First Interstate BancSystem Announces $150M Stock Buyback Program

First Interstate BancSystem has announced a new stock repurchase program of up to $150 million by March 31, 2027. The program aims to optimize shareholder value while considering market conditions and the company's financial performance. The company's strong financial performance and positive earnings call sentiment have driven its stock score to a "Strong Buy" rating with a $32.00 price target.

First Interstate BancSystem (FIBK) has announced a new stock repurchase program of up to $150 million, set to run through March 31, 2027. The program is designed to optimize shareholder value while considering market conditions and the company's financial performance. This strategic move comes on the heels of the company's strong financial performance and positive earnings call sentiment, which has driven its stock score to a "Strong Buy" rating with a $32.00 price target.

The $150 million repurchase program is part of FIBK's broader capital allocation strategy, which aims to enhance shareholder value. The program is supported by the company's robust capital ratios and disciplined cost management. FIBK reported a 13.43% common equity tier 1 (CET1) capital ratio in Q2 2025 [1], significantly above the industry average. This high capital ratio provides a buffer for share repurchases while maintaining regulatory compliance.

FIBK's recent refinancing of $125 million in subordinated debt has also contributed to the success of the buyback program. By extending the debt's maturity to 2035, the bank has stabilized its capital structure and reduced refinancing risk. This has allowed FIBK to allocate $150 million to shareholders without compromising liquidity.

The buyback program could reduce shares by approximately 4.66 million, or 4.45% of the 104.86 million shares outstanding as of July 31, 2025. This reduction in shares outstanding would boost earnings per share (EPS) and potentially narrow the gap to analysts' $35.14 12-month price target [2].

FIBK's competitive edge lies in its deposit franchise and geographic focus. With 93% of deposits in markets where it holds top 10 market share [2], the bank benefits from a low-cost funding base and strong customer loyalty. This positions it to fund buybacks at lower costs compared to peers reliant on wholesale debt.

Analysts highlight FIBK's disciplined approach to risk management. Its net interest income is projected to grow by high single digits in 2026 despite a 6–8% loan contraction in 2025 [1], demonstrating adaptability to shifting economic conditions. This resilience, combined with a 7.0% annualized dividend yield [1], reinforces its appeal to income-focused investors.

FIBK's stock has been performing well, climbing nearly 7% over the past month and up 11% for the year. The move comes on the heels of the company redeeming its 5.25% subordinated notes ahead of schedule and a board expansion with the addition of a veteran banking executive. Both are small but reassuring developments.

The success of FIBK's stock repurchase program hinges on execution. The company has discretion to adjust repurchase activity based on market conditions and liquidity needs [1], a flexibility that mitigates downside risks. By prioritizing buybacks alongside dividends, FIBK balances shareholder returns with capital preservation.

In conclusion, FIBK's $150M stock repurchase program is a strategic lever to enhance shareholder value, supported by robust capital ratios, disciplined cost management, and a strong deposit franchise. Investors should monitor the program's execution and its impact on EPS and CET1 ratios in upcoming filings.

References:
[1] First Interstate BancSystem's Q2 2025 Earnings: A Strategic Turnaround in a Resilient Regional Banking Sector [https://www.ainvest.com/news/interstate-bancsystem-q2-2025-earnings-strategic-turnaround-resilient-regional-banking-sector-2507/]
[2] FIBK - First Interstate BancSystem, Inc. [https://www.datainsightsmarket.com/companies/FIBK]