FIBK Bears Retreat Ahead of Q3 Print

First Interstate BancSystem reports Q3 results on October 23 with short sellers in clear retreat, even as the analyst community remains cautious about the bank's ability to sustain momentum.

The bear unwind is the dominant pre-earnings story. Short interest has fallen 18% over the past month to 7.8% of the free float, with the heaviest covering concentrated in early October when positions dropped from above 9% to below 8% in a matter of days. The stock has responded: up 6% on the week and 3.4% on Thursday alone, closing at $36.88. Despite the covering, 7.8% of float remains a meaningful short base, and the borrow market is relaxed, with availability running at 519%, nine shares available to borrow for every two already lent out, and cost to borrow a modest 0.53%. Options positioning tells a similar story, the put/call ratio of 2.51 sits just below its 20-day average of 2.44, a slight uptick but well within one standard deviation of normal. Bears are covering, not panicking, and no squeeze pressure is evident.

The analyst debate centres on whether new management's credit reset is real or cosmetic. Bulls point to three consecutive quarters of declining criticized loans, NCOs improving to just 6 basis points, and roughly $200 million of share buybacks since Q3 2025 as evidence that the operational rebuild under new leadership has genuine traction. The stock's EPS surprise factor ranks in the 94th percentile of the ORTEX universe, meaning it has a strong recent record of beating estimates. The mean price target from analysts sits at $37.00, close to where the stock is now trading. Barclays raised its target to $38 on October 5 while keeping an Underweight rating, a reluctant acknowledgment of improvement. Wells Fargo and Barclays are both at Underweight, UBS has a Sell, and DA Davidson moved to Neutral in May after cutting from Buy. Bears argue the improvement story rests on expense discipline rather than revenue growth, and point to loans falling at a double-digit annualised rate with deposit declines in construction, CRE and agriculture. Management itself has flagged only a return to growth in the second half of 2026, leaving the near-term path narrow.

The Scott family, a major 10% owner in the register, has been a consistent seller over the past 90 days. Jonathan Scott sold shares three separate times between mid-September and mid-July at prices between $37 and $40, totalling around $1.3 million in proceeds. Net insider selling over the 90 days reached approximately 37,700 shares worth $1.4 million. These are open-market sales without a disclosed 10b5-1 plan, which gives them slightly more weight than scheduled disposals. The stock's P/E has expanded to 13.1x and P/B to 1.03x, both up on the week, reflecting the recent rally. BlackRock holds 14.4% as the largest institutional owner and increased its stake by 253,000 shares in the most recent quarterly filing.

The print will test whether the credit improvement metrics, criticised loan declines and a clean NCO reading, are durable enough to justify a stock that has rallied sharply even as most covering analysts remain cautious on the name.