First Interstate in Mont. Sees Loans Rise, Provision Fall

First Interstate BancSystem (FIBK) in Billings, Mont., turned credit-quality improvements into a big increase in earnings last quarter.

It reported net income of $20.8 million for the fourth quarter of 2013, a 29% increase from the fourth quarter of 2012. With earnings per share of 47 cents, the $7.6 billion-asset company beat estimates of analysts polled by Bloomberg by a half a cent.

First Interstate reversed $4 million of provision for loan losses compared with an addition of $8 million to its provision in the fourth quarter of 2012. The reversal is due to declining levels of nonperforming and criticized loans. Net chargeoffs fell from $6.5 million to $3.7 million.

Loans increased 3%, to $4.3 billion, year over year. Net interest income was $60 million, a slight decrease from $61 million in the fourth quarter of 2012. Net interest margin fell three basis points to 3.52%.

Noninterest income decreased by 16%, to $25.7 million, during the fourth quarter; one of the main reasons was a 54.5% decline in income from the origination and sale of mortgage loans.

Noninterest expense remained flat from the fourth quarter of 2012 at $57.8 million.