Key Highlights

  • Net income was USD 62.2 million, or USD 0.65 per diluted share.
  • Net interest Margin rose 8 basis points to 3.53%.
  • Non-performing assets fell 6.1% to USD 155.0 million.
  • The company repurchased 2.04 million shares for USD 76.3 million.

Earnings

First Interstate BancSystem (NASDAQ:FIBK) reported third-quarter 2026 results on Thursday. Net Income was USD 62.2 million, or USD 0.65 per diluted share, against USD 83.9 million, or USD 0.87, in the second quarter and USD 71.4 million, or USD 0.69, a year earlier. The second quarter included a USD 19.5 million gain on the sale of eleven Nebraska branches, which explains most of the USD 21.7 million quarterly decline in net income.

Net Interest Income and Fees

Net interest income rose USD 4.0 million to USD 206.2 million from USD 202.2 million, on higher yields on earning assets and lower interest expense on time deposits, partly offset by lower Loan balances. It was USD 0.6 million, or 0.3%, below the third quarter of 2025, a gap the company tied to the sale of the Arizona and Kansas branches in the fourth quarter of 2025 and the Nebraska branches in the second quarter of 2026.

The net interest margin was 3.53% against 3.45% in the second quarter and 3.34% a year earlier. The fully taxable equivalent margin was 3.55%, and excluding interest accretion on acquired loans it was 3.51%, up 9 basis points. Accretion contributed USD 2.4 million against USD 3.5 million.

Noninterest income was USD 43.3 million against USD 61.7 million in the second quarter, with the difference mostly the Nebraska gain. Payment services revenues were USD 16.7 million, Wealth Management revenues were USD 11.1 million, up 4.7%, and service charges on deposit accounts were USD 6.4 million. Noninterest expense was USD 157.1 million against USD 158.9 million in the second quarter and USD 157.9 million a year earlier.

Credit Quality

The provision for Credit losses was USD 10.5 million, against a reduction of USD 3.2 million in the second quarter. Net charge-offs were USD 9.9 million, or an annualized 0.28% of average loans, against 0.27% and 0.06% a year earlier. The allowance was 1.30% of loans held for investment, and coverage of Non-Performing Loans rose to 120.1% from 114.1%.

Non-performing assets fell USD 10.0 million to USD 155.0 million, and were USD 30.6 million, or 16.5%, lower than a year earlier. Criticized loans were USD 939.5 million, up USD 2.1 million from June and down USD 224.6 million from USD 1,164.1 million a year earlier.

Deposits, Capital and Dividend

Total deposits were USD 21,388.5 million, down USD 52.8 million, or 0.2%, with interest bearing categories lower and noninterest bearing deposits higher. Year over year deposits fell 5.4%, which includes USD 641.6 million of deposits sold with the Arizona and Kansas branches and USD 244.2 million sold with the Nebraska branches.

The company repurchased about 2.04 million shares for USD 76.3 million in the quarter. Since August 2025 it has repurchased about 10.02 million shares for USD 346.6 million, leaving USD 103.4 million of the USD 450.0 million authorization. The common Equity tier 1 ratio fell 18 basis points to 14.36%, mainly because of repurchases. The board declared a Dividend of USD 0.47 per share, payable Nov. 13 to holders of record on Nov. 3, equal to a 5.0% annualized Yield on the USD 37.82 average third-quarter closing price. Jeff Lee became Executive Vice President and Chief Operations Officer on Sept. 14.

Reference Points

Net income of USD 62.2 million compares with USD 71.4 million a year earlier, while the margin is 19 basis points higher. Reference points include deposit balances after branch sales, net charge-offs at 0.28% of loans, the remaining USD 103.4 million of repurchase capacity, and the common equity tier 1 ratio at 14.36%.