|
| | | | |
| For Immediate Release | | |
| Contact: | | Marcy Mutch | | NASDAQ: FIBK |
| | | Investor Relations Officer First Interstate BancSystem, Inc. (406) 255-5322 investor.relations@fib.com | | www.FIBK.com |
First Interstate BancSystem, Inc. Reports First Quarter 2013 Results
Billings, MT - April 22, 2013 - First Interstate BancSystem, Inc. reports first quarter 2013 net income available to common shareholders of $20.0 million, or $0.46 per diluted share, as compared to $16.1 million, or $0.37 per diluted share, for fourth quarter 2012, and $11.4 million, or $0.26 per diluted share, for first quarter 2012.
Significant financial statement items for the first quarter of 2013 include:
| |
| • | Provisions for loan losses were $500 thousand for the three months ended March 31, 2013, compared to $8.0 million for the three months ended December 31, 2012 and $11.3 million for the three months ended March 31, 2012. |
| |
| • | Non-performing assets declined to 1.79% of total assets as of March 31, 2013, compared to 1.85% of total assets as of December 31, 2012 and 3.12% of total assets as of March 31, 2012. |
RESULTS SUMMARY
“We had a solid first quarter driven by continued strength in residential mortgage lending, growth in wealth management revenues and a stable net interest margin,” said Ed Garding, President and Chief Executive Officer of First Interstate BancSystem, Inc. “We also continue to see steady improvement in our asset quality, with notable declines in criticized loans, non-performing assets and net charge-offs. The improvement in asset quality has significantly reduced our credit costs and enhanced our overall level of profitability," Garding continued.
NET INTEREST MARGIN
The Company's net interest margin ratio was 3.55% during first quarter 2013. The Company recorded recoveries of charged-off interest of $620 thousand during first quarter 2013 and $425 thousand during fourth quarter 2012. Exclusive of recoveries of charged-off interest, the Company's net interest margin ratio was 3.51% during first quarter 2013, as compared to 3.53% during fourth quarter 2012 and 3.72% during first quarter 2012. Declines in yields earned on the Company's loan and investment portfolios during first quarter 2013 were partially offset by increases in average outstanding loans and investment securities, reductions in the cost of interest bearing liabilities and, compared to fourth quarter 2012, lower average outstanding interest bearing deposits in banks. Also offsetting the impact of lower asset yields was an approximate 150 basis point decrease in the cost of the Company's junior subordinated debentures during first quarter 2013, as compared to fourth quarter 2012 and first quarter 2012, due to the contractual repricing of $46 million of junior subordinated debentures from fixed interest rates to variable rates priced from 2.40% to 2.75% over LIBOR.
NON-INTEREST INCOME
Non-interest income for first quarter 2013 was $28.8 million, as compared to $30.6 million for fourth quarter 2012 and $26.4 million for first quarter 2012. Fluctuations in non-interest income occurred primarily in income from the origination and sale of loans. Income from the origination and sale of loans was $10.7 million during first quarter 2013, as compared to $12.3 million during fourth quarter 2012 and $8.4 million during first quarter 2012. During first quarter 2013, the Company originated loans for purchased homes of approximately $105 million, the highest first quarter level in the Company's history and a 25% increase from first quarter 2012. "We are encouraged by the level of loan originations for purchased homes during
first quarter," stated Mr. Garding. "Loans originated for purchased homes are not as sensitive to changes in market interest rates as loans to refinance existing mortgages and are reflective of improvement in housing markets and general economic conditions in the Company's market areas," Garding further noted.
Other service charges, commissions and fees decreased to $8.3 million during first quarter 2013, as compared to $8.8 million during fourth quarter 2012, primarily due to lower debit and credit card transaction volumes that typically occur during the first quarter of the year.
Wealth management revenues increased to $4.1 million during first quarter 2013, as compared to $3.7 million during fourth quarter 2012 and $3.3 million during first quarter 2012, due to the addition of new wealth management customers combined with increases in the market values of new and existing assets under trust management.
NON-INTEREST EXPENSE
Salaries and wages expense increased to $23.4 million during first quarter 2013, as compared to $23.3 million during fourth quarter 2012 and $21.6 million during first quarter 2012. The increase from the same period in the prior year was primarily due to higher incentive compensation accruals reflective of the Company's improved financial performance. Increases in incentive compensation accruals during first quarter 2013, as compared to fourth quarter 2012, were offset by a reduction in salaries expense due to a slight decrease in full-time equivalent employees.
Employee benefits expense increased to $8.2 million during first quarter 2013, as compared to $6.1 million during fourth quarter 2012, and decreased from $9.0 million during first quarter 2012. During fourth quarter 2012, the Company reversed $1.1 million of previously accrued group health insurance expense to reflect favorable claims experience in 2012. Also contributing to the increase in employee benefits expense during first quarter 2013, as compared to fourth quarter 2012, were increases in payroll taxes and stock-based compensation expense. Decreases in employee benefits expense during first quarter 2013, as compared to first quarter 2012, were primarily due to lower discretionary profit sharing accruals.
Variations in net OREO expense between periods were primarily due to fluctuations in write-downs of the estimated fair value of OREO properties, net gains and losses recorded on the sales of OREO properties and carrying costs and/or operating expenses of OREO properties. First quarter 2013 net OREO expense included $411 thousand of net operating expenses, $2.3 million of fair value write-downs and net gains of $820 thousand on the sale of OREO properties, as compared to $883 thousand of net operating expenses, $3.3 million of fair value write-downs and net gains of $273 thousand during fourth quarter 2012, and $453 thousand of net operating expenses, $578 thousand of fair value write-downs and net losses of $74 thousand during first quarter 2012.
Other expenses decreased during first quarter 2013, as compared to fourth quarter 2012, primarily due to lower advertising expense resulting from differences in the timing of advertising campaigns. Other expenses decreased during first quarter 2013, as compared to first quarter 2012, due to the first quarter 2012 accrual of $3.0 million of collection and settlement costs related to one borrower.
BALANCE SHEET
Total loans remained flat at $4,225 million as of March 31, 2013, compared to $4,224 million as of December 31, 2012 and increased slightly from $4,159 million as of March 31, 2012. All major loan categories decreased or remained flat compared to prior periods with the exception of residential real estate and consumer loans. Residential real estate loans increased to $758 million as of March 31, 2013, from $708 million as of December 31, 2012 and $563 million as of March 31, 2012, due to retention of certain residential loans with contractual terms of fifteen years or less.
Consumer loans grew to $636 million as of March 31, 2013, from $606 million as of March 31, 2012, and remained relatively stable as compared to $637 million as of December 31, 2012. Growth in consumer loans occurred in indirect loans, which increased to $444 million as of March 31, 2013, from $438 million as of December 31, 2012 and $407 million as of March 31, 2012 due to expansion of the Company's indirect lending program within its existing market areas and competitive pricing.
The most significant decreases in total loans as of March 31, 2013, as compared to December 31, 2012 and March 31, 2012, occurred in commercial real estate and real estate construction loans. Commercial real estate loans decreased $28 million, or 1.9%, to $1,469 million as of March 31, 2013, from $1,497 million as of December 31, 2012 and $64 million, or 4.2%, from $1,534 million as of March 31, 2012, primarily due to slow loan growth combined with the movement of lower quality loans out of the portfolio through charge-off, pay-off and foreclosure.
Real estate construction loans decreased to $331 million as of March 31, 2013, from $335 million as of December 31, 2012 and $388 million as of March 31, 2012. Decreases in real estate construction loans occurred primarily in land acquisition and development loans and were largely due to movement of lower quality loans out of the portfolio through charge-off or foreclosure. In recent quarters, real estate construction loans outstanding have begun to stabilize due to increased housing construction in the Company's market areas.
Total deposits decreased to $6,028 million as of March 31, 2013, from $6,240 million December 31, 2012, and increased from $5,911 million as of March 31, 2012. Management attributes the December 31, 2012 peak in total deposits to changes in consumer behavior due to economic and other uncertainties in existence at year end, including changes in tax laws expected to become effective in 2013. During first quarter 2013, there was a slight shift in the mix of deposits away from demand and time deposits to savings deposits.
The Company redeemed $50 million of its outstanding preferred stock on January 18, 2013 at an aggregate redemption price of $50.2 million, which represented par value plus unpaid and accrued dividends. The preferred stock was reclassified from stockholders' equity to a liability upon notice of the redemption to preferred stockholders in December 2012.
ASSET QUALITY
Non-performing loans decreased to $101 million as of March 31, 2013, from $110 million as of December 31, 2012 and $186 million as of March 31, 2012. Decreases in non-performing loans between periods were primarily due to the movement of non-accrual loans out of the loan portfolio through charge-off or foreclosure. During first quarter 2013, the Company charged-off loans of $6.0 million and transferred loans of $5.3 million to OREO, as compared to charge-offs of $10.3 million and transfers to OREO of $6.7 million during fourth quarter 2012, and charge-offs of $9.1 million and transfers to OREO of $14.0 million during first quarter 2012.
The provision for loan losses decreased to $500 thousand during first quarter 2013, as compared to $8.0 million during fourth quarter 2012 and $11.3 million during first quarter 2012. Decreases in the provision for loan losses during first quarter 2013, as compared to fourth quarter 2012 and first quarter 2012, are reflective of improvement in local and national economic trends, continued improvement in and stabilization of credit quality as evidenced by declining levels of non-performing and criticized loans and a high level of recoveries of previously charged-off loans. As of March 31, 2013, non-performing assets were at their lowest level since first quarter 2009 and total criticized assets were at their lowest level since second quarter 2009. In addition, during first quarter 2013, the Company recovered $2.9 million of previously charged-off loans.
Beginning in 2013, the Company no longer presents accruing loans modified in troubled debt restructurings as non-performing loans. While still considered impaired under applicable accounting guidance, these loans are performing as agreed under their modified terms and management expects performance to continue. Prior period balances and ratios have been adjusted to reflect this change.
First Quarter 2013 Conference Call for Investors
First Interstate BancSystem, Inc. will host a conference call to discuss first quarter 2013 results at 11:00 a.m. Eastern Time (9:00 a.m. MT) on Tuesday, April 23, 2013. The conference call will be accessible by telephone and through the Internet. Participants may join the call by dialing 1-877-317-6016 or by logging on to www.FIBK.com. The call will be recorded and made available for replay after 1:00 p.m. Eastern Time (11:00 a.m. MT) on April 23, 2013 through May 23, 2013 by dialing 1-877-344-7529 (using conference ID 10026939). The call will also be archived on our website, www.FIBK.com, for one year.
About First Interstate BancSystem, Inc.
First Interstate BancSystem, Inc. is a financial and bank holding company incorporated in 1971 and headquartered in Billings, Montana. The Company operates 76 banking office, including detached drive-up facilities, in 42 communities in Montana, Wyoming and western South Dakota. Through First Interstate Bank, the Company delivers a comprehensive range of banking products and services to individuals, businesses, municipalities and other entities throughout the Company's market areas.
Cautionary Note Regarding Forward-Looking Statements and Factors that Could Affect Future Results
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are identified as those that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may” or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. The following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this press release: continuing or worsening economic conditions, adverse economic conditions affecting Montana, Wyoming and western South Dakota, credit losses, concentrations of real estate loans, commercial loan risk, adequacy of the allowance for loan losses, impairment of goodwill, changes in interest rates, access to low-cost funding sources, increases in deposit insurance premiums, repurchases of mortgage loans from or reimbursements to investors due to contractual or warranty breach, inability to grow business, governmental regulation and changes in regulatory, tax and accounting rules and interpretations, sweeping changes in regulation of financial institutions due to passage of the Dodd-Frank Act, changes in or noncompliance with governmental regulations, effects of recent legislative and regulatory efforts to stabilize financial markets, dependence on the Company’s management team, ability to attract and retain qualified employees, failure of technology, reliance on external vendors, inability to meet liquidity requirements, lack of acquisition candidates, failure to manage growth, competition, inability to manage risks in turbulent and dynamic market conditions, ineffective internal operational controls, environmental remediation and other costs, litigation pertaining to fiduciary responsibilities, failure to effectively implement technology-driven products and services, capital required to support the Company’s bank subsidiary, soundness of other financial institutions, impact of proposed Basel III capital standards for U.S. banks, inability of our bank subsidiary to pay dividends, implementation of new lines of business or new product or service offerings, change in dividend policy, lack of public market for our Class A common stock, volatility of Class A common stock, voting control of Class B stockholders, decline in market price of Class A common stock, dilution as a result of future equity issuances, uninsured nature of any investment in Class A common stock, anti-takeover provisions, controlled company status and subordination of common stock to Company debt.
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 | | 1st Qtr | | 4th Qtr | | 3rd Qtr | | 2nd Qtr | | 1st Qtr |
| Net interest income | | $ | 59,277 |
| | $ | 60,973 |
| | $ | 61,005 |
| | $ | 61,174 |
| | $ | 60,634 |
|
| Net interest income on a fully-taxable equivalent ("FTE") basis | | 60,405 |
| | 62,143 |
| | 62,165 |
| | 62,370 |
| | 61,793 |
|
| Provision for loan losses | | 500 |
| | 8,000 |
| | 9,500 |
| | 12,000 |
| | 11,250 |
|
| Non-interest income: | | | | | | | | | | |
| Income from the origination and sale of loans | | 10,675 |
| | 12,321 |
| | 11,665 |
| | 9,420 |
| | 8,384 |
|
| Other service charges, commissions and fees | | 8,256 |
| | 8,774 |
| | 8,774 |
| | 8,254 |
| | 8,424 |
|
| Wealth management revenues | | 4,134 |
| | 3,659 |
| | 3,557 |
| | 3,815 |
| | 3,283 |
|
| Service charges on deposit accounts | | 4,068 |
| | 4,401 |
| | 4,395 |
| | 4,455 |
| | 4,161 |
|
| Investment securities gains, net | | 8 |
| | 53 |
| | 66 |
| | 198 |
| | 31 |
|
| Other Income | | 1,678 |
| | 1,427 |
| | 1,725 |
| | 1,520 |
| | 2,099 |
|
| Total non-interest income | | 28,819 |
| | 30,635 |
| | 30,182 |
| | 27,662 |
| | 26,382 |
|
| Non-interest expense: | | | | | | | | | | |
| Salaries and wages | | 23,405 |
| | 23,288 |
| | 23,341 |
| | 21,640 |
| | 21,564 |
|
| Employee benefits | | 8,175 |
| | 6,113 |
| | 7,447 |
| | 6,819 |
| | 8,966 |
|
| Occupancy, net | | 4,026 |
| | 3,968 |
| | 3,793 |
| | 4,037 |
| | 3,988 |
|
| Furniture and equipment | | 3,052 |
| | 3,301 |
| | 3,231 |
| | 3,189 |
| | 3,138 |
|
| Outsourced technology services | | 2,157 |
| | 2,199 |
| | 2,182 |
| | 2,179 |
| | 2,266 |
|
| Other real estate owned ("OREO") expense, net | | 1,896 |
| | 3,877 |
| | 2,612 |
| | 1,806 |
| | 1,105 |
|
| Other expenses | | 13,974 |
| | 15,086 |
| | 14,458 |
| | 17,629 |
| | 16,413 |
|
| Total non-interest expense | | 56,685 |
| | 57,832 |
| | 57,064 |
| | 57,299 |
| | 57,440 |
|
| Income before taxes | | 30,911 |
| | 25,776 |
| | 24,623 |
| | 19,537 |
| | 18,326 |
|
| Income taxes | | 10,867 |
| | 8,931 |
| | 8,468 |
| | 6,527 |
| | 6,112 |
|
| Net income | | 20,044 |
| | 16,845 |
| | 16,155 |
| | 13,010 |
| | 12,214 |
|
| Preferred stock dividends | | — |
| | 731 |
| | 863 |
| | 853 |
| | 853 |
|
| Net income available to common shareholders | | $ | 20,044 |
| | $ | 16,114 |
| | $ | 15,292 |
| | $ | 12,157 |
| | $ | 11,361 |
|
| | | | | | | | | | | |
| PER COMMON SHARE DATA | | | | | | | | | | |
| Net income - basic | | $ | 0.46 |
| | $ | 0.37 |
| | $ | 0.36 |
| | $ | 0.28 |
| | $ | 0.26 |
|
| Net income - diluted | | 0.46 |
| | 0.37 |
| | 0.35 |
| | 0.28 |
| | 0.26 |
|
| Cash dividend paid | | — |
| | 0.25 |
| | 0.12 |
| | 0.12 |
| | 0.12 |
|
| Book value at quarter end | | 17.69 |
| | 17.35 |
| | 17.29 |
| | 17.03 |
| | 16.88 |
|
| Tangible book value at quarter end* | | 13.35 |
| | 12.97 |
| | 12.90 |
| | 12.63 |
| | 12.47 |
|
| | | | | | | | | | | |
| OUTSTANDING COMMON SHARES | | | | | | | | | | |
| At period-end | | 43,614,942 |
| | 43,290,323 |
| | 43,252,383 |
| | 43,228,750 |
| | 43,190,975 |
|
| Weighted average shares - basic | | 43,140,409 |
| | 43,032,697 |
| | 42,989,564 |
| | 42,966,926 |
| | 42,873,769 |
|
| Weighted-average shares - diluted | | 43,428,382 |
| | 43,198,076 |
| | 43,120,077 |
| | 43,060,204 |
| | 42,982,543 |
|
| | | | | | | | | | | |
| SELECTED ANNUALIZED RATIOS | | | | | | | | | | |
| Return on average assets | | 1.08 | % | | 0.88 | % | | 0.86 | % | | 0.71 | % | | 0.67 | % |
| Return on average common equity | | 10.68 |
| | 8.55 |
| | 8.22 |
| | 6.69 |
| | 6.32 |
|
| Return on average tangible common equity* | | 14.23 |
| | 11.45 |
| | 11.07 |
| | 9.04 |
| | 8.59 |
|
| Net FTE interest income to average earning assets | | 3.55 |
| | 3.55 |
| | 3.63 |
| | 3.74 |
| | 3.72 |
|
| | | | | | | | | | | |
FIRST INTERSTATE BANCSYSTEM, INC AND SUBSIDIARIES
Consolidated Financial Summary - continued
(Unaudited, $ in thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 2013 | | 2012 |
| BALANCE SHEET SUMMARIES | | Mar 31 | | Dec 31 | | Sep 30 | | Jun 30 | | Mar 31 |
| Assets: | | | | | | | | | | |
| Cash and cash equivalents | | $ | 498,543 |
| | $ | 801,332 |
| | $ | 611,335 |
| | $ | 536,653 |
| | $ | 622,924 |
|
| Investment securities | | 2,221,595 |
| | 2,203,481 |
| | 2,166,727 |
| | 2,080,909 |
| | 2,113,506 |
|
| Loans held for investment: | | | | | | | | | | |
| Commercial real estate | | 1,469,302 |
| | 1,497,272 |
| | 1,513,784 |
| | 1,517,400 |
| | 1,533,624 |
|
| Construction real estate | | 330,886 |
| | 334,529 |
| | 340,074 |
| | 351,654 |
| | 388,402 |
|
| Residential real estate | | 758,480 |
| | 708,339 |
| | 639,235 |
| | 572,018 |
| | 562,588 |
|
| Agricultural real estate | | 172,522 |
| | 177,244 |
| | 175,395 |
| | 171,087 |
| | 171,685 |
|
| Consumer | | 636,364 |
| | 636,794 |
| | 629,757 |
| | 621,212 |
| | 606,073 |
|
| Commercial | | 688,844 |
| | 688,753 |
| | 672,100 |
| | 720,010 |
| | 708,397 |
|
| Agricultural | | 111,411 |
| | 113,627 |
| | 135,467 |
| | 138,115 |
| | 128,599 |
|
| Other | | 1,307 |
| | 912 |
| | 1,359 |
| | 2,319 |
| | 568 |
|
| Mortgage loans held for sale | | 55,443 |
| | 66,442 |
| | 72,880 |
| | 76,148 |
| | 58,680 |
|
| Total loans | | 4,224,559 |
| | 4,223,912 |
| | 4,180,051 |
| | 4,169,963 |
| | 4,158,616 |
|
| Less allowance for loan losses | | 97,904 |
| | 100,511 |
| | 99,006 |
| | 102,794 |
| | 115,902 |
|
| Net loans | | 4,126,655 |
| | 4,123,401 |
| | 4,081,045 |
| | 4,067,169 |
| | 4,042,714 |
|
| Premises and equipment, net | | 185,237 |
| | 187,565 |
| | 188,851 |
| | 187,367 |
| | 185,230 |
|
| Goodwill and intangible assets (excluding mortgage servicing rights) | | 189,281 |
| | 189,637 |
| | 189,994 |
| | 190,351 |
| | 190,708 |
|
| Company owned life insurance | | 77,158 |
| | 76,729 |
| | 76,371 |
| | 75,849 |
| | 75,342 |
|
| OREO, net | | 32,470 |
| | 32,571 |
| | 39,971 |
| | 53,817 |
| | 44,756 |
|
| Mortgage servicing rights, net | | 13,006 |
| | 12,653 |
| | 12,334 |
| | 11,985 |
| | 11,833 |
|
| Other assets | | 95,372 |
| | 94,392 |
| | 94,524 |
| | 101,076 |
| | 107,293 |
|
| Total assets | | $ | 7,439,317 |
| | $ | 7,721,761 |
| | $ | 7,461,152 |
| | $ | 7,305,176 |
| | $ | 7,394,306 |
|
| | | | |
|
| | | | | | |
| Liabilities and stockholders' equity: | | | |
|
| | | | | | |
| Deposits: | | | | | | | | | | |
| Non-interest bearing | | $ | 1,406,892 |
| | $ | 1,495,309 |
| | $ | 1,443,773 |
| | $ | 1,337,777 |
| | $ | 1,284,823 |
|
| Interest bearing | | 4,621,453 |
| | 4,745,102 |
| | 4,591,959 |
| | 4,563,602 |
| | 4,626,011 |
|
| Total deposits | | 6,028,345 |
| | 6,240,411 |
| | 6,035,732 |
| | 5,901,379 |
| | 5,910,834 |
|
| Securities sold under repurchase agreements | | 467,205 |
| | 505,785 |
| | 460,805 |
| | 455,993 |
| | 491,058 |
|
| Accounts payable, accrued expenses and other liabilities | | 52,767 |
| | 54,742 |
| | 47,098 |
| | 41,811 |
| | 52,233 |
|
| Long-term debt | | 37,150 |
| | 37,160 |
| | 37,170 |
| | 37,181 |
| | 37,191 |
|
| Preferred stock pending redemption | | — |
| | 50,000 |
| | — |
| | — |
| | — |
|
| Subordinated debentures held by subsidiary trusts | | 82,477 |
| | 82,477 |
| | 82,477 |
| | 82,477 |
| | 123,715 |
|
| Total liabilities | | 6,667,944 |
| | 6,970,575 |
| | 6,663,282 |
| | 6,518,841 |
| | 6,615,031 |
|
| Stockholders' equity: | | | | | | | | | | |
| Preferred stock | | — |
| | — |
| | 50,000 |
| | 50,000 |
| | 50,000 |
|
| Common stock | | 274,929 |
| | 271,335 |
| | 270,553 |
| | 269,698 |
| | 268,411 |
|
| Retained earnings | | 483,904 |
| | 463,860 |
| | 458,506 |
| | 448,372 |
| | 441,370 |
|
| Accumulated other comprehensive income | | 12,540 |
| | 15,991 |
| | 18,811 |
| | 18,265 |
| | 19,494 |
|
| Total stockholders' equity | | 771,373 |
| | 751,186 |
| | 797,870 |
| | 786,335 |
| | 779,275 |
|
| Total liabilities and stockholders' equity | | $ | 7,439,317 |
| | $ | 7,721,761 |
| | $ | 7,461,152 |
| | $ | 7,305,176 |
| | $ | 7,394,306 |
|
| | | | | | | | | | | |
| CONSOLIDATED CAPITAL RATIOS | | | | | | | | | | |
| Total risk-based capital | | 15.91 | % | s | 15.59 | % | | 16.52 | % | | 16.20 | % | | 16.89 | % |
| Tier 1 risk-based capital | | 14.07 |
| s | 13.60 |
| | 14.53 |
| | 14.22 |
| | 14.90 |
|
| Tier 1 common capital to total risk-weighted assets | | 12.41 |
| s | 11.94 |
| | 11.81 |
| | 11.51 |
| | 11.35 |
|
| Leverage Ratio | | 9.24 |
| s | 8.81 |
| | 9.56 |
| | 9.54 |
| | 10.01 |
|
| Tangible common stockholders' equity to tangible assets* | | 8.03 |
| | 7.46 |
| | 7.67 |
| | 7.67 |
| | 7.48 |
|
FIRST INTERSTATE BANCSYSTEM, INC AND SUBSIDIARIES
Consolidated Financial Summary - continued
(Unaudited, $ in thousands)
|
| | | | | | | | | | | | | | | | | | | | |
| | | 2013 | | 2012 |
| ASSET QUALITY | | Mar 31 | | Dec 31 | | Sep 30 | | Jun 30 | | Mar 31 |
| Allowance for loan losses | | $ | 97,904 |
| | $ | 100,511 |
| | $ | 99,006 |
| | $ | 102,794 |
| | $ | 115,902 |
|
| As a percentage of period-end loans | | 2.32 | % | | 2.38 | % | | 2.37 | % | | 2.47 | % | | 2.79 | % |
| | | | | | | | | | | |
| Net charge-offs during quarter | | $ | 3,107 |
| | $ | 6,495 |
| | $ | 13,288 |
| | $ | 25,108 |
| | $ | 7,929 |
|
| Annualized as a percentage of average loans | | 0.30 | % | | 0.62 | % | | 1.26 | % | | 2.43 | % | | 0.76 | % |
| | | | | | | | | | |
|
| Non-performing assets: | | | | | | | | | |
|
| Non-accrual loans | | $ | 98,594 |
| | $ | 107,799 |
| | $ | 122,931 |
| | $ | 129,923 |
| | $ | 180,910 |
|
| Accruing loans past due 90 days or more | | 1,941 |
| | 2,277 |
| | 4,339 |
| | 6,451 |
| | 5,017 |
|
| Total non-performing loans | | 100,535 |
| | 110,076 |
| | 127,270 |
| | 136,374 |
| | 185,927 |
|
| OREO | | 32,470 |
| | 32,571 |
| | 39,971 |
| | 53,817 |
| | 44,756 |
|
| Total non-performing assets | | 133,005 |
| | 142,647 |
| | 167,241 |
| | 190,191 |
| | 230,683 |
|
| As a percentage of: | | | | | | | | | | |
| Total loans and OREO | | 3.12 | % | | 3.35 | % | | 3.96 | % | | 4.50 | % | | 5.49 | % |
| Total assets | | 1.79 | % | | 1.85 | % | | 2.24 | % | | 2.60 | % | | 3.12 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ASSET QUALITY TRENDS | Provision for Loan Losses | | Net Charge-offs | | Allowance for Loan Losses | | Accruing Loans 30-89 Days Past Due | | Accruing TDRs | | Non-Performing Loans | | Non-Performing Assets |
| Q1 2010 | $ | 11,900 |
| | $ | 8,581 |
| | $ | 106,349 |
| | $ | 62,675 |
| | $ | 7,660 |
| | $ | 125,382 |
| | $ | 169,362 |
|
| 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 |
|
|
| | | | | | | | | | | | | | | |
| CRITICIZED LOANS | Special Mention | | Substandard | | Doubtful | | Total |
| 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 |
|
| 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 |
|
sPreliminary estimate - may be subject to change.
*See Non-GAAP Financial Measures included herein for a discussion regarding tangible book value per common share, return on average tangible common equity and tangible common stockholders' equity to tangible assets.
FIRST INTERSTATE BANCSYSTEM, INC AND SUBSIDIARIES
Average Balance Sheets
(Unaudited, $ in thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 31, 2013 | | December 31, 2012 | | March 31, 2012 |
| | Average Balance | Interest | Average Rate | | Average Balance | Interest | Average Rate | | Average Balance | Interest | Average Rate |
| Interest earning assets: | | | | | | | | | | | |
| Loans (1) (2) | $ | 4,216,934 |
| $ | 55,913 |
| 5.38 | % | | $ | 4,197,665 |
| $ | 57,915 |
| 5.49 | % | | $ | 4,165,203 |
| $ | 58,374 |
| 5.64 | % |
| Investment securities (2) | 2,204,458 |
| 9,980 |
| 1.84 |
| | 2,156,668 |
| 10,471 |
| 1.93 |
| | 2,143,438 |
| 11,604 |
| 2.18 |
|
| Interest bearing deposits in banks | 476,856 |
| 298 |
| 0.25 |
| | 600,385 |
| 383 |
| 0.25 |
| | 374,899 |
| 237 |
| 0.25 |
|
| Federal funds sold | 2,521 |
| 4 |
| 0.64 |
| | 2,074 |
| 2 |
| 0.38 |
| | 609 |
| 1 |
| 0.66 |
|
| Total interest earnings assets | 6,900,769 |
| 66,195 |
| 3.89 |
| | 6,956,792 |
| 68,771 |
| 3.93 |
| | 6,684,149 |
| 70,216 |
| 4.23 |
|
| Non-earning assets | 598,283 |
| | | | 623,822 |
| | | | 619,137 |
| | |
| Total assets | $ | 7,499,052 |
| | | | $ | 7,580,614 |
| | | | $ | 7,303,286 |
| | |
| Interest bearing liabilities: | | | | | | | | | | | |
| Demand deposits | $ | 1,728,813 |
| $ | 473 |
| 0.11 | % | | $ | 1,705,963 |
| $ | 548 |
| 0.13 | % | | $ | 1,582,805 |
| $ | 646 |
| 0.16 | % |
| Savings deposits | 1,550,146 |
| 653 |
| 0.17 |
| | 1,528,788 |
| 741 |
| 0.19 |
| | 1,449,239 |
| 1,015 |
| 0.28 |
|
| Time deposits | 1,365,232 |
| 3,229 |
| 0.96 |
| | 1,404,913 |
| 3,562 |
| 1.01 |
| | 1,540,789 |
| 4,601 |
| 1.20 |
|
| Repurchase agreements | 512,180 |
| 100 |
| 0.08 |
| | 496,321 |
| 127 |
| 0.10 |
| | 513,407 |
| 156 |
| 0.12 |
|
| Other borrowed funds | 7 |
| — |
| — |
| | 20 |
| — |
| — |
| | 35 |
| — |
| — |
|
| Long-term debt | 37,153 |
| 480 |
| 5.24 |
| | 37,163 |
| 486 |
| 5.20 |
| | 37,194 |
| 498 |
| 5.39 |
|
| Preferred stock pending redemption | 9,444 |
| 159 |
| 6.83 |
| | 7,609 |
| 131 |
| 6.85 |
| | — |
| — |
| — |
|
| Subordinated debentures held by subsidiary trusts | 82,477 |
| 696 |
| 3.42 |
| | 82,477 |
| 1,033 |
| 4.98 |
| | 123,715 |
| 1,507 |
| 4.90 |
|
| Total interest bearing liabilities | 5,285,452 |
| 5,790 |
| 0.44 |
| | 5,263,254 |
| 6,628 |
| 0.50 |
| | 5,247,184 |
| 8,423 |
| 0.65 |
|
| Non-interest bearing deposits | 1,398,850 |
| | | | 1,475,600 |
| | | | 1,232,874 |
| | |
| Other non-interest bearing liabilities | 53,810 |
| | | | 49,855 |
| | | | 50,071 |
| | |
| Stockholders’ equity | 760,940 |
| | | | 791,905 |
| | | | 773,157 |
| | |
| Total liabilities and stockholders’ equity | $ | 7,499,052 |
| | | | $ | 7,580,614 |
| | | | $ | 7,303,286 |
| | |
| Net FTE interest income | | 60,405 |
| | | | 62,143 |
| | | | 61,793 |
| |
| Less FTE adjustments (2) | | (1,128 | ) | | | | (1,170 | ) | | | | (1,159 | ) | |
| Net interest income from consolidated statements of income | | $ | 59,277 |
| | | | $ | 60,973 |
| | | | $ | 60,634 |
| |
| Interest rate spread | | | 3.45 | % | | | | 3.43 | % | | | | 3.58 | % |
| Net FTE interest margin (3) | | | 3.55 | % | | | | 3.55 | % | | | | 3.72 | % |
| Cost of funds, including non-interest bearing demand deposits (4) | | | 0.35 | % | | | | 0.39 | % | | | | 0.52 | % |
| |
| (1) | Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material. |
| |
| (2) | Interest income and average rates for tax exempt loans and securities are presented on a FTE basis. |
| |
| (3) | Net FTE interest margin during the period equals the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by average interest earning assets for the period. |
| |
| (4) | Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits. |
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principals in the United States of America, or GAAP, this release contains the following non-GAAP financial measures that management uses to evaluate capital adequacy: (i) tangible book value per common share; (ii) tangible common stockholders' equity to tangible assets; (iii) tangible assets, (iv) tangible common stockholders' equity, and (v) return on average tangible common equity.
For purposes of computing tangible book value per common share, tangible book value equals common stockholders' equity less goodwill and other intangible assets (except mortgage servicing rights). Tangible book value per common share is calculated as tangible common stockholders' equity divided by shares of common stock outstanding. For purposes of computing tangible common stockholders' equity to tangible assets, tangible assets equals total assets less goodwill and other intangible assets (except mortgage servicing rights). Tangible common stockholders' equity to tangible assets is calculated as tangible common stockholders' equity divided by tangible assets. For purposes of computing return on average tangible common equity, average tangible common equity equals average common stockholders' equity less average goodwill and average other intangible assets (except mortgage servicing rights). Return on average tangible common equity is calculated by dividing net income available to common shareholders by average tangible common equity.
Management believes that these non-GAAP financial measures are valuable indicators of a financial institution's capital strength since they eliminate intangible assets from stockholders' equity and retain the effect of unrealized losses on securities and other components of accumulated other comprehensive income (loss) in stockholders' equity. Management also believes that such financial measures, which are intended to complement the capital ratios defined by banking regulators, are useful to investors in evaluating the Company's performance due to the importance that analysts place on these ratios and also allow investors to compare certain aspects of our capitalization to other companies. These non-GAAP financial measures, however, may not be comparable to similarly titled measures reported by other companies because other companies may not calculate these non-GAAP measures in the same manner. As a result, the usefulness of these measures to investors may be limited, and they should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP.
The following table reconciles the above described non-GAAP financial measures to their most directly comparable GAAP financial measures as of the dates indicated. |
| | | | | | | | | | | | | | | | | | | | |
| | | 2013 | | 2012 |
| | | Mar 31 | | Dec 31 | | Sep 30 | | Jun 30 | | Mar 31 |
| Total stockholders’ equity (GAAP) | | $ | 771,373 |
| | $ | 751,186 |
| | $ | 797,870 |
| | $ | 786,335 |
| | $ | 779,275 |
|
| Less goodwill and other intangible assets (excluding mortgage servicing rights) | | 189,281 |
| | 189,637 |
| | 189,994 |
| | 190,351 |
| | 190,708 |
|
| Less preferred stock | | — |
| | — |
| | 50,000 |
| | 50,000 |
| | 50,000 |
|
| Tangible common stockholders’ equity (Non-GAAP) | | $ | 582,092 |
| | $ | 561,549 |
| | $ | 557,876 |
| | $ | 545,984 |
| | $ | 538,567 |
|
| | | | | | | | | | | |
| Total assets (GAAP) | | $ | 7,439,317 |
| | $ | 7,721,761 |
| | $ | 7,461,152 |
| | $ | 7,305,176 |
| | $ | 7,394,306 |
|
| Less goodwill and other intangible assets (excluding mortgage servicing rights) | | 189,281 |
| | 189,637 |
| | 189,994 |
| | 190,351 |
| | 190,708 |
|
| Tangible assets (Non-GAAP) | | $ | 7,250,036 |
| | $ | 7,532,124 |
| | $ | 7,271,158 |
| | $ | 7,114,825 |
| | $ | 7,203,598 |
|
| | | | | | | | | | | |
| Quarterly averages: | | | | | | | | | | |
| Total stockholders' equity (GAAP) | | $ | 760,940 |
| | $ | 791,905 |
| | $ | 789,734 |
| | $ | 781,339 |
| | $ | 773,157 |
|
| Less goodwill and other intangible assets (excluding mortgage servicing rights) | | 189,503 |
| | 189,839 |
| | 190,206 |
| | 190,563 |
| | 190,925 |
|
| Less preferred stock | | — |
| | 42,391 |
| | 50,000 |
| | 50,000 |
| | 50,000 |
|
| Average tangible common stockholder's equity (Non-GAAP) | | $ | 571,437 |
| | $ | 559,675 |
| | $ | 549,528 |
| | $ | 540,776 |
| | $ | 532,232 |
|
| | | | | | | | | | | |
| Common shares outstanding | | 43,614,942 |
| | 43,290,323 |
| | 43,252,383 |
| | 43,228,750 |
| | 43,190,975 |
|
| Annualized net income for to available to common shareholders | | $ | 81,290 |
| | $ | 64,106 |
| | $ | 60,836 |
| | $ | 48,895 |
| | $ | 45,694 |
|
| | | | | | | | | | | |
| Book value per common share | | $ | 17.69 |
| | $ | 17.35 |
| | $ | 17.29 |
| | $ | 17.03 |
| | $ | 16.88 |
|
| Tangible book value per common share | | 13.35 |
| | 12.97 |
| | 12.90 |
| | 12.63 |
| | 12.47 |
|
| Tangible common stockholders’ equity to tangible assets (Non-GAAP) | | 8.03 | % | | 7.46 | % | | 7.67 | % | | 7.67 | % | | 7.48 | % |
| Return on average tangible equity (Non-GAAP) | | 14.23 |
| | 11.45 |
| | 11.07 |
| | 9.04 |
| | 8.59 |
|
First Interstate BancSystem, Inc.
P.O. Box 30918 Billings, Montana 59116 (406) 255-5390
www.FIBK.com
