Financial Data and Key Metrics Changes - The company generated net income of $46.9 million or $0.76 per share in Q4 2020, with pretax pre-provision income of $64.9 million [7] - Net interest income increased by $5.4 million from the prior quarter, driven by PPP loan fee acceleration, contributing $16.7 million in Q4, up from $10.6 million [16] - The net interest margin decreased by 4 basis points to 3.25%, with a decline of 17 basis points attributed to deposit growth deployed at lower yields [17] Business Line Data and Key Metrics Changes - Loans held for investment decreased by $345 million primarily due to the forgiveness of approximately $425 million of PPP loans [23] - Noninterest income decreased by $10.8 million quarter-over-quarter to $33.9 million, mainly due to lower mortgage banking revenues [19] - The company expects refinancing volumes in the mortgage business to decline by about 50% in 2021, with total production projected to decline by about 30% [21] Market Data and Key Metrics Changes - Total deposits increased at an annualized rate of 9.5% in Q4 2020, with growth primarily in lower-cost deposit categories [9] - The company reported a decline in nonperforming loans by $6.4 million and nonperforming assets by $9.6 million, indicating improved asset quality [26] - The delinquency rate in the indirect portfolio declined from 2019 levels and remained below industry averages [25] Company Strategy and Development Direction - The company is committed to a balanced approach to capital deployment, focusing on organic growth, acquisitions, stock repurchases, and dividends [13] - Plans to launch a digital small business lending portal in May 2021 to enhance customer acquisition [32] - The company aims to leverage its technology platform to refine digital capabilities and improve revenue generation [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the economic recovery and the potential for loan growth in the mid-single-digit range, excluding PPP impacts [33] - The company anticipates a solid year of earnings growth if the vaccine rollout and stimulus measures positively impact the economy [34] - Management noted that they are not facing significant legacy issues, allowing them to focus on driving profitable growth [28] Other Important Information - The company repurchased over 1 million shares of common stock during Q4 2020 and declared an increase in the quarterly dividend to $0.41 per share, an 8% increase from the previous quarter [13] - The allowance for credit losses as a percentage of loans held for investment increased to 1.47% [27] Q&A Session Summary Question: What is the mix of the mortgages being retained? - The company retains a mix of 10, 15, and 30-year fixed loans, with the yield on 30-year loans at about 3.26% [39] Question: What will drive the return to CECL day 1 levels for the allowance? - Management indicated that the vaccine rollout and economic recovery will be key factors in determining reserve levels [41] Question: What factors could lead to upside in commercial lending growth? - Management noted that economic growth and migration into their markets could drive increased demand for commercial lending [42] Question: What is the appetite for the next round of PPP loans? - Management expects additional deposit growth from the second round of PPP loans, with current applications around 15% [44] Question: Are there any opportunities for M&A? - Management is open to considering acquisitions of banks with higher loan-to-deposit ratios to enhance liquidity [60]

| --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------| | | | | UNITED STATES SECURITIES AND EXCHANGE Washington, D.C. 20549 ___________________________________________________________________________________________________________________________________________________ | COMMISSION | | FORM 10-Q ____________________ ...

First Interstate BancSystem, Inc. (NASDAQ:FIBK) Q3 2020 Earnings Conference Call October 27, 2020 11:00 AM ET Company Participants Lisa Slyter-Bray - Executive Assistant Kevin Riley - Chief Executive Officer Marcy Mutch - Chief Financial Officer Conference Call Participants Jeff Rulis - D.A. Davidson Matthew Clark - Piper Sandler Jared Shaw - Wells Fargo Jackie Bohlen - KBW Operator Good day, and welcome to the First Interstate BancSystem Third Quarter 2020 Earnings Conference Call. All participants will be ...

Investor Presentation October 2020 First Interstate BancSystem Safe Harbor This presentation 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, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events con ...

[Part I - Financial Information](index=2&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents unaudited Q2 2020 consolidated financial statements, reflecting the adoption of the CECL accounting standard Financial Highlights (Q2 2020 vs Q2 2019) | Metric | Q2 2020 (In millions) | Q2 2019 (In millions) | Change | | :--- | :--- | :--- | :--- | | Total Assets | $16,471.4 | $14,219.6 (Avg) | +15.8% | | Total Deposits | $13,340.4 | $11,663.5 (as of 12/31/19) | +14.4% | | Net Loans Held for Investment | $9,886.4 | $8,857.7 (as of 12/31/19) | +11.6% | | Net Interest Income | $122.5 | $125.3 | -2.2% | | Net Income | $36.7 | $37.9 | -3.2% | | Diluted EPS | $0.57 | $0.59 | -3.4% | - The Company adopted the **Current Expected Credit Loss (CECL)** methodology on January 1, 2020, resulting in a **$24.1 million** cumulative-effect adjustment to retained earnings[32](index=32&type=chunk)[233](index=233&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section details accounting policies and financial data, including CECL adoption and portfolio compositions [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, focusing on the impacts of the COVID-19 pandemic and CECL adoption - The company actively participated in the SBA's Paycheck Protection Program (PPP), approving over **11,400 applications** for approximately **$1.2 billion** as of July 17, 2020[258](index=258&type=chunk) - Under the CARES Act, the company granted loan modifications on approximately **1,300 loans totaling $409.1 million** to assist customers affected by COVID-19[259](index=259&type=chunk) Key Performance Metrics Comparison | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net Interest Income | $122.5 million | $125.3 million | | Provision for Credit Losses | $19.5 million | $3.8 million | | Net Income | $36.7 million | $37.9 million | | Net FTE Interest Margin | 3.52% | 4.08% | [Results of Operations](index=62&type=section&id=Results%20of%20Operations) Q2 2020 net income decreased slightly due to higher credit loss provisions, despite strong mortgage banking revenue - Net interest income **decreased by 2.2%** in Q2 2020, partially offset by **$8.6 million in interest income from PPP loans**[296](index=296&type=chunk) - The provision for credit losses **increased to $19.5 million** in Q2 2020, up from $3.8 million in Q2 2019, due to CECL adoption and the COVID-19 economic forecast[307](index=307&type=chunk) - Non-interest income **increased 5.6%** in Q2 2020, driven by a **57.8% surge in mortgage banking revenues** from high refinancing activity[309](index=309&type=chunk)[313](index=313&type=chunk) - Total non-interest expense **decreased 13.3%** in Q2 2020, mainly due to non-recurring acquisition-related expenses from the prior year[316](index=316&type=chunk) [Financial Condition](index=64&type=section&id=Financial%20Condition) Total assets and deposits grew significantly, driven by PPP loans, while asset quality remained strong - Total assets **increased by $1.8 billion (12.5%)** since December 31, 2019, primarily due to PPP loan originations and a surge in deposits[324](index=324&type=chunk) - The allowance for credit losses to loans **increased to 1.46%** from 0.82% at year-end 2019, or **1.66% excluding government-guaranteed PPP loans**[347](index=347&type=chunk)[349](index=349&type=chunk) - Total deposits **increased by $1.7 billion (14.4%)** since year-end 2019, with non-interest-bearing deposits growing by 29.2%[356](index=356&type=chunk)[357](index=357&type=chunk) - Non-performing assets to total assets **remained low at 0.39%**, consistent with the level at December 31, 2019[331](index=331&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes in market risk disclosures occurred since the 2019 Annual Report on Form 10-K - There have been **no material changes** in market risk disclosures since the 2019 Annual Report on Form 10-K[373](index=373&type=chunk) [Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2020[375](index=375&type=chunk) - **No material changes** to internal control over financial reporting occurred during the second quarter of 2020[376](index=376&type=chunk) [Part II - Other Information](index=65&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material changes in legal proceedings since the 2019 annual report - There have been **no material changes in legal proceedings** since the 2019 Annual Report[380](index=380&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new and heightened risks posed by the uncertain impact of the COVID-19 pandemic - The primary updated risk factor is the uncertain and unpredictable impact of the **COVID-19 pandemic**, which could be materially adverse[381](index=381&type=chunk) - Specific pandemic risks include a potential global recession, **increased credit losses**, and **business disruptions** due to workforce unavailability[385](index=385&type=chunk)[388](index=388&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details stock repurchases during Q2 2020, with no shares bought under the public program Share Repurchases (Q2 2020) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2020 | 221 | $27.71 | | May 2020 | 116 | $29.84 | | June 2020 | 145 | $31.24 | | **Total** | **482** | **$29.28** | - **No shares were purchased** as part of the publicly announced repurchase plan during the quarter; **1,445,300 shares** may yet be purchased under the plan[390](index=390&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including indentures and required CEO/CFO certifications - Exhibits filed include indentures for the **5.25% Fixed-to-Floating Rate Subordinated Notes** due 2030 and required **CEO and CFO certifications**[393](index=393&type=chunk)[395](index=395&type=chunk)[396](index=396&type=chunk)

First Interstate BancSystem, Inc. (NASDAQ:FIBK) Q2 2020 Earnings Conference Call July 28, 2020 11:00 AM ET Company Participants Lisa Slyter-Bray - Executive Assistant Kevin Riley - President, CEO & Director Marcy Mutch - EVP & CFO Conference Call Participants Jared Shaw - Wells Fargo Securities Gordon McGuire - Stephens Inc. Matthew Clark - Piper Sandler & Co. Jackie Bohlen - KBW Levi Posen - D.A. Davidson & Co. Garrett Holland - Robert W. Baird & Co. Operator Good day, and welcome to the First Interstate B ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2020 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to | --- | --- | |------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------| | Washing ...

Financial Data and Key Metrics Changes - The company reported a decrease in net interest income of $5.1 million from the previous quarter, primarily due to a $1.4 million decrease in accretion income and a lower level of earning assets [26] - The net interest margin decreased by 4 basis points to 3.9%, while the operating net interest margin remained unchanged at 3.77% [27] - Non-interest income increased by $6.5 million quarter-over-quarter to $43.7 million, driven mainly by higher mortgage banking revenue [29] Business Line Data and Key Metrics Changes - Mortgage banking revenue increased by $5.5 million from the prior quarter due to higher demand for refinancing, with a balanced mix of new purchases and refinancing [30] - Wealth management revenue also saw an increase over the prior quarter despite market volatility affecting assets under management [8] Market Data and Key Metrics Changes - The company has $369 million in outstanding loans to the hotel industry, representing 4.1% of total loans, with less than 1% of this portfolio impaired as of March 31 [20] - Agricultural loans totaled $483 million, representing 5.4% of total loans, with only 2.3% impaired [21] - The company has reduced its exposure to the oil and gas industry, which now represents just 1.5% of the portfolio, with only $4 million of those loans impaired [23] Company Strategy and Development Direction - The company aims to maintain a fortress balance sheet with strong asset quality based on conservative underwriting criteria, high reserves, excess capital, and ample liquidity [44] - The management is focused on enhancing technology infrastructure to support remote work and digital banking, with 72% of retail clients now utilizing the digital platform [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather the current economic storm, citing a strong credit culture and diversified loan portfolio [42] - The company anticipates that the impact of the COVID-19 pandemic on its portfolio will be better understood in the coming months, with a focus on maintaining strong asset quality [41] Other Important Information - The company has granted loan deferrals on approximately $1 billion of commercial and CRE loans and $45 million of consumer loans [16] - The management has suspended stock repurchase activity and will reevaluate this decision as conditions warrant in the coming quarters [48] Q&A Session Summary Question: Can you provide insight into the qualitative factors that influenced the provision increase? - Management confirmed that most of the increase in the provision was due to qualitative factors that became more severe than the Moody's baseline [50][51] Question: How sensitive are your customers to potential slowdowns in tourism? - Management indicated that warning signs may appear going into the third quarter, with tourism being a significant industry in Montana [52][53] Question: What is the current status of M&A activity? - Management stated that M&A discussions have stalled due to the current crisis, but could resume if conditions stabilize [57] Question: How do you expect the expense run rate to progress through the year? - Management expects to bring down the expense run rate as they tighten control over discretionary spending [94]

Financial Overview - Total assets reached $14.41 billion[5] - Trust assets under management totaled $4.74 billion[5] - Core deposits amounted to $11.01 billion[5] - Net loans represent 61.6% of the asset mix[5] - Net interest income accounts for 73.8% of the Q1 2020 revenue[8] - Non-interest income contributes 26.2% to the Q1 2020 revenue[8] Pandemic Response - Processed $1.159 billion in Paycheck Protection Program (PPP) applications[13] - Approved $997 million in PPP loans by the SBA through April 27, 2020[13] - Impacted 107,000 client employees through PPP loans[13] - Approved $1.047 billion in commercial deferrals, representing 16% of the portfolio balance[15] - Approved $45 million in consumer forbearances, representing 2% of the portfolio balance[15] Loan Portfolio - Total loan portfolio amounts to $9.0 billion[42] - Hospitality loans represent 6.7% of the total loan portfolio, with $607.196 million outstanding and $92.031 million in unfunded commitments[55] - Agriculture loans account for 5.4% of the total loan portfolio, with $482.973 million outstanding and $165.629 million in unfunded commitments[69] - Malls represent $52.3 million direct exposure (0.6% of total loan portfolio)[72] - Oil and Gas direct exposure is $45.0 million (0.5% of total loan portfolio) with $16.2 million in unfunded commitments[75] Asset Quality - Allowance for credit loss as a % of total loans is 1.43%[82]

Financial Position - As of December 31, 2019, the company had consolidated assets of $14.6 billion, deposits of $11.7 billion, total loans of $9.0 billion, and total stockholders' equity of $2.0 billion[7]. - The company reported goodwill of $621.6 million, representing 30.9% of total stockholders' equity as of December 31, 2019[133]. - Common Equity Tier 1 Capital Ratio stands at 12.62%, significantly above the well-capitalized minimum of 6.50%[152]. - Total Capital Ratio is reported at 14.10%, exceeding the well-capitalized minimum of 10.00%[152]. - Tier 1 Leverage Ratio is 10.13%, well above the required minimum of 5.00%[152]. Market Presence and Operations - The company operates 152 banking offices across Idaho, Montana, Oregon, South Dakota, Washington, and Wyoming, with a market deposit share of 17.72% in Montana and 5.13% in Idaho[26]. - The company completed the acquisition of Idaho Independent Bank for $157.3 million and Community 1st Bank for $18.8 million in April 2019, enhancing its market presence[12][13]. - The company aims for organic growth in existing markets while exploring expansion into new and complementary markets when opportunities arise[10]. Regulatory Environment - The company is subject to extensive regulation under federal and state laws, impacting its operational activities and compliance costs[30][37]. - The bank holding company is required to maintain a "well-capitalized" status to engage in authorized financial activities[38]. - Federal regulations require a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, and a total capital to risk-based assets of 8.0%[49]. - The Dodd-Frank Act imposes additional supervisory measures on banking organizations when they exceed $10 billion in assets[63]. - The bank is subject to various regulatory restrictions relating to capital distributions, including dividends and regulatory capital minimums[44]. Risk Management - The company has a robust lending policy with minimum underwriting standards to limit risk, ensuring loans are appropriately collateralized and supported by current credit information[16]. - The bank's capital adequacy is assessed through both quantitative measures and qualitative judgments by regulators[54]. - The company faces risks related to the potential cessation of LIBOR, which is extensively used as a reference rate for various financial contracts[124]. - The company may experience increased funding costs if it loses deposits or if clients shift to higher-cost products[122]. - A significant portion of the loan portfolio is secured by real property, which may lead to adverse financial impacts due to foreclosure costs[165]. Economic and Market Conditions - Economic conditions in Idaho, Montana, Oregon, South Dakota, Washington, and Wyoming significantly impact the Bank's profitability due to its geographical concentration[94]. - A decline in economic conditions could lead to increased loan delinquencies, problem assets, and foreclosures, adversely affecting the Bank's financial condition[95]. - Changes in U.S. trade policies and tariffs could materially harm the company's business and financial condition[108]. - The company may be adversely affected by declining oil and gas prices, which could impact the economies of its market areas[128]. Employee and Corporate Governance - The company employed 2,473 full-time equivalent employees as of December 31, 2019, indicating a strong workforce to support its operations[29]. - The company focuses on building a diverse workforce and maintaining good employee relations, as evidenced by its participation in annual engagement surveys[29]. - The Scott family controls a majority of the voting power of the company's common stock, which may limit other stockholders' influence on corporate matters[194]. - The company qualifies as a "controlled company" under NASDAQ rules, exempting it from certain corporate governance requirements[201]. Cybersecurity and Operational Risks - Cybersecurity threats remain high, with the Bank employing various measures to protect sensitive data and operations from potential attacks[89]. - The company faces significant cyber-security risks, including denial-of-service attacks and identity theft, which could adversely affect its business and reputation[153]. - Operational risks, including fraud and system failures, could adversely affect the company's ability to conduct business effectively[176]. - Legal risks remain high, with potential adverse financial effects from litigation impacting the company's reputation and business prospects[177]. Financial Products and Services - The company offers a wide range of financial products, including traditional depository products, wealth management services, and commercial banking services[21][22]. - The Bank's loan portfolio is concentrated in commercial real estate and commercial business loans, with $4.9 billion in commercial loans as of December 31, 2019, representing approximately 54.4% of the total loan portfolio[99]. - As of December 31, 2019, the company had $2.7 billion in agricultural, construction, residential, and other real estate loans, accounting for approximately 29.9% of its total loan portfolio[101]. - 51.4% of the company's loans were advanced on a variable or adjustable-rate basis, indicating potential increased loan defaults with rising interest rates[105]. Future Outlook and Challenges - The company anticipates competition for acquisition opportunities may increase, potentially raising prices and reducing returns[163]. - Changes in accounting standards, particularly the introduction of the CECL model, may require the company to increase its allowance for loan losses, impacting capital ratios and operational results[135]. - Future equity issuances could result in dilution of existing shares, negatively impacting the market price of Class A common stock[203].