First Interstate BancSystem(FIBK) - 2024 Q2 - Quarterly Results

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].