<PAGE> 1
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, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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Commission file number 333-3250
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A. Savings and Profit Sharing Plan for Employees of First Interstate
BancSystem, Inc.
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(Full title of the plan)
Same as below
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(Address of the plan, if different from that of the issuer named below)
B. First Interstate BancSystem, Inc.
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(Name of issuer of the securities held pursuant to the plan)
401 North 31st Street, P.O. Box 30918, Billings, Montana 59116-0918
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(Address of issuer's principal executive office)
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[KPMG LOGO]
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE
BANCSYSTEM, INC.
Financial Statements and Schedules
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
===============
<PAGE> 3
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, 1999 and 1998
Statement of Changes in Net Assets Available for Benefits - Year Ended December
31, 1999
Notes to Financial Statements
<TABLE>
<CAPTION>
Schedule
--------
<S> <C>
Schedule of Assets Held for Investment Purposes - December 31, 1999............................................... 1
Schedule of Reportable Transactions - December 31, 1999........................................................... 2
</TABLE>
<PAGE> 4
[KPMG 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, 1999 and 1998, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1999. 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, 1999 and 1998, and the changes in net assets available for benefits
for the year ended December 31, 1999 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.
KPMG LLP
May 26, 2000
<PAGE> 5
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Cash $ 1,477,642 183,187
Investments, at fair value 57,107,401 46,750,489
Accrued interest and dividends 37,146 558,638
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Net assets available for benefits $ 58,622,189 47,492,314
============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 1999
<TABLE>
<S> <C>
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 2,898,644
Net appreciation in fair value of
investments 6,023,880
-----------
8,922,524
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Contributions:
Employee 2,158,032
Employer 2,463,722
Rollover 80,160
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4,701,914
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Total additions 13,624,438
Deductions from net assets attributed to - benefits
paid to participants 2,494,563
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Net increase 11,129,875
Net assets available for benefits:
Beginning of year 47,492,314
-----------
End of year 58,622,189
===========
</TABLE>
See accompanying notes to Financial Statements.
<PAGE> 7
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
December 31, 1999 and 1998
(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% of compensation 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:
Accessor U.S. Government Money Fund - Funds are invested in
short-term obligations issued or guaranteed by the U.S.
Government, its agencies, or instrumentalities.
Accessor Mortgage Securities Fund - Funds are invested in
mortgage related securities.
Vanguard Intermediate - Term Treasury Fund - Funds are
invested in fixed income securities.
Accessor Growth Fund - Funds are invested in equity securities
with greater than average growth characteristics.
1
(Continued)
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SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
Accessor Intermediate Fixed Income Fund - Funds are invested
in fixed income with durations between three and ten years.
Accessor International Equity Fund - Funds are invested in
equity securities of companies domiciled in countries other
than the United States.
Columbia Fixed Income Securities Fund - Funds are invested in
a broad range of investment-grade, fixed income securities
with intermediate - to long-term maturities.
Federated GNMA Fund - Funds are invested primarily in
instruments issued or guaranteed by the Government National
Mortgage Association.
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.
Harbor International Fund - Funds are invested in non-U.S.
equity securities.
Accessor Value & Income Fund - Funds are invested in income
producing equity securities selected from the Standard and
Poor's 500 Composite Stock Price Index.
Accessor Short Intermediate Fixed Income Fund - Funds are
invested in fixed income securities with duration of between
one and five years.
Accessor Small to Mid Cap Fund - Funds are invested in equity
securities of small to medium capitalization issuers.
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, 1999 and 1998, plan assets invested in
Company Stock were 34% and 33% 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
(Continued)
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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 Montana
- First Interstate Bank 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 $40 and $33 at September 30, 1999 and
September 30, 1998, 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
(Continued)
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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. In September 1999, the
American Institute of Certified Public Accountants issued Statement of
Position 99-3, Accounting for and Reporting of Certain Defined
Contribution Plan Investments and Other Disclosure Matters (SOP 99-3).
SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ending after December 15, 1999. The Plan adopted
SOP 99-3 during the Plan year ending December 31, 1999. Accordingly,
information previously required to be disclosed about
participant-directed fund investment programs is not presented in the
Plan's 1999 financial statements. The Plan's 1998 financial statements
have been reclassified to conform with the current year's presentation.
The following table presents the fair values of investments, as
determined by quoted market price or appraisal, as of December 31:
<TABLE>
<CAPTION>
1999 1998
-------------------------------- --------------------------------
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
Accessor U.S. Government Money Fund
5,026,351 5,026,351 - -
Goldman Sachs Financial Square Prime
Obligations Fund - - 1,744,055 1,744,055
Accessor Mortgage Securities Fund 200,933 2,407,177 - -
Vanguard Intermediate - Term Treasury
Fund 39,690 402,060 166,236 1,851,871
Accessor Growth Fund 190,938 6,698,107 - -
Accessor Intermediate Fixed Income Fund 192,335 2,173,386 - -
Accessor International Equity Fund 112,658 2,424,406 - -
Columbia Fixed Income Securities Fund 42,931 534,063 169,032 2,268,290
Federated GNMA Fund 46,183 497,395 222,630 2,531,302
Federated Capital Preservation Fund - - 117,028 1,170,280
Fidelity Contrafund Inc. - - 38,960 2,207,868
SEI Index Fund 76,727 3,491,095 126,472 4,861,616
Brandywine Fund, Inc. - - 92,664 2,805,868
Twentieth Century Investments (Ultra
Fund) - - 64,613 2,158,709
Harbor International Fund 37,284 1,560,709 85,193 3,128,293
Accessor Value & Income Fund 249,159 5,157,599 86,212 1,813,891
Accessor Short Intermediate Fixed
Income Fund 156,482 1,851,179 - -
Accessor Small to Mid Cap Fund 186,448 5,106,811 60,119 1,406,782
Franklin Small Cap Growth Fund - - 14,731 332,489
T. Rowe Price Equity Income Fund - - 106,267 2,796,934
Loan Fund 121,583 121,583 99,221 99,221
Investments at estimated fair value as
determined by appraisal:
First Interstate BancSystem, Inc. Stock 491,387 19,655,410 471,793 15,569,169
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$ 57,107,401 $ 46,750,489
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</TABLE>
4
(Continued)
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SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Notes to Financial Statements
During 1999 and 1998, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value by $6,023,880 and $6,102,006 respectively.
(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, 1999 ranged from 7% to
9.75%. Principal and interest is paid ratably through monthly payroll
deductions.
(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
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SCHEDULE 1
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Schedule of Assets Held for Investment Purposes
December 31, 1999
<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 value
---------------- --------------------- -----
<S> <C> <C>
Accessor Capital Management Accessor U.S. Government Money Fund $ 5,026,351
Accessor Capital Management Accessor Mortgage Securities Fund 2,407,177
The Vanguard Group Vanguard Intermediate - Term Treasury Fund 402,060
Accessor Capital Management Accessor Intermediate Fixed Income Fund 2,173,386
Accessor Capital Management Accessor Short Intermediate Fixed Income
Fund 1,851,179
Columbia Funds Columbia Fixed Income Securities Fund 534,063
Federated Securities Corp. Federated GNMA Fund 497,395
Financial Services Company SEI Index Fund 3,491,095
Harbor Fund Harbor International Fund 1,560,709
Accessor Capital Management Accessor Growth Fund 6,698,107
Accessor Capital Management Accessor International Equity Fund 2,424,406
Accessor Capital Management Accessor Value & Income Fund 5,157,599
Accessor Capital Management Accessor Small to Mid Cap Fund 5,106,811
First Interstate BancSystem, Inc.* Common stock of First Interstate
BancSystem, Inc. 19,655,480
Savings and Profit Sharing Plan Loans to plan participants
for Employees of First Interstate
BancSystem, Inc. 121,583
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$ 57,107,401
=============
</TABLE>
* party in interest to the Plan
See accompanying independent auditors' report.
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SCHEDULE 2
SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
Schedule of Reportable Transactions
Year Ended December 31, 1999
<TABLE>
<CAPTION>
IDENTITY OF
PARTY INVOLVED DESCRIPTION OF ASSET PURCHASE PRICE SELLING PRICE LEASE RENTAL
-------------- -------------------- -------------- ------------- ------------
<S> <C> <C> <C> <C>
Fidelity Investments Fidelity Contrafund, Inc. 2,314,807 2,551,496 --
T. Rowe Price T. Rowe Price Equity Income Fund 2,453,965 2,705,124 --
Brandywine Fund, Inc. Brandywine Fund, Inc. 2,611,334 2,966,067 --
<CAPTION>
CURRENT VALUE
EXPENSE OF ASSET ON
IDENTITY OF INCURRED WITH TRANSACTION NET
PARTY INVOLVED TRANSACTION COST OF ASSET DATE GAIN (LOSS)
-------------- ----------- ------------- ---- -----------
<S> <C> <C> <C> <C>
Fidelity Investments -- 2,314,807 2,551,496 236,689
T. Rowe Price -- 2,453,965 2,705,124 251,159
Brandywine Fund, Inc. -- 2,611,334 2,966,067 354,732
</TABLE>
See accompanying independent auditors' report.
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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 12, 2000 /S/ RICHARD C. FELLOWS
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Date Richard C. Fellows
Senior Vice President
<PAGE> 15
FIRST INTERSTATE BANCSYSTEM, INC.
EXHIBIT INDEX
Exhibit Document
23.1 Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants.
