Executive Summary / Key Takeaways

• Consistent Margin Expansion Driven by Structural Tailwinds: Glacier Bancorp has achieved seven consecutive quarters of net interest margin expansion, propelled by loan repricing, strategic FHLB deleveraging, and effective deposit cost management, with further growth anticipated through 2026.
• Strategic M&A Fuels Footprint and Scale: The company's disciplined acquisition strategy, exemplified by the recent Bank of Idaho and Guaranty Bancshares deals, is significantly expanding its presence in high-growth Western and Southwestern markets, enhancing scale and diversification.
• Robust Credit Quality Amidst Growth: Despite an active M&A environment and economic uncertainties, GBCI maintains strong credit quality with low non-performing assets and a conservative Allowance for Credit Losses, reflecting its disciplined underwriting and community-focused lending model.
• Operational Efficiency and Technological Integration: Ongoing investments in a commercial loan platform and treasury management systems are enhancing operational efficiency and customer experience, supporting growth and contributing to an improving efficiency ratio.
• Clear Outlook for Continued Financial Strength: Management projects continued margin growth, low to mid-single-digit organic loan growth, and significant cost synergies from recent acquisitions, positioning GBCI for sustained profitability and shareholder returns.

Glacier Bancorp: A Blueprint for Regional Bank Outperformance

Glacier Bancorp, Inc. (NYSE:GBCI), founded in 1955 and headquartered in Kalispell, Montana, has meticulously crafted a compelling investment narrative rooted in strategic expansion, disciplined financial management, and a deeply ingrained community banking ethos. Operating as a single, unified banking segment through its wholly-owned subsidiary, Glacier Bank, the company provides a comprehensive suite of retail and business banking services, including real estate, commercial, agriculture, and consumer loans, alongside mortgage origination and servicing. This model extends across Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona, and Nevada, with a recent, significant entry into Texas.

The company's history is marked by a consistent and successful acquisition strategy, having completed 27 bank acquisitions since 2000, with 13 announced in the last decade. This approach has allowed GBCI to expand its footprint strategically, particularly in high-growth markets. A pivotal move was its 2017 entry into the Southwest with the acquisition of Foothills Bank, further solidified by the State Bank of Arizona acquisition five years later. More recently, 2024 saw the integration of Rocky Mountain Bank branches and Wheatland Bank, collectively adding approximately $1.2 billion in assets. The momentum continued into 2025 with the April 30 acquisition of Bank of Idaho (BOID), adding approximately $1.4 billion in assets and strategically deepening GBCI's presence in Idaho and Eastern Washington. This was swiftly followed by the October 1, 2025, completion of the Guaranty Bancshares, Inc. (Guaranty) acquisition, valued at $559.98 million, which introduced GBCI to the Texas market with an additional $3.1 billion in assets. This consistent ability to execute and integrate acquisitions, even in a dynamic M&A environment, is a cornerstone of GBCI's growth.

Technological Edge and Operational Streamlining

Glacier Bancorp's commitment to operational excellence is underscored by its ongoing technological advancements, which serve as a critical differentiator and efficiency driver. The company is actively implementing a new commercial loan platform across the entire organization. This initiative is designed to deliver "really, really strong results" by streamlining processes, enhancing capabilities, and ultimately improving the customer experience.

Furthermore, GBCI is upgrading its treasury platform, a move that provides "better tools to customers where they can manage their account and their finances more effectively." While specific quantitative metrics on efficiency gains or cost reductions from these platforms are not explicitly detailed, the strategic intent is clear: to leverage technology to make operations "more efficient" and provide "more advanced technology and the capabilities to do a lot of things that make their lives easier." For investors, these technological investments are crucial as they contribute to GBCI's competitive moat by enhancing service delivery, potentially improving customer retention, and driving long-term operational leverage, which is vital for sustained profitability in a competitive banking landscape.

Competitive Positioning and Market Dynamics

Glacier Bancorp operates in a competitive landscape dominated by both larger regional players and other community banks. Key direct competitors include U.S. Bancorp (USB), Zions Bancorporation (ZION), First Interstate BancSystem (FIBK), and KeyCorp (KEY). GBCI's core strength lies in its community-focused, relationship-driven banking model, which fosters strong local ties and customer loyalty, particularly in the Western U.S. This approach allows GBCI to excel in niche lending segments, such as specialized agriculture and real estate loans, where its local expertise and personalized service can outcompete larger, more generalized institutions.

While GBCI's extensive branch network provides superior customer accessibility, especially in rural areas, it faces challenges from larger competitors like USB, which boast broader geographic reach and more advanced technological capabilities. GBCI's focus on "core Main Street lending" means it generally avoids stretching on loan structure, differentiating it from some competitors who might take on higher risks. New loan origination yields averaging 7.35% in Q2 2025 demonstrate GBCI's ability to maintain strong spreads, even amidst pricing competition in larger markets. The company's M&A strategy is also a competitive advantage, as its unique business model and proven ability to secure regulatory approvals quickly make it an "even more attractive" partner for sellers. This strategic positioning allows GBCI to effectively compete by leveraging its local market dominance and relationship-based approach, even as it continues to invest in technology to narrow any operational efficiency gaps with larger rivals.

Financial Performance: A Story of Margin Expansion

Glacier Bancorp delivered a robust financial performance in the third quarter of 2025, continuing a strong upward trajectory. Net income for Q3 2025 reached $67.9 million, marking a 29% increase from the prior quarter and a 33% increase year-over-year. Diluted earnings per share followed suit, rising 27% to $0.57 per share from $0.45 in both the prior quarter and the prior year's third quarter. For the first nine months of 2025, net income stood at $175.2 million, a 36% increase over the same period in the prior year.

The most compelling aspect of GBCI's recent performance is its sustained net interest margin (NIM) expansion. The company reported a tax-equivalent NIM of 3.39% in Q3 2025, an impressive 18 basis point increase from the prior quarter and a 56 basis point jump year-over-year. This marks the seventh consecutive quarter of margin expansion, a testament to the strength of its loan portfolio repricing, the ability to secure favorable margins on new loans, and a relentless focus on managing funding costs. The loan yield in Q3 2025 climbed to 5.97%, up 11 basis points sequentially and 28 basis points from the prior year. Concurrently, the total cost of funding decreased to 1.58%, down 5 basis points from the prior quarter, largely due to the strategic reduction of higher-cost Federal Home Loan Bank (FHLB) borrowings. Core deposit costs also saw a modest decline to 1.23% from 1.25% in the prior quarter.

Non-interest expense for Q3 2025 was $168 million, an 8% increase from the prior quarter, primarily attributable to acquisition-related costs, which totaled $7 million in the quarter. Despite this, the efficiency ratio improved to 62.05% in Q3 2025, down from 64.92% a year ago, indicating that net interest income growth outpaced the increase in non-interest expense.

Credit Quality: A Pillar of Stability

Glacier Bancorp's credit quality remains exceptionally strong, providing a solid foundation for its growth initiatives. Non-performing assets stood at a low 0.19% of total assets as of September 30, 2025. Net charge-offs were minimal at $2.9 million for Q3 2025, representing just three basis points of loans. The Allowance for Credit Losses (ACL) on loans was maintained at a conservative 1.22% of total loans outstanding, a level management believes is adequate to absorb estimated credit losses. This proactive stance, including an increase in the ACL in Q1 2025 "out of an abundance of caution," underscores GBCI's disciplined risk management approach.

While the agricultural sector has experienced some "outsized" pressures from depressed grain and hay prices, GBCI's banks are "faring quite well," securing assets with hard collateral rather than crops, and benefiting from experienced ag lenders. The company's Commercial Real Estate (CRE) portfolio, its largest loan category, is geographically diversified across its eight-state footprint, with an average loan balance of $802 thousand and an average loan-to-value ratio (LTV) of 58% as of September 30, 2025. GBCI has limited exposure to central business district office buildings, with its portfolio diversified in suburban and rural markets with strong occupancy levels. Management's rigorous loan reviews, stress tests, and sensitivity analyses, combined with a focus on "knowing your customer" and direct control over relationships, are key to mitigating credit risk.

Strategic Growth and Outlook

Glacier Bancorp's strategic growth is a dual-pronged approach, combining organic expansion with disciplined acquisitions. The loan portfolio grew by $258 million, or 6% annualized, during Q3 2025, with Commercial Real Estate continuing as a primary driver. Organically, the loan portfolio increased $535 million, or 3%, since the prior year's third quarter, excluding the Bank of Idaho acquisition. Total deposits reached $21.87 billion, growing 4% annualized in Q3 2025, with non-interest-bearing deposits increasing 5% annualized and comprising 31% of total deposits.

Management projects "low to mid-single-digit loan growth" organically for 2025, supported by consistent pipeline activity and growing customer optimism. The company's M&A strategy remains robust, with a "wheelhouse" target of banks between $1 billion and $3-5 billion in assets, preferring slightly larger acquisitions when entering new markets to achieve scale. The recent Bank of Idaho integration and the Guaranty Bancshares acquisition, which marks GBCI's entry into Texas, are expected to significantly expand its Southwest presence. The focus for Guaranty is on a "flawless conversion in 2026," with projected cost savings of a 20% reduction in non-interest expense, 50% of which is expected in 2026 and the remainder in 2027.

Looking ahead, GBCI anticipates continued margin growth of an additional 18 to 20 basis points in Q4 2025, including the impact of Guaranty. For 2026, continued margin growth is expected, though the pace of quarterly increase will likely moderate as the FHLB deleveraging benefits largely conclude by Q1 2026. The company's margin trajectory is "not Fed dependent," driven by the repricing of approximately $2 billion in loans in 2025 (expected to yield 100 to 125 basis points higher) and the runoff of low-yielding investment securities. Byron Pollan, the Treasurer, expressed confidence in reaching a 4% net interest margin, viewing it as "a matter of when, not if," potentially by the end of 2026. The tax rate for Q4 2025 is expected to be similar to Q3 2025, factoring in additional merger costs.

Capital and Shareholder Returns

Glacier Bancorp maintains a strong capital position, with tangible stockholders' equity increasing by $79.8 million (3%) from the prior quarter and $304 million (14%) from the prior year-end to $2.43 billion as of September 30, 2025. This increase was primarily driven by a decrease in other comprehensive loss and earnings retention, alongside $205 million of company stock issued for the Bank of Idaho acquisition. Tangible book value per common share rose to $20.46, up 8% year-over-year. The company's consistent return to shareholders is evident in its declaration of the 162nd consecutive quarterly dividend of $0.33 per share. Management believes both the Company and Glacier Bank meet all capital adequacy requirements.

Conclusion

Glacier Bancorp, Inc. presents a compelling investment thesis built on a foundation of strategic growth, robust financial performance, and disciplined risk management. The company's ability to consistently expand its net interest margin, driven by structural tailwinds in loan repricing and effective funding cost management, positions it for continued profitability. Its proven M&A strategy, exemplified by recent acquisitions like Bank of Idaho and Guaranty Bancshares, is effectively expanding its geographic footprint into high-growth markets, while its community-focused banking model and technological investments enhance its competitive standing.

Despite macroeconomic uncertainties and competitive pressures, GBCI's strong credit quality and conservative approach to risk provide stability. The clear outlook for sustained margin growth, organic loan expansion, and significant cost synergies from integrations underscores a positive trajectory. For discerning investors, Glacier Bancorp's blend of strategic execution, financial discipline, and commitment to shareholder returns makes it a noteworthy regional bank poised for continued outperformance.