First Interstate BancSystem, Inc.

Good morning and thank you for attending today's first Interstate Bank System first quarter earnings call. My name is Jason and I'll be the moderator for your call today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to Lisa Slater-Bray.

Thanks, Jason. Good morning. Thank you for joining us for our first 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 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 filings. The company does not undertake to update any of 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 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 your reference. Joining us for management this morning are Kevin Riley, our Chief Executive Officer, and Marcie Much, our Chief Financial Officer, along with other members of our management team. At this time, I'll turn the call over to Kevin Riley. Kevin?

Thanks, Lisa. And just so everybody knows, I'm traveling, so it might sound a little different because I'm in a different location than my team. So let me start off. 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, especially to understand some of the purchase accounting and transaction costs impacting the quarter. The presentation can be accessed on our investor relations website. And if you have not downloaded a copy yet, I would encourage you to do so. I'm going to start off by providing an overview of the major highlights of the quarter and the progress we are making on the integration. And then I'll turn the call over to Marcie. to provide some more detail on our financials. In short, we feel really good where we stand just three months into this merger. Results of the quarter were strong. Our adjusted net interest margin saw meaningful expansion. Underlying trends in both loans and deposits are favorable. We made meaningful progress toward resolving acquired problem credits. Our balance sheet remains highly flexible, allowing us to take advantage of recent rate increases. The acquisition was accreted to our gambling book value, offsetting a significant portion of the OCI impact for the quarter. Our capital levels are strong, and we are well prepared for assistant integration in May. And the cultural integration of these two organizations is going extremely well. For the quarter, our loan production and deposit inflows were favorable relative to what is traditionally a seasonally slow period. As we complete our integration, we expect to capitalize on some of the most vibrant, fastest growing markets in the country. You may have seen the article published by CDN Business last week talking about which states have returned to pre-pandemic employment levels. An economist from Moody's Analytics was quoted as saying that Mountain West is clearly leaps and bounds above the rest of the country. In particular, Idaho and Montana were cited as two of the fastest growing states in terms of employment growth in the month of March. We are seeing these trends in our markets, largely driven by strong in-migration and population growth. Post-pandemic, This has translated into robust economic activity and job creation, allowing businesses to capitalize on increased demand to serve these growing communities. This has translated into increasing levels of activity coming through our credit approval process, which should lead to higher levels of book production going forward. Our Montana and Idaho markets were particularly strong this quarter in Wyoming, has stabilized and is no longer the headwind to loan growth that it was last year. Additionally, as we have quickly resolved many of the credit challenges related to the transaction, we have good momentum to grow in our expanded footprint. Within the legacy first interstate loan portfolio, as a result of an increase in utilization rate on commercial lines of credit, and the strong production levels. We grew our total loans held for investment by approximately 2% annualized in the first quarter, excluding PPP loans. Importantly, we experienced over 5% annualized growth from our branch network, which was partially offset by the decline in our home mortgages and indirect lending portfolios. This is a positive outcome As a seasonality, we typically see the beginning of the year offer results in flat or slightly declining loan balances during the first quarter. Compared to the fourth quarter, we are beginning to see some sanity return to loan pricing as interest rates have increased, along with marginally less competitive environment. This quarter, the average rate on new loan production in our legacy footprint is now over 4%. Moving to Great Western, excluding PPP loans, production levels remain strong in the quarter. Since the close of the acquisition, we've been able to make formal announcements affirming continued, consistent leadership in those markets, which has minimized the uncertainty created in any acquisition. The teams, many of which I have personally visited, are excited about the future, and I'm impressed with this talented group of bankers. With the motivation we are seeing from this team, combined with the substantial progress that we have made to work down levels of problem loans, we are optimistic that we will see growth in these new markets faster than we anticipated. In terms of problem loan resolution, if you recall the time of the transaction announcements, we identified $1.2 billion in PCD loans. When we closed the acquisition, that number was down to $722 million. And we've made more progress on working down problem loans since the closing. Criticized loans from Great Western were down to $655 million at quarter end. And to accelerate the workout process, we transferred $241 million of credits to loans held for sale at the close of the transaction. And we expect these loans will be substantially off our books by the end of the second quarter. Considering these factors, many of the headwinds to total loan growth that we initially anticipated in the first two years of the combined operation from the disposition of problem loans have been substantially reduced. We now expect Great Western's footprint to be a contributor to the growth of the combined company this year. While we are very excited about the acquisition We haven't lost focus on expanding the digital lending capabilities that we introduced over the last couple of years. We continue to refine digital business banking loan origination platform that we launched late last year, offering lines of credit up to $100,000. We are currently focused on increasing the automation on score products up to $250,000 and are prepared to launch this later this year. The digital capabilities and the access to small business lending centers will be rolled out into the new footprint at system conversion. Before I turn the call over to Marcy to provide additional details around our first quarter results, I'd like to say that I have never experienced an acquisition where there's been so much enthusiasm and excitement for our new colleagues. This has been a rewarding experience, and I am excited about the possibilities going forward. And with that, I'll turn the call over to Marcia.