Glacier Bancorp, Inc.

Good day and thank you for standing by. Welcome to the Glacier Bancorp second quarter 2026 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.

Well, good morning and thank you for joining us today. With me here in Kalispell is Ron Copher, our Chief Financial Officer, Tom Dolan, our Chief Credit Administrator, Angela Dose, 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. Last night we issued our earnings release for the second quarter and we believe it represents another quarter of strong results. Net income was $97.9 million for the second quarter, up 19% from the prior quarter and up 85% from the second quarter of last year. Diluted earnings per share were $0.75, up 19% from the prior quarter and up 67% from the prior year second quarter. A key driver of our strong performance continues to be net interest income and margin expansion. Net interest income increased to $276 million or 3% from the first quarter and up 33% from the second quarter of last year. Our tax equivalent net interest margin expanded to 3.9% up 10 basis points from the first quarter and up 69 basis points from the prior year second quarter. From a pre-tax, pre-provision net revenue perspective, our PPNR for the second quarter was $130.8 million, an increase of 23% from the prior quarter and an increase of 53% from the second quarter a year ago. We also saw continued improvement in our funding profile. The total cost of funding declined to 1.33%, down 7 basis points from the prior quarter and down 30 basis points from the second quarter of last year. Core deposit cost, including non-interest bearing deposits, was 1.18%, down 2 basis points from the prior quarter. Noninterest-bearing deposits remained at 30% of total deposits for the quarter, consistent with the last quarter and the second quarter a year ago. Turning to the balance sheet, loans ended the quarter at $21.4 billion, increasing $330 million, or 6% annualized from the first quarter. Loan growth was broad-based and reflected our continued focus on disciplined production in attractive markets. Total average deposits were $24.5 billion for the quarter, up $112 million or 2% annualized from the prior quarter. Period end deposits were $24.7 billion, down slightly from the prior quarter, but overall deposit levels remain stable and continue to comfortably support our liquidity and funding strategy. Credit quality remains excellent, consistent with our disciplined underwriting culture. Early stage delinquencies declined from the prior quarter, while non-performing assets increased modestly but remained low as a percentage of subsidiary assets. Our allowance for credit loss at 1.22% of total loans reflects our conservative and consistent approach to reserving. Expenses were well controlled in the quarter. Acquisition related expenses declined meaningfully from the first quarter and the operating efficiency ratio improved to 56.21% compared to 63.05% in the prior quarter. For the first half of the year, net income was $180 million, an increase of 68% from the prior year first half. Diluted earnings per share for the first half of 2026 was $1.38 per share, an increase of 48% from the prior year first half. Net Interest Income for the first half of 2026 was $545 million, an increase of 37% from the prior year first half. The loan portfolio increased $2.831 billion, or 15%, from the prior year first half. Total deposits increased The net interest margin as a percentage of earning assets on a tax-equivalent basis for the first half of 2026 was 3.85%, an increase of 73 basis points from the prior year first half. These results clearly show the earnings and operating momentum that has occurred across the company. During the quarter, the Board declared a quarterly dividend of 33 cents per share. This marks our 165th consecutive quarterly dividend, and we have increased the dividend 49 times over our history. We are encouraged by the results for the second quarter, and through the first half of the year. The continued progress in margin efficiency and disciplined balance sheet growth driven by Glacier's community banking model give us a solid foundation for the remainder of 2026. With that, I will ask the operator to open the line for any questions.

Thank you. As a reminder, to ask a question, please 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 while we compile the Q&A roster. And our first question comes from Matthew Clark of Piper Sandler. Your line is open.