First Interstate BancSystem Reports $60.2 Million Net Income for Q1 2026

First Interstate BancSystem, Inc. reported a net income of $60.2 million for the first quarter of 2026, reflecting an increase of $10 million compared to $50.2 million in the same period of 2025. This translates to earnings per diluted share of $0.61, up from $0.49 a year earlier. The growth in net income was primarily driven by a significant reduction in the provision for credit losses, which fell to $6.7 million from $20 million in the prior year. However, net interest income decreased to $200.7 million from $205 million, attributed to lower interest and fee income on loans due to a decline in average loan balances.

The company's total assets decreased by $213.8 million, or 0.8%, to $26.4 billion as of March 31, 2026, compared to $26.6 billion at the end of 2025. This decline was mainly due to a reduction in loans and cash equivalents, partially offset by an increase in investment securities, which rose to $8 billion from $7.6 billion. Loans held for investment also saw a decrease of $473.2 million, totaling $14.7 billion, primarily due to payoffs in the agricultural sector and the continued amortization of the indirect loan portfolio, which the company ceased originating in early 2025.

In terms of operational developments, First Interstate BancSystem has been actively restructuring its branch network. The company recently sold eleven Nebraska branches to Security First Bank, which included approximately $244.2 million in deposits and $64.1 million in loans. Additionally, the company closed four branches in Nebraska and exited North Dakota and Minnesota, while opening a new branch in Montana. These strategic moves are aimed at enhancing operational efficiency and aligning the organization for future growth.

The company’s total deposits decreased by $205.3 million, or 0.9%, to $21.9 billion, with declines across all deposit types except for interest-bearing savings accounts. As of March 31, 2026, the allowance for credit losses increased to $195.8 million, representing 1.33% of loans held for investment, up from 1.26% at the end of 2025. Non-performing loans also rose to $155.9 million, primarily due to a single client relationship in the commercial sector.

Looking ahead, First Interstate BancSystem anticipates continued volatility in economic markets, which may impact its financial performance. The company is focused on maintaining its capital adequacy, with capital ratios exceeding regulatory requirements. As of March 31, 2026, the company had a total risk-based capital ratio of 17.07%, well above the minimum required levels. The management remains committed to its strategy of disciplined, relationship-driven growth while navigating the challenges posed by changing economic conditions.