Filed pursuant to Rule 424(b)(3)
Registration No. 333-122243

MERGER PROPOSED - YOUR VOTE IS VERY IMPORTANT

Dear Citizens Bank Holding Company Shareholders:

     The boards of directors of Citizens Bank Holding Company and Glacier Bancorp, Inc. (“Glacier”) have agreed on a merger of Citizens Bank Holding Company into Glacier. When the merger occurs, Citizens Community Bank, now the subsidiary of Citizens Bank Holding Company, will operate as a wholly owned subsidiary of Glacier.

     If we complete the merger, you will be entitled to elect to receive, in consideration for your Citizens Bank Holding Company shares, either cash, shares of Glacier common stock, or a combination of cash and Glacier common stock. Under the merger agreement, Glacier will pay $8.6 million of the total merger consideration in cash and the remainder in shares of Glacier common stock with an aggregate value of $8.6 million plus the amount of cash received by Citizens Bank Holding Company upon the exercise of Citizens Bank Holding Company stock options after the date of the merger agreement and prior to the effective date of the merger. Because the total amount of cash and total value of stock is fixed, you may receive a combination of cash and stock that differs from your election, if too many Citizens Bank Holding Company shareholders elect to receive one form of consideration over the other. If you own 100 or fewer shares, you will be deemed to make a cash election. A form for making your election and transmitting your stock will be mailed to you shortly – please do not send your stock certificates to Citizens Bank Holding Company at this time.

     The number of shares of Glacier common stock that will be exchanged for shares of Citizens Bank Holding Company common stock will not be determined until five days prior to the merger. As explained in more detail in this document, whether you elect to receive cash or Glacier common stock or a combination for your shares, the value of the consideration that you receive as of the completion date will be substantially the same, based on the average Glacier common stock price used to calculate the merger consideration. Assuming a Glacier average common stock price of $32.00 (the approximate closing price for Glacier common stock on February 8, 2005, the most recent date practicable prior to the mailing of this document), 1.171 shares of Glacier common stock will be received for each Citizens Bank Holding Company share exchanged for stock. The amount of cash to be received for each Citizens Bank Holding Company share exchanged for cash is fixed at $37.47.

     After completion of the merger, Citizens Bank Holding Company shareholders will own approximately 1% of Glacier’s outstanding common stock.

     Your board of directors believes that the terms of the merger are fair and in the best interest of Citizens Bank Holding Company and its shareholders. In reaching this decision, the board considered numerous factors as described in the attached proxy statement/prospectus. Glacier intends to operate Citizens Community Bank as a separately chartered Idaho state bank, under the name “Citizens Community Bank.” The arrangement will allow Citizens Community Bank to continue to deliver high quality banking services to its customers which are a result of timely, local decision making.

     The merger cannot be completed unless our shareholders approve it. Approval requires the affirmative vote of at least a majority of the shares entitled to be cast at a special meeting of Citizens Bank Holding Company shareholders called to consider the merger. We will hold a special shareholders’ meeting to vote on the merger proposal. The Citizens Bank Holding Company special shareholders’ meeting will be held on Friday, March 25, 2005, at 10:00 a.m. local time, at Juniper Hills Country Club, 6000 S. Bannock Highway, Pocatello, Idaho 83204. Whether or not you plan to attend the special meeting, please take the time to vote by completing and mailing the enclosed form of proxy.

     On behalf of the Citizens Bank Holding Company board of directors, I recommend that you vote FOR approval of the merger.

None of the Federal Deposit Insurance Corporation, Securities and Exchange Commission, nor any state securities commission has approved the securities to be issued by Glacier or determined if this proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The shares of Glacier common stock to be issued in the merger are not savings or deposit accounts or other obligations of a bank and are not insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other governmental agency. Such shares are not guaranteed by Glacier or Citizens Bank Holding Company and are subject to investment risk, including the possible loss of principal.

________________________________

This proxy statement/prospectus is dated February 16, 2005, and is first being mailed to

CITIZENS BANK HOLDING COMPANY
280 South Arthur

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS OF CITIZENS BANK HOLDING COMPANY:

     A special meeting of shareholders of Citizens Bank Holding Company will be held on Friday, March 25, 2005, at 10:00 a.m. local time, at Juniper Hills Country Club, 6000 S. Bannock Highway, Pocatello, Idaho 83204. The special meeting is for the following purposes:

     Holders of record of Citizens Bank Holding Company common stock at the close of business on February 4, 2005, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of it. The affirmative vote of the holders of at least a majority of the shares entitled to be cast at the Citizens Bank Holding Company special meeting is required for approval of the merger agreement. As of February 4, 2005, there were 441,034 shares of Citizens Bank Holding Company common stock outstanding and entitled to vote at the special meeting.

     Citizens Bank Holding Company shareholders have the right to dissent from the merger and obtain payment of the fair value of their Citizens Bank Holding Company shares under the applicable provisions of Idaho law. A copy of the applicable statutes regarding dissenters’ rights is attached as Appendix B to the accompanying proxy statement/prospectus. For details of your dissenters’ rights and how to exercise them, please see the discussion under the heading “The Merger—Dissenters’ Rights of Appraisal.”

     Your vote is important. Whether or not you plan to attend the special meeting, please complete, sign, date and promptly return the accompanying proxy using the enclosed envelope. If for any reason you should desire to revoke your proxy, you may do so at any time before it is voted at the meeting. If you do not vote your shares, it will have the same effect as voting against the merger.

     The board of directors of Citizens Bank Holding Company has determined that the plan and agreement of merger is fair to and in the best interests of Citizens Bank Holding Company and its shareholders and recommends that you vote FOR approval of the merger agreement.

     Please do not send any certificates for your stock at this time. You will soon receive instructions on how to make your consideration election and to exchange your certificates.

REFERENCES TO ADDITIONAL INFORMATION

     This proxy statement/prospectus incorporates important business and financial information about Glacier from documents that are not included in or delivered with this document.

     You can obtain documents incorporated by reference into this proxy statement/prospectus by requesting them in writing or by telephone from Glacier at the following address:

     You will not be charged for the documents that you request. If you would like to request documents, please do so by March 10, 2005 in order to receive them before the Citizens Bank Holding Company special shareholders’ meeting.

     See “Where You Can Find More Information About Glacier.”

TABLE OF CONTENTS

i

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

CITIZENS BANK HOLDING COMPANY SPECIAL SHAREHOLDERS’ MEETING

Date, Time, Place

     The Citizens Bank Holding Company special meeting of shareholders will be held on Friday, March 25, 2005, at 10:00 a.m. local time, at Juniper Hills Country Club, 6000 S. Bannock Highway, Pocatello, Idaho 83204.

     As described below under “Vote Required,” approval of the merger agreement requires the affirmative vote of at least a majority of the shares of Citizens Bank Holding Company common stock that are outstanding and entitled to vote on the record date. If there are not sufficient votes represented at the special meeting, either in person or by proxy, to approve the merger agreement, or if a quorum is not present, Citizens Bank Holding Company may adjourn or postpone the meeting in order to permit further solicitation of proxies by Citizens Bank Holding Company. The persons appointed as proxies on the form accompanying this document are authorized to vote to approve such adjournment or postponement, unless the proxy appointing them instructs them to vote against approval of the merger agreement.

Purpose

     At the special meeting, Citizens Bank Holding Company shareholders will:

Record Date; Shares Outstanding and Entitled to Vote

     The Citizens Bank Holding Company board of directors has fixed 5:00 p.m. on February 4, 2005 as the record date for determining the holders of shares of Citizens Bank Holding Company common stock entitled to notice of and to vote at the special meeting. At the close of business on the Citizens Bank Holding Company record date, there were 441,034 shares of common stock issued and outstanding held by approximately 364 holders of record. Holders of record of Citizens Bank Holding Company common stock on the record date are entitled to one vote per share, and are also entitled to exercise dissenters’ rights if certain procedures are followed. See “The Merger - Dissenters’ Rights of Appraisal” and Appendix B.

     Each director of Citizens Bank Holding Company has agreed to vote all Citizens Bank Holding Company shares held or controlled by him in favor of approval of the merger. A total of 47,482 outstanding shares or shares subject to stock options, or approximately 10.6% of the outstanding shares of Citizens Bank Holding Company common stock, are covered by this voting agreement. See “The Merger - Voting Agreement.”

Vote Required

     The affirmative vote of at least a majority of all shares of Citizens Bank Holding Company common stock outstanding and entitled to vote on the record date is required to approve the merger. At least fifty percent (50%) of the outstanding shares of Citizens Bank Holding Company common stock must be present, either in person or by proxy, in order to constitute a quorum for the meeting. For this purpose, abstentions and broker nonvotes (that is, proxies from brokers or nominees, indicating that such person has not received instructions from the beneficial owners or other persons entitled to vote shares as to a matter with respect to which the broker or nominees do not have discretionary power to vote) are counted in determining the shares present at a meeting.

21

     For voting purposes, however, only shares actually voted for the approval of the merger agreement, and neither abstentions nor broker nonvotes, will be counted as favorable votes in determining whether the merger agreement is approved by the holders of Citizens Bank Holding Company common stock. As a result, abstentions and broker nonvotes will have the same effect as votes against approval of the merger agreement.

Voting, Solicitation, and Revocation of Proxies

     If the enclosed proxy card is duly executed and received in time for the special meeting, it will be voted in accordance with the instructions given. If the proxy card is duly executed and received but no instruction is given, it is the intention of the persons named in the proxy to vote the shares represented by the proxy for the approval of the merger and in the proxy’s discretion on any other matter coming before the meeting. Any proxy given by a shareholder may be revoked before its exercise by:

     Citizens Bank Holding Company is soliciting the proxy for the special meeting on behalf of the Citizens Bank Holding Company board of directors. Citizens Bank Holding Company will bear the cost of solicitation of proxies from its shareholders. In addition to using the mails, Citizens Bank Holding Company may solicit proxies by personal interview, telephone, and facsimile. Banks, brokerage houses, other institutions, nominees, and fiduciaries will be requested to forward their proxy soliciting material to their principals and obtain authorization for the execution of proxies. Citizens Bank Holding Company does not expect to pay any compensation for the solicitation of proxies. However, Citizens Bank Holding Company will, upon request, pay the standard charges and expenses of banks, brokerage houses, other institutions, nominees, and fiduciaries for forwarding proxy materials to and obtaining proxies from their principals.

BACKGROUND OF AND REASONS FOR THE MERGER

Background of the Merger

     Glacier, through its Mountain West Bank subsidiary, currently offers community banking services from offices in northern Idaho, the Boise area, and Ketchum/Sun Valley, but does not serve the southeastern Idaho market. Consistent with its historical acquisition strategy, Glacier is interested in partnering with attractive financial institutions in markets that fit within or expand Glacier’s existing geographic footprint. In April 2004, D.A. Davidson & Co. (“Davidson”), as Glacier’s investment banking representative, sent a letter to Citizens Bank Holding Company expressing Glacier’s interest in expanding its community banking presence to southeastern Idaho through a merger with Citizens Bank Holding Company. In May and June, a representative of Davidson and Ralph Cottle, President of Citizens Bank Holding Company, had several telephone conversations regarding the prospect of arranging a meeting with Glacier to share information and further explore the prospect of a merger.

     On July 13, Mick Blodnick, CEO of Glacier, and a representative of Davidson met in Pocatello with Mr. Cottle and with Messrs. James Lee and Gary Blanchard, the chairman and vice chairman, respectively, of Citizens Bank Holding Company. Mr. Blodnick and the Citizens’ representatives shared information about their respective companies, discussed market conditions and prospects in southeastern Idaho, shared financial information, reviewed operating practices and corporate strategies, and discussed the potential benefits of a merger to shareholders, employees, and customers. In the course of the meeting, Messrs. Blodnick and Cottle

22

agreed that Glacier and Citizens Bank Holding Company shared similar community banking philosophies and that the parties should further explore the prospect of a merger.

     On August 5, Mr. Blodnick and a representative of Davidson met with Mr. Cottle and the Citizens Bank Holding Company board of directors in Pocatello. Mr. Blodnick presented the board with information about Glacier and answered questions about its financial performance, its operating practices with subsidiary banks, and the experiences of other community banks that chose to merge with Glacier. Davidson shared information and answered questions about the structure and process of a merger transaction, market valuation levels, and Glacier’s approach to structuring and valuing merger transactions.

     In August and September, Citizens Bank Holding Company shared additional information with Glacier, including management’s expectations for financial performance during 2004 and 2005. The parties also engaged in negotiations regarding the value and terms of a merger transaction.

     On September 27, following a meeting of its board of directors, Glacier provided Citizens Bank Holding Company a formal proposal setting forth the proposed terms of the merger. On September 29, the board of directors of Citizens Bank Holding Company met to discuss the formal proposal of Glacier with respect to the merger. The board of directors raised several issues with regard to the proposal and directed legal counsel of Citizens Bank Holding Company and Mr. Cottle to communicate the comments of the board of directors to Glacier. The comments of the board of directors of Citizens Bank Holding Company were communicated to Glacier on September 30. On September 30, after receiving comments from Citizens Bank Holding Company and its legal counsel, Glacier submitted a revised written proposal for the merger that was accepted by Citizens Bank Holding Company.

     In October and November, the parties and their advisors exchanged additional information, conducted due diligence reviews (with most of Glacier’s due diligence review occurring between October 18 and November 12), discussed operating and strategic plans for the Bank post-closing, and drafted and negotiated the terms of the merger agreement and related documents.

     On December 14, the board of directors of Glacier met to consider approval of the merger. Matters discussed included the fiduciary duties of the directors, the results of due diligence reviews, the terms of the merger agreement and related documents, the pro forma financial impact of the merger, expansion opportunities available to the Bank, and the timing and process for consummation of the merger. After due consideration of these matters, the Glacier board approved the merger by unanimous vote.

     On December 15, the Board of Directors of Citizens Bank Holding Company met to consider approval of the merger with Glacier. The Board of Directors discussed: their fiduciary duty to the shareholders of Citizens Bank Holding Company, questions about the definitive agreement, the form of consideration to be received by the shareholders, the break-up fee, the current stock price of Glacier and its dividend history, and the implications to Citizens Bank Holding Company, its shareholders, employees and customers. Also discussed were the reasons for completing the merger and the implications to Citizens Bank Holding Company if the Bank continued without an affiliation with Glacier. The Board of Directors took into consideration the presentation made by Hovde and its fairness opinion that was presented and approved by the Board of Directors as written. The Board then voted unanimously to approve the merger.

     Glacier and Citizens executed the merger agreement and related documents on the afternoon of December 15. After the close of business on December 15, the parties issued a joint press release announcing the execution of the merger agreement.

23

Reasons For The Merger - Citizens Bank Holding Company

     The Citizens Bank Holding Company board of directors believes the merger is in the best interests of Citizens Bank Holding Company and the Citizens Bank Holding Company shareholders. The Citizens Bank Holding Company board of directors unanimously recommends that Citizens Bank Holding Company shareholders vote for the approval of the merger agreement and the consummation of the transaction contemplated by that merger agreement.

     In reaching its determination to approve the merger agreement, the Citizens Bank Holding Company board of directors consulted with its management and its financial and legal advisors, and considered a number of factors. Following is a description of each of the material factors that Citizens Bank Holding Company board of directors believes favor the merger:

24

     In the course of its deliberations regarding the merger, the Citizens Bank Holding Company board of directors also considered the following information, which the board of directors determined did not outweigh the benefits to Citizens Community Bank and its shareholders expected to be generated by the merger:

25

     The foregoing discussion of the information considered by the Citizens Bank Holding Company board of directors is not intended to be exhaustive but includes all of the material factors considered by the board of directors. In reaching its determination to approve and recommend the merger, the Citizens Bank Holding Company board of directors did not assign any relative or specific weights to the factors considered in reaching that determination and individual directors may have given differing weights to different factors. Given the above, the Citizens Bank Holding Company board of directors determined that the merger agreement is in the best interests of Citizens Bank Holding Company and its shareholders and unanimously approved the merger.

Opinion of Hovde Financial LLC, Citizens Bank Holding Company Financial Advisor

     Hovde has delivered to the Board of Directors of Citizens Bank Holding Company its opinion that, based upon and subject to the various considerations set forth in its written opinion dated December 15, 2004, the total transaction consideration to be paid to the shareholders of Citizens Bank Holding Company is fair from a financial point of view as of such date. In requesting Hovde’s advice and opinion, no limitations were imposed by Citizens Bank Holding Company upon Hovde with respect to the investigations made or procedures followed by it in rendering its opinion. The full text of the opinion of Hovde, dated December 15, 2004, which describes the procedures followed, assumptions made, matters considered and limitations on the review undertaken, is attached hereto as Appendix C. The shareholders of Citizens Bank Holding Company should read this opinion in its entirety.

     Hovde is a nationally recognized investment banking firm and, as part of its investment banking business, is continually engaged in the valuation of financial institutions in connection with mergers and acquisitions, private placements and valuations for other purposes. As a specialist in securities of financial institutions, Hovde has experience in, and knowledge of, banks, thrifts and bank and thrift holding companies. The Board of Directors of Citizens Bank Holding Company selected Hovde to act as its financial advisor in connection with the merger on the basis of the firm’s reputation and expertise in transactions such as the merger.

     Hovde received a fee from Citizens Bank Holding Company for performing a financial analysis of the merger and rendering a written opinion to the Board of Directors of Citizens Bank Holding Company as to the fairness, from a financial point of view, of the merger to the shareholders of Citizens Bank Holding Company. Hovde received all of such fee subsequent to Hovde’s presentation of its fairness opinion and analysis to the Board of Directors of Citizens Bank Holding Company. Citizens Bank Holding Company has also agreed to indemnify Hovde against any claims, losses and expenses arising out of the merger or Hovde’s engagement that did not arise from Hovde’s gross negligence or willful misconduct.

     Hovde’s opinion is directed only to the fairness, from a financial point of view, of the total transaction consideration, and, as such, does not constitute a recommendation to any shareholder of Citizens Bank Holding Company as to how the shareholder should vote at the Citizens Bank Holding Company shareholder meeting. The summary of the opinion of Hovde set forth in this joint statement/prospectus is qualified in its entirety by reference to the full text of the opinion.

     The following is a summary of the analyses performed by Hovde in connection with its fairness opinion. Certain of these analyses were confirmed in a presentation to the Board of Directors of Citizens Bank Holding Company by Hovde. The summary set forth below does not purport to be a complete description of either the analyses performed by Hovde in rendering its opinion or the presentation delivered by Hovde to the Board of Directors of Citizens Bank Holding Company, but it does summarize all of the material analyses performed and presented by Hovde.

     The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial analyses and the application of those methods to the particular circumstances. In arriving at its opinion, Hovde did not attribute any particular weight to any analysis and factor considered by it, but

26

rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Hovde believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, without considering all factors and analyses, could create an incomplete view of the process underlying the analyses set forth in its report to the Board of Directors of Citizens Bank Holding Company and its fairness opinion.

     In performing its analyses, Hovde made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Citizens Bank Holding Company and Glacier. The analyses performed by Hovde are not necessarily indicative of actual value or actual future results, which may be significantly more or less favorable than suggested by such analyses. Such analyses were prepared solely as part of Hovde’s analysis of the fairness of the transaction consideration, from a financial point of view, to the shareholders of Citizens Bank Holding Company. The analyses do not purport to be an appraisal or to reflect the prices at which a company might actually be sold or the prices at which any securities may trade at the present time or at any time in the future. Hovde’s opinion does not address the relative merits of the merger as compared to any other business combination in which Citizens Bank Holding Company might engage. In addition, as described above, Hovde’s opinion to the Board of Directors of Citizens Bank Holding Company was one of many factors taken into consideration by the Board of Directors of Citizens Bank Holding Company in making its determination to approve the merger agreement.

     During the course of its engagement, and as a basis for arriving at its opinion, Hovde reviewed and analyzed material bearing upon the financial and operating conditions of Citizens Bank Holding Company and Glacier and material prepared in connection with the merger, including, among other things, the following:

27

     In rendering its opinion, Hovde assumed, without independent verification, the accuracy and completeness of the financial and other information and relied upon the accuracy of the representations of the parties contained in the merger agreement. Hovde also assumed that the financial forecasts furnished to or discussed with Hovde by Citizens Bank Holding Company and Glacier were reasonably prepared and reflected the best currently available estimates and judgments of senior management of Citizens Bank Holding Company and Glacier as to the future financial performance of Citizens Bank Holding Company, Glacier, or the combined company, as the case may be. Hovde has not made any independent evaluation or appraisal of any properties, assets or liabilities of Citizens Bank Holding Company or Glacier. Hovde assumed and relied upon the accuracy and completeness of the publicly available and other non-public financial information provided to it by Citizens Bank Holding Company and Glacier, relied upon the representations and warranties of Citizens Bank Holding Company and Glacier made pursuant to the merger agreement, and did not independently attempt to verify any of such information.

     Analysis of Selected Mergers. As part of its analysis, Hovde reviewed two groups of comparable merger transactions. The first peer group included transactions, which have occurred since January 1, 2002, that involved target banks in the Northwestern United States (ID, OR, WA, MT, WY) that had total assets under $400 million (the “Northwest Merger Group”). This Northwest Merger Group consisted of the following 11 transactions:

     Hovde also reviewed comparable mergers involving banks headquartered in the Western United States announced since January 1, 2003, in which the total assets of the seller were between $50 million and $150 million (the “West Merger Group”). This West Merger Group consisted of the following 33 transactions:

28

     Hovde calculated the medians and averages of the following relevant transaction ratios in the Northwest Merger Group and the West Merger Group: the percentage of the offer value to the acquired company’s total assets, the multiple of the offer value to the acquired company’s earnings for the twelve months preceding the announcement date of the transaction; the multiple of the offer value to the acquired company’s tangible book value; and the tangible book value premium to core deposits. Hovde compared these multiples with the corresponding multiples for the merger, valuing the total consideration that would be received pursuant to the merger agreement at approximately $17.3 million ($8.6 million in consideration in the form of Glacier’s stock, $8.6 million in cash, and $88,970 in qualified options consideration), or $37.47 per Citizens Bank Holding Company diluted share. In calculating the multiples for the merger, Hovde used Citizens Bank Holding Company’s earnings for the twelve months ended September 30, 2004, and Citizens Bank Holding Company’s tangible book value per share, total assets, and total deposits as of September 30, 2004. The results of this analysis are as follows:

29

     Discounted Cash Flow Analysis. Hovde estimated the present value of all shares of Citizens Bank Holding Company common stock by estimating the value of Citizens Bank Holding Company’s estimated future earnings stream beginning in 2005. Reflecting Citizens Bank Holding Company’s internal projections and Hovde estimates, Hovde assumed net income in 2005, 2006, 2007, 2008, and 2009 of $0.99 million, $1.14 million, $1.31 million, $1.51 million, and $1.74 million, respectively. The present value of these earnings was calculated based on a range of discount rates of 11.0%, 12.0%, 13.0%, 14.0%, and 15.0%, respectively. In order to derive the terminal value of Citizens Bank Holding Company’s earnings stream beyond 2009, Hovde assumed a terminal value based on a multiple of between 16.0x and 20.0x applied to free cash flows in 2009. The present value of this terminal amount was then calculated based on the range of discount rates mentioned above. These rates and values were chosen to reflect different assumptions regarding the required rates of return of holders or prospective buyers of Citizens Bank Holding Company common stock. This analysis and its underlying assumptions yielded a range of value for all the shares of Citizens Bank Holding Company stock of approximately $13.82 million (at a 15.0% discount rate and a 16.0x terminal multiple) to $20.61 million (at a 11.0% discount rate and a 20.0x terminal multiple) with a midpoint of $16.97 (using a 13.0% discount rate and a 18.0x terminal multiple), compared to total merger consideration of $17.29 million.

     Contribution Analysis. Hovde prepared a contribution analysis showing percentages of total assets, total net loans, total deposits, and total common equity and tangible equity at September 30, 2004 for Citizens Bank Holding Company and for Glacier, and actual twelve months preceding earnings and estimated fiscal year 2004 earnings that would be contributed to the combined company on a pro-forma basis by Citizens Bank Holding Company and Glacier. This analysis indicated that holders of Citizens Bank Holding Company common stock would own approximately 1.0% of the pro forma common shares outstanding of Glacier, assuming an exchange ratio of 1.129 for the stock consideration portion, while contributing a median of 3.2% of the financial components listed above. This pro forma ownership is based on the total consideration being paid to Citizens Bank Holding Company consisting of 50.3% of Glacier common stock and 49.7% in cash, therefore if pro forma ownership of 1.0% is divided by the percentage of stock (50.3%), the resulting value is 2.0%.

30

     Financial Implications to Citizens Bank Holding Company Shareholders. Hovde prepared an analysis of the financial implications of Glacier’s offer to a holder of Citizens Bank Holding Company common stock who elects to receive 100% Glacier common stock. This analysis indicated that on a pro forma equivalent basis, assuming the exchange ratio of 1.129 for the stock consideration portion of the total consideration and excluding any potential revenue enhancement opportunities, a stockholder of Citizens Bank Holding Company would achieve approximately 7.06% accretion in GAAP earnings per share, approximately 9.48% accretion in cash earnings per share, a decrease in tangible book value per share of approximately 43.12%, and a decrease in total book value per share of approximately 29.07% as a result of the consummation of the merger. The table below summarizes the results discussed above:

*Based on an exchange ratio of 1.129

     Comparable Company Analysis. Using publicly available information, Hovde compared the financial performance and stock market valuation of Glacier with the following Northwest United States publicly traded banking institutions with assets as of September 30, 2004 between $500 million and $5 billion:

31

     Indications of such financial performance and stock market valuation included profitability measures, earnings composition, operating and performance metrics, loan portfolio compositions, deposit compositions, yield and cost analysis, capital adequacy, asset quality, and reserve adequacy, all based on financial information as of September 30, 2004 and, where relevant, closing stock market information as f December 12, 2004. Selected market information for Glacier and the group of comparable companies that was analyzed is provided below.

     In addition, Hovde compared the financial performance and stock market valuation of Glacier with a second comparable company group consisting of the following United States publicly traded banking institutions with assets as of September 30, 2004 between $500 million and $5 billion, a price-to-earnings ratio over 18x, and a price-to-book value above 300%:

32

     Indications of such financial performance and stock market valuation included profitability measures, earnings composition, operating and performance metrics, loan portfolio compositions, deposit compositions, yield and cost analysis, capital adequacy, asset quality, and reserve adequacy, all based on financial information as of September 30, 2004 and, where relevant, closing stock market information as of December 12, 2004. Selected market information for Glacier and the group of comparable companies that was analyzed is provided below.

33

     Based upon the foregoing analyses and other investigations and assumptions set forth in its opinion, without giving specific weightings to any one factor or comparison, Hovde determined that the transaction consideration was fair from a financial point of view to the shareholders of Citizens Bank Holding Company.

Recommendation of the Citizens Bank Holding Company Board

     The Citizens Bank Holding Company board of directors unanimously recommends that its shareholders vote for approval of the merger agreement.

34

THE MERGER

     The following is a brief description of the material aspects of the merger. There are other aspects of the merger that are not discussed below, but that are contained in the merger agreement. You are being asked to approve the merger in accordance with the terms of the merger agreement, and you are urged to read the merger agreement carefully. The merger agreement is attached to this proxy statement/prospectus as Appendix A.

Basic Terms of the Merger

     The merger agreement provides for the merger of Citizens Bank Holding Company with and into Glacier, with Glacier as the surviving company. Following the merger, Citizens Community Bank will be a wholly owned subsidiary of Glacier and will operate under the “Citizens Community Bank” name, with the same offices as Citizens Community Bank before the merger.

     In the merger, Citizens Bank Holding Company shareholders will receive cash, Glacier common stock, or a combination of cash and Glacier common stock for their Citizens Bank Holding Company common stock, as described below. While Glacier and Citizens Bank Holding Company believe that they will receive the necessary regulatory approvals for the merger, there can be no assurance that such approvals will be received or, if received, as to the timing of such approvals or as to the ability to obtain such approvals on satisfactory terms. See “ — Conditions to the Completion of the Merger” and “ — Regulatory Requirements.”

Merger Consideration

     The merger agreement provides that as of the effective date of the merger, each share of Citizens Bank Holding Company common stock issued and outstanding immediately prior to the effective date will be converted into the right to receive either Glacier common stock, cash, or a combination of Glacier common stock and cash, in each case as described below. Under the merger agreement, Glacier will pay $8.6 million of the total merger consideration in cash and the remainder in shares of Glacier common stock (the number to be determined as described below) with an aggregate value of $8.6 million plus the amount of cash received by Citizens Bank Holding Company upon the exercise of Citizens Bank Holding Company stock options after the date of the merger agreement and prior to the effective date of the merger.

     Subject to allocation procedures described below, a Citizens Bank Holding Company shareholder will have the right to elect to convert such shareholder’s Citizens Bank Holding Company common stock into (i) cash; (ii) shares of Glacier common stock, or (iii) 50% cash and 50% Glacier common stock. See “ — Election Procedure.” In our discussion, we refer to the number of shares of Glacier common stock to be received for each share of Citizens Bank Holding Company common stock being converted into Glacier stock as the “per share stock consideration,” and we refer to the amount of cash to be received for each share of Citizens Bank Holding Company common stock being converted into cash as the “per share cash consideration.”

     The per share cash consideration payable under the merger agreement is $37.47 per Citizens Bank Holding Company share. The actual per share stock consideration to be paid to Citizens Bank Holding Company shareholders cannot be determined until the fifth day immediately prior to the effective date of the merger (the “determination date”). We intend to announce these amounts promptly after the determination date. The amounts will also be made available on Glacier’s website at www.glacierbancorp.com and on Citizens Community Bank’s website at www.ccb-idaho.com.

35

     The per share stock consideration is defined in the merger agreement as the number of Glacier shares (rounded to the nearest thousandth) obtained by dividing the per share cash consideration ($37.47) by the Glacier “average closing price.” The “average closing price” is the average of the closing sale prices of Glacier common stock as reported on Nasdaq during the 10 consecutive trading days ending on the determination date. We refer to this 10 trading day period as the “valuation period.”

     The formula described above is intended to substantially equalize the value of the consideration to be received for each share of Citizens Bank Holding Company common stock in the merger as measured during the valuation period, regardless of whether a Citizens Bank Holding Company shareholder elects to receive all Glacier common stock, all cash, or a combination of the two. This equalization mechanism was deemed to be desirable because, while the aggregate amount of cash to be received by Citizens Bank Holding Company shareholders is fixed, the value of the Glacier common stock will fluctuate. In order to best ensure that the value of the consideration for each share of Citizens Bank Holding Company common stock is as equal as possible upon receipt by Citizens Bank Holding Company shareholders, regardless of the form of the consideration, the per share stock consideration is based on the average closing price.

     For example, if the average closing price of Glacier common stock for the applicable 10 trading day period was $32.00, a Citizens Bank Holding Company shareholder receiving only stock would receive 1.171 shares of Glacier common stock per share of Citizens Bank Holding Company common stock having a value, based upon such average closing price, of approximately $37.47 per share of Citizens Bank Holding Company common stock, and a Citizens Bank Holding Company shareholder receiving only cash would receive $37.47 in cash per share of Citizens Bank Holding Company common stock, subject in each case to the allocation procedures described under the heading “The Merger — Allocation” below.

     If the price of Glacier common stock (based on the average closing price) increases, then the number of shares of Glacier common stock received for each share of Citizens Bank Holding Company would decrease. If the price of Glacier common stock decreases, the number of shares being exchanged for Glacier common stock would increase. For example, if the average closing price during the valuation period is $35.20 (approximately 10% higher than $32.00, the approximate price of Glacier’s common stock on February 8, 2005, the most recent practicable date prior to the mailing of this proxy statement/prospectus), then a Citizens Bank Holding Company shareholder receiving only stock would receive 1.064 shares of Glacier common stock per Citizens Bank Holding Company share, although the value per share of Citizens Bank Holding Company common stock would remain at $37.47 per share (subject to rounding differences). Similarly, if the average closing price during the valuation period is $28.80 (approximately 10% lower than $32.00), then a Citizens Bank Holding Company shareholder receiving only stock would receive 1.301 shares of Glacier common stock per Citizens Bank Holding Company share, although the value per share of Citizens Bank Holding Company common stock would remain at $37.47 per share (subject to rounding differences). Each of these examples is subject to the allocation procedures described below.

     No assurance can be given that the current fair market value of Glacier common stock will be equivalent to the fair market value of Glacier common stock on the date that stock is received by a Citizens Bank Holding Company shareholder or at any other time. The fair market value of Glacier common stock received by a Citizens Bank Holding Company shareholder may be greater or less than the current fair market value of Glacier common stock due to numerous market factors.

     Citizens Bank Holding Company may terminate the merger agreement if the Glacier average closing price is greater than $37.00 per share, unless Glacier elects to adjust the per share stock consideration. Glacier may terminate the merger agreement if the Glacier average closing price is less than $27.00 per share, unless Citizens Bank Holding Company agrees to accept an adjustment in the per share stock consideration. See “ — Termination of the Merger Agreement.”

36

     No fractional shares of Glacier common stock will be issued to any holder of Citizens Bank Holding Company common stock in the merger. For each fractional share that would otherwise be issued, Glacier will pay cash in an amount equal to the fraction multiplied by the average closing price of Glacier common stock during the valuation period. No interest will be paid or accrued on cash payable in lieu of fractional shares of Glacier common stock.

     The terms of the merger were determined by Glacier and Citizens Bank Holding Company on the basis of arms-length negotiations.

Election Procedure

     Subject to the allocation mechanism described in the next section, each Citizens Bank Holding Company shareholder holding more than 100 shares will have the right to elect to receive with respect to such shareholder’s shares of Citizens Bank Holdings Company common stock:

     All Cash Election. Shareholders who elect the all cash election or who hold 100 or fewer Citizens Bank Holding Company common shares will receive the per share cash consideration in respect of all their shares of Citizens Bank Holding Company common stock, subject to the allocation mechanism described below in the event shareholders elect to receive too much cash. In our discussion we refer to the shares held by a shareholder who owns 100 or fewer shares or who has made an all cash election as “cash election shares.”

     All Stock Election. Shareholders who elect the all stock election will receive the per share stock consideration in respect of all their shares of Citizens Bank Holding Company common stock, subject to the allocation mechanism described below in the event shareholders elect to receive too much stock. In our discussion we refer to the shares held by a shareholder who has made an all stock election as “stock election shares.”

     Combination Election. A shareholder who elects the combination election will receive 50% cash (based on the per share cash consideration amount of $37.47 per Citizens Bank Holding Company share) and 50% Glacier common stock (based on the per share stock consideration determined as described above).

     No-Election Shares. Shareholders who indicate that they have no preference as to whether they receive cash or Glacier common stock, and shareholders who do not make a valid election, will be deemed to have made a no-election (“no-election shares”). Shareholders who are deemed to have made a no-election will receive (i) the per share stock consideration if there is an oversubscription of the cash consideration, or (ii) the per share cash consideration if there is an oversubscription of the stock consideration. See “ — Allocation” below.

     Proposed Dissenting Shares. To the extent a Citizens Bank Holding Company shareholder provides notice of dissent to Citizens Bank Holding Company in accordance with the Idaho Business Corporation Act, such shareholder will be deemed to hold cash election shares for purposes of determining the allocation of cash and Glacier common stock among Citizens Bank Holding Company shareholders. Such shareholders will be deemed to have “proposed dissenting shares.” See “ — Allocation” below.

     For example, assuming a Citizens shareholder holds 200 shares of Citizens Bank Holding Company common stock (and that the average closing price of Glacier common stock for the valuation period was $32.00), if such shareholder made:

37

     The merger agreement provides that the total merger consideration to be paid by Glacier will be split as equally as possible between cash and Glacier common stock. Accordingly, there is no assurance that a holder of Citizens Bank Holding Company common stock will receive the form of consideration that the holder elects with respect to all shares of Citizens Bank Holding Company common stock held by that holder. If the elections result in an oversubscription with respect to shares of Citizens Bank Holding Company common stock which would otherwise receive either the per share stock consideration or the per share cash consideration, the exchange agent will follow the procedures for allocating Glacier common stock and cash described below under “ — Allocation.”

     Election Form. A green election form accompanies this proxy statement/prospectus. Each green election form allows the holder to make the all cash election, the all stock election, or the combination election, or to indicate that the holder makes no election assuming such holder owns more than 100 shares. Citizens Bank Holding Company and Glacier will make available election forms to persons who become holders of Citizens Bank Holding Company common stock between the record date for the Citizens Bank Holding Company special meeting and the close of business on the day prior to the election deadline.

     Holders of Citizens Bank Holding Company common stock who wish to elect the type of merger consideration they will receive in the merger should carefully review and follow the instructions set forth in the green election form. Shares of Citizens Bank Holding Company common stock as to which the holder has not made a valid election prior to the election deadline, which is 5:00 p.m., Mountain Time, on April 8, 2005, will be deemed no-election shares.

     To make an election, a holder of Citizens Bank Holding Company common stock must submit a properly completed election form so that it is actually received by the exchange agent at or prior to the election deadline in accordance with the instructions on the election form.

     An election may be revoked or changed by the person submitting the election form prior to the election deadline. The exchange agent will have reasonable discretion to determine whether any election, revocation or change has been properly or timely made and to disregard immaterial defects in the election forms, and any good faith decisions of Glacier regarding these matters will be binding and conclusive. Neither Glacier or Citizens Bank Holding Company nor the exchange agent will be under any obligation to notify any person of any defects in an election form.

     Letter of Transmittal. Soon after the completion of the merger, the exchange agent will send a letter of transmittal to each person who was a Citizens Bank Holding Company shareholder at the effective time of the merger. This mailing will contain instructions on how to surrender shares of Citizens Bank Holding Company common stock in exchange for the merger consideration the holder is entitled to receive under the merger agreement.

     All shares of Glacier common stock issued to the holders of Citizens Bank Holding Company common stock pursuant to the merger will be deemed issued as of the effective date. Until you surrender your Citizens Bank Holding Company stock certificates for exchange, you will accrue, but will not be paid, any dividends or other distributions declared after the effective date with respect to Glacier common stock into which any of your

38

shares may have been converted. When you surrender your certificates, Glacier will pay any unpaid dividends or other distributions, as well as any merger consideration payable in cash, without interest. After the effective time, there will be no transfers on the stock transfer books of Citizens Bank Holding Company of any shares of Citizens Bank Holding Company common stock. If certificates representing shares of Citizens Bank Holding Company common stock are presented for transfer after the completion of the merger, they will be cancelled and exchanged for the merger consideration into which the shares of Citizens Bank Holding Company common stock represented by those certificates shall have been converted.

     If a certificate for Citizens Bank Holding Company common stock has been lost, stolen or destroyed, the exchange agent will issue the consideration properly payable under the merger agreement upon receipt of appropriate evidence as to that loss, theft or destruction, appropriate evidence as to the ownership of that certificate by the claimant, and reasonable assurances, such as a bond or indemnity, satisfactory to Glacier in consultation with Citizens Bank Holding Company, and appropriate and customary identification.

Allocation

     Pursuant to the terms of the merger agreement, Glacier will pay $8.6 million of the total merger consideration in cash and the remainder in shares of Glacier common stock with an aggregate value of $8.6 million plus the amount of cash received by Citizens Bank Holding Company upon the exercise of Citizens Bank Holding Company stock options after the date of the merger agreement and prior to the effective date of the merger. Therefore, all cash elections and stock elections (but not combination elections) are subject to adjustment to preserve these limitations on the amount of cash to be paid and the number of shares of Glacier common stock to be issued in the merger. As a result, even if you make the all cash election or the all stock election, you may nevertheless receive a mix of cash and stock.

     Combination Elections. In any event, Citizens Bank Holding Company shareholders who elect to receive 50% cash and 50% Glacier common stock are guaranteed to receive this combination, and will not be subject to the allocation procedures described below.

     Oversubscription of the Cash Consideration. If the total amount of cash that would be payable to Citizens Bank Holding Company shareholders who make all cash elections and combination elections would be greater than $8.6 million, the following allocation mechanism will be used:

     Oversubscription of the Stock Consideration. If the total shares of Glacier common stock that would be issued to Citizens Bank Holding Company shareholders who make all stock elections and combination elections would be greater than the maximum total stock consideration, the following allocation mechanism will be used:

39

     The allocation described above will be computed by the exchange agent as soon as practicable after the election deadline and may, if necessary, be computed after the completion of the merger in accordance with the merger agreement.

     Because the federal income tax consequences of receiving cash, Glacier common stock, or both cash and Glacier common stock will differ, Citizens Bank Holding Company shareholders are urged to read carefully the information set forth under the caption “ — Certain Federal Income Tax Consequences” and to consult their own tax advisors for a full understanding of the merger’s tax consequences to them. In addition, because the stock consideration can fluctuate in value from the final stock price calculated during the valuation period, the economic value per share received by Citizens Bank Holding Company shareholders who receive the stock consideration may, as of the date of receipt by them, be more or less than the amount of cash consideration per share received by Citizens Bank Holding Company shareholders who receive cash consideration.

Exercised Citizens Bank Holding Company Qualified Options

     The merger agreement provides that each share of Citizens Bank Holding Company common stock issued and outstanding as of the effective date of the merger as a result of the exercise of Citizens Bank Holding Company qualified options between the date of the execution of the merger agreement and the effective date of the merger (defined in the merger agreement as “former company qualified options”) will be converted into and will be exchangeable for the per share stock consideration.

Unexercised Citizens Bank Holding Company Nonqualified Options

     The merger agreement provides that each Citizens Bank Holding Company nonqualified option (as defined in the merger agreement) that is outstanding as of the effective date of the merger will be converted into the right to receive $26.62 per option, which is the difference between the per share cash consideration payable in the merger and the option exercise price applicable to such nonqualified options.

Fractional Shares

     Glacier will not issue fractional shares in the merger. Instead, a cash payment will be paid in an amount equal to the product of (i) the fractional part of a share of Glacier common stock multiplied by (ii) the average closing price of Glacier common stock for the valuation period.

Effective Date of the Merger

     Subject to the conditions to the obligations of the parties to complete the merger as set forth in the merger agreement, the effective date of the merger will occur as soon as practicable after such conditions have been satisfied or waived. Subject to the foregoing, it is currently anticipated that the merger will be consummated during the first quarter of 2005. Either Glacier or Citizens Bank Holding Company may, subject to certain conditions, terminate the merger agreement if the effective date does not occur on or before May 15, 2005.

40

Federal Income Tax Consequences of the Merger

     The following is a discussion of the material federal income tax consequences of the merger that are generally applicable to holders of Citizens Bank Holding Company common stock who are citizens of, reside in or are organized under the laws of the United States. This discussion is based on currently existing provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing regulations thereunder (including final, temporary or proposed regulations) and current administrative rulings and court decisions, all of which are subject to change. Any such change, which may or may not be retroactive, could alter the tax consequences described herein. The following discussion is intended only as a general summary of the material federal income tax consequences of the merger and is not a complete analysis or listing of all potential tax effects relevant to a decision on whether to vote in favor of approval of the merger agreement.

     This discussion assumes that the Citizens Bank Holding Company shareholders hold their shares of Citizens Bank Holding Company common stock as a capital asset within the meaning of section 1221 of the Code. Further, the discussion does not address all aspects of federal income taxation that may be relevant to Citizens Bank Holding Company shareholders in light of their particular circumstances or that may be applicable to them if they are subject to special treatment under the Code, including, without limitation, shareholders who are subject to such special treatment because they are:

     Consummation of the merger is conditioned upon the receipt by Citizens Bank Holding Company of the opinion of Graham & Dunn PC, counsel to Glacier, dated as of the effective date of the merger, substantially to the effect that, on the basis of facts, representations and assumptions set forth or referred to in the opinion, which are consistent with the state of facts existing as of the effective date of the merger, the merger will be treated for United States federal income tax purposes as a reorganization within the meaning of section 368(a) of the Code. The tax opinions to be delivered in connection with the merger are not binding on the Internal Revenue Service (“IRS”) or the courts, and neither Citizens Bank Holding Company nor Glacier intends to request a ruling from the IRS with respect to the United States federal income tax consequences of the merger.

     Assuming consummation of the merger on the basis of facts, representations and assumptions as set forth in the opinion referred to above, the United States federal income tax consequences of the merger to a holder generally will depend on whether the holder exchanges such shareholder’s Citizens Bank Holding Company common stock for cash, Glacier common stock or a combination of cash and Glacier common stock.

     Exchange Solely for Cash. In general, if pursuant to the merger a holder exchanges all of its shares of Citizens Bank Holding Company common stock solely for cash, the holder will recognize gain or loss equal to the difference between the amount of cash received and its adjusted tax basis in the shares of Citizens Bank

41

Holding Company common stock surrendered, which gain or loss will be long-term capital gain or loss if the holder’s holding period with respect to the Citizens Bank Holding Company common stock surrendered is more than one year. Notwithstanding the foregoing, if a holder exchanges all of its shares of Citizens Bank Holding Company common stock solely for cash and either (1) is deemed to constructively own shares of Glacier common stock that were exchanged for shares of Citizens Bank Holding Company common stock or (2) actually owns shares of Glacier common stock, cash received by the holder may be taxed as a dividend rather than as a capital gain. The consequence to such holders may be similar to the consequences described below under the heading “ — Exchange for Glacier Common Stock and Cash.”

     Exchange Solely for Glacier Common Stock. If pursuant to the merger a holder exchanges all of its shares of Citizens Bank Holding Company common stock solely for shares of Glacier common stock, the holder will not recognize any gain or loss except in respect of cash received in lieu of any fractional share of Glacier common stock (as discussed below). The aggregate adjusted tax basis of the shares of Glacier common stock received in the merger will be equal to the aggregate adjusted tax basis of the shares of Citizens Bank Holding Company common stock surrendered for the Glacier common stock (reduced by the tax basis allocable to any fractional share of Glacier common stock for which cash is received), and the holding period of the Glacier common stock will include the period during which the shares of Citizens Bank Holding Bank common stock were held. If a holder has differing bases or holding periods in respect of its shares of Citizens Bank Holding Company common stock, the holder should consult its tax advisor prior to the exchange with regard to identifying the bases or holding periods of the particular shares of Glacier common stock received in the exchange.

     Exchange for Glacier Common Stock and Cash. If pursuant to the merger a holder exchanges all of its shares of Citizens Bank Holding Company common stock for a combination of Glacier common stock and cash, the holder will generally recognize gain (but not loss) in an amount equal to the lesser of (1) the amount of gain realized (i.e., the excess of the sum of the amount of cash and the fair market value of the Glacier common stock received pursuant to the merger over the holder’s adjusted tax basis in its shares of Citizens Bank Holding Company common stock surrendered) and (2) the amount of cash received pursuant to the merger. For this purpose, gain or loss must be calculated separately for each identifiable block of shares surrendered in the exchange, and a loss realized on one block of shares may not be used to offset a gain realized on another block of shares. Any recognized gain will generally be long-term capital gain if the holder’s holding period with respect to the Citizens Bank Holding Company common stock surrendered is more than one year. If, however, the cash received has the effect of the distribution of a dividend, the gain would be treated as a dividend to the extent of the holder’s ratable share of accumulated earnings and profits as calculated for federal income tax purposes. See “ — Possible Treatment of Cash as a Dividend” below.

     The aggregate tax basis of Glacier common stock received by a holder that exchanges its shares of Citizens Bank Holding Company common stock for a combination of Glacier common stock and cash pursuant to the merger will be equal to the aggregate adjusted tax basis of the shares of Citizens Bank Holding Company common stock surrendered for Glacier common stock and cash, reduced by the amount of cash received by the holder pursuant to the merger, and increased by the amount of gain (including any portion of the gain that is treated as a dividend as described below), if any, recognized by the holder on the exchange. The holding period of the Glacier common stock will include the holding period of the shares of Citizens Bank Holding Company common stock surrendered. If a holder has differing bases or holding periods in respect of its shares of Citizens Bank Holding Company common stock, the holder should consult its tax advisor prior to the exchange with regard to identifying the bases or holding periods of the particular shares of Glacier common stock received in the exchange.

     Possible Treatment of Cash as a Dividend. In general, the determination of whether the gain recognized in the exchange will be treated as capital gain or has the effect of a distribution of a dividend depends upon whether and to what extent the exchange reduces the holder’s deemed percentage stock ownership of Glacier.

42

For purposes of this determination, the holder is treated as if it first exchanged all of its shares of Citizens Bank Holding Company common stock solely for Glacier common stock and Glacier then immediately redeemed (the “deemed redemption”) a portion of the Glacier common stock in exchange for the cash the holder actually received. The gain recognized in the exchange followed by a deemed redemption will be treated as capital gain if the deemed redemption is (1) substantially disproportionate with respect to the holder, or (2) not essentially equivalent to a dividend.

     The deemed redemption, generally, will be substantially disproportionate with respect to a holder if the percentage described in (2) below is less than 80% of the percentage described in (1) below. Whether the deemed redemption is not essentially equivalent to a dividend with respect to a holder will depend upon the particular circumstances of the holder. At a minimum, however, in order for the deemed redemption to be not essentially equivalent to a dividend, the deemed redemption must result in a meaningful reduction in the holder’s actual and constructive percentage stock ownership of Glacier. In general, that determination requires a comparison of (1) the percentage of the outstanding stock of Glacier the holder is deemed to actually and constructively own immediately before the deemed redemption and (2) the percentage of the outstanding stock of Glacier the holder actually and constructively owns immediately after the deemed redemption. In applying the foregoing tests, a holder is deemed to own stock owned and, in some cases, constructively owned, by certain family members, by certain estates and trusts of which the holder is a beneficiary, and by certain affiliated entities. As these rules are complex, each holder that may be subject to these rules should consult its tax advisor. The Internal Revenue Service has ruled that a relatively minor reduction in the percentage stock ownership of a minority shareholder in a publicly held corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is a meaningful reduction.

     Cash Received in Lieu of a Fractional Share. Cash received by a holder of Citizens Bank Holding Company common stock in lieu of a fractional share of Glacier common stock generally will be treated as received in redemption of the fractional share, and gain or loss generally will be recognized based on the difference between the amount of cash received in lieu of the fractional share and the portion of the holder’s aggregate adjusted tax basis of the share of Citizens Bank Holding Company common stock surrendered allocable to the fractional share. Such gain or loss generally will be long-term capital gain or loss if the holding period for such shares of Citizens Bank Holding Company common stock is more than one year.

     Dissenting Shareholders. Holders of Citizens Bank Holding Company common stock who dissent with respect to the merger, as discussed in “Dissenters’ Rights,” and who receive cash in respect of their shares of Citizens Bank Holding Company common stock will be treated, generally, in the same manner as holders who exchange their shares of Citizens Bank Holding Company common stock solely for cash in accordance with the discussion above.

     Backup Withholding. Non-corporate shareholders of Citizens Bank Holding Company may be subject to information reporting and backup withholding on any cash payments they receive. Shareholders will not be subject to backup withholding, however, if they:

     Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against a shareholder’s federal income tax liability, provided he or she furnishes the required information to the IRS.

     Reporting Requirements. Shareholders who receive Glacier common stock as a result of the merger will be required to retain records pertaining to the merger and each shareholder will be required to file with such

43

holder’s federal income tax return for the year in which the merger takes place a statement setting forth certain facts relating to the merger. Citizens Bank Holding Company shareholders will be responsible for the preparation of their own tax returns.

     Graham & Dunn PC has delivered an opinion to the foregoing effect to Glacier. The opinion has been filed as an exhibit to the registration statement of which this proxy statement/prospectus is a part. The foregoing is only a summary of the tax consequences of the merger as described in the opinion. The opinion is based on assumptions, representations made by officers of Glacier and Citizens Bank Holding Company to Graham & Dunn PC, and contains qualifications appropriate to the subject matter.

     An opinion of counsel only represents counsel’s best legal judgment, and has no binding effect or official status of any kind. No assurance can be given that contrary positions will not be taken by the Internal Revenue Service or a court considering the issues. Neither Citizens Bank Holding Company nor Glacier has requested or will request a ruling from the IRS with regard to the federal income tax consequences of the merger.

     The foregoing is a general summary of the material federal income tax consequences of the merger to Citizens Bank Holding Company shareholders, without regard to the particular facts and circumstances of each shareholder’s tax situation and status. In addition, there may be relevant state, local, foreign or other tax consequences, none of which is described above. Because certain tax consequences of the merger may vary depending on the particular circumstances of each shareholder, each Citizens Bank Holding Company shareholder should consult its own tax advisor regarding its specific tax situation and status, including the specific application of state, local and foreign laws to such shareholder and the possible effect of changes in federal and other tax laws.

Voting Agreements

     The directors of Citizens Bank Holding Company have entered into a voting agreement, dated as of December 15, 2004. In the voting agreement, each director agrees, among other things, to vote the shares of Citizens Bank Holding Company common stock that he owns or controls in favor of the merger. The persons who have entered into this agreement are entitled to vote a total of 47,482 outstanding shares of Citizens Bank Holding Company common stock or shares of Citizens Bank Holding Company common stock subject to stock options, which is approximately 10.6% of the total shares outstanding.

Dissenters’ Rights of Appraisal

     Under Idaho law, Citizens Bank Holding Company shareholders have the right to dissent from the merger and to receive payment in cash for the “fair value” of their shares of Citizens Bank Holding Company common stock.

     Citizens Bank Holding Company shareholders electing to exercise dissenters’ rights must comply with the provisions of the Idaho appraisal laws in order to perfect their rights. The following is intended as a brief summary of the material provisions of the procedures that a Citizens Bank Holding Company shareholder must follow in order to dissent from the merger and perfect dissenters’ rights. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to the Idaho appraisal laws, the full text of which is set forth in Appendix B to this document.

     A shareholder who wishes to assert dissenters’ rights must:

44

     A shareholder wishing to deliver a notice asserting dissenters’ rights should hand deliver or mail the notice to the following address:

     A shareholder who wishes to exercise dissenters’ rights generally must dissent with respect to all of the shares the shareholder owns or over which the shareholder has the power to direct the vote. However, if a record shareholder is a nominee for several beneficial shareholders, some of whom wish to dissent and some of whom do not, then the record holder may dissent with respect to all the shares beneficially owned by any one person by notifying Citizens Bank Holding Company in writing of the name and address of each person on whose behalf the record shareholder asserts dissenters’ rights. A beneficial shareholder may assert dissenters’ rights directly by submitting to Citizens Bank Holding Company the record shareholder’s written consent and by dissenting with respect to all the shares of which the shareholder is the beneficial shareholder or over which the shareholder has power to direct the vote.

     A shareholder who does not, prior to the special shareholders meeting, deliver to Citizens Bank Holding Company a written notice of the shareholder’s intent to demand payment for the “fair value” of the shares will lose the right to exercise dissenters’ rights. In addition, any shareholder electing to exercise dissenters’ rights must either vote against the merger or abstain from voting.

     If the merger is completed, Glacier (as the surviving corporation) will, within 10 days after the effective date of the merger, deliver a written notice to all Citizens Bank Holding Company shareholders who properly gave notice of their intent to exercise dissenters’ rights. The notice will, among other things:

     A shareholder wishing to exercise dissenters’ rights must at that time file the payment demand and deliver share certificates as required in the notice. Failure to do so will cause that person to lose their dissenters’ rights.

     A shareholder who has complied with the requirements summarized in the previous paragraph may nevertheless decline to exercise dissenters’ rights and withdraw from the appraisal process by notifying Glacier by the date set forth in the written notice provided by Glacier following consummation of the merger. If the shareholder does not withdraw from the appraisal process by the specified date, he or she may not do so thereafter unless Glacier consents to such withdrawal in writing.

45

     Within 30 days after the merger occurs or receipt of the payment demand, whichever is later, Glacier will pay each dissenter with properly perfected dissenters’ rights Glacier’s estimate of the “fair value” of the shareholder’s shares, plus accrued interest from the effective date of the merger. With respect to a dissenter who did not beneficially own shares of Citizens Bank Holding Company prior to the public announcement of the merger, Glacier is not required to make the payment until the dissenter has agreed to accept the payment in full satisfaction of the dissenter’s demands. “Fair value” means the value of the shares immediately before the effective date of the merger. The rate of interest is required to be the rate on judgments in the state of Idaho.

     Within 30 days of Glacier’s payment (or offer of payment in the case of shares acquired after public announcement of the merger) to a dissenting shareholder, a dissenter dissatisfied with Glacier’s estimate of the fair value may notify Glacier of the dissenter’s own estimate of the fair value and demand payment of that amount. If Glacier does not accept the dissenter’s estimate and the parties do not otherwise settle on a fair value, then Glacier must, within 60 days of receiving the estimate and demand, petition a court to determine the fair value.

     In view of the complexity of the Idaho statutes governing dissenters’ rights of appraisal, Citizens Bank Holding Company shareholders who wish to dissent from the merger and pursue appraisal rights should consult their legal advisors.

     The failure of a Citizens Bank Holding Company shareholder to comply strictly with the Idaho statutory requirements will result in a loss of dissenters’ rights. A copy of the relevant statutory provisions is attached as Appendix B. You should refer to this appendix for a complete statement concerning dissenters’ rights and the foregoing summary of such rights is qualified in its entirety by reference to that appendix.

Conditions to the Merger; Regulatory Approvals

     Consummation of the merger is subject to various conditions. No assurance can be provided as to whether these conditions will be satisfied or waived by the appropriate party. Accordingly, there can be no assurance that the merger will be completed.

     Certain conditions must be satisfied or events must occur before the parties will be obligated to complete the merger. Each party’s obligations under the merger agreement are conditioned on satisfaction by the other party of conditions applicable to them. Some of these conditions, applicable to the respective obligations of both Glacier and Citizens Bank Holding Company, are as follows:

46

     In addition to the above, the obligations of Glacier under the merger agreement are subject to conditions that include the following:

     Additionally, either Glacier or Citizens Bank Holding Company may terminate the merger if certain conditions applicable to the other party are not satisfied or waived. Those conditions are discussed below under “ - Amendment or Termination of the Merger Agreement.”

     Either Glacier or Citizens Bank Holding Company may waive any of the other party’s conditions, except those that are required by law (such as receipt of regulatory and Citizens Bank Holding Company shareholder approval). Either Glacier or Citizens Bank Holding Company may also grant extended time to the other party to complete an obligation or condition.

Amendment or Termination of the Merger Agreement

     The merger agreement may be amended or supplemented at any time by written agreement of the parties, whether before or after the Citizens Bank Holding Company special meeting. To the extent permitted under applicable law, the parties may make any amendment or supplement without further approval of Citizens Bank Holding Company shareholders. However, after shareholder approval, any amendments that would reduce the amount or change the form of consideration Citizens Bank Holding Company shareholders will receive in the merger or the allocation of the cash percentage and stock percentage would require further Citizens Bank Holding Company shareholder approval.

     The merger agreement contains several provisions entitling either Glacier or Citizens Bank Holding Company to terminate the merger agreement under certain circumstances. The following briefly describes these provisions:

     Lapse of Time. If the merger has not closed by May 15, 2005, then at any time after that date, the board of directors of either Glacier or Citizens Bank Holding Company may terminate the merger agreement.

     Glacier Average Closing Price Greater than $37.00. Citizens Bank Holding Company may terminate the merger agreement if the Glacier average closing price (as defined in the merger agreement) is greater than $37.00.

     If Citizens Bank Holding Company provides written notice of its intent to terminate the merger agreement because the Glacier average closing price is greater than $37.00, Glacier may elect, within one business day of its receipt of such notice, to adjust the per share stock consideration through the issuance of additional shares of Glacier common stock, such that the per share stock consideration equals the number of share of Glacier common stock that

47

a Citizens Bank Holding Company shareholder would have received if the Glacier average closing price had been $37.00. If this election is made by Glacier, no termination of the merger agreement will occur and the merger agreement will remain in effect according to its terms, except that the per share stock consideration will have been adjusted.

     Glacier Average Closing Price Less than $27.00. Glacier may terminate the merger agreement in the Glacier average closing price (as defined in the merger agreement) is less than $27.00.

     If Glacier provides written notice of its intent to terminate the merger agreement because the Glacier average closing price is less than $27.00, Citizens Bank Holding Company may elect, within one business day of its receipt of such notice, to accept an adjustment to the per share stock consideration through the issuance of fewer shares of Glacier common stock, such that the per share stock consideration equals the number of shares of Glacier common stock that a Citizens Bank Holding Company shareholder would have received in the Glacier average closing price had been $27.00. If this election is made by Citizens Bank Holding Company, no termination of the merger agreement will occur and the merger agreement will remain in effect according to its terms, except that that the per share stock consideration will have been adjusted.

     Mutual Consent. The parties may terminate the merger agreement at any time before closing, whether before or after approval by Citizens Bank Holding Company shareholders, by mutual consent.

     No Regulatory Approvals. Either party may terminate the merger agreement if the regulatory approvals required to be obtained are denied, or if any such approval is conditioned on a substantial deviation from the transactions contemplated by the merger agreement, subject to certain rights granted in the merger agreement to appeal the denial of such regulatory approval.

     Breach of Warranty. Either party may terminate the merger agreement (so long as the terminating party is not then in material breach of any of its representations, warranties, covenants or other agreements in the merger agreement) if there has been a material breach of any of the representations or warranties set forth in the merger agreement on the part of the other party, which breach is not cured within 30 days following written notice to such party, or which breach cannot, by its nature, be cured prior to the closing of the merger.

     Breach of Covenant. Either party may terminate the merger agreement (so long as the terminating party is not then in material breach of any of its representations, warranties, covenants or agreements in the merger agreement) if there has been a material breach of any covenants or agreements set forth in the merger agreement by the other party, which is not cured within 30 days following written notice to the party committing such breach, or which breach, by its nature, cannot be cured prior to the closing of the merger.

     Citizens Bank Holding Company Fails to Recommend Shareholder Approval. Glacier may terminate the merger agreement (so long as it is not then in material breach of any of its representations, warranties, covenants or agreements in the merger agreement) before Citizens Bank Holding Company’s shareholders approve the merger, if the Citizens Bank Holding Company board of directors fails to recommend to its shareholders approval of the merger, or modifies, withdraws or changes in a manner adverse to Glacier its recommendation.

     Citizens Bank Holding Company Shareholders Fail to Approve Merger. Either party may terminate the merger agreement (so long as such party is not then in material breach of any of its representations, warranties, covenants or agreements in the merger agreement) if the required vote of Citizens Bank Holding Company shareholders required for the consummation of the merger is not obtained, regardless of whether the Citizens Bank Holding Company board of directors recommends such approval.

     Impracticability. Either party may terminate the merger agreement upon written notice to the other party if the board of directors of the party seeking termination has determined in its sole judgment, made in good faith and after due consideration and consultation with counsel, that the merger has become inadvisable or impracticable by

48

reason of the institution of litigation by the federal government or the government of the State of Idaho to restrain or invalidate the merger.

     Potential Dissenting Shares. Glacier may terminate the merger agreement if holders of 10% or more of the outstanding shares of Citizens Bank Holding Company common stock are proposed dissenting shares (as defined in the merger agreement).

     Superior Proposal. Citizens Bank Holding Company may terminate the merger agreement if its board of directors determines in good faith that Citizens Bank Holding Company has received a “Superior Proposal” as defined in the merger agreement. This right is subject to the requirement that Citizens Bank Holding Company may terminate the merger agreement only if Citizens Bank Holding Company delivers notice to Glacier that, subsequent to delivering such notice it intends to enter into a letter of intent, acquisition agreement or similar agreement relating to such Superior Proposal, and that has provided Glacier with an opportunity, if Glacier so elects, to amend the terms of the merger agreement (negotiated in good faith between Glacier and Citizens Bank Holding Company) in such a manner as would enable Citizens Bank Holding Company to proceed with the merger.

Termination Fees

     Subject to certain exceptions, Citizens Bank Holding Company will pay Glacier a termination fee of $170,000 if Glacier terminates the merger agreement based on a Citizens Bank Holding Company breach of its representations or breach of its covenants. Glacier will pay Citizens Bank Holding Company a termination fee of $170,000 if Citizens Bank Holding Company terminates the merger agreement based on a Glacier breach of its representations or breach of its warranties.

Break-Up Fee

     If the merger agreement is terminated (i) because the Citizens Bank Holding Company board of directors fails to recommend shareholder approval of the merger agreement; or (ii) Glacier terminates the merger agreement after Citizens Bank Holding Company’s receipt of a Superior Proposal followed by an immediate acquisition event (as defined in the merger agreement), then Citizens Bank Holding Company will immediately pay Glacier a break-up fee of $860,000. If the merger agreement is terminated by Glacier due to Citizens Bank Holding Company’s receipt of a Superior Proposal and prior to or within six months after such termination, Citizens Bank Holding Company or Citizens Community Bank enter into an agreement, or publicly announce an intention, to engage in an acquisition event, or within 12 months after such termination an acquisition event has occurred, then Citizens Bank Holding Company will promptly pay to Glacier the break-up fee in the amount of $860,000.

Allocation of Costs Upon Termination

     If the merger agreement is terminated (except under circumstances that would require the payment of a termination fee or break-up fee) Glacier and Citizens Bank Holding Company will each pay their own out-of-pocket expenses incurred in connection with the transaction and, except for any applicable termination or break-up fees, will have no other liability to the other party.

Conduct Pending the Merger

     The merger agreement provides that, until the merger is effective, Citizens Bank Holding Company and Citizens Community Bank will conduct their respective businesses only in the ordinary and usual course. The merger agreement also provides that, unless Glacier otherwise consents in writing, Citizens Bank Holding Company and Citizens Community Bank will refrain from engaging in various activities such as:

49

Citizens Community Bank Management and Operations After the Merger

     Following the merger, the Citizens Community Bank board of directors will consist of the Citizens Community Bank directors immediately before the merger, with the addition of Michael Blodnick, the President and Chief Executive Officer of Glacier.

     Citizens Community Bank’s executive officers immediately before the merger will remain unchanged immediately following the merger.

     Although Citizens Community Bank will be a wholly-owned subsidiary of Glacier after the merger, Glacier intends to operate it independently, under the name “Citizens Community Bank.”

50

Employee Benefit Plans

     The merger agreement confirms Glacier’s intent that Glacier’s current personnel policies will apply to any members of Citizens Bank Holding Company and Citizens Community Bank who are retained in the service of Glacier following the closing of the merger. Such retained employees will be eligible to participate in all of the benefit plans of Glacier that are generally available to similarly situated employee of Glacier. For purposes of participation in such plans, service with Citizens Bank Holding Company or Citizens Community Bank will constitute prior service with Glacier for purposes of determining eligibility and vesting. If any persons who are Citizens Community Bank employees are terminated within three months of the closing of the merger as a result of the consolidation of staff functions, such persons will be entitled to receive the severance payment specified in Glacier’s severance plan for employees as then in effect.

Interests of Certain Persons in the Merger

     Certain members of the Citizens Bank Holding Company board of directors and management may be deemed to have interests in the merger, in addition to their interests as shareholders of Citizens Bank Holding Company generally. The Citizens Bank Holding Company board of directors was aware of these factors and considered them, among other things, in approving the merger agreement.

     Stock Ownership. The directors, executive officers and principal shareholders of Citizens Bank Holding Company, together with their affiliates, beneficially owned, as of the record date for the special meeting, a total number of shares of Citizens Bank Holding Company common stock representing approximately 24% of all outstanding Citizens Bank Holding Company shares and options. The directors and executive officers of Citizens Bank Holding Company will receive the same consideration in the merger for their shares as other shareholders of Citizens Bank Holding Company.

     Voting Agreements. The directors of Citizens Bank Holding Company have entered into a voting agreement, dated as of the same date as the merger agreement. Pursuant to this agreement, each director agrees to vote the shares of Citizens Bank Holding Company common stock that he owns or controls in favor of the merger. The persons who have entered into this agreement are entitled to vote a total of 47,482 outstanding shares of Citizens Bank Holding Company common stock or shares of Citizens Bank Holding Company common stock that are subject to outstanding options, which is approximately 10.6% of the total shares outstanding.

     Stock Options. The merger agreement provides that as a condition to the closing of the merger, all Citizens Bank Holding Company “qualified options” (as defined in the merger agreement) will have been exercised and the exercise price paid to Citizens Bank Holding Company. The merger agreement also provides that any Citizens Bank Holding Company “nonqualified options” (as defined in the merger agreement) that are outstanding at the closing of the merger will be converted, without further action, into the right to receive, on a per-share basis, an amount equal to the difference between the per-share cash consideration payable by Glacier in the merger and the nonqualified option exercise price. As of the date of this proxy statement/prospectus, directors and executive officers of Citizens Bank Holding Company held nonqualified options to acquire a total of 800 shares of Citizens Bank Holding Company common stock and qualified options to acquire a total of 8,200 shares of Citizens Bank Holding Company common stock. In addition, former directors and executive officers of Citizens Bank Holding Company and Citizens Community Bank held nonqualified stock options to acquire a total of 16,300 shares of Citizens Bank Holding Company common stock.

     Citizens Community Bank Employment Agreement — Ralph Cottle. Citizens Community Bank entered into an employment agreement with Ralph G. Cottle, the President and Chief Executive Officer of Citizens Community Bank, dated as of December 15, 2004. The employment agreement commences on the date of the closing of the merger, and is for a term of three years. The agreement provides that initially, Mr. Cottle will receive the annual salary that he is receiving from Citizens Community Bank on the effective date of the merger,

51

with subsequent salary increases subject to Citizens Community Bank’s annual review of his compensation and performance. The agreement also provides for an annual incentive bonus, the amount to be determined by the board of directors of Citizens Community Bank based on performance. Under the terms of the agreement, if Mr. Cottle’s employment is terminated by Citizens Community Bank during the term of the agreement without “cause” (as defined in the agreement) or by Mr. Cottle for “good reason” (as defined in the agreement), Citizens Community Bank will pay him a lump sum payment equal to the amount of his annual base salary at the time of termination. If Mr. Cottle’s employment is terminated for cause or without good reason, Mr. Cottle is only entitled to base compensation earned through the termination date. The merger will trigger the provisions of this employment agreement.

     Citizens Community Bank Board of Directors. The merger agreement provides that the Citizens Community Bank board of directors (with the addition of Mr. Michael Blodnick, President and Chief Executive Officer of Glacier) will continue to serve following closing of the merger.

     Director Non-competition Agreements. All members of the Citizens Community Bank board of directors except Mr. Cottle have entered into a non-competition agreement with Glacier. Except under certain limited circumstances, the noncompetition agreement prohibits directors of Citizens Community Bank from competing with Glacier and/or Citizens Community Bank within a 90-mile radius of Citizens Community Bank’s office in Pocatello, Idaho. The term of the non-competition agreement commences upon consummation of the merger and continues for the longer of (i) two years after closing of the merger or (ii) one year after the director’s service as a director of Citizens Community Bank is terminated.

     Indemnification of Directors and Officers; Insurance. The merger agreement provides that Glacier will, for a period of six years following the closing of the merger, indemnify the present and former directors and officers of Citizens Bank Holding Company and Citizens Community Bank against liabilities or costs that may arise in the future, incurred in connection with claims or actions arising out of or pertaining to matters that existed or occurred prior to the effective date of the merger. The scope of this indemnification is to the same extent that such persons would have been entitled to indemnification under Idaho law or the articles of incorporation or bylaws of Citizens Bank Holding Company and/or Citizens Community Bank.

     The merger agreement also provides that for a period of six years following the closing of the merger, Glacier will use reasonable efforts to cause to be maintained in effect, director and officer liability insurance substantially similar to that maintained by Glacier with respect to claims arising from facts or events that occurred before the effective date of the merger.

Accounting Treatment of the Merger

     The acquisition of Citizens Bank Holding Company will be accounted for using the purchase method of accounting by Glacier under generally accepted accounting principles. Accordingly, using the purchase method of accounting, the assets and liabilities of Citizens Bank Holding Company will be recorded by Glacier at their respective fair values at the time of the merger. The excess of Glacier’s purchase price over the net fair value of assets acquired including identifiable intangible assets and liabilities assumed is recorded as goodwill. Goodwill will be periodically assessed for impairment but no less frequently than on an annual basis. Prior period financial statements are not restated and results of operation of Citizens Bank Holding Company will be included in Glacier’s consolidated statement of operations after the date of the merger. The intangible assets will be amortized against the combined company’s earnings following completion of the merger.

Stock Resales by Citizens Bank Holding Company Affiliates

     The Glacier common stock to be issued in the merger will be transferable free of restrictions under the Securities Act of 1933 (“1933 Act”), except for shares received by persons, including directors and executive officers of Citizens Bank Holding Company, who may be deemed to be “affiliates” of Citizens Bank Holding

52

Company, as that term is defined in the rules under the 1933 Act. Affiliates may not sell their shares of Glacier common stock acquired in the merger, except (a) pursuant to an effective registration statement under the 1933 Act covering those shares, (b) in compliance with Rule 145, or (c) in accordance with an opinion of counsel reasonably satisfactory to Glacier, under other applicable exemptions from the registration requirements of the 1933 Act. Glacier will obtain customary agreements with all Citizens Bank Holding Company directors, officers, and affiliates of Citizens Bank Holding Company, under which such persons will represent that they will not dispose of their shares of Glacier received in the merger or the shares of capital stock of Citizens Bank Holding Company or Glacier held by them before the merger, except in compliance with the 1933 Act and the rules and regulations promulgated under the 1933 Act. This proxy statement/prospectus does not cover any resales of the Glacier common stock received by affiliates of Citizens Bank Holding Company.

INFORMATION CONCERNING CITIZENS BANK HOLDING COMPANY

Business

     Citizens Bank Holding Company is headquartered in Pocatello, Idaho and is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Citizens Bank Holding Company was incorporated under the laws of the State of Idaho on March 26, 2002 at the direction of the Board of Directors of Citizens Community Bank (the “Bank”) for the purpose of adopting a bank holding company structure through which it would exchange its shares of common stock for shares of common stock of Citizens Bank Holding Company. The exchange was approved by the shareholders of Citizens Community Bank on April 29, 2002 and became effective on July 1, 2002. Thereafter, Citizens Community Bank became a wholly owned subsidiary of Citizens Bank Holding Company. At September 30, 2004, Citizens Bank Holding Company had total consolidated assets of approximately $111.8 million, net loans of approximately $82.2 million and deposits of approximately $98.0 million. At September 30, 2004, Citizens Bank Holding Company had approximately 364 shareholders of record owning 441,034 shares of its common stock.

     Citizens Community Bank, a wholly owned subsidiary of Citizens Bank Holding Company, was incorporated on April 17, 1996. The Bank is an Idaho state-chartered commercial bank. The Bank is regulated by the Idaho Department of Finance and by the Federal Deposit Insurance Corporation, its primary federal regulator and the insurer of its deposits. The Bank offers full-service community banking through three banking locations serving the southeastern Idaho area. The Bank has its main office in Pocatello, Idaho and one branch located in each of Pocatello and Idaho Falls, Idaho. In addition, the Bank has a loan production office in Rexburg, Idaho.

Products and Services

     Real Estate Loans. These loans include various types of loans for which the Bank holds real property as collateral. Interest rates on these loans typically adjust annually, or more frequently. Real estate construction loans include both commercial and residential, but are principally made to builders to construct single family residences of which many are sold to purchasers prior to construction. Real estate construction loans typically have maturities of 12 months, and charge origination fees. Terms may vary depending upon many factors, including location, type of project and financial condition of the borrower. The primary risks of real estate mortgage loans include the borrower’s inability to pay and deterioration in value of real estate that is held as collateral.

     Commercial Loans. These loans consist primarily of loans to businesses for various purposes, including revolving lines of credit and equipment financing. These loans are secured by collateral other than real estate, such as inventory, accounts receivable, machinery, government guarantees, or other commercial assets, and they generally mature within one year and have adjustable interest rates. Revolving lines of credit are generally for business purposes, mature annually and have adjustable interest rates. It is the

53

Bank’s standard practice in making commercial loans to receive real estate as collateral in addition to other appropriate collateral. The primary repayment risk of commercial loans is the failure of the borrower’s business due to economic or financial factors.

     Agricultural Loans. The Bank originates a variety of agricultural loans. These loans relate to equipment, livestock, crops and farmland. The primary risks of agricultural loans include the prices of crops and livestock, as well as weather conditions. The Bank generally requires collateral, such as crops, livestock, equipment and/or real estate, in connection with agricultural loans.

     Installment Loans. Installment loans are primarily to individuals, are typically secured by the financed assets, generally have terms of two to five years and bear interest at fixed rates. These loans usually are secured by motor vehicles or other personal assets and in some instances are unsecured. The primary risk of consumer lending relates to the personal circumstances of the borrower.

     Letters of Credit. The Bank issues letters of credit in the ordinary course of its business. It applies the same credit standards to these commitments as it does do to all of our lending activities and includes these commitments in its lending risk evaluations. The Bank’s exposure to credit loss under letters of credit is represented by the amount of these commitments. The Bank generally seeks collateral, such as real estate, inventory, accounts receivable or other business assets, when issuing letters of credit.

     The Board of Directors of the Bank has approved specific lending policies and procedures for the Bank and is responsible for implementation of the policies. The lending policies and procedures include guidelines for loan term, loan-to-value ratios, collateral appraisals and interest rates. The loan policies also vest varying levels of loan authority in management, the Bank’s loan committee and the Board of Directors of the Bank. Management of the Bank monitors lending activities through regular loan committee meetings, monthly reporting and periodic review of loans.

Products Offered

     The Bank also offers personal and commercial banking services, mortgage origination, and Internet banking. The Bank offers a range of banking products and services, including the following: checking accounts, ATM’s, checking accounts with interest, savings accounts, money market accounts, certificates of deposit, NOW accounts, Individual Retirement Accounts, residential mortgage services, branch banking, and debit cards.

Deposit Services

     The Bank offers the full range of deposit services that are typically available in most banks and savings and loan associations, including checking accounts, savings accounts, money market accounts and various types of certificates of deposit. The transaction accounts and certificates of deposit are tailored to the Bank’s primary market area at rates competitive with those offered in the area. All deposit accounts are insured by the FDIC to the maximum amount permitted by law.

Other Services

     Other services the Bank provides include automated teller machines (“ATMs”), ATM access cards, point-of-sale (“POS”) debit cards, safe deposit boxes, merchant credit card services, travelers cheques, savings bonds, direct deposit, night deposit, and cash management services.

54

Competition

     The Bank faces a high degree of competition. In its market areas, there are numerous small banks and several larger national and regional financial banking groups. The Bank also competes with insurance companies, savings and loan associations, credit unions, leasing companies, mortgage companies, and other financial service providers. Many of these competitors have capital resources and legal lending limits substantially in excess of our capital resources and legal lending limits.

     The Bank competes for loans and deposits principally based on the availability and quality of services provided, responsiveness to customers, interest rates, loan fees and office locations. The Bank actively solicits deposit customers and compete by offering them high quality customer service and a complete product line. The Bank believes its personalized customer service, broad product line and community banking philosophy enable it to compete effectively in its market area.

     The adoption of the Gramm-Leach-Bliley Act of 1999 (the Financial Services Modernization Act) eliminated many of the barriers to affiliation among providers of financial services and further opened the door to business combinations involving banks, insurance companies, securities or brokerage firms, and others. This regulatory change has led to further consolidation in the financial services industry and the creation of financial conglomerates which frequently offer multiple financial services, including deposit services, brokerage and others. When combined with technological developments such as the Internet that have reduced barriers to entry faced by companies physically located outside Citizens Bank Holding Company’s market area, changes in the market have resulted in increased competition and can be expected to result in further increases in competition in the future.

Facilities

     In addition to the main office in Pocatello, Idaho, Citizens Bank Holding Company has one branch located in each of Pocatello and Idaho Falls, Idaho. It also has a loan production office in Rexburg, Idaho. The following is a description of the facilities:

55

Employees. As of December 31, 2004, Citizens Bank Holding Company and the Bank had 51 employees, of which 47 are full-time equivalent employees. None of the employees are covered by a collective bargaining agreement. Management believes relations with its employees are good.

Legal Proceedings. Citizens Bank Holding Company and the Bank currently are, and from time to time may continue to be, parties to various legal actions arising in the normal course of business. The Bank currently is a defendant in one case alleging that the Bank failed to honor a pre-judgment writ of attachment and notice of continuing garnishment. The Bank intends to defend itself vigorously. Management currently believes that resolving this matter will not have a material adverse impact on its financial position or its results of operations, however, litigation is inherently uncertain and there can be no assurances as to the ultimate outcome or effect of this action.

Security Ownership of Management and Certain Beneficial Owners

     The following tables set forth information as of January 1, 2005, regarding the shares of Citizens Bank Holding Company common stock beneficially owned by (i) each person (other than executive officers or directors whose stock ownership is listed below), known by Citizens Bank Holding Company to own beneficially more than 5% of Citizens Bank Holding Company’s common stock, (ii) each director of Citizens Bank Holding Company (including one executive officer of the Bank), (iii) each executive officer of the Bank, and (iv) all directors and executive officers of Citizens Bank Holding Company as a group. Except as noted below, each holder has sole voting and investment power with respect to shares of Citizens Bank Holding Company common stock listed as owned by such person or entity.

56

Principal Shareholders (5% Owners Exclusive of Directors and Officers)

Directors and Named Executive Officers

Executive Officers

57

DESCRIPTION OF GLACIER’S CAPITAL STOCK

     Glacier’s authorized capital stock consists of 62,500,000 shares of common stock, $0.01 par value per share, and 1,000,000 shares of preferred stock, $0.01 par value per share. As of the date of this proxy statement/prospectus, Glacier had no shares of preferred stock issued. The Glacier board of directors is authorized, without further shareholder action, to issue preferred stock shares with such designations, preferences and rights as the Glacier board of directors may determine.

     Glacier common stock is listed for trading on the Nasdaq National Market under the symbol “GBCI.”

     Glacier’s shareholders do not have preemptive rights to subscribe to any additional securities that may be issued. Each share of Glacier common stock has the same relative rights and is identical in all respects to every other share of Glacier common stock. If Glacier is liquidated, the holders of Glacier common stock are entitled to share, on a pro rata basis, Glacier’s remaining assets after provision for liabilities.

     For additional information concerning Glacier’s capital stock, see “Comparison Of Certain Rights Of Holders Of Glacier And Citizens Bank Holding Company Common Stock.”

COMPARISON OF CERTAIN RIGHTS OF HOLDERS OF
GLACIER AND CITIZENS BANK HOLDING COMPANY COMMON STOCK

     Montana law and Glacier’s Articles of Incorporation and Bylaws govern the rights of Glacier shareholders and will govern the rights of Citizens Bank Holding Company shareholders who become shareholders of Glacier as a result of the merger. The rights of Citizens Bank Holding Company shareholders are currently governed by Idaho law and by Citizens Bank Holding Company’s Articles of Incorporation and Bylaws. The following is a brief summary of certain differences between the rights of Glacier and Citizens Bank Holding Company shareholders. This summary does not purport to be complete and is qualified by the documents and statutes referenced and by other applicable law. See also “Where You Can Find More Information About Glacier.”

General

     Under its Articles of Incorporation, Glacier’s authorized capital stock consists of 62,500,000 of common stock, $0.01 par value per share, and 1,000,000 shares of preferred stock, $0.01 par value per share. No shares of preferred stock are currently outstanding.

     Under its Articles of Incorporation, Citizens Bank Holding Company’s authorized capital consists of 5,000,000 shares of common stock, $5.00 par value per share, and 1,000,000 shares of preferred stock, $5.00 par value per share.

     The following is a more detailed description of Glacier’s and Citizens Bank Holding Company’s capital stock.

Common Stock

     As of December 31 2004, there were 24,549,410 shares of Glacier common stock issued and outstanding, in addition to options for the purchase of 1,208,505 shares of Glacier common stock under Glacier’s employee and director stock option plans.

     As of December 31, 2004, there were 441,034 shares of Citizens Bank Holding Company common stock issued and outstanding. Additionally, 25,300 shares of Citizens Bank Holding Company common stock were subject to outstanding options under Citizens Bank Holding Company employee and director stock option plans.

58

Preferred Stock

     As of the date of this proxy statement/prospectus, neither Glacier nor Citizens Bank Holding Company had shares of preferred stock issued. The Glacier board of directors is authorized, without further shareholder action, to issue preferred stock shares with such designations, preferences and rights as the Glacier board of directors may determine. The Citizens Bank Holding Company board of directors is similarly authorized to issue preferred stock shares.

Dividend Rights

     Dividends may be paid on Glacier common stock as and when declared by the Glacier board of directors out of funds legally available for the payment of dividends. The Glacier board of directors may issue preferred stock that is entitled to such dividend rights as the board of directors may determine, including priority over the common stock in the payment of dividends. The ability of Glacier to pay dividends basically depends on the amount of dividends paid to it by its subsidiaries. The payment of dividends is subject to government regulation, in that 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 doing so would reduce the amount of its capital below that necessary to meet minimum applicable regulatory capital requirements. State laws also limit a bank’s ability to pay dividends. Accordingly, the dividend restrictions imposed on the subsidiaries by statute or regulation effectively may limit the amount of dividends Glacier can pay.

     Dividends may be paid on Citizens Bank Holding Company common stock as and when declared by the Citizens Bank Holding Company board of directors out of funds legally available for the payment of dividends. The ability of Citizens Bank Holding Company to pay dividends is essentially subject to the same factors applicable to Glacier, as discussed above.

Voting Rights

     All voting rights are currently vested in the holders of Glacier common stock and Citizens Bank Holding Company common stock, with each share being entitled to one vote.

     The Articles of Incorporation of Glacier provide that shareholders do not have cumulative voting rights in the election of directors. Citizens Bank Holding Company shareholders do not have cumulative voting rights for the election of directors.

Preemptive Rights

     Glacier’s and Citizens Bank Holding Company shareholders do not have preemptive rights to subscribe to any additional securities that may be issued.

Liquidation Rights

     If Glacier is liquidated, the holders of Glacier common stock are entitled to share, on a pro rata basis, Glacier’s remaining assets after provision for liabilities. The Glacier board of directors is authorized to determine the liquidation rights of any preferred stock that may be issued.

     If Citizens Bank Holding Company is liquidated, the holders of Citizens Bank Holding Company common stock are entitled to share, on a pro rata basis, Citizens Bank Holding Company’s remaining assets after provision for liabilities.

     All outstanding shares of both Glacier and Citizens Bank Holding Company common stock are, and the shares to be issued in the merger will be, fully paid and nonassessable.

59

Amendment of Articles of Incorporation and Bylaws

     The Montana Business Corporation Act (“MBCA”) authorizes a corporation’s board of directors to make various changes of an administrative nature to its articles of incorporation, including increasing the number of outstanding shares in proportion to a stock split or stock divided in the corporation’s own shares. Other amendments to a corporation’s articles of incorporation must be recommended to the shareholders by the board of directors, unless the board determines that because of a conflict of interest or other special circumstances it should make no recommendation, and must be approved by a majority of all votes entitled to be cast by each voting group that has a right to vote on the amendment. The Glacier board of directors may, by a majority vote, amend Glacier’s bylaws.

     The Idaho Business Corporation Act (“IBCA”) is similar to the MBCA with respect to provisions regarding the amendment of a corporation’s articles of incorporation and bylaws.

Approval of Certain Transactions

     The MBCA does not contain any “anti-takeover” provisions imposing specific requirements or restrictions on transactions between a corporation and significant shareholders. Glacier’s articles of incorporation contain a provision requiring that specified transactions with an “interested shareholder” be approved by 80% of the voting power of the then outstanding shares unless it is (i) approved by Glacier’s board of directors, or (ii) certain price and procedural requirements are satisfied. An “interested shareholder” is broadly defined to include the right, directly or indirectly, to acquire or to control the voting or disposition of 10% or more of Glacier’s voting stock.

     Citizens Bank Holding Company’s articles of incorporation do not contain any anti-takeover provisions. However, Idaho corporate law does set forth additional requirements for board approval of certain transactions with substantial shareholders for a period of five years following their acquisition of 10% or more of the corporation’s outstanding shares. These requirements of Idaho law could make it more difficult for a substantial shareholder to gain control of the corporation.

Under Idaho corporate law, a merger in which the corporation will not be the surviving corporation, share exchange, or sale of substantially all of a corporation’s assets must be approved by a majority of the corporation’s shares entitled to vote.

Board of Directors - Number of Directors and Staggered Board

     Glacier’s articles of incorporation provide that the number of directors may not be less than seven (7) or more than seventeen (17). The articles further provide that the board must generally be staggered if there are nine (9) or more members. Glacier’s board currently consists of nine (9) members, each of whom has a staggered three-year term.

     Citizen Bank Holding Company’s bylaws provide that the number of directors may not be less than five (5) or more than fifteen (15). Citizen Bank Holding Company’s articles of incorporation provide that the board must generally be staggered if there are nine (9) or more members. The board of directors for Citizens Bank Holding Company currently consists of five (5) members, each of whom is currently serving an annual term.

Indemnification and Limitation of Liability

     Under the MBCA, indemnification of directors and officers is authorized to cover judgments, amounts paid in settlement, and expenses arising out of actions where the director or officer acted in good faith and in or not opposed to the best interests of the corporation, and in criminal cases, where the director or officer had no reasonable cause to believe that his or her conduct was unlawful. Unless limited by the corporation’s articles of incorporation, Montana law requires indemnification if the director or officer is wholly successful on the merits

60

of the action. Glacier’s bylaws provide that Glacier shall indemnify its directors and officers to the fullest extent not prohibited by law, including indemnification for payments in settlement of actions brought against a director or officer in the name if the corporation, commonly referred to as a derivative action. Under the MBCA, any indemnification of a director in a derivative action must be reported to shareholders in writing prior to the next annual meeting of shareholders.

     The provisions of the IBCA regarding indemnification and director liability are similar to those of the MBCA. The articles of Citizens Bank Holding Company provide that directors of the corporation will not be held liable to the corporation except in cases involving participation in a transaction from which the director receives a benefit to which the director is not legally entitled, breaches of the duty of loyalty to the corporation or its shareholders, act or omissions not in good faith, involving intentional misconduct or knowing violations of the law, or payments of unlawful dividend, stock purchases or redemptions. The articles of Citizens Bank Holding Company provide for indemnification to the fullest extent allowed by the IBCA, for certain expenses and costs in suits to which such person is made or threatened to be made a party because such person was a director of the corporation.

Restriction of Transfer of Shares

     Glacier’s articles and bylaws do not provide any specific limitations on its ability to transfer shares, nor require the company’s shares to bear a restrictive legend.

     Citizens Bank Holding Company’s articles and bylaws provide that its shareholders are limited to fewer than 500 at all times. To enforce this limitation, consent by Citizens Bank Holding Company is required for any proposed stock transfer, or to approve any transferee, if the result of the stock transfer is to increase the number of shareholders to 500 or more. Citizens Bank Holding Company will not recognize or register on its stock ledger any stock transfer that would violate this restriction. In addition, all stock certificates are required to bear a restrictive legend.

Potential “Anti-Takeover” Provisions

     Glacier’s articles of incorporation include certain provisions that could make more difficult the acquisition of Glacier by means of a tender offer, a proxy contest, merger or otherwise. These provisions include: (i) the “staggered board,” whereby only one-third of the members of the board of directors are elected in any particular year; and (ii) a requirement that any “Business Combination” (as defined in the articles of incorporation) be approved by the affirmative vote of not less than 80% of the voting power of the then outstanding shares unless it is either approved by the board of directors or certain price and procedural requirements are satisfied.

     In addition, the authorization of preferred stock, which is intended primarily as a financing tool and not as a defensive measure against takeovers, may potentially be used by management to make more difficult uninvited attempts to acquire control of Glacier (for example, by diluting the ownership interest of a substantial shareholder, increasing the amount of consideration necessary for shareholder to obtain control, or selling authorized but unissued shares to friendly third parties).

     The staggered board structure of the board of directors, the “supermajority” approval requirement for certain business transactions, and the availability of Glacier’s preferred stock for issuance without shareholder approval, may have the effect of lengthening the time required for a person to acquire control of Glacier through a tender offer, proxy contest or otherwise, and may deter any potentially unfriendly offers or other efforts to obtain control of Glacier. This could deprive Glacier’s shareholders of opportunities to realize a premium for their Glacier common stock, even in circumstances where such action was favored by a majority of Glacier’s shareholders.

61

CERTAIN LEGAL MATTERS

     The validity of the Glacier common stock to be issued in the merger will be passed upon for Glacier by its special counsel, Christensen, Moore, Cockrell, Cummings & Axelberg, P.C., Kalispell, Montana.

EXPERTS

     The consolidated financial statements of Glacier Bancorp, Inc. as of December 31, 2003 and 2002, and for each of the years in the three-year period ended December 31, 2003, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION ABOUT GLACIER

     Glacier files annual, quarterly and current reports, proxy statements, and other information with the SEC. You may read and copy any reports, statements, or other information that Glacier files at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Glacier’s SEC filings are also available to the public on the SEC Internet site (http://www.sec.gov). As described below, you may also obtain the documents that Glacier is incorporating by reference into this proxy statement/prospectus from Glacier.

     Glacier has filed a Registration Statement on Form S-4 to register with the SEC the shares of Glacier common stock to be issued to Citizens Bank Holding Company shareholders in the merger. This proxy statement/prospectus is part of that Registration Statement and constitutes a prospectus of Glacier in addition to being a proxy statement of Citizens Bank Holding Company for the Citizens Bank Holding Company special shareholders meeting. As allowed by SEC rules, this proxy statement/prospectus does not contain all of the information that you can find in the Registration Statement or the exhibits to the Registration Statement.

     The SEC allows Glacier to “incorporate by reference” information into this proxy statement/prospectus, which means that Glacier can disclose important information to you by referring you to another document filed separately by Glacier with the SEC. The information incorporated by reference is deemed to be part of this proxy statement/prospectus, except for any information superseded by any information in this proxy statement/prospectus. This proxy statement/prospectus incorporates by reference the documents set forth below that Glacier has previously filed with the SEC (other than current reports furnished under Item 9 or Item 12 of Form 8-K). These documents contain important information about Glacier and its finances:

     Glacier is also incorporating by reference additional documents that Glacier files with the SEC between the date of this proxy statement/prospectus and the date of the special meeting of Citizens Bank Holding Company shareholders (other than current reports furnished under Item 9 or Item 12 of Form 8-K).

62

     You can obtain the documents that are incorporated by reference through Glacier or the SEC. You can obtain the documents from the SEC, as described above. These documents are also available from Glacier without charge, excluding exhibits unless Glacier has specifically incorporated such exhibits by reference in this proxy statement/prospectus. You may obtain documents incorporated by reference in this proxy statement/prospectus by requesting them from Glacier at 49 Commons Loop, Kalispell, Montana 59901, telephone number (406) 751-4703, ATTN: James H. Strosahl, Corporate Secretary. If you would like to request documents from Glacier, please do so by March 10, 2005 to receive them before the Citizens Bank Holding Company special shareholders meeting. Certain reports can also be found on Glacier’s website at www.glacierbancorp.com.

     Glacier has supplied all of the information concerning it contained in this proxy statement/prospectus, and Citizens Bank Holding Company has supplied all of the information concerning it.

     You should rely only on the information contained or incorporated by reference in this proxy statement/prospectus in deciding how to vote on the merger. We have not authorized anyone to provide you with information other than what is contained in this proxy statement/prospectus. This proxy statement/prospectus is dated February 16, 2005. You should not assume that information contained in this proxy statement/prospectus is accurate as of any other date, and neither the mailing of this proxy statement/prospectus to Citizens Bank Holding Company shareholders nor the issuance of Glacier common stock in the merger will create any implication to the contrary.

63

Appendix A

CONFIDENTIAL

PLAN AND AGREEMENT OF MERGER

AMONG

GLACIER BANCORP, INC.,

CITIZENS BANK HOLDING COMPANY AND CITIZENS COMMUNITY BANK

DATED AS OF DECEMBER 15, 2004

PLAN AND AGREEMENT OF MERGER
AMONG
GLACIER BANCORP, INC.,
CITIZENS BANK HOLDING COMPANY AND CITIZENS COMMUNITY BANK

     This Plan and Agreement of Merger (the “Agreement”), dated as of December 15, 2004, is made by and among GLACIER BANCORP, INC. (“Glacier”), CITIZENS BANK HOLDING COMPANY (the “Company”) and CITIZENS COMMUNITY BANK (the “Bank”).

PREAMBLE

     The management and boards of directors of Glacier, the Company and the Bank, respectively, believe that the proposed Merger, to be accomplished in the manner set forth in this Agreement, is in the best interests of the respective corporations and their shareholders.

RECITALS

1

AGREEMENT

     In consideration of the mutual agreements set forth in this Agreement, Glacier, the Company and the Bank agree as follows:

DEFINITIONS

     The following capitalized terms used in this Agreement will have the following meanings:

     “Acquisition Event” means any of the following: (i) a merger, consolidation or similar transaction involving the Company or any successor, (ii) a purchase, lease or other acquisition in one or a series of related transactions of assets of the Company or any of its Subsidiaries representing 25 percent or more of the consolidated assets of the Company and its Subsidiaries, or (iii) a purchase or other acquisition (including by way of merger, consolidation, share exchange or any similar transaction) in one or a series of related transactions of beneficial ownership of securities representing 50 percent or more of the voting power of the Company or its Subsidiaries, in each case with or by a person or entity other than Glacier or one of its Subsidiaries.

     “Acquisition Proposal” has the meaning assigned to such term in Section 4.1.11 of this Agreement.

     “Aggregate Option Exercise Amount” means the sum of cash received by the Company upon the exercise of Company Options between the Execution Date and the Effective Date.

     “Agreement” means this Plan and Agreement of Merger.

     “ALLL” means allowance for possible loan and lease losses.

     “Asset Classification” has the meaning assigned to such term in Section 3.1.16 of this Agreement.

     “Bank” is Citizens Community Bank, an Idaho state chartered bank, that has its principal office in Pocatello, Idaho, and that is wholly owned by the Company.

2

     “Bank Financial Statements” means the Bank’s audited statement of financial condition as of December 31, 2001, and the related statement of income, cash flows and shareholders’ equity for the year ended December 31, 2001.

     “Banking Act” means the Idaho Bank Act, Title 26 of the Idaho Code.

     “BHC Act” has the meaning assigned to such term in Recital A of this Agreement.

     “Break-Up Fee” has the meaning specified in Section 7.7 of this Agreement.

     “Business Day” means any day other than a Saturday, Sunday, legal holiday or a day on which banking institutions located in the State of Idaho are required by law to remain closed.

     “Cash Election Shares” has the meaning specified in Section 1.3.2 of this Agreement.

     “Certificate” has the meaning assigned to such term in Section 1.7.1 of this Agreement.

     “Closing” means the closing of the Merger contemplated by this Agreement, which will occur on the Effective Date, as more fully specified in Section 2.1 of this Agreement.

     “Combination Election Shares” has the meaning specified in Section 1.3.2 of this Agreement.

     “Company” is Citizens Bank Holding Company, an Idaho corporation that has its principal place of business in Pocatello, Idaho, and that is a bank holding company registered pursuant to the BHC Act.

     “Company Common Stock” means the shares of Company common stock, $5 par value per share, issued and outstanding from time to time.

     “Company Contract” has the meaning assigned to such term in Section 3.1.2 of this Agreement.

     “Company Financial Statements” means (i) the Bank Financial Statements; (ii) the Company’s audited statements of financial condition as of December 31, 2002 and 2003, and the related statements of income, cash flows and shareholders’ equity for each of the years ended December 31, 2002 and 2003; (iii) the Company financial statements to be prepared in accordance with Section 4.1.8, if necessary; and (iv) the Subsequent Company Financial Statements.

     “Company Meeting” has the meaning assigned in Section 4.2.2 of this Agreement.

     “Company Nonqualified Options” means the stock options issued and outstanding on the date of this Agreement pursuant to the Company Option Plan and as set forth on Schedule 1 under the heading “Nonqualified Stock Options.”

     “Company Option Plan” means the Citizens Community Bank Stock Option Plan, effective March 10, 1999, for the benefit of directors and employees of the Company and the Bank.

     “Company Options” means, collectively, the Company Nonqualified Options and the Company Qualified Options.

     “Company Preferred Stock” means the shares of Company preferred stock, $5 par value per share, issued and outstanding from time to time.

3

     “Company Qualified Options” means the stock options issued and outstanding on the date of this Agreement pursuant to the Company Option Plan and as set forth on Schedule 1 under the heading “Qualified Stock Options.”

     “Company Transaction Fees” has the meaning assigned to such term in Section 5.2.3 of this Agreement.

     “Compensation Plans” has the meaning assigned to such term in Section 3.1.20 of this Agreement.

     “Daily Sales Price” for any Trading Day means the daily closing price per share of Glacier Common Stock on the NASDAQ National Market reporting system, as reported on the website www.nasdaq.com.

     “Designated Cash Election Share” has the meaning assigned to such term in Section 1.3.2 of this Agreement.

     “Determination Date” means the fifth (5^th) business day immediately prior to the Effective Date.

     “Determination Period” means the ten (10) Trading Days prior to the Determination Date.

     “Director” means the Director of the Department of Finance for the State of Idaho.

     “Effective Date” means the date on which all conditions to Closing have occurred and on which the Merger takes place, as more fully specified in Section 2.1 of this Agreement.

     “Election Deadline” has the meaning specified in Section 1.3.2 of this Agreement.

     “Election Form” has the meaning specified in Section 1.3.1 of this Agreement.

     “Employees” has the meaning assigned to such term in Section 3.1.20 of this Agreement.

     “Environmental Laws” has the meaning assigned to such term in Section 3.1.7 of this Agreement.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “ERISA Affiliate” means, with respect to the Company, any other entity that is considered one employer with the Company under Section 4001 of ERISA or Section 414 of the IRC.

     “Exchange Act” has the meaning assigned to such term in Section 3.1.5 of this Agreement.

     “Exchange Agent” means American Stock Transfer and Trust.

     “Exchange Fund” has the meaning assigned to such term in Section 1.6 of this Agreement.

     “Execution Date” means the date of this Agreement.

     “Executive Officers,” with respect to Glacier, means Michael J. Blodnick and James H. Strosahl.

     “Executive Officers,” with respect to the Company and/or the Bank, means Ralph G. Cottle and Terrill R. Schwartz.

4

     “FDIC” means the Federal Deposit Insurance Corporation.

     “Federal Reserve” means the Board of Governors of the Federal Reserve System.

     “Former Company Qualified Option Share” has the meaning assigned to such term in Section 1.2.3 of this Agreement.

     “GAAP” means generally accepted accounting principles.

     “Glacier” is Glacier Bancorp, Inc., a Montana corporation that has its principal place of business in Kalispell, Montana, and that is a bank holding company registered pursuant to the BHC Act.

     “Glacier Average Closing Price” means the average Daily Sales Price of Glacier Common Stock for the Determination Period.

     “Glacier Common Stock” means the shares of Glacier common stock, par value $0.01 per share, issued and outstanding from time to time.

     “Glacier Contract” has the meaning assigned to such term in Section 3.2.2 of this Agreement.

     “Glacier Financial Statements” means Glacier’s (i) audited consolidated balance sheets as of December 31, 2003, 2002 and 2001 and the related audited consolidated statements of income, cashflows and changes in stockholders’ equity for each of the years ended December 31, 2003, 2002 and 2001; (ii) unaudited consolidated balance sheet as of the end of each fiscal quarter following December 31, 2003 but preceding the Execution Date, and the related unaudited consolidated statements of income, cashflows and changes in stockholders’ equity for each such quarter; and (iii) unaudited consolidated balance sheets and related consolidated statements of income and stockholders’ equity for each of the fiscal quarters ending after the Execution Date and before Closing or the Termination Date, as the case may be.

     “Glacier Preferred Stock” means the shares of Glacier preferred stock, par value $0.01 per share, issued and outstanding from time to time.

     “Glacier Shares” means the shares of Glacier Common Stock to be issued to the holders of Company Common Stock in accordance with Sections 1.2 and 1.3 of this Agreement.

     “Hazardous Substances” has the meaning assigned to such term in Section 3.1.7 of this Agreement.

     “High Stock Value Adjustment Trigger” has the meaning assigned to such term in Section 7.2 of this Agreement.

     “Hovde” has the meaning assigned to such term in Recital G of this Agreement.

     “IBCA” means the Idaho Business Corporations Act, as amended.

     “Indenture” means the Indenture dated as of June 17, 2004, between the Company as Issuer and Wilmington Trust Company as Trustee.

     “IRC” means the Internal Revenue Code of 1986, as amended.

     “Leased Real Property” means the real Properties subject to Leases as identified in Schedule 6 to this Agreement.

5

     “Leases” means the terms and conditions governing the leasehold interests in the Leased Real Property as identified in Schedule 6 to this Agreement.

     “Liens” means, collectively, liens, pledges, security interests, claims, proxies, preemptive or subscriptive rights or other encumbrances or restrictions of any kind.

     “Low Stock Value Adjustment Trigger” has the meaning assigned to such term in Section 7.3 of this Agreement.

     “Material Adverse Effect” with respect to a Person means an effect that: (1) is materially adverse to the business, financial condition, results of operations or prospects of the Person and its Subsidiaries taken as a whole; (2) significantly and adversely affects the ability of the Person to consummate the Merger on or by May 15, 2005 or to perform its material obligations under this Agreement; or (3) enables any persons to prevent the consummation of the Merger on or by May 15, 2005. Notwithstanding the foregoing, any increase in the Bank’s ALLL (i) on a monthly basis consistent with past practice, and (ii) up to an additional $500,000 as determined by either the Bank or Glacier within two weeks of the Effective Date, will not be considered a Material Adverse Effect with respect to either the Company or the Bank for purposes of this Agreement; provided, however, that nothing within this sentence prevents a determination that there has been a Material Adverse Effect with respect to a deterioration in the quality of the Bank’s loan portfolio.

     “Maximum Total Cash Consideration” means $8.6 million.

     “Maximum Total Stock Consideration” means the number of Glacier Shares, rounded to the nearest thousandth, obtained by dividing (i) the sum of $8.6 million and the Aggregate Option Exercise Amount by (ii) the Glacier Average Closing Price, subject to adjustment as provided in Sections 7.2.2 and 7.3.2 of this Agreement.

     “MBCA” means the Montana Business Corporations Act, as amended.

     “Merger Consideration” has the meaning assigned in Section 1.2 of this Agreement.

     “Merger” means the merger of the Company with and into Glacier, in accordance with the terms and conditions set forth in this Agreement and in the Schedules and Exhibits to this Agreement.

     “No Election Shares” has the meaning specified in Section 1.3.2 of this Agreement.

     “Option Exercise Price” means $10.85.

     “PCAOB” means the Public Company Accounting Oversight Board.

     “Pension Plan” has the meaning assigned to such term in Section 3.1.20 of this Agreement.

     “Per Nonqualified Option Cash Consideration” means $26.62 (the difference between the Per Share Cash Consideration and the Option Exercise Price).

     “Per Share Cash Consideration” means $37.47.

     “Per Share Stock Consideration” means the number of Glacier Shares equal to the quotient, rounded to the nearest thousandth, obtained by dividing the Per Share Cash Consideration by the Glacier Average Closing Price.

6

     “Person” includes an individual, corporation, partnership, association, limited liability company, trust or unincorporated organization.

     “Plan” has the meaning assigned to such term in Section 3.1.20 of this Agreement.

     “Properties” with respect to any party to this Agreement means properties or other assets owned or leased by such party or any of its Subsidiaries.

     “Proposed Dissenting Shares” means those shares of Company Common Stock as to which shareholders have given notice of their intent to assert appraisal rights pursuant to Section 30-1-1321 of the IBCA.

     “Prospectus/Proxy Statement” means the Prospectus/Proxy Statement referred to in Section 4.2.1 of this Agreement, to be provided to each shareholder of the Company in connection with their consideration and approval of the Merger.

     “Record Date” has the meaning specified in Section 1.3.1 of this Agreement.

     “Registration Statement” has the meaning assigned in Section 4.2.1 of this Agreement.

     “Remaining Company Nonqualified Option Share” has the meaning assigned in Section 1.2.4 of this Agreement.

     “Reports” has the meaning assigned to such term in Section 3.1.5 of this Agreement.

     “SEC” means the United States Securities and Exchange Commission.

     “Securities Act” has the meaning assigned to such term in Section 3.1.5 of this Agreement.

     “Securities Laws” has the meaning assigned to such term in Section 3.1.5 of this Agreement.

     “Stock Election Shares” has the meaning specified in Section 1.3.2 of this Agreement.

     “Subject Property” has the meaning assigned to such term in Section 3.1.7 of this Agreement.

     “Subsequent Company Financial Statements” has the meaning assigned to such term in Section 4.1.9 of this Agreement.

     “Subsequent Glacier Financial Statements” means Glacier Financial Statements for each fiscal quarter and fiscal year, as the case may be, ending after the Execution Date and prior to Closing.

     “Subsidiary” with respect to any party to this Agreement means any Person in which such party owns the majority of outstanding capital stock or voting power.

     “Superior Proposal” means a bona fide proposal or offer made by a person to acquire the Company pursuant to a tender or exchange offer for all of the outstanding Company Common Stock, a merger, consolidation or other business combination, or an acquisition of all or substantially all of the assets of the Company and its Subsidiaries, on terms which the board of directors of the Company has determined in good faith, after taking into account the advice of counsel, to be more favorable to the Company and its shareholders than the Merger.

7

     “Takeover Proposal” means a bona fide proposal or offer by a person to make a tender or exchange offer to acquire 50% or more of the outstanding Company Common Stock, or to engage in a merger, consolidation or other business combination involving the Company or to acquire in any manner a substantial equity interest in, or all or substantially all of the assets of, the Company.

     “Termination Date” has the meaning assigned to such term in Section 7.1 of this Agreement.

     “Termination Fee” has the meaning assigned to such term in Section 7.5 of this Agreement.

     “Trading Day” means a day on which Glacier Common Stock is traded on the NASDAQ National Market reporting system.

SECTION 1.
TERMS OF MERGER

8

9

10

11

SECTION 2.
CLOSING OF TRANSACTION

12

SECTION 3.
REPRESENTATIONS AND WARRANTIES

13

14

15