First Interstate BancSystem Reports 28.7% Increase in Q3 Net Income to $71.4 Million

First Interstate BancSystem, Inc. reported a net income of $71.4 million, or $0.69 per diluted share, for the third quarter of 2025, marking a 28.7% increase from $55.5 million, or $0.54 per diluted share, in the same period last year. For the nine months ending September 30, 2025, net income rose to $193.3 million, or $1.87 per diluted share, compared to $173.9 million, or $1.69 per diluted share, in the prior year. The increase in profitability was primarily driven by a $19.8 million reduction in the provision for credit losses and higher net interest income, despite a rise in income tax expenses.

Total assets decreased by $1.8 billion, or 6.2%, to $27.3 billion as of September 30, 2025, down from $29.1 billion at the end of 2024. This decline was largely attributed to reductions in investment securities and loans. Investment securities fell to $7.3 billion from $7.7 billion, while loans held for investment decreased to $15.8 billion from $17.8 billion. The company also reported a decrease in total deposits, which fell to $22.6 billion from $23.0 billion, reflecting a strategic shift in its lending approach, including the discontinuation of indirect loans.

In terms of operational developments, First Interstate completed the sale of its Arizona and Kansas branches to Enterprise Bank & Trust on October 10, 2025, which included approximately $645 million in deposits and $305 million in loans. The company anticipates recognizing a pre-tax gain of approximately $60 million from this transaction. Additionally, the company has initiated a stock repurchase program, authorizing the repurchase of up to $150 million of its common stock, with $122.5 million remaining available for future purchases as of September 30, 2025.

The company’s allowance for credit losses stood at $205.8 million, or 1.30% of loans held for investment, as of September 30, 2025, compared to $204.1 million, or 1.14%, at the end of 2024. The increase in the allowance reflects changes in the loan portfolio's composition and the economic outlook. Non-performing loans increased to $182.2 million, or 1.15% of loans held for investment, from $141.3 million, or 0.78%, at the end of 2024, primarily due to a rise in non-accrual loans.

Looking ahead, First Interstate anticipates continued economic volatility, which may impact deposit levels and credit quality. The company remains focused on maintaining its capital ratios above regulatory requirements, with total stockholders' equity increasing to $3.4 billion as of September 30, 2025, up from $3.3 billion at the end of 2024. The company’s management is committed to navigating the challenges posed by changing economic conditions while pursuing strategic growth opportunities.