Glacier Bancorp, Inc.

Good day, everyone, and welcome to the Glacier Bond Corp third 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 participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note this conference is being recorded. Now it's my pleasure to turn the call over to Glacier's Bancorp's President and CEO, Randy Chesler. Please go ahead.

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, and 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 13 of our press release, and we encourage you to review this section. We delivered another excellent quarter, continuing our momentum with strong margin expansion, higher loan yields, lower deposit costs, and solid high-quality loan growth. We also completed the core conversion of the Bank of Idaho with assets of approximately $1.4 billion, and shortly after quarter end, we successfully closed the acquisition of Guaranteed Bank and Trust, adding $3.1 billion in assets and expanding our presence in the Southwest. Bank of Idaho was successfully folded into three of our existing divisions, Citizens Community in Pocatello, Mountain West in Boise, and Wheatland Bank in Eastern Washington. The Bank of Idaho brought us a terrific team of lenders and staff, as well as excellent customer relationships. The Guarantee Transaction marks our first entrance into the state of Texas, and we're excited about the long-term opportunities this brings. Our focus now is on delivering a flawless conversion in the first quarter of 2026 and making sure we have happy employees and customers. For the third quarter, Glacier Bancorp reported net income of $67.9 million, or $0.57 per diluted share. The third quarter net income represents an increase of 29% from the prior quarter and reflects a 33% increase in net income compared to the same quarter last year. Pre-tax, pre-provision net revenues of $250 million for the first nine months of the current year increased 77.1 million, or 45%, over the prior year first nine months. Our loan portfolio grew $258 million to $18.8 billion, or 6% annualized from the prior quarter. Commercial real estate continues to be a key driver of loan growth. Deposits also grew, reaching $22 billion, up 4% annualized from the last quarter. Non-interest-bearing deposits grew again this quarter, increasing 5% annualized and now representing 31% of total deposits. We reported net interest income of 225 million up 18 million or 9% from the prior quarter and up 45 million or 25% from the same quarter last year. Our net interest margin on a tax adjusted basis expanded to 3.39% up 18 basis points from the prior quarter and up 56 basis points year over year. This marks our seventh 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 5.97% in the current quarter increased 11 basis points from the prior quarter and increased 28 basis points from the prior year third quarter. The total earning asset yield of 4.86% in the current quarter increased 13 basis points from the prior quarter and increased 34 basis points from the prior year third quarter. Total cost of funding declined to 1.58% down five basis points from the prior quarter. as we reduced higher cost federal home loan bank borrowings by $360 million. Core deposit costs decreased in the quarter to 1.23% from 1.25% in the prior quarter. Non-interest expense was $168 million, up $13 million or 8% from the second quarter, primarily due to increase cost from acquisitions. Non-interest income totaled $35 million in the current quarter, up $2.4 million, or 7% from the prior quarter, and up 2% year over year. Service charges and fees increased 5% from the prior quarter, while gains on loan sales increased 18% from the prior quarter. Our efficiency ratio remained at 62%, down from 65% a year ago with good momentum for continued steady reduction. Credit quality remains very strong. Our non-performing assets remain low at 0.19% of total assets, and net charge-offs were $2.9 million for the quarter, or three basis points of loans. Our allowance for credit remains at 1.22% of total loans, reflecting our conservative approach to risk management. We continue to maintain a strong capital position with tangible stockholders equity increasing 304 million or 14% in the current year. Tangible book value per share increased to $20.46, up 8% year over year. And we declared our 162nd consecutive quarterly dividend of 33 cents 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 operator to open the line for any questions that our analysts may have.

Thank you, and as a reminder, to ask a question, simply press star 11 to get in the queue and wait for your name to be announced. to remove yourself, press star 11 again. Please stand by while we compile the Q&A roster. One moment for our first question that comes from the line of Jeff Rulis with DA Davidson. Please go ahead.