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| 8-K - 8-K - FIRST INTERSTATE BANCSYSTEM INC | fibk20160630-8k.htm |
For Immediate Release | ||||
Contact: | Marcy Mutch | NASDAQ: FIBK | ||
Chief Financial Officer First Interstate BancSystem, Inc. (406) 255-5322 investor.relations@fib.com | www.FIBK.com | |||
First Interstate BancSystem, Inc. Reports Strong Second Quarter Earnings;
Announces Quarterly Dividend of $0.22 Per Share
Billings, MT - July 25, 2016 - First Interstate BancSystem, Inc. (NASDAQ: FIBK) reports second quarter 2016 net income of $25.6 million, or $0.57 per share. This compares to net income of $20.1 million, or $0.45 per share, during first quarter 2016, and $22.2 million, or $0.49 per share, during second quarter 2015. During second quarter 2016, the Company recorded a non-recurring recovery of $3.8 million related to prior year litigation, which the Company considers non-core. Exclusive of non-core income, second quarter net income was $23.2 million, or $0.52 per share, compared to $20.1 million, or $0.45 per share, during first quarter 2016 and $22.2 million, or $0.49 per share, during second quarter 2015.
HIGHLIGHTS
• | Core pre-tax, pre-provision net income of $37.9 million, a 10.3% increase from first quarter 2016 and an 8.2% increase from the same period in the prior year. |
• | Net interest margin ratio of 3.55%, a 1 basis point improvement from first quarter 2016 and an 8 basis point improvement from the same period in the prior year. |
• | Total fee-based revenues of $30.7 million, a 19.1% increase from first quarter 2016 and a 6.1% increase from the same period in the prior year. |
• | Mortgage banking revenues of $9.4 million, a 53.2% increase from first quarter 2016. |
• | Loan growth of 6.1% year-over-year, of which 5.3% was organic. |
• | Loan to deposit ratio of 77.5% as of June 30, 2016, compared to 75.0% a year ago. |
• | Core efficiency ratio of 60.78%, as compared to 62.71% during first quarter 2016 and 63.14% during second quarter 2015. |
“We delivered a strong quarter driven by a significant increase in loan production, higher contributions across all of our major non-interest income areas, a stable net interest margin and improved efficiencies throughout the Company,” said Kevin Riley, President and Chief Executive Officer of First Interstate BancSystem, Inc. “We generated 3.2% loan growth during second quarter with balanced contributions across the portfolio including strong increases in commercial real estate, construction, consumer and agricultural lending. Our position as a leading residential mortgage lender has also enabled us to capitalize on the positive housing trends in our markets and an increase in mortgage lending activity. As a result, we had a very strong quarter in mortgage banking. Going forward, we expect to see a continuation of these positive trends in revenue and operating efficiencies in the second half of 2016,” said Mr. Riley.
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DIVIDEND DECLARATION
On July 21, 2016, the Company's board of directors declared a dividend of $0.22 per common share payable on August 12, 2016 to owners of record as of August 1, 2016. This dividend equates to a 3.2% annual yield based on the $27.97 average closing price of the Company's common stock during second quarter 2016.
NET INTEREST INCOME
The Company's net interest income, on a fully taxable equivalent or FTE basis, decreased $270 thousand, or less than 1.0%, to $68.7 million during second quarter 2016, as compared to $69.0 million during first quarter 2016, primarily due to a decrease in total earning assets as a result of seasonally lower deposits. The Company's net FTE interest income increased $2.3 million, or 3.5%, to $68.7 million during second quarter 2016, as compared to $66.4 million during second quarter 2015. This increase was primarily due to a shift in the mix of interest earning assets from lower-yielding investment securities into higher-yielding loans, which was partially offset by an 11 basis point reduction in loan yield during second quarter 2016, as compared to second quarter 2015.
Interest accretion attributable to the fair valuation of acquired loans contributed $1.7 million of interest income during second quarter 2016, of which approximately $779 thousand was related to early pay-offs. This compares to interest accretion of $1.6 million of interest income during first quarter 2016, of which approximately $549 thousand was related to early pay-offs, and interest accretion of $1.6 million during second quarter 2015, of which $470 was related to early pay-offs. In addition, the Company recovered previously charged-off interest of $133 thousand during second quarter 2016, compared to $265 thousand during first quarter 2016 and $753 thousand during second quarter 2015.
The Company's net interest margin ratio remained stable at 3.55% during second quarter 2016, a 1 basis point increase from 3.54% during first quarter 2016. Exclusive of the accelerated interest accretion related to early payoffs of acquired loans and the impact of recoveries of charged-off interest, the Company's net interest margin ratio was 3.51% during second quarter 2016, 3.50% during first quarter 2016 and 3.40% during second quarter 2015.
NON-INTEREST INCOME
Non-interest income increased $8.9 million to $37.0 million during second quarter 2016, as compared to $28.1 million during first quarter 2016. During second quarter 2016, the Company recorded a non-recurring recovery related to prior year litigation expense of $3.8 million. The remaining increase was primarily due to increases in fee-based revenues, most notably mortgage banking revenues.
Mortgage banking revenues of $9.4 million during second quarter 2016 increased $3.3 million, or 53.2%, from $6.1 million during first quarter 2016, primarily due to seasonal increases in loan production volume and, to a lesser extent, increases in margins on loans sold into the secondary market. During second quarter 2016, the Company's overall mortgage loan production increased 41%, as compared to first quarter 2016. Loans originated for new home purchases accounted for approximately 67% of the Company's mortgage loan production during second quarter 2016, as compared to 59% during first quarter 2016.
NON-INTEREST EXPENSE
Non-interest expense increased $1.2 million to $62.9 million during second quarter 2016, as compared to $61.7 million during first quarter 2016. During second quarter 2016, as compared to first quarter 2016, increases in incentive compensation expense were partially offset by decreases in payroll taxes and one-time separation and special bonus expenses.
Non-interest expense increased $924 thousand to $62.9 million during second quarter 2016, as compared to $62.0 million during second quarter 2015. During 2016, the Company incurred additional non-interest expense as a result of its focus on getting the right people, processes and technology systems in place for future growth. Non-interest expenses recorded during second quarter 2016 were partially offset by lower fraud losses and contract termination fees, as compared to second quarter 2015.
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 second quarter 2016, as compared to second quarter 2015.
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LOANS
Total loans grew organically 3.2% to $5.4 billion as of June 30, 2016 from $5.2 billion as of March 31, 2016, with the most significant growth occurring in commercial real estate, commercial construction, indirect consumer and agricultural loans. Commercial real estate loans increased $52 million, or 3.0%, to $1.8 billion as of June 30, 2016, from $1.8 billion as of March 31, 2016, and commercial construction loans increased 14.9% to $118 million as of June 30, 2016, from $102 million as of March 31, 2016. Management attributes this growth to continued business expansion in the Company's market areas, particularly in the Billings, Jackson and Rapid City markets.
Indirect consumer loans increased $37 million, or 5.6%, to $688 million as of June 30, 2016, from $651 million as of
March 31, 2016, primarily due to the continued growth of our indirect lending program within our existing market areas and continuing increases in the average loan amounts advanced during second quarter.
Agricultural loans increased $14 million, or 10.8%, to $140 million as of June 30, 2016, from $126 million as of March 31, 2016, and agricultural real estate loans increased $14 million, or 9.0% to $167 million as of June 30, 2016, from $153 million as of March 31, 2016. This growth is primarily attributable to seasonal increases in credit lines that typically occur during the second and third quarters of the year.
Year-over-year, total loans increased 6.1% to $5.4 billion as of June 30, 2016, from $5.1 billion as of June 30, 2015. Exclusive of acquisitions, the Company experienced organic loan growth of 5.3% year-over-year, with all loan categories except agricultural loans showing increases.
DEPOSITS
The Company historically experiences a slight decrease in total deposits during the second quarter of each year. Total deposits decreased 1.8%, to $7.0 billion as of June 30, 2016, from $7.1 billion as of March 31, 2016. This compares to a 2.4% decline experienced during the same period in the prior year. Year-over-year, total deposits increased 2.6% to $7.0 billion as of June 30, 2016, from $6.8 billion as of June 30, 2015, with all categories except time deposits experiencing growth. As of June 30, 2016, the mix of total deposits was 26% non-interest bearing, 30% interest bearing demand, 29% savings, and 15% time, as compared to 26% non-interest bearing, 30% interest bearing demand, 27% savings, and 17% time as of June 30, 2015.
OTHER LIABILITIES
Other liabilities increased 25.6% to $82 million as of June 30, 2016, from $65 million as of March 31, 2016, largely due to increases in deferred tax liabilities primarily related to fluctuations on unrealized gains and losses in investment securities, and increases in derivative liabilities associated with interest rate swaps and mortgage banking forward loan sale commitments.
CAPITAL
At June 30, 2016, the Company exceeded all "well-capitalized" regulatory capital adequacy requirements. During second quarter 2016, the Company repurchased and retired 27,635 shares of its Class A common stock with an aggregate value of $733 thousand and paid common stock dividends of $10 million, or $0.22 per share.
CREDIT QUALITY
Credit quality declined during second quarter 2016, with non-performing assets increasing to $87 million, or 1.01% of total assets, as of June 30, 2016, from $77 million, or 0.89% of total assets, as of March 31, 2016. Non-accrual loans, the largest component of non-performing assets, increased $10 million, to $74 million as of June 30, 2016, from $64 million as of
March 31, 2016. Approximately 68% of the increase is related to hospitality industries and is the result of placement of the loans of four commercial real estate borrowers on non-accrual status during second quarter 2016.
Criticized loans were $360 million, or 6.6% of total loans, as of June 30, 2016, compared to $347 million, or 6.6% of total loans, as of March 31, 2016. This increase in criticized loans was primarily concentrated in commercial and commercial real estate loans, with approximately 22% of the increase related to loans in the energy sector.
During second quarter 2016, the Company recorded net loan charge-offs of $2 million, which was comprised of charge-offs of $3 million and recoveries of $1 million.
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The Company's allowance for loan losses remained stable at $80 million, or 1.48% of period end loans, as of June 30, 2016, as compared to $80 million, or 1.52% of period end loans, as of March 31, 2016. In determining the allowance for loan losses, the Company estimates losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the allowance for loan losses is based on internally assigned risk classifications of loans, historical loan loss rates and other qualitative factors such as changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates. During second quarter 2016, the Company performed an in-depth review of the qualitative factors used in determining the appropriate level of the allowance for loan losses utilizing post-crisis loss experience. This review resulted in the adjustment of certain qualitative factors. The adjustment of qualitative factors combined with the Company's assessment of losses on specific loans with identified weaknesses did not result in a material impact to the overall level of the Company's 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 travel expenses and 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
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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.
Second Quarter 2016 Conference Call for Investors
First Interstate BancSystem, Inc. will host a conference call to discuss second quarter 2016 results at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Time) on Tuesday, July 26, 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 July 26, 2016 through 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time) on August 26, 2016, by dialing 1-877-344-7529 (using conference ID 10089295). The call will also be archived on our website, www.FIBK.com, for one year.
About First Interstate BancSystem, Inc.
First Interstate BancSystem, Inc. is a financial and bank holding company incorporated in 1971 and headquartered in Billings, Montana. The Company operates 76 banking offices, including detached drive-up facilities, in 44 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.
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FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Quarter Ended | % Change | ||||||||||||||||||||
(In thousands, except share and per share data) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | 2Q16 vs 1Q16 | 2Q16 vs 2Q15 | ||||||||||||||
Net interest income | $ | 67,633 | $ | 67,950 | $ | 68,420 | $ | 66,330 | $ | 65,288 | (0.5 | )% | 3.6 | % | |||||||
Net interest income on a fully-taxable equivalent ("FTE") basis | 68,742 | 69,012 | 69,492 | 67,400 | 66,399 | (0.4 | ) | 3.5 | |||||||||||||
Provision for loan losses | 2,550 | 4,000 | 3,289 | 1,098 | 1,340 | (36.3 | ) | 90.3 | |||||||||||||
Non-interest income: | |||||||||||||||||||||
Payment services revenues | 8,648 | 7,991 | 8,367 | 8,574 | 8,437 | 8.2 | 2.5 | ||||||||||||||
Mortgage banking revenues | 9,409 | 6,141 | 7,282 | 7,983 | 8,802 | 53.2 | 6.9 | ||||||||||||||
Wealth management revenues | 5,166 | 4,575 | 4,840 | 5,233 | 4,897 | 12.9 | 5.5 | ||||||||||||||
Service charges on deposit accounts | 4,626 | 4,463 | 4,655 | 4,379 | 4,053 | 3.7 | 14.1 | ||||||||||||||
Other service charges, commissions and fees | 2,845 | 2,608 | 2,652 | 2,521 | 2,736 | 9.1 | 4.0 | ||||||||||||||
Total fee-based revenues | 30,694 | 25,778 | 27,796 | 28,690 | 28,925 | 19.1 | 6.1 | ||||||||||||||
Investment securities gains (losses) | 108 | (21 | ) | 62 | 23 | 46 | NM | NM | |||||||||||||
Other income** | 2,457 | 2,293 | 2,798 | 2,465 | 2,792 | 7.2 | (12.0 | ) | |||||||||||||
Non-core litigation recovery | 3,750 | — | — | — | — | NM | NM | ||||||||||||||
Total non-interest income | 37,009 | 28,050 | 30,656 | 31,178 | 31,763 | 31.9 | 16.5 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||||
Salaries and wages | 26,707 | 24,682 | 24,549 | 25,460 | 26,093 | 8.2 | 2.4 | ||||||||||||||
Employee benefits** | 8,066 | 9,609 | 7,337 | 8,008 | 8,063 | (16.1 | ) | — | |||||||||||||
Occupancy and equipment | 6,744 | 6,920 | 8,624 | 8,262 | 8,232 | (2.5 | ) | (18.1 | ) | ||||||||||||
Core deposit intangible amortization | 827 | 827 | 837 | 842 | 855 | — | (3.3 | ) | |||||||||||||
Other expenses | 20,411 | 19,670 | 19,060 | 18,780 | 19,558 | 3.8 | 4.4 | ||||||||||||||
Subtotal | 62,755 | 61,708 | 60,407 | 61,352 | 62,801 | 1.7 | (0.1 | ) | |||||||||||||
Other real estate owned (income) expense | 140 | (39 | ) | 129 | (720 | ) | (823 | ) | (459.0 | ) | (117.0 | ) | |||||||||
Non-core acquisition and litigation expenses | — | — | 166 | 5,566 | (7 | ) | NM | NM | |||||||||||||
Total non-interest expense | 62,895 | 61,669 | 60,702 | 66,198 | 61,971 | 2.0 | 1.5 | ||||||||||||||
Income before taxes | 39,197 | 30,331 | 35,085 | 30,212 | 33,740 | 29.2 | 16.2 | ||||||||||||||
Income taxes | 13,643 | 10,207 | 11,654 | 10,050 | 11,518 | 33.7 | 18.4 | ||||||||||||||
Net income | $ | 25,554 | $ | 20,124 | $ | 23,431 | $ | 20,162 | $ | 22,222 | 27.0 | % | 15.0 | % | |||||||
Weighted-average basic shares outstanding | 44,269 | 44,719 | 45,066 | 45,150 | 45,143 | (1.0 | )% | (1.9 | )% | ||||||||||||
Weighted-average diluted shares outstanding | 44,645 | 45,114 | 45,549 | 45,579 | 45,607 | (1.0 | ) | (2.1 | ) | ||||||||||||
Earnings per share - basic | $ | 0.58 | $ | 0.45 | $ | 0.52 | $ | 0.45 | $ | 0.49 | 28.9 | 18.4 | |||||||||
Earnings per share - diluted | 0.57 | 0.45 | 0.51 | 0.44 | 0.49 | 26.7 | 16.3 | ||||||||||||||
Core net income*** | $ | 23,154 | $ | 20,137 | $ | 23,496 | $ | 23,610 | $ | 22,189 | 15.0 | % | 4.3 | % | |||||||
Core pre-tax, pre-provision net income*** | 37,889 | 34,352 | 38,478 | 36,853 | 35,027 | 10.3 | 8.2 | ||||||||||||||
Core earnings per share - diluted*** | 0.52 | 0.45 | 0.52 | 0.52 | 0.49 | 15.6 | 6.1 | ||||||||||||||
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). | |||||||||||||||||||||
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FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
% Change | ||||||||||||||||||||
(In thousands, except share and per share data) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | 2Q16 vs 1Q16 | 2Q16 vs 2Q15 | |||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 476,051 | $ | 655,528 | $ | 780,457 | $ | 708,295 | $ | 506,434 | (27.4 | )% | (6.0 | )% | ||||||
Investment securities | 2,061,828 | 2,144,740 | 2,057,505 | 2,067,636 | 2,139,433 | (3.9 | ) | (3.6 | ) | |||||||||||
Loans held for investment | 5,340,189 | 5,191,469 | 5,193,321 | 5,120,794 | 5,028,624 | 2.9 | 6.2 | |||||||||||||
Mortgage loans held for sale | 73,053 | 52,989 | 52,875 | 55,686 | 75,322 | 37.9 | (3.0 | ) | ||||||||||||
Total loans | 5,413,242 | 5,244,458 | 5,246,196 | 5,176,480 | 5,103,946 | 3.2 | 6.1 | |||||||||||||
Less allowance for loan losses | 80,340 | 79,924 | 76,817 | 74,256 | 76,552 | 0.5 | 4.9 | |||||||||||||
Net loans | 5,332,902 | 5,164,534 | 5,169,379 | 5,102,224 | 5,027,394 | 3.3 | 6.1 | |||||||||||||
Premises and equipment | 187,538 | 188,714 | 190,812 | 190,386 | 189,488 | (0.6 | ) | (1.0 | ) | |||||||||||
Goodwill and intangible assets (excluding mortgage servicing rights) | 213,420 | 214,248 | 215,119 | 215,843 | 215,958 | (0.4 | ) | (1.2 | ) | |||||||||||
Company owned life insurance | 189,524 | 188,396 | 187,253 | 185,990 | 177,625 | 0.6 | 6.7 | |||||||||||||
Other real estate owned | 7,908 | 9,257 | 6,254 | 8,031 | 11,773 | (14.6 | ) | (32.8 | ) | |||||||||||
Mortgage servicing rights | 16,038 | 15,574 | 15,621 | 15,336 | 14,654 | 3.0 | 9.4 | |||||||||||||
Other assets | 120,167 | 109,689 | 105,796 | 110,789 | 103,459 | 9.6 | 16.1 | |||||||||||||
Total assets | $ | 8,605,376 | $ | 8,690,680 | $ | 8,728,196 | $ | 8,604,530 | $ | 8,386,218 | (1.0 | )% | 2.6 | % | ||||||
Liabilities and stockholders' equity: | ||||||||||||||||||||
Deposits | $ | 6,981,448 | $ | 7,107,463 | $ | 7,088,937 | $ | 7,035,794 | $ | 6,804,401 | (1.8 | )% | 2.6 | % | ||||||
Securities sold under repurchase agreements | 466,399 | 465,523 | 510,635 | 437,533 | 469,145 | 0.2 | (0.6 | ) | ||||||||||||
Long-term debt | 27,928 | 27,907 | 27,885 | 43,089 | 43,068 | 0.1 | (35.2 | ) | ||||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 82,477 | 82,477 | 82,477 | 82,477 | — | — | |||||||||||||
Other liabilities | 81,999 | 65,296 | 67,769 | 67,062 | 62,272 | 25.6 | 31.7 | |||||||||||||
Total liabilities | 7,640,251 | 7,748,666 | 7,777,703 | 7,665,955 | 7,461,363 | (1.4 | ) | 2.4 | ||||||||||||
Stockholders' equity: | ||||||||||||||||||||
Common stock | 290,366 | 288,782 | 311,720 | 309,167 | 313,125 | 0.5 | (7.3 | ) | ||||||||||||
Retained earnings | 664,337 | 648,631 | 638,367 | 623,967 | 612,875 | 2.4 | 8.4 | |||||||||||||
Accumulated other comprehensive income (loss) | 10,422 | 4,601 | 406 | 5,441 | (1,145 | ) | NM | NM | ||||||||||||
Total stockholders' equity | 965,125 | 942,014 | 950,493 | 938,575 | 924,855 | 2.5 | 4.4 | |||||||||||||
Total liabilities and stockholders' equity | $ | 8,605,376 | $ | 8,690,680 | $ | 8,728,196 | $ | 8,604,530 | $ | 8,386,218 | (1.0 | )% | 2.6 | % | ||||||
Common shares outstanding at period end | 44,746 | 44,707 | 45,428 | 45,345 | 45,507 | 0.1 | % | (1.7 | )% | |||||||||||
Book value at period end | $ | 21.57 | $ | 21.07 | $ | 20.92 | $ | 20.70 | $ | 20.32 | 2.4 | 6.2 | ||||||||
Tangible book value at period end*** | 16.80 | 16.28 | 16.19 | 15.94 | 15.58 | 3.2 | 7.8 | |||||||||||||
NM - not meaningful | ||||||||||||||||||||
***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). | ||||||||||||||||||||
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FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Loans and Deposits
(Unaudited)
% Change | ||||||||||||||||||||
(In thousands) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | 2Q16 vs 1Q16 | 2Q16 vs 2Q15 | |||||||||||||
Loans: | ||||||||||||||||||||
Real Estate: | ||||||||||||||||||||
Commercial real estate | $ | 1,816,813 | $ | 1,764,492 | $ | 1,793,258 | $ | 1,750,797 | $ | 1,704,073 | 3.0 | % | 6.6 | % | ||||||
Construction: | ||||||||||||||||||||
Land acquisition and development | 218,650 | 219,450 | 224,066 | 212,990 | 211,889 | (0.4 | ) | 3.2 | ||||||||||||
Residential | 113,944 | 113,317 | 111,763 | 112,495 | 101,023 | 0.6 | 12.8 | |||||||||||||
Commercial | 117,643 | 102,382 | 94,890 | 93,775 | 90,316 | 14.9 | 30.3 | |||||||||||||
Total construction | 450,237 | 435,149 | 430,719 | 419,260 | 403,228 | 3.5 | 11.7 | |||||||||||||
Residential real estate | 1,030,593 | 1,021,443 | 1,032,851 | 1,020,445 | 999,038 | 0.9 | 3.2 | |||||||||||||
Agricultural real estate | 166,872 | 153,054 | 156,234 | 163,116 | 158,506 | 9.0 | 5.3 | |||||||||||||
Total real estate | 3,464,515 | 3,374,138 | 3,413,062 | 3,353,618 | 3,264,845 | 2.7 | 6.1 | |||||||||||||
Consumer | ||||||||||||||||||||
Indirect | 687,768 | 651,057 | 622,529 | 616,142 | 589,479 | 5.6 | 16.7 | |||||||||||||
Other | 153,185 | 150,774 | 153,717 | 150,170 | 144,919 | 1.6 | 5.7 | |||||||||||||
Credit card | 66,221 | 63,624 | 68,107 | 65,649 | 64,728 | 4.1 | 2.3 | |||||||||||||
Total consumer | 907,174 | 865,455 | 844,353 | 831,961 | 799,126 | 4.8 | 13.5 | |||||||||||||
Commercial | 824,962 | 825,043 | 792,416 | 778,648 | 819,119 | — | 0.7 | |||||||||||||
Agricultural | 139,892 | 126,290 | 142,151 | 154,855 | 142,629 | 10.8 | (1.9 | ) | ||||||||||||
Other | 3,646 | 543 | 1,339 | 1,712 | 2,905 | 571.5 | 25.5 | |||||||||||||
Loans held for investment | 5,340,189 | 5,191,469 | 5,193,321 | 5,120,794 | 5,028,624 | 2.9 | 6.2 | |||||||||||||
Loans held for sale | 73,053 | 52,989 | 52,875 | 55,686 | 75,322 | 37.9 | (3.0 | ) | ||||||||||||
Total loans | $ | 5,413,242 | $ | 5,244,458 | $ | 5,246,196 | $ | 5,176,480 | $ | 5,103,946 | 3.2 | % | 6.1 | % | ||||||
Deposits: | ||||||||||||||||||||
Non-interest bearing | $ | 1,783,609 | $ | 1,860,472 | $ | 1,823,716 | $ | 1,832,535 | $ | 1,757,641 | (4.1 | )% | 1.5 | % | ||||||
Interest bearing: | ||||||||||||||||||||
Demand | 2,107,950 | 2,142,326 | 2,178,373 | 2,134,203 | 2,028,648 | (1.6 | ) | 3.9 | ||||||||||||
Savings | 2,003,343 | 2,001,329 | 1,955,256 | 1,918,724 | 1,868,877 | 0.1 | 7.2 | |||||||||||||
Time, $100 and over | 479,077 | 478,527 | 487,372 | 496,539 | 490,088 | 0.1 | (2.2 | ) | ||||||||||||
Time, other | 607,469 | 624,809 | 644,220 | 653,793 | 659,147 | (2.8 | ) | (7.8 | ) | |||||||||||
Total interest bearing | 5,197,839 | 5,246,991 | 5,265,221 | 5,203,259 | 5,046,760 | (0.9 | ) | 3.0 | ||||||||||||
Total deposits | $ | 6,981,448 | $ | 7,107,463 | $ | 7,088,937 | $ | 7,035,794 | $ | 6,804,401 | (1.8 | )% | 2.6 | % | ||||||
Total core deposits(1) | $ | 6,502,371 | $ | 6,628,936 | $ | 6,601,565 | $ | 6,539,255 | $ | 6,314,313 | (1.9 | )% | 3.0 | % | ||||||
(1) Core deposits are defined as total deposits less time deposits, $100 and over | ||||||||||||||||||||
8
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Credit Quality
(Unaudited)
% Change | ||||||||||||||||||||
(In thousands) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | 2Q16 vs 1Q16 | 2Q16 vs 2Q15 | |||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||
Allowance for loan losses | $ | 80,340 | $ | 79,924 | $ | 76,817 | $ | 74,256 | $ | 76,552 | 0.5 | % | 4.9 | % | ||||||
As a percentage of period-end loans | 1.48 | % | 1.52 | % | 1.46 | % | 1.43 | % | 1.50 | % | ||||||||||
Net charge-offs during quarter | $ | 2,134 | $ | 893 | $ | 728 | $ | 3,394 | $ | 124 | 139.0 | % | NM | |||||||
Annualized as a percentage of average loans | 0.16 | % | 0.07 | % | 0.06 | % | 0.26 | % | 0.01 | % | ||||||||||
Non-Performing Assets: | ||||||||||||||||||||
Non-accrual loans | $ | 74,311 | $ | 63,837 | $ | 66,385 | $ | 66,359 | $ | 70,848 | 16.4 | % | 4.9 | % | ||||||
Accruing loans past due 90 days or more | 4,454 | 4,362 | 5,602 | 3,357 | 2,153 | 2.1 | 106.9 | |||||||||||||
Total non-performing loans | 78,765 | 68,199 | 71,987 | 69,716 | 73,001 | 15.5 | 7.9 | |||||||||||||
Other real estate owned | 7,908 | 9,257 | 6,254 | 8,031 | 11,773 | (14.6 | ) | (32.8 | ) | |||||||||||
Total non-performing assets | $ | 86,673 | $ | 77,456 | $ | 78,241 | $ | 77,747 | $ | 84,774 | 11.9 | % | 2.2 | % | ||||||
Non-performing assets as a percentage of: | ||||||||||||||||||||
Total loans and OREO | 1.60 | % | 1.47 | % | 1.49 | % | 1.50 | % | 1.66 | % | ||||||||||
Total assets | 1.01 | 0.89 | 0.90 | 0.90 | 1.01 | |||||||||||||||
Accruing Loans 30-89 Days Past Due | $ | 25,048 | $ | 25,001 | $ | 42,869 | $ | 38,793 | $ | 31,178 | 0.2 | % | (19.7 | )% | ||||||
Accruing TDRs | 16,408 | 12,070 | 15,419 | 16,702 | 15,127 | 35.9 | 8.5 | |||||||||||||
Criticized Loans: | ||||||||||||||||||||
Special Mention | $ | 142,560 | $ | 144,993 | $ | 127,270 | $ | 155,157 | $ | 155,707 | (1.7 | )% | (8.4 | )% | ||||||
Substandard | 176,021 | 167,826 | 162,785 | 163,846 | 159,899 | 4.9 | 10.1 | |||||||||||||
Doubtful | 41,344 | 34,578 | 30,350 | 24,547 | 31,701 | 19.6 | 30.4 | |||||||||||||
Total | $ | 359,925 | $ | 347,397 | $ | 320,405 | $ | 343,550 | $ | 347,307 | 3.6 | % | 3.6 | % | ||||||
NM - not meaningful | ||||||||||||||||||||
9
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Selected Ratios
(Unaudited)
Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | ||||||||||
Annualized Financial Ratios (GAAP) | ||||||||||||||
Return on average assets | 1.20 | % | 0.94 | % | 1.07 | % | 0.94 | % | 1.06 | % | ||||
Return on average common equity | 10.83 | 8.60 | 9.83 | 8.60 | 9.68 | |||||||||
Yield on average earning assets | 3.78 | 3.77 | 3.73 | 3.70 | 3.70 | |||||||||
Cost of average interest bearing liabilities | 0.30 | 0.31 | 0.32 | 0.31 | 0.31 | |||||||||
Interest rate spread | 3.48 | 3.46 | 3.41 | 3.39 | 3.39 | |||||||||
Net interest margin ratio | 3.55 | 3.54 | 3.49 | 3.47 | 3.47 | |||||||||
Efficiency ratio** | 60.10 | 64.24 | 61.27 | 67.89 | 63.85 | |||||||||
Loan to deposit ratio | 77.54 | 73.79 | 74.01 | 73.57 | 75.01 | |||||||||
Annualized Financial Ratios - Operating*** (Non-GAAP) | ||||||||||||||
Core return on average assets | 1.09 | % | 0.94 | % | 1.07 | % | 1.10 | % | 1.06 | % | ||||
Core return on average common equity | 9.81 | 8.60 | 9.86 | 10.07 | 9.66 | |||||||||
Return on average tangible common equity | 13.98 | 11.13 | 12.73 | 11.20 | 12.65 | |||||||||
Core efficiency ratio | 60.78 | 62.71 | 59.52 | 61.40 | 63.14 | |||||||||
Tangible common stockholders' equity to tangible assets | 8.96 | 8.59 | 8.64 | 8.62 | 8.68 | |||||||||
Consolidated Capital Ratios: | ||||||||||||||
Total risk-based capital | 15.03 | % | * | 15.04 | % | 15.36 | % | 15.28 | % | 15.37 | % | |||
Tier 1 risk-based capital | 13.72 | * | 13.72 | 13.99 | 13.83 | 13.88 | ||||||||
Tier 1 common capital to total risk-weighted assets | 12.45 | * | 12.43 | 12.69 | 12.52 | 12.55 | ||||||||
Leverage Ratio | 10.35 | * | 10.07 | 10.12 | 10.13 | 10.11 | ||||||||
*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). | ||||||||||||||
10
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Average Balance Sheets
(Unaudited)
Three Months Ended | ||||||||||||||||||||||||||
June 30, 2016 | March 31, 2016 | June 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) | $ | 5,324,812 | $ | 63,248 | 4.78 | % | $ | 5,222,905 | $ | 63,371 | 4.88 | % | $ | 4,991,416 | $ | 60,911 | 4.89 | % | ||||||||
Investment securities (2) | 2,095,347 | 9,335 | 1.79 | 2,107,977 | 9,424 | 1.80 | 2,319,636 | 9,642 | 1.67 | |||||||||||||||||
Interest bearing deposits in banks | 359,807 | 482 | 0.54 | 506,839 | 645 | 0.51 | 369,345 | 271 | 0.29 | |||||||||||||||||
Federal funds sold | 1,888 | 3 | 0.64 | 1,292 | 2 | 0.62 | 3,168 | 5 | 0.63 | |||||||||||||||||
Total interest earnings assets | 7,781,854 | 73,068 | 3.78 | 7,839,013 | 73,442 | 3.77 | 7,683,565 | 70,829 | 3.70 | |||||||||||||||||
Non-earning assets | 756,723 | 754,962 | 743,545 | |||||||||||||||||||||||
Total assets | $ | 8,538,577 | $ | 8,593,975 | $ | 8,427,110 | ||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||
Demand deposits | $ | 2,133,509 | $ | 514 | 0.10 | % | $ | 2,147,532 | $ | 558 | 0.10 | % | $ | 2,086,443 | $ | 524 | 0.10 | % | ||||||||
Savings deposits | 1,983,262 | 652 | 0.13 | 1,985,233 | 650 | 0.13 | 1,874,508 | 624 | 0.13 | |||||||||||||||||
Time deposits | 1,097,448 | 1,942 | 0.71 | 1,118,049 | 2,020 | 0.73 | 1,175,753 | 2,091 | 0.71 | |||||||||||||||||
Repurchase agreements | 470,264 | 92 | 0.08 | 477,207 | 90 | 0.08 | 448,810 | 53 | 0.05 | |||||||||||||||||
Other borrowed funds | 12 | — | — | 8 | — | — | 7 | — | — | |||||||||||||||||
Long-term debt | 27,896 | 451 | 6.50 | 29,129 | 449 | 6.20 | 43,039 | 538 | 5.01 | |||||||||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 675 | 3.29 | 82,477 | 663 | 3.23 | 82,477 | 600 | 2.92 | |||||||||||||||||
Total interest bearing liabilities | 5,794,868 | 4,326 | 0.30 | 5,839,635 | 4,430 | 0.31 | 5,711,037 | 4,430 | 0.31 | |||||||||||||||||
Non-interest bearing deposits | 1,738,008 | 1,755,515 | 1,739,329 | |||||||||||||||||||||||
Other non-interest bearing liabilities | 56,864 | 57,145 | 55,515 | |||||||||||||||||||||||
Stockholders’ equity | 948,837 | 941,680 | 921,229 | |||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 8,538,577 | $ | 8,593,975 | $ | 8,427,110 | ||||||||||||||||||||
Net FTE interest income | $ | 68,742 | 69,012 | $ | 66,399 | |||||||||||||||||||||
Less FTE adjustments (2) | (1,109 | ) | (1,062 | ) | (1,111 | ) | ||||||||||||||||||||
Net interest income from consolidated statements of income | $ | 67,633 | $ | 67,950 | $ | 65,288 | ||||||||||||||||||||
Interest rate spread | 3.48 | % | 3.46 | % | 3.39 | % | ||||||||||||||||||||
Net FTE interest margin (3) | 3.55 | % | 3.54 | % | 3.47 | % | ||||||||||||||||||||
Cost of funds, including non-interest bearing demand deposits (4) | 0.23 | % | 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. |
11
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Average Balance Sheets
(Unaudited)
Six Months Ended | |||||||||||||||||
June 30, 2016 | June 30, 2015 | ||||||||||||||||
(In thousands) | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||
Interest earning assets: | |||||||||||||||||
Loans (1) (2) | $ | 5,273,859 | $ | 126,618 | 4.83 | % | $ | 4,943,547 | $ | 120,727 | 4.92 | % | |||||
Investment securities (2) | 2,101,662 | 18,760 | 1.80 | 2,307,104 | 19,283 | 1.69 | |||||||||||
Interest bearing deposits in banks | 433,323 | 1,127 | 0.52 | 457,475 | 660 | 0.29 | |||||||||||
Federal funds sold | 1,590 | 5 | 0.63 | 2,176 | 7 | 0.65 | |||||||||||
Total interest earnings assets | 7,810,434 | 146,510 | 3.77 | 7,710,302 | 140,677 | 3.68 | |||||||||||
Non-earning assets | 755,849 | 747,788 | |||||||||||||||
Total assets | $ | 8,566,283 | $ | 8,458,090 | |||||||||||||
Interest bearing liabilities: | |||||||||||||||||
Demand deposits | $ | 2,140,520 | $ | 1,072 | 0.10 | % | $ | 2,087,815 | $ | 1,030 | 0.10 | % | |||||
Savings deposits | 1,984,247 | 1,302 | 0.13 | 1,878,640 | 1,252 | 0.13 | |||||||||||
Time deposits | 1,107,748 | 3,962 | 0.72 | 1,198,048 | 4,266 | 0.72 | |||||||||||
Repurchase agreements | 473,736 | 182 | 0.08 | 464,083 | 107 | 0.05 | |||||||||||
Other borrowed funds | 10 | — | — | 5 | — | — | |||||||||||
Long-term debt | 28,513 | 900 | 6.35 | 40,589 | 1,052 | 5.23 | |||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 1,338 | 3.26 | 82,477 | 1,190 | 2.91 | |||||||||||
Total interest bearing liabilities | 5,817,251 | 8,756 | 0.30 | 5,751,657 | 8,897 | 0.31 | |||||||||||
Non-interest bearing deposits | 1,746,762 | 1,731,210 | |||||||||||||||
Other non-interest bearing liabilities | 57,004 | 60,924 | |||||||||||||||
Stockholders’ equity | 945,266 | 914,299 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 8,566,283 | $ | 8,458,090 | |||||||||||||
Net FTE interest income | $ | 137,754 | $ | 131,780 | |||||||||||||
Less FTE adjustments (2) | (2,171 | ) | (2,167 | ) | |||||||||||||
Net interest income from consolidated statements of income | $ | 135,583 | $ | 129,613 | |||||||||||||
Interest rate spread | 3.47 | % | 3.37 | % | |||||||||||||
Net FTE interest margin (3) | 3.55 | % | 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. |
12
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)
As Of or For the Quarter Ended | ||||||||||||||||
(In thousands, except share and per share data) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | |||||||||||
Net income (GAAP) | (A) | $ | 25,554 | $ | 20,124 | $ | 23,431 | $ | 20,162 | $ | 22,222 | |||||
Adj: investment securities (gains) losses, net | (108 | ) | 21 | (62 | ) | (23 | ) | (46 | ) | |||||||
Plus: acquisition & nonrecurring litigation expenses | — | — | 166 | 5,566 | (7 | ) | ||||||||||
Less: nonrecurring litigation recovery | (3,750 | ) | — | — | — | — | ||||||||||
Adj: income tax (benefit) expense | 1,458 | (8 | ) | (39 | ) | (2,095 | ) | 20 | ||||||||
Total core net income (Non-GAAP) | (B) | $ | 23,154 | $ | 20,137 | $ | 23,496 | $ | 23,610 | $ | 22,189 | |||||
Net income (GAAP) | $ | 25,554 | $ | 20,124 | $ | 23,431 | $ | 20,162 | $ | 22,222 | ||||||
Add back: income tax expense | 13,643 | 10,207 | 11,654 | 10,050 | 11,518 | |||||||||||
Add back: provision for loan losses | 2,550 | 4,000 | 3,289 | 1,098 | 1,340 | |||||||||||
Adj: investment securities (gains) losses, net | (108 | ) | 21 | (62 | ) | (23 | ) | (46 | ) | |||||||
Add back: acquisition & nonrecurring litigation expenses | — | — | 166 | 5,566 | (7 | ) | ||||||||||
Subtract: nonrecurring litigation recovery | (3,750 | ) | — | — | — | — | ||||||||||
Core pre-tax, pre-provision net income (Non-GAAP) | $ | 37,889 | $ | 34,352 | $ | 38,478 | $ | 36,853 | $ | 35,027 | ||||||
Weighted-average diluted shares outstanding | (C) | 44,645 | 45,114 | 45,549 | 45,579 | 45,607 | ||||||||||
Earnings per share - diluted (GAAP) | (A)/(C) | $ | 0.57 | $ | 0.45 | $ | 0.51 | $ | 0.44 | $ | 0.49 | |||||
Core earnings per share - diluted (Non-GAAP) | (B)/(C) | 0.52 | 0.45 | 0.52 | 0.52 | 0.49 | ||||||||||
Total non-interest income (GAAP) | (D) | $ | 37,009 | $ | 28,050 | $ | 30,656 | $ | 31,178 | $ | 31,763 | |||||
Adj: investment securities (gains) losses, net | (108 | ) | 21 | (62 | ) | (23 | ) | (46 | ) | |||||||
Adj: nonrecurring litigation recovery | (3,750 | ) | — | — | — | — | ||||||||||
Total core non-interest income (Non-GAAP) | 33,151 | 28,071 | 30,594 | 31,155 | 31,717 | |||||||||||
Net interest income (GAAP) | (E) | 67,633 | 67,950 | 68,420 | 66,330 | 65,288 | ||||||||||
Total core revenue (Non-GAAP) | 100,784 | 96,021 | 99,014 | 97,485 | 97,005 | |||||||||||
Add: FTE adjustments | 1,109 | 1,062 | 1,072 | 1,070 | 1,111 | |||||||||||
Total core revenue for core efficiency ratio (Non-GAAP) | (F) | $ | 101,893 | $ | 97,083 | $ | 100,086 | $ | 98,555 | $ | 98,116 | |||||
Total non-interest expense (GAAP) | (G) | $ | 62,895 | $ | 61,669 | $ | 60,702 | $ | 66,198 | $ | 61,971 | |||||
Less: acquisition & nonrecurring litigation expenses | — | — | (166 | ) | (5,566 | ) | 7 | |||||||||
Core non-interest expense (Non-GAAP) | 62,895 | 61,669 | 60,536 | 60,632 | 61,978 | |||||||||||
Less: amortization of core deposit intangible | (827 | ) | (827 | ) | (837 | ) | (842 | ) | (855 | ) | ||||||
Adj: OREO (expense) income | (140 | ) | 39 | (129 | ) | 720 | 823 | |||||||||
Non-interest expense for core efficiency ratio (Non-GAAP) | (H) | $ | 61,928 | $ | 60,881 | $ | 59,570 | $ | 60,510 | $ | 61,946 | |||||
Efficiency ratio (GAAP) | (G)/[(D)+(E)] | 60.10 | % | 64.24 | % | 61.27 | % | 67.89 | % | 63.85 | % | |||||
Core efficiency ratio (Non-GAAP) | (H)/(F) | 60.78 | 62.71 | 59.52 | 61.40 | 63.14 | ||||||||||
13
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures - Continued
(Unaudited)
As Of or For the Quarter Ended | ||||||||||||||||
(In thousands, except share and per share data) | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | |||||||||||
Annualized net income | (I) | $ | 102,778 | $ | 80,938 | $ | 92,960 | $ | 79,991 | $ | 89,132 | |||||
Annualized core net income | (J) | 93,125 | 80,991 | 93,218 | 93,670 | 89,000 | ||||||||||
Total quarterly average assets | (K) | 8,538,577 | 8,593,975 | 8,673,135 | 8,495,436 | 8,427,110 | ||||||||||
Return on average assets (GAAP) | (I)/(K) | 1.20 | % | 0.94 | % | 1.07 | % | 0.94 | % | 1.06 | % | |||||
Core return on average assets (Non-GAAP) | (J)/(K) | 1.09 | 0.94 | 1.07 | 1.10 | 1.06 | ||||||||||
Total quarterly average stockholders' equity (GAAP) | (L) | $ | 948,837 | $ | 941,680 | $ | 945,462 | $ | 929,757 | $ | 921,229 | |||||
Less: average goodwill and other intangible assets (excluding mortgage servicing rights) | (213,911 | ) | (214,797 | ) | (215,496 | ) | (215,829 | ) | (216,457 | ) | ||||||
Average tangible common stockholders' equity (Non-GAAP) | (M) | $ | 734,926 | $ | 726,883 | $ | 729,966 | $ | 713,928 | $ | 704,772 | |||||
Total stockholders' equity, period-end (GAAP) | (N) | $ | 965,125 | $ | 942,014 | $ | 950,493 | $ | 938,575 | $ | 924,855 | |||||
Less: goodwill and other intangible assets (excluding mortgage servicing rights) | (213,420 | ) | (214,248 | ) | (215,119 | ) | (215,843 | ) | (215,958 | ) | ||||||
Total tangible common stockholders' equity (Non-GAAP) | (O) | $ | 751,705 | $ | 727,766 | $ | 735,374 | $ | 722,732 | $ | 708,897 | |||||
Return on average common equity (GAAP) | (I)/(L) | 10.83 | % | 8.60 | % | 9.83 | % | 8.60 | % | 9.68 | % | |||||
Core return on average common equity (Non-GAAP) | (J)/(L) | 9.81 | 8.60 | 9.86 | 10.07 | 9.66 | ||||||||||
Return on average tangible common equity (Non-GAAP) | (I)/(M) | 13.98 | 11.13 | 12.73 | 11.20 | 12.65 | ||||||||||
Total assets (GAAP) | (P) | $ | 8,605,376 | $ | 8,690,680 | $ | 8,728,196 | 8,604,530 | 8,386,218 | |||||||
Less: goodwill and other intangible assets (excluding mortgage servicing rights) | (213,420 | ) | (214,248 | ) | (215,119 | ) | (215,843 | ) | (215,958 | ) | ||||||
Tangible assets (Non-GAAP) | (Q) | $ | 8,391,956 | $ | 8,476,432 | $ | 8,513,077 | $ | 8,388,687 | $ | 8,170,260 | |||||
Total common shares outstanding, period end | (R) | 44,746 | 44,707 | 45,428 | 45,345 | 45,507 | ||||||||||
Book value per share, period end (GAAP) | (N)/(R) | $ | 21.57 | $ | 21.07 | $ | 20.92 | $ | 20.70 | $ | 20.32 | |||||
Tangible book value per share, period-end (Non-GAAP) | (O)/(R) | 16.80 | 16.28 | 16.19 | 15.94 | 15.58 | ||||||||||
Average common stockholders' equity to average assets (GAAP) | (L)/(K) | 11.11 | % | 10.96 | % | 10.90 | % | 10.94 | % | 10.93 | % | |||||
Tangible common stockholders' equity to tangible assets (Non-GAAP) | (O)/(Q) | 8.96 | 8.59 | 8.64 | 8.62 | 8.68 | ||||||||||
First Interstate BancSystem, Inc.
P.O. Box 30918 Billings, Montana 59116 (406) 255-5390
www.FIBK.com
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