First Interstate Bancsystem, Inc. · NASDAQ:FIBK
First Interstate Bancsystem — Merger or Acquisition (September 2021)
28 slides from First Interstate Bancsystem's merger presentation, Sep 16, 2021
Slide 1: A Bridge to the Future
A BRIDGE TO THE FUTURE Creating the West’s premier banking franchise. + September 16, 2021
Slide 2: Forward-Looking Statements Safe Harbor
Forward-Looking Statements Safe Harbor 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 promulgat
Slide 3: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It 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 pro
Slide 4: Today's Presenters
Today’s Presenters Experienced Executive Management Team Kevin P. Riley President & Chief Executive Officer; First Interstate BancSystem, Inc. Marcy D. Mutch Executive Vice President & Chief Financial Officer; First Interstate BancSystem, Inc. Mark Borrecco President & Chief Executive Officer; Great
Slide 5: Strategic Rationale
$32B $27B Top 50 Top 15 Strategic Rationale Pro Forma Assets Pro Forma Deposits National Deposit Rank(2) Bank West of the Mississippi(2) Combines two like-minded companies with similar core values that will serve as our foundation 20% 1.2% 16% TBV Diversifies and expands our geographic reach, with l
Slide 6: Strategically Compelling
Strategically Compelling Firstinterstate -=BancSystem
Slide 7: Great Western Overview
Great Western Overview Branch Footprint Lines of Business Provides services to small and mid-sized businesses $6.1B Business across a diverse range of industries, offering a in commercial Sioux Falls, SD HQ range of financial products designed to meet their Banking deposits 174 Branches specific nee
Slide 8: Great Western Market Highlights
Great Western Market Highlights • Best city in America for young professionals • Located in state with #2 best tax climate in the U.S. Sioux Falls • #10 Best Place to Live in 2020 • # 6 best city to buy a house in America • Home to 5 Fortune 500 company headquarters • #25 best place to live Omaha •
Slide 9: Strong Financial Performer
Strong Financial Performer 1.50 1.81 1.34 1.02 1.25 Core ROAA (%) (1) (2) (0.74) 1.00 2014 2015 2016 2017 2018 2019 2020 MRQ 2.00 1.66 1.73 (2) 1.46 PPNR / ROAA (%) 1.50 1.22 1.00 2014 2015 2016 2017 2018 2019 2020 MRQ 3.58 4.00 3.09 NPA / Loans + OREO 2.00 0.60 0.60 (%) 0.00 2014 2015 2016 2017 201
Slide 10: Pro Forma Company Footprint
Pro Forma Company Footprint $32B $27B Top 50 Top 15 Pro Forma Deposits by State Pro Forma Top 10 MSAs Assets Deposits National Bank West of Pro Deposit Deposit Rank(1) the Mississippi(1) Forma Deposits Market MSA Rank ($B) Share (%) Montana 22% Billings, MT 1 $1.7 25.1% Omaha, NE 6 1.6 4.4 South Dak
Slide 11: Combined Loan Portfolio
Combined Loan Portfolio First Interstate Great Western Pro Forma Consumer Consumer Commercial & Consumer & Other Construction Commercial & Other & Other Industrial 11% 9% & Industrial 13% 15% 26% Construction 18% Commercial 5% Construction & Industrial Residential 12% Residential 22% R.E. R.E. 11% 6
Slide 12: Combined Deposit Mix
Combined Deposit Mix First Interstate Great Western Pro Forma Retail Time Retail Time Retail Time Deposits Deposits MMDA & Other Deposits MMDA & Other 5% MMDA & Other 5% Savings 5% Savings Jumbo Time Savings Jumbo Time 46% Jumbo Time 49% Deposits 41% Deposits Deposits 1% 2% 1% Deposit Portfolio $15.
Slide 13: Moving Into Larger, Wealthier & Stable Economic Markets
Moving Into Larger, Wealthier & Stable Economic Markets Number of Markets & Percent of Deposits In MSAs with Combined Footprint Maintains Lower Than National Populations >250k Average Unemployment > 250k 14% < 250k > 250k 43% 57% 7 14 Markets Markets < 250k 86% Median Household Income by MSA $69,132
Slide 14: Better Together: Synergy Opportunities
Better Together: Synergy Opportunities • Leverage GWB’s construction monitoring platform with our One-Time Close construction product to provide an efficient, client-centric offering Mortgage • Implement GWB’s mortgage loan origination system providing overall operational efficiencies Technology • L
Slide 15: Shared Values, Benefits for All Stakeholders
Shared Values, Benefits for All Stakeholders Shareholders Employees Clients Communities • ~20% EPS • Proven and • Expanded • Community accretion in 2023 experienced product offerings commitment leadership and branch demonstrated • Accretive to locations through corporate TBV/share and • Robust talen
Slide 16: Value Creation
Value Creation Firstinterstate -=BancSystem 16
Slide 17: Key Transaction Structure & Terms
Key Transaction Structure & Terms • Fixed exchange ratio of 0.8425x First Interstate shares for each Great Western share Consideration • 100% First Interstate Class A common stock • $35.65 per share of Great Western based on September 15, 2021 First Interstate closing price(1) Pricing & Ratios • 10.
Slide 18: Compelling Pro Forma Financial Impact
Compelling Pro Forma Financial Impact Pro Forma peers include all major exchange-traded banks headquartered Significant Upside in the Midwest / Northwest with assets between $20B and $50B 1.3% 1.2% 1.2% 1.2% ~20% ‘23 ROAA (%) v. Pro Forma Peers 0.9% 0.7% 0.7% 2023 EPS Accretion to First Interstate 1
Slide 19: Low Execution Risk
Low Execution Risk 19 Firstinterstate »BancSystem
Slide 20: M&A is a Core Skill Set for First Interstate
M&A is a Core Skill Set for First Interstate Absarokee Bancorporation, Inc. 2008 Expand into adjacent markets in 2015 2017 Expand into Idaho, Oregon, and Washington 2019 11 BRANCHES $725 MILLION 2022 170 BRANCHES $13 BILLION South Dakota 46 BRANCHES $3.2 BILLION 1968 Mr. Homer Scott establishes Firs
Slide 21: Loan Due Diligence & Risk Mitigation
Loan Due Diligence & Risk Mitigation Comprehensive Loan Due Diligence Conservative Credit Mark to Assist with Risk Mitigation 35+ First Interstate participants 3.75% 1.5x Scope of Loan Credit Mark GWB Reserves (2) Diligence 2,700+ $5.5B+ Great Western Great Western commercial loans loan commitments
Slide 22: Isolating & Addressing the Credit Issues
Isolating & Addressing the Credit Issues Percent of Mark Against PCD Portfolio All Other 38% Ag- Dairy Non-PCD 18% Ag Dairy 23% 86% 6.6% Ag Non-Dairy 18% PCD of Pro Forma 14% Hospitality 17% Portfolio Ag- Non- Healthcare 25% Healthcare Dairy 8% 15% All Other 20% Hospitality 21% PCD % PCD of GWB % of
Slide 23: Conservative PPNR & Cost Savings Assumptions
Conservative PPNR & Cost Savings Assumptions $224 ($40) 2023 GWB $6 $190 $0 Pre-Provision Net Revenue Contribution ($M) (1) (1) Consensus PPNR Net Interest Income Fee Income Non-Interest Expense Projected PPNR Contribution Net Cost Median: 28% Savings vs. 21% Recent M&A(2) Source: S&P Global Market
Slide 24: Transaction Detail
Transaction Detail Firstinterstate -=BancSystem 24
Slide 25: Key Financial Assumptions
Key Financial Assumptions • First Interstate’s earnings per Street consensus Earnings Projections • Great Western’s earnings per Street consensus(1) adjusted for de-risking initiatives Merger Costs • $140 million (pre-tax, assumes ~85% tax deductible), includes over $20 million charitable contributi
Slide 26: Estimated Earnings Per Share Impact
Estimated Earnings Per Share Impact 2023 Estimated Run-rate Earnings, Including Targeted Cost Savings ($M, except per share values) 2023E GWB Consensus Net Income Adjustment ($M) FIBK Stand-alone Net Inc ome Estimate $191.8 GW B Stand-alone Net Inc ome Estimate 160.3 $160 PPNR Adjustment Due to De-r
Slide 27: Tangible Book Value & TCE Impact
Tangible Book Value & TCE Impact Millions of $M TCE / TA basic shares $ per share FIBK equity as of June 30, 2021 $1,970.9 (-) Goodwill and other intangible assets (excluding mortgage servicing rights) ($695.7) FIBK tangible book value / TCE ratio as of June 30, 2021 $1,275.2 7.0% 62.2 $20.49 (+) Th
Slide 28: Thank you
Thank you Firstinterstate 5 BancSystem Member FDIC. Equal Housing Lender. Y
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