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Fitch Affirms First Interstate BancSystem, Inc. on Acquisition Announcement.

NEW YORK New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 -- Fitch Ratings Fitch Ratings

An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris.
 has affirmed the ratings for Billings, Montana-based First Interstate BancSystem First Interstate BancSystem, Inc., a financial holding company, and its primary banking subsidiary First Interstate Bank are based in Billings, Montana, USA.

The bank originated in 1968 as a single bank in Sheridan, Wyoming, and incorporated in Montana in 1971.
, Inc. (FIBS FIBS First Internet Backgammon Server
FIBS Federazione Italiana Baseball Softball
FIBS Finnish International Baccalaureate Society
) and its banking subsidiary, First Interstate Bank. The Rating Outlook remains Positive. A list of the company's ratings is provided at the end of this release.

FIBS recently announced its intent to acquire for $251.4 million two banking subsidiaries along with other assets other assets

Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately.
 of First Western Bancorp adding approximately $900 million in assets and community banking operations in western South Dakota. These new markets are contiguous to FIBS markets in Wyoming and provide added geographical diversity. Additionally, like FIBS, the First Western Banks enjoy a solid market share in their markets as well as a history of sound credit quality and strong earnings.

FIBS' capital levels, which have improved due to earnings retention, will be adversely impacted by the acquisition although the expected issuance of Tier 1 eligible instruments will help keep regulatory capital levels adequate. Tangible equity will fall below 5.00% of tangible assets although it should improve overtime due to earnings retention. Fitch recently revised FIBS Outlook to Positive. This acquisition may increase the length of time that FIBS remains on Positive Outlook allowing time to integrate this acquisition and for Fitch to assess the timeline for capital build and management of increased debt burden at the holding company. However, while there is integration risk as with all acquisitions, the strategic rationale and turnkey view of these two banks should provide for a low risk transaction.

Ratings Affirmed:

First Interstate BancSystem, Inc.

--Long-term Issuer Default Rating (IDR IDR

In currencies, this is the abbreviation for the Indonesian Rupiah.

The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion.
) 'BBB';

--Short-term IDR 'F2';

--Individual 'B/C';

--Support '5';

--Rating Floor 'NF';

Rating Outlook Positive.

First Interstate Bank

--Long-Term Deposits 'BBB+';

--Long-Term IDR 'BBB';

--Short-Term Deposits 'F2';

--Short-Term IDR 'F2';

--Individual 'B/C';

--Support '5';

--Rating Floor 'NF';

Rating Outlook Positive.

Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used.

In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide.
 of such ratings are available on the agency's public site, Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental  are also available from the 'Code of Conduct' section of this site.
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Publication:Business Wire
Date:Sep 21, 2007
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