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, 2001
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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 __________________
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)
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
Table of Contents
PAGE
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Net Assets Available for Benefits 3
Changes in Net Assets Available for Benefits 4
Notes to Financial Statements 5-9
SUPPLEMENTARY INFORMATION
Schedule of Assets Held for Investment Purposes at Year End 10
[EIDE BAILLY LLP LOGO]
INDEPENDENT AUDITORS' REPORT
Executive Committee of the
Savings and Profit Sharing Plan
for Employees of First Interstate BancSystem, Inc.
Billings, Montana
We have audited the accompanying statement of net assets available for benefits
of the SAVINGS AND PROFIT SHARING PLAN FOR EMPLOYEES OF FIRST INTERSTATE
BANCSYSTEM, INC. as of December 31, 2001, and the related statement of changes
in net assets available for benefits for the year ended December 31, 2001. 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. The financial statements of the SAVINGS AND PROFIT SHARING PLAN FOR
EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC. as of December 31, 2000 were
audited by other auditors whose report dated May 31, 2001, expressed an
unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 Plan as of
December 31, 2001, and the changes in net assets available for benefits for the
year ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes at Year End is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
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. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Eide Bailly LLP
Billings, Montana
June 19, 2002
1
INDEPENDENT AUDITORS' REPORT
Administrative Committee of the
Savings and Profit Sharing Plan for Employees of
First Interstate BancSystem, Inc.:
We have audited the accompanying statement of net assets available for benefits
of the Savings and Profit Sharing Plan for Employees of First Interstate
BancSystem, Inc. as of December 31, 2000. This financial statement is the
responsibility of the Plan's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents 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, 2000 in conformity with accounting principles generally accepted in
the United States of America.
/s/ KPMG LLP
Billings, Montana
May 31, 2001
2
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2001 AND 2000
2001 2000
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ASSETS
Investments, at fair value
Registered investment companies $ 39,757,565 $ 39,093,997
Employer securities 20,849,097 18,581,811
Participant loans 113,250 137,508
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60,719,912 57,813,316
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Receivables
Employer's contributions 18,399 -
Accrued interest 11,621 17,648
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30,020 17,648
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Cash - 59,056
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NET ASSETS AVAILABLE FOR BENEFITS $ 60,749,932 $ 57,890,020
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See notes to financial statements. 3
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, 2001
Additions to net assets attributed to:
Investment income
Net depreciation in fair value
of investments $ (1,305,023)
Dividends 570,911
Interest 10,770
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(723,342)
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Contributions
Employer's 3,143,755
Participants' 2,964,314
Rollovers 147,687
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6,255,756
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Total additions 5,532,414
Deductions from net assets
attributed to:
Benefits paid to participants 2,672,502
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Net increase 2,859,912
Net assets available for benefits
Beginning of year 57,890,020
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End of year $ 60,749,932
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See notes to financial statements. 4
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE 1 - DESCRIPTION OF PLAN AND SIGNIFICANT ACCOUNTING POLICIES
Description of Plan
The following description of the First Interstate BancSystem, Inc. (Company)
Savings and Profit Sharing Plan for Employees of First Interstate BancSystem,
Inc. (Plan) provides only general information. Participants should refer to the
Summary Plan Description for a more complete description of the Plan's
provisions.
General. The Plan is a defined contribution plan covering all employees of
the Company's member banks who are classified as regular-status scheduled
to work 20 hours or more per week, or if not classified as regular status
have completed 1,000 hours of service in no more than twelve consecutive
months. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions. Each year, participants may contribute up to 15 percent of
pre-tax annual compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or contribution plans. The Company makes a matching contribution of
125 percent of the first four percent of annual compensation that a
participant contributes to the Plan. At its discretion, the Company may
also make a quarterly profit sharing contribution.
Participant Accounts. Each participant's account is credited with the
participant's contributions and allocations of the Company contributions
and Plan earnings. Allocations of participant earnings are based on account
balances, as defined. Forfeited balances of terminated participants'
nonvested accounts are used to reduce future Company contributions. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Vesting. Participants are immediately vested in their contributions and any
rollover contributions plus allocated earnings thereon. Vesting in the
Company's matching and profit sharing contribution portions of their
accounts and earnings thereon is contingent upon the participant's date of
hire. Employees that were hired before January 1, 2000 and participating in
the plan before January 1, 2001 are 100 percent vested in the Company's
matching and profit sharing contributions. Employees that were hired as
regular-status working 20 hours or more per week during the fiscal year
2000 and became participants in fiscal year 2001 are also 100 percent
vested in the Company's matching and profit sharing contributions.
Employees hired in fiscal year 2001 or later are subject to a vesting
schedule based on years of service. These participants are 100 percent
vested in the Company's matching and profit sharing contributions after
three years of credited service.
Participant loans. Loans are limited to the lesser of (a) 50 percent 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 or (b) five years for all other loans. 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, 2001 ranged from
6.5 percent to 10.5 percent. Principal and interest is paid ratably through
biweekly payroll deductions.
(continued on next page) 5
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
Investment Options. Upon enrollment in the Plan, a participant may direct
contributions in a variety of registered investment companies. The most
common options are as follows:
Spartan Money Market Fund - Funds are invested in securities whose
interest is exempt from state and local income taxes.
Accessor Growth Fund - Funds are invested in equity securities with
greater than average growth characteristics.
Accessor Balanced Allocation - The Funds are divided between equity
funds and fixed-income funds.
Accessor Aggressive Growth Allocation - Funds are invested in the
domestic and international equity markets.
Accessor Growth & Income - Funds are invested in equity funds with
regard to weight, with a smaller amount of its assets in fixed-income
funds.
SEI S&P 500 Index Class E 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.
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 percent of the
participant's account balance, as defined.
As of December 31, 2001 and 2000, plan assets invested in Company
Stock were 34 percent and 32 percent of net assets available for
benefits, respectively.
Payment of Benefits. After termination of service due to death, disability,
or retirement, a participant with an account balance of more than $5,000
may, on any distribution date following termination, elect to receive
either a lump sum distribution of his/her vested account balance or
installment payments (annually, quarterly, or monthly) over a specified
period of time, not exceeding ten years. Any participant account balance
with less than $5,000 is distributed in a lump sum. For termination of
service due to other reasons, a participant may receive the value of the
vested interest in his/her account as a lump sum distributions. A
participant may elect to receive a hardship distribution, without
termination of employment, if he/she qualifies under the hardship
withdrawal rules.
Member Banks. 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
i_Tech Corporation
(continued on next page) 6
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
Forfeited Accounts. At December 31, 2001 and 2000, forfeited non-vested
accounts totaled $14,509 and $0, respectively. These accounts will be used
to reduce future employer contributions. During the year ended December 31,
2001, $2,119 was used to reduce current employer contributions.
Basis of Accounting
The accompanying financial statements have been prepared on an accrual basis and
present the net assets available for participant benefits and changes in those
net assets.
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 and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments in registered investment companies are valued at 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 $42 and $40 at September 30, 2001 and
2000, respectively.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Payment of Benefits
Benefits are recorded when paid.
Income Tax Status
The Plan obtained its latest determination letter dated January 9, 1998, in
which the Internal Revenue Service (IRS) stated that the Plan, as then designed,
was in compliance with the applicable requirements of Internal Revenue Code
(IRC). The Plan has been amended since receiving the determination letter and
has been submitted to the IRS for a new determination letter. In the opinion of
the Plan Administrator, the Plan and its underlying trust have been operated
within the terms of the Plan and should remain qualified under applicable
provisions of the IRC.
(continued on next page) 7
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE 2 - INVESTMENTS
The following presents the individual investments (all participant-directed)
that represent 5 percent or more of the Plan assets available for benefits:
2001 2000
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NUMBER Number
OF UNITS FAIR VALUE of units Fair Value
---------- ------------ ---------- -------------
Registered investment companies, fair value
as determined by quoted market price:
Accessor Funds
Growth Allocation 659054 $ 8,567,708 248339 $ 6,652,997
Balanced Allocation 402860 5,579,605 - -
Aggressive Growth Allocation 442935 5,572,119 - -
Growth & Income Allocation 383962 5,241,078 - -
Value & Income 71609 1,280,370 380073 7,833,297
Small to Mid Cap Fund - - 287574 5,739,969
SEI S&P 500 Index Class E 105478 3,736,029 80396 3,284,181
Spartan Money Market Fund 3241427 3,241,427 3193815 3,193,815
Employer securities, fair value as
determined by appraisal:
First Interstate BancSystem, Inc. Stock 496407 20,849,097 488995 18,581,811
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$ 54,067,433 $ 45,286,070
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During 2001, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$1,305,023 as follows:
Investments at fair value as determined
by quoted market price:
Registered investment companies $ (3,255,807)
Investments at fair value as determined
by appraisal:
Employer securities 1,950,784
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$ (1,305,023)
============
NOTE 3 - ADMINISTRATIVE EXPENSES
Fidelity Management Trust Company holds the Plan's assets in trust and Rocky
Mountain Employee Benefits, Inc. performs the recordkeeping for the Plan,
exclusive of Company Stock and participant loans. The Company pays the
administrative fees related to these services performed for the Plan.
(continued on next page) 8
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
NOTE 4 - PLAN TERMINATION
Although the Company has not expressed any intent to do so, they have the right
to terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
NOTE 5 - RELATED PARTY TRANSACTIONS
The Company performs the recordkeeping for the Plan's Company Stock and
participant loans. Fees were paid from the participant accounts for the
processing of loans and distributions totaling $7,557 for the year ended
December 31, 2001. These fees are considered customary and reasonable for such
services.
Certain Plan investments are shares of mutual funds managed by Fidelity
Investments. Fidelity Investments is a trustee of certain Plan assets and,
therefore, these transactions qualify as party-in-interest.
NOTE 6 - SIGNIFICANT PLAN AMENDMENTS
Effective January 1, 2001 the Plan was amended and restated, with retroactive
effect to the extent necessary, to comply with the requirements of the Uruguay
Round Agreements Act, the Uniformed Services Employment and Reemployment Rights
Act of 1994, the Small Business Job Protection Act, the Taxpayer Relief Act of
1997, the Internal Revenue Service Restructuring and Reform Act of 1998, and
other applicable provisions of the Internal Revenue Code, Treasury Regulations
and Internal Revenue Service (referred to as "GUST").
NOTE 7 - SUBSEQUENT EVENT
On March 28, 2002 the Board of Directors of First Interstate BancSystem, Inc.
resolved to change the Plan year end from December 31, to December 30 for
administrative purposes. This change will result in a short Plan year ending
December 30, 2002 and a new full Plan year beginning December 31, 2002.
9
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF
FIRST INTERSTATE BANCSYSTEM, INC.
SUPPLEMENTARY INFORMATION
SAVINGS AND PROFIT SHARING PLAN
FOR EMPLOYEES OF FIRST INTERSTATE BANCSYSTEM, INC.
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT YEAR END
DECEMBER 31, 2001
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EIN 81-0331430
PN 003
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(a) (b) Identity of issue, borrower, lessor, (c) Description of investment including (d) Cost (e) Current
or similar party maturity date, rate of interest, value
collateral, par or maturity value
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* First Interstate BancSystem, Inc. Employer securities N/A $ 20,849,097
Accessor Funds Growth Allocation N/A 8,567,708
Accessor Funds Balanced Allocation N/A 5,579,605
Accessor Funds Aggressive Growth Allocation N/A 5,572,119
Accessor Funds Growth and Income Allocation N/A 5,241,078
SEI Investments S&P 500 Index N/A 3,736,029
* Fidelity Investments Spartan Money Market, 1.99% N/A 3,241,427
Harbor Fund International N/A 1,601,932
Accessor Funds Growth Fund N/A 1,599,773
Accessor Funds Value and Income N/A 1,280,370
Accessor Funds Small to Mid Cap N/A 978,433
Federated Investors GNMA Institutional N/A 641,602
Columbia Funds Fixed Income N/A 552,482
Accessor Funds Income and Growth Allocation N/A 471,920
Vanguard Group Intermediate Term Treasury N/A 427,301
Accessor Funds Income Allocation N/A 232,784
Participant loans Interest ranging from 6.5 to 10.5% -0- 113,250
* Fidelity Investments Cash reserves, 1.96% N/A 24,182
Accessor Funds Mortgage Securities N/A 2,973
Accessor Funds Intermediate Fixed Income N/A 2,968
Accessor Funds Short Interest Fixed Income N/A 2,879
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$ 60,719,912
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* Party-in-interest to the Plan
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 24, 2002 /s/ BRUCE C. PARKER
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Date Bruce C. Parker
President, Trust Investment Services
FIRST INTERSTATE BANCSYSTEM, INC.
EXHIBIT INDEX
Exhibit Document
23.1 Consent of Eide Bailly LLP, Independent Certified Public Accountants.
23.2 Consent of KPMG LLP, Independent Certified Public Accountants.