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.

Reporter Derek Brouwer can be reached at derek.brouwer@helenair.com or 447-4081. Follow Derek on Twitter @IR_DerekBrouwer

Education and business reporter. Twitter: @IR_DerekBrouwer

(10) comments

skooter
skooter

Anyone want to guess if Mr Hart is being well taken care of financially in the process? And of course those hit hardest will be the rank and file folks, not management. Helena has too many banks…but I worry about the plight of these workers. Might move to stockman…

middleoftheroad
middleoftheroad

You're absolutely right Skooter. Mr. Hart and a few other execs will be just fine and will be rewarded handsomely. Happens in every corporate merger. Heritage Propane and BCBSMT come to mind.

swankonia
swankonia

Mountain West Bank has been going under for years, this is not a surprise. There are two banks in Helena that will loan money to ANYONE; Mountain West Bank and Stockmans Bank.

Why move to Stockmans Bank? They are the only MT bank to take Federal Stimulus money, yet they continue to build new branches and buy out failing banks? Sad to inform you, but Stockmans Bank has significantly increased your taxes, why give them even more money?

Trico is also going under and (as of two years ago) have been telling their customer to move their money. They also loan money to ANYONE.

Find a bank that actually has standards for its loan procedures, otherwise, you are only contributing to the inevitable financial meltdown.


jgrdh11
jgrdh11

This is the second time you have made this claim that Stockman's took Federal Stimulus money. Whether they did (local Stockman’s president responded to your other comment that they did not) or didn't is irrelevant. The Federal Stimulus money wasn't given to banks, it was loaned and all banks were required to pay it back plus interest. You should try getting your facts straight before you start running your mouth.

dietz1963
dietz1963

Thats right swankonia, they will loan to anyone. I was one of those anyone guys which is why I went with them when First Interstate refused to give me one. And which is why if they fire anyone so they can keep the CEOs and stockholders comfy rich (cause that is the only reason), I'll be going over to Stockmans.

montanatom1950
montanatom1950

As a customer of Mountain West Bank I find it rude that management has not written to us nor have they posted anything on their online site about the proposed buy out.
We should have been the first to know. I will take a wait and see stance, but Slooter is right. It may be time to shop around.

dietz1963
dietz1963

I'm with you on this one. I didn't go with First Interstate Bank before just because of their attitude, lack of customer service and so on. That is why I went with Mountain West. So here we are, as usual, a good company being bought out with the buy out cutting jobs then turning around to suggest the trade off is increased banking options? Like what? What option could First Interstate possibly offer that is worth cutting the jobs?

One of the very rare times I agree with skooter, stockman is looking good about now.

Helenan34
Helenan34

It would be against the law for management to tell you before the public announcement. FIB has a publicly traded stock which has different laws and regulations. Imagine how the employees felt when they found out on Monday afternoon.

Greg Strandberg
Greg Strandberg

Maybe if banks didn't feel the need to build new branches all the time this wouldn't happen. Folks, is having 50+ banks around town worth having something like this happen?

Now those people have to find new jobs because of the inability of management to have a clear and rational long-term business approach.

I'm sorry if you can't hear me over the racket - I think they're building another bank down the street.

Bidnessman
Bidnessman

When acquiring my business years ago, Mountain West was the only bank of 4 that gave me a chance. You could even say 5 if we count the SBA. I have emailed my banking rep, and had a few more in my place today as a matter of fact, all seem to be very excited about this, tho I am certain there will be some cutbacks and layoffs. We've all had setbacks like some of the employees are going to experience. Those give us a chance to move in a different direction.

Myself, I'm going to give this a chance and see what happens and where it takes us. I wish everyone the best of luck.

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