Glacier Bancorp, Inc. Q2 FY2025 earnings call

Acquisitions

• Successfully completed acquisition of Bank of Idaho, adding $1.4 billion in assets and expanding presence in Idaho and Eastern Washington.
• Announced definitive agreement to acquire Guaranty Bancshares, a $3.1 billion bank, marking first entry into Texas and strategic expansion of Southwest presence.

Financial Results

• Reported net income of $52.8 million for the second quarter ($0.45 per diluted share), with 18% year-over-year net income increase and 15% year-over-year earnings per share increase.

Loan and Deposit Growth

• Loan portfolio grew $1.3 billion to $18.5 billion, 8% quarter-over-quarter, with commercial real estate driving growth.
• Deposits grew to $21.6 billion, 5% quarter-over-quarter, with noninterest-bearing deposits up 8% (30% of total deposits).

Net Interest Income and Margin

• Net interest income $208 million, up 9% quarter-over-quarter and 25% year-over-year, driven by higher average loan balances, improved loan yields, and declining funding costs.
• Net interest margin 3.21%, sixth consecutive quarter of expansion, reflecting loan portfolio repricing and funding cost management.

Expenses

• Noninterest expense $155 million, up 3% quarter-over-quarter, including $3.2 million in acquisition-related costs. Core noninterest expense $153.5 million, $3.5 million below guide.

Credit Quality

• Strong credit quality with nonperforming assets at 0.17% of total assets, net charge-offs $1.6 million, allowance for credit 1.22% of loans.

Capital

• Tangible book value per share $19.79, up 8% year-over-year, and 161st consecutive quarterly dividend declared.

Glacier Bancorp's second quarter 2025 financial performance included a loan portfolio that grew to $18.5 billion, an 8% quarter-over-quarter increase with $239 million (6% annualized) in organic growth. Deposits reached $21.6 billion, a 5% quarter-over-quarter increase, with noninterest-bearing deposits up 8% and representing 30% of total deposits. Net interest income was $208 million, up 9% quarter-over-quarter and 25% year-over-year. The net interest margin on a tax-adjusted basis expanded to 3.21%, up 17 basis points from the first quarter and 53 basis points year-over-year. Noninterest expense was $155 million, up 3% from the prior quarter. Noninterest income totaled $32.9 million, up 2% year-over-year. Credit quality remained strong with nonperforming assets at 0.17% of total assets and net charge-offs at $1.6 million. Tangible book value per share increased to $19.79, up 8% year-over-year.

Margin

• Expect continued margin growth, with 15-17 basis points per quarter increase anticipated, and Guaranty acquisition potentially adding 6-7 basis points.

Expenses

• Core noninterest expense guide: Q3 to have a step up, Q4 guide midpoint $162 million, with Guaranty acquisition adding $14 million if closed in October.

Loan Growth

• Organic loan growth expected to continue at low to mid-single digits.

• Variability in loan and deposit growth between now and year-end.
• Timing of Guaranty acquisition affecting margin guidance.
• Economic uncertainty and market volatility impacting expense management.

Q: Jeff Rulis asked about margin tracking and potential accretion from Guaranty.

A: Byron Pollan said margin grew 17 basis points in Q2, expects 15-17 basis points per quarter growth, with Guaranty acquisition potentially adding 6-7 basis points.

Q: Jeff Rulis asked about expense guidance.

A: Ron Copher said core noninterest expense $153.5 million, $3.5 million below guide, with Q3 guide $159-161 million and Q4 guide $161-163 million, including Guaranty if closed in October.

Q: Matthew Clark asked about loan yield expansion and deposit costs.

A: Randall Chesler said purchase accounting accretion contributed ~4 basis points in Q2, Byron Pollan said deposit costs were affected by Bank of Idaho acquisition, expecting costs to be stable with potential Fed cuts.

Q: David Feaster asked about organic loan growth and competition.

A: Tom Dolan said organic loan growth was solid, competition seen in pricing in some markets, with hiring for infrastructure and revenue expansion.

Q: Robert Terrell asked about loan growth and borrowing reduction.

A: Tom Dolan said payoff pressure may abate, Byron Pollan said FHLB borrowings have increasing maturities, expected to be paid down.

Q: Kelly Motta asked about margin trajectory and technology investment.

A: Byron Pollan said margin growth expected to continue, Ronald Copher said technology investments in commercial loan platform and treasury platform are improving efficiency.