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First Interstate BancSystem, Inc. Reports Increased Earnings Of 77% And Improved Credit Metrics

Stocks in this article: FIBK

These factors are not necessarily all of the factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made and we do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

FIRST INTERSTATE BANCSYSTEM, INC AND SUBSIDIARIES

Consolidated Financial Summary

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

 
      2013     2012

CONDENSED INCOME STATEMENTS

2nd Qtr     1st Qtr 4th Qtr     3rd Qtr     2nd Qtr
Net interest income $ 58,760 $ 59,277 $ 60,973 $ 61,005 $ 61,174
Net interest income on a fully-taxable equivalent ("FTE") basis 59,879 60,405 62,143 62,165 62,370
Provision for loan losses 375 500 8,000 9,500 12,000
Non-interest income:
Income from the origination and sale of loans 10,043 10,675 12,321 11,665 9,420
Other service charges, commissions and fees 8,977 8,256 8,774 8,774 8,254
Service charges on deposit accounts 4,323 4,068 4,401 4,395 4,455
Wealth management revenues 4,020 4,134 3,659 3,557 3,815
Investment securities gains (losses), net (12 ) 8 53 66 198
Other Income 2,228   1,678   1,427   1,725   1,520  
Total non-interest income 29,579 28,819 30,635 30,182 27,662
Non-interest expense:
Salaries and wages 23,470 23,405 23,288 23,341 21,640
Employee benefits 7,546 8,175 6,113 7,447 6,819
Occupancy, net 4,063 4,026 3,968 3,793 4,037
Furniture and equipment 3,163 3,052 3,301 3,231 3,189
Outsourced technology services 2,195 2,157 2,199 2,182 2,179
Other real estate owned (income) expense, net (915 ) 1,896 3,877 2,612 1,806
Other expenses 15,498   13,974   15,086   14,458   17,629  
Total non-interest expense 55,020   56,685   57,832   57,064   57,299  
Income before taxes 32,944 30,911 25,776 24,623 19,537
Income taxes 11,439   10,867   8,931   8,468   6,527  
Net income 21,505 20,044 16,845 16,155 13,010
Preferred stock dividends     731   863   853  
Net income available to common shareholders $ 21,505   $ 20,044   $ 16,114   $ 15,292   $ 12,157  
 

PER COMMON SHARE DATA

Net income - basic $ 0.49 $ 0.46 $ 0.37 $ 0.36 $ 0.28
Net income - diluted 0.49 0.46 0.37 0.35 0.28
Cash dividend paid 0.13 0.25 0.12 0.12
Book value at quarter end 17.56 17.69 17.35 17.29 17.03
Tangible book value at quarter end* 13.25 13.35 12.97 12.90 12.63
 

OUTSTANDING COMMON SHARES

At period-end 43,835,881 43,614,942 43,290,323 43,252,383 43,228,750
Weighted average shares - basic 43,480,502 43,140,409 43,032,697 42,989,564 42,966,926
Weighted-average shares - diluted 43,908,287 43,428,382 43,198,076 43,120,077 43,060,204
 

SELECTED ANNUALIZED RATIOS

Return on average assets 1.17 % 1.08 % 0.88 % 0.86 % 0.71 %
Return on average common equity 11.08 10.68 8.55 8.22 6.69
Return on average tangible common equity* 14.63 14.23 11.45 11.07 9.04
Net FTE interest income to average earning assets 3.56 3.55 3.55 3.63 3.74
 
FIRST INTERSTATE BANCSYSTEM, INC AND SUBSIDIARIES

Consolidated Financial Summary - continued

(Unaudited, $ in thousands)

 
      2013     2012

BALANCE SHEET SUMMARIES

Jun 30     Mar 31 Dec 31     Sep 30     Jun 30
Assets:
Cash and cash equivalents $ 368,217 $ 498,543 $ 801,332 $ 611,335 $ 536,653
Investment securities 2,138,539 2,221,595 2,203,481 2,166,727 2,080,909
Loans held for investment:
Commercial real estate 1,447,145 1,469,302 1,497,272 1,513,784 1,517,400
Construction real estate 337,211 330,886 334,529 340,074 351,654
Residential real estate 804,200 758,480 708,339 639,235 572,018
Agricultural real estate 176,799 172,522 177,244 175,395 171,087
Consumer 652,944 636,364 636,794 629,757 621,212
Commercial 680,751 688,844 688,753 672,100 720,010
Agricultural 121,530 111,411 113,627 135,467 138,115
Other 2,498 1,307 912 1,359 2,319
Mortgage loans held for sale 74,286   55,443   66,442   72,880   76,148  
Total loans 4,297,364 4,224,559 4,223,912 4,180,051 4,169,963
Less allowance for loan losses 98,528   97,904   100,511   99,006   102,794  
Net loans 4,198,836   4,126,655   4,123,401   4,081,045   4,067,169  
Premises and equipment, net 181,940 185,237 187,565 188,851 187,367
Goodwill and intangible assets (excluding mortgage servicing rights) 188,925 189,281 189,637 189,994 190,351
Company owned life insurance 77,602 77,158 76,729 76,371 75,849
Other real estate owned, net 22,782 32,470 32,571 39,971 53,817
Mortgage servicing rights, net 13,304 13,006 12,653 12,334 11,985
Other assets 101,363   95,372   94,392   94,524   101,076  
Total assets $ 7,291,508   $ 7,439,317   $ 7,721,761   $ 7,461,152   $ 7,305,176  
 
Liabilities and stockholders' equity:
Deposits:
Non-interest bearing $ 1,393,732 $ 1,406,892 $ 1,495,309 $ 1,443,773 $ 1,337,777
Interest bearing 4,536,600   4,621,453   4,745,102   4,591,959   4,563,602  
Total deposits 5,930,332   6,028,345   6,240,411   6,035,732   5,901,379  
Securities sold under repurchase agreements 421,314 467,205 505,785 460,805 455,993
Accounts payable, accrued expenses and other liabilities 50,292 52,767 54,742 47,098 41,811
Long-term debt 37,139 37,150 37,160 37,170 37,181
Preferred stock pending redemption 50,000
Subordinated debentures held by subsidiary trusts 82,477   82,477   82,477   82,477   82,477  
Total liabilities 6,521,554   6,667,944   6,970,575   6,663,282   6,518,841  
Stockholders' equity:
Preferred stock 50,000 50,000
Common stock 279,232 274,929 271,335 270,553 269,698
Retained earnings 499,761 483,904 463,860 458,506 448,372
Accumulated other comprehensive income (9,039 ) 12,540   15,991   18,811   18,265  
Total stockholders' equity 769,954   771,373   751,186   797,870   786,335  
Total liabilities and stockholders' equity $ 7,291,508   $ 7,439,317   $ 7,721,761   $ 7,461,152   $ 7,305,176  
 

CONSOLIDATED CAPITAL RATIOS

Total risk-based capital 16.29 %

**

15.91 % 15.59 % 16.52 % 16.20 %
Tier 1 risk-based capital 14.45

**

14.07 13.60 14.53 14.22
Tier 1 common capital to total risk-weighted assets 12.83

**

12.41 11.94 11.81 11.51
Leverage Ratio 9.73

**

9.24 8.81 9.56 9.54
Tangible common stockholders' equity to tangible assets* 8.18 8.03 7.46 7.67 7.67
 

FIRST INTERSTATE BANCSYSTEM, INC AND SUBSIDIARIES

Consolidated Financial Summary - continued

(Unaudited, $ in thousands)

 
      2013     2012

ASSET QUALITY

Jun 30     Mar 31     Dec 31     Sep 30     Jun 30
Allowance for loan losses $ 98,528 $ 97,904 $ 100,511 $ 99,006 $ 102,794
As a percentage of period-end loans 2.29 % 2.32 % 2.38 % 2.37 % 2.47 %
 
Net charge-offs during quarter $ (249 ) $ 3,107 $ 6,495 $ 13,288 $ 25,108
Annualized as a percentage of average loans (0.02 )% 0.30 % 0.62 % 1.26 % 2.43 %
 
Non-performing assets:
Non-accrual loans $ 103,729 $ 98,594 $ 107,799 $ 122,931 $ 129,923
Accruing loans past due 90 days or more

1,742

  1,941   2,277   4,339   6,451  
Total non-performing loans

105,471

100,535 110,076 127,270 136,374
OREO 22,782   32,470   32,571   39,971   53,817  
Total non-performing assets

128,253

133,005 142,647 167,241 190,191
As a percentage of:
Total loans and OREO 2.97 % 3.12 % 3.35 % 3.96 % 4.50 %
Total assets 1.76 % 1.79 % 1.85 % 2.24 % 2.60 %
 
                  Accruing            
Allowance Loans 30-89 Non- Non-
Provision for Net Charge- for Loan Days Past Accruing Performing Performing

ASSET QUALITY TRENDS

Loan Losses offs Losses Due TDRs Loans Assets
Q2 2010 $ 19,500 $ 11,521 $ 114,328 $ 99,334 $ 10,588 $ 147,525 $ 189,863
Q3 2010 18,000 12,092 120,236 47,966 26,630 175,378 210,674
Q4 2010 17,500 17,256 120,480 57,011 13,490 197,194 230,822
Q1 2011 15,000 11,034 124,446 68,021 33,344 216,534 248,529
Q2 2011 15,400 15,267 124,579 70,145 31,611 231,856 260,179
Q3 2011 14,000 18,276 120,303 62,165 35,616 226,962 252,042
Q4 2011 13,751 21,473 112,581 75,603 37,376 204,094 241,546
Q1 2012 11,250 7,929 115,902 58,531 36,838 185,927 230,683
Q2 2012 12,000 25,108 102,794 55,074 35,959 136,374 190,191
Q3 2012 9,500 13,288 99,006 48,277 35,428 127,270 167,241
Q4 2012 8,000 6,495 100,511 34,602 31,932 110,076 142,647
Q1 2013 500 3,107 97,904 41,924 35,787 100,535 133,005
Q2 2013 375 (249 ) 98,528 39,408 23,406 105,471 128,253
 

CRITICIZED LOANS

      Special Mention     Substandard     Doubtful     Total
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
Q2 2012 220,509 243,916 81,473 545,898
Q3 2012 223,306 229,826 66,179 519,311
Q4 2012 209,933 215,188 42,459 467,580
Q1 2013 197,645 197,095 43,825 438,565
Q2 2013 192,390 161,786 52,266 406,442
 

**Preliminary estimate - may be subject to change.

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