Glacier Bank Q4 2025 Glacier Bancorp Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Glacier Bancorp Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Glacier Bancorp Q4 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randall Chesler, President and CEO of Glacier Bancorp. Please go ahead.
Operator: Good day, and thank you for standing by. Welcome to the Glacier Bancorp Q4 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randall Chesler, President and CEO of Glacier Bancorp. Please go ahead.
Randall M. Chesler: Good morning, and thank you for joining us today. With me here in Kalispell is Ron Copher, our Chief Financial Officer, Tom Dolan, our Chief Credit Administrator, Angela Dose, our Chief Accounting Officer, and Byron Pollan, our Treasurer. I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined on page 14 of our press release, and we encourage you to review this section. 2025 was a transformative year for Glacier Bancorp. We successfully closed 2 strategic acquisitions: Bank of Idaho in April and Guaranty Bank & Trust in October, growing our footprint in fast-growing Idaho and expanding our southwest region to include the great state of Texas. These markets offer strong growth potential and fit seamlessly with our long-term growth strategy. We converted the Bank of Idaho Business Operating Platform in September and plan to convert Guaranty Bank & Trust in February.
Randall M. Chesler: Good morning, and thank you for joining us today. With me here in Kalispell is Ron Copher, our Chief Financial Officer, Tom Dolan, our Chief Credit Administrator, Angela Dose, our Chief Accounting Officer, and Byron Pollan, our Treasurer. I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined on page 14 of our press release, and we encourage you to review this section. 2025 was a transformative year for Glacier Bancorp. We successfully closed 2 strategic acquisitions: Bank of Idaho in April and Guaranty Bank & Trust in October, growing our footprint in fast-growing Idaho and expanding our southwest region to include the great state of Texas. These markets offer strong growth potential and fit seamlessly with our long-term growth strategy. We converted the Bank of Idaho Business Operating Platform in September and plan to convert Guaranty Bank & Trust in February.
I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined on page 14 of our press release, and we encourage you to review this section.
2025 was a transformative year for Glacier Bancorp, Inc. We successfully closed two strategic acquisitions: Bank of Idaho in April, and Guarantee Bank and Trust in October, growing our footprint in fast-growing Idaho and expanding our Southwest region to include the great state of Texas.
These markets offer strong growth potential and fit seamlessly with our long-term growth strategy.
We converted the Bank of Idaho business operating platform in September.
Randall M. Chesler: This was the largest acquisition year in our history, with over $4.7 billion acquired, topping our previous record of $4.1 billion in 2021. We delivered strong financial results in 2025, with significant growth in all key metrics. We also delivered an excellent quarter, continuing our momentum with strong margin expansion, higher loan yields, lower cost of funding, and solid, high-quality loan growth. The company's total assets exceeded $30 billion in the quarter, ending the year at $32 billion in total assets, which was another record for the company. Net income was $63.8 million for the quarter, including the $36 million of expenses related to our two 2025 acquisitions. Net income for 2025 was $239 million, an increase of $48.9 million, or 26% from the prior year net income, and was driven by the two acquisitions and our disciplined approach to increasing our net interest margin during the year.
This was the largest acquisition year in our history, with over $4.7 billion acquired, topping our previous record of $4.1 billion in 2021. We delivered strong financial results in 2025, with significant growth in all key metrics. We also delivered an excellent quarter, continuing our momentum with strong margin expansion, higher loan yields, lower cost of funding, and solid, high-quality loan growth. The company's total assets exceeded $30 billion in the quarter, ending the year at $32 billion in total assets, which was another record for the company. Net income was $63.8 million for the quarter, including the $36 million of expenses related to our two 2025 acquisitions. Net income for 2025 was $239 million, an increase of $48.9 million, or 26% from the prior year net income, and was driven by the two acquisitions and our disciplined approach to increasing our net interest margin during the year.
Plan to convert Guarantee Bank and Trust in February.
This was the largest acquisition year in our history, with over $4.7 billion acquired, topping our previous record of $4.1 billion in 2021.
We delivered strong financial results in 2025, with significant growth in all key metrics. We also delivered an excellent quarter, continuing our momentum with strong margin expansion, higher loan yields, lower cost of funding, and solid, high-quality loan growth.
In total assets, which was another record for the company.
Net income was $63.8 million for the quarter, including the $36 million of expenses related to our Q2 2025 acquisitions.
Net income for 2025 was $239 million, an increase of $48.9 million, or 26%, from the prior year. Net income was driven by the two acquisitions and our disciplined approach to increasing our net interest margin during the year.
Randall M. Chesler: Pre-tax, Pre-provision Net Revenues of $362 million for 2025 increased $107 million, or 42% over the prior year. Diluted Earnings Per Share for the quarter was $0.49 per share. Diluted Earnings Per Share for 2025 was $1.99 per share, an increase of $0.31 per share, or 18% from the prior year. Net Interest Income of $266 million for the quarter increased $41 million, or 18% from the prior quarter. Net Interest Income of $889 million for 2025 increased $184 million, or 26% from the prior year. The loan portfolio of $21 billion at the end of 2025 increased $2 billion, or 11% from the prior quarter. For 2025, the loan portfolio increased $3.7 billion, or 21%. Total deposits of $24.6 billion increased $2.7 billion, or 12% from the prior quarter. Total deposits increased $4 billion, or 20%, during 2025.
Pre-tax, Pre-provision Net Revenues of $362 million for 2025 increased $107 million, or 42% over the prior year. Diluted Earnings Per Share for the quarter was $0.49 per share. Diluted Earnings Per Share for 2025 was $1.99 per share, an increase of $0.31 per share, or 18% from the prior year. Net Interest Income of $266 million for the quarter increased $41 million, or 18% from the prior quarter. Net Interest Income of $889 million for 2025 increased $184 million, or 26% from the prior year. The loan portfolio of $21 billion at the end of 2025 increased $2 billion, or 11% from the prior quarter. For 2025, the loan portfolio increased $3.7 billion, or 21%. Total deposits of $24.6 billion increased $2.7 billion, or 12% from the prior quarter. Total deposits increased $4 billion, or 20%, during 2025.
Pre-tax, pre-provision net revenues of $362 million for 2025 increased $107 million, or 42%, over the prior year.
Diluted earnings per share for the quarter was $0.49 per share.
Diluted earnings per share for 2025 was $1.99 per share, an increase of $0.31 per share, or 18%, from the prior year.
Net interest income of $266 million for the quarter increased $41 million, or 18%, from the prior quarter.
Net interest income of $889 million for 2025 increased $184 million, or 26%, from the prior year.
The loan portfolio was $21 billion. At the end of 2025, it increased $2 billion, or 11%, from the prior quarter. For 2025, the loan portfolio increased $3.7 billion, or 21%.
Total deposits of $24.6 billion, increased $2.7 billion or 12% from the prior quarter. In total, the deposits increased $4 billion, or 20%, during 2025.
Randall M. Chesler: The net interest margin as a percentage of earning assets on a tax-equivalent basis for the quarter was 3.58%, an increase of 19 basis points from the prior quarter and an increase of 61 basis points from the prior year Q4. The loan yield of 6.09% in the quarter increased 12 basis points from the prior quarter and increased 37 basis points from the prior year Q4. The total earning asset yield of 5% in the quarter increased 14 basis points from the prior quarter and increased 43 basis points from the prior year Q4. The total cost of funding, including non-interest-bearing deposits, of 1.52% in the quarter decreased 6 basis points from the prior quarter and decreased 19 basis points from the prior year Q4.
The net interest margin as a percentage of earning assets on a tax-equivalent basis for the quarter was 3.58%, an increase of 19 basis points from the prior quarter and an increase of 61 basis points from the prior year Q4. The loan yield of 6.09% in the quarter increased 12 basis points from the prior quarter and increased 37 basis points from the prior year Q4. The total earning asset yield of 5% in the quarter increased 14 basis points from the prior quarter and increased 43 basis points from the prior year Q4. The total cost of funding, including non-interest-bearing deposits, of 1.52% in the quarter decreased 6 basis points from the prior quarter and decreased 19 basis points from the prior year Q4.
The net interest margin as a percentage of earning assets on a tax-equivalent basis for the quarter was 3.58%, an increase of 19 basis points from the prior quarter and an increase of 61 basis points from the prior year, fourth quarter.
The loan yield of 6.09% in the quarter increased 12 basis points from the prior quarter and increased 37 basis points from the prior year, fourth quarter.
The total earning asset yield of 5% in the quarter increased 14 basis points from the prior quarter and increased 43 basis points from the prior year, fourth quarter.
The total cost of funding, including non-interest-bearing deposits, was 1.52% in the quarter, decreased 6 basis points from the prior quarter and decreased 19 basis points from the prior year fourth quarter.
Randall M. Chesler: Total non-interest expense of $195 million for the quarter increased 26.8 million, or 16%, over the prior quarter, primarily due to the increased cost from our two acquisitions. Included in non-interest expense for the quarter was $24 million from the Guaranty Bank & Trust acquisition and $3 million of expenses related to vacating branch locations. Non-interest income for the quarter totaled $40 million, which was an increase of $5 million, or 14%, over the prior quarter and was up 28% over the prior year Q4. Service charges and fees increased 14% from the prior quarter and increased 20% over the prior year Q4. In 2025, our efficiency ratio dropped from 66.7% at the beginning of the year to 63%, showing good momentum for continued steady reduction. Credit quality remains at historically low levels.
Total non-interest expense of $195 million for the quarter increased 26.8 million, or 16%, over the prior quarter, primarily due to the increased cost from our two acquisitions. Included in non-interest expense for the quarter was $24 million from the Guaranty Bank & Trust acquisition and $3 million of expenses related to vacating branch locations. Non-interest income for the quarter totaled $40 million, which was an increase of $5 million, or 14%, over the prior quarter and was up 28% over the prior year Q4. Service charges and fees increased 14% from the prior quarter and increased 20% over the prior year Q4. In 2025, our efficiency ratio dropped from 66.7% at the beginning of the year to 63%, showing good momentum for continued steady reduction. Credit quality remains at historically low levels.
Total non-interest expense of $195 million for the quarter increased $26.8 million, or 16%, over the prior quarter, primarily due to the increased costs from our two acquisitions.
Included in non-interest expense for the quarter was $24 million from the Guarantee Bank and Trust acquisition.
And $3 million of expenses related to vacating branch locations.
Non-interest income for the quarter totaled $40 million, which was an increase of $5 million, or 14%, over the prior quarter and was up 28% over the prior year fourth quarter.
Service charges and fees increased 14% from the prior quarter and increased 20% over the prior year, fourth quarter.
In 2025, our efficiency ratio dropped from 66.7% at the beginning of the year to 63%, showing good momentum for continued, steady reduction.
Randall M. Chesler: Our non-performing assets remained low at 22 basis points of total assets, with a slight increase from the prior quarter, driven primarily by the acquisition of Guaranty Bank & Trust. Net charge-offs were 6 basis points of total loans for the year, compared to 8 basis points in the prior year. Our allowance for credit remains at 1.22% of total loans, reflecting our conservative approach to risk management. We continue to improve our strong capital position, with tangible stockholders' equity increasing $609 million, or 29%, in 2025. Tangible book value per share increased to $21, up 12% year-over-year. In November, we declared our 163rd consecutive quarterly dividend of $0.33 per share, underscoring our commitment to delivering consistent shareholder returns. We are very pleased with the performance in the Q4 and for the full year 2025.
Our non-performing assets remained low at 22 basis points of total assets, with a slight increase from the prior quarter, driven primarily by the acquisition of Guaranty Bank & Trust. Net charge-offs were 6 basis points of total loans for the year, compared to 8 basis points in the prior year. Our allowance for credit remains at 1.22% of total loans, reflecting our conservative approach to risk management. We continue to improve our strong capital position, with tangible stockholders' equity increasing $609 million, or 29%, in 2025. Tangible book value per share increased to $21, up 12% year-over-year. In November, we declared our 163rd consecutive quarterly dividend of $0.33 per share, underscoring our commitment to delivering consistent shareholder returns. We are very pleased with the performance in the Q4 and for the full year 2025.
Credit quality remains at historically low levels, as non-performing assets remained low at 22 basis points of total assets, with a slight increase from the prior quarter driven primarily by the acquisition of Guaranty Bank and Trust.
In the prior year.
Our allowance for credit remains at 1.22% of total loans, reflecting our conservative approach to risk management.
We continue to improve our strong capital position with tangible stockholders' equity, increasing $609 million, or 29%, in 2025.
Tangible book value per share increased to $21, up 12% year-over-year, and in November, we declared our 163rd consecutive quarterly dividend of $0.33 per share, underscoring our commitment to delivering consistent shareholder returns.
Randall M. Chesler: Our exceptional team, expanding footprint, unique business model, strong business performance, disciplined credit culture, and strong capital base provide a very solid foundation for future growth. So that ends my formal remarks, and I would now like the operator to open the line for any questions our analysts may have.
Our exceptional team, expanding footprint, unique business model, strong business performance, disciplined credit culture, and strong capital base provide a very solid foundation for future growth. So that ends my formal remarks, and I would now like the operator to open the line for any questions our analysts may have.
We are very pleased with the performance in the fourth quarter and for the full year 2025.
our exceptional team expanding footprint.
Unique business model, strong business, performance discipline, credit culture, and strong capital base provide a very solid foundation for future growth.
So that ends my formal remarks, and I would now like the operator to open the line for any questions our analysts may have.
Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from David Feaster of Raymond James. Your line is open.
Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from David Feaster of Raymond James. Your line is open.
Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. Please stand by while we compile the Q&A roster.
And our first question comes from David Furr of Raymond James. Your line is open.
[Analyst] (Raymond James): Hey, good morning, everybody.
David Feaster: Hey, good morning, everybody.
Tom Dolan: Morning, David.
Randall M. Chesler: Morning, David.
Hey, good morning everybody—morning, and David.
[Analyst] (Raymond James): I just wanted to, I want to start on the growth side. Obviously, it was a noisy quarter. We had the Guaranty deal. Organic growth, you guys laid it out. It was about 1% annualized, a little bit slower than maybe we expected. It looked like actually pretty solid in the quarter. So I just wanted to get a sense of what you saw on the loan side that maybe kept things a little bit slower this quarter, and then just how you think about growth going forward and when you'd expect Guaranty to maybe start contributing more meaningfully as all those bankers are trained on the new systems and fully ramped up.
David Feaster: I just wanted to, I want to start on the growth side. Obviously, it was a noisy quarter. We had the Guaranty deal. Organic growth, you guys laid it out. It was about 1% annualized, a little bit slower than maybe we expected. It looked like actually pretty solid in the quarter. So I just wanted to get a sense of what you saw on the loan side that maybe kept things a little bit slower this quarter, and then just how you think about growth going forward and when you'd expect Guaranty to maybe start contributing more meaningfully as all those bankers are trained on the new systems and fully ramped up.
Um, I just wanted to, I want to start on the on the growth side. Um obviously it was a noisy quarter, we had the guaranteed deal, you know, organic growth, you guys laid it out. It was it was about 1%, um, annualized a little bit slower than maybe we expected, you know.
It looks like it's actually pretty solid in the quarter. So I just wanted to get a of of what you saw on the loan side that maybe kept things a little bit slower this quarter and then just you know how you think about growth going forward and and when you'd expect guaranteed to maybe start contributing more meaningfully, as as you know, all those uh Bankers are are trained on the new systems and and fully ramped up.
Tom Dolan: Yeah. Yeah, there's a lot going on, and we actually feel good about the growth. But let me let Tom fill you in on some of the details there.
Randall M. Chesler: Yeah. Yeah, there's a lot going on, and we actually feel good about the growth. But let me let Tom fill you in on some of the details there.
Angela Dose: Yeah, David. Q4 and even Q1 are seasonally slower for us. In Q4, we exited the ag season, the construction season. So the tailwind provided by those draws earlier in the year, those seeds for the ag growers at the end of their season, we saw a lot of line paydowns as they went to harvest. And then not unusual for us to see lower line utilization in the latter part of the year as well. Looking into 2026, we're looking to low to mid-single digits for the full year. But one thing I wanted to mention, we are now at a record level of our pipeline early this year. And it's too early to tell whether the increase in the pipeline that we've seen is a surge or if it's sustainable.
Tom Dolan: Yeah, David. Q4 and even Q1 are seasonally slower for us. In Q4, we exited the ag season, the construction season. So the tailwind provided by those draws earlier in the year, those seeds for the ag growers at the end of their season, we saw a lot of line paydowns as they went to harvest. And then not unusual for us to see lower line utilization in the latter part of the year as well. Looking into 2026, we're looking to low to mid-single digits for the full year. But one thing I wanted to mention, we are now at a record level of our pipeline early this year. And it's too early to tell whether the increase in the pipeline that we've seen is a surge or if it's sustainable.
Yeah, yeah, there's a lot going on, and, uh, we actually feel good about the growth, but let me let, uh, Tom fill you in on some of the details there. Yeah, David. Um,
You know, fourth quarter, and even first quarter of seasonally slower for us, um, you know, in the fourth quarter, we exited the a season, the the construction season. So you know, the Tailwind provided by those drawers earlier in the year, those those seasons and, you know, for the egg, the egg Growers, um, and they end up their season, you know, we saw a lot of line pay Downs as they went to harvest. Um, and then, you know, um, not unusual for us to see lower wage utilization in the latter part of the year as well, you know, looking into 2026. Um,
You know, we're looking to lower to the mid-single digits for the full year. Um,
But, you know, one thing I want to mention—we are now at a record level of our pipeline, early this year.
Angela Dose: In addition to that, a growing piece of the production is related to construction, and that's been evident for the last couple of quarters. And as you know, those don't fund at origination. So it should give us some decent tailwinds heading into the stronger seasonal quarters, Q2, Q3. So we could be towards the higher end of that range for 2026. And then in terms of Guaranty, to answer your other question there, they've hit the ground running. I think they're going to add meaningful production for us. Quite frankly, they were starting immediately.
In addition to that, a growing piece of the production is related to construction, and that's been evident for the last couple of quarters. And as you know, those don't fund at origination. So it should give us some decent tailwinds heading into the stronger seasonal quarters, Q2, Q3. So we could be towards the higher end of that range for 2026. And then in terms of Guaranty, to answer your other question there, they've hit the ground running. I think they're going to add meaningful production for us. Quite frankly, they were starting immediately.
And, you know, it's too early to tell whether the increase in the pipeline that we've seen is a surge or if it's sustainable. In addition to that, you know, a growing piece of the production is related to construction, and that's been evident for the last couple of quarters. And as you know, those don't fund at origination, so it should give us some decent tailwind heading into the stronger seasonal quarters, you know, second, third quarter. So, you know, we could be towards the higher end of that range for 2026.
And in terms of guarantee to answer your other question there, um, you know, they they've hit the ground running. Um, I think they're going to add meaningful uh, production for us. Um, you know, quite frankly they were starting immediately.
[Analyst] (Raymond James): That's great. That's great. And then, Byron, I just wanted to maybe dig back into the margin trajectory going forward. I mean, thus far, it's kind of played out exactly how you've laid it out. I know you've laid out that kind of that 4% threshold by the end of this year. I just wanted to make sure that that was still on track. And maybe if you could walk us through the NIM walk and what gives you confidence in your ability to achieve that, and how dependent is that 4% level on Fed cuts?
David Feaster: That's great. That's great. And then, Byron, I just wanted to maybe dig back into the margin trajectory going forward. I mean, thus far, it's kind of played out exactly how you've laid it out. I know you've laid out that kind of that 4% threshold by the end of this year. I just wanted to make sure that that was still on track. And maybe if you could walk us through the NIM walk and what gives you confidence in your ability to achieve that, and how dependent is that 4% level on Fed cuts?
That's great, that's great. And then Byron, I just wanted to maybe dig back into the margin trajectory going forward. I mean, thus far it's kind of played out exactly how you've laid it out. You know, I know you've laid out that kind of 4% threshold by the end of this year. I just wanted to make sure that that was still on track, and maybe if you could walk us through the NIM walk and what gives you confidence in your ability to achieve that. And how dependent is that 4% level on Fed cuts?
Ron Copher: Yeah, David, this is Byron. Yeah, we've seen tremendous progress in our net interest margin. We've got great momentum, and we continue to see momentum ahead of us. We have a lot of programmatic structural repricing drivers in our balance sheet that will, to your point, that will continue to lift margin regardless of the Fed. So we're not in any way Fed-dependent. And we continue to see growth ahead of us. We do expect to hit 4% at some point later this year, probably second half of 2026. So green lights ahead.
Byron Pollan: Yeah, David, this is Byron. Yeah, we've seen tremendous progress in our net interest margin. We've got great momentum, and we continue to see momentum ahead of us. We have a lot of programmatic structural repricing drivers in our balance sheet that will, to your point, that will continue to lift margin regardless of the Fed. So we're not in any way Fed-dependent. And we continue to see growth ahead of us. We do expect to hit 4% at some point later this year, probably second half of 2026. So green lights ahead.
Momentum ahead of us. Uh, we have a lot of programmatic, structural, uh, repricing drivers in the balance sheet that will, you know, to your point, that will, um, continue to lift margin regardless of the Fed, so we're not in any way, uh, Fed dependent. Um, and, and, uh, you know, we continue to see, uh, growth ahead of us. Would expect to hit 4% at some, uh, some point later this year, probably second half of, uh, second half of '26. So, um, you know, green light ahead.
[Analyst] (Raymond James): Okay. That's great. And then maybe just touching on the expense side, obviously, there's a lot of noise just with the Guaranty deal, ongoing savings from Boyd. Just wanted to see if you could help us think about the core expense run rate heading into the new year and how you'd expect expenses to trend over the year, and maybe some investments that you might have on the horizon, just including potential hiring. I mean, there is a lot of disruption in the market. Just kind of curious what investments and your thoughts on that.
David Feaster: Okay. That's great. And then maybe just touching on the expense side, obviously, there's a lot of noise just with the Guaranty deal, ongoing savings from Boyd. Just wanted to see if you could help us think about the core expense run rate heading into the new year and how you'd expect expenses to trend over the year, and maybe some investments that you might have on the horizon, just including potential hiring. I mean, there is a lot of disruption in the market. Just kind of curious what investments and your thoughts on that.
Ron Copher: Yeah. Dave, this is Ron here. So just to cover what happened in Q4, our reported all-in non-interest expense was $194.6 million, but we had some one-time M&A of $5.8 million. As we explained in the earnings release, $3 million related to three leased branches. And then we had a $827,000 reversal of FDIC assessment. So taking those three adjustments into account, our operating core non-interest expense was $186.6 million, which was within the guide. We said $185 to $189, so feel good about that. The run rate for next year, the Q1, as is traditional, will step up. We're going to guide $189 to $193, and that represents just a 2% increase compared to Q4. And then it'll step down there over Q2, Q3, Q4 as we grow into our expense base. And basically, that's the typical pattern that we exhibit.
Ron Copher: Yeah. Dave, this is Ron here. So just to cover what happened in Q4, our reported all-in non-interest expense was $194.6 million, but we had some one-time M&A of $5.8 million. As we explained in the earnings release, $3 million related to three leased branches. And then we had a $827,000 reversal of FDIC assessment. So taking those three adjustments into account, our operating core non-interest expense was $186.6 million, which was within the guide. We said $185 to $189, so feel good about that. The run rate for next year, the Q1, as is traditional, will step up. We're going to guide $189 to $193, and that represents just a 2% increase compared to Q4. And then it'll step down there over Q2, Q3, Q4 as we grow into our expense base. And basically, that's the typical pattern that we exhibit.
Okay, that's great. And then um, you know, maybe just touching on on the expense side, obviously there's a lot of noise just with the guarantee deal, ongoing savings from void, just wanted to see if you could help us. Think about the the core expense run rate heading into the new year. And how you'd expect expenses to Trend over the year? And maybe, you know, some in Investments that you might have on the rise in just including, you know, potential hiring, you know, I mean, there is a lot of disruption, uh, in the market just kind of curious. Um, you know, what investments in in your thoughts on that.
Hey, this is Ron here. So, our, um, the cover—what's happened in Q4, so our, uh, reported, uh, all-in—now, this expense was $194.6 [million], but we had some, uh, one-time or, you know, we had the M&A of $5.8 million. Um, if we explained in the earnings release, you know, $3 million—
related to, uh,
Um, three leased branches. And then, uh, we had a $827,000 reversal of FDIC assessment. So taking those three adjustments into account.
Our operating core non-interest expense was $186.6 million, which was, um, within the guide we said—$185 to $189 million.
So, feel good about that. Um,
Ron Copher: But in terms of the technology spend, the really good news is that's helping us control our non-interest expense as we get more efficient, as our divisions, our people embrace that technology. So it's made a difference, certainly in the numerator of the efficiency ratio, but as well, it's helping to help us with our net interest income, the loans, the commercial loans, what we're doing there, the treasury management services. They continue to pick up. Good news there as the divisions embrace it more so, and including what Guaranty Bank & Trust will bring to us. They're very excited about that. So as Randy commented, we've made some pretty good headway, especially if you look at the four consecutive quarters in 2025. Each time, whether you look at reported or operating, our efficiency ratio continues to improve.
But in terms of the technology spend, the really good news is that's helping us control our non-interest expense as we get more efficient, as our divisions, our people embrace that technology. So it's made a difference, certainly in the numerator of the efficiency ratio, but as well, it's helping to help us with our net interest income, the loans, the commercial loans, what we're doing there, the treasury management services. They continue to pick up. Good news there as the divisions embrace it more so, and including what Guaranty Bank & Trust will bring to us. They're very excited about that. So as Randy commented, we've made some pretty good headway, especially if you look at the four consecutive quarters in 2025. Each time, whether you look at reported or operating, our efficiency ratio continues to improve.
The the Run rate for uh next year the first quarter as is traditional, we'll step up. Um, we're going to guide 189 to 1903, and that represents just a 2% increase, compared to Q4. Um, and then it'll step down there over Q2 Q3 Q4. As we grow into our expense base. And basically, that's the the typical pattern that we, we exhibit, so, um, but in terms of the, the technology spend, uh, the really good news is that's helping us control our non-interest expense, as we get more efficient as our divisions, our people Embrace that technology. So it It's Made A Difference, certainly in the numerator of the efficiency ratio, but as well as helping to, um, you know, uh,
Helping us with our net interest income—you know, the loans, the commercial loans, what we're doing there, the Treasury Management Services—you know, they continue to pick up.
Ron Copher: The good news is we think in this year we will be able to hit mid-50, 54% to 55%, which is our traditional range.
The good news is we think in this year we will be able to hit mid-50, 54% to 55%, which is our traditional range.
Um, uh, good news there, as, as the divisions, uh, embrace it more so and including what, um, Guarantee Bank and Trust will bring to us, they're very excited about that. So, uh, as Randy commented, you know, we've made some pretty good Headway, especially if you look at the 4 consecutive quarters in 25 each time, whether you look at reported or operating are efficiency, ratio continues to improve. And the good news is, uh, we think in this year, we will be able to hit mid-50s 54 to 55%, which is our traditional range.
Tom Dolan: In terms of investment and people, David, and there is a lot of disruption. I think one of the interesting things here is, and we're looking at all the people, we really kind of whittle, funnel the folks, the talent down and find that there's fewer rather than many that we think would be a good fit for our team and add some real significant lift. And so really no material increase in expense associated with bringing those people on. It's more individual. And as I said, that's because there's a lot of people, but when you really sort through who has the relationships and who's got a lot to bring to the table, it's actually a smaller number.
Randall M. Chesler: In terms of investment and people, David, and there is a lot of disruption. I think one of the interesting things here is, and we're looking at all the people, we really kind of whittle, funnel the folks, the talent down and find that there's fewer rather than many that we think would be a good fit for our team and add some real significant lift. And so really no material increase in expense associated with bringing those people on. It's more individual. And as I said, that's because there's a lot of people, but when you really sort through who has the relationships and who's got a lot to bring to the table, it's actually a smaller number.
You know, the terms of investment in people, David 1 and there is a lot of disruption, I think 1 of the interesting things here is and we're looking at all the people. You know, we're we are we really going to whittle, a funnel, the folks, the talent down and and find that there's um, you know, fewer rather than many that we think would be a good fit, um, for our team and and add, uh, some real significant list. And so, really no material increase in expense associated with, with bringing those people on, it's more individual. Um and as I said, that's because there's a lot of people but we
When you really sort through who is in relationships and who's got a lot to bring to the table, it's actually a smaller number.
[Analyst] (Raymond James): That makes sense. Thanks, everybody.
David Feaster: That makes sense. Thanks, everybody.
Tom Dolan: Welcome.
Tom Dolan: Welcome.
That makes sense. Thanks everybody.
Operator: Thank you. Our next question comes from Andrew Terrell of Stephens. Your line is open.
Operator: Thank you. Our next question comes from Andrew Terrell of Stephens. Your line is open.
Welcome.
Thank you.
And our next question comes from Andrew Terrell of Stephens. Your line is open.
[Analyst] (Stephens): Hey, good morning.
Andrew Terrell: Hey, good morning.
Tom Dolan: Morning.
Tom Dolan: Morning.
Hey, good morning.
Morning.
[Analyst] (Stephens): If I could just follow back up on expenses, I appreciate the guide, the $189 to 193 in the first quarter, but it sounds like it moderates afterwards. I know you guys will have the core system conversion and some cost savings coming through from Guaranty, but I'm just trying to get a sense of full year kind of expected expenses if you have it for 2026. Just the Q1 guide is a little bit higher than where consensus is, and just trying to make sure we're maybe stepping down appropriately throughout 2026.
Andrew Terrell: If I could just follow back up on expenses, I appreciate the guide, the $189 to 193 in the first quarter, but it sounds like it moderates afterwards. I know you guys will have the core system conversion and some cost savings coming through from Guaranty, but I'm just trying to get a sense of full year kind of expected expenses if you have it for 2026. Just the Q1 guide is a little bit higher than where consensus is, and just trying to make sure we're maybe stepping down appropriately throughout 2026.
Appreciate the guy, the 189, the 193 in the first quarter, but sounds like it.
Ron Copher: Yeah. So Ron here. Appreciate the question. So Q2 through Q4, I would estimate it'll range, and this is for each of the three remaining quarters, $187 to $192. So on a full year guide basis, that shapes up to be 700, and I'm talking core. I want to make that very clear. So when I say core, I'm including M&A, one-time unusual items, gain or loss on any facility sales, etc. But the full year guide would be $750 million to, say, $600, excuse me, to $766 million for the full year. Again, that's core operating expense.
Ron Copher: Yeah. So Ron here. Appreciate the question. So Q2 through Q4, I would estimate it'll range, and this is for each of the three remaining quarters, $187 to $192. So on a full year guide basis, that shapes up to be 700, and I'm talking core. I want to make that very clear. So when I say core, I'm including M&A, one-time unusual items, gain or loss on any facility sales, etc. But the full year guide would be $750 million to, say, $600, excuse me, to $766 million for the full year. Again, that's core operating expense.
It moderates afterwards. I know you guys will have, you know, the the core system conversion and and some cost saves coming through from from guarantee. But, you know, I'm just trying to trying to get a sense of of full year kind of expected expenses. If you, if you have it for 2026, just, you know, the, the 1 cute guide is a little bit higher than where it can sense this is, um, and just trying to make sure we're we're maybe stepping down appropriately throughout 26.
Yeah, so Ron here. Appreciate the question. So, um,
222 through Q4, uh, I would estimate it'll range—and this is for each of the 3 remaining quarters—from 187 to 192. So, on a full year guide basis, that shapes up to be, uh, 700, and I'm talking core. I want to make that very clear. So, when I say core, I'm including M&A, one-time, uh, unusual items, uh, gain or loss on any facility sales, etc. But the full year guide would be $750 million to, say, $600 million.
Excuse me—to $766 million for the full year. Again, that’s core operating expense.
[Analyst] (Stephens): Understood. I appreciate it. If I could move over just to margin quickly, you guys, Byron, to your credit, really spot on kind of with where we've talked about margin going. I'd just like to maybe better understand on the origination side and just as we think about the asset repricing potential, what are you seeing in terms of new origination yields and spreads right now? Have you seen any level of increased competition that's impacted that? Just hoping to get some more comfortability around the pace of loan yield expansion or earning asset yield expansion.
Andrew Terrell: Understood. I appreciate it. If I could move over just to margin quickly, you guys, Byron, to your credit, really spot on kind of with where we've talked about margin going. I'd just like to maybe better understand on the origination side and just as we think about the asset repricing potential, what are you seeing in terms of new origination yields and spreads right now? Have you seen any level of increased competition that's impacted that? Just hoping to get some more comfortability around the pace of loan yield expansion or earning asset yield expansion.
Understood. I appreciate it.
Tom Dolan: Yeah. I think Tom can answer part of that, and then Byron, if you have things to add, that would be great.
Tom Dolan: Yeah. I think Tom can answer part of that, and then Byron, if you have things to add, that would be great.
Um if I could move over, just to, you know, margin quickly. Um you guys, you know, buy into your credit really uh spot on kind of with where we've talked about margin going. I I just like to maybe better understand on on the origination side and um you know just as we think about the asset repricing potential. What are you seeing in terms of new origination yields and spreads right now? Have you seen any level of increase competition? That's impacted that um just hoping to get a, you know some more comfortability around you know the the the pace of of loan yield um expansion or earning as the yield expansion.
Angela Dose: Yeah. On the production, we're still seeing good spreads. We're around 300 basis points over the index that we utilize. For the Q4, we were a little over 6.8. We've seen that come up a little bit towards the latter part of December and continuing into January. That's what we're seeing on the production side right now.
Angela Dose: Yeah. On the production, we're still seeing good spreads. We're around 300 basis points over the index that we utilize. For the Q4, we were a little over 6.8. We've seen that come up a little bit towards the latter part of December and continuing into January. That's what we're seeing on the production side right now.
Yeah, let me—uh, I think Tom can answer part of that in the environment. If you have things to add, that would be great. Yep. On the production, we're still seeing good spreads. We're at around 300 basis points over the index. We, uh...
That we utilize, um, you know, for the fourth quarter, we were a little over 6.8. Um, we've seen that come up a little bit towards the latter part of December and continuing into January.
So that's what we're seeing on the production side right now.
Tom Dolan: Byron, anything to add?
Tom Dolan: Byron, anything to add?
Ron Copher: No. I think you covered it. Repricing is another area of lift for us. I think we expect to see north of $2 billion of assets repriced, and we'll be gaining 75 to 100 basis points on that balance. So another strong driver there.
Ron Copher: No. I think you covered it. Repricing is another area of lift for us. I think we expect to see north of $2 billion of assets repriced, and we'll be gaining 75 to 100 basis points on that balance. So another strong driver there.
Fireman. Anything that. No, I, I, I think you covered it. I'm repricing. You know, is, is another, uh, area of lift for us, you know, I think we expect to see, um, north of 2 billion dollars of assets, repriced and we'll, and we'll be gaining 7,500 basis points on, on that balance. So, another strong driver there,
[Analyst] (Stephens): Great. I appreciate it. And then last one for me, just I'd be curious, do you guys have the final day one tangible dilution for Guaranty? And maybe I missed it, but I think it's supposed to be barely dilutive when you guys announced, but your tangible book value was up pretty nicely this quarter, and capital is obviously in a better spot than what you were forecasting as well. So I was just hoping if you had the update there.
Andrew Terrell: Great. I appreciate it. And then last one for me, just I'd be curious, do you guys have the final day one tangible dilution for Guaranty? And maybe I missed it, but I think it's supposed to be barely dilutive when you guys announced, but your tangible book value was up pretty nicely this quarter, and capital is obviously in a better spot than what you were forecasting as well. So I was just hoping if you had the update there.
Great, I appreciate it. And then, last one for me, just—um,
I'd be curious—do you guys have the final, um, day 1 tangent?
For Guarantee—and maybe I missed it—but I think it's supposed to be barely dilutive when you guys announced it.
Tom Dolan: Yeah. No, that was one of the, there's many good things about that Guaranty transaction, but one of them was a tangible book value payback period, which was six months. So don't see any change to that, so still tracking to that.
Tom Dolan: Yeah. No, that was one of the, there's many good things about that Guaranty transaction, but one of them was a tangible book value payback period, which was six months. So don't see any change to that, so still tracking to that.
Your tangible book value was up pretty nicely this quarter, and capital's obviously in a better spot than what you were forecasting as well. So I was just hoping if you had, you know, the update there.
Yeah, no, um, that was one of the, one of the—there’s many good things about that guaranteed transaction, but one of them was a tangible book value payback period, which was six months. So, um, don't see any change to that. So, still tracking to that.
[Analyst] (Stephens): Okay. Thanks for taking the questions.
Andrew Terrell: Okay. Thanks for taking the questions.
Okay, thanks for taking the questions.
Operator: Thank you. As a reminder, if you have a question, please press star 11. Our next question comes from Kelly Motta of KBW. Your line is open.
Operator: Thank you. As a reminder, if you have a question, please press star 11. Our next question comes from Kelly Motta of KBW. Your line is open.
Thank you.
And as a reminder, if you have a question, please press *11. Our next question comes from Kelly Ma of KBW. Your line is open.
[Analyst] (KBW): Hey, good morning. Thanks for the question. I'm sorry. I do want to get a few points of clarification on certain pieces of the guide. Ron, I just wanted to make sure on the expenses that the upper end was 766. Is that correct?
Kelly Motta: Hey, good morning. Thanks for the question. I'm sorry. I do want to get a few points of clarification on certain pieces of the guide. Ron, I just wanted to make sure on the expenses that the upper end was 766. Is that correct?
Ron Copher: That's correct.
Ron Copher: That's correct.
[Analyst] (KBW): Okay. So in terms of where it sounds like you're still expecting to get into that mid-50s efficiency by the second half of the year. In terms of where the expenses kind of come out, I would imagine the upper end of the range would be commensurate with higher revenues. Is that the right way to think about it? And just kind of any puts and takes of what could push you higher versus lower end?
Kelly Motta: Okay. So in terms of where it sounds like you're still expecting to get into that mid-50s efficiency by the second half of the year. In terms of where the expenses kind of come out, I would imagine the upper end of the range would be commensurate with higher revenues. Is that the right way to think about it? And just kind of any puts and takes of what could push you higher versus lower end?
Hey, good morning, thanks for the question. Um, I—I'm sorry. I do want to get a few points of clarification on, um, certain pieces of the guide, Ron. I just wanted to make sure, um, on the expenses, that the upper end was, um, $766. Is that—is that correct? That's correct.
Okay, so in terms of where you, it sounds like you're still expecting to get into that. Um,
Ron Copher: Yeah. So yes, revenues increase, and as we add some talent, you have the expenses would expect to go up. That's a typical pattern. I have complete agreement with that. Just I want to be clear just on that Q1; that's typically our higher Q1 because we have the merit pay increases, employment taxes, and then it will drop down. We're doing very well across the divisions, the corporate departments with controlling our non-interest expense. So I think that's really helping with the efficiency ratio. But the net interest income, revenues growing is certainly making a big difference as well as we continue to get towards that. As you said, in the second half, get to the mid-50s on the efficiency ratio.
Ron Copher: Yeah. So yes, revenues increase, and as we add some talent, you have the expenses would expect to go up. That's a typical pattern. I have complete agreement with that. Just I want to be clear just on that Q1; that's typically our higher Q1 because we have the merit pay increases, employment taxes, and then it will drop down. We're doing very well across the divisions, the corporate departments with controlling our non-interest expense. So I think that's really helping with the efficiency ratio. But the net interest income, revenues growing is certainly making a big difference as well as we continue to get towards that. As you said, in the second half, get to the mid-50s on the efficiency ratio.
That mid-50s efficiency by by the second half of the year. Um, in terms of where the expenses kind of come out, can you? Um, I I would imagine the upper end of the range would um, be commensurate with higher revenues like is is that the right way to think about it. Um, and and just kind of any puts and takes of what could push you higher versus lower ends.
Is increase. Um, and as as we add some Talent, you know, you have the expenses would expect to go up. Um, and that just makes that's a typical pattern. So I I I I
Have a complete agreement with that. Just I want to be clear just on that first quarter. You know, that's typically a higher first quarter because we have the Merit pay increases employment taxes. And then it it it it will drop down and um we're doing very well across the divisions, the corporate departments with, um, controlling our non-interest expense. And so I think that's really helping um, with the efficiency ratio but the net interest income revenues growing is certainly making a big difference as well as we continue to
Get towards that, as you said in the second half, get to the mid-50s on the efficiency ratio.
[Analyst] (KBW): Got it. That's really helpful. And then what was a nice, I guess, surprise, or at least relative to my model, is your loan yields came in higher. And granted, there's the contribution from Guaranty. It looks like loan fees were fairly minimal. So as you look ahead, maybe can you provide where new loan pricing is coming on and how we should be thinking about that as being additive to the outlook ahead? Thank you.
Kelly Motta: Got it. That's really helpful. And then what was a nice, I guess, surprise, or at least relative to my model, is your loan yields came in higher. And granted, there's the contribution from Guaranty. It looks like loan fees were fairly minimal. So as you look ahead, maybe can you provide where new loan pricing is coming on and how we should be thinking about that as being additive to the outlook ahead? Thank you.
Got it. Um, that's really helpful. And then, you know, what was a nice, um,
Uh, I guess the surprise, or at least relative to my model, is your loan yields came in higher. And granted, there's the contribution from guarantee. It looks like, um...
You know, loan fees were fairly minimal. So, um, as you look ahead, maybe, um, can you provide where, you know, new loan pricing is coming on and how we should be thinking about, um, you know, that as being additive to the outlook ahead? Thank you.
Tom Dolan: Yeah. I think that, as Tom commented on, we're getting a little better margin at origination than we expected. We saw some compression in the tail end of 2025, but December was really strong, and that margin, we're getting closer to 3% margin on the new loan pricing. And so whether that continues or not is a little difficult to say. It's a little early, but we're encouraged. We're starting off the year with that dynamic, and we'll just see if that trend carries through for the rest of 2026.
Tom Dolan: Yeah. I think that, as Tom commented on, we're getting a little better margin at origination than we expected. We saw some compression in the tail end of 2025, but December was really strong, and that margin, we're getting closer to 3% margin on the new loan pricing. And so whether that continues or not is a little difficult to say. It's a little early, but we're encouraged. We're starting off the year with that dynamic, and we'll just see if that trend carries through for the rest of 2026.
Yeah, I think that, um, as Tom commented on, you know, we're getting a little better margin at origination than we expected. We saw some compression at the tail end of, uh, '25. But
Uh, December was really strong and that uh, margin, you know, we're getting close closer to 3% margin on the on the new loan pricing. Um, and so, you know, whether that continues or not is a little difficult to say it's a little early but you know, we're encouraged, we're starting off the year with that uh that Dynamic. And we'll just see if that Trend carries through uh, for the rest of 26.
[Analyst] (KBW): Got it. That's helpful. And then maybe a last question for Byron is, obviously, the cash flows from securities with the Treasury ladder maturing has been a nice tailwind. Can you remind us kind of the cadence of securities cash flows as we get through the year?
Kelly Motta: Got it. That's helpful. And then maybe a last question for Byron is, obviously, the cash flows from securities with the Treasury ladder maturing has been a nice tailwind. Can you remind us kind of the cadence of securities cash flows as we get through the year?
Ron Copher: Sure. We're expecting roughly $425 million of cash flow from the securities book every quarter, and that's a rough estimate quarterly for 2026.
Ron Copher: Sure. We're expecting roughly $425 million of cash flow from the securities book every quarter, and that's a rough estimate quarterly for 2026.
Byron is, um, obviously the um, cash flows from Securities with the treasury ladder. Maturing as in uhm, a nice Tailwind can you remind us, um, kind of the Cadence of, uh, Securities cash flows as we, we get through the year,
[Analyst] (KBW): Got it. Do you have the blended roll-off yields on that?
Kelly Motta: Got it. Do you have the blended roll-off yields on that?
Ron Copher: That's going to be. It's going to have a one handle on it. It's going to probably be in the low to mid-1% range.
Ron Copher: That's going to be. It's going to have a one handle on it. It's going to probably be in the low to mid-1% range.
[Analyst] (KBW): Great. Thanks a lot.
Kelly Motta: Great. Thanks a lot.
Uh, that's going to be, it's going to have a one handle on it, and it's going to probably be in the low to mid 1% range.
Tom Dolan: You're welcome.
Tom Dolan: You're welcome.
Great. Thanks a lot.
You're welcome.
Operator: Thank you. Our next question comes from Jeff Rulis of D.A. Davidson. Your line is open.
Operator: Thank you. Our next question comes from Jeff Rulis of D.A. Davidson. Your line is open.
Thank you.
Tom Dolan: Thanks. Good morning.
Jeff Rulis: Thanks. Good morning.
And our next question comes from Jeff Rulis of D.A. Davidson. Your line is open.
Randall M. Chesler: Morning, Jeff.
Randall M. Chesler: Morning, Jeff.
Thanks. Good morning, Morning, and Jeff.
Tom Dolan: Tom, I wanted to circle back to the growth conversation, and I think your loans up 3% organically this year. And I understand kind of the guide for this coming year is at a minimum that level and hope to do better. But was there anything in 2025 that you had more kind of credit trimming or balance sheet adjustments? Certainly brought on a lot of your busiest acquisition year, so I don't know if there was some balance sheet reshaping. Just trying to get a sense for, it feels like the model is in some fantastic markets, and repeating 3% might be a little mild. So anything in 2025 that you maybe had headwinds versus 2026 that releases maybe some of those pressures?
Tom Dolan: Tom, I wanted to circle back to the growth conversation, and I think your loans up 3% organically this year. And I understand kind of the guide for this coming year is at a minimum that level and hope to do better. But was there anything in 2025 that you had more kind of credit trimming or balance sheet adjustments? Certainly brought on a lot of your busiest acquisition year, so I don't know if there was some balance sheet reshaping. Just trying to get a sense for, it feels like the model is in some fantastic markets, and repeating 3% might be a little mild. So anything in 2025 that you maybe had headwinds versus 2026 that releases maybe some of those pressures?
Tom, I wanted to circle back to your growth conversation, and I think you're—
Loans were up 3% organically this year, and I understand kind of the guide for this coming year is—
At a minimum that level and and hope to do better. But was there anything in 25 that you had more kind of credit trimming or balance sheet adjustments? Certainly brought on a lot of, um, your busiest acquisition years. So, I don't know if there was some balance sheet reshaping just trying to get a sense for. It Feels Like the Model is is in some some fantastic markets and and um you know, repeating 3% might be a little uh mild. So
Amazing in '25 that you maybe had headwinds, versus '26, that releases maybe some of those, uh,
Angela Dose: Yeah. I think there are two things that are real tailwinds. One is the construction production we've had over the last few quarters. As we enter the construction season, that's going to be a tailwind for net growth. Those don't typically fully fund at close. So as we enter the construction season, especially in the northern part of the footprint, that'll pick up. Same thing with the ag book. And then we typically see stronger line utilization towards the middle part of the year. From a headwinds perspective, 2025 was impacted probably a little more than normal with some early-term payoffs. We've talked about that on prior calls. We'll just have to watch that to see if that's a continuing trend. And just given the overall CRE market, cap rate's still quite low. NOI is probably better than anticipated.
Angela Dose: Yeah. I think there are two things that are real tailwinds. One is the construction production we've had over the last few quarters. As we enter the construction season, that's going to be a tailwind for net growth. Those don't typically fully fund at close. So as we enter the construction season, especially in the northern part of the footprint, that'll pick up. Same thing with the ag book. And then we typically see stronger line utilization towards the middle part of the year. From a headwinds perspective, 2025 was impacted probably a little more than normal with some early-term payoffs. We've talked about that on prior calls. We'll just have to watch that to see if that's a continuing trend. And just given the overall CRE market, cap rate's still quite low. NOI is probably better than anticipated.
Uh, pressures.
Yeah, I think there's two things that are real tailwind. Um,
1 is the construction production, we've had over the last few quarters. Um, you know, as we know the construction season that's going to be a Tailwind for net growth, you know, those those don't typically fully fund the clothes. Um, so the end of the, you know, the construction season especially in the northern part of the Philippines. You know what? That'll pick up. Uh, same thing with the Egg book. Um, and then we typically see stronger line utilization, uh,
Towards the middle part of the year, you know, from a headwinds perspective, 2025 was impacted.
That's to see if that's a continuing trend. Um,
Angela Dose: That gives a pretty good investment return for those developers as they hit stabilization on those projects. So the economics around that are still pretty positive for the investor side. So that's just something we'll need to watch, Jeff.
Angela Dose: That gives a pretty good investment return for those developers as they hit stabilization on those projects. So the economics around that are still pretty positive for the investor side. So that's just something we'll need to watch, Jeff.
Tom Dolan: Okay. Thanks. And Randy, I guess the baseline question for you on busiest acquisition year in the history of the bank as you get into the southwest footprint in terms of more conversations as well as the historical regions that you've been in, how's the M&A outlook from your perspective?
Tom Dolan: Okay. Thanks. And Randy, I guess the baseline question for you on busiest acquisition year in the history of the bank as you get into the southwest footprint in terms of more conversations as well as the historical regions that you've been in, how's the M&A outlook from your perspective?
And, you know, just just given the overall CRA Market, you know, cap rate is still quite low. Um, noice is probably better than anticipated. You know, that that gives a pretty good investment return for for those developers as they hit stabilization on those projects. So you know, the the economics around that are still pretty positive for the investor side. So you know that's just something we'll need to watch just
Okay, thanks. Um, and Randy, I guess the baseline question for you on—
Busy acquisition year in the history of the of the bank. Um as you as you get into the Southwest um footprint in terms of more conversations as well as the historical regions that you've been in house, the m&a um Outlook from your perspective.
Randall M. Chesler: No, I think it's good. And we're having conversations in the Mountain West region as well as the Southwest. And there's increasing activity there. And I'd say we're being very disciplined and selective as we've always been as more and more things appear. And right now, our focus is on getting the Guaranty Bank & Trust conversion done. We're going to do that in mid-February and really making sure that goes exceedingly well, which we believe it will. And then I think we have a lot of conversations ongoing. We'll see where that will take us. But I think it should be a very good environment for the next couple of years.
Randall M. Chesler: No, I think it's good. And we're having conversations in the Mountain West region as well as the Southwest. And there's increasing activity there. And I'd say we're being very disciplined and selective as we've always been as more and more things appear. And right now, our focus is on getting the Guaranty Bank & Trust conversion done. We're going to do that in mid-February and really making sure that goes exceedingly well, which we believe it will. And then I think we have a lot of conversations ongoing. We'll see where that will take us. But I think it should be a very good environment for the next couple of years.
No, I think it's good, and we're having conversations in the Mountain West region as well as the Southwest, and um—
you know, there's, um, there's a there's increasing activity there, um, and I'd say we're being very disciplined and selective as we've always been
Tom Dolan: Great. Thank you.
Tom Dolan: Great. Thank you.
Um, as more and more things appear—um, and right now our focus is on, you know, getting the Guarantee Bank and Trust conversion done. We're going to do that in mid-February and really making sure that goes, uh, exceedingly well, which we believe it will. And then I think, um, you know, we have a lot of conversations ongoing; you know, we'll see where that will take us. But, um, you know, I think it should be a very good environment for the next couple of years.
Great. Thank you.
Operator: Thank you. We have a follow-up from Andrew Terrell of Stephens. Your line is open.
Operator: Thank you. We have a follow-up from Andrew Terrell of Stephens. Your line is open.
Thank you.
We have a follow-up from Andrew Terrell of Stevens. Your line is open.
[Analyst] (Stephens): Hey, thanks for taking the follow-up. Just a couple of quick questions around the margin. Byron, I think you said it was a little north of $2 billion for repricing assets in 2026. Can you confirm that? And do you have a comparable figure for 2027? And then separately, I was going to ask, you're getting close to the end on the FHLB balances. Do the rest of those come off in the first part of 2026? And then with some of this excess cash flow you're generating, what should we think about in terms of uses of that? Does it go back into the bond book? Is there anything else that needs to come off in terms of higher-cost funding? Just a couple of the moving pieces there.
Andrew Terrell: Hey, thanks for taking the follow-up. Just a couple of quick questions around the margin. Byron, I think you said it was a little north of $2 billion for repricing assets in 2026. Can you confirm that? And do you have a comparable figure for 2027? And then separately, I was going to ask, you're getting close to the end on the FHLB balances. Do the rest of those come off in the first part of 2026? And then with some of this excess cash flow you're generating, what should we think about in terms of uses of that? Does it go back into the bond book? Is there anything else that needs to come off in terms of higher-cost funding? Just a couple of the moving pieces there.
Hey, thanks for, uh, taking the follow-up. Um.
Just a couple of quick questions are on the margin. Um Byron. I think you said it was a little north of 2 billion dollars. Uh, for repricing assets in 2026? Do you have a? Can you confirm that? Do you have a comparable? Um,
You know, figure for 2027, um, and then separately I was going to ask—you know, you're getting close to the end on the FHLB balances.
Do the rest of those come off in, you know, the first part of 2026, and then, you know, with some of this excess cash flow you're generating?
Ron Copher: Sure. In terms of the repricing, Andrew, I don't have the 2027 number in front of me. I can look that up and get back to you. I think it would be comparable to what we expect in 2026. $2.5 billion somewhere in that neighborhood would likely be repricing in 2027. In terms of the FHLB paydown, we expect to complete the payoff of our FHLB advances later in Q1. I think mid-March is the payoff of that. And so that will be great to see the payoff of that higher-cost debt. And that's been a big part of our margin recovery story as well. And that will be funded with securities cash flow, with the elevated cash flow that we noted earlier coming off of the securities portfolio, perfectly sufficient to fund that payoff.
Ron Copher: Sure. In terms of the repricing, Andrew, I don't have the 2027 number in front of me. I can look that up and get back to you. I think it would be comparable to what we expect in 2026. $2.5 billion somewhere in that neighborhood would likely be repricing in 2027. In terms of the FHLB paydown, we expect to complete the payoff of our FHLB advances later in Q1. I think mid-March is the payoff of that. And so that will be great to see the payoff of that higher-cost debt. And that's been a big part of our margin recovery story as well. And that will be funded with securities cash flow, with the elevated cash flow that we noted earlier coming off of the securities portfolio, perfectly sufficient to fund that payoff.
What should we think about in terms of uses of that? Does it go back into the bond book? Um, is there anything else that needs to come off in terms of higher-cost funding—just a couple of the moving pieces there?
Ron Copher: And once we pay off that remaining $440 million, that's pretty much it in terms of our wholesale funding that's left.
Ron Copher: And once we pay off that remaining $440 million, that's pretty much it in terms of our wholesale funding that's left.
Sure. Uh, in in terms of the repricing, um, Andrew, I don't have the 27 number in front of me. I can I can look that up and get back to you. I think, I think it would be comparable uh, to what we expect in 26. You know, 2 2 and a half billion dollars somewhere in that, that neighborhood would likely be re-pricing in 27. Uh, in terms of the, the fhl be pay down. Uh, we expect to complete the payoff of our of our fhlb advances, uh, later in the, in the first quarter, I think mid-march is the, the payoff of that. Um, and so that that will be, that will be, you know, great to see the the the path of that higher cost debt. And that's, that's been a big part of our, our margin recovery story as well. Um, and, and that will be funded with, with the security of cash flow with the elevated cash flow that we noted earlier coming off of the Securities portfolio, uh, perfectly sufficient to, to, to fund that that payoff. Um, so, uh, and, and once, once we pay on
That remaining $440 million. That's pretty much it in terms of our wholesale funding. That's plus—
[Analyst] (Stephens): Yeah. And so it just probably gets put back into the bond book at that point, the excess cash flows?
Andrew Terrell: Yeah. And so it just probably gets put back into the bond book at that point, the excess cash flows?
Ron Copher: Exactly right. Yeah, we're looking at strategies for later this year to what to do to redeploy that cash that would build.
Ron Copher: Exactly right. Yeah, we're looking at strategies for later this year to what to do to redeploy that cash that would build.
Yeah, and so it just probably gets put back into the bond book at that point, the excess cash flows.
Exactly right. Yeah, we're we're we're looking at strategies, you know, for for later this year to what to do to re redeploy that that cash, that would that that would build
[Analyst] (Stephens): Great. Thanks for the follow-ups.
Andrew Terrell: Great. Thanks for the follow-ups.
Great. Thanks for the follow-up.
Operator: Thank you. And we have a follow-up from David Feaster of Raymond James. Your line is open.
Operator: Thank you. And we have a follow-up from David Feaster of Raymond James. Your line is open.
Thank you.
And we have a follow-up from David, Pastor of Raymond James. July is open.
[Analyst] (Raymond James): Hi. Thanks for letting me hop back in. I wanted to circle back to Guaranty and just kind of get a sense of how that integration has gone so far. Going into a new market can be very difficult, and Texas isn't easy, but I know that's a market that you know well, Randy. I suspect it's pretty limited disruption just given this is a new division that y'all are creating, no real branch changes or anything like that. And again, Tom, I appreciate the commentary that they're already starting to contribute, but just wanted to get an early read on the integration now that we're a few months in post-close and kind of what you're most excited about with them at this point.
David Feaster: Hi. Thanks for letting me hop back in. I wanted to circle back to Guaranty and just kind of get a sense of how that integration has gone so far. Going into a new market can be very difficult, and Texas isn't easy, but I know that's a market that you know well, Randy. I suspect it's pretty limited disruption just given this is a new division that y'all are creating, no real branch changes or anything like that. And again, Tom, I appreciate the commentary that they're already starting to contribute, but just wanted to get an early read on the integration now that we're a few months in post-close and kind of what you're most excited about with them at this point.
Randall M. Chesler: Sure. Yeah. I mean, to start with our model, we keep the name. It's a 100-year-old bank. In terms of minimizing disruption, we keep the people. We have the same leadership in place. And so that is very, very helpful compared to some of the other transitions ongoing in the market down there. We think that we're extremely well-positioned with customers and employees. So that part, just setting the stage with the model, is very, very helpful and positive from our standpoint. It's been a great fit. I think we've noticed that from the beginning and talked about that. The culture fit, certainly on the credit side. Tom has done a lot of work, and it's a very good fit. So it looks very much like a seamless handoff. They're integrated into the credit system right now.
Randall M. Chesler: Sure. Yeah. I mean, to start with our model, we keep the name. It's a 100-year-old bank. In terms of minimizing disruption, we keep the people. We have the same leadership in place. And so that is very, very helpful compared to some of the other transitions ongoing in the market down there. We think that we're extremely well-positioned with customers and employees. So that part, just setting the stage with the model, is very, very helpful and positive from our standpoint. It's been a great fit. I think we've noticed that from the beginning and talked about that. The culture fit, certainly on the credit side. Tom has done a lot of work, and it's a very good fit. So it looks very much like a seamless handoff. They're integrated into the credit system right now.
No real brand changes or, you know, anything like that. And, you know, again, Tom, appreciate the commentary that they're already starting to contribute, but just wanted to get an early read on the integration now that we're a few months in post-close and kind of what you're most excited about with them at this point.
Sure. Yeah, I mean to start with our model. Um, you know, we we keep the the name, it's a 100-year-old Bank in terms of minimizing disruption. We've, we keep the people. We have the same leadership in place.
Randall M. Chesler: And we're very, very mindful of making sure that they have all the tools they need to succeed. In terms of being excited about it, I mean, the franchise has been and still is extremely well-positioned in that market. They've got a great legacy base in East Texas with Mount Pleasant as the centerpiece there, but a lot of very, very good markets. And then they're exposed to some very strong growth markets with very good teams in place. So Dallas-Fort Worth, College Station, Houston, Austin. And so I think the opportunity, and they really just have scratched the surface there. That's probably the most exciting thing is as we give them some sophisticated tools. So we're giving them our automated commercial loan processing system. That's going to create some productivity, some improvement in how we can serve customers there.
Randall M. Chesler: And we're very, very mindful of making sure that they have all the tools they need to succeed. In terms of being excited about it, I mean, the franchise has been and still is extremely well-positioned in that market. They've got a great legacy base in East Texas with Mount Pleasant as the centerpiece there, but a lot of very, very good markets. And then they're exposed to some very strong growth markets with very good teams in place. So Dallas-Fort Worth, College Station, Houston, Austin. And so I think the opportunity, and they really just have scratched the surface there. That's probably the most exciting thing is as we give them some sophisticated tools. So we're giving them our automated commercial loan processing system. That's going to create some productivity, some improvement in how we can serve customers there.
And so, um, that is, you know, very, very helpful compared to some of the other transitions ongoing in the market down there. We think that we're extremely well positioned, um, with customers and employees. So that part, you know, just setting the stage with the model is very, very, uh, helpful and positive from our standpoint. Um, it's been a great fit. I think we've noticed that from the beginning and talked about that, the culture fit. Certainly on the credit side, Tom has done a lot of work, um, and it's a very good fit, so it looks very much like a seamless handoff. Uh, they're integrated into the credit system right now, um, and we're very, very mindful of, uh, making sure that, um, they have all the tools they need to succeed. In terms of being excited about it, I mean, it's, um, the franchise, um, has been
And still is extremely well positioned in that market. They've got a great legacy base in East Texas.
Randall M. Chesler: And then much bigger balance sheets, so an ability to take care of customers, bring back relationships that had to be handed off from a $3 billion bank to a $30 billion bank. So all those things, David, we think will be really, really nice tailwinds going forward.
Randall M. Chesler: And then much bigger balance sheets, so an ability to take care of customers, bring back relationships that had to be handed off from a $3 billion bank to a $30 billion bank. So all those things, David, we think will be really, really nice tailwinds going forward.
Uh, uh, with Mount Pleasant as the centerpiece there, but a lot of very, very good markets, um, and then they're exposed to some very strong growth markets, um, with very good teams in place. So Dallas-Fort Worth, uh, College Station, Houston, Austin. Um, and so I think the opportunity— and they've really just scratched the surface there. That's probably the most exciting thing is as we give them some, uh, sophisticated tools. So we're giving them our, um, automated commercial loan, uh, processing system. Uh, that's going to create some productivity, some improvement in, um, how we can serve customers there.
[Analyst] (Raymond James): Okay. That's great. And then I don't want to beat a dead horse in the margin. You guys have been very clear on the near-term dynamics, but if I think longer term, just given the strength of your core deposit base, you've historically operated pre-pandemic. You had a margin in the mid-4% realm. I just wanted to get your thoughts on if that's still an achievable level. Again, based on the backbook repricing and securities tailwinds even into 2027, would you still expect fairly robust margin expansion in 2027?
David Feaster: Okay. That's great. And then I don't want to beat a dead horse in the margin. You guys have been very clear on the near-term dynamics, but if I think longer term, just given the strength of your core deposit base, you've historically operated pre-pandemic. You had a margin in the mid-4% realm. I just wanted to get your thoughts on if that's still an achievable level. Again, based on the backbook repricing and securities tailwinds even into 2027, would you still expect fairly robust margin expansion in 2027?
And then, you know, much bigger balance sheet. So, an ability to take care of customers, uh, bring back relationships that had to be handed off from a $3 billion bank to a $30 billion bank. So, um, all those things, David, we think will be really, really nice tailwinds going forward.
Okay, that's great. And then, you know, I don't want to beat a dead horse in the margin you, you guys have been very clear on the near-term Dynamics, but if if, I think longer term, you know, just given the strength of your core deposit base, you've historically operated, you had a pre-pandemic, you had a margin in the mid 4% realm. I just wanted to get your thoughts on if that's still an achievable level. Uh, you know, again based on the bakbuk repricing and securities Tailwind, even in into 2027, would you still expect fairly robust margin expansion? You know, in 27.
Ron Copher: Yeah, David, we do see continued expansion. Whether we get to 4.5, let's get to 4 first and then work and build on that progress. But just from what I see ahead of us right now, yeah, I could see us growing beyond that 4% in 2027. Absolutely.
Ron Copher: Yeah, David, we do see continued expansion. Whether we get to 4.5, let's get to 4 first and then work and build on that progress. But just from what I see ahead of us right now, yeah, I could see us growing beyond that 4% in 2027. Absolutely.
David Feaster: Okay. That's terrific. Thanks, everybody.
Uh, yeah, David. We do, we do, see continued continued expansion, whether we get to 4 and a half, you know, I let's let's get to 4 first and then and then work and build on on that progress. Um, but just from what I see ahead of us right now. Uh, yeah I I I could see us grow growing beyond that 4%, uh, in in 27, absolutely.
Okay, that's terrific. Thanks everybody.
Randall M. Chesler: Welcome.
Randall M. Chesler: Welcome.
Operator: Thank you. Our next question comes from Matthew Clark of Piper Sandler. Your line is open.
Operator: Thank you. Our next question comes from Matthew Clark of Piper Sandler. Your line is open.
Welcome.
Thank you.
And our next question comes from Matthew Clark of Piper Sandler. Your line is open.
[Analyst] (Piper Sandler): Thanks. I thought my hand was raised. I just want to clarify the expense run rate for the upcoming quarter, the guide. Did you say 189 to 190 or 189 to 193?
Matthew Clark: Thanks. I thought my hand was raised. I just want to clarify the expense run rate for the upcoming quarter, the guide. Did you say 189 to 190 or 189 to 193?
Thanks. I thought my hand was raised. Um,
Ron Copher: 193. Ron here. 189 to 193.
Ron Copher: 193. Ron here. 189 to 193.
[Analyst] (Piper Sandler): Got it. Okay. Thanks. And then on your deposit costs this quarter, they ticked up a little bit here. I'm assuming that's from the Guaranty deal, or was there something else going on? And I assume we're going to see the deposit costs trend back down from here, though.
Matthew Clark: Got it. Okay. Thanks. And then on your deposit costs this quarter, they ticked up a little bit here. I'm assuming that's from the Guaranty deal, or was there something else going on? And I assume we're going to see the deposit costs trend back down from here, though.
Uh, I just want to clarify the expense run rate for the upcoming quarter of the guide. Did you say $189 to $190, or $189 to $193? 193? Ron here—$189 to $193.
Got it, okay. Thanks.
um,
And then on your deposit cost this quarter, they picked up a little bit here. I'm assuming that's from the guaranteed deal, or was there something else going on?
Ron Copher: That's exactly right. Yeah. The uptick that you saw was from the acquisition. And we do expect to see declining deposit costs from here.
Ron Copher: That's exactly right. Yeah. The uptick that you saw was from the acquisition. And we do expect to see declining deposit costs from here.
I assume we're going to see the deposit cost trend back down from here, though.
That's exactly, right. Yeah. The, the uptick that you saw was from the the acquisition, uh, and we do expect that the, uh, declining deposit cost, uh, from from here.
[Analyst] (Piper Sandler): Okay. Got it. And then for the cost saves, did you get any cost saves? I think it was expected to be a little over $17 million from Guaranty. Did you get any of the cost saves out this quarter, or is it all on the come beginning in Q1?
Matthew Clark: Okay. Got it. And then for the cost saves, did you get any cost saves? I think it was expected to be a little over $17 million from Guaranty. Did you get any of the cost saves out this quarter, or is it all on the come beginning in Q1?
Okay, got it.
And then,
on the, um,
For the cost saves.
Out this quarter, or is it all?
Ron Copher: Yeah. Ron here. It will really take hold after the conversion. So that's really where it is. We've been just doing a lot of things, as Randy pointed out, but they will show up. They've been very, very mindful of that. We're working with them. Back to Randy's point, integration coordination going very well.
Ron Copher: Yeah. Ron here. It will really take hold after the conversion. So that's really where it is. We've been just doing a lot of things, as Randy pointed out, but they will show up. They've been very, very mindful of that. We're working with them. Back to Randy's point, integration coordination going very well.
On the come, beginning in Q1.
Yeah, Ron, here it will really take hold after the conversion, and so that's—that's...
Really, where it is. We've been, uh, just doing a lot of things, as Randy pointed out, but they will show up. They've been very, very, um, mindful of that, and we're working with them. Back to Randy's point, integration coordination is going very well.
[Analyst] (Piper Sandler): Yep. Good. Okay. And then on the Net Charge-offs this quarter, I know we're splitting hairs at 12 basis points, but up from the prior quarter, anything unusual in those charge-offs? Anything outsized, or is that kind of more normal, you think?
Matthew Clark: Yep. Good. Okay. And then on the Net Charge-offs this quarter, I know we're splitting hairs at 12 basis points, but up from the prior quarter, anything unusual in those charge-offs? Anything outsized, or is that kind of more normal, you think?
Yep, good. Okay, and then, um,
On the, uh, net charge-off this quarter—I know we're splitting hairs at 12 basis points, but, you know, up from the prior quarter—anything unusual in that, uh,
Randall M. Chesler: No, more normal and typical for year-end cleanup. We typically, as we continue to scrub the portfolio, if there's an opportunity to exit a credit, we'll do it. So it's normal. Nothing outsized, nothing unusual.
Randall M. Chesler: No, more normal and typical for year-end cleanup. We typically, as we continue to scrub the portfolio, if there's an opportunity to exit a credit, we'll do it. So it's normal. Nothing outsized, nothing unusual.
In those charge-offs, anything outside, or is that kind of more normal, you think? No, more normal and typical for year-end cleanup.
We typically, you know, as we continue to scrub the portfolio, if there's an opportunity to exit a credit, we'll do it. Uh, so it's normal. No, nothing outside. Nothing unusual.
Operator: Thank you. This concludes our question-and-answer session. I would like to turn it back to Randall Chesler for closing remarks.
Operator: Thank you. This concludes our question-and-answer session. I would like to turn it back to Randall Chesler for closing remarks.
You're welcome.
Thank you. This concludes our question-and-answer session. I would like to turn it back to Randy Chesler for closing remarks.
Randall M. Chesler: Very good. Thank you, DB, and thank you, everybody, for dialing in today. Very excited about the trends here and the growth into 2026. So we appreciate everybody dialing in. Have a great Friday and a great weekend. Thank you.
Randall M. Chesler: Very good. Thank you, DB, and thank you, everybody, for dialing in today. Very excited about the trends here and the growth into 2026. So we appreciate everybody dialing in. Have a great Friday and a great weekend. Thank you.
Very good. Thank you, DV. And thank you, everybody, for dialing in today. Uh, you know, very excited about, um, the trends here. And
Growth into 26.
So, we appreciate everybody dialing in. Have a great, uh, Friday and a great weekend. Thank you.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
This concludes today's conference call. Thank you for participating, and you may now disconnect.
