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Investing.com - First Interstate Bancsystems (NASDAQ:FIBK) received a reiterated Outperform rating and $32.00 price target from Keefe, Bruyette & Woods (KBW).
The rating follows First Interstate’s announcement of a new $150 million share buyback authorization, which represents approximately 4.5% of the company’s shares at current prices. The bank has maintained dividend payments for 16 consecutive years, currently offering an attractive 5.87% yield.
KBW noted that First Interstate’s capital ratios are solid at 13.4% CET1 and continue to build, with a pending branch sale expected to add approximately 40 basis points upon closing.
The research firm highlighted that First Interstate’s capital has increased significantly over the past year, with CET1 up nearly 200 basis points year-over-year to 13.4%, accelerated recently by balance sheet shrinkage.
KBW believes the buyback authorization provides First Interstate with greater optionality to return capital to shareholders, particularly if growth remains constrained, which could be additive to estimates.
In other recent news, First Interstate BancSystem reported its second-quarter 2025 financial results, surpassing earnings expectations with an earnings per share (EPS) of $0.69, compared to the forecasted $0.58. Despite the earnings beat, the company’s revenue fell short of projections, totaling $248.3 million against an expected $253.14 million. Additionally, the board of directors authorized a $150 million stock repurchase program, allowing the company to buy back its common stock through March 31, 2027. This initiative provides flexibility in managing its capital structure. The company also announced the redemption of its 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030, completing the redemption at 100% of the principal amount plus accrued interest. Furthermore, First Interstate BancSystem appointed Michael L. Scudder as a Class I director on its board, filling a vacancy created by an increase in board size. Mr. Scudder brings extensive experience from his previous roles at Old National Bancorp and First Midwest Bancorp. These developments reflect the company’s ongoing strategic and financial maneuvers.
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