First Interstate BancSystem(US:FIBK)2021-02-28 16:00Financial Performance and Position - As of December 31, 2020, the company had consolidated assets of $17.6 billion, deposits of $14.2 billion, loans held for investment of $9.8 billion, and total stockholders' equity of $2.0 billion[20]. - The company has a strategic focus on balance sheet management and financial rigor, which has contributed to its status as a top-performing bank[24]. - The company aims to continue its business in a disciplined manner, fueled by organic growth and expansion into new markets when appropriate opportunities arise[24]. - The company is currently well-capitalized and well-managed, allowing it to engage in authorized financial activities as a financial holding company[46]. - The company is required to maintain a common equity Tier 1 capital to risk-based assets ratio of 4.5%[57]. - The total capital to risk-based assets ratio must be at least 8.0%[57]. - The company’s ability to pay dividends is limited by state and federal laws, requiring prior consent from the Federal Reserve for distributions exceeding certain thresholds[52]. Community Banking and Services - The company operates 150 banking offices across six states, focusing on community banking and providing a comprehensive range of banking products and services[20]. - The company emphasizes a community banking model, granting banking offices significant authority to respond to local market conditions while maintaining accountability through company-wide standards[25]. - The company is committed to community service and aims to strengthen the communities in its market areas through service activities[25]. - The company operates primarily in community banking, offering commercial and consumer banking services, including deposits, credit extensions, and mortgage loan origination[25]. - The company emphasizes a commitment to community values, including integrity and client focus, as part of its business model[22]. Risk Management and Compliance - The company has established minimum underwriting standards to ensure loans are appropriately collateralized and supported by current credit information[27]. - The company maintains comprehensive credit policies to limit risk, ensuring loans meet minimum underwriting standards and are appropriately collateralized[26]. - The Bank is subject to extensive government regulation and supervision under federal and state laws, impacting its operational activities[38]. - The company is subject to enhanced risk management and corporate governance processes as it exceeds $10 billion in assets, as mandated by federal banking regulators[74]. - The company is required to maintain multiple layers of security controls to manage cyber risks and ensure business continuity after potential cyber-attacks[98]. - The USA PATRIOT Act requires financial institutions to have policies to detect and prevent money laundering and terrorist financing[94]. Employee Engagement and Workforce - As of December 31, 2020, the company employed 2,462 full-time equivalent employees, a decrease of 11 employees from the previous year[101]. - Approximately 72.3% of the full-time equivalent workforce was female, with an average tenure of 8.3 years, reflecting a 3.8% increase from 8.0 years in 2019[101]. - The company has taken significant measures for employee safety during the pandemic, including providing personal protective equipment and temperature screenings[104]. - The company actively engages in programs to attract, develop, and retain employees, reflecting a commitment to human capital[101]. - Employee engagement survey participation was approximately 95%, indicating favorable employee relations[101]. Cybersecurity and Technology - The company has not experienced significant data loss or material financial losses related to cybersecurity attacks to date, but risks remain high due to evolving threats[100]. - Cybersecurity risks are expected to remain high due to evolving threats and increased use of technology-based services[100]. - The company employs various preventative and detective controls to monitor and report suspicious activities related to cybersecurity[99]. - Federal regulators expect financial institutions to maintain sufficient business continuity planning processes for rapid recovery after cyber-attacks[98]. Strategic Growth and Acquisitions - The company has made strategic acquisitions to expand its market reach, including Mountain West Bank and Bank of the Cascades[20]. - The company aims to expand its market reach through organic growth and strategic acquisitions, having completed several acquisitions since its IPO[20]. - The company has established credit authorities at individual, branch, and market levels to ensure responsiveness to local market conditions[28]. Regulatory Environment - The Bank's ability to pay dividends is limited to current year net profits plus retained earnings from the previous two years unless prior consent from the Federal Reserve is obtained[52]. - The Bank's capital buffer rules require the common equity conservation buffer to exceed the minimum required capital ratio by 2.5% of risk-weighted assets for dividend payments[53]. - The company meets the criteria for grandfathering under the Dodd-Frank Act, allowing it to use hybrid capital instruments without current limitations, but risks losing Tier 1 qualification if assets exceed $15.0 billion[65]. - The Dodd-Frank Act prohibits incentive compensation arrangements that encourage excessive risk-taking, impacting how the company structures executive compensation[97]. - The FDIC assesses member institutions based on financial measures and supervisory ratings, with higher-risk banks paying higher assessments[76].