Montana’s First Interstate nearly doubles with Great Western buy

Montana’s First Interstate BancSystem, Inc., will buy South Dakota’s Great Western Bancorp, Inc., in an all-stock deal worth $2 billion. Once the acquisition closes in 1Q 2022, First Interstate will be one of the region’s largest financial institutions, with more than $32 billion in assets and more than 300 branches across 14 states.

First Interstate BancSystem is the parent company of the nearly $19 billion First Interstate Bank. Great Western Bancorp is the parent company of Great Western Bank. The conversion of Great Western branches to First Interstate is expected to take place during 2Q 2022. Based in Billings, First Interstate also serves Idaho, Oregon, South Dakota, Washington and Wyoming. The $13 billion Great Western Bank has more than 170 branches in nine states: Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.  First Interstate is expected to maintain a major presence in Great Western’s Sioux Falls, S.D., headquarters. 

“This is a transformative moment for our 53-year-old company,” said First Interstate President and CEO Kevin Riley. “The strategic and cultural alignment between our organizations is what makes this transaction so exciting, as we both pride ourselves on being community banks with a strong focus on relationship building, customer service, and community outreach. We are eager to expand our community banking model into eight new states and look forward to building relationships with the employees and clients who call these beautiful regions home.”

Five Great Western Bancorp directors are expected to join the First Interstate BancSystem, Inc., board of directors. First Interstate’s existing dual-class stock structure will sunset at the record date of First Interstate’s next annual shareholder meeting. At that time, existing First Interstate Class B common stock is expected to be converted 1:1 into Class A common stock and First Interstate will no longer be a controlled company. 

“We’re excited to join forces, and confident that both companies’ stakeholders will benefit from this partnership,” added Mark Borrecco, Great Western president and CEO. “We’ll be able to offer customers access to additional branch locations and new products and services, provide new growth and professional development opportunities to our employees, deliver additional returns to our shareholders, and have an even greater impact on our communities.

“Who First Interstate is as an organization and the successes we’ve enjoyed are due in large part to the leadership, support and vision of Scott family members,” Riley said. “These funds will ensure that our shared passion for giving back to the places we call home not only continues in our existing communities but extends into our new communities in meaningful and relevant ways.”

First Interstate, which went public in 2010, entered South Dakota in 2008 with the purchase of First Western Bank, which had 18 offices. In late 2014, the bank bought Helena, Mont.-based Mountain West Bank, a 12-location buy. Then it nabbed Montana’s United Bank Absarokee and Flathead Bank of Bigfork. In 2016, First Interstate looked west and acquired Oregon-based Bank of the Cascades, with 50 offices throughout the Pacific Northwest. In 2018, the bank acquired Inland Northwest Bank, Spokane, Wash., and two Idaho-based banks, Independent bank, Coeur d’Alene and Community 1st Bank, Post Falls.