First Interstate Bancsystem, Inc. · NASDAQ:FIBK
First Interstate Bancsystem — Investor Presentation (April 2020)
62 slides from First Interstate Bancsystem's investor presentation, Apr 30, 2020
Slide 1: Investor Presentation April 2020
Exhibit 99.1 Investor Presentation April 2020
Slide 2: Safe Harbor
Safe Harbor This presentation 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
Slide 3: FIBK Overview
FIBK Overview OVERVIEW DESCRIPTION • Headquartered in Billings, MT and focused on regional community banking in Idaho, Montana, Oregon, South Dakota, Washington, and Headquarters Billings, MT Wyoming: • Over 145 banking offices Kroll Rating (Subordinated Notes) BBB • 238 ATMs, plus 24,000 MoneyPass
Slide 4: Investment Highlights
Investment Highlights • Pandemic response: Our people, our clients and our communities • Experienced leadership team • Strong historical financial performance • Diversified client base tempers economic volatility • Strong core deposit funding • Conservative credit strategy, limiting exposure to larg
Slide 5: Pandemic Response – Our People
Pandemic Response – Our People • 68% Working from Home • First Relief Employee Assistance Program expanded to • Internal and external vendor travel restrictions in place provide support to employees experiencing financial challenges due to COVID-19 • Continue to pay employees impacted by COVID-19 re
Slide 6: Pandemic Response – Our Clients: Paycheck Protection Program
Pandemic Response – Our Clients Paycheck Protection Program • Application process up and running on April 3, 2020 • $1,159 million in applications processed through April 27, 2020 • $997 million in loans approved by the SBA through April 27, 2020 • $997 million in loans funded through April 27, 2020
Slide 7: Pandemic Response – Our Clients: Forbearances
Pandemic Response – Our Clients Forbearances $ Approved % of Portfolio $ Approved Type # Approved Type # Approved (in millions) Balance (in millions) Commercial 1,974 $1,047 16% Mortgage 532 $130 Consumer 1,976 $45 2% Total 3,950 $1,092 12% Commercial Booked Deferrals by Industry Commercial Deferral
Slide 8: Pandemic Response – Our Communities
Pandemic Response – Our Communities • Additional $1 million pledged to support communities in addition to annual commitment of 2% of net income before taxes • Neighbors Feeding Neighbors program focused on addressing food insecurity; funds double matched by Foundation • Double match of money and vol
Slide 9: Experienced Leadership Team
Experienced Leadership Team Industry Years at Name Title Age Experience FIBK Kevin P. Riley President and Chief Executive Officer 60 30+ Years 7 Years Marcy D. Mutch Chief Financial Officer 60 30+ Years 13 Years Russell A. Lee Chief Banking Officer 64 40+ Years 2 Years Jodi Delahunt Hubbell Chief Op
Slide 10: Strong Financial Performance
Strong Financial Performance Annual Performance 2016 - 2019 Page 10
Slide 11: Historical Financial Performance Summary Results
Historical Financial Performance Summary Results Gross Loans ($000) Total Deposits ($000) vs. Loan/Deposits (%) Total Revenue ($000) $11,663,500 $9,031,600 $10,680,700 $644,900 $8,503,700 $9,934,871 $575,800 $7,614,355 $491,596 $7,376,110 $416,261 $5,478,544 74.27% 76.64% 79.62% 77.43% 2016Y 2017Y 2
Slide 12: Historical Financial Performance Summary Results
Historical Financial Performance Summary Results Net Income ($000) Earnings per Share ($) Tangible Book Value per Share ($) $2.83 $181,000 $2.75 $160,200 $19.96 $2.13 $2.05 $17.52 $16.92 $16.04 $106,521 $95,636 2016Y 2017Y 2018Y 2019Y 2016Y 2017Y 2018Y 2019Y 2016Y 2017Y 2018Y 2019Y ROAA (%) ROAE (%)
Slide 13: Historical Financial Performance Summary Results
Historical Financial Performance Summary Results NPAs / Assets (%) Texas Ratio (%) NPLs ($000) vs. NCOs/Avg. Loans (%) 10.36% $76,600 0.96% $72,500 8.45% $58,100 0.68% 6.39% $48,600 0.55% 0.23% 0.39% 4.15% 0.20% 0.16% 0.10% 2016Y 2017Y 2018Y 2019Y 2016Y 2017Y 2018Y 2019Y 2016Y 2017Y 2018Y 2019Y Tang
Slide 14: Diversified Footprint
Diversified Footprint Page 14
Slide 15: The First Interstate Franchise
The First Interstate Franchise 2018 Inland Northwest Bank, filling in April 2019 footprint in the PNW $826.8 million 20 Branches Idaho Independent Bank (IIBK) $725 million 11 Branches Community 1st Bank (CMYF) 2016 $130 million 3 Branches Flathead Bank of Bigfork $225 million 7 Branches FIBK IIBK 20
Slide 16: Attractive Markets
Attractive Markets Deposit Market Share and Branch Locations by State States South State / Metric Idaho Montana Oregon Washington Wyoming Dakota % of Market Deposits 5.13% 17.72% 2.39% .12% .32% 15.43% Deposit Market 6th 2nd 11th 13th 32nd 1st Share Rank Number of Branches 23 48 33 14 18 16 Total Po
Slide 17: Attractive Markets: Historically Stable Employment
Attractive Markets: Historically Stable Employment MONTANA WYOMING SOUTH DAKOTA WASHINGTON 3.5% 3.7% 3.3% 5.1% (RANKED 19TH) (RANKED 24TH) (RANKED 15TH) (RANKED 39TH) OREGON 3.3% (RANKED 14TH) IDAHO 2.6% (RANKED 3RD) Best 5 States 1 North Dakota 2.2% 2 Hawaii 2.6% 3 Idaho 2.6% 4 New Hampshire 2.6% 5
Slide 18: Solid Funding Base
Solid Funding Base Firstinterstate -BancSystem
Slide 19: Strong Core Deposit Base
Strong Core Deposit Base OVERVIEW CDs > $100k 5% Total Deposits $11.57 Billion Time Other 7% Total Core Deposits $11.01 Billion Cost of Deposits (Q1 2020) 25 basis points Demand Non- Interest Bearing 29% Savings 31% Demand Interest Bearing 28% Page 19 As of March 31, 2020
Slide 20: Source of Deposits
Source of Deposits MARKET SHARE* MARKET SHARE* LOCATION LOCATION Allocation of $11.57B of Deposits by State JUNE 2019 JUNE 2019 Laramie, WY 46% Jackson, WY 15% Oregon 16.6% Riverton, WY 45% Nampa, ID 15% Montana Sheridan, WY 38% Kalispell, MT 14% 37.7% Washington Missoula, MT 30% Coeur d’Alene, ID 1
Slide 21: Balance of Consumer and Business Deposits
Balance of Consumer and Business Deposits $14 48% 48% $12 47% 47% $10 46% 48% $8 49% 49% $ in Billions $6 52% 52% 53% 53% $4 54% 52% 51% 51% $2 $0 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Total Consumer Deposits Total Business Deposits Page 21
Slide 22: Deposit Pricing Strategy
Deposit Pricing Strategy Cumulative deposit beta in the declining interest rate environment of 21% BETA SUMMARY BETA Last 100bps Rate Cut 1% Cuts Last 150bps Rate Cuts 9% Last 225bps Rate Cuts 21% Last 25bps Rate Cut 42% Last 50bps Rate Cuts 31% Hikes Last 75bps Rate Cuts 30% Last 100bps Rate Cuts 2
Slide 23: Interest Rate Sensitivity
Interest Rate Sensitivity NET INTEREST INCOME NET INTEREST INCOME NET INTEREST INCOME VOLATILITY - 12 MONTH HORIZON NET INTEREST INCOME (NII) - Shocks +400 bps 0.32% $550 +300 bps 0.41% $500 +200 bps 0.45% $458 $460 $460 $460 $460 $450 +100 bps 0.37% $421 $396 Base 0.00% $400 Millions $377 $363 -100
Slide 24: Credit Portfolio
Credit Portfolio Firstinterstate -BancSystem Page 24
Slide 25: Diversified Loan Portfolio by Industry
Diversified Loan Portfolio by Industry LOAN MIX COMMERCIAL Real Estate and $9.0 Billion in Loans All Other Rental and Leasing 30% 15% Agriculture RE 3% Commercial Construction 18% Public Administration 9% 4% Agriculture Retail Trade 3% 9% Accommodation and Food Transportation and Commercial RE Servi
Slide 26: Loan Portfolio by State
Loan Portfolio by State As of March 31, 2020 Idaho 10% Other* 21% Montana 27% Wyoming 13% Washington 8% Oregon South Dakota 16% 5% * “Other” is an aggregation of central lines of business that includes residential mortgages, credit cards, and indirect consumer loans. Page 26
Slide 27: Trends in Unfunded Commitments
Trends in Unfunded Commitments Unfunded as a % of Commitment 65.0% 60.0% 55.0% 50.0% 45.0% 40.0% 35.0% 30.0% Dec '17 Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 Jun '19 Sep '19 Dec '19 Mar '20 Revolving and Non-Revolving Lines of Credit Revolving Non-Revolving Page 27
Slide 28: Trends in Unfunded Revolving Commitments
Trends in Unfunded Revolving Commitments Percentage Used / Unused (Revolving) Top Commitments by Loan Portfolio 70.0% (Revolving) 59.1% 58.2% $1,200 60.0% $1,000 50.0% $800 $600 40.0% 41.8% $Millions in $400 40.9% 30.0% $200 20.0% $0 10.0% 0.0% Dec 2018 Mar 2019 Jun 2019 Sep 2019 Dec 2019 Mar 2020 T
Slide 29: Stable Asset Quality
Stable Asset Quality NON-PERFORMING ASSETS TO TOTAL ASSETS 1.20% 0.98% 1.00% The transition from Purchase 0.80% 0.74% 0.74% Credit Impaired (PCI) to Purchase 0.80% 0.68% 0.63% 0.63% 0.55% 0.54% Credit Deteriorated (PCD) in Q1 0.60% 0.51% 0.51% 0.50% 0.39% 2020 resulted in an increase to 0.40% non-ac
Slide 30: Criticized and Classified Loans
Criticized and Classified Loans CRITICIZED LOANS TO TOTAL LOANS 8.00% 7.10% 7.00% 5.69% 5.60% 6.00% 5.26% 5.19% 4.93% 4.99% 4.72% 4.74% 4.57% 4.57% 5.00% 4.29% 4.44% 4.00% 3.00% 2.00% 1.00% 0.00% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020
Slide 31: Top Borrowers
Top 10 Borrowers Borrower Industry Outstandings Commitments Residential Property Managers $40,346,434 $71,091,894 Support Activities for Oil and Gas Operations $47,127,072 $52,048,323 Recreational Vehicle Dealers $30,928,525 $49,000,000 Lessors of Nonresidential Buildings (except Mini-warehouses) $3
Slide 32: Hospitality: Portfolio Exposure
Hospitality: Portfolio Exposure • 6.7% of total loan portfolio • $92.0 million in unfunded commitments • Hotels (except Casino Hotels) and Motels accounting for 61% of total portfolio NAICS NET PRINCIPAL MONTH DESCRIPTION UNFUNDED COMMITTMENT CODE BALANCE 721110 Hotels (except Casino Hotels) and Mot
Slide 33: Hospitality: Industry Performance
Hospitality: Industry Performance • $65.6 million in criticized loan categories • $3.9 million in impaired loan categories • $8.0 million or 1.3% in allowance for credit losses • $22 thousand in specific reserves DESCRIPTION CRITICIZED % CRITICIZED CLASSIFIED % CLASSIFIED IMPAIRED % IMPAIRED Hotels
Slide 34: Hotel Exposure by State
Hotel Exposure by State $160 • No hotel loan with a balance $139.2 greater than $20 Million. $140 • Approximately $78 Million of $120 Hotel Portfolio Commitments are $106.9 $106.2 currently in the construction $100 $87.7 $87.6 phase. $83.1 $80 $71.9 $ in Millions • More than 80% of Portfolio are fla
Slide 35: Hotel Outstandings by Risk Distribution
Hotel Outstandings by Risk Distribution Substandard 6% Special Mention 7% Pass-Watch 8% Pass 79% As of March 31, 2020 Page 35
Slide 36: Indirect Auto: Lending
Indirect Auto: Lending CONSUMER INDIRECT PRODUCTION INDIRECT LOAN PORTFOLIO As of March 31, 2020 $400 7.0% 6.84% New Auto, 6.8% $350 27.25% 6.6% Used Auto, $300 42.99% 6.4% $250 6.2% Other, 8.09% $200 6.00% 5.99% 6.0% $ in Millions 5.8% $150 RV, 21.66% 5.6% $100 $76.40 $78.40 $67.6 5.4% $50 • Total
Slide 37: Indirect Auto: Delinquency
Indirect Auto: Delinquency Originations from a Credit Quality Perspective • Approximately 58% of our originations are above a 750 FICO score • Approximately 85% of our originations are above a 700 FICO score • Not participating in the subprime space; less than 1% of the portfolio has a score below 6
Slide 38: Agriculture: Portfolio Exposure
Agriculture: Portfolio Exposure • 5.4% of total loan portfolio • $165.6 million in unfunded commitments • Beef Cattle Ranching/Farming accounting for 44% of total portfolio NAICS NET PRINCIPAL MONTH DESCRIPTION UNFUNDED COMMITMENT CODE BALANCE 112111 Beef Cattle Ranching and Farming $212,423,659 $70
Slide 39: Agriculture: Industry Performance
Agriculture: Industry Performance • $70.9 million in criticized loan categories • $10.9 million in impaired loan categories • $3.7 million or 0.8% allowance for credit losses • $99 thousand in specific reserves DESCRIPTION CRITICIZED % CRITICIZED CLASSIFIED % CLASSIFIED IMPAIRED % IMPAIRED Beef Catt
Slide 40: Mall and Retail Trade: Portfolio Exposure
Mall and Retail Trade: Portfolio Exposure • $52.3 million direct exposure to Malls (0.6% of total loan portfolio) • None in criticized loan categories • $33.5 million direct exposure to Retail Trade (0.4% of total loan portfolio) • $3.9 million in criticized loan categories NAICS NET PRINCIPAL MONTH
Slide 41: Oil and Gas: Industry Exposure
Oil and Gas: Industry Exposure • $45.0 million in direct exposure (0.5% of total loan portfolio) • $16.2 million in unfunded commitments • $14.0 million in criticized loans category NAICS Net Principal Month Description Unfunded Commitment Code Balance 213112 Support Activities for Oil and Gas Opera
Slide 42: Oil and Gas: Industry Performance
Oil and Gas: Industry Performance • $4.2 million in impaired loan categories • $1.2 million or 2.6% allowance for credit losses • $20 thousand in specific reserves DESCRIPTION CRITICIZED % CRITICIZED CLASSIFIED % CLASSIFIED IMPAIRED % IMPAIRED Support Activities for Oil and Gas Operations $2,280,261
Slide 43: Current Expected Credit Loss (CECL)
Current Expected Credit Loss (CECL) Page 43
Slide 44: CECL Results
CECL Results Moody’s Baseline Forecast Primary Economic Considerations Qualitative Factor Inputs • Formerly COVID-19 Critical Pandemic Forecast, • Unemployment Rate • Portfolio Characteristics updated March 27th • Change in GDP • Industry Exposure – Energy • New infections peak in May • Change in HP
Slide 45: ACL Allocation by Segment
ACL Allocation by Segment ($000) Allowance for % of Outstandings* Segments Credit Loss Outstandings Agricultural $256,746 $1,128 0.44% Agricultural Credit Cards 1,659 4 0.24% Agriculture RE 225,831 2,605 1.15% CRE Non-Owner Occupied 1,555,143 15,745 1.01% CRE Owner Occupied 1,717,927 15,705 0.91% Co
Slide 46: Investment Portfolio
Investment Portfolio Page 46
Slide 47: Investment Portfolio
Investment Portfolio PORTFOLIO COMPOSITION ($3.0B) QUARTERLY NEW PURCHASES: YIELDS 2.77% 3.00% Fixed MBS 39% 2.38% 2.31% 2.50% 1.97% CMO 28% 2.00% 1.50% Treasury / Agency 7% 1.00% CMBS 6% 0.50% 0.00% Municipal 5% Q2-19 Q3-19 Q4-19 Q1-20 Corporate 7% QUARTERLY NEW PURCHASES: DURATION A/L 6.65 7.00 CD
Slide 48: Non-Interest Income
Non-Interest Income Firstinterstate .BancSystem
Slide 49: Non-Interest Income
Non-Interest Income 26.2% of TOTAL REVENUE Other Income 8.2% Other Service Charges and Fees 10.8% Payment Services 23.3% Deposit Service Charges 12.4% Wealth Management Mortgage Banking 14.2% 31.1% Page 49 As of March 31, 2020
Slide 50: Mortgage Production
Mortgage Production QUARTERLY PRODUCTION VOLUME $400 $350 $300 $250 $200 $ in millions $150 $100 $50 $- Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2015 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 Purchase Refinance Page 50 As of March 31, 2020
Slide 51: Wealth Management
Wealth Management Total: $4.74 Billion Assets Under Administration $6,100 $849 $5,600 $5,100 $2,480 $865 $ in millions $4,600 $542 $4,100 $3,600 Q2 2019 Q3 2019 Q4 2019 Q1 2020 (in millions) Discretionary Non-Discretionary Brokerage Retirement Plan Page 51 As of March 31, 2020
Slide 52: Growth Strategies and Capital Allocation
Growth Strategies and Capital Allocation Page 52
Slide 53: Maximizing Shareholder Value
Maximizing Shareholder Value Management’s priority is to deploy capital through: Organic Growth Dividends M&A Return on Capital Special Share Dividend Repurchases Page 53
Slide 54: We are Delivering Results
We are Delivering Results Since the IPO in March 2010, FIBK has delivered a 171% total return to shareholders FIBK: TOTAL RETURN (03/23/2010 THROUGH 03/31/2020) 350 300 250 200 170.90 % 150 Percent (%)Percent 100 50 0 -50 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 S
Slide 55: Appendix
Appendix First Interstate ~BancSystem
Slide 56: Non-GAAP Reconciliation
Non-GAAP Reconciliation (Dollars in millions, except per share date) As of December 31, 2016 2017 2018 2019 Total common stockholders' equity (GAAP) $982.6 $1,427.6 $1,693.9 $2,013.9 Less goodwill and other intangible assets (excluding MSRs) $222.5 $521.8 $631.6 $711.7 Tangible Common Equity (Non-GA
Slide 57: Idaho
Idaho STATE GDP OVERVIEW ECONOMIC DRIVERS STRENGTHS & WEAKNESSES BUSINESS COSTS BUSINESS CYCLE STATUS ID GDP: Industry % Contribution STRENGTHS INDEX RANK ➔ EXPANSION • Prominent drivers in high tech, agriculture. RECOVERY Government 101% 21 • Above-average population growth AT RISK Other services
Slide 58: Montana
Montana STATE GDP OVERVIEW ECONOMIC DRIVERS STRENGTHS & WEAKNESSES BUSINESS COSTS BUSINESS CYCLE STATUS STRENGTHS MT GDP: Industry % Contribution INDEX RANK ➔ EXPANSION • Year-round tourist attractions, including popular national parks. RECOVERY Government 100% 25 AGRICULTURE TOURIST ENERGY & • Re
Slide 59: Oregon
Oregon STATE GDP OVERVIEW ECONOMIC DRIVERS STRENGTHS & WEAKNESSES BUSINESS COSTS BUSINESS CYCLE STATUS OR GDP: Industry % Contribution STRENGTHS INDEX RANK ➔ EXPANSION • Diverse economy with strong export RECOVERY Government focus. 101% 22 • Low energy costs courtesy of a AT RISK TOURIST HIGH-TECH
Slide 60: South Dakota
South Dakota STATE GDP OVERVIEW ECONOMIC DRIVERS STRENGTHS & WEAKNESSES BUSINESS COSTS BUSINESS CYCLE STATUS SD GDP: Industry % Contribution STRENGTHS INDEX RANK ➔ EXPANSION • Favorable business climate, low RECOVERY Government costs. 85% 50 TOURIST MEDICAL FINANCIAL • No state tax on personal inc
Slide 61: Washington
Washington STATE GDP OVERVIEW ECONOMIC DRIVERS STRENGTHS & WEAKNESSES BUSINESS COSTS BUSINESS CYCLE STATUS WA GDP: Industry % Contribution STRENGTHS INDEX RANK ➔ EXPANSION • Fast-growing software and IT RECOVERY industries. Government 96% 35 • Top-ranked public university that AT RISK Other servic
Slide 62: Wyoming
Wyoming STATE GDP OVERVIEW ECONOMIC DRIVERS STRENGTHS & WEAKNESSES BUSINESS COSTS BUSINESS CYCLE STATUS STRENGTHS WY GDP: Industry % Contribution INDEX RANK EXPANSION • Abundant natural energy resources. • National parks, a magnet for ➔ RECOVERY Government domestic and international tourism. 99% 2
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