Glacier Bancorp, Inc.

Good day, and thank you for standing by. Welcome to the Glacier Bancorp Third Quarter Earnings Conference Call. At this time, all participants are on 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 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, Glacier Bancorp President and CEO. Please go ahead.

Good morning and thank you for joining us today. With me here in Kalispell is Ron Cofer, our Chief Financial Officer, Byron Pollin, our Treasurer, Tom Dolan, our Chief Credit Administrator, Don Cherry, our Chief Administrative Officer, and joining us on the phone is Angela Dosey, our Chief Accounting Officer. 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. The positive organic trends that emerged in our first and second quarters continued and became more pronounced through our third quarter. In addition, in the third quarter, we finalized the purchase of six Montana branches from Heartland Financial of its Rocky Mountain Bank division, including the deposits, loans, owned real estate, and fixed assets associated with the branches, totaling $403 million in assets. We closed this transaction on July 19 and converted these branches to Glacier Systems over that weekend. This quarter we had strong EPS growth of 15% or 45 cents, primarily driven by increasing interest income and higher non-interest income. Net income was $51 million. which increased 6.3 million or 14% from the prior quarter net income of 44.7 million. Net interest margin grew 15 basis points from 2.68% to 2.83%. Net interest income was 180 million for the current quarter An increase of 13.8 million or 8% from the prior quarter net interest income. The loan portfolio of 17.1 billion increased 329 million or 2% during the current quarter and organically increased 57.6 million or 1% annualized during the current quarter. The loan yield of 5.69% in the current quarter increased 11 basis points from the prior quarter loan yield of 5.58%. Total core deposits of 20.7 billion increased 613 million or 3% during the current quarter and organically increased 216 million or 4% annualized during the current quarter. Non interest bearing deposits of 6.4 billion increased 314 million or 5% during the current quarter and organically increased 221 million or 14% annualized during the current quarter. Our total cost of funding in the quarter. including non-interest-bearing deposits, decreased one basis point from the prior quarter to a total cost of funding of 179 basis points. Core deposit cost, including non-interest-bearing deposits, was 1.37 percent for the current quarter compared to 1.36 percent in the prior quarter. Total non-interest expense of $145 million was within our expected range, increasing $3.8 million in the quarter or 3% over the prior quarter. While non-performing assets to bank assets and net charge-offs to average loans and early stage delinquencies increased slightly, our credit portfolio continues to perform at near record levels with no material negative trends emerging. The current quarter credit loss of 8 million included 3.6 million of provision for credit losses from the acquisition of Rocky Mountain Bank. Excluding the acquisition of Rocky Mountain Bank, the current quarter credit loss expense was 4.4 million, including 4.2 million of credit loss expense from loans and 225,000 of credit loss expense from unfunded loan commitments. Non-interest income for the current quarter totaled $34.7 million, which was an increase of $2.5 million or 8% over the prior quarter. Tangible stockholders' equity of $2.1 billion increased $68.1 million or 3% compared to the prior quarter and was primarily the result of a decrease an unrealized loss on the available for sale debt securities, which was partially offset by the increase in goodwill and core deposit intangibles associated with the Rocky Mountain Bank acquisition. We also declared a quarterly dividend of 33 cents per share. The company has declared 158 consecutive quarterly dividends and has increased the dividend 49 times. The Glacier team has done an excellent job taking care of our customers while growing the business organically and welcoming our new acquisitions. In 2024, we closed and converted two acquisitions during the year, totaling approximately $1.2 billion in assets. So that ends my formal remarks, and I would now like to ask the operator to open the line for any questions that our analysts may have.

And at this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by as we compile the Q&A roster.