BILLINGS - First Interstate Bank is making a big expansion in the Midwest region and marking the end of an era in its management.
The Billings-based banking firm announced Thursday that it's agreed to acquire Great Western Bank of Sioux Falls, South Dakota, which would push First Interstate to $32 billion in assets and more than 300 branches across 14 states upon closing of the deal.
When the deal is closed, the Scott family, whose patriarch, Homer Scott, founded the bank in 1971, will step aside from their controlling interest on the bank's board of directors. They will continue to own shares and serve on the board.
“Throughout our many years of ownership, we have prided ourselves on the ability to stay true to our values and roots while simultaneously adapting, innovating, and responding to the unique needs of our clients and communities,” said Jim Scott, director of First Interstate's board and son of Homer and his wife, Mildred. “This combination is an extension of our legacy in the region where our family’s roots began. It increases the Bank’s community commitment while expanding our brand of community banking.”
The bank will convert its dual-class stock, which allowed the Scotts to sell shares to investors but maintain voting control, to class A common stock, which offers more voting control to outside shareholders.
First Interstate is Montana's largest native bank.
Great Western Bank has more than 170 branches in nine states: Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. Eight of those states (excluding South Dakota) are new to First Interstate's portfolio.
The all-stock transaction is expected to close during the first three months of 2022. Great Western branches are expected to convert to the First Interstate brand in the middle of next year.
“This is a transformative moment for our 53-year-old company,” said First Interstate President and CEO Kevin Riley in a statement. “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."
As part of the transaction, First Interstate also plans to donate $20 million in honor of the Scott family to the First Interstate BancSystem Foundation, the parent company's community outreach arm.