96.8 million.
That was First Interstate BancSystem's diluted share count in the latest reported period, down from 103.4 million in the comparable period a year earlier. Net income rose 17%, from $71.7 million to $83.9 million, but diluted EPS climbed 26%, from $0.69 to $0.87. Fewer shares had fewer shares to divide the profit among.
The arithmetic is clean. Net interest income, the difference between what a bank earns on assets and pays for funding, fell $9.3 million over the six-month comparison. First Interstate also reported a larger pool of non-accrual loans, meaning loans no longer producing their scheduled interest.
Management ties the income pressure to lower rates and a smaller loan base after branch sales. The latest 10-Q says:
"Table of Contents Net interest income decreased $9.3 million during the six months ended June 30, 2026, as compared to the same period in 2025, primarily due to lower interest income on loans as a result of a decrease in average rates and average loan balances driven by the sale of the Arizona and Kansas branches during the fourth quarter of 2025 and the sale of eleven Nebraska branches during the second quarter of 2026, partially offset by a decrease in interest expense resulting from decreased rates on other borrowed funds and deposits along with a decrease in average other borrowed funds balances and higher interest income on investment securities as a result of an increase in average rates and average investment security balances."
10-Q 2026-08-03
The bank is therefore making more money in total while carrying a smaller lending footprint. Total assets fell 2.8% from year-end to $25.885 billion, primarily because loans and cash declined, partly offset by more investment securities.
Credit adds another wrinkle. Non-accrual loans rose 18.7% from year-end, and the company identified one commercial and commercial real estate client relationship as the primary reason:
"Non-accrual loans increased approximately $24.9 million, or 18.7%, to $158.4 million as of June 30, 2026, from $133.5 million as of December 31, 2025, primarily due to a single client relationship comprised of commercial and commercial real estate loans."
10-Q 2026-08-03
That disclosure narrows the immediate explanation, but not the measurement. The increase is concentrated in one relationship, while the bank's reported earnings improvement is helped by the share count rather than by expanding net interest income.
The share count matters because the latest result can look stronger on a per-share chart than in the underlying spread business. First Interstate closed at $38.01 on July 31, down 1.2% that day, after gaining 32.9% over the prior 12 months. Those price facts describe the backdrop, not a stated market reaction to the filing.
The company has repeatedly identified credit and interest rates as business drivers across five filings, with adverse evidence appearing nine times in that history. In this report, both are visible in specific places: lower average rates and balances reduced net interest income, while the non-accrual balance moved higher.
First Interstate's next 10-Q will put the current $158.4 million non-accrual balance alongside the next reported period, showing whether the single-client concentration is still the number carrying the credit disclosure.
First Interstate reported $158.4 million of non-accrual loans as of June 30, 2026, primarily tied to one commercial and commercial real estate client relationship.