<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K/A

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended December 31, 2009

                                       or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                           COMMISSION FILE 000-18911

                             GLACIER BANCORP, INC.

<TABLE>
<S>                                       <C>
               MONTANA                                 81-0519541
       (State of Incorporation)           (IRS Employer Identification Number)
</TABLE>

                      49 Commons Loop, Kalispell, MT 59901
                          (Address of Principal Office)

       Registrant's telephone number, including area code: (406) 756-4200

           Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<S>                                       <C>
Common Stock, $0.01 par value per share           Nasdaq Global Select Market
         (Title of Each Class)            (Name of Each Exchange on Which Registered)
</TABLE>

        Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. [X] Yes [ ] No

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. [ ] Yes [X] No

Indicate by check mark whether the registrant (i) 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 (ii) 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 Website every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months. [ ] Yes [ ] No

Indicate by check mark if disclosure of delinquent filers pursuant to item 405
of regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company (as
defined by Exchange Act Rule 12b-2).

[X] Large accelerated filer                     [ ] Accelerated filer
[ ] Non-accelerated filer                       [ ] Smaller reporting company
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ] Yes [X] No

The aggregate market value of the voting common equity held by non-affiliates of
the Registrant at June 30, 2009 (the last business day of the most recent second
quarter), was $876,495,372 (based on the average bid and ask price as quoted on
the NASDAQ Global Select Market at the close of business on that date).

As of February 15, 2010, there were issued and outstanding 61,619,803 shares of
the Registrant's common stock. No preferred shares are issued or outstanding.

DOCUMENT INCORPORATED BY REFERENCE

Portions of the 2010 Annual Meeting Proxy Statement dated March 29, 2010 are
incorporated by reference into Part III of this Form 10-K.

<PAGE>

                                EXPLANATORY NOTE

On March 1, 2010 Glacier Bancorp, Inc. (the "Company") filed with the Securities
and Exchange Commission (the "SEC") its Annual Report on Form 10-K for the
fiscal year ended December 31, 2009 (the "10-K Report"). During the process of
submitting the 10-K Report via EDGAR to the SEC, certain information presented
in tabular form was misaligned requiring this Amendment No. 1 (the "Amendment").
More specifically, the Company is filing this Amendment to the 10-K Report to
(i) amend Item 1 (Business) to correct the non-performing assets by loan type
table included in the lending activity section presented therein; (ii) Item 8
(Financial Statements and Supplementary Data) to correct the operating segment
table for 2009 included in footnote twenty-one presented therein; and (iii) Item
15 (Exhibits and Financial Statement Schedules) to update the consent of the
independent auditors.

No other revisions or amendments have been made to Part I, Part II or Part IV of
the 10-K Report. This Amendment does not reflect events occurring after March 1,
2010, the date of the original filing of our 10-K Report, or modify or update
those disclosures that may have been affected by subsequent events. In addition,
currently-dated certifications from our Chief Executive Officer and Chief
Financial Officer have been included as exhibits to this Amendment.

<PAGE>

                              GLACIER BANCORP, INC.
                                   FORM 10-K/A
                                (Amendment No. 1)

                                  ANNUAL REPORT
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
PART I
Item 1  Business                                                              4

PART II
Item 8  Financial Statements and Supplementary Data                          31

PART IV
Item 15 Exhibits and Financial Statement Schedules                           78
</TABLE>

<PAGE>

                                     PART I

ITEM 1. BUSINESS

                        GENERAL DEVELOPMENT OF BUSINESS

Glacier Bancorp, Inc. headquartered in Kalispell, Montana (the "Company"), is a
Montana corporation incorporated in 2004 as a successor corporation to the
Delaware corporation originally incorporated in 1990. The Company is a regional
multi-bank holding company providing commercial banking services from 106
locations in Montana, Idaho, Wyoming, Colorado, Utah and Washington. The Company
offers a wide range of banking products and services, including transaction and
savings deposits, commercial, consumer, and real estate loans, mortgage
origination services, and retail brokerage services. The Company serves
individuals, small to medium-sized businesses, community organizations and
public entities.

SUBSIDIARIES

The Company includes the parent holding company and the following eighteen
subsidiaries which consist of eleven bank subsidiaries and seven trust
subsidiaries.

                               Bank Subsidiaries

<TABLE>
<S>                                                                  <C>
                              Montana
             Glacier Bank ("Glacier") founded in 1955                                        Idaho
First Security Bank of Missoula ("First Security") founded in 1973   Mountain West Bank ("Mountain West") founded in 1993
         Western Security Bank ("Western") founded in 2001           Citizens Community Bank ("Citizens") founded in 1996
         Big Sky Western Bank ("Big Sky") founded in 1990
         Valley Bank of Helena ("Valley") founded in 1978                                   Wyoming
      First Bank of Montana ("First Bank-MT") founded in 1924                1st Bank ("1st Bank") founded in 1989
                                                                        First National Bank & Trust ("First National")
                             Colorado                                                   founded in 1912
        Bank of the San Juans ("San Juans") founded in 1998
</TABLE>

                               Trust Subsidiaries
                 Glacier Capital Trust II ("Glacier Trust II")
                Glacier Capital Trust III ("Glacier Trust III")
                 Glacier Capital Trust IV ("Glacier Trust IV")
              Citizens (ID) Statutory Trust I ("Citizens Trust I")
       Bank of the San Juans Bancorporation Trust I ("San Juans Trust I")
            First Company Statutory Trust 2001 ("First Co Trust 01")
            First Company Statutory Trust 2003 ("First Co Trust 03")

The Company formed or acquired First Co Trust 01, First Co Trust 03, San Juans
Trust I, Glacier Trust IV, Glacier Trust III, Citizens Trust I, and Glacier
Trust II as financing subsidiaries on October 2, 2009, October 2, 2009, December
1, 2008, August 15, 2006, January 31, 2006, April 1, 2005, and March 24, 2004,
respectively. The trusts were formed for the purpose of issuing trust preferred
securities and, in accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification(TM) ("ASC") Topic 810, Consolidation, the
subsidiaries are not consolidated into the Company's financial statements. The
preferred securities entitle the shareholder to receive cumulative cash
distributions from payments on Subordinated Debentures of the Company. For
additional information regarding the Subordinated Debentures, see Note 10 to the
Consolidated Financial Statements in "Item 8 - Financial Statements and
Supplementary Data."

On February 1, 2009, First National Bank of Morgan ("Morgan") merged into 1st
Bank resulting in operations being conducted under the 1st Bank charter. Prior
period activity of Morgan has been combined and included in 1st Bank's
historical results. The merger has been accounted for as a combination of two
wholly-owned subsidiaries without acquisition accounting.

The Company provides full service brokerage services (selling products such as
stocks, bonds, mutual funds, limited partnerships, annuities and other insurance
products) through Raymond James Financial Services and Morgan Stanley Smith
Barney, both non-affiliated companies. The Company shares in the commissions
generated, without devoting significant management and staff time to this
portion of the business.


                                       4

<PAGE>

RECENT AND PENDING ACQUISITIONS

The Company's strategy has been to profitably grow its business through internal
growth and selective acquisitions. The Company continues to look for profitable
expansion opportunities in existing markets and new markets in the Rocky
Mountain states. During the last five years, the Company has completed the
following acquisitions: On October 2, 2009, First Company and its subsidiary,
First National Bank & Trust, was acquired by the Company. On December 1, 2008,
Bank of the San Juans Bancorporation and its subsidiary, Bank of the San Juans
in Durango, Colorado, was acquired by the Company. On April 30, 2007, North Side
State Bank in Rock Springs, Wyoming was acquired and became a part of 1st Bank.
On October 1, 2006, Citizens Development Company ("CDC") and its five bank
subsidiaries located across Montana were acquired by the Company. On September
1, 2006, First National Bank of Morgan and its one branch office in Mountain
Green, Utah was acquired. On October 31, 2005, First State Bank of Thompson
Falls, Montana was acquired and its two branches were merged into First
Security. On May 20, 2005, Zions National Bank branch office in Bonners Ferry,
Idaho was acquired and became a branch of Mountain West. On April 1, 2005,
Citizens Bank Holding Co. and its subsidiary Citizens Community Bank in
Pocatello, Idaho was acquired. On February 28, 2005, First National Bank-West
Co. and its subsidiary, 1st Bank, in Evanston, Wyoming were acquired.

FDIC, FHLB AND FRB

The Federal Deposit Insurance Corporation ("FDIC") insures each bank
subsidiary's deposit accounts. All bank subsidiaries, except San Juans are
members of the Federal Home Loan Bank ("FHLB") of Seattle; however, San Juans is
a member of the FHLB of Topeka, which are two of twelve banks that comprise the
FHLB System. All bank subsidiaries, with the exception of Mountain West,
Citizens and San Juans, are members of the Federal Reserve Bank ("FRB").

BANK LOCATIONS AT DECEMBER 31, 2009

The following is a list of the parent company and bank subsidiaries' main office
locations as of December 31, 2009. See "Item 2. Properties."

<TABLE>
<S>                     <C>                                               <C>
Glacier Bancorp, Inc.     49 Commons Loop, Kalispell, MT 59901            (406) 756-4200
Glacier                  202 Main Street, Kalispell, MT 59901             (406) 756-4200
Mountain West            125 Ironwood Drive, Coeur d'Alene, Idaho 83814   (208) 765-0284
First Security          1704 Dearborn, Missoula, MT 59801                 (406) 728-3115
1st Bank                1001 Main Street, Evanston, WY 82930              (307) 789-3864
Western                 2812 1st Avenue North, Billings, MT 59101         (406) 371-8258
Big Sky                 4150 Valley Commons, Bozeman, MT 59718            (406) 587-2922
Valley                  3030 North Montana Avenue, Helena, MT 59601       (406) 495-2400
First National           245 East First Street, Powell, WY 82435          (307) 754-2201
Citizens                 280 South Arthur, Pocatello, ID 83204            (208) 232-5373
First Bank-MT            224 West Main, Lewistown, MT 59457               (406) 538-7471
San Juans                144 East Eighth Street, Durango, CO 81301        (970) 247-1818
</TABLE>


                                       5

<PAGE>

                      FINANCIAL INFORMATION ABOUT SEGMENTS

The following abbreviated organizational chart illustrates the various existing
parent and subsidiary relationships at December 31, 2009:

<TABLE>
<S>                                                          <C>
                                            ---------------------------------
                                            |     Glacier Bancorp, Inc.     |
                                            |    (Parent Holding Company)   |
                                            |                               |
                                            ---------------------------------
                                                             |
-------------------------------------------------------------|-----------------------------------------------------------
|        Glacier Bank       |  |    Mountain West Bank    |  |  |    First Security Bank  |  |         1st Bank         |
|    (MT Community Bank)    |  |    (ID Community Bank)   |  |  |        of Missoula      |  |    (WY Community Bank)   |
|                           |  |                          |  |  |   (MT Community Bank)   |  |                          |
-----------------------------  ----------------------------  |  ---------------------------  ----------------------------
                                                             |
-------------------------------------------------------------|-----------------------------------------------------------
|   Western Security Bank   |  |          Big Sky         |  |  |        Valley Bank      |  |    First National Bank   |
|    (MT Community Bank)    |  |       Western Bank       |  |  |        of Helena        |  |          & Trust         |
|                           |  |    (MT Community Bank)   |  |  |    (MT Community Bank)  |  |    (WY Community Bank)   |
-----------------------------  ----------------------------  |  ---------------------------  ----------------------------
                                                             |
-------------------------------------------------------------|-----------------------------------------------------------
| Citizens Community Bank   |  |   First Bank of Montana  |  |  |       Bank of the       |  |                          |
|   (ID Community Bank)     |  |   (MT Community Bank)    |  |  |        San Juans        |  | Glacier Capital Trust II |
|                           |  |                          |  |  |    (CO Community Bank)  |  |                          |
-----------------------------  ----------------------------  |  ---------------------------  ----------------------------
                                                             |
-------------------------------------------------------------|-----------------------------------------------------------
|                           |  |                          |  |  | Citizens (ID) Statutory |  |                          |
| Glacier Capital Trust III |  | Glacier Capital Trust IV |  |  |         Trust I         |  |     San Juans Trust I    |
|                           |  |                          |  |  |                         |  |                          |
-----------------------------  ----------------------------  |  ---------------------------  ----------------------------
                                                             |
                               ------------------------------------------------------------
                               |       First Company      |     |       First Company     |
                               |   Statutory Trust 2001   |     |   Statutory Trust 2003  |
                               |                          |     |                         |
                               ----------------------------     ---------------------------
</TABLE>

For information regarding the parent company, separate from the subsidiaries,
see "Item 7 - Management's Discussion & Analysis" and Note 16 to the
Consolidated Financial Statements in "Item 8 - Financial Statements and
Supplementary Data."

The business of the Company's bank subsidiaries (collectively referred to
hereafter as the "Banks") consists primarily of attracting deposit accounts from
the general public and originating commercial, residential, and consumer loans.
The Banks' principal sources of revenue are interest on loans, loan origination
fees, fees on deposit accounts and interest and dividends on investment
securities. The principal sources of expenses are interest on deposits, FHLB
advances, repurchase agreements, subordinated debentures, and other borrowings,
as well as general and administrative expenses.

BUSINESS SEGMENT RESULTS

The Company defines operating segments and evaluates segment performance
internally based on individual bank charters. Centrally provided services to the
banks are allocated based on estimated usage of those services. If required,
variable interest entities ("VIEs") are consolidated into the operating segment
which invested into such entities. Intersegment revenues primarily represents
interest income on intercompany borrowings, management fees, and data processing
fees received by individual banks or the parent company. Intersegment revenues,
expenses and assets are eliminated in order to report results in accordance with
accounting principles generally accepted in the United States of America.

On February 1, 2009, Morgan merged into 1st Bank resulting in operations being
conducted under the 1st Bank charter. On April 30, 2008, Glacier Bank of
Whitefish ("Whitefish") merged into Glacier with operations conducted under the
Glacier charter. The five bank subsidiaries acquired as a result of the
acquisition of CDC included Citizens State Bank, First Citizens Bank of
Billings, First National Bank of Lewistown, Western Bank of Chinook, and First
Citizens Bank, N.A. On January 26, 2007, Citizens State Bank, First Citizens
Bank of Billings, and First Citizens Bank, N.A. were merged into First Security,
Western, and Glacier, respectively. On June 21, 2007, Western Bank of Chinook
merged into First National Bank of Lewistown and renamed First Bank of Montana.
Prior period activity of the merged banks has been combined and included in the
acquiring bank subsidiaries' historical results.


                                       6
<PAGE>

<TABLE>
<CAPTION>
                                             Glacier                          Mountain West                    First Security
                               ----------------------------------   ---------------------------------   ----------------------------
   (Dollars in thousands)         2009         2008        2007        2009        2008        2007       2009      2008      2007
   ----------------------      ----------   ---------   ---------   ---------   ---------   ---------   -------   -------   --------
<S>                            <C>          <C>         <C>         <C>         <C>         <C>         <C>       <C>       <C>
Condensed Income Statements
Net interest income            $   57,139      52,900      40,270      53,302      45,614      41,115    35,788    34,212    32,674
Noninterest income                 15,387      13,926      13,473      27,882      20,353      19,861     8,103     6,987     6,844
                               ----------   ---------   ---------   ---------   ---------   ---------   -------   -------   -------
   Total revenues                  72,526      66,826      53,743      81,184      65,967      60,976    43,891    41,199    39,518
Provision for loan losses         (32,000)     (8,825)     (1,580)    (50,500)    (11,150)     (2,225)  (10,450)   (1,750)   (1,100)
Core deposit intangible
   expense                           (330)       (392)       (415)       (184)       (196)       (208)     (468)     (511)     (554)
Other noninterest expense         (27,325)    (27,074)    (25,231)    (51,525)    (41,922)    (36,745)  (18,897)  (17,128)  (17,295)
                               ----------   ---------   ---------   ---------   ---------   ---------   -------   -------   -------
   Pretax earnings                 12,871      30,535      26,517     (21,025)     12,699      21,798    14,076    21,810    20,569
Income tax (expense) benefit       (2,803)    (10,910)     (9,294)      9,764      (3,628)     (7,701)   (3,372)   (7,282)   (7,027)
                               ----------   ---------   ---------   ---------   ---------   ---------   -------   -------   -------
   Net income (loss)               10,068      19,625      17,223     (11,261)      9,071      14,097    10,704    14,528    13,542
                               ==========   =========   =========   =========   =========   =========   =======   =======   =======
Average Balance Sheet Data
Total assets                   $1,249,755   1,165,234   1,032,420   1,219,435   1,105,761     966,955   916,115   862,203   812,554
Total loans                       967,239     938,824     797,705     976,132     897,841     774,784   580,401   561,258   549,869
Total deposits                    605,928     546,569     610,869     709,834     662,505     693,768   567,649   536,400   553,923
Stockholders' equity              137,188     124,163     111,191     135,932     120,606     109,378   122,153   113,653   107,503
End of Year Balance Sheet
   Data
Total assets                   $1,325,039   1,250,774   1,101,112   1,172,331   1,226,869   1,038,294   890,672   954,218   792,882
Loans, net of ALLL                903,276     963,107     863,253     919,901     955,486     836,426   548,471   561,691   548,379
Total deposits                    726,403     609,473     579,190     793,006     680,404     666,330   588,858   545,199   533,260
Stockholders' equity              139,799     129,890     115,247     146,720     124,881     114,538   120,044   116,856   109,320
Performance Ratios
Return on average assets             0.81%       1.68%       1.67%      -0.92%       0.82%       1.46%     1.17%     1.68%     1.67%
Return on average equity             7.34%      15.81%      15.49%      -8.28%       7.52%      12.89%     8.76%    12.78%    12.60%
Efficiency ratio                    38.13%      41.10%      47.72%      63.69%      63.85%      60.60%    44.12%    42.81%    45.17%
Regulatory Capital Ratios &
   Other
Tier I risk-based capital
   ratio                            12.33%      11.31%      10.75%      13.39%      10.62%      10.45%    14.91%    14.29%    13.67%
Total risk-based capital
   ratio                            13.61%      12.57%      11.92%      14.67%      11.88%      11.67%    16.18%    15.55%    14.92%
Leverage capital ratio              10.09%       9.79%       9.62%      10.98%       8.68%       9.01%    11.32%    11.31%    11.11%
Full time equivalent
   employees                          274         283         274         376         393         354       178       178       181
Locations                              17          17          16          29          29          30        13        13        13
</TABLE>

<TABLE>
<CAPTION>
                                         1st Bank                       Western                       Big Sky
                               ----------------------------   ---------------------------   ---------------------------
   (Dollars in thousands)        2009       2008      2007      2009      2008      2007      2009      2008      2007
   ----------------------      --------   -------   -------   -------   -------   -------   -------   -------   -------
<S>                            <C>        <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Condensed Income Statements
Net interest income            $ 24,057    22,695    20,135    21,233    20,713    19,043    15,700    15,595    12,610
Noninterest income                4,628     4,728     4,212     8,631     3,306     8,896     3,564     3,608     3,583
                               --------   -------   -------   -------   -------   -------   -------   -------   -------
   Total revenues                28,685    27,423    24,347    29,864    24,019    27,939    19,264    19,203    16,193
Provision for loan losses       (10,800)   (2,012)     (630)   (3,200)     (540)       --    (9,200)   (2,200)     (645)
Core deposit intangible
   expense                         (652)     (712)     (688)     (571)     (623)     (675)      (23)      (23)      (23)
Other noninterest expense       (14,943)  (14,143)  (13,015)  (16,342)  (16,151)  (16,050)   (8,441)   (7,390)   (7,220)
                               --------   -------   -------   -------   -------   -------   -------   -------   -------
   Pretax earnings                2,290    10,556    10,014     9,751     6,705    11,214     1,600     9,590     8,305
Income tax (expense) benefit       (309)   (3,631)   (3,482)   (2,813)   (1,818)   (4,129)     (121)   (3,587)   (3,144)
                               --------   -------   -------   -------   -------   -------   -------   -------   -------
   Net income (loss)              1,981     6,925     6,532     6,938     4,887     7,085     1,479     6,003     5,161
                               ========   =======   =======   =======   =======   =======   =======   =======   =======
Average Balance Sheet Data
Total assets                   $606,649   563,588   510,449   604,020   566,364   545,074   340,827   325,976   286,537
Total loans                     312,372   315,007   255,401   344,456   347,075   322,845   287,338   283,512   239,919
Total deposits                  414,059   416,173   406,300   410,490   342,793   373,682   178,465   180,860   215,784
Stockholders' equity             97,859    87,948    79,942    87,837    83,915    85,581    45,683    38,220    33,833
End of Year Balance Sheet
   Data
Total assets                   $650,072   566,869   551,327   624,077   609,868   508,915   368,571   332,325   315,885
Loans, net of ALLL              286,019   320,370   298,800   314,613   354,199   321,533   260,433   287,394   262,934
Total deposits                  421,271   418,231   439,281   504,619   357,729   345,273   184,278   179,834   215,771
Stockholders' equity            101,789    95,200    87,523    85,259    83,843    83,226    51,614    40,384    35,406
Performance Ratios
Return on average assets           0.33%     1.23%     1.28%     1.15%     0.86%     1.30%     0.43%     1.84%     1.80%
Return on average equity           2.02%     7.87%     8.17%     7.90%     5.82%     8.28%     3.24%    15.71%    15.25%
Efficiency ratio                  54.37%    54.17%    56.28%    56.63%    69.84%    59.86%    43.94%    38.60%    44.73%
Regulatory Capital Ratios &
   Other
Tier I risk-based capital
   ratio                          14.99%    12.58%    11.27%    14.67%    13.26%    14.22%    16.06%    11.89%    11.04%
Total risk-based capital
   ratio                          16.26%    13.83%    12.50%    15.93%    14.52%    15.48%    17.34%    13.15%    12.29%
Leverage capital ratio             9.74%     8.08%     7.41%    10.19%    10.71%    11.18%    13.67%    11.62%    11.17%
Full time equivalent
   employees                        141       148       153       161       161       161        83        83        82
Locations                            12        12        11         8         8         8         5         5         5
</TABLE>


                                        7

<PAGE>

<TABLE>
<CAPTION>
                                           Valley                 First National                 Citizens
                               ----------------------------   ----------------------   ---------------------------
   (Dollars in thousands)        2009       2008      2007     2009(1)   2008   2007     2009      2008      2007
   ----------------------      --------   -------   -------   --------   ----   ----   -------   -------   -------
<S>                            <C>        <C>       <C>       <C>        <C>    <C>    <C>       <C>       <C>
Condensed Income Statements
Net interest income            $ 14,051    12,719    10,641     3,964      --     --    10,437     7,676     7,532
Noninterest income                5,717     4,673     4,807     4,187      --     --     4,235     2,855     2,550
                               --------   -------   -------   -------     ---    ---   -------   -------   -------
   Total revenues                19,768    17,392    15,448     8,151      --     --    14,672    10,531    10,082
Provision for loan losses        (1,200)     (810)     (405)   (1,683)     --     --    (2,800)     (750)      (75)
Core deposit intangible
   expense                          (42)      (42)      (42)     (144)     --     --      (111)     (128)     (146)
Other noninterest expense        (9,229)   (8,770)   (8,335)   (2,011)     --     --    (7,992)   (6,407)   (6,102)
                               --------   -------   -------   -------     ---    ---   -------   -------   -------
   Pretax earnings                9,297     7,770     6,666     4,313      --     --     3,769     3,246     3,759
Income tax (expense) benefit     (2,740)   (2,251)   (1,955)     (230)     --     --    (1,332)   (1,092)   (1,403)
                               --------   -------   -------   -------     ---    ---   -------   -------   -------
   Net income (loss)              6,557     5,519     4,711     4,083      --     --     2,437     2,154     2,356
                               ========   =======   =======   =======     ===    ===   =======   =======   =======
Average Balance Sheet Data
Total assets                   $312,273   302,754   277,569    72,641      --     --   234,382   201,258   178,994
Total loans                     195,007   199,080   190,718    39,416      --     --   168,675   143,946   134,353
Total deposits                  196,506   186,004   189,547    60,832      --     --   146,780   136,997   137,861
Stockholders' equity             34,246    29,487    25,951     7,870      --     --    30,814    28,137    26,888
End of Year Balance Sheet
   Data
Total assets                   $351,228   298,392   283,155   295,953      --     --   241,807   217,697   182,769
Loans, net of ALLL              182,916   195,504   194,912   151,379      --     --   161,182   159,412   131,988
Total deposits                  211,935   185,505   187,657   247,256      --     --   159,763   135,970   139,228
Stockholders' equity             30,585    31,483    27,323    31,364      --     --    31,969    29,110    27,808
Performance Ratios
Return on average assets           2.10%     1.82%     1.70%     5.62%     --     --      1.04%     1.07%     1.32%
Return on average equity          19.15%    18.72%    18.15%    51.88%     --     --      7.91%     7.66%     8.76%
Efficiency ratio                  46.90%    50.67%    54.23%    26.44%     --     --     55.23%    62.05%    61.97%
Regulatory Capital Ratios &
   Other
Tier I risk-based capital
   ratio                          13.11%    13.65%    11.68%    15.98%     --     --     11.32%    10.84%    11.92%
Total risk-based capital
   ratio                          14.37%    14.91%    12.93%    16.89%     --     --     12.59%    12.10%    13.17%
Leverage capital ratio             8.57%     9.11%     9.03%    10.38%     --     --      9.62%     9.46%    10.10%
Full time equivalent
   employees                         85        83        80        75      --     --        70        63        61
Locations                             6         6         6         3      --     --         6         5         5
</TABLE>

<TABLE>
<CAPTION>
                                      First Bank - MT                 San Juans                      Parent
                               ----------------------------   -------------------------   ---------------------------
   (Dollars in thousands)        2009       2008      2007      2009     2008(2)   2007     2009      2008      2007
   ----------------------      --------   -------   -------   -------   --------   ----   -------   -------   -------
<S>                            <C>        <C>       <C>       <C>       <C>        <C>    <C>       <C>       <C>
Condensed Income Statements
Net interest income            $  7,900     6,676     6,308     8,021       575      --    (6,265)   (6,762)   (6,859)
Noninterest income                  929       768       736     1,329        85      --    52,466    83,891    84,025
                               --------   -------   -------   -------   -------     ---   -------   -------   -------
   Total revenues                 8,829     7,444     7,044     9,350       660      --    46,201    77,129    77,166
Provision for loan losses          (985)     (390)      (20)   (1,800)      (53)     --        --        --        --
Core deposit intangible
   expense                         (358)     (405)     (451)     (233)      (19)     --        --        --        --
Other noninterest expense        (3,189)   (3,083)   (3,426)   (5,435)     (397)     --   (13,769)  (13,424)  (13,006)
                               --------   -------   -------   -------   -------     ---   -------   -------   -------
   Pretax earnings                4,297     3,566     3,147     1,882       191      --    32,432    63,705    64,160
Income tax (expense) benefit     (1,426)   (1,279)   (1,395)     (551)      (75)     --     1,942     1,952     4,443
                               --------   -------   -------   -------   -------     ---   -------   -------   -------
   Net income (loss)              2,871     2,287     1,752     1,331       116      --    34,374    65,657    68,603
                               ========   =======   =======   =======   =======     ===   =======   =======   =======
Average Balance Sheet Data
Total assets                   $179,885   152,354   142,401   175,107    12,983      --   824,527   689,132   619,391
Total loans                     119,840   109,706    98,402   149,665    12,172      --        --        --        --
Total deposits                  121,770   109,067   107,491   140,528    11,292      --        --        --        --
Stockholders' equity             30,955    28,172    26,557    23,396     1,171      --   691,922   564,785   496,393
End of Year Balance Sheet
   Data
Total assets                   $217,379   154,645   149,483   184,528   165,784      --   832,916   814,883   660,892
Loans, net of ALLL              114,113   114,177    98,897   145,015   142,114      --        --        --        --
Total deposits                  143,552   113,531   113,692   148,474   143,056      --        --        --        --
Stockholders' equity             32,627    29,329    26,941    25,410    21,207      --   685,890   676,940   528,576
Performance Ratios
Return on average assets           1.60%     1.50%     1.23%     0.76%     0.89%     --
Return on average equity           9.27%     8.12%     6.60%     5.69%     9.91%     --
Efficiency ratio                  40.17%    46.86%    55.04%    60.62%    63.03%     --
Regulatory Capital Ratios &
   Other
Tier I risk-based capital
   ratio                          12.73%    11.70%    10.79%    11.11%     9.26%     --
Total risk-based capital
   ratio                          13.99%    12.95%    12.04%    12.37%    10.51%     --
Leverage capital ratio             9.19%    10.17%     9.26%    10.33%     9.66%     --
Full time equivalent
   employees                         40        37        35        41        31      --       119       111        99
Locations                             3         3         3         3         3      --         1        --        --
</TABLE>


                                        8

<PAGE>

<TABLE>
<CAPTION>
                                           Eliminations                        Consolidation
                               -----------------------------------   ---------------------------------
   (Dollars in thousands)          2009         2008        2007        2009       2008         2007
   ----------------------      -----------   ----------   --------   ---------   ---------   ---------
<S>                            <C>           <C>          <C>        <C>         <C>         <C>
Condensed Income Statements
Net interest income            $        --           --         --     245,327     212,613     183,469
Noninterest income                 (50,584)     (84,146)   (84,169)     86,474      61,034      64,818
                               -----------   ----------   --------   ---------   ---------   ---------
   Total revenues                  (50,584)     (84,146)   (84,169)    331,801     273,647     248,287
Provision for loan losses               --           --         --    (124,618)    (28,480)     (6,680)
Core deposit intangible
   expense                              --           --         --      (3,116)     (3,051)     (3,202)
Other noninterest expense           13,396       13,031     11,710    (165,702)   (142,858)   (134,715)
                               -----------   ----------   --------   ---------   ---------   ---------
   Pretax earnings                 (37,188)     (71,115)   (72,459)     38,365      99,258     103,690
Income tax (expense) benefit            --           --         --      (3,991)    (33,601)    (35,087)
                               -----------   ----------   --------   ---------   ---------   ---------
   Net income (loss)               (37,188)     (71,115)   (72,459)     34,374      65,657      68,603
                               ===========   ==========   ========   =========   =========   =========
Average Balance Sheet Data
Total assets                   $(1,043,687)    (918,204)  (766,262)  5,691,929   5,029,403   4,606,082
Total loans                             --           --     (3,669)  4,140,541   3,808,421   3,360,327
Total deposits                     (59,234)     (28,155)   (23,470)  3,493,607   3,100,505   3,265,755
Stockholders' equity              (753,933)    (655,472)  (606,824)    691,922     564,785     496,393
End of Year Balance Sheet
   Data
Total assets                   $  (962,778)  (1,038,354)  (767,384)  6,191,795   5,553,970   4,817,330
Loans, net of ALLL                      --           --         --   3,987,318   4,053,454   3,557,122
Total deposits                     (29,263)    (106,457)   (35,204)  4,100,152   3,262,475   3,184,478
Stockholders' equity              (797,180)    (702,183)  (627,332)    685,890     676,940     528,576
Performance Ratios
Return on average assets                                                  0.60%       1.31%       1.49%
Return on average equity                                                  4.97%      11.63%      13.82%
Efficiency ratio                                                         50.88%      53.32%      55.55%
Regulatory Capital Ratios &
   Other
Tier I risk-based capital
   ratio                                                                 14.02%      14.30%      12.17%
Total risk-based capital
   ratio                                                                 15.29%      15.55%      13.42%
Leverage capital ratio                                                   11.20%      12.38%      10.48%
Full time equivalent
   employees                                                             1,643       1,571       1,480
Locations                                                                  106         101          97
</TABLE>

(1)  The average balance sheet data is based on daily averages for the entire
     year, with First National being acquired October 2, 2009.

(2)  The average balance sheet data is based on daily averages for the entire
     year, with San Juans being acquired December 1, 2008.

INTERNET ACCESS

Copies of the Company's Annual Report on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 are available free of charge through the Company's website
(www.glacierbancorp.com) as soon as reasonably practicable after the Company has
filed the material with, or furnished it to, the Securities and Exchange
Commission ("SEC"). Copies can also be obtained by accessing the SEC's website
(www.sec.gov).

MARKET AREA

The Company has 106 locations, of which 9 are loan or administration offices, in
35 counties within 6 states including Montana, Idaho, Wyoming, Colorado, Utah,
and Washington. The Company has 53 locations in Montana. In Idaho there are 30
locations. In Wyoming, there are 13 locations. In Utah, there are 4 locations.
In Washington, there are 3 locations. In Colorado, there are 3 locations.

The market area's economic base primarily focuses on tourism, construction,
manufacturing, service industry, and health care. The tourism industry is highly
influenced by two national parks, several ski resorts, large lakes, and rural
scenic areas. Construction development is a result of the high population growth
that has occurred in the market areas, in particular Idaho and western Montana.

COMPETITION

Based on the FDIC summary of deposits survey as of June 30, 2009, the Company
has approximately 20 percent of the total FDIC insured deposits in the 13
counties that it services in Montana. In Idaho, the Company has approximately 6
percent of the deposits in the 9 counties that it services. In Wyoming, the
Company has 22 percent of the deposits in the 6 counties it services. In
Colorado, the Company has 10 percent of the deposits in the 2 counties it
serves. In Utah, the Company has 3 percent of the deposits in the 3 counties it
services.


                                        9

<PAGE>

There are a large number of depository institutions including savings banks,
commercial banks, and credit unions in the counties in which the Company has
offices. The Banks, like other depository institutions, are operating in a
rapidly changing environment. Non-depository financial service institutions,
primarily in the securities and insurance industries, have become competitors
for retail savings and investment funds. Mortgage banking/brokerage firms are
actively competing for residential mortgage business. In addition to offering
competitive interest rates, the principal methods used by banking institutions
to attract deposits include the offering of a variety of services including
on-line banking and convenient office locations and business hours. The primary
factors in competing for loans are interest rates and rate adjustment
provisions, loan maturities, loan fees, and the quality of service to borrowers
and brokers.


                                       10

<PAGE>

          DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY

AVERAGE BALANCE SHEET

The following three-year schedule provides (i) the total dollar amount of
interest and dividend income of the Company for earning assets and the resultant
average yield; (ii) the total dollar amount of interest expense on
interest-bearing liabilities and the resultant average rate; (iii) net interest
and dividend income and interest rate spread; and (iv) net interest margin and
net interest margin tax-equivalent; and (v) return on average assets and return
on average equity.

<TABLE>
<CAPTION>
                                          Year ended 12/31/2009           Year ended 12/31/2008           Year ended 12/31/2007
                                     ------------------------------  ------------------------------  ------------------------------
                                                  Interest  Average               Interest  Average              Interest   Average
                                       Average      and      Yield/    Average      and      Yield/    Average      and      Yield/
       (Dollars in thousands)          Balance   Dividends   Rate      Balance   Dividends    Rate     Balance   Dividends    Rate
       ----------------------        ----------  ---------  -------  ----------  ---------  -------  ----------  ---------  -------
<S>                                  <C>         <C>        <C>      <C>         <C>        <C>      <C>         <C>        <C>
ASSETS:
   Residential real estate loans     $  829,348   $ 54,498   6.57%   $  746,135   $ 51,166   6.86%   $  798,841   $ 59,664   7.47%
   Commercial loans                   2,608,961    151,580   5.81%    2,390,990    165,119   6.91%    1,957,252    157,644   8.05%
   Consumer and other loans             702,232     44,844   6.39%      671,296     47,725   7.11%      604,234     48,105   7.96%
                                     ----------   --------           ----------   --------           ----------   --------
      Total loans                     4,140,541    250,922   6.06%    3,808,421    264,010   6.93%    3,360,327    265,413   7.90%
   Tax-exempt investment securities
      (1)                               445,063     22,196   4.99%      282,884     13,901   4.91%      272,042     13,427   4.94%
   Taxable investment securities        707,062     29,376   4.15%      555,955     25,074   4.51%      574,913     25,920   4.51%
                                     ----------   --------           ----------   --------           ----------   --------
      Total earning assets            5,292,666    302,494   5.72%    4,647,260    302,985   6.52%    4,207,282    304,760   7.24%
   Goodwill and intangibles             158,896                         152,822                         149,934
   Non-earning assets                   240,367                         229,321                         248,866
                                     ----------                      ----------                      ----------
      Total assets                   $5,691,929                      $5,029,403                      $4,606,082
                                     ==========                      ==========                      ==========
LIABILITIES:
   NOW accounts                      $  572,260   $  2,275   0.40%   $  467,374   $  3,014   0.64%   $  461,341   $  4,708   1.02%
   Savings accounts                     303,794        947   0.31%      272,673      1,865   0.68%      268,175      2,679   1.00%
   Money market demand accounts         768,939      8,436   1.10%      760,599     17,234   2.27%      754,995     27,248   3.61%
   Certificate
   accounts                             960,403     24,719   2.57%      853,076     32,634   3.83%    1,000,797     46,824   4.68%
   Wholesale deposits (2)               133,083      2,052   1.54%        7,704        265   3.44%           --         --   0.00%
   Advances from FHLB                   473,038      7,952   1.68%      566,933     15,355   2.71%      382,243     18,897   4.94%
   Securities sold under agreements
      to repurchase and other
      borrowed funds                    995,006     10,786   1.08%      752,958     20,005   2.66%      412,237     20,935   5.08%
                                     ----------   --------           ----------   --------           ----------   --------
      Total interest bearing
         liabilities                  4,206,523     57,167   1.36%    3,681,317     90,372   2.46%    3,279,788    121,291   3.70%
                                                  --------                        --------                        --------
   Non-interest bearing deposits        755,128                         739,079                         781,447
   Other liabilities                     38,356                          44,222                          48,454
                                     ----------                      ----------                      ----------
      Total liabilities               5,000,007                       4,464,618                       4,109,689
                                     ----------                      ----------                      ----------
STOCKHOLDERS' EQUITY:
   Common stock                             615                             548                             532
   Paid-in capital                      495,340                         393,158                         361,003
   Retained earnings                    193,973                         171,385                         132,352
   Accumulated other comprehensive
         income (loss)                    1,994                            (306)                          2,506
                                     ----------                      ----------                      ----------
      Total stockholders' equity        691,922                         564,785                         496,393
      Total liabilities and
         stockholders' equity        $5,691,929                      $5,029,403                      $4,606,082
                                     ==========                      ==========                      ==========
   NET INTEREST INCOME                            $245,327                        $212,613                        $183,469
                                                  --------                        --------                        --------
   NET INTEREST SPREAD                                       4.36%                           4.06%                           3.54%
   NET INTEREST MARGIN                                       4.64%                           4.58%                           4.36%
   NET INTEREST MARGIN
      (TAX-EQUIVALENT)                                       4.82%                           4.70%                           4.50%
</TABLE>

(1)  Without tax effect on non-taxable securities income of $9,827,000,
     $6,155,000 and $5,944,000 for the years ended December 31, 2009, 2008, and
     2007, respectively.

(2)  Wholesale deposits include brokered deposits classified as NOW, money
     market demand, and certificate accounts.


                                       11

<PAGE>

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.

<TABLE>
<CAPTION>
                                   Years ended December 31,        Years ended December 31,
                                        2009 vs. 2008                   2008 vs. 2007
                                 Increase (Decrease) Due to:     Increase (Decrease) Due to:
                                -----------------------------   -----------------------------
    (Dollars in thousands)       Volume     Rate        Net      Volume     Rate        Net
    ----------------------      -------   --------   --------   -------   --------   --------
<S>                             <C>       <C>        <C>        <C>       <C>        <C>
INTEREST INCOME:
Residential real estate loans   $ 5,706   $ (2,374)  $  3,332   $(3,936)  $ (4,562)  $ (8,498)
Commercial loans                 15,053    (28,592)   (13,539)   34,934    (27,459)     7,475
Consumer and other loans          2,199     (5,080)    (2,881)    5,339     (5,719)      (380)
Investment securities            14,556     (1,959)    12,597      (377)         5       (372)
                                -------   --------   --------   -------   --------   --------
      Total interest income      37,514    (38,005)      (491)   35,960    (37,735)    (1,775)
                                -------   --------   --------   -------   --------   --------
INTEREST EXPENSE:
NOW accounts                        676     (1,415)      (739)       62     (1,756)    (1,694)
Savings accounts                    213     (1,130)      (917)       45       (860)      (815)
Money market demand accounts        188     (8,987)    (8,799)      202    (10,215)   (10,013)
Certificate accounts              4,106    (12,021)    (7,915)   (6,911)    (7,278)   (14,189)
Wholesale deposits                4,310     (2,523)     1,787       360        (96)       264
FHLB advances                    (2,544)    (4,859)    (7,403)    9,131    (12,673)    (3,542)
Repurchase agreements and
   other borrowed funds           6,432    (15,651)    (9,219)   17,303    (18,233)      (930)
                                -------   --------   --------   -------   --------   --------
      Total Interest Expense     13,381    (46,586)   (33,205)   20,192    (51,111)   (30,919)
                                -------   --------   --------   -------   --------   --------
   NET INTEREST INCOME          $24,133   $  8,581   $ 32,714   $15,768   $ 13,376   $ 29,144
                                =======   ========   ========   =======   ========   ========
</TABLE>

Net interest income increased $33 million in 2009 over 2008. The increase was
primarily due to increases in loan and investment volumes and decrease in
deposit and borrowing rates which combined outpaced the decrease in loan rates.
For additional information see "Item 7 - Management's Discussion and Analysis".

                              INVESTMENT ACTIVITIES

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 uses the federal statutory rate of 35 percent in calculating its
tax-equivalent yield. Approximately $467 million of the investment portfolio is
comprised of tax-exempt investments which is an increase of $49 million from the
prior year.

For information about the Company's equity investment in the stock of the FHLB,
see "Sources of Funds - Advances and Other Borrowings".

For additional investment activity information, see "Item 7 - Management's
Discussion & Analysis" and Note 3 to the Consolidated Financial Statements in
"Item 8 - Financial Statements and Supplementary Data".


                                       12

<PAGE>

                                LENDING ACTIVITY

GENERAL

The Banks focus their lending activity primarily on the following types of
loans: 1) first-mortgage, conventional loans secured by residential properties,
particularly single-family, 2) installment lending for consumer purposes (e.g.,
auto, home equity, etc.), and 3) commercial lending that concentrates on
targeted businesses. "Item 7 - Management's Discussion & Analysis" and Note 4 to
the Consolidated Financial Statements in "Item 8 - Financial Statements and
Supplementary Data" provide more information about the loan portfolio.

LOAN PORTFOLIO COMPOSITION

The following table summarizes the Company's loan portfolio:

<TABLE>
<CAPTION>
                                     AT                   At                   At                   At                   At
                                 12/31/2009           12/31/2008           12/31/2007           12/31/2006           12/31/2005
                            -------------------  -------------------  -------------------  -------------------  -------------------
  (Dollars in thousands)      AMOUNT    PERCENT    Amount    Percent    Amount    Percent    Amount    Percent    Amount    Percent
  ----------------------    ----------  -------  ----------  -------  ----------  -------  ----------  -------  ----------  -------
<S>                         <C>         <C>      <C>         <C>      <C>         <C>      <C>         <C>      <C>         <C>
REAL ESTATE LOANS:
   Residential              $  746,050    18.71% $  786,869    19.41% $  689,238    19.38% $  758,921    23.97% $  589,260    24.58%
   Held for sale                66,330     1.66%     54,976     1.36%     40,123     1.13%     35,135     1.11%     22,540     0.94%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
      Total                    812,380    20.37%    841,845    20.77%    729,361    20.51%    794,056    25.08%    611,800    25.52%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
COMMERCIAL LOANS:
   Real estate               1,900,438    47.66%  1,935,341    47.74%  1,617,076    45.46%  1,165,617    36.83%    935,460    39.02%
   Other commercial            724,966    18.18%    645,033    15.91%    636,351    17.89%    691,667    21.85%    425,236    17.74%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
      Total                  2,625,404    65.84%  2,580,374    63.65%  2,253,427    63.35%  1,857,284    58.68%  1,360,696    56.76%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
CONSUMER AND OTHER LOANS:
   Consumer                    201,001     5.04%    208,166     5.14%    206,724     5.81%    218,640     6.91%    175,503     7.32%
   Home equity                 501,920    12.59%    507,831    12.53%    432,217    12.15%    356,477    11.26%    295,992    12.35%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
      Total                    702,921    17.63%    715,997    17.67%    638,941    17.96%    575,117    18.17%    471,495    19.67%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
   Net deferred loan fees,
      premiums and
      discounts                (10,460)   -0.26%     (8,023)   -0.20%    (10,194)   -0.29%    (11,674)   -0.37%     (8,149)   -0.34%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
LOANS RECEIVABLE, GROSS      4,130,245   103.58%  4,130,193   101.89%  3,611,535   101.53%  3,214,783   101.56%  2,435,842   101.61%
   Allowance for loan and
      lease losses            (142,927)   -3.58%    (76,739)   -1.89%    (54,413)   -1.53%    (49,259)   -1.56%    (38,655)   -1.61%
                            ----------   ------  ----------   ------  ----------   ------  ----------   ------  ----------   ------
LOANS RECEIVABLE, NET       $3,987,318   100.00% $4,053,454   100.00% $3,557,122   100.00% $3,165,524   100.00% $2,397,187   100.00%
                            ==========   ======  ==========   ======  ==========   ======  ==========   ======  ==========   ======
</TABLE>

LOAN PORTFOLIO MATURITIES OR REPRICING TERM

The stated maturities or first repricing term (if applicable) for the loan
portfolio at December 31, 2009 was as follows:

<TABLE>
<CAPTION>
                                          Residential                 Consumer
         (Dollars in thousands)           Real Estate   Commercial   and Other     Totals
         ----------------------           -----------   ----------   ---------   ---------
<S>                                       <C>           <C>          <C>         <C>
Variable rate maturing or repricing in:
   One year or less                         $207,181       939,514    290,003    1,436,698
   One to five years                         177,185       779,525     49,569    1,006,279
   Thereafter                                 10,932       115,084      2,054      128,070
Fixed rate maturing or repricing in:
   One year or less                          261,162       281,282    146,013      688,457
   One to five years                         130,329       328,365    193,475      652,169
   Thereafter                                 25,591       181,634     21,807      229,032
                                            --------     ---------    -------    ---------
      Totals                                $812,380     2,625,404    702,921    4,140,705
                                            ========     =========    =======    =========
</TABLE>


                                       13

<PAGE>

RESIDENTIAL REAL ESTATE LENDING

The Company's lending activities consist of the origination of both construction
and permanent loans on residential real estate loans. The Company actively
solicits residential real estate loan applications from real estate brokers,
contractors, existing customers, customer referrals, and walk-ins to their
offices. The Company's lending policies generally limit the maximum
loan-to-value ratio on residential mortgage loans to 80 percent of the lesser of
the appraised value or purchase price or above 80 percent of the loan if insured
by a private mortgage insurance company. The Company also provides interim
construction financing for single-family dwellings. These loans are supported by
a term take out commitment.

CONSUMER LAND OR LOT LOANS

The Company originates land and lot acquisition loans to borrowers who intend to
construct their primary residence on the respective land or lot. These loans are
generally for a term of three to five years and are secured by the developed
land or lot with the loan to value limited to the lesser of 75% of cost or
appraised value.

UNIMPROVED LAND AND LAND DEVELOPMENT LOANS

Where real estate market conditions warrant, the Company makes land acquisition
and development loans on properties intended for residential and commercial use.
These loans are generally made for a term of 18 months to two years and secured
by the developed property with a loan-to-value not to exceed the lesser of 75
percent of cost or 65 percent of the appraised discounted bulk sale value upon
completion of the improvements. The loans are made to borrowers with real estate
development experience and appropriate financial strength. Generally it is
required that a certain percentage of the development be pre-sold or that
construction and term take out commitments are in place prior to funding the
loan.

RESIDENTIAL BUILDER GUIDANCE LINES

The Company provides Builder Guidance Lines that are comprised of pre-sold and
spec-home construction and lot acquisition loans. The spec-home construction and
lot acquisition loans are limited to a set number and maximum amount. Generally
the individual loans will not exceed a one year maturity. The homes under
construction are inspected on a regular basis and advances made on a percentage
of completion basis.

COMMERCIAL REAL ESTATE LOANS

Loans are made to purchase, construct and finance commercial real estate
properties. These loans are generally made to borrowers who own and will occupy
the property. Loans to finance investment or income properties are made, but
require additional equity and a higher debt service coverage margin commensurate
with the specific property and projected income.

CONSUMER LENDING

The majority of consumer loans are secured by real estate, automobiles, or other
assets. The Banks intend to continue making such loans because of their
short-term nature, generally between three months and five years. Moreover,
interest rates on consumer loans are generally higher than on residential
mortgage loans. The Banks also originate second mortgage and home equity loans,
especially to its existing customers in instances where the first and second
mortgage loans are less than 80 percent of the current appraised value of the
property.


                                       14
<PAGE>

LOAN PORTFOLIO BY BANK SUBSIDIARY AND REGULATORY CLASSIFICATION

The following tables summarize selected information on the Company's loan
portfolio:

LOANS RECEIVABLE, GROSS BY BANK

<TABLE>
<CAPTION>
                              December 31,
                         ----------------------
(Dollars in thousands)      2009         2008     $ Change   % Change
----------------------   ----------   ---------   --------   --------
<S>                      <C>          <C>         <C>        <C>
Glacier                  $  942,254     982,098   (39,844)      -4%
Mountain West               957,451     971,468   (14,017)      -1%
First Security              566,713     573,228    (6,515)      -1%
1st Bank                    296,913     326,381   (29,468)      -9%
Western                     323,375     361,261   (37,886)     -10%
Big Sky                     270,970     293,626   (22,656)      -8%
Valley                      187,283     199,085   (11,802)      -6%
First National              153,058          --   153,058      n/m
Citizens                    166,049     162,133     3,916        2%
First Bank-MT               117,017     116,122       895        1%
San Juans                   149,162     144,791     4,371        3%
                         ----------   ---------   -------
   Total                 $4,130,245   4,130,193        52        0%
                         ==========   =========   =======
</TABLE>

LAND, LOT AND OTHER CONSTRUCTION LOANS BY BANK

<TABLE>
<CAPTION>
                              December 31,
                         ----------------------
(Dollars in thousands)      2009         2008     $ Change   % Change
----------------------   ----------   ---------   --------   --------
<S>                      <C>          <C>         <C>        <C>
Glacier                   $165,734     204,479     (38,745)    -19%
Mountain West              217,078     249,916     (32,838)    -13%
First Security              71,404      95,960     (24,556)    -26%
1st Bank                    36,888      41,667      (4,779)    -11%
Western                     32,045      45,457     (13,412)    -30%
Big Sky                     71,365      81,869     (10,504)    -13%
Valley                      14,704      17,918      (3,214)    -18%
First National              10,247          --      10,247      n/m
Citizens                    13,263      14,827      (1,564)    -11%
First Bank-MT                1,010       4,507      (3,497)    -78%
San Juans                   39,621      36,793       2,828       8%
                          --------     -------    --------
   Total                  $673,359     793,393    (120,034)    -15%
                          ========     =======    ========
</TABLE>

LAND, LOT AND OTHER CONSTRUCTION LOANS AT 12/31/09 BY BANK, BY TYPE

<TABLE>
<CAPTION>
                                       Consumer                     Developed       Commercial
                             Land       Land or   Unimproved        Lots for         Developed       Other
(Dollars in thousands)   Development      Lot        Land      Operative Builders       Lot      Construction
----------------------   -----------   --------   ----------   ------------------   ----------   ------------
<S>                      <C>           <C>        <C>          <C>                  <C>          <C>
Glacier                    $ 80,881      33,025      29,850           8,625           13,353            --
Mountain West                55,908      74,914      29,684          31,655           10,664        14,253
First Security               30,569       7,208      26,372           4,525              518         2,212
1st Bank                     14,447      12,223       4,448             225            2,513         3,032
Western                      16,309       7,823       5,159             587            1,914           253
Big Sky                      22,909      18,882       9,925           1,992            8,420         9,237
Valley                        2,597       5,867       4,513             159              349         1,219
First National                1,961       2,934         733             250            2,245         2,124
Citizens                      2,868       2,633       2,652             506              655         3,949
First Bank-MT                    --          65         820              --               --           125
San Juans                       417      26,838          45              --            3,878         8,443
                           --------     -------     -------          ------           ------        ------
   Total                   $228,866     192,412     114,201          48,524           44,509        44,847
                           ========     =======     =======          ======           ======        ======
</TABLE>


                                       15

<PAGE>

RESIDENTIAL CONSTRUCTION LOANS BY BANK, BY TYPE

<TABLE>
<CAPTION>
                                                                    Custom and
                            December 31,                               Owner      Pre-Sold
                         ------------------                          Occupied     and Spec
(Dollars in thousands)     2009       2008    $ Change   % Change   12/31/2009   12/31/2009
----------------------   --------   -------   --------   --------   ----------   ----------
<S>                      <C>        <C>       <C>        <C>        <C>          <C>
Glacier                  $ 57,183    84,161   (26,978)     -32%       $ 9,762       47,421
Mountain West              57,437   100,289   (42,852)     -43%        23,606       33,831
First Security             19,664    19,910      (246)      -1%         9,985        9,679
1st Bank                   17,633    30,742   (13,109)     -43%        11,010        6,623
Western                     2,245     6,993    (4,748)     -68%         1,830          415
Big Sky                    20,679    28,356    (7,677)     -27%         3,169       17,510
Valley                      5,170     8,265    (3,095)     -37%         4,222          948
First National              2,612        --     2,612      n/m          1,505        1,107
Citizens                   13,211    17,909    (4,698)     -26%         6,619        6,592
First Bank-MT                 234     1,384    (1,150)     -83%           174           60
San Juans                  13,811    11,425     2,386       21%         6,753        7,058
                         --------   -------   -------                 -------      -------
   Total                 $209,879   309,434   (99,555)     -32%       $78,635      131,244
                         ========   =======   =======                 =======      =======
</TABLE>

SINGLE FAMILY RESIDENTIAL LOANS BY BANK, BY TYPE

<TABLE>
<CAPTION>
                            December 31,                                1st        Junior
                         ------------------                            Lien         Lien
(Dollars in thousands)     2009       2008    $ Change   % Change   12/31/2009   12/31/2009
----------------------   --------   -------   --------   --------   ----------   ----------
<S>                      <C>        <C>       <C>        <C>        <C>          <C>
Glacier                  $204,789   198,654    6,135         3%      $183,647       21,142
Mountain West             278,158   274,119    4,039         1%       236,962       41,196
First Security             82,141    79,107    3,034         4%        68,266       13,875
1st Bank                   65,555    62,954    2,601         4%        60,566        4,989
Western                    50,502    56,789   (6,287)      -11%        48,099        2,403
Big Sky                    33,308    29,493    3,815        13%        29,482        3,826
Valley                     66,644    70,935   (4,291)       -6%        54,255       12,389
First National             19,239        --   19,239       n/m         16,150        3,089
Citizens                   20,937    18,903    2,034        11%        18,695        2,242
First Bank-MT              10,003    10,341     (338)       -3%         8,536        1,467
San Juans                  22,811    23,605     (794)       -3%        21,305        1,506
                         --------   -------   ------                 --------      -------
   Total                 $854,087   824,900   29,187         4%      $745,963      108,124
                         ========   =======   ======                 ========      =======
</TABLE>

COMMERCIAL REAL ESTATE LOANS BY BANK, BY TYPE

<TABLE>
<CAPTION>
                              December 31,                                 Owner      Non-Owner
                         ----------------------                          Occupied     Occupied
(Dollars in thousands)      2009         2008     $ Change   % Change   12/31/2009   12/31/2009
----------------------   ----------   ---------   --------   --------   ----------   ----------
<S>                      <C>          <C>         <C>        <C>        <C>          <C>
Glacier                  $  232,552     223,449     9,103        4%      $117,243      115,309
Mountain West               230,383     180,215    50,168       28%       164,625       65,758
First Security              224,425     192,352    32,073       17%       150,733       73,692
1st Bank                     64,008      67,249    (3,241)      -5%        54,852        9,156
Western                     107,173      98,290     8,883        9%        54,113       53,060
Big Sky                      82,303      80,053     2,250        3%        50,699       31,604
Valley                       48,144      46,850     1,294        3%        31,353       16,791
First National               26,703          --    26,703      n/m         18,329        8,374
Citizens                     55,660      53,813     1,847        3%        42,786       12,874
First Bank-MT                18,827      17,397     1,430        8%        12,597        6,230
San Juans                    47,838      50,925    (3,087)      -6%        27,306       20,532
                         ----------   ---------   -------                --------      -------
   Total                 $1,138,016   1,010,593   127,423       13%      $724,636      413,380
                         ==========   =========   =======                ========      =======
</TABLE>


                                       16

<PAGE>

CONSUMER AND OTHER LOANS BY BANK, BY TYPE

<TABLE>
<CAPTION>
                            December 31,                              Home Equity       Other
                         ------------------                         Line of Credit    Consumer
(Dollars in thousands)     2009       2008    $ Change   % Change     12/31/2009     12/31/2009
----------------------   --------   -------   --------   --------   --------------   ----------
<S>                      <C>        <C>       <C>        <C>        <C>              <C>
Glacier                  $162,723   170,713    (7,990)       -5%       $145,377         17,346
Mountain West              71,702    72,584      (882)       -1%         61,896          9,806
First Security             78,345    85,646    (7,301)       -9%         51,110         27,235
1st Bank                   46,455    50,723    (4,268)       -8%         17,575         28,880
Western                    48,946    55,714    (6,768)      -12%         33,679         15,267
Big Sky                    28,903    33,147    (4,244)      -13%         25,569          3,334
Valley                     24,625    25,802    (1,177)       -5%         15,938          8,687
First National             27,320        --    27,320       n/m          16,803         10,517
Citizens                   29,253    28,633       620         2%         22,872          6,381
First Bank-MT               7,650     7,251       399         6%          3,777          3,873
San Juans                  14,189    12,204     1,985        16%         12,439          1,750
                         --------   -------    ------                  --------        -------
   Total                 $540,111   542,417    (2,306)        0%       $407,035        133,076
                         ========   =======    ======                  ========        =======
</TABLE>

n/m - not measurable

CREDIT RISK MANAGEMENT

The Company's credit risk management includes stringent credit policies,
concentration limits, individual loan approval limits and committee approval of
larger loan requests. Management practices also include regular internal and
external credit examinations and an independent stress testing of the land
acquisition/development and commercial real estate portfolios. On a quarterly
basis, both the Banks and parent company management review loans experiencing
deterioration of credit quality, including a review of the acquisition and
development loans, and spec/pre-sold home loans. A review of loans by
concentration limits is performed on a quarterly basis. Federal and state
regulatory safety and soundness examinations are conducted annually at Glacier,
Mountain West, First Security, 1st Bank and Western and every eighteen months
for all other bank subsidiaries.

LOAN APPROVAL LIMITS

Individual loan approval limits have been established for each lender based on
the loan types and experience of the individual. Each bank subsidiary has an
Officer Loan Committee consisting of senior lenders and members of senior
management. The Officer Loan Committee for each bank has approval authority up
to its respective bank's Board of Directors loan approval authority. The Banks'
Board of Directors approval authority is $1,000,000 at First National and
$2,000,000 at all other banks. Loans over these limits up to $10,000,000 are
subject to approval by the Executive Loan Committee consisting of the Banks'
senior loan officers and the Company's Credit Administrator. Loans greater than
$10,000,000 are subject to approval by the Company's Board of Directors. Under
banking laws, loans to one borrower and related entities are limited to a set
percentage of the unimpaired capital and surplus of each bank subsidiary.

LOAN PURCHASES AND SALES

Fixed-rate, long-term mortgage loans are generally sold in the secondary market.
The Company is active in the secondary market, primarily through the origination
of conventional, FHA and VA residential mortgages. The sale of loans in the
secondary mortgage market reduces the Company's risk of holding long-term,
fixed-rate loans during periods of rising rates. The sale of loans also allows
the Company to make loans during periods when funds are not otherwise available
for lending purposes. In connection with conventional loan sales, the Company
typically sells a majority of mortgage loans originated with servicing released.
The Company has also been very active in generating commercial SBA loans, and
other commercial loans, with a portion of those loans sold to investors. As of
December 31, 2009, loans serviced for others aggregated approximately $176
million. The Company has not originated any type of subprime mortgages, either
for the loan portfolio or for sale to investors. In addition, the Company has
not purchased securities that were collateralized with subprime mortgages. The
Company has not purchased loans outside the Company or originate loans outside
the existing geographic market area.

LOAN ORIGINATION AND OTHER FEES

In addition to interest earned on loans, the Company receives fees for
originating loans. Loan fees generally are a percentage of the principal amount
of the loan and are charged to the borrower, and are normally deducted from the
proceeds of the loan. Loan origination fees are generally 1.0 percent to 1.5
percent on residential mortgages and .5 percent to 1.5 percent on commercial
loans. Consumer loans require a flat fee as well as a minimum interest amount.
The Company also receives other fees and charges relating to existing loans,
which include charges and fees collected in connection with loan modifications.


                                       17
<PAGE>

NON-PERFORMING LOANS AND REAL ESTATE OWNED

Loans are designated non-accrual and the accrual of interest is discontinued
when the collection of the contractual principal or interest is unlikely. The
Company typically places loans on non-accrual when principal or interest is due
and has remained unpaid for ninety days or more unless the loan is in process of
collection and well-secured by collateral the fair value of which is sufficient
to pay off the debt in full. When a loan is placed on non-accrual status,
interest previously accrued but not collected is reversed against current period
interest income. Subsequent payments are applied to the outstanding principal
balance if doubt remains as to the ultimate collectability of the loan. Interest
accruals are resumed on such loans only when they are brought fully current with
respect to interest and principal and when, in the judgment of management, the
loans are estimated to be fully collectible as to both principal and interest.

The following tables set forth information regarding non-performing assets at
the dates indicated, including breakouts by regulatory and bank subsidiary
classification:

<TABLE>
<CAPTION>
                                                AT           At          At           At          At
         (Dollars in thousands)             12/31/2009   12/31/2008  12/31/2007   12/31/2006  12/31/2005
         ----------------------            -----------  -----------  ----------  -----------  ----------
<S>                                        <C>          <C>          <C>         <C>          <C>
NON-ACCRUAL LOANS:
   Residential real estate                  $ 20,093      $ 3,575     $   934      $1,806       $   726
   Commercial                                168,328       58,454       7,192       3,721         4,045
   Consumer and other                          9,860        2,272         434         538           481
                                            --------      -------     -------      ------       -------
      Total                                  198,281       64,301       8,560       6,065         5,252
                                            --------      -------     -------      ------       -------
ACCRUING LOANS 90 DAYS OR MORE OVERDUE:
   Residential real estate                     1,965        4,103         840         554         1,659
   Commercial                                  1,311        2,897       1,216         638         2,199
   Consumer and other                          2,261        1,613         629         153           647
                                            --------      -------     -------      ------       -------
      Total                                    5,537        8,613       2,685       1,345         4,505
                                            --------      -------     -------      ------       -------
REAL ESTATE AND OTHER ASSETS OWNED            57,320       11,539       2,043       1,484           332
                                            --------      -------     -------      ------       -------
      Total non-performing loans and real
         estate and other assets owned       261,138       84,453      13,288       8,894        10,089
                                            --------      -------     -------      ------       -------
As a percentage of total bank assets            4.13%        1.46%       0.27%       0.19%         0.26%
                                            --------      -------     -------      ------       -------
Interest income (1)                         $ 11,730      $ 4,434     $   683      $  462       $   359
                                            --------      -------     -------      ------       -------
</TABLE>

(1)  Amount of interest that would have been recorded on loans accounted for on
     a non-accrual basis as of the end of each period if such loans had been
     current for the entire period.


                                       18

<PAGE>

<TABLE>
<CAPTION>
                                      Non-Performing
                                  Assets, Net of Gov't.
                                 Guarantees by Loan Type      Non-        Accruing        Other
                                       December 31,         Accruing      Loans 90     Real Estate
                                 -----------------------      Loans     Days or More      Owned
     (Dollars in thousands)           2009      2008       12/31/2009    12/31/2009     12/31/2009
     ----------------------         --------   ------      ----------   ------------   -----------
<S>                              <C>           <C>         <C>          <C>            <C>
Custom and owner
   occupied construction            $  3,281      451          2,499           --            782
Pre-sold and spec construction        29,580   21,903         20,849          420          8,311
Land development                      88,488   23,597         70,277           --         18,211
Consumer land or lots                 10,120    1,511          6,161           54          3,905
Unimproved land                       32,453    8,920         20,303          135         12,015
Developed lots for operative
   builders                           11,565    5,567          6,350          114          5,101
Commercial lots                          909      280            909           --             --
Other construction                        --    2,668             --           --             --
Commercial real estate                32,300    3,391         29,859          144          2,297
Commercial and industrial             12,271    6,983         11,669          565             37
1-4 family                            30,868    6,666         22,596        2,750          5,522
Home equity lines of credit            6,234    1,807          4,711        1,183            340
Consumer                               1,042      602            476          172            394
Other                                  2,027      107          1,622           --            405
                                    --------   ------        -------        -----         ------
   Total                            $261,138   84,453        198,281        5,537         57,320
                                    ========   ======        =======        =====         ======
</TABLE>

<TABLE>
<CAPTION>
                          Accruing 30 - 89
                          Days Delinquent
                           Loans and Non-
                         Performing Assets,
                           Net of Gov't.
                         Guarantees by Bank    Accruing     Non-Accrual and       Other
                            December 31,      30-89 Days   Accruing Loans 90   Real Estate
                         ------------------   Delinquent      Days or More        Owned
(Dollars in thousands)     2009       2008    12/31/2009       12/31/2009       12/31/2009
----------------------   --------   -------   ----------   -----------------   -----------
<S>                      <C>        <C>       <C>          <C>                 <C>
Glacier                  $ 97,666    41,691     18,677           72,157            6,832
Mountain West             109,187    41,415     32,506           62,855           13,826
First Security             59,351    18,793     14,934           31,665           12,752
1st Bank                   21,117    14,355      4,210            7,673            9,234
Western                     9,315     3,364      1,796            3,295            4,224
Big Sky                    31,711    10,978      5,280           17,908            8,523
Valley                      2,542     2,855      1,783              679               80
First National              9,290        --      5,744            3,407              139
Citizens                    5,340     5,080      1,910            1,873            1,557
First Bank - MT               800       563        608               39              153
San Juans                   2,310       146         43            2,267               --
                         --------   -------     ------          -------           ------
   Total                 $348,629   139,240     87,491          203,818           57,320
                         ========   =======     ======          =======           ======
</TABLE>

Non-performing assets as a percentage of the Bank's total assets at December 31,
2009 were at 4.13 percent, up from 1.46 percent as of December 31, 2008. The
allowance for loan and lease losses ("ALLL" or "allowance") was 55 percent of
non-performing assets at December 31, 2009, down from 91 percent for the prior
year end. The Company increased the provision for loan loss from $28.5 million
in 2008 to $124.6 million in 2009 resulting in a significant increase in the
ALLL. Such increase was outpaced by the increase in non-performing assets,
resulting in a decrease in the ALLL as a percentage of non-performing assets.
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 where appropriate, the Company believes the value of the underlying
real estate collateral is adequate to minimize significant charge-offs or loss
to the Company. Each bank subsidiary 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. Through pro-active credit administration, the
Banks work closely with borrowers to seek favorable resolution to the extent
possible, thereby attempting to minimize net charge-offs or losses to the
Company.


                                       19

<PAGE>

A loan is considered 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. The amount of the impairment is measured using cash flows discounted
at the loan's effective interest rate, except when it is determined that
repayment of the loan is expected to be provided solely by the underlying
collateral. For collateral dependent loans, impairment is measured by the fair
value of the collateral less the cost to sell. When the ultimate collectability
of the total principal of an impaired loan is in doubt and is 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. Total interest income
recognized for impaired loans under the cash basis for the years ended December
31, 2009 and 2008 was not significant. Impaired loans, net of government
guaranteed amounts, were $218.7 million and $79.9 million as of December 31,
2009 and 2008, respectively. The ALLL includes valuation allowances of $19.8
million and $8.0 million specific to impaired loans as of December 31, 2009 and
2008, respectively. The Company's troubled debt restructuring loans are included
in the impaired loans amount. As of December 31, 2009, the Company had troubled
debt restructuring loans of $64.6 million, of which there were $1.2 million of
additional outstanding commitments.

The combined total of lot acquisition loans to borrowers who intend to construct
a primary residence on the lot, and other construction and land acquisition and
development loans is $883 million and represents 21.4 percent of the total loans
as of December 31, 2009. At December 31, 2008, the comparable total was $1.103
billion, or 26.7 percent of total loans. Outstanding balances are centered in
Western Montana, and Northern Idaho as well as Boise, Ketchum and Sun Valley
Idaho.

Property acquired by foreclosure or deed-in-lieu of foreclosure is carried at
the lower of fair value at acquisition date or current estimated fair value,
less selling costs. Costs, excluding interest, relating to the improvement of
property are capitalized, whereas those relating to holding the property are
charged to expense. Fair value is determined as the amount that could be
reasonably expected in a current sale (other than a forced or liquidation sale)
between a willing buyer and a willing seller. If the fair value of the asset
minus the estimated cost to sell is less than the cost of the property, a loss
is recognized in other expenses and the asset carrying value is reduced. Any
gain or loss on disposition of real estate owned is recorded in other income or
other expense. The following table sets forth the changes in real estate and
other assets owned for the years ended December 31, 2009 and 2008:

<TABLE>
<CAPTION>
                                    Years ended
                                    December 31,
                                 -----------------
    (Dollars in thousands)         2009      2008
    ----------------------       --------   ------
<S>                              <C>        <C>
Balance at beginning of period   $ 11,539    2,043
   Additions                       71,967   16,661
   Capital improvments              2,403      188
   Sales and write-downs          (28,589)  (7,353)
                                 --------   ------
Balance at end of period         $ 57,320   11,539
                                 ========   ======
</TABLE>

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 each bank subsidiary's loan and lease portfolios. Accordingly, the
ALLL is maintained within a range of estimated losses. The determination of the
ALLL and the related provision for loan losses 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 and lease portfolios, economic conditions nationally
and in the local markets in which the community bank subsidiaries operate,
changes in collateral values, delinquencies, non-performing assets and net
charge-offs. Although the Company and the Banks continue to actively monitor
economic trends, a softening of economic conditions combined with declines in
the values of real estate that collateralize most of the Company's loan and
lease portfolios may adversely affect the credit risk and potential for loss to
the Company.

The ALLL evaluation is well documented and approved by each bank subsidiary's
Board of Directors and reviewed by the parent company's Board of Directors. In
addition, the policy and procedures for determining the balance of the ALLL are
reviewed annually by each bank subsidiary's Board of Directors, the parent
company's Board of Directors, independent credit reviewer and state and federal
bank regulatory agencies.

At the end of each quarter, each of the community bank subsidiaries analyzes its
loan and lease portfolio and maintain an ALLL at a level that is appropriate and
determined in accordance with accounting principles generally accepted in the
United States of America. The ALLL balance covers estimated credit losses on
individually evaluated loans, including those which are determined to be
impaired, as well as estimated credit losses inherent in the remainder of the
loan and lease portfolios. Each of the Bank's ALLL is considered adequate to
absorb losses from any segment of its loan and lease portfolio.


                                       20

<PAGE>

The Company is committed to a conservative management of the credit risk within
the loan and lease portfolios, 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 and lease portfolios, semi-annual review of loans by industry, and
periodic stress testing of the loans secured by real estate.

The Company's model of eleven wholly-owned, independent community banks, each
with its own loan committee, chief credit officer and Board of Directors,
provides substantial local oversight to the lending and credit management
function. Unlike a traditional, single-bank holding company, the Company's
decentralized 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 and the community bank subsidiaries operate further mitigates the
risk of credit loss. While this process is intended to limit credit exposure,
there can be no assurance that problem credits will not arise and 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, utilizing each of the Banks' internal credit risk rating process, 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 $142.9 million adequate to cover
inherent losses in the loan and lease portfolios as of December 31, 2009.
However, no assurance can be given that the Company will not, in any particular
period, sustain losses that are significant relative to the amount reserved, or
that subsequent evaluations of the loan and lease portfolios 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 I - Item 1A - Risk Factors.

LOAN LOSS EXPERIENCE

The following tables set forth information regarding the Banks' loan loss
experience for the periods indicated:

<TABLE>
<CAPTION>
                                                      Years ended December 31,
                                           --------------------------------------------
         (Dollars in thousands)              2009      2008     2007     2006     2005
         ----------------------            --------   ------   ------   ------   ------
<S>                                        <C>        <C>      <C>      <C>      <C>
BALANCE AT BEGINNING OF PERIOD             $ 76,739   54,413   49,259   38,655   26,492
   CHARGE-OFFS:
      Residential real estate               (18,854)  (3,233)    (306)     (14)    (115)
      Commercial loans                      (35,077)  (4,957)  (2,367)  (1,187)    (744)
      Consumer and other loans               (6,965)  (1,649)    (714)    (448)    (539)
                                           --------   ------   ------   ------   ------
         Total charge offs                  (60,896)  (9,839)  (3,387)  (1,649)  (1,398)
                                           --------   ------   ------   ------   ------
   RECOVERIES:
      Residential real estate                   423       23      208      341       82
      Commercial loans                        1,636      716      656      331      414
      Consumer and other loans                  407      321      358      298      415
                                           --------   ------   ------   ------   ------
         Total recoveries                     2,466    1,060    1,222      970      911
                                           --------   ------   ------   ------   ------
   CHARGE-OFFS, NET OF RECOVERIES           (58,430)  (8,779)  (2,165)    (679)    (487)
   Acquisitions (1)                              --    2,625      639    6,091    6,627
   PROVISION FOR LOAN LOSSES                124,618   28,480    6,680    5,192    6,023
                                           --------   ------   ------   ------   ------
BALANCE AT END OF PERIOD                   $142,927   76,739   54,413   49,259   38,655
                                           ========   ======   ======   ======   ======
Ratio of net charge-offs to average
   loans outstanding during the period         1.41%    0.23%    0.06%    0.02%    0.02%
Allowance for loan and lease losses as a
   percentage of total loan and leases         3.46%    1.86%    1.51%    1.53%    1.59%
</TABLE>

(1)  Acquisition of San Juans in 2008, North Side in 2007, CDC and Morgan in
     2006, First State Bank, Citizens and 1st Bank in 2005


                                       21
<PAGE>

<TABLE>
<CAPTION>
                         Allowance for Loan                   Provision
                          and Lease Losses     Provision      for Year          ALLL
                            December 31,       for Year    Ended 12/31/09   as a Percent
                         ------------------     Ended         Over Net        of Loans
(Dollars in thousands)      2009      2008    12/31/2009     Charge-Offs     12/31/2009
----------------------    --------   ------   ----------   --------------   ------------
<S>                      <C>         <C>      <C>          <C>              <C>
Glacier                   $ 38,978   18,990      32,000           2.7           4.14%
Mountain West               37,551   15,982      50,500           1.7           3.92%
First Security              18,242   11,537      10,450           2.8           3.22%
1st Bank                    10,895    6,012      10,800           1.8           3.67%
Western                      8,762    7,062       3,200           2.1           2.71%
Big Sky                     10,536    6,232       9,200           1.9           3.89%
Valley                       4,367    3,581       1,200           2.9           2.33%
First National               1,679       --       1,683         420.8           1.10%
Citizens                     4,865    2,721       2,800           4.3           2.93%
First Bank - MT              2,904    1,945         985          37.9           2.48%
San Juans                    4,148    2,677       1,800           5.5           2.78%
                          --------   ------     -------
   Total                  $142,927   76,739     124,618           2.1           3.46%
                          ========   ======     =======
</TABLE>

<TABLE>
<CAPTION>
                               Net
                           Charge-Offs,
                           Year-to-Date
                          Period Ending
                            Year Ended
                           December 31,
                         ---------------   Charge-Offs   Recoveries
(Dollars in thousands)     2009    2008     12/31/2009   12/31/2009
----------------------   -------   -----   -----------   ----------
<S>                      <C>       <C>     <C>           <C>
Glacier                  $12,012   1,121      12,117          105
Mountain West             28,931   5,557      29,766          835
First Security             3,745     425       3,931          186
1st Bank                   5,917     347       6,215          298
Western                    1,500     282       1,896          396
Big Sky                    4,896     600       5,433          537
Valley                       414     127         457           43
First National                 4      --           4           --
Citizens                     656     302         683           27
First Bank-MT                 26      17          57           31
San Juans                    329       1         337            8
                         -------   -----      ------        -----
   Total                 $58,430   8,779      60,896        2,466
                         =======   =====      ======        =====
</TABLE>

ALLOCATION OF THE ALLOWANCE FOR LOAN AND LEASE LOSSES

<TABLE>
<CAPTION>
                                      2009                         2008                         2007
                           --------------------------   --------------------------   --------------------------
                             ALLOWANCE      PERCENT       Allowance      Percent       Allowance      Percent
                           FOR LOAN AND   OF LOANS IN   for Loan and   of Loans in   for Loan and   of Loans in
 (Dollars in thousands)    LEASE LOSSES     CATEGORY    Lease Losses     Category    Lease Losses     Category
 ----------------------    ------------   -----------   ------------   -----------   ------------   -----------
<S>                        <C>            <C>           <C>            <C>           <C>            <C>
Residential real estate      $ 13,496         19.6%          7,233         20.3%          4,755         20.2%
Commercial real estate         66,791         45.9%         35,305         46.8%         23,010         44.6%
Other commercial               39,558         17.5%         21,590         15.6%         17,453         17.6%
Consumer and other loans       23,082         17.0%         12,611         17.3%          9,195         17.6%
                             --------        -----          ------        -----          ------        -----
   Totals                    $142,927        100.0%         76,739        100.0%         54,413        100.0%
                             ========        =====          ======        =====          ======        =====

<CAPTION>
                                      2006                         2005
                           --------------------------   --------------------------
                             Allowance      Percent       Allowance      Percent
                           for Loan and   of Loans in   for Loan and   of Loans in
 (Dollars in thousands)    Lease Losses     Category    Lease Losses     Category
 ----------------------    ------------   -----------   ------------   -----------
<S>                        <C>            <C>           <C>            <C>
Residential real estate        5,421          24.6%         4,318           25.0%
Commercial real estate        16,741          36.1%        14,370           38.3%
Other commercial              18,361          21.5%        12,566           17.4%
Consumer and other loans       8,736          17.8%         7,401           19.3%
                              ------         -----         ------          -----
   Totals                     49,259         100.0%        38,655          100.0%
                              ======         =====         ======          =====
</TABLE>


                                       22

<PAGE>

The increase in the ALLL was primarily due to the increase in non-performing
assets since December 31, 2008 and a downturn in global, national and local
economies. The ALLL has increased $66.2 million, or 86 percent, from a year ago.
The ALLL of $142.9 million is 3.46 percent of December 31, 2009 total loans
outstanding, up from 1.86 percent at prior year end. The provision for loan
losses expense was $124.6 million, an increase of $96.1 million from 2008. Net
loans and lease charge-offs were $58.4 million, or 1.41 percent of average loans
and leases in 2009, compared to net charge-offs of $8.8 million, or 0.23 percent
of average loans and leases in 2008. Each of the Banks' charge-off policy is
consistent with bank regulatory standards. Consumer loans are generally charged
off when the loan becomes over 120 days delinquent. Loan portfolio growth,
composition, average loan size, credit quality considerations, and other
environmental factors will continue to determine the level of additional
provision expense.

For additional information regarding the ALLL, its relation to the provision for
loan losses and risk related to asset quality, see Note 4 to the Consolidated
Financial Statements in "Item 8 - Financial Statements and Supplementary Data."

                                SOURCES OF FUNDS

GENERAL

Deposits obtained through the Banks have traditionally been the principal source
of funds for use in lending and other business purposes. Currently, the Banks
have 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 regular statement savings,
interest-bearing checking, money market deposit accounts, and fixed rate
certificates of deposit with maturities ranging form three months to five years,
negotiated-rate jumbo certificates, non-interest demand accounts, and individual
retirement accounts. In addition, the Banks obtain wholesale deposits through
various programs including the Certificate of Deposit Account Registry System
("CDARS").

The Banks also obtain funds from loan repayments, advances from the FHLB,
borrowings through the FRB, borrowings from the U.S. Treasury Tax and Loan
funds, repurchase agreements, and loan sales. 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. They also may be used on a long-term basis to support expanded
activities and to match maturities of longer-term assets.

DEPOSITS

Deposits are obtained primarily from individual and business residents of the
Banks' market area. The Banks issue negotiated-rate certificate of deposits
accounts and have paid a limited amount of fees to brokers to obtain deposits.
The following table illustrates the amounts outstanding for deposits $100,000
and greater, according to the time remaining to maturity, of which $224 million
consists of CDARS deposits.

<TABLE>
<CAPTION>
                                      Certificate     Demand
      (Dollars in thousands)          of Deposits    Deposits     Totals
      ----------------------          -----------   ---------   ---------
<S>                                   <C>           <C>         <C>
Within three months ...............     $231,811    1,586,604   1,818,415
Three months to six months ........      144,914           --     144,914
Seven months to twelve months .....      260,038           --     260,038
Over twelve months ................       92,383           --      92,383
                                        --------    ---------   ---------
   Totals .........................     $729,146    1,586,604   2,315,750
                                        ========    =========   =========
</TABLE>

For additional deposit information, see "Item 7 - Management's Discussion &
Analysis" and Note 7 to the Consolidated Financial Statements in "Item 8 --
Financial Statements and Supplementary Data".


                                       23

<PAGE>

ADVANCES AND OTHER BORROWINGS

As members of the FHLB, the Banks may borrow from such entity on the security of
FHLB stock, which the Banks are required to own as a member. The borrowings are
collateralized by eligible categories of loans and investment securities
(principally, securities which are obligations of, or guaranteed by, the United
States and its agencies), provided certain standards related to
credit-worthiness have been met. Advances are made pursuant to several different
credit programs, each of which has its own interest rate and range of
maturities. Depending on the program, limitations on the amount of advances are
based either on a fixed percentage of an institution's total assets or on the
FHLB's assessment of the institution's credit-worthiness. FHLB advances have
been used from time to time to meet seasonal and other withdrawals of deposits
and to expand lending by matching a portion of the estimated amortization and
prepayments of retained fixed rate mortgages. All bank subsidiaries, except San
Juans, are members of the FHLB of Seattle; however, San Juans is a member of the
FHLB of Topeka.

The Banks also borrow funds from the FRB and from the U.S. Treasury Tax and Loan
program. Both programs require pledging of certain loans or investment
securities of the Banks and are generally short term obligations.

From time to time, primarily as a short-term financing arrangement for
investment or liquidity purposes, the Banks have made use of repurchase
agreements. This process involves the "selling" of one or more of the securities
in the Banks' portfolio and by entering into an agreement to "repurchase" that
same security at an agreed upon later date. A rate of interest is paid for the
subject period of time. In addition, although the Banks have offered retail
repurchase agreements to its retail customers, the Government Securities Act of
1986 imposed confirmation and other requirements which generally made it
impractical for financial institutions to offer such investments on a broad
basis. Through policies adopted by each of the bank's Board of Directors, the
Banks enter into repurchase agreements with local municipalities, and certain
customers, and have adopted procedures designed to ensure proper transfer of
title and safekeeping of the underlying securities.

The following chart illustrates the average balances and the maximum outstanding
month-end balances for FHLB advances, repurchase agreements, U.S. Treasury Tax
and Loan borrowings, and FRB borrowings:

<TABLE>
<CAPTION>
                                                   Years ended December 31,
                                                ------------------------------
           (Dollars in thousands)                  2009        2008      2007
           ----------------------               ----------   -------   -------
<S>                                             <C>          <C>       <C>
FHLB advances:
   Amount outstanding at end of period ......   $  790,367   338,456   538,949
   Average balance ..........................   $  473,038   566,933   382,243
   Maximum outstanding at any month-end .....   $  790,367   822,107   538,949
   Weighted average interest rate ...........         1.68%     2.71%     4.94%
Repurchase agreements:
   Amount outstanding at end of period ......   $  212,506   188,363   178,041
   Average balance ..........................   $  204,503   188,952   171,290
   Maximum outstanding at any month-end .....   $  234,914   196,461   193,421
   Weighted average interest rate ...........         0.98%     2.02%     4.35%
U.S. Treasury Tax and Loan:
   Amount outstanding at end of period ......   $    5,136     6,067   221,409
   Average balance ..........................   $    3,686   165,690   120,188
   Maximum outstanding at any month-end .....   $    5,136   385,246   244,012
   Weighted average interest rate ...........         0.00%     2.28%     5.03%
Federal Reserve Bank discount window:
   Amount outstanding at end of period ......   $  225,000   914,000        --
   Average balance ..........................   $  658,262   277,611        --
   Maximum outstanding at any month-end .....   $1,005,000   928,000        --
   Weighted average interest rate ...........         0.26%     1.76%       --
</TABLE>

For additional information concerning the Company's borrowings and repurchase
agreements, see Notes 8 and 9 to the Consolidated Financial Statements in "Item
8 -- Financial Statements and Supplementary Data".


                                       24

<PAGE>

SUBORDINATED DEBENTURES

In addition to funds obtained in the ordinary course of business, the Company
formed Glacier Trust II, Glacier Trust III, and Glacier Trust IV as financing
subsidiaries and obtained Citizens Trust I in connection with the acquisition of
Citizens on April 1, 2005, San Juans Trust I in connection with the acquisition
of San Juans on December 1, 2008, and First Co Trust 01 and First Co Trust 03 in
connection with the acquisition of First National on October 2, 2009. The trusts
issued preferred securities that entitle the shareholder to receive cumulative
cash distributions from payments thereon. The Subordinated Debentures
outstanding as of December 31, 2009 are $124,988,000, including fair value
adjustments from acquisitions. For additional information regarding the
subordinated debentures, see Note 10 to the Consolidated Financial Statements
"Item 8 - Financial Statements and Supplementary Data".

                                    EMPLOYEES

As of December 31, 2009, the Company employed 1,739 persons, 1,497 of whom were
full time, none of whom were represented by a collective bargaining group. The
Company provides its employees with a comprehensive benefit program, including
medical insurance, dental plan, life and accident insurance, long-term
disability coverage, sick leave, profit sharing plan, savings plan and employee
stock options. The Company considers its employee relations to be excellent. See
Note 13 in the Consolidated Financial Statements in "Item 8 - Financial
Statements and Supplementary Data" for detailed information regarding employee
benefit plans and eligibility.

                           SUPERVISION AND REGULATION

INTRODUCTION

The following discussion provides an overview of certain elements of the
extensive regulatory framework applicable to the Company and the Banks. This
regulatory framework is primarily designed for the protection of depositors,
federal deposit insurance funds and the banking system as a whole, rather than
specifically for the protection of shareholders. Due to the breadth and growth
of this regulatory framework, the costs of compliance continue to increase in
order to monitor and satisfy these requirements.

To the extent that this section describes statutory and regulatory provisions,
it is qualified by reference to those provisions. These statutes and
regulations, as well as related policies, are subject to change by Congress,
state legislatures and federal and state regulators. Changes in statutes,
regulations or regulatory policies applicable to the Company, including the
interpretation or implementation thereof, could have a material effect on the
Company's business or operations. Recently, in light of the recent financial
crisis, numerous proposals to modify or expand banking regulation have surfaced.
Based on past history, if any are approved, they will add to the complexity and
cost of the Company's business.

BANK HOLDING COMPANY REGULATION

General. The Company is a bank holding company as defined in the Bank Holding
Company Act of 1956, as amended ("BHCA"), due to its ownership of the bank
subsidiaries listed below. Glacier, First Security, Western, Big Sky, Valley,
and First Bank-MT are Montana state-chartered banks and are members of the
Federal Reserve System; Mountain West and Citizens are Idaho state-chartered
banks; 1st Bank is a Wyoming state-chartered bank and is a member of the Federal
Reserve System; First National is a nationally chartered bank and is a member of
the Federal Reserve System; and San Juans is a Colorado state-chartered bank.
The deposits of the Banks are insured by the FDIC.

As a bank holding company, the Company is subject to regulation, supervision and
examination by the Federal Reserve. In general, the BHCA limits the business of
bank holding companies to owning or controlling banks and engaging in other
activities closely related to banking. The Company must also file reports with
and provide additional information to the Federal Reserve. Under the Financial
Services Modernization Act of 1999, a bank holding company may apply to the
Federal Reserve to become a financial holding company, and thereby engage
(directly or through a subsidiary) in certain expanded activities deemed
financial in nature, such as securities brokerage and insurance underwriting.

Holding Company Bank Ownership. The BHCA requires every bank holding company to
obtain the prior approval of the Federal Reserve before (i) acquiring, directly
or indirectly, ownership or control of any voting shares of another bank or bank
holding company if, after such acquisition, it would own or control more than 5%
of such shares; (ii) acquiring all or substantially all of the assets of another
bank or bank holding company; or (iii) merging or consolidating with another
bank holding company.


                                       25

<PAGE>

Holding Company Control of Nonbanks. With some exceptions, the BHCA also
prohibits a bank holding company from acquiring or retaining direct or indirect
ownership or control of more than 5% of the voting shares of any company that is
not a bank or bank holding company, or from engaging directly or indirectly in
activities other than those of banking, managing or controlling banks or
providing services for its subsidiaries. The principal exceptions to these
prohibitions involve certain non-bank activities that, by federal statute,
agency regulation or order, have been identified as activities closely related
to the business of banking or of managing or controlling banks.

Transactions with Affiliates.

Bank subsidiaries of a bank holding company are subject to restrictions imposed
by the Federal Reserve Act on extensions of credit to the holding company or its
subsidiaries, on investments in their securities, and on the use of their
securities as collateral for loans to any borrower. These regulations and
restrictions may limit the Company's ability to obtain funds from the bank
subsidiaries for its cash needs, including funds for payment of dividends,
interest and operational expenses.

Tying Arrangements. The Company is prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit, sale or lease of
property or furnishing of services. For example, with certain exceptions,
neither the Company nor the Banks may condition an extension of credit to a
customer on either (i) a requirement that the customer obtain additional
services provided by the Company or Banks; or (ii) an agreement by the customer
to refrain from obtaining other services from a competitor.

Support of Bank Subsidiaries. Under Federal Reserve policy, the Company is
expected to act as a source of financial and managerial strength to its banks.
This means that the Company is required to commit, as necessary, resources to
support the Banks. Any capital loans a bank holding company makes to its bank
subsidiaries are subordinate to deposits and to certain other indebtedness of
those bank subsidiaries.

State Law Restrictions. As a Montana corporation, the Company is subject to
certain limitations and restrictions under applicable Montana corporate law. For
example, state law restrictions in Montana include limitations and restrictions
relating to indemnification of directors, distributions to shareholders,
transactions involving directors, officers or interested shareholders,
maintenance of books, records and minutes, and observance of certain corporate
formalities.

THE BANK SUBSIDIARIES

Glacier, First Security, Western, Big Sky, Valley, and First Bank-MT are subject
to regulation and supervision by the Montana Department of Administration's
Banking and Financial Institutions Division and the Federal Reserve as a result
of their membership in the Federal Reserve System.

Mountain West and Citizens are subject to regulation by the Idaho Department of
Finance and by the FDIC. In addition, Mountain West's Utah and Washington
branches are primarily regulated by the Utah Department of Financial
Institutions and the Washington Department of Financial Institutions,
respectively.

1st Bank is a member of the Federal Reserve System and is subject to regulation
and supervision by the Federal Reserve and also the Wyoming Division of Banking
as a Wyoming state chartered bank. First National is a member of the Federal
Reserve System and is subject to regulation and supervision by the Federal
Reserve and also the Office of Comptroller of the Currency ("OCC") as a
nationally chartered bank, and to a certain extent, by the Wyoming Division of
Banking.

San Juans is subject to regulation by the Colorado Department of Regulatory
Agencies-Division of Banking and by the FDIC.

The federal laws that apply to the Banks regulate, among other things, the scope
of their business, their investments, their reserves against deposits, the
timing of the availability of deposited funds, and the nature, amount of, and
collateral for loans. Federal laws also regulate community reinvestment and
insider credit transactions and impose safety and soundness standards.

Community Reinvestment. The Community Reinvestment Act of 1977 requires that, in
connection with examinations of financial institutions within their
jurisdiction, federal bank regulators must evaluate the record of financial
institutions in meeting the credit needs of their local communities, including
low and moderate-income neighborhoods, consistent with the safe and sound
operation of those banks. A bank's community reinvestment record is also
considered by the applicable banking agencies in evaluating mergers,
acquisitions, and applications to open a branch or facility.


                                       26

<PAGE>

Insider Credit Transactions. Banks are also subject to certain restrictions on
extensions of credit to executive officers, directors, principal shareholders,
and their related interests. Extensions of credit (i) must be made on
substantially the same terms, including interest rates and collateral, and
follow credit underwriting procedures that are at least as stringent, as those
prevailing at the time for comparable transactions with persons not covered
above and who are not employees; and (ii) must not involve more than the normal
risk of repayment or present other unfavorable features. Banks are also subject
to certain lending limits and restrictions on overdrafts to insiders. A
violation of these restrictions may result in the assessment of substantial
civil monetary penalties, the imposition of a cease and desist order, and other
regulatory sanctions.

Regulation of Management. Federal law (i) sets forth circumstances under which
officers or directors of a bank may be removed by the institution's federal
supervisory agency; (ii) places restraints on lending by a bank to its executive
officers, directors, principal shareholders, and their related interests; and
(iii) prohibits management personnel of a bank from serving as a director or in
other management positions of another financial institution whose assets exceed
a specified amount or which has an office within a specified geographic area.

Safety and Soundness Standards. Federal law imposes upon banks certain
non-capital safety and soundness standards. These standards cover, among other
things, internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, fees and benefits, such other operational and managerial standards
as the agency determines to be appropriate, and standards for asset quality,
earnings and stock valuation. An institution that fails to meet these standards
must develop a plan acceptable to its regulators, specifying the steps that the
institution will take to meet the standards. Failure to submit or implement such
a plan may subject the institution to regulatory sanctions.

INTERSTATE BANKING AND BRANCHING

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Act") relaxed prior interstate branching restrictions under federal
law by permitting nationwide interstate banking and branching under certain
circumstances. Generally, bank holding companies may purchase banks in any state
and states may not prohibit these purchases. Additionally, banks are permitted
to merge with banks in other states as long as the home state of neither merging
bank has opted out under the legislation. The Interstate Act requires regulators
to consult with community organizations before permitting an interstate
institution to close a branch in a low-income area. Federal bank regulations
prohibit banks from using their interstate branches primarily for deposit
production and federal bank regulatory agencies have implemented a
loan-to-deposit ratio screen to ensure compliance with this prohibition.

With regard to interstate bank mergers, Montana "opted-out" of the Interstate
Act. Subject to certain conditions, an in-state bank that has been in existence
for at least 5 years may merge with an out-of-state bank. Banks, bank holding
companies, and their respective subsidiaries cannot acquire control of a bank
located in Montana if, after the acquisition, the acquiring institution,
together with its affiliates, would directly or indirectly control more than 22%
of the total deposits of insured depository institutions and credit unions
located in Montana. Montana law does not authorize the establishment of a branch
bank in Montana by an out-of-state bank.

Idaho has enacted "opting in" legislation in accordance with the Interstate Act
provisions allowing banks to engage in interstate merger transactions subject to
certain "aging" requirements. Branches may not be acquired or opened separately
in Idaho by an out-of-state bank, but once an out-of-state bank has acquired a
bank within Idaho, either through merger or acquisition of all or substantially
all of the bank's assets, the out-of-state bank may open additional branches
within Idaho.

Under Wyoming law, banks located in Wyoming may be acquired by out-of-state
banks so long as (i) with certain exceptions, the resulting bank and its
affiliates would not control 30% or more of the total deposits held by all
insured depository institutions in Wyoming; and (ii) the in-state bank has been
in existence for at least three years. Branches may not be acquired or opened
separately in Wyoming by an out-of-state bank, but once an out-of-state bank has
acquired a bank within Wyoming, either through merger or acquisition of all or
substantially all of the bank's assets, the out-of-state bank may open
additional branches within Wyoming.

Under Colorado law, an out-of-state bank holding company may not acquire control
of, or acquire all or substantially all of the assets of, a Colorado bank unless
such bank has been in operation for at least five years. An out-of-state bank
holding company acquiring control of a Colorado bank holding company may acquire
control of any Colorado bank controlled by the Colorado bank holding company
even though such bank has been in operation for less than five years.


                                       27

<PAGE>

Utah and Washington have each enacted "opting in" legislation similar in certain
respects to that enacted by Idaho, allowing banks to engage in interstate merger
transactions subject to certain aging requirements. Under Utah law, an
out-of-state bank may acquire a bank branch located in Utah, but it may not
establish a de novo branch in Utah if its home state does not have reciprocal
laws on de novo branching. Under Washington law, an out-of-state bank may,
subject to the Director's approval, open de novo branches in Washington or
acquire an in-state branch so long as the home state of the out-of-state bank
has reciprocal laws with respect to de novo branching or branch acquisitions.

DIVIDENDS

The principal source of the Company's cash is from dividends received from the
Banks, which are subject to government regulation and limitation. Regulatory
authorities may prohibit banks and bank holding companies from paying dividends
in a manner that would constitute an unsafe or unsound banking practice. In
addition, a bank may not pay cash dividends if that payment could reduce the
amount of its capital below that necessary to meet minimum applicable regulatory
capital requirements. State law and, in the case of First National, national
banking laws and related OCC regulations, limit a bank's ability to pay
dividends that are greater than a certain amount without approval of the
applicable agency. 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.

CAPITAL ADEQUACY

Regulatory Capital Guidelines. Federal bank regulatory agencies use capital
adequacy guidelines in the examination and regulation of bank holding companies
and banks. The guidelines are "risk-based," meaning that they are designed to
make capital requirements more sensitive to differences in risk profiles among
banks and bank holding companies.

Tier I and Tier II Capital. Under the guidelines, an institution's capital is
divided into two broad categories, Tier I capital and Tier II capital. Tier I
capital generally consists of common shareholders' equity, surplus, undivided
profits, and subordinated debentures. Tier II capital generally consists of the
allowance for loan and lease losses, hybrid capital instruments, and
subordinated debt. The sum of Tier I capital and Tier II capital represents an
institution's total capital. The guidelines require that at least 50% of an
institution's total capital consist of Tier I capital.

Risk-based Capital Ratios. The adequacy of an institution's capital is gauged
primarily with reference to the institution's risk-weighted assets. The
guidelines assign risk weightings to an institution's assets in an effort to
quantify the relative risk of each asset and to determine the minimum capital
required to support that risk. An institution's risk-weighted assets are then
compared with its Tier I capital and total capital to arrive at a Tier I
risk-based ratio and a total risk-based ratio, respectively. The guidelines
provide that an institution must have a minimum Tier I risk-based ratio of 4%
and a minimum total risk-based ratio of 8%.

Leverage Ratio. The guidelines also employ a leverage ratio, which is Tier I
capital as a percentage of average total assets, less intangibles. The principal
objective of the leverage ratio is to constrain the maximum degree to which a
bank holding company may leverage its equity capital base. The minimum leverage
ratio is 4%.

Prompt Corrective Action. Under the guidelines, an institution is assigned to
one of five capital categories depending on its total risk-based capital ratio,
Tier I risk-based capital ratio, and leverage ratio, together with certain
subjective factors. The categories range from "well capitalized" to "critically
undercapitalized." Institutions that are "undercapitalized" or lower are subject
to certain mandatory supervisory corrective actions. During these challenging
economic time, the federal banking regulators have actively enforced these
provisions.

REGULATORY OVERSIGHT AND EXAMINATION

The Federal Reserve conducts periodic inspections of bank holding companies,
which are performed both onsite and offsite. The supervisory objectives of the
inspection program are to ascertain whether the financial strength of the bank
holding company is being maintained on an ongoing basis and to determine the
effects or consequences of transactions between a holding company or its
non-banking subsidiaries and its bank subsidiaries. For holding companies under
$10 billion in assets, the inspection type and frequency varies depending on
asset size, complexity of the organization, and the holding company's rating at
its last inspection.


                                       28

<PAGE>

Banks are subject to periodic examinations by their primary regulators. Bank
examinations have evolved from reliance on transaction testing in assessing a
bank's condition to a risk-focused approach. These examinations are extensive
and cover the entire breadth of operations of the bank. Generally, safety and
soundness examinations occur on an 18-month cycle for banks under $500 million
in total assets that are well capitalized and without regulatory issues, and
12-months otherwise. Examinations alternate between the federal and state bank
regulatory agency or may occur on a combined schedule. The frequency of consumer
compliance and CRA examinations is linked to the size of the institution and its
compliance and CRA ratings at its most recent examinations. However, the
examination authority of the Federal Reserve and the FDIC allows them to examine
supervised banks as frequently as deemed necessary based on the condition of the
bank or as a result of certain triggering events.

CORPORATE GOVERNANCE AND ACCOUNTING LEGISLATION

Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 (the "Act")
addresses, among other things, corporate governance, auditing and accounting,
enhanced and timely disclosure of corporate information, and penalties for
non-compliance. Generally, the Act (i) requires chief executive officers and
chief financial officers to certify to the accuracy of periodic reports filed
with the Securities and Exchange Commission (the 'SEC"); (ii) imposes specific
and enhanced corporate disclosure requirements; (iii) accelerates the time frame
for reporting of insider transactions and periodic disclosures by public
companies; (iv) requires companies to adopt and disclose information about
corporate governance practices, including whether or not they have adopted a
code of ethics for senior financial officers and whether the audit committee
includes at least one "audit committee financial expert;" and (v) requires the
SEC, based on certain enumerated factors, to regularly and systematically review
corporate filings.

To deter wrongdoing, the Act: (i) subjects bonuses issued to top executives to
disgorgement if a restatement of a company's financial statements was due to
corporate misconduct; (ii) prohibits an officer or director misleading or
coercing an auditor; (iii) prohibits insider trades during retirement plan
"blackout periods"; (iv) imposes new criminal penalties for fraud and other
wrongful acts; and (v) extends the period during which certain securities fraud
lawsuits can be brought against a company or its officers.

As a publicly reporting company, the Company is subject to the requirements of
the Act and related rules and regulations issued by the SEC and NASDAQ. After
enactment, the Company updated its policies and procedures to comply with the
Act's requirements and has found that such compliance, including compliance with
Section 404 of the Act relating to management control over financial reporting,
has resulted in significant additional expense for the Company. The Company
anticipates that it will continue to incur such additional expense in its
ongoing compliance.

ANTI-TERRORISM LEGISLATION

USA Patriot Act of 2001. The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
intended to combat terrorism, was renewed with certain amendments in 2006 (the
"Patriot Act"). Certain provisions of the Patriot Act were made permanent and
other sections were made subject to extended "sunset" provisions. The Patriot
Act, in relevant part, (i) prohibits banks from providing correspondent accounts
directly to foreign shell banks; (ii) imposes due diligence requirements on
banks opening or holding accounts for foreign financial institutions or wealthy
foreign individuals; (iii) requires financial institutions to establish an
anti-money-laundering compliance program; and (iv) eliminates civil liability
for persons who file suspicious activity reports. The Act also includes
provisions providing the government with power to investigate terrorism,
including expanded government access to bank account records. While the Patriot
Act has had minimal affect on the Company's and the bank subsidiaries' record
keeping and reporting expenses, it is likely that the renewal and amendment will
not have a material adverse effect on business or operations.

FINANCIAL SERVICES MODERNIZATION

Gramm-Leach-Bliley Act of 1999. The Gramm-Leach-Bliley Financial Services
Modernization Act of 1999 brought about significant changes to the laws
affecting banks and bank holding companies. Generally, the Act (i) repeals
historical restrictions on preventing banks from affiliating with securities
firms; (ii) provides a uniform framework for the activities of banks, savings
institutions and their holding companies; (iii) broadens the activities that may
be conducted by national banks and banking subsidiaries of bank holding
companies; (iv) provides an enhanced framework for protecting the privacy of
consumer information and requires notification to consumers of bank privacy
policies; and (v) addresses a variety of other legal and regulatory issues
affecting both day-to-day operations and long-term activities of financial
institutions. Bank holding companies that qualify and elect to become financial
holding companies can engage in a wider variety of financial activities than
permitted under previous law, particularly with respect to insurance and
securities underwriting activities.


                                       29

<PAGE>

RECENT LEGISLATION

Emergency Economic Stabilization Act of 2008. In response to the recent
financial crisis, the United States government passed the Emergency Economic
Stabilization Act of 2008 (the "EESA") on October 3, 2008, which provides the
United States Treasury Department (the "Treasury") with broad authority to
implement certain actions intended to help restore stability and liquidity to
the U.S. financial markets.

Insurance of Deposit Accounts. The EESA included a provision for a temporary
increase from $100,000 to $250,000 per depositor in deposit insurance effective
October 3, 2008 through December 31, 2013.

Deposit Insurance Assessments. The FDIC imposes an assessment against
institutions for deposit insurance. This assessment is based on the risk
category of the institution and ranges from 7 to 77.5 basis points of the
institution's deposits. In December 2008, the FDIC adopted a rule that raised
the current deposit insurance assessment rates uniformly for all institutions by
7 basis points (to a range from 12 to 50 basis points) for the first quarter of
2009. In February of 2009, the FDIC adopted a final rule modifying the
risk-based assessment system and setting initial base assessment rates beginning
April 1, 2009 at 12 to 45 basis points. The rule also gives the FDIC the
authority to, as necessary, implement emergency special assessments to maintain
the deposit insurance fund.

Prepaid Assessments. On November 12, 2009, the FDIC approved a final rule
requiring all FDIC-insured depository institutions to prepay estimated quarterly
assessments for the fourth quarter of 2009 and for all of 2010, 2011, and 2012.
The prepayment was collected on December 30, 2009, along with institutions'
regular quarterly deposit insurance assessments for the third quarter of 2009.
For the fourth quarter of 2009 and all of 2010, the prepaid assessments will be
based on an institution's total base assessment rate in effect on September 30,
2009. That rate will be increased by three basis points for 2011 and 2012
prepayments. The prepaid assessments will be accounted for as a prepaid expense
amortized over the three year period.

Troubled Asset Relief Program. Pursuant to the EESA, the Treasury has the
ability to purchase or insure up to $700 billion in troubled assets held by
financial institutions under the Troubled Asset Relief Program ("TARP"). On
October 14, 2008, the Treasury announced it would initially purchase equity
stakes in financial institutions under a Capital Purchase Program (the "CPP") of
up to $350 billion of the $700 billion authorized under the TARP legislation.
The CPP provides direct equity investment of perpetual preferred stock by the
Treasury in qualified financial institutions. The program is voluntary and
requires an institution to comply with a number of restrictions and provisions,
including limits on executive compensation, stock redemptions and declaration of
dividends. The Company received approval for, but determined not to participate
in the CPP in light of its successful sale of common stock in November 2008.

Temporary Liquidity Guarantee Program. In October 2008, the FDIC announced the
Temporary Liquidity Guarantee Program, which has two components--the Debt
Guarantee Program and the Transaction Account Guarantee Program. Under the
Transaction Account Guarantee Program any participating depository institution
is able to provide full deposit insurance coverage for non-interest bearing
transaction accounts, regardless of the dollar amount. Non-interest bearing
transaction accounts include demand accounts and NOW accounts contractually
limited to paying 50 basis points or less. Under the program, effective November
14, 2008, insured depository institutions that have not opted out of the FDIC
Temporary Liquidity Guarantee Program will be subject to a 0.10% surcharge
applied to non-interest bearing transaction deposit account balances in excess
of $250,000, which surcharge will be added to the institution's existing
risk-based deposit insurance assessments. Under the Debt Guarantee Program,
qualifying unsecured senior debt issued by a participating institution can be
guaranteed by the FDIC. The Company and its bank subsidiaries chose to
participate in both components of the FDIC Temporary Liquidity Guaranty Program.

American Recovery and Reinvestment Act of 2009. On February 17, 2009 the
American Recovery and Reinvestment Act of 2009 ("ARRA") was signed into law.
ARRA is intended to help stimulate the economy and is a combination of tax cuts
and spending provisions applicable to a broad range of areas with an estimated
cost of about $780 billion. The impact that ARRA may have on the US economy, the
Company and the Banks cannot be predicted with reasonable certainty.


                                       30

<PAGE>

PROPOSED LEGISLATION

Proposed legislation is introduced in almost every legislative session. Such
legislation could dramatically affect the regulation of the banking industry. In
light of the 2008 financial crisis, legislation reshaping the regulatory
landscape for financial institutions has been proposed. A current proposal
includes measures aimed to prevent another financial crisis like the one in 2008
by forming a federal regulatory body to protect the interests of consumers by
preventing abusive and risky lending practices, increasing supervision and
regulation on financial firms deemed too big to fail, giving shareholders an
advisory vote on executive pay, and regulating complex derivatives instruments.
The Company cannot predict if any such legislation will be adopted or if it is
adopted how it would affect the business of the Company or the Banks. Past
history has demonstrated that new legislation or changes to existing laws or
regulations usually results in a greater compliance burden and, therefore,
generally increases the cost of doing business.

EFFECTS OF GOVERNMENT MONETARY POLICY

The Company's earnings and growth are affected not only by general economic
conditions, but also by the fiscal and monetary policies of the federal
government, particularly the Federal Reserve. The Federal Reserve implements
national monetary policy for such purposes as curbing inflation and combating
recession, but its open market operations in U.S. government securities, control
of the discount rate applicable to borrowings from the Federal Reserve, and
establishment of reserve requirements against certain deposits, influence the
growth of bank loans, investments and deposits, and also affect interest rates
charged on loans or paid on deposits. The nature and impact of future changes in
monetary policies and their impact on the Company or the Banks cannot be
predicted with certainty.

                                    TAXATION

FEDERAL TAXATION

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.

STATE TAXATION

Under Montana, Idaho, Colorado and Utah law, financial institutions are subject
to a corporation tax, which incorporates or is substantially similar to
applicable provisions of the Internal Revenue Code. The corporation 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.

See Note 12 to the Consolidated Financial Statements in "Item 8 - Financial
Statements and Supplementary Data" for additional information.

                                     PART II

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                                       31

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee, Board of Directors and Stockholders
Glacier Bancorp, Inc.
Kalispell, Montana

We have audited the accompanying consolidated statements of financial condition
of Glacier Bancorp, Inc. as of December 31, 2009 and 2008, and the related
consolidated statements of operations, stockholders' equity and comprehensive
income and cash flows for each of the years in the three-year period ended
December 31, 2009. The Company's management is responsible for these financial
statements. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. Our audits included
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Glacier Bancorp,
Inc. as December 31, 2009 and 2008, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31,
2009, in conformity with accounting principles generally accepted in the Unites
States of America.

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), Glacier Bancorp, Inc.'s internal
control over financial reporting as of December 31, 2009, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and our report dated
March 1, 2010, expressed an unqualified opinion on the effectiveness of the
Company's internal control over financial reporting.


                                        /s/ BKD, LLP

Denver, Colorado
March 1, 2010


                                       32

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee, Board of Directors and Stockholders
Glacier Bancorp, Inc.
Kalispell, Montana

We have audited Glacier Bancorp, Inc.'s internal control over financial
reporting as of December 31, 2009, based on criteria established in Internal
Control - Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company's management is
responsible for maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Report of Management. Our responsibility
is to express an opinion on the Company's internal control over financial
reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of reliable financial statements in accordance with
generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America, and that receipts
and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention, or timely detection and correction of
unauthorized acquisition, use, or disposition of the company's assets that could
have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.


                                       33

<PAGE>

In our opinion, Glacier Bancorp, Inc. maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2009,
based on criteria established in Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial
statements of Glacier Bancorp, Inc. and our report dated March 1, 2010,
expressed an unqualified opinion thereon.


                                        /s/ BKD, LLP

Denver, Colorado
March 1, 2010


                                       34

<PAGE>

                              GLACIER BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                                 ----------------------
                (Dollars in thousands, except per share data)                       2009         2008
                ---------------------------------------------                    ----------   ---------
<S>                                                                              <C>          <C>
ASSETS:
   Cash on hand and in banks .................................................   $  120,731     125,123
   Federal funds sold ........................................................       87,155       6,480
   Interest bearing cash deposits ............................................        2,689       3,652
                                                                                 ----------   ---------
      Cash and cash equivalents ..............................................      210,575     135,255
   Investment securities, available-for-sale .................................    1,506,394     990,092
   Loans receivable, net of allowance for loan and lease losses of $142,927
      and $76,739 at December 31, 2009 and 2008, respectively ................    3,920,988   3,998,478
   Loans held for sale .......................................................       66,330      54,976
   Premises and equipment, net ...............................................      140,921     133,949
   Real estate and other assets owned, net ...................................       57,320      11,539
   Accrued interest receivable ...............................................       29,729      28,777
   Deferred tax asset ........................................................       41,082      14,292
   Core deposit intangible, net of accumulated amortization of $17,910
      and $14,794 at December 31, 2009 and 2008, respectively ................       13,937      13,013
   Goodwill ..................................................................      146,259     146,752
   Other assets ..............................................................       58,260      26,847
                                                                                 ----------   ---------
      Total assets ...........................................................   $6,191,795   5,553,970
                                                                                 ==========   =========
LIABILITIES:
   Non-interest bearing deposits .............................................   $  810,550     747,439
   Interest bearing deposits .................................................    3,289,602   2,515,036
   Advances from Federal Home Loan Bank ......................................      790,367     338,456
   Securities sold under agreements to repurchase ............................      212,506     188,363
   Federal Reserve Bank discount window ......................................      225,000     914,000
   Other borrowed funds ......................................................       13,745       8,368
   Accrued interest payable ..................................................        7,928       9,751
   Subordinated debentures ...................................................      124,988     121,037
   Other liabilities .........................................................       31,219      34,580
                                                                                 ----------   ---------
      Total liabilities ......................................................    5,505,905   4,877,030
                                                                                 ----------   ---------
STOCKHOLDERS' EQUITY:
   Preferred shares, $0.01 par value per share. 1,000,000 shares authorized.
      none issued or outstanding at December 31, 2009 and 2008 ...............           --          --
   Common stock, $0.01 par value per share.  117,187,500 and 117,187,500
      shares authorized, 61,619,803 and 61,331,273 issued and outstanding
      at December 31, 2009 and 2008, respectively ............................          616         613
   Paid-in capital ...........................................................      497,493     491,794
   Retained earnings - substantially restricted ..............................      188,129     185,776
   Accumulated other comprehensive loss ......................................         (348)     (1,243)
                                                                                 ----------   ---------
      Total stockholders' equity .............................................      685,890     676,940
                                                                                 ----------   ---------
      Total liabilities and stockholders' equity .............................   $6,191,795   5,553,970
                                                                                 ==========   =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       35

<PAGE>

                              GLACIER BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                 Years ended December 31,
                                                               ----------------------------
        (Dollars in thousands, except per share data)            2009       2008      2007
        ---------------------------------------------          --------   -------   -------
<S>                                                            <C>        <C>       <C>
INTEREST INCOME:
   Residential real estate loans ...........................   $ 54,498    51,166    59,664
   Commercial loans ........................................    151,580   165,119   157,644
   Consumer and other loans ................................     44,844    47,725    48,105
   Investment securities and other .........................     51,572    38,975    39,347
                                                               --------   -------   -------
      Total interest income ................................    302,494   302,985   304,760
                                                               --------   -------   -------
INTEREST EXPENSE:
   Deposits ................................................     38,429    55,012    81,459
   Federal Home Loan Bank advances .........................      7,952    15,355    18,897
   Securities sold under agreements to repurchase ..........      2,007     3,823     7,445
   Subordinated debentures .................................      6,818     7,430     7,537
   Other borrowed funds ....................................      1,961     8,752     5,953
                                                               --------   -------   -------
      Total interest expense ...............................     57,167    90,372   121,291
                                                               --------   -------   -------
      NET INTEREST INCOME ..................................    245,327   212,613   183,469
   Provision for loan losses ...............................    124,618    28,480     6,680
                                                               --------   -------   -------
      Net interest income after provision for loan losses ..    120,709   184,133   176,789
NON-INTEREST INCOME:
   Service charges and other fees ..........................     40,465    41,550    37,931
   Miscellaneous loan fees and charges .....................      5,406     5,956     7,555
   Gain on sale of loans ...................................     26,923    14,849    13,283
   Gain (loss) on investments ..............................      5,995    (7,345)       (8)
   Other income ............................................      7,685     6,024     6,057
                                                               --------   -------   -------
      Total non-interest income ............................     86,474    61,034    64,818
                                                               --------   -------   -------
NON-INTEREST EXPENSE:
   Compensation, employee benefits and related expense .....     84,965    82,027    79,070
   Occupancy and equipment expense .........................     23,471    21,674    19,152
   Advertising and promotions ..............................      6,477     6,989     6,306
   Outsourced data processing expense ......................      3,031     2,508     2,755
   Core deposit intangibles amortization ...................      3,116     3,051     3,202
   Foreclosed asset expenses, losses and write-downs .......      9,092     1,176       193
   Federal Deposit Insurance Corporation premiums ..........      8,639     1,377       755
   Other expense ...........................................     30,027    27,107    26,484
                                                               --------   -------   -------
      Total non-interest expense ...........................    168,818   145,909   137,917
                                                               --------   -------   -------
EARNINGS BEFORE INCOME TAXES ...............................     38,365    99,258   103,690
   Federal and state income tax expense ....................      3,991    33,601    35,087
                                                               --------   -------   -------
NET EARNINGS ...............................................   $ 34,374    65,657    68,603
                                                               ========   =======   =======
      BASIC EARNINGS PER SHARE .............................   $   0.56      1.20      1.29
      DILUTED EARNINGS PER SHARE ...........................   $   0.56      1.19      1.28
</TABLE>

See accompanying notes to consolidated financial statements.


                                       36

<PAGE>

                              GLACIER BANCORP, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                  YEARS ENDED DECEMBER 31, 2009, 2008, AND 2007

<TABLE>
<CAPTION>
                                                                                              Retained      Accumulated      Total
                                                               Common Stock                   Earnings      Other Comp-     Stock-
                                                           -------------------   Paid-in   Substantially     rehensive     holders'
      (Dollars in thousands, except per share data)          Shares     Amount   Capital     Restricted    Income (Loss)    Equity
      ---------------------------------------------        ----------   ------   -------   -------------   -------------   --------
<S>                                                        <C>          <C>      <C>       <C>             <C>             <C>
Balance at December 31, 2006 ...........................   52,302,820    $523    344,265      108,286           3,069      456,143
Comprehensive income:
   Net earnings ........................................           --      --         --       68,603              --       68,603
   Unrealized gain on securities, net of
      reclassification adjustment and taxes ............           --      --         --           --              48           48
                                                                                                                           -------
Total comprehensive income .............................                                                                    68,651
                                                                                                                           -------
Cash dividends declared ($0.50 per share) ..............           --      --         --      (26,694)             --      (26,694)
Stock options exercised ................................      550,080       6      6,148           --              --        6,154
Stock issued in connection with acquisitions ...........      793,580       7     18,993           --              --       19,000
Stock-based compensation and tax benefit ...............           --      --      5,322           --              --        5,322
                                                           ----------    ----    -------      -------         -------      -------
Balance at December 31, 2007 ...........................   53,646,480    $536    374,728      150,195           3,117      528,576
Comprehensive income:
   Net earnings ........................................           --      --         --       65,657              --       65,657
   Unrealized loss on securities, net of
      reclassification adjustment and taxes ............           --      --         --           --          (4,360)      (4,360)
                                                                                                                           -------
Total comprehensive income .............................                                                                    61,297
                                                                                                                           -------
Cash dividends declared ($0.52 per share) ..............           --      --         --      (29,079)             --      (29,079)
Stock options exercised ................................      719,858       7      9,789           --              --        9,796
Stock issued in connection with acquisition ............      639,935       7      9,280           --              --        9,287
Public offering of stock issued ........................    6,325,000      63     93,890           --              --       93,953
Cumulative effect of a change in accounting principle ..           --      --         --         (997)             --         (997)
Stock-based compensation and tax benefit ...............           --      --      4,107           --              --        4,107
                                                           ----------    ----    -------      -------         -------      -------
Balance at December 31, 2008 ...........................   61,331,273    $613    491,794      185,776          (1,243)     676,940
Comprehensive income:
   Net earnings ........................................           --      --         --       34,374              --       34,374
   Unrealized gain on securities, net of
      reclassification adjustment and taxes ............           --      --         --           --             895          895
                                                                                                                           -------
Total comprehensive income .............................                                                                    35,269
                                                                                                                           -------
Cash dividends declared ($0.52 per share) ..............           --      --         --      (32,021)             --      (32,021)
Stock options exercised ................................      188,535       2      2,552           --              --        2,554
Stock issued in connection with acquisition ............       99,995       1      1,419           --              --        1,420
Stock-based compensation and tax benefit ...............           --      --      1,728           --              --        1,728
                                                           ----------    ----    -------      -------         -------      -------
Balance at December 31, 2009 ...........................   61,619,803    $616    497,493      188,129            (348)     685,890
                                                           ==========    ====    =======      =======         =======      =======
</TABLE>

<TABLE>
<CAPTION>
                                                            Year ended December 31,
                                                           ------------------------
                                                             2009      2008    2007
                                                           -------   -------   ----
<S>                                                        <C>       <C>       <C>
Disclosure of reclassification amount:
   Unrealized and realized holding gain (loss) arising
      during the year ..................................   $ 7,474   (14,540)   70
   Tax (expense) benefit ...............................    (2,933)    5,699   (27)
                                                           -------   -------   ---
      Net after tax ....................................     4,541    (8,841)   43
                                                           -------   -------   ---
   Reclassification adjustment for net (gain) loss
      included in net income ...........................    (5,995)    7,345     8
   Tax expense (benefit) ...............................     2,349    (2,864)   (3)
                                                           -------   -------   ---
      Net after tax ....................................    (3,646)    4,481     5
                                                           -------   -------   ---
         Net change in unrealized gain (loss) on
            available-for-sale securities ..............   $   895    (4,360)   48
                                                           =======   =======   ===
</TABLE>

See accompanying notes to consolidated financial statements.


                                       37

<PAGE>

                              GLACIER BANCORP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                    Years ended December 31,
                                                                             -------------------------------------
                          (Dollars in thousands)                                 2009         2008         2007
                          ----------------------                             -----------   ----------   ----------
<S>                                                                          <C>           <C>          <C>
OPERATING ACTIVITIES:
   Net earnings ..........................................................   $    34,374       65,657       68,603
   Adjustments to reconcile net earnings to net cash provided by (used in)
      operating activities:
      Mortgage loans held for sale originated or acquired ................    (1,239,862)    (675,280)    (618,523)
      Proceeds from sales of mortgage loans held for sale ................     1,255,432      675,276      626,818
      Provision for loan losses ..........................................       124,618       28,480        6,680
      Depreciation of premises and equipment .............................        10,450        9,814        8,508
      Amortization of core deposit intangible ............................         3,116        3,051        3,202
      (Gain) loss on sale of investments .................................        (5,995)       7,345            8
      Gain on sale of loans ..............................................       (26,923)     (14,849)     (13,283)
      Loss (gain) on OREO and writedown ..................................         5,676          149         (182)
      Bargain purchase gain ..............................................        (3,482)          --           --
      Amortization of investment securities premiums and discounts, net ..           (73)       1,400        2,737
      FHLB stock dividends ...............................................           (16)          --           --
      Gain on sale of Western's Lewistown branch .........................            --           --       (1,575)
      Deferred (benefit) tax expense .....................................       (29,755)     (11,032)       1,569
      Stock compensation expense, net of tax benefits ....................         1,863        1,686        2,187
      Excess tax benefits related to the exercise of stock options .......           (75)      (1,325)      (1,745)
      Net decrease (increase) in accrued interest receivable .............         1,312       (2,135)          44
      Net (decrease) increase in accrued interest payable ................        (2,241)      (3,656)       2,162
      Net (decrease) increase in current income taxes payable ............        (2,913)       2,636          970
      Net increase in other assets .......................................       (26,982)        (519)      (1,332)
      Net (decrease) increase in other liabilities .......................        (1,787)         517        1,988
                                                                             -----------   ----------   ----------
         NET CASH PROVIDED BY OPERATING ACTIVITIES .......................        96,737       87,215       88,836
                                                                             -----------   ----------   ----------
INVESTING ACTIVITIES:
   Proceeds from sales, maturities and prepayments of investment
      securities available-for-sale ......................................       310,809      280,051      273,323
   Purchases of investment securities available-for-sale .................      (768,045)    (584,058)     (88,715)
   Principal collected on installment and commercial loans ...............     1,002,856    1,088,871    1,125,275
   Installment and commercial loans originated or acquired ...............    (1,006,751)  (1,420,609)  (1,598,253)
   Principal collections on mortgage loans ...............................       237,883      305,353      455,337
   Mortgage loans originated or acquired .................................      (184,354)    (357,951)    (359,484)
   Proceeds from sale of OREO ............................................        14,763        4,294           --
   Net purchase of FHLB and FRB stock ....................................          (701)        (640)      (3,854)
   Net cash received (paid) for acquisition of banks .....................        41,716       (7,133)       8,953
   Net cash paid for sale of Western's Lewistown branch ..................            --           --       (6,846)
   Net addition of premises and equipment ................................       (11,859)     (15,336)     (18,033)
                                                                             -----------   ----------   ----------
      NET CASH USED IN INVESTING ACTIVITIES ..............................      (363,683)    (707,158)    (212,297)
                                                                             -----------   ----------   ----------
FINANCING ACTIVITIES:
   Net increase (decrease) in deposits ...................................       601,062      (40,936)     (97,214)
   Net increase (decrease) in FHLB advances ..............................       451,910     (209,829)     231,427
   Net increase in securities sold under repurchase agreements ...........         8,251       10,322        7,825
   Net (decrease) increase in Federal Reserve Bank discount window .......      (689,000)     914,000           --
   Net (decrease) increase in U.S. Treasury Tax and Loan funds ...........          (930)    (215,342)      54,865
   Net increase (decrease) in other borrowed funds .......................           365       (6,621)         (55)
   Cash dividends paid ...................................................       (32,021)     (29,079)     (26,694)
   Excess tax benefits related to the exercise of stock options ..........            75        1,325        1,745
   Proceeds from exercise of stock options and other stock issued ........         2,554      103,749        6,154
                                                                             -----------   ----------   ----------
      NET CASH PROVIDED BY FINANCING ACTIVITIES ..........................       342,266      527,589      178,053
                                                                             -----------   ----------   ----------
   NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ..................        75,320      (92,354)      54,592
   CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ........................       135,255      227,609      173,017
                                                                             -----------   ----------   ----------
   CASH AND CASH EQUIVALENTS AT END OF YEAR ..............................   $   210,575      135,255      227,609
                                                                             ===========   ==========   ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
   Cash paid during the year for interest ................................   $    59,408       94,028      118,840
   Cash paid during the year for income taxes ............................        36,778       43,114       34,798
   Sale and refinancing of other real estate owned .......................         8,150        2,909           --
   Other real estate acquired in settlement of loans .....................        71,967       16,661          558
</TABLE>

     The following schedule summarizes the Company's acquisitions in 2009, 2008
     and 2007:

<TABLE>
<CAPTION>
                                  FIRST NATIONAL    BANK OF THE     NORTH SIDE
                                   BANK & TRUST      SAN JUANS      STATE BANK
                                  --------------   ------------   --------------
<S>                               <C>              <C>            <C>
Date acquired                      Oct. 2, 2009    Dec. 1, 2008   April 30, 2007
Fair Value of assets acquired          $272,280        $157,648         $128,252
Cash paid for the capital stock             621           7,133            8,953
Capital stock issued                      9,995           9,287           19,000
Liabilities assumed                     266,758         139,016          100,348
</TABLE>

See accompanying notes to consolidated financial statements.


                                       38
<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) GENERAL

Glacier Bancorp, Inc. ("Company") is a Montana corporation incorporated in 2004
as a successor corporation to the Delaware corporation incorporated in 1990. The
Company is a regional multi-bank holding company that provides a full range of
banking services to individual and corporate customers in Montana, Idaho,
Wyoming, Colorado, Utah and Washington through its bank subsidiaries. The bank
subsidiaries are subject to competition from other financial service providers.
The bank subsidiaries are also subject to the regulations of certain government
agencies and undergo periodic examinations by those regulatory authorities.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for loan and lease losses ("ALLL"
or "allowance") and the valuations related to investments, business
combinations, goodwill, deferred tax assets and real estate acquired in
connection with foreclosures or in satisfaction of loans. In connection with the
determination of the ALLL and other valuation estimates management obtains
independent appraisals for significant items.

(B) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its eleven wholly-owned operating subsidiaries as of December 31, 2009; Glacier
Bank ("Glacier"), First Security Bank of Missoula ("First Security"), Western
Security Bank ("Western"), Big Sky Western Bank ("Big Sky"), Valley Bank of
Helena ("Valley"), and First Bank of Montana ("First Bank-MT"), all located in
Montana, Mountain West Bank ("Mountain West") and Citizens Community Bank
("Citizens") located in Idaho, 1st Bank ("1st Bank") and First National Bank &
Trust ("First National") located in Wyoming, and Bank of the San Juans ("San
Juans") located in Colorado. All significant inter-company transactions have
been eliminated in consolidation.

In addition, the Company owns seven trust subsidiaries, Glacier Capital Trust II
("Glacier Trust II"), Glacier Capital Trust III ("Glacier Trust III"), Glacier
Capital Trust IV ("Glacier Trust IV"), Citizens (ID) Statutory Trust I
("Citizens Trust I"), Bank of the San Juans Bancorporation Trust I ("San Juans
Trust I"), First Company Statutory Trust 2001 ("First Co Trust 01") and First
Company Statutory Trust 2003 ("First Co Trust 03") for the purpose of issuing
trust preferred securities and, in accordance with Financial Accounting
Standards Board ("FASB") Accounting Standards Codification(TM) ("ASC") Topic
810, Consolidation, the trust subsidiaries are not consolidated into the
Company's financial statements. The Company does not have any other off-balance
sheet entities.

On October 2, 2009, First Company and its subsidiary, First National, was
acquired by the Company. On December 1, 2008, Bank of the San Juans
Bancorporation and its subsidiary, San Juans, was acquired by the Company. The
acquired banks became wholly-owned subsidiaries of the Company.

On February 1, 2009, First National Bank of Morgan ("Morgan") merged into 1st
Bank resulting in operations being conducted under the 1st Bank charter. Prior
period activity of Morgan has been combined and included in 1st Bank's
historical results. On April 30, 2008, Glacier Bank of Whitefish ("Whitefish")
merged into Glacier with operations conducted under the Glacier charter. The
mergers were accounted for as a combination of two wholly-owned subsidiaries
without acquisition accounting and prior period activity of the merged banks has
been combined and included in the acquiring bank subsidiaries' historical
results.

(C) VARIABLE INTEREST ENTITIES

FASB ASC Topic 810, Consolidation, provides guidance as to when a company should
consolidate the assets, liabilities, and activities of a variable interest
entity ("VIE") in its financial statements, and when a company should disclose
information about its relationship with a VIE. A VIE is a legal structure used
to conduct activities or hold assets, and a VIE must be consolidated by a
company if it is the primary beneficiary that absorbs the majority of the
entity's expected losses, receives a majority of the entity's expected residual
returns, or both. For additional information relating to 2009 amendments to this
topic, see Note 22.


                                       39

<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . . . CONTINUED

The Company has equity investments in Certified Development Entities ("CDE")
which have received allocations of new market tax credits ("NMTC"). The Company
also has equity investments in low-income housing tax credit ("LIHTC")
partnerships. The CDE's and the LIHTC partnerships are VIE's. The underlying
activities of the VIE's are community development projects designed primarily to
promote community welfare, such as economic rehabilitation and development of
low-income areas by providing housing, services, or jobs for residents. The
maximum exposure to loss in the VIE's is the amount of equity invested or credit
extended by the Company; however, the Company has credit protection in the form
of indemnification agreements, guarantees, and collateral arrangements. The
Company has evaluated the variable interests held by the Company and others and
where the Company is the primary beneficiary of a VIE, the VIE has been
consolidated into the bank subsidiary which holds the direct investment in the
VIE. Currently, only CDE (NMTC) investments are consolidated into the Company's
financial statements. For the CDE (NMTC) investments, the creditors and other
beneficial interest holders have no recourse to the general credit of the bank
subsidiaries. As of December 31, 2009, the Company had investments in VIE's of
$30,513,000 and $2,331,000 for the CDE (NMTC) and LIHTC partnerships,
respectively. The consolidated VIE's as well as the unconsolidated VIE's are
regularly monitored by the Company to determine if any reconsideration events
have occurred that could cause its primary beneficiary status to change.

(D) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, cash held as demand deposits at
various banks and regulatory agencies, interest bearing deposits, federal funds
sold and liquid investments with original maturities of three months or less.

(E) INVESTMENT SECURITIES

Debt securities for which the Company has the positive intent and ability to
hold to maturity are classified as held-to-maturity and are stated at amortized
cost. Debt and equity securities held primarily for the purpose of selling in
the near term are classified as trading securities and are reported at fair
market value, with unrealized gains and losses included in income. Debt and
equity securities not classified as held-to-maturity or trading are classified
as available-for-sale and are reported at fair value with unrealized gains and
losses, net of income taxes, shown as a separate component of stockholders'
equity. As of December 31, 2009 and 2008, the Company only has
available-for-sale securities.

Premiums and discounts on investment securities are amortized or accreted into
income using a method that approximates the level-yield interest method. The
cost of any investment, if sold, is determined by specific identification. If
impairment of securities is determined to be other-than-temporary, an impairment
loss is recognized by reducing the amortized cost for the credit loss portion of
the impairment with a corresponding charge to earnings for a like amount.

The Company holds stock in the Federal Home Loan Bank ("FHLB") and the Federal
Reserve Bank ("FRB"). FHLB stock and FRB stock is restricted because such stock
may only be sold to the FHLB or FRB at its par value. Due to restrictive terms,
and the lack of a readily determinable market value, FHLB and FRB stocks are
carried at cost.

For additional information relating to investment securities, see Note 3.

(F) LOANS RECEIVABLE

Loans that are intended to be held to maturity are reported at their unpaid
principal balance less charge-offs, specific valuation accounts, and any
deferred fees or costs on originated loans. Acquired loans are reported net of
unamortized premiums or discounts. Interest income is reported on the interest
method and includes discounts and premiums on acquired loans and net loan fees
on originated loans which are amortized over the expected life of loans using
methods that approximate the effective interest method. For additional
information relating to loans, see Note 4.

Loans are designated non-accrual and the accrual of interest is discontinued
when the collection of the contractual principal or interest is unlikely. A loan
is typically placed on non-accrual when principal or interest is due and has
remained unpaid for ninety days or more unless the loan is in process of
collection and well-secured by collateral the fair value of which is sufficient
to pay off the debt in full. When a loan is placed on non-accrual status,
interest previously accrued but not collected is reversed against current period
interest income. Subsequent payments are applied to the outstanding principal
balance if doubt remains as to the ultimate collectability of the loan. Interest
accruals are resumed on such loans only when they are brought fully current with
respect to interest and principal and when, in the judgment of management, the
loans are estimated to be fully collectible as to both principal and interest.


                                       40

<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . . . CONTINUED

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. The amount of the impairment is measured using cash flows discounted
at the loan's effective interest rate, except when it is determined that
repayment of the loan is expected to be provided solely by the underlying
collateral. For collateral dependent loans, impairment is measured by the fair
value of the collateral less the cost to sell. When the ultimate collectability
of the total principal of an impaired loan is in doubt and designated is
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.

A restructured loan is considered a troubled debt restructuring 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's troubled debt restructuring loans are considered impaired loans.

(G) LOANS HELD FOR SALE

Mortgage and commercial loans originated and intended for sale in the secondary
market are carried at the lower of cost or estimated market value in the
aggregate. Net unrealized losses are recognized by charges to income. A sale is
recognized when the Company surrenders control of the loan and consideration,
other than beneficial interests in the loan, is received in exchange. A gain is
recognized to the extent the selling price exceeds the carrying value.

(H) ALLOWANCE FOR LOAN AND LEASE LOSSES

Based upon management's analysis of the Company's loan and lease portfolio, the
balance of the ALLL is an estimate of probable credit losses known and inherent
in the loan and lease portfolio as of the date of the consolidated financial
statements. The ALLL is increased by provisions for loan losses which are
charged to expense. The portions of loan balances determined by management to be
uncollectible are charged off in reduction of the allowance. Recoveries of
amounts previously charged off are credited as an increase to the allowance.

The allowance for estimated losses on loans and leases is determined by each
bank subsidiary based upon past loss experience, adjusted for changes in trends
and conditions of certain items, including:

     -    Adverse situations that may affect specific borrowers' ability to
          repay;

     -    Current collateral values, where appropriate;

     -    Delinquencies and non-performing loans;

     -    Amount and timing of future cash flows expected on impaired loans;

     -    Criticized and classified loans;

     -    Credit concentrations by credit type, industry, geography;

     -    Recoveries and dispositions of balances previously charge-off;

     -    Volume and terms of loans;

     -    Loan size and complexity;

     -    Competition and bank size;

     -    Local market areas and national economic conditions;

     -    Effects of changes in lending policies and procedures;

     -    Experience, ability, and depth of lending management and credit
          administration staff; and

     -    Effects of legal and regulatory developments.


                                       41

<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . . . CONTINUED

Individually significant loans and major lending areas are reviewed periodically
to determine potential problems at an early date. A loan is considered 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. The amount of the
impairment is measured using cash flows discounted at the loan's effective
interest rate, except when it is determined that repayment of the loan is
expected to be provided solely by the underlying collateral. For collateral
dependent loans, impairment is measured by the fair value of the collateral less
the cost to sell. The Company considers its investment in one-to-four family
residential loans, consumer and home equity loans to be homogeneous and
therefore evaluates such loans for impairment on a pooled basis.

(I) TEMPORARY VERSUS OTHER-THAN-TEMPORARY IMPAIRMENT

The Company views the determination of whether an investment security is
temporarily or other-than-temporarily impaired as a critical accounting policy,
as the estimate is susceptible to significant change from period to period
because it requires management to make significant judgments, assumptions and
estimates in the preparation of its consolidated financial statements. The
Company assesses individual securities in its investment securities portfolio
for impairment at least on a quarterly basis, and more frequently when economic
or market conditions warrant. An investment is impaired if the fair value of the
security is less than its carrying value at the financial statement date. If
impairment is determined to be other-than-temporary, an impairment loss is
recognized by reducing the amortized cost for the credit loss portion of the
impairment with a corresponding charge to earnings.

Management considers whether an investment security is other-than-temporarily
impaired under the guidance promulgated in FASB ASC Topic 320, Investments -
Debt and Equity Securities.

For additional information relating to investment securities, see Note 3.

In evaluating impaired securities for other-than-temporary impairment losses,
management considers, among other things, (i) the severity and duration of the
impairment, (ii) the credit ratings of the security, (iii) the overall deal
structure, including the Company's position within the structure, the overall
and near term financial performance of the issuer and underlying collateral,
delinquencies, defaults, loss severities, recoveries, prepayments, cumulative
loss projections, discounted cash flows and fair value estimates. The Company
also considers its intent and ability to retain the investment security for a
period of time sufficient to allow for anticipated recovery in fair value. In so
doing, the Company considers (i) contractual constraints, liquidity and capital
needs of the Company, and (ii) management's approach to managing the investment
portfolio including intent, if any, to dispose of impaired investment securities
in periods subsequent to the impairment analysis date.

(J) PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less depreciation. Depreciation is
computed on a straight-line method over the estimated useful lives or the term
of the related lease. The estimated useful life for office buildings is 15 - 40
years and the estimated useful life for furniture, fixtures, and equipment is 3
- 10 years. Interest is capitalized for any significant building projects. For
additional information relating to premises and equipment, see Note 5.

(K) REAL ESTATE OWNED

Property acquired by foreclosure or deed-in-lieu of foreclosure is carried at
the lower of fair value at acquisition date or current estimated fair value,
less selling costs. Costs, excluding interest, relating to the improvement of
property are capitalized, whereas those relating to holding the property are
charged to expense. Fair value is determined as the amount that could be
reasonably expected in a current sale (other than a forced or liquidation sale)
between a willing buyer and a willing seller. If the fair value of the asset
minus the estimated cost to sell is less than the cost of the property, a loss
is recognized in other expenses and the asset carrying value is reduced. Any
gain or loss on disposition of real estate owned is recorded in other income or
other expense.

(L) BUSINESS COMBINATIONS AND INTANGIBLE ASSETS

Acquisitions are accounted for as prescribed by FASB ASC Topic 805, Business
Combinations. This Topic was amended January 1, 2009; for additional information
relating to the amendment, see Note 22. Acquisition accounting requires the
total purchase price to be allocated to the estimated fair values of assets
acquired and liabilities assumed, including certain intangible assets. Goodwill
is recorded if the purchase price exceeds the net fair value of assets acquired
and a bargain purchase gain is recorded in other income if the net fair value of
assets acquired exceeds the purchase price.


                                       42

<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . . . CONTINUED

Adjustment of the allocated purchase price may be related to fair value
estimates for which all information has not been obtained on the acquired entity
known or discovered during the allocation period, the period of time required to
identify and measure the fair values of the assets and liabilities acquired in
the business combination.

Core deposit intangible represents the intangible value of depositor
relationships resulting from deposit liabilities assumed in acquisitions and are
amortized using an accelerated method based on an estimated runoff of the
related deposits, not exceeding 10 years. The useful life of the core deposit
intangible is reevaluated on an annual basis, with any changes in estimated
useful life accounted for prospectively over the revised remaining life. For
additional information relating to core deposit intangibles, see Note 6.

On an annual basis, as required by FASB ASC Topic 350, Intangibles - Goodwill
and Other, the Company tests goodwill and other intangible assets for impairment
at the subsidiary level annually during the third quarter. In addition, goodwill
and other intangible assets of a subsidiary are tested for impairment between
annual tests if an event occurs or circumstances change that would
more-likely-than not reduce the fair value of a reporting unit below its
carrying amount. For additional information relating to goodwill, see Note 6.

(M) INCOME TAXES

Deferred tax assets and liabilities are recognized for estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of assets and liabilities and their respective tax bases. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

Deferred tax assets are reduced by a valuation allowance, if based on the weight
of available evidence, it is more-likely-than-not that some portion or all of
the deferred tax assets will not be realized. The term more-likely-than not
means a likelihood of more than 50 percent. The recognition threshold considers
the facts, circumstances, and information available at the reporting date and is
subject to the Company's judgment. In assessing the need for a valuation
allowance, the Company considers both positive and negative evidence. For
additional information relating to income taxes, see Note 12.

(N) ADVERTISING AND PROMOTION

Advertising and promotion costs are recognized in the period incurred.

(O) STOCK-BASED COMPENSATION

Compensation cost related to the share-based payment transactions is recognized
in the financial statements over the requisite service period, which is the
vesting period. Compensation cost is measured using the fair value of an award
on the grant date by using the Black Scholes option-pricing model. For
additional information relating to stock-based compensation, see Note 15.

(P) LONG-LIVED ASSETS

Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. An asset is deemed impaired if the sum of the expected future cash
flows is less than the carrying amount of the asset. If impaired, an impairment
loss is recognized to reduce the carrying value of the asset to fair value. At
December 31, 2009 and 2008, no assets were considered impaired.


                                       43

<PAGE>

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . . . CONTINUED

(Q) MORTGAGE SERVICING RIGHTS

The Company recognizes the rights to service mortgage loans for others, whether
acquired or internally originated. Loan servicing rights are initially recorded
at fair value based on comparable market quotes and are amortized as other
expense in proportion to and over the period of estimated net servicing income.
Loan servicing rights are evaluated quarterly for impairment by discounting the
expected future cash flows, taking into consideration the estimated level of
prepayments based on current industry expectations and the predominant risk
characteristics of the underlying loans including loan type, note rate and loan
term. Impairment adjustments, if any, are recorded through a valuation
allowance. For additional information relating to mortgage servicing rights, see
Note 6.

As of December 31, 2009 and 2008, the carrying value of mortgage servicing
rights was approximately $1,041,000 and $1,262,000, respectively. Amortization
expense of $250,000, $176,000, and $188,000 was recognized in the years ended
December 31, 2009, 2008, and 2007, respectively. The servicing rights are
included in other assets on the balance sheet and are amortized over the period
of estimated net servicing income. There was no impairment of carrying value at
December 31, 2009 or 2008. At December 31, 2009, the fair value of mortgage
servicing rights was approximately $1,708,000.

(R) EARNINGS PER SHARE

Basic earnings per share represents income available to common stockholders
divided by the weighted-average number of shares of common stock outstanding
during the year. Diluted earnings per share reflects additional common shares
that would have been outstanding if dilutive potential shares had been issued,
as well as any adjustment to income that would result from the issuance.
Potential common shares that may be issued by the Company relate to outstanding
stock options, and are determined using the treasury stock method. For
additional information relating earnings per share, see Note 14.

(S) LEASES

The Company leases certain land, premises and equipment from third parties under
operating and capital leases. The lease payments for operating lease agreements
are recognized on a straight-line basis. The present value of the future minimum
rental payments for capital leases is recognized as an asset when the lease is
formed. Lease improvements incurred at the inception of the lease are recorded
as an asset and depreciated over the initial term of the lease and lease
improvements incurred subsequently are depreciated over the remaining term of
the lease. For additional information relating to leases, see Note 19.

(T) COMPREHENSIVE INCOME

Comprehensive income includes net income, as well as other changes in
stockholders' equity that result from transactions and economic events other
than those with stockholders. The Company's only significant element of other
comprehensive income is unrealized gains and losses, net of tax expense
(benefit), on available-for-sale securities.

(U) RECLASSIFICATIONS

Certain reclassifications have been made to the 2008 and 2007 financial
statements to conform to the 2009 presentation.

2. CASH ON HAND AND IN BANKS

At December 31, 2009 and 2008, cash and cash equivalents primarily consisted of
Federal funds sold, cash on hand, and cash items in process. The bank
subsidiaries are required to maintain an average reserve balance with either the
Federal Reserve or in the form of cash on hand. The amount of this required
reserve balance at December 31, 2009 was $12,412,000.

The financial institutions holding the Company's cash accounts are participating
in the Federal Deposit Insurance Corporation's ("FDIC") Transaction Account
Guarantee Program. Under that program, through June 30, 2010, all
noninterest-bearing transaction accounts are fully guaranteed by the FDIC for
the entire amount in the account.

At December 31, 2009, the Company had overnight Federal funds sold of
$87,155,000, which are not guaranteed by the FDIC. The Company performs a
quarterly review of the institutions at which balances are maintained. The
review encompasses the financial condition of each institution including capital
level, credit quality, earnings level, and other factors including trends
affecting the financial condition of the institution.


                                       44

<PAGE>

3. 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.

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31, 2009
                                                    ----------------------------------------------------
                                                                            GROSS UNREALIZED   ESTIMATED
                                                    WEIGHTED    AMORTIZED   ----------------      FAIR
              (Dollars in thousands)                  YIELD       COST       GAINS    LOSSES     VALUE
              ----------------------                --------   ----------   ------   -------   ---------
<S>                                                 <C>        <C>          <C>      <C>       <C>
U.S. Government and federal agency:
   Maturing within one year .....................     1.62%    $      210       --        (1)        209
Government sponsored enterprises:
   Maturing within one year .....................     0.00%            --       --        --          --
   Maturing after one year through five years ...     3.21%            74       --        --          74
   Maturing after five years through ten years ..     1.64%            40       --        --          40
   Maturing after ten years .....................     2.05%            63       --        --          63
                                                               ----------   ------   -------   ---------
                                                      2.43%           177       --        --         177
                                                               ----------   ------   -------   ---------
State and local governments and other issues:
   Maturing within one year .....................     2.48%         2,040        6        --       2,046
   Maturing after one year through five years ...     3.30%         9,326      208       (12)      9,522
   Maturing after five years through ten years ..     3.84%        27,125      786      (168)     27,743
   Maturing after ten years .....................     4.92%       448,853   10,140   (10,539)    448,454
                                                               ----------   ------   -------   ---------
                                                      4.82%       487,344   11,140   (10,719)    487,765
                                                               ----------   ------   -------   ---------
Residential mortgage-backed securities ..........     3.42%       956,033   15,167   (16,158)    955,042
                                                               ----------   ------   -------   ---------
      Total marketable securities ...............     3.89%     1,443,764   26,307   (26,878)  1,443,193
                                                               ----------   ------   -------   ---------
Other investments:
   FHLB and FRB stock, at cost ..................     1.30%        62,577       --        --      62,577
   Other stock, at cost .........................     0.05%           624       --        --         624
                                                               ----------   ------   -------   ---------
      Total investments .........................     3.78%    $1,506,965   26,307   (26,878)  1,506,394
                                                               ==========   ======   =======   =========
</TABLE>


                                       45

<PAGE>

3. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE . . . CONTINUED

<TABLE>
<CAPTION>
                                                                Year ended December 31, 2008
                                                    ---------------------------------------------------
                                                                           Gross Unrealized   Estimated
                                                    Weighted   Amortized   ----------------      Fair
              (Dollars in thousands)                  Yield       Cost     Gains     Losses     Value
              ----------------------                --------   ---------   ------   -------   ---------
<S>                                                 <C>        <C>         <C>      <C>       <C>
U.S. Government and federal agency:
   Maturing within one year .....................     1.62%     $    213        4        --        217
Government sponsored enterprises:
   Maturing within one year .....................     0.00%           --       --        --         --
   Maturing after one year through five years ...     0.00%           --       --        --         --
   Maturing after five years through ten years ..     4.12%          246       --        (2)       244
   Maturing after ten years .....................     3.75%           68       --        --         68
                                                                --------   ------   -------    -------
                                                      4.04%          314       --        (2)       312
                                                                --------   ------   -------    -------
State and local governments and other issues:
   Maturing within one year .....................     3.76%          940        6        --        946
   Maturing after one year through five years ...     4.61%        4,482      104        (9)     4,577
   Maturing after five years through ten years ..     5.08%       20,219    1,030       (80)    21,169
   Maturing after ten years .....................     5.08%      408,603    8,121    (9,733)   406,991
                                                                --------   ------   -------    -------
                                                      5.07%      434,244    9,261    (9,822)   433,683
                                                                --------   ------   -------    -------
Residential mortgage-backed securities ..........     4.62%      495,961    4,956    (6,447)   494,470
                                                                --------   ------   -------    -------
      Total marketable securities ...............     4.83%      930,732   14,221   (16,271)   928,682
                                                                --------   ------   -------    -------
Other investments:
   FHLB and FRB stock, at cost ..................     1.72%       60,945       --        --     60,945
   Other stock, at cost .........................     3.10%          465       --        --        465
                                                                --------   ------   -------    -------
      Total investments .........................     4.64%     $992,142   14,221   (16,271)   990,092
                                                                ========   ======   =======    =======
</TABLE>

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 on tax-exempt
investment securities exclude the tax effect.

The amortized cost of securities at December 31, 2007 was as follows:

<TABLE>
<CAPTION>
                                                       December 31,
               (Dollars in thousands)                      2007
               ----------------------                  ------------
<S>                                                    <C>
U.S. Government and federal agency .................     $  2,550
Government sponsored enterprises ...................        1,314
State and local governments and other issues .......      277,212
Residential mortgage-backed securities .............      346,085
FHLMC and FNMA stock ...............................        7,593
Certificates of deposit with over 90 day maturity ..          199
FHLB and FRB stock .................................       59,815
Other stock ........................................          413
                                                         --------
                                                         $695,181
                                                         ========
</TABLE>


                                       46

<PAGE>

3. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE . . . CONTINUED

Interest income includes tax-exempt interest for the years ended December 31,
2009, 2008, and 2007 of $22,196,000, $13,901,000, and $13,427,000, respectively.

Gross proceeds from sales of investment securities for the years ended December
31, 2009, 2008, and 2007 were approximately $85,224,000, $97,002,000 and
$55,501,000, respectively, resulting in gross gains of approximately $7,113,000,
$0 and $1,000 and gross losses of approximately $1,118,000, $0 and $9,000
respectively. During the first quarter of 2008, the Company realized a gain of
$130,000 from extinguishment of the Company's share ownership in Principal
Financial Group and a gain of $118,000 from the mandatory redemption of a
portion of Visa, Inc. shares from its recent initial public offering. During the
third quarter of 2008, the Company incurred a $7,593,000 other-than-temporary
impairment ("OTTI") charge with respect to its investments in Federal Home Loan
Mortgage Corporation ("Freddie Mac") preferred stock and Federal National
Mortgage Association ("Fannie Mae") common stock. The Fannie Mae and Freddie Mac
stock was written down to a $0 value, however, the shares were still owned by
the Company at December 31, 2009. The cost of any investment sold is determined
by specific identification.

At December 31, 2009, the Company had investment securities with carrying values
of approximately $1,114,749,000, pledged as collateral for FHLB advances, FRB
borrowings, securities sold under agreements to repurchase, U.S. Treasury Tax
and Loan borrowings and deposits of several local government units.

The investments in FHLB stock are required investments related to the Company's
borrowings from FHLB. FHLB obtains its funding primarily through issuance of
consolidated obligations of the FHLB system. The U.S. Government does not
guarantee these obligations, and each of the 12 FHLBs are jointly and severally
liable for repayment of each other's debt.

The following is a summary of investments with unrealized loss positions at
December 31, 2009:

<TABLE>
<CAPTION>
                                                   LESS THAN 12 MONTHS     12 MONTHS OR MORE            TOTAL
                                                  ---------------------   -------------------   --------------------
                                                    FAIR     UNREALIZED    FAIR    UNREALIZED     FAIR    UNREALIZED
             (Dollars in thousands)                 VALUE       LOSS       VALUE      LOSS       VALUE       LOSS
             ----------------------               --------   ----------   ------   ----------   -------   ----------
<S>                                               <C>        <C>          <C>      <C>          <C>       <C>
U.S. Government and federal agency ............   $    208          1         --         --         208          1
State and local governments and other issues ..     74,045      1,835     18,094        985      92,139      2,820
Collateralized debt obligations ...............      6,789      7,899         --         --       6,789      7,899
Residential mortgage-backed securities ........    466,196      3,861     39,780     12,297     505,976     16,158
                                                  --------     ------     ------     ------     -------     ------
   Total temporarily impaired securities ......   $547,238     13,596     57,874     13,282     605,112     26,878
                                                  ========     ======     ======     ======     =======     ======
</TABLE>

The following is a summary of investments with unrealized loss positions at
December 31, 2008:

<TABLE>
<CAPTION>
                                                   Less than 12 months     12 Months or More            Total
                                                  ---------------------   -------------------   --------------------
                                                    Fair     Unrealized    Fair    Unrealized     Fair    Unrealized
             (Dollars in thousands)                 Value       Loss       Value      Loss       Value       Loss
             ----------------------               --------   ----------   ------   ----------   -------   ----------
<S>                                               <C>        <C>          <C>      <C>          <C>       <C>
Government sponsored enterprises ..............   $    104          1        205         1          309          2
State and local governments and other issues ..    142,826      9,772      1,621        50      144,447      9,822
Residential mortgage-backed securities ........    116,004      5,758     12,403       689      128,407      6,447
                                                  --------     ------     ------       ---      -------     ------
   Total temporarily impaired securities ......   $258,934     15,531     14,229       740      273,163     16,271
                                                  ========     ======     ======       ===      =======     ======
</TABLE>


                                       47

<PAGE>

3. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE . . . CONTINUED

The Company assesses individual securities in its investment securities
portfolio for impairment at least on a quarterly basis, and more frequently when
economic or market conditions warrant. An investment is impaired if the fair
value of the security is less than its carrying value at the financial statement
date. If impairment is determined to be other-than-temporary, an impairment loss
is recognized by reducing the amortized cost for the credit loss portion of the
impairment with a corresponding charge to earnings.

For fair value estimates provided by third party vendors, management also
considered the models and methodology, for appropriate consideration of both
observable and unobservable inputs, including appropriately adjusted discount
rates and credit spreads for securities with limited or inactive markets, and
whether the quoted prices reflect orderly transactions, For certain securities,
the Company obtained independent estimates of inputs, including cash flows, in
supplement to third party vendor provided information. The Company also reviewed
financial statements of select issuers, with follow up discussions with issuers'
management for clarification and verification of information relevant to the
Company's impairment analysis.

In evaluating debt securities for other-than-temporary impairment losses,
management assesses whether the Company intends to sell or if it is more
likely-than-not that it will be required to sell impaired debt securities. In so
doing, management considers contractual constraints, liquidity, capital, asset /
liability management and securities portfolio objectives. With respect to its
impaired debt securities at December 31, 2009, management determined that it
does not intend to sell and that there is no expected requirement to sell any of
its impaired debt securities.

As of December 31, 2009, there were 273 investments in an unrealized loss
position and were considered to be temporarily impaired and therefore an
impairment charge has not been recorded. All of such temporarily impaired
investments are debt securities. Residential mortgage-backed securities have the
largest unrealized loss. The fair value of these securities, which have
underlying collateral consisting of U.S. government sponsored enterprise
guaranteed mortgages and non-guaranteed private label whole loan mortgages, were
$505,976,000 at December 31, 2009 of which $454,516,000 was purchased during
2009, the remainder of which had a fair market value of $73,624,000 at December
31, 2008. For the securities purchased in 2009 there has been an unrealized loss
of $3,607,000 since purchase. Of the remaining residential mortgage-backed
securities in a loss position the unrealized loss increased from 8.3 percent of
fair value at December 31, 2008 to 24.4 percent of fair value at December 31,
2009. The fair value of Collateralized Debt Obligation securities in an
unrealized loss position is $6,789,000 with unrealized losses of $7,899,000 or
116 percent of fair value at December 31, 2009; such investments had an
unrealized gain position at December 31, 2008. The fair value of State and Local
Government were $92,139,000 at December 31, 2009 of which $42,703,000 was
purchased during 2009, the remainder of which had a fair market value of
$47,907,000 at December 31, 2008. For the securities purchased in 2009 there has
been an unrealized loss of $1,212,000 since purchase. Of the remaining State and
Local Government securities in a loss position the unrealized loss decreased
from 10.1 percent of fair value at December 31, 2008 to 3.3 percent of fair
value at December 31, 2009.

The Company stratified the 273 debt securities for both severity and duration of
impairment. 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.

<TABLE>
<CAPTION>
                         Unrealized   Number of
(Dollars in thousands)      Loss        Bonds
----------------------   ----------   ---------
<S>                      <C>          <C>
Greater than 40.0%         $ 7,859         6
30.1% to 40.0%               1,370         1
20.1% to 30.0%               7,160         5
15.1% to 20.0%               4,180        10
10.1% to 15.0%                 125         3
5.1% to 10.0%                  705        14
0.1% to 5.0%                 5,479       234
                           -------       ---
   Total                   $26,878       273
                           =======       ===
</TABLE>


                                       48

<PAGE>

3. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE . . . CONTINUED

With respect to the duration of the impaired securities, the Company identified
39 securities which have been continuously impaired for the 12 months ending
December 31, 2009. 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 was in an unrealized loss position. 13 of these 39
securities are non-guaranteed, non-Agency CMOs with an aggregate unrealized loss
of $12,291,000, the most notable of which had an unrealized loss of $1,536,000.
17 of the 39 securities are state and local tax-exempt securities with an
unrealized loss of $985,000, the most notable of which had an unrealized loss of
$233,000. 8 of the 39 securities are residential mortgage-backed securities
issued by U.S. government sponsored agencies, i.e., GNMA, FNMA, FHLMC and SBA,
the aggregate unrealized loss of which was $6,000.

For impaired debt securities for which there was no intent or expected
requirement to sell, management considers available evidence to assess whether
it is more likely-than-not that all amounts due would not be collected In such
assessment, management considers the severity and duration of the impairment,
the credit ratings of the security, the overall deal and payment structure,
including the Company's position within the structure, underlying obligors,
financial condition and near term prospects of the issuer, delinquencies,
defaults, loss severities, recoveries, prepayments, cumulative loss projections,
discounted cash flows and fair value estimates.

Based on an analysis of its impaired securities as of December 31, 2009, the
Company determined that none of such securities had other-than-temporary
impairment.

4. LOANS RECEIVABLE, NET AND LOANS HELD FOR SALE

The following is a summary of loans receivable, net and loans held for sale at:

<TABLE>
<CAPTION>
                                                         December 31,
                                                    ----------------------
              (Dollars in thousands)                   2009         2008
              ----------------------                ----------   ---------
<S>                                                 <C>          <C>
   Residential real estate ......................   $  746,050     786,869
   Loans held for sale ..........................       66,330      54,976
   Commercial real estate .......................    1,900,438   1,935,341
   Other commercial .............................      724,966     645,033
   Consumer .....................................      201,001     208,166
   Home equity ..................................      501,920     507,831
                                                    ----------   ---------
                                                     4,140,705   4,138,216
Net deferred loan fees, premiums and discounts ..      (10,460)     (8,023)
                                                    ----------   ---------
                                                     4,130,245   4,130,193
Allowance for loan and lease losses .............     (142,927)    (76,739)
                                                    ----------   ---------
                                                    $3,987,318   4,053,454
                                                    ==========   =========
</TABLE>

Substantially all of the loans held for sale at December 31, 2009 and 2008 were
committed to be sold. At December 31, 2009, the Company had $2,571,047,000 in
variable rate loans and $1,569,658,000 in fixed rate loans. The weighted average
interest rate on loans was 6.06 percent and 6.93 percent at December 31, 2009
and 2008, respectively. At December 31, 2009, 2008 and 2007, loans sold and
serviced for others were $176,231,000, $181,351,000, and $177,173,000,
respectively. At December 31, 2009, the Company had loans of approximately
$2,502,684,000 pledged as collateral for FHLB advances, FRB and U.S. Treasury
Tax and Loan borrowings.

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
contracts is dependent upon the economic performance in the Company's market
areas. The bank subsidiaries are subject to regulatory limits for the amount of
loans to any individual borrower and all bank subsidiaries are in compliance as
of December 31, 2009. No borrower had outstanding loans or commitments exceeding
10 percent of the Company's consolidated stockholders' equity as of December 31,
2009.

The Company has entered into transactions with its executive officers,
directors, significant shareholders, and their affiliates. The aggregate amount
of loans to such related parties at December 31, 2009 and 2008 was approximately
$86,037,000 and $92,107,000, respectively. During 2009, new loans to such
related parties were approximately $18,882,000 and repayments were approximately
$24,952,000.


                                       49

<PAGE>

4. LOANS RECEIVABLE, NET AND LOANS HELD FOR SALE . . . CONTINUED

The following is a summary of activity in the ALLL:

<TABLE>
<CAPTION>
                                     Years ended December 31,
                                    --------------------------
      (Dollars in thousands)          2009      2008     2007
      ----------------------        --------   ------   ------
<S>                                 <C>        <C>      <C>
Balance at beginning of period ..   $ 76,739   54,413   49,259
Acquisitions ....................         --    2,625      639
Net charge offs .................    (58,430)  (8,779)  (2,165)
Provision .......................    124,618   28,480    6,680
                                    --------   ------   ------
Balance at end of period ........   $142,927   76,739   54,413
                                    ========   ======   ======
</TABLE>

The increase in the ALLL was primarily due to the increase in non-performing
assets since December 31, 2008 and a downturn in global, national and local
economies.

Following is the allocation of the ALLL and the percent of loans in each
category at:

<TABLE>
<CAPTION>
                                                        DECEMBER 31, 2009       December 31, 2008
                                                     ----------------------   ---------------------
                                                                 PERCENT OF              Percent of
                                                                OF LOANS IN             of Loans in
              (Dollars in thousands)                  AMOUNT      CATEGORY     Amount     Category
              ----------------------                 --------   -----------   -------   -----------
<S>                                                  <C>        <C>           <C>       <C>
Residential real estate and loans held for sale ..   $ 13,496       19.6%     $ 7,233       20.3%
Commercial real estate ...........................     66,791       45.9%      35,305       46.8%
Other commercial .................................     39,558       17.5%      21,590       15.6%
Consumer .........................................      9,663        4.9%       5,636        5.0%
Home equity ......................................     13,419       12.1%       6,975       12.3%
                                                     --------      -----      -------      -----
                                                     $142,927      100.0%     $76,739      100.0%
                                                     ========      =====      =======      =====
</TABLE>

The following is a summary of the non-performing loans:

<TABLE>
<CAPTION>
                                                    Years ended December 31,
                                                   --------------------------
             (Dollars in thousands)                  2009      2008     2007
             ----------------------                --------   ------   ------
<S>                                                <C>        <C>      <C>
Impaired loans .................................   $218,742   79,949   12,152
Average recorded investment in impaired loans ..    145,230   40,985    7,311
Impairment allowance ...........................     19,760    7,999    2,827
Non-accrual loans ..............................    198,281   64,301    8,560
Accruing loans 90 days or more overdue .........      5,537    8,613    2,685
</TABLE>

As of December 31, 2009, the Company had impaired loans without a valuation
allowance of $141,613,000 and impaired loans with a valuation allowance of
$77,129,000. Interest income that would have been recorded on non-accrual loans
if such loans had been current for the entire period would have been
approximately $11,730,000, $4,434,000, and $683,000 for the years ended December
31, 2009, 2008, and 2007. Interest income recognized on non-accruing loans for
the years ended December 31, 2009, 2008, and 2007 was not significant.

The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and letters of
credit, and involve, to varying degrees, elements of credit risk. The Company's
exposure to credit loss in the event of nonperformance by the other party to the
financial instrument for commitments to extend credit is represented by the
contractual amount of those instruments. The Company uses the same credit
policies in making commitments and conditional obligations as it does for
on-balance-sheet instruments.


                                       50
<PAGE>

4. LOANS RECEIVABLE, NET AND LOANS HELD FOR SALE . . . CONTINUED

The Company's troubled debt restructuring loans are included in the amount of
impaired loans. As of December 31, 2009, the Company had troubled debt
restructuring loans of $64,618,000, of which there were $1,245,000 of additional
outstanding commitments. The amount of charge-offs on troubled debt
restructuring loans during 2009 was $7,776,000.

The Company had outstanding commitments as follows:

<TABLE>
<CAPTION>
                                           December 31,
                                       ------------------
       (Dollars in thousands)            2009       2008
       ----------------------          --------   -------
<S>                                    <C>        <C>
Loans and loans in process .........   $457,754   648,788
Unused consumer lines of credit ....    286,621   272,181
Letters of credit ..................     28,691    36,934
                                       --------   -------
                                       $773,066   957,903
                                       ========   =======
</TABLE>

5. PREMISES AND EQUIPMENT, NET

Premises and equipment, net of accumulated depreciation, consist of the
following at:

<TABLE>
<CAPTION>
                                          December 31,
                                       ------------------
       (Dollars in thousands)            2009      2008
       ----------------------          --------   -------
<S>                                    <C>        <C>
Land ...............................   $ 23,315    20,633
Office buildings and construction
   in progress .....................    119,420   113,742
Furniture, fixtures and equipment ..     58,013    53,593
Leasehold improvements .............      8,969     7,528
Accumulated depreciation ...........    (68,796)  (61,547)
                                       --------   -------
                                       $140,921   133,949
                                       ========   =======
</TABLE>

Depreciation expense for the years ended December 31, 2009, 2008, and 2007 was
$10,450,000, $9,814,000, and $8,508,000, respectively. Interest expense
capitalized for various construction projects for the years ended December 31,
2009, 2008 and 2007 was $33,000, $71,000 and $264,000, respectively.


                                       51

<PAGE>

6. GOODWILL AND OTHER INTANGIBLE ASSETS

The following table sets forth information regarding the Company's core deposit
intangibles and mortgage servicing rights:

<TABLE>
<CAPTION>
                                                          Mortgage
                                          Core Deposit    Servicing
         (Dollars in thousands)            Intangible     Rights(1)    Total
         ----------------------           ------------   ----------   ------
<S>                                       <C>            <C>          <C>
AS OF DECEMBER 31, 2009
   Gross carrying value                     $ 31,847
   Accumulated amortization                  (17,910)
                                            --------
   Net carrying value                       $ 13,937        1,041     14,978
                                            ========
AS OF DECEMBER 31, 2008
   Gross carrying value                     $ 27,807
   Accumulated amortization                  (14,794)
                                            --------
   Net carrying value                       $ 13,013        1,262     14,275
                                            ========
WEIGHTED-AVERAGE AMORTIZATION PERIOD
   (Period in years)                             9.1          9.4        9.1
AGGREGATE AMORTIZATION EXPENSE
   For the year ended December 31, 2009     $  3,116          250      3,366
   For the year ended December 31, 2008        3,051          176      3,227
   For the year ended December 31, 2007        3,202          188      3,390
ESTIMATED AMORTIZATION EXPENSE
   For the year ended December 31, 2010     $  2,603           74      2,677
   For the year ended December 31, 2011        1,895           72      1,967
   For the year ended December 31, 2012        1,534           70      1,604
   For the year ended December 31, 2013        1,283           68      1,351
   For the year ended December 31, 2014        1,034           65      1,099
</TABLE>

(1)  Gross carrying value and accumulated amortization are not readily available

The following is a summary of activity in goodwill for the years ended December
31, 2009 and 2008:

<TABLE>
<CAPTION>
                                    Years ended
                                    December 31,
                                 ------------------
    (Dollars in thousands)         2009       2008
    ----------------------       --------   -------
<S>                              <C>        <C>
Balance at beginning of period   $146,752   140,301
Acquisition of San Juans             (493)    6,451
                                 --------   -------
Balance at end of period         $146,259   146,752
                                 ========   =======
</TABLE>


                                       52

<PAGE>

7. DEPOSITS

Deposits consist of the following at:

<TABLE>
<CAPTION>
                                                               December 31,
                                                  --------------------------------------
            (Dollars in thousands)                       2009                 2008
            ----------------------                ------------------   -----------------
<S>                                               <C>          <C>     <C>         <C>
Demand accounts ...............................   $  810,550    19.8%    747,439    22.9%
                                                  ----------   -----   ---------   -----
NOW accounts ..................................      749,535    18.3%    515,211    15.8%
Savings accounts ..............................      324,234     7.9%    280,895     8.6%
Money market demand accounts ..................      907,949    22.1%    779,154    23.9%
Certificates of deposit .......................    1,307,884    31.9%    939,776    28.8%
                                                  ----------   -----   ---------   -----
   Total interest bearing deposits ............    3,289,602    80.2%  2,515,036    77.1%
                                                  ----------   -----   ---------   -----
   Total deposits .............................   $4,100,152   100.0%  3,262,475   100.0%
                                                  ==========   =====   =========   =====
Deposits with a balance $100,000 and greater ..   $2,315,750           1,621,430
                                                  ==========           =========
</TABLE>

At December 31, 2009, scheduled maturities of certificates of deposit are as
follows:

<TABLE>
<CAPTION>
                                                  Years ending December 31,
                                      --------------------------------------------------
(Dollars in thousands)      TOTAL        2010       2011     2012     2013    Thereafter
----------------------   ----------   ---------   -------   ------   ------   ----------
<S>                      <C>          <C>         <C>       <C>      <C>      <C>
1.00% and lower ......   $  170,133     169,896        36      194        7         --
1.01% to 2.00% .......      590,288     553,632    33,922    1,844      356        534
2.01% to 3.00% .......      379,977     280,048    64,292   29,374    1,724      4,539
3.01% to 4.00% .......       93,894      48,593    23,189    4,807    5,806     11,499
4.01% to 5.00% .......       43,226      26,662     8,863    4,445    3,069        187
5.01% to 6.00% .......       30,098      12,429    10,849    6,598      101        121
6.01% to 7.00% .......          246         120       126       --       --         --
7.01% to 8.00% .......           22          --        --       22       --         --
                         ----------   ---------   -------   ------   ------     ------
                         $1,307,884   1,091,380   141,277   47,284   11,063     16,880
                         ==========   =========   =======   ======   ======     ======
</TABLE>

Interest expense on deposits is summarized as follows:

<TABLE>
<CAPTION>
                                              Years ended December 31,
                                             -------------------------
          (Dollars in thousands)               2009     2008     2007
          ----------------------             -------   ------   ------
<S>                                          <C>       <C>      <C>
NOW accounts .............................   $ 2,280    3,014    4,708
Savings accounts .........................       947    1,865    2,679
Money market demand accounts .............     8,564   17,234   27,248
Certificates of deposit ..................    26,638   32,899   46,824
                                             -------   ------   ------
                                             $38,429   55,012   81,459
                                             =======   ======   ======
</TABLE>

The Company reclassified approximately $2,894,000 and $3,199,000 of overdraft
demand deposits to loans as of December 31, 2009 and 2008, respectively. NOW,
money market demand and certificates of deposit totals include wholesale
deposits of $350,760,000 as of December 31, 2009. The Company has entered into
deposit transactions with its executive officers, directors, significant
shareholders, and their affiliates. The aggregate amount of deposits with such
related parties at December 31, 2009, and 2008 was approximately $53,082,000 and
$59,343,000, respectively.


                                       53

<PAGE>

8. BORROWINGS

Advances from the FHLB consist of the following:

<TABLE>
<CAPTION>
                                                                                  Totals as of
                                  Maturing in Years ending December 31,           December 31,
                         ---------------------------------------------------   -----------------
(Dollars in thousands)     2010     2011    2012    2013   2014   Thereafter     2009      2008
----------------------   --------   ----   ------   ----   ----   ----------   -------   -------
<S>                      <C>        <C>    <C>      <C>    <C>    <C>          <C>       <C>
0.00% to 1.00% .......   $585,282     --       --     --     --          --    585,282   175,900
1.01% to 2.00% .......         --     --       --     --     --          --         --        --
2.01% to 3.00% .......         --     --       --     --     --      20,000     20,000        --
3.01% to 4.00% .......         --     --   40,000     --     --     100,000    140,000   116,000
4.01% to 5.00% .......        750    207   42,000     --     --         779     43,736    45,142
5.01% to 6.00% .......         --     --       --     --     --       1,074      1,074     1,091
6.01% to 7.00% .......         25     --       --     --     --         250        275       323
                         --------    ---   ------    ---    ---     -------    -------   -------
                         $586,057    207   82,000     --     --     122,103    790,367   338,456
                         ========    ===   ======    ===    ===     =======    =======   =======
</TABLE>

In addition to specifically pledged loans and investment securities, the FHLB
advances are collateralized by FHLB stock owned by the Company and a blanket
assignment of the unpledged qualifying loans and investments. The total amount
of advances available as of December 31, 2009 was approximately $309,476,000.
The weighted average fixed interest rate on these advances was 1.14 percent and
2.10 percent at December 31, 2009 and 2008, respectively.

With respect to $202,000,000 of advances at December 31, 2009, the FHLB holds
put options that will be exercised on the quarterly measurement date, after the
initial call date, if three month LIBOR is greater than 8%. The FHLB put options
as of December 31, 2009 are summarized as follows:

<TABLE>
<CAPTION>
            (Dollars in thousands)
---------------------------------------------
             Interest                Earliest
 Amount        Rate       Maturity     Call
--------   ------------   --------   --------
<S>        <C>            <C>        <C>
$ 82,000   3.49% - 4.83%    2012       2010
  75,000   3.16% - 4.64%    2015       2010
  45,000   2.93% - 3.05%    2016       2010
--------
$202,000
========
</TABLE>

The Company had borrowings through the FRB of $225,000,000 and $914,000,000 as
of December 31, 2009 and 2008, respectively. The borrowings have a weighted
average fixed interest rate of 0.26 percent, mature in 2010 and are
collateralized by loans and investments with an available balance of
$564,414,000 as of December 31, 2009.

The Company had U.S. Treasury Tax and Loan borrowings of $5,136,000 and
$6,067,000 as of December 31, 2009 and 2008, respectively. The borrowings as of
December 31, 2009 are short term and have an interest rate of fed funds less 25
basis points and are collateralized with loans and investments with an available
balance of $9,060,000.


                                       54

<PAGE>

9. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase consist of the following at:

<TABLE>
<CAPTION>
                                                                BOOK        MARKET
                                                 WEIGHTED     VALUE OF     VALUE OF
        December 31, 2009          REPURCHASE     AVERAGE    UNDERLYING   UNDERLYING
     (Dollars in thousands)          AMOUNT     FIXED RATE     ASSETS       ASSETS
     ----------------------        ----------   ----------   ----------   ----------
<S>                                <C>          <C>          <C>          <C>
Securities sold under agreements
   to repurchase within:
   Overnight ...................    $210,132       0.92%      $210,449      206,450
   Term up to 30 days ..........         410       2.75%           476          487
   Term over 90 days ...........       1,964       2.34%         2,284        2,339
                                    --------                  --------      -------
                                    $212,506       0.94%      $213,209      209,276
                                    ========                  ========      =======
</TABLE>

<TABLE>
<CAPTION>
        December 31, 2008
     (Dollars in thousands)
     ----------------------
<S>                                <C>          <C>          <C>          <C>
Securities sold under agreements
   to repurchase within:
   Overnight ...................    $186,217       1.22%      $201,185     191,985
   Term 30 - 90 days ...........       2,146       2.74%            --          --
                                    --------                  --------     -------
                                    $188,363       1.23%      $201,185     191,985
                                    ========                  ========     =======
</TABLE>

The securities, consisting of U.S. Agency and U.S. Government Sponsored
Enterprises issued or guaranteed residential mortgage-backed securities, subject
to agreements to repurchase are for the same securities originally sold, and are
held in a custody account by a third party. For the years ended December 31,
2009 and 2008, securities sold under agreements to repurchase averaged
approximately $204,503,000 and $188,952,000, respectively, and the maximum
outstanding at any month end during the year was approximately $234,914,000 and
$196,461,000, respectively.


                                       55
<PAGE>

10. SUBORDINATED DEBENTURES

Trust Preferred Securities were issued by the Company's seven trust
subsidiaries, the common stock of which is wholly-owned by the Company, in
conjunction with the Company issuing Subordinated Debentures to the trust
subsidiaries. The terms of the Subordinated Debentures are the same as the terms
of the Trust Preferred Securities. The Company guaranteed the payment of
distributions and payments for redemption or liquidation of the Trust Preferred
Securities to the extent of funds held by the trust subsidiaries. The
obligations of the Company under the Subordinated Debentures together with the
guarantee and other back-up obligations, in the aggregate, constitute a full and
unconditional guarantee by the Company of the obligations of all trusts under
the Trust Preferred Securities.

The Trust Preferred Securities are subject to mandatory redemption upon
repayment of the Subordinated Debentures at their stated maturity date or the
earlier redemption in an amount equal to their liquidation amount plus
accumulated and unpaid distributions to the date of redemption. Interest
distributions are payable quarterly. The Company may defer the payment of
interest at any time from time to time for a period not exceeding 20 consecutive
quarters provided that the deferral period does not extend past the stated
maturity. During any such deferral period, distributions on the Trust Preferred
Securities will also be deferred and the Company's ability to pay dividends on
its common shares will be restricted.

Subject to approval by the FRB, the Trust Preferred Securities may be redeemed
at par prior to maturity at the Company's option on or after the redemption
date. The Trust Preferred Securities may also be redeemed at any time in whole
(but not in part) for the Trusts in the event of unfavorable changes in laws or
regulations that result in (1) subsidiary trusts becoming subject to federal
income tax on income received on the Subordinated Debentures, (2) interest
payable by the Company on the Subordinated Debentures becoming non-deductible
for federal tax purposes, (3) the requirement for the trusts to register under
the Investment Company Act of 1940, as amended, or (4) loss of the ability to
treat the Trust Preferred Securities as "Tier 1 Capital" under the FRB capital
adequacy guidelines.

The terms of the Subordinated Debentures, arranged by maturity date, are
reflected in the table below. The amounts include fair value adjustments from
acquisitions.

<TABLE>
<CAPTION>
                                                       Rate at
                                                    December 31,       Fixed/          Variable Rate       Maturity   Redemption
        (Dollars in thousands)            Amount        2009          Variable         Structure (1)          Date       Date
        ----------------------           --------   ------------   -------------   ---------------------   --------   ----------
<S>                                      <C>        <C>            <C>             <C>                     <C>        <C>
First Co Trust 01 ....................   $  2,766      3.581%         Variable     3 mo LIBOR plus 3.30%   07/31/31    07/31/11
First Co Trust 03 ....................      2,047      3.501%         Variable     3 mo LIBOR plus 3.25%   03/26/33    03/26/08
Glacier Capital Trust II .............     46,393      3.034%         Variable     3 mo LIBOR plus 2.75%   04/07/34    04/07/09
Citizens Capital Trust I .............      5,155      2.903%         Variable     3 mo LIBOR plus 2.65%   06/17/34    06/17/09
Glacier Capital Trust III ............     36,083      6.078%      Fixed 5 years   3 mo LIBOR plus 1.29%   04/07/36    04/07/11
Glacier Capital Trust IV .............     30,928      7.235%      Fixed 5 years   3 mo LIBOR plus 1.57%   09/15/36    09/15/11
San Juan Trust I .....................      1,616      6.681%      Fixed 5 years   3 mo LIBOR plus 1.82%   03/01/37    03/01/12
                                         --------
                                         $124,988
                                         ========
</TABLE>

(1)  For fixed rate debentures, this will be the rate structure upon conversion
     to variable rate.


                                       56

<PAGE>

11. REGULATORY CAPITAL

The FRB has adopted capital adequacy guidelines pursuant to which it assesses
the adequacy of capital in supervising a bank holding company. The following
table illustrates the FRB's adequacy guidelines and the Company's and bank
subsidiaries' compliance with those guidelines as of December 31, 2009.

<TABLE>
<CAPTION>
                                                             Minimum Capital   Well Capitalized
                                                Actual         Requirement        Requirement
                                           ---------------   ---------------   -----------------
                                            Amount   Ratio    Amount   Ratio     Amount   Ratio
                                           -------   -----   -------   -----    -------   -----
<S>                                        <C>       <C>     <C>       <C>     <C>        <C>
Tier 1 capital (to risk weighted assets)
   Consolidated ........................   656,880   14.02%  187,439   4.00%    281,158    6.00%
   Glacier .............................   128,765   12.33%   41,781   4.00%     62,672    6.00%
   Mountain West .......................   129,649   13.39%   38,728   4.00%     58,092    6.00%
   First Security ......................    99,762   14.91%   26,756   4.00%     40,135    6.00%
   1st Bank ............................    58,119   14.99%   15,504   4.00%     23,256    6.00%
   Western .............................    61,594   14.67%   16,794   4.00%     25,191    6.00%
   Big Sky .............................    49,766   16.06%   12,393   4.00%     18,589    6.00%
   Valley ..............................    28,495   13.11%    8,694   4.00%     13,041    6.00%
   First National ......................    29,517   15.98%    7,390   4.00%     11,084    6.00%
   Citizens ............................    22,201   11.32%    7,844   4.00%     11,766    6.00%
   First Bank-MT .......................    18,437   12.73%    5,794   4.00%      8,691    6.00%
   San Juans ...........................    17,942   11.11%    6,462   4.00%      9,693    6.00%
Total capital (to risk weighted assets)
   Consolidated ........................   716,498   15.29%  374,877   8.00%    468,597   10.00%
   Glacier .............................   142,142   13.61%   83,562   8.00%    104,453   10.00%
   Mountain West .......................   142,066   14.67%   77,456   8.00%     96,820   10.00%
   First Security ......................   108,246   16.18%   53,513   8.00%     66,891   10.00%
   1st Bank ............................    63,039   16.26%   31,009   8.00%     38,761   10.00%
   Western .............................    66,886   15.93%   33,588   8.00%     41,985   10.00%
   Big Sky .............................    53,721   17.34%   24,786   8.00%     30,982   10.00%
   Valley ..............................    31,232   14.37%   17,388   8.00%     21,734   10.00%
   First National ......................    31,196   16.89%   14,779   8.00%     18,474   10.00%
   Citizens ............................    24,682   12.59%   15,688   8.00%     19,610   10.00%
   First Bank-MT .......................    20,261   13.99%   11,588   8.00%     14,485   10.00%
   San Juans ...........................    19,988   12.37%   12,924   8.00%     16,155   10.00%
Leverage capital (to average assets)
   Consolidated ........................   656,880   11.20%  234,518   4.00%        N/A     N/A
   Glacier .............................   128,765   10.09%   51,043   4.00%     63,803    5.00%
   Mountain West .......................   129,649   10.98%   47,217   4.00%     59,021    5.00%
   First Security ......................    99,762   11.32%   35,237   4.00%     44,046    5.00%
   1st Bank ............................    58,119    9.74%   23,865   4.00%     29,832    5.00%
   Western .............................    61,594   10.19%   24,185   4.00%     30,231    5.00%
   Big Sky .............................    49,766   13.67%   14,561   4.00%     18,201    5.00%
   Valley ..............................    28,495    8.57%   13,297   4.00%     16,621    5.00%
   First National ......................    29,517   10.38%   11,376   4.00%     14,220    5.00%
   Citizens ............................    22,201    9.62%    9,227   4.00%     11,534    5.00%
   First Bank-MT .......................    18,437    9.19%    8,020   4.00%     10,026    5.00%
   San Juans ...........................    17,942   10.33%    6,948   4.00%      8,685    5.00%
</TABLE>


                                       57

<PAGE>

11. REGULATORY CAPITAL . . . CONTINUED

The following table illustrates the FRB's adequacy guidelines and the Company's
and bank subsidiaries' compliance with those guidelines as of December 31, 2008:

<TABLE>
<CAPTION>
                                                             Minimum Capital   Well Capitalized
                                                Actual         requirement        requirement
                                           ---------------   ---------------   -----------------
                                            Amount   Ratio    Amount   Ratio     Amount   Ratio
                                           -------   -----   -------   -----    -------   -----
<S>                                        <C>       <C>     <C>       <C>     <C>        <C>
Tier 1 capital (to risk weighted assets)
   Consolidated ........................   640,275   14.30%  179,117   4.00%    268,676    6.00%
   Glacier .............................   119,748   11.31%   42,341   4.00%     63,512    6.00%
   Mountain West .......................   101,315   10.62%   38,151   4.00%     57,226    6.00%
   First Security ......................    96,800   14.29%   27,088   4.00%     40,632    6.00%
   1st Bank ............................    38,527   12.58%   12,252   4.00%     18,378    6.00%
   Western .............................    59,825   13.26%   18,043   4.00%     27,065    6.00%
   Big Sky .............................    38,561   11.89%   12,974   4.00%     19,462    6.00%
   Valley ..............................    29,269   13.65%    8,574   4.00%     12,861    6.00%
   Citizens ............................    19,564   10.84%    7,217   4.00%     10,826    6.00%
   First Bank-MT .......................    15,149   11.70%    5,179   4.00%      7,769    6.00%
   San Juans ...........................    13,490    9.26%    5,830   4.00%      8,745    6.00%
Total capital (to risk weighted assets)
   Consolidated ........................   696,505   15.55%  358,234   8.00%    447,793   10.00%
   Glacier .............................   133,051   12.57%   84,682   8.00%    105,853   10.00%
   Mountain West .......................   113,287   11.88%   76,302   8.00%     95,377   10.00%
   First Security ......................   105,303   15.55%   54,176   8.00%     67,719   10.00%
   1st Bank ............................    42,370   13.83%   24,504   8.00%     30,630   10.00%
   Western .............................    65,481   14.52%   36,087   8.00%     45,108   10.00%
   Big Sky .............................    42,642   13.15%   25,949   8.00%     32,436   10.00%
   Valley ..............................    31,959   14.91%   17,148   8.00%     21,435   10.00%
   Citizens ............................    21,825   12.10%   14,434   8.00%     18,043   10.00%
   First Bank-MT .......................    16,772   12.95%   10,358   8.00%     12,948   10.00%
   San Juans ...........................    15,322   10.51%   11,660   8.00%     14,575   10.00%
Leverage capital (to average assets)
   Consolidated ........................   640,275   12.38%  206,812   4.00%        N/A     N/A
   Glacier .............................   119,748    9.79%   48,929   4.00%     61,161    5.00%
   Mountain West .......................   101,315    8.68%   46,707   4.00%     58,383    5.00%
   First Security ......................    96,800   11.31%   34,229   4.00%     42,786    5.00%
   1st Bank ............................    38,527    8.08%   19,077   4.00%     23,847    5.00%
   Western .............................    59,825   10.71%   22,335   4.00%     27,919    5.00%
   Big Sky .............................    38,561   11.62%   13,272   4.00%     16,589    5.00%
   Valley ..............................    29,269    9.11%   12,846   4.00%     16,058    5.00%
   Citizens ............................    19,564    9.46%    8,274   4.00%     10,343    5.00%
   First Bank-MT .......................    15,149   10.17%    5,961   4.00%      7,451    5.00%
   San Juans ...........................    13,490    9.66%    5,586   4.00%      6,982    5.00%
</TABLE>

N/A - not applicable

The Federal Deposit Insurance Corporation Improvement Act generally restricts a
depository institution from making any capital distribution (including payment
of a dividend) or paying any management fee to its bank holding company if the
institution would thereafter be capitalized at less than 8 percent total capital
(to risk weighted assets), 4 percent tier 1 capital (to risk weighted assets),
or a 4 percent tier 1 capital (to average assets). At December 31, 2009 and
2008, each of the bank subsidiaries' capital measures exceed the highest
supervisory threshold, which requires total capital (to risk weighted assets) of
at least 10 percent, tier 1 capital (to risk weighted assets) of at least 6
percent, and a leverage capital (to average assets) of at least 5 percent.


                                       58

<PAGE>

11. REGULATORY CAPITAL . . . CONTINUED

Each of the bank subsidiaries was considered well capitalized by the respective
regulator as of December 31, 2009 and 2008. There are no conditions or events
since year end that management believes have changed the Company's or
subsidiaries' risk-based capital category. In addition to the minimum regulatory
capital requirements, certain bank subsidiaries have added regulatory capital
requirements of which they are in compliance as of December 31, 2009.

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. The bank
subsidiaries are subject to certain restrictions on the amount of dividends that
they may declare without prior regulatory approval. At December 31, 2009,
$71,537,000 of retained earnings at the bank subsidiaries is available to the
parent company without regulatory approval.

12. FEDERAL AND STATE INCOME TAXES

The following is a summary of consolidated income tax expense for:

<TABLE>
<CAPTION>
                                             Years ended December 31,
                                           ---------------------------
         (Dollars in thousands)              2009       2008     2007
         ----------------------            --------   -------   ------
<S>                                        <C>        <C>       <C>
Current:
   Federal .............................   $ 26,557    37,373   29,016
   State ...............................      7,189     8,271    6,491
                                           --------   -------   ------
      Total current tax expense ........     33,746    45,644   35,507
                                           --------   -------   ------
Deferred:
   Federal .............................    (24,656)   (9,979)    (348)
   State ...............................     (5,099)   (2,064)     (72)
                                           --------   -------   ------
      Total deferred tax benefit .......    (29,755)  (12,043)    (420)
                                           --------   -------   ------
         Total income tax expense ......   $  3,991    33,601   35,087
                                           ========   =======   ======
</TABLE>

Combined federal and state income tax expense differs from that computed at the
federal statutory corporate tax rate as follows for:

<TABLE>
<CAPTION>
                                                          Years ended
                                                         December 31,
                                                     --------------------
                                                      2009   2008    2007
                                                     -----   ----    ----
<S>                                                  <C>     <C>     <C>
Federal statutory rate ...........................    35.0%  35.0%   35.0%
State taxes, net of federal income tax benefit ...     3.8%   4.1%    4.0%
Tax-exempt interest income .......................   -21.0%  -4.9%   -4.4%
Tax credits ......................................    -3.3%  -0.1%    0.0%
Bargain purchase gain ............................    -3.2%   0.0%    0.0%
Other, net .......................................    -0.9%  -0.2%   -0.8%
                                                     -----   ----    ----
                                                      10.4%  33.9%   33.8%
                                                     =====   ====    ====
</TABLE>


                                       59

<PAGE>

12. FEDERAL AND STATE INCOME TAXES . . . CONTINUED

The tax effect of temporary differences which give rise to a significant portion
of deferred tax assets and deferred tax liabilities are as follows:

<TABLE>
<CAPTION>
                                                             December 31,
                                                          ------------------
                 (Dollars in thousands)                     2009       2008
                 ----------------------                   --------   -------
<S>                                                       <C>        <C>
Deferred tax assets:
   Allowance for loan and lease losses.................   $ 56,067    30,061
   Non-accrual interest ...............................      4,524     1,652
   Stock based compensation ...........................      3,612     3,100
   Impairment of equity securities (FHLMC & FNMA) .....      2,976     2,976
   Deferred compensation ..............................      2,877     2,896
   Employee benefits ..................................      2,046     1,617
   Available-for-sale securities ......................        224       803
   Other ..............................................      1,539       671
                                                          --------   -------
      Total gross deferred tax assets .................     73,865    43,776
                                                          --------   -------
Deferred tax liabilities:
   Federal Home Loan Bank stock dividends .............    (10,234)  (10,012)
   Intangibles ........................................     (8,352)   (7,897)
   Fixed assets, due to differences in depreciation ...     (7,704)   (6,393)
   Deferred loan costs ................................     (4,338)   (3,768)
   Other ..............................................     (2,155)   (1,414)
                                                          --------   -------
      Total gross deferred tax liabilities ............    (32,783)  (29,484)
                                                          --------   -------
         Net deferred tax asset .......................   $ 41,082    14,292
                                                          ========   =======
</TABLE>

The Company and its bank subsidiaries join together in the filing of
consolidated income tax returns in the following jurisdictions: federal,
Montana, Idaho, Colorado and Utah. Although 1st Bank and First National have
operations in Wyoming and Mountain has operations in Washington, neither Wyoming
nor Washington imposes a corporate-level income tax. All required income tax
returns have been timely filed. The following schedule summarizes the years that
remain subject to examination:

<TABLE>
<CAPTION>
           Years ended December 31,
           ------------------------
<S>        <C>
Federal    2006, 2007 and 2008
Montana    2003, 2004, 2005, 2006, 2007 and 2008
Idaho      2003, 2004, 2005, 2006, 2007 and 2008
Colorado   2005, 2006, 2007 and 2008
Utah       2006, 2007 and 2008
</TABLE>

During 2009, the Company made investments in CDE's which received NMTC
allocations. 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. In addition to previous LIHTC investments,
during the third quarter 2009, the Company made another investment in a LIHTC.
The LIHTC is an indirect Federal subsidy used to finance the development of
affordable rental housing for low-income households. The federal income tax
credits received are claimed over a ten-year credit allowance period. During the
year, the Company invested in Qualified Zone Academy and Qualified School
Construction bonds whereby the Company receives quarterly federal income tax
credits until the bonds mature. The federal income tax credits on the bonds are
subject to federal and state income tax.


                                       60

<PAGE>

12. FEDERAL AND STATE INCOME TAXES . . . CONTINUED

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

<TABLE>
<CAPTION>
                             New        Low-Income    Investment
      Years ended           Market       Housing      Securities
(Dollars in thousands)   Tax Credits   Tax Credits   Tax Credits
----------------------   -----------   -----------   -----------
<S>                      <C>           <C>           <C>
   2010                      1,530          337           536
   2011                      1,530          785           541
   2012                      1,836          785           541
   2013                      1,836          785           541
   2014                      1,836          785           541
Thereafter                   1,836        3,324         3,834
                           -------        -----         -----
                           $10,404        6,801         6,534
                           =======        =====         =====
</TABLE>

In accordance with FASB ASC Topic 740, Income Taxes, the Company determined its
unrecognized tax benefit to be $0 and $152,000 as of December 31, 2009 and 2008,
respectively. A reconciliation of the beginning and ending amounts of
unrecognized tax benefits is as follows:

<TABLE>
<CAPTION>
                                                                    December 31,
                                                                    ------------
                      (Dollars in thousands)                         2009   2008
                      ----------------------                        -----   ----
<S>                                                                 <C>     <C>
Balance at beginning of period ..................................   $ 152    210
Reduction of unrecognized tax benefits for expired periods ......    (152)   (58)
                                                                    -----   ----
Balance at end of period ........................................   $  --    152
                                                                    =====   ====
</TABLE>

The Company recognizes interest related to unrecognized income tax benefits in
interest expense and penalties are recognized in other expense. During the years
ended December 31, 2009 and 2008, the Company recognized $0 interest expense and
recognized $0 penalty with respect to income tax liabilities. The Company had
approximately $0 and $37,000 accrued for the payment of interest at December 31,
2009 and 2008, respectively. The Company had accrued $0 for the payment of
penalties at December 31, 2009 and 2008.

Deferred tax assets are reduced by a valuation allowance, if based on the weight
of available evidence, it is more-likely-than not that some portion or all of
the deferred tax assets will not be realized. The term more-likely-than not
means a likelihood of more than 50 percent. The Company has assessed the need
for a valuation allowance and determined that a valuation allowance is not
necessary at December 31, 2009 and 2008. The Company believes that it is more
likely than not that the Company's deferred tax assets will be realized by
offsetting taxable income in carryback years, and by offsetting future taxable
income from reversing taxable temporary differences and anticipated future
taxable income (exclusive of reversing temporary differences). In its
assessment, the Company considered its strong earnings history, no history of
tax credit carryforwards expiring unused, and no future net operating losses
(for tax purposes) expected for any bank subsidiary.

Retained earnings at December 31, 2009 includes approximately $3,600,000 for
which no provision for federal income tax has been made. This amount represents
the base year federal reserve for bad debt, which is essentially an allocation
of earnings to pre-1988 bad debt deductions for income tax purposes only. This
amount is treated as a permanent difference and deferred taxes are not
recognized unless it appears that this bad debt reserve will be reduced and
thereby result in taxable income in the foreseeable future. The Company is not
currently contemplating any changes in its business or operations which would
result in a recapture of this federal reserve for bad debt into taxable income.


                                       61

<PAGE>

13. EMPLOYEE BENEFIT PLANS

The Company has a profit sharing plan that is subject to a "safe harbor"
provision requiring an annual 3 percent non-elective contribution by the
Company. The Company amended the plan during 2009, retaining the same safe
harbor contribution and modifying the 401(k) match to be discretionary. To be
considered eligible for the plan, an employee must be 21 year of age and have
been employed for a full calendar quarter. In addition, elective contributions,
depending on the Company's profitability, may be made to the plan. To be
considered eligible for the elective contributions, an employee must be 21 years
of age, worked 501 hours in the plan year and be employed as of the last day of
the plan year. Entry dates for the profit sharing plan are the first day of the
plan year and first day of the fourth, seventh, and tenth months. Participants
are at all times fully vested in all contributions. The total profit sharing
plan expense for the years ended December 31, 2009, 2008, and 2007 was
approximately $2,149,000, $3,034,000 and $3,964,000 respectively.

The Company also has an employees' savings plan. The plan allows eligible
employees to contribute up to 60 percent of their eligible annual compensation.
Currently, the Company matches an amount equal to 50 percent of the employee's
contribution, up to 6 percent of the employee's eligible compensation. Entry
dates for the employees' savings plan are the first day of the plan year and
first day of the fourth, seventh, and tenth months. Participants are at all
times fully vested in all contributions. The Company's contribution to the
savings plan for the years ended December 31, 2009, 2008 and 2007 was
approximately $1,538,000, $1,445,000, and $1,333,000, respectively.

The Company has a non-funded deferred compensation plan for directors and senior
officers. The plan provides for the deferral of cash payments of up to 50
percent of a participants' salary, and for 100 percent of bonuses and directors
fees, at the election of the participant. The total amount deferred was
approximately $408,000, $461,000, and $543,000, for the years ending December
31, 2009, 2008, and 2007, respectively. The participant receives an earnings
credit at a rate equal to 50 percent of the Company's return on equity. The
total earnings for the years ended 2009, 2008, and 2007 for this plan were
approximately $124,000, $261,000, and $259,000, respectively. In connection with
several acquisitions, the Company assumed the obligations of deferred
compensation plans for certain key employees. As of December 31, 2009, the
liability related to the obligations was approximately $1,500,000 and was
included in other liabilities of the Consolidated Statements of Financial
Condition. The amount expensed related to the obligations during 2009 was
insignificant.

The Company has a Supplemental Executive Retirement Plan ("SERP") which is
intended to supplement payments due to participants upon retirement under the
Company's other qualified plans. The Company credits the participant's account
on annual basis for an amount equal to employer contributions that would have
otherwise been allocated to the participant's account under the tax-qualified
plans were it not for limitations imposed by the Internal Revenue Service
("IRS"), or the participation in the non-funded deferred compensation plan.
Eligible employees include participants of the non-funded deferred compensation
plan and employees whose benefits were limited as a result of IRS regulations.
The Company's required contribution to the SERP for the years ended December 31,
2009, 2008 and 2007 was approximately $20,000, $31,000, and $70,000,
respectively. The participant receives an earnings credit at a rate equal to 50
percent of the Company's return on equity. The total earnings for the years
ended 2009, 2008, and 2007 for this plan were approximately $24,000, $50,000,
and $52,000, respectively.

The Company has elected to self-insure certain costs related to employee health
and dental benefit programs. Costs resulting from noninsured losses are expensed
as incurred. The Company has purchased insurance that limits its exposure on an
aggregate and individual claims basis for the employee health and dental benefit
programs.

The Company has entered into employment contracts with 16 senior officers that
provide benefits under certain conditions following a change in control of the
Company.


                                       62

<PAGE>

14. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                 Years Ended December 31,
                                          --------------------------------------
                                             2009          2008         2007
                                          -----------   ----------   -----------
<S>                                       <C>           <C>          <C>
Net earnings available to common
   stockholders, basic and diluted ....   $34,374,000   65,657,000    68,603,000
Average outstanding shares - basic ....    61,529,944   54,851,145    53,236,489
Add: Dilutive stock options ...........         1,696      152,669       511,909
                                          -----------   ----------    ----------
Average outstanding shares - diluted ..    61,531,640   55,003,814    53,748,398
                                          ===========   ==========    ==========
Basic earnings per share ..............   $      0.56         1.20          1.29
                                          ===========   ==========    ==========
Diluted earnings per share ............   $      0.56         1.19          1.28
                                          ===========   ==========    ==========
</TABLE>

There were approximately 2,717,000, 1,421,000, and 701,000 options excluded from
the diluted share calculation for December 31, 2009, 2008, and 2007,
respectively, due to the option exercise price exceeding the market price of the
Company's common stock.

15. STOCK OPTION PLANS

The Company has stock-based compensation plans outstanding. The Directors 1994
Stock Option Plan was approved to provide for the grant of stock options to
outside Directors of the Company. The Directors 1994 Stock Option Plan expired
in March of 2009 and has granted but unexpired stock options outstanding. The
Employees 1995 Stock Option Plan was approved to provide the grant of stock
options to certain full-time employees of the Company. The Employees 1995 Stock
Option Plan expired in April 2005 and has granted but unexpired stock options
outstanding. The 2005 Stock Incentive Plan provides awards to certain full-time
employees and directors of the Company. The 2005 Stock Incentive Plan permits
the granting of stock options, share appreciation rights, restricted shares,
restricted share units, and unrestricted shares, deferred share units, and
performance awards. Upon exercise of the stock options, the shares are obtained
from the authorized and unissued stock.

The 1994, 1995, and 2005 plans also contain provisions authorizing the grant of
limited stock rights, which permit the optionee, upon a change in control of the
Company, to surrender his or her stock options for cancellation and receive cash
or common stock equal to the difference between the exercise price and the fair
market value of the shares on the date of the grant. The option price at which
the Company's common stock may be purchased upon exercise of stock options
granted under the plans must be at least equal to the per share market value of
such stock at the date the option is granted. All stock option shares are
adjusted for stock splits and stock dividends. The term of the stock options may
not exceed five years from the date the options are granted. The employee stock
options generally vest over a period of two years and the director options vest
over a period of six months.

Compensation cost is based on the fair value of the stock options at the grant
date. Additionally, the compensation cost for the portion of awards outstanding
for which the requisite service has not been rendered that are outstanding as of
the required effective date are recognized as the requisite service is rendered
on or after the required effective date. For the twelve months ended December
31, 2009, the compensation cost for the stock option plans was $1,842,000, with
a corresponding income tax benefit of $726,000, resulting in a net earnings and
cash flow from operations reduction of $1,116,000, or a decrease of $.02 per
share for both basic and diluted earnings per share. Additionally, in the
Consolidated Statement of Cash Flows, the excess tax benefit from stock options
decreased the net cash provided from operating activities and increased the net
cash provided by financing activities by $75,000 for the twelve months ended
December 31, 2009. Total unrecognized compensation cost, net of income tax
benefit, related to non-vested awards which are expected to be recognized over
the next weighted period of 1 year was $958,000 as of December 31, 2009. The
total fair value of shares vested for the year ended December 31, 2009 and 2008
was $3,334,000 and $3,596,000, respectively.


                                       63

<PAGE>

15. STOCK OPTION PLANS . . . CONTINUED

The per share weighted-average fair value of stock options on the date of grant
was based on the Black Scholes option-pricing model. The Company uses historical
data to estimate option exercise and termination within the valuation model.
Employee and director awards, which have dissimilar historical exercise
behavior, are considered separately for valuation purposes. The risk-free
interest rate for periods within the contractual life of the stock option is
based on the U.S. Treasury yield in effect at the time of the grant. The stock
option awards generally vest upon six months or two years of service for
directors and employees, respectively, and generally expire in five years.
Expected volatilities are based on historical volatility and other factors. The
following lists the various assumptions and fair value of the grants awarded
during the year.

<TABLE>
<CAPTION>
                                                    Options Granted
                                                         During
                                                 ---------------------
                                                  2009    2008    2007
                                                 -----   -----   -----
<S>                                              <C>     <C>     <C>
Fair value of stock options - Black Scholes ..   $4.26   $3.56   $5.05
Expected volatility ..........................      44%     29%     26%
Expected dividends ...........................    2.74%   2.30%   2.12%
Risk free interest rate ......................    1.40%   2.49%   4.80%
Expected life ................................    3.47    3.46    3.47
</TABLE>

At December 31, 2009, total shares available for stock option grants to
employees and directors are 2,716,109. Changes in shares granted for stock
options for the year ended December 31, 2009 are summarized as follows:

<TABLE>
<CAPTION>
                                                      Weighted
                                                       Average
                                        Options    Exercise Price
                                       ---------   --------------
<S>                                    <C>         <C>
Outstanding at December 31, 2008 ...   2,628,609       $19.73
Canceled ...........................    (185,144)       18.41
Granted ............................     440,715        15.37
Exercised ..........................    (188,535)       13.55
                                       ---------
Outstanding at December 31, 2009 ...   2,695,645        19.52
                                       =========
Excercisable at December 31, 2009 ..   1,862,865        20.67
                                       =========
</TABLE>

The range of exercise prices on options outstanding and exercisable at December
31, 2009 is as follows:

<TABLE>
<CAPTION>
                                                                        Options Exercisable
                                                                   ----------------------------
                                   Weighted          Weighted                       Weighted
                    Options        Average           Average         Options         Average
  Price Range     Outstanding   Exercise Price   Life of Options   Exercisable   Exercise Price
  -----------     -----------   --------------   ---------------   -----------   --------------
<S>               <C>           <C>              <C>               <C>           <C>
$13.91 - $18.19    1,346,245        $16.65          3.2 years         514,465        $16.73
$18.74 - $24.73    1,349,400         22.47          1.7 years       1,348,400         22.47
                   ---------                                        ---------
                   2,695,645         19.52          2.6 years       1,862,865         20.67
                   =========                                        =========
</TABLE>


                                       64
<PAGE>

16. PARENT COMPANY INFORMATION (CONDENSED)

The following condensed financial information is the unconsolidated (parent
company only) information for the Company:

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                     December 31,
                                                  ------------------
             (Dollars in thousands)                 2009       2008
             ----------------------               --------   -------
<S>                                               <C>        <C>
Assets:
   Cash .......................................   $    565     1,036
   Interest bearing cash deposits .............     17,764    97,221
                                                  --------   -------
      Cash and cash equivalents ...............     18,329    98,257
   Investment securities, available-for-sale ..      1,111        --
   Other assets ...............................     15,319    14,443
   Investment in subsidiaries .................    797,180   702,183
                                                  --------   -------
                                                  $831,939   814,883
                                                  ========   =======
Liabilities and Stockholders' Equity:
   Dividends payable ..........................   $  8,011     7,973
   Subordinated debentures ....................    124,988   121,037
   Other liabilities ..........................     13,050     8,933
                                                  --------   -------
      Total liabilities .......................    146,049   137,943
                                                  --------   -------
   Common stock ...............................        616       613
   Paid-in capital ............................    497,493   491,794
   Retained earnings ..........................    188,129   185,776
   Accumulated other comprehensive loss .......       (348)   (1,243)
                                                  --------   -------
      Total stockholders' equity ..............    685,890   676,940
                                                  --------   -------
                                                  $831,939   814,883
                                                  ========   =======
</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                     Years ended December 31,
                                                                    -------------------------
                      (Dollars in thousands)                          2009     2008     2007
                      ----------------------                        -------   ------   ------
<S>                                                                 <C>       <C>      <C>
Revenues:
   Dividends from subsidiaries ..................................   $24,300   20,500   40,550
   Other income .................................................     2,775      747      889
   Intercompany charges for services ............................    13,108   12,656   11,345
                                                                    -------   ------   ------
      Total revenues ............................................    40,183   33,903   52,784
Expenses:
   Employee compensation and benefits ...........................     7,793    7,769    7,564
   Other operating expenses .....................................    12,845   13,044   12,969
                                                                    -------   ------   ------
      Total expenses ............................................    20,638   20,813   20,533
   Earnings before income tax benefit and equity in undistributed
      earnings of subsidiaries ..................................    19,545   13,090   32,251
   Income tax benefit ...........................................     1,942    1,952    4,444
                                                                    -------   ------   ------
   Income before equity in undistributed earnings of subsidiaries    21,487   15,042   36,695
   Subsidiary earnings in excess of dividends distributed .......    12,887   50,615   31,908
                                                                    -------   ------   ------
Net earnings ....................................................   $34,374   65,657   68,603
                                                                    =======   ======   ======
</TABLE>


                                       65

<PAGE>

16. PARENT COMPANY INFORMATION (CONDENSED) . . . CONTINUED

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                         Years ended December 31,
                                                                       ----------------------------
                       (Dollars in thousands)                            2009       2008      2007
                       ----------------------                          --------   -------   -------
<S>                                                                    <C>        <C>       <C>
Operating activities:
   Net earnings ....................................................   $ 34,374    65,657    68,603
   Adjustments to reconcile net earnings to net cash
      provided by operating activities:
   Subsidiary earnings in excess of dividends distributed ..........    (12,887)  (50,615)  (31,908)
   Gain on sale of investments .....................................     (2,147)       --        --
   Excess tax benefits related to the exercise of stock options ....        (75)   (1,325)   (1,745)
   Net increase in other assets and other liabilities ..............      1,356     3,411     5,316
                                                                       --------   -------   -------
Net cash provided by operating activities ..........................     20,621    17,128    40,266
                                                                       --------   -------   -------
Investing activities:
   Proceeds from sales, maturities and prepayments of
      securities available-for-sale ................................      2,267     1,270        --
   Purchases of investment securities available-for-sale ...........       (285)       --        --
   Equity contribution to subsidiary banks .........................    (68,753)  (15,455)  (10,416)
   Net addition of premises and equipment ..........................     (4,451)   (2,741)   (3,401)
                                                                       --------   -------   -------
Net cash used by investing activities ..............................    (71,222)  (16,926)  (13,817)
                                                                       --------   -------   -------
Financing activities:
   Net increase in other borrowed funds ............................         65        --        --
   Cash dividends paid .............................................    (32,021)  (29,079)  (26,694)
   Excess tax benefits from stock options ..........................         75     1,325     1,745
   Proceeds from exercise of stock options and other stock issued ..      2,554   103,749     6,154
                                                                       --------   -------   -------
Net cash provided by (used in) financing activities ................    (29,327)   75,995   (18,795)
                                                                       --------   -------   -------
Net increase in cash and cash equivalents ..........................    (79,928)   76,197     7,654
Cash and cash equivalents at beginning of year .....................     98,257    22,060    14,406
                                                                       --------   -------   -------
Cash and cash equivalents at end of year ...........................   $ 18,329    98,257    22,060
                                                                       ========   =======   =======
</TABLE>

17. UNAUDITED QUARTERLY FINANCIAL DATA

Summarized unaudited quarterly financial data is as follows:

<TABLE>
<CAPTION>
                                                                     QUARTERS ENDED, 2009
                                                -------------------------------------------------------------
(Dollars in thousands, except per share data)      MARCH 31        JUNE 30       SEPTEMBER 30    DECEMBER 31
---------------------------------------------   -------------   -------------   -------------   -------------
<S>                                             <C>             <C>             <C>             <C>
Interest income .............................   $      75,532          74,420          74,430          78,112
Interest expense ............................          15,154          13,939          13,801          14,273
                                                -------------   -------------   -------------   -------------
Net interest income .........................          60,378          60,481          60,629          63,839
Gain on investments .........................              --              --           2,667           3,328
Provision for loan losses ...................          15,715          25,140          47,050          36,713
Earnings (loss) before income taxes .........          22,414          13,696          (6,617)          8,872
Net earnings (loss) .........................          15,779          10,652          (1,531)          9,474
Basic earnings (loss) per share .............            0.26            0.17           (0.02)           0.15
Diluted earnings (loss) per share ...........            0.26            0.17           (0.02)           0.15
Dividends per share .........................            0.13            0.13            0.13            0.13
Market range high-low .......................   $19.36-$12.15   $18.97-$14.67   $16.80-$12.92   $14.62-$11.92
</TABLE>


                                       66

<PAGE>

17. UNAUDITED QUARTERLY FINANCIAL DATA . . . CONTINUED

<TABLE>
<CAPTION>
                                                                     Quarters ended, 2008
                                                -------------------------------------------------------------
(Dollars in thousands, except per share data)      March 31        June 30       September 30    December 31
---------------------------------------------   -------------   -------------   -------------   -------------
<S>                                             <C>             <C>             <C>             <C>
Interest income .............................   $      76,016          74,573          75,689          76,707
Interest expense ............................          27,387          22,273          22,113          18,599
                                                -------------   -------------   -------------   -------------
Net interest income .........................          48,629          52,300          53,576          58,108
Gain (loss) on investments ..................             248              --          (7,593)             --
Provision for loan losses ...................           2,500           5,042           8,715          12,223
Earnings before income taxes ................          26,778          28,196          18,854          25,430
Net earnings ................................          17,399          18,459          12,785          17,014
Basic earnings per share ....................            0.32            0.35            0.23            0.30
Diluted earnings per share ..................            0.32            0.34            0.24            0.29
Dividends per share .........................            0.13            0.13            0.13            0.13
Market range high-low .......................   $20.48-$15.54   $21.78-$15.99   $27.72-$14.46   $25.36-$14.12
</TABLE>

18. FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB ASC Topic 820, Fair Value Measurements and Disclosures, requires the
Company to disclose information relating to fair value. 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. The Standard establishes 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 standard describes three
levels of inputs that may be used to measure fair value:

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

The following are the assets measured at fair value on a recurring basis at and
for the period ended December 31, 2009 and 2008:

<TABLE>
<CAPTION>
                                                       ASSETS/       QUOTED PRICES     SIGNIFICANT
                                                     LIABILITIES   IN ACTIVE MARKETS      OTHER       SIGNIFICANT
                                                     MEASURED AT     FOR IDENTICAL      OBSERVABLE   UNOBSERVABLE
                                                      FAIR VALUE         ASSETS           INPUTS        INPUTS
              (Dollars in thousands)                  12/31/2009       (LEVEL 1)        (LEVEL 2)      (LEVEL 3)
--------------------------------------------------   -----------   -----------------   -----------   ------------
<S>                                                  <C>           <C>                 <C>           <C>
Financial assets:
   U.S. government agencies ......................    $      209          --                  209           --
   Government sponsored enterprises ..............           177          --                  177           --
   State and local governments and other issues ..       480,976          --              478,888        2,088
   Collateralized debt obligations ...............         6,789          --                   --        6,789
   Residential mortgage-backed securities ........       955,042          --              953,931        1,111
                                                      ----------         ---            ---------        -----
      Total financial assets .....................    $1,443,193          --            1,433,205        9,988
                                                      ==========         ===            =========        =====
</TABLE>


                                       67

<PAGE>

18. FAIR VALUE OF FINANCIAL INSTRUMENTS . . . CONTINUED

<TABLE>
<CAPTION>
                                                       Assets/       Quoted Prices     Significant
                                                     Liabilities   in Active Markets      Other      Significant
                                                     Measured at     for Identical     Observable    Unobservable
                                                      Fair Value        Assets           Inputs         Inputs
              (Dollars in thousands)                  12/31/2008       (Level 1)        (Level 2)      (Level 3)
              ----------------------                 -----------   -----------------   -----------   ------------
<S>                                                  <C>           <C>                 <C>           <C>
Financial assets:
   U.S. government agencies ......................     $    217            --                217            --
   Government sponsored enterprises ..............          312            --                312            --
   State and local governments and other issues ..      418,143            --            417,859           284
   Collateralized debt obligations ...............       15,540            --                 --        15,540
   Residential mortgage-backed securities ........      494,470            --            486,873         7,597
                                                       --------           ---            -------        ------
      Total financial assets .....................     $928,682            --            905,261        23,421
                                                       ========           ===            =======        ======
</TABLE>

The following is a description of the valuation methodologies used for financial
assets measured at fair value on a recurring basis. There have been no
significant changes in the valuation techniques during the period.

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. For those securities where greater reliance on
unobservable inputs occurs, such securities are classified as Level 3 within the
hierarchy.

The following is a reconciliation of the beginning and ending balances for
assets measured at fair value on a recurring basis using significant
unobservable inputs (Level 3) during the periods ended December 31, 2009 and
2008.

<TABLE>
<CAPTION>
                                                     December 31,
                                                   ----------------
             (Dollars in thousands)                  2009     2008
             ----------------------                -------   ------
<S>                                                <C>       <C>
Balance at beginning of year ...................   $23,421   16,948
Total unrealized gains included in
   other comprehensive income ..................    (7,264)    (747)
Amortization, accretion or principal payments ..      (539)    (377)
Purchases ......................................     2,251       --
Transfers into level 3 .........................        --    7,597
Transfers out of level 3 .......................    (7,881)      --
                                                   -------   ------
Balance at end of year .........................   $ 9,988   23,421
                                                   =======   ======
</TABLE>

The change in unrealized gains (losses) related to available-for-sale securities
is reported in the accumulated other comprehensive income (loss).


                                       68

<PAGE>

18. FAIR VALUE OF FINANCIAL INSTRUMENTS . . . CONTINUED

Certain financial assets or liabilities are not measured at fair value on a
recurring basis, but are subject to fair value measurement in certain
circumstances, for example upon acquisition or when there is evidence of
impairment. The following are the assets measured at fair value on a
nonrecurring basis at December 31, 2009 and 2008:

<TABLE>
<CAPTION>
                                                  ASSETS/       QUOTED PRICES     SIGNIFICANT
                                                LIABILITIES   IN ACTIVE MARKETS      OTHER      SIGNIFICANT
                                                MEASURED AT     FOR IDENTICAL      OBSERVABLE   UNOBSERVABLE
                                                FAIR VALUE          ASSETS           INPUTS        INPUTS
            (Dollars in thousands)              12/31/2009        (LEVEL 1)        (LEVEL 2)      (LEVEL 3)
            ----------------------              -----------   -----------------   -----------   ------------
<S>                                             <C>           <C>                 <C>           <C>
Financial assets:
   Real estate and other assets owned, net ..     $ 57,320            --               --           57,320
   Impaired loans, net of allowance
      for loan and lease ....................      198,982            --               --          198,982
                                                  --------           ---              ---          -------
      Total financial assets ................     $256,302            --               --          256,302
                                                  ========           ===              ===          =======
</TABLE>

<TABLE>
<CAPTION>
                                                  Assets/       Quoted Prices     Significant
                                                Liabilities   in Active Markets      Other      Significant
                                                Measured at     for Identical      Observable   Unobservable
                                                Fair Value          Assets           Inputs        Inputs
            (Dollars in thousands)              12/31/2008        (Level 1)        (Level 2)      (Level 3)
            ----------------------              -----------   -----------------   -----------   ------------
<S>                                             <C>           <C>                 <C>           <C>
Financial assets:
   Real estate and other assets owned, net ..     $11,539             --               --          11,539
   Impaired loans, net of allowance
      for loan and lease ....................      71,950             --               --          71,950
                                                  -------            ---              ---          ------
      Total financial assets ................     $83,489             --               --          83,489
                                                  =======            ===              ===          ======
</TABLE>

The following is a description of the valuation methodologies used for financial
assets measured at fair value on a nonrecurring basis. There have been no
significant changes in the valuation techniques during the period.

Real estate and other assets owned, net - real estate and other assets owned are
carried at the lower of fair value at acquisition date or current estimated fair
value, less estimated cost to sell. Estimated fair value of real estate and
other assets owned is based on appraisals. Real estate and other assets owned
are classified within Level 3 of the fair value hierarchy.

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 in
accordance with FASB ASC Topic 310, Receivables. Allowable methods for
estimating fair value include using the fair value of the collateral for
collateral dependent loans or, where a loan is determined not to be collateral
dependent, using the discounted cash flow method. Impaired loans are primarily
collateral-dependent and the estimated fair value is based on the fair value of
the collateral. Impaired loans are classified within Level 3 of the fair value
hierarchy.


                                       69

<PAGE>

18. FAIR VALUE OF FINANCIAL INSTRUMENTS . . . CONTINUED

The following presents the carrying amounts and estimated fair values in
accordance with FASB ASC Topic 825, Financial Instruments, as of December 31,
2009 and 2008.

<TABLE>
<CAPTION>
                                                                        DECEMBER 31, 2009         December 31, 2008
                                                                     -----------------------   ----------------------
                      (Dollars in thousands)                           AMOUNT     FAIR VALUE     Amount    Fair Value
                      ----------------------                         ----------   ----------   ---------   ----------
<S>                                                                  <C>          <C>          <C>         <C>
Financial assets:
   Cash on hand and in banks .....................................   $  120,731     120,731      125,123      125,123
   Federal funds sold ............................................       87,155      87,155        6,480        6,480
   Interest bearing cash deposits ................................        2,689       2,689        3,652        3,652
   Investment securities .........................................      488,775     488,775      434,677      434,677
   Residential mortgage-backed securities ........................      955,042     955,042      494,470      494,470
   FHLB and FRB stock ............................................       62,577      62,577       60,945       60,945
   Loans receivable, net of allowance for loan and lease losses ..    3,987,318   3,989,168    4,053,454    4,064,215
   Accrued interest receivable ...................................       29,729      29,729       28,777       28,777
                                                                     ----------   ---------    ---------    ---------
      Total financial assets .....................................   $5,734,016   5,735,866    5,207,578    5,218,339
                                                                     ==========   =========    =========    =========
Financial liabilities:
   Deposits ......................................................   $4,100,152   4,111,909    3,262,475    3,273,076
   Advances from Federal Home Loan Bank ..........................      790,367     798,509      338,456      344,597
   Federal Reserve Bank discount window ..........................      225,000     225,000      914,000      914,000
   Repurchase agreements and other borrowed funds ................      226,251     226,271      196,731      196,749
   Subordinated debentures .......................................      124,988      80,473      121,037       63,840
   Accrued interest payable ......................................        7,928       7,928        9,751        9,751
                                                                     ----------   ---------    ---------    ---------
      Total financial liabilities ................................   $5,474,686   5,450,090    4,842,450    4,802,013
                                                                     ==========   =========    =========    =========
</TABLE>

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

Financial Assets

The estimated fair value of cash, federal funds sold, interest bearing cash
deposits, and accrued interest receivable is the book value of such financial
assets.

The estimated fair value of FHLB and FRB stock is book value due to the
restrictions that such stock may only be sold to another member institution or
the FHLB or FRB at par value.

Loans receivable, net of ALLL - fair value for unimpaired loans, net of ALLL, is
estimated by discounting the future cash flows using the rates at which similar
notes would be written for the same remaining maturities. Impaired loans are
primarily collateral-dependent and the estimated fair value is based on the fair
value of the collateral.

Financial Liabilities

The estimated fair value of accrued interest payable is the book value of such
financial liabilities.

Deposits - fair value of term deposits is estimated by discounting the future
cash flows using rates of similar deposits with similar maturities. The
estimated fair value of demand, NOW, savings, and money market deposits is the
book value since rates are regularly adjusted to market rates.


                                       70

<PAGE>

18. FAIR VALUE OF FINANCIAL INSTRUMENTS . . . CONTINUED

Advances from FHLB - fair value of advances is estimated based on borrowing
rates currently available to the Company for advances with similar terms and
maturities.

FRB borrowings - fair value of borrowings through the FRB is estimated based on
borrowing rates currently available to the Company through FRB discount window
programs with similar terms and maturities.

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
for subordinated debt issuances with similar characteristics.

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. See Note 4 to consolidated financial statements.

19. CONTINGENCIES AND COMMITMENTS

The Company leases certain land, premises and equipment from third parties under
operating and capital leases. Total rent expense for the years ended December
31, 2009, 2008, and 2007 was approximately $3,306,000, $2,561,000, and
$2,099,000, respectively. Amortization of building capital lease assets is
included in depreciation. One of the Company's subsidiaries has entered into
lease transactions with two of its directors and the related party rent expense
for the years ended December 31, 2009, 2008, and 2007 was approximately
$703,000, $476,000, and $346,000. The total future minimum rental commitments
required under operating and capital leases that have initial or remaining
noncancelable lease terms in excess of one year at December 31, 2009 are as
follows:

<TABLE>
<CAPTION>
                                             Capital   Operating
          (Dollars in thousands)              Leases     Leases     Total
          ----------------------             -------   ---------   ------
<S>                                          <C>       <C>         <C>
Years ended December 31,
   2010                                      $  231       2,912     3,143
   2011                                         233       2,621     2,854
   2012                                         235       2,130     2,365
   2013                                         238       1,902     2,140
   2014                                         838       1,739     2,577
   Thereafter                                 1,341       9,533    10,874
                                             ------      ------    ------
   Total minimum lease payments               3,116      20,837    23,953
                                                         ======    ======
Less: Amount representing interest            1,079
                                             ------
   Present value of minimum lease payments    2,037
Less: Current portion of
   obligations under capital leases              74
                                             ------
Long-term portion of
   obligations under capital leases          $1,963
                                             ======
</TABLE>

The Company is a defendant in legal proceedings arising in the normal course of
business. In the opinion of management, the disposition of pending litigation
will not have a material effect on the Company's consolidated financial
position, results of operations or liquidity.


                                       71

<PAGE>

20. ACQUISITIONS

On October 2, 2009, the Company acquired First Company and its bank subsidiary,
First National, with total assets of $272,280,000, loans of $160,538,000 and
deposits of $236,529,000. The purchase price included core deposit intangible of
$4,040,000. The acquisition resulted in a $3,482,000 one-time bargain purchase
gain recorded in other income which was based on the estimated fair value of the
assets acquired and liabilities assumed.

On December 1, 2008, the Company acquired Bank of the San Juans Bancorporation
and its bank subsidiary, San Juans, with total assets of $157,155,000, loans of
$139,376,000 and deposits of $119,019,000. The purchase price included core
deposit intangible of $2,101,000 and goodwill of $5,958,000.

Adjustment of the allocated acquisition price may be related to fair value
estimates for which all information has not been obtained on the acquired entity
known or discovered during the allocation period, the period of time required to
identify and measure the fair values of the assets and liabilities acquired in
the business combination.

21. OPERATING SEGMENT INFORMATION

FASB ASC Topic 280, Segment Reporting, requires that a public business
enterprise report financial and descriptive information about its reportable
operating segments. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision makers in deciding how to
allocate resources and in assessing performance. The Company defines operating
segments and evaluates segment performance internally based on individual bank
charters. If required, VIEs are consolidated into the operating segment which
invested into such entities.

On February 1, 2009, Morgan merged into 1st Bank resulting in operations being
conducted under the 1st Bank charter. On April 30, 2008, Whitefish merged into
Glacier with operations conducted under the Glacier charter. The five bank
subsidiaries acquired as a result of the acquisition of CDC included Citizens
State Bank, First Citizens Bank of Billings, First National Bank of Lewistown,
Western Bank of Chinook, and First Citizens Bank, N.A. On January 26, 2007,
Citizens State Bank, First Citizens Bank of Billings, and First Citizens Bank,
N.A. were merged into First Security, Western, and Glacier, respectively. On
June 21, 2007, Western Bank of Chinook merged into First National Bank of
Lewistown and renamed First Bank of Montana. Prior period activity of the merged
banks has been combined and included in the acquiring bank subsidiaries'
historical results.

The accounting policies of the individual operating segments are the same as
those of the Company described in Note 1. Transactions between operating
segments are conducted at fair value, resulting in profits that are eliminated
for reporting consolidated results of operations. Intersegment revenues
primarily represents interest income on intercompany borrowings, management
fees, and data processing fees received by individual banks or the parent
company. Intersegment revenues, expenses and assets are eliminated in order to
report results in accordance with accounting principles generally accepted in
the United States of America. Expenses for centrally provided services are
allocated based on the estimated usage of those services.


                                       72
<PAGE>

21. OPERATING SEGMENT INFORMATION . . . CONTINUED

The following is a summary of selected operating segment information for the
years ended and as of December 31, 2009, 2008, and 2007.

<TABLE>
<CAPTION>
                  2009                                    Mountain     First      1st
         (Dollars in thousands)               Glacier       West     Security     Bank    Western   Big Sky    Valley
         ----------------------             ----------   ---------   --------   -------   -------   -------   -------
<S>                                         <C>          <C>         <C>        <C>       <C>       <C>       <C>
Net interest income .....................   $   57,139      53,302    35,788     24,057    21,233    15,700    14,051
Provision for loan losses ...............      (32,000)    (50,500)  (10,450)   (10,800)   (3,200)   (9,200)   (1,200)
                                            ----------   ---------   -------    -------   -------   -------   -------
Net interest income after
   provision for loan and lease losses ..       25,139       2,802    25,338     13,257    18,033     6,500    12,851
Non-interest income .....................       15,387      27,882     8,103      4,628     8,631     3,564     5,717
Core deposit amortization ...............         (330)       (184)     (468)      (652)     (571)      (23)      (42)
Other non-interest expense ..............      (27,325)    (51,525)  (18,897)   (14,943)  (16,342)   (8,441)   (9,229)
                                            ----------   ---------   -------    -------   -------   -------   -------
Earnings before income taxes ............       12,871     (21,025)   14,076      2,290     9,751     1,600     9,297
Income tax (expense) benefit ............       (2,803)      9,764    (3,372)      (309)   (2,813)     (121)   (2,740)
                                            ----------   ---------   -------    -------   -------   -------   -------
Net income (loss) .......................   $   10,068     (11,261)   10,704      1,981     6,938     1,479     6,557
                                            ==========   =========   =======    =======   =======   =======   =======
Assets ..................................   $1,325,039   1,172,331   890,672    650,072   624,077   368,571   351,228
Loans, net of ALLL ......................      903,276     919,901   548,471    286,019   314,613   260,433   182,916
Goodwill ................................        8,900      23,159    18,582     41,718    22,311     1,752     1,770
Deposits ................................      726,403     793,006   588,858    421,271   504,619   184,278   211,935
Stockholders' equity ....................      139,799     146,720   120,044    101,789    85,259    51,614    30,585
</TABLE>

<TABLE>
<CAPTION>
                                              First                First       San
                                            National   Citizens   Bank-MT     Juans     Parent   Eliminations   Consolidated
                                            --------   --------   -------   --------   -------   ------------   ------------
<S>                                         <C>        <C>        <C>       <C>        <C>       <C>            <C>
Net interest income .....................   $  3,964    10,437      7,900      8,021    (6,265)          --        245,327
Provision for loan losses ...............     (1,683)   (2,800)      (985)    (1,800)       --           --       (124,618)
                                            --------   -------    -------   --------   -------     --------      ---------
Net interest income after
   provision for loan and lease losses ..      2,281     7,637      6,915      6,221    (6,265)          --        120,709
Non-interest income .....................      4,187     4,235        929      1,329    52,466      (50,584)        86,474
Core deposit amortization ...............       (144)     (111)      (358)      (233)       --           --         (3,116)
Other non-interest expense ..............     (2,011)   (7,992)    (3,189)    (5,435)  (13,769)      13,396       (165,702)
                                            --------   -------    -------   --------   -------     --------      ---------
Earnings before income taxes ............      4,313     3,769      4,297      1,882    32,432      (37,188)        38,365
Income tax (expense) benefit ............       (230)   (1,332)    (1,426)      (551)    1,942           --         (3,991)
                                            --------   -------    -------   --------   -------     --------      ---------
Net income ..............................   $  4,083     2,437      2,871      1,331    34,374      (37,188)        34,374
                                            ========   =======    =======   ========   =======     ========      =========
Assets ..................................   $295,953   241,807    217,379    184,528   832,916     (962,778)     6,191,795
Loans, net of ALLL ......................    151,379   161,182    114,113    145,015        --           --      3,987,318
Goodwill ................................         --     9,553     12,556      5,958        --           --        146,259
Deposits ................................    247,256   159,763    143,552    148,474        --      (29,263)     4,100,152
Stockholders' equity ....................     31,364    31,969     32,627     25,410   685,890     (797,180)       685,890
</TABLE>


                                       73

<PAGE>

21. OPERATING SEGMENT INFORMATION . . . CONTINUED

<TABLE>
<CAPTION>
                  2008                                    Mountain     First      1st
         (Dollars in thousands)               Glacier       West     Security     Bank    Western   Big Sky    Valley
         ----------------------             ----------   ---------   --------   -------   -------   -------   -------
<S>                                         <C>          <C>         <C>        <C>       <C>       <C>       <C>
Net interest income .....................   $   52,900      45,614    34,212     22,695    20,713    15,595    12,719
Provision for loan losses ...............       (8,825)    (11,150)   (1,750)    (2,012)     (540)   (2,200)     (810)
                                            ----------   ---------   -------    -------   -------   -------   -------
Net interest income after
   provision for loan and lease losses ..       44,075      34,464    32,462     20,683    20,173    13,395    11,909
Non-interest income .....................       13,926      20,353     6,987      4,728     3,306     3,608     4,673
Core deposit amortization ...............         (392)       (196)     (511)      (712)     (623)      (23)      (42)
Other non-interest expense ..............      (27,074)    (41,922)  (17,128)   (14,143)  (16,151)   (7,390)   (8,770)
                                            ----------   ---------   -------    -------   -------   -------   -------
Earnings before income taxes ............       30,535      12,699    21,810     10,556     6,705     9,590     7,770
Income tax (expense) benefit ............      (10,910)     (3,628)   (7,282)    (3,631)   (1,818)   (3,587)   (2,251)
                                            ----------   ---------   -------    -------   -------   -------   -------
Net income ..............................   $   19,625       9,071    14,528      6,925     4,887     6,003     5,519
                                            ==========   =========   =======    =======   =======   =======   =======
Assets ..................................   $1,250,774   1,226,869   954,218    566,869   609,868   332,325   298,392
Loans, net of ALLL ......................      963,107     955,486   561,691    320,370   354,199   287,394   195,504
Goodwill ................................        8,900      23,159    18,582     41,718    22,311     1,752     1,770
Deposits ................................      609,473     680,404   545,199    418,231   357,729   179,834   185,505
Stockholders' equity ....................      129,890     124,881   116,856     95,200    83,843    40,384    31,483
</TABLE>

<TABLE>
<CAPTION>
                                                        First      San
                                            Citizens   Bank-MT    Juans     Parent   Eliminations   Consolidated
                                            --------   -------   -------   -------   ------------   ------------
<S>                                         <C>        <C>       <C>       <C>       <C>            <C>
Net interest income .....................   $  7,676     6,676       575    (6,762)           --       212,613
Provision for loan losses ...............       (750)     (390)      (53)       --            --       (28,480)
                                            --------   -------   -------   -------    ----------     ---------
Net interest income after
   provision for loan and lease losses ..      6,926     6,286       522    (6,762)           --       184,133
Non-interest income .....................      2,855       768        85    83,891       (84,146)       61,034
Core deposit amortization ...............       (128)     (405)      (19)       --            --        (3,051)
Other non-interest expense ..............     (6,407)   (3,083)     (397)  (13,424)       13,031      (142,858)
                                            --------   -------   -------   -------    ----------     ---------
Earnings before income taxes ............      3,246     3,566       191    63,705       (71,115)       99,258
Income tax (expense) benefit ............     (1,092)   (1,279)      (75)    1,952            --       (33,601)
                                            --------   -------   -------   -------    ----------     ---------
Net income ..............................   $  2,154     2,287       116    65,657       (71,115)       65,657
                                            ========   =======   =======   =======    ==========     =========
Assets ..................................   $217,697   154,645   165,784   814,883    (1,038,354)    5,553,970
Loans, net of ALLL ......................    159,412   114,177   142,114        --            --     4,053,454
Goodwill ................................      9,553    12,556     6,451        --            --       146,752
Deposits ................................    135,970   113,531   143,056        --      (106,457)    3,262,475
Stockholders' equity ....................     29,110    29,329    21,207   676,940      (702,183)      676,940
</TABLE>


                                       74

<PAGE>

21. OPERATING SEGMENT INFORMATION . . . CONTINUED

<TABLE>
<CAPTION>
                  2007                                    Mountain     First      1st
         (Dollars in thousands)               Glacier       West     Security     Bank    Western   Big Sky    Valley
         ----------------------             ----------   ---------   -------    -------   -------   -------   -------
<S>                                         <C>          <C>         <C>        <C>       <C>       <C>       <C>
Net interest income .....................   $   40,270      41,115    32,674     20,135    19,043    12,610    10,641
Provision for loan losses ...............       (1,580)     (2,225)   (1,100)      (630)       --      (645)     (405)
                                            ----------   ---------   -------    -------   -------   -------   -------
Net interest income after
   provision for loan and lease losses ..       38,690      38,890    31,574     19,505    19,043    11,965    10,236
Non-interest income .....................       13,473      19,861     6,844      4,212     8,896     3,583     4,807
Core deposit amortization ...............         (415)       (208)     (554)      (688)     (675)      (23)      (42)
Other non-interest expense ..............      (25,231)    (36,745)  (17,295)   (13,015)  (16,050)   (7,220)   (8,335)
                                            ----------   ---------   -------    -------   -------   -------   -------
Earnings before income taxes ............       26,517      21,798    20,569     10,014    11,214     8,305     6,666
Income tax (expense) benefit ............       (9,294)     (7,701)   (7,027)    (3,482)   (4,129)   (3,144)   (1,955)
                                            ----------   ---------   -------    -------   -------   -------   -------
Net income ..............................   $   17,223      14,097    13,542      6,532     7,085     5,161     4,711
                                            ==========   =========   =======    =======   =======   =======   =======
Assets ..................................   $1,101,112   1,038,294   792,882    551,327   508,915   315,885   283,155
Loans, net of ALLL ......................      863,253     836,426   548,379    298,800   321,533   262,934   194,912
Goodwill ................................        8,900      23,159    18,582     41,718    22,311     1,752     1,770
Deposits ................................      579,190     666,330   533,260    439,281   345,273   215,771   187,657
Stockholders' equity ....................      115,247     114,538   109,320     87,523    83,226    35,406    27,323
</TABLE>

<TABLE>
<CAPTION>
                                                        First
                                            Citizens   Bank-MT    Parent   Eliminations   Consolidated
                                            --------   -------   -------   ------------   ------------
<S>                                         <C>        <C>       <C>       <C>            <C>
Net interest income .....................   $  7,532     6,308    (6,859)          --        183,469
Provision for loan losses ...............        (75)      (20)       --           --         (6,680)
                                            --------   -------   -------     --------      ---------
Net interest income after
   provision for loan and lease losses ..      7,457     6,288    (6,859)          --        176,789
Non-interest income .....................      2,550       736    84,025      (84,169)        64,818
Core deposit amortization ...............       (146)     (451)       --           --         (3,202)
Other non-interest expense ..............     (6,102)   (3,426)  (13,006)      11,710       (134,715)
                                            --------   -------   -------     --------      ---------
Earnings before income taxes ............      3,759     3,147    64,160      (72,459)       103,690
Income tax (expense) benefit ............     (1,403)   (1,395)    4,443           --        (35,087)
                                            --------   -------   -------     --------      ---------
Net income ..............................   $  2,356     1,752    68,603      (72,459)        68,603
                                            ========   =======   =======     ========      =========
Assets ..................................   $182,769   149,483   660,892     (767,384)     4,817,330
Loans, net of ALLL ......................    131,988    98,897        --           --      3,557,122
Goodwill ................................      9,553    12,556        --           --        140,301
Deposits ................................    139,228   113,692        --      (35,204)     3,184,478
Stockholders' equity ....................     27,808    26,941   528,576     (627,332)       528,576
</TABLE>

22. IMPACT OF RECENT AUTHORITATIVE ACCOUNTING GUIDANCE

The Accounting Standards Codification became FASB's officially recognized source
of authoritative U.S. generally accepted accounting principles ("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 SEC registrants. All other accounting literature is considered
non-authoritative. The Company adopted the topic effective for the period ending
September 30, 2009 and determined there was not a material effect on the
Company's financial position or results of operations.


                                       75
<PAGE>

22. IMPACT OF RECENT AUTHORITATIVE ACCOUNTING GUIDANCE . . . CONTINUED

In January 2010, FASB issued an amendment to FASB ASC Topic 820, Fair Value
Measurements and Disclosures, that will provide more robust disclosures about 1)
the different classes of assets and liabilities measured at fair value, 2) the
valuation techniques and inputs used, 3) the activity in Level 3 fair value
measurements, and 4) the transfers between Levels 1, 2, and 3. The new
disclosures are effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disclosures about the activity in Level
3 fair value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010. The Company is currently evaluating the
impact of the adoption of this amendment, but does not expect it to have a
material effect on the Company's financial position or results of operations.

In August 2009, FASB issued an amendment to FASB ASC Subtopic 820-10, Fair Value
Measurements and Disclosures - Overall, for the fair value measurement of
liabilities. The Update provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting unit is required to measure fair value using one or more of the
following techniques: 1) A valuation technique that uses a) the quoted price of
the identical liability when trades as an asset b) quoted prices for similar
liabilities or similar liabilities when traded as assets 2) Another valuation
technique that is consistent with the principals FASB ASC Topic 820, Fair Value
Measurements and Disclosures. The Update is effective for the first reporting
period (including interim periods) beginning after issuance. The Company adopted
the standard effective for the period ending September 30, 2009 and determined
there was not a material effect on the Company's financial position or results
of operations.

In June 2009, FASB issued an amendment to FASB ASC Topic 810, Consolidation. The
objective of this standard is to amend certain requirements to improve financial
reporting by enterprises involved with variable interest entities and to provide
more relevant and reliable information to users of financial statements. This
standard shall be effective as of the beginning of each reporting entity's first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period, and for interim and annual reporting
periods thereafter. The Company is currently evaluating the impact of the
adoption of this amendment, but does not expect it to have a material effect on
the Company's financial position or results of operations.

In June 2009, FASB issued an amendment to FASB ASC Topic 860, Transfers and
Servicing. The objective of this standard is to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial reports about a transfer of financial
assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor's continuing involvement in
transferred financial assets. This standard shall be effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period, and for interim and annual reporting periods thereafter. The Company is
currently evaluating the impact of the adoption of this amendment, but does not
expect it to have a material effect on the Company's financial position or
results of operations.

In April 2009, FASB issued an amendment to FASB ASC Topic 320, Investments -
Debt and Equity Securities, relating to the recognition and presentation of
other-than-temporary impairments. The objective of an other-than-temporary
impairment analysis under existing GAAP is to determine whether the holder of an
investment in a debt or equity security for which changes in fair value are not
regularly recognized in earnings (such as securities classified as
held-to-maturity or available-for-sale) should recognize a loss in earnings when
the investment is impaired. An investment is impaired if the fair value of the
investment is less than its amortized cost basis. This standard amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. This standard does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The standard is effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009. The Company has evaluated the impact of the adoption of
this standard and determined there was not a material effect on the Company's
financial position or results of operations.

In April 2009, FASB issued an amendment to FASB ASC Topic 820, Fair Value
Measurements and Disclosures, which provides additional guidance for estimating
fair value when the volume and level of activity for the asset or liability have
significantly decreased. This standard also includes guidance on identifying
circumstances that indicate a transaction is not orderly. This standard
emphasizes that even if there has been a significant decrease in the volume and
level of activity for the asset or liability and regardless of the valuation
technique(s) used, the objective of a fair value measurement remains the same.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction (that is, not a forced
liquidation or distressed sale) between market participants at the measurement
date under current market conditions. This standard is effective for interim and
annual reporting periods ending after June 15, 2009, and shall be applied
prospectively. Early adoption was permitted for periods ending after March 15,
2009. The Company has evaluated the impact of the adoption of this standard and
determined there was not a material effect on the Company's financial position
or results of operations..


                                       76

<PAGE>

22. IMPACT OF RECENT AUTHORITATIVE ACCOUNTING GUIDANCE . . . CONTINUED

In April 2009, FASB issued an amendment to FASB ASC Topic 825, Financial
Instruments, which requires disclosures about fair value of financial
instruments for interim reporting periods of publicly traded companies as well
as in annual financial statements. An entity shall disclose in the body or in
the accompanying notes of its summarized financial information for interim
reporting periods and in its financial statements for annual reporting periods
the fair value of all financial instruments for which it is practicable to
estimate that value, whether recognized or not recognized in the statement of
financial position. Fair value information disclosed in the notes shall be
presented together with the related carrying amount in a form that makes it
clear whether the fair value and carrying amount represent assets or liabilities
and how the carrying amount relates to what is reported in the statement of
financial position. An entity also shall disclose the method(s) and significant
assumptions used to estimate the fair value of financial instruments and shall
describe changes in method(s) and significant assumptions, if any, during the
period. This standard shall be effective for interim reporting periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009. The Company has evaluated the impact of the adoption of this
standard and determined there was not a material effect on the Company's
financial position or results of operations. For additional information on
disclosures about fair value of financial instruments see Part I, Item 2
"Financial Statements - Note 13, Fair Value Measurements".

In December 2008, the FASB issued ASC Topic 820, Fair Value Measurements and
Disclosures. The standard requires public entities to provide additional
disclosures about transfers of financial assets and their involvement with
variable interest entities. Additionally, this standard requires certain
disclosures to be provided by a public enterprise that is (a) a sponsor of a
qualifying special purpose entity (SPE) that holds a variable interest in the
qualifying SPE but was not the transferor (nontransferor) of financial assets to
the qualifying SPE and (b) a servicer of a qualifying SPE that holds a
significant variable interest in the qualifying SPE but was not the transferor
(nontransferor) of financial assets to the qualifying SPE. The disclosures
required by this standard are intended to provide greater transparency to
financial statement users about a transferor's continuing involvement with
transferred financial assets and an enterprise's involvement with variable
interest entities and qualifying SPEs. The issue is effective for the first
reporting period (interim or annual) ending after December 15, 2008. The Company
has evaluated the impact of the adoption of this standard and determined there
was not a material effect on the Company's financial position or results of
operations.

In April 2008, the FASB issued ASC Topic 350, Intangibles - Goodwill and Other.
This standard amends the factors that should be considered in developing renewal
or extension assumptions used to determine the useful life of a recognized
intangible asset. The intent of this standard is to improve the consistency
between the useful life of a recognized intangible asset and the period of
expected cash flows used to measure the fair value of the asset. This standard
is effective for financial statements issued for fiscal years beginning after
December 15, 2008. The Company has evaluated the impact of the adoption of this
standard and determined there was not a material effect on the Company's
financial position or results of operations.

In March 2008, the FASB issued ASC Topic 815, Derivatives and Hedging. This
topic changes the disclosure requirements for derivative instruments and hedging
activities. Entities are required to provide enhanced disclosures about (a) how
and why an entity uses derivative instruments, (b) how derivative instruments
and related hedged items are accounted for, and (c) how derivative instruments
and related hedged items affect an entity's financial position, financial
performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. The Company has evaluated the impact of the adoption of this standard
and determined there was not a material effect on the Company's financial
position or results of operations.

In December 2007, FASB issued new standards relating to business combinations
which are included in FASB ASC Topic 805, Business Combinations. The objective
of this standard is to improve the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial reports about a business combination and its effects. The Statement
establishes principles and requirements for how the acquirer: a) recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree, b)
recognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase, and c) determines what information to disclose to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. This Statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. The Company has evaluated the impact of the adoption of this standard
and determined there was not a material effect on the Company's financial
position or results of operations.


                                       77

<PAGE>

                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

(a)  The following documents are filed as a part of this report:

     (1)  Financial Statements and

     (2)  Financial Statement schedules required to be filed by Item 8 of this
          report.

     (3)  The following exhibits are required by Item 601 of Regulation S-K and
          are included as part of this Form 10-K:

<TABLE>
<CAPTION>
EXHIBIT NO.   EXHIBIT
-----------   -------
<S>           <C>
3(a)          Amended and Restated Articles of Incorporation (1)
3(b)          Amended and Restated Bylaws (1)
10(a) (7)     Amended and Restated 1995 Employee Stock Option Plan and related
              agreements (2)
10(b) (7)     Amended and Restated 1994 Director Stock Option Plan and related
              agreements (2)
10(c) (7)     Amended and Restated Deferred Compensation Plan effective January
              1, 2008 (3)
10(d) (7)     Amended and Restated Supplemental Executive Retirement Agreement
              effective January 1, 2008 (3)
10(e) (7)     2005 Stock Incentive Plan and related agreements (4)
10(f) (7)     Employment Agreement dated January 1, 2010 between the Company
              and Michael J. Blodnick (5)
10(g) (7)     Employment Agreement dated January 1, 2010 between the Company
              and Ron J. Copher (5)
10(h) (7)     Employment Agreement date January 1, 2010 between the Company
              and Don Chery (5)
14            Code of Ethics (6)
21            Subsidiaries of the Company (See item 1, "Subsidiaries")
23            Consent of BKD LLP
31.1          Certification of Chief Executive Officer Pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002
31.2          Certification of Chief Financial Officer Pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002
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
</TABLE>

(1)  Incorporated by reference to Exhibits 3.i. and 3.ii included in the
     Company's Quarterly Report on form 10-Q for the quarter ended June 30,
     2008.

(2)  Incorporated by reference to Exhibits 99.1 - 99.4 of the Company's S-8
     Registration Statement (No. 333-105995).

(3)  Incorporated by reference to Exhibits 10(c) and 10(d) of the Company's
     Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

(4)  Incorporated by reference to Exhibits 99.1 through 99.3 of the Company's
     S-8 Registration Statement (No. 333-125024).

(5)  Incorporated by reference to Exhibits 10.1 through 10.3 included in the
     Company's Form 8-K filed by the Company on December 29, 2009.

(6)  Incorporated by reference to Exhibit 14, included in the Company's Form
     10-K for the year ended December 31, 2003.

(7)  Compensatory Plan or Arrangement

All other financial statement schedules required by Regulation S-X are omitted
because they are not applicable, not material or because the information is
included in the consolidated financial statements or related notes.


                                       78

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No. 1 to this report
to be signed on its behalf by the undersigned on March 12, 2010.

                                        GLACIER BANCORP, INC.


                                        By: /s/ Michael J. Blodnick
                                            ------------------------------------
                                            Michael J. Blodnick
                                            President/CEO/Director
                                            (Principal Executive Officer)


                                        By: /s/ Ron J. Copher
                                            ------------------------------------
                                            Ron J. Copher
                                            Senior Vice President and CFO
                                            (Principal Financial Accounting
                                            Officer)


                                       79