Agreement Will Expand First Interstate’s
Footprint Into 8 New States, Creating the West’s Premier Banking
Franchise
First Interstate BancSystem, Inc. (NASDAQ: FIBK) (“FIBK”),
parent company of First Interstate Bank, and Great Western Bancorp,
Inc. (NYSE: GWB) (“GWB”), parent company of Great Western Bank,
announced today they have entered into a definitive agreement under
which the companies will combine in an all‐stock transaction.
Under the terms of the agreement, which was unanimously approved
by both companies’ Boards of Directors, GWB will merge into FIBK
and the combined holding company and bank will operate under the
First Interstate name and brand with the company’s headquarters
remaining in Billings, Montana. Pending regulatory and shareholder
approvals, the transaction is expected to close during the first
calendar quarter of 2022; the conversion of GWB branches to FIBK
branches is expected to take place during the second calendar
quarter of 2022.
The combined company leverages the strengths of both
organizations, creating a diversified, community-focused banking
franchise with a network of more than 300 branches across 14
states. With assets totaling over $32 billion, the pro forma
company establishes FIBK as the premier banking franchise in the
West.
“This is a transformative moment for our 53-year-old company,”
said FIBK President and CEO Kevin Riley. “The strategic and
cultural alignment between our organizations is what makes this
transaction so exciting, as we both pride ourselves on being
community banks with a strong focus on relationship building,
customer service, and community outreach. We are eager to expand
our community banking model into eight new states and look forward
to building relationships with the employees and clients who call
these beautiful regions home.”
Under the terms of the agreement, GWB shareholders will receive
.8425 shares of FIBK Class A common stock for each GWB share they
own. Following completion of the transaction, GWB shareholders will
collectively own 43% of the combined company. The implied total
transaction value based on closing prices on September 15, 2021 is
approximately $2.0 billion.
“We’re excited to join forces, and confident that both
companies’ stakeholders will benefit from this partnership,” said
Mark Borrecco, GWB President and CEO. “We’ll be able to offer
customers access to additional branch locations and new products
and services, provide new growth and professional development
opportunities to our employees, deliver additional returns to our
shareholders, and have an even greater impact on our
communities.”
In addition to maintaining a strong presence in GWB’s
headquarters of Sioux Falls, upon close of the transaction, five
directors from GWB will join the FIBK Board of Directors. FIBK’s
existing dual-class stock structure will sunset at the record date
of FIBK’s next annual shareholder meeting. At that time, existing
FIBK Class B common stock will be converted 1:1 into Class A common
stock and FIBK will no longer be a controlled company.
“Throughout our many years of ownership, we have prided
ourselves on the ability to stay true to our values and roots while
simultaneously adapting, innovating, and responding to the unique
needs of our clients and communities,” said Jim Scott, Director of
the Board for FIBK and son of First Interstate’s founders, Homer
Scott, Sr. and Mildred Scott. “This combination is an extension of
our legacy in the region where our family’s roots began. It
increases the Bank’s community commitment while expanding our brand
of community banking.”
The Scott family will remain significant shareholders in FIBK
and family members will continue to serve in Board positions
post-transaction. To punctuate the milestone moment for the Company
and to celebrate the Scott family’s legacy, as part this
transaction, FIBK has agreed to gift over $20 million to the First
Interstate BancSystem Foundation.
“Who First Interstate is as an organization and the successes
we’ve enjoyed are due in large part to the leadership, support, and
vision of Scott family members,” Riley said. “These funds will
ensure that our shared passion for giving back to the places we
call home not only continues in our existing communities but
extends into our new communities in meaningful and relevant
ways.”
Key Attractions of the Proposed Transaction
- Unique strategic position and enhanced platform for
growth: The combined franchise will operate in some of the
fastest growing markets in the U.S. with strong economic forecasts.
The footprint of the combined company spans an economically diverse
region with projected population growth above the national average
and unemployment rates below the national average.
- Compelling financial impacts: Under a conservative set
of assumptions, FIBK expects the transaction to be 20% accretive to
earnings per share in 2023, assuming the fully phased-in cost
synergies. The transaction is expected to be accretive to both
FIBK’s tangible book value per share and Tangible Common Equity to
Tangible Assets ratio.
- Enhanced leadership and bench strength: The experienced
talent pool at GWB enhances FIBK’s existing leadership portfolio
and creates more robust talent pipelines. Borrecco will join the
combined company as Chief Banking Officer (CBO), working closely
with FIBK’s current CBO, Russ Lee, to ensure a smooth transition.
Additional leaders from GWB will assume key positions throughout
the combined company.
- Shared commitment to local communities: Both companies
have been long recognized for their commitment to the communities
they serve. Over the past decade, FIBK, in collaboration with the
First Interstate BancSystem Foundation, has donated over $36
million and 143,000 volunteer hours to nonprofit organizations
across its footprint. In addition, FIBK has been awarded the
highest possible Community Reinvestment Act rating for nine of the
last 10 exam cycles. Post-transaction, FIBK will continue
contributing 2% of net income before taxes annually to charitable
giving within the communities it serves.
GWB expanded their commitment to the community in 2020, taking
it to a new level with programs such as Making Life Great grants,
COVID-19 relief, and Great Gifts of Gratitude awarded to local
heroes within its footprint. Through these programs, along with
giving to nonprofit organizations benefiting low to moderate income
individuals, GWB recently donated over $2 million while employees
averaged nearly 4.5 hours of volunteer time per team member.
Advisors
Keefe, Bruyette & Woods, A Stifel Company, served as lead
financial advisor to FIBK. Barclays also served as a financial
advisor to FIBK, and Davis Polk & Wardwell LLP served as FIBK’s
legal advisor.
Piper Sandler & Co. served as GWB’s exclusive financial
advisor and Wachtell, Lipton, Rosen & Katz served as legal
advisor to GWB.
Goldman Sachs & Co. LLC served as financial advisor and
Latham & Watkins LLP served as legal advisor to the Scott
Family FIBK Shareholder Group in connection with the
transaction.
Conference Call
FIBK and GWB management will review additional information
regarding the transaction during a live conference call beginning
at 11 a.m. Eastern Time on Thursday, September 16, 2021. A
presentation with information about the transaction can be accessed
on the Webcasts and Presentations page of fibk.com. The call may be
accessed by dialing 1-877-507-0356. To participate via the
Internet, log on to fibk.com. A replay will be available
approximately one hour after the end of the conference call by
dialing 1-877-344-7529. The replay access code is 10160269. The
call will also be archived on fibk.com.
About First Interstate BancSystem, Inc.
First Interstate BancSystem, Inc. is a financial services
holding company headquartered in Billings, Montana. It is the
parent company of First Interstate Bank, a community bank with
$18.9 billion in assets as of June 30, 2021. First Interstate
proudly delivers financial solutions across Idaho, Montana, Oregon,
South Dakota, Washington, and Wyoming. A recognized leader in
community banking services, First Interstate is driven by strong
values as well as a commitment to delivering a rewarding experience
to its employees, strong returns to shareholders, exceptional
products and services to its clients, and resources to the
communities it serves. More information is available at
www.firstinterstate.com.
About Great Western Bancorp, Inc.
Great Western Bancorp, Inc. is the holding company for Great
Western Bank, a full-service, $13 billion regional bank focused on
relationship-based business banking. Great Western Bank offers
small and mid-sized businesses a focused suite of financial
products and a range of deposit and loan products to retail
customers through several channels, including the branch network,
online banking system, mobile banking applications and customer
care centers. The bank services its customers through more than 170
branches in nine states: Arizona, Colorado, Iowa, Kansas,
Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. To
learn more about Great Western Bank, visit
www.greatwesternbank.com.
Cautionary Note Regarding Forward Looking Statements
This presentation contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Rule 175 promulgated thereunder, and Section 21E of
the Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder, which involve inherent risks and
uncertainties. Any statements about First Interstate BancSystem,
Inc.’s (“FIBK”), Great Western Bancorp, Inc.’s (“GWB”) or the
combined company’s 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 change
over time and could cause actual results to differ materially from
any results, performance, or events expressed or implied by such
forward-looking statements. Such forward-looking statements include
but are not limited to statements about the benefits of the
business combination transaction between FIBK and GWB (the
“Transaction”), including future financial and operating results,
the combined company’s plans, objectives, expectations and
intentions, and other statements that are not historical facts.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from those projected. In addition to factors previously disclosed
in FIBK’s and GWB’s reports filed with the U.S. Securities and
Exchange Commission (the “SEC”) and those identified elsewhere in
this document, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: the occurrence of any event, change, or
other circumstance that could give rise to the right of one or both
of the parties to terminate the definitive merger agreement between
FIBK and GWB; the outcome of any legal proceedings that may be
instituted against FIBK or GWB; the possibility that the
Transaction does not close when expected or at all because required
regulatory, shareholder, or other approvals and other conditions to
closing are not received or satisfied on a timely basis or at all
(and the risk that such approvals may result in the imposition of
conditions that could adversely affect the combined company or the
expected benefits of the Transaction); the risk that the benefits
from the Transaction may not be fully realized or may take longer
to realize than expected, including as a result of changes in, or
problems arising from, general economic and market conditions,
interest and exchange rates, monetary policy, laws and regulations
and their enforcement, and the degree of competition in the
geographic and business areas in which FIBK and GWB operate; the
ability to promptly and effectively integrate the businesses of
FIBK and GWB; the possibility that the Transaction may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; reputational risk and potential
adverse reactions of FIBK’s or GWB’s customers, employees or other
business partners, including those resulting from the announcement
or completion of the Transaction; the dilution caused by FIBK’s
issuance of additional shares of its capital stock in connection
with the Transaction; the diversion of management’s attention and
time from ongoing business operations and opportunities on
merger-related matters; and the impact of the global COVID-19
pandemic on FIBK’s or GWB’s businesses, the ability to complete the
Transaction or any of the other foregoing risks.
These factors are not necessarily all of the factors that could
cause FIBK’s, GWB’s or the combined company’s actual results,
performance, or achievements to differ materially from those
expressed in or implied by any of the forward-looking statements.
Other unknown or unpredictable factors also could harm FIBK’s,
GWB’s or the combined company’s results.
All forward-looking statements attributable to FIBK, GWB, or the
combined company, or persons acting on FIBK’s or GWB’s 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 FIBK and GWB 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 law. If
FIBK or GWB update one or more forward-looking statements, no
inference should be drawn that FIBK or GWB will make additional
updates with respect to those or other forward-looking statements.
Further information regarding FIBK, GWB and factors which could
affect the forward-looking statements contained herein can be found
in FIBK’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, its Quarterly Reports on Form 10-Q for the
three-month periods ended March 31, 2021 and June 30, 2021, and its
other filings with the SEC, and in GWB’s Annual Report on Form 10-K
for the fiscal year ended September 30, 2020, its Quarterly Reports
on Form 10-Q for the three-month periods ended December 31, 2020,
March 31, 2021 and June 30, 2021, and its other filings with the
SEC.
Additional Information about the Transaction and Where to
Find It
This communication is being made with respect to the proposed
transaction involving FIBK and GWB. This material is not a
solicitation of any vote or approval of GWB stockholders and is not
a substitute for the proxy statement/prospectus or any other
documents that GWB may send to stockholders in connection with the
proposed merger. This communication does not constitute an offer to
sell or the solicitation of an offer to buy any securities.
In connection with the Transaction, FIBK will file with the SEC
a Registration Statement on Form S-4 to register the shares of FIBK
capital stock to be issued in connection with the Transaction. The
Registration Statement will include a joint proxy statement of FIBK
and GWB that also constitutes a prospectus of FIBK. The definitive
joint proxy statement/prospectus will be sent to the shareholders
of FIBK and stockholders of GWB seeking their approval of the
Transaction and other related matters.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY
STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON
FORM S-4 WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR
INCORPORATED BY REFERENCE INTO THE JOINT PROXY
STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION REGARDING FIBK, GWB, THE TRANSACTION AND RELATED
MATTERS.
Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC by FIBK or GWB
through the website maintained by the SEC at http://www.sec.gov or
from FIBK at its website, www.fibk.com, or from GWB at its website,
www.greatwesternbank.com. Documents filed with the SEC by FIBK will
be available free of charge by accessing the “SEC Filings” page of
FIBK’s website at www.fibk.com/sec-filings, or alternatively by
directing a request by mail or telephone to First Interstate
BancSystem, Inc., 401 N. 31st Street, Billings, Montana, 59116,
Attention: John Stewart, Deputy Chief Financial Officer, telephone:
406-255-5311, and documents filed with the SEC by GWB will be
available free of charge by accessing GWB’s website at
www.greatwesternbank.com under the tab “Investor Relations” and
then under the heading “Financial Info – Documents” or,
alternatively, by directing a request by telephone or mail to Great
Western Bancorp Inc., 225 South Main Avenue, Sioux Falls, South
Dakota 57104, (605) 988-9253.
Participants in the Solicitation
FIBK, GWB, and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of FIBK and
stockholders of GWB in connection with the Transaction under the
rules of the SEC. Information about the interests of the directors
and executive officers of FIBK and GWB and other persons who may be
deemed to be participants in the solicitation of shareholders of
FIBK and stockholders of GWB in connection with the Transaction and
a description of their direct and indirect interests, by security
holdings or otherwise, will be included in the joint proxy
statement/prospectus related to the Transaction, which will be
filed with the SEC. Additional information about FIBK, the
directors and executive officers of FIBK and their ownership of
FIBK common stock is also set forth in the definitive proxy
statement for FIBK’s 2021 Annual Meeting of Shareholders, as filed
with the SEC on Schedule 14A on April 14, 2021, and other documents
subsequently filed by FIBK with the SEC. Additional information
about GWB, the directors and executive officers of GWB and their
ownership of GWB common stock can also be found in GWB’s definitive
proxy statement in connection with its 2021 Annual Meeting of
Stockholders, as filed with the SEC on December 23, 2020, and other
documents subsequently filed by GWB with the SEC. Free copies of
these documents may be obtained as described above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210916005420/en/
First Interstate BancSystem, Inc. John R. Stewart, CFA
Deputy Chief Financial Officer 406-255-5311 john.stewart@fib.com or
Great Western Bancorp, Inc. Seth Artz Head of Investor
Relations 605-988-9253 Seth.Artz@GreatWesternBank.com
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