About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides a range of banking products and services to individuals, businesses, municipalities, and other entities. In February 2022, the company acquired Great Western Bancorp, Inc. (Great Western) and its wholly-owned banking subsidiary, Great Western Bank (GWB). The company provides lending opportunities to clients that participate in a wide variety of industries, including agriculture, hospitality, technology, construction, housing, tourism, education, professional services, technology, governmental services, real estate development, wholesale trade, healthcare, and retail. The company’s principal business activity is lending to, accepting deposits from, and conducting financial transactions for individuals, businesses, municipalities, and other entities located in the communities it serves. The company derives its income principally from interest charged on loans and to a lesser extent, from interest and dividends earned on fixed income investments. The company also derives income from non-interest sources, such as fees received in connection with various lending and deposit services; wealth management services, such as trust, employee benefit, investment, and insurance services; mortgage loan originations, sales, and servicing; merchant and electronic banking services; and from time-to-time, gains on sales of assets and securities. The company’s loan portfolio consists of a mix of real estate, consumer, commercial, agricultural, and other loans, including fixed and variable rate loans. The company’s real estate loans comprise commercial real estate, construction (including residential, commercial, and land development construction loans), residential, agricultural, and other real estate loans. Fluctuations in the loan portfolio are directly related to the economies of the communities it serves. While each loan the company originates must meet minimum underwriting standards it establishes through its credit policies, its bankers are granted discretion to approve and price loans within pre-approved limits which assures that it is responsive to community needs in each market area and remain competitive. Real Estate Loans: The company provides interim construction and permanent financing for both single-family and multi-unit properties, medium-term loans for commercial, agricultural and industrial property and/or buildings and equity lines of credit secured by real estate. Commercial Real Estate Loans: Commercial real estate loans include loans for property and improvements used commercially by the borrower or for lease to others for the production of goods or services. Construction Loans: Construction loans are primarily to commercial builders for residential lot development and the construction of single-family residences and commercial real estate properties. Construction loans are generally underwritten pursuant to pre-approved permanent financing. Residential Real Estate Loans: Residential real estate loans are typically secured by first liens on the financed property. Included in residential real estate loans were home equity loans and lines of credit. Consumer Loans: The company’s consumer loans include direct personal loans; credit card loans and lines of credit; and indirect loans created when it purchases consumer loan contracts advanced for the purchase of automobiles, boats, and other consumer goods from the consumer product dealer network within the market areas it serves. Personal loans and indirect dealer loans are generally secured by automobiles, recreational vehicles, boats, and other types of personal property and are made on an installment basis. Credit cards are offered to clients in the company’s market areas. Lines of credit are generally floating rate loans that are unsecured or secured by personal property. Commercial Loans: The company provides a mix of variable and fixed rate commercial loans. The loans are typically made to small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions. Commercial loans generally include lines of credit, business credit cards, and loans with maturities of five years or less and outstanding balances tend to be cyclical in nature. The loans are generally made with business operations as the primary source of repayment and are typically collateralized by inventory, accounts receivable, equipment, and/or personal guarantees. Agricultural Loans: The company’s agricultural loans generally consist of short- and medium-term loans and lines of credit that are primarily used for crops, livestock, equipment, and general operations. Agricultural loans are ordinarily secured by assets such as livestock or equipment and are repaid from the operations of the farm or ranch. Agricultural loans generally have maturities of five years or less, with operating lines for one production season. Deposit Products The company offers traditional depository products, including checking, savings, and time deposits. It also offers repurchase agreements primarily to commercial and municipal depositors. Under repurchase agreements, the company sells investment securities held by the bank to its clients under an agreement to repurchase the investment securities at a specified time or on demand. Wealth Management The company provides a wide range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. These services include the administration of estates and personal trusts, management of investment accounts for individuals, employee benefit plans and charitable foundations, and insurance planning. Centralized Services The company has centralized certain operational activities to provide consistent service levels to its clients across it, which helps it gain efficiency in management of those activities, as well as ensure regulatory compliance. Centralized operational activities generally support the company’s banking offices in the delivery of products and services to clients and include marketing; credit review; loan servicing; credit card issuance and servicing; mortgage loan sales and servicing; indirect consumer loan purchasing and processing; loan collections; and other operational activities. Additionally, specialized staff support services have been centralized to enable the company’s branches to more efficiently serve their markets. These services include credit risk management; finance; human resource management; internal audit; facilities management; technology; risk management; legal; compliance; and other support services. Investment Portfolio As of December 31, 2022, the company’s investment portfolio included U.S. Treasury notes; state, county, and municipal securities; obligations of U.S. government agencies; U.S. agency residential & commercial mortgage-backed securities & collateralized mortgage obligations; private mortgage-backed securities; collateralized loan obligations; and corporate securities. Government Regulation and Supervision As a public company with its securities listed for trading on the NASDAQ, the company is subject to the disclosure and regulatory requirements of the Securities and Exchange Commission, including under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and listing standards of the NASDAQ stock market. As a financial and bank holding company, the company is subject to regulation under the Bank Holding Company Act of 1956, as amended, and to supervision, regulation, and regular examination by the Board of Governors of the Federal Reserve System (the Federal Reserve). The bank is subject to supervision and regular examination by its primary banking regulators, the Federal Reserve and the Montana Department of Administration, Division of Banking and Financial Institutions (the Montana Division). The bank is also subject to supervision and regular examination by the Consumer Financial Protection Bureau (CFPB). The bank’s deposits are insured by the Deposit Insurance Fund (DIF) administered by the FDIC in the manner and to the extent provided by law. As such, the bank is subject to the Federal Deposit Insurance Act (the FDIA) and FDIC regulations relating to deposit insurance and may also be subject to supervision and examination by the FDIC. The Equal Credit Opportunity Act generally prohibits discrimination in credit transactions on, among other things, the basis of race, color, religion, national origin, sex, marital status, or age and, in certain circumstances, limits the bank’s ability to require co-obligors or guarantors as a condition of the extension of credit to an individual. The company is subject to the regulatory capital framework and guidelines reached by Basel III as adopted by the Federal Reserve. The extensive regulation of the bank limits both the activities in which the bank may engage and the conduct of its permitted activities. Further, the laws and regulations impose reporting and information collection obligations on the bank. The bank incurs significant costs relating to compliance with various laws and regulations and the collection and retention of information. As the regulatory framework for bank holding companies and banks continues to grow and become more complex, the cost of complying with regulatory requirements continues to increase. The company is a bank holding company and has registered as a financial holding company under regulations issued by the Federal Reserve. As a financial holding company, the company may engage in business activities that are determined by the Federal Reserve to be financial in nature or incidental to financial activities, as well as all activities authorized generally to bank holding companies. The company may continue to engage in authorized financial activities provided that it remains a financial holding company and are well-capitalized and well-managed. The company is required by the Bank Holding Company Act to obtain Federal Reserve approval prior to acquiring, directly or indirectly, ownership or control of voting shares of any bank, if, after such acquisition, the company would own or control more than 5% of its voting stock. Although the bank’s policies and procedures are designed to achieve compliance with all fair lending and the Community Reinvestment Act (CRA) requirements, instances of non-compliance are occasionally identified through normal operational activities. History First Interstate BancSystem, Inc. was founded in 1971. The company was incorporated as a Montana corporation in 1971.