First Interstate BancSystem, in Billings, Mont., will appeal a Montana state court jury's verdict that the company pay about $17 million in compensatory and punitive damages from a dispute with a former customer.
The $7.7 billion-asset company said in a regulatory filing on Thursday that it will "record the estimated loss associated with this award" in the third quarter, without specifying the amount of the loss. KBW analyst Jacquelynne Chimera estimated the verdict will reduce First Interstate's third-quarter earnings by 24 cents per share.
The $16.8 million in punitive damages awarded by the jury in Missoula, Mont., exceeds Montana' state cap of $10 million in punitive damages, First Interstate said. The company plans to the verdict to the Montana Supreme Court.
First Interstate "strongly disagrees with this unexpected outcome," it said in a regulatory filing.
In the lawsuit, Kelly Logging, in Missoula, Mont., accused First Interstate of taking $762,000 out of its checking account to pay a note that was current, was not due and had not matured, according to a news release issued by Kelly Logging's attorneys, David Paoli and Tim Strauch.
First Interstate shares traded at $26.07 on Monday morning, up 31 cents from Friday's close.