Regional banking company First Interstate BancSystem (NASDAQ:FIBK) missed Wall Street’s revenue expectations in Q2 CY2025 as sales only rose 1.6% year on year to $248.3 million. Its non-GAAP profit of $0.69 per share was 19.9% above analysts’ consensus estimates.
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First Interstate BancSystem (FIBK) Q2 CY2025 Highlights:
- Net Interest Income: $207.2 million vs analyst estimates of $210.2 million (2.7% year-on-year growth, 1.4% miss)
- Net Interest Margin: 3.3% vs analyst estimates of 3.3% (30 basis point year-on-year increase, 2.5 bps miss)
- Revenue: $248.3 million vs analyst estimates of $252.7 million (1.6% year-on-year growth, 1.8% miss)
- Efficiency Ratio: 61.1% vs analyst estimates of 63.5% (2.4 percentage point beat)
- Adjusted EPS: $0.69 vs analyst estimates of $0.58 (19.9% beat)
- Market Capitalization: $3.11 billion
“Our net interest margin continued to improve as expected, and we are prudently managing expenses while focusing our efforts on organic growth. Our liquidity and capital levels are strong, providing us a solid foundation to grow and improve profitability through relationship banking. This quarter, our results reflect a series of actions that position the bank for future success, including the outsourcing of our consumer credit card product,” said James A. Reuter, President and Chief Executive Officer of First Interstate BancSystem,
Company Overview
Tracing its roots back to 1971 and still guided by founding family principles, First Interstate BancSystem (NASDAQ:FIBK) operates a network of community banks across 14 western and midwestern states, offering comprehensive banking services to individuals, businesses, and government entities.
Sales Growth
Net interest income and and fee-based revenue are the two pillars supporting bank earnings. The former captures profit from the gap between lending rates and deposit costs, while the latter encompasses charges for banking services, credit products, wealth management, and trading activities.
Thankfully, First Interstate BancSystem’s 9.2% annualized revenue growth over the last five years was impressive. Its growth beat the average bank company and shows its offerings resonate with customers.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. First Interstate BancSystem’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 4.6% over the last two years. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, First Interstate BancSystem’s revenue grew by 1.6% year on year to $248.3 million, falling short of Wall Street’s estimates.
Net interest income made up 81.8% of the company’s total revenue during the last five years, meaning First Interstate BancSystem barely relies on non-interest income to drive its overall growth.
Net interest income commands greater market attention due to its reliability and consistency, whereas non-interest income is often seen as lower-quality revenue that lacks the same dependable characteristics.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
Because of this, tangible book value per share (TBVPS) emerges as the critical performance benchmark. By excluding intangible assets with uncertain liquidation values, this metric captures real, liquid net worth per share. Traditional metrics like EPS are helpful but face distortion from M&A activity and loan loss accounting rules.
First Interstate BancSystem’s TBVPS was flat over the last five years. However, TBVPS growth has accelerated recently, growing by 7.6% annually over the last two years from $18.39 to $21.29 per share.
Over the next 12 months, Consensus estimates call for First Interstate BancSystem’s TBVPS to grow by 4% to $22.14, paltry growth rate.
Key Takeaways from First Interstate BancSystem’s Q2 Results
We enjoyed seeing First Interstate BancSystem beat analysts’ EPS expectations this quarter. We were also happy its tangible book value per share outperformed Wall Street’s estimates. On the other hand, its revenue missed and its net interest income fell slightly short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $29.38 immediately following the results.
Should you buy the stock or not? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.