FIRST INTERSTATE BANCSYSTEM INC [FIBK] Filings

10-Q 1 fibk-20220930.htm 10-Q fibk-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________________________________________________________________________________________________

FORM 10-Q

_____________________________________________________________________________________________________________________________________________________

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

COMMISSION FILE NUMBER 001-34653

________________________________________________________________________________________________________

FIRST INTERSTATE BANCSYSTEM, INC.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________________


Montana		81-0331430
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

401 North 31st Street
Billings,	MT	59116-0918
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (406) 255-5311

_________________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, no par value	FIBK	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:


October 31, 2022 – Class A common stock			104,447,711

Quarterly Report on Form 10-Q


	FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
	Index
	September 30, 2022
		Page Nos.
	Part I - Financial Information

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets	3

	Consolidated Statements of Income	4

	Consolidated Statements of Comprehensive (Loss) Income	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	8

	Notes to Unaudited Consolidated Financial Statements	11

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	51

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	69

Item 4.	Controls and Procedures	69

	Part II - Other Information

Item 1.	Legal Proceedings	70

Item 1A.	Risk Factors	70

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70

Item 3.	Defaults Upon Senior Securities	70

Item 4.	Mine Safety Disclosures	70

Item 5.	Other Information	70

Item 6.	Exhibits	71

Signatures		72

Table of Contents

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)


	September 30, 2022		December 31, 2021
Assets
Cash and due from banks	$	390.4	$	168.6
Interest bearing deposits in banks	201.4		2,176.1
Federal funds sold	0.1		0.1
Total cash and cash equivalents	591.9		2,344.8

Investment securities:
Available-for-sale, at estimated fair value	6,783.4		4,820.5
Held-to-maturity, net of allowance for credit losses of $1.9 and $0 at September 30, 2022 and December 31, 2021 (estimated fair values of $3,063.5 and $1,667.5 at September 30, 2022 and December 31, 2021)	3,485.7		1,687.6
Total investment securities	10,269.1		6,508.1
Federal Home Loan Bank and Federal Reserve Bank stock, at cost	131.9		53.8
Loans held for sale	93.6		30.1
Loans held for investment, net of deferred fees and costs	17,603.5		9,331.7
Allowance for credit losses	213.0		122.3
Net loans held for investment	17,390.5		9,209.4
Goodwill	1,100.0		621.6
Company-owned life insurance	495.6		301.5
Premises and equipment, net of accumulated depreciation	445.4		299.6
Other intangibles, net of accumulated amortization	101.0		41.3
Accrued interest receivable	106.4		47.4
Mortgage servicing rights, net of accumulated amortization and impairment reserve	31.8		28.2
Other real estate owned	16.4		2.0
Deferred tax asset, net	223.8		—
Other assets	347.3		184.1
Total assets	$	31,344.7	$	19,671.9
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	8,163.3	$	5,568.3
Interest bearing	17,721.5		10,701.3
Total deposits	25,884.8		16,269.6
Securities sold under repurchase agreements	1,075.6		1,051.1
Accounts payable and accrued expenses	452.9		148.4
Accrued interest payable	7.4		3.7
Deferred tax liability, net	—		9.3
Long-term debt	120.7		112.4
Other borrowed funds	625.0		—
Allowance for credit losses on off-balance sheet credit exposures	9.7		3.8

Subordinated debentures held by subsidiary trusts	163.1		87.0
Total liabilities	28,339.2		17,685.3
Stockholders’ equity:
Preferred stock, no par value; 100,000 shares authorized; none issued and outstanding	—		—
Common stock, no par value; 150,000,000 and 100,000,000 shares authorized at September 30, 2022 and December 31, 2021; 104,450,804 shares and 62,200,456 shares issued and outstanding, respectively	2,477.4		945.0
Retained earnings	1,035.8		1,052.6
Accumulated other comprehensive loss, net	(507.7)		(11.0)
Total stockholders’ equity	3,005.5		1,986.6
Total liabilities and stockholders’ equity	$	31,344.7	$	19,671.9

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Interest income:
Interest and fees on loans	$	218.3	$	111.9	$	561.7	$	325.1
Interest and dividends on investment securities:
Taxable	64.3		17.1		142.4		48.7
Exempt from federal taxes	1.4		1.4		4.1		4.2
Interest and dividends on FHLB and FRB stock	1.3		0.2		2.8		0.2
Interest on deposits in banks	1.4		0.7		6.5		1.7

Total interest income	286.7		131.3		717.5		379.9
Interest expense:
Interest on deposits	13.3		1.9		20.6		6.4
Interest on securities sold under repurchase agreements	0.8		0.1		1.4		0.3
Interest on other borrowed funds	2.4		—		2.4		—
Interest on long-term debt	1.5		1.5		4.6		4.5
Interest on subordinated debentures held by subsidiary trusts	1.9		0.7		4.3		2.1
Total interest expense	19.9		4.2		33.3		13.3
Net interest income	266.8		127.1		684.2		366.6
Provision for (reversal of) credit losses	8.4		—		68.0		(5.1)
Net interest income after provision for (reversal of) credit losses	258.4		127.1		616.2		371.7
Non-interest income:
Payment services revenues	20.4		12.2		54.7		33.8
Mortgage banking revenues	2.7		11.6		16.1		32.8
Wealth management revenues	8.5		6.5		25.9		19.1
Service charges on deposit accounts	5.7		4.4		19.7		12.1
Other service charges, commissions, and fees	4.7		1.4		12.6		5.1

Investment securities losses, net	(24.2)		0.3		(24.4)		0.2
Other income	5.1		3.1		17.0		9.8

Total non-interest income	22.9		39.5		121.6		112.9
Non-interest expense:
Salaries and wages	71.9		42.0		206.7		122.6
Employee benefits	19.6		12.9		60.2		43.7
Outsourced technology services	15.9		8.2		40.0		24.7
Occupancy, net	11.3		7.3		32.5		21.7
Furniture and equipment	5.8		4.5		17.0		13.0
OREO expense, net of income	—		—		0.1		(0.1)
Professional fees	5.1		2.7		14.5		9.3
FDIC insurance premiums	4.1		1.7		10.2		4.8


Other intangibles amortization	4.1		2.4		11.8		7.4
Other expenses	31.4		17.6		82.7		49.6

Acquisition related expenses	4.0		6.6		115.0		6.6
Total non-interest expense	173.2		105.9		590.7		303.3
Income before income tax	108.1		60.7		147.1		181.3
Provision for income tax	22.4		13.6		30.7		40.3
Net income	$	85.7	$	47.1	$	116.4	$	141.0

Earnings per common share (Basic)	$	0.80	$	0.76	$	1.13	$	2.29
Earnings per common share (Diluted)	$	0.80	$	0.76	$	1.13	$	2.28

Weighted average common shares outstanding (Basic)	106,525,974		61,673,656		102,879,422		61,641,342
Weighted average common shares outstanding (Diluted)	106,589,699		61,747,972		102,935,360		61,732,822

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In millions)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income	$	85.7	$	47.1	$	116.4	$	141.0
Other comprehensive loss, before tax:
Investment securities available-for sale:
Change in net unrealized loss during period	(236.4)		(13.4)		(650.6)		(81.0)
Reclassification adjustment for net loss (gain) included in income	24.2		(0.3)		24.4		(0.2)
Reclassification adjustment for securities transferred from held-to-maturity to available-for-sale	—		—		0.2		—
Net change in unamortized (losses) gains on available-for-sale securities transferred into held-to-maturity	(1.7)		(2.5)		(25.6)		22.3
Change in unrealized (gain) loss on derivatives	(15.9)		3.2		(9.6)		2.3



Other comprehensive loss, before tax	(229.8)		(13.0)		(661.2)		(56.6)
Deferred tax benefit related to other comprehensive loss	51.9		3.2		164.5		14.3
Other comprehensive loss, net of tax	(177.9)		(9.8)		(496.7)		(42.3)
Comprehensive (loss) income, net of tax	$	(92.2)	$	37.3	$	(380.3)	$	98.7

See accompanying notes to unaudited consolidated financial statements.

Table of Contents


FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (In millions, except share and per share data) (Unaudited)
	Three Months Ended September 30,
	Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Total stockholders’ equity
Balance at June 30, 2022	$	2,607.9	$	993.8	$	(329.8)	$	3,271.9


Net income	—		85.7		—		85.7

Other comprehensive loss, net of tax expense	—		—		(177.9)		(177.9)
Common stock transactions:
3,280,042 common shares purchased and retired	(133.0)		—		—		(133.0)

251 non-vested common shares issued	—		—		—		—
27,443 non-vested common shares forfeited or canceled	—		—		—		—



Stock-based compensation expense	2.5		—		—		2.5
Common stock cash dividends declared ($0.41 per share)	—		(43.7)		—		(43.7)
Balance at September 30, 2022	$	2,477.4	$	1,035.8	$	(507.7)	$	3,005.5

	Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Total stockholders’ equity
Balance at June 30, 2021	$	941.6	$	1,005.2	$	24.1	$	1,970.9


Net income	—		47.1		—		47.1

Other comprehensive loss, net of tax expense	—		—		(9.8)		(9.8)
Common stock transactions:
574 common shares purchased and retired	—		—		—		—
1,782 common shares issued	—		—		—		—
12,620 non-vested common shares issued	—		—		—		—
2,324 non-vested common shares forfeited or canceled	—		—		—		—



Stock-based compensation expense	2.0		—		—		2.0
Common stock cash dividends declared ($0.41 per share)	—		(25.4)		—		(25.4)
Balance at September 30, 2021	$	943.6	$	1,026.9	$	14.3	$	1,984.8

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST INTERSTATE BANCSYSTEM INC [FIBK] Filings
10-Q	[2022-11-07]
10-Q	[2022-08-05]
10-Q	[2022-05-09]
10-K	[2022-02-25]
10-Q	[2021-11-04]
10-Q	[2021-08-06]
10-Q	[2021-05-07]
10-K	[2021-03-01]
10-Q	[2020-11-04]
10-Q	[2020-08-07]
10-Q	[2020-05-11]
10-K	[2020-02-27]
10-Q	[2019-11-06]
10-Q	[2019-08-07]
10-Q	[2019-05-08]
10-K	[2019-02-27]
10-Q	[2018-11-07]
10-Q	[2018-08-07]
10-Q	[2018-05-09]
10-K	[2018-02-28]
10-Q	[2017-11-08]
10-Q	[2017-08-09]
10-Q	[2017-05-09]
10-K	[2017-03-02]
10-Q	[2016-11-08]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-03-01]
10-Q	[2015-11-09]
10-Q	[2015-08-06]
10-Q	[2015-05-07]
10-K	[2015-03-02]
10-Q	[2014-11-07]
10-Q	[2014-08-01]
10-Q	[2014-05-02]
10-K	[2014-02-28]
10-Q	[2013-10-31]
10-Q	[2013-07-31]
10-Q	[2013-05-01]
10-K	[2013-03-01]
10-Q	[2012-11-07]
10-Q	[2012-08-09]
10-Q	[2012-05-09]
10-K	[2012-02-28]