The acquisition of Mountain West Bank by First Interstate will result in employee layoffs for the Helena-based company, but for customers the change should allow for increased banking options.
Mountain West currently operates 12 branches in cities in central and western Montana, five of which are located in Helena.
The company’s presence in Helena was one reason it was attractive to First Interstate, executive vice president and chief financial officer Kevin Riley said in a conference call to investors Tuesday.
“This franchise complements and expands our franchise across the state, in particular in the Helena market,” he said.
Seven of Mountain West’s dozen branches are located within a half-mile of First Interstate locations. Several are even closer.
Riley said the acquisition offers opportunities to consolidate and estimated that perhaps half of Mountain West branches will close.
Cost-saving measures will include some layoffs. Riley said First Interstate will place “as many employees as possible” into the company.
Mountain West CEO Rick Hart said he’s optimistic that the acquisition will provide continued work for many of the company’s 184 employees, but knows upcoming “strategic decisions” will include some branch closures and job losses.
“We’ll hopefully be able to keep the majority of them (employees),” he said.
Hart traveled to each of the company’s branches this week to speak with employees about the acquisition.
He said First Interstate’s approach to staffing is one of the reasons his company chose to merge with them.
“They want to be a premier employer,” he said.
Those laid off will be offered a “generous” severance package as well as assistance in finding new employment, according to Riley. Mountain West executives will be around for longer, he added, commending them for their “superior” work in lifting the bank from recent financial straits.
During the recession, Mountain West was forced by federal regulators to stabilize its assets, an order that was lifted last year.
“We, for the most part, have cleaned the bank up and have a great relationship with our regulatory folks,” Hart said.
He said he’s excited to merge with the larger First Interstate.
“In today’s banking world, you either acquire things or be acquired,” he said.
Bank executives believe regulatory approval of the deal will come by July. Mountain West customers will begin to see a change soon after, as the facilities changeover to the First Interstate brand and branch consolidation takes place. Both likely will be completed by the end of the year, Hart said.
First Interstate Bank Senior Vice President and Marketing Director Cynthia Lyle said the acquisition will bring some new advantages to Mountain West customers.
“We’re confident that we’ll be able to offer them a very attractive line of products and services,” Lyle said, pointing to First Interstate’s wealth management services as an example.
Another is the company’s mobile banking technology, which Hart characterized as top of the line. Mountain West has been developing mobile products, he said, but now will be able to tap First Interstate’s platform.
With the acquisition, its first since 2008, First Interstate gains the top market share of deposits in the state. The company’s total assets will grow to $8.2 billion.
First Interstate operates 74 banks in Montana, Wyoming and South Dakota. The lion’s share of its 1,600-plus employees are located in Montana, Lyle said.