First Interstate BancSystem, Inc. (NASDAQ: FIBK) (the “Company”)
today reported financial results for the fourth quarter of 2023.
For the quarter, the Company reported net income of $61.5 million,
or $0.59 per share, which compares to net income of $72.7 million,
or $0.70 per share, for the third quarter of 2023, and net income
of $85.8 million, or $0.82 per share, for the fourth quarter of
2022. Results in the fourth quarter of 2022 include pre-tax
acquisition costs of $3.9 million, which reduced earnings by $0.03
per share.
For the year ending December 31, 2023, the Company reported net
income of $257.5 million, or $2.48 per share, compared to $202.2
million, or $1.96 per share, in 2022. Results in the 2022 period
include pre-tax acquisition costs related to the Great Western
acquisition of $118.9 million, which reduced earnings by $0.90 per
share.
HIGHLIGHTS
- Net income of $61.5 million, or $0.59 per share, for the fourth
quarter of 2023, compared to net income of $72.7 million, or $0.70
per share, for the third quarter of 2023. The fourth quarter of
2023 includes a $10.5 million pre-tax accrual for the FDIC special
assessment.
- Loans held for investment increased $66.3 million at December
31, 2023, compared to September 30, 2023 and increased $180.4
million, compared to December 31, 2022.
- Non-performing assets increased $31.6 million at December 31,
2023, compared to September 30, 2023 and increased $49.5 million,
compared to December 31, 2022. The increase is primarily due to a
$28.7 million loan transferred from loans held for sale to loans
held for investment and the transfer of a loan held for sale of
$5.8 million into OREO in the fourth quarter of 2023.
- Net interest margin decreased to 2.99% for the fourth quarter
of 2023, a 6 basis point decrease from the third quarter of 2023.
Net interest margin, on a fully taxable equivalent (“FTE”) basis,1
decreased to 3.01% for the fourth quarter of 2023, a 6 basis point
decrease from the third quarter of 2023.
- The Company completed the purchase of 1.0 million of its common
shares from the estate of a stockholder at $32.14 per share during
the fourth quarter of 2023.
- Book value per common share increased to $31.05 as of December
31, 2023, compared to $29.38 as of September 30, 2023, and $29.43
as of December 31, 2022, resulting from changes in accumulated
other comprehensive loss related to unrealized gains on
available-for-sale securities and an increase in retained earnings,
partially offset by a decrease in common stock and reduction in
common shares outstanding. As of December 31, 2023, the accumulated
other comprehensive loss position was equal to $3.43 of book value
per common share, which is an improvement from $4.97 of book value
per common share as of September 30, 2023. Tangible book value per
common share1 was $19.41 as of December 31, 2023, compared to
$17.82 as of September 30, 2023 and $17.69 as of December 31,
2022.
“We executed well in the fourth quarter, completing a share
repurchase and accomplishing the cost savings initiative we
mentioned last quarter,” said Kevin P. Riley, President and Chief
Executive Officer of First Interstate BancSystem, Inc. “Even in
this challenging environment, we saw attractive lending
opportunities which generated a modest level of loan growth. With
our strong financial performance, we had increases in our capital
ratios and were able to maintain a healthy dividend, providing
value for our shareholders.”
“Given our high level of capital, liquidity, adequate allowance
for credit losses, and the work we are doing to control expenses,
we believe we are well positioned coming into 2024. Should a more
favorable, stable economic environment create higher loan demand,
we have the ability and willingness to meet those needs. Given the
breadth of products and services, and superior level of service
that we offer, our focus will continue to be on growing our client
base in 2024 and delivering another year of solid financial
performance for our shareholders,” said Mr. Riley.
DIVIDEND DECLARATION
On January 26, 2024, the Company’s board of directors declared a
dividend of $0.47 per common share, payable on February 19, 2024,
to common stockholders of record as of February 9, 2024. The
dividend equates to a 7.2% annualized yield based on the $26.01 per
share average closing price of the Company’s common stock as
reported on NASDAQ during the fourth quarter of 2023.
NET INTEREST INCOME
Net interest income decreased $5.9 million, or 2.8%, to $207.8
million, during the fourth quarter of 2023, compared to net
interest income of $213.7 million during the third quarter of 2023
and decreased $50.6 million, or 19.6%, during the fourth quarter of
2023 from the fourth quarter of 2022, primarily due to an increase
in interest expense as a result of a higher costs of
interest-bearing liabilities.
- Interest accretion attributable to the fair valuation of
acquired loans from acquisitions contributed to net interest income
during the fourth quarter of 2023, the third quarter of 2023, and
the fourth quarter of 2022, in the amounts of $5.4 million, $5.2
million, and $8.4 million, respectively.
The net interest margin ratio was 2.99% for the fourth quarter
of 2023, compared to 3.05% during the third quarter of 2023, and
3.57% during the fourth quarter of 2022. The net FTE interest
margin ratio1, a non-GAAP measure, was 3.01% for the fourth quarter
of 2023, compared to 3.07% during the third quarter of 2023, and
3.61% during the fourth quarter of 2022. Excluding interest
accretion from the fair value of acquired loans, on a
quarter-over-quarter basis, the adjusted net FTE interest margin
ratio1, a non-GAAP measure, was 2.94%, a decrease of 6 basis points
from the prior quarter, primarily driven by higher interest-bearing
deposit costs, 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
55 basis points, primarily as a result of higher short-term
borrowing costs, and higher interest-bearing deposit costs, which
was partially offset by loan yield expansion and a modestly
favorable change in the mix of earning assets.
______________________________
1
Non-GAAP financial measure - see Non-GAAP Financial Measures
included herein for a reconciliation to GAAP measures.
PROVISION FOR (REDUCTION OF) CREDIT LOSSES
During the fourth quarter of 2023, the Company recorded a
provision for credit losses of $5.4 million, which included a
provision for credit losses of $5.8 million on loans held for
investment and a reduction of provision for credit losses for
unfunded commitments of $0.4 million. This compares to a reduction
of provision for credit losses of $0.1 million during the third
quarter of 2023 and a provision for credit losses of $14.7 million
during the fourth quarter of 2022.
For the fourth quarter of 2023, the allowance for credit losses
included net charge-offs of $4.8 million, or an annualized 0.10% of
average loans outstanding, compared to net charge-offs of $1.1
million, or an annualized 0.02% of average loans outstanding, for
both the third quarter of 2023 and the fourth quarter of 2022. Net
loan charge-offs in the fourth quarter of 2023 were composed of
charge-offs of $6.7 million and recoveries of $1.9 million.
The Company’s allowance for credit losses as a percentage of
period-end loans held for investment increased modestly to 1.25% at
December 31, 2023 from 1.24% at September 30, 2023, and from 1.22%
at December 31, 2022. Coverage of non-performing loans decreased to
204.6% at December 31, 2023, compared to 268.0% at September 30,
2023 and 335.5% at December 31, 2022.
NON-INTEREST INCOME
For the Quarter Ended
Dec 31, 2023
Sep 30, 2023
$ Change
% Change
Dec 31, 2022
$ Change
% Change
(Dollars in millions)
Payment services revenues
$
18.4
$
19.2
$
(0.8
)
(4.2
)%
$
19.4
$
(1.0
)
(5.2
)%
Mortgage banking revenues
1.5
2.0
(0.5
)
(25.0
)
2.6
(1.1
)
(42.3
)
Wealth management revenues
8.8
8.7
0.1
1.1
8.4
0.4
4.8
Service charges on deposit accounts
6.0
6.0
—
—
4.9
1.1
22.4
Other service charges, commissions, and
fees
2.5
2.2
0.3
13.6
2.9
(0.4
)
(13.8
)
Other income
7.3
3.9
3.4
87.2
3.4
3.9
114.7
Total non-interest income
$
44.5
$
42.0
$
2.5
6.0
%
$
41.6
$
2.9
7.0
%
Non-interest income was $44.5 million for the fourth quarter of
2023, increasing $2.5 million and $2.9 million compared to the
third quarter of 2023 and the fourth quarter of 2022, respectively.
The increases were primarily the result of the disposition of
premises and equipment during the fourth quarter of 2023, which
resulted in a net gain of $2.9 million compared to the third
quarter of 2023 and the fourth quarter of 2022.
NON-INTEREST EXPENSE
For the Quarter Ended
Dec 31, 2023
Sep 30, 2023
$ Change
% Change
Dec 31, 2022
$ Change
% Change
(Dollars in millions)
Salaries and wages
$
64.0
$
65.4
$
(1.4
)
(2.1
)%
$
75.4
$
(11.4
)
(15.1
)%
Employee benefits
13.5
19.7
(6.2
)
(31.5
)
17.3
(3.8
)
(22.0
)
Occupancy and equipment
17.4
17.0
0.4
2.4
17.9
(0.5
)
(2.8
)
Other intangible amortization
3.9
3.9
—
—
4.1
(0.2
)
(4.9
)
Other expenses
67.0
54.6
12.4
22.7
54.5
12.5
22.9
Other real estate owned expense
0.2
0.5
(0.3
)
(60.0
)
2.2
(2.0
)
NM
Acquisition related expenses
—
—
—
—
3.9
(3.9
)
NM
Total non-interest expense
$
166.0
$
161.1
$
4.9
3.0
%
$
175.3
$
(9.3
)
(5.3
)%
The Company’s non-interest expense was $166.0 million for the
fourth quarter of 2023, an increase of $4.9 million from the third
quarter of 2023 and decrease of $9.3 million from the fourth
quarter of 2022. The decrease is partially due to the acquisition
expenses incurred during the fourth quarter of 2022 related to the
acquisition of Great Western Bank.
The quarter-over-quarter increase was primarily due to a $10.5
million accrual for the FDIC special assessment included in other
expenses, and an increase in severance costs of $3.6 million,
included in salaries and wages. Additionally, we saw higher
engagement by our clients in our rewards program, resulting in an
increase in our credit card rewards accrual of $2.1 million,
included in other expenses. These increases were partially offset
by decreases in salaries and wages and short and long-term
incentive accruals of $12.3 million.
Salary and wage expenses decreased $1.4 million during the
fourth quarter of 2023 compared to the third quarter of 2023,
primarily due to lower salaries and wages and short-term incentive
accruals of $4.8 million, partially offset by $3.6 million of
severance costs incurred during the fourth quarter of 2023.
Salaries and wage expenses decreased $11.4 million during the
fourth quarter of 2023 compared to the fourth quarter of 2022,
primarily due to lower short-term incentive accruals of $13.8
million, and lower salaries and wages which were partially offset
by higher net severance costs of $1.9 million in the fourth quarter
of 2023.
Employee benefit expenses decreased $6.2 million during the
fourth quarter of 2023 compared to the third quarter of 2023,
primarily due to lower long-term incentive accruals of $7.5
million, partially offset by higher health insurance costs of $1.0
million. Employee benefit expenses decreased $3.8 million during
the fourth quarter of 2023 compared to the fourth quarter of 2022,
primarily due to lower long-term incentive accruals of $4.9
million, partially offset by higher health insurance costs of $1.2
million.
Other expenses increased $12.4 million during the fourth quarter
of 2023 compared to the third quarter of 2023, and increased $12.5
million as compared to the fourth quarter of 2022. The increase in
other expenses was primarily due to an accrual for the FDIC special
assessment of $10.5 million and higher engagement by our clients in
our rewards program, resulting in an increase in credit card
rewards accrual of $2.1 million during the fourth quarter of
2023.
BALANCE SHEET
Total assets increased $130.4 million, or 0.4%, to $30,671.2
million as of December 31, 2023, from $30,540.8 million as of
September 30, 2023, primarily due to an increase in investment
securities as a result of changes in the unrealized fair value of
investment securities and the Company’s decision to reinvest cash
flows of the portfolio at higher yields, along with a modest
increase in loans. These increases were partially offset by a
decrease in other assets driven by a decrease in interest rate swap
contracts and deferred tax assets related to the unrealized loss of
investment securities and interest rate swap contracts. Total
assets decreased $1,616.6 million, or 5.0%, from $32,287.8 million
as of December 31, 2022, primarily due to declines in deposits and
securities sold under repurchase agreements, partially offset by an
increase in other borrowed funds.
Investment securities increased $162.2 million, or 1.8%, to
$9,049.4 million as of December 31, 2023, from $8,887.2 million as
of September 30, 2023, primarily as a result of increases in fair
market values. Investment securities decreased $1,348.5 million, or
13.0%, from $10,397.9 million as of December 31, 2022, which was
primarily the result of the disposition of $853.0 million of
investment securities during the first quarter of 2023 and normal
cash flow activity, partially offset by increases in fair market
values and a reduction of $1.1 million in allowance for credit
losses on held-to-maturity securities during the period.
The following table presents the composition and comparison of
loans held for investment as of the quarters-ended:
Dec 31, 2023
Sep 30, 2023
$ Change
% Change
Dec 31, 2022
$ Change
% Change
Real Estate:
Commercial
$
8,869.2
$
8,766.2
$
103.0
1.2
%
$
8,528.6
$
340.6
4.0
%
Construction
1,826.5
1,930.3
(103.8
)
(5.4
)
1,944.4
(117.9
)
(6.1
)
Residential
2,244.3
2,212.2
32.1
1.5
2,188.3
56.0
2.6
Agricultural
716.8
731.5
(14.7
)
(2.0
)
794.9
(78.1
)
(9.8
)
Total real estate
13,656.8
13,640.2
16.6
0.1
13,456.2
200.6
1.5
Consumer:
Indirect
740.9
751.7
(10.8
)
(1.4
)
829.7
(88.8
)
(10.7
)
Direct and advance lines
141.6
142.3
(0.7
)
(0.5
)
152.9
(11.3
)
(7.4
)
Credit card
76.5
71.6
4.9
6.8
75.9
0.6
0.8
Total consumer
959.0
965.6
(6.6
)
(0.7
)
1,058.5
(99.5
)
(9.4
)
Commercial
2,906.8
2,925.1
(18.3
)
(0.6
)
2,882.6
24.2
0.8
Agricultural
769.4
690.5
78.9
11.4
708.3
61.1
8.6
Other, including overdrafts
0.1
5.0
(4.9
)
(98.0
)
9.2
(9.1
)
(98.9
)
Deferred loan fees and costs
(12.5
)
(13.1
)
0.6
(4.6
)
(15.6
)
3.1
(19.9
)
Loans held for investment, net of deferred
loan fees and costs
$
18,279.6
$
18,213.3
$
66.3
0.4
%
$
18,099.2
$
180.4
1.0
%
The ratio of loans held for investment to deposits increased to
78.4%, as of December 31, 2023, compared to 76.9% as of September
30, 2023 and 72.2% as of December 31, 2022.
Total deposits decreased $356.4 million, or 1.5%, to $23,323.1
million as of December 31, 2023, from $23,679.5 million as of
September 30, 2023, with decreases in all categories with the
exception of demand deposits. Total deposits decreased $1,750.5
million, or 7.0%, from $25,073.6 million as of December 31, 2022,
with decreases in all types of deposits with the exception of time
deposits.
Securities sold under repurchase agreements decreased $106.8
million, or 12.0%, to $782.7 million as of December 31, 2023, from
$889.5 million as of September 30, 2023, and decreased $270.2
million, or 25.7%, from $1,052.9 million as of December 31, 2022,
as a result of normal fluctuations in the liquidity needs of the
Company’s clients.
Other borrowed funds is comprised of Federal Home Loan Bank
variable rate overnight and fixed rate borrowings with contractual
tenors of up to three-months. Other borrowed funds increased $536.0
million, or 25.9%, to $2,603.0 million as of December 31, 2023,
from $2,067.0 million as of September 30, 2023, and increased
$276.0 million from December 31, 2022, as a result of changes in
total deposits, investment securities, securities sold under
repurchase agreements, and cash and cash equivalents.
The Company is considered to be “well-capitalized” as of
December 31, 2023, having exceeded all regulatory capital adequacy
requirements. During the fourth quarter of 2023, the Company paid
regular common stock dividends of approximately $48.7 million, or
$0.47 per share.
CREDIT QUALITY
As of December 31, 2023, non-performing assets increased $31.6
million, or 32.8%, to $127.8 million, compared to $96.2 million as
of September 30, 2023, primarily due to an increase in non-accrual
loans of $25.0 million driven by agricultural loans that were
reclassified from loans held for sale to loans held for investment,
an increase in accruing loans past due 90 days or more of $1.7
million, and an increase in property classified as other real
estate owned of $4.9 million driven by a commercial loan
transferred to other real estate owned from loans held for sale of
$5.8 million, partially offset by a disposition.
Criticized loans increased $55.4 million, or 8.8%, to $688.3
million as of December 31, 2023, from $632.9 million as of
September 30, 2023 driven by $35.0 million in agricultural loans
that were reclassified from loans held for sale to loans held for
investment and other downgrades, including $27.4 million related to
four commercial real estate loans, which were offset by upgrades
and paydowns.
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, Great Western’s
or the combined company’s 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 development 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;
- 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;
- changes to United States trade policies, including the
imposition of tariffs and retaliatory tariffs;
- interest rate effect on the value of our investment
securities;
- cyber-security 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;
- 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 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.
Fourth Quarter 2023 Conference Call for Investors
First Interstate BancSystem, Inc. will host a conference call to
discuss the results for the fourth quarter of 2023 at 11 a.m.
Eastern Time (9 a.m. Mountain Time) on Wednesday, January 31, 2024.
The conference call will be accessible by telephone and through the
Internet. Participants may join the call by dialing 1-888-259-6580;
the access code is 16247616. To participate via the Internet, visit
www.FIBK.com. The call will be recorded and made available for
replay on January 31, 2024, after 1 p.m. Eastern Time (11 a.m.
Mountain Time), through March 1, 2024, prior to 9 a.m. Eastern Time
(7 a.m. Mountain Time), by dialing 1-877-674-7070. The replay
access code is 247616. 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)
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
4Q23 vs 3Q23
4Q23 vs 4Q22
Net interest income
$
207.8
$
213.7
$
218.4
$
238.9
$
258.4
(2.8
)%
(19.6
)%
Net interest income on a fully-taxable
equivalent ("FTE") basis
209.5
215.4
220.2
240.7
260.7
(2.7
)
(19.6
)
Provision for (reduction in) credit
losses
5.4
(0.1
)
11.7
15.2
14.7
NM
NM
Non-interest income:
Payment services revenues
18.4
19.2
20.1
18.7
19.4
(4.2
)
(5.2
)
Mortgage banking revenues
1.5
2.0
2.6
2.3
2.6
(25.0
)
(42.3
)
Wealth management revenues
8.8
8.7
8.8
9.0
8.4
1.1
4.8
Service charges on deposit accounts
6.0
6.0
5.8
5.2
4.9
—
22.4
Other service charges, commissions, and
fees
2.5
2.2
2.4
2.4
2.9
13.6
(13.8
)
Total fee-based revenues
37.2
38.1
39.7
37.6
38.2
(2.4
)
(2.6
)
Investment securities loss
—
—
(0.1
)
(23.4
)
—
—
—
Other income
7.3
3.9
4.5
2.2
3.4
87.2
114.7
Total non-interest income
44.5
42.0
44.1
16.4
41.6
6.0
7.0
Non-interest expense:
Salaries and wages
64.0
65.4
68.1
65.6
75.4
(2.1
)
(15.1
)
Employee benefits
13.5
19.7
19.3
22.8
17.3
(31.5
)
(22.0
)
Occupancy and equipment
17.4
17.0
17.3
18.4
17.9
2.4
(2.8
)
Other intangible amortization
3.9
3.9
3.9
4.0
4.1
—
(4.9
)
Other expenses
67.0
54.6
54.7
54.8
54.5
22.7
22.9
Other real estate owned expense
0.2
0.5
0.6
0.2
2.2
(60.0
)
NM
Acquisition related expenses
—
—
—
—
3.9
—
NM
Total non-interest expense
166.0
161.1
163.9
165.8
175.3
3.0
(5.3
)
Income before income tax
80.9
94.7
86.9
74.3
110.0
(14.6
)
(26.5
)
Provision for income tax
19.4
22.0
19.9
18.0
24.2
(11.8
)
(19.8
)
Net income
$
61.5
$
72.7
$
67.0
$
56.3
$
85.8
(15.4
)%
(28.3
)%
Weighted-average basic shares
outstanding
103,629
103,822
103,821
103,738
104,445
(0.2
)%
(0.8
)%
Weighted-average diluted shares
outstanding
103,651
103,826
103,823
103,819
104,548
(0.2
)
(0.9
)
Earnings per share - basic
$
0.59
$
0.70
$
0.65
$
0.54
$
0.82
(15.7
)
(28.0
)
Earnings per share - diluted
0.59
0.70
0.65
0.54
0.82
(15.7
)
(28.0
)
NM - not meaningful
FIRST INTERSTATE BANCSYSTEM,
INC. AND SUBSIDIARIES
Consolidated Statements of
Income
(Unaudited)
Year Ended December 31,
% Change
(In millions, except % and per share
data)
2023
2022
2023 vs 2022
Net interest income
$
878.8
$
942.6
(6.8
)
Net interest income on a FTE basis
885.8
950.7
(6.8
)
Provision for credit losses
32.2
82.7
(61.1
)
Non-interest income:
Payment services revenues
76.4
74.1
3.1
Mortgage banking revenues
8.4
18.7
(55.1
)
Wealth management revenues
35.3
34.3
2.9
Service charges on deposit accounts
23.0
24.6
(6.5
)
Other service charges, commissions, and
fees
9.5
15.5
(38.7
)
Total fee-based revenues
152.6
167.2
(8.7
)
Investment securities loss
(23.5
)
(24.4
)
NM
Other income
17.9
20.4
(12.3
)
Total non-interest income
147.0
163.2
(9.9
)
Non-interest expense:
Salaries and wages
263.1
282.1
(6.7
)
Employee benefits
75.3
77.5
(2.8
)
Occupancy and equipment
70.1
67.4
4.0
Other intangible amortization
15.7
15.9
(1.3
)
Other expenses
231.1
201.9
14.5
Other real estate owned expense
1.5
2.3
NM
Acquisition related expenses
—
118.9
NM
Total non-interest expense
656.8
766.0
(14.3
)
Income before income tax
336.8
257.1
31.0
Provision for income tax
79.3
54.9
44.4
Net income
$
257.5
$
202.2
27.3
Weighted-average basic shares
outstanding
103,752
103,274
0.5
Weighted-average diluted shares
outstanding
103,780
103,341
0.4
Earnings per share - basic
$
2.48
$
1.96
26.5
Earnings per share - diluted
2.48
1.96
26.5
NM - not meaningful
FIRST INTERSTATE BANCSYSTEM,
INC. AND SUBSIDIARIES
Consolidated Balance
Sheets
(Unaudited)
% Change
(In millions, except % and per share
data)
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
4Q23 vs 3Q23
4Q23 vs 4Q22
Assets:
Cash and due from banks
$
378.2
$
371.5
$
479.0
$
332.9
$
349.2
1.8
%
8.3
%
Interest-bearing deposits in banks
199.7
219.5
201.4
747.7
521.2
(9.0
)
(61.7
)
Federal funds sold
0.1
2.1
0.1
0.1
0.1
NM
—
Cash and cash equivalents
578.0
593.1
680.5
1,080.7
870.5
(2.5
)
(33.6
)
Investment securities, net
9,049.4
8,887.2
9,175.6
9,425.5
10,397.9
1.8
(13.0
)
Investment in Federal Home Loan Bank and
Federal Reserve Bank stock
223.2
189.5
210.4
214.5
198.6
17.8
12.4
Loans held for sale, at fair value
47.4
59.1
76.5
80.9
79.9
(19.8
)
(40.7
)
Loans held for investment
18,279.6
18,213.3
18,263.4
18,245.7
18,099.2
0.4
1.0
Allowance for credit losses
(227.7
)
(226.7
)
(224.6
)
(226.1
)
(220.1
)
0.4
3.5
Net loans held for investment
18,051.9
17,986.6
18,038.8
18,019.6
17,879.1
0.4
1.0
Goodwill and intangible assets (excluding
mortgage servicing rights)
1,210.3
1,214.1
1,218.0
1,221.9
1,225.9
(0.3
)
(1.3
)
Company owned life insurance
502.4
500.8
502.0
499.4
497.9
0.3
0.9
Premises and equipment
444.3
446.3
443.7
443.4
444.7
(0.4
)
(0.1
)
Other real estate owned
16.5
11.6
14.4
13.4
12.7
42.2
29.9
Mortgage servicing rights
28.3
29.1
29.8
30.1
31.1
(2.7
)
(9.0
)
Other assets
519.5
623.4
586.6
608.3
649.5
(16.7
)
(20.0
)
Total assets
$
30,671.2
$
30,540.8
$
30,976.3
$
31,637.7
$
32,287.8
0.4
%
(5.0
)%
Liabilities and stockholders' equity:
Deposits
$
23,323.1
$
23,679.5
$
23,579.2
$
24,107.0
$
25,073.6
(1.5
)%
(7.0
)%
Securities sold under repurchase
agreements
782.7
889.5
929.9
970.8
1,052.9
(12.0
)
(25.7
)
Long-term debt
120.8
120.8
120.8
120.8
120.8
—
—
Other borrowed funds
2,603.0
2,067.0
2,589.0
2,710.0
2,327.0
25.9
11.9
Subordinated debentures held by subsidiary
trusts
163.1
163.1
163.1
163.1
163.1
—
—
Other liabilities
451.0
535.4
473.1
405.7
476.6
(15.8
)
(5.4
)
Total liabilities
27,443.7
27,455.3
27,855.1
28,477.4
29,214.0
—
(6.1
)
Stockholders' equity:
Common stock
2,448.9
2,484.9
2,481.4
2,478.7
2,478.2
(1.4
)
(1.2
)
Retained earnings
1,135.1
1,122.3
1,098.8
1,080.7
1,072.7
1.1
5.8
Accumulated other comprehensive loss
(356.5
)
(521.7
)
(459.0
)
(399.1
)
(477.1
)
(31.7
)
(25.3
)
Total stockholders' equity
3,227.5
3,085.5
3,121.2
3,160.3
3,073.8
4.6
5.0
Total liabilities and stockholders'
equity
$
30,671.2
$
30,540.8
$
30,976.3
$
31,637.7
$
32,287.8
0.4
%
(5.0
)%
Common shares outstanding at period
end
103,942
105,011
105,021
104,382
104,442
(1.0
)%
(0.5
)%
Book value per common share at period
end
$
31.05
$
29.38
$
29.72
$
30.28
$
29.43
5.7
5.5
Tangible book value per common share at
period end**
19.41
17.82
18.12
18.57
17.69
8.9
9.7
**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 %)
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
4Q23 vs 3Q23
4Q23 vs 4Q22
Loans held for investment:
Real Estate:
Commercial
$
8,869.2
$
8,766.2
$
8,813.9
$
8,680.8
$
8,528.6
1.2
%
4.0
%
Construction
1,826.5
1,930.3
1,836.5
1,893.0
1,944.4
(5.4
)
(6.1
)
Residential
2,244.3
2,212.2
2,198.3
2,191.1
2,188.3
1.5
2.6
Agricultural
716.8
731.5
755.7
769.7
794.9
(2.0
)
(9.8
)
Total real estate
13,656.8
13,640.2
13,604.4
13,534.6
13,456.2
0.1
1.5
Consumer:
Indirect
740.9
751.7
764.1
817.3
829.7
(1.4
)
(10.7
)
Direct
141.6
142.3
144.0
146.9
152.9
(0.5
)
(7.4
)
Credit card
76.5
71.6
72.1
71.5
75.9
6.8
0.8
Total consumer
959.0
965.6
980.2
1,035.7
1,058.5
(0.7
)
(9.4
)
Commercial
2,906.8
2,925.1
3,002.7
3,028.0
2,882.6
(0.6
)
0.8
Agricultural
769.4
690.5
688.0
660.4
708.3
11.4
8.6
Other
0.1
5.0
1.7
1.6
9.2
(98.0
)
(98.9
)
Deferred loan fees and costs
(12.5
)
(13.1
)
(13.6
)
(14.6
)
(15.6
)
(4.6
)
(19.9
)
Loans held for investment
$
18,279.6
$
18,213.3
$
18,263.4
$
18,245.7
$
18,099.2
0.4
%
1.0
%
Deposits:
Non-interest-bearing
$
6,029.6
$
6,402.6
$
6,518.2
$
6,861.1
$
7,560.0
(5.8
)%
(20.2
)%
Interest-bearing:
Demand
6,507.8
6,317.9
6,481.9
6,714.1
7,205.9
3.0
(9.7
)
Savings
7,775.8
7,796.3
7,836.7
8,282.9
8,379.3
(0.3
)
(7.2
)
Time, $250 and over
811.6
817.1
657.9
526.5
438.0
(0.7
)
85.3
Time, other
2,198.3
2,345.6
2,084.5
1,722.4
1,490.4
(6.3
)
47.5
Total interest-bearing
17,293.5
17,276.9
17,061.0
17,245.9
17,513.6
0.1
(1.3
)
Total deposits
$
23,323.1
$
23,679.5
$
23,579.2
$
24,107.0
$
25,073.6
(1.5
)%
(7.0
)%
Total core deposits (1)
$
22,511.5
$
22,862.4
$
22,921.3
$
23,580.5
$
24,635.6
(1.5
)%
(8.6
)%
(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 %)
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
4Q23 vs 3Q23
4Q23 vs 4Q22
Allowance for Credit Losses:
Allowance for credit losses
$
227.7
$
226.7
$
224.6
$
226.1
$
220.1
0.4
%
3.5
%
As a percentage of loans held for
investment
1.25
%
1.24
%
1.23
%
1.24
%
1.22
%
As a percentage of non-accrual loans
214.00
278.50
260.86
279.83
371.79
Net loan charge-offs during quarter
$
4.8
$
1.1
$
11.4
$
6.2
$
1.1
336.4
%
336.4
%
Annualized as a percentage of average
loans
0.10
%
0.02
%
0.25
%
0.14
%
0.02
%
Non-Performing Assets:
Non-accrual loans
$
106.4
$
81.4
$
86.1
$
80.8
$
59.2
30.7
%
79.7
%
Accruing loans past due 90 days or
more
4.9
3.2
6.7
4.5
6.4
53.1
(23.4
)
Total non-performing loans
111.3
84.6
92.8
85.3
65.6
31.6
69.7
Other real estate owned
16.5
11.6
14.4
13.4
12.7
42.2
29.9
Total non-performing assets
$
127.8
$
96.2
$
107.2
$
98.7
$
78.3
32.8
%
63.2
%
Non-performing assets as a percentage
of:
Loans held for investment and OREO
0.70
%
0.53
%
0.59
%
0.54
%
0.43
%
Total assets
0.42
0.31
0.35
0.31
0.24
Non-accrual loans to loans held for
investment
0.58
0.45
0.47
0.44
0.33
Accruing Loans 30-89 Days Past Due
$
67.3
$
51.2
$
49.5
$
52.3
$
62.3
31.4
%
8.0
%
Criticized Loans:
Special Mention
$
210.5
$
197.3
$
221.9
$
243.8
$
290.4
6.7
%
(27.5
)%
Substandard
457.1
414.6
386.9
355.0
316.2
10.3
44.6
Doubtful
20.7
21.0
32.8
22.8
8.5
(1.4
)
143.5
Total
$
688.3
$
632.9
$
641.6
$
621.6
$
615.1
8.8
%
11.9
%
FIRST INTERSTATE BANCSYSTEM,
INC. AND SUBSIDIARIES
Selected Ratios -
Annualized
(Unaudited)
At or for the Quarter ended:
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Annualized Financial Ratios
(GAAP)
Return on average assets
0.80
%
0.94
%
0.86
%
0.71
%
1.07
%
Return on average common stockholders'
equity
7.77
9.20
8.44
7.25
11.16
Yield on average earning assets
4.69
4.63
4.52
4.43
4.24
Cost of average interest-bearing
liabilities
2.24
2.09
1.88
1.46
0.89
Interest rate spread
2.45
2.54
2.64
2.97
3.35
Efficiency ratio
64.25
61.48
60.95
63.38
57.07
Loans held for investment to deposit
ratio
78.38
76.92
77.46
75.69
72.18
Annualized Financial Ratios -
Operating** (Non-GAAP)
Net FTE interest margin ratio
3.01
%
3.07
%
3.12
%
3.36
%
3.61
%
Tangible book value per common share
$
19.41
$
17.82
$
18.12
$
18.57
$
17.69
Tangible common stockholders' equity to
tangible assets
6.85
%
6.38
%
6.40
%
6.37
%
5.95
%
Return on average tangible common
stockholders' equity
12.65
15.04
13.69
11.87
18.67
Consolidated Capital Ratios
Total risk-based capital to total
risk-weighted assets
13.28
%
*
13.19
%
12.90
%
12.63
%
12.48
%
Tier 1 risk-based capital to total
risk-weighted assets
11.08
*
11.02
10.76
10.52
10.45
Tier 1 common capital to total
risk-weighted assets
11.08
*
11.02
10.76
10.52
10.45
Leverage Ratio
8.22
*
8.22
7.99
7.72
7.75
*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
Selected Ratios
(Unaudited)
At or for the Year ended:
Dec 31, 2023
Dec 31, 2022
Financial Ratios (GAAP)
Return on average assets
0.83
%
0.65
%
Return on average common stockholders'
equity
8.17
6.34
Yield on average earning assets
4.57
3.63
Cost of average interest-bearing
liabilities
1.91
0.40
Interest rate spread
2.66
3.23
Efficiency ratio
62.50
67.83
Financial Ratios - Operating**
(Non-GAAP)
Net FTE interest margin ratio
3.14
3.36
Return on average tangible common
stockholders' equity
13.32
10.09
**Non-GAAP financial measures - see
Non-GAAP Financial Measures included herein for a reconciliation of
net interest margin to net FTE interest margin and return on
average common stockholders’ equity (GAAP) to return on average
tangible common stockholders’ equity (non-GAAP).
FIRST INTERSTATE BANCSYSTEM,
INC. AND SUBSIDIARIES
Average Balance Sheets
(Unaudited)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
(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)
$
18,255.9
$
254.1
5.52
%
$
18,317.4
$
251.5
5.45
%
$
17,920.5
$
230.5
5.10
%
Investment securities
Taxable
8,710.1
64.8
2.95
8,877.6
66.0
2.95
10,148.0
70.4
2.75
Tax-exempt
190.0
0.9
1.88
190.4
0.9
1.88
235.8
1.2
2.02
Investment in FHLB and FRB stock
192.1
3.1
6.40
202.6
2.9
5.68
156.4
2.0
5.07
Interest-bearing deposits in banks
221.0
3.1
5.57
208.5
3.0
5.71
220.1
2.2
3.97
Federal funds sold
0.3
—
—
0.3
—
—
0.1
—
—
Total interest-earning assets
$
27,569.4
$
326.0
4.69
%
$
27,796.8
$
324.3
4.63
%
$
28,680.9
$
306.3
4.24
%
Non-interest-earning assets
2,938.3
2,955.5
3,035.1
Total assets
$
30,507.7
$
30,752.3
$
31,716.0
Interest-bearing liabilities:
Demand deposits
$
6,469.1
$
15.3
0.94
%
$
6,361.5
$
13.3
0.83
%
$
7,412.7
$
7.9
0.42
%
Savings deposits
7,769.3
37.4
1.91
7,838.4
33.6
1.70
8,446.7
14.8
0.70
Time deposits
3,179.4
27.2
3.39
2,938.0
21.9
2.96
1,848.6
5.0
1.07
Repurchase agreements
842.2
2.1
0.99
895.2
1.7
0.75
1,091.2
1.1
0.40
Other borrowed funds
2,087.6
29.7
5.64
2,396.3
33.6
5.56
1,260.0
12.9
4.06
Long-term debt
120.8
1.4
4.60
120.8
1.5
4.93
120.8
1.4
4.60
Subordinated debentures held by subsidiary
trusts
163.1
3.4
8.27
163.1
3.3
8.03
163.1
2.5
6.08
Total interest-bearing liabilities
$
20,631.5
$
116.5
2.24
%
$
20,713.3
$
108.9
2.09
%
$
20,343.1
$
45.6
0.89
%
Non-interest-bearing deposits
6,222.1
6,401.2
7,871.8
Other non-interest-bearing liabilities
513.8
504.0
451.0
Stockholders’ equity
3,140.3
3,133.8
3,050.1
Total liabilities and stockholders’
equity
$
30,507.7
$
30,752.3
$
31,716.0
Net FTE interest income (non-GAAP)(3)
$
209.5
$
215.4
$
260.7
Less FTE adjustments (2)
(1.7
)
(1.7
)
(2.3
)
Net interest income from consolidated
statements of income
$
207.8
$
213.7
$
258.4
Interest rate spread
2.45
%
2.54
%
3.35
%
Net interest margin
2.99
3.05
3.57
Net FTE interest margin (non-GAAP)(3)
3.01
3.07
3.61
Cost of funds, including
non-interest-bearing demand deposits (4)
1.72
1.59
0.64
(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% and 26.25%
tax rate for 2023 and 2022, respectively.
(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
Average Balance Sheets
(Unaudited)
Year Ended December 31,
2023
2022
(In millions, except %)
Average
Balance
Interest(2)
Average
Rate
Average
Balance
Interest(2)
Average
Rate
Interest earning assets:
Loans (1)
$
18,299.6
$
986.0
5.39
%
$
16,802.2
$
797.2
4.74
%
Investment securities
Taxable
9,173.1
269.1
2.93
9,729.8
213.9
2.20
Tax-exempt
199.7
3.9
1.95
243.6
5.0
2.05
Investment in FHLB and FRB stock
207.5
12.4
5.98
116.6
4.8
4.12
Interest-bearing deposits in banks
303.0
15.7
5.18
1,432.8
8.7
0.61
Federal funds sold
0.5
—
—
0.5
—
—
Total interest-earning assets
$
28,183.4
$
1,287.1
4.57
%
$
28,325.5
$
1,029.6
3.63
%
Non-interest-earning assets
2,951.1
2,804.2
Total assets
$
31,134.5
$
31,129.7
Interest-bearing liabilities:
Demand deposits
$
6,553.3
$
47.2
0.72
%
$
7,549.8
$
15.7
0.21
%
Savings deposits
7,989.3
122.2
1.53
8,732.7
24.5
0.28
Time deposits
2,676.3
73.2
2.74
1,577.0
8.1
0.51
Repurchase agreements
940.4
6.4
0.68
1,114.5
2.5
0.22
Other borrowed funds
2,514.6
133.8
5.32
411.1
15.3
3.72
Long-term debt
120.8
5.8
4.80
122.2
6.0
4.91
Subordinated debentures held by subsidiary
trusts
163.1
12.7
7.79
156.6
6.8
4.34
Total interest-bearing liabilities
$
20,957.8
$
401.3
1.91
%
$
19,663.9
$
78.9
0.40
%
Non-interest-bearing deposits
6,549.9
7,911.6
Other non-interest-bearing liabilities
475.9
364.7
Stockholders’ equity
3,150.9
3,189.5
Total liabilities and stockholders’
equity
$
31,134.5
$
31,129.7
Net FTE interest income (non-GAAP)(3)
$
885.8
$
950.7
Less FTE adjustments (2)
(7.0
)
(8.1
)
Net interest income from consolidated
statements of income
$
878.8
$
942.6
Interest rate spread
2.66
%
3.23
%
Net interest margin
3.12
2.84
Net FTE interest margin (3)
3.14
3.36
Cost of funds, including
non-interest-bearing demand deposits (4)
1.46
0.29
(1)
Average loan balances include
mortgage loans held for sale and non-accrual loans. Interest income
on loans includes amortization of deferred loan fees net of
deferred loan costs of $1.3 million and $7.5 million at December
31, 2023 and December 31, 2022, respectively.
(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% and 26.25%
tax rate for 2023 and 2022, respectively.
(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)
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Total common stockholders' equity
(GAAP)
(A)
$
3,227.5
$
3,085.5
$
3,121.2
$
3,160.3
$
3,073.8
Less goodwill and other intangible assets
(excluding mortgage servicing rights)
1,210.3
1,214.1
1,218.0
1,221.9
1,225.9
Tangible common stockholders' equity
(Non-GAAP)
(B)
$
2,017.2
$
1,871.4
$
1,903.2
$
1,938.4
$
1,847.9
Total assets (GAAP)
$
30,671.2
$
30,540.8
$
30,976.3
$
31,637.7
$
32,287.8
Less goodwill and other intangible assets
(excluding mortgage servicing rights)
1,210.3
1,214.1
1,218.0
1,221.9
1,225.9
Tangible assets (Non-GAAP)
(C)
$
29,460.9
$
29,326.7
$
29,758.3
$
30,415.8
$
31,061.9
Average Balances:
Total common stockholders' equity
(GAAP)
(D)
$
3,140.3
$
3,133.8
$
3,182.9
$
3,147.0
$
3,050.1
Less goodwill and other intangible assets
(excluding mortgage servicing rights)
1,212.1
1,216.0
1,219.8
1,223.8
1,226.9
Average tangible common stockholders'
equity (Non-GAAP)
(E)
$
1,928.2
$
1,917.8
$
1,963.1
$
1,923.2
$
1,823.2
Net interest income
(F)
$
207.8
$
213.7
$
218.4
$
238.9
$
258.4
FTE interest income
1.7
1.7
1.8
1.8
2.3
Net FTE interest income
(G)
209.5
215.4
220.2
240.7
260.7
Less purchase accounting accretion
5.4
5.2
4.6
5.2
8.4
Adjusted net FTE interest income
(H)
$
204.1
$
210.2
$
215.6
$
235.5
$
252.3
Average interest-earning assets
(I)
$
27,569.4
$
27,796.8
$
28,328.8
$
29,059.4
$
28,680.9
Total quarterly average assets
(J)
30,507.7
30,752.3
31,287.6
32,010.9
31,716.0
Annualized net income available to common
shareholders
(K)
244.0
288.4
268.7
228.3
340.4
Common shares outstanding
(L)
103,942
105,011
105,021
104,382
104,442
Return on average assets (GAAP)
(K) / (J)
0.80
%
0.94
%
0.86
%
0.71
%
1.07
%
Return on average common stockholders'
equity (GAAP)
(K) / (D)
7.77
9.20
8.44
7.25
11.16
Average common stockholders' equity to
average assets (GAAP)
(D) / (J)
10.29
10.19
10.17
9.83
9.62
Book value per common share (GAAP)
(A) / (L)
$
31.05
$
29.38
$
29.72
$
30.28
$
29.43
Tangible book value per common share
(Non-GAAP)
(B) / (L)
19.41
17.82
18.12
18.57
17.69
Tangible common stockholders' equity to
tangible assets (Non-GAAP)
(B) / (C)
6.85
%
6.38
%
6.40
%
6.37
%
5.95
%
Return on average tangible common
stockholders' equity (Non-GAAP)
(K) / (E)
12.65
15.04
13.69
11.87
18.67
Net interest margin (GAAP)
(F*) / (I)
2.99
3.05
3.09
3.33
3.57
Net interest margin (FTE) (Non-GAAP)
(G*) / (I)
3.01
3.07
3.12
3.36
3.61
Adjusted net interest margin (FTE)
(Non-GAAP)
(H*) / (I)
2.94
3.00
3.05
3.29
3.49
*Annualized
FIRST INTERSTATE BANCSYSTEM,
INC. AND SUBSIDIARIES
Non-GAAP Financial
Measures
(Unaudited)
For the Year Ended
(In millions, except % and per share
data)
Dec 31, 2023
Dec 31, 2022
Average Balances:
Total common stockholders' equity
(GAAP)
(A)
$
3,150.9
$
3,189.5
Less goodwill and other intangible assets
(excluding mortgage servicing rights)
1,217.9
1,186.5
Average tangible common stockholders'
equity (Non-GAAP)
(B)
$
1,933.0
$
2,003.0
Net interest income
(C)
$
878.8
$
942.6
FTE interest income
7.0
8.1
Net FTE interest income
(D)
885.8
950.7
Less: Purchase accounting accretion
20.4
50.4
Adjusted net interest income (FTE)
(E)
$
865.4
$
900.3
Average interest-earning assets
(F)
$
28,183.4
$
28,325.5
Total average assets
(G)
31,134.5
31,129.7
Net income available to common
shareholders
(H)
257.5
202.2
Return on average assets (GAAP)
(H) / (G)
0.83
%
0.65
%
Return on average common stockholders'
equity (GAAP)
(H) / (A)
8.17
6.34
Average common stockholders' equity to
average assets (GAAP)
(A) / (G)
10.12
10.25
Return on average tangible common
stockholders' equity (Non-GAAP)
(H) / (B)
13.32
10.09
Net interest margin (GAAP)
(C) / (F)
3.12
3.33
Net interest margin (FTE) (Non-GAAP)
(D) / (F)
3.14
3.36
Adjusted net interest margin (FTE)
(Non-GAAP)
(E) / (F)
3.07
3.18
(FIBK-ER)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240130517647/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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