FIBK - Earnings call transcript Q4 2019 | First Interstate BancSystem, Inc.

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Operator

Good morning, and welcome to the First Interstate BancSystem Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I would like to turn the conference over to Ms. Slyter-Bray. Lisa ahead. go please Ma'am,

Lisa Slyter-Bray

Danny. Good our joining for you morning. quarter earnings Thank fourth for conference us Thanks, call.

our the future cautionary outcomes statements, As on our we factors could our in that most earnings this results annual in the release those SEC more forward-looking update as in Annual during those Report in direct all statements. release information and the forward-looking included materially the and factors materially statements I'd well contained Relevant or expressed the actual like the earnings by filings. cause begin, as please company call note actual listeners note to to undertake will that from may today. in factors with results our the from report filed differ any statements SEC. identified to any not risk provided of XX-K SEC filed made does results recent to with reports periodic Form regarding read that the forward-looking and could and statements affect recent contain The forward-looking differ are

of GAAP of fibk.com. measures non-GAAP copy the regarding website is our available use earnings our financial at at and a for the the release end financial earnings release most which be earnings comparable on is non-GAAP their A contains of found may directly financial measures of your measures our reference. in Information release body the to reconciliation included

our Kevin Officer, with and Mutch, Financial Marcy morning team. Joining along us Officer; from of members our management Riley, our Executive are Chief this other Chief management

Kevin? the turn I Reilly. time, this call over will to At Kevin

Kevin Riley

I'm of Marcy more for by to highlights again quarter Thanks, to the our on call and details Lisa. overview I'll off today you to and start our to call provide the the of over around Good joining major financials. going of morning, us then turn providing an all thanks today. us

XX.X facing low the short well a in in number still we notably quarter. the for growth, our ratio, of We reductions effectiveness and performance as common on reflects continued believe average management the our quarter, and XXXX business return of period, balance and sheet, sequential most GAAP On able diverse environment $X.XX on another by equity. with were challenging seasonally the The our earnings the headwinds average mortgage in this assets as of our Despite these per organization. net efficiencies million of loan ended We our strong strategies challenges, impact significant quality recent decreased earnings return all including quarter strength key the model interest improvement to quarter, income core we've fourth efficiency We metrics are generated term our on focus in built. deliver rates. generating related we the enhancing share. throughout share in basis, per $X.XX a Merger expenses or

basis On merger operating the excluded expenses related are all the an in periods.

from XXXX. earnings share prior of quarter the and up from penny fourth up a fourth Our quarter $X.XX X.X% or was per the quarter

the impact Despite our through For our two share our quarterly book per creation. to delivered tangible of in normal returning of million while dividends. value we shareholders full XX% we we strong believe year acquisitions, $XX.X a year, capital value increased approximately

quarter. in key at Looking our trends fourth the

in the impact that particularly success XX of against net occurred are our We margin rate protecting September point Fed the pleased October. funds with and the in interest basis in reduction

to to to asset rates. pressures this X reductions offset as yields interest the pricing, discipline well have continuing earning we basis interest our decrease points accretion of recovery in by quarter. of deposit on about maintained new we stability as net income loan margin impact through was attributed the ability relative pass in A saw our Excluding a and on loan operating our

our overall by reduce we XX basis the cost quarter, During points. of funds fourth

indicated we the along though it any pass though base depositors, particularly not rate of we've to customers. do to competitive even under increases number right interest As deposit thing our our we felt so. while were was We rising, Even for price times were is pressure our rates a not to do sensitive.

rising of we position net defend actually As cumulative beta of is were XX% which a during good in rate rate about through three a saw are XX% through over a rates last seen to result the margin. deposit passing declined, beta has period rising. we cuts deposit been the were beta cuts when rate We've about the higher helped that this when compared to basis cuts our a approach, our rates. pass On rates our interest the to

savings Looking client service to categories, able to quarter, lower quality of deposits on the the points. of and in speak on XX balances our declined demand fourth deposit other, declined deposit XX were particular for both points at while average basis our rate average base. while deposits our average increases the categories, In in which rate stickiness seeing basis the rates

as fourth excess to levels We keep to we quarter. despite relatively stable were able of production our loan lower liquidity saw continuing margins hold during the

returns. we continue our served don't by maintaining We that that loans are credited the for meet not chasing requirements best risk believe disciplines to and adjusted

downs due result, most balances and portfolio, to a a quarter, in was loan during criticized offs in we commercial notably large part which the slight pay of pay saw assets. As our in decline

Ag in also We indirect, saw portfolios. and season for held sell declines

growth enough portfolios, in wasn't did or and loan seasonal estate our organic real have declines our growth commercial portfolios. offset construction the in other to we While

during $XX the saw commercial construction We million increase portfolio in quarter.

in have forward clients confident their moving projects. and our outlook more of with Some the started become economic

stronger will in to optimistic loan production. are lead increase confidence line increase the utilization, that We and

our in to strong results our our expenses. this was quarter success key Another controlling

noninterest $X Entering the across Excluding merger company. greater expense the maintaining on total year, from expensive emphasis expenses related our prior the quarter. we million by put declined discipline

business. have leverage, realize able expenses, operating the and with we have As to added we controlled been scale in pleased been very improved we've the

fourth in have real the XX.X% quarterly of ratio from As a And quarter, efficiency prior XX.XX%. in result, if down been disposition to our quarter. recorded gains the take our would estate, out XX.X% efficiency ratio you all the improved under the

XXXX, can we efficiency our bring in XX%. For annual around believe ratio and we

with I'd to detail So to Go for turn the little it Marcy. numbers. Marcy like more ahead, those behind over a comments,

Marcy Mutch

Thanks, Kevin everyone. morning, and good

I of through our our otherwise statement. As begin of be the with prior walk financial And results the will unless quarter comparisons I'll income noted, period third all with XXXX.

partially excluding accretions, in income reported operating interest the in in and due point basis, decreased X the million margin increased prior increase net to loan a interest On net Our X.XX% The accretion to net basis a $X.X the income. to interest due margin quarter, decline X.XX%. in exclude was yields, points million operating $X.X this X increased from margin fourth quarter, basis loan to points. margin high with recoveries of X which basis XX strong impact in recoveries decline factors margin our quarter. operating overnight reduction interest of we a a These result third primarily our XX quarter negatively interest our offset to X growth basis point in liquidity, basis a partially late funds cost was and the reduction interest deposit due and The of funding, to were of our impact levels of held accretion basis of by by points. our excess continued the lingering points. which This basis X impacted in point remaining in

a decline our have the to starting cuts we assets. our to cost earning of continued liabilities bearing and point the not quarter. lower interest rate the of liquidity Fed our fourth in depositors, net for plan reinvest the We keep With year, higher saw foreseeable point, excess can through relatively we pass cost we meaningful deposit At deposits we as focused stable we rates. interest opportunities margin to in our to we make changes As our offset enter this the asset any on the steady future. for do our throughout believe on our additional yields we're pressure yielding

non-interest income, mortgage entirely see to due decline decrease lower saw to decrease million million in the reflecting the was the $XX.X over to revenue, Moving we a banking quarter. almost fourth quarter quarter at $X.X we seasonal

areas fee consistent were with other prior major our the of All relatively generating quarter.

rates. the we're our the revenues This decreased banking prior quarter, XX% million from $X.X for XX% the accounted year. refinance the newer a activity increased quarter markets of as as as in production last quarter purchases result refinancing reflects total but from accounted or fourth activity fourth up the of home interest production, In West, lower well of Mortgage originated increased getting was from for of loans XX%. for XXXX,

$XX to traction, gain digital we this closed of to portal and XXXX. Our channel loans mortgage in originating million continues new application

total expense, acquisition Moving approximately expenses related in quarter. $XXX,XXX this non-interest incurred to we

was initiatives than with lower the non-interest a in Excluding came expense acquisition number on million, we million of the fees earlier driver the related decline The in technology we our $X if quarter. executed primary of prior lower completed or at professional expense, XXXX. $XX

credit assessment prior expect continue see monitoring that relatively as major from FDIC We levels. benefit reduced this with expense wraps again there. also we recognize our the the $X.X quarter were our our the areas other expenses closely We And to to to expense quarter. up that keep able consistent once the million focus we on

back our expenses guidance out operating credit adjust and provided if $XX.X the you costs million expenses of gains, million been mortgages little noise previously million, for deferred $XX.X the QX OREO our on we of integration the about are at looking a of normalized acquisition total, In $XX rate acquisitions. recent FDIC to related run post had would the have achieving and we

level. on rate our in between as XXXX, you of keep to $XX able X% we've operating million $XX in expect about growth increase the past, to forward, average. in million X.X% the operating and XXXX, for run our a expense to This is Going we're in range expenses X.X% be we total to guided

this higher expense impact revenues. to which taxes. payroll non-interesting to to lower or to of we time statement typically quarter, services the mortgage expect of At the trends due seasonal our our lower my like items. impacts restart And get non-interest transaction payment income at our volumes, various the due point, same annual see and trend come In the I'd first reminder

the Okay, I'll move to balance on sheets.

prior million portfolios. end payoffs the of $XX driven pay portfolios, and and decreased loans with total along declines consumer in the and Our was downs the by indirect commercial This ag in quarters. the seasonal from

million. the less declines were also these million credits off shared $XX national The partially $XX million portfolio down in commercial loans. snick portfolios now in is The a to commercial increase offset than the portfolio of quarter. $X.X construction paid Within by in

million we payments. the growth non-interest are for yearend to to outflow commercial pleased the of decrease $XXX from from deposits was which items the depositors for the quarter. bonuses prior and tax of our year like organic due total Overall, of our end decline largely seasonal in deposits, came Most with Our bearing X.X%.

million $XX This Looking at saw disposition in in most to we trends nonperforming other about half due positive properties, our an assets. key quality, four OREO. the of represented metrics. of real had decline of estate asset which We our was

we related recognize four $X.X these OREO the For from of the resulting income sale in quarter properties. million

The other decrease nonperforming contributor to was nonaccrual the decline a loans in of $X.X million. assets in

from non-performing the points of end at percentage of assets a at quarter. XX total nice non-performing As the in basis we basis of XX prior a Outside points declined saw the rest asset portfolio. assets our of improvement category, the the

Our million criticize off we of pay as pay decrease down higher had quarter. this $XX levels to loans

work year to issues of hard As resolve number ends. we a before

million points XX an net basis. or basis average $X.X the loans charge-offs annualized in have quarter during on We of

$X.X had impacted net a charge-off which were quarter established by million against million $X.X Our a it. of loans this to related specific reserve charge-off commercial

the levels with quarter. our historical loan XX We higher also were typical charge-off is points, quarter loan fourth which in charge-off, fourth saw quarter consumer in which is this Consumer of line trends. basis

expense. for million migrate $X.X required portion provision to continues expense this loans provision quarter. our expense of provision refinance accounted We these recorded over acquired in to portfolio. A $X.X against These related the for the and to originated of that be million portfolios reserves approximately

of non-performing while allowance increased for of the loans Our point the basis loans, our losses points quarter basis total X XXX%. to loan prior XX by from declined coverage of end to

losses the with represents but X.X% of remaining loans. you was combination acquire new take portfolios effective standard That allowance once January CECL of X. current to loan not does credit discount related accounting the As the acquired consideration, total know, said, on the expected the or allowance into

to XX% the for our result expect in of XX% a to allowance to losses. increase implementation We loan CECL

to $X.XX requirements. At provision In obviously variables our ultimately along for recoveries the quarterly the XXXX, that implementation many terms there to expected our determine will of approximately with increase are provision million point impact of provision CECL lower believe result that an will our normalized of levels per likely XXXX of expense, in this we quarter.

over And I'll turn Kevin. that, to it with back Kevin?

Kevin Riley

a outlook. going about comments with our Marcy. to Thanks, I'm up few wrap

X executed approximately markets. franchise. we well muted growth increased had organic for We strategy acquisitions the our X.X% for XXXX, strengthening loan During year. faster-growing completed that in we our our In in presence XXXX, of

West larger year, we With increases faster can percentage this as growth revenue. to continue levels comprising in overall to Division consumer of mid-single business and the fee footprint of generate higher we as growing the loan market believe in low generate well a digits quality our and confidence,

We also streamlined completed our that services, technology banking digital capabilities improved and initiatives our products expanded and flows. work major process our

our of development result business an business consumer application credit enhance card new digital with mortgage all improved capabilities XXXX investments, enter application a year. this portal, should these we As which portal, digital a

investment so of improve engagement. can the on focus products One initiatives have of made client that our these our employees we key to on leverage is new we effectively to our year this training

also in new and that experience network customers. we're enhance a teller in system efficiency our investing XXXX, for In branch our improve will

a Over and services. array talked community a range have a of bank bank years, few how to products from serving of capable broader regional the evolved with a clients Interstate past First of a has diverse we about lot

We to appointed innovation Officer of evolve industry. executive we called position and recently to the made forefront ranks Strategy former banking and in We the continue have chief new Chief banking at our our Newman to remaining adjustments to officer commitment to a Renee our created the position. strengthen

changing focused was to which needs now the the retail, Inland wealth the and Russ offer. our banking experience is is Lee, of Northwest we're across teams. we management a deliver of our banking officer well-positioned who ensuring president meet Renee that and clients rapidly for CEO channels XXXX, and overseeing Bank with back Officer, satisfying acquired chief commercial responsibility Strategy in of our growing number a that Chief As we on

that future While to decades basic blocking believe our separating across we to our focuses traditional Renee of the without functions and our the network on losing the on consistent positioned be Russ better rigor By strong performance. ensures will focus maintain tackling that success. branch innovating two banking, of we maintain and to led we needed these continue

will will are to employees As hour. this wage after-tax about the we our a continue has we -- of for per grow to run First in higher returns which impact our leading fulfill a and our is included client basis quarter $XXX,XXX engagement in minimum of citizen. With We to retention, in will and a impact be in this will to mission an mind, corporate Interstate articulated. and higher already rate communities the position us franchise, be expenses This ultimately move satisfaction, shareholders. we results raising Marcy positively believe our our well an leader employee for us responsible $XX that

and capitalize management. deliver on the enhance leverage we realize We of clients for have do employees, to, will to our We our solid we our increase and As we XXXX. wrap focus perspective, coming good long we feel have start footprint thing and have of to believe scale, to from have continue franchise to revenue expense good opportunities markets we'll our And operating we efficiency, should on when earnings deposit to right foundation this in is growth and continue the generate the to faster-growing add a to to a a we positioned philosophy didn't To rates we're more growing leverage built how year up, we about for of raising years. believe shareholders. in shareholders. our the value term growth our continue

for questions. to So like with open the call that, up I'd

Operator

Shaw Jared - Q

trying what in everybody. dynamics or environment guess the self-imposed at beginning just growth your pressure loan then low changed? morning, on the at Good starting XXXX. more credit was that you see about the some Was What's growth that whole tying changing? out? of just mid-single-digit was dynamic those downs do net the the change to there you then for your weaker the loan you it and Kevin, year XXXX? loan to most with comment were look I what's call, of as to And Thanks. talking the loans it expectation and as move more saw maybe and how challenging for growth you pay for challenging and

A - Kevin Riley

We kind points, of thing of hit the a job. lot is strange year Jared. that The this Nice a year. was

with fall -- I yield Also in war, the the competence so community in I curves, to interest think Wyoming continues inverted our rate kind not business favor some pressure think all actual that out on puts that Wyoming. on trade of coal with markets. has cuts, the weighed growth of whole

So behind curve us. is The behind is is that the us. of yield trade think that's us. thing I behind inverted The war kind kind of

behind think asset cleaned effectively we've and Our quality, I of us. up that's kind

Our $XX stick under that We're down more with us. any portfolio have runoff, that's behind million, us. so headwinds won't

So away. the that XXXX we had I lot headwinds have a gone in back think that of

think with little things our some them on that a these projects. they're out business behind of we're are more and because to starting I move seeing bit confidence there partners forward

go of had call; to weren't going. talked earnings a the in moving quarter, economy about where our how because last confidence they projects forward we but you lack If lot funded people I is back

I I think think we're has some of that nicely. moving And improved. forward

move pandemic I be So we we virus I and If can have this will feel XXXX continue kind forward year think doesn't the market. don't to just any better. explode, our for continue that good environment to of-- is a

headwinds think us I looks brighter. are lot future kind and a all the the behind of So

Q - Jared Shaw

Marcy, up side, to quarter, down -- most when should about here guess Thanks of that's is And talked sure on tech some back efficiency professional expect we from system guidance you beyond the go for your this that that to the ratio roll of fees expense or color. mentioned just for or others going the that will on I growth where that you the of the of minimum some teller as the come see initiatives wage? raising and those in the

A - Marcy Mutch

over. technology kind bring have of managed is increases, expenses their the increases back costs just in but our We increases really increase general contractual that of salary to we've which some down. driving That

professional stay flat kind We year. of fees expect for to this

to don't So I increases see there. we're think going any again, real

and of managing bit So salary just increases. little on then of FTEs costs. the normal a kind the But technology increase

Riley - A Kevin

The up fees, bit costs a with they like spent Dealing is come a XXXX. normally that in technology thing do. lot little overall professional we

So we the believe XXXX less We did flat. XXXX. don't levels increasing since invest over the than year. be spend in we XXXX a lot this will the see About it

A Marcy - Mutch

So think, just our again, increase merit your being to overall total X.X% raises I normal to raises pretty hold employees of able give light expenses and having to in good. is

Q - Jared Shaw

thanks. Okay,

banking mortgage finally, I So just looking the into the seasonality and quarter? at the guess, then the end at first everything for what's going and into pipeline me; of the looking how's holidays going year

- Riley Kevin A

little slow. a It's

always we above forward. is activity still going some quarter will going first people the be would there. in see we're say to rates the the in move But seeing be I it's that that But production not some as not with way to the robust and refinancing they quarter. slow. First are, it's with It's the summertime.

- A Marcy Mutch

it help nice could keeps If seeing this bit. are up, little We a weather. some

be this is overall, compared mortgage should the we next think year. revenue it flat to again, where banking fairly So year

Kevin Riley - A

degrees in is January in Montana pretty nice. XX

Q - Jared Shaw

Thanks, All great. lots right, of color.

Operator

Rulis question. comes question from with ahead go Jeff from Davidson. DA Please your next Our

Q Rulis - Jeff

pricing kind color of mentioned the large kind could loan on demand digging but -- challenges, Morning. a footprint the deeper Kevin, Montana the the appreciate characterize dynamics growth given versus dynamics markets. you of the Western your and little you if with

more you assuming if Just you're in in demand sort touch out terms could competition of seeing just that'd footprint in I'm of growth what west be you're interested but seeing helpful. that pricing, on

Kevin - A Riley

kind is interesting. pricing Loan of

and credits extremely credits the better larger gets tight. to go pricing you As

willing take looking to are people nice think pricing. with and I big they're for lower hits credit

we middle We go business, we we we're loan core get is on do. but if want market deals I which to in But keep with don't it's look the spread those less to Is and our do just But where that stay are normally But small-middle bigger that on business, we looking make deals, and that, the but can maintain small when any best we the say or doing at against continue people put on spreads. would small spreads just will market, really at deals, larger what just west more find sense. is don't to tight. trying we volume.

why lot out don't putting eroding. there's no people their margins cost out use I is eroding. funds, at think many your margin When brainpower spreads you are to to a -- so XXX wonder need the you're of figure why of

Q Rulis Jeff -

Thanks. can't it. Marcy, missed dynamic on maybe I remember, the on I the margin. The --

I XX look basis you point basis XX that's makeup interest could If XXX accretion in what guess recovery? the reported the the you of of was core, that points kind at and XXX and was out break what If possible, number.

A Mutch - Marcy

You bet.

had we charged payoff points X related basis We accretion. up interest. X points basis X early due regular had and point to to basis So

Rulis Q - Jeff

Got margin of more the from try your any, on it. to kind let's maintain that outlook XXXX? into core Is as we XXX on of perspective? it And commentary a, guess, I get then

A - Marcy Mutch

into to be be It but That's think bounce or might margin XXXX. we're we down believe point hard that two relatively We maintain. what core stable basis should that going going stable. a working to it's

Riley Kevin - A

maybe the We the some book, also CD stable. it pace in a be maybe on first be repricing We impacted but which have but pressures some a quarter. pretty is little believe basis the a relief at bit point should have margin on that CECL might we by our great

Rulis Jeff - Q

Thank you.

Operator

comes Matthew Sandler. go Clark question ahead from question. your next Please Piper from Our with

Matthew Clark - Q

Good morning.

deposit? here. may the costs, deposit spot at just rate decline on the interest-bearing us you give the start You Can slow to end of mentioned year the

Mutch Marcy - A

On basis deposits interest-bearing XX rate points.

Clark Q - Matthew

I to haven't drag the yet. and And done be then liquidity excess continued math more of a has Okay.

points cost was quarter. assume it here think quarter. X last I more a little this basis you I it

Mutch Marcy - A

pushing that The XXX. XX closing are so We're on the we pushing down. it on we're down, days very to it be part and growth is on not loan today lower adding number because hard securities that ago, that we're X%; seeing going was focused

get So lift we'll will get we see there. we some hiccup what can there but

talked CDs, Kevin about in the running with deposits of about As time the XX% our just are off quarter. first

So If those rate those offering is XX our basis the rate XXX. average we on deposits, maintain points. current is

be we pick again, see there as well. up to some So should able

Q Clark - Matthew

And this Okay. then, I year? guess, what's your accretion estimate for

A Mutch - Marcy

about Accretion should be $X.X quarter. million per

Clark Q - Matthew

Okay. And that's CDI guide the of XX%, efficiency all in. not amortization? excluding then That's

- A Marcy Mutch

excluding is amortization. CDI It

Matthew Q - Clark

It is okay, you. that Thank helps.

Operator

Our from comes with go question. next Stephens. your Maguire question ahead from Please Gordon

Q - Maguire Gordon

morning. Good

the small last Kevin's the to efficiency. revenue about to Just on XX% issues this been any in about but I And you've efficiency like of of color prepared a talking talked can it remarks there? it's following wondering, what's lower a on it's XX% guidance XX%. sounds end to little the give bit maybe a year. the pretty being changed similar after I'm expense quarter given But what side? change you know Marcy, just closer you

Mutch - Marcy A

I our two quarter acquisitions. think have revenues from we're to of another going

growth year. We're our do We non-interest expecting this are growth expecting to around in loan some mid-single-digit income.

the efficiency should we help and think side. leverage that us just I So on ratio operating get

A - Kevin Riley

of budgeting higher our little we completed gave work. point that. hadn't a guidance from XX of But is kind the Just XX, we

what everything number I exactly dug be. better. and mine is that have now decide deeply like guess have it's we and feel in going we We to

be there. to So it's right going around

asset starting closer thing head I toward try we're think goal to XXX. ratio that to expense to of our We're to continue our the and is to that and looking goal. down that we reduce bring

our to be operating possibly leverage. going about get expenses we sadly, We're But the good the feeling we're revenues can increasing headwinds Revenue levels. everything So do introduce but are higher. are there. to going expense to

the of headwinds really ahead us. might Just be

A - Marcy Mutch

the fourth got quarter and at If expenses, our back ratio. you XX% out efficiency look to we acquisition the just

Maguire Gordon - Q

over you that little think bit provisioning. and CECL I Great. back a Marcy, have may Could again? the misheard. the discussion I go

A - Marcy Mutch

XX%, expect $X.XX lower the each between allowance provision expect we terms expense quarter. to increase And someplace so we this levels it land for million credit So come and in there. be of in our in then in we to expect our around of year, recoveries, and XX%

Q - Gordon Maguire

Okay.

I thought of $X.XX million. said Sorry, you had increase an

it's absolute. So

- Marcy A Mutch

total in No, per quarter. $X.XX million

Gordon McGuire - Q

Okay, performance quarter? impacts in the thoughts the it thank And lastly, valuation then on your stock couple so the your or months any thinking around year M&A just changes for you. current last and prospects since Kevin, last how whether given repurchases this

A - Kevin Riley

a them is as all And we leverage grow let's the and capital to of conversations -- think thing of and with that about shareholders all, institutions. lot group combine the fit regards think be up, of premiums, are pull the I to have because of going virgin a to to actually, forward conversations -- in a announce know, going going acquisitions deal about want are just on, Well, We regards both more there's you but for we regards with lot levels conversations to lot stuff. there's less I it turning as we interesting first what utilization. talk that, healthy, the on I sense of and a we're makes down don't a think

So, made to book have tangible it's about -- value I think being healthy discussions focused along not and they're and they're payback. to big premium are a that trying

happening was a we'll there's So are conversations four I lot would very ago. tell but and you see more interesting I then, think productive what happening months world happens. that an It's they

Gordon - Q McGuire

then repurchases? And thoughts on updated

A Kevin - Riley

believe is than capital effective payback of less than at five our year we this TAM repurchases is more value points the We year our shareholders. a value price we our try gives of repurchases limit book stock book to have a don't Repurchases, use dilution. what right we at now is us tangible return, so until the it most for see five

shareholders we and there this options. our it to we are But levels we all the alternatives need return stock looking of down we're our other at juncture at to that and our buy we that can So to back. hope really doesn't drop capitals

Q McGuire - Gordon

thank Great, you.

Operator

with next go Bohlen Jackie question comes KBW. from your from Please ahead Our question.

Jackie - Q Bohlen

bumpy I banking wanted that, but income bit. about some items. then good in from morning. in just know those at that impact just seasonal quarter? go just of the non-interest mortgage that a I talked and was I line Hi, know item on a volume could there we but we're your you be the to down the slowdown into And just lower I little expectations into for to was drill wondered line XQ looking the income see year? little other other the expected can bit if just going also side. what

- Marcy Mutch A

So, with income let's start other line.

other a it that's does to sale life swap that, little it on benefits, little quarter because from the of varies of can all embedded and that quarter a be insurance bumpy fully gains have know, a line quarter, quarter. or to if income income So bit things kind that in line feel we a you building bumpy bit includes, like

of and So down. drives that's going what kind up that

our next we of terms rest be year they'll of up overall X%. believe fee really based do revenues, the In that about

Jackie Bohlen - Q

you of flat expect? inclusive Okay. And the that banking that's mortgage roughly

Marcy - Mutch A

Yes.

Q - Jackie Bohlen

already you. everything I thank Okay, discussed. been And is you. had else Thank

Riley Kevin - A

Thanks, Jackie.

Operator

from Garrett comes question next question. ahead Please from with go Holland your Baird. our And

Holland Garrett - Q

morning. good and Thanks

growth appetite a for with gauge to loan rates? had the portfolio asset here current securities income, securities these spread growth, stabilizes line earnings just you think liquidity you Just deploying would or follow-up your and do in on expect at trying trend to

Mutch Marcy - A

that lessons being excess loan that growth. depend we this liquidity of get diligent work. we're loans. It we're We're securities will all hoping in make put to to sure to But more putting on

second and first growth, put investment then portfolio. our growth, second, we quality order loan it in our So businesses loan order

all. because this hoping virus Just help they'll us disappears soon

Q - Holland Garrett

elaborate on I in you Idaho a to maybe of was the driver expectations and could growth bright guess recently. in the see it's growth northwest a hoping a XXXX? you what opportunity bigger your in market been your for I spot are more bit in growth the clearly market, that

Riley Kevin - A

the get to with digits doing double in the single which that. the Oregon's single a to The really growth digits. digits strong outskirts look but Idaho growth is which and very they're say could been going be on great. to doing in great high expansion. good XX into those markets strong our because digit going city, XXXX. would it's high lane strong; in Everything be we it's I has Coral Washington west doing right double is of know, being and great, markets feel you is the and Spokane, or

of City well. that's continues also. is nice probably know, legacy to too, that portfolios our hoping a have Dakota is is area well. don't doing digits some legacy mean grow in in Sioux a forget markets You Bozeman Billings, comeback. doing Rapid South mid-single we we're growth I

little a to look bit have a Wyoming Wyoming, of We kind is flat. be drag of going we at when but

single be higher probably looking the in for Montana low then the Montana, growth mean Dakota, digits, I West. we're And know, You South mid.

we So to have Montana. continue Wyoming it's really to drag and the really West regards not in and grow with a

was digits just Our last good Montana of should West the and that because year, be the drag it real Wyoming grew of in growth upper that had down. not pulled in the rate they the growth mean, single I

will our get and good to feel we just footprints grow can growth. strongly legacy have the that we little a that loan So continue come bit West up will

Q Holland - Garrett

the are here quick higher expectations rate one detail. on in that expected And for XXXX? QX, a then I than guess Thanks is your bit tax what for

A Mutch Marcy -

and the the level, about as people little around benefits for right from be there's that for tax always it's XX% overall year think XXXX we options, know, XX%. of the will that investing rate beginning a bit lower of kind but the year some exercise You there, at

Holland Garrett - Q

That's great. for the Thanks taking question.

Operator

a from Piper question next our from follow-up Clark Sandler. Matthew And is

- Clark Q Matthew

business quarter? ones. we new what off on paid to two this Just relative One, quick trade never just

Marcy - Mutch A

on the business. the weighted was average new XXX rate

Q Matthew Clark -

picked situation. in I’m credit And how for but working potentially then the get improvement resolving of Okay. this at trying up? upgrades by just guess guess I for much guys when stuff quality nice driven decline criticized. here, that out to was in the how just much that quarter, I was change sense of rate look selling you or you a of

A - Kevin Riley

is those, upgrades, worked out we no us, like they They which door. with say, they of the saw longer most Most, it. the were are way and weren't

Clark - Q Matthew

this any sell non-performers you Did quarter?

Riley - A Kevin

know, we my I at Chief Risk, looking did any non-performers? don't sell I'm

A - Gaglia Philip

all It working successful. No, was we were any out not that non-performers. sell did strategies

Q - Matthew Clark

to is Is of more that or pace just or the of that continue kind that a expected kind is year-end? trend

- A Kevin Riley

mean So there. I news not good we We that pace. continue that that working But inflows if much that the that. and down. is lucky are get left. know don't to you I don't have we're going The continue

to be not less continue the inflows they there. have should so where at we'll are outflows, at or to continue because they're So

Clark Matthew - Q

Thank Great. you.

Operator

remarks. that Ladies turn to and like closing call back question-and-answer for end over point, At I'd with today's any gentlemen, this conference the session. we'll

End of Q&A

Kevin Riley

Thank your questions, [ph]. gals you and for guys

if analysts As investors have from for and investor calls. always, Please follow-up or thanks out we tuning in and us reach between you Goodbye. questions, welcome any our to during today. calls

Operator

does thank that gentlemen, today's you conclude and presentation. call. Ladies today's for We joining do conference

disconnect may now You your lines.

First Interstate BancSystem (FIBK) 30 Jan 202019 Q4 Earnings call transcript