First Interstate BancSystem, Inc. (NASDAQ:FIBK) reports fourth quarter 2015 net income of $23.4 million, or $0.51 per share, a 16% increase over third quarter 2015 net income of $20.2 million, or $0.44 per share. Exclusive of non-core acquisition and litigation expenses and net investment securities gains, the Company's fourth quarter 2015 core net income was $23.5 million, or $0.52 per share, as compared to core net income of $23.6 million, or $0.52 per share, for third quarter 2015.
For the year ended December 31, 2015, the Company reports net income of $86.8 million, or $1.90 per share, compared to $84.4 million, or $1.87 per share in 2014. During 2015, the Company recorded non-core expenses of $5.8 million, including $794 thousand of acquisition costs and $5.0 million of legal and settlement expenses. Exclusive of non-core acquisition and litigation expenses and net investment securities gains, the Company's 2015 core net income was $90.3 million, or $1.98 per share, as compared to core net income of $89.3 million, or $1.98 per share, in 2014.
HIGHLIGHTS
- Core pre-tax, pre-provision net income of $38.5 million, a 4.4% increase over the prior quarter and a 2.3% increase from the same period in the prior year.
- Annual core pre-tax, pre-provision net income of $142.9 million in 2015, a 9.2% increase over the prior year.
- Net interest margin ratio of 3.49%, a 2 basis point increase from the prior quarter and an 11 basis point increase from the same period in the prior year.
- Organic loan growth of 6.4% year-over-year, total loan growth of 7.1% year-over-year.
- Loan to deposit ratio of 74.0% as of December 31, 2015, compared to 69.9% a year ago.
“We finished 2015 with a solid quarter driven by good loan and deposit growth, stable expense levels and a further reduction in criticized loans,” said Kevin Riley, President and Chief Executive Officer of First Interstate BancSystem, Inc. “We saw healthy loan demand throughout our markets and our loan growth was well balanced across our commercial, commercial real estate, construction, consumer and residential real estate portfolios. With the loan growth generating a higher level of revenue, we were able to improve our efficiency ratio and increase operating leverage," Riley continued.
“Moving into 2016, we anticipate a year of profitable growth driven by continued increases in both net interest income and non-interest income. We continue to implement cost rationalization plans across the organization so that we can maintain stable expense levels while increasing the investment in our digital banking platform. We are excited about enhancing our customer experience with a more robust set of digital banking products and services and believe the investment in our mobile and online banking capabilities will enhance our competitive positioning,” said Riley.
DIVIDEND DECLARATION
On January 21, 2016, the Company's board of directors declared a dividend of $0.22 per common share payable on February 12, 2016 to owners of record as of February 1, 2016. This dividend equates to a 3.1% annual yield based on the $28.90 average closing price of the Company's common stock during fourth quarter 2015, and reflects a 10% increase from dividends paid during fourth quarter 2015 of $0.20 per common share.
ANNUAL MEETING DATE SET
On January 21, 2016, the Company's Board of Directors voted that the Annual Meeting of Shareholders be held on May 25, 2016, at the First Interstate Bank Operations Center, 1800 Sixth Avenue North, Billings, Montana at 4:00 p.m. Mountain Daylight Time. The record date for determination of shareholders entitled to notice of, and to vote at, the Annual Meeting is March 18, 2016.
RESULTS OF OPERATIONS
Fourth Quarter Results:
Net Interest Income. The Company's net interest income, on a fully taxable equivalent or FTE basis, increased $2.1 million to $69.5 million during fourth quarter 2015, as compared to $67.4 million during third quarter 2015, primarily due to an increase in loan yield combined with a 1.0% increase in average outstanding loans, a favorable shift in loan mix quarter-over-quarter and higher recoveries of charged-off interest. Interest accretion attributable to the fair valuation of acquired loans contributed $1.3 million of interest income during fourth quarter 2015, of which approximately $327 thousand was related to early pay-offs. This compares to interest accretion of $1.4 million during third quarter 2015, of which $307 thousand was related to early pay-offs. In addition, the Company recovered previously charged-off interest of $1.0 million during fourth quarter 2015, compared to $679 thousand during third quarter 2015.
The Company's net interest margin ratio increased 2 basis points to 3.49% during fourth quarter 2015, as compared to 3.47% during the third quarter 2015. Exclusive of the accelerated interest accretion related to early payoffs of acquired loans and the impact of recoveries of charged-off interest, the Company's net interest margin ratio remained stable at 3.42% during the third and fourth quarters of 2015, and increased 10 basis points from 3.32% during fourth quarter 2014.
Provision for Loan Losses. The Company recorded a provision for loan losses of $3.3 million during fourth quarter 2015, compared to $1.1 million during third quarter 2015. The higher provision for loan losses in fourth quarter 2015, as compared to third quarter 2015, is reflective of loan growth and increases in specific reserves primarily related to the loans of one commercial real estate borrower.
Non-Interest Income. Non-interest income increased $413 thousand to $30.9 million during fourth quarter 2015, as compared to $30.5 million during third quarter 2015, primarily due to increases in other income resulting from higher returns on deferred compensation plan assets, which were partially offset by decreases in income from the origination and sale of mortgage loans.
Income from the origination and sale of loans decreased $701 thousand to $7.3 million during fourth quarter 2015, as compared to $8.0 million during third quarter 2015, due to seasonal declines in mortgage loan production which typically occur during the fourth quarter of each year. Mortgage loan production decreased 5% during fourth quarter 2015, as compared to third quarter 2015. This compares to an 11% decline during fourth quarter 2014, as compared to third quarter 2014. Loans originated for home purchases accounted for approximately 66% of fourth quarter 2015 loan production, as compared to approximately 74% during third quarter 2015.
Non-Interest Expense. Non-interest expense decreased $4.6 million to $60.9 million during fourth quarter 2015, as compared to $65.5 million during third quarter 2015. During the fourth quarter of 2015, the Company recorded non-core acquisition related expenses of $166 thousand, as compared to non-core acquisition, legal and settlement expenses of $5.6 million recorded during third quarter 2015. Exclusive of these non-core acquisition and litigation settlement expenses, non-interest expense increased $839 thousand, or 1.4%, to $60.8 million during fourth quarter 2015, compared to $59.9 million during third quarter 2015. During fourth quarter 2015, increases in employee benefits and OREO expenses were largely offset by decreases in salaries and wages expense.
Salaries and wages expense decreased $911 thousand to $24.5 million during fourth quarter 2015, as compared to $25.5 million during third quarter 2015. Lower incentive compensation accruals during the fourth quarter of 2015, as compared to third quarter 2015, were partially offset by separation payment expense of $730 thousand.
Employee benefits expense increased $264 thousand to $7.6 million during fourth quarter 2015, as compared to $7.3 million during third quarter 2015, primarily due to higher returns on deferred compensation plan assets and increases in group health insurance costs. These increases were partially offset by decreases in profit sharing plan accruals.
The Company recorded net OREO expense of $129 thousand during fourth quarter 2015, as compared to net OREO income of $720 thousand during third quarter 2015, due to decreases in net gains recorded on the sale of properties. During fourth quarter 2015, the Company recorded net gains of $129 thousand, as compared to net gains of $1.1 million recorded during third quarter 2015.
Year-to-Date Results:
Net Interest Income. Net FTE interest income increased $15.9 million to $268.7 million during 2015, as compared to $252.8 million in 2014, primarily due to growth in average loans and investment securities combined with a shift in the mix of deposits away from higher costing time deposit into lower costing demand and savings deposits.
The Company's net interest margin ratio was 3.46% during 2015, as compared to 3.49% in 2014. Exclusive of the accelerated interest accretion related to early payoffs of acquired loans and the impact of recoveries of charged-off interest, the Company's net interest margin ratio was 3.40% during 2015, as compared to 3.43% during 2014.
Provision for Loan Losses. During the year ended December 31, 2015, the Company recorded provisions for loan losses of $6.8 million, as compared to a $6.6 million reversal of provisions for loan losses in 2014. Year-over-year increases in provisions for loan losses are reflective of loan growth and increases in specific reserves on impaired loans.
Non-Interest Income. Non-interest income increased $9.5 million to $120.9 million in 2015, as compared to $111.4 million in 2015. The increase was primarily driven by increases in income from the origination and sale of mortgage loans, increases in other service charges, commissions and fees and higher wealth management revenues.
Income from the origination and sale of loans increased $6.0 million to $30.0 million for the year ended December 31, 2015, as compared to $23.9 million in 2014, due to a 25% increase in mortgage loan production volume year-over-year. Loans originated for home purchases accounted for approximately 66% of 2015 loan production, as compared to approximately 75% of loan production in 2014.
Non-Interest Expense. Non-interest expense increased $11.1 million to $248.0 million in 2015, as compared to $236.9 million in 2014. Exclusive of non-core acquisition and litigation settlement expenses, non-interest expense increased $13.4 million to $242.2 million in 2015, compared to $228.9 million in 2014. The year-over-year increase is largely attributable to the additional operating expenses of Mountain West Financial Corp ("Mountain West"), which was acquired on July 31, 2014, and Absarokee Bancorporation, Inc. ("Absarokee"), which was acquired on July 24, 2015.
Salaries and wages expense increased $4.9 million to $101.5 million in 2015, as compared to $96.5 million in 2014 due to inflationary wage increases, higher commissions paid to mortgage loan originators due to higher loan production volumes, increased personnel costs resulting from the Mountain West and Absarokee acquisitions and separation payment expense recorded during fourth quarter 2015. These increases were partially offset by lower incentive compensation accruals reflective of changes to the Company's 2015 short-term incentive plan.
Employee benefits expense increased $608 thousand to $30.7 million in 2015, as compared to $30.1 million in 2014, primarily due to higher group health insurance cost reflective of increased claim costs in 2015 and increased benefits costs resulting from the Mountain West and Absarokee acquisitions. These increases were partially offset by lower returns on deferred compensation plan assets during 2015, as compared to 2014.
Furniture and equipment expense increased $1.7 million to $15.5 million in 2015, as compared to $13.8 million in 2014, primarily due to costs associated with the implementation of new software systems placed into service during the last half of 2014, the continued upgrade of systems during 2015 and increased maintenance and equipment costs resulting from the Mountain West and Absarokee acquisitions.
Net OREO income increased $1.2 million, to $1.5 million in 2015, as compared to $272 thousand in 2014, primarily due to increases in net gains recorded on the sale of OREO properties. The Company recorded net gains on the sale of OREO properties of $3.0 million in 2015, as compared to $1.8 million in 2014.
Other expenses increased $5.4 million to $64.6 million in 2015, as compared to $59.2 million in 2014. During 2015, the Company recorded write-downs aggregating $806 thousand in the fair value of two vacated bank buildings held for sale and recorded a one-time contract termination fee of $876 thousand related to a change in payment service provider. In addition, the Company recorded fraud losses of $1.7 million in 2015, as compared to $1.2 million in 2014, due to unusually high fraudulent credit card activity during the first half of 2015. The remaining year-over-year increase in other expense was primarily due to professional fees associated with the identification and execution of revenue enhancement strategies and a change in trust platform, additional legal expense of approximately $1.0 million in conjunction with legal settlements reached in 2015 and additional operating expenses resulting from the Mountain West and Absarokee acquisitions.
BALANCE SHEET
Total assets increased $124 million to $8.7 billion as of December 31, 2015, from $8.6 billion as of September 30, 2015. This increase was due to the deployment of funds generated primarily through organic growth in deposits and securities sold under repurchase agreements, into loans and interest bearing deposits in banks.
Total loans increased $70 million, or 1.3%, to $5.2 billion as of December 31, 2015, as compared to $5.1 billion as of September 30, 2015, with all major categories of loans, except agricultural loans, experiencing organic loan growth.
The most significant growth occurred in commercial real estate loans, which increased $42 million to $1.8 billion as of December 31, 2015, from $1.7 billion as of September 30, 2015. Management attributes this growth to continuing business expansion within the Company's market areas.
Agricultural loans decreased $13 million to $142 million as of December 31, 2015, from $155 million as of September 30, 2015, due to seasonal reductions in operating lines that typically occur during the fourth quarter of the year.
Total deposits increased $53 million, or less than 1.0%, to $7.1 billion as of December 31, 2015, as compared to $7.0 billion as of September 30, 2015. During the fourth quarter of 2015, the Company continued to experience a shift in the mix of deposits away from higher costing time deposits into lower costing savings and demand deposits. As of December 31, 2015, the mix of total deposits was 26% non-interest bearing demand, 31% interest bearing demand, 27% savings and 16% time.
Securities sold under repurchase agreements increased $73 million to $511 million as of December 31, 2015, from $438 million as of September 30, 2015, primarily due to fluctuations in the liquidity of our customers. All outstanding repurchase agreements were due in one day.
Long-term debt decreased $15 million to $28 million as of December 31, 2015, from $43 million as of September 30, 2015, due to the early repayment of a $15 million variable rate subordinated term loan with an original maturity date of February 28, 2018. There were no prepayment penalties associated with the repayment.
ASSET QUALITY
Asset quality remained stable during fourth quarter 2015 with non-performing assets ending the year at $78 million, or 0.90% of total assets, unchanged from September 30, 2015. Criticized loans showed improvement during fourth quarter, decreasing $23 million to $320 million as of December 31, 2015, from $344 million as of September 30, 2015, due to loan repayment and credit upgrades. In addition, net loan charge-offs declined to $728 thousand during fourth quarter 2015, as compared to $3 million during third quarter 2015.
The Company's allowance for loan losses as a percentage of period end loans increased slightly to 1.46% as of December 31, 2015, compared to 1.43% as of September 30, 2015.
ACQUISITION
On March 26, 2015, the Company entered into an agreement and plan of merger to acquire all of the outstanding stock of Absarokee Bancorporation, Inc. ("Absarokee"), a Montana-based bank holding company that operated one subsidiary bank, United Bank, with branches located in three Montana communities adjacent to the Company's existing market areas. The acquisition was completed on July 24, 2015 for cash consideration of $7.2 million. Immediately subsequent to the acquisition, United Bank was merged with and into the Company's existing bank subsidiary, First Interstate Bank. As of the date of the acquisition, Absarokee had total assets of $73 million, loans of $38 million and deposits of $64 million.
Fourth Quarter 2015 Conference Call for Investors
First Interstate BancSystem, Inc. will host a conference call to discuss fourth quarter 2015 results at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Time) on Thursday, January 28, 2016. The conference call will be accessible by telephone and through the Internet. Participants may join the call by dialing 1-877-507-0356 or by logging on to www.FIBK.com. The call will be recorded and made available for replay after 1:00 p.m. Eastern Time (11:00 a.m. Mountain Time) on January 28, 2016 through 9:00 a.m. Eastern Time (7:00 a.m. Mountain Time) on February 28, 2016, by dialing 1-877-344-7529 (using conference ID 10078575). The call will also be archived on our website, www.FIBK.com, for one year.
About First Interstate BancSystem, Inc.
First Interstate BancSystem, Inc. is a financial and bank holding company incorporated in 1971 and headquartered in Billings, Montana. The Company operates 81 banking offices, including detached drive-up facilities, in 45 communities in Montana, Wyoming and South Dakota. Through First Interstate Bank, the Company delivers a comprehensive range of banking products and services to individuals, businesses, municipalities and other entities throughout the Company's market areas.
Cautionary Note Regarding Forward-Looking Statements and Factors that Could Affect Future Results
This press release 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 inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are identified as those that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may” or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. The following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this report: continuing or worsening business and economic conditions, adverse economic conditions affecting Montana, Wyoming and western South Dakota, credit losses, lending risk, adequacy of the allowance for loan losses, impairment of goodwill, changes in interest rates, access to low-cost funding sources, dependence on the Company’s management team, ability to attract and retain qualified employees, governmental regulation and changes in regulatory, tax and accounting rules and interpretations, failure of technology, inability to meet liquidity requirements, failure to manage growth, competition, ineffective internal operational controls, environmental remediation and other costs, reliance on external vendors, litigation pertaining to fiduciary responsibilities, failure to effectively implement technology-driven products and services, soundness of other financial institutions, inability of our bank subsidiary to pay dividends, implementation of new lines of business or new product or service offerings, change in dividend policy, volatility of Class A common stock, decline in market price of Class A common stock, dilution as a result of future equity issuances, uninsured nature of any investment in Class A common stock, voting control of Class B stockholders, anti-takeover provisions, controlled company status, and subordination of common stock to Company debt.
These factors are not necessarily all of the factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made and we do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Consolidated Financial Summary | ||||||||||||||||||||
(Unaudited, $ in thousands, except per share data) | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
INCOME STATEMENT SUMMARIES | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | |||||||||||||||
Net interest income | $ | 68,420 | $ | 66,330 | $ | 65,288 | $ | 64,325 | $ | 65,516 | ||||||||||
Net interest income on a fully-taxable equivalent ("FTE") basis | 69,492 | 67,400 | 66,399 | 65,381 | 66,585 | |||||||||||||||
Provision for loan losses | 3,289 | 1,098 | 1,340 | 1,095 | 118 | |||||||||||||||
Non-interest income: | ||||||||||||||||||||
Other service charges, commissions and fees | 11,019 | 11,095 | 11,173 | 9,867 | 11,429 | |||||||||||||||
Income from the origination and sale of loans | 7,282 | 7,983 | 8,802 | 5,906 | 5,554 | |||||||||||||||
Wealth management revenues | 4,840 | 5,233 | 4,897 | 4,937 | 4,775 | |||||||||||||||
Service charges on deposit accounts | 4,655 | 4,379 | 4,053 | 3,944 | 4,432 | |||||||||||||||
Investment securities gains (losses), net | 62 | 23 | 46 | 6 | (19 | ) | ||||||||||||||
Other income | 3,037 | 1,769 | 2,799 | 3,122 | 5,190 | |||||||||||||||
Total non-interest income | 30,895 | 30,482 | 31,770 | 27,782 | 31,361 | |||||||||||||||
Non-interest expense: | ||||||||||||||||||||
Salaries and wages | 24,549 | 25,460 | 26,093 | 25,349 | 23,717 | |||||||||||||||
Employee benefits | 7,576 | 7,312 | 8,070 | 7,780 | 6,812 | |||||||||||||||
Occupancy, net | 4,445 | 4,413 | 4,529 | 4,492 | 4,770 | |||||||||||||||
Furniture and equipment | 4,179 | 3,849 | 3,703 | 3,793 | 4,120 | |||||||||||||||
Outsourced technology services | 2,548 | 2,520 | 2,593 | 2,463 | 2,468 | |||||||||||||||
Other real estate owned (income) expense, net | 129 | (720 | ) | (823 | ) | (61 | ) | (61 | ) | |||||||||||
Core deposit intangible amortization | 837 | 842 | 855 | 854 | 855 | |||||||||||||||
Non-core acquisition and litigation expenses | 166 | 5,566 | (7 | ) | 70 | 2,368 | ||||||||||||||
Other expenses | 16,512 | 16,260 | 16,965 | 14,852 | 16,604 | |||||||||||||||
Total non-interest expense | 60,941 | 65,502 | 61,978 | 59,592 | 61,653 | |||||||||||||||
Income before taxes | 35,085 | 30,212 | 33,740 | 31,420 | 35,106 | |||||||||||||||
Income taxes | 11,654 | 10,050 | 11,518 | 10,440 | 12,330 | |||||||||||||||
Net income | $ | 23,431 | $ | 20,162 | $ | 22,222 | $ | 20,980 | $ | 22,776 | ||||||||||
Core net income** | $ | 23,496 | $ | 23,610 | $ | 22,189 | $ | 21,020 | $ | 24,260 | ||||||||||
Core pre-tax, pre-provision net income** | $ | 38,478 | $ | 36,853 | $ | 35,027 | $ | 32,579 | $ | 37,611 | ||||||||||
PER COMMON SHARE DATA | ||||||||||||||||||||
Net income - basic | $ | 0.52 | $ | 0.45 | $ | 0.49 | $ | 0.46 | $ | 0.50 | ||||||||||
Net income - diluted | 0.51 | 0.44 | 0.49 | 0.46 | 0.49 | |||||||||||||||
Core net income - diluted | 0.52 | 0.52 | 0.49 | 0.46 | 0.53 | |||||||||||||||
Cash dividend paid | 0.20 | 0.20 | 0.20 | 0.20 | 0.16 | |||||||||||||||
Book value at period end | 20.92 | 20.70 | 20.32 | 20.13 | 19.85 | |||||||||||||||
Tangible book value at period end** | 16.19 | 15.94 | 15.58 | 15.36 | 15.07 | |||||||||||||||
OUTSTANDING COMMON SHARES | ||||||||||||||||||||
At period-end | 45,428,225 | 45,345,007 | 45,506,583 | 45,429,468 | 45,788,415 | |||||||||||||||
Weighted-average shares - basic | 45,066,171 | 45,150,104 | 45,143,122 | 45,378,230 | 45,485,548 | |||||||||||||||
Weighted-average shares - diluted | 45,549,075 | 45,578,978 | 45,606,686 | 45,840,191 | 46,037,344 | |||||||||||||||
SELECTED ANNUALIZED RATIOS | ||||||||||||||||||||
Return on average assets | 1.07 | % | 0.94 | % | 1.06 | % | 1.00 | % | 1.05 | % | ||||||||||
Core return on average assets** | 1.07 | 1.10 | 1.06 | 1.00 | 1.12 | |||||||||||||||
Return on average common equity | 9.83 | 8.60 | 9.68 | 9.38 | 10.09 | |||||||||||||||
Core return on average common equity** | 9.86 | 10.07 | 9.66 | 9.40 | 10.75 | |||||||||||||||
Return on average tangible common equity** | 12.73 | 11.20 | 12.65 | 12.35 | 13.34 | |||||||||||||||
Net FTE interest income to average earning assets | 3.49 | 3.47 | 3.47 | 3.43 | 3.38 | |||||||||||||||
Core efficiency ratio ** | 59.62 | 61.12 | 63.14 | 63.04 | 59.71 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | ||||||||
Consolidated Financial Summary - continued | ||||||||
(Unaudited, $ in thousands, except per share data) | ||||||||
2015 | 2014 | |||||||
INCOME STATEMENT SUMMARIES | ||||||||
Net interest income | $ | 264,363 | $ | 248,461 | ||||
Net interest income on a fully-taxable equivalent ("FTE") basis | 268,671 | 252,763 | ||||||
Provision for loan losses | 6,822 | (6,622 | ) | |||||
Non-interest income: | ||||||||
Other service charges, commissions and fees | 43,154 | 40,742 | ||||||
Income from the origination and sale of loans | 29,973 | 23,940 | ||||||
Wealth management revenues | 19,907 | 18,996 | ||||||
Service charges on deposit accounts | 17,031 | 16,567 | ||||||
Investment securities gains (losses), net | 137 | 61 | ||||||
Other income | 10,727 | 11,095 | ||||||
Total non-interest income | 120,929 | 111,401 | ||||||
Non-interest expense: | ||||||||
Salaries and wages | 101,451 | 96,513 | ||||||
Employee benefits | 30,738 | 30,130 | ||||||
Occupancy, net | 17,879 | 17,796 | ||||||
Furniture and equipment | 15,524 | 13,816 | ||||||
Outsourced technology services | 10,124 | 9,423 | ||||||
Other real estate owned (income) expense, net | (1,475 | ) | (272 | ) | ||||
Core deposit intangible amortization | 3,388 | 2,251 | ||||||
Non-core acquisition and litigation expenses | 5,795 | 8,017 | ||||||
Other expenses | 64,589 | 59,195 | ||||||
Total non-interest expense | 248,013 | 236,869 | ||||||
Income before taxes | 130,457 | 129,615 | ||||||
Income taxes | 43,662 | 45,214 | ||||||
Net income | $ | 86,795 | $ | 84,401 | ||||
Core net income** | $ | 90,314 | $ | 89,349 | ||||
Core pre-tax, pre-provision net income** | $ | 142,937 | $ | 130,949 | ||||
PER COMMON SHARE DATA | ||||||||
Net income - basic | $ | 1.92 | $ | 1.89 | ||||
Net income - diluted | 1.90 | 1.87 | ||||||
Core net income - diluted | 1.98 | 1.98 | ||||||
Cash dividend paid | 0.80 | 0.64 | ||||||
OUTSTANDING COMMON SHARES | ||||||||
Weighted-average shares - basic | 45,184,091 | 44,615,060 | ||||||
Weighted-average shares - diluted | 45,646,418 | 45,210,561 | ||||||
SELECTED ANNUALIZED RATIOS | ||||||||
Return on average assets | 1.02 | % | 1.06 | % | ||||
Core return on average assets** | 1.06 | 1.12 | ||||||
Return on average common equity | 9.37 | 9.86 | ||||||
Core return on average common equity** | 9.75 | 10.44 | ||||||
Return on average tangible common equity** | 12.23 | 12.88 | ||||||
Net FTE interest income to average earning assets | 3.46 | 3.49 | ||||||
Core efficiency ratio** | 61.70 | 62.34 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Consolidated Financial Summary - continued | ||||||||||||||||||||
(Unaudited, $ in thousands) | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
BALANCE SHEET SUMMARIES | Dec 31 | Sept 30 | Jun 30 | Mar 31 | Dec 31 | |||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 780,457 | $ | 708,295 | $ | 506,434 | $ | 637,803 | $ | 798,670 | ||||||||||
Investment securities | 2,057,505 | 2,067,636 | 2,139,433 | 2,340,904 | 2,287,110 | |||||||||||||||
Loans held for investment: | ||||||||||||||||||||
Commercial real estate | 1,793,258 | 1,750,797 | 1,704,073 | 1,670,829 | 1,639,422 | |||||||||||||||
Construction real estate | 430,719 | 419,260 | 403,228 | 406,305 | 418,269 | |||||||||||||||
Residential real estate | 1,032,851 | 1,020,445 | 999,038 | 997,123 | 999,903 | |||||||||||||||
Agricultural real estate | 156,234 | 163,116 | 158,506 | 156,734 | 167,659 | |||||||||||||||
Consumer | 844,353 | 831,961 | 799,126 | 768,462 | 762,471 | |||||||||||||||
Commercial | 792,416 | 778,648 | 819,119 | 754,149 | 740,073 | |||||||||||||||
Agricultural | 142,151 | 154,855 | 142,629 | 117,569 | 124,859 | |||||||||||||||
Other | 1,339 | 1,712 | 2,905 | 377 | 3,959 | |||||||||||||||
Mortgage loans held for sale | 52,875 | 55,686 | 75,322 | 55,758 | 40,828 | |||||||||||||||
Total loans | 5,246,196 | 5,176,480 | 5,103,946 | 4,927,306 | 4,897,443 | |||||||||||||||
Less allowance for loan losses | 76,817 | 74,256 | 76,552 | 75,336 | 74,200 | |||||||||||||||
Net loans | 5,169,379 | 5,102,224 | 5,027,394 | 4,851,970 | 4,823,243 | |||||||||||||||
Premises and equipment, net | 190,812 | 190,386 | 189,488 | 192,748 | 195,212 | |||||||||||||||
Goodwill and intangible assets (excluding mortgage servicing rights) | 215,119 | 215,843 | 215,958 | 216,815 | 218,870 | |||||||||||||||
Company owned life insurance | 187,253 | 185,990 | 177,625 | 154,741 | 153,821 | |||||||||||||||
Other real estate owned, net | 6,254 | 8,031 | 11,773 | 15,134 | 13,554 | |||||||||||||||
Mortgage servicing rights, net | 15,621 | 15,336 | 14,654 | 14,093 | 14,038 | |||||||||||||||
Other assets | 105,796 | 110,789 | 103,459 | 104,334 | 105,418 | |||||||||||||||
Total assets | $ | 8,728,196 | $ | 8,604,530 | $ | 8,386,218 | $ | 8,528,542 | $ | 8,609,936 | ||||||||||
Liabilities and stockholders' equity: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non-interest bearing | $ | 1,823,716 | $ | 1,832,535 | $ | 1,757,641 | $ | 1,757,664 | $ | 1,791,364 | ||||||||||
Interest bearing | 5,265,221 | 5,203,259 | 5,046,760 | 5,210,495 | 5,214,848 | |||||||||||||||
Total deposits | 7,088,937 | 7,035,794 | 6,804,401 | 6,968,159 | 7,006,212 | |||||||||||||||
Securities sold under repurchase agreements | 510,635 | 437,533 | 469,145 | 462,073 | 502,250 | |||||||||||||||
Accounts payable, accrued expenses and other liabilities | 67,769 | 67,062 | 62,272 | 58,335 | 72,006 | |||||||||||||||
Long-term debt | 27,885 | 43,089 | 43,068 | 43,048 | 38,067 | |||||||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 82,477 | 82,477 | 82,477 | 82,477 | |||||||||||||||
Total liabilities | 7,777,703 | 7,665,955 | 7,461,363 | 7,614,092 | 7,701,012 | |||||||||||||||
Stockholders' equity: | ||||||||||||||||||||
Common stock | 311,720 | 309,167 | 313,125 | 310,544 | 323,596 | |||||||||||||||
Retained earnings | 638,367 | 623,967 | 612,875 | 599,727 | 587,862 | |||||||||||||||
Accumulated other comprehensive income (loss) | 406 | 5,441 | (1,145 | ) | 4,179 | (2,534 | ) | |||||||||||||
Total stockholders' equity | 950,493 | 938,575 | 924,855 | 914,450 | 908,924 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 8,728,196 | $ | 8,604,530 | $ | 8,386,218 | $ | 8,528,542 | $ | 8,609,936 | ||||||||||
CONSOLIDATED CAPITAL RATIOS | ||||||||||||||||||||
Total risk-based capital | 15.36 | % | * | 15.28 | % | 15.37 | % | 15.43 | % | 16.15 | % | |||||||||
Tier 1 risk-based capital | 13.99 | * | 13.83 | 13.88 | 13.94 | 14.52 | ||||||||||||||
Tier 1 common capital to total risk-weighted assets | 12.69 | * | 12.52 | 12.55 | 12.58 | 13.08 | ||||||||||||||
Leverage Ratio | 10.12 | * | 10.13 | 10.11 | 9.73 | 9.61 | ||||||||||||||
Tangible common stockholders' equity to tangible assets** | 8.64 | 8.62 | 8.68 | 8.39 | 8.22 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Consolidated Financial Summary - continued | ||||||||||||||||||||
(Unaudited, $ in thousands) | ||||||||||||||||||||
2015 | 2014 | |||||||||||||||||||
ASSET QUALITY | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | |||||||||||||||
Allowance for loan losses | $ | 76,817 | $ | 74,256 | $ | 76,552 | $ | 75,336 | $ | 74,200 | ||||||||||
As a percentage of period-end loans | 1.46 | % | 1.43 | % | 1.50 | % | 1.53 | % | 1.52 | % | ||||||||||
Net charge-offs (recoveries) during quarter | $ | 728 | $ | 3,394 | $ | 124 | $ | (41 | ) | $ | 149 | |||||||||
Annualized as a percentage of average loans | 0.06 | % | 0.26 | % | 0.01 | % | — | % | 0.01 | % | ||||||||||
Non-performing assets: | ||||||||||||||||||||
Non-accrual loans | $ | 66,385 | $ | 66,359 | $ | 70,848 | $ | 73,941 | $ | 62,182 | ||||||||||
Accruing loans past due 90 days or more | 5,602 | 3,357 | 2,153 | 5,175 | 2,576 | |||||||||||||||
Total non-performing loans | 71,987 | 69,716 | 73,001 | 79,116 | 64,758 | |||||||||||||||
Other real estate owned | 6,254 | 8,031 | 11,773 | 15,134 | 13,554 | |||||||||||||||
Total non-performing assets | 78,241 | 77,747 | 84,774 | 94,250 | 78,312 | |||||||||||||||
As a percentage of: | ||||||||||||||||||||
Total loans and OREO | 1.49 | % | 1.50 | % | 1.66 | % | 1.91 | % | 1.59 | % | ||||||||||
Total assets | 0.90 | % | 0.90 | % | 1.01 | % | 1.11 | % | 0.91 | % |
ASSET QUALITY TRENDS | Provision for Loan Losses |
Net
Charge-offs (Recoveries) | Allowance for Loan Losses | Accruing Loans 30-89 Days Past Due | Accruing TDRs | Non-Performing Loans | Non-Performing Assets | ||||||||||||||||||||
Q4 2012 | $ | 8,000 | $ | 6,495 | $ | 100,511 | $ | 34,602 | $ | 31,932 | $ | 110,076 | $ | 142,647 | |||||||||||||
Q1 2013 | 500 | 3,107 | 97,904 | 41,924 | 35,787 | 100,535 | 133,005 | ||||||||||||||||||||
Q2 2013 | 375 | (249 | ) | 98,528 | 39,408 | 23,406 | 105,471 | 128,253 | |||||||||||||||||||
Q3 2013 | (3,000 | ) | 2,538 | 92,990 | 39,414 | 21,939 | 96,203 | 114,740 | |||||||||||||||||||
Q4 2013 | (4,000 | ) | 3,651 | 85,339 | 26,944 | 21,780 | 96,671 | 112,175 | |||||||||||||||||||
Q1 2014 | (5,000 | ) | (1,032 | ) | 81,371 | 41,034 | 19,687 | 89,778 | 106,372 | ||||||||||||||||||
Q2 2014 | (2,001 | ) | 1,104 | 78,266 | 24,250 | 23,531 | 80,660 | 97,085 | |||||||||||||||||||
Q3 2014 | 261 | 4,296 | 74,231 | 38,400 | 20,956 | 73,263 | 91,759 | ||||||||||||||||||||
Q4 2014 | 118 | 149 | 74,200 | 28,848 | 20,952 | 64,758 | 78,312 | ||||||||||||||||||||
Q1 2015 | 1,095 | (41 | ) | 75,336 | 40,744 | 16,070 | 79,116 | 94,250 | |||||||||||||||||||
Q2 2015 | 1,340 | 124 | 76,552 | 31,178 | 15,127 | 73,001 | 84,774 | ||||||||||||||||||||
Q3 2015 | 1,098 | 3,394 | 74,256 | 38,793 | 16,702 | 69,716 | 77,747 | ||||||||||||||||||||
Q4 2015 | 3,289 | 728 | 76,817 | 42,869 | 15,419 | 71,987 | 78,241 |
CRITICIZED LOANS | Special Mention | Substandard | Doubtful | Total | |||||||||||
Q4 2012 | $ | 209,933 | $ | 215,188 | $ | 42,459 | $ | 467,580 | |||||||
Q1 2013 | 197,645 | 197,095 | 43,825 | 438,565 | |||||||||||
Q2 2013 | 192,390 | 161,786 | 52,266 | 406,442 | |||||||||||
Q3 2013 | 180,850 | 168,278 | 42,415 | 391,543 | |||||||||||
Q4 2013 | 159,081 | 154,100 | 45,308 | 358,489 | |||||||||||
Q1 2014 | 174,834 | 161,103 | 31,672 | 367,609 | |||||||||||
Q2 2014 | 160,271 | 155,744 | 29,115 | 345,130 | |||||||||||
Q3 2014 | 156,469 | 156,123 | 39,450 | 352,042 | |||||||||||
Q4 2014 | 154,084 | 163,675 | 34,854 | 352,613 | |||||||||||
Q1 2015 | 140,492 | 156,887 | 37,476 | 334,855 | |||||||||||
Q2 2015 | 155,707 | 159,899 | 31,701 | 347,307 | |||||||||||
Q3 2015 | 155,157 | 163,846 | 24,547 | 343,550 | |||||||||||
Q4 2015 | 127,270 | 162,785 | 30,350 | 320,405 |
*Preliminary estimate - may be subject to change.
**See Non-GAAP Financial Measures included herein for a discussion regarding core net income, tangible book value per common share, core return on average assets, core return on average common equity, return on average tangible common equity and tangible common stockholders' equity to tangible assets.
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||||
Average Balance Sheets | |||||||||||||||||||||||||||||||||
(Unaudited, $ in thousands) | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Average
Balance | Interest |
Average
Rate |
Average Balance | Interest |
Average Rate |
Average Balance | Interest |
Average Rate | |||||||||||||||||||||||||
Interest earning assets: | |||||||||||||||||||||||||||||||||
Loans (1)(2) | $ | 5,194,970 | $ | 64,711 | 4.94 | % | $ | 5,141,484 | $ | 62,577 | 4.83 | % | $ | 4,870,509 | $ | 61,619 | 5.02 | % | |||||||||||||||
Investment securities (2) | 2,059,585 | 8,958 | 1.73 | 2,097,835 | 8,927 | 1.69 | 2,195,178 | 9,413 | 1.70 | ||||||||||||||||||||||||
Interest bearing deposits in banks | 644,967 | 535 | 0.33 | 471,682 | 342 | 0.29 | 745,171 | 504 | 0.27 | ||||||||||||||||||||||||
Federal funds sold | 1,090 | 1 | 0.36 | 2,876 | 4 | 0.55 | 597 | — | — | ||||||||||||||||||||||||
Total interest earnings assets | 7,900,612 | 74,205 | 3.73 | 7,713,877 | 71,850 | 3.70 | 7,811,455 | 71,536 | 3.63 | ||||||||||||||||||||||||
Non-earning assets | 772,523 | 781,559 | 774,963 | ||||||||||||||||||||||||||||||
Total assets | $ | 8,673,135 | $ | 8,495,436 | $ | 8,586,418 | |||||||||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||||||||||||||
Demand deposits | $ | 2,145,748 | $ | 546 | 0.10 | % | $ | 2,086,112 | $ | 528 | 0.10 | % | $ | 2,148,522 | $ | 538 | 0.10 | % | |||||||||||||||
Savings deposits | 1,949,512 | 645 | 0.13 | 1,924,612 | 645 | 0.13 | 1,845,601 | 634 | 0.14 | ||||||||||||||||||||||||
Time deposits | 1,142,342 | 2,127 | 0.74 | 1,150,223 | 2,068 | 0.71 | 1,252,410 | 2,369 | 0.75 | ||||||||||||||||||||||||
Repurchase agreements | 464,104 | 69 | 0.06 | 433,007 | 55 | 0.05 | 481,901 | 56 | 0.05 | ||||||||||||||||||||||||
Other borrowed funds | 5 | — | — | 6 | — | — | 11 | — | — | ||||||||||||||||||||||||
Long-term debt | 37,707 | 704 | 7.41 | 43,200 | 544 | 5.00 | 38,037 | 558 | 5.82 | ||||||||||||||||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 622 | 2.99 | 82,477 | 610 | 2.93 | 98,930 | 796 | 3.19 | ||||||||||||||||||||||||
Total interest bearing liabilities | 5,821,895 | 4,713 | 0.32 | 5,719,637 | 4,450 | 0.31 | 5,865,412 | 4,951 | 0.33 | ||||||||||||||||||||||||
Non-interest bearing deposits | 1,847,528 | 1,787,419 | 1,751,023 | ||||||||||||||||||||||||||||||
Other non-interest bearing liabilities | 58,250 | 58,623 | 74,378 | ||||||||||||||||||||||||||||||
Stockholders’ equity | 945,462 | 929,757 | 895,605 | ||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 8,673,135 | $ | 8,495,436 | $ | 8,586,418 | |||||||||||||||||||||||||||
Net FTE interest income | 69,492 | 67,400 | 66,585 | ||||||||||||||||||||||||||||||
Less FTE adjustments (2) | (1,072 | ) | (1,070 | ) | (1,069 | ) | |||||||||||||||||||||||||||
Net interest income from consolidated statements of income | $ | 68,420 | $ | 66,330 | $ | 65,516 | |||||||||||||||||||||||||||
Interest rate spread | 3.41 | % | 3.39 | % | 3.30 | % | |||||||||||||||||||||||||||
Net FTE interest margin (3) | 3.49 | % | 3.47 | % | 3.38 | % | |||||||||||||||||||||||||||
Cost of funds, including non-interest bearing demand deposits (4) | 0.24 | % | 0.24 | % | 0.26 | % |
(1) Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.
(2) Interest income and average rates for tax exempt loans and securities are presented on an FTE basis.
(3) Net FTE interest margin during the period equals the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by average interest earning assets for the period.
(4) Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Average Balance Sheets - continued | |||||||||||||||||||||
(Unaudited, $ in thousands) | |||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||
December 31, 2015 | December 31, 2014 | ||||||||||||||||||||
Average
Balance | Interest |
Average
Rate |
Average Balance | Interest |
Average Rate | ||||||||||||||||
Interest earning assets: | |||||||||||||||||||||
Loans (1)(2) | $ | 5,056,810 | $ | 248,015 | 4.90 | % | $ | 4,602,907 | $ | 233,273 | 5.07 | % | |||||||||
Investment securities (2) | 2,191,968 | 37,167 | 1.70 | 2,122,587 | 36,755 | 1.73 | |||||||||||||||
Interest bearing deposits in banks | 508,314 | 1,537 | 0.30 | 506,067 | 1,334 | 0.26 | |||||||||||||||
Federal funds sold | 2,079 | 12 | 0.58 | 1,391 | 7 | 0.50 | |||||||||||||||
Total interest earnings assets | 7,759,171 | 286,731 | 3.70 | 7,232,952 | 271,369 | 3.75 | |||||||||||||||
Non-earning assets | 762,535 | 715,846 | |||||||||||||||||||
Total assets | $ | 8,521,706 | $ | 7,948,798 | |||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
Demand deposits | $ | 2,101,988 | $ | 2,105 | 0.10 | % | $ | 1,992,565 | $ | 2,094 | 0.11 | % | |||||||||
Savings deposits | 1,908,091 | 2,541 | 0.13 | 1,723,073 | 2,444 | 0.14 | |||||||||||||||
Time deposits | 1,171,952 | 8,461 | 0.72 | 1,198,053 | 9,241 | 0.77 | |||||||||||||||
Repurchase agreements | 456,255 | 231 | 0.05 | 454,265 | 237 | 0.05 | |||||||||||||||
Other borrowed funds | 6 | — | — | 8 | — | — | |||||||||||||||
Long-term debt | 40,521 | 2,300 | 5.68 | 37,442 | 2,016 | 5.38 | |||||||||||||||
Subordinated debentures held by subsidiary trusts | 82,477 | 2,422 | 2.94 | 88,304 | 2,574 | 2.91 | |||||||||||||||
Total interest bearing liabilities | 5,761,290 | 18,060 | 0.31 | 5,493,710 | 18,606 | 0.34 | |||||||||||||||
Non-interest bearing deposits | 1,774,696 | 1,543,079 | |||||||||||||||||||
Other non-interest bearing liabilities | 59,670 | 56,147 | |||||||||||||||||||
Stockholders’ equity | 926,050 | 855,862 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 8,521,706 | $ | 7,948,798 | |||||||||||||||||
Net FTE interest income | 268,671 | 252,763 | |||||||||||||||||||
Less FTE adjustments (2) | (4,308 | ) | (4,302 | ) | |||||||||||||||||
Net interest income from consolidated statements of income | $ | 264,363 | $ | 248,461 | |||||||||||||||||
Interest rate spread | 3.39 | % | 3.41 | % | |||||||||||||||||
Net FTE interest margin (3) | 3.46 | % | 3.49 | % | |||||||||||||||||
Cost of funds, including non-interest bearing demand deposits (4) | 0.24 | % | 0.26 | % |
(1) Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.
(2) Interest income and average rates for tax exempt loans and securities are presented on an FTE basis.
(3) Net FTE interest margin during the period equals the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by average interest earning assets for the period.
(4) Calculated by dividing total interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, this release contains certain non-GAAP financial measures that management uses to provide supplemental perspectives on capital adequacy, operating results, performance trends and financial condition. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies because other companies may not calculate these non-GAAP measures in the same manner. As a result, the usefulness of these measures to investors may be limited, and they should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP.
The Company adjusts certain capital adequacy measures to exclude intangible assets except mortgage servicing rights. Management believes these non-GAAP financial measures, which are intended to complement the capital ratios defined by banking regulators, are useful to investors in evaluating the Company's performance due to the importance that analysts place on these ratios and also allow investors to compare certain aspects of the Company's capitalization to other companies.
The Company also adjusts earnings and certain performance ratios to exclude certain non-core revenues and expenses, including investment securities net gains or losses, acquisition expenses consisting primarily of travel expenses and professional fees, and nonrecurring litigation expenses. Management believes these non-GAAP financial measures are useful to investors in evaluating operating trends by excluding amounts which the Company views as unrelated to its normalized operations. These non-core income and expense adjustments may be presented before or net of estimated income tax expense.
In addition, the Company adjusts net income to exclude income tax expense and provision for loan losses. Management believes this non-GAAP financial measure is useful to investors in evaluating operating trends by excluding pre-tax amounts which the Company views as fluctuating widely based on economic conditions.
The following tables reconcile the above described non-GAAP financial measures to their most directly comparable GAAP financial measures as of the dates indicated.
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Non-GAAP Financial Measures | |||||||||||||||||||||
(Unaudited, $ in thousands, except share and per share data) | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
As Of or For the Quarter Ended | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | ||||||||||||||||
Net income | $ | 23,431 | $ | 20,162 | $ | 22,222 | $ | 20,980 | $ | 22,776 | |||||||||||
Add back: income tax expense | 11,654 | 10,050 | 11,518 | 10,440 | 12,330 | ||||||||||||||||
Add back: provision for loan losses | 3,289 | 1,098 | 1,340 | 1,095 | 118 | ||||||||||||||||
Pre-tax, pre-provision net income | $ | 38,374 | $ | 31,310 | $ | 35,080 | $ | 32,515 | $ | 35,224 | |||||||||||
Net income | $ | 23,431 | $ | 20,162 | $ | 22,222 | $ | 20,980 | $ | 22,776 | |||||||||||
Adj: investment securities (gains) losses, net | (62 | ) | (23 | ) | (46 | ) | (6 | ) | 19 | ||||||||||||
Plus: acquisition & nonrecurring litigation expenses | 166 | 5,566 | (7 | ) | 70 | 2,368 | |||||||||||||||
Adj: income taxes | (39 | ) | (2,095 | ) | 20 | (24 | ) | (903 | ) | ||||||||||||
Total core net income | (A) | 23,496 | 23,610 | 22,189 | 21,020 | 24,260 | |||||||||||||||
Net income | $ | 23,431 | $ | 20,162 | $ | 22,222 | $ | 20,980 | $ | 22,776 | |||||||||||
Add back: income tax expense | 11,654 | 10,050 | 11,518 | 10,440 | 12,330 | ||||||||||||||||
Add back: provision for loan losses | 3,289 | 1,098 | 1,340 | 1,095 | 118 | ||||||||||||||||
Adj: investment securities (gains) losses, net | (62 | ) | (23 | ) | (46 | ) | (6 | ) | 19 | ||||||||||||
Plus: acquisition & nonrecurring litigation expenses | 166 | 5,566 | (7 | ) | 70 | 2,368 | |||||||||||||||
Core pre-tax, pre-provision net income | $ | 38,478 | $ | 36,853 | $ | 35,027 | $ | 32,579 | $ | 37,611 |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Non-GAAP Financial Measures - continued | |||||||||||||||||||||
(Unaudited, $ in thousands, except share and per share data) | |||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||
As Of or For the Quarter Ended | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | ||||||||||||||||
Total non-interest income | $ | 30,895 | $ | 30,482 | $ | 31,770 | $ | 27,782 | $ | 31,361 | |||||||||||
Adj: investment securities (gains) losses, net | (62 | ) | (23 | ) | (46 | ) | (6 | ) | 19 | ||||||||||||
Total core non-interest income | 30,833 | 30,459 | 31,724 | 27,776 | 31,380 | ||||||||||||||||
Net interest income | 68,420 | 66,330 | 65,288 | 64,325 | 65,516 | ||||||||||||||||
Total core revenue | (B) | $ | 99,253 | $ | 96,789 | $ | 97,012 | $ | 92,101 | $ | 96,896 | ||||||||||
Total non-interest expense | $ | 60,941 | $ | 65,502 | $ | 61,978 | $ | 59,592 | $ | 61,653 | |||||||||||
Less: acquisition & nonrecurring litigation expenses | (166 | ) | (5,566 | ) | 7 | (70 | ) | (2,368 | ) | ||||||||||||
Core non-interest expense | (C) | $ | 60,775 | $ | 59,936 | $ | 61,985 | $ | 59,522 | $ | 59,285 | ||||||||||
Total quarterly average stockholders' equity | (D) | $ | 945,462 | $ | 929,757 | $ | 921,229 | $ | 907,293 | $ | 895,605 | ||||||||||
Less: average goodwill and other intangible assets (excluding mortgage servicing rights) | (215,496 | ) | (215,829 | ) | (216,457 | ) | (218,511 | ) | (218,407 | ) | |||||||||||
Average tangible common stockholders' equity | (E) | $ | 729,966 | $ | 713,928 | $ | 704,772 | $ | 688,782 | $ | 677,198 | ||||||||||
Total stockholders' equity, period-end | $ | 950,493 | $ | 938,575 | $ | 924,855 | $ | 914,450 | $ | 908,924 | |||||||||||
Less: goodwill and other intangible assets (excluding mortgage servicing rights) | (215,119 | ) | (215,843 | ) | (215,958 | ) | (216,815 | ) | (218,870 | ) | |||||||||||
Total tangible common stockholders' equity | (F) | $ | 735,374 | $ | 722,732 | $ | 708,897 | $ | 697,635 | $ | 690,054 | ||||||||||
Total assets | $ | 8,728,196 | $ | 8,604,530 | $ | 8,386,218 | 8,528,542 | 8,609,936 | |||||||||||||
Less: goodwill and other intangible assets (excluding mortgage servicing rights) | (215,119 | ) | (215,843 | ) | (215,958 | ) | (216,815 | ) | (218,870 | ) | |||||||||||
Tangible assets | (G) | $ | 8,513,077 | $ | 8,388,687 | $ | 8,170,260 | $ | 8,311,727 | $ | 8,391,066 | ||||||||||
Total quarterly average assets | (H) | $ | 8,673,135 | $ | 8,495,436 | $ | 8,427,110 | $ | 8,489,413 | $ | 8,586,418 | ||||||||||
Total common shares outstanding, period end | (I) | 45,428,225 | 45,345,007 | 45,506,583 | 45,429,468 | 45,788,415 | |||||||||||||||
Weighted-average common shares - diluted | (J) | 45,549,075 | 45,578,978 | 45,606,686 | 45,840,191 | 46,037,344 | |||||||||||||||
Core earnings per share, diluted | (A/J) | $ | 0.52 | $ | 0.52 | $ | 0.49 | $ | 0.46 | $ | 0.53 | ||||||||||
Tangible book value per share, period-end | (F/I) | 16.19 | 15.94 | 15.58 | 15.36 | 15.07 | |||||||||||||||
Annualized net income | (K) | $ | 92,960 | $ | 79,991 | $ | 89,132 | $ | 85,086 | $ | 90,361 | ||||||||||
Annualized core net income | (L) | 93,218 | 93,670 | 89,000 | 85,248 | 96,249 | |||||||||||||||
Core return on average assets | (L/H) | 1.07 | % | 1.10 | % | 1.06 | % | 1.00 | % | 1.12 | % | ||||||||||
Core return on average common equity | (L/D) | 9.86 | 10.07 | 9.66 | 9.40 | 10.75 | |||||||||||||||
Return on average tangible common equity | (K/E) | 12.73 | 11.20 | 12.65 | 12.35 | 13.34 | |||||||||||||||
Tangible common stockholders' equity to tangible assets | (F/G) | 8.64 | 8.62 | 8.68 | 8.39 | 8.22 | |||||||||||||||
Core non-interest expense | (C) | $ | 60,775 | $ | 59,936 | $ | 61,985 | $ | 59,522 | $ | 59,285 | ||||||||||
Less: amortization of core deposit intangible | (837 | ) | (842 | ) | (855 | ) | (854 | ) | (855 | ) | |||||||||||
Adj: OREO (expense) income | (129 | ) | 720 | 823 | 61 | 61 | |||||||||||||||
Non-interest expense for core efficiency ratio | (M) | $ | 59,809 | $ | 59,814 | $ | 61,953 | $ | 58,729 | $ | 58,491 | ||||||||||
Total core revenue | (B) | $ | 99,253 | $ | 96,789 | $ | 97,012 | $ | 92,101 | $ | 96,896 | ||||||||||
Add: FTE adjustments | 1,072 | 1,070 | 1,111 | 1,056 | 1,069 | ||||||||||||||||
Total core revenue for core efficiency ratio | (N) | $ | 100,325 | $ | 97,859 | $ | 98,123 | $ | 93,157 | $ | 97,965 | ||||||||||
Core efficiency ratio | (M/N) | 59.62 | % | 61.12 | % | 63.14 | % | 63.04 | % | 59.71 | % |
FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES | |||||||||||
Non-GAAP Financial Measures - continued | |||||||||||
(Unaudited, $ in thousands, except share and per share data) | |||||||||||
Dec 31, | Dec 31, | ||||||||||
As Of or For the Year Ended | 2015 | 2014 | |||||||||
Net income | (A) | $ | 86,795 | $ | 84,401 | ||||||
Add back: income tax expense | 43,662 | 45,214 | |||||||||
Add back: provision for loan losses | 6,822 | (6,622 | ) | ||||||||
Pre-tax, pre-provision net income | $ | 137,279 | $ | 122,993 | |||||||
Net income | $ | 86,795 | $ | 84,401 | |||||||
Adj: investment securities (gains) losses, net | (137 | ) | (61 | ) | |||||||
Plus: acquisition & nonrecurring litigation expenses | 5,795 | 8,017 | |||||||||
Adj: income taxes | (2,139 | ) | (3,008 | ) | |||||||
Total core net income | (B) | $ | 90,314 | $ | 89,349 | ||||||
Net income | $ | 86,795 | $ | 84,401 | |||||||
Add back: income tax expense | 43,662 | 45,214 | |||||||||
Add back: provision for loan losses | 6,822 | (6,622 | ) | ||||||||
Adj: investment securities (gains) losses, net | (137 | ) | (61 | ) | |||||||
Plus: acquisition & nonrecurring litigation expenses | 5,795 | 8,017 | |||||||||
Core pre-tax, pre-provision net income | $ | 142,937 | $ | 130,949 | |||||||
Total non-interest income | $ | 120,929 | $ | 111,401 | |||||||
Adj: investment securities (gains) losses, net | (137 | ) | (61 | ) | |||||||
Total core non-interest income | 120,792 | 111,340 | |||||||||
Net interest income | 264,363 | 248,461 | |||||||||
Total core revenue | (C) | $ | 385,155 | $ | 359,801 | ||||||
Total non-interest expense | $ | 248,013 | $ | 236,869 | |||||||
Less: acquisition & nonrecurring litigation expenses | (5,795 | ) | $ | (8,017 | ) | ||||||
Core non-interest expense | (D) | $ | 242,218 | $ | 228,852 | ||||||
Total average stockholders' equity | (E) | 926,050 | $ | 855,862 | |||||||
Less: average goodwill and other intangible assets (excluding mortgage servicing rights) | (216,494 | ) | $ | (200,740 | ) | ||||||
Average tangible common stockholders' equity | (F) | $ | 709,556 | $ | 655,122 | ||||||
Total average assets | (G) | $ | 8,521,706 | $ | 7,948,798 | ||||||
Weighted-average common shares - diluted | (H) | 45,646,418 | 45,210,561 | ||||||||
Core earnings per share, diluted | (B/H) | $ | 1.98 | $ | 1.98 | ||||||
Core return on average assets | (B/G) | 1.06 | % | 1.12 | % | ||||||
Core return on average common equity | (B/E) | 9.75 | 10.44 | ||||||||
Return on average tangible common equity | (A/F) | 12.23 | 12.88 | ||||||||
Core non-interest expense | (D) | $ | 242,218 | $ | 228,852 | ||||||
Less: amortization of core deposit intangible | (3,388 | ) | (2,251 | ) | |||||||
Adj: OREO (expense) income | 1,475 | 272 | |||||||||
Non-interest expense for core efficiency ratio | (I) | $ | 240,305 | $ | 226,873 | ||||||
Total core revenue | (C) | $ | 385,155 | $ | 359,923 | ||||||
Add: FTE adjustments | 4,308 | 4,032 | |||||||||
Total core revenue for core efficiency ratio | (J) | $ | 389,463 | $ | 363,955 | ||||||
Core efficiency ratio | (I/J) | 61.70 | % | 62.34 | % |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160127006347/en/
Contacts:
Chief Financial Officer
Marcy
Mutch, 406-255-5322
investor.relations@fib.com