First Interstate BancSystem (FIBK) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $50.2 million ($0.49 per share), down from $52.1 million in Q4 2024 and $58.4 million in Q1 2024, primarily due to higher credit loss provisions.

• Net interest margin rose to 3.22% (up 1 basis point sequentially and 28 basis points year-over-year); adjusted FTE NIM was 3.14%.

• Loans decreased by $467.6 million and deposits by $282.8 million from Q4 2024, reflecting lower demand and seasonality.

• Asset quality weakened as criticized loans rose 32.7% to $1,026.1 million and non-performing assets increased 36.3% to $198.4 million, mainly in commercial real estate.

• Announced exit from 12 branches in Arizona and Kansas, reallocating resources to stronger markets.

Financial highlights

• Net interest income was $205.0 million, up year-over-year, with net interest margin at 3.22%; adjusted FTE NIM rose 6 basis points to 3.14%.

• Non-interest income was $42.0 million, down $5 million sequentially and flat year-over-year; payment services comprised 41% of noninterest revenue.

• Non-interest expenses were $160.6 million, including $1.4 million in severance and $600,000 in business termination costs.

• Provision for credit losses was $20 million, with allowance for credit losses at 1.24% of loans and net charge-offs at $9 million.

• Dividend declared at $0.47 per share (6.1% yield); CET1 ratio improved 37 bps to 12.53%.

Outlook and guidance

• Expect further balance sheet contraction in Q2 due to intentional loan runoff and low demand; loans projected to decline 2–4% in 2025 excluding indirect lending runoff.

• Net interest income projected to rise 3.5%–5.5% for full-year 2025 over 2024, with sequential quarterly improvement.

• Non-interest expense guidance for 2025 is a 2%–4% increase, excluding branch sale impact.

• Modest deposit growth forecast for 2025; DDA balances expected to remain stable at 25%–26% of deposits.

• Net charge-offs forecasted between 20–30 basis points for the year.