Glacier Bancorp (GBCI) Q1 2026 Earnings Transcript

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Date

Friday, April 24, 2026 at 11 a.m. ET

Call participants

• Chief Executive Officer — Randall M. Chesler
• Chief Financial Officer — Ronald J. Copher
• Chief Credit Administrator — Tom P. Dolan
• Chief Accounting Officer — Angela Dosey
• Treasurer — Byron J. Pollan

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Takeaways

• Net income -- $82.1 million, rising 29% sequentially and 51% year over year.
• Diluted EPS -- $0.63 per share, up by $0.14 (29%) from the prior quarter and $0.15 (31%) year over year.
• Net interest margin -- 3.80%, increasing 22 basis points sequentially and 76 basis points year over year.
• Loan yield -- 6.16%, which grew by 7 basis points from the prior quarter and 39 basis points from the previous year.
• Total earning assets yield -- 5.11%, up 11 basis points from the prior quarter and 50 basis points from last year.
• Total funding cost -- 1.40%, down 12 basis points quarter over quarter and 28 basis points year over year.
• Total loan portfolio -- $21 billion at quarter end, rising $106 million or 2% annualized from the prior quarter.
• Southwest region loan growth -- Over 7% annualized during the current quarter, with Texas specifically exceeding 6% loan growth while integrating Guaranty Bank.
• Total deposits -- $24.7 billion at quarter end, a $151 million (2% annualized) increase from the prior quarter.
• Noninterest-bearing deposits -- $7.4 billion, up $113 million or 6% annualized.
• Core operating EPS (non-GAAP) -- $0.70 excluding acquisition-related expenses.
• Operating expenses -- $188.2 million, referenced as demonstrating consistent cost control.
• Nonperforming assets -- 25 basis points of total assets, indicating a low level with only a slight sequential increase.
• Net charge-offs -- 2 basis points of total loans, down from 6 basis points the prior quarter.
• Allowance for credit losses -- 1.22% of total loans, noted as conservative.
• Guaranty Bank core conversion -- Completed during the quarter; integration and transition cited as successful.
• Quarterly dividend -- $0.33 per share declared for the 164th consecutive quarter.
• Margin expansion trajectory -- “nine consecutive quarters of margin expansion,” with a 22-basis-point increase described as the largest in that stretch.
• FHLB advances -- Fully paid off during the quarter.
• Loan repricing pipeline -- $3 billion in loans to reprice over the next 12 months, anticipated to earn an extra 75%–100% basis points.
• New loan origination yield -- New loans originated above 6.5%, with total production yield at 6.75% for the quarter.
• First quarter efficiency ratio -- 63%, “with acquisition expenses,” per Copher; core target remains 54%–55% by year end.
• Expense guidance -- Full-year expense range reaffirmed at $756 million to $766 million.
• Deposit intangible amortization -- Included within the efficiency ratio.
• Deposit cost outlook -- Declines possible in CD renewals in Q2; generally expect deposit rates to stabilize with the Fed on hold.
• Capital accumulation -- Dividend payout ratio “It is going to continue to trend down—we are looking forward to seeing it drop below 50% in the next couple of quarters,” expected to decline below 50% in coming quarters.
• Regulatory relief impact -- Anticipated 75%–80% basis points benefit to CET1 capital ratio if the proposed rule is finalized.
• Excess cash position -- No fixed target, but likely to redeploy cash when balances exceed $750 million to $1 billion.

Summary

Management highlighted the completion of the Guaranty Bank core conversion, with the acquired Texas operations achieving approximately 6% loan growth and pipeline momentum in both existing and new customer relationships. Executives noted that there have now been nine consecutive quarters of margin expansion, underlining ongoing performance improvement, and reported all FHLB advances fully paid off. The company indicated that margin expansion may continue at a moderate pace, with asset-side repricing and $3 billion of loans repricing in the next 12 months from March 31, which are expected to earn an incremental 75 to 100 basis points. Capital plans included a declining dividend payout ratio, a potential CET1 capital uplift from regulatory changes, and opportunities to reinvest excess liquidity as it accumulates.

• Management described loan pipeline strength in both owner- and non-owner-occupied real estate and cited increasing construction loan demand entering the summer.
• Deposit growth, led by noninterest-bearing categories, was characterized as outperforming expectations in a typically slower period, with continued success projected despite anticipated seasonal tax-related outflows in Q2.
• Geographic diversification was referenced as an ongoing advantage in sourcing loan and deposit growth opportunities.
• Expense discipline was reinforced by an explicit full-year guidance range for operating expenses and commentary on cautious hiring given economic uncertainty and regional considerations.
• Executives explained that early efficiency ratio results were inflated by acquisition expenses, while maintaining confidence in reaching the stated 54%–55% core operating target.

Industry glossary

• FHLB advances: Borrowings from the Federal Home Loan Bank, often used by banks for short-term funding or liquidity management.
• Efficiency ratio: Non-interest expense as a percentage of net revenue; measures cost efficiency in banking operations.
• CET1 capital ratio: A key regulatory measure of a bank’s core equity capital relative to its risk-weighted assets.

Full Conference Call Transcript

Randall M. Chesler: Good morning, and thank you for joining us today. With me here in Kalispell is Ronald J. Copher, our Chief Financial Officer; Tom P. Dolan, our Chief Credit Administrator; Angela Dosey, our Chief Accounting Officer; and Byron J. Pollan, our Treasurer. I would like to point out that the discussion today is subject to the same forward-looking considerations outlined starting on page 9 of our press release, and we encourage you to review this section. Last night, we issued our earnings release for 2026, and we believe it represents a great start to the year with another quarter of strong results.

Net income was $82.1 million, an increase of $18.4 million, or 29%, from the prior quarter and an increase of $27.6 million, or 51%, from the prior year first quarter. Diluted earnings per share was $0.63, an increase of $0.14, or 29%, from the prior quarter and an increase of $0.15, or 31%, from the prior year first quarter. A key driver of our performance continues to be margin expansion. The net interest margin as a percentage of earning assets on a tax-equivalent basis was 3.80%, an increase of 22 basis points from the prior quarter and an increase of 76 basis points from the prior year first quarter.

The loan yield of 6.16% in the current quarter increased 7 basis points from the prior quarter and increased 39 basis points from the prior year first quarter. The total earning assets yield of 5.11% in the current quarter increased 11 basis points from the prior quarter and increased 50 basis points from the prior year first quarter. The total cost of funding of 1.40% in the current quarter decreased 12 basis points from the prior quarter and decreased 28 basis points from the prior year first quarter. Turning to balance sheet trends, the loan portfolio of $21 billion at the end of the quarter increased $106 million, or 2% annualized, from the prior quarter.

The Southwest Region, which includes Arizona and Texas, grew in excess of 7% annualized during the current quarter, underscoring the strength of our diversified geographic footprint. On the funding side, total deposits of $24.7 billion at quarter end increased $151 million, or 2% annualized, from the prior quarter. Noninterest-bearing deposits of $7.4 billion increased $113 million, or 6% annualized, from the prior quarter. Looking past the quarterly acquisition-related expenses, the non-GAAP operating results show the core strength of the business. Without acquisition expenses, operating EPS was $0.70 per share. Operating expenses were $188.2 million for the quarter, demonstrating consistent cost control. Our credit portfolio continues to perform very well.

Nonperforming assets remain low at 25 basis points of total assets, with a slight increase from the prior quarter. Net charge-offs declined to 2 basis points of total loans, down from 6 basis points in the prior quarter. Our allowance for credit remains at 1.22% of total loans, reflecting our conservative approach to risk management. We also executed well on integration and operations. During the quarter, we completed the core conversion of Guaranty Bank, which we acquired in October 2025, and I want to thank our teams for their excellent work and focus on our customers throughout the conversion. As always, we remain committed to consistent shareholder returns.

In March, we declared our quarterly dividend of $0.33 per share, representing our 164th consecutive quarterly dividend. We are very encouraged with the business performance in the first quarter and look forward to a strong 2026. Our exceptional team, expanding footprint, unique business model, strong business performance, disciplined credit culture, and strong capital base continue to provide a solid foundation for future growth. That ends my formal remarks. We will now open the call for questions.

Operator: Certainly. Our first question for today comes from the line of Jeffrey Allen Rulis from D.A. Davidson. Your question, please.

Jeffrey Allen Rulis: Thanks. Good morning. Randy, at a high level, I wanted to chat about the Texas market and the Southwest footprint. Larger banks entering the market often put a positive spin on out-of-market buyers and the opportunities. We have also heard from smaller banks that there are greater market share opportunities due to disruption. Given you have been in the market for some time and particularly through Guaranty, how would you characterize that environment? And, extending that to M&A conversations, could you focus on Texas first and then the broader Glacier Bancorp, Inc. footprint? Lastly, on margin, you had a north-of-4% goal coming into the quarter and saw a sizable jump.

Does this reset the ceiling, or did you just get there quicker? How should we think about the margin trajectory, including the role of FHLB paydowns, and the $3 billion of loans repricing you referenced—over what period is that?

Randall M. Chesler: I think to some extent the numbers speak for themselves. Texas grew in excess of 6% in the first quarter, and during the same period we were completing the conversion, so they did a great job. I really see the bulk of what is happening there as business as usual. They are continuing to grow in the markets they are in with good customers. There is some disruption as larger banks acquire some mid-sized banks there. It is still a little early to tell how extensive that will be at this point.

On M&A, our model and approach have been very well received in Texas given the dynamics there and the type of banks and business—very aligned with how we do business—and I think that has been demonstrated. We have had multiple conversations already. People are on different timelines, and we are in no hurry. We continue to be very disciplined—good banks, good markets, good people. That continues across the Mountain West Region as well with some very good discussions. One of the strengths for Glacier Bancorp, Inc. is the size of the geographic area in which we can look for opportunities, and that will continue to be a very good advantage for us.

Byron J. Pollan: Very pleased with our margin lift in the first quarter. Our margin was really firing on all cylinders in Q1. We have now had nine consecutive quarters of margin expansion, and the plus 22 basis points was the largest quarterly increase over that run. We do see more lift ahead. With this strong start, we are on track to hit that 4% target. I would not say we are looking to go much beyond that. It maybe accelerates a little, but I still think we will see 4% in the second half of this year, which does not change our broader 2026 guide. Regarding the levers, the drivers of our margin are shifting a bit.

The FHLB payoff is complete—we finalized the payoff of our FHLB advances in Q1. From a deposit cost perspective, we might be able to squeak out another couple of basis points of reduction, but with the Fed on hold, deposit costs for the most part will be stabilizing and moving sideways from here. To this point, we have enjoyed a boost from both sides of the balance sheet; going forward, we will lean more on the asset side for further lift. Our asset repricing has momentum. You will see slow-and-steady upward movement on our active repricing through 2027.

We have $3 billion of loans repricing in the next 12 months from March 31, and those will earn an incremental 75 to 100 basis points. Now that we have all the Guaranty data converted and in our reporting, that is where that increased number comes from. New loans are being originated north of 6.5%, which is very helpful. On the investment side, we are still seeing very strong cash flow, and those securities are running off at very low rates with a one handle. Putting all those drivers together, we still see lift ahead, leaning more on the asset side.

Operator: Thank you. Our next question comes from the line of Matthew Timothy Clark from Piper Sandler. Your question, please.

Matthew Timothy Clark: Good morning, everyone. On loan growth, 2% annualized this quarter on a period basis—a little slower start to the year, likely partly seasonality. How do you feel about full-year growth expectations—we were thinking 3% to 5%—and the pipeline coming into 2Q? And then on expenses, you came in a little below guidance this quarter. Any update there going forward, and do you still contemplate getting to a 54% to 55% efficiency ratio in the fourth quarter? Lastly, does that efficiency ratio exclude amortization expense?

Tom P. Dolan: Matthew, at this point we are still comfortable with low- to mid-single-digit loan growth. The pipeline shows continued strength in both pull-through and backfill. There is uncertainty out there—geopolitical and associated economic risks could potentially change things—but we are comfortable with low- to mid-single digits. On the first quarter, there was definitely a seasonal impact. We expect improvement in the second and third quarters. Also, as Randy mentioned, the Southwestern region of our footprint does not have the same seasonality as the northern part of the footprint, which is more susceptible to colder weather that slows construction advances, etc.

Ronald J. Copher: We definitely plan to get to the 54% to 55% efficiency ratio. I want to point out core operating. When you look at our reported efficiency ratio for the first quarter, it came in at 63%, which is loaded in the numerator with acquisition expenses and compensation relief coming out of that acquisition. The guidance I gave three months ago in January—$756 million to $766 million for the full year—still stands. We remain cautious on hiring and spending in general, given economic uncertainty, certainly adding in the Billings conflict. Our divisions and corporate departments have done a good job looking at where they might pull back on some expenses, which will likely show up as the year unfolds.

Too early to tell precisely, but we feel very good about 54% to 55% on a core operating basis and are staying with the guide. On your question about amortization, the deposit intangible amortization would still be included in that efficiency ratio.

Operator: Thank you. Our next question comes from the line of David Pipkin Feaster from Raymond James. Your question, please.

David Pipkin Feaster: Hey, good morning, everybody. Switching back to Texas and the Guaranty deal for a minute. It sounds like the conversion and integration are complete, and they did about 6% growth in the first quarter. How did the conversion and integration go? And on the growth they are seeing, what is driving it—deeper relationships with existing clients now that they have more capabilities and a bigger balance sheet, or new relationships you can now service? Also, at a high level on growth, could you elaborate on pipelines across your footprint—where you are seeing growth, the complexion of the pipeline, competition, pricing, and origination yields?

Lastly, on the other side of the balance sheet, deposit growth was really strong in a seasonally slower period, especially on the noninterest-bearing side. Could you touch on the competitive landscape for funding and where you are having more success driving deposit growth?

Randall M. Chesler: The conversion is behind us, and the teams are doing a great job continuing to help folks in Texas get used to our systems. They really did not miss a beat—very pleased with the approximately 6% loan growth. All those things have gone well and are moving in the right direction. Tom can give you a little color on the makeup of that business.

Tom P. Dolan: Good morning, David. On whether growth is coming from existing borrowers deepening relationships or new borrowers, it is a little of both. They have seen nice, strong pipeline growth that remains stable going into the second quarter. One of the main benefits is the ability now to deepen relationships that, at one point from an aggregate standpoint, might have been bumping up against their comfort level, and we are able to continue growing with those as well. New customers throughout their footprint have also been a good source of pipeline growth.

As for the broader footprint, the composition of the pipeline is still largely driven by real estate, a good representation of both owner- and non-owner-occupied, spread throughout the footprint, followed by C&I opportunities. Compared to a couple of years ago, we are starting to see more construction demand; those do not fund at close, so we have seen strong top-line production levels, and as we get into the summer, we will see those lines draw, in addition to increased utilization for other segments, including agriculture as we get into the growing season. We expect stronger second and third quarters. From a competition standpoint, no significant change in the last quarter.

In markets where we have a controlling market share, we generally get better pricing, which allows us to compete better in larger markets where there is more pricing competition. Production yield was about 6.75% for the quarter. We saw the middle part of the curve increase in March, and as a result, late-quarter and early second-quarter production yields have ticked up.

Byron J. Pollan: On deposits, we had a great quarter. The first quarter can be a mixed bag, so to see such strong deposit growth while bringing our overall cost down was fantastic. We are encouraged by noninterest-bearing performance—it outperformed our expectations for Q1—and that bodes well for the rest of the year. We do see headwinds in Q2 from seasonal tax flows, but overall we have had a very strong start, and we are encouraged by our divisions’ success.

Operator: Thank you. Our next question comes from the line of Robert Andrew Terrell from Stephens. Your question, please.

Robert Andrew Terrell: Good morning. Going back to the margin, good to see you at zero on FHLB advances. I do not think there are any brokered deposits. As you look forward this year, beyond maybe eking out a little more on deposit costs, are there other changes you can make in the funding position or deposit base, acknowledging the cash flows coming off the bond book? Should we expect relative stability in the bond book, or are you starting to buy securities again—where does the excess cash go? And then on capital deployment, you have kept the dividend stable the past couple of years and the payout ratio has dropped pretty drastically.

Where do you generally like to operate on dividend payout, and thoughts on capital deployment going forward? Finally, any general expectation for capital benefit if the regulatory proposal goes through as written?

Byron J. Pollan: We could see a couple more basis points of deposit cost decline in Q2. I would point to our CD portfolio—over 60% of our CDs mature every quarter. In Q2, renewal rates we have seen early on are coming in a little lower than the maturing rates, so I would look for some cost decline in CDs. Beyond that, with the Fed on hold, for the most part deposit rates may move sideways for the rest of the year. With excess cash, particularly in the second half, we are evaluating investment strategies and expect to be active in the market buying bonds in the second half, looking to put excess cash to work.

Randall M. Chesler: On the dividend, the payout ratio has dropped significantly, and we are very pleased to see that trend. It is going to continue to trend down—we are looking forward to seeing it drop below 50% in the next couple of quarters. We have had a lot of discussions about capital. We will be building quite a bit of capital when you take in the regulatory relief plus the position of the balance sheet. Byron and Ronald have been very active in rethinking all options, given the amount of capital that will be accumulating.

Byron J. Pollan: On the regulatory proposal, it is still early, but most of the impact to us would be on the risk-weighted assets side. We expect some RWA relief. Early calculations indicate a benefit somewhere in the neighborhood of 75 to 80 basis points to our CET1 capital ratio. If the rule as proposed becomes final, we would expect a bump around 75 basis points on our risk-weighted ratio.

Operator: Thank you. Our next question comes from the line of Kelly Ann Motta from KBW. Your question, please.

Kelly Ann Motta: Good morning, and thanks for taking the question. When discussing the margin and excess liquidity, did you quantify what you consider to be excess cash levels currently on the balance sheet? It is tougher to see given the breakout with taxes and the tax cash baked in with securities. I am trying to get a sense of the dry powder. Also, understanding that Q1’s remarkable margin level was partly driven by liabilities where things level off from here, there still seems to be a lot of earning asset expansion—an 11-basis-point increase this quarter—which bodes well for an exit margin potentially higher than 4% by 4Q.

Is that 11 basis points sustainable, and how should we think about cadence and the exit margin in 2026 and through 2027, given those dynamics seem durable?

Byron J. Pollan: We do not have a specific hard target for cash, but we are looking at runoff as bonds mature and cash builds. Broadly speaking, somewhere above the $1 billion range in overall cash is where we would look to redeploy cash flows going forward. That level could ebb and flow depending on market opportunities, timing, and broader balance sheet dynamics, but probably somewhere in the $750 million to $1 billion zone in cash and beyond would be where we look to reinvest.

On the 11 basis points of earning asset yield expansion in Q1, one thing to point out is day count and the way interest accrues helped Q1, so there is a little bit of an unwind we would expect to see from a day count perspective in February and beyond. The repricing lift we discussed is durable and will be there. In terms of an exit margin, there is potential to go past 4%, but we are not going to blow through it—maybe we creep above it a little. The sustainability into 2027 is supported by the longer-tail repricing story you referenced.

Operator: Thank you. This does conclude the question and answer session of today's program. I would like to hand the program back to Randall M. Chesler for any further remarks.

Randall M. Chesler: Thank you, and thank you, everyone, for dialing in today. We appreciate you taking time out of your Friday. We wish everyone a great weekend, and thank you again for joining us.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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