Q2 2026 Glacier Bancorp Inc Earnings Call

July 24, 2026

Operator: Welcome to the Glacier Bancorp Q2 2026 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 one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Randy Chesler, President and CEO of Glacier Bancorp. Please go ahead.

Speaker #1: 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 that your hand is raised.

Speaker #1: To withdraw your question, please press star one one 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.

Speaker #1: President and CEO of Glacier Bancorp, please go ahead.

Speaker #2: Good morning, and thank you for joining us today. With me here in Kalispell are Ron Cofer, our Chief Financial Officer; Tom Dolan, our Chief Credit Administrator; Angela Dosi, our Chief Accounting Officer; and Byron Pollan, our Treasurer.

Randall M. Chesler: Well, good morning, 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 Dosey, 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 starting on page 13 of our press release, and we encourage you to review this section. Last night, we issued our earnings release for Q2, and we believe it represents another quarter of strong results. Net income was $97.9 million for Q2, up 19% from Q1 and up 85% from Q2 of last year. Diluted earnings per share were $0.75, up 19% from Q1 and up 67% from the prior year Q2.

Randy Chesler: Well, good morning, 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 Dosey, 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 starting on page 13 of our press release, and we encourage you to review this section. Last night, we issued our earnings release for Q2, and we believe it represents another quarter of strong results. Net income was $97.9 million for Q2, up 19% from Q1 and up 85% from Q2 of last year. Diluted earnings per share were $0.75, up 19% from Q1 and up 67% from the prior year Q2.

Speaker #2: I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined starting on page 13 of our press release, and we encourage you to review this section.

Speaker #2: Last night, we issued our earnings release for the second quarter, and we believe it represents another quarter of strong results. Net income was $97.9 million for the second quarter, up 19% from the prior quarter and up 85% from the second quarter of last year.

Speaker #2: Diluted earnings per share were $0.75, up 19% from the prior quarter and up 67% from the prior year's second quarter. A key driver of our strong performance continues to be net interest income and margin expansion.

Randall M. Chesler: A key driver of our strong performance continues to be net interest income and margin expansion. Net interest income increased to $276 million, or 3% from Q1, and up 33% from Q2 of last year. Our tax-equivalent net interest margin expanded to 3.9%, up 10 basis points from Q1 and up 69 basis points from the prior year Q2. From a pre-tax, pre-provision net revenue perspective, our PPNR for Q2 was $130.8 million, an increase of 23% from Q1 and an increase of 53% from Q2 a year ago. We also saw continued improvement in our funding profile. The total cost of funding declined to 1.33%, down 7 basis points from Q1 and down 30 basis points from Q2 of last year.

Randy Chesler: A key driver of our strong performance continues to be net interest income and margin expansion. Net interest income increased to $276 million, or 3% from Q1, and up 33% from Q2 of last year. Our tax-equivalent net interest margin expanded to 3.9%, up 10 basis points from Q1 and up 69 basis points from the prior year Q2. From a pre-tax, pre-provision net revenue perspective, our PPNR for Q2 was $130.8 million, an increase of 23% from Q1 and an increase of 53% from Q2 a year ago. We also saw continued improvement in our funding profile. The total cost of funding declined to 1.33%, down 7 basis points from Q1 and down 30 basis points from Q2 of last year.

Speaker #2: Net interest income increased to $276 million, up 3% from the first quarter and up 33% from the second quarter of last year. Our tax equivalent net interest margin expanded to 3.90%, up 10 basis points from the first quarter and up 69 basis points from the prior year's second quarter.

Speaker #2: From a pre-tax, pre-provision net revenue perspective, our PPNR for the second quarter was $130.8 million, an increase of 23% from the prior quarter and an increase of 53% from the second quarter a year ago.

Speaker #2: We also saw continued improvement in our funding profile. The total cost of funding declined to 1.33%, down 7 basis points from the prior quarter and down 30 basis points from the second quarter of last year.

Randall M. Chesler: Core deposit cost, including non-interest-bearing deposits, was 1.18%, down 2 basis points from Q1. Non-interest-bearing deposits remained at 30% of total deposits for the quarter, consistent with Q1 and Q2 a year ago. Turning to the balance sheet, loans ended the quarter at $21.4 billion, increasing $330 million or 6% annualized from Q1. Loan growth was broad-based and reflected our continued focus on disciplined production in attractive markets. Total average deposits were $24.5 billion for the quarter, up $112 million or 2% annualized from Q1. Period-end deposits were $24.7 billion, down slightly from Q1, but overall deposit levels remain stable and continue to comfortably support our liquidity and funding strategy. Credit quality remains excellent, consistent with our disciplined underwriting culture.

Randy Chesler: Core deposit cost, including non-interest-bearing deposits, was 1.18%, down 2 basis points from Q1. Non-interest-bearing deposits remained at 30% of total deposits for the quarter, consistent with Q1 and Q2 a year ago. Turning to the balance sheet, loans ended the quarter at $21.4 billion, increasing $330 million or 6% annualized from Q1. Loan growth was broad-based and reflected our continued focus on disciplined production in attractive markets. Total average deposits were $24.5 billion for the quarter, up $112 million or 2% annualized from Q1. Period-end deposits were $24.7 billion, down slightly from Q1, but overall deposit levels remain stable and continue to comfortably support our liquidity and funding strategy. Credit quality remains excellent, consistent with our disciplined underwriting culture.

Speaker #2: Core deposit cost, including non-interest-bearing deposits, was 1.18%, down 2 basis points from the prior quarter. Non-interest-bearing deposits remained at 30% of total deposits for the quarter, consistent with the last quarter and the second quarter a year ago.

Speaker #2: Turning to the balance sheet, loans ended the quarter at $21.4 billion, increasing $330 million, or 6% annualized, from the first quarter. Loan growth was broad-based and reflected our continued focus on disciplined production and attractive markets.

Speaker #2: Total average deposits were $24.5 billion for the quarter, up $112 million, or 2% annualized, from the prior quarter. Period-end deposits were $24.7 billion, down slightly from the prior quarter, but overall deposit levels remained stable and continue to comfortably support our liquidity and funding strategy.

Speaker #2: Credit quality remains excellent, consistent with our disciplined underwriting culture. Early-stage delinquencies declined from the prior quarter, while non-performing assets increased modestly but remained low as a percentage of subsidiary assets.

Randall M. Chesler: Early-stage delinquencies declined from the prior quarter, while non-performing assets increased modestly but remain low as a percentage of subsidiary assets. Our allowance for credit loss at 1.22% of total loans reflects our conservative and consistent approach to reserving. Expenses were well controlled in the quarter. Acquisition-related expenses declined meaningfully from the Q1, and the operating efficiency ratio improved to 56.21%, compared to 63.05% in the prior quarter. For the H1 of the year, net income was $180 million, an increase of 68% from the prior year H1. Diluted earnings per share for the H1 of 2026 was $1.38 per share, an increase of 48% from the prior year H1. Net interest income for the H1 of 2026 was $545 million, an increase of 37% from the prior year H1.

Randy Chesler: Early-stage delinquencies declined from the prior quarter, while non-performing assets increased modestly but remain low as a percentage of subsidiary assets. Our allowance for credit loss at 1.22% of total loans reflects our conservative and consistent approach to reserving. Expenses were well controlled in the quarter. Acquisition-related expenses declined meaningfully from the Q1, and the operating efficiency ratio improved to 56.21%, compared to 63.05% in the prior quarter. For the H1 of the year, net income was $180 million, an increase of 68% from the prior year H1. Diluted earnings per share for the H1 of 2026 was $1.38 per share, an increase of 48% from the prior year H1. Net interest income for the H1 of 2026 was $545 million, an increase of 37% from the prior year H1.

Speaker #2: Our allowance for credit loss at 1.22% of total loans reflects our conservative and consistent approach to reserving. Expenses were well controlled in the quarter.

Speaker #2: Acquisition-related expenses declined meaningfully from the first quarter, and the operating efficiency ratio improved to 56.21% compared to 63.05% in the prior quarter. For the first half of the year, net income was $180 million, an increase of 68% from the prior year's first half.

Speaker #2: Diluted earnings per share for the first half of 2026 was $1.38 per share, an increase of 48% from the prior year's first half. Net interest income for the first half of 2026 was $545 million, an increase of 37% from the prior year's first half.

Speaker #2: The loan portfolio increased $2.83 billion, or 15%, from the prior year's first half. Total deposits increased $3.03 billion, or 14%, from the prior year's first half.

Randall M. Chesler: The loan portfolio increased $2.831 billion, or 15%, from the prior year H1. Total deposits increased $3.026 billion, or 14%, from the prior year H1. The net interest margin as a percentage of earning assets on a tax-equivalent basis for the H1 of 2026 was 3.85%, an increase of 73 basis points from the prior year H1. These results clearly show the earnings and operating momentum that has occurred across the company. During the quarter, the board declared a quarterly dividend of $0.33 per share. This marks our 165th consecutive quarterly dividend, and we have increased the dividend 49 times over our history. We are encouraged by the results for the Q2 and through the H1 of the year.

Randy Chesler: The loan portfolio increased $2.831 billion, or 15%, from the prior year H1. Total deposits increased $3.026 billion, or 14%, from the prior year H1. The net interest margin as a percentage of earning assets on a tax-equivalent basis for the H1 of 2026 was 3.85%, an increase of 73 basis points from the prior year H1. These results clearly show the earnings and operating momentum that has occurred across the company. During the quarter, the board declared a quarterly dividend of $0.33 per share. This marks our 165th consecutive quarterly dividend, and we have increased the dividend 49 times over our history. We are encouraged by the results for the Q2 and through the H1 of the year.

Speaker #2: The net interest margin as a percentage of earning assets on a tax-equivalent basis for the first half of 2026 was 3.85%, an increase of 73 basis points from the prior year's first half.

Speaker #2: These results clearly show the earnings and operating momentum that has occurred across the company. During the quarter, the Board declared a quarterly dividend of $0.33 per share. This marks our 165th consecutive quarterly dividend, and we have increased the dividend 49 times over our history.

Speaker #2: We are encouraged by the results for the second quarter and through the first half of the year. The continued progress in margin, efficiency, and disciplined balance sheet growth, driven by Glacier's community banking model, gives us a solid foundation for the remainder of 2026.

Randall M. Chesler: The continued progress in margin, efficiency, and disciplined balance sheet growth, driven by Glacier's community banking model, give us a solid foundation for the remainder of 2026. With that, I will ask the operator to open the line for any questions.

Randy Chesler: The continued progress in margin, efficiency, and disciplined balance sheet growth, driven by Glacier's community banking model, give us a solid foundation for the remainder of 2026. With that, I will ask the operator to open the line for any questions.

Speaker #2: With that, I will ask the operator to open the line for any questions.

Speaker #1: 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.

Operator: Thank you. As a reminder, to ask a question, please press * one one on your telephone and wait for your name to be announced. To withdraw your question, please press * one one again. Please stand by while we compile the Q&A roster. Our first question comes from Matthew Clark of Piper Sandler. Your line is open.

Speaker #1: Please stand by while we compile the Q&A roster. Our first question comes from Matthew Clark of Piper Sandler. Your line is open.

Speaker #3: Hey, good morning, everyone.

Matthew Clark: Hey, good morning, everyone.

Speaker #2: Good morning.

Randall M. Chesler: Good morning.

Randy Chesler: Good morning.

Matthew Clark: Just wanted to start on the funding side. Deposit cost down nicely again here. Guess it'd be helpful to have the spot rate at the end of June and then your outlook on deposit costs in general, just assuming the Fed remains on hold and how the competition is these days?

Speaker #3: Just wanted to start on the funding side. Deposit costs are down nicely again here. I guess it'd be helpful to have the spot rate at the end of June and then your outlook on deposit costs in general, just assuming the Fed remains on hold and, you know, how the competition is these days.

Speaker #4: Sure. Matthew, this is Byron. You're looking for the spot cost at the end of June. On June 30, our deposit cost was $1.18, in line with our average for the quarter.

Byron Pollan: Sure, Matthew, this is Byron. You're looking for the spot cost at the end of June. 30 June, our deposit cost was 118, in line with our average for the quarter. In terms of our outlook, I do think our deposit costs will likely be stable from here. Of course, that depends on what the Fed does. Assuming Fed on hold, as you mentioned, I would think that we would just kind of maintain this level of deposit cost going forward. Now, if the Fed does hike rates at some point later in the year, we'd have to adjust that outlook a little bit. I think from now, a good outlook is just stable from here.

Speaker #4: So, in terms of our outlook, I do think our deposit cost will likely be stable from here. Of course, that depends on what the Fed does, but assuming, you know, the Fed is on hold, as you mentioned, I would think that we would just kind of maintain this level of deposit cost going forward.

Speaker #4: Now, if the Fed does hike rates at some point later in the year, we would have to adjust that outlook a little bit, but I think for now, a good outlook is just to stay stable from here.

Speaker #3: Okay. And then just on the loan side, loan growth stepped up here. I think Q3 tends to be a seasonally strong one for you, but just wanted to touch base on the pipeline and your outlook for growth.

Matthew Clark: Okay. Just on the loan side, loan growth stepped up here. I think Q3 tends to be a seasonally strong one for you, wanted to touch base on the pipeline and your outlook for growth.

Speaker #2: Yeah. Matthew, this is Tom. Yeah, second and third quarter are typically our stronger quarters in the year, you know, more so than the fourth and the first quarter.

Tom Dolan: Yeah. Matthew, this is Tom. Yeah. Q2 and Q3 are typically our stronger quarters in the year, more so than Q4 and Q1. We've seen that for the last couple of years. I don't see anything that would really change that. Pipelines still remain very healthy. We're seeing pull-through, we're seeing back build. Some of the tailwinds we also saw in Q2 with construction draws and entering into the ag growth season. That will continue into Q3 as well.

Speaker #2: We've seen that for the last couple of years. I don't see anything that would really change that. But the pipeline has still remained very healthy. We're seeing pull-through, we're seeing back build.

Speaker #2: And, you know, some of the tailwinds we also saw in the second quarter with construction draws and entering into the ag growth season—you know, that will continue into the third quarter as well.

Speaker #3: Okay. And then maybe one for Ron. Your expenses came in a lot better than expected. I just wanted to get the updated guide for the second half of the year.

Matthew Clark: Okay. Maybe one for Ron. Your expenses came in a lot better than expected. I just wanted to get the updated guide for H2.

Speaker #2: Yeah, the updated guide. We're going to stick with the quarterly guide I gave for Q2, so that will be $187 million to $192 million. We recognize we came in lower than that, but some of the discretionary spending could come back in the second half of the year.

Byron Pollan: Yeah. The updated guide, we're going to stick with the quarterly guide I gave for Q2, that'll be $187 million to 192 million. We recognize we came in lower than that, some of the discretionary spending could come back in H2, we just allow for that. Overall, very good control expenses.

Speaker #2: So, we're not—we just allow for that. But overall, very, very good control of expenses.

Speaker #3: Great. Thank you.

Matthew Clark: Great. Thank you.

Speaker #1: Thank you. And our next question comes from Jeff Rulas 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.

Speaker #5: Thank you. Good morning. I have a follow-up question on loan growth. Randy, you mentioned it's pretty broad-based. I'd just like to unpack that a little bit.

Jeff Rulis: Thank you. Good morning. I guess a question on the— a follow on the loan growth. Randy, you mentioned pretty broad-based. Just to unpack that a little bit, in Q1, you had pretty strong growth out of Texas. It was kind of the lion's share of the growth. Just wanted to kind of double down on the geography contribution this quarter of the loan growth.

Speaker #5: In Q1, you had pretty strong growth out of Texas; it was kind of the lion's share of the growth. Just wanted to kind of double down on the geography contribution this quarter.

Speaker #5: of, of the loan growth.

Randall M. Chesler: Sure. As we've stated, we're really operating in two regions, Southwest, Mountain West. Southwest continues to do very well. I think they're rebuilding the pipeline after a very strong Q1. We see really good trends there. In the Mountain West, they had a very strong quarter. I think both doing very well. Yeah, we expect to see that continue.

Randy Chesler: Sure. As we've stated, we're really operating in two regions, Southwest, Mountain West. Southwest continues to do very well. I think they're rebuilding the pipeline after a very strong Q1. We see really good trends there. In the Mountain West, they had a very strong quarter. I think both doing very well. Yeah, we expect to see that continue.

Speaker #2: Sure. So, you know, as we've stated, we're really operating in two regions: Southwest and Mountain West. Southwest continues to do very well. I think they are rebuilding the pipeline after a very strong first quarter.

Speaker #2: So, but we see really, really good trends there. And, in the Mountain West, they had a very strong quarter, so I think both are doing very well.

Speaker #2: So, yeah, we expect to see that continue.

Speaker #5: Okay. So that was maybe, they flipped, strengths in, in the quarter in terms of net production as, as Southwest rebuilds and, and but going forward, it, it looks like a strong pipeline across the region.

Jeff Rulis: Okay. That was maybe they flipped strengths in the quarter in terms of net production as Southwest rebuilds. Going forward, it looks like a strong pipeline across the region. Is that?

Speaker #5: Is that.

Randall M. Chesler: Exactly.

Randy Chesler: Exactly.

Speaker #2: Exactly. Yep. You exactly right.

Jeff Rulis: Okay.

Randall M. Chesler: Yep. Exactly right.

Randy Chesler: Yep. Exactly right.

Speaker #5: Got it. And Randy, I guess I'd, I'd check in on the it's been a bit on the on the M&A side. I a, a quiet start nationally.

Jeff Rulis: Got it. Randy, I guess a check-in on the, it's been a bit on the M&A side, a quiet start nationally.

Randall M. Chesler: Yep

Randy Chesler: Yep

Jeff Rulis: We're starting to see a pickup recently. I just, I guess versus last quarter at this time versus now, any more active discussions? I know you hold a lot of them, but just want to see where we sit on the M&A side.

Speaker #5: But we are starting to see a pickup recently. And I just—versus last quarter at this time, versus now, are there any more active discussions?

Speaker #5: I know you've— you hold a lot of them, but just want to see where we sit on the M&A side.

Speaker #2: Sure. Yeah, I—you know, maybe separate that into two pieces. There's our internal discussions that we have, meaning it's not an official sale; we're talking to people.

Randall M. Chesler: Sure. Yeah. I'd maybe separate that into two pieces. There's our internal discussions that we have, meaning it's not an official sale. We're talking to people. Those continue to move along at a good pace. What I still see is somewhat muted is the investment banker pipeline production of deals and where people are officially coming to market. We measure that by the phone calls we get letting us know about those things. Still seems a bit muted, but from the talk that I've had with the investment banker, I think that we'll probably start to see that increase a bit towards the end of the year. Overall, compared to Q1, I'd say about the same, Jeff. Really, probably still a bit muted.

Randy Chesler: Sure. Yeah. I'd maybe separate that into two pieces. There's our internal discussions that we have, meaning it's not an official sale. We're talking to people. Those continue to move along at a good pace. What I still see is somewhat muted is the investment banker pipeline production of deals and where people are officially coming to market. We measure that by the phone calls we get letting us know about those things. Still seems a bit muted, but from the talk that I've had with the investment banker, I think that we'll probably start to see that increase a bit towards the end of the year. Overall, compared to Q1, I'd say about the same, Jeff. Really, probably still a bit muted.

Speaker #2: Those continue to move along at a good pace. What I still see as somewhat muted is the investment banker pipeline production of deals, and where people are officially coming to market.

Speaker #2: And we measure that by the phone calls we get, letting us know about those things. Still seems a bit muted, but from the talk, you know, that I've had with the investment banker, I think that, you know, we'll probably start to see that increase a bit towards the end of the year. But overall, compared to first quarter, I'd say about the same.

Speaker #2: Jeff, really, you know, probably still a bit muted.

Speaker #5: Okay. appreciate it. And, and sorry, if I could slip in a last one, I just on the, the earning asset balance, the, the mix and, and I guess trying to get a sense for, you know, accelerating loan growth, but, you know, but I guess your intentions on the securities portfolio and, and, maybe expectations for start to see some earning asset, growth, if you could comment on that.

Jeff Rulis: Okay. Appreciate it. Sorry, if I could slip in a last one.

Randall M. Chesler: Sure.

Randy Chesler: Sure.

Jeff Rulis: On the earning asset balance, the mix and I guess trying to get a sense for accelerating loan growth, but I guess your intentions on the securities portfolio and maybe expectations for start to see some earning asset growth. If you could comment on that.

Randall M. Chesler: Sure. We'll have Byron comment on that. We did make some purchases this quarter, so we're kind of slowly wading back into the purchase of investments, but I'll let Byron give you some color on that.

Randy Chesler: Sure. We'll have Byron comment on that. We did make some purchases this quarter, so we're kind of slowly wading back into the purchase of investments, but I'll let Byron give you some color on that.

Speaker #2: Sure. And we'll have Byron comment on that. We did we did make some purchases this quarter, so we've kind of slowly waiting back into the, investment purchase purchase of investments, but I'll let Byron give you some color on that.

Speaker #4: Yeah, as Randy mentioned, we did dip our toes back into the bond market. We purchased about $250 million of bonds in the quarter.

Byron Pollan: Yeah, as Randy mentioned, we did dip our toes back into the bond market. We purchased about $250 million of bonds in the quarter. I expect we'll continue purchasing, putting some cash to work, going forward. In terms of growth, I do see our AEA will expand from here. I think what you saw even in Q2 with the decline in AEA, it's still a little bit of an echo of the de-leveraging that we had going on. We talked a lot about the pay-down of our FHLB advances. That last maturity, that last payoff didn't happen until late in Q1. So when you look at the averages of Q1 versus the average of Q2, that still had an impact. Now that's complete. I would expect from here, our AEA will increase in Q3 and Q4.

Speaker #4: And I, and I expect we'll continue, we'll continue purchasing, putting, putting some cash to work, going forward. in terms of growth, I, I do see, our AEA will, will expand from here.

Speaker #4: I think what you saw in the decline in AEA is still a little bit of an echo of the deleveraging that we had going on.

Speaker #4: We talked a lot about the paydown of our FHLB advances, and that last maturity, that last payoff, didn't happen until late in Q1.

Speaker #4: And so, when you look at the averages of Q1 versus the average of Q2, that still had an impact. Now, that's complete.

Speaker #4: I would expect from here, our AEA will, will, will increase in Q3 and Q4.

Speaker #5: Great. thanks for the color.

Jeff Rulis: Great. Thanks for the color.

Speaker #1: Thank you. And our next question comes from Kelly Motta of KBW. Your line is open.

Operator: Thank you. Our next question comes from Kelly Motta of KBW. Your line is open.

Speaker #6: Hey, good morning. Thanks for the question. I would love to talk a bit about the margin. You had a few things working in kind of a negative direction this quarter.

Kelly Motta: Hey, good morning. Thanks for the question.

Randall M. Chesler: Good morning.

Randy Chesler: Good morning.

Kelly Motta: I would love to talk a bit about the margin. You had a few things working in kind of a negative direction this quarter, one being the non-accrual interest reversal and then a lower level of accretion. If you had a similar level to last quarter, you would've actually come in the mid 3.9. I'm just wondering, as we think about that exit 4% margin, it feels like that's in the range. Any updates on how you're thinking about the exit margin from here? I know the accretion can swing around, so some commentary on what's a normal level, at least for modeling purposes, would be helpful. Thank you.

Speaker #6: One being the non-accrual interest reversal, and then a lower level of accretion. So, if you had had a similar level to last quarter, you would be closer to—you would have actually come in—in the mid-3.9% range.

Speaker #6: So I'm just wondering, you know, as we think about that exit 4% margin, it feels like that's in the range. Are there any updates on how you're thinking about the exit margin from here?

Speaker #6: And maybe some—I know the accretion can swing around—so some commentary on what's a normal level, at least for modeling purposes, would be helpful.

Speaker #6: Thank you.

Speaker #4: Sure, Kelly. Thank you, for the question. yeah, we're very, very pleased that our margin continues to expand, and I, and I and it, we expect that it will continue to, to grow.

Byron Pollan: Sure, Kelly. Thank you for the question. Yeah, we're very pleased that our margin continues to expand, and we expect that it will continue to grow. When you're looking at that 4%, I do think we'll hit that 4% level early in Q4 of 2026, and we'll keep going from there. When you think about an exit margin for 2026, I do expect we'll be north of 4%. I do think what you saw, some of those headwinds were a little bit of an anomaly. You can never really forecast the timing of payoffs and things like that. It feels to me like that impact that you saw, that headwind was a little bit elevated. We're not expecting that that level will continue going forward. I think the level of discount accretion you saw in Q2 is probably a more normal level to assume going forward.

Speaker #4: When you're looking at, you know, that 4%, I do think we'll hit that 4% level early in the fourth quarter of 2026, and we'll keep going from there.

Speaker #4: So when you think about an exit of, an exit margin for '26, I, I do expect we'll be north of, of 4%. I do think, you know, what you saw, some of those headwinds were a little bit of an anomaly.

Speaker #4: I am an anomaly. You can never really, you know, forecast the timing of payoffs and things like that, but it feels to me like that impact that you saw—that headwind—was a little bit elevated.

Speaker #4: We're not expecting that that level will continue going forward. I think the level of discount accretion you saw in Q2 was probably a more normal level to assume going forward.

Speaker #6: Okay, that's really helpful. And I appreciate the color on the securities reinvestment. Can you provide additional detail on what you're seeing on loan pricing, and any commentary on the competitive dynamics impacting new loan production yields either way?

Kelly Motta: Okay. That's really helpful. I appreciate the color on the securities reinvestment. Can you provide additional detail on what you're seeing on loan pricing and any commentary on the competitive dynamics impacting new loan production yields either way? Thank you.

Speaker #6: Thank you.

Tom Dolan: Sure. Yeah, Kelly, this is Tom. We're still seeing production yields in excess of 6.5%. We saw that consistently throughout the quarter. From a competitive standpoint, that probably is the largest competitive factor, is the pricing, and we see it more in the large metro areas versus the smaller markets where we have a more commanding market share. I think that trend is continuing and I think that's probably going to continue into Q3. We're still not seeing a lot of competition on underwriting discipline or structure, which is good, at least in the spaces that we operate in. Encouraged to see that it's still primarily focused on pricing, which really hasn't been a change over the last couple of years.

Speaker #2: Sure. Yeah, Kelly, this is Tom. We're still seeing production yields in excess of 6.5%. You know, we saw that consistently throughout the quarter.

Speaker #2: from a from a competitive standpoint, you know, that probably is the, the largest competitive factor is the pricing, and we see it more in the large metro areas versus the smaller markets where we have a more commanding market share.

Speaker #2: I think that trend is, is continuing, and, you know, I think, you know, that's probably going to continue into the third quarter. We're still not seeing a lot of competition on, on underwriting discipline or structure, which is which is good.

Speaker #2: at least in the in the spaces that we, we operate in. So, you know, encourage encourage to see that. It's, it's still primarily focused on pricing, which really hasn't been a, a change over the last couple of years.

Speaker #6: Got it. That's helpful. That all sounds really encouraging. with, with these, these factors in mind, you were you were well above 4, you know, pre, pre-COVID, at least for a bit.

Kelly Motta: Got it. That's helpful. That all sounds really encouraging. With these factors in mind, you were well above 4% pre-COVID, at least for a bit. I know it's a little early to talk about 2027, but is there any preliminary thoughts on what, given the pretty meaningful tailwind of back-through pricing still to come, what a normalized margin means for Glacier over the longer term? Thank you.

Speaker #6: I know it's a little early to talk about '27, but is there any preliminary thoughts on what, given the pretty meaningful tailwind of back-through pricing still to come, what a normalized margin means for Glacier over the longer term?

Speaker #6: Thank you.

Speaker #4: yeah, Kelly, I do think, you know, as, as you mentioned, that there is a lot of momentum, in, in our asset, repricing. w you know, I do think longer term, I do think, about our margin in terms of a range, you know, between 4 and 4.5%, you know, more, more of our historical norm.

Byron Pollan: Yeah, Kelly, I do think, as you mentioned, that there is a lot of momentum in our asset repricing. Longer term, I do think about our margin in terms of a range between 4% and 4.5%, more of our historical norm. I do think there are things that can kind of bring us towards the higher end of that range. Given enough time, a friendly yield curve, a steeper yield curve would certainly be helpful. Meaningful loan growth, that always helps with the level of new production rates that Tom mentioned. That's going to lift our margin towards the higher end of that range. I do see that we'll continue to increase our margin throughout 2027. Ultimately, where it normalizes and where it kind of levels out, that remains to be seen, but I do see growth throughout next year as well.

Speaker #4: A-and I do think there are things that can kind of bring us towards the higher end of that range. given enough time, you know, a friendly yield curve, you know, a, a, a steep, steeper yield curve would certainly be helpful, you know, meaningful loan growth, you know, that always helps with the level of new production rates that Tom mentioned.

Speaker #4: that's, that's gonna lift our margin, you know, towards, towards the high end of that range. so I do I do see that we'll continue to increase our margin throughout, '27.

Speaker #4: Ultimately, you know, where it normalizes and where it kind of levels out, that remains to be seen, but I do see growth throughout next year as well.

Speaker #6: Super helpful. Thank you so much for all the color.

Kelly Motta: Super helpful. Thank you so much for all the color.

Speaker #1: Thank you. And as a reminder, if you have a question, please press *11. And our next question comes from Evan Kwiatkowski of Raymond James.

Operator: Thank you. As a reminder, if you have a question, please press star one one. Our next question comes from Evan Kwiatkowski of Raymond James. Your line is open.

Speaker #1: Your line is open.

Speaker #5: Hey, good morning, guys. It's Evan Allen for David.

Evan Kwiatkowski: Hey, good morning, guys. It's Evan on for David.

Speaker #2: Good morning.

Randall M. Chesler: Morning.

Randy Chesler: Morning.

Speaker #5: I just, firstly, wanted to touch on deposit competition across your footprint. I know you've said in the past that you're probably more insulated than others.

Evan Kwiatkowski: I firstly wanted to touch on maybe deposit competition across your footprint. I know you've said in the past you're probably more insulated than others based on your presence in more rural areas. I'm just curious how you view competitive funding cost pressures going forward and if there's been any change from your prior views. Thanks.

Speaker #5: Based on your presence in more rural footprint in more rural areas, but I'm just curious how you view competitive funding cost pressures, going forward, and if there's been any change from your prior views.

Speaker #5: Thanks.

Speaker #4: Yeah. Yeah, Evan, I don't see any change, in, in the level of competition. I think I think competition is, is strong. It always is.

Byron Pollan: Yeah. Evan, I don't see any change in the level of competition. I think competition is strong. It always is, but it's rational. There are always some outliers in our markets. Those outliers, they're not driving the market. As you saw our result, we were able to bring our deposit cost down a couple of basis points in Q2. From what I see, it appears to me that competition is rational.

Speaker #4: But, but it's rational. There are always some outliers, you know, in our market. But those outliers, they're not driving the market.

Speaker #4: and as you saw, you know, our result, we were able to bring our deposit costs down a couple of basis points, in Q2. So, you know, from, from, from what I see, you know, it, it, it appears to me that competition is, is, is, is rational.

Randall M. Chesler: Rational. The other thing I'd add on the market, 75% more rural, 25% more urban. It's both the nature of the market and our focus on the core relationship in those markets, which really drives the lower cost. We don't see those dynamics changing.

Randy Chesler: Rational. The other thing I'd add on the market, 75% more rural, 25% more urban. It's both the nature of the market and our focus on the core relationship in those markets, which really drives the lower cost. We don't see those dynamics changing.

Speaker #2: Rational. And the other thing I'd add on that, on the market: 75% more rural, 25% more urban. It's both the nature of the market and our focus on the core relationship in those markets, which really drives the lower cost.

Speaker #2: And we don't—we don't see those dynamics changing.

Speaker #5: That's really helpful. And then maybe just moving to credit—you know, I know there's a slight uptick in non-accruals, but trends seem really solid still.

Evan Kwiatkowski: That's really helpful. Maybe just moving to credit. I notice there's a slight uptick in non-accruals, trends seem really solid still. Just curious what you're seeing broadly, maybe what caused that uptick. Maybe if there's any sectors or segments that you're watching more closely than others.

Speaker #5: Just curious what you're seeing broadly, maybe what, you know, caused that uptick. And then maybe if there are any sectors or segments that you're watching more closely than others.

Tom Dolan: Sure. Yeah, this is Tom. I would classify it as stable overall. We're not seeing any specific industry or geography or asset class that's showing any outsized risk. I would say that if there's one segment we're still watching closely, it's been this way for over a year now. We are watching the ag book. 2025 ended up being stronger than we were anticipating. 2026 is off to a good start as well. Obviously there's been some headwinds in that industry that we're paying some attention to. I think going back to what Randy said about deposit aggregation, same thing on the loan side. We really try to bank the longtime operators in the markets, that's no different in the ag sector with banking the longtime multigenerational growing families. They've weathered these time and again, we see that happening this time.

Speaker #2: Sure. Yeah, this is Tom. you know, I would I would classify it as stable overall. We're not seeing any specific industry or geography or asset class that's showing any outsized risk, but I, you know, I would say that, you know, if there's one segment we're, we're still watching closely, it's probably it's been this way for over a year now.

Speaker #2: We are watching the ACBUC. You know, 2025 ended up being stronger than we were anticipating. 2026 is off to a good start as well.

Speaker #2: but, you know, obviously, there's been some headwinds in that industry that, that we're paying that we're paying some attention to. But, you know, I think going back to what Randy said about deposit aggregation, you know, same thing on the loan side.

Speaker #2: We, we, we really try to build the or, you know, bank the long-time operators in the markets, and that's no different in the ag in the ag sector, with, you know, banking the, the long-time multi-generational, growing families.

Speaker #2: They weathered these time and again. And, you know, we see that happening this time.

Speaker #5: Got it. And then maybe going back to Texas, you've noted in the past that it's still a bit too early to see impacts.

Evan Kwiatkowski: Got it. Maybe going back to Texas. You've noted in the past it's still a bit too early to see impacts from disruption in the state. I'm just wondering if you've seen any emerging trends of being able to capitalize on displaced customers or new team members, or in any other part of your footprint where there may be dislocation or disruption. Thanks.

Speaker #5: From disruption in the state, I'm just wondering if you've seen any emerging trends, or have been able to capitalize on displaced customers or new team members.

Speaker #5: ...or in any other part of your footprint where there may be dislocation or disruption. Thanks.

Speaker #2: Yeah, so we're watching that carefully, and I think by that you mean bigger banks coming in and acquiring some banks in our markets, and what the implication of that is.

Randall M. Chesler: Yeah. We're watching that carefully. I think by that you mean bigger banks coming in, acquiring some banks in our markets, and what the implication of that is. There's really two areas that we're keeping an eye on. One is in Colorado with PNC's purchase of FirstBank. I would say that the preliminary is still early, and got a lot of respect for PNC. At the same time, we do see some customers starting to move and to our benefit. As these bigger banks come into the markets like this, their ability to carry forward the community banking that people have become used to is still kind of up for judgment. Initially it seems that there is some good movement our way with some very good customers.

Randy Chesler: Yeah. We're watching that carefully. I think by that you mean bigger banks coming in, acquiring some banks in our markets, and what the implication of that is. There's really two areas that we're keeping an eye on. One is in Colorado with PNC's purchase of FirstBank. I would say that the preliminary is still early, and got a lot of respect for PNC. At the same time, we do see some customers starting to move and to our benefit. As these bigger banks come into the markets like this, their ability to carry forward the community banking that people have become used to is still kind of up for judgment. Initially it seems that there is some good movement our way with some very good customers.

Speaker #2: So there's really two areas that we're keeping an eye on. One is in Colorado, with PNC's purchase of FirstBank. I would say that it's preliminary, still early, and we've got a lot of respect for PNC.

Speaker #2: At the same time, we do see some customers starting to move, and to our benefit. And so, as these bigger banks come into the markets like this, their ability to carry forward the community banking that people have become used to is still kind of up for judgment.

Speaker #2: And so but initially, it seems that there is, you know, some good movement our way with some very good customers. And so we're very happy to talk to those customers and, take advantage of that opportunity.

Randall M. Chesler: We're very happy to talk to those customers and take advantage of that opportunity. In Texas, we've got some very strong commercial lending leadership, and I think they're having good success talking to people and bringing on incremental talent that we're finding as a result of some of the recent acquisitions. I'd say overall, right now it feels like it's favorable for us. Again, some very good banks, larger banks. Maybe a little too early to say that's a conclusion, but early trends are positive for us.

Randy Chesler: We're very happy to talk to those customers and take advantage of that opportunity. In Texas, we've got some very strong commercial lending leadership, and I think they're having good success talking to people and bringing on incremental talent that we're finding as a result of some of the recent acquisitions. I'd say overall, right now it feels like it's favorable for us. Again, some very good banks, larger banks. Maybe a little too early to say that's a conclusion, but early trends are positive for us.

Speaker #2: In Texas, we've got some very strong commercial lending leadership, and I think they're having good success talking to people and bringing on incremental talent.

Speaker #2: That's what we're finding as a result of some of the recent acquisitions. So, I'd say overall, right now, it feels like it's favorable for us. But, again, some very good banks—larger banks.

Speaker #2: And so, maybe it's a little too early to say that's a conclusion, but early trends are positive for us.

Speaker #5: Thanks for the color. I'll step back.

Evan Kwiatkowski: Thanks for the color. I'll step back.

Speaker #1: Thank you. And we have a follow-up question from Kelly Motta of KBW. Your line is open.

Operator: Thank you. We have a follow-up question from Kelly Motta of KBW. Your line is open.

Kelly Motta: Hi. Thanks for letting me jump back on. I did want to ask a question about capital management, just because in light of your improving profitability, capital continues to build. I appreciate the commentary on M&A, any other thoughts as you look ahead here about capital management? Thank you.

Speaker #6: Hi, thanks for letting me jump back on. I did want to ask a question about capital management, just because, in light of your improving profitability, capital continues to build.

Speaker #6: I appreciate the commentary on M&A, but do you have any other thoughts as you look ahead here about capital management? Thank you.

Speaker #2: Yeah, Kelly, we'll have Byron give you some color on that. We've been talking a lot about it, obviously, because we're increasing capital, and the industry is increasing capital broadly.

Randall M. Chesler: Yeah, Kelly. We'll have Byron give you some color on that. We've been talking a lot about that. Obviously because we're increasing capital and the industry's increasing capital broadly, we see that as something that's going to continue here. We'll let Byron fill in the blanks there.

Randy Chesler: Yeah, Kelly. We'll have Byron give you some color on that. We've been talking a lot about that. Obviously because we're increasing capital and the industry's increasing capital broadly, we see that as something that's going to continue here. We'll let Byron fill in the blanks there.

Speaker #2: And, you know, we see that as something that's going to continue here. But we'll let Byron fill in the—

Speaker #4: Yeah, Kelly. Our capital is strong, and as you point out, it will continue to grow with our earnings growth. It's early yet.

Byron Pollan: Yeah, Kelly, our capital is strong and as you point out, it will continue to grow with our earnings growth. It's early yet. We're still evaluating our outlook for capital build. I would say we have a lot of flexibility in how we approach capital return, and we're keeping all of our options open. We're having discussions ongoing around this topic and evaluating all of our options.

Speaker #4: We're still evaluating our outlook for capital build, but I would say we have a lot of flexibility in how we approach capital return.

Speaker #4: And we're keeping all of our options open. We're having ongoing discussions around this topic and evaluating all of our options.

Speaker #6: I appreciate that. Thanks.

Kelly Motta: Appreciate that. Thanks.

Speaker #1: Thank you. I have no further questions at this time. I'd like to turn it back to Randall Chesler for closing remarks.

Operator: Thank you. I show no further questions at this time. I'd like to turn it back to Randy Chesler for closing remarks.

Randall M. Chesler: Well, thank you, Dee Dee, and thank you for the folks for your questions. We appreciate it. We appreciate everybody dialing in in the summer and taking time to check in on how things are going. Hope you have a great day, great weekend, and great rest of the summer. Thanks for dialing in.

Speaker #2: All right. Well, thank you, Dee Dee, and thank you to everyone for your questions. We appreciate it. We appreciate everybody dialing in during the summer and taking the time to check in on how things are going.

Randy Chesler: Well, thank you, Dee Dee, and thank you for the folks for your questions. We appreciate it. We appreciate everybody dialing in in the summer and taking time to check in on how things are going. Hope you have a great day, great weekend, and great rest of the summer. Thanks for dialing in.

Speaker #2: Hope you have a great day, a great weekend, and a great, wet rest of the summer. Thanks for dialing in.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.

Q2 2026 Glacier Bancorp Inc Earnings Call

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