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

First Interstate BancSystem reported a third-quarter net income of $62.2 million during its October 23, 2026 earnings call. The bank's earnings power is expected to grow due to maturing loans and securities resetting at higher market interest rates, which expands net interest margin without the need for rapid balance sheet growth. Executive Vice President and Chief Financial Officer David P. Della Camera noted that this marks the 10th consecutive quarter of net interest margin expansion.

To improve profitability, the bank strategically shed underperforming customer deposits, which lowered funding costs and stabilized relationships. The exit of a high-cost, collateralized customer also contributed to this positive effect. Excluding this balance, deposits increased during the quarter.

First Interstate BancSystem is leveraging its excess capital to repurchase shares, increasing each remaining shareholder's stake in future earnings. In the third quarter alone, the bank repurchased approximately 2 million shares, bringing total repurchases to around 10 million since the program began in late August 2025.

The bank's guidance for net interest income (NII) anticipates continued expansion into the fourth quarter, driven by meaningful repricing, stabilized earning assets, and strong non-interest-bearing balance performance. Low-cost deposit foundations and regional branch coverage provide the business with long-term funding stability.

Management is monitoring commercial loan payoff rates and credit discipline as banker capacity expands. The company believes that the growth in non-interest-bearing deposits observed in the third quarter indicates that relationship banking efforts are resonating with clients.

With its scalable go-to-market strategy and expanded banker capacity, First Interstate BancSystem is well-positioned to execute its strategy across various interest rate environments.