Why First Interstate BancSystem (FIBK) Stock Is Trading Up Today

What Happened?

Shares of regional banking company First Interstate BancSystem (NASDAQ:FIBK) jumped 3.8% in the afternoon session after positive results from peer regional banks buoyed investor sentiment for the sector. 

The positive sentiment followed strong quarterly results from competitor KeyCorp, which reported revenue that beat market expectations. KeyCorp's sales grew 12.5% compared to the previous year, and its adjusted profit also came in ahead of analysts' forecasts. Adding to the sector's good news, another peer, Huntington Bancshares, received a vote of confidence from RBC Capital. The firm increased its price target on Huntington, pointing to stable fundamentals for regional banks.

After the initial pop the shares cooled down to $37.59, up 4.1% from previous close.

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What Is The Market Telling Us

First Interstate BancSystem’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 6.7% on the news that disclosures from two lenders raised concerns about deteriorating loan quality across the industry. 

The drop was triggered by specific incidents that have spooked investors. Zions Bancorp announced a $50 million charge-off—a debt the bank doesn't expect to collect—on a single loan. Separately, Western Alliance Bancorp revealed it was dealing with a borrower who had failed to provide proper collateral. These events are compounding existing anxieties about the regional banking sector, which is already under pressure from elevated interest rates and declining commercial real estate values. The news heightened investor concerns that more cracks could appear in borrowers' creditworthiness, potentially leading to increased loan losses and reduced profitability for other banks in the sector.

First Interstate BancSystem is up 6.5% since the beginning of the year, and at $37.59 per share, has set a new 52-week high. Investors who bought $1,000 worth of First Interstate BancSystem’s shares 5 years ago would now be looking at an investment worth $907.85.

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