FIRST INTERSTATE BANCSYSTEM INC [FIBK] Filings

10-Q 1 fibk-20220331.htm 10-Q fibk-20220331

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 March 31, 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:


April 30, 2022 – Class A common stock			109,493,618

Quarterly Report on Form 10-Q


	FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
	Index
	March 31, 2022
		Page Nos.
	Part I - Financial Information

Item 1.	Financial Statements (Unaudited)

	Consolidated Balance Sheets	3

	Consolidated Statements of (Loss) Income	4

	Consolidated Statements of Comprehensive (Loss) Income	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Unaudited Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	46

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	61

Item 4.	Controls and Procedures	61

	Part II - Other Information

Item 1.	Legal Proceedings	61

Item 1A.	Risk Factors	61

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62

Item 3.	Defaults Upon Senior Securities	62

Item 4.	Mine Safety Disclosures	62

Item 5.	Other Information	62

Item 6.	Exhibits	63

Signatures		64

Table of Contents

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

(Unaudited)


	March 31, 2022		December 31, 2021
Assets
Cash and due from banks	$	387.6	$	168.6
Interest bearing deposits in banks	3,423.6		2,176.1
Federal funds sold	0.1		0.1
Total cash and cash equivalents	3,811.3		2,344.8
Securities purchased under agreement to resell	102.0		—
Investment securities:
Available-for-sale, at estimated fair value	6,283.8		4,820.5
Held-to-maturity, net of allowance for credit losses of $1.6 and $0 at March 31, 2022 and December 31, 2021 (estimated fair values of $3,029.1 and $1,667.5 at March 31, 2022 and December 31, 2021)	3,218.7		1,687.6
Total investment securities	9,502.5		6,508.1
Loans held for sale	178.1		30.1
Loans held for investment, net of deferred fees and costs	16,945.0		9,331.7
Allowance for credit losses	247.2		122.3
Net loans held for investment	16,697.8		9,209.4
Goodwill	1,137.6		621.6
Company-owned life insurance	490.1		301.5
Premises and equipment, net of accumulated depreciation	444.4		299.6
Other intangibles, net of accumulated amortization	109.6		41.3
Accrued interest receivable	81.1		47.4
Mortgage servicing rights, net of accumulated amortization and impairment reserve	32.7		28.2
Other real estate owned	17.5		2.0
Deferred tax asset, net	137.4		—
Other assets	420.1		237.9
Total assets	$	33,162.2	$	19,671.9
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	8,240.6	$	5,568.3
Interest bearing	19,847.7		10,701.3
Total deposits	28,088.3		16,269.6
Securities sold under repurchase agreements	1,071.0		1,051.1
Accounts payable and accrued expenses	266.1		148.4
Accrued interest payable	6.0		3.7
Deferred tax liability, net	—		9.3
Long-term debt	120.4		112.4

Allowance for credit losses on off-balance sheet credit exposures	6.2		3.8

Subordinated debentures held by subsidiary trusts	163.1		87.0
Total liabilities	29,721.1		17,685.3
Stockholders’ equity:
Preferred stock, no par value; 100,000,000 shares authorized; none issued and outstanding	—		—
Common stock, no par value; 150,000,000 and 100,000,000 shares authorized at March 31, 2022 and December 31, 2021; 109,503,010 shares and 62,200,456 shares issued and outstanding, respectively	2,668.6		945.0
Retained earnings	974.5		1,052.6
Accumulated other comprehensive loss, net	(202.0)		(11.0)
Total stockholders’ equity	3,441.1		1,986.6
Total liabilities and stockholders’ equity	$	33,162.2	$	19,671.9

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(In millions, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2022		2021
Interest income:
Interest and fees on loans	$	151.7	$	107.8
Interest and dividends on investment securities:
Taxable	29.3		15.8
Exempt from federal taxes	1.3		1.4
Interest on deposits in banks	1.7		0.3

Total interest income	184.0		125.3
Interest expense:
Interest on deposits	3.0		2.3
Interest on securities sold under repurchase agreements	0.3		0.1

Interest on long-term debt	1.7		1.5
Interest on subordinated debentures held by subsidiary trusts	1.0		0.7
Total interest expense	6.0		4.6
Net interest income	178.0		120.7
Provision for (reversal of) credit losses	61.3		(5.1)
Net interest income after provision for (reversal of) credit losses	116.7		125.8
Non-interest income:
Payment services revenues	14.8		10.2
Mortgage banking revenues	8.4		11.6
Wealth management revenues	8.1		6.3
Service charges on deposit accounts	7.7		3.8
Other service charges, commissions, and fees	4.3		2.1

Investment securities losses, net	(0.1)		—
Other income	6.0		4.1

Total non-interest income	49.2		38.1
Non-interest expense:
Salaries and wages	60.0		39.0
Employee benefits	21.2		16.1
Outsourced technology services	11.3		8.1
Occupancy, net	10.0		7.3
Furniture and equipment	5.4		4.4
OREO expense, net of income	0.1		(0.1)
Professional fees	3.9		3.4
FDIC insurance premiums	3.3		1.6


Other intangibles amortization	3.6		2.5
Other expenses	23.2		16.1

Acquisition related expenses	65.2		—
Total non-interest expense	207.2		98.4
(Loss) income before income tax	(41.3)		65.5
(Benefit from) provision for income tax	(7.9)		14.1
Net (loss) income	$	(33.4)	$	51.4

(Loss) earnings per common share (Basic)	$	(0.36)	$	0.83
(Loss) earnings per common share (Diluted)	(0.36)		0.83

Weighted average common shares outstanding (Basic)	92,855,173		61,591,877
Weighted average common shares outstanding (Diluted)	92,855,173		61,714,063

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 March 31,
	2022		2021
Net (loss) income	$	(33.4)	$	51.4
Other comprehensive (loss) income, before tax:
Investment securities available-for sale:
Change in net unrealized loss during period	(252.6)		(66.8)
Reclassification adjustment for net loss included in income	0.1		—
Reclassification adjustment for securities transferred from held-to-maturity to available-for-sale	0.2		—
Net change in unamortized losses on available-for-sale securities transferred into held-to-maturity	(23.0)		—
Change in unrealized loss (gain) on derivatives	21.3		(0.1)



Other comprehensive loss, before tax	(254.0)		(66.9)
Changes in deferred taxes related to other comprehensive loss	63.0		17.0
Other comprehensive loss, net of tax	(191.0)		(49.9)
Comprehensive (loss) income, net of tax	$	(224.4)	$	1.5

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 March 31,
	Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Total stockholders’ equity
Balance at December 31, 2021	$	945.0	$	1,052.6	$	(11.0)	$	1,986.6


Net loss	—		(33.4)		—		(33.4)

Other comprehensive loss, net of tax expense	—		—		(191.0)		(191.0)
Common stock transactions:
37,698 common shares purchased and retired	(1.4)		—		—		(1.4)
46,887,104 common shares issued	1,722.5		—		—		1,722.5
450,813 non-vested common shares issued	—		—		—		—
15,472 non-vested common shares forfeited or canceled	—		—		—		—

17,807 stock options exercised, net of 4,877 shares tendered in payment of option price and income tax withholding amounts	0.1		—		—		0.1

Stock-based compensation expense	2.4		—		—		2.4
Common stock cash dividends declared ($0.41 per share)	—		(44.7)		—		(44.7)
Balance at March 31, 2022	$	2,668.6	$	974.5	$	(202.0)	$	3,441.1

	Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Total stockholders’ equity
Balance at December 31, 2020	$	941.1	$	962.1	$	56.6	$	1,959.8


Net income	—		51.4		—		51.4

Other comprehensive loss, net of tax expense	—		—		(49.9)		(49.9)
Common stock transactions:
127,180 common shares purchased and retired	(5.4)		—		—		(5.4)
604 common shares issued	—		—		—		—
239,525 non-vested common shares issued	—		—		—		—
19,068 non-vested common shares forfeited or canceled	—		—		—		—

40,663 stock options exercised, net of 6,177 shares tendered in payment of option price and income tax withholding amounts	0.4		—		—		0.4

Stock-based compensation expense	2.4		—		—		2.4
Common stock cash dividends declared ($0.41 per share)	—		(25.3)		—		(25.3)
Balance at March 31, 2021	$	938.5	$	988.2	$	6.7	$	1,933.4

See accompanying notes to unaudited consolidated financial statements.

Table of Contents


FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited)
	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net (loss) income	$	(33.4)	$	51.4
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Provision for (reversal of) credit losses	61.3		(5.1)
Net gain on disposal of premises and equipment	(0.2)		(0.4)
Depreciation and amortization	13.3		11.4
Net premium amortization on investment securities	8.1		7.7
Net loss on investment securities transactions	0.1		—
Realized and unrealized net gains on mortgage banking activities	(3.3)		(3.9)

Net gain on sale of OREO	—		(0.1)

Net gain on extinguishment of debt	(1.4)		—

Mortgage servicing rights recovery	(3.4)		(5.9)
Deferred taxes	(6.5)		9.6
Net increase in cash surrender value of company-owned life insurance	(2.0)		(1.2)
Stock-based compensation expense	2.4		2.4


Originations of mortgage loans held for sale	(98.8)		(156.4)
Proceeds from sales of mortgage loans held for sale	112.0		177.2
Changes in operating assets and liabilities:
(Increase) decrease in interest receivable	(0.6)		1.1
Decrease (increase) in other assets	4.3		(7.8)
(Decrease) increase in accrued interest payable	(0.1)		1.1
Increase (decrease) in accounts payable and accrued expenses	13.1		(10.6)
Net cash provided by operating activities	64.9		70.5
Cash flows from investing activities:
Purchases of investment securities:
Held-to-maturity	(370.0)		(825.1)
Available-for-sale	(1,144.5)		(378.6)
Proceeds from sales, maturities, and pay-downs of investment securities:
Held-to-maturity	106.4		9.3
Available-for-sale	826.5		293.7




Extensions of credit to clients, net of repayments	106.4		(58.7)

Proceeds from sale of OREO	0.3		0.7



Acquisition of bank and bank holding company, net of cash and cash equivalents received	2,006.9		—
Capital expenditures, net of sales	(9.5)		(0.5)
Net cash provided by (used in) investing activities	$	1,522.5	$	(959.2)

Table of Contents



FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (In millions) (Unaudited)
	Three Months Ended March 31,
	2022		2021
Cash flows from financing activities:
Net increase in deposits	$	130.8	$	877.0
Net decrease in securities sold under repurchase agreements	(55.0)		(38.8)


Repayments of long-term debt	(157.9)		—
Advances on long-term debt	8.0		—
Payment of stock issuance costs	(0.8)		—

Proceeds from issuance of common stock, net	0.1		0.4

Purchase and retirement of common stock	(1.4)		(5.4)
Dividends paid to common stockholders	(44.7)		(25.3)
Net cash (used in) provided by financing activities	(120.9)		807.9
Net increase (decrease) in cash and cash equivalents	1,466.5		(80.8)
Cash and cash equivalents at beginning of period	2,344.8		2,276.8
Cash and cash equivalents at end of period	$	3,811.3	$	2,196.0

Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	0.1	$	21.0
Cash paid during the period for interest expense	6.0		3.5

Supplemental disclosures of non-cash investing and financing activities:



Right-of-use assets obtained in exchange for operating lease liabilities	$	19.9	$	—
Transfer of held-to-maturity to available-for sale securities	10.9		—
Transfer of available-for sale to held-to-maturity securities	463.6		—
Transfer of held-for-sale to held for investment loans	19.8		—
Transfer of loans to other real estate owned	—		0.3
Shares issued for acquisition	1,723.3		—
Capitalization of internally originated mortgage servicing rights	1.1		0.1

Supplemental schedule of noncash investing activities from acquisition:
Investment securities	$	2,699.0	$	—

Securities purchased under agreement to resell	101.1		—
Loans held for sale	181.9		—
Loans held for investment, net	7,629.1		—
Premises and equipment	144.1		—
Goodwill	516.0		—
Other intangibles	71.9		—

Mortgage servicing rights	1.3		—
Company-owned life insurance	186.6		—
Deferred tax assets	76.1		—

Other real estate owned	15.8		—
Other assets	198.0		—
Total noncash assets acquired	11,820.9		—

Liabilities assumed:
Deposits	$	11,688.0	$

FIRST INTERSTATE BANCSYSTEM INC [FIBK] Filings
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]