Earnings call transcript: Glacier Bancorp tops Q2 2025 EPS forecast

Glacier Bancorp, with a market capitalization of $5.37 billion, reported a strong second fiscal quarter for 2025, with earnings per share (EPS) of $0.45, surpassing the forecasted $0.38. This 18.42% earnings surprise was well-received by investors, leading to a 2.96% increase in the company’s stock price in aftermarket trading. According to InvestingPro analysis, the company is currently trading below its Fair Value, suggesting potential upside opportunity. Despite a slight revenue miss, the company’s strategic initiatives and acquisitions have bolstered market confidence.

Key Takeaways

• EPS of $0.45 exceeded expectations, with an 18.42% surprise.
• Stock price rose 2.96% in aftermarket trading.
• Net income increased by 18% year-over-year.
• Strategic acquisitions and technological advancements were highlighted.

Company Performance

Glacier Bancorp demonstrated robust performance in Q2 2025, marked by an 18% year-over-year increase in net income. The company is benefiting from strategic acquisitions and a focus on technological improvements, which have enhanced operational efficiency and customer experience.

Financial Highlights

• Revenue: $240.56 million, slightly below the forecast of $242.02 million.
• Earnings per share: $0.45, up 15% from the same quarter last year.
• Net interest income: $208 million, a 9% increase quarter-over-quarter and 25% year-over-year.

Earnings vs. Forecast

The actual EPS of $0.45 was significantly higher than the forecasted $0.38, resulting in an 18.42% surprise. However, revenue fell slightly short of expectations with a 0.6% miss.

Market Reaction

Following the earnings announcement, Glacier Bancorp’s stock price increased by 2.96% in aftermarket trading, reaching $45.88. This rise reflects investor confidence in the company’s performance and strategic direction.

Outlook & Guidance

Glacier Bancorp anticipates continued margin expansion through 2026, with low to mid-single-digit organic loan growth. The company plans further reductions in FHLB borrowings, with Q3 and Q4 non-interest expenses expected to be $159-161 million and $161-163 million, respectively.

Executive Commentary

"We delivered an excellent quarter, continuing our momentum with higher loan yields, lower deposit costs, increasing margin, solid growth, and disciplined expense management," said Randy Chesler, President and CEO. Byron Pollan, Treasurer, added, "We do think that we’ll continue to see margin growth throughout 2026."

Risks and Challenges

• Slight revenue miss raises concerns about future revenue growth.
• Pricing competition in larger markets could impact margins.
• Macroeconomic pressures may affect the banking sector’s stability.

Q&A

Analysts inquired about margin expansion and deposit cost stability. The company highlighted its strategy of loan repricing and funding cost management as key drivers for future growth. Potential talent acquisition opportunities in the Texas market were also discussed.

Full transcript - Glacier Bancorp Inc (GBCI) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the Glacier Bancorp Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. 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.

Randy Chesler, President and CEO, Glacier Bancorp: Good morning and thank you for joining us today. With me here in Kalispell is Ron Kover, our Chief Financial Officer Tom Dolan, our Chief Credit Administrator Angela Dossi, 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. We delivered an excellent quarter, continuing our momentum with higher loan yields, lower deposit costs, increasing margin, solid growth and disciplined expense management. We successfully completed the acquisition of the Bank of Idaho adding $1,400,000,000 in assets and expanding our presence in Idaho and Eastern Washington.

The integration is progressing very smoothly and we’re excited about the long term opportunities this brings. We also announced a definitive agreement to acquire Guaranty Bancshares, a $3,100,000,000 bank headquartered in Mount Pleasant, Texas. This marks our first entry into the state and represents a significant step for our company and in our strategic expansion of our Southwest presence. We reported net income of $52,800,000 for the second quarter or $0.45 per diluted share. Our results include $19,900,000 in credit loss expense and acquisition related expenses, primarily from the completion of the Bank of Idaho acquisition.

While the second quarter net income represents a decline of 3% from the prior quarter due to acquisition expenses, it reflects an 18% increase in net income and a 15% increase in earnings per share compared to the same quarter last year. Our loan portfolio grew $1,300,000,000 to $18,500,000,000 an 8% increase from the prior quarter with $239,000,000 or 6% annualized inorganic growth. Commercial real estate continues to be a key driver of loan growth. Deposits also grew reaching $21,600,000,000 up 5% quarter over quarter. Notably, non interest bearing deposits increased 8% and continue to represent 30% of total deposits.

Deposits and repurchase agreements organically increased by $43,000,000 or 1% annualized from the prior quarter. We reported net interest income of $2.00 $8,000,000 up $17,600,000 or 9% from the prior quarter and up $41,100,000 or 25% from the same quarter last year. This growth was driven by higher average loan balances, improved loan yields and declining funding costs. Our net interest margin on a tax adjusted basis expanded to 3.21%, up 17 basis points from the first quarter and up 53 basis points year over year. This marks our sixth consecutive quarter of margin expansion reflecting the strength of our loan portfolio repricing, our ability to get good margin on new loans and our continued focus on managing funding costs.

The loan yield of 5.86% in the current quarter increased nine basis points from the prior quarter loan yield and increased 28 basis points from the prior year second quarter. The total earning asset yield of 4.73% in the current quarter increased 12 basis points from the prior quarter and increased 36 basis points from the prior year second quarter. Total funding cost declined to 1.63%, down five basis points from the prior quarter as we reduced higher cost Federal Home Loan Bank borrowings by $265,000,000 in the quarter. Core deposit cost remained stable at 1.25%. On the expense side, non interest expense was $155,000,000 up 3% from the prior quarter.

This includes $3,200,000 in acquisition related costs. Compensation and benefits rose due to increased headcount from the Bank of Idaho acquisition and annual merit increases. Non interest income totaled $32,900,000 in the current quarter, up slightly from the first quarter and up 2% year over year. Service charges and fees increased 8% from the prior quarter, while gains on loans remained steady. Our efficiency ratio improved to 62.08, down from 65.49% in the prior quarter and 67.97% a year ago, reflecting positive operating leverage.

Credit quality remains very strong. Our non performing assets remain low at 0.17% of total assets and net charge offs were just $1,600,000 for the quarter. Our allowance for credit remains at 1.22% of loans, reflecting our conservative approach to risk management. We recorded a provision for credit loss of $20,300,000 which includes 16,700,000 related to the Bank of Idaho acquisition. Excluding that, our core provision for credit loss was 3,600,000.0 We continue to maintain a strong capital position.

Tangible book value per share increased to $19.79 up 8% year over year and we declared our one hundred and sixty first consecutive quarterly dividend of $0.33 per share, underscoring our commitment to delivering consistent shareholder returns. We are very pleased with our performance this quarter. Our expanding footprint, unique business model, strong business performance, disciplined credit culture and strong capital base provide a solid foundation for future growth. That ends my formal remarks. And I would now like the conference call operator to open the line for any questions our analysts may have.

Conference Operator: And our first question comes from Jeff Rulis with D. A. Davidson. Your line is open.

Jeff Rulis, Analyst, D.A. Davidson: Thanks. Good morning. Good morning, Jeff. Wanted to just check-in on the margin. Certainly, it seems to be tracking really well off to the guide.

I think you’ve talked about a $3.50 exit towards the end of the year. Just wanted to see if there’s anything in the current quarter on kind of one timer accretion bump? Or is that all in number kind of, again, stair stepping towards that exit kind of pre guarantee?

Byron Pollan, Treasurer, Glacier Bancorp: Jeff, this is Byron. I can address the margin. Yes, we do think that we’ll see continued growth. We did see great traction in the second quarter from the NIM drivers that we’ve discussed in the past. And we do think that we can continue this pace of increase, at least for the next couple of quarters.

Our margin grew 17 basis points in the second quarter. And we think we can repeat that level of growth in Q3 and Q4. To put a range on it, maybe we grow 15 to 17 basis points per quarter. Keep in mind that does include the impact from the Bank of Idaho. So, this does represent a little bit of an increase from our prior margin guide.

We did see better than expected lift from the Bank of Idaho. We also saw stronger than expected loan growth in the second quarter, which helped lift our margin. There is some variability around that outlook depending on what happens with loans between now and the end of the year, what happens with deposits between now and the end of the year. That could drive some variability there. Also with Guaranty and the announced acquisition there, depending on the timing of when we close that acquisition, I think Guaranty could add an additional six to seven basis points on top of what we just discussed.

Jeff Rulis, Analyst, D.A. Davidson: Byron, thank you. Really detailed. Appreciate it. On the it sounds really positive. The expense side, Ron, maybe we start applying 80% of your expense guide, but I guess that the bank’s been pretty efficient.

And I guess ex merger costs, if we think about the third quarter, we get a little pause between deals potentially. I guess ex merger costs and getting a full quarter of Bank of Idaho kind of getting into that $155,000,000 maybe that’s a little skinny. If you could just course correct on where you think expenses plus growth head from here.

Ron Kover, Chief Financial Officer, Glacier Bancorp: Okay. Thank you. Just let me go back for the benefit of everyone. That $153,500,000 Randy covered in his opening remarks, dollars 3,500,000.0 below second quarter guide of 157,000,000 to $158,000,000 for core non interest expense. Just want to remind everyone that that guide included $6,000,000 for Bank of Idaho for the two months after its April 30 acquisition.

And so think back to the first quarter, the second quarter had the same environment in that we remain cautious in spending given the continuing economic uncertainty, market volatility. I think we’re all aware of the noise in Washington, etcetera. So of that $3,500,000 $500,000 half a million is attributable to Bank of Idaho coming in lower than the $6,000,000 They’re not yet converted. That will happen later, but nonetheless came in lower by $500,000 And of that remaining $3,000,000 $1,200,000 is due to lower third party outside consulting services. Another $300,000 is lower occupancy and facilities expense.

In part, you’ve noticed last year and this quarter as well, had a number of sales of former branch facilities, so it’s getting more efficient there. And then the remainder of that $1,500,000 really was spread across many other expenses collectively, including Bank of Idaho, our corporate departments, each of the bank divisions have done a great job in controlling their expenses. And of that $1,500,000 there was no category greater than $250,000 so it really was pretty widespread. So looking ahead to the second half of ’twenty five, the previous guide I gave in April for core non interest expense, it was 160,000,000 to 162,000,000 for each of the third fourth quarters. Recall that higher guide reflects the 9,000,000 to $10,000,000 increase because we’re going to have three months of the Bank of Idaho versus the $6,000,000 was there only for the two months in quarter two.

So that’s an increase of 3,000,000 to $4,000,000 on each side of that guide. And then for the third quarter, we’re going to reduce the core noninterest expense guide to 159,000,000 to 161,000,000 And I’ll go ahead for the fourth quarter the guide will go to $161,000,000 to $163,000,000 I do want to point out that that increase, we had $153,500,000 If you compare that back to the $152,000,000 we had for Q1, that represents a 1% increase. And then just to add perspective, for quarter three, the midpoint, and I want to focus there, is $160,000,000 on the new guide. And that represents an increase of $6,500,000 over the $153,000,000 operating expenses for Q2. That $6,500,000 includes incrementally $3,500,000 for the Bank of Idaho acquisition.

The remainder is $3,000,000 from all the other divisions, corporate departments. So I want to add perspective in that $3,000,000 aside from Bank of Idaho, that represents a 2% increase when you compare that to the base of $153,500,000 for Q2. We are going to see some increase in that $3,000,000 because we’ve had some pretty strong deferred expenses back in Q1. As a reminder, third party consulting became in lower by almost $800,000 And then here in the as I said a moment ago, third party consulting came in $1,200,000 If they add that together, that’s $2,000,000 So we are expecting some additional hiring in the third quarter, and some of that deferred consulting will show up the bulk of it. There’ll be other increases, but that’s the bulk of it.

And then looking to the fourth quarter, the midpoint for the Q4 guide is $162,000,000 which is $2,000,000 more over the third quarter estimate. So to put that into perspective, that $2,000,000 over the Q3 base, midpoint 160, that’s 1.25% increase. My point is that we’re going to have a step up in Q3, but overall we continue to moderate the growth in our operating expenses. And just as a reminder, operating core means excluding M and A and any gain or losses on the sale of branches, anything else that’s really unique here. So let me just so I don’t forget, assuming we’re going to close on guarantee in, say, October 31, you would add $14,000,000 to the guide I gave for the fourth quarter to include guarantee.

With that, let me ask for any questions.

Jeff Rulis, Analyst, D.A. Davidson: No, Randy. You’re very thorough. I appreciate it. Thanks for walking me through that. I’ll step back.

Thanks.

Conference Operator: Thank you. Our next question comes from Matthew Clark with Piper Sandler. Your line is open.

Matthew Clark, Analyst, Piper Sandler: Hey, thanks. Good morning, everyone.

Ron Kover, Chief Financial Officer, Glacier Bancorp: Good morning. Just going

Matthew Clark, Analyst, Piper Sandler: back to the loan yield expansion. Can you quantify just how much in purchase accounting accretion contributed to interest income this quarter versus last quarter? I’m just trying to get a handle on the core loan yield trends.

Randy Chesler, President and CEO, Glacier Bancorp: I think it’s right around four basis points for this quarter.

Matthew Clark, Analyst, Piper Sandler: Okay. And last quarter, do you recall? I want to say

Randy Chesler, President and CEO, Glacier Bancorp: Yes, that was closer to eight.

Matthew Clark, Analyst, Piper Sandler: Okay. Okay. Thank you. Great. And then on the on your interest bearing deposit costs, I think they were up one basis point this quarter.

Trying to get a sense for if that was from Bank of Idaho inflating that number a little bit? Or is there I know the Fed’s been on hold. You guys have probably been pretty steady in terms of your rates out there. But just trying to get a sense for any impact from the deal and kind of what you’re seeing on the pricing front.

Byron Pollan, Treasurer, Glacier Bancorp: Yes, Matthew. That was from the acquisition Bank of Idaho. I think from here in terms of deposit costs, I would see our costs as being fairly stable, kind of moving sideways. A catalyst for change or additional cost reduction would be another Fed cut, if we do get that. I would say that’s on our cost of deposits.

I would say on our cost of funds, we do expect that to continue to come down as we expect it to continue to pay down our higher cost FHLB borrowings.

Matthew Clark, Analyst, Piper Sandler: Yes, got it. And then if you had the spot rate on deposits at the June, I’ll take it, and the average margin in the month of June?

Byron Pollan, Treasurer, Glacier Bancorp: Yes, spot rates at the June on deposits was 1.25%. And the spot margin adjusted for timing differences within the quarter, spot margin in June was three thirty.

Matthew Clark, Analyst, Piper Sandler: Okay, three thirty for

Ron Kover, Chief Financial Officer, Glacier Bancorp: the month not June? Correct.

Matthew Clark, Analyst, Piper Sandler: Okay, thank you.

Ron Kover, Chief Financial Officer, Glacier Bancorp: You’re welcome.

Conference Operator: Thank you. Our next question comes from David Feaster with Raymond James. Your line is now open. Hi, good morning everybody.

Ron Kover, Chief Financial Officer, Glacier Bancorp: Good morning.

David Feaster, Analyst, Raymond James: I wanted to touch on the organic growth side. I mean, we’ve got a couple of deals going on. There’s a lot of focus there. But I mean, your organic loan growth was solid. I’m curious maybe how pipelines are shaping up today, the pulse of your clients with maybe tariff uncertainty abating a bit and just maybe the competitive landscape from your perspective?

Tom Dolan, Chief Credit Administrator, Glacier Bancorp: Yes. David, this is Tom. Yes, we were quite happy with the organic growth. Second quarter is generally seasonally stronger. And then in addition to that, from not only from a top line perspective, but you know, we enter the construction in the agriculture season, so we see stronger line utilization, which tailwind is as well.

You know, as you mentioned, our production levels were, you know, seasonally strong as well, particularly in theory. And from a pipeline perspective, we continue to see good and consistent deal flow, and customers continue to be optimistic. I think the instances of us hearing from a customer that they’re tapping the brakes and waiting for more clarity is fewer and farther between, certainly more so the day since the from the beginning of the quarter. So I think when you look at the whole year, second quarter is generally the strongest. Third quarter also shows some strength, a little bit less so in first quarter and fourth quarter.

But we’ve got some tailwinds as well.

David Feaster, Analyst, Raymond James: Okay. And could you maybe touch on the competitive side? Anecdotally, we hear across the industry that competition is increasing, especially on the pricing front. Are you seeing that? And just have you seen anything beyond pricing?

Are you seeing competition maybe increase on structure and underwriting?

Tom Dolan, Chief Credit Administrator, Glacier Bancorp: Yes. I think it’s we’re not really seeing that much competition on the structure side, which is encouraging. We’re glad to see that. We do see it on the pricing a little bit in some of the larger markets. But areas where we have more of a commanding market share, we tend to get pretty strong margins.

And I think if you look at just margins overall, we’re still seeing really strong production yields. I mean, for the quarter, we were at 7.35 average production yield for the quarter, which is still a pretty good spread.

David Feaster, Analyst, Raymond James: Okay. That’s great. And then you touched on some hiring that you guys are looking at potentially here in the third quarter. I’m curious, where are you seeing opportunities? Are these revenue producers or more back office?

And then just, again, high level, it’s still early. I’m curious maybe your thoughts on potential opportunities in Texas, just given the additional M and A that’s come after your deal was announced? And whether that the Guaranty team might be looking at opportunities to add talent there from that potential disruption?

Randy Chesler, President and CEO, Glacier Bancorp: Yes. So the hiring that we’ve been very slow to kind of fill positions. And so Dave, some of this is just infrastructure back office to support some of the growth that’s we’ve stretched a couple of places. So we’re going to fill those. There is some revenue expansion hiring in there as well.

But the bulk of it is more operational across the 17 divisions and the holding company that Texas, yes, there’s a lot going on down there. We’ve been talking to the guarantee folks and they are all over these changes. And so I think there will be some opportunity as some of those transactions pan out. That being said, we’ve got a great staff down there. Ty and his team have some have a great lending staff already in place.

So I think they’ll be very selective, but there could be some opportunities given some of the transactions that have been announced.

David Feaster, Analyst, Raymond James: Okay. That’s helpful. Thanks everybody.

Randy Chesler, President and CEO, Glacier Bancorp: You’re welcome.

Conference Operator: Thank Our next question comes from Andrew Terrell with Stephens. Your line is open.

Andrew Terrell, Analyst, Stephens: Hey, good morning.

Ron Kover, Chief Financial Officer, Glacier Bancorp: Good morning. Wanted to

Andrew Terrell, Analyst, Stephens: stick on loan growth for a bit. The production and kind of pipeline commentary all sounds pretty solid and good to hear you guys are getting some good pricing as well. I know that in the first quarter, there were some heavier payoffs. To the extent you guys do have kind of line of sight into that, do feel like the payoff pressure is somewhat abated for you kind of moving into the back half of the year and then just kind of rounding out the loan growth? Do you feel like this kind of mid single digit organic pace of growth is kind of achievable at least kind of in the near term?

Tom Dolan, Chief Credit Administrator, Glacier Bancorp: Yes, the payoff pressure, we still saw that in the second quarter, especially when you’re looking at some of the multifamily stuff where we did construction and stabilization and then the asset either sold or went to a secondary provider. That was still present in the second quarter. I do see that possibly abating somewhat towards the end of the year, just looking at the volume and the cadence of those projects coming around. So I think the growth in the second quarter was boosted by a couple of different factors. One, increase in top line production and then also better line utilization as we enter the construction and ag season.

But I think for the full year, that low to mid single digits is still where we’re comfortable.

Andrew Terrell, Analyst, Stephens: Got it. Okay. Thank you. And then maybe for Byron, the margin, I’m looking at the borrowing position. You guys are obviously doing a good job in deleveraging.

I’m curious as the you kind of give the margin expectations, and I appreciate all the color there. How should we think about the pace of borrowing reduction that we could see over the balance of 2025 is $250,000,000 or so off this quarter on the FHLBs. Is that kind of a fair run rate? Or does it more match securities cash flow? Just how should we think about the borrowing reduction and just size of the balance sheet?

Byron Pollan, Treasurer, Glacier Bancorp: Yes. We put a ladder of term FHLB advances in place some time ago, and those mature on a quarterly basis, and the quarterly maturities do increase. So, I think we had a $300,000,000 maturity in Q2. That was offset. We did inherit $35,000,000 of advances from Bank of Idaho.

But in terms of the third quarter, I think we’ll see north of 300,000,000 in terms of FHLB maturities. Q4, I think, somewhere in the $400,000,000 $440,000,000 range in terms of maturity. I do expect that we’ll be able to pay down most, if not all, of those maturities. But we’ll see. We’ll evaluate what the lending opportunities are on Tom’s side of the balance sheet, what deposits are doing.

But to answer your question in terms of maturity, we do have progressively increasing maturities and the final maturity will land in the first quarter of next year. At that point, those term advances will have maturity.

Andrew Terrell, Analyst, Stephens: Understood. Okay. So yes, maybe a slightly increasing pace. And I’m assuming that’s kind of fully reflected in the margin details, the margin guidance you gave earlier?

Byron Pollan, Treasurer, Glacier Bancorp: Yes, it is.

Andrew Terrell, Analyst, Stephens: Okay, great. The rest of mine have been addressed. Thanks for taking the questions.

Ron Kover, Chief Financial Officer, Glacier Bancorp: Welcome.

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

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

Randy Chesler, President and CEO, Glacier Bancorp: Good morning.

Kelly Motta, Analyst, KBW: I did want to stick on the margin. It’s great expansion this quarter, nice loan growth. And it seems like the trajectory remains quite strong. As we look to next year, are there any other factors in terms of either an acceleration or slowdown of back book pricing that would mitigate some of the really strong pickup we saw this year? Maybe said another way, pre pandemic you were 4% plus.

Is there anything structurally different that would prohibit you from continuing to make progress towards that level?

Byron Pollan, Treasurer, Glacier Bancorp: Kelly, I do think that we’ll continue to see margin growth throughout 2026. I don’t want to put any numbers on it. But yes, do think that the tailwinds that we’re feeling now, they will persist and kind of carry us through the end of next year from a margin growth perspective. I don’t see anything that would prohibit us from kind of getting back to some of our historic margin norms, you know, maybe by the end of next year.

Kelly Motta, Analyst, KBW: Okay. That’s really helpful. And I appreciate all the color, Ron, on the expense moving parts. At a higher level, as you guys kind of grow and scale up through the real success you’ve had with acquisitions, are there any other areas of technology or within the organization that you’re looking to strengthen in order to continue to support your really nice growth that you’ve been having these past couple of years?

Randy Chesler, President and CEO, Glacier Bancorp: So the technology, Kelly, in terms of we are looking at it in a number of places. It’s making us more efficient. You’re seeing some of that in the reduction in the efficiency. And we’re continuing on those things. So implementation of a commercial loan platform across the entire company is really delivering really, really strong results.

That’s also welcomed by the folks that we’re acquiring. They get excited about the more advanced technology and the capabilities to do a lot of things that make their lives easier. And I think ultimately the customer have a better experience. Our treasury platform, we’re upgrading that and pushing that out right now. That’s going really well.

But that gives better tools to customers where they can manage their account and their finances more effectively. So those are just a couple of things, but we continue to look at our roadmap and look for ways to enhancing. And there’s more behind that. We just tend to wait until they’re out and getting traction before we really get into detail and describe them.

Kelly Motta, Analyst, KBW: Thanks Randy. I’ll step back.

Randy Chesler, President and CEO, Glacier Bancorp: You’re welcome.

Conference Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Randy Chesler for closing remarks.

Randy Chesler, President and CEO, Glacier Bancorp: Yes. Well, thank you everyone for joining us today. We appreciate your interest. As always, if any questions, give us a ring and have a fantastic weekend. Thanks again.

Conference Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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