First Interstate BancSystem Reports 12.2% Decrease in Net Income for 2024

First Interstate BancSystem, Inc. (FIBK) reported a net income of $226.0 million for the year ended December 31, 2024, a 12.2% decrease compared to $257.5 million in 2023. This decline was primarily attributed to a higher provision for credit losses ($67.8 million in 2024 versus $32.2 million in 2023) and lower net interest income due to increased funding costs. The decrease in net interest income was partially offset by higher non-interest income, resulting from a lack of losses on the sale of securities in 2024 compared to 2023. Lower noninterest expense, mainly due to reduced FDIC insurance expense and other operating expenses, also contributed to the overall results.

Net interest income decreased by $57.2 million in 2024 compared to 2023, primarily due to higher interest expense on deposits, despite increased interest income on loans from higher yields. The net interest margin decreased to 3.02% in 2024 from 3.12% in 2023, while the fully taxable equivalent (FTE) net interest margin decreased to 3.04% from 3.14%. The company's total assets decreased by $1,533.8 million (5.0%) to $29.1 billion, primarily due to decreases in loans held for investment and investment securities, partially offset by an increase in cash and cash equivalents.

Significant developments during the year included the announcement in January 2025 to cease originating indirect loans by February 28, 2025, due to operating performance and a shift in focus towards relationship banking. The company also recognized a $49.3 million partial charge-off related to a single commercial and industrial loan in the fourth quarter of 2024. As of December 31, 2024, the company employed 3,481 employees, a decrease of 104 from the previous year. The company also highlighted its commitment to community involvement, including a new Volunteer Time benefit for employees. 77% of the workforce engaged with the "Better Together" inclusion and equity training program launched in the third quarter of 2024.

The company's financial condition as of December 31, 2024, showed consolidated assets of $29.1 billion, deposits of $23.0 billion, loans held for investment of $17.8 billion, and total stockholders' equity of $3.3 billion. The company's capital ratios exceeded all regulatory requirements to be deemed "well-capitalized." Liquidity remained ample, with diversified deposits and available borrowing capacity of $4.4 billion with the Federal Home Loan Bank and $1.9 billion with the Federal Reserve Bank. The company's outlook includes a decline in merger and acquisition activity, with a focus on organic growth. The company also noted ongoing analysis of its policies to ensure compliance with new executive orders focused on diversity, equity, and inclusion.