First Interstate BancSystem announces CEO transition plan

First Interstate BancSystem, Inc., a financial institution headquartered in Billings, Montana, has disclosed the details of its Chief Executive Officer (CEO) transition plan. Kevin P. Riley, the current President and CEO, is set to retire, with his departure date contingent upon the appointment of his successor. The announcement was made in a recent 8-K filing with the Securities and Exchange Commission.

The transition plan, effective as of Monday, outlines that Riley will remain in his role until a new CEO commences employment or another date determined by the company's Board of Directors, which will not be before January 1, 2025. During this period, Riley will continue to receive compensation similar to his current package, excluding long-term incentive compensation.

Upon his departure, Riley will receive a series of benefits consistent with his existing employment agreement dated August 19, 2021. These benefits include a sum of $3,558,949 paid over 18 months, 24 months of extended health benefits, and other standard entitlements such as earned salary, annual bonuses, and unreimbursed business expenses.

The transition agreement also stipulates that Riley will be eligible for enhanced termination benefits if a change in control occurs during the transition or within six months post-separation. Additionally, his long-term incentive awards and participation in the executive retirement plan will be treated according to the retirement provisions in place.

Riley is also set to resign from the company's Board of Directors, the Board of First Interstate Bank, and the First Interstate BancSystem Foundation as of the separation date. Following his departure, he will provide advisory and consulting services to the company for a year, with a monthly consulting fee of $70,833, and will adhere to the restrictive covenants including non-compete and non-solicit clauses.

The filing includes a cautionary note on forward-looking statements, warning investors about potential risks and uncertainties that could affect the company's future performance and outcomes.

This information is based on the SEC filing by First Interstate BancSystem, Inc. and provides investors with the latest details on the company's executive transition plan.

In other recent news, First Interstate BancSystem's CEO, Kevin P. Riley, has announced his plans to retire. The company has initiated a search for Riley's successor, led by a globally recognized executive recruiting firm. The aim is to ensure a seamless transition and find a leader who can uphold the company's culture of integrity and community service while driving growth and shareholder value.

In terms of financial performance, First Interstate BancSystem reported a net income of $58.4 million, or $0.57 per share, for the first quarter. Despite a decrease in net interest income and noninterest income, the company remains focused on enhancing service and increasing its customer base. The bank also allowed $185 million in high-cost municipal deposits to leave its balance sheet, a move expected to benefit its interest-bearing deposit costs.

The company anticipates net interest margin expansion and a stable cost of funds in the second quarter. However, loan demand remains subdued, particularly in real estate, with a reported decrease in loan balances and total deposits. Despite these challenges, First Interstate BancSystem remains optimistic about its performance for the remainder of 2024 and into 2025.

InvestingPro Insights

As First Interstate BancSystem, Inc. navigates through its CEO transition, investors may find value in examining the company's financial health and performance trends. According to InvestingPro data, First Interstate BancSystem has a market capitalization of $3.06 billion and an attractive price-to-earnings (P/E) ratio of 11.72, which is consistent with the last twelve months as of Q1 2024.

This suggests a valuation that could be appealing to value-oriented investors. Moreover, the company's dividend yield stands at a robust 6.43%, highlighting its commitment to returning value to shareholders, a policy underscored by its history of maintaining dividend payments for 15 consecutive years.

InvestingPro Tips indicate that First Interstate BancSystem has experienced significant returns over the last week and the last three months, with price total returns of 7.89% and 19.77%, respectively. These metrics reflect the company's recent performance and may be of interest to momentum investors. Moreover, analysts predict profitability for the company this year, which could instill confidence in the company's ability to navigate through the executive changes and continue its growth trajectory.

For those interested in a deeper analysis, there are additional InvestingPro Tips available that could provide further insights into First Interstate BancSystem's financial outlook and performance. Remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription for access to these valuable tips and more.

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