Glacier Bancorp, Inc.

Good day and thank you for standing by. Welcome to the Glacier Bank Corp first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you 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, President and CEO of Glacier Bancorp. Please go ahead.

Well, good morning and thank you for joining us today. With me here in Kalispell is Ron Cofer, our Chief Financial Officer, Tom Dolan, our Chief Credit Administrator, Angela Dosey, our Chief Accounting Officer, Jeff Meredith, our chief investment officer, and joining us on the phone is Byron Pollin, our treasurer. I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined starting on page nine of our press release, and we encourage you to review this section. The positive trend of margin expansion driven by lower deposit costs and higher loan yields continued in the first quarter. Expense control was solid and credit performance continued to be excellent. Diluted earnings per share for the current quarter was $0.48 per share, an increase of 66% from the prior year first quarter diluted earnings per share. Net income was $54.6 million for the current quarter, an increase of $21.9 million, or 67%, from the prior year first quarter net income. The net interest margin as a percentage of earning assets on a tax equivalent basis for the current quarter was 3.04%. an increase of seven basis points from the prior quarter net interest margin, and an increase of 45 basis points from the prior year first quarter net interest margin of 2.59%. The margin has increased five quarters in a row, and this is the first time the margin is north of 3% in the last two years. We expect this trend to continue throughout the year. The total cost of funding, including non-interest bearing deposits, of 1.68% in the current quarter decreased three basis points from the prior quarter. The total core deposit cost, including non-interest bearing deposits, of 1.25% in the current quarter decreased four basis points from the prior quarter. The loan yield of 5.77% in the current quarter increased five basis points from the prior quarter loan yield and increased 31 basis points from the prior year first quarter. Total deposits of 20.6 billion increased 87.1 million or 2% annualized during the current quarter. Total loans of $17 billion decreased $48 million from the prior quarter due to accelerated payoffs. We don't expect this trend to continue and still feel good about our loan growth outlook for the year. Our customers acknowledge a certain amount of uncertainty in the economy, but most have not indicated they're going to pull back on projects. We had solid expense control in the quarter with non-interest expense of $153 million, which is just about flat to the first quarter a year ago. Non-interest income ended the quarter at $33 million, which increased 9% versus the first quarter a year ago. While our credit portfolio continues to perform at near record levels, We increased our allowance for credit loss to 1.22% of total loans from 1.19% last quarter. Now we did this out of an abundance of caution given the current uncertain economic environment. We don't expect to see material credit deterioration in 2025 and remain optimistic about the future, but want to be prepared if conditions change. At this point, we don't expect to increase our allowance for credit loss above 1.22%. Tangible stockholders' equity of $2.2 billion at the end of the quarter increased $67 million or 3% compared to the prior quarter and increased $147 million or 7% compared to the prior year first quarter. Tangible book value per common share of $19.28 at the current quarter end increased 57 cents per share or 3% from the prior quarter and increased $1.28 per share or 7% from the prior year first quarter. And we declared a quarterly dividend of 33 cents per share. we have declared 160 consecutive quarterly dividends and increased the dividend 49 times. The Glacier team continues to do an excellent job taking care of our existing customers and welcoming our new customers and acquisitions. In 2024, we closed and converted two transactions during the year. are purchase of the Rocky Mountain Bank branches in Montana and the acquisition of Wheatland Bank in eastern Washington, totaling approximately $1.2 billion in assets. And in the beginning of this quarter, we announced the proposed acquisition of Bank of Idaho, a $1.3 billion bank with locations in eastern Idaho, Boise, and eastern Washington. This is a great acquisition for Glacier because it strategically expands our presence in several high growth markets where we already have a presence. We have now received all regulatory approvals and expect to close this acquisition at the end of this month, moving from announcement to closing in under four months. Over the last few years, we have demonstrated that we can find good banks and good markets to partner with regardless of the broader M&A environment and quickly get regulatory approvals and move to closing with certainty. We believe this will work to our advantage in times like the present where fewer buyers have a strong currency to offer a fair deal and the M&A experience to provide the confidence of getting to closing. So that ends my formal remarks, and now I would like to turn the call back over to the operator to open the line for any questions that our analysts may have.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment as we move to our first question. Our first question comes from the line of Jeff Rulis with DA Davis, and your line is open. Please go ahead.