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)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424720030/en/
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
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