First Interstate BancSystem (FIBK) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the syste ...

We Are Today, we put First Interstate BancSystem, Inc. (NASDAQ:FIBK) in the spotlight for the first tinst the first time. This traditional bank holding company has secu some recen Published on TradingView.com, Sep 16, 2024 08:52 UTC-4 First Interstate BancSystem, Inc., 1D, Cboe One 30.20 +1.06 (+3.64%) Vol 344.908 K 32.00 30.20 28.00 26.00 24.00 22.00 @0 idlink on 00 ao dibration 344.908 K one in Doctobild Oct 2024 13 Sep "1"/ TradingView Seeking Alpha Company Overview: This bank holding company has been ar ...

suravikin/iStock via Getty Images In my last article on First interstate BancSystem (NASDAQ:FIBK) I highlighted the stagnant growth of the loan portfolio, which is why the company used to reinvest investment portfolio proceeds into new securities. To date, the strategy has changed, but challenges related to demand for credit remain. In addition, expectations about rate cuts have changed, and management will have to position FIBK so that it can benefit from a lower-than-expected Fed Funds Rate. The dividend ...

Financial Data and Key Metrics Changes - The company generated $60 million in net income for the second quarter, equating to $0.58 per share, reflecting a 2.7% increase from the previous quarter [48][69] - Net interest margin expanded by 7 basis points to 3%, with expectations for continued increases in the second half of the year [49][60] - Non-interest income rose to $42.6 million, a 1.2% increase from the prior quarter [52][65] - Non-interest expenses decreased by $3.3 million to $156.9 million, aided by lower medical expenses and a one-time tax credit reclassification [66][68] Business Line Data and Key Metrics Changes - Loan balances increased by $32.2 million, with a notable increase of $130.7 million in commercial and industrial balances, while construction loans declined [33][70] - The total unfunded balance at the end of the quarter was over $400 million at a weighted average rate of approximately 6% [64] - The company anticipates that loans will remain relatively flat for the full year, with a focus on reducing borrowings through the runoff of the investment portfolio [60][70] Market Data and Key Metrics Changes - The company noted that deposits increased by $60.7 million in the second quarter, although this included a larger-than-usual customer deposit at period end [54][70] - The loan-deposit ratio stood at 79.7% at quarter-end, indicating stable liquidity [55] Company Strategy and Development Direction - The company is focused on expense control and has managed to reduce controllable expenses while investing in internal systems and personnel [50][67] - There is an ongoing emphasis on enhancing treasury solutions, which has shown early success in increasing service charge income [51] - The company plans to maintain an acquisitive strategy moving forward, despite the current transition in leadership [109] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to generate improved returns, citing ongoing margin inflection and stability in asset quality [77] - The company anticipates that economic conditions will stabilize and improve in 2025, which could lead to increased loan growth [28][77] - Management acknowledged that the current political climate may be causing some customers to remain on the sidelines, impacting loan growth [28] Other Important Information - The company announced the addition of two key talents to its risk management team, enhancing its capabilities in credit and fraud risk management [56] - The common equity Tier 1 capital ratio improved to 11.53%, reflecting a strong capital position [75] Q&A Session Summary Question: What is the expected starting point for non-interest bearing deposits in Q3? - Management suggested modeling to around 26% for non-interest bearing deposits, excluding the impact of the larger-than-usual deposit [87][88] Question: Can you provide details on the gross charge-offs for the quarter? - Management indicated that gross charge-offs were approximately $10 million, with about $3 million typically attributed to consumer loans [89] Question: What is the outlook for the larger C&I non-performing loan? - Management stated that they are closely monitoring the situation and are prepared for potential charge-offs, indicating a realistic approach to the credit's valuation [93][94] Question: Is there any interest in M&A given the leadership transition? - Management confirmed that while M&A is currently on hold, it remains part of the long-term strategy [108][109]

Core Insights - First Interstate BancSystem reported revenue of $244.3 million for the quarter ended June 2024, reflecting a year-over-year decline of 6.9% and an EPS of $0.58 compared to $0.66 a year ago [1] Financial Performance Metrics - Net FTE interest margin (non-GAAP) was 3%, matching the average estimate of two analysts [2] - Efficiency Ratio stood at 62.7%, better than the estimated 64.6% by two analysts [2] - Mortgage banking revenues were $1.70 million, below the estimated $2.19 million [2] - Total noninterest income was $42.60 million, slightly below the average estimate of $43.22 million [2] - Net interest income reached $201.70 million, slightly above the average estimate of $200.88 million [2] Earnings Surprises - The reported revenue was a surprise of -0.53% compared to the Zacks Consensus Estimate of $245.6 million [3] - The EPS surprise was +5.45%, with the consensus EPS estimate being $0.55 [3] Stock Performance - Shares of First Interstate BancSystem have returned +19.7% over the past month, contrasting with the Zacks S&P 500 composite's -0.3% change [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [4] Investor Insights - Investors focus on year-over-year changes in revenue and earnings, alongside comparisons to Wall Street expectations, to inform their investment decisions [5]

First Interstate BancSystem, which belongs to the Zacks Banks - Midwest industry, posted revenues of $244.3 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 0.53%. This compares to year-ago revenues of $262.5 million. The company has topped consensus revenue estimates just once over the last four quarters. While First Interstate BancSystem has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? It will be inte ...

Financial Performance - For Q2 2024, First Interstate BancSystem reported net income of $60.0 million, or $0.58 per share, compared to $58.4 million, or $0.57 per share in Q1 2024, and $67.0 million, or $0.65 per share in Q2 2023[36]. - Net interest income rose by $1.6 million, or 0.8%, to $201.7 million in Q2 2024, while it decreased by $16.7 million, or 7.6%, compared to Q2 2023[64]. - Net interest margin increased to 2.97% for Q2 2024, a 6 basis point increase from Q1 2024, and to 3.00% on a fully taxable equivalent basis, a 7 basis point increase from Q1 2024[1]. - Earnings per share (EPS) for Q2 2024 was $0.58, up 1.8% from Q1 2024, but down 10.8% from Q2 2023[84]. - Return on average assets increased to 0.80% in Q2 2024, up from 0.77% in Q1 2024[79]. - Return on average common stockholders' equity rose to 7.55% in Q2 2024, compared to 7.28% in the previous quarter[79]. Asset and Liability Management - Total assets as of June 30, 2024, were $30,289.5 million, a 0.5% increase from the previous quarter but a 2.2% decrease year-over-year[23]. - Total deposits increased slightly to $22,870.7 million, a 0.3% rise from the previous quarter but down 3.0% compared to the same period last year[24]. - Net loans held for investment were $18,002.2 million, showing a 0.2% increase from the previous quarter but a 0.2% decrease year-over-year[23]. - The ratio of loans held for investment to deposits was 79.7% as of June 30, 2024, compared to 79.8% as of March 31, 2024[10]. - Total loans held for investment increased to $18,235.0 million as of June 30, 2024, up 0.2% from $18,202.8 million in the previous quarter[78]. Credit Quality - Provision for credit losses was $9.0 million in Q2 2024, up from $5.3 million in Q1 2024 but down from $11.7 million in Q2 2023[4]. - The allowance for credit losses was $232.8 million, representing 1.28% of loans held for investment, up from 1.25% in the previous quarter and 1.23% a year ago[28]. - Non-performing assets decreased by $14.5 million, or 7.7%, to $174.9 million as of June 30, 2024, compared to $189.4 million as of March 31, 2024[12]. - Non-accrual loans decreased by 3.7% to $165.6 million in Q2 2024 compared to $172.0 million in Q1 2024, and increased by 92.3% compared to $86.1 million in Q2 2023[18]. - Criticized loans decreased by $12.0 million, or 1.9%, to $618.0 million as of June 30, 2024, driven by upgrades and paydowns in the agricultural and construction real estate portfolios[33]. Non-Interest Income and Expenses - Non-interest income was $42.6 million for Q2 2024, increasing by $0.5 million compared to Q1 2024[65]. - Total non-interest expense for Q2 2024 was $156.9 million, down 2.1% from Q1 2024 and down 4.3% from Q2 2023[84]. - Non-interest expense decreased by $3.3 million in Q2 2024 compared to Q1 2024 and by $7.0 million compared to Q2 2023, totaling $156.9 million[7]. - Salaries and wages expense increased by $1.1 million, or 1.7%, during Q2 2024 compared to Q1 2024, but decreased by $1.8 million, or 2.6%, compared to Q2 2023[32]. - Other expenses decreased by $1.6 million during Q2 2024 compared to Q1 2024, primarily due to a decrease in professional fees and FDIC insurance[45]. Capital and Dividends - The company declared a dividend of $0.47 per common share, equating to a 7.1% annualized yield based on the average closing price of $26.48 per share during Q2 2024[2]. - Total stockholders' equity increased to $3,225.3 million, a 0.5% rise from the previous quarter and a 3.3% increase year-over-year[23]. - The company is considered "well-capitalized" as of June 30, 2024, exceeding all regulatory capital adequacy requirements[70]. - The company's common stock book value per share at the end of the period was $30.85, a 0.5% increase from the previous quarter and a 3.8% increase year-over-year[23]. Operational Efficiency - The efficiency ratio improved to 62.71% in Q2 2024 from 64.62% in Q1 2024, indicating better operational efficiency[79]. - The yield on average earning assets improved to 4.80% in Q2 2024, up from 4.74% in Q1 2024[79]. - Interest-earning assets totaled $27,286.9 million, with an average interest rate of 4.80% for Q2 2024[86]. - The interest rate spread for Q2 2024 was 2.41%, compared to 2.64% in Q2 2023[86]. Future Outlook - The company anticipates continued focus on expense reduction initiatives and maintaining credit quality in the upcoming quarters[51]. - The company plans to host a conference call on July 26, 2024, to discuss the results for the second quarter of 2024[83].

Wall Street analysts expect First Interstate BancSystem (FIBK) to post quarterly earnings of $0.55 per share in its upcoming report, which indicates a year-over-year decline of 16.7%. Revenues are expected to be $245.6 million, down 6.4% from the year-ago quarter. Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period. Prior to a company's earnings release, it i ...

Core Viewpoint - First Interstate BancSystem, Inc. (FIBK) shows potential as a stock pick due to a recent "golden cross" event, indicating a bullish trend may be forthcoming [1][2]. Technical Analysis - A "golden cross" occurs when a stock's short-term moving average (50-day) crosses above its long-term moving average (200-day), suggesting a bullish breakout [2]. - The successful golden cross event consists of three stages: a price decline bottoming out, the shorter moving average crossing above the longer one, and maintaining upward momentum [3]. Performance Metrics - Over the past four weeks, FIBK has gained 5.2%, indicating positive momentum [4]. - The stock currently holds a 3 (Hold) rating on the Zacks Rank, suggesting it may be poised for further breakout [4]. Earnings Outlook - FIBK's earnings outlook is positive, with two upward revisions in estimates over the past 60 days, and the Zacks Consensus Estimate has also increased [4]. - Investors are encouraged to monitor FIBK for potential gains due to its key technical levels and favorable earnings estimate revisions [5].

Financial Performance - Net income increased by $2.1 million to $58.4 million, or $0.57 per share, for the three months ended March 31, 2024, compared to $56.3 million, or $0.54 per share, for the same period in 2023[151]. - Net interest income decreased by $38.8 million to $200.1 million for the three months ended March 31, 2024, compared to $238.9 million for the same period in 2023[156]. - Total non-interest income increased by $25.7 million to $42.1 million for the three months ended March 31, 2024, compared to $16.4 million in the same period in 2023[164]. - Non-interest expense decreased by $5.6 million during the three months ended March 31, 2024, compared to the same period in 2023[165]. - Total non-interest expense decreased by $5.6 million, or 3.4%, to $160.2 million for the three months ended March 31, 2024, compared to $165.8 million in the same period of 2023[166]. Interest Rates and Margins - The quarterly yield on interest-earning assets rose to 4.74% as of March 31, 2024, up from 4.69% as of December 31, 2023, and 4.43% as of March 31, 2023[143]. - The cost of funds increased to 1.87% during the three months ended March 31, 2024, from 1.72% during the three months ended December 31, 2023, and 1.10% during the three months ended March 31, 2023[144]. - Net interest margin decreased to 2.91% during the three months ended March 31, 2024, down from 2.99% during the three months ended December 31, 2023, and 3.33% during the three months ended March 31, 2023[144]. - The net interest margin ratio decreased by 42 basis points to 2.91% for the three months ended March 31, 2024, down from 3.33% in the same period in 2023[157]. Loans and Credit Quality - The provision for credit losses was $5.3 million for the three months ended March 31, 2024, compared to $15.2 million for the same period in 2023[162]. - The company reported a net loan charge-off of $8.4 million, or an annualized 0.18% of average loans outstanding, for the three months ended March 31, 2024[162]. - Non-accrual loans increased by $65.6 million, or 61.7%, to $172.0 million as of March 31, 2024, primarily due to a downgrade related to a single $54.4 million commercial loan[178]. - Total non-performing assets increased to $189.4 million as of March 31, 2024, compared to $98.7 million as of March 31, 2023[181]. - The allowance for credit losses was $227.7 million, or 1.25% of loans held for investment, as of March 31, 2024, unchanged from December 31, 2023[189]. Deposits and Borrowings - The deposit base is diversified, with 66.0% of total deposits being FDIC insured as of March 31, 2024[138]. - Total deposits decreased by $513.1 million, or 2.2%, to $22,810.0 million as of March 31, 2024, with declines in all categories except for savings deposits and time deposits[194]. - The estimated amount of deposits in excess of the FDIC insurance limit at March 31, 2024, was $7.9 billion, or 34.6% of total deposits[196]. - The Company accessed borrowings through the Bank Term Funding Program totaling $1.0 billion in January 2024, which was used to pay down FHLB advances[139]. - Long-term debt increased by $250.0 million, or 207.0%, to $370.8 million as of March 31, 2024, due to 18-month FHLB borrowings[198]. Capital and Equity - Stockholders' equity decreased by $17.8 million, or 0.6%, to $3,209.7 million as of March 31, 2024, influenced by unrealized losses on available-for-sale securities and stock repurchases[199]. - As of March 31, 2024, the Company had capital levels exceeding the "well-capitalized" guidelines established by the Federal Reserve and FDIC[201]. Operational Efficiency - The Company operates 304 banking offices across fourteen states, focusing on community banking and strategic acquisitions[134]. - The company experienced a decrease in mortgage banking revenues by 26.1% to $1.7 million for the three months ended March 31, 2024, compared to $2.3 million in the same period in 2023[164]. - Employee benefits expense decreased by $3.5 million, primarily due to lower health insurance costs of $2.1 million and lower payroll taxes of $1.8 million[166]. Risk Management and Controls - Management assessed that internal control over financial reporting was not effective as of March 31, 2024, due to un-remediated material weaknesses[223]. - The Company expects to complete remediation of the identified control deficiencies during 2024[225]. - The company’s disclosure controls and procedures were evaluated as effective as of March 31, 2024, ensuring timely reporting of required information[222]. - The interest rate risk management strategy includes monitoring net interest income sensitivity through an income simulation model[214]. - The company is enhancing its internal controls, including implementing a quality assurance process for user access reviews[224].