First Interstate BancSystem(FIBK) - 2024 Q3 - Quarterly Report

Financial Performance - Net income decreased by $17.2 million to$55.5 million, or $0.54 per share, for the three months ended September 30, 2024, compared to$72.7 million, or $0.70 per share, for the same period in 2023[187]. - For the nine months ended September 30, 2024, net income decreased by$22.1 million to $173.9 million, or$1.69 per share, compared to $196.0 million, or$1.89 per share, for the same period in 2023[188]. - Net interest income decreased by $8.2 million for the three months ended September 30, 2024, compared to the same period in 2023, primarily due to increased interest expenses from higher costs of interest-bearing deposits[193]. - Net interest income decreased by$63.7 million for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to increased interest expense from higher costs of interest-bearing deposits[197]. - Total non-interest income increased by $4.4 million for the three months ended September 30, 2024, compared to the same period in 2023, and increased by$28.6 million for the nine months ended September 30, 2024[208]. Interest Rates and Margins - The quarterly yield on interest-earning assets increased to 4.83% as of September 30, 2024, from 4.80% as of June 30, 2024, and 4.63% as of September 30, 2023[178]. - The Company's net interest margin increased to 3.01% for the three months ended September 30, 2024, from 2.97% for the three months ended June 30, 2024[179]. - The net interest margin ratio decreased by 4 basis points to 3.01% for the three months ended September 30, 2024, compared to 3.05% for the same period in 2023[195]. - The interest rate spread decreased to 2.40% for the three months ended September 30, 2024, compared to 2.72% for the same period in 2023[196]. - The net FTE interest margin ratio decreased to 2.99% for the three months ended September 30, 2024, compared to 3.18% for the same period in 2023[196]. Credit Losses and Non-Performing Assets - The provision for credit losses was $19.8 million for the three months ended September 30, 2024, compared to a reduction of$0.1 million during the same period in 2023[204]. - Net charge-offs for the three months ended September 30, 2024, were $27.4 million, or an annualized 0.60$1.1 million, or 0.02%, during the same period in 2023[204]. - As of September 30, 2024, non-performing assets totaled $178.9 million, an increase from$174.9 million as of June 30, 2024, and significantly higher than $96.2 million as of September 30, 2023[228]. - The non-performing loans amounted to$174.5 million as of September 30, 2024, representing 100% of total non-performing loans, compared to $111.3 million as of December 31, 2023[229]. - The company expects future provisions for credit losses may be required if economic conditions decline or asset quality deteriorates[241]. Deposits and Funding - As of September 30, 2024, FDIC insured deposits accounted for 65.0$459.0 million, or 2.0%, to $22,864.1 million as of September 30, 2024, from$23,323.1 million as of December 31, 2023[245]. - The estimated amount of deposits in excess of the FDIC insurance limit at September 30, 2024, was $8.0 billion, or 35.0$1,080.0 million with remaining tenors of one year or less as of September 30, 2024, and a remaining borrowing capacity with the FHLB of $4,885.2 million[258]. - The Bank's total available liquidity was$6.5 billion as of September 30, 2024, compared to $7.3 billion as of December 31, 2023[257]. Expenses and Equity - Non-interest expense decreased by$1.7 million during the three months ended September 30, 2024, compared to the same period in 2023, driven by lower other expenses and professional fees[209]. - Non-interest expense for the three months ended September 30, 2024, was $159.4 million, a decrease of$1.7 million or 1.1% compared to $161.1 million in 2023[210]. - Stockholders' equity increased to$3,243.8 million as of September 30, 2024, compared to $3,154.5 million in the same period of 2023[196]. - Stockholders' equity increased by$138.3 million, or 4.3%, to $3,365.8 million as of September 30, 2024, from$3,227.5 million as of December 31, 2023[250]. - Salaries and wages increased by $5.5 million or 8.4$70.9 million for the three months ended September 30, 2024, primarily due to $3.8 million in transition expenses related to the CEO's retirement[211]. Strategic Opportunities and Market Conditions - The Company continues to evaluate bank acquisitions and other strategic opportunities as part of its normal course of business[172]. - The Federal Reserve increased short-term interest rates by 525 basis points between March 16, 2022, and July 29, 2023, and decreased them by 50 basis points in September 2024[177]. - Inflation decreased to 2.4% as of September 2024 from a high of 9.1% in June 2022, impacting the Company's operating expenses[176]. - The company is not aware of any events that are likely to have a material adverse effect on its liquidity, capital resources, or operations[255]. - The Asset Liability Committee (ALCO) is responsible for monitoring interest rate risk and developing asset liability management strategies[261].