[LOGO] First Interstate BancSystem
Second Quarter 2003 EXHIBIT 99

To our shareholders,

We are excited to announce that First Interstate BancSystem achieved record earnings in second quarter 2003 of $10,235,000, or $1.30 per diluted share. This compares to $8,667,000, or $1.11 per diluted share in second quarter 2002. The return on average equity (ROAE) was 16.40% in second quarter 2003 compared to 15.29% in second quarter 2002. The return on average assets was 1.12% this past quarter compared to 1.06% in the same period last year. The efficiency ratio also improved, dropping to 65.58% in second quarter 2003, down from 67.96% in second quarter 2002.

The record results were in large part due to increased noninterest income. Noninterest income in the second quarter was $4,503,000 or 32%, higher than second quarter 2002. Due to historically low mortgage rates, revenue from residential real estate loans originated and sold on the secondary market was $4,685,000, a $2,826,000 increase over the comparable period in 2002. Our financial services group also reflected improvement as trust and brokerage revenue was $435,000 over second quarter 2002 as a result of the combination of improved equity market valuation and a continued emphasis on growing this business.

Net interest income of $35,667,000 was $1,056,000 more than the same period last year. Balance sheet growth was strong. Average loans grew $222,057,000, or 10.2%; while average deposits grew $266,942,000, or 9.9%. Excluding the Red Lodge acquisition, average loans and deposits were up 8.6% and 8.4%, respectively. Our net interest margin declined to 4.52% in second quarter, compared to 4.87% in second quarter 2002. This decline is due to the historically low interest rates and the limited ability to lower deposit rates. When compared to first quarter 2003, net interest margin increased 19 basis points. This margin improvement was the result of strong loan growth, the lower rate on the reissuance of $40,000,000 of trust preferred securities from fixed rate to variable rate, and the continual focus on managing net interest margin.

Noninterest expense was $2,489,000 or 7.5% higher than second quarter 2002. In second quarter 2003, we wrote off $1,936,000 of issuance costs due to the early redemption of $40,000,000 of 8.625% fixed rate trust preferred securities issued in 1997. The funds utilized in this redemption were obtained in a March 2003 variable rate trust preferred securities issuance of $40,000,000 at an initial rate of 4.41%.

Year to date net income of $19,072,000 exceeded the first six months of 2002 by $1,533,000, or 8.7%. Fully diluted earnings per share were $2.42, compared to $2.24 for the same period last year. Noninterest revenue was $9,134,000 more than year to date June 2002, primarily due to $4,673,000 increase in revenue from residential real estate loans originated and then sold on the secondary market, and a $1,319,000 increase in gain on sale of investment securities. Noninterest expense was $6,942,000 more than last year, primarily due to a $1,936,000 write off of trust preferred securities issuance costs and an increased impairment on mortgage servicing rights. We recorded a $2,716,000 impairment of

Financial Highlights
Three Months ended June 30

in thousands except per share data	2003		2002		% Change
(unaudited)
OPERATING RESULTS
Net income	$	10,235	$	8,667		18.1	%
Diluted earnings per share		1.30		1.11		17.1	%
Dividends per share		0.32		0.34		-5.9	%
PERIOD END BALANCES
Assets		3,740,286		3,305,281		13.2	%
Loans		2,464,953		2,207,280		11.7	%
Investment Securities		812,152		668,724		21.4	%
Deposits		3,039,482		2,722,370		11.6	%
Common Stockholders’ Equity		258,688		233,549		10.8	%
Common Shares Outstanding		7,852		7,806		0.6	%
QUARTERLY AVERAGES
Assets		3,657,364		3,272,311		11.8	%
Loans		2,400,155		2,178,098		10.2	%
Investment Securities		797,561		651,503		22.4	%
Deposits		2,954,413		2,687,471		9.9	%
Common Stockholders’ Equity		250,293		227,396		10.1	%
Common Shares Outstanding		7,861		7,814		0.6	%

mortgage servicing rights in 2003, compared to a $157,000 reversal of impairment last year through the second quarter.

Overall asset quality has remained stable. Provision for loan losses of .43% for both 2003 and 2002 year to date exceeds the net charge offs of .29% through June of 2003 compared to .22% for the same time period in 2002.

A dividend of $.32 per share was paid on July 15, 2003.

Establishing record earnings this past quarter is a testament to the talent and commitment of our employees, directors, and officers. While we look back and celebrate our past successes, our vision is fixed on the future. Although many challenges lay ahead, given our talented team, we believe we are well positioned for the future.

/s/ Lyle R. Knight	/s/ Terrill R. Moore
Lyle R. Knight	Terrill R. Moore
President	Chief Financial Officer
Chief Operating Officer

[LOGO] Second Quarter 2003

Condensed Consolidated Statements of Income (Unaudited)
(in thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30				June 30
	2003		2002		2003		2002
Total interest income	$	48,176	$	51,048	$	94,860	$	101,406
Total interest expense		12,509		16,437		26,403		33,297
Net interest income		35,667		34,611		68,457		68,109
Provision for loan losses		2,570		1,985		5,000		4,607
Net interest income after provision for loan losses		33,097		32,626		63,457		63,502
Noninterest income		18,444		13,941		36,236		27,102
Noninterest expense		35,484		32,995		70,056		63,114
Income before taxes		16,057		13,572		29,637		27,490
Income taxes		5,822		4,905		10,565		9,951
Net income	$	10,235	$	8,667	$	19,072	$	17,539
COMMON SHARE DATA:
Diluted EPS		1.30		1.11		2.42		2.24
Dividends		0.32		0.34		0.66		0.64
Book value						32.94		29.92
Tangible book value						27.64		25.02
Appraised value						*		45.00

*     Currently not available, $46.00 as of March 31, 2003

Selected Ratios (Unaudited)

	Three Months Ended						Six Months Ended
	June 30						June 30
	2003			2002			2003			2002
PERFORMANCE
Return on avg common equity		16.40	%		15.29	%		15.39	%		15.60	%
Return on avg common equity excl. market adj of securities		16.38	%		15.47	%		15.51	%		15.90	%
Return on avg assets		1.12	%		1.06	%		1.06	%		1.09	%
Net interest margin, FTE		4.52	%		4.87	%		4.43	%		4.82	%
Efficiency ratio		65.58	%		67.96	%		66.92	%		66.29	%
CREDIT QUALITY (Period End)
Annualized provision for loan losses to average loans								0.43	%		0.43	%
Annualized net charge offs to average loans								0.29	%		0.22	%
Allowance for loan losses to loans								1.55	%		1.65	%
Allowance for loan losses to non-accruing loans								149.47	%		142.19	%
CAPITAL ADEQUACY & LIQUIDITY
Leverage capital ratio								7.07	%		6.97	%
Avg loans to avg deposits								80.28	%		81.01	%

Condensed Consolidated Balance Sheet (Unaudited)
(In thousands)

			06/30/2003		06/30/2002
ASSETS
Cash and due from banks		$	228,278	$	214,505
Federal funds sold			6,765		42,195
Interest bearing deposits			741		4,863
Investment securities			812,152		668,724
Loans			2,464,953		2,207,280
	Less: allowance for loan losses		38,287		36,362
Net loans			2,426,666		2,170,918
Premises & equipment, net			105,080		92,895
Accrued interest receivable			20,869		23,504
Goodwill and core deposit intangibles			41,674		38,209
Other real estate owned, net			1,109		1,388
Other assets			96,952		48,080
	Total Assets	$	3,740,286	$	3,305,281
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits		$	3,039,482	$	2,722,370
Fed funds purchased			0		0
Securities sold under repurchase agreements			304,818		240,347
Other liabilities			36,889		36,243
Other borrowed funds			7,998		8,318
Long-term debt			52,411		24,454
Trust preferred securities			40,000		40,000
	Total Liabilities		3,481,598		3,071,732
Common stockholders’ equity			258,688		233,549
	Total Liabilities and Stockholders’ Equity	$	3,740,286	$	3,305,281