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First Interstate BancSystem Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 3, 2010 11:15AM
First Interstate BancSystem Inc. (FIBK) filed Quarterly Report for the period ended 2010-03-31. First Interstate Bancsystem Inc. has a market cap of $162 million; its shares were traded at around $16.2 . The dividend yield of First Interstate Bancsystem Inc. stocks is 0.69%.
Highlight of Business Operations:
We are a financial and bank holding company headquartered in Billings, Montana. As of March 31, 2010, we had consolidated assets of $7,216 million, deposits of $5,788 million, loans of $4,481 million and total stockholders equity of $733 million. We currently operate 72 banking offices in 42 communities located in Montana, Wyoming and western South Dakota. Through our bank subsidiary, First Interstate Bank, or the Bank, we deliver a comprehensive range of banking products and services to individuals, businesses, municipalities and other entities throughout our market areas. Our customers participate in a wide variety of industries, including energy, healthcare and professional services, education and governmental services, construction, mining, agriculture, retail and wholesale trade and tourism.
Difficult economic conditions continue to have a negative impact on businesses and consumers in our market areas. General declines in the real estate and housing markets resulted in continued deterioration in the credit quality of our loan portfolio, which is reflected by increases in non-performing and internally risk classified loans. Our non-performing assets increased to $177 million, or 3.91% of total loans and OREO, as of March 31, 2010, from $163 million, or 3.57% of total loans and OREO, as of December 31, 2009. Loan charge-offs, net of recoveries, totaled $9 million during the three months ended March 31, 2010, as compared to $5 million during the same period in 2009, with all major loan categories reflecting increases. Based on our assessment of the adequacy of our allowance for loan losses, we recorded provisions for loan losses of $11.9 million during the three months ended March, 31, 2010, compared to $9.6 million during the same period in 2009. Increased provisions for loan losses reflect our estimation of the effect of current economic conditions on our loan portfolio. In the first three months of 2010, we have continued to experience elevated levels of non-performing assets and provisions for loan losses which will continue to affect our earnings. Given the current economic conditions and trends, management believes we will continue to experience higher levels of non-performing loans in the near-term, which will likely have an adverse impact on our business, financial condition, results of operations and prospects.
Net Interest Income. Net interest income, on a fully taxable equivalent, or FTE, basis, increased $2.5 million, or 4.1%, to $62.8 million for the three months ended March 31, 2010, as compared to $60.3 million for the same period in 2009. Our net FTE interest margin decreased 12 basis points to 4.00% for the three months ended March 31, 2010, from 4.12% during the same period in the prior year. Compression in our net FTE interest margin ratio during first quarter 2010, as compared first quarter 2009, is largely due to a shift in the mix of interest earning assets from higher-yielding loans to lower-yielding assets, primarily investment securities. In addition, interest free and low-cost funding sources, such as demand deposits, repurchase agreements and other short-term borrowings comprised a smaller percentage of our funding base, which further compressed the net FTE interest margin.
Stocks Discussed: FIBK,