First Interstate BancSystem (FIBK) 8-K First Interstate BancSystem, Inc. Reports Results for Second Quarter 2011

Exhibit 99.1

First Interstate BancSystem, Inc. Reports Results for Second Quarter 2011

For Immediate Release

Contact: Marcy Mutch Investor Relations Officer First Interstate BancSystem, Inc. (406) 255-5322 investor.relations@fib.com NASDAQ: FIBK www.FIBK.com

First Interstate BancSystem, Inc. reports second quarter 2011 net income available to common shareholders of $9.0 million, or $0.21 per diluted share, as compared to $8.7 million, or $0.20 per diluted share, for first quarter 2011 and $5.8 million, or $0.14 per diluted share, for second quarter 2010.

RESULTS SUMMARY

(Unaudited; $ in thousands, except per share data)

	Three Months Ended									Sequential			Year
	June 30, 2011			March 31, 2011			June 30, 2010			Quarter % Change			Over Year % Change
Net income	$	9,854		$	9,506		$	6,659			3.7	%		48.0	%
Net income available to common shareholders		9,001			8,662			5,806			3.9	%		55.0	%
Diluted earnings per common share		0.21			0.20			0.14			5.0	%		50.0	%
Dividends per common share		0.1125			0.1125			0.1125			0.0	%		0.0	%
Book value per common share		16.51			16.10			16.12			2.5	%		2.4	%
Tangible book value per common share*		12.05			11.63			11.61			3.6	%		3.8	%
Net tangible book value per common share*		13.45			13.04			13.02			3.1	%		3.3	%
Return on average common equity		5.23	%		5.11	%		3.42	%
Return on average assets		0.54	%		0.52	%		0.37	%
Weighted average common shares outstanding		42,781,894			42,689,390			42,620,563
Weighted average common shares issuable upon exercise of stock options & non-vested stock awards		114,717			170,591			283,433
	Six Months Ended						Year
	June 30, 2011			June 30, 2010			Over Year % Change
Net income	$	19,360		$	17,789			8.8	%
Net income available to common stockholders		17,663			16,092			9.8	%
Diluted earnings per common share		0.41			0.43			-4.7	%
Dividends per common share		0.2250			0.2250			0.0	%
Return on average common equity		5.17	%		5.35	%
Return on average assets		0.53	%		0.50	%
Weighted average common shares outstanding		42,735,897			37,133,376
Weighted average common shares issuable upon exercise of stock options & non-vested stock awards		138,031			269,087

* See Non-GAAP Financial Measures included herein for a discussion regarding tangible and net tangible book value per common share.

1

“Our second quarter results were in line with our expectations,” said Lyle R. Knight, President and Chief Executive Officer for First Interstate BancSystem, Inc. “We are pleased to deliver solid year-over-year earnings growth, particularly in light of the challenging economic and regulatory environments we face today. Although we do not expect to see overall loan growth during 2011, we are encouraged to see modest growth in the commercial and agricultural segments of our loan portfolio, which is offsetting the declines we are seeing in the construction portfolio.”

Non-performing assets increased to 4.05% of total assets as of June 30, 2011. “The credit cycle is progressing as we expected in our markets and we are steadily resolving problem assets, particularly in the Flathead, Gallatin Valley and Jackson market areas,” said Mr. Knight. “We believe non-performing assets are currently at or near their peak.”

REVENUE SUMMARY	Three Months Ended									Sequential			Year
(Unaudited; $ in thousands)	June 30, 2011			March 31, 2011			June 30, 2010			Quarter % Change			Over Year % Change
Interest income	$	73,551		$	73,843		$	79,867			-0.4	%		-7.9	%
Interest expense		11,024			12,045			16,691			-8.5	%		-34.0	%
Net interest income		62,527			61,798			63,176			1.2	%		-1.0	%
Non-interest income:
Other service charges, commissions and fees		7,768			7,380			7,380			5.3	%		5.3	%
Service charges on deposit accounts		4,385			4,110			4,759			6.7	%		-7.9	%
Income from the origination and sale of loans		4,109			3,445			4,186			19.3	%		-1.8	%
Wealth management revenues		3,483			3,295			3,199			5.7	%		8.9	%
Investment securities gains, net		16			2			15			700.0	%		6.7	%
Other income		1,830			1,927			1,498			-5.0	%		22.2	%
Total non-interest income		21,591			20,159			21,037			7.1	%		2.6	%
Total revenues	$	84,118		$	81,957		$	84,213			2.6	%		-0.1	%
Tax equivalent net interest margin ratio		3.84	%		3.73	%		3.96	%
	Six Months Ended						Year
	June 30, 2011			June 30, 2010			Over Year %  Change
Interest income	$	147,394		$	159,366			-7.5	%
Interest expense		23,069			34,521			-33.2	%
Net interest income		124,325			124,845			-0.4	%
Non-interest income:
Other service charges, commissions and fees		15,148			14,252			6.3	%
Service charges on deposit accounts		8,495			9,357			-9.2	%
Income from the origination and sale of loans		7,554			7,486			0.9	%
Wealth management revenues		6,778			6,213			9.1	%
Investment securities gains, net		18			42			-57.1	%
Other income		3,757			3,195			17.6	%
Total non-interest income		41,750			40,545			3.0	%
Total revenues	$	166,075		$	165,390			0.4	%
Tax equivalent net interest margin ratio		3.78	%		3.98	%

2

Net Interest Income

Net interest income increased during second quarter 2011, as compared to first quarter 2011, due to one additional accrual day. The Company’s net interest margin ratio increased to 3.84% during second quarter 2011, from 3.73% during first quarter 2011, primarily due to decreases in average savings and time deposits combined with an overall reduction in our cost of funds and a shift in the mix of average interest earning assets from deposits in banks to higher-yielding investment securities.

Although net interest income remained stable during the three and six months ended June 30, 2011, as compared to the same periods in 2010, the Company’s net interest margin ratio decreased. Compression in the net interest margin ratio during the six months ended June 30, 2011, compared to the same period in 2010, was attributable to lower yields earned on the Company’s investment and loan portfolios and lower outstanding loan balances, the effects of which were partially offset by a 43 basis point reduction in funding costs.

On July 15, 2011, the Board of Governors of the Federal Reserve and the Federal Deposit Insurance Corporation, or FDIC, issued separate final rules to implement the Dodd-Frank Act mandated repeal of the prohibition against paying interest on demand deposits that became effective on July 21, 2011. Management does not expect this change will have a significant impact on the Company’s consolidated financial statements, results of operations or liquidity.

Non-interest Income

Other service charges, commissions and fees increased during second quarter 2011, as compared to first quarter 2011 and second quarter 2010, primarily due to higher interchange income resulting from higher volumes of debit and credit card transactions. Recent regulation, which becomes effective on October 1, 2011, will reduce the maximum allowable debit card interchange fee per transaction for large issuers. Issuers with less than $10 billion in assets, like the Company, are exempt from limitations on debit card interchange fees, although payment card networks could make other fee adjustments for small issuers. The Company recorded debit card interchange fees of $2.9 million and $5.7 million during the three and six months ended June 30, 2011.

Income from the origination and sale of residential mortgage loans increased during second quarter 2011, as compared to first quarter 2011, primarily due to seasonal fluctuations in new home purchases. Purchased home loan originations accounted for approximately 61% of the Company’s residential real estate loan originations during second quarter 2011, as compared to 44% during first quarter 2011 and 61% during second quarter 2010.

Wealth management revenues increased during second quarter 2011, as compared to first quarter 2011 and second quarter 2010. Wealth management revenues also increased during the six months ended June 30, 2011, as compared to the same period in 2010. These increases were primarily due to new business activity and increases in the market values of assets under trust management.

Fluctuations in other income during second quarter 2011, as compared to first quarter 2011 and second quarter 2010, were primarily due to fluctuations in earnings on securities held under deferred compensation plans.

3

NON-INTEREST EXPENSE	Three Months Ended									Sequential			Year
(Unaudited; $ in thousands)	June 30, 2011			March 31, 2011			June 30, 2010			Quarter % Change			Over Year %  Change
Non-interest expense:
Salaries, wages and employee benefits expense	$	27,889		$	27,702		$	27,379			0.7	%		1.9	%
Occupancy, net		4,013			4,215			3,963			-4.8	%		1.3	%
Furniture and equipment		3,129			3,220			3,356			-2.8	%		-6.8	%
Outsourced technology services		2,212			2,241			2,449			-1.3	%		-9.7	%
FDIC insurance premiums		1,629			2,466			2,667			-33.9	%		-38.9	%
Other real estate owned expense, net of income		2,042			1,711			2,980			19.3	%		-31.5	%
Mortgage servicing rights amortization		671			807			1,115			-16.9	%		-39.8	%
Mortgage servicing rights impairment (recovery)		27			(347	)		271			-107.8	%		-90.0	%
Core deposit intangibles amortization		361			362			440			-0.3	%		-18.0	%
Other expenses		12,219			10,581			10,806			15.5	%		13.1	%
Total non-interest expense	$	54,192		$	52,958		$	55,426			2.3	%		-2.2	%
	Six Months Ended						Year
	June 30, 2011			June 30, 2010			Over Year %  Change
Non-interest expense:
Salaries, wages and employee benefits	$	55,591		$	55,457			0.2	%
Occupancy, net		8,228			8,105			1.5	%
Furniture and equipment		6,349			6,697			-5.2	%
Outsourced technology services		4,453			4,698			-5.2	%
FDIC insurance premiums		4,095			5,123			-20.1	%
Other real estate owned expense, net of income		3,753			3,521			6.6	%
Mortgage servicing rights amortization		1,478			2,248			-34.3	%
Mortgage servicing rights impairment (recovery)		(320	)		221			-244.8	%
Core deposit intangibles amortization		723			879			-17.7	%
Other expenses		22,800			21,222			7.4	%
Total non-interest expense	$	107,150		$	108,171			-0.9	%

FDIC insurance premiums decreased during second quarter 2011, as compared to first quarter 2011 and second quarter 2010. In February 2011, the FDIC issued a final rule that, among other things, modified the definition of an institution’s deposit insurance assessment base and revised assessment rate schedules. These changes, which became effective April 1, 2011, resulted in a reduction in the Company’s FDIC insurance premiums.

Variations in net OREO expense between periods were primarily due to fluctuations in write-downs of the estimated fair value of OREO properties. Second quarter 2011 net OREO expense included $340 thousand of net operating expenses, $2.0 million of fair value write-downs and net gains of $261 thousand on the sale of OREO properties. Approximately 96% of write-downs recorded during the three and six months ended June 30, 2011 related to properties in the Flathead market area.

Decreases in mortgage servicing rights amortization during second quarter 2011, as compared to first quarter 2011 and second quarter 2010, were primarily due to the sale of mortgage servicing rights during fourth quarter 2010 combined with changes in the estimated duration of the loans underlying the Company’s capitalized mortgage servicing rights.

Fluctuations in the fair value of mortgage servicing rights were due to changes in assumptions regarding estimated prepayments of the underlying mortgage loans, which typically correspond with changes in market interest rates. Mortgage interest rates decreased slightly during second quarter 2011, as compared to first quarter 2011, resulting in a slight impairment in the fair value of mortgage servicing rights.

Other expenses increased during second quarter 2011, as compared to first quarter 2011 and second quarter 2010, primarily due to the timing of expenses, most significantly advertising and legal expenses. In addition, annual retention payments for directors aggregating $345 thousand were expensed during second quarter 2011. Other expenses increased during the six months ended June 30, 2011, as compared to the same period in 2010, primarily due higher legal expenses related to collection activities.

4

ASSET QUALITY	Three Months Ended
(Unaudited; $ in thousands)	June 30, 2011			March 31, 2011			June 30, 2010
Allowance for loan losses - beginning of period	$	124,446		$	120,480		$	106,349
Charge-offs		(16,102	)		(12,339	)		(12,107	)
Recoveries		835			1,305			586
Provision		15,400			15,000			19,500
Allowance for loan losses - end of period	$	124,579		$	124,446		$	114,328
	June 30, 2011			March 31, 2011			June 30, 2010
Period end loans	$	4,281,260		$	4,263,764		$	4,562,288
Average loans		4,269,637			4,303,575			4,520,119
Non-performing loans:
Nonaccrual loans		229,662			212,394			139,975
Accruing loans past due 90 days or more		2,194			4,140			7,550
Restructured loans		31,611			33,344			10,588
Total non-performing loans		263,467			249,878			158,113
Other real estate owned		28,323			31,995			42,338
Total non-performing assets	$	291,790		$	281,873		$	200,451
Net charge-offs to average loans (annualized)		1.43	%		1.04	%		1.02	%
Provision for loan losses to average loans (annualized)		1.45	%		1.41	%		1.73	%
Allowance for loan losses to period end loans		2.91	%		2.92	%		2.51	%
Allowance for loan losses to total non-performing loans		47.28	%		49.80	%		72.31	%
Non-performing loans to period end loans		6.15	%		5.86	%		3.47	%
Non-performing assets to period end loans and other real estate owned		6.77	%		6.56	%		4.35	%
Non-performing assets to total assets		4.05	%		3.79	%		2.77	%

The Company’s loan portfolio continued to be adversely impacted by difficult economic conditions in certain of its market areas. The Flathead, Gallatin Valley and Jackson market areas, which are dependent upon resort and second home communities, accounted for approximately 46% of the Company’s non-performing assets as of June 30, 2011, versus only 19% of the Company’s total loans as of the same date.

Net charged-off loans increased during second quarter 2011, as compared to first quarter 2011 and second quarter 2010. Approximately 78% of the loans charged-off during second quarter 2011 were located in the Flathead, Gallatin Valley and Jackson market areas. Additionally, approximately 51% of the loans charged-off during second quarter 2011 were related to six borrowers, including one commercial real estate, two commercial construction and three land development borrowers. Management expects charge-offs to remain elevated in future quarters as previously identified problem loans continue to work through the credit cycle.

As of June 30, 2011, total non-performing loans included $224 million of real estate loans, of which $110 million were construction loans and $86 million were commercial real estate loans. Non-performing construction loans as of June 30, 2011 were comprised of land acquisition and development loans of $68 million, residential construction loans of $18 million and commercial construction loans of $24 million.

The most significant increases in non-performing loans during second quarter 2011, as compared to first quarter 2011, occurred in nonaccrual loans. Approximately $15 million of the increase in nonaccrual loans during second quarter 2011, as compared to first quarter 2011, was related to the loans of one land development borrower. Approximately 67% of the Company’s nonaccrual loans were current with regard to principal payments as of June 30, 2011, as compared to 71% as of March 31, 2011.

5

OREO decreased during second quarter 2011, as compared to first quarter 2011 and second quarter 2010. During second quarter 2011, the Company recorded additions to OREO of $3 million, wrote down the fair value of OREO properties by $2 million and sold OREO with a net book value of $5 million. As of June 30, 2011, approximately 71% of total OREO was comprised of properties located in the Flathead, Gallatin Valley and Jackson market areas.

Fluctuations in the provision for loan losses result from management’s assessment of the adequacy of the Company’s allowance for loan losses. Management expects quarterly provisions for loan losses to decline as credit quality improves.

Following is a summary of the Company’s credit quality trends since the start of 2009.

CREDIT QUALITY TRENDS

(Unaudited; $ in thousands)

	Provisions for Loan Losses		Net Charge-offs		Allowance for Loan Losses		Loans 30 - 89 Days Past Due		Non-Performing Loans		Non-Performing Assets
Q1 2009	$	9,600	$	4,693	$	92,223	$	98,980	$	103,653	$	122,300
Q2 2009		11,700		5,528		98,395		88,632		135,484		167,273
Q3 2009		10,500		7,147		101,748		91,956		125,083		156,958
Q4 2009		13,500		12,218		103,030		63,878		124,678		163,078
Q1 2010		11,900		8,581		106,349		62,675		133,042		177,022
Q2 2010		19,500		11,521		114,328		99,334		158,113		200,451
Q3 2010		18,000		12,092		120,236		47,966		202,008		237,304
Q4 2010		17,500		17,256		120,480		57,011		210,684		244,312
Q1 2011		15,000		11,034		124,446		68,021		249,878		281,873
Q2 2011		15,400		15,267		124,579		70,145		263,467		291,790

Following is a summary of the Company’s criticized loans since the start of 2009.

CRITICIZED LOANS

(Unaudited; $ in thousands)

	Other Assets Especially Mentioned		Substandard		Doubtful		Total
Q1 2009	$	163,402	$	231,861	$	40,356	$	435,619
Q2 2009		230,833		242,751		48,326		521,910
Q3 2009		239,320		271,487		60,725		571,532
Q4 2009		279,294		271,324		69,603		620,221
Q1 2010		312,441		311,866		64,113		688,420
Q2 2010		319,130		337,758		92,249		749,137
Q3 2010		340,075		340,973		116,003		797,051
Q4 2010		305,925		303,653		133,353		742,931
Q1 2011		293,899		299,072		135,862		728,833
Q2 2011		268,450		309,029		149,964		727,443

6

ASSETS (Unaudited; $ in thousands)	June 30, 2011		March 31, 2011		June 30, 2010		Sequential Quarter % Change			Year Over Year % Change
Cash and cash equivalents	$	415,491	$	680,321	$	502,484		-38.9	%		-17.3	%
Investment securities		2,022,729		1,987,378		1,635,459		1.8	%		23.7	%
Loans		4,281,260		4,263,764		4,562,288		0.4	%		-6.2	%
Less allowance for loan losses		124,579		124,446		114,328		0.1	%		9.0	%
Net loans		4,156,681		4,139,318		4,447,960		0.4	%		-6.5	%
Other assets		607,890		622,109		639,473		-2.3	%		-4.9	%
Total assets	$	7,202,791	$	7,429,126	$	7,225,376		-3.0	%		-0.3	%

LOANS (Unaudited; $ in thousands)	June 30, 2011		March 31, 2011		June 30, 2010		Sequential Quarter % Change				Year Over Year % Change
Real estate loans:
Commercial	$	1,555,964	$	1,553,750	$	1,594,780		0.1	%			-2.4	%
Construction:
Land acquisition & development		312,690		319,573		371,191		-2.2	%			-15.8	%
Residential		63,364		78,572		122,452		-19.4	%			-48.3	%
Commercial		76,740		95,623		86,883		-19.7	%			-11.7	%
Total construction loans		452,794		493,768		580,526		-8.3	%			-22.0	%
Residential		578,739		561,420		540,255		3.1	%			7.1	%
Agriculture		177,728		181,513		193,764		-2.1	%			-8.3	%
Mortgage loans originated for sale		28,498		20,992		48,478		35.8	%			-41.2	%
Total real estate loans		2,793,723		2,811,443		2,957,803		-0.6	%			-5.5	%
Consumer:
Indirect consumer loans		413,825		411,908		428,738		0.5	%			-3.5	%
Other consumer loans		152,704		155,100		193,462		-1.5	%			-21.1	%
Credit card loans		59,655		58,075		58,574		2.7	%			1.8	%
Total consumer loans		626,184		625,083		680,774		0.2	%	��		-8.0	%
Commercial		724,158		703,837		777,918		2.9	%			-6.9	%
Agricultural		133,898		121,571		142,279		10.1	%			-5.9	%
Other loans, including overdrafts		3,297		1,830		3,514		80.2	%			-6.2	%
Total loans	$	4,281,260	$	4,263,764	$	4,562,288		0.4	%			-6.2	%

As of June 30, 2011, total loans increased, as compared to March 31, 2011, primarily due to seasonal fluctuations in the commercial and agricultural loan portfolios and the retention of select residential real estate loan production.

As of June 30, 2011, total loans decreased, as compared to June 30, 2010, with all major categories of loans showing decreases except residential real estate loans. Management attributes decreases in loans to a general decline in new home construction in our market areas, particularly in markets dependent upon resort and second home communities including the Flathead, Gallatin Valley and Jackson market areas, sluggish consumer growth amid economic uncertainty, and to a lesser extent, the movement of lower quality loans out of the loan portfolio through charge-off, pay-off or foreclosure.

7

LIABILITIES (Unaudited; $ in thousands)	June 30, 2011		March 31, 2011		June 30, 2010		Sequential Quarter % Change			Year Over Year % Change
Deposits	$	5,794,665	$	5,931,184	$	5,802,322		-2.3	%		-0.1	%
Securities sold under repurchase agreements		435,039		536,955		453,749		-19.0	%		-4.1	%
Accounts payable and accrued expenses		35,395		40,400		39,741		-12.4	%		-10.9	%
Accrued interest payable		11,712		12,162		20,442		-3.7	%		-42.7	%
Long-term debt		37,480		37,491		38,023		0.0	%		-1.4	%
Other borrowed funds		5,440		5,522		7,196		-1.5	%		-24.4	%
Subordinated debentures held by subsidiary trusts		123,715		123,715		123,715		0.0	%		0.0	%
Total liabilities	$	6,443,446	$	6,687,429	$	6,485,188		-3.6	%		-0.6	%

All outstanding repurchase agreements are with commercial and municipal depositors and are due in one day. Fluctuations in repurchase agreements are primarily the result of changes in liquidity of our customers.

Fluctuations in accounts payable and accrued expenses are primarily due to the timing of corporate income tax payments.

DEPOSITS (Unaudited; $ in thousands)	June 30, 2011		March 31, 2011		June 30, 2010		Sequential Quarter % Change			Year Over Year % Change
Non-interest bearing demand	$	1,109,905	$	1,110,940	$	1,040,072		-0.1	%		6.7	%
Interest bearing:
Demand		1,233,039		1,259,105		1,090,162		-2.1	%		13.1	%
Savings		1,703,548		1,742,958		1,487,746		-2.3	%		14.5	%
Time, $100 and over		772,567		825,585		996,478		-6.4	%		-22.5	%
Time, other		975,606		992,596		1,187,864		-1.7	%		-17.9	%
Total interest bearing		4,684,760		4,820,244		4,762,250		-2.8	%		-1.6	%
Total deposits	$	5,794,665	$	5,931,184	$	5,802,322		-2.3	%		-0.1	%

Deposits decreased slightly as of June 30, 2011, as compared to March 31, 2011 and June 30, 2010. During second quarter 2011, the Company continued to experience a shift in the mix of deposits away from higher-costing time deposits to lower-costing savings, interest bearing demand and non-interest bearing demand deposits.

8

STOCKHOLDERS’ EQUITY (Unaudited, $ in thousands, except per share data)	June 30, 2011		March 31, 2011		June 30, 2010		Sequential Quarter % Change			Year Over Year % Change
Preferred stockholders’ equity	$	50,000	$	50,000	$	50,000		0.0	%		0.0	%
Common stockholders’ equity		686,948		682,049		668,302		0.7	%		2.8	%
Accumulated other comprehensive income, net		22,397		9,648		21,886		132.1	%		2.3	%
Total stockholders’ equity	$	759,345	$	741,697	$	740,188		2.4	%		2.6	%
Book value per common share	$	16.51	$	16.10	$	16.12		2.5	%		2.4	%
Tangible book value per common share*	$	12.05	$	11.63	$	11.61		3.6	%		3.8	%
Net tangible book value per common share *	$	13.45	$	13.04	$	13.02		3.1	%		3.3	%

* See Non-GAAP Financial Measures included herein for a discussion of tangible and net tangible book value per common share.

On June 13, 2011, the Company declared a quarterly dividend to common shareholders of $0.1125 per share. This dividend was paid on July 15, 2011 to shareholders of record as of July 1, 2011.

CAPITAL RATIOS (Unaudited)	June 30, 2011			March 31, 2011			June 30, 2010
Tangible common stockholders’ equity to tangible assets*		7.38	%		6.90	%		7.06	%
Net tangible common stockholders’ equity to tangible assets*		8.24	%		7.74	%		7.93	%
Tier 1 common capital to total risk weighted assets		10.56	%		10.40	%		9.56	%
Leverage ratio		9.69	%**		9.34	%		9.43	%
Tier 1 risk-based capital		14.03	%**		13.85	%		12.87	%
Total risk-based capital		16.01	%**		15.83	%		14.81	%

* See Non-GAAP Financial Measures included herein for a discussion of tangible and net tangible common stockholders’ equity to tangible assets.

** Preliminary estimate - may be subject to change.

As of June 30, 2011, the Company had capital levels that, in all cases, exceeded the “well capitalized” requirements under all regulatory capital guidelines.

Second Quarter 2011 Conference Call for Investors

First Interstate BancSystem, Inc. will host a conference call to discuss second quarter 2011 results at 11:00 a.m. Eastern Time (9:00 a.m. MDT) on Tuesday, July 26, 2011. The conference call will be accessible by telephone and through the Internet. Participants may join the call by dialing 1-877-317-6789 or by logging on to www.FIBK.com. The call will be recorded and made available for replay after 1:00 p.m. Eastern Time (11:00 a.m. MDT) on July 26, 2011 through August 27, 2011 by dialing 1-877-344-7529 (using conference ID 10001664). The call will also be archived on our website,www.FIBK.com, for one year.

About First Interstate BancSystem, Inc.

First Interstate BancSystem, Inc. is a financial and bank holding company incorporated in 1971 and headquartered in Billings, Montana. The Company operates 71 banking offices in 42 communities in Montana, Wyoming and western South Dakota. Through First Interstate Bank, the Company delivers a comprehensive range of banking products and services to individuals, businesses, municipalities and other entities throughout the Company’s market areas.

9

Cautionary Statement

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are covered by the safe harbor provisions of such sections. These statements include statements about decreased levels of criticized loans, stabilization of the loan portfolio, the Company’s level of allowance for loan losses, manageability of credit costs and levels of profitability. Therefore, the Company’s actual results, performance or achievements may differ materially from those expressed in or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions.

The following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this release:

The following factors, among others, may cause actual results to differ materially from current expectations in the forward-looking statements, including those set forth in this release:

• credit losses;

• concentrations of real estate loans;

• economic and market developments, including inflation;

• commercial loan risk;

• adequacy of the allowance for loan losses;

• impairment of goodwill;

• changes in interest rates;

• access to low-cost funding sources;

• increases in deposit insurance premiums;

• inability to grow business;

• adverse economic conditions affecting Montana, Wyoming and western South Dakota;

• governmental regulation and changes in regulatory, tax and accounting rules and interpretations;

• sweeping changes in regulation of financial institutions due to passage of the Dodd-Frank Act;

• changes in or noncompliance with governmental regulations;

• effects of recent legislative and regulatory efforts to stabilize financial markets;

• dependence on the Company’s management team;

• ability to attract and retain qualified employees;

• failure of technology;

• reliance on external vendors;

• disruption of vital infrastructure and other business interruptions;

• illiquidity in the credit markets;

• inability to meet liquidity requirements;

• lack of acquisition candidates;

• failure to manage growth;

• competition;

• inability to manage risks in turbulent and dynamic market conditions;

• ineffective internal operational controls;

• environmental remediation and other costs;

• failure to effectively implement technology-driven products and services;

• litigation pertaining to fiduciary responsibilities;

• capital required to support the Company’s bank subsidiary;

• soundness of other financial institutions;

• impact of Basel III capital standards and forthcoming new capital rules proposed for U.S. banks;

• inability of our bank subsidiary to pay dividends;

• change in dividend policy;

• lack of public market for our Class A common stock;

• volatility of Class A common stock;

• voting control of Class B stockholders;

• decline in market price of Class A common stock;

• dilution as a result of future equity issuances;

• uninsured nature of any investment in Class A common stock;

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• anti-takeover provisions;

• controlled company status; and

• subordination of common stock to Company debt.

A more detailed discussion of each of the foregoing risks is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, filed February 28, 2011. These factors and the other risk factors described in the Company’s periodic and current reports filed with the Securities and Exchange Commission from time to time, however, are not necessarily all of the important factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the Company’s forward-looking statements. Other unknown or unpredictable factors also could harm the Company’s results. Investors and others are encouraged to read the more detailed discussion of the Company’s risks contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made and the Company does not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If the Company updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements.

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CONSOLIDATED BALANCE SHEETS

(Unaudited, $ in thousands)

	June 30, 2011		March 31, 2011		June 30, 2010
Assets
Cash and due from banks	$	130,413	$	120,814	$	169,461
Federal funds sold		1,764		3,108		5,164
Interest bearing deposits in banks		283,314		556,399		327,859
Total cash and cash equivalents		415,491		680,321		502,484
Investment securities:
Available-for-sale		1,873,864		1,841,281		1,500,659
Held-to-maturity (estimated fair values of $153,448, $147,401 and $136,782 as of June 30, 2011, March 31, 2011 and June 30, 2010, respectively)		148,865		146,097		134,800
Total investment securities		2,022,729		1,987,378		1,635,459
Loans		4,281,260		4,263,764		4,562,288
Less allowance for loan losses		124,579		124,446		114,328
Net loans		4,156,681		4,139,318		4,447,960
Premises and equipment, net of accumulated depreciation		186,529		185,702		193,551
Goodwill		183,673		183,673		183,673
Company-owned life insurance		74,080		73,545		72,395
Accrued interest receivable		33,588		32,380		38,429
Other real estate owned, net of write-downs		28,323		31,995		42,338
Mortgage servicing rights, net of accumulated amortization and impairment reserve		13,218		13,284		16,232
Deferred tax asset		10,466		19,112		—
Core deposit intangibles, net of accumulated amortization		8,080		8,441		9,672
Other assets		69,933		73,977		83,183
Total assets	$	7,202,791	$	7,429,126	$	7,225,376
Liabilities and Stockholders’ Equity
Deposits:
Non-interest bearing	$	1,109,905	$	1,110,940	$	1,040,072
Interest bearing		4,684,760		4,820,244		4,762,250
Total deposits		5,794,665		5,931,184		5,802,322
Securities sold under repurchase agreements		435,039		536,955		453,749
Accounts payable and accrued expenses		35,395		40,400		39,741
Accrued interest payable		11,712		12,162		20,442
Long-term debt		37,480		37,491		38,023
Other borrowed funds		5,440		5,522		7,196
Subordinated debentures held by subsidiary trusts		123,715		123,715		123,715
Total liabilities		6,443,446		6,687,429		6,485,188
Stockholders’ equity:
Preferred stock		50,000		50,000		50,000
Common stock		265,639		264,932		263,317
Retained earnings		421,309		417,117		404,985
Accumulated other comprehensive income, net		22,397		9,648		21,886
Total stockholders’ equity		759,345		741,697		740,188
Total liabilities and stockholders’ equity	$	7,202,791	$	7,429,126	$	7,225,376

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CONSOLIDATED STATEMENTSOF INCOME

(Unaudited, $ in thousands, except per share data)

	Three Months ended
	June 30, 2011		March 31, 2011			June 30, 2010
Interest income:
Interest and fees on loans	$	61,475	$	62,391		$	67,501
Interest and dividends on investment securities:
Taxable		10,649		9,911			10,931
Exempt from federal taxes		1,194		1,171			1,173
Interest on deposits in banks		227		367			257
Interest on federal funds sold		6		3			5
Total interest income		73,551		73,843			79,867
Interest expense:
Interest on deposits		8,903		9,871			14,496
Interest on securities sold under repurchase agreements		171		237			229
Interest on other borrowed funds		—		—			1
Interest on long-term debt		495		489			509
Interest on subordinated debentures held by subsidiary trusts		1,455		1,448			1,456
Total interest expense		11,024		12,045			16,691
Net interest income		62,527		61,798			63,176
Provision for loan losses		15,400		15,000			19,500
Net interest income after provision for loan losses		47,127		46,798			43,676
Non-interest income:
Other service charges, commissions and fees		7,768		7,380			7,380
Service charges on deposit accounts		4,385		4,110			4,759
Income from the origination and sale of loans		4,109		3,445			4,186
Wealth management revenues		3,483		3,295			3,199
Investment securities gains, net		16		2			15
Other income		1,830		1,927			1,498
Total non-interest income		21,591		20,159			21,037
Non-interest expense:
Salaries, wages and employee benefits		27,889		27,702			27,379
Occupancy, net		4,013		4,215			3,963
Furniture and equipment		3,129		3,220			3,356
Outsourced technology services		2,212		2,241			2,449
FDIC insurance premiums		1,629		2,466			2,667
Other real estate owned expense, net of income		2,042		1,711			2,980
Mortgage servicing rights amortization		671		807			1,115
Mortgage servicing rights impairment (recovery)		27		(347	)		271
Core deposit intangibles amortization		361		362			440
Other expenses		12,219		10,581			10,806
Total non-interest expense		54,192		52,958			55,426
Income before income tax expense		14,526		13,999			9,287
Income tax expense		4,672		4,493			2,628
Net income		9,854		9,506			6,659
Preferred stock dividends		853		844			853
Net income available to common shareholders	$	9,001	$	8,662		$	5,806
Basic earnings per common share	$	0.21	$	0.20		$	0.14
Diluted earnings per common share	$	0.21	$	0.20		$	0.14

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CONSOLIDATED STATEMENTSOF INCOME

(Unaudited, $ in thousands, except per share data)

	Six Months ended
	June 30, 2011			June 30, 2010
Interest income:
Interest and fees on loans	$	123,866		$	134,395
Interest and dividends on investment securities:
Taxable		20,560			22,133
Exempt from federal taxes		2,365			2,339
Interest on deposits in banks		594			481
Interest on federal funds sold		9			18
Total interest income		147,394			159,366
Interest expense:
Interest on deposits		18,774			29,774
Interest on securities sold under repurchase agreements		408			423
Interest on other borrowed funds		—			2
Interest on long-term debt		984			1,428
Interest on subordinated debentures held by subsidiary trusts		2,903			2,894
Total interest expense		23,069			34,521
Net interest income		124,325			124,845
Provision for loan losses		30,400			31,400
Net interest income after provision for loan losses		93,925			93,445
Non-interest income:
Other service charges, commissions and fees		15,148			14,252
Service charges on deposit accounts		8,495			9,357
Income from the origination and sale of loans		7,554			7,486
Wealth management revenues		6,778			6,213
Investment securities gains, net		18			42
Other income		3,757			3,195
Total non-interest income		41,750			40,545
Non-interest expense:
Salaries, wages and employee benefits		55,591			55,457
Occupancy, net		8,228			8,105
Furniture and equipment		6,349			6,697
Outsourced technology services		4,453			4,698
FDIC insurance premiums		4,095			5,123
Other real estate owned expense, net of income		3,753			3,521
Mortgage servicing rights amortization		1,478			2,248
Mortgage servicing rights impairment (recovery)		(320	)		221
Core deposit intangibles amortization		723			879
Other expenses		22,800			21,222
Total non-interest expense		107,150			108,171
Income before income tax expense		28,525			25,819
Income tax expense		9,165			8,030
Net income		19,360			17,789
Preferred stock dividends		1,697			1,697
Net income available to common shareholders	$	17,663		$	16,092
Basic earnings per common share	$	0.41		$	0.43
Diluted earnings per common share	$	0.41		$	0.43

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AVERAGEBALANCESHEETS

(Unaudited, $ in thousands)

	For the three months ended
	June 30, 2011								March 31, 2011								June 30, 2010
	Average Balance		Interest			Average Rate			Average Balance		Interest			Average Rate			Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1)(2)	$	4,269,637	$	61,926			5.82	%	$	4,303,575	$	62,836			5.92	%	$	4,520,119	$	67,964			6.03	%
Investment securities (2)		2,019,187		12,533			2.49			1,948,422		11,758			2.45			1,586,080		12,780			3.23
Interest bearing deposits in banks		359,446		227			0.25			587,804		367			0.25			407,656		257			0.25
Federal funds sold		3,871		6			0.62			2,242		3			0.54			4,408		5			0.45
Total interest earnings assets		6,652,141		74,692			4.50			6,842,043		74,964			4.44			6,518,263		81,006			4.98
Non-earning assets		617,221								622,539								679,514
Total assets	$	7,269,362							$	7,464,582							$	7,197,777
Interest bearing liabilities:
Demand deposits	$	1,263,466	$	847			0.27		$	1,249,283	$	834			0.27		$	1,116,216	$	870			0.31
Savings deposits		1,711,210		1,753			0.41			1,744,747		2,000			0.46			1,465,527		2,327			0.64
Time deposits		1,780,542		6,303			1.42			1,874,515		7,037			1.52			2,209,155		11,299			2.05
Repurchase agreements		469,459		171			0.15			569,881		237			0.17			465,573		229			0.20
Other borrowed funds		5,459		—			—			5,695		—			—			5,562		1			0.07
Long-term debt		37,485		495			5.30			37,496		489			5.29			38,170		509			5.35
Subordinated debentures held by by subsidiary trusts		123,715		1,455			4.72			123,715		1,448			4.75			123,715		1,456			4.72
Total interest bearing liabilities		5,391,336		11,024			0.82			5,605,332		12,045			0.87			5,423,918		16,691			1.23
Non-interest bearing deposits		1,089,909								1,070,744								982,053
Other non-interest bearing liabilities		47,791								51,013								60,457
Stockholders’ equity		740,326								737,493								731,349
Total liabilities and stockholders’ equity	$	7,269,362							$	7,464,582							$	7,197,777
Net FTE interest income			$	63,668							$	62,919							$	64,315
Less FTE adjustments (2)				(1,141	)							(1,121	)							(1,139	)
Net interest income from consolidated statements of income			$	62,527							$	61,798							$	63,176
Interest rate spread							3.68	%							3.57	%							3.75	%
Net FTE interest margin (3)							3.84	%							3.73	%							3.96	%
Cost of funds, including non-interest bearing demand deposits (4)							0.68	%							0.73	%							1.05	%

(1) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.

(2) Interest income and average rates for tax exempt loans and securities are presented on a FTE basis.

(3) Net FTE interest margin during the period equals the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by average interest earning assets for the period.

(4) Calculated by dividing total interest on total interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.

15

AVERAGEBALANCESHEETS

(Unaudited, $ in thousands)

	For the six months ended June 30,
	2011								2010
	Average Balance		Interest			Average Rate			Average Balance		Interest			Average Rate
Interest earning assets:
Loans (1)(2)	$	4,286,512	$	124,762			5.87	%	$	4,511,518	$	135,324			6.05	%
Investment securities (2)		1,984,000		24,291			2.47			1,539,216		25,822			3.38
Interest bearing deposits in banks		472,994		594			0.25			381,312		481			0.25
Federal funds sold		3,061		9			0.59			10,796		18			0.34
Total interest earnings assets		6,746,567		149,656			4.47			6,442,842		161,645			5.06
Non-earning assets		619,837								683,664
Total assets	$	7,366,404							$	7,126,506
Interest bearing liabilities:
Demand deposits		1,256,414		1,681			0.27	%		1,114,857		1,709			0.31	%
Savings deposits		1,727,886		3,753			0.44			1,443,953		4,643			0.65
Time deposits		1,827,269		13,340			1.47			2,233,631		23,422			2.11
Repurchase agreements		519,392		408			0.16			460,125		423			0.19
Othered borrowed funds		5,577		—			—			6,016		2			0.07
Long-term debt		37,490		984			5.29			54,606		1,428			5.27
Subordinated debentures held by by subsidiary trusts		123,715		2,903			4.73			123,715		2,894			4.72
Total interest bearing liabilities		5,497,743		23,069			0.85			5,436,903		34,521			1.28
Non-interest bearing deposits		1,080,379								970,966
Other non-interest bearing liabilities		49,395								61,964
Stockholders’ equity		738,887								656,673
Total liabilities and stockholders’ equity	$	7,366,404							$	7,126,506
Net FTE interest income			$	126,587							$	127,124
Less FTE adjustments (2)				(2,262	)							(2,279	)
Net interest income from consolidated statements of income			$	124,325							$	124,845
Interest rate spread							3.62	%							3.78	%
Net FTE interest margin (3)							3.78	%							3.98	%
Cost of funds, including non-interest bearing demand deposits (4)							0.71	%							1.09	%

(1) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees net of deferred loan costs, which is not material.

(2) Interest income and average rates for tax exempt loans and securities are presented on a FTE basis.

(3) Net FTE interest margin during the period equals the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by average interest earning assets for the period.

(4) Calculated by dividing total interest on total interest bearing liabilities by the sum of total interest bearing liabilities plus non-interest bearing deposits.

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Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principals in the United States of America, or GAAP, this release contains the following non-GAAP financial measures that management uses to evaluate capital adequacy: (i) tangible book value per common share; (ii) net tangible book value per common share; (iii) tangible common stockholders’ equity to tangible assets; (iv) net tangible common stockholders’ equity to tangible assets; and (v) tangible assets.

For purposes of computing tangible book value per common share, tangible book value equals common stockholders’ equity less goodwill and other intangible assets (except mortgage servicing rights). Tangible book value per common share is calculated as tangible common stockholders’ equity divided by shares of common stock outstanding.

For purposes of computing net tangible book value per common share, net tangible book value equals common stockholders’ equity less goodwill (adjusted for associated deferred tax liability) and other intangible assets (except mortgage servicing rights). Net tangible book value per common share is calculated as net tangible common stockholders’ equity divided by shares of common stock outstanding. The Company’s goodwill as of June 30, 2011 was $184 million, of which approximately $159 million is deductible for income tax purposes over an original period of 15 years. The calculation of net tangible book value takes into account the full amount of tax benefit of approximately $60 million associated with deductible goodwill assuming the Company will continue to have income sufficient to allow it to recognize this benefit in future periods.

For purposes of computing tangible common stockholders’ equity to tangible assets, tangible assets equals total assets less goodwill and other intangible assets (except mortgage servicing rights). Tangible common stockholders’ equity to tangible assets is calculated as tangible common stockholders’ equity divided by tangible assets.

For purposes of computing net tangible common stockholders’ equity to tangible assets, net tangible common stockholders’ equity equals common stockholders’ equity less goodwill (adjusted for associated deferred tax liability) and other intangible assets (except mortgage servicing rights). Net tangible common stockholders’ equity to tangible assets is calculated as net tangible common stockholders’ equity divided by tangible assets.

Management believes that these non-GAAP financial measures are valuable indicators of a financial institution’s capital strength since they eliminate intangible assets from stockholders’ equity and retain the effect of unrealized losses on securities and other components of accumulated other comprehensive income (loss) in stockholders’ equity. Management also believes that such financial measures, which are intended to complement the capital ratios defined by banking regulators, are useful to investors in evaluating the Company’s performance due to the importance that analysts place on these ratios and also allow investors to compare certain aspects of our capitalization to other companies. These non-GAAP financial measures, however, may not be comparable to similarly titled measures reported by other companies because other companies may not calculate these non-GAAP measures in the same manner. As a result, the usefulness of these measures to investors may be limited, and they should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP.

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The following table reconciles the above described non-GAAP financial measures to their most directly comparable GAAP financial measures as of the dates indicated.

NON-GAAP FINANCIAL MEASURES (Unaudited; $ in thousands except share and per share data)	June 30, 2011			March 31, 2011			June 30, 2010
Total stockholders’ equity (GAAP)	$	759,345		$	741,697		$	740,188
Less goodwill and other intangible assets (excluding mortgage servicing rights)		191,792			192,155			193,391
Less preferred stock		50,000			50,000			50,000
Tangible common stockholders’ equity (Non-GAAP)	$	517,553		$	499,542		$	496,797
Add deferred tax liability for deductible goodwill		60,499			60,499			60,499
Net tangible common stockholders’ equity (Non-GAAP)	$	578,052		$	560,041		$	557,296
Common shares outstanding		42,964,921			42,961,253			42,803,349
Book value per common share	$	16.51		$	16.10		$	16.12
Tangible book value per common share	$	12.05		$	11.63		$	11.61
Net tangible book value per common share	$	13.45		$	13.04		$	13.02
Total assets (GAAP)	$	7,202,791		$	7,429,126		$	7,225,376
Less goodwill and other intangible assets (excluding mortgage servicing rights)		191,792			192,155			193,391
Tangible assets (Non-GAAP)	$	7,010,999		$	7,236,971		$	7,031,985
Tangible common stockholders’ equity to tangible assets (Non-GAAP)		7.38	%		6.90	%		7.06	%
Net tangible common stockholders’ equity to tangible assets (Non-GAAP)		8.24	%		7.74	%		7.93	%

First InterstateBancSystem, Inc.

P.O. Box 30918 Billings, Montana 59116 (406) 255-5390

www.FIBK.com

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