First Interstate Bancsystem, Inc. · NASDAQ:FIBK

First Interstate Bancsystem — Q2 2022 Earnings Presentation

21 slides from First Interstate Bancsystem's earnings presentation, Jul 26, 2022

  1. Slide 1: 2Q 2022 Investor Presentation

    Exhibit 99.2 2Q 2022 Investor Presentation July 26, 2022

  2. Slide 2: Cautionary Note Regarding Forward-Looking Statements

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 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

  3. Slide 3: First Interstate BancSystem, Inc. Overview

    FIRST INTERSTATE BANCSYSTEM, INC. OVERVIEW Premier community banking franchise in growing markets throughout the Midwest and Pacific Northwest Corporate Overview Headquarters Billings, MT Exchange/Listing NASDAQ: FIBK Market Capitalization1 $4.1 Billion Dividend Yield 4.6% Branch Network 308 banking

  4. Slide 4: Second Quarter 2022 Results

    SECOND QUARTER 2022 RESULTS • Successfully completed merger and core system conversion of Great Western Bank on May 23, 2022 • Net income of $64.1 million, or $0.59 per share, driven by strong NII expansion and a $1.7 million provision reversal Earnings • Net interest margin of 3.25%; adjusted NIM o

  5. Slide 5: Second Quarter 2022 Highlights

    SECOND QUARTER 2022 HIGHLIGHTS Summary of Q2 2022 Results Q2 2022 Selected items impact $ amounts in millions, except $ amounts in millions, except per Income Statement Pre-tax After-tax Reported EPS per share data 2Q22 share data Geography (in MM) (in MM) Impact Merger-related expenses Acquisition

  6. Slide 6: Diversified Loan Portfolio

    DIVERSIFIED LOAN PORTFOLIO Loan Highlights: Revolving Funded Commitments • Ex-PPP legacy FIBK branch network loan growth of $243 million in Q2, or 14.8% annualized 41.7% • Ex-PPP loan growth in June company-wide of $141 37.9% million, or 10.1% annualized 35.6% • Revolving unfunded commitments of $3.

  7. Slide 7: Deposit Base

    DEPOSIT BASE Mix of Consumer and Business Deposits ¹ Deposit Highlights: • Legacy FIBK deposit balances declined 1.7% from the prior quarter, and remain on plan YTD 50% 50% 50% 51% 51% • Majority of the remaining decline came from higher- cost acquired balances 50% 50% 50% 49% 49% 2Q21 3Q21 4Q21 1Q2

  8. Slide 8: Capital and Liquidity

    CAPITAL AND LIQUIDITY Highly liquid and flexible balance sheet with strong capital position Capital and Liquidity Highlights: • Dividend yield of 4.6%, based on Q2 average share Loans HFI to Deposit Ratio price of $35.65 • The company repurchased 1.72 million shares of stock 63.2% 60.1% 60.3% 63.9%

  9. Slide 9: Allowance for Credit Losses (ACL)

    ALLOWANCE FOR CREDIT LOSSES (ACL) Reserve release resulting from the re-evaluation of certain GWB loan relationships with specific reserves ACL Highlights: Funded ACL and ACL/Loans HFI % • Re-evaluation of certain acquired PCD loans resulted in the reduction to the ACL of $24.8 million, which is als

  10. Slide 10: Asset Quality and Reserve Trends

    ASSET QUALITY AND RESERVE TRENDS Underlying asset quality continues to trend positively, overall metrics impacted by acquired GWB portfolio Net Charge-off Ratio Total Non-Performing Loans and ACL/NPL Ratios $16.7 $121.6 $109.9 $15.4 $100.7 441.5% 380.6% 384.9% 203.3% 200.5% $35.6 $35.1 $27.7 0.47% $

  11. Slide 11: Net Interest Income

    NET INTEREST INCOME Net Interest Income¹ and Net Interest Margin¹ Net-interest Income Highlights: $240.0 • $16.7 million total loan purchase accounting accretion in Q2 2022 16.7 ◦ $15.8 million from acquired GWB loans 1.1 • PPP income of $1.1 million in Q2 2022, will be immaterial going forward. Une

  12. Slide 12: Net Interest Income (cont'd)

    NET INTEREST INCOME (cont’d) NIM Waterfall Analysis 0.13 0.01 3.25 0.11 0.03 0.15 0.03 2.80 0.02 (0.03) (0.01) RATE IMPACT MIX IMPACT 1Q22 Loans ex- Investments Cash Deposits Loan PAA Loans Investments Cash Borrowings 2Q22 PAA ¹ *Line items may not sum due to rounding Scheduled Purchase Accounting A

  13. Slide 13: Well Positioned to Benefit from Higher Rates

    WELL POSITIONED TO BENEFIT FROM HIGHER RATES Loan Repricing Characteristics Loan Repricing Gap Schedule ¹ $8,666 Variable, 15% $4,926 Fixed, 53% Libor 1M, 11% $2,326 $1,244 Adjustable (Excl: 1M Libor), 21% <= 1 Yr > 1 Yr <= 3 Yr > 3 Yr <= 5 Yr > 5 Yr Maturity / Repricing Buckets 1 Contractual repric

  14. Slide 14: Investment Portfolio

    INVESTMENT PORTFOLIO Investment Portfolio Highlights: Quarterly New Purchases: Weighted Avg Yield • On June 1, the company terminated a $500 million forward-starting pay-fixed swap, resulting in a $23.3 million gain to be accreted into 3.3% income through May 2026. • New money portfolio yields conti

  15. Slide 15: Non-Interest Income

    NON-INTEREST INCOME Non-interest Income by Type ¹ 2Q21 1Q22 2Q22 Payment Services $ 11.4 $ 14.8 $ 19.5 Mortgage Banking 9.6 8.4 5.0 Wealth Management 6.3 8.1 9.3 Other Income, 12% Payment Services, 39% Deposit Service Charges 3.9 7.7 6.3 Other Service Charges & Fees 1.6 4.3 3.6 Investment securities

  16. Slide 16: Non-Interest Expense

    NON-INTEREST EXPENSE Non-interest Expense and Efficiency Ratio 2Q21 1Q22 2Q22 207.2 210.3 Salaries and wages $ 41.6 $ 60.0 $ 74.8 Employee benefits 14.7 21.2 19.4 164.5 Occupancy and equipment 11.2 15.4 17.0 89.6% Other intangible amortization 2.5 3.6 4.1 142.0 Other expenses 29.0 41.7 49.2 Other re

  17. Slide 17: Non-GAAP Financial Measures

    NON-GAAP FINANCIAL MEASURES In addition to results presented in accordance with accounting principles generally accepted in the United States of America, or GAAP, this press release contains the following non- GAAP financial measures that management uses to evaluate our performance relative to our c

  18. Slide 18: Non-GAAP Reconciliation

    NON-GAAP RECONCILIATION 2Q21 3Q21 4Q21 1Q22 2Q22 (Dollars in millions) Total common stockholders' equity (GAAP) (A) $ 1,970.9 $ 1,984.8 $ 1,986.6 $ 3,441.1 $ 3,271.9 Less goodwill and other intangible assets (excluding mortgage servicing rights) 695.7 693.3 690.9 1,275.2 1,232.9 Tangible common stoc

  19. Slide 19: Non-GAAP Reconciliation

    NON-GAAP RECONCILIATION 2Q21 3Q21 4Q21 1Q22 2Q22 (Dollars in millions) Total non-interest expense $ 99.0 $ 105.9 $ 102.2 $ 207.2 $ 210.3 Less: Acquisition-related expense — 6.6 5.0 65.2 45.8 Less: Litigation accrual (recovery) — 1.2 (0.2) — — Adjusted non-interest expense $ 99.0 $ 98.1 $ 97.4 $ 142.

  20. Slide 20: Non-GAAP Reconciliation

    NON-GAAP RECONCILIATION 2Q21 3Q21 4Q21 1Q22 2Q22 (Dollars in millions) Net interest income on a fully-taxable equivalent ("FTE") basis 119.2 127.5 122.3 179.6 240.0 Less: Purchase accounting accretion 2.5 2.3 1.9 7.6 16.7 Less: PPP Income 7.8 14.2 9.7 2.8 1.1 Adjusted net interest income (A) 108.9 1

  21. Slide 21: Non-GAAP Reconciliation

    NON-GAAP RECONCILIATION 2Q21 3Q21 4Q21 1Q22 2Q22 (Dollars in millions); all adjustments are after-tax Reported net (loss) income 42.5 47.1 51.1 (33.4) 64.1 Plus: Non-PCD CECL Day 2 provision — — — 55.2 — Plus: Acquisition-related expenses — 5.1 3.8 52.7 36.6 Plus: MSR fair value adjustments — — (0.8

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