FIRST INTERSTATE BANCSYSTEM INC
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
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FY2025 · Filed Feb 26, 2026
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Report of Independent Registered Public Accounting Firm
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of First Interstate BancSystem Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for Credit Losses (ACL)
| Description of the Matter | At December 31, 2025, the Company’s loans held for investment portfolio was $15,201.6 million with an associated ACL of $191.4 million. The provision for credit losses was $26.8 million for the year ended December 31, 2025. As discussed in Notes 1 and 5 to the consolidated financial statements, the ACL is an estimate and consists of three elements: a specific valuation allowance associated with collateral-dependent and other individually evaluated loans; a collective valuation allowance for loans with similar characteristics and trends; and a qualitative valuation allowance to adjust historical loss information based on an evaluation of qualitative factors. |
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| The collective valuation allowance is calculated based on the expected future principal and interest cash flows over the remaining life of a loan, adjusted for prepayment and annual loss rate assumptions. Management’s calculation includes segment-specific multipliers that adjust the annual loss rates to the level expected under economic conditions over a two-year forecast period, followed by a one-year, straight-line reversion to the unadjusted, historical average loss rates. |
| The qualitative valuation allowance represents adjustments to historical loss information and segment-specific multipliers based on asset quality trends, industry concentrations, environmental risks, changes in portfolio composition, and other qualitative risk factors. Other qualitative factors, including changes in loan and lending policies, collateral quality, underwriting standards and personnel, credit review quality, and model imprecision, are also considered. Judgment was required by management to determine the changes in portfolio composition and model imprecision adjustments, which are both part of the qualitative factors management considers. | |
| Auditing the ACL involves a high degree of subjectivity due to the qualitative factors specific to changes in portfolio composition and model imprecision. Management’s identification and measurement of expected credit losses specific to these risk factors is highly judgmental and could have a significant effect on the ACL. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the ACL process, which include, among others, management’s review and approval controls designed to assess the need for and level of the qualitative adjustments for changes in portfolio composition and model imprecision, which are part of the qualitative factors, and the controls related to the reliability of the data utilized to support management’s assessment. |
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| To test the qualitative factors for changes in portfolio composition and model imprecision, we evaluated the appropriateness of management’s methodology and assessed the reasonableness of the adjustments and whether all relevant risks were reflected in the ACL. Additionally, with respect to the model imprecision adjustment, with the support of specialists, we evaluated the model methodology and factors that could impact the accuracy of the model results. | |
| Regarding the measurement of the qualitative factors for changes in portfolio composition and model imprecision, we evaluated the completeness, accuracy and relevance of the underlying internal and external data utilized in management’s estimate and considered the existence of additional or contrary information. We also evaluated the mathematical accuracy of the calculation of qualitative factors. | |
| We evaluated the overall ACL, inclusive of the qualitative factors, and whether the amount appropriately reflects a reasonable estimate of expected credit losses by comparing the overall ACL to historical losses and ACL reserves established by peer banking institutions. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2024.
Salt Lake City, Utah
February 26, 2026
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of income, comprehensive income, stockholders’ equity and cash flows of First Interstate BancSystem, Inc. and subsidiaries (the Company), for the year in the period ended December 31, 2023, and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/RSM US LLP
We served as the Company’s auditor from 2004 to 2024.
Des Moines, Iowa
February 29, 2024
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