Core Viewpoint - KeyCorp is aligning its strategies with activist investor demands, focusing on stock buybacks and avoiding mergers, while asserting that its stock is undervalued [1][4][5]. Group 1: Stock Buybacks - KeyCorp plans to repurchase $200 million worth of stock in Q4, doubling its previous projection, and has $800 million remaining in its buyback plan [2][5]. - CEO Chris Gorman emphasized that the bank will likely renew its buyback program in 2026, indicating a strong commitment to returning capital to shareholders [2][5]. - Following Gorman's comments, Key's stock rose over 4%, reflecting positive market sentiment towards the buyback strategy [4]. Group 2: Mergers and Acquisitions - Gorman stated that KeyCorp is not pursuing any acquisitions of other financial institutions, aligning with the activist investor's call for a moratorium on M&A [1][4][8]. - The bank is focused on organic growth and leveraging market disruptions rather than pursuing mergers [3][8]. Group 3: Investor Relations and Activist Pressure - HoldCo Asset Management has criticized KeyCorp for share dilution and management decisions, demanding changes including Gorman's removal and a focus on buybacks [3][4][12]. - Gorman acknowledged the need to consider HoldCo's presentation while agreeing on the importance of returning capital to shareholders [5][12]. - Analysts have reacted positively to Gorman's comments, with some upgrading their ratings on KeyCorp, indicating improved investor confidence [6].

Core Insights - Banks are actively pursuing mergers to achieve scale despite investor skepticism regarding the impact on tangible book value [4][8][12] - The current environment is seeing a resurgence in bank dealmaking, with 2025 projected to be the largest year for bank transactions since before the pandemic [12] Group 1: Market Reactions to Mergers - First Horizon's stock fell by as much as 13% after announcing plans for a deal, while Eastern Bankshares saw a drop of over 4.5% following similar comments from its CEO [2] - An analysis revealed that the stock prices of buyers in major bank transactions typically declined in the 30 trading days post-announcement, with Fifth Third Bancorp's shares down more than 4% after acquiring Comerica [3] Group 2: Investor Sentiment and Strategic Decisions - Investors are increasingly concerned about tangible book value dilution and the risks associated with mergers, leading to a disconnect between bank executives and market expectations [4][8] - Activist investor HoldCo Asset Management has been vocal against further acquisitions by certain banks, advocating instead for stock buybacks and potential sales to other institutions [7][9] Group 3: Performance and Strategic Outlook - Truist Securities' analysis indicates that banks that reduce their share counts tend to outperform their peers, with 30 out of the 72 largest U.S. banks having shrunk their share count in the last decade [10] - Despite the skepticism, banks are continuing to pursue M&A opportunities, with Fifth Third's acquisition of Comerica expected to close without diluting its tangible book value per share [12][13]

Core Insights - First Interstate BancSystem reported notable insider selling by John M. Heyneman Jr., a Board member, who sold 30,432 shares on November 21, 2025, amid a year of modest stock declines [1][2][9] Transaction Summary - The shares sold amounted to 30,432, with a transaction value of $944,300 based on a sale price of $31.03 per share [2] - Post-transaction, Heyneman's direct ownership decreased to 5,224 shares, valued at $164,100 based on a closing price of $31.42 on the same day [2] - This sale represented 85.35% of Heyneman's direct holdings prior to the transaction, significantly larger than his median sell trade of 21,125 shares [6] Company Overview - First Interstate BancSystem reported a total revenue of $1.01 billion and a net income of $245.40 million for the trailing twelve months [4] - The company has a dividend yield of 5.86% and a 1-year price change of -1.10% as of November 21, 2025 [4] Financial Performance - In Q3, First Interstate achieved a net income of $71.4 million, an increase from $55.5 million in the same quarter of 2024, resulting in earnings of $0.69 per diluted share compared to $0.54 the previous year [10] - However, net loans held for investment fell to $15.8 billion, reflecting a 12% year-over-year decline [10] Ownership Context - Despite the reduction in direct holdings, Heyneman retains significant indirect interests through various entities, totaling over 1.4 million shares [6][9] - The sale price of $31.03 was approximately 5.4% below the latest available market price of $32.80 as of November 27, 2025 [6]

Group 1 - Crude Value Insights provides an investment service and community focused on the oil and natural gas sectors, emphasizing cash flow and companies that generate it [1] - The service offers subscribers access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [1] Group 2 - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas market [2]

Financial Position - As of September 30, 2025, the company had consolidated assets of $27.3 billion, deposits of $22.6 billion, net loans held for investment of $15.6 billion, and total stockholders' equity of $3.4 billion[137]. - Total assets decreased to $27,292.4 million as of September 30, 2025, compared to $29,946.9 million as of September 30, 2024[166]. - Total liabilities decreased by $1,949.2 million, or 7.5%, to $23,884.2 million as of September 30, 2025, from $25,833.4 million as of December 31, 2024[221]. - Stockholders' equity increased by $144.7 million, or 4.4%, to $3,448.7 million as of September 30, 2025, from $3,304.0 million as of December 31, 2024[227]. - Total cash and cash equivalents increased to $1,449.2 million as of September 30, 2025, compared to $896.6 million as of December 31, 2024[233]. Interest Income and Margin - The company's quarterly yield on interest-earning assets decreased to 4.73% as of September 30, 2025, down from 4.76% as of June 30, 2025, and from 4.83% as of September 30, 2024[153]. - The net interest margin increased to 3.34% during the three months ended September 30, 2025, from 3.30% during the three months ended June 30, 2025, and from 3.01% for the three months ended September 30, 2024[154]. - Net interest income, the largest source of operating income, was $206.8 million for the three months ended September 30, 2025, compared to $205.5 million for the same period in 2024, reflecting a $1.3 million increase[166]. - The net interest margin ratio increased by 33 basis points to 3.34% for the three months ended September 30, 2025, compared to 3.01% for the same period in 2024[168]. - The cost of funds decreased to 1.45% during the three months ended September 30, 2025, from 1.50% during the three months ended June 30, 2025, and from 1.86% during the three months ended September 30, 2024[154]. Credit Quality - Criticized assets improved in the third quarter of 2025 compared to the second quarter, indicating a positive trend in credit quality[156]. - The provision for credit losses decreased by $19.8 million during the three months ended September 30, 2025, contributing to the increase in net income[162]. - Non-performing loans as a percentage of loans held for investment increased to 1.15% as of September 30, 2025, from 0.78% as of December 31, 2024[208]. - The allowance for credit losses was $205.8 million, or 1.30% of loans held for investment, as of September 30, 2025, up from $204.1 million, or 1.14%, as of December 31, 2024[217]. - The company expects future provisions for credit losses to be subject to ongoing evaluations of risks in the loan portfolio, particularly if economic conditions decline[219]. Operational Efficiency - On October 10, 2025, the company completed the sale of twelve branches, including approximately $645 million in deposits and loans with outstanding balances of $305 million[143]. - The company plans to close four additional branches in Nebraska in the first quarter of 2026 to enhance operational efficiency[149]. - The company discontinued accepting applications for indirect loans in Q1 2025, leading to a continued amortization of $66.8 million in the indirect portfolio during Q3 2025[203]. Income and Expenses - Net income increased by $15.9 million to $71.4 million, or $0.69 per diluted share, for the three months ended September 30, 2025, compared to $55.5 million, or $0.54 per diluted share, for the same period in 2024[162]. - Total noninterest income decreased by $2.7 million, or 5.8%, to $43.7 million for the three months ended September 30, 2025, compared to $46.4 million for the same period in 2024[182]. - Total noninterest expense decreased by $1.5 million, or 0.9%, to $157.9 million for the three months ended September 30, 2025, compared to $159.4 million for the same period in 2024[186]. - Salaries and wages expense decreased by $4.7 million, or 6.6%, to $66.2 million for the three months ended September 30, 2025, compared to $70.9 million for the same period in 2024[187]. Market Conditions - The company expects continued volatility in economic markets, which may include recessionary signs due to uncertain U.S. policies[155]. - The company continues to monitor external factors that may impact financial performance, including economic conditions and credit quality[158]. Liquidity and Capital Management - The Company had an available borrowing capacity of $5,057.3 million with the FHLB as of September 30, 2025[234]. - Total available liquidity increased to $9.3 billion as of September 30, 2025, compared to $7.1 billion as of December 31, 2024[239]. - The company adopted a new stock repurchase program to repurchase up to $150.0 million worth of its common stock by March 31, 2027[228]. - During the three and nine months ended September 30, 2025, the company repurchased 842,903 shares of common stock at a total cost of $27.5 million[229].

Core Viewpoint - HoldCo Asset Management has expressed its intention to remain a long-term shareholder of First Interstate BancSystem, Inc. and will actively monitor the company's actions and capital allocation decisions following recent concessions made by the Board and management [2]. Group 1: Company Overview - HoldCo Asset Management, LP is an investment adviser based in Fort Lauderdale, Florida, managing approximately $2.6 billion in regulatory assets [3]. - The firm was founded by Vik Ghei and Misha Zaitzeff [3]. Group 2: Shareholder Actions - HoldCo disclosed ownership of common stock in First Interstate BancSystem, indicating an economic interest in the company's securities [1]. - The firm does not plan to pursue a proxy contest at the 2026 Annual Meeting due to recent concessions from the Board and management [2]. - However, HoldCo has stated that it will take necessary actions to protect shareholder rights and drive value if the Board's actions are inconsistent with their expectations [2].

Core Viewpoint - First Interstate BancSystem is under pressure from activist investor HoldCo Asset Management, which has made several demands regarding the bank's capital management and strategic direction, but the bank has not fully committed to these demands [1][5][10]. Company Strategy - First Interstate's management has stated that they are not focused on mergers and acquisitions, opting instead to use excess capital for share buybacks [2][3]. - The bank's President and CEO, Jim Reuter, emphasized the importance of executing their strategic plan and expressed confidence in the bank's future success [3][9]. - The bank is transitioning towards relationship banking and has exited non-core businesses, including indirect auto lending [9]. Financial Performance - For the third quarter, First Interstate reported a net income of $71.4 million, representing a 28.6% increase year-over-year, with earnings per share of $0.69, exceeding the consensus estimate of $0.62 [13]. - Average loans decreased to $16.4 billion, a 12% year-over-year decline, attributed to the run-off of non-core relationships and recent branch sales [14]. Capital Management - HoldCo has requested that First Interstate publicly declare a goal to reduce its Common Equity Tier 1 (CET1) ratio target to 10.3%, significantly lower than the current ratio of 13.9% [5]. - The bank's CFO indicated that they would align their CET1 ratio more closely with peers in the near term, but no specific commitments were made regarding HoldCo's demands [5][11]. Market Reaction - First Interstate's stock price fell by 0.73% on the day of the news, and it has seen a decline of approximately 3% year-to-date [15].

Financial Data and Key Metrics Changes - The company reported net income of $71.4 million, or $0.69 per diluted share, compared to $71.7 million or $0.69 per diluted share in the previous quarter [13] - Net interest income decreased by $0.4 million, or 0.2%, to $206.8 million compared to the prior quarter, but increased by $1.3 million, or 0.6%, compared to the third quarter of 2024 [13] - The fully taxable equivalent net interest margin was 3.36% for the third quarter, up from 3.32% in the second quarter [14] - Total deposits decreased by $25.6 million to $22.6 billion as of September 30, 2025 [17] Business Line Data and Key Metrics Changes - Loan balances decreased by $519 million in the third quarter, including $66.8 million from the indirect portfolio and larger loan paydowns [16] - Non-interest income was $43.7 million, an increase of $2.6 million from the prior quarter [14] - Non-interest expense increased by $2.8 million to $157.9 million, including costs related to branch divestitures [15] Market Data and Key Metrics Changes - The ratio of loans held for investment to deposits was 70.1% at the end of the quarter, down from 72.3% in the prior quarter [17] - Credit quality stabilized, with non-performing assets decreasing by $11.9 million, or 6%, to $185.6 million [10] Company Strategy and Development Direction - The company is focused on organic growth, optimizing its branch network, and improving core profitability [5] - Recent divestitures of branches in Arizona, Kansas, and Nebraska are aimed at enhancing market density and operational efficiency [6][7] - The company plans to continue investing in areas with strong market share and growth potential, including opening new locations [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in loan growth due to muted demand for real estate lending and increased competition [9] - The company anticipates a decline in loan balances in the fourth quarter but remains optimistic about growth opportunities in 2026 [32] - Management emphasized a disciplined approach to growth, focusing on credit quality and risk management [10][26] Other Important Information - The company declared a dividend of $0.47 per common share, equating to a 6% annualized yield based on the average closing price [17] - The CET1 capital ratio increased to 13.9%, driven by lower risk-weighted assets [17] Q&A Session Summary Question: Loan growth outlook for 2026 - Management indicated that loan growth is a primary focus and expressed optimism about returning to net loan growth in 2026, despite recent challenges [32][33] Question: Capital management and buyback strategy - Management confirmed that the current buyback program is a priority, but they are also considering other options for capital allocation as they assess market conditions [34][39] Question: Expectations for net interest income growth - Management provided guidance for mid-single-digit net interest income growth in 2026, with expectations for sequential improvement throughout the year [42][44] Question: Credit quality and charge-off expectations - Management reiterated a long-term charge-off guidance of 20 to 30 basis points, emphasizing that quarterly results may fluctuate based on specific credit resolutions [60][62] Question: Margin outlook and loan repricing - Management discussed the impact of loan repricing and anticipated that the margin could improve as the loan portfolio adjusts to market conditions [64][66]

Financial Performance - The company reported net income of $71.4 million, or $0.69 per share for Q3 2025[19] - Net interest margin (NIM) was 3.34%, with an adjusted FTE NIM of 3.30%, a 4 basis points increase from the previous quarter[19] - The efficiency ratio was 61.7% for the third quarter of 2025[19] Balance Sheet & Capital - Total assets reached $27.3 billion[8] - Loans held for investment (LHFI) totaled $15.8 billion[8], decreasing by $519.0 million from the second quarter of 2025[19] - Deposits amounted to $22.6 billion[8], a decrease of $25.6 million from the second quarter of 2025[19] - The company's loan-to-deposit ratio was 70% in Q3 2025[18] - CET1 was 13.90% and total RBC was 16.62% for Q3 2025[19] - The company repurchased approximately 1.8 million shares for approximately $57.2 million through October 28, 2025[18] Asset Quality - Non-performing loans (NPLs) decreased 6.1% from the second quarter of 2025, to $182.2 million, representing 1.15% of LHFI[19] - Net charge-offs (NCOs) were $2.3 million, or an annualized 6 basis points of average loans outstanding during Q3 2025[19] - Criticized loans decreased 3.2%, or $38.9 million, from the second quarter of 2025, to $1,164.1 million, representing 7.4% of LHFI[19] Strategic Initiatives - The company closed the sale of Arizona and Kansas branches in October 2025[18] - The company announced the pending sale of 11 Nebraska branches[18]

Core Insights - First Interstate BancSystem (FIBK) reported $251.9 million in revenue for Q3 2025, showing no year-over-year change, with an EPS of $0.69 compared to $0.54 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $254.9 million, resulting in a surprise of -1.18%, while the EPS exceeded the consensus estimate of $0.59 by +16.95% [1] Financial Performance Metrics - Efficiency Ratio stood at 61.7%, slightly better than the average estimate of 62.1% from two analysts [4] - Net charge-offs to average loans were reported at 0.1%, significantly lower than the average estimate of 0.3% [4] - Net FTE interest margin ratio was consistent at 3.4%, matching the average estimate from two analysts [4] - Net Interest Income was $206.8 million, below the average estimate of $210.13 million [4] - Total noninterest Income reached $43.7 million, slightly below the estimated $44.03 million [4] - Mortgage banking revenues were reported at $1.5 million, lower than the average estimate of $1.93 million [4] Stock Performance - Shares of First Interstate BancSystem have returned +1.2% over the past month, compared to a +3.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]