First Interstate BancSystem Reports $50.2 Million Net Income in Q1 2025

First Interstate BancSystem, Inc. reported a net income of $50.2 million, or $0.49 per diluted share, for the first quarter of 2025, a decrease from $58.4 million, or $0.57 per diluted share, in the same period of 2024. This decline is primarily attributed to a significant increase in the provision for credit losses, which rose to $20.0 million from $5.3 million year-over-year. However, net interest income increased to $205.0 million from $200.1 million, driven by a reduction in interest expenses on interest-bearing liabilities.

Total assets for the company decreased by $857.6 million, or 2.9%, to $28.3 billion as of March 31, 2025, compared to $29.1 billion at the end of 2024. This decline was mainly due to reductions in investment securities and loans. Investment securities fell to $7.5 billion, a decrease of 3.1%, while loans held for investment decreased to $17.4 billion, down 2.6%. The company’s allowance for credit losses increased to $215.3 million, representing 1.24% of loans held for investment, up from 1.14% at the end of the previous year.

In terms of strategic developments, First Interstate BancSystem announced plans to discontinue its indirect lending program, which had represented approximately 3.9% of total loan balances as of March 31, 2025. Additionally, the company entered into a Purchase and Assumption Agreement with Enterprise Bank & Trust to sell twelve branches located in Arizona and Kansas, which includes approximately $740 million in deposits and $200 million in loans. This transaction is expected to close in the fourth quarter of 2025, pending regulatory approvals.

Operationally, the company reported a decrease in total deposits, which fell by $282.8 million, or 1.2%, to $22.7 billion. The decline was observed across all deposit types except for interest-bearing savings accounts. The company’s non-accrual loans increased by 38.8% to $191.9 million, primarily due to a rise in non-accrual commercial real estate and agricultural loans. The company maintains a diversified deposit base and has ample liquidity, with available borrowing capacity of approximately $4.2 billion with the Federal Home Loan Bank and $2.6 billion with the Federal Reserve Bank.

Looking ahead, First Interstate BancSystem anticipates continued economic volatility, which may impact deposit levels and credit quality. The company is focused on managing its liquidity and capital resources effectively, ensuring compliance with regulatory capital requirements, and adapting to changing market conditions. The board of directors declared a quarterly dividend of $0.47 per share, payable on May 22, 2025, reflecting the company's commitment to returning value to shareholders despite the current economic challenges.