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    GBCI
    Earnings call· Jun 2026(Q2 FY26)

    GLACIER BANCORP, INC. GBCI

    Jul 24, 2026 Source

    Executive summary

    Glacier Bancorp Q2 FY26 — Strong Net Interest Income and Margin Expansion

    Glacier Bancorp delivered strong Q2 FY26 results, driven by significant net interest income and margin expansion, alongside improved operating efficiency. The company maintained disciplined loan growth and a stable funding profile, with deposit costs declining. Management expressed confidence in continued margin expansion and balance sheet growth for the remainder of the year, while actively capitalizing on market disruptions to attract new customers and talent.

    Highlights

    7

    • Net income increased 19% quarter-over-quarter to $97.9 million and 85% year-over-year.

    • Diluted earnings per share grew 19% quarter-over-quarter to $0.75 and 67% year-over-year.

    • Net interest income rose 3% quarter-over-quarter to $276 million and 33% year-over-year.

    • Tax equivalent net interest margin expanded to 3.9%, up 10 basis points quarter-over-quarter and 69 basis points year-over-year.

    • Operating efficiency ratio improved significantly to 56.21% from 63.05% in the prior quarter.

    • Total cost of funding declined to 1.33%, down 7 basis points quarter-over-quarter and 30 basis points year-over-year.

    • Loans grew by $330 million, or 6% annualized, quarter-over-quarter to $21.4 billion.

    Concerns

    1

    • Nonperforming assets increased modestly, though they remained low as a percentage of subsidiary assets.

    Guidance & targets

    6
    CategoryTargetConfidence
    Quarterly Operating Expenses
    $187 million to $192 million
    medium materiality
    High
    Net Interest Margin (NIM)
    4%
    high materiality
    High
    Net Interest Margin (NIM)
    north of 4%
    high materiality
    High
    Net Interest Margin (NIM)
    continued increase
    high materiality
    Medium
    Deposit Costs
    stable
    medium materiality
    Medium
    Average Earning Assets (AEA)
    increase
    medium materiality
    High

    Operational metrics

    7
    Pretax preprovision net revenue (PPNR)
    $130.8 millionup 23% from the prior quarter and up 53% from the second quarter a year ago
    Q2 FY26
    Total cost of funding
    1.33%down 7 basis points from the prior quarter and down 30 basis points from the second quarter of last year
    Q2 FY26
    Core deposit costs (including noninterest-bearing)
    1.18%down 2 basis points from the prior quarter
    Q2 FY26

    Spot rate at June 30 was also 1.18%.

    Noninterest-bearing deposits as % of total deposits
    30%consistent with the last quarter and the second quarter a year ago
    Q2 FY26
    Loan production yields
    in excess of 5%
    Q2 FY26

    Consistently seen throughout the quarter.

    Securities purchases
    $250 million
    Q2 FY26

    Company dipped toes back into the bond market.

    Average Earning Assets (AEA)
    —declined in Q2
    Q2 FY26

    Decline was an echo of prior deleveraging, specifically the pay down of FHLB advances which completed late in Q1. Expected to increase in Q3 and Q4.

    Industry KPIs

    10
    MetricValueDetails
    Loans$21.4 billionUSD
    Deposits$24.5 billion (average), $24.7 billion (period-end)USD
    Capital returns$0.33USD per share
    Allowance reserves1.22%%
    Net interest income$276 millionUSD
    Net interest margin3.9%%
    Net charge offs npls—
    Total operating expenses—
    Provision for credit losses—
    Efficiency ratio operating leverage56.21%%

    Deals & partnerships

    1
    Unnamed potential targetsM&A discussions with potential targets

    Internal discussions with potential M&A targets are moving along at a good pace. The investment banker pipeline for official deals remains muted but is expected to increase towards the end of the year. The company is also capitalizing on market disruption from other bank acquisitions to attract customers and talent.

    Risks & headwinds

    2
    Modest increase in nonperforming assetsQ2 FY26

    increased modestly

    Mitigation: remained low as a percentage of subsidiary assets

    Headwinds in the ag sectorOngoing

    some headwinds in that industry

    Mitigation: Focus on long-time, multigenerational farming families who have lived through these cycles.

    What to watch in Q3 FY26

    5

    Net Interest Margin (NIM) Trajectory

    Early Q4 FY26, exit FY26
    Current3.9%
    Target>4%

    Why it matters

    NIM expansion is a key driver of profitability, and management expects it to continue growing, reaching 4% early in Q4 and exceeding it by year-end.

    I do think we'll hit that 4% level early in the fourth quarter of and we'll keep going from there. So when you think about an exit margin for '26, I do expect we'll be north of 4%.

    Q&A highlights

    5

    What was the spot rate for deposit costs at quarter-end, and what is the outlook assuming the Fed remains on hold?

    The spot deposit cost at June 30 was 1.18%, in line with the quarterly average. Management expects deposit costs to remain stable from here, assuming the Fed stays on hold, but would adjust the outlook if rates increase.

    “June 30, our deposit cost was [ $118 million ] in line with our average for the quarter. So in terms of our outlook, I do think our deposit costs will likely be stable from here.”

    asked by Matthew Clark · answered by Byron Pollan

    2 min read6 chapters

    Detailed Narrative

    01

    Margin Expansion and Funding Profile

    Glacier Bancorp continued to demonstrate strong margin expansion, with its tax equivalent net interest margin reaching 3.9%, a 10 basis point increase quarter-over-quarter and 69 basis points year-over-year. This was supported by a declining total cost of funding, which fell to 1.33%, down 7 basis points quarter-over-quarter and 30 basis points year-over-year. Core deposit costs, including noninterest-bearing deposits, were stable at 1.18%, and noninterest-bearing deposits remained a significant portion of total deposits at 30%.

    02

    Loan and Deposit Growth

    The company reported broad-based loan growth, with loans ending the quarter at $21.4 billion, an annualized increase of 6% or $330 million quarter-over-quarter. Total average deposits were $24.5 billion, up 2% annualized, comfortably supporting liquidity and funding strategy. Management noted that Q2 and Q3 are typically stronger quarters for loan growth, with healthy pipelines, construction draws, and the ag growth season contributing to continued momentum.

    03

    Credit Quality and Reserves

    Credit quality remained excellent, consistent with Glacier Bancorp's disciplined underwriting culture. Early stage delinquencies declined from the prior quarter, and nonperforming assets, while modestly increased, remained low as a percentage of subsidiary assets. The allowance for credit loss stood at a conservative 1.22% of total loans, reflecting a consistent approach to reserving. The ag sector is being watched closely due to some headwinds, but the company's focus on long-time, multigenerational operators provides mitigation.

    04

    Efficiency and Expense Management

    Expenses were well controlled in the quarter, leading to a significant improvement in the operating efficiency ratio to 56.21% from 63.05% in the prior quarter. Acquisition-related expenses declined meaningfully from the first quarter. Management provided guidance for quarterly expenses to remain between $187 million and $192 million for the second half of the year, allowing for potential discretionary spending.

    05

    Capital Management and M&A Outlook

    Glacier Bancorp's capital position is strong and continues to build with earnings growth, providing flexibility for capital return. While M&A activity from an investment banker perspective remains somewhat muted, the company is engaged in internal discussions and anticipates an increase in deal flow towards year-end. Management emphasized evaluating all options for capital return, given the strong capital build.

    06

    Competitive Dynamics and Market Disruption

    The company benefits from its presence in more rural areas and a focus on core relationships, contributing to lower deposit costs and rational competition. Glacier Bancorp is actively capitalizing on market disruption🌐, particularly in Colorado following PNC's acquisition of First Bank, and in Texas by attracting talent due to recent acquisitions. These trends are leading to favorable customer and talent acquisition for the company.

    AI-generated summary of the company’s earnings call. Not investment advice.