10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________________________

ý Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2012

OR

¨ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from  to

COMMISSION FILE NUMBER 001-34653

________________________________________________________________________________________________________

First Interstate BancSystem, Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________________

Montana	81-0331430
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
401 North 31st Street, Billings, MT	59116-0918
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 406/255-5390

______________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)     Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	ý
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨ No  ý

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock:

September 30, 2012 – Class A common stock	17,019,375
September 30, 2012 – Class B common stock	26,233,008

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES Quarterly Report on Form 10-Q Index
		Page
Part I.	Financial Information
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets - September 30, 2012 and December 31, 2011	3
	Consolidated Statements of Income - Three and Nine Months Ended September 30, 2012 and 2011	4
	Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2012 and 2011	5
	Consolidated Statements of Changes in Stockholders’ Equity -Nine Months Ended September 30, 2012 and 2011	6
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2012 and 2011	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	50
Item 4.	Controls and Procedures	50
Part II.	Other Information
Item 1.	Legal Proceedings	51
Item 1A .	Risk Factors	51
Item  2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	51
Signatures		53

2

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)
	September 30, 2012		December 31, 2011
Assets
Cash and due from banks	$	124,275	$	142,502
Federal funds sold	1,215		309
Interest bearing deposits in banks	485,845		329,636
Total cash and cash equivalents	611,335		472,447
Investment securities:
Available-for-sale	1,979,154		2,016,864
Held-to-maturity (estimated fair values of $199,078 and $161,877 at September 30, 2012 and December 31, 2011, respectively)	187,573		152,781
Total investment securities	2,166,727		2,169,645
Loans held for investment	4,107,171		4,133,028
Mortgage loans held for sale	72,880		53,521
Total loans	4,180,051		4,186,549
Less allowance for loan losses	99,006		112,581
Net loans	4,081,045		4,073,968
Premises and equipment, net of accumulated depreciation	188,851		184,771
Goodwill	183,673		183,673
Company-owned life insurance	76,371		74,880
Other real estate owned (“OREO”)	39,971		37,452
Accrued interest receivable	33,416		31,974
Mortgage servicing rights, net of accumulated amortization and impairment reserve	12,334		11,555
Deferred tax asset, net	1,638		9,628
Core deposit intangibles, net of accumulated amortization	6,291		7,357
Other assets	59,500		68,177
Total assets	$	7,461,152	$	7,325,527
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	1,443,773	$	1,271,709
Interest bearing	4,591,959		4,555,262
Total deposits	6,035,732		5,826,971
Securities sold under repurchase agreements	460,805		516,243
Accounts payable and accrued expenses	40,386		42,248
Accrued interest payable	6,706		8,123
Long-term debt	37,170		37,200
Other borrowed funds	6		7
Subordinated debentures held by subsidiary trusts	82,477		123,715
Total liabilities	6,663,282		6,554,507
Stockholders’ equity:
Nonvoting noncumulative preferred stock without par value;    authorized 100,000 shares; issued and outstanding 5,000 shares as of September 30, 2012 and December 31, 2011	50,000		50,000
Common stock	270,553		266,842
Retained earnings	458,506		435,144
Accumulated other comprehensive income, net	18,811		19,034
Total stockholders’ equity	797,870		771,020
Total liabilities and stockholders’ equity	$	7,461,152	$	7,325,527

See accompanying notes to unaudited consolidated financial statements.

3

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Interest income:
Interest and fees on loans	$	57,418	$	61,372	$	173,412		$	185,238
Interest and dividends on investment securities:
Taxable	9,194		10,721		28,357			31,281
Exempt from federal taxes	1,223		1,188		3,667			3,553
Interest on deposits in banks	336		200		852			794
Interest on federal funds sold	4		2		11			11
Total interest income	68,175		73,483		206,299			220,877
Interest expense:
Interest on deposits	5,414		7,905		17,455			26,679
Interest on securities sold under repurchase agreements	144		137		452			545
Interest on long-term debt	502		498		1,495			1,482
Interest on subordinated debentures held by subsidiary trusts	1,110		1,451		4,084			4,354
Total interest expense	7,170		9,991		23,486			33,060
Net interest income	61,005		63,492		182,813			187,817
Provision for loan losses	9,500		14,000		32,750			44,400
Net interest income after provision for loan losses	51,505		49,492		150,063			143,417
Non-interest income:
Income from the origination and sale of loans	11,665		5,512		29,469			13,066
Other service charges, commissions and fees	8,774		8,479		25,452			23,627
Service charges on deposit accounts	4,395		4,609		13,011			13,104
Wealth management revenues	3,557		3,202		10,655			9,980
Investment securities gains, net	66		38		295			56
Other income	1,725		1,285		5,344			5,042
Total non-interest income	30,182		23,125		84,226			64,875
Non-interest expense:
Salaries and wages	23,341		20,801		66,545			61,557
Employee benefits	7,447		6,087		23,232			20,922
Occupancy, net	3,793		4,180		11,818			12,408
Furniture and equipment	3,231		3,018		9,558			9,367
Outsourced technology services	2,182		2,235		6,627			6,688
OREO expense, net of income	2,612		2,878		5,523			6,631
FDIC insurance premiums	1,622		1,631		4,818			5,726
Professional fees	1,050		995		2,985			2,500
Mortgage servicing rights amortization	879		807		2,591			2,285
Mortgage servicing rights impairment (recovery)	55		1,168		(761		)	848
Core deposit intangibles amortization	355		362		1,066			1,085
Other expenses	10,497		10,879		37,801			32,174
Total non-interest expense	57,064		55,041		171,803			162,191
Income before income tax expense	24,623		17,576		62,486			46,101
Income tax expense	8,468		5,655		21,107			14,820
Net income	16,155		11,921		41,379			31,281
Preferred stock dividends	863		862		2,569			2,559
Net income available to common shareholders	$	15,292	$	11,059	$	38,810		$	28,722
Basic earnings per common share	$	0.36	$	0.26	$	0.90		$	0.67
Diluted earnings per common share	$	0.35	$	0.26	$	0.90		$	0.67

See accompanying notes to unaudited consolidated financial statements.

4

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income	$	16,155		$	11,921		$	41,379		$	31,281
Other comprehensive income (loss), before tax:
Investment securities available-for sale:
Change in net unrealized gains (losses) during period	931			2,781			(175		)	24,200
Reclassification adjustment for net gains included in income	(66		)	(38		)	(295		)	(56		)
Defined benefit post-retirement benefits plans:
Change in net actuarial loss	35			35			102			104
Other comprehensive income (loss), before tax	900			2,778			(368		)	24,248
Deferred tax benefit (expense) related to other comprehensive     income	(354		)	(1,093		)	145			(9,541		)
Other comprehensive income (loss), net of tax	546			1,685			(223		)	14,707
Comprehensive income, net of tax	$	16,701		$	13,606		$	41,156		$	45,988

See accompanying notes to unaudited consolidated financial statements.

5

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (In thousands, except share and per share data) (Unaudited)
	Preferred stock		Common stock			Retained earnings			Accumulated other comprehensive income			Total stockholders’ equity
Balance at December 31, 2011	$	50,000	$	266,842		$	435,144		$	19,034		$	771,020
Comprehensive income:
Net income	—		—			41,379			—			41,379
Other comprehensive income, net of tax	—		—			—			(223		)	(223		)
Common stock transactions:
18,333 common shares purchased and retired	—		(262		)	—			—			(262		)
23,973 common shares issued	—		—			—			—			—
122,912 non-vested common shares issued	—		—			—			—			—
4,689 non-vested common shares forfeited	—		—			—			—			—
144,346 stock options exercised, net of 102,213 shares tendered in payment of option price and income tax withholding amounts	—		1,326			—			—			1,326
Tax benefit of stock-based compensation	—		296			—			—			296
Stock-based compensation expense	—		2,351			—			—			2,351
Cash dividends declared:
Common ($0.36 per share)	—		—			(15,448		)	—			(15,448		)
Preferred (6.75% per share)	—		—			(2,569		)	—			(2,569		)
Balance at September 30, 2012	$	50,000	$	270,553		$	458,506		$	18,811		$	797,870
Balance at December 31, 2010	$	50,000	$	264,174		$	413,253		$	9,375		$	736,802
Comprehensive income:
Net income	—		—			31,281			—			31,281
Other comprehensive income, net of tax	—		—			—			14,707			14,707
Common stock transactions:
14,464 common shares purchased and retired	—		(197		)	—			—			(197		)
15,440 common shares issued	—		—			—			—			—
130,904 non-vested common shares issued	—		—			—			—			—
20,039 non-vested common shares forfeited	—		(101		)	—			—			(101		)
Non-vested liability awards vesting during period	—		195			—			—			195
67,197 stock options exercised, net of 114,211 shares tendered in payment of option price and income tax withholding amounts	—		272			—			—			272
Tax benefit of stock-based compensation	—		204			—			—			204
Stock-based compensation expense	—		1,770			—			—			1,770
Cash dividends declared:
Common ($0.3375 per share)	—		—			(14,419		)	—			(14,419		)
Preferred (6.75% per share)	—		—			(2,559		)	—			(2,559		)
Balance at September 30, 2011	$	50,000	$	266,317		$	427,556		$	24,082		$	767,955

See accompanying notes to unaudited consolidated financial statements.

6

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	41,379		$	31,281
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	32,750			44,400
Net (gain) loss on disposal of property and equipment	(490		)	28
Depreciation and amortization	12,770			12,997
Net premium amortization on investment securities	7,913			7,373
Net gains on investment securities transactions	(295		)	(56		)
Net gains on sales of mortgage loans held for sale	(20,648		)	(8,730		)
Net gain on sale of OREO	(768		)	(533		)
OREO valuation adjustments	3,457			5,972
Net impairment (reversal of impairment) of mortgage servicing rights	(761		)	848
Net gain on sale of mortgage servicing rights	(19		)	—
Deferred income tax expense	8,013			400
Net increase in cash surrender value of company-owned life insurance policies	(1,491		)	(1,306		)
Stock-based compensation expense	2,351			1,648
Tax benefits from stock-based compensation expense	296			204
Excess tax benefits from stock-based compensation	(187		)	(129		)
Originations of mortgage loans held for sale, net of sales	(2,055		)	799
Changes in operating assets and liabilities:
Increase in interest receivable	(1,442		)	(1,366		)
Decrease in other assets	7,381			11,373
Decrease in accrued interest payable	(1,417		)	(4,392		)
Decrease in accounts payable and accrued expenses	(1,800		)	(1,404		)
Net cash provided by operating activities	84,937			99,407
Cash flows from investing activities:
Purchases of investment securities:
Held-to-maturity	(44,283		)	(11,626		)
Available-for-sale	(787,697		)	(704,619		)
Proceeds from maturities and pay-downs of investment securities:
Held-to-maturity	9,069			8,940
Available-for-sale	817,903			611,918
Capital distribution by unconsolidated subsidiary trust	1,238			—
Proceeds from sales of mortgage servicing rights	907			596
Extensions of credit to customers, net of repayments	(61,721		)	40,278
Recoveries of loans charged-off	4,320			4,269
Proceeds from sales of OREO	31,800			12,247
Capital contribution to unconsolidated equity method investment	(900		)	—
Capital expenditures, net of sales	(11,973		)	(7,099		)
Net cash used in investing activities	$	(41,337	)	$	(45,096	)

7

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited)
	Nine Months Ended September 30,
	2012			2011
Cash flows from financing activities:
Net increase (decrease) in deposits	$	208,761		$	(74,394	)
Net decrease in repurchase agreements	(55,438		)	(144,632		)
Net increase (decrease) in short-term borrowings	(1		)	131
Repayment of junior subordinated debentures held by subsidiary trusts	(41,238		)	—
Repayments of long-term debt	(30		)	(33		)
Proceeds from issuance of common stock	1,326			272
Excess tax benefits from stock-based compensation	187			129
Purchase and retirement of common stock	(262		)	(197		)
Dividends paid to common stockholders	(15,448		)	(14,419		)
Dividends paid to preferred stockholders	(2,569		)	(2,559		)
Net cash provided by (used in) financing activities	95,288			(235,702		)
Net increase (decrease) in cash and cash equivalents	138,888			(181,391		)
Cash and cash equivalents at beginning of period	472,447			685,618
Cash and cash equivalents at end of period	$	611,335		$	504,227
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	12,740		$	12,420
Cash paid during the period for interest expense	$	24,903		$	37,452

See accompanying notes to unaudited consolidated financial statements.

8

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

(1) Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements of First Interstate BancSystem, Inc. and subsidiaries (the “Company”) contain all adjustments (all of which are of a normal recurring nature) necessary to present fairly the financial position of the Company at September 30, 2012 and December 31, 2011, the results of operations for each of the three and nine month periods ended September 30, 2012 and 2011 and cash flows for the nine months ended September 30, 2012 and 2011, in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2011 is derived from audited consolidated financial statements. Certain reclassifications, none of which were material, have been made to conform prior year financial statements to the September 30, 2012 presentation. These reclassifications did not change previously reported net income or stockholders’ equity.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

(2) Investment Securities

The amortized cost and approximate fair values of investment securities are summarized as follows:

September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	914,676	$	4,648	$	(39	)	$	919,285
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,030,703		29,824		(1,266		)	1,059,261
Private mortgage-backed securities	598		11		(1		)	608
Total	$	1,945,977	$	34,483	$	(1,306	)	$	1,979,154

September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	181,792	$	11,489	$	(47	)	$	193,234
Corporate securities	5,658		63		—			5,721
Other securities	123		—		—			123
Total	$	187,573	$	11,552	$	(47	)	$	199,078

9

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	1,134,427	$	4,353	$	(662	)	$	1,138,118
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	848,444		29,567		(14		)	877,997
Private mortgage-backed securities	758		7		(16		)	749
Total	$	1,983,629	$	33,927	$	(692	)	$	2,016,864

December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	152,619	$	9,113	$	(17	)	$	161,715
Other securities	162		—		—			162
Total	$	152,781	$	9,113	$	(17	)	$	161,877

Gross realized gains and losses from the disposition of investment securities are summarized in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Gross realized gains	$	66	$	38	$	298		$	56
Gross realized losses	—		—		(3		)	—

The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of September 30, 2012 and December 31, 2011

	Less than 12 Months					12 Months or More					Total
September 30, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	31,855	$	(39	)	$	—	$	—		$	31,855	$	(39	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	124,136		(1,266		)	—		—			124,136		(1,266		)
Private mortgage-backed securities	—		—			154		(1		)	154		(1		)
Total	$	155,991	$	(1,305	)	$	154	$	(1	)	$	156,145	$	(1,306	)

	Less than 12 Months					12 Months or More					Total
September 30, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	4,961	$	(39	)	$	696	$	(8	)	$	5,657	$	(47	)

10

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

	Less than 12 Months					12 Months or More					Total
December 31, 2011	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	287,404	$	(662	)	$	—	$	—		$	287,404	$	(662	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	45,694		(14		)	—		—			45,694		(14		)
Private mortgage-backed securities	246		(10		)	177		(6		)	423		(16		)
Total	$	333,344	$	(686	)	$	177	$	(6	)	$	333,521	$	(692	)

	Less than 12 Months				12 Months or More					Total
December 31, 2011	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	—	$	—	$	773	$	(17	)	$	773	$	(17	)

The investment portfolio is evaluated quarterly for other-than-temporary declines in the market value of each individual investment security. The Company had 30 and 24 individual investment securities that were in an unrealized loss position as of September 30, 2012 and December 31, 2011, respectively. Unrealized losses as of September 30, 2012 and December 31, 2011 related primarily to fluctuations in the current interest rates. The Company does not have the intent to sell any of the available-for-sale securities in the above table and it is not likely that the Company will have to sell any such securities before a recovery in cost. No impairment losses were recorded during the three or nine months ended September 30, 2012 and 2011.

Maturities of investment securities at September 30, 2012 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.

	Available-for-Sale				Held-to-Maturity
September 30, 2012	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	432,052	$	440,039	$	5,891	$	5,822
After one year but within five years	1,131,727		1,147,641		33,837		34,853
After five years but within ten years	227,503		232,493		79,891		84,811
After ten years	154,695		158,981		67,831		73,469
Total	1,945,977		1,979,154		187,450		198,955
Investments with no stated maturity	—		—		123		123
Total	$	1,945,977	$	1,979,154	$	187,573	$	199,078

As of September 30, 2012, the Company had investment securities callable within one year with amortized costs and estimated fair values of $490,246 and $491,469, respectively, including callable structured notes with amortized costs and estimated fair values of $120,273 and $120,519, respectively. These investment securities are primarily classified as available-for-sale and included in the after one year but within five years category in the table above.

11

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

(3) Loans

The following table presents loans by class as of the dates indicated:

	September 30, 2012		December 31, 2011
Real estate loans:
Commercial	$	1,513,784	$	1,553,155
Construction:
Land acquisition & development	233,082		278,613
Residential	50,895		61,106
Commercial	56,097		61,054
Total construction loans	340,074		400,773
Residential	639,235		571,943
Agricultural	175,395		175,302
Total real estate loans	2,668,488		2,701,173
Consumer:
Indirect consumer	431,449		407,651
Other consumer	139,984		147,487
Credit card	58,324		60,933
Total consumer loans	629,757		616,071
Commercial	672,100		693,261
Agricultural	135,467		119,710
Other, including overdrafts	1,359		2,813
Loans held for investment	4,107,171		4,133,028
Mortgage loans held for sale	72,880		53,521
Total loans	$	4,180,051	$	4,186,549

12

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the period indicated:

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of September 30, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	15,120	$	3,061	$	643	$	18,824	$	1,443,893	$	51,067	$	1,513,784
Construction:
Land acquisition & development	3,518		326		—		3,844		199,991		29,247		233,082
Residential	1,049		—		—		1,049		47,077		2,769		50,895
Commercial	1,875		—		—		1,875		43,703		10,519		56,097
Total construction loans	6,442		326		—		6,768		290,771		42,535		340,074
Residential	3,674		1,064		2,382		7,120		621,601		10,514		639,235
Agricultural	6,419		22		217		6,658		163,943		4,794		175,395
Total real estate loans	31,655		4,473		3,242		39,370		2,520,208		108,910		2,668,488
Consumer:
Indirect consumer	2,792		385		47		3,224		427,774		451		431,449
Other consumer	822		129		24		975		137,904		1,105		139,984
Credit card	368		280		528		1,176		57,125		23		58,324
Total consumer loans	3,982		794		599		5,375		622,803		1,579		629,757
Commercial	5,185		1,808		823		7,816		652,420		11,864		672,100
Agricultural	234		146		—		380		134,509		578		135,467
Other, including overdrafts							—		1,359		—		1,359
Loans held for investment	41,056		7,221		4,664		52,941		3,931,299		122,931		4,107,171
Mortgage loans originated for sale	—		—		—		—		72,880		—		72,880
Total loans	$	41,056	$	7,221	$	4,664	$	52,941	$	4,004,179	$	122,931	$	4,180,051

13

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2011	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	22,124	$	7,871	$	630	$	30,625	$	1,455,139	$	67,391	$	1,553,155
Construction:
Land acquisition & development	5,251		2,448		867		8,566		208,134		61,913		278,613
Residential	415		—		—		415		56,219		4,472		61,106
Commercial	1,698		—		—		1,698		34,820		24,536		61,054
Total construction loans	7,364		2,448		867		10,679		299,173		90,921		400,773
Residential	4,669		973		1,798		7,440		546,278		18,225		571,943
Agricultural	4,103		1,831		—		5,934		166,119		3,249		175,302
Total real estate loans	38,260		13,123		3,295		54,678		2,466,709		179,786		2,701,173
Consumer:
Indirect consumer	3,078		370		45		3,493		403,695		463		407,651
Other consumer	1,479		436		60		1,975		144,625		887		147,487
Credit card	604		375		585		1,564		59,343		26		60,933
Total consumer loans	5,161		1,181		690		7,032		607,663		1,376		616,071
Commercial	13,721		3,464		405		17,590		657,609		18,062		693,261
Agricultural	476		215		110		801		118,150		759		119,710
Other, including overdrafts	—		2		—		2		2,811		—		2,813
Loans held for investment	57,618		17,985		4,500		80,103		3,852,942		199,983		4,133,028
Mortgage loans originated for sale	—		—		—		—		53,521		—		53,521
Total loans	$	57,618	$	17,985	$	4,500	$	80,103	$	3,906,463	$	199,983	$	4,186,549

If interest on non-accrual loans had been accrued, such income would have approximated $456 and $819 for the three months ended September 30, 2012 and 2011, respectively, and approximated $1,701 and $2,283 for the nine months ended September 30, 2012 and 2011, respectively.

14

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The Company considers impaired loans to include all loans risk rated doubtful, loans placed on non-accrual status and loans renegotiated in troubled debt restructurings with the exception of consumer loans. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:

As of September 30, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	88,185	$	61,509	$	17,143	$	78,652	$	4,453
Construction:
Land acquisition & development	43,595		19,660		12,558		32,218		4,137
Residential	3,333		1,257		1,744		3,001		276
Commercial	13,071		1,379		9,140		10,519		588
Total construction loans	59,999		22,296		23,442		45,738		5,001
Residential	12,044		5,570		5,070		10,640		1,736
Agricultural	5,929		3,293		2,137		5,430		158
Total real estate loans	166,157		92,668		47,792		140,460		11,348
Commercial	13,824		8,338		5,070		13,408		2,924
Agricultural	642		178		412		590		412
Total	$	180,623	$	101,184	$	53,274	$	154,458	$	14,684

As of December 31, 2011	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	97,745	$	62,769	$	23,218	$	85,987	$	6,741
Construction:
Land acquisition & development	73,258		22,300		39,131		61,431		12,084
Residential	13,721		10,427		2,044		12,471		312
Commercial	26,647		3,510		21,026		24,536		5,042
Total construction loans	113,626		36,237		62,201		98,438		17,438
Residential	18,305		2,678		15,626		18,304		3,844
Agricultural	8,018		7,470		—		7,470		—
Total real estate loans	237,694		109,154		101,045		210,199		28,023
Commercial	26,348		7,354		12,284		19,638		4,664
Agricultural	759		496		263		759		151
Total	$	264,801	$	117,004	$	113,592	$	230,596	$	32,838

15

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:

	Three Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment	Income Recognized
Real estate:
Commercial	$	81,313	$	366	86,347	$	188
Construction:
Land acquisition & development	36,206		30		66,470	3
Residential	3,151		—		17,627	18
Commercial	10,817		—		23,441	—
Total construction loans	50,174		30		107,538	21
Residential	12,416		1		22,972	160
Agricultural	5,173		9		7,694	56
Total real estate loans	149,076		406		224,551	425
Commercial	15,992		21		33,634	31
Agricultural	748		4		885	—
Total	$	165,816	$	431	259,070	$	456

	Nine Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	82,689	$	1,037	$	83,479	$	390
Construction:
Land acquisition & development	49,528		76		54,494		90
Residential	8,591		—		17,248		55
Commercial	18,601		—		20,371		—
Total construction loans	76,720		76		92,113		145
Residential	14,667		22		19,101		257
Agricultural	7,090		41		6,392		98
Total real estate loans	181,166		1,176		201,085		890
Commercial	16,129		65		32,634		96
Agricultural	1,039		19		925		—
Total	$	198,334	$	1,260	$	234,644	$	986

The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $452 and $812 for the three months ended September 30, 2012 and 2011, respectively, and approximately $1,688 and $2,263 for the nine months ended September 30, 2012 and 2011, respectively.

16

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized.

Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume.

The Company had loans renegotiated in troubled debt restructurings of $90,410 as of September 30, 2012, of which $54,982 were included in non-accrual loans and $35,428 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $94,827 as of December 31, 2011, of which $57,451 were included in non-accrual loans and $37,376 were on accrual status.

The following tables present information on the Company's troubled debt restructurings that occurred during the three and nine months ended September 30, 2012:

		Type of Concession
Three Months Ended September 30, 2012	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Real estate:
Commercial	2	$	—	$	432	$	628	$	—	$	1,060
Construction:
Residential	1	—		—		233		—		233
Total construction loans	1	—		—		233		—		233
Agricultural	1	—		154		—		—		154
Total real estate loans	4	—		586		861		—		1,447
Commercial	1	—		—		—		35		35
Total loans restructured during period	5	$	—	$	586	$	861	$	35	$	1,482

17

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Nine Months Ended September 30, 2012		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	14	$	—	$	432	$	4,504	$	8,612	$	13,548
Construction:
Land acquisition & development	3	—		229		—		623		852
Residential	1	—		—		233		—		233
Commercial	1	—		—		—		3,155		3,155
Total construction loans	5	—		229		233		3,778		4,240
Residential	2	568		25		—		—		593
Agricultural	1	—		154		—		—		154
Total real estate loans	22	568		840		4,737		12,390		18,535
Consumer:
Other	1	—		69		—		—		69
Total consumer loans	1	—		69		—		—		69
Commercial	6	13		98		—		115		226
Total loans restructured during period	29	$	581	$	1,007	$	4,737	$	12,505	$	18,830

(1) Other includes concessions that reduce or defer payments for a specified period of time and/or extend amortization schedules.

For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principal loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to modifying troubled debt restructurings during the three and nine months ended September 30, 2012 or 2011.

The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the periods indicated. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.

	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	—	$	—	2	$	507
Construction:
Land acquisition & development	—	—		1	468
Total construction loans	—	—		1	468
Residential	2	599		2	599
Total real estate loans	2	599		5	1,574
Total	2	$	599	5	$	1,574

At September 30, 2012, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual.

18

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators:

Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements.

Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a Substandard is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a Substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit.

Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:

As of September 30, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	115,540	$	143,023	$	19,401	$	277,964
Construction:
Land acquisition & development	33,362		25,369		16,198		74,929
Residential	1,444		3,148		1,392		5,984
Commercial	—		799		9,757		10,556
Total construction loans	34,806		29,316		27,347		91,469
Residential	6,901		11,246		8,295		26,442
Agricultural	16,824		11,220		2,532		30,576
Total real estate loans	174,071		194,805		57,575		426,451
Consumer:
Indirect consumer	964		1,682		96		2,742
Other consumer	853		1,583		552		2,988
Credit card	—		358		2,319		2,677
Total consumer loans	1,817		3,623		2,967		8,407
Commercial	43,282		29,318		5,225		77,825
Agricultural	4,136		2,080		412		6,628
Total	$	223,306	$	229,826	$	66,179	$	519,311

19

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

As of December 31, 2011	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	129,046	$	153,320	$	25,087	$	307,453
Construction:
Land acquisition & development	37,294		31,873		38,761		107,928
Residential	9,448		5,528		2,044		17,020
Commercial	—		2,620		21,916		24,536
Total construction loans	46,742		40,021		62,721		149,484
Residential	8,149		15,706		15,140		38,995
Agricultural	16,037		18,498		395		34,930
Total real estate loans	199,974		227,545		103,343		530,862
Consumer:
Indirect consumer	1,141		1,729		247		3,117
Other consumer	745		1,361		674		2,780
Credit card	—		486		2,789		3,275
Total consumer loans	1,886		3,576		3,710		9,172
Commercial	34,698		33,478		12,849		81,025
Agricultural	4,345		5,195		263		9,803
Total	$	240,903	$	269,794	$	120,165	$	630,862

The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.

20

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

(4) Allowance For Loan Losses

The following tables present a summary of changes in the allowance for loan losses by portfolio segment for the periods indicated.

Three Months Ended September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
Provision charged to operating expense	5,371			192			4,222			(285		)	—		9,500
Less loans charged-off	(9,138		)	(1,340		)	(4,335		)	—			—		(14,813		)
Add back recoveries of loans previously    charged-off	387			465			666			7			—		1,525
Ending balance	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
Nine Months Ended September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	87,396		$	8,594		$	15,325		$	1,266		$	—	$	112,581
Provision charged to operating expense	22,172			385			10,530			(337		)	—		32,750
Less loans charged-off	(36,645		)	(3,862		)	(10,028		)	(110		)	—		(50,645		)
Add back recoveries of loans previously    charged-off	1,420			1,474			1,401			25			—		4,320
Ending balance	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
As of September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	11,348		$	—		$	2,924		$	412		$	—	$	14,684
Loans collectively evaluated for impairment	62,995			6,591			14,304			432			—		84,322
Allowance for loan losses	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
As of September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	140,460		$	—		$	13,408		$	590		$	—	$	154,458
Collectively evaluated for impairment	2,600,908			629,757			658,692			134,877			1,359		4,025,593
Total loans	$	2,741,368		$	629,757		$	672,100		$	135,467		$	1,359	$	4,180,051

Three Months Ended September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	90,243		$	8,526		$	24,434		$	1,376		$	—	$	124,579
Provision charged to operating expense	9,984			1,676			2,206			134			—		14,000
Less loans charged-off	(12,210		)	(1,682		)	(6,498		)	(15		)	—		(20,405		)
Add back recoveries of loans previously    charged-off	1,386			453			287			3			—		2,129
Ending balance	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303

21

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

Nine Months Ended September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	84,181		$	9,332		$	25,354		$	1,613		$	—	$	120,480
Provision charged to operating expense	33,080			2,927			8,461			(68		)	—		44,400
Less loans charged-off	(29,598		)	(4,641		)	(14,547		)	(60		)	—		(48,846		)
Add back recoveries of loans previously    charged-off	1,740			1,355			1,161			13			—		4,269
Ending balance	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303
As of September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	27,344		$	—		$	9,422		$	239		$	—	$	37,005
Loans collectively evaluated for impairment	62,059			8,973			11,007			1,259			—		83,298
Allowance for loan losses	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303
As of September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	223,386		$	—		$	31,470		$	880		$	—	$	255,736
Collectively evaluated for impairment	2,582,202			627,139			671,540			135,848			3,252		4,019,981
Total loans	$	2,805,588		$	627,139		$	703,010		$	136,728		$	3,252	$	4,275,717

The Company performs a quarterly assessment of the adequacy of its allowance for loan losses in accordance with generally accepted accounting principles. The methodology used to assess the adequacy is consistently applied to the Company's loan portfolio and consists of three elements: (1) specific valuation allowances based on probable losses on impaired loans; (2) historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends; and (3) general valuation allowances determined based on changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, general economic conditions and other qualitative risk factors both internal and external to the Company.

Specific allowances are established for loans where management has determined that probability of a loss exists by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies and any relevant qualitative or economic factors impacting the loan. Historical valuation allowances are determined by applying percentage loss factors to the credit exposures from outstanding loans. For commercial, agricultural and real estate loans, loss factors are applied based on the internal risk classifications of these loans. For consumer loans, loss factors are applied on a portfolio basis. For commercial, agriculture and real estate loans, loss factor percentages are based on a migration analysis of our historical loss experience, designed to account for credit deterioration. For consumer loans, loss factor percentages are based on a one-year loss history. General valuation allowances are determined by evaluating, on a quarterly basis, changes in the nature and volume of the loan portfolio, overall portfolio quality, industry concentrations, current economic and regulatory conditions and the estimated impact of these factors on historical loss rates.

22

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

(5) Other Real Estate Owned

Information with respect to the Company's other real estate owned follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	53,817		$	28,323		$	37,452		$	33,632
Additions	3,816			3,385			36,933			9,148
Capitalized improvements	—			—			75			15
Valuation adjustments	(2,310		)	(2,457		)	(3,457		)	(5,972		)
Dispositions	(15,352		)	(4,171		)	(31,032		)	(11,743		)
Ending balance	$	39,971		$	25,080		$	39,971		$	25,080

(6) Subordinated Debentures Held by Subsidiary Trusts

On June 26, 2012, the Company redeemed 30-year junior subordinated deferrable interest debentures ("Subordinated Debentures") issued by the Company to First Interstate Statutory Trust I ("FIST"). The redemption price of $41,238 was equal to the $1 liquidation amount of each security plus all accrued and unpaid distributions up to the date of redemption. Unamortized issuance costs of $428 were charged to other expense on the date of redemption.

The redemption of the Subordinated Debentures caused a mandatory redemption of $40,000 of 30-year floating rate mandatorily redeemable capital trust preferred securities issued by FIST to third-party investors and $1,238 of common equity securities issued by FIST to the Company.

(7) Common Stock

The Company had 17,019,375 and 16,443,429 shares of Class A common stock outstanding as of September 30, 2012 and December 31, 2011, respectively.

The Company had 26,233,008 and 26,540,745 shares of Class B common stock outstanding as of September 30, 2012 and December 31, 2011, respectively.

(8) Earnings per Common Share

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period presented, excluding unvested restricted stock. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares determined for the basic earnings per share computation plus the dilutive effects of stock-based compensation using the treasury stock method.

23

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The following table sets forth the computation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2012 and 2011.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net income	$	16,155	$	11,921	$	41,379	$	31,281
Less preferred stock dividends	863		862		2,569		2,559
Net income available to common shareholders, basic and diluted	$	15,292	$	11,059	$	38,810	$	28,722
Weighted average common shares outstanding for basic earnings per share computation	42,989,564		42,774,259		42,943,588		42,737,986
Dilutive effects of stock-based compensation	130,513		67,404		102,968		111,368
Weighted average common shares outstanding for diluted earnings per common share computation	43,120,077		42,841,663		43,046,556		42,849,354
Basic earnings per common share	$	0.36	$	0.26	$	0.90	$	0.67
Diluted earnings per common share	$	0.35	$	0.26	$	0.90	$	0.67

The Company had 2,814,277 and 2,888,192 stock options outstanding as of September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per common share because their effect would be anti-dilutive. The Company had 48,196 and 33,068 shares of unvested restricted stock as of September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per common share because performance conditions for vesting had not been met.

(9) Regulatory Capital

The Company is subject to the regulatory capital requirements administered by federal banking regulators and the Federal Reserve. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and tier 1 capital to risk-weighted assets, and of tier 1 capital to average assets, as defined in the regulations. As of September 30, 2012 and December 31, 2011, the Company exceeded all capital adequacy requirements to which it is subject.

24

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

Actual capital amounts and ratios and selected minimum regulatory thresholds for the Company and its bank subsidiary, First Interstate Bank (“FIB”), as of September 30, 2012 and December 31, 2011 are presented in the following table:

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2012
Total risk-based capital:
Consolidated	$	790,896	16.5	%	$	382,980	8.0	%	NA		NA
FIB	687,085		14.4		381,297		8.0		$	476,621	10.0	%
Tier 1 risk-based capital:
Consolidated	695,572		14.5		191,490		4.0		NA		NA
FIB	612,021		12.8		190,648		4.0		$	285,973	6.0
Leverage capital ratio:
Consolidated	695,572		9.6		291,093		4.0		NA		NA
FIB	612,021		8.4		290,214		4.0		$	362,768	5.0

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2011
Total risk-based capital:
Consolidated	$	800,354	16.5	%	$	387,082	8.0	%	NA		NA
FIB	663,860		13.8		384,987		8.0		$	481,234	10.0	%
Tier 1 risk-based capital:
Consolidated	704,229		14.6		193,541		4.0		NA		NA
FIB	588,059		12.2		192,494		4.0		$	288,740	6.0
Leverage capital ratio:
Consolidated	704,229		9.8		286,303		4.0		NA		NA
FIB	588,059		8.2		285,358		4.0		$	356,698	5.0

(10) Commitments and Contingencies

In the normal course of business, the Company is involved in various claims and litigation. In the opinion of management, following consultation with legal counsel, the ultimate liability or disposition thereof is not expected to have a material adverse effect on the consolidated financial condition, results of operations or liquidity of the Company.

The Company had commitments under construction contracts of $867 as of September 30, 2012.

The Company had commitments to purchase held-to-maturity municipal securities of $988 as of September 30, 2012.

(11) Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At September 30, 2012, commitments to extend credit to existing and new borrowers approximated $1,120,190 which included $301,647 on unused credit card lines and $290,844 with commitment maturities beyond one year.

25

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. At September 30, 2012, the Company had outstanding standby letters of credit of $68,895. The estimated fair value of the obligation undertaken by the Company in issuing the standby letters of credit is included in other liabilities in the Company’s consolidated balance sheet.

(12) Supplemental Disclosures to Consolidated Statement of Cash Flows

The Company transferred loans of $36,933 and $9,148 to OREO during the nine months endedSeptember 30, 2012 and 2011, respectively.

The Company transferred internally originated mortgage servicing rights of $3,344 and $1,850 from loans to mortgage servicing assets during the nine months endedSeptember 30, 2012 and 2011, respectively.

The Company transferred land pending disposal with a book value of $566 to other assets during the nine months endedSeptember 30, 2012.

The Company transferred premises and equipment pending disposal with a book value of $1,513 to other assets during the nine months endedSeptember 30, 2011.

The Company transferred accrued liabilities of $195 to common stock in conjunction with the vesting of liability-classified non-vested stock awards during the nine months endedSeptember 30, 2011.

(13) Other Comprehensive Income

The gross amounts of each component of other comprehensive income and the related tax effects are as follows:

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Three Months Ended September 30,	2012			2011			2012			2011			2012			2011
Investment securities available-for sale:
Change in net unrealized gain during period	$	931		$	2,781		$	366		$	1,094		$	565		$	1,687
Reclassification adjustment for net gains included in net income	(66		)	(38		)	(26		)	(15		)	(40		)	(23		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	35			35			14			14			21			21
Total other comprehensive income	$	900		$	2,778		$	354		$	1,093		$	546		$	1,685
	Pre-tax						Tax Expense (Benefit)						Net of Tax
Nine Months Ended September 30,	2012			2011			2012			2011			2012			2011
Investment securities available-for sale:
Change in net unrealized gain during period	$	(175	)	$	24,200		$	(69	)	$	9,522		$	(106	)	$	14,678
Reclassification adjustment for net gains included in net income	(295		)	(56		)	(116		)	(22		)	(179		)	(34		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	102			104			40			41			62			63
Total other comprehensive income	$	(368	)	$	24,248		$	(145	)	$	9,541		$	(223	)	$	14,707

26

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The components of accumulated other comprehensive income, net of income taxes, are as follows:

	September 30, 2012			December 31, 2011
Net unrealized gain on investment securities available-for-sale	$	20,248		$	20,533
Net actuarial loss on defined benefit post-retirement benefit plans	(1,437		)	(1,499		)
Net accumulated other comprehensive income	$	18,811		$	19,034

(14) Fair Value Measurements

Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale:
Obligations of U.S. government agencies	$	919,285	$	—	$	919,285	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,059,261		—		1,059,261		—
Private mortgage-backed securities	608		—		608		—
Mortgage servicing rights	14,082		—		14,082		—

			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale:
Obligations of U.S. government agencies	$	1,138,118	$	—	$	1,138,118	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	877,997		—		877,997		—
Private mortgage-backed securities	749		—		749		—
Mortgage servicing rights	11,910		—		11,910		—
Derivative liability contract	383		—		—		383

The following table reconciles the beginning and ending balances of the derivative liability contract measured at fair value on a recurring basis using significant unobservable (Level 3) inputs during the nine months ended September 30, 2012 and 2011:

Nine Months Ended September 30,	2012			2011
Balance, beginning of period	$	383		$	86
Accruals during the period	—			164
Cash payments during the period	(383		)	(128		)
Balance, end of period	$	—		$	122

There were no transfers between levels of the fair value hierarchy during the nine months endedSeptember 30, 2012 or 2011.

27

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The methodologies used by the Company in determining the fair values of each class of financial instruments are based primarily on the use of independent, market-based data to reflect a value that would be reasonably expected in an orderly transaction between market participants at the measurement date. The Company obtains fair value measurements for investment securities from an independent pricing service and evaluates mortgage servicing rights for impairment using an independent valuation service. The vendors chosen by the Company are widely recognized vendors whose evaluations support the pricing functions of financial institutions, investment and mutual funds, and portfolio managers. The Company has documented and evaluated the pricing methodologies used by the vendors and maintains internal processes that regularly test valuations. These internal processes include obtaining and reviewing available reports on internal controls, evaluating the prices for reasonableness given market changes, obtaining and evaluating the inputs used in the model for a sample of securities, investigating anomalies and confirming determinations through discussions with the vendor. For investment securities, if needed, a broker may be utilized to determine the reported fair value. Further details on the methods used to estimate the fair value of each class of financial instruments above are discussed below:

Investment Securities Available-for-Sale. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the investment's terms and conditions, among other things.

Mortgage Servicing Rights. Mortgage servicing rights are initially recorded at fair value based on comparable market quotes and are amortized in proportion to and over the period of estimated net servicing income. Mortgage servicing rights are evaluated quarterly for impairment using an independent valuation service. The valuation service utilizes discounted cash flow modeling techniques, which consider observable data that includes market consensus prepayment speeds and the predominant risk characteristics of the underlying loans including loan type, note rate and loan term. Management believes the significant inputs utilized in the valuation model are observable in the market.

Derivative Liability Contract. In conjunction with the sale of all of its Class B shares of Visa, Inc. (“Visa”) common stock in 2009, the Company entered into a derivative liability contract with the purchaser whereby the Company will make or receive cash payments based on subsequent changes in the conversion rate of the Class B shares into Class A shares of Visa. The conversion rate is dependent upon the resolution of certain litigation involving Visa U.S.A. Inc. card association or its affiliates. The fair value of the derivative liability contract is estimated utilizing an internal valuation model with significant unobservable inputs including the Company's expectations regarding the ultimate resolution of the Visa litigation and loss severity in the event of unfavorable litigation outcomes. The probability of unfavorable litigation outcomes and the estimation of loss severity is determined through review of Visa's press releases and public filings made with the Securities and Exchange Commission and management's estimation of the effect of changes in litigation status on the value of the derivative liability contract. On July 13, 2012, Visa entered into a memorandum of understanding to enter into a proposed settlement of certain litigation. If approved, the proposed settlement will not result in additional material liability to the Company.

Additionally, from time to time, certain assets are measured at fair value on a non-recurring basis. Adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment.

28

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The following table presents information about the Company’s assets and liabilities measured at fair value on a non-recurring basis.

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	66,555	$	—	$	—	$	66,555
Other real estate owned	17,089		—		—		17,089
Long-lived assets to be disposed of by sale	496		—		496		—
			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	100,035	$	—	$	—	$	100,035
Other real estate owned	17,000		—		—		17,000

Impaired Loans. Collateralized impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral. The impaired loans are reported at fair value through specific valuation allowance allocations. In addition, when it is determined that the fair value of an impaired loan is less than the recorded investment in the loan, the carrying value of the loan is adjusted to fair value through a charge to the allowance for loan losses. Collateral values are estimated using independent appraisals and management estimates of current market conditions. As of September 30, 2012, certain impaired loans with a carrying value of $106,388 were reduced by specific valuation allowance allocations of $13,671 and partial loan charge-offs of $26,162 resulting in a reported fair value of $66,555. As of December 31, 2011, certain impaired loans with a carrying value of $167,078 were reduced by specific valuation allowance allocations of $32,838 and partial loan charge-offs of $34,205 resulting in a reported fair value of $100,035.

OREO.The fair values of OREO are estimated using independent appraisals and management estimates of current market conditions. Upon initial recognition, write-downs based on the foreclosed asset's fair value at foreclosure are reported through charges to the allowance for loan losses. Periodically, the fair value of foreclosed assets is remeasured with any subsequent write-downs charged to OREO expense in the period in which they are identified. Write-downs of $3,457 during the nine months ended September 30, 2012 included adjustments of $625 directly related to receipt of updated appraisals and $2,832 based on management estimates of the current fair value of properties. Write-downs of $5,972 during the nine months ended September 30, 2011 included adjustments of $3,521 directly related to receipt of updated appraisals and $2,451 based on management estimates of the current fair value of properties.

Long-lived Assets to be Disposed of by Sale. Long-lived assets to be disposed of by sale are carried at the lower of carrying value or fair value less estimated costs to sell. The fair values of long-lived assets to be disposed of by sale are based upon observable market data and management estimates of current market conditions. As of September 30, 2012, a long-lived asset to be disposed of by sale with a carrying value of $566 was reduced by write-downs of $70 charged to other expense resulting in a reported fair value of $496. As of December 31, 2011, the Company had a long-lived asset to be disposed of by sale of $1,513 that was carried at cost.

In addition, mortgage loans held for sale are required to be measured at the lower of cost or fair value. The fair value of mortgage loans held for sale is based upon binding contracts or quotes or bids from third party investors. As of September 30, 2012 and December 31, 2011, all mortgage loans held for sale were recorded at cost.

29

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The Company is required to disclose the fair value of financial instruments for which it is practical to estimate fair value. The methodologies for estimating the fair value of financial instruments that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for estimating the fair value of other financial instruments are discussed below. For financial instruments bearing a variable interest rate where no credit risk exists, it is presumed that recorded book values are reasonable estimates of fair value.

Financial Assets. Carrying values of cash, cash equivalents and accrued interest receivable approximate fair values due to the liquid and/or short-term nature of these instruments. Fair values for investment securities held-to-maturity are obtained from an independent pricing service, which considers observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the investment’s terms and conditions, among other things. Fair values of fixed rate loans and variable rate loans that reprice on an infrequent basis are estimated by discounting future cash flows using current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality. Carrying values of variable rate loans that reprice frequently, and with no change in credit risk, approximate the fair values of these instruments.

Financial Liabilities. The fair values of demand deposits, savings accounts, securities sold under repurchase agreements and accrued interest payable are the amount payable on demand at the reporting date. The fair values of fixed-maturity certificates of deposit are estimated using external market rates currently offered for deposits with similar remaining maturities. The carrying values of the interest bearing demand notes to the United States Treasury are deemed an approximation of fair values due to the frequent repayment and repricing at market rates. The fair value of the derivative contract was estimated by discounting cash flows using assumptions regarding the expected outcome of related litigation. The floating rate term notes, floating rate subordinated debentures, floating rate subordinated term loan and unsecured demand notes bear interest at floating market rates and, as such, carrying amounts are deemed to approximate fair values. The fair values of notes payable to the FHLB, fixed rate subordinated term debt, fixed rate subordinated debentures and capital lease obligation are estimated by discounting future cash flows using current rates for advances with similar characteristics.

Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit, based on fees currently charged to enter into similar agreements, is not significant.

30

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

The estimated fair values of financial instruments that are reported at amortized cost in the Company's consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:

					Fair Value Measurements at Reporting Date Using
As of September 30, 2012	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	611,335	$	611,335	$	—	$	611,335	$	—
Investment securities available-for-sale	1,979,154		1,979,154		—		1,979,154		—
Investment securities held-to-maturity	187,573		199,078		—		199,078		—
Accrued interest receivable	33,416		33,416		—		33,416		—
Mortgage servicing rights, net	12,334		14,082		—		14,082		—
Net loans	4,081,045		4,067,457		—		4,000,902		66,555
Total financial assets	$	6,904,857	$	6,904,522	$	—	$	6,837,967	$	66,555
Financial liabilities:
Total deposits, excluding time deposits	$	4,612,346	4,612,346		—		4,612,346		—
Time deposits	1,423,386		1,431,066		—		1,431,066		—
Securities sold under repurchase agreements	460,805		460,805		—		460,805		—
Other borrowed funds	6		6		—		6		—
Accrued interest payable	6,706		6,706		—		6,706		—
Long-term debt	37,170		34,003		—		34,003		—
Subordinated debentures held by subsidiary    trusts	82,477		57,656		—		57,656		—
Total financial liabilities	$	6,622,896	$	6,602,588	$	—	$	6,602,588	$	—

31

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

					Fair Value Measurements at Reporting Date Using
As of December 31, 2011	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	472,447	$	472,447	$	—	$	472,447	$	—
Investment securities available-for-sale	2,016,864		2,016,864		—		2,016,864		—
Investment securities held-to-maturity	152,781		161,877		—		161,877		—
Accrued interest receivable	31,974		31,974		—		31,974		—
Mortgage servicing rights, net	11,555		11,910		—		11,910		—
Net loans	4,073,968		4,064,718		—		3,964,683		100,035
Total financial assets	$	6,759,589	$	6,759,790	$	—	$	6,659,755	$	100,035
Financial liabilities:
Total deposits, excluding time deposits	$	4,269,631	$	4,269,631	$	—	$	4,269,631	$	—
Time deposits	1,557,340		1,565,558		—		1,565,558		—
Securities sold under repurchase agreements	516,243		516,243		—		516,243		—
Other borrowed funds	7		7		—		7		—
Accrued interest payable	8,123		8,123		—		8,123		—
Long-term debt	37,200		34,341		—		34,341		—
Subordinated debentures held by subsidiary    trusts	123,715		102,525		—		102,525		—
Derivative contract liability	383		383		—		—		383
Total financial liabilities	$	6,512,642	$	6,496,811	$	—	$	6,496,428	$	383

(15) Recent Authoritative Accounting Guidance

ASU No. 2011-03, "Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements." Accounting Standards Update (“ASU”) No. 2011-03 is intended to improve financial reporting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU No. 2011-03 removes from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. The provisions of ASU No. 2011-03 became effective for the Company on January 1, 2012 and did not impact the Company's consolidated financial statements, results of operations or liquidity.

ASU No. 2011-04, "Fair Value Measurements (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs." ASU No. 2011-04 amends Topic 820, "Fair Value Measurements and disclosures," to converge the fair value measurements guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU No. 2011-04 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-05, “Comprehensive Income (Topic 220) - Presentation of Comprehensive Income.” ASU 2011-05 amends Topic 220, “Comprehensive Income,” to require that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. ASU 2011-05 became effective for the Company on January 1, 2012; however, certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 “Comprehensive Income (Topic

32

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share data)

220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05,” as further discussed below. Adoption of the provisions of ASU 2011-05 did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-08, “Intangibles - Goodwill and Other (Topic 350) - Testing Goodwill for Impairment.” ASU 2011-08 amends Topic 350, “Intangibles - Goodwill and Other,” to give entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. ASU 2011-08 is effective for annual and interim impairment tests beginning after December 15, 2011. The adoption of ASU2011-08 did not have a significant impact on the Company's annual impairment test conducted as of July 1, 2012, or on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-11, “Balance Sheet (Topic 210) - “Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and is not expected to have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-12 “Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” ASU 2011-12 defers changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to redeliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. ASU 2011-12 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2012-02 "Intangibles - Goodwill and Other Topics (Topic 350)." ASU 2012-02 amends Topic 350, “Intangibles - Goodwill and Other,” to reduce the cost and complexity of performing an impairment test for indefinite-lived assets by simplifying how an entity tests those assets for impairment and to improve consistency in impairment testing guidance among long-lived asset categories. The amendments in ASU 2012-02 permit an entity to first assess the qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. In addition, ASU 2012-02 provides an entity with an option not to calculate annually the fair value of in indefinite-lived intangible asset if the entity determines that it is not more likely than not that the asset is impaired. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted including for annual and interim impairment test performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued. Adoption of the amendments in ASU 2012-02 will not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

(16) Subsequent Events

Subsequent events have been evaluated for potential recognition and disclosure through the date financial statements were filed with the Securities and Exchange Commission. No events requiring recognition or disclosure were identified.

33

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011, including the audited financial statements contained therein, filed with the Securities and Exchange Commission, or SEC.

When we refer to “we,” “our,” and “us” in this report, we mean First Interstate BancSystem, Inc. and our consolidated subsidiaries, unless the context indicates that we refer only to the parent company, First Interstate BancSystem, Inc.

Cautionary Note Regarding Forward-Looking Statements and Factors that Could Affect Future Results

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are identified as those that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may” or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. The following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this report: credit losses; concentrations of real estate loans; economic and market developments, including inflation; commercial loan risk; adequacy of the allowance for loan losses; impairment of goodwill; changes in interest rates; access to low-cost funding sources; increases in deposit insurance premiums; inability to grow business; adverse economic conditions affecting Montana, Wyoming and western South Dakota; governmental regulation and changes in regulatory, tax and accounting rules and interpretations; sweeping changes in regulation of financial institutions due to passage of the Dodd-Frank Act; changes in or noncompliance with governmental regulations; effects of recent legislative and regulatory efforts to stabilize financial markets; dependence on the Company's management team; ability to attract and retain qualified employees; failure of technology; reliance on external vendors; disruption of vital infrastructure and other business interruptions; illiquidity in the credit markets; inability to meet liquidity requirements; lack of acquisition candidates; failure to manage growth; competition; inability to manage risks in turbulent and dynamic market conditions; ineffective internal operational controls; environmental remediation and other costs; failure to effectively implement technology-driven products and services; litigation pertaining to fiduciary responsibilities; capital required to support the Company's bank subsidiary; soundness of other financial institutions; impact of Basel III capital standards and forthcoming new capital rules proposed for U.S. banks; inability of our bank subsidiary to pay dividends; change in dividend policy; lack of public market for our Class A common stock; volatility of Class A common stock; voting control of Class B stockholders; decline in market price of Class A common stock; dilution as a result of future equity issuances; uninsured nature of any investment in Class A common stock; anti-takeover provisions; controlled company status; subordination of common stock to Company debt; uncertainties associated with introducing new products or lines of business; and, downgrade of the U.S. credit rating.

A more detailed discussion of each of the foregoing risks is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, filed February 28, 2012. These factors and the other risk factors described in the Company's periodic and current reports filed with the SEC from time to time, however, are not necessarily all of the important factors that could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by any of the Company's forward-looking statements. Other unknown or unpredictable factors also could harm the Company's results. Investors and others are encouraged to read the more detailed discussion of the Company's risks contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made and we do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

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Executive Overview

We are a financial and bank holding company headquartered in Billings, Montana. As of September 30, 2012, we had consolidated assets of $7,461 million, deposits of $6,036 million, loans of $4,180 million and total stockholders’ equity of $798 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, tourism, agriculture, healthcare, professional services, education, governmental services, construction, mining, retail and wholesale trade.

Our Business

Our principal business activity is lending to and accepting deposits from individuals, businesses, municipalities and other entities. We derive our income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on investments. We also derive income from non-interest sources such as fees received in connection with various lending and deposit services; 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. Our principal expenses include interest expense on deposits and borrowings, operating expenses, provisions for loan losses and income tax expense.

Our loan portfolio consists of a mix of real estate, consumer, commercial, agricultural and other loans, including fixed and variable rate loans. Our real estate loans comprise commercial real estate, construction (including residential, commercial and land development loans), residential, agricultural and other real estate loans. Fluctuations in the loan portfolio are directly related to the economies of the communities we serve. While each loan originated generally must meet minimum underwriting standards established in our credit policies, lending officers are granted discretion within pre-approved limits in approving and pricing loans to assure that the banking offices are responsive to competitive issues and community needs in each market area. We fund our loan portfolio primarily with the core deposits from our customers, generally without utilizing brokered deposits and with minimal reliance on wholesale funding sources.

Recent Trends and Developments

Asset Quality

Non-performing assets decreased to $203 million, or 4.80% of total loans and OREO, as of September 30, 2012, from $279 million, or 6.60% of total loans and OREO as of December 31, 2011, primarily due to the movement of non-accrual loans out of the loan portfolio through charge-offs or foreclosure.

Provisions for loan losses decreased $4.5 million, or 32.1%, to $9.5 million for the three months ended September 30, 2012, as compared to $14.0 million for the same period in 2011, and $11.7 million, or 26.2%, to $32.8 million for the nine months ended September 30, 2012, as compared to $44.4 million for the same period in 2011. These decreases are reflective of continued improvement in and stabilization of credit quality as evidenced by continuing declining levels of non-performing and criticized loans.

Net Interest Margin

Our net interest margin ratio, on a fully taxable-equivalent, or FTE, basis, decreased 21 basis points to 3.63% for the three months ended September 30, 2012, as compared to 3.84% for the same period in 2011, and 10 basis points to 3.70% for the nine months ended September 30, 2012, from 3.80% during the same period in 2011. These decreases were attributable to lower outstanding loan balances and lower yields earned on our loan and investment portfolios, which were partially offset by reductions in the cost of interest bearing liabilities combined with a continued shift away from higher-costing savings and time deposits to lower-costing demand deposits. During these times of very low interest rates and low loan growth, management expects further compression in the net FTE interest margin ratio in future quarters.

35

Origination and Sale of Residential Mortgage Loans

With market interest rates dipping to record lows, we experienced a 93% increase in residential mortgage loan origination activity during the first nine months of 2012, as compared to the same period in 2011, resulting in significantly higher income from the origination and sale of loans during the three and nine months ended September 30, 2012, as compared to the same periods in the prior year. Income from the origination and sale of loans increased $6.2 million, or 111.6%, to $11.7 million during the three months ended September 30, 2012, compared to $5.5 million during the same period in 2011, and $16.4 million, or 125.5%, to $29.5 million during the nine months ended September 30, 2012, as compared to $13.1 million during the same period in 2011. Loans for new home purchases accounted for 36% of our residential mortgage loan origination dollars during the first nine months of 2012, an increase of 38.3% from the same period in the prior year. While refinancing activity accounted for 64% of our residential mortgage loan origination dollars during the first nine months of 2012, as compared to 49% during the same period in 2011, management does not expect this level of refinancing activity to continue in future quarters.

Regulatory Capital Proposals

On June 4, 2012, the Board of Governors of the Federal Reserve System, or the Board, issued three notices of proposed rulemaking, or NPRs. Taken together, the NPRs would restructure the Board's current regulatory capital rules and revise current regulatory capital requirements to make them consistent with the Basel III capital standards established by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The first NPR is primarily focused on quality and quantity of banking organizations' capital. The NPR introduces a new common equity tier 1 minimum capital requirement of 4.5% of risk-weighted assets and increases the minimum tier 1 capital requirement from 4.0% to 6.0% of risk-weighted assets. The minimum total risk-based capital requirement would remain unchanged at 8.0%. In addition to the minimum common equity tier 1, tier 1 and total risk-based capital requirements, banking organizations would be required to hold a buffer of common equity tier 1 capital in an amount above 2.5% of total risk-weighted assets to avoid restrictions on capital distributions and discretionary bonus payments to executive officers. The NPR also proposes changes to the definition of capital that would prohibit the inclusion in tier 1 capital of instruments that are not perpetual or that permit the accumulation of unpaid dividends or interest, such as trust preferred securities. Additionally, banking organizations would be subject to generally stricter regulatory capital deductions (the majority of which would be taken from common equity tier 1 capital) for mortgage servicing rights, deferred tax assets and certain investments in the capital of unconsolidated financial institutions than under current rules.

The second NPR increases the risk-sensitivity of the Board's general risk-based capital requirements for determining risk-weighted assets by expanding the number of risk-weight categories and increasing the capital required for certain high-risk residential mortgages, higher-risk construction and commercial real estate lending, and certain securitization exposures.

These two NPRs would apply to banks, saving associations and bank holding companies with consolidated assets of $500 million or more, like us, and to savings and loan holding companies. While these rules would be effective as of January 1, 2013, full compliance with most aspects of the rules would phase-in over a seven-year period. The new minimum regulatory capital ratios and changes to the calculation of risk-weighted assets would be required to be fully implemented effective January 1, 2014. The capital conservation buffer framework would phase-in between 2016 and 2018, with full implementation effective January 1, 2019. These NPRs are subject to final rulemaking by the Board and their provisions may change before their implementation. Management believes, as of September 30, 2012, we would meet all capital adequacy requirements under the proposed rules on a fully phased-in basis if such requirements were currently effective.

The third NPR would enhance the risk-sensitivity of the advanced approaches risk-based capital rule, including, among other revisions, revisions to better address counterparty credit risk and interconnectedness among financial institutions and incorporation of the Board's market risk rule into the integrated capital framework that would be established by all three proposed rules. This NPR would generally apply only to large, internationally active banking organizations or banking organizations with significant trading activity and would not impact us as currently proposed.

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Proposed Settlement of Visa Interchange Litigation

On July 13, 2012,Visa, MasterCard and U.S. financial institution defendants signed a memorandum of understanding to enter into a settlement agreement to resolve a class-action lawsuit alleging collusion between the defendant banks and the credit card companies to maintain higher credit card interchange fees. Under the terms of the proposed settlement, class merchants may receive a distribution equal to 10 basis points of default interchange for a period of eight months, which would effectively reduce interchange fees received by credit card issuers, like us, during that time. Based on current transaction volumes, a 10 basis point reduction in credit interchange fees would not have a material impact on our consolidated financial statements, results of operations or liquidity. The proposed settlement agreement was submitted for preliminary federal court approval on October 19, 2012. Assuming the proposed settlement agreement is approved, the eight-month reduction in interchange fees could begin in late 2013.

Primary Factors Used in Evaluating Our Business

As a banking institution, we manage and evaluate various aspects of both our financial condition and our results of operations. We monitor our financial condition and performance on a monthly basis, at our holding company, at the Bank and at each banking office. We evaluate the levels and trends of the line items included in our balance sheet and statements of income, as well as various financial ratios that are commonly used in our industry. We analyze these ratios and financial trends against both our own historical levels and the financial condition and performance of comparable banking institutions in our region and nationally.

Results of Operations

Principal factors used in managing and evaluating our results of operations include return on average assets, net interest income, non-interest income, non-interest expense and net income. Net interest income is affected by the level of interest rates, changes in interest rates and changes in the composition of interest earning assets and interest bearing liabilities. The most significant impact on our net interest income between periods is derived from the interaction of changes in the rates earned or paid on interest earning assets and interest bearing liabilities, which we refer to as interest rate spread. The volume of loans, investment securities and other interest earning assets, compared to the volume of interest bearing deposits and indebtedness, combined with the interest rate spread, produces changes in our net interest income between periods. Non-interest bearing sources of funds, such as demand deposits and stockholders’ equity, also support earning assets. The impact of free funding sources is captured in the net interest margin, which is calculated as net interest income divided by average earning assets. Given the interest free nature of free funding sources, the net interest margin is generally higher than the interest rate spread. We seek to increase our net interest income over time and evaluate our net interest income on factors that include the yields on our loans and other earning assets, the costs of our deposits and other funding sources, the levels of our net interest spread and net interest margin and the provisions for loan losses required to maintain our allowance for loan losses at an adequate level.

We seek to increase our non-interest income over time and we evaluate our non-interest income relative to the trends of the individual types of non-interest income in view of prevailing market conditions.

We seek to manage our non-interest expenses in consideration of the growth of our business and our community banking model that emphasizes customer service and responsiveness. We evaluate our non-interest expense on factors that include our non-interest expense relative to our average assets, our efficiency ratio and the trends of the individual categories of non-interest expense.

Finally, we seek to increase our net income and provide favorable shareholder returns over time, and we evaluate our net income relative to the performance of other banks and bank holding companies on factors that include return on average assets, return on average equity, and consistency and rates of growth in our earnings.

Financial Condition

Principal areas of focus in managing and evaluating our financial condition include liquidity, the diversification and quality of our loans, the adequacy of our allowance for loan losses, the diversification and terms of our deposits and other funding sources, the re-pricing characteristics and maturities of our assets and liabilities, including potential interest rate exposure and the adequacy of our capital levels. We seek to maintain sufficient levels of cash and investment securities to meet potential payment and funding obligations, and we evaluate our liquidity on factors that include the levels of cash and highly liquid assets relative to our liabilities, the quality and maturities of our investment securities, the ratio of loans to deposits and any reliance on brokered certificates of deposit or other wholesale funding sources.

37

We seek to maintain a diverse and high quality loan portfolio and evaluate our asset quality on factors that include the allocation of our loans among loan types, credit exposure to any single borrower or industry type, non-performing assets as a percentage of total loans and OREO, and loan charge-offs as a percentage of average loans. We seek to maintain our allowance for loan losses at a level adequate to absorb probable losses inherent in our loan portfolio at each balance sheet date, and we evaluate the level of our allowance for loan losses relative to our overall loan portfolio and the level of non-performing loans and potential charge-offs.

We seek to fund our assets primarily using core customer deposits spread among various deposit categories, and we evaluate our deposit and funding mix on factors that include the allocation of our deposits among deposit types, the level of our non-interest bearing deposits, the ratio of our core deposits (i.e. excluding time deposits above $100,000) to our total deposits and our reliance on brokered deposits or other wholesale funding sources, such as borrowings from other banks or agencies. We seek to manage the mix, maturities and re-pricing characteristics of our assets and liabilities to maintain relative stability of our net interest rate margin in a changing interest rate environment, and we evaluate our asset-liability management using models to evaluate the changes to our net interest income under different interest rate scenarios.

Finally, we seek to maintain adequate capital levels to absorb unforeseen operating losses and to help support the growth of our balance sheet. We evaluate our capital adequacy using the regulatory and financial capital ratios including leverage capital ratio, tier 1 risk-based capital ratio, total risk-based capital ratio, tangible common equity to tangible assets and tier 1 common capital to total risk-weighted assets.

Critical Accounting Estimates and Significant Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States and follow general practices within the industries in which we operate. Application of these principles requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. The most significant accounting policies we follow are summarized in Notes 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2011.

Our critical accounting estimates are summarized below. Management considers an accounting estimate to be critical if: (1) the accounting estimate requires management to make particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain and (2) changes in the estimate that are reasonably likely to occur from period to period, or the use of different estimates that management could have reasonably used in the current period, would have a material impact on our consolidated financial statements, results of operations or liquidity.

Allowance for Loan Losses

The provision for loan losses creates an allowance for loan losses known and inherent in the loan portfolio at each balance sheet date. The allowance for loan losses represents management’s estimate of probable credit losses inherent in the loan portfolio.

We perform a quarterly assessment of the risks inherent in our loan portfolio, as well as a detailed review of each significant loan with identified weaknesses. Based on this analysis, we record a provision for loan losses in order to maintain the allowance for loan losses at appropriate levels. In determining the allowance for loan losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment and the use of subjective measurements, including management’s assessment of the internal risk classifications of loans, historical loan loss rates, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends and the impact of current local, regional and national economic factors on the quality of the loan portfolio. Changes in these estimates and assumptions are possible and may have a material impact on our allowance, and therefore our consolidated financial statements or results of operations. The allowance for loan losses is maintained at an amount we believe is sufficient to provide for estimated losses inherent in our loan portfolio at each balance sheet date, and fluctuations in the provision for loan losses result from management’s assessment of the adequacy of the allowance for loan losses. Management monitors qualitative and quantitative trends in the loan portfolio, including changes in the levels of past due, internally classified and non-performing loans. Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2011 describes the methodology used to determine the allowance for loan losses. A discussion of the factors driving changes in the amount of the allowance for loan losses is included herein under the heading “Asset Quality."

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Goodwill

The excess purchase price over the fair value of net assets from acquisitions, or goodwill, is evaluated for impairment at least annually and on an interim basis if an event or circumstance indicates that it is likely impairment has occurred. In testing for impairment, the fair value of net assets is estimated based on an analysis of our market value, discounted cash flows and peer values. Determining the fair value of goodwill is considered a critical accounting estimate because of its sensitivity to market-based economics. In addition, any allocation of the fair value of goodwill to assets and liabilities requires significant management judgment and the use of subjective measurements. Variability in market conditions and key assumptions or subjective measurements used to estimate and allocate fair value are reasonably possible and could have a material impact on our consolidated financial statements or results of operations. Note 1 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2011 describes our accounting policy with regard to goodwill.

Our annual impairment test is performed each year as of July 1st. Upon completion of this year's annual impairment test, we determined that it is not more likely than not that the fair value of our net assets is less than our carrying value and; therefore, a Step 1 impairment test was not warranted. We will continue to monitor our performance and evaluate our goodwill for impairment annually or more frequently as needed.

Other Real Estate Owned

Real estate acquired in satisfaction of loans is initially carried at current fair value less estimated selling costs. Any excess of loan carrying value over the fair value of the real estate acquired is recorded as a charge to the allowance for loan losses. Subsequent declines in fair value less estimated selling costs are included in OREO expense. Subsequent increases in fair value less estimated selling costs are recorded as a reduction in OREO expense to the extent of recognized losses. Determining the fair value of OREO is considered a critical accounting estimate due to the assets’ sensitivity to changes in estimates and assumptions used. Changes in these estimates and assumptions are reasonably possible and may have a material impact on our consolidated financial statements, liquidity or results of operations. Note 1 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2011 describes our accounting policy with regard to OREO.

Results of Operations

The following discussion and analysis is intended to provide greater details of the results of our operations and financial condition.

Net Interest Income. During third quarter 2012, our net interest income on a fully-taxable equivalent, or FTE, basis decreased $2.4 million, or 3.8%, to $62.2 million, as compared to $64.6 million during the same period in 2011, and our net FTE interest margin ratio decreased 21 basis points to 3.63%, as compared to 3.84% during the same period in 2011. For the nine months ended September 30, 2012, our net FTE interest income decreased $5.0 million, or 2.6%, to $186.3 million, as compared to $191.2 million during the same period in 2011, and our net FTE interest margin ratio decreased 10 basis points to 3.70%, as compared to 3.80% during the same period in 2011. Decreases in net FTE interest income and net FTE interest margin ratio were attributable to lower outstanding loan balances and lower yields earned on our loan and investment portfolios, which were partially offset by reductions in the cost of interest bearing liabilities combined with a continued shift away from higher-costing savings and time deposits to lower-costing demand deposits. During these times of very low interest rates and low loan growth, management expects further compression in the net FTE interest margin ratio in future quarters.

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The following tables present, for the periods indicated, condensed average balance sheet information, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest bearing liabilities.

Average Balance Sheets, Yields and Rates
(Dollars in thousands)	Three Months Ended September 30,
	2012							2011
	Average Balance		Interest			Average Rate		Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1) (2)	$	4,183,016	$	57,872		5.50	%	$	4,291,632	$	61,801		5.71	%
Investment securities (2)	2,098,576		11,123			2.11		2,064,019		12,594			2.42
Interest bearing deposits in banks	525,149		336			0.25		311,768		200			0.25
Federal funds sold	3,006		4			0.53		1,858		2			0.43
Total interest earnings assets	6,809,747		69,335			4.05		6,669,277		74,597			4.44
Non-earning assets	633,551							615,472
Total assets	$	7,443,298						$	7,284,749
Interest bearing liabilities:
Demand deposits	$	1,613,136	$	589		0.15	%	$	1,265,339	$	775		0.24	%
Savings deposits	1,523,347		873			0.23		1,712,739		1,478			0.34
Time deposits	1,452,688		3,952			1.08		1,699,633		5,652			1.32
Repurchase agreements	501,640		144			0.11		477,612		137			0.11
Other borrowed funds	6		—			—		5,584		—			—
Long-term debt	37,174		502			5.37		37,473		498			5.27
Subordinated debentures held by subsidiary trusts	82,477		1,110			5.35		123,715		1,451			4.65
Total interest bearing liabilities	5,210,468		7,170			0.55		5,322,095		9,991			0.74
Non-interest bearing deposits	1,399,585							1,153,800
Other non-interest bearing liabilities	43,511							47,412
Stockholders’ equity	789,734							761,442
Total liabilities and stockholders’ equity	$	7,443,298						$	7,284,749
Net FTE interest income			$	62,165						$	64,606
Less FTE adjustments (2)			(1,160		)					(1,114		)
Net interest income from consolidated statements of income			$	61,005						$	63,492
Interest rate spread						3.50	%						3.70	%
Net FTE interest margin (3)						3.63	%						3.84	%
Cost of funds, including non-interest bearing demand deposits (4)						0.43	%						0.61	%

(1) Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.

(2) Interest income and average rates for tax exempt loans and securities are presented on a FTE basis.

(3) Net FTE interest margin during the period equals (i) the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

(4) Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.

40

Average Balance Sheets, Yields and Rates
(Dollars in thousands)	Nine Months Ended September 30,
	2012							2011
	Average Balance		Interest			Average Rate		Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1) (2)	$	4,169,311	$	174,809		5.60	%	$	4,288,237	$	186,564		5.82	%
Investment securities (2)	2,112,005		34,141			2.16		2,010,966		36,885			2.45
Interest bearing deposits in banks	447,865		852			0.25		418,661		794			0.25
Federal funds sold	2,430		11			0.60		2,656		11			0.55
Total interest earnings assets	6,731,611		209,813			4.16		6,720,520		224,254			4.46
Non-earning assets	628,732							618,367
Total assets	$	7,360,343						$	7,338,887
Interest bearing liabilities:
Demand deposits	$	1,597,397	$	1,842		0.15	%	$	1,259,421	$	2,456		0.26	%
Savings deposits	1,485,330		2,821			0.25		1,722,782		5,231			0.41
Time deposits	1,496,531		12,792			1.14		1,784,256		18,992			1.42
Repurchase agreements	502,828		452			0.12		505,313		545			0.14
Other borrowed funds	24		—			—		5,579		—			—
Long-term debt	37,184		1,495			5.37		37,485		1,482			5.29
Subordinated debentures held by subsidiary trusts	108,966		4,084			5.01		123,715		4,354			4.71
Total interest bearing liabilities	5,228,260		23,486			0.60		5,438,551		33,060			0.81
Non-interest bearing deposits	1,303,535							1,105,122
Other non-interest bearing liabilities	47,108							48,726
Stockholders’ equity	781,440							746,488
Total liabilities and stockholders’ equity	$	7,360,343						$	7,338,887
Net FTE interest income			$	186,327						$	191,194
Less FTE adjustments (2)			(3,514		)					(3,377		)
Net interest income from consolidated statements of income			$	182,813						$	187,817
Interest rate spread						3.56	%						3.65	%
Net FTE interest margin (3)						3.70	%						3.80	%
Cost of funds, including non-interest bearing demand deposits (4)						0.48	%						0.68	%

(1) Average loan balances include non-accrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.

(2) Interest income and average rates for tax exempt loans and securities are presented on a FTE basis.

(3) Net FTE interest margin during the period equals (i) the difference between annualized interest income on interest earning assets and the annualized interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

(4) Calculated by dividing total annualized interest on interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.

41

The table below sets forth, for the periods indicated, a summary of the changes in interest income and interest expense resulting from estimated changes in average asset and liability balances (volume) and estimated changes in average interest rates (rate). Changes which are not due solely to volume or rate have been allocated to these categories based on the respective percent changes in average volume and average rate as they compare to each other.

Analysis of Interest Changes Due to Volume and Rates
(Dollars in thousands)	Three Months Ended September 30, 2012 compared with Three Months Ended September 30, 2011									Nine Months Ended September 30, 2012 compared with Nine Months Ended September 30, 2011
	Volume			Rate			Net			Volume			Rate			Net
Interest earning assets:
Loans (1)	$	(1,547	)	$	(2,382	)	$	(3,929	)	$	(3,430	)	$	(8,325	)	$	(11,755	)
Investment securities (1)	209			(1,680		)	(1,471		)	1,229			(3,973		)	(2,744		)
Interest bearing deposits in banks	135			1			136			37			21			58
Federal funds sold	1			1			2			(1		)	1			—
Total change	(1,202		)	(4,060		)	(5,262		)	(2,165		)	(12,276		)	(14,441		)
Interest bearing liabilities:
Demand deposits	211			(397		)	(186		)	437			(1,051		)	(614		)
Savings deposits	(162		)	(443		)	(605		)	(478		)	(1,932		)	(2,410		)
Time deposits	(812		)	(888		)	(1,700		)	(2,031		)	(4,169		)	(6,200		)
Repurchase agreements	7			—			7			(2		)	(91		)	(93		)
Long-term debt	(4		)	8			4			(8		)	21			13
Subordinated debentures	(478		)	137			(341		)	(344		)	74			(270		)
Total change	(1,238		)	(1,583		)	(2,821		)	(2,426		)	(7,148		)	(9,574		)
Increase (decrease) in FTE net interest income	$	36		$	(2,477	)	$	(2,441	)	$	261		$	(5,128	)	$	(4,867	)

(1)Interest income for tax exempt loans and securities are presented on a FTE basis.

Provision for Loan Losses. The provision for loan losses decreased $4.5 million, or 32.1%, to $9.5 million for the three months ended September 30, 2012, compared to $14.0 million for the same period in 2011, and decreased $11.7 million, or 26.2%, to $32.8 million for the nine months ended September 30, 2012, compared to $44.4 million during the same period in 2011. Decreases in the provision for loan losses are reflective of improvement in and stabilization of credit quality as evidenced by declining levels of non-performing and criticized loans. For information regarding our non-performing loans, see “Non-Performing Assets” included herein.

Non-interest Income. Our principal sources of non-interest income include other service charges, commissions and fees; income from the origination and sale of loans; service charges on deposit accounts; and, wealth management revenues. Non-interest income increased $7.1 million, or 30.5%, to $30.2 million for the three months ended September 30, 2012, as compared to $23.1 million for the same period in 2011, and $19.4 million, or 29.8%, to $84.2 million during the nine months ended September 30, 2012, as compared to $64.9 million during the same period in 2011. Significant components of these increases are discussed below.

Income from the origination and sale of loans increased $6.2 million, or 111.6%, to $11.7 million during the three months ended September 30, 2012, compared to $5.5 million during the same period in 2011, and $16.4 million, or 125.5%, to $29.5 million during the nine months ended September 30, 2012, as compared to $13.1 million during the same period in 2011. Record low mortgage interest rates continued to spur residential mortgage loan originations in our market areas during the first nine months of 2012, resulting in higher income from the origination and sale of loans.

Other service charges, commissions and fees primarily include debit and credit card interchange income, mortgage servicing fees, insurance and other commissions and ATM service charge revenues. Other service charges, commissions and fees increased $295 thousand, or 3.5%, to $8.8 million during the three months ended September 30, 2012, as compared to $8.5 million during the same period in 2011, and $1.8 million, or 7.7%, to $25.5 million during the nine months ended September 30, 2012, as compared to $23.6 million during the same period in 2011. These increases were primarily due to higher credit and debit card interchange fee revenue resulting from higher transaction volumes.

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Wealth management revenues are comprised principally of fees earned for management of trust assets and investment services revenues. Fees earned for management of trust assets are generally based on the market value of assets managed. Wealth management revenues increased $355 thousand, or 11.1%, to $3.6 million during the three months ended September 30, 2012, as compared to $3.2 million during the same period in 2011, and increased $675 thousand, or 6.8%, to $10.7 million during the nine months ended September 30, 2012, as compared to $10.0 million during the same period in 2011. These increases were primarily due to new business activity combined with increases in the market values of assets under trust management.

Other income increased $440 thousand, or 34.2%, to $1.7 million for the three months ended September 30, 2012, compared to $1.3 million for the same period in 2011. Other income increased $302 thousand, or 6.0% to $5.3 million during the nine months ended September 30, 2012, as compared to $5.0 million during the same period in 2011. Increases in other income during the three and nine months ended September 30, 2012, as compared to the same periods in 2011, were primarily due to increases in earnings on securities held under deferred compensation plans. Also contributing to the increase in other income during the nine months ended September 30, 2012, as compared to the same period in 2011, was a $581 thousand gain on the sale of a bank building recorded during second quarter 2012.

Non-interest Expense. Non-interest expense increased $2.0 million, or 3.7%, to $57.1 million for the three months ended September 30, 2012, as compared to $55.0 million for the same period in 2011, and increased $9.6 million, or 5.9%, to $171.8 million for the nine months ended September 30, 2012, as compared to $162.2 million for the same period in 2011. Significant components of these increases are discussed below.

Salaries and wages increased $2.5 million, or 12.2%, to $23.3 million during the three months ended September 30, 2012, as compared to $20.8 million during the same period in the prior year, and $5.0 million, or 8.1%, to $66.5 million during the nine months ended September 30, 2012, as compared to $61.6 million during the same period in 2011 primarily due to higher incentive bonus accruals, inflationary wage increases and higher commissions and overtime compensation related to the substantial volume of residential real estate loan activity in 2012.

Employee benefits expense increased $1.4 million, or 22.3%, to $7.4 million during the three months ended September 30, 2012, as compared to $6.1 million during same period in 2011, and $2.3 million, or 11.0%, to $23.2 million during the nine months ended September 30, 2012, as compared to $20.9 million during the same period in 2011. These increases were primarily due to increases in the market value of securities held under deferred compensation plans. Also contributing to the increase in employee benefits expense during the nine months ended September 30, 2012, as compared to the same period in 2011, were higher stock-based compensation expense and increases in profit sharing accruals reflective of our improved performance.

OREO expense is recorded net of OREO income. Variations in OREO expense between periods are primarily due to write-downs of the estimated fair values of OREO properties, fluctuations in gains and losses recorded on sales of OREO properties and fluctuations in the carrying costs and/or operating expenses associated with OREO properties. OREO expense, net of income, decreased $266 thousand, or 9.2%, to $2.6 million for the three months ended September 30, 2012, compared to $2.9 million for the same period in 2011, and decreased $1.1 million, or 16.7%, to $5.5 million during the nine months ended September 30, 2012, as compared to $6.6 million for the same period in 2011. Additional carrying costs associated with properties foreclosed during the first nine months of 2012 were more than offset by net gains recorded on the sale of OREO properties during third quarter 2012 and decreases in write-downs of estimated fair value of OREO properties during the three and nine moths ended September, 30, 2012, as compared to the same periods in the prior year.

Professional fees increased $55 thousand, or 5.5%, to $1.1 million during the three months ended September 30, 2012, as compared to $995 thousand during the same period in 2011, and $485 thousand, or 19.4%, to $3.0 million during the nine months ended September 30, 2012, as compared to $2.5 million during the same period in 2011. These increases in professional fees were primarily attributable to additional costs associated with strategic planning initiatives.

Mortgage servicing rights are amortized in proportion to and over the period of estimated servicing income. Changes in estimated servicing period and changes in the serviced loan portfolio cause amortization expense to vary between periods. The period of estimated net servicing income is significantly influenced by market interest rates. Mortgage servicing rights amortization increased $72 thousand, or 8.9%, to $879 thousand during the three months ended September 30, 2012, as compared to $807 thousand during the same period in 2011, and $306 thousand, or 13.4%, to $2.6 million during the nine months ended September 30, 2012, as compared to $2.3 million during the same period in 2011.

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Mortgage servicing rights are evaluated quarterly for impairment. Fluctuations in the fair value of mortgage servicing rights are primarily due to changes in assumptions regarding prepayments of the underlying mortgage loans, which typically correspond with changes in market interest rates. During third quarter 2012, we recorded impairment of $55 thousand, as compared to impairment of $1.2 million during the same period in 2011. During the nine months ended September 30, 2012, we reversed impairment of mortgage servicing rights of $761 thousand, as compared to recording additional impairment of $848 thousand during the same period in 2011.

Other expenses primarily include advertising and public relations costs; office supply, postage, freight and telephone expenses; travel expense; donations expense; debit and credit card expenses; board of director fees; and other losses. Other expenses decreased $382 thousand, or 3.5%, to $10.5 million for the three months ended September 30, 2012, as compared to $10.9 million during the same period in 2011, and increased $5.6 million, or 17.5%, to $37.8 million during the nine months ended September 30, 2012, as compared to $32.2 million during the same period in 2011. During second quarter 2012, we recorded donation expense of $1.5 million in conjunction with the sale of a bank building to a charitable organization. In addition, during second quarter 2012, we expensed unamortized issuance costs of $428 thousand in conjunction with the June 26, 2012 redemption of junior subordinated debentures. Also contributing to the increase in other expenses during the nine months ended September 30, 2012, as compared to the same period in the prior year, were $3.0 million of estimated collection and settlement costs related to one borrower that were recorded as other expense during the first quarter of 2012. For additional information regarding the redemption of junior subordinated debentures, see "Financial Condition – Subordinated Debentures Held by Subsidiary Trusts" included herein and “Note 5 – Subordinated Debentures Held by Subsidiary Trusts” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

Income Tax Expense. Our effective federal income tax rate was 29.2% for the nine months ended September 30, 2012 and 27.6% for the nine months ended September 30, 2011. State income tax applies primarily to pretax earnings generated within Montana and South Dakota. Our effective state tax rate was 4.6% for the nine months ended September 30, 2012 and 2011. Changes in the effective federal income tax rates were primarily fluctuations in tax exempt interest income as a percentage of total income.

Financial Condition

Total assets increased $136 million, or 1.9%, to $7,461 million as of September 30, 2012, from $7,326 million as of December 31, 2011.

Loans. Total loans decreased $6 million, or less than 1%, to $4,180 million as of September 30, 2012, from $4,187 million as of December 31, 2011. Modest growth in residential real estate, agricultural and indirect consumer loans was more than offset primarily by decreases in commercial real estate and land acquisition and development loans. Management attributes these decreases to the movement of lower quality loans out of the loan portfolio through charge-off or foreclosure and low loan demand. Growth in residential real estate loans was primarily due to the retention of selected mortgage loan production.

Non-performing Assets. Non-performing assets include non-accrual loans, loans contractually past due 90 days or more and still accruing interest, loans renegotiated in troubled debt restructurings and OREO. The following table sets forth information regarding non-performing assets as of the dates indicated:

Nonperforming Assets
(Dollars in thousands)	September 30, 2012			June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011
Non-performing loans:
Non-accrual loans	$	122,931		$	129,923		$	180,910		$	199,983		$	223,961
Accruing loans past due 90 days or more	4,339			6,451			5,017			4,111			3,001
Troubled debt restructurings	35,428			35,959			36,838			37,376			35,616
Total non-performing loans	162,698			172,333			222,765			241,470			262,578
OREO	39,971			53,817			44,756			37,452			25,080
Total non-performing assets	$	202,669		$	226,150		$	267,521		$	278,922		$	287,658
Non-performing loans to total loans	3.89		%	4.13		%	5.36		%	5.77		%	6.14		%
Non-performing assets to total loans and OREO	4.80		%	5.35		%	6.36		%	6.60		%	6.69		%
Non-performing assets to total assets	2.72		%	3.10		%	3.60		%	3.81		%	3.94		%

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Non-performing loans. Non-performing loans include non-accrual loans, loans contractually past due 90 days or more and still accruing interest and loans renegotiated in troubled debt restructurings. Impaired loans are a subset of non-performing loans and include all loans risk rated doubtful, loans placed on non-accrual status and loans renegotiated in troubled debt restructurings with the exception of consumer loans. We monitor and evaluate collateral values on impaired loans quarterly. Appraisals are required on all impaired loans every 18-24 months, or sooner as conditions necessitate. We monitor real estate values by market for our larger market areas. Based on trends in real estate values, adjustments may be made to the appraised value based on time elapsed between the appraisal date and the impairment analysis or a new appraisal may be ordered. Appraised values in our smaller market areas may be adjusted based on trends identified through discussions with local realtors and appraisers. Appraisals are also adjusted for selling costs. The adjusted appraised value is then compared to the loan balance and any resulting shortfall is recorded in the allowance for loan losses as a specific valuation allowance. Overall increases in specific valuation allowances will result in higher provisions for loan losses. Provisions for loan losses are also impacted by changes in the historical or general valuation elements of the allowance for loan losses as well.

The following table sets forth the allocation of our non-performing loans among our various loan categories as of the dates indicated:

Non-Performing Loans by Loan Type
(Dollars in thousands)	September 30, 2012		Percent of Total		December 31, 2011		Percent of Total
Real estate:
Commercial	$	79,454	48.8	%	$	86,990	36.0	%
Construction:			.
Land acquisition and development	32,218		19.9	%	63,195		26.2	%
Commercial	10,519		6.5	%	14,023		5.8	%
Residential	3,001		1.8	%	24,536		10.2	%
Total construction	45,738		28.1	%	101,754		42.2	%
Residential	12,945		8.0	%	20,075		8.3	%
Agricultural	5,647		3.5	%	7,470		3.1	%
Total real estate	143,784		88.4	%	216,289		89.6	%
Consumer	3,412		2.1	%	3,455		1.4	%
Commercial	14,685		9.0	%	20,857		8.6	%
Agricultural	817		0.5	%	869		0.4	%
Total non-performing loans	$	162,698	100.0	%	$	241,470	100.0	%

Non-accrual loans. We generally place loans on non-accrual when they become 90 days past due, unless they are well secured and in the process of collection. When a loan is placed on non-accrual status, any interest previously accrued but not collected is reversed from income. If all loans on non-accrual had been current in accordance with their original terms, gross income of approximately $451 thousand and $810 thousand would have been accrued for the three months ended September 30, 2012 and 2011, respectively. If all loans on non-accrual had been current in accordance with their original terms, gross income of approximately $1.7 million and $2.3 million would have been accrued for the nine months ended September 30, 2012 and 2011, respectively.

Non-accrual loans, the largest component of non-performing loans, decreased $77 million, or 38.5%, to $123 million at September 30, 2012, from $200 million at December 31, 2011, primarily due to movement of non-accrual loans out of the loan portfolio due to charge-off or foreclosure. As of September 30, 2012, approximately 42% of our non-accrual loans were commercial real estate loans and approximately 24% were land acquisition and development loans.

Troubled Debt Restructuring. Modifications of performing loans are made on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest-only periods, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and we, for economic or legal reasons, grant a concession to the borrower that we would not otherwise consider. Those modifications deemed to be troubled debt restructurings are monitored centrally to ensure proper classification as a troubled debt restructuring and if or when the loan may be placed on accrual status or removed from impaired loan status.

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We had loans renegotiated in troubled debt restructurings of $90 million as of September 30, 2012, of which $55 million were included in non-accrual loans in the non-performing assets table above and $35 million were on accrual status and reported as troubled debt restructurings in the non-performing assets table above. As of September 30, 2012, approximately 85% of our loans restructured in troubled debt restucturings were performing in accordance with their modified terms.

OREO. OREO consists of real property acquired through foreclosure on the collateral underlying defaulted loans. We initially record OREO at fair value less estimated costs to sell by a charge against the allowance for loan losses. Estimated losses that result from the ongoing periodic valuation of these properties are charged to earnings in the period in which they are identified. The fair values of OREO properties are estimated using appraisals and management estimates of current market conditions. OREO properties are appraised every 18-24 months unless deterioration in local market conditions indicates the need to obtain new appraisals sooner. OREO properties are evaluated by management quarterly to determine if additional write-downs are appropriate or necessary based on current market conditions. Quarterly evaluations include a review of the most recent appraisal of the property and reviews of recent appraisals and comparable sales data for similar properties in the same or adjacent market areas. Commercial and agricultural OREO properties are listed with unrelated third party professional real estate agents or brokers local to the areas where the marketed properties are located. Residential properties are typically listed with local realtors, after any redemption period has expired. We rely on these local real estate agents and/or brokers to list the properties on the local multiple listing system, to provide marketing materials and advertisements for the properties and to conduct open houses.

OREO increased $3 million, or 6.7%, to $40 million as of September 30, 2012 from $37 million as of December 31, 2011. During the first nine months of 2012, we recorded additions to OREO of $37 million, wrote down the fair value of OREO properties by $3 million and sold OREO with a book value of $31 million at a gain of $768 thousand. As of September 30, 2012, the composition of our OREO was as follows: 52% land and land development properties, 21% commercial properties, 25% residential properties and 2% agricultural real estate properties.

Allowance for Loan Losses. The Company performs a quarterly assessment of the adequacy of its allowance for loan losses in accordance with generally accepted accounting principles. The methodology used to assess the adequacy is consistently applied to the Company's loan portfolio. The allowance for loan losses is established through a provision for loan losses based on our evaluation of known and inherent risk in our loan portfolio at each balance sheet date. In determining the allowance for loan losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. The balance of the allowance for loan losses is based on internally assigned risk classifications of loans, historical loan loss rates, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates. See the discussion under “Critical Accounting Estimates and Significant Accounting Policies — Allowance for Loan Losses” above.

The allowance for loan losses is increased by provisions charged against earnings and reduced by net loan charge-offs. Loans, or portions thereof, are charged-off when management believes that the collectibility of the principal is unlikely or, with respect to consumer installment and credit card loans, according to established delinquency schedules.

The allowance for loan losses consists of three elements:

(1) Specific valuation allowances associated with impaired loans. Specific valuation allowances are determined based on assessment of the fair value of the collateral underlying the loans as determined through independent appraisals, the present value of future cash flows, observable market prices and any relevant qualitative or environmental factors impacting the loan. No specific valuation allowances are recorded for impaired loans that are adequately secured.

(2) Historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends. Historical valuation allowances are determined by applying percentage loss factors to the credit exposures from outstanding loans. For commercial, agricultural and real estate loans, loss factors are applied based on the internal risk classifications of these loans. For consumer loans, loss factors are applied on a portfolio basis. For commercial, agriculture and real estate loans, loss factor percentages are based on a migration analysis of our historical loss experience, designed to account for credit deterioration. For consumer loans, loss factor percentages are based on a one-year loss history.

(3) General valuation allowances determined based on changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, general economic conditions and other qualitative risk factors both internal and external to us.

Based on the assessment of the adequacy of the allowance for loan losses, management records provisions for loan losses to maintain the allowance for loan losses at appropriate levels.

46

Loans, or portions thereof, are charged-off against the allowance for loan losses when management believes that the collectability of the principal is unlikely, or, with respect to consumer installment loans, according to an established delinquency schedule. Generally, loans are charged-off when (1) there has been no material principal reduction within the previous 90 days and there is no pending sale of collateral or other assets, (2) there is no significant or pending event which will result in principal reduction within the upcoming 90 days, (3) it is clear that we will not be able to collect all or a portion of the loan, (4) payments on the loan are sporadic, will result in an excessive amortization or are not consistent with the collateral held and (5) foreclosure or repossession actions are pending. Loan charge-offs do not directly correspond with the receipt of independent appraisals or the use of observable market data if the collateral value is determined to be sufficient to repay the principal balance of the loan.

If the impaired loan is adequately collateralized, a specific valuation allowance is not recorded. As such, significant changes in impaired and non-performing loans do not necessarily correspond proportionally with changes in the specific valuation component of the allowance for loan losses. Additionally, management expects the timing of charge-offs will vary between quarters and will not necessarily correspond proportionally to changes in the allowance for loan losses or changes in non-performing or impaired loans due to timing differences among the initial identification of an impaired loan, recording of a specific valuation allowance for the impaired loan and any resulting charge-off of uncollectible principal.

The following table sets forth information regarding our allowance for loan losses as of and for the periods indicated.

Allowance for Loan Losses
(Dollars in thousands)	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Balance at beginning of period	$	102,794		$	115,902		$	112,581		$	120,303		$	124,579
Provision charged to operating expense	9,500			12,000			11,250			13,751			14,000
Charge offs:
Real estate
Commercial	3,058			6,362			681			2,972			4,064
Construction	4,477			15,107			2,571			9,178			7,997
Residential	1,603			861			1,825			3,803			149
Agricultural	1			20			79			213			—
Consumer	1,340			1,210			1,312			1,402			1,682
Commercial	4,334			3,180			2,512			4,785			6,498
Agricultural	—			5			107			82			15
Total charge-offs	14,813			26,745			9,087			22,435			20,405
Recoveries:
Real estate
Commercial	24			483			213			116			41
Construction	260			13			173			227			1,272
Residential	102			30			120			52			73
Agricultural	2			—			—			—			—
Consumer	465			488			521			384			453
Commercial	665			609			126			183			287
Agricultural	7			14			5			—			3
Total recoveries	1,525			1,637			1,158			962			2,129
Net charge-offs	13,288			25,108			7,929			21,473			18,276
Balance at end of period	$	99,006		$	102,794		$	115,902		$	112,581		$	120,303
Period end loans	$	4,180,051		$	4,169,963		$	4,158,616		$	4,186,549		$	4,275,717
Average loans	4,183,016			4,159,565			4,165,203			4,236,228			4,291,632
Net loans charged-off to average loans, annualized	1.26		%	2.42		%	0.76		%	2.01		%	1.69		%
Allowance to period end loans	2.37		%	2.47		%	2.79		%	2.69		%	2.81		%

47

Although we believe that we have established our allowance for loan losses in accordance with accounting principles generally accepted in the United States and that the allowance for loan losses was adequate to provide for known and inherent losses in the portfolio at all times, future provisions will be subject to on-going evaluations of the risks in the loan portfolio. If the economy declines or asset quality deteriorates, material additional provisions could be required.

Investment Securities. We manage our investment portfolio to obtain the highest yield possible, while meeting our risk tolerance and liquidity guidelines and satisfying the pledging requirements for deposits of state and political subdivisions and securities sold under repurchase agreements. Investment securities decreased $3 million, or less than 1%, to $2,167 million, or 29.0% of total assets, as of September 30, 2012, from $2,170 million, or 29.6% of total assets, as of December 31, 2011.         

We evaluate our investment portfolio quarterly for other-than-temporary declines in the market value of individual investment securities. This evaluation includes monitoring credit ratings; market, industry and corporate news; volatility in market prices; and, determining whether the market value of a security has been below its cost for an extended period of time. As of September 30, 2012, we had investment securities with fair values of $850 thousand that had been in a continuous loss position more than twelve months. Gross unrealized losses on these securities totaled $9 thousand as of September 30, 2012, and were attributable to changes in interest rates. No impairment losses were recorded during the three and nine months ended September 30, 2012 and 2011.

Deferred Tax Asset. Our net deferred tax asset decreased $8 million, or 83.0%, to $2 million as of September 30, 2012, from $10 million as of December 31, 2011, primarily due to loan charge-offs, which are deductible currently for income tax purposes.

Deposits. Our deposits consist of non-interest bearing and interest bearing demand, savings, individual retirement and time deposit accounts. Total deposits increased $209 million, or 3.6%, to $6,036 million as of September 30, 2012, from $5,827 million as of December 31, 2011, with a shift in the mix of deposits away from higher-costing time deposits to lower-costing savings, interest bearing demand and non-interest bearing demand deposits. As a result of a regulatory change allowing businesses to receive interest on checking accounts, during first quarter 2012 we discontinued our savings sweep product, which resulted in a shift of approximately $300 million from savings deposits into interest-bearing demand deposits.

The following table summarizes our deposits as of the dates indicated:

Deposits
(Dollars in thousands)	September 30, 2012		Percent of Total		December 31, 2011		Percent of Total
Non-interest bearing demand	$	1,443,773	23.9	%	$	1,271,709	21.8	%
Interest bearing:
Demand	1,637,214		27.1		1,306,509		22.4
Savings	1,531,359		25.4		1,691,413		29.0
Time, $100 and over	613,586		10.2		681,047		11.7
Time, other (1)	809,800		13.4		876,293		15.1
Total interest bearing	4,591,959		76.1		4,555,262		78.2
Total deposits	$	6,035,732	100.0	%	$	5,826,971	100.0	%

(1) Included in Time, other are Certificate of Deposit Account Registry Service, or CDAR, deposits of $76 million as of September 30, 2012 and $98 million as of December 31, 2011.

Repurchase Agreements. In addition to deposits, repurchase agreement with commercial depositors, which include municipalities, provide an additional source of funds. Under repurchase agreements, deposits balances are invested in short-term U.S. government agency securities overnight and are then repurchased the following day. All outstanding repurchase agreements are due in one day. Repurchase agreements decreased $55 million, or 10.7%, to $461 million as of September 30, 2012, from $516 million as of December 31, 2011 due to fluctuations in the liquidity of our customers.

48

Subordinated Debentures Held by Subsidiary Trusts. Subordinated debentures held by subsidiary trusts decreased $41 million, or 33.3%, to $82 million as of September 30, 2012, from $124 million as of December 31, 2011. During second quarter 2012, we redeemed $41 million of junior subordinated deferrable interest debentures, or subordinated debentures, maturing March 26, 2033 and bearing a cumulative floating interest rate equal to LIBOR plus 3.15% per annum. Redemption of the subordinated debentures caused a mandatory redemption of $40 million of floating rate mandatorily redeemable capital trust preferred securities, or trust preferred securities, and all common securities issued by First Interstate Statutory Trust I, a wholly-owned unconsolidated business trust sponsored by us. See “Note 5 – Subordinated Debentures Held by Subsidiary Trusts” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report for additional information regarding this redemption

Capital Resources and Liquidity Management

Stockholders’ equity is influenced primarily by earnings, dividends, changes in the unrealized holding gains or losses, net of taxes, on available-for-sale investment securities and sales and redemptions of common stock. Stockholders’ equity increased $27 million, or 3.5% to $798 million as of September 30, 2012, from $771 million as of December 31, 2011, primarily due to the retention of earnings.

On September 27, 2012, we declared a quarterly dividend to common stockholders of $0.12 per share paid on October 17, 2012 to shareholders of record as of October 3, 2012. During the first nine months of 2012, we paid aggregate cash dividends of $15.4 million, or $0.36 per share, to common stockholders, as compared to aggregate cash dividends of $14.4 million, or $0.3375 per share, to common shareholders during the same period in 2011. In addition, we paid dividends of $2.6 million to preferred stockholders during the first nine months of 2012 and 2011.

Pursuant to the Federal Deposit Insurance Corporation Improvement Act, the Federal Reserve and FDIC have adopted regulations setting forth a five-tier system for measuring the capital adequacy of the financial institutions they supervise. As of September 30, 2012 and December 31, 2011, the Bank had capital levels that, in all cases, exceeded the well-capitalized guidelines. As of September 30, 2012, we had consolidated leverage, tier 1 and total risk-based capital ratios of 9.56%, 14.53% and 16.52%, respectively, as compared to 9.84%, 14.55% and 16.54%, respectively, as of December 31, 2011. Decreases in our tier 1 and total risk based capital ratios as of September 30, 2012, compared to December 31, 2011, were due to the redemption of $40 million of trust preferred securities that qualified as tier 1 capital under regulatory capital guidelines. For additional information regarding the redemption, see "Subordinated Debentures Held by Subsidiary Trusts" included herein and “Note 5 – Subordinated Debentures Held by Subsidiary Trusts” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

Liquidity. Liquidity measures our ability to meet current and future cash flow needs on a timely basis and at a reasonable cost. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders. Our liquidity position is supported by management of liquid assets and liabilities and access to alternative sources of funds. Liquid assets include cash, interest bearing deposits in banks, federal funds sold, available-for-sale investment securities and maturing or prepaying balances in our held-to-maturity investment and loan portfolios. Liquid liabilities include core deposits, federal funds purchased, securities sold under repurchase agreements and borrowings. Other sources of liquidity include the sale of loans, the ability to acquire additional national market, non-core deposits, the issuance of additional collateralized borrowings such as FHLB advances, the issuance of debt securities, additional borrowings through the Federal Reserve’s discount window and the issuance of preferred or common securities.

Our short-term and long-term liquidity requirements are primarily to fund on-going operations, including payment of interest on deposits and debt, extensions of credit to borrowers, capital expenditures and shareholder dividends. These liquidity requirements are met primarily through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios, debt financing and increases in customer deposits. For additional information regarding our operating, investing and financing cash flows, see the unaudited “Consolidated Statements of Cash Flows,” included in Part I, Item 1.

As a holding company, we are a corporation separate and apart from the Bank and, therefore, we provide for our own liquidity. Our main sources of funding include management fees and dividends declared and paid by the Bank and access to capital markets. There are statutory, regulatory and debt covenant limitations that affect the ability of our subsidiary bank to pay dividends to us. Management believes that such limitations will not impact our ability to meet our ongoing short-term cash obligations.

49

Management continuously monitors our liquidity position and adjustments are made to the balance between sources and uses of funds as deemed appropriate. Our management is not aware of any events that are reasonably likely to have a material adverse effect on our liquidity, capital resources or operations. In addition, our management is not aware of any regulatory recommendations regarding liquidity, which if implemented, would have a material adverse effect on us.

Recent Accounting Pronouncements

See “Note 15 – Recent Authoritative Accounting Guidance” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report for details of recently issued accounting pronouncements and their expected impact on our financial statements.    

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As of September 30, 2012, there have been no material changes in the quantitative and qualitative information about market risk provided pursuant to Item 305 of Regulation S-K as presented in our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 4.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act. As of September 30, 2012, an evaluation was performed, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of September 30, 2012, were effective in ensuring that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods required by the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting for the quarter ended September 30, 2012, that have materially affected, or are reasonably likely to materially affect, such control.

Limitations on Controls and Procedures

The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, any system of disclosure controls and procedures or internal control over financial reporting may not be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.

50

PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes in legal proceedings as described in our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 1A. Risk Factors

There have been no material changes in risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) There were no unregistered sales of equity securities during the three months ended September 30, 2012.

(b) Not applicable.

(c) The following table provides information with respect to purchases made by or on behalf of us or any “affiliated purchasers” (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the three months ended September 30, 2012.

Period	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 2012	—	$	—	—	Not Applicable
August 2012	—	—		—	Not Applicable
September 2012	352	15.23		—	Not Applicable
Total	352	$	15.23	—	Not Applicable

 (1) Represents shares purchased by the Company in satisfaction of minimum required income tax withholding requirements pursuant to the vesting of restricted stock.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable or required.

Item 6. Exhibits

2.1	Stock Purchase Agreement dated as of September 18, 2007, by and between First Interstate BancSystem, Inc. and First Western Bancorp, Inc. (incorporated herein by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on September 19, 2007)
2.2	First Amendment to Stock Purchase Agreement dated as of January 10, 2008, between First Interstate BancSystem, Inc. and Christen Group, Inc. formerly known as First Western Bancorp, Inc. (incorporated herein by reference to Exhibit 10.20 of the Company’s Current Report on Form 8-K filed on January 16, 2008)
3.1	Amended and Restated Articles of Incorporation dated March 5, 2010 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K/A filed on March 10, 2010)
3.2	Second Amended and Restated Bylaws dated January 27, 2011 (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K/A filed on February 3, 2011)

51

4.1	Specimen of Series A preferred stock certificate of First Interstate BancSystem, Inc. (incorporated herein by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007)
10.1	Credit Agreement Re: Subordinated Term Note dated as of January 10, 2008, between First Interstate BancSystem, Inc. and First Midwest Bank (incorporated herein by reference to Exhibit 10.24 of the Company’s Current Report on Form 8-K filed on January 16, 2008)
10.2	Lease Agreement between Billings 401 Joint Venture and First Interstate Bank Montana dated September 20, 1985 and addendum thereto (incorporated herein by reference to Exhibit 10.4 of the Company’s Post-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 033-84540, filed on September 29, 1994)
10.3†	First Interstate BancSystem’s Deferred Compensation Plan dated December 1, 2006 (incorporated herein by reference to Exhibit 10.9 of the Company’s Pre-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 333-164380, filed on March 23, 2010)

10.4†	First Amendment to the First Interstate BancSystem’s Deferred Compensation Plan dated October 24, 2008 (incorporated herein by reference to Exhibit 10.10 of the Company’s Pre-Effective Amendment No. 3 to Registration Statement on Form S-1, No. 333-164380, filed on March 23, 2010)
10.5†	2001 Stock Option Plan (incorporated herein by reference to Exhibit 4.12 of the Company’s Registration Statement on Form S-8, No. 333-106495, filed on June 25, 2003)
10.6†	Second Amendment to 2001 Stock Option Plan (incorporated herein by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
10.7†	First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Appendix A of the Company’s 2006 Definitive Proxy Statement of Schedule 14A)
10.8†	Amendment to First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on March 22, 2010)
10.9†	Second Amendment to First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.9 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
10.10	Trademark License Agreements between Wells Fargo & Company and First Interstate BancSystem, Inc. (incorporated herein by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S-1, No. 333-25633 filed on April 22, 1997)
31.1*	Certification of Quarterly Report on Form 10-Q pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer
31.2*	Certification of Quarterly Report on Form 10-Q pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer
32*	Certification of Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101**	Interactive data file

 ________________________

† Management contract or compensatory arrangement.

* Filed herewith.

** As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

52

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST INTERSTATE BANCSYSTEM, INC.
Date: November 7, 2012	/S/    ED GARDING
	Ed Garding
	President and Chief Executive Officer
Date: November 7, 2012	/S/    TERRILL R. MOORE
	Terrill R. Moore
	Executive Vice President and Chief Financial Officer

53

EX-31.1

Exhibit 31.1

CERTIFICATION OF QUARTERLY REPORT ON FORM 10-Q

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ed Garding, certify that :

1. I have reviewed this quarterly report on Form 10-Q of First Interstate BancSystem, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, as of the end of the period covered by this report based on such evaluation; and

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions);

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: November 7, 2012

/s/ ED GARDING

Ed Garding

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF QUARTERLY REPORT ON FORM 10-Q

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Terrill R. Moore, certify that :

1. I have reviewed this quarterly report on Form 10-Q of First Interstate BancSystem, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, as of the end of the period covered by this report based on such evaluation; and

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions);

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: November 7, 2012

/s/ TERRILL R. MOORE

Terrill R. Moore

Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned are the Chief Executive Officer and the Chief Financial Officer of First Interstate BancSystem, Inc. (the “Registrant”). This Certification is made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This Certification accompanies the Quarterly Report on Form 10-Q of the Registrant for the quarter ended September 30, 2012.

We certify that such Quarterly Report on Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

This Certification is executed as of November 7, 2012.

/s/ ED GARDING

Ed Garding

President and Chief Executive Officer

/s/ TERRILL R. MOORE

Terrill R. Moore

Executive Vice President and Chief Financial Officer

Chief Financial Officer

XML

Loans Schedule of Recorded Investment in Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	$ 180,623		$ 180,623		$ 264,801
Recorded Investment With No Allowance	101,184		101,184		117,004
Recorded Investment With Allowance	53,274		53,274		113,592
Total Recorded Investment	154,458		154,458		230,596
Related Allowance	14,684		14,684		32,838
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	165,816	259,070	198,334	234,644
Income Recognized	431	456	1,260	986
Interest Income on Impaired Loans If Interest Had Been Accrued	452	812	1,688	2,263
Commercial real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	88,185		88,185		97,745
Recorded Investment With No Allowance	61,509		61,509		62,769
Recorded Investment With Allowance	17,143		17,143		23,218
Total Recorded Investment	78,652		78,652		85,987
Related Allowance	4,453		4,453		6,741
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	81,313	86,347	82,689	83,479
Income Recognized	366	188	1,037	390
Land acquisition & development construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	43,595		43,595		73,258
Recorded Investment With No Allowance	19,660		19,660		22,300
Recorded Investment With Allowance	12,558		12,558		39,131
Total Recorded Investment	32,218		32,218		61,431
Related Allowance	4,137		4,137		12,084
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	36,206	66,470	49,528	54,494
Income Recognized	30	3	76	90
Residential construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	3,333		3,333		13,721
Recorded Investment With No Allowance	1,257		1,257		10,427
Recorded Investment With Allowance	1,744		1,744		2,044
Total Recorded Investment	3,001		3,001		12,471
Related Allowance	276		276		312
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	3,151	17,627	8,591	17,248
Income Recognized	0	18	0	55
Commercial construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	13,071		13,071		26,647
Recorded Investment With No Allowance	1,379		1,379		3,510
Recorded Investment With Allowance	9,140		9,140		21,026
Total Recorded Investment	10,519		10,519		24,536
Related Allowance	588		588		5,042
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	10,817	23,441	18,601	20,371
Income Recognized	0	0	0	0
Total construction loans
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	59,999		59,999		113,626
Recorded Investment With No Allowance	22,296		22,296		36,237
Recorded Investment With Allowance	23,442		23,442		62,201
Total Recorded Investment	45,738		45,738		98,438
Related Allowance	5,001		5,001		17,438
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	50,174	107,538	76,720	92,113
Income Recognized	30	21	76	145
Residential real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	12,044		12,044		18,305
Recorded Investment With No Allowance	5,570		5,570		2,678
Recorded Investment With Allowance	5,070		5,070		15,626
Total Recorded Investment	10,640		10,640		18,304
Related Allowance	1,736		1,736		3,844
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	12,416	22,972	14,667	19,101
Income Recognized	1	160	22	257
Agricultural real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	5,929		5,929		8,018
Recorded Investment With No Allowance	3,293		3,293		7,470
Recorded Investment With Allowance	2,137		2,137		0
Total Recorded Investment	5,430		5,430		7,470
Related Allowance	158		158		0
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	5,173	7,694	7,090	6,392
Income Recognized	9	56	41	98
Total real estate loans
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	166,157		166,157		237,694
Recorded Investment With No Allowance	92,668		92,668		109,154
Recorded Investment With Allowance	47,792		47,792		101,045
Total Recorded Investment	140,460		140,460		210,199
Related Allowance	11,348		11,348		28,023
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	149,076	224,551	181,166	201,085
Income Recognized	406	425	1,176	890
Commercial
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	13,824		13,824		26,348
Recorded Investment With No Allowance	8,338		8,338		7,354
Recorded Investment With Allowance	5,070		5,070		12,284
Total Recorded Investment	13,408		13,408		19,638
Related Allowance	2,924		2,924		4,664
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	15,992	33,634	16,129	32,634
Income Recognized	21	31	65	96
Agricultural
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	642		642		759
Recorded Investment With No Allowance	178		178		496
Recorded Investment With Allowance	412		412		263
Total Recorded Investment	590		590		759
Related Allowance	412		412		151
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	748	885	1,039	925
Income Recognized	$ 4	$ 0	$ 19	$ 0

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Schedule of Derivative Liability Contract Measured at Fair Value on a Recurring Basis Unobservable Input Reconciliation (Details) (Fair Value Measured on a Recurring Basis, Derivative Liability Contract, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Fair Value Measured on a Recurring Basis | Derivative Liability Contract
Derivative Liability Contract Measured at Fair Value on a Recurring Basis Unobservable Input Reconciliation
Balance, beginning of period	$ 383	$ 86
Accruals during the period	0	164
Cash payments during the period	(383)	(128)
Balance, end of period	$ 0	$ 122

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Construction Contracts
Unrecorded Unconditional Purchase Obligation [Line Items]
Commitments to Purchase	$ 867
Held-to-maturity Securities | Corporate Debt Securities
Unrecorded Unconditional Purchase Obligation [Line Items]
Commitments to Purchase	$ 988

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Schedule of Estimated Fair Values of Financial Instruments by Level of Valuation Inputs (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Carrying Amount
Financial assets:
Cash and cash equivalents	$ 611,335	$ 472,447
Investment securities available-for-sale	1,979,154	2,016,864
Investment securities held-to-maturity	187,573	152,781
Accrued interest receivable	33,416	31,974
Mortgage servicing rights	12,334	11,555
Net loans	4,081,045	4,073,968
Total financial assets	6,904,857	6,759,589
Financial liabilities:
Total deposits, excluding time deposits	4,612,346	4,269,631
Time deposits	1,423,386	1,557,340
Securities sold under repurchase agreements	460,805	516,243
Other borrowed funds	6	7
Accrued interest payable	6,706	8,123
Long-term debt	37,170	37,200
Subordinated debentures held by subsidiary trusts	82,477	123,715
Derivative liability contract	6,622,896	383
Total financial liabilities		6,512,642
Estimated Fair Value
Financial assets:
Cash and cash equivalents	611,335	472,447
Investment securities available-for-sale	1,979,154	2,016,864
Investment securities held-to-maturity	199,078	161,877
Accrued interest receivable	33,416	31,974
Mortgage servicing rights	14,082	11,910
Net loans	4,067,457	4,064,718
Total financial assets	6,904,522	6,759,790
Financial liabilities:
Total deposits, excluding time deposits	4,612,346	4,269,631
Time deposits	1,431,066	1,565,558
Securities sold under repurchase agreements	460,805	516,243
Other borrowed funds	6	7
Accrued interest payable	6,706	8,123
Long-term debt	34,003	34,341
Subordinated debentures held by subsidiary trusts	57,656	102,525
Derivative liability contract		383
Total financial liabilities	6,602,588	6,496,811
Quoted Prices in Active Markets for Identical Assets (Level 1) | Estimated Fair Value
Financial assets:
Cash and cash equivalents	0	0
Investment securities available-for-sale	0	0
Investment securities held-to-maturity	0	0
Accrued interest receivable	0	0
Mortgage servicing rights	0	0
Net loans	0	0
Total financial assets	0	0
Financial liabilities:
Total deposits, excluding time deposits	0	0
Time deposits	0	0
Securities sold under repurchase agreements	0	0
Other borrowed funds	0	0
Accrued interest payable	0	0
Long-term debt	0	0
Subordinated debentures held by subsidiary trusts	0	0
Derivative liability contract		0
Total financial liabilities	0	0
Significant Other Observable Inputs (Level 2) | Estimated Fair Value
Financial assets:
Cash and cash equivalents	611,335	472,447
Investment securities available-for-sale	1,979,154	2,016,864
Investment securities held-to-maturity	199,078	161,877
Accrued interest receivable	33,416	31,974
Mortgage servicing rights	14,082	11,910
Net loans	4,000,902	3,964,683
Total financial assets	6,837,967	6,659,755
Financial liabilities:
Total deposits, excluding time deposits	4,612,346	4,269,631
Time deposits	1,431,066	1,565,558
Securities sold under repurchase agreements	460,805	516,243
Other borrowed funds	6	7
Accrued interest payable	6,706	8,123
Long-term debt	34,003	34,341
Subordinated debentures held by subsidiary trusts	57,656	102,525
Derivative liability contract		0
Total financial liabilities	6,602,588	6,496,428
Significant Unobservable Inputs (Level 3) | Estimated Fair Value
Financial assets:
Cash and cash equivalents	0	0
Investment securities available-for-sale	0	0
Investment securities held-to-maturity	0	0
Accrued interest receivable	0	0
Mortgage servicing rights	0	0
Net loans	66,555	100,035
Total financial assets	66,555	100,035
Financial liabilities:
Total deposits, excluding time deposits	0	0
Time deposits	0	0
Securities sold under repurchase agreements	0	0
Other borrowed funds	0	0
Accrued interest payable	0	0
Long-term debt	0	0
Subordinated debentures held by subsidiary trusts	0	0
Derivative liability contract		383
Total financial liabilities	$ 0	$ 383

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Computation of Basic and Diluted Earnings per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net Income (Loss) Available to Common Stockholders, Basic
Net income	$ 16,155	$ 11,921	$ 41,379	$ 31,281
Preferred stock dividends	863	862	2,569	2,559
Net income available to common stockholders	$ 15,292	$ 11,059	$ 38,810	$ 28,722
Weighted Average Number of Shares Outstanding, Basic and Diluted
Weighted average common shares outstanding for basic earnings per share computation	42,989,564	42,774,259	42,943,588	42,737,986
Dilutive effect of stock-based compensation	130,513	67,404	102,968	111,368
Weighted average common shares outstanding for diluted earnings per common share computation	43,120,077	42,841,663	43,046,556	42,849,354
Earnings Per Share, Basic and Diluted
Basic earnings per common share	$ 0.36	$ 0.26	$ 0.90	$ 0.67
Diluted earnings per common share	$ 0.35	$ 0.26	$ 0.90	$ 0.67
Stock Options
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			2,814,277	2,888,192
Unvested Restricted Stock
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			48,196	33,068

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Amortized Cost and Approximate Fair Values of Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Schedule of Available for Sale and Held-to-Maturity Securities [Line Items]
Available-for-Sale Securities, Gross Realized Gains	$ 66	$ 38	$ 298	$ 56
Available-for-sale Securities, Gross Realized Losses	0	0	(3)	0
Available-for-Sale:
Available-for-Sale, Amortized Cost	1,945,977		1,945,977		1,983,629
Available-for-Sale, Gross Unrealized Gains	34,483		34,483		33,927
Available-for-Sale, Gross Unrealized Losses	(1,306)		(1,306)		(692)
Available-for-Sale, Estimated Fair Value	1,979,154		1,979,154		2,016,864
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	187,573		187,573		152,781
Held-to-Maturity, Gross Unrealized Gains	11,552		11,552		9,113
Held-to-Maturity, Gross Unrealized Losses	(47)		(47)		(17)
Held-to-Maturity, Estimated Fair Value	199,078		199,078		161,877
Obligations of U.S. government agencies
Available-for-Sale:
Available-for-Sale, Amortized Cost	914,676		914,676		1,134,427
Available-for-Sale, Gross Unrealized Gains	4,648		4,648		4,353
Available-for-Sale, Gross Unrealized Losses	(39)		(39)		(662)
Available-for-Sale, Estimated Fair Value	919,285		919,285		1,138,118
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
Available-for-Sale:
Available-for-Sale, Amortized Cost	1,030,703		1,030,703		848,444
Available-for-Sale, Gross Unrealized Gains	29,824		29,824		29,567
Available-for-Sale, Gross Unrealized Losses	(1,266)		(1,266)		(14)
Available-for-Sale, Estimated Fair Value	1,059,261		1,059,261		877,997
Private mortgage-backed securities
Available-for-Sale:
Available-for-Sale, Amortized Cost	598		598		758
Available-for-Sale, Gross Unrealized Gains	11		11		7
Available-for-Sale, Gross Unrealized Losses	(1)		(1)		(16)
Available-for-Sale, Estimated Fair Value	608		608		749
State, county and municipal securities
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	181,792		181,792		152,619
Held-to-Maturity, Gross Unrealized Gains	11,489		11,489		9,113
Held-to-Maturity, Gross Unrealized Losses	(47)		(47)		(17)
Held-to-Maturity, Estimated Fair Value	193,234		193,234		161,715
Corporate securities
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	5,658		5,658
Held-to-Maturity, Gross Unrealized Gains	63		63
Held-to-Maturity, Gross Unrealized Losses	0		0
Held-to-Maturity, Estimated Fair Value	5,721		5,721
Other securities
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	123		123		162
Held-to-Maturity, Gross Unrealized Gains	0		0		0
Held-to-Maturity, Gross Unrealized Losses	0		0		0
Held-to-Maturity, Estimated Fair Value	$ 123		$ 123		$ 162

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Investment Securities (Tables)

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Amortized Cost and Approximate Fair Values of Investment Securities

The amortized cost and approximate fair values of investment securities are summarized as follows:

September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	914,676	$	4,648	$	(39	)	$	919,285
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,030,703		29,824		(1,266		)	1,059,261
Private mortgage-backed securities	598		11		(1		)	608
Total	$	1,945,977	$	34,483	$	(1,306	)	$	1,979,154

September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	181,792	$	11,489	$	(47	)	$	193,234
Corporate securities	5,658		63		—			5,721
Other securities	123		—		—			123
Total	$	187,573	$	11,552	$	(47	)	$	199,078

December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	1,134,427	$	4,353	$	(662	)	$	1,138,118
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	848,444		29,567		(14		)	877,997
Private mortgage-backed securities	758		7		(16		)	749
Total	$	1,983,629	$	33,927	$	(692	)	$	2,016,864

December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	152,619	$	9,113	$	(17	)	$	161,715
Other securities	162		—		—			162
Total	$	152,781	$	9,113	$	(17	)	$	161,877

Realized Gains (Losses) on Investments

Gross realized gains and losses from the disposition of investment securities are summarized in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Gross realized gains	$	66	$	38	$	298		$	56
Gross realized losses	—		—		(3		)	—

Gross Unrealized Losses and Fair Values of Investment Securities

The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of September 30, 2012 and December 31, 2011

	Less than 12 Months					12 Months or More					Total
September 30, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	31,855	$	(39	)	$	—	$	—		$	31,855	$	(39	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	124,136		(1,266		)	—		—			124,136		(1,266		)
Private mortgage-backed securities	—		—			154		(1		)	154		(1		)
Total	$	155,991	$	(1,305	)	$	154	$	(1	)	$	156,145	$	(1,306	)

	Less than 12 Months					12 Months or More					Total
September 30, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	4,961	$	(39	)	$	696	$	(8	)	$	5,657	$	(47	)

	Less than 12 Months					12 Months or More					Total
December 31, 2011	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	287,404	$	(662	)	$	—	$	—		$	287,404	$	(662	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	45,694		(14		)	—		—			45,694		(14		)
Private mortgage-backed securities	246		(10		)	177		(6		)	423		(16		)
Total	$	333,344	$	(686	)	$	177	$	(6	)	$	333,521	$	(692	)

	Less than 12 Months				12 Months or More					Total
December 31, 2011	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	—	$	—	$	773	$	(17	)	$	773	$	(17	)

Maturities of Investment Securities

Maturities of investment securities at September 30, 2012 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.

	Available-for-Sale				Held-to-Maturity
September 30, 2012	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	432,052	$	440,039	$	5,891	$	5,822
After one year but within five years	1,131,727		1,147,641		33,837		34,853
After five years but within ten years	227,503		232,493		79,891		84,811
After ten years	154,695		158,981		67,831		73,469
Total	1,945,977		1,979,154		187,450		198,955
Investments with no stated maturity	—		—		123		123
Total	$	1,945,977	$	1,979,154	$	187,573	$	199,078

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Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Supplemental Cash Flow Information [Abstract]
Transferred Loans to OREO	$ 36,933
Transfered Accrued Liabilities to Common Stock in Conjunction with the Vesting of Liability-Classified Non-Vested Stock Awards		195
Transferred Loans to Mortgage Servicing Assets	3,344
Transfer of Land Held for Disposal to Other Assets	566
Transfer of Premises and Equipment Pending Disposal o Other Assets, book value	$ 1,513

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Schedule of Allowance for Loan Losses by Portfolio Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			$ 112,581	$ 120,480	$ 102,794		$ 124,579
Provision charged to operating expense	9,500	14,000	32,750	44,400
Less loans charged-off	(14,813)	(20,405)	(50,645)	(48,846)
Add back recoveries of loans previously charged-off	1,525	2,129	4,320	4,269
Ending balance	99,006	120,303	99,006	120,303	102,794		124,579
Allowance for loan losses:
Loans individually evaluated for impairment	14,684	37,005	14,684	37,005
Loans collectively evaluated for impairment	84,322	83,298	84,322	83,298
Ending balance	99,006	120,303	99,006	120,303	102,794		124,579
Total loans:
Individually evaluated for impairment	154,458	255,736	154,458	255,736
Individually evaluated for impairment	4,025,593	4,019,981	4,025,593	4,019,981
Total loans	4,180,051	4,275,717	4,180,051	4,275,717		4,186,549
Real Estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			87,396	84,181	77,723		90,243
Provision charged to operating expense	5,371	9,984	22,172	33,080
Less loans charged-off	(9,138)	(12,210)	(36,645)	(29,598)
Add back recoveries of loans previously charged-off	387	1,386	1,420	1,740
Ending balance	74,343	89,403	74,343	89,403	77,723		90,243
Allowance for loan losses:
Loans individually evaluated for impairment	11,348	27,344	11,348	27,344
Loans collectively evaluated for impairment	62,995	62,059	62,995	62,059
Ending balance	74,343	89,403	74,343	89,403	77,723		90,243
Total loans:
Individually evaluated for impairment	140,460	223,386	140,460	223,386
Individually evaluated for impairment	2,600,908	2,582,202	2,600,908	2,582,202
Total loans	2,741,368	2,805,588	2,741,368	2,805,588
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			8,594	9,332	7,274		8,526
Provision charged to operating expense	192	1,676	385	2,927
Less loans charged-off	(1,340)	(1,682)	(3,862)	(4,641)
Add back recoveries of loans previously charged-off	465	453	1,474	1,355
Ending balance	6,591	8,973	6,591	8,973	7,274		8,526
Allowance for loan losses:
Loans individually evaluated for impairment	0	0	0	0
Loans collectively evaluated for impairment	6,591	8,973	6,591	8,973
Ending balance	6,591	8,973	6,591	8,973	7,274		8,526
Total loans:
Individually evaluated for impairment	0	0	0	0
Individually evaluated for impairment	629,757	627,139	629,757	627,139
Total loans	629,757	627,139	629,757	627,139
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			15,325	25,354	16,675		24,434
Provision charged to operating expense	4,222	2,206	10,530	8,461
Less loans charged-off	(4,335)	(6,498)	(10,028)	(14,547)
Add back recoveries of loans previously charged-off	666	287	1,401	1,161
Ending balance	17,228	20,429	17,228	20,429	16,675		24,434
Allowance for loan losses:
Loans individually evaluated for impairment	2,924	9,422	2,924	9,422
Loans collectively evaluated for impairment	14,304	11,007	14,304	11,007
Ending balance	17,228	20,429	17,228	20,429	16,675		24,434
Total loans:
Individually evaluated for impairment	13,408	31,470	13,408	31,470
Individually evaluated for impairment	658,692	671,540	658,692	671,540
Total loans	672,100	703,010	672,100	703,010
Agriculture
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			1,266	1,613	1,122		1,376
Provision charged to operating expense	(285)	134	(337)	(68)
Less loans charged-off	0	(15)	(110)	(60)
Add back recoveries of loans previously charged-off	7	3	25	13
Ending balance	844	1,498	844	1,498	1,122		1,376
Allowance for loan losses:
Loans individually evaluated for impairment	412	239	412	239
Loans collectively evaluated for impairment	432	1,259	432	1,259
Ending balance	844	1,498	844	1,498	1,122		1,376
Total loans:
Individually evaluated for impairment	590	880	590	880
Individually evaluated for impairment	134,877	135,848	134,877	135,848
Total loans	135,467	136,728	135,467	136,728
Other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance			0	0	0		0
Provision charged to operating expense	0	0	0	0
Less loans charged-off	0	0	0	0
Add back recoveries of loans previously charged-off	0	0	0	0
Ending balance	0	0	0	0	0		0
Allowance for loan losses:
Loans individually evaluated for impairment	0	0	0	0
Loans collectively evaluated for impairment	0	0	0	0
Ending balance	0	0	0	0	0		0
Total loans:
Individually evaluated for impairment	0	0	0	0
Individually evaluated for impairment	1,359	3,252	1,359	3,252
Total loans	$ 1,359	$ 3,252	$ 1,359	$ 3,252

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Schedule of Loans by Class (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Loans and Leases Receivable [Line Items]
Loans held for investment	$ 4,107,171	$ 4,133,028
Mortgage loans held for sale	72,880	53,521
Total loans	4,180,051	4,186,549	4,275,717
Commercial real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	1,513,784	1,553,155
Land acquisition & development construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	233,082	278,613
Residential construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	50,895	61,106
Commercial construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	56,097	61,054
Total construction loans
Loans and Leases Receivable [Line Items]
Loans held for investment	340,074	400,773
Residential real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	639,235	571,943
Agricultural real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	175,395	175,302
Total real estate loans
Loans and Leases Receivable [Line Items]
Loans held for investment	2,668,488	2,701,173
Indirect consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	431,449	407,651
Other consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	139,984	147,487
Credit card consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	58,324	60,933
Total consumer loans
Loans and Leases Receivable [Line Items]
Loans held for investment	629,757	616,071
Commercial
Loans and Leases Receivable [Line Items]
Loans held for investment	672,100	693,261
Agricultural
Loans and Leases Receivable [Line Items]
Loans held for investment	135,467	119,710
Other, including overdrafts
Loans and Leases Receivable [Line Items]
Loans held for investment	$ 1,359	$ 2,813

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Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Net accumulated other comprehensive income:
Net unrealized gain on investment securities available-for-sale	$ 20,248		$ 20,533
Net actuarial loss on defined benefit post-retirement benefit plans	(1,437)		(1,499)
Net accumulated other comprehensive income	$ 18,811	$ 19,034	$ 19,034

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Schedule of Actual Capital Amounts and Ratios and Selected Minimum Regulatory Thresholds (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Total risk-based capital:
Actual Amount	$ 790,896	$ 800,354
Actual Ratio	16.50%	16.50%
Adequately Capitalized Amount	382,980	387,082
Adequately Capitalized Ratio	8.00%	8.00%
Tier 1 risk-based capital:
Actual Amount	695,572	704,229
Actual Ratio	14.50%	14.60%
Adequately Capitalized Amount	191,490	193,541
Adequately Capitalized Ratio	4.00%	4.00%
Leverage capital ratio:
Actual Ratio	9.60%	9.80%
Adequately Capitalized Amount	291,093	286,303
Adequately Capitalized Ratio	4.00%	4.00%
FIB
Total risk-based capital:
Actual Amount	687,085	663,860
Actual Ratio	14.40%	13.80%
Adequately Capitalized Amount	381,297	384,987
Adequately Capitalized Ratio	8.00%	8.00%
Well Capitalized Amount	476,621	481,234
Well Capitalized Ratio	10.00%	10.00%
Tier 1 risk-based capital:
Actual Amount	612,021	588,059
Actual Ratio	12.80%	12.20%
Adequately Capitalized Amount	190,648	192,494
Adequately Capitalized Ratio	4.00%	4.00%
Well Capitalized Amount	285,973	288,740
Well Capitalized Ratio	6.00%	6.00%
Leverage capital ratio:
Actual Ratio	8.40%	8.20%
Adequately Capitalized Amount	290,214	285,358
Adequately Capitalized Ratio	4.00%	4.00%
Well Capitalized Amount	$ 362,768	$ 356,698
Well Capitalized Ratio	5.00%	5.00%

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Basis of Presentation

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements of First Interstate BancSystem, Inc. and subsidiaries (the “Company”) contain all adjustments (all of which are of a normal recurring nature) necessary to present fairly the financial position of the Company at September 30, 2012 and December 31, 2011, the results of operations for each of the three and nine month periods ended September 30, 2012 and 2011 and cash flows for the nine months ended September 30, 2012 and 2011, in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2011 is derived from audited consolidated financial statements. Certain reclassifications, none of which were material, have been made to conform prior year financial statements to the September 30, 2012 presentation. These reclassifications did not change previously reported net income or stockholders’ equity.

These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

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OREO (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012	Mar. 31, 2011
Real Estate Acquired Through Foreclosure [Roll Forward]
Beginning balance			$ 37,452	$ 33,632	$ 53,817	$ 28,323
Additions	3,816	3,385	36,933	9,148
Capitalized improvements	0	0	75	15
Valuation adjustments	(2,310)	(2,457)	(3,457)	(5,972)
Dispositions	(15,352)	(4,171)	(31,032)	(11,743)
Ending balance	$ 39,971	$ 25,080	$ 39,971	$ 25,080	$ 53,817	$ 28,323

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2012 and 2011.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net income	$	16,155	$	11,921	$	41,379	$	31,281
Less preferred stock dividends	863		862		2,569		2,559
Net income available to common shareholders, basic and diluted	$	15,292	$	11,059	$	38,810	$	28,722
Weighted average common shares outstanding for basic earnings per share computation	42,989,564		42,774,259		42,943,588		42,737,986
Dilutive effects of stock-based compensation	130,513		67,404		102,968		111,368
Weighted average common shares outstanding for diluted earnings per common share computation	43,120,077		42,841,663		43,046,556		42,849,354
Basic earnings per common share	$	0.36	$	0.26	$	0.90	$	0.67
Diluted earnings per common share	$	0.35	$	0.26	$	0.90	$	0.67

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OREO (Tables)

9 Months Ended

Sep. 30, 2012

Repossessed Assets [Abstract]

Other Real Estate Owned Roll Forward

Information with respect to the Company's other real estate owned follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	53,817		$	28,323		$	37,452		$	33,632
Additions	3,816			3,385			36,933			9,148
Capitalized improvements	—			—			75			15
Valuation adjustments	(2,310		)	(2,457		)	(3,457		)	(5,972		)
Dispositions	(15,352		)	(4,171		)	(31,032		)	(11,743		)
Ending balance	$	39,971		$	25,080		$	39,971		$	25,080

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Subordinated Debentures Held by Subsidiary Trusts (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		0 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jun. 26, 2012 Junior Subordinated Deferrable Interest Debentures Issued by FIST [Member]	Jun. 26, 2012 First Interstate Statutory Trust I (FIST) [Member] Junior Subordinated Deferrable Interest Debentures Issued by FIST [Member]
Subordinated Borrowing [Line Items]
Redemption Price			$ 41,238
Liquidation Amount Per Security			1
Unamortized Issuance Costs Charged to Other Expense			428
Mandatory Redemption of Trust Preferred Securities			40,000
Capital distribution by unconsolidated subsidiary trust	$ 1,238	$ 0		$ 1,238

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Regulatory Capital (Tables)

9 Months Ended

Sep. 30, 2012

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations

Actual capital amounts and ratios and selected minimum regulatory thresholds for the Company and its bank subsidiary, First Interstate Bank (“FIB”), as of September 30, 2012 and December 31, 2011 are presented in the following table:

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2012
Total risk-based capital:
Consolidated	$	790,896	16.5	%	$	382,980	8.0	%	NA		NA
FIB	687,085		14.4		381,297		8.0		$	476,621	10.0	%
Tier 1 risk-based capital:
Consolidated	695,572		14.5		191,490		4.0		NA		NA
FIB	612,021		12.8		190,648		4.0		$	285,973	6.0
Leverage capital ratio:
Consolidated	695,572		9.6		291,093		4.0		NA		NA
FIB	612,021		8.4		290,214		4.0		$	362,768	5.0

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2011
Total risk-based capital:
Consolidated	$	800,354	16.5	%	$	387,082	8.0	%	NA		NA
FIB	663,860		13.8		384,987		8.0		$	481,234	10.0	%
Tier 1 risk-based capital:
Consolidated	704,229		14.6		193,541		4.0		NA		NA
FIB	588,059		12.2		192,494		4.0		$	288,740	6.0
Leverage capital ratio:
Consolidated	704,229		9.8		286,303		4.0		NA		NA
FIB	588,059		8.2		285,358		4.0		$	356,698	5.0

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Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Schedule of Comprehensive Income (Loss)

The gross amounts of each component of other comprehensive income and the related tax effects are as follows:

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Three Months Ended September 30,	2012			2011			2012			2011			2012			2011
Investment securities available-for sale:
Change in net unrealized gain during period	$	931		$	2,781		$	366		$	1,094		$	565		$	1,687
Reclassification adjustment for net gains included in net income	(66		)	(38		)	(26		)	(15		)	(40		)	(23		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	35			35			14			14			21			21
Total other comprehensive income	$	900		$	2,778		$	354		$	1,093		$	546		$	1,685
	Pre-tax						Tax Expense (Benefit)						Net of Tax
Nine Months Ended September 30,	2012			2011			2012			2011			2012			2011
Investment securities available-for sale:
Change in net unrealized gain during period	$	(175	)	$	24,200		$	(69	)	$	9,522		$	(106	)	$	14,678
Reclassification adjustment for net gains included in net income	(295		)	(56		)	(116		)	(22		)	(179		)	(34		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	102			104			40			41			62			63
Total other comprehensive income	$	(368	)	$	24,248		$	(145	)	$	9,541		$	(223	)	$	14,707

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income, net of income taxes, are as follows:

	September 30, 2012			December 31, 2011
Net unrealized gain on investment securities available-for-sale	$	20,248		$	20,533
Net actuarial loss on defined benefit post-retirement benefit plans	(1,437		)	(1,499		)
Net accumulated other comprehensive income	$	18,811		$	19,034

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 41,379	$ 31,281
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	32,750	44,400
Net (gain) loss on disposal of property and equipment	(490)	28
Depreciation and amortization	12,770	12,997
Net premium amortization on investment securities	7,913	7,373
Net gains on investment securities transactions	(295)	(56)
Net gains on sales of mortgage loans held for sale	(20,648)	(8,730)
Net gain on sale of OREO	(768)	(533)
OREO valuation adjustments	3,457	5,972
Net impairment (reversal of impairment) of mortgage servicing rights	(761)	848
Net gain on sale of mortgage servicing rights	(19)	0
Deferred income tax expense	8,013	400
Net increase in cash surrender value of company-owned life insurance policies	(1,491)	(1,306)
Stock-based compensation expense	2,351	1,648
Tax benefits from stock-based compensation expense	296	204
Excess tax benefits from stock-based compensation	(187)	(129)
Originations of mortgage loans held for sale, net of sales	(2,055)	799
Changes in operating assets and liabilities:
Increase in interest receivable	(1,442)	(1,366)
Decrease in other assets	7,381	11,373
Decrease in accrued interest payable	(1,417)	(4,392)
Decrease in accounts payable and accrued expenses	(1,800)	(1,404)
Net cash provided by operating activities	84,937	99,407
Cash flows from investing activities:
Purchases of held-to-maturity investment securities	(44,283)	(11,626)
Purchases of available-for-sale investment securities	(787,697)	(704,619)
Proceeds from maturities and paydowns of held-to-maturity investment securities	9,069	8,940
Proceeds from maturities and paydowns of available-for-sale investment securities	817,903	611,918
Capital distribution by unconsolidated subsidiary trust	1,238	0
Proceeds from sales of mortgage servicing rights	907	596
Extensions of credit to customers, net of repayments	(61,721)	40,278
Recoveries of loans charged-off	4,320	4,269
Proceeds from sales of OREO	31,800	12,247
Capital contribution to unconsolidated equity method investment	(900)	0
Capital contribution to unconsolidated equity method investee	(11,973)	(7,099)
Net cash used in investing activities	(41,337)	(45,096)
Cash flows from financing activities:
Net increase (decrease) in deposits	208,761	(74,394)
Net decrease in repurchase agreements	(55,438)	(144,632)
Net increase (decrease) in short-term borrowings	(1)	131
Repayment of junior subordinated debentures held by subsidiary trusts	(41,238)	0
Repayments of long-term debt	(30)	(33)
Proceeds from issuance of common stock	1,326	272
Excess tax benefits from stock-based compensation	187	129
Purchase and retirement of common stock	(262)	(197)
Dividends paid to common stockholders	(15,448)	(14,419)
Dividends paid to preferred stockholders	(2,569)	(2,559)
Net cash provided by (used in) financing activities	95,288	(235,702)
Net increase (decrease) in cash and cash equivalents	138,888	(181,391)
Cash and cash equivalents at beginning of period	472,447	685,618
Cash and cash equivalents at end of period	611,335	504,227
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	12,740	12,420
Cash paid during the period for interest expense	$ 24,903	$ 37,452

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale:
Obligations of U.S. government agencies	$	919,285	$	—	$	919,285	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,059,261		—		1,059,261		—
Private mortgage-backed securities	608		—		608		—
Mortgage servicing rights	14,082		—		14,082		—

			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale:
Obligations of U.S. government agencies	$	1,138,118	$	—	$	1,138,118	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	877,997		—		877,997		—
Private mortgage-backed securities	749		—		749		—
Mortgage servicing rights	11,910		—		11,910		—
Derivative liability contract	383		—		—		383

Schedule of Derivative Liability Contract Measured at Fair Value on a Recurring Basis Unobservable Input Reconciliation

The following table reconciles the beginning and ending balances of the derivative liability contract measured at fair value on a recurring basis using significant unobservable (Level 3) inputs during the nine months ended September 30, 2012 and 2011:

Nine Months Ended September 30,	2012			2011
Balance, beginning of period	$	383		$	86
Accruals during the period	—			164
Cash payments during the period	(383		)	(128		)
Balance, end of period	$	—		$	122

Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Non-Recurring Basis

The following table presents information about the Company’s assets and liabilities measured at fair value on a non-recurring basis.

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	66,555	$	—	$	—	$	66,555
Other real estate owned	17,089		—		—		17,089
Long-lived assets to be disposed of by sale	496		—		496		—
			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	100,035	$	—	$	—	$	100,035
Other real estate owned	17,000		—		—		17,000

Schedule of Estimated Fair Values of Financial Instruments by Level of Valuation Inputs

The estimated fair values of financial instruments that are reported at amortized cost in the Company's consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:

					Fair Value Measurements at Reporting Date Using
As of September 30, 2012	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	611,335	$	611,335	$	—	$	611,335	$	—
Investment securities available-for-sale	1,979,154		1,979,154		—		1,979,154		—
Investment securities held-to-maturity	187,573		199,078		—		199,078		—
Accrued interest receivable	33,416		33,416		—		33,416		—
Mortgage servicing rights, net	12,334		14,082		—		14,082		—
Net loans	4,081,045		4,067,457		—		4,000,902		66,555
Total financial assets	$	6,904,857	$	6,904,522	$	—	$	6,837,967	$	66,555
Financial liabilities:
Total deposits, excluding time deposits	$	4,612,346	4,612,346		—		4,612,346		—
Time deposits	1,423,386		1,431,066		—		1,431,066		—
Securities sold under repurchase agreements	460,805		460,805		—		460,805		—
Other borrowed funds	6		6		—		6		—
Accrued interest payable	6,706		6,706		—		6,706		—
Long-term debt	37,170		34,003		—		34,003		—
Subordinated debentures held by subsidiary    trusts	82,477		57,656		—		57,656		—
Total financial liabilities	$	6,622,896	$	6,602,588	$	—	$	6,602,588	$	—

					Fair Value Measurements at Reporting Date Using
As of December 31, 2011	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	472,447	$	472,447	$	—	$	472,447	$	—
Investment securities available-for-sale	2,016,864		2,016,864		—		2,016,864		—
Investment securities held-to-maturity	152,781		161,877		—		161,877		—
Accrued interest receivable	31,974		31,974		—		31,974		—
Mortgage servicing rights, net	11,555		11,910		—		11,910		—
Net loans	4,073,968		4,064,718		—		3,964,683		100,035
Total financial assets	$	6,759,589	$	6,759,790	$	—	$	6,659,755	$	100,035
Financial liabilities:
Total deposits, excluding time deposits	$	4,269,631	$	4,269,631	$	—	$	4,269,631	$	—
Time deposits	1,557,340		1,565,558		—		1,565,558		—
Securities sold under repurchase agreements	516,243		516,243		—		516,243		—
Other borrowed funds	7		7		—		7		—
Accrued interest payable	8,123		8,123		—		8,123		—
Long-term debt	37,200		34,341		—		34,341		—
Subordinated debentures held by subsidiary    trusts	123,715		102,525		—		102,525		—
Derivative contract liability	383		383		—		—		383
Total financial liabilities	$	6,512,642	$	6,496,811	$	—	$	6,496,428	$	383

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Schedule of Loans Renegotiated in Troubled Debt Restructurings (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012 notes		Sep. 30, 2012 notes		Dec. 31, 2011
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Loans Renegotiated in Troubled Debt Restructurings	$ 90,410		$ 90,410		$ 94,827
Loans Renegotiated in Troubled Debt Restructurings, Non-Accrual Loans	54,982		54,982		57,451
Loans Renegotiated in Troubled Debt Restructurings, Accrual Loans	35,428		35,428		37,376
Number of Notes	5,000		29,000
Principle Balance at Restructure Date	1,482		18,830
Number of Notes	2,000		5,000
Balance	599		1,574
Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		581
Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	586		1,007
Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	861		4,737
Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	35	[1]	12,505	[1]
Commercial real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	2,000		14,000
Principle Balance at Restructure Date	1,060		13,548
Number of Notes	0		2,000
Balance	0		507
Commercial real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Commercial real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	432		432
Commercial real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	628		4,504
Commercial real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	8,612	[1]
Land acquisition & development construction real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			3,000
Principle Balance at Restructure Date			852
Number of Notes	0		1,000
Balance	0		468
Land acquisition & development construction real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Land acquisition & development construction real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			229
Land acquisition & development construction real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Land acquisition & development construction real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			623	[1]
Commercial construction real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			1,000
Principle Balance at Restructure Date			3,155
Commercial construction real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Commercial construction real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Commercial construction real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Commercial construction real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			3,155
Residential construction real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	1,000		1,000
Principle Balance at Restructure Date	233		233
Residential construction real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Residential construction real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Residential construction real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	233		233
Residential construction real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Total construction loans
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	1,000		5,000
Principle Balance at Restructure Date	233		4,240
Number of Notes	0		1,000
Balance	0		468
Total construction loans | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Total construction loans | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		229
Total construction loans | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	233		233
Total construction loans | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	3,778	[1]
Residential real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			2,000
Principle Balance at Restructure Date			593
Number of Notes	2,000		2,000
Balance	599		599
Residential real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			568
Residential real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			25
Residential real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Residential real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0	[1]
Total real estate loans
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	4,000		22,000
Principle Balance at Restructure Date	1,447		18,535
Number of Notes	2,000		5,000
Balance	599		1,574
Total real estate loans | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		568
Total real estate loans | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	586		840
Total real estate loans | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	861		4,737
Total real estate loans | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	12,390	[1]
Other consumer
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			1,000
Principle Balance at Restructure Date			69
Other consumer | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Other consumer | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			69
Other consumer | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Other consumer | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0	[1]
Total consumer loans
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			1,000
Principle Balance at Restructure Date			69
Total consumer loans | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Total consumer loans | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			69
Total consumer loans | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Total consumer loans | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0	[1]
Commercial
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	1,000
Principle Balance at Restructure Date	35		226
Commercial | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			6,000
Principle Balance at Restructure Date	0		13
Commercial | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		98
Commercial | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Commercial | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	35		115
Agricultural real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	1,000		1,000
Principle Balance at Restructure Date	154		154
Agricultural real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Agricultural real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	154		154
Agricultural real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Agricultural real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	$ 0		$ 0

[1] Other includes concessions that reduce or defer payments for a specified period of time and/or extend amortization schedules.

XML

Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO expense, net of income	$ 2,612	$ 2,878	$ 5,523	$ 6,631
Related Allowance	14,684		14,684		32,838
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights	0		0		0
Derivative liability contract					0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0		0		0
Other real estate owned	0		0		0
Long-lived assets to be disposed of by sale	0		0
Significant Other Observable Inputs (Level 2) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights	14,082		14,082		11,910
Derivative liability contract					0
Significant Other Observable Inputs (Level 2) | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0		0		0
Other real estate owned	0		0		0
Long-lived assets to be disposed of by sale	496		496
Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights	0		0		0
Derivative liability contract					383
Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	66,555		66,555		100,035
Other real estate owned	17,089		17,089		17,000
Long-lived assets to be disposed of by sale	0		0
OREO expense, net of income			3,457	5,972
Related Allowance	(13,671)		(13,671)		(32,838)
Impaired Financing Receivable, Related Allowance, Partial Loan Charge-Offs	(26,162)		(26,162)		(34,205)
Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Non-recurring Basis | Directly Related to Receipt of Updated Appraisals and Adjustments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO expense, net of income			625	3,521
Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Non-recurring Basis | Based on Management Estimates of the Current Fair Value of Properties
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO expense, net of income			2,832	2,451
Estimated Fair Value | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage servicing rights	14,082		14,082		11,910
Derivative liability contract					383
Estimated Fair Value | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	66,555		66,555		100,035
Other real estate owned	17,089		17,089		17,000
Long-lived assets to be disposed of by sale	496		496
Change During Period | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets to be disposed of by sale	70		70
Obligations of U.S. government agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
Obligations of U.S. government agencies | Significant Other Observable Inputs (Level 2) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	919,285		919,285		1,138,118
Obligations of U.S. government agencies | Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
Obligations of U.S. government agencies | Estimated Fair Value | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	919,285		919,285		1,138,118
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | Significant Other Observable Inputs (Level 2) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,059,261		1,059,261		877,997
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | Estimated Fair Value | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,059,261		1,059,261		877,997
Private mortgage-backed securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
Private mortgage-backed securities | Significant Other Observable Inputs (Level 2) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	608		608		749
Private mortgage-backed securities | Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
Private mortgage-backed securities | Estimated Fair Value | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	608		608		749
Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,979,154		1,979,154		2,016,864
Mortgage servicing rights	14,082		14,082		11,910
Derivative liability contract					383
Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
Mortgage servicing rights	0		0		0
Derivative liability contract					0
Estimated Fair Value | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,979,154		1,979,154		2,016,864
Mortgage servicing rights	14,082		14,082		11,910
Derivative liability contract					0
Estimated Fair Value | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	0		0		0
Mortgage servicing rights	0		0		0
Derivative liability contract					383
Estimated Fair Value | Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	66,555		66,555		100,035
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,979,154		1,979,154		2,016,864
Mortgage servicing rights	12,334		12,334		11,555
Derivative liability contract	6,622,896		6,622,896		383
Carrying Amount | Significant Unobservable Inputs (Level 3) | Fair Value Measured on a Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	106,388		106,388		167,078
Long-lived assets to be disposed of by sale	$ 566		$ 566		$ 1,513

XML

Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and due from banks	$ 124,275	$ 142,502
Federal funds sold	1,215	309
Interest bearing deposits in banks	485,845	329,636
Total cash and cash equivalents	611,335	472,447
Investment securities:
Available-for-sale	1,979,154	2,016,864
Held-to-maturity (estimated fair values of $199,078 and $161,877 at September 30, 2012 and December 31, 2011, respectively)	187,573	152,781
Total investment securities	2,166,727	2,169,645
Loans held for investment	4,107,171	4,133,028
Mortgage loans held for sale	72,880	53,521
Total loans	4,180,051	4,186,549
Less allowance for loan losses	99,006	112,581
Net loans	4,081,045	4,073,968
Premises and equipment, net of accumulated depreciation	188,851	184,771
Goodwill	183,673	183,673
Company-owned life insurance	76,371	74,880
Other real estate owned (OREO)	39,971	37,452
Accrued interest receivable	33,416	31,974
Mortgage servicing rights, net of accumulated amortization and impairment reserve	12,334	11,555
Deferred tax asset, net	1,638	9,628
Core deposit intangibles, net of accumulated amortization	6,291	7,357
Other assets	59,500	68,177
Total assets	7,461,152	7,325,527
Deposits:
Non-interest bearing	1,443,773	1,271,709
Interest bearing	4,591,959	4,555,262
Total deposits	6,035,732	5,826,971
Securities sold under repurchase agreements	460,805	516,243
Accounts payable and accrued expenses	40,386	42,248
Accrued interest payable	6,706	8,123
Long-term debt	37,170	37,200
Other borrowed funds	6	7
Subordinated debentures held by subsidiary trusts	82,477	123,715
Total liabilities	6,663,282	6,554,507
Stockholders' equity:
Nonvoting noncumulative preferred stock without par value; authorized 100,000 shares; issued and outstanding 5,000 shares as of March 31, 2012 and December 31, 2011	50,000	50,000
Common stock	270,553	266,842
Retained earnings	458,506	435,144
Accumulated other comprehensive income, net	18,811	19,034
Total stockholders' equity	797,870	771,020
Total liabilities and stockholders' equity	$ 7,461,152	$ 7,325,527

XML

Common Stock (Details) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Class A Common Stock
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	17,019,375	16,443,429
Class B Common Stock
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	26,233,008	26,540,745

XML

Consolidated Statements of Changes in Stockholders Equity (Unaudited) (USD $) In Thousands, unless otherwise specified	Total	Preferred stock	Common stock	Retained earnings	Accumulated other comprehensive income
Beginning Balance at Dec. 31, 2010	$ 736,802	$ 50,000	$ 264,174	$ 413,253	$ 9,375
Comprehensive income:
Net income	31,281	0	0	31,281	0
Other comprehensive income, net of tax	14,707	0	0	0	14,707
Common stock transactions:
Common shares purchased and retired 18,333 and 14,464 in 2012 and 2011 respectively	(197)	0	(197)	0	0
Common shares issued 23,973 and 15,440 in 2012 and 2011 respectively	0	0	0	0	0
Non-vested common shares issued 122,912 and 130,904 in 2012 and 2011 respectively	0	0	0	0	0
3,193 and 20,039 non-vested common shares forfeited in 2012 and 2011 respectively	(101)	0	(101)	0	0
Non-vested liability awards vesting during period	195	0	195	0	0
144,346 and 67,197 stock options exercised, net of 102,213 and 114,211 shares tendered in payment of option price and income tax withholding amounts in 2012 and 2011 respectively	272	0	272	0	0
Tax benefit of stock-based compensation	204	0	204	0	0
Stock-based compensation expense	1,770	0	1,770	0	0
Cash dividends declared:
Common ($0.36 and $0.3375 per share in 2012 and 2011 respectively)	(14,419)	0	0	(14,419)	0
Preferred (6.75% per share in 2012 and 2011)	(2,559)	0	0	(2,559)	0
Ending Balance at Sep. 30, 2011	767,955	50,000	266,317	427,556	24,082
Beginning Balance at Dec. 31, 2011	771,020	50,000	266,842	435,144	19,034
Comprehensive income:
Net income	41,379	0	0	41,379	0
Other comprehensive income, net of tax	(223)	0	0	0	(223)
Common stock transactions:
Common shares purchased and retired 18,333 and 14,464 in 2012 and 2011 respectively	(262)	0	(262)	0	0
Common shares issued 23,973 and 15,440 in 2012 and 2011 respectively	0	0	0	0	0
Non-vested common shares issued 122,912 and 130,904 in 2012 and 2011 respectively	0	0	0	0	0
3,193 and 20,039 non-vested common shares forfeited in 2012 and 2011 respectively	0	0	0	0	0
144,346 and 67,197 stock options exercised, net of 102,213 and 114,211 shares tendered in payment of option price and income tax withholding amounts in 2012 and 2011 respectively	1,326	0	1,326	0	0
Tax benefit of stock-based compensation	296	0	296	0	0
Stock-based compensation expense	2,351	0	2,351	0	0
Cash dividends declared:
Common ($0.36 and $0.3375 per share in 2012 and 2011 respectively)	(15,448)	0	0	(15,448)	0
Preferred (6.75% per share in 2012 and 2011)	(2,569)	0	0	(2,569)	0
Ending Balance at Sep. 30, 2012	$ 797,870	$ 50,000	$ 270,553	$ 458,506	$ 18,811

XML

Investment Securities Gross Unrealized Losses and Fair Values of Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012 securities	Dec. 31, 2011 securities
Available-for-Sale:
Available-for-Sale, Less Than 12 Months Fair Value	$ 155,991	$ 333,344
Available-for-Sale, Less Than 12 Months Gross Unrealized Losses	(1,305)	(686)
Available-for-Sale, 12 Months or More Fair Value	154	177
Available-for-Sale, 12 Months or More Gross Unrealized Losses	(1)	(6)
Available-for-Sale, Total Fair Value	156,145	333,521
Available-for-Sale, Total Gross Unrealized Losses	(1,306)	(692)
Available-for-Sale and Held-to-Maturity:
Investment Securities in an Unrealized Loss Position (Number of Securities)	30	24
Obligations of U.S. government agencies
Available-for-Sale:
Available-for-Sale, Less Than 12 Months Fair Value	31,855	287,404
Available-for-Sale, Less Than 12 Months Gross Unrealized Losses	(39)	(662)
Available-for-Sale, 12 Months or More Fair Value	0	0
Available-for-Sale, 12 Months or More Gross Unrealized Losses	0	0
Available-for-Sale, Total Fair Value	31,855	287,404
Available-for-Sale, Total Gross Unrealized Losses	(39)	(662)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
Available-for-Sale:
Available-for-Sale, Less Than 12 Months Fair Value	124,136	45,694
Available-for-Sale, Less Than 12 Months Gross Unrealized Losses	(1,266)	(14)
Available-for-Sale, 12 Months or More Fair Value	0	0
Available-for-Sale, 12 Months or More Gross Unrealized Losses	0	0
Available-for-Sale, Total Fair Value	124,136	45,694
Available-for-Sale, Total Gross Unrealized Losses	(1,266)	(14)
Private mortgage-backed securities
Available-for-Sale:
Available-for-Sale, Less Than 12 Months Fair Value	0	246
Available-for-Sale, Less Than 12 Months Gross Unrealized Losses	0	(10)
Available-for-Sale, 12 Months or More Fair Value	154	177
Available-for-Sale, 12 Months or More Gross Unrealized Losses	(1)	(6)
Available-for-Sale, Total Fair Value	154	423
Available-for-Sale, Total Gross Unrealized Losses	(1)	(16)
State, county and municipal securities
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	4,961	0
Held-to-Maturity, Less than 12 Months Gross Unrealized Losses	(39)	0
Held-to-Maturity, 12 Months or More Fair Value	696	773
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	(8)	(17)
Held-to-Maturity, Total Fair Value	5,657	773
Held-to-Maturity, Total Gross Unrealized Losses	$ (47)	$ (17)

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Financial assets and financial liabilities measured at fair value on a recurring basis are as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale:
Obligations of U.S. government agencies	$	919,285	$	—	$	919,285	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,059,261		—		1,059,261		—
Private mortgage-backed securities	608		—		608		—
Mortgage servicing rights	14,082		—		14,082		—

			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale:
Obligations of U.S. government agencies	$	1,138,118	$	—	$	1,138,118	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	877,997		—		877,997		—
Private mortgage-backed securities	749		—		749		—
Mortgage servicing rights	11,910		—		11,910		—
Derivative liability contract	383		—		—		383

The following table reconciles the beginning and ending balances of the derivative liability contract measured at fair value on a recurring basis using significant unobservable (Level 3) inputs during the nine months ended September 30, 2012 and 2011:

Nine Months Ended September 30,	2012			2011
Balance, beginning of period	$	383		$	86
Accruals during the period	—			164
Cash payments during the period	(383		)	(128		)
Balance, end of period	$	—		$	122

There were no transfers between levels of the fair value hierarchy during the nine months endedSeptember 30, 2012 or 2011.

The methodologies used by the Company in determining the fair values of each class of financial instruments are based primarily on the use of independent, market-based data to reflect a value that would be reasonably expected in an orderly transaction between market participants at the measurement date. The Company obtains fair value measurements for investment securities from an independent pricing service and evaluates mortgage servicing rights for impairment using an independent valuation service. The vendors chosen by the Company are widely recognized vendors whose evaluations support the pricing functions of financial institutions, investment and mutual funds, and portfolio managers. The Company has documented and evaluated the pricing methodologies used by the vendors and maintains internal processes that regularly test valuations. These internal processes include obtaining and reviewing available reports on internal controls, evaluating the prices for reasonableness given market changes, obtaining and evaluating the inputs used in the model for a sample of securities, investigating anomalies and confirming determinations through discussions with the vendor. For investment securities, if needed, a broker may be utilized to determine the reported fair value. Further details on the methods used to estimate the fair value of each class of financial instruments above are discussed below:

Investment Securities Available-for-Sale. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the investment's terms and conditions, among other things.

Mortgage Servicing Rights. Mortgage servicing rights are initially recorded at fair value based on comparable market quotes and are amortized in proportion to and over the period of estimated net servicing income. Mortgage servicing rights are evaluated quarterly for impairment using an independent valuation service. The valuation service utilizes discounted cash flow modeling techniques, which consider observable data that includes market consensus prepayment speeds and the predominant risk characteristics of the underlying loans including loan type, note rate and loan term. Management believes the significant inputs utilized in the valuation model are observable in the market.

Derivative Liability Contract. In conjunction with the sale of all of its Class B shares of Visa, Inc. (“Visa”) common stock in 2009, the Company entered into a derivative liability contract with the purchaser whereby the Company will make or receive cash payments based on subsequent changes in the conversion rate of the Class B shares into Class A shares of Visa. The conversion rate is dependent upon the resolution of certain litigation involving Visa U.S.A. Inc. card association or its affiliates. The fair value of the derivative liability contract is estimated utilizing an internal valuation model with significant unobservable inputs including the Company's expectations regarding the ultimate resolution of the Visa litigation and loss severity in the event of unfavorable litigation outcomes. The probability of unfavorable litigation outcomes and the estimation of loss severity is determined through review of Visa's press releases and public filings made with the Securities and Exchange Commission and management's estimation of the effect of changes in litigation status on the value of the derivative liability contract. On July 13, 2012, Visa entered into a memorandum of understanding to enter into a proposed settlement of certain litigation. If approved, the proposed settlement will not result in additional material liability to the Company.

Additionally, from time to time, certain assets are measured at fair value on a non-recurring basis. Adjustments to fair value generally result from the application of lower-of-cost-or-market accounting or write-downs of individual assets due to impairment.

The following table presents information about the Company’s assets and liabilities measured at fair value on a non-recurring basis.

			Fair Value Measurements at Reporting Date Using
	Balance as of September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	66,555	$	—	$	—	$	66,555
Other real estate owned	17,089		—		—		17,089
Long-lived assets to be disposed of by sale	496		—		496		—
			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	100,035	$	—	$	—	$	100,035
Other real estate owned	17,000		—		—		17,000

Impaired Loans. Collateralized impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral. The impaired loans are reported at fair value through specific valuation allowance allocations. In addition, when it is determined that the fair value of an impaired loan is less than the recorded investment in the loan, the carrying value of the loan is adjusted to fair value through a charge to the allowance for loan losses. Collateral values are estimated using independent appraisals and management estimates of current market conditions. As of September 30, 2012, certain impaired loans with a carrying value of $106,388 were reduced by specific valuation allowance allocations of $13,671 and partial loan charge-offs of $26,162 resulting in a reported fair value of $66,555. As of December 31, 2011, certain impaired loans with a carrying value of $167,078 were reduced by specific valuation allowance allocations of $32,838 and partial loan charge-offs of $34,205 resulting in a reported fair value of $100,035.

OREO.The fair values of OREO are estimated using independent appraisals and management estimates of current market conditions. Upon initial recognition, write-downs based on the foreclosed asset's fair value at foreclosure are reported through charges to the allowance for loan losses. Periodically, the fair value of foreclosed assets is remeasured with any subsequent write-downs charged to OREO expense in the period in which they are identified. Write-downs of $3,457 during the nine months ended September 30, 2012 included adjustments of $625 directly related to receipt of updated appraisals and $2,832 based on management estimates of the current fair value of properties. Write-downs of $5,972 during the nine months ended September 30, 2011 included adjustments of $3,521 directly related to receipt of updated appraisals and $2,451 based on management estimates of the current fair value of properties.

Long-lived Assets to be Disposed of by Sale. Long-lived assets to be disposed of by sale are carried at the lower of carrying value or fair value less estimated costs to sell. The fair values of long-lived assets to be disposed of by sale are based upon observable market data and management estimates of current market conditions. As of September 30, 2012, a long-lived asset to be disposed of by sale with a carrying value of $566 was reduced by write-downs of $70 charged to other expense resulting in a reported fair value of $496. As of December 31, 2011, the Company had a long-lived asset to be disposed of by sale of $1,513 that was carried at cost.

In addition, mortgage loans held for sale are required to be measured at the lower of cost or fair value. The fair value of mortgage loans held for sale is based upon binding contracts or quotes or bids from third party investors. As of September 30, 2012 and December 31, 2011, all mortgage loans held for sale were recorded at cost.

The Company is required to disclose the fair value of financial instruments for which it is practical to estimate fair value. The methodologies for estimating the fair value of financial instruments that are measured at fair value on a recurring or non-recurring basis are discussed above. The methodologies for estimating the fair value of other financial instruments are discussed below. For financial instruments bearing a variable interest rate where no credit risk exists, it is presumed that recorded book values are reasonable estimates of fair value.

Financial Assets. Carrying values of cash, cash equivalents and accrued interest receivable approximate fair values due to the liquid and/or short-term nature of these instruments. Fair values for investment securities held-to-maturity are obtained from an independent pricing service, which considers observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the investment’s terms and conditions, among other things. Fair values of fixed rate loans and variable rate loans that reprice on an infrequent basis are estimated by discounting future cash flows using current interest rates at which similar loans with similar terms would be made to borrowers of similar credit quality. Carrying values of variable rate loans that reprice frequently, and with no change in credit risk, approximate the fair values of these instruments.

Financial Liabilities. The fair values of demand deposits, savings accounts, securities sold under repurchase agreements and accrued interest payable are the amount payable on demand at the reporting date. The fair values of fixed-maturity certificates of deposit are estimated using external market rates currently offered for deposits with similar remaining maturities. The carrying values of the interest bearing demand notes to the United States Treasury are deemed an approximation of fair values due to the frequent repayment and repricing at market rates. The fair value of the derivative contract was estimated by discounting cash flows using assumptions regarding the expected outcome of related litigation. The floating rate term notes, floating rate subordinated debentures, floating rate subordinated term loan and unsecured demand notes bear interest at floating market rates and, as such, carrying amounts are deemed to approximate fair values. The fair values of notes payable to the FHLB, fixed rate subordinated term debt, fixed rate subordinated debentures and capital lease obligation are estimated by discounting future cash flows using current rates for advances with similar characteristics.

Commitments to Extend Credit and Standby Letters of Credit. The fair value of commitments to extend credit and standby letters of credit, based on fees currently charged to enter into similar agreements, is not significant.

The estimated fair values of financial instruments that are reported at amortized cost in the Company's consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, are as follows:

					Fair Value Measurements at Reporting Date Using
As of September 30, 2012	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	611,335	$	611,335	$	—	$	611,335	$	—
Investment securities available-for-sale	1,979,154		1,979,154		—		1,979,154		—
Investment securities held-to-maturity	187,573		199,078		—		199,078		—
Accrued interest receivable	33,416		33,416		—		33,416		—
Mortgage servicing rights, net	12,334		14,082		—		14,082		—
Net loans	4,081,045		4,067,457		—		4,000,902		66,555
Total financial assets	$	6,904,857	$	6,904,522	$	—	$	6,837,967	$	66,555
Financial liabilities:
Total deposits, excluding time deposits	$	4,612,346	4,612,346		—		4,612,346		—
Time deposits	1,423,386		1,431,066		—		1,431,066		—
Securities sold under repurchase agreements	460,805		460,805		—		460,805		—
Other borrowed funds	6		6		—		6		—
Accrued interest payable	6,706		6,706		—		6,706		—
Long-term debt	37,170		34,003		—		34,003		—
Subordinated debentures held by subsidiary    trusts	82,477		57,656		—		57,656		—
Total financial liabilities	$	6,622,896	$	6,602,588	$	—	$	6,602,588	$	—

					Fair Value Measurements at Reporting Date Using
As of December 31, 2011	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	472,447	$	472,447	$	—	$	472,447	$	—
Investment securities available-for-sale	2,016,864		2,016,864		—		2,016,864		—
Investment securities held-to-maturity	152,781		161,877		—		161,877		—
Accrued interest receivable	31,974		31,974		—		31,974		—
Mortgage servicing rights, net	11,555		11,910		—		11,910		—
Net loans	4,073,968		4,064,718		—		3,964,683		100,035
Total financial assets	$	6,759,589	$	6,759,790	$	—	$	6,659,755	$	100,035
Financial liabilities:
Total deposits, excluding time deposits	$	4,269,631	$	4,269,631	$	—	$	4,269,631	$	—
Time deposits	1,557,340		1,565,558		—		1,565,558		—
Securities sold under repurchase agreements	516,243		516,243		—		516,243		—
Other borrowed funds	7		7		—		7		—
Accrued interest payable	8,123		8,123		—		8,123		—
Long-term debt	37,200		34,341		—		34,341		—
Subordinated debentures held by subsidiary    trusts	123,715		102,525		—		102,525		—
Derivative contract liability	383		383		—		—		383
Total financial liabilities	$	6,512,642	$	6,496,811	$	—	$	6,496,428	$	383

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Maturities of Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity
Available-for-Sale Amortized Cost, Within One Year	$ 432,052
Available-for-Sale Amortized Cost, After One Year but Within Five Years	1,131,727
Available-for-Sale Amortized Cost, After Five Years but Within Ten Years	227,503
Available-for-Sale Amortized Cost, After Ten Years	154,695
Available-for-Sale Amortized Cost, Investments With Stated Maturity, Total	1,945,977
Available-for-Sale Amortized Cost, Investments With No Stated Maturity	0
Available-for-Sale Amortized Cost, Total	1,945,977
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity
Available-for-Sale Estimated Fair Value, Within One Year	440,039
Available-for-Sale Estimated Fair Value, After One Year but Within Five Years	1,147,641
Available-for-Sale Estimated Fair Value, After Ten Years	232,493
Available-for-Sale Estimated Fair Value, After Five Years but Within Ten Years	158,981
Available-for-Sale Estimated Fair Value, Investments With Stated Maturity, Total	1,979,154
Available-for-Sale Estimated Fair Value, Investments With No Stated Maturity	0
Available-for-Sale, Estimated Fair Value	1,979,154	2,016,864
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount
Held-to-Maturity Amortized Cost, Within One Year	5,891
Held-to-Maturity Amortized Cost, After One Year but Within Five Years	33,837
Held-to-Maturity Amortized Cost, After Five Years but Within Ten Years	79,891
Held-to-Maturity Amortized Cost, After Ten Years	67,831
Held-to-Maturity Amortized Cost, Investments With Stated Maturity, Total	187,450
Held-to-Maturity Amortized Cost, Investments With No Stated Maturity	123
Held-to-Maturity Amortized Cost, Total	187,573
Held-to-maturity Securities, Debt Maturities, Fair Value, Rolling Maturity
Held-to-Maturity Estimated Fair Value, Within One Year	5,822
Held-to-Maturity Estimated Fair Value, After One Year but Within Five Years	34,853
Held-to-Maturity Estimated Fair Value, After Five Years but Within Ten Years	84,811
Held-to-Maturity Estimated Fair Value, After Ten Years	73,469
Held-to-Maturity Estimated Fair Value, Investments With Stated Maturity, Total	198,955
Held-to-Maturity Estimated Fair Value, Investments With No Stated Maturity	123
Held-to-Maturity Estimated Fair Value, Total	199,078
Callable Within One Year
Available-for-sale Securities and Held-to-maturity Securities
Investment Securities Primarily Classified as Available-for-Sale, Amortized Costs, After One Year but Within Five Years	490,246
Investment Securities Primarily Classified as Available-for-Sale, Fair Value, After One Year but Within Five Years	491,469
Callable Structured Notes
Available-for-sale Securities and Held-to-maturity Securities
Investment Securities Primarily Classified as Available-for-Sale, Amortized Costs, After One Year but Within Five Years	120,273
Investment Securities Primarily Classified as Available-for-Sale, Fair Value, After One Year but Within Five Years	$ 120,519

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Subsequent events have been evaluated for potential recognition and disclosure through the date financial statements were filed with the Securities and Exchange Commission. No events requiring recognition or disclosure were identified.

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Consolidated Statements of Changes in Stockholders Equity (Unaudited) (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Common stock
Common stock transactions:
Common shares purchased and retired	18,333	14,464
Common shares issued	23,973	15,440
Non-vested common shares issued	122,912	130,904
Non-vested common shares forfeited	4,689	20,039
Stock options exercised	144,346	67,197
Shares tendered in payment of option price and income tax withholding amounts	102,213	114,211
Retained earnings
Cash dividends declared:
Common (in dollars per share)	0.36	0.3375
Preferred (in dollars per share)	6.75%	6.75%

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Investment securities:
Held-to-maturity, fair values	$ 199,078	$ 161,877
Stockholders' equity:
Nonvoting noncumulative preferred stock, par value
Nonvoting noncumulative preferred stock, authorized shares	100,000	100,000
Nonvoting noncumulative preferred stock, issued shares	5,000	5,000
Nonvoting noncumulative preferred stock, outstanding shares	5,000	5,000

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Regulatory Capital

9 Months Ended

Sep. 30, 2012

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

The Company is subject to the regulatory capital requirements administered by federal banking regulators and the Federal Reserve. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and tier 1 capital to risk-weighted assets, and of tier 1 capital to average assets, as defined in the regulations. As of September 30, 2012 and December 31, 2011, the Company exceeded all capital adequacy requirements to which it is subject.

Actual capital amounts and ratios and selected minimum regulatory thresholds for the Company and its bank subsidiary, First Interstate Bank (“FIB”), as of September 30, 2012 and December 31, 2011 are presented in the following table:

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2012
Total risk-based capital:
Consolidated	$	790,896	16.5	%	$	382,980	8.0	%	NA		NA
FIB	687,085		14.4		381,297		8.0		$	476,621	10.0	%
Tier 1 risk-based capital:
Consolidated	695,572		14.5		191,490		4.0		NA		NA
FIB	612,021		12.8		190,648		4.0		$	285,973	6.0
Leverage capital ratio:
Consolidated	695,572		9.6		291,093		4.0		NA		NA
FIB	612,021		8.4		290,214		4.0		$	362,768	5.0

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2011
Total risk-based capital:
Consolidated	$	800,354	16.5	%	$	387,082	8.0	%	NA		NA
FIB	663,860		13.8		384,987		8.0		$	481,234	10.0	%
Tier 1 risk-based capital:
Consolidated	704,229		14.6		193,541		4.0		NA		NA
FIB	588,059		12.2		192,494		4.0		$	288,740	6.0
Leverage capital ratio:
Consolidated	704,229		9.8		286,303		4.0		NA		NA
FIB	588,059		8.2		285,358		4.0		$	356,698	5.0

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012
Entity Registrant Name	FIRST INTERSTATE BANCSYSTEM INC
Entity Central Index Key	0000860413
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A Common Stock
Entity Common Stock, Shares Outstanding	17,019,375
Class B Common Stock
Entity Common Stock, Shares Outstanding	26,233,008

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In the normal course of business, the Company is involved in various claims and litigation. In the opinion of management, following consultation with legal counsel, the ultimate liability or disposition thereof is not expected to have a material adverse effect on the consolidated financial condition, results of operations or liquidity of the Company.

The Company had commitments under construction contracts of $867 as of September 30, 2012.

The Company had commitments to purchase held-to-maturity municipal securities of $988 as of September 30, 2012.

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Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest income:
Interest and fees on loans	$ 57,418	$ 61,372	$ 173,412	$ 185,238
Interest and dividends on investment securities:
Taxable	9,194	10,721	28,357	31,281
Exempt from federal taxes	1,223	1,188	3,667	3,553
Interest on deposits in banks	336	200	852	794
Interest on federal funds sold	4	2	11	11
Total interest income	68,175	73,483	206,299	220,877
Interest expense:
Interest on deposits	5,414	7,905	17,455	26,679
Interest on securities sold under repurchase agreements	144	137	452	545
Interest on long-term debt	502	498	1,495	1,482
Interest on subordinated debentures held by subsidiary trusts	1,110	1,451	4,084	4,354
Total interest expense	7,170	9,991	23,486	33,060
Net interest income	61,005	63,492	182,813	187,817
Provision for loan losses	9,500	14,000	32,750	44,400
Net interest income after provision for loan losses	51,505	49,492	150,063	143,417
Non-interest income:
Income from the origination and sale of loans	11,665	5,512	29,469	13,066
Other service charges, commissions and fees	8,774	8,479	25,452	23,627
Service charges on deposit accounts	4,395	4,609	13,011	13,104
Wealth management revenues	3,557	3,202	10,655	9,980
Investment securities gains, net	66	38	295	56
Other income	1,725	1,285	5,344	5,042
Total non-interest income	30,182	23,125	84,226	64,875
Non-interest expense:
Salaries and wages	23,341	20,801	66,545	61,557
Employee benefits	7,447	6,087	23,232	20,922
Occupancy, net	3,793	4,180	11,818	12,408
Furniture and equipment	3,231	3,018	9,558	9,367
Outsourced technology services	2,182	2,235	6,627	6,688
OREO expense, net of income	2,612	2,878	5,523	6,631
FDIC insurance premiums	1,622	1,631	4,818	5,726
Professional fees	1,050	995	2,985	2,500
Mortgage servicing rights amortization	879	807	2,591	2,285
Mortgage servicing rights impairment recovery	55	1,168	(761)	848
Core deposit intangibles amortization	355	362	1,066	1,085
Other expenses	10,497	10,879	37,801	32,174
Total non-interest expense	57,064	55,041	171,803	162,191
Income before income tax expense	24,623	17,576	62,486	46,101
Income tax expense	8,468	5,655	21,107	14,820
Net income	16,155	11,921	41,379	31,281
Preferred stock dividends	863	862	2,569	2,559
Net income available to common stockholders	$ 15,292	$ 11,059	$ 38,810	$ 28,722
Basic earnings per common share	$ 0.36	$ 0.26	$ 0.90	$ 0.67
Diluted earnings per common share	$ 0.35	$ 0.26	$ 0.90	$ 0.67

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Allowance For Loan Losses

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Allowance For Loan Losses

Allowance For Loan Losses

The following tables present a summary of changes in the allowance for loan losses by portfolio segment for the periods indicated.

Three Months Ended September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
Provision charged to operating expense	5,371			192			4,222			(285		)	—		9,500
Less loans charged-off	(9,138		)	(1,340		)	(4,335		)	—			—		(14,813		)
Add back recoveries of loans previously    charged-off	387			465			666			7			—		1,525
Ending balance	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
Nine Months Ended September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	87,396		$	8,594		$	15,325		$	1,266		$	—	$	112,581
Provision charged to operating expense	22,172			385			10,530			(337		)	—		32,750
Less loans charged-off	(36,645		)	(3,862		)	(10,028		)	(110		)	—		(50,645		)
Add back recoveries of loans previously    charged-off	1,420			1,474			1,401			25			—		4,320
Ending balance	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
As of September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	11,348		$	—		$	2,924		$	412		$	—	$	14,684
Loans collectively evaluated for impairment	62,995			6,591			14,304			432			—		84,322
Allowance for loan losses	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
As of September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	140,460		$	—		$	13,408		$	590		$	—	$	154,458
Collectively evaluated for impairment	2,600,908			629,757			658,692			134,877			1,359		4,025,593
Total loans	$	2,741,368		$	629,757		$	672,100		$	135,467		$	1,359	$	4,180,051

Three Months Ended September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	90,243		$	8,526		$	24,434		$	1,376		$	—	$	124,579
Provision charged to operating expense	9,984			1,676			2,206			134			—		14,000
Less loans charged-off	(12,210		)	(1,682		)	(6,498		)	(15		)	—		(20,405		)
Add back recoveries of loans previously    charged-off	1,386			453			287			3			—		2,129
Ending balance	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303

Nine Months Ended September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	84,181		$	9,332		$	25,354		$	1,613		$	—	$	120,480
Provision charged to operating expense	33,080			2,927			8,461			(68		)	—		44,400
Less loans charged-off	(29,598		)	(4,641		)	(14,547		)	(60		)	—		(48,846		)
Add back recoveries of loans previously    charged-off	1,740			1,355			1,161			13			—		4,269
Ending balance	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303
As of September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	27,344		$	—		$	9,422		$	239		$	—	$	37,005
Loans collectively evaluated for impairment	62,059			8,973			11,007			1,259			—		83,298
Allowance for loan losses	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303
As of September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	223,386		$	—		$	31,470		$	880		$	—	$	255,736
Collectively evaluated for impairment	2,582,202			627,139			671,540			135,848			3,252		4,019,981
Total loans	$	2,805,588		$	627,139		$	703,010		$	136,728		$	3,252	$	4,275,717

The Company performs a quarterly assessment of the adequacy of its allowance for loan losses in accordance with generally accepted accounting principles. The methodology used to assess the adequacy is consistently applied to the Company's loan portfolio and consists of three elements: (1) specific valuation allowances based on probable losses on impaired loans; (2) historical valuation allowances based on loan loss experience for similar loans with similar characteristics and trends; and (3) general valuation allowances determined based on changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, general economic conditions and other qualitative risk factors both internal and external to the Company.

Specific allowances are established for loans where management has determined that probability of a loss exists by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies and any relevant qualitative or economic factors impacting the loan. Historical valuation allowances are determined by applying percentage loss factors to the credit exposures from outstanding loans. For commercial, agricultural and real estate loans, loss factors are applied based on the internal risk classifications of these loans. For consumer loans, loss factors are applied on a portfolio basis. For commercial, agriculture and real estate loans, loss factor percentages are based on a migration analysis of our historical loss experience, designed to account for credit deterioration. For consumer loans, loss factor percentages are based on a one-year loss history. General valuation allowances are determined by evaluating, on a quarterly basis, changes in the nature and volume of the loan portfolio, overall portfolio quality, industry concentrations, current economic and regulatory conditions and the estimated impact of these factors on historical loss rates.

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Loans

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Loans

Loans

The following table presents loans by class as of the dates indicated:

	September 30, 2012		December 31, 2011
Real estate loans:
Commercial	$	1,513,784	$	1,553,155
Construction:
Land acquisition & development	233,082		278,613
Residential	50,895		61,106
Commercial	56,097		61,054
Total construction loans	340,074		400,773
Residential	639,235		571,943
Agricultural	175,395		175,302
Total real estate loans	2,668,488		2,701,173
Consumer:
Indirect consumer	431,449		407,651
Other consumer	139,984		147,487
Credit card	58,324		60,933
Total consumer loans	629,757		616,071
Commercial	672,100		693,261
Agricultural	135,467		119,710
Other, including overdrafts	1,359		2,813
Loans held for investment	4,107,171		4,133,028
Mortgage loans held for sale	72,880		53,521
Total loans	$	4,180,051	$	4,186,549

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the period indicated:

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of September 30, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	15,120	$	3,061	$	643	$	18,824	$	1,443,893	$	51,067	$	1,513,784
Construction:
Land acquisition & development	3,518		326		—		3,844		199,991		29,247		233,082
Residential	1,049		—		—		1,049		47,077		2,769		50,895
Commercial	1,875		—		—		1,875		43,703		10,519		56,097
Total construction loans	6,442		326		—		6,768		290,771		42,535		340,074
Residential	3,674		1,064		2,382		7,120		621,601		10,514		639,235
Agricultural	6,419		22		217		6,658		163,943		4,794		175,395
Total real estate loans	31,655		4,473		3,242		39,370		2,520,208		108,910		2,668,488
Consumer:
Indirect consumer	2,792		385		47		3,224		427,774		451		431,449
Other consumer	822		129		24		975		137,904		1,105		139,984
Credit card	368		280		528		1,176		57,125		23		58,324
Total consumer loans	3,982		794		599		5,375		622,803		1,579		629,757
Commercial	5,185		1,808		823		7,816		652,420		11,864		672,100
Agricultural	234		146		—		380		134,509		578		135,467
Other, including overdrafts							—		1,359		—		1,359
Loans held for investment	41,056		7,221		4,664		52,941		3,931,299		122,931		4,107,171
Mortgage loans originated for sale	—		—		—		—		72,880		—		72,880
Total loans	$	41,056	$	7,221	$	4,664	$	52,941	$	4,004,179	$	122,931	$	4,180,051

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2011	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	22,124	$	7,871	$	630	$	30,625	$	1,455,139	$	67,391	$	1,553,155
Construction:
Land acquisition & development	5,251		2,448		867		8,566		208,134		61,913		278,613
Residential	415		—		—		415		56,219		4,472		61,106
Commercial	1,698		—		—		1,698		34,820		24,536		61,054
Total construction loans	7,364		2,448		867		10,679		299,173		90,921		400,773
Residential	4,669		973		1,798		7,440		546,278		18,225		571,943
Agricultural	4,103		1,831		—		5,934		166,119		3,249		175,302
Total real estate loans	38,260		13,123		3,295		54,678		2,466,709		179,786		2,701,173
Consumer:
Indirect consumer	3,078		370		45		3,493		403,695		463		407,651
Other consumer	1,479		436		60		1,975		144,625		887		147,487
Credit card	604		375		585		1,564		59,343		26		60,933
Total consumer loans	5,161		1,181		690		7,032		607,663		1,376		616,071
Commercial	13,721		3,464		405		17,590		657,609		18,062		693,261
Agricultural	476		215		110		801		118,150		759		119,710
Other, including overdrafts	—		2		—		2		2,811		—		2,813
Loans held for investment	57,618		17,985		4,500		80,103		3,852,942		199,983		4,133,028
Mortgage loans originated for sale	—		—		—		—		53,521		—		53,521
Total loans	$	57,618	$	17,985	$	4,500	$	80,103	$	3,906,463	$	199,983	$	4,186,549

If interest on non-accrual loans had been accrued, such income would have approximated $456 and $819 for the three months ended September 30, 2012 and 2011, respectively, and approximated $1,701 and $2,283 for the nine months ended September 30, 2012 and 2011, respectively.

The Company considers impaired loans to include all loans risk rated doubtful, loans placed on non-accrual status and loans renegotiated in troubled debt restructurings with the exception of consumer loans. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:

As of September 30, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	88,185	$	61,509	$	17,143	$	78,652	$	4,453
Construction:
Land acquisition & development	43,595		19,660		12,558		32,218		4,137
Residential	3,333		1,257		1,744		3,001		276
Commercial	13,071		1,379		9,140		10,519		588
Total construction loans	59,999		22,296		23,442		45,738		5,001
Residential	12,044		5,570		5,070		10,640		1,736
Agricultural	5,929		3,293		2,137		5,430		158
Total real estate loans	166,157		92,668		47,792		140,460		11,348
Commercial	13,824		8,338		5,070		13,408		2,924
Agricultural	642		178		412		590		412
Total	$	180,623	$	101,184	$	53,274	$	154,458	$	14,684

As of December 31, 2011	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	97,745	$	62,769	$	23,218	$	85,987	$	6,741
Construction:
Land acquisition & development	73,258		22,300		39,131		61,431		12,084
Residential	13,721		10,427		2,044		12,471		312
Commercial	26,647		3,510		21,026		24,536		5,042
Total construction loans	113,626		36,237		62,201		98,438		17,438
Residential	18,305		2,678		15,626		18,304		3,844
Agricultural	8,018		7,470		—		7,470		—
Total real estate loans	237,694		109,154		101,045		210,199		28,023
Commercial	26,348		7,354		12,284		19,638		4,664
Agricultural	759		496		263		759		151
Total	$	264,801	$	117,004	$	113,592	$	230,596	$	32,838

The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:

	Three Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment	Income Recognized
Real estate:
Commercial	$	81,313	$	366	86,347	$	188
Construction:
Land acquisition & development	36,206		30		66,470	3
Residential	3,151		—		17,627	18
Commercial	10,817		—		23,441	—
Total construction loans	50,174		30		107,538	21
Residential	12,416		1		22,972	160
Agricultural	5,173		9		7,694	56
Total real estate loans	149,076		406		224,551	425
Commercial	15,992		21		33,634	31
Agricultural	748		4		885	—
Total	$	165,816	$	431	259,070	$	456

	Nine Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	82,689	$	1,037	$	83,479	$	390
Construction:
Land acquisition & development	49,528		76		54,494		90
Residential	8,591		—		17,248		55
Commercial	18,601		—		20,371		—
Total construction loans	76,720		76		92,113		145
Residential	14,667		22		19,101		257
Agricultural	7,090		41		6,392		98
Total real estate loans	181,166		1,176		201,085		890
Commercial	16,129		65		32,634		96
Agricultural	1,039		19		925		—
Total	$	198,334	$	1,260	$	234,644	$	986

The amount of interest income recognized by the Company within the period that the loans were impaired was primarily related to loans modified in a troubled debt restructuring that remained on accrual status. Interest payments received on non-accrual impaired loans are applied to principal. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. If interest on impaired loans had been accrued, interest income on impaired loans would have been approximately $452 and $812 for the three months ended September 30, 2012 and 2011, respectively, and approximately $1,688 and $2,263 for the nine months ended September 30, 2012 and 2011, respectively.

Collateralized impaired loans are generally recorded at the fair value of the underlying collateral using discounted cash flows, independent appraisals and management estimates based upon current market conditions. For loans measured under the present value of cash flows method, the change in present value attributable to the passage of time, if applicable, is recognized in the provision for loan losses and thus no interest income is recognized.

Modifications of performing loans are made in the ordinary course of business and are completed on a case-by-case basis as negotiated with the borrower. Loan modifications typically include interest rate concessions, interest only periods of less than twelve months, short-term payment deferrals and extension of amortization periods to provide payment relief. A loan modification is considered a troubled debt restructuring if the borrower is experiencing financial difficulties and the Company, for economic or legal reasons, grants a concession to the borrower that it would not otherwise consider. Certain troubled debt restructurings are on non-accrual status at the time of restructuring and are typically returned to accrual status after considering the borrower's sustained repayment performance in accordance with the restructuring agreement for a period of at least six months and management is reasonably assured of future performance. If the troubled debt restructuring meets these performance criteria and the interest rate granted at the modification is equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk, then the loan will return to performing status and the accrual of interest will resume.

The Company had loans renegotiated in troubled debt restructurings of $90,410 as of September 30, 2012, of which $54,982 were included in non-accrual loans and $35,428 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $94,827 as of December 31, 2011, of which $57,451 were included in non-accrual loans and $37,376 were on accrual status.

The following tables present information on the Company's troubled debt restructurings that occurred during the three and nine months ended September 30, 2012:

		Type of Concession
Three Months Ended September 30, 2012	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Real estate:
Commercial	2	$	—	$	432	$	628	$	—	$	1,060
Construction:
Residential	1	—		—		233		—		233
Total construction loans	1	—		—		233		—		233
Agricultural	1	—		154		—		—		154
Total real estate loans	4	—		586		861		—		1,447
Commercial	1	—		—		—		35		35
Total loans restructured during period	5	$	—	$	586	$	861	$	35	$	1,482

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Nine Months Ended September 30, 2012		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	14	$	—	$	432	$	4,504	$	8,612	$	13,548
Construction:
Land acquisition & development	3	—		229		—		623		852
Residential	1	—		—		233		—		233
Commercial	1	—		—		—		3,155		3,155
Total construction loans	5	—		229		233		3,778		4,240
Residential	2	568		25		—		—		593
Agricultural	1	—		154		—		—		154
Total real estate loans	22	568		840		4,737		12,390		18,535
Consumer:
Other	1	—		69		—		—		69
Total consumer loans	1	—		69		—		—		69
Commercial	6	13		98		—		115		226
Total loans restructured during period	29	$	581	$	1,007	$	4,737	$	12,505	$	18,830

(1) Other includes concessions that reduce or defer payments for a specified period of time and/or extend amortization schedules.

For troubled debt restructurings that were on non-accrual status or otherwise deemed impaired before the modification, a specific reserve may already be recorded. In periods subsequent to modification, the Company continues to evaluate all troubled debt restructurings for possible impairment and recognizes impairment through the allowance. Additionally these loans continue to work their way through the credit cycle through charge-off, pay-off or foreclosure. Financial effects of modifications of troubled debt restructurings may include principal loan forgiveness or other charge-offs directly related to the restructuring. The Company had no charge-offs directly related to modifying troubled debt restructurings during the three and nine months ended September 30, 2012 or 2011.

The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the periods indicated. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.

	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	—	$	—	2	$	507
Construction:
Land acquisition & development	—	—		1	468
Total construction loans	—	—		1	468
Residential	2	599		2	599
Total real estate loans	2	599		5	1,574
Total	2	$	599	5	$	1,574

At September 30, 2012, there were no material commitments to lend additional funds to borrowers whose existing loans have been renegotiated or are classified as non-accrual.

As part of the on-going and continuous monitoring of the credit quality of the Company’s loan portfolio, management tracks internally assigned risk classifications of loans. The Company adheres to a Uniform Classification System developed jointly by the various bank regulatory agencies to internally risk rate loans. The Uniform Classification System defines three broad categories of criticized assets, which the Company uses as credit quality indicators:

Other Assets Especially Mentioned — includes loans that exhibit weaknesses in financial condition, loan structure or documentation, which if not promptly corrected, may lead to the development of abnormal risk elements.

Substandard — includes loans that are inadequately protected by the current sound worth and paying capacity of the borrower. Although the primary source of repayment for a Substandard is not currently sufficient; collateral or other sources of repayment are sufficient to satisfy the debt. Continuance of a Substandard loan is not warranted unless positive steps are taken to improve the worthiness of the credit.

Doubtful — includes loans that exhibit pronounced weaknesses to a point where collection or liquidation in full, on the basis of currently existing facts, conditions and values, is highly questionable and improbable. Doubtful loans are required to be placed on non-accrual status and are assigned specific loss exposure.

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:

As of September 30, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	115,540	$	143,023	$	19,401	$	277,964
Construction:
Land acquisition & development	33,362		25,369		16,198		74,929
Residential	1,444		3,148		1,392		5,984
Commercial	—		799		9,757		10,556
Total construction loans	34,806		29,316		27,347		91,469
Residential	6,901		11,246		8,295		26,442
Agricultural	16,824		11,220		2,532		30,576
Total real estate loans	174,071		194,805		57,575		426,451
Consumer:
Indirect consumer	964		1,682		96		2,742
Other consumer	853		1,583		552		2,988
Credit card	—		358		2,319		2,677
Total consumer loans	1,817		3,623		2,967		8,407
Commercial	43,282		29,318		5,225		77,825
Agricultural	4,136		2,080		412		6,628
Total	$	223,306	$	229,826	$	66,179	$	519,311

As of December 31, 2011	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	129,046	$	153,320	$	25,087	$	307,453
Construction:
Land acquisition & development	37,294		31,873		38,761		107,928
Residential	9,448		5,528		2,044		17,020
Commercial	—		2,620		21,916		24,536
Total construction loans	46,742		40,021		62,721		149,484
Residential	8,149		15,706		15,140		38,995
Agricultural	16,037		18,498		395		34,930
Total real estate loans	199,974		227,545		103,343		530,862
Consumer:
Indirect consumer	1,141		1,729		247		3,117
Other consumer	745		1,361		674		2,780
Credit card	—		486		2,789		3,275
Total consumer loans	1,886		3,576		3,710		9,172
Commercial	34,698		33,478		12,849		81,025
Agricultural	4,345		5,195		263		9,803
Total	$	240,903	$	269,794	$	120,165	$	630,862

The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures. Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.

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Recent Authoritative Accounting Guidance

9 Months Ended

Sep. 30, 2012

Accounting Changes and Error Corrections [Abstract]

Recent Authoritative Accounting Guidance

Recent Authoritative Accounting Guidance

ASU No. 2011-03, "Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements." Accounting Standards Update (“ASU”) No. 2011-03 is intended to improve financial reporting for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. ASU No. 2011-03 removes from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. The provisions of ASU No. 2011-03 became effective for the Company on January 1, 2012 and did not impact the Company's consolidated financial statements, results of operations or liquidity.

ASU No. 2011-04, "Fair Value Measurements (Topic 820) - Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs." ASU No. 2011-04 amends Topic 820, "Fair Value Measurements and disclosures," to converge the fair value measurements guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. ASU 2011-04 clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional fair value disclosures. ASU No. 2011-04 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-05, “Comprehensive Income (Topic 220) - Presentation of Comprehensive Income.” ASU 2011-05 amends Topic 220, “Comprehensive Income,” to require that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, ASU 2011-05 requires entities to present, on the face of the financial statements, reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement or statements where the components of net income and the components of other comprehensive income are presented. The option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated. ASU 2011-05 became effective for the Company on January 1, 2012; however, certain provisions related to the presentation of reclassification adjustments have been deferred by ASU 2011-12 “Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05,” as further discussed below. Adoption of the provisions of ASU 2011-05 did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-08, “Intangibles - Goodwill and Other (Topic 350) - Testing Goodwill for Impairment.” ASU 2011-08 amends Topic 350, “Intangibles - Goodwill and Other,” to give entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. ASU 2011-08 is effective for annual and interim impairment tests beginning after December 15, 2011. The adoption of ASU2011-08 did not have a significant impact on the Company's annual impairment test conducted as of July 1, 2012, or on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-11, “Balance Sheet (Topic 210) - “Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and is not expected to have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2011-12 “Comprehensive Income (Topic 220) - Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” ASU 2011-12 defers changes in ASU No. 2011-05 that relate to the presentation of reclassification adjustments to allow the FASB time to redeliberate whether to require presentation of such adjustments on the face of the financial statements to show the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income. ASU 2011-12 allows entities to continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU No. 2011-05. ASU 2011-12 became effective for the Company on January 1, 2012 and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2012-02 "Intangibles - Goodwill and Other Topics (Topic 350)." ASU 2012-02 amends Topic 350, “Intangibles - Goodwill and Other,” to reduce the cost and complexity of performing an impairment test for indefinite-lived assets by simplifying how an entity tests those assets for impairment and to improve consistency in impairment testing guidance among long-lived asset categories. The amendments in ASU 2012-02 permit an entity to first assess the qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. In addition, ASU 2012-02 provides an entity with an option not to calculate annually the fair value of in indefinite-lived intangible asset if the entity determines that it is not more likely than not that the asset is impaired. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted including for annual and interim impairment test performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued. Adoption of the amendments in ASU 2012-02 will not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

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Financial Instruments with Off-Balance Sheet Risk

9 Months Ended

Sep. 30, 2012

Financial Instruments with Off-Balance Sheet Risk [Abstract]

Financial Instruments with Off-Balance Sheet Risk

Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At September 30, 2012, commitments to extend credit to existing and new borrowers approximated $1,120,190 which included $301,647 on unused credit card lines and $290,844 with commitment maturities beyond one year.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. At September 30, 2012, the Company had outstanding standby letters of credit of $68,895. The estimated fair value of the obligation undertaken by the Company in issuing the standby letters of credit is included in other liabilities in the Company’s consolidated balance sheet.

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Common Stock

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Common Stock

Common Stock

The Company had 17,019,375 and 16,443,429 shares of Class A common stock outstanding as of September 30, 2012 and December 31, 2011, respectively.

The Company had 26,233,008 and 26,540,745 shares of Class B common stock outstanding as of September 30, 2012 and December 31, 2011, respectively.

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OREO

9 Months Ended

Sep. 30, 2012

Repossessed Assets [Abstract]

Other Real Estate Owned

Other Real Estate Owned

Information with respect to the Company's other real estate owned follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	53,817		$	28,323		$	37,452		$	33,632
Additions	3,816			3,385			36,933			9,148
Capitalized improvements	—			—			75			15
Valuation adjustments	(2,310		)	(2,457		)	(3,457		)	(5,972		)
Dispositions	(15,352		)	(4,171		)	(31,032		)	(11,743		)
Ending balance	$	39,971		$	25,080		$	39,971		$	25,080

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Subordinated Debentures Held by Subsidiary Trusts

9 Months Ended

Sep. 30, 2012

Subordinated Borrowings [Abstract]

Subordinated Borrowings Disclosure [Text Block]

Subordinated Debentures Held by Subsidiary Trusts

On June 26, 2012, the Company redeemed 30-year junior subordinated deferrable interest debentures ("Subordinated Debentures") issued by the Company to First Interstate Statutory Trust I ("FIST"). The redemption price of $41,238 was equal to the $1 liquidation amount of each security plus all accrued and unpaid distributions up to the date of redemption. Unamortized issuance costs of $428 were charged to other expense on the date of redemption.

The redemption of the Subordinated Debentures caused a mandatory redemption of $40,000 of 30-year floating rate mandatorily redeemable capital trust preferred securities issued by FIST to third-party investors and $1,238 of common equity securities issued by FIST to the Company.

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Earnings per Common Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Earnings per Common Share

Earnings per Common Share

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period presented, excluding unvested restricted stock. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares determined for the basic earnings per share computation plus the dilutive effects of stock-based compensation using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2012 and 2011.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Net income	$	16,155	$	11,921	$	41,379	$	31,281
Less preferred stock dividends	863		862		2,569		2,559
Net income available to common shareholders, basic and diluted	$	15,292	$	11,059	$	38,810	$	28,722
Weighted average common shares outstanding for basic earnings per share computation	42,989,564		42,774,259		42,943,588		42,737,986
Dilutive effects of stock-based compensation	130,513		67,404		102,968		111,368
Weighted average common shares outstanding for diluted earnings per common share computation	43,120,077		42,841,663		43,046,556		42,849,354
Basic earnings per common share	$	0.36	$	0.26	$	0.90	$	0.67
Diluted earnings per common share	$	0.35	$	0.26	$	0.90	$	0.67

The Company had 2,814,277 and 2,888,192 stock options outstanding as of September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per common share because their effect would be anti-dilutive. The Company had 48,196 and 33,068 shares of unvested restricted stock as of September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per common share because performance conditions for vesting had not been met.

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Investment Securities Realized Gains (Losses) on Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Investments, Debt and Equity Securities [Abstract]
Gross realized gains	$ 66	$ 38	$ 298	$ 56
Gross realized losses	$ 0	$ 0	$ (3)	$ 0

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Schedule of Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Change in net unrealized Gain during period:
Change in net unrealized gain during period, before tax amount	$ 931	$ 2,781	$ (175)	$ 24,200
Change in net unrealized gain during period, tax expense (benefit)	366	1,094	(69)	9,522
Change in net unrealized gain during period, net of tax amount	565	1,687	(106)	14,678
Reclassification adjustment for gains included in net income:
Reclassification adjustment for gains included in net income, before tax amount	(66)	(38)	(295)	(56)
Reclassification adjustment for gains included in net income, tax expense (benefit)	(26)	(15)	(116)	(22)
Reclassification adjustment for gains included in net income, net of tax amount	(40)	(23)	(179)	(34)
Change in net actuarial loss:
Change in net actuarial loss, before tax amount	35	35	102	104
Change in net actuarial loss, tax expense (benefit)	14	14	40	41
Change in net actuarial loss, net of tax amount	21	21	62	63
Other comprehensive income (loss):
Other comprehensive income (loss), before tax	900	2,778	(368)	24,248
Total other comprehensive income, tax expense (benefit)	354	1,093	(145)	9,541
Total other comprehensive income, net of tax amount	$ 546	$ 1,685	$ (223)	$ 14,707

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Other Comprehensive Income

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Other Comprehensive Income

Other Comprehensive Income

The gross amounts of each component of other comprehensive income and the related tax effects are as follows:

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Three Months Ended September 30,	2012			2011			2012			2011			2012			2011
Investment securities available-for sale:
Change in net unrealized gain during period	$	931		$	2,781		$	366		$	1,094		$	565		$	1,687
Reclassification adjustment for net gains included in net income	(66		)	(38		)	(26		)	(15		)	(40		)	(23		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	35			35			14			14			21			21
Total other comprehensive income	$	900		$	2,778		$	354		$	1,093		$	546		$	1,685
	Pre-tax						Tax Expense (Benefit)						Net of Tax
Nine Months Ended September 30,	2012			2011			2012			2011			2012			2011
Investment securities available-for sale:
Change in net unrealized gain during period	$	(175	)	$	24,200		$	(69	)	$	9,522		$	(106	)	$	14,678
Reclassification adjustment for net gains included in net income	(295		)	(56		)	(116		)	(22		)	(179		)	(34		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	102			104			40			41			62			63
Total other comprehensive income	$	(368	)	$	24,248		$	(145	)	$	9,541		$	(223	)	$	14,707

The components of accumulated other comprehensive income, net of income taxes, are as follows:

	September 30, 2012			December 31, 2011
Net unrealized gain on investment securities available-for-sale	$	20,248		$	20,533
Net actuarial loss on defined benefit post-retirement benefit plans	(1,437		)	(1,499		)
Net accumulated other comprehensive income	$	18,811		$	19,034

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Loans (Tables)

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Schedule of Loans by Class

The following table presents loans by class as of the dates indicated:

	September 30, 2012		December 31, 2011
Real estate loans:
Commercial	$	1,513,784	$	1,553,155
Construction:
Land acquisition & development	233,082		278,613
Residential	50,895		61,106
Commercial	56,097		61,054
Total construction loans	340,074		400,773
Residential	639,235		571,943
Agricultural	175,395		175,302
Total real estate loans	2,668,488		2,701,173
Consumer:
Indirect consumer	431,449		407,651
Other consumer	139,984		147,487
Credit card	58,324		60,933
Total consumer loans	629,757		616,071
Commercial	672,100		693,261
Agricultural	135,467		119,710
Other, including overdrafts	1,359		2,813
Loans held for investment	4,107,171		4,133,028
Mortgage loans held for sale	72,880		53,521
Total loans	$	4,180,051	$	4,186,549

Schedule of Recorded Investment in Past Due Loans by Class

The following tables present the contractual aging of the Company’s recorded investment in past due loans by class as of the period indicated:

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of September 30, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	15,120	$	3,061	$	643	$	18,824	$	1,443,893	$	51,067	$	1,513,784
Construction:
Land acquisition & development	3,518		326		—		3,844		199,991		29,247		233,082
Residential	1,049		—		—		1,049		47,077		2,769		50,895
Commercial	1,875		—		—		1,875		43,703		10,519		56,097
Total construction loans	6,442		326		—		6,768		290,771		42,535		340,074
Residential	3,674		1,064		2,382		7,120		621,601		10,514		639,235
Agricultural	6,419		22		217		6,658		163,943		4,794		175,395
Total real estate loans	31,655		4,473		3,242		39,370		2,520,208		108,910		2,668,488
Consumer:
Indirect consumer	2,792		385		47		3,224		427,774		451		431,449
Other consumer	822		129		24		975		137,904		1,105		139,984
Credit card	368		280		528		1,176		57,125		23		58,324
Total consumer loans	3,982		794		599		5,375		622,803		1,579		629,757
Commercial	5,185		1,808		823		7,816		652,420		11,864		672,100
Agricultural	234		146		—		380		134,509		578		135,467
Other, including overdrafts							—		1,359		—		1,359
Loans held for investment	41,056		7,221		4,664		52,941		3,931,299		122,931		4,107,171
Mortgage loans originated for sale	—		—		—		—		72,880		—		72,880
Total loans	$	41,056	$	7,221	$	4,664	$	52,941	$	4,004,179	$	122,931	$	4,180,051

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2011	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	22,124	$	7,871	$	630	$	30,625	$	1,455,139	$	67,391	$	1,553,155
Construction:
Land acquisition & development	5,251		2,448		867		8,566		208,134		61,913		278,613
Residential	415		—		—		415		56,219		4,472		61,106
Commercial	1,698		—		—		1,698		34,820		24,536		61,054
Total construction loans	7,364		2,448		867		10,679		299,173		90,921		400,773
Residential	4,669		973		1,798		7,440		546,278		18,225		571,943
Agricultural	4,103		1,831		—		5,934		166,119		3,249		175,302
Total real estate loans	38,260		13,123		3,295		54,678		2,466,709		179,786		2,701,173
Consumer:
Indirect consumer	3,078		370		45		3,493		403,695		463		407,651
Other consumer	1,479		436		60		1,975		144,625		887		147,487
Credit card	604		375		585		1,564		59,343		26		60,933
Total consumer loans	5,161		1,181		690		7,032		607,663		1,376		616,071
Commercial	13,721		3,464		405		17,590		657,609		18,062		693,261
Agricultural	476		215		110		801		118,150		759		119,710
Other, including overdrafts	—		2		—		2		2,811		—		2,813
Loans held for investment	57,618		17,985		4,500		80,103		3,852,942		199,983		4,133,028
Mortgage loans originated for sale	—		—		—		—		53,521		—		53,521
Total loans	$	57,618	$	17,985	$	4,500	$	80,103	$	3,906,463	$	199,983	$	4,186,549

Schedule of Recorded Investment in Impaired Loans

The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:

As of September 30, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	88,185	$	61,509	$	17,143	$	78,652	$	4,453
Construction:
Land acquisition & development	43,595		19,660		12,558		32,218		4,137
Residential	3,333		1,257		1,744		3,001		276
Commercial	13,071		1,379		9,140		10,519		588
Total construction loans	59,999		22,296		23,442		45,738		5,001
Residential	12,044		5,570		5,070		10,640		1,736
Agricultural	5,929		3,293		2,137		5,430		158
Total real estate loans	166,157		92,668		47,792		140,460		11,348
Commercial	13,824		8,338		5,070		13,408		2,924
Agricultural	642		178		412		590		412
Total	$	180,623	$	101,184	$	53,274	$	154,458	$	14,684

As of December 31, 2011	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	97,745	$	62,769	$	23,218	$	85,987	$	6,741
Construction:
Land acquisition & development	73,258		22,300		39,131		61,431		12,084
Residential	13,721		10,427		2,044		12,471		312
Commercial	26,647		3,510		21,026		24,536		5,042
Total construction loans	113,626		36,237		62,201		98,438		17,438
Residential	18,305		2,678		15,626		18,304		3,844
Agricultural	8,018		7,470		—		7,470		—
Total real estate loans	237,694		109,154		101,045		210,199		28,023
Commercial	26,348		7,354		12,284		19,638		4,664
Agricultural	759		496		263		759		151
Total	$	264,801	$	117,004	$	113,592	$	230,596	$	32,838

The following tables present the average recorded investment in and income recognized on impaired loans for the periods indicated:

	Three Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment	Income Recognized
Real estate:
Commercial	$	81,313	$	366	86,347	$	188
Construction:
Land acquisition & development	36,206		30		66,470	3
Residential	3,151		—		17,627	18
Commercial	10,817		—		23,441	—
Total construction loans	50,174		30		107,538	21
Residential	12,416		1		22,972	160
Agricultural	5,173		9		7,694	56
Total real estate loans	149,076		406		224,551	425
Commercial	15,992		21		33,634	31
Agricultural	748		4		885	—
Total	$	165,816	$	431	259,070	$	456

	Nine Months Ended September 30,
	2012				2011
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	82,689	$	1,037	$	83,479	$	390
Construction:
Land acquisition & development	49,528		76		54,494		90
Residential	8,591		—		17,248		55
Commercial	18,601		—		20,371		—
Total construction loans	76,720		76		92,113		145
Residential	14,667		22		19,101		257
Agricultural	7,090		41		6,392		98
Total real estate loans	181,166		1,176		201,085		890
Commercial	16,129		65		32,634		96
Agricultural	1,039		19		925		—
Total	$	198,334	$	1,260	$	234,644	$	986

Schedule of Loans Renegotiated in Troubled Debt Restructurings

The following tables present information on the Company's troubled debt restructurings that occurred during the three and nine months ended September 30, 2012:

		Type of Concession
Three Months Ended September 30, 2012	Number of Notes	Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)		Principal Balance at Restructure Date
Real estate:
Commercial	2	$	—	$	432	$	628	$	—	$	1,060
Construction:
Residential	1	—		—		233		—		233
Total construction loans	1	—		—		233		—		233
Agricultural	1	—		154		—		—		154
Total real estate loans	4	—		586		861		—		1,447
Commercial	1	—		—		—		35		35
Total loans restructured during period	5	$	—	$	586	$	861	$	35	$	1,482

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Nine Months Ended September 30, 2012		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	14	$	—	$	432	$	4,504	$	8,612	$	13,548
Construction:
Land acquisition & development	3	—		229		—		623		852
Residential	1	—		—		233		—		233
Commercial	1	—		—		—		3,155		3,155
Total construction loans	5	—		229		233		3,778		4,240
Residential	2	568		25		—		—		593
Agricultural	1	—		154		—		—		154
Total real estate loans	22	568		840		4,737		12,390		18,535
Consumer:
Other	1	—		69		—		—		69
Total consumer loans	1	—		69		—		—		69
Commercial	6	13		98		—		115		226
Total loans restructured during period	29	$	581	$	1,007	$	4,737	$	12,505	$	18,830

(1) Other includes concessions that reduce or defer payments for a specified period of time and/or extend amortization schedules.

The following table presents information on the Company's troubled debt restructurings during the previous 12 months for which there was a payment default during the periods indicated. The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.

	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	—	$	—	2	$	507
Construction:
Land acquisition & development	—	—		1	468
Total construction loans	—	—		1	468
Residential	2	599		2	599
Total real estate loans	2	599		5	1,574
Total	2	$	599	5	$	1,574

Schedule of Recorded Investment in Criticized Loans by Class and Credit Quality Indicator

The following tables present the Company’s recorded investment in criticized loans by class and credit quality indicator based on the most recent analysis performed as of the dates indicated:

As of September 30, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	115,540	$	143,023	$	19,401	$	277,964
Construction:
Land acquisition & development	33,362		25,369		16,198		74,929
Residential	1,444		3,148		1,392		5,984
Commercial	—		799		9,757		10,556
Total construction loans	34,806		29,316		27,347		91,469
Residential	6,901		11,246		8,295		26,442
Agricultural	16,824		11,220		2,532		30,576
Total real estate loans	174,071		194,805		57,575		426,451
Consumer:
Indirect consumer	964		1,682		96		2,742
Other consumer	853		1,583		552		2,988
Credit card	—		358		2,319		2,677
Total consumer loans	1,817		3,623		2,967		8,407
Commercial	43,282		29,318		5,225		77,825
Agricultural	4,136		2,080		412		6,628
Total	$	223,306	$	229,826	$	66,179	$	519,311

As of December 31, 2011	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	129,046	$	153,320	$	25,087	$	307,453
Construction:
Land acquisition & development	37,294		31,873		38,761		107,928
Residential	9,448		5,528		2,044		17,020
Commercial	—		2,620		21,916		24,536
Total construction loans	46,742		40,021		62,721		149,484
Residential	8,149		15,706		15,140		38,995
Agricultural	16,037		18,498		395		34,930
Total real estate loans	199,974		227,545		103,343		530,862
Consumer:
Indirect consumer	1,141		1,729		247		3,117
Other consumer	745		1,361		674		2,780
Credit card	—		486		2,789		3,275
Total consumer loans	1,886		3,576		3,710		9,172
Commercial	34,698		33,478		12,849		81,025
Agricultural	4,345		5,195		263		9,803
Total	$	240,903	$	269,794	$	120,165	$	630,862

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Financial Instruments with Off-Balance Sheet Risk (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Entity Information [Line Items]
Credit Extension Commitments	$ 1,120,190
Credit Extension Commitments, Beyond One Year	290,844
Standby Letters of Credit
Entity Information [Line Items]
Credit Extension Commitments	68,895
Unused Credit Card Lines
Entity Information [Line Items]
Credit Extension Commitments	$ 301,647

XML

Schedule of Recorded Investment in Criticized Loans by Class and Credit Quality Indicator (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	$ 4,107,171	$ 4,133,028
Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,513,784	1,553,155
Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	233,082	278,613
Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	50,895	61,106
Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	56,097	61,054
Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	340,074	400,773
Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	639,235	571,943
Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	175,395	175,302
Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,668,488	2,701,173
Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	431,449	407,651
Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	139,984	147,487
Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	58,324	60,933
Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	629,757	616,071
Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	672,100	693,261
Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	135,467	119,710
Other Assets Especially Mentioned
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	223,306	240,903
Other Assets Especially Mentioned | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	115,540	129,046
Other Assets Especially Mentioned | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	33,362	37,294
Other Assets Especially Mentioned | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,444	9,448
Other Assets Especially Mentioned | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	0
Other Assets Especially Mentioned | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	34,806	46,742
Other Assets Especially Mentioned | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	6,901	8,149
Other Assets Especially Mentioned | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	16,824	16,037
Other Assets Especially Mentioned | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	174,071	199,974
Other Assets Especially Mentioned | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	964	1,141
Other Assets Especially Mentioned | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	853	745
Other Assets Especially Mentioned | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	0
Other Assets Especially Mentioned | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,817	1,886
Other Assets Especially Mentioned | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	43,282	34,698
Other Assets Especially Mentioned | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	4,136	4,345
Substandard
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	229,826	269,794
Substandard | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	143,023	153,320
Substandard | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	25,369	31,873
Substandard | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	3,148	5,528
Substandard | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	799	2,620
Substandard | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	29,316	40,021
Substandard | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	11,246	15,706
Substandard | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	11,220	18,498
Substandard | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	194,805	227,545
Substandard | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,682	1,729
Substandard | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,583	1,361
Substandard | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	358	486
Substandard | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	3,623	3,576
Substandard | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	29,318	33,478
Substandard | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,080	5,195
Doubtful
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	66,179	120,165
Doubtful | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	19,401	25,087
Doubtful | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	16,198	38,761
Doubtful | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,392	2,044
Doubtful | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	9,757	21,916
Doubtful | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	27,347	62,721
Doubtful | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	8,295	15,140
Doubtful | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,532	395
Doubtful | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	57,575	103,343
Doubtful | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	96	247
Doubtful | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	552	674
Doubtful | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,319	2,789
Doubtful | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,967	3,710
Doubtful | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	5,225	12,849
Doubtful | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	412	263
Total Criticized Loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	519,311	630,862
Total Criticized Loans | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	277,964	307,453
Total Criticized Loans | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	74,929	107,928
Total Criticized Loans | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	5,984	17,020
Total Criticized Loans | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	10,556	24,536
Total Criticized Loans | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	91,469	149,484
Total Criticized Loans | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	26,442	38,995
Total Criticized Loans | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	30,576	34,930
Total Criticized Loans | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	426,451	530,862
Total Criticized Loans | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,742	3,117
Total Criticized Loans | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,988	2,780
Total Criticized Loans | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,677	3,275
Total Criticized Loans | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	8,407	9,172
Total Criticized Loans | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	77,825	81,025
Total Criticized Loans | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	$ 6,628	$ 9,803

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net income	$ 16,155	$ 11,921	$ 41,379	$ 31,281
Other comprehensive income (loss), before tax:
Change in net unrealized gains (losses) during period	931	2,781	(175)	24,200
Reclassification adjustment for net gains included in income	(66)	(38)	(295)	(56)
Defined benefit post-retirement benefits plans:
Change in net actuarial loss	35	35	102	104
Other comprehensive income (loss), before tax	900	2,778	(368)	24,248
Deferred tax benefit (expense) related to other comprehensive income	(354)	(1,093)	145	(9,541)
Other comprehensive income (loss), net of tax	546	1,685	(223)	14,707
Comprehensive income, net of tax	$ 16,701	$ 13,606	$ 41,156	$ 45,988

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Investment Securities

9 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

The amortized cost and approximate fair values of investment securities are summarized as follows:

September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	914,676	$	4,648	$	(39	)	$	919,285
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,030,703		29,824		(1,266		)	1,059,261
Private mortgage-backed securities	598		11		(1		)	608
Total	$	1,945,977	$	34,483	$	(1,306	)	$	1,979,154

September 30, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	181,792	$	11,489	$	(47	)	$	193,234
Corporate securities	5,658		63		—			5,721
Other securities	123		—		—			123
Total	$	187,573	$	11,552	$	(47	)	$	199,078

December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	1,134,427	$	4,353	$	(662	)	$	1,138,118
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	848,444		29,567		(14		)	877,997
Private mortgage-backed securities	758		7		(16		)	749
Total	$	1,983,629	$	33,927	$	(692	)	$	2,016,864

December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	152,619	$	9,113	$	(17	)	$	161,715
Other securities	162		—		—			162
Total	$	152,781	$	9,113	$	(17	)	$	161,877

Gross realized gains and losses from the disposition of investment securities are summarized in the following table:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Gross realized gains	$	66	$	38	$	298		$	56
Gross realized losses	—		—		(3		)	—

The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of September 30, 2012 and December 31, 2011

	Less than 12 Months					12 Months or More					Total
September 30, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	31,855	$	(39	)	$	—	$	—		$	31,855	$	(39	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	124,136		(1,266		)	—		—			124,136		(1,266		)
Private mortgage-backed securities	—		—			154		(1		)	154		(1		)
Total	$	155,991	$	(1,305	)	$	154	$	(1	)	$	156,145	$	(1,306	)

	Less than 12 Months					12 Months or More					Total
September 30, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	4,961	$	(39	)	$	696	$	(8	)	$	5,657	$	(47	)

	Less than 12 Months					12 Months or More					Total
December 31, 2011	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	287,404	$	(662	)	$	—	$	—		$	287,404	$	(662	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	45,694		(14		)	—		—			45,694		(14		)
Private mortgage-backed securities	246		(10		)	177		(6		)	423		(16		)
Total	$	333,344	$	(686	)	$	177	$	(6	)	$	333,521	$	(692	)

	Less than 12 Months				12 Months or More					Total
December 31, 2011	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	—	$	—	$	773	$	(17	)	$	773	$	(17	)

The investment portfolio is evaluated quarterly for other-than-temporary declines in the market value of each individual investment security. The Company had 30 and 24 individual investment securities that were in an unrealized loss position as of September 30, 2012 and December 31, 2011, respectively. Unrealized losses as of September 30, 2012 and December 31, 2011 related primarily to fluctuations in the current interest rates. The Company does not have the intent to sell any of the available-for-sale securities in the above table and it is not likely that the Company will have to sell any such securities before a recovery in cost. No impairment losses were recorded during the three or nine months ended September 30, 2012 and 2011.

Maturities of investment securities at September 30, 2012 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.

	Available-for-Sale				Held-to-Maturity
September 30, 2012	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	432,052	$	440,039	$	5,891	$	5,822
After one year but within five years	1,131,727		1,147,641		33,837		34,853
After five years but within ten years	227,503		232,493		79,891		84,811
After ten years	154,695		158,981		67,831		73,469
Total	1,945,977		1,979,154		187,450		198,955
Investments with no stated maturity	—		—		123		123
Total	$	1,945,977	$	1,979,154	$	187,573	$	199,078

As of September 30, 2012, the Company had investment securities callable within one year with amortized costs and estimated fair values of $490,246 and $491,469, respectively, including callable structured notes with amortized costs and estimated fair values of $120,273 and $120,519, respectively. These investment securities are primarily classified as available-for-sale and included in the after one year but within five years category in the table above.

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Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Schedule of Allowance for Loan Losses by Portfolio Segment

The following tables present a summary of changes in the allowance for loan losses by portfolio segment for the periods indicated.

Three Months Ended September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
Provision charged to operating expense	5,371			192			4,222			(285		)	—		9,500
Less loans charged-off	(9,138		)	(1,340		)	(4,335		)	—			—		(14,813		)
Add back recoveries of loans previously    charged-off	387			465			666			7			—		1,525
Ending balance	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
Nine Months Ended September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	87,396		$	8,594		$	15,325		$	1,266		$	—	$	112,581
Provision charged to operating expense	22,172			385			10,530			(337		)	—		32,750
Less loans charged-off	(36,645		)	(3,862		)	(10,028		)	(110		)	—		(50,645		)
Add back recoveries of loans previously    charged-off	1,420			1,474			1,401			25			—		4,320
Ending balance	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
As of September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	11,348		$	—		$	2,924		$	412		$	—	$	14,684
Loans collectively evaluated for impairment	62,995			6,591			14,304			432			—		84,322
Allowance for loan losses	$	74,343		$	6,591		$	17,228		$	844		$	—	$	99,006
As of September 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	140,460		$	—		$	13,408		$	590		$	—	$	154,458
Collectively evaluated for impairment	2,600,908			629,757			658,692			134,877			1,359		4,025,593
Total loans	$	2,741,368		$	629,757		$	672,100		$	135,467		$	1,359	$	4,180,051

Three Months Ended September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	90,243		$	8,526		$	24,434		$	1,376		$	—	$	124,579
Provision charged to operating expense	9,984			1,676			2,206			134			—		14,000
Less loans charged-off	(12,210		)	(1,682		)	(6,498		)	(15		)	—		(20,405		)
Add back recoveries of loans previously    charged-off	1,386			453			287			3			—		2,129
Ending balance	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303

Nine Months Ended September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	84,181		$	9,332		$	25,354		$	1,613		$	—	$	120,480
Provision charged to operating expense	33,080			2,927			8,461			(68		)	—		44,400
Less loans charged-off	(29,598		)	(4,641		)	(14,547		)	(60		)	—		(48,846		)
Add back recoveries of loans previously    charged-off	1,740			1,355			1,161			13			—		4,269
Ending balance	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303
As of September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	27,344		$	—		$	9,422		$	239		$	—	$	37,005
Loans collectively evaluated for impairment	62,059			8,973			11,007			1,259			—		83,298
Allowance for loan losses	$	89,403		$	8,973		$	20,429		$	1,498		$	—	$	120,303
As of September 30, 2011	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	223,386		$	—		$	31,470		$	880		$	—	$	255,736
Collectively evaluated for impairment	2,582,202			627,139			671,540			135,848			3,252		4,019,981
Total loans	$	2,805,588		$	627,139		$	703,010		$	136,728		$	3,252	$	4,275,717

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Schedule of Recorded Investment in Past Due Loans by Class (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Loans held for investment	$ 4,107,171		$ 4,107,171		$ 4,133,028
Mortgage loans held for sale	72,880		72,880		53,521
Total loans	4,180,051	4,275,717	4,180,051	4,275,717	4,186,549
Interest Income on Non-Accrual Loans if Accrued	456	819	1,701	2,283
Commercial real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	15,120		15,120		22,124
60 to 89 Days Past Due	3,061		3,061		7,871
Greater than 90 Days Past Due	643		643		630
Total Loans 30 or More Days Past Due	18,824		18,824		30,625
Current Loans	1,443,893		1,443,893		1,455,139
Non-accrual Loans	51,067		51,067		67,391
Loans held for investment	1,513,784		1,513,784		1,553,155
Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	3,518		3,518		5,251
60 to 89 Days Past Due	326		326		2,448
Greater than 90 Days Past Due	0		0		867
Total Loans 30 or More Days Past Due	3,844		3,844		8,566
Current Loans	199,991		199,991		208,134
Non-accrual Loans	29,247		29,247		61,913
Loans held for investment	233,082		233,082		278,613
Residential construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	1,049		1,049		415
60 to 89 Days Past Due	0		0		0
Greater than 90 Days Past Due	0		0		0
Total Loans 30 or More Days Past Due	1,049		1,049		415
Current Loans	47,077		47,077		56,219
Non-accrual Loans	2,769		2,769		4,472
Loans held for investment	50,895		50,895		61,106
Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	1,875		1,875		1,698
60 to 89 Days Past Due	0		0		0
Greater than 90 Days Past Due	0		0		0
Total Loans 30 or More Days Past Due	1,875		1,875		1,698
Current Loans	43,703		43,703		34,820
Non-accrual Loans	10,519		10,519		24,536
Loans held for investment	56,097		56,097		61,054
Total construction loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	6,442		6,442		7,364
60 to 89 Days Past Due	326		326		2,448
Greater than 90 Days Past Due	0		0		867
Total Loans 30 or More Days Past Due	6,768		6,768		10,679
Current Loans	290,771		290,771		299,173
Non-accrual Loans	42,535		42,535		90,921
Loans held for investment	340,074		340,074		400,773
Residential real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	3,674		3,674		4,669
60 to 89 Days Past Due	1,064		1,064		973
Greater than 90 Days Past Due	2,382		2,382		1,798
Total Loans 30 or More Days Past Due	7,120		7,120		7,440
Current Loans	621,601		621,601		546,278
Non-accrual Loans	10,514		10,514		18,225
Loans held for investment	639,235		639,235		571,943
Agricultural real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	6,419		6,419		4,103
60 to 89 Days Past Due	22		22		1,831
Greater than 90 Days Past Due	217		217		0
Total Loans 30 or More Days Past Due	6,658		6,658		5,934
Current Loans	163,943		163,943		166,119
Non-accrual Loans	4,794		4,794		3,249
Loans held for investment	175,395		175,395		175,302
Total real estate loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	31,655		31,655		38,260
60 to 89 Days Past Due	4,473		4,473		13,123
Greater than 90 Days Past Due	3,242		3,242		3,295
Total Loans 30 or More Days Past Due	39,370		39,370		54,678
Current Loans	2,520,208		2,520,208		2,466,709
Non-accrual Loans	108,910		108,910		179,786
Loans held for investment	2,668,488		2,668,488		2,701,173
Indirect consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	2,792		2,792		3,078
60 to 89 Days Past Due	385		385		370
Greater than 90 Days Past Due	47		47		45
Total Loans 30 or More Days Past Due	3,224		3,224		3,493
Current Loans	427,774		427,774		403,695
Non-accrual Loans	451		451		463
Loans held for investment	431,449		431,449		407,651
Other consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	822		822		1,479
60 to 89 Days Past Due	129		129		436
Greater than 90 Days Past Due	24		24		60
Total Loans 30 or More Days Past Due	975		975		1,975
Current Loans	137,904		137,904		144,625
Non-accrual Loans	1,105		1,105		887
Loans held for investment	139,984		139,984		147,487
Credit card consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	368		368		604
60 to 89 Days Past Due	280		280		375
Greater than 90 Days Past Due	528		528		585
Total Loans 30 or More Days Past Due	1,176		1,176		1,564
Current Loans	57,125		57,125		59,343
Non-accrual Loans	23		23		26
Loans held for investment	58,324		58,324		60,933
Total consumer loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	3,982		3,982		5,161
60 to 89 Days Past Due	794		794		1,181
Greater than 90 Days Past Due	599		599		690
Total Loans 30 or More Days Past Due	5,375		5,375		7,032
Current Loans	622,803		622,803		607,663
Non-accrual Loans	1,579		1,579		1,376
Loans held for investment	629,757		629,757		616,071
Commercial
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	5,185		5,185		13,721
60 to 89 Days Past Due	1,808		1,808		3,464
Greater than 90 Days Past Due	823		823		405
Total Loans 30 or More Days Past Due	7,816		7,816		17,590
Current Loans	652,420		652,420		657,609
Non-accrual Loans	11,864		11,864		18,062
Loans held for investment	672,100		672,100		693,261
Agricultural
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	234		234		476
60 to 89 Days Past Due	146		146		215
Greater than 90 Days Past Due	0		0		110
Total Loans 30 or More Days Past Due	380		380		801
Current Loans	134,509		134,509		118,150
Non-accrual Loans	578		578		759
Loans held for investment	135,467		135,467		119,710
Other, including overdrafts
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due					0
60 to 89 Days Past Due					2
Greater than 90 Days Past Due					0
Total Loans 30 or More Days Past Due	0		0		2
Current Loans	1,359		1,359		2,811
Non-accrual Loans	0		0		0
Loans held for investment	1,359		1,359		2,813
Loans held for investment
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	41,056		41,056		57,618
60 to 89 Days Past Due	7,221		7,221		17,985
Greater than 90 Days Past Due	4,664		4,664		4,500
Total Loans 30 or More Days Past Due	52,941		52,941		80,103
Current Loans	3,931,299		3,931,299		3,852,942
Non-accrual Loans	122,931		122,931		199,983
Loans held for investment	4,107,171		4,107,171		4,133,028
Mortgage loans originated for sale
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	0		0		0
60 to 89 Days Past Due	0		0		0
Greater than 90 Days Past Due	0		0		0
Total Loans 30 or More Days Past Due	0		0		0
Current Loans	72,880		72,880		53,521
Non-accrual Loans	0		0		0
Total loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	41,056		41,056		57,618
60 to 89 Days Past Due	7,221		7,221		17,985
Greater than 90 Days Past Due	4,664		4,664		4,500
Total Loans 30 or More Days Past Due	52,941		52,941		80,103
Current Loans	4,004,179		4,004,179		3,906,463
Non-accrual Loans	122,931		122,931		199,983
Total loans	$ 4,180,051		$ 4,180,051		$ 4,186,549

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Supplemental Disclosures to Consolidated Statement of Cash Flows

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Disclosures to Consolidated Statement of Cash Flows

Supplemental Disclosures to Consolidated Statement of Cash Flows

The Company transferred loans of $36,933 and $9,148 to OREO during the nine months endedSeptember 30, 2012 and 2011, respectively.

The Company transferred internally originated mortgage servicing rights of $3,344 and $1,850 from loans to mortgage servicing assets during the nine months endedSeptember 30, 2012 and 2011, respectively.

The Company transferred land pending disposal with a book value of $566 to other assets during the nine months endedSeptember 30, 2012.

The Company transferred premises and equipment pending disposal with a book value of $1,513 to other assets during the nine months endedSeptember 30, 2011.

The Company transferred accrued liabilities of $195 to common stock in conjunction with the vesting of liability-classified non-vested stock awards during the nine months endedSeptember 30, 2011.