Part I - Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for First Interstate BancSystem, Inc. show a decrease in total assets to $27.6 billion from $29.1 billion at year-end 2024, with Q2 2025 net income rising to $71.7 million from $60.0 million in the prior-year period. [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet reflects a decrease in total assets primarily due to reductions in loans and investment securities, while stockholders' equity increased. Consolidated Balance Sheet Highlights (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $27,566.4 | $29,137.4 | $(1,571.0) | (5.4)% | | Net Loans Held for Investment | $16,143.8 | $17,640.8 | $(1,497.0) | (8.5)% | | Total Investment Securities | $7,312.2 | $7,744.6 | $(432.4) | (5.6)% | | Total Deposits | $22,630.6 | $23,015.6 | $(385.0) | (1.7)% | | Other Borrowed Funds | $250.0 | $1,567.5 | $(1,317.5) | (84.1)% | | Total Stockholders' Equity | $3,421.8 | $3,304.0 | $117.8 | 3.6% | - The decrease in total assets was primarily driven by a reduction in **net loans held for investment** and **total investment securities**. On the liability side, there was a significant decrease in **other borrowed funds** and a modest decline in **total deposits**[7](index=7&type=chunk) [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) The income statement shows an increase in net income for Q2 2025 and year-to-date, driven by higher net interest income and a lower provision for credit losses. Quarterly Income Statement Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $207.2 | $201.7 | +2.7% | | (Reduction of) Provision for Credit Losses | $(0.3) | $9.0 | -103.3% | | Noninterest Income | $41.1 | $42.6 | -3.5% | | Noninterest Expense | $155.1 | $156.9 | -1.1% | | Net Income | $71.7 | $60.0 | +19.5% | | Diluted EPS | $0.69 | $0.58 | +19.0% | Year-to-Date Income Statement Highlights (in millions, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $412.2 | $401.8 | +2.6% | | Provision for Credit Losses | $19.7 | $14.3 | +37.8% | | Noninterest Income | $83.1 | $84.7 | -1.9% | | Noninterest Expense | $315.7 | $317.1 | -0.4% | | Net Income | $121.9 | $118.4 | +3.0% | | Diluted EPS | $1.18 | $1.15 | +2.6% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income significantly increased in Q2 2025, primarily due to higher net income and positive changes in unrealized gains on available-for-sale securities. - Comprehensive income for Q2 2025 was **$106.3 million**, a significant increase from **$61.4 million** in Q2 2024, driven by higher net income and a **$44.7 million** positive change in net unrealized gains on available-for-sale securities[9](index=9&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased, primarily due to net income and other comprehensive income, partially offset by common stock dividends. - Total stockholders' equity increased from **$3.30 billion** at December 31, 2024, to **$3.42 billion** at June 30, 2025, primarily due to net income of **$121.9 million** and other comprehensive income of **$89.0 million**, partially offset by common stock dividends of **$97.1 million**[13](index=13&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flows for the six months ended June 30, 2025, show a net increase in cash and cash equivalents, driven by investing activities and partially offset by financing activities. Six Months Ended June 30, 2025 Cash Flow Summary (in millions) | Cash Flow Activity | Amount | | :--- | :--- | | Net cash provided by operating activities | $146.6 | | Net cash provided by investing activities | $1,742.2 | | Net cash used in financing activities | $(1,695.2) | | **Net increase in cash and cash equivalents** | **$193.6** | - Significant cash inflows from investing activities were driven by a net change in loans held for investment (**$1,064.6 million**) and proceeds from investment securities (**$626.4 million**)[14](index=14&type=chunk) - Major cash outflows in financing activities included a net decrease in deposits of **$385.0 million** and a net decrease in other borrowed funds of **$1,317.5 million**[14](index=14&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes provide details on the company's single operating segment, accounting policies, investment securities, loan portfolio changes, and regulatory capital. - The company operates as a single reporting segment: community banking, with key accounting policies consistent with the 2024 Annual Report on Form 10-K[17](index=17&type=chunk)[21](index=21&type=chunk) - As of June 30, 2025, the company had significant unrealized losses on its investment securities portfolio, primarily due to fluctuations in interest rates, with gross unrealized losses on available-for-sale securities totaling **$306.9 million**[23](index=23&type=chunk)[28](index=28&type=chunk) - Loans held for sale increased substantially to **$335.2 million** from **$0.9 million** at year-end 2024, mainly due to the pending sale of Arizona and Kansas branches[37](index=37&type=chunk) - Non-accrual loans increased by **39.3%** to **$192.7 million** as of June 30, 2025, from **$138.3 million** at year-end 2024, primarily driven by increases in commercial real estate and agricultural loans[196](index=196&type=chunk) - In June 2025, the company issued **$125.0 million** of 7.625% fixed-to-floating rate subordinated notes due 2035, and announced its intention to redeem its outstanding **$100.0 million** 5.25% subordinated notes on August 15, 2025[75](index=75&type=chunk)[119](index=119&type=chunk) - The company and its subsidiary bank exceeded all regulatory capital adequacy requirements to be deemed "well-capitalized" as of June 30, 2025[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a year-over-year increase in Q2 2025 net income to $71.7 million, driven by lower credit loss provisions and reduced interest expense on borrowings. [Executive Overview and Recent Developments](index=44&type=section&id=Executive%20Overview%20and%20Recent%20Developments) The company has undertaken several strategic initiatives in 2025, including exiting indirect lending, selling branches, and outsourcing its consumer credit card portfolio, while maintaining ample liquidity. - The company has undertaken several strategic initiatives in 2025: ceased originating indirect loans as of February 28, 2025; entered an agreement to sell 12 branches in Arizona and Kansas, including approximately **$705 million** in deposits and **$331 million** in loans, expected to close in Q4 2025; and completed the outsourcing of its consumer credit card portfolio in June 2025, selling **$74.2 million** in loans and recognizing a **$4.3 million** gain[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - The company maintains ample liquidity, with **64.6%** of total deposits being FDIC insured as of June 30, 2025, and available borrowing capacity of **$5.2 billion** with the FHLB and **$2.4 billion** with the FRB as of July 31, 2025[139](index=139&type=chunk)[140](index=140&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Q2 2025 net income increased due to a lower provision for credit losses and higher net interest income, with the net interest margin expanding to 3.30%. - Q2 2025 net income increased by **$11.7 million** year-over-year to **$71.7 million**, primarily due to a **$9.3 million** lower provision for credit losses and a **$5.5 million** increase in net interest income[150](index=150&type=chunk) Net Interest Margin Analysis | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Interest Margin (GAAP) | 3.30% | 2.97% | | Net FTE Interest Margin (Non-GAAP) | 3.32% | 3.00% | - The provision for credit losses was a net reduction of **$0.3 million** in Q2 2025, compared to a **$9.0 million** provision in Q2 2024, with net charge-offs decreasing to **$5.8 million** from **$13.5 million** in the prior-year quarter[167](index=167&type=chunk) - Noninterest expense decreased by **$1.8 million** year-over-year in Q2 2025, mainly due to lower FDIC insurance premiums (**$2.6 million** decrease) and OREO expense (**$2.0 million** decrease)[176](index=176&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) [Financial Condition](index=54&type=section&id=Financial%20Condition) Total assets decreased by $1.6 billion, driven by declines in loans and investment securities, while non-performing assets increased. - Total assets decreased by **$1.6 billion (5.4%)** to **$27.6 billion** at June 30, 2025, from year-end 2024, driven by decreases in loans and investment securities[186](index=186&type=chunk) - Loans held for investment decreased by **$1.5 billion (8.4%)** since year-end, impacted by the discontinuation of indirect lending, the sale of the credit card portfolio, and the transfer of loans to held-for-sale for the pending branch divestiture[192](index=192&type=chunk)[194](index=194&type=chunk) Non-Performing Assets (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Non-accrual loans | $192.7 | $138.3 | | Total non-performing assets | $197.5 | $145.6 | | NPA to Total Assets | 0.72% | 0.50% | - The allowance for credit losses (ACL) was **$209.6 million**, or **1.28%** of loans held for investment, up from **1.14%** at year-end 2024, reflecting changes in portfolio mix and economic outlook[208](index=208&type=chunk) [Capital Resources and Liquidity Management](index=59&type=section&id=Capital%20Resources%20and%20Liquidity%20Management) Stockholders' equity increased, and the company maintains a "well-capitalized" status with substantial available liquidity. - Stockholders' equity increased by **$117.8 million** to **$3.42 billion** since year-end 2024, benefiting from retained earnings and a decrease in unrealized losses on available-for-sale securities[218](index=218&type=chunk) - The company and its bank subsidiary remain "well-capitalized" under all regulatory guidelines as of June 30, 2025[220](index=220&type=chunk) Available Liquidity (in billions) | Source | June 30, 2025 | | :--- | :--- | | Remaining FHLB Capacity | $4.9 | | Remaining FRB Capacity | $2.5 | | Cash and Deposits in Banks | $1.1 | | **Total Available Liquidity** | **$8.5** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risk, primarily interest rate risk, through its Asset Liability Committee (ALCO), using NII sensitivity analysis and derivatives to model and hedge against interest rate changes. Net Interest Income Sensitivity Analysis (1-Year Horizon) | Change in Interest Rate (bps) | Projected % Change in NII (June 30, 2025) | | :--- | :--- | | +200 | (0.70)% | | +100 | (0.25)% | | -100 | — | | -200 | (0.15)% | - The company utilizes two active interest rate collars with a total notional amount of **$300.0 million**, maturing in August 2025, to manage interest rate risk on variable-rate loans[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter. - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[244](index=244&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, such controls[245](index=245&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters in the normal course of business but does not expect the ultimate disposition of these matters to have a material adverse effect on its financial condition or operating results. - Management does not expect any ongoing or anticipated legal matters to have a material adverse effect on the company's business, financial condition, or operating results[248](index=248&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024. - No material changes in risk factors were reported for the period covered by this quarterly report[249](index=249&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased a small number of shares during the quarter, related to redemptions of vested restricted shares tendered by employees to cover income tax withholding amounts. Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | — | $— | | May 2025 | 258 | $26.79 | | June 2025 | — | $— | | **Total** | **258** | **$26.79** | [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, none of the company's directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements. - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the quarter ended June 30, 2025[253](index=253&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, debt indentures, employment agreements, and required SEC certifications

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, which sparked a long-lasting interest in markets and the economy [1] - Recently, the author has been combining long stock positions with covered calls and cash secured puts, indicating a strategic approach to investment [1] - The investment philosophy is fundamentally long-term, with a primary focus on REITs and financials, while occasionally covering ETFs and other stocks influenced by macroeconomic trade ideas [1]

Financial Data and Key Metrics Changes - The company reported net income of $71.7 million or $0.69 per diluted share for the second quarter, compared to $50.2 million or $0.49 per diluted share in the first quarter [10] - Net interest income increased to $207.2 million, up by $2.2 million from the prior period, primarily due to a reduction in interest expense [10][11] - The net interest margin was 3.32% on a fully tax equivalent basis, with an increase of 12 basis points from the prior quarter [11] - Non-interest income decreased to $41.1 million, down by $0.9 million from the prior quarter [11] Business Line Data and Key Metrics Changes - The company experienced a decline in loans held for investment by $1 billion, influenced by strategic moves including the Arizona and Kansas transaction [16] - Non-interest expense declined by $5.5 million to $155.1 million, attributed to lower seasonal payroll taxes and reductions in incentive-based compensation [12] - Net charge-offs totaled $5.8 million, representing 14 basis points of average loans on an annualized basis [14] Market Data and Key Metrics Changes - Deposits declined by $102.2 million in the second quarter, remaining approximately flat compared to the prior year [17] - The company ended the quarter with a 72% loan to deposit ratio, indicating strong liquidity [8] Company Strategy and Development Direction - The company is refocusing capital investment, optimizing the balance sheet, and improving core profitability [6][24] - Strategic actions include outsourcing the consumer credit card product and ceasing new originations in indirect lending [6][7] - The company aims for organic growth through relationship banking and anticipates a high single-digit increase in net interest income in 2026 [8][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilizing loan balances and returning to growth in the medium term despite near-term declines [16][19] - The company is focused on proactive credit risk management, with stability in nonperforming asset levels and a disciplined approach to repricing maturing assets [7][8] Other Important Information - The common equity tier one capital ratio improved to 13.43%, with expectations for continued accretion [17][19] - The company declared a dividend of $0.47 per share, yielding 7% [17] Q&A Session Summary Question: Timing on loan portfolio stabilization - Management anticipates modestly lower loans in the third quarter but is hopeful for stability in the fourth quarter [28][29] Question: Earning asset levels at year-end - The third quarter is expected to be the bottom for earning asset levels, with a shift towards investment securities [32][33] Question: Capital priorities and CET1 expectations - CET1 is expected to increase by approximately 40 basis points from the branch transaction, with strong capital levels providing flexibility for various options [34][35] Question: Special mention migration in classified loans - The increase in criticized loans was driven by new information on multifamily projects, but management remains confident in the underlying collateral [41][42] Question: Expense guidance and reinvestment of savings - Management anticipates higher reported expenses in the third and fourth quarters due to various timing factors, with no branch divestitures included in the guidance [43][44] Question: High single-digit growth in net interest income for 2026 - This growth expectation does not include the impact of the branch divestiture, which is not expected to materially alter the figure [47][48] Question: Loan portfolio and relationship-based loans - Most deliberate runoff has already occurred, with a focus on replacing loans with production and growth [69] Question: Capital deployment options - The company is considering various capital deployment options, including share buybacks and balance sheet restructuring, to enhance shareholder value [76][77]

Financial Data and Key Metrics Changes - The company reported net income of $71.7 million or $0.69 per diluted share for Q2 2025, an increase from $50.2 million or $0.49 per diluted share in Q1 2025 [10] - Net interest income was $207.2 million in Q2 2025, up by $2.2 million from the previous quarter, primarily due to a reduction in interest expense [10] - The net interest margin improved to 3.32% on a fully tax-equivalent basis, with a 12 basis points increase from the prior quarter [11] - Non-interest income decreased to $41.1 million, down by $0.9 million from the prior quarter [11] - Non-interest expense declined by $5.5 million to $155.1 million, attributed to lower seasonal payroll taxes and reductions in incentive-based compensation [12] Business Line Data and Key Metrics Changes - Loans held for investment decreased by $1 billion, influenced by strategic moves including $338 million related to the Arizona and Kansas transaction [15] - The company experienced a decline in classified loans by $24.4 million or 5.1%, while criticized loans increased by $176.9 million or 17.2% [14] - The yield on average loans increased by 6 basis points to 5.65%, driven by repricing and payoffs of lower-yielding loans [11] Market Data and Key Metrics Changes - The company’s deposit base remains strong, with 93% located in areas where it has top 10 market share, and about 70% in markets growing faster than the national average [9] - Deposits declined by $102.2 million in Q2 2025, remaining approximately flat compared to the prior year [17] Company Strategy and Development Direction - The company is focused on refocusing capital investment, optimizing the balance sheet, and improving core profitability [5][24] - Recent strategic actions include outsourcing the consumer credit card product and ceasing new originations in indirect lending [5] - The company anticipates a high single-digit increase in net interest income in 2026, supported by margin improvement and a disciplined approach to repricing maturing assets [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilizing loan balances and returning to growth in the medium term despite near-term declines [16] - The company is taking a proactive approach to credit risk management, with stability in nonperforming asset levels and modestly lower classified asset levels [6] - Management noted that they are seeing initial indications of increasing pipeline activity, suggesting a positive outlook for future loan growth [16] Other Important Information - The common equity tier one capital ratio improved by 90 basis points to 13.43% [17] - The company declared a dividend of $0.47 per share, yielding 7% [17] - The guidance reflects a 125 basis point rate cut for the remainder of 2025, with expectations for continued margin improvement [18] Q&A Session Summary Question: Timing on loan portfolio stabilization - Management anticipates modestly lower loans in Q3 but is hopeful for stability in Q4, with growth expected thereafter [30][32] Question: Earning asset levels at year-end - Management believes Q3 will be the bottom for earning asset levels, with a modest step down into Q4 expected [34] Question: Capital priorities and CET1 expectations - CET1 is expected to increase by approximately 40 basis points by year-end, with various capital deployment options being considered [36][37] Question: Increase in special mention loans - The increase in criticized loans was primarily driven by new information on multifamily projects, but management remains confident in the underlying collateral [44][45] Question: Expense guidance and branch divestiture impact - No branch divestitures are included in the current expense guidance, and management anticipates higher reported expenses in Q3 and Q4 due to various timing factors [46][48] Question: NII outlook and branch divestiture impact - The high single-digit growth in NII for 2026 does not include the impact of the branch divestiture, which is not expected to materially alter the figure [50][51] Question: Loan portfolio runoff and relationship-based loans - Management does not foresee significant deliberate runoff left in the loan book, with most larger loans already exited [73] Question: Market share and growth opportunities - The company aims to leverage existing density in growth markets rather than retreating from them, focusing on gaining market share [75]

Financial Performance - Net income was $71.7 million, or $0.69 per share in Q2 2025[18] - Net interest margin (NIM) was 3.30%, an increase of 11 basis points from Q1 2025[18] - Adjusted FTE NIM was 3.26%, an increase of 12 basis points from Q1 2025[18] - Efficiency ratio was 61.1% for Q2 2025[18] Balance Sheet - Loans held for investment decreased by $1,023.9 million from Q1 2025[18] - Deposits decreased by $102.2 million from Q1 2025[18] - Other borrowed funds declined $710.0 million due to decreases in investment securities and loan balances[18] - Total assets amounted to $27.6 billion[8] - Deposits totaled $22.6 billion[8] - Loans held for investment were $16.4 billion[8] Capital and Asset Quality - CET1 was 13.43% and total RBC was 16.49% for Q2 2025[18] - Non-performing loans decreased 0.4% from Q1 2025 to $194.1 million, representing 1.19% of LHFI[18] - Net charge-offs were $5.8 million, or an annualized 14 basis points of average loans outstanding[18] - Classified loans decreased $24.4 million to $458.1 million as of June 30, 2025[18]

Company Performance - First Interstate BancSystem (FIBK) reported quarterly earnings of $0.69 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, and up from $0.58 per share a year ago [1] - The earnings surprise for the quarter was +21.05%, while the previous quarter saw a surprise of -12.5% with actual earnings of $0.49 per share against an expectation of $0.56 [2] - The company posted revenues of $249.7 million for the quarter ended June 2025, which was 1.79% below the Zacks Consensus Estimate, but an increase from $244.3 million year-over-year [3] Market Performance - First Interstate BancSystem shares have declined approximately 8.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [4] - The current Zacks Rank for the stock is 4 (Sell), indicating expectations of underperformance in the near future [7] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.61 on revenues of $259.35 million, and for the current fiscal year, it is $2.35 on revenues of $1.03 billion [8] - The outlook for the industry, specifically the Banks - Midwest sector, is currently in the top 16% of over 250 Zacks industries, suggesting a favorable environment for performance [9]

Exhibit 99.1 For Immediate Release First Interstate BancSystem, Inc. Reports Second Quarter Earnings Billings, MT - July 29, 2025 - First Interstate BancSystem, Inc. (NASDAQ: FIBK) (the "Company") today reported financial results for the second quarter of 2025. For the quarter, the Company reported net income of $71.7 million, or $0.69 per diluted share, which compares to net income of $50.2 million, or $0.49 per diluted share, for the first quarter of 2025 and net income of $60.0 million, or $0.58 per dilu ...

Company Overview - First Interstate BancSystem (FIBK) is expected to report a year-over-year decline in earnings, with a projected EPS of $0.57, reflecting a -1.7% change, while revenues are anticipated to increase by 4.1% to $254.25 million [3][11]. Earnings Expectations - The stock price may increase if the actual earnings exceed expectations in the upcoming report, scheduled for July 29, while a miss could lead to a decline in stock price [2][11]. - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a stable outlook from analysts [4]. Earnings Surprise Prediction - The Most Accurate Estimate for First Interstate BancSystem is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -4.07%, suggesting a bearish sentiment among analysts [11]. - The company currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [11]. Historical Performance - In the last reported quarter, First Interstate BancSystem was expected to post earnings of $0.56 per share but only achieved $0.49, resulting in a surprise of -12.50% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [13]. Industry Comparison - In the Zacks Banks - Midwest industry, Associated Banc-Corp (ASB) is expected to report earnings of $0.62 per share, indicating a year-over-year increase of +19.2%, with revenues projected at $362.81 million, up 11.5% [17][18]. - Associated Banc-Corp has a positive Earnings ESP of +0.81% and a Zacks Rank of 2, suggesting a higher likelihood of beating the consensus EPS estimate [19].

Company Overview - First Interstate BancSystem Inc (NASDAQ: FIBK) operates in the western and north-central United States, providing a variety of financial services including checking and savings accounts, time deposits, and loans for commercial, construction, and residential purposes [1]. Analyst Background - The analyst has over five years of experience in the Australian Banking industry, focusing on bank stocks and equity markets, aiming for safe yet substantial returns of over 10% per annum [1]. Investment Philosophy - The investment strategy emphasizes a balanced approach to risk and reward, particularly within the often-overlooked banking sector, which is seen as having significant potential [1]. Community Engagement - The analyst aims to enhance investor awareness and understanding of the banking sector through analysis and writing on Seeking Alpha, fostering a community of knowledgeable investors [1].

Financial Position - As of March 31, 2025, the company had consolidated assets of $28.3 billion, deposits of $22.7 billion, loans held for investment of $17.2 billion, and total stockholders' equity of $3.4 billion[113]. - As of March 31, 2025, FDIC insured deposits were 65.7% of total deposits[122]. - The estimated amount of deposits in excess of the FDIC insurance limit was $7.8 billion, or 34.3% of total deposits as of March 31, 2025[184]. - Stockholders' equity increased by $57.3 million, or 1.7%, to $3,361.3 million as of March 31, 2025, from $3,304.0 million as of December 31, 2024[186]. - Total assets decreased by $857.6 million, or 2.9%, to $28,279.8 million as of March 31, 2025, primarily due to decreases in investment securities and loans[155]. - Total liabilities decreased by $914.9 million, or 3.5%, to $24,918.5 million as of March 31, 2025, primarily due to decreases in other borrowed funds[180]. Income and Expenses - Net income decreased by $8.2 million to $50.2 million, or $0.49 per diluted share, for the three months ended March 31, 2025, compared to $58.4 million, or $0.57 per diluted share, for the same period in 2024[134]. - Net interest income increased by $4.9 million to $205.0 million for the three months ended March 31, 2025, compared to $200.1 million for the same period in 2024[144]. - Total noninterest income for the three months ended March 31, 2025, was $42.0 million, a slight decrease of 0.2% from $42.1 million in 2024[148]. - Noninterest expense increased by $0.4 million to $160.6 million for the three months ended March 31, 2025, driven primarily by higher salaries and wages[149]. Loans and Credit Quality - Indirect loans represented approximately 3.9% of loan balances and 76.7% of the consumer loan portfolio as of March 31, 2025[119]. - Loans held for investment decreased by $467.6 million, or 2.6%, to $17,377.3 million as of March 31, 2025, compared to December 31, 2024[161]. - Non-accrual loans increased by $53.6 million, or 38.8%, to $191.9 million as of March 31, 2025, primarily due to increases in commercial real estate and agricultural loans[163]. - The Company recorded a provision for credit losses of $20.0 million for the three months ended March 31, 2025, compared to $5.3 million in the same period in 2024, reflecting a significant increase[146]. - Net charge-offs for the first quarter of 2025 were $9.0 million, representing an annualized 0.21% of average loans outstanding, up from $8.4 million or 0.18% in the same period in 2024[146]. - The total allowance for credit losses was $221.2 million as of March 31, 2025, compared to $210.2 million as of December 31, 2024[179]. - The allowance for credit losses increased to $215.3 million, or 1.24% of loans held for investment, compared to $204.1 million, or 1.14% as of December 31, 2024[176]. - The allowance for credit losses to non-performing loans ratio was 110.47% as of March 31, 2025, down from 144.44% in the same period in 2024[166]. Interest Rates and Margins - The company's quarterly yield on interest-earning assets decreased to 4.75% as of March 31, 2025, from 4.86% as of December 31, 2024[124]. - The company's cost of funds decreased to 1.59% during the three months ended March 31, 2025, from 1.72% during the three months ended December 31, 2024[125]. - The net interest margin increased to 3.19% during the three months ended March 31, 2025, from 3.18% during the three months ended December 31, 2024[125]. - The net interest margin ratio increased by 28 basis points to 3.19% for the three months ended March 31, 2025, compared to 2.91% for the same period in 2024[140]. - The cost of funds, including noninterest bearing demand deposits, was 1.59% for the three months ended March 31, 2025[144]. - The net interest income simulation model projects a decrease of 3.18% in net interest income with a +200 basis points change in interest rates[204]. Liquidity and Borrowing - The company had available borrowing capacity of $4.2 billion with the Federal Home Loan Bank and $2.6 billion with the Federal Reserve Bank as of April 30, 2025[122]. - Total available liquidity increased to $7.8 billion as of March 31, 2025, compared to $7.1 billion as of December 31, 2024[194]. - The Company continuously monitors its liquidity position and is not aware of any events likely to have a material adverse effect on its liquidity or capital resources[193]. - The Company had $960.0 million of FHLB borrowings due in less than one year and available borrowing capacity of $4,958.7 million with the FHLB as of March 31, 2025[190]. Market Conditions and Outlook - The company expects continued volatility in economic markets, which may include recessionary signs impacting deposits and credit quality[126].