[First Interstate Bancorp letterhead]


Dear First Interstate Shareholder:

   On November 6, 1995, First Interstate announced that it had entered into a
merger agreement with First Bank System, Inc. ("FBS") pursuant to which First
Interstate would merge with a subsidiary of FBS and each of your shares of
First Interstate common stock would be converted into 2.6 shares of FBS
common stock.

   On November 13, 1995, Wells Fargo & Co. announced that it intended to
commence an unsolicited exchange offer in which holders of First Interstate
common stock would have the right to exchange each of their shares for
two-thirds of a share of Wells common stock. (The Wells exchange offer has
not yet commenced and it may be several weeks or longer before you receive
any materials with respect to it.) This announcement followed the First
Interstate Board's rejection of Wells' earlier unsolicited proposal to merge
with First Interstate in a transaction in which First Interstate's
shareholders would receive .625 (or possibly .65) shares of Wells common
stock for each First Interstate share.

   Your Board of Directors believes that the merger with FBS is in the best
interests of First Interstate and its shareholders. ACCORDINGLY, THE BOARD
RECOMMENDS THAT YOU REJECT THE WELLS FARGO & CO. EXCHANGE OFFER
AND, WHEN AND IF SUCH OFFER IS COMMENCED, NOT TENDER ANY OF YOUR SHARES TO
WELLS FARGO.

   Your Board's consideration of Wells Fargo's revised proposal and the FBS
Merger follows an extensive process of evaluating the company's strategic
alternatives for enhancing shareholder value. This process began several
months prior to Wells' initial unsolicited bid and included discussions and
evaluations of several potential merger possibilities, including one with
Wells Fargo. The record is clear. After Wells made its initial takeover
proposal public on October 18, on behalf of your Board I engaged in extensive
discussions with Wells Fargo, as well as with other potential merger
candidates. A full account of that process is contained in the Schedule 14D-9
filed today by First Interstate with the Securities and Exchange Commission
and enclosed with this letter.

   The First Interstate Board believes that the strategic combination of First
Interstate and FBS creates a dynamic, lower risk, multi-state banking
alliance that will provide substantial near-term and long-range value to you.
Your Board and management believe that this combination offers better value
to First Interstate's shareholders than the Wells offer.



    


   In reaching its determination to reaffirm the FBS Merger and recommend
rejection of the Wells Offer, the First Interstate Board relied upon a number
of factors, including:

o   the greater earnings per share and cash flow per share of an FBS
    combination compared to a Wells Fargo combination;

o   the higher dividends per share to be received by First Interstate
    shareholders as a result of the FBS merger than with a Wells Fargo
    combination;

o   the reduced credit risk resulting from operations in 21 states under the
    FBS merger as contrasted with the substantially greater exposure to the
    California market that would result from a merger with Wells;

o   the superior market position created by an FBS merger--a top three
    ranking, in terms of deposit market share, in ten states--as opposed to
    increasing First Interstate's top three ranking in only one state in a
    Wells merger;

o   the substantial loss of revenue, as compared to Wells' public statements,
    that would result from Wells' proposed branch closings, other cost saving
    measures and antitrust divestitures (revenue losses not present in the
    FBS merger);

o   the dependence of the value of the Wells offer on Wells' sustaining its
    high price-to-earnings ratio relative to other high quality bank stocks,
    including FBS;

o   Wells' use of purchase accounting for the transaction, which creates
    additional goodwill in excess of $7 billion, which would substantially
    reduce future earnings and returns on equity; and

o   the opinions of First Interstate's independent financial advisors,
    Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated, that the
    exchange ratio of the FBS Merger is fair to First Interstate
    shareholders.

   We understand very well why our highly successful multi-state franchise,
with its operating scope and strengths, is attractive to Wells Fargo. Our
concern is not with Wells' interests, but the strategic alternative that is
best for you.

   We expect the First Interstate/FBS combined company to achieve 1997 EPS
accretion of 23% and a return on equity of 27.5%, with virtually no tangible
book value dilution. Because cost reductions would be achieved through back
office and staff cuts and systems integration, they can be accomplished
quickly and with minimal impact to our customers and revenue. Under pooling
accounting, the combined company will avoid the creation of goodwill and
still be able to continue returning excess capital to shareholders through
share repurchases. The company will have a reduced risk profile and an
expanded foundation for future business growth across our 21-state service
territory. It will have an exceptional, low-cost deposit base and be a leader
in pioneering alternative delivery systems. And the combined company will be
the number one ranked bank in the country in corporate cards, purchasing
cards, corporate trust and ATM/POS, in addition to being among the top five
banks in merchant card processing and asset management.



    


   Your Board and management are convinced that the FBS merger is a winning
combination for the long-term benefit of our shareholders. It is unfortunate
that a respected institution like Wells Fargo would jeopardize its reputation
by ignoring your Board of Directors' carefully considered decision and
choosing instead to recklessly pursue its hostile takeover proposal. We will
not be deterred or distracted from completing our pending merger with First
Bank on your behalf.

   A more detailed description of the factors considered by your Board of
Directors is contained in the Schedule 14D-9. We urge you to read it
carefully and in its entirety so that you will be fully informed as to the
Board's recommendation.

   The date of the special meeting of First Interstate's shareholders which
will be called to consider the proposed merger with FBS has not yet been set.
First Interstate is not soliciting proxies from shareholders with respect to
the FBS merger at this time. A Joint Proxy Statement/Prospectus of First
Interstate and FBS will be mailed to the Company's shareholders in connection
with the special meeting of each company's shareholders which will be
called to vote upon the merger.

                                          On behalf of the Board of
                                          Directors,

                                          /s/ William E. B. Siart

                                          William E. B. Siart
                                          Chairman and Chief Executive
                                          Officer