First Interstate Bancsystem, Inc. · NASDAQ:FIBK
First Interstate Bancsystem — Investor Presentation (January 2022)
43 slides from First Interstate Bancsystem's investor presentation, Jan 27, 2022
Slide 1: Investor Presentation January 2022
Investor Presentation January 2022 Filed by First Interstate BancSystem, Inc. pursuant to Rule 425 under the Securities Act of 1933 Subject Company: Great Western Bancorp, Inc. Commission File No. 001-36688 Date: January 27, 2022 Exhibit 99.2
Slide 2: Cautionary Note Regarding Forward-Looking Statements
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Page 2 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, an
Slide 3: Additional Information about the Transaction and Where to Find It
Additional Information about the Transaction and Where to Find It Page 3 In connection with the Transaction, FIBK has filed with the SEC a Registration Statement on Form S-4 to register the shares of FIBK capital stock to be issued in connection with the Transaction. The Registration Statement inclu
Slide 4: FIBK Overview
FIBK Overview Page 4 Overview Headquarters Billings, MT Kroll Rating (Subordinated Notes) BBB Total Assets $19.7 Billion Trust Assets Under Management $5.9 Billion Total Deposits $16.3 Billion Description • Headquartered in Billings, MT and focused on regional community banking in Idaho, Montana, Or
Slide 5: Investment Highlights
Investment Highlights • Experienced leadership team • Strong financial performance • Synergistic growth opportunities following the Great Western merger • Diversified client base tempers economic volatility • Highly liquid, asset sensitive balance sheet positioned for higher rates • Strong core depo
Slide 6: Experienced Leadership Team
Name Title Age Industry Experience Years at FIBK Kevin P. Riley President and Chief Executive Officer 62 30+ Years 8 Years Marcy D. Mutch Chief Financial Officer 62 30+ Years 15 Years Russell A. Lee Chief Banking Officer 65 40+ Years 6 Years Jodi Delahunt Hubbell Chief Operating Officer 56 30+ Years
Slide 7: Building the First Interstate Franchise
to over 300 banking offices in 14 states 7 Building the First Interstate Franchise Mr. Homer Scott establishes First Interstate Bank with the purchase of the Bank of Commerce in Sheridan, Wyoming 1968 2019 11 BRANCHES $725 MILLION 2018 20 BRANCHES $814 MILLION 2019 3 BRANCHES $130 MILLION 2014 Mount
Slide 8: Attractive Markets: Historically Stable Employment
Attractive Markets: Historically Stable Employment B est 5 States 1 Nebraska 1.8% 2 Utah 2.1% 3 Oklahoma 2.5% 4 Idaho 2.6% 5 Vermont 2.6% Wo rst 5 States 50 California 6.9% 49 Nevada 6.8% 48 New York 6.6% 47 New Jersey 6.6% 46 New M exico 6.2% 0.0% to 3.0% 3.0% to 4.0% 4.0% to 6.0% Source: Bureau of
Slide 9: Solid Funding Base
Solid Funding Base First Interstate -BancSystem
Slide 10: Strong Core Deposit Base
Strong Core Deposit Base Page 10 As of December 31, 2021 Overview Total Deposits $16.3 Billion Total Core Deposits* $16.1 Billion Cost of Deposits, incl. Repos (Q4 2021) 4 basis points Demand Non- Interest Bearing 34% Demand Interest Bearing 29% Savings 31% Time, Other 5% Time, $250K and over 1% *Co
Slide 11: Source of Deposits
Source of Deposits Allocation of $16.1B of Deposits by State Page 11 *The market share percentages are per the FDIC, not including Credit Union Deposits within each community. As of December 31, 2021 LOCATION MARKET SHARE* JUNE 2021 LOCATION MARKET SHARE* JUNE 2021 Laramie, WY 45% Jackson, WY 13% Ri
Slide 12: Balance of Consumer and Business Deposits
Balance of Consumer and Business Deposits 57% 57% 55% 53% 51% 50% 50% 50% 43% 43% 45% 47% 49% 50% 50% 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2018 2019 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Total Consumer Deposits Total Business Deposits Page 12 P e rc e n t (% ) As of the applicable per
Slide 13: Credit Portfolio
Credit Portfolio First Interstate -BancSystem
Slide 14: Diversified Loan Portfolio by Industry
Diversified Loan Portfolio by Industry Loan Mix Commercial Commercial Real Estate & Construction Agriculture RE 2% Commercial RE 43% Residential RE 16% Construction RE 11% Consumer 10% Agriculture 2% Commercial 16% $9.3 Billion in Loans Real Estate and Rental and Leasing 19% Health Care and Social A
Slide 15: Loan Portfolio by State
Loan Portfolio by State Idaho 8% Montana 25% Oregon 18% South Dakota 5% Washington 11% Wyoming 9% Other* 24% Page 15 * “Other” is an aggregation of central lines of business that includes residential mortgages, credit cards, and indirect consumer loans. As of December 31, 2021
Slide 16: Trends in Unfunded Commitments
Trends in Unfunded Commitments Page 16 55.4% 66.6% 42.2% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% Jan '19 Feb '19 Mar '19 Apr '19 May '19 Jun '19 Jul '19 Aug '19 Sep '19 Oct '19 Nov '19 Dec '19 Jan '20 Feb '20 Mar '20 Apr '20 May '20 Jun '20 Jul '20 Aug '20 Sep '20 Oct '20 Nov '20
Slide 17: Trends in Unfunded Revolving Commitments
Trends in Unfunded Revolving Commitments Page 17 66.6% 33.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 Sep 2021 Dec 2021 Percentage Used / Unused (Revolving)* Total Unfunded Commitments % Total Funded Commitments % 0 200 400 600 800 1,000 1,200
Slide 18: Indirect Auto: Lending
Indirect Auto: Lending Consumer Indirect Production Indirect Loan Portfolio Page 18 As of December 31, 2021 • Est. Average Effective Term of RV: 45 months • Est. Average Effective Term of Auto: 32 months $ i n M il li o n s New Auto 23% Other 9% RV 24% Used Auto 44%4.73% 4.61% 4.52% 4.79% 4.80% 4.57
Slide 19: Indirect Auto: Delinquency
Indirect Auto: Delinquency Originations from a credit quality perspective • Approximately 57% of portfolio balances reflect originations above a 750 FICO score • Approximately 88% of portfolio balances reflect originations above a 700 FICO score • Not participating in the subprime space; 0.10% of th
Slide 20: Improving Asset Quality
Improving Asset Quality Non-Performing Loans to Loans Held for Investment (LHFI) Non-Performing Assets to Total Assets Non-Performing Assets to LHFI + OREO 0.39% 0.49% 0.39% 0.35% 0.29% 0.24% 0.20% 0.19% 0.15% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021
Slide 21: Criticized and Classified Loans
Criticized and Classified Loans 4.34% 4.49% 3.65% 3.74% 3.49% 3.16% 2.78% 2.61% 2.32% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2.58% 2.80% 2.43% 2.19% 1.96% 1.62% 1.47% 1.58% 1.39% 0.00% 0.50% 1.00% 1.50
Slide 22: Top Relationships
Top 10 Relationships Page 22 Borrower Industry Outstandings Unfunded Commitments Other Activities Related to Real Estate 49,631,601 41,717,919 91,349,520 Engineering Services 26,431,129 32,997,988 59,429,117 Lessors of Residential Buildings and Dwellings 31,536,876 22,685,598 54,222,474 Lessors of R
Slide 23: Current Expected Credit Loss (CECL)
Page 23 Current Expected Credit Loss (CECL)
Slide 24: Allowance for Credit Loss (ACL) – Funded Allocation by Segment
Allowance for Credit Loss (ACL) – Funded Allocation by Segment Page 24 *Variance between modeled loan outstanding balances and total loans are primarily Paycheck Protection Program (PPP) Loans, New Market Tax Credits and overdrafts. Totals may not sum due to rounding and/or non-disclosed segments. A
Slide 25: Balance Sheet Management
Page 25 Balance Sheet Management
Slide 26: Investment Portfolio
Investment Portfolio Quarterly New Purchases: Average Yield Quarterly New Purchases: Duration A/L Portfolio Composition ($6.52 Billion) 1.5% 1.2% 1.0% 1.3% 1.4% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% Q4-21Q3-21Q2-21Q1-21Q4-20 As of December 31, 2021 0% 0% 0% 1% 3% 4% 8% 8% 14% 16% 17% 29% 0% 5
Slide 27: Attractive Duration Profile
Attractive Duration Profile 3.27 3.60 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 D e c -2 0 J a n -2 1 F e b -2 1 M a r- 2 1 A p r- 2 1 M a y -2 1 J u n -2 1 J u l- 2 1 A u g -2 1 S e p -2 1 O c t- 2 1 N o v -2 1 D e c -2 1 INVESTMENT DURATION Securities Duration Securities + Fair Value Hedge Durat
Slide 28: Interest Rate Sensitivity
Interest Rate Sensitivity Page 28 NET INTEREST INCOME CHANGE ($) NET INTEREST INCOME CHANGE (%) Basecase assumes static balance sheet as of December 31, 2021, and parallel rate shifts. 30.47% 22.87% 15.25% 7.68% 3.88% 0.00% -4.49% -8.24% -13.65% -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25
Slide 29: Well Positioned to Benefit from Higher Rates
Well Positioned to Benefit from Higher Rates Page 29 • 14.7% Increase in Core Deposits (Q4-21 vs. Q4-20) • 4 BPS Total Deposit Costs, incl. Repos (Q4 2021) • $2.2B Cash Position (12-31-21) We remain well positioned for the environment as deployment of excess liquidity could provide meaningful earnin
Slide 30: Loan Repricing Gap Schedule
Page 30 As of December 31, 2021 LOAN REPRICING GAP SCHEDULE* *Contractual Repricing Benchmarks Well Positioned to Benefit from Higher Rates LOAN REPRICING CHARACTERISTICS Fixed 53.64% Adjustable (Excl: 1M Libor) 21.45% Libor 1M 12.25% Variable 12.66% $4,521 $2,780 $1,380 $650 $0 $500 $1,000 $1,500 $
Slide 31: Current Financial Performance
Page 31 Current Financial Performance
Slide 32: Pre-Provision Net Revenue (PPNR)
Pre-Provision Net Revenue (PPNR) Page 32 1 Net Income Before Tax + Provision Expense. PPNR is a Non-GAAP measurement. See Appendix for Non-GAAP reconciliation. The decrease in PPNR during Q4 2021 was due to a decline in net interest income of $5.1 million, primarily driven by a decrease in PPP inter
Slide 33: Net Interest Margin Analysis: Contribution to Change
2.91% 2.69% -8 BPS 0 BPS 0 BPS 1 BPS -16 BPS 1 BPS 0 BPS 0 BPS 2.00% 2.10% 2.20% 2.30% 2.40% 2.50% 2.60% 2.70% 2.80% 2.90% 3.00% Q3-21 Loans Investments Cash Deposits Loans Investments Cash Deposits Q4-21 NET INTEREST MARGIN CONTRIBUTION: BREAKDOWN Net Interest Margin Analysis: Contribution to Chang
Slide 34: Non-Interest Income
Non-Interest Income Payment Services 30.2% Mortgage Banking 21.4% Wealth Management 19.3% Deposit Service Charges 11.8% Other Service Charges and Fees 7.5% Other Income 9.9% 23.5% of Total Revenue Page 34 Quarter Ended December 31, 2021
Slide 35: Payment Services
Payment Services $3.2 $6.4 $1.7 Total: $11.3 Million** Debit Interchange Credit Interchange Other fee income $232.8 $239.4 $218.8 $262.3 $270.1 $273.1 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Credit Card Volumes* Business Consumer **As of December
Slide 36: Mortgage Production
Mortgage Production QUARTERLY PRODUCTION VOLUME Page 36 As of December 31, 2021 M il li o n s 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $- $100 $200 $300 $400 $500 $600 $700 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Purchase Refinance % Sold to Secondary Mark
Slide 37: Wealth Management
Wealth Management $3,688 $574 $1,352 $267 Total: $5,881 Million Discretionary Non-Discretionary Brokerage Retirement Plan $3,600 $4,100 $4,600 $5,100 $5,600 $6,100 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Assets Under Administration As of December 31, 2021 (in millions) Page 37 $ i n m il li o n s
Slide 38: Growth Strategies and Capital Allocation
Page 38 Growth Strategies and Capital Allocation
Slide 39: Maximizing Shareholder Value
Maximizing Shareholder Value Management’s priority is to deploy capital through: Page 39 Return on Capital Organic Growth M&A Share Repurchases Special Dividend Dividends
Slide 40: We are Delivering Results
We are Delivering Results Since the IPO in March 2010, FIBK has delivered a 309% total return to shareholders Source: Bloomberg 309.73 % -100 -50 0 50 100 150 200 250 300 350 400 450 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 P e rc e n t (% ) FIBK: TOTAL RET
Slide 41: Appendix
Appendix FirstInterstate .BancSystem
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures Page 42 This presentation contains pre-provision net revenue (PPNR) which is a non-GAAP financial measure that management uses to evaluate our performance relative to our targeted capital adequacy standards. PPNR is calculated as net-interest income plus non-interest inco
Slide 43: Non-GAAP Reconciliation
Non-GAAP Reconciliation Page 43 (Dollars in millions) Pre-Provision Net Revenue (PPNR) Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Net interest income (GAAP) $128.4 $120.7 $118.8 $126.9 $121.8 Plus: Noninterest income (GAAP) $33.9 $38.1 $35.3 $39.7 $37.4 Total revenues (GAAP) $162.3 $158.8 $154.1 $166.6
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