First Interstate BancSystem (FIBK) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $55.5 million ($0.54 per share), down from $60.0 million in Q2 2024 and $72.7 million in Q3 2023, mainly due to higher credit loss provisions and lower net interest income.

• James A. Reuter appointed as President and CEO, effective November 1, 2024; $3.8 million in CEO transition expenses recorded.

• Dividend of $0.47 per share declared, yielding 6.3% annualized.

• Asset quality remained stable overall, though non-performing loans and assets increased, driven by metro office and a large commercial loan.

• The company operates 299 banking offices across 14 states, focusing on community banking and a diversified deposit base.

Financial highlights

• Net interest income for Q3 2024 was $205.5 million, up 1.9% sequentially but down 3.8% year-over-year.

• Net interest margin increased to 3.01% from 2.97% in Q2 2024; adjusted NIM (FTE) was 2.97%.

• Non-interest income reached $46.4 million, up 3% quarter over quarter and 10.5% year-over-year, including a $2.6 million branch sale gain.

• Non-interest expense was $159.4 million, up $2.5 million sequentially but down $1.7 million year-over-year; included $3.8 million CEO transition costs.

• Provision for credit losses was $19.8 million, up from $9.0 million in Q2 2024; net charge-offs were $27.4 million, mainly from two metro office loans.

Outlook and guidance

• Net interest margin expected to exceed 3% in Q4, with sequential margin expansion anticipated into 2025.

• Q4 net interest income projected to rise 1–2% over Q3, with flat to modestly lower loans and deposits through year-end.

• Q4 non-interest income expected to be flat, excluding the Q3 branch sale gain; non-interest expense to rise 2–3% over Q3, excluding CEO transition costs.

• Net charge-off guidance for Q4 is 20–25 basis points, excluding a large C&I credit.

• Management expects continued profitability expansion into 2025, citing improved core operating metrics and expense discipline.