First Interstate BancSystem, Inc.

Good morning, everyone, and welcome to the first Interstate Bank System third quarter earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Also, today's call is being recorded, and if anyone should need any operator assistance during the call today, please press star 0. Now at this time, I'll turn things over to Nancy Vermeulen, Financial Communications and Analyst Manager. Nancy, please go ahead.

Thanks very much. Good morning. Thank you for joining us for our third 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 our Form 10-K filed with the SEC, and in our earnings release, as well as the risk factors identified in the annual report and in our more recent periodic reports filed with the SEC. Relevant factors that could cause actual results to differ materially from forward-looking statements are included in the earnings release and in our SEC filings. 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 your reference. Joining us for management this morning is 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 Riley. Kevin?

Thanks, Nancy. 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, which we believe would be helpful. The presentation can be accessed on our investor relations website. And if you haven't downloaded a copy yet, I would encourage you to do so. I'm going to start today by providing an overview of the major highlights of the quarter, and then I'll turn the call to Marci to provide more detail on our financials. Now let's get to our results. We recorded $55.5 million in net income in the third quarter, or $0.54 per share. Our net interest margin? excluding purchase accounting accretion, increased by five basis points of 2.97%. We believe our net interest margin, X purchase accounting, will exceed 3% in the fourth quarter, as it did in the month of September. Non-interest expenses in the third quarter came in better than we expected, and they included one-time costs related to my transition. As we have announced, Jim Reuter, The former CEO of First Bank will step into the CEO role in a week on November 1st. I will say a bit more about Jim in my close remarks. In the third quarter, we saw modest growth in our fee business, which was enhanced by the sale of one of our branches, but excluding this sale, non-interest income increased by approximately 3%. As for our credit quality, our criticized and classified loans both declined in the period. However, we did see some charge-off noise in the third quarter that was specifically related to our Metro office portfolio. We have a large property that transitioned to non-accrual, for which we took a significant charge-off to what we estimate as a realizable value. As we've said in the past, we believe we are addressing the challenges in our Metro office portfolio proactively, and any significant challenges in that portfolio are now behind us. We have also included an additional slide in our investor presentation that provides further information on our Metro office exposure. Finally, we are pleased with our deposits in the third quarter, as they ended essentially flat, despite the change related to a large temporary deposit that was on the balance sheet at the end of last quarter. If we strip that effect out, our deposits increased approximately 1% during the quarter. As we look to 2025, the margin expansion that we expect to continue, coupled with our expense discipline, should lead to improved profitability. We believe the company is in the midst of an earnings inflection, which we have discussed previously, and we look forward to improving results going forward. And with that, I'll turn the call over to Marcin.