Glacier Bancorp Q2 Earnings Call Highlights

Key Points

• Glacier Bancorp reported strong second-quarter results, with net income rising 85% year over year to $97.9 million and diluted EPS up 67% to $0.75, helped by margin expansion and higher net interest income.
• The bank’s net interest margin expanded to 3.90%, and management expects it to reach 4% early in Q4 2026 and potentially exceed that level by year-end as funding costs stay stable and loan growth continues.
• Credit quality remained solid and loan growth was broad-based, while the company also kept expenses in check and maintained its quarterly dividend at $0.33 per share for the 165th consecutive payout.

Glacier Bancorp NYSE: GBCI reported second-quarter net income of $97.9 million, up 19% from the prior quarter and 85% from a year earlier, as net interest income and margin expansion supported earnings growth.

Diluted earnings per share totaled $0.75, increasing 19% sequentially and 67% year over year. President and CEO Randall Chesler said the company’s tax-equivalent net interest margin expanded to 3.90%, up 10 basis points from the first quarter and 69 basis points from the second quarter of 2025.

Net interest income rose 3% from the first quarter and 33% from the prior-year period to $276 million. Pretax, pre-provision net revenue was $130.8 million, rising 23% sequentially and 53% year over year.

Funding Costs Decline, Deposit Base Remains Stable

Glacier’s total cost of funding declined to 1.33%, down 7 basis points from the first quarter and 30 basis points from a year ago. Core deposit costs, including noninterest-bearing deposits, were 1.18%, down 2 basis points sequentially. Noninterest-bearing deposits represented 30% of total deposits, unchanged from both the preceding quarter and the year-earlier period.

Treasurer Byron Pollan said the June 30 deposit cost was also 1.18% and said deposit costs should remain stable if the Federal Reserve holds interest rates steady.

“I think competition is strong. It always is. It’s rational,” Pollan said in response to a question about deposit competition. Chesler added that Glacier’s footprint is about 75% rural and 25% urban, and said the company’s emphasis on core customer relationships contributes to its lower-cost funding profile.

Average deposits were $24.5 billion during the second quarter, up $112 million from the first quarter on a 2% annualized basis. Period-end deposits were $24.7 billion, down slightly from the prior quarter. Chesler said deposit levels remained stable and continued to support the company’s liquidity and funding strategy.

Loan Growth Broad-Based Across Operating Regions

Loans ended the quarter at $21.4 billion, increasing $330 million from the first quarter, or 6% on an annualized basis. Chesler described growth as broad-based and attributed it to disciplined production in attractive markets.

The company operates across Southwest and Mountain West regions. Chesler said the Southwest continued to perform well and was rebuilding its pipeline after a strong first quarter, while the Mountain West posted a strong second quarter.

Chief Credit Administrator Tom Dolan said the second and third quarters have generally been the company’s stronger seasonal lending periods. He said loan pipelines remained healthy, with continued pull-through and back-build activity, as well as tailwinds from construction draws and the agricultural growth season.

Glacier continued to generate new loan production yields above 6.5% during the quarter, Dolan said. He characterized pricing as the primary competitive factor, particularly in larger metropolitan markets, while saying the company had not observed substantial competitive pressure on underwriting discipline or loan structure.

Margin Expected to Reach 4% in Fourth Quarter

Pollan said Glacier expects its net interest margin to continue expanding and anticipates reaching a 4% margin level early in the fourth quarter of 2026. He said the company expects to exit 2026 with a margin above 4%.

He noted that certain second-quarter headwinds, including nonaccrual interest reversals and lower accretion, appeared elevated and were not expected to persist at the same level. Pollan said the level of discount accretion reported in the second quarter was likely a more normal assumption going forward.

Over the longer term, Pollan said he views Glacier’s margin as potentially ranging between 4% and 4.5%, its more historical norm. He said a steeper yield curve and continued meaningful loan growth could help move the margin toward the upper end of that range, and he expects margin expansion to continue through 2027.

The company also resumed some investment securities purchases during the quarter, buying approximately $250 million of bonds. Pollan said Glacier expects to continue putting cash to work and anticipates average earning assets will increase in the third and fourth quarters following the completion of Federal Home Loan Bank advance paydowns.

Credit Remains Stable; Expense Guidance Unchanged

Chesler said credit quality remained excellent. Early-stage delinquencies declined from the first quarter, while nonperforming assets increased modestly but remained low relative to subsidiary assets. The allowance for credit losses stood at 1.22% of total loans.

Dolan said credit trends were stable overall, with no particular industry, geography or asset class showing outsized risk. He said the company continues to monitor its agricultural portfolio, though 2025 performed better than anticipated and 2026 has started well.

Acquisition-related expenses declined meaningfully during the quarter, helping improve Glacier’s operating efficiency ratio to 56.21% from 63.05% in the first quarter. Chief Financial Officer Ron Copher maintained quarterly expense guidance of $187 million to $192 million for the second half, noting that some discretionary spending could return.

For the first half of 2026, Glacier reported net income of $180 million, up 68% from the prior-year first half, while diluted earnings per share increased 48% to $1.38. The board declared a quarterly dividend of $0.33 per share, marking the company’s 165th consecutive quarterly dividend, according to Chesler.

On capital management, Pollan said the company’s capital position was strong and would continue to grow with earnings. He said management was evaluating its outlook for capital accumulation and retained flexibility regarding potential capital-return options.

About Glacier Bancorp (NYSE:GBCI)

Glacier Bancorp, Inc is a bank holding company headquartered in Kalispell, Montana. Through its network of community banks, the company delivers commercial and retail banking services to individuals, small and medium-sized businesses, and agricultural clients. With a commitment to relationship-driven banking, Glacier Bancorp combines local market expertise with regional scale to offer customized financial solutions that address the unique needs of the communities it serves.

Established in 1955 as Glacier Bank, the company has expanded both organically and through targeted acquisitions to build a presence across the Mountain West and into the Upper Midwest and Southwest.

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