First Interstate BancSystem: 3 Key Takeaways for Long-Term Investors

On its third quarter of 2026 earnings call, held on Oct. 23, 2026, First Interstate BancSystem (NASDAQ:FIBK) announced third-quarter net income of $62.2 million. Maturing loans and securities are resetting at higher market interest rates, expanding earnings power without requiring rapid balance sheet growth. Three key takeaways from management explain the financial institution's strategy.

1. Asset Yields Boost Profit Spreads Across 10 Consecutive Quarters

Loans and investment securities purchased in previous years are gradually resetting to higher market rates. This fixed asset repricing expands net interest margin -- the difference between interest earned on assets and paid on deposits -- without relying on volume expansion.

As Jim mentioned, this marks our 10th consecutive quarter of net interest margin expansion, and fixed asset repricing should remain a tailwind to earning asset yields and underlying margin improvement into 2027.
-- David P. Della Camera, Executive Vice President and Chief Financial Officer

2. Pruning High-Cost Deposits Protects Profit Margins

Management deliberately shed expensive customer deposits that failed to meet internal profitability targets. Removing these single-client balances lowers funding costs and stabilizes broader customer relationships.

Deposit costs benefited from the exit of a large, high-cost, fully collateralized customer where our long-term return objectives were not being met. Excluding this balance, deposits increased during the quarter.
-- David P. Della Camera, Executive Vice President and Chief Financial Officer

3. Share Buybacks Accelerate Per-Share Value

The bank is using excess capital to buy back its own shares while commercial lending demand normalizes. Retiring 10 million shares over the past year increases each remaining shareholder's stake in future earnings.

In the third quarter, we also continued to optimize our capital structure through prudent execution of our share repurchase program. We repurchased approximately 2 million shares during the quarter, bringing total repurchases to approximately 10 million shares since the program began in late August 2025.
-- James A. Reuter, President and Chief Executive Officer

Looking Ahead

Net interest income (NII), the total interest revenue minus interest expenses, is expanding as earning assets stabilize.

Our net interest income guidance at the midpoint assumes expansion in NII into the fourth quarter as we continue to benefit from meaningful repricing, a stabilization of earning assets, and relatively strong non-interest-bearing balance performance.
-- David P. Della Camera, Executive Vice President and Chief Financial Officer

A low-cost deposit foundation and regional branch coverage give the business long-term funding stability. Management is watching commercial loan payoff rates and credit discipline as banker capacity expands.

We believe that the continued growth in non-interest-bearing deposits that we saw in the third quarter provides encouraging evidence that our relationship banking efforts are resonating with clients. Our go-to-market strategy has increased scalability, improved market alignment, and expanded banker capacity to fulfill our primary objectives of enhancing our best-in-class deposit franchise. We are well-positioned to execute on our strategy across a range of interest rate environments.
-- James A. Reuter, President and Chief Executive Officer

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