Tickers in this Article: FIBK
First Interstate BancSystem (FIBK) recently delivered its 4th consecutive positive earnings surprise, due in large part to improving credit quality.Analysts revised their earnings estimates significantly higher after the latest beat, sending the stock to a Zacks Rank #1 (Strong Buy).In addition to strong earnings momentum, this bank offers reasonable valuations and a dividend that yields a solid 2.4%.First Interstate BancSystem, Inc. operates 74 banking offices in Montana, Wyoming and western South Dakota. The company was incorporated in 1971 and its headquartered in Billings, Montana. Second Quarter ResultsFirst Interstate reported better-than-expected second quarter results on July 22. Earnings per share came in at 49 cents, beating the Zacks Consensus Estimate by 11 cents. It was a whopping 77% increase over the same quarter last year.The increase was driven by a significant decline in the provision for loan losses thanks to improving credit quality trends. For instance, non-performing assets declined 84 basis points to 1.76% of total assets.Net interest income declined 1% linked-quarter despite a 1 basis points improvement in the net interest margin. There was also 5% annualized in loans held for investment.Estimates SoaringFollowing second quarter results, analysts revised their estimates significantly higher for both 2013 and 2014. This sent the stock to a Zacks Rank #1 (Strong Buy).The Zacks Consensus Estimate for 2013 is now $1.80, up from $1.59 before the report. The 2014 consensus is currently $1.71, up from $1.60 over the same period.You can see the sharp increase in estimates in the company's 'Price & Consensus Chart':Solid Yield, Reasonable ValuationOn top of strong earnings momentum, First Interstate pays a dividend that yields a solid 2.4%. The company has increased its dividend at a 7% compound annual growth rate since 2010.Shares trade at a reasonable 1.8x tangible book value, which is a discount to the industry median of 2.5x. It also trades at 14x 12-month forward earnings, which is in-line with its peers.The Bottom LineWith improving credit quality, strong earnings momentum, a 2.4% yield and reasonable valuation, this bank offers attractive total return potential.NOTE: First Interstate BancSystem originally appeared as the Zacks.com 'Bull of the Day' on February 15, 2013. Since then, the stock has risen more than +32%.Todd Bunton is the Growth & Income Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor service.