First Interstate BancSystem, Inc. (NASDAQ: FIBK) has announced its financial results for the second quarter of 2024, revealing a net income of $60.0 million, or $0.58 per share. This represents a slight increase from the $58.4 million, or $0.57 per share, reported in the first quarter of 2024 but is down from $67.0 million, or $0.65 per share, recorded in the same quarter last year.
**Key Financial Highlights:**
– **Criticized Loans:** The company saw a $12.0 million decrease in criticized loans by June 30, 2024, compared to March 31, 2024. This reduction was attributed to loan upgrades, payoffs, and charge-offs.
– **Non-Performing Assets:** There was a $14.5 million decrease in non-performing assets as of June 30, 2024, primarily due to the reduction of nonaccrual loans and the sale of other real estate owned (OREO) properties.
– **Net Interest Margin:** The net interest margin rose to 2.97% for the second quarter of 2024, up from 2.91% in the previous quarter. On a fully taxable equivalent (FTE) basis, the margin increased to 3.00%.
– **Loans and Deposits:** Loans held for investment grew by $32.2 million, and total deposits increased by $60.7 million, both from March 31, 2024.
– **Non-Interest Expense:** The company successfully reduced non-interest expenses by $3.3 million from the previous quarter and $7.0 million compared to the second quarter of 2023.
Kevin P. Riley, President and CEO, commented on the results, stating, “We continued executing well in the second quarter, with results generally aligning with our expectations. We were particularly pleased with our net interest margin expansion, the reduction in non-performing assets, and our ongoing expense control. With our strong capital levels and liquidity, adequate credit loss allowances, and expectations for continued margin expansion and expense management, we are confident in our ability to deliver solid returns through the remainder of 2024 and into 2025.”
The board of directors has declared a dividend of $0.47 per common share, payable on August 15, 2024, to shareholders of record as of August 5, 2024. This dividend provides a 7.1% annualized yield based on the average closing price of $26.48 per share during the second quarter.
Net interest income increased by $1.6 million, or 0.8%, to $201.7 million in the second quarter of 2024, driven by a decrease in interest expense from reduced borrowings. However, it fell by $16.7 million, or 7.6%, from the same quarter in 2023 due to higher costs of interest-bearing deposits.
The company recorded a provision for credit losses of $9.0 million for the second quarter of 2024, an increase from $5.3 million in the first quarter and a decrease from $11.7 million in the second quarter of 2023. Net charge-offs amounted to $13.5 million, representing an annualized 0.30% of average loans outstanding.
The allowance for credit losses as a percentage of period-end loans was 1.28% at June 30, 2024, up from 1.25% at March 31, 2024, and 1.23% a year earlier. Coverage of non-performing loans improved to 138.4%, up from 130.1% at the end of March but down from 242.0% a year ago.
By: Montana Newsroom staff
