First Interstate Q2 net income rises

Overview

• First Interstate Q2 net income rises to $71.7 mln from $60.0 mln last year

• Net interest margin improves to 3.30%, driven by lower interest expenses

• Outsourcing of credit card portfolio results in $4.3 mln gain

Outlook

• Company focuses on organic growth and managing expenses prudently

• First Interstate highlights strong liquidity and capital levels for future growth

• Company does not provide specific forward-looking financial guidance in its press release

Result Drivers

• NET INTEREST MARGIN - Increase driven by lower interest expenses and decreased borrowings

• CREDIT CARD OUTSOURCING -Completed the outsourcing of our consumer credit card portfolio resulting in the sale of $74.2 million of consumer credit card loans and recognition of a $4.3 million gain

• CRITICIZED LOANS - Increase primarily due to downgrades in commercial real estate portfolio

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy."

• Wall Street's median 12-month price target for First Interstate Bancsystem Inc is $32.00, about 7.3% above its July 28 closing price of $29.65

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nBw49kNVma