First Interstate BancSystem, Inc.

Good day and welcome to the first Interstate BancSystem second quarter earnings conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Garden 1 on your touch-down phone. To withdraw your question, please press Garden 2. Please note, today's event is being recorded. I'd now like to hand the conference over to Lisa Slater-Bray. Please go ahead, ma'am.

Thanks, Rocco. Good morning. Thank you for joining us for our second quarter earnings conference call. As we begin, please note that the information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those expressed by those statements. I'd like to direct all listeners to read the cautionary note regarding forward-looking statements and factors that could affect future results contained in our most recent annual report on Form 10-K filed with the SEC and in our earnings release as well as the risk factors identified in the annual report and our more recent periodic reports filed with the SEC. Relevant factors that could cause actual results to differ materially from any forward-looking statements are included in the earnings release and in our SEC filing. The company does not undertake to update any of the forward-looking statements made today A copy of our earnings release, which contains non-GAAP financial measures, is available on our website at fibk.com. Information regarding our use of the non-GAAP financial measures may be found in the body of the earnings release, and a reconciliation to their most directly comparable GAAP financial measures is included at the end of the earnings release for reference. Joining us for management this morning are Kevin Riley, our Chief Executive Officer, and Marcy Mutch, our Chief Financial Officer, along with other members of our management team. At this time, I'll turn the call over to Kevin Reilly. Kevin?

Thanks, Lisa. Good morning, and thanks again to all of you for joining us on our call today. Again this quarter, along with our earnings release, we have published an updated investor presentation that has some additional disclosures that we believe will be helpful. The presentation can be accessed on our investor relations website, and if you have not downloaded it, a copy yet, I encourage you to do so. I'm going to start today by providing an overview of the major highlights for the quarter, and then I'll turn the call over to Marcy so she can provide more details on our financials. During the second quarter, we generated net income of $42.5 million, or $0.69 per diluted shares, while delivering on everything we discussed last quarter. Including PPP loans, we generated upper single digits, annualized loan growth, higher levels of Net interest income and fee income on a run rate basis, well-controlled expenses, and excellent credit metrics. We saw an acceleration of positive trends we experienced earlier in the year, driven by healthy economic activity throughout our markets. This resulted in yet another quarter of strong deposit inflows, which grew by 12.4% annualized in the quarter. Non-interest Barron Deposits, along with 413 million, or 33% on an annualized basis. We continue to utilize these strong deposit inflows to grow earning assets, both in loans and investment securities, which produce an expected increase in our net interest income, excluding the impact of PPP fees. Across our footprint, we have been able to effectively capitalize on higher loan demand We are now seeing and grew our total loan balances, excluding PPP, at an annualized rate of approximately 9%, which is consistent with the outlook we provided last quarter. Notably, we are seeing balanced contributions to growth across almost all of our portfolios and markets as our clients continue to look for attractive opportunities to invest into this robust economic environment in the states we serve. Our western markets continue to produce our strongest growth rates, but we are now seeing real improvement in our eastern markets as well. Encouragingly, we saw our commercial portfolio, excluding PPP loans, increase at an annualized rate of approximately 3%, which is the first quarter of substantial growth we have experienced in this portfolio since the pandemic started. This growth came despite line utilization remaining relatively unchanged. and still well below historic norms. Heading into the second half of the year, we are in continued focus around speed to market, more efficient underwriting, and we are expecting the recent growth trends to continue, allowing us to come in at or above mid-single-digit range we originally expected for the year. Our continued deposit growth should enable us to put more liquidity to work in our investment portfolio than we initially expected. The details of which Marcy will discuss later. We will do this, however, at a much shorter duration to retain our asset sensitivity position. The health of our markets is also evident in the continued across-the-board improvement in our asset quality. Non-performing assets, non-performing loans, delinquent loans, and criticized loans were all down. Net charge loss annualized at a percentage of average loans was Only four basis points. Nonetheless, we continue to take a cautious approach and retain a healthy reserve, which remains at 1.3% of loans, health or investment, and is at 1.46% excluding PPP loans. As I usually do, I would like to add some additional color about our footprint. The local optimism I noted last quarter continues to be evident across our footprint. Tourism is having a record season, as we expect it to see. The parks and the surrounding hotels are full, and the businesses are seeing activity also follow. In April, I noted the positive in-migration trends across our states, which was confirmed in the last census. However, just last week in the Wall Street Journal, who listed Billings, Montana, yes, Billings, Montana, the new number one market on the Emerging Housing Market Index, which rates the markets by low unemployment, affordability, and Attractiveness to the Outdoor Lifestyle. This continues to attract new residents from all over the country. In fact, we serve three of the top five markets on the list. Billings, Montana number one, Coeur d'Alene, Idaho number two, and Rapid City, South Dakota number four. In short, the bullishness I expressed in April about our markets and the future of the company has been solidified over the last three months. and the momentum of our business sets us up for a strong second half of the year. We are expecting solid loan growth, solid operating pre-provisioned net revenue improvement, and strong credit results to drive further improvements in our profitability metrics. And with that, I'll turn the call over to Marcie so she can provide more details on the quarter. Go ahead, Marcie.