Regional Bank IPO: First Interstate BancSystem

| About: First Interstate (FIBK)

First Interstate BancSystem (NASDAQ:FIBK), a Montana-based financial and bank holding company, is expected to price its IPO this week.

Business Overview (from prospectus)

We are a financial and bank holding company headquartered in Billings, Montana. As of December 31, 2009, we had consolidated assets of $7.1 billion, deposits of $5.8 billion, loans of $4.5 billion and total stockholders’ equity of $574 million. We currently operate 72 banking offices in 42 communities located in Montana, Wyoming and western South Dakota. Through the Bank, we deliver a comprehensive range of banking products and services to individuals, businesses, municipalities and other entities throughout our market areas. Our customers participate in a wide variety of industries, including energy, healthcare and professional services, education and governmental services, construction, mining, agriculture, retail and wholesale trade and tourism.

Offering: 8.7 million shares at $14 - $16 per share. Net proceeds of approximately $33.9 million from the offering will be used to repay variable rate term notes.

Lead Underwriters: Barclays Capital (NYSE:BCS), D.A. Davidson

Financial Highlights:

Non-interest income decreased 21.7%, to $100.7 million in 2009, from $128.6 million in 2008...Income from the origination and sale of loans increased 51.7%, to $30.9 million in 2009, from $12.3 million in 2008...Non-interest expense decreased 2.2%, to $217.7 million in 2009, from $222.5 million in 2008...Net income was $50.4 million, or $1.59 per diluted share, in 2009, as compared to $67.3 million, or $2.10 per diluted share, in 2008...Total loans outstanding was $4.5 billion as of December 2009...NPA to total assets was 2.28% as of December 31, 2009...


Commercial banking is highly competitive. We compete with other financial institutions located in Montana, Wyoming, South Dakota and adjoining states for deposits, loans and trust, employee benefit, investment and insurance accounts. We also compete with savings and loan associations, savings banks and credit unions for deposits and loans. In addition, we compete with large banks in major financial centers and other financial intermediaries, such as consumer finance companies, brokerage firms, mortgage banking companies, insurance companies, securities firms, mutual funds and certain government agencies as well as major retailers, all actively engaged in providing various types of loans and other financial services. We generally compete on the basis of customer service and responsiveness to customer needs, available loan and deposit products, rates of interest charged on loans, rates of interest paid for deposits and the availability and pricing of trust, employee benefit, investment and insurance services.

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