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First Interstate BancSystem, Inc. Reports First Quarter 2012 Results

Non-performing loans decreased 7.7% as of March 31, 2012 compared to December 31, 2011. Decreases in non-accrual loans, the largest component of non-performing loans, were primarily due to the movement of loans out of the loan portfolio due to charge-off or foreclosure.

During first quarter 2012, the Company recorded additions to OREO of $14 million. Approximately 68% of OREO additions during first quarter 2012 were attributable to the loans of four real estate borrowers. First quarter 2012 OREO additions were partially offset by write downs of the fair value of OREO properties of $578 thousand and sales of OREO with a net book value of $6 million at a slight loss.

Fluctuations in the provision for loan losses result from management's assessment of the adequacy of the Company's allowance for loan losses. Decreases in the provision for loan losses during first quarter 2012, as compared to the fourth and first quarters of 2011, are reflective of continued improvement and stabilization of credit quality as evidenced by declining levels of non-performing and criticized loans.

CREDIT QUALITY TRENDS

(Unaudited; $ in thousands)

                                         
Accruing Loans
Provision for Allowance for 30-89 Days Past Non-Performing Non-Performing
                Loan Losses       Net Charge-offs       Loan Losses       Due       Loans       Assets
Q1 2009 $ 9,600 $ 4,693 $ 92,223 $ 98,980 $ 103,653 $ 122,300
Q2 2009 11,700 5,528 98,395 88,632 135,484 167,273
Q3 2009 10,500 7,147 101,748 91,956 125,083 156,958
Q4 2009 13,500 12,218 103,030 63,878 124,678 163,078
Q1 2010 11,900 8,581 106,349 62,675 133,042 177,022
Q2 2010 19,500 11,521 114,328 99,334 158,113 200,451
Q3 2010 18,000 12,092 120,236 47,966 202,008 237,304
Q4 2010 17,500 17,256 120,480 57,011 210,684 244,312
Q1 2011 15,000 11,034 124,446 68,021 249,878 281,873
Q2 2011 15,400 15,267 124,579 70,145 263,467 291,790
Q3 2011 14,000 18,276 120,303 62,165 262,578 287,658
Q4 2011 13,751 21,473 112,581 75,603 241,470 278,922
Q1 2012               11,250         7,929         115,902         58,531         222,765         267,521
 

CRITICIZED LOANS

                               

(Unaudited; $ in thousands)

 
Other Assets
Especially
                Mentioned       Substandard       Doubtful       Total
Q1 2009 $ 163,402 $ 231,861 $ 40,356 $ 435,619
Q2 2009 230,833 242,751 48,326 521,910
Q3 2009 239,320 271,487 60,725 571,532
Q4 2009 279,294 271,324 69,603 620,221
Q1 2010 312,441 311,866 64,113 688,420
Q2 2010 319,130 337,758 92,249 749,137
Q3 2010 340,075 340,973 116,003 797,051
Q4 2010 305,925 303,653 133,353 742,931
Q1 2011 293,899 299,072 135,862 728,833
Q2 2011 268,450 309,029 149,964 727,443
Q3 2011 261,501 305,145 134,367 701,013
Q4 2011 240,903 269,794 120,165 630,862
Q1 2012               242,071         276,165         93,596         611,832
 

LOANS

(Unaudited; $ in thousands)

                                 
Sequential Year Over
March 31, December 31, March 31, Quarter Year
          2012       2011       2011       % Change           % Change  
Real estate loans:
Commercial $ 1,533,624 $ 1,553,155 $ 1,553,750 -1.3 % -1.3 %
Construction:
Land acquisition & development 272,874 278,613 319,573 -2.1 % -14.6 %
Residential 50,332 61,106 78,572 -17.6 % -35.9 %
Commercial         65,196         61,054         95,623        

6.8

%

 

      -31.8 %
Total construction loans         388,402         400,773         493,768         -3.1 %         -21.3 %
Residential 562,588 571,943 561,420 -1.6 %

0.2

%

Agricultural         171,685         175,302         181,513         -2.1 %         -5.4 %
Total real estate loans         2,656,299         2,701,173         2,790,451         -1.7 %         -4.8 %
Consumer:
Indirect consumer loans 407,389 407,651 411,908 -0.1 % -1.1 %
Other consumer loans 142,144 147,487 155,100 -3.6 % -8.4 %
Credit card loans         56,540         60,933         58,075         -7.2 %         -2.6 %
Total consumer loans         606,073         616,071         625,083         -1.6 %         -3.0 %
Commercial 708,397 693,261 703,837

2.2

%

 

0.6

%

Agricultural 128,599 119,710 121,571

7.4

%

 

5.8

%

Other loans, including overdrafts         568         2,813         1,830         -79.8 %         -69.0 %
Loans held for investment         4,099,936         4,133,028         4,242,772         -0.8 %         -3.4 %
Mortgage loans held for sale         58,680         53,521         20,992        

9.6

%

 

     

179.5

%

Total loans         $ 4,158,616         $ 4,186,549         $ 4,263,764         -0.7 %         -2.5 %
 

Total loans decreased as of March 31, 2012, as compared to December 31, 2011 and March 31, 2011, with all major categories of loans showing decreases with the exception of commercial and agricultural loans. Declines in total loans during first quarter 2012 were primarily due to the continued combined effects of movement of lower quality loans out of the loan portfolio through charge-off or foreclosure and weak loan demand.

DEPOSITS

(Unaudited; $ in thousands)

                                             
Sequential Year Over
March 31, December 31, March 31, Quarter Year
                2012         2011         2011         % Change           % Change  
Non-interest bearing demand $ 1,284,823 $ 1,271,709 $ 1,110,940 1.0 %

15.7

%

Interest bearing:
Demand 1,618,174 1,306,509 1,259,105 23.9 %

28.5

%

Savings 1,480,435 1,691,413 1,742,958

-12.5

%

-15.1 %
Time, $100 and over 671,014 681,047 825,585

-1.5

%

-18.7 %
Time, other               856,388           876,293           992,596          

-2.3

%

        -13.7 %
Total interest bearing               4,626,011           4,555,262           4,820,244           1.6 %         -4.0 %
Total deposits               $ 5,910,834           $ 5,826,971           $ 5,931,184           1.4 %         -0.3 %
 

Total deposits increased as of March 31, 2012, as compared to December 31, 2011 and remained flat as compared to March 31, 2011. As a result of a regulatory change allowing businesses to receive interest on checking accounts, the Company discontinued its savings sweep product resulting in a shift of approximately $300 million from savings deposits into demand deposits during first quarter 2012. During first quarter 2012, the Company continued to experience a shift in the mix of deposits away from time deposits to demand deposits. Management attributes this shift to the effects of a prolonged low interest rate environment and corresponding hesitation of customers to invest their funds for extended periods at such low interest rates.

CAPITAL

(Unaudited, $ in thousands, except per share data)

                                 
Sequential Year Over
March 31, December 31, March 31, Quarter Year
    2012         2011         2011         % Change         % Change
Preferred stockholders' equity $ 50,000 $ 50,000 $ 50,000 0.0 % 0.0 %
Common stockholders' equity 709,781 701,986 682,049 1.1 % 4.1 %
Accumulated other comprehensive income, net   19,494           19,034           9,648           2.4 %         102.1 %
Total stockholders' equity   $ 779,275           $ 771,020           $ 741,697           1.1 %         5.1 %
Book value per common share $ 16.88 $ 16.77 $ 16.10 0.7 % 4.8 %
Tangible book value per common share* $ 12.47 $ 12.33 $ 11.63 1.1 % 7.2 %

Net tangible book value per common share*

  $ 13.87           $ 13.74           $ 13.04           0.9 %         6.4 %
Weighted average common shares outstanding for basic earnings per common share computation   42,873,769           42,783,770           42,689,390           0.2 %         0.4 %
Weighted average common shares outstanding for diluted earnings per common share computation   42,982,543           42,847,772           42,859,981           0.3 %         0.3 %
 

* See Non-GAAP Financial Measures included herein for a discussion of tangible and net tangible book value per common share.

 

CAPITAL RATIOS

                         

(Unaudited)

 
March 31, December 31, March 31,
              2012         2011         2011
Tangible common stockholders' equity to tangible assets* 7.48 % 7.43 % 6.90 %
Net tangible common stockholders' equity to tangible assets* 8.32 % 8.28 % 7.74 %
Tier 1 common capital to total risk weighted assets 11.35 % ** 11.04 % 10.40 %
Leverage ratio 10.01 % ** 9.84 % 9.34 %
Tier 1 risk-based capital 14.90 % ** 14.55 % 13.85 %
Total risk-based capital             16.89 % **       16.54 %         15.83 %
 

* See Non-GAAP Financial Measures included herein for a discussion of tangible and net tangible common stockholders' equity to tangible assets.

** Preliminary estimate - may be subject to change.

 

As of March 31, 2012, the Company had capital levels that, in all cases, exceeded the “well capitalized” requirements under all regulatory capital guidelines.

Stock quotes in this article: FIBK 

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