|
| | | | |
| For Immediate Release | | |
| Contact: | | Marcy Mutch | | NASDAQ: FIBK |
| | | Chief Financial Officer First Interstate BancSystem, Inc. (406) 255-5312 investor.relations@fib.com | | www.FIBK.com |
First Interstate BancSystem, Inc. Reports Strong Third Quarter Earnings;
Announces Quarterly Dividend of $0.22 Per Share
Billings, MT - October 24, 2016 - First Interstate BancSystem, Inc. (NASDAQ: FIBK) reports third quarter 2016 net income of $25.2 million, or $0.56 per share. This compares to net income of $25.6 million, or $0.57 per share, during second quarter 2016, and $20.2 million, or $0.44 per share, during third quarter 2015.
The Company considers acquisition expenses and certain non-recurring litigation recoveries and settlements to be non-core. Exclusive of non-core income and expense, third quarter core net income was $25.8 million, or $0.58 per share, compared to $23.2 million, or $0.52 per share, during second quarter 2016 and $23.6 million, or $0.52 per share, during third quarter 2015.
HIGHLIGHTS
| |
| • | Successful completion of the acquisition and systems integration of Flathead Bank of Bigfork. |
| |
| • | Core pre-tax, pre-provision net income of $41.3 million, a 9.0% increase from second quarter 2016 and a 12.1% increase from the same period in the prior year. |
| |
| • | Loan growth of 6.8% year-over-year, of which 5.2% was organic. |
| |
| • | Deposit growth of 4.2% year-over-year, of which 1.2% was organic. |
| |
| • | Loan to deposit ratio of 75.5% as of September 30, 2016, compared to 73.6% a year ago. |
| |
| • | Core efficiency ratio of 58.07%, as compared to 60.09% during second quarter 2016 and 61.40% during third quarter 2015. |
“We are very pleased with our strong performance this quarter, as our core earnings per share increased 11.5% over the prior year,” said Kevin Riley, President and Chief Executive Officer of First Interstate BancSystem, Inc. “The growth in earnings is coming from solid revenue growth, improved efficiencies, and stable asset quality. We are seeing healthy economic conditions throughout most of our markets, which is resulting in strong consumer loan demand, as well as solid inflows of core deposits," stated Mr. Riley.
“We also completed the acquisition of Flathead Bank during the third quarter, which contributed to balanced growth across our loan portfolio," Riley continued. "The integration has gone smoothly. We have completed the system conversion, and we have been able to achieve all of the cost savings we projected for this transaction. We are getting a good response from the new customers that joined us from Flathead as we introduce them to the expanded selection of products and services that are now available with First Interstate Bank,” said Mr. Riley.
DIVIDEND DECLARATION
On October 21, 2016, the Executive Committee of the Company's board of directors declared a dividend of $0.22 per common share, payable on November 14, 2016 to owners of record as of October 31, 2016. This dividend equates to a 3.0% annual yield based on the $29.83 average closing price of the Company's common stock during third quarter 2016.
ACQUISITION
On April 6, 2016, the Company's bank subsidiary, First Interstate Bank, entered into an agreement and plan of merger to acquire all of the outstanding stock of Flathead Bank of Bigfork ("Flathead Bank"), wholly owned by Flathead Holding Company of Bigfork, with branches located in western and northwestern Montana. The acquisition was completed on
August 12, 2016 for cash consideration of $34.1 million. As of the date of the acquisition, Flathead Bank had total assets of $228 million, loans of $83 million and deposits of $210 million. In conjunction with the acquisition, the Company recorded provisional goodwill of $8 million and core deposit intangible assets of $2 million.
NET INTEREST INCOME
The Company's net interest income, on a fully taxable equivalent or FTE basis, increased $3.0 million, or 4.4%, to $71.7 million during third quarter 2016, as compared to $68.7 million during second quarter 2016, primarily due to loan growth, one additional accrual day and the recovery of previously charged-off interest.
Interest accretion attributable to the fair valuation of acquired loans contributed $1.4 million of interest income during third quarter 2016, of which approximately $766 thousand was related to early pay-offs. This compares to interest accretion of $1.7 million of interest income during second quarter 2016, of which approximately $779 thousand was related to early pay-offs, and interest accretion of $1.4 million during third quarter 2015, of which $307 thousand was related to early pay-offs. In addition, recoveries of previously charged-off interest contributed $1.8 million of interest income during third quarter 2016, compared to $133 thousand during second quarter 2016, and $679 thousand during third quarter 2015.
The Company's net interest margin ratio increased 3 basis points to 3.58% during third quarter 2016, as compared to 3.55% during second quarter 2016. Exclusive of interest accretion related to acquired loans and the impact of recoveries of charged-off interest, the Company's net interest margin ratio declined 4 basis points to 3.42% during third quarter 2016, as compared to 3.46% during second quarter 2016.
The Company's net FTE interest income increased $4.3 million, or 6.4%, to $71.7 million during third quarter 2016, as compared to $67.4 million during the same period in 2015, primarily due to organic loan growth, combined with a shift in the mix of interest earning assets from lower-yielding investment securities into higher-yielding loans and increases of $1.1 million in net recoveries of previously charged off interest. The Company's net interest margin ratio increased 11 basis points to 3.58% during third quarter 2016, as compared to 3.47% during the same period in 2015, primarily due to loan growth. Exclusive of interest accretion related to acquired loans and the impact of recoveries of charged-off interest, the Company's net interest margin ratio increased 6 basis points to 3.42% during third quarter 2016, as compared to 3.36% during the same period in 2015.
NON-INTEREST INCOME
Total non-interest income decreased $3.4 million, or 9.6%, to $31.9 million during third quarter 2016, as compared to $35.2 million during second quarter 2016, and increased $693 thousand, or 2.2%, as compared to $31.2 million during the same period in 2015. The linked-quarter decrease was mainly attributable to a non-recurring recovery of a prior year litigation expense of $3.8 million, which was partially offset by increases in fee-based revenues.
Total fee based revenues increased $414 thousand, or 1.4%, to $29.3 million during third quarter 2016, as compared to $28.9 million during second quarter 2016, and increased $657 thousand, or 2.3%, as compared to $28.7 million during third quarter 2015, primarily due to increases in payment services and mortgage banking revenues.
Payment services revenues increased $371 thousand, or 4.3%, to $9.0 million dollars during third quarter 2016, as compared to $8.6 million during second quarter 2016, due to seasonally higher debit and credit card transaction volumes. Payment services revenues increased $445 thousand, or 5.2%, to $9.0 million during third quarter 2016, as compared to $8.6 million during third quarter 2015, due to higher credit card transaction volumes.
Mortgage banking revenues increased $365 thousand, or 4.8%, to $8.0 million during third quarter 2016, as compared to $7.6 million during second quarter 2016, primarily due to increases in loan production volume. Loans originated for new home purchases accounted for approximately 56% of the Company's mortgage loan production during third quarter 2016, as compared to 67% during second quarter 2016.
Mortgage banking revenues remained stable at $8.0 million during third quarter 2016 and 2015. Effective January 1, 2016, the Company began offsetting the standard cost of originating residential mortgage loans sold to secondary investors against mortgage banking revenues, resulting in a decrease of approximately $3.3 million in mortgage banking revenues and a corresponding decrease in salaries expense during third quarter 2016, as compared to third quarter 2015. Exclusive of this offset, mortgage banking revenues were $11.3 million during third quarter 2016.
NON-INTEREST EXPENSE
Non-interest expense increased $979 thousand, or 1.6%, to $62.1 million during third quarter 2016, as compared to $61.1 million during second quarter 2016. During third quarter 2016, the Company recorded acquisition expenses of $1.2 million, donation expense related to the charitable contribution of land and a building of $310 thousand and other losses aggregating $384 thousand primarily related to the write-off of an equity method investment.
Non-interest expense decreased $4.1 million, or 6.2%, to $62.1 million during third quarter 2016, as compared to $66.2 million during the same period in 2015. During third quarter 2015, the Company recorded acquisition and litigation-related expenses of $5.6 million. Exclusive of acquisition and litigation expenses, non-interest expense increased $284 thousand, or less than 1.0%, during third quarter 2016, as compared to the same period in 2015. During the three and nine months ended September 30, 2016, additional technology expenditures were offset by process efficiencies allowing the Company to hold operating expenses steady while focusing on getting the right people, processes and technology systems in place for future growth.
Effective January 1, 2016, the Company began capturing certain software costs separately from equipment costs, resulting in an increase of approximately $2.4 million in other expenses and a corresponding decrease in occupancy and equipment expense during third quarter 2016, as compared to third quarter 2015.
TOTAL ASSETS
Total assets increased $368 million, or 4.3%, to $9.0 billion as of September 30, 2016, from $8.6 billion as of June 30, 2016. Approximately $228 million of the increase was attributable to the Flathead Bank acquisition. The remaining increase was primarily due to the deployment of funds generated primarily through organic deposit growth into interest earning assets.
LOANS
Total loans increased $118 million, or 2.2%, to $5.5 billion as of September 30, 2016, from $5.4 billion as of June 30, 2016. Approximately $83 million of this increase was attributable to the Flathead Bank acquisition. Exclusive of the Flathead Bank acquisition, total loans grew organically $34 million, or less than 1.0%, with the most significant growth occurring in indirect consumer and residential construction loans.
The Company experienced organic growth in indirect consumer loans, which increased $44 million, or 6.4%, to $732 million as of September 30, 2016, from $688 million as of June 30, 2016, due to increases in loan transaction volume within the Company's existing dealer network and increases in average loan amounts advanced.
Residential construction increased $23 million, or 20.2%, to $137 million as of September 30, 2016, from $114 million as of June 30, 2016, with approximately $6 million of the increase attributable to the Flathead Bank acquisition. Exclusive of the residential construction loans acquired as part of the Flathead Bank acquisition, residential construction loans grew organically $17 million, or 14.5%, due to continued demand for housing in the Company's market areas.
Increases in indirect consumer and residential construction loans were partially offset by decreases in commercial loans. Commercial loans decreased $11 million, or 1.3%, to $814 million as of September 30, 2016, from $825 million as of June 30, 2016. Exclusive of commercial loans acquired as part of the Flathead bank acquisition, commercial loans decreased $19 million, or 2.4%, from June 30, 2016 to September 30, 2016, primarily due to seasonal pay-downs of existing credit lines.
Year-over-year, total loans increased 6.8% to $5.5 billion as of September 30, 2016, from $5.2 billion as of September 30, 2015. Exclusive of acquisitions, the Company experienced organic loan growth of 5.2% year-over-year, with all loan categories except agricultural loans showing increases.
DEPOSITS
Total deposits grew $347 million, or 5.0%, to $7.3 billion as of September 30, 2016, from $7.0 billion as of June 30, 2016. Exclusive of $210 million in deposits acquired in the Flathead Bank acquisition, deposits experienced seasonal organic growth of 2.0% during third quarter 2016, as compared to second quarter 2016. Year-over-year, total deposits increased 4.2% to $7.3 billion as of September 30, 2016, from $7.0 billion as of September 30, 2015, with all categories except time deposits experiencing growth. As of September 30, 2016, the mix of total deposits was 27% non-interest bearing demand, 30% interest bearing demand, 28% savings and 15% time.
CAPITAL
At September 30, 2016, the Company exceeded all "well-capitalized" regulatory capital adequacy requirements. During third quarter 2016, the Company paid common stock dividends of $10 million, or $0.22 per share.
CREDIT QUALITY
Non-performing assets increased $2 million, or 2.7%, to $89 million, as of September 30, 2016, from $87 million as of June 30, 2016. Although the dollar amount of non-performing assets increased, the percentage of non-performing assets to total assets declined to 0.99% as of September 30, 2016, from 1.01% as of June 30, 2016. Non-accrual loans, the largest component of non-performing assets, decreased $3 million, or 3.8%, to $71 million as of September 30, 2016, from $74 million as of June 30, 2016, primarily due to the pay-off of the loans of one agricultural real estate and one commercial real estate borrower aggregating $7 million. These pay-offs were partially offset by placement of the loans of one agricultural real estate borrower on non-accrual status during third quarter 2016.
Accruing loans past due 90 days or more increased $4 million, or 82.6%, to $8 million as of September 30, 2016, from $4 million as of June 30, 2016. Approximately 35% of this increase was related to loans of one borrower in the energy sector.
Accruing loans past due 30-89 days increased $7 million, or 29.5%, to $32 million as of September 30, 2016, from $25 million as of June 30, 2016, primarily due to the past due loans of one commercial real estate and one commercial construction borrower that were brought current subsequent to quarter end.
Criticized loans increased $10 million to $370 million, or 6.7% of total loans, as of September 30, 2016, compared to $360 million, or 6.7% of total loans, as of June 30, 2016. Most of the increase in criticized loans occurred in the special mention category and was related to the downgrade of two credit relationships in one of our Wyoming markets negatively impacted by the energy sector.
The Company's allowance for loan losses as a percentage of period end loans declined slightly to 1.47% as of September 30, 2016, from 1.48% as of June 30, 2016. Loans acquired in the Flathead Bank acquisition were initially recorded at fair value with no carryover of the related allowance for loan losses. The Company maintains its allowance for loan losses at an amount it believes is sufficient to provide for estimated losses inherent in its loan portfolio at each balance sheet date.
NON-GAAP FINANCIAL MEASURES
In addition to results presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, this release contains certain non-GAAP financial measures that management uses to provide supplemental perspectives on capital adequacy, operating results, performance trends and financial condition. These non-GAAP financial measures 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 Company adjusts certain capital adequacy measures to exclude intangible assets except mortgage servicing rights. Management believes these non-GAAP 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 the Company's capitalization to other companies.
The Company also adjusts earnings and certain performance ratios to exclude certain non-core revenues and expenses, including investment securities net gains or losses, acquisition expenses consisting primarily of professional fees, and nonrecurring litigation expenses and recoveries. Management believes these non-GAAP financial measures are useful to investors in evaluating operating trends by excluding amounts which the Company views as unrelated to its normalized operations. These non-core income and expense adjustments may be presented before or net of estimated income tax expense.
In addition, the Company adjusts net income to exclude income tax expense and provision for loan losses. Management believes this non-GAAP financial measure is useful to investors in evaluating operating trends by excluding pre-tax amounts which the Company views as fluctuating widely based on economic conditions.
See the Non-GAAP Financial Measures table included herein for a reconciliation of the above described non-GAAP financial measures to their most directly comparable GAAP financial measures.
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 report: declining business and economic conditions, credit losses, adverse economic conditions affecting Montana, Wyoming and South Dakota, declining oil and gas prices, lending risk, adequacy of the allowance for loan losses, impairment of goodwill, failure to integrate or profitably operate acquired organizations, additional regulatory requirements if our assets exceed $10 billion, access to low-cost funding sources, changes in interest rates, dependence on the Company’s management team, ability to attract and retain qualified employees, governmental regulation and changes in regulatory, tax and accounting rules and interpretations, failure of technology, cyber-security, unfavorable resolution of litigation, inability to meet liquidity requirements, environmental remediation and other costs, ineffective internal operational controls, competition, reliance on external vendors, implementation of new lines of business or new product or service offerings, soundness of other financial institutions, failure to effectively implement technology-driven products and services, inability of our bank subsidiary to pay dividends, risks associated with introducing new lines of business, products or services, litigation pertaining to fiduciary responsibilities, change in dividend policy, uninsured nature of any investment in Class A common stock, volatility of Class A common stock, decline in market price of Class A common stock, voting control of Class B stockholders, anti-takeover provisions, dilution as a result of future equity issuances, 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.
Third Quarter 2016 Conference Call for Investors
First Interstate BancSystem, Inc. will host a conference call to discuss third quarter 2016 results at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Time) on Tuesday, October 25, 2016. The conference call will be accessible by telephone and through the Internet. Participants may join the call by dialing 1-877-507-0356 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. Mountain Time) on October 25, 2016 through 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time) on November 25, 2016, by dialing 1-877-344-7529 (using conference ID 10094562). 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 80 banking offices, including detached drive-up facilities, in 46 communities in Montana, Wyoming and 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.
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | |
| | Quarter Ended | | % Change | |
| (In thousands, except per share data) | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | | 3Q16 vs 2Q16 | 3Q16 vs 3Q15 | |
| Net interest income | $ | 70,581 |
| $ | 67,633 |
| $ | 67,950 |
| $ | 68,420 |
| $ | 66,330 |
| | 4.4 | % | 6.4 | % | |
| Net interest income on a fully-taxable equivalent ("FTE") basis | 71,739 |
| 68,742 |
| 69,012 |
| 69,492 |
| 67,400 |
| | 4.4 |
| 6.4 |
| |
| Provision for loan losses | 2,363 |
| 2,550 |
| 4,000 |
| 3,289 |
| 1,098 |
| | (7.3 | ) | 115.2 |
| |
| Non-interest income: | | | | | | | |
| |
| Payment services revenues | 9,019 |
| 8,648 |
| 7,991 |
| 8,367 |
| 8,574 |
| | 4.3 |
| 5.2 |
| |
| Mortgage banking revenues | 8,013 |
| 7,648 |
| 4,686 |
| 7,282 |
| 7,983 |
| | 4.8 |
| 0.4 |
| |
| Wealth management revenues | 4,995 |
| 5,166 |
| 4,575 |
| 4,840 |
| 5,233 |
| | (3.3 | ) | (4.5 | ) | |
| Service charges on deposit accounts | 4,692 |
| 4,626 |
| 4,463 |
| 4,655 |
| 4,379 |
| | 1.4 |
| 7.1 |
| |
| Other service charges, commissions and fees | 2,628 |
| 2,845 |
| 2,608 |
| 2,652 |
| 2,521 |
| | (7.6 | ) | 4.2 |
| |
| Total fee-based revenues | 29,347 |
| 28,933 |
| 24,323 |
| 27,796 |
| 28,690 |
| | 1.4 |
| 2.3 |
| |
| Investment securities gains (losses) | 225 |
| 108 |
| (21 | ) | 62 |
| 23 |
| | NM |
| NM |
| |
| Other income** | 2,299 |
| 2,457 |
| 2,293 |
| 2,798 |
| 2,465 |
| | (6.4 | ) | (6.7 | ) | |
| Non-core litigation recovery | — |
| 3,750 |
| — |
| — |
| — |
| | NM |
| NM |
| |
| Total non-interest income | 31,871 |
| 35,248 |
| 26,595 |
| 30,656 |
| 31,178 |
| | (9.6 | ) | 2.2 |
| |
| Non-interest expense: | | | | | | | |
| |
| Salaries and wages | 23,618 |
| 24,946 |
| 23,227 |
| 24,549 |
| 25,460 |
| | (5.3 | ) | (7.2 | ) | |
| Employee benefits** | 8,610 |
| 8,066 |
| 9,609 |
| 7,337 |
| 8,008 |
| | 6.7 |
| 7.5 |
| |
| Occupancy and equipment | 6,811 |
| 6,744 |
| 6,920 |
| 8,624 |
| 8,262 |
| | 1.0 |
| (17.6 | ) | |
| Core deposit intangible amortization | 875 |
| 827 |
| 827 |
| 837 |
| 842 |
| | 5.8 |
| 3.9 |
| |
| Other expenses | 20,994 |
| 20,411 |
| 19,670 |
| 19,060 |
| 18,780 |
| | 2.9 |
| 11.8 |
| |
| Subtotal | 60,908 |
| 60,994 |
| 60,253 |
| 60,407 |
| 61,352 |
| | (0.1 | ) | (0.7 | ) | |
| Other real estate owned (income) expense | 8 |
| 140 |
| (39 | ) | 129 |
| (720 | ) | | (94.3 | ) | (101.1 | ) | |
| Non-core acquisition and litigation expenses | 1,197 |
| — |
| — |
| 166 |
| 5,566 |
| | NM | (78.5 | ) | |
| Total non-interest expense | 62,113 |
| 61,134 |
| 60,214 |
| 60,702 |
| 66,198 |
| | 1.6 |
| (6.2 | ) | |
| Income before taxes | 37,976 |
| 39,197 |
| 30,331 |
| 35,085 |
| 30,212 |
| | (3.1 | ) | 25.7 |
| |
| Income taxes | 12,783 |
| 13,643 |
| 10,207 |
| 11,654 |
| 10,050 |
| | (6.3 | ) | 27.2 |
| |
| Net income | $ | 25,193 |
| $ | 25,554 |
| $ | 20,124 |
| $ | 23,431 |
| $ | 20,162 |
| | (1.4 | )% | 25.0 | % | |
| | | | | | | | | | |
| Weighted-average basic shares outstanding | 44,415 |
| 44,269 |
| 44,719 |
| 45,066 |
| 45,150 |
| | 0.3 | % | (1.6 | )% | |
| Weighted-average diluted shares outstanding | 44,806 |
| 44,645 |
| 45,114 |
| 45,549 |
| 45,579 |
| | 0.4 |
| (1.7 | ) | |
| Earnings per share - basic | $ | 0.57 |
| $ | 0.58 |
| $ | 0.45 |
| $ | 0.52 |
| $ | 0.45 |
| | (1.7 | ) | 26.7 |
| |
| Earnings per share - diluted | 0.56 |
| 0.57 |
| 0.45 |
| 0.51 |
| 0.44 |
| | (1.8 | ) | 27.3 |
| |
| | | | | | | | | | |
| Core net income*** | $ | 25,798 |
| $ | 23,154 |
| $ | 20,137 |
| $ | 23,496 |
| $ | 23,610 |
| | 11.4 | % | 9.3 | % | |
| Core pre-tax, pre-provision net income*** | 41,311 |
| 37,889 |
| 34,352 |
| 38,478 |
| 36,853 |
| | 9.0 |
| 12.1 |
| |
| Core earnings per share - diluted*** | 0.58 |
| 0.52 |
| 0.45 |
| 0.52 |
| 0.52 |
| | 11.5 |
| 11.5 |
| |
| | | | | | | | | | |
| NM - not meaningful | | | | | | | | | |
| **Beginning in second quarter 2016, income earned on deferred compensation plan assets is reported in non-interest income net of employee benefits expense directly related to these earnings. Prior period amounts and ratios have been revised to conform to the current period presentation. | |
| ***Non-GAAP financial measure - see Non-GAAP Financial Measures included herein for a reconciliation of net income (GAAP) to core net income (non-GAAP) and core pre-tax, pre-provision net income (non-GAAP); and earnings per share - diluted (GAAP) to core earnings per share - diluted (non-GAAP). | |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| |
| | | | % Change |
| (In thousands, except per share data) | Sep 30, 2016 | Jun 30,
2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | | 3Q16 vs 2Q16 | 3Q16 vs 3Q15 |
| Assets: | | | | | | | | |
| Cash and cash equivalents | $ | 701,367 |
| $ | 476,051 |
| $ | 655,528 |
| $ | 780,457 |
| $ | 708,295 |
| | 47.3 | % | (1.0 | )% |
| Investment securities | 2,072,273 |
| 2,061,828 |
| 2,144,740 |
| 2,057,505 |
| 2,067,636 |
| | 0.5 |
| 0.2 |
|
| Loans held for investment | 5,462,936 |
| 5,340,189 |
| 5,191,469 |
| 5,193,321 |
| 5,120,794 |
| | 2.3 |
| 6.7 |
|
| Mortgage loans held for sale | 67,979 |
| 73,053 |
| 52,989 |
| 52,875 |
| 55,686 |
| | (6.9 | ) | 22.1 |
|
| Total loans | 5,530,915 |
| 5,413,242 |
| 5,244,458 |
| 5,246,196 |
| 5,176,480 |
| | 2.2 |
| 6.8 |
|
| Less allowance for loan losses | 81,235 |
| 80,340 |
| 79,924 |
| 76,817 |
| 74,256 |
| | 1.1 |
| 9.4 |
|
| Net loans | 5,449,680 |
| 5,332,902 |
| 5,164,534 |
| 5,169,379 |
| 5,102,224 |
| | 2.2 |
| 6.8 |
|
| Premises and equipment | 191,064 |
| 187,538 |
| 188,714 |
| 190,812 |
| 190,386 |
| | 1.9 |
| 0.4 |
|
| Goodwill and intangible assets (excluding mortgage servicing rights) | 223,368 |
| 213,420 |
| 214,248 |
| 215,119 |
| 215,843 |
| | 4.7 |
| 3.5 |
|
| Company owned life insurance | 197,070 |
| 189,524 |
| 188,396 |
| 187,253 |
| 185,990 |
| | 4.0 |
| 6.0 |
|
| Other real estate owned | 9,447 |
| 7,908 |
| 9,257 |
| 6,254 |
| 8,031 |
| | 19.5 |
| 17.6 |
|
| Mortgage servicing rights | 17,322 |
| 16,038 |
| 15,574 |
| 15,621 |
| 15,336 |
| | 8.0 |
| 12.9 |
|
| Other assets | 112,256 |
| 120,167 |
| 109,689 |
| 105,796 |
| 110,789 |
| | (6.6 | ) | 1.3 |
|
| Total assets | $ | 8,973,847 |
| $ | 8,605,376 |
| $ | 8,690,680 |
| $ | 8,728,196 |
| $ | 8,604,530 |
| | 4.3 | % | 4.3 | % |
| | | | | | | | |
|
| Liabilities and stockholders' equity: | | | | | | | |
|
|
| Deposits | $ | 7,328,581 |
| $ | 6,981,448 |
| $ | 7,107,463 |
| $ | 7,088,937 |
| $ | 7,035,794 |
| | 5.0 | % | 4.2 | % |
| Securities sold under repurchase agreements | 476,768 |
| 466,399 |
| 465,523 |
| 510,635 |
| 437,533 |
| | 2.2 |
| 9.0 |
|
| Long-term debt | 27,949 |
| 27,928 |
| 27,907 |
| 27,885 |
| 43,089 |
| | 0.1 |
| (35.1 | ) |
| Subordinated debentures held by subsidiary trusts | 82,477 |
| 82,477 |
| 82,477 |
| 82,477 |
| 82,477 |
| | — |
| — |
|
| Other liabilities | 75,568 |
| 81,999 |
| 65,296 |
| 67,769 |
| 67,062 |
| | (7.8 | ) | 12.7 |
|
| Total liabilities | 7,991,343 |
| 7,640,251 |
| 7,748,666 |
| 7,777,703 |
| 7,665,955 |
| | 4.6 |
| 4.2 |
|
| Stockholders' equity: | | | | | | |
|
|
|
|
| Common stock | 293,960 |
| 290,366 |
| 288,782 |
| 311,720 |
| 309,167 |
| | 1.2 |
| (4.9 | ) |
| Retained earnings | 679,722 |
| 664,337 |
| 648,631 |
| 638,367 |
| 623,967 |
| | 2.3 |
| 8.9 |
|
| Accumulated other comprehensive income (loss) | 8,822 |
| 10,422 |
| 4,601 |
| 406 |
| 5,441 |
| | (15.4 | ) | 62.1 |
|
| Total stockholders' equity | 982,504 |
| 965,125 |
| 942,014 |
| 950,493 |
| 938,575 |
| | 1.8 |
| 4.7 |
|
| Total liabilities and stockholders' equity | $ | 8,973,847 |
| $ | 8,605,376 |
| $ | 8,690,680 |
| $ | 8,728,196 |
| $ | 8,604,530 |
| | 4.3 | % | 4.3 | % |
| | | | | | | | | |
| Common shares outstanding at period end | 44,880 |
| 44,746 |
| 44,707 |
| 45,428 |
| 45,345 |
| | 0.3 | % | (1.0 | )% |
| Book value at period end | $ | 21.89 |
| $ | 21.57 |
| $ | 21.07 |
| $ | 20.92 |
| $ | 20.70 |
| | 1.5 |
| 5.7 |
|
| Tangible book value at period end*** | 16.91 |
| 16.80 |
| 16.28 |
| 16.19 |
| 15.94 |
| | 0.7 |
| 6.1 |
|
| | | | | | | | | |
| | | | | | | | | |
| ***Non-GAAP financial measure - see Non-GAAP Financial Measures included herein for a reconciliation of book value at period end (GAAP) to tangible book value at period end (non-GAAP). |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Loans and Deposits
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | % Change |
| (In thousands) | Sep 30, 2016 | Jun 30,
2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | | 3Q16 vs 2Q16 | 3Q16 vs 3Q15 |
| | | | | | | | | |
| Loans: | | | | | | | | |
| Real Estate: | | | | | | | | |
| Commercial real estate | $ | 1,843,120 |
| $ | 1,816,813 |
| $ | 1,764,492 |
| $ | 1,793,258 |
| $ | 1,750,797 |
| | 1.4 | % | 5.3 | % |
| Construction: | | | | | | |
|
| |
| Land acquisition and development | 212,680 |
| 218,650 |
| 219,450 |
| 224,066 |
| 212,990 |
| | (2.7 | ) | (0.1 | ) |
| Residential | 137,014 |
| 113,944 |
| 113,317 |
| 111,763 |
| 112,495 |
| | 20.2 |
| 21.8 |
|
| Commercial | 128,154 |
| 117,643 |
| 102,382 |
| 94,890 |
| 93,775 |
| | 8.9 |
| 36.7 |
|
| Total construction | 477,848 |
| 450,237 |
| 435,149 |
| 430,719 |
| 419,260 |
| | 6.1 |
| 14.0 |
|
| Residential real estate | 1,047,150 |
| 1,030,593 |
| 1,021,443 |
| 1,032,851 |
| 1,020,445 |
| | 1.6 |
| 2.6 |
|
| Agricultural real estate | 172,949 |
| 166,872 |
| 153,054 |
| 156,234 |
| 163,116 |
| | 3.6 |
| 6.0 |
|
| Total real estate | 3,541,067 |
| 3,464,515 |
| 3,374,138 |
| 3,413,062 |
| 3,353,618 |
| | 2.2 |
| 5.6 |
|
| Consumer | | | | | | |
|
|
| Indirect | 731,901 |
| 687,768 |
| 651,057 |
| 622,529 |
| 616,142 |
| | 6.4 |
| 18.8 |
|
| Other | 153,624 |
| 153,185 |
| 150,774 |
| 153,717 |
| 150,170 |
| | 0.3 |
| 2.3 |
|
| Credit card | 66,860 |
| 66,221 |
| 63,624 |
| 68,107 |
| 65,649 |
| | 1.0 |
| 1.8 |
|
| Total consumer | 952,385 |
| 907,174 |
| 865,455 |
| 844,353 |
| 831,961 |
| | 5.0 |
| 14.5 |
|
| Commercial | 814,392 |
| 824,962 |
| 825,043 |
| 792,416 |
| 778,648 |
| | (1.3 | ) | 4.6 |
|
| Agricultural | 152,800 |
| 139,892 |
| 126,290 |
| 142,151 |
| 154,855 |
| | 9.2 |
| (1.3 | ) |
| Other | 2,292 |
| 3,646 |
| 543 |
| 1,339 |
| 1,712 |
| | (37.1 | ) | 33.9 |
|
| Loans held for investment | 5,462,936 |
| 5,340,189 |
| 5,191,469 |
| 5,193,321 |
| 5,120,794 |
| | 2.3 |
| 6.7 |
|
| Loans held for sale | 67,979 |
| 73,053 |
| 52,989 |
| 52,875 |
| 55,686 |
| | (6.9 | ) | 22.1 |
|
| Total loans | $ | 5,530,915 |
| $ | 5,413,242 |
| $ | 5,244,458 |
| $ | 5,246,196 |
| $ | 5,176,480 |
| | 2.2 | % | 6.8 | % |
| | | | | | | | | |
| | | | | | | | | |
| Deposits: | | | | | | | | |
| Non-interest bearing | $ | 1,965,872 |
| $ | 1,783,609 |
| $ | 1,860,472 |
| $ | 1,823,716 |
| $ | 1,832,535 |
| | 10.2 | % | 7.3 | % |
| Interest bearing: | | | | | | | | |
| Demand | 2,174,443 |
| 2,107,950 |
| 2,142,326 |
| 2,178,373 |
| 2,134,203 |
| | 3.2 |
| 1.9 |
|
| Savings | 2,095,678 |
| 2,003,343 |
| 2,001,329 |
| 1,955,256 |
| 1,918,724 |
| | 4.6 |
| 9.2 |
|
| Time, $100 and over | 485,253 |
| 479,077 |
| 478,527 |
| 487,372 |
| 496,539 |
| | 1.3 |
| (2.3 | ) |
| Time, other | 607,335 |
| 607,469 |
| 624,809 |
| 644,220 |
| 653,793 |
| | — |
| (7.1 | ) |
| Total interest bearing | 5,362,709 |
| 5,197,839 |
| 5,246,991 |
| 5,265,221 |
| 5,203,259 |
| | 3.2 |
| 3.1 |
|
| Total deposits | $ | 7,328,581 |
| $ | 6,981,448 |
| $ | 7,107,463 |
| $ | 7,088,937 |
| $ | 7,035,794 |
| | 5.0 | % | 4.2 | % |
| | | | | | | | | |
Total core deposits(1) | $ | 6,843,328 |
| $ | 6,502,371 |
| $ | 6,628,936 |
| $ | 6,601,565 |
| $ | 6,539,255 |
| | 5.2 | % | 4.6 | % |
| | | | | | | | | |
(1) Core deposits are defined as total deposits less time deposits, $100 and over |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Credit Quality
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | |
| | | | | | % Change |
| (In thousands) | Sep 30, 2016 | Jun 30,
2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | | 3Q16 vs 2Q16 | 3Q16 vs 3Q15 |
| | | | | | | | | |
| Allowance for Loan Losses: | | | | | | | | |
| Allowance for loan losses | $ | 81,235 |
| $ | 80,340 |
| $ | 79,924 |
| $ | 76,817 |
| $ | 74,256 |
| | 1.1 | % | 9.4 | % |
| As a percentage of period-end loans | 1.47 | % | 1.48 | % | 1.52 | % | 1.46 | % | 1.43 | % | | | |
| | | | | | | | | |
| Net charge-offs during quarter | $ | 1,468 |
| $ | 2,134 |
| $ | 893 |
| $ | 728 |
| $ | 3,394 |
| | (31.2 | )% | (56.7 | )% |
| Annualized as a percentage of average loans | 0.11 | % | 0.16 | % | 0.07 | % | 0.06 | % | 0.26 | % | | | |
| | | | | | | | | |
| | | | | | | | | |
| Non-Performing Assets: | | | | | | | | |
| Non-accrual loans | $ | 71,469 |
| $ | 74,311 |
| $ | 63,837 |
| $ | 66,385 |
| $ | 66,359 |
| | (3.8 | )% | 7.7 | % |
| Accruing loans past due 90 days or more | 8,131 |
| 4,454 |
| 4,362 |
| 5,602 |
| 3,357 |
| | 82.6 |
| 142.2 |
|
| Total non-performing loans | 79,600 |
| 78,765 |
| 68,199 |
| 71,987 |
| 69,716 |
| | 1.1 |
| 14.2 |
|
| Other real estate owned | 9,447 |
| 7,908 |
| 9,257 |
| 6,254 |
| 8,031 |
| | 19.5 |
| 17.6 |
|
| Total non-performing assets | $ | 89,047 |
| $ | 86,673 |
| $ | 77,456 |
| $ | 78,241 |
| $ | 77,747 |
| | 2.7 | % | 14.5 | % |
| | | | | | | | | |
| Non-performing assets as a percentage of: | | | | | | | | |
| Total loans and OREO | 1.61 | % | 1.60 | % | 1.47 | % | 1.49 | % | 1.50 | % | | | |
| Total assets | 0.99 |
| 1.01 |
| 0.89 |
| 0.90 |
| 0.90 |
| | | |
| | | | | | | | | |
| Accruing Loans 30-89 Days Past Due | $ | 32,439 |
| $ | 25,048 |
| $ | 25,001 |
| $ | 42,869 |
| $ | 38,793 |
| | 29.5 | % | (16.4 | )% |
| Accruing TDRs | 17,163 |
| 16,408 |
| 12,070 |
| 15,419 |
| 16,702 |
| | 4.6 |
| 2.8 |
|
| | | | | | | | | |
| | | | | | | | | |
| Criticized Loans: | | | | | | | | |
| Special Mention | $ | 152,868 |
| $ | 142,560 |
| $ | 144,993 |
| $ | 127,270 |
| $ | 155,157 |
| | 7.2 | % | (1.5 | )% |
| Substandard | 175,555 |
| 176,021 |
| 167,826 |
| 162,785 |
| 163,846 |
| | (0.3 | ) | 7.1 |
|
| Doubtful | 41,540 |
| 41,344 |
| 34,578 |
| 30,350 |
| 24,547 |
| | 0.5 |
| 69.2 |
|
| Total | $ | 369,963 |
| $ | 359,925 |
| $ | 347,397 |
| $ | 320,405 |
| $ | 343,550 |
| | 2.8 | % | 7.7 | % |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Selected Ratios
(Unaudited)
|
| | | | | | | | | | | | | | |
| | | | | | |
| | Sep 30, 2016 | | Jun 30,
2016 | | Mar 31, 2016 | | Dec 31, 2015 | | Sep 30, 2015 |
| | | | | | | | | | |
| Annualized Financial Ratios (GAAP) | | | | | | | | |
| Return on average assets | 1.15 | % | | 1.20 | % | | 0.94 | % | | 1.07 | % | | 0.94 | % |
| Return on average common equity | 10.30 |
| | 10.83 |
| | 8.60 |
| | 9.83 |
| | 8.60 |
|
| Yield on average earning assets | 3.80 |
| | 3.78 |
| | 3.77 |
| | 3.73 |
| | 3.70 |
|
| Cost of average interest bearing liabilities | 0.30 |
| | 0.30 |
| | 0.31 |
| | 0.32 |
| | 0.31 |
|
| Interest rate spread | 3.50 |
| | 3.48 |
| | 3.46 |
| | 3.41 |
| | 3.39 |
|
| Net interest margin ratio | 3.58 |
| | 3.55 |
| | 3.54 |
| | 3.49 |
| | 3.47 |
|
| Efficiency ratio** | 60.63 |
| | 59.42 |
| | 63.69 |
| | 61.27 |
| | 67.89 |
|
| Loan to deposit ratio | 75.47 |
| | 77.54 |
| | 73.79 |
| | 74.01 |
| | 73.57 |
|
| | | | | | | | | | |
| |
|
| |
|
| |
|
| |
|
| |
|
|
| Annualized Financial Ratios - Operating*** (Non-GAAP) | | | | | | | | | |
| Core return on average assets | 1.17 | % | | 1.09 | % | | 0.94 | % | | 1.07 | % | | 1.10 | % |
| Core return on average common equity | 10.55 |
| | 9.81 |
| | 8.60 |
| | 9.86 |
| | 10.07 |
|
| Return on average tangible common equity | 13.22 |
| | 13.98 |
| | 11.13 |
| | 12.73 |
| | 11.20 |
|
| Core efficiency ratio | 58.07 |
| | 60.09 |
| | 62.14 |
| | 59.52 |
| | 61.40 |
|
| Tangible common stockholders' equity to tangible assets | 8.68 |
| | 8.96 |
| | 8.59 |
| | 8.64 |
| | 8.62 |
|
| | | | | | | | | | |
| | | | | | | | | | |
| Consolidated Capital Ratios: | | | | | | | | | |
| Total risk-based capital | 14.87 | % | * | 15.03 | % | | 15.04 | % | | 15.36 | % | | 15.28 | % |
| Tier 1 risk-based capital | 13.56 |
| * | 13.72 |
| | 13.72 |
| | 13.99 |
| | 13.83 |
|
| Tier 1 common capital to total risk-weighted assets | 12.32 |
| * | 12.45 |
| | 12.43 |
| | 12.69 |
| | 12.52 |
|
| Leverage Ratio | 10.22 |
| * | 10.35 |
| | 10.07 |
| | 10.12 |
| | 10.13 |
|
| | | | | | | | | | |
| *Preliminary estimate - may be subject to change. | | | | | | | | | |
| **Beginning in second quarter 2016, income earned on deferred compensation plan assets is reported in non-interest income net of employee benefits expense directly related to these earnings. Prior period amounts and ratios have been revised to conform to the current period presentation. |
| ***Non-GAAP financial measures - see Non-GAAP Financial Measures included herein for a reconciliation of return on average assets, return on average common equity and efficiency ratio (GAAP) to core return on average assets, core return on average common equity, return on average tangible common equity, core efficiency ratio and tangible common stockholders' equity to tangible assets (non-GAAP). |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Average Balance Sheets
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | September 30, 2016 | | June 30, 2016 | | September 30, 2015 |
| (In thousands) | Average Balance | Interest | Average Rate | | Average
Balance | Interest | Average
Rate | | Average
Balance | Interest | Average
Rate |
| Interest earning assets: | | | | | | | | | | | |
Loans (1) (2) | $ | 5,469,294 |
| $ | 66,291 |
| 4.82 | % | | $ | 5,324,812 |
| $ | 63,248 |
| 4.78 | % | | $ | 5,141,484 |
| $ | 62,577 |
| 4.83 | % |
Investment securities (2) | 2,038,498 |
| 9,191 |
| 1.79 |
| | 2,095,347 |
| 9,335 |
| 1.79 |
| | 2,097,835 |
| 8,927 |
| 1.69 |
|
| Interest bearing deposits in banks | 458,415 |
| 607 |
| 0.53 |
| | 359,807 |
| 482 |
| 0.54 |
| | 471,682 |
| 342 |
| 0.29 |
|
| Federal funds sold | 2,183 |
| 4 |
| 0.73 |
| | 1,888 |
| 3 |
| 0.64 |
| | 2,876 |
| 4 |
| 0.55 |
|
| Total interest earnings assets | 7,968,390 |
| 76,093 |
| 3.80 |
| | 7,781,854 |
| 73,068 |
| 3.78 |
| | 7,713,877 |
| 71,850 |
| 3.70 |
|
| Non-earning assets | 777,083 |
| | | | 756,723 |
| | | | 781,559 |
| | |
| Total assets | $ | 8,745,473 |
| | | | $ | 8,538,577 |
| | | | $ | 8,495,436 |
| | |
| Interest bearing liabilities: | | | | | | | | | | | |
| Demand deposits | $ | 2,141,892 |
| $ | 514 |
| 0.10 | % | | $ | 2,133,509 |
| $ | 514 |
| 0.10 | % | | $ | 2,086,112 |
| $ | 528 |
| 0.10 | % |
| Savings deposits | 2,055,083 |
| 647 |
| 0.13 |
| | 1,983,262 |
| 652 |
| 0.13 |
| | 1,924,612 |
| 645 |
| 0.13 |
|
| Time deposits | 1,088,261 |
| 1,938 |
| 0.71 |
| | 1,097,448 |
| 1,942 |
| 0.71 |
| | 1,150,223 |
| 2,068 |
| 0.71 |
|
| Repurchase agreements | 466,079 |
| 100 |
| 0.09 |
| | 470,264 |
| 92 |
| 0.08 |
| | 433,007 |
| 55 |
| 0.05 |
|
| Other borrowed funds | 8 |
| — |
| — |
| | 12 |
| — |
| — |
| | 6 |
| — |
| — |
|
| Long-term debt | 27,917 |
| 457 |
| 6.51 |
| | 27,896 |
| 451 |
| 6.50 |
| | 43,200 |
| 544 |
| 5.00 |
|
| Subordinated debentures held by subsidiary trusts | 82,477 |
| 698 |
| 3.37 |
| | 82,477 |
| 675 |
| 3.29 |
| | 82,477 |
| 610 |
| 2.93 |
|
| Total interest bearing liabilities | 5,861,717 |
| 4,354 |
| 0.30 |
| | 5,794,868 |
| 4,326 |
| 0.30 |
| | 5,719,637 |
| 4,450 |
| 0.31 |
|
| Non-interest bearing deposits | 1,843,800 |
| | | | 1,738,008 |
| | | | 1,787,419 |
| | |
| Other non-interest bearing liabilities | 66,822 |
| | | | 56,864 |
| | | | 58,623 |
| | |
| Stockholders’ equity | 973,134 |
| | | | 948,837 |
| | | | 929,757 |
| | |
| Total liabilities and stockholders’ equity | $ | 8,745,473 |
| | | | $ | 8,538,577 |
| | | | $ | 8,495,436 |
| | |
| Net FTE interest income | | $ | 71,739 |
| | | | 68,742 |
| | | | $ | 67,400 |
| |
Less FTE adjustments (2) | | (1,158 | ) | | | | (1,109 | ) | | | | (1,070 | ) | |
| Net interest income from consolidated statements of income | | $ | 70,581 |
| | | | $ | 67,633 |
| | | | $ | 66,330 |
| |
| Interest rate spread | | | 3.50 | % | | | | 3.48 | % | | | | 3.39 | % |
Net FTE interest margin (3) | | | 3.58 | % | | | | 3.55 | % | | | | 3.47 | % |
Cost of funds, including non-interest bearing demand deposits (4) | | | 0.22 | % | | | | 0.23 | % | | | | 0.24 | % |
| |
(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 an 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. |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Average Balance Sheets
(Unaudited)
|
| | | | | | | | | | | | | | | | | |
| | Nine Months Ended |
| | September 30, 2016 | | September 30, 2015 |
| (In thousands) | Average Balance | Interest | Average Rate | | Average
Balance | Interest | Average
Rate |
| Interest earning assets: | | | | | | | |
Loans (1) (2) | $ | 5,339,479 |
| $ | 192,910 |
| 4.83 | % | | $ | 5,010,251 |
| $ | 183,305 |
| 4.89 | % |
Investment securities (2) | 2,080,454 |
| 27,950 |
| 1.79 |
| | 2,236,581 |
| 28,209 |
| 1.69 |
|
| Interest bearing deposits in banks | 441,748 |
| 1,734 |
| 0.52 |
| | 462,262 |
| 1,002 |
| 0.29 |
|
| Federal funds sold | 1,789 |
| 9 |
| 0.67 |
| | 2,412 |
| 11 |
| 0.61 |
|
| Total interest earnings assets | 7,863,470 |
| 222,603 |
| 3.78 |
| | 7,711,506 |
| 212,527 |
| 3.68 |
|
| Non-earning assets | 762,979 |
| | | | 759,169 |
| | |
| Total assets | $ | 8,626,449 |
| | | | $ | 8,470,675 |
| | |
| Interest bearing liabilities: | | | | | | | |
| Demand deposits | $ | 2,140,981 |
| $ | 1,587 |
| 0.10 | % | | $ | 2,087,241 |
| $ | 1,558 |
| 0.10 | % |
| Savings deposits | 2,008,032 |
| 1,949 |
| 0.13 |
| | 1,894,132 |
| 1,897 |
| 0.13 |
|
| Time deposits | 1,101,205 |
| 5,899 |
| 0.72 |
| | 1,181,931 |
| 6,334 |
| 0.72 |
|
| Repurchase agreements | 471,165 |
| 282 |
| 0.08 |
| | 453,610 |
| 162 |
| 0.05 |
|
| Other borrowed funds | 8 |
| — |
| — |
| | 5 |
| — |
| — |
|
| Long-term debt | 28,313 |
| 1,357 |
| 6.40 |
| | 41,469 |
| 1,596 |
| 5.15 |
|
| Subordinated debentures held by subsidiary trusts | 82,477 |
| 2,036 |
| 3.30 |
| | 82,477 |
| 1,800 |
| 2.92 |
|
| Total interest bearing liabilities | 5,832,181 |
| 13,110 |
| 0.30 |
| | 5,740,865 |
| 13,347 |
| 0.31 |
|
| Non-interest bearing deposits | 1,779,344 |
| | | | 1,750,152 |
| | |
| Other non-interest bearing liabilities | 60,301 |
| | | | 60,149 |
| | |
| Stockholders’ equity | 954,623 |
| | | | 919,509 |
| | |
| Total liabilities and stockholders’ equity | $ | 8,626,449 |
| | | | $ | 8,470,675 |
| | |
| Net FTE interest income | | $ | 209,493 |
| | | | $ | 199,180 |
| |
Less FTE adjustments (2) | | (3,329 | ) | | | | (3,237 | ) | |
| Net interest income from consolidated statements of income | | $ | 206,164 |
| | | | $ | 195,943 |
| |
| Interest rate spread | | | 3.48 | % | | | | 3.37 | % |
Net FTE interest margin (3) | | | 3.56 | % | | | | 3.45 | % |
Cost of funds, including non-interest bearing demand deposits (4) | | | 0.23 | % | | | | 0.24 | % |
| |
(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 an 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. |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)
|
| | | | | | | | | | | | | | | | |
| | | As Of or For the Quarter Ended |
| (In thousands, except per share data) | | Sep 30, 2016 | Jun 30,
2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 |
| | | | | | | |
| Net income (GAAP) | (A) | $ | 25,193 |
| $ | 25,554 |
| $ | 20,124 |
| $ | 23,431 |
| $ | 20,162 |
|
| Adj: investment securities (gains) losses, net | | (225 | ) | (108 | ) | 21 |
| (62 | ) | (23 | ) |
| Plus: acquisition & nonrecurring litigation expenses | | 1,197 |
| — |
| — |
| 166 |
| 5,566 |
|
| Less: nonrecurring litigation recovery | | — |
| (3,750 | ) | — |
| — |
| — |
|
| Adj: income tax (benefit) expense | | (367 | ) | 1,458 |
| (8 | ) | (39 | ) | (2,095 | ) |
| Total core net income (Non-GAAP) | (B) | $ | 25,798 |
| $ | 23,154 |
| $ | 20,137 |
| $ | 23,496 |
| $ | 23,610 |
|
| | | | | | | |
| Net income (GAAP) | | $ | 25,193 |
| $ | 25,554 |
| $ | 20,124 |
| $ | 23,431 |
| $ | 20,162 |
|
| Add back: income tax expense | | 12,783 |
| 13,643 |
| 10,207 |
| 11,654 |
| 10,050 |
|
| Add back: provision for loan losses | | 2,363 |
| 2,550 |
| 4,000 |
| 3,289 |
| 1,098 |
|
| Adj: investment securities (gains) losses, net | | (225 | ) | (108 | ) | 21 |
| (62 | ) | (23 | ) |
| Add back: acquisition & nonrecurring litigation expenses | | 1,197 |
| — |
| — |
| 166 |
| 5,566 |
|
| Subtract: nonrecurring litigation recovery | | — |
| (3,750 | ) | — |
| — |
| — |
|
| Core pre-tax, pre-provision net income (Non-GAAP) | | $ | 41,311 |
| $ | 37,889 |
| $ | 34,352 |
| $ | 38,478 |
| $ | 36,853 |
|
| | | | | | | |
| Weighted-average diluted shares outstanding | (C) | 44,806 |
| 44,645 |
| 45,114 |
| 45,549 |
| 45,579 |
|
| Earnings per share - diluted (GAAP) | (A)/(C) | $ | 0.56 |
| $ | 0.57 |
| $ | 0.45 |
| $ | 0.51 |
| $ | 0.44 |
|
| Core earnings per share - diluted (Non-GAAP) | (B)/(C) | 0.58 |
| 0.52 |
| 0.45 |
| 0.52 |
| 0.52 |
|
| | | | | | | |
| Total non-interest income (GAAP) | (D) | $ | 31,871 |
| $ | 35,248 |
| $ | 26,595 |
| $ | 30,656 |
| $ | 31,178 |
|
| Adj: investment securities (gains) losses, net | | (225 | ) | (108 | ) | 21 |
| (62 | ) | (23 | ) |
| Adj: nonrecurring litigation recovery | | — |
| (3,750 | ) | — |
| — |
| — |
|
| Total core non-interest income (Non-GAAP) | | 31,646 |
| 31,390 |
| 26,616 |
| 30,594 |
| 31,155 |
|
| Net interest income (GAAP) | (E) | 70,581 |
| 67,633 |
| 67,950 |
| 68,420 |
| 66,330 |
|
| Total core revenue (Non-GAAP) | | 102,227 |
| 99,023 |
| 94,566 |
| 99,014 |
| 97,485 |
|
| Add: FTE adjustments | | 1,158 |
| 1,109 |
| 1,062 |
| 1,072 |
| 1,070 |
|
| Total core revenue for core efficiency ratio (Non-GAAP) | (F) | $ | 103,385 |
| $ | 100,132 |
| $ | 95,628 |
| $ | 100,086 |
| $ | 98,555 |
|
| | | | | | | |
| Total non-interest expense (GAAP) | (G) | $ | 62,113 |
| $ | 61,134 |
| $ | 60,214 |
| $ | 60,702 |
| $ | 66,198 |
|
| Less: acquisition & nonrecurring litigation expenses | | (1,197 | ) | — |
| — |
| (166 | ) | (5,566 | ) |
| Core non-interest expense (Non-GAAP) | | 60,916 |
| 61,134 |
| 60,214 |
| 60,536 |
| 60,632 |
|
| Less: amortization of core deposit intangible | | (875 | ) | (827 | ) | (827 | ) | (837 | ) | (842 | ) |
| Adj: OREO (expense) income | | (8 | ) | (140 | ) | 39 |
| (129 | ) | 720 |
|
| Non-interest expense for core efficiency ratio (Non-GAAP) | (H) | $ | 60,033 |
| $ | 60,167 |
| $ | 59,426 |
| $ | 59,570 |
| $ | 60,510 |
|
| | | | | | | |
| Efficiency ratio (GAAP) | (G)/[(D)+(E)] | 60.63 | % | 59.42 | % | 63.69 | % | 61.27 | % | 67.89 | % |
| Core efficiency ratio (Non-GAAP) | (H)/(F) | 58.07 |
| 60.09 |
| 62.14 |
| 59.52 |
| 61.40 |
|
| | | | | | | |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures - Continued
(Unaudited)
|
| | | | | | | | | | | | | | | | |
| | | As Of or For the Quarter Ended |
| (In thousands, except per share data) | | Sep 30, 2016 | Jun 30,
2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 |
| | | | | | | |
| Annualized net income | (I) | $ | 100,224 |
| $ | 102,778 |
| $ | 80,938 |
| $ | 92,960 |
| $ | 79,991 |
|
| Annualized core net income | (J) | 102,631 |
| 93,125 |
| 80,991 |
| 93,218 |
| 93,670 |
|
| Total quarterly average assets | (K) | 8,745,473 |
| 8,538,577 |
| 8,593,975 |
| 8,673,135 |
| 8,495,436 |
|
| | | | | | | |
| Return on average assets (GAAP) | (I)/(K) | 1.15 | % | 1.20 | % | 0.94 | % | 1.07 | % | 0.94 | % |
| Core return on average assets (Non-GAAP) | (J)/(K) | 1.17 |
| 1.09 |
| 0.94 |
| 1.07 |
| 1.10 |
|
| | | | | | | |
| Total quarterly average stockholders' equity (GAAP) | (L) | $ | 973,134 |
| $ | 948,837 |
| $ | 941,680 |
| $ | 945,462 |
| $ | 929,757 |
|
| Less: average goodwill and other intangible assets (excluding mortgage servicing rights) | | (215,130 | ) | (213,911 | ) | (214,797 | ) | (215,496 | ) | (215,829 | ) |
| Average tangible common stockholders' equity (Non-GAAP) | (M) | $ | 758,004 |
| $ | 734,926 |
| $ | 726,883 |
| $ | 729,966 |
| $ | 713,928 |
|
| | | | | | | |
| Total stockholders' equity, period-end (GAAP) | (N) | $ | 982,504 |
| $ | 965,125 |
| $ | 942,014 |
| $ | 950,493 |
| $ | 938,575 |
|
| Less: goodwill and other intangible assets (excluding mortgage servicing rights) | | (223,368 | ) | (213,420 | ) | (214,248 | ) | (215,119 | ) | (215,843 | ) |
| Total tangible common stockholders' equity (Non-GAAP) | (O) | $ | 759,136 |
| $ | 751,705 |
| $ | 727,766 |
| $ | 735,374 |
| $ | 722,732 |
|
| | | | | | | |
| Return on average common equity (GAAP) | (I)/(L) | 10.30 | % | 10.83 | % | 8.60 | % | 9.83 | % | 8.60 | % |
| Core return on average common equity (Non-GAAP) | (J)/(L) | 10.55 |
| 9.81 |
| 8.60 |
| 9.86 |
| 10.07 |
|
| Return on average tangible common equity (Non-GAAP) | (I)/(M) | 13.22 |
| 13.98 |
| 11.13 |
| 12.73 |
| 11.20 |
|
| | | | | | | |
| Total assets (GAAP) | (P) | $ | 8,973,847 |
| $ | 8,605,376 |
| $ | 8,690,680 |
| 8,728,196 |
| 8,604,530 |
|
| Less: goodwill and other intangible assets (excluding mortgage servicing rights) | | (223,368 | ) | (213,420 | ) | (214,248 | ) | (215,119 | ) | (215,843 | ) |
| Tangible assets (Non-GAAP) | (Q) | $ | 8,750,479 |
| $ | 8,391,956 |
| $ | 8,476,432 |
| $ | 8,513,077 |
| $ | 8,388,687 |
|
| | | | | | | |
| Total common shares outstanding, period end | (R) | 44,880 |
| 44,746 |
| 44,707 |
| 45,428 |
| 45,345 |
|
| | | | | | | |
| Book value per share, period end (GAAP) | (N)/(R) | $ | 21.89 |
| $ | 21.57 |
| $ | 21.07 |
| $ | 20.92 |
| $ | 20.70 |
|
| Tangible book value per share, period-end (Non-GAAP) | (O)/(R) | 16.91 |
| 16.80 |
| 16.28 |
| 16.19 |
| 15.94 |
|
| Average common stockholders' equity to average assets (GAAP) | (L)/(K) | 11.13 | % | 11.11 | % | 10.96 | % | 10.90 | % | 10.94 | % |
| Tangible common stockholders' equity to tangible assets (Non-GAAP) | (O)/(Q) | 8.68 |
| 8.96 |
| 8.59 |
| 8.64 |
| 8.62 |
|
| | | | | | | |
First Interstate BancSystem, Inc.
P.O. Box 30918 Billings, Montana 59116 (406) 255-5390
www.FIBK.com
