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 June 30, 2013

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:

June 30, 2013 – Class A common stock	18,952,123
June 30, 2013 – Class B common stock	24,883,758

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 - June 30, 2013 and December 31, 2012	3
	Consolidated Statements of Income - Three and Six Months Ended June 30, 2013 and 2012	4
	Consolidated Statements of Comprehensive Income - Three and Six Months Ended June 30, 2013 and 2012	5
	Consolidated Statements of Changes in Stockholders’ Equity - Six Months Ended June 30, 2013 and 2012	6
	Consolidated Statements of Cash Flows - Six Months Ended June 30, 2013 and 2012	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47
Item 4.	Controls and Procedures	47
Part II.	Other Information
Item 1.	Legal Proceedings	47
Item 1A .	Risk Factors	47
Item  2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	48
Item 6.	Exhibits	49
Signatures		50

2

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)
	June 30, 2013			December 31, 2012
Assets
Cash and due from banks	$	128,452		$	177,978
Federal funds sold	786			730
Interest bearing deposits in banks	238,979			622,624
Total cash and cash equivalents	368,217			801,332
Investment securities:
Available-for-sale	1,923,216			1,995,258
Held-to-maturity (estimated fair values of $219,028 and $218,933 at June 30, 2013 and December 31, 2012, respectively)	215,323			208,223
Total investment securities	2,138,539			2,203,481
Loans held for investment	4,223,078			4,157,470
Mortgage loans held for sale	74,286			66,442
Total loans	4,297,364			4,223,912
Less allowance for loan losses	98,528			100,511
Net loans	4,198,836			4,123,401
Premises and equipment, net of accumulated depreciation	181,940			187,565
Goodwill	183,673			183,673
Company-owned life insurance	77,602			76,729
Other real estate owned (“OREO”)	22,782			32,571
Accrued interest receivable	29,272			28,869
Mortgage servicing rights, net of accumulated amortization and impairment reserve	13,304			12,653
Deferred tax asset, net	15,397			2,597
Core deposit intangibles, net of accumulated amortization	5,228			5,937
Other assets	56,718			62,953
Total assets	$	7,291,508		$	7,721,761
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	1,393,732		$	1,495,309
Interest bearing	4,536,600			4,745,102
Total deposits	5,930,332			6,240,411
Securities sold under repurchase agreements	421,314			505,785
Accounts payable and accrued expenses	44,054			48,208
Accrued interest payable	6,236			6,502
Long-term debt	37,139			37,160
Other borrowed funds	2			32
Preferred stock pending redemption	—			50,000
Subordinated debentures held by subsidiary trusts	82,477			82,477
Total liabilities	6,521,554			6,970,575
Stockholders’ equity:
Nonvoting noncumulative preferred stock without par value; authorized 100,000 shares; no shares issued and outstanding as of June 30, 2013 and 5,000 shares issued and outstanding as of December 31, 2012	—			—
Common stock	279,232			271,335
Retained earnings	499,761			463,860
Accumulated other comprehensive income (loss), net	(9,039		)	15,991
Total stockholders’ equity	769,954			751,186
Total liabilities and stockholders’ equity	$	7,291,508		$	7,721,761

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 June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Interest income:
Interest and fees on loans	$	54,853		$	58,084	$	110,346		$	115,994
Interest and dividends on investment securities:
Taxable	7,671			9,458		15,717			19,163
Exempt from federal taxes	1,215			1,240		2,441			2,444
Interest on deposits in banks	212			279		510			516
Interest on federal funds sold	5			6		9			7
Total interest income	63,956			69,067		129,023			138,124
Interest expense:
Interest on deposits	4,038			5,779		8,393			12,041
Interest on securities sold under repurchase agreements	74			152		174			308
Interest on long-term debt	483			495		963			993
Interest on preferred stock pending redemption	—			—		159			—
Interest on subordinated debentures held by subsidiary trusts	601			1,467		1,297			2,974
Total interest expense	5,196			7,893		10,986			16,316
Net interest income	58,760			61,174		118,037			121,808
Provision for loan losses	375			12,000		875			23,250
Net interest income after provision for loan losses	58,385			49,174		117,162			98,558
Non-interest income:
Income from the origination and sale of loans	10,043			9,420		20,718			17,804
Other service charges, commissions and fees	8,977			8,254		17,233			16,678
Service charges on deposit accounts	4,323			4,455		8,391			8,616
Wealth management revenues	4,020			3,815		8,154			7,098
Investment securities gains (losses), net	(12		)	198		(4		)	229
Other income	2,228			1,520		3,906			3,619
Total non-interest income	29,579			27,662		58,398			54,044
Non-interest expense:
Salaries and wages	23,470			21,640		46,875			43,204
Employee benefits	7,546			6,819		15,721			15,785
Occupancy, net	4,063			4,037		8,089			8,025
Furniture and equipment	3,163			3,189		6,215			6,327
Outsourced technology services	2,195			2,179		4,352			4,445
OREO expense, net of income	(915		)	1,806		981			2,911
FDIC insurance premiums	1,356			1,601		2,733			3,196
Professional fees	1,136			1,002		2,263			1,935
Mortgage servicing rights amortization	719			817		1,558			1,712
Mortgage servicing rights impairment (recovery)	(11		)	52		(59		)	(816		)
Core deposit intangibles amortization	355			355		709			710
Other expenses	11,943			13,802		22,268			27,305
Total non-interest expense	55,020			57,299		111,705			114,739
Income before income tax expense	32,944			19,537		63,855			37,863
Income tax expense	11,439			6,527		22,306			12,639
Net income	21,505			13,010		41,549			25,224
Preferred stock dividends	—			853		—			1,706
Net income available to common shareholders	$	21,505		$	12,157	$	41,549		$	23,518
Basic earnings per common share	$	0.49		$	0.28	$	0.96		$	0.55
Diluted earnings per common share	$	0.49		$	0.28	$	0.95		$	0.55

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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net income	$	21,505		$	13,010		$	41,549		$	25,224
Other comprehensive loss, before tax:
Investment securities available-for sale:
Change in net unrealized gains/losses during period	(35,625		)	(1,864		)	(41,342		)	(1,107		)
Reclassification adjustment for net losses (gains) included in income	12			(198		)	4			(229		)
Defined benefit post-retirement benefits plans:
Change in net actuarial loss	35			35			70			68
Other comprehensive loss, before tax	(35,578		)	(2,027		)	(41,268		)	(1,268		)
Deferred tax benefit related to other comprehensive loss	13,999			797			16,238			499
Other comprehensive loss, net of tax	(21,579		)	(1,230		)	(25,030		)	(769		)
Comprehensive income (loss), net of tax	$	(74	)	$	11,780		$	16,519		$	24,455

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 (loss)			Total stockholders’ equity
Balance at December 31, 2012	$	—	$	271,335		$	463,860		$	15,991		$	751,186
Comprehensive income:
Net income	—		—			41,549			—			41,549
Other comprehensive loss, net of tax benefit	—		—			—			(25,030		)	(25,030		)
Common stock transactions:
25,677 common shares purchased and retired	—		(448		)	—			—			(448		)
26,096 common shares issued	—		—			—			—			—
108,873 non-vested common shares issued	—		—			—			—			—
10,138 non-vested common shares forfeited	—		—			—			—			—
446,404 stock options exercised, net of 150,290 shares tendered in payment of option price and income tax withholding amounts	—		5,799			—			—			5,799
Tax benefit of stock-based compensation	—		524			—			—			524
Stock-based compensation expense	—		2,022			—			—			2,022
Cash dividends declared:
Common ($0.13 per share)	—		—			(5,648		)	—			(5,648		)
Balance at June 30, 2013	$	—	$	279,232		$	499,761		$	(9,039	)	$	769,954
Balance at December 31, 2011	$	50,000	$	266,842		$	435,144		$	19,034		$	771,020
Comprehensive income:
Net income	—		—			25,224			—			25,224
Other comprehensive loss, net of tax benefit	—		—			—			(769		)	(769		)
Common stock transactions:
17,981 common shares purchased and retired	—		(257		)	—			—			(257		)
23,973 common shares issued	—		—			—			—			—
122,912 non-vested common shares issued	—		—			—			—			—
3,193 non-vested common shares forfeited	—		—			—			—			—
118,865 stock options exercised, net of 39,667 shares tendered in payment of option price and income tax withholding amounts	—		1,263			—			—			1,263
Tax benefit of stock-based compensation	—		126			—			—			126
Stock-based compensation expense	—		1,724			—			—			1,724
Cash dividends declared:
Common ($0.24 per share)	—		—			(10,290		)	—			(10,290		)
Preferred (6.75% per share)	—		—			(1,706		)	—			(1,706		)
Balance at June 30, 2012	$	50,000	$	269,698		$	448,372		$	18,265		$	786,335

See accompanying notes to unaudited consolidated financial statements.

6

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Six Months Ended June 30,
	2013			2012
Cash flows from operating activities:
Net income	$	41,549		$	25,224
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	875			23,250
Net gain on disposal of property and equipment	(16		)	(501		)
Depreciation and amortization	8,298			8,568
Net premium amortization on investment securities	7,902			5,188
Net loss (gain) on investment securities transactions	4			(229		)
Net gain on sale of mortgage loans held for sale	(14,984		)	(12,423		)
Net loss (gain) on sale of OREO	(2,671		)	6
Write-down of OREO and other assets pending disposal	3,180			1,217
Net reversal of impairment of mortgage servicing rights	(59		)	(816		)
Net gain on sale of mortgage servicing rights	—			(19		)
Deferred income tax expense	3,456			5,030
Net increase in cash surrender value of company-owned life insurance policies	(873		)	(969		)
Stock-based compensation expense	2,022			1,724
Tax benefits from stock-based compensation expense	524			126
Excess tax benefits from stock-based compensation	(468		)	(108		)
Originations of mortgage loans held for sale, net of sales	4,991			(12,265		)
Changes in operating assets and liabilities:
Decrease (increase) in interest receivable	(403		)	1,038
Decrease in other assets	7,004			1,754
Increase (decrease) in accrued interest payable	(266		)	92
Decrease in accounts payable and accrued expenses	(4,112		)	(8,659		)
Net cash provided by operating activities	55,953			37,228
Cash flows from investing activities:
Purchases of investment securities:
Held-to-maturity	(13,755		)	(19,104		)
Available-for-sale	(430,395		)	(439,614		)
Proceeds from maturities and pay-downs of investment securities:
Held-to-maturity	5,807			4,739
Available-for-sale	453,678			536,527
Capital distribution by unconsolidated subsidiary trust	—			1,238
Proceeds from sales of mortgage servicing rights	470			907
Extensions of credit to customers, net of repayments	(84,078		)	(29,736		)
Recoveries of loans charged-off	7,057			2,795
Proceeds from sales of OREO	18,464			15,674
Capital expenditures, net of sales	(1,886		)	(8,467		)
Net cash provided by (used in) investing activities	$	(44,638	)	$	64,959

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) (Unaudited)
	Six Months Ended June 30,
	2013			2012
Cash flows from financing activities:
Net increase (decrease) in deposits	$	(310,079	)	$	74,408
Net decrease in repurchase agreements	(84,471		)	(60,250		)
Net decrease in other borrowed funds	(30		)	—
Repayment of junior subordinated debentures held by subsidiary trusts	—			(41,238		)
Repayments of long-term debt	(21		)	(19		)
Redemption of preferred stock	(50,000		)
Proceeds from issuance of common stock	5,799			1,263
Excess tax benefits from stock-based compensation	468			108
Purchase and retirement of common stock	(448		)	(257		)
Dividends paid to common stockholders	(5,648		)	(10,290		)
Dividends paid to preferred stockholders	—			(1,706		)
Net cash used in financing activities	(444,430		)	(37,981		)
Net increase (decrease) in cash and cash equivalents	(433,115		)	64,206
Cash and cash equivalents at beginning of period	801,332			472,447
Cash and cash equivalents at end of period	$	368,217		$	536,653
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	20,838		$	12,740
Cash paid during the period for interest expense	11,252			16,224

See accompanying notes to unaudited consolidated financial statements.

7

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 June 30, 2013 and December 31, 2012, and the results of operations for each of the three and six month periods ended June 30, 2013 and 2012 and cash flows for the six months ended June 30, 2013 and 2012, in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2012 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 June 30, 2013 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, 2012. Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.

(2) Investment Securities

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

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	744,215	$	1,158	$	(11,559	)	$	733,814
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,190,975		15,783		(17,819		)	1,188,939
Private mortgage-backed securities	457		9		(3		)	463
Total	$	1,935,647	$	16,950	$	(29,381	)	$	1,923,216

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	197,193	$	5,730	$	(1,990	)	$	200,933
Corporate securities	18,130		64		(99		)	18,095
Total	$	215,323	$	5,794	$	(2,089	)	$	219,028

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	751,501	$	3,518	$	(163	)	$	754,856
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,214,377		27,000		(1,526		)	1,239,851
Private mortgage-backed securities	539		13		(1		)	551
Total	$	1,966,417	$	30,531	$	(1,690	)	$	1,995,258

8

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	192,875	$	10,835	$	(176	)	$	203,534
Corporate securities	14,975		64		(13		)	15,026
Other securities	373		—		—			373
Total	$	208,223	$	10,899	$	(189	)	$	218,933

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Gross realized gains	$	4	$	201	$	12	$	232
Gross realized losses	16		3		16		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 June 30, 2013 and December 31, 2012

	Less than 12 Months					12 Months or More					Total
June 30, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	442,307	$	(11,559	)	$	—	$	—		$	442,307	$	(11,559	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	742,630		(17,819		)	—		—			742,630		(17,819		)
Private mortgage-backed securities	—		—			112		(3		)	112		(3		)
Total	$	1,184,937	$	(29,378	)	$	112	$	(3	)	$	1,185,049	$	(29,381	)

	Less than 12 Months					12 Months or More					Total
June 30, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	52,225	$	(1,963	)	$	504	$	(27	)	$	52,729	$	(1,990	)
Corporate securities	12,399		(99		)	—		—			12,399		(99		)
Total	$	64,624	$	(2,062	)	$	504	$	(27	)	$	65,128	$	(2,089	)

9

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, 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	$	93,982	$	(163	)	$	—	$	—		$	93,982	$	(163	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	250,198		(1,526		)	—		—			250,198		(1,526		)
Private mortgage-backed securities	—		—			137		(1		)	137		(1		)
Total	$	344,180	$	(1,689	)	$	137	$	(1	)	$	344,317	$	(1,690	)

	Less than 12 Months					12 Months or More					Total
December 31, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	19,389	$	(168	)	$	557	$	(8	)	$	19,946	$	(176	)
Corporate securities	9,312		(13		)	—		—			9,312		(13		)
Total	$	28,701	$	(181	)	$	557	$	(8	)	$	29,258	$	(189	)

The investment portfolio is evaluated quarterly for other-than-temporary declines in the market value of each individual investment security. The Company had 212 and 69 individual investment securities that were in an unrealized loss position as of June 30, 2013 and December 31, 2012, respectively. Unrealized losses as of June 30, 2013 and December 31, 2012 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 six months ended June 30, 2013 and 2012.

Maturities of investment securities at June 30, 2013 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
June 30, 2013	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	328,967	$	328,602	$	4,898	$	4,935
After one year but within five years	944,490		940,392		57,519		58,058
After five years but within ten years	602,366		594,500		88,943		90,890
After ten years	59,824		59,722		63,963		65,145
Total	$	1,935,647	$	1,923,216	$	215,323	$	219,028

As of June 30, 2013, the Company had investment securities callable within one year with amortized costs and estimated fair values of $403,826 and $395,608, respectively, including callable structured notes with amortized costs and estimated fair values of $117,486 and $115,366, 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.

10

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:

	June 30, 2013		December 31, 2012
Real estate loans:
Commercial	$	1,447,145	$	1,497,272
Construction:
Land acquisition & development	210,761		220,196
Residential	60,883		49,274
Commercial	65,567		65,059
Total construction loans	337,211		334,529
Residential	804,200		708,339
Agricultural	176,799		177,244
Total real estate loans	2,765,355		2,717,384
Consumer:
Indirect consumer	457,151		438,245
Other consumer	136,459		137,743
Credit card	59,334		60,806
Total consumer loans	652,944		636,794
Commercial	680,751		688,753
Agricultural	121,530		113,627
Other, including overdrafts	2,498		912
Loans held for investment	4,223,078		4,157,470
Mortgage loans held for sale	74,286		66,442
Total loans	$	4,297,364	$	4,223,912

11

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 dates indicated:

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of June 30, 2013	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	11,794	$	1,766	$	—	$	13,560	$	1,387,523	$	46,062	$	1,447,145
Construction:
Land acquisition & development	4,265		974		61		5,300		189,173		16,288		210,761
Residential	1,112		—		—		1,112		58,245		1,526		60,883
Commercial	—		—		—		—		59,375		6,192		65,567
Total construction loans	5,377		974		61		6,412		306,793		24,006		337,211
Residential	2,139		1,033		701		3,873		792,782		7,545		804,200
Agricultural	350		—		83		433		166,677		9,689		176,799
Total real estate loans	19,660		3,773		845		24,278		2,653,775		87,302		2,765,355
Consumer:
Indirect consumer	2,006		416		38		2,460		454,395		296		457,151
Other consumer	867		63		14		944		134,975		540		136,459
Credit card	301		275		487		1,063		58,250		21		59,334
Total consumer loans	3,174		754		539		4,467		647,620		857		652,944
Commercial	8,235		1,523		361		10,119		655,189		15,443		680,751
Agricultural	1,264		1,025		—		2,289		119,114		127		121,530
Other, including overdrafts			—		—		—		2,498		—		2,498
Loans held for investment	32,333		7,075		1,745		41,153		4,078,196		103,729		4,223,078
Mortgage loans originated for sale	—		—		—		—		74,286		—		74,286
Total loans	$	32,333	$	7,075	$	1,745	$	41,153	$	4,152,482	$	103,729	$	4,297,364

12

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, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	5,449	$	3,163	$	2	$	8,614	$	1,438,142	$	50,516	$	1,497,272
Construction:
Land acquisition & development	3,371		2,121		318		5,810		195,077		19,309		220,196
Residential	283		—		—		283		46,816		2,175		49,274
Commercial	—		—		—		—		56,933		8,126		65,059
Total construction loans	3,654		2,121		318		6,093		298,826		29,610		334,529
Residential	3,896		969		1,085		5,950		691,963		10,426		708,339
Agricultural	1,187		—		218		1,405		171,009		4,830		177,244
Total real estate loans	14,186		6,253		1,623		22,062		2,599,940		95,382		2,717,384
Consumer:
Indirect consumer	3,218		512		32		3,762		434,200		283		438,245
Other consumer	1,044		104		31		1,179		135,574		990		137,743
Credit card	409		278		392		1,079		59,704		23		60,806
Total consumer loans	4,671		894		455		6,020		629,478		1,296		636,794
Commercial	5,463		1,064		216		6,743		671,414		10,596		688,753
Agricultural	1,710		361		—		2,071		111,031		525		113,627
Other, including overdrafts	—		—		—		—		912		—		912
Loans held for investment	26,030		8,572		2,294		36,896		4,012,775		107,799		4,157,470
Mortgage loans originated for sale	—		—		—		—		66,442		—		66,442
Total loans	$	26,030	$	8,572	$	2,294	$	36,896	$	4,079,217	$	107,799	$	4,223,912

If interest on non-accrual loans had been accrued, such income would have been approximately $318 and $584 for the three months ended June 30, 2013 and 2012, respectively and approximately $655 and $1,272 for the six months ended June 30, 2013 and 2012, respectively.

13

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 June 30, 2013	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	65,957	$	32,854	$	31,688	$	64,542	$	5,498
Construction:
Land acquisition & development	21,554		10,526		6,755		17,281		2,549
Residential	2,227		1,526		—		1,526		—
Commercial	8,374		5,944		248		6,192		63
Total construction loans	32,155		17,996		7,003		24,999		2,612
Residential	10,554		2,448		5,331		7,779		1,253
Agricultural	10,017		7,363		2,558		9,921		904
Total real estate loans	118,683		60,661		46,580		107,241		10,267
Commercial	17,776		6,792		9,918		16,710		5,205
Agricultural	191		117		22		139		22
Total	$	136,650	$	67,570	$	56,520	$	124,090	$	15,494

As of December 31, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	84,300	$	39,049	$	34,774	$	73,823	$	4,112
Construction:
Land acquisition & development	28,558		15,891		7,173		23,064		1,457
Residential	3,018		1,976		710		2,686		251
Commercial	10,447		7,785		340		8,125		69
Total construction loans	42,023		25,652		8,223		33,875		1,777
Residential	13,271		6,152		4,495		10,647		1,677
Agricultural	5,559		1,834		3,227		5,061		784
Total real estate loans	145,153		72,687		50,719		123,406		8,350
Commercial	12,770		9,036		3,206		12,242		1,919
Agricultural	589		509		28		537		28
Total	$	158,512	$	82,232	$	53,953	$	136,185	$	10,297

14

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 June 30,
	2013				2012
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	67,605	$	272	$	87,135	$	320
Construction:
Land acquisition & development	19,007		15		51,949		30
Residential	1,569		—		3,637		—
Commercial	6,346		—		20,807		—
Total construction loans	26,922		15		76,393		30
Residential	8,311		5		14,726		12
Agricultural	8,255		4		6,816		—
Total real estate loans	111,093		296		185,070		362
Commercial	16,087		18		14,355		22
Agricultural	373		4		1,378		11
Total	$	127,553	$	318	$	200,803	$	395

	Six Months Ended June 30,
	2013				2012
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	67,192	$	610	$	85,701	$	671
Construction:
Land acquisition & development	20,123		456		56,924		46
Residential	2,040		—		8,810		—
Commercial	7,118		—		22,536		—
Total construction loans	29,281		456		88,270		46
Residential	9,429		9		16,251		21
Agricultural	6,611		8		10,039		32
Total real estate loans	112,513		1,083		200,261		770
Commercial	14,484		36		16,195		44
Agricultural	502		8		1,246		15
Total	$	127,499	$	1,127	$	217,702	$	829

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 $406 and $580 for the three months ended June 30, 2013 and 2012, respectively, and approximately $818 and $1,263 for the six months ended June 30, 2013 and 2012, 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.

15

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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 $67,939 as of June 30, 2013, of which $44,533 were included in non-accrual loans and $23,406 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $76,597 as of December 31, 2012, of which $44,665 were included in non-accrual loans and $31,932 were on accrual status.

The following tables present information on the Company's troubled debt restructurings that occurred during the three and six months ended June 30, 2013:    

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended June 30, 2013		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Construction:
Land acquisition & development	1	$	—	$	334	$	—	$	—	$	334
Residential	2	—		408		—		—		408
Total construction loans	3	—		742		—		—		742
Residential	3	—		463		—		—		463
Total real estate loans	6	—		1,205		—		—		1,205
Total loans restructured during period	6	$	—	$	1,205	$	—	$	—	$	1,205

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Six Months Ended June 30, 2013		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	10	$	—	$	389	$	5,345	$	183	$	5,917
Construction:
Land acquisition & development	2	120		334		—		—		454
Residential	2	—		408		—		—		408
Total construction loans	4	120		742		—		—		862
Residential	3	—		463		—		—		463
Total real estate loans	17	120		1,594		5,345		183		7,242
Commercial	4	50		178		265		87		580
Total loans restructured during period	21	$	170	$	1,772	$	5,610	$	270	$	7,822
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories.

16

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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 six months ended June 30, 2013 or 2012.

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 June 30, 2013			Six Months Ended June 30, 2013
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	1	$	625	1	$	625
Construction:
Residential	—	—		1	278
Total real estate loans	1	625		2	903
Commercial				1	332
Total	1	$	625	3	$	1,235

At June 30, 2013, 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.

17

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 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 June 30, 2013	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	102,975	$	101,713	$	18,377	$	223,065
Construction:
Land acquisition & development	25,726		16,687		6,733		49,146
Residential	2,363		1,530		279		4,172
Commercial	—		485		5,707		6,192
Total construction loans	28,089		18,702		12,719		59,510
Residential	6,834		7,439		5,867		20,140
Agricultural	12,397		11,251		2,558		26,206
Total real estate loans	150,295		139,105		39,521		328,921
Consumer:
Indirect consumer	757		1,517		124		2,398
Other consumer	586		782		386		1,754
Credit card	—		450		2,291		2,741
Total consumer loans	1,343		2,749		2,801		6,893
Commercial	37,458		18,437		9,922		65,817
Agricultural	3,294		1,495		22		4,811
Total	$	192,390	$	161,786	$	52,266	$	406,442

As of December 31, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	101,936	$	135,282	$	15,173	$	252,391
Construction:
Land acquisition & development	28,137		25,884		4,739		58,760
Residential	2,531		2,427		1,143		6,101
Commercial	3,000		795		7,383		11,178
Total construction loans	33,668		29,106		13,265		76,039
Residential	9,542		11,680		4,511		25,733
Agricultural	18,490		6,737		3,228		28,455
Total real estate loans	163,636		182,805		36,177		382,618
Consumer:
Indirect consumer	793		1,764		114		2,671
Other consumer	684		1,395		628		2,707
Credit card	—		415		2,085		2,500
Total consumer loans	1,477		3,574		2,827		7,878
Commercial	42,223		27,184		3,428		72,835
Agricultural	2,596		1,625		28		4,249
Total	$	209,932	$	215,188	$	42,460	$	467,580

18

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

(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 June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	71,666		$	7,088		$	18,652		$	480		$	18	$	97,904
Provision charged to operating expense	(1,009		)	579			763			27			15		375
Less loans charged-off	(2,027		)	(1,299		)	(569		)	—			—		(3,895		)
Add back recoveries of loans previously    charged-off	2,873			672			596			3			—		4,144
Ending balance	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
Six Months Ended June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	75,782		$	7,140		$	17,073		$	504		$	12	$	100,511
Provision charged to operating expense	(2,044		)	1,116			1,778			4			21		875
Less loans charged-off	(6,170		)	(2,361		)	(1,380		)	(4		)	—		(9,915		)
Add back recoveries of loans previously    charged-off	3,935			1,145			1,971			6			—		7,057
Ending balance	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
As of June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	10,267		$	—		$	5,205		$	22		$	—	$	15,494
Loans collectively evaluated for impairment	61,236			7,040			14,237			488			33		83,034
Allowance for loan losses	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
As of June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	107,241		$	—		$	16,710		$	139		$	—	$	124,090
Collectively evaluated for impairment	2,732,400			652,944			664,041			121,391			2,498		4,173,274
Total loans	$	2,839,641		$	652,944		$	680,751		$	121,530		$	2,498	$	4,297,364

19

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	89,128		$	7,212		$	18,380		$	1,182		$	—	$	115,902
Provision charged to operating expense	10,419			784			866			(69		)	—		12,000
Less loans charged-off	(22,350		)	(1,210		)	(3,180		)	(5		)	—		(26,745		)
Add back recoveries of loans previously    charged-off	526			488			609			14			—		1,637
Ending balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794

Six Months Ended June 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	16,801			193			6,307			(51		)	—		23,250
Less loans charged-off	(27,506		)	(2,522		)	(5,692		)	(112		)	—		(35,832		)
Add back recoveries of loans previously    charged-off	1,032			1,009			735			19			—		2,795
Ending balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
As of June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	15,199		$	—		$	2,339		$	405		$	—	$	17,943
Loans collectively evaluated for impairment	62,524			7,274			14,336			717			—		84,851
Allowance for loan losses	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
As of June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	150,026		$	—		$	11,974		$	500		$	—	$	162,500
Collectively evaluated for impairment	2,538,281			621,212			708,036			137,615			2,319		4,007,463
Total loans	$	2,688,307		$	621,212		$	720,010		$	138,115		$	2,319	$	4,169,963

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,

20

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

(5) Other Real Estate Owned

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Beginning balance	$	32,470		$	44,756		$	32,571		$	37,452
Additions	3,224			19,139			8,555			33,117
Capitalized improvements	3			406			13			75
Valuation adjustments	(259		)	(569		)	(2,564		)	(1,147		)
Dispositions	(12,656		)	(9,915		)	(15,793		)	(15,680		)
Ending balance	$	22,782		$	53,817		$	22,782		$	53,817

(6) Capital Stock

The Company had 18,952,123 and 17,635,369 shares of Class A common stock outstanding as of June 30, 2013 and December 31, 2012, respectively.

The Company had 24,883,758 and 25,654,954 shares of Class B common stock outstanding as of June 30, 2013 and December 31, 2012, respectively.

On December 31, 2012, the Company provided notice to holders of the Series A noncumulative redeemable preferred stock ("Series A Preferred Stock") of its intention to redeem the Series A Preferred Stock on January 18, 2013. Upon notice to holders of the redemption, the Series A Preferred Stock was reclassified from stockholders' equity to a liability. The aggregate redemption price for the Series A Preferred Stock was $50,150.

(7) 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 six month periods ended June 30, 2013 and 2012.

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Net income	$	21,505	$	13,010	$	41,549	$	25,224
Less preferred stock dividends	—		853		—		1,706
Net income available to common shareholders, basic and diluted	$	21,505	$	12,157	$	41,549	$	23,518
Weighted average common shares outstanding for basic earnings per share computation	43,480,502		42,966,926		43,335,682		42,920,347
Dilutive effects of stock-based compensation	427,785		93,278		376,978		96,111
Weighted average common shares outstanding for diluted earnings per common share computation	43,908,287		43,060,204		43,712,660		43,016,458
Basic earnings per common share	$	0.49	$	0.28	$	0.96	$	0.55
Diluted earnings per common share	$	0.49	$	0.28	$	0.95	$	0.55

21

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company had 976,063 and 2,828,234 stock options outstanding as of June 30, 2013 and 2012, respectively, that were not included in the computation of diluted earnings per common share because their effect would be anti-dilutive. The Company had 56,668 and 48,196 shares of unvested restricted stock as of June 30, 2013 and 2012, respectively, that were not included in the computation of diluted earnings per common share because performance conditions for vesting had not been met.

(8) 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 June 30, 2013 and December 31, 2012, 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 June 30, 2013 and December 31, 2012 are presented in the following tables:

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
June 30, 2013
Total risk-based capital:
Consolidated	$	788,109	16.3	%	$	387,029	8.0	%	NA		NA
FIB	715,684		14.9		384,810		8.0		$	481,012	10.0	%
Tier 1 risk-based capital:
Consolidated	699,166		14.5		193,515		4.0		NA		NA
FIB	643,083		13.4		192,405		4.0		$	288,607	6.0
Leverage capital ratio:
Consolidated	699,166		9.7		287,443		4.0		NA		NA
FIB	643,083		9.0		286,562		4.0		$	358,203	5.0

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2012
Total risk-based capital:
Consolidated	$	748,431	15.6	%	$	384,014	8.0	%	NA		NA
FIB	697,695		14.6		382,245		8.0		$	477,806	10.0	%
Tier 1 risk-based capital:
Consolidated	652,929		13.6		192,007		4.0		NA		NA
FIB	622,466		13.0		191,122		4.0		$	286,683	6.0
Leverage capital ratio:
Consolidated	652,929		8.8		296,559		4.0		NA		NA
FIB	622,466		8.4		296,061		4.0		$	370,077	5.0

22

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(9) 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 agreements of $6,430 as of June 30, 2013.

(10) 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 June 30, 2013, commitments to extend credit to existing and new borrowers approximated $1,110,057 which included $287,147 on unused credit card lines and $289,285 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 June 30, 2013, the Company had outstanding standby letters of credit of $70,957. 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.

(11) Supplemental Disclosures to Consolidated Statement of Cash Flows

The Company transferred loans of $8,555 and $33,117 to OREO during the six months ended June 30, 2013 and 2012, respectively.

The Company transferred internally originated mortgage servicing rights of $2,149 and $2,061 from loans to mortgage servicing assets during the six months ended June 30, 2013 and 2012, respectively.

The Company reclassified tax credit investments with a carrying value of $429 from held-to-maturity investment securities to other assets during the six months ended June 30, 2013.

The Company transferred bank buildings and land pending disposal with book values of $1,448 and $566 to other assets during the six months ended June 30, 2013 and 2012, respectively.

(12) 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 June 30,	2013			2012			2013			2012			2013			2012
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	(35,625	)	$	(1,864	)	$	(14,018	)	$	(733	)	$	(21,607	)	$	(1,131	)
Reclassification adjustment for net losses (gains) included in net income	12			(198		)	5			(78		)	7			(120		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	35			35			14			14			21			21
Total other comprehensive loss	$	(35,578	)	$	(2,027	)	$	(13,999	)	$	(797	)	$	(21,579	)	$	(1,230	)

23

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Six Months Ended June 30,	2013			2012			2013			2012			2013			2012
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	(41,342	)	$	(1,107	)	$	(16,268	)	$	(436	)	$	(25,074	)	$	(671	)
Reclassification adjustment for net losses (gains) included in net income	4			(229		)	2			(90		)	2			(139		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	70			68			28			27			42			41
Total other comprehensive loss	$	(41,268	)	$	(1,268	)	$	(16,238	)	$	(499	)	$	(25,030	)	$	(769	)

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

	June 30, 2013			December 31, 2012
Net unrealized gain (loss) on investment securities available-for-sale	$	(7,535	)	$	17,537
Net actuarial loss on defined benefit post-retirement benefit plans	(1,504		)	(1,546		)
Net accumulated other comprehensive income (loss)	$	(9,039	)	$	15,991

(13) 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
As of June 30, 2013	Balance		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	$	733,814	$	—	$	733,814	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,188,939		—		1,188,939		—
Private mortgage-backed securities	463		—		463		—
Mortgage servicing rights	22,617		—		22,617		—

			Fair Value Measurements at Reporting Date Using
As of December 31, 2012	Balance		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	$	754,856	$	—	$	754,856	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,239,851		—		1,239,851		—
Private mortgage-backed securities	551		—		551		—
Mortgage servicing rights	16,373		—		16,373		—

There were no transfers between levels of the fair value hierarchy during the six months ended June 30, 2013 or 2012.

24

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.

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
As of June 30, 2013	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	63,233	$	—	$	—	$	63,233
Other real estate owned	8,238		—		—		8,238
Long-lived assets to be disposed of by sale	1,327		—		—		1,327
			Fair Value Measurements at Reporting Date Using
As of December 31, 2012	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	74,623	$	—	$	—	$	74,623
Other real estate owned	15,745		—		—		15,745
Long-lived assets to be disposed of by sale	496		—		—		496

25

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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 June 30, 2013, certain impaired loans with a carrying value of $91,287 were reduced by specific valuation allowance allocations of $15,494 and partial loan charge-offs of $12,561 resulting in a reported fair value of $63,232. As of December 31, 2012, certain impaired loans with a carrying value of $107,247 were reduced by specific valuation allowance allocations of $10,297 and partial loan charge-offs of $22,327 resulting in a reported fair value of $74,623.

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 $2,564 during the six months ended June 30, 2013 included $196 directly related to receipt of updated appraisals and $2,368 based on management estimates of the current fair value of properties. Write-downs of $1,147 during the six months ended June 30, 2012 included adjustments of $625 directly related to receipt of updated appraisals and $522 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 June 30, 2013, the Company had long-lived assets to be disposed of by sale with a carrying value of $2,014 that had been reduced by write-downs of $687 resulting in a reported fair value of $1,327. As of December 31, 2012, the Company had a long-lived asset to be disposed of by sale with a carrying value of $566 that was reduced by write-downs of $70 charged to other expense resulting in a fair value of $496 .

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 June 30, 2013 and December 31, 2012, 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.

26

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Financial Liabilities. The fair values of demand deposits, savings accounts, securities sold under repurchase agreements and accrued interest payable are the amounts 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 fixed and floating rate subordinated debentures, floating rate subordinated term loan, notes payable to the FHLB, fixed rate subordinated term debt, and capital lease obligation are estimated by discounting future cash flows using current rates for advances with similar characteristics. The carrying value of the preferred stock pending redemption approximated fair value due to the short-term nature of the instrument.

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 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 June 30, 2013	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	$	368,217	$	368,217	$	—	$	368,217	$	—
Investment securities available-for-sale	1,923,216		1,923,216		—		1,923,216		—
Investment securities held-to-maturity	215,323		219,028		—		219,028		—
Accrued interest receivable	29,272		29,272		—		29,272		—
Mortgage servicing rights, net	13,304		22,617		—		22,617		—
Net loans	4,198,836		4,159,610		—		4,096,377		63,233
Total financial assets	$	6,748,168	$	6,721,960	$	—	$	6,658,727	$	63,233
Financial liabilities:
Total deposits, excluding time deposits	$	4,642,704	$	4,642,704	$	—	$	4,642,704	$	—
Time deposits	1,287,628		1,296,077		—		1,296,077		—
Securities sold under repurchase agreements	421,314		421,314		—		421,314		—
Other borrowed funds	2		2		—		2		—
Accrued interest payable	6,236		6,236		—		6,236		—
Long-term debt	37,139		34,962		—		34,962		—
Subordinated debentures held by subsidiary    trusts	82,477		69,951		—		69,951		—
Total financial liabilities	$	6,477,500	$	6,471,246	$	—	$	6,471,246	$	—

27

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, 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	$	801,332	$	801,332	$	—	$	801,332	$	—
Investment securities available-for-sale	1,995,258		1,995,258		—		1,995,258		—
Investment securities held-to-maturity	208,223		218,933		—		218,933		—
Accrued interest receivable	28,869		28,869		—		28,869		—
Mortgage servicing rights, net	12,653		16,373		—		16,373		—
Net loans	4,123,401		4,142,426		—		4,067,803		74,623
Total financial assets	$	7,169,736	$	7,203,191	$	—	$	7,128,568	$	74,623
Financial liabilities:
Total deposits, excluding time deposits	$	4,854,927	$	4,854,927	$	—	$	4,854,927	$	—
Time deposits	1,385,484		1,394,403		—		1,394,403		—
Securities sold under repurchase agreements	505,785		505,785		—		505,785		—
Other borrowed funds	32		32		—		32		—
Accrued interest payable	6,502		6,502		—		6,502		—
Long-term debt	37,160		35,104		—		35,104		—
Preferred stock pending redemption	50,000		50,000				50,000
Subordinated debentures held by subsidiary    trusts	82,477		62,409		—		62,409		—
Total financial liabilities	$	6,922,367	$	6,909,162	$	—	$	6,909,162	$	—

(14) Recent Authoritative Accounting Guidance

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 that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. In January 2013, the Financial Accounting Standards Board, or FASB, issued ASU 2013-01, "Clarifying the Scope and Disclosures about Offsetting Assets and Liabilities," to clarify that the scope of ASU 2011-11 applies to derivatives accounted for in accordance with Topic 815, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. ASU 2013-01 also clarifies that other types of financial assets and financial liabilities subject to a master netting arrangement or similar agreement are not subject to the provisions of ASU 2011-11. ASU 2011-11 and ASU 2013-01 became effective for the Company on January 1, 2013, and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-02 “Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to provide information about amounts reclassified out of accumulated other comprehensive income by component. The amendments in ASU 2013-02 require entities to present, either on the face of the income statement or in the notes significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required by U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, entities are required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 became effective for the Company on January 1, 2013, and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

28

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

ASU 2013-04 "Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date." ASU 2013-04 requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The amendments in ASU 2013-04 also requires an entity to disclose the nature, amount and other information about those obligations. ASU 2013-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and is applied retrospectively to all prior periods presented. The Company does not expect amendments in ASU 2013-04 to impact the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-07 "Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting." ASU 2013-07 clarifies when an entity should apply the liquidation basis of accounting. ASU 2013-07 also provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. ASU 2013-07 is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The Company does not expect amendments in ASU 2013-07 to impact the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-10 "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight INdex Swap Rate) as a Benchmark INterest Rate for Hedge Accounting Purposes." The amendments in ASU 2013-10 permit the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to interest rates on direct treasury obligations of the United States and the London Interbank Offered Rate. ASU 2013-10 is effective prospectively for qualifying new or redesigned hedging relationships entered into on or after July 17, 2013. The Company does not currently engage in derivatives or hedging activities; therefore, the amendments in ASU 2013-10 will not impact the Company's consolidated financial statements, results of operations or liquidity.

(15) 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. On July 25, 2013, the Company's Board of Directors declared a quarterly dividend to common shareholders of $0.14per share, to be paid on August 15, 2013 to shareholders of record as of August 5, 2013. No other events requiring recognition or disclosure were identified.

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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, 2012, 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 press release: continuing or worsening economic conditions, adverse economic conditions affecting Montana, Wyoming and western South Dakota, credit losses, concentrations of real estate loans, 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, repurchases of mortgage loans from or reimbursements to investors due to contractual or warranty breach, inability to grow business, 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, 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, litigation pertaining to fiduciary responsibilities, failure to effectively implement technology-driven products and services, capital required to support the Company’s bank subsidiary, soundness of other financial institutions, impact of proposed Basel III capital standards for U.S. banks, inability of our bank subsidiary to pay dividends, implementation of new lines of business or new product or service offerings, 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 and subordination of common stock to Company debt.

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, 2012, filed March 1, 2013. 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, 2012.

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 June 30, 2013, we had consolidated assets of $7,292 million, deposits of $5,930 million, loans of $4,297 million and total stockholders’ equity of $770 million. We currently operate 74 banking offices, including detached drive-up facilities, in 41 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

Basel III Regulatory Capital Rule Revision

On July 2, 2013, the Board of Governors of the Federal Reserve Bank, or the Board, issued a final rule implementing a revised regulatory capital framework for U.S. banks in accordance with the Basel III international accord and satisfying related mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the final rule, minimum capital requirements will increase for both quantity and quality of capital held by banking organizations. The final rule includes 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 remains unchanged at 8.0% of total risk-weighted assets. In addition to the minimum common equity tier 1, tier 1 and total risk-based capital requirements, the final rule requires banking organizations 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 final rule also establishes a standardized approach for determining risk-weighted assets. Under the final rule, risk weights for residential mortgage loans that apply under current capital rules will continue to apply and banking organizations with less than $15 billion in total assets may continue to include existing trust preferred securities as capital. The final rule allows banking organizations that are not subject to the advanced approaches rule, like us, to make a one-time election not to include most elements of accumulated other comprehensive income in regulatory capital and instead use the existing treatment under current capital rules.

The minimum regulatory capital requirements and compliance with a standardized approach for determining risk-weighted assets of the final rule are effective for us on January 1, 2015. The capital conservation buffer framework transition period begins January 1, 2016, with full implementation effective January 1, 2019. Our initial calculations indicate that as of June 30, 2013, we would meet all fully phased-in Basel III capital adequacy requirements.

The final rule also enhances the risk-sensitivity of the advanced approaches risk-based capital rule, including among others, 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. These provisions of the final rule generally apply only to large, internationally active banking organizations or banking organizations with significant trading activity and do not directly impact us.

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Universal Shelf Registration Statement

On May 24, 2013, we filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission. The registration statement is designed to provide us with greater flexibility to raise additional capital for general corporate purposes, including, but not limited to, repayment or refinancing of outstanding debt and the acquisition of additional businesses or technologies. The registration statement permits us to offer and sell up to $160 million of our Class A common shares in one or more future public offerings. At the present time, we have no specific use for proceeds or plans to offer any of the securities covered by the registration statement.

Asset Quality

Non-performing assets decreased to $128 million, or 2.97% of total loans and OREO, as of June 30, 2013, from $143 million, or 3.35% of total loans and OREO as of December 31, 2012, primarily due to the sale of OREO properties with carrying values aggregating $16 million and the movement of non-accrual loans out of the loan portfolio through pay-off, charge-off or foreclosure. During second quarter 2013, we had recoveries, net of charge-offs, of $249 thousand, compared to net charge-offs of $3 million during first quarter 2013 and $25 million during second quarter 2012.

The provision for loan losses decreased $11.6 million, or 96.9%, to $375 thousand for the three months ended June 30, 2013, as compared to $12.0 million for the same period in 2012, and $22.4 million, or 96.2%, to $875 thousand for the six months ended June 30, 2013, as compared to $23.3 million during the same period in 2012. These decreases are reflective of improvement in local and national economic trends, continued improvement in and stabilization of credit quality as evidenced by continuing declining levels of non-performing assets and criticized loans and unusually high levels of recoveries of previously charged-off loans.

As of January 1, 2013, we no longer present accruing loans modified in troubled debt restructurings as non-performing loans. While still considered impaired under applicable accounting guidance, these loans are performing as agreed under their modified terms and management expects performance to continue. Prior period balances and ratios have been adjusted to reflect this change.

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 volume and 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. We 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 manage our non-interest expenses in consideration of growth opportunities 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.

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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 bank holding companies on factors that include return on average assets, return on average equity, total shareholder return and growth in 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.

We seek to grow 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 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, 2012.

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

33

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, 2012 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."

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 any given year, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is in excess of its carrying value. If it is not more likely than not that the fair value of the reporting unit is in excess of the carrying value, or if the Company elects to bypass the qualitative assessment, a two-step quantitative impairment test is performed. In performing a quantitative test 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, 2012 describes our accounting policy with regard to goodwill.

Our annual evaluation of goodwill for impairment is performed as of July 1st each year. Upon completion of the most recent evaluation, it was determined that the estimated fair value of net assets was greater than carrying value of the Company. We will continue to monitor our performance and evaluate our goodwill for impairment annually or more frequently as needed.

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 second quarter 2013, our net interest income on a fully-taxable equivalent, or FTE, basis decreased $2.5 million, or 4.0%, to $59.9 million, as compared to $62.4 million the same period in 2012, and and our net FTE interest margin ratio decreased 18 basis points to 3.56%, as compared to 3.74% during the same period in 2012. For the six months ended June 30, 2013, our net FTE interest income decreased $3.9 million, or 3.1%, to $120.3 million, as compared to $124.2 million during the same period in 2012, and our net FTE interest margin ratio decreased 18 basis points to 3.55%, as compared to 3.73% during the same period in 2012. Declines in yields earned on our loan and investment portfolios during the three and six months ended June 30, 2013 were partially offset by increases in average outstanding loans and investment securities, reductions in the cost of interest bearing liabilities and lower average outstanding interest bearing deposits in banks. Also offsetting the impact of lower asset yields during the three and six months ended June 30, 2013, as compared to the same period in 2012, was the December 2012 contractual repricing of $46 million of junior subordinated debentures from a weighted average fixed interest rate of 7.07% to variable rates averaging 2.60% over LIBOR.

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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 June 30,
	2013							2012
	Average Balance		Interest			Average Rate		Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1) (2)	$	4,256,579	$	55,270		5.21	%	$	4,159,565	$	58,564		5.66	%
Investment securities (2)	2,153,342		9,588			1.79		2,094,148		11,414			2.19
Interest bearing deposits in banks	335,761		212			0.25		442,698		279			0.25
Federal funds sold	3,322		5			0.60		3,668		6			0.66
Total interest earnings assets	6,749,004		65,075			3.87		6,700,079		70,263			4.22
Non-earning assets	601,023							633,454
Total assets	$	7,350,027						$	7,333,533
Interest bearing liabilities:
Demand deposits	$	1,722,138	$	475		0.11	%	$	1,596,076	$	606		0.15	%
Savings deposits	1,544,648		598			0.16		1,482,986		934			0.25
Time deposits	1,312,863		2,965			0.91		1,496,597		4,239			1.14
Repurchase agreements	466,533		74			0.06		493,450		152			0.12
Other borrowed funds	10		—			—		33		—			—
Preferred stock pending redemption	—		—			—		—		—			—
Long-term debt	37,142		483			5.22		37,184		495			5.35
Subordinated debentures held by by subsidiary trusts	82,477		601			2.92		120,996		1,467			4.88
Total interest bearing liabilities	5,165,811		5,196			0.40		5,227,322		7,893			0.61
Non-interest bearing deposits	1,356,133							1,277,091
Other non-interest bearing liabilities	49,323							47,781
Stockholders’ equity	$	778,760						$	781,339
Total liabilities and stockholders’ equity	7,350,027							7,333,533
Net FTE interest income			59,879							62,370
Less FTE adjustments (2)			$	(1,119	)					$	(1,196	)
Net interest income from consolidated statements of income			58,760							61,174
Interest rate spread						3.47	%						3.61	%
Net FTE interest margin (3)						3.56	%						3.74	%
Cost of funds, including non-interest bearing demand deposits (4)						0.32	%						0.49	%

(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.

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Average Balance Sheets, Yields and Rates
(Dollars in thousands)	Six Months Ended June 30,
	2013							2012
	Average Balance		Interest			Average Rate		Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1) (2)	$	4,236,866	$	111,184		5.29	%	$	4,162,384	$	116,938		5.65	%
Investment securities (2)	2,178,758		19,567			1.81		2,118,793		23,018			2.18
Interest bearing deposits in banks	405,919		510			0.25		408,799		516			0.25
Federal funds sold	2,924		9			0.62		2,139		7			0.66
Total interest earnings assets	6,824,467		131,270			3.88		6,692,115		140,479			4.22
Non-earning assets	599,661							626,295
Total assets	$	7,424,128						$	7,318,410
Interest bearing liabilities:
Demand deposits	$	1,725,457	$	949		0.11	%	$	1,589,440	$	1,253		0.16	%
Savings deposits	1,547,381		1,251			0.16		1,466,113		1,948			0.27
Time deposits	1,338,903		6,193			0.93		1,518,693		8,840			1.17
Repurchase agreements	489,230		174			0.07		503,428		308			0.12
Other borrowed funds	9		—			—		34		—			—
Long-term debt	37,148		963			5.23		37,189		993			5.37
Preferred stock pending redemption	4,696		159			6.83		—		—			—
Subordinated debentures held by by subsidiary trusts	82,477		1,297			3.17		122,356		2,974			4.89
Total interest bearing liabilities	5,225,301		10,986			0.42		5,237,253		16,316			0.63
Non-interest bearing deposits	1,377,374							1,254,983
Other non-interest bearing liabilities	51,554							48,926
Stockholders’ equity	$	769,899						$	777,248
Total liabilities and stockholders’ equity	7,424,128							7,318,410
Net FTE interest income			120,284							124,163
Less FTE adjustments (2)			$	(2,247	)					$	(2,355	)
Net interest income from consolidated statements of income			118,037							121,808
Interest rate spread						3.46	%						3.59	%
Net FTE interest margin (3)						3.55	%						3.73	%
Cost of funds, including non-interest bearing demand deposits (4)						0.34	%						0.51	%

(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.

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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 June 30, 2013 compared with Three Months Ended June 30, 2012									Six Months Ended June 30, 2013 compared with Six Months Ended June 30, 2012
	Volume			Rate			Net			Volume			Rate			Net
Interest earning assets:
Loans (1)	$	1,366		$	(4,660	)	$	(3,294	)	$	2,092		$	(7,846	)	$	(5,754	)
Investment securities (1)	323			(2,149		)	(1,826		)	651			(4,102		)	(3,451		)
Interest bearing deposits in banks	(67		)	—			(67		)	(4		)	(2		)	(6		)
Federal funds sold	(1		)	—			(1		)	3			(1		)	2
Total change	1,621			(6,809		)	(5,188		)	2,742			(11,951		)	(9,209		)
Interest bearing liabilities:
Demand deposits	48			(179		)	(131		)	107			(411		)	(304		)
Savings deposits	39			(375		)	(336		)	108			(805		)	(697		)
Time deposits	(520		)	(754		)	(1,274		)	(1,047		)	(1,600		)	(2,647		)
Repurchase agreements	(8		)	(70		)	(78		)	(9		)	(125		)	(134		)
Long-term debt	(1		)	(11		)	(12		)	(1		)	(29		)	(30		)
Preferred stock pending redemption	—			—			—			—			159			159
Subordinated debentures	(467		)	(399		)	(866		)	(969		)	(708		)	(1,677		)
Total change	(909		)	(1,788		)	(2,697		)	(1,811		)	(3,519		)	(5,330		)
Increase (decrease) in FTE net interest income	$	2,530		$	(5,021	)	$	(2,491	)	$	4,553		$	(8,432	)	$	(3,879	)

(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 $11.6 million, or 96.9%, to $375 thousand for the three months ended June 30, 2013, as compared to $12.0 million for the same period in 2012, and $22.4 million, or 96.2%, to $875 thousand for the six months ended June 30, 2013, as compared to $23.3 million during the same period in 2012. These decreases are reflective of improvement in local and national economic trends, continued improvement in and stabilization of credit quality as evidenced by continuing declining levels of non-performing assets and criticized loans and unusually high levels of recoveries of previously charged-off 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 $1.9 million, or 6.9%, to $29.6 million for the three months ended June 30, 2013, as compared to $27.7 million for the same period in 2012, and $4.4 million, or 8.1%, to $58.4 million during the six months ended June 30, 2013, as compared to $54.0 million during the same period in 2012. Significant components of these increases are discussed below.

Fluctuations in market interest rates have a significant impact on the level of income from the origination and sale of loans. Higher interest rates can reduce the demand for home loans and loans to refinance existing mortgages. Conversely, lower interest rates generally stimulate refinancing and home loan origination activity. Income from the origination and sale of loans increased $623 thousand, or 6.6%, to $10.0 million during the three months ended June 30, 2013, compared to $9.4 million during the same period in 2012, and $2.9 million, or 16.4%, to $20.7 million during the six months ended June 30, 2013, as compared to $17.8 million during the same period in 2012, primarily due to a continuing low interest rate environment. For the six months ended June 30, 2013, mortgage loan origination was flat, as compared to the same period in 2012, with loans originated for home purchases accounting for approximately 43% of the Company's mortgage loan production, compared to approximately 35% during the same period in 2012.

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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 $723 thousand, or 8.8%, to $9.0 million during the three months ended June 30, 2013, as compared to $8.3 million during the same period in 2012, primarily due to higher debit and credit card interchange revenue resulting from higher transaction volumes. Other service charges, commissions and fees increased $555 thousand, or 3.3%, to $17.2 million during the six months ended June 30, 2013, as compared to $16.7 million during the same period in 2012, primarily due to higher credit card interchange revenue resulting from higher transaction volumes.

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 $205 thousand, or 5.4%, to $4.0 million during the three months ended June 30, 2013, as compared to $3.8 million during the same period in 2012, and increased $1.1 million, or 14.9%, to $8.2 million during the six months ended June 30, 2013, as compared to $7.1 million during the same period in 2012. These increases were primarily due to the addition of new wealth management customers, increases in the market values of new and existing assets under trust management and increases in brokerage revenues.

Other income increased $708 thousand, or 46.6%, to $2.2 million for the three months ended June 30, 2013, compared to $1.5 million for the same period in 2012, and $287 thousand, or 7.9% to $3.9 million during the six months ended June 30, 2013, as compared to $3.6 million during the same period in 2012. Increases in other income during the three and six months ended June 30, 2013, as compared to the same periods in 2012, were primarily due to proceeds from company owned life insurance combined with increases in earnings on securities held under deferred compensation plans, which were partially offset by a $581 thousand gain on the sale of a bank building recorded during second quarter 2012.

Non-interest Expense. Non-interest expense decreased $2.3 million, or 4.0%, to $55.0 million for the three months ended June 30, 2013, as compared to $57.3 million for the same period in 2012, and $3.0 million, or 2.6%, to $111.7 million for the six months ended June 30, 2013, as compared to $114.7 million for the same period in 2012. Significant components of these decreases are discussed below.

Salaries and wages increased $1.8 million, or 8.5%, to $23.5 million during the three months ended June 30, 2013, as compared to $21.6 million during the same period in 2012, and $3.7 million, or 8.5%, to $46.9 million during the six months ended June 30, 2013, as compared to $43.2 million during the same period in 2012, primarily due to higher incentive bonus accruals reflective of our improved performance.

Employee benefits expense increased $727 thousand, or 10.7%, to $7.5 million during the three months ended June 30, 2013, as compared to $6.8 million during same period in 2012, primarily due to increases in the market value of securities held under deferred compensation plans. Employee benefits expense decreased $64 thousand, or less than 1.0%, to $15.7 million during the six months ended June 30, 2013, as compared to $15.8 million during the same period in 2012. During the six months ended June 30, 2013, as compared to the same period in 2012, increases in the market values of securities held under deferred compensation plans were more than offset by decreases in payroll taxes and a $500 thousand reduction in group health insurance expense reflective of favorable claims experience.

FDIC insurance premiums decreased $245 thousand, or 15.3%, to $1.4 million during the three months ended June 30, 2013, as compared to $1.6 million for the same period in 2012, and decreased $463 thousand, or 14.5%, to $2.7 million during the six months ended June 30, 2013, as compared to $3.2 million during the same period in 2012. These decreases were primarily due to lower assessment rates and a lower deposit insurance assessment base.

Variations in net OREO income or expense between periods were primarily due to fluctuations in write-downs of the estimated fair value of OREO properties, net gains and losses recorded on the sales of OREO properties and carrying costs and/or operating expenses of OREO properties. During the three months ended June 30, 2103, we recorded net OREO income of $915 thousand, as compared to net OREO expense of $1.8 million during the same period in 2012. The shift from net OREO expense during second quarter 2012 to net OREO income during second quarter 2013 was primarily due to increases in net gains recorded on the sale of OREO properties combined with decreases in operating costs. During second quarter 2013, we sold OREO properties with carrying values aggregating $13 million at a net gain of $1.9 million, compared to sales of OREO properties with carrying values aggregating $10 million at a net gain of $75 thousand during second quarter 2012.

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OREO expense, net of income, decreased $1.9 million, or 66.3%, to $981 thousand during the six months ended June 30, 2013, as compared to $2.9 million for the same period in 2012. Increases in write-downs of the estimated fair value of OREO properties during the six months ended June 30, 2013, as compared to the same period in 2012, were more than offset by higher gains recorded on the sale of OREO properties and decreases in operating expenses. During the six months ended June 30, 2013, net OREO expense included $1.1 million of net operating expenses, $2.6 million of fair value write-downs and net gains of $2.7 million on the sale of OREO properties. This compares to $1.8 million of net operating expenses, $1.1 million of fair value write-downs and net gains of $6 thousand during the same period in 2012.

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 second quarter 2013, we reversed impairment of $11 thousand, as compared to impairment charges of $52 thousand during second quarter 2012. During the six months ended June 30, 2013, we reversed impairment of $59 thousand, as compared to an impairment reversal of $816 thousand during the same period in 2012.

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 $1.9 million, or 13.5%, to $11.9 million for the three months ended June 30, 2013, as compared to $13.8 million during the same period in 2012, and $5.0 million, or 18.4%, to $22.3 million during the six months ended June 30, 2013, as compared to $27.3 million during the same period in 2012. Increases in other expense due to the $616 thousand write-down in the carrying value of long-lived assets pending disposal recorded during second quarter 2013 were more than offset by non-recurring charges recorded during 2012. During second quarter 2012, we recorded donation expense of $1.5 million associated with the sale of a bank building to a charitable organization and wrote-off $428 thousand of unamortized issuance costs associated with redeemed junior subordinated debentures. In addition, during first quarter 2012, we accrued $3.0 million of collection and settlement costs related to one borrower.

Income Tax Expense. Our effective federal income tax rate was 30.6% for the six months ended June 30, 2013 and 28.8% for the six months ended June 30, 2012. State income tax applies primarily to pretax earnings generated within Montana and South Dakota. Our effective state tax rate was 4.3% for the six months ended June 30, 2013 and 4.6% for the six months ended June 30, 2012. 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 decreased $430 million, or 5.6%, to $7,292 million as of June 30, 2013, from $7,722 million as of December 31, 2012.

Loans. Total loans increased $73 million, or 1.7%, to $4,297 million as of June 30, 2013, from $4,224 million as of December 31, 2012, with the most notable growth occurring in residential real estate and consumer loans. Residential real estate loans increased to $804 million as of June 30, 2013, from $708 million as of December 31, 2012, due primarily to continued retention of certain residential loans with contractual terms of fifteen years or less.

Consumer loans grew to $653 million as of June 30, 2013, from $637 million as of December 31, 2012. Growth in consumer loans occurred primarily in indirect loans, which increased to $457 million as of June 30, 2013, from $438 million as of December 31, 2012, due to expansion of the Company's indirect lending program within its existing market areas.

Commercial and commercial real estate loans decreased as of June 30, 2103, as compared to December 31, 2012. Commercial loans decreased to $681 million as of June 30, 2013, from $689 million as of December 31, 2012, and commercial real estate loans decreased to $1,447 million as of June 30, 2013, from $1,497 million as of December 31, 2012, primarily due to weak loan demand combined with the movement of lower quality loans out of the portfolio through charge-off, pay-off and foreclosure.

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

Nonperforming Assets
(Dollars in thousands)	June 30, 2013			March 31, 2013			December 31, 2012			September 30, 2012			June 30, 2012
Non-performing loans:
Non-accrual loans	$	103,729		$	98,594		$	107,799		$	122,931		$	129,923
Accruing loans past due 90 days or more	1,742			1,941			2,277			4,339			6,451
Total non-performing loans	105,471			100,535			110,076			127,270			136,374
OREO	22,782			32,470			32,571			39,971			53,817
Total non-performing assets	$	128,253		$	133,005		$	142,647		$	167,241		$	190,191
Non-performing loans to total loans	2.45		%	2.38		%	2.61		%	3.04		%	3.27		%
Non-performing assets to total loans and OREO	2.97		%	3.12		%	3.35		%	3.96		%	4.50		%
Non-performing assets to total assets	1.76		%	1.79		%	1.85		%	2.24		%	2.60		%

Non-performing loans. Non-performing loans include non-accrual loans and loans contractually past due 90 days or more. We monitor and evaluate collateral values on non-performing loans quarterly. Appraisals are required on all non-performing 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)	June 30, 2013		Percent of Total		December 31, 2012		Percent of Total
Real estate:
Commercial	$	46,062	43.7	%	$	50,517	45.8	%
Construction:			.
Land acquisition and development	16,349		15.5	%	19,628		17.8	%
Commercial	6,192		5.9	%	8,126		7.4	%
Residential	1,526		1.4	%	2,175		2.0	%
Total construction	24,067		22.8	%	29,929		27.2	%
Residential	8,246		7.8	%	11,511		10.5	%
Agricultural	9,773		9.3	%	5,048		4.6	%
Total real estate	88,148		83.6	%	97,005		88.1	%
Consumer	1,392		1.3	%	1,727		1.6	%
Commercial	15,804		15.0	%	10,812		9.8	%
Agricultural	127		0.1	%	525		0.5	%
Other	—		—	%	7		—	%
Total non-performing loans	$	105,471	100.0	%	$	110,076	100.0	%

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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 $318 thousand and $584 thousand would have been accrued for the three months ended June 30, 2013 and 2012, respectively. If all loans on non-accrual had been current in accordance with their original terms, gross income of approximately $655 thousand and $1.2 million would have been accrued for the six months ended June 30, 2013 and 2012, respectively.

Non-accrual loans, the largest component of non-performing loans, decreased $4 million, or 3.8%, to $104 million at June 30, 2013 from $108 million at December 31, 2012, primarily due to movement of non-accrual loans out of the loan portfolio due to pay-off, charge-off or foreclosure.

OREO. OREO consists of real property acquired through foreclosure on the collateral underlying defaulted loans. We initially record OREO at fair value less estimated selling costs. Any excess of loan carrying value over the fair value of the real estate acquired is recorded as 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 decreased $10 million, or 30.1%, to $23 million as of June 30, 2013, from $33 million as of December 31, 2012. During the first half of 2013, we recorded additions to OREO of $9 million, wrote down the fair value of OREO properties by $3 million and sold OREO with a book value of $16 million at a net gain of $2.7 million, compared to additions of $33 million, fair value write-downs of $1 million and sales of $16 million at a net loss of $6 thousand during the same period in 2012. As of June 30, 2013, OREO was comprised 54% of land and land development properties, 26% of commercial properties and 20% of residential 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.

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(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.

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.

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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
	June 30,			March 31,			December 31,			September 30,			June 30,
	2013			2013			2012			2012			2012
Balance at beginning of period	$	97,904		$	100,511		$	99,006		$	102,794		$	115,902
Provision charged to operating expense	375			500			8,000			9,500			12,000
Charge offs:
Real estate
Commercial	1,251			1,098			2,914			3,058			6,362
Construction	449			1,723			3,355			4,477			15,107
Residential	324			1,226			590			1,603			861
Agricultural	3			96			2			1			20
Consumer	1,299			1,062			1,458			1,340			1,210
Commercial	569			811			1,963			4,334			3,180
Agricultural	—			4			9			—			5
Total charge-offs	3,895			6,020			10,291			14,813			26,745
Recoveries:
Real estate
Commercial	2,140			714			318			24			483
Construction	593			325			1,443			260			13
Residential	134			22			59			102			30
Agricultural	6			1			—			2			—
Consumer	672			473			471			465			488
Commercial	596			1,375			1,504			665			609
Agricultural	3			3			1			7			14
Total recoveries	4,144			2,913			3,796			1,525			1,637
Net charge-offs	(249		)	3,107			6,495			13,288			25,108
Balance at end of period	$	98,528		$	97,904		$	100,511		$	99,006		$	102,794
Period end loans	$	4,297,364		$	4,224,559		$	4,223,912		$	4,180,051		$	4,169,963
Average loans	4,256,579			4,216,934			4,197,665			4,183,016			4,159,565
Net loans charged-off to average loans, annualized	(0.02		)%	0.30		%	0.62		%	1.26		%	2.43		%
Allowance to period end loans	2.29		%	2.32		%	2.38		%	2.37		%	2.47		%

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 $65 million, or 2.9%, to $2,139 million, or 29.3% of total assets, as of June 30, 2013, from $2,203 million, or 28.5% of total assets, as of December 31, 2012. Rising interest rates caused the estimated duration of our investment portfolio to extend to 3.6 years as of June 30, 2013, from to 2.5 years as of December 31, 2012.    

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 June 30, 2013, we had investment securities with fair values of $616 thousand that had been in a continuous loss position more than twelve months. Gross unrealized losses on these securities totaled $30 thousand as of June 30, 2013, and were attributable to changes in interest rates. No impairment losses were recorded during the three or six months ended June 30, 2013 and 2012.

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Cash and Cash Equivalents. Cash and cash equivalents include cash on hand, amounts due from banks, federal funds sold for one day periods and interest bearing deposits in banks with original maturities of less than three months. Cash and cash equivalents decreased $433 million, or 54.0%, to $368 million as of June 30, 2013, from $801 million as of December 31, 2012. Fluctuations in cash and cash equivalents occurred during the normal course of business.

Deferred Tax Asset. Our net deferred tax asset increased $13 million, or 492.9%, to $15 million as of June 30, 2013, from $3 million as of December 31, 2012, primarily due to increases in deferred tax assets related to net unrealized losses on available-for-sale investment securities.

Deposits. Our deposits consist of non-interest bearing and interest bearing demand, savings, individual retirement and time deposit accounts. Total deposits decreased $98 million, or 1.6%, to $5,930 million as of June 30, 2013, from $6,028 million as of March 31, 2013 and $310 million, or 5.0%, from $6,240 million December 31, 2012, with a slight shift in the mix of deposits away from demand and time deposits to savings deposits. Total deposits were at a historically high level as of December 31, 2012 and returned to more normalized levels during first quarter 2013.

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

Deposits
(Dollars in thousands)	June 30, 2013		Percent of Total		December 31, 2012		Percent of Total
Non-interest bearing demand	$	1,393,732	23.5	%	$	1,495,309	24.0	%
Interest bearing:
Demand	1,701,057		28.7		1,811,905		29.0
Savings	1,547,915		26.1		1,547,713		24.8
Time, $100 and over	535,337		9.0		594,712		9.5
Time, other (1)	752,291		12.7		790,772		12.7
Total interest bearing	4,536,600		76.5		4,745,102		76.0
Total deposits	$	5,930,332	100.0	%	$	6,240,411	100.0	%

(1) Included in Time, other are Certificate of Deposit Account Registry Service, or CDAR, deposits of $66 million as of June 30, 2013 and $72 million as of December 31, 2012.

Repurchase Agreements. In addition to deposits, repurchase agreements 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 $84 million, or 16.7%, to $421 million as of June 30, 2013, from $506 million as of December 31, 2012, due to fluctuations in the liquidity of our customers.

Preferred Stock Redemption. On January 18, 2013, we redeemed $50 million of outstanding 6.75% Series A noncumulative redeemable preferred stock, or preferred stock. The aggregate redemption price was $50 million, which represented par value plus unpaid and accrued dividends to the date of redemption. The preferred stock was reclassified from stockholders' equity to a liability upon notice of the redemption to preferred stockholders in December 2012.

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 $19 million, or 2.5%, to $770 million as of June 30, 2013, from $751 million as of December 31, 2012, primarily due to the retention of earnings. This increase was partially offset by a shift in net unrealized gains and losses on available-for-sale investment securities, net of tax, from a net gain of $18 million as of December 31, 2012, to a net loss of $8 million as of June 30, 2013.

During the six months ended June 30, 2013, we paid aggregate cash dividends of $5.6 million, or $0.13 per share, to common stockholders, as compared to aggregate cash dividends of $10.3 million, or $0.24 per share, to common shareholders during the same period in 2012. During fourth quarter 2012, we declared and paid an accelerated aggregate quarterly cash dividend of $5.6 million, or $0.13 per share, to common shareholders. This accelerated dividend, paid on December 17, 2012, was in lieu of the quarterly dividend which would have been declared and paid in January 2013. On July 25, 2013, we declared a quarterly dividend to common stockholders of $0.14 per share to be paid on August 15, 2013 to shareholders of record as of August 5, 2013.

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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 June 30, 2013 and December 31, 2012, the Bank had capital levels that, in all cases, exceeded the well-capitalized guidelines. As of June 30, 2013, we had consolidated leverage, tier 1 and total risk-based capital ratios of 9.73%, 14.45% and 16.29%, respectively, as compared to 8.81%, 13.60% and 15.59%, respectively, as of December 31, 2012. For additional information regarding our capital levels, see “Note 8 – Regulatory Capital” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

On May 24, 2013, we filed a universal shelf registration statement with the SEC. The registration statement permits us to offer and sell up to $160 million of our Class A common shares in one or more future public offerings. At the present time, we have no specific use for proceeds or plans to offer any of the securities covered by the registration statement. For additional information regarding the registration statement, see "Recent Trends and Developments – Universal Shelf Registration Statement" included herein.

On July 2, 2013, the Board issued a final rule implementing a revised regulatory capital framework for U.S. banks in accordance with the Basel III international accord and satisfying related mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act. For additional information regarding the impact of this final rule, see "Recent Trends and Developments – Basel III Regulatory Capital Rule Revision" included herein.

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.

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 14 – 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.    

45

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As of June 30, 2013, 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, 2012.

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 June 30, 2013, 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 June 30, 2013, 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 June 30, 2013, 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.    

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, 2012.

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, 2012.

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 June 30, 2013.

(b) Not applicable.

46

(c) No purchases were 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 June 30, 2013.

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

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)
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†	Third Amendment to the First Interstate BancSystem, Inc. 2006 Equity Compensation Plan (incorporated herein by reference to Exhibit 10.10 of the Company’s Quarterly Report on Form 10-Q filed on May 1, 2013)
10.11*†	Fourth Amendment to the First Interstate BancSystem, Inc. 2006 Equity Compensation Plan
10.12†	Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Time) for Certain Executive Officers, (incorporated herein by reference to Exhibit 10.13 of the Company's Annual Report on form 10-K for the fiscal year ended December 31, 2008)

47

10.13†	Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance) for Certain Executive Officers, (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on form 8-K filed on February 13, 2013)
10.14	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.

48

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: July 31, 2013	/S/    ED GARDING
	Ed Garding
	President and Chief Executive Officer
Date: July 31, 2013	/S/    TERRILL R. MOORE
	Terrill R. Moore
	Executive Vice President and Chief Financial Officer

49

EX-10.11

Exhibit 10.11

Fourth Amendment

to the

First Interstate BancSystem, Inc.

2006 Equity Compensation Plan

This Amendment (the “Amendment”) by First Interstate BancSystem, Inc., a Montana corporation (the “Company”), to its 2006 Equity Compensation Plan (the “2006 Plan”) is entered into by the Company as of March 27, 2013.

Whereas, the Company previously adopted the 2006 Plan pursuant to which the Company may grant equity awards to its directors, officers and other employees in an effort to attract, retain and motivate individuals who are expected to make important contributions to the Company. The 2006 Plan was amended effective March 19, 2010, September 23, 2010, and March 29, 2013.

Whereas, the Compensation Committee of the Board of Directors of the Company (the “Board”) has recommended, and the Board has determined that it is in the best interests of the Company and its shareholders to amend the 2006 Plan in accordance with the provisions thereof.

Now, therefore, based on the foregoing recitals, the Company hereby agrees as follows:

1.Exhibit A to the 2006 Plan is titled “Terms and Conditions of FIBS 2006 Stock Option Benefit.” Section 7.2 of Exhibit A, titled “Director Participants”, is amended to read in its entirety as follows:

If a Director Participant's status as a director of FIBS terminates by reason of death, resignation, or removal, all Options granted after March 27, 2013 and held by such Participant may be exercised upon (a) the earlier of three (3) years after the date of the Participant's death or the date of the resignation or removal of the Participant as a director of FIBS, as applicable, or (b) the stated termination date of the Option. For Options granted on or prior to March 27, 2013, all Options held when a Director Participant's status as a director of FIBS terminates by reason of death, resignation, or removal, must be exercised within one hundred eighty (180) days after the date of the Participant's death or the date of the resignation or removal of the Participant as a director of FIBS, as applicable, regardless of whether the Options would otherwise expire prior to the end of the 180-day period and regardless of whether the Options are not otherwise exercisable within that 180-day period. Any Options of the Participant which are not exercised within the periods stated in the preceding sentences shall expire and terminate.

2.Except as modified in this Amendment, all other terms of the 2006 Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the undersigned has executed this Amendment effective as of the date first above written.

COMPANY:

First Interstate BancSystem, Inc.,

a Montana corporation

By: /s/ TERRILL R. MOORE

Terrill R. Moore

Executive Vice President &

Chief Financial Officer

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: July 31, 2013

/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: July 31, 2013

/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 June 30, 2013.

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 July 31, 2013.

/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

Commitments and Contingencies

6 Months Ended

Jun. 30, 2013

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 agreements of $6,430 as of June 30, 2013.

XML

Consolidated Statements of Income (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Interest income:
Interest and fees on loans	$ 54,853	$ 58,084	$ 110,346	$ 115,994
Interest and dividends on investment securities:
Taxable	7,671	9,458	15,717	19,163
Exempt from federal taxes	1,215	1,240	2,441	2,444
Interest on deposits in banks	212	279	510	516
Interest on federal funds sold	5	6	9	7
Total interest income	63,956	69,067	129,023	138,124
Interest expense:
Interest on deposits	4,038	5,779	8,393	12,041
Interest on securities sold under repurchase agreements	74	152	174	308
Interest on long-term debt	483	495	963	993
Interest on preferred stock pending redemption	0	0	159	0
Interest on subordinated debentures held by subsidiary trusts	601	1,467	1,297	2,974
Total interest expense	5,196	7,893	10,986	16,316
Net interest income	58,760	61,174	118,037	121,808
Provision for loan losses	375	12,000	875	23,250
Net interest income after provision for loan losses	58,385	49,174	117,162	98,558
Non-interest income:
Income from the origination and sale of loans	10,043	9,420	20,718	17,804
Other service charges, commissions and fees	8,977	8,254	17,233	16,678
Investment Advisory, Management and Administrative Fees	4,020	3,815	8,154	7,098
Service charges on deposit accounts	4,323	4,455	8,391	8,616
Investment securities gains, net	(12)	198	(4)	229
Other income	2,228	1,520	3,906	3,619
Total non-interest income	29,579	27,662	58,398	54,044
Non-interest expense:
Salaries and wages	23,470	21,640	46,875	43,204
Employee benefits	7,546	6,819	15,721	15,785
Occupancy, net	4,063	4,037	8,089	8,025
Furniture and equipment	3,163	3,189	6,215	6,327
Outsourced technology services	2,195	2,179	4,352	4,445
OREO expense, net of income	(915)	1,806	981	2,911
FDIC insurance premiums	1,356	1,601	2,733	3,196
Professional fees	1,136	1,002	2,263	1,935
Mortgage servicing rights amortization	719	817	1,558	1,712
Mortgage servicing rights impairment recovery	(11)	52	(59)	(816)
Core deposit intangibles amortization	355	355	709	710
Other expenses	11,943	13,802	22,268	27,305
Total non-interest expense	55,020	57,299	111,705	114,739
Income before income tax expense	32,944	19,537	63,855	37,863
Income tax expense	11,439	6,527	22,306	12,639
Net income	21,505	13,010	41,549	25,224
Preferred stock dividends	0	853	0	1,706
Net income available to common stockholders	$ 21,505	$ 12,157	$ 41,549	$ 23,518
Basic earnings per common share	$ 0.49	$ 0.28	$ 0.96	$ 0.55
Diluted earnings per common share	$ 0.49	$ 0.28	$ 0.95	$ 0.55

XML

Investment Securities

6 Months Ended

Jun. 30, 2013

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Investment Securities

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

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	744,215	$	1,158	$	(11,559	)	$	733,814
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,190,975		15,783		(17,819		)	1,188,939
Private mortgage-backed securities	457		9		(3		)	463
Total	$	1,935,647	$	16,950	$	(29,381	)	$	1,923,216

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	197,193	$	5,730	$	(1,990	)	$	200,933
Corporate securities	18,130		64		(99		)	18,095
Total	$	215,323	$	5,794	$	(2,089	)	$	219,028

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	751,501	$	3,518	$	(163	)	$	754,856
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,214,377		27,000		(1,526		)	1,239,851
Private mortgage-backed securities	539		13		(1		)	551
Total	$	1,966,417	$	30,531	$	(1,690	)	$	1,995,258

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	192,875	$	10,835	$	(176	)	$	203,534
Corporate securities	14,975		64		(13		)	15,026
Other securities	373		—		—			373
Total	$	208,223	$	10,899	$	(189	)	$	218,933

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Gross realized gains	$	4	$	201	$	12	$	232
Gross realized losses	16		3		16		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 June 30, 2013 and December 31, 2012

	Less than 12 Months					12 Months or More					Total
June 30, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	442,307	$	(11,559	)	$	—	$	—		$	442,307	$	(11,559	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	742,630		(17,819		)	—		—			742,630		(17,819		)
Private mortgage-backed securities	—		—			112		(3		)	112		(3		)
Total	$	1,184,937	$	(29,378	)	$	112	$	(3	)	$	1,185,049	$	(29,381	)

	Less than 12 Months					12 Months or More					Total
June 30, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	52,225	$	(1,963	)	$	504	$	(27	)	$	52,729	$	(1,990	)
Corporate securities	12,399		(99		)	—		—			12,399		(99		)
Total	$	64,624	$	(2,062	)	$	504	$	(27	)	$	65,128	$	(2,089	)

	Less than 12 Months					12 Months or More					Total
December 31, 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	$	93,982	$	(163	)	$	—	$	—		$	93,982	$	(163	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	250,198		(1,526		)	—		—			250,198		(1,526		)
Private mortgage-backed securities	—		—			137		(1		)	137		(1		)
Total	$	344,180	$	(1,689	)	$	137	$	(1	)	$	344,317	$	(1,690	)

	Less than 12 Months					12 Months or More					Total
December 31, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	19,389	$	(168	)	$	557	$	(8	)	$	19,946	$	(176	)
Corporate securities	9,312		(13		)	—		—			9,312		(13		)
Total	$	28,701	$	(181	)	$	557	$	(8	)	$	29,258	$	(189	)

The investment portfolio is evaluated quarterly for other-than-temporary declines in the market value of each individual investment security. The Company had 212 and 69 individual investment securities that were in an unrealized loss position as of June 30, 2013 and December 31, 2012, respectively. Unrealized losses as of June 30, 2013 and December 31, 2012 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 six months ended June 30, 2013 and 2012.

Maturities of investment securities at June 30, 2013 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
June 30, 2013	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	328,967	$	328,602	$	4,898	$	4,935
After one year but within five years	944,490		940,392		57,519		58,058
After five years but within ten years	602,366		594,500		88,943		90,890
After ten years	59,824		59,722		63,963		65,145
Total	$	1,935,647	$	1,923,216	$	215,323	$	219,028

As of June 30, 2013, the Company had investment securities callable within one year with amortized costs and estimated fair values of $403,826 and $395,608, respectively, including callable structured notes with amortized costs and estimated fair values of $117,486 and $115,366, 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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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2013

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:

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	744,215	$	1,158	$	(11,559	)	$	733,814
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,190,975		15,783		(17,819		)	1,188,939
Private mortgage-backed securities	457		9		(3		)	463
Total	$	1,935,647	$	16,950	$	(29,381	)	$	1,923,216

June 30, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	197,193	$	5,730	$	(1,990	)	$	200,933
Corporate securities	18,130		64		(99		)	18,095
Total	$	215,323	$	5,794	$	(2,089	)	$	219,028

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	751,501	$	3,518	$	(163	)	$	754,856
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	1,214,377		27,000		(1,526		)	1,239,851
Private mortgage-backed securities	539		13		(1		)	551
Total	$	1,966,417	$	30,531	$	(1,690	)	$	1,995,258

December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to Maturity:
State, county and municipal securities	$	192,875	$	10,835	$	(176	)	$	203,534
Corporate securities	14,975		64		(13		)	15,026
Other securities	373		—		—			373
Total	$	208,223	$	10,899	$	(189	)	$	218,933

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 June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Gross realized gains	$	4	$	201	$	12	$	232
Gross realized losses	16		3		16		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 June 30, 2013 and December 31, 2012

	Less than 12 Months					12 Months or More					Total
June 30, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	442,307	$	(11,559	)	$	—	$	—		$	442,307	$	(11,559	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	742,630		(17,819		)	—		—			742,630		(17,819		)
Private mortgage-backed securities	—		—			112		(3		)	112		(3		)
Total	$	1,184,937	$	(29,378	)	$	112	$	(3	)	$	1,185,049	$	(29,381	)

	Less than 12 Months					12 Months or More					Total
June 30, 2013	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	52,225	$	(1,963	)	$	504	$	(27	)	$	52,729	$	(1,990	)
Corporate securities	12,399		(99		)	—		—			12,399		(99		)
Total	$	64,624	$	(2,062	)	$	504	$	(27	)	$	65,128	$	(2,089	)

	Less than 12 Months					12 Months or More					Total
December 31, 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	$	93,982	$	(163	)	$	—	$	—		$	93,982	$	(163	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	250,198		(1,526		)	—		—			250,198		(1,526		)
Private mortgage-backed securities	—		—			137		(1		)	137		(1		)
Total	$	344,180	$	(1,689	)	$	137	$	(1	)	$	344,317	$	(1,690	)

	Less than 12 Months					12 Months or More					Total
December 31, 2012	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	19,389	$	(168	)	$	557	$	(8	)	$	19,946	$	(176	)
Corporate securities	9,312		(13		)	—		—			9,312		(13		)
Total	$	28,701	$	(181	)	$	557	$	(8	)	$	29,258	$	(189	)

Maturities of Investment Securities

Maturities of investment securities at June 30, 2013 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
June 30, 2013	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	328,967	$	328,602	$	4,898	$	4,935
After one year but within five years	944,490		940,392		57,519		58,058
After five years but within ten years	602,366		594,500		88,943		90,890
After ten years	59,824		59,722		63,963		65,145
Total	$	1,935,647	$	1,923,216	$	215,323	$	219,028

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Financial Instruments with Off-Balance Sheet Risk

6 Months Ended

Jun. 30, 2013

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 June 30, 2013, commitments to extend credit to existing and new borrowers approximated $1,110,057 which included $287,147 on unused credit card lines and $289,285 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 June 30, 2013, the Company had outstanding standby letters of credit of $70,957. 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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Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Supplemental Cash Flow Information [Abstract]
Transferred Loans to OREO	$ 8,555	$ 33,117
Transferred Loans to Mortgage Servicing Assets	2,149	2,061
Transfer from Investments	$ 429

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Loans Schedule of Recorded Investment in Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	$ 136,650		$ 136,650		$ 158,512
Recorded Investment With No Allowance	67,570		67,570		82,232
Recorded Investment With Allowance	56,520		56,520		53,953
Total Recorded Investment	124,090		124,090		136,185
Related Allowance	15,494		15,494		10,297
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	127,553	200,803	127,499	217,702
Income Recognized	318	395	1,127	829
Interest Income on Impaired Loans If Interest Had Been Accrued	406	580
Commercial real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	65,957		65,957		84,300
Recorded Investment With No Allowance	32,854		32,854		39,049
Recorded Investment With Allowance	31,688		31,688		34,774
Total Recorded Investment	64,542		64,542		73,823
Related Allowance	5,498		5,498		4,112
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	67,605	87,135	67,192	85,701
Income Recognized	272	320	610	671
Land acquisition & development construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	21,554		21,554		28,558
Recorded Investment With No Allowance	10,526		10,526		15,891
Recorded Investment With Allowance	6,755		6,755		7,173
Total Recorded Investment	17,281		17,281		23,064
Related Allowance	2,549		2,549		1,457
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	19,007	51,949	20,123	56,924
Income Recognized	15	30	456	46
Residential construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	2,227		2,227		3,018
Recorded Investment With No Allowance	1,526		1,526		1,976
Recorded Investment With Allowance	0		0		710
Total Recorded Investment	1,526		1,526		2,686
Related Allowance	0		0		251
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	1,569	3,637	2,040	8,810
Income Recognized	0	0	0	0
Commercial construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	8,374		8,374		10,447
Recorded Investment With No Allowance	5,944		5,944		7,785
Recorded Investment With Allowance	248		248		340
Total Recorded Investment	6,192		6,192		8,125
Related Allowance	63		63		69
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	6,346	20,807	7,118	22,536
Income Recognized	0	0	0	0
Total construction loans
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	32,155		32,155		42,023
Recorded Investment With No Allowance	17,996		17,996		25,652
Recorded Investment With Allowance	7,003		7,003		8,223
Total Recorded Investment	24,999		24,999		33,875
Related Allowance	2,612		2,612		1,777
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	26,922	76,393	29,281	88,270
Income Recognized	15	30	456	46
Residential real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	10,554		10,554		13,271
Recorded Investment With No Allowance	2,448		2,448		6,152
Recorded Investment With Allowance	5,331		5,331		4,495
Total Recorded Investment	7,779		7,779		10,647
Related Allowance	1,253		1,253		1,677
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	8,311	14,726	9,429	16,251
Income Recognized	5	12	9	21
Agricultural real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	10,017		10,017		5,559
Recorded Investment With No Allowance	7,363		7,363		1,834
Recorded Investment With Allowance	2,558		2,558		3,227
Total Recorded Investment	9,921		9,921		5,061
Related Allowance	904		904		784
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	8,255	6,816	6,611	10,039
Income Recognized	4	0	8	32
Total real estate loans
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	118,683		118,683		145,153
Recorded Investment With No Allowance	60,661		60,661		72,687
Recorded Investment With Allowance	46,580		46,580		50,719
Total Recorded Investment	107,241		107,241		123,406
Related Allowance	10,267		10,267		8,350
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	111,093	185,070	112,513	200,261
Income Recognized	296	362	1,083	770
Commercial
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	17,776		17,776		12,770
Recorded Investment With No Allowance	6,792		6,792		9,036
Recorded Investment With Allowance	9,918		9,918		3,206
Total Recorded Investment	16,710		16,710		12,242
Related Allowance	5,205		5,205		1,919
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	16,087	14,355	14,484	16,195
Income Recognized	18	22	36	44
Agricultural
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	191		191		589
Recorded Investment With No Allowance	117		117		509
Recorded Investment With Allowance	22		22		28
Total Recorded Investment	139		139		537
Related Allowance	22		22		28
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	373	1,378	502	1,246
Income Recognized	$ 4	$ 11	$ 8	$ 15

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OREO (Tables)

6 Months Ended

Jun. 30, 2013

Repossessed Assets [Abstract]

Other Real Estate Owned Roll Forward

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Beginning balance	$	32,470		$	44,756		$	32,571		$	37,452
Additions	3,224			19,139			8,555			33,117
Capitalized improvements	3			406			13			75
Valuation adjustments	(259		)	(569		)	(2,564		)	(1,147		)
Dispositions	(12,656		)	(9,915		)	(15,793		)	(15,680		)
Ending balance	$	22,782		$	53,817		$	22,782		$	53,817

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Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2013

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 June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	71,666		$	7,088		$	18,652		$	480		$	18	$	97,904
Provision charged to operating expense	(1,009		)	579			763			27			15		375
Less loans charged-off	(2,027		)	(1,299		)	(569		)	—			—		(3,895		)
Add back recoveries of loans previously    charged-off	2,873			672			596			3			—		4,144
Ending balance	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
Six Months Ended June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	75,782		$	7,140		$	17,073		$	504		$	12	$	100,511
Provision charged to operating expense	(2,044		)	1,116			1,778			4			21		875
Less loans charged-off	(6,170		)	(2,361		)	(1,380		)	(4		)	—		(9,915		)
Add back recoveries of loans previously    charged-off	3,935			1,145			1,971			6			—		7,057
Ending balance	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
As of June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	10,267		$	—		$	5,205		$	22		$	—	$	15,494
Loans collectively evaluated for impairment	61,236			7,040			14,237			488			33		83,034
Allowance for loan losses	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
As of June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	107,241		$	—		$	16,710		$	139		$	—	$	124,090
Collectively evaluated for impairment	2,732,400			652,944			664,041			121,391			2,498		4,173,274
Total loans	$	2,839,641		$	652,944		$	680,751		$	121,530		$	2,498	$	4,297,364

Three Months Ended June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	89,128		$	7,212		$	18,380		$	1,182		$	—	$	115,902
Provision charged to operating expense	10,419			784			866			(69		)	—		12,000
Less loans charged-off	(22,350		)	(1,210		)	(3,180		)	(5		)	—		(26,745		)
Add back recoveries of loans previously    charged-off	526			488			609			14			—		1,637
Ending balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794

Six Months Ended June 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	16,801			193			6,307			(51		)	—		23,250
Less loans charged-off	(27,506		)	(2,522		)	(5,692		)	(112		)	—		(35,832		)
Add back recoveries of loans previously    charged-off	1,032			1,009			735			19			—		2,795
Ending balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
As of June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	15,199		$	—		$	2,339		$	405		$	—	$	17,943
Loans collectively evaluated for impairment	62,524			7,274			14,336			717			—		84,851
Allowance for loan losses	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
As of June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	150,026		$	—		$	11,974		$	500		$	—	$	162,500
Collectively evaluated for impairment	2,538,281			621,212			708,036			137,615			2,319		4,007,463
Total loans	$	2,688,307		$	621,212		$	720,010		$	138,115		$	2,319	$	4,169,963

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Commitments and Contingencies (Details) (Construction Contracts, USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Construction Contracts
Unrecorded Unconditional Purchase Obligation [Line Items]
Commitments to Purchase	$ 6,430

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Investment Securities Gross Unrealized Losses and Fair Values of Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013 securities	Dec. 31, 2012 securities
Available-for-Sale:
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 1,184,937	$ 344,180
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	29,378	1,689
Available-for-Sale, 12 Months or More Fair Value	112	137
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	3	1
Available-for-Sale, Total Fair Value	1,185,049	344,317
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	29,381	1,690
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	64,624	28,701
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(2,062)	(181)
Held-to-Maturity, 12 Months or More Fair Value	504	557
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	(27)	(8)
Held-to-Maturity, Total Fair Value	65,128	29,258
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(2,089)	(189)
Available-for-Sale and Held-to-Maturity:
Investment Securities in an Unrealized Loss Position (Number of Securities)	212	69
Obligations of U.S. government agencies
Available-for-Sale:
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	442,307	93,982
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	11,559	163
Available-for-Sale, 12 Months or More Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	0	0
Available-for-Sale, Total Fair Value	442,307	93,982
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	11,559	163
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
Available-for-Sale:
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	742,630	250,198
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	17,819	1,526
Available-for-Sale, 12 Months or More Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	0	0
Available-for-Sale, Total Fair Value	742,630	250,198
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	17,819	1,526
Private mortgage-backed securities
Available-for-Sale:
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	0	0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	0	0
Available-for-Sale, 12 Months or More Fair Value	112	137
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	3	1
Available-for-Sale, Total Fair Value	112	137
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	3	1
State, county and municipal securities
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	52,225	19,389
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(1,963)	(168)
Held-to-Maturity, 12 Months or More Fair Value	504	557
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	(27)	(8)
Held-to-Maturity, Total Fair Value	52,729	19,946
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(1,990)	(176)
Corporate Debt Securities [Member]
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	12,399	9,312
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(99)	(13)
Held-to-Maturity, 12 Months or More Fair Value	0	0
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	0	0
Held-to-Maturity, Total Fair Value	12,399	9,312
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	$ (99)	$ (13)

XML

Schedule of Recorded Investment in Criticized Loans by Class and Credit Quality Indicator (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	$ 4,223,078	$ 4,157,470
Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,447,145	1,497,272
Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	210,761	220,196
Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	60,883	49,274
Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	65,567	65,059
Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	337,211	334,529
Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	804,200	708,339
Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	176,799	177,244
Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,765,355	2,717,384
Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	457,151	438,245
Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	136,459	137,743
Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	59,334	60,806
Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	652,944	636,794
Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	680,751	688,753
Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	121,530	113,627
Other Assets Especially Mentioned
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	192,390	209,932
Other Assets Especially Mentioned | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	102,975	101,936
Other Assets Especially Mentioned | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	25,726	28,137
Other Assets Especially Mentioned | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,363	2,531
Other Assets Especially Mentioned | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	3,000
Other Assets Especially Mentioned | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	28,089	33,668
Other Assets Especially Mentioned | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	6,834	9,542
Other Assets Especially Mentioned | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	12,397	18,490
Other Assets Especially Mentioned | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	150,295	163,636
Other Assets Especially Mentioned | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	757	793
Other Assets Especially Mentioned | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	586	684
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	1,343	1,477
Other Assets Especially Mentioned | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	37,458	42,223
Other Assets Especially Mentioned | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	3,294	2,596
Substandard
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	161,786	215,188
Substandard | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	101,713	135,282
Substandard | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	16,687	25,884
Substandard | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,530	2,427
Substandard | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	485	795
Substandard | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	18,702	29,106
Substandard | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	7,439	11,680
Substandard | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	11,251	6,737
Substandard | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	139,105	182,805
Substandard | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,517	1,764
Substandard | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	782	1,395
Substandard | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	450	415
Substandard | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,749	3,574
Substandard | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	18,437	27,184
Substandard | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,495	1,625
Doubtful
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	52,266	42,460
Doubtful | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	18,377	15,173
Doubtful | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	6,733	4,739
Doubtful | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	279	1,143
Doubtful | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	5,707	7,383
Doubtful | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	12,719	13,265
Doubtful | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	5,867	4,511
Doubtful | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,558	3,228
Doubtful | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	39,521	36,177
Doubtful | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	124	114
Doubtful | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	386	628
Doubtful | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,291	2,085
Doubtful | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,801	2,827
Doubtful | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	9,922	3,428
Doubtful | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	22	28
Total Criticized Loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	406,442	467,580
Total Criticized Loans | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	223,065	252,391
Total Criticized Loans | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	49,146	58,760
Total Criticized Loans | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	4,172	6,101
Total Criticized Loans | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	6,192	11,178
Total Criticized Loans | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	59,510	76,039
Total Criticized Loans | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	20,140	25,733
Total Criticized Loans | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	26,206	28,455
Total Criticized Loans | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	328,921	382,618
Total Criticized Loans | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,398	2,671
Total Criticized Loans | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,754	2,707
Total Criticized Loans | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,741	2,500
Total Criticized Loans | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	6,893	7,878
Total Criticized Loans | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	65,817	72,835
Total Criticized Loans | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	$ 4,811	$ 4,249

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Schedule of Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Change in net unrealized Gain during period:
Change in net unrealized gain during period, before tax amount	$ (35,625)	$ (1,864)	$ (41,342)	$ (1,107)
Change in net unrealized gain during period, tax expense (benefit)	(14,018)	(733)	(16,268)	(436)
Change in net unrealized gain during period, net of tax amount	(21,607)	(1,131)	(25,074)	(671)
Reclassification adjustment for gains included in net income:
Reclassification adjustment for gains included in net income, before tax amount	12	(198)	4	(229)
Reclassification adjustment for gains included in net income, tax expense (benefit)	5	(78)	2	(90)
Reclassification adjustment for gains included in net income, net of tax amount	7	(120)	2	(139)
Change in net actuarial loss:
Change in net actuarial loss, before tax amount	35	35	70	68
Change in net actuarial loss, tax expense (benefit)	14	14	28	27
Change in net actuarial loss, net of tax amount	21	21	42	41
Other comprehensive income (loss):
Other comprehensive income (loss), before tax	(35,578)	(2,027)	(41,268)	(1,268)
Total other comprehensive income, tax expense (benefit)	(13,999)	(797)	(16,238)	(499)
Total other comprehensive income, net of tax amount	$ (21,579)	$ (1,230)	$ (25,030)	$ (769)

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

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
As of June 30, 2013	Balance		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	$	733,814	$	—	$	733,814	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,188,939		—		1,188,939		—
Private mortgage-backed securities	463		—		463		—
Mortgage servicing rights	22,617		—		22,617		—

			Fair Value Measurements at Reporting Date Using
As of December 31, 2012	Balance		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	$	754,856	$	—	$	754,856	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,239,851		—		1,239,851		—
Private mortgage-backed securities	551		—		551		—
Mortgage servicing rights	16,373		—		16,373		—

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
As of June 30, 2013	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	63,233	$	—	$	—	$	63,233
Other real estate owned	8,238		—		—		8,238
Long-lived assets to be disposed of by sale	1,327		—		—		1,327
			Fair Value Measurements at Reporting Date Using
As of December 31, 2012	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	74,623	$	—	$	—	$	74,623
Other real estate owned	15,745		—		—		15,745
Long-lived assets to be disposed of by sale	496		—		—		496

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

The estimated fair values of financial instruments that are reported 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 June 30, 2013	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	$	368,217	$	368,217	$	—	$	368,217	$	—
Investment securities available-for-sale	1,923,216		1,923,216		—		1,923,216		—
Investment securities held-to-maturity	215,323		219,028		—		219,028		—
Accrued interest receivable	29,272		29,272		—		29,272		—
Mortgage servicing rights, net	13,304		22,617		—		22,617		—
Net loans	4,198,836		4,159,610		—		4,096,377		63,233
Total financial assets	$	6,748,168	$	6,721,960	$	—	$	6,658,727	$	63,233
Financial liabilities:
Total deposits, excluding time deposits	$	4,642,704	$	4,642,704	$	—	$	4,642,704	$	—
Time deposits	1,287,628		1,296,077		—		1,296,077		—
Securities sold under repurchase agreements	421,314		421,314		—		421,314		—
Other borrowed funds	2		2		—		2		—
Accrued interest payable	6,236		6,236		—		6,236		—
Long-term debt	37,139		34,962		—		34,962		—
Subordinated debentures held by subsidiary    trusts	82,477		69,951		—		69,951		—
Total financial liabilities	$	6,477,500	$	6,471,246	$	—	$	6,471,246	$	—

					Fair Value Measurements at Reporting Date Using
As of December 31, 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	$	801,332	$	801,332	$	—	$	801,332	$	—
Investment securities available-for-sale	1,995,258		1,995,258		—		1,995,258		—
Investment securities held-to-maturity	208,223		218,933		—		218,933		—
Accrued interest receivable	28,869		28,869		—		28,869		—
Mortgage servicing rights, net	12,653		16,373		—		16,373		—
Net loans	4,123,401		4,142,426		—		4,067,803		74,623
Total financial assets	$	7,169,736	$	7,203,191	$	—	$	7,128,568	$	74,623
Financial liabilities:
Total deposits, excluding time deposits	$	4,854,927	$	4,854,927	$	—	$	4,854,927	$	—
Time deposits	1,385,484		1,394,403		—		1,394,403		—
Securities sold under repurchase agreements	505,785		505,785		—		505,785		—
Other borrowed funds	32		32		—		32		—
Accrued interest payable	6,502		6,502		—		6,502		—
Long-term debt	37,160		35,104		—		35,104		—
Preferred stock pending redemption	50,000		50,000				50,000
Subordinated debentures held by subsidiary    trusts	82,477		62,409		—		62,409		—
Total financial liabilities	$	6,922,367	$	6,909,162	$	—	$	6,909,162	$	—

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Capital Stock (Details) (USD $) In Thousands, unless otherwise specified					6 Months Ended
	Jun. 30, 2013 Class A Common Stock	Dec. 31, 2012 Class A Common Stock	Jun. 30, 2013 Class B Common Stock	Dec. 31, 2012 Class B Common Stock	Jun. 30, 2013 Series A Preferred Stock [Member]
Class of Stock [Line Items]
Common Stock, Shares, Outstanding	18,952,123	17,635,369	24,883,758	25,654,954
Preferred Stock, Aggregate Redemption Price					$ 50,150

XML

Loans (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Schedule of Loans by Class

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

	June 30, 2013		December 31, 2012
Real estate loans:
Commercial	$	1,447,145	$	1,497,272
Construction:
Land acquisition & development	210,761		220,196
Residential	60,883		49,274
Commercial	65,567		65,059
Total construction loans	337,211		334,529
Residential	804,200		708,339
Agricultural	176,799		177,244
Total real estate loans	2,765,355		2,717,384
Consumer:
Indirect consumer	457,151		438,245
Other consumer	136,459		137,743
Credit card	59,334		60,806
Total consumer loans	652,944		636,794
Commercial	680,751		688,753
Agricultural	121,530		113,627
Other, including overdrafts	2,498		912
Loans held for investment	4,223,078		4,157,470
Mortgage loans held for sale	74,286		66,442
Total loans	$	4,297,364	$	4,223,912

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 dates indicated:

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of June 30, 2013	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	11,794	$	1,766	$	—	$	13,560	$	1,387,523	$	46,062	$	1,447,145
Construction:
Land acquisition & development	4,265		974		61		5,300		189,173		16,288		210,761
Residential	1,112		—		—		1,112		58,245		1,526		60,883
Commercial	—		—		—		—		59,375		6,192		65,567
Total construction loans	5,377		974		61		6,412		306,793		24,006		337,211
Residential	2,139		1,033		701		3,873		792,782		7,545		804,200
Agricultural	350		—		83		433		166,677		9,689		176,799
Total real estate loans	19,660		3,773		845		24,278		2,653,775		87,302		2,765,355
Consumer:
Indirect consumer	2,006		416		38		2,460		454,395		296		457,151
Other consumer	867		63		14		944		134,975		540		136,459
Credit card	301		275		487		1,063		58,250		21		59,334
Total consumer loans	3,174		754		539		4,467		647,620		857		652,944
Commercial	8,235		1,523		361		10,119		655,189		15,443		680,751
Agricultural	1,264		1,025		—		2,289		119,114		127		121,530
Other, including overdrafts			—		—		—		2,498		—		2,498
Loans held for investment	32,333		7,075		1,745		41,153		4,078,196		103,729		4,223,078
Mortgage loans originated for sale	—		—		—		—		74,286		—		74,286
Total loans	$	32,333	$	7,075	$	1,745	$	41,153	$	4,152,482	$	103,729	$	4,297,364

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	5,449	$	3,163	$	2	$	8,614	$	1,438,142	$	50,516	$	1,497,272
Construction:
Land acquisition & development	3,371		2,121		318		5,810		195,077		19,309		220,196
Residential	283		—		—		283		46,816		2,175		49,274
Commercial	—		—		—		—		56,933		8,126		65,059
Total construction loans	3,654		2,121		318		6,093		298,826		29,610		334,529
Residential	3,896		969		1,085		5,950		691,963		10,426		708,339
Agricultural	1,187		—		218		1,405		171,009		4,830		177,244
Total real estate loans	14,186		6,253		1,623		22,062		2,599,940		95,382		2,717,384
Consumer:
Indirect consumer	3,218		512		32		3,762		434,200		283		438,245
Other consumer	1,044		104		31		1,179		135,574		990		137,743
Credit card	409		278		392		1,079		59,704		23		60,806
Total consumer loans	4,671		894		455		6,020		629,478		1,296		636,794
Commercial	5,463		1,064		216		6,743		671,414		10,596		688,753
Agricultural	1,710		361		—		2,071		111,031		525		113,627
Other, including overdrafts	—		—		—		—		912		—		912
Loans held for investment	26,030		8,572		2,294		36,896		4,012,775		107,799		4,157,470
Mortgage loans originated for sale	—		—		—		—		66,442		—		66,442
Total loans	$	26,030	$	8,572	$	2,294	$	36,896	$	4,079,217	$	107,799	$	4,223,912

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 June 30, 2013	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	65,957	$	32,854	$	31,688	$	64,542	$	5,498
Construction:
Land acquisition & development	21,554		10,526		6,755		17,281		2,549
Residential	2,227		1,526		—		1,526		—
Commercial	8,374		5,944		248		6,192		63
Total construction loans	32,155		17,996		7,003		24,999		2,612
Residential	10,554		2,448		5,331		7,779		1,253
Agricultural	10,017		7,363		2,558		9,921		904
Total real estate loans	118,683		60,661		46,580		107,241		10,267
Commercial	17,776		6,792		9,918		16,710		5,205
Agricultural	191		117		22		139		22
Total	$	136,650	$	67,570	$	56,520	$	124,090	$	15,494

As of December 31, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	84,300	$	39,049	$	34,774	$	73,823	$	4,112
Construction:
Land acquisition & development	28,558		15,891		7,173		23,064		1,457
Residential	3,018		1,976		710		2,686		251
Commercial	10,447		7,785		340		8,125		69
Total construction loans	42,023		25,652		8,223		33,875		1,777
Residential	13,271		6,152		4,495		10,647		1,677
Agricultural	5,559		1,834		3,227		5,061		784
Total real estate loans	145,153		72,687		50,719		123,406		8,350
Commercial	12,770		9,036		3,206		12,242		1,919
Agricultural	589		509		28		537		28
Total	$	158,512	$	82,232	$	53,953	$	136,185	$	10,297

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

	Three Months Ended June 30,
	2013				2012
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	67,605	$	272	$	87,135	$	320
Construction:
Land acquisition & development	19,007		15		51,949		30
Residential	1,569		—		3,637		—
Commercial	6,346		—		20,807		—
Total construction loans	26,922		15		76,393		30
Residential	8,311		5		14,726		12
Agricultural	8,255		4		6,816		—
Total real estate loans	111,093		296		185,070		362
Commercial	16,087		18		14,355		22
Agricultural	373		4		1,378		11
Total	$	127,553	$	318	$	200,803	$	395

	Six Months Ended June 30,
	2013				2012
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	67,192	$	610	$	85,701	$	671
Construction:
Land acquisition & development	20,123		456		56,924		46
Residential	2,040		—		8,810		—
Commercial	7,118		—		22,536		—
Total construction loans	29,281		456		88,270		46
Residential	9,429		9		16,251		21
Agricultural	6,611		8		10,039		32
Total real estate loans	112,513		1,083		200,261		770
Commercial	14,484		36		16,195		44
Agricultural	502		8		1,246		15
Total	$	127,499	$	1,127	$	217,702	$	829

Schedule of Loans Renegotiated in Troubled Debt Restructurings

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 June 30, 2013			Six Months Ended June 30, 2013
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	1	$	625	1	$	625
Construction:
Residential	—	—		1	278
Total real estate loans	1	625		2	903
Commercial				1	332
Total	1	$	625	3	$	1,235

The following tables present information on the Company's troubled debt restructurings that occurred during the three and six months ended June 30, 2013:    

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended June 30, 2013		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Construction:
Land acquisition & development	1	$	—	$	334	$	—	$	—	$	334
Residential	2	—		408		—		—		408
Total construction loans	3	—		742		—		—		742
Residential	3	—		463		—		—		463
Total real estate loans	6	—		1,205		—		—		1,205
Total loans restructured during period	6	$	—	$	1,205	$	—	$	—	$	1,205

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Six Months Ended June 30, 2013		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	10	$	—	$	389	$	5,345	$	183	$	5,917
Construction:
Land acquisition & development	2	120		334		—		—		454
Residential	2	—		408		—		—		408
Total construction loans	4	120		742		—		—		862
Residential	3	—		463		—		—		463
Total real estate loans	17	120		1,594		5,345		183		7,242
Commercial	4	50		178		265		87		580
Total loans restructured during period	21	$	170	$	1,772	$	5,610	$	270	$	7,822
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories.

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 June 30, 2013	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	102,975	$	101,713	$	18,377	$	223,065
Construction:
Land acquisition & development	25,726		16,687		6,733		49,146
Residential	2,363		1,530		279		4,172
Commercial	—		485		5,707		6,192
Total construction loans	28,089		18,702		12,719		59,510
Residential	6,834		7,439		5,867		20,140
Agricultural	12,397		11,251		2,558		26,206
Total real estate loans	150,295		139,105		39,521		328,921
Consumer:
Indirect consumer	757		1,517		124		2,398
Other consumer	586		782		386		1,754
Credit card	—		450		2,291		2,741
Total consumer loans	1,343		2,749		2,801		6,893
Commercial	37,458		18,437		9,922		65,817
Agricultural	3,294		1,495		22		4,811
Total	$	192,390	$	161,786	$	52,266	$	406,442

As of December 31, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	101,936	$	135,282	$	15,173	$	252,391
Construction:
Land acquisition & development	28,137		25,884		4,739		58,760
Residential	2,531		2,427		1,143		6,101
Commercial	3,000		795		7,383		11,178
Total construction loans	33,668		29,106		13,265		76,039
Residential	9,542		11,680		4,511		25,733
Agricultural	18,490		6,737		3,228		28,455
Total real estate loans	163,636		182,805		36,177		382,618
Consumer:
Indirect consumer	793		1,764		114		2,671
Other consumer	684		1,395		628		2,707
Credit card	—		415		2,085		2,500
Total consumer loans	1,477		3,574		2,827		7,878
Commercial	42,223		27,184		3,428		72,835
Agricultural	2,596		1,625		28		4,249
Total	$	209,932	$	215,188	$	42,460	$	467,580

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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, 2011	$ 771,020	$ 50,000	$ 266,842	$ 435,144	$ 19,034
Comprehensive income:
Net income	25,224	0	0	25,224	0
Other comprehensive income, net of tax	(769)	0	0	0	(769)
Common stock transactions:
Common shares purchased and retired 25,677 and 17,981 in 2013 and 2012 respectively	(257)	0	(257)	0	0
Common shares issued 26,096 and 23,973 in 2013 and 2012 respectively	0	0	0	0	0
Non-vested common shares issued 108,873 and 122,912 in 2013 and 2012 respectively	0	0	0	0	0
10,318 and 3,193 non-vested common shares forfeited in 2013 and 2012 respectively	0	0	0	0	0
446,404 and 118,865 stock options exercised, net of 150,290 and 39,667 shares tendered in payment of option price and income tax withholding amounts in 2013 and 2012 respectively	1,263	0	1,263	0	0
Tax benefit of stock-based compensation	126	0	126	0	0
Stock-based compensation expense	1,724	0	1,724	0	0
Cash dividends declared:
Common ($.13) and ($0.24) per share in 2013 and 2012 repectively	(10,290)	0	0	(10,290)	0
Preferred (6.75%) per share in 2012	(1,706)	0	0	(1,706)	0
Ending Balance at Jun. 30, 2012	786,335	50,000	269,698	448,372	18,265
Beginning Balance at Dec. 31, 2012	751,186	0	271,335	463,860	15,991
Comprehensive income:
Net income	41,549	0	0	41,549	0
Other comprehensive income, net of tax	(25,030)	0	0	0	(25,030)
Common stock transactions:
Common shares purchased and retired 25,677 and 17,981 in 2013 and 2012 respectively	(448)	0	(448)	0	0
Common shares issued 26,096 and 23,973 in 2013 and 2012 respectively	0	0	0	0	0
Non-vested common shares issued 108,873 and 122,912 in 2013 and 2012 respectively	0	0	0	0	0
10,318 and 3,193 non-vested common shares forfeited in 2013 and 2012 respectively	0	0	0	0	0
446,404 and 118,865 stock options exercised, net of 150,290 and 39,667 shares tendered in payment of option price and income tax withholding amounts in 2013 and 2012 respectively	5,799	0	5,799	0	0
Tax benefit of stock-based compensation	524	0	524	0	0
Stock-based compensation expense	2,022	0	2,022	0	0
Cash dividends declared:
Common ($.13) and ($0.24) per share in 2013 and 2012 repectively	(5,648)	0	0	(5,648)	0
Ending Balance at Jun. 30, 2013	$ 769,954	$ 0	$ 279,232	$ 499,761	$ (9,039)

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash flows from operating activities:
Net income	$ 41,549	$ 25,224
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	875	23,250
Net (gain) loss on disposal of property and equipment	(16)	(501)
Depreciation and amortization	8,298	8,568
Net premium amortization on investment securities	7,902	5,188
Net gains on investment securities transactions	4	(229)
Net gains on sales of mortgage loans held for sale	(14,984)	(12,423)
Net gain on sale of OREO	(2,671)	6
OREO valuation adjustments	3,180	1,217
Net impairment (reversal of impairment) of mortgage servicing rights	(59)	(816)
Gain Loss on Sale of Mortgage Servicing	0	19
Deferred income tax expense	3,456	5,030
Net increase in cash surrender value of company-owned life insurance policies	(873)	(969)
Stock-based compensation expense	2,022	1,724
Tax benefits from stock-based compensation expense	524	126
Excess tax benefits from stock-based compensation	(468)	(108)
Originations of mortgage loans held for sale, net of sales	4,991	(12,265)
Changes in operating assets and liabilities:
Increase in interest receivable	(403)	1,038
Decrease in other assets	7,004	1,754
Decrease in accrued interest payable	(266)	92
Decrease in accounts payable and accrued expenses	(4,112)	(8,659)
Net cash provided by operating activities	55,953	37,228
Cash flows from investing activities:
Purchases of held-to-maturity investment securities	(13,755)	(19,104)
Purchases of available-for-sale investment securities	(430,395)	(439,614)
Proceeds from maturities and paydowns of held-to-maturity investment securities	5,807	4,739
Proceeds from maturities and paydowns of available-for-sale investment securities	453,678	536,527
Capital distribution by unconsolidated subsidiary trust	0	1,238
Proceeds from sales of mortgage servicing rights	470	907
Extensions of credit to customers, net of repayments	(84,078)	(29,736)
Recoveries of loans charged-off	7,057	2,795
Proceeds from sales of OREO	18,464	15,674
Capital contribution to unconsolidated equity method investee	(1,886)	(8,467)
Net cash used in investing activities	(44,638)	64,959
Cash flows from financing activities:
Net increase (decrease) in deposits	(310,079)	74,408
Net decrease in repurchase agreements	(84,471)	(60,250)
Net increase (decrease) in short-term borrowings	(30)	0
Repayment of junior subordinated debentures held by subsidiary trusts	0	41,238
Repayments of long-term debt	(21)	(19)
Redemption of preferred stock	(50,000)
Proceeds from issuance of common stock	5,799	1,263
Excess tax benefits from stock-based compensation	468	108
Purchase and retirement of common stock	(448)	(257)
Dividends paid to common stockholders	(5,648)	(10,290)
Dividends paid to preferred stockholders	0	(1,706)
Net cash provided by (used in) financing activities	(444,430)	(37,981)
Net increase (decrease) in cash and cash equivalents	(433,115)	64,206
Cash and cash equivalents at beginning of period	801,332	472,447
Cash and cash equivalents at end of period	368,217	536,653
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	20,838	12,740
Cash paid during the period for interest expense	$ 11,252	$ 16,224

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Loans

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Loans

Loans

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

	June 30, 2013		December 31, 2012
Real estate loans:
Commercial	$	1,447,145	$	1,497,272
Construction:
Land acquisition & development	210,761		220,196
Residential	60,883		49,274
Commercial	65,567		65,059
Total construction loans	337,211		334,529
Residential	804,200		708,339
Agricultural	176,799		177,244
Total real estate loans	2,765,355		2,717,384
Consumer:
Indirect consumer	457,151		438,245
Other consumer	136,459		137,743
Credit card	59,334		60,806
Total consumer loans	652,944		636,794
Commercial	680,751		688,753
Agricultural	121,530		113,627
Other, including overdrafts	2,498		912
Loans held for investment	4,223,078		4,157,470
Mortgage loans held for sale	74,286		66,442
Total loans	$	4,297,364	$	4,223,912

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 dates indicated:

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of June 30, 2013	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	11,794	$	1,766	$	—	$	13,560	$	1,387,523	$	46,062	$	1,447,145
Construction:
Land acquisition & development	4,265		974		61		5,300		189,173		16,288		210,761
Residential	1,112		—		—		1,112		58,245		1,526		60,883
Commercial	—		—		—		—		59,375		6,192		65,567
Total construction loans	5,377		974		61		6,412		306,793		24,006		337,211
Residential	2,139		1,033		701		3,873		792,782		7,545		804,200
Agricultural	350		—		83		433		166,677		9,689		176,799
Total real estate loans	19,660		3,773		845		24,278		2,653,775		87,302		2,765,355
Consumer:
Indirect consumer	2,006		416		38		2,460		454,395		296		457,151
Other consumer	867		63		14		944		134,975		540		136,459
Credit card	301		275		487		1,063		58,250		21		59,334
Total consumer loans	3,174		754		539		4,467		647,620		857		652,944
Commercial	8,235		1,523		361		10,119		655,189		15,443		680,751
Agricultural	1,264		1,025		—		2,289		119,114		127		121,530
Other, including overdrafts			—		—		—		2,498		—		2,498
Loans held for investment	32,333		7,075		1,745		41,153		4,078,196		103,729		4,223,078
Mortgage loans originated for sale	—		—		—		—		74,286		—		74,286
Total loans	$	32,333	$	7,075	$	1,745	$	41,153	$	4,152,482	$	103,729	$	4,297,364

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2012	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	5,449	$	3,163	$	2	$	8,614	$	1,438,142	$	50,516	$	1,497,272
Construction:
Land acquisition & development	3,371		2,121		318		5,810		195,077		19,309		220,196
Residential	283		—		—		283		46,816		2,175		49,274
Commercial	—		—		—		—		56,933		8,126		65,059
Total construction loans	3,654		2,121		318		6,093		298,826		29,610		334,529
Residential	3,896		969		1,085		5,950		691,963		10,426		708,339
Agricultural	1,187		—		218		1,405		171,009		4,830		177,244
Total real estate loans	14,186		6,253		1,623		22,062		2,599,940		95,382		2,717,384
Consumer:
Indirect consumer	3,218		512		32		3,762		434,200		283		438,245
Other consumer	1,044		104		31		1,179		135,574		990		137,743
Credit card	409		278		392		1,079		59,704		23		60,806
Total consumer loans	4,671		894		455		6,020		629,478		1,296		636,794
Commercial	5,463		1,064		216		6,743		671,414		10,596		688,753
Agricultural	1,710		361		—		2,071		111,031		525		113,627
Other, including overdrafts	—		—		—		—		912		—		912
Loans held for investment	26,030		8,572		2,294		36,896		4,012,775		107,799		4,157,470
Mortgage loans originated for sale	—		—		—		—		66,442		—		66,442
Total loans	$	26,030	$	8,572	$	2,294	$	36,896	$	4,079,217	$	107,799	$	4,223,912

If interest on non-accrual loans had been accrued, such income would have been approximately $318 and $584 for the three months ended June 30, 2013 and 2012, respectively and approximately $655 and $1,272 for the six months ended June 30, 2013 and 2012, 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 June 30, 2013	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	65,957	$	32,854	$	31,688	$	64,542	$	5,498
Construction:
Land acquisition & development	21,554		10,526		6,755		17,281		2,549
Residential	2,227		1,526		—		1,526		—
Commercial	8,374		5,944		248		6,192		63
Total construction loans	32,155		17,996		7,003		24,999		2,612
Residential	10,554		2,448		5,331		7,779		1,253
Agricultural	10,017		7,363		2,558		9,921		904
Total real estate loans	118,683		60,661		46,580		107,241		10,267
Commercial	17,776		6,792		9,918		16,710		5,205
Agricultural	191		117		22		139		22
Total	$	136,650	$	67,570	$	56,520	$	124,090	$	15,494

As of December 31, 2012	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	84,300	$	39,049	$	34,774	$	73,823	$	4,112
Construction:
Land acquisition & development	28,558		15,891		7,173		23,064		1,457
Residential	3,018		1,976		710		2,686		251
Commercial	10,447		7,785		340		8,125		69
Total construction loans	42,023		25,652		8,223		33,875		1,777
Residential	13,271		6,152		4,495		10,647		1,677
Agricultural	5,559		1,834		3,227		5,061		784
Total real estate loans	145,153		72,687		50,719		123,406		8,350
Commercial	12,770		9,036		3,206		12,242		1,919
Agricultural	589		509		28		537		28
Total	$	158,512	$	82,232	$	53,953	$	136,185	$	10,297

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

	Three Months Ended June 30,
	2013				2012
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	67,605	$	272	$	87,135	$	320
Construction:
Land acquisition & development	19,007		15		51,949		30
Residential	1,569		—		3,637		—
Commercial	6,346		—		20,807		—
Total construction loans	26,922		15		76,393		30
Residential	8,311		5		14,726		12
Agricultural	8,255		4		6,816		—
Total real estate loans	111,093		296		185,070		362
Commercial	16,087		18		14,355		22
Agricultural	373		4		1,378		11
Total	$	127,553	$	318	$	200,803	$	395

	Six Months Ended June 30,
	2013				2012
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	67,192	$	610	$	85,701	$	671
Construction:
Land acquisition & development	20,123		456		56,924		46
Residential	2,040		—		8,810		—
Commercial	7,118		—		22,536		—
Total construction loans	29,281		456		88,270		46
Residential	9,429		9		16,251		21
Agricultural	6,611		8		10,039		32
Total real estate loans	112,513		1,083		200,261		770
Commercial	14,484		36		16,195		44
Agricultural	502		8		1,246		15
Total	$	127,499	$	1,127	$	217,702	$	829

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 $406 and $580 for the three months ended June 30, 2013 and 2012, respectively, and approximately $818 and $1,263 for the six months ended June 30, 2013 and 2012, 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 $67,939 as of June 30, 2013, of which $44,533 were included in non-accrual loans and $23,406 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $76,597 as of December 31, 2012, of which $44,665 were included in non-accrual loans and $31,932 were on accrual status.

The following tables present information on the Company's troubled debt restructurings that occurred during the three and six months ended June 30, 2013:    

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended June 30, 2013		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Construction:
Land acquisition & development	1	$	—	$	334	$	—	$	—	$	334
Residential	2	—		408		—		—		408
Total construction loans	3	—		742		—		—		742
Residential	3	—		463		—		—		463
Total real estate loans	6	—		1,205		—		—		1,205
Total loans restructured during period	6	$	—	$	1,205	$	—	$	—	$	1,205

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Six Months Ended June 30, 2013		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Real estate:
Commercial	10	$	—	$	389	$	5,345	$	183	$	5,917
Construction:
Land acquisition & development	2	120		334		—		—		454
Residential	2	—		408		—		—		408
Total construction loans	4	120		742		—		—		862
Residential	3	—		463		—		—		463
Total real estate loans	17	120		1,594		5,345		183		7,242
Commercial	4	50		178		265		87		580
Total loans restructured during period	21	$	170	$	1,772	$	5,610	$	270	$	7,822
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other designated categories.

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 six months ended June 30, 2013 or 2012.

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 June 30, 2013			Six Months Ended June 30, 2013
	Number of Notes	Balance		Number of Notes	Balance
Real estate:
Commercial	1	$	625	1	$	625
Construction:
Residential	—	—		1	278
Total real estate loans	1	625		2	903
Commercial				1	332
Total	1	$	625	3	$	1,235

At June 30, 2013, 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 June 30, 2013	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	102,975	$	101,713	$	18,377	$	223,065
Construction:
Land acquisition & development	25,726		16,687		6,733		49,146
Residential	2,363		1,530		279		4,172
Commercial	—		485		5,707		6,192
Total construction loans	28,089		18,702		12,719		59,510
Residential	6,834		7,439		5,867		20,140
Agricultural	12,397		11,251		2,558		26,206
Total real estate loans	150,295		139,105		39,521		328,921
Consumer:
Indirect consumer	757		1,517		124		2,398
Other consumer	586		782		386		1,754
Credit card	—		450		2,291		2,741
Total consumer loans	1,343		2,749		2,801		6,893
Commercial	37,458		18,437		9,922		65,817
Agricultural	3,294		1,495		22		4,811
Total	$	192,390	$	161,786	$	52,266	$	406,442

As of December 31, 2012	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	101,936	$	135,282	$	15,173	$	252,391
Construction:
Land acquisition & development	28,137		25,884		4,739		58,760
Residential	2,531		2,427		1,143		6,101
Commercial	3,000		795		7,383		11,178
Total construction loans	33,668		29,106		13,265		76,039
Residential	9,542		11,680		4,511		25,733
Agricultural	18,490		6,737		3,228		28,455
Total real estate loans	163,636		182,805		36,177		382,618
Consumer:
Indirect consumer	793		1,764		114		2,671
Other consumer	684		1,395		628		2,707
Credit card	—		415		2,085		2,500
Total consumer loans	1,477		3,574		2,827		7,878
Commercial	42,223		27,184		3,428		72,835
Agricultural	2,596		1,625		28		4,249
Total	$	209,932	$	215,188	$	42,460	$	467,580

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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Basis of Presentation

6 Months Ended

Jun. 30, 2013

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 June 30, 2013 and December 31, 2012, and the results of operations for each of the three and six month periods ended June 30, 2013 and 2012 and cash flows for the six months ended June 30, 2013 and 2012, in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2012 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 June 30, 2013 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, 2012. Operating results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013.

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Schedule of Allowance for Loan Losses by Portfolio Segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	$ 97,904	$ 115,902	$ 100,511	$ 112,581
Provision charged to operating expense	375	12,000	875	23,250
Less loans charged-off	(3,895)	(26,745)	(9,915)	(35,832)
Add back recoveries of loans previously charged-off	4,144	1,637	7,057	2,795
Ending balance	98,528	102,794	98,528	102,794
Allowance for loan losses:
Loans individually evaluated for impairment	15,494		15,494
Loans collectively evaluated for impairment	83,034		83,034
Ending balance	98,528	102,794	98,528	102,794
Total loans:
Individually evaluated for impairment	124,090		124,090
Individually evaluated for impairment	4,173,274		4,173,274
Total loans	4,297,364	4,169,963	4,297,364	4,169,963	4,223,912
Real Estate
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	71,666	89,128	75,782	87,396
Provision charged to operating expense	(1,009)	10,419	(2,044)	16,801
Less loans charged-off	(2,027)	(22,350)	(6,170)	(27,506)
Add back recoveries of loans previously charged-off	2,873	526	3,935	1,032
Ending balance	71,503	77,723	71,503	77,723
Allowance for loan losses:
Loans individually evaluated for impairment	10,267		10,267
Loans collectively evaluated for impairment	61,236		61,236
Ending balance	71,503	77,723	71,503	77,723
Total loans:
Individually evaluated for impairment	107,241		107,241
Individually evaluated for impairment	2,732,400		2,732,400
Total loans	2,839,641	2,688,307	2,839,641	2,688,307
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	7,088	7,212	7,140	8,594
Provision charged to operating expense	579	784	1,116	193
Less loans charged-off	(1,299)	(1,210)	(2,361)	(2,522)
Add back recoveries of loans previously charged-off	672	488	1,145	1,009
Ending balance	7,040	7,274	7,040	7,274
Allowance for loan losses:
Loans individually evaluated for impairment	0		0
Loans collectively evaluated for impairment	7,040		7,040
Ending balance	7,040	7,274	7,040	7,274
Total loans:
Individually evaluated for impairment	0		0
Individually evaluated for impairment	652,944		652,944
Total loans	652,944	621,212	652,944	621,212
Commercial
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	18,652	18,380	17,073	15,325
Provision charged to operating expense	763	866	1,778	6,307
Less loans charged-off	(569)	(3,180)	(1,380)	(5,692)
Add back recoveries of loans previously charged-off	596	609	1,971	735
Ending balance	19,442	16,675	19,442	16,675
Allowance for loan losses:
Loans individually evaluated for impairment	5,205		5,205
Loans collectively evaluated for impairment	14,237		14,237
Ending balance	19,442	16,675	19,442	16,675
Total loans:
Individually evaluated for impairment	16,710		16,710
Individually evaluated for impairment	664,041		664,041
Total loans	680,751	720,010	680,751	720,010
Agriculture
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	480	1,182	504	1,266
Provision charged to operating expense	27	(69)	4	(51)
Less loans charged-off	0	(5)	(4)	(112)
Add back recoveries of loans previously charged-off	3	14	6	19
Ending balance	510	1,122	510	1,122
Allowance for loan losses:
Loans individually evaluated for impairment	22		22
Loans collectively evaluated for impairment	488		488
Ending balance	510	1,122	510	1,122
Total loans:
Individually evaluated for impairment	139		139
Individually evaluated for impairment	121,391		121,391
Total loans	121,530	138,115	121,530	138,115
Other
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	18	0	12	0
Provision charged to operating expense	15	0	21	0
Less loans charged-off	0	0	0	0
Add back recoveries of loans previously charged-off	0	0	0	0
Ending balance	33	0	33	0
Allowance for loan losses:
Loans individually evaluated for impairment	0		0
Loans collectively evaluated for impairment	33		33
Ending balance	33	0	33	0
Total loans:
Individually evaluated for impairment	0		0
Individually evaluated for impairment	2,498		2,498
Total loans	$ 2,498	$ 2,319	$ 2,498	$ 2,319

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2013

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 six month periods ended June 30, 2013 and 2012.

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Net income	$	21,505	$	13,010	$	41,549	$	25,224
Less preferred stock dividends	—		853		—		1,706
Net income available to common shareholders, basic and diluted	$	21,505	$	12,157	$	41,549	$	23,518
Weighted average common shares outstanding for basic earnings per share computation	43,480,502		42,966,926		43,335,682		42,920,347
Dilutive effects of stock-based compensation	427,785		93,278		376,978		96,111
Weighted average common shares outstanding for diluted earnings per common share computation	43,908,287		43,060,204		43,712,660		43,016,458
Basic earnings per common share	$	0.49	$	0.28	$	0.96	$	0.55
Diluted earnings per common share	$	0.49	$	0.28	$	0.95	$	0.55

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Amortized Cost and Approximate Fair Values of Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2012	Dec. 31, 2012
Schedule of Available for Sale and Held-to-Maturity Securities [Line Items]
Available-for-Sale Securities, Gross Realized Gains	$ 4	$ 201	$ 232
Available-for-sale Securities, Gross Realized Losses	16	3	3
Available-for-Sale:
Available-for-Sale, Amortized Cost	1,935,647			1,966,417
Available-for-sale Securities, Gross Unrealized Gain1	16,950			30,531
Available-for-sale Securities, Gross Unrealized Loss1	(29,381)			(1,690)
Available-for-Sale, Estimated Fair Value	1,923,216			1,995,258
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	215,323			208,223
Held-to-maturity Securities, Gross Unrealized Gain1	5,794			10,899
Held-to-maturity Securities, Gross Unrealized Loss1	(2,089)			(189)
Held-to-Maturity, Estimated Fair Value	219,028			218,933
Obligations of U.S. government agencies
Available-for-Sale:
Available-for-Sale, Amortized Cost	744,215			751,501
Available-for-sale Securities, Gross Unrealized Gain1	1,158			3,518
Available-for-sale Securities, Gross Unrealized Loss1	(11,559)			(163)
Available-for-Sale, Estimated Fair Value	733,814			754,856
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations
Available-for-Sale:
Available-for-Sale, Amortized Cost	1,190,975			1,214,377
Available-for-sale Securities, Gross Unrealized Gain1	15,783			27,000
Available-for-sale Securities, Gross Unrealized Loss1	(17,819)			(1,526)
Available-for-Sale, Estimated Fair Value	1,188,939			1,239,851
Private mortgage-backed securities
Available-for-Sale:
Available-for-Sale, Amortized Cost	457			539
Available-for-sale Securities, Gross Unrealized Gain1	9			13
Available-for-sale Securities, Gross Unrealized Loss1	(3)			(1)
Available-for-Sale, Estimated Fair Value	463			551
State, county and municipal securities
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	197,193			192,875
Held-to-maturity Securities, Gross Unrealized Gain1	5,730			10,835
Held-to-maturity Securities, Gross Unrealized Loss1	(1,990)			(176)
Held-to-Maturity, Estimated Fair Value	200,933			203,534
Corporate securities
Held-to-Maturity:
Held-to-Maturity, Amortized Cost	18,130			14,975
Held-to-maturity Securities, Gross Unrealized Gain1	64			64
Held-to-maturity Securities, Gross Unrealized Loss1	(99)			(13)
Held-to-Maturity, Estimated Fair Value	18,095			15,026
Other securities
Held-to-Maturity:
Held-to-Maturity, Amortized Cost				373
Held-to-maturity Securities, Gross Unrealized Gain1				0
Held-to-maturity Securities, Gross Unrealized Loss1				0
Held-to-Maturity, Estimated Fair Value				$ 373

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Schedule of Recorded Investment in Past Due Loans by Class (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Loans held for investment	$ 4,223,078		$ 4,157,470
Mortgage loans held for sale	74,286		66,442
Total loans	4,297,364	4,169,963	4,223,912
Interest Income on Non-Accrual Loans if Accrued	318	584
Commercial real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	11,794		5,449
60 to 89 Days Past Due	1,766		3,163
Greater than 90 Days Past Due	0		2
Total Loans 30 or More Days Past Due	13,560		8,614
Current Loans	1,387,523		1,438,142
Non-accrual Loans	46,062		50,516
Loans held for investment	1,447,145		1,497,272
Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	4,265		3,371
60 to 89 Days Past Due	974		2,121
Greater than 90 Days Past Due	61		318
Total Loans 30 or More Days Past Due	5,300		5,810
Current Loans	189,173		195,077
Non-accrual Loans	16,288		19,309
Loans held for investment	210,761		220,196
Residential construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	1,112		283
60 to 89 Days Past Due	0		0
Greater than 90 Days Past Due	0		0
Total Loans 30 or More Days Past Due	1,112		283
Current Loans	58,245		46,816
Non-accrual Loans	1,526		2,175
Loans held for investment	60,883		49,274
Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	0		0
60 to 89 Days Past Due	0		0
Greater than 90 Days Past Due	0		0
Total Loans 30 or More Days Past Due	0		0
Current Loans	59,375		56,933
Non-accrual Loans	6,192		8,126
Loans held for investment	65,567		65,059
Total construction loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	5,377		3,654
60 to 89 Days Past Due	974		2,121
Greater than 90 Days Past Due	61		318
Total Loans 30 or More Days Past Due	6,412		6,093
Current Loans	306,793		298,826
Non-accrual Loans	24,006		29,610
Loans held for investment	337,211		334,529
Residential real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	2,139		3,896
60 to 89 Days Past Due	1,033		969
Greater than 90 Days Past Due	701		1,085
Total Loans 30 or More Days Past Due	3,873		5,950
Current Loans	792,782		691,963
Non-accrual Loans	7,545		10,426
Loans held for investment	804,200		708,339
Agricultural real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	350		1,187
60 to 89 Days Past Due	0		0
Greater than 90 Days Past Due	83		218
Total Loans 30 or More Days Past Due	433		1,405
Current Loans	166,677		171,009
Non-accrual Loans	9,689		4,830
Loans held for investment	176,799		177,244
Total real estate loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	19,660		14,186
60 to 89 Days Past Due	3,773		6,253
Greater than 90 Days Past Due	845		1,623
Total Loans 30 or More Days Past Due	24,278		22,062
Current Loans	2,653,775		2,599,940
Non-accrual Loans	87,302		95,382
Loans held for investment	2,765,355		2,717,384
Indirect consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	2,006		3,218
60 to 89 Days Past Due	416		512
Greater than 90 Days Past Due	38		32
Total Loans 30 or More Days Past Due	2,460		3,762
Current Loans	454,395		434,200
Non-accrual Loans	296		283
Loans held for investment	457,151		438,245
Other consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	867		1,044
60 to 89 Days Past Due	63		104
Greater than 90 Days Past Due	14		31
Total Loans 30 or More Days Past Due	944		1,179
Current Loans	134,975		135,574
Non-accrual Loans	540		990
Loans held for investment	136,459		137,743
Credit card consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	301		409
60 to 89 Days Past Due	275		278
Greater than 90 Days Past Due	487		392
Total Loans 30 or More Days Past Due	1,063		1,079
Current Loans	58,250		59,704
Non-accrual Loans	21		23
Loans held for investment	59,334		60,806
Total consumer loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	3,174		4,671
60 to 89 Days Past Due	754		894
Greater than 90 Days Past Due	539		455
Total Loans 30 or More Days Past Due	4,467		6,020
Current Loans	647,620		629,478
Non-accrual Loans	857		1,296
Loans held for investment	652,944		636,794
Commercial
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	8,235		5,463
60 to 89 Days Past Due	1,523		1,064
Greater than 90 Days Past Due	361		216
Total Loans 30 or More Days Past Due	10,119		6,743
Current Loans	655,189		671,414
Non-accrual Loans	15,443		10,596
Loans held for investment	680,751		688,753
Agricultural
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	1,264		1,710
60 to 89 Days Past Due	1,025		361
Greater than 90 Days Past Due	0		0
Total Loans 30 or More Days Past Due	2,289		2,071
Current Loans	119,114		111,031
Non-accrual Loans	127		525
Loans held for investment	121,530		113,627
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	0		0
Greater than 90 Days Past Due	0		0
Total Loans 30 or More Days Past Due	0		0
Current Loans	2,498		912
Non-accrual Loans	0		0
Loans held for investment	2,498		912
Loans held for investment
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	32,333		26,030
60 to 89 Days Past Due	7,075		8,572
Greater than 90 Days Past Due	1,745		2,294
Total Loans 30 or More Days Past Due	41,153		36,896
Current Loans	4,078,196		4,012,775
Non-accrual Loans	103,729		107,799
Loans held for investment	4,223,078		4,157,470
Mortgage loans originated for sale
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	0		0
60 to 89 Days Past Due	0		0
Greater than 90 Days Past Due	0		0
Total Loans 30 or More Days Past Due	0		0
Current Loans	74,286		66,442
Non-accrual Loans	0		0
Total loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
30 to 59 Days Past Due	32,333		26,030
60 to 89 Days Past Due	7,075		8,572
Greater than 90 Days Past Due	1,745		2,294
Total Loans 30 or More Days Past Due	41,153		36,896
Current Loans	4,152,482		4,079,217
Non-accrual Loans	103,729		107,799
Total loans	$ 4,297,364		$ 4,223,912

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Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012
Net accumulated other comprehensive income:
Net unrealized gain on investment securities available-for-sale	$ (7,535)		$ 17,537
Net actuarial loss on defined benefit post-retirement benefit plans	(1,504)		(1,546)
Net accumulated other comprehensive income	$ (9,039)	$ 15,991	$ 15,991

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Schedule of Actual Capital Amounts and Ratios and Selected Minimum Regulatory Thresholds (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Total risk-based capital:
Actual Amount	$ 788,109	$ 748,431
Actual Ratio	16.30%	15.60%
Adequately Capitalized Amount	387,029	384,014
Adequately Capitalized Ratio	8.00%	8.00%
Tier 1 risk-based capital:
Actual Amount	699,166	652,929
Actual Ratio	14.50%	13.60%
Adequately Capitalized Amount	193,515	192,007
Adequately Capitalized Ratio	4.00%	4.00%
Leverage capital ratio:
Actual Ratio	9.70%	8.80%
Adequately Capitalized Amount	287,443	296,559
Adequately Capitalized Ratio	4.00%	4.00%
FIB
Total risk-based capital:
Actual Amount	715,684	697,695
Actual Ratio	14.90%	14.60%
Adequately Capitalized Amount	384,810	382,245
Adequately Capitalized Ratio	8.00%	8.00%
Well Capitalized Amount	481,012	477,806
Well Capitalized Ratio	10.00%	10.00%
Tier 1 risk-based capital:
Actual Amount	643,083	622,466
Actual Ratio	13.40%	13.00%
Adequately Capitalized Amount	192,405	191,122
Adequately Capitalized Ratio	4.00%	4.00%
Well Capitalized Amount	288,607	286,683
Well Capitalized Ratio	6.00%	6.00%
Leverage capital ratio:
Actual Ratio	9.00%	8.40%
Adequately Capitalized Amount	286,562	296,061
Adequately Capitalized Ratio	4.00%	4.00%
Well Capitalized Amount	$ 358,203	$ 370,077
Well Capitalized Ratio	5.00%	5.00%

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Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Investment securities:
Held-to-maturity, fair values	$ 219,028	$ 218,933
Stockholders' equity:
Nonvoting noncumulative preferred stock, par value
Nonvoting noncumulative preferred stock, authorized shares	100,000	100,000
Nonvoting noncumulative preferred stock, issued shares	0	0
Nonvoting noncumulative preferred stock, outstanding shares	0	0

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Capital Stock

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Common Stock

Capital Stock

The Company had 18,952,123 and 17,635,369 shares of Class A common stock outstanding as of June 30, 2013 and December 31, 2012, respectively.

The Company had 24,883,758 and 25,654,954 shares of Class B common stock outstanding as of June 30, 2013 and December 31, 2012, respectively.

On December 31, 2012, the Company provided notice to holders of the Series A noncumulative redeemable preferred stock ("Series A Preferred Stock") of its intention to redeem the Series A Preferred Stock on January 18, 2013. Upon notice to holders of the redemption, the Series A Preferred Stock was reclassified from stockholders' equity to a liability. The aggregate redemption price for the Series A Preferred Stock was $50,150.

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net income	$ 21,505	$ 13,010	$ 41,549	$ 25,224
Other comprehensive income (loss), before tax:
Change in net unrealized gains (losses) during period	(35,625)	(1,864)	(41,342)	(1,107)
Reclassification adjustment for net gains included in income	12	(198)	4	(229)
Defined benefit post-retirement benefits plans:
Change in net actuarial loss	35	35	70	68
Other comprehensive income (loss), before tax	(35,578)	(2,027)	(41,268)	(1,268)
Deferred tax benefit (expense) related to other comprehensive income	13,999	797	16,238	499
Other comprehensive income (loss), net of tax	(21,579)	(1,230)	(25,030)	(769)
Comprehensive income, net of tax	$ (74)	$ 11,780	$ 16,519	$ 24,455

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Assets
Cash and due from banks	$ 128,452	$ 177,978
Federal funds sold	786	730
Interest bearing deposits in banks	238,979	622,624
Total cash and cash equivalents	368,217	801,332
Investment securities:
Available-for-sale	1,923,216	1,995,258
Held-to-maturity (estimated fair values of $199,078 and $161,877 at September 30, 2012 and December 31, 2011, respectively)	215,323	208,223
Total investment securities	2,138,539	2,203,481
Loans held for investment	4,223,078	4,157,470
Mortgage loans held for sale	74,286	66,442
Total loans	4,297,364	4,223,912
Less allowance for loan losses	98,528	100,511
Net loans	4,198,836	4,123,401
Premises and equipment, net of accumulated depreciation	181,940	187,565
Goodwill	183,673	183,673
Company-owned life insurance	77,602	76,729
Other real estate owned (OREO)	22,782	32,571
Accrued interest receivable	29,272	28,869
Mortgage servicing rights, net of accumulated amortization and impairment reserve	13,304	12,653
Deferred tax asset, net	15,397	2,597
Core deposit intangibles, net of accumulated amortization	5,228	5,937
Other assets	56,718	62,953
Total assets	7,291,508	7,721,761
Deposits:
Non-interest bearing	1,393,732	1,495,309
Interest bearing	4,536,600	4,745,102
Total deposits	5,930,332	6,240,411
Securities sold under repurchase agreements	421,314	505,785
Accounts payable and accrued expenses	44,054	48,208
Accrued interest payable	6,236	6,502
Long-term debt	37,139	37,160
Other borrowed funds	2	32
Preferred stock pending redemption	0	50,000
Subordinated debentures held by subsidiary trusts	82,477	82,477
Total liabilities	6,521,554	6,970,575
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	0	0
Common stock	279,232	271,335
Retained earnings	499,761	463,860
Accumulated other comprehensive income, net	(9,039)	15,991
Total stockholders' equity	769,954	751,186
Total liabilities and stockholders' equity	$ 7,291,508	$ 7,721,761

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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		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO expense, net of income	$ (915)	$ 1,806	$ 981	$ 2,911
Related Allowance	15,494		15,494		10,297
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
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		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	22,617		22,617		16,373
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	0		0		0
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
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	63,233		63,233		74,623
Other real estate owned	8,238		8,238		15,745
Long-lived assets to be disposed of by sale	1,327		1,327
OREO expense, net of income			2,564	1,147
Related Allowance	(15,494)		(15,494)		(10,297)
Impaired Financing Receivable, Related Allowance, Partial Loan Charge-Offs	(12,561)		(12,561)		(22,327)
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
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				522
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	22,617		22,617		16,373
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	63,233		63,233		74,623
Other real estate owned	8,238		8,238		15,745
Long-lived assets to be disposed of by sale	1,327		1,327		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	687		687
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	733,814		733,814		754,856
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	733,814		733,814		754,856
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	1,188,939		1,188,939		1,239,851
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	1,188,939		1,188,939		1,239,851
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	463		463		551
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	463		463		551
Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,923,216		1,923,216		1,995,258
Mortgage servicing rights	22,617		22,617		16,373
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
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	1,923,216		1,923,216		1,995,258
Mortgage servicing rights	22,617		22,617		16,373
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
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	63,232		63,232		74,623
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,923,216		1,923,216		1,995,258
Mortgage servicing rights	13,304		13,304		12,653
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	91,287		91,287		107,247
Long-lived assets to be disposed of by sale	$ 2,014		$ 2,014

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Regulatory Capital (Tables)

6 Months Ended

Jun. 30, 2013

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 June 30, 2013 and December 31, 2012 are presented in the following tables:

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
June 30, 2013
Total risk-based capital:
Consolidated	$	788,109	16.3	%	$	387,029	8.0	%	NA		NA
FIB	715,684		14.9		384,810		8.0		$	481,012	10.0	%
Tier 1 risk-based capital:
Consolidated	699,166		14.5		193,515		4.0		NA		NA
FIB	643,083		13.4		192,405		4.0		$	288,607	6.0
Leverage capital ratio:
Consolidated	699,166		9.7		287,443		4.0		NA		NA
FIB	643,083		9.0		286,562		4.0		$	358,203	5.0

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2012
Total risk-based capital:
Consolidated	$	748,431	15.6	%	$	384,014	8.0	%	NA		NA
FIB	697,695		14.6		382,245		8.0		$	477,806	10.0	%
Tier 1 risk-based capital:
Consolidated	652,929		13.6		192,007		4.0		NA		NA
FIB	622,466		13.0		191,122		4.0		$	286,683	6.0
Leverage capital ratio:
Consolidated	652,929		8.8		296,559		4.0		NA		NA
FIB	622,466		8.4		296,061		4.0		$	370,077	5.0

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Subsequent Events

6 Months Ended

Jun. 30, 2013

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. On July 25, 2013, the Company's Board of Directors declared a quarterly dividend to common shareholders of $0.14per share, to be paid on August 15, 2013 to shareholders of record as of August 5, 2013. No other events requiring recognition or disclosure were identified.

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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		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Net Income (Loss) Available to Common Stockholders, Basic
Net income	$ 21,505	$ 13,010	$ 41,549	$ 25,224
Preferred stock dividends	0	853	0	1,706
Net income available to common stockholders	$ 21,505	$ 12,157	$ 41,549	$ 23,518
Weighted Average Number of Shares Outstanding, Basic and Diluted
Weighted average common shares outstanding for basic earnings per share computation	43,480,502	42,966,926	43,335,682	42,920,347
Dilutive effect of stock-based compensation	427,785	93,278	376,978	96,111
Weighted average common shares outstanding for diluted earnings per common share computation	43,908,287	43,060,204	43,712,660	43,016,458
Earnings Per Share, Basic and Diluted
Basic earnings per common share	$ 0.49	$ 0.28	$ 0.96	$ 0.55
Diluted earnings per common share	$ 0.49	$ 0.28	$ 0.95	$ 0.55
Stock Options
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			976,063	2,828,234
Unvested Restricted Stock
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			56,668	48,196

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Schedule of Loans Renegotiated in Troubled Debt Restructurings (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013 notes		Jun. 30, 2013 notes		Dec. 31, 2012
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Loans Renegotiated in Troubled Debt Restructurings	$ 67,939		$ 67,939		$ 76,597
Loans Renegotiated in Troubled Debt Restructurings, Non-Accrual Loans	44,533		44,533		44,665
Loans Renegotiated in Troubled Debt Restructurings, Accrual Loans	23,406		23,406		31,932
Number of Notes	6,000		21,000
Principle Balance at Restructure Date	1,205		7,822
Balance	625		1,235
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1		3
Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		170
Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	1,205		1,772
Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		5,610
Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	270	[1]
Commercial real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			10,000
Principle Balance at Restructure Date			5,917
Balance	625		625
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	1		1
Commercial real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Commercial real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			389
Commercial real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			5,345
Commercial real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			183	[1]
Land acquisition & development construction real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	1,000		2,000
Principle Balance at Restructure Date	334		454
Land acquisition & development construction real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		120
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	334		334
Land acquisition & development construction real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Land acquisition & development construction real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	0	[1]
Residential Construction Real Estate [Member]
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			2,000
Principle Balance at Restructure Date			408
Residential Construction Real Estate [Member] | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Residential Construction Real Estate [Member] | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			408
Residential Construction Real Estate [Member] | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Residential Construction Real Estate [Member] | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			0
Residential construction real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	2,000
Principle Balance at Restructure Date	408
Balance			278
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			1
Residential construction real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0
Residential construction real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	408
Residential construction real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0
Residential construction real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0
Total construction loans
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	3,000		4,000
Principle Balance at Restructure Date	742		862
Total construction loans | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		120
Total construction loans | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	742		742
Total construction loans | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Total construction loans | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	0	[1]
Residential real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	3,000		3,000
Principle Balance at Restructure Date	463		463
Residential real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Residential real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	463		463
Residential real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		0
Residential real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	0	[1]
Total real estate loans
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes	6,000		17,000
Principle Balance at Restructure Date	1,205		7,242
Balance	625		903
Financing Receivable, Modifications, Subsequent Default, Number of Contracts, During Period	1		2
Total real estate loans | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		120
Total real estate loans | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	1,205		1,594
Total real estate loans | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0		5,345
Total real estate loans | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date	0	[1]	183	[1]
Commercial
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes			4,000
Principle Balance at Restructure Date			580
Commercial | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			50
Commercial | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			178
Commercial | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			265
Commercial | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Principle Balance at Restructure Date			$ 87
Commercial
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Subsequent Default, Number of Contracts			0

[1]

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Maturities of Investment Securities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis, Rolling Maturity
Available-for-Sale Amortized Cost, Within One Year	$ 328,967
Available-for-Sale Amortized Cost, After One Year but Within Five Years	944,490
Available-for-Sale Amortized Cost, After Five Years but Within Ten Years	602,366
Available-for-Sale Amortized Cost, After Ten Years	59,824
Available-for-Sale Amortized Cost, Total	1,935,647
Available-for-sale Securities, Debt Maturities, Fair Value, Rolling Maturity
Available-for-Sale Estimated Fair Value, Within One Year	328,602
Available-for-Sale Estimated Fair Value, After One Year but Within Five Years	940,392
Available-for-Sale Estimated Fair Value, After Ten Years	594,500
Available-for-Sale Estimated Fair Value, After Five Years but Within Ten Years	59,722
Available-for-Sale, Estimated Fair Value	1,923,216	1,995,258
Held-to-maturity Securities, Debt Maturities, Net Carrying Amount
Held-to-Maturity Amortized Cost, Within One Year	4,898
Held-to-Maturity Amortized Cost, After One Year but Within Five Years	57,519
Held-to-Maturity Amortized Cost, After Five Years but Within Ten Years	88,943
Held-to-Maturity Amortized Cost, After Ten Years	63,963
Held-to-Maturity Amortized Cost, Total	215,323	208,223
Held-to-maturity Securities, Debt Maturities, Fair Value, Rolling Maturity
Held-to-Maturity Estimated Fair Value, Within One Year	4,935
Held-to-Maturity Estimated Fair Value, After One Year but Within Five Years	58,058
Held-to-Maturity Estimated Fair Value, After Five Years but Within Ten Years	90,890
Held-to-Maturity Estimated Fair Value, After Ten Years	65,145
Held-to-Maturity, Estimated Fair Value	219,028	218,933
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	403,826
Investment Securities Primarily Classified as Available-for-Sale, Fair Value, After One Year but Within Five Years	395,608
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	117,486
Investment Securities Primarily Classified as Available-for-Sale, Fair Value, After One Year but Within Five Years	$ 115,366

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Schedule of Loans by Class (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012
Loans and Leases Receivable [Line Items]
Loans held for investment	$ 4,223,078	$ 4,157,470
Mortgage loans held for sale	74,286	66,442
Total loans	4,297,364	4,223,912	4,169,963
Commercial real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	1,447,145	1,497,272
Land acquisition & development construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	210,761	220,196
Residential construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	60,883	49,274
Commercial construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	65,567	65,059
Total construction loans
Loans and Leases Receivable [Line Items]
Loans held for investment	337,211	334,529
Residential real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	804,200	708,339
Agricultural real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	176,799	177,244
Total real estate loans
Loans and Leases Receivable [Line Items]
Loans held for investment	2,765,355	2,717,384
Indirect consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	457,151	438,245
Other consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	136,459	137,743
Credit card consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	59,334	60,806
Total consumer loans
Loans and Leases Receivable [Line Items]
Loans held for investment	652,944	636,794
Commercial
Loans and Leases Receivable [Line Items]
Loans held for investment	680,751	688,753
Agricultural
Loans and Leases Receivable [Line Items]
Loans held for investment	121,530	113,627
Other, including overdrafts
Loans and Leases Receivable [Line Items]
Loans held for investment	$ 2,498	$ 912

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OREO

6 Months Ended

Jun. 30, 2013

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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Beginning balance	$	32,470		$	44,756		$	32,571		$	37,452
Additions	3,224			19,139			8,555			33,117
Capitalized improvements	3			406			13			75
Valuation adjustments	(259		)	(569		)	(2,564		)	(1,147		)
Dispositions	(12,656		)	(9,915		)	(15,793		)	(15,680		)
Ending balance	$	22,782		$	53,817		$	22,782		$	53,817

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Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Schedule of Comprehensive Income (Loss)

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 June 30,	2013			2012			2013			2012			2013			2012
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	(35,625	)	$	(1,864	)	$	(14,018	)	$	(733	)	$	(21,607	)	$	(1,131	)
Reclassification adjustment for net losses (gains) included in net income	12			(198		)	5			(78		)	7			(120		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	35			35			14			14			21			21
Total other comprehensive loss	$	(35,578	)	$	(2,027	)	$	(13,999	)	$	(797	)	$	(21,579	)	$	(1,230	)

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Six Months Ended June 30,	2013			2012			2013			2012			2013			2012
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	(41,342	)	$	(1,107	)	$	(16,268	)	$	(436	)	$	(25,074	)	$	(671	)
Reclassification adjustment for net losses (gains) included in net income	4			(229		)	2			(90		)	2			(139		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	70			68			28			27			42			41
Total other comprehensive loss	$	(41,268	)	$	(1,268	)	$	(16,238	)	$	(499	)	$	(25,030	)	$	(769	)

Schedule of Accumulated Other Comprehensive Income (Loss)

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

	June 30, 2013			December 31, 2012
Net unrealized gain (loss) on investment securities available-for-sale	$	(7,535	)	$	17,537
Net actuarial loss on defined benefit post-retirement benefit plans	(1,504		)	(1,546		)
Net accumulated other comprehensive income (loss)	$	(9,039	)	$	15,991

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OREO (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Real Estate Acquired Through Foreclosure [Roll Forward]
Beginning balance	$ 32,470	$ 44,756	$ 32,571	$ 37,452
Additions	3,224	19,139	8,555	33,117
Capitalized improvements	3	406	13	75
Valuation adjustments	(259)	(569)	(2,564)	(1,147)
Dispositions	(12,656)	(9,915)	(15,793)	(15,680)
Ending balance	$ 22,782	$ 53,817	$ 22,782	$ 53,817

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Regulatory Capital

6 Months Ended

Jun. 30, 2013

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 June 30, 2013 and December 31, 2012, 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 June 30, 2013 and December 31, 2012 are presented in the following tables:

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
June 30, 2013
Total risk-based capital:
Consolidated	$	788,109	16.3	%	$	387,029	8.0	%	NA		NA
FIB	715,684		14.9		384,810		8.0		$	481,012	10.0	%
Tier 1 risk-based capital:
Consolidated	699,166		14.5		193,515		4.0		NA		NA
FIB	643,083		13.4		192,405		4.0		$	288,607	6.0
Leverage capital ratio:
Consolidated	699,166		9.7		287,443		4.0		NA		NA
FIB	643,083		9.0		286,562		4.0		$	358,203	5.0

	Actual				Adequately Capitalized				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2012
Total risk-based capital:
Consolidated	$	748,431	15.6	%	$	384,014	8.0	%	NA		NA
FIB	697,695		14.6		382,245		8.0		$	477,806	10.0	%
Tier 1 risk-based capital:
Consolidated	652,929		13.6		192,007		4.0		NA		NA
FIB	622,466		13.0		191,122		4.0		$	286,683	6.0
Leverage capital ratio:
Consolidated	652,929		8.8		296,559		4.0		NA		NA
FIB	622,466		8.4		296,061		4.0		$	370,077	5.0

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Allowance For Loan Losses

6 Months Ended

Jun. 30, 2013

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 June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	71,666		$	7,088		$	18,652		$	480		$	18	$	97,904
Provision charged to operating expense	(1,009		)	579			763			27			15		375
Less loans charged-off	(2,027		)	(1,299		)	(569		)	—			—		(3,895		)
Add back recoveries of loans previously    charged-off	2,873			672			596			3			—		4,144
Ending balance	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
Six Months Ended June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	75,782		$	7,140		$	17,073		$	504		$	12	$	100,511
Provision charged to operating expense	(2,044		)	1,116			1,778			4			21		875
Less loans charged-off	(6,170		)	(2,361		)	(1,380		)	(4		)	—		(9,915		)
Add back recoveries of loans previously    charged-off	3,935			1,145			1,971			6			—		7,057
Ending balance	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
As of June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	10,267		$	—		$	5,205		$	22		$	—	$	15,494
Loans collectively evaluated for impairment	61,236			7,040			14,237			488			33		83,034
Allowance for loan losses	$	71,503		$	7,040		$	19,442		$	510		$	33	$	98,528
As of June 30, 2013	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	107,241		$	—		$	16,710		$	139		$	—	$	124,090
Collectively evaluated for impairment	2,732,400			652,944			664,041			121,391			2,498		4,173,274
Total loans	$	2,839,641		$	652,944		$	680,751		$	121,530		$	2,498	$	4,297,364

Three Months Ended June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	89,128		$	7,212		$	18,380		$	1,182		$	—	$	115,902
Provision charged to operating expense	10,419			784			866			(69		)	—		12,000
Less loans charged-off	(22,350		)	(1,210		)	(3,180		)	(5		)	—		(26,745		)
Add back recoveries of loans previously    charged-off	526			488			609			14			—		1,637
Ending balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794

Six Months Ended June 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	16,801			193			6,307			(51		)	—		23,250
Less loans charged-off	(27,506		)	(2,522		)	(5,692		)	(112		)	—		(35,832		)
Add back recoveries of loans previously    charged-off	1,032			1,009			735			19			—		2,795
Ending balance	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
As of June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	15,199		$	—		$	2,339		$	405		$	—	$	17,943
Loans collectively evaluated for impairment	62,524			7,274			14,336			717			—		84,851
Allowance for loan losses	$	77,723		$	7,274		$	16,675		$	1,122		$	—	$	102,794
As of June 30, 2012	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Total loans:
Individually evaluated for impairment	$	150,026		$	—		$	11,974		$	500		$	—	$	162,500
Collectively evaluated for impairment	2,538,281			621,212			708,036			137,615			2,319		4,007,463
Total loans	$	2,688,307		$	621,212		$	720,010		$	138,115		$	2,319	$	4,169,963

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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Consolidated Statements of Changes in Stockholders Equity (Unaudited) (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Common stock
Common stock transactions:
Common shares purchased and retired	25,677	17,981
Common shares issued	26,096	23,973
Non-vested common shares issued	108,873	122,912
Non-vested common shares forfeited	10,138	3,193
Stock options exercised	446,404	118,865
Shares tendered in payment of option price and income tax withholding amounts	150,290	39,667
Retained earnings
Cash dividends declared:
Common (in dollars per share)	$ 0.13	$ 0.2400
Preferred (in dollars per share)	0.00%	6.75%

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Schedule of Estimated Fair Values of Financial Instruments by Level of Valuation Inputs (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Financial assets:
Investment securities held-to-maturity	$ 219,028	$ 218,933
Financial liabilities:
Preferred Stock, Pending Redemption	0	50,000
Carrying Amount
Financial assets:
Cash and cash equivalents	368,217	801,332
Investment securities available-for-sale	1,923,216	1,995,258
Investment securities held-to-maturity	215,323	208,223
Accrued interest receivable	29,272	28,869
Mortgage servicing rights	13,304	12,653
Net loans	4,198,836	4,123,401
Total financial assets	6,748,168	7,169,736
Financial liabilities:
Total deposits, excluding time deposits	4,642,704	4,854,927
Time deposits	1,287,628	1,385,484
Securities sold under repurchase agreements	421,314	505,785
Other borrowed funds	2	32
Accrued interest payable	6,236	6,502
Long-term debt	37,139	37,160
Preferred Stock, Pending Redemption		50,000
Subordinated debentures held by subsidiary trusts	82,477	82,477
Total financial liabilities	6,477,500	6,922,367
Estimated Fair Value
Financial assets:
Cash and cash equivalents	368,217	801,332
Investment securities available-for-sale	1,923,216	1,995,258
Investment securities held-to-maturity	219,028	218,933
Accrued interest receivable	29,272	28,869
Mortgage servicing rights	22,617	16,373
Net loans	4,159,610	4,142,426
Total financial assets	6,721,960	7,203,191
Financial liabilities:
Total deposits, excluding time deposits	4,642,704	4,854,927
Time deposits	1,296,077	1,394,403
Securities sold under repurchase agreements	421,314	505,785
Other borrowed funds	2	32
Accrued interest payable	6,236	6,502
Long-term debt	34,962	35,104
Preferred Stock, Pending Redemption		50,000
Subordinated debentures held by subsidiary trusts	69,951	62,409
Total financial liabilities	6,471,246	6,909,162
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
Total financial liabilities	0	0
Significant Other Observable Inputs (Level 2) | Estimated Fair Value
Financial assets:
Cash and cash equivalents	368,217	801,332
Investment securities available-for-sale	1,923,216	1,995,258
Investment securities held-to-maturity	219,028	218,933
Accrued interest receivable	29,272	28,869
Mortgage servicing rights	22,617	16,373
Net loans	4,096,377	4,067,803
Total financial assets	6,658,727	7,128,568
Financial liabilities:
Total deposits, excluding time deposits	4,642,704	4,854,927
Time deposits	1,296,077	1,394,403
Securities sold under repurchase agreements	421,314	505,785
Other borrowed funds	2	32
Accrued interest payable	6,236	6,502
Long-term debt	34,962	35,104
Preferred Stock, Pending Redemption		50,000
Subordinated debentures held by subsidiary trusts	69,951	62,409
Total financial liabilities	6,471,246	6,909,162
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	63,233	74,623
Total financial assets	63,233	74,623
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
Total financial liabilities	$ 0	$ 0

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Financial Instruments with Off-Balance Sheet Risk (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Entity Information [Line Items]
Credit Extension Commitments	$ 1,110,057
Credit Extension Commitments, Beyond One Year	289,285
Standby Letters of Credit
Entity Information [Line Items]
Credit Extension Commitments	70,957
Unused Credit Card Lines
Entity Information [Line Items]
Credit Extension Commitments	$ 287,147

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Investment Securities Realized Gains (Losses) on Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2012
Investments, Debt and Equity Securities [Abstract]
Gross realized gains	$ 4	$ 201	$ 232
Gross realized losses	$ 16	$ 3	$ 3

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Supplemental Disclosures to Consolidated Statement of Cash Flows

6 Months Ended

Jun. 30, 2013

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 $8,555 and $33,117 to OREO during the six months ended June 30, 2013 and 2012, respectively.

The Company transferred internally originated mortgage servicing rights of $2,149 and $2,061 from loans to mortgage servicing assets during the six months ended June 30, 2013 and 2012, respectively.

The Company reclassified tax credit investments with a carrying value of $429 from held-to-maturity investment securities to other assets during the six months ended June 30, 2013.

The Company transferred bank buildings and land pending disposal with book values of $1,448 and $566 to other assets during the six months ended June 30, 2013 and 2012, respectively.

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Earnings per Common Share

6 Months Ended

Jun. 30, 2013

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 six month periods ended June 30, 2013 and 2012.

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Net income	$	21,505	$	13,010	$	41,549	$	25,224
Less preferred stock dividends	—		853		—		1,706
Net income available to common shareholders, basic and diluted	$	21,505	$	12,157	$	41,549	$	23,518
Weighted average common shares outstanding for basic earnings per share computation	43,480,502		42,966,926		43,335,682		42,920,347
Dilutive effects of stock-based compensation	427,785		93,278		376,978		96,111
Weighted average common shares outstanding for diluted earnings per common share computation	43,908,287		43,060,204		43,712,660		43,016,458
Basic earnings per common share	$	0.49	$	0.28	$	0.96	$	0.55
Diluted earnings per common share	$	0.49	$	0.28	$	0.95	$	0.55

The Company had 976,063 and 2,828,234 stock options outstanding as of June 30, 2013 and 2012, respectively, that were not included in the computation of diluted earnings per common share because their effect would be anti-dilutive. The Company had 56,668 and 48,196 shares of unvested restricted stock as of June 30, 2013 and 2012, 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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Recent Authoritative Accounting Guidance

6 Months Ended

Jun. 30, 2013

Accounting Changes and Error Corrections [Abstract]

Recent Authoritative Accounting Guidance

Recent Authoritative Accounting Guidance

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 that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. In January 2013, the Financial Accounting Standards Board, or FASB, issued ASU 2013-01, "Clarifying the Scope and Disclosures about Offsetting Assets and Liabilities," to clarify that the scope of ASU 2011-11 applies to derivatives accounted for in accordance with Topic 815, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are either offset or subject to an enforceable master netting arrangement or similar agreement. ASU 2013-01 also clarifies that other types of financial assets and financial liabilities subject to a master netting arrangement or similar agreement are not subject to the provisions of ASU 2011-11. ASU 2011-11 and ASU 2013-01 became effective for the Company on January 1, 2013, and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-02 “Comprehensive Income (Topic 220) - Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires entities to provide information about amounts reclassified out of accumulated other comprehensive income by component. The amendments in ASU 2013-02 require entities to present, either on the face of the income statement or in the notes significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required by U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, entities are required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. ASU 2013-02 became effective for the Company on January 1, 2013, and did not have a significant impact on the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-04 "Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date." ASU 2013-04 requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The amendments in ASU 2013-04 also requires an entity to disclose the nature, amount and other information about those obligations. ASU 2013-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and is applied retrospectively to all prior periods presented. The Company does not expect amendments in ASU 2013-04 to impact the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-07 "Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting." ASU 2013-07 clarifies when an entity should apply the liquidation basis of accounting. ASU 2013-07 also provides principles for the recognition and measurement of assets and liabilities and requirements for financial statements prepared using the liquidation basis of accounting. ASU 2013-07 is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The Company does not expect amendments in ASU 2013-07 to impact the Company's consolidated financial statements, results of operations or liquidity.

ASU 2013-10 "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight INdex Swap Rate) as a Benchmark INterest Rate for Hedge Accounting Purposes." The amendments in ASU 2013-10 permit the Fed Funds Effective Swap Rate to be used as a U.S. benchmark interest rate for hedge accounting purposes, in addition to interest rates on direct treasury obligations of the United States and the London Interbank Offered Rate. ASU 2013-10 is effective prospectively for qualifying new or redesigned hedging relationships entered into on or after July 17, 2013. The Company does not currently engage in derivatives or hedging activities; therefore, the amendments in ASU 2013-10 will not impact the Company's consolidated financial statements, results of operations or liquidity.

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Other Comprehensive Income

6 Months Ended

Jun. 30, 2013

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 June 30,	2013			2012			2013			2012			2013			2012
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	(35,625	)	$	(1,864	)	$	(14,018	)	$	(733	)	$	(21,607	)	$	(1,131	)
Reclassification adjustment for net losses (gains) included in net income	12			(198		)	5			(78		)	7			(120		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	35			35			14			14			21			21
Total other comprehensive loss	$	(35,578	)	$	(2,027	)	$	(13,999	)	$	(797	)	$	(21,579	)	$	(1,230	)

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Six Months Ended June 30,	2013			2012			2013			2012			2013			2012
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	(41,342	)	$	(1,107	)	$	(16,268	)	$	(436	)	$	(25,074	)	$	(671	)
Reclassification adjustment for net losses (gains) included in net income	4			(229		)	2			(90		)	2			(139		)
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	70			68			28			27			42			41
Total other comprehensive loss	$	(41,268	)	$	(1,268	)	$	(16,238	)	$	(499	)	$	(25,030	)	$	(769	)

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013
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	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A Common Stock
Entity Common Stock, Shares Outstanding	18,952,123
Class B Common Stock
Entity Common Stock, Shares Outstanding	24,883,758

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2013

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
As of June 30, 2013	Balance		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	$	733,814	$	—	$	733,814	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,188,939		—		1,188,939		—
Private mortgage-backed securities	463		—		463		—
Mortgage servicing rights	22,617		—		22,617		—

			Fair Value Measurements at Reporting Date Using
As of December 31, 2012	Balance		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	$	754,856	$	—	$	754,856	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	1,239,851		—		1,239,851		—
Private mortgage-backed securities	551		—		551		—
Mortgage servicing rights	16,373		—		16,373		—

There were no transfers between levels of the fair value hierarchy during the six months ended June 30, 2013 or 2012.

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.

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
As of June 30, 2013	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	63,233	$	—	$	—	$	63,233
Other real estate owned	8,238		—		—		8,238
Long-lived assets to be disposed of by sale	1,327		—		—		1,327
			Fair Value Measurements at Reporting Date Using
As of December 31, 2012	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	74,623	$	—	$	—	$	74,623
Other real estate owned	15,745		—		—		15,745
Long-lived assets to be disposed of by sale	496		—		—		496

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 June 30, 2013, certain impaired loans with a carrying value of $91,287 were reduced by specific valuation allowance allocations of $15,494 and partial loan charge-offs of $12,561 resulting in a reported fair value of $63,232. As of December 31, 2012, certain impaired loans with a carrying value of $107,247 were reduced by specific valuation allowance allocations of $10,297 and partial loan charge-offs of $22,327 resulting in a reported fair value of $74,623.

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 $2,564 during the six months ended June 30, 2013 included $196 directly related to receipt of updated appraisals and $2,368 based on management estimates of the current fair value of properties. Write-downs of $1,147 during the six months ended June 30, 2012 included adjustments of $625 directly related to receipt of updated appraisals and $522 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 June 30, 2013, the Company had long-lived assets to be disposed of by sale with a carrying value of $2,014 that had been reduced by write-downs of $687 resulting in a reported fair value of $1,327. As of December 31, 2012, the Company had a long-lived asset to be disposed of by sale with a carrying value of $566 that was reduced by write-downs of $70 charged to other expense resulting in a fair value of $496 .

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 June 30, 2013 and December 31, 2012, 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 amounts 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 fixed and floating rate subordinated debentures, floating rate subordinated term loan, notes payable to the FHLB, fixed rate subordinated term debt, and capital lease obligation are estimated by discounting future cash flows using current rates for advances with similar characteristics. The carrying value of the preferred stock pending redemption approximated fair value due to the short-term nature of the instrument.

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 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 June 30, 2013	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	$	368,217	$	368,217	$	—	$	368,217	$	—
Investment securities available-for-sale	1,923,216		1,923,216		—		1,923,216		—
Investment securities held-to-maturity	215,323		219,028		—		219,028		—
Accrued interest receivable	29,272		29,272		—		29,272		—
Mortgage servicing rights, net	13,304		22,617		—		22,617		—
Net loans	4,198,836		4,159,610		—		4,096,377		63,233
Total financial assets	$	6,748,168	$	6,721,960	$	—	$	6,658,727	$	63,233
Financial liabilities:
Total deposits, excluding time deposits	$	4,642,704	$	4,642,704	$	—	$	4,642,704	$	—
Time deposits	1,287,628		1,296,077		—		1,296,077		—
Securities sold under repurchase agreements	421,314		421,314		—		421,314		—
Other borrowed funds	2		2		—		2		—
Accrued interest payable	6,236		6,236		—		6,236		—
Long-term debt	37,139		34,962		—		34,962		—
Subordinated debentures held by subsidiary    trusts	82,477		69,951		—		69,951		—
Total financial liabilities	$	6,477,500	$	6,471,246	$	—	$	6,471,246	$	—

					Fair Value Measurements at Reporting Date Using
As of December 31, 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	$	801,332	$	801,332	$	—	$	801,332	$	—
Investment securities available-for-sale	1,995,258		1,995,258		—		1,995,258		—
Investment securities held-to-maturity	208,223		218,933		—		218,933		—
Accrued interest receivable	28,869		28,869		—		28,869		—
Mortgage servicing rights, net	12,653		16,373		—		16,373		—
Net loans	4,123,401		4,142,426		—		4,067,803		74,623
Total financial assets	$	7,169,736	$	7,203,191	$	—	$	7,128,568	$	74,623
Financial liabilities:
Total deposits, excluding time deposits	$	4,854,927	$	4,854,927	$	—	$	4,854,927	$	—
Time deposits	1,385,484		1,394,403		—		1,394,403		—
Securities sold under repurchase agreements	505,785		505,785		—		505,785		—
Other borrowed funds	32		32		—		32		—
Accrued interest payable	6,502		6,502		—		6,502		—
Long-term debt	37,160		35,104		—		35,104		—
Preferred stock pending redemption	50,000		50,000				50,000
Subordinated debentures held by subsidiary    trusts	82,477		62,409		—		62,409		—
Total financial liabilities	$	6,922,367	$	6,909,162	$	—	$	6,909,162	$	—