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First Interstate BancSystem, Inc. Reports First Quarter Earnings

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First Interstate BancSystem, Inc. reported a net income of $58.4 million for the first quarter of 2024, with a per-share earnings of $0.57. The company saw a decrease in criticized loans but an increase in non-performing assets. Net interest income decreased by $7.7 million, and the company recorded a provision for credit losses of $5.3 million. Non-interest income was $42.1 million, with a decrease from the previous quarter due to specific events. Non-interest expenses decreased by $5.8 million. The balance sheet showed a decrease in total assets. The company declared a dividend of $0.47 per share. Credit quality saw an increase in non-performing assets and a decrease in criticized loans. Various non-GAAP financial measures were used to evaluate performance.
First Interstate BancSystem, Inc. ha registrato un reddito netto di 58,4 milioni di dollari per il primo trimestre del 2024, con un guadagno per azione di 0,57 dollari. L'azienda ha notato una diminuzione dei prestiti criticati ma un aumento delle attività non performanti. Il reddito d'interesse netto è diminuito di 7,7 milioni di dollari e sono stati registrati 5,3 milioni di dollari come provvisione per perdite su crediti. Il reddito non da interessi è stato di 42,1 milioni di dollari, con una diminuzione rispetto al trimestre precedente a causa di eventi specifici. Le spese non da interessi sono diminuite di 5,8 milioni di dollari. Il bilancio ha mostrato una riduzione delle attività totali. L'azienda ha dichiarato un dividendo di 0,47 dollari per azione. La qualità del credito ha visto un aumento delle attività non performanti e una diminuzione dei prestiti criticati. Diverse misure finanziarie non GAAP sono state utilizzate per valutare le prestazioni.
First Interstate BancSystem, Inc. informó un ingreso neto de 58,4 millones de dólares para el primer trimestre de 2024, con una ganancia por acción de 0,57 dólares. La empresa experimentó una disminución en los préstamos criticados pero un aumento en los activos no productivos. Los ingresos netos por intereses disminuyeron en 7,7 millones de dólares, y la compañía registró una provisión para pérdidas crediticias de 5,3 millones de dólares. El ingreso no operativo fue de 42,1 millones de dólares, con una disminución respecto al trimestre anterior debido a eventos específicos. Los gastos no operativos disminuyeron en 5,8 millones de dólares. El balance general mostró una disminución en los activos totales. La empresa declaró un dividendo de 0,47 dólares por acción. La calidad crediticia mostró un aumento en los activos no productivos y una disminución en los préstamos criticados. Se utilizaron varias medidas financieras no GAAP para evaluar el rendimiento.
First Interstate BancSystem, Inc.는 2024년 첫 분기에 5,840만 달러의 순수익을 보고하고 주당 0.57달러의 수익을 기록했습니다. 회사는 비판 대출이 감소했지만 비경상 자산이 증가했습니다. 순이자수입은 770만 달러 감소했고, 신용 손실 충당금으로 530만 달러가 기록되었습니다. 비이자 수입은 4,210만 달러로, 특정 사건으로 인해 전 분기 대비 감소했습니다. 비이자 비용은 580만 달러 감소했습니다. 대차 대조표는 자산총계가 감소했음을 보여주었습니다. 회사는 주당 0.47달러의 배당을 선언했습니다. 신용 품질은 비경상 자산이 증가하고 비판 대출이 감소하는 것을 보았습니다. 성과 평가를 위해 여러 비GAAP 재무지표가 사용되었습니다.
First Interstate BancSystem, Inc. a rapporté un revenu net de 58,4 millions de dollars pour le premier trimestre de 2024, avec un bénéfice par action de 0,57 dollar. La société a observé une diminution des prêts critiqués mais une augmentation des actifs non performants. Le revenu net d'intérêt a diminué de 7,7 millions de dollars, et une provision pour pertes sur crédits de 5,3 millions de dollars a été enregistrée. Le revenu hors intérêts était de 42,1 millions de dollars, avec une baisse par rapport au trimestre précédent due à des événements spécifiques. Les dépenses hors intérêts ont diminué de 5,8 millions de dollars. Le bilan a montré une diminution des actifs totaux. L'entreprise a déclaré un dividende de 0,47 dollar par action. La qualité du crédit a montré une augmentation des actifs non performants et une diminution des prêts critiqués. Diverses mesures financières non GAAP ont été utilisées pour évaluer la performance.
First Interstate BancSystem, Inc. berichtete einen Nettogewinn von 58,4 Millionen US-Dollar für das erste Quartal 2024, mit einem Gewinn pro Aktie von 0,57 US-Dollar. Das Unternehmen verzeichnete einen Rückgang kritisierter Kredite, aber eine Zunahme nicht performender Vermögenswerte. Der Nettozinsertrag sank um 7,7 Millionen US-Dollar, und es wurde eine Rückstellung für Kreditverluste in Höhe von 5,3 Millionen US-Dollar gebildet. Das nicht zinsabhängige Einkommen betrug 42,1 Millionen US-Dollar, mit einem Rückgang gegenüber dem Vorquartal aufgrund spezifischer Ereignisse. Die nicht zinsabhängigen Aufwendungen sanken um 5,8 Millionen US-Dollar. Die Bilanz zeigte einen Rückgang der Gesamtaktiva. Das Unternehmen erklärte eine Dividende von 0,47 US-Dollar pro Aktie. Die Kreditqualität zeigte eine Zunahme nicht performender Vermögenswerte und einen Rückgang der kritisierten Kredite. Verschiedene nicht-GAAP Finanzmaßnahmen wurden zur Leistungsbewertung verwendet.
Positive
  • The company reported net income of $58.4 million for Q1 2024.
  • Earnings per share were $0.57 for the quarter.
  • Criticized loans decreased, but non-performing assets increased.
  • Net interest income decreased by $7.7 million.
  • A provision for credit losses of $5.3 million was recorded.
  • Non-interest income was $42.1 million.
  • Non-interest expenses decreased by $5.8 million.
  • Total assets decreased on the balance sheet.
  • A dividend of $0.47 per share was declared.
  • An increase in non-performing assets was noted in credit quality.
  • Various non-GAAP financial measures were used for evaluation.
Negative
  • Net interest income decreased by $7.7 million.
  • Non-performing assets increased by $61.6 million.
  • A provision for credit losses of $5.3 million was recorded.
  • Non-interest income decreased by $2.4 million.
  • Total assets decreased by $526.4 million.
  • Coverage of non-performing loans decreased to 130.1%.
  • The ratio of loans held for investment to deposits increased to 79.8%.

Insights

The reported net income of First Interstate BancSystem saw a subtle dip on a sequential quarter basis, though it improved year-over-year. The decrease in criticized loans suggests better credit quality of the borrower pool, which is beneficial for the bank's asset quality. However, an uptick in non-performing assets, primarily driven by a significant non-accrual commercial and industrial loan, could raise concerns about potential future write-offs or provisions for credit losses.

The decline in net interest margin (NIM) is reflective of the current rate environment and competition for deposits. A shrinking NIM typically erodes profitability, so monitoring this trend is essential for investors. However, the decrease in non-interest expense provides a counterbalance, reflecting the company's cost control efforts.

The dividend declaration with a 6.9% annualized yield, based on the average closing share price, is an indicator of the management's confidence in the bank's financial stability and its commitment to return capital to shareholders.

First Interstate BancSystem's balance sheet contraction, marked by the reduction in investment securities, loans and total deposits, aligns with the broader industry's pattern of managing interest rate risk and credit exposure in a volatile market. The financial sector is particularly sensitive to changes in the macroeconomic environment, hence why the management's emphasis on capital and liquidity levels is noteworthy. It suggests a defensively postured balance sheet that may shield against potential downturns.

The adjustment in funding mix, with a decrease in other borrowed funds and an increase in long-term debt, may be indicative of a strategic move to lock in funding costs amidst rising interest rates. This could have implications for future interest expense and thus require close attention from investors looking at long-term profitability.

The unchanged allowance for credit losses as a percentage of period-end loans held for investment, alongside a marginal reduction in coverage of non-performing loans, could suggest that the company has a cautious view of the potential for credit defaults. The increase in net charge-offs, albeit still at a low percentage of average loans outstanding, is a potential red flag signaling increased risk in the loan portfolio.

As the bank manages its credit quality in a changing economic landscape, investors should consider the possibility of future provisions if economic conditions deteriorate, which could have an adverse impact on earnings. Additionally, the shift in the ratio of loans held for investment to deposits points to a higher loan-to-deposit ratio, potentially indicating a more aggressive earning asset strategy or a tightening in deposit gathering, both of which carry inherent risks.

BILLINGS, Mont.--(BUSINESS WIRE)-- First Interstate BancSystem, Inc. (NASDAQ: FIBK) (the “Company”) today reported financial results for the first quarter of 2024. For the quarter, the Company reported net income of $58.4 million, or $0.57 per share, which compares to net income of $61.5 million, or $0.59 per share, for the fourth quarter of 2023 and net income of $56.3 million, or $0.54 per share, for the first quarter of 2023.

HIGHLIGHTS

  • Criticized loans decreased $58.3 million at March 31, 2024, compared to December 31, 2023, driven by loan upgrades and payoffs.
  • Non-performing assets increased $61.6 million at March 31, 2024, compared to December 31, 2023, driven primarily by one non-accrual commercial and industrial loan relationship in the first quarter of 2024.
  • Loans held for investment decreased $76.8 million at March 31, 2024, compared to December 31, 2023, driven by seasonal declines in agriculture loans.
  • Total deposits decreased $513.1 million at March 31, 2024, compared to December 31, 2023, primarily due to seasonal declines in business deposits and selective run-off of two higher-cost municipal accounts totaling $185.0 million.
  • Net interest margin decreased to 2.91% for the first quarter of 2024, an 8 basis point decrease from the fourth quarter of 2023. Net interest margin, on a fully taxable equivalent (“FTE”) basis,1 a non-GAAP financial measure, decreased to 2.93% for the first quarter of 2024, an 8 basis point decrease from the fourth quarter of 2023.
  • Non-interest expense decreased $5.8 million for the first quarter of 2024, compared to the fourth quarter of 2023 and decreased $5.6 million compared to the first quarter of 2023.

“We executed well in the first quarter, with results generally in-line with our expectations, which we believe positions us well for the remainder of 2024,” said Kevin P. Riley, President and Chief Executive Officer of First Interstate BancSystem, Inc. “With our strong financial performance, we expect to continue to generate improvements in our capital ratios and maintain a healthy dividend for our shareholders.”

“Given our strong levels of capital and liquidity, adequate allowance for credit loss levels, and continued expense control, we remain confident in our ability to generate solid returns,” said Mr. Riley.

_______________________
1 See Non-GAAP Financial Measures included herein for a reconciliation the most directly comparable GAAP financial measures.

DIVIDEND DECLARATION

On April 23, 2024, the Company’s board of directors declared a dividend of $0.47 per common share, payable on May 16, 2024, to common stockholders of record as of May 6, 2024. The dividend equates to a 6.9% annualized yield based on the $27.30 per share average closing price of the Company’s common stock as reported on NASDAQ during the first quarter of 2024.

NET INTEREST INCOME

Net interest income decreased $7.7 million, or 3.7%, to $200.1 million, during the first quarter of 2024, compared to net interest income of $207.8 million during the fourth quarter of 2023, primarily due to an increase in interest expense resulting from higher costs of interest-bearing liabilities and one less accrual day in the first quarter of 2024. Net interest income decreased $38.8 million, or 16.2%, during the first quarter of 2024 compared to the first quarter of 2023, also primarily due to an increase in interest expense resulting from higher costs of interest-bearing liabilities and one additional day in the first quarter of 2024.

  • Interest accretion attributable to the fair valuation of acquired loans from acquisitions contributed to net interest income during the first quarter of 2024, the fourth quarter of 2023, and the first quarter of 2023, in the amounts of $6.5 million, $5.4 million, and $5.2 million, respectively.

The net interest margin ratio was 2.91% for the first quarter of 2024, compared to 2.99% during the fourth quarter of 2023, and 3.33% during the first quarter of 2023. The net FTE interest margin ratio2, a non-GAAP financial measure, was 2.93% for the first quarter of 2024, compared to 3.01% during the fourth quarter of 2023, and 3.36% during the first quarter of 2023. Excluding interest accretion from the fair value of acquired loans, on a quarter-over-quarter basis, the adjusted net interest margin ratio (FTE)2, a non-GAAP financial measure, was 2.84%, a decrease of 10 basis points from the prior quarter, primarily driven by higher interest-bearing deposit costs and increased borrowings, which was partially offset by loan yield expansion. Excluding interest accretion from the fair value of acquired loans, on a year-over-year basis, the net interest margin ratio decreased 45 basis points, primarily as a result of higher interest-bearing deposit and borrowing costs, which was partially offset by loan yield expansion and a modestly favorable change in the mix of earning assets.

_______________________
2 See Non-GAAP Financial Measures included herein for a reconciliation the most directly comparable GAAP financial measures.

PROVISION FOR (REDUCTION OF) CREDIT LOSSES

During the first quarter of 2024, the Company recorded a provision for credit losses of $5.3 million. This compares to a provision for credit losses of $5.4 million during the fourth quarter of 2023 and $15.2 million during the first quarter of 2023.

For the first quarter of 2024, the allowance for credit losses included net charge-offs of $8.4 million, or an annualized 0.18% of average loans outstanding, compared to net charge-offs of $4.8 million, or an annualized 0.10% of average loans outstanding, for the fourth quarter of 2023 and net charge-offs of $6.2 million, or an annualized 0.14% of average loans outstanding in the first quarter of 2023. Net loan charge-offs in the first quarter of 2024 were composed of charge-offs of $11.0 million and recoveries of $2.6 million.

The Company’s allowance for credit losses as a percentage of period-end loans held for investment was unchanged at 1.25% for March 31, 2024 and December 31, 2023, compared to 1.24% at March 31, 2023. Coverage of non-performing loans decreased to 130.1% at March 31, 2024, compared to 204.6% at December 31, 2023 and 265.1% at March 31, 2023.

NON-INTEREST INCOME

For the Quarter Ended

Mar 31, 2024

 

Dec 31,
2023

 

$ Change

% Change

 

Mar 31,
2023

 

$ Change

% Change

(Dollars in millions)

 

 

 

 

Payment services revenues

$

18.4

 

$

18.4

 

$

 

%

 

$

18.7

 

 

$

(0.3

)

(1.6

)%

Mortgage banking revenues

 

1.7

 

 

1.5

 

 

0.2

 

13.3

 

 

 

2.3

 

 

 

(0.6

)

(26.1

)

Wealth management revenues

 

9.2

 

 

8.8

 

 

0.4

 

4.5

 

 

 

9.0

 

 

 

0.2

 

2.2

 

Service charges on deposit accounts

 

6.0

 

 

6.0

 

 

 

 

 

 

5.2

 

 

 

0.8

 

15.4

 

Other service charges, commissions, and fees

 

2.2

 

 

2.5

 

 

(0.3

)

(12.0

)

 

 

2.4

 

 

 

(0.2

)

(8.3

)

Investment securities loss

 

 

 

 

 

 

 

 

 

(23.4

)

 

 

23.4

 

(100.0

)

Other income

 

4.6

 

 

7.3

 

 

(2.7

)

(37.0

)

 

 

2.2

 

 

 

2.4

 

109.1

 

Total non-interest income

$

42.1

 

$

44.5

 

$

(2.4

)

(5.4

)%

 

$

16.4

 

 

$

25.7

 

156.7

%

Non-interest income was $42.1 million for the first quarter of 2024, decreasing $2.4 million and increasing $25.7 million compared to the fourth quarter of 2023 and the first quarter of 2023, respectively. The decrease from the fourth quarter of 2023 was primarily the result of a gain of $2.9 million resulting from the disposition of premises and equipment during the fourth quarter of 2023. The increase from the first quarter of 2023 was primarily the result of the realized loss of $23.4 million on the disposition of available-for-sale investment securities and a reduction of $1.9 million related to the fair value of loans held for sale recognized through other income in the first quarter of 2023.

NON-INTEREST EXPENSE

For the Quarter Ended

Mar 31,
2024

 

Dec 31,
2023

 

$ Change

% Change

 

Mar 31,
2023

 

$ Change

% Change

(Dollars in millions)

 

 

 

 

Salaries and wages

$

65.2

 

$

64.0

 

$

1.2

 

1.9

%

 

$

65.6

 

$

(0.4

)

(0.6

)%

Employee benefits

 

19.3

 

 

13.5

 

 

5.8

 

43.0

 

 

 

22.8

 

 

(3.5

)

(15.4

)

Occupancy and equipment

 

17.3

 

 

17.4

 

 

(0.1

)

(0.6

)

 

 

18.4

 

 

(1.1

)

(6.0

)

Other intangible amortization

 

3.7

 

 

3.9

 

 

(0.2

)

(5.1

)

 

 

4.0

 

 

(0.3

)

(7.5

)

Other expenses

 

52.7

 

 

67.0

 

 

(14.3

)

(21.3

)

 

 

54.8

 

 

(2.1

)

(3.8

)

Other real estate owned expense

 

2.0

 

 

0.2

 

 

1.8

 

NM

 

 

 

0.2

 

 

1.8

 

NM

 

Total non-interest expense

$

160.2

 

$

166.0

 

$

(5.8

)

(3.5

)%

 

$

165.8

 

$

(5.6

)

(3.4

)%

The Company’s non-interest expense was $160.2 million for the first quarter of 2024, a decrease of $5.8 million from the fourth quarter of 2023 and a decrease of $5.6 million from the first quarter of 2023.

Salary and wages expense increased $1.2 million during the first quarter of 2024 compared to the fourth quarter of 2023, primarily due to higher short-term incentive accruals and annual merit increases, partially offset by a realization of the reduction in salaries and wages from expense initiatives undertaken by the Company. Salaries and wages expense decreased $0.4 million during the first quarter of 2024 compared to the first quarter of 2023, primarily due to lower salaries and wages and net severance costs which were partially offset by higher short-term incentive accruals in the first quarter of 2024.

Employee benefit expenses increased $5.8 million during the first quarter of 2024 compared to the fourth quarter of 2023, primarily due to higher long-term incentive accruals of $6.9 million and an increase of $2.1 million due to the seasonal reset of payroll taxes, partially offset by lower health insurance costs of $3.1 million. Employee benefit expenses decreased $3.5 million during the first quarter of 2024 compared to the first quarter of 2023, primarily due to lower health insurance costs of $2.1 million and lower payroll taxes of $1.8 million, partially offset by higher long-term incentive accruals of $0.6 million.

Other expenses decreased $14.3 million during the first quarter of 2024 compared to the fourth quarter of 2023, primarily due to a decrease of $9.0 million related to the FDIC special assessment accrual. The Company recorded a special assessment of $10.5 million in the fourth quarter of 2023 compared to $1.5 million recorded in the first quarter of 2024. Additionally, in the fourth quarter of 2023, other expenses reflected an increase in the credit card rewards accrual of $2.1 million to reflect higher engagement by our clients in our rewards program. The remaining quarter-over-quarter decrease and year-over-year decrease in other expenses was related to normal fluctuations in operating expenses.

Other real estate owned expenses increased $1.8 million during the first quarter of 2024 compared to both the fourth quarter of 2023 and the first quarter of 2023 primarily due to the write down of two other real estate owned properties in the first quarter of 2024.

BALANCE SHEET

Total assets decreased $526.4 million, or 1.7%, to $30,144.8 million as of March 31, 2024, from $30,671.2 million as of December 31, 2023, primarily due to decreases in investment securities and loans, and decreased $1,492.9 million, or 4.7%, from $31,637.7 million as of March 31, 2023, primarily due to declines in deposits and securities sold under repurchase agreements.

Investment securities decreased $423.3 million, or 4.7%, to $8,626.1 million as of March 31, 2024, from $9,049.4 million as of December 31, 2023, primarily as a result of normal pay-downs and maturities. Investment securities decreased $799.4 million, or 8.5%, from $9,425.5 million as of March 31, 2023, primarily as a result of normal pay-downs and maturities, partially offset by a $40.3 million increase in fair market values and a reduction of $2.5 million in allowance for credit losses on available-for-sale investment securities during the period.

The following table presents the composition and comparison of loans held for investment as of the quarters-ended:

 

Mar 31, 2024

Dec 31, 2023

$ Change

% Change

Mar 31, 2023

$ Change

% Change

Real Estate:

 

 

 

 

 

 

 

Commercial

$

9,060.4

 

$

8,869.2

 

$

191.2

 

2.2

%

$

8,680.8

 

$

379.6

 

4.4

%

Construction

 

1,609.2

 

 

1,826.5

 

 

(217.3

)

(11.9

)

 

1,893.0

 

 

(283.8

)

(15.0

)

Residential

 

2,258.4

 

 

2,244.3

 

 

14.1

 

0.6

 

 

2,191.1

 

 

67.3

 

3.1

 

Agricultural

 

719.7

 

 

716.8

 

 

2.9

 

0.4

 

 

769.7

 

 

(50.0

)

(6.5

)

Total real estate

 

13,647.7

 

 

13,656.8

 

 

(9.1

)

(0.1

)

 

13,534.6

 

 

113.1

 

0.8

 

Consumer:

 

 

 

 

 

 

 

Indirect

 

739.9

 

 

740.9

 

 

(1.0

)

(0.1

)

 

817.3

 

 

(77.4

)

(9.5

)

Direct and advance lines

 

136.7

 

 

141.6

 

 

(4.9

)

(3.5

)

 

146.9

 

 

(10.2

)

(6.9

)

Credit card

 

72.6

 

 

76.5

 

 

(3.9

)

(5.1

)

 

71.5

 

 

1.1

 

1.5

 

Total consumer

 

949.2

 

 

959.0

 

 

(9.8

)

(1.0

)

 

1,035.7

 

 

(86.5

)

(8.4

)

Commercial

 

2,922.2

 

 

2,906.8

 

 

15.4

 

0.5

 

 

3,028.0

 

 

(105.8

)

(3.5

)

Agricultural

 

696.0

 

 

769.4

 

 

(73.4

)

(9.5

)

 

660.4

 

 

35.6

 

5.4

 

Other, including overdrafts

 

0.2

 

 

0.1

 

 

0.1

 

100.0

 

 

1.6

 

 

(1.4

)

(87.5

)

Deferred loan fees and costs

 

(12.5

)

 

(12.5

)

 

 

 

 

(14.6

)

 

2.1

 

(14.4

)

Loans held for investment, net of deferred loan fees and costs

$

18,202.8

 

$

18,279.6

 

$

(76.8

)

(0.4

)%

$

18,245.7

 

$

(42.9

)

(0.2

)%

The ratio of loans held for investment to deposits increased to 79.8%, as of March 31, 2024, compared to 78.4% as of December 31, 2023 and 75.7% as of March 31, 2023.

Total deposits decreased $513.1 million, or 2.2%, to $22,810.0 million as of March 31, 2024, from $23,323.1 million as of December 31, 2023, with decreases in all categories except for of savings deposits and time deposits $250 and over. Total deposits decreased $1,297.0 million, or 5.4%, from $24,107.0 million as of March 31, 2023, with decreases in all types of deposits except for time deposits.

Securities sold under repurchase agreements increased $11.5 million, or 1.5%, to $794.2 million as of March 31, 2024, from $782.7 million as of December 31, 2023, and decreased $176.6 million, or 18.2%, from $970.8 million as of March 31, 2023, resulting from normal fluctuations in the liquidity needs of the Company’s clients.

Other borrowed funds is comprised of Federal Home Loan Bank and Bank Term Funding Program variable-rate, overnight and fixed-rate borrowings with contractual tenors of up to one year. Other borrowed funds decreased $261.0 million, or 10.0%, to $2,342.0 million as of March 31, 2024, from $2,603.0 million as of December 31, 2023, and decreased $368.0 million from March 31, 2023, as a result of adjusting the funding mix between other borrowed funds and long-term debt.

Long-term debt increased $250.0 million, or 207.0%, to $370.8 million as of March 31, 2024, from $120.8 million as of December 31, 2023 and March 31, 2023, as a result of an 18-month Federal Home Loan Bank borrowing.

The Company is considered to be “well-capitalized” as of March 31, 2024, having exceeded all regulatory capital adequacy requirements. During the first quarter of 2024, the Company paid regular common stock dividends of approximately $48.7 million, or $0.47 per share.

CREDIT QUALITY

As of March 31, 2024, non-performing assets increased $61.6 million, or 48.2%, to $189.4 million, compared to $127.8 million as of December 31, 2023, primarily due to an increase in non-accrual loans driven by the movement of a $54.4 million commercial and industrial loan relationship to non-accrual.

Criticized loans decreased $58.3 million, or 8.5%, to $630.0 million as of March 31, 2024, from $688.3 million as of December 31, 2023, driven by upgrades and paydowns in the commercial real estate and construction real estate portfolios.

NON-GAAP FINANCIAL MEASURES

In addition to results presented in accordance with accounting principles generally accepted in the United States of America, or GAAP, this press release contains the following non-GAAP financial measures that management uses to evaluate our performance relative to our capital adequacy standards: (i) tangible common stockholders’ equity; (ii) tangible assets; (iii) tangible book value per common share; (iv) tangible common stockholders’ equity to tangible assets; (v) average tangible common stockholders’ equity; (vi) return on average tangible common stockholders’ equity; and (vii) adjusted net interest margin ratio (FTE). Tangible common stockholders’ equity is calculated as total common stockholders’ equity less goodwill and other intangible assets (excluding mortgage servicing rights). Tangible assets are calculated as total assets less goodwill and other intangible assets (excluding mortgage servicing rights). Tangible book value per common share is calculated as tangible common stockholders’ equity divided by common shares outstanding. Tangible common stockholders’ equity to tangible assets is calculated as tangible common stockholders’ equity divided by tangible assets. Average tangible common stockholders’ equity is calculated as average stockholders’ equity less average goodwill and other intangible assets (excluding mortgage servicing rights). Return on average tangible common stockholders’ equity is calculated as net income available to common shareholders divided by average tangible common stockholders’ equity. Adjusted net interest margin ratio (FTE) is calculated as adjusted net FTE interest income divided by adjusted average interest earning assets. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies because other companies may not calculate these non-GAAP measures in the same manner. They also should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP.

The Company adjusts the most directly comparable capital adequacy GAAP financial measures to the non-GAAP financial measures described in subclauses (i) through (vi) above to exclude goodwill and other intangible assets (except mortgage servicing rights). To derive the non-GAAP financial measure identified in subclause (vii) above, the Company adjusts its net interest income to include its FTE interest income and exclude purchase accounting interest accretion on acquired loans. Management believes these non-GAAP financial measures, which are intended to complement the capital ratios defined by banking regulators and to present on a consistent basis our and our acquired companies’ organic continuing operations without regard to acquisition costs and other adjustments that we consider to be unpredictable and dependent on a significant number of factors that are outside our control, are useful to investors in evaluating the Company’s performance because, as a general matter, they either do not represent an actual cash expense and are inconsistent in amount and frequency depending upon the timing and size of our acquisitions (including the size, complexity and/or volume of past acquisitions, which may drive the magnitude of acquisition related costs, but may not be indicative of the size, complexity and/or volume of future acquisitions or related costs), or they cannot be anticipated or estimated in a particular period (in particular as it relates to unexpected recovery amounts). This impacts the ratios that are important to analysts and allows investors to compare certain aspects of the Company’s capitalization to other companies.

See the Non-GAAP Financial Measures table included herein and the textual discussion for a reconciliation of the above described non-GAAP financial measures to their most directly comparable GAAP financial measures.

Cautionary Note Regarding Forward-Looking Statements and Factors that Could Affect Future Results

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are identified by words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trends,” “objectives,” “continues” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may,” or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other important factors that change over time and could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. Furthermore, the following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this press release:

  • new or changes in existing, governmental regulations;
  • negative developments in the banking industry and increased regulatory scrutiny;
  • tax legislative initiatives or assessments;
  • more stringent capital requirements, to the extent they may become applicable to us;
  • changes in accounting standards;
  • any failure to comply with applicable laws and regulations, including, but not limited to, the Community Reinvestment Act and fair lending laws, the USA PATRIOT ACT of 2001, the Office of Foreign Asset Control guidelines and requirements, the Bank Secrecy Act, and the related Financial Crimes Enforcement Network and Federal Financial Institutions Examination Council Guidelines and regulations;
  • federal deposit insurance increases;
  • lending risks and risks associated with loan sector concentrations;
  • a decline in economic conditions that could reduce demand for our products and services and negatively impact the credit quality of loans;
  • loan credit losses exceeding estimates;
  • exposure to losses in collateralized loan obligation securities;
  • changes to United States trade policies, including the imposition of tariffs and retaliatory tariffs;
  • the soundness of other financial institutions;
  • the ability to meet cash flow needs and availability of financing sources for working capital and other needs;
  • a loss of deposits or a change in product mix that increases the Company’s funding costs;
  • inability to access funding or to monetize liquid assets;
  • changes in interest rates;
  • interest rate effect on the value of our investment securities;
  • cybersecurity risks, including “denial-of-service attacks,” “hacking,” and “identity theft” that could result in the disclosure of confidential information;
  • privacy, information security, and data protection laws, rules, and regulations that affect or limit how we collect and use personal information;
  • the potential impairment of our goodwill and other intangible assets;
  • our reliance on other companies that provide key components of our business infrastructure;
  • events that may tarnish our reputation;
  • main stream and social media contagion;
  • the loss of the services of key members of our management team and directors;
  • our ability to attract and retain qualified employees to operate our business;
  • costs associated with repossessed properties, including environmental remediation;
  • the effectiveness of our systems of internal operating and accounting controls;
  • our ability to implement technology-facilitated products and services or be successful in marketing these products and services to our clients;
  • difficulties we may face in combining the operations of acquired entities or assets with our own operations or assessing the effectiveness of businesses in which we make strategic investments or with which we enter into strategic contractual relationships;
  • competition from new or existing financial institutions and non-banks;
  • investing in technology;
  • incurrence of significant costs related to mergers and related integration activities;
  • the volatility in the price and trading volume of our common stock;
  • “anti-takeover” provisions in our certificate of incorporation and regulations, which may make it more difficult for a third party to acquire control of us even in circumstances that could be deemed beneficial to stockholders;
  • changes in our dividend policy or our ability to pay dividends;
  • our common stock not being an insured deposit;
  • the potential dilutive effect of future equity issuances;
  • the subordination of our common stock to our existing and future indebtedness;
  • the impact of the combined deficiencies resulting in a material weakness in our internal control over financial reporting;
  • the effect of global conditions, earthquakes, volcanoes, tsunamis, floods, fires, drought, and other natural catastrophic events; and
  • the impact of climate change and environmental sustainability matters.

These factors are not necessarily all the factors that could cause our actual results, performance, or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above and included and described in more detail in our periodic reports filed with the Securities and Exchange Commission, or SEC, under the Securities Exchange Act of 1934, as amended, under the caption “Risk Factors.” Interested parties are urged to read in their entirety such risk factors prior to making any investment decision with respect to the Company. Forward-looking statements speak only as of the date they are made, and we do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

First Quarter 2024 Conference Call for Investors

First Interstate BancSystem, Inc. will host a conference call to discuss the results for the first quarter of 2024 at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Time) on Thursday, April 25, 2024. The conference call will be accessible by telephone and through the Internet. Participants may join the call by dialing 1-800-274-8461; the access code is FIBANC. To participate via the Internet, visit www.FIBK.com. The call will be recorded and made available for replay on April 25, 2024, after 1:00 p.m. Eastern Time (11:00 a.m. Mountain Time), through May 25, 2024, prior to 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time), by dialing 1-888-562-2815. The call will also be archived on our website, www.FIBK.com, for one year.

About First Interstate BancSystem, Inc.

First Interstate BancSystem, Inc. is a financial and bank holding company focused on community banking. Incorporated in 1971 and headquartered in Billings, Montana, the Company operates banking offices, including detached drive-up facilities, in communities across Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming, in addition to offering online and mobile banking services. Through our bank subsidiary, First Interstate Bank, the Company delivers a comprehensive range of banking products and services to individuals, businesses, municipalities, and others throughout the Company’s market areas.

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

 

Quarter Ended

 

% Change

 

(In millions, except % and per share data)

Mar 31,
2024

Dec 31,
2023

Sep 30,
2023

Jun 30,
2023

Mar 31,
2023

 

1Q24 vs 4Q23

1Q24 vs
1Q23

 

Net interest income

$

200.1

$

207.8

$

213.7

 

$

218.4

 

$

238.9

 

 

(3.7

)%

(16.2

)%

 

Net interest income on a fully-taxable equivalent ("FTE") basis

 

201.8

 

209.5

 

215.4

 

 

220.2

 

 

240.7

 

 

(3.7

)

(16.2

)

 

Provision for (reduction in) credit losses

 

5.3

 

5.4

 

(0.1

)

 

11.7

 

 

15.2

 

 

(1.9

)

(65.1

)

 

Non-interest income:

 

 

 

 

 

 

 

 

 

Payment services revenues

 

18.4

 

18.4

 

19.2

 

 

20.1

 

 

18.7

 

 

 

(1.6

)

 

Mortgage banking revenues

 

1.7

 

1.5

 

2.0

 

 

2.6

 

 

2.3

 

 

13.3

 

(26.1

)

 

Wealth management revenues

 

9.2

 

8.8

 

8.7

 

 

8.8

 

 

9.0

 

 

4.5

 

2.2

 

 

Service charges on deposit accounts

 

6.0

 

6.0

 

6.0

 

 

5.8

 

 

5.2

 

 

 

15.4

 

 

Other service charges, commissions, and fees

 

2.2

 

2.5

 

2.2

 

 

2.4

 

 

2.4

 

 

(12.0

)

(8.3

)

 

Total fee-based revenues

 

37.5

 

37.2

 

38.1

 

 

39.7

 

 

37.6

 

 

0.8

 

(0.3

)

 

Investment securities loss

 

 

 

 

 

(0.1

)

 

(23.4

)

 

 

(100.0

)

 

Other income

 

4.6

 

7.3

 

3.9

 

 

4.5

 

 

2.2

 

 

(37.0

)

109.1

 

 

Total non-interest income

 

42.1

 

44.5

 

42.0

 

 

44.1

 

 

16.4

 

 

(5.4

)

156.7

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

Salaries and wages

 

65.2

 

64.0

 

65.4

 

 

68.1

 

 

65.6

 

 

1.9

 

(0.6

)

 

Employee benefits

 

19.3

 

13.5

 

19.7

 

 

19.3

 

 

22.8

 

 

43.0

 

(15.4

)

 

Occupancy and equipment

 

17.3

 

17.4

 

17.0

 

 

17.3

 

 

18.4

 

 

(0.6

)

(6.0

)

 

Other intangible amortization

 

3.7

 

3.9

 

3.9

 

 

3.9

 

 

4.0

 

 

(5.1

)

(7.5

)

 

Other expenses

 

52.7

 

67.0

 

54.6

 

 

54.7

 

 

54.8

 

 

(21.3

)

(3.8

)

 

Other real estate owned expense

 

2.0

 

0.2

 

0.5

 

 

0.6

 

 

0.2

 

 

NM

 

NM

 

 

Total non-interest expense

 

160.2

 

166.0

 

161.1

 

 

163.9

 

 

165.8

 

 

(3.5

)

(3.4

)

 

Income before income tax

 

76.7

 

80.9

 

94.7

 

 

86.9

 

 

74.3

 

 

(5.2

)

3.2

 

 

Provision for income tax

 

18.3

 

19.4

 

22.0

 

 

19.9

 

 

18.0

 

 

(5.7

)

1.7

 

 

Net income

$

58.4

$

61.5

$

72.7

 

$

67.0

 

$

56.3

 

 

(5.0

)%

3.7

%

 

 

 

 

 

 

 

 

 

 

 

Weighted-average basic shares outstanding

 

102,844

 

103,629

 

103,822

 

 

103,821

 

 

103,738

 

 

(0.8

)%

(0.9

)%

 

Weighted-average diluted shares outstanding

 

103,040

 

103,651

 

103,826

 

 

103,823

 

 

103,819

 

 

(0.6

)

(0.8

)

 

Earnings per share - basic

$

0.57

$

0.59

$

0.70

 

$

0.65

 

$

0.54

 

 

(3.4

)

5.6

 

 

Earnings per share - diluted

 

0.57

 

0.59

 

0.70

 

 

0.65

 

 

0.54

 

 

(3.4

)

5.6

 

 

 

 

 

 

 

 

 

 

 

 

NM - not meaningful

 

 

 

 

 

 

 

 

 

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

 

 

 

 

 

% Change

(In millions, except % and per share data)

Mar 31,
2024

Dec 31,
2023

Sep 30,
2023

Jun 30,
2023

Mar 31,
2023

 

1Q24 vs 4Q23

1Q24 vs 1Q23

Assets:

 

 

 

 

 

 

 

 

Cash and due from banks

$

315.8

 

$

378.2

 

$

371.5

 

$

479.0

 

$

332.9

 

 

(16.5

)%

(5.1

)%

Interest-bearing deposits in banks

 

319.1

 

 

199.7

 

 

219.5

 

 

201.4

 

 

747.7

 

 

59.8

 

(57.3

)

Federal funds sold

 

0.1

 

 

0.1

 

 

2.1

 

 

0.1

 

 

0.1

 

 

 

 

Cash and cash equivalents

 

635.0

 

 

578.0

 

 

593.1

 

 

680.5

 

 

1,080.7

 

 

9.9

 

(41.2

)

Investment securities, net

 

8,626.1

 

 

9,049.4

 

 

8,887.2

 

 

9,175.6

 

 

9,425.5

 

 

(4.7

)

(8.5

)

Investment in Federal Home Loan Bank and Federal Reserve Bank stock

 

178.4

 

 

223.2

 

 

189.5

 

 

210.4

 

 

214.5

 

 

(20.1

)

(16.8

)

Loans held for sale, at fair value

 

22.7

 

 

47.4

 

 

59.1

 

 

76.5

 

 

80.9

 

 

(52.1

)

(71.9

)

Loans held for investment

 

18,202.8

 

 

18,279.6

 

 

18,213.3

 

 

18,263.4

 

 

18,245.7

 

 

(0.4

)

(0.2

)

Allowance for credit losses

 

(227.7

)

 

(227.7

)

 

(226.7

)

 

(224.6

)

 

(226.1

)

 

NM

 

0.7

 

Net loans held for investment

 

17,975.1

 

 

18,051.9

 

 

17,986.6

 

 

18,038.8

 

 

18,019.6

 

 

(0.4

)

(0.2

)

Goodwill and intangible assets (excluding mortgage servicing rights)

 

1,206.6

 

 

1,210.3

 

 

1,214.1

 

 

1,218.0

 

 

1,221.9

 

 

(0.3

)

(1.3

)

Company owned life insurance

 

504.7

 

 

502.4

 

 

500.8

 

 

502.0

 

 

499.4

 

 

0.5

 

1.1

 

Premises and equipment

 

439.9

 

 

444.3

 

 

446.3

 

 

443.7

 

 

443.4

 

 

(1.0

)

(0.8

)

Other real estate owned

 

14.4

 

 

16.5

 

 

11.6

 

 

14.4

 

 

13.4

 

 

(12.7

)

7.5

 

Mortgage servicing rights

 

27.6

 

 

28.3

 

 

29.1

 

 

29.8

 

 

30.1

 

 

(2.5

)

(8.3

)

Other assets

 

514.3

 

 

519.5

 

 

623.4

 

 

586.6

 

 

608.3

 

 

(1.0

)

(15.5

)

Total assets

$

30,144.8

 

$

30,671.2

 

$

30,540.8

 

$

30,976.3

 

$

31,637.7

 

 

(1.7

)%

(4.7

)%

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

 

Deposits

$

22,810.0

 

$

23,323.1

 

$

23,679.5

 

$

23,579.2

 

$

24,107.0

 

 

(2.2

)%

(5.4

)%

Securities sold under repurchase agreements

 

794.2

 

 

782.7

 

 

889.5

 

 

929.9

 

 

970.8

 

 

1.5

 

(18.2

)

Long-term debt

 

370.8

 

 

120.8

 

 

120.8

 

 

120.8

 

 

120.8

 

 

207.0

 

207.0

 

Other borrowed funds

 

2,342.0

 

 

2,603.0

 

 

2,067.0

 

 

2,589.0

 

 

2,710.0

 

 

(10.0

)

(13.6

)

Subordinated debentures held by subsidiary trusts

 

163.1

 

 

163.1

 

 

163.1

 

 

163.1

 

 

163.1

 

 

 

 

Other liabilities

 

455.0

 

 

451.0

 

 

535.4

 

 

473.1

 

 

405.7

 

 

0.9

 

12.2

 

Total liabilities

 

26,935.1

 

 

27,443.7

 

 

27,455.3

 

 

27,855.1

 

 

28,477.4

 

 

(1.9

)

(5.4

)

Stockholders' equity:

 

 

 

 

 

 

 

 

Common stock

 

2,450.7

 

 

2,448.9

 

 

2,484.9

 

 

2,481.4

 

 

2,478.7

 

 

0.1

 

(1.1

)

Retained earnings

 

1,145.9

 

 

1,135.1

 

 

1,122.3

 

 

1,098.8

 

 

1,080.7

 

 

1.0

 

6.0

 

Accumulated other comprehensive loss

 

(386.9

)

 

(356.5

)

 

(521.7

)

 

(459.0

)

 

(399.1

)

 

8.5

 

(3.1

)

Total stockholders' equity

 

3,209.7

 

 

3,227.5

 

 

3,085.5

 

 

3,121.2

 

 

3,160.3

 

 

(0.6

)

1.6

 

Total liabilities and stockholders' equity

$

30,144.8

 

$

30,671.2

 

$

30,540.8

 

$

30,976.3

 

$

31,637.7

 

 

(1.7

)%

(4.7

)%

 

 

 

 

 

 

 

 

 

Common shares outstanding at period end

 

104,572

 

 

103,942

 

 

105,011

 

 

105,021

 

 

104,382

 

 

0.6

%

0.2

%

Book value per common share at period end

$

30.69

 

$

31.05

 

$

29.38

 

$

29.72

 

$

30.28

 

 

(1.2

)

1.4

 

Tangible book value per common share at period end**

 

19.16

 

 

19.41

 

 

17.82

 

 

18.12

 

 

18.57

 

 

(1.3

)

3.2

 

 

 

 

 

 

 

 

 

 

**Non-GAAP financial measure - see Non-GAAP Financial Measures included herein for a reconciliation of book value per common share (GAAP) at period end to tangible book value per common share (non-GAAP) at period end.

NM - not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Loans and Deposits

(Unaudited)

 

 

 

 

 

% Change

(In millions, except %)

Mar 31,
2024

Dec 31,
2023

Sep 30,
2023

Jun 30,
2023

Mar 31,
2023

 

1Q24 vs
4Q23

1Q24 vs
1Q23

 

 

 

 

 

 

 

 

 

Loans held for investment:

 

 

 

 

 

 

 

 

Real Estate:

 

 

 

 

 

 

 

 

Commercial

$

9,060.4

 

$

8,869.2

 

$

8,766.2

 

$

8,813.9

 

$

8,680.8

 

 

2.2

%

4.4

%

Construction

 

1,609.2

 

 

1,826.5

 

 

1,930.3

 

 

1,836.5

 

 

1,893.0

 

 

(11.9

)

(15.0

)

Residential

 

2,258.4

 

 

2,244.3

 

 

2,212.2

 

 

2,198.3

 

 

2,191.1

 

 

0.6

 

3.1

 

Agricultural

 

719.7

 

 

716.8

 

 

731.5

 

 

755.7

 

 

769.7

 

 

0.4

 

(6.5

)

Total real estate

 

13,647.7

 

 

13,656.8

 

 

13,640.2

 

 

13,604.4

 

 

13,534.6

 

 

(0.1

)

0.8

 

Consumer:

 

 

 

 

 

 

 

 

Indirect

 

739.9

 

 

740.9

 

 

751.7

 

 

764.1

 

 

817.3

 

 

(0.1

)

(9.5

)

Direct

 

136.7

 

 

141.6

 

 

142.3

 

 

144.0

 

 

146.9

 

 

(3.5

)

(6.9

)

Credit card

 

72.6

 

 

76.5

 

 

71.6

 

 

72.1

 

 

71.5

 

 

(5.1

)

1.5

 

Total consumer

 

949.2

 

 

959.0

 

 

965.6

 

 

980.2

 

 

1,035.7

 

 

(1.0

)

(8.4

)

Commercial

 

2,922.2

 

 

2,906.8

 

 

2,925.1

 

 

3,002.7

 

 

3,028.0

 

 

0.5

 

(3.5

)

Agricultural

 

696.0

 

 

769.4

 

 

690.5

 

 

688.0

 

 

660.4

 

 

(9.5

)

5.4

 

Other

 

0.2

 

 

0.1

 

 

5.0

 

 

1.7

 

 

1.6

 

 

100.0

 

(87.5

)

Deferred loan fees and costs

 

(12.5

)

 

(12.5

)

 

(13.1

)

 

(13.6

)

 

(14.6

)

 

 

(14.4

)

Loans held for investment

$

18,202.8

 

$

18,279.6

 

$

18,213.3

 

$

18,263.4

 

$

18,245.7

 

 

(0.4

)%

(0.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Non-interest-bearing

$

5,900.3

 

$

6,029.6

 

$

6,402.6

 

$

6,518.2

 

$

6,861.1

 

 

(2.1

)%

(14.0

)%

Interest-bearing:

 

 

 

 

 

 

 

 

Demand

 

6,103.6

 

 

6,507.8

 

 

6,317.9

 

 

6,481.9

 

 

6,714.1

 

 

(6.2

)

(9.1

)

Savings

 

7,872.2

 

 

7,775.8

 

 

7,796.3

 

 

7,836.7

 

 

8,282.9

 

 

1.2

 

(5.0

)

Time, $250 and over

 

819.3

 

 

811.6

 

 

817.1

 

 

657.9

 

 

526.5

 

 

0.9

 

55.6

 

Time, other

 

2,114.6

 

 

2,198.3

 

 

2,345.6

 

 

2,084.5

 

 

1,722.4

 

 

(3.8

)

22.8

 

Total interest-bearing

 

16,909.7

 

 

17,293.5

 

 

17,276.9

 

 

17,061.0

 

 

17,245.9

 

 

(2.2

)

(1.9

)

Total deposits

$

22,810.0

 

$

23,323.1

 

$

23,679.5

 

$

23,579.2

 

$

24,107.0

 

 

(2.2

)%

(5.4

)%

 

 

 

 

 

 

 

 

 

Total core deposits (1)

$

21,990.7

 

$

22,511.5

 

$

22,862.4

 

$

22,921.3

 

$

23,580.5

 

 

(2.3

)%

(6.7

)%

 

 

 

 

 

 

 

 

 

(1) Core deposits are defined as total deposits less time deposits, $250 and over, and brokered deposits.

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Credit Quality

(Unaudited)

 

 

 

 

 

% Change

(In millions, except %)

Mar 31,
2024

Dec 31,
2023

Sep 30,
2023

Jun 30,
2023

Mar 31,
2023

 

1Q24 vs
4Q23

1Q24 vs
1Q23

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses:

 

 

 

 

 

 

 

 

Allowance for credit losses

$

227.7

 

$

227.7

 

$

226.7

 

$

224.6

 

$

226.1

 

 

NM

 

0.7

%

As a percentage of loans held for investment

 

1.25

%

 

1.25

%

 

1.24

%

 

1.23

%

 

1.24

%

 

 

 

As a percentage of non-accrual loans

 

132.38

 

 

214.00

 

 

278.50

 

 

260.86

 

 

279.83

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loan charge-offs during quarter

$

8.4

 

$

4.8

 

$

1.1

 

$

11.4

 

$

6.2

 

 

75.0

%

35.5

%

Annualized as a percentage of average loans

 

0.18

%

 

0.10

%

 

0.02

%

 

0.25

%

 

0.14

%

 

 

 

 

 

 

 

 

 

 

 

 

Non-Performing Assets:

 

 

 

 

 

 

 

 

Non-accrual loans

$

172.0

 

$

106.4

 

$

81.4

 

$

86.1

 

$

80.8

 

 

61.7

%

112.9

%

Accruing loans past due 90 days or more

 

3.0

 

 

4.9

 

 

3.2

 

 

6.7

 

 

4.5

 

 

(38.8

)

(33.3

)

Total non-performing loans

 

175.0

 

 

111.3

 

 

84.6

 

 

92.8

 

 

85.3

 

 

57.2

 

105.2

 

Other real estate owned

 

14.4

 

 

16.5

 

 

11.6

 

 

14.4

 

 

13.4

 

 

(12.7

)

7.5

 

Total non-performing assets

$

189.4

 

$

127.8

 

$

96.2

 

$

107.2

 

$

98.7

 

 

48.2

%

91.9

%

 

 

 

 

 

 

 

 

 

Non-performing assets as a percentage of:

 

 

 

 

 

 

 

 

Loans held for investment and OREO

 

1.04

%

 

0.70

%

 

0.53

%

 

0.59

%

 

0.54

%

 

 

 

Total assets

 

0.63

 

 

0.42

 

 

0.31

 

 

0.35

 

 

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans to loans held for investment

 

0.94

 

 

0.58

 

 

0.45

 

 

0.47

 

 

0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Accruing Loans 30-89 Days Past Due

$

62.8

 

$

67.3

 

$

51.2

 

$

49.5

 

$

52.3

 

 

(6.7

)%

20.1

%

 

 

 

 

 

 

 

 

 

Criticized Loans:

 

 

 

 

 

 

 

 

Special Mention

$

160.1

 

$

210.5

 

$

197.3

 

$

221.9

 

$

243.8

 

 

(23.9

)%

(34.3

)%

Substandard

 

405.8

 

 

457.1

 

 

414.6

 

 

386.9

 

 

355.0

 

 

(11.2

)

14.3

 

Doubtful

 

64.1

 

 

20.7

 

 

21.0

 

 

32.8

 

 

22.8

 

 

209.7

 

181.1

 

Total

$

630.0

 

$

688.3

 

$

632.9

 

$

641.6

 

$

621.6

 

 

(8.5

)%

1.4

%

 

 

 

 

 

 

 

 

 

NM - not meaningful

 

 

 

 

 

 

 

 

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Selected Ratios - Annualized

(Unaudited)

 

At or for the Quarter ended:

 

 

Mar 31,
2024

 

Dec 31,
2023

 

Sep 30,
2023

 

Jun 30,
2023

 

Mar 31,
2023

 

Annualized Financial Ratios (GAAP)

 

Return on average assets

 

0.77

%

 

 

0.80

%

 

 

0.94

%

 

 

0.86

%

 

 

0.71

%

 

Return on average common stockholders' equity

 

7.28

 

 

 

7.77

 

 

 

9.20

 

 

 

8.44

 

 

 

7.25

 

 

Yield on average earning assets

 

4.74

 

 

 

4.69

 

 

 

4.63

 

 

 

4.52

 

 

 

4.43

 

 

Cost of average interest-bearing liabilities

 

2.39

 

 

 

2.24

 

 

 

2.09

 

 

 

1.88

 

 

 

1.46

 

 

Interest rate spread

 

2.35

 

 

 

2.45

 

 

 

2.54

 

 

 

2.64

 

 

 

2.97

 

 

Efficiency ratio

 

64.62

 

 

 

64.25

 

 

 

61.48

 

 

 

60.95

 

 

 

63.38

 

 

Loans held for investment to deposit ratio

 

79.80

 

 

 

78.38

 

 

 

76.92

 

 

 

77.46

 

 

 

75.69

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Financial Ratios - Operating** (Non-GAAP)

 

Net FTE interest margin ratio

 

2.93

%

 

 

3.01

%

 

 

3.07

%

 

 

3.12

%

 

 

3.36

%

 

Tangible book value per common share

$

19.16

 

 

$

19.41

 

 

$

17.82

 

 

$

18.12

 

 

$

18.57

 

 

Tangible common stockholders' equity to tangible assets

 

6.92

%

 

 

6.85

%

 

 

6.38

%

 

 

6.40

%

 

 

6.37

%

 

Return on average tangible common stockholders' equity

 

11.63

 

 

 

12.65

 

 

 

15.04

 

 

 

13.69

 

 

 

11.87

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Capital Ratios

 

Total risk-based capital to total risk-weighted assets

 

13.64

%

*

 

13.28

%

 

 

13.19

%

 

 

12.90

%

 

 

12.63

%

 

Tier 1 risk-based capital to total risk-weighted assets

 

11.37

 

*

 

11.08

 

 

 

11.02

 

 

 

10.76

 

 

 

10.52

 

 

Tier 1 common capital to total risk-weighted assets

 

11.37

 

*

 

11.08

 

 

 

11.02

 

 

 

10.76

 

 

 

10.52

 

 

Leverage Ratio

 

8.28

 

*

 

8.22

 

 

 

8.22

 

 

 

7.99

 

 

 

7.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Preliminary estimate - may be subject to change. The regulatory capital ratios presented include the assumption of the transitional method as a result of legislation by the United States Congress to provide relief for the economy and financial institutions in the United States from the COVID‑19 pandemic. The referenced relief ends on December 31, 2024, which allows a total five-year phase-in of the impact of CECL on capital and relief over the next two years for the impact on the allowance for credit losses resulting from the COVID‑19 pandemic.

 

**Non-GAAP financial measures - see Non-GAAP Financial Measures included herein for a reconciliation of net interest margin to net FTE interest margin, book value per common share to tangible book value per common share, return on average common stockholders’ equity (GAAP) to return on average tangible common stockholders’ equity, and tangible common stockholders’ equity to tangible assets (non-GAAP).

 

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Average Balance Sheets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

(In millions, except %)

Average

Balance

Interest(2)

Average

Rate

 

Average

Balance

Interest(2)

Average

Rate

 

Average

Balance

Interest(2)

Average

Rate

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

$

18,289.2

$

253.6

 

5.58

%

 

$

18,255.9

$

254.1

 

5.52

%

 

$

18,273.6

$

237.2

 

5.26

%

Investment securities

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

8,726.3

 

64.5

 

2.97

 

 

 

8,710.1

 

64.8

 

2.95

 

 

 

9,983.4

 

72.2

 

2.93

 

Tax-exempt

 

189.0

 

0.9

 

1.92

 

 

 

190.0

 

0.9

 

1.88

 

 

 

225.4

 

1.1

 

1.98

 

Investment in FHLB and FRB stock

 

198.3

 

3.3

 

6.69

 

 

 

192.1

 

3.1

 

6.40

 

 

 

210.5

 

3.0

 

5.78

 

Interest-bearing deposits in banks

 

296.7

 

4.1

 

5.56

 

 

 

221.0

 

3.1

 

5.57

 

 

 

365.7

 

4.2

 

4.66

 

Federal funds sold

 

0.1

 

 

 

 

 

0.3

 

 

 

 

 

0.8

 

 

 

Total interest-earning assets

$

27,699.6

$

326.4

 

4.74

%

 

$

27,569.4

$

326.0

 

4.69

%

 

$

29,059.4

$

317.7

 

4.43

%

Non-interest-earning assets

 

2,825.6

 

 

 

 

2,938.3

 

 

 

 

2,951.5

 

 

Total assets

$

30,525.2

 

 

 

$

30,507.7

 

 

 

$

32,010.9

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

$

6,150.2

$

12.9

 

0.84

%

 

$

6,469.1

$

15.3

 

0.94

%

 

$

6,973.4

$

8.7

 

0.51

%

Savings deposits

 

7,781.8

 

39.1

 

2.02

 

 

 

7,769.3

 

37.4

 

1.91

 

 

 

8,406.9

 

22.8

 

1.10

 

Time deposits

 

2,972.3

 

27.1

 

3.67

 

 

 

3,179.4

 

27.2

 

3.39

 

 

 

2,055.3

 

8.8

 

1.74

 

Repurchase agreements

 

802.1

 

2.3

 

1.15

 

 

 

842.2

 

2.1

 

0.99

 

 

 

1,005.8

 

1.1

 

0.44

 

Other borrowed funds

 

2,771.9

 

35.6

 

5.17

 

 

 

2,087.6

 

29.7

 

5.64

 

 

 

2,615.2

 

31.2

 

4.84

 

Long-term debt

 

356.8

 

4.3

 

4.85

 

 

 

120.8

 

1.4

 

4.60

 

 

 

120.8

 

1.5

 

5.04

 

Subordinated debentures held by subsidiary trusts

 

163.1

 

3.3

 

8.14

 

 

 

163.1

 

3.4

 

8.27

 

 

 

163.1

 

2.9

 

7.21

 

Total interest-bearing liabilities

$

20,998.2

$

124.6

 

2.39

%

 

$

20,631.5

$

116.5

 

2.24

%

 

$

21,340.5

$

77.0

 

1.46

%

Non-interest-bearing deposits

 

5,832.2

 

 

 

 

6,222.1

 

 

 

 

7,064.9

 

 

Other non-interest-bearing liabilities

 

466.4

 

 

 

 

513.8

 

 

 

 

458.5

 

 

Stockholders’ equity

 

3,228.4

 

 

 

 

3,140.3

 

 

 

 

3,147.0

 

 

Total liabilities and stockholders’ equity

$

30,525.2

 

 

 

$

30,507.7

 

 

 

$

32,010.9

 

 

Net FTE interest income (non-GAAP)(3)

 

$

201.8

 

 

 

 

$

209.5

 

 

 

 

$

240.7

 

 

Less FTE adjustments (2)

 

 

(1.7

)

 

 

 

 

(1.7

)

 

 

 

 

(1.8

)

 

Net interest income from consolidated statements of income

 

$

200.1

 

 

 

 

$

207.8

 

 

 

 

$

238.9

 

 

Interest rate spread

 

 

2.35

%

 

 

 

2.45

%

 

 

 

2.97

%

Net interest margin

 

 

2.91

 

 

 

 

2.99

 

 

 

 

3.33

 

Net FTE interest margin (non-GAAP)(3)

 

 

2.93

 

 

 

 

3.01

 

 

 

 

3.36

 

Cost of funds, including non-interest-bearing demand deposits (4)

 

 

1.87

 

 

 

 

1.72

 

 

 

 

1.10

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Average loan balances include loans held for sale and loans held for investment, net of deferred fees and costs, which include non-accrual loans. Interest income includes amortization of deferred loan fees net of deferred loan costs, which is not material.

(2) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company’s performance as a comparison of the returns between a tax-free investment and a taxable alternative. The Company adjusts interest income and average rates for tax exempt loans and securities to an FTE basis utilizing a 21.00% tax rate.

(3) Non-GAAP financial measure - see Non-GAAP Financial Measures included herein for a reconciliation to GAAP measures.

(4) Calculated by dividing total annualized interest on interest-bearing liabilities by the sum of total interest-bearing liabilities plus non-interest-bearing deposits.

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

Non-GAAP Financial Measures

(Unaudited)

 

 

 

 

 

 

 

 

 

As of or For the Quarter Ended

(In millions, except % and per share data)

 

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

Total common stockholders' equity (GAAP)

(A)

$

3,209.7

 

$

3,227.5

 

$

3,085.5

 

$

3,121.2

 

$

3,160.3

 

Less goodwill and other intangible assets (excluding mortgage servicing rights)

 

 

1,206.6

 

 

1,210.3

 

 

1,214.1

 

 

1,218.0

 

 

1,221.9

 

Tangible common stockholders' equity (Non-GAAP)

(B)

$

2,003.1

 

$

2,017.2

 

$

1,871.4

 

$

1,903.2

 

$

1,938.4

 

 

 

 

 

 

 

 

Total assets (GAAP)

 

$

30,144.8

 

$

30,671.2

 

$

30,540.8

 

$

30,976.3

 

$

31,637.7

 

Less goodwill and other intangible assets (excluding mortgage servicing rights)

 

 

1,206.6

 

 

1,210.3

 

 

1,214.1

 

 

1,218.0

 

 

1,221.9

 

Tangible assets (Non-GAAP)

(C)

$

28,938.2

 

$

29,460.9

 

$

29,326.7

 

$

29,758.3

 

$

30,415.8

 

 

 

 

 

 

 

 

Average Balances:

 

 

 

 

 

 

Total common stockholders' equity (GAAP)

(D)

$

3,228.4

 

$

3,140.3

 

$

3,133.8

 

$

3,182.9

 

$

3,147.0

 

Less goodwill and other intangible assets (excluding mortgage servicing rights)

 

 

1,208.4

 

 

1,212.1

 

 

1,216.0

 

 

1,219.8

 

 

1,223.8

 

Average tangible common stockholders' equity (Non-GAAP)

(E)

$

2,020.0

 

$

1,928.2

 

$

1,917.8

 

$

1,963.1

 

$

1,923.2

 

 

 

 

 

 

 

 

Net interest income

(F)

$

200.1

 

$

207.8

 

$

213.7

 

$

218.4

 

$

238.9

 

FTE interest income

 

 

1.7

 

 

1.7

 

 

1.7

 

 

1.8

 

 

1.8

 

Net FTE interest income

(G)

 

201.8

 

 

209.5

 

 

215.4

 

 

220.2

 

 

240.7

 

Less purchase accounting accretion

 

 

6.5

 

 

5.4

 

 

5.2

 

 

4.6

 

 

5.2

 

Adjusted net FTE interest income

(H)

$

195.3

 

$

204.1

 

$

210.2

 

$

215.6

 

$

235.5

 

 

 

 

 

 

 

 

Average interest-earning assets

(I)

$

27,699.6

 

$

27,569.4

 

$

27,796.8

 

$

28,328.8

 

$

29,059.4

 

Total quarterly average assets

(J)

 

30,525.2

 

 

30,507.7

 

 

30,752.3

 

 

31,287.6

 

 

32,010.9

 

Annualized net income available to common shareholders

(K)

 

234.9

 

 

244.0

 

 

288.4

 

 

268.7

 

 

228.3

 

Common shares outstanding

(L)

 

104,572

 

 

103,942

 

 

105,011

 

 

105,021

 

 

104,382

 

 

 

 

 

 

 

 

Return on average assets (GAAP)

(K) / (J)

 

0.77

%

 

0.80

%

 

0.94

%

 

0.86

%

 

0.71

%

Return on average common stockholders' equity (GAAP)

(K) / (D)

 

7.28

 

 

7.77

 

 

9.20

 

 

8.44

 

 

7.25

 

Average common stockholders' equity to average assets (GAAP)

(D) / (J)

 

10.58

 

 

10.29

 

 

10.19

 

 

10.17

 

 

9.83

 

Book value per common share (GAAP)

(A) / (L)

$

30.69

 

$

31.05

 

$

29.38

 

$

29.72

 

$

30.28

 

Tangible book value per common share (Non-GAAP)

(B) / (L)

 

19.16

 

 

19.41

 

 

17.82

 

 

18.12

 

 

18.57

 

Tangible common stockholders' equity to tangible assets (Non-GAAP)

(B) / (C)

 

6.92

%

 

6.85

%

 

6.38

%

 

6.40

%

 

6.37

%

Return on average tangible common stockholders' equity (Non-GAAP)

(K) / (E)

 

11.63

 

 

12.65

 

 

15.04

 

 

13.69

 

 

11.87

 

Net interest margin (GAAP)

(F*) / (I)

 

2.91

 

 

2.99

 

 

3.05

 

 

3.09

 

 

3.33

 

Net interest margin (FTE) (Non-GAAP)

(G*) / (I)

 

2.93

 

 

3.01

 

 

3.07

 

 

3.12

 

 

3.36

 

Adjusted net interest margin (FTE) (Non-GAAP)

(H*) / (I)

 

2.84

 

 

2.94

 

 

3.00

 

 

3.05

 

 

3.29

 

 

 

 

 

 

 

 

*Annualized

(FIBK-ER)

David Della Camera, CFA

Director of Corporate Development and Financial Strategy

First Interstate BancSystem, Inc.

(406) 255-5363

david.dellacamera@fib.com

www.FIBK.com

Source: First Interstate BancSystem, Inc.

FAQ

What was First Interstate BancSystem, Inc.'s net income for Q1 2024?

The net income was $58.4 million.

What was the earnings per share for the first quarter of 2024?

The earnings per share were $0.57.

Did criticized loans increase or decrease in Q1 2024?

Criticized loans decreased.

What was the total dividend declared per share?

The dividend declared was $0.47 per share.

How did non-interest expenses change from the previous quarter?

Non-interest expenses decreased by $5.8 million.

What was the change in total assets on the balance sheet?

Total assets decreased by $526.4 million.

What financial measures were used to evaluate performance?

Various non-GAAP financial measures were used.

First Interstate BancSystem, Inc.

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