Hello, everyone, and welcome to the First Interstate BancSystem Third Quarter Earnings Conference Call. My name is Harry and I'll be your operator today. I will now hand the call over to Lisa Slyter-Bray to begin. Lisa, please go ahead.

Thank you, Harry. Good morning. Thank you for joining us for our third quarter earnings conference call. As we begin, please note that the information provided during this call will contain forward-looking statements. Actual results or outcomes may differ materially from those expressed by those statements. I'd like to direct all listeners to read the cautionary note regarding forward-looking statements and factors that could affect future results contained in our most recent annual report on Form 10-K filed with the SEC and in our earnings release, as well as the risk factors identified in the annual report and our more recent periodic reports filed with the SEC. Relevant factors that could cause actual results to differ materially from any forward-looking statements are included in the earnings release and in our SEC filings. The company does not undertake to update any of the forward-looking statements made today. A copy of our earnings release, which contains non-GAAP financial measures, is available on our website at fibk.com. Information regarding our use of the non-GAAP financial measures may be found in the body of the earnings release and a, reconciliation to their most directly comparable GAAP financial measures is included at the end of the earnings release for your reference. Joining us from management this morning are Kevin Riley, our Chief Executive Officer; and Marcy Mutch, our Chief Financial Officer, along with other members of our management team. At this time, I'll turn the call over to Kevin Riley. Kevin?

Thanks, Lisa. Good morning and thanks again to all of you for joining us on our call today. Again this quarter, along with our earnings release, we have published an updated investor presentation that has some additional disclosures that we believe will be helpful. The presentation can be accessed on our investor website. And if you haven't downloaded a copy yet, I encourage you to do so. I'm going to start off today by providing an overview of the major highlights of the quarter and then I'll turn the call over to Marcy, so she can provide more detail on our financials. During the third quarter, we saw a continuation of positive trends we have experienced this year. Most notably, quality balance sheet growth, higher revenue, and disciplined expense management. This resulted in another quarter of strong financial results with added income coming in at $47.1 million or $0.76 a share. This includes $0.08 of merger-related expense and $0.02 of expense related to settlement of legal claims. Excluding these two items, our earnings per share was $0.86 or 25% higher than the prior quarter. While the quarter had less robust loan growth than we anticipated. We were still able to generate the growth in our operating pre-provision net revenue that we were expecting. Net interest income excluding PPP increased at a similar pace as the second quarter. Fee income showed strong sequential increases and expenses were flat excluding the two items I noted earlier. All in all, it was another solid quarter for us, which reflected of the underlying strength of our diverse business model. Despite the supply chain and labor challenges, economic activity in our market remains very healthy which, continues to drive strong inflows of core deposits. Our third quarter is typically our strongest quarter for deposit growth…

Thanks, Kevin, and good morning everyone. As I walk through our financial results unless otherwise noted, all of the prior period comparisons will be with the second quarter of 2021 and I'll begin with our income statement. On a GAAP basis, our net interest income increased by $8.1 million, which reflects the growth in our earning assets and a $6.4 million increase in PPP loan income. Accretion income was $200,000 lower on a linked quarter basis. Excluding the impact of PPP income, our net interest income increased by 1.7% from the prior quarter or approximately $2 million, which was in line with what we told you to expect last quarter. The increase was primarily attributable to a higher average balance of investment securities. Looking ahead to the fourth quarter, excluding PPP income, we would expect to see continued growth in net interest income, driven by increases in earning assets. The higher level of PPP income this quarter resulted in a nine basis point increase in our net interest margin on a reported basis when compared to the second quarter excluding PPP from both periods, our net interest margin decreased by 10 basis points. A couple of basis points of that decline is attributable to the adjustment to our dealer reserve we called out last quarter, the balance is due to a shift in our mix of earning assets toward investment securities along with modestly lower loan and security yields. This was offset by one basis point decline in our cost of deposits, resulting from the continued growth in non-interest-bearing deposits. Having said that, we're encouraged by the fact that yields on new loan production increased by 13 basis points linked quarter to 4.11% and that new money in the investment portfolio is now almost on top of the 127 yields…

Thanks, Marcy nice job. I'll wrap up the call with a few comments about our outlook. Heading to the end of the year, we expect to deliver another strong quarter. Well, it's difficult at this point to say when the supply chain and labor market issues impacting loan growth might abate. We should be able to continue generating higher levels of net interest income as a result of higher balances of earning assets. In regards to loan growth, we are well-positioned to meet the loan demand within our markets and we are confident in the ability to continue delivering strong financial results without compromising our pricing and underwriting criteria. We also continue to make progress on our integration planning for the Great Western merger. Again as you have probably seen with Great Western's earnings release, they continue to make progress working through the disposition of loans that we expected to run off after the closing. While that impacts their overall loan balances this quarter, this is just a difference in the expected timing and the progress they are making prior to closing. This is very encouraging to us. To wrap it up, our house is in good order, our people are engaged and excited about the future, our processes and technologies are working well. Our balance sheet is well positioned for this environment and our capital levels are robust. We have a proven track record of enhancing the value of our franchise through acquisition and our shareholders have been rewarded for their support as we've executed on our strategy. We are confident they will continue to be rewarded as we realize the substantial long-term benefits from the combination with Great Western. So with that, I'll open the call up for questions.

Thank you, Kevin. And our first question comes from Jeff Rulis from D.A. Davidson. Jeff, your line is now open if you'd like to proceed.

Thanks good morning. Kevin just wanted to follow-up on the Great Western results. Again further credit progress in the most recent quarter and I just wanted to - to the degree that that expected run-off is occurring or what you had anticipated following the close if that continues to clean up. I guess I just wanted to circle back to your expectations? I think you mentioned that those haven't altered much given the latest results, but you did mention it's a conservative outlook in terms of the growth. So it's either, the credit work you've got to complete and then the kind of the flip to growth which they saw a little bit in September. Just an update on that conservative outlook if you wanted to kind of further discuss that Kevin would be helpful?

Well, I think when we announced the transaction. We talked about that we would have to kind of run-off some of those maybe problem assets as we move forward and that would have a drag on maybe our organic loan growth in the years to come. If they're able to clean up a lot of that earlier, then we probably will have earlier organic loan growth upon the completion of the acquisition.

And just to kind of re-engage with that milepost, I think the standard growth rates were sort of mid-single - low to mid-single-digit for the first year following conversion. Could you just kind of update us back to what those mileposts were?

Yes, they were mid-single digits with the offset being taken care of some of their criticized assets. So, if that is taken care of prior to the closing, which I don't think all of it's going to be done. I think they're doing a great job and that their management team should actually be commended for the efforts that they're putting forth, but yes you would have less of an impact on that mid-single-digit growth number.

The last question related to the Great Western. The timing of that close, are you getting any more visibility in terms of the first quarter? Is that early, middle, late too early to tell still?

It's kind of too early. But I'll tell you, there appears to be a little bit of delay on some of these acquisitions being approved. I think you saw one today, they announced a little bit of a delay. What we're hearing and this is just anecdotal. What we're hearing on the street is that the Fed is really not making many decisions right now or approving transactions until there is a decision on the leadership changes that might occur in the Fed. So, I think once that is cleared up, that - the logjam will be also cleared. So, it might delay us but again, the sooner that announcement happens the quicker this could be approved and moved forward. So, we are still expecting the first quarter. However, if it falls in the beginning of the second quarter, it's really not going to change much of the metrics of the deal.

Got it. And last one is jumping to the fee income line items. Just your thoughts on gain on sale and the payment services showed a little light in the quarter and granted some seasonality there. But if we wanted to kind of extend that into 2022, high-level expectations for those line items?

We're kind of in that process right now, doing our budget, Jeff. And so, I would expect us to continue to grow those line items as we go into 2022. Especially, if we see any changes in supply chain issues or labor issues, as people have the ability to spend more because the goods and services they want are actually out there. I think we'll see some increases in those line items.

Okay. And Marcy, while I have you, the non-interest expense guide, the 1% growth is off of the core or what was that again, just what the 1%?

It's off of last year's numbers, but I would expect our expenses to come in fairly consistent with this quarter rate - operating run rate.

Got it, okay. Thank you.

Thank you, Jeff. And our next question comes from Jared Shaw from Wells Fargo Securities. Jared, your line is now open. So, please proceed.

Thanks good morning, everybody.

Good morning, Jared.

I guess hey. Just looking at the liquidity here, you're continuing to see really good deposit growth you're growing cash balances even as you're growing the securities book. How should we be thinking about cash going into the deal? I mean then do you have a target for cash as a percentage of assets sort of coming out of the deal if we're still on this similar rate environment?

Jeff that - every time we think we're making progress and putting our cash to work more rolls in. So, we're going to continue working that down as we move in towards the deal. So, we're not going to rush into it, but we are slowly going to make points because again, I never like to pick the market of when you want to invest cash. So, we're going to continue working that down. It's there and some people say you got a lot of it. But deposits keep on flowing in and PPP loans keep on getting forgiven and cash keeps rolling in. So, we're trying to put it to work in a very prudent manner and we'll continue to work that down. So, do I like to see $2 billion of cash on the balance sheet? Not really. So, we're going to continue working that down in the most prudent manner possible.

Okay, thanks. And then, looking at loans this quarter saw some good growth in the average balances. I know that there is sort of the impact of pay-downs and payoffs that could potentially happen at the end of the quarter. But as we look forward into fourth quarter, should we still - should we be expecting growth in average loans ex-PPP?

Yes.

Okay, so okay, that's good. And then finally for me just on the allowance ratio. What's sort of the thinking about the timing of being able to approach day one levels and does the timing of the deal impact your thoughts around allowance and qualitative reserves at all?

So, the timing of the deal does not impact our thoughts on that, but you know now that we're seeing some consistency in unemployment rates nationally. They're aligning with our markets and we're seeing improvement in our economies, we are going to need to be able to look at those qualitative factors and perhaps adjust them to begin to release additional allowance if we don't see the loan growths to absorb that. So yes, it's something that's on our radar and I think you'll begin to see that start to come down toward day one levels.

Okay.

As we go forward.

Great, thanks for the answers and will talk to you soon.

All right, Jared. Thank you.

You bet. Thank you.

Thank you, Jared. And it appears we have no further questions, so I'll hand back to Kevin.

Thanks, Harry. Thank you all for again all your questions and joining us on the call today. As always, we welcome calls from our investors and analysts. Please reach out to us if you have any follow-up questions. Thank you for tuning in today. Goodbye.