Little overlap makes First Interstate, Great Western merger work

Other than the new brand on the buildings, there’s been little apparent change so far as Great Western banks in the Boulder Valley and Northern Colorado became First Interstate Banks.

Billings, Montana-based First Interstate BancSystem Inc. (Nasdaq: FIBK) acquired Sioux Falls, South Dakota-headquartered Great Western Bancorp Inc. (NYSE: GWB) in an all-stock transaction valued at about $2 billion. The acquisition was first announced last September.

“Part of what made this merger so compelling is that there is very little overlap between First Interstate and Great Western Bank’s existing branch locations,” said Gail Grant, First Interstate’s regional president for Colorado. “There has been some limited impact in a few of our other markets to ensure we have the right number of branch locations and staff, but here in Northern Colorado, there hasn’t been consolidation of staff or locations.

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“In fact, she added, “we see ourselves as right sized and looking to grow to serve our local communities.”

Previously, the closest First Interstate office was in Cheyenne, Wyoming. Once the deal was finalized in May, Great Western’s branches in Boulder, Broomfield, Erie, Fort Collins, Greeley, Lafayette, Longmont, Louisville and Loveland were rebranded as First Interstate Bank, along with its other locations — 174 in all — in Colorado, Arizona, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. 

“Both banks were looking for an opportunity to grow and better serve their respective clients and communities, and because of their shared community banking values, it has proved to be an ideal partnership,” Grant said. “New clients can expect to receive the same high level of service with access to additional products, digital tools and convenience services not previously available at Great Western. And in addition to working with the same bank staff they know and trust, clients can now bank at any one of First Interstate’s 300 bank branches across its 14-state footprint.”

Known in the banking industry as a “serial acquirer,” First Interstate had made seven bank deals between 2014 and 2019, but the purchase of Great Western, its first since the COVID-19 pandemic, represented the largest.

According to Kevin Riley, president and chief executive, First Interstate originally was a family of community banks operating under separate names. The First Interstate Bank name was first used in 1984 as part of a franchise agreement with California-based First Interstate Bancorp. Twelve years later, Wells Fargo acquired First Interstate Bancorp for $11.6 billion, but not the First Interstate banks. Those banks created a new holding company, First Interstate BancSystem, and procured an exclusive license to use the “First Interstate” name and logo.

In a media release, Riley said the acquisition creates “a premier banking franchise in the West and allows us to focus on what we do best: taking outstanding care of our clients and creating long-term relationships. Like GWB, First Interstate has a proud history of delivering quality, competitive financial services to clients and of making a positive difference in our communities. It is this similar culture and shared community banking philosophy that makes the blending of our companies exciting for both our employees and our clients.”

“The combined bank will stay dedicated to its community banking roots,” Grant said. “For us, community banking isn’t tied to the size of our organization. It’s about how well we take care of the communities we serve, both through the products and services we provide and through how we give back through philanthropy and volunteerism. That commitment — one of our core values — won’t change simply because our footprint has grown. Our local bankers are empowered to take care of the places we call home, and we will continue to put our money where our mouth is by annually committing 2% of net income before taxes to charitable giving in the communities we serve — including in our eight new states.”

First Interstate donated $20 million to its First Interstate BancSystem Foundation to celebrate the merger. “These funds will ensure that our 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,” Grant said.

Great Western traced its roots to the establishment of Farmers and Merchants Bank in Watertown, South Dakota, in 1935, and the name stuck until it was changed to Great Western Bank in 2003. Seven years later, after having been briefly acquired by an Australian bank, Great Western acquired the failed TierOne Bank in Lincoln, Nebraska. In 2015, it acquired Sioux Falls, South Dakota-based HF Financial Corp., the parent company of Home Federal Bank.

First Interstate’s acquisition of Great Western marked the latest in a series of bank mergers that have affected the Boulder Valley and Northern Colorado:

• Last December, InBankshares Corp. and InBank announced it would acquire Wiley-based Legacy Bank.
• In November, First National Bank of Omaha, which rebranded as FNBO in 2020 and operates branches in Boulder, Brighton, Fort Collins, Greeley, Johnstown, Kersey, Longmont, Loveland, Wellington and Windsor, signed a deal to acquire Laramie, Wyoming-based Western States Bank, whose branches included two in Fort Collins and one in Loveland.
• In October, Walden-based Mountain Valley Bank announced it was buying Greeley-based Cache Bank & Trust, which also had a Fort Collins bank.
• In June 2021, Pittsburgh-based PNC Financial Services Group Inc. completed its $11.6 billion acquisition of Birmingham, Alabama-based BBVA USA Bancshares Inc., and converted local BBVA branches in Boulder, Fort Collins, Greeley, Lafayette, Longmont, Loveland and Westminster.
• In 2019, Texas-based Independent Bank Group Inc. acquired Denver-based Guaranty Bancorp for $1 billion and rebranded itself to Independent Financial, with branches including sites in Berthoud, Brighton, Boulder, Eaton, Fort Collins, Greeley, Longmont, Loveland and Westminster. But in 2020 it scuttled a planned all-stock deal with Texas Capital Bancshares Inc., blaming economic uncertainty related to the COVID-19 pandemic.