First Interstate BancSystem Reports Strong Q2 2025 Earnings

First Interstate Bancsystem ( (FIBK) ) has released its Q2 earnings. Here is a breakdown of the information First Interstate Bancsystem presented to its investors.

First Interstate BancSystem, Inc. is a financial and bank holding company headquartered in Billings, Montana, focusing on community banking across several states and offering a wide range of banking products and services. In its second quarter earnings report for 2025, the company announced a net income of $71.7 million, or $0.69 per diluted share, marking a significant increase from the previous quarter and the same quarter last year. The company’s net interest margin improved to 3.30%, and it reported a reduction in non-performing assets, although criticized loans saw an increase primarily due to downgrades in the commercial real estate portfolio.

Key financial highlights include a decrease in other borrowed funds by 74% to $250 million and a reduction in net charge-offs by 35.6% to $5.8 million. The company’s capital ratios improved, with the common equity tier 1 capital ratio rising to 13.43%. Additionally, First Interstate BancSystem completed the outsourcing of its consumer credit card portfolio, resulting in a $4.3 million gain. Despite a decrease in total deposits, the company maintained strong liquidity and capital levels, positioning itself for future growth.

The company also declared a dividend of $0.47 per common share, reflecting a 7.0% annualized yield. Non-interest income decreased slightly due to a valuation allowance for loans related to the pending sale of branches, while non-interest expenses fell by 3.4% compared to the previous quarter, driven by reductions in salaries and employee benefits.

Looking ahead, First Interstate BancSystem remains focused on managing expenses prudently and pursuing organic growth. The company’s strong liquidity and capital foundation are expected to support its strategy of improving profitability through relationship banking, despite challenges in the commercial real estate sector.