Glacier Bancorp, Inc.: Form 10-Q for the period ended Mar 31, 2026

The following management’s discussion and analysis is intended to provide a more comprehensive review of the Company’s operating results and financial condition than can be obtained from reading the Consolidated Financial Statements alone. The discussion should be read in conjunction with the Consolidated Financial Statements and the notes thereto included in “Part I. Item 1. Financial Statements.”

FORWARD-LOOKING STATEMENTS

This Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the Company’s plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “will” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control. In addition, these forward-looking statements are based on assumptions that are subject to change. The following factors, among others, including additional factors identified in the sections titled “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as applicable, in this report and in the Company’s 2025 Annual Report on Form 10-K, could cause actual results to differ materially from the anticipated results (express or implied) or other expectations in the forward-looking statements:

• risks associated with lending and potential adverse changes in the credit quality of the Company’s loan portfolio;
• changes in monetary and fiscal policies, including interest rate policies of the Federal Reserve Board, which could adversely affect the Company’s net interest income and margin, the fair value of its financial instruments, profitability, and stockholders’ equity;
• legislative or regulatory changes, including the possibility of increases in FDIC insurance rates and assessments, changes in the review and regulation of bank mergers, or increases or changes in banking and consumer protection regulations, that may adversely affect the Company’s business and strategies;
• risks related to overall economic conditions, including the impact on the economy of an uncertain interest rate environment, inflationary pressures, recently passed legislation and the potential for significant additional changes in economic and trade policies in the current administration;
• risks to the Company’s business and the business of the Company’s customers arising from current or future tariffs or other trade restrictions, labor or supply chain issues, change in labor force, or geopolitical instability, including the wars in Iran and Ukraine, further conflicts in the Middle East, and potential for future conflicts or disruptions in other parts of the world;
• risks associated with the Company’s ability to negotiate, complete, and successfully integrate acquisitions;
• costs or difficulties related to the completion and integration of future or recently completed acquisitions;
• impairment of the goodwill recorded by the Company in connection with acquisitions, which may have an adverse impact on earnings and capital;
• reduction in demand for banking products and services, whether as a result of changes in customer behavior, economic conditions, banking environment, or competition;
• deterioration of the reputation of banks and the financial services industry, which could adversely affect the Company's ability to obtain and maintain customers;
• changes in the competitive landscape, including as may result from new market entrants, additional competition from internet-based financial institutions operating nationally, or further consolidation in the financial services industry, resulting in increased competition, including the creation of larger competitors with greater financial resources;
• risks presented by public stock market volatility, which could adversely affect the market price of the Company’s common stock and the ability to raise additional capital or grow through acquisitions;
• Risks related to rapidly evolving artificial intelligence technologies;
• risks associated with dependence on the Chief Executive Officer, the senior management team and the Presidents of Glacier Bank’s divisions;
• material failure, potential interruption or breach in security of the Company’s systems or changes in technology which could expose the Company to cybersecurity risks, fraud, system failures, or direct liabilities;
• risks related to natural disasters, including droughts, fires, floods, earthquakes, pandemics, and other unexpected events;
• success in managing risks involved in any of the foregoing; and
• effects of any reputational damage to the Company resulting from any of the foregoing.

Forward looking statements speak only as of the date of this Form 10-Q. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measures

Certain financial measures and ratios the Company presents are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). The Company refers to these financial measures and ratios as “non-GAAP financial measures.” A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is provided within this Form 10Q. The Company considers the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and in evaluating period-to-period comparisons. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance by excluding certain income or intangible items that the Company believes are not indicative of its primary business operating results.

These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP and investors should not rely on non-GAAP financial measures alone as measures of our performance. The non-GAAP financial measures presented may differ from non-GAAP financial measures used by the Company’s peers or other companies. The Company compensates for these differences by providing the equivalent GAAP measures whenever the Company presents the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Financial Highlights

(Dollars in thousands, except per share and market data)

48

1 Represents a non-GAAP financial measure. Supplemental “Non-GAAP Financial Measures and Reconciliations” tables are provided to reconcile the most directly comparable financial measure calculated and presented in accordance with GAAP.

The Company reported net income of $82.1 million for the current quarter, an increase of $18.4 million, or 29 percent, from the prior quarter net income of $63.8 million and an increase of $27.6 million, or 51 percent, from the prior year first quarter net income of $54.6 million. Diluted earnings per share for the current quarter was $0.63 per share, an increase of $0.14 per share, or 29 percent, from the prior quarter diluted earnings per share of $0.49 and an increase of $0.15 per share, or 31 percent, from the prior year first quarter diluted earnings per share of $0.48. Diluted operating earnings per share for the current quarter was $0.70 per share, an increase of $0.01 per share, or 1 percent, from the prior quarter diluted operating earnings per share of $0.69 and an increase of $0.23 per share, or 49 percent, from the prior year first quarter diluted operating earnings per share of $0.47. The current quarter included $8.9 million in acquisition-related expenses and $2.8 million of compensation from acquisition-related employment agreements.

Market Conditions

The current macroeconomic and geopolitical environment is subject to a number of uncertainties, including geopolitical conflicts, tariffs (or the threat thereof) or other changes in trade policies, capital markets volatility, and inflation. These and other factors may contribute to slower or negative economic growth and a challenging business environment for banking customers. The Company continues to monitor the changing macroeconomic and geopolitical environment and any potential future negative impact on our financial condition or results of operations. For more information about these risks, see “Part II, Item 1A, Risk Factors” below.”

Financial Condition Analysis

Assets

The following table summarizes the Company’s assets as of the dates indicated:

(Dollars in thousands)

1 In connection with the current quarter core system conversion from the acquisition of Guaranty Bancshares, Inc. and its wholly owned subsidiary, Guaranty Bank & Trust (collectively, “Guaranty”), Guaranty loans were reclassified to conform to the Company’s classifications. There were approximately $236 million of loans reclassified from residential loans into other categories, the majority of which were reclassified to commercial real estate loans.

The Company continues to maintain a strong cash position of $1.385 billion at March 31, 2026, which was an increase of $150 million, or 12 percent, over the prior quarter and an increase of $404 million, or 41 percent, over the prior year first quarter. Total debt securities of $6.644 billion at March 31, 2026 decreased $474 million, or 7 percent, during the current quarter and decreased $790 million, or 11 percent, from the prior year first quarter. Debt securities represented 21 percent of total assets at March 31, 2026 compared to 22 percent at December 31, 2025 and 27 percent at March 31, 2025.

The loan portfolio of $21.034 billion at March 31, 2026 increased $106 million, or 2 percent annualized, during the current quarter. The loan portfolio increased $3.815 billion, or 22 percent, from the prior year first quarter. Excluding the acquisition of Bank of Idaho Holding Co. and its wholly owned subsidiary, Bank of Idaho (collectively, “BOID”) on April 30, 2025 and the Guaranty acquisition on October 1, 2025, the loan portfolio organically increased $638 million, or 4 percent, from the prior year first quarter.

Liabilities

The following table summarizes the Company’s liabilities as of the dates indicated:

(Dollars in thousands)

Total deposits of $24.7 billion at March 31, 2026 increased $151 million, or 2 percent annualized, during the current quarter and increased $4.108 billion, or 20 percent, from the prior year first quarter. Excluding the BOID and Guaranty acquisitions, total deposits organically increased $323 million, or 2 percent, from the prior year first quarter.

Non-interest bearing deposits of $7.427 billion at March 31, 2026 increased $113 million, or 6 percent annualized, from the prior quarter and increased $1.327 billion, or 22 percent, from the prior year first quarter. Excluding the BOID and Guaranty acquisitions, total non-interest bearing deposits organically increased $223 million, or 4 percent, from the prior year first quarter. Non-interest bearing deposits represented 30 percent of total deposits at each of March 31, 2026, December 31, 2025 and March 31, 2025.

The remaining $440 million of Federal Home Loan Bank (“FHLB”) advances were paid off during the current quarter. Subordinated debentures of $188 million increased $54.9 million, or 41 percent, from the prior year first quarter as a result of acquisitions. See “Additional Management’s Discussion and Analysis - Source of Funds - Borrowers” for additional information regarding borrowings.

Stockholders’ Equity

The following table summarizes the stockholders’ equity ratios as of the dates indicated:

(Dollars in thousands, except per share data)

1 Represents a non-GAAP financial measure. Supplemental “Non-GAAP Financial Measures and Reconciliations” tables are provided to reconcile the most directly comparable financial measure calculated and presented in accordance with GAAP.

Tangible stockholders’ equity of $2.770 billion at March 31, 2026 increased $39 million, or 1 percent, compared to the prior quarter and was primarily due to earnings retention. Tangible stockholders’ equity at March 31, 2026, increased $581 million, or 27 percent, from the prior year first quarter, primarily due to $765 million of Company stock issued in connection with the acquisitions of BOID and Guaranty and an $87 million decrease in other comprehensive loss. The increase was partially offset by the increase in goodwill and core deposit intangible associated with the BOID and Guaranty acquisitions. Tangible book value per common share of $21.29 at the current quarter end increased $0.28 per share, or 1 percent, from the prior quarter and increased

$2.01 per share, or 10 percent, from the prior year first quarter.

Cash Dividend

On March 25, 2026, the Company’s Board of Directors declared a quarterly cash dividend of $0.33 per share. The dividend was payable April 16, 2026 to shareholders of record on April 7, 2026. The dividend was the Company’s 164th consecutive regular dividend. Future cash dividends will depend on a variety of factors, including net income, capital, asset quality, general economic conditions and regulatory considerations.

Operating Results for Three Months Ended March 31, 2026

Compared to December 31, 2025, and March 31, 2025

Income Summary

The following table summarizes income for the periods indicated:

(Dollars in thousands)

1 Represents a non-GAAP financial measure. Supplemental “Non-GAAP Financial Measures and Reconciliations” tables are provided to reconcile the most directly comparable financial measure calculated and presented in accordance with GAAP.

Net Interest Income

Net interest income of $269 million for the current quarter increased $2.6 million, or 1 percent, from the prior quarter net interest income of $266 million and increased $78.7 million, or 41 percent, from the prior year first quarter net interest income of $190 million. The current quarter interest income of $362 million decreased $10.4 million, or 3 percent, over the prior quarter, which primarily attributable to a decrease in debt securities. The current quarter interest income increased $72.4 million, or 25 percent, over the prior year first quarter and was primarily driven by both increased loans and increased interest rates on earning assets. The loan yield of 6.16 percent in the current quarter increased 7 basis points from the prior quarter loan yield of 6.09 percent and increased 39 basis points from the prior year first quarter loan yield of 5.77 percent.

The current quarter interest expense of $93.7 million decreased $13.0 million, or 12 percent, from the prior quarter, primarily due to a decrease in interest rates on deposits and a decrease in higher cost borrowings. The current quarter interest expense decreased $6.3 million, or 6 percent, from the prior year first quarter and was primarily attributable to the decrease in higher cost borrowings. Deposit cost (including non-interest bearing deposits) decreased to 1.20 percent in the current quarter compared to 1.26 percent in the prior quarter and 1.25 percent in the prior year first quarter.

The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter was 3.80 percent, an increase of 22 basis points from the prior quarter net interest margin of 3.58 percent and was primarily driven by an increase in loan yields and a decrease in the total cost of funding. The net interest margin as a percentage of earning assets, on a tax-equivalent basis, for the current quarter increased 76 basis points from the prior year first quarter net interest margin of 3.04 percent and was also primarily driven by the increase in loan yields and the decrease in the total cost of funding. Core net interest margin was 3.73 percent in the current quarter compared to 3.51 percent in the prior quarter and 2.98 percent in the prior year first quarter, with the increases also being primarily driven by an increase in loan yields and a decrease in total cost of funding.

Non-interest Income

Non-interest income for the current quarter totaled $38.1 million, which was a decrease of $2.4 million, or 6 percent, over the prior quarter and an increase of $5.4 million, or 17 percent, over the prior year first quarter. Deposit service charges and other fees of $15.3 million for the current quarter decreased $639 thousand, or 4 percent, compared to the prior quarter and was primarily due to seasonal fluctuations. Payment services of $11.4 million for the current quarter decreased $1.3 million, or 10 percent, from the prior quarter and was also primarily driven by seasonal fluctuations. Deposit service charges and other fees increased $2.1 million, or 15 percent, compared to the prior year first quarter and payment services increased $2.0 million, or 22 percent, over the prior year first quarter. Gain on the sale of residential loans of $5.1 million for the current quarter increased $514 thousand, or 11 percent, compared to the prior quarter and increased $797 thousand, or 18 percent, from the prior year first quarter. Other income of $4.1 million in the current quarter decreased $742 thousand, or 15 percent, and was primarily attributable to an $825 thousand decrease in income related to bank owned life insurance proceeds.

Non-interest Expense

The following table summarizes non-interest expense for the periods indicated:

(Dollars in thousands)

Total non-interest expense of $201 million for the current quarter increased $6.0 million, or 3 percent, over the prior quarter. Total non-interest expense increased $49.2 million, or 33 percent, over the prior year first quarter and was primarily driven by increased costs from the BOID and Guaranty acquisitions. Compensation and employee benefits of $116 million for the current quarter increased by $4.8 million, or 4 percent, over the prior quarter, which was primarily driven by annual salary increases and increased employee benefits.

Compensation and employee benefits increased $24.3 million, or 27 percent, from the prior year first quarter and was primarily driven by annual salary increases and increases in staffing levels from the BOID and Guaranty acquisitions. Occupancy and equipment expense of $15.7 million decreased $1.8 million, or 11 percent, from the prior quarter and was primarily due to the prior quarter including $1.1 million of expenses related to vacating branch locations. Regulatory assessment and insurance expense of $6.4 million increased $908 thousand, or 17 percent, from the prior quarter, primarily from a $739 thousand decrease in expense reduction in the prior quarter related to an FDIC special assessment.

Other expenses of $39.1 million increased $1.6 million, or 4 percent, from the prior quarter and was primarily driven by increased acquisition-related expenses.

Acquisition-related expense was $8.9 million in the current quarter compared to $5.8 million in the prior quarter and $587 thousand in the prior year first quarter. In addition, compensation and employee benefits included $2.8 million of expense attributable to acquisition-related employment agreements in the current quarter compared to $2.9 million in the prior quarter and $251 thousand in the prior year first quarter.

Efficiency Ratio

The efficiency ratio was 63.05 percent in the current quarter compared to 61.04 percent in the prior quarter and 65.49 percent in the prior year first quarter. The increase from the prior quarter was principally driven by the increase in acquisition-related expenses. The decrease from the prior year first quarter was primarily due to the increase in net interest income which outpaced the increase in non-interest expense.

Provision for Credit Losses for Loans

The following table summarizes provision for credit losses for loans, net charge-offs and select ratios relating to provision for credit losses for the previous eight quarters:

(Dollars in thousands)

Net charge-offs for the current quarter were $3.1 million compared to $6.4 million in the prior quarter and $1.8 million for the prior year first quarter. The current quarter net charge-offs included $2.2 million in deposit overdraft net charge-offs and $896 thousand of net loan charge-offs.

The current quarter provision for credit loss expense of $6.1 million included $3.5 million of credit loss expense on loans and $2.6 million of credit loss expense on unfunded loan commitments.

The allowance for credit losses (“ACL”) on loans as a percentage of total loans outstanding was 1.22 percent at each of March 31, 2026, December 31, 2025 and March 31, 2025. Loan portfolio growth, composition, average loan size, credit quality considerations, economic forecasts, actual results, and other environmental factors will continue to determine the level of the ACL on loans. The determination of the ACL on loans and the related provision for credit losses is a critical accounting estimate that involves management’s judgments about the loan portfolio that impact credit losses. For additional information on the allowance, see the Allowance For Credit Losses section under “Additional Management’s Discussion and Analysis.”

Non-GAAP Financial Measures and Reconciliations

(Dollars in thousands)

54

(Dollars in thousands)

1 Includes tax effect of 3.7 million, 3.6 million and 3.4 million on tax-exempt municipal loan and lease income, tax-exempt debt securities income and federal income tax credits for the three months ended March 31, 2026 , December 31, 2025, and March 31, 2025, respectively.

(Dollars in thousands)

55

ADDITIONAL MANAGEMENT’S DISCUSSION AND ANALYSIS

Investment Activity

The Company’s investment securities primarily consist of debt securities classified as either AFS or HTM. Equity securities primarily consist of capital stock issued by the FHLB of Des Moines.

Debt Securities

Debt securities classified as AFS are carried at estimated fair value and debt securities classified as HTM are carried at amortized cost. Unrealized gains or losses, net of tax, on AFS debt securities are reflected as an adjustment to OCI. The Company’s debt securities are summarized below:

(Dollars in thousands)

The Company’s debt securities were primarily comprised of U.S. government and federal agency and mortgage-backed securities. State and local government securities are largely exempt from federal income tax and the Company’s federal statutory income tax rate of 21 percent is used in calculating the tax-equivalent yields on the tax-exempt securities. Mortgage-backed securities largely consists of short, weighted-average life U.S. agency guaranteed residential and commercial mortgage pass-through securities and to a lesser extent, short, weighted-average life U.S. agency guaranteed residential collateralized mortgage obligations. Combined, the mortgage-backed securities provide the Company with ongoing liquidity as scheduled and pre-paid principal is received on the securities.

State and local government securities carry different risks that are not as prevalent in other security types. The Company evaluates the investment grade quality of its securities in accordance with regulatory guidance. Investment grade securities are those where the issuer has an adequate capacity to meet the financial commitments under the security for the projected life of the investment. An issuer has an adequate capacity to meet financial commitments if the risk of default by the obligor is low and the full and timely payment of principal and interest are expected. In assessing credit risk, the Company may use credit ratings from NRSRO entities such as S&P and Moody’s as support for the evaluation; however, they are not solely relied upon. There have been no significant differences in the Company’s internal evaluation of the creditworthiness of any issuer when compared with the ratings assigned by the NRSROs.

The following table stratifies the state and local government securities by the associated NRSRO ratings. The highest issued rating was used to categorize the securities in the table for those securities where the NRSRO ratings were not at the same level.

(Dollars in thousands)

State and local government securities largely consist of general obligation and revenue bonds. The following table stratifies the state and local government securities by the associated security type.

(Dollars in thousands)

The following table outlines the five states in which the Company owns the highest concentrations of state and local government securities.

(Dollars in thousands)

57

The following table presents the carrying amount and weighted-average yield of AFS (at fair value) and HTM (at amortized cost) debt securities by contractual maturity at March 31, 2026. Weighted-average yields are based upon the amortized cost of securities and are calculated using the interest method which takes into consideration premium amortization, discount accretion and mortgage-backed securities’ prepayment provisions. Weighted-average yields on tax-exempt debt securities exclude the federal income tax benefit.

(Dollars in thousands)

1 Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

Based on an analysis of its AFS debt securities with unrealized losses as of March 31, 2026, the Company determined the decline in value was unrelated to credit loss and was primarily the result of interest rate changes and market spreads subsequent to acquisition. The fair value of the debt securities is expected to recover as payments are received and the debt securities approach maturity. In addition, the Company determined an insignificant amount of credit losses is expected on the HTM debt securities portfolio; therefore, no ACL has been recognized at March 31, 2026 on either category.

For additional information on the Company’s debt securities, see Note 2 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

Lending Activity

The Company focuses its lending activities primarily on the following types of loans: 1) first-mortgage, conventional loans secured by residential properties, particularly single-family; 2) commercial lending, including agriculture and public entities; and 3) installment lending for consumer purposes (e.g., home equity, automobile, etc.). Supplemental information regarding the Company’s loan portfolio and credit quality based on regulatory classification of loans is provided in the section captioned “Loans by Regulatory Classification” included in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The regulatory classification of loans is based primarily on the type of collateral for the loans. Loan information included in “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on the Company’s loan segments, which are based on the purpose of the loan, unless otherwise noted as a regulatory classification. The following table summarizes the Company’s loan portfolio as of the dates indicated:

(Dollars in thousands)

1 In connection with the Guaranty core system conversion in the first quarter 2026, Guaranty loans were reclassified to conform to the Company’s classifications. There were approximately $236 million of loans reclassified from residential loans into other categories, the majority of which were reclassified to commercial real estate loans.

The largest category of the Company’s loan portfolio is CRE. An additional breakdown of the Company’s CRE portfolio follows.

(Dollars in thousands)

59

The following table summarizes the Company’s CRE portfolio by geographic location, including occupancy as of the date indicated:

(Dollars in thousands)

The CRE portfolio is comprised of loans made to purchase, construct and finance commercial real estate properties. On average, the balances are small and geographically disbursed across our nine-state footprint. Specifically, our CRE portfolio has an average loan balance of $802.0 million with an average loan-to-value ratio (“LTV”) of 57% as of March 31, 2026.

Due to the recent trends in the banking industry, there has been increased risk associated with CRE loans, including with respect to the higher vulnerability of these credits to pressure as interest rates remain elevated and market conditions in many large metropolitan areas continue to show signs of stress. The Company has limited exposure to the office building sector in central business districts as the office portfolio is generally diversified in suburban and rural markets with strong occupancy levels. The Company maintains a practice of regular and ongoing loan reviews, stress tests, and sensitivity analyses to assess the level of risk in the loan portfolio. Loan reviews include monitoring past due rates, non-performing trends, concentrations, LTV’s, among other qualitative factors. Loan policies are robust and are updated as needed to meet the strategic and risk mitigation goals of the Company.

Non-performing Assets

The following table summarizes information regarding non-performing assets at the dates indicated:

(Dollars in thousands)

1Amounts represent estimated interest income that would have been recognized on loans accounted for on a non-accrual basis as of the end of each period had such loans performed pursuant to contractual terms.

Non-performing assets of $79.5 million at March 31, 2026 increased $10.6 million, or 15 percent, over the prior quarter and increased $40.2 million, or 102 percent, over the prior year first quarter.

Early stage delinquencies (accruing loans 30-89 days past due) of $91.8 million at March 31, 2026 increased $12.9 million from the prior quarter and increased $45.3 million from the prior year first quarter. Early stage delinquencies as a percentage of loans at March 31, 2026 were 0.44 percent compared to 0.38 percent for the prior quarter and 0.27 percent for the prior year first quarter and remain at historically low levels for the Company.

Most of the Company’s non-performing assets are secured by real estate, and based on the most current information available to management, including updated appraisals or evaluations (new or updated), the Company believes the value of the underlying real estate collateral is adequate to minimize significant charge-offs or losses to the Company. Through pro-active credit administration, the Company works closely with its borrowers to seek favorable resolution to the extent possible, thereby attempting to minimize net charge-offs or losses to the Company. With very limited exceptions, the Company does not disburse additional funds on non-performing loans. Instead, the Company proceeds to collection and foreclosure actions in order to reduce the Company’s exposure to loss on such loans.

For additional information on accounting policies relating to non-performing assets, see Note 1 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

Modifications to Borrowers Experiencing Financial Difficulty

The Company identifies and monitors MBFD loans. The Company considers some of the indicators that a borrower is experiencing financial difficulty to be: current payment default on any of their debt, declaring bankruptcy, going concern, borrower’s securities have been delisted, and other indicators of inability to meet obligations. Each debt modification is separately negotiated with the borrower and includes terms and conditions that reflect the borrower’s prospective ability to service their obligations as modified. Such loans at March 31, 2026 had an amortized cost of $2.3 million.

Other Real Estate Owned and Foreclosed Assets

The book value of loans prior to the acquisition of collateral and transfer of the loans into OREO and other foreclosed assets during 2026 was $1.7 million. The fair value of the loan collateral acquired in foreclosure during 2026 was $1.4 million. The following table sets forth the changes in OREO for the periods indicated:

(Dollars in thousands)

Allowance for Credit Losses - Loans Receivable

The following table summarizes the allocation of the ACL as of the dates indicated:

(Dollars in thousands)

62

The following table summarizes the ACL experience for the periods indicated:

(Dollars in thousands)

The following table summarizes net (charge-offs) recoveries as a percentage of average loans for the periods indicated:

The provision for credit loss expense of $6.1 million included $3.5 million of credit loss expense on loans and $2.6 million of credit loss expense on unfunded loan commitments. Net charge-offs for the current quarter were $3.1 million compared to $6.4 million in the prior quarter and $1.8 million for the prior year first quarter. The current quarter net charge-offs included $2.2 million in deposit overdraft net charge-offs and $896 thousand of net loan charge-offs.

The ACL on loans as a percentage of total loans outstanding was 1.22 percent at each of March 31, 2026, December 31, 2025 and March 31, 2025. The Company’s ACL of $256 million is considered adequate to absorb the estimated credit losses from any segment of its loan portfolio. For the periods ended March 31, 2026 and 2025, the Company believes the ACL is commensurate with the risk in the Company’s loan portfolio and is directionally consistent with the change in the quality of the Company’s loan portfolio.

At the end of each quarter, the Company analyzes its loan portfolio and maintains an ACL at a level that is appropriate and determined in accordance with GAAP. Determining the adequacy of the ACL involves a high degree of judgment and is inevitably imprecise as the risk of loss is difficult to quantify. The ACL methodology is designed to reasonably estimate the probable credit losses within the Company’s loan portfolio. Accordingly, the ACL is maintained within a range of estimated losses. The determination of the ACL on loans, including credit loss expense and net charge-offs, is a critical accounting estimate that involves management’s judgments about the loan portfolio that impact credit losses, including the credit risk inherent in the loan portfolio, economic forecasts nationally and in the local markets in which the Company operates, trends and changes in collateral values, delinquencies, non-performing assets, net charge-offs, credit-related policies and personnel, and other environmental factors.

In determining the allowance, the loan portfolio is separated into pools of loans that share similar risk characteristics which are the Company’s loan segments. The Company then derives estimated loss assumptions from its model by loan segment. The loss assumptions are then applied to each segment of loan to estimate the ACL on the pooled loans. For any loans that do not share similar risk characteristics, the estimated credit losses are determined on an individual loan basis and such loans primarily consist of non-accrual loans. An estimated credit loss is recorded on individually reviewed loans when the fair value of a collateral-dependent loan or the present value of the loan’s expected future cash flows (discounted at the loans original effective interest rate) is less than the amortized cost of the loan.

The Company provides commercial banking services to individuals, small to medium-sized businesses, community organizations and public entities from 282 locations, including 237 branches, across Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona, Nevada, and Texas. The states in which the Company operates have diverse economies and markets that are tied to commodities (crops, livestock, minerals, oil and natural gas), tourism, real estate and land development and an assortment of industries, both manufacturing and service-related. Thus, the effects of changes in the global, national, and local economies are not uniform across the Company’s geographic locations. The geographic dispersion of these market areas helps to mitigate the risk of credit loss. The Company’s model of eighteen bank divisions with separate management teams is also a significant benefit in mitigating and managing the Company’s credit risk. This model provides substantial local oversight to the lending and credit management function and requires multiple reviews of larger loans before credit is extended.

The primary responsibility for credit risk assessment and identification of problem loans rests with the loan officer of the account. This continuous process of identifying non-performing loans is necessary to support management’s evaluation of the ACL adequacy. An independent loan review function verifying credit risk ratings evaluates the loan officer’s and management’s evaluation of the loan portfolio credit quality. The ACL evaluation is well documented and approved by the Company’s Board. In addition, the policy and procedures for determining the balance of the ACL are reviewed annually by the Company’s Board, the internal audit department, independent credit reviewers and state and federal bank regulatory agencies.

Although the Company continues to actively monitor economic trends and regulatory developments, no assurance can be given that the Company will not, in any particular period, sustain losses that are significant relative to the ACL amount, or that subsequent evaluations of the loan portfolio applying management’s judgment about then current factors will not require significant changes in the ACL. Under such circumstances, additional credit loss expense could result.

For additional information regarding the ACL, its relation to credit loss expense and risks related to asset quality, see Note 3 to the Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”’

Loans by Regulatory Classification

Supplemental information regarding identification of the Company’s loan portfolio and credit quality based on regulatory classification is provided in the following tables. The regulatory classification of loans is based primarily on the type of collateral for the loans. There may be differences when compared to loan tables and loan amounts appearing elsewhere which reflect the Company’s internal loan segments which are based on the purpose of the loan.

The following table summarizes the Company’s loan portfolio by regulatory classification:

(Dollars in thousands)

1 Loans held for sale are primarily First lien 1-4 family loans.

The following table summarizes the Company’s non-performing assets by regulatory classification:

(Dollars in thousands)

66

The following table summarizes the Company’s accruing loans 30-89 days past due by regulatory classification:

(Dollars in thousands)

n/m - not measurable

The following table summarizes the Company’s charge-offs and recoveries by regulatory classification:

(Dollars in thousands)

68

Sources of Funds

The Company’s deposits have traditionally been the principal source of funds for use in lending and other business purposes. The Company also obtains funds from repayment of loans and debt securities, repurchase agreements, wholesale deposits, advances from FHLB, Federal Reserve facilities, and other borrowings. Loan repayments are a relatively stable source of funds, while interest bearing deposit inflows and outflows are significantly influenced by general interest rate levels and market conditions. Borrowings and advances may be used on a short-term basis to compensate for reductions in normal sources of funds such as deposit inflows at less than projected levels. Borrowings also may be used on a long-term basis to support expanded activities, match maturities of longer-term assets or manage interest rate risk.

Deposits

The Company has several deposit programs designed to attract both short-term and long-term deposits from the general public by providing a wide selection of accounts and rates. These programs include non-interest bearing deposit accounts and interest bearing deposit accounts such as negotiable on withdrawal (“NOW”), demand deposit accounts (“DDA”), savings, money market deposits, fixed rate certificates of deposit with maturities ranging from three months to five years, negotiated-rate jumbo certificates, and individual retirement accounts. These deposits are obtained primarily from individual and business residents in the Bank’s geographic market areas. Wholesale deposits are obtained through various programs and include brokered deposits classified as NOW, DDA, money market deposits and certificate accounts. The Company’s deposits are summarized below:

(Dollars in thousands)

Borrowings

The Bank borrows money through repurchase agreements. This process involves the selling of one or more of the securities in the Bank’s investment portfolio and simultaneously entering into an agreement to repurchase the same securities at an agreed upon later date, typically overnight. A rate of interest is paid for the agreed period of time. The Bank enters into repurchase agreements with local municipalities, and certain customers, and has adopted procedures designed to ensure proper transfer of title and safekeeping of the underlying securities. In addition to retail repurchase agreements, the Bank periodically enters into wholesale repurchase agreements as additional funding sources. The Bank has not entered into reverse repurchase agreements.

The Bank is a member of the FHLB of Des Moines, which is one of eleven banks that comprise the FHLB system. The Bank is required to maintain a certain level of activity-based stock in order to borrow or to engage in other transactions with the FHLB of Des Moines. Additionally, the Bank is subject to a membership capital stock requirement that is based upon an annual calibration tied to the total assets of the Bank. The borrowings are collateralized by eligible categories of loans and debt securities (principally, securities which are obligations of, or guaranteed by, the U.S. government and its agencies), provided certain standards related to credit-worthiness have been met. Advances are made pursuant to several different credit programs, each of which has its own interest rates and range of maturities. The Bank’s maximum amount of FHLB advances is limited to the lesser of a fixed percentage of the Bank’s total assets or the discounted value of eligible collateral. FHLB advances fluctuate to meet seasonal and other withdrawals of deposits and to expand lending or investment opportunities of the Bank.

Additionally, the Company has other sources of secured and unsecured borrowing lines from various sources that may be used from time to time.

Short-term borrowings

A critical component of the Company’s liquidity and capital resources is access to short-term borrowings to fund its operations. Short-term borrowings are accompanied by increased risks managed by the Bank’s Asset Liability Committee (“ALCO”) such as rate increases or unfavorable change in terms which would make it more costly to obtain future short-term borrowings. The Company’s short-term borrowing sources include FHLB advances, federal funds purchased and retail and wholesale repurchase agreements. The Company also has access to the short-term discount window borrowing programs (i.e., primary credit) of the FRB as well as a line of credit with a large national banking institution. FHLB advances and certain other short-term borrowings may be renewed as long-term borrowings to decrease certain risks such as liquidity or interest rate risk; however, the reduction in risks are weighed against the increased cost of funds and other risks.

Subordinated Debentures

In addition to funds obtained in the ordinary course of business, the Company formed or acquired financing subsidiaries for the purpose of issuing or holding trust preferred securities that entitle the investor to receive cumulative cash distributions thereon. Subordinated debentures were issued in conjunction with the trust preferred securities and the terms of the subordinated debentures and trust preferred securities are the same. For regulatory capital purposes, the trust preferred securities are included in Tier 2 capital at March 31, 2026. The subordinated debentures outstanding as of March 31, 2026 were $188 million, including fair value adjustments from acquisitions.

Contractual Obligations and Off-Balance Sheet Arrangements

In the normal course of business, there may be various outstanding commitments to obtain funding and to extend credit, such as letters of credit and unfunded loan commitments, which are not reflected in the accompanying condensed consolidated financial statements. The Company assessed the off-balance sheet credit exposures as of March 31, 2026 and determined its ACL of $32.5 million was adequate to absorb the estimated credit losses.

Off-balance sheet arrangements also include any obligation related to a variable interest held in an unconsolidated entity. The Company does not anticipate any material losses as a result of these transactions. For additional information regarding the Company’s interests in unconsolidated VIEs, see Note 7 to the Unaudited Consolidated Financial Statements in “Part I. Item 1. Financial Statements.”

Liquidity Risk

In the normal course of business, the Company has commitments that require material cash requirements for customer deposits outflows, repurchase agreements, borrowed funds, lease obligations, off-balance sheet obligations, operating expenses and other contractual obligations. The source of funding for such requirements includes loan repayments, customer deposit inflows, borrowings, revenue from operations, and capital resources. Liquidity risk is the possibility that the Company will not be able to fund present and future obligations as they come due because of an inability to liquidate assets or obtain adequate funding at a reasonable cost. The objective of liquidity management is to maintain cash flows adequate to meet current and future needs for credit demand, deposit withdrawals, maturing liabilities and corporate operating expenses. Effective liquidity management entails three elements:

1. assessing on an ongoing basis, the current and expected future needs for funds, and ensuring that sufficient funds or access to funds exist to meet those needs at the appropriate time;

2. providing for an adequate cushion of liquidity to meet unanticipated cash flow needs that may arise from potential adverse circumstances ranging from high probability/low severity events to low probability/high severity; and

3. balancing the benefits between providing for adequate liquidity to mitigate potential adverse events and the cost of that liquidity.

The Company has a wide range of versatility in managing the liquidity and asset/liability mix. The Bank’s ALCO meets regularly to assess liquidity risk, among other matters. The Company monitors liquidity and contingency funding alternatives through management reports of liquid assets (e.g., debt securities), both unencumbered and pledged, as well as borrowing capacity, both secured and unsecured, including off-balance sheet funding sources. The Company evaluates its potential funding needs across alternative scenarios and maintains contingency funding plans consistent with the Company’s access to diversified sources of contingent funding.

The following table identifies certain liquidity sources and capacity available to the Company as of the dates indicated:

(Dollars in thousands)

1 Total unencumbered debt securities at March 31, 2026, included $814.9 million classified as AFS and $752.7 million classified as HTM. Total unencumbered debt securities at December 31, 2025, included $1.2 billion classified as AFS, and $828.1 million classified as HTM.

Capital Resources

Maintaining capital strength continues to be a long-term objective of the Company. Abundant capital is necessary to sustain growth, provide protection against unanticipated declines in asset values, and to safeguard the funds of depositors. Capital is also a source of funds for loan demand and enables the Company to effectively manage its assets and liabilities. The Company has the capacity to issue 234,000,000 shares of common stock of which 130,124,378 have been issued as of March 31, 2026. The Company also has the capacity to issue 1,000,000 shares of preferred stock of which none have been issued as of March 31, 2026. Conversely, the Company may decide to utilize a portion of its strong capital position, as it has done in the past, to repurchase shares of its outstanding common stock, depending on market price and other relevant considerations.

The Federal Reserve has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company. The federal banking agencies issued final rules (“Final Rules”) that established a comprehensive regulatory capital framework based on the recommendation of the Basel Committee on Banking Supervision and certain requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Final Rules require the Company to hold a 2.5 percent capital conservation buffer designed to absorb losses during periods of economic stress. As of March 31, 2026, management believes the Company and Bank meet all capital adequacy requirements to which they are subject and there are no conditions or events subsequent to this date that management believes have changed the Company’s or Bank’s risk-based capital category.

The following table illustrates the Bank’s regulatory capital ratios and the Federal Reserve’s capital adequacy guidelines as of March 31, 2026:

Federal and State Income Taxes

The Company files a consolidated federal income tax return using the accrual method of accounting. All required tax returns have been timely filed. Financial institutions are subject to the provisions of the Internal Revenue Code of 1986, as amended, in the same general manner as other corporations. The federal statutory corporate income tax rate is 21 percent.

Within the Company’s geographic footprint under Montana, Idaho, Utah, Colorado and Arizona law, financial institutions are subject to a corporation income tax, which incorporates or is substantially similar to applicable provisions of the Internal Revenue Code. The corporation income tax is imposed on federal taxable income, subject to certain adjustments. State taxes are incurred at the rate of 6.75 percent in Montana, 5.30 percent in Idaho, 4.50 percent in Utah, 4.40 percent in Colorado and 4.90 percent in Arizona. Washington, Wyoming, Nevada, and Texas do not impose a corporate income tax. The Company is also required to file in states other than the nine states in which it has properties.

The following table summarizes information relevant to the Company’s federal and state income taxes:

(Dollars in thousands)

1The current and prior year’s low effective income tax rates are due to income from tax-exempt debt securities, municipal loans and leases and benefits from federal income tax credits.

Tax expense during the first quarter of 2026 was $18.0 million, an increase of $5.5 million, or 44 percent, compared to the prior quarter and an increase of $9.1 million, or 102 percent, from the prior year first quarter. The effective tax rate in the current quarter was 18.0 percent compared to 16.4 percent in the prior quarter and 14.1 percent in the prior year first quarter. The higher tax expense and higher effective tax rate in the current quarter compared to the prior quarter and prior year first quarter was primarily the result of an increase in pretax income.

The Company has equity investments in CDEs which have received allocations of NMTCs. Administered by the CDFI Fund of the U.S. Department of the Treasury, the NMTC program is aimed at stimulating economic and community development and job creation in low-income communities. The federal income tax credits received are claimed over a seven-year credit allowance period. The Company also has equity investments in LIHTC which are indirect federal subsidies used to finance the development of affordable rental housing for low-income households. The federal income tax credits are claimed over a ten-year credit allowance period. As of March 31, 2026, the Company has investments of $9.3 million in Qualified School Construction bonds whereby the Company receives quarterly federal income tax credits in lieu of taxable interest income. The federal income tax credits on these debt securities are subject to federal and state income tax. The Company has investments in historic tax credits that are claimed over a five-year credit allowance period.

Following is a list of expected federal income tax credits to be received in the years indicated.

(Dollars in thousands)

73

Average Balance Sheet

The following schedule provides 1) the total dollar amount of interest and dividend income of the Company for earning assets and the average yields; 2) the total dollar amount of interest expense on interest bearing liabilities and the average rates; 3) net interest and dividend income and interest rate spread; and 4) net interest margin (tax-equivalent).

(Dollars in thousands)

74

Average Balance Sheet - continued

1Includes tax effect of $1.7 million and $1.5 million on tax-exempt municipal loan and lease income for the three months ended March 31, 2026, and March 31, 2025, respectively.

2Total loans are gross of the allowance for credit losses, net of unearned income and include loans held for sale. Non-accrual loans were included in the average volume for the entire period.

3Includes tax effect of $2.0 million and $1.7 million on tax-exempt debt securities income for the three months ended March 31, 2026, and March 31, 2025, respectively.

4Includes interest income of $8.1 million and $6.1 million on average interest-bearing cash balances of $894.0 million and $559.5 million for the three months ended March 31, 2026, and March 31, 2025, respectively.

5Includes tax effect of $68 thousand and $150 thousand on federal income tax credits for the three months ended March 31, 2026, and March 31, 2025, respectively.

6Wholesale deposits include brokered deposits classified as NOW, DDA, money market deposit and certificate accounts with contractual maturities.

Rate/Volume Analysis

Net interest income can be evaluated from the perspective of relative dollars of change in each period. Interest income and interest expense, which are the components of net interest income, are shown in the following table on the basis of the amount of any increases (or decreases) attributable to changes in the dollar levels of the Company’s interest earning assets and interest bearing liabilities (“volume”) and the yields earned and paid on such assets and liabilities (“rate”). The change in interest income and interest expense attributable to changes in both volume and rates has been allocated proportionately to the change due to volume and the change due to rate.

(Dollars in thousands)

Net interest income (tax-equivalent) increased $79.0 million for the three months ended March 31, 2026 compared to the same period in 2025. The interest income for the first three months of the current year increased over the same period in the prior year, primarily from increased loan yields and loan growth. The decrease in interest expense for the first three months of the current year compared to prior year was primarily the result of a decrease in higher cost borrowings and a decrease in deposit costs.

Market Risk

Market risk is the risk of loss in a financial instrument arising from adverse changes in market rates/prices such as interest rates, foreign currency exchange rates, commodity prices, and equity prices. The Company’s primary market risk exposure is interest rate risk.

Interest Rate Risk

Interest rate risk is the potential for loss of future earnings resulting from adverse changes in the level of interest rates. Interest rate risk results from many factors and could have a significant impact on the Company’s net interest income, which is the Company’s primary source of net income. Net interest income is affected by a myriad of variables, including changes in interest rates, the relationship between rates on interest bearing assets and liabilities, the impact of the interest fluctuations on asset prepayments and the mix of interest bearing assets and liabilities.

Although interest rate risk is inherent in the banking industry, banks are expected to have sound risk management practices in place to measure, monitor and control interest rate exposures. The objective of interest rate risk management is to appropriately manage the risks associated with interest rate fluctuations. The process includes identification and management of the sensitivity of net interest income to changing interest rates.

Net interest income simulation

The Company uses a detailed and dynamic simulation model to quantify the estimated exposure of net interest income (“NII”) to sustained interest rate changes. While ALCO routinely monitors simulated NII sensitivity over rolling two-year and five-year horizons, it also utilizes additional tools to monitor potential longer-term interest rate risk. The simulation model captures the impact of changing interest rates on the interest income received and interest expense paid on all assets and liabilities reflected on the Company’s consolidated statements of financial condition. This sensitivity analysis is compared to ALCO policy limits which specify a maximum tolerance level for NII exposure over a one year and two year horizon, assuming no balance sheet growth. The ALCO policy rate scenarios include upward and downward shifts in interest rates for 100 bps, 200 bps, and 400 bps scenarios with instantaneous and parallel changes in current market yield curves. The ALCO policy also includes 200 bps and 400 bps rate scenarios with gradual parallel shifts in interest rates over 12-month and 24-month periods, respectively. Other non-parallel rate movement scenarios are also modeled to determine the potential impact on net interest income. The additional scenarios are adjusted as the economic environment changes and provide ALCO additional interest rate risk monitoring tools to evaluate current market conditions. The following is indicative of the Company’s overall NII sensitivity analysis as of March 31, 2026.

The preceding sensitivity analysis does not represent a forecast and should not be relied upon as being indicative of expected operating results. It is important to note that these hypothetical estimates are based upon numerous assumptions that are specific to our Company and thus may not be directly comparable to other institutions. These assumptions include: the nature and timing of interest rate levels including, but not limited to, yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits and reinvestment/replacement of asset and liability cash flows. While assumptions are developed based upon current economic and local market conditions, the Company cannot make any assurances as to the predictive nature of these assumptions including how customer preferences or competitor influences might change. Also, as market conditions vary from those assumed in the sensitivity analysis, actual results will also differ due to prepayment/refinancing levels likely deviating from those assumed, the varying impact of interest rate caps or floors on adjustable rate assets, the potential effect of changing debt service levels on customers with adjustable rate loans, depositor early withdrawals and product preference changes, and other internal and external variables. Furthermore, the sensitivity analysis does not reflect actions that ALCO might take in responding to or anticipating changes in interest rates.

See “Market Risk” of this Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q.

Evaluation of Disclosure Controls and Procedures

The Company’s CEO and Chief Financial Officer (“CFO”) have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as required by Exchange Act Rules 240.13a-15(b) and 15d-14(c)) as of March 31, 2026. Based on that evaluation, the CEO and CFO have concluded that the Company’s current disclosure controls and procedures are effective and timely, providing them with material information relating to the Company required to be disclosed in the reports the Company files or submits under the Exchange Act.

Changes in Internal Controls

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of 2026, to which this report relates that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

The Company believes there have been no material changes from the risk factor previously disclosed in the Company’s 2025 Annual Report on Form 10-K. The risks and uncertainties described in the Company’s 2025 Annual Report on Form 10-K should be carefully reviewed. These are not the only risks and uncertainties that the Company faces. Additional risks and uncertainties that the Company does not currently know about or that we currently believe are immaterial, or that the Company has not predicted, may also harm our business operations or adversely affect the Company. If any of these risks or uncertainties actually occurs, the Company’s business, financial condition, operating results or liquidity could be adversely affected.