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Share Name | Share Symbol | Market | Type |
---|---|---|---|
First Interstate BancSystem Inc | NASDAQ:FIBK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.76 | -2.92% | 25.23 | 24.37 | 25.99 | 25.80 | 25.07 | 25.25 | 571,629 | 22:39:55 |
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
“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.
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:
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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