Barclays Maintains an 'Overweight' on First Interstate Bancsystems (FIBK); 3Q11 EPS Review: NPAs Trending Down but Margin Pressures on the Horizon

Barclays maintains an 'Overweight' on First Interstate Bancsystems (NASDAQ: FIBK) price target of $18.00.

Barclays analyst says, "Despite signs of modest improvement, First Interstate remains somewhat captive to credit trends in its three troubled resort and second home communities. These markets account for 43% (46% at 2Q) of its NPAs despite representing just 18% (19%) of its total loans. While it believes its NPA balances have peaked, loan demand within its footprint remains modest and balances should be stable to down near term. Given the positive developments within the energy, mining, agriculture and tourism industries within its footprint, we think its franchise remains poised for longer-term growth but expect near-term results to remain hampered by elevated credit costs, low loan demand (continued construction runoff) and net interest margin pressures."

"To mainly reflect its better than expected 3Q11 results, we are increasing our 2011 EPS estimate to $0.90 from $0.85. However, we lower our 2012 EPS estimate to $1.10 from $1.15 to reflect a reduced NIM assumption."

For more ratings news on First Interstate Bancsystems click here and for the rating history of First Interstate Bancsystems click here.

Shares of First Interstate Bancsystems closed at $12.49 yesterday.

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