior quarter was the result of a 12 basis points reduction in yield on the loan portfolio, and a 41 basis points reduction in yield on the investment securities. Of the 41 basis points reduction on investment securities, 28 basis points was due to the increase in premium amortization. The premium amortization in the current quarter accounted for a 94 basis points reduction in the net interest margin compared to a 79 basis points reduction in the prior quarter and 48 basis points reduction in the net interest margin in the prior year second quarter. As a result of fewer loans moving to non-accrual status and the greater dispositions of existing non-accrual loans, the reversal of interest income on non-accrual loans accounted for a 2 basis points reduction in the net interest margin during the current quarter.

Non-interest Income

Non-interest income for the current quarter totaled $21.8 million, an increase of $1.5 million over the prior quarter and an increase of $3.9 million over the same quarter last year. Gain on sale of loans increased $709 thousand, or 10 percent, over the prior quarter and $3.2 million, or 75 percent, over the prior year second quarter as there was an increase in origination and refinance volume due to lower interest rates and borrowers taking advantage of government assistance programs. Service charge fee income increased $966 thousand from the linked quarter, the majority of which was from higher overdraft fees driven by the increased number of deposit accounts. Service charge fee income increased $146 thousand, or 1 percent, from the prior year second quarter. Other income of $1.9 million for the current quarter was a decrease of $222 thousand from the prior quarter as a result of small changes in several categories. Included in other income was operating revenue of $186 thousand from other real estate owned and gains of $228 thousand on the sale of other real estate owned, which total $414 thousand for the current quarter compared to $528 thousand for the prior quarter and $697 thousand for the prior year second quarter.

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Non-interest Expense

The following tables summarize non-interest expense for the periods indicated, including the amount and percentage change from March 31, 2012 and June 30, 2011:

	Three Months ended
(Dollars in thousands)	June 30, 2012		March 31, 2012		June 30, 2011
Compensation and employee benefits	$	23,684		23,560		21,170
Occupancy and equipment		5,825		5,968		5,728
Advertising and promotions		1,713		1,402		1,635
Outsourced data processing		788		846		791
Other real estate owned		2,199		6,822		5,062
Federal Deposit Insurance Corporation premiums		1,300		1,712		2,197
Core deposit intangibles amortization		535		552		590
Other expense		10,146		8,183		9,047
Total non-interest expense	$	46,190		49,045		46,220

(Dollars in thousands)	$ Change from March 31, 2012			$ Change from June  30, 2011			% Change from March 31, 2012			% Change from June  30, 2011
Compensation and employee benefits	$	124		$	2,514			1	%		12	%
Occupancy and equipment		(143	)		97			-2	%		2	%
Advertising and promotions		311			78			22	%		5	%
Outsourced data processing		(58	)		(3	)		-7	%		0	%
Other real estate owned		(4,623	)		(2,863	)		-68	%		-57	%
Federal Deposit Insurance Corporation premiums		(412	)		(897	)		-24	%		-41	%
Core deposit intangibles amortization		(17	)		(55	)		-3	%		-9	%
Other expense		1,963			1,099			24	%		12	%
Total non-interest expense	$	(2,855	)	$	(30	)		-6	%		0	%

Non-interest expense of $46.2 million for the current quarter decreased by $2.9 million, or 6 percent, from the prior quarter and decreased by $30 thousand from the prior year second quarter. The changes over the prior quarter and the prior year second quarter were driven primarily by other real estate owned expense. Other real estate owned expense decreased $4.6 million, or 68 percent, from the prior quarter and decreased $2.9 million, or 57 percent, from the prior year second quarter. The current quarter other real estate owned expense of $2.2 million included $639 thousand of operating expense, $1.2 million of fair value write-downs, and $316 thousand of loss on sale of other real estate owned. Other real estate owned expense will fluctuate as the Company continues to work through non-performing loans and dispose of foreclosed properties.

Excluding other real estate owned expense, non-interest expense increased $1.8 million, or 4 percent, from the prior quarter and increased $2.8 million, or 7 percent, from the prior year second quarter. Compensation and employee benefits increased by $2.5 million, or 12 percent, from the prior year second quarter and was attributable to a revised Company incentive program and the restoration in 2012 of certain compensation cuts made in 2011. Advertising and promotion expense of $1.7 million for the current quarter increased $311 thousand over the prior quarter as the Company typically spends less on advertising in the first quarter. Other expense increased $2.0 million, or 24 percent, from the prior quarter primarily due to expenses associated with New Markets Tax Credit investments. Other expense increased $1.1 million, or 12 percent, from the prior year second quarter as a result of increases in several categories including loan expenses and miscellaneous expenses. The Company continues to work diligently in reducing expenses in areas of direct control.

34

Efficiency Ratio

The efficiency ratio for the current quarter was 54 percent compared to 52 percent for the prior year second quarter. The higher efficiency ratio was the result of a decrease in net interest income, primarily from an increase in premium amortization on investment securities, and an increase in non-interest expense, largely from higher compensation and other expenses.

Provision for Loan Losses

(Dollars in thousands)	Provision for Loan Losses		Net Charge-Offs		ALLL as a Percent of Loans			Accruing Loans 30-89 Days Past Due as a Percent of Loans			Non-Performing Assets to Total Subsidiary Assets
Q2 2012	$	7,925		7,052		3.99	%		1.41	%		2.69	%
Q1 2012		8,625		9,555		3.98	%		1.24	%		2.91	%
Q4 2011		8,675		9,252		3.97	%		1.42	%		2.92	%
Q3 2011		17,175		18,877		3.92	%		0.60	%		3.49	%
Q2 2011		19,150		20,184		3.88	%		1.14	%		3.68	%
Q1 2011		19,500		15,778		3.86	%		1.44	%		3.78	%
Q4 2010		27,375		24,525		3.66	%		1.21	%		3.91	%
Q3 2010		19,162		26,570		3.47	%		1.06	%		4.03	%

The levels of net-charged off loans continue to trend lower as the Company continues to work through the non-performing assets. Net charged-off loans during the current quarter of $7.1 million decreased $2.5 million compared to the prior quarter and decreased $13.1 million, or 65 percent, compared to the prior year second quarter. The current quarter provision for loan losses was $7.9 million, which decreased $700 thousand compared to the $8.6 million for the prior quarter and a decrease of $11.2 million from the second quarter of 2011. Loan portfolio growth, composition, average loan size, credit quality considerations, and other environmental factors will continue to determine the level of provision for loan loss expense.

The determination of the allowance for loan and lease losses (“ALLL” or “allowance”) and the related provision for loan losses is a critical accounting estimate that involves management’s judgments about current environmental factors which affect loan losses, such factors including economic conditions, changes in collateral values, net charge-offs, and other factors discussed below in “Additional Management’s Discussion and Analysis.”

35

Results of Operations – The Six Months ended June 30, 2012

Compared to the Six Months ended June 30, 2011

Performance Summary

	Six Months ended
(Dollars in thousands, except per share data)	June 30, 2012			June 30, 2011
Net income	$	35,314			22,171
Diluted earnings per share	$	0.49			0.31
Return on average assets (annualized)		0.97	%		0.66	%
Return on average equity (annualized)		8.14	%		5.25	%

Net income for the six months ended June 30, 2012 was $35.3 million, which was an increase of $13.1 million, or 59 percent, over the prior year first six months. Diluted earnings per share of $0.49 was an increase of $0.18, or 58 percent, earned in the first half of 2011.

Revenue Summary

The following table summarizes revenue for the periods indicated, including the amount and percentage change from June 30, 2011:

	Six Months ended						$ Change			% Change
(Dollars in thousands)	June 30, 2012			June 30, 2011
Net interest income
Interest income	$	132,076		$	139,935		$	(7,859	)		-6	%
Interest expense		18,642			23,000			(4,358	)		-19	%
Total net interest income		113,434			116,935			(3,501	)		-3	%
Non-interest income
Service charges, loan fees, and other fees		23,842			23,443			399			2	%
Gain on sale of loans		14,335			8,985			5,350			60	%
Loss on sale of investments		—			(467	)		467			-100	%
Other income		3,952			3,285			667			20	%
Total non-interest income		42,129			35,246			6,883			20	%
	$	155,563		$	152,181		$	3,382			2	%
Net interest margin (tax-equivalent)		3.61	%		3.96	%

36

Net Interest Income

Net interest income for the first half of 2012 decreased $3.5 million, or 3 percent, over the same period last year. During 2012, interest income decreased $7.9 million, or 6 percent, while interest expense decreased $4.4 million, or 19 percent from the first half of 2011. The decrease in interest income from the first half of the prior year was due to the increase in premium amortization on investment securities coupled with the reduction in loan balances, the combination of which put further pressure on earning asset yields. Interest income was reduced by $29.2 million in premium amortization (net of discount accretion) on investment securities which was an increase of $11.7 million from the first six months of the prior year. This increase in premium amortization was the result of both the increased purchases of investment securities combined with the continued refinance activity. The decrease in interest expense during the current year was primarily attributable to the decreases in rates on interest bearing deposits and borrowings. The funding cost for the first half of 2012 was 70 basis points compared to 92 basis points for the first half 2011.

The net interest margin, on a tax-equivalent basis, for the first half of 2012 was 3.61 percent, a 35 basis points reduction from the net interest margin of 3.96 percent for the first half of 2011. The reduction was attributable to a lower yield and volume of loans coupled with an increase in lower yielding investment securities and higher premium amortization on investment securities. The premium amortization in 2012 accounted for an 87 basis points reduction in the net interest margin which is an increase of 31 basis points compared to a 56 basis points reduction in the net interest margin for the same period last year.

Non-interest Income

Non-interest income of $42.1 million for 2012 increased $6.9 million, or 20 percent, over non-interest income of $35.2 million for the first half of 2011. Gain on sale of loans for the first half of 2012 increased $5.4 million, or 60 percent, from the first half of 2011 due to greater refinance and loan origination activity. Other income for the first half of 2012 increased $667 thousand, or 20 percent, over the first half of 2011 of which $573 thousand of the increase was from debit card income. Included in other income was operating revenue of $237 thousand from other real estate owned and gains of $704 thousand on the sale of other real estate owned, which aggregated $942 thousand for the first half of 2012 compared to $965 thousand for the same period in the prior year.

Non-interest Expense

The following table summarizes non-interest expense for the periods indicated, including the amount and percentage change from June 30, 2011:

	Six Months ended				$ Change			% Change
(Dollars in thousands)	June 30, 2012		June 30, 2011
Compensation and employee benefits	$	47,244	$	42,773	$	4,471			10	%
Occupancy and equipment		11,793		11,682		111			1	%
Advertising and promotions		3,115		3,119		(4	)		0	%
Outsourced data processing		1,634		1,564		70			4	%
Other real estate owned		9,021		7,161		1,860			26	%
Federal Deposit Insurance Corporation premiums		3,012		4,521		(1,509	)		-33	%
Core deposit intangibles amortization		1,087		1,317		(230	)		-17	%
Other expense		18,329		16,559		1,770			11	%
Total non-interest expense	$	95,235	$	88,696	$	6,539			7	%

37

Compensation and employee benefits for the first half of 2012 increased $4.5 million, or 10 percent, and was attributable to a revised Company incentive program and the restoration in the first half of 2012 of certain compensation cuts made in the first half of 2011. Other real estate owned expense of $9.0 million in the first six months of 2012 increased $1.9 million, or 26 percent, from the first half of the prior year. The other real estate owned expense for the first half of 2012 included $1.5 million of operating expenses, $6.7 million of fair value write-downs, and $865 thousand of loss on sale of other real estate owned. Other expense in the first six months of 2012 increased $1.8 million, or 11 percent, from the first half of the prior year and was primarily driven by increases in loan expenses and several miscellaneous categories.

Efficiency Ratio

The efficiency ratio was 53 percent for the first half of 2012 and 52 percent for the first half of 2011. Although there were significant increases in non-interest income from the first half of the prior year, it was not enough to offset the decrease in net interest income and the increase in non-interest expense in the first half of 2012.

Provision for Loan Losses

The provision for loan losses was $16.6 million for the first half of 2012, a decrease of $22.1 million, or 57 percent, from the same period in the prior year. Net charged-off loans during the first half of 2012 was $16.6 million, a decrease of $19.4 million from the first half of 2011. The largest category of net charge-offs was in land, lot and other construction loans which had net charge-offs of $6.3 million, or 38 percent of total net charged-off loans.

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Additional Management’s Discussion and Analysis

Lending Activity and Practices

The Company focuses its lending activity primarily on the following types of loans: 1) first-mortgage, conventional loans secured by residential properties, particularly single-family, 2) commercial lending that concentrates on targeted businesses and 3) installment lending for consumer purposes (e.g., auto, home equity, etc.). Note 3 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements” provides more information about the loan portfolio.

The following table summarizes the Company’s loan portfolio by regulatory classification:

	Loans Receivable, by Loan Type									%  Change from 12/31/11			%  Change from 6/30/11
(Dollars in thousands)	Balance 6/30/12			Balance 12/31/11			Balance 6/30/11
Custom and owner occupied construction	$	39,052			35,422			32,094			10	%		22	%
Pre-sold and spec construction		49,638			58,811			61,022			-16	%		-19	%
Total residential construction		88,690			94,233			93,116			-6	%		-5	%
Land development		93,361			103,881			134,539			-10	%		-31	%
Consumer land or lots		114,475			125,396			136,255			-9	%		-16	%
Unimproved land		59,548			66,074			74,597			-10	%		-20	%
Developed lots for operative builders		21,101			25,180			26,976			-16	%		-22	%
Commercial lots		25,035			26,621			27,581			-6	%		-9	%
Other construction		32,079			34,346			38,536			-7	%		-17	%
Total land, lot, and other construction		345,599			381,498			438,484			-9	%		-21	%
Owner occupied		701,078			697,131			691,370			1	%		1	%
Non-owner occupied		444,419			436,021			436,674			2	%		2	%
Total commercial real estate		1,145,497			1,133,152			1,128,044			1	%		2	%
Commercial and industrial		413,908			408,054			425,524			1	%		-3	%
1st lien		690,638			688,455			659,950			0	%		5	%
Junior lien		87,544			95,508			97,344			-8	%		-10	%
Total 1-4 family		778,182			783,963			757,294			-1	%		3	%
Home equity lines of credit		338,459			350,229			368,864			-3	%		-8	%
Other consumer		109,043			109,235			112,567			0	%		-3	%
Total consumer		447,502			459,464			481,431			-3	%		-7	%
Agriculture		162,534			151,031			164,498			8	%		-1	%
Other		151,726			150,197			148,860			1	%		2	%
Loans held for sale		(88,442	)		(95,457	)		(35,440	)		-7	%		150	%
Total	$	3,445,196			3,466,135			3,601,811			-1	%		-4	%

39

Non-performing Assets

The following table summarizes information regarding non-performing assets at the dates indicated:

(Dollars in thousands)	At or for the  Six Months ended June 30, 2012			At or for the Year ended December 31, 2011			At or for the  Six Months ended June 30, 2011
Other real estate owned	$	69,170			78,354			99,585
Accruing loans 90 days or more past due
Residential real estate		421			59			1,026
Commercial		2,527			1,168			5,469
Consumer and other		319			186			682
Total		3,267			1,413			7,177
Non-accrual loans
Residential real estate		19,835			11,881			14,444
Commercial		92,693			109,641			128,764
Consumer and other		13,935			12,167			11,576
Total		126,463			133,689			154,784
Total non-performing assets 1	$	198,900			213,456			261,546
Non-performing assets as a percentage of subsidiary assets		2.69	%		2.92	%		3.68	%
Allowance for loan and lease losses as a percentage of non-performing loans		106	%		102	%		86	%
Accruing loans 30-89 days past due	$	48,707			49,086			41,151
Troubled debt restructurings not included in non-performing assets	$	88,483			98,859			35,687
Interest income 2	$	3,392			7,441			4,298

¹ As of June 30, 2012, non-performing assets have not been reduced by U.S. government guarantees of $2.4 million.

² Amounts represent estimated interest income that would have been recognized on loans accounted for on a non-accrual basis as of the end of each period had such loans performed pursuant to contractual terms.

40

The following tables summarize selected information identified by regulatory classification on the Company’s non-performing assets.

(Dollars in thousands)	Non-performing Assets, by Loan Type						Non- Accruing Loans 6/30/12		Accruing Loans 90  Days or More Past Due 6/30/12		Other Real Estate Owned 6/30/12
	Balance 6/30/12		Balance 12/31/11		Balance 6/30/11
Custom and owner occupied construction	$	2,914		1,531		2,979		1,821		415		678
Pre-sold and spec construction		7,473		5,506		17,941		5,036		—		2,437
Total residential construction		10,387		7,037		20,920		6,857		415		3,115
Land development		47,154		56,152		80,685		25,248		356		21,550
Consumer land or lots		9,728		8,878		12,693		4,847		127		4,754
Unimproved land		28,914		35,771		43,215		17,213		96		11,605
Developed lots for operative builders		6,932		9,001		6,731		5,089		186		1,657
Commercial lots		2,581		2,032		2,353		960		—		1,621
Other construction		5,124		5,133		4,582		212		—		4,912
Total land, lot and other construction		100,433		116,967		150,259		53,569		765		46,099
Owner occupied		18,210		23,931		21,591		10,551		829		6,830
Non-owner occupied		3,509		4,897		8,210		3,380		—		129
Total commercial real estate		21,719		28,828		29,801		13,931		829		6,959
Commercial and industrial		8,077		12,855		13,262		7,588		433		56
1st lien		34,285		31,083		31,312		26,203		15		8,067
Junior lien		8,861		2,506		2,687		8,536		325		—
Total 1-4 family		43,146		33,589		33,999		34,739		340		8,067
Home equity lines of credit		6,939		6,361		5,764		6,454		227		258
Other consumer		405		360		382		281		47		77
Total consumer		7,344		6,721		6,146		6,735		274		335
Agriculture		7,541		7,010		7,159		3,044		211		4,286
Other		253		449		—		—		—		253
Total	$	198,900		213,456		261,546		126,463		3,267		69,170

41

	Accruing 30-89 Days Delinquent Loans, by Loan Type
(Dollars in thousands)	Balance 6/30/12		Balance 12/31/11		Balance 6/30/11
Custom and owner occupied construction	$	—		—		285
Pre-sold and spec construction		968		250		962
Total residential construction		968		250		1,247
Land development		460		458		1,826
Consumer land or lots		1,650		1,801		982
Unimproved land		1,129		1,342		1,200
Developed lots for operative builders		199		1,336		125
Commercial lots		—		—		148
Other construction		—		—		120
Total land, lot and other construction		3,438		4,937		4,401
Owner occupied		10,943		8,187		10,789
Non-owner occupied		950		1,791		6,643
Total commercial real estate		11,893		9,978		17,432
Commercial and industrial		20,847		4,637		5,033
1st lien		7,220		14,405		5,618
Junior lien		880		6,471		1,297
Total 1-4 family		8,100		20,876		6,915
Home equity lines of credit		2,541		3,416		4,043
Other consumer		698		1,172		1,089
Total consumer		3,239		4,588		5,132
Agriculture		222		3,428		352
Other		—		392		639
Total	$	48,707		49,086		41,151

The Company continues to actively and methodically manage the disposition of non-performing assets which has resulted in a reduction of $15.7 million, or 7 percent, during the current quarter to a total of $198.9 million in non-performing assets. The non-performing assets also decreased $62.6 million, or 24 percent, from the prior year second quarter. The Company’s early stage delinquencies (accruing loans 30-89 days past due) of $48.7 million continue to fluctuate and at June 30, 2012 increased $6.1 million from the prior quarter early stage delinquencies of $42.6 million and increased $7.6 million from the prior year second quarter early stage delinquencies of $41.2 million.

The largest category of non-performing assets was the land, lot and other construction category which was $100 million, or 50 percent, of the non-performing assets at June 30, 2012. Included in this category was $47.2 million of land development loans and $28.9 million in unimproved land loans at June 30, 2012. Although land, lot and other construction loans the past three years put pressure on the Company’s credit quality, the Company has continued to reduce this category. During the current quarter, land, lot and other construction non-performing assets were reduced by $7.2 million, or 7 percent.

42

Most of the Company’s non-performing assets are secured by real estate, and based on the most current information available to management, including updated appraisals or evaluations, the Company believes the value of the underlying real estate collateral is adequate to minimize significant charge-offs or loss to the Company. The Company evaluates the level of its non-performing assets, the values of the underlying real estate and other collateral, and related trends in net charge-offs in determining the adequacy of the ALLL. Through pro-active credit administration, the Company works closely with its borrowers to seek favorable resolution to the extent possible, thereby attempting to minimize net charge-offs or losses to the Company. Throughout the year, the Company has maintained an adequate allowance for loan and lease losses while working to reduce non-performing assets. The improvement in the credit quality ratios during the previous twelve months are a product of this effort.

For non-performing construction loans involving residential structures, the percentage of completion exceeds 95 percent at June 30, 2012. For non-performing construction loans involving commercial structures, the percentage of completion ranges from projects not started to projects completed at June 30, 2012. During the construction loan term, all construction loan collateral properties are inspected at least monthly, or more frequently as needed, until completion. Draws on construction loans are predicated upon the results of the inspection and advanced based upon a percentage of completion basis versus original budget percentages. When construction loans become non-performing and the associated project is not complete, the Company on a case-by-case basis makes the decision to advance additional funds or to initiate collection/foreclosure proceedings. Such decision includes obtaining “as-is” and “at completion” appraisals for consideration of potential increases or decreases in the collateral’s value. The Company also considers the increased costs of monitoring progress to completion, and the related collection/holding period costs should collateral ownership be transferred to the Company. With very limited exception, the Company does not disburse additional funds on non-performing loans. Instead, the Company has proceeded to collection and foreclosure actions in order to reduce the Company’s exposure to loss on such loans.

Construction loans accounted for 48 percent of the non-accrual loans of which unimproved land and land development loans collectively account for the bulk of the non-accrual construction loans. The Company had non-accrual construction loans that aggregated 5 percent or more of the Company’s $60.4 million in non-accrual construction loans at June 30, 2012 in the following geographic locations: Western Montana, Northern Idaho, and Boise and Sun Valley, Idaho. With locations and operations in the contiguous northern Rocky Mountain states of Idaho and Montana, the geography and economies of each of these geographic areas are predominantly tied to real estate development given the sprawling abundance of timbered valleys and mountainous terrain with significant lakes, streams and watershed areas. Consistent with the general economic downturn, the market for upscale primary, secondary and other housing as well as the associated construction and building industries have stalled after years of significant growth. As the housing market (rental and owner-occupied) and related industries continue to recover from the downturn, the Company continues to reduce its exposure to loss in the construction loan and other segments of the total loan portfolio.

43

Impaired Loans

Loans are designated impaired when, based upon current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement and therefore, the Company has serious doubts as to the ability of such borrowers to fulfill the contractual obligation. When the ultimate collectability of the total principal of an impaired loan is in doubt and designated as non-accrual, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the total principal on an impaired loan is not in doubt, contractual interest is generally credited to interest income when received under the cash basis method. Impaired loans were $238 million and $259 million as of June 30, 2012 and December 31, 2011, respectively. The ALLL includes valuation allowances of $19.2 million and $18.8 million specific to impaired loans as of June 30, 2012 and December 31, 2011, respectively. Of the total impaired loans at June 30, 2012, there were 36 commercial real estate and other commercial loans that accounted for $97.2 million, or 41 percent, of the impaired loans. The 36 loans were collateralized by 131 percent of the loan value, the majority of which had appraisals (new or updated) during the last year, such appraisals reviewed at least quarterly taking into account current market conditions. Of the total impaired loans at June 30, 2012, there were 197 loans aggregating $124 million, or 52 percent, whereby the borrowers had more than one impaired loan. The amount of impaired loans that have had partial charge-offs during the year for which the Company continues to have concern about the collectability of the remaining loan balance was $20.8 million. Of these loans, there were charge-offs of $7.0 million during 2012.

For collateral-dependent loans and real estate loans for which foreclosure or a deed-in-lieu of foreclosure is probable, impairment is measured by the fair value of the collateral, less estimated cost to sell. The fair value of the collateral is determined primarily based upon appraisal or evaluation (new or updated) of the underlying property value. The Company reviews appraisals or evaluations, giving consideration to the highest and best use of the collateral, with values reduced by discounts to consider lack of marketability and estimated cost to sell. Appraisals or evaluations (new or updated) are reviewed at least quarterly and more frequently based on current market conditions, including deterioration in a borrower’s financial condition and when property values may be subject to significant volatility. After review and acceptance of the collateral appraisal or evaluation (new or updated), adjustments to an impaired loan’s value may occur.

In deciding whether to obtain a new or updated appraisal or evaluation, the Company considers the impact of the following factors and environmental events:

• passage of time;

• improvements to, or lack of maintenance of, the collateral property;

• stressed and volatile economic conditions, including market values;

• changes in the performance, risk profile, size and complexity of the credit exposure;

• limited or specific use collateral property;

• high loan-to-value credit exposures;

• changes in the adequacy of the collateral protections, including loan covenants and financially responsible guarantors;

• competing properties in the market area;

• changes in zoning and environmental contamination;

• the nature of subsequent transactions (e.g., modification, restructuring, refinancing); and

• the availability of alternative financing sources.

The Company also takes into account 1) the Company’s experience with whether the appraised values of impaired collateral-dependent loans are actually realized, and 2) the timing of cash flows expected to be received from the underlying collateral to the extent such timing is significantly different than anticipated in the most recent appraisal.

44

The Company generally obtains appraisals or evaluations (new or updated) annually for collateral underlying impaired loans. For collateral-dependent loans for which the appraisal of the underlying collateral is more than twelve months old, the Company updates collateral valuations through procedures that include obtaining current inspections of the collateral property, broker price opinions, comprehensive market analyses and current data for conditions and assumptions (e.g., discounts, comparable sales and trends) underlying the appraisals’ valuation techniques. The Company’s impairment and valuation procedures take into account new and updated appraisals on similar properties in the same area in order to capture current market valuation changes, unfavorable and favorable.

Restructured Loans

A restructured loan is considered a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The Company had TDR loans of $151 million as of June 30, 2012. The Company’s TDR loans are considered impaired loans of which $62.3 million are designated as non-accrual.

Each restructured debt is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s prospective ability to service the debt as modified. The Company discourages the multiple loan strategy when restructuring loans regardless of whether or not the notes are TDR loans. The Company does not have any commercial TDR loans as of June 30, 2012 that have repayment dates extended at or near the original maturity date for which the Company has not classified as impaired. At June 30, 2012, the Company has TDR loans of $32.4 million that are in non-accrual status or that have had partial charge-offs during the year, the borrowers of which continue to have $35.9 million in other loans that are on accrual status.

Other Real Estate Owned

The loan book value prior to the acquisition and transfer of the loan into other real estate owned (“OREO”) during 2012 was $24.4 million of which $8.8 million was residential real estate, $14.8 million was commercial, and $827 thousand was consumer loans. The loan collateral acquired in foreclosure during 2012 was $16.4 million of which $6.0 million was residential real estate, $9.9 million was commercial, and $538 thousand was consumer loans. The following table sets forth the changes in OREO for the periods indicated:

(Dollars in thousands)	Six Months ended June  30, 2012			Year ended December 31, 2011			Six Months ended June  30, 2011
Balance at beginning of period	$	78,354			73,485			73,485
Additions		16,372			79,295			49,570
Capital improvements		—			669			321
Write-downs		(6,653	)		(16,246	)		(2,351	)
Sales		(18,903	)		(58,849	)		(21,440	)
Balance at end of period	$	69,170			78,354			99,585

The Company believes that the write-downs in 2012 and 2011 are not considered a trend in that several of such properties have characteristics unique to the property, including special or limited use, and locations of such properties. The Company also determined that the write-downs were not indicative of a trend which would likely affect the future operating results in light of the remaining holdings of real property and the Company’s experience in the geographic markets where the properties are located. However, there can be no assurance that future significant write-downs will not occur.

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Allowance for Loan and Lease Losses

Determining the adequacy of the ALLL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The ALLL methodology is designed to reasonably estimate the probable loan and lease losses within the Company’s loan portfolio. Accordingly, the ALLL is maintained within a range of estimated losses. The determination of the ALLL, including the provision for loan losses and net charge-offs, is a critical accounting estimate that involves management’s judgments about all known relevant internal and external environmental factors that affect loan losses, including the credit risk inherent in the loan portfolio, economic conditions nationally and in the local markets in which the Company operates, changes in collateral values, delinquencies, non-performing assets and net charge-offs.

Although the Company continues to actively monitor economic trends, soft economic conditions combined with potential declines in the values of real estate that collateralize most of the Company’s loan portfolio may adversely affect the credit risk and potential for loss to the Company.

The ALLL evaluation is well documented and approved by the Company’s Board of Directors. In addition, the policy and procedures for determining the balance of the ALLL are reviewed annually by the Company’s Board of Directors, the internal audit department, independent credit reviewers and state and federal bank regulatory agencies.

At the end of each quarter, the Company analyzes its loan portfolio and maintains an ALLL at a level that is appropriate and determined in accordance with accounting principles generally accepted in the United States of America. The allowance consists of a specific valuation allowance component and a general valuation allowance component. The specific valuation allowance component relates to loans that are determined to be impaired. A specific valuation allowance is established when the fair value of a collateral-dependent loan or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate) is lower than the carrying value of the impaired loan. The general valuation allowance component relates to probable credit losses inherent in the balance of the loan portfolio based on prior loss experience, adjusted for changes in trends and conditions of qualitative or environmental factors.

The Bank divisions’ credit administration reviews the loan portfolio to determine which loans are impaired and estimates the specific valuation allowance. The impaired loans and related specific valuation allowance are then provided to the Company’s credit administration for further review and approval. The Company’s credit administration also determines the estimated general valuation and reviews and approves the overall ALLL for the Company. The credit administration of the Company exercises significant judgment when evaluating the effect of applicable qualitative or environmental factors on the Company’s historical loss experience for loans not identified as impaired. Quantification of the impact upon the Company’s ALLL is inherently subjective as data for any factor may not be directly applicable, consistently relevant, or reasonably available for management to determine the precise impact of a factor on the collectability of the Company’s unimpaired loan portfolio as of each evaluation date. The Company’s credit administration documents its conclusions and rationale for changes that occur in each applicable factor’s weight (i.e., measurement) and ensures that such changes are directionally consistent based on the underlying current trends and conditions for the factor. To have directional consistency, the provision for loan losses and credit quality should generally move in the same direction.

The Company is committed to a conservative management of the credit risk within the loan portfolio, including the early recognition of problem loans. The Company’s credit risk management includes stringent credit policies, individual loan approval limits, limits on concentrations of credit, and committee approval of larger loan requests. Management practices also include regular internal and external credit examinations, identification and review of individual loans and leases experiencing deterioration of credit quality, procedures for the collection of non-performing assets, quarterly monitoring of the loan portfolio, semi-annual review of loans by industry, and periodic stress testing of the loans secured by real estate.

46

The Company’s model of eleven Bank divisions with separate management teams provides substantial local oversight to the lending and credit management function. The Company’s business model affords multiple reviews of larger loans before credit is extended, a significant benefit in mitigating and managing the Company’s credit risk. The geographic dispersion of the market areas in which the Company operates further mitigates the risk of credit loss. While this process is intended to limit credit exposure, there can be no assurance that further problem credits will not arise and additional loan losses incurred, particularly in periods of rapid economic downturns.

The primary responsibility for credit risk assessment and identification of problem loans rests with the loan officer of the account. This continuous process of identifying impaired loans is necessary to support management’s evaluation of the ALLL adequacy. An independent loan review function verifying credit risk ratings evaluates the loan officer and management’s evaluation of the loan portfolio credit quality. The loan review function also assesses the evaluation process and provides an independent analysis of the adequacy of the ALLL.

The Company considers the ALLL balance of $137 million adequate to cover inherent losses in the loan portfolio as of June 30, 2012. However, no assurance can be given that the Company will not, in any particular period, sustain losses that are significant relative to the ALLL amount, or that subsequent evaluations of the loan portfolio applying management’s judgment about then current factors, including economic and regulatory developments, will not require significant changes in the ALLL. Under such circumstances, this could result in enhanced provisions for loan losses. See additional risk factors in “Part II. Item 1A. Risk Factors.”

The following table summarizes the allocation of the ALLL as of the dates indicated:

	June 30, 2012								December 31, 2011								June 30, 2011
(Dollars in thousands)	Allowance for Loan and Lease Losses		Percent of ALLL in Category			Percent of Loans in Category			Allowance for Loan and Lease Losses		Percent of ALLL in Category			Percent of Loans in Category			Allowance for Loan and Lease Losses		Percent of ALLL in Category			Percent of Loans in Category
Residential real estate	$	18,139		13	%		15	%		17,227		13	%		15	%		17,412		12	%		15	%
Commercial real estate		79,098		58	%		48	%		76,920		56	%		48	%		79,885		57	%		48	%
Other commercial		20,570		15	%		19	%		20,833		15	%		18	%		19,615		14	%		18	%
Home equity		10,904		8	%		12	%		13,616		10	%		13	%		13,625		10	%		13	%
Other consumer		8,748		6	%		6	%		8,920		6	%		6	%		9,258		7	%		6	%
Totals	$	137,459		100	%		100	%		137,516		100	%		100	%		139,795		100	%		100	%

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The following table summarizes the ALLL experience for the periods indicated:

(Dollars in thousands)	Six Months ended June  30, 2012			Year ended December 31, 2011			Six Months ended June  30, 2011
Balance at beginning of period	$	137,516			137,107			137,107
Provision for loan losses		16,550			64,500			38,650
Charge-offs
Residential real estate		(1,320	)		(5,671	)		(3,157	)
Commercial loans		(14,890	)		(52,428	)		(28,485	)
Consumer and other loans		(3,527	)		(11,267	)		(6,676	)
Total charge-offs		(19,737	)		(69,366	)		(38,318	)
Recoveries
Residential real estate		147			486			315
Commercial loans		2,491			3,830			1,602
Consumer and other loans		492			959			439
Total recoveries		3,130			5,275			2,356
Charge-offs, net of recoveries		(16,607	)		(64,091	)		(35,962	)
Balance at end of period	$	137,459			137,516			139,795
Allowance for loan and lease losses as a percentage of total loans		3.99	%		3.97	%		3.88	%
Net charge-offs as a percentage of total loans		0.48	%		1.85	%		1.00	%

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The following table summarizes net charge-offs at the dates indicated, including identification by regulatory classification:

	Net Charge-Offs (Recoveries), Year-to-Date Period Ending, By Loan Type								Charge-Offs 6/30/12		Recoveries 6/30/12
(Dollars in thousands)	Balance 6/30/12			Balance 12/31/11		Balance 6/30/11
Custom and owner occupied construction	$	—			206		131			—		—
Pre-sold and spec construction		2,393			4,069		3,123			2,511		118
Total residential construction		2,393			4,275		3,254			2,511		118
Land development		2,706			17,055		8,088			3,321		615
Consumer land or lots		1,957			7,456		4,570			2,187		230
Unimproved land		517			4,047		1,905			758		241
Developed lots for operative builders		1,201			943		617			1,212		11
Commercial lots		(81	)		237		184			39		120
Other construction		—			1,568		1,615			—		—
Total land, lot and other construction		6,300			31,306		16,979			7,517		1,217
Owner occupied		1,318			3,815		1,869			1,418		100
Non-owner occupied		189			3,861		1,101			549		360
Total commercial real estate		1,507			7,676		2,970			1,967		460
Commercial and industrial		819			7,871		6,237			1,393		574
1st lien		2,122			7,031		3,635			2,232		110
Junior lien		2,441			1,663		1,346			2,614		173
Total 1-4 family		4,563			8,694		4,981			4,846		283
Home equity lines of credit		807			3,261		1,262			911		104
Other consumer		32			615		245			258		226
Total consumer		839			3,876		1,507			1,169		330
Agriculture		94			134		(2	)		230		136
Other		92			259		36			104		12
Total	$	16,607			64,091		35,962			19,737		3,130

The Company’s allowance is considered adequate to absorb losses from any class of its loan portfolio. For the periods ended June 30, 2012 and 2011, the Company believes the allowance is commensurate with the risk in the Company’s loan portfolio and is directionally consistent with the change in the quality of the Company’s loan portfolio. At June 30, 2012, the allowance was $137 million, a decrease of $57 thousand from the prior year end and a decrease of $2.3 million from a year ago. The allowance was 3.99 percent of total loans outstanding at June 30, 2012, compared to 3.97 percent at December 31, 2011 and 3.88 percent at June 30, 2011. The allowance was 106 percent of non-performing loans at June 30, 2012, an increase from 102 percent at December 31, 2011 and an increase from 86 percent at June 30, 2011.

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The Company’s allowance consisted of the following components as of the dates indicated:

(Dollars in thousands)	June 30, 2012		December 31, 2011		June 30, 2011
Specific valuation allowance	$	19,208		18,828		13,895
General valuation allowance		118,251		118,688		125,900
Total ALLL	$	137,459		137,516		139,795

During 2012, the ALLL decreased by $57 thousand, the net result of a $380 thousand increase in the specific valuation allowance and a $437 thousand decrease in the general valuation allowance. The increase in the specific valuation allowance since the prior year end was primarily due to the increase in loans with a specific valuation allowance of $4.2 million. The general valuation allowance remained stable since the prior year end due to a minimal decrease in loans collectively evaluated for impairment.

Presented below are select statistics that were also considered when determining the adequacy of the Company’s ALLL at June 30, 2012:

Positive Trends

• Non-accrual construction loans (i.e., residential construction and land, lot and other construction) were $60.4 million, or 48 percent, of the $126 million of non-accrual loans at June 30, 2012, a decrease of $2.1 million from March 31, 2012 and a decrease of $24.9 million from June 30, 2011. Non-accrual construction loans accounted for 48 percent of the $131 million of non-accrual loans at March 31, 2012 and 55 percent of the $155 million of non-accrual loans at June 30, 2011.

• The $21.5 million total of non-accrual loans in the commercial real estate and commercial and industrial at June 30, 2012 decreased by $4.1 million from the prior quarter end and decreased $11.8 million from June 30, 2011.

• Non-performing loans as a percent of total loans decreased to 3.77 percent at June 30, 2012 as compared to 4.09 percent at March 31, 2012 and 4.50 percent at June 30, 2011.

• Charge-offs, net of recoveries, for the second quarter of 2012 were $7.1 million, a $2.5 million decrease from the prior quarter and a $13.1 million decrease from the same quarter of 2011.

• Net charge-offs of construction loans were $3.9 million, or 56 percent, of the $7.1 million of net charge-offs during the current quarter compared to net charge-offs of construction loans of $4.8 million, or 50 percent, of the $9.6 million of net charge-offs during the prior quarter.

• The allowance as a percent of non-performing loans was 106 percent at June 30, 2012, compared to 102 percent at year end 2011 and 86 percent at June 30, 2011.

Negative Trends

• The $44.5 million total of non-accrual loans in the agriculture, 1-4 family, home equity lines of credit, consumer, and other loans at June 30, 2012 increased by $1.7 million from the prior quarter end and increased by $8.4 million from June 30, 2011.

• Early stage delinquencies (accruing loans 30-89 days past due) increased to $48.7 million at June 30, 2012 from $42.6 million at March 31, 2012 and $41.2 million at June 30, 2011.

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When applied to the Company’s historical loss experience, the environmental factors result in the provision for loan losses being recorded in the period in which the loss has probably occurred. When the loss is confirmed at a later date, a charge-off is recorded. During 2012, loan charge-offs, net of recoveries, exceeded the provision for loan losses by $57 thousand. During the same period in 2011, the provision for loan losses exceeded loan charge-offs, net of recoveries, by $2.7 million.

The Company provides commercial services to individuals, small to medium size businesses, community organizations and public entities from 108 locations, including 99 branches, across Montana, Idaho, Wyoming, Colorado, Utah, and Washington. The Rocky Mountain areas in which the Company operates has diverse economies and markets that are tied to commodities (crops, livestock, minerals, oil and natural gas), tourism, real estate and land development and an assortment of industries, both manufacturing and service-related. Thus, the changes in the global, national, and local economies are not uniform across the Company’s geographic locations.

Though stabilizing, the soft economic conditions during much of 2010 continued during 2011 and the first half of 2012, including declining sales of existing real property (e.g., single family residential, multi-family, commercial buildings and land), elevated levels of existing inventory of real property, increases in real property delinquencies and foreclosures and corresponding decreases in absorption rates, and lower values of real property that collateralize most of the Company’s loan portfolio, among other factors. The weak economic conditions combined with the elevated levels of non-performing loans and charge-offs for commercial real estate loans contributed to the higher provision for loan losses in this loan portfolio class as compared to the other classes. National unemployment rates increased steadily from 5.0 in the first part of 2008 to a range of 8.5 to 10.0 during 2009 through 2011 and has recently declined to 8.2 in June of 2012. The unemployment rates for most states in which the Company conducts operations were generally lower throughout this time period compared to the national unemployment rate. Agricultural price declines in livestock and grain in 2009 have recovered significantly and remain strong. While prices for oil have held strong, prices for natural gas currently remain weak (due to excess supply) especially when compared to the exceptionally high price levels of natural gas during 2008. The tourism industry and related lodging continues to be a source of strength for the locations where the Company’s market areas have national parks and similar recreational areas in the market areas served.

In evaluating the need for a specific or general valuation allowance for impaired and unimpaired loans, respectively, within the Company’s construction loan portfolio, including residential construction and land, lot and other construction loans, the credit risk related to such loans was considered in the ongoing monitoring of such loans, including assessments based on current information, including new or updated appraisals or evaluations of the underlying collateral, expected cash flows and the timing thereof, as well as the estimated cost to sell when such costs are expected to reduce the cash flows available to repay or otherwise satisfy the construction loan. Construction loans are 13 percent of the Company’s total loan portfolio and account for 48 percent of the Company’s non-accrual loans at June 30, 2012. Collateral securing construction loans includes residential buildings (e.g., single/multi-family and condominiums), commercial buildings, and associated land (multi-acre parcels and individual lots, with and without shorelines). Outstanding balances are centered in Western Montana and Northern Idaho, as well as Boise and Sun Valley, Idaho.

For additional information regarding the ALLL, its relation to the provision for loan losses and risk related to asset quality, see Note 3 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

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Investment Activity

It has generally been the Company’s policy to maintain a liquid portfolio above policy limits. The Company’s investment securities are generally classified as available-for-sale and are carried at estimated fair value with unrealized gains or losses, net of tax, reflected as an adjustment to stockholders’ equity. The Company’s investment portfolio is primarily comprised of residential mortgage-backed securities and state and local government securities which are largely exempt from federal income tax. The Company uses the federal statutory rate of 35 percent in calculating its tax-equivalent yield. The residential mortgage-backed securities are typically short-term and provide the Company with on-going liquidity as scheduled and pre-paid principal payments are made on the securities. The Company assesses individual securities in its investment securities portfolio for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant.

For additional investment activity information, see Note 2 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

Other-Than-Temporary Impairment on Securities Analysis

Non-marketable equity securities owned at June 30, 2012 primarily consisted of stock issued by the FHLB of Seattle and Topeka, such shares measured at cost in recognition of the transferability restrictions imposed by the issuers. Other non-marketable equity securities include Federal Agriculture Mortgage Corporation and Bankers’ Bank of the West Bancorporation, Inc.

With respect to FHLB stock, the Company evaluates such stock for other-than-temporary impairment. Such evaluation takes into consideration 1) FHLB deficiency, if any, in meeting applicable regulatory capital targets, including risk-based capital requirements, 2) the significance of any decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the time period for any such decline, 3) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, 4) the impact of legislative and regulatory changes on the FHLB, and 5) the liquidity position of the FHLB.

Based on the Company’s analysis of its impaired non-marketable equity securities as of June 30, 2012, the Company determined that none of such securities had other-than-temporary impairment.

In evaluating debt securities for other-than-temporary impairment losses, management assesses whether the Company intends to sell the security or if it is more-likely-than-not that the Company will be required to sell the debt security. In so doing, management considers contractual constraints, liquidity, capital, asset / liability management and securities portfolio objectives.

The Company believes that macroeconomic conditions occurring during the first half of 2012 and throughout 2011 have unfavorably impacted the fair value of certain debt securities in its investment portfolio. On August 5, 2011, Standard and Poor’s downgraded the United States long-term debt rating from its AAA rating to AA+. On August 8, 2011, Standard and Poor’s downgraded from AAA to AA+ the credit ratings of certain long-term debt instruments issued by Fannie Mae and Freddie Mac and other U.S. government agencies linked to long-term United States debt. For debt securities with limited or inactive markets, the impact of these macroeconomic conditions upon fair value estimates includes higher risk-adjusted discount rates and downgrades in credit ratings provided by nationally recognized credit rating agencies, (e.g., Moody’s, S&P, Fitch, and DBRS).

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The following table separates investments with an unrealized loss position at June 30, 2012 into two categories: investments purchased prior to 2012 and those purchased during the first half of 2012. Of those investments purchased prior to 2012, the fair market value and unrealized loss at December 31, 2011 is also presented.

	June 30, 2012								December 31, 2011
(Dollars in thousands)	Fair Value		Unrealized Loss			Unrealized Loss as a Percent of Fair Value			Fair Value		Unrealized Loss			Unrealized Loss as a Percent of Fair Value
Temporarily impaired securities purchased prior to 2012
State and local governments	$	17,753		(217	)		-1.22	%		17,532		(468	)		-2.67	%
Corporate bonds		25,249		(183	)		-0.72	%		24,526		(1,254	)		-5.11	%
Collateralized debt obligations		2,734		(114	)		-4.17	%		5,366		(282	)		-5.26	%
Residential mortgage-backed securities		415,178		(2,612	)		-0.63	%		670,619		(6,326	)		-0.94	%
Total	$	460,914		(3,126	)		-0.68	%		718,043		(8,330	)		-1.16	%
Temporarily impaired securities purchased during 2012
State and local governments	$	67,635		(629	)		-0.93	%
Corporate bonds		32,946		(245	)		-0.74	%
Residential mortgage-backed securities		513,727		(3,032	)		-0.59	%
Total	$	614,308		(3,906	)		-0.64	%
Temporarily impaired securities
State and local governments	$	85,388		(846	)		-0.99	%
Corporate bonds		58,195		(428	)		-0.74	%
Collateralized debt obligations		2,734		(114	)		-4.17	%
Residential mortgage-backed securities		928,905		(5,644	)		-0.61	%
Total	$	1,075,222		(7,032	)		-0.65	%

With respect to severity, the following table provides the number of securities and amount of unrealized loss in the various ranges of unrealized loss as a percent of book value.

(Dollars in thousands)	Number of Debt Securities		Unrealized Loss
Greater than 15.0%		1	$	(12	)
10.1% to 15.0%		3		(568	)
5.1% to 10.0%		3		(169	)
0.1% to 5.0%		482		(6,283	)
Total		489	$	(7,032	)

With respect to the duration of the impaired debt securities, the Company identified 56 which have been continuously impaired for the twelve months ending June 30, 2012. The valuation history of such securities in the prior year(s) was also reviewed to determine the number of months in prior year(s) in which the identified securities were in an unrealized loss position.

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The following table provides details of the 56 securities which have been continuously impaired for the twelve months ended June 30, 2012, including the most notable loss for any one bond in each category.

(Dollars in thousands)	Number of Debt Securities		Unrealized Loss for 12 Months Or More			Most Notable Loss
State and local governments		10	$	(179	)		(69	)
Corporate bonds		5		(32	)		(6	)
Collateralized debt obligations		6		(114	)		(28	)
Residential mortgage-backed securities		35		(1,335	)		(394	)
Total		56	$	(1,660	)

With respect to the collateralized debt obligation securities, each is in the form of a pooled trust preferred structure of which the Company owns a portion of the Senior Notes tranche. All of the assets underlying the pooled trust preferred structure are capital securities issued by trust subsidiaries of holding companies of banks and thrifts.

Of the 35 residential mortgage-backed securities, 28 have underlying collateral consisting of U.S. government guaranteed mortgages (e.g., GNMA) and U.S. government sponsored enterprise (e.g., FHLMC) guaranteed mortgages. Each of the 7 remaining residential mortgage-backed securities have underlying non-guaranteed private label whole loan collateral of which 3 have 30-year fixed rate residential mortgages considered to be “Prime” and 4 have 30-year fixed rate residential mortgages considered to be “ALT – A.” None of the underlying mortgage collateral is considered “subprime.” The Company engages a third-party to perform detailed analysis for other-than-temporary impairment of such securities. Such analysis takes into consideration original and current data for the tranche and CMO structure, the non-guaranteed classification of each CMO tranche, current and deal inception credit ratings, credit support (protection) afforded the tranche through the subordination of other tranches in the CMO structure, the nature of the collateral (e.g., Prime or Alt-A) underlying each CMO tranche, and realized cash flows since purchase.

Based on the Company’s analysis of its impaired debt securities as of June 30, 2012, the Company determined that none of such securities had other-than-temporary impairment.

Sources of Funds

The Company’s deposits have traditionally been the principal source of funds for use in lending and other business purposes. The Company has a number of different deposit programs designed to attract both short-term and long-term deposits from the general public by providing a wide selection of accounts and rates. These programs include non-interest bearing demand accounts, interest bearing checking, regular statement savings, money market deposit accounts, and fixed rate certificates of deposit with maturities ranging from three months to five years, negotiated-rate jumbo certificates, and individual retirement accounts. In addition, the Company obtains wholesale deposits through various programs including reciprocal deposit programs (e.g., Certificate of Deposit Account Registry System).

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The Company also obtains funds from repayment of loans and investment securities, securities sold under agreements to repurchase (“repurchase agreements”), advances from the FHLB, other borrowings, and sale of loans and investment securities. Loan repayments are a relatively stable source of funds, while interest bearing deposit inflows and outflows are significantly influenced by general interest rate levels and market conditions. Borrowings and advances may be used on a short-term basis to compensate for reductions in normal sources of funds such as deposit inflows at less than projected levels. Borrowings also may be used on a long-term basis to support expanded activities and to match maturities of longer-term assets.

Short-term borrowings

A critical component of the Company’s liquidity and capital resources is access to short-term borrowings to fund its operations. Short-term borrowings are accompanied by increased risks managed by asset liability committees (“ALCO”) such as rate increases or unfavorable change in terms which would make it more costly to obtain future short-term borrowings. The Company’s short-term borrowing sources include FHLB advances, federal funds purchased, wholesale deposits, and retail and wholesale repurchase agreements. The Company also has access to the short-term discount window borrowing programs of the Federal Reserve Bank. FHLB advances and certain other short-term borrowings may be extended as long-term borrowings to decrease certain risks such as liquidity or interest rate risk; however, the reduction in risks are weighed against the increased cost of funds.

The following table provides information relating to short-term borrowings which consists of borrowings that mature within one year of period end:

(Dollars in thousands)	At or for the  Six Months ended June 30, 2012			At or for the Year ended December 31, 2011
Repurchase agreements
Amount outstanding at end of period	$	466,784			258,643
Weighted interest rate on outstanding amount		0.38	%		0.42	%
Maximum outstanding at any month-end	$	466,784			338,352
Average balance	$	327,240			267,058
Weighted average interest rate		0.37	%		0.51	%
FHLB advances
Amount outstanding at end of period	$	629,000			792,000
Weighted interest rate on outstanding amount		0.51	%		0.68	%
Maximum outstanding at any month-end	$	774,000			877,017
Average balance	$	730,148			721,226
Weighted average interest rate		0.59	%		0.76	%

Contractual Obligations and Off-Balance Sheet Arrangements

In the normal course of business, there are various outstanding commitments to extend credit, such as letters of credit and un-advanced loan commitments, which are not reflected in the accompanying condensed consolidated financial statements. Management does not anticipate any material losses as a result of these transactions. The Company has outstanding debt maturities, the largest aggregate amount of which were FHLB advances.

55

Liquidity Risk

Liquidity risk is the possibility that the Company will not be able to fund present and future obligations as they come due because of an inability to liquidate assets or obtain adequate funding at a reasonable cost. The objective of liquidity management is to maintain cash flows adequate to meet current and future needs for credit demand, deposit withdrawals, maturing liabilities and corporate operating expenses. Effective liquidity management entails three elements:

1. Assessing on an ongoing basis, the current and expected future needs for funds, and ensuring that sufficient funds or access to funds exist to meet those needs at the appropriate time.

2. Providing for an adequate cushion of liquidity to meet unanticipated cash flow needs that may arise from potential adverse circumstances ranging from high probability/low severity events to low probability/high severity.

3. Balancing the benefits between providing for adequate liquidity to mitigate potential adverse events and the cost of that liquidity.

The following table identifies certain liquidity sources and capacity available to the Company at June 30, 2012:

(Dollars in thousands)	June 30, 2012
FHLB advances
Borrowing capacity	$	1,147,337
Amount utilized		(906,029	)
Amount available	$	241,308
Federal Reserve Bank discount window
Borrowing capacity	$	470,971
Amount utilized		—
Amount available	$	470,971
Unsecured lines of credit available	$	171,000
Unencumbered investment securities
U.S. government and federal agency	$	205
U.S. government sponsored enterprises		5,776
State and local governments		1,018,711
Corporate bonds		159,926
Collateralized debt obligations		2,734
Residential mortgage-backed securities		761,423
Total unencumbered securities	$	1,948,775

The Company has a wide range of versatility in managing the liquidity and asset/liability mix. The Company’s ALCO committee meets regularly to assess liquidity risk, among other matters. The Company monitors liquidity and contingency funding alternatives through management reports of liquid assets (e.g., investment securities), both unencumbered and pledged, as well as borrowing capacity, both secured and unsecured.

56

Capital Resources

Maintaining capital strength continues to be a long-term objective. Abundant capital is necessary to sustain growth, provide protection against unanticipated declines in asset values, and to safeguard the funds of depositors. Capital also is a source of funds for loan demand and enables the Company to effectively manage its assets and liabilities. Taking these considerations into account, the Company may, as it has done in the past, decide to utilize a portion of its strong capital position to repurchase shares of its outstanding common stock, from time to time, depending on market price and other relevant considerations.

The Federal Reserve Board has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company. The Company and the Bank were considered well capitalized by their respective regulators as of June 30, 2012 and 2011. There are no conditions or events since June 30, 2012 that management believes have changed the Company’s or the Bank’s risk-based capital category.

The following table illustrates the Federal Reserve Board’s capital adequacy guidelines and the Company’s compliance with those guidelines as of June 30, 2012.

(Dollars in thousands)	Tier 1 (Core) Capital			Tier 2 (Total) Capital			Leverage Capital
Total stockholders’ equity	$	876,181			876,181			876,181
Less:
Goodwill and intangibles		(113,297	)		(113,297	)		(113,297	)
Net unrealized gains on investment securities and change in fair value of derivatives used for cash flow hedges		(44,053	)		(44,053	)		(44,053	)
Other adjustments		(35	)		(35	)		(35	)
Plus:
Allowance for loan and lease losses		—			56,752			—
Subordinated debentures		124,500			124,500			124,500
Total regulatory capital	$	843,296			900,048			843,296
Risk weighted assets	$	4,459,465			4,459,465
Total adjusted average assets							$	7,218,158
Capital as % of risk weighted assets		18.91	%		20.18	%		11.68	%
Regulatory “well capitalized” requirement		6.00	%		10.00	%
Excess over “well capitalized” requirement		12.91	%		10.18	%

Dividend payments were $0.26 per share for both six month periods ended June 30, 2012 and 2011. The payment of dividends is subject to government regulation in that regulatory authorities may prohibit banks and bank holding companies from paying dividends that would constitute an unsafe or unsound banking practice. Additionally, current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share measured over the previous four fiscal quarters.

In addition to the primary and safeguard liquidity sources available, the Company has the capacity to issue 117,187,500 shares of common stock of which 71,931,386 has been issued as of June 30, 2012. The Company also has the capacity to issue 1,000,000 shares of preferred shares of which none are currently issued.

57

Federal and State Income Taxes

The Company files a consolidated federal income tax return, using the accrual method of accounting. All required tax returns have been timely filed. Financial institutions are subject to the provisions of the Internal Revenue Code of 1986, as amended, in the same general manner as other corporations.

Under Montana, Idaho, Colorado and Utah law, financial institutions are subject to a corporation income tax, which incorporates or is substantially similar to applicable provisions of the Internal Revenue Code. The corporation income tax is imposed on federal taxable income, subject to certain adjustments. State taxes are incurred at the rate of 6.75 percent in Montana, 7.6 percent in Idaho, 5 percent in Utah and 4.63 percent in Colorado. Wyoming and Washington do not impose a corporate income tax.

The Company has equity investments in Certified Development Entities which have received allocations of New Markets Tax Credits (“NMTC”). Administered by the Community Development Financial Institutions Fund of the U.S. Department of the Treasury, the NMTC program is aimed at stimulating economic and community development and job creation in low-income communities. The federal income tax credits received are claimed over a seven-year credit allowance period. The Company also has equity investments in Low-Income Housing Tax Credits which are indirect federal subsidies used to finance the development of affordable rental housing for low-income households. The federal income tax credits are claimed over a ten-year credit allowance period. The Company has investments in Qualified Zone Academy and Qualified School Construction bonds whereby the Company receives quarterly federal income tax credits in lieu of taxable interest income until the bonds mature. The federal income tax credits on these bonds are subject to federal and state income tax.

Following is a list of expected federal income tax credits to be received in the years indicated.

(Dollars in thousands)	New Markets Tax Credits		Low-Income Housing Tax Credits		Investment Securities Tax Credits		Total
2012	$	2,681		1,270		943		4,894
2013		2,775		1,270		926		4,971
2014		2,850		1,270		904		5,024
2015		2,850		1,175		880		4,905
2016		1,014		1,175		855		3,044
Thereafter		450		4,208		4,432		9,090
	$	12,620		10,368		8,940		31,928

Income tax expense for the six months ended June 30, 2012 and 2011 was $8.5 million and $2.7 million, respectively. The Company’s effective tax rate for the six months ended June 30, 2012 and 2011 was 19.3 percent and 10.7 percent, respectively. The primary reason for the low effective rates is the amount of tax-exempt investment income and federal tax credits. The tax-exempt income was $19.0 million and $14.6 million for the six months ended June 30, 2012 and 2011, respectively. The federal tax credit benefits were $2.2 million and $1.8 million for the six months ended June 30, 2012 and 2011, respectively. The Company continues its investments in select municipal securities and variable interest entities whereby the Company receives federal tax credits.

58

Average Balance Sheet

The following schedule provides 1) the total dollar amount of interest and dividend income of the Company for earning assets and the average yield; 2) the total dollar amount of interest expense on interest bearing liabilities and the average rate; 3) net interest and dividend income and interest rate spread; and 4) net interest margin and net interest margin tax-equivalent.

	Three Months ended June 30, 2012							Six Months ended June 30, 2012
(Dollars in thousands)	Average Balance		Interest & Dividends		Average Yield/ Rate			Average Balance		Interest & Dividends		Average Yield/ Rate
Assets
Residential real estate loans	$	590,516		7,495		5.08	%	$	587,637		15,279		5.20	%
Commercial loans		2,280,478		30,430		5.35	%		2,285,357		61,471		5.39	%
Consumer and other loans		628,155		8,813		5.63	%		633,729		17,983		5.69	%
Total loans 1		3,499,149		46,738		5.36	%		3,506,723		94,733		5.42	%
Tax-exempt investment securities 2		882,988		9,309		4.22	%		875,304		18,982		4.34	%
Taxable investment securities 3		2,472,893		8,145		1.32	%		2,427,506		18,361		1.51	%
Total earning assets		6,855,030		64,192		3.76	%		6,809,533		132,076		3.89	%
Goodwill and intangibles		113,587							113,862
Non-earning assets		362,873							360,584
Total assets	$	7,331,490						$	7,283,979
Liabilities
NOW accounts	$	859,523		355		0.17	%	$	845,172		724		0.17	%
Savings accounts		446,431		86		0.08	%		436,780		177		0.08	%
Money market deposit accounts		882,154		576		0.26	%		878,197		1,176		0.27	%
Certificate accounts		1,048,941		3,013		1.15	%		1,060,470		6,298		1.19	%
Wholesale deposits 4		640,300		579		0.36	%		641,903		1,188		0.37	%
FHLB advances		1,001,208		3,218		1.29	%		1,006,459		6,599		1.31	%
Repurchase agreements, federal funds purchased and other borrowed funds		487,863		1,217		1.00	%		472,102		2,480		1.05	%
Total interest bearing liabilities		5,366,420		9,044		0.68	%		5,341,083		18,642		0.70	%
Non-interest bearing deposits		1,030,231							1,016,917
Other liabilities		56,013							53,432
Total liabilities		6,452,664							6,411,432
Stockholders’ Equity
Common stock		719							719
Paid-in capital		641,765							642,317
Retained earnings		190,389							186,180
Accumulated other comprehensive income		45,953							43,331
Total stockholders’ equity		878,826							872,547
Total liabilities and stockholders’ equity	$	7,331,490						$	7,283,979
Net interest income			$	55,148						$	113,434
Net interest spread						3.08	%						3.19	%
Net interest margin						3.23	%						3.34	%
Net interest margin (tax-equivalent)						3.49	%						3.61	%

¹  Total loans are gross of the allowance for loan and lease losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.

²  Excludes tax effect of $4,122,000 and $8,404,000 on tax-exempt investment security income for the three and six months ended June 30, 2012, respectively.

³  Excludes tax effect of $386,000 and $772,000 on investment security tax credits for the three and six months ended June 30, 2012, respectively.

⁴  Wholesale deposits include brokered deposits classified as NOW, money market deposit and certificate accounts, including reciprocal deposits.

59

Rate/Volume Analysis

Net interest income can be evaluated from the perspective of relative dollars of change in each period. Interest income and interest expense, which are the components of net interest income, are shown in the following table on the basis of the amount of any increases (or decreases) attributable to changes in the dollar levels of the Company’s interest earning assets and interest bearing liabilities (“Volume”) and the yields earned and rates paid on such assets and liabilities (“Rate”). The change in interest income and interest expense attributable to changes in both volume and rates has been allocated proportionately to the change due to volume and the change due to rate.

	Six Months ended June 30, 2012 vs. 2011 Increase (Decrease) Due to:
(Dollars in thousands)	Volume			Rate			Net
Interest income
Residential real estate loans	$	189			(1,782	)		(1,593	)
Commercial loans		(3,278	)		(1,286	)		(4,564	)
Consumer and other loans		(1,821	)		(857	)		(2,678	)
Investment securities		9,080			(8,104	)		976
Total interest income		4,170			(12,029	)		(7,859	)
Interest expense
NOW accounts		114			(455	)		(341	)
Savings accounts		44			(161	)		(117	)
Money market deposit accounts		14			(921	)		(907	)
Certificate accounts		(113	)		(2,240	)		(2,353	)
Wholesale deposits		136			(527	)		(391	)
FHLB advances		273			685			958
Repurchase agreements, federal funds purchased and other borrowed funds		775			(1,982	)		(1,207	)
Total interest expense		1,243			(5,601	)		(4,358	)
Net interest income	$	2,927			(6,428	)		(3,501	)

Net interest income decreased $3.5 million for the first half of 2012 compared to the first half of 2011. The decrease in interest income was driven primarily by the continued purchase of low yielding investment securities to offset the lower volume and reduced rate loans. Additionally, there was an increase in premium amortization on investment securities which reduced interest income. Although, the Company was able to lower interest expense by reducing deposit and borrowing interest rates, it was not enough to offset the reduction in interest income.

Effect of inflation and changing prices

Generally accepted accounting principles often require the measurement of financial position and operating results in terms of historical dollars, without consideration for change in relative purchasing power over time due to inflation. Virtually all assets of the Company are monetary in nature; therefore, interest rates generally have a more significant impact on a company’s performance than does the effect of inflation.

60

Item 3. Quantitative and Qualitative Disclosure about Market Risk

The Company believes there have not been any material changes in information about the Company’s market risk than was provided in the 2011 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as required by Exchange Act Rules 240.13a-15(b) and 15d-14(c)) as of the date of this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s current disclosure controls and procedures are effective and timely, providing them with material information relating to the Company required to be disclosed in the reports the Company files or submits under the Exchange Act.

Changes in Internal Controls

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the second quarter 2012, to which this report relates that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting. Although the Company combined its eleven bank subsidiaries into one single commercial bank during the second quarter 2012, the Company has determined that there were no related changes in internal controls that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various claims, legal actions and complaints which arise in the ordinary course of business. In the Company’s opinion, all such matters are adequately covered by insurance, are without merit or are of such kind, or involve such amounts, that unfavorable disposition would not have a material adverse effect on the financial condition or results of operations of the Company.

Item 1A. Risk Factors

The Company believes there have been no material changes from risk factors previously disclosed in the 2011 Annual Report. The risks and uncertainties described in the 2011 Annual Report should be carefully reviewed. These are not the only risks and uncertainties that the Company faces. Additional risks and uncertainties that the Company does not currently know about or that the Company currently believes are immaterial, or that the Company has not predicted, may also harm its business operations or adversely affect the Company. If any of these risks or uncertainties actually occurs, the Company’s business, financial condition, operating results or liquidity could be adversely affected.

61

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not Applicable

(b) Not Applicable

(c) Not Applicable

Item 3. Defaults upon Senior Securities

(a) Not Applicable

(b) Not Applicable

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

(a) Not Applicable

(b) Not Applicable

Item 6. Exhibits

Exhibit 31.1 –	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
Exhibit 31.2 –	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
Exhibit 32 –	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes – Oxley Act of 2002
Exhibit 101 –	The following financial information from Glacier Bancorp, Inc’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 is formatted in XBRL: (i) the Unaudited Condensed Consolidated Statements of Financial Condition, (ii) the Unaudited Condensed Consolidated Statements of Operations, (iii) the Unaudited Condensed Consolidated Statements of Stockholders’ Equity and Comprehensive Income, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Unaudited Condensed Consolidated Financial Statements.

62

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GLACIER BANCORP, INC.
August 8, 2012	/s/ Michael J. Blodnick
	Michael J. Blodnick
	President/CEO
August 8, 2012	/s/ Ron J. Copher
	Ron J. Copher
	Executive Vice President/CFO

63

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael J. Blodnick, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Glacier Bancorp, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 8, 2012

/s/ Michael J. Blodnick

Michael J. Blodnick

President/CEO

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ron J. Copher, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Glacier Bancorp, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 8, 2012

/s/ Ron J. Copher

Ron J. Copher

Executive Vice President/CFO

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Glacier Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Michael J. Blodnick, President and Chief Executive Officer, and Ron J. Copher, Executive Vice President and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

August 8, 2012

/s/ Michael J. Blodnick

Michael J. Blodnick

President/CEO

/s/ Ron J. Copher

Ron J. Copher

Executive Vice President/CFO

XML

Goodwill (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Accumulated impairment charge
Gross carrying value	$ 146,259		$ 146,259
Accumulated impairment charge	(40,159)		(40,159)
Net carrying value	$ 106,100	$ 106,100	$ 106,100	$ 146,259	$ 146,259	$ 146,259

XML

Fair Value of Assets and Liabilities (Details 2) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Major class of assets with a recorded change re-measuring at fair value on a non-recurring basis
Other real estate owned	$ 25,026	$ 38,076
Collateral-dependent impaired loans, net of ALLL	37,159	55,339
Goodwill		24,718
Total assets measured at fair value on a non-recurring basis	62,185	118,133
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Major class of assets with a recorded change re-measuring at fair value on a non-recurring basis
Other real estate owned
Collateral-dependent impaired loans, net of ALLL
Goodwill
Total assets measured at fair value on a non-recurring basis
Significant Other Observable Inputs (Level 2) [Member]
Major class of assets with a recorded change re-measuring at fair value on a non-recurring basis
Other real estate owned
Collateral-dependent impaired loans, net of ALLL
Goodwill
Total assets measured at fair value on a non-recurring basis
Significant Unobservable Inputs (Level 3) [Member]
Major class of assets with a recorded change re-measuring at fair value on a non-recurring basis
Other real estate owned	25,026	38,076
Collateral-dependent impaired loans, net of ALLL	37,159	55,339
Goodwill		24,718
Total assets measured at fair value on a non-recurring basis	$ 62,185	$ 118,133

XML

Fair Value of Assets and Liabilities (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	$ 3,404,282	$ 3,126,743
Total liabilities measured at fair value on a recurring basis	14,845	8,906
Interest rate swap agreements [Member]
Fair value measurement of assets and liabilities measured at fair value
Total liabilities measured at fair value on a recurring basis	14,845	8,906
U.S. government and federal agency [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	205	208
U.S. government sponsored enterprises [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	25,488	31,155
State and local governments [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	1,193,080	1,064,655
Corporate bonds [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	159,926	62,237
Collateralized debt obligations [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	2,734	5,366
Residential mortgage-backed securities [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	2,022,849	1,963,122
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Total liabilities measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Interest rate swap agreements [Member]
Fair value measurement of assets and liabilities measured at fair value
Total liabilities measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. government and federal agency [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | U.S. government sponsored enterprises [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | State and local governments [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate bonds [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Collateralized debt obligations [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Residential mortgage-backed securities [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Significant Other Observable Inputs (Level 2) [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	3,404,282	3,126,743
Total liabilities measured at fair value on a recurring basis	14,845	8,906
Significant Other Observable Inputs (Level 2) [Member] | Interest rate swap agreements [Member]
Fair value measurement of assets and liabilities measured at fair value
Total liabilities measured at fair value on a recurring basis	14,845	8,906
Significant Other Observable Inputs (Level 2) [Member] | U.S. government and federal agency [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	205	208
Significant Other Observable Inputs (Level 2) [Member] | U.S. government sponsored enterprises [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	25,488	31,155
Significant Other Observable Inputs (Level 2) [Member] | State and local governments [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	1,193,080	1,064,655
Significant Other Observable Inputs (Level 2) [Member] | Corporate bonds [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	159,926	62,237
Significant Other Observable Inputs (Level 2) [Member] | Collateralized debt obligations [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	2,734	5,366
Significant Other Observable Inputs (Level 2) [Member] | Residential mortgage-backed securities [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis	2,022,849	1,963,122
Significant Unobservable Inputs (Level 3) [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Total liabilities measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | Interest rate swap agreements [Member]
Fair value measurement of assets and liabilities measured at fair value
Total liabilities measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | U.S. government and federal agency [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | U.S. government sponsored enterprises [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | State and local governments [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | Corporate bonds [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | Collateralized debt obligations [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis
Significant Unobservable Inputs (Level 3) [Member] | Residential mortgage-backed securities [Member]
Fair value measurement of assets and liabilities measured at fair value
Total assets measured at fair value on a recurring basis

XML

Loans Receivable, Net (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Allowance for loan and lease losses
Individually evaluated for impairment	$ (19,208)		$ 18,828
Collectively evaluated for impairment	118,251		118,688
Total allowances for loan and lease losses	137,459	136,586	137,516	139,795	140,829	137,107
Loans receivable
Individually evaluated for impairment	237,899		258,659
Collectively evaluated for impairment	3,207,297		3,207,476
Total loans receivable	3,445,196		3,466,135
Residential Real Estate [Member]
Allowance for loan and lease losses
Individually evaluated for impairment	3,938		2,659
Collectively evaluated for impairment	14,201		14,568
Total allowances for loan and lease losses	18,139	19,003	17,227	17,412	17,004	20,957
Loans receivable
Individually evaluated for impairment	33,617		24,453
Collectively evaluated for impairment	491,934		492,354
Total loans receivable	525,551		516,807
Commercial Real Estate [Member]
Allowance for loan and lease losses
Individually evaluated for impairment	9,337		9,756
Collectively evaluated for impairment	69,761		67,164
Total allowances for loan and lease losses	79,098	73,240	76,920	79,885	80,098	76,147
Loans receivable
Individually evaluated for impairment	144,506		162,959
Collectively evaluated for impairment	1,507,184		1,509,100
Total loans receivable	1,651,690		1,672,059
Other Commercial [Member]
Allowance for loan and lease losses
Individually evaluated for impairment	3,408		4,233
Collectively evaluated for impairment	17,162		16,600
Total allowances for loan and lease losses	20,570	22,444	20,833	19,615	20,960	19,932
Loans receivable
Individually evaluated for impairment	38,702		49,962
Collectively evaluated for impairment	603,484		573,906
Total loans receivable	642,186		623,868
Home Equity [Member]
Allowance for loan and lease losses
Individually evaluated for impairment	690		584
Collectively evaluated for impairment	10,214		13,032
Total allowances for loan and lease losses	10,904	13,364	13,616	13,625	14,206	13,334
Loans receivable
Individually evaluated for impairment	13,501		14,750
Collectively evaluated for impairment	408,748		425,819
Total loans receivable	422,249		440,569
Other Consumer [Member]
Allowance for loan and lease losses
Individually evaluated for impairment	1,835		1,596
Collectively evaluated for impairment	6,913		7,324
Total allowances for loan and lease losses	8,748	8,535	8,920	9,258	8,561	6,737
Loans receivable
Individually evaluated for impairment	7,573		6,535
Collectively evaluated for impairment	195,947		206,297
Total loans receivable	$ 203,520		$ 212,832

XML

Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value of Assets and Liabilities [Abstract]

Fair value measurement of assets and liabilities measured at fair value on a recurring basis

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	205		—		205		—
U.S. government sponsored enterprises		25,488		—		25,488		—
State and local governments		1,193,080		—		1,193,080		—
Corporate bonds		159,926		—		159,926		—
Collateralized debt obligations		2,734		—		2,734		—
Residential mortgage-backed securities		2,022,849		—		2,022,849		—
Total assets measured at fair value on a recurring basis	$	3,404,282		—		3,404,282		—
Interest rate swaps	$	14,845		—		14,845		—
Total liabilities measured at fair value on a recurring basis	$	14,845		—		14,845		—

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	208		—		208		—
U.S. government sponsored enterprises		31,155		—		31,155		—
State and local governments		1,064,655		—		1,064,655		—
Corporate bonds		62,237		—		62,237		—
Collateralized debt obligations		5,366		—		5,366		—
Residential mortgage-backed securities		1,963,122		—		1,963,122		—
Total assets measured at fair value on a recurring basis	$	3,126,743		—		3,126,743		—
Interest rate swaps	$	8,906		—		8,906		—
Total liabilities measured at fair value on a recurring basis	$	8,906		—		8,906		—

Reconciliation of opening and closing balances for assets measured at fair value on recurring basis using significant unobservable inputs (Level 3)

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
				Investment Securities
(Dollars in thousands)	Total			Collateralized Debt Obligations			Residential Mortgage-backed Securities
Balance as of December 31, 2010	$	6,751			6,595			156
Total unrealized gains for the period included in other comprehensive income		1,641			1,598			43
Amortization, accretion and principal payments		(2,240	)		(2,240	)		—
Balance as of June 30, 2011	$	6,152			5,953			199

Fair value measurement of assets measured at fair value on a non-recurring basis

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	25,026		—		—		25,026
Collateral-dependent impaired loans, net of ALLL		37,159		—		—		37,159
Total assets measured at fair value on a non-recurring basis	$	62,185		—		—		62,185

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	38,076		—		—		38,076
Collateral-dependent impaired loans, net of ALLL		55,339		—		—		55,339
Goodwill		24,718		—		—		24,718
Total assets measured at fair value on a non-recurring basis	$	118,133		—		—		118,133

Carrying amounts and estimated fair values of financial instruments

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	140,419		140,419		—		—
Investment securities, available-for-sale		3,404,282		—		3,404,282		—
Loans held for sale		88,442		88,442		—		—
Loans receivable, net of ALLL		3,307,737		—		3,175,795		218,691
Accrued interest receivable		37,108		37,108		—		—
Non-marketable equity securities		50,371		—		50,371		—
Total financial assets	$	7,028,359		265,969		6,630,448		218,691
Financial liabilities
Deposits	$	4,982,269		3,300,960		1,689,452		—
FHLB advances		906,029		—		937,226		—
Repurchase agreements and other borrowed funds		476,757		—		476,757		—
Subordinated debentures		125,347		—		—		66,168
Accrued interest payable		5,076		5,076		—		—
Interest rate swaps		14,845		—		14,845		—
Total financial liabilities	$	6,510,323		3,306,036		3,118,280		66,168

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	128,032		128,032		—		—
Investment securities, available-for-sale		3,126,743		—		3,126,743		—
Loans held for sale		95,457		95,457		—		—
Loans receivable, net of ALLL		3,328,619		—		3,146,502		239,831
Accrued interest receivable		34,961		34,961		—		—
Non-marketable equity securities		49,694		—		49,694		—
Total financial assets	$	6,763,506		258,450		6,322,939		239,831
Financial liabilities
Deposits	$	4,821,213		3,132,261		1,698,382		—
FHLB advances		1,069,046		—		1,099,699		—
Repurchase agreements and other borrowed funds		268,638		—		268,642		—
Subordinated debentures		125,275		—		—		65,903
Accrued interest payable		5,825		5,825		—		—
Interest rate swaps		8,906		—		8,906		—
Total financial liabilities	$	6,298,903		3,138,086		3,075,629		65,903

XML

Fair Value of Assets and Liabilities (Details Textual)	Apr. 30, 2012 Subsidiary
Fair Value of Assets and Liabilities (Textual) [Abstract]
Number of bank subsidiaries prior to combination of bank subsidiaries	11
Number of bank subsidiaries subsequent to combination of bank subsidiaries	1

XML

Derivatives and Hedging Activities (Details 1) (Interest Rate Swap [Member], Other Liabilities [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Interest Rate Swap [Member] | Other Liabilities [Member]
Fair value of interest rate derivative financial instruments
Fair Value	$ 14,845	$ 8,906

XML

Loans Receivable, Net (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Financing Receivable, Modifications [Line Items]
Percentage of TDRs resulting of a combination of interest rate reduction, extension of maturity date, or reduction in face amount	19.00%
Percentage of TDRs resulting from payment deferral or change to interest	19.00%
Loans Receivable, Net (Textual) [Abstract]
Percentage of TDRs resulting from extensions of maturity date	31.00%
Troubled debt restructurings, pre-modification loan balances, for which OREO was received	$ 24,390,000
Net deferred fees, costs, premiums, and discounts included in loans receivable	$ 2,104,000	$ 3,123,000
Commercial Real Estate [Member]
Financing Receivable, Modifications [Line Items]
Percentage of TDRs resulting of a combination of interest rate reduction, extension of maturity date, or reduction in face amount	24.00%
Percentage of TDRs resulting from payment deferral or change to interest	32.00%

XML

Fair Value of Assets and Liabilities (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Reconciliation of opening and closing balances for assets measured at fair value on recurring basis
Balance as of December 31, 2010	$ 6,751
Total unrealized gains for the period included in other comprehensive income	1,641
Amortization, accretion and principal payments	(2,240)
Balance as of June 30, 2011	6,152
Collateralized debt obligations [Member]
Reconciliation of opening and closing balances for assets measured at fair value on recurring basis
Balance as of December 31, 2010	6,595
Total unrealized gains for the period included in other comprehensive income	1,598
Amortization, accretion and principal payments	(2,240)
Balance as of June 30, 2011	5,953
Residential mortgage-backed securities [Member]
Reconciliation of opening and closing balances for assets measured at fair value on recurring basis
Balance as of December 31, 2010	156
Total unrealized gains for the period included in other comprehensive income	43
Balance as of June 30, 2011	$ 199

XML

Nature of Operations and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Nature of Operations and Summary of Significant Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

1) Nature of Operations and Summary of Significant Accounting Policies

General

Glacier Bancorp, Inc. (the “Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individual and corporate customers in Montana, Idaho, Wyoming, Colorado, Utah and Washington through eleven divisions of its wholly-owned bank subsidiary, Glacier Bank (the “Bank”). The Company is subject to competition from other financial service providers. The Company is also subject to the regulations of certain government agencies and undergoes periodic examinations by those regulatory authorities.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of June 30, 2012, the results of operations and comprehensive income for the three and six month periods ended June 30, 2012 and 2011, and changes in stockholders’ equity and cash flows for the six month periods ended June 30, 2012 and 2011. The condensed consolidated statement of financial condition of the Company as of December 31, 2011 has been derived from the audited consolidated statements of the Company as of that date.

The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results anticipated for the year ending December 31, 2012.

Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”), 2) the valuations related to investments and real estate acquired in connection with foreclosures or in satisfaction of loans, and 3) the evaluation of goodwill impairment. In connection with the determination of the ALLL and other real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investments are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on independent party valuations and internal calculations using significant independent party inputs.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the parent holding company and the Bank. All significant inter-company transactions have been eliminated in consolidation.

The Company formed GBCI Other Real Estate (“GORE”) to isolate certain bank foreclosed properties for legal protection and administrative purposes and the remaining properties are currently held for sale. GORE is included in the Bank operating segment due to its insignificant activity.

The Company owns the following trust subsidiaries for the purpose of issuing trust preferred securities: Glacier Capital Trust II, Glacier Capital Trust III, Glacier Capital Trust IV, Citizens (ID) Statutory Trust I, Bank of the San Juans Bancorporation Trust I, First Company Statutory Trust 2001 and First Company Statutory Trust 2003. The trust subsidiaries are not consolidated into the Company’s financial statements.

On April 30, 2012, the Company combined its eleven bank subsidiaries into eleven bank divisions within Glacier Bank, such divisions operating with the same names and management teams as before the combination. Prior to the combination of the bank subsidiaries, the Company considered its eleven bank subsidiaries, GORE, and the parent holding company to be its operating segments. Subsequent to the combination of the bank subsidiaries, the Company considers the Bank to be its sole operating segment. The change to combining the bank subsidiaries into a single segment is appropriate as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses, 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank, and 3) financial information is available for the Bank.

Variable Interest Entities

The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). The Company also has equity investments in Low-Income Housing Tax Credit (“LIHTC”) partnerships. The CDEs and the LIHTC partnerships are variable interest entities (“VIE”).

The following table summarizes the carrying amounts of the VIE’s assets and liabilities included in the Company’s consolidated financial statements at June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
(Dollars in thousands)	CDE (NMTC)		LIHTC		CDE (NMTC)		LIHTC
Assets
Loans receivable	$	35,443		—		32,748		—
Premises and equipment, net		—		15,700		—		15,996
Accrued interest receivable		112		—		116		—
Other assets		1,233		66		1,439		31
Total assets	$	36,788		15,766		34,303		16,027
Liabilities
Other borrowed funds	$	4,629		3,306		4,629		3,306
Accrued interest payable		3		6		4		9
Other liabilities		92		193		186		363
Total liabilities	$	4,724		3,505		4,819		3,678

Amounts presented in the table above are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.

Impact of Recent Authoritative Accounting Guidance

The Accounting Standards Codification ^TM (“ASC”) is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative.

In September 2011, FASB amended FASB ASC Topic 350, Intangibles - Goodwill and Other. The amendment provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If the entity concludes it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The amendment is effective prospectively during interim and annual periods beginning after December 15, 2011 and early adoption is permitted. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

In June 2011, FASB amended FASB ASC Topic 220, Comprehensive Income. The amendment provides an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. Accounting Standards Update No. 2011-12, Comprehensive Income (Topic 220) defers the specific requirement of the amendment to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments are effective retrospectively during interim and annual periods beginning after December 15, 2011. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

In May 2011, FASB amended FASB ASC Topic 820, Fair Value Measurement. The amendment achieves common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The amendment changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendment is effective prospectively during interim and annual periods beginning after December 15, 2011. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

XML

Derivatives and Hedging Activities (Details Textual) (USD $)	Jun. 30, 2012
Derivatives and Hedging Activities (Textual) [Abstract]
Investment securities pledged to counterparties as collateral	$ 22,087,000
Collateral pledged from the counterparties to the Company	$ 0

XML

Investment Securities, Available-for-Sale (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Gain or loss on sale of investments
Gross proceeds	$ 0	$ 4,074	$ 0	$ 8,208
Less amortized cost	0	(4,665)	0	(8,675)
Gross gain on sale of investments	0	39	0	223
Gross loss on sale of investments	0	(630)	0	(690)
Net loss on sale of investments	$ 0	$ (591)	$ 0	$ (467)

XML

Investment Securities, Available-for-Sale (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Total investment securities, weighted yield	2.61%	2.64%
Total investment securities, amortized cost	$ 3,317,337	$ 3,063,032
Total investment securities, gross unrealized gains	93,977	73,018
Total investment securities, gross unrealized losses	(7,032)	(9,307)
Total investment securities, fair value	3,404,282	3,126,743
U.S. government and federal agency [Member]
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Maturing after one year through five years, weighted yield	1.62%	1.62%
Maturing after one year through five years, amortized cost	202	204
Maturing after one year through five years, gross unrealized gains	3	4
Maturing after one year through five years, fair value	205	208
U.S. government sponsored enterprises [Member]
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Maturing within one year, weighted yield	2.37%	1.58%
Maturing after one year through five years, weighted yield	2.34%	2.36%
Maturing after five years through ten years, weighted yield	1.90%	1.90%
Total investment securities, weighted yield	2.34%	2.26%
Maturing within one year, amortized cost	3,218	3,979
Maturing after one year through five years, amortized cost	21,727	26,399
Maturing after five years through ten years, amortized cost	73	78
Total investment securities, amortized cost	25,018	30,456
Maturing within one year, gross unrealized gains	12	17
Maturing after one year through five years, gross unrealized gains	458	682
Total investment securities, gross unrealized gains	470	699
Maturing within one year, fair value	3,230	3,996
Maturing after one year through five years, fair value	22,185	27,081
Maturing after five years through ten years, fair value	73	78
Total investment securities, fair value	25,488	31,155
State and local governments [Member]
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Maturing within one year, weighted yield	0.99%	1.31%
Maturing after one year through five years, weighted yield	2.14%	2.22%
Maturing after five years through ten years, weighted yield	2.64%	2.59%
Maturing after ten years, weighted yield	4.78%	4.84%
Total investment securities, weighted yield	4.22%	4.44%
Maturing within one year, amortized cost	45,759	4,786
Maturing after one year through five years, amortized cost	127,290	89,752
Maturing after five years through ten years, amortized cost	52,835	63,143
Maturing after ten years, amortized cost	886,899	845,657
Total investment securities, amortized cost	1,112,783	1,003,338
Maturing within one year, gross unrealized gains	11	3
Maturing after one year through five years, gross unrealized gains	3,788	2,660
Maturing after five years through ten years, gross unrealized gains	1,699	2,094
Maturing after ten years, gross unrealized gains	75,645	57,138
Total investment securities, gross unrealized gains	81,143	61,895
Maturing within one year, gross unrealized losses	(5)	(2)
Maturing after one year through five years, gross unrealized losses	(121)	(22)
Maturing after five years through ten years, gross unrealized losses	(38)	(19)
Maturing after ten years, gross unrealized losses	(682)	(535)
Total investment securities, gross unrealized losses	(846)	(578)
Maturing within one year, fair value	45,765	4,787
Maturing after one year through five years, fair value	130,957	92,390
Maturing after five years through ten years, fair value	54,496	65,218
Maturing after ten years, fair value	961,862	902,260
Total investment securities, fair value	1,193,080	1,064,655
Corporate bonds [Member]
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Maturing within one year, weighted yield	1.39%
Maturing after one year through five years, weighted yield	2.41%	2.55%
Maturing after five years through ten years, weighted yield	2.30%	2.38%
Total investment securities, weighted yield	2.27%	2.54%
Maturing within one year, amortized cost	19,457
Maturing after one year through five years, amortized cost	121,697	60,810
Maturing after five years through ten years, amortized cost	18,197	2,409
Total investment securities, amortized cost	159,351	63,219
Maturing within one year, gross unrealized gains	27
Maturing after one year through five years, gross unrealized gains	810	261
Maturing after five years through ten years, gross unrealized gains	166	21
Total investment securities, gross unrealized gains	1,003	282
Maturing within one year, gross unrealized losses	(4)
Maturing after one year through five years, gross unrealized losses	(351)	(1,264)
Maturing after five years through ten years, gross unrealized losses	(73)
Total investment securities, gross unrealized losses	(428)	(1,264)
Maturing within one year, fair value	19,480
Maturing after one year through five years, fair value	122,156	59,807
Maturing after five years through ten years, fair value	18,290	2,430
Total investment securities, fair value	159,926	62,237
Collateralized debt obligations [Member]
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Maturing after ten years, weighted yield	8.03%	8.03%
Maturing after ten years, amortized cost	2,848	5,648
Maturing after ten years, gross unrealized losses	(114)	(282)
Maturing after ten years, fair value	2,734	5,366
Residential mortgage-backed securities [Member]
Comparison of amortized cost and estimated fair value of investment securities, available-for-sale
Total investment securities, weighted yield	1.75%	1.70%
Total investment securities, amortized cost	2,017,135	1,960,167
Total investment securities, gross unrealized gains	11,358	10,138
Total investment securities, gross unrealized losses	(5,644)	(7,183)
Total investment securities, fair value	$ 2,022,849	$ 1,963,122

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Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Components of accumulated other comprehensive income, included in stockholders' equity:
Unrealized holding gains on available-for-sale securities	$ 86,945	$ 63,711
Tax effect	(33,822)	(24,783)
Net of tax amount	53,123	38,928
Change in fair value of derivatives used for cash flow hedges	(14,845)	(8,906)
Tax effect	5,775	3,465
Net of tax amount	(9,070)	(5,441)
Total accumulated other comprehensive income	$ 44,053	$ 33,487

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Investment Securities, Available-for-Sale (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value
Fair Value, Less than 12 Months	$ 984,603	$ 1,001,588
Fair Value, 12 Months or More	90,619	23,558
Fair Value, Total	1,075,222	1,025,146
Unrealized Loss
Unrealized Loss, Less than 12 Months	(5,372)	(8,204)
Unrealized Loss, 12 Months or More	(1,660)	(1,103)
Unrealized Loss, Total	(7,032)	(9,307)
State and local governments [Member]
Fair Value
Fair Value, Less than 12 Months	77,764	26,434
Fair Value, 12 Months or More	7,624	9,948
Fair Value, Total	85,388	36,382
Unrealized Loss
Unrealized Loss, Less than 12 Months	(667)	(90)
Unrealized Loss, 12 Months or More	(179)	(488)
Unrealized Loss, Total	(846)	(578)
Corporate bonds [Member]
Fair Value
Fair Value, Less than 12 Months	52,812	31,782
Fair Value, 12 Months or More	5,383
Fair Value, Total	58,195	31,782
Unrealized Loss
Unrealized Loss, Less than 12 Months	(396)	(1,264)
Unrealized Loss, 12 Months or More	(32)
Unrealized Loss, Total	(428)	(1,264)
Collateralized debt obligations [Member]
Fair Value
Fair Value, 12 Months or More	2,734	5,366
Fair Value, Total	2,734	5,366
Unrealized Loss
Unrealized Loss, 12 Months or More	(114)	(282)
Unrealized Loss, Total	(114)	(282)
Residential mortgage-backed securities [Member]
Fair Value
Fair Value, Less than 12 Months	854,027	943,372
Fair Value, 12 Months or More	74,878	8,244
Fair Value, Total	928,905	951,616
Unrealized Loss
Unrealized Loss, Less than 12 Months	(4,309)	(6,850)
Unrealized Loss, 12 Months or More	(1,335)	(333)
Unrealized Loss, Total	$ (5,644)	$ (7,183)

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Investment Securities, Available-for-Sale (Details Textual) (Residential mortgage-backed securities [Member], USD $)	Jun. 30, 2012	Dec. 31, 2011
Residential mortgage-backed securities [Member]
Investment Securities, Available-for-Sale (Textual) [Abstract]
Non-guaranteed private label whole loan mortgage-backed securities	$ 53,145,000	$ 49,252,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating Activities
Net cash provided by operating activities	$ 133,697	$ 135,267
Investing Activities
Proceeds from sales, maturities and prepayments of investment securities, available-for-sale	871,472	429,256
Purchase of investment securities, available-for-sale	(1,154,990)	(796,155)
Principal collected on loans	441,318	459,488
Loans originated or acquired	(478,541)	(397,174)
Net addition of premises and equipment and other real estate owned	(5,501)	(7,337)
Proceeds from sale of other real estate owned	18,073	17,443
Net (sale) purchase of non-marketable equity securities	(671)	14,278
Net cash used in investment activities	(308,840)	(280,201)
Financing Activities
Net increase in deposits	161,056	182,897
Net increase in securities sold under agreements to repurchase	208,141	1,900
Net decrease in Federal Home Loan Bank advances	(163,017)	(40,080)
Net increase in federal funds purchased and other borrowed funds	50	42,865
Cash dividends paid	(18,700)	(18,698)
Net cash provided by financing activities	187,530	168,884
Net increase in cash and cash equivalents	12,387	23,950
Cash and cash equivalents at beginning of period	128,032	105,091
Cash and cash equivalents at end of period	140,419	129,041
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	19,391	23,985
Cash paid during the period for income taxes	8,221	3,681
Sale and refinancing of other real estate owned	668	2,521
Other real estate acquired in settlement of loans	$ 16,372	$ 49,570

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Loans Receivable, Net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Allowance for loan and lease losses
Balance at beginning of period	$ 136,586	$ 140,829	$ 137,516	$ 137,107
Provision for loan losses	7,925	19,150	16,550	38,650
Charge offs	(8,679)	(21,814)	(19,737)	(38,318)
Recoveries	1,627	1,630	3,130	2,356
Balance at end of period	137,459	139,795	137,459	139,795
Residential Real Estate [Member]
Allowance for loan and lease losses
Balance at beginning of period	19,003	17,004	17,227	20,957
Provision for loan losses	22	1,557	2,085	(703)
Charge offs	(953)	(1,388)	(1,320)	(3,157)
Recoveries	67	239	147	315
Balance at end of period	18,139	17,412	18,139	17,412
Commercial Real Estate [Member]
Allowance for loan and lease losses
Balance at beginning of period	73,240	80,098	76,920	76,147
Provision for loan losses	10,374	9,430	13,010	23,697
Charge offs	(5,549)	(10,691)	(12,534)	(21,319)
Recoveries	1,033	1,048	1,702	1,360
Balance at end of period	79,098	79,885	79,098	79,885
Other Commercial [Member]
Allowance for loan and lease losses
Balance at beginning of period	22,444	20,960	20,833	19,932
Provision for loan losses	(1,255)	3,969	1,304	6,607
Charge offs	(887)	(5,413)	(2,356)	(7,166)
Recoveries	268	99	789	242
Balance at end of period	20,570	19,615	20,570	19,615
Home Equity [Member]
Allowance for loan and lease losses
Balance at beginning of period	13,364	14,206	13,616	13,334
Provision for loan losses	(1,471)	294	(470)	2,415
Charge offs	(1,077)	(971)	(2,358)	(2,303)
Recoveries	88	96	116	179
Balance at end of period	10,904	13,625	10,904	13,625
Other Consumer [Member]
Allowance for loan and lease losses
Balance at beginning of period	8,535	8,561	8,920	6,737
Provision for loan losses	255	3,900	621	6,634
Charge offs	(213)	(3,351)	(1,169)	(4,373)
Recoveries	171	148	376	260
Balance at end of period	$ 8,748	$ 9,258	$ 8,748	$ 9,258

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Goodwill (Details Textual)	Apr. 30, 2012 Commercial_Bank Subsidiary
Goodwill (Textual) [Abstract]
Number of bank subsidiaries prior to combination of bank subsidiaries	11
Number of bank subsidiaries subsequent to combination of bank subsidiaries	1
Number of bank reporting units prior to combination of bank subsidiaries	11

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Condensed Consolidated Statements of Financial Condition (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Assets
Cash on hand and in banks	$ 92,119	$ 104,674
Interest bearing cash deposits	48,300	23,358
Cash and cash equivalents	140,419	128,032
Investment securities, available-for-sale	3,404,282	3,126,743
Loans held for sale	88,442	95,457
Loans receivable	3,445,196	3,466,135
Allowance for loan and lease losses	(137,459)	(137,516)
Loans receivable, net	3,307,737	3,328,619
Premises and equipment, net	159,432	158,872
Other real estate owned	69,170	78,354
Accrued interest receivable	37,108	34,961
Deferred tax asset	22,892	31,081
Core deposit intangible, net	7,197	8,284
Goodwill	106,100	106,100
Non-marketable equity securities	50,371	49,694
Other assets	40,952	41,709
Total assets	7,434,102	7,187,906
Liabilities
Non-interest bearing deposits	1,066,662	1,010,899
Interest bearing deposits	3,915,607	3,810,314
Securities sold under agreements to repurchase	466,784	258,643
Federal Home Loan Bank advances	906,029	1,069,046
Other borrowed funds	9,973	9,995
Subordinated debentures	125,347	125,275
Accrued interest payable	5,076	5,825
Other liabilities	62,443	47,682
Total liabilities	6,557,921	6,337,679
Stockholders' Equity
Preferred shares, $0.01 par value per share, 1,000,000 shares authorized, none issued or outstanding
Common stock, $0.01 par value per share, 117,187,500 shares authorized	719	719
Paid-in capital	641,656	642,882
Retained earnings - substantially restricted	189,753	173,139
Accumulated other comprehensive income	44,053	33,487
Total stockholders' equity	876,181	850,227
Total liabilities and stockholders' equity	$ 7,434,102	$ 7,187,906
Number of common stock shares issued and outstanding	71,931,386	71,915,073

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basic and diluted earnings per share computation
Net income available to common stockholders, basic and diluted	$ 18,981	$ 11,886	$ 35,314	$ 22,171
Average outstanding shares - basic	71,928,697	71,915,073	71,921,885	71,915,073
Add: dilutive stock options and awards	156		105
Average outstanding shares - diluted	71,928,853	71,915,073	71,921,990	71,915,073
Basic earnings per share	$ 0.26	$ 0.17	$ 0.49	$ 0.31
Diluted earnings per share	$ 0.26	$ 0.17	$ 0.49	$ 0.31
Earnings Per Share (Textual) [Abstract]
Options excluded from the diluted average outstanding share calculation			945,063	1,641,528

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (USD $) In Thousands, except Share data	Total	Common Stock	Paid-in Capital	Retained Earnings Substantially Restricted	Accumulated Other Comprehensive Income
Balance at Dec. 31, 2010	$ 838,204	$ 719	$ 643,894	$ 193,063	$ 528
Balance, shares at Dec. 31, 2010		71,915,073
Comprehensive income	46,282			22,171	24,111
Cash dividends declared ($0.26 per share)	(18,698)			(18,698)
Stock-based compensation and related taxes	(1,016)		(1,016)
Balance at Jun. 30, 2011	864,772	719	642,878	196,536	24,639
Balance, shares at Jun. 30, 2011		71,915,073
Balance at Dec. 31, 2011	850,227	719	642,882	173,139	33,487
Balance, shares at Dec. 31, 2011	71,915,073	71,915,073
Comprehensive income	45,880			35,314	10,566
Cash dividends declared ($0.26 per share)	(18,700)			(18,700)
Stock issuances under stock incentive plans, Shares		16,313
Stock issuances under stock incentive plans, Value	233		233
Stock-based compensation and related taxes	(1,459)		(1,459)
Balance at Jun. 30, 2012	$ 876,181	$ 719	$ 641,656	$ 189,753	$ 44,053
Balance, shares at Jun. 30, 2012	71,931,386	71,931,386

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Loans Receivable, Net (Details 3) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Loan portfolio aging analysis
Accruing loans 30-59 days past due	$ 37,893	$ 31,386
Accruing loans 60-89 days past due	10,814	17,700
Accruing loans 90 days or more past due	3,267	1,413
Non-accrual loans	126,463	133,689
Total past due and non-accrual loans	178,437	184,188
Current loans receivable	3,266,759	3,281,947
Total loans receivable	3,445,196	3,466,135
Residential Real Estate [Member]
Loan portfolio aging analysis
Accruing loans 30-59 days past due	990	9,038
Accruing loans 60-89 days past due	5,175	2,678
Accruing loans 90 days or more past due	421	59
Non-accrual loans	19,835	11,881
Total past due and non-accrual loans	26,421	23,656
Current loans receivable	499,130	493,151
Total loans receivable	525,551	516,807
Commercial Real Estate [Member]
Loan portfolio aging analysis
Accruing loans 30-59 days past due	12,819	12,683
Accruing loans 60-89 days past due	2,822	11,660
Accruing loans 90 days or more past due	1,547	108
Non-accrual loans	77,203	87,956
Total past due and non-accrual loans	94,391	112,407
Current loans receivable	1,557,299	1,559,652
Total loans receivable	1,651,690	1,672,059
Other Commercial [Member]
Loan portfolio aging analysis
Accruing loans 30-59 days past due	20,093	3,279
Accruing loans 60-89 days past due	1,995	1,034
Accruing loans 90 days or more past due	980	1,060
Non-accrual loans	15,490	21,685
Total past due and non-accrual loans	38,558	27,058
Current loans receivable	603,628	596,810
Total loans receivable	642,186	623,868
Home Equity [Member]
Loan portfolio aging analysis
Accruing loans 30-59 days past due	2,690	4,092
Accruing loans 60-89 days past due	472	1,276
Accruing loans 90 days or more past due	145	156
Non-accrual loans	10,156	10,272
Total past due and non-accrual loans	13,463	15,796
Current loans receivable	408,786	424,773
Total loans receivable	422,249	440,569
Other Consumer [Member]
Loan portfolio aging analysis
Accruing loans 30-59 days past due	1,301	2,294
Accruing loans 60-89 days past due	350	1,052
Accruing loans 90 days or more past due	174	30
Non-accrual loans	3,779	1,895
Total past due and non-accrual loans	5,604	5,271
Current loans receivable	197,916	207,561
Total loans receivable	$ 203,520	$ 212,832

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Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2012

Derivatives and Hedging Activities [Abstract]

Summary of interest rate derivative financial instruments

(Dollars in thousands)	Forecasted Notional Amount		Variable Interest Rate  1	Fixed Interest Rate  1			Term
Interest rate swap	$	160,000	3 month LIBOR		3.378	%	Oct. 21, 2014 - Oct. 21, 2021 2
Interest rate swap		100,000	3 month LIBOR		2.498	%	Nov 30, 2015 - Nov. 30, 2022  2

¹  The Company pays the fixed interest rate and the counterparties pay the Company the variable interest rate.

²  No cash will be exchanged prior to the term.

Fair value of interest rate derivative financial instruments

		Fair Value
(Dollars in thousands)	Balance Sheet Location	June 30, 2012		December 31, 2011
Interest rate swap	Other liabilities	$	14,845		8,906

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Loans Receivable, Net (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012 Loan	Jun. 30, 2012 Loan
Summary of troubled debt restructurings
Troubled debt restructurings, number of loans	47	103
Troubled debt restructurings, pre-modification outstanding balances	$ 11,929	$ 28,455
Troubled debt restructurings, post-modification outstanding balances	10,650	26,469
Troubled debt restructurings that subsequently defaulted, number of loans	9	20
Troubled debt restructurings that subsequently defaulted, recorded balance	3,127	6,207
Residential Real Estate [Member]
Summary of troubled debt restructurings
Troubled debt restructurings, number of loans	5	8
Troubled debt restructurings, pre-modification outstanding balances	1,342	1,701
Troubled debt restructurings, post-modification outstanding balances	1,342	1,701
Commercial Real Estate [Member]
Summary of troubled debt restructurings
Troubled debt restructurings, number of loans	15	40
Troubled debt restructurings, pre-modification outstanding balances	5,736	16,846
Troubled debt restructurings, post-modification outstanding balances	4,444	14,838
Troubled debt restructurings that subsequently defaulted, number of loans	4	11
Troubled debt restructurings that subsequently defaulted, recorded balance	2,077	4,735
Other Commercial [Member]
Summary of troubled debt restructurings
Troubled debt restructurings, number of loans	22	41
Troubled debt restructurings, pre-modification outstanding balances	4,309	8,432
Troubled debt restructurings, post-modification outstanding balances	4,322	8,454
Troubled debt restructurings that subsequently defaulted, number of loans	2	5
Troubled debt restructurings that subsequently defaulted, recorded balance	531	798
Home Equity [Member]
Summary of troubled debt restructurings
Troubled debt restructurings, number of loans	1	7
Troubled debt restructurings, pre-modification outstanding balances	310	1,095
Troubled debt restructurings, post-modification outstanding balances	310	1,095
Troubled debt restructurings that subsequently defaulted, number of loans	1	2
Troubled debt restructurings that subsequently defaulted, recorded balance	442	597
Other Consumer [Member]
Summary of troubled debt restructurings
Troubled debt restructurings, number of loans	4	7
Troubled debt restructurings, pre-modification outstanding balances	232	381
Troubled debt restructurings, post-modification outstanding balances	232	381
Troubled debt restructurings that subsequently defaulted, number of loans	2	2
Troubled debt restructurings that subsequently defaulted, recorded balance	$ 77	$ 77

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Basic and diluted earnings per share

	Three Months ended June 30,				Six Months ended June 30,
(Dollars in thousands, except per share data)	2012		2011		2012		2011
Net income available to common stockholders, basic and diluted	$	18,981		11,886		35,314		22,171
Average outstanding shares - basic		71,928,697		71,915,073		71,921,885		71,915,073
Add: dilutive stock options and awards		156		—		105		—
Average outstanding shares - diluted		71,928,853		71,915,073		71,921,990		71,915,073
Basic earnings per share	$	0.26		0.17		0.49		0.31
Diluted earnings per share	$	0.26		0.17		0.49		0.31

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash dividends declared per share	$ 0.26	$ 0.26
Retained Earnings Substantially Restricted
Cash dividends declared per share	$ 0.26	$ 0.26

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Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Statements of Financial Condition [Abstract]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized	1,000,000	1,000,000
Preferred shares, issued
Preferred shares, outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	117,187,500	117,187,500

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Nature of Operations and Summary of Significant Accounting Policies [Abstract]

General

General

Glacier Bancorp, Inc. (the “Company”) is a Montana corporation headquartered in Kalispell, Montana. The Company provides a full range of banking services to individual and corporate customers in Montana, Idaho, Wyoming, Colorado, Utah and Washington through eleven divisions of its wholly-owned bank subsidiary, Glacier Bank (the “Bank”). The Company is subject to competition from other financial service providers. The Company is also subject to the regulations of certain government agencies and undergoes periodic examinations by those regulatory authorities.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the Company’s financial condition as of June 30, 2012, the results of operations and comprehensive income for the three and six month periods ended June 30, 2012 and 2011, and changes in stockholders’ equity and cash flows for the six month periods ended June 30, 2012 and 2011. The condensed consolidated statement of financial condition of the Company as of December 31, 2011 has been derived from the audited consolidated statements of the Company as of that date.

The accompanying unaudited condensed consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results anticipated for the year ending December 31, 2012.

Material estimates that are particularly susceptible to significant change include: 1) the determination of the allowance for loan and lease losses (“ALLL” or “allowance”), 2) the valuations related to investments and real estate acquired in connection with foreclosures or in satisfaction of loans, and 3) the evaluation of goodwill impairment. In connection with the determination of the ALLL and other real estate valuation estimates, management obtains independent appraisals (new or updated) for significant items. Estimates relating to investments are obtained from independent third parties. Estimates relating to the evaluation of goodwill for impairment are determined based on independent party valuations and internal calculations using significant independent party inputs.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of the parent holding company and the Bank. All significant inter-company transactions have been eliminated in consolidation.

The Company formed GBCI Other Real Estate (“GORE”) to isolate certain bank foreclosed properties for legal protection and administrative purposes and the remaining properties are currently held for sale. GORE is included in the Bank operating segment due to its insignificant activity.

The Company owns the following trust subsidiaries for the purpose of issuing trust preferred securities: Glacier Capital Trust II, Glacier Capital Trust III, Glacier Capital Trust IV, Citizens (ID) Statutory Trust I, Bank of the San Juans Bancorporation Trust I, First Company Statutory Trust 2001 and First Company Statutory Trust 2003. The trust subsidiaries are not consolidated into the Company’s financial statements.

On April 30, 2012, the Company combined its eleven bank subsidiaries into eleven bank divisions within Glacier Bank, such divisions operating with the same names and management teams as before the combination. Prior to the combination of the bank subsidiaries, the Company considered its eleven bank subsidiaries, GORE, and the parent holding company to be its operating segments. Subsequent to the combination of the bank subsidiaries, the Company considers the Bank to be its sole operating segment. The change to combining the bank subsidiaries into a single segment is appropriate as the Bank 1) engages in similar bank business activity from which it earns revenues and incurs expenses, 2) the operating results of the Bank are regularly reviewed by the Chief Executive Officer (i.e., the chief operating decision maker) who makes decisions about resources to be allocated to the Bank, and 3) financial information is available for the Bank.

Variable Interest Entities

Variable Interest Entities

The Company has equity investments in Certified Development Entities (“CDE”) which have received allocations of New Markets Tax Credits (“NMTC”). The Company also has equity investments in Low-Income Housing Tax Credit (“LIHTC”) partnerships. The CDEs and the LIHTC partnerships are variable interest entities (“VIE”).

The following table summarizes the carrying amounts of the VIE’s assets and liabilities included in the Company’s consolidated financial statements at June 30, 2012 and December 31, 2011:

	June 30, 2012				December 31, 2011
(Dollars in thousands)	CDE (NMTC)		LIHTC		CDE (NMTC)		LIHTC
Assets
Loans receivable	$	35,443		—		32,748		—
Premises and equipment, net		—		15,700		—		15,996
Accrued interest receivable		112		—		116		—
Other assets		1,233		66		1,439		31
Total assets	$	36,788		15,766		34,303		16,027
Liabilities
Other borrowed funds	$	4,629		3,306		4,629		3,306
Accrued interest payable		3		6		4		9
Other liabilities		92		193		186		363
Total liabilities	$	4,724		3,505		4,819		3,678

Amounts presented in the table above are adjusted for intercompany eliminations. All assets presented can be used only to settle obligations of the consolidated VIEs and all liabilities presented consist of liabilities for which creditors and other beneficial interest holders therein have no recourse to the general credit of the Company.

Impact of Recent Authoritative Accounting Guidance

Impact of Recent Authoritative Accounting Guidance

The Accounting Standards Codification ^TM (“ASC”) is the Financial Accounting Standards Board’s (“FASB”) officially recognized source of authoritative GAAP applicable to all public and non-public non-governmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under the authority of the federal securities laws are also sources of authoritative GAAP for the Company as an SEC registrant. All other accounting literature is non-authoritative.

Intangibles, Goodwill and Other

In September 2011, FASB amended FASB ASC Topic 350, Intangibles - Goodwill and Other. The amendment provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If the entity concludes it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The amendment is effective prospectively during interim and annual periods beginning after December 15, 2011 and early adoption is permitted. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

Comprehensive Income

In June 2011, FASB amended FASB ASC Topic 220, Comprehensive Income. The amendment provides an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. Accounting Standards Update No. 2011-12, Comprehensive Income (Topic 220) defers the specific requirement of the amendment to present items that are reclassified from accumulated other comprehensive income to net income separately with their respective components of net income and other comprehensive income. The amendments are effective retrospectively during interim and annual periods beginning after December 15, 2011. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

Fair Value Measurement

In May 2011, FASB amended FASB ASC Topic 820, Fair Value Measurement. The amendment achieves common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The amendment changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendment is effective prospectively during interim and annual periods beginning after December 15, 2011. The Company has evaluated the impact of the adoption of this amendment and determined there was not a material effect on the Company’s financial position or results of operations.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 25, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	GLACIER BANCORP INC
Entity Central Index Key	0000868671
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		71,931,972

XML

Nature of Operations and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Nature of Operations and Summary of Significant Accounting Policies [Abstract]

Summary of the carrying amounts of variable interest entities' assets and liabilities included in consolidated financial statements

	June 30, 2012				December 31, 2011
(Dollars in thousands)	CDE (NMTC)		LIHTC		CDE (NMTC)		LIHTC
Assets
Loans receivable	$	35,443		—		32,748		—
Premises and equipment, net		—		15,700		—		15,996
Accrued interest receivable		112		—		116		—
Other assets		1,233		66		1,439		31
Total assets	$	36,788		15,766		34,303		16,027
Liabilities
Other borrowed funds	$	4,629		3,306		4,629		3,306
Accrued interest payable		3		6		4		9
Other liabilities		92		193		186		363
Total liabilities	$	4,724		3,505		4,819		3,678

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Interest Income
Residential real estate loans	$ 7,495	$ 8,156	$ 15,279	$ 16,872
Commercial loans	30,430	32,977	61,471	66,035
Consumer and other loans	8,813	10,211	17,983	20,661
Investment securities	17,454	20,218	37,343	36,367
Total interest income	64,192	71,562	132,076	139,935
Interest Expense
Deposits	4,609	6,584	9,563	13,672
Securities sold under agreements to repurchase	303	319	602	676
Federal Home Loan Bank advances	3,218	3,093	6,599	5,641
Federal funds purchased and other borrowed funds	61	62	123	95
Subordinated debentures	853	1,273	1,755	2,916
Total interest expense	9,044	11,331	18,642	23,000
Net Interest Income	55,148	60,231	113,434	116,935
Provision for loan losses	7,925	19,150	16,550	38,650
Net interest income after provision for loan losses	47,223	41,081	96,884	78,285
Non-Interest Income
Service charges and other fees	11,291	11,330	21,783	21,538
Miscellaneous loan fees and charges	1,113	928	2,059	1,905
Gain on sale of loans	7,522	4,291	14,335	8,985
Loss on sale of investments	0	(591)	0	(467)
Other income	1,865	1,893	3,952	3,285
Total non-interest income	21,791	17,851	42,129	35,246
Non-Interest Expense
Compensation and employee benefits	23,684	21,170	47,244	42,773
Occupancy and equipment	5,825	5,728	11,793	11,682
Advertising and promotions	1,713	1,635	3,115	3,119
Outsourced data processing	788	791	1,634	1,564
Other real estate owned	2,199	5,062	9,021	7,161
Federal Deposit Insurance Corporation premiums	1,300	2,197	3,012	4,521
Core deposit intangibles amortization	535	590	1,087	1,317
Other expense	10,146	9,047	18,329	16,559
Total non-interest expense	46,190	46,220	95,235	88,696
Income Before Income Taxes	22,824	12,712	43,778	24,835
Federal and state income tax expense	3,843	826	8,464	2,664
Net Income	$ 18,981	$ 11,886	$ 35,314	$ 22,171
Basic earnings per share	$ 0.26	$ 0.17	$ 0.49	$ 0.31
Diluted earnings per share	$ 0.26	$ 0.17	$ 0.49	$ 0.31
Dividends declared per share	$ 0.13	$ 0.13	$ 0.26	$ 0.26
Average outstanding shares - basic	71,928,697	71,915,073	71,921,885	71,915,073
Average outstanding shares - diluted	71,928,853	71,915,073	71,921,990	71,915,073

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Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill [Abstract]

Goodwill

4) Goodwill

The changes in the carrying amount of goodwill and accumulated impairment charge are as follows:

	Three Months ended June 30,				Six Months ended June 30,
(Dollars in thousands)	2012		2011		2012		2011
Net carrying value at beginning of period	$	106,100		146,259		106,100		146,259
Impairment charge		—		—		—		—
Net carrying value at end of period		106,100		146,259		106,100		146,259

(Dollars in thousands)	June 30, 2012			December 31, 2011
Gross carrying value		146,259			146,259
Accumulated impairment charge		(40,159	)		(40,159	)
Net carrying value	$	106,100			106,100

The Company performed its annual goodwill impairment test during the third quarter of 2011. Due to high levels of volatility and dislocation in prices of shares of publicly-held, exchange listed banking companies, a goodwill impairment charge was recognized by the Company during the third quarter of 2011. Prior to April 30, 2012, the Company had eleven bank reporting units, each of which had a goodwill impairment assessment. On April 30, 2012, the Company combined its eleven bank subsidiaries into a single commercial bank and the eleven bank reporting units are now aggregated for assessment of goodwill impairment. The Company has identified that the divisions are components of the Glacier Bank operating segment since there are segment managers; however, the components can be aggregated due to the components having similar economic characteristics.

Since there were no events or circumstances, including the combining of the eleven bank subsidiaries, that occurred since third quarter 2011 that would more-likely-than-not reduce the fair value of the Bank reporting unit below its carrying value, the Company did not perform interim testing at June 30, 2012.

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Loans Receivable, Net

6 Months Ended

Jun. 30, 2012

Loans Receivable, Net [Abstract]

Loans Receivable, Net

3) Loans Receivable, Net

The following schedules summarize the activity in the ALLL on a portfolio class basis:

	Three Months ended June 30, 2012
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	136,586			19,003			73,240			22,444			13,364			8,535
Provision for loan losses		7,925			22			10,374			(1,255	)		(1,471	)		255
Charge-offs		(8,679	)		(953	)		(5,549	)		(887	)		(1,077	)		(213	)
Recoveries		1,627			67			1,033			268			88			171
Balance at end of period	$	137,459			18,139			79,098			20,570			10,904			8,748

	Three Months ended June 30, 2011
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	140,829			17,004			80,098			20,960			14,206			8,561
Provision for loan losses		19,150			1,557			9,430			3,969			294			3,900
Charge-offs		(21,814	)		(1,388	)		(10,691	)		(5,413	)		(971	)		(3,351	)
Recoveries		1,630			239			1,048			99			96			148
Balance at end of period	$	139,795			17,412			79,885			19,615			13,625			9,258

	Six Months ended June 30, 2012
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,516			17,227			76,920			20,833			13,616			8,920
Provision for loan losses		16,550			2,085			13,010			1,304			(470	)		621
Charge-offs		(19,737	)		(1,320	)		(12,534	)		(2,356	)		(2,358	)		(1,169	)
Recoveries		3,130			147			1,702			789			116			376
Balance at end of period	$	137,459			18,139			79,098			20,570			10,904			8,748

	Six Months ended June 30, 2011
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,107			20,957			76,147			19,932			13,334			6,737
Provision for loan losses		38,650			(703	)		23,697			6,607			2,415			6,634
Charge-offs		(38,318	)		(3,157	)		(21,319	)		(7,166	)		(2,303	)		(4,373	)
Recoveries		2,356			315			1,360			242			179			260
Balance at end of period	$	139,795			17,412			79,885			19,615			13,625			9,258

The following schedules disclose the ALLL and loans receivable on a portfolio class basis:

	June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	19,208		3,938		9,337		3,408		690		1,835
Collectively evaluated for impairment		118,251		14,201		69,761		17,162		10,214		6,913
Total allowance for loan and lease losses	$	137,459		18,139		79,098		20,570		10,904		8,748
Loans receivable
Individually evaluated for impairment	$	237,899		33,617		144,506		38,702		13,501		7,573
Collectively evaluated for impairment		3,207,297		491,934		1,507,184		603,484		408,748		195,947
Total loans receivable	$	3,445,196		525,551		1,651,690		642,186		422,249		203,520

	December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	18,828		2,659		9,756		4,233		584		1,596
Collectively evaluated for impairment		118,688		14,568		67,164		16,600		13,032		7,324
Total allowance for loan and lease losses	$	137,516		17,227		76,920		20,833		13,616		8,920
Loans receivable
Individually evaluated for impairment	$	258,659		24,453		162,959		49,962		14,750		6,535
Collectively evaluated for impairment		3,207,476		492,354		1,509,100		573,906		425,819		206,297
Total loans receivable	$	3,466,135		516,807		1,672,059		623,868		440,569		212,832

Substantially all of the Company’s loan receivables are with customers within the Company’s market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas. Net deferred fees, costs, premiums, and discounts of $2,104,000 and $3,123,000 were included in the loans receivable balance at June 30, 2012 and December 31, 2011, respectively.

The following schedules disclose the impaired loans by portfolio class basis:

	At or for the Three or Six Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	81,875		18,356		36,084		21,607		1,847		3,981
Unpaid principal balance		92,771		18,666		46,440		21,735		1,918		4,012
Valuation allowance		19,208		3,938		9,337		3,408		690		1,835
Average impaired loans - three months		84,275		16,939		38,156		23,840		1,785		3,555
Average impaired loans - six months		82,089		14,996		38,761		23,255		1,597		3,480
Loans without a specific valuation allowance
Recorded balance	$	156,024		15,261		108,422		17,095		11,654		3,592
Unpaid principal balance		186,116		16,120		129,254		22,459		14,274		4,009
Average impaired loans - three months		170,211		15,010		116,160		22,542		12,733		3,766
Average impaired loans - six months		173,788		14,454		118,436		24,320		12,998		3,580
Totals
Recorded balance	$	237,899		33,617		144,506		38,702		13,501		7,573
Unpaid principal balance		278,887		34,786		175,694		44,194		16,192		8,021
Valuation allowance		19,208		3,938		9,337		3,408		690		1,835
Average impaired loans - three months		254,486		31,949		154,316		46,382		14,518		7,321
Average impaired loans - six months		255,877		29,450		157,197		47,575		14,595		7,060

	At or for the Year ended December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	77,717		11,111		39,971		22,087		1,219		3,329
Unpaid principal balance		85,514		11,177		47,569		22,196		1,238		3,334
Valuation allowance		18,828		2,659		9,756		4,233		584		1,596
Average impaired loans		66,871		10,330		38,805		13,395		1,284		3,057
Loans without a specific valuation allowance
Recorded balance	$	180,942		13,342		122,988		27,875		13,531		3,206
Unpaid principal balance		208,828		14,741		139,962		35,174		15,097		3,854
Average impaired loans		168,983		14,730		123,231		19,963		8,975		2,084
Totals
Recorded balance	$	258,659		24,453		162,959		49,962		14,750		6,535
Unpaid principal balance		294,342		25,918		187,531		57,370		16,335		7,188
Valuation allowance		18,828		2,659		9,756		4,233		584		1,596
Average impaired loans		235,854		25,060		162,036		33,358		10,259		5,141

Interest income recognized on impaired loans for the periods ended June 30, 2012 and December 31, 2011 was not significant.

The following is a loans receivable aging analysis on a portfolio class basis:

	June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Accruing loans 30-59 days past due	$	37,893		990		12,819		20,093		2,690		1,301
Accruing loans 60-89 days past due		10,814		5,175		2,822		1,995		472		350
Accruing loans 90 days or more past due		3,267		421		1,547		980		145		174
Non-accrual loans		126,463		19,835		77,203		15,490		10,156		3,779
Total past due and non-accrual loans		178,437		26,421		94,391		38,558		13,463		5,604
Current loans receivable		3,266,759		499,130		1,557,299		603,628		408,786		197,916
Total loans receivable	$	3,445,196		525,551		1,651,690		642,186		422,249		203,520

	December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Accruing loans 30-59 days past due	$	31,386		9,038		12,683		3,279		4,092		2,294
Accruing loans 60-89 days past due		17,700		2,678		11,660		1,034		1,276		1,052
Accruing loans 90 days or more past due		1,413		59		108		1,060		156		30
Non-accrual loans		133,689		11,881		87,956		21,685		10,272		1,895
Total past due and non-accrual loans		184,188		23,656		112,407		27,058		15,796		5,271
Current loans receivable		3,281,947		493,151		1,559,652		596,810		424,773		207,561
Total loans receivable	$	3,466,135		516,807		1,672,059		623,868		440,569		212,832

The following is a summary of the troubled debt restructurings (“TDR”) that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented on a portfolio class basis:

	Three Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Troubled debt restructurings
Number of loans		47		5		15		22		1		4
Pre-modification outstanding balance	$	11,929		1,342		5,736		4,309		310		232
Post-modification outstanding balance	$	10,650		1,342		4,444		4,322		310		232
Troubled debt restructurings that subsequently defaulted
Number of loans		9		—		4		2		1		2
Recorded balance	$	3,127		—		2,077		531		442		77

	Six Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Troubled debt restructurings
Number of loans		103		8		40		41		7		7
Pre-modification outstanding balance	$	28,455		1,701		16,846		8,432		1,095		381
Post-modification outstanding balance	$	26,469		1,701		14,838		8,454		1,095		381
Troubled debt restructurings that subsequently defaulted
Number of loans		20		—		11		5		2		2
Recorded balance	$	6,207		—		4,735		798		597		77

The majority of TDRs occurring in most loan classes was a result of an extension of the maturity date which aggregated 31 percent of total TDRs. In addition, 19 percent of total TDRs were a result of a combination of an interest rate reduction, extension of the maturity date, or reduction in the face amount and 19 percent were a result of a payment deferral or change to interest. For commercial real estate, the class with the largest dollar amount of TDRs, approximately 32 percent was due to a payment deferral or change to interest rate and 24 percent was due to a combination of an interest rate reduction, extension of the maturity date, or reduction in the face amount.

In addition to the TDRs that occurred during the period provided in the preceding table, the Company had TDRs with pre-modification loan balances of $24,390,000 for the six months ended June 30, 2012 for which other real estate owned was received in full or partial satisfaction of the loans. The majority of such TDRs was in commercial real estate.

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income [Abstract]

Components of accumulated other comprehensive income

(Dollars in thousands)	June 30, 2012			December 31, 2011
Unrealized holding gains on available-for-sale securities	$	86,945			63,711
Tax effect		(33,822	)		(24,783	)
Net of tax amount		53,123			38,928
Change in fair value of derivatives used for cash flow hedges		(14,845	)		(8,906	)
Tax effect		5,775			3,465
Net of tax amount		(9,070	)		(5,441	)
Total accumulated other comprehensive income	$	44,053			33,487

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Investment Securities, Available-for-Sale (Tables)

6 Months Ended

Jun. 30, 2012

Investment Securities, Available-for-Sale [Abstract]

Comparison of amortized cost and estimated fair value of investment securities designated as available-for-sale

	June 30, 2012
	Weighted			Amortized		Gross Unrealized					Fair
(Dollars in thousands)	Yield			Cost		Gains		Losses			Value
U.S. government and federal agency
Maturing after one year through five years		1.62	%	$	202		3		—			205
U.S. government sponsored enterprises
Maturing within one year		2.37	%		3,218		12		—			3,230
Maturing after one year through five years		2.34	%		21,727		458		—			22,185
Maturing after five years through ten years		1.90	%		73		—		—			73
		2.34	%		25,018		470		—			25,488
State and local governments
Maturing within one year		0.99	%		45,759		11		(5	)		45,765
Maturing after one year through five years		2.14	%		127,290		3,788		(121	)		130,957
Maturing after five years through ten years		2.64	%		52,835		1,699		(38	)		54,496
Maturing after ten years		4.78	%		886,899		75,645		(682	)		961,862
		4.22	%		1,112,783		81,143		(846	)		1,193,080
Corporate bonds
Maturing within one year		1.39	%		19,457		27		(4	)		19,480
Maturing after one year through five years		2.41	%		121,697		810		(351	)		122,156
Maturing after five years through ten years		2.30	%		18,197		166		(73	)		18,290
		2.27	%		159,351		1,003		(428	)		159,926
Collateralized debt obligations
Maturing after ten years		8.03	%		2,848		—		(114	)		2,734
Residential mortgage-backed securities		1.75	%		2,017,135		11,358		(5,644	)		2,022,849
Total investment securities		2.61	%	$	3,317,337		93,977		(7,032	)		3,404,282

	December 31, 2011
	Weighted			Amortized		Gross Unrealized					Fair
(Dollars in thousands)	Yield			Cost		Gains		Losses			Value
U.S. government and federal agency
Maturing after one year through five years		1.62	%	$	204		4		—			208
U.S. government sponsored enterprises
Maturing within one year		1.58	%		3,979		17		—			3,996
Maturing after one year through five years		2.36	%		26,399		682		—			27,081
Maturing after five years through ten years		1.90	%		78		—		—			78
		2.26	%		30,456		699		—			31,155
State and local governments
Maturing within one year		1.31	%		4,786		3		(2	)		4,787
Maturing after one year through five years		2.22	%		89,752		2,660		(22	)		92,390
Maturing after five years through ten years		2.59	%		63,143		2,094		(19	)		65,218
Maturing after ten years		4.84	%		845,657		57,138		(535	)		902,260
		4.44	%		1,003,338		61,895		(578	)		1,064,655
Corporate bonds
Maturing after one year through five years		2.55	%		60,810		261		(1,264	)		59,807
Maturing after five years through ten years		2.38	%		2,409		21		—			2,430
		2.54	%		63,219		282		(1,264	)		62,237
Collateralized debt obligations
Maturing after ten years		8.03	%		5,648		—		(282	)		5,366
Residential mortgage-backed securities		1.70	%		1,960,167		10,138		(7,183	)		1,963,122
Total investment securities		2.64	%	$	3,063,032		73,018		(9,307	)		3,126,743

Gain or loss on sale of Investments

	Three Months ended June 30,					Six Months ended June 30,
(Dollars in thousands)	2012		2011			2012		2011
Gross proceeds	$	—		4,074			—		8,208
Less amortized cost		—		(4,665	)		—		(8,675	)
Net loss on sale of investments	$	—		(591	)		—		(467	)
Gross gain on sale of investments	$	—		39			—		223
Gross loss on sale of investments		—		(630	)		—		(690	)
Net loss on sale of investments	$	—		(591	)		—		(467	)

Summary of investments with an unrealized loss position

	June 30, 2012
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
State and local governments	$	77,764		(667	)		7,624		(179	)		85,388		(846	)
Corporate bonds		52,812		(396	)		5,383		(32	)		58,195		(428	)
Collateralized debt obligations		—		—			2,734		(114	)		2,734		(114	)
Residential mortgage-backed securities		854,027		(4,309	)		74,878		(1,335	)		928,905		(5,644	)
Total temporarily impaired securities	$	984,603		(5,372	)		90,619		(1,660	)		1,075,222		(7,032	)

	December 31, 2011
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
State and local governments	$	26,434		(90	)		9,948		(488	)		36,382		(578	)
Corporate bonds		31,782		(1,264	)		—		—			31,782		(1,264	)
Collateralized debt obligations		—		—			5,366		(282	)		5,366		(282	)
Residential mortgage-backed securities		943,372		(6,850	)		8,244		(333	)		951,616		(7,183	)
Total temporarily impaired securities	$	1,001,588		(8,204	)		23,558		(1,103	)		1,025,146		(9,307	)

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

7) Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period presented. Diluted earnings per share is computed by including the net increase in shares as if dilutive outstanding stock options were exercised, using the treasury stock method.

Basic and diluted earnings per share has been computed based on the following:

	Three Months ended June 30,				Six Months ended June 30,
(Dollars in thousands, except per share data)	2012		2011		2012		2011
Net income available to common stockholders, basic and diluted	$	18,981		11,886		35,314		22,171
Average outstanding shares - basic		71,928,697		71,915,073		71,921,885		71,915,073
Add: dilutive stock options and awards		156		—		105		—
Average outstanding shares - diluted		71,928,853		71,915,073		71,921,990		71,915,073
Basic earnings per share	$	0.26		0.17		0.49		0.31
Diluted earnings per share	$	0.26		0.17		0.49		0.31

There were 945,063 and 1,641,528 options excluded from the diluted average outstanding share calculation for the six months ended June 30, 2012 and 2011, respectively, due to the option exercise price exceeding the market price of the Company’s common stock.

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Derivatives and Hedging Activities

6 Months Ended

Jun. 30, 2012

Derivatives and Hedging Activities [Abstract]

Derivatives and Hedging Activities

5) Derivatives and Hedging Activities

The Company’s interest rate derivative financial instruments as of June 30, 2012 are as follows:

(Dollars in thousands)	Forecasted Notional Amount		Variable Interest Rate  1	Fixed Interest Rate  1			Term
Interest rate swap	$	160,000	3 month LIBOR		3.378	%	Oct. 21, 2014 - Oct. 21, 2021 2
Interest rate swap		100,000	3 month LIBOR		2.498	%	Nov 30, 2015 - Nov. 30, 2022  2

¹  The Company pays the fixed interest rate and the counterparties pay the Company the variable interest rate.

²  No cash will be exchanged prior to the term.

The hedging strategy converts the LIBOR based variable interest rate on forecasted borrowings to a fixed interest rate, thereby protecting the Company from floating interest rate variability.

The following table summarizes the fair value of the Company’s interest rate derivative financial instruments:

		Fair Value
(Dollars in thousands)	Balance Sheet Location	June 30, 2012		December 31, 2011
Interest rate swap	Other liabilities	$	14,845		8,906

Pursuant to the interest rate swap agreements, the Company pledged collateral to the counterparties in the form of investment securities totaling $22,087,000 at June 30, 2012. There was no collateral pledged from the counterparties to the Company as of June 30, 2012. There is the possibility that the Company may need to pledge additional collateral in the future.

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

6) Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income, included in stockholders’ equity, are as follows:

(Dollars in thousands)	June 30, 2012			December 31, 2011
Unrealized holding gains on available-for-sale securities	$	86,945			63,711
Tax effect		(33,822	)		(24,783	)
Net of tax amount		53,123			38,928
Change in fair value of derivatives used for cash flow hedges		(14,845	)		(8,906	)
Tax effect		5,775			3,465
Net of tax amount		(9,070	)		(5,441	)
Total accumulated other comprehensive income	$	44,053			33,487

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Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2012

Fair Value of Assets and Liabilities [Abstract]

Fair Value of Assets and Liabilities

8) Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There is a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets and liabilities measured at fair value on a recurring basis, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended June 30, 2012.

Investment securities: fair value for available-for-sale securities is estimated by obtaining quoted market prices for identical assets, where available. If such prices are not available, fair value is based on independent asset pricing services and models, the inputs of which are market-based or independently sourced market parameters, including but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections, and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. Where Level 1 or Level 2 inputs are not available, such securities are classified as Level 3 within the hierarchy.

Fair value determinations of investment securities are the responsibility of the Company’s corporate accounting department. The Company contracts with independent third party pricing vendors to generate fair value estimates on a monthly basis. The Company reviews the vendors’ inputs for fair value estimates and the recommended assignments of levels within the fair value hierarchy. The review includes the extent to which markets for investment securities are determined to have limited or no activity, or are judged to be active markets. The Company reviews the extent to which observable and unobservable inputs are used as well as the appropriateness of the underlying assumptions about risk that a market participant would use in active markets, with adjustments for limited or inactive markets. In considering the inputs to the fair value estimates, the Company places less reliance on quotes that are judged to not reflect orderly transactions, or are non-binding indications. The Company makes independent inquiries of other knowledgeable parties in testing the reliability of the inputs, including consideration for illiquidity, credit risk, and cash flow estimates. In assessing credit risk, the Company reviews payment performance, collateral adequacy, credit rating histories, and issuers’ financial statements with follow-up discussion with issuers. For those markets determined to be inactive, the valuation techniques used are models for which management verifies that discount rates are appropriately adjusted to reflect illiquidity and credit risk. The Company also independently obtains cash flow estimates that are stressed at levels that exceed those used by the independent third party pricing vendors.

Interest rate swap derivative agreements: fair values for interest rate swap derivative agreements are based upon the estimated amounts to settle the contracts considering current interest rates and are calculated using discounted cash flows that are observable or that can be corroborated by observable market data and, therefore, are classified within Level 2 of the valuation hierarchy. The inputs used to determine fair value include the 3 month Libor forward curve to estimate variable rate cash inflows and the spot Libor curve to estimate the discount rate. The estimated variable rate cash inflows are compared to the fixed rate outflows and such difference is discounted to a present value to estimate the fair value of the interest rate swaps. The Company also obtains and compares the reasonableness of the pricing from a secondary independent party.

The following schedules disclose the fair value measurement of assets and liabilities measured at fair value on a recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	205		—		205		—
U.S. government sponsored enterprises		25,488		—		25,488		—
State and local governments		1,193,080		—		1,193,080		—
Corporate bonds		159,926		—		159,926		—
Collateralized debt obligations		2,734		—		2,734		—
Residential mortgage-backed securities		2,022,849		—		2,022,849		—
Total assets measured at fair value on a recurring basis	$	3,404,282		—		3,404,282		—
Interest rate swaps	$	14,845		—		14,845		—
Total liabilities measured at fair value on a recurring basis	$	14,845		—		14,845		—

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities, available-for-sale
U.S. government and federal agency	$	208		—		208		—
U.S. government sponsored enterprises		31,155		—		31,155		—
State and local governments		1,064,655		—		1,064,655		—
Corporate bonds		62,237		—		62,237		—
Collateralized debt obligations		5,366		—		5,366		—
Residential mortgage-backed securities		1,963,122		—		1,963,122		—
Total assets measured at fair value on a recurring basis	$	3,126,743		—		3,126,743		—
Interest rate swaps	$	8,906		—		8,906		—
Total liabilities measured at fair value on a recurring basis	$	8,906		—		8,906		—

Level 3 Reconciliation

There were no Level 3 fair value measurements during the six month period ended June 30, 2012.

The following schedule reconciles the opening and closing balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the period ended June 30, 2011:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
				Investment Securities
(Dollars in thousands)	Total			Collateralized Debt Obligations			Residential Mortgage-backed Securities
Balance as of December 31, 2010	$	6,751			6,595			156
Total unrealized gains for the period included in other comprehensive income		1,641			1,598			43
Amortization, accretion and principal payments		(2,240	)		(2,240	)		—
Balance as of June 30, 2011	$	6,152			5,953			199

Non-recurring Measurements

The following is a description of the inputs and valuation methodologies used for assets recorded at fair value on a non-recurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended June 30, 2012.

Other real estate owned (“OREO”): OREO is carried at the lower of fair value at acquisition date or estimated fair value, less estimated cost to sell. Estimated fair value of other real estate owned is based on appraisals or evaluations. OREO is classified within Level 3 of the fair value hierarchy.

Collateral-dependent impaired loans, net of ALLL: loans included in the Company’s financials for which it is probable that the Company will not collect all principal and interest due according to contractual terms are considered impaired. Estimated fair value of collateral-dependent impaired loans is based on the fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company’s credit departments review appraisals for OREO and collateral-dependent loans, giving consideration to the highest and best use of the collateral. The appraisal or evaluation (new or updated) is considered the starting point for determining fair value. The Company also considers other factors and events in the environment that may affect the fair value. The fair values are reduced by discounts to consider lack of marketability and estimated cost to sell. The appraisals or evaluations (new or updated) are reviewed at least quarterly and more frequently based on current market conditions, including deterioration in a borrower’s financial condition and when property values may be subject to significant volatility. After review and acceptance of the collateral appraisal or evaluation (new or updated), adjustments to the impaired loan or OREO may occur. The Company generally obtains new or updated appraisals or evaluations annually.

Goodwill: Prior to April 30, 2012, goodwill was evaluated for impairment at the bank subsidiary level at least annually. On April 30, 2012, the Company combined its eleven bank subsidiaries into a single commercial bank and the eleven bank reporting units are now aggregated for assessment of goodwill impairment. The evaluation of goodwill impairment will be reviewed during the third quarter of 2012 and the inputs and valuation methods are not expected to change. The key inputs used to determine the implied fair value and the corresponding amount of the impairment charge includes quoted market prices of other banks, discounted cash flows and inputs from comparable transactions. These inputs are classified within Level 3 of the fair value hierarchy. The goodwill impairment evaluation is the responsibility of the Company’s corporate accounting department. Valuations and significant inputs developed by the independent valuation firm are reviewed by the Company for accuracy and reasonableness. For additional information regarding goodwill and reporting unit(s), see Note 4.

The following schedules disclose the fair value measurement of assets with a recorded change during the period resulting from re-measuring the assets at fair value on a non-recurring basis:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	25,026		—		—		25,026
Collateral-dependent impaired loans, net of ALLL		37,159		—		—		37,159
Total assets measured at fair value on a non-recurring basis	$	62,185		—		—		62,185

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Fair Value 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other real estate owned	$	38,076		—		—		38,076
Collateral-dependent impaired loans, net of ALLL		55,339		—		—		55,339
Goodwill		24,718		—		—		24,718
Total assets measured at fair value on a non-recurring basis	$	118,133		—		—		118,133

Fair Value of Financial Instruments

The following is a description of the methods used to estimate the fair value of all other assets and liabilities recognized at amounts other than fair value.

Cash and cash equivalents: fair value is estimated at book value.

Loans held for sale: fair value is estimated at book value due to the insignificant time between origination date and sale date.

Loans receivable, net of ALLL: fair value is estimated by discounting the future cash flows using the rates at which similar notes would be written for the same remaining maturities. The market rates used are based on current rates the Company would impose for similar loans and reflect a market participant assumption about risks associated with non-performance, illiquidity, and the structure and term of the loans along with local economic and market conditions. Estimated fair value of impaired loans is based on the fair value of the collateral, less estimated cost to sell, or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate). All impaired loans are classified as Level 3 and all other loans are classified as Level 2 within the hierarchy.

Accrued interest receivable: fair value is estimated at book value.

Non-marketable equity securities: fair value is estimated at book value due to restrictions that limit the sale or transfer of such securities.

Deposits: fair value of term deposits is estimated by discounting the future cash flows using rates of similar deposits with similar maturities. The market rates used were obtained from a knowledgeable independent third party and reviewed by the Company. The rates were the average of current rates offered by the Company’s local competitors. The estimated fair value of demand, NOW, savings, and money market deposits is the book value since rates are regularly adjusted to market rates and such deposits are classified in Level 1 of the valuation hierarchy. Certificate accounts and wholesale deposits are classified as Level 2 within the hierarchy.

Federal Home Loan Bank (“FHLB”) advances: fair value of non-callable FHLB advances is estimated by discounting the future cash flows using rates of similar advances with similar maturities. These rates were obtained from current rates offered by FHLB. The estimated fair value of callable FHLB advances was obtained from FHLB and the model was reviewed by the Company through discussions with FHLB.

Securities sold under agreements to repurchase (“repurchase agreements”) and other borrowed funds: fair value of term repurchase agreements and other term borrowings is estimated based on current repurchase rates and borrowing rates currently available to the Company for repurchases and borrowings with similar terms and maturities. The estimated fair value for overnight repurchase agreements and other borrowings is book value.

Subordinated debentures: fair value of the subordinated debt is estimated by discounting the estimated future cash flows using current estimated market rates. The market rates used were averages of currently traded trust preferred securities with similar characteristics to the Company’s issuances and obtained from an independent third party.

Accrued interest payable: fair value is estimated at book value.

Off-balance sheet financial instruments: commitments to extend credit and letters of credit represent the principal categories of off-balance sheet financial instruments. Rates for these commitments are set at time of loan closing, such that no adjustment is necessary to reflect these commitments at market value. The Company has an insignificant amount of off-balance sheet financial instruments.

The following schedules present the carrying amounts, estimated fair values and the level within the fair value hierarchy of the Company’s financial instruments:

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount 6/30/12		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	140,419		140,419		—		—
Investment securities, available-for-sale		3,404,282		—		3,404,282		—
Loans held for sale		88,442		88,442		—		—
Loans receivable, net of ALLL		3,307,737		—		3,175,795		218,691
Accrued interest receivable		37,108		37,108		—		—
Non-marketable equity securities		50,371		—		50,371		—
Total financial assets	$	7,028,359		265,969		6,630,448		218,691
Financial liabilities
Deposits	$	4,982,269		3,300,960		1,689,452		—
FHLB advances		906,029		—		937,226		—
Repurchase agreements and other borrowed funds		476,757		—		476,757		—
Subordinated debentures		125,347		—		—		66,168
Accrued interest payable		5,076		5,076		—		—
Interest rate swaps		14,845		—		14,845		—
Total financial liabilities	$	6,510,323		3,306,036		3,118,280		66,168

			Fair Value Measurements At the End of the Reporting Period Using
(Dollars in thousands)	Carrying Amount 12/31/11		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	128,032		128,032		—		—
Investment securities, available-for-sale		3,126,743		—		3,126,743		—
Loans held for sale		95,457		95,457		—		—
Loans receivable, net of ALLL		3,328,619		—		3,146,502		239,831
Accrued interest receivable		34,961		34,961		—		—
Non-marketable equity securities		49,694		—		49,694		—
Total financial assets	$	6,763,506		258,450		6,322,939		239,831
Financial liabilities
Deposits	$	4,821,213		3,132,261		1,698,382		—
FHLB advances		1,069,046		—		1,099,699		—
Repurchase agreements and other borrowed funds		268,638		—		268,642		—
Subordinated debentures		125,275		—		—		65,903
Accrued interest payable		5,825		5,825		—		—
Interest rate swaps		8,906		—		8,906		—
Total financial liabilities	$	6,298,903		3,138,086		3,075,629		65,903

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Loans Receivable, Net (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	$ 81,875	$ 81,875	$ 77,717
Loans with a specific valuation allowance, Unpaid principal balance	92,771	92,771	85,514
Loans with a specific valuation allowance, Average impaired loans	84,275	82,089	66,871
Loans without a specific valuation allowance, Recorded balance	156,024	156,024	180,942
Loans without a specific valuation allowance, Unpaid principal balance	186,116	186,116	208,828
Loans without a specific valuation allowance, Average impaired loans	170,211	173,788	168,983
Recorded balance	237,899	237,899	258,659
Unpaid principal balance	278,887	278,887	294,342
Valuation allowance	19,208	19,208	18,828
Average impaired loans	254,486	255,877	235,854
Residential Real Estate [Member]
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	18,356	18,356	11,111
Loans with a specific valuation allowance, Unpaid principal balance	18,666	18,666	11,177
Loans with a specific valuation allowance, Average impaired loans	16,939	14,996	10,330
Loans without a specific valuation allowance, Recorded balance	15,261	15,261	13,342
Loans without a specific valuation allowance, Unpaid principal balance	16,120	16,120	14,741
Loans without a specific valuation allowance, Average impaired loans	15,010	14,454	14,730
Recorded balance	33,617	33,617	24,453
Unpaid principal balance	34,786	34,786	25,918
Valuation allowance	3,938	3,938	2,659
Average impaired loans	31,949	29,450	25,060
Commercial Real Estate [Member]
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	36,084	36,084	39,971
Loans with a specific valuation allowance, Unpaid principal balance	46,440	46,440	47,569
Loans with a specific valuation allowance, Average impaired loans	38,156	38,761	38,805
Loans without a specific valuation allowance, Recorded balance	108,422	108,422	122,988
Loans without a specific valuation allowance, Unpaid principal balance	129,254	129,254	139,962
Loans without a specific valuation allowance, Average impaired loans	116,160	118,436	123,231
Recorded balance	144,506	144,506	162,959
Unpaid principal balance	175,694	175,694	187,531
Valuation allowance	9,337	9,337	9,756
Average impaired loans	154,316	157,197	162,036
Other Commercial [Member]
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	21,607	21,607	22,087
Loans with a specific valuation allowance, Unpaid principal balance	21,735	21,735	22,196
Loans with a specific valuation allowance, Average impaired loans	23,840	23,255	13,395
Loans without a specific valuation allowance, Recorded balance	17,095	17,095	27,875
Loans without a specific valuation allowance, Unpaid principal balance	22,459	22,459	35,174
Loans without a specific valuation allowance, Average impaired loans	22,542	24,320	19,963
Recorded balance	38,702	38,702	49,962
Unpaid principal balance	44,194	44,194	57,370
Valuation allowance	3,408	3,408	4,233
Average impaired loans	46,382	47,575	33,358
Home Equity [Member]
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	1,847	1,847	1,219
Loans with a specific valuation allowance, Unpaid principal balance	1,918	1,918	1,238
Loans with a specific valuation allowance, Average impaired loans	1,785	1,597	1,284
Loans without a specific valuation allowance, Recorded balance	11,654	11,654	13,531
Loans without a specific valuation allowance, Unpaid principal balance	14,274	14,274	15,097
Loans without a specific valuation allowance, Average impaired loans	12,733	12,998	8,975
Recorded balance	13,501	13,501	14,750
Unpaid principal balance	16,192	16,192	16,335
Valuation allowance	690	690	584
Average impaired loans	14,518	14,595	10,259
Other Consumer [Member]
Summary of the impaired loans by portfolio class of loans
Loans with a specific valuation allowance, Recorded balance	3,981	3,981	3,329
Loans with a specific valuation allowance, Unpaid principal balance	4,012	4,012	3,334
Loans with a specific valuation allowance, Average impaired loans	3,555	3,480	3,057
Loans without a specific valuation allowance, Recorded balance	3,592	3,592	3,206
Loans without a specific valuation allowance, Unpaid principal balance	4,009	4,009	3,854
Loans without a specific valuation allowance, Average impaired loans	3,766	3,580	2,084
Recorded balance	7,573	7,573	6,535
Unpaid principal balance	8,021	8,021	7,188
Valuation allowance	1,835	1,835	1,596
Average impaired loans	$ 7,321	$ 7,060	$ 5,141

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill [Abstract]

Changes in the carrying amount of goodwill and accumulated impairment charges

	Three Months ended June 30,				Six Months ended June 30,
(Dollars in thousands)	2012		2011		2012		2011
Net carrying value at beginning of period	$	106,100		146,259		106,100		146,259
Impairment charge		—		—		—		—
Net carrying value at end of period		106,100		146,259		106,100		146,259

(Dollars in thousands)	June 30, 2012			December 31, 2011
Gross carrying value		146,259			146,259
Accumulated impairment charge		(40,159	)		(40,159	)
Net carrying value	$	106,100			106,100

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Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Assets
Loans receivable	$ 3,445,196	$ 3,466,135
Premises and equipment, net	159,432	158,872
Accrued interest receivable	37,108	34,961
Other assets	40,952	41,709
Total assets	7,434,102	7,187,906
Liabilities
Other borrowed funds	9,973	9,995
Accrued interest payable	5,076	5,825
Other liabilities	62,443	47,682
Total liabilities	6,557,921	6,337,679
CDE (NMTC) [Member]
Assets
Loans receivable	35,443	32,748
Accrued interest receivable	112	116
Other assets	1,233	1,439
Total assets	36,788	34,303
Liabilities
Other borrowed funds	4,629	4,629
Accrued interest payable	3	4
Other liabilities	92	186
Total liabilities	4,724	4,819
LIHTC [Member]
Assets
Premises and equipment, net	15,700	15,996
Other assets	66	31
Total assets	15,766	16,027
Liabilities
Other borrowed funds	3,306	3,306
Accrued interest payable	6	9
Other liabilities	193	363
Total liabilities	$ 3,505	$ 3,678

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Fair Value of Assets and Liabilities (Details 3) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Financial assets
Cash and cash equivalents	$ 140,419	$ 128,032
Investment securities, available-for-sale	3,404,282	3,126,743
Investment securities available-for-sale, Fair value	3,404,282	3,126,743
Loans held for sale	88,442	95,457
Loans receivable, net of ALLL	3,307,737	3,328,619
Accrued interest receivable	37,108	34,961
Non-marketable equity securities	50,371	49,694
Total financial assets	7,028,359	6,763,506
Financial liabilities
Deposits	4,982,269	4,821,213
FHLB advances	906,029	1,069,046
Repurchase agreements and other borrowed funds	476,757	268,638
Subordinated debentures	125,347	125,275
Accrued interest payable	5,076	5,825
Interest rate swap agreements	14,845	8,906
Total financial liabilities	6,510,323	6,298,903
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Financial assets
Cash and cash equivalents, Fair value	140,419	128,032
Loans held for sale, Fair value	88,442	95,457
Accrued interest receivable, Fair value	37,108	34,961
Total financial assets, Fair value	265,969	258,450
Financial liabilities
Deposits, Fair value	3,300,960	3,132,261
Accrued interest payable, Fair value	5,076	5,825
Total financial liabilities, Fair value	3,306,036	3,138,086
Significant Other Observable Inputs (Level 2) [Member]
Financial assets
Investment securities available-for-sale, Fair value	3,404,282	3,126,743
Loans receivable, net of ALLL, Fair value	3,175,795	3,146,502
Non-marketable equity securities, Fair value	50,371	49,694
Total financial assets, Fair value	6,630,448	6,322,939
Financial liabilities
Deposits, Fair value	1,689,452	1,698,382
FHLB advances, Fair value	937,226	1,099,699
Repurchase agreements and other borrowed funds, Fair value	476,757	268,642
Interest rate swap agreements, Fair value	14,845	8,906
Total financial liabilities, Fair value	3,118,280	3,075,629
Significant Unobservable Inputs (Level 3) [Member]
Financial assets
Loans receivable, net of ALLL, Fair value	218,691	239,831
Total financial assets, Fair value	218,691	239,831
Financial liabilities
Subordinated debentures, Fair value	66,168	65,903
Total financial liabilities, Fair value	$ 66,168	$ 65,903

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Derivatives and Hedging Activities (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Interest Rate Swap One [Member]
Summary of interest rate derivative financial instruments
Forecasted notional amount	$ 160,000
Interest rate swap, counterparty variable interest rate	3 month LIBOR
Interest rate swap, fixed interest rate	3.378%
Effective date of interest rate swap agreements	Oct. 21, 2014
Maturity date of interest rate swap agreements	Oct. 21, 2021
Interest Rate Swap Two [Member]
Summary of interest rate derivative financial instruments
Forecasted notional amount	$ 100,000
Interest rate swap, counterparty variable interest rate	3 month LIBOR
Interest rate swap, fixed interest rate	2.498%
Effective date of interest rate swap agreements	Nov. 30, 2015
Maturity date of interest rate swap agreements	Nov. 30, 2022

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statement of Comprehensive Income [Abstract]
Net Income	$ 18,981	$ 11,886	$ 35,314	$ 22,171
Other Comprehensive Income, Net of Tax
Unrealized holding gains on available-for-sale securities	13,214	36,154	23,232	39,182
Reclassification adjustment for losses included in net income		591		467
Net unrealized gains on securities	13,214	36,745	23,232	39,649
Tax effect	(5,140)	(14,400)	(9,037)	(15,538)
Net of tax amount	8,074	22,345	14,195	24,111
Change in fair value of derivatives used for cash flow hedges	(9,051)		(5,939)
Tax effect	3,521		2,310
Net of tax amount	(5,530)		(3,629)
Total other comprehensive income, net of tax	2,544	22,345	10,566	24,111
Total Comprehensive Income	$ 21,525	$ 34,231	$ 45,880	$ 46,282

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Investment Securities, Available-for-Sale

6 Months Ended

Jun. 30, 2012

Investment Securities, Available-for-Sale [Abstract]

Investment Securities, Available-for-Sale

2) Investment Securities, Available-for-Sale

A comparison of the amortized cost and estimated fair value of the Company’s investment securities designated as available-for-sale is presented below.

	June 30, 2012
	Weighted			Amortized		Gross Unrealized					Fair
(Dollars in thousands)	Yield			Cost		Gains		Losses			Value
U.S. government and federal agency
Maturing after one year through five years		1.62	%	$	202		3		—			205
U.S. government sponsored enterprises
Maturing within one year		2.37	%		3,218		12		—			3,230
Maturing after one year through five years		2.34	%		21,727		458		—			22,185
Maturing after five years through ten years		1.90	%		73		—		—			73
		2.34	%		25,018		470		—			25,488
State and local governments
Maturing within one year		0.99	%		45,759		11		(5	)		45,765
Maturing after one year through five years		2.14	%		127,290		3,788		(121	)		130,957
Maturing after five years through ten years		2.64	%		52,835		1,699		(38	)		54,496
Maturing after ten years		4.78	%		886,899		75,645		(682	)		961,862
		4.22	%		1,112,783		81,143		(846	)		1,193,080
Corporate bonds
Maturing within one year		1.39	%		19,457		27		(4	)		19,480
Maturing after one year through five years		2.41	%		121,697		810		(351	)		122,156
Maturing after five years through ten years		2.30	%		18,197		166		(73	)		18,290
		2.27	%		159,351		1,003		(428	)		159,926
Collateralized debt obligations
Maturing after ten years		8.03	%		2,848		—		(114	)		2,734
Residential mortgage-backed securities		1.75	%		2,017,135		11,358		(5,644	)		2,022,849
Total investment securities		2.61	%	$	3,317,337		93,977		(7,032	)		3,404,282

	December 31, 2011
	Weighted			Amortized		Gross Unrealized					Fair
(Dollars in thousands)	Yield			Cost		Gains		Losses			Value
U.S. government and federal agency
Maturing after one year through five years		1.62	%	$	204		4		—			208
U.S. government sponsored enterprises
Maturing within one year		1.58	%		3,979		17		—			3,996
Maturing after one year through five years		2.36	%		26,399		682		—			27,081
Maturing after five years through ten years		1.90	%		78		—		—			78
		2.26	%		30,456		699		—			31,155
State and local governments
Maturing within one year		1.31	%		4,786		3		(2	)		4,787
Maturing after one year through five years		2.22	%		89,752		2,660		(22	)		92,390
Maturing after five years through ten years		2.59	%		63,143		2,094		(19	)		65,218
Maturing after ten years		4.84	%		845,657		57,138		(535	)		902,260
		4.44	%		1,003,338		61,895		(578	)		1,064,655
Corporate bonds
Maturing after one year through five years		2.55	%		60,810		261		(1,264	)		59,807
Maturing after five years through ten years		2.38	%		2,409		21		—			2,430
		2.54	%		63,219		282		(1,264	)		62,237
Collateralized debt obligations
Maturing after ten years		8.03	%		5,648		—		(282	)		5,366
Residential mortgage-backed securities		1.70	%		1,960,167		10,138		(7,183	)		1,963,122
Total investment securities		2.64	%	$	3,063,032		73,018		(9,307	)		3,126,743

Included in the residential mortgage-backed securities are $53,145,000 and $49,252,000 as of June 30, 2012 and December 31, 2011, respectively, of non-guaranteed private label whole loan mortgage-backed securities of which none of the underlying collateral is considered “subprime.”

Maturities of securities do not reflect repricing opportunities present in adjustable rate securities, nor do they reflect expected shorter maturities based upon early prepayment of principal. Weighted yields are based on the level-yield method taking into account premium amortization and discount accretion. Weighted yields on tax-exempt investment securities exclude the federal income tax benefit.

The cost of each investment sold is determined by specific identification. Gain or loss on sale of investments consists of the following:

	Three Months ended June 30,					Six Months ended June 30,
(Dollars in thousands)	2012		2011			2012		2011
Gross proceeds	$	—		4,074			—		8,208
Less amortized cost		—		(4,665	)		—		(8,675	)
Net loss on sale of investments	$	—		(591	)		—		(467	)
Gross gain on sale of investments	$	—		39			—		223
Gross loss on sale of investments		—		(630	)		—		(690	)
Net loss on sale of investments	$	—		(591	)		—		(467	)

Investments with an unrealized loss position are summarized as follows:

	June 30, 2012
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
State and local governments	$	77,764		(667	)		7,624		(179	)		85,388		(846	)
Corporate bonds		52,812		(396	)		5,383		(32	)		58,195		(428	)
Collateralized debt obligations		—		—			2,734		(114	)		2,734		(114	)
Residential mortgage-backed securities		854,027		(4,309	)		74,878		(1,335	)		928,905		(5,644	)
Total temporarily impaired securities	$	984,603		(5,372	)		90,619		(1,660	)		1,075,222		(7,032	)

	December 31, 2011
	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
State and local governments	$	26,434		(90	)		9,948		(488	)		36,382		(578	)
Corporate bonds		31,782		(1,264	)		—		—			31,782		(1,264	)
Collateralized debt obligations		—		—			5,366		(282	)		5,366		(282	)
Residential mortgage-backed securities		943,372		(6,850	)		8,244		(333	)		951,616		(7,183	)
Total temporarily impaired securities	$	1,001,588		(8,204	)		23,558		(1,103	)		1,025,146		(9,307	)

With respect to its impaired securities at June 30, 2012, management determined that it did not intend to sell and there was no expected requirement to sell any of its impaired securities. Based on an analysis of its impaired securities as of June 30, 2012 and December 31, 2011, the Company determined that none of such securities had other-than-temporary impairment.

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Nature of Operations and Summary of Significant Accounting Policies (Details Textual)	Apr. 30, 2012 Segment Commercial_Bank Subsidiary
Nature of Operations and Summary of Significant Accounting Policies (Textual) [Abstract]
Number of bank subsidiaries prior to combination of bank subsidiaries	11
Number of bank subsidiaries subsequent to combination of bank subsidiaries	1
Number of bank divisions subsequent to combination of bank subsidiaries	11
Number of operating segments subsequent to combination of bank subsidiaries	1

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Goodwill (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Changes in the carrying amount of goodwill
Net carrying value at beginning of period	$ 106,100	$ 146,259	$ 106,100	$ 146,259
Impairment charge
Net carrying value at end of period	$ 106,100	$ 146,259	$ 106,100	$ 146,259

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Loans Receivable, Net (Tables)

6 Months Ended

Jun. 30, 2012

Loans Receivable, Net [Abstract]

Summary of activity in the ALLL

	Three Months ended June 30, 2012
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	136,586			19,003			73,240			22,444			13,364			8,535
Provision for loan losses		7,925			22			10,374			(1,255	)		(1,471	)		255
Charge-offs		(8,679	)		(953	)		(5,549	)		(887	)		(1,077	)		(213	)
Recoveries		1,627			67			1,033			268			88			171
Balance at end of period	$	137,459			18,139			79,098			20,570			10,904			8,748

	Three Months ended June 30, 2011
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	140,829			17,004			80,098			20,960			14,206			8,561
Provision for loan losses		19,150			1,557			9,430			3,969			294			3,900
Charge-offs		(21,814	)		(1,388	)		(10,691	)		(5,413	)		(971	)		(3,351	)
Recoveries		1,630			239			1,048			99			96			148
Balance at end of period	$	139,795			17,412			79,885			19,615			13,625			9,258

	Six Months ended June 30, 2012
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,516			17,227			76,920			20,833			13,616			8,920
Provision for loan losses		16,550			2,085			13,010			1,304			(470	)		621
Charge-offs		(19,737	)		(1,320	)		(12,534	)		(2,356	)		(2,358	)		(1,169	)
Recoveries		3,130			147			1,702			789			116			376
Balance at end of period	$	137,459			18,139			79,098			20,570			10,904			8,748

	Six Months ended June 30, 2011
(Dollars in thousands)	Total			Residential Real Estate			Commercial Real Estate			Other Commercial			Home Equity			Other Consumer
Allowance for loan and lease losses
Balance at beginning of period	$	137,107			20,957			76,147			19,932			13,334			6,737
Provision for loan losses		38,650			(703	)		23,697			6,607			2,415			6,634
Charge-offs		(38,318	)		(3,157	)		(21,319	)		(7,166	)		(2,303	)		(4,373	)
Recoveries		2,356			315			1,360			242			179			260
Balance at end of period	$	139,795			17,412			79,885			19,615			13,625			9,258

Summary of recorded investment in loans and ALLL on a portfolio class basis

	June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	19,208		3,938		9,337		3,408		690		1,835
Collectively evaluated for impairment		118,251		14,201		69,761		17,162		10,214		6,913
Total allowance for loan and lease losses	$	137,459		18,139		79,098		20,570		10,904		8,748
Loans receivable
Individually evaluated for impairment	$	237,899		33,617		144,506		38,702		13,501		7,573
Collectively evaluated for impairment		3,207,297		491,934		1,507,184		603,484		408,748		195,947
Total loans receivable	$	3,445,196		525,551		1,651,690		642,186		422,249		203,520

	December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	18,828		2,659		9,756		4,233		584		1,596
Collectively evaluated for impairment		118,688		14,568		67,164		16,600		13,032		7,324
Total allowance for loan and lease losses	$	137,516		17,227		76,920		20,833		13,616		8,920
Loans receivable
Individually evaluated for impairment	$	258,659		24,453		162,959		49,962		14,750		6,535
Collectively evaluated for impairment		3,207,476		492,354		1,509,100		573,906		425,819		206,297
Total loans receivable	$	3,466,135		516,807		1,672,059		623,868		440,569		212,832

Summary of impaired loans by portfolio class of loans

	At or for the Three or Six Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	81,875		18,356		36,084		21,607		1,847		3,981
Unpaid principal balance		92,771		18,666		46,440		21,735		1,918		4,012
Valuation allowance		19,208		3,938		9,337		3,408		690		1,835
Average impaired loans - three months		84,275		16,939		38,156		23,840		1,785		3,555
Average impaired loans - six months		82,089		14,996		38,761		23,255		1,597		3,480
Loans without a specific valuation allowance
Recorded balance	$	156,024		15,261		108,422		17,095		11,654		3,592
Unpaid principal balance		186,116		16,120		129,254		22,459		14,274		4,009
Average impaired loans - three months		170,211		15,010		116,160		22,542		12,733		3,766
Average impaired loans - six months		173,788		14,454		118,436		24,320		12,998		3,580
Totals
Recorded balance	$	237,899		33,617		144,506		38,702		13,501		7,573
Unpaid principal balance		278,887		34,786		175,694		44,194		16,192		8,021
Valuation allowance		19,208		3,938		9,337		3,408		690		1,835
Average impaired loans - three months		254,486		31,949		154,316		46,382		14,518		7,321
Average impaired loans - six months		255,877		29,450		157,197		47,575		14,595		7,060

	At or for the Year ended December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	77,717		11,111		39,971		22,087		1,219		3,329
Unpaid principal balance		85,514		11,177		47,569		22,196		1,238		3,334
Valuation allowance		18,828		2,659		9,756		4,233		584		1,596
Average impaired loans		66,871		10,330		38,805		13,395		1,284		3,057
Loans without a specific valuation allowance
Recorded balance	$	180,942		13,342		122,988		27,875		13,531		3,206
Unpaid principal balance		208,828		14,741		139,962		35,174		15,097		3,854
Average impaired loans		168,983		14,730		123,231		19,963		8,975		2,084
Totals
Recorded balance	$	258,659		24,453		162,959		49,962		14,750		6,535
Unpaid principal balance		294,342		25,918		187,531		57,370		16,335		7,188
Valuation allowance		18,828		2,659		9,756		4,233		584		1,596
Average impaired loans		235,854		25,060		162,036		33,358		10,259		5,141

Loan portfolio aging analysis on a portfolio class basis

	June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Accruing loans 30-59 days past due	$	37,893		990		12,819		20,093		2,690		1,301
Accruing loans 60-89 days past due		10,814		5,175		2,822		1,995		472		350
Accruing loans 90 days or more past due		3,267		421		1,547		980		145		174
Non-accrual loans		126,463		19,835		77,203		15,490		10,156		3,779
Total past due and non-accrual loans		178,437		26,421		94,391		38,558		13,463		5,604
Current loans receivable		3,266,759		499,130		1,557,299		603,628		408,786		197,916
Total loans receivable	$	3,445,196		525,551		1,651,690		642,186		422,249		203,520

	December 31, 2011
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Accruing loans 30-59 days past due	$	31,386		9,038		12,683		3,279		4,092		2,294
Accruing loans 60-89 days past due		17,700		2,678		11,660		1,034		1,276		1,052
Accruing loans 90 days or more past due		1,413		59		108		1,060		156		30
Non-accrual loans		133,689		11,881		87,956		21,685		10,272		1,895
Total past due and non-accrual loans		184,188		23,656		112,407		27,058		15,796		5,271
Current loans receivable		3,281,947		493,151		1,559,652		596,810		424,773		207,561
Total loans receivable	$	3,466,135		516,807		1,672,059		623,868		440,569		212,832

Summary of troubled debt restructurings

	Three Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Troubled debt restructurings
Number of loans		47		5		15		22		1		4
Pre-modification outstanding balance	$	11,929		1,342		5,736		4,309		310		232
Post-modification outstanding balance	$	10,650		1,342		4,444		4,322		310		232
Troubled debt restructurings that subsequently defaulted
Number of loans		9		—		4		2		1		2
Recorded balance	$	3,127		—		2,077		531		442		77

	Six Months ended June 30, 2012
(Dollars in thousands)	Total		Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Troubled debt restructurings
Number of loans		103		8		40		41		7		7
Pre-modification outstanding balance	$	28,455		1,701		16,846		8,432		1,095		381
Post-modification outstanding balance	$	26,469		1,701		14,838		8,454		1,095		381
Troubled debt restructurings that subsequently defaulted
Number of loans		20		—		11		5		2		2
Recorded balance	$	6,207		—		4,735		798		597		77