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On Jun 20, Zacks Investment Research upgraded First Interstate Bancsystem Inc. (FIBK - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

First Interstate Bancsystem has been witnessing rising earnings estimates on the back of strong first-quarter 2013 results. Moreover, this well-known commercial and consumer banking services provider delivered positive earnings surprises in the last 3 quarters with an average beat of 17.9%. The long-term expected earnings growth rate for this stock is 7.5%.

First Interstate Bancsystem reported its first-quarter results on Apr 22 with earnings per share of 46 cents, substantially beating the Zacks Consensus Estimate of 35 cents by 31.4% and the year-ago earnings of 26 cents by 76.9%. Robust results for the reported quarter were primarily aided by higher non-interest income, reduced non-interest expenses and lower provision for loan losses.

Non-interest income jumped 9% year over year to $28.8 million. Non-interest expense dipped 1.2% from the year-ago period to $56.7 million. Provision for loan losses stood at $0.5 million compared with $11.3 million in the prior-year quarter. However, on the downside, net interest income decreased 2.3% to $60.4 million.

Credit quality continues to exhibit an improvement. Nonperforming loans were $100.5 million, waning 45.9% year over year. Nonperforming assets were $133.0 million, down 42.3% year over year.

Following first-quarter 2013 results for First Interstate Bancsystem, the Zacks Consensus Estimate for 2013 increased 8.9% to $1.59 per share over the last 60 days. For 2014, the Zacks Consensus Estimate advanced 2.6% to $1.60 per share.

Other Stocks to Consider

Besides First Interstate Bancsystem, other stocks in the same sector with a Zacks Rank #1 include Enterprise Financial Services Corp. (EFSC - Snapshot Report), Old Second Bancorp Inc. (OSBC - Snapshot Report) and First Business Financial Services, Inc. (FBIZ - Snapshot Report).

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