Glacier Bancorp, Inc.

Good day and thank you for standing by. Welcome to the Glacier Bancorp Fourth 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 the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 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.

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 Pollan, our treasurer. I'd like to point out that the discussion today is subject to the same forward-looking considerations outlined on page 14 of our press release, and we encourage you to review this section. 2025 was a transformative year for Glacier Bancorp. We successfully closed two strategic acquisitions, Bank of Idaho in April and Guaranty Bank and Trust in October. growing our footprint in fast-growing Idaho and expanding our southwest region to include the great state of Texas. These markets offer strong growth potential and fit seamlessly with our long-term growth strategy. We converted the Bank of Idaho business operating platform in September and plan to convert Guaranty Bank and Trust in February. This was the largest acquisition year in our history, with over $4.7 billion acquired, topping our previous record of $4.1 billion in 2021. We delivered strong financial results in 2025 with significant growth in all key metrics. We also delivered an excellent quarter, continuing our momentum with strong margin expansion, higher loan yields, lower cost of funding, and solid high-quality loan growth. the company's total assets exceeded 30 billion in the quarter, ending the year at 32 billion in total assets, which was another record for the company. Net income was 63.8 million for the quarter, including the 36 million of expenses related to our two 2025 acquisitions. Net income for 2025 was $239 million, an increase of $48.9 million, or 26% from the prior year net income, and was driven by the two acquisitions and our disciplined approach to increasing our net interest margin during the year. Pre-tax, pre-provision net revenues of $362 million for 2025 increased $107 million, or 42% over the prior year. Diluted earnings per share for the quarter was $0.49 per share. Diluted earnings per share for 2025 was $1.99 per share, an increase of $0.31 per share or 18% from the prior year. Net interest income of $266 million for the quarter increased $41 million or 18% from the prior quarter. Net interest income of $889 million for 2025 increased $184 million or 26% from the prior year. The loan portfolio of $21 billion at the end of 2025 increased $2 billion or 11% from the prior quarter. For 2025, the loan portfolio increased $3.7 billion or 21%. Total deposits of $24.6 billion increased $2.7 billion or 12% from the prior quarter. Total deposits increased $4 billion or 20% during 2025. The net interest margin as a percentage of earning assets on a tax equivalent basis for the quarter was 3.58%. An increase of 19 basis points from the prior quarter and an increase of 61 basis points from the prior year fourth quarter. The loan yield of 6.09% in the quarter increased 12 basis points from the prior quarter and increased 37 basis points from the prior year fourth quarter. The total earning asset yield of 5% in the quarter increased 14 basis points from the prior quarter and increased 43 basis points from the prior year fourth quarter. The total cost of funding including non-interest bearing deposits of 1.52% in the quarter decreased six basis points from the prior quarter and decreased 19 basis points from the prior year fourth quarter. Total non-interest expense of 195 million for the quarter increased 26.8 million or 16% over the prior quarter primarily due to the increased costs from our two acquisitions included in non interest expense for the quarter was 24 million from the guarantee bank and trust acquisition and 3 million of expenses related to vacating branch locations. Non interest income for the quarter totaled 40 million, which was an increase of 5 million or 14% over the prior quarter and was up 28% over the prior year fourth quarter. Service charges and fees increased 14% from the prior quarter and increased 20% over the prior year fourth quarter. In 2025, our efficiency ratio dropped from 66.7 at the beginning of the year to 63%, showing good momentum for continued steady reduction. Credit quality remains at historically low levels. Our nonperforming assets remain low at 22 basis points of total assets. with a slight increase from the prior quarter driven primarily by the acquisition of guaranteed bank and trust. Net charge-offs were six basis points of total loans for the year compared to eight basis points in the prior year. Our allowance for credit remains at 1.22% of total loans, reflecting our conservative approach to risk management. We continue to improve our strong capital position with tangible stockholders equity increasing 609 million or 29% in 2025. Tangible book value per share increased to $21, up 12% year over year. And in November, we declared our 163rd consecutive quarterly dividend of 33 cents per share. underscoring our commitment to delivering consistent shareholder returns. We are very pleased with the performance in the fourth quarter and for the full year 2025. Our exceptional team, expanding footprint, unique business model, strong business performance, disciplined credit culture, and strong capital base provide a very solid foundation for future growth. So that ends my formal remarks, and I would now like the operator to open the line for any questions 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. Please stand by while we compile the Q&A roster. And our first question comes from David Feaster of Raymond James. Your line is open.