<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year end December 31, 1998
------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------- ------------
Commission file number 333-3250
--------------------------------------
A. Savings and Profit Sharing Plan for Employees of First Interstate
BancSystem, Inc.
-----------------------------------------------------------------------
(Full title of the plan)
Same as below
-----------------------------------------------------------------------
(Address of the plan, if different from that of the issuer named below)
B. First Interstate BancSystem, Inc.
-----------------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
401 North 31st Street, P.O. Box 30918, Billings, Montana 59116-0918
-----------------------------------------------------------------------
(Address of issuer's principal executive office)
<PAGE>
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE
BANCSYSTEM, INC.
Financial Statements and Schedules
December 31, 1998 and 1997
(With Independent Auditors' Report Thereon)
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
TABLE OF CONTENTS
Independent Auditors' Report
Statements of Net Assets Available for Benefits - December 31, 1998 and 1997
Statement of Changes in Net Assets Available for Benefits - Years Ended
December 31, 1998 and 1997
Notes to Financial Statements
<TABLE>
<CAPTION>
Schedule
--------
<S> <C>
Line 27a - Schedule of Assets Held for Investment Purposes - December 31, 1998........... 1
Line 27d - Schedule of Reportable Transactions - Year Ended December 31, 1998............ 2
</TABLE>
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Administrative Committee of the
Savings and Profit Sharing Plan for Employees of
First Interstate BancSystem, Inc.:
We have audited the accompanying statements of net assets available for benefits
of the Savings and Profit Sharing Plan for Employees of First Interstate
BancSystem, Inc. as of December 31, 1998 and 1997, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Savings and
Profit Sharing Plan for Employees of First Interstate BancSystem, Inc. as of
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ KPMG LLP
June 4, 1999
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Statements of Net Assets Available for Benefits
December 31, 1998 and 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1998
----------------------------------------------------------------------------------------
GOLDMAN SACHS VANGUARD
FINANCIAL INTERMEDIATE -
SQUARE PRIME FEDERATED U.S. TERM COLUMBIA FIXED
OBLIGATIONS GOVERNMENT TREASURY INCOME
FI FUND FUND SECURITIES FUND FUND SECURITIES FUND
---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Cash $ -- -- -- -- --
Investments, at fair value 3,851 1,744,055 -- 1,851,871 2,268,290
Accrued interest and dividends -- 7,150 -- 8,678 33,111
Interfund transfers -- (222,786) -- (184,598) (162,252)
---------------- --------------- --------------- --------------- ---------------
Net assets available for benefits $ 3,851 1,528,419 -- 1,675,951 2,139,149
================ =============== =============== =============== ===============
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------------
FEDERATED
CAPITAL INVESCO NEUBERGER & FIDELITY
FEDERATED PRESERVATION INDUSTRIAL BERMAN CONTRAFUND,
GNMA TRUST FUND INCOME FUND GUARDIAN FUND INC.
---------------- --------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash -- -- -- -- --
Investments, at fair value 2,531,302 1,170,280 -- -- 2,207,868
Accrued interest and dividends 12,328 5,369 -- -- 173,373
Interfund transfers (145,799) (599) -- -- (25,454)
---------------- --------------- --------------- --------------- ----------------
Net assets available for benefits 2,397,831 1,175,050 -- -- 2,355,787
================ =============== =============== =============== ================
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------------
TWENTIETH
CENTURY HARBOR
BRANDYWINE INVESTMENTS INTERNATIONAL ACCESSOR
SEI INDEX FUND FUND, INC. (ULTRA FUND) FUND VALUE FUND
---------------- ---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash -- -- -- -- 174,783
Investments, at fair value 4,861,616 2,805,868 2,158,709 3,128,293 1,813,891
Accrued interest and dividends -- -- -- 242,070 3,728
Interfund transfers (46,271) 180,483 (28,724) 194,224 190,044
---------------- ---------------- --------------- --------------- ----------------
Net assets available for benefits 4,815,345 2,986,351 2,129,985 3,564,587 2,182,446
================ ================ =============== =============== ================
<CAPTION>
DECEMBER 31, 1998
-----------------------------------------------------------------------------------------
FRANKLIN
ACCESSOR SMALL CAP T. ROWE FIRST INTERSTATE
SMALL TO MID GROWTH PRICE EQUITY BANCSYSTEM,
CAP FUND FUND INCOME FUMD INC. STOCK LOAN FUND
---------------- ---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash 3,728 4,676 -- -- --
Investments, at fair value 1,406,782 332,489 2,796,934 15,569,169 99,221
Accrued interest and dividends 57,074 -- 15,757 -- --
Interfund transfers 153,884 39,197 58,651 -- --
---------------- ---------------- --------------- --------------- ----------------
Net assets available for benefits 1,621,468 376,362 2,871,342 15,569,169 99,221
================ ================ =============== =============== ================
<CAPTION>
DECEMBER 31, 1998
----------------
TOTAL
----------------
<S> <C>
Cash 183,187
Investments, at fair value 46,750,489
Accrued interest and dividends 558,638
Interfund transfers --
----------------
Net assets available for benefits 47,492,314
================
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------------------------
GOLDMAN SACHS VANGUARD
FINANCIAL INTERMEDIATE -
SQUARE PRIME FEDERATED U.S. TERM COLUMBIA FIXED
OBLIGATIONS GOVERNMENT TREASURY INCOME
FI FUND FUND SECURITIES FUND FUND SECURITIES FUND
---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Cash $ 4,151 -- -- -- --
Investments, at fair value 2,022,031 -- 1,743,346 -- 1,684,829
Receivables:
Employer contribution 18,553 -- 18,333 -- 17,615
Accrued interest and dividends 9,474 -- 7,779 -- 12,527
---------------- --------------- --------------- --------------- ---------------
Total receivables 28,027 -- 26,112 -- 30,142
---------------- --------------- --------------- --------------- ---------------
Interfund transfers 16,886 -- 132,372 -- 86,957
---------------- --------------- --------------- --------------- ---------------
Net assets available for benefits $ 2,071,095 -- 1,901,830 -- 1,801,928
================ =============== =============== =============== ===============
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------------------------------------------------------
FEDERATED
CAPITAL INVESCO NEUBERGER & FIDELITY
FEDERATED PRESERVATION INDUSTRIAL BERMAN CONTRAFUND,
GNMA TRUST FUND INCOME FUND GUARDIAN FUND INC.
---------------- --------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash -- -- 246,342 240,082 163,221
Investments, at fair value 1,497,817 1,174,933 2,106,498 1,546,703 1,841,831
Receivables:
Employer contribution 15,019 6,826 19,530 20,667 22,404
Accrued interest and dividends 7,621 5,700 438 -- --
---------------- --------------- --------------- --------------- ----------------
Total receivables 22,640 12,526 19,968 20,667 22,404
---------------- --------------- --------------- --------------- ----------------
Interfund transfers 91,071 513 (30,929) (85,301) (35,445)
---------------- --------------- --------------- --------------- ----------------
Net assets available for benefits 1,611,528 1,187,972 2,341,879 1,722,151 1,992,011
================ =============== =============== =============== ================
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------------------------------------------------------
TWENTIETH
CENTURY HARBOR
BRANDYWINE INVESTMENTS INTERNATIONAL ACCESSOR
SEI INDEX FUND FUND, INC. (ULTRA FUND) FUND VALUE FUND
---------------- ---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash 3 10 8 10 --
Investments, at fair value 3,535,705 2,984,046 1,546,718 3,633,033 --
Receivables:
Employer contribution 28,533 33,131 18,538 38,161 --
Accrued interest and dividends -- -- -- 130,204 --
---------------- ---------------- --------------- --------------- ----------------
Total receivables 28,533 33,131 18,538 168,365 --
---------------- ---------------- --------------- --------------- ----------------
Interfund transfers (47,197) (166,929) (24,534) 62,536 --
---------------- ---------------- --------------- --------------- ----------------
Net assets available for benefits 3,517,044 2,850,258 1,540,730 3,863,944 --
================ ================ =============== =============== ================
<CAPTION>
DECEMBER 31, 1997
-----------------------------------------------------------------------------------------
FRANKLIN
ACCESSOR SMALL CAP T. ROWE FIRST INTERSTATE
SMALL TO MID GROWTH PRICE EQUITY BANCSYSTEM,
CAP FUND FUND INCOME FUMD INC. STOCK LOAN FUND
---------------- ---------------- --------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
Cash -- -- -- -- --
Investments, at fair value -- -- -- 10,581,991 70,973
Receivables:
Employer contribution -- -- -- -- --
Accrued interest and dividends -- -- -- -- --
---------------- ---------------- --------------- --------------- ----------------
Total receivables -- -- -- -- --
---------------- ---------------- --------------- --------------- ----------------
Interfund transfers -- -- -- -- --
---------------- ---------------- --------------- --------------- ----------------
Net assets available for benefits -- -- -- 10,581,991 70,973
================ ================ =============== =============== ================
<CAPTION>
DECEMBER 31, 1997
----------------
TOTAL
----------------
<S> <C>
Cash 653,827
Investments, at fair value 35,970,454
Receivables:
Employer contribution 257,310
Accrued interest and dividends 173,743
----------------
Total receivables 431,053
----------------
Interfund transfers --
----------------
Net assets available for benefits 37,055,334
================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------------------------------------------------------------------
GOLDMAN SACHS VANGUARD
FINANCIAL INTERMEDIATE -
SQUARE PRIME FEDERATED U.S. TERM COLUMBIA FIXED
OBLIGATIONS GOVERNMENT TREASURY INCOME
FI FUND FUND SECURITIES FUND FUND SECURITIES FUND
---------------- ---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 26,571 65,146 -- 98,294 127,457
Net appreciation (depreciation) in
fair value of investments -- -- 810 36,343 18,333
---------------- ---------------- --------------- ---------------- ---------------
26,571 65,146 810 134,637 145,790
---------------- ---------------- --------------- ---------------- ---------------
Contributions:
Employee 23,792 53,527 -- 105,071 130,786
Employer 26,911 71,820 -- 122,497 150,501
Rollover 168 790 -- 20,175 20,883
---------------- ---------------- --------------- ---------------- ---------------
50,871 126,137 -- 247,743 302,170
---------------- ---------------- --------------- ---------------- ---------------
Total additions 77,442 191,283 810 382,380 447,960
Deductions from net assets attributed to -
benefits paid to participants (48,159) (32,900) (33,902) (30,208) (68,046)
---------------- ---------------- --------------- ---------------- ---------------
Net increase (decrease) prior
to interfund transfers 29,283 158,383 (33,092) 352,172 379,914
Interfund transfers (2,096,527) 1,370,036 (1,868,738) 1,323,779 (42,693)
---------------- ---------------- --------------- ---------------- ---------------
Net increase (decrease) (2,067,244) 1,528,419 (1,901,830) 1,675,951 337,221
Net assets available for benefits:
Beginning of year 2,071,095 -- 1,901,830 -- 1,801,928
---------------- ---------------- --------------- ---------------- ---------------
End of year $ 3,851 1,528,419 -- 1,675,951 2,139,149
================ ================ =============== ================ ===============
<CAPTION>
DECEMBER 31, 1998
----------------------------------------------------------------------------------------
FEDERATED
CAPITAL INVESCO NEUBERGER & FIDELITY
FEDERATED PRESERVATION INDUSTRIAL BERMAN CONTRAFUND,
GNMA TRUST FUND INCOME FUND GUARDIAN FUND INC.
--------------- ---------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 134,728 62,153 14,809 4,856 11,825
Net appreciation (depreciation) in
fair value of investments 7,548 -- 219,531 223,047 600,507
--------------- ---------------- ---------------- --------------- ---------------
142,276 62,153 234,340 227,903 612,332
--------------- ---------------- ---------------- --------------- ---------------
Contributions:
Employee 138,624 43,909 32,451 72,655 152,837
Employer 163,689 54,722 37,610 81,365 173,723
Rollover 4,234 64 -- 1,698 4,230
--------------- ---------------- ---------------- --------------- ---------------
306,547 98,695 70,061 155,718 330,790
--------------- ---------------- ---------------- --------------- ---------------
Total additions 448,823 160,848 304,401 383,621 943,122
Deductions from net assets attributed to -
benefits paid to participants (77,155) (45,876) (35,698) (71,507) (82,410)
--------------- ---------------- ---------------- --------------- ---------------
Net increase (decrease) prior
to interfund transfers 371,668 114,972 268,703 312,114 860,712
Interfund transfers 414,635 (127,894) (2,610,582) (2,034,265) (496,936)
--------------- ---------------- ---------------- --------------- ---------------
Net increase (decrease) 786,303 (12,922) (2,341,879) (1,722,151) 363,776
Net assets available for benefits:
Beginning of year 1,611,528 1,187,972 2,341,879 1,722,151 1,992,011
--------------- ---------------- ---------------- --------------- ---------------
End of year 2,397,831 1,175,050 -- -- 2,355,787
=============== ================ ================ =============== ===============
<CAPTION>
DECEMBER 31, 1998
----------------------------------------------------------------------------------------
TWENTIETH
CENTURY HARBOR
BRANDYWINE INVESTMENTS INTERNATIONAL ACCESSOR
SEI INDEX FUND FUND, INC. (ULTRA FUND) FUND VALUE FUND
--------------- --------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 93,874 23,486 110 48,870 183,890
Net appreciation (depreciation) in
fair value of investments 942,437 (8,497) 542,361 384,149 (226,736)
--------------- --------------- ---------------- ---------------- ---------------
1,036,311 14,989 542,471 433,019 (42,846)
--------------- --------------- ---------------- ---------------- ---------------
Contributions:
Employee 238,969 215,137 143,393 233,318 72,493
Employer 271,427 247,042 161,401 259,708 85,900
Rollover 56,478 4,571 3,660 5,780 2,799
--------------- --------------- ---------------- ---------------- ---------------
566,874 466,750 308,454 498,806 161,192
--------------- --------------- ---------------- ---------------- ---------------
Total additions 1,603,185 481,739 850,925 931,825 118,346
Deductions from net assets attributed to -
benefits paid to participants (148,772) (131,208) (77,154) (131,788) (13,556)
--------------- --------------- ---------------- ---------------- ---------------
Net increase (decrease) prior
to interfund transfers 1,454,413 350,531 773,771 800,037 104,790
Interfund transfers (156,112) (214,438) (184,516) (1,099,394) 2,077,656
--------------- --------------- ---------------- ---------------- ---------------
Net increase (decrease) 1,298,301 136,093 589,255 (299,357) 2,182,446
Net assets available for benefits:
Beginning of year 3,517,044 2,850,258 1,540,730 3,863,944 --
--------------- --------------- ---------------- ---------------- ---------------
End of year 4,815,345 2,986,351 2,129,985 3,564,587 2,182,446
=============== =============== ================ ================ ===============
<CAPTION>
DECEMBER 31, 1998
----------------------------------------------------------------------------------------
FRANKLIN
ACCESSOR SMALL CAP T. ROWE FIRST INTERSTATE
SMALL TO MID GROWTH PRICE EQUITY BANCSYSTEM,
CAP FUND FUND INCOME FUMD INC. STOCK LOAN FUND
--------------- --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 100,499 4,676 49,050 422,907 7,560
Net appreciation (depreciation) in
fair value of investments (86,206) (52,451) (65,546) 3,566,376 --
--------------- --------------- ---------------- ---------------- ----------------
14,293 (47,775) (16,496) 3,989,283 7,560
--------------- --------------- ---------------- ---------------- ----------------
Contributions:
Employee 80,819 30,022 125,880 -- --
Employer 93,244 29,390 146,589 -- --
Rollover 3,054 294 19,878 -- --
--------------- --------------- ---------------- ---------------- ----------------
177,117 59,706 292,347 -- --
--------------- --------------- ---------------- ---------------- ----------------
Total additions 191,410 11,931 275,851 3,989,283 7,560
Deductions from net assets attributed to -
benefits paid to participants (23,228) (2,523) (58,775) (249,542) (3,358)
--------------- --------------- ---------------- ---------------- ----------------
Net increase (decrease) prior
to interfund transfers 168,182 9,408 217,076 3,739,741 4,202
Interfund transfers 1,453,286 366,954 2,654,266 1,247,437 24,046
--------------- --------------- ---------------- ---------------- ----------------
Net increase (decrease) 1,621,468 376,362 2,871,342 4,987,178 28,248
Net assets available for benefits:
Beginning of year -- -- -- 10,581,991 70,973
--------------- --------------- ---------------- ---------------- ----------------
End of year 1,621,468 376,362 2,871,342 15,569,169 99,221
=============== =============== ================ ================ ================
<CAPTION>
DECEMBER 31, 1998
---------------
TOTAL
---------------
<S> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 1,480,761
Net appreciation (depreciation) in
fair value of investments 6,102,006
---------------
7,582,767
---------------
Contributions:
Employee 1,893,683
Employer 2,177,539
Rollover 148,756
---------------
4,219,978
---------------
Total additions 11,802,745
Deductions from net assets attributed to -
benefits paid to participants (1,365,765)
---------------
Net increase (decrease) prior
to interfund transfers 10,436,980
Interfund transfers --
---------------
Net increase (decrease) 10,436,980
Net assets available for benefits:
Beginning of year 37,055,334
---------------
End of year 47,492,314
===============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1997
---------------------------------------------------------------------------------------
GOLDMAN SACHS VANGUARD
FINANCIAL INTERMEDIATE -
SQUARE PRIME FEDERATED U.S. TERM COLUMBIA FIXED
OBLIGATIONS GOVERNMENT TREASURY INCOME
FI FUND FUND SECURITIES FUND FUND SECURITIES FUND
---------------- ---------------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 104,460 -- 85,123 -- 102,458
Net appreciation (depreciation) in
fair value of investments -- -- 8,843 -- 43,166
---------------- ---------------- --------------- ---------------- ---------------
104,460 -- 93,966 -- 145,624
---------------- ---------------- --------------- ---------------- ---------------
Contributions:
Employee 172,800 -- 197,310 -- 192,528
Employer 75,471 -- 75,500 -- 73,693
Rollover 104,799 -- 180,478 -- 182,504
---------------- ---------------- --------------- ---------------- ---------------
353,070 -- 453,288 -- 448,725
---------------- ---------------- --------------- ---------------- ---------------
Total additions 457,530 -- 547,254 -- 594,349
Deductions from net assets attributed to -
benefits paid to participants (63,135) -- (43,536) -- (44,695)
---------------- ---------------- --------------- ---------------- ---------------
Net increase (decrease) prior
to interfund transfers 394,395 -- 503,718 -- 549,654
Interfund transfers 98,891 -- 19,751 -- (52,686)
---------------- ---------------- --------------- ---------------- ---------------
Net increase (decrease) 493,286 -- 523,469 -- 496,968
Net assets available for benefits:
Beginning of year 1,577,809 -- 1,378,361 -- 1,304,960
---------------- ---------------- --------------- ---------------- ---------------
End of year $ 2,071,095 -- 1,901,830 -- 1,801,928
================ ================ =============== ================ ===============
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------------------------
FEDERATED
CAPITAL INVESCO NEUBERGER & FIDELITY
FEDERATED PRESERVATION INDUSTRIAL BERMAN CONTRAFUND,
GNMA TRUST FUND INCOME FUND GUARDIAN FUND INC.
--------------- ---------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 92,088 66,740 288,048 245,760 187,875
Net appreciation (depreciation) in
fair value of investments 27,399 -- 233,615 6,869 171,123
--------------- ---------------- ---------------- --------------- ---------------
119,487 66,740 521,663 252,629 358,998
--------------- ---------------- ---------------- --------------- ---------------
Contributions:
Employee 157,936 81,727 210,445 225,924 250,443
Employer 61,562 30,348 81,227 82,351 90,371
Rollover 120,161 18,321 127,278 138,237 177,414
--------------- ---------------- ---------------- --------------- ---------------
339,659 130,396 418,950 446,512 518,228
--------------- ---------------- ---------------- --------------- ---------------
Total additions 459,146 197,136 940,613 699,141 877,226
Deductions from net assets attributed to -
benefits paid to participants (64,366) (47,712) (132,279) (53,815) (56,807)
--------------- ---------------- ---------------- --------------- ---------------
Net increase (decrease) prior
to interfund transfers 394,780 149,424 808,334 645,326 820,419
Interfund transfers (48,557) (43,047) (329,318) (170,343) (166,178)
--------------- ---------------- ---------------- --------------- ---------------
Net increase (decrease) 346,223 106,377 479,016 474,983 654,241
Net assets available for benefits:
Beginning of year 1,265,305 1,081,595 1,862,863 1,247,168 1,337,770
--------------- ---------------- ---------------- --------------- ---------------
End of year 1,611,528 1,187,972 2,341,879 1,722,151 1,992,011
=============== ================ ================ =============== ===============
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------------------------
TWENTIETH
CENTURY HARBOR
BRANDYWINE INVESTMENTS INTERNATIONAL ACCESSOR
SEI INDEX FUND FUND, INC. (ULTRA FUND) FUND VALUE FUND
--------------- --------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 75,462 546,975 313,369 130,200 --
Net appreciation (depreciation) in
fair value of investments 841,324 (289,744) (55,141) 368,797 --
--------------- --------------- ---------------- ---------------- ---------------
916,786 257,231 258,228 498,997 --
--------------- --------------- ---------------- ---------------- ---------------
Contributions:
Employee 297,703 359,772 202,074 415,494 --
Employer 111,982 131,359 72,081 151,083 --
Rollover 140,450 170,132 123,327 209,863 --
--------------- --------------- ---------------- ---------------- ---------------
550,135 661,263 397,482 776,440 --
--------------- --------------- ---------------- ---------------- ---------------
Total additions 1,466,921 918,494 655,710 1,275,437 --
Deductions from net assets attributed to -
benefits paid to participants (205,238) (136,717) (43,617) (117,175) --
--------------- --------------- ---------------- ---------------- ---------------
Net increase (decrease) prior
to interfund transfers 1,261,683 781,777 612,093 1,158,262 --
Interfund transfers (347,353) (390,657) (7,098) (274,041) --
--------------- --------------- ---------------- ---------------- ---------------
Net increase (decrease) 914,330 391,120 604,995 884,221 --
Net assets available for benefits:
Beginning of year 2,602,714 2,459,138 935,735 2,979,723 --
--------------- --------------- ---------------- ---------------- ---------------
End of year 3,517,044 2,850,258 1,540,730 3,863,944 --
=============== =============== ================ ================ ===============
<CAPTION>
DECEMBER 31, 1997
----------------------------------------------------------------------------------------
FRANKLIN
ACCESSOR SMALL CAP T. ROWE FIRST INTERSTATE
SMALL TO MID GROWTH PRICE EQUITY BANCSYSTEM,
CAP FUND FUND INCOME FUMD INC. STOCK LOAN FUND
--------------- --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends -- -- -- 355,758 5,929
Net appreciation (depreciation) in
fair value of investments -- -- -- 1,712,367 --
--------------- --------------- ---------------- ---------------- ----------------
-- -- -- 2,068,125 5,929
--------------- --------------- ---------------- ---------------- ----------------
Contributions:
Employee -- -- -- -- --
Employer -- -- -- -- --
Rollover -- -- -- -- --
--------------- --------------- ---------------- ---------------- ----------------
-- -- -- -- --
--------------- --------------- ---------------- ---------------- ----------------
Total additions -- -- -- 2,068,125 5,929
Deductions from net assets attributed to -
benefits paid to participants -- -- -- (130,298) (23,284)
--------------- --------------- ---------------- ---------------- ----------------
Net increase (decrease) prior
to interfund transfers -- -- -- 1,937,827 (17,355)
Interfund transfers -- -- -- 1,694,288 16,348
--------------- --------------- ---------------- ---------------- ----------------
Net increase (decrease) -- -- -- 3,632,115 (1,007)
Net assets available for benefits:
Beginning of year -- -- -- 6,949,876 71,980
--------------- --------------- ---------------- ---------------- ----------------
End of year -- -- -- 10,581,991 70,973
=============== =============== ================ ================ ================
<CAPTION>
DECEMBER 31, 1997
---------------
TOTAL
---------------
<S> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends 2,600,245
Net appreciation (depreciation) in
fair value of investments 3,068,618
---------------
5,668,863
---------------
Contributions:
Employee 2,764,156
Employer 1,037,028
Rollover 1,692,964
---------------
5,494,148
---------------
Total additions 11,163,011
Deductions from net assets attributed to -
benefits paid to participants (1,162,674)
---------------
Net increase (decrease) prior
to interfund transfers 10,000,337
Interfund transfers --
---------------
Net increase (decrease) 10,000,337
Net assets available for benefits:
Beginning of year 27,054,997
---------------
End of year 37,055,334
===============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
December 31, 1998 and 1997
(1) DESCRIPTION OF THE PLAN
The following description of the Savings and Profit Sharing Plan for
Employees of First Interstate BancSystem, Inc. (Plan) provides only
general information. Participants should refer to the Plan agreement for a
more complete description of the Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan covering all employees of the
First Interstate BancSystem, Inc.'s (the Company) member banks [see
note (1)(g)] who have one year of service and have completed at least
1,000 hours of service. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
(B) CONTRIBUTIONS
Employees may elect to contribute up to 15% of their compensation.
Participants may also contribute amounts representing distributions
from other qualified defined benefit or contribution plans.
The employer is required to make a matching contribution equal to
125% of the first 4% contributed by the employee. The member banks
may also, at the sole discretion of the Board of Directors, make a
profit sharing contribution on behalf of eligible employees.
(C) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's and
allocations of the Company's contributions and Plan earnings.
Allocations are based on participant earnings, account balances or
compensation, as defined.
(D) VESTING
All participants are 100% vested in the employee and employer
contributions plus actual earnings thereon.
(E) INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct contributions
in any of the following investment options:
GOLDMAN SACHS FINANCIAL SQUARE PRIME OBLIGATIONS FUND - Funds are
invested in securities of the U.S. Government, its agencies,
authorities and instrumentalities, obligations of U.S. bonds,
commercial paper and other short-term obligations of U.S.
companies, states, municipalities and other entities, and
repurchase agreements.
VANGUARD INTERMEDIATE - TERM TREASURY FUND - Funds are invested
in fixed income securities.
COLUMBIA FIXED INCOME SECURITIES FUND - Funds are invested in a
broad range of investment-grade, fixed income securities with
intermediate- to long-term maturities.
1
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
FEDERATED GNMA TRUST - Funds are invested primarily in
instruments issued or guaranteed by the Government National
Mortgage Association.
FEDERATED CAPITAL PRESERVATION FUND - Funds are invested
primarily in guaranteed investment contracts issued by
highly-rated U.S. and Canadian insurance companies.
FIDELITY CONTRAFUND, INC. - Funds are invested in common stock
and securities convertible into common stock.
SEI INDEX FUND - Funds are invested in a diversified portfolio of
securities to provide investment results that correspond to the
aggregate price and dividend performance of the securities in the
Standard and Poor's 500 Composite Stock Price Index.
BRANDYWINE FUND, INC. - Funds are invested in a variety of common
stocks to produce long-term capital appreciation.
TWENTIETH CENTURY INVESTMENTS (ULTRA FUND) - Funds are invested
in securities of medium- and small-sized companies.
HARBOR INTERNATIONAL FUND - Funds are invested in non-U.S.
equity securities.
ACCESSOR VALUE FUND - Funds are invested in income-producing
equity securities selected from the S&P 500.
ACCESSOR SMALL TO MID CAP FUND - Funds are invested in equity
securities of small to medium capitalization issuers.
FRANKLIN SMALL CAP GROWTH FUND - Funds are invested in equity
securities of small capitalization growth companies.
T. ROWE PRICE EQUITY INCOME FUND - Funds are invested in U.S.
common stocks.
A participant may not contribute to, but may direct transfers from
any investment, into the following investment option:
FIRST INTERSTATE BANCSYSTEM, INC. STOCK - Funds are invested in
First Interstate BancSystem, Inc. stock (Company Stock). A
participant's investment in Company Stock is limited to 50% of
the participant's account balance, as defined.
As of December 31, 1998 and 1997, plan assets invested in Company
Stock were 33% and 29% of net assets available for benefits,
respectively.
(F) PAYMENT OF BENEFITS
On termination of service due to death, disability or retirement, a
participant may elect to receive a lump-sum amount equal to the value
of the participant's vested interest in his or her account or a
series of annual installments over a period of up to ten years. For
termination of service due to other reasons, a participant may
receive the value of the vested interest in his or her account as a
lump sum distribution.
2
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
(G) MEMBERS OF PLAN
Members of the Plan include First Interstate BancSystem, Inc. and the
following subsidiaries:
- First Interstate Bank in Montana
- First Interstate Bank in Wyoming
- Commerce Financial, Inc.
- FIB Capital Trust
(2) SUMMARY OF ACCOUNTING POLICIES
(A) BASIS OF ACCOUNTING
The financial statements of the Plan are prepared using the accrual
method of accounting.
(B) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
(C) INVESTMENTS
Investment assets, with the exception of the Company Stock, are
valued at their quoted market prices. Company Stock is valued based
on an independent appraisal prepared by Alex Sheshunoff & Co.
Investment Banking. The appraised fair market value of a share of
Company stock was $33 and $25 at September 30, 1998 and 1997,
respectively.
Purchases and sales of investments are recorded on a trade-date
basis. Interest income is recorded on the accrual basis.
(D) PAYMENT OF BENEFITS
Benefits are recorded when paid.
3
<PAGE>
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
(3) INVESTMENTS
The Plan's investments are held in trust by the Trust Financial Services
Division of First Interstate Bank in Montana. The following table presents
the fair values of investments, as determined by quoted market price or
appraisal, as of December 31:
<TABLE>
<CAPTION>
1998 1997
-------------------------- -------------------------
NUMBER OF NUMBER OF
SHARES OR SHARES OR
PRINCIPAL PRINCIPAL
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investments at estimated fair value as
determined by quoted market price:
FI Fund 3,851 $ 3,851 2,022,031 $ 2,022,031
Goldman Sachs Financial
Square Prime Obligations 1,744,055 1,744,055 - -
Fund
Federated U.S. Government
Securities Fund - - 167,629 1,743,346
Vanguard Intermediate - Term
Treasury Fund 166,236 1,851,871 - -
Columbia Fixed Income
Securities Fund 169,032 2,268,290 125,546 1,684,829
Federated GNMA Trust 222,630 2,531,302 132,199 1,497,817
Federated Capital 117,028 1,170,280 117,493 1,174,933
Preservation Fund
Invesco Industrial Income Fund - - 141,281 2,106,498
Neuberger & Berman Guardian - - 59,718 1,546,703
Fund
Fidelity Contrafund Inc. 38,960 2,207,868 39,499 1,841,831
SEI Index Fund 126,472 4,861,616 115,357 3,535,705
Brandywine Fund, Inc. 92,664 2,805,868 96,602 2,984,046
Twentieth Century Investments
(Ultra Fund) 64,613 2,158,709 56,656 1,546,718
Harbor International Fund 85,193 3,128,293 101,312 3,633,033
Accessor Value Fund 86,212 1,813,891 - -
Accessor Small to Mid Cap Fund 60,119 1,406,782 - -
Franklin Small Cap Growth Fund 14,731 332,489 - -
T. Rowe Price Equity Income 106,267 2,796,934 - -
Fund
Loan Fund 99,221 99,221 70,973 70,973
Investments at estimated fair
value as determined by appraisal:
First Interstate BancSystem, 471,793 15,569,169 427,728 10,581,991
Inc. Stock
------------ ------------ ----------- ------------
3,669,077 $ 46,750,489 3,674,024 $ 35,970,454
============ ============ =========== ============
</TABLE>
(4) PARTICIPANT LOANS
Participant loans are limited to lesser of (a) 50% of the participant's
vested account balance or (b) $50,000, reduced by the excess, if any, of
(i) the participant's highest outstanding loan balance during the previous
year, over (ii) the participant's outstanding loan balance on the date the
loan is made. Loan terms shall not exceed the earlier of (a) 15 years if
the loan is for the purchase of a principal residence of the borrower, (b)
5 years for all other loans, or (c) upon termination of employment of the
borrower. The loans are secured by the balance in the participant's
account and bear a rate of interest which is commensurate with the
interest rates being charged at the time such loan is made under similar
circumstances by financial institutions in the community in which the
Company's principal office is then located. Interest rates on the
participant loans outstanding at December 31, 1998 ranged from 7.00% to
9.75%. Principal and interest is paid ratably through monthly payroll
deductions.
(Continued)
4
<PAGE>
(5) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
(6) TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated January 9, 1998 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is designed and is
currently being operated in compliance with the applicable requirements of
the IRC.
(7) ADMINISTRATIVE EXPENSES
The Trust Financial Services Division of First Interstate Bank in Montana
holds the Plan's assets in trust and performs the recordkeeping for the
Plan. The administrative fees related to these services performed for the
Plan are paid by the Company.
(8) FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of each class of the Plan's financial instruments:
INVESTMENTS. See Note 2(c) regarding investment valuation.
PARTICIPANT LOANS. The carrying amounts approximate fair value because
of the short maturity of those instruments and the rates of interest
associated with payments under the agreements approximate the current
borrowing rates available to participants for agreements with similar
characteristics.
5
<PAGE>
SCHEDULE 1
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
Description of investment
Identity of issue, including maturity date,
borrower, lessor rate of interest, collateral, Current
Or similar party par or maturity value Cost value
----------------- ----------------------------- ---- -------
<S> <C> <C> <C>
Fidelity Investments FI Fund $ 3,851 3,851
Goldman Sachs and Co. Goldman Sachs Financial Square
Prime Obligations Fund 1,744,055 1,744,055
The Vanguard Group Vanguard Intermediate - Term
Treasury Fund 1,810,744 1,851,871
Columbia Funds Columbia Fixed Income Securities
Fund 2,239,817 2,268,290
Federated Securities Corp. Federated GNMA Trust 2,553,146 2,531,302
Federated Bank & Trust Federated Capital Preservation Fund 1,263,355 1,170,280
Fidelity Investments Fidelity Contrafund, Inc. 1,778,444 2,207,868
Financial Services Company SEI Index Fund 3,273,821 4,861,616
Brandywine Fund, Inc. Brandywine Fund, Inc. 3,041,182 2,805,868
American Century Twentieth Century Investments
(Ultra Fund) 1,922,319 2,158,709
Harbor Fund Harbor International Fund 2,816,166 3,128,293
Accessor Capital Management LP Accessor Value Fund 2,025,373 1,813,891
Accessor Capital Management LP Accessor Small to Mid Cap Fund 1,485,477 1,406,782
Franklin Templeton Franklin Small Cap Growth Fund 368,231 332,489
T. Rowe Price T. Rowe Price Equity Income Fund 2,985,076 2,796,934
First Interstate BancSystem, Inc.* Common stock of First
Interstate BancSystem, Inc. 9,379,707 15,569,169
Savings and Profit Sharing Plan Loans to plan participants
for Employees of First Interstate
BancSystem, Inc. 99,221 99,221
------------ ----------
$ 38,789,985 46,750,489
============ ==========
</TABLE>
(* - party in interest to the Plan)
See accompanying independent auditors' report.
<PAGE>
SCHEDULE 2
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Line 27d - Schedule of Reportable Transactions
Year Ended December 31, 1998
<TABLE>
<CAPTION>
EXPENSE
IDENTITY OF INCURRED WITH
PARTY INVOLVED DESCRIPTION OF ASSET PURCHASE PRICE SELLING PRICE LEASE RENTAL TRANSACTION
-------------- -------------------- ---------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Accessor Capital Accessor Value Fund $ 2,178,859 -- -- --
Management LP
Accessor Capital Accessor Value Fund 166,727 138,233 -- --
Management LP
Fidelity Investments FI Fund 1,352,197 -- -- --
Fidelity Investments FI Fund 3,374,228 3,374,228 -- --
First Interstate Common stock of First Interstate
BancSystem, Inc. BancSystem, Inc. 1,679,648 -- -- --
First Interstate Common stock of First Interstate
BancSystem, Inc. BancSystem, Inc. 211,729 258,846 -- --
Goldman Sachs & Co. Goldman Sachs Financial Square 2,611,062 -- -- --
Prime Obligations Fund
Goldman Sachs & Co. Goldman Sachs Financial Square 867,007 867,007 -- --
Prime Obligations Fund
Invesco Funds Invesco Industrial Income Fund 342,100 -- -- --
Invesco Funds Invesco Industrial Income Fund 2,448,598 2,668,136 -- --
Neuberger & Berman Neuberger & Berman Guardian Fund 457,971 -- -- --
Management, Inc.
Neuberger & Berman Neuberger & Berman Guardian Fund 2,004,674 2,227,713 -- --
Management, Inc.
Financial Services Co. SEI Index Fund 1,326,697 -- -- --
Financial Services Co. SEI Index Fund 846,906 943,140 -- --
T. Rowe Price T. Rowe Price Equity Income Fund 3,432,098 -- -- --
T. Rowe Price T. Rowe Price Equity Income Fund 460,076 433,777 -- --
The Vanguard Group Vanguard Intermediate - Term 2,250,181 -- -- --
Treasury Fund
The Vanguard Group Vanguard Intermediate - Term 441,685 434,651 -- --
Treasury Fund
Harbor Fund Harbor International Fund 745,171 -- -- --
Harbor Fund Harbor International Fund 1,298,859 1,440,653 -- --
<CAPTION>
CURRENT VALUE
OF ASSET ON
IDENTITY OF TRANSACTION NET
PARTY INVOLVED COST OF ASSET DATE GAIN (LOSS)
-------------- ---------------- --------------- ---------------
<S> <C> <C> <C>
Accessor Capital 2,178,859 2,178,859 --
Management LP
Accessor Capital 166,727 138,233 (28,495)
Management LP
Fidelity Investments 1,352,197 1,352,197 --
Fidelity Investments 3,374,228 3,374,228 --
First Interstate
BancSystem, Inc. 1,679,648 1,679,648 --
First Interstate
BancSystem, Inc. 211,729 258,846 47,117
Goldman Sachs & Co. 2,611,062 2,611,062 --
Goldman Sachs & Co. 867,007 867,007 --
Invesco Funds 342,100 342,100 --
Invesco Funds 2,448,598 2,668,136 219,538
Neuberger & Berman 457,971 457,971 --
Management, Inc.
Neuberger & Berman 2,004,674 2,227,713 223,039
Management, Inc.
Financial Services Co. 1,326,697 1,326,697 --
Financial Services Co. 846,906 943,140 96,234
T. Rowe Price 3,432,098 3,432,098 --
T. Rowe Price 460,076 433,777 (26,299)
The Vanguard Group 2,250,181 2,250,181 --
The Vanguard Group 441,685 434,651 (7,034)
Harbor Fund 745,171 745,171 --
Harbor Fund 1,298,859 1,440,653 141,794
</TABLE>
See accompanying independent auditors' report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF FIRST INTERSTATE
BANCSYSTEM, INC.
JUNE 29, 1999 /s/ RICHARD C. FELLOWS
- ------------------------------------- ---------------------------------
Date Richard C. Fellows
Senior Vice President
<PAGE>
FIRST INTERSTATE BANCSYSTEM, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Document
- ------- --------
<S> <C>
23.1 Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants.
</TABLE>
<PAGE>
[LETTERHEAD]
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Directors and Stockholders
First Interstate BancSystem, Inc.
We consent to incorporation by reference in the registration statement on Form
S-8 of our report dated June 4, 1999 relating to the statements of net assets
available for benefits of the Savings and Profit Sharing Plan for Employees of
First Interstate BancSystem, Inc. as of December 31, 1998 and 1997 and the
related statements of changes in net assets available for benefits for the years
then ended, which report appears in the December 31, 1998 report on Form 11-K of
First Interstate BancSystem, Inc.
/s/ KPMG LLP
Billings, Montana
June 28, 1999
