10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________________________

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

For the quarterly period ended September 30, 2015

OR

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

For the transition period from  to

COMMISSION FILE NUMBER 001-34653

________________________________________________________________________________________________________

First Interstate BancSystem, Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________________________

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

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

______________________________________________________________

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

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

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

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

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

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

September 30, 2015 – Class A common stock	21,583,324
September 30, 2015 – Class B common stock	23,761,683

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES Quarterly Report on Form 10-Q Index
		Page
Part I.	Financial Information
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets - September 30, 2015 and December 31, 2014	3
	Consolidated Statements of Income - Three and Nine Months Ended September 30, 2015 and 2014	4
	Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2015 and 2014	5
	Consolidated Statements of Changes in Stockholders’ Equity - Nine Months Ended September 30, 2015 and 2014	6
	Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2015 and 2014	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	53
Part II.	Other Information
Item 1.	Legal Proceedings	53
Item 1A .	Risk Factors	54
Item  2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	54
Signatures		56

2

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited)
	September 30, 2015		December 31, 2014
Assets
Cash and due from banks	$	139,879	$	147,894
Federal funds sold	2,263		543
Interest bearing deposits in banks	566,153		650,233
Total cash and cash equivalents	708,295		798,670
Investment securities:
Available-for-sale	1,545,093		1,711,924
Held-to-maturity (estimated fair values of $534,633 and $584,533 at September 30, 2015 and December 31, 2014, respectively)	522,543		575,186
Total investment securities	2,067,636		2,287,110
Loans held for investment	5,120,794		4,856,615
Mortgage loans held for sale	55,686		40,828
Total loans	5,176,480		4,897,443
Less allowance for loan losses	74,256		74,200
Net loans	5,102,224		4,823,243
Goodwill	204,409		205,574
Premises and equipment, net of accumulated depreciation	190,386		195,212
Company-owned life insurance	185,990		153,821
Other real estate owned (“OREO”)	8,031		13,554
Accrued interest receivable	31,590		27,063
Core deposit intangibles, net of accumulated amortization	11,425		13,282
Mortgage servicing rights, net of accumulated amortization and impairment reserve	15,336		14,038
Deferred tax asset, net	—		4,874
Other assets	79,208		73,495
Total assets	$	8,604,530	$	8,609,936
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	1,832,535	$	1,791,364
Interest bearing	5,203,259		5,214,848
Total deposits	7,035,794		7,006,212
Securities sold under repurchase agreements	437,533		502,250
Accounts payable and accrued expenses	48,698		66,164
Accrued interest payable	5,327		5,833
Deferred tax liability	13,027		—
Long-term debt	43,089		38,067
Other borrowed funds	10		9
Subordinated debentures held by subsidiary trusts	82,477		82,477
Total liabilities	7,665,955		7,701,012
Stockholders’ equity:
Nonvoting noncumulative preferred stock without par value; authorized 100,000 shares; no shares issued and outstanding as of September 30, 2015 or December 31, 2014	—		—
Common stock	309,167		323,596
Retained earnings	623,967		587,862
Accumulated other comprehensive income (loss), net	5,441		(2,534		)
Total stockholders’ equity	938,575		908,924
Total liabilities and stockholders’ equity	$	8,604,530	$	8,609,936

See accompanying notes to unaudited consolidated financial statements.

3

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Interest income:
Interest and fees on loans	$	62,062		$	61,007		$	181,835		$	170,290
Interest and dividends on investment securities:
Taxable	7,410			7,259			23,381			22,208
Exempt from federal taxes	962			1,085			3,061			3,265
Interest on deposits in banks	342			374			1,002			830
Interest on federal funds sold	4			3			11			7
Total interest income	70,780			69,728			209,290			196,600
Interest expense:
Interest on deposits	3,241			3,487			9,789			10,238
Interest on securities sold under repurchase agreements	55			52			162			181
Interest on other borrowed funds	—			27			—			27
Interest on long-term debt	544			482			1,596			1,431
Interest on subordinated debentures held by subsidiary trusts	610			598			1,800			1,778
Total interest expense	4,450			4,646			13,347			13,655
Net interest income	66,330			65,082			195,943			182,945
Provision for loan losses	1,098			261			3,533			(6,740		)
Net interest income after provision for loan losses	65,232			64,821			192,410			189,685
Non-interest income:
Other service charges, commissions and fees	11,095			10,458			32,135			29,313
Income from the origination and sale of loans	7,983			7,346			22,691			18,386
Wealth management revenues	5,233			5,157			15,067			14,221
Service charges on deposit accounts	4,379			4,331			12,376			12,135
Investment securities gains (losses), net	23			(8		)	75			80
Other income	1,769			2,079			7,690			5,905
Total non-interest income	30,482			29,363			90,034			80,040
Non-interest expense:
Salaries and wages	25,460			25,914			76,902			72,796
Employee benefits	7,312			7,841			23,162			23,318
Occupancy, net	4,413			4,534			13,434			13,026
Furniture and equipment	3,849			3,338			11,345			9,696
Outsourced technology services	2,520			2,346			7,576			6,955
OREO expense, net of income	(720		)	(58		)	(1,604		)	(211		)
Professional fees	1,916			1,233			4,731			3,881
FDIC insurance premiums	1,190			1,172			3,636			3,381
Mortgage servicing rights amortization	617			591			1,863			1,774
Mortgage servicing rights impairment recovery	(76		)	(61		)	(147		)	(117		)
Core deposit intangibles amortization	842			688			2,551			1,396
Other expenses	12,613			12,368			37,994			33,672
Loss contingency expenses	5,000			4,000			5,000			4,000
Acquisition expenses	566			1,052			629			1,649
Total non-interest expense	65,502			64,958			187,072			175,216
Income before income tax expense	30,212			29,226			95,372			94,509
Income tax expense	10,050			10,071			32,008			32,884
Net income	$	20,162		$	19,155		$	63,364		$	61,625
Basic earnings per common share	$	0.45		$	0.43		$	1.40		$	1.39
Diluted earnings per common share	$	0.44		$	0.42		$	1.39		$	1.37

See accompanying notes to unaudited consolidated financial statements.

4

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net income	$	20,162		$	19,155		$	63,364		$	61,625
Other comprehensive income, before tax:
Investment securities available-for sale:
Change in net unrealized gains (losses) during period	10,855			(3,773		)	12,264			12,942
Reclassification adjustment for net (gains) losses included in income	(23		)	8			(75		)	(80		)
Change in unamortized loss on available-for-sale securities transferred into held-to-maturity	448			451			1,353			902
Unrealized loss on derivatives	(436		)	—			(436		)	—
Defined benefit post-retirement benefits plans:
Change in net actuarial loss	15			33			43			103
Other comprehensive income (loss), before tax	10,859			(3,281		)	13,149			13,867
Deferred tax benefit (expense) related to other comprehensive income	(4,273		)	1,291			(5,174		)	(5,456		)
Other comprehensive income (loss), net of tax	6,586			(1,990		)	7,975			8,411
Comprehensive income, net of tax	$	26,748		$	17,165		$	71,339		$	70,036

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)
	Common stock			Retained earnings			Accumulated other comprehensive income (loss)			Total stockholders’ equity
Balance at December 31, 2014	$	323,596		$	587,862		$	(2,534	)	$	908,924
Net income	—			63,364			—			63,364
Other comprehensive income, net of tax expense	—			—			7,975			7,975
Common stock transactions:
789,743 common shares purchased and retired	(20,548		)	—			—			(20,548		)
21,414 common shares issued	—			—			—			—
169,577 non-vested common shares issued	—			—			—			—
3,484 non-vested common shares forfeited	—			—			—			—
158,828 stock options exercised, net of 58,996 shares tendered in payment of option price and income tax withholding amounts	1,909			—			—			1,909
Tax benefit of stock-based compensation	979			—			—			979
Stock-based compensation expense	3,231			—			—			3,231
Common cash dividend declared ($0.60 per share)	—			(27,259		)	—			(27,259		)
Balance at September 30, 2015	$	309,167		$	623,967		$	5,441		$	938,575
Balance at December 31, 2013	$	285,535		$	532,087		$	(16,041	)	$	801,581
Net income	—			61,625			—			61,625
Other comprehensive income, net of tax expense	—			—			8,411			8,411
Common stock transactions:
387,967 common shares purchased and retired	(9,736		)	—			—			(9,736		)
1,402,811 common shares issued	35,972			—			—			35,972
147,876 non-vested common shares issued	—			—			—			—
17,741 non-vested common shares forfeited	—			—			—			—
372,880 stock options exercised, net of 166,780 shares tendered in payment of option price and income tax withholding amounts	4,914			—			—			4,914
Tax benefit of stock-based compensation	1,541			—			—			1,541
Stock-based compensation expense	2,906			—			—			2,906
Common cash dividend declared ($0.48 per share)	—			(21,350		)	—			(21,350		)
Balance at September 30, 2014	$	321,132		$	572,362		$	(7,630	)	$	885,864

See accompanying notes to unaudited consolidated financial statements.

6

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Nine Months Ended September 30,
	2015			2014
Cash flows from operating activities:
Net income	$	63,364		$	61,625
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	3,533			(6,740		)
Net gain on disposal of premises and equipment	(822		)	(68		)
Depreciation and amortization	13,702			12,168
Net premium amortization on investment securities	11,527			10,784
Net gain on investment securities transactions	(75		)	(80		)
Net gain on sale of mortgage loans held for sale	(16,397		)	(12,947		)
Net gain on sale of OREO	(2,862		)	(551		)
Write-downs of OREO and other assets pending disposal	985			87
Net reversal of impairment of mortgage servicing rights	(147		)	(117		)
Deferred income tax expense	12,975			8,537
Net increase in cash surrender value of company-owned life insurance	(9,669		)	(2,540		)
Stock-based compensation expense	3,231			2,906
Tax benefits from stock-based compensation expense	979			1,541
Excess tax benefits from stock-based compensation expense	(884		)	(1,503		)
Originations of mortgage loans held for sale	(856,384		)	(682,011		)
Proceeds from sales of mortgage loans held for sale	865,833			676,061
Changes in operating assets and liabilities:
Increase in interest receivable	(3,962		)	(2,749		)
Increase in other assets	(4,766		)	(1,585		)
Increase (decrease) in accrued interest payable	(639		)	22
Increase (decrease) in accounts payable and accrued expenses	(17,583		)	1,321
Net cash provided by operating activities	61,939			64,161
Cash flows from investing activities:
Purchases of investment securities:
Held-to-maturity	(28,745		)	(10,431		)
Available-for-sale	(253,049		)	(322,838		)
Proceeds from maturities, pay-downs and sales of investment securities:
Held-to-maturity	80,759			29,432
Available-for-sale	450,462			398,383
Purchases of company-owned life insurance	(22,500		)	(15,000		)
Proceeds from sales of mortgage servicing rights	—			266
Extensions of credit to customers, net of repayments	(251,450		)	(148,854		)
Recoveries of loans charged-off	4,439			7,323
Proceeds from sales of OREO	13,586			5,877
Acquisition of bank and bank holding company, net of cash and cash equivalents received	(1,636		)	35,556
Capital expenditures, net of sales	(2,236		)	(6,599		)
Net cash used in investing activities	$	(10,370	)	$	(26,885	)

7

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (In thousands) (Unaudited)
	Nine Months Ended September 30,
	2015			2014
Cash flows from financing activities:
Net increase (decrease) in deposits	$	(33,983	)	$	310,370
Net decrease in securities sold under repurchase agreements	(66,717		)	(25,880		)
Net increase (decrease) in other borrowed funds	1			(11,926		)
Repayments of long-term debt	(1,297		)	(35		)
Advances on long-term debt	5,066			—
Proceeds from issuance of common stock	1,909			4,914
Excess tax benefits from stock-based compensation expense	884			1,503
Purchase and retirement of common stock	(20,548		)	(9,736		)
Dividends paid to common stockholders	(27,259		)	(21,350		)
Net cash provided by (used in) financing activities	(141,944		)	247,860
Net increase (decrease) in cash and cash equivalents	(90,375		)	285,136
Cash and cash equivalents at beginning of period	798,670			534,827
Cash and cash equivalents at end of period	$	708,295		$	819,963
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	27,335		$	21,100
Cash paid during the period for interest expense	13,853			13,049

See accompanying notes to unaudited consolidated financial statements.

8

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(1) Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements of First Interstate BancSystem, Inc. and subsidiaries (the “Company”) contain all adjustments (all of which are of a normal recurring nature) necessary to present fairly the financial position of the Company at September 30, 2015 and December 31, 2014, and the results of operations for each of the three and nine month periods ended and cash flows for each of the nine month periods ended September 30, 2015 and 2014 in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2014 is derived from audited consolidated financial statements. Certain reclassifications, none of which were material, have been made to conform prior year financial statements to the September 30, 2015 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, 2014. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

(2) Acquisitions

Absarokee Bancorporation, Inc. On March 26, 2015, the Company entered into an agreement and plan of merger to acquire all of the outstanding stock of Absarokee Bancorporation, Inc. ("Absarokee"), a Montana-based bank holding company that operated one subsidiary bank, United Bank, with branches located in three Montana communities adjacent to the Company's existing market areas. The acquisition was completed on July 24, 2015 for cash consideration of $7,234. Immediately subsequent to the acquisition, United Bank was merged with and into the Company's existing bank subsidiary, First Interstate Bank ("FIB"). As of the date of the acquisition, Absarokee had total assets of $73,460, loans of $37,520 and deposits of $63,565.

The assets and liabilities of Absarokee were recorded in the Company's consolidated financial statements at their estimated fair values as of the acquisition date. The excess value of the consideration paid over the fair value of assets acquired and liabilities assumed is recorded as goodwill.

The following table summarizes the consideration paid, fair values of the Absarokee assets acquired and liabilities assumed and the resulting goodwill. All amounts reported are provisional pending completion of management review.

	As Recorded			Fair Value				As Recorded
As of July 24, 2015	by Absarokee			Adjustments				by the Company
Assets acquired:
Cash and cash equivalents	$	5,598		$	—			$	5,598
Investment securities	27,574			—				27,574
Loans	37,520			(876		)	(1)	36,644
Allowance for loan losses	(899		)	899			(2)	—
Premises and equipment	2,851			277			(3)	3,128
Core deposit intangible assets	—			695			(4)	695
Other assets	816			82			(5)	898
Total assets acquired	73,460			1,077				74,537
Liabilities assumed:
Deposits	63,565			—				63,565
Repurchase agreements	2,000			—				2,000
Long term debt	1,222			31			(6)	1,253
Other liabilities	79			440			(7)	519
Total liabilities assumed	66,866			471				67,337
Net assets acquired	$	6,594		$	606			7,200
Cash consideration paid								7,234
Goodwill								$	34

9

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Explanation of fair value adjustments:
(1)	Write down of the book value of loans to their estimated fair values. The fair value of loans was estimated using cash flow projections based on the remaining maturity and repricing terms, adjusted for estimated future credit losses and prepayments and discounted to present value using a risk-adjusted market rate for similar loans.
(2)	Adjustment to remove the Absarokee allowance for loan losses at acquisition date as the credit risk is accounted for in the fair value adjustment for loans receivable described in (1) above.
(3)	Write up of the book value of premises and equipment to their estimated fair values based upon fair value estimates developed internally based upon comparable in-market transactions.
(4)	Adjustment represents the value of the core deposit base assumed in the acquisition based upon an internal valuation based on analysis of recent acquisitions.
(5)	Adjustment consists of a reduction in the value of accrued interest receivable, the write-off of pre-existing goodwill and recording the value of mortgage servicing assets acquired.
(6)	Adjustment represents increase in the book value of a Federal Home Loan Bank borrowing to its estimated fair market value based upon interest interest rates of similar advances with similar characteristics on the date of acquisition.
(7)	Adjustment represents the net deferred tax liability resulting from fair value adjustments related to acquired assets, assumed liabilities, core deposit intangible assets and other purchase accounting adjustments.

The core deposit intangible asset of $695 is being amortized using an accelerated method over the estimated useful lives of the related deposits of ten years.

Mountain West Financial Corp. On July 31, 2014, the Company acquired all of the outstanding stock of Mountain West Financial Corp ("MWFC"), a Montana-based bank holding company operating one subsidiary bank, Mountain West Bank, NA ("MWB"). MWB was merged with and into FIB in October 2014. During March 2015, the Company completed its review of MWFC tax items and finalized the fair value of acquired deferred tax assets. Finalization of provisional estimates resulted in a $1,199 decrease in goodwill.

The Company recorded third party acquisition-related costs of $566 and $1,052 during the three months ended September 30, 2015 and 2014, respectively. The Company recorded third party acquisition-related costs of $629 and $1,649 during the nine months ended September 30, 2015 and 2014, respectively. These costs are included in acquisition expenses in the Company's consolidated statements of income.

(3) Investment Securities

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

September 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
U.S. Treasury notes	$	3,913	$	28	$	—		$	3,941
Obligations of U.S. government agencies	604,198		2,196		(350		)	606,044
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	917,025		15,314		(1,284		)	931,055
Private mortgage-backed securities	257		3		(2		)	258
Other investments	3,795		—		—			3,795
Total	$	1,529,188	$	17,541	$	(1,636	)	$	1,545,093

10

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to-Maturity:
State, county and municipal securities	$	176,569	$	5,471	$	(200	)	$	181,840
Corporate securities	50,178		186		(49		)	50,315
U.S agency residential mortgage-backed securities &     collateralized mortgage obligations	295,418		10,346		(3,665		)	302,099
Other investments	378		1		—			379
Total	$	522,543	$	16,004	$	(3,914	)	$	534,633

December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	725,408	$	895	$	(5,370	)	$	720,933
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	982,764		11,526		(3,624		)	990,666
Private mortgage-backed securities	322		5		(2		)	325
Total	$	1,708,494	$	12,426	$	(8,996	)	$	1,711,924

December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to-Maturity:
State, county and municipal securities	$	188,941	$	5,949	$	(386	)	$	194,504
Corporate securities	32,565		54		(75		)	32,544
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	353,176		5,563		(1,758		)	356,981
Other Investments	504		—		—			504
Total	$	575,186	$	11,566	$	(2,219	)	$	584,533

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015		2014
Gross realized gains	$	23	$	—		$	75	$	243
Gross realized losses	—		(8		)	—		(163		)

The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of September 30, 2015 and December 31, 2014.

	Less than 12 Months					12 Months or More					Total
September 30, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	106,516	$	(85	)	$	131,365	$	(265	)	$	237,881	$	(350	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	25,664		(106		)	80,116		(1,178		)	105,780		(1,284		)
Private mortgage-backed securities	—		—			71		(2		)	71		(2		)
Total	$	132,180	$	(191	)	$	211,552	$	(1,445	)	$	343,732	$	(1,636	)

11

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
September 30, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	6,398	$	(26	)	$	10,493	$	(174	)	$	16,891	$	(200	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	14,834		(3,081		)	27,344		(584		)	42,178		(3,665		)
Corporate securities	15,042		(49		)	—		—			15,042		(49		)
Total	$	36,274	$	(3,156	)	$	37,837	$	(758	)	$	74,111	$	(3,914	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	135,888	$	(702	)	$	309,283	$	(4,668	)	$	445,171	$	(5,370	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	219,214		(887		)	151,380		(2,737		)	370,594		(3,624		)
Private mortgage-backed securities	—		—			90		(2		)	90		(2		)
Total	$	355,102	$	(1,589	)	$	460,753	$	(7,407	)	$	815,855	$	(8,996	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	7,979	$	(13	)	$	20,097	$	(373	)	$	28,076	$	(386	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	61,201		(1,758		)	—		—			61,201		(1,758		)
Corporate securities	14,755		(75		)	—		—			14,755		(75		)
Total	$	83,935	$	(1,846	)	$	20,097	$	(373	)	$	104,032	$	(2,219	)

The investment portfolio is evaluated quarterly for other-than-temporary declines in the market value of each individual investment security. The Company had 113 and 154 individual investment securities that were in an unrealized loss position as of September 30, 2015 and December 31, 2014, respectively. Unrealized losses as of September 30, 2015 and December 31, 2014 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 and nine months ended September 30, 2015 and 2014.

12

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Maturities of investment securities at September 30, 2015 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.

	Available-for-Sale				Held-to-Maturity
September 30, 2015	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	344,473	$	348,859	$	92,096	$	94,244
After one year but within five years	1,119,450		1,130,128		266,554		271,638
After five years but within ten years	56,054		56,755		120,530		123,839
After ten years	9,211		9,351		43,363		44,912
Total	$	1,529,188	$	1,545,093	$	522,543	$	534,633

As of September 30, 2015, the Company had investment securities callable within one year with amortized costs and estimated fair values of $82,568 and $82,773, respectively, including callable structured notes with amortized costs and estimated fair values of $10,000 and $10,000, 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.

(4) Loans

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

	September 30, 2015		December 31, 2014
Real estate loans:
Commercial	$	1,750,797	$	1,639,422
Construction:
Land acquisition & development	212,990		220,443
Residential	112,495		96,580
Commercial	93,775		101,246
Total construction loans	419,260		418,269
Residential	1,020,445		999,903
Agricultural	163,116		167,659
Total real estate loans	3,353,618		3,225,253
Consumer:
Indirect consumer	616,142		552,863
Other consumer	150,170		144,141
Credit card	65,649		65,467
Total consumer loans	831,961		762,471
Commercial	778,648		740,073
Agricultural	154,855		124,859
Other, including overdrafts	1,712		3,959
Loans held for investment	5,120,794		4,856,615
Mortgage loans held for sale	55,686		40,828
Total loans	$	5,176,480	$	4,897,443

Loans from business combinations included in the table above include certain loans that had evidence of deterioration in credit quality since origination and for which it was probable, at acquisition, that all contractually required payments would not be collected.

13

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

The following table displays the outstanding unpaid principal balance, accrued interest receivable and accrual status of loans acquired with credit impairment as of September 30, 2015 and 2014:

As of September 30,	2015		2014
Outstanding balance	$	35,265	$	42,627
Carrying value
Loans on accrual status	22,867		32,350
Loans on non-accrual status	—		—
Total carrying value	$	22,867	$	32,350

The following table summarizes changes in the accretable yield for loans acquired credit impaired for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Beginning balance	$	7,482		$	—		$	5,781		$	—
Additions	624			5,233			1,073			5,233
Accretion income	(845		)	(289		)	(2,200		)	(289		)
Reductions due to exit events	(143		)	(16		)	(539		)	(16		)
Reclassifications from nonaccretable differences	347			—			3,350			—
Ending balance	$	7,465		$	4,928		$	7,465		$	4,928

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 September 30, 2015	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	5,968	$	664	$	398	$	7,030	$	1,720,928	$	22,839	$	1,750,797
Construction:
Land acquisition & development	4,495		6,530		44		11,069		192,819		9,102		212,990
Residential	1,011		134		—		1,145		111,021		329		112,495
Commercial	—		—		—		—		92,792		983		93,775
Total construction loans	5,506		6,664		44		12,214		396,632		10,414		419,260
Residential	5,639		2,355		761		8,755		1,009,119		2,571		1,020,445
Agricultural	881		—		—		881		155,443		6,792		163,116
Total real estate loans	17,994		9,683		1,203		28,880		3,282,122		42,616		3,353,618
Consumer:
Indirect consumer	3,991		683		91		4,765		610,641		736		616,142
Other consumer	1,012		264		25		1,301		148,119		750		150,170
Credit card	402		325		518		1,245		64,391		13		65,649
Total consumer loans	5,405		1,272		634		7,311		823,151		1,499		831,961
Commercial	3,440		717		1,083		5,240		751,769		21,639		778,648
Agricultural	281		—		126		407		153,843		605		154,855
Other, including overdrafts	—		—		311		311		1,401		—		1,712
Loans held for investment	27,120		11,672		3,357		42,149		5,012,286		66,359		5,120,794
Mortgage loans originated for sale	—		—		—		—		55,686		—		55,686
Total loans	$	27,120	$	11,672	$	3,357	$	42,149	$	5,067,972	$	66,359	$	5,176,480

14

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, 2014	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	4,692	$	1,609	$	331	$	6,632	$	1,605,421	$	27,369	$	1,639,422
Construction:
Land acquisition & development	839		383		—		1,222		210,969		8,252		220,443
Residential	—		475		—		475		95,833		272		96,580
Commercial	100		—		—		100		98,582		2,564		101,246
Total construction loans	939		858		—		1,797		405,384		11,088		418,269
Residential	6,969		645		1,762		9,376		987,735		2,792		999,903
Agricultural	1,624		236		—		1,860		158,957		6,842		167,659
Total real estate loans	14,224		3,348		2,093		19,665		3,157,497		48,091		3,225,253
Consumer:
Indirect consumer	3,235		482		6		3,723		548,757		383		552,863
Other consumer	988		140		32		1,160		142,432		549		144,141
Credit card	369		284		315		968		64,484		15		65,467
Total consumer loans	4,592		906		353		5,851		755,673		947		762,471
Commercial	3,659		994		147		4,800		722,575		12,698		740,073
Agricultural	1,125		—		—		1,125		123,288		446		124,859
Other, including overdrafts	—		—		—		—		3,959		—		3,959
Loans held for investment	23,600		5,248		2,593		31,441		4,762,992		62,182		4,856,615
Mortgage loans originated for sale	—		—		—		—		40,828		—		40,828
Total loans	$	23,600	$	5,248	$	2,593	$	31,441	$	4,803,820	$	62,182	$	4,897,443

Acquired loans that met the criteria for nonaccrual of interest prior to acquisition were considered performing upon acquisition. If interest on non-accrual loans had been accrued, such income would have been approximately $828 and $992 for the three months ended September 30, 2015 and 2014, respectively, and approximately $2,331 and $3,176 for the nine months ended September 30, 2015 and 2014 respectively.

15

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, except consumer loans, that are risk rated as doubtful, or have been placed on non-accrual status or renegotiated in troubled debt restructurings. The following tables present information on the Company’s recorded investment in impaired loans as of dates indicated:

As of September 30, 2015	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	55,910	$	26,265	$	17,131	$	43,396	$	1,451
Construction:
Land acquisition & development	19,349		9,509		1,212		10,721		254
Residential	1,037		329		—		329		—
Commercial	1,290		369		740		1,109		740
Total construction loans	21,676		10,207		1,952		12,159		994
Residential	3,664		2,186		645		2,831		148
Agricultural	9,043		6,407		2,191		8,598		708
Total real estate loans	90,293		45,065		21,919		66,984		3,301
Commercial	28,653		10,315		13,461		23,776		5,154
Agricultural	2,043		367		1,106		1,473		462
Total	$	120,989	$	55,747	$	36,486	$	92,233	$	8,917

As of December 31, 2014	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	41,603	$	28,143	$	11,246	$	39,389	$	1,608
Construction:
Land acquisition & development	12,511		7,262		1,615		8,877		574
Residential	459		272		—		272		—
Commercial	2,729		253		2,442		2,695		904
Total construction loans	15,699		7,787		4,057		11,844		1,478
Residential	2,959		2,452		341		2,793		143
Agricultural	8,844		6,444		2,305		8,749		732
Total real estate loans	69,105		44,826		17,949		62,775		3,961
Commercial	16,904		11,882		2,644		14,526		1,190
Agricultural	1,231		342		837		1,179		641
Total	$	87,240	$	57,050	$	21,430	$	78,480	$	5,792

16

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	Three Months Ended September 30,
	2015				2014
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	36,075	$	226	$	53,492	$	211
Construction:
Land acquisition & development	9,325		29		11,611		11
Residential	330		—		304		—
Commercial	2,339		4		2,709		2
Total construction loans	11,994		33		14,624		13
Residential	2,607		4		4,773		1
Agricultural	8,578		27		9,031		25
Total real estate loans	59,254		290		81,920		250
Commercial	22,483		2		14,252		14
Agricultural	937		13		906		6
Total	$	82,674	$	305	$	97,078	$	270

	Nine Months Ended September 30,
	2015				2014
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	38,639	$	587	$	57,743	$	668
Construction:
Land acquisition & development	9,591		51		13,529		33
Residential	300		—		799		—
Commercial	1,902		6		1,520		6
Total construction loans	11,793		57		15,848		39
Residential	2,720		6		5,537		4
Agricultural	8,661		62		10,223		54
Total real estate loans	61,813		712		89,351		765
Commercial	18,175		122		14,001		42
Agricultural	848		26		707		18
Total	$	80,836	$	860	$	104,059	$	825

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 $998 and $1,246 for the three months ended September 30, 2015 and 2014, respectively, and approximately $2,932 and $3,927 for the nine months ended September 30, 2015 and 2014 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.

17

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 $42,547 as of September 30, 2015, of which $25,845 were included in non-accrual loans and $16,702 were on accrual status. The Company had loans renegotiated in troubled debt restructurings of $44,227 as of December 31, 2014, of which $23,275 were included in non-accrual loans and $20,952 were on accrual status.

The following table presents information on the Company's troubled debt restructurings that occurred during the three and nine months ended September 30, 2015.

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended September 30, 2015		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Residential Construction	1	$	—	$	—	$	—	$	67	$	67
Indirect consumer	2	—		—		—		31		31
Commercial	8	—		8,744		2,959		463		12,166
Total loans restructured during period	11	$	—	$	8,744	$	2,959	$	561	$	12,264
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other          designated categories.

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Nine Months Ended September 30, 2015		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other
Residential Construction	1	$	—	$	—	$	—	$	67	$	67
Indirect Consumer	2	—		—		—		31		31
Commercial	9	—		8,754		2,959		463		12,176
Total loans restructured during period	12	$	—	$	8,754	$	2,959	$	561	$	12,274
(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 or nine months ended September 30, 2015 or 2014.

18

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
	Number of Notes	Balance		Number of Notes	Balance
Commercial Real Estate	—	$	—	1	$	1,745
Commercial	3	264		3	264
Total	3	$	264	4	$	2,009

At September 30, 2015, 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 loan 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.

Company management undertakes the same process for assigning risk ratings to acquired loans as it does for originated loans. Acquired loans rated as substandard or lower or that were on non-accrual status or designated as troubled debt restructurings at the time of acquisition are deemed to be acquired credit impaired loans accounted for under ASC Topic 310-30, regardless of whether they are classified as performing or non-performing loans.

19

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 September 30, 2015	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	76,483	$	86,047	$	5,095	$	167,625
Construction:
Land acquisition & development	14,928		16,137		630		31,695
Residential	1,230		2,219		27		3,476
Commercial	—		352		757		1,109
Total construction loans	16,158		18,708		1,414		36,280
Residential	6,016		12,117		645		18,778
Agricultural	8,549		16,095		612		25,256
Total real estate loans	107,206		132,967		7,766		247,939
Consumer:
Indirect consumer	774		1,180		164		2,118
Other consumer	687		928		307		1,922
Credit card	—		—		—		—
Total consumer loans	1,461		2,108		471		4,040
Commercial	43,384		21,213		15,638		80,235
Agricultural	3,106		7,558		672		11,336
Total	$	155,157	$	163,846	$	24,547	$	343,550

As of December 31, 2014	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	84,533	$	83,448	$	15,246	$	183,227
Construction:
Land acquisition & development	11,826		15,016		2,507		29,349
Residential	2,029		2,666		—		4,695
Commercial	39		253		2,442		2,734
Total construction loans	13,894		17,935		4,949		36,778
Residential	10,473		10,848		1,121		22,442
Agricultural	10,122		12,328		612		23,062
Total real estate loans	119,022		124,559		21,928		265,509
Consumer:
Indirect consumer	916		1,590		121		2,627
Other consumer	553		1,085		432		2,070
Credit card	—		348		1,263		1,611
Total consumer loans	1,469		3,023		1,816		6,308
Commercial	25,766		32,433		10,273		68,472
Agricultural	7,827		3,660		837		12,324
Total	$	154,084	$	163,675	$	34,854	$	352,613

The Company maintains a credit review function, which is independent of the credit approval process, to assess assigned internal risk classifications and monitor compliance with internal lending policies and procedures.

Written action plans with firm target dates for resolution of identified problems are maintained and reviewed on a quarterly basis for all categories of criticized loans.

20

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(5) Allowance for Loan Losses

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

Three Months Ended September 30, 2015	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	53,935		$	5,828		$	15,797		$	992		$	—	$	76,552
Provision charged to operating expense	(1,149		)	430			2,004			(187		)	—		1,098
Less loans charged-off	(2,219		)	(1,537		)	(791		)	—			—		(4,547		)
Add back recoveries of loans previously    charged-off	389			653			111			—			—		1,153
Ending balance	$	50,956		$	5,374		$	17,121		$	805		$	—	$	74,256
Nine Months Ended September 30, 2015	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	53,884		$	5,035		$	14,307		$	974		$	—	$	74,200
Provision charged to operating expense	(1,718		)	2,201			3,220			(170		)	—		3,533
Less loans charged-off	(3,014		)	(3,675		)	(1,227		)	—			—		(7,916		)
Add back recoveries of loans previously    charged-off	1,804			1,813			821			1			—		4,439
Ending balance	$	50,956		$	5,374		$	17,121		$	805		$	—	$	74,256
As of September 30, 2015	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	3,301		$	—		$	5,154		$	462		$	—	$	8,917
Loans collectively evaluated for impairment	47,655			5,374			11,967			343			—		65,339
Allowance for loan losses	$	50,956		$	5,374		$	17,121		$	805		$	—	$	74,256
Total loans:
Individually evaluated for impairment	$	67,195		$	—		$	23,565		$	1,473		$	—	$	92,233
Collectively evaluated for impairment	3,342,109			831,961			755,083			153,382			1,712		5,084,247
Total loans	$	3,409,304		$	831,961		$	778,648		$	154,855		$	1,712	$	5,176,480

Three Months Ended September 30, 2014	Real Estate			Consumer			Commercial			Agriculture		Other			Total
Allowance for loan losses:
Beginning balance	$	57,312		$	5,347		$	14,986		$	621	$	—		$	78,266
Provision charged to operating expense	(3,839		)	423			3,598			67		12			261
Less loans charged-off	(147		)	(1,437		)	(4,678		)	—		(12		)	(6,274		)
Add back recoveries of loans previously    charged-off	999			495			484			—		—			1,978
Ending balance	$	54,325		$	4,828		$	14,390		$	688	$	—		$	74,231

21

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Nine Months Ended September 30, 2014	Real Estate			Consumer			Commercial			Agriculture			Other			Total
Allowance for loan losses:
Beginning balance	$	63,923		$	6,193		$	14,747		$	476		$	—		$	85,339
Provision charged to operating expense	(9,225		)	191			2,032			250			12			(6,740		)
Less loans charged-off	(2,390		)	(3,217		)	(6,008		)	(64		)	(12		)	(11,691		)
Add back recoveries of loans previously    charged-off	2,017			1,661			3,619			26			—			7,323
Ending balance	$	54,325		$	4,828		$	14,390		$	688		$	—		$	74,231
As of December 31, 2014	Real Estate			Consumer			Commercial			Agriculture			Other			Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	3,961		$	—		$	1,190		$	641		$	—		$	5,792
Loans collectively evaluated for impairment	49,923			5,035			13,117			333			—			68,408
Allowance for loan losses	$	53,884		$	5,035		$	14,307		$	974		$	—		$	74,200
Total loans:
Individually evaluated for impairment	$	62,775		$	—		$	14,526		$	1,179		$	—		$	78,480
Collectively evaluated for impairment	3,203,306			762,471			725,547			123,680			3,959			4,818,963
Total loans	$	3,266,081		$	762,471		$	740,073		$	124,859		$	3,959		$	4,897,443

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.

An allowance for loan losses is established for loans acquired credit impaired and for which the Company projects a decrease in the expected cash flows in periods subsequent to the acquisition of such loans. As of September 30, 2015 and December 31, 2014, the Company's allowance for loan losses included $344 and $287, respectively, related to acquired loans.

22

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(6) Other Real Estate Owned

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Beginning balance	$	11,773		$	16,425		$	13,554		$	15,504
OREO acquired through acquisition	—			3,608			—			3,608
Additions	984			398			5,380			4,797
Valuation adjustments	(73		)	(77		)	(179		)	(87		)
Dispositions	(4,653		)	(1,858		)	(10,724		)	(5,326		)
Ending balance	$	8,031		$	18,496		$	8,031		$	18,496

Foreclosed residential real estate properties of $1,810 were included in other real estate owned as of September 30, 2015. The Company did not have any consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure as of September 30, 2015.

(7) Derivatives and Hedging Activities

For asset and liability management purposes, the Company has entered into interest rate swap contracts to hedge against changes in forecasted cash flows due to interest rate exposures. Interest rate swaps are contracts in which a series of interest payments are exchanged over a prescribed period. The notional amount upon which the interest payments are based is not exchanged. The swap agreements are derivative instruments and convert a portion of the Company’s forecasted variable rate debt to a fixed rate (i.e., cash flow hedge) over the payment term of the interest rate swap. The effective portion of the gain or loss on cash flow hedging instruments is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the same period during which the transaction affects earnings. The ineffective portion of the gain or loss on derivative instruments, if any, is recognized in earnings. The Company does not enter into interest rate swap agreements for trading or speculative purposes.

The Company also enters into certain interest rate swap contracts that are not designated as hedging instruments. These derivative contracts relate to transactions in which the Company enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with a third party financial institution. Because the Company acts as an intermediary for the customer, changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company's results of operations.

The notional amounts and estimated fair values of the Company's interest rate swap contract are presented in the following table. Fair value estimates are obtained from third parties and are based on pricing models.

	September 30, 2015				December 31, 2014
	Notional Amount		Estimated Fair Value		Notional Amount		Estimated Fair Value
Derivatives designated as hedges:
Interest rate swap-liabilities	$	100,000	$	436	$	—	$	—
Non-hedging interest rate derivatives:
Interest rate swap-assets	9,456		918		3,149		61
Interest rate swap-liabilities	9,456		964		3,149		59

23

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

On September 22, 2015, the Company entered into an interest rate swap derivative liability with a notional amount of $100,000 that was designated as a cash flow hedge. Under the terms of the interest rate swap contract, the Company pays a fixed interest rate of 1.94% and the counterparty pays to the Company a variable interest rate equal to the three-month LIBOR. No cash is exchanged until the effective date, which begins on September 15, 2017 and ends on September 15, 2020. The Company designated the interest payments related to Federal Home Loan Bank borrowings as the cash flow hedge. The hedge was fully effective during the current period. As such, no amount of ineffectiveness was included in the Company's income statement for the three or nine months ended September 30, 2015. The fair value of the interest rate swap is included in other liabilities in the Company's balance sheet with changes in fair value recorded in other comprehensive income. The Company expects the hedge to remain highly effective during the remaining term of the interest rate swap.

The following table presents the pre-tax gains or losses related to the interest rate swap derivative contracts recorded in accumulated other comprehensive income and other non-interest income in the Company's statement of income:

	Three months ended				Nine months ended
	September 30, 2015		September 30, 2014		September 30, 2015		September 30, 2014
Derivatives designated as hedges:
Amount of loss recognized in other comprehensive income (effective portion)	$	436	$	—	$	436	$	—
Non-hedging interest rate derivatives:
Amount of loss recognized in other non-interest income	31		—		48		—

(8) Long-Term Debt

On January 29, 2015, the Company borrowed $4,960 on a 2.28% note payable maturing July 29, 2022, with interest payable monthly and principal due at maturity. The note is collateralized by the Company's equity interest in Universal Sub CDE, LLC, a community development entity owned 99.9% by the Company.

(9) Capital Stock

The Company had 21,583,324 shares of Class A common stock and 23,761,683 shares of Class B common stock outstanding as of September 30, 2015. The Company had 21,928,932 shares of Class A common stock and 23,859,483 shares of Class B common stock outstanding as of December 31, 2014.

During the nine months ended September 30, 2015, the Company repurchased and retired 765,875 shares of its Class A common stock in open market transactions at an aggregate purchase price of $19,921. During the nine months ended September 30, 2014, the Company repurchased and retired 325,418 shares of its Class A common stock in a privately negotiated transaction at an aggregate purchase price of $8,143. The repurchases were made pursuant to stock repurchase programs approved by the Company's Board of Directors. Under the terms of the current stock repurchase program, the Company may repurchase up to an additional 1,000,000 shares of its Class A common stock. All other stock repurchases during the three and nine months ended September 30, 2015 and 2014 were redemptions of vested restricted shares tendered in lieu of cash for payment of income tax withholding amounts by participants of the Company's 2006 Equity Compensation Plan.

On April 3, 2015, the Company filed a Registration Statement on Form S-8 to register an additional 2,000,000 shares of Class A common stock to be issued pursuant to the Company's 2015 Equity and Incentive Plan.

24

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(10) Earnings per Common Share

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

The following table sets forth the computation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2015 and 2014.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Net income	$	20,162	$	19,155	$	63,364	$	61,625
Weighted average common shares outstanding for basic earnings per share computation	45,150,104		44,911,858		45,223,988		44,321,326
Dilutive effects of stock-based compensation	428,874		548,430		481,636		562,667
Weighted average common shares outstanding for diluted earnings per common share computation	45,578,978		45,460,288		45,705,624		44,883,993
Basic earnings per common share	$	0.45	$	0.43	$	1.40	$	1.39
Diluted earnings per common share	$	0.44	$	0.42	$	1.39	$	1.37

The Company had 165,489 and 102,529 shares of unvested restricted stock as of September 30, 2015 and 2014, respectively, that were not included in the computation of diluted earnings per common share because performance conditions for vesting had not been met. The Company had 5,884 shares of unvested restricted stock outstanding as of September 30, 2015 that were not included in the computation of diluted earnings per common shares because their effect would be anti-dilutive. The Company had no anti-dilutive equity instruments outstanding as of September 30, 2014.

(11) Regulatory Capital

On July 2, 2013, the Board of Governors of the Federal Reserve Bank 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 . The revised regulatory capital framework ("Basel III ") includes a more stringent definition of capital and introduces a new common equity tier 1, or CET1, capital requirement, sets forth a comprehensive methodology for calculating risk-weighted assets, introduces a conservation buffer and sets out minimum capital ratios and overall capital adequacy standards. As a banking organization subject to the standardized approach, Basel III became effective for us on January 1, 2015. Certain deductions and adjustments to regulatory capital began to phase in starting January 1, 2015 and will be fully implemented on January 1, 2018. The capital conservation buffer phases in beginning January 1, 2016 and will be fully implemented on January 1, 2019.

CET1 capital predominantly includes common shareholders’ equity, less certain deductions for goodwill, intangible assets and deferred tax assets that arise from net operating losses and tax credit carry-forwards. The Company has elected to permanently exclude accumulated other comprehensive income from CET1 capital. Certain deductions and adjustments to CET1 capital, tier 1 capital and tier 2 capital are subject to phase-in through December 31, 2017.

25

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

As of September 30, 2015 and December 31, 2014, the Company exceeded all capital adequacy requirements to which it is subject. Actual capital amounts and ratios for the Company and its bank subsidiary, as of September 30, 2015 and December 31, 2014 are presented in the following tables:

	Actual				Adequately Capitalized				Well Capitalized (1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2015
Total risk-based capital:
Consolidated	$	931,352	15.3	%	$	487,670	8.0	%	$	609,588	10.0	%
FIB	868,800		14.3		486,925		8.0		608,656		10.0
Tier 1 risk-based capital:
Consolidated	843,096		13.8		365,753		6.0		487,670		8.0
FIB	788,544		13.0		365,194		6.0		486,925		8.0
Common equity tier 1 risk-based capital:
Consolidated	763,096		12.5		274,315		4.5		396,232		6.5
FIB	788,544		13.0		273,895		4.5		395,626		6.5
Leverage capital ratio:
Consolidated	843,096		10.1		332,961		4.0		416,202		5.0
FIB	788,544		9.5		332,071		4.0		415,089		5.0

	Actual				Adequately Capitalized				Well Capitalized (1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2014
Total risk-based capital:
Consolidated	$	897,769	16.2	%	$	444,685	8.0	%	$	555,856	10.0	%
FIB	832,907		15.1		442,468		8.0		553,085		10.0
Tier 1 risk-based capital:
Consolidated	807,229		14.5		222,343		4.0		333,514		6.0
FIB	754,708		13.7		221,234		4.0		331,851		6.0
Leverage capital ratio:
Consolidated	807,229		9.6		335,897		4.0		419,871		5.0
FIB	754,708		9.2		330,006		4.0		412,507		5.0

(1) The ratios for the well-capitalized requirement are only applicable to FIB. However, the Company manages its capital position as if the requirement applies to the consolidated entity and has presented the ratios as if they also applied on a consolidated basis.

(12) Commitments and Contingencies

Legal Proceedings. The Company's wholly owned banking subsidiary, FIB, was a defendant in a lender liability lawsuit, Kelly Logging Inc. v. First Interstate Bank ("the case"). The case was settled on August 31, 2015. Legal and settlement costs related to the case of $5,000 and $4,000 during the three and nine months ended September 30, 2015 and 2014, respectively, are included in loss contingency expenses in the accompanying statements of income.

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

26

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Other Commitments. As of September 30, 2015, the Company had commitments under construction agreements of $3,020.

(13) Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. At September 30, 2015, commitments to extend credit to existing and new borrowers approximated $1,591,054, which included $545,636 on unused credit card lines and $374,148 with commitment maturities beyond one year.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. At September 30, 2015, the Company had outstanding standby letters of credit of $59,721. 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.

(14) Supplemental Disclosures to Consolidated Statement of Cash Flows

The Company transferred loans of $5,380 and $4,797 to OREO during the nine months ended September 30, 2015 and 2014, respectively.

The Company transferred internally originated mortgage servicing rights of $2,709 and $2,005 from loans to mortgage servicing assets during the nine months ended September 30, 2015 and 2014, respectively.

The Company transferred loans of $10,619 to loans held for sale during the nine months ended September 30, 2015.

The Company transferred bank buildings and land pending disposal with book values of $1,805 to other assets during the nine months ended September 30, 2015.

During the nine months ended September 30, 2014, the Company issued 1,378,230 shares of its Class A common stock valued at $35,972 as partial consideration for the acquisition of MWFC.

27

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(15) Other Comprehensive Income/Loss

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

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Three Months Ended September 30,	2015			2014			2015			2014			2015			2014
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	10,855		$	(3,773	)	$	4,272		$	(1,581	)	$	6,583		$	(2,192	)
Reclassification adjustment for net gains  included in net income	(23		)	8			(10		)	3			(13		)	5
Change in unamortized loss on available-  for-sale securities transferred into held-to-  maturity	448			451			177			274			271			177
Unrealized loss on derivatives	(436		)	—			(172		)	—			(264		)	—
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	15			33			6			13			9			20
Total other comprehensive income (loss)	$	10,859		$	(3,281	)	$	4,273		$	(1,291	)	$	6,586		$	(1,990	)

	Pre-tax						Tax Expense (Benefit)						Net of Tax
Nine Months Ended September 30,	2015			2014			2015			2014			2015			2014
Investment securities available-for sale:
Change in net unrealized gains/losses during period	$	12,264		$	12,942		$	4,827		$	4,900		$	7,437		$	8,042
Reclassification adjustment for net gains  included in net income	(75		)	(80		)	(30		)	(32		)	(45		)	(48		)
Change in unamortized loss on available-  for-sale securities transferred into held-to-  maturity	1,353			902			532			547			821			355
Unrealized loss on derivatives	(436		)	—			(172		)	—			(264		)	—
Defined benefits post-retirement benefit plan:
Change in net actuarial loss	43			103			17			41			26			62
Total other comprehensive income	$	13,149		$	13,867		$	5,174		$	5,456		$	7,975		$	8,411

The components of accumulated other comprehensive loss, net of income tax benefits, are as follows:

	September 30, 2015			December 31, 2014
Net unrealized loss on investment securities available-for-sale	$	6,264		$	(2,121	)
Net unrealized loss on derivatives	(436		)	—
Net actuarial loss on defined benefit post-retirement benefit plans	(387		)	(413		)
Net accumulated other comprehensive income (loss)	$	5,441		$	(2,534	)

28

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(16) 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 September 30, 2015	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:
U.S. Treasury Notes	$	3,941	$	—	$	3,941	$	—
Obligations of U.S. government agencies	606,044			—	606,044			—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	931,055			—	931,055			—
Private mortgage-backed securities	258			—	258			—
Other investments	3,795			—	3,795			—
Derivative assets:
Interest rate swaps	918			—	918			—
Derivative liabilities:
Interest rate swaps	1,400			—	1,400			—

			Fair Value Measurements at Reporting Date Using
As of December 31, 2014	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	$	720,933	$	—	$	720,933	$	—
U.S. agencies mortgage-backed securities & collateralized mortgage obligations	990,666			—	990,666			—
Private mortgage-backed securities	325			—	325			—
Derivative assets:
Interest rate swaps	61			—	61			—
Derivative liabilities:
Interest rate swaps	59			—	59			—

There were no changes in valuation methodologies or transfers between levels of the fair value hierarchy during the nine months ended September 30, 2015 or 2014.

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 and derivative financial instruments from independent pricing services. 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 investment securities pricing 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.

29

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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.

Derivative Liabilities. Fair values for interest rate swap derivative liabilities are based upon the estimated amounts to settle the contracts considering current interest rates and are calculated using discounted cash flows that are observable or that can be corroborated by observable market data. The inputs used to determine fair value include the 3 month LIBOR forward curve to estimate variable rate cash inflows and the Fed Funds Effective Swap Rate to estimate the discount rate. The estimated variable rate cash inflows are compared to the fixed rate outflows and such difference is discounted to a present value to estimate the fair value of the interest rate swaps.

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 September 30, 2015	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	44,940	$	—	$	—	$	44,940
Other real estate owned	4,067			—		—	4,067
Long-lived assets to be disposed of by sale	2,083			—		—	2,083
				Fair Value Measurements at Reporting Date Using
As of December 31, 2014	Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Impaired loans	$	30,494	$	—	$	—	$	30,494
Other real estate owned	4,554			—		—	4,554
Long-lived assets to be disposed of by sale	1,083			—		—	1,083

Impaired Loans. Collateralized impaired loans are reported at the fair value of the underlying collateral if repayment is expected solely from collateral. The impaired loans are reported at fair value through specific valuation allowance allocations. In addition, when it is determined that the fair value of an impaired loan is less than the recorded investment in the loan, the carrying value of the loan is adjusted to fair value through a charge to the allowance for loan losses. Collateral values are estimated using independent appraisals and management estimates of current market conditions. As of September 30, 2015, certain impaired loans with a carrying value of $47,502 were reduced by specific valuation allowance allocations of $8,573 and partial loan charge-offs of $11,134 resulting in a reported fair value of $27,795. As of December 31, 2014, certain impaired loans with a carrying value of $45,046 were reduced by specific valuation allowance allocations of $5,792 and partial loan charge-offs of $8,760 resulting in a reported fair value of $30,494.

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 $179 during the nine months ended September 30, 2015 included $106 directly related to receipt of updated appraisals and 73 based on management estimates of the current fair value of properties. Write downs of $87 during the nine months ended September 30, 2014 were based on management's estimate of the current fair value of the properties.

30

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Long-lived Assets to be Disposed of by Sale. Long-lived assets to be disposed of by sale are carried at the lower of carrying value or fair value less estimated costs to sell. The fair values of long-lived assets to be disposed of by sale are based upon observable market data and management estimates of current market conditions. As of September 30, 2015, the Company had long-lived assets to be disposed of by sale with carrying values aggregating $3,590 that were reduced by write-downs of $1,507 resulting in an aggregate fair value of $2,083. As of December 31, 2014, the Company had long-lived assets to be disposed of by sale with carrying values aggregating $1,785 that were reduced by write-downs of $702 resulting in an aggregate fair value of $1,083.

In addition, mortgage loans held for sale are required to be measured at the lower of cost or fair value. The fair value of mortgage loans held for sale is based upon binding contracts or quotes or bids from third party investors. As of September 30, 2015 and December 31, 2014, all mortgage loans held for sale were recorded at cost.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis and for which the Company has utilized Level 3 inputs to determine fair values:

As of September 30, 2015	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans	$	44,940	Appraisal	Appraisal adjustment	0%	-	51%	(19%)
Other real estate owned	4,067		Appraisal	Appraisal adjustment	0%	-	50%	(15%)
Long-lived assets to be disposed of by sale	2,083		Appraisal	Appraisal adjustment	0%	-	9%	(5%)
As of December 31, 2014	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans	$	30,494	Appraisal	Appraisal adjustment	0%	-	51%	(19%)
Other real estate owned	4,554		Appraisal	Appraisal adjustment	0%	-	50%	(15%)
Long-lived assets to be disposed of by sale	1,083		Appraisal	Appraisal adjustment	0%	-	9%	(5%)

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 fair values of derivative liabilities are obtained from an independent pricing service, which considers observable data that may include the three-month LIBOR forward curve, the federal funds effective swap rate and cash flows, among other things. 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.

31

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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 September 30, 2015	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	$	708,295	$	708,295	$	708,295	$	—	$	—
Investment securities available-for-sale	1,545,093		1,545,093		—		1,545,093		—
Investment securities held-to-maturity	522,543		534,633		—		534,633		—
Accrued interest receivable	31,590		31,590		—		31,590		—
Mortgage servicing rights, net	15,336		31,544		—		31,544		—
Net loans	5,102,244		5,055,788		—		5,010,848		44,940
Total financial assets	$	7,925,101	$	7,906,943	$	708,295	$	7,153,708	$	44,940
Financial liabilities:
Total deposits, excluding time deposits	$	5,885,462	$	5,885,462	$	5,885,462	$	—	$	—
Time deposits	1,150,332		1,154,128		—		1,154,128		—
Securities sold under repurchase agreements	437,533		437,533		—		437,533		—
Other borrowed funds	10		10		—		10		—
Derivative liabilities	436		436		—		436		—
Accrued interest payable	5,327		5,327		—		5,327		—
Long-term debt	43,089		41,818		—		41,818		—
Subordinated debentures held by subsidiary    trusts	82,477		74,723		—		74,723		—
Total financial liabilities	$	7,604,666	$	7,599,437	$	5,885,462	$	1,713,975	$	—

32

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, 2014	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	$	798,670	$	798,670	$	798,670	$	—	$	—
Investment securities available-for-sale	1,711,924		1,711,924		—		1,711,924		—
Investment securities held-to-maturity	575,186		584,533		—		584,533		—
Accrued interest receivable	27,063		27,063		—		27,063		—
Mortgage servicing rights, net	14,038		21,434		—		21,434		—
Net loans	4,823,243		4,800,725		—		4,770,231		30,494
Total financial assets	$	7,950,124	$	7,944,349	$	798,670	$	7,115,185	$	30,494
Financial liabilities:
Total deposits, excluding time deposits	$	5,767,992	$	5,767,992	$	5,767,992	$	—	$	—
Time deposits	1,238,220		1,244,324		—		1,244,324		—
Securities sold under repurchase agreements	502,250		502,250		—		502,250		—
Other borrowed funds	9		9		—		9		—
Accrued interest payable	5,833		5,833		—		5,833		—
Long-term debt	38,067		37,781		—		37,781		—
Subordinated debentures held by subsidiary    trusts	82,477		75,734		—		75,734		—
Total financial liabilities	$	7,634,848	$	7,633,923	$	5,767,992	$	1,865,931	$	—

(17) Recent Authoritative Accounting Guidance

ASU 2014-04 “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The amendments inASU 2014-04 clarify that an in-substance repossession or foreclosures occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments in ASU 2014-04 also require interim and annual disclosure of both (i) the amount of foreclosed residential real estate property held by the creditor and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. The Company adopted the amendments in ASU 2014-04 effective January 1, 2015 using a prospective transition method. Adoption of the amendments in ASU 2014-04 did not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-09 "Revenue from Contracts with Customers." The amendments in ASU 2014-09 introduce a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU 2015-14 was released in August of 2015 and the amendments defer the effective date of 2014-09 for all entities by one year. Public companies, certain not-for-profit and certain employee benefit plans should apply the guidance to annual reporting period beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016. The Company is continuing to evaluate the new guidance to determine the impact it will have on its consolidated financial statements, results of operations or liquidity.

33

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

ASU 2014-11 "Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." The amendments in ASU 2014-11 expand secured borrowing treatment for certain repurchase agreements. Under the amendments in ASU 2014-11, repurchase-to-maturity transactions and repurchase agreements executed as repurchase financing transactions are required to be accounted for as secured borrowings. ASU 2014-11 requires additional disclosures about certain transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the same counterparty. ASU 2014-11 also requires disclosure of the types of collateral pledged and liabilities associated with an entity's repurchase agreements, securities lending transactions and repurchase-to-maturity transactions accounted for as secured borrowings. The Company adopted the amendments in ASU 2014-11 are effective January 1, 2015. The adoption did not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-12 "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period." ASU 2014-12 amends Accounting Standards Codification ("ASC") Topic 718, Compensation-Stock Compensation, to clarify that a performance target that affects the vesting of a share-based payment award and that could be achieved after the requisite service period should be treated as a performance condition that affects the vesting of the award. ASU 2014-12 further clarifies that the requisite service period ends when the employees can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The amendments in ASU 2014-12 may be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The amendments in ASU 2014-12 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-14 "Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure." ASU 2014-14 updates ASC Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, to require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if (i) the loan has a government guarantee that is not separable from the loan before foreclosure; (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and, (iii) any amount of the claim that is determined on the basis of the fair value of the real estate is fixed at the time of foreclosure. ASU 2014-14 provides that, upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The Company adopted the amendments in ASU 2014-14 effective January 1, 2015, using a prospective transition method. Adoption of the amendments in ASU 2014-12 did not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-16 "Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity." The amendments in ASU 2014-16 clarify that an entity should consider all relevant terms and features-including the embedded derivative feature being evaluated for bifurcation-in evaluating the nature of the host contract within a hybrid financial instrument. The amendments further clarify that no single term or feature would necessarily determine the economic characteristics and risk of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risk of the entire hybrid financial instrument. The amendments in ASU 2014-16 are effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The effects of initially adopting the amendments in ASU 2014-16 should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. The amendments in ASU 2014-16 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-02 "Amendments to the Consolidation Analysis." The amendments in ASU 2015-02 (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and (iv) provide scope exceptions from consolidation guidance for

34

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

reporting entities with interest in legal entities that are required to comply or operate in accordance with requirements of the Investment Company Act of 1940 for registered market funds. The amendments in ASU 2015-02 are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The amendments in ASU 2015-02, which may be adopted using a retrospective or modified retrospective approach, will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs." The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, rather than as a deferred charge. The guidance in Update 2015-03 did not address presentation or subsequent measurement of debt issues costs related to line-of-credit arrangements. ASU 2015-15 addresses this gap. ASU 2015-15 adds that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The amendments in ASU 2015-03 are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2015, and should be applied on a retrospective basis. The amendments in ASU 2015-03 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-05 "Intangibles-Goodwill and Other Internal-Use Software." The amendments in ASU 2015-05 (i) provide guidance about whether a cloud computing arrangement includes a software license. Under the guidance in ASU 2015-05, if a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance in ASU 2015-05 does not change generally accepted accounting principles for a customer's accounting for service contracts. The amendments in ASU 2015-05 are effective for public entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, with early adoption permitted. The amendments in ASU 2015-05, which may be adopted retrospectively or prospectively to all arrangements entered into or materially modified after the effective date. Adoption of the amendments in ASU 2015-05 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-10 "Technical Corrections and Improvements." The amendments in ASU 2015-10 represent changes to clarify the codification, correct unintended application of guidance, or make minor improvements to the codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments in ASU 2015-10 that require transition guidance are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. All other amendments in ASU 2015-10 became effective in June 2015. The amendments in ASU 2015-03 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-16 “Business Combinations-Simplifying the Accounting for Measurement-Period Adjustments.” The amendments in ASU 2015-16 eliminate the requirement to retrospectively account for adjustments made to provisional amounts recognized as part of a business combination. Under the amendments in ASU 2015-16, an acquirer must recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in ASU 2015-16 require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for the Company for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in ASU 2015-16, which are applied prospectively to adjustments to provisional amounts that occur after the effective date, will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

35

FIRST INTERSTATE BANCSYSTEM, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

(18) 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 October 6, 2015, the Company declared a quarterly dividend to common shareholders of $0.20 per share, to be paid on November 13, 2015 to shareholders of record as of November 2, 2015.

No other events requiring recognition or disclosure were identified.

36

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, 2014, 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

“Forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, that involve inherent risks and uncertainties. Any statements about our plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are identified as those that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may” or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other important factors that could cause actual results to differ materially from any results, performance or events expressed or implied by such forward-looking statements. The following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this report: continuing or worsening business and economic conditions, adverse economic conditions affecting Montana, Wyoming and western South Dakota, credit losses, lending risk, adequacy of the allowance for loan losses, impairment of goodwill, failure to manage growth, access to low-cost funding sources, changes in interest rates, dependence on the Company’s management team, ability to attract and retain qualified employees, governmental regulation and changes in regulatory, tax and accounting rules and interpretations, failure of technology, cyber-security, unfavorable resolution of pending litigation, inability to meet liquidity requirements, environmental remediation and other costs, ineffective internal operational controls, competition, reliance on external vendors, litigation pertaining to fiduciary responsibilities, failure to effectively implement technology-driven products and services, soundness of other financial institutions, inability of our bank subsidiary to pay dividends, implementation of new lines of business or new product or service offerings, change in dividend policy, volatility of Class A common stock, 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, voting control of Class B stockholders, 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, 2014, filed February 27, 2015. 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, 2014.

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.

Executive Overview

We are a financial holding company headquartered in Billings, Montana. As of September 30, 2015, we had consolidated assets of $8,605 million, deposits of $7,036 million, loans of $5,176 million and total stockholders’ equity of $939 million. We currently operate 81 banking offices, including detached drive-up facilities, in 45 communities located in Montana, Wyoming and South Dakota. Through our bank subsidiary, First Interstate Bank, or FIB, 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.

37

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 Developments

On March 26, 2015, the Company entered into an agreement and plan of merger to acquire all of the outstanding stock of Absarokee Bancorporation, Inc., or Absarokee, a Montana-based bank holding company that operated one wholly-owned subsidiary bank, United Bank, with branches located in three Montana communities adjacent to the Company's existing market areas. The acquisition was completed on July 24, 2015. Pursuant to the terms of the Agreement and Plan of Merger to acquire Absarokee, the Company paid cash consideration of $7.2 million. As of the acquisition date, Absarokee had total assets of $73 million, loans of $38 million and deposits of $64 million. Immediately subsequent to the acquisition, the Company merged United Bank with and into its existing banking subsidiary, FIB. For additional information regarding the acquisition, see “Note 2 – Acquisitions” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

On July 2, 2013, the Board of Governors of the Federal Reserve Bank issued a final rule implementing a revised regulatory capital framework for U.S. banks in accordance with the Basel III international accord. As a banking organization subject to the standardized approach, the revised regulatory capital framework, or Basel III, became effective for us on January 1, 2015. Basel III includes a more stringent definition of capital and introduces a new common equity tier 1, or CET1, capital requirement, sets forth a comprehensive methodology for calculating risk-weighted assets, introduces a conservation buffer and sets out minimum capital ratios and overall capital adequacy standards. Certain deductions and adjustments to regulatory capital phase in starting January 1, 2015 and will be fully implemented on January 1, 2018. The capital conservation buffer phases in beginning January 1, 2016 and will be fully implemented on January 1, 2019. As of September 30, 2015 and December 31, 2014, we had capital levels that, in all cases, exceeded the well-capitalized guidelines. For additional information regarding our capital levels, see "Capital Resources and Liquidity Management" included herein and “Note 11 – Regulatory Capital” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

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 equity, 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.

38

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.

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

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

Finally, we seek to maintain adequate capital levels to absorb unforeseen operating losses and to help support the growth of our balance sheet. We evaluate our capital adequacy using the regulatory and financial capital ratios including leverage capital ratio, tier 1 risk-based capital ratio, total risk-based capital ratio, common equity tier 1 risk-based capital ratio and tangible common equity to tangible 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 Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.

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.

39

Allowance for Loan Losses

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

We perform a quarterly assessment of the risks inherent in our loan portfolio, as well as a detailed review of each significant loan with identified weaknesses. Based on this analysis, we record a provision for loan losses in order to maintain the allowance for loan losses at appropriate levels. In determining the allowance for loan losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined. Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment and the use of subjective measurements, including management’s assessment of the internal risk classifications of loans, historical loan loss rates, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends and the impact of current local, regional and national economic factors on the quality of the loan portfolio. Changes in these estimates and assumptions are possible and may have a material impact on our allowance, and therefore our consolidated financial statements or results of operations. The allowance for loan losses is maintained at an amount we believe is sufficient to provide for estimated losses inherent in our loan portfolio at each balance sheet date, and fluctuations in the provision for loan losses result from management’s assessment of the adequacy of the allowance for loan losses. Management monitors qualitative and quantitative trends in the loan portfolio, including changes in the levels of past due, internally classified and non-performing loans. Note 1 of the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014 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, 2014 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 the carrying value of the Company. We will continue to monitor our performance and evaluate our goodwill for impairment annually or more frequently as needed.

Fair Values of Loans Acquired in Business Combinations

Loans acquired in business combinations are initially recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. Going forward, the Company continues to evaluate reasonableness of expectations for the timing and the amount of cash to be collected. Subsequent decreases in expected cash flows may result in changes in the amortization or accretion of fair market value adjustments, and in some cases may result in the loan being considered impaired.  For collateral dependent loans with deteriorated credit quality, the Company estimates the fair value of the underlying collateral of the loans. These values are discounted using market derived rates of return, with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. Note 1 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014 describes our accounting policy with regard to acquired loans.

40

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. Our net interest income on a fully taxable equivalent, or FTE, basis increased $1.3 million, or 1.9%, to $67.4 million during the three months ended September 30, 2015, as compared to $66.1 million for the same period in 2014, and $13.0 million, or 7.0%, to $199.2 million during the nine months ended September 30, 2015, as compared to $186.2 million for the same period in 2014. These increases were primarily attributable to growth in average interest earning assets as a result of the July 2014 acquisition of Mountain West Financial Corp, or Mountain West, in which we acquired cash and cash equivalents totaling $74 million, loans totaling $360 million and investment securities totaling $105 million. In addition,we experienced organic growth in total loans of approximately 6.6% from September 30, 2014 through September 30, 2015, which also positively impacted our quarter-to-date and year-to-date net FTE interest income.

Also positively impacting our net interest income during the three and nine months ended September 30, 2015, as compared to the same periods in the prior year, was interest accretion related to the fair valuation of acquired loans. Interest accretion related to the fair valuation of acquired loans was $1.4 million during the three months ended September 30, 2015, of which $307 thousand was the result of early loan payoffs, and $4.1 million during the nine months ended September 30, 2015, of which $1.1 million was the result of early loan payoffs. This compares to $1.4 million during the three and nine months ended September 30, 2014, of which $747 thousand was the result of early loan payoffs.

Despite increases in our net interest income, our net FTE interest margin ratio decreased 8 basis points to 3.47% for the three months ended September 30, 2015, as compared to 3.55% for the same period in 2014, and 9 basis points to 3.45% for the nine months ended September 30, 2015, as compared to 3.54% during the same period in 2014. Decreases in net FTE interest margin ratio during the three and nine months ended September 30, 2015, as compared to the same periods in 2014, were primarily due to lower yields earned on loans and investment securities, which were partially offset by increases in the average outstanding interest earning assets and reductions in funding costs. Exclusive of the fair value accretion resulting from the early payoff of acquired loans and recoveries of previously charged-off interest, our net interest margin ratio was 3.42% during the three months ended September 30, 2015, as compared to 3.47% for the same period in 2014, and 3.40% during the nine months ended September 30, 2015, as compared to 3.47% during the same period in 2014.

41

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

Average Balance Sheets, Yields and Rates
(Dollars in thousands)	Three Months Ended September 30,
	2015							2014
	Average Balance		Interest			Average Rate		Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1) (2)	$	5,141,484	$	62,577		4.83	%	$	4,751,928	$	61,445		5.13	%
Investment securities (2)	2,097,835		8,927			1.69		2,094,449		8,953			1.70
Interest bearing deposits in banks	471,682		342			0.29		548,794		374			0.27
Federal funds sold	2,876		4			0.55		1,909		3			0.62
Total interest earnings assets	7,713,877		71,850			3.70		7,397,080		70,775			3.80
Non-earning assets	781,559							753,324
Total assets	$	8,495,436						$	8,150,404
Interest bearing liabilities:
Demand deposits	$	2,086,112	$	528		0.10	%	$	2,100,931	$	532		0.10	%
Savings deposits	1,924,612		645			0.13		1,751,595		616			0.14
Time deposits	1,150,223		2,068			0.71		1,217,023		2,339			0.76
Repurchase agreements	433,007		55			0.05		439,739		52			0.05
Other borrowed funds	6		—			—		1,781		27			6.01
Long-term debt	43,200		544			5.00		36,886		482			5.18
Subordinated debentures held by subsidiary trusts	82,477		610			2.93		89,142		598			2.66
Total interest bearing liabilities	5,719,637		4,450			0.31		5,637,097		4,646			0.33
Non-interest bearing deposits	1,787,419							1,570,121
Other non-interest bearing liabilities	58,623							54,722
Stockholders’ equity	929,757							888,464
Total liabilities and stockholders’ equity	$	8,495,436						$	8,150,404
Net FTE interest income			67,400							66,129
Less FTE adjustments (2)			(1,070		)					(1,047		)
Net interest income from consolidated statements of income			$	66,330						$	65,082
Interest rate spread						3.39	%						3.47	%
Net FTE interest margin (3)						3.47	%						3.55	%
Cost of funds, including non-interest bearing demand deposits (4)						0.24	%						0.26	%

(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 an 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.

42

Average Balance Sheets, Yields and Rates
(Dollars in thousands)	Nine Months Ended September 30,
	2015							2014
	Average Balance		Interest			Average Rate		Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1) (2)	$	5,010,251	$	183,305		4.89	%	$	4,512,726	$	171,656		5.09	%
Investment securities (2)	2,236,581		28,209			1.69		2,098,125		27,341			1.74
Interest bearing deposits in banks	462,262		1,002			0.29		425,489		830			0.26
Federal funds sold	2,412		11			0.61		1,658		7			0.56
Total interest earnings assets	7,711,506		212,527			3.68		7,037,998		199,834			3.80
Non-earning assets	759,169							695,924
Total assets	$	8,470,675						$	7,733,922
Interest bearing liabilities:
Demand deposits	$	2,087,241	$	1,558		0.10	%	$	1,940,007	$	1,556		0.11	%
Savings deposits	1,894,132		1,897			0.13		1,681,782		1,810			0.14
Time deposits	1,181,931		6,334			0.72		1,179,735		6,872			0.78
Repurchase agreements	453,610		162			0.05		444,952		181			0.05
Other borrowed funds	5		—			—		475		27			7.60
Long-term debt	41,469		1,596			5.15		36,897		1,431			5.19
Subordinated debentures held by subsidiary trusts	82,477		1,800			2.92		84,723		1,778			2.81
Total interest bearing liabilities	5,740,865		13,347			0.31		5,368,571		13,655			0.34
Non-interest bearing deposits	1,750,152							1,473,003
Other non-interest bearing liabilities	60,149							49,879
Stockholders’ equity	919,509							842,469
Total liabilities and stockholders’ equity	$	8,470,675						$	7,733,922
Net FTE interest income			199,180							186,179
Less FTE adjustments (2)			(3,237		)					(3,234		)
Net interest income from consolidated statements of income			$	195,943						$	182,945
Interest rate spread						3.37	%						3.46	%
Net FTE interest margin (3)						3.45	%						3.54	%
Cost of funds, including non-interest bearing demand deposits (4)						0.24	%						0.27	%

(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 an 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.

43

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

Analysis of Interest Changes Due to Volume and Rates
(Dollars in thousands)	Three Months Ended September 30, 2015 compared with Three Months Ended September 30, 2014									Nine Months Ended September 30, 2015 compared with Nine Months Ended September 30, 2014
	Volume			Rate			Net			Volume			Rate			Net
Interest earning assets:
Loans (1)	$	4,982		$	(3,850	)	$	1,132		$	12,547		$	(898	)	$	11,649
Investment securities (1)	14			(40		)	(26		)	1,196			(328		)	868
Interest bearing deposits in banks	(52		)	20			(32		)	48			124			172
Federal funds sold	2			(1		)	1			2			2			4
Total change	4,946			(3,871		)	1,075			13,793			(1,100		)	12,693
Interest bearing liabilities:
Demand deposits	(4		)	—			(4		)	78			(76		)	2
Savings deposits	60			(31		)	29			152			(65		)	87
Time deposits	(127		)	(144		)	(271		)	8			(546		)	(538		)
Repurchase agreements	(1		)	4			3			2			(21		)	(19		)
Other borrowed funds	(27		)	—			(27		)	(18		)	(9		)	(27		)
Long-term debt	82			(20		)	62			118			47			165
Subordinated debentures held by subsidiary trusts	(44		)	56			12			(31		)	53			22
Total change	(61		)	(135		)	(196		)	309			(617		)	(308		)
Increase (decrease) in FTE net interest income	$	5,007		$	(3,736	)	$	1,271		$	13,484		$	(483	)	$	13,001

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

Provision for Loan Losses. During the three months ended September 30, 2015, we recorded a provision for loan losses of $1.1 million, as compared to $261 thousand during the same period in 2014. For the nine months ended September 30, 2015, we recorded a provision for loan losses of $3.5 million, as compared to the reversal of provision for loan losses of $6.7 million during the same period in 2014. The increase in provision is reflective of loan growth, increases in specific reserves on impaired loans and lower 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; wealth management revenues; and, service charges on deposit accounts. Non-interest income increased $1.1 million, or 3.8%, to $30.5 million for the three months ended September 30, 2015, as compared to $29.4 million for the same period in 2014, and $10.0 million, or 12.5%, to $90.0 million for the nine months ended September 30, 2015, as compared to $80.0 million during the same period in 2014. Significant components of these increases are discussed below.

Other service charges, commissions and fees primarily include debit and credit card interchange income, mortgage loan servicing fee income, insurance and other commissions and ATM service charge revenues. Other service charges, commissions and fees increased $637 thousand, or 6.1%, to $11.1 million during the three months ended September 30, 2015, as compared to $10.5 million for the same period in 2014, and $2.8 million, or 9.6%, to $32.1 million for the nine months ended September 30, 2015, as compared to $29.3 million during the same period in 2014. These increases were primarily due to additional interchange revenue resulting from higher debit and credit card transaction volumes.

Income from the origination and sale of loans increased $637 thousand, or 8.7%, to $8.0 million during the three months ended September 30, 2015, as compared to $7.3 million during the same period in 2014, and $4.3 million, or 23.4%, to $22.7 million during the nine months ended September 30, 2015, as compared to $18.4 million during the same period in 2014. During second quarter 2015, we sold $10.6 million of seasoned portfolio loans at an aggregate gain of $410 thousand. The remaining quarter-to-date and year-to-date increases in income from the origination and sale of loans, as compared to the same periods in 2014, were primarily the result of increased demand in our market areas for both refinancing loans and loans for home purchases.

44

Our total mortgage loans production increased approximately 30% during the nine months ended September 30, 2015, as compared to the same period in 2014, with loans originated for home purchases accounting for approximately 66% of our mortgage loan production, as compared to approximately 76% during the same period in 2014.

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 $76 thousand, or 1.5%, to $5.2 million during the three months ended September 30, 2015, as compared to $5.2 million during the same period in 2014. Exclusive of one-time close-out fees of $407 thousand related to the settlement of three estates recognized during third quarter 2014, wealth management revenues increased $483 thousand, or 10.2%, to $5.2 million during the three months ended September 30, 2015, as compared to $4.8 million for the same period in the prior year, primarily due to the addition of new customers. Wealth management revenues increased $846 thousand, or 5.9%, to $15.1 million during the nine months ended September 30, 2015, as compared to $14.2 million during the same period in 2014, due to the combined impact of the addition of new wealth management customers and increases in the market values of assets under trust management.

Other income decreased $310 thousand, or 14.9%, to $1.8 million during the three months ended September 30, 2015, as compared to $2.1 million during the same period in 2014, primarily due to lower earnings on assets held under deferred compensation plans.

Other income increased $1.8 million, or 30.2%, to $7.7 million during the nine months ended September 30, 2015, as compared to $5.9 million during the same period in 2014. During second quarter 2015, we recorded a gain of $863 thousand on the sale of land, and during first quarter 2015, we reached a settlement on and reversed a $1.0 million accrual related to secondary investor claims assumed as part of the July 2014 acquisition of Mountain West.

Non-interest Expense. Non-interest expense increased $544 thousand, or 0.8%, to $65.5 million for the three months ended September 30, 2015, as compared to $65.0 million for the same period in 2014, and $11.9 million, or 6.8%, to $187.1 million during the nine months ended September 30, 2015, as compared to $175.2 million in the same period in 2014. Significant components of these increases are discussed below.

Salaries and wages expense decreased $454 thousand, or 1.8%, to $25.5 million during the three months ended September 30, 2015, as compared to $25.9 million during the same period in 2014, primarily due to a $1.3 million decrease in incentive compensation accruals, which were partially offset by higher salaries and wages expense.

Salaries and wages expense increased $4.1 million, or 5.6%, to $76.9 million during the nine months ended September 30, 2015, as compared to $72.8 million during the same period in 2014. Year-to-date increases in salaries and wages expense, as compared to the prior year, were primarily the result of increased personnel costs associated with the Mountain West acquisition in July 2014, inflationary wage increases and higher commissioned pay reflective of increased mortgage loan origination during the first nine months of 2015.

Employee benefits expense decreased $529 thousand, or 6.7%, to $7.3 million for the three months ended September 30, 2015, as compared to $7.8 million during the same period in 2014, due to lower earnings on assets held under deferred compensation plans. Employee benefits expense decreased $156 thousand, or 0.7%, to $23.2 million during the nine months ended September 30, 2015, as compared to $23.3 million during the same period in 2014. Decreases due to lower earnings on assets held under deferred compensation plans during the nine months ended September 30, 2015, as compared to the same period in 2014, were largely offset by increased benefits costs associated with the Mountain West acquisition.

Furniture and equipment expense increased $511 thousand, or 15.3%, to $3.8 million for the three months ended September 30, 2015, as compared to $3.3 million during the same period in 2014, and $1.6 million, or 17.0%, to $11.3 million during the nine months ended September 30, 2015, as compared to $9.7 million during the same period in the prior year. These increases were primarily due to additional software costs associated with the implementation of new systems placed into service during the last half of 2014 to assist in accounting for acquired loans, process mortgage loans and automate certain reconciliation functions.

Net OREO income increased to $720 thousand during the three months ended September 30, 2015, as compared to $58 thousand during the same period in 2014. For the nine months ended September 30, 2015, net OREO income increase $1.4 million to $1.6 million, as compared to $211 thousand in the same period in 2014. Quarter-to-date and year-to-date increases were primarily due to increases in net gains recognized on the sale of OREO properties. During the three and nine months ended September 30, 2015, we recorded net gains on the sale of OREO properties of $1.1 million and $2.9 million, respectively, as compared to net gains on the sale of OREO properties of $551 thousand and $1.3 million recorded during the same respective periods in 2014.

45

Professional fees increased $683 thousand, or 55.4%, to $1.9 million during the three months ended September 30, 2015, as compared to $1.2 million during the same period in 2014, and $850 thousand, or 21.9%, to $4.7 million during the nine month ended September 30, 2015, as compared to $3.9 million during the same period in 2014. Quarter-over-quarter and year-over-year increases primarily relate to professional fees incurred in conjunction with identifying and executing strategies for revenue enhancement and changing trust data platforms.

Core deposit intangible amortization expense increased $154 thousand, or 22.4%, to $842 thousand during the three months ended September 30, 2015, as compared to $688 thousand during the same period in 2014, and $1.1 million, or 82.7%, to $2.6 million during the nine months ended September 30, 2015, as compared to $1.4 million during the same period in 2014. Increases in core deposit amortization expense were due to the amortization of core deposit intangible assets recorded in conjunction with the acquisitions of Absarokee in July 2015 and Mountain West in July 2014.

Other expense increased $245 thousand, or 2.0%, to $12.6 million during the three months ended September 30, 2015, as compared to $12.4 million during the same period in 2014, and $4.3 million, or 12.8%, to $38.0 million during the nine months ended September 30, 2015, as compared to $33.7 million for the same period in 2014. During third quarter 2015, we recorded write-downs aggregating $806 thousand in the fair value of two vacated bank buildings held for sale. In addition, during second quarter 2015 we recorded a one-time contract termination fee of $876 thousand related to a change in payment service provider. Also contributing to the year-over-year increase were fraud losses, which increased $505 thousand, or 53.3%, to $1.5 million during the nine months ended September 30, 2015, as compared to $946 thousand the same period in 2014 primarily due to unusually high fraudulent credit card activity during the first half of 2015. The remaining year-to-date increase in other expenses were primarily due to the additional operating costs associated with branches acquired in the July 2014 acquisition of Mountain West, increases in advertising costs due to fluctuations in the timing of advertising campaigns and higher travel and legal costs.

During the third quarters of 2015 and 2014, we recorded loss contingency expenses of $5.0 million and $4.0 million, respectively, related to a lender liability lawsuit that was settled on August 31, 2015. For additional information regarding this litigation, see "Note 12 - Commitments and Contingencies" in the accompany "Notes to Unaudited Consolidated Financial Statements" included in this report.

Acquisition expenses of $566 thousand and $629 thousand recorded during the three and nine months ended September 30, 2015, respectively, included legal and professional fees related to the Absarokee acquisition in July 2015. Non-core acquisition expenses of $1.0 million and $1.6 million recorded during the three and nine months ended September 30, 2014, respectively, included legal and professional fees, employee retention payments and travel expenses related to the Mountain West acquisition in July 2014. For additional information regarding acquisitions, see "Recent Developments" included herein and “Note 2 – Acquisitions” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

Income Tax Expense. Our effective federal income tax rate was 29.4% for the nine months ended September 30, 2015 and 30.6% for the nine months ended September 30, 2014. State income tax applies primarily to pretax earnings generated within Montana and South Dakota. Our effective state tax rate was 4.2% for the nine months ended June, 2015 and 2014. Decreases in effective federal income tax rates are primarily due to tax credits received on investments in low income housing projects during 2015 and the last half of 2014.

Financial Condition

Total assets decreased $5.4 million, or less than 1.0%, to $8,605 million as of September 30, 2015, from $8,610 million as of December 31, 2014. Absent meaningful deposit growth during the first nine months of 2015, loan growth was funded through available funds resulting in decreases in cash, interest bearing deposits in banks and investment securities from December 31, 2014 to September 30, 2015. Significant fluctuations in balance sheet accounts are discussed below.

Loans. Total loans increased $279 million, or 5.7%, to $5,176 million as of September 30, 2015, as compared to $4,897 million December 31, 2014. Approximately $37 million of the increase was attributable to the Absarokee acquisition. The most notable organic growth occurred in commercial, commercial real estate, indirect consumer and agricultural loans.

Continuing business expansion in our market areas and the movement of completed commercial construction projects from construction loans to permanent financing resulted in increases in the commercial and commercial real estate loan portfolios. Commercial loans increased $39 million, or 5.2%, to $779 million as of September 30, 2015, from $740 million as of December 31, 2014, with approximately $4 million of the increase attributable to the Absarokee acquisition. Commercial real estate loans increased $111 million, or 6.8%, to $1.8 billion as of September 30, 2015, from $1.6 billion as of December 31, 2014, with approximately $12 million of the increase attributable to the Absarokee acquisition.

46

Indirect consumer loans grew organically $63 million, or 11.4%, to $616 million as of September 30, 2015, from $553 million as of December 31, 2014. Management attributes this increase to the combined impact of heightened consumer demand for recreational vehicles and increased dealer volume resulting from expansion efforts within our existing market areas.

Agricultural loans increased $30 million, or 24.0%, to $155 million as of September 30, 2015, from $125 million as of December 31, 2014, with approximately $7 million of the increase attributable to the Absarokee acquisition. Management attributes the remaining increase to seasonal increases in agricultural credit lines that typically occur during the second and third quarters of each year.

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 and Troubled Debt Restructurings
(Dollars in thousands)	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
Non-performing loans:
Non-accrual loans	$	66,359		$	70,848		$	73,941		$	62,182		$	71,915
Accruing loans past due 90 days or more	3,357			2,153			5,175			2,576			1,348
Total non-performing loans	69,716			73,001			79,116			64,758			73,263
OREO	8,031			11,773			15,134			13,554			18,496
Total non-performing assets	$	77,747		$	84,774		$	94,250		$	78,312		$	91,759
Troubled debt restructurings not included above	$	16,702		$	15,127		$	16,070		$	20,952		$	20,956
Non-performing loans to total loans	1.35		%	1.43		%	1.61		%	1.32		%	1.51		%
Non-performing assets to total loans and OREO	1.50		%	1.66		%	1.91		%	1.59		%	1.88		%
Non-performing assets to total assets	0.90		%	1.01		%	1.11		%	0.91		%	1.08		%

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.

47

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

Non-Performing Loans by Loan Type
(Dollars in thousands)	September 30, 2015		Percent of Total		December 31, 2014		Percent of Total
Real estate:
Commercial	$	23,237	33.4	%	$	27,700	42.9	%
Construction:			.
Land acquisition and development	9,146		13.1	%	8,252		12.7	%
Commercial	329		0.5	%	2,564		4.0	%
Residential	983		1.4	%	272		0.4	%
Total construction	10,458		15.0	%	11,088		17.1	%
Residential	3,332		4.8	%	4,554		7.0	%
Agricultural	6,792		9.7	%	6,842		10.6	%
Total real estate	43,819		62.9	%	50,184		77.5	%
Consumer	2,133		3.1	%	1,282		2.0	%
Commercial	22,722		32.6	%	12,846		19.8	%
Agricultural	731		1.0	%	446		0.7	%
Other	311		—	%	—		—	%
Total non-performing loans	$	69,716	100.0	%	$	64,758	100.0	%

Non-accrual loans. We generally place loans, excluding acquired credit impaired 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 $2.3 million and $3.2 million would have been accrued for the nine months ended September 30, 2015 and 2014, respectively. Non-accrual loans increased $4 million, or 6.7%, to $66 million as of September 30, 2015, from $62 million as of December 31, 2014, primarily due to the placement of the loans of one commercial borrower on non-accrual status.

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

OREO decreased $6 million, or 40.7%, to $8 million as of September 30, 2015, from $14 million as of December 31, 2014. During the nine months ended September 30, 2015, we recorded OREO additions of $5 million and sold OREO with a book value of $11 million at a net gain of $2.9 million. As of September 30, 2015, the composition of OREO properties was 46% land and land development, 26% commercial, 23% residential real estate, 1% construction and 4% agricultural.

48

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."

The allowance for loan losses is increased by provisions charged against earnings and net recoveries of charged-off loans and is reduced by negative provisions credited to earnings and net loan charge-offs. The allowance for loan losses consists of three elements:

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

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

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

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

Loans acquired in business combinations are recorded at fair value with no allowance for loan losses on the date of acquisition. Subsequent to the acquisition date, an allowance for loan loss is recorded for the emergence of new probable and estimable losses on loans acquired without evidence of credit impairment. Loans acquired with evidence of credit impairment are regularly monitored and to the extent that the performance has deteriorated from management's expectations at the date of acquisition, an allowance for loan losses is established. As of September 30, 2015, management determined that an allowance for loan losses related to acquired loans of $344 thousand was required under generally accepted accounting principles.

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.

49

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

Allowance for Loan Losses
(Dollars in thousands)	Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2015			2015			2015			2014			2014
Balance at beginning of period	$	76,552		$	75,336		$	74,200		$	74,231		$	78,266
Provision charged to operating expense	1,098			1,340			1,095			118			261
Charge offs:
Real estate
Commercial	120			47			109			485			41
Construction	2,028			—			30			108			20
Residential	71			510			45			30			84
Agricultural	—			53			2			1			2
Consumer	1,537			837			1,301			1,658			1,437
Commercial	791			61			374			22			4,678
Agricultural	—			—			—			—			—
Other	—			—			—			—			12
Total charge-offs	4,547			1,508			1,861			2,304			6,274
Recoveries:
Real estate
Commercial	387			293			512			446			181
Construction	—			49			316			736			728
Residential	—			80			154			124			88
Agricultural	—			3			10			—			2
Consumer	653			520			640			686			495
Commercial	113			438			270			162			484
Agricultural	—			1			—			1			—
Total recoveries	1,153			1,384			1,902			2,155			1,978
Net charge-offs	3,394			124			(41		)	149			4,296
Balance at end of period	$	74,256		$	76,552		$	75,336		$	74,200		$	74,231
Period end loans	$	5,176,480		$	5,103,946		$	4,927,306		$	4,897,443		$	4,854,382
Average loans	5,141,484			4,991,416			4,895,146			4,870,509			4,751,928
Net loans charged-off to average loans, annualized	0.26		%	0.01		%	—		%	0.01		%	0.36		%
Allowance to period end loans	1.43		%	1.50		%	1.53		%	1.52		%	1.53		%

Our allowance for loan losses as a percentage of period end loans declined to 1.43% as of September 30, 2015, as compared to 1.52% as of December 31, 2014, primarily due to loan growth, changes in loss factors and the acquisition of Absarokee loans, which were initially recorded at fair value with no carryover of the related allowance for loan losses. The decrease in our allowance for loan losses as a percentage of period end loans to 1.53% as of September 30, 2014, from 1.74% as of June 30, 2014,was due to the acquisition of Mountain West loans, which were initially recorded at fair value with no carryover of the related allowance for loan losses.

Although we have established our allowance for loan losses in accordance with accounting principles generally accepted in the United States and we believe that our allowance for loan losses is 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 $219 million, or 9.6%, to $2,068 million, or 24.0% of total assets, as of September 30, 2015, from $2,287 million, or 26.6% of total assets, as of December 31, 2014. During the first nine months of 2015, proceeds from maturities, calls and pay-downs of investment securities were used to fund loan growth.

50

We evaluate our investment portfolio quarterly for other-than-temporary declines in the market value of individual investment securities. This evaluation includes monitoring credit ratings; market, industry and corporate news; volatility in market prices; and, determining whether the market value of a security has been below its cost for an extended period of time. As of September 30, 2015, we had investment securities with fair values aggregating $249 million that had been in a continuous loss position more than twelve months. Gross unrealized losses on these securities of $2 million as of September 30, 2015, were attributable to changes in interest rates. No impairment losses were recorded during the three and nine months ended September 30, 2015 and 2014.

Cash and Cash Equivalents. Cash and cash equivalents decreased $91 million, or 11.3%, to $708 million as of September 30, 2015, from $799 million as of December 31, 2014. During the first nine months of 2015, loan growth was funded through available funds resulting in decreases in cash and cash equivalents from December 31, 2014 to September 30, 2015. Remaining decreases in cash and cash equivalents occurred during the normal course of business and are not reflective of changes in business plan or strategy.

Goodwill. Goodwill decreased $1 million to $204 million as of September 30, 2015, from $205 million as of December 31, 2014. During third quarter 2015, we recorded goodwill of $34 thousand in conjunction with the Absarokee acquisition. This increase was offset by a $1 million decrease in recorded goodwill resulting from the finalization of the fair valuation of deferred tax assets acquired in the Mountain West acquisition.

Company-Owned Life Insurance. Company-owned life insurance increased $32 million, or 20.9%, to $186 million as of September 30, 2015, from $154 million as of December 31, 2014. This increase was due to the second quarter 2015 purchase of an additional $23 million of life insurance covering selected officers of FIB and increases in cash surrender value of existing policies.

Deferred Tax Asset/Liability. As of September 30, 2015, we had a net deferred tax liability of $13 million, as compared to a net deferred tax asset of $5 million as of December 31, 2014. The shift in deferred taxes from a net asset to a net liability was primarily due to decreases in deferred tax assets related to unrealized losses on available-for sale investment securities and the removal of deferred tax assets upon the disposal of real property acquired as part of the Mountain West acquisition. The shift in the deferred taxes from a net asset to a net liability was also impacted by decreases in deferred tax assets related to tax deductible goodwill from previous acquisitions.

Deposits. Our deposits consist of non-interest bearing and interest bearing demand, savings, individual retirement and time deposit accounts. Total deposits increased $30 million, or less than 1.0%, to $7,036 million as of September 30, 2015, from $7,006 million as of December 31, 2014. The following table summarizes our deposits as of the dates indicated:

Deposits
(Dollars in thousands)	September 30, 2015		Percent of Total		December 31, 2014		Percent of Total
Non-interest bearing demand	$	1,832,535	26.0	%	$	1,791,364	25.5	%
Interest bearing:
Demand	2,134,203		30.3		2,133,273		30.5
Savings	1,918,724		27.3		1,843,355		26.3
Time, $100 and over	496,539		7.1		520,125		7.4
Time, other (1)	653,793		9.3		718,095		10.2
Total interest bearing	5,203,259		74.0		5,214,848		74.5
Total deposits	$	7,035,794	100.0	%	$	7,006,212	100.0	%

(1) Included in Time, other are Certificate of Deposit Account Registry Service, or CDAR, deposits of $33 million as of September 30, 2015 and $40 million as of December 31, 2014.

Securities Sold Under Repurchase Agreements. In addition to deposits, repurchase agreements with commercial depositors, which include municipalities, provide an additional source of funds. Under repurchase agreements, deposit 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 agreement balances decreased $65 million, or 12.9%, to $438 million as of September 30, 2015, from $502 million as of December 31, 2014, due to fluctuations in the liquidity of our customers.

51

Long-Term Debt. Long-term debt increased $5 million, or 13.2%, to $43 million as of September 30, 2015, from $38 million as of December 31, 2014. On January 29, 2015, the Company borrowed $5 million on a 2.28% note payable maturing July 29, 2022, with interest payable monthly and principal due at maturity. The note is collateralized by the Company's equity interest in Universal Sub CDE, LLC, a community development entity owned 99.9% by the Company.

Accounts Payable and Accrued Expenses. Accounts payable and accrued expenses decreased $17 million, or 26.4%, to $49 million as of September 30, 2015, from $66 million as of December 31, 2014. This decrease is due to fluctuations in the timing of corporate income tax payments and the reclassification of deferred tax assets to current taxes payable.

Capital Resources and Liquidity Management

Stockholders’ equity is influenced primarily by earnings, dividends, sales and redemptions of common stock and changes in the unrealized holding gains or losses, net of taxes, on available-for-sale investment securities. Stockholders’ equity increased $30 million, or 3.3%, to $939 million as of September 30, 2015, from $909 million as of December 31, 2014, primarily due to the retention of earnings, which was partially offset by the redemption and retirement of Class A common shares.

During the nine months ended September 30, 2015, we repurchased and retired 765,875 shares of our Class A common stock in open market transactions at an aggregate purchase price of $20 million. The repurchases were made pursuant to a stock repurchase program approved by our Board of Directors. For additional information regarding the repurchase, see “Note 9 – Capital Stock” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

On July 2, 2013, the Board of Governors of the Federal Reserve Bank 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. The revised regulatory capital framework ("Basel III ") includes a more stringent definition of capital and introduces a new common equity tier 1, or CET1, capital requirement; sets forth a comprehensive methodology for calculating risk-weighted assets, introduces a conservation buffer and sets out minimum capital ratios and overall capital adequacy standards. As a banking organization subject to the standardized approach, Basel III became effective for us on January 1, 2015. Certain deductions and adjustments to regulatory capital began to phase in starting January 1, 2015 and will be fully implemented on January 1, 2018. The capital conservation buffer phases in beginning January 1, 2016 and will be fully implemented on January 1, 2019.

As of September 30, 2015 and December 31, 2014, we had capital levels that, in all cases, exceeded the well-capitalized guidelines. For additional information regarding our capital levels, see “Note 11 – Regulatory Capital” in the accompanying “Notes to Unaudited Consolidated Financial Statements” included in this report.

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

52

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

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As of September 30, 2015, 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, 2014.

Item 4.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act. As of September 30, 2015, an evaluation was performed, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of September 30, 2015, were effective in ensuring that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods required by the SEC’s rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting for the quarter ended September 30, 2015, 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, 2014.

53

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, 2014.

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

(a) There were no unregistered sales of equity securities during the three months ended September 30, 2015.

(b) Not applicable.

(c) There were no purchases made by or on behalf of us or any "affiliated purchasers" (as defined in Rule 10b-18(a)(3) under the Exchange Act), of our common stock during the three months ended September 30, 2015.

				Total Number of	Maximum Number
				Shares Purchased	of Shares That
	Total Number	Average		as Part of Publicly	May Yet Be
	of Shares	Price Paid		Announced Plans	Purchased Under the
Period	Purchased	Per Share		or Programs	Plans or Programs
July 2015	1,334	$	28.09	—	434,125
August 2015	58,542	26.06		58,542	375,583
September 2015	141,458	26.31		141,458	1,000,000
Total	201,334	$	26.25	200,000	1,000,000

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

Exhibit Number	Description
2.2	Agreement and Plan of Merger between First Interstate BancSystem, Inc. and Mountain West Financial Corp dated February 10, 2014 (incorporated herein reference to Exhibit 2.1 of the Company's Pre-Effective Amendment No. 1 to Registration Statement on Form S-4, No. 333-194050, dated April 2, 2014)
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 3.8 of the Company’s Current Report on Form 8-K filed on February 3, 2011)
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, as amended (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)

54

Exhibit Number	Description
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, amended and restated as of November 21, 2013 (incorporated herein by reference to Exhibit 4.4 of the Company's Registration Statement on Form S-8, No. 333-193543, filed January 24, 2014 )
10.8†	Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance-ROA) for Certain Executive Officers (incorporated herein by reference to Exhibit 10.8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013)
10.9†	Form of First Interstate BancSystem, Inc. 2006 Equity Compensation Plan Restricted Stock Agreement (Performance-ROE) for Certain Executive Officers (incorporated herein by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013)
10.10†	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)
10.11†	First Interstate BancSystem, Inc. 2015 Equity and Incentive Plan (incorporated herein by reference to Appendix A of the Company’s Proxy Statement on Schedule 14A for the 2015 Annual Meeting of Shareholders, filed on April 2, 2015).
10.12†*	Executive Employment Agreement between Kevin P. Riley and First Interstate BancSystem, Inc. dated September 23, 2015.
10.13	Trademark License Agreements between Wells Fargo & Company and First Interstate BancSystem, Inc. (incorporated herein by reference to Exhibit 10.11 of the Registration Statement on Form S-1, 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.

55

SIGNATURES

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

		FIRST INTERSTATE BANCSYSTEM, INC.
Date:	November 6, 2015	/S/  KEVIN P. RILEY
		Kevin P. Riley
		President and Chief Executive Officer
Date:	November 6, 2015	/S/  MARCY D. MUTCH
		Marcy D. Mutch
		Executive Vice President and Chief Financial Officer

56

EX-10.12

Executive Employment Agreement

EFFECTIVE DATE: This Executive Employment Agreement (this “Agreement”) is dated as of September 23, 2015

(the “Effective Date”)

PARTIES: First Interstate BancSystem, Inc.

P.O. Box 30918

401 North 31st Street

Billings MT 59116-0918

(“Employer”)

Kevin P. Riley

3131 Iron Horse Trail #21

Billings MT 59106

(“Executive”)

Recitals

A.Employer is a financial services holding company, headquartered in Billings, Montana, and is the parent company of First Interstate Bank, a community bank with offices throughout Montana, Wyoming, and South Dakota.

B.Executive has nearly 30 years of experience in various positions in the financial services industry, most recently as Chief Financial Officer of Employer.

C.Employer has extended an offer of employment to Executive to serve as its President and Chief Executive Officer subject to the terms and conditions set forth in this Agreement. Executive accepts employment on the terms, covenants, and conditions set forth in this Agreement.

Agreement

In consideration of the foregoing recitals and the covenants and promises contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Employer and Executive agree as follows:

Article I.

DEFINITIONS AND INTERPRETATIONS

1.1Definitions. In addition to the terms defined elsewhere in this Agreement, as used in this Agreement, the following terms have the following meanings:

“Board” means the Board of Directors of Employer.

“Cause” means (1) any gross misconduct, negligence, or omission by Executive; (2) Executive’s material failure or refusal to adhere to the terms of this Agreement or to Employer’s written policies, rules and practices applicable to Executive; (3) Executive’s insubordination or failure to follow Board directives; (4) Executive’s unauthorized disclosure of Confidential Information (defined below) or breach of the Confidentiality provisions contained herein; (5) a material act or acts of dishonesty by Executive involving Employer; (6) Executive’s willful misconduct damaging the Employer, its reputation, products, services, or customers; or (7) commission by Executive of a criminal offense that, if committed in the State of Montana, would have constituted a felony under the laws of the State of Montana or the United States.

“Disability” means any mental or physical condition as a result of which Executive is unable or fails to perform the duties required of Executive under this Agreement, with or without an accommodation, for a period of at least 90 days (which need not be consecutive) during any 12 month period. During any period of Disability Executive must exhaust available PTO and short-term disability.

“Good Reason” means a special right of Executive to terminate employment at his initiative within 90 days following the occurrence of one or more of the following events (except as a result of a prior termination, and except for such events that occur with Executive’s written consent), provided that Executive has provided Employer with notice of such event within 30 days of its initial existence and Employer has not remedied such condition within 30 days of such notice:

(a)a material diminution or change, adverse to Executive, in Executive’s positions, titles, status, rank, nature of responsibilities, or authority with Employer (for this purpose, Executive’s removal as a member of Employer’s Board will only constitute Good Reason if Executive is not nominated for re-election by the Board);

(b)a material decrease in Executive’s annual Base Salary, or a decrease in the target bonus award opportunities described in Article V of this Agreement (other than an across-the-board reduction on a percentage basis for all Named Executive Officers);

(c)a material reduction in the aggregate benefits for which Executive is eligible under Employer’s benefit plans (other than an across-the-board reduction in the aggregate benefits for all Named Executive Officers); or

(d)Employer requiring Executive to relocate more than 50 miles outside of Billings, Montana.

“Named Executive Officers” means those persons designated as named executive officers, or NEOs, in Employer’s definitive proxy statement most recently filed with the Securities and Exchange Commission under cover of Schedule 14A promulgated under the Securities Exchange Act of 1934, as amended, or as any such proxy statement is amended by subsequent filing.

1.2    Interpretation. Unless a clear contrary intention appears, as used in this Agreement (a) the singular includes the plural and vice versa, (b) reference to any document means such document as amended from time to time, (c) “include” and “including” means

including without limiting the generality of any description preceding such term, (d) the word “or” is not exclusive, unless otherwise expressly stated, (e) the terms “hereof,” “herein,” “hereby,” and derivative or similar words refer to this entire Agreement, and (f) headings are for convenience only and do not constitute a part of this Agreement.

Article II.

EMPLOYEMENT DUTIES

Employer will employ Executive as its President and Chief Executive Officer for Employer, and Executive will reside and maintain his principal office in Billings, Montana, and accepts employment under the terms and conditions set forth in this Agreement. Executive will be responsible for performing the business and professional services typically performed by the President and Chief Executive Officer of any company, or as may reasonably be assigned to him by the Board, subject to the general and customary supervision by the Board.

Article III.

FULL-TIME BEST EFFORTS

2.1Full-Time Best Efforts. Executive agrees to devote the professional time and attention required to perform Executive’s obligations under this Agreement, and agrees at all times faithfully, industriously and to the best of Executive’s ability, experience and talent to perform all of Executive’s obligations under this Agreement. Until this Agreement is terminated, Executive may not be employed or engaged by any other person or firm other than Employer unless otherwise provided for in Employer’s policies or authorized by the Board.

3.2.No Conflicting Obligations. Executive represents and warrants to Employer that he is under no obligation or commitment, whether contractual or otherwise, that is inconsistent with his obligations under this Agreement. Executive represents and warrants that he will not use or disclose, in connection with his employment by Employer, any trade secrets or other proprietary information or intellectual property in which Executive or any other person has any right, title, or interest and that his employment by Employer as contemplated by this Agreement will not infringe or violate the rights of any other person or entity. Executive represents and warrants to Employer that he has returned all property and confidential information belonging to any prior employers.

Article IV.

TERM AND TERMINATION

4.1    Term. The term of this Agreement will begin on the Effective Date and continue until 11:59 p.m. on December 31, 2018 (“Employment Term”). This Agreement may be renewed for successive one-year terms upon written agreement of both parties no later than 60 days prior to the end of the term.

4.2Termination. Notwithstanding Section 4.1:

(a)This Agreement may be terminated by the agreement of Employer and Executive.

(b)This Agreement and Executive’s employment will terminate immediately upon Executive’s death.

(c)This Agreement may be terminated by Employer on or after the 90th day of Executive’s Disability.

(d)Employer may terminate this Agreement immediately upon notice for Cause.

(e)Executive may terminate this Agreement upon 60 days’ written notice to Employer with or without Good Reason.

(f)Upon termination of Executive’s employment under this Agreement, Employer will have no further obligation to Executive except as specifically provided under this Agreement or as provided for in Employer’s compensation and benefit plans. Executive’s obligations under Article VIII and Article IX will survive termination of this Agreement. Upon termination of this Agreement, Executive agrees to return to Employer any and all equipment, client, project and investor information including, without limitation, confidential files, proprietary information, client files, investor information, project files, construction files, electronic equipment, vehicles, keys, credit cards, and the like, owned by Employer and used by, or in the possession of, Executive.

Article V.

COMPENSATION AND BENEFITS

5.1    Base Salary. Employer agrees to pay Executive an annual salary of Five Hundred Twenty Five Thousand Dollars ($525,000) (the “Base Salary”) in accordance with Employer’s regular payroll practices. This Base Salary is subject to periodic review and adjustment.

5.2Short-Term Incentive Program. Executive will be eligible for an award under any short-term incentive or annual bonus program offered by Employer to its Named Executive Officers. Starting with the year commencing January 1, 2016, Executive will be eligible to earn a bonus based on the target incentive equal to 50% of his Base Salary (“Target Bonus”). For 2015, Executive will be eligible to earn a maximum bonus based on the target incentive calculated as follows: (1) 40% of his base salary as Chief Financial Officer of Three Hundred Twenty One Thousand Three Hundred Sixty Dollars ($321,360) prorated over the first nine months of the year; and (2) 50% of his Base Salary as Chief Executive Officer prorated over the last three months of the year.

5.3Long-Term Incentive Plan. Executive will be eligible for grants of equity and incentive compensation under any equity or incentive compensation program offered by Employer to its Named Executive Officers. Executive’s target long-term incentive for the year commencing 2016 will be no less than 50% of his Base Salary.

5.4    Promotional Grant. Executive will receive a one-time award of restricted stock (the “Promotional Shares”) in an amount equal to the fair market value of Three Hundred Thousand Dollars ($300,000), effective as of September 25, 2015. The Promotional Shares will vest in equal installments on September 25 of 2016, 2017 and 2018. Any Promotional Shares not vested will be forfeited if Executive’s employment with Employer terminates. The grant of

the Promotional Shares will be subject to the terms of Employer’s 2015 Equity Incentive Plan and a Restricted Stock Grant Agreement provided to Executive on or around September 25, 2015.

5.5Nonqualified Deferred Compensation. Employer agrees to develop a nonqualified deferred compensation program, either as part of its existing nonqualified deferred compensation plan or through a new supplemental executive retirement plan, pursuant to which Employer will agree to make a contribution as of the end of each calendar year beginning with 2016. Employer’s contributions will be contingent on Executive’s employment with Employer as of the last day of the calendar year, and will be subject to vesting and other terms to be negotiated. The amount of Employer’s contribution on Executive’s behalf will equal 20% of Executive’s Base Salary, plus an additional contribution of up to an additional 20% of Executive’s Base Salary contingent on performance criteria.

5.6Business Expenses. Employer will reimburse Executive for any business-related expenses approved pursuant to Employer’s policy.

5.7Fringe Benefits. Executive will be entitled to participate in any plans, arrangements or distributions by Employer pertaining to or in connection with any leave, paid time off (“PTO”) health insurance, pension, 401(k) and profit sharing plans or benefits that Employer adopts for the senior management executives of Employer (the “Fringe Benefits”) on terms no less favorable than provided to other Named Executive Officers. Executive will be subject to all of the rules of Employer’s plans providing the Fringe Benefits, including without limitation, rules regarding participation and vesting.

5.8Company Car and Social Club Membership. Employer will purchase a company vehicle for Executive to use. The purchase price of the car shall not exceed $65,000. Employer will provide to Executive a membership to one of the country clubs in Billings, Montana.

Article VI.

SEVERANCE PAYMENTS AND BENEFITS

6.1    Employer’s Termination of Executive for Cause or Executive’s Resignation without Good Reason. In the event that Employer terminates Executive’s employment for Cause or Executive resigns without Good Reason, Employer agrees to pay Executive any accrued but unpaid Base Salary through the date of termination or resignation, all accrued but unused PTO earned through the date of termination or resignation, and any reimbursement of expenses owed pursuant to this Agreement on Employer’s next regularly scheduled pay day.

6.2Termination due to Executive’s Death or Disability. In the event that Executive’s employment terminates for death or Disability, Employer agrees to pay Executive or his estate:

(a)all accrued but unpaid Base Salary through the date of termination, paid on Employer’s next regularly scheduled pay day after termination;

(b)all accrued but unused PTO earned through the date of termination, paid on Employer’s next regularly scheduled pay day after termination;

(c)any reimbursement of expenses owed pursuant to this Agreement, paid on Employer’s next regularly scheduled pay day after the expenses have been approved; and

(d)any benefit Executive or his estate may be entitled to under any life or disability plan provided by Employer.

6.3Executive’s Resignation for Good Reason. In the event that Executive resigns for Good Reason (other than in connection with a Change in Control where Executive would be entitled to benefits under Section 6.4 of this Agreement and shall not be entitled to any severance benefits under this Section 6.3), Employer agrees to pay Executive the following severance benefits:

(a)all accrued but unpaid Base Salary through the date of termination or resignation, paid on Employer’s next regularly scheduled pay day after termination or resignation;

(b)all accrued but unused PTO earned through the date of termination or resignation, paid on Employer’s next regularly scheduled pay day after termination or resignation;

(c)any reimbursement of expenses owed pursuant to this Agreement, paid on Employer’s next regularly scheduled pay day after the expenses have been approved;

(d)an amount equal to 1.5 times the Base Salary in effect at the time of the resignation, which shall be paid to Executive in 18 monthly installments commencing on the 60th day after the termination date (subject, however, to delay if applicable under Section 11.11 of this Agreement); and

(e)an additional monthly amount equal to the full premium cost for Executive to continue any applicable medical, health, or life insurance as in effect immediately prior to the date of termination, for a period not to exceed 18 months and terminating on any earlier date on which Executive becomes eligible for coverage from a subsequent employer. In the event such benefit would (in Employer’s determination) violate the non-discrimination rules applicable to group medical plans under the Patient Protection and Affordable Care Act of 2010, Internal Revenue Code Section 105(h), or other applicable law, Employer will treat such amounts as taxable income with respect to Executive and Executive will be responsible for all applicable taxes and withholdings.

6.4Termination following Change in Control. In the event that Employer terminates Executive (other than for Cause, Death or Disability) during the 24-month period following or the 6-month period preceding a Change in Control (as such term is defined in Employer’s 2015 Equity and Incentive Plan), or in the event that Executive resigns for Good Reason during such 30-month period, Employer agrees to pay Executive the following severance benefits:

(a)all accrued but unpaid Base Salary through the date of termination or resignation, paid on Employer’s next regularly scheduled pay day after termination or resignation;

(b)all accrued but unused PTO earned through the date of termination or resignation, paid on Employer’s next regularly scheduled pay day after termination or resignation;

(c)any reimbursement of expenses owed pursuant to this Agreement, paid on Employer’s next regularly scheduled pay day after the expenses have been approved;

(d)an amount equal to 1.5 times the Base Salary plus Target Bonus in effect at the time of the resignation or in effect immediately preceding the Change in Control, whichever is higher, which shall be paid to Executive in 18 monthly installments commencing on the 60th day after the termination date (or, if later, 60 days after the Change in Control is effective, and subject to delay if applicable under Section 11.11 of this Agreement);

(e)a pro rata portion of the Executive’s Target Bonus for the calendar year of the termination, less applicable withholdings and deductions, paid in a lump sum no later than 60 days after the termination date (or, if later, 60 days after the Change in Control is effective, and subject to delay if applicable under Section 11.11 of this Agreement); and

(f)an additional monthly amount equal to the full premium cost for Executive to continue any applicable medical, health, or life insurance as in effect immediately prior to the date of termination, for a period not to exceed 18 months and terminating on any earlier date on which Executive becomes eligible for coverage from a subsequent employer. In the event such benefit would (in Employer’s determination) violate the non-discrimination rules applicable to group medical plans under the Patient Protection and Affordable Care Act of 2010, Internal Revenue Code Section 105(h), or other applicable law, Employer will treat such amounts as taxable income with respect to Executive and Executive will be responsible for all applicable taxes and withholdings.

6.5Conditions To Payment of Severance.

(a)Notwithstanding anything to the contrary contained in this Agreement, to the extent that any of the payments and benefits provided for under this Agreement or any other agreement or arrangement between Employer and Executive (collectively, the “Payments”) (i) constitute a “parachute payment” within the meaning of Internal Revenue Code Section 280G and (ii) but for this paragraph would be subject to the excise tax imposed by Code Section 4999, then the Payments shall be payable either (a) in full or (b) as to such lesser amount which would result in no portion of such Payments being subject to excise tax under Code Section 4999, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in Executive’s receipt on an after-tax basis of the greatest amount of benefits under this Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999. Unless Executive and Employer otherwise agree in writing, any determination required under this paragraph will be made in writing by Employer’s independent public accountants, whose determination shall be conclusive and binding upon Executive and Employer for all purposes. Any reduction may be made by Employer in its sole discretion consistent with the requirements of Code Section 409A.

(b)Any payments under Section 6.3 or 6.4 will be made only if, at the time scheduled for such payment, Executive has executed (and the applicable revocation periods have expired) a complete release in favor of Employer, its affiliates, and all of their respective officers, directors, employees, principals, managers, partners, members, attorneys, and representatives, in form and substance satisfactory to Employer.

Article VII.

WITHHOLDING TAX

Employer is entitled to withhold from the Base Salary and any other amounts that it pays to Executive under this Agreement or otherwise, an amount sufficient to satisfy all federal, state and local income and employment tax withholding requirements with respect to any and all amounts paid to Executive by Employer.

Article VIII.

CONFIDENTIAL INFORMATION

8.1Confidential Information. “Confidential Information” as used in this Agreement means any and all communications, information, records, documents, material, data or ideas regarding Employer, including, without limitation, lists of customers; names, addresses, electronic mail addresses and telephone numbers of customers; customer account information; lists of expiration dates of insurance policies sold to customers; financial models and spreadsheets; project development plans and specifications; partnership agreements and legal documents; corporate information and proprietary data as well as future development plans; and any communication with investors, prospective investors, partners, developers, architects, engineers, contractors, lenders, consultants or any other service providers. Information disclosed to Executive by Employer or learned by Executive in the course of Executive’s employment with Employer will be considered Confidential Information by Executive unless the information is conspicuously designated as “Not Confidential” or, if provided orally, identified as not confidential at the time of disclosure.

8.2Nondisclosure and Nonuse Obligation. Executive may not disseminate or in any way disclose any Confidential Information to any person, agency, department, firm or business, provided, Executive may disclose Confidential Information to other employees of Employer, including, without limitation, officers, accountants, attorneys, and directors of Employer. Notwithstanding any other provision of this Agreement, this Agreement will not apply to any Confidential Information: (i) to the extent disclosure is required by law or is necessary to establish the rights of either party to this Agreement; (ii) disclosure of which is authorized in writing by Employer; or (iii) that is in the public domain or becomes part of the public domain through no violation of this Agreement. Executive must promptly give notice to Employer of any unauthorized use or disclosure of any Confidential Information. Employee agrees to assist Employer in remedying any unauthorized use or disclosure of any Confidential Information. Nothing herein shall prevent Executive from disclosing Confidential Information that impacts his personal financial situation to his financial advisors, accountants or attorneys.

Article IX.

COMPETITION AND NON-SOLICITATION

9.1Competition. From and after the termination of Executive’s employment with Employer (the “Termination Date”) until eighteen months after the Termination Date (the “RestrictedPeriod”), Executive may compete with Employer and own, operate, manage, control, engage in, participate in, invest in, hold any interest in, assist, aid, act as a consultant to or otherwise advise in any way, be employed by or perform any services (alone or in association with any person) for, any person (or on behalf of Executive) that engages in or owns, invests in, operates, manages or controls any venture or enterprise that directly competes with Employer upon prior written approval of the Board. However, if Executive, without the prior written approval of the Board, competes with Employer or owns, operates, manages, controls, engages in, participates in, invests in, holds any interest in, assists, aids, acts as a consultant to or otherwise advises in any way, is employed by or performs any services (alone or in association with any person) for any person (or on behalf of Executive) that engages in or owns, invests in, operates, manages or controls any venture or enterprise that directly competes with Employer at any time during the Restricted Period, Executive agrees to forfeit any future severance benefits and return to Employer any severance benefits already paid pursuant to Section 6.3 or 6.4 of this Agreement. Nothing in this Agreement shall prevent the Executive from passive investments of less than 1% in public companies or indirect investments through 401(k) plans, mutual funds, etc.

9.2Non-Solicitation.Executive agrees that during the Restricted Period he will not, except on behalf of Employer or with the express written permission of Employer, which may be given or withheld in Employer’s sole discretion, directly or indirectly solicit, or attempt to solicit (on Executive’s own behalf or on behalf of any other person or entity) any customers of Employer or its affiliates, or the employment or retaining of any employee or consultant of Employer or its affiliates.

Article X.

ARBITRATION

Any dispute arising out of or relating to this Agreement shall be settled or made by binding arbitration at a location in Billings, Montana pursuant to the Montana Uniform Arbitration Act or other applicable Montana law, and where not inconsistent, in accordance with the Commercial Arbitration Rules of the American Arbitration Association now or hereafter in effect. The parties to the dispute shall unanimously select the arbitrator. In the event the parties to the dispute are unable to unanimously select an arbitrator within ten (10) days of notice from any party to the dispute to all other parties to the dispute of the need to select an arbitrator, the arbitrator shall be selected in accordance with the Montana Uniform Arbitration Act. The parties to the dispute shall confer with the arbitrator and together shall decide upon a time and date for the arbitration hearing. If the parties to the dispute and the arbitrator are unable to agree upon a time and date for the arbitration hearing, the arbitrator shall determine the time and date for the arbitration hearing. The parties to the dispute shall equally split the arbitrator’s fees and costs. In agreeing to the method of dispute resolution set forth in this arbitration clause, the parties specifically acknowledge that each prefers to resolve disputes by arbitration rather than through

the formal court process. FURTHER, EACH OF THEM UNDERSTANDS THAT BY AGREEING TO ARBITRATIONS EACH OF THEM IS WAIVING THE RIGHT TO RESOLVE DISPUTES ARISING FROM OR RELATING TO THIS AGREEMENT IN COURT BY A JUDGE OR JURY, THE RIGHT TO A JURY TRIAL, THE RIGHT TO DISCOVERY AVAILABLE UNDER THE MONTANA RULES OF CIVIL PROCEDURE, THE RIGHT TO FINDINGS OF FACT BASED ON THE EVIDENCE, AND THE RIGHT TO ENFORCE THE LAW APPLICABLE TO ANY CASE ARISING OUT OF OR RELATING TO THIS AGREEMENT BY WAY OF APPEAL, EXCEPT AS ALLOWED UNDER THE MONTANA UNIFORM ARBITRATION ACT. Each of them also acknowledges that each has had an opportunity to consider and study this arbitration provision, to consult with counsel, to suggest modifications or changes, and, if requested, has received and reviewed a copy of the Montana Uniform Arbitration Act.

Article XI.

MISCELLANEOUS

11.1Key-Employee Insurance. Executive agrees that Employer may, from time to time, apply for and take out in its own name and at its own expense, life, health, accident, or other insurance upon Executive that Employer may deem necessary or advisable to protect its interests; and Executive agrees to submit to any medical or other examination necessary for such purposes and to assist and cooperate with Employer in preparing such insurance; and Executive agrees that he will have no right, title, or interest in or to such insurance.

11.2Governing Law. This Agreement shall be governed by the laws of the State of Montana.

11.3No Waiver. The failure of either party to demand strict performance and compliance with any part of this Agreement shall not be deemed to be a waiver of the rights of such party under this Agreement or by operation of law. Any waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed as a waiver of any subsequent breach thereof.

11.4Severability. The invalidity of any provision of this Agreement or portion of a provision shall not affect the validity of any other provision of this Agreement or the remaining portion of the applicable provision.

11.5Counterparts and Facsimile Signatures. This Agreement and any amendments to this Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one agreement. A facsimile or electronic signature to this Agreement and any amendments to this Agreement shall be deemed an original and binding upon the party against whom enforcement is sought.

11.6Notices. All notices required or permitted under this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed facsimile or electronic mail if sent during normal business hours of the recipient, if not, then on the next business day; or (iii) upon receipt, if sent by registered or certified mail or nationally recognized overnight courier. All notices shall be sent

to Employer or Executive at the address set forth on the first page of this Agreement, or at such other address as either party may designate by notice pursuant to this Section.

11.7Entire Agreement. The terms of this Agreement express and constitute the entire agreement between the parties pertaining to the subject matter of this Agreement and supersede all prior and contemporaneous agreements, term sheets, offer letters, understandings, negotiations and discussions, whether oral or written, of the parties. No supplement, modification, waiver or termination of this Agreement shall be binding, unless executed in writing by the party to be bound.

11.8Acknowledgments; Separate Representation. Each of the parties represents, acknowledges and agrees that the respective party has been advised to consult with professional legal and accounting advisors with respect to the legal and tax consequences of the transactions described in this Agreement and all agreements referenced in this Agreement, and each party has obtained and relied upon its own independent legal and accounting advisors in connection with the transactions contemplated in this Agreement.

11.9Amendment. This Agreement may be amended or altered by written instrument executed by all of the parties to this Agreement.

11.10Attorney’s Fees. In the event of any arbitration or other proceeding for the interpretation or enforcement of this Agreement, the prevailing party in such arbitration or other legal proceeding shall be entitled to recover its costs and expenses incurred, including, without limitation, reasonable attorneys’ fees

11.11Code Section 409A. The intent of the parties is that payments and benefits under this Agreement (including all attachments, exhibits and annexes) be exempt from or comply with Section 409A of the Internal Revenue Code of 1986, to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and be administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Code Section 409A, Executive shall not be considered to have terminated employment with Employer for purposes of this Agreement, and no payment shall be due to Executive under this Agreement, until Executive would be considered to have incurred a “separation from service” from Employer within the meaning of Code Section 409A. Each amount to be paid or benefit to be provided to Executive pursuant to this Agreement that constitutes deferred compensation subject to Code Section 409A shall be construed as a separate identified payment for purposes of Code Section 409A. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments to be made to Executive upon his or her separation from service would result in the imposition of any individual penalty tax imposed under Code Section 409A by reason of Executive’s status as a “specified employee,” the payment shall instead be made on the first business day after the earlier of (i) the date that is six months following such separation from service and (ii) Executive’s death. To the extent that the Agreement provides for the reimbursement of specified expenses incurred by Executive, such reimbursement shall be made in accordance with the provisions of the Agreement, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred. The amount of expenses eligible for reimbursement or in-kind benefits provided by Employer in any

taxable year of Executive shall not affect the amount of expenses or in-kind benefits to be reimbursed or provided in any other year (except in the case of maximum benefits to be provided under a medical reimbursement arrangement, if applicable).

11.12Recovery of Compensation in Connection with Financial Restatement. Notwithstanding any other provision of this Agreement to the contrary, if the Board determines that Employer is required to restate its financial statements due to material noncompliance with any financial reporting requirement under the law, whether such noncompliance is the result of misconduct or other circumstances, Executive shall reimburse Employer for any amounts earned or payable to the extent required by applicable law and Employer’s Clawback Policy. Without limiting the foregoing, all compensation paid by Employer to Executive is subject to any compensation recapture policies required by applicable law (including the Sarbanes-Oxley Act of 2002) or that are established by Employer from time to time, including any clawback policy adopted or implemented in respect of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and such regulations as are promulgated thereunder from time to time to the extent required therein and the implementing regulations.

The parties have executed this Agreement effective as the Effective Date.

EMPLOYER:

First Interstate BancSystem, Inc.

By: /s/ THOMAS W. SCOTT

Thomas W. Scott

Chairman of the Board of Directors

Date: September 25, 2015

EXECUTIVE:

/s/ KEVIN P. RILEY

Kevin P. Riley

Date: September 25, 2015

8049430_11

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, Kevin P. Riley, 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, in accordance with generally accepted accounting principles;

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

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

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

DATE: November 6, 2015

/s/ KEVIN P. RILEY

Kevin P. Riley

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, Marcy D. Mutch, 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, in accordance with generally accepted accounting principles;

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

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

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

DATE: November 6, 2015

/s/ MARCY D. MUTCH

Marcy D. Mutch

Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

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

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

The undersigned are the Chief Executive Officer and the Chief Financial Officer of First Interstate BancSystem, Inc. (the “Registrant”). This Certification is made pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This Certification accompanies the Quarterly Report on Form 10-Q of the Registrant for the quarter ended September 30, 2015.

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

This Certification is executed as of November 6, 2015.

/s/ KEVIN P. RILEY

Kevin P. Riley

President and Chief Executive Officer

/s/ MARCY D. MUTCH

Marcy D. Mutch

Executive Vice President and Chief Financial Officer

XML

Investment Securities Realized Gains (Losses) on Investments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Investments, Debt and Equity Securities [Abstract]
Gross realized gains	$ 23	$ 0	$ 75	$ 243
Gross realized losses	$ 0	$ (8)	$ 0	$ (163)

XML

Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net Income (Loss) Available to Common Stockholders, Basic
Net income	$ 20,162	$ 19,155	$ 63,364	$ 61,625
Weighted Average Number of Shares Outstanding, Basic and Diluted
Weighted average common shares outstanding for basic earnings per share computation	45,150,104	44,911,858	45,223,988	44,321,326
Dilutive effect of stock-based compensation	428,874	548,430	481,636	562,667
Weighted average common shares outstanding for diluted earnings per common share computation	45,578,978	45,460,288	45,705,624	44,883,993
Earnings Per Share, Basic and Diluted
Basic earnings per common share	$ 0.45	$ 0.43	$ 1.40	$ 1.39
Diluted earnings per common share	$ 0.44	$ 0.42	$ 1.39	$ 1.37
Performance Shares [Member]
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			165,489	102,529
Stock Options
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			0	0
Unvested Restricted Stock
Earnings Per Share, Basic and Diluted [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			5,884

XML

Schedule of Recorded Investment in Criticized Loans by Class and Credit Quality Indicator (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	$ 5,120,794	$ 4,856,615
Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,750,797	1,639,422
Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	212,990	220,443
Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	112,495	96,580
Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	93,775	101,246
Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	419,260	418,269
Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,020,445	999,903
Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	163,116	167,659
Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	3,353,618	3,225,253
Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	616,142	552,863
Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	150,170	144,141
Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	65,649	65,467
Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	831,961	762,471
Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	778,648	740,073
Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	154,855	124,859
Other Assets Especially Mentioned
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	155,157	154,084
Other Assets Especially Mentioned | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	76,483	84,533
Other Assets Especially Mentioned | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	14,928	11,826
Other Assets Especially Mentioned | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,230	2,029
Other Assets Especially Mentioned | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	39
Other Assets Especially Mentioned | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	16,158	13,894
Other Assets Especially Mentioned | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	6,016	10,473
Other Assets Especially Mentioned | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	8,549	10,122
Other Assets Especially Mentioned | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	107,206	119,022
Other Assets Especially Mentioned | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	774	916
Other Assets Especially Mentioned | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	687	553
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	1,461	1,469
Other Assets Especially Mentioned | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	43,384	25,766
Other Assets Especially Mentioned | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	3,106	7,827
Substandard
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	163,846	163,675
Substandard | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	86,047	83,448
Substandard | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	16,137	15,016
Substandard | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,219	2,666
Substandard | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	352	253
Substandard | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	18,708	17,935
Substandard | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	12,117	10,848
Substandard | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	16,095	12,328
Substandard | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	132,967	124,559
Substandard | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,180	1,590
Substandard | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	928	1,085
Substandard | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	348
Substandard | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,108	3,023
Substandard | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	21,213	32,433
Substandard | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	7,558	3,660
Doubtful
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	24,547	34,854
Doubtful | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	5,095	15,246
Doubtful | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	630	2,507
Doubtful | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	27	0
Doubtful | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	757	2,442
Doubtful | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,414	4,949
Doubtful | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	645	1,121
Doubtful | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	612	612
Doubtful | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	7,766	21,928
Doubtful | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	164	121
Doubtful | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	307	432
Doubtful | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	1,263
Doubtful | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	471	1,816
Doubtful | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	15,638	10,273
Doubtful | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	672	837
Total Criticized Loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	343,550	352,613
Total Criticized Loans | Commercial real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	167,625	183,227
Total Criticized Loans | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	31,695	29,349
Total Criticized Loans | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	3,476	4,695
Total Criticized Loans | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,109	2,734
Total Criticized Loans | Total construction loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	36,280	36,778
Total Criticized Loans | Residential real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	18,778	22,442
Total Criticized Loans | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	25,256	23,062
Total Criticized Loans | Total real estate loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	247,939	265,509
Total Criticized Loans | Indirect consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	2,118	2,627
Total Criticized Loans | Other consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	1,922	2,070
Total Criticized Loans | Credit card consumer
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	0	1,611
Total Criticized Loans | Total consumer loans
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	4,040	6,308
Total Criticized Loans | Commercial
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	80,235	68,472
Total Criticized Loans | Agricultural
Loans and Leases Receivable Recorded Investment, Criticized Loans [Line Items]
Loans held for investment	$ 11,336	$ 12,324

XML

Schedule of Actual Capital Amounts and Ratios and Selected Minimum Regulatory Thresholds (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Total risk-based capital:
Actual Amount	$ 931,352	$ 897,769
Actual Ratio	15.30%	16.20%
Adequately Capitalized Amount	$ 487,670	$ 444,685
Adequately Capitalized Ratio	8.00%	8.00%
Well Capitalized Amount	$ 609,588	$ 555,856
Well Capitalized Ratio	10.00%	10.00%
Tier 1 risk-based capital:
Actual Amount	$ 843,096	$ 807,229
Actual Ratio	13.80%	14.50%
Adequately Capitalized Amount	$ 365,753	$ 222,343
Adequately Capitalized Ratio	6.00%	4.00%
Well Capitalized Amount	$ 487,670	$ 333,514
Well Capitalized Ratio	8.00%	6.00%
Common equity tier one risk-based capital:
Actual Amount	$ 763,096
Actual Ratio	12.50%
Adequately Capitalized Amount	$ 274,315
Adequately Capitalized Ratio	4.50%
Well Capitalized Amount	$ 396,232
Well Capitalized Ratio	6.50%
Leverage capital ratio:
Actual Amount	$ 843,096
Actual Ratio	10.10%	9.60%
Adequately Capitalized Amount	$ 332,961	$ 335,897
Adequately Capitalized Ratio	4.00%	4.00%
Well Capitalized Amount	$ 416,202	$ 419,871
Well Capitalized Ratio	5.00%	5.00%
FIB
Total risk-based capital:
Actual Amount	$ 868,800	$ 832,907
Actual Ratio	14.30%	15.10%
Adequately Capitalized Amount	$ 486,925	$ 442,468
Adequately Capitalized Ratio	8.00%	8.00%
Well Capitalized Amount	$ 608,656	$ 553,085
Well Capitalized Ratio	10.00%	10.00%
Tier 1 risk-based capital:
Actual Amount	$ 788,544	$ 754,708
Actual Ratio	13.00%	13.70%
Adequately Capitalized Amount	$ 365,194	$ 221,234
Adequately Capitalized Ratio	6.00%	4.00%
Well Capitalized Amount	$ 486,925	$ 331,851
Well Capitalized Ratio	8.00%	6.00%
Common equity tier one risk-based capital:
Actual Amount	$ 788,544
Actual Ratio	13.00%
Adequately Capitalized Amount	$ 273,895
Adequately Capitalized Ratio	4.50%
Well Capitalized Amount	$ 395,626
Well Capitalized Ratio	6.50%
Leverage capital ratio:
Actual Amount	$ 788,544
Actual Ratio	9.50%	9.20%
Adequately Capitalized Amount	$ 332,071	$ 330,006
Adequately Capitalized Ratio	4.00%	4.00%
Well Capitalized Amount	$ 415,089	$ 412,507
Well Capitalized Ratio	5.00%	5.00%

XML

Loans Schedule of Recorded Investment in Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	$ 120,989		$ 120,989		$ 87,240
Recorded Investment With No Allowance	55,747		55,747		57,050
Recorded Investment With Allowance	36,486		36,486		21,430
Total Recorded Investment	92,233		92,233		78,480
Related Allowance	8,917		8,917		5,792
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	82,674	$ 97,078	80,836	$ 104,059
Income Recognized	305	270	860	825
Interest Income on Impaired Loans If Interest Had Been Accrued	998	1,246	2,932	3,927
Commercial real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	55,910		55,910		41,603
Recorded Investment With No Allowance	26,265		26,265		28,143
Recorded Investment With Allowance	17,131		17,131		11,246
Total Recorded Investment	43,396		43,396		39,389
Related Allowance	1,451		1,451		1,608
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	36,075	53,492	38,639	57,743
Income Recognized	226	211	587	668
Land acquisition & development construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	19,349		19,349		12,511
Recorded Investment With No Allowance	9,509		9,509		7,262
Recorded Investment With Allowance	1,212		1,212		1,615
Total Recorded Investment	10,721		10,721		8,877
Related Allowance	254		254		574
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	9,325	11,611	9,591	13,529
Income Recognized	29	11	51	33
Residential construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	1,037		1,037		459
Recorded Investment With No Allowance	329		329		272
Recorded Investment With Allowance	0		0		0
Total Recorded Investment	329		329		272
Related Allowance	0		0		0
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	330	304	300	799
Income Recognized	0	0	0	0
Commercial construction real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	1,290		1,290		2,729
Recorded Investment With No Allowance	369		369		253
Recorded Investment With Allowance	740		740		2,442
Total Recorded Investment	1,109		1,109		2,695
Related Allowance	740		740		904
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	2,339	2,709	1,902	1,520
Income Recognized	4	2	6	6
Total construction loans
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	21,676		21,676		15,699
Recorded Investment With No Allowance	10,207		10,207		7,787
Recorded Investment With Allowance	1,952		1,952		4,057
Total Recorded Investment	12,159		12,159		11,844
Related Allowance	994		994		1,478
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	11,994	14,624	11,793	15,848
Income Recognized	33	13	57	39
Residential real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	3,664		3,664		2,959
Recorded Investment With No Allowance	2,186		2,186		2,452
Recorded Investment With Allowance	645		645		341
Total Recorded Investment	2,831		2,831		2,793
Related Allowance	148		148		143
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	2,607	4,773	2,720	5,537
Income Recognized	4	1	6	4
Agricultural real estate
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	9,043		9,043		8,844
Recorded Investment With No Allowance	6,407		6,407		6,444
Recorded Investment With Allowance	2,191		2,191		2,305
Total Recorded Investment	8,598		8,598		8,749
Related Allowance	708		708		732
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	8,578	9,031	8,661	10,223
Income Recognized	27	25	62	54
Total real estate loans
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	90,293		90,293		69,105
Recorded Investment With No Allowance	45,065		45,065		44,826
Recorded Investment With Allowance	21,919		21,919		17,949
Total Recorded Investment	66,984		66,984		62,775
Related Allowance	3,301		3,301		3,961
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	59,254	81,920	61,813	89,351
Income Recognized	290	250	712	765
Commercial
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	28,653		28,653		16,904
Recorded Investment With No Allowance	10,315		10,315		11,882
Recorded Investment With Allowance	13,461		13,461		2,644
Total Recorded Investment	23,776		23,776		14,526
Related Allowance	5,154		5,154		1,190
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	22,483	14,252	18,175	14,001
Income Recognized	2	14	122	42
Agricultural
Impaired Financing Receivable, Unpaid Principal Balance
Unpaid Total Principal Balance	2,043		2,043		1,231
Recorded Investment With No Allowance	367		367		342
Recorded Investment With Allowance	1,106		1,106		837
Total Recorded Investment	1,473		1,473		1,179
Related Allowance	462		462		$ 641
Impaired Financing Receivable, Average Recorded Investment and Cash Basis Method Interest Income
Average Recorded Investment	937	906	848	707
Income Recognized	$ 13	$ 6	$ 26	$ 18

XML

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine month periods ended September 30, 2015 and 2014.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Net income	$	20,162	$	19,155	$	63,364	$	61,625
Weighted average common shares outstanding for basic earnings per share computation	45,150,104		44,911,858		45,223,988		44,321,326
Dilutive effects of stock-based compensation	428,874		548,430		481,636		562,667
Weighted average common shares outstanding for diluted earnings per common share computation	45,578,978		45,460,288		45,705,624		44,883,993
Basic earnings per common share	$	0.45	$	0.43	$	1.40	$	1.39
Diluted earnings per common share	$	0.44	$	0.42	$	1.39	$	1.37

XML

Commitments and Contingencies (Details) $ in Thousands	Sep. 30, 2015 USD ($)
Construction Contracts
Unrecorded Unconditional Purchase Obligation [Line Items]
Commitments to Purchase	$ 3,020

XML

Recent Authoritative Accounting Guidance

9 Months Ended

Sep. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Authoritative Accounting Guidance

Recent Authoritative Accounting Guidance

ASU 2014-04 “Receivables-Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.” The amendments inASU 2014-04 clarify that an in-substance repossession or foreclosures occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (i) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (ii) the borrower conveying all interest in the residential real estate property to the creditor to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. The amendments in ASU 2014-04 also require interim and annual disclosure of both (i) the amount of foreclosed residential real estate property held by the creditor and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. The Company adopted the amendments in ASU 2014-04 effective January 1, 2015 using a prospective transition method. Adoption of the amendments in ASU 2014-04 did not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-09 "Revenue from Contracts with Customers." The amendments in ASU 2014-09 introduce a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. ASU 2015-14 was released in August of 2015 and the amendments defer the effective date of 2014-09 for all entities by one year. Public companies, certain not-for-profit and certain employee benefit plans should apply the guidance to annual reporting period beginning after December 15, 2017. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016. The Company is continuing to evaluate the new guidance to determine the impact it will have on its consolidated financial statements, results of operations or liquidity.

ASU 2014-11 "Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures." The amendments in ASU 2014-11 expand secured borrowing treatment for certain repurchase agreements. Under the amendments in ASU 2014-11, repurchase-to-maturity transactions and repurchase agreements executed as repurchase financing transactions are required to be accounted for as secured borrowings. ASU 2014-11 requires additional disclosures about certain transactions accounted for as a sale in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets through an agreement with the same counterparty. ASU 2014-11 also requires disclosure of the types of collateral pledged and liabilities associated with an entity's repurchase agreements, securities lending transactions and repurchase-to-maturity transactions accounted for as secured borrowings. The Company adopted the amendments in ASU 2014-11 are effective January 1, 2015. The adoption did not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-12 "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period." ASU 2014-12 amends Accounting Standards Codification ("ASC") Topic 718, Compensation-Stock Compensation, to clarify that a performance target that affects the vesting of a share-based payment award and that could be achieved after the requisite service period should be treated as a performance condition that affects the vesting of the award. ASU 2014-12 further clarifies that the requisite service period ends when the employees can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in ASU 2014-12 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. The amendments in ASU 2014-12 may be applied prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The amendments in ASU 2014-12 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-14 "Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure." ASU 2014-14 updates ASC Subtopic 310-40, Receivables-Troubled Debt Restructurings by Creditors, to require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if (i) the loan has a government guarantee that is not separable from the loan before foreclosure; (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and, (iii) any amount of the claim that is determined on the basis of the fair value of the real estate is fixed at the time of foreclosure. ASU 2014-14 provides that, upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The Company adopted the amendments in ASU 2014-14 effective January 1, 2015, using a prospective transition method. Adoption of the amendments in ASU 2014-12 did not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2014-16 "Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity." The amendments in ASU 2014-16 clarify that an entity should consider all relevant terms and features-including the embedded derivative feature being evaluated for bifurcation-in evaluating the nature of the host contract within a hybrid financial instrument. The amendments further clarify that no single term or feature would necessarily determine the economic characteristics and risk of the host contract. Rather, the nature of the host contract depends upon the economic characteristics and risk of the entire hybrid financial instrument. The amendments in ASU 2014-16 are effective for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The effects of initially adopting the amendments in ASU 2014-16 should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application is permitted to all relevant prior periods. The amendments in ASU 2014-16 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-02 "Amendments to the Consolidation Analysis." The amendments in ASU 2015-02 (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with variable interest entities, particularly those that have fee arrangements and related party relationships, and (iv) provide scope exceptions from consolidation guidance for reporting entities with interest in legal entities that are required to comply or operate in accordance with requirements of the Investment Company Act of 1940 for registered market funds. The amendments in ASU 2015-02 are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. The amendments in ASU 2015-02, which may be adopted using a retrospective or modified retrospective approach, will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-03 "Simplifying the Presentation of Debt Issuance Costs." The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, rather than as a deferred charge. The guidance in Update 2015-03 did not address presentation or subsequent measurement of debt issues costs related to line-of-credit arrangements. ASU 2015-15 addresses this gap. ASU 2015-15 adds that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The amendments in ASU 2015-03 are effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2015, and should be applied on a retrospective basis. The amendments in ASU 2015-03 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-05 "Intangibles-Goodwill and Other Internal-Use Software." The amendments in ASU 2015-05 (i) provide guidance about whether a cloud computing arrangement includes a software license. Under the guidance in ASU 2015-05, if a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance in ASU 2015-05 does not change generally accepted accounting principles for a customer's accounting for service contracts. The amendments in ASU 2015-05 are effective for public entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2015, with early adoption permitted. The amendments in ASU 2015-05, which may be adopted retrospectively or prospectively to all arrangements entered into or materially modified after the effective date. Adoption of the amendments in ASU 2015-05 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-10 "Technical Corrections and Improvements." The amendments in ASU 2015-10 represent changes to clarify the codification, correct unintended application of guidance, or make minor improvements to the codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments in ASU 2015-10 that require transition guidance are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2015, with early adoption permitted. All other amendments in ASU 2015-10 became effective in June 2015. The amendments in ASU 2015-03 will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

ASU 2015-16 “Business Combinations-Simplifying the Accounting for Measurement-Period Adjustments.” The amendments in ASU 2015-16 eliminate the requirement to retrospectively account for adjustments made to provisional amounts recognized as part of a business combination. Under the amendments in ASU 2015-16, an acquirer must recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in ASU 2015-16 require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 is effective for the Company for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments in ASU 2015-16, which are applied prospectively to adjustments to provisional amounts that occur after the effective date, will not have a material impact on the Company’s consolidated financial statements, results of operations or liquidity.

XML

OREO (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Real Estate Acquired Through Foreclosure, Acquired Through Acquisition	$ 0	$ 3,608	$ 0	$ 3,608
Mortgage Loans in Process of Foreclosure, Amount	0		0
Real Estate Acquired Through Foreclosure [Roll Forward]
Beginning balance	11,773	16,425	13,554	15,504
Additions	984	398	5,380	4,797
Valuation adjustments	(73)	(77)	(179)	(87)
Dispositions	(4,653)	(1,858)	(10,724)	(5,326)
Ending balance	8,031	$ 18,496	8,031	$ 18,496
Residential real estate
Real Estate Acquired Through Foreclosure [Roll Forward]
Ending balance	$ 1,810		$ 1,810

XML

Schedule of Loans by Class (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Loans and Leases Receivable [Line Items]
Loans held for investment	$ 5,120,794	$ 4,856,615
Mortgage loans held for sale	55,686	40,828
Total loans	5,176,480	4,897,443
Commercial real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	1,750,797	1,639,422
Land acquisition & development construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	212,990	220,443
Residential construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	112,495	96,580
Commercial construction real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	93,775	101,246
Total construction loans
Loans and Leases Receivable [Line Items]
Loans held for investment	419,260	418,269
Residential real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	1,020,445	999,903
Agricultural real estate
Loans and Leases Receivable [Line Items]
Loans held for investment	163,116	167,659
Total real estate loans
Loans and Leases Receivable [Line Items]
Loans held for investment	3,353,618	3,225,253
Indirect consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	616,142	552,863
Other consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	150,170	144,141
Credit card consumer
Loans and Leases Receivable [Line Items]
Loans held for investment	65,649	65,467
Total consumer loans
Loans and Leases Receivable [Line Items]
Loans held for investment	831,961	762,471
Total loans	831,961	762,471
Commercial
Loans and Leases Receivable [Line Items]
Loans held for investment	778,648	740,073
Total loans	778,648	740,073
Agricultural
Loans and Leases Receivable [Line Items]
Loans held for investment	154,855	124,859
Other, including overdrafts
Loans and Leases Receivable [Line Items]
Loans held for investment	$ 1,712	$ 3,959

XML

Business Combination (Details)					3 Months Ended		9 Months Ended
		Jul. 24, 2015 USD ($)	Mar. 26, 2015	Jul. 31, 2014	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Assets					$ 8,604,530,000		$ 8,604,530,000		$ 8,609,936,000
Loans and Leases Receivable, Net Amount					5,102,224,000		5,102,224,000		4,823,243,000
Deposits					7,035,794,000		7,035,794,000		7,006,212,000
Finite-lived Intangible Assets Acquired		$ 695
Finite-Lived Intangible Asset, Useful Life		10 years
Goodwill					204,409,000		204,409,000		$ 205,574,000
Business Combination, Acquisition Related Costs					$ 566,000	$ 1,052,000	629,000	$ 1,649,000
United Bank Acquisition, as recorded by Absarokee [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents		$ 5,598,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Marketable Securities		27,574,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans and Leases Receivable		37,520,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans and Leases Receivable, Allowance		(899,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		2,851,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Assets		816,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets		73,460,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deposits		63,565,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Securities Under Agreement to Repurchase		2,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt		1,222,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Liabilities		79,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities		66,866,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net		6,594,000
United Bank Acquisition, Fair Value Adjustment [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Marketable Securities		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans and Leases Receivable	[1]	(876,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans and Leases Receivable, Allowance	[2]	899,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment	[3]	277,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	[4]	695,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Assets	[5]	82,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets		1,077,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deposits		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Securities Under Agreement to Repurchase		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt	[6]	31,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Liabilities	[7]	440,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities		471,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net		606,000
United Bank Acquisition, as recorded by Company [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents		5,598,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Marketable Securities		27,574,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans and Leases Receivable		36,644,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans and Leases Receivable, Allowance		0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		3,128,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		695,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Assets		898,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets		74,537,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deposits		63,565,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Securities Under Agreement to Repurchase		2,000,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt		1,253,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Liabilities		519,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities		67,337,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net		7,200,000
Payments to Acquire Businesses, Gross		7,234,000
Goodwill		$ 34,000
United Bank [Member]
Business Acquisition [Line Items]
Business Acquisition, Date of Acquisition Agreement			Mar. 26, 2015
Estimate of Payments to Acquire Businesses, Gross							$ 7,234,000
Business Acquisition, Effective Date of Acquisition		Jul. 24, 2015
Number of Communities Adjacent to Existing Market Areas					3		3
Assets					$ 73,460,000		$ 73,460,000
Loans and Leases Receivable, Net Amount					37,520,000		37,520,000
Deposits					$ 63,565,000		$ 63,565,000
Number of Subsidiary Banks					1		1
Mountain West Bank
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition				Jul. 31, 2014
Goodwill, Purchase Accounting Adjustments							$ 1,199,000

[1] Write down of the book value of loans to their estimated fair values. The fair value of loans was estimated using cash flow projections based on the remaining maturity and repricing terms, adjusted for estimated future credit losses and prepayments and discounted to present value using a risk-adjusted market rate for similar loans.

[2] Adjustment to remove the Absarokee allowance for loan losses at acquisition date as the credit risk is accounted for in the fair value adjustment for loans receivable described in (1) above.

[3] Write up of the book value of premises and equipment to their estimated fair values based upon fair value estimates developed internally based upon comparable in-market transactions.

[4] ) Adjustment represents the value of the core deposit base assumed in the acquisition based upon an internal valuation based on analysis of recent acquisitions.

[5] ) Adjustment consists of a reduction in the value of accrued interest receivable, the write-off of pre-existing goodwill and recording the value of mortgage servicing assets acquired.

[6] Adjustment represents increase in the book value of Federal Home Loan Bank borrowings to their estimated fair market values based upon interest interest rates of similar advances with similar characteristics on the date of acquisition.

[7] Adjustment represents the net deferred tax liability resulting from fair value adjustments related to acquired assets, assumed liabilities, core deposit intangible assets and other purchase accounting adjustments.

XML

Long Term Debt (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Debt Instrument [Line Items]
Debt Instrument, Issuance Date	Jan. 29, 2015
Debt Instrument, Maturity Date	Jul. 29, 2022
Secured Debt [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 4,960
Debt Instrument, Interest Rate, Stated Percentage	2.28%
Members' Equity	99.90%

XML

Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Net accumulated other comprehensive income:
Net unrealized gain on investment securities available-for-sale	$ 6,264	$ (2,121)
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	(436)	0
Net actuarial loss on defined benefit post-retirement benefit plans	(387)	(413)
Net accumulated other comprehensive income	$ 5,441	$ (2,534)

XML

Schedule of Loans Renegotiated in Troubled Debt Restructurings (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) notes	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) notes	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Loans Renegotiated in Troubled Debt Restructurings	$ 42,547		$ 42,547		$ 44,227
Loans Renegotiated in Troubled Debt Restructurings, Non-Accrual Loans	25,845		25,845		23,275
Loans Renegotiated in Troubled Debt Restructurings, Accrual Loans	$ 16,702		$ 16,702		$ 20,952
Number of Notes | notes	11		12
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 12,264		$ 12,274
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	$ 0	$ 0	$ 0	$ 0
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | notes	3		4
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 264		$ 2,009
Loans and Leases Receivable, Impaired, Commitment to Lend	0		0
Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	8,744		8,754
Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	2,959		2,959
Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 561		$ 561
Commercial real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | notes	0		1
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 0		$ 1,745
Residential construction real estate
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes | notes	1		1
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 67		$ 67
Residential construction real estate | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Residential construction real estate | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Residential construction real estate | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Residential construction real estate | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 67		$ 67
Indirect consumer
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes | notes	2		2
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 31		$ 31
Indirect consumer | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Indirect consumer | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Indirect consumer | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Indirect consumer | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 31		$ 31
Commercial
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Number of Notes | notes	8		9
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 12,166		$ 12,176
Financing Receivable, Modifications, Subsequent Default, Number of Contracts | notes	3		3
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	$ 264		$ 264
Commercial | Interest only period
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	0		0
Commercial | Extension of terms or maturity
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	8,744		8,754
Commercial | Interest rate adjustment
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	2,959		2,959
Commercial | Other
Loans and Leases Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 463		$ 463

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated financial statements of First Interstate BancSystem, Inc. and subsidiaries (the “Company”) contain all adjustments (all of which are of a normal recurring nature) necessary to present fairly the financial position of the Company at September 30, 2015 and December 31, 2014, and the results of operations for each of the three and nine month periods ended and cash flows for each of the nine month periods ended September 30, 2015 and 2014 in conformity with U.S. generally accepted accounting principles. The balance sheet information at December 31, 2014 is derived from audited consolidated financial statements. Certain reclassifications, none of which were material, have been made to conform prior year financial statements to the September 30, 2015 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, 2014. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

XML

Schedule of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Real Estate Acquired Through Foreclosure, Valuation Adjustments	$ 73	$ 77	$ 179	$ 87
Related Allowance	8,917		8,917		$ 5,792
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 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 Non-recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	44,940		44,940		30,494
Other real estate owned	4,067		4,067		4,554
Real Estate Acquired Through Foreclosure, Valuation Adjustments			179
Impairment of real estate, received updated appraisal			106
Impairment of Real Estate, Change in Management Estimates			73	$ 87
Long-lived assets to be disposed of by sale	2,083		2,083		1,083
Related Allowance	8,573		8,573		5,792
Impaired Financing Receivable, Related Allowance, Partial Loan Charge-Offs	11,134		11,134		8,760
US Treasury Securities [Member] | 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
US Treasury Securities [Member] | 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	3,941		3,941
US Treasury Securities [Member] | 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
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	606,044		606,044		720,933
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
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	931,055		931,055		990,666
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
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	258		258		325
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
Other Investments | 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
Other Investments | 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	3,795		3,795
Other Investments | 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
Estimated Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,545,093		1,545,093		1,711,924
Derivative Liability	436		436
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	44,940		44,940		30,494
Other real estate owned	4,067		4,067		4,554
Long-lived assets to be disposed of by sale	2,083		2,083		1,083
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
Derivative Liability	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	1,545,093		1,545,093		1,711,924
Derivative Liability	436		436
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
Derivative Liability	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	27,795		27,795		30,494
Estimated Fair Value | US Treasury Securities [Member] | 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	3,941		3,941
Estimated Fair Value | Obligations of U.S. government agencies | 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	606,044		606,044		720,933
Estimated Fair Value | U.S. agency residential mortgage-backed securities & collateralized mortgage obligations | 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	931,055		931,055		990,666
Estimated Fair Value | Private mortgage-backed securities | 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	258		258		325
Estimated Fair Value | Other Investments | 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	3,795		3,795
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment securities available-for-sale	1,545,093		1,545,093		1,711,924
Derivative Liability	436		436
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	47,502		47,502		45,046
Long-lived assets to be disposed of by sale	3,590		3,590		1,785
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	1,507		1,507		702
Interest Rate Swap [Member] | 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]
Derivative Asset	0		0		0
Derivative Liability	0		0		0
Interest Rate Swap [Member] | 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]
Derivative Asset	918		918		61
Derivative Liability	1,400		1,400		59
Interest Rate Swap [Member] | 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]
Derivative Asset	0		0		0
Derivative Liability	0		0		0
Interest Rate Swap [Member] | Estimated Fair Value | Fair Value Measured on a Recurring Basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	918		918		61
Derivative Liability	$ 1,400		$ 1,400		$ 59

XML

Loans Schedule of Loans Acquired from Business Combinations (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2014
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities [Abstract]
Outstanding Balance	$ 35,265	$ 42,627
Carrying Amount Net, Accrual Status	22,867	32,350
Carrying Amount Net, Non Accrual Status	0	0
Total Carrying Value	$ 22,867	$ 32,350

XML

Loans (Tables)

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Schedule of Loans by Class

	September 30, 2015		December 31, 2014
Real estate loans:
Commercial	$	1,750,797	$	1,639,422
Construction:
Land acquisition & development	212,990		220,443
Residential	112,495		96,580
Commercial	93,775		101,246
Total construction loans	419,260		418,269
Residential	1,020,445		999,903
Agricultural	163,116		167,659
Total real estate loans	3,353,618		3,225,253
Consumer:
Indirect consumer	616,142		552,863
Other consumer	150,170		144,141
Credit card	65,649		65,467
Total consumer loans	831,961		762,471
Commercial	778,648		740,073
Agricultural	154,855		124,859
Other, including overdrafts	1,712		3,959
Loans held for investment	5,120,794		4,856,615
Mortgage loans held for sale	55,686		40,828
Total loans	$	5,176,480	$	4,897,443

Schedule of acquired loans with credit impairment

The following table displays the outstanding unpaid principal balance, accrued interest receivable and accrual status of loans acquired with credit impairment as of September 30, 2015 and 2014:

As of September 30,	2015		2014
Outstanding balance	$	35,265	$	42,627
Carrying value
Loans on accrual status	22,867		32,350
Loans on non-accrual status	—		—
Total carrying value	$	22,867	$	32,350

The following table summarizes changes in the accretable yield for loans acquired credit impaired for the three and nine months ended September 30, 2015 and 2014:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Beginning balance	$	7,482		$	—		$	5,781		$	—
Additions	624			5,233			1,073			5,233
Accretion income	(845		)	(289		)	(2,200		)	(289		)
Reductions due to exit events	(143		)	(16		)	(539		)	(16		)
Reclassifications from nonaccretable differences	347			—			3,350			—
Ending balance	$	7,465		$	4,928		$	7,465		$	4,928

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 September 30, 2015	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	5,968	$	664	$	398	$	7,030	$	1,720,928	$	22,839	$	1,750,797
Construction:
Land acquisition & development	4,495		6,530		44		11,069		192,819		9,102		212,990
Residential	1,011		134		—		1,145		111,021		329		112,495
Commercial	—		—		—		—		92,792		983		93,775
Total construction loans	5,506		6,664		44		12,214		396,632		10,414		419,260
Residential	5,639		2,355		761		8,755		1,009,119		2,571		1,020,445
Agricultural	881		—		—		881		155,443		6,792		163,116
Total real estate loans	17,994		9,683		1,203		28,880		3,282,122		42,616		3,353,618
Consumer:
Indirect consumer	3,991		683		91		4,765		610,641		736		616,142
Other consumer	1,012		264		25		1,301		148,119		750		150,170
Credit card	402		325		518		1,245		64,391		13		65,649
Total consumer loans	5,405		1,272		634		7,311		823,151		1,499		831,961
Commercial	3,440		717		1,083		5,240		751,769		21,639		778,648
Agricultural	281		—		126		407		153,843		605		154,855
Other, including overdrafts	—		—		311		311		1,401		—		1,712
Loans held for investment	27,120		11,672		3,357		42,149		5,012,286		66,359		5,120,794
Mortgage loans originated for sale	—		—		—		—		55,686		—		55,686
Total loans	$	27,120	$	11,672	$	3,357	$	42,149	$	5,067,972	$	66,359	$	5,176,480

							Total Loans
	30 - 59		60 - 89		> 90		30 or More
	Days		Days		Days		Days		Current		Non-accrual		Total
As of December 31, 2014	Past Due		Past Due		Past Due		Past Due		Loans		Loans		Loans
Real estate
Commercial	$	4,692	$	1,609	$	331	$	6,632	$	1,605,421	$	27,369	$	1,639,422
Construction:
Land acquisition & development	839		383		—		1,222		210,969		8,252		220,443
Residential	—		475		—		475		95,833		272		96,580
Commercial	100		—		—		100		98,582		2,564		101,246
Total construction loans	939		858		—		1,797		405,384		11,088		418,269
Residential	6,969		645		1,762		9,376		987,735		2,792		999,903
Agricultural	1,624		236		—		1,860		158,957		6,842		167,659
Total real estate loans	14,224		3,348		2,093		19,665		3,157,497		48,091		3,225,253
Consumer:
Indirect consumer	3,235		482		6		3,723		548,757		383		552,863
Other consumer	988		140		32		1,160		142,432		549		144,141
Credit card	369		284		315		968		64,484		15		65,467
Total consumer loans	4,592		906		353		5,851		755,673		947		762,471
Commercial	3,659		994		147		4,800		722,575		12,698		740,073
Agricultural	1,125		—		—		1,125		123,288		446		124,859
Other, including overdrafts	—		—		—		—		3,959		—		3,959
Loans held for investment	23,600		5,248		2,593		31,441		4,762,992		62,182		4,856,615
Mortgage loans originated for sale	—		—		—		—		40,828		—		40,828
Total loans	$	23,600	$	5,248	$	2,593	$	31,441	$	4,803,820	$	62,182	$	4,897,443

Schedule of Recorded Investment in Impaired Loans

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

As of September 30, 2015	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	55,910	$	26,265	$	17,131	$	43,396	$	1,451
Construction:
Land acquisition & development	19,349		9,509		1,212		10,721		254
Residential	1,037		329		—		329		—
Commercial	1,290		369		740		1,109		740
Total construction loans	21,676		10,207		1,952		12,159		994
Residential	3,664		2,186		645		2,831		148
Agricultural	9,043		6,407		2,191		8,598		708
Total real estate loans	90,293		45,065		21,919		66,984		3,301
Commercial	28,653		10,315		13,461		23,776		5,154
Agricultural	2,043		367		1,106		1,473		462
Total	$	120,989	$	55,747	$	36,486	$	92,233	$	8,917

As of December 31, 2014	Unpaid Total Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Real estate:
Commercial	$	41,603	$	28,143	$	11,246	$	39,389	$	1,608
Construction:
Land acquisition & development	12,511		7,262		1,615		8,877		574
Residential	459		272		—		272		—
Commercial	2,729		253		2,442		2,695		904
Total construction loans	15,699		7,787		4,057		11,844		1,478
Residential	2,959		2,452		341		2,793		143
Agricultural	8,844		6,444		2,305		8,749		732
Total real estate loans	69,105		44,826		17,949		62,775		3,961
Commercial	16,904		11,882		2,644		14,526		1,190
Agricultural	1,231		342		837		1,179		641
Total	$	87,240	$	57,050	$	21,430	$	78,480	$	5,792

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

	Three Months Ended September 30,
	2015				2014
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	36,075	$	226	$	53,492	$	211
Construction:
Land acquisition & development	9,325		29		11,611		11
Residential	330		—		304		—
Commercial	2,339		4		2,709		2
Total construction loans	11,994		33		14,624		13
Residential	2,607		4		4,773		1
Agricultural	8,578		27		9,031		25
Total real estate loans	59,254		290		81,920		250
Commercial	22,483		2		14,252		14
Agricultural	937		13		906		6
Total	$	82,674	$	305	$	97,078	$	270

	Nine Months Ended September 30,
	2015				2014
	Average Recorded Investment		Income Recognized		Average Recorded Investment		Income Recognized
Real estate:
Commercial	$	38,639	$	587	$	57,743	$	668
Construction:
Land acquisition & development	9,591		51		13,529		33
Residential	300		—		799		—
Commercial	1,902		6		1,520		6
Total construction loans	11,793		57		15,848		39
Residential	2,720		6		5,537		4
Agricultural	8,661		62		10,223		54
Total real estate loans	61,813		712		89,351		765
Commercial	18,175		122		14,001		42
Agricultural	848		26		707		18
Total	$	80,836	$	860	$	104,059	$	825

Schedule of Loans Renegotiated in Troubled Debt Restructurings

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Three Months Ended September 30, 2015		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other (1)
Residential Construction	1	$	—	$	—	$	—	$	67	$	67
Indirect consumer	2	—		—		—		31		31
Commercial	8	—		8,744		2,959		463		12,166
Total loans restructured during period	11	$	—	$	8,744	$	2,959	$	561	$	12,264
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other          designated categories.

	Number of Notes	Type of Concession								Principal Balance at Restructure Date
Nine Months Ended September 30, 2015		Interest only period		Extension of terms or maturity		Interest rate adjustment		Other
Residential Construction	1	$	—	$	—	$	—	$	67	$	67
Indirect Consumer	2	—		—		—		31		31
Commercial	9	—		8,754		2,959		463		12,176
Total loans restructured during period	12	$	—	$	8,754	$	2,959	$	561	$	12,274
(1) Other includes concessions that reduce or defer payments for a specified period of time and/or do not fit into other          designated categories.

The Company considers a payment default to occur on troubled debt restructurings when the loan is 90 days or more past due or was placed on non-accrual status after the modification.

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
	Number of Notes	Balance		Number of Notes	Balance
Commercial Real Estate	—	$	—	1	$	1,745
Commercial	3	264		3	264
Total	3	$	264	4	$	2,009

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

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

As of September 30, 2015	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	76,483	$	86,047	$	5,095	$	167,625
Construction:
Land acquisition & development	14,928		16,137		630		31,695
Residential	1,230		2,219		27		3,476
Commercial	—		352		757		1,109
Total construction loans	16,158		18,708		1,414		36,280
Residential	6,016		12,117		645		18,778
Agricultural	8,549		16,095		612		25,256
Total real estate loans	107,206		132,967		7,766		247,939
Consumer:
Indirect consumer	774		1,180		164		2,118
Other consumer	687		928		307		1,922
Credit card	—		—		—		—
Total consumer loans	1,461		2,108		471		4,040
Commercial	43,384		21,213		15,638		80,235
Agricultural	3,106		7,558		672		11,336
Total	$	155,157	$	163,846	$	24,547	$	343,550

As of December 31, 2014	Other Assets Especially Mentioned		Substandard		Doubtful		Total Criticized Loans
Real estate:
Commercial	$	84,533	$	83,448	$	15,246	$	183,227
Construction:
Land acquisition & development	11,826		15,016		2,507		29,349
Residential	2,029		2,666		—		4,695
Commercial	39		253		2,442		2,734
Total construction loans	13,894		17,935		4,949		36,778
Residential	10,473		10,848		1,121		22,442
Agricultural	10,122		12,328		612		23,062
Total real estate loans	119,022		124,559		21,928		265,509
Consumer:
Indirect consumer	916		1,590		121		2,627
Other consumer	553		1,085		432		2,070
Credit card	—		348		1,263		1,611
Total consumer loans	1,469		3,023		1,816		6,308
Commercial	25,766		32,433		10,273		68,472
Agricultural	7,827		3,660		837		12,324
Total	$	154,084	$	163,675	$	34,854	$	352,613

XML

Investment Securities (Tables)

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

Amortized Cost and Approximate Fair Values of Investment Securities

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

September 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
U.S. Treasury notes	$	3,913	$	28	$	—		$	3,941
Obligations of U.S. government agencies	604,198		2,196		(350		)	606,044
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	917,025		15,314		(1,284		)	931,055
Private mortgage-backed securities	257		3		(2		)	258
Other investments	3,795		—		—			3,795
Total	$	1,529,188	$	17,541	$	(1,636	)	$	1,545,093

September 30, 2015	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to-Maturity:
State, county and municipal securities	$	176,569	$	5,471	$	(200	)	$	181,840
Corporate securities	50,178		186		(49		)	50,315
U.S agency residential mortgage-backed securities &     collateralized mortgage obligations	295,418		10,346		(3,665		)	302,099
Other investments	378		1		—			379
Total	$	522,543	$	16,004	$	(3,914	)	$	534,633

December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available-for-Sale:
Obligations of U.S. government agencies	$	725,408	$	895	$	(5,370	)	$	720,933
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	982,764		11,526		(3,624		)	990,666
Private mortgage-backed securities	322		5		(2		)	325
Total	$	1,708,494	$	12,426	$	(8,996	)	$	1,711,924

December 31, 2014	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Held-to-Maturity:
State, county and municipal securities	$	188,941	$	5,949	$	(386	)	$	194,504
Corporate securities	32,565		54		(75		)	32,544
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	353,176		5,563		(1,758		)	356,981
Other Investments	504		—		—			504
Total	$	575,186	$	11,566	$	(2,219	)	$	584,533

Realized Gains (Losses) on Investments

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	2015		2014			2015		2014
Gross realized gains	$	23	$	—		$	75	$	243
Gross realized losses	—		(8		)	—		(163		)

Gross Unrealized Losses and Fair Values of Investment Securities

The following tables show the gross unrealized losses and fair values of investment securities, aggregated by investment category, and the length of time individual investment securities have been in a continuous unrealized loss position, as of September 30, 2015 and December 31, 2014.

	Less than 12 Months					12 Months or More					Total
September 30, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	106,516	$	(85	)	$	131,365	$	(265	)	$	237,881	$	(350	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	25,664		(106		)	80,116		(1,178		)	105,780		(1,284		)
Private mortgage-backed securities	—		—			71		(2		)	71		(2		)
Total	$	132,180	$	(191	)	$	211,552	$	(1,445	)	$	343,732	$	(1,636	)

	Less than 12 Months					12 Months or More					Total
September 30, 2015	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	6,398	$	(26	)	$	10,493	$	(174	)	$	16,891	$	(200	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	14,834		(3,081		)	27,344		(584		)	42,178		(3,665		)
Corporate securities	15,042		(49		)	—		—			15,042		(49		)
Total	$	36,274	$	(3,156	)	$	37,837	$	(758	)	$	74,111	$	(3,914	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Available-for-Sale:
Obligations of U.S. government agencies	$	135,888	$	(702	)	$	309,283	$	(4,668	)	$	445,171	$	(5,370	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	219,214		(887		)	151,380		(2,737		)	370,594		(3,624		)
Private mortgage-backed securities	—		—			90		(2		)	90		(2		)
Total	$	355,102	$	(1,589	)	$	460,753	$	(7,407	)	$	815,855	$	(8,996	)

	Less than 12 Months					12 Months or More					Total
December 31, 2014	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Held-to-Maturity:
State, county and municipal securities	$	7,979	$	(13	)	$	20,097	$	(373	)	$	28,076	$	(386	)
U.S. agency residential mortgage-backed securities & collateralized mortgage obligations	61,201		(1,758		)	—		—			61,201		(1,758		)
Corporate securities	14,755		(75		)	—		—			14,755		(75		)
Total	$	83,935	$	(1,846	)	$	20,097	$	(373	)	$	104,032	$	(2,219	)

Maturities of Investment Securities

Maturities of investment securities at September 30, 2015 are shown below. Maturities of mortgage-backed securities have been adjusted to reflect shorter maturities based upon estimated prepayments of principal. All other investment securities maturities are shown at contractual maturity dates.

	Available-for-Sale				Held-to-Maturity
September 30, 2015	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Within one year	$	344,473	$	348,859	$	92,096	$	94,244
After one year but within five years	1,119,450		1,130,128		266,554		271,638
After five years but within ten years	56,054		56,755		120,530		123,839
After ten years	9,211		9,351		43,363		44,912
Total	$	1,529,188	$	1,545,093	$	522,543	$	534,633

XML

Legal Proceedings (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Pending Litigation | Kelly Logging Inc. v. First Interstate Bank
Loss Contingencies [Line Items]
Litigation Settlement, Expense	$ 5,000	$ 4,000

XML

Loans Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Deteriorated Loans Transferred in [Abstract]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield, Additions	$ 624	$ 5,233	$ 1,073	$ 5,233
Debt Securities, Accretable Yield Movement Schedule [Roll Forward]
Beginning Balance	7,482	0	5,781	0
Accretion Income	(845)	289	(2,200)	289
Reductions Due to Exit Events	143	16	(539)	16
Reclassifications from (to) nonaccretable differences	347	0	3,350	0
Ending Balance	$ 7,465	$ 4,928	$ 7,465	$ 4,928

XML

Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Schedule of Allowance for Loan Losses by Portfolio Segment

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

Three Months Ended September 30, 2015	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	53,935		$	5,828		$	15,797		$	992		$	—	$	76,552
Provision charged to operating expense	(1,149		)	430			2,004			(187		)	—		1,098
Less loans charged-off	(2,219		)	(1,537		)	(791		)	—			—		(4,547		)
Add back recoveries of loans previously    charged-off	389			653			111			—			—		1,153
Ending balance	$	50,956		$	5,374		$	17,121		$	805		$	—	$	74,256
Nine Months Ended September 30, 2015	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Beginning balance	$	53,884		$	5,035		$	14,307		$	974		$	—	$	74,200
Provision charged to operating expense	(1,718		)	2,201			3,220			(170		)	—		3,533
Less loans charged-off	(3,014		)	(3,675		)	(1,227		)	—			—		(7,916		)
Add back recoveries of loans previously    charged-off	1,804			1,813			821			1			—		4,439
Ending balance	$	50,956		$	5,374		$	17,121		$	805		$	—	$	74,256
As of September 30, 2015	Real Estate			Consumer			Commercial			Agriculture			Other		Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	3,301		$	—		$	5,154		$	462		$	—	$	8,917
Loans collectively evaluated for impairment	47,655			5,374			11,967			343			—		65,339
Allowance for loan losses	$	50,956		$	5,374		$	17,121		$	805		$	—	$	74,256
Total loans:
Individually evaluated for impairment	$	67,195		$	—		$	23,565		$	1,473		$	—	$	92,233
Collectively evaluated for impairment	3,342,109			831,961			755,083			153,382			1,712		5,084,247
Total loans	$	3,409,304		$	831,961		$	778,648		$	154,855		$	1,712	$	5,176,480

Three Months Ended September 30, 2014	Real Estate			Consumer			Commercial			Agriculture		Other			Total
Allowance for loan losses:
Beginning balance	$	57,312		$	5,347		$	14,986		$	621	$	—		$	78,266
Provision charged to operating expense	(3,839		)	423			3,598			67		12			261
Less loans charged-off	(147		)	(1,437		)	(4,678		)	—		(12		)	(6,274		)
Add back recoveries of loans previously    charged-off	999			495			484			—		—			1,978
Ending balance	$	54,325		$	4,828		$	14,390		$	688	$	—		$	74,231

Nine Months Ended September 30, 2014	Real Estate			Consumer			Commercial			Agriculture			Other			Total
Allowance for loan losses:
Beginning balance	$	63,923		$	6,193		$	14,747		$	476		$	—		$	85,339
Provision charged to operating expense	(9,225		)	191			2,032			250			12			(6,740		)
Less loans charged-off	(2,390		)	(3,217		)	(6,008		)	(64		)	(12		)	(11,691		)
Add back recoveries of loans previously    charged-off	2,017			1,661			3,619			26			—			7,323
Ending balance	$	54,325		$	4,828		$	14,390		$	688		$	—		$	74,231
As of December 31, 2014	Real Estate			Consumer			Commercial			Agriculture			Other			Total
Allowance for loan losses:
Loans individually evaluated for impairment	$	3,961		$	—		$	1,190		$	641		$	—		$	5,792
Loans collectively evaluated for impairment	49,923			5,035			13,117			333			—			68,408
Allowance for loan losses	$	53,884		$	5,035		$	14,307		$	974		$	—		$	74,200
Total loans:
Individually evaluated for impairment	$	62,775		$	—		$	14,526		$	1,179		$	—		$	78,480
Collectively evaluated for impairment	3,203,306			762,471			725,547			123,680			3,959			4,818,963
Total loans	$	3,266,081		$	762,471		$	740,073		$	124,859		$	3,959		$	4,897,443

XML

OREO (Tables)

9 Months Ended

Sep. 30, 2015

Repossessed Assets [Abstract]

Other Real Estate Owned Roll Forward

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Beginning balance	$	11,773		$	16,425		$	13,554		$	15,504
OREO acquired through acquisition	—			3,608			—			3,608
Additions	984			398			5,380			4,797
Valuation adjustments	(73		)	(77		)	(179		)	(87		)
Dispositions	(4,653		)	(1,858		)	(10,724		)	(5,326		)
Ending balance	$	8,031		$	18,496		$	8,031		$	18,496

Foreclosed residential real estate properties of $1,810 were included in other real estate owned as of September 30, 2015. The Company did not have any consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure as of September 30, 2015.

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 63,364	$ 61,625
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	3,533	(6,740)
Net (gain) loss on disposal of property and equipment	(822)	(68)
Depreciation and amortization	13,702	12,168
Net premium amortization on investment securities	11,527	10,784
Net gains on investment securities transactions	(75)	(80)
Net gains on sales of mortgage loans held for sale	(16,397)	(12,947)
Net gain on sale of OREO	(2,862)	(551)
Write-downs of OREO and other assets pending disposal	985	87
Net reversal of impairment of mortgage servicing rights	(147)	(117)
Deferred income tax expense	12,975	8,537
Net increase in cash surrender value of company-owned life insurance policies	(9,669)	(2,540)
Stock-based compensation expense	3,231	2,906
Tax benefits from stock-based compensation expense	979	1,541
Excess tax benefits from stock-based compensation	(884)	(1,503)
Originations of loans held for sale	(856,384)	(682,011)
Proceeds from sales of loans held for sale	865,833	676,061
Changes in operating assets and liabilities:
Increase in interest receivable	(3,962)	(2,749)
Increase in other assets	(4,766)	(1,585)
Decrease in accrued interest payable	(639)	22
Decrease in accounts payable and accrued expenses	(17,583)	1,321
Net cash provided by operating activities	61,939	64,161
Cash flows from investing activities:
Purchases of held-to-maturity investment securities	(28,745)	(10,431)
Purchases of available-for-sale investment securities	(253,049)	(322,838)
Proceeds from maturities and paydowns of held-to-maturity investment securities	80,759	29,432
Proceeds from maturities and paydowns of available-for-sale investment securities	450,462	398,383
Purchases of company-owned life insurance	(22,500)	(15,000)
Proceeds from sales of mortgage servicing rights	0	266
Extensions of credit to customers, net of repayments	(251,450)	(148,854)
Recoveries of loans charged-off	4,439	7,323
Proceeds from sales of OREO	13,586	5,877
Acquisition of bank and bank holding company, net of cash and cash equivalents received	1,636	(35,556)
Capital expenditures, net of sales	(2,236)	(6,599)
Net cash used in investing activities	(10,370)	(26,885)
Cash flows from financing activities:
Net increase (decrease) in deposits	(33,983)	310,370
Net increase (decrease) in repurchase agreements	(66,717)	(25,880)
Net increase (decrease) in other borrowed funds	1	(11,926)
Repayments of long-term debt	(1,297)	(35)
Advances on long-term debt	5,066	0
Proceeds from issuance of common stock	1,909	4,914
Excess tax benefits from stock-based compensation	884	1,503
Purchase and retirement of common stock	(20,548)	(9,736)
Dividends paid to common stockholders	(27,259)	(21,350)
Net cash provided by (used in) financing activities	(141,944)	247,860
Net increase (decrease) in cash and cash equivalents	(90,375)	285,136
Cash and cash equivalents at beginning of period	798,670	534,827
Cash and cash equivalents at end of period	708,295	819,963
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	27,335	21,100
Cash paid during the period for interest expense	$ 13,853	$ 13,049

XML

Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2015

Derivative [Line Items]

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

	September 30, 2015				December 31, 2014
	Notional Amount		Estimated Fair Value		Notional Amount		Estimated Fair Value
Derivatives designated as hedges:
Interest rate swap-liabilities	$	100,000	$	436	$	—	$	—
Non-hedging interest rate derivatives:
Interest rate swap-assets	9,456		918		3,149		61
Interest rate swap-liabilities	9,456		964		3,149		59

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]

	Three months ended				Nine months ended
	September 30, 2015		September 30, 2014		September 30, 2015		September 30, 2014
Derivatives designated as hedges:
Amount of loss recognized in other comprehensive income (effective portion)	$	436	$	—	$	436	$	—
Non-hedging interest rate derivatives:
Amount of loss recognized in other non-interest income	31		—		48		—

XML

Investment Securities Gross Unrealized Losses and Fair Values of Investment Securities (Details) $ in Thousands	Sep. 30, 2015 USD ($) securities	Dec. 31, 2014 USD ($) securities
Available-for-Sale:
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 132,180	$ 355,102
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(191)	(1,589)
Available-for-Sale, 12 Months or More Fair Value	211,552	460,753
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	(1,445)	(7,407)
Available-for-Sale, Total Fair Value	343,732	815,855
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(1,636)	(8,996)
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	36,274	83,935
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(3,156)	(1,846)
Held-to-Maturity, 12 Months or More Fair Value	37,837	20,097
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	(758)	(373)
Held-to-Maturity, Total Fair Value	74,111	104,032
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	$ (3,914)	$ (2,219)
Available-for-Sale and Held-to-Maturity:
Investment Securities in an Unrealized Loss Position (Number of Securities) | securities	113	154
Obligations of U.S. government agencies
Available-for-Sale:
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 106,516	$ 135,888
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(85)	(702)
Available-for-Sale, 12 Months or More Fair Value	131,365	309,283
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	(265)	(4,668)
Available-for-Sale, Total Fair Value	237,881	445,171
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(350)	(5,370)
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	25,664	219,214
Available-for-sale Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(106)	(887)
Available-for-Sale, 12 Months or More Fair Value	80,116	151,380
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	(1,178)	(2,737)
Available-for-Sale, Total Fair Value	105,780	370,594
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(1,284)	(3,624)
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	14,834	61,201
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(3,081)	(1,758)
Held-to-Maturity, 12 Months or More Fair Value	27,344	0
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	(584)	0
Held-to-Maturity, Total Fair Value	42,178	61,201
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(3,665)	(1,758)
State, county and municipal securities
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	6,398	7,979
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(26)	(13)
Held-to-Maturity, 12 Months or More Fair Value	10,493	20,097
Held-to-Maturity, 12 Months or More Gross Unrealized Losses	(174)	(373)
Held-to-Maturity, Total Fair Value	16,891	28,076
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(200)	(386)
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	71	90
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 months or Longer, Aggregate Loss1	(2)	(2)
Available-for-Sale, Total Fair Value	71	90
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Loss1	(2)	(2)
Corporate securities
Held-to-Maturity:
Held-to-Maturity, Less than 12 Months Fair Value	15,042	14,755
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less Than 12 months, Aggregate Loss1	(49)	(75)
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	15,042	14,755
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss1	$ (49)	$ (75)

XML

Capital Stock (Details) - USD ($) $ in Thousands		9 Months Ended
	Apr. 03, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Class of Stock [Line Items]
Payments for Repurchase of Common Stock		$ 20,548	$ 9,736
Class A Common Stock
Class of Stock [Line Items]
Common Stock, Shares, Outstanding		21,583,324		21,928,932
Stock Repurchased and Retired During Period, Shares		765,875	325,418
Payments for Repurchase of Common Stock		$ 19,921	$ 8,143
Stock Repurchase Program, Remaining Authorized Repurchase Amount		1,000,000
Class A Common Stock | 2015 Equity Compensation Plan
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	2,000,000
Class B Common Stock
Class of Stock [Line Items]
Common Stock, Shares, Outstanding		23,761,683		23,859,483

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 139,879	$ 147,894
Federal funds sold	2,263	543
Interest bearing deposits in banks	566,153	650,233
Total cash and cash equivalents	708,295	798,670
Investment securities:
Available-for-sale	1,545,093	1,711,924
Held-to-maturity (estimated fair values of $534,633 and $584,533 at September 30, 2015 and December 31, 2014, respectively)	522,543	575,186
Total investment securities	2,067,636	2,287,110
Loans held for investment	5,120,794	4,856,615
Mortgage loans held for sale	55,686	40,828
Total loans	5,176,480	4,897,443
Less allowance for loan losses	74,256	74,200
Net loans	5,102,224	4,823,243
Goodwill	204,409	205,574
Premises and equipment, net of accumulated depreciation	190,386	195,212
Company-owned life insurance	185,990	153,821
Other real estate owned (OREO)	8,031	13,554
Accrued interest receivable	31,590	27,063
Core deposit intangibles, net of accumulated amortization	11,425	13,282
Mortgage servicing rights, net of accumulated amortization and impairment reserve	15,336	14,038
Deferred tax asset, net	0	4,874
Other assets	79,208	73,495
Total assets	8,604,530	8,609,936
Deposits:
Non-interest bearing	1,832,535	1,791,364
Interest bearing	5,203,259	5,214,848
Total deposits	7,035,794	7,006,212
Securities sold under repurchase agreements	437,533	502,250
Accounts payable and accrued expenses	48,698	66,164
Accrued interest payable	5,327	5,833
Deferred tax liability	13,027	0
Long-term debt	43,089	38,067
Other borrowed funds	10	9
Subordinated debentures held by subsidiary trusts	82,477	82,477
Total liabilities	7,665,955	7,701,012
Stockholders' equity:
Nonvoting noncumulative preferred stock without par value; authorized 100,000 shares; no shares issued and outstanding as of September 30, 2015 or December 31, 2014	0	0
Common stock	309,167	323,596
Retained earnings	623,967	587,862
Accumulated other comprehensive income, net	5,441	(2,534)
Total stockholders' equity	938,575	908,924
Total liabilities and stockholders' equity	$ 8,604,530	$ 8,609,936

XML

Schedule of Recorded Investment in Past Due Loans by Class (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Mortgage loans held for sale	$ 55,686		$ 55,686		$ 40,828
Loans held for investment	5,120,794		5,120,794		4,856,615
Total loans	5,176,480		5,176,480		4,897,443
Interest Income on Non-Accrual Loans if Accrued	828	$ 992	2,331	$ 3,176
Commercial real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	7,030		7,030		6,632
Current Loans	1,720,928		1,720,928		1,605,421
Non-accrual Loans	22,839		22,839		27,369
Loans held for investment	1,750,797		1,750,797		1,639,422
Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	11,069		11,069		1,222
Current Loans	192,819		192,819		210,969
Non-accrual Loans	9,102		9,102		8,252
Loans held for investment	212,990		212,990		220,443
Residential construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,145		1,145		475
Current Loans	111,021		111,021		95,833
Non-accrual Loans	329		329		272
Loans held for investment	112,495		112,495		96,580
Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		100
Current Loans	92,792		92,792		98,582
Non-accrual Loans	983		983		2,564
Loans held for investment	93,775		93,775		101,246
Total construction loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	12,214		12,214		1,797
Current Loans	396,632		396,632		405,384
Non-accrual Loans	10,414		10,414		11,088
Loans held for investment	419,260		419,260		418,269
Residential real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	8,755		8,755		9,376
Current Loans	1,009,119		1,009,119		987,735
Non-accrual Loans	2,571		2,571		2,792
Loans held for investment	1,020,445		1,020,445		999,903
Agricultural real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	881		881		1,860
Current Loans	155,443		155,443		158,957
Non-accrual Loans	6,792		6,792		6,842
Loans held for investment	163,116		163,116		167,659
Total real estate loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	28,880		28,880		19,665
Current Loans	3,282,122		3,282,122		3,157,497
Non-accrual Loans	42,616		42,616		48,091
Loans held for investment	3,353,618		3,353,618		3,225,253
Indirect consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	4,765		4,765		3,723
Current Loans	610,641		610,641		548,757
Non-accrual Loans	736		736		383
Loans held for investment	616,142		616,142		552,863
Other consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,301		1,301		1,160
Current Loans	148,119		148,119		142,432
Non-accrual Loans	750		750		549
Loans held for investment	150,170		150,170		144,141
Credit card consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,245		1,245		968
Current Loans	64,391		64,391		64,484
Non-accrual Loans	13		13		15
Loans held for investment	65,649		65,649		65,467
Total consumer loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	7,311		7,311		5,851
Current Loans	823,151		823,151		755,673
Non-accrual Loans	1,499		1,499		947
Loans held for investment	831,961		831,961		762,471
Total loans	831,961		831,961		762,471
Commercial
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	5,240		5,240		4,800
Current Loans	751,769		751,769		722,575
Non-accrual Loans	21,639		21,639		12,698
Loans held for investment	778,648		778,648		740,073
Total loans	778,648		778,648		740,073
Agricultural
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	407		407		1,125
Current Loans	153,843		153,843		123,288
Non-accrual Loans	605		605		446
Loans held for investment	154,855		154,855		124,859
Other, including overdrafts
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	311		311		0
Current Loans	1,401		1,401		3,959
Non-accrual Loans	0		0		0
Loans held for investment	1,712		1,712		3,959
Loans held for investment
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	42,149		42,149		31,441
Current Loans	5,012,286		5,012,286		4,762,992
Non-accrual Loans	66,359		66,359		62,182
Loans held for investment	5,120,794		5,120,794		4,856,615
Mortgage loans originated for sale
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Current Loans	55,686		55,686		40,828
Non-accrual Loans	0		0		0
Total loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	42,149		42,149		31,441
Current Loans	5,067,972		5,067,972		4,803,820
Non-accrual Loans	66,359		66,359		62,182
Total loans	5,176,480		5,176,480		4,897,443
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	5,968		5,968		4,692
Financing Receivables, 30 to 59 Days Past Due [Member] | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	4,495		4,495		839
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,011		1,011		0
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		100
Financing Receivables, 30 to 59 Days Past Due [Member] | Total construction loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	5,506		5,506		939
Financing Receivables, 30 to 59 Days Past Due [Member] | Residential real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	5,639		5,639		6,969
Financing Receivables, 30 to 59 Days Past Due [Member] | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	881		881		1,624
Financing Receivables, 30 to 59 Days Past Due [Member] | Total real estate loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	17,994		17,994		14,224
Financing Receivables, 30 to 59 Days Past Due [Member] | Indirect consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	3,991		3,991		3,235
Financing Receivables, 30 to 59 Days Past Due [Member] | Other consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,012		1,012		988
Financing Receivables, 30 to 59 Days Past Due [Member] | Credit card consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	402		402		369
Financing Receivables, 30 to 59 Days Past Due [Member] | Total consumer loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	5,405		5,405		4,592
Financing Receivables, 30 to 59 Days Past Due [Member] | Commercial
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	3,440		3,440		3,659
Financing Receivables, 30 to 59 Days Past Due [Member] | Agricultural
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	281		281		1,125
Financing Receivables, 30 to 59 Days Past Due [Member] | Other, including overdrafts
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, 30 to 59 Days Past Due [Member] | Loans held for investment
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	27,120		27,120		23,600
Financing Receivables, 30 to 59 Days Past Due [Member] | Mortgage loans originated for sale
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, 30 to 59 Days Past Due [Member] | Total loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	27,120		27,120		23,600
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	664		664		1,609
Financing Receivables, 60 to 89 Days Past Due [Member] | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	6,530		6,530		383
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	134		134		475
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, 60 to 89 Days Past Due [Member] | Total construction loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	6,664		6,664		858
Financing Receivables, 60 to 89 Days Past Due [Member] | Residential real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	2,355		2,355		645
Financing Receivables, 60 to 89 Days Past Due [Member] | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		236
Financing Receivables, 60 to 89 Days Past Due [Member] | Total real estate loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	9,683		9,683		3,348
Financing Receivables, 60 to 89 Days Past Due [Member] | Indirect consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	683		683		482
Financing Receivables, 60 to 89 Days Past Due [Member] | Other consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	264		264		140
Financing Receivables, 60 to 89 Days Past Due [Member] | Credit card consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	325		325		284
Financing Receivables, 60 to 89 Days Past Due [Member] | Total consumer loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,272		1,272		906
Financing Receivables, 60 to 89 Days Past Due [Member] | Commercial
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	717		717		994
Financing Receivables, 60 to 89 Days Past Due [Member] | Agricultural
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, 60 to 89 Days Past Due [Member] | Other, including overdrafts
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, 60 to 89 Days Past Due [Member] | Loans held for investment
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	11,672		11,672		5,248
Financing Receivables, 60 to 89 Days Past Due [Member] | Mortgage loans originated for sale
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, 60 to 89 Days Past Due [Member] | Total loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	11,672		11,672		5,248
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	398		398		331
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Land acquisition & development construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	44		44		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial construction real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Total construction loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	44		44		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Residential real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	761		761		1,762
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Agricultural real estate
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Total real estate loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,203		1,203		2,093
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Indirect consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	91		91		6
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Other consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	25		25		32
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Credit card consumer
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	518		518		315
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Total consumer loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	634		634		353
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	1,083		1,083		147
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Agricultural
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	126		126		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Other, including overdrafts
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	311		311		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Loans held for investment
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	3,357		3,357		2,593
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Mortgage loans originated for sale
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	0		0		0
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Total loans
Loans and Leases Receivable Recorded Investment, Past Due [Line Items]
Total Loans 30 or More Days Past Due	$ 3,357		$ 3,357		$ 2,593

XML

Consolidated Statements of Changes in Stockholders Equity (Unaudited) - USD ($) $ in Thousands	Total	Common stock	Retained earnings	Accumulated other comprehensive income
Beginning Balance at Dec. 31, 2013	$ 801,581	$ 285,535	$ 532,087	$ (16,041)
Comprehensive income:
Net income	61,625	0	61,625	0
Other comprehensive income, net of tax	8,411	0	0	8,411
Common stock transactions:
Common shares purchased and retired 789,743 and 387,967 in 2015 and 2014, respectively	(9,736)	(9,736)	0	0
Stock Issued During Period, 21,414 and 1,402,811 in 2015 and 2014, respectively	35,972	35,972	0	0
Non-vested common shares issued 169,577 and 147,876 in 2015 and 2014 respectively	0	0	0	0
6,484 and 17,741 non-vested common shares forfeited in 2015 and 2014 respectively	0	0	0	0
158,828 and 372,880 stock options exercised, net of 58,996 and 166,780 shares tendered in payment of option price and income tax withholding amounts in 2015 and 2014 respectively	4,914	4,914	0	0
Tax benefit of stock-based compensation	1,541	1,541	0	0
Stock-based compensation expense	2,906	2,906	0	0
Cash dividends declared:
Common ($0.40 per share) in 2015 and ($0.32 per share) in 2014	(21,350)	0	(21,350)	0
Ending Balance at Sep. 30, 2014	885,864	321,132	572,362	(7,630)
Beginning Balance at Dec. 31, 2014	908,924	323,596	587,862	(2,534)
Comprehensive income:
Net income	63,364	0	63,364	0
Other comprehensive income, net of tax	7,975	0	0	7,975
Common stock transactions:
Common shares purchased and retired 789,743 and 387,967 in 2015 and 2014, respectively	(20,548)	(20,548)	0	0
Stock Issued During Period, 21,414 and 1,402,811 in 2015 and 2014, respectively	0	0	0	0
Non-vested common shares issued 169,577 and 147,876 in 2015 and 2014 respectively	0	0	0	0
6,484 and 17,741 non-vested common shares forfeited in 2015 and 2014 respectively	0	0	0	0
158,828 and 372,880 stock options exercised, net of 58,996 and 166,780 shares tendered in payment of option price and income tax withholding amounts in 2015 and 2014 respectively	1,909	1,909	0	0
Tax benefit of stock-based compensation	979	979	0	0
Stock-based compensation expense	3,231	3,231	0	0
Cash dividends declared:
Common ($0.40 per share) in 2015 and ($0.32 per share) in 2014	(27,259)	0	(27,259)	0
Ending Balance at Sep. 30, 2015	$ 938,575	$ 309,167	$ 623,967	$ 5,441